[env-trinity] Unpaid CVP Capital Costs

[Byron]

Private Water Contractors in CA Owe Taxpayers $500 million

 

New government audit finds that the bulk of an interest-free loan from the
1960s is still unpaid by irrigation water contractors

 

WASHINGTON - Four large irrigation water districts in the Central Valley of
California still owe federal taxpayers nearly $500 million for a network of
dams and canals constructed for their benefit in the 1960s, according
<http://gao.gov/docsearch/abstract.php?rptno=GAO-08-307R>  to a new report
issued by the non-partisan Government Accountability Office (GAO).  Only 14
percent of capital costs have been repaid.

 

"This independent audit confirms that taxpayers are still owed an awful lot
of money by some of the largest private users of water in the state," said
Rep. George Miller (D-CA), the former chairman of the House Natural
Resources Committee and author of several key water reform laws.  Miller and
two of his colleagues requested the GAO report.

 

"Taxpayers paid for these water projects decades ago, taxpayers paid for the
cleanup of some of the projects' worst environmental consequences over the
years, and now the taxpayers are still waiting to be repaid nearly a half a
billion dollars that they are owed," Miller added.  "The Bush Administration
is responsible now to ensure that the new water contracts for these
agribusinesses are strengthened not only to end the devastation of
California's fish and wildlife but to recoup in a timely manner this
long-standing debt owed to the taxpayer."

 

The Central Valley Project (CVP) is the largest federal irrigation system in
the nation, and the beneficiaries of the CVP's San Luis Unit include some of
the most productive and lucrative farms in the world. The irrigation
districts that were the subject of the report were assessed $523 million by
the Bureau of Reclamation for the construction of the San Luis Unit, which
was first authorized in 1960. 

 

But due to the heavily subsidized and forgiving nature of antiquated federal
western water policy, the water districts had repaid to the federal treasury
only $74 million of that $523 million as of September 30, 2005, according to
today's GAO report. 

 

The approximately 600 agribusinesses that make up the Westlands Water
District - the San Luis Unit district that is often cited as the largest
irrigation district in the world - were assessed an additional $179 million
for the construction of their internal water distribution system. Including
the remaining balance on Westlands' account, the San Luis Unit contractors
still owe the federal treasury approximately $497 million.

 

The report was commissioned by Congressman Nick Rahall (D-WV), Chairman of
the House Natural Resources Committee, Congresswoman Grace Napolitano
(D-CA), Chairwoman of the Water & Power Subcommittee, and Miller, to help
them assess a recent proposal by the San Luis Unit water districts and the
U.S. Bureau of Reclamation. 

 

That proposal included a debt-for-cleanup deal, in which the federal
government would forgive the water districts' debt and provide other
benefits, and in exchange the water districts would commit to cleaning up
the salt- and selenium- infused water that drains from their irrigated
agricultural operations. How to manage that toxic drainwater has been the
source of substantial controversy over the life of the water project: when
the water was allowed to accumulate in the Kesterson National Wildlife
Refuge in the 1980s, it caused serious harm to wildlife, including deaths
and deformities in waterfowl. 

 

To mitigate and clean up the Kesterson disaster cost the taxpayers $26.6
million, according to the new report, of which about $19.8 million must be
repaid by the Westlands Water District. Cleaning up the broader regional
drainwater problem, as proposed by the water districts and the Bureau of
Reclamation, is projected to be a significantly greater expense.  That
problem already has cost taxpayers more than $100 million in costs of
studies for possible remedies.

 

The U.S. Bureau of Reclamation does not require the full repayment of
construction costs for water infrastructure such as the San Luis Unit, nor
is the assessment adjusted for inflation over the life of the repayment
period; the amount owed by the four water contractors amounts to an
interest-free loan from the taxpayer that will not be repaid in full until
2030. 

 

The total capital cost to construct the Central Valley Project, the massive
federal infrastructure project that moves water for irrigation and urban use
throughout state, was about $3.4 billion, according to the GAO report, and
the San Luis Unit portion of the project had a total capital cost of $778
million.

 

The report is online at
http://gao.gov/docsearch/abstract.php?rptno=GAO-08-307R

 

 

Byron Leydecker

Friends of Trinity River, Chair

California Trout, Inc., Advisor

PO Box 2327

Mill Valley, CA 94942-2327

415 383 4810

415 383 9562 fax

bwl3 at comcast.net

bleydecker at stanfordalumni.org (secondary)

http://www.fotr.org

http://www.caltrout.org

 

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