The Morning Report
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In the world of water politics, there are few relationships as fraught as the one between the San Diego County Water Authority and its larger rival, the Metropolitan Water District of Southern California.
The groups, two of the country’s largest water agencies, fought each other again and again this year over policies that affect the water supplies of 19 million Californians.
San Diego relies on Metropolitan for most of its water, which Metropolitan brings into Southern California from Northern California and the Colorado River. San Diego is also Metropolitan’s biggest customer and has seats on Metropolitan’s board, which meets in Los Angeles.
The biggest round in the bout went to San Diego, which won $235 million from Metropolitan earlier this year. A judge ruled that Metropolitan charged too much to deliver some water to San Diego from the Colorado River. Metropolitan will appeal that ruling. So far, the two agencies have spent more than $30 million in legal fees on the case.
That case got a lot of attention, but some smaller fights did not, even though they also involve hundreds of millions of dollars and affect long-term relationships that may determine who has water and who does not.
According to the County Water Authority, its representatives to the Metropolitan Board of Directors did not support about a fifth of the 140 or so actions the board considered in 2015. Over the year, the San Diego delegation also sent 20 letters to the rest of Metropolitan’s board, expressing concerns about some of these actions. Sometimes, San Diego was able to win support from other Metropolitan board members. Often it was not.
Michael Hogan, a County Water Authority representative with a seat on the Metropolitan board, said San Diego’s objections can be irritating to others, but they’re done on behalf of the region’s ratepayers.
“Sometimes we’re trying to improve our relationship up there, but sometimes we’ve got to do what we’ve got to do,” Hogan said.
Here are four disputes from the past year that pitted San Diego against Metropolitan:
San Diego objected to Metropolitan’s $350 million turf rebate program. That money was given away to people and businesses that replace their thirsty lawns with drought-tolerant plants.
Throughout the year, the San Diego delegation complained about such unplanned expenses, noting in May that the turf rebate spending would “leave no funding available to purchase additional water transfer supplies should the drought continue in 2016.”
Metropolitan gets money from taxes and by selling water imported from Northern California and the Colorado River to smaller water agencies in Southern California. When its costs go up, so does the cost of water for most Southern Californians.
San Diego customers benefit from Metropolitan’s turf rebates. But County Water Authority officials said the spending was not only a potentially ineffective way to save water and a subsidy for wealthy homeowners but also fiscally irresponsible.
The rebate program wasn’t Metropolitan’s only unplanned big-ticket item this year. This summer, Metropolitan paid $260 million in cash for thousands of acres of land in the Palo Verde Valley, which comes with top rights to Colorado River water. San Diego supported the purchase, but then opposed Metropolitan’s plans to borrow $250 million on the bond market to refill its coffers.
San Diego’s representatives wrote that the need to borrow was the result of “profligate spending practices over the past several months.”
In theory, Metropolitan would have had more money on hand for the Palo Verde Valley deal and other expenses if it hadn’t done the turf rebate program.
Gary Breaux, Metropolitan’s chief financial officer, said his agency didn’t know the Palo Verde Valley land was available earlier in the year, when the turf rebate program was under discussion.
“I don’t think we impaired our financial situation really at all,” he said.
Metropolitan is now contemplating spending $150 million or more on a major land deal in the Sacramento-San Joaquin River Delta, a deal that San Diego has also questioned.
Surplus Water and the Salton Sea
Besides Metropolitan, the San Diego County Water Authority has another major partner and sometimes frenemy in Southern California: the Imperial Irrigation District in Imperial County.
San Diego is in a decades-long agreement to buy massive amounts of Colorado River water from Imperial. But the two water agencies have begun to tussle over the fate of the Salton Sea, which is turning into an even more briny, dry and desolate pond than it already is, in part because of water being sent by Imperial to San Diego.
Earlier this year, San Diego got into a row over a plan Metropolitan and Imperial worked out: Under the deal, Imperial agreed to send some surplus water to Metropolitan’s system for storage. Metropolitan is expected to return water to Imperial in later years. (A San Diego County Water Authority board member told me he doubts that will happen, and Southern Californians will just use the water without returning it to Imperial.)
San Diego objected to the deal, saying it should have first dibs on any surplus water Imperial has to offer.
Imperial got cross with San Diego for sticking its nose into the deal.
“I’m looking forward to this kind of crap stopping,” Matthew Dessert, an Imperial board member told a San Diego staffer during a public meeting in late October. Dessert said his agency and the San Diego County Water Authority are partners but “we’ve been kind of crappy partners.”
A Deal for Los Angeles
Metropolitan decided to give $15 million to help Los Angeles County get started on what could be one of the largest water-recycling facilities in the world. The facility, if built, would take wastewater and produce up to 150 million gallons a day of drinkable water – about three times as much water as San Diego’s new desalination plant.
There’s now pretty wide agreement that recycled water is the future, especially in drought-prone Southern California. The city of San Diego and several other regional water agencies are speeding up work on their own water-recycling projects.
So what’s wrong with spending some money on Los Angeles’ project? San Diego’s representatives said it’s unclear what benefit San Diego customers would get out of the project. Presumably, new water supplies available in Los Angeles could free up water that would be sent to San Diego, but the San Diego delegation doesn’t buy that argument yet.
“Why not San Diego?” Hogan said. “Why Los Angeles? I think there’s a lot of questions there.”
The Delta Fix
Most of this drama may unfold in 2016, but a fight over the future of the Sacramento-San Joaquin River Delta continued to build all year. Gov. Jerry Brown is pushing an ambitious plan to build two tunnels 150 feet beneath the Delta to help send water from Northern California to Southern California. It’s an expensive project that Metropolitan – and all the Southern Californians who use its water, including San Diegans – would have to pay for.
In one proxy battle over the so-called “Delta Fix,” San Diego objected to Metropolitan’s decision to buy some land in the Delta – land that lay in the path of the proposed tunnels. The land could cost up to $240 million. Metropolitan’s general manager said owning the land now would make it easier to build the tunnels later.
Without outright opposing the whole tunnel project, San Diego County Water Authority officials have sharply questioned it, and the vote against Metropolitan’s plans to buy the Delta land was just another sign of San Diego’s skepticism.
In the meantime, a masked figure recently added fuel to the weird proxy battles between Delta supporters and skeptics.
Paul Weiland, a water attorney in Irvine, sent a Dec. 9 letter to the San Diego County Water Authority on behalf of an anonymous client. He detailed efforts by Water Authority staff that seem aimed at undermining support for the tunnel project. Weiland told me in an email that “One reason for sending it was to draw [Water Authority] board attention to staff actions.”
But the letter also seemed designed to cast San Diego as against the governor’s project, just as Metropolitan was working on a land deal that would make the governor’s project more feasible.
Hogan said it’s premature to think San Diego is against the Delta Fix. But, if the San Diego County Water Authority board had to vote on it today, Hogan said he was not sure what the board would do.
The letter, Hogan said, “creates an intrigue” that will certainly carry into the New Year.