Our View: Region will need time to adjust to reduced flows

In the midst of our awful drought, what is California’s water worth? The answer might surprise: nothing.

Try telling that to someone whose lawn is turning brown, or to a farmer who has lost a crop. Regardless, the water itself carries no price.

That’s because the state owns all the water we see above ground – in reservoirs, rivers and the Delta – and it “allows” cities, counties, irrigation districts and others to use that water based on a complex legal system that predates statehood. Yes, the state allows “transfers” (i.e., sales), but its only demand is that the water be put to “beneficial” use.

What adds enormous layers of costs to this free water are the facilities used to capture, store and deliver it. Someone had to build them.

This region, perhaps more than any other, has invested in systems that allow us to put water to “beneficial” use. The pioneer families began making those investments 130 years ago, with the state’s blessing and encouragement. What they started now provides the ability to capture water, store it, create electricity with it then move it to those who create jobs, food and wealth from it.

On the Tuolumne River, Turlock and Modesto irrigation districts began the dam-building process that culminated in Don Pedro Reservoir, which can hold 2 million acre-feet. To build Don Pedro today would cost from $4 billion to $5 billion. Combined, the districts’ irrigation systems are worth another $1.4 billion.

That means the people who live in the two districts own $5.4 billion in water assets (much more, including electrical). That’s not all. Every farmer has his or her own irrigation system; combined, they’re worth tens of millions more. Those who depend on the Stanislaus and Merced rivers are just as heavily invested.

The reservoirs, hundreds of miles of canals and sloughs, powerhouses and delivery systems owned by the people of this region are worth somewhere near $14 billion – mostly built without any state or federal help. (New Melones Reservoir is the exception.)

The returns have been pretty good. Last year, farmers in Stanislaus, Merced and south San Joaquin counties earned roughly $8.5 billion combined. In Stanislaus County it was $3.6 billion, and probably half of that was generated by farmers in TID and MID.

The two districts contain 183,300 acres, and county assessor Don Gaekle puts their value at roughly $1.5 billion. Despite being only a quarter of the county’s farming acreage, that land accounts for nearly half the total value of the county’s farmland. With Oakdale Irrigation District’s 72,000 acres, it’s clear that land with irrigation water is about three times more valuable than land without.

What happens when you take part of that water away? We’re probably going to find out.

By early next year, the State Water Resources Control Board will announce how much more water it wants for environmental flows. Currently, only about 18 percent of the Tuolumne’s entire flow makes it down to the San Joaquin River then to the Delta. The state is considering flows of 35 to 40 percent.

No doubt the river would be healthier with more water, but the economic impacts on our area could be catastrophic.

Land with less water is worth less; a 20 percent cut would mean a loss of roughly $1.8 million in Stanislaus property taxes. Twenty percent less water likely means 20 percent less income for district farmers – a loss of maybe $360 million per year. San Francisco, which shares the Tuolumne with Modesto and Turlock, estimates its losses at $2 billion.

And what about our long-term investments? Losing the use of 20 percent of the water means the dams and canals are 20 percent less valuable – that’s a $2.8 billion loss.

Mayors, school superintendents, legislators and public health officials have been writing letters to the state water board raising these and other serious concerns. The potential for lost jobs, lost public services, more poverty and less opportunity are very real.

The environmental community – including many who live here – are right to say our rivers are in grave danger. But so are our communities.

More than anything else, it will take time to find and implement solutions. As the state considers flows, it also must consider time horizons.

Just as farmers can’t say, “We’re keeping all our water,” the state can’t say, “We’re taking it starting next spring.”

Last week, Bee visiting editor Thomas Smith – head of grape-growing for E.&J. Gallo Winery – noted that farmers adapt well ... eventually. He suggested that with less water, “drought-resistant” almonds could be developed – nuts that need only half a gallon to grow. That would save 2 million acre-feet per year statewide.

That’s not an idle dream. When bees started dying inexplicably, Zaiger Genetics of Modesto developed a self-pollinating almond.

The key is giving farmers enough time and the resources to adjust. By resources, we mean money.

Generations ago, the state of California encouraged investments in water facilities, and our region made them. If the state now wants to put part of those facilities to other uses, it should willingly pay for the privilege. Without the dams and reservoirs owned by the people of this region, the water doesn’t have nearly as much value.

This story was originally published July 12, 2015 at 12:13 AM with the headline "Our View: Region will need time to adjust to reduced flows."