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Santa Clara Valley Water District Taxpayers Protest Hidden Taxes

 For Immediate Release: June 21, 2016

Barbara Barrigan-Parrilla, Restore the Delta, 209-479-2053, [email protected]
Brian Smith, 415-320-9384, [email protected]

Santa Clara Valley Water District Taxpayers Protest Hidden Taxes
Funding Delta Tunnels Planning

San Jose, CA – Today, ratepayers from Santa Clara Valley Water District questioned unfair, and possibly illegal, fees that have emerged in documents recovered under the Public Records Act. The documents reveal an elaborate money transfer mechanism set up years ago that is funding planning for the controversial Delta Tunnels project. Fees that taxpayers and ratepayers never approved.
Ratepayers shared their concerns during public comments at the SCVWD Board workshop on CA WaterFix today.

Bryan Carr, a SCVWD ratepayer from Monte Sereno said, “As a ratepayer in the District, I am upset that my water district has used ratepayer fees and parcel taxes to fund planning for the Delta Tunnels for years. The Tunnels will divert freshwater that keeps the San Francisco Bay-Delta estuary alive. We deserve a vote on how our taxes and fees are being spent, especially when these projects have not met state and federal environmental standards.”
See a full account of what was found in the PRA request. (Below.)
“The Delta Tunnels plan has been sold to the public as being paid for by ratepayers for about $5 month on their water bills. But it appears that all Santa Clara Valley taxpayers have been funding advanced planning for the controversial Delta Tunnels proposal for years,” said Barbara Barrigan-Parrilla, executive director of Restore the Delta. “If SCVWD cannot afford to pay for Delta tunnels planning at the $14 million level without relying on property taxes, how will they afford $1 to $2 billion for their share of the project?”
The district has insisted for years that it can raise property taxes on Santa Clara County homeowners without a public vote to help pay for the Delta Tunnels because the project is simply an addition to the State Water Project, the series of dams and canals that was authorized by state voters in 1960.
But the Howard Jarvis Taxpayer’s association warned SCVWD this March that these taxes may be illegal under Proposition 13, which requires a two-third vote by taxpayers for new fees. Their letter argued that the tunnels were not part of the original State Water Project plan and that any property tax hike to fund them would be illegal without voter approval.

"What the voters approved in 1960 doesn't say anything about tunnels," Timothy Bittle, an attorney with the Taxpayer’s association told The (San Jose) Mercury.

In addition, the district’s federal contribution to the tunnels has involved ratepayer money being spent on a cash fund to enable the Bureau of Reclamation to unleash $74 million in grants, paid for by U.S. taxpayers, to cover planning costs for big industrial irrigation districts, like Westlands Water District. Santa Clara Valley Water District customers have been taxed twice, at the local and federal for this project.

Santa Clara Valley Water District purchases water through two projects as a regional wholesaler and sells it to municipal retail water districts. About 40 percent of SCVWD's water supply is drawn from the Delta through the State Water Project (SWP), and the Federal Water Project (CWP). 
PRA documents suggest that since the beginning of the Delta Tunnels planning process, SCVWD has used local property taxes and benefited from Federal taxpayer dollars through a complicated shell game to pay for their share of Delta Tunnels project planning.
The Santa Clara Valley Water District is planning to pay for their $1 to $2 billion contribution for construction of the Delta Tunnels. SCVWD has used Ad Valorem parcel taxes since the beginning to pay for their share of Delta tunnels planning costs on the State Water Project side. This does not sit well with ratepayers who are actually tracking the project, especially those in Morgan Hill who do not receive SWP water. The Delta tunnels plan has been marketed to Californians as being paid for solely by recipients of the water that they would deliver. There has been no public discussion of relying on property taxes or federal tax dollars for funding.
PRA Documents Raise Serious Questions

Are Santa Clara Valley Water taxpayers already funding the unpermitted Delta Tunnels?

  1. American taxpayers are being bilked for the tunnels charges accrued by the US Bureau of Reclamation despite the law and false claims from the State and Federal contractors that they are paying the costs. The USBR letter clearly indicates that like Westlands, Santa Clara Valley Water District, as a Federal Water Contractor has paid $0 to USBR for the $74 million in grant funds made available by USBR to the California Department of Water Resources. Remember the project has been sold to Californians as being paid for 100 percent by the water contractors.
  2. The Santa Clara Valley Water District, as a Federal Water Contractor, made advanced Operations and Maintenance payments to the Bureau of Reclamation to help create a slush fund so that USBR could advance other funds to DWR. Documents show a shell game is being played to mislead Congress and SCVWD ratepayers and that this game circumvents state and federal law by allowing Congressional appropriations to be redirected to pay for over one-third of the tunnels planning costs. (Links to Advanced O&M, Draft Letter to Water Districts). SCVWD received credit back toward Central Valley Project charges for advancing this money; hence, their contribution as a Federal Contractor toward grant funding is $0, meaning that about a one-third of their reported project funding was covered by Federal taxpayers.

Have SCVWD property taxpayers been fooled into paying for CA Water Fix planning expenditures through hidden fees?

  1. Santa Clara Valley Water District documents show that it has used the Ad Valorem State Water Project tax to pay 100 percent of SWP contractual obligations from 2009 to 2013, including funding of planning for the Bay Delta Conservation Plan/CA Water Fix in payments to DWR for a total of nearly $3.5 million (Nearly $14 million has been spent by SCVWD on CA Water Fix in payments to DWR, San Luis Delta Mendota Water Authority, and advanced O&M payments to USBR).
  2. The March 15, 2016 Howard Jarvis Taxpayer Association letter to SCVWD indicates that the Delta tunnels are an addition to, and not part of the State Water Project approved by voters in the 1960 SWP construction bond. They assert that tunnel construction expenses are ineligible to be funded by a property tax override. This raises the question of how the Howard Jarvis Taxpayer Association would evaluate the prior use of the Ad Valorem tax to pay for the funding of planning for the tunnels project, as a new project.
  3. Residents within Palo Alto have been charged for SWP water through these property taxes, despite not receiving any SWP water. Thus, these same property taxpayers have been paying for the planning of the Delta tunnels, even though they will not receive water from the tunnels.

Does the Santa Clara Valley Water District Board of Directors approve of bilking ratepayers and property taxpayers and saddling them with debt for decades to pay for a risky, expensive project that will not solve water supply problems and has yet to be authorized by Federal and State agencies as environmentally or financially sound?

  1. Documents show that SCVWD ratepayers have also paid another $5.5 million to San Luis Delta-Mendota Water Authority, which was mostly paid, in turn, to DWR for a tunnels construction fund, and as well as regular membership SLDMWA fees. Documents show the tunnels project has circumvented state and federal law, issuing contracts for the tunnels paying contracting rates in excess of $300 an hour, courtesy of Santa Clara Valley Water District ratepayers and taxpayers, as well as American taxpayers and Metropolitan Water District rate/taxpayers.
  2. Tunnels charges for the construction fund were buried in a series of contractual agreements with Westlands and other San Luis Delta-Mendota Water Authority members. Remember that SLDMWA along with Westlands were put on negative credit watch as a result of SEC fines. The Executive Director of SLDMWA was given excessive compensation while employed at Westlands with a sweetheart loan that has yet to be repaid, and membership payments by SCVWD to SLDMWA were used for false advertising campaigns aimed at draining the Bay-Delta estuary for growers.

Led by the former SCVWD executive director, Beau Goldie, who partnered with SEC fined Westlands Water District, the San Luis Delta Mendota Water Authority, and Stewart Resnick’s front group California Water Security, the Santa Clara Valley Water District Board of Directors needs to question staff further about how these deceptive financial schemes and marketing campaigns were created. They accept at face value staff rationale that the tunnels will deliver additional supply and refuse to look at independent science on drought forecasting.

In conclusion, Santa Clara Valley Water District management is now rationalizing to the board past contributions as “this is what was set up,” and future water and financial planning as “this is how we do things.”

They ignore that no independent or federal scientist has affirmed that additional water can be exported through the tunnels.  The project still does not have state permits or federal authorizations.


Live tweets from CA WaterFix commitee hearing – June 21st, 2016: Follow us on Twitter @RestoretheDelta

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