Review of the new “Cost and Benefits Analysis”

Everyone who opposes the Delta Tunnels and think they are a dumb idea has been complaining that there is no Cost and Benefits Analysis for the Delta Tunnels nor a Financial Feasibility Study. It was a major complaint raised last fall during the State Auditor’s review of the tunnels at a meeting held by Jim Frasier and the Delta Caucus Legislative Group. A document the DWR released claiming to do that, by David L. Sunding during the BDCP years (what they called the Delta Peripheral Canal, then Tunnel plan before they came up with the new “WaterFix” term), met with distain by independent reviewers, like Dr. Jeffrey Michael of the UOP, who’s analysis showed the tunnels to be a terrible investment.

But, not to be discouraged, Dr. Sunding tried again.

The California Department of Water Resources (DWR), the group responsible for the Delta Tunnels, has released an Economic Analysis of Stage I of the California WaterFix Costs and Benefits to Urban and Agricultural Participants, again by David L. Sunding. The State is announcing that the tunnels are a good investment (Stockton RecordNet). Oh, yeh? I expect Dr. Michaels to be blasting this document as well.

Now Sunding has evaluated the one-tunnel approach and concludes that the benefits outweigh the costs to ratepayers in every scenario he analyzed and make economic sense (Courthouse News). “Really?” I ask.

But even before we get others chiming in, even I can easily poke holes in Dr. Sunding’s attempt to put lipstick on a pig – again.

Here’s what’s so very wrong with Sunding’s analysis:

(1) The benefits to farmers and urban users in his analysis is based on the additional water they plan to receive using the tunnels over the Status Quo. But wait a minute here – the status quo water is less than they want because they want (and are now taking) more than the environment can provide. Regardless of where the water is taken out, the point is more needs to flow through the Delta.

(2) Related to #1, he rightly assumes new biological opinion will be even more restrictive to the status quo scenario. He incorrectly extrapolates that to somehow believe it matters where the water is removed from instead of the correct assumption that the issue is lack of water flowing through the Delta, hence regardless of where it is removed from, less needs to be removed than the 5 MAF average/year they want. The point is, they need to start planning how to reduce export levels, not find some sneaky way to try to get more water out of the same Delta.

(3) His assumptions fail to include the costs that will result from the tunnels due to damage in Northern California. This is a biggie. There is no “cost” due to failed salmon fisheries; to the commercial salmon industry. There is no “cost” of loss of economic benefits due to boating and fishing in the Delta. No “cost” due to the economy of communities in the Delta – from the quaint historic towns like Lock and Hood to the boating communities like Bethel Island and Discovery Bay – lost due to construction and later loss of water quality. I’ve been researching lately the economic benefits to California from the bass fishing industry. Did you know that California (and mainly the Delta) is a huge economic resource for that industry: bass fishing boats and all the gear related to bass fishing. Plus what about the economic loss due to other recreational boating? The South Delta will basically be closed to recreational boating (water skiing, wake boarding) while this construction project is ongoing.

(4) There’s a discussion of the value of “improved water quality” but that is as it relates to the exported water used by farmers and urban users to the south. There is no discussion of extra clean-up costs and other issues due to lowered water quality in the Delta, including the cost to get rid of toxic blue-green algae and invasive weeds which will occur when the tunnels go in, just like they occurred during the drought years. The Delta needs fresh water flowing through it to keep it healthy and avoid these issues.

(5) Home values in my community (and many others in the Delta) will plummet. What’s the good of having a home on a Delta bay if the water is polluted and salty? Waterfront homes in Discovery Bay go for at least $200K more than off-water. Golf course homes also go for a premium – will they if the golf course is watered with salt water and turns brown? And if the bays are salty and full of toxic blue-green algae? During the drought a multi-million dollar home sale fell through because of the algae.

Well, I, for one, will sue their butts (pardon my French) if our bays turn to crap. And I think I know a great lawyer who would happily take them on (his house is also on the Delta).

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