Nuanced Definitions Muddy Water Debate February 18, 2014By Daniel Blackburn and Karen Velie

San Luis Obispo County supervisors are preparing the framework for facilitating a North County-based water district even while advocates scramble to describe what such a district would, or could, do.

A widening rift over water rights to the Paso Robles basin, pitting agricultural and rural neighbors against one another, is morphing into a skirmish of semantics, the words “banking” and “exchanges” taking center stage. Those words are at the heart of disputes about eventual control and utilization of water from the basin, considered one of the largest aquifers west of the Rockies.

At the moment, the basin and its contents are essentially unregulated.

Leaders of the Paso Robles Agricultural Alliance for Groundwater Solutions (PRAAGS) have tried to make clear their contention that “water banking” and “exchanges” are not part of their plans in supporting formation of a district. But in doing so, their message has been garbled.

According to Wikipedia, “Water banking is the practice of forgoing water deliveries during certain periods, and ‘banking’ either the right to use the forgone water in the future, or saving it for someone else to use in exchange for a fee or delivery in kind. It is usually used where there is significant storage capacity to facilitate such transfers of water. In the United States, it is typically regulated and managed at the state level.”

“Exchanges” involve the transport of water supplies between two locations, such as a bank and a basin, probably through a pipeline or other physical conveyance facility.

Jerry Reaugh, PRAAGS chairman, last week termed as “conspiracy thinking” concerns of some local residents regarding the possibility of water banking in the North County.

“Those issues are almost silly when you think about them,” Reaugh said. “Folks can conjure up a conspiracy all they want, but this is not an area that lends itself to water banking.”

But only days later, other PRAGGS members were reported to be claiming in public forums that exportation of excess water from the Paso Robles basin during wet years for storage and use in the Paso basin during years of drought is “a good idea for the basin.”

That fits the classic definition of water banking.

One of those who reportedly made that assertion at a California Cattlemen’s Association meeting was Steve Sinton, a Creston rancher and vintner who serves as secretary of PRAAGS.

Asked about the accuracy of the comment, Sinton said, “I think I was talking about water we would buy,” he told CalCoastNews. “The State Water Project (SWP) has had some surplus years, and if you could bank it someplace and bring it here in a dry year, that would help the balance. We might be able to put it into the ground, but the easiest way would be to give it to farmers directly to use for irrigation. That would reduce the amount of pumping (from the basin).”

Sinton said such a practice “might look like a bank but it isn’t.” He then mentioned the Kern Water Bank as a possible destination for water headed to or from the Paso basin.

Sinton insisted that PRAGGS members “are not talking about exchanges; we are talking about buying water from one place and putting it wherever we have a shortage.”

Mike Ryan, a former District Five supervisor and a North County rancher, said he heard Sinton discuss water exchanges — physically moving water in or out of the basin in response to need or policy — on another occasion.

“I was at the Pear Valley [Vineyards] meeting January 22 and (Sinton) discussed exchanges in response to a question from the audience,” said Ryan. “He was very clear about the intentions.”

PRAAGS’s own website discussed exchanges in a positive way — until residents called attention to the reference and it was hastily removed.

Two weeks ago, the website, in its “question and answer” section, contained this sentence: “Except for temporary exchanges of water resulting in no diminishment of supplies, the District shall not export water from the Paso Robles groundwater basin.”

After the statement was called to the attention of county supervisors, PRAAGS’s public relations firm, Barnett Cox, changed the wording by removing the phrase, “Except for temporary exchanges of water resulting in no diminishment of supplies….”

Dave Cox of Barnett Cox said the alteration was made as part of PRAAGS’s “ongoing efforts” to prepare enabling legislation for the district.

County water officials have in the past lauded the potential for banking in the North County. In a 2008 report titled “Groundwater Banking Plan,” planners opine: “One alternative for utilizing allocation of San Luis Obispo’s state water may be via a groundwater banking program in the North County, since the Paso Robles basin is close to infrastructure with capacity to deliver the water.”

This year, all deliveries from the California Aqueduct have been completely curtailed amid a three-year dry cycle.

Storing water for dry years sounds promising as many communities in the county use only a small portion of water allotments during wet years, then are unable to get their full allotments during dry years. Communities in San Luis Obispo County rely on several water sources, including state water, Lopez Lake water and ground water.

Opponents of creating a water district controlled by corporate farmers argue this plan creates no new water sources, and instead puts several entities in place to manage and prosper at the expense of others.

As demonstrated in Kern County, privatized water can be extremely profitable for the few who control the district — and prohibitively expensive for others.

Several individuals involved in establishing a water district in San Luis Obispo County, the first step to water privatization, were involved in the creation of the Kern Water Bank — an underground water storage facility that is almost completely controlled by billionaires Stewart and Lynda Resnick.

The Resnicks own the Roll International Corporation which is the parent company of Paramount Farms (the largest agribusiness corporation in California), Fiji Water, an almost 800 acre farm in Paso Robles, Justin Winery, and several other high-profile business entities. The powerful couple is also one of the largest donors to Democratic candidates in California.

In the late 1980s, the state Department of Water Resources decided to store water in Kern County’s underground basin to safeguard against drought. Taxpayers spent close to $100 million to preserve the reservoir and connect it to state water.

Then, in the early 1990s, water users including farmers and water districts began battling over rights to water in the Kern County basin. Amid threats of lawsuits from several users, the state transferred ownership of the reservoir to a small group of corporate farms which included entities owned by the Resnicks.

Because of that transfer, state water pumped into the Kern County basin is no longer a public resource, and becomes privately owned. Because of this, the owners of the Kern County Water Bank are able to purchase state water at a set rate, and then sell it to communities at almost double its cost. The result is that local governments pay more for water, with the eventual cost trickling down to its residents.

Though the Resnick’s sale of privatized water has contributed to their more than $2 billion fortune, the cash cow is in the sale of “paper water.”

California is contracted to deliver about 4 million acre feet of water a year, but generally is able to deliver only about half that and at times one fifth of what it is obligated to provide.

The remaining non-existent water is called paper water, expressed in the form of water entitlement certificates. And while these only exist on paper, it’s a high-priced commodity which can be bought and traded on the open market.

After a plan to build additional state project water pipelines was announced last year, Carolee Krieger, Executive Director of the California Water Impact Network , voiced her disapproval, contending the state should focus its resources on developing water sources and promoting conservation.

“The state should focus on conservation, recycling and developing local water sources,” Krieger said, noting the state project has been grossly over-committed. “Five times more water has been promised to water users for every drop that is available. There is no new water.”

Real estate developers in California are required to have a secure water source before projects can be approved. San Luis Obispo County developers have spent millions purchasing state water in order to demonstrate they have a reliable water source for their projects, water that often does not in reality exist.

In 2011, Larry Parsons spent $3.5 million purchasing 100-acre-feet of state water for his proposed 182-acre Pismo Beach development called Los Robles Del Mar. That project was later denied.

Several years ago, the $176 million dollar controversial Nacimiento Water Project pipeline was completed. While promoted by some San Luis Obispo County staffers and officials, opponents of the pipeline argued for a desalination plant, contending that during a serious drought there would be little water in the lake. Water levels at Nacimiento Lake are currently at about 25 percent.