OID plans to sell $3.9 million in water to outside buyers

The Oakdale Irrigation District plans to sell $3.9 million worth of water to out-of-area buyers in 2015, has begun negotiating potential sales, and is considering offering local farmers financial incentives to fallow their land so additional irrigation water can be marketed to others.

“These water transfers are necessary to the district meetings its goals,” OID General Manager Steve Knell told his district’s board of directors Tuesday. “Funding for our capital (infrastructure) projects comes from water transfers.”

During the past decade, the district has sold 382,408 acre-feet of water outside its borders and collected more than $35.3 million for it.

This month, it started closed-door negotiations with the Westlands Water District, Stockton East Water District and other “federal and state water contractors” interested in buying OID water next year. Those talks are scheduled to resume Dec. 9.

OID is water rich compared with most California irrigation districts because of its century-old rights to Stanislaus River water and access to storage in New Melones Reservoir.

This year, OID bolstered its water supply by pumping about 17,000 acre-feet of groundwater from Oakdale-area aquifers. Because of that, OID didn’t use as much of its surface water this irrigation season. It is storing that extra water in New Melones and its other reservoirs.

Now OID is considering a plan to pay its local farmers to idle their fields voluntarily for the next one to four years. Some of the water saved by not irrigating that land “would be marketed with the OID’s surplus water” to outside buyers, Knell said.

Of the proceeds from selling that water, 95 percent would go to owners of the fallowed land – 20 percent in cash and 75 percent in credits to make efficiency upgrades on their property, according to OID. Upgrades would include “water conservation practices,” such as replacing open ditches with pipelines on private land.

The proposed fallowing plan is expected to be discussed at OID’s Dec. 9 meeting.

According to a budget presentation during Tuesday’s board meeting, OID expects to sell $3.9 million worth of water to out-of-area buyers during 2015. The district projects it will end next year with nearly $43.6 million in “cash on hand” reserves, which is about $1.36 million more than this year.

Knell said if OID doesn’t sell its water to outside buyers next year, it would have to pull funds out of its reserves to cover the cost of the district’s capital improvement projects.

In other action Tuesday, OID directors voted to spend $18,000 next year to hire a public relations firm to write “positive” stories about the district for the Oakdale Leader newspaper.

Directors also voted to transfer $475,000 into a “buildings and facilities reserve fund” for a new OID administration building, which is planned near Greger Street and Kaufman Road.

This story was originally published November 18, 2014 at 8:14 PM with the headline "OID plans to sell $3.9 million in water to outside buyers."