Digger - February 01, 2021
Highlights of recent articles about or related to groundwater in the Borrego Valley of California and efforts to manage it - or not.
For previous years click here.
This is the thirteenth in a series of "monthly reports" by Rebecca Falk intended to keep Borregans informed about what occurs in Watermaster Board (WMB) Meetings.
It is, in the main, a lamentation over the loss of public and transparent process in the effort to implement the Stipulated Agreement intended to bring water use in the Borrego Basin into conformity with state law. Much of the discussion concerns whether the WMB is bound by provisions of California's public meeting law, the Brown Act, or not.
Falk argues that, to ensure the implementation process did not devolve into "a private negotiation that ensured management by those who have overused our water over the years," there was prior agreement enshrined in the Stipulated Agreement that the WMB would "follow sunshine/transparency provisions for public meetings" contained in the Brown Act that usually only apply to public agencies, and that such adherence would be mandatory.
In practice, however, Falk alleges that the WMB consistently ignores the above agreement, characterizes the Brown Act as unenforceable, and considers compliance with it "voluntary." She expresses concern that "[v]oluntarly doing something implies that the consent can be withdrawn." While she stipulates that, to her knowledge, provisions of the Brown Act "have mostly been followed by the WMB," thus far, she questions "how far will this proclaimed 'voluntary' goodwill go when issues get tough?" She avers that WMB Chair Dave Duncan rudely prevented her from inquiring further into the matter in a WMB meeting, made clear that he would not respond to a request for clarification from her in a public meeting, and instead made it "a matter for censorship and temper."
The WMB approved four of six applicants for its Environmental Working Group: Jim Dice, Danny McAmish, John Peterson, and Dr. Michael Wells. The two applicants not approved were David Garmon and Jim Engelke. One of those not approved had been recommended for approval by two directors, but Director Smith commented that he "would introduce an element of negativity." Falk took the comment as a reference to that applicant's previous support for a public process for reaching a Stipulated agreement over the private process that was used and found it "disheartening."
Executive Director Adams reported that as of December 70% of assessments owing WMB had been paid, but five pumpers have still not paid the first installment of their contribution to the WMB. The second installment is due March 1.
Nine water credit holders have met all requirements for converting their credits to Baseline Pumping Allocations. Six water credit holders are unable to convert their water credits to Baseline Pumping Allocations because they have not yet properly shut down abandoned wells.
The ED reported that the December self-reporting of water meter readings "went well with some exceptions."
There will be a conference in February and a hearing in March with the judge overseeing the Borrego Basin Adjudication.
Four letters. None about water.
At the BWD board meeting on 12 January, General Manager Geoff Poole announced that the State Water Resources Control Board had approved a $478,000 reimbursement grant to BWD to rehabilitate its wastewater treatment plant. The BWD board unanimously approved a resolution accepting it.
Three letters. None about water.
On December 22, the BWD board awarded a contract for construction of a second replacement production well located at Tilting T and DiGiorgio Rd. to Southwest Drilling, the same company that recently constructed a well at Borrego Springs Road and Big Horn, at a cost of $857,250. The project will be partially funded by a grant from the California Department of Water Resources.
"When you need water, water is the only thing that will do."
Matthew Diserio, President and Co-Founder
Water Asset Management, founded 2005
In the West, access to water can make or break cities and rural communities and decide the fate of every part of the economy. Some argue that there is not enough of it; others that there is plenty, it's just in the wrong places.
Over the last few years, a proliferation of private investors has been scouring the southwestern United States to buy coveted water rights and sell them to the highest bidder, usually growing cities such as Las Vegas and Phoenix. The most valuable of these rights privilege water access to small, often family-owned farms in stressed communities.
Rechanneling water from rural areas to urban growth spots has long been handled by municipal water managers and utilities. But investors, adept at sussing out undervalued assets, sense an opportunity.
As investor interest mounts, leaders of southwestern states are gathering to decide the future of the Colorado River. Their negotiations could redefine rules that have governed one of the most valuable economic resources in the United States for the last century.
A 13-page document called the Colorado River Compact drafted in 1922, allocates the river's annual flow, dividing the water among seven western U.S. states, 29 Native American tribes, and the Mexican states of Sonora and Baja California, providing water to 40 million people and 5.5 million acres of farmland.
Increasingly, however, the river is threatened by drought; flows are down 20 percent over the last 20 years. The negotiating states will be focused on restoring the flow of the Colorado River and rebalancing water levels in Lake Powell and Lake Mead, that hold water to use in case of extreme drought.
Open market proponents believe the last best hope against the drought is a market-based solution that allows private investors seeking profit a significant hand in distributing water in the West. They maintain that water is underpriced and consequently overused, that U.S. consumers will be compelled to use water more wisely in coming years, and that a market-based approach discourages wasteful low-value water uses like agriculture, which consumes more than 70 percent of the water in the Southwest. But while investors and the environment may benefit, water will almost certainly be more expensive.
The U.S. water business has been called "the biggest emerging market on earth." Private investors would like to bring Wall Street into the water industry and most would like to see the price of water, long set quietly by utilities and governments, rise precipitously as traders exploit volatility due to drought, failing infrastructure, or government restrictions.
On the other hand, many others see the Colorado River Compact as a safeguard isolating the river from the market. The general manager of the Metropolitan Water District of Southern California, the largest water supplier in the country, points out that the river is overallocated and climate change and continued growth are exacerbating the problem. The emergence of open markets could outpace the negotiations. If states, cities, big farms and utilities were able to buy water freely, especially across state lines, the allocations of the compact could be obviated and government's power to manage the fate of the river eroded.
In the last few years, Colorado has been debating a water policy that has piqued private investor's interest: paying farmers not to use the river at all called "demand management." It is an attempt to solve the so-called wrong places problem and reroute water from agriculture to urban uses and conservation.
For more than a decade in parts of Southern California, farmers have been paid to fallow land and California's agricultural water markets are considered a potential model for the West. Nasdaq and CME Group, the world's largest derivatives marketplace, have announced plans to open a futures market for California water similar to those for commodities like crude oil and soybeans.
The market in the Colorado-Big Thompson Project that pipes water from the Colorado River 13 miles under the Continental Divide, serves Denver and other cities, fueling development in some of the fastest-growing housing markets in the country. In the last 10 years, the price of water there has gone up more than eightfold.
Australia's water markets are valued at $2 billion after 14 years in existence and primarily facilitate trades in agricultural areas. When started, they were hailed as a fast, flexible way of redistributing water on the driest inhabited continent, with little regulation. The way the markets were set up, however, left them open to being gamed. That led to their domination by professional investors and the advent of a market in complex financial products, such as derivatives, based on water. Last year, when Australia's drought and devastating wildfires spiked water prices, the markets became a paradise for arbitrage. Subsequently, the government's antitrust department conducted an inquiry and recommended comprehensive changes, citing inadequate regulation and market exploitation by professional traders.
Proponents of water markets argue that the West has an outdated and overregulated system for allocating water that has encouraged cultivation of crops in the desert. As the West has grown in population, a system originally designed around the needs of farms is left to support the rapid growth of cities like Las Vegas and Phoenix. What has happened in Colorado, Australia, and elsewhere, however, is a cautionary tale for America as it seeks to deal with the wrong places problem.For the full text of this article click here
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