California Suit Seeks to Extend Water Contracts

SACRAMENTO, Calif. (CN) – Capping years of debate over the financial future of the state’s critical water delivery system, California sued in state court Tuesday to validate contract extensions with its largest water suppliers for another 67 years. 

The move, which environmental groups could still challenge, purports to give the state the financial flexibility needed to renovate the State Water Project. If approved by a judge, contracts with 29 water suppliers will be extended through the year 2085.

In the Sacramento Superior Court filing, the California Department of Water Resources says the extensions will enable the state to take out new revenue bonds in order to jump start badly needed infrastructure updates to the State Water Project.

The agency initially agreed on the contract amendments in 2014 with the water agencies and has been conducting public hearings and environmental review since.

“The contract extension amendments extend the terms of the water supply contracts, and amend other financial provisions in the contracts to ensure that the State Water Project is properly managed and financed,” the nine-page complaint states.

In operation since the 1960s, the State Water Project is the country’s largest state-built water system and delivers water to more than 25 million California residents, businesses and farmers. With many of the state’s contracts with water suppliers set to expire in 2035, officials argue that updating the contracts will allow the state to take out new and more favorable bonds, which traditionally carry 30-year terms.

But many environmental groups and some Northern California lawmakers see the extensions as a back-handed way to help fund the Sacramento-San Joaquin Delta tunnels project.

Pushed by outgoing Gov. Jerry Brown, the estimated $17 billion project, now called the California WaterFix, proposes two 30-mile-long tunnels that would divert water around the delta near Sacramento and to farms and cities to the south. The decades-old plan has been routinely hampered by project designs, lack of funding and court challenges, despite Gov. Brown’s efforts.

Critics claim the extensions don’t clearly outline where the revenue bonds will be spent or the potential environmental impact of maintenance repairs.

Assemblyman Jim Frazier and the Legislative Delta Caucus have long-opposed the contract extensions and have argued that the contracts will allow the department to shroud the true cost of the WaterFix.

“We must have a complete picture of the financial, economic and environmental impacts the state water project contract extensions will have. Not just today but for years to come,” Frazier, D-Oakley, said in September following a legislative hearing on the contract extensions. “I have deep concerns about extending the expiration date of all of the contracts until Dec. 31, 2085 – a 67-year extension which the department could not adequately justify.”

During the September hearing, the department assured lawmakers that the contract extensions would not be used to finance bonds for the WaterFix.

The filing not only comes in the final weeks of Gov. Brown’s term, but on the eve of a major vote by the State Water Resources Control Board concerning new river flow requirements. The water board is scheduled Wednesday to decide whether to increase minimum flow requirements on the state’s second largest river and in turn cut supplies for San Francisco and farmers who rely on the river system.

The department did not respond immediately to a request for comment on the filing Tuesday afternoon.

%d bloggers like this: