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Ratepayers Warned to “Watch Your Wallets”

For Immediate Release: Monday, April 4, 2016
Contact: Barbara Barrigan-Parrilla, Restore the Delta, 209-479-2053, [email protected]

Ratepayers Warned to “Watch Your Wallets”

Joint Water District Meeting on Thursday, April 7, 2016
Stockton, CA – Today, Restore the Delta is sounding the alarm to all water ratepayers throughout California to be on guard for water rate and parcel tax increases to fund Governor Brown’s $15.5B Delta Tunnels proposal.
San Luis Delta-Mendota Water Authority (SLDMWA) is holding a joint meeting and workshop with members at the San Clara Valley Water District on April 7, 2016 in San Jose and the agenda includes reference to CA WaterFix (aka the Delta tunnels) being discussed as a closed session item at the end of the joint meeting.
Is the closed session discussion an effort to shore up financing for the Delta Tunnels?
“The Delta Tunnels proposal does not have a viable financial plan,” explained Barbara Barrigan-Parrilla, executive director of Restore the Delta. “The water district that will benefit most from the proposal, Westlands Water District, was recently fined by the SEC for using ‘a little Enron accounting’ in their bond sales for Delta tunnels planning.  Westlands, along with other west side San Joaquin Valley irrigation districts that make up the San Luis Delta-Mendota Water Authority, are now working to ensure that urban ratepayers will pick up the majority of the costs, benefiting San Luis Delta-Mendota water users.”

On March 9, 2016, the federal Securities and Exchange Commission fined Westlands and its former directors for bond sales that district leadership admitted included Enron-style accounting tricks to hide the insecurity of the bonds.  Consequently, Westlands and the San Luis Delta-Mendota Water Authority are now on negative credit watch status with bond rating agencies.
Meanwhile, the two big urban water districts that will contribute to the project have voted to use parcel taxes that will not be approved by ratepayers in addition to raising water rates for the plan. For the elderly and homeowners on fixed incomes, these new expenses may come as a surprise. Both Santa Clara Valley Water District and Metropolitan Water District staff have made statements that the tunnels will only cost water ratepayers $5.00 per month, but they never mention the additional parcel taxes that their boards maintain would be levied.  This same strategy is championed by officials with CA WaterFix, who told the press this week that case law allows water districts to raise parcel taxes without a ratepayer vote.
Moreover, independent economist, Dr. Jeff Michael, Director of the Center for Business and Policy Research at the University of the Pacific, estimates that water rates for urban customers would actually increase by $15 per month if agricultural customers failed to pay their fair share for the Delta tunnels project.  That means water ratepayer households would each be contributing $7,200 over the forty-year span of the project without receiving any additional water in addition to increased property taxes.
In a letter to Northern California water districts sent on March 15, 2016, the Howard Jarvis Taxpayer Association warned Santa Clara Valley Water District that their plans to fund the Delta tunnels without a 2/3rd majority vote of their ratepayers would violate Proposition 13. The group warned that urban water districts can expect legal action in defense of ratepayers if they are not given a vote on the increases.
“What we have now is a huge, expensive, proposal with unverifiable environmental benefits according to the EPA who issued the Recirculated Environmental Impact Report on the Delta Tunnels a failing grade of ‘inadequate’,” said Barrigan-Parrilla. “The agricultural irrigation districts that are supposed to pay for at least 40 percent of the project are engaging in a full court press and seeking to eliminate public scrutiny so that they secure urban ratepayer funding to keep the plan going.  Their end goal is to grab more water to keep growing almonds for export without having to foot the expense.”
Nonetheless, these same irrigation districts continue to fund expensive projects with their growers’ money despite being placed on negative credit watch following the SEC fine of Westlands. Jason Peltier, with the San Luis Delta-Mendota Water Authority and formerly of Westlands, asked that his board take over funding (see item 5 in February 4th meeting notes) a $1.6 million astroturfing “public outreach” campaign to lobby for greater water exports from the Delta. This campaign was formerly funded by Westlands.
The El Aqua campaign was established to persuade Californians, and Latinos in particular, that more and more water should be delivered from the Delta to protect jobs, but it was revealed by the New York Times in December 2015 that the campaign served as a front for Westlands’ growers.  Sold to the public as a grassroots campaign to protect Latino communities in need of water deliveries, Michael Fenenbock, of the Manhattan-based Fenenbock group, is the architect of the campaign and takes pride that he “vaulted water from a nonissue among California Latinos to a top concern.”

“It is incredible to think that San Luis Delta-Mendota officials are ready to jump in and rescue Westlands’ Manhattan-priced media efforts while on negative credit watch due to Westland’s illegal accounting practices,” said Barrigan-Parrilla. “In truth, they need to push for more water deliveries to fill the proposed Delta tunnels to make them pencil out for their own future bond sales. With climate change, the water won’t physically be there. This entire effort, on the part of San Luis Delta-Mendota and Westlands to con urban water agencies to move forward with the project is nothing more than a carnival shell game. They want urban ratepayers to pay for planning and to make long term commitments for a project that has yet to be approved.”
Meanwhile, urban water districts like the Santa Clara Valley Water District are still evaluating a tunnels partnership with Westlands and San Luis Delta-Mendota.
“To believe that Westlands, an entity that has been bailed out by the Federal government to the tune of $350 million for prior projects, and that has behaved so recklessly with bond investor money, will pay its fair share for the tunnels is stunningly naïve,” said Barrigan-Parrilla. “Santa Clara Valley and Metropolitan Water District of Southern California must come clean with their ratepayers. If Delta tunnels funding from Westlands and San Luis Delta-Mendota collapses because nobody wants their shady bonds, urban ratepayers will be on the hook for tens of billions of dollars that they will be forced to repay through taxes and higher water rates.”

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  • Bob Souza
    April 4, 2016, 11:09 pm

    What happened to the petition for the voter initiative to place this matter on the ballot?