San Diego Business Journal

CWA to Pay $130M To Save Water Deal
CWA to Pay $130M To Save Water Deal Deadline Looms For Agreement

Staff Writer

The San Diego County Water Authority is offering to pay as much as $130 million to save a complex water transfer deal with Imperial County. If the deal is allowed to die, it could cost this region a third of its water supply next year.

Without the deal, San Diego will face what one local water expert refers to as "lost jobs, lost businesses, lost quality of life and billions of dollars of negative impact."

The County Water Authority released details Aug. 23 of a proposed water transfer agreement with the Imperial Irrigation District. Unless the agreement is signed by Dec. 31, the state could lose as much as 230 billion gallons of water from the Colorado River next year as part of a separate agreement with the federal government.

Under the terms of the new proposal, the water authority would pay as much as $130 million up-front for improvements to help Imperial County farmers use less water, and also to fallow their land to make more water available for San Diego. The payments would be the first of many over the next 15 years, said Dennis Cushman, a spokesman for the County Water Authority.

San Diego County would then purchase Imperial County's conserved water. The Imperial Irrigation District would send the water authority 20,000 acre-feet in 2003, then 40,000 acre-feet of water in 2004, 60,000 acre-feet in 2005, and so on until it reaches 200,000 acre-feet, Cushman said.

Thereafter, San Diego County would continue receiving 200,000 acre-feet of water every year from the irrigation district, he said.

Negotiations for the 75-year water transfer deal began in 1998. Now, California is facing a deadline. If the deal , covering how the state distributes its water , isn't signed by Dec. 31, California stands to lose out on a much larger supply of water, amounting to 700,000 acre-feet from the Colorado River, Cushman said.

An acre-foot is about 326,000 gallons; 700,000 acre-feet is 230 billion gallons of water.

In January 2001, the federal government mandated that California must reduce its use of Colorado River water down from 5.1 acre-feet to 4.4 million acre-feet , its historical allotment dating back to 1928. The agreement worked out between the federal government, California and the six other states that use the Colorado River gives California a 15-year cushion to gradually reduce its use.

In order to get that cushion, the state must meet certain milestones , among them the water transfer deal. Without the deal in place by Dec. 31, the state would lose the 700,000 acre-feet overnight.

"The federal government has made it crystal clear to California that it has no choice," Cushman said "The federal government will immediately cut (us) off beginning in January. Now, that 700,000 acre-feet of water amounts to more than half of the supply that Metropolitan Water District gets from the Colorado River."

Since San Diego buys 30 percent of its water from the MWD, that means San Diego would lose 30 percent of that 700,000 acre-feet, or 210,000 acre-feet, he said.

"San Diego stands to lose over 200,000 acre-feet of supply. San Diego County last year used about 600,000 acre-feet of water. So we're talking a potential hit to San Diego's water supply of more than a third," Cushman said

The effects would be like the drought of 1990 and 1991, another time the region lost a third of its water supply, he said.

"What we're talking about is lost jobs, lost businesses, lost quality of life, and billions of dollars of negative impact on the county that will take decades to recover from. This is a blow that San Diego, and Southern California as a whole, cannot and should not endure," Cushman said.

Cushman stressed that with the deadline fast approaching, San Diego is willing to meet the Imperial Valley's demands. The new proposal addresses all the concerns Imperial Valley farmers and businesses have had over the past four years , even offering $130 million up front. Up-front payments were not part of the original deal, he said.

Included in that $130 million is up to $35 million as a one-time, upfront incentive payment to farmers who voluntarily "fallow" their land, or put it out of production. In 2003, farmers will be paid $700 per acre fallowed, in addition to payments starting at $550 per acre annually for the fallowing period, Cushman said.

The offer comes on the heels of an Aug. 6 offer from the irrigation district. The agency, which had long objected to fallowing, reversed its stance last month, provided the fallowing would be voluntary and temporary.

Ron Hull, spokesman for the irrigation district, said the new offer was based on their Aug. 6 proposal. However, the irrigation district has some problems with San Diego's offer because it adjusts the irrigation district time line for fallowing. This makes it difficult for the agency to meet San Diego's schedule, he said.

Also, the new proposal doesn't provide any new money to Imperial Valley farmers, but only provides some of that money up-front, Hull said.

The irrigation district board met in closed session Aug. 29 to discuss San Diego's latest offer. No decision was reached as of press time.