Natural Resources Secretary John Laird has added his voice to those who want to slow down on flow studies and determinations for the Delta. He’s also asking outside groups not to engage in discussions with legislators about water conveyance, Delta levees, or financing, saying that such discussions are premature.
It looks like problems with financing high speed rail may be spilling over into the peripheral canal debate.
The Governor doesn’t want to talk about the water bond. In this economy, an $11.14 billion general obligation bond is going to be a hard sell, and he is more interested in taking a new tax plan to California voters.
Besides, the bond explicitly does not provide funding for the design, construction, operation, or maintenance of Delta conveyance facilities.
So where is the money supposed to come from? A potential financing solution is buried in the Fifth Draft of the Delta Plan, discovered by Deirdre Des Jardins: The Delta Stewardship Council wants revenue bond authority to implement the Delta Plan, which is understood to include conveyance once the BDCP is incorporated.
Revenue bonds are bonds repaid solely from revenues generated by a specific revenue generating entity. The DSC doesn’t generate revenues, so they would have to find a fiscal partner who does generate revenues. Presumably, that would be the water contractors, who will be collecting revenues from beneficiaries of the project. But with or without a fiscal partner, it isn’t clear that the DSC even has revenue bonding authority.
Meanwhile, the flaws in the “beneficiary pays” plan for paying for Delta conveyance are becoming clear. Most farmers won’t be able to afford the water, and urban water agencies are finding their ratepayers are increasingly reluctant to pay more for imported water.
A cost/benefit analysis of the BDCP and Delta conveyance would clarify some of those issues. We expect to see a bill calling for such a cost/benefit analysis introduced in the legislature shortly.