GOP Uses Obama Law to Fund Dams Barred By State Water Bond

The 2014 California Water Bond mainly benefits constituents of the Democrat Party, such as environmentalists, scientists, commercial fishermen, Indian tribes and Bay-Delta farmers to the exclusion of Central Valley farmers and towns for which the federal Central Valley Project was meant to serve.

To Susan Shelly, writing in the July 9, 2018 issue of the Orange County Register, denying funding for new dam construction in California under the 2014 Water Bond as a “private interest” is “blithering idiocy” (“The blithering idiocy of California’s water crisis”).  She calls for all water regulators to be fired who can’t find a way to fund water storage as a public purpose.

Shelly states the correct reason for why bond funding is not permitted: dams are considered a “private benefit” to farmers. But Shelly, and many other journalists in California, are not aware that general obligation bonds payable by all state taxpayers cannot fund construction or enlargement of dams that provide a private benefit to farmers even though their farms are inside a public water district.  Only revenue bonds based on the principle of “user pays” can fund dams serving private parties. 

Media, Ballotopedia Sold Public Bogus Story

This problem of media inaccuracy is compounded when even the so-called non-partisan 2014 Ballotopedia voter’s guide on the water bond specifically stated $2.7 billion was designated for “water storage, dams and reservoirs.” 

And on July 24, 2018, the San Francisco Chronicle, San Jose Mercury News and the Los Angeles Times all reported that the water bond was authorized to fund new water storage projects. But the only dam-related items eligible for bond funding “in the public interest” in the 2014 water bond, are habitat restoration, flood damages, emergency repairs, water quality and recreation around new or existing dams (see Section 79753 of the water bond text here). 

Clearly, the 2014 Water Bond was mis-sold to the electorate by the media and election education organizations as funding water storage.

Enter the GOP

Now Republicans in the U.S. Senate are moving ahead with attempts to backfill the unpermitted state funding for dams. By using the 2016 Obama-signed Water Infrastructure Improvements for the Nation Act (WIIN Act), the federal Bureau of Reclamation is mandating that all central valley water districts pay off their outstanding loan balances on the federal Central Valley Project in advance.  In turn, these early pay-off monies would be used to fund from $670 million up to $1.005 billion for building new dams or enlarging existing dams. 

These new storage projects would prioritize south-of-the-bay-delta water exports (such as Westlands Water District, City of Bakersfield and the huge Metropolitan Water District of Southern California) over water and environmental interests in the San Joaquin River Delta and San Joaquin River. Dam projects under consideration for federal funding include:

* Raising the height to Shasta Dam ($1.4 billion)

* The newly-planned Temperance Flat Dam ($2.5 billion) and Sites Reservoir ($5.2 billion)

* Los Vaqueros Reservoir expansion ($795 million)
* Kern Fan Groundwater Storage Project ($171 million)
* Pachecho dam and other smaller dams.

All the above dams will be funded by federal funding, revenue bonds issued by local water districts or a confederation of regional agricultural water districts, with the state general obligation Water Bond of 2014 only funding ancillary projects such as recreational fishing facilities, “ecosystem improvements” (but not environmental damage mitigation), flood protection facilities, water quality improvements to disadvantaged communities, etc.  Water storage projects that do not provide enough non-monetized public benefits to protected “beneficiaries” will not receive state bond funding. Fifty percent of all public benefits shall be for “ecosystem improvements.”  Water storage projects must “provide measurable improvements to the Delta ecosystem” and “improve the operation of the state (not federal) water system” to receive bond funding (page 32 and 33 here). 

Circumventing the Enviros

A controversial aspect of federal policy on dam funding is that environmental organizations and the State Water Quality Control Board would not be invited to provide feedback or hold hearings in formulating biological assessments under the Endangered Species Act (ESA) of the new federally supported water storage projects. 

Friends of the River accuses the federal restructuring of the WIIN Program funding for added water storage to be a “Congressional Pork Barrel.” But only a general obligation bond, such as the 2014 State Water Bond, is possible to be turned into a slush fund. Revenue bonds are municipal bonds that finance income-producing projects and are secured by that revenue source for a single project. 

On March 3, 2020, the giant Westlands Water District in Kern County signed a contract with the federal government for accelerated repayment of its share of the loan made in 1933 that built the federal Central Valley Project. Some 75 other central valley water districts are also mandated to pay off their share of the loan balance.

Executive Director of Restore-The-Delta, Barbara Barrigan-Parilla, opposed the signing of the contract with Westlands because the Bureau of Reclamation didn’t consult with Northern California Indian tribes and Delta water users. She stated that her organization and its partners will be filing suit against this Obama-mandated loan payoff diverted by the GOP to fund dam building.

Despite that U.S. Senator Diane Feinstein initially approved the WIIN Act in 2018, calling it a “big win.” She dropped her endorsement once loan payoff proceeds were to be directed to new dam construction.

But Dem “Public” Beneficiaries OK

Notwithstanding the “public benefit” test in general obligation bonds, the 2014 California Water Bond mainly benefits constituents of the Democrat Party, such as environmentalists, scientists, commercial fishermen, Indian tribes and Bay-Delta farmers to the exclusion of Central Valley farmers and towns for which the federal Central Valley Project was meant to serve.