On December 31, 2025, the Third District Court of Appeal issued an opinion rejecting the Department of Water Resources’ (DWR) attempt to validate its authority to issue revenue bonds for the planning, acquisition, and construction of the “Delta Program.” DWR must now find alternative means to fund its proposed Delta Conveyance Project, estimated to cost anywhere from $20 to $100 billion.
In 2020, DWR adopted three bond resolutions (Bond Resolutions) purporting to authorize revenue bond financing for the “Delta Program,” defined in the Bond Resolutions as “facilities for the conveyance of water in, about and through the Sacramento-San Joaquin Delta, subject to such further specification thereof as [DWR] in its discretion may adopt.” DWR concurrently filed a validation action (Validation Action) seeking a judicial determination that DWR’s Bond Resolutions intending to authorize the issuance of bonds are valid, legal, and binding. A geographically and ideologically diverse group of parties, including Delta public agencies, State Water Project contractors north and south of the Delta, environmental and non-governmental organizations, filed answers opposing the Validation Action. These opponents challenged the legality of DWR’s adoption of the Bond Resolutions and, in part, the scope of DWR’s authority to adopt the Delta Program as a “further modification” of a component of the State Water Project, specifically, the Feather River Project.
In its opinion, the trial court agreed with the opposing parties, relying on fundamental principles of statutory interpretation to analyze Water Code section 11260, which authorizes DWR to make “modifications” to State Water Project facilities. The trial court found that DWR was not authorized to adopt the Bond Resolutions because the “Delta Program” is too vague and uncertain to qualify as a “further modification” of the Feather River Project.
The Court of Appeal affirmed the trial court’s decision, stating that “[t]he Delta Program’s scope is so opaque and ill-defined as to afford DWR nearly unlimited discretion to specify the facilities for which the bonds will be issued,” and in effect, “the Bond Resolutions would give DWR authority to issue an unlimited amount of bonds to finance the work.” The Court of Appeal found that the Delta Program’s vague definition, which was untethered to the purposes and objectives of the Feather River Project previously approved by the Legislature, was simply too “expansive” to qualify as a mere “modification.” Consequently, the appellate court agreed with the trial court’s conclusion that DWR exceeded its legislatively delegated authority to construct and operate the Delta Program as a “modification” of the Feather River Project. Because DWR’s authority to issue bonds to finance the Delta Program is derivative of its argument that the Delta Program is an authorized “modification” of the Feather River Project under Water Code section 11260, the Court of Appeal affirmed the trial court’s decision to deny validation of the Bond Resolutions.
Without judicial validation of the Bond Resolutions, DWR’s authority to fund the Delta Conveyance Project or any other Delta conveyance facilities is legally uncertain. In an attempt to address the uncertainty caused by the trial court’s decision, while awaiting the appellate court’s decision, DWR adopted a new bond resolution and filed another validation action in 2025. That validation action is currently before the Sacramento County Superior Court and faces numerous legal challenges from many of the same parties who challenged the Bond Resolutions, including State Water Project contractors who have supported the Delta Conveyance Project but are concerned about its cost. The challenges to this new validation action raise many issues that the trial court did not need to address in the Validation Action.
Somach Simmons & Dunn represented the County of Sacramento, Sacramento County Water Agency, and City of Yuba City (a State Water Project contractor) in the Validation Action. For more information, see our prior discussion and analysis of the Sacramento County Superior Court’s ruling in the Validation Action here.
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