Big water projects hit funding snags
State rules require that public benefit proves equal to cost
In a remote canyon tucked into the East Bay hills, the glassy waters of Los Vaqueros Reservoir were nearly brimming last week, a welcome sight in a winter that’s been desperately short on rain.
Several Bay Area communities say the lake could hold far more water. With memories of California’s drought still fresh, and concern growing of more dry times ahead, about a dozen water agencies are pushing to expand the Contra Costa County reservoir into a regional giant that would share its bounty with San Francisco and the South Bay.
But the $914 million plan has hit a financing snag. In a report released Friday, California water officials found that Los Vaqueros Reservoir managers haven’t shown that enough public benefit will come with the expansion. As a result, they may get little or no state funding.
The same was said of 10 other watersupply projects competing for dollars from voter-approved Proposition 1. Among them are the biggest dams proposed in California in decades, including Temperance Flat on the San Joaquin River east of Fresno and Sites along the Sacramento River in Colusa County. The report could doom or delay any of these efforts.
While Prop. 1 was passed with the intention of advancing such drought-response ventures, the 2014 measure requires water-supply projects to do more than store water. They have to boost water flows for fish, for example, or create recreational opportunities like boating — and it’s these areas where state officials say the proposals fall short.
“If you’re asking for $1 million, we’d like to know you’re giving $1 million in public benefit,” said Chris Orrock, a spokesman for the California Water Commission, which is awarding the money.
Proponents of Los Vaqueros and other projects insist they have plenty to offer beyond water storage. They plan to submit a challenge to the state’s analysis,
which the water commission will welcome through Feb. 23.
“It’s very difficult when you’re talking about a project this complex,” said Marguerite Patil, special assistant to the general manager for the Contra Costa Water District, which operates Los Vaqueros. “But we’re (still) feeling pretty confident that we’ll do well.”
As Patil stood atop the reservoir’s roughly 225foot earthen dam, she pointed to a crest on a hillside that would mark the new high-water point if the lake is extended. The grassy shoreline below would be submerged, as would a small marina that would eventually be rebuilt — bigger and better, according to the district.
It says its project would yield other benefits, such as greater fishing opportunities, more water to restore wetlands, and emergency drinking water reserves.
The proposal calls for draining the lake before elevating the dam 55 feet, which would increase the reservoir’s capacity by 70 percent. The larger facility would store 275,000 acre-feet of water, enough to supply more than a half million households for a year and plenty for the district to pass along to its Bay Area neighbors.
The San Francisco Public Utilities Commission, Santa Clara Valley Water District and East Bay Municipal Utility District are among the partners hoping to tap into the expansion. The coalition is seeking $434 million of Prop. 1 money. About $2.7 billion of the measure’s total $7.5 billion is available for water storage.
The competition includes four other reservoir projects, including the expansion of Pacheco Reservoir in eastern Santa Clara County. Most other applications are for underground storage, in which surface water is stashed in aquifers during wet times and taken out during dry ones.
In recent decades, reservoirs have been a tough sell in California. The rush to dam rivers, resulting in more than 1,000 reservoirs last century, slowed in the 1970s. Completion of the New Melones Dam on the Stanislaus River in 1979 marked the last major facility.
The reasons for the drop-off are numerous. Not only are the best spots for dams taken, but water managers have a better understanding of the harm that dams do to rivers and fish. Meanwhile, government funding for the pricey endeavors has largely dried up.
Efforts to revive the era of big dams have occasionally surfaced, especially during dry spells. Prop. 1, which emerged in the throes of the recent five-year drought, presents perhaps the biggest opportunity for new projects.
But the measure’s fine print seeks to deter repeats of the ecologically damaging and less economical reservoirs of the 1900s. Those pitching new projects must show that their public benefit matches the funding they seek. The money will not cover the costs of building new storage alone.
“This is to keep folks from just building big water-supply projects,” said Jeffrey Mount, a senior fellow at the Public Policy Institute of California’s Water Policy Center, noting that many reservoirs have historically been highly subsidized affairs that serve specific interests. “In most of these big projects in the past, if the people who benefited from the water had to pay for it, they couldn’t afford it.”
As good as the intentions of Prop. 1 may be, the financing conditions are proving difficult, Mount said.
Friday’s report took issue with the purported benefits of the 11 projects. For instance, while the application for the Los Vaqueros Reservoir expansion said every dollar spent on the effort would yield a public benefit of $3.60, the state countered that the demonstrated benefit was just 46 cents.
None of the projects produced a public benefit equal to their cost, according to the state.
“There is the possibility we’ve painted ourselves into a corner with this bond language,” Mount said.
If the proposals can’t demonstrate greater value, he added, state officials would probably have to go back to voters to amend the proposition.
Orrock, the water commission spokesman, said the agency expects to get the money out and will begin reviewing challenges to the report as soon as they’re submitted. Final decisions are expected this summer.
For many of the projects, including Los Vaqueros, Friday’s report cited missing information and inadequate modeling, which proponents said they could easily address.
As the sun beat down on the lake and a pelican splashed in the water, Patil said Los Vaqueros Reservoir has a built-in advantage: its location. The dam is not on a river and therefore doesn’t damage the health of a waterway.
The reservoir pipes in water from the Sacramento-San Joaquin River Delta, several miles to the east. The expansion, she said, would add another pipeline able to move water to Central Valley wetlands. A commitment to sending supplies to environmental refuges has won the project rare support from conservation groups.
“This water supply could dramatically improve conditions for birds, snakes, turtles and many other critters,” said Rachel Zwillinger, a water policy adviser at Defenders of Wildlife. “In the Central Valley, we’ve lost about 95 percent of our historic wetlands.”
Zwillinger is pleased that the state is scrutinizing Prop. 1 applications and trying to weed out projects without environmental benefits, but she thinks Los Vaqueros Reservoir should qualify.
Contra Costa Water District officials hope to finish the planning and approval process for the expansion over the next three years. Construction is expected to take another six years.
The added capacity would far exceed the district’s water-storage needs, allowing the agency to hold water for other Bay Area suppliers as well as a handful of Central Valley irrigation districts.
The plan, the district says, is for water surpluses to be collected during wet years and kept until they’re needed in dry years. Initial projections show that the San Francisco Public Utilities Commission would be one of the biggest recipients.
“The old version of dams was trying to figure out how to squeeze as much water out of our rivers as possible. That’s not what Contra Costa is doing here,” said Barry Nelson, a water consultant and project supporter.
“This is water in the bank,” he said. “It’s really important to make sure San Francisco, Silicon Valley and the East Bay don’t run out of water during droughts.”