Twists and turns in land-fallowing lawsuit against Oakdale district

Some questions about the Oakdale Irrigation District’s evolving money-for-land-fallowing program – hidden from the public, its own board of directors and judges refereeing a lawsuit – remain unanswered in a new spate of court papers as opponents head into another hearing Wednesday.

In an extraordinary move, OID board members Linda Santos and Gail Altieri provided those suing the district with sworn statements that they’ve been kept in the dark about changes to the fallowing program.

OID attorneys countered, asking a judge Wednesday to throw out their testimony, order them not to speak with the suing lawyer and order the lawyer to turn over anything else that Santos and Altieri may have told her.

Plaintiffs’ questions about mysterious terms of the program amount to a “distraction,” OID attorneys say in a briefing, without clarifying how about 59 farms might be paid for freeing up water not needed on 1,343 idled acres. The money can’t come from outside buyers because OID quietly canceled a potential deal and won’t transfer the water.

The money could be taken from OID profits in a separate water sale to other buyers, OID general manager Steve Knell said in a statement associated with the lawsuit.

If so, that would “deprive ratepayers not (fallowing) of the benefit of funds diverted to a select few,” said attorney Osha Meserve, representing plaintiffs, in a briefing.

She continued to accuse board member Gary Osmundson of illegal self-dealing by signing up for the fallowing program, then casting the deciding vote in a 3-2 board approval, with Santos and Altieri dissenting. Osmundson, who once intended to idle 105 acres, essentially voted to put $119,700 in his own pocket, in violation of state law and causing “harm to the integrity of public process,” Meserve said.

Osmundson is not among those with fallowing contracts, OID responded Monday in court papers. If he was, terms of the deal would favor him no more than other participants, contended OID attorney Valerie Kincaid.

She accused Meserve of violating attorney rules of professional conduct “by improperly communicating” with Santos and Altieri without permission from OID lawyers. Both were elected in November after campaigning to improve district transparency.

Their statements say Knell sent all board members an email appearing to contradict what OID attorneys said in separate court proceedings on April 19 and May 4. Knell’s email said the water “will have been delivered” by Wednesday, while the district’s lawyers assured Stanislaus Superior Court judges William Mayhew and Timothy Salter that not a drop would be transferred.

By the time Mayhew hears arguments Wednesday and issues a ruling, the water could be long gone, Meserve said.

In her declaration, Santos said she asked Knell in a May 3 email questions about the fallowing program, including when changes were made, who made them and how it would be funded with no money coming from outside buyers.

“How can these decisions be made without the members of the board and why am I finding out about this from people in the district and the (April 30) Modesto Bee article?!!! What is going on!!” Santos wrote.

In his response, Knell said, “No decision made on change to water sale” while additionally saying the fallowing program was “still moving forward.” He also said, “You assume Bee article is correct. It is not. I can’t explain stupid and this Bee article is stupid.”

OID calls its fallowing program On-Farm Conservation because 75 percent of proceeds would pay for efficiency upgrades, while participants would get 20 percent in cash and the district would keep 5 percent. The deal was figured to be worth $4 million – before OID lost its buyers.

The same buyers, south of the Delta, are paying OID and its partner on the Stanislaus River, the South San Joaquin Irrigation District, $9.75 million each for water currently swelling the river. That “pulse flow” water also is helping propel young salmon toward the ocean before being rerouted south.

Suing to halt the On-Farm transfer are growers and OID customers Louis Brichetto and Robert Frobose. The lawsuit says OID should conduct an in-depth study of environmental consequences of shipping water elsewhere.

This story was originally published May 17, 2016 at 6:53 PM with the headline "Twists and turns in land-fallowing lawsuit against Oakdale district."