Delta Tunnels Construction JPA Greenlights Professional Services Agreement with the Hallmark Group; Finance JPA Set to Pursue EPA WIFIA Loans
Today, the Construction Joint Powers Authority for the Delta tunnels, or Delta Conveyance Design and Construction Authority, met in Sacramento and authorized their interim Executive Director, Jill Duerig—former General Manager of Zone 7 Water District—to implement a professional services agreement with the Hallmark Group to “provide transition services.”
In the fall of 2017, The Hallmark Group and the Department of Water Resources came under fire after the results of a state audit completed by Elaine Howle revealed that,
“DWR did not follow state law when it replaced the program manager for the conservation and conveyance program. Specifically, DWR selected the Hallmark Group (Hallmark) to provide program management services without advertising a request for qualifications, and DWR could not demonstrate that it ever evaluated Hallmark’s qualifications for this role. The cost of DWR’s current contract with Hallmark has tripled from $4.1 million to $13.8 million.” (California State Auditor Report).
Earlier in the day, the Finance JPA authorized Executive Director Duerig to develop and submit a Letter of Interest for $1.6 billion in WIFIA loans to the U.S. Environmental Protection Agency.
As of today, the project is still roughly $ 5 billion short of its $16.7 billion price tag—a figure that does not factor in additional expenses from construction delays and cost overruns.
Barbara Barrigan-Parrilla, Executive Director of Restore the Delta, said,
“The state audit should have marked the end of the Hallmark Group’s involvement in the Delta tunnels project. Continuing to include Hallmark in planning and construction for the tunnels only further alienates and discourages the public’s trust in this project.
“At today’s meetings, Restore the Delta realized that the Calvert rider is necessary to secure WIFIA loans for the tunnels project. Tunnels proponents need to eliminate lawsuits in order to qualify for favorable loan terms from the federal government. Ultimately, if this rider passes the senate and the tunnels are built with additional funding via a public-private partnership (or P3), management of the San Francisco Bay-Delta watershed and its tributaries will be in the hands of the P3’s private investors.
“Repayment for the WIFIA loans will not commence until five years after the project is completed. If there were zero construction delays, which is highly unlikely, repayment would begin in 2035. The problem is climate change modeling for the project has only been completed through 2030. The Brown Administration, Metropolitan Water District of Southern California, Kern County Water Agency, and Santa Clara Valley Water District are gambling with huge debts that our children and grandchildren will be on the hook for, without knowing if there will be any water in the tunnels. The push for this project can only be described as water management madness.” Even for thos who are agnostic about the tunnels, this should be very troubling.