OID approves water sale worth nearly $14 million

Oakdale Irrigation District board members, from left, Herman Doornenbal, Gary Osmundson, Steve Webb, Linda Santos and Gail Altieri approved a water sale on Tuesday, April 5, 2016.
Oakdale Irrigation District board members, from left, Herman Doornenbal, Gary Osmundson, Steve Webb, Linda Santos and Gail Altieri approved a water sale on Tuesday, April 5, 2016. gstapley@modbee.com

The Oakdale Irrigation District expects to reap $13.75 million selling Stanislaus River water to buyers from the Fresno area and on the Valley’s drought-scarred West Side, according to a sales agreement unanimously approved Tuesday by the OID board.

The same water – up to 37,500 acre-feet flowing down the Stanislaus – also will meet OID’s obligation for swelling the river in April and May to propel young fish toward the ocean.

“We’re killing two birds with one stone,” board member Herman Doornenbal said. “Government agencies are satisfied because they’re getting water for fish, and we get paid for it.”

Board members Linda Santos and Gail Altieri hesitated for a couple of reasons. The idea of selling water to outsiders “really bothers me,” Santos said; on the other hand, OID should have asked for a lot more money from thirsty buyers, she said.

You guys have got to sell this water. You can’t throw that wall up.

Robert Longstreth, OID customer

The 37,500 acre-feet of water in Tuesday’s sale dwarfs the 9,000 acre-feet heading to the same buyers this year in a separate deal that OID calls its On-Farm Conservation Program. That arrangement will pay farmers to fallow farmland, freeing up water to ship south for perhaps $4 million; sellers will get 20 percent in cash and must spend 70 percent on efficiency upgrades, while the OID keeps 5 percent.

The smaller deal, approved on a split vote last month, has resulted in a lawsuit filed Friday against OID alleging that the district failed to address environmental impacts of shipping water away. If not used in this area, the water cannot seep down and replenish local aquifers, the lawsuit says.

OID’s attorney was not reached Tuesday for comment on the lawsuit, which was brought by OID customers Robert Frobose and Louis Brichetto, and a new group called the Oakdale Groundwater Alliance.

The lawsuit also questions how OID board member Gary Osmundson could vote in favor of the water sale shortly after signing up to fallow 110 acres of his own land. He could stand to make $125,400 on the deal, the lawsuit says.

(Gary) Osmundson has a financial interest in the decision ... in that he filed an application to participate in the On-Farm Conservation Program to fallow approximately 110 acres and he could receive up to $125,400 in compensation.

Oakdale Groundwater Alliance lawsuit

In reality, Osmundson said after the board meeting, he applied to fallow about 105 acres, representing profit of about $119,700; that’s according to the $1,140-per-acre computation used by OID in notices previously mailed to customers to drum up interest in the On-Farm Conservation Program.

“My attorney and OID’s attorney both provided me information saying I can participate (in fallowing), as any other constituent in the district can,” Osmundson said.

A similar conflict-of-interest debate surfaced two weeks ago at a Modesto Irrigation District meeting, when a resident asked about two MID board members who own solar panels participating in discussions affecting solar customers’ rates. MID’s attorney said it’s OK because such votes treat all solar customers alike; after all, farmers’ water rates are determined by farmers sitting on water boards.

OID board Chairman Steve Webb is at the center of a separate conflict issue. Attorney Roger Schrimp, who since has died, had represented OID in various matters while also serving as Webb’s private attorney in a separate legal battle, and Webb had voted with other board members in October to raise Schrimp’s pay from OID.

OID has a crisis of credibility.

Robert Frobose, plaintiff in lawsuit against OID

Webb wanted the board on Tuesday to amend meeting minutes to reflect that he had abstained in October. He dropped the matter when OID attorney James Oliveira said Webb had done nothing wrong.

The OID will team with its partner on the Stanislaus – the South San Joaquin Irrigation District – to sell up to 75,000 acre-feet of water in the deal approved Tuesday. The contract requires that the San Luis and Delta-Mendota Water Authority and the California Department of Water Resources pay $300 per acre-foot for the first 65,000 acre-feet, and $400 per acre-foot for the last 10,000.

Santos said Sacramento-area districts fetched from $550 per acre-foot in other fallowing-for-money transfers.

“It’s our fiduciary responsibility as a board,” she said. “If we’re going to sell the district’s water, we should be getting as much (money) as we can.”

OID General Manager Steve Knell said, “prices are determined on a lot of variables.”

Once you throw up the gauntlet, you will never have them work with you again. We’re trying to keep an avenue of cooperation going.

Steve Knell, OID general manager

If the district were to refuse to cooperate with wildlife and water agencies, state and federal officials could swell the Stanislaus anyway with water stored in New Melones Reservoir, Knell said, and OID would get no money while suffering from poorer relations with the other agencies. OID and SSJID would be forced to sue and would never strike further deals, he said.

After exporting water in both transfers and providing local customers with as much water as they need, OID still will have about 20,000 acre-feet of extra water, Knell said.

Garth Stapley: 209-578-2390