By Dan Bacher

On January 16, a Sacramento court ruled that the California Department of Water Resources, or DWR, lacks the authority to issue revenue bonds to finance the embattled Delta Tunnel.

Kenneth C. Mennemeier Jr., a judge for the Sacramento County Superior Court, denied DWR’s request for an order “validating” bond resolutions that would have financed the project.

Sacramento, San Joaquin, Contra Costa, Solano, Yolo, Butte and Plumas counties and their related water agencies – with other litigants – had been challenging DWR’s legal right to issue an unlimited amount of bonds to finance the highly controversial tunnel, which is also known as the Delta Conveyance project or DCP.

The Court agreed with the counties, ruling that “DWR exceeded its delegated authority when it adopted the Bond Resolutions, which purported to authorize the issuance of the Delta Program Revenue Bonds.”

In reaching this conclusion, the Court rejected DWR’s claim to almost unlimited authority in such matters, ruling that the Water Code “does not give DWR carte blanche to do as it wishes.”  

“For DWR to act,” Mennemeier noted, “it must have delegated authority.  Although the Legislature plainly delegated authority to DWR, it did not delegate infinite authority.”

DWR had attempted to tie the bond resolutions to a purported “Delta Program.” The Court rejected this gambit.

“In plain words, the problem with DWR’s definition of the ‘Delta Program’ is that [it] is untethered to the objectives, purposes, and effects of the Feather River Project of the CVPA,” Mennemeier wrote. “Since DWR lacks the authority to adopt the Delta Program,” as DWR had defined it, “it necessarily follows that DWR lacks the authority to issue revenue bonds to finance the Delta Project.”

Attorneys Thomas Keeling and Roger Moore successfully represented most of the counties in the action. Moore described the Court’s judgment as “plainly correct” and “yet another nail in the coffin of this grotesquely misconceived and outlandishly expensive taxpayer boondoggle.”  

“This is a victory for the counties and agencies, for the taxpayers, for the environment, for Delta farmers and businesses, and for common sense,” Keeling and More added in a joint statement.

Click here for the judgement.

Bob Wright, counsel for Sierra Club California and a board member for Restore the Delta, explained the significance of the court decision:

“This is good news for Delta residents and users protecting the impaired and fragile Delta from the destruction that would be caused by diverting significant freshwater flows away from the Delta into a tunnel for export,” Wright argued in his own statement. “It is also good news for ratepayers and taxpayers who would be hit with the many billions of dollars this expensive boondoggle would cost.”

He added, “DWR has gone to the extent of approving the project on December 21, 2023, when it will not be issuing a cost-benefit study intended to inform ratepayers and taxpayers if the project makes any financial sense until the spring or later. No thinking individual would choose which house or car to buy without considering the cost. DWR is trying to pull a fast one on Delta residents, users and the ratepayers and taxpayers who would pay for the tunnel project. Now, DWR will have to get either the Legislature or the appellate courts to help it in its efforts to damage the Delta with one hand and take money from ratepayers and taxpayers with the other hand.”

The Delta Tunnel is a project opposed by many California Indian tribes, nearly all environmental groups in the state and beyond, Southern California ratepayers, recreational anglers, commercial fishermen, conservationists and Delta businesses.

Opponents have noted that Governor Gavin Newsom is pushing the unpopular water-grab at a time when the San Francisco Bay-Delta Estuary is in its worst ecological crisis in history, largely due to water exports and the oversubscription of water in California.