Appeals court blocks California’s bond plan for Delta water tunnel
A California appeals court has blocked the state’s plan to finance the proposed Delta Conveyance Project, ruling that the California Department of Water Resources lacks legal authority to issue billions of dollars in bonds for the project under existing statutes.
In a decision issued this week, the state’s 3rd District Court of Appeal upheld a lower-court ruling that invalidated bond resolutions approved by water managers in 2020, the Sacramento Bee reported. The court found the financing plan was overly broad and granted DWR “nearly unlimited discretion” to define the scope and cost of the project without sufficient legislative or public oversight.
The Delta Conveyance Project calls for construction of a 45-mile underground tunnel to divert water from the Sacramento River and route it beneath the Sacramento–San Joaquin Delta to Southern California. State officials argue the tunnel is necessary to modernize aging infrastructure and improve long-term water reliability amid climate change. The project is estimated to cost as much as $20 billion and would take more than a decade to complete.
According to the Sacramento Bee, opponents—including Delta-area counties and environmental groups such as the Sierra Club—challenged the bond plan, arguing DWR improperly relied on a decades-old statute intended for minor modifications to the State Water Project, not the creation of a major new conveyance facility. The court agreed, saying the department bypassed a more appropriate statute that would have required additional legislative approval and tighter financial controls.
While the ruling does not block construction of the tunnel itself or rule on environmental permitting, it disrupts the state’s preferred financing pathway. DWR now faces a choice: narrow the project to fit existing legal authority or seek explicit authorization from lawmakers—or potentially voters—to issue bonds. Separate litigation over environmental approvals remains ongoing, leaving the future schedule of the Delta Conveyance Project uncertain.
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