Outside sales keep local water rates from skyrocketing, OID says

Gail Altieri attends Oakdale Irrigation District meeting Tuesday morning, Feb. 2, 2016.
Gail Altieri attends Oakdale Irrigation District meeting Tuesday morning, Feb. 2, 2016. gstapley@modbee.com

Only one farmer showed up Tuesday to share thoughts on the irrigation district’s controversial habit of selling river water to outside buyers, although benefits from doing so became the focus of a subsequent budget discussion.

The Oakdale Irrigation District had mailed customers a notice asking whether growers might be interested in fallowing some ground this year in exchange for payment of maybe $1,140 per acre, and reserved time at Tuesday’s board meeting for public comment. It’s the same deal negotiated last year, getting the attention of 114 farmers before OID canceled the sale, citing drought and the threat of a lawsuit because the district had not commissioned an environmental study.

A study is underway for this year’s effort. OID calls it the On-Farm Water Conservation Funding Program because 75 percent of the proceeds would help upgrade equipment for sellers volunteering to fallow fields, freeing up water to be transferred. Sellers would get 20 percent in cash and the district would take 5 percent.

 ‘On-Farm Water Conservation’ is not an accurate description. It’s on-farm fallowing with a water sale out of the area,” said Robert Frobose, a grower and frequent critic of what he sees as moves leaving less water available for long-time customers. “The public should know what it is,” he said.

Although two of five board members – recently elected Linda Santos and Gail Altieri – previously voted against the environmental study, saying they wanted more information, they mostly reserved comment as General Manager Steve Knell made a case for outside transfers based on a financial plan developed a decade ago.

The plan said OID should spend $168 million by 2030 to keep the district from falling apart. That includes about $6.7 million each year for replacing and upgrading canals, tunnels and pipelines, and up to $20 million for drilling a one-mile tunnel near Knights Ferry to relieve the risk of a landslide plugging a key canal serving 60 percent of OID’s land.

An unsteady slope there and falling rock have troubled the district for more than a decade. OID will have invested six years obtaining permits for the tunnel when they’re issued and expects to drill it in 2020, although so far the district has set aside only $8 million.

How will OID get the rest, plus money needed for other costs? And how can farmers hope to pay for modernizing required by state officials?

By selling some Stanislaus River water each year to thirsty buyers elsewhere, Knell said. The only other option is charging existing customers a lot more, he said, although OID and its Tri-Dam partner, the South San Joaquin Irrigation District, recently inked a new deal selling power to Santa Clara, fetching OID $11.4 million a year. By comparison, OID got only $4.4 million last year, with little water turning reservoir turbines.

Does OID have extra water to sell?

Yes. Even last year, in the fourth year of drought, OID freed up enough to ship to the Fresno area, reaping $5.75 million at a price of $400 an acre-foot. Such sales have been assumed in OID budgets since 2006, and the district expects to continue collecting an average of $10 million a year in years to come.

This year’s sale would go there too, and maybe to the Los Angeles area, at about the same price.

“If we don’t do transfers, we don’t have money for capital improvement projects,” Knell told the board.

Santos suggested OID got taken when agreeing to annex Trinitas Farming’s 7,234 acres three years ago, because it costs more to deliver water to the almond company than it pays. Knell noted that newcomers pay $57 per acre-foot while established customers pay less than $4 in average water years.

On another topic, Santos questioned why eight management employees, some of whom rarely if ever respond to after-hour emergencies, take home company vehicles, when rank-and-file workers are required to drive personal vehicles to work. Knell noted that the supervisors, through taxes, essentially pay 54 cents per mile when using vehicles for personal use.

Board Chairman Steve Webb tabled the item to provide time for more review. “Linda has some good points,” he said.

Altieri questioned OID’s tab to rent earth excavators – nearly $90,000 for work since October, although the board ultimately agreed to pay the bill on a 4-0 vote; board member Gary Osmundson was absent.

Garth Stapley: 209-578-2390