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OID Hears Comments On Water Sale

POSTED September 18, 2012 10:31 p.m.

A discussion item relating to a potential water transfer to the City of Brisbane in the San Francisco Bay Area brought several community members to the podium to provide public comments to the Oakdale Irrigation District Board of Directors at the Sept. 18 regular meeting.

Prior to the presentation and discussion, OID board president Frank Clark acknowledged that it could be an emotional topic and asked for civility. OID General Manager Steve Knell presented information about the water commitments to the pending Trinitas agricultural annexation and the potential municipal water transfer (sale) to the City of Brisbane. In his presentation, Knell said that OID will have about 66,000 acre feet of water left over from its allotment this year. That water will fall under the Bureau of Reclamation’s control in New Melones reservoir after midnight on Sept. 30, which is the official end of the OID irrigation season. OID wants to have more of that water committed and not risk losing it to state interests; therefore, 25,000 acre feet of interruptible supply will go to the Trinitas annexation and 2,400 acre feet of uninterruptible supply could potentially go to Brisbane. The Trinitas annexation will result in approximately $2.7 million total paid to OID, the Brisbane transfer would be about $1.2 million. Knell said these commitments would decrease surplus water, increase Ag acreage in OID by 13 percent, stimulate the local economy, and create jobs.

Farmer John Brichetto later commented that he felt the terms to Trinitas were too low because there isn’t anywhere that someone can get money on a 20-year term at a three percent rate. He felt that OID shouldn’t carry that much considering it has bond money to pay back and the terms to Trinitas should be at least four-and-a-half percent.

The primary focus of discussion was on the water transfer. Knell said the new 684-acre Baylands development in Brisbane, which is between Candlestick Park and the San Francisco airport, and east of Highway 101, is required to secure a certain amount of guaranteed water in order to proceed and wants to get water from OID.

The OID also provided a draft Term Sheet for review and discussion. It is not a binding agreement. Should OID agree to move forward, the CEQA (environmental impacts) process, will take approximately one year. After that, the OID can decide whether or not to enter into a contract with Brisbane. In part, the agreement would call for a 50-year term of water transfer at a maximum of 2,400 acre feet at a price of $500 per acre foot. There’s also a stipulation that includes a fee of $100 per acre foot as a “reservation” for water that Brisbane doesn’t take in the first five years.

Tom Orvis of Stanislaus Farm Bureau gave some points to the board for consideration. He mentioned the uninterruptible supply and asked about drought periods. He also mentioned that relying on pumping during drought is problematic because underground water supplies and water quality are diminishing. He also asked for clarification that once the water is in the Hetch Hetchy system, then what is its possibility for resale.

OID water attorney Tim O’Laughlin said that they can only resale the water within the Hetch Hetchy system and that Brisbane has to use city and county of San Francisco systems to get its water.

Orvis asked how financially healthy Brisbane is, considering that Stockton is bankrupt and not paying on contracts.

O’Laughlin said that Brisbane has to pay OID for the water before it’s received with probably a 60-day default period, then OID would stop delivery.

Orvis also said Farm Bureau would stay involved in the environmental impact process.

Former Oakdale mayor Pat Kuhn also asked about Brisbane’s financial stability and about OID’s financial participation. O’Laughlin said OID won’t pay for CEQA costs but that costs in the last eight months have probably been about $10,000-$15,000 between his, OID’s, and Brisbane’s time.

“With something so incredibly valuable and intangible… I think 50 years is far too long,” Kuhn said, adding that she’s also perplexed about how Brisbane can sell the water. O’Laughlin alluded to a belief that it will be sold to the Baylands developer.

Director Jack Alpers said that the transfer represents two-thirds of one percent of OID’s water supply.

“It’s about money for OID,” he said, adding that he thinks the risk to OID is minute.

Kuhn maintained that 50 years is too long.

“Once water is committed to a municipal use, you’re never going to get it back…” Kuhn said.

Alpers replied that was false but Kuhn countered that it was something the City of Oakdale had researched.

Richard Lutz stated he was in favor of the water sale and if good escalator costs are built in, then that is sufficient.

Denise Hanlon stated her concern about the reliability of and sustainability of groundwater. She talked about the rough stretch in the 1970s when OID couldn’t provide the water and personal wells all around were going out. She also mentioned the Texas drought and said that OID has to factor in that our water supply depends on snowpack in the Sierras and it hasn’t been there sufficiently in recent times.

Director Clark said that the terms will come before the board at the Oct. 2 regular meeting for approval, which will allow OID to move toward the CEQA process.

In other business, the board unanimously approved having an October irrigation rotation, which will be charged to next year’s water allocation.

The next regular meeting of the OID Board of Directors will be at 9 a.m. on Tuesday, Oct. 2 in the OID boardroom, 1205 East F.

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