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New Flow Standards Threaten OID Storage

With a history of turbulence of outside issues such as litigations and board quarrels overshadowing Oakdale Irrigation District meetings, the Tuesday, July 5 meeting mainly focused on just water issues.

In a presentation by OID General Manager Steve Knell, board members and the public learned that a state proposed Bay-Delta Quality Control plan scheduled to be released the middle of this month will severely threaten the Oakdale Irrigation District storage capacities if put into place.

“Put your seatbelt on, we’re in for a rough ride,” Knell said of the pending program.

During his presentation, Knell said the new unimpaired flow standard will be between 30 to 50 percent of water in the Stanislaus River for February to June. Currently the flow is 35 percent.

“Unimpaired flow” was defined by Knell as the flow of water that would make it down the river if there were no reservoirs or diversions such as dams.

“The plan is 50 percent of the flow in wet years and 30 percent in dry ones,” Knell said.

Knell explained that as the plan is phased in, and adopted by the end of the year, water rights will be changed with new implementations.

“Anything you have today will be gone and rewritten,” Knell told the group, adding sarcastically, “It’s going to be a fun process.”

Knell explained that the new regulations would also impact groundwater storage as farmers would move to the costly measure to pump from wells.

“All the water they take from us will now have to come out of the ground,” Knell said.

As Knell explained the process, he identified what he saw were severe flaws with the proposal.

“Melones will end up empty and we’ll basically be running the river,” Knell said.

He showed graphs that New Melones Reservoir could be actually empty 18 percent of the time and have a loss of the cold water pool 45 percent of the time.

“The loss of the cold water pool will be killing the very fish the federal law was implemented to protect,” Knell said.

Knell identified three deficiencies with the state’s proposal saying there was no dry year analysis, that figures were based on averages.

“If I have one foot in a freezer and one foot in an oven, if you take the average temperature, my body should be okay,” Knell said.

He said the other deficiencies were figures were diluted due to improper geographical scope of the study and an over-estimation of low value crops.

Knell estimated that the new regulations could result in the loss of 700 family farms that have less than 100 acres and 100 farms that run on 100 to 250 acres.

He said that the State Water Board acknowledged that while the loss of farmland was significant, the impacts to the economies in the Central Valley region were significant, the impact to the region’s groundwater basin would be reduced, and while there would be significant regional and economic impact to the SF Bay Area, the position of the State Water Board was to still implement the program.

“The SED (Substitute Environmental Document) focus is to take our water, take our water, take our water, with habitat, predation, and water quality as a priority,” Knell said.

He then urged customers to contact state representatives.

“The state needs to hear from farmers and customers,” Knell said. “We’re just another government organization to them.”

In other issues, the board of directors learned of the advantages of refinancing the 30-year bonds released in 2009.

Under a proposal by Wells Fargo’s Michael Engelbrecht, OID could see a $4- to $5 million savings in the course of those bonds due to mature in August 2039 as well a one-year earlier maturity in 2038 with the refinance.

Due to falling interest rates from Brexit and other world events, interest rates have fallen below three percent.

“As a borrower, this is a fantastic opportunity to buy down,” Englebrecht told the board.

OID is currently financing the bond at a 5.8 percent rate and as of last week the rate that could be offered was 2.9 percent.

“There’s no risk of going into the market and OID losing any money,” Englebrecht said. “If we don’t meet the bond threshold (for significant savings), we don’t sell the bond.”

The board voted unanimously to work with Wells Fargo for the bond refinance.