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DELTA TUNNELS: Fitch Downgrades Westlands’ Next Bond Sale

For Immediate Release: Wednesday, October 19, 2016
Barbara Barrigan-Parrilla, 209-479-2053, [email protected]

Stockton – This week, Fitch Ratings downgraded the scheduled October 26 bond sale by Westlands Water District from ‘AA-‘ to ‘A+’. “The downgrade reflects Fitch’s view that district operations face increased pressure over time.” Read the announcement here.
Among the issues facing Westlands Water District, Fitch cites shrinking irrigated acreage, previous financial obligations, and the potential for increased “leveraging” to pay for the Delta Tunnels (CA WaterFix.) The statement includes a warning that overcommitting to the Delta Tunnels could push the rating even lower.

“Public reports now estimate the district’s share of future costs of the California Fix at $2.5 billion… Significant further leverage by the district in support of the California Fix could apply downward pressure to the ratings.”

Restore the Delta executive director, Barbara Barrigan-Parrilla said:
“Bond ratings agencies are like Mom and Dad. Westlands is asking to raise the limit on their credit card again, despite questionable earnings potential. At some point Mom and Dad get out the scissors.
“Tunnel proponents cannot demonstrate how $17 billion, before cost overruns, will be raised to build the Delta Tunnels. The public does not have a completed and vetted finance plan for the project to examine. When asked who commits to paying the bill, all the water districts point to someone else. What is clear is that ‘someone else’ includes federal taxpayers, California taxpayers, Southern California and Silicon Valley property taxpayers, and urban water ratepayers. These folks will end up subsidizing large agricultural interests like Westlands growers.”
California water tunnels would need US funding, analyst says
(AP September 14, 2016)
State Auditors Look Into ‘Potentially Improper’ Delta Tunnel Transactions
(KCET August 17, 2016)

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