Pleasanton, Alameda Co. Residents Pay Millions For Emergency Oroville Dam Repairs

PLEASANTON, CA — With California’s seemingly endless drought, it may be years before the spillway at Oroville Dam — which created Lake Oroville, the largest state-owned reservoir — sees another drop of water.

That wasn’t the case in February 2017, when runoff from torrential rains filled Lake Oroville to its 1.1-trillion-gallon capacity, forcing dam operators to release torrents of water that damaged both the main and emergency spillways. Short-lived evacuation orders were issued as a precaution for more than 180,000 people living downstream.

Within eight months, the main spillway was repaired. During 2018, the spillway was completely reconstructed and a new emergency spillway was completed.

The price tag: Nearly $1.2 billion at least, of which $1.1 billion was paid as of last May. Pleasanton residents were among the millions of Californians tapped to shoulder those costs.

Part of that sum will be paid through property taxes or increased water rates by customers served by 29 water districts that have long-term supply contracts with the State Water Project, operated by the California Department of Water Resources.

The Federal Emergency Management Agency is expected to reimburse $630 million of the cost, with about $479 million paid over the next 16 years by water agencies, an amount that will be increased by interest, according to the water resources department.

Until then, the water resources department has been paying the bills from its short-term financing program and proceeds from bond sales.

The state began collecting the water districts’ proportionate share of the costs during the 2019-2020 fiscal year, and payments will continue through 2035.

East Bay Agencies Will Pay Millions

Two Alameda County water districts will be among those contributing to the cost of Oroville spillway reconstruction: the Alameda County Water District and the Tri-Valley’s Zone 7 Water Agency.

Zone 7, officially known as the Alameda County Flood Control and Water Conservation District-Zone 7 Water Agency, sells wholesale water to the City of Pleasanton, the Dublin-San Ramon Services District and the privately owned California Water Service serving Livermore.

Zone 7 will be assessed some $9.1 million as it share of Oroville costs.

Osborn Solitei, Zone 7’s treasurer and assistant general manager for finance, said that his agency’s portion of the costs will be financed over a 15-year period and that the annual payments for spillway reconstruction would be around $800,000, which will be obtained from property taxes levied within the district.

But the FEMA reimbursement process is ongoing, and Zone 7 doesn’t yet know what portion of overall reconstruction costs will actually be paid by FEMA, Solitei added. Zone 7’s annual payments are “just an estimate and may change based on actual interest rates and [federal] reimbursements, which can impact the final share of the total cost,” he said.

One Zone 7 wholesale customer is the Dublin-San Ramon Services District, a water retailer operating in both Alameda and Contra Costa counties providing water to the City of Dublin and nearly 8,000 customers in San Ramon’s Dougherty Valley area.

Because Zone 7 cannot directly recover any of its State Water Project costs through property taxes in Contra Costa County, the Dublin-San Ramon Services District will collect the money through the Dougherty Valley Assessment District and pass it along to Zone 7. That levy, expected to be around $208, will appear as a line item on property tax bills sent to the Dublin-San Ramon district’s San Ramon customers this fall.

The Alameda Water District, a water retailer to 84,000 customers in Fremont, Newark and Union City, will contribute an estimated $4.97 million as its share of rebuilding the Oroville spillway.

About two-thirds of the district's state water bill is paid through a special property tax, and the remainder through general water rates, according to district spokesperson Sharene Gonzales. The district’s total payments to the state are less than 7 percent of the district’s current budget.

“Consequently, we expect any rate impacts related to spillway reconstruction to be minor for our agency,” Gonzales said.

The portion of Oroville spillway costs paid by individual water districts is calculated based on the percentage of a district’s maximum water allotments and are included in annual bills — or a statement of charges — sent to each water district.

What Is The State Water Project Anyway?

Conceived in 1960, the water project is a labyrinth of reservoirs, pipelines and canals stretching more than 700 miles. It's designed to deliver almost 1.4 trillion gallons of water to millions of California residents and businesses — most in Southern California — and provide irrigation to some 750,000 acres of farmland.

The project’s crown jewels are Oroville Dam, America’s tallest, and Lake Oroville, the state’s second-largest reservoir behind Lake Shasta.

Water is provided in various quantities under terms of water supply contracts with individual water districts, most of whom sell the water at wholesale rates to municipalities and other local water suppliers who resell to their own residential, business and agricultural customers.

Although the long-term state contracts are effective through 2035 and specify an annual maximum allotment of water for each contracting water district, the actual amounts of water delivered depend on available supplies and are affected by drought and other factors that result in districts frequently receiving less than their allotted amount of water.

The project’s water is free. Contracting agencies pay for the cost of storage, delivery, maintenance and other operational expenses, which are reflected in the wholesale rates contractors charge their customers who, in turn, establish higher retail rates for homeowners and others.

Here's What Other Californians Owe

Matt Keller, a spokesman for the Santa Clara Valley Water District in San Jose, said his district estimates it will pay about $21 million, including financing costs, through 2035 — or $1.4 million annually.

Historically, Keller said, the district has paid its water project costs by levying a State Water Project tax instead of raising wholesale water rates. Based on its current estimates, the average district household will pay an extra $2.16 per year.

The huge Metropolitan Water District of Southern California is the water project’s largest contractor, accounting for some 45.8 percent of water deliveries. It provides water not only to the City of Los Angeles, but also to 13 other cities in Los Angeles and Orange counties, along with a dozen municipal water districts serving Orange, San Diego, Riverside, San Bernardino and Ventura counties.

Its share of the tab will be around $228 million, not including interest, and will be included in charges to its member agencies.

Metropolitan Water District customers include the cities of Beverly Hills, Long Beach, Pasadena and Santa Monica, as well as the San Diego County Water Authority, the Municipal Water District of Orange County and the Las Virgenes Municipal Water District that serves the cities of Agoura Hills, Calabasas and several unincorporated areas of western Los Angeles County.

A Metropolitan Water District spokesperson told Patch its share of water project costs, including the portion for the Oroville spillway, is paid through property taxes and rates and other charges for services provided to member agencies.

The 10-year rate forecast included in the Metropolitan Water District’s current biennial budget calls for rate increases of between 3 and 5 percent, with revisions possibly considered during the budgeting process next spring.

Metropolitan Water District customers will, in turn, decide how these additional costs will be passed on to their customers.

One district, the San Gabriel Valley Municipal Water District, which wholesales supplemental water to four small cities in Los Angeles County, says its annual payments will be made from reserves.

Correction: A previous version of this story misstated the amount of money collected by the Dougherty Valley Assessment District.