In his first week of office, President Donald Trump made clear his plans to build more water storage projects in California and to deliver more water to farms and cities. While the president has been an ardent critic of the state’s environmental regulations, the infrastructure push aligns with Governor Gavin Newsom’s goals for expanding the overall supply.

Yet neither official has surmounted the greatest obstacle to projects. Cost overruns have led to the demise of two major storage projects recently, offering a cautionary tale of the steep financial and regulatory hurdles at play and putting more scrutiny on a suite of projects yet to break ground, including Sites Reservoir in Northern California.

On Sunday Trump issued an executive order directing the Bureau of Reclamation to deliver more water to farms and Southern California cities. Water contractors applauded the order and its directive to override any state laws that would block the action and to exempt endangered species restrictions.

Tribal, environmental and sportfishing interests derided it, and seized on a memo Trump drafted his first day in office to argue he is planning another attempt at raising Shasta Dam to increase storage.

Striking a middle ground, the State Water Contractors highlighted recent improvements to pumping operations that incorporate science-based decision making and real-time monitoring. Yet the association pointed to the state’s aging infrastructure and pressed for more support for the Delta Conveyance Project and for fixing canals damaged by subsidence.

After taking office Newsom threw his full support behind the single tunnel project as well as the Sites proposal, though he drew a line with raising Shasta Dam. Building on the infrastructure push, Newsom set a strategy in 2022 to increase storage space by 4 million acre-feet.

Sites is one of six remaining projects in line for nearly a billion from the $2.7 billion Proposition 1 water bond voters approved in 2014.

The California Water Commission is reassessing the allocations, however, after the collapse of a separate Prop. 1 project in November. Among the above-ground storage proposals on the table, the expansion project for Los Vaqueros Reservoir was seen as a sure bet. Since it was adding to an existing reservoir, it had no environmental opposition, and it presented additional ecosystem benefits, storing water to support Central Valley wetlands.

“Los Vaqueros looked like the one project that had probably the least hurdles to meet,” said Commissioner Daniel Curtin, during a discussion on the project’s demise during the agency’s monthly hearing. “But really, it was incredibly complicated.”

Like Sites, Los Vaqueros is an off-stream reservoir, sidestepping the environmental impacts that come with “corking” a river for a dam. The expansion would have boosted the storage capacity from 160,000 acre-feet to 275,000. It initially was part of the Peripheral Canal project, a proposal crafted in the 1940s to sidestep water deliveries around the Sacramento-San Joaquin Delta. But the collapse of the canal project in 1982 drove the proponents of the reservoir expansion, the Contra Costa Water District, to explore other funding pathways.

greg gartrellGreg Gartrell, PPIC

In 2003 the district undertook a series of studies to examine the feasibility of the project. The positive results led other districts to eventually collaborate on a joint powers authority. As the proposal progressed, the water commission in 2018 set aside $477 million in Prop. 1 funding for it and later allocated an early funding award of $24 million to support the ongoing planning effort.

By 2023 inflation and permitting delays had added more costs to the project. While the first permit, from the California Department of Fish and Wildlife, provided greater clarity for how the JPA would operate the reservoir after the expansion, the department had added new restrictions that reduced the amount of water the project could yield, according to Rachel Murphy, general manager of the district, who presented to the commission.

Further uncertainty over the project’s future emanated from the State Water Resources Control Board, which has been considering a significant update to its Bay-Delta Water Quality Control Plan. Other issues arose from a series of land acquisitions for construction related to a key pipeline.

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The estimated cost for the project then ballooned from $980 million in 2017 to about $1.6 billion. The district’s board of directors directed Murphy to reassess the commitments of each member agency within the JPA.

“It was our hope in this process to really get an understanding of the viability of the project,” said Murphy. “Several members, as a result of [a significant retraction of the business case], reduced their participation in the project.”

It was now 25% undersubscribed, as the districts turned to cheaper, less complex projects like groundwater storage and water recycling and reuse. In November the district announced it was withdrawing its Prop. 1 application and dissolving the JPA.

“The situation evolved pretty rapidly,” said Amy Young, who heads the Prop. 1 program at the commission.

She explained that, until October, the district’s quarterly reports to the commission indicated the project was progressing.

“We shouldn't have been blindsided by this thing,” said Commissioner Jose Solorio. “The fact that we essentially knew nothing, or very little, about the changing dynamic speaks about our intel capacity.”

Commissioner Alexandre Makler, who has for 30 years led similarly difficult construction projects for energy facilities, shared deep disappointment with the collapse of the project, saying the proponents lacked candor and should have come to the commission earlier to collaborate on potential solutions.

“What you guys did, in withdrawing from this program, is you've taken a project out that this state has invested about a decade of time, valuable time, and money to support,” he said.

Curtin countered that the commission could not have changed the financial decision to pull out of the project.

“It fundamentally came down to money, and people made the decision that this is not of enough value,” said Curtin. “Is it bad for a local agency to say, ‘I can get a groundwater project done for less money?’ I'm all for that.”

Greg Gartrell, who worked on the project as the district’s assistant general manager until 2013, told Agri-Pulse the regulatory environment required a more creative approach from the start. The proponents did not see the state’s strict rules as obstacles but as opportunities to solve problems for CDFW as well as the project.

“When you get out and work on solving other people's problems as well as your own, you're much more likely to get a project done,” said Gartrell, who is now an adjunct fellow at the Water Policy Center within the Public Policy Institute of California. “Frankly, that is how [the district] got the original project done and the expansion to where it is now.”

If you fight, he added, “you're going to spend a lot of time fighting and you're not going to get anywhere.” To him, the biggest lesson was the importance of communicating with all parties involved.

The expansion proposal was the second Prop. 1 project to fall by the wayside during the Newsom administration. In 2020 a proposal to build Temperance Flat Reservoir in the San Joaquin Valley fell apart after a 20-year push, with costs and delays the top contributors.

The commission later redistributed the Temperance allotment to the other projects, as it plans to do for the Los Vaqueros money.

Ric Ortega, general manager of the Grassland Water District, shifted the commission's attention to Sites Reservoir. The two off-stream reservoirs were to provide a combined 90,000 acre-feet of water annually to Central Valley wildlife refuges, enough to support 125,000 acres of critical wetlands for migrating birds.

Worried that more projects could suddenly fall out of the program, Makler pressed for stricter noticing requirements proponents and more frequent conversations.

“If a project looks like it is not going to happen, that's an appropriate thing to bring to this commission,” said Makler. “With respect to project viability, this is a forum for that, and we're paying for that.”

Alexandre MaklerWater Commissioner Alexandre Makler

The Sites Project Authority is due to update the commission in September on the progress of the $4 billion project. Jerry Brown, the authority’s executive director, cautioned to Agri-Pulse that each water project is unique, but he recognized the Los Vaqueros expansion has provided some lessons, many that Brown has already applied, since he served as the Contra Costa district’s general manager before joining the Sites authority in 2020. He stressed that Sites is run “more like a coop,” with multiple investors, while the Los Vaqueros project was owned by one district.

He acknowledged the potential for further delays, but said that is always a possibility with major projects in California. He pointed to a series of recent milestones showing Sites is nearing the finish line. It completed an environmental review in 2023 and wrapped up the litigation phase months later, thanks to Newsom’s Senate Bill 149 to fast-track judicial review for infrastructure projects. Sites has received a CDFW permit that, unlike the Los Vaqueros situation, did not present any surprises for the operating conditions. The project is on track to gain a water right, finalize agreements and start construction within the next 18 months, according to Brown.

“We're showing you can manage through it. It just takes a long time,” he said. “What that tells us is: Is there a way — for something that's critical for a large part of our society — that we could find a means to get through this quicker, without cutting corners?”

Gartrell also emphasized that Los Vaqueros and Sites are dramatically different projects with widely divergent circumstances. Like Brown, he pressed the need to build large water projects to provide a more reliable future for California, noting that investments decades ago in the State Water Project — and even basic infrastructure like highways — will pay off in years to come.

Gartrell clarified that the lasting legacy of the Los Vaqueros expansion project is not the potential lessons learned about financial planning and collaboration but the project itself.

“I don't think it's dead. It's delayed. It will come back,” he said. “With climate change, with the heating we're seeing now, with the reduced snowpack and places to put water in wet years, it will become more and more valuable.”

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