Oroville Dam: With bills rolling in, state borrows heavily

California is borrowing up to $500 million to pay for the crisis at Oroville Dam, although it expects to be reimbursed for its costs.

The Department of Water Resources obtained a $500 million line of credit last week to cover expenses connected to the spillway fracture at Oroville, including the permanent repairs. DWR obtained a separate $300 million credit line last week to cover other capital improvements for the State Water Project beyond Oroville.

Federal money is expected to pay for much of the repairs. President Donald Trump in early April approved a request for $540 million in winter storm repair funds for California, including $274 million to deal with the short-term emergency at Oroville.

The state also plans to seek reimbursement from the Federal Emergency Management Agency for 75 percent of the cost of the dam’s permanent repairs. Kiewit Corp. of Omaha, Neb., has won a $275.4 million contract for the repairs, which are expected to take two years.

Despite the federal funding, the state had to line up financing because it could take a while for FEMA to reimburse the state, said spokeswoman Nancy Vogel of the Natural Resources Agency, which oversees DWR. Vogel said the state has already tapped $67 million of the available $500 million.

Water customers, not state taxpayers, are expected to pick up whatever costs aren’t covered by the feds. Because Lake Oroville is the main storage facility of the State Water Project, state officials believe the costs will be borne by SWP member agencies such as the giant Metropolitan Water District of Southern California.

The $500 million line of credit was arranged through Wells Fargo, despite State Treasurer John Chiang’s decision last fall to suspend the big bank from most forms of state business as punishment for a scandal over unauthorized customer accounts. Chiang spokesman Marc Lifsher said the DWR credit deal doesn’t violate the treasurer’s rules.

Dale Kasler: 916-321-1066, @dakasler

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