California court ruling could threaten funding for disputed water tunnel project

SACRAMENTO, California — A California judge says a nearly 65-year-old law doesn’t allow the state to borrow the billions of dollars needed to build a major water project, a decision that could be a major source of funding for a controversial plan backed by Gov. Gavin Newsom will build a massive underground tunnel that would divert much of the state’s supply.

The Department of Water Resources approved a resolution in 2020 to borrow money for an unspecified “Delta Program.” The agency said it could borrow this money without seeking permission from the state Legislature because a law, last amended in 1959, says it would make changes to part of the State Water Project — a complex system of dams and canals that supplies water to approximately 27 million people.

But environmental groups and several Central Valley counties say the resolution was too broad. They say what the agency wants to build is a tunnel that falls outside the scope of the law. DWR’s latest proposal is to build a tunnel about 45 miles long and 35 feet wide, which could transport 161 million gallons of water per minute from the Central Valley to the densely populated southern part of the state. .

On Tuesday, after years of lengthy court proceedings, Sacramento Superior Court Judge Kenneth C. Mennemeier agreed with the counties. He said the state’s definition of the project “leaves the door open” for the state to build whatever it wants, which he said is not allowed under the law.

“While the Legislature clearly delegated broad authority to DWR, it did not delegate infinite authority,” Mennemeier wrote.

Mennemeier emphasized that his ruling was “quite limited” and applied only to the Newsom administration’s unspecified “Delta Program,” as defined in the DWR resolution.

Thomas Keeling, an attorney representing six counties and several public water agencies, said it is clear to him that the purpose of the bond resolutions passed by the Newsom administration in 2020 was to provide funding for the Delta Tunnel project. He agreed that the ruling is limited because it does not prevent the government from finding other ways to pay for the project.

“That said, it would be a mistake to downplay the significance of this decision or underestimate the obstacles that lie ahead for DWR in its next attempt to fund this taxpayer hassle,” he said.

Environmental groups and provinces opposed to the project hailed the ruling as a blow to the tunnel’s funding. The project’s price tag was once put at $16 billion, but that was an old estimate for an earlier plan. The state has not released updated estimates.

The DWR downplayed the significance of the ruling, although it said it disagrees with the decision and is considering an appeal. Margaret Mohr, the department’s deputy director of communications, said the judge essentially rejected the broadness of the “Delta Program” definition and made no ruling specific to the tunnel.

“The judge did not say that DWR does not have the authority to build the project or borrow money to pay for it,” Mohr said. Mohr added that “the Delta Conveyance Project is a critical part of California’s strategy to ensure a reliable water supply.” water supply for millions of Californians – modernizing our water infrastructure to protect against the impacts of earthquakes, climate change and more.”

The tunnel has been proposed — and contested — for many years, drawing strong opposition from Central Valley communities who say it would harm their economies and the fragile ecosystem of the Sacramento-San Joaquin River Delta. The Newsom administration says the tunnel is a necessary upgrade to aging infrastructure, allowing the state to capture more water during heavy rain events.

It’s not clear what other options the Department of Water Resources could pursue to pay for the project. Seeking approval from voters or the state legislature would be difficult. Last year, lawmakers pushed to exempt the tunnel project from a law Newsom signed that aimed to speed up the time it takes to build major infrastructure projects.

Newsom, however, has been steadfast in his support of the project. Last month, his administration completed a major environmental review — the final step of a lengthy state regulatory process. But the project still must complete a federal environmental review and obtain several state and federal permits — a process expected to take until 2026.