California’s Department of Water Resources wants to sell bonds without voter approval to fund the Delta Tunnel project. After losing in court, DWR is trying again. Here’s the story of the cases known as California Department of Water Resources v. All Persons I and II.
In August 2020, the State Department of Water Resources filed a validation action seeking court approval to sell “revenue bonds,” without an election, to fund construction of a large tunnel to divert water from the Sacramento River before it reaches the Delta, and carry it south to Tracy, to be pumped into the California Aqueduct for transport to Central and Southern California.
HJTA filed an answer on behalf of taxpayers. Several other groups, such as environmental organizations and local agencies that buy water from DWR, filed answers as well.
HJTA has no position on the wisdom of building the planned Delta Tunnel. We joined the suit to assert taxpayers’ right to vote on the bonds. The California Constitution requires statewide voter approval before the State may issue bonds, unless the funded project will generate new revenue sufficient to repay the bonds.
HJTA argued that the new tunnel will not provide new water, but will simply reroute the same amount of water around, rather than through, the Delta. Therefore, DWR will have nothing new to sell. We also argued that voters already pledged DWR’s existing revenue stream to be used exclusively for the repayment of other bonds. Therefore the new bonds, we argued, do not qualify for the “revenue bond” exception from voter approval.
In August 2023, the Sacramento Superior Court found that DWR’s authority to issue bonds under the Central Valley Project is limited to projects that have been “adopted” as a modification of the Feather River Unit. The Court found that DWR had not officially committed to the Tunnel but had left its options open and, in so doing, had not adopted anything or confined itself to a modification of the Feather River Unit. Based on these findings, the court denied validation of the bonds.
DWR appealed its loss. The appeal is fully briefed and oral argument will be scheduled soon. In the meantime, however, DWR in January filed a new validation action. Its new suit alleges that the Department has now completed the needed preliminary studies and has fully committed to building the Tunnel, thus overcoming the defect which led the court to rule against it in the first case.
HJTA filed an answer to the new complaint, as did several other groups. HJTA’s main objection — the lack of voter approval — is still an issue in the new suit. The new case now goes forward.
This important work to protect taxpayers would not be possible without the support of HJTA’s Members. If you’d like to make a donation to the Howard Jarvis Taxpayers Foundation before the end of the tax year, or at any other time, donations may be made securely online at HJTA.org/take-action, or checks may be mailed to the Howard Jarvis Taxpayers Foundation, 621 S. Westmoreland Avenue, Suite 200, Los Angeles, CA 90005.
If you’re considering a legacy donation, HJTA’s Heritage Society offers an opportunity to ensure that important taxpayer protections are secured for our children, grandchildren and their children. For more information, please contact Foundation President Craig Mordoh by email at Craig@HJTA.org or call him at 213-384-9656.
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