MID approves intra-district open-market sales of irrigation water

gstapley@modbee.comFebruary 25, 2014 

BA MID water 2

Farm customers of the Modesto Irrigation District will be able to sell their allocated water under a measure approved by the MID board.

BART AH YOU — The Modesto Bee Buy Photo

  • ABOUT THE REPORTER
    alternate textGarth Stapley
    Title: Reporter
    Coverage areas: Regional water, growth, land-use and transportation; civil law, real estate fraud and special projects
    Bio: In his 19 years with The Bee, Garth Stapley has focused on city and county government
    E-mail: gstapley@modbee.com

The prospect of irrigation water hawked on Craigslist became a possibility Tuesday with a landmark vote allowing Modesto Irrigation District customers to buy and sell to other farmers within MID’s boundary at any price they want.

The 3-2 decision overshadowed a competing proposal to establish a pool system managed by district staff in which growers would buy and sell water for $400 an acre-foot. That idea also passed, on a 4-1 vote, but supporters acknowledged it might not get traction because sellers are likely to fetch higher offers on the open market.

The MID board also set in motion a 10 percent rate hike and an $11.91 per-acre drought surcharge.

The surcharge and open-market transfers will end when the drought does, leaders said. Board Chairman Nick Blom defined that as a year when MID can offer its customers at least 30 inches of water per acre.

The district typically provides 42 inches, but drought has reduced that allotment to as little as 18 inches this year. Because most crops can’t get by on that little, the district figures that some customers will decline their allotment in return for some money.

Board members Jake Wenger and Larry Byrd feared that lack of oversight will lead to bidding wars, with some small growers outgunned by others with deep pockets. Also, some farmers fortunate enough to have wells will imperil the Valley’s underground aquifers, Byrd said, by overpumping to keep their crops alive while making money by selling their MID allotments.

“We have to do what’s best for the district” and not a wealthy few, Wenger said.

Said Byrd, “We’re supposed to make it equitable for everyone. Once you start transfers, it’s not going to be that way anymore. ... People are going to look out for their own interests. The guy with the most dough is going to get the most water.”

Board members Paul Campbell and John Mensinger, who represent mostly urban customers, argued in favor of the open-market approach, which also will allow transfers among family and extended family for as much or little as the parties negotiate among themselves.

Farmers “will take care of each other rather than take advantage of each other,” Campbell predicted.

Blom’s swing vote sided with Campbell and Mensinger.

“Yeah, some guys are going to make some money on this,” Blom said. But small farmers won’t be shortchanged any more in the open-market system than they would under any other, he said.

Two weeks ago, Wenger had advocated district-managed transfers at a fixed price and the staff was directed to come up with a policy proposal for the board to consider. But Tuesday’s agenda had the board first voting on the open-market idea. The staff lumped Wenger’s concept with the rate hike in subsequent action, and introduced a random-drawing lottery approach to buying and selling that Wenger did not like.

Last year’s 36-inch allotment per acre meant that farmers paid $9.83 per acre-foot. With the rate increase, drought surcharge and reduced allotment, farmers this year would pay $29.61. If all points stand as proposed, the district would make about $929,000 in extra revenue this year to be spent on power charges for increased pumping and labor costs for ditch tenders to manage deliveries and keep everyone honest, including at night.

First, the board by law must provide a protest period during which customers may submit written protests to the proposed rate hike. That period’s end will coincide with a public hearing April 15; the increase would die if more than 50 percent of customers object, but that rarely happens with California utilities.

The MID board cannot opt for a higher increase or drought surcharge, but theoretically could lower both, as well as increase the 18-inch allotment. With storms on the horizon, the latter is a possibility, but Byrd appeared to stand alone in wanting to eliminate the surcharge.

Also two weeks ago, board members asked the staff to make water theft more painful than the then-proposed penalty of $300. Tuesday, the board agreed to a much stiffer first-offense fine of $1,500, although Campbell and others said they can’t imagine farmers stealing from neighbors they greet in church or at the store.

John Davids, the district’s civil engineering manager, said MID will publicly embarrass violators, although the vehicle for that disclosure has yet to be determined.

Mensinger and Wenger said wells in the Modesto area have every reason to work overtime this summer as a means of combating drought. Although aquifers likely are being drained elsewhere – especially on the Valley’s east side, where millions of almond trees surviving on well water have replaced grazing land – Modesto’s aquifer is healthy after two decades of decreased pumping for city taps. That’s because MID treats and sells canal water to the city.

“This is our reward for being good stewards of the aquifer,” Mensinger said.

That surface water source enabled the city to idle some wells with higher concentrations of contaminants. MID should explore the idea of activating those wells and using the tainted water on crops, Mensinger said.

Bee staff writer Garth Stapley can be reached at gstapley@modbee.com or (209) 578-2390.

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