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<DIV><FONT face=Arial size=2><BR><FONT face="Times New Roman"
size=3> http://www.ivpressonline.com/articles/2004/03/20/news/news03.txt<BR><BR> <http://www.ivpressonline.com/articles/2004/03/20/news/news03.txt>
</FONT><B><FONT size=4><FONT face="Times New Roman">Water: The marketable
commodity<BR></FONT></B></FONT>
<H3><FONT face="Times New Roman"><BR></FONT></H3>By MARC SCHANZ, Staff
Writer<BR><BR>SACRAMENTO — California is so well-connected in its system of
canals that water from the Trinity River could be flowing into Imperial County
if someone wanted it badly enough, according to Tom Birmingham, general manager
of the Westlands Water District.<BR><BR>"If the best economic interest can be
made by transferring my water to someone else, why wouldn't I do that?"
Birmingham asked when discussing fallowing in the Central Valley. WWD covers a
large portion of the western Central Valley south of Fresno.<BR><BR>"What is
wrong with making money?" Birmingham asked rhetorically.<BR><BR>Now that the
historic Quantification Settlement Agreement is a done deal, what does that
imply for the future of water transfers in California? What are the
responsibilities, if any, of the sellers and buyers of water?<BR><BR>If anyone
wanted to stop the litigation spawned from the Golden State's water wars in its
tracks, they could have done it by rounding up all the usual suspects at the
Clarion Hotel in Sacramento on Friday at the "California Water Marketing"
seminar put on by the Washington-based Seminar Group and trade journal Water
Strategist.<BR><BR>A virtual who's who of players in the QSA and state water law
turned out to examine where the future of water in California was headed,
especially after the historic transfer between the Imperial Irrigation District
and the San Diego County Water Authority was approved in October
2003.<BR><BR>Representatives from the legal teams of SDCWA, IID, the
Metropolitan Water District and other state water agencies all were in
attendance.<BR><BR>Moderator Rodney Smith, the editor of Water Strategist and an
IID economist, said "the Berlin Wall has fallen in California" when talking
about the emerging water market.<BR><BR>Water is coming into its own as a market
in this state, but certain things have to happen for that to be encouraged,
Smith said.<BR><BR>The state's traditional water supplies — the Colorado River,
the State Water Project and groundwater — all are dwindling, Smith
said.<BR><BR>"We need to have an institutional framework for decision-making and
a clear definition of property rights," Smith added.<BR><BR>The arrival of an
open water market will challenge the old structures of the water industry, Smith
added, and development pressures will become more acute and less tolerant of
delays through litigation.<BR><BR>Between seminars dealing with weighty topics
such as property rights, water markets, land-use planning and water supply to
new development, water lawyer jokes were the order of the day.<BR><BR>"I flunked
out of law school and I'm the one who wrote the laws," joked former state
Assemblyman and current member of the State Water Resources Control Board
Richard Katz, to the room full of lawyers.<BR><BR>Katz, who in the 1980s
authored some of the legislation that changed the way water transfers were
viewed, talked about the state's dealings with the Colorado River and the
federal government.<BR><BR>"There's nothing like arguing for state's rights with
the Bush administration," Katz added wryly.<BR><BR>Commenting on the U.S. Bureau
of Reclamation's assessment of use of Colorado River water, Katz said, "They
believe in states rights except when dealing with water and presidential
elections."<BR><BR>The keynote address was given by Dennis O'Connor, consultant
to the state Senate committee on agriculture and water resources.<BR><BR>"There
was a time during the beginning of the (State Water Project) where there were
unintended positive effects to landowners along the project," O'Connor said.
"Now, we're looking at how public trust issues and health and safety issues are
dealt with."<BR><BR>O'Connor spoke about state Sen. Michael Machado (D-Linden),
and his work involving the growing concern with "third-party impacts" of water
transfers.<BR><BR>O'Connor mentioned legislation recently introduced by Machado
— SB 1374 — that specifically addresses third-party impacts from long-term water
transfers, and laying out criteria for which the SWRCB can approve such
transfers.<BR><BR>The bill is scheduled to be heard in the Assembly on April 20,
O'Connor said.<BR><BR>Those seeking a transfer must show that full disclosure of
the structure and financing of a transfer, demonstrate sufficient opportunity
was given for those affected to demonstrate effects, show the evidence presented
by those affected was considered and that the transfer avoids or mitigates
impacts, O'Connor said of the bill's language.<BR><BR>"What is sufficient
mitigation? We are still working on that, and that may come forward in the
future," O'Connor said. "This is intended to get rid of many issues that the
folks down in Imperial are still wrestling with."<BR><BR>David Osias, an outside
attorney who has represented IID, said such new legislation lends itself to
being a delay mechanism for those who would find issue with
transfers.<BR><BR>"I'm sure that's not what it's intended for, but that's what
it looks like," he said.<BR><BR>The loser in the movement toward a water market
is the California farmer, said Rhonda Azevedo Lucas of the California Farm
Bureau Federation.<BR><BR>Most farmers in the state are family farmers, with
mid-sized farms that are not "corporate-owned," Lucas said.<BR><BR>"Most times,
when there is a use shortage, agriculture is impacted in this state," Lucas
said.<BR><BR>More crops are being produced in California today with less water,
she said, all while farmers are under assault from federal and state
environmental regulations.<BR><BR>"The industry is losing money while increasing
output," Lucas said. "We need to work to protect agriculture in this state
because it is under pressure."<BR><BR>One of the concerns of those in attendance
was the concept of reasonable and beneficial use and how nebulous the term has
been in the past when dealing with water rights — and disputes over who's the
best user of that water.<BR><BR>IID Director Andy Horne asked how water
districts are going to come to some understanding about use.<BR><BR>"How are we
going to get clarity on this issue in the future?" Horne asked. "Right now,
there's a hammer hanging over every water rights owner's head: the idea of
reasonable and beneficial use."<BR><BR>Katz said the state is no longer divided
along north-south lines but east-west, and the key to solving the morass of
districts invoking reasonable-use clauses is to get more people involved in the
process.<BR><BR>"It's an urban versus rural split in the state now," Katz said.
"There need to be more mid-level transfers so we can manage and plan
better."<BR><BR>John Penn Carter, the IID's chief counsel since 1981, defended
the Imperial Valley's water rights in the wake of the sweeping transfer
agreement and talked about his 20-plus years defending the district's water
claim.<BR><BR>"Has the mission been accomplished? I would say it has been, but
there's a lot we still have to see through," Carter said.<BR><BR>Southern
California had and still has the political will to beat up on Imperial County's
water rights, Carter said. Now the district is fallowing, something it didn't
want to do but is obligated to as part of the water transfer.<BR><BR>"There are
huge environmental concerns at stake here, the Salton Sea being the largest,"
Carter said.<BR><BR>"None of our water rights are being transferred just our
water. I think there's an important distinction to be made
there."<BR><BR>>> Staff Writer Marc Schanz can be reached at 337-3452 or
at
mschanz@ivpressonline.com<BR> --------------------------------------------------------------------------<BR> <BR>Copyright
© 2004 Imperial Valley Press. <BR></FONT></DIV></BODY></HTML>