C-WIN PRESS RELEASE: REPORT DOCUMENTS HUGE COST OVERRUNS FOR SANTA BARBARA’S STATE WATER

PRESS RELEASE  

For Immediate Release

Contacts:  Carolee Krieger 805-969-0824 or 805-451-9565

Tom Stokely 530-926-9727 or 530-524-0315

REPORT DOCUMENTS HUGE COST OVERRUNS FOR SANTA BARBARA’S

STATE WATER: AN INDICATION OF MASSIVE COSTS FOR PERIPHERAL CANAL

July 26, 2012, Santa Barbara California

Following the July 25 announcement of a Peripheral Canal/Tunnel proposed by Governor Brown and Interior Secretary Kenneth Salazar, the California Water Impact Network (C-WIN, online at http://www.c-win.org) released a report on the high cost and low reliability of State Water Project water for Santa Barbara County.

The report, “Why We Cannot Afford a Peripheral Canal- The Cost of Water for Santa Barbara County” documents huge cost overruns and dismal water deliveries for State Water Project water in Santa Barbara County.  C-WIN  recommends that Santa Barbara County and its water agencies withdraw support for the Peripheral Canal/Tunnel.

The report also includes a white paper report by economics firm ECONorthwest that contains an estimate of the range of costs for Santa Barbara County and its ratepayers who are expected to pay for a portion of the Peripheral Canal/Tunnel.

C-WIN’s President, Carolee Krieger said, “Santa Barbara County voters were told before the election in 1991 that it would cost $270 million to get 97% of our State Water Project contract amounts.  The reality is that it will ultimately cost us $1.76 billion for a lot less water than they promised, especially during drought years when it is actually needed.  We are being told by the same people that the Peripheral Canal will ‘only’ cost $14 billion.   The rest of California’s ratepayers and taxpayers should learn from our economic disaster by rejecting the Peripheral Canal/Tunnel.”

The report examined budget and water delivery information from the Central Coast Water Authority (CCWA) and the four South Coast water agencies- the City of Santa Barbara,  Montecito Water District, Carpinteria Valley Water District and GoletaWater District.  In the case of the Montecito Water District, the agency is spending 39% of its total budget this year (over $4.9 million) on State water, but they are not taking any of it because they don’t need it.  Continual price increases have led to decreased water use such that State water is not needed.  The water district is having to dip into reserves to balance its budget.

Krieger said, “Even with the existing cost estimates, a Peripheral Canal/Tunnel will lead to additional rate increases and bankrupt our local water agencies.  The ECONorthwest report predicts that under the lowest cost scenario, Santa Barbara County water rates will go up on average $24/month in 2019.  The high cost scenario would increase rates by $160 month in 2019.”

The C-WIN report estimated the 1998-2011 average cost of State water for the four South Coast water agencies at $3,000 to $6,000 per acre-foot and up to $9,000/acre-foot during the 2010 drought year.    Water agency estimates of unit costs per acre-foot are much less than C-WIN’s estimates because they are based on delivery of full contract amounts that have never been delivered and are not likely to ever be delivered.  The report also compares the actual cost of State water to other available sources including the Cachuma Project groundwater, recycling and reopening the City of Santa Barbara’s mothballed desalination plant.   All other sources of water are cheaper, even with the large costs of restarting the city of Santa Barbara’s mothballed desalination plant.

Tom Stokely, C-WIN’s project manager and principal author of the report said, “I was astounded when I saw what was promised and what actually happened in Santa Barbara County.  It’s clear from the research that the existing costs of State water are straining water agency budgets to their limits.  More debt from a Peripheral Canal/Tunnel will surely send these agencies over the edge into bankruptcy.  Additional water rate increases cannot compensate for these additional costs.  Ratepayers will decrease consumption resulting in even less revenue to the water agencies, putting them further in debt.”

Krieger added “Based on the California Department of Water Resources’ history of lowballing cost estimates for this project and others, there is no reason to believe that constructing 33’ diameter twin tunnels 150’ under the Delta will ‘only’ cost $14 billion.  It will surely cost much more than that, especially when you consider the costs of financing, materials, energy and the potential for engineering design problems.  It’s just another example of dishonesty in government.  There are more reliable and cheaper alternatives to the Governor’s boondoggle.”