It's time to again remind each other how and why we are backed into the corner we are; or if you are a newbie to the 'water game' in California...here's a fast-track fact-filled editorial from 2000 on why California has a Constitution. In fact, I find this editorial more timely today than 14 years ago. (Where has the time gone?)
Also, for those that did not know, when Planning and Conservation League settled their won lawsuit against DWR, et al; they abdicated their Public Trust standing in any lawsuits related to the Monterey Agreement. And whom was the President of PCL in 2003?? None other than Gerald Meral. For $5.5 million...that's $5,500,000, the people of California and the Public Trust Doctrine was sold out.
For 30 pieces of silver, the public was betrayed.
Kinda makes one wonder about some concerted strategic planning going on behind closed doors over a very, very long period of time. Any one else see a pattern of behavior here? A rotating cast of clowns, spinning away on their web of deceit.
Editorial
Monterey Agreement:
A Bloodless Coup
by Tim Stroshane
Renewed public scrutiny awaits a little-known agreement
negotiated quietly in 1994 by six water agencies and the
California Department of Water Resources (DWR) to
inaugurate California’s statewide water market and restructure
the State Water Project in the wake of a Sacramento
Third District Appellate Court decision on September 15,
2000. The Court found the compact’s environmental impact
report (EIR) defective.1 The Court also opens to further legal
challenge DWR’s transfer of a giant groundwater aquifer
called the Kern Fan Element (KFE) to the Kern County
Water Agency.
Dubbed the “Monterey Agreement” for the coastside city
where it was consummated, the Agreement states “principles”
for restructuring long-term contracts between the
California Department of Water Resources (DWR) and local
water contractors receiving water deliveries from the
California State Water Project (SWP). The “principles” were
intended to settle disputes that erupted over SWP financing
and water allocation under the contracts during the drought
years of 1987-92.
The “principles” contained in the Monterey Agreement
are in reality fundamental policy changes to the California
State Water Project. For instance, the Agreement transfers
control, and in one case ownership, of SWP facilities
illegally to regional water districts.
But more important, DWR’s implementation of the
Agreement through amendments to SWP contracts betrays a
key “principle” of California’s representative democracy: the
people of California voted on the State Water Project
expecting the Project would have long-term contracts whose
policy basis could not be changed even by the Legislature
(let alone the Legislature’s agent DWR).
Through the Monterey Agreement, the Department of Water Resources changed the SWP long-term water supply contracts without possessing the legal authority to do so.
“The Monterey Agreement is written to obfuscate the
changes it makes in the state’s water system, and we think
it’s illegal,” says Carolee Krieger, a member of Citizens
Planning Association in Santa Barbara, and an organizer of
the lawsuit that stalled the Monterey Agreement. “The worst
thing about it is it hurts the people of California.”2
The people of California voted in 1960 to approve
Proposition 1, a general obligation bond referendum to
finance construction of the California State Water Project.3
The referendum addressed water supply contracts, stating
simply: “Such contracts shall not be impaired by subsequent acts of the Legislature during the time when any of the bonds authorized herein are outstanding and the State may sue and be sued with respect to said contracts.”4
To allay public fears their water would be given away for
private gain and help secure passage of the referendum,
Governor Pat Brown “stipulated the water contracts could
not be changed by the Legislature as long as [the SWP’s
general obligation] bonds were outstanding.”5
Brown circulated, and the Legislature accepted, specific “contracting
principles” for SWP’s long-term water supply contracts that
would be signed by water agencies benefiting directly from
the SWP.
The contracts
• called for “take or pay” financing by the contractors, in
which they would be responsible for paying annual charges
to DWR, which would in turn pay interest to bond holders,
operations and maintenance charges, and other costs,
regardless of how much water the SWP delivered each year.
• addressed short-term water shortages by requiring
agricultural contractors to forego water deliveries first,
before urban contractors’ deliveries are affected, and addressed
long-term water shortages by enabling the state to
declare a permanent water shortage and reduce all contractors’
water entitlements by their pro rata share of the SWP’s
capacity to deliver water.
• allowed water use only within the geographic terrain of
contractor’s boundary.
• accounted for contractor payment responsibilities
through “entitlements” (an accounting device) and separated
these from actual deliveries of SWP water.6
The “take or pay” clause combined with the SWP’s first
long-term drought from 1987-92 to provoke economic,
political, and ecological crisis in California’s water system
(see “Glimpsing the Future,” this issue). (The next post will be "Glimpsing the Future")
Once the Monterey Agreement came to light through the
California Environmental Quality Act’s full disclosure
process in 1995, its negotiators presented the Agreement as a
done deal that would resolve SWP financial crises and
transform it into a marketing institution. The deal also keeps
intact long-cherished speculative water allocation practices
underwriting urban sprawl throughout California.
“California was one day away from the Monterey
Agreement being a done deal” back in October 1995, says
Rob Shulman of the Plumas County Counsel’s Office in
Quincy. “It was a stroke of foresight” by local Quincy lawyer
Michael Jackson to find out when the agreement would go
into effect. His action bought time for SWP contractor
Plumas County, Citizens Planning Association (CPA) of
Santa Barbara County and the statewide Planning and
Conservation League (PCL) to formulate a lawsuit against
the Monterey Agreement.7
The Agreement’s 14 principles speak to five unspoken
but interlinked objectives:
• greater control by contractors over SWP assets (water
and facilities for storage and transport), including transfer by
DWR of a giant groundwater aquifer called the Kern Fan
Element (KFE) to the Kern County Water Agency8;
• creation of a water transfer market9;
• completion of all SWP facilities originally approved by
California voters in 1960;
• shifting of water facilities costs from contractors to
taxpayers; and
• restructuring how future water shortages are handled,
partly by deleting Article 18(b) of the contracts, which
addressed permanent water shortages in the SWP.
“The Monterey Agreement gives us the tools to reduce
the cost of delivering water to the public,” protests Tim
Quinn, deputy general manager of MWD, who helped
negotiate the original Monterey principles.10
The Appeals Court found that DWR should prepare the
EIR (and not the Central Coast Water Authority [CCWA],
which was not even a SWP contractor at the time!) and
analyze an alternative in which permanent water shortage
aligns SWP water “entitlements” more closely with average
SWP water deliveries. The decision also enables the PCL
coalition to continue a challenge to DWR’s transfer of the
KFE to Kern County interests.
DWR, together with CCWA, appealed to the state
Supreme Court in October. (CCWA is a joint powers entity
created to receive Santa Barbara County’s only-recently
inaugurated SWP water entitlement.)
Lawyers for Metropolitan Water District of Southern
California, Alameda County Water District Zone 7, and the
Kern County Water Agency also intervened with the state
Supreme Court to protect investments in San Joaquin Valley
groundwater storage projects, including the KFE, reliant on
the Monterey Agreement.
While EIR issues are important, the Monterey
Agreement’s bloodless coup against representative democracy
in California water policy should piss off everyone who
cares about the state’s rivers and equitable use of the
California State Water Project. Major corporate agribusiness
and developer constituencies in water entitlement-rich
districts (north and south) profit handsomely from buying
and selling water they don’t own.
Outrages like water marketing mount in today’s go-go
California corporate capitalist culture. Since both the Bay-
Delta Accord and the Monterey Agreement appeared in
1994, water for sale under the Agreement from the San
Joaquin Valley has already been “sold” to new urban
developments like Newhall Ranch and Dougherty Valley.11
Indeed, without a glimmer of irony, some environmental
groups, the U.S. Bureau of Reclamation, DWR, and other
CalFED-affiliated agencies advocate using such water
“entitlements” as assets for an “environmental water account.”
12
Just think: fish will have water bought for them at
taxpayers’ expense, when three generations ago the water was there in the rivers for free. Were the fish economic “free riders” in their own environment all this time?
In other spheres of life, this is known as property theft; in
the water industry, this is called “water marketing.” The new
water industry promotes a con game on the public here, a
water hustle dressed as ecosystem restoration. It’s time to
end this game.
To repeat: by law, water is owned by all the people of
California. That makes California water a common good.
Since water is essential for all life, this is not a communist
notion, but simply common sense for an arid land, written
into state law.13
The Monterey Agreement usurps this common good for
the benefit of elite constituents of water agencies with
financial interests in profiting from selling water made
available by the voters of California when they approved the State Water Project in 1960.
If the California Supreme Court upholds the Appeals
Court decision, DWR will have to prepare a new EIR,
buying time for California’s public to learn more about the
Agreement, to engage in an honest and open debate about the
place of real water allocation — not “paper water,” whose
value as SWP “entitlements” the Appeals Court estimated as
worth “a wish and a prayer” — in California’s future.
Plaintiff attorney Antonio Rossmann hopes that “a
collaboration among DWR, the contractors, other water
agencies, the environmental community, and consumers and
other stakeholders — with professional facilitation and
funding of the public interest participation — could lead to a
true consensus ‘preferred alternative’ on which the [new]
DWR EIR can then be prepared.”14 (And this is how Agenda 21 garbage started entering into the picture. Or when the Public Process was hi-jacked.)
“CalFED II,” anyone? Hopefully such a process could
yield a referendum Californians could vote on, maybe even
pass. What would the “stakeholders” (outsiders and outside interests) have to fear from a
democratic vote if they come up with a plan everyone could
live with? In fact, voter approval might be necessary given
the nonimpairment clause of the Burns-Porter Act.
But if the California Supreme Court reverses the Appellate
decision, the Monterey Agreement will countenance
buying and selling of the California public’s water by water agencies and private corporations that don’t own the water via an institution whose creation has never been tested in a vote by the California electorate, an institution Californians never got to vote on.
I can’t think of a clearer wedding of democracy and
ecology than the idea that water belongs to the people of
California. But under continued implementation of the
Monterey Agreement this idea will be dead in reality, if not
in state law.
The Monterey Agreement also irresponsibly encourages
development pressure on the state’s water supplies, its
farmlands, and its vulnerable aquatic ecosystems. There are
ways to design a “monterey agreement” that might involve
some water policy shifts made by the original framers of the
“Monterey Agreement.” But such changes must involve state
legislators asking California’s voters their approval; the
legislators and DWR work for all Californians, not the other
way around.
To do the most democratic thing — the right thing in this
case — the California Supreme Court must deny hearing to
the defendants of PCL v. DWR and let the Third District
Appellate Court decision stand.
NOTES
1. Planning and Conservation League, Citizens Planning
Association of Santa Barbara County, Inc., and Plumas
County Flood Control and Water Conservation District v.
California Department of Water Resources and Central Coast
Water Authority, Third District Appellate Court, Sacramento,
California, filed 15 September 2000, C024576. Hereafter
cited as PCL v. DWR.
2. Carolee Krieger, Citizens Planning Association of Santa
Barbara County, personal communication, 29 October 2000.
3. Readers should remember that in November 1960,
Proposition 1 (the Burns-Porter Act referendum, now California
Water Code Sections 12930-12944) won by a margin of
just 174,000 votes out of a total electorate of 5.8 million
voters. The margin of victory in Los Angeles County was
313,000, so that county alone put Prop 1 over the top. Prop 1
won only 13 counties (less than one-fourth of the total) in
California: Butte (where Lake Oroville would be built).
4. California Water Code Section 12937 of the Burns-Porter
Act of 1959, approved by referendum of the voters in
November 1960.
5. See DWR News Office, Special Fall 2000 Edition, California
State Water Project: Past, Present, Future, p. 20.
6. State of California, Department of Water Resources,
Contract Between the State of California Department of
Water Resources and the Metropolitan Water District of
Southern California for a Water Supply, November 4, 1960
(as amended to February 1, 1973). Available at California
Water Resources Center Archives, University of California,
Berkeley, and Boalt Hall School of Law Library, at
KFC.790.A87.
7. Rob Shulman, Plumas County Counsel’s Office, personal
communication, 22 November 2000.
8. The Kern Fan Element is part of a larger property, the Kern
Water Bank, owned by DWR. The Kern Fan Element, once
transferred to KCWA, was transferred days later to the newly created
Kern Water Bank Authority which owns and manages
the Kern Fan Element lands. (Kern Water Bank Authority is owned by Steward Resnick. Resnick also had several representatives voting his way in Monterey. Kern County Water Agency, Paramount Farms (The only private entity in the room), then to transfer the KFE the next day into his private control?)
9. Brent Haddad, Rivers of Gold: Designing Markets to
Allocate Water in California, Covelo, CA: Island Press, 2000,
p. 156. Unfortunately, Haddad’s treatise on designing water
markets ignores great swaths of historical, political, and
ecological context in developing his ideas. His soft-pedalingof the Monterey Agreement is perhaps his most egregious
oversight. The issues in PCL v. DWR are absent from the
book. Good books on water marketing don’t exist yet.
10. Tim Quinn, deputy general manager, Metropolitan Water
District of Southern California, personal communication, 17
November 2000.
11. Arve Sjovold,Citizens Planning Association of Santa
Barbara County, personal communication, 10 November 2000.
12. Tim Stroshane, “Reframing CalFED,” SPILLWAY v1n1,
Fall 2000, p. 5.
13. Article 10, Section 5 of the California Constitution also
states: “The use of all water now appropriated, or that may
hereafter be appropriated, for sale, rental, or distribution, is
hereby declared to be a public use, and subject to the
regulation and control of the state, in the manner prescribed
by law.” Following on the state Constitution, California Water
Code Section 102 states in pertinent part: “All water within
the State is the property of the people of the State...
14. Antonio Rossmann, “Third District Court of Appeal Strikes
Down Monterey Amendment EIR, Restores Public Role in
State Water Project,” California Water Law and Policy
Reporter, forthcoming, 2000.
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