LA Times/Mercury News: Judge Rules that Kern Water Bank Transfer Evaluation Improper

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State failed to analyze effects of water bank, judge rules

The findings are the latest development in a long legal fight over a facility that has helped Stewart Resnick, owner of Fiji Water and POM Wonderful.

By Bettina Boxall

10:02 PM PST, March 5, 2014

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A court ruling issued Wednesday could throw up obstacles to operation of a Kern County groundwater bank that has helped billionaire Stewart Resnick build a nut empire in the southern San Joaquin Valley.

In the latest development in a two-decade legal fight, a Sacramento County Superior Court judge found that the state Department of Water Resources didn't properly analyze the environmental impacts of the Kern Water Bank, which is partly controlled by Resnick's Paramount Farms enterprise.

Judge Timothy Frawley will hold a hearing to determine the next step in the case. Environmental groups intend to argue that the water bank should be shut down while the state prepares a new environmental report.

"These guys have spent 16 years avoiding this moment. It's always been a possibility that a court would come in and shut it down," said Adam Keats, an attorney with the Center for Biological Diversity, which represented plaintiffs in one of two related lawsuits that Frawley decided.

Representatives of Resnick and his wife, Lynda, who also own Fiji Water and POM Wonderful pomegranate juice, referred requests for comment to the water bank, whose attorney could not be reached.

The legal challenges sought to undo changes to the State Water Project that were made as part of a 1994 deal, known as the Monterey Agreement, between the Department of Water Resources and agencies supplied by the project. An earlier round of lawsuits forced the state to issue a new environmental review of the pact, which opponents argued was again insufficient.

Frawley ruled against them on all but one issue involving the water bank. On that count, the judge concluded that the state's environmental report failed to adequately assess the effects of the bank's operation, particularly on groundwater and water quality.

Some neighboring water districts and environmental groups contend that the bank — originally developed by the state but later ceded to private control — is harming the aquifer. They also argue that because the groundwater bank is replenished with supplies from the Sacramento-San Joaquin River Delta, the operation is increasing demand for water from the environmentally fragile delta.

The Monterey Agreements, made behind closed doors, were intended to settle disputes between contractors of the State Water Project, which supplies Southern California cities and some irrigation districts in the southern San Joaquin Valley. The deal has been controversial since its inception and opponents have spent years trying to overturn its provisions.

In his decision, Frawley rejected most of their most recent claims, finding that except for the water bank, the state's review met legal requirements.

Next, he has to decide what happens to the bank while the state launches yet another environmental evaluation. "That's the big question we're all going to be fighting over," Keats said.

bettina.boxall@latimes.com

Judge: California didn't weigh water bank's impact

By GARANCE BURKE Associated Press

POSTED:   03/05/2014 04:43:26 PM PST

UPDATED:   03/05/2014 08:05:52 PM PST

SAN FRANCISCO—A state judge ruled Wednesday that California water managers failed to consider the environmental impacts of running one of the nation's largest water banks.The Department of Water Resources never looked at the ecological effects of running the Kern Water Bank when the state transferred the bank to private hands in 1997, Judge Timothy Frawley ruled.

A nearby water district sued in 2010, saying that the state did not study the bank's potential effects on its neighbors, including causing wells to run dry or groundwater levels to drop in drought years. California is currently experiencing a withering drought, with many reservoirs far below their normal levels.

Environmentalists sued as well, saying that running the bank was causing lasting damage to the Sacramento-San Joaquin Delta and would spur unsustainable urban growth by sending scarce water supplies to proposed cities that the ecosystem could not support.

Attorneys for the Rosedale-Rio Bravo Water Storage District and the San Francisco-based nonprofit Center for Biological Diversity said they were "thrilled" by Wednesday's ruling.

The Kern Water Bank Authority did not immediately return a message left Wednesday. Kern County Water Agency spokeswoman Jeanne Varga said the agency could not comment on pending litigation. The Department of Water Resources did not immediately respond to an email seeking comment.

The judge ordered all parties to meet with him soon to determine how his ruling will affect the operation of the bank.

Major water users in agricultural Kern County gained control of the Kern bank in the mid-1990s, after a round of negotiations with the state Department of Water Resources. Their position was that the state had shorted rural areas in allotting water in a previous drought.

To avoid potential litigation from unhappy water users, state officials ceded ownership of the Kern Water Bank—developed with $74 million from the department and $23 million in taxpayer-approved bonds—to a local water agency. In return, water users gave back 45,000 acre-feet from the amount they contracted to receive each year.

Ownership of the bank ultimately was transferred to a joint powers authority including the local water agency, and numerous powerful water districts.