
In the video from a recent hearing in the California Legislature, it appears that a Brown administration official is admitting that financial support for Governor Brown’s controversial Delta Tunnels Plan is rapidly collapsing.
On March 11, Secretary of Natural Resources John Laird spoke on behalf of the administration during a hearing in San Francisco by the Senate Select Committee on the Sacramento-San Joaquin Delta entitled "Pending Delta Decisions and their Potential Economic and Other Impacts on San Francisco & the Bay Area."
Laird responded to the news that the Westlands Water District, the largest agricultural water district in California and longtime proponent of the tunnels, used Enron accounting to mislead investors about a $77 million bond sale, resulting in a settlement with the Securities and Exchange Commission over civil charges. He described the news as disturbing and then admitted that the California Water Fix to build the Delta Tunnels "won’t move ahead unless people, it pencils out for people and they sign up and they pay."
Westlands agreed to pay $125,000 to settle the charges, making it only the second municipal issuer to pay a financial penalty in an SEC enforcement action. The district’s general manager Thomas Birmingham agreed to pay a penalty of $50,000, and former assistant general manager Louie David Ciapponi agreed to pay a penalty of $20,000 to settle the charges against them.
It is disturbing, said Laird during the hearing. It’s disturbing to us. We found out about it just as you did, from the press reports of the SEC decision.
And, overall, this is, as you say, a beneficiary pays project, where the beneficiaries themselves have to decide to do it, Laird continued. It really depends totally on their ability and their willingness to pay for the project. And I think it is totally clear that the urban users have the financial wherewithal to do it.
I think the real question is how does it pencil out in the agricultural regions? But the Governor has been really clear. It’s beneficiary pays and that’s what it takes to go ahead and I think it’s just a law of economics that it won’t move.