Third-party impact fund focus of Glenn-Colusa water sale debate
Chico Enterprise Record - 1/13/03
By Heather Hacking, staff writer

WILLOWS - The environmental review of Glenn-Colusa Irrigation District's 60,000 acre-feet water transfer to Metropolitan Water District in Southern California got the nod last week with a few key clarifications regarding economic impacts and a mitigation account.

John Merz, chairman of the Sacramento River Preservation Trust, urged the board not to make the move without a broader environmental review. Farmers expressed concerns that the transfer would harm the local economy.

The GCID board of directors voted to accept the environmental review, which moves the water deal ahead.

The sale would include fallowing of land, mostly rice fields, and does not include groundwater pumping.

Wednesday night representatives of Glenn-Colusa and Western Canal Irrigation District met with Glenn County Farm Bureau members who had raised concerns about how not growing rice would harm related business like fertilizer and equipment dealers and affect farm labor jobs. These losses are referred to as "third-party impacts."

Both sides agreed the question-and-answer session, which ran 2 1/2 hours, was a good start, but concerns remain.

Larry Domenighini, president of Glenn County Farm Bureau, said he wishes landowners were brought into the discussion earlier on.

Glenn-Colusa board president Don Bransford said it's difficult to bring in all the players at the very beginning when a deal is just a proposal.

He said the farm economy is weak right now. If growers sell water and still receive their government rice subsidies, they'll be earning more than they would selling rice.

Bransford said the water deal can fund land improvements and help keep farming viable in this part of the state.

The water transfer would pay farmers $10 an acre-foot for an option to purchase water by Feb. 15. If the water is moved, farmers would be paid an additional $90 an acre-foot.

Many people have been interested in the idea of third-party impact mitigation funds, which would amount to an additional $5 per acre-foot of water. However, there is disagreement as to who, if anyone, would be harmed by the sale and therefore how the money will be spent.

Glenn-Colusa's attorney, Stuart Somach, delivered a legal opinion that if there are third-party impacts from the sale, the irrigation district is not legally required to avoid or mitigate them.

Somach also clarified that recently fine-tuned legal wording would establish an interest-bearing fund for that $5 an acre-foot payment. The $300,000 would stay under Glenn-Colusa's control and pay for legal defense of third-party claims, monitoring and mitigating environmental and economic impacts.

Glenn-Colusa already has another self-funded mitigation account established during a prior water sale.

Butte and Glenn county farm bureaus recently sparked discussion about the water sales and questioned how much decreased farming would affect businesses dependent upon agriculture.

Some have been looking to this third-party impact money, but have said $5 per acre-foot would not stretch very far.

Thursday Glenn-Colusa board members said although there is not a legal obligation to address third-party issues, there is a moral obligation to the community.

Glenn-Colusa manager Van Tenney said the money will not go to Glenn-Colusa growers, and can be used for things such as studies to further the county's knowledge of underground water.

Other water districts that are also selling water to Metropolitan have not yet decided what they are going to do with their third-party impact funds.

Bransford said Metropolitan put a certain spin on the deal, offering the mitigation funds as a way to show the water giant was concerned with how the water sales affected local communities.

Tim Quinn, the point man for Metropolitan's Northern California negotiations, said during a later interview that it was likely a mistake to call the fund a "third-party mitigation" account.

He said he firmly agrees with local irrigation districts that the land fallowing will only economically benefit Northern California, and that the economy will not take a hit.

So, in retrospect it may have looked bad to say, "we're not harming you" while at the same time offering third-party impact funding, Quinn said.

Although Metropolitan has negotiated water purchases throughout the state for years, this is the first time they have approached Northern California on their own without the help of state or federal water agencies.

This is also the first year that money was offered for third-party impacts.

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