Development of the Agency and Its Projects

FORTITUDE PREVAILS

The history of the Yuba County Water Agency and its Yuba River Development Project is the story of people overcoming engineering, financial and political obstacles that would have deterred most. These people, however, were visionaries who had the courage, tenacity, ingenuity, and perseverance to stay the course regardless of the long odds or the obstacles. They overcame them all in order to harness a river that had time and again destroyed lives, homes and crops. For over 100 years, the people of Yuba and Sutter Counties had braced for battle against the rivers which provided them with the essence of their agricultural economy but which also in high water years loomed as enemies that would destroy their industry, wipe out their homes and take their lives.

Before the great flood of 1955, the state had started planning its California Water Project which would build Oroville Dam on the Feather River. But there was no project in State or Federal planning that would control the Yuba River. Since the wake of the 1950 flood that had raced through Linda and Olivehurst, south of the Yuba River, there had been men at work in Yuba County on a water program that would control the Yuba River against disastrous floods and develop water resources for farmers who were pushing their wells ever deeper into dwindling underground reservoirs. The population of Yuba County, and Sutter as well, had been growing steadily since World War II and the flood of 1950 had emphasized the danger to lives as more suburban home sites developed.

Led by Harold J. Sperbeck, the Yuba County Board of Supervisors created in December 1951 the Yuba County Water Resources Board. The board had been able to do little more than evolve preliminary plans, locate water rights and help the component water districts until after the 1955 flood. The first problem that had to be resolved was the creation of an effective Water Agency that could take firm action to develop the Yuba River Project. Over a three-year period, a community battle raged over how to create the Agency and how it should be governed.

In January of 1959, Yuba County went to the State Legislature through Assemblyman Harold T. Sedgwick, with a bill to create the Agency, which was almost lost in committee. Then it was debated on the Assembly floor for longer than the state bond bill authorizing Governor Brown’s big dream — the California Water Project. A similar battle took place in the Senate. And lobbying against the bill went on in the governor’s office right up until the time Brown signed it on June 1, 1959.

No one in Yuba County realized it at the time, but the election of Edmund G. (Pat) Brown as governor of California in 1958 probably helped the county get its water agency approved. Brown brought to the governor’s office a near religious fervor about building the massive state water project. With such grandiose plans in mind Brown could hardly stand in the way of a small county with a much more modest plan for a water project. The Agency became a reality in the fall of 1959 and started a long, arduous and stormy campaign that was not to reach a climax for almost seven years.

At the same time the Agency had foes in its own backyard. Johnson Rancho Water District of southern Yuba County was determined to stop the Agency. This district, which doesn’t exist today, had an alternate plan that involved extensive facilities to control water in Yuba, Nevada, Placer and Sierra counties. This battle was so bitter it forced the Agency to bring suit for malicious harassment against the small district.

The Agency employed International Engineering Co. of San Francisco, one of the leading engineering firms in the world, to make a feasibility study and, in January of 1961, that firm filed a report outlining Yuba River development that would cost approximately $185 million. Key concepts of the Project were development of sufficient hydro power to repay bond financing, without any tax obligation on the part of local landowners and a long term contract for sale of power to Pacific Gas & Electric Co. at a guaranteed annual payment which would be the sole security for the bond issue. In addition, some help was looked for in the form of a Federal contribution in recognition of Project flood control accomplishments and a state contribution in recognition of statewide benefits to recreation and fish enhancement.

Even so, the project posed a financial chore beyond all other obstacles that would have tried the resources of a state government no less that of a county which was rich in history but short on financial assets. In fact, at this point in its history, the Agency had exhausted its funds. It had committed several years of tax revenues to a loan from the county general fund that was needed to pay engineering costs. Few people in local, state or federal water bureaus believed that Yuba, one of the state’s smaller counties with an assessed valuation of only $65 million, could develop a project that carried a price tag of almost $200 million. Once again, the Agency proved everyone wrong.

When the ballots were counted on May 16, 1961, Yuba County voters had approved, by an 11-1 margin, the $185 million in revenue bonds needed to fund the project. This was almost three times the total county assessment at that time. But still the Agency faced some complex political maneuvers that had to be carried out despite its lack of political muscle at either the state or federal level. The Federal Power Commission required a construction license. This license required: an agreement with the U.S. Forest Service, which controls Plumas and Tahoe Forests on the Yuba watershed, to insure protection of the forest lands; a recreation plan acceptable to the Forest Service; a Fire Control Plan; a negotiated agreement with the California Department of Fish and Game that would provide fish protection and enhancement; and an agreement with the U. S. Bureau of Reclamation and the State of California for future downstream development.

The Agency plowed forward with successful appeals for a Federal cash contribution from Congress in recognition of flood control benefits and authorization from the State Legislature for carrying out recreation and fish enhancement through a grant under the Davis-Grunsky Act.

Meanwhile, it faced the problem of finding financing for final design of the Project and preparation of plans for construction bids. This was partly accomplished through a $400,000 loan from the Federal Community Facilities Administration with repayment obligated only if the project became a reality.

Finally, there were the complicated negotiations with Pacific Gas & Electric Co. for a 50-year contract for sale of power that would finance the revenue bonds and acquire the existing power generating plants that PG&E had long been operating at the old Bullards Bar Dam and downstream at Colgate.

Final designs were prepared and by the summer of 1964, the Agency could look at the framework of its Project. A decision was made to call for bids to get construction underway before a lethargic bond market and a depression in the price of power put it out of business. The bid opening in September of 1964 elicited considerable interest on the part of several contractors, but in the end they declined to bid – “too many contingencies and not enough money” was the consensus.

After an agonizing reappraisal by the Agency and its engineers, a revised plan was developed to produce more power, more efficiently by eliminating the proposed New Bullards Bar Power Plant and by replacing the old PG&E Colgate Power Plant and tunnel with larger facilities. To save additional money the irrigation diversion dam and canals, and the New Narrows afterbay and other project amenities were eliminated. Irrigation diversions and the canals would be left for a later stage of construction.

Bids were called for again, in December of 1965, and this time all the necessary contracts, licenses and permits were accomplished facts. But costs had continued to climb sharply since the fall of 1964 and power values continued to fall and, shortly before the bid date, the bond market interest rates rose more than one percent. The Agency received two sealed packages in response to its invitation for bids. One turned out to be not a bid, but a substitute proposal for a negotiated cost plus “target estimate” contract. The other was a bona fide bid, some $26,000,000 higher than the estimated funds available, from a contracting combine called Perini-Yuba Associates.

Upon finding that the bidding contractor was willing to negotiate a contract, Agency officials obtained the cooperation of the Governor in a special call to the Legislature and, as interest rates continued to climb, were granted legislative authority to execute a negotiated contract with the bidder for the largest single public works contract ever awarded in California.

After intensive negotiation, involving concessions on the part of the Agency, as well as concessions by the Contractor and PG&E, it was found that there was still an unclosable gap between costs and revenues amounting to $8,710,000. Interest rates continued to climb, with each 1/8 percent representing almost $4 million less cash available for construction, all the while power values were declining. The impasse was solved by a novel and unprecedented arrangement, under which the contractor, the engineer and PG&E agreed jointly to purchase sufficient Series B subordinate lien revenue bonds to close the actual fund gap at completion of construction. These bonds mature after retirement of Series A Bonds in 50 years.

The Series A Bonds were sold to a single bidder May 24, 1966, – Blyth & Co. and Smith-Barney Inc. of San Francisco. It appears in retrospect that there were only a very few days when market conditions were such that this issue could have been absorbed. On June 1, 1966, the money and bonds were delivered, and a unique construction project was under way.

BUILDING A PROJECT

The construction was undertaken by Perini-Yuba Associates. They would hire up to 3,000 workers, hailing from every state in the United States. A score of local firms including H. Earl Parker, Baldwin Contracting Co. and Tenco made major contributions to the development. The task before them was monumental and the time line was set by the contract, which stated “the project must be completed and operational four years and one month from the starting date”.

The challenges lay in the geography of the land where the construction was to take place – - steep, rocky canyons accessible only by narrow roads located miles from any large city — and weather in the form of torrential rains that could wipe out months of excavation work in a few hours. Both could cause delays, which no one could afford. The Agency and the contractor knew that lives, homes and businesses would be lost if the project wasn’t completed before the Yuba rose up again. A half-mile of vapor lights strung across the canyon allowed shifts of men to work 24 hours a day for more than two years. Day in and day out concrete was continuously placed 20 hours a day.

In January 1969, a storm hit that produced a historic runoff on the river. Engineers had foreseen such an event and had required the center block of the dam be left lower to handle the Yuba. The waterfall that spilled over that center block was spectacular; even in its unfinished state the new dam had kept the Yuba from turning deadly and destructive. By the end of 1969 the project was moving toward completion. New Bullards Bar Dam was completed and water was being stored in the new reservoir.

In early 1970 the New Colgate Powerhouse, which contained two of the largest turbines of their kind ever built, was ready for trial tests to produce electricity. The 1300-foot drop of water from behind New Bullards Bar Dam boosted the force of the water at each turbine to the equivalent of 212,000 horsepower. But within a month it was shut down when a crack was discovered in the 47-ton stainless steel runner on the number two unit. Men worked 24 hours a day at Colgate to grind out the crack in the runner while experts from Switzerland and Germany hurried across the Atlantic to figure out a solution to the problem. The repair was made within three weeks, and back in service as good as new.

The New Narrows Powerhouse, which began producing electricity in February, 1970, had problems too. A ten-inch long strap of steel broke loose and tore up the stator and pole windings and set fire to the generator. By ship, the generator was taken back to Japan. There it was rebuilt, reshipped and returned to the Project for installation and generation of power by May 10, 1970.

After a score of years of frustration, disappointment, and at times tears, determination and perseverance prevailed, and on June 30, 1970 the Yuba County Water Agency became owners and operators of the $180 million Yuba River development.

So in the beginning there was the Yuba River, blessed in freshet and damned in torrent – and a band of determined men. They worked in tiny committees. They rallied the backing of a community. They faced the U.S. Congress and the State Legislature. They pleaded before commissions and courts. They drudged over drawing boards and poured through law books. They dickered with bankers and reached into the executive suites of great corporations. They labored in winter storms and sweated in summer heat. They wept with frustration and cheered with victory.

And in the end they were Builders. Creators of a Project that tamed a river, that offered new water resources, that multiplied useful energy, that opened a new area of recreation and that protected their homes and the homes of their children.