According to a recently complete analysis by the East
Bay Municipal Utility District on the proposed water
bond and the Delta Water Package:
"The proposed $12B GO Delta bonds would result
in debt service costs of nearly $780M/year to the
General Fund for the next 30 years."
"The state budget deficit for the next three years is
projected to be as much as $15B per year, and could
climb even higher. Even these dire projections
may not represent the worst case, should California's
economy continue to slide. The $780M debt service
burden would consume an increasing share of
discretionary state funding, without counting the $1.3B
annually that it will cost to service debt from resource
bonds already approved since 2000. Which state
programs are we willing to sacrifice to take on this
massive, additional debt?"
"State expenditures for resources-related GO
bond debt have grown rapidly, from 8% of General
Fund spending in 2000-01 to a whopping 36% in
2009-2010. Adding a $12B bond would simply
break the bank. According to State Treasurer Lockyer,
between now and 2028, the state will assume another
$225 billion in general fund bonded indebtedness.
This mounting debt burden is an unsustainable trend,
and is already interfering with the state's efforts to
address its growing environmental and resource
needs."
And it's not just costs from a GO bond. It is simply
shocking to Restore the Delta staff members that the
Governor and Legislative Leaders could be in favor of
this package during this time of economic crisis.
Look at what California's urban water users will be
expected to pay, all to support agribusiness on the
West side of the San Joaquin Valley. Also, according
to the East Bay Municipal Utility District analysis:
"The legislature has embarked on a major reform of
the state's water system, heedless of the enormous
costs involved, just when the state's financial
condition has never been more dire. A realistic
assessment of the total costs of the Delta legislation
comes to $52B to $78B or more. This includes a
series of huge capital projects: new Delta conveyance,
construction of several new surface storage
reservoirs, construction of other local water
management and delivery projects, Delta levee
strengthening, ecosystem restoration, and creation of
three new state agencies and expanded state
programs to prepare and implement the Delta Plan."
"Of this total price tag, urban SWP and CVP
customers (who comprise roughly 24 million
Californians) located south of the Delta will pay
between_$42B and $68B, likely to be amortized over
thirty years. First, these customers will pay all of
the costs of new Delta conveyance, which are
estimated between $18B and $44B. As they comprise
70% of all Californians who reside within the Delta
watershed, their cost share of all other components of
this water package (totaling approximately $34B) will
add another $24B. Paying this huge price tag via
water user fees on the water bill will result in more
than doubling of the water rates for these customers,
as well as additional huge annual water rate
increases for many years into the future."
"The costs of new Delta conveyance includes the
construction cost of building a canal or tunnel on an
eastern or western alignment, plus necessary levee
upgrades to continue through Delta operations, new
rights of way, mitigation and relocation of impacted
facilities/infrastructure. The reason for the range
($18B-$44B) in estimated costs of new Delta
conveyance is that a tunnel will be substantially more
expensive than an open canal."
"All users of water from the Delta watershed will
have to pay the $16B cost of new programs and
projects in the "Delta Plan. These costs include:
·$14B in levee repair and strengthening, plus new
staffing costs for the Delta Plan.
·$2B for ecosystem restoration not included as part of
the new Delta conveyance."
So to be clear, Delta landowners and communities,
which have riparian rights and rights to the use Delta
water for beneficial use, will now have to pay for the
restoration and mitigation needed from 50 years of
excessive water exports. And if that's not enough...
"It is expected that these activities will be funded
through a surcharge or fee on water use. $16B in
state water fees spread over 30 years is
approximately $530M per year in new state water fees,
not counting the likely fee increases over time. For the
same urban customers south of the Delta who are
financing the new Delta conveyance, this fee would
come to $11B more on their water bills."
The agricultural water districts have repeatedly
told the Legislature that they can pay neither the costs
of the new Delta conveyance, nor any fee on water
use. This would shift all the costs enumerated
above onto urban water customers in California. As a
result, urban water customers south of the Delta
carrying the full cost of a new Delta conveyance, two-
thirds of the cost of the Delta Plan, plus their share of
surface storage and regional projects. In the absence
of drastic cost-cutting, the debt service for these urban
customers could come to more than $4B/year.
"The money to pay the $52B to $78B price tag for
these programs and projects will be demanded from
the same Californians who are enduring the worst
recession since the 1930s. The state share of any
bond repayments will strain the state's already
overburdened General Fund. This long-term over-
commitment of taxpayer and ratepayer dollars must
be rigorously scrutinized by the Legislature, and the
costs scaled down to meet financial reality."
