On Monday we asked what the rush was with this water deal that necessitated a decision during the time that normally people are on vacation and spending time with their families. On Monday night, in a packed City Hall, part with citizens skeptical of the deal, the other part with consultant and water experts arguing this is our only shot, we finally got the answer: Sacramento developer Angelos Tsakopoulos was driving the deal and the deadline.
The public complaint is the speed at which this deal is progressing, the lack of time for public input and the fact that this is happening during winter break, leading many in this community to question whether those in power are not somewhat hiding the ball here, and trying to hide portions of this deal from full public inquiry.
Councilmember Sue Greenwald raised the point that this process was too short, that she had only had since Wednesday to look at the agreement, and she felt that the meeting was stacked with people who supported the deal and there was not a balanced discussion or any expert brought in who might offer a dissenting opinion.
Driving the deal from the city’s perspective was the need to get a summer water right, due to regulations on tapping into the Sacramento River during drier months. Regulation 91 dictates that all recent water rights holders have a limited ability to tap into the river in the dry months. Conaway Ranch has one of the oldest water rights around, dating back to 1919 and that enables them to have priority in selling water to Davis.
This is a long-term agreement that would eventually purchase a permanent senior water right on the river, something the consultants are saying is “unheard of.”
Under the terms of the agreement, the Woodland-Davis Clean Water Agency would buy 10,000 acre-feet per year of senior water rights, effective January 1, 2016 and subject to the approval from the State Water Resources Control Board and the Bureau of Reclamation.
The agency would pay $2.6 million per year for 24 years, with annual increases of 2% per year for water customers.
After 24 years, the agency would own the water rights free and clear. The agency is a Joint Powers Authority with the only revenue provided by the cities.
Each city would have to approve a separate installment purchase agreement which would add security for the Conaway Preservation Group (CPG) to ensure payments under the water agreement.
Without Tsakopoulos emerging into this picture it, this opportunity would not exist according to the councilmembers and staff gathered on Monday night, five days before Christmas.
As Stephen Souza explained, the key to the deal was Tsakopoulos and his company Tri-City, purchasing a controlling interest with the CPG which owns the ranch and controls the water rights. Prior to his involvement, the JPA had spent 16 months going nowhere with the CPG.
Councilmember Stephen Souza said on Monday, “The best cost-effective project that we could deliver the needed components in order to meet the wastewater discharge permit and [provide] higher quality, secure and reliable water to the city is the project that we have before us.”
Without water from Conaway, this deal was problematic as the city would have to be cutting side deals for water further up the river, temporary deals without much assurance or stability from year to year.
As Richard Shanahan, General Counsel of the WDCWA explained, without this deal, “We would look upstream at other senior water rights holders.”
He continued, “That would be something we would negotiate either yearly or for a period of years, but they wouldn’t be permanent rights. We would have to negotiate over and over again for those water rights to make up that difference [during dry weather months between supply and demand of water].”
Former Mayor Ken Wagstaff was among the participating members of the public, and he pinned the council and staff down on the interests of Tsakopoulos.
The Former Mayor said, “Tsakopoulos needs to show on paper that he’s got this [money] coming in for the water from the Joint Powers Agency, from the cities, however that’s going to work in order to finance his interest of the controlling share of Conaway.”
Mr. Shanahan responded that this was largely correct and added, “The deadline for that is December 31.”
He continued, “The timing of this transaction is important here. This whole relationship is between the agency, Tri-City, and CPG. So to enable Tri-City to close on its deal with CPG and be in a position to enter into an agreement and sell us some water rights, Tri-City needs to know that they have a deal with the [Woodland-]Davis Clean Water Agency. That’s what’s driving the schedule.”
“What’s also driving the schedule that’s equally important is we started discussions with Conaway Preservation Group way before Tsakopoulos was involved, over a year ago on these issues because we needed to secure an intake site,” he added. “So it’s very much a marriage of interests.”
Ken Wagstaff, however, pressed home his point, “If it’s a marriage of interests, I can understand that in terms of what the ultimate outcomes are going to be. But [not] in terms of the timetable here and where there’s a lot of interested members of the public. We hear councilmembers actually in this chamber now saying that they need more time to consult independent opinion, some of which may not be compatible with opinion we’re hearing tonight.”
“So, I’m just trying to find out if that deadline is Conaway’s deadline to Tsakopoulos and Tsakopoulos is turning to us so that he can meet this deadline, why aren’t we in the driver’s seat with respect to the overall timetable? Because whatever we say would determine whether he can do what he wants to do?” Mr. Wagstaff continued.
The response from staff was, “In a large part because we were having very little success negotiating with Conaway Preservation Group. We were in a much more difficult negotiation and we made very poor progress.”
This poor progress put the project behind schedule for the date set by staff by which we would secure an intake site – we were supposed to have accomplished that six months ago.
Ken Wagstaff then suggested that he could not understand why this deal could not wait a month for people to finish with their holiday breaks. He said if this were a friendly deal then he fails to understand the urgency here.
“This looks almost like a hostile takeover,” he concluded.
Staff adamantly denied that this was a hostile takeover.
As another staff member explained, “I think we have to understand we are purchasing a water right, we’re not just buying water like all of the other people wanted to sell us water. If we can’t meet the timeline that they’re functioning under, this deal goes away. We lose that opportunity.”
He continued, “That’s one of the points that’s pushing us forward to try to meet their timeline, because this is not an opportunity that we want to lose. This is a very significant chance for us to buy permanent senior water rights on the river – it’s pretty much unheard of.”
Commentary: Timeo Danaos et dona ferentes
As one expert said, this deal which would allow the JPA to outright own the senior water rights established in 1919 was “unheard of.”
Does this sound too good to be true?
Observe that this deal has to apparently be finalized before the end of the year. That requires a special Q&A session, which to the credit of Mr. Souza and Mr. Krovoza took place. Considering the calendar read December 20, there was a pretty respectable showing even if the size of the audience was increased with the water folks, consultants, and representatives to Mr. Tsakopoulos’ group.
I am always skeptical of meetings on broad and complex subjects where everyone agrees. There needed to be some dissenting voices here.
But most of all, I am skeptical that the deal with the proverbial devil has unintended consequences. The Tsakopoulos’ of the world operate on another sphere and the idea that somehow our local leaders are seeing the big picture as he does is not comforting.
In fairness, Mr. Krovoza suggested that he could not find the bad in this deal and the problem with the deal cannot be just because of who the person is on the other side of the deal – or can it?
I would be much more comfortable with this deal occurring in January after a full month of time to reflect and having people with contrary views tear it apart and look at it up and down.
Right now I feel again that this process, at a crucial moment, is being rushed through.
At the meeting I asked about the impact on the delta, and there was a suggestion that it both would have negligible impact on the delta itself and also might even help it by removing or reducing salt discharge.
On the other hand, I know many who are very skeptical about the whole county deal upon which this deal hinges. And several people whom I spoke to do believe this is a harmful deal to the delta, overall.
But for now it appears that this deal will move forward 4-1, and somewhat ironic is that there was greater opposition in the Board of Supervisors than from progressive Davis.
The public’s recourse is to either eat it up or to fight back by trying to place the deal on the ballot for voter approval. The problem, I think, is that most people are so disgusted with the quality of the Davis drinking water that they will make a deal with the devil and not worry about whatever fallout occurs.
—David M. Greenwald reporting
Thank you to those who attended last night. The questions were excellent, in my view. I felt the back and forth was highly productive for our community. Davis’ need for a quality and affordable local surface water supply — and especially scarce summer water — goes back decades as Davis has looked to extricate itself from 100 percent groundwater dependence. This purchase of rights is just one aspect of the overall project that came out of a 2007 EIR, and this is the project Woodland and Davis charged the Woodland-Davis Clean Water Agency to pursue. See Water Supply Project – Summer 2010 Community Update at [url]http://www.wdcwa.com/documents[/url]
I also recommend the staff reports of the WDCWA ([url]http://www.wdcwa.com/board/agendas[/url]under Agendas & Minutes) and the City ([url]http://cityofdavis.org/meetings/packet.cfm?agenda=F1D2616F-1143-EEBD-B044BCD754F05B45[/url]). All key background documents are posted under the “Documents” tab on the WDCWA’s web site. [url]http://www.wdcwa.com/documents[/url] I believe they are quite accessible.
If approved, the WDCWA, with this purchase of rights, will guarantee that 10,000 af of Conaway water stays in Yolo County, in perpetuity, and Davis and Woodland will have a secure, high-quality right with which to advance their modern water utilities.
Again, all comments and analysis are greatly appreciated.
[quote]there were two councilmembers in the audience – Sue Greenwald and Rochelle Swanson – who were largely unable to speak or directly participate due to Brown Act rules.[/quote]
This bothers me. Perhaps this is the best deal the City could get and long term water rights strike me as a good deal (though I still believe that like pension rights all of this will be renegotiated with time–but having Sr. water rights is a good thing).
If this were an isolated instance that would be one thing but rushing to judgement, being told that staff has sussed out everything and we shouldn’t worry our pretty little heads– that is how our City operates over and over. Yes there are a few wackos who show up to these meetings but as a university community we also have some pretty bright folks who can help.
And if Tsakopolous can send his folks out to support the deal he must think its a good deal for him.
So I agree with Davis here. Why do we always rush public discussion when it comes to important issues.
Bless you David for dissecting the goings on in city government and informing those of us with a lesser degree of involvement in these matters
After attending last night’s “discussion” between proponents of the recently arrived permanent senior water rights contract and concerned citizens, I was left with the impression that a great deal of work has been done to secure ground source water in order to meet the looming 2016 deadline form the state to clean up our discharge water.
I’m a born skeptic, much like yourself David, and have a built in distrust of government, especially when they are making deals with the devil. Most of the time I feel they don’t have my best interests at heart .But last night’s meeting left me with the impression that both Joe Krovosa and Steve Souza have worked hard on the Joint Powers Authority, without much awareness of their efforts on the part of people like me. And suddenly the needs of Tsakopoulos to secure monies for his deal have presented them with a golden opportunity to secure permanent senior water rights as well as many of the land rights needed to make meeting the goals of clean discharge water at a reasonable price a reality.
Yes, the deal requires doing business with Conaway Preservation Partners who will have Tsakopoluous as a majority owner. Yes, Tsakopluous stands to make a great deal of money selling water . Yes, pressure to act with immediacy is being applied and the public has had little opportunity for input. But I think that sometimes we just have to put a little faith in the people we have elected to handle our infrastructure business for us, and strike while the iron is hot. Maybe I am being naive, but my gut tells me this is a good deal for Davis.
My gut tells me that Mr. Krovosa and Mr.Souza are doing what they believe is in the best interest of their constituency. And I would like to thank them for their hard work!
In general, I think that purchasing the water right for 260/foot in perpetuity is a “fair” deal. Water has been sold for more and less than that on an annual basis. We should think of this purchase as a portion of a “diversified portfolio” of water sources for our city that ensures access to water that meets the requirement set forth by our environmentally sensitive state. We in Davis will now be “paying” for those decisions that have been made previously by our elected officials and their appointees. (Not really different than what is going on with pensions, health care, etc). It all comes home to roost in the end.
My concerns are twofold – first, are we sure we can access enough water to ensure that Davis and Woodland get all the water we need. I can’t imagine that 10,000 acre feet fixes our problems or is enough to justify building the plant. Secondly, the rush to conclusion makes it more likely that we’ll miss something important in the details, locating intakes and pipelines, ability to access the land that we need and build the pipeline, loan payments, ability to repay if we decide to refinance etc.
I do understand that “golden opportunities” can arise under certain circumstances. I don’t understand why a similar opportunity hasn’t been available with current ownership or wouldn’t be available again in the future.
“This looks almost like a hostile takeover,” he concluded.”
No its a leveraged buyout selling assets to fund the deal. Its more of an other peoples money kind of deal. This is a great deal for Davis. You keep focusing on the part of the deal that makes sense. Its the part of the deal that is bad for the county, the region and the Delta, where Conaway is selling 80,000 acre feet to LA that is troubling. An interesting question that nobody has asked is does LA have an option to buy more water after this water is delivered or is it a one time deal. My guess is that if Davis is getting rights in perpetuity LA is buying theirs and plans to buy again in the future.
Another question is where else is LA going to buy water? Is Glenn Colusa also going to sell them water? My guess is that every water rights holder is going to be doing cost benefit analysis of selling Metropolitan Water District, the LA water company water rights. Just like they did in the Owens Valley, imagine LA going around the Central Valley buying up water rights from individuals but securing vast amounts of water rights and then getting the state to build a new peripheral canal in for delivery.
In CEQA language it is the cumulative impacts that are the concern. By focusing on the in watershed benefit to Davis, where, the city is getting a truly great deal that solves its major water problems for many years you are missing the mark.
Should read: LA is buying theirs on a one time basis and plans to buy again in the future.
The deal here is give something to all the stake holders; Davis and Woodland and the County and the State, so that nobody wants to speak up about LA buying 80,000 acre feet of water to be shipped out of the watershed, and my guess, unless some environmental group finds grounds to sue, AKT is going to get away with it.
One question with the deal should be where is the Environmental Impact Report? Another with the post above is are there cumulative impacts?
EIR is large document, here is link:
http://www.wdcwa.com/docs/Final_Environmental_Impact_Report.pdf
To Joe Krovoza… please state clearly whether the extension that Tsakopolous’ lawyer said was requested was rejected by Conway Preservation Partners! It is extremely hard to believe that the extension would not have been given since there appears to be no benefit or loss if the agreement is signed a month later. Is this deadline being driven by tax accountants??
Before I join David in criticizing the rush job of this deal–“let’s go slow for month after month after month and then the second we sign off on it let’s vote it in so the public has no chance to give it some thought and there is no chance to amend its flaws”–I want to say that I basically am in favor of this sort of deal. Anyone who says we will not be much better off in the long run with surface water is wrong. Not only will it be a better, safer, healthier and more reliable source of municipal water than the aquifer will be, but it will save us tens of millions of dollars in wastewater treatment and in household costs (for water softeners, salts and damaged pipes, shower heads, etc.).
Although it is a little bit out of date–it was written in February of last year, well before Tsakopoulos entered the picture–I highly recommend everyone read the analysis of our water problem and what all the options we have moving forward are by Edward Schroeder and George Tchobanoglous ([url]http://www.wdcwa.com/docs/Schroeder-Tchobanoglous-study.pdf[/url]). Professors Schroeder and Tchobanoglous are independent, honest voices. They don’t stand to profit by the decision which is made. They were never lackeys of the City Council majority or of City staff. I think Sue Greenwald was the person who brought Schroeder and Tchobanoglous into the picture.
[i]”In fairness, Mr. Krovoza suggested that he [b]could not find the bad[/b] in this deal and the problem with the deal cannot be just because of who the person is on the other side of the deal – or can it?”[/i]
I have the feeling that most of the members of our City Council just lack the grit ([url]http://www.theibug.com/wp-content/uploads/2010/08/John-Wayne-in-True-Grit.jpg[/url]) to drive a hard bargain in negotiations in order to ever “find the bad” in this deal. That, probably even more than the corrupting influence of our firefighters’ union, is why we have been screwed over time after time in labor negotiations. We mostly don’t elect hard asses–like a Jerry Adler or a Sue Greenwald–to the City Council any more. We elect people who want to be liked too much. We need more assh*les on the council to fight for the taxpayers.
So for Mr. Krovoza’s sake, let me point this odd facet in the “agreement” out which he could not find. The interest rate we will agree to pay for our water rights, six percent, is high in today’s market. It’s about 120 basis points over a 30-year home loan. It’s roughly 110 basis points over what a typical muni bond pays, now.
But in reality, a 6% long-term rate isn’t that important if the city can refinance (by issuing bonds) in the future. However, the agreement gives ALL OF THE POWER to Mr. Tsakopoulos when it comes to our refinancing options. That is, Tri-City will have the ABSOLUTE RIGHT to reject any prepayment we might want to make with bond financing or any other form of financing. Now [i]why would our negotiators give Tsakopoulos that power over us? [/i]
If we had a Jerry Adler and a Sue Greenwald driving this “bargain” for us, they would have required that we had full rights to prepayment, so long as we gave ample notice–say 60 days–to the Holder. But sadly, with this tight window they boxed themselves into for the benefit of Tsakopoulos, we will either have to reject this deal in full or live with its flaws.
Rich, just got back from working and getting grit on my hands and body. Here is the whole section on Transfer of Rights. Within it there are two types of prepayment. One is where CPG has an intent to monetize the payments, sell the debt stream, and the second is where Davis would prepay its obligation, bond the purchase agreement or other means to finance the purchase.
In the first case CPG has a right to reject our offer compared to the revenue they would get for selling the revenue stream to another party. Lets say someone others them $20 million and The City ofers them $24 million. They can reject our offer.
In the second case CPG has no right to stop The City from financing our obligation through another means. “Davis shall still retain the right to prepay its obligations in the future, subject to 30-days notice from Davis to CPG and Agency of its intent to do so.”
More later on the 2% annual increase in payments. I have to go take a shower and wash the grit off me.
309.Notice Upon Transfer of Rights: Prepayment. , (a) CPG shall provide written notice to Agency and Davis of its intent to monetize payments to be received pursuant to the Water Agreement and the Promissory Note for Davis Share.
In the event that Davis has an interest in issuing bonds, notes, certificates of participation or other obligations in order to prepay and defease installment payments hereunder, then Davis shall provide written notice to CPG within 30-days of its receipt of notice from CPG, and shall negotiate the terms and timing of such prepayment to CPG within 90-days of CPG’s original notice. CPG shall have the right to either accept or reject the terms of Davis’ prepayment proposal in CPG’s sole and absolute discretion. If CPG and Davis do not agree to terms of prepayment, or Davis shall fail to provide notice of its interest to prepay within the 30-days of receipt of its notice from CPG, then CPG shall be free to proceed to monetize the Installment Payments from Davis as it sees fit without need of further review or approval by Davis.
Notwithstanding any monetization of the Promissory Note for Davis Share, should Davis not prepay and defease its obligations through the process described above, Davis shall still retain the right to prepay its obligations in the future, subject to 30-days notice from Davis to CPG and Agency of its intent to do so. The amount of this prepayment shall be at a prepayment price equal to the present value of all remaining scheduled payments of principal and interest, discounted at an interest rate equal to the Bond Buyer Revenue Bond Index (“the Index”) (or comparable index if no longer published) most recently published at the time of prepayment, or such other mutually agreed upon amount,, provided that if CPG notifies Davis or Agency that CPG has sold all of its interest in the Promissory Note for Davis Share prior to prepayment, and the Index most recently published prior to the date of such sale is lower than the Index most recently published prior at the time of prepayment, then the discount rate used to calculate the prepayment price shall be equal to the Index most recently published prior to the date of such sale.
Prepayment shall relieve and defease Davis’ obligation to make further Installment Payments hereunder.
(b)Additional Documents. If requested by CPG and Agency, Davis will execute and
deliver such additional documents as Agency and CPG reasonably request in order for the Promissory Note for Davis Share to be treated as tax-exempt securities and sold in one or more public offerings, including Internal Revenue Service Form 8038-G, disclosure documents and a continuing disclosure agreement required by Securities and Exchange Commission Rule I5c2- 12, and customary covenants and representations to establish that interest on the Promissory Note for Davis Share will be and remain tax-exempt for federal income tax purposes.
To davisite2: I just don’t have any knowledge of the facts (or not) involved in the agreements of other parties. There have been countless rumors of who is involved in other deals, who’s not, and possible terms. I must focus on what I do know and how to apply such for the benefit of Davis. For both legal and practical reasons, each party is making its deal, though many depend on others.
To Mr. Rifkin: Your observations on the 6 percent provision is understood, but there is more to the context. Staff will respond tonight with how this will play out, if adopted, for the City. Agreements that work for both parties overall might always be considered to include a “flaw” in any one particular aspect. In part, this can be forest and trees territory.
Stephen Souza: [i]”… the second is where Davis would prepay its obligation, bond the purchase agreement or other means to finance the purchase. … In the second case [b]CPG has no right to stop The City from financing our obligation through another means.[/b] “Davis shall still retain the right to prepay its obligations in the future, subject to 30-days notice from Davis to CPG and Agency of its intent to do so.” [/i]
You are mistaken if you think Davis can prepay this debt (on its own terms). The agreement gives the power to the Holder, which is CPG. You even quote the exact language later in your 11:44 AM post where it states in no uncertain terms that CPG has the full right as Holder to reject any prepayment plan: [quote]CPG shall have the right to either accept or reject the terms of Davis’ prepayment proposal in [u]CPG’s sole and absolute discretion[/u].[/quote] This is the exact language quoted from the agreement published on the WDCWA website: [quote] In the event that Maker* has an interest in issuing bonds, notes, certificates of participation or other obligations in order to prepay and defease payments payable hereunder, then Maker shall provide notice to Holder within 30-days of its receipt of notice from Holder and shall negotiate the terms and timing of such prepayment to Holder within 90-days of Holder’s original notice. [u]Holder shall have the right to either accept or reject the terms of Maker’s prepayment proposal in Holder’s sole and absolute discretion.[/u] [/quote] In other words, we cannot refinance unless Tsakopoulos gives us the okay. That’s not a provision which serves us best.
*Maker = Davis; Holder = Tsakopoulos
[i]”Your observations on the 6 percent provision is understood, but there is more to the context.”[/i]
What more context is there? Why can you not just tell us now why you agreed to an interest rate that is 1.56% higher than the current 30-year T-note* is paying ([url]http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield[/url]) and you made the agreement such that we cannot (without Mr. Tsakopoulos agreeing to it) refinance at a lower rate through a bond issuance?
*The 30-year T-note is currently paying 4.44% APR. All else held equal, a municipality should be a higher rate of interest than the U.S. government, as the latter party carries a much more significant chance of default. However, all else is not quite equal, because the interest on a muni bond is tax-free, while the T-note’s interest is taxable income. As such, muni bond interest rates are reduced to reflect that tax difference.
CORRECTION: “All else held equal, a municipality should [s]be[/s] PAY a higher rate of interest than the U.S. government, as the [s]latter party[/s] MUNICIPALITY carries a much more significant chance of default.
I attended the meeting last night and presented my concerns about the siting of the Woodland water intake on the Sacramento River south of Knights Landing. My comments were posted prior to the meeting (12/20/10 – 0623 PM) in the Davis Vanguard in response to the article titled, “Water: What’s the Hurry”. For the sake of continuity, I am reposting them here:
While pursuing my Ph.D. at UCD, I had lead responsibility for completing a major study of water quality within the Sacramento River at Knight’s Landing, California (citation below*). The Glenn Colusa Irrigation District (GCID)extends through portions of Glenn, Colusa, and Yolo Counties, and is one of the largest irrigation districts within the State. My colleages and I found that the irrigation return water discharged from the District through the Colusa Basin Drainage Canal at Knights Landing had significant impacts on the water quality and algal productivity of the Sacramento River in the Knights Landing area, and these impacts extended for a considerable distance downriver. Since the study area is not far north of the proposed Woodland water intake, perhaps this study might be still relevant and the results still worthy of concern.
Stephen P. Hayes, Ph.D.
_____
*Hayes, S.P., A.W. Knight, D.E. Bayer, and G.R. Sanford. 1978. The effects of irrigation return water from the Glenn-Colusa Irrigation District on the water quality and attached algae (periphyton) in the Sacramento River at Knights Landing, California. California Water Resources Center Contribution No. 167. University of California, Davis, California. 75p.
At the meeting, I was assured that the project proponents had abundant data to show that the ongoing operation of the GCID would have no impact on the proposed project. Let’s hope so!
Has AKT or CPG applied for a water rights transfer?
From the city’s point of view, the issue is whether this is a deal that is too good to turn down. That assumes that the price is lower than any alternative, or that there are no other alternatives.
From information I have managed to piece together from experts I trust in the scant three business days over the holiday that we were afforded (because of vacations, I did not have full access to the experts with whom I needed to confer), I would say that we definitely need more time.
The question and answer period last night was entirely in the hands of project advocates. All sides were not heard.
The problem with JPA’s is that the work is done independent of scrutiny of the entire council. Only two council members are appointed, and they will probably always be the enthusiasts rather than the more cost-sensitive of councilmembers.
“From the city’s point of view, the issue is whether this is a deal that is too good to turn down.”
Of course it is. Its the kind of offer you can’t refuse. But that is the point, to keep Davis from holding up the deal that is going down Davis is being given a total sweetheart of a deal. The patsy at the table is the county. The 80,000 acre feet LA gets will result in $50,000,000/year of economic activity being lost from the bypass.
As for the rush to do it now. Slow it down if you want there is no real hurry. I remember years ago when the same kind of thing went down in Natomas when Angelides and Steinberg rammed through another deal with claims it had to be done right then. It doesn’t, but you are going to be pressured that it does. This deal isn’t going away. In fact the county could buy Conaway ranch and sell off its assets to LA or Westlands and do better.
Agreements just approved unanimously at WDCWA Board Hearing… No opposition. Only one speaker, and she spoke in favor due to nature of water rights being acquired and lack of any risk to WDCWA and cities regarding this water transfer.
Tsakopolous ALWAYS leverages his deals with with muicipalities to obtain special “consideration” for his future development schemes. There is no reason to believe that this is not his plan with regard to the city of Davis and this agreement needs to be examined carefully in this light. The discussion above seems to suggest that Tskaopolous holds some sort of “veto” over the financing of Davis’ future payments.
[i]”The 80,000 acre feet LA gets will result in $50,000,000/year of economic activity being lost from the bypass.”[/i]
What?
And how does it hurt Yolo County’s coffers?
Woodland City Council just approved the Agreements unanimously.
The loss of farming in the bypass as LA’s mitigation efforts flood land currently under cultivation to facilitate improved salmon runs that avoid the delta pumps will result in a reduced amount of economic activity estimated to be around $50,000,000/year. This is why Provenza and Chamberlain voted no.
Where do you get your $50,000,000 a year, Mr. Toad, or was that just a nice round number that sounded good to you? Who “estimated” this. Davis voted 4-1, by the way.
[i]”The loss of farming in the bypass as LA’s mitigation efforts flood land currently under cultivation to facilitate improved salmon runs that avoid the delta pumps will result in a reduced amount of economic activity estimated to be around $50,000,000/year.”[/i]
Do you have a source for your $50 million figure? I have not read that elsewhere. Based on what has happened in the past, it makes little sense to me.
One thing I recall from a couple of years ago–the Bee covered this–was that Conaway sold 12,000 acre-feet of its water to users in the San Joaquin Valley. That resulted in 1,000 acres of rice not being planted; and another 500 acres which had been rice were planted in other crops. As far as I know, that sale of 12 a.f. resulted in no loss of economic activity in our region, though it probably hurt the finances of one farm corporation which had previously farmed rice on that land.
Conaway sold that water for $2,000,000 and Yolo County was paid a 2% ($40,000) fee, based on its eminent domain settlement. It’s my understanding that any future sales of water out of the County will now pay a fee of 7.5%, based on the County’s newest deal with CPG.
The deal which was struck with the MWD (Los Angeles) caps the annual sales for the next 23 years at 13,500 a.f., which is roughly the same as was sold in 2008 to users south of the Delta. The 80,000 a.f. amount is the cap for the entire 23 year period, ending in 2039.
If as much as 13,500 a.f. are sold by CPG to MWD in one year, that would pay Yolo County a water transfer fee of $168,750 (7.5%), if prices hold steady. For the entire 23 year allotment of 80,000 a.f., Yolo County would earn fees of $1 million, again assuming the price holds steady.
Its the part of the deal that is bad for the county, the region and the Delta, where Conaway is selling 80,000 acre feet to LA that is troubling. An interesting question that nobody has asked is does LA have an option to buy more water after this water is delivered or is it a one time deal. My guess is that if Davis is getting rights in perpetuity LA is buying theirs and plans to buy again in the future.
Neither the selling of water to LA nor the selling of water to Davis et al is even in the petition stage at the Water Resources Board. The 40,000 acre feet Davis would like to take out of the river is going to a hearing on Jan 18. Does anyone think with the new tools available in the mandated monitoring of inflow and outflow there won’t be a series of challenges to these efforts?
[i]”The 40,000 acre feet Davis would like to take out of the river is going to a hearing on Jan 18.”[/i]
A person in a leadership position for the City of Davis told me the SWRCB hearing should not be a hurdle.
Also, if the SWRCB records are correct, your 40,000 a.f. number is not quite right. The cap is 45,000 a.f. for Davis, UC Davis and Woodland combined: [quote]The total amount of water appropriated under this permit, together with that diverted under the permit issued pursuant to Application 30358B, shall not exceed 80.3 cubic feet per second (30-day average diversion rate) and also shall not exceed 100 cubic feet per second (instantaneous diversion rate). The maximum total amount diverted under the permits on Applications 30358A and 30358B shall not exceed 45,000 acre-feet per year.[/quote] In reading over the NOTICE OF PUBLIC HEARING*, the one challenge that still exists comes from a group in Berkeley, the California Sportfishing Protection Alliance. The bulk of their argument is that the cumulative effect of diversions of this sort have degraded the water quality and harmed various fish species.
This is from the CSPA website: [quote] The City of Davis, University of California Davis and the City of Woodland submitted applications to divert up to 50,000 acre-feet of water annually from the Sacramento River. CSPA protested the applications. The State Water Resources Control Board (SWRCB) has announced it will hold an evidentiary hearing (testimony, cross-examination and rebuttal, all under oath) on 18 and 19 January regarding CSPA’s protest. CSPA, the applicants and South Delta Water Agency are the designated parties to the hearing.
CSPA has submitted testimony and 40 exhibits documenting that the Sacramento Basin is over appropriated and that any additional diversion of water will further harm already degraded fisheries and water quality.
The SWRCB has already issued water rights to eight and a half times the median unimpaired runoff in the entire basin. In the recent Delta flow hearings, the SWRCB found that half of the unimpaired flow into the Delta was diverted upstream or exported at the giant pumps of the federal and state projects in the Delta and that 75% of Sacramento River unimpaired flow (and 60% of San Joaquin River flow and up to 75% of Delta outflow) was necessary to restore the pelagic and salmonid fisheries of the Central Valley.
This hearing and upcoming hearings on the San Joaquin River will signal whether or not the SWRCB is serious about protecting fisheries and water quality. [/quote] This is a copy of the testimony ([url]http://calsport.org/news/wp-content/uploads/2010/12/cspa-bj2.pdf[/url]) which will be presented by Bill Jennings of CSPA. And this is the testimony ([url]http://calsport.org/news/wp-content/uploads/2010/12/cspa-cs2.pdf[/url]) of Chris Shutes, also of CSPA.
*”The State Water Resources Control Board will hold a Public Hearing to Consider Water Right Application 30358A filed by the City of Davis and the University of California, Davis and Application 30358B filed by the City of Woodland–Tuesday, January 18, 2011, at 9 a.m. and continued, if necessary, on Wednesday, January 19, 2011.”
I am assuming that the $80mil* that will be paid in total to CPG & Tri-City for the transfer of water rights is in addition to the $325mil projected estimate for the Woodland-Davis Clean Water Project so now the total is $400mil over the 30-year debt repayment. And building a new intake facility with fish screens is another additional expense that I have not seen an estimate of yet.
So this would translate into an additional $10-15 dollars per month per average residential public utility bill so by 2019 around $110-120 monthly per household for water and possibly another $100 for sewer for a combined $220 per month.
But the water should be much tastier and we can all stop using water softeners.