Opponents of the Delta tunnels project, who have been trying to stop the project based on environmental grounds, are now trying to kill it through its financial structure. This comes just after federal auditors says $50 million in taxpayer funds were used improperly to subsidize planning in the San Joaquin Valley irrigation districts.


Through a complex and obscure process that was not disclosed, the U.S. Bureau of Reclamation (USBR) received $50 million, despite the insistence from Brown’s administration that no tax dollars would be used to fund the project. The auditor found that the subsidy was never disclosed in the annual budget justifications or financial reports. When questioned, USBR official could not give a valid reason for giving the subsidy.


The environmental groups filed court papers arguing that the subsidy violates the state Delta Reform Act, which stated all costs incurred from the project would be paid only by those receiving water. The action was taken in an effort to kill the plans to bankroll the tunnels with billions of dollars in bond financing.


The same environmental groups filed a lawsuit against the project based on the argument that the project violated California environmental laws. Experts agree that while the environmental lawsuits may delay the project, it’s unlikely to kill it. The project will likely need to do a few more environmental studies before they can proceed.


The audit report and challenge come at a critical moment in the planning of the tunnels. Directors of state and federal water districts south of the Delta are about to begin voting on whether to pay for the tunnels. Westlands, one of the key federal contractors, have shown reluctance to support the tunnel project and this might just be their tipping point.


Proponents of the project say that even if the environmental groups defeat the Department of Water Resources’ ability to sell bonds, the project is likely to still move forward. There has been talks among several of the water agencies south of the delta to form a joint powers authority that would take ownership of the project and handle all of the financing responsibilities.


Opponents to the project believe there is no way the project can be completed without using taxpayer subsidies. They argue that if they cannot finance the planning process of the project, then how will they fund the $17-billion project?


The Delta Tunnels Project, also called the WaterFix, proposes to construct two 40ft (12m) diameter tunnels, each 150ft (46m) below the surface. The goal is to divert a portion of the Sacramento River’s flow to three massive new intakes on the riverbank. The tunnels would then push water 35 miles south to state and federal distribution canals.


We will continue to follow this project as plans evolve. If you think your property or business may be taken for the WaterFix project, you can learn more about your options by giving us a call at (866) EM-DOMAIN.