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LA Office Of Public Accountability BDCP Cost Analysis is Incomplete, Asks Wrong Question

FOR IMMEDIATE RELEASE: Wednesday, May 7, 2014
Contact: Steve Hopcraft 916/457-5546; [email protected]; Twitter: @shopcraft; @MrSandHillCrane; Barbara Barrigan-Parrilla 209/479-2053 [email protected]; Twitter: @RestoretheDelta

Restore the Delta Blasts LA Office Of Public Accountability BDCP Cost Analysis: Incomplete, Asks Wrong Question
Failed to Consider Alternatives, Excluded Many Costs,

Do LA Water Ratepayers want to Subsidize Mega-Ag?

Sacramento, CA – Restore the Delta (RTD), opponents of Gov. Brown’s plan to build Peripheral Tunnels that would drain the Delta and doom salmon and other Pacific fisheries, today criticized the Los Angeles Office of Public Accountability’s (OPA) analysis of the Bay Delta Conservation Plan’s (BDCP) cost to Los Angeles ratepayers as a “biased and piecemeal” analysis. “The Office of Public Accountability (OPA) performed a disservice to the people of Los Angeles by ignoring key issues, failing to consider alternatives to the tunnels and not addressing the subsidy that LA ratepayers will provide to unsustainable industrial agriculture on the West Side of the San Joaquin Valley,” said RTD Executive Director Barbara Barrigan-Parrilla. “It’s disturbing that OPA consulted only proponents, paid consultants for BDCP, and did not review one study by independent experts or opponents.” The OPA analysis claims that $25 billion – which is only the current construction cost estimate – is the “total” estimated cost, excluding bonds. The analysis also falsely claims that $17 billion would cover “facilities, operations and associated mitigation.” In fact, the total cost of the project approaches $57 billion.

The OPA analysis is at odds with a more complete examination. Food & Water Watch commissioned ECONorthwest to analyze the impacts that the costs of building and operating the tunnels would have on LA DWP ratepayers. The project would cost a typical Los Angeles family up to $9,0000, according to the report. It outlines a low-cost scenario of $20.6 billion, and a high-cost scenario of $47.2 billion. For each, they evaluate the costs if the state and federal water projects evenly split the costs of the tunnel and related activities, and if the state project paid 100 percent.

“The OPA analysis assumes the water contractors will be paying for construction of the tunnels – but they will just pass on higher rates for water rate payers. They downplay that 15% of the project costs will be shifted to California tax payers through general obligation bonds,” said Barbara Barrigan-Parrilla, executive director of Restore the Delta. “Moreover, 16% of the project will be funded by U.S. taxpayers to cover the mitigation needed for damage from building these two enormous tunnels and diverting over half of the Sacramento River away from the estuary. Californians will be paying for this project with higher water rates, state taxes, and Federal taxes – all so Westlands growers can continue unsustainable farming on unsuitable land.”

“The cost keeps escalating and the benefits diminishing,” said Barrigan-Parrilla. Restore the Delta pointed to findings of the Brown administration’s own analysis showing the “through-Delta” alternative has the highest benefit-cost ratio of all the options. “The Brown Administration has failed to disclose that California families will pay thousands of dollars, yet receive no new water.”

“The report dodges the two most important issues. First, the report ignores more cost-effective and sustainable water supply options that would create local jobs in LA without harming the Delta region. The report states ‘not evaluated in this paper is the cost effectiveness of the BDCP $15 billion “Proposed Action” conveyance facility compared to several less costly options.’ Second, the report unrealistically assumes that farms will pay the same price as Los Angeles for each unit of water, but a more realistic shift of costs from farms to cities would result in LA household costs 3 times higher than this report projects,” said Dr. Jeffrey Michael, Director of Eberhardt School of Business at the University of the Pacific, and co-author of the Delta Protection Commission’s Economic Sustainability Plan.

Dr. Michael’s own cost-benefits analysis has found that the BDCP would cost $2.50 for every $1 in benefits. Three separate analyses of the costs, benefits and financial burdens of the proposed Bay-Delta Conservation Plan (BDCP), and its Peripheral Tunnels found it costs more than its benefits, and that it will impose a heavy financial burden on California businesses and families.

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