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Landowners are auctioning ‘water banks’

Money needed to pay bills

Merdies Hayes | , City News Service | 7/4/2014, midnight
The state drought has taken its toll the past three years on everything from fallowed fields, to dry lawns and ...

The state drought has taken its toll the past three years on everything from fallowed fields, to dry lawns and increased water bills. Now a few landowners in the Central Valley are selling the rights to their water holdings—some claims dating back 100 years—in order to pay bills.

Some private firms have been bargaining with landowners who stored water underground in “water banks” years ago during the regular rainy seasons. The Madera Irrigation District reported last week that it made about $7 million from selling some 3,200 acre-feet of water. All of the water went to farms.

One agricultural water district just northwest of Bakersfield announced it would sell off extra water it had acquired through a 100-year-old, “right-to-use” agreement with authorities overseeing the Kern River. Businesses, farmers and private citizens are now bidding for water from the Buena Vista Water Storage District which this year has netted about $13.5 million resulting from the auction of 12,000 acre-feet of water.

Competition for the state’s water is dictated by the state’s geography: the north has the water resources but the biggest water consumers are in the central and southern regions which produce much of the nation’s crops. The amount of water shipped to the south has been severely limited by the drought and legal restrictions on pumping to save threatened wildlife.

So far, buyers and sellers of water have not asked the state for legal advice and are opting to go it alone. “We think that buyers and sellers can negotiate their own deals better than the state,” said Nancy Quan, a supervising engineer with the California Department of Water Resources. The governmental body operated a “water bank” during the last drought in the mid-1990s, and helped broker deals between those entities who were short of water, and those who had plenty. Now the state has backed away from such brokering after several environmental groups sued and won, alleging the state failed in the 1990s to comply with the California Environmental Quality Act in approving those sales.

The state water resources board and the U.S. Bureau of Reclamation have reportedly tracked at least 38 separate, private water transactions this year.

By mid-year, about 60 cities statewide have imposed mandatory cutbacks in water use—some as high as 50 percent per customer——and have charged higher fees for excess usage. Inspectors are dispatched more often to crack down on violators. Sacramento has issued 2,444 notices of violation with fines of up to $1,000 for repeat offenders. A little closer to home, in Santa Barbara County, the Montecito Water District has levied more than $1 million in penalties since April 1 for violators of strict rationing imposed this year.

Statewide water restrictions appear imminent. Gov. Jerry Brown has called for a 20-percent cut in overall water use, while the State Water Resources Control Board this month will consider restrictions on operating outdoor fountains.