California's Other, Other Boondoggle: The Sites Reservoir

California’s beleaguered attempt at a high speed train line may be the ultimate in failed infrastructure with a ballooning cost over $100 billion, 17 years gone by, and giant mysteries about where the money went.

But it’s not the only failed venture of the Golden state. The Sites Reservoir project was originally approved of in 2014 through Proposition 1, along with various other water conservation projects. The reservoir was set to be 1.5 million acre-feet of off-stream storage capacity for the Sacramento Valley but also provide water for the Bay area and Los Angeles, yet ten years later and there is little progress to speak of.

The state still struggles with water issues like those during the recent Los Angeles fires. It endured years of drought, with Governor Newsom declaring a state of emergency in October of 2021. That led to restrictions on water use statewide and sharply escalating water costs. The state would probably still be in a drought today if it wasn’t for the torrent of rain that came in 2022.

Originally, the proposition allowed for a $7.5 billion in funding via a water bond, with $2.7 billion set forth for water storage projects, including the Sites Reservoir among other projects.

While the bond was issued, funding was never really allocated to the reservoir from the bond until 2021. With no funding and a slew of environmental permitting processes, little got done. Even once the money was allocated little has happened and deadlines were repeatedly pushed back.

Eventually Governor Gavin Newsom insisted he would create a “strike team” that would help cut through all of the regulatory red tape, but that didn’t do much. A recent update lists every aspect of planning except for the feasibility study to still be ongoing.

Contracts for non-public cost share (ongoing)

Contracts for administration of public benefits (ongoing)

Completed Feasibility Studies (complete)

Final Environmental Documentation (ongoing)

All required federal, state, and local approvals, certifications, and agreements (ongoing)

California is known for having stringent environmental regulations, and the reservoir project is no exception. Besides standard construction permits, the project will need approval from the California Department of Fish and Wildlife (CDFW) for the state Endangered Species Act, the Army Corps of Engineers for the Clean Water Act, plus the Division of Safety of Dams, the Federal Endangered Species Act, the National Historic Preservation Act, and the State Water Resources Control Board.

While Governor Newsom celebrated the defeat of an environmental lawsuit against the project in September of 2024, at the same time the Army Corps of Engineers rejected the project plan.

Now the Sites Reservoir itself is estimated to cost $4.5 billion—almost double the original estimate, which originally included numerous other water storage projects, with the money from the original bond likely already being spent.

The state’s heavy-handed approach to environmental regulation also stymied other major water projects. Protections for a small fish that lives in the Sacramento-San Joaquin Delta known as the Delta Smelt limited the Central Valley and State Water projects and is the source of a multi-decade long legal battle.