Major Reductions in Funding for Delta Tunnel Engineering
The past year saw a 56% reduction in funding for the Delta Conveyance Design and Construction Authority’s engineering design and field work for the Delta tunnel project. In November 2020, the Board had to cut an additional 20% cut from the budget for Fiscal Year 2020-21.
The Delta Conveyance Design and Construction Authority (DCA) is a Joint Powers Authority created in May 2018 to design and build the twin tunnels project. The DCA is run by Metropolitan Water District, Santa Clara Valley Water District, and other participating State Water Project contractors.
In January of 2019, the DCA signed two huge contracts — a $93 million contract with Jacobs Engineering for engineering design of the twin tunnels project, and a $75 million contract with Fugro for geotechnical exploration and field work. On May 2, 2019, the Department of Water Resources revoked all approvals for the twin tunnels project, but approved work on the single tunnel project.
Planned funding from State Water Project contractors for work on the single tunnel project failed to materialize. Work under the DCA’s engineering contracts was only able to continue with $33.8 million in bridge loans from the Department of Water Resources. According to the DCA’s FY 2019-2020 closeout report, the adopted budget for fiscal year 2019-20 was $82 million, but only $36 million was spent, a reduction of 56%. Engineering work was budgeted at $32 million, but only $19 million was spent, a reduction of 40%. Geotechnical work was budgeted at $21.5 million, but only $1.5 million was spent, due to litigation by Delta counties.
In July 2020, the DCA Board approved a greatly reduced budget of $34 million for FY 2020-21. The budget relied on a new loan of $15 million from the Department of Water Resources. Delta Legacy Communities, Inc. sent a letter to DWR and the Department of Finance pointing out that DWR likely had no legal source of funds for the loan. In October 2020, DWR found an “accounting error” and reduced the loan by $5.6 million. In November 2020, the DCA Board cut another 20% from the FY 2020-21 budget, reducing it to $27 million.
At the November 19 2020 meeting, the DCA Board cut the 2020-21 budget for engineering work from $12.5 million to $10.3 million, a reduction of 20%. The budget for field work was cut from $9 million to $5.5 million, a reduction of 39%. There were also significant cuts to the DCA Executive Office’s budget, Administration, and Program Controls.
The State Water Project contractors are currently voting on whether to fund the next two years of Delta tunnel planning. At 100% participation, funds contributed are expected to be $36 million for the rest of FY 2020-21, $86 million for FY 2021-22, and $98 million for FY 2022-23. But the contributions have to cover the costs of preparation of environmental documents and permitting as well as the DCA’s engineering design and field work.
Funding for tunnel planning and engineering design could be reduced further if there is a large judgement in the consolidated Oroville Dam cases, which are currently scheduled to go to trial in April of 2021.