Governor Gavin Newsom’s administration is facing intense criticism and allegations of wasting taxpayer money after allocating California water rights and agricultural water acquisition totaling $180 million to protect salmon.
Critics point out that the administration paid an excessive amount of money relative to the actual volume of water secured.
According to a Los Angeles Times report on the 23rd, the California Department of Water Resources (DWR) entered into a $180 million contract with RRG Capital Management, a private investment firm based in Los Angeles, last June. The initiative aims to leave a portion of the agricultural water used by farms near the Sacramento River in the river to improve the habitat conditions for native fish, including salmon.
Depending on the contract terms, the amount of water secured annually ranges between 5,000 and 16,000 acre-feet. Environmental groups calculated that based on the minimum water volume secured, the state paid approximately $36,000 per acre-foot, raising doubts about cost-effectiveness.
Peter Drakmayer, policy director for the Yosemite Rivers Alliance, noted, “Taxpayers are paying top dollar to secure amounts of water that are unlikely to bring about meaningful change.”
Notably, while a previous appraisal last year valued the entire farm at around $180 million, the permanent market value of the water secured amounted to only $40 million to $46 million.
Environmental organizations have expressed concern that if this transaction sets a precedent, the cost of similar future projects could balloon from the originally expected $1.1 billion to as much as $5.6 billion.
In contrast, the state government pushed back, arguing that the contract is not a one-time water purchase but a permanent water resource securing project. A DWR official emphasized, “This ensures that water can be supplied for native fish such as salmon even during extreme droughts, and it is difficult to evaluate the value of a project guaranteeing permanent water supply against long-term droughts simply by looking at annual water costs.”
