Audit Rips Subterfuge by Fed Agency in California Water Project

(CN) – A federal agency contributed $50 million to a $16 billion water project in California under the nose of Congress and taxpayers, according to a federal audit released Friday.

The audit says for several years the U.S. Bureau of Reclamation picked up the tab for California water districts and gave federal taxpayer dollars to a contentious plan to divert freshwater around the West Coast’s largest estuary through a pair of 35-mile tunnels.

According to the audit by the U.S. Interior Department’s inspector general, the Bureau of Reclamation under President Barack Obama shifted millions in general purpose funds toward a plan to restore the Sacramento-San Joaquin River Delta and essentially subsidized planning costs that were supposed to be paid by local water suppliers.

“The bureau obtained this $50 million over a seven-year span by using a complex, obscure process that was not disclosed in the annual congressional budget justifications,” the audit states.

In 2014, Gov. Jerry Brown shifted focus of the restoration project to his plan to dig twin tunnels through the delta, called California WaterFix. While that project’s mammoth $16 billion estimated price tag is supposed to be funded by California and water contractors, the federal government has contributed $84 million – 33 percent of what’s been spent through 2016, according to the audit.

Auditors blasted the bureau for classifying the $50 million as nonreimbursable, meaning the funds won’t be repaid by the water districts benefitting from the project.

“The bureau was unable to provide documentation or analysis supporting its determination that these funds were nonreimbursable, and we question the bureau’s interpretation of this legal authority,” the audit states.

Supporters of the WaterFix, including Brown, say the project is necessary to update California’s massive water supply network and protect it from climate change and earthquakes. The tunnels will divert river water from the delta south to Central Valley farmers and cities like Los Angeles. A similar plan was rejected by voters in the 1980s, but state officials are moving forward this time without a ballot initiative.

Brown has made the project a focal point of his fourth and final term and asked a state court in July to approve $11 billion in bonds to fund the project. State officials hope to begin construction on the tunnels in 2018 and the project is expected to take over a decade to complete.

Environmentalists and local farmers paint the project as being disastrous for the delta’s ecosystem and its once-bountiful salmon species. They argue that diverting river water will harm water quality and allow sea water from the San Francisco Bay to push further into the delta.

Restore the Delta, a group committed to stopping the tunnels, says researchers have known for years that the federal government was misusing taxpayer funds. It says the project can’t be completed without federal subsidies.

“Funding has been misused to finance the planning of the delta tunnels,” the group’s executive director Barbara Barrigan-Parrilla said in a statement. “It is a boondoggle that is being shoved onto 98 percent of Californians who will be paying for generations.”

The Bureau of Reclamation oversees the Central Valley Project, which delivers water to many Central Valley farmers and water districts through a series of canals and aqueducts. Its main source of water comes from Shasta Lake, the state’s largest reservoir.

In response to the audit, the bureau said it will no longer provide funds to the project without going through Congress and other stakeholders, but that it largely disagrees with the audit findings. It countered that the funds provided to the state were “properly vetted, reviewed and awarded appropriately.”

“Reclamation contends all actions it took with respect to the [project] were done with good faith and were as transparent as possible during the process,” the response letter states.

State auditors are scheduled to release their findings on Brown’s WaterFix project in October. The audit will evaluate the California Department of Water Resources’ role in organizing the project and reveal whether the state dedicated general fund money toward the tunnels.



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