Out of Control

Of course, auditors can be hard to please, and I’m more concerned about whether DWR is putting water bond money to good use than whether they’re doing the right amount of paperwork. That’s why it is particularly disturbing to read the auditors’ accounting of $623,000 in pedestrian bridges, bike trails, and other “recreational enhancements” bought with Prop 13 flood protection funds:

The program manager stated that Water Resources believes that these enhancements add allowable public benefits because Proposition 13 does not specifically prohibit such activities. Water Resources stated that it considers several factors when making funding adjustments, including whether the proposed enhancements are within the scope of the flood protection program and represent a sufficiently small portion of the project… However, Water Resources’ rationale appears to be inconsistent with its decision to fund the structural and recreational enhancements for the Clover Creek project. The grantee for that project used 20 percent of the grant funds—roughly $609,000—for such enhancements and received more than $8 million in additional funding from other sources. We do not believe that 20 percent of the total grant meets the definition of a sufficiently small portion of the project.

—or the most expensive project, DWR’s $17.6 million share in The Nature Conservancy’s acquisition of Staten Island, a 9,200-acre island in the Sacramento–San Joaquin River Delta valued for agricultural production, sandhill crane and other wildlife habitat:

Six years after Nature Conservancy acquired Staten Island, Water Resources has yet to implement a flood protection project on the island, and it is unclear whether the acquisition will ultimately result in a tangible flood protection project… at the time the grant was awarded, the flood protection benefits were conceptual only, and the benefits and costs had not yet been quantified. The branch chief told us that, based on a rough cost benefit analysis that Water Resources prepared in August 2005 [four years after the grant was made], the costs to implement a flood protection project on land that includes Staten Island greatly outweigh the benefits to be obtained.

The California Bureau of State Audits re-visited their recommendations to DWR in a progress report (they’re fond of those) released this week. How did DWR measure up? The auditors report that action is “pending” on most of their recommendations. DWR has hired some analysts and, another sunny point in the report: “To improve project management, the department indicates it has implemented a software package for use on propositions 84 and 1E projects. It states that the software has an automated reporting capability and that department management will receive reports at least quarterly.”

Overall, that might be good news. Still, I wouldn’t be confident about buying any flood protection from these folks in the future. It’s been expected for some time that Californians will vote this year on some version of a bond to put more money into shoring up levees to protect below-sea-level Delta properties against encroachment by San Francisco Bay, water storage (dams), conveyance (peripheral canal), precipitously declining Delta fish and wildlife populations (and of course, the inevitable pedestrian bridge here and there). $4.1-billion Proposition 1E, approved in November 2006, was only a down-payment on Governor Schwarzenegger’s “Strategic Growth Plan,” envisioned as “the first phase of a 20-year investment… [leveraging] $68 billion dollars in bonds over the next 10 years to invest more than $222 billion in the state's infrastructure without raising taxes.” The water and flood control portion of that plan initially included “$9 billion in general obligation bonds to be issued in two installments, one $3 billion installment in 2006 and $6 billion in 2010” as well as $26 billion in “non-state” funding resources.

The Planning and Conservation League has interesting news today that DWR has requested a budget allocation in order to begin construction on a peripheral canal, because “according to DWR's analysis, DWR has the authority to build a peripheral canal without legislative or voter approval.” That’s an interesting analysis, if true, because the attempt to write that sort of authority into one of the proposed water bonds has been a subject of some controversy in the last few months. If DWR is right about their authority, then maybe all that fuss was for nothing. DWR also reportedly thinks they could get the project done by mid-2015.

Republicans and Democrats in Sacramento and, unfortunately, voters at large, all appear eager to fund these proposed projects, even though most of the benefits would fall to relatively easily-defined groups of private water users and the fraction of the state’s population living below sea level in what hydrology experts refer to as the “future Sacramento Bay.” The state and federal governments certainly haven’t made a big effort to recoup costs from these private beneficiaries in the past. For example, farmers in the San Joaquin Valley still owe $497 million (interest-free) for the last dams and canals built in the late 1960s as part of the Central Valley Project according to a Government Accountability Office report last December.

But who’s counting, right?