San Francisco water sale deal with Oakdale is off

jholland@modbee.comDecember 11, 2012 

DB skyline 01.JPG

DARRYL BUSH/dbush@modbee.com San Francisco's skyline with the Western span of the Oakland-San Francisco Bay Bridge in the foreground, as seen from Yerba Buena Island, in San Francisco, on Friday, May 4, 2012.

DARRYL BUSH — Modesto Bee

— The wet start to the storm season has prompted San Francisco to back off a plan to buy water from the Oakdale Irrigation District for 2013.

City and district officials said Tuesday that they will instead work on a contract that would make the water — about 1 percent of the OID's average annual supply — available for 2014.

San Francisco was seeking 2,240 acre-feet of water as a dry-year supplement to its Tuolumne River system, which serves about 2.6 million people in four Bay Area counties.

The city turned to the OID after the neighboring Modesto Irrigation District in September dropped a proposed sale of the same amount from the Tuolumne. The deal died mainly because of concerns about the 50-year term and dry-year shortages in the Modesto area.

The OID and San Francisco had hoped to complete the 2013 agreement by Feb. 1, including the sale price.

"We don't want to rush a deal," said Steven Ritchie, assistant general manager for the water enterprise at the San Francisco Public Utilities Commission. "If we have something in place for next winter, that would be a good thing."

The OID system does not connect with San Francisco's, so the district would have to deliver 2,240 acre-feet to the MID via an existing connection near Claribel Road. The Modesto district in turn would let the city take an equal amount into its Hetch Hetchy water and power system.

The MID does not yet have a position on the proposal, a spokeswoman said last week.

The 2014 sale contract could be negotiated by June, OID General Manager Steve Knell said.

The city and district also could talk about future deals involving more water and longer terms.

San Francisco had offered $700 per acre-foot to start to the MID, about 70 times what the district's farmers paid this year.

The city was willing to pay that price because of the long term and the guarantee of water in dry years, said Tim O'Laughlin, who is the attorney for the OID and until recently had that role for the MID.

The Oakdale district would get a lower price if the water is for only one year. It nonetheless would be more than the $6.50 per acre-foot paid by the typical OID farmer this year.

"It looks like a win-win," district board member Jack Alpers said. "They need the water, and we need the money."

The district also is negotiating a sale of up to 2,500 acre-feet a year to the tiny Bay Area city of Brisbane. And it recently reached the end of a pair of transfers totaling about 41,000 acre-feet — one to Stockton-area domestic users, the other to the federal government to boost fisheries in the lower Stanislaus.

The district has used the income from water transfers to upgrade its canal system. It also wants to increase irrigation via annexations of nearby farmland.

Some people have raised concerns that a buyer could find a way to keep the water coming after the sale term ends. Knell said that is no more likely than a renter gaining ownership of a house after the lease is up.

"Water is a property in California and it falls under property law," he said.

Bee staff writer John Holland can be reached at jholland@modbee.com or (209) 578-2385.

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