Monday, March 5, 2018

The Wall and The Tunnels: Multibillion dollar boondoggles share bait and switch financial plans and more

Donald Trump’s biggest campaign promise was building a $20+ billion wall along the Mexican border.  The financial plan:  “Mexico will pay!”

For a decade, Metropolitan Water District has been campaigning for the $16+ billion Delta tunnels.  The financial plan:  “Farmers will pay!”   Well, that hasn’t exactly been their line.  Instead, the promise has been, “The cost is the same as a latte a month” along with promises of “no subsidies for farmers.” 

There have been many dubious assumptions behind Met’s calculation that it will “only” cost the average southern California household a few dollars per month, but the biggest whopper has always been that Met’s ratepayers would only covering 25% of the bill – which meant Central Valley farmers would shoulder the vast majority of the costs.

Despite the fact that most knowledgeable people knew both Trump and Met’s financial claims were a joke, they stood by these myths when they were in campaign mode trying to build political support and a sense of inevitability behind their mega-projects.  But in recent months, both of them have faced the reality of switching from a political campaign to actually getting the billions of dollars needed to fund construction of their pet projects.

Trump has spent the past several month’s trying to get Congress to appropriate over $20+ billion for the wall, even threatening government shutdowns and a DACA solution in his effort to get taxpayers to pay.  His new financial promise:  “Congress will pay, but Mexico will reimburse us.” 

As first reported by the Sacramento Bee's Ryan Sabalow, Metropolitan is now trying to rush its board into voting to pay for the farmers share of the tunnels.  Met's new financial scheme: “Our ratepayers will pay, but the farmers will reimburse them.”

Congress has not agreed to pay for Trump’s wall.  Likewise, Metropolitan’s board should not agree to finance the Governor’s tunnels.  The Met board has been misled about financing the tunnels for a decade, and I would advise board members not to believe this latest plan either:  The farmers aren’t going to pay you back, AND you aren’t going to get a share of their water supply if they don’t. 

All the way back in 2012, I predicted in an economic analysis of the tunnels that they were financially infeasible unless urban ratepayers and/or taxpayers covered 90% of the cost.  I think that prediction is looking pretty good today.  It is certainly more accurate than the consultant and staff presentations the MWD board has been listening to for 10 years.

The parallels between the Tunnels and the Wall go beyond this synchronized pivot from “other people will pay” to “you will pay, but the other people will reimburse you.”  Both of these multi-billion dollar concrete mega-projects are not very effective at addressing the issue they are trying to solve. Furthermore, both of these projects are incredibly divisive concrete symbols of power that are truly offensive to large segments of the population.

For example, Congressman LuisGuiterrez famously tweeted this about the Wall, “It would be far cheaper to erect a 50-foot concrete statue of a middle finger and point it towards Latin America. Both a wall and the statue would be equally offensive and equally ineffective…”

Many Delta region residents and environmentalists feel similarly about the Delta tunnels.  

And Metropolitan’s new go it alone financing plan makes the tunnels even more divisive than ever, because it will open up a new hostile front in California’s water wars between the urban serving State Water Project and the agricultural serving Central Valley Project.  MWD’s Jeff Kightlinger acknowledged this when answering concerned questions from his board members:

"it puts the two projects in competition instead of in partnership and how to sync their operations. Now you would have CVP people saying we need to maximize south Delta, we need to politicize that issue as much as we can, and that’s not appropriate because we’re the one who made the investment to do the more environmentally friendly investment. How we would work that with the state and federal project at odds with each other, trying to work these out in the state and federal legislatures is challenging..."
This is an accurate assessment of the additional conflict, except that many disagree with him that the tunnels are an environmentally friendly investment.   

Metropolitan’s new financial plan would make a bad project even worse.  Will Met’s board be able to resist the political pressure to take a rushed vote on this ill-advised strategy?  Sounds like we will find out next month.

1 comment:

  1. This is a very perceptive and accurate assessment. MWD member agencies are being asked to commit billions of their rate payer and property tax payers dollars for a project that will not yield water but will inevitably lead to years and years of expensive litigation. MWD member agencies would be better served to invest in local projects that can provide real water and local jobs.

    Jonas Minton, former Deputy Director, California Department of Watger Resources