Digger - June 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.
Five letters. One about water.
Christmas Circle Has a Manmade Water Crisis, p. 6
A letter from Richard Gray of Borrego Springs in response to the Viewpoint "Christmas Circle Water Crisis" asserts that this is a long-standing problem that has never been resolved while golf courses "get special dispensations." Argues that "BWD, or the County, need to work this out."
Lists four projects that BWD will be working on:
(Editorial comment: This is a best effort to summarize an article that is so poorly written it is difficult to interpret. An accompanying table that purports to provide "examples of residential water bill impacts" (below) only further confuses the issue.)
On May 20, the Borrego Water District held its annual Town Hall Meeting (webinar). Topics covered included: BWD's accomplishments during the past fiscal year, the Groundwater Adjudication Judgement, and proposed rate adjustments to be effective October 2021.
In compliance with Proposition 218 requiring all public agencies to justify water and sewer rate/charge increases in five-year cycles, show how the money will be spent, and require that all beneficiaries pay a fair share, BWD's financial consultant conducted a comprehensive analysis and rate study. The resulting proposed rate structure provides for a reduction in fixed and variable rates on water used for "basic essential needs," i.e., water needed for normal indoor use. (This is presumably Tier 1, but it is impossible to tell from the confusing article.) Tier 2, moderate water use, includes normal indoor use plus moderate landscape irrigation. Those who fall into this category should see little or no change in their water bill from last year. A new Tier 3 is proposed to help BWD recover its costs for those customers responsible for peak demand on the water delivery system that causes BWD to incur additional costs to satisfy. BWD will be meeting with irrigation customers, i.e., Christmas Circle, to discuss ways to minimize the financial impact of the rate increases. Rates are expected to increase 5% per year for the next five years. Sewer rates/charges are expected to remain unchanged next year and then increase by 4% per year over the following four years. BWD plans to hold a public hearing on the rate increases in July.
An update on the Groundwater Adjudication focused on the new role of the Watermaster Board in future Basin operations.
One short paragraph on water: Allows that the revision in water rates has resulted in "some disgruntled folks," and asserts that "discretion should be used with the non-profits needing water, especially Christmas Circle."
Five letters. One about water.
Christmas Circle Water Crisis, p. 7
A letter from Jim Wilson, President, Christmas Circle Community Park Board of Directors regarding the repercussions of proposed water rate increases on the Park. In essence, he argues that the Park will be unable to "continue to provide the only shaded grassed public park in Borrego Valley" without some relief from the water rate increases.
A report on the May 6 meeting of the Borrego Springs Community Sponsor Group. (Editorial Comment: For years the Borrego Sun has neglected the work of this little known but important land-use and planning body. Resumption of coverage, while long overdue, is nonetheless welcome.)
Representatives of the San Diego County Water Authority (SDCWA) attended the meeting to get community feedback on the proposed Regional Conveyance System, a pipeline and tunnel to transfer water from Imperial County to San Diego. One possible route for the pipeline would bring it through Borrego Springs. An SDCWA representative stated at the outset and reiterated in his concluding remarks that the SDCWA has a responsibility to its rate-payers to conduct due diligence on this alternative, "but no environmental impact had been considered [and] [b]ased on previous feedback they have considered moving the entrance of the tunnel away from Borrego Springs to the corner of Route 78 and Borrego Springs Road." The article notes that "the topic invited passionate opposition and even some ridicule from over twenty speakers at the meeting."
The BSCSG also unanimously approved formation of the Water and Land Use Subcommittee to monitor water issues including the Borrego Springs WaterMaster and Borrego Water District board meetings.
Two letters. None about water.
On May 6 there will be a public presentation on the San Diego County Water Authority's proposed Regional Conveyance System (RCS) by representatives of the CWA. CWA now pays the Metropolitan Water District of Southern California to transport Colorado River water to San Diego through its pipes. The RCS would enable the CWA to transport the water using its own pipeline. The RCS would take 10 years to plan and another 15 years to build. Proponents of the project within CWA have suggested the pipeline could be sized to bring 20,000 acre-feet of Colorado River water Borrego, but in public meetings these same representatives of CWA have pledged it would only be large enough to transport CWA's allotment of Colorado River Water. Moreover, if Borrego were to get water via the RCS, it would not be free. Borrego would have to find a willing seller and pay potentially millions of dollars a year for it and then pay for extensive and expensive treatment to make it potable. There is growing opposition to the RCS locally and by the City of San Diego. Most CWA member agencies have concluded that the RCS would be more expensive than continuing to pay the Metropolitan Water District to transport the water. Environmentalists have raised alarm about the devastating effect of this industrial project will have on the backcountry, desert, and San Diego greenhouse gas emissions. "The Tubb Canyon Desert Conservancy (TCDC) views the proposed RCS as an existential threat to the future of the Park and the community."
Two letters. None about water.
At its April 27 meeting the BWD board received a presentation on the rate study for water and sewer. BWD has options that impact different segments of its ratepayers differently. Increases in fixed charges, e.g., the base meter fee, effect all customers equally while raising water rates disproportionally impacts those who use a lot of water. The consulting firm responsible for the study recommends:
Borrego Springs won court approval for an agreement under which large farmers, resort owners, and its own water district will slash water use by 74% by 2040, cuts needed to keep the town alive. The 24,000 acre-feet of water pumped from the basin annually must be reduced to 5,700 acre-feet within 19 years. One acre-foot equals 326,000 gallons. The front-loaded agreement requires all large users to reduce the amounts of water they use by 5% each year in order to halve the amount they pump by 2030. 'It's drastic, but it's necessary to make sure Borrego Springs survives and is a vibrant community,' said Cathy Dice, president of the Borrego Water District.
Most major landowners who've long been pumping large amounts of water from the rapidly dwindling aquifer signed the agreement, but those who didn't are still governed by it because the Borrego Water District sued every water user in the valley to ensure the agreement would be binding on all.
The town has long been aware of its declining water supply. Some large pumpers never had water meters and pumped as much groundwater as they wanted from beneath their land, resulting in groundwater levels falling between 1 and 2 feet a year. In recent years, some farmers have opted to fallow land or sell out. One of the main golf courses has closed.The U.S. Bureau of Reclamation looked at importing water, but concluded it would cost up to $695 million to build, maintain, and buy water over 50 years, so those plans were shelved. Discussions about what to do foundered. In 2014, the Sustainable Groundwater Management Act (SGMA) was passed, requiring that all 515 of California's groundwater basins remain usable. 'The overarching theme of SGMA is ... you still have to have water available for the long term,' according to the California Department of Water Resources.
Many landowners think that the water agreement will save the community and what makes it unique. 'We know that there's a shortage of water, but we wanted to get away from the pointing fingers and blaming each other,' said 79-year-old Jim Seley, owner of Seley Ranches, whose sons want to continue farming here for years to come. 'The settlement agreement is an effort to put everybody together, working towards. sustaining the valley.' Despite the U.S. Bureau of Reclamation's conclusion, Seley maintains that the state and federal governments could pipe water from the Gulf of Mexico, desalinate it, and supply some to Borrego.
Under the voluminous agreement approved by the Court, every parcel must be metered, water use monitored, and limits enforced by a water master board. If the 24,000 acre-feet was an overestimate, cuts could be relaxed; if an underestimate, deeper cuts could be mandated.
An average California household uses between one-half and 1 acre-foot of water per year, so households should notice no difference in water supply or major changes in their bills. The state park and local school are guaranteed their current water supply forever.
Dice said the water district hoped to offset its required cuts by buying water rights as large water users pull out. The agreement was tailored to prevent speculators from buying rights for resale. She also hopes to maintain the high quality of town water, but researchers fear that as underground supplies diminish pumpers could start drawing ancient water containing both natural toxins like arsenic and manmade contaminants like nitrates.
Most of the state's 515 groundwater basins are in good shape, but 21, including the Borrego Springs' subbasin, were declared in "critical overdraft," meaning they are pumping far more water than is being replaced. Such basins were required to submit groundwater sustainability plans by Jan. 31, 2020, or show they had a viable alternative. Failing that, they could be taken over by the state. Borrego Springs opted for a legally binding stipulated judgement that State officials are reviewing and will likely approve.
For the full text of this article click here
At the Borrego Springs Community Sponsor Group meeting on May 6, "representatives of the San Diego Water Authority (CWA) will pitch their plan to turn Borrego Springs into an industrial construction zone for 15 years to build a Regional Conveyance System (RCS) that will carry their water from the Colorado River to their customers in San Diego. " The CWA has already committed nearly $4 million to studying the project even though eighteen of CWA's twenty-four member agencies had serious concerns about the studies on which the plan was based and commissioned their own independent analysis of the project which concluded the project did not make economic sense. Opposition to the project has been growing since details of the plan were made public in August 2020. Environmental organizations unanimously oppose it for myriad reasons and the City of San Diego calculates the RCS is not affordable for city ratepayers. Borrego's civic organizations' reactions thus far range from expression of 'serious concerns' to explicit opposition. The Borrego Water District objected to RCS's potentially unaffordable costs to ratepayers and negative impacts on Borrego's water quality. The Borrego Village Association expressed concern about pipeline's deleterious effect on the pristine desert environment, tourism, and noise and light pollution. The Anza-Borrego Foundation concluded that the purported benefits of the RCS will not justify its possible adverse effects on the State Park and the community of Borrego Springs. The Tubb Canyon Desert Conservancy has pledged opposition to any pipeline route that transects the Anza-Borrego State Park and the community of Borrego Springs. The California State Park Rangers Association has asked San Diego's mayor to intervene to quash this" ill-conceived water transfer" proposal by CWA
On April 8, 2021, Superior Court Judge Peter Wilson approved the Stipulated Judgement for the Borrego Springs Sub Basin. California's Sustainable Groundwater Management Act of 2014 (SGMA) provides an alternative to the often lengthy, costly, and contentious adjudication process to determine water rights in a groundwater basin called Expedited Adjudication. If over 75% of all Basin Pumpers agree and commit to a Groundwater Management Plan (GMP), a court can impose it on all pumpers in the basin. Borrego Springs exceeded that threshold and took two years to create an 1,800 page Stipulated Agreement including a GMP that, among other things, governs pumping allocations. With the court's approval, the Stipulated Agreement became a Stipulated Judgement binding on all pumpers in the Borrego Basin. The GMP has been submitted to the California Department of Water Resources which has up to two years to review and either approve or ask for revisions to the GMP. Judge Wilson's ruling gives responsibility for implementation of the GMP in accordance with SGMA requirements to a Watermaster Board and staff that has already been functionaing on an interim basis for over a year and already taken some important first steps.
Three letters. None about water.
BWD is required by Proposition 218 to charge its rate-payers as little as possible for water and sewer services, ensure that all fees are directly related to the cost of providing services, inform customers in advance of any rate increases, and provide an opportunity for them to respond. If a majority of property owners or customers protest a fee, it cannot be imposed. BWD undertakes a rate-setting process every five years and the next update will be this summer. The District has conducted a comprehensive study to determine and justify how much it must charge to deliver water and sewer services and will present the cost analysis and proposed new rate structure at a Town Hall meeting on 30 April.
Three letters. One about water?
Another letter from Beth Gramoy of Borrego Springs pleading for a solution to the problems created by the closing of the Borrego Springs Resort and particularly the abandonment of its its golf course.
As required by Proposition 218, BWD sets water and sewer rates every five years. All fees must be justified and directly related to the cost of providing services. BWD has completed a cost of services study for that purpose and must now hold a public hearing on the rate schedule and consider all protests. If written protests are filed by a majority of property owners or customers of record the District is prohibited from imposing the fees.
In its last article, the Local Government Commission discussed how "Borregans will need to fundamentally change their lives in order to meet the state's water reduction mandates." In this article, "LGC seeks to... better understand the key concerns, values, and drivers that affect... decision-making." Ten individuals who have participated in planning efforts for Borrego Springs were interviewed by LGC and a team of Stanford University student interns to determine each individual's perspective on the community's water and land use history and visions for the future of the town. Given that stated purpose, it is surprising how few interviewees spoke to land and water issues in the valley, and then only briefly, obliquely, and in vague generalities. Undaunted, however, the author(s) of the piece nonetheless insist: "From these interviews, we heard about the deeply complex relationship between society and the environment."
Rudy Monica was the principal investor in a syndicate that purchased 170 acresl of pristine desert south of the Country Club neighborhood and west of Borrego Springs Road that, among other things, is home to an ancient and iconic ocotillo forest. The investor's intent was to divide the parcel into 170 one-acre residential lots with devastating consequences for the ocotillo forest, among other things. One investor, Chris Brown, had previously worked as the land use staff person for former San Diego County Commissioner Bill Horn. Other investors were from out of state.
Residents of the nearby Country Club and Tubb Canyon neighborhoods immediately and uniformly opposed the project and opposition quickly spread to the rest of the community as more details became clear earning the project the disdainful epithet "Rudyville." The project came before the Borrego Springs Community Sponsor Group three times and each time received a negative recommendation. In April 2016, more than 160 community members attended a Sponsor Group meeting to discuss Rudyville. Opposition to it was unanimous.
In September 2018, the County Board of Supervisors scheduled a vote on Rudyville and many Borregans traveled to San Diego to oppose it. Supervisor Bill Horn, who represented Borrego Springs, ignored his constituents and voted against them. Supervisor Diane Jacob, however, did respond to the pleas of Borrego residents and tipped the balance against approval of the project. "The community of Borrego had prevailed against wealth against indifferent political representation against political insiders."
Not quite. The syndicate behind Rudyville was among 60 property owners in the county who claimed to have been damaged by implementation of the County's General Plan in 2015 that, in their case, had reduced the allowable density for their project site. All of the claimants requested property specific zoning changes. The County bundled the 60 requests into a single project for studies required before any Amendment to the General Plan could be granted. On February 25, 2021, the County announced that it had 'discontinued' the six-year-old study project, effectively killing Rudyville's request to increase its zoning density to one-acre lots.
Four letters. None about water.
On March 9, the BWD board accepted a series of new pipelines around De Anza Country Club that replaced old and failing existing lines. The project was complicated by numerous old/abandoned water lines and other utilities in the area. Virtually all of BWD's water delivery system is aging and in need of replacement to avoid catastrophic failures and BWD plans to continue an aggressive pipeline replacement plan in coming years funded by rates/charges, grants/loans, and other funding sources. BWD's current Cost of Services study will address the cost of these improvements.
Three letters. None about water.
As part of its Capital Improvement Plan BWD will soon this year will be drilling a new well to replace well ID-5-5.. Like everything else in water delivery infrastructure, wells have a limited life span. The metal well casings have small openings or "slots" about the width of the tip of a ball point pen that let groundwater flow into the casing but prevent intrusion of sand and dirt. Periodic cleaning using high pressure air and water blasts helps keep the slots clean, but after 6-8 cleanings or 30-40 years, the slots and gravel surrounding the casing become clogged and reduces the well's efficiency or the casing falls apart and the well must be replaced. To ensure uninterrupted service BWD builds a replacement well four to five years before an aging well is no longer productive and runs the two wells in tandem for a few years. Then the pump on the older well is removed and the well filled with concrete or used for Basin Monitoring.
After 40 - 60 years of service, Borrego Water District waterlines are aging out and in need of replacement. In the heyday of home building in Borrego Springs developers created independent, private water systems and infrastructure for their projects. Over the years, these merged into what is now the BWD, leaving the Borrego Air Ranch with the only private water company in Borrego Springs.The oldest pipes are made of asbestos-cement that, while safe so long as the pipes are intact, becomes brittle with age and eventually rupture. Repairing broken pipes is not safe because it releases asbestos into the air where it can be inhaled by repair crews. In newer developments PVC pipe was used but not buried in soft sand as intended. Rather, rocks, broken pavement, and other debris were used as fill. As the pipelines were subjected to settling, earthquakes, and water pressure surges over time they were damaged by the unsuitable fill and developed leaks. BWD has a Capital Improvement Plan to replace aging infrastructure funded by grants, bond financing, water rates, and charges.
Three letters. None about water.
The author of this long article, a brief and simplified history of what passed for groundwater management in the Borrego Valley, is identified only as the "Local Government Commission," but theBorrego Valley Stewardship Council likely had a hand in it as well.
The article begins by noting that "2020 marked the beginning of a new era in [California's] approach to water management" when, pursuant to the Sustainable Groundwater Management Act of 2014 (SGMA), representatives of the states 46 high-priority groundwater basins submitted groundwater management plans to the California Department of Water Resources as required by SGMA. Prior to passage of SGMA landowners were entitled to pump water from beneath their property without limit. Enactment of SGMA gave California the dubious honor of being the last state in the Union to require comprehensive groundwater management. The result of this hands-off approach by the State was that Borrego's sole-source aquifer, formed over millennia, has been rapidly depleted in recent decades. A United States Geological Survey study in 1982 showed that the aquifer's recharge rate was roughly 6,000 acre feet per year, very close to the now validated 5,700 acre feet per year, but was dismissed out of hand by pumpers who used most of the water, i.e. farms and golf courses. Each user segment continued interpreting the data according to their own interests, ignoring the obvious fact that groundwater was being pumped at an unsustainable rate. Bickering over data among the three user groups continued through the 1990's, forestalling any action to address the groundwater problem.
In 2002, AB 3030, known as the Groundwater Management Act, enabled the Borrego Water District to develop a Groundwater Management Plan that discussed the need to restrict water use but failed to prescribe remedies, establish deadlines for implementing them, or provide penalties for not doing so, rendering it, in effect, a toothless paper tiger.
BWD then sought other methods of ensuring water for the community's future, e.g., importing Colorado River water, using Borrego's aquifer as a storage reservoir for other water agencies in return for in-kind payment (conjunctive use), drilling a well in nearby Clark Dry Lake, etc. One feasibility study after another, however, found each proposal to be too costly, politically or legally impossible, or environmentally too risky, and, after wasting a great deal of time and money, no viable alternatives were found and acrimony and distrust among water users continued to fester.
In 2002 the Regional Water Management Planning Act briefly appeared to offer a solution to Borrego's deteriorating water situation, but more than two years of facilitated negotiations among interested parties produced nothing but continued animosity. It did, however, make clear the level of distrust in the community.
In 2012, BWD appealed to DWR for help and the agency provided a facilitator to convene a group of interested parties known as the Borrego Water Coalition (BWC) to improve Borrego's 2002 GMP. Notably absent from the group, however, was a representative of the residents of Borrego Springs, so the BWC was not accountable to members of the community at large. Once formed, the BWC met in closed session to "engender honest conversation and build trust between represented user groups, but [that] had the negative effect of continuing to exclude the broader community." Nonetheless, the threat of pending legislation motivated the BWC to produce a plan aligned with the anticipated SGMA.
The secrecy enshrouding the BWC's dealings continued to foster and aggravate suspicion in the community and the Borrego Valley Stewardship Council was formed in 2014 to "convene diverse community voices in matters affecting the future of Borrego Springs." The Stewardship Council became involved in with the groundwater sustainability issue when SGMA was passed in 2014. The Borrego Basin was declared to be in "critical overdraft" and required by SGMA to form a Groundwater Sustainability Agency (GSA) to deal with the problem. By 2017 the County of San Diego and BWD were designated the GSA for the Borrego Basin as a joint powers authority. The GSA convened a nine-member GSP Advisory Committee including former members of the BWC plus representatives of the Borrego Springs Community Sponsor Group and the Borrego Valley Stewardship Council.
Over the next two and one-half years the GSP Advisory Committee created a plan to reduce annual pumping of the Borrego Valley aquifer to it 5,700 acre-foot sustainable yield, a reduction of 75% over twenty years, "arguably the most dire condition in California." Meanwhile, Borrego was receiving significant bad press because of its water situation. To address this, the Borrego Valley Stewardship Council, with support from the Local Government Commission, sought to redefine Borrego and its future.
In March 2019 the Draft Groundwater Sustainability Plan was released making it the first in the state, but soon thereafter distrust among pumpers in the Valley escalated. Public questioning during GSA Advisory Committee meetings and the data gathering process made some pumpers defensive and uncooperative and BWD came under pressure from major pumpers to enter private negotiations. At the same time, San Diego County threatened to withdraw from the GSA as soon as the plan was finalized apparently because the major pumpers did not want to be responsible to the public and the County did not want to be responsible for implementation of a plan devised without public accountability. BWD, however, could not serve as a GSA without the County's participation because the County is the region's sole land use authority. This culminated in BWD's accepting private negotiations in anticipation of the GSP soon being replaced by a stipulated agreement most of the Advisory Committee members had never seen, and the Advisory Committee voted to accept the GSP as an act of solidarity with their community, to acknowledge the work of those who developed the GSP, and because they hoped the GSP would eventually become part of the stipulated agreement. Still, "[t]wo of the basin's largest agricultural pumpers, parties to the private negotiations, declined to accept the GSP."
At the eleventh hour, and without opportunity for public comment, attorneys for the major pumper groups released a stipulated agreement that would pursue a 'friendly adjudication' of the Borrego Basin rather than moving forward with the publicly developed GSP thereby offending many Borregans and particularly GSP advisory committee members all of whom protested vigorously. In response to this backlash, parties to the negotiations hastily convened public meetings to discuss the stipulated agreement eventually compromising on converting the draft GSP into a Groundwater Management Plan to be submitted to the court as an attachment to the Stipulated Agreement. Many Borregans eventually came to accept the stipulated agreement because they believed it would expedite water use reductions.
The Stipulated Agreement was submitted to DWR in January 2020, and assigned to a California Superior Court Judge for review. If certified by the Court, the Borrego Basin will be overseen by a district court judge and managed by a WaterMaster Board comprising pumpers and community representatives. An Interim WaterMaster Board including a community representative is already in place and holding public meetings and will become permanent if the Superior Court judge rules in favor of the Stipulated Agreement. It could, however, be years before all the details of the Stipulated Agreement and the WaterMaster Board are settled.
Three letters. None about water.
BWD operates a sewer system that serves approximately 800 customers in Town Center, Borrego Springs Resort/Club Circle, and Rams Hill. Most of the infrastructure dates from the mid-1980s and two major projects are underway to maintain and improve sewer service.
The four-mile sewer collection system has a large diameter pipeline has a slow flow rate that contributes to the creation of odors. Manholes along the sewer line allow the odors to escape. BWD plans to install an oxygen injection system to control the odors, relocate the sewer line that now runs through the La Casa del Zorro parking lot to Borrego Springs Road, and seal the manholes. The project is being funded by a bond issue from 2018.
A state of California Water Board grant of $478,000 will fund repairs to and replacement of equipment at the Rams Hill Water Treatment Plant.
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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