“General Bond Resolution” could fund twin tunnels project in stages

Money tunnel

Environmental groups have been strongly critical of the Department of Water Resources’ “blank check” Delta Program Revenue Bond / General Bond Resolution..  The General Bond Resolution is expected to fund Governor Newsom’s Delta tunnel project, which is currently estimated to cost $15.9 billion.

The State Water Contractors have countered that DWR is simply “validating its own authority to issue revenue bonds to raise funds.”

In reality DWR’s Delta Program General Bond Resolution goes far beyond a resolution for a single project.  It is a sweeping assertion of unlimited authority to issue bonds for an open-ended “Delta Program.”  The General Bond Resolution states

Delta Program means the environmental review, planning, engineering, design, and, if and when the Department determines to be appropriate, acquisition, construction, operation and maintenance of facilities for the conveyance of water in, about and through the Sacramento-San Joaquin Delta, subject to such further specification thereof as the Department in its discretion may adopt. Delta Program facilities may include, but are not limited to, water diversion intake structures located on the Sacramento River and a tunnel to convey water to Banks Pumping Plant.  (emphasis added.)

The Delta Program General Bond Resolution authorizes bonds to be issued for “phases” of the “Delta Program.” Governor Gavin Newsom’s two-intake, one tunnel project could be just the first “phase” of the “Delta Program.” Later phases could include a second tunnel and the other three intakes for DWR’s original five-intake, twin tunnel project.

Sacramento County’s response to the Validation Complaint explains how the General Bond Resolution goes far beyond the authorizing statute:

[DWR] is required pursuant to Water Code section 11701 to “prepare preliminary costs estimates, an estimate of the amount required to be raised for those purposes by the issuance of bonds, and statement of the probable amount of money, property, materials, or labor, if any, to be contributed from other sources in aid thereof,” and to “adopt a resolution . . . authorizing the issuance of bonds for the purpose of obtaining funds in an amount not in excess of that estimated to be required for those purposes.”  (emphasis added.)

DWR did not include any cost estimates in the General Bond Resolution, and is proposing to provide the cost estimates to the State Treasurer for each “phase” of the Delta Program in the future.

Delta Legacy Communities, Inc. argued in a separate response that “the Department’s assertion of the right to arbitrarily increase the amounts borrowed for a particular project appears to be contrary to the intent of Water Code section 11701 and is not in the public interest.”  Delta Legacy Communities further argued that “the Department’s attempted assumption of the right to issue unlimited bonds to build arbitrary, unspecified future facilities, is a de facto assumption of powers reserved to the legislature, and against the separation of powers in Article III, section 3 of the California Constitution.”

DWR is also proposing to assume the judicial power of review of compliance of the Delta Program with applicable laws, prior to issuance of the bonds.

DWR’s Validation Complaint for the Delta Program General Bond Resolution asks the court to “permanently enjoin and restrain all persons from the institution of any action or proceeding challenging, inter alia, the validity of the Resolution and … any subsequent Supplemental Resolution and the respective terms therein.”

Instead, DWR proposes to simply certify to the Treasurer that “all conditions precedent to the commencement of acquisition or construction of any Delta Program facilities…established by law have been satisfied.”

DWR did not publish the Delta Program General Bond Resolution before approving it, nor did the California Attorney General, Xavier Beccera provide any notice of DWR’s request to approve DWR’s assertion of powers by signing DWR’s Validation Complaint.  As a result, Northern California elected representatives, Delta stakeholders, Southern California ratepayers, and taxpayers had no opportunity to comment on DWR’s sweeping assertion of powers to issue unlimited bonds for the “Delta Program” without further judicial review.

Many Delta stakeholders have filed responses to DWR’s Complaint for Validation of the Delta Program General Bond Resolution, including Northern California elected representatives through a Delta / Northern Sierra County coalition filing, taxpayers through the Howard Jarvis Taxpayers’ Association, environmental, fishing, and tribal groups, Delta water agencies, Yuba City, and a community group advocating for Delta legacy communities. The responses can be found on Maven’s Notebook website.

This post was updated on November 3.


One thought on ““General Bond Resolution” could fund twin tunnels project in stages

  1. I believe this is a clear explanation of the “blank check” that California Governor Gavin Newsom and his Department of Water Resources are now being sued over by the Sierra Club, Center for Biological Diversity, and Restore the Delta. All those concerned about the attempted permanent destruction of the Sacramento-San Joaquin Delta, winter-run Chinook salmon, and Delta smelt by this $16 billion boondoggle backed by the state and federal governments, and San Joaquin Valley water contractors give our thanks for this timely litigation.

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