Water, Money, Taxes, Campaigns, and the Bond: The Resnick Farming Story

Water, Money, Taxes, Campaigns, and the Bond:
The Resnick Farming Story

By Barbara Barrigan-Parrilla and Various Associates

1. Farming Water
2. Farming Money
3. Farming Tax Deductions
4. Farming Legislative Support
5. Farming Prop. 1 and Past Water Bonds
6. The Resnick Farming Story

Farming Water

Today we’re going to consider some shenanigans going on down around the end of the Delta-Mendota Canal, the second of the two canals that convey water south out of the Delta. (This is the federal Central Valley Project – CVP – facility; the other is the State Water Project’s California Aqueduct — SWP.)

The Delta-Mendota Canal ends west of Fresno where a channel called Fresno Slough connects the Kings River to what is left of the San Joaquin River. The Mendota Dam there creates a reservoir called the Mendota Pool which is used to hold water to irrigate crops.

Nearby are the communities of Mendota and Firebaugh, with their serious employment problems and their water quality challenges.

Farmers in that region have gamed ground water pumping for years by putting pumps next to the federal Delta Mendota Pool and pumping the water out back into the state and federal canals only to resell it to the taxpayers or to take it back for irrigation. In the 1990s, Westlands growers were the main beneficiaries of these practices, but lately the Resnicks have joined the pool pumpers. That is because the Resnicks now farm in numerous west side San Joaquin Valley water districts, in addition to Kern County.

Starting in 2005, the Resnicks purchased a number of Paramount Farm parcels in Madera and Fresno Counties, adding over 15,000 acres to their 150,000 acre operations in Kern County. (See the attached acreage spreadsheet.) The Resnicks have purchased land along the San Joaquin River and the Delta Mendota Pool area just south of Los Banos and west of Firebaugh. They also own property near Fresno Slough. So, we now have Paramount Orchards Partners in the Mendota Pool area, where groundwater pumping and transfers are already in full swing.

The possibilities are endless. Resnick can pump water from the San Joaquin River, from groundwater, and from the Central Valley Project and State Water Project aqueducts. He can move water from Westlands to his operations in Kern County, while taking Delta water directly from the SWP in Kern County as well. And once the water reaches Kern County, he can store it for a dry day in the Kern County Water Bank, of which he owns a controlling majority, and then sell the water for a profit. One source tells us that he is using Westlands water to process almonds at his new processing plant. Quite a creative use for federal irrigation water.

Farming Money

The tentacles of Paramount Farms spread far and wide, with controlling interests in Berrenda Mesa, Belridge, and Dudley Ridge water districts on the west side of the San Joaquin Valley. Berrenda Mesa and Dudley Ridge have already been involved in huge water sales, including the sale by Dudley Ridge landowner John Vidovich of paper water to the Mojave Water Agency for $73 million. If the Resnicks were to sell the 22,000-plus acre feet of Dudley Ridge water they control under the same conditions and price, it would be worth more than $200 million to the Resnick bottom line.

This isn’t about growing food to feed people in the U.S. or anywhere else. Never mind decent jobs or water for the region’s disadvantaged agricultural workers. For Resnick, this is about the potential to make a LOT of money controlling water.

Farming Tax Deductions

Many suggest corporations were attracted to the Central Valley not out of a love of farming but because of the tax benefits afforded to farmers if they grew permanent crops. During the 1960s, the Internal Revenue Service allowed investors to immediately write off their entire share of development costs for growing almonds and other permanent crops. While some, but not all, of these advantages were removed for almonds in the 1970s, they all still exist for pistachios, and non-citrus fruits like pomegranates. Thus, despite droughts and lack of water, permanent crops continue to be planted. Permanent crop acreage has vastly expanded since the last drought in 2009, including new plantings of almonds in 2014. Guess there are still advantages to farming tax deductions.

So is this why “farmers” like Stewart Resnick continue to plant permanent crops and buy up thousands of acres in an area like the west side where it rains less than 7 inches a year? We think the main course for Stewart Resnick is to control water supplies, but with a dish of tax advantages on the side. Plus, campaign contributions indicate his intent is to have even greater access to subsidized water via Proposition 1 with its nearly $1 billion marked for “river and stream” purchases that can be taken from the Bay-Delta estuary for export. Additionally, with his ability to pump water from each and every source in the San Joaquin Valley, some extra storage projects for a little bit of new water, paid for in great part by tax payers, would provide even greater flexibility for his water transfers.

Farming Legislative Support

From January, 2013 through June, 2014 Stewart and/or Lynda Resnick,/Paramount Farm Companies contributed $206,000 to Senate and Assembly races throughout the state. These Senate and Assembly maps show the enormous reach of Resnick’s influence on politics in Sacramento. Some of his most generous contributions were made to those in charge of specific committees or sitting on committees that work on water and the environment and agriculture, or to legislators who serve in important watershed areas. (Please note that under Stewart Resnick’s name, contributions have only been updated through June, 2014.) We have not yet seen if additional contributions flowed from him to the Capitol in the weeks before the passage of the water bond. Click here to see if your representative received contributions from the Resnick empire.

Resnick’s reach is so vast that his contributions even made it into the campaign coffers of several Delta legislators. Dr. Richard Pan (Assem-9th District) received $3,000.00; Senator Cathleen Galgianni (Sen-5th District) received $4,000.00; and Assemblymember Susan Eggman (Assem-13th District), and Chair of the Assembly Agriculture Committee received $5,000.00. It is worth noting that these three legislators have raised very little in contributions from local farmers, and less than 20% from businesses and people within the districts that they represent. (We will return to that subject later.)

It should also be noted on the Federal side that Stewart Resnick has been even more generous with our two Senators and Central Valley Congressional Representatives who are working on legislation at the Federal level to take even more water from the Delta.

Farming Prop. 1 and Past Water Bonds

Since 2000, California has spent about $20 billion in water bonds and interest. The titles of these past bonds, like Prop 1, carry the promise of a safe, clean, and reliable drinking water supply. That is why we must ask: “Where is the water in this drought to show for all the billions borrowed?”

The bond pitch is always “clean drinking water,” “safe drinking water,” but it is never delivered. From 2000 to 2006, voters approved a total of $15.47 billion in new debt (before interest) to meet the same needs for which we are being told Prop 1, ($7.2 billion in new debt; $14.4 billion with interest payback) will deliver.

Let’s take a stroll down memory lane:

* Proposition 12: The Safe Neighborhood, Parks, Clean Water, Clean Air, and Coastal Protection Bond Act of 2000 — $3.8 billion (with interest); Voter approved debt $2.1 Billion in 2000.
* Proposition 13: The Safe Drinking Water, Clean Water, Watershed Protection, and Flood Protection Bond Act of 2000 — $3.4 billion (with interest); Voter approved debt $1.97 Billion in 2000.
* Proposition 40: The California Clean Water, Clean Air, Safe Neighborhood Parks, and Coastal Protection Act of 2002 — $4.3 billion (with interest); Voter approved debt $2.6 Billion in March 2002.
* Proposition 50: The Water Quality, Supply, and Safe Drinking Water Projects (Coastal Wetlands Purchase and Protection) Act of 2002 — $5.7 billion (with interest); Voter approved debt $3.4 Billion in Nov 2002.
* Proposition 84: Bonds for Clean Water, Flood Control, State and Local Park Improvements Act of 2006 — $10.5 billion (with interest) Voter approved debt $5.4 Billion in 2006.

Do any of our readers remember this promise from Prop 84?
“$1 billion in funding for integrated regional water management. These funds will provide grants to increase water supply, reduce demand, and protect water quality. The result will be an additional 1 million acre feet of water per year for California.”

Under Prop 1 those who pay the least get the most water. That means Stewart Resnick and big growers like him. In contrast, family farmers in the Delta, fishers, and local communities will lose water through accelerated exports. Prop 1 continues this charade. And our urban neighbors in LA, SF, San Diego, Orange County, and the Bay Area will contribute the most money in their taxes to pay back the general fund debt under Prop 1, while gaining small amounts of new water through limited local projects.

The Resnick Farming Story

To say the least, it is frightening how much influence one corporate agribusiness can exercise over the operations of the state and federal water system in California through a combination of land purchases, tax breaks, and campaign contributions to a large pool of California legislators. Worse, Paramount farms even works they system through contributions to Delta legislators, Central Valley Congressional Representatives, and our two Senators. This of course does not include the $150,000 that Stewart Resnick has contributed to the Prop 1 Campaign coffers, as part of the $850,000 contributed in total by big ag to Governor Brown’s campaign for the bond.

Here at ground zero — the Delta – we are calling on Assemblymember Pan, Senator Galgianni, and Assemblymember Eggman to return the contributions that they have received from Stewart Resnick. To take money from Stewart Resnick, whose entire mission is to control water exports from this magnificent estuary, destroying our home in the process– all for his expanding corporate empire — is wrong. Their campaign coffers are far from empty. If they feel that they need these few extra thousand dollars to win their campaigns, then they should hold some picnic or pancake fundraisers within their districts so they can reconnect with those who love the Delta.

More importantly, the Resnick story makes it clear why we all should reject Prop 1. Until water rights are adjudicated in California so that “farmers” like Resnick cannot game the system, the system cannot be fixed. In the meanwhile, legislators need to take an accounting of where the money has been spent from past bonds, and create a bond that is solely for groundwater cleanup, recycling, conservation, storm water capture, near-term drought measures, ensuring that poor communities will have their drinking water problems solved, and for the development of new water technology that will make us water efficient. What we don’t need is another bond that makes Stewart Resnick richer.

1 comment

JOIN US: Bees swarm California with new graphic and tour “Sucked Dry: Examining Drought and Privatization from Mesoamérica to California

We have some exciting news, the Beehive Design Collective, Restore the Delta & the NO on PROP 1 coalition will be swarming California with a new graphic and tour focused on California water politics in the midst of a massive drought starting tomorrow.

We will be introducing a *brand new graphic* about the BDCP tunnels at several workshops and events throughout the state to help stop the BDCP TUNNELS that threatens the SF Bay Delta, the largest estuary on the western hemisphere. The graphic draws inspiration from struggles against large-scale infrastructure projects throughout MesoAmerica, connecting local and the global struggle for control and protection of water.

All events are open to the public and we encourage you to come. More details on dates are below:

OCT.(Download and save graphic of tour schedule)
18- Fremont – 6pm @ FUSE (Fremont Underground Social Experience), 39112 State St. (at Capitol Ave.)
19- San Francisco – 2pm @Dolores Park
20- West Oakland – 7pm @Greenpeace Warehouse, 955 7th St.
21- Berkeley 2-5pm @Sproul Plaza, UC Berkeley campus, 7pm location TBA
22- San Jose – Police Brutality Solidarity Event at DeAnza (12pm)
23- Santa Cruz – 7pm @Museum of Art and History, 705 Front St.
24- San Luis Obispo – 7pm @Linneas Cafe, 1110 Garden St.
25- Santa Barbara (TBA)
26- Los Angeles – 2pm @Hollenbeck Park in Boyle Heights, 415 S. St. Louis St. w/ Food and Water Watch
27- Ventura – 6:30pm @The Lab, 11137 Azahar St
28- San Bernardino – 7pm @Black Flame Collective, 360 W. Orange Show Ln.
29- Bakersfield (TBA)
30- Fresno – 5pm @Anvil Art Gallery/Manchester Experiment, 3302 Blackstone Ave Suite G 203
31- Davis – 1pm @Delta of Venus Cafe, 122 B St.
1- Redding (TBA)
2- Chico w/ AquAlliance
3- Stockton – evening show @Huddle, 235 N San Joaquin St. w/ With Our Words, DeltaFusion, Restore the Delta and others.
4- Sacramento – 7pm @Sol Collective, 2574 21st St.

About the tour:

California is in the midst of a historical drought, the most severe the region has had in the last 500 years. This water crisis has devastated resources, with several communities facing the prospect of running dry. A number of projects advocating infrastructure development such as the BDCP and Prop 1 have been proposed as solutions for the state, but are they truly in the interests for all? What are their impacts to our drying rivers and reservoirs? Fisheries and communities? Drawing inspiration from struggles against large-scale infrastructure projects throughout MesoAmerica, the Bees with Restore the Delta’s Javier Padilla Reyes will take you on a visual journey touching on the local and the global struggle for control and protection of water.

About the Bees

Based out of small-town Machias across the country in rural Maine, the Beehive Design Collective is an all-volunteer organization of activists, artists, educators and organizers. Our main focus is creating and presenting graphic works about global issues internationally. These portable murals are teeming with intricate images of plants and animals, illustrating surreal but meticulously researched scenes of sociocultural realities in the modern world. Not only are our graphics detailed, beautiful works of art, but they also are tools in understanding the big picture of a region’s struggles.

More on the Bees (VIDEO): http://www.upworthy.com/the-poster-is-mesmerizing-the-story-it-tells-is-electrifying-have-you-seen
More on MesoAmérica Resisté (graphic): http://beehivecollective.org/beehive_poster/mesoamerica-resiste/


News from Restore the Delta; California Water Commission: Not Neutral

“. . .Who lined himself with hope,
Eating the air on promise of supply,
Flattering himself in project of a power
Much smaller than the smallest of his thoughts . . .”
― Shakespeare, Henry IV, Part 2, I, iii

Not BDCP neutral
The odd case of the Water Commission
Drought preparedness – Not

Not BDCP neutral

In order for the water bond to be BDCP neutral, as its Delta legislative supporters insist that it is, it would need to do more that ensure that no bond money can be spent on tunnels and that no water contractors can get credit for any Delta habitat activities.

In order to be BDCP neutral, the water bond would need to ensure that no funding can be used for projects that facilitate continued reliance on exports that damage the Delta and the Bay-Delta Estuary. The Bay Delta Conservation Plan is supposed to be a habitat conservation plan, and it will never succeed until export flows are reduced.

But in fact, up to half the funding in the water bond is designed to perpetuate a water storage and delivery system that California has outgrown. Given 21st century climate and environmental realities, making that system bigger is not going to make it better.

Legislators who favor building dams and reservoirs voted for this water bond because they want funding for public benefits associated with Temperance Flat Dam and Sites Reservoir (not that there is enough funding here for both). Promises, it appears, were made.

Meanwhile, large environmental organizations that supported the bond think they can influence the California Water Commission, which gets to decide how the money is spent, to consider giving some funding to groundwater storage instead. Jay Ziegler of The Nature Conservancy has noted that groundwater storage provides an 8 to 1 benefit over dams. He has said that his organization has “a high level of confidence” that the California Water Commission is going to choose groundwater storage projects over dams. This, while some California legislators, like Senate President pro Tem Darrell Steinberg and Senator Cathleen Galgiani, were busy trying to get the Federal Government to help pay for the dams through a special resolution at 10 p.m. on the Friday night before the end of the legislative session.

One side or the other is deluded.

The words “dams” and “reservoirs” don’t appear in any chapter title in the water bond. You’ll have trouble finding the word “dam” at all. What you will read about is “projects” that will contribute to “Statewide Water System Operational Improvement.” Specifically, you see Sites Reservoir, and Temperance Flat listed. So what does that mean?

The “State Water Facilities” are described at Water Code §12934(d). Included are multipurpose dams and reservoirs and an extensive aqueduct system. The Water Code allows for the State Water Facilities to include “other additional facilities as the department deems necessary and desirable to meet local needs, including, but not restricted to, flood control, and to augment the supplies of water in the Sacramento-San Joaquin Delta. . . .” “Additional facilities” could include groundwater storage, but people weren’t thinking much about groundwater storage when the Burns-Porter Act authorizing the State Water Project was approved by voters in 1960.

Groundwater storage projects did get mentioned in the 2010 version of the water bond, and we find them in the current bond in Chapter 8 (“Statewide Water System Operational Improvement and Drought Preparedness”). But the deck is stacked against them. Here’s what the bond says about how the funds can be spent:

79753. (a) Funds allocated pursuant to this chapter may be expended solely for the following public benefits associated with water storage projects:

(1) Ecosystem improvements, including changing the timing of water diversions, improvements in flow conditions, temperature, or other benefits that contribute to restoration of aquatic ecosystems and native fish and wildlife, including those ecosystems and fish and wildlife in the Delta. (Translation: This storage can be operated to improve flows for the ecosystem, something fisheries agencies will require that water contractors do in order to operate the twin tunnels. Surface storage could be operated that way; groundwater storage, probably not.)

(2) Water quality improvements in the Delta, or in other river systems, that provide significant public trust resources, or that clean up and restore groundwater resources. (Compared to water quality improvements affecting the Delta and its tributary rivers, how competitive will groundwater clean up and restoration projects really be?)

(3) Flood control benefits, including, but not limited to, increases in flood reservation space in existing reservoirs by exchange for existing or increased water storage capacity in response to the effects of changing hydrology and decreasing snow pack on California’s water and flood management system. (Groundwater storage? Well, maybe.)

(4) Emergency response, including, but not limited to, securing emergency water supplies and flows for dilution and salinity repulsion following a natural disaster or act of terrorism. (Groundwater storage? Not likely.)

(5) Recreational purposes, including, but not limited to, those recreational pursuits generally associated with the outdoors. (Groundwater storage? Obviously not.)

These are the public benefits that the California Water Commission will be asked to use in considering how to spend the $2.7 billion in this chapter of the bond. Although they are supposed to consult with Fish and Wildlife, the Water Board, and DWR, the money is continuously appropriated to them.

So who are they?

The odd case of the Water Commission

We’re so accustomed to having the Resources Agency give birth to new committees and processes with members, staff, agendas, reports, and videotaped meetings, that no one paid much attention to the curious resurrection of the California Water Commission.

A California Water Commission was in place half a decade before the Burns-Porter Act was approved in 1960. Originally, the Water Commission had seven members selected for “their knowledge of, interest in, and experience with problems relating to the control, storage, and beneficial use of water.” For decades, its primary function was to support the State Water Project (SWP).

However, from the early 1990s until 2009, the California Water Commission existed only on paper. It had run out of things to do to support the SWP, and although it has some functions relative to DWR under the Water Code, DWR seems to have been managing fine without it.

Then came the 2009 water reform legislation, and the Water Commission itself was re-formed, purportedly for the purpose of determining public benefits of the storage projects in the 2010 water bond – the same storage projects we are seeing in the present water bond. The 2009 legislation provided an excuse to do what some policymakers apparently wanted to do anyway: expand the role of the California Water Commission in California water governance.

Governor Schwarzenegger wasted no time in making appointments to this commission that was supposed to determine public benefits of projects for which funding might not even be approved by voters. One difference between this and the original commission was the addition of two members chosen for their knowledge of the environment. But it hasn’t been hard for recent governors to find people with knowledge of the environment who don’t behave like environmentalists at all.

A group of people with a meeting schedule, a staff, and $100 per diem can always find something to do: especially those who are part of the agricultural industry that takes Delta water for exported crops; engineering firm members who want to build big infrastructure projects; union leaders looking for new infrastructure construction jobs; and private consultants who have years of experience greenwashing projects enabling one NGO in particular to manage a great deal of land in the Delta. (Go here to see who the members are and what they’ve been up to.) One of the things they have done is to formulate guidelines and proposed regulations for quantifying and managing public benefits of water supply projects, using the 2012 version of the water bond.

As the draft regulations stand right now (the November 2013 draft), the public benefits focus on water quality, ecosystem, and recreational benefits. It will be hard for groundwater storage to compete with surface storage projects that have water quality, ecosystem, and recreational benefits. We will echo our friend Jerry Cadagan and others by noting that it is hard to water ski in an underground aquifer.

Public comments submitted on the draft regulations (the most recent are from March 19, 2014) include only one mention of groundwater – this, from Friant Water Authority: “How will the public benefits of restored groundwater be differentiated from the non-public benefits that result from additional groundwater supply?” That’s an excellent question. Thinking about groundwater storage will require a major reevaluation of the idea of “public benefits” that taxpayers should fund.

Governor Brown just reappointed seven of the Water Commission members this past July and made one new appointment. With the exception of one lone environmentalist, is this a group that would be inclined to undertake a major change in course away from dams and reservoirs? Are these people who are prepared to fight a status quo that they are part of and that is backed by some of the most powerful political interests in the state, when they already have draft regulations that favor surface storage?

Drought preparedness – Not

We’ve explored the connection between the proposed surface storage and flows for fish and water quality before. (See the last section of our August 15, 2014 newsletter.) The people who want to build Sites Reservoir (referred to as NODOS, or “North-of-the-Delta Offstream Storage”) say that it would be operated in conjunction with Trinity, Shasta, Oroville and Folsom to provide increased water supply, meet instream flow requirements, and improve water quality.

We said in August, and we’ll say again, that it has always been clear that the contractors would try to find a way to compensate for taking too much water from the Delta by trying to coordinate BDCP with operation of increased upstream surface storage. Both Glenn Colusa Irrigation District (which wants Sites Reservoir) and Friant Water Authority (which wants Temperance Flat Dam) made it clear to the Water Commission this past July that these projects have benefits that are tied to BDCP and export levels.

To pencil out for exporters, BDCP needs to provide reliable levels of export flows in all years, and surface storage supporters plan to operate dams and reservoirs to provide that reliability. Together with money that would be available for “enhanced environmental flows,” the water bond gives exporters just about everything they need to keep gaming California’s fragile water system to benefit Delta exports.

The main purpose of the storage projects in the water bond is not to store water for drought preparedness. That’s just the story voters are getting. The purpose of these projects is to regulate flows to meet water quality requirements with a minimal reduction in Delta exports. And that purpose is inseparable from BDCP.


Event Alert: Benefit Run for Restore the Delta and Cafe Coop

Calaveras River Fun Run/Walk 5K: Time to get healthy for the Delta!

DATE & TIME: Saturday, November 8 2014, 8:00 AM to 12:00 PM, more information on schedule below
LOCATION: University of the Pacific, 3601 Pacific Ave., Stockton, CA 95211 Start & Finish @ The University of the Pacific
To buy tickets, click here.

A Fun Run by Restore the Delta, Cafe Coop, BEA, Centre Plate, Central Valley Crossfit, Farm Fit & University of the Pacific. This run is organized by Students Run Stockton. Funds from run will benefit Restore the Delta and Students Run Stockton! For Sponsorship Opportunities, please contact (209) 292-8430.


7 a.m: Registration begins
8 a.m: 5K Walk/Run begins
9 a.m: 1K Walk/Run begins
10 a.m-2 p.m: Resource Fair

Take Part:
Run or Walk, Volunteer, Sponsor, Captain a Team, Join us Today!!!! Contact [email protected] for more information.

Participate for a good cause that benefits your community and your physical & mental health!

Price includes registration and t-shirt. Fiesta will follow the fun with prizes, giveaways, food and fun! To buy tickets, click here. Ticket information/details below:

Adult: $15
Kids Under 12: FREE

Adult: $25
Kids under 12: $10

Free Pre-Racing Training

– Tuesdays, 5:30 PM at Fleet Feet Fun Run (Stockton)
– Thursdays, 5:30 at CrossFit Training & Fun Run (Stockton)
– Saturdays, 9:00 am at Victory Park UC Yoga & Run (Stockton)


News from Restore the Delta: The BDCP is NOT dead

“This is the way the world ends; not with a bang or a whimper, but with zombies breaking down the back door.”
― Amanda Hocking, Hollowland

BDCP is NOT dead
How MWD proposes to make this pencil out
How the Water Bond plays into this
Wringing more water out of the Delta
Reducing flow for the SF Bay-Delta estuary through publicly funded water transfers

BDCP is NOT dead

On September 23, the Metropolitan Water District of Southern California (MWD) got an update on the Bay Delta Conservation Plan (BDCP) from Department of Water Resources Director Mark Cowin, Delta Stewardship Council Chairman Randy Fiorini, and MWD’s own Bay-Delta Committee.

Cowin told MWD that DWR is making progress on three fronts:
(1) Resolving the final issues on terms of the BDCP proposal, especially details of adaptive management (who decides, who pays, who’s on the hook)
(2) scoping work necessary for a recirculated CEQA/NEPA document, primarily because of physical changes to the proposal (alignment of tunnels and facilities), but also addressing other public comments, including those by the U.S. Environmental Protection Agency (EPA)
(3) developing scope of work and organization for Section 7 consultation for federal agencies. (The Endangered Species Act (ESA) directs all Federal agencies to work to conserve endangered and threatened species and to use their authorities to further the purposes of the Act. Section 7 of the Act, called “Interagency Cooperation,” is the mechanism by which Federal agencies ensure the actions they take, including those they fund or authorize, do not jeopardize the existence of any listed species.)

Cowin said that DWR was surprised by the content and tone of EPA’s comments, which were very critical of BDCP. He admitted that those comments were a blow to the momentum of the BDCP process.

For some reason, the EPA thought that the water contractors intend to operate the projects in violation of water quality law. Now, why would they think that? Cowin said the misunderstanding comes from an analysis that is based on a monthly time step model that doesn’t account for daily actions. So even though the water contractors have promised not to violate water quality standards, the modeling shows that they would. Cowin said it is necessary to get into the appendices to fully understand the approach. He promised additional clarifying analysis for the recirculation of BDCP.

(It doesn’t surprise us that the BDCP modeling doesn’t support the water contractors’ assertions or that the appendices and the main body of the analysis don’t agree with each other. That’s the kind of planning and environmental documents DWR produced.)

The Delta Stewardship Council’s Randy Fiorini told MWD that the Council’s review of BDCP was very positive. The Council just had some comments on the need to expand discussion of adaptive management. Discussion . . . yes. When it comes to adaptive management, discussion is all we ever get. Managing the system to benefit species and habitat is all in the future, as current operations, managed most of the time for maximum water deliveries, wreak their ongoing havoc.

How MWD proposes to make this pencil out

Of particular interest in the MWD update was the discussion of the status of BDCP cost allocations. Here’s a link to the Bay-Delta Committee’s presentation.

To understand what is going on with the discussion of allocation methods, it is helpful to understand the concept of Table A water. All contracts signed by State Water Project (SWP) contractors in the 1960s included a schedule of the amount of water each contractor could expect to have delivered annually, increasing gradually until the SWP was fully developed for a “maximum project yield.” Each contractor’s annual amount is called its “Table A” amount.

The SWP was never was fully developed, and the Table A amounts were reduced in the 1990s, although not very much and not with any apparent regard for the actual amount of water available from the watersheds sustainably, on average. The only nod to reality is the recognition that deliveries will be less than the maximum Table A amount in some years (presumably dry years) and more in others (presumably wet years).

The maximum Table A amount is still the basis for apportioning water supply and costs to SWP contractors.

MWD’s Bay-Delta Committee staff presented three methods for allocating BDCP costs but eliminated one (payment based on the amount of water delivered) because it created administrative and financial challenges. What they were left with is the Table A approach and the Subscribed Capacity approach.

Using the Table A approach would allocate costs among all SWP contractors except North of Delta contractors (only about 2% of the total), based on Table A amounts. (MWD’s Table A share is roughly 46% of SWP.) The Subscribed Capacity approach would have contractors subscribe for tunnel capacity based on their water supply needs.

Either approach would include provisions for contractor-to-contractor annual/multi-year transfers and exchange programs. In fact, both approaches rely heavily on agencies working out transfer agreements. What they propose is to update transfer and exchange provisions from the Monterey Amendments to the SWP (which among other changes altered the way SWP water was allocated among urban and agricultural water contractors) to make it easier to move water from contractor to contractor.

In other words, the proposals are that South of Delta SWP agencies
• start with Table A assigned apportionment, then work out water transfer agreements among individual agencies, OR
• choose how much tunnel capacity they are willing to pay for, then work out water transfer agreements if what they want is different from their Table A amount.
In either case, they could use transfers and exchanges. Tunnel capacity and water supply are all available for purchase.

How the Water Bond plays into this

If this sounds like a free-for-all (with nothing free), that’s probably what it is, and the different provisions in the Water Bond for measures like enhanced instream flows would probably facilitate it. One section of the Water Bond specifically provides funding for intrastate agreements that enhance the reliability of water supplies on a regional or interregional basis and provide significant regional or statewide economic benefits.

The contractors will need to decide up front what each agency’s participation will be. If most agencies are taking their full Table A contract amount, then the Table A allocation method probably makes the most sense. If many contractors are not using their full contract amounts, then the subscribed capacity method would work better for determining how benefits and costs are allocated. Agencies that have invested in wet year storage capacity or transfer capacity might need and want to pay for less than their Table A amount.

Wringing more water out of the Delta

MWD and other state and federal water contractors had their export supplies reduced as a result of a 2008 Biological Opinion (BiOp) by the U. S. Fish and Wildlife Service (USFWS). This BiOp found that operation of state and federal water projects threatened continued existence of Delta smelt, which were at their lowest numbers since tracking started in 1967. USFWS urged sharp cuts in diversions of fresh water from the Delta.

U.S. District Court Judge Oliver Wanger had ordered the USFWS to do the BiOp, but he didn’t like the result. In 2010, in response to complaints by water export interests, he ruled that USFWS had acted in an “artibrary and capricious” manner in crafting the 2008 BiOp. That decision in turn was appealed, and in March of this year, the Ninth Circuit Court of Appeals reversed Wanger’s decision. So BiOp restrictions on export diversions remain in place.

MWD sees BDCP as an opportunity to increase their ability to capture more water, and staff are explicit about wanting to recover the amounts they reliably received before the Wanger decision reduced supplies. Without BDCP, they will have to obtain additional supplies somewhere else, probably at higher cost. If they don’t get full subscription by SWP agencies for tunnel capacity, they will have to negotiate additional transfer and exchange agreements.

Reducing flow for the SF Bay-Delta estuary through publicly funded water transfers

It is still possible that MWD could pay its share to build the tunnels and end up with no more water, but they expect to have a more a reliable supply. Staff is trying to figure out how to maintain the average level of supply over the past 20 years, plus or minus 10%. But they are basing their assumptions on BDCP’s low outflow scenario, the one that provides for the least outflow to the estuary and Bay and the highest export flows. (What was that Cowin said about not operating BDCP in violation of water quality law?)

MWD is hoping to make the whole thing work for them with water transfers and exchanges. They want a system where those who invest more money get more water (costs should follow water). MWD is one of the agencies with the ability to invest more. If they pay 60% of the costs, they get 60% of the water.

MWD board members are still asking what happens if ecosystem restoration money isn’t available. But staff said that as long as the plan is moving forward and the contractors have done what they agreed to do, habitat restoration isn’t their problem.

Click here to watch the September 23, 2014 meeting. http://www.mwdh2o.com/mwdh2o/pages/board/videostream/

1 comment