Friday, January 17, 2014

Repost - Reliability and Conflict in California Water by Tom Stroshane

Spillway News Winter 2002

Reliability and Conflict in California Water, Part 1Water Under the Bridge?
Reliability and Conflict in
California Water, Part 1
By Tim Stroshane
Water observers of yesteryear—like Henry Holsinger of
the California Water Project Authority and water lawyer
Walter M. Gleason—worried that the Central Valley Project
(CVP), and later the State Water Project (SWP), would cause
legal havoc, even though these big projects were to expand
California’s reliable water supply. They saw, even before
construction of the CVP and SWP, the potential for constitutional,
ecological, and economic controversies, and that
resolving them would be highly political. 
“Water rights are social policy in times of shortage,” says
water lawyer Scott Slater.1 
To understand where California water politics is going, it
helps to step back to explain California water through the
trend of its human institutions. Some might consider this to
be “water under the bridge,” yesterday’s news becoming
today’s fish wrap. So be it. 
Institutions Californians create to govern water allocation,
management, and stewardship define and structure the
state’s water future.2 Two such institutions are the legal
doctrines of riparian and appropriative rights. They historically
shape two central concerns of California water policy:
reliability and conflict. 
Water supply reliability receded as developed supplies
expanded, from the standpoint of water and environmental
law. As supplies expanded and overreached the carrying
capacity of California’s rivers and streams, legal conflict
flourished. Only institutional changes wrought by modern
environmentalism, like the federal Clean Water Act, made
possible the reality that Californians could control their water
institutions and in the process dream of living within their
hydraulic and hydrological means. 
Violent Changes, Utopian Hopes 
Decades before the remarkable spate of environmental
legislation of the 1960s and 1970s, government officials still
needed to know what impacts, consequences, or “critical
paths” of actions would follow from choosing to build
gargantuan water projects. Then, as now, they hired scientists,
economists, engineers, and lawyers to do studies. 
The U.S. Bureau of Reclamation undertook its “Central
Valley Project Studies,” a series of nearly 30 studies dealing
with various technical, legal, economic, financial, and
ecological issues that were posed by the prospect of actually
constructing and operating the Central Valley Project. The
CVP studies were directed by a University of Chicago
geographer named Harlan Barrows. 
In the fall of 1942, A.D. Edmonston, then acting director
of the California Water Project Authority (CWPA), wrote to
Dr. Barrows to recommend two questions that were in all
likelihood crafted by Henry Holsinger, an associate lawyer
with the CWPA: 
“Problem No. 25: Is there necessity for a comprehensive
adjudication of rights to the use of water on streams the
natural regimen of which will be altered by operation of the
[Central Valley Project]? 
“Problem No. 26: If there is need for such comprehensive
adjudication, can the same be accomplished under
existing law, and if not, what enabling legislation is necessary?” 
Through Thanksgiving and early December 1942,
Holsinger fashioned a memorandum arguing the Bureau
should include these two problems in the CVP studies. Even
today, it is a lucid statement of how property rights in water
dictate operations and, indeed, the fundamental design of the
Central Valley Project (CVP).3 
The memo apparently persuaded Barrows in Chicago,
who in turn recommended including the legal problems to
Bureau Commissioner John C. Page in Washington, DC, in
early 1943. 
“Never in the history of the State has there been an
instance where a water conservation project was put in
operation which involved such violent and extensive
changes in the regimen of any stream,” a somber Holsinger
wrote. These changes, he suggested, were to be inserted into
a property regime whose “history is one of continuous
conflict and the resolution thereof,” a history that was hardly
finished.4 
“The enormous expense of litigation over water rights,”
continued Holsinger, “has often been deplored, involving time consuming, expensive and all too frequently fruitless [lawsuits]; fruitless because decrees rendered were piecemeal
and for that reason unenforcible [sic] and because other
interests on the stream, although intimately involved[,] were
not made parties or because of technical defects” in the cases
themselves. 
Holsinger sought to shatter any naive optimism in the
Bureau’s leadership about the CVP’s legal status in California.

“It would be pleasant to anticipate that all such difficulties
are now at an end and that this vast project, notwithstanding
its radical alteration of stream regimen, will be
peaceably accepted by those affected thereby without
controversy, without objection, and without resorting to
litigation. However, attention to realities should convince
any reasonable mind that any such anticipation is utopian
and not reasonably possible of fulfillment.”5 
Riparian Rights 
Such hopes were utopian not only because of human
frailties such as greed. Utopian hopes for the Central Valley
Project to provide ample water supplies to CVP contractors
were likely to founder on conflicts between riparian and
appropriative doctrines coexisting in an arid region, feared
Holsinger. 
In California, tensions between riparian and appropriative
right holders often erupted into litigation, going back to
the early days of statehood. Riparian rights entail the right to
use water as a result of owning property adjacent to a natural
stream or lake. They give the owner a right to reasonable,
beneficial use of water on that property.6 Riparian doctrine
was brought to California when the new state in 1850
adopted English common law for its own legal system. 
Riparian rights establish a clear connection of waters
flowing in a stream to the land adjacent where the riparian
owner may use the water. In effect, they respect and codify
an ecological—as well as economic—relationship between
human use of both water and land. 
Of course riparian rights may also benefit capitalist
production and reproduction (e.g., home life, domestic use).
But these rights are still correlative among all riparian
owners along a stream; each owner has a share of stream.  
The more appropriators on a stream,
the more competition in dry years, and
the less reliable are the more junior rights
to water supply obtained through the
state’s appropriative permit process—
including those of the CVP and SWP.

flows, and each must ensure flows of adequate quantity and
quality to avoid injury to downstream riparians. Riparian
right holders participate in a hydraulic commons 
.
Historically, riparian rights were also associated with land
monopoly.7 The largest whipping boy of early California land
monopoly was Miller and Lux, the great cattle baronage of
central California and the San Joaquin Valley.8 Miller and
Lux was a major cattle and beef marketing corporation
whose empire reached from southern Oregon and northern
Nevada to San Francisco and the northern San Joaquin
Valley.9 Miller and Lux did much to shape California’s water
law and jurisprudence. Its hydro-legacy was achieved largely
through court case precedents—including establishment of
riparian priorities over those of appropriators—but the
corporation also thoroughly remade much of central
California’s land and waterscapes to benefit its beef production
and water sales.10 
“Riparianism pressed to the limits of its logic,” the U.S.
Supreme Court wrote in Gerlach v. United States case in
June 1950, “enabled one to play dog-in-the-manger...[in
which one] could enforce by injunction his bare technical
right to have the natural flow of the stream, even if he was
getting no substantial benefit from it.”11 
In 1928 California voters amended their state constitution
to ensure the criterion of reasonable beneficial use would
govern all water uses (including riparians) in perpetuity,

making “dog-in-the-manger” games with water impossible
today.12 Yet reasonable use also makes water supplies less
reliable and more subject to litigation and political conflict.
After all, what’s reasonable? 
Appropriation’s Elusive Surplus 
In California, the appropriative doctrine is laid atop the
riparian doctrine’s allocations in the state’s watersheds. Land
owners along streams typically have riparian rights. To the extent their rights do not require all the flows of a river or stream, then, California’s hydro-legal minds reason, there is therefore a surplus. 
“All waters in excess of the reasonable and beneficial
needs of lawful users, including riparians, are considered
unappropriated waters and are available for beneficial use,”
write water lawyers Arthur Littleworth and Eric Garner.
Exercise of this logic was pivotal to building California’s
numerous water projects, including the CVP and SWP.13 
Appropriative rights were invented by Gold Rush miners
staking claims for mines on public lands where they could
claim no riparian rights
(since the U.S. Government owned
the land they mined). Appropriative rights involve the right
to divert and use a specific quantity of water for reasonable,
beneficial use in a specific location.
Littleworth and Garner
note that these rights involve a “first-in-time, first-in-right”
principle. The first individual on a stream to divert and use
water beneficially and reasonably has an appropriative right
superior to all those who come after to that stream.14 Only
appropriators have their rights quantified.
Since 1914,
appropriators apply to the State for permits to appropriate
water.15 
Appropriative rights sunder ecological relationships of
water to land. They make it possible to mobilize water
beyond mere watershed or place, to liberate water from
constraints of native gravity by economic and technological
means, and to incorporate it into circuits of modern capitalist
production and urban life. The actual place of use of the
water may in California be hundreds of miles from their
origin in the stream as with the CVP and SWP. 
As water becomes property treated as a set of investment backed
expectations for future income and profit, big public
water projects face the collision of property rights with
ecological reality in times of drought. 
“When the amount of water available is insufficient to
meet the needs of all appropriators, traditional case law holds
that junior appropriators can be prevented from exercising
their rights until the water rights of senior appropriators are
satisfied,
”
write Littleworth and Garner. “However, this rule
seems impractical today, since the cities and water districts
providing urban water supplies generally hold appropriative
rights. Because it is generally unrealistic to terminate such
uses completely, courts can be seen to be moving way from a
strict application of the first-in-time doctrine in order to
protect established uses.”16 
The pecking order of appropriative priorities seems
arbitrary to some when droughts occur—especially when any
of today’s water users get pecked. Littleworth, for one, looks
forward to a time in California when a doctrine of “equitable
apportionment” would supplant water right priorities,
replacing them with a commons of appropriative rights
holders. 
Yet appropriative rights have also been able instruments
of land monopolists like James Ben Ali Haggin, Miller and
Lux’s cattle rival of the 19th Century in Kern County. The
contemporary Kern County Land Company descends from
Haggin’s empire. Clearly, routes to land baronage in California
run through either type of water right. Strategies to
address unequal political and economic power in living
watersheds through equitable apportionment, however, are
not the strong suit of this as-yet emerging doctrine.17 
Through wet years, riparian and appropriative doctrines
co-exist, though uneasily. Right holders know that next year
could bring dry conditions and conflict. The more appropriators
on a stream, the more competition for water in dry years,
and the less reliable are the more junior rights to water
supply obtained through the state’s appropriative permit
process—including those of the CVP and SWP.18 
When the state and federal governments planned the big
water projects, they knew they would have to appropriate
waters then believed to be surplus in the state’s major
watersheds. Henry Holsinger, in his lawyerly way, doubted a
surplus in the Sacramento Valley could be truly known: “If
assumptions are made [about the definition of water rights on
the Sacramento], someone must take the risk of the accuracy
thereof...but in the final analysis, they consist wholely [sic]
and entirely in assumptions 
“Any and all investigations [into quantifying water
rights] are evidentiary merely,” and without any legal force,
he wrote in 1942.19
 
Could we ask Henry Holsinger today, he might offer numbers pulled from the air as of similar legal heft in the CVP’s position on the Sacramento, and of the
SWP on the Feather River. 
Miller and Lux and Monopoly 
In early 1939, the Bureau of Reclamation acquired from
notorious land monopolist Miller and Lux all the nonriparian
water rights—and agreed to store and replace (but
not own) riparian water rights—to the San Joaquin River. 
Miller and Lux’s rights on the San Joaquin River comprised
nearly the entire flow of that river and were jealously
held by several company subsidiaries.20
 
Water covered by the Bureau’s acquisition would be impounded by a new dam
constructed by the Bureau at Friant where the river arrives at
the edge of the San Joaquin Valley floor.
 
Water at Friant Dam would then be diverted via canals north to Madera and south
to Kern and Tulare county farmers on the east side of the
Valley. River channel flows would all but cease below Friant.21 
This action would cut off water to the subsidiaries’ San
Joaquin riparian swamp and grasslands. The solution was for
the Bureau to provide Miller and Lux’s riparian lands with
replacement water stored at Shasta Dam north of Redding,
released into the Sacramento River for eventual diversion in
amounts of water will be available at the point of diversion
on the Sacramento River, is largely dependent upon the will
of the existing users on the approximately 300 mile intervening
course between the point of diversion and the point of
storage” who could challenge CVP operations for failing in
any way to provide Sacramento River users with flows
sufficient to fulfill their water rights.25 
Only a “comprehensive definition” of all water rights up
and down the Sacramento Valley would make CVP deliveries
truly reliable and protect existing water rights holders at
the same time, wrote Holsinger. If the CVP went ahead, he
observed, San Joaquin Valley agricultural development
would expand on the promise of replacement Sacramento
River irrigation water.
Without legal certainties in place, “to
withdraw that water would cause harm in the San Joaquin
Valley and place the United States in a disastrous predicament.” 
Constitutional issues are at stake in promises made by
the Delta via the Delta Cross Channel and exported from the
Delta by pumps installed at Tracy for lift into the Delta-
Mendota Canal (DMC).
 
The DMC would snake its way
through the San Joaquin Valley
to irrigate lands of the “Exchange
Contractors” (as Miller & Lux’s descendant companies
are known today). these big projects to deliver
water for agricultural and urban development. They
involve both reasonable water use and just compensation for
property taken by the government. 
To export water from one watershed to another
creates future expectations based on today’s investments.
To withdraw or reallocate water breaks promises, most
solemnly made.
Yet to justify the appropriations—continuously and perpetually—the uses to which water is put must always and forever be reasonable.
And what is considered “reasonable” can change, a stance in
water policy that is also reasonable to assume. 
While Holsinger focused his memorandum to Barrows on
riparian right holders along the Sacramento, he likely had in
mind “area of origins” reservations set aside in state law in
the early 1930s as well.
26
 
These laws reserve water in source
areas (for example, rural counties with ample water resources)
for their future needs to prevent “Owens Valley”
scenarios from recurring. They place a theoretical limit on
how much and for how long the CVP and SWP—and even
other major water projects—will be able to take water and
move it far from its origins. 
The point of this is not that comprehensive definition or quantification of water rights should have occurred or should now occur. Rather, Holsinger foresaw that huge capital
investments made for the CVP could be derailed or undermined
by a water right holder insisting on a quantity that
would legally impair the CVP’s contractual delivery commitments,
and usher in perhaps a balkanizing spiral of litigation,
undermining the very investment California and the U.S.
government made to increase the state’s water supply
reliability. His analysis highlights the potential for compensable
property takings by the government should water be
withdrawn. 
In March 1943, Bureau Commissioner John Page
declined to include proposed Problems 25 and 26 in the CVP
studies in a terse message to the new WPA director Edward
Hyatt, despite Barrows’ and Edmonston’s earlier recommendations.
27 
Water Rights and Predatory Government 
In the 1950s, water lawyer Walter Gleason, whose career
in California water law began in the early 1920s and would
last nearly seven decades, saw dangers of unchecked
appropriative rights for the Central Valley and the areas of
origins. 
Gleason saw unquantified riparian rights as exceptionally
vulnerable to ostensibly junior appropriative right holders
moving in for what news media colorfully refer to as a
“water grab.”
Appropriators moving into a watershed
challenge riparians on the grounds that their water usage may
take on or interfere with any water or water rights in Northern
California [is] concerned,” Gleason wrote. But passage
of the 1960 water bond would place the state of California in
position to challenge water users for reasonableness on
behalf of State water contractors (of which the Metropolitan
Water District is the largest). 
With southern California’s insertion into the Central
Valley watersheds of the Sacramento-San Joaquin River
Delta, Gleason maintained that no vested rights in northern
California (which he defined as waters north of the
Tehachapis) are safe from predation by the state running
interference for southern California.
29 
“In the absence of comprehensive adjudication,” wrote
Gleason, “there will be no effective and readily ascertainable
demarcation (i.e., ‘boundary line’) between ‘surplus’ (on the
one side) and ‘non-surplus’ on the other. In the absence of
such an obligatory definition of these two correlatives, there
be unreasonable, or that an unreasonable amount may be
diverted. Protracted litigation then ensued in which an existing
user’s “water duty” had to be established and his or her water
right effectively quantified. 
Gleason believed that the new State Water Project (SWP) would
create opportunities for litigious water grabs on an unprecedented
scale aimed at the north.
. Southern California’s cities would seek
northern California’s “surplus waters” (which Gleason considered
everything above the Tehachapis) in litigious invasion
for water, with assistance from the state of California. 
“Water right-wise [sic],” Gleason wrote on the eve of the
November 1960 election that saw John Kennedy elected
President and the State Water Project bonds narrowly
approved by California voters, “the end result of this new
Water Plan will be exactly the same as if all of Southern
California were to be physically uprooted and set down at
Tracy (i.e., next to Delta).
In short, the length of the aqueduct
between the Tracy Pumping Plant [at the north end of the
California Aqueduct] is immaterial since the South will...be
sitting next to the Delta with a right to receive water out of
the Delta (through its ‘water contract’ with the State). 
“A direct consequence of this new ‘hydrology’,” he
continued, “is that for the first time in history the South will
become directly and legally interested in the water resources
of the Central Valley and the water rights (existing and
prospective) in connection therewith.”28 California’s regions
would be bound together as never before, and Gleason
worried that technological prowess would outrun legal
insight into the new system. 
Prior to the State Water Project, Southern California
“might as well be in Mexico insofar as any present ability to
Governor Edmund G. “Pat” Brown on the stump for
the State Water Project in Santa Clara County.
can be no effective (i.e., automatic) controls to delimit this
‘export’ of water [from the North to the South]. When this ‘hard
reality’ is coupled with the indisputable fact that it will be
directly to the mutual interest of both the State and the South to
maintain this ‘export flow to the South’ as continuously and on as
large a scale as possible,
the inevitability of direct and serious
conflict between these vested water rights of the North and these
‘export allocations’ is, I believe, patent.”
30 
With the State Water Project (SWP), the state of California
became a water developer as well as a water regulator.
The state and federal projects appropriated the two largest blocs of allegedly surplus waters in
California.31 
In its quest to bring reliability to California’s future water
supply, the state’s conflict of interest would limit its capacity
to protect Californians and their watersheds from what
Manteca-area farmer and south Delta water official Alex
Hildebrand refers to as “the predatory nature of government.
”
32
The Quality of Delta Water 
Water lawyers, like most of us, do not make good
soothsayers. Not only do events conspire to drive history
from its ruts, but human institutions also undergo radical
shifts in social, economic, and even ecological priorities. The
rise of environmentalism in the 1960s punctuated the
prerogatives of appropriative water rights as a property
institution. 
Once the big projects were completed, neither a bareknuckled
southern California appropriative water grab of the kind envisioned by Walter Gleason, nor a paralyzing avalanche of Sacramento Valley riparian “dog-in-the-manger”
litigation feared by Henry Holsinger occurred. 
But by the 1970s, salinization of Delta freshwater
channels—a common pool from which Delta riparian land
owners draw their irrigation water
—made clear that storage
and diversions of the big projects exceeded the waters
available from Central Valley watersheds. Flows left in Delta
streams were too low to push back the tidal salt waters of
San Francisco Bay, harming Delta farmers holding riparian
water rights. 
The struggle over Delta water quality began in the 1920s
when rice growers began diverting irrigation water from the
Sacramento River during dry years. But as historians W.
Turrentine Jackson and Alan Paterson correctly observed in
necessary only to protect water rights in the Delta against
impairment by the big projects. But Racanelli corrected the
Board, saying that the Clean Water Act requires that “beneficial
uses” are what need protection from water quality
regulations, not water rights. 
The Board’s second error lay in assuming that only the
state and federal projects were accountable for rectifying
water quality problems in the Delta.
As a result, “the Board
erroneously based its water quality objectives upon the
unjustified premise that upstream users retained unlimited
access to upstream waters while the projects and Delta
parties were entitled only to share the remaining water
flows.
”35 
Judge Racanelli echoed Holsinger and Gleason’s observations
that a comprehensive adjudication of Sacramento
Valley water rights, however desirable, was not practical.36 
But the genius of Racanelli’s opinion lay in his insistence
that “the trial court’s basic premise—that water quality
protection hinges on ownership of water rights—is
faulty....[T]he Board’s authority in setting water quality
standards is not limited to the protection of water rights, but
extends to the protection of all beneficial uses from degradation
of water quality, even if the resulting water quality
exceeds that provided by water rights,” he wrote.37 
In other words, the goal of water quality standards is to
protect the use value of water, not water’s exchange value as
a property right, commodity, and income source. 
State Board Horror 
State and federal water contractors (those entities
contracting for water service from the CVP and SWP in the
San Joaquin Valley and in Southern California) argued also
that the Board failed to protect the contractors’ rights to use
Delta water for a dependable water supply, claiming to do
otherwise was a compensable property taking under Article 5
of the U.S. Constitution and an impairment of their contract
rights. 
Racanelli affirmed the trial court’s opinion that no
property taking had occurred because “the federal contractors
have no water rights of their own but are subject to the
limitations of the permits held by the CVP,” which are
appropriative water rights, subject to the Board’s reserved
jurisdiction, permit terms, and the state constitution’s
prohibitions on unreasonable water use.
38
 
Moreover, the contracts themselves limit both state and federal projects’
liability for deliveries during droughts. “Logically,” wrote
Racanelli, “neither the project nor the contractors could have
any reasonable expectation of certainty that the agreed
quantity of water will be delivered.”
39 
Judge Racanelli tacitly acknowledged what only environmentalists
knew to be true at the time, that Central Valley
rivers were over-appropriated by the CVP and SWP; water
exports dreamed of in the 1957 California Water Plan could
never be realized. The big projects starved important
fisheries and Delta agriculture of fresh water to which both
were entitled. 
The Racanelli decision (sometimes called the Delta Water Cases) ultimately became the intellectual prism through which appropriative, riparian, and instream water uses are now viewed, as well as the legal foundation on which the
CalFED Bay-Delta Program edifice has been erected so,
well, unreliably. 
Part 2 to come: Bay-Delta Hearings, the 1995 WQCP,
and the river agreements. 
NOTES 
1. Scott Slater, attorney with Hatch & Parent, Santa Barbara,
from public comments at “Water Rights, Water Wrongs:
Learning from the Past, Looking to the Future,” conference
sponsored by the San Francisco Estuary Institute, Oakland,
CA, 2 November 1999.
 
2. My guiding light for this approach is economic historian
Karl Polanyi, author of The Great Transformation: The
Political and Economic Origins of Our Time, Boston, MA:
Beacon Press, 1944, 1957, p. 4.
 
3. Holsinger would go on to become chief legal counsel of
the California Division of Water Rights in the late 1940s and
1950s, a predecessor agency of the State Water Resources
Control Board.
 
4. Henry Holsinger, “Necessity for Comprehensive Adjudication
of Water Rights on the Sacramento and San Joaquin
Rivers in Aid of the Central Valley Project,” memorandum
manuscript dated 10 December 1942, p. 2. Hereafter,
Holsinger, “Necessity.”
 
5. “Necessity,” ibid. 
6. Arthur Littleworth and Eric Garner, California Water, Point
Arena, CA: Solano Press Books, 1995, p. 29. Of riparian
water rights they add, “A riparian right is not gained by use,
nor generally lost by disuse, but is part and parcel of the
land.” Ibid.
 
7. See M. Catherine Miller, Flooding the Courtroom: Law and
Water in the Far West, Lincoln, NE: University of Nebraska
Press, 1993; and David Igler, Industrial Cowboys: Miller and
Lux and the Transformation of the Far West, 1850 to 1920,
Berkeley, CA: University of California Press, 2001.
 
8. According to Igler, ibid., Miller and Lux ranches encompassed
over half a million acres of land in four major areas of
California: the Kern River delta northwest of Bakersfield (near
rival Haggin’s cattle ranches), lands along the San Joaquin
River from Mendota almost to the Stanislaus County line,
major holdings around Gilroy, and Lux’s Buri Buri ranch at the
north end of the San Francisco Peninsula.
 
9. California Department of Public Works, Feasibility of
Acquiring the Central Valley Project, March 1952, pp. 57-60
. 
10. For that history, see M. Catherine Miller, Flooding the
Courtrooms, op. cit., note 8 above. Miller and Lux achieved
this status through its vast ranches’ fencing enclosures
(contributing greatly to populist sentiment in early California),
industrialization of cattle raising, racial segmentation of
industrial labor markets, marshaling of capital to finance and
construct a complex latticework of canals diverting the waters
of the San Joaquin and Kern rivers onto its swamp and
grasslands. See Igler, op. cit., note 9 above.
 
11. Gerlach et al v. United States, June 1950, manuscript
from Harry Barnes’ files at the Water Resources Center
Archive, University of California, Berkeley, Barnes file number
179-2, p. 17. Also cited as 76 F.Supp. 87.
 
12. California Constitution, Article X, Section 2. 
13. Littleworth and Garner, op. cit., note 6, p. 39. “Water that
is diverted pursuant to an appropriative right may be used on
or in connection with lands away from streams or outside a
watershed, as well as on lands contiguous to streams.
However, this use may be governed by other provisions such
as area-of-origin limitations and the needs of fish and wildlife,
which are now beneficial uses.” Most hydro-legal thinkers in
the 1940s and 1950s, however, had a blind spot for the
needs of fish and wildlife, their implicit grasp of reasonable
and beneficial uses not extending to all of God’s creations,
but only those most useful in capitalist production and urban
development.
 
14. Ibid. Under prior appropriation, water in a stream is not
treated like a commons, as it is under riparian doctrine.
 
15. CVP and SWP water contractors, however, possess
neither riparian nor appropriative rights; they possess
contracts for water service from the big projects, both of
which are the state’s largest water appropriators.
 
16. Littleworth and Garner, op. cit., note 6, p. 39. 
17. Arthur Littleworth, “The Common Law of the Future,”
public remarks at “Water Rights, Water Wrongs,” Oakland,
CA, 2 November 1999. Equitable apportionment was dealt a
severe blow by the California Supreme Court in City of
Barstow v. Mojave Water Agency, California Supreme Court,
S071728. See also “Don’t Tread on Mojave,” SPILLWAY
v1n1, Fall 2000, pp. 2-3.
 
18. The permit system has been in effect since 1914.
Holders of rights that predate the permit system are referred
to as “pre-1914” rights and have priority over rights holders
with post-1914 appropriative permits.
 
19. Holsinger, “Necessity,” op. cit., note 4, p. 16. 
20. Their modern-day descendants include the Columbia
Canal Company, the Firebaugh Canal Company, San Luis
Water District, and Gravelly Ford Canal Company.
 
21. Completion and operation of Friant Dam would ultimately
kill off the spring run chinook salmon of the San Joaquin
River by the mid-1950s, despite meager efforts by committed
fish and game biologists to save this variety of salmon. See
George Warner, “Remember the San Joaquin,” in Alan Lufkin,
ed., California’s Salmon and Steelhead: The Struggle to
Restore an Imperiled Resource, Berkeley, CA: University of
California Press, 1991, pp. 61-69.
 
22. Holsinger, “Necessity,” op. cit., note 4, p. 5. 
23. Ibid., p. 5, 15. 24. 
24. California Department of Public Works, op. cit., note 9,
Appendix G, pp. 221-239. See Article 12(a) of the Purchase
Agreement and Article 7 of the Exchange Agreement between
Miller and Lux, Inc., and the United States Bureau of
Reclamation, July 1939. If replacement water the Bureau
provided the Exchange Contractors via the Delta-Mendota
Canal fell to less than 72 percent of what their entitlement,
then the Exchange Agreement requires the Bureau to make
up the deficiency (back up to 72 percent of the Purchase
Agreement delivery schedule) by releasing water from Friant
Dam for use by the Exchange Contractors. The Contractors
protect this exchange right by having retained their riparian
rights as allowed under the Purchase Agreement.
 
25. Holsinger, “Necessity,” op. cit., note 4, p. 8. 
26. California Water Code Section 10505 and Sections
11460-11463.
 
27. Letter of John C. Page, Commissioner of U.S. Bureau of
Reclamation, to Edward S. Hyatt, Directory of the California
Water Project Authority, 10 March 1943.
 
28. California Senate Interim Committee on Water Projects,
Senator Stephen P. Teale, Chairman, Opinion of Attorney
Walter M. Gleason Regarding Various Legal Aspects of
Burns-Porter Act (SB 1106) (Proposition One), October 28,
1960, p. 15.
 
29. From this perspective, the CalFED “Framework for
Decision” proposal for a “water quality exchange” by the
Metropolitan Water District of Southern California and the
Friant Water Users Authority (on the San Joaquin River) both
is hardly surprising, and takes on new meaning. More than
merely pragmatic and practical, proposed CalFED water
quality exchanges effectively reverse water right priorities
without acts by the state Legislature or decisions by state
courts or the State Water Resources Control Board. In that
sense, CalFED’s plans are beyond politics, beyond law. See
CalFED Bay-Delta Program, “Framework for Action,” June 9,
2000; and Tim Stroshane, “Reframing CalFED,” SPILLWAY

30. Gleason, op. cit., note 28, p. 21. 
31. State Water Resources Control Board, Final Environmental
Impact Report for Implementation of the 1995 Bay/
Delta Water Quality Control Plan, Volume 1, November 1999,
p. III-5, and Table III-5, p. III-24. 
32. Alex Hildebrand, personal communication, Manteca,
California, 10 December 1999. 
33. W. Turrentine Jackson and Alan Paterson, The Sacramento-
San Joaquin River Delta: The Evolution and Implementation
of Water Policy, An Historical Perspective, California
Water Resources Center, University of California, Davis,
Contribution No. 163, June 1977, p. 102. 
34. The Racanelli decision, United States of America et al v.
State Water Resources Control Board, 182 Cal. App. 3d 82;
227 Cal.Rptr.161 (Cal.App.1 Dist. 1986), was appealed to the
California Supreme Court, which refused to review the case
on September 18, 1986, thereby letting the appellate court
decision stand. The eight plaintiffs were: the Central Valley
East Side Project Irrigation Association (a precursor to the
Friant Water Users Authority), Kern County Water Agency,
South Delta Water Agency, San Joaquin County Flood
Control and Water Conservation District, the Contra Costa
County Water Agency, the United States Bureau of Reclamation,
and two Antioch-area private corporations, Fibreboard
and Crown Zellerbach. All page citations are to 182
Cal.App.3d 82 and following pagination. 
35. Ibid., p. 118. 
36. Racanelli merely noted it would be “too cumbersome and
impractical to accomplish the mandated periodic revisions of
water quality control plans” since reallocating water rights is
the only enforcement mechanism available to the Board for
administering its water quality standards and protecting
beneficial uses under the Clean Water Act. Ibid., 119. 
37. Ibid., p. 140, 141. 
38. See also Tim Stroshane, “A History of the Monterey
Agreement: Glimpsing the Future,” SPILLWAY v1n2, Winter
2000, p. 4. 
39. Racanelli decision, op. cit., note 34, p. 147.

Repost - Glimpsing California's Future by Tom Stroshane

Spillway News, Winter 2000.
California glimpsed an apocalyptic water future in the
long drought of 1987-92.
To understand what that horror show meant in 1994 when
the Monterey Agreement was negotiated surreptitiously by
DWR and a small group of State Water Project (SWP)
contractors, we must look to the past, to why things played
out as they did in events leading to 1994.
But first, a digression on economics.
SWP contractors do not pay for water. Instead, they repay
costs of building and operating facilities for collecting,
storing, and distributing water, and those facilities by law
must be paid for regardless of whether contractors receive
water in any given year.
An economic analogy for what was set up with SWP
beneficiaries goes like this: Suppose you take out a mortgage
to buy a home with three bedrooms and two bathrooms.
Then it turns out you don’t have enough people in your
family to keep the second bathroom and the third bedroom in
regular use. You have to pay the mortgage back monthly
regardless of whether you use the whole house or not.
Do you think your mortgage lender would sympathize or
offer to adjust your mortgage based on your actual use of the
house? No lender would, rest assured.
The contractors struck the same kind of deal with the
state of California in 1959 when the Burns-Porter Act was
passed, and which the voters approved in 1960: contractors
agreed to pay for the project knowing there could be years
when they might not get the water they wanted.
SWP contractors use a convenient fiction of “entitlements”
to water as though they were a legal claim on the
state to provide them with water. That fiction enables them
(and indeed, some environmentalists) to speak of “buying”
or “selling” water. But this conceptual sleight-of-hand hides
the fact that “entitlements” are not legal rights to SWP water
but merely an accounting device by which the facilities cost
of water is allocated to different contractors based on the
proportion of the facilities used to deliver water to each
contractor.
Overdrafting Groundwater
In the 1950s, San Joaquin Valley agricultural and
southern California urban interests pumped out far more
groundwater than they recharged into their aquifers.
“Continued reliance upon the ground water overdraft
would eventually exhaust the water supply and kill the
economy of the area, thus establishing the need for supplemental
water,” writes southern California water lawyer
Arthur G. Kidman. “Without ground water overdraft,
California’s development and prosperity probably would not
exist as we know it today.”1
Indeed, groundwater overdraft was used to justify
planning and building the State Water Project (SWP) in the
1950s. SWP water was intended by state leaders like
Governor Pat Brown to secure the state’s water future and
take pressure off overdrafted aquifers in the San Joaquin
Valley and south of the Tehachapis in urban southern
California.
But it didn’t happen that way. New water facilities were
relatively cheap at first, and the water they deliver is easy to
bring to new lands for cultivating crops or subdivisions.2
Once the SWP began delivering water in the late 1960s and
early 1970s, the groundwater overdraft continued (as it does
to this day), combined with land speculation in new crops
and sprawling housing developments.
 In the planning stage, SWP water was still expected to
cost more than water provided through the federal CentralValley Project (CVP). Agricultural San Joaquin Valley contractors, led by the Kern County Water Agency (KCWA), openly worried about this high cost, insisting on and gettinglocal tax-base subsidies for water and no acreage limitations on farmers receiving SWP deliveries.
In addition, the long-term contracts make available
“surplus water” not requested by other contractors at just the
cost of transportation charges. San Joaquin Valley contractors,
especially KCWA, were historically the largest users of
this subsidized “surplus water.”3
Surplus water, however, was last available in the SWP
system in 1987, the first year of the last drought. Resulting
from the 1987-92 drought and a changed political culture,
environmental decisions have further limited water exports
from the Delta systems (both CVP and SWP). Coupled with
changes brought about by the federal Reclamation Reform
(1982) and Central Valley Project Improvement acts (1992),
the era of cheap facilities for delivering seemingly unlimited
quantities of water in California ended.4
The 1987-92 drought — the longest in California since
the Great Depression — brought the economics of costly
SWP water to a crisis point for its two largest contractors,
KCWA and the Metropolitan Water District of Southern
California (MWD).
In the SWP’s early years, the average facilities cost of
delivered SWP water was low, around $25 per delivered
acre-foot to San Joaquin Valley contractors like KCWA. (In
comparison, the contract cost of delivered water from CVP
facilities was $8.) Then the facilities cost of delivered SWP
water nearly doubled in the early 1980s when DWR signed
new electricity contracts.
But in 1991, the worst year of the last drought, San
Joaquin Valley contractors received just 45,556 acre-feet at
an average facilities cost of $1,041 per acre-foot that year.5
MWD faced a similar but less extreme financial visegrip.
Where MWD’s cost per delivered acre-foot had been
$170 in 1982, it more than tripled to $548 in 1991 when
MWD received just 19.5 percent of its 2 million acre-feet
entitlement.6
Permanent Shortage Scenarios
Though SWP contractors were never promised any
specific amount of water, permanent water shortages in
California seemed both plausible and horrifying to water
watchers (though water officials later denied this to the PCL
v. DWR courts7).
In late 1993, DWR received requests from SWP contractors
for water deliveries totaling 3.8 million acre-feet, far
more water than the SWP had ever delivered before.
The
department “felt the requests were unrealistic,” reported
public policy analyst Dennis O’Connor of the California
Research Bureau at the time. “In response, they claimed
authority under the contract to modify the initial requests.”
DWR then reduced the requests to the largest amount from
each contractor delivered in the previous 10 years, establishing
a modified initial request for 1994 deliveries of 1.56
million acre-feet, less than half of the contractors’ original
request.
At its December 1993 meeting, MWD’s board of
directors deferred approving their annual payment of $413.8
million to DWR, delaying its $67 million January payment,
in hopes that its water bill strike would get DWR’s attention.8
The California Research Bureau also reported that
delinquencies in Kern County’s SWP payments were a
significant problem during and after the drought. Worse,
since SWP deliveries were near zero in 1991, “the banks
have been reluctant to lend money [to fund farmers’ annual
credit needs there]. Their reasoning is that the farmers no
longer have a reliable water supply, and so the land has
virtually no value.”9
The worst case scenario for Kern County was that SWP
contracts require KCWA to guarantee payment to DWR by
levying a district-wide property tax sufficient to cover the
bill. “Since farm land that doesn’t have a dependable water
supply is essentially worthless, the tax burden would
ultimately be carried by the City of Bakersfield,” observed
O’Connor at the time.10
The California Research Bureau also pointed out an
Armageddon scenario: “If environmental protection in the
delta requires additional SWP delivery cutbacks in the 1/2
million to 1 million acre-foot range, a distinct possibility,
there is a potential for widespread default among agricultural
users.”11
While probably exaggerated, let’s return to our mortgage
metaphor: They had trouble making the mortgage on SWP
facilities. San Joaquin Valley interests clearly overextended
themselves when they expanded cropped acreage in reliance
on an at-best uncertain imported water supply rather than
using the water to stem groundwater overdraft.
The SWP, which many of its critics also regarded as “a
tremendous asset to the state,” must have increasingly
resembled a hydraulic Ponzi scheme verging on collapse as
the events of 1994 crashed down.12
On one hand, the industry faced extended drought in
which seven of the previous eight years (counting 1994)
were considered critically dry (1993 being a wet year
exception).13 (In retrospect, maybe not such a bad idea...would have kicked the Feds out of the state.)
On the other hand, in the midst of drought DWR planned
the SWP to expand. Voters in Santa Barbara and San Luis
Obispo County approved hooking their counties up to the
SWP. Other areas, such as Butte County in the northern
Sacramento Valley, were considering taking delivery of SWP
water as well. San Joaquin Valley contractors were also
urging then-governor Pete Wilson to have the State of
California buy the giant Central Valley Project from the
federal government.
Before such a thing as the CalFED record of decision
(adopted this past September), not only was there little
prospect of adding new reservoirs to the State Water Project
or the Central Valley Project, but new water quality regulations
and key biological opinions under state and federal
endangered species acts promised to release more stored
water for ecological uses, which would reduce yields of both
the CVP and SWP from the Sacramento-San Joaquin River
Delta.
Dry weather, low runoff, and depleted reservoir storage
in 1994 only added to the pressure to restructure the SWP
and somehow resolve the crisis. No wonder California’s febrile water wars were white hot in 1994.
That year was also marked by an overheated — and
bipartisan — ideological drumbeat for privatization of
government facilities (including water delivery facilities)
blared widely in public discourse to herald a new age of
economic “efficiency” through private sector “discipline”
and unleashing an enrichez-vous ethic. Then-governor
Wilson was its staunchest apostle at the time.
In such a climate, DWR officials were placed on the
defensive by the financial vise-grip of SWP payments on
contractors. They offered little resistance under Wilson to
contractors’ claims to “entitlements,” and refused to view
litigation as a serious option in such a situation.
O’Connor reported that defaults could force the SWP into
financial crisis and jeopardize its AA bond ratings with Wall
Street, forcing taxpayers to bail out the system with infusions
from the state budget so that the water system’s bond
payments were honored.14
To SWP contractors, cloudy SWP water supplies raised
the specter of obscenely high water costs and meager
deliveries, since their SWP contract payments would stay the
same whether DWR delivered water or not.
As urban development creeps northward from Los
Angeles to Tejon Ranch in the Tehachapis, it is also plausible
that twin prospects of permanent water shortages and
substantial public debt in the SWP clouded the dreams of
San Joaquin Valley land owners and water agencies for
converting their lands to urban uses and to be the water
source for Valley cities of the future.
Article 18
As 1994’s crises wore on, DWR’s handling of short-term
drought water allocations and the specter of DWR declaring
a permanent water shortage in California led to furious
disputes between SWP contractors and DWR.
DWR was empowered to act during drought conditions
under the SWP contracts’ Article 18. Two of Article 18’s
provisions address the short and long-term effects of
drought, and how DWR is to allocate water to contractors in
such situations.
Under Article 18(a), in years when water is temporarily
short, DWR was to cut agricultural contractors’ deliveries
first by up to 50 percent, before cuts were required of urban
contractors. Contractors disputed DWR’s implementation of
Article 18(a) during the 1987-92, according to O’Connor,
when DWR based reductions on contractor requests rather
than on entitlements as Article 18(a) specifies. Requests are
typically lower than entitlements, so contractors got less
water than allowed under Article 18(a) than in these dry
years.15
Article 18(b) enables DWR to recognize a long-term
shortage of water and, according to O’Connor, with five
years’ notice to all contractors, recalculate a reduced delivery
capacity (the project yield) for the SWP, and reduce each
contractor’s pro rata share of entitlements under the new
yield. (Keep in mind: legally speaking, entitlements are
really an accounting device.)
In this charged setting, “we did do the Monterey Agreement
behind closed doors,” Tim Quinn, deputy general
manager of MWD, admits.
But, he claims, the agreement’s
principles “only affected who paid and who got water among
the SWP contractors.”16 If it was only that simple (see
“Bloodless Coup,” this issue).
Redefining SWP Supplies
Though the Monterey Agreement was negotiated in
secret, as the Third Appeals Court decision in PCL v. DWR
bluntly states, the issues leading to the Agreement were
aired.17 In January 1994, 11 months before the Agreement
was concluded, the California Senate Committee on Agriculture
and Water Resources held a hearing on SWP financing.
At the hearings, SWP contractors and other interest groups
vented to legislators about the SWP’s repayment system.
“The source of this dissatisfaction varied,” wrote CRB’s
Dennis O’Connor at the time. “For some, it was how the
Department of Water Resources allocated water during
periods of water shortages. For others, it was the ‘take-orpay’
aspects of the contracts. Still others expressed concern
about the perceived misallocation of one of the State’s most
valuable resources.”18
SWP critics felt the project “may never reliably deliver
the official project yield” of 4.2 million acre-feet. SWP
average costs were far higher than promised in the 1960s and
varied wildly from year to year. Critics considered the “takeor-
pay” financing arrangements economically inefficient and
unfair.19
O’Connor laid out 20 “options for change” to the State
Legislature addressing at least one of the issues SWP critics
posed: changing short-term shortage provisions, permanently
reducing the official project yield, setting a fixed price for
water, promoting economic efficiency, reallocating environmental
costs, changing SWP administration (including
contracting out or privatizing SWP operations, proposals
then in vogue for “reinventing” government functions
leading up to the Republican Party’s “Contract With
America”), and changing technical features of the long-term
water supply contracts.
O’Connor’s report could have been a starting point for an
Article 18(b) alternative analysis in the now-defective
Monterey Agreement EIR. Published in August 1994, months before completion of the Agreement itself, O’Connor
says there were short-term equity problems with reduced
entitlement deliveries implementing Article 18(b), but he
saw that executing 18(b) would reduce the occurrence of
long-term shortages, increase the availability of surplus
water, and stabilize the cost per acre-foot of water.20
By invoking a permanent water shortage, the state could
redefine the SWP supplies so they could be operated more
reliably. But contractors would have to reduce their exposure
to drought by diversifying their water sources. In 1994, they
weren’t so ready to do that.
The Agreement’s framers and their EIR consultants
ignored O’Connor’s 18(b) explorations.
In the end, options that appealed to Monterey Agreement
framers included buying and selling entitlements, using
capital reserve funds to restructure SWP financing, and
eliminating the agriculture-first contract provisions concerning
drought.
The framers retained the SWP’s project yield of 4.2
million acre-feet (an acre-foot is about 326,000 gallons of
water). Now Monterey Agreement “paper water” entitlements
are marketed to new sprawling developments like
Newhall Ranch in Los Angeles County and Dougherty
Valley in Contra Costa County. The Monterey Agreement
thus propels construction of CalFED reservoirs and peripheral
canals closer to reality as California’s population
grows.21
The framers not only avoided choosing to invoke
Article 18(b), Principle 2b of the Agreement deletes it.
“Some contractors claim that if Article 18(b) is reinserted
and the Kern Fan Element transfer is invalidated, the signers
of the Monterey Agreement will not sign a revised Agreement.
But no one knows for sure,” says Plumas County
Counsel attorney Rob Shulman.22 Plumas County is a
plaintiff in the Appeals Court case that has stalled Monterey
Agreement implementation.
“It’s nuts to return the Kern Water Bank to the state,”
says MWD’s Quinn, himself a Monterey Agreement negotiator.
“If we lose, we’ll go back to the Legislature to fix the
problem.”23
“I think the Legislature is actually where this matter
belongs,” counters Antonio Rossmann, attorney for the
plaintiffs.24
NOTES
1. Arthur G. Kidman, “‘Connections’ Between Ground Water
and Surface Water," in Making the Connections: Proceedings
of the Twentieth Biennial Conference on Ground Water,
edited by Johannes J. DeVries and Jeff Woled, September
11-15, 1995, California Water Resources Center Report No.
88, p. 10. Overdraft in the Los Angeles region (where
groundwater was overdrafted for municipal and industrial
uses) was the justification for importing water supplies from
the north in the 1950s. See William Blomstedt, Dividing the
Waters: Governing Groundwater in Southern California, San
Francisco, CA: Institute for Contemporary Studies Press,
1992, p. 104.
2. Robert Gottlieb and Margaret FitzSimmons, Thirst for
Growth: Water Agencies as Hidden Government in California,
Tucson, AZ: University of Arizona Press, 1991, Chapters 3
through 5.
3. Michael Storper and Richard Walker, The Price of Water:
Surplus and Subsidy in the California State Water Project,
Berkeley, CA: Institute of Governmental Studies, University of
California, 1984.
4. Gottlieb and FitzSimmons, op. cit., note 2, discuss “the end
of cheap water.” But this confuses the issue, since it is really
water facilities that contractors pay for. Water is not for sale in
this system.
5. This average price of water is spread across six separate
SWP contractors in the San Joaquin Valley: Dudley Ridge
Water District, Empire West Side Irrigation District, Kern
County Water Agency, Kings County, Oak Flat Water District,
and Tulare Lake Basin Water Storage District. The bulk of
water received by these contractors was for municipal and
industrial customers served by KCWA. Kings County was the
only contractor to receive no agricultural water that year. Cost
per delivered acre-foot data calculated from California
Department of Water Resources, Bulletin 132-95: Management
of the California State Water Project, November 1996,
Table 5B (Annual Water Quantities Delivered to Each
Contractor) and Table 23 (Total Transportation and Delta
Water Charge for Each Contractor).
See also Dennis O'Connor, Financing the State Water
Project, Sacramento, CA: California Research Bureau, June
1994, pp. 63-65. See especially Figure 5.H, which bears out
O'Connor's remark about average SWP water prices heading
skyward.
6. Bulletin 132-95, ibid.
7. "There is then no question that the SWP cannot deliver all
the water to which contractors are entitled under the original
[long-term SWP water supply] contracts. It does not appear
that SWP has ever had that ability. Nor do defendants
suggest that full delivery of entitlement water is likely within
the life of the contracts. Nevertheless, defendants [DWR and
Central Coast Water Authority] dispute that a long-term
shortage exists. Defendants argue that requests [for water
deliveries] are the proper measure of shortage. They emphasize
that the SWP had been able to meet contractors' actual
requests for water every year except 1994, suggesting there
is no water shortage, let alone a permanent shortage." See
PCL v. DWR, pp. 28-29.
8. O'Connor, op.cit., note 5, June 1994, p. 53; California
Research Bureau, CRB Note, v2,n3, 15 June 1994, p. 3.
9. CRB Note, ibid., p. 4.
10. Ibid.
11. Ibid.
12. "...a tremendous asset to the state" quote from O'Connor,
Financing the State Water Project: Options for Change,
Sacramento, CA: California Research Bureau, August 1994,
p. 58. Hereafter cited as Options for Change. O'Connor's
reports are available free of charge by calling the California
Research Bureau at 916/653-7843.
13. This five-year streak, incidentally, is previously unknown
in DWR's records of unimpaired runoff in the Sacramento
River basin. Prior to the four-year streak of wet years ending
in 1998 in the San Joaquin River Basin's runoff record, the
last four-year streak of wet years was from 1914 through
1917. See California Department of Water Resources,
Preparing for California's Next Drought: Changes Since 1987-
92, Sacramento, CA, July 2000, Figures 4 and 5, p. 5. Glimpsing the Future

14. Three law review articles were published simultaneously
in Fall 1994 through the Hastings College of the Law Public
Law Research Institute addressing legal aspects of nightmare
scenarios: Peter Lee, "Modifying State Water Contracts:
Constitutional Takings Issues"; Michael Kometani, "The
California Water Resources Bond Act: Bondholder Security
and the Contract Clause"; and David M. Call, "Legislative
Impairment of Contracts Between the State Water Project
and Its Contractors" Public Law Research Report, Fall 1994.
These articles can be found at the Hastings College of the
Law web site at http://www.uchastings.edu/plri/fall94/.
15. According to DWR data, the average annual deliveries of
the State Water Project between 1967 and 1994 was 2.6
million acre-feet of water. Bulletin 132-95, op. cit., p. 133,
calculated from Table 10-5.
16. Tim Quinn, deputy general manager, Metropolitan Water
District of Southern California, personal communication, 17
November 2000.
17. PCL v. DWR, p. 8.
18. As Dennis O'Connor described the brouhaha over the
SWP in 1994 from interviews he conducted with water
industry participants at the time, "Each person defines the
problem(s) with the SWP's repayment system differently,
depending on their own personal perspective." Dennis
O'Connor, Options for Change, op. cit., note 12, p. 2.
19. Ibid., p. 3.
20. Ibid., pp. 17-21.
21. See PCL v. DWR, p. 32-33.
22. Rob Shulman, Plumas County Counsel's Office, Quincy,
California, personal communication, 22 November 2000.
23. Quinn, op. cit.
24. Antonio Rossmann, attorney at law, personal communication,
1 December 2000.

Reprint of - Monterey Agreement: A Bloodless Coup by Tom Stroshane

From Spillway News, Winter 2000...a reprint with emphasis/comments by California Cornerstone.

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 Agency
8;
• 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.

Thursday, January 9, 2014

Hmmm...Funny the Subject of Earthquakes is the first Errata Paper Released by BDCP

BDCP Errata Paper - Funny...it is in regards to the errors and omissions in their earthquake analysis and documentation!

The best I can do is provide the link.  Screen prints do not reproduce the maps in a high enough quality to make it worthwhile to post here.

Looks like this will be the first of so very many. 

Don't know about you folks, but this scares the Heebee Jeebies out of me...if they can't get it right after all this time, what other f***-ups, I mean mistakes, will we have to correct and pay for with our dollars, homes, families and legacy?!

http://baydeltaconservationplan.com/Libraries/Dynamic_Document_Library/Draft_BDCP_EIR-EIS_Errata.sflb.ashx


Dr. Pyke's Comments to Santa Barbara County Board of Supervisors 10/22/13

(Added by California Cornerstone)

October 22, 2013

To the Santa Barbara County Board of Supervisors

Sitting as the Santa Barbara Flood and Water Conservation District

Fellow Citizens and Residents of California,

I am a geotechnical, earthquake and water resources engineer who lives in the Bay Area
but who has often visited Santa Barbara and has worked on projects in the surrounding
area, including, for better or worse, Platforms Grace and Gilda. While projects like
offshore platforms and dams obviously require a team effort, I note that I personally
made key design decisions on both Warm Springs Dam and Sevenoaks Dam, two of the
handful of dams that have been built in California during the 40 years that I have lived
here. Sevenoaks Dam lies between the north and south traces of the San Andreas fault
and, amongst other things, provides flood control benefits for a million people who live
on the floodplain of the Santa Ana River. You might assume from this background that I
became a civil engineer because I like building things, and that is still true, but I only
like building things that make engineering, economic and environmental sense.
Building infrastructure projects to cement a politician’s legacy does not qualify as a
legitimate reason for building them.

The twin tunnels of the Bay Delta Conservation Plan (BDCP) qualify as a project that
makes no engineering, economic or environmental sense. In order to explain this as
briefly as possible without going over the entire tortuous history of the Peripheral Canal,
I will use as my starting point an article written by Matt Weiser in his continuing series
on the Bay Delta Conservation Plan that was published in the Sacramento Bee on
Sunday September 22, which provided the proponents of the BDCP an opportunity to
make their case for the BDCP as a whole and for constructing the twin tunnels following
several articles by Matt which strongly suggested that the BDCP will damage or even
destroy the Delta. However, if the arguments advanced by my friends Jason Peltier and
Roger Patterson are the best that they can do, they would be advised to urge their bosses
at the Westlands Water District and the Metropolitan Water District to more seriously
consider alternative solutions.

The BDCP has five Achilles heels, enough to cripple at least two and a half men, let alone
Jason and Roger:

(1) Even the BDCP’s own consultants admit that the degradation of Delta water quality
cannot be addressed given the current preferred alternative. While, on the basis of past
performance it is impossible to predict the actions of the State Water Resources Control
Board, it seems unlikely that they will agree to improving export water quality at the
expense of Delta water quality.

(2) As confirmed by the report released recently by American Rivers and The Nature
Conservancy, the BDCP has yet to produce a legitimate effects analysis that could
provide the basis for granting incidental take permits;

(3) Roger may claim that the economics of the BDCP are “very sound” but the truth is
that that is very dubious. The $10 billion required for habitat restoration as part of the
plan is currently unfunded, and Dr Rod Smith, who analyzes investments in projects like
the twin tunnels for a living, says that he would likely not advise the individual water
districts to fund the BDCP, although he thinks that South of Delta storage might be a
viable investment.

(4) The threat of earthquakes and megastorms to the Delta levee system, often cited as
the principal justification for constructing the twin tunnels, is way overstated. As an
example, the balance of Matt Weiser’s article was thrown off by just one misstatement:
“the U.S. Geological Survey has estimated that, by 2050, there is a 60 percent chance of
an earthquake occurring that is large enough to flood multiple islands.” In a more
recent interview with the River News Herald, Nancy Vogel, spokesperson for the BDCP,
said “according to the USGS, within the next 25 years there is an 80 percent chance that
10 islands within the Delta are going to flood due to ground motion. Neither of these
statements are true. The USGS has reasonably estimated that there is something like a
two-thirds chance of getting a large, approaching magnitude 7, earthquake in the Bay
Area in the next thirty years, or by 2050, but the Delta is not the Bay Area. The closest,
and likely the most active, fault in the Bay Area is the Hayward fault and that is 30 miles
from the western end of the Delta. The local earthquake sources within the Delta are
not well understood but they are both much less active and unlikely to produce a large
earthquake. The real probability of getting the kind of flooding due to earthquake
scenario that the DWR has studied likely lies between 0.1 and 0.01 percent per year.
Further, Matt Weiser’s own research, as reported in his article, indicated that the
consequences of widespread levee failures have been exaggerated. And, even if the scary
scenarios were valid, as noted in the article, the economic benefits resulting from
reduction of the alleged threat is really small. Put simply, it is time to stop talking about
the earthquake bogey and time to address the real issues of the Delta and California’s
water distribution system.

(5) Without a true “big gulp” capability and without vastly increased south of Delta
storage, the BDCP does not address the real possibility of seeing a six-year drought in
California. That is the most pressing need in California water management. Greatly
increased regional self-reliance will help mitigate this threat, but to the extent that the
State Water Project and the Central Valley Project can survive a six-year drought,
everyone would benefit. Users already complain about reductions in deliveries after two
or three years of drought but imagine what it will be like in the fifth and sixth years of a
drought. The BDCP does nothing to address this problem because the Metropolitan
Water District, which to their credit has accumulated significant storage in recent years,
is presently more concerned about water quality.

The fact that these five technical issues are still unresolved is an indication of the
current state of disarray of the BDCP. Secretary of Natural Resources John Laird has
made the fatuous claim that the current preferred alternative is the result of seven years
of study, but all those seven years of going around in circles has done is line the pockets
of numerous consultants. This circus has continued under the direction of Under
Secretary Jerry Meral, who is looking for a deal, not a solution. When Jerry Meral
continues to make promises at public meetings that he never delivers on, when Jason
Peltier and Roger Patterson, the spokespersons for the two largest water contractors
cannot come up with a persuasive defense of the current plan, and when Nancy Vogel
continues to spout nonsense about earthquakes, one has to question whether anything
of value has been achieved for the expenditure of $180 million dollars.

I have on occasion been brought in as a facilitator when engineering projects have
issues, and have had some success in that capacity, but in my judgment the BDCP
process is beyond salvation and to continue to fund it is just a waste of ratepayers
money. Such funds would be better spent advancing regional self-reliance and initiating
a new, more modest effort to study alternatives for addressing Statewide water
conveyance and ecosystem restoration issues that might actually work.

Sincerely,
Robert Pyke Ph.D.,G.E.

1310 Alma Avenue, No. 201, Walnut Creek, CA 94596
Telephone 925.323.7338 E-mail bobpyke@attglobal.net