STATE WATER RESOURCES CONTROL BOARD PUBLIC WORKSHOP APRIL 21 - 22, 1998, WORKSHOP ON THE HEARING PROCEDURES AND PROPOSED SETTLEMENT AGREEMENTS FOR THE BAY-DELTA WATER RIGHTS HEARING ---oOo--- RESOURCES BUILDING - FIRST-FLOOR AUDITORIUM SACRAMENTO, CALIFORNIA WEDNESDAY, APRIL 22ND, 1998 9:08 A.M. Reported by: MARY GALLAGHER, CSR #10749 CAPITOL REPORTERS (916) 923-5447 1 APPEARANCES ---oOo--- 2 3 BOARD MEMBERS: 4 JOHN CAFFREY, HEARING OFFICER JAMES STUBCHAER, CO-HEARING OFFICER 5 MARC DEL PIERO MARY JANE FORSTER 6 JOHN BROWN 7 STAFF MEMBERS: 8 WALT PETTIT - Executive Director 9 THOMAS HOWARD - Supervising Engineer VICTORIA A. WHITNEY - Senior Engineer 10 11 COUNSEL: 12 BARBARA LEIDIGH - Senior Staff Counsel 13 AUDIENCE: 14 ALAN B. LILLY 15 DANIEL B. STEINER TIM O'LAUGHLIN 16 KAMYAR GUIVETCHI JAMES R. WHITE 17 EDWARD D. WINKLER FRED S. ETHERIDGE 18 JOHN B. LAMPE MARC E. VAN CAMP 19 JOHN BURKE ALF W. BRANDT 20 STEPHEN H. OTTEMOELLER PATRICK PORGANS 21 DAVE SCHUSTER MICHAEL B. JACKSON 22 DAVID SANDINO VIRGINIA CAHILL 23 JEANNE ZOLEZZI STEVE MACAULAY 24 25 CAPITOL REPORTERS (916) 923-5447 239 1 C O N T I N U E D ---oOo--- 2 APPEARANCES: 3 TOM GRAFF 4 KEVIN O'BRIEN RALF CARTER 5 BILL BABER PAUL SIMMONS 6 ANDREW M. HITCHINGS PATRICK WRIGHT 7 GREG THOMAS NANCEE MURRAY 8 BILL LOUDERMILK FRANK WERNETTE 9 STEVE CHEDESTER ROGER GUINEE 10 THOMAS SHEPHARD REID ROBERTS 11 MICHAEL SEXTON CLIFF SCHULZ 12 GARY BOBKER LOWELL PLOSS 13 DAN GALLERY ALEX HILDEBRAND 14 DANTE JOHN NOMELLINI CYNTHIA KOCHLER 15 JEANNE CAVE RICHARD DENTON 16 MARTHA LENNIHAN ALLEN SHORT 17 KEN ROBBINS PATRICK WRIGHT 18 WILLIAM BABER RICHARD GOLB 19 TIM QUINN JOHN HERRICK 20 21 ---oOo--- 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 240 1 I N D E X 2 ---oOo--- 3 4 PAGE 5 OPENING OF HEARING 242 6 AFTERNOON SESSION 355 7 END OF PROCEEDINGS 503 8 9 PRESENTATIONS: 10 EAST BAY MUNICIPAL UTILITY DISTRICT 243 11 YUBA RIVER SETTELMENT AGREEMENT 281 12 SUISUN MARSH PRESERVATION AGREEMENT 355 13 14 15 ---oOo--- 16 17 18 19 20 21 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 241 1 WEDNESDAY, APRIL 22, 1998, 9:08 A.M. 2 SACRAMENTO, CALIFORNIA 3 ---oOo--- 4 HEARING OFFICER CAFFREY: Good morning and welcome to 5 the continuation of our workshop on agreements pertaining 6 to -- I should say proposed settlement agreements 7 pertaining to the Bay-Delta Water Rights. My name is John 8 Caffrey. I have the honor of serving as Chair for the 9 State Water Resources Control Board. To my immediate left, 10 the audience's right, is Mary Jane Forster. 11 MEMBER FORSTER: Good morning. 12 HEARING OFFICER CAFFREY: Usually next to Ms. Forster 13 on the other side is Board Member Marc Del Piero, who is 14 taking care of some business on behalf of the Chair in 15 another city. Hopefully, he'll be back by this afternoon 16 to join us, if we are still continuing this afternoon. 17 To my immediate right is Board Vice-Chair James 18 Stubchaer, who we announced yesterday, will be co-chairing 19 with me this workshop proceeding as well as the following 20 Water Rights Hearings. And next to Mr. Stubchaer is Board 21 Member John Brown. 22 MEMBER BROWN: Good morning. 23 HEARING OFFICER CAFFREY: At the front table is our 24 Board Senior Counsel, Barbara Leidigh. And next to 25 Ms. Leidigh are two very key managers, engineering managers CAPITOL REPORTERS (916) 923-5447 242 1 in the Delta Proceedings, Mr. Tom Howard and Ms. Victoria 2 Whitney. 3 We thank you all for your continuing attendance. 4 We will dispense with a rereading of the opening statement, 5 it is in the record. I think everybody here is pretty 6 familiar with the procedure. If there are any new faces 7 when you -- if you wish to speak today, when you come up 8 just designate that you're not sure of the procedures and 9 I'd be very happy to explain them to you. 10 This morning we will begin, then, with the 11 presentation of the Mokelumne River Agreement. We had a 12 very thorough presentation and commentary yesterday on the 13 VAMP Agreement. And that was very helpful for the Board 14 and we appreciated all of your -- all of your input from 15 those of you who were here. 16 With that I believe we're going to have 17 Mr. Etheridge join us from the East Bay Municipal Utility 18 District. Good morning, sir, welcome. 19 ---oOo--- 20 EAST BAY MUNICIPAL UTILITY DISTRICT AGREEMENT 21 ---oOo--- 22 MR. ETHERIDGE: Good morning, Mr. Caffrey, Members of 23 the Board. I am Fred Etheridge from the Office of General 24 Counsel of the East Bay Municipal Utility District. The 25 District has entered into a Bay-Delta Settlement with the CAPITOL REPORTERS (916) 923-5447 243 1 CUWA/Ag Delta Exporters concerning East Bay MUD's fair 2 share contribution toward meeting the 1995 Water Quality 3 Control Plan. That settlement contemplates full 4 implementation of that Water Quality Control Plan. 5 With me here today are Mr. Jim Lampe, the 6 District's Director of Water and Natural Resources. And 7 he'll provide a general overview of that settlement. And 8 also as part of our panel are Mr. Ed Winkler of the 9 Metropolitan Water District of Southern California, one of 10 the CUWA/Ag signatories to our settlement. And with that 11 I'll turn it over to Mr. Lampe. 12 HEARING OFFICER CAFFREY: Thank you, Mr. Etheridge. 13 Good morning, Mr. Lampe. And welcome, sir. 14 MR. LAMPE: Good morning, Chairman Caffrey and Board 15 Members. I am John Lampe, Director of Water and Natural 16 Resources for the East Bay Municipal Utility District. In 17 December of 1966, now more than 16 months ago, the East Bay 18 Municipal Utility District entered in a settlement 19 agreement with the CUWA/Ag contractors. 20 The settlement agreement took notice of the fact 21 that our then current negotiations with the resource 22 agencies were leading to the increase -- substantial 23 increase for in-stream flows in the Mokelumne River. And 24 that by virtue of those increase inflow streams in the 25 Mokelumne there would be substantial increase into the CAPITOL REPORTERS (916) 923-5447 244 1 Delta as well. The CUWA/Ag crew analyzed those additional 2 flows and determined that those flows would, in fact, 3 represent the reasonable contribution by the East Bay 4 Municipal Utility District to achieving Water Quality 5 Control Plan for the Delta. 6 My purpose this morning is to brief you on that 7 settlement agreement, provide some specific details 8 associated with it. I have about nine overheads that I'll 9 go through I think in relatively quick fashion. Prior to 10 getting into those overheads, however -- and I noticed 11 yesterday we had a problem with talking and using the view, 12 but if this seems to be working, if everyone can hear I can 13 speak from this location? 14 HEARING OFFICER CAFFREY: Sure. Will these 15 transparencies appear in paper form, in a handout later? 16 MR. LAMPE: It was my understanding they already had. 17 HEARING OFFICER CAFFREY: We do have them. All 18 right. Thank you, very good. 19 MR. LAMPE: I apologize if you don't. 20 HEARING OFFICER CAFFREY: No. No, please don't. I 21 should apologize to you for not realizing that. I just 22 want to make sure that the audience will have them also. I 23 apologize to the audience, I know that the way the room is 24 set up I know that you cannot see the transparencies, but 25 every case where we had a presentation on the screen we CAPITOL REPORTERS (916) 923-5447 245 1 will make sure you all get copies. 2 Thank you, Mr. Lampe, please proceed. 3 MR. LAMPE: Thank you. Before going into the 4 specifics of the settlement agreement, I thought I'd go 5 through two sketches here to establish the context for that 6 subsequent discussion. This first sketch outlines the 7 relationship between the East Bay Municipal Utility 8 District's service area to the Mokelumne watershed. 9 All of the -- well, 95 percent of the water that 10 is served to the 1.2 million people within the East Bay 11 Municipal Utility District's service area comes from the 12 Mokelumne watershed. It's diverted at Pardee Reservoir and 13 taken to the service area through a system of -- 90-mile 14 system of aqueducts. The District also operates Camanche 15 Reservoir, just downstream of Pardee Reservoir. That 16 reservoir is used to reoperate and control for providing 17 sufficient flows for senior water rights and in-stream 18 protection in the Lower Mokelumne River. 19 The next map I have here is to set context to 20 place the Mokelumne watershed within the context of the 21 overall Bay-Delta watershed. Whereas the 1.2 million 22 population in the East Bay service area is about four 23 percent of the State's population, or some five to six 24 percent of the population that is served at least in part 25 from the Bay-Delta watershed. The Mokelumne watershed CAPITOL REPORTERS (916) 923-5447 246 1 itself is about 1.5 percent of the overall Bay-Delta 2 watershed. The unimpaired runoff is about two-and-a-half 3 percent of the entire Bay-Delta watershed. So with that 4 context, I'll then move into describing the settlement 5 agreement. 6 First of all, the status of the settlement 7 agreement, the agreement is in the form of a Memorandum of 8 Understanding. As I indicated earlier, the agreement was 9 actually executed in December of 1966. So that -- 1996, I 10 apologize. 11 HEARING OFFICER CAFFREY: I could read what you 12 meant. 13 MR. LAMPE: But it is already 16 months' standing. 14 The primary provisions of the settlement agreement are that 15 the settlement flows constitute a significant increase 16 above existing fishery flow requirements in the Lower 17 Mokelumne River; that they protect the anadromous fishery 18 and public trust resources of the Lower Mokelumne River. 19 And for that we rely upon the fact that the District has 20 reached agreement with the U.S. Fish and Wildlife Service 21 and the Department of Fish and Game with respect to the 22 in-stream flow issues in the Mokelumne River. 23 That the settlement flows will also result in 24 increase inflow to the Delta, and I will describe the 25 quantities of that and how that's derived a little bit CAPITOL REPORTERS (916) 923-5447 247 1 later in my presentation. And that the settlement flows 2 are sufficient to meet East Bay MUD's responsibility for 3 meeting the Bay-Delta standards specified in the 1995 Water 4 Quality Control Plan. That no additional flows above those 5 in the settlement agreement would be required of East Bay 6 MUD in order to meet the Water Quality Control Plans' water 7 quality control standards; and that implementation of the 8 MOU is subject to both the Federal Energy Regulatory 9 Commission and the State Water Resources Control Board's 10 recognition and adoption of the Mokelumne River Settlement 11 Agreement. 12 The status of the Federal Agency Regulatory 13 proceeding, in March of 1998 East Bay MUD, U.S. Fish and 14 Wildlife Service and the Department of California Fish and 15 Game fully executed our joint settlement agreement for the 16 in-stream issues associated with the Mokelumne River. That 17 joint settlement agreement was then submitted to the 18 Federal Energy Regulatory Commission on March 30th, and it 19 is our understanding from our most recent communications 20 with the Federal Energy Regulatory Commission that we 21 should expect some action by the Commission to endorse 22 these flows by summer of this year. 23 Benefits of the settlement agreement: Additional 24 flows to the Lower Mokelumne River. The settlement flows 25 represent a balance approach balancing fishery and CAPITOL REPORTERS (916) 923-5447 248 1 ecosystem needs with water supply demands, that was the 2 nature of the agreement that was established with the 3 resource agencies; and that the increase inflow to the 4 Delta during dry and critically dry periods. Let me 5 indicate what that increase inflow to the Delta resulting 6 from these increase in-stream flows will be. 7 In dry years -- and this is based on the 8 Sacramento water year index, in dry years there would be an 9 increase over existing conditions of 28,700 acre feet, and 10 in critically dry years an increase of 27,300 acre feet. 11 This graph describes how those flows are derived. On the 12 left side for the Mokelumne River is described the existing 13 in-stream flow requirements, 13,000 acre feet essentially 14 from critically dry through all other year types. 15 In terms of the settlement agreement, which has 16 just recently been executed by the Department of Fish and 17 Game, and U.S. Fish and Wildlife Service, and ourselves as 18 you can see there are significant increases in the 19 in-stream flows. In critically dry years on the Mokelumne 20 River those flows would increase to 22,500 acre feet. In 21 below normal -- in dry years, those would increase to 22 65,000 acre feet. In below normal years they would range 23 between 89 and 125,000 acre feet. And then in the wetter 24 years they would range from 129 to 165,000 acre feet. So 25 as you can see there are substantially increased in-stream CAPITOL REPORTERS (916) 923-5447 249 1 flows; thus, the genesis of the increase inflow to the 2 Delta during dry and critically dry periods. 3 HEARING OFFICER CAFFREY: Yes, sir. 4 MEMBER BROWN: John, the 13,000 that's the 5 requirement today? 6 MR. LAMPE: That's correct. That's our 1961 7 agreement with the Department of Fish and Game. 8 MEMBER BROWN: Okay. I had the impression they had 9 changed that sometime back and increased those rates. 10 That's what is existing now? 11 MR. LAMPE: No. We have voluntarily begun to flow 12 this, essentially, this regime, in fact, since 1993. 13 MEMBER BROWN: Okay. 14 MR. LAMPE: So since 1993 we have been voluntarily 15 flowing this flow. 16 MEMBER BROWN: Okay. That's it. 17 MR. LAMPE: Just two additional charts here. These 18 are the parties to the settlement agreement: The 19 Metropolitan Water District of Southern California, Kern 20 County Water Agency, Tulare Lake Basin Water Storage 21 District, the State Water Contractors, Westlands Water 22 District, San Luis and Delta/Mendota Water Authority, Santa 23 Clara Valley Water District, and of course the East Bay 24 Water Utility District. 25 In conclusion, the settlement results in CAPITOL REPORTERS (916) 923-5447 250 1 additional flows to benefit the Delta and the Lower 2 Mokelumne River. And for these reasons the settlement is a 3 reasonable contribution of the East Bay MUD toward meeting 4 the Water Quality Control Plan. CUWA/Ag exporters who have 5 been affected by the project's voluntary provision of the 6 flows to meet with the Water Quality Control Plan have also 7 reviewed the settlement flows and have found them to be a 8 reasonable East Bay MUD contribution to the Water Quality 9 Control Plan. That concludes my remarks. 10 HEARING OFFICER CAFFREY: Thank you, Mr. Lampe. 11 Mr. Stubchaer has a question. 12 CO-HEARING OFFICER STUBCHAER: Question: Do you have 13 any time distribution through the year of these release 14 flows other than the additional release of 200 csf that's 15 on top of the normal and wet? 16 MR. LAMPE: Yes, there is a specific schedule by 17 month for release of these flows. 18 CO-HEARING OFFICER STUBCHAER: Is that coordinated 19 with the Delta, or is that mainly for the in-stream? 20 MR. LAMPE: It's focused on the in-stream flows, yes. 21 22 CO-HEARING OFFICER STUBCHAER: Thanks. 23 HEARING OFFICER CAFFREY: Mr. Winkler is going to 24 make a presentation? 25 MR. ETHERIDGE: Yes. CAPITOL REPORTERS (916) 923-5447 251 1 HEARING OFFICER CAFFREY: Good morning and welcome. 2 MR. WINKLER: Good morning, Mr. Chairman and Members 3 of the Board. My name is Ed Winkler. I'm with the 4 Metropolitan Water District. And very briefly I wanted to 5 say that on behalf of the export interests we have looked 6 at the additional flows that Mr. Lampe is referring to on 7 the Lower Mokelumne. And we independently analyzed that 8 and found that, indeed, on the order -- our averages were 9 showing 22,000 acre feet of additional dry-year period flow 10 for the Delta. 11 And that water would be useful to the projects in 12 helping offset meeting the standard for the Water Quality 13 Control Plan. And, in fact, that number compared to the 14 small basin of the Mokelumne is, in fact, actually exceeds 15 our criteria that we're using in other negotiations. So, 16 indeed, we do think that is a reasonable contribution. 17 HEARING OFFICER CAFFREY: All right. Thank you very 18 much, Mr. Winkler. Let me check with the Board Members to 19 see if there are further questions before we go to our 20 commenters and also our staff. 21 Any questions from the Board Members? Nothing at 22 this time. Anything from staff? Mr. Howard. 23 MR. HOWARD: You know, it's sort of a combination of 24 a question and a comment. We had analyzed a number of 25 alternatives in the Draft EIR, three of those alternatives CAPITOL REPORTERS (916) 923-5447 252 1 affected East Bay MUD. They were the two water right 2 priority alternatives and watershed alternative. And each 3 of those had water supply impacts associated with them. 4 Now, the question I have sort of deals with -- 5 when I look at the San Joaquin Water Agreement it has a 6 specific provision that says that, basically, the 7 Department and the Bureau guarantee that if the Board were 8 to establish some other allocation methodology that they 9 would pick up the difference between the VAMP and what the 10 Board is requiring. 11 There is, on the other hand, at least I don't see 12 in the East Bay MUD Agreement any guarantor that, if for 13 example, the Board were to pick alternative three, four, or 14 five that some party, the Department, the Bureau or someone 15 else would pick up the difference between the agreement and 16 the flows that this Board would require from East Bay MUD 17 using that methodology. 18 My question is: Is there a guarantor here, or 19 is -- if not, if the Board were to pick those alternatives, 20 those responsibilities would have to be shifted on to 21 somebody else if the standard is not met. 22 MR. WINKLER: That's an excellent question. And 23 you're right, in this particular agreement that's not 24 exactly specified. But keep in mind that from the export 25 interests standpoint it is very much our intent on all of CAPITOL REPORTERS (916) 923-5447 253 1 these agreements that what you said would be true. That, 2 in fact, in all these agreements the Department and the 3 Bureau upon agreement from them would be guaranteeing that 4 whatever additional -- let's say, for example, East Bay MUD 5 came out with a higher allocation, that that allocation 6 would then fall on the backs of the projects. Or if it 7 were lower, then it just meant that the deal meant that the 8 projects made out better. 9 But in the end, the key here is to guarantee that 10 any remainder of responsibility would not be shifted to any 11 other entities. That's absolutely fundamental in all the 12 negotiations that we're engaged in. 13 MR. HOWARD: Will the Bureau, the Department be 14 signing the agreement, then, in your opinion? 15 MR. WINKLER: Absolutely, the Department and Bureau 16 have to be key on all of these. It's their water rights 17 that are before this Board. 18 MR. HOWARD: Thank you. 19 HEARING OFFICER CAFFREY: Anything else? All right. 20 Thank you very much, gentlemen. 21 MR. ETHERIDGE: Thank you very much. 22 HEARING OFFICER CAFFREY: Appreciate your 23 presentation. And we will now go to the list of blue 24 cards -- rather the stack of blue cards that we had 25 yesterday. Mr. Stubchaer and I took the liberty of CAPITOL REPORTERS (916) 923-5447 254 1 rearranging the cards so that we don't get too locked in to 2 any kind of a format. I hesitate to use the word, 3 "shuffle," but I guess that's actually what we did do with 4 the cards. 5 So I'll read off, as yesterday, the names in the 6 order that they are now in. And, please, indicate whether 7 you -- whether or not you wish to comment. Steve 8 Ottemoeller. 9 MR. OTTEMOELLER: No comment. 10 HEARING OFFICER CAFFREY: No comment. Dave Schuster? 11 MR. SCHUSTER: No comment. 12 HEARING OFFICER CAFFREY: Michael Jackson? 13 MR. JACKSON: No comment at this time. 14 HEARING OFFICER CAFFREY: No comment at this time. 15 Alf Brandt. 16 MR. BRANDT: Yes. 17 HEARING OFFICER CAFFREY: Good morning, sir. Welcome 18 back. 19 MR. BRANDT: Good morning. Thank you. My name is 20 Alf Brandt. I am Assistant Regional Solicitor for the 21 Department of the Interior and I have a couple of comments. 22 First one is more focused from the Fish and Wildlife 23 Service that just wants to make clear a couple facts about 24 the underlying settlement agreement. So not the MOU that 25 they are talking about today, presenting to you today, but CAPITOL REPORTERS (916) 923-5447 255 1 the underlying settlement agreement. 2 First of all, it's apparently good news that we 3 understand that FERC will be approving this agreement, 4 perhaps, this summer. The settlement agreement, the 5 underlying settlement agreement does not take effect until 6 that happens. We signed this just in March and issued a 7 biological opinion as part of that. 8 And a couple of things I want to clarify, because 9 I think it goes to your question, Mr. Stubchaer, about what 10 did we agree to? What does the Fish and Wildlife Service 11 agree to? And in the agreement it only specifies for the 12 in-stream flows, which is consistent with what they told 13 you. But I just wanted to make clear, it specifically, and 14 this was negotiated, it did not include flows for the 15 Delta. 16 So this is not intended to provide a net flows for 17 the Delta. And, in fact, the Service in its biological 18 opinion also stated that the flows identified in the 19 agreement were not developed for fishery resources in the 20 Delta. And those issues will be set aside. And that's 21 actually a quote from the biological opinion. So that's 22 just sort of one perspective on the Fish and Wildlife 23 Service. 24 Also, answering your question, Mr. Howard, the 25 Bureau of Reclamation at this point has not taken a CAPITOL REPORTERS (916) 923-5447 256 1 position. And this is one of several agreements that we 2 are just now getting. I first saw this agreement about a 3 week and a half ago. I heard about it a couple months ago. 4 And we've just been getting involved. And the 5 representations that, you know, that at some point we're 6 going to sign it, that's fine. We'll be applying those 7 criteria that we gave you yesterday and looking at it and 8 seeing how it works. But at this point we are not, and we 9 have not signed on, or agreed to be -- in providing the 10 backstop, to use that word that's been used so often 11 yesterday, we've not at this point agreed to that. So just 12 for clarification. Thank you. 13 HEARING OFFICER CAFFREY: Thank you, Mr. Brandt. 14 Ms. Forster. 15 MEMBER FORSTER: I have a question probably for East 16 Bay MUD. I'm confused if this agreement is basically to 17 satisfy in-stream flows for fish, you're making the 18 agreement also to help with the Delta, or not? 19 MR. ETHERIDGE: Fred Etheridge for East Bay MUD. The 20 agreement, the joint settlement agreement in the FERC 21 proceeding is for the Lower Mokelumne River and its 22 ecosystem. The District believes that -- and also as 23 Mr. Lampe showed, provides additional new flows for the 24 Delta. So it's our agreement in the MOU with the CUWA 25 exporters's statement that that is East Bay MUD's fair CAPITOL REPORTERS (916) 923-5447 257 1 share contribution for the Delta as well. And as 2 Mr. Brandt said, that may not be the position of the 3 resource agencies as to the Delta, but it is East Bay MUD's 4 and CUWA/Ag's exports position. 5 MEMBER FORSTER: And tell me where it says that in 6 your MOU, what page? 7 MR. ETHERIDGE: On page 2, Section 2, the Flow 8 Requirements. "The parties further agree that the flow 9 requirements are sufficient to meet EBMUD's responsibility 10 for meeting the Bay-Delta standards specified in the Plan," 11 that's the Water Quality Control Plan. "And no additional 12 flows shall be required of East Bay MUD in order to meet 13 the Plan's Bay-Delta water quality standards." 14 HEARING OFFICER CAFFREY: Thank you, Ms. Forster. 15 Mr. Brown. 16 MEMBER BROWN: The 1961 agreement that you have 17 that's with Fish and Game -- 18 MR. ETHERIDGE: That's correct. 19 MEMBER BROWN: -- for 13,000 acre feet? 20 MR. ETHERIDGE: That's correct. 21 MEMBER BROWN: And they haven't changed that 22 agreement since then? 23 MR. ETHERIDGE: In the early -- in the drought, in 24 the late '80s early '90s drought we entered one, two 25 consecutive one-year Memorandums of Understandings just for CAPITOL REPORTERS (916) 923-5447 258 1 those years. I believe it's '90/'91 and '91/'92, could be 2 wrong, but it's two single MOUs. And it was only one-year 3 duration. The current existing flow standard for East Bay 4 MUD on the Mokelumne River still remain as the 1961 5 agreement. That's true for both the District's water 6 rights granted by this Board and our FERC license. 7 MEMBER BROWN: Okay. And Mr. Lampe said you 8 voluntarily increased that flow. When did you start doing 9 that? 10 MR. ETHERIDGE: We voluntarily -- in the State 11 Board's Mokelumne River proceeding, the District made an 12 offer to the Board of its Lower Mokelumne River Management 13 Program, LMRMP. The District voluntarily began releasing 14 those flows in 1993. Mr. Lampe referenced these settlement 15 flows in the FERC proceeding which were first agreed to, in 16 forms of principles, in early 1996. At that time, just 17 over two years ago, the District voluntarily began 18 releasing those higher settlement flows. 19 MEMBER BROWN: And how much were those? 20 MR. ETHERIDGE: Those are the ones that were 21 displayed on the bar graphs that Mr. Lampe put up on the 22 overhead. 23 MEMBER BROWN: And that started two years ago? 24 MR. ETHERIDGE: That started in March of 1996, that's 25 correct. So you'd have a period from 1993 through March of CAPITOL REPORTERS (916) 923-5447 259 1 '96 where the District voluntarily released the LMRMP 2 flows. And then from March of '96 through today, the 3 District voluntarily released the JSA -- the Joint 4 Settlement Agreement flows. 5 MEMBER BROWN: Thank you. 6 MR. ETHERIDGE: Thank you. 7 HEARING OFFICER CAFFREY: Thank you, Mr. Etheridge. 8 MR. HOWARD: Mr. Caffrey? 9 HEARING OFFICER CAFFREY: I'm sorry. Ms. Leidigh, 10 you have a question -- oh, Ms. Whitney. 11 MS. WHITNEY: Mr. Etheridge, is it your intention 12 that the Board would amend the East Bay MUD's water rights 13 permits for Camanche and Pardee to include these new flow 14 objectives? 15 MR. ETHERIDGE: We were intending that the Board 16 would accept and adopt the MOU settlement reached with the 17 CUWA/Ag exporters. Much like when the District was granted 18 its Camanche rights from the State Board in the late 1950s, 19 there was a condition in those rights that the District 20 reach agreement with the California Department of Fish and 21 Game on fish and flows. And the District subsequently did 22 that. And that's the 1961 Agreement. So we would look 23 towards a similar condition here in the Bay-Delta which the 24 District would reach an agreement, which we've done in the 25 settlement. CAPITOL REPORTERS (916) 923-5447 260 1 MR. WRIGHT: So there would be a condition in your 2 permits and -- 3 MR. ETHERIDGE: Right. 4 HEARING OFFICER CAFFREY: All right. Thank you, sir. 5 MEMBER FORSTER: I just want to clarify one thing. 6 So what you're saying is your water right permits would 7 reflect this agreement? 8 MR. ETHERIDGE: That's correct, in the form of the 9 condition I just discussed. 10 MEMBER FORSTER: Okay. 11 HEARING OFFICER CAFFREY: All right. Thank you, 12 Mr. Etheridge. 13 MR. ETHERIDGE: Thank you. 14 HEARING OFFICER CAFFREY: David Sandino representing 15 the Department of Water Resources. Good morning, sir, 16 welcome back. 17 MR. SANDINO: Good morning. How are you this 18 morning? 19 HEARING OFFICER CAFFREY: Fine. Thank you. 20 MR. SANDINO: I'm David Sandino on behalf of the 21 Department of Water Resources. The Department supports 22 this settlement offered to the Board today. We reviewed it 23 and find it acceptable. I'm coming up here mainly to 24 respond to Mr. Howard's question about whether the 25 Department would be willing to act as a guarantor. CAPITOL REPORTERS (916) 923-5447 261 1 And the Department is willing to act as a backup, 2 so to speak, if the Board should allocate a higher 3 responsibility on East Bay MUD than what is proposed by the 4 settlement. The contractual details of this has not been 5 worked out yet, but we envision an agreement will be worked 6 out shortly between the Department and the Bureau and East 7 Bay MUD and any other parties that would be appropriate. 8 Thank you. 9 HEARING OFFICER CAFFREY: Thank you, Mr. Sandino. 10 Are there questions before Mr. Sandino returns to his seat? 11 MEMBER BROWN: Pretty clear. 12 HEARING OFFICER CAFFREY: Sounds clear to me. Thank 13 you, sir. 14 Virginia Cahill? Jeanni Zolezzi? Tim O'Laughlin? 15 Good morning, sir, welcome back. 16 MR. O'LAUGHLIN: On behalf of the River Group 17 Authority we would make the following comments: We did not 18 participate in these settlement discussions. We had just 19 recently received the settlement. We will review the 20 settlement and we will provide our comments to the State 21 Water Resources Control Board at a later date. 22 Thank you. 23 HEARING OFFICER CAFFREY: Thank you, Mr. O'Laughlin. 24 Steve Macaulay? 25 MR. MACAULAY: No comment. CAPITOL REPORTERS (916) 923-5447 262 1 HEARING OFFICER CAFFREY: No comment. Tom Graff is 2 not here today, but we will always read his name. 3 MEMBER FORSTER: Did we find out where he went today? 4 HEARING OFFICER CAFFREY: Mr. Del Piero was very 5 curious, but I don't think we were ever able to find out. 6 Kevin O'Brien? 7 MR. O'BRIEN: No comment. 8 HEARING OFFICER CAFFREY: No comment. Department of 9 Fish and Game? Good morning, sir, and welcome to you. 10 MR. WHITE: Good morning, Mr. Chairman, Members of 11 the Board. My name is Jim White. I'm an Environmental 12 Specialist with the Department in the Environmental 13 Services Division and I've worked on Central Valley and 14 Bay-Delta water issues for a number of years. I'm speaking 15 today from the exhibit that we submitted to you yesterday, 16 the Department's -- Mr. Loudermilk's statement. 17 HEARING OFFICER CAFFREY: All right, sir. 18 MR. WHITE: And I have a very brief comment on these. 19 The settlement agreement follows along the lines of 20 Mr. Brandt's statement on behalf of Fish and Wildlife 21 Service. 22 "The Department of Fish and Game, U.S. Fish and 23 Wildlife Service and East Bay MUD entered into a joint 24 settlement agreement for the narrow purpose of settling 25 issues then pending -- CAPITOL REPORTERS (916) 923-5447 263 1 THE COURT REPORTER: I'm sorry. Could you slow down 2 just a little bit? 3 MR. WHITE: I'm sorry. "Entered into a joint 4 settlement agreement for the narrow purpose of settling 5 issues then pending before your Board and FERC regarding 6 East Bay MUD's obligation to protect fishery resources in 7 the Mokelumne River. 8 "The joint settlement agreement was not intended 9 by DFG to have an affect beyond that stated in the 10 agreement and was never intended to apply East Bay MUD's 11 obligation to contribute to meeting the Bay-Delta water 12 quality standards. Thus, the DFG does not believe that the 13 East Bay MUD-CUWA/Ag agreement necessarily represents East 14 Bay MUD's full and fair contribution to meeting the 15 Bay-Delta Water Quality Control Plan objectives." 16 This issue was specifically discussed during 17 negotiations and the agreement that we reached did not 18 address it. Thank you. 19 HEARING OFFICER CAFFREY: All right. Thank you, 20 Mr. White. Are there questions from the Board Members? 21 Anything from the staff? All right. Thank you for being 22 here, sir -- hang on a second. 23 MEMBER BROWN: Did you have a figure of something 24 different than the 25 -- or the 27, 28,000 acre feet? You 25 said that's not enough to meet the requirements. CAPITOL REPORTERS (916) 923-5447 264 1 MR. WHITE: Essentially what I said is that in those 2 negotiations in respect to the flow needs in the river even 3 in the Delta were not considered. 4 MEMBER BROWN: Were not considered -- 5 MR. WHITE: And the settlement agreement did not 6 address them. 7 MEMBER BROWN: I'm sorry, Mr. Chairman. I don't 8 understand. 9 HEARING OFFICER CAFFREY: I think as I understood the 10 presentation on the agreement, they were -- the agreement 11 is primarily to deal with problems on the Lower Mokelumne, 12 but it is clear to, at least those who are familiar with 13 the agreement, that it also has some beneficial effects on 14 the Delta. 15 What I believe what you are saying, Mr. White, is 16 that there -- that was not specifically negotiated, nor is 17 there verifying documentation, perhaps, that that is the 18 case at least from the point of view of the Department of 19 Fish and Game? 20 MR. WHITE: That's correct. We're not making a 21 statement one way or the other. 22 MEMBER BROWN: So you're not saying it is or isn't, 23 you just don't know right now. 24 MR. WHITE: And we're saying that it was not part of 25 what we had previously negotiated and settled in this CAPITOL REPORTERS (916) 923-5447 265 1 matter. 2 MEMBER BROWN: Thank you, Mr. White, I understand 3 now. 4 HEARING OFFICER CAFFREY: My interpretation -- and I 5 don't mean to put words in anybody's mouth and please stand 6 up and correct me if I'm wrong, but at least up to this 7 point I have interpreted the statements from the two or 8 three parties they are not supporting the agreement. They 9 seem to be, at least at this stage, non-prejudicial, 10 because it seemed as though they were saying, "We really 11 haven't had a chance to review, or cogitate on it -- to 12 review the agreement, or cogitate on it. So, that's how I 13 interpreted it. Please, let me know if I'm wrong. 14 All right. All right. Thank you, Mr. White. 15 MR. WHITE: Thank you. 16 HEARING OFFICER CAFFREY: Appreciate you being here. 17 Ralf Carter. Phil Baber. 18 MR. BABER: No comment, Mr. Chairman. 19 HEARING OFFICER CAFFREY: Thank you, sir. Paul 20 Simmons, or anybody here for Mr. Simmons, he was not able 21 to be here yesterday. 22 MR. HITCHINGS: I don't believe he has a comment. 23 This is Andrew Hitchings. 24 HEARING OFFICER CAFFREY: Mr. Hitchings, thank you, 25 sir. Maybe we didn't shuffle as well as we thought, CAPITOL REPORTERS (916) 923-5447 266 1 because you're still together. And we're not even using 2 paper clips, Mr. Hitchings. Do you have a comment? 3 MR. HITCHINGS: No comment. Thank you. 4 HEARING OFFICER CAFFREY: All right. Thank you, sir. 5 Patrick Wright. Mr. Wright is not here today. Greg 6 Thomas? Alan Lilly? 7 MR. LILLY: No comment. 8 HEARING OFFICER CAFFREY: Thank you, sir. Steve 9 Chedester? Mr. Chedester is not here. I neglected to 10 write down the correction that this gentleman gave me on 11 his name. I'm having difficulty reading it. It's not the 12 difficulty of pronunciation, it's just my eyes and a 13 combination of the printing. It's Roger -- starts with a 14 "G," from -- he's a fisheries biologist from U.S. Fish and 15 Wildlife. 16 MR. GUINEE: It's Roger Guinee, Mr. Caffrey. 17 HEARING OFFICER CAFFREY: Guinee? 18 MR. GUINEE: Yes, sir. And no comment. 19 HEARING OFFICER CAFFREY: Thank you, sir. Thomas 20 Shephard. 21 MR. SHEPHARD: No comment. 22 HEARING OFFICER CAFFREY: Thank you, sir. Reid 23 Roberts? Apparently not here today. Michael Sexton. 24 Here's Mr. Sexton. 25 Good morning, sir. Welcome to you. CAPITOL REPORTERS (916) 923-5447 267 1 MR. SEXTON: Good morning, Mr. Caffrey, Members of 2 the Board, my name is Michael Sexton. These comments are 3 delivered solely on behalf of some Feather River diverters, 4 the Western Canal Water District, the Joint Water 5 District's Board made up of Richvale Irrigation District, 6 the Butte Water District, Biggs West-Gridley Water 7 District, and Sutter Extension Water District. 8 Each of these districts have contracts with the 9 Department of Water Resources, settlement contracts 10 executed starting in 1969 and before. And the districts 11 take very seriously both Mr. Winkler's and Mr. Sandino's 12 comments. This agreement is not intended to shift 13 responsibility for Delta flows on to any other entity. 14 We haven't looked at the agreement in detail, and, 15 of course, we'll be reserving our right to comment if it is 16 demonstrated that the agreement does, in fact, shift the 17 burden on to these other water users. Thank you, sir. 18 HEARING OFFICER CAFFREY: Thank you, Mr. Sexton. 19 Questions of Mr. Sexton from the Board Members, or staff? 20 CO-HEARING OFFICER STUBCHAER: I just have a comment. 21 HEARING OFFICER CAFFREY: Mr. Stubchaer. 22 CO-HEARING OFFICER STUBCHAER: I understood the 23 condition apply only to Mokelumne and not the Feather. I 24 didn't think it was based -- perhaps, I'm mistaken, the 25 condition Mr. Winkler said about the Department -- and Mr. CAPITOL REPORTERS (916) 923-5447 268 1 Sandino said about assuming responsibility. I'm not making 2 that very clear. 3 There was a question about whether or not the 4 projects would assume the backup responsibility for meeting 5 Delta Water Quality Standards. And the answer was: Yes. 6 But I took that only in the context of the Mokelumne River 7 not the Feather River. 8 MR. SEXTON: That is our concern, Mr. Stubchaer, is 9 that the responsibility not then shift over to other 10 Department of Water Resources contracts. 11 MEMBER BROWN: Your concern is DWR might be giving 12 away your water? 13 MR. SEXTON: Very well put, Mr. Brown. 14 HEARING OFFICER CAFFREY: That's the quick way of 15 saying it, Mr. Brown. All right. Thank you, Mr. Sexton. 16 Cliff Schulz. Good morning, sir, welcome back. 17 MR. SCHULZ: Good morning. Cliff Schulz, Kern County 18 Water Agency. Just quickly on the position of the export 19 group under continuing negotiations with East Bay MUD -- 20 and I'm going to be making a fairly detailed statement 21 about this as part of the Yuba Agreement. 22 It has always been our position as we went into 23 these negotiations that if an in-basin user was providing 24 new water after the Accord was -- that they shouldn't be 25 double rationed. In effect, we did look at -- we CAPITOL REPORTERS (916) 923-5447 269 1 recognized in our negotiations that the agreement with Fish 2 and Wildlife Service and Fish and Game had nothing to do 3 with the Delta. But we also knew from a post-Accord 4 standpoint it was going to provide water to the Delta. We 5 also knew the timing wasn't set up for the Delta. We also 6 knew, again, that we had enough control with the system 7 with reservoirs, releases, and how we pump, that we can 8 make it useful for the Delta. So we looked at it from how 9 useful it was when it came down to their agreement. 10 So, obviously, if everything else we do in the 11 Delta, we can use those flows when they come down for 12 Mokelumne purposes. And that was part of the analysis that 13 we did. And the backstop issue is important. In all the 14 agreements, and you'll hear a lot more about this, is we 15 had the backstop, all of these agreements, because it is a 16 settlement agreement. If we cut a good deal, we're getting 17 more water than we should have. If we cut a bad deal we're 18 getting less, but that's the nature of the settlement. We 19 don't know whether it -- and it's impossible to know in 20 this situation exactly what's going to happen in that 21 respect. 22 But it was absolutely imperative that we set up 23 the dynamic so that if this Board decided that East Bay 24 MUD's responsibility was 30,000 instead of 22, that the 25 8,000 didn't get shifted to other Sacramento Valley water CAPITOL REPORTERS (916) 923-5447 270 1 users. We can't have that. And as you'll hear from us 2 quite a bit as we go through these Sacramento River 3 Agreement that is our intent. And we would have -- East 4 Bay MUD is a very early agreement and we really haven't 5 worked out all the details. We have absolutely no problem 6 if there was a State Board order, or if we probably could 7 amend the MOU to put that provision explicitly in it. 8 HEARING OFFICER CAFFREY: Thank you, Mr. Schulz. 9 Questions of Mr. Schulz? 10 MEMBER BROWN: Who are you speaking on behalf of, 11 Mr. Schulz? 12 MR. SCHULZ: Well, I always represent the Kern County 13 Water Agency. Lawyers have trouble representing more than 14 one client, but I've been involved in every Sacramento and 15 San Joaquin River negotiation on behalf of most of the 16 export groups for the last three years. So -- 17 MEMBER BROWN: Just pick one. 18 MR. SCHULZ: Yeah, pick one. 19 MEMBER BROWN: All right. Thank you. 20 HEARING OFFICER CAFFREY: Thank you, Mr. Schulz. 21 Gary Bobker? I don't believe Mr. Bobker is here. Lowell 22 Ploss. 23 MR. PLOSS: No comment. 24 HEARING OFFICER CAFFREY: Thank you, sir. Dan 25 Gallery. Good morning, Mr. Gallery. Welcome back. CAPITOL REPORTERS (916) 923-5447 271 1 MR. GALLERY: Good morning, Mr. Chairman. Thank you. 2 Just preliminarily I would like to point out that this 3 Settlement Agreement on the Mokelumne River provides that 4 it's going to put additional flows into the Lower Mokelumne 5 River. And if you look at the map of the Delta, the Lower 6 Mokelumne River is really a part of the Delta. The 7 Mokelumne divides into two branches west of I-5 and the 8 north and south branch reunite and flow into the San 9 Joaquin River. But really the lower ten miles or so of the 10 Lower Mokelumne River is in the Delta, part of the Delta. 11 Now, I'm here just with some comments this morning 12 on behalf of Woodbridge Irrigation District, which is 13 downstream on the Mokelumne. We're approximately 20 miles 14 downstream from the Camanche Reservoir where these releases 15 are made. And we have the Woodbridge Dam in the Mokelumne 16 River is where we divert water. Woodbridge and its 17 predecessors have been diverting water out of the Mokelumne 18 since the 1890s. We have pre-1900 water rights. The dates 19 of our initial appropriation was in 1896. 20 So the flows that are being talked about in this 21 East Bay Settlement are flows that come past Woodbridge 22 Dam. Woodbridge is a -- its total gross area is about 23 50,000 acres, and historically it has diverted upwards of 24 100,000 acre feet of water out of the Mokelumne River for 25 irrigation within its boundaries. CAPITOL REPORTERS (916) 923-5447 272 1 It entered into an agreement with East Bay MUD in 2 1965 that provided, in effect, that Woodbridge would have a 3 guaranteed base supply of 60,000 acre feet per year under 4 its old water rights, plus some interim additional water of 5 about 60 -- of about another 50,000 acre feet of water. So 6 during the '70s and back in that period of time the 7 District was diverting about 100,000 acre feet of water out 8 of Woodbridge for its needs. 9 The interim water supply that East Bay MUD put up, 10 the additional over and above the 60,000 was to last until 11 the Folsom South Canal came on-line. Well, that never did 12 happen. And the interim water that East Bay MUD was 13 providing was cut off too, because East Bay MUD's needs 14 were growing and so it took it. So for the past several 15 years we've been down 60,000 acre feet of guaranteed base 16 supply, and that drops down to 39,000 acre feet in dry 17 years. We have, however, taken more than 60,000 acre feet 18 because the additional water has been in the river. 19 Now, under the East Bay MUD Settlement -- and 20 we're not a party to it, it -- as Mr. Lampe showed, he's 21 going to be putting additional water in the river over -- 22 into the Lower Mokelumne River, which has not been 23 available in the past and some of that water we have taken. 24 So for this agreement to work, Woodbridge is -- because it 25 has the dam, it's the main diversion below East Bay MUD's CAPITOL REPORTERS (916) 923-5447 273 1 Camanche, for this agreement to work Woodbridge is going to 2 have to cut back and limit itself to these base contract 3 amounts: 60,000 acre feet in normal years and only 39,000 4 in dry years -- 5 MEMBER BROWN: 50,000 acres? 6 MR. GALLERY: I'm sorry? 7 MEMBER BROWN: For 50,000 acres? 8 MR. GALLERY: Yeah. And actually, Mr. Brown, we 9 don't irrigate the total -- we don't irrigate the total 10 50,000 acres. See, that's our gross boundary. Actually, 11 on a year-to-year basis the amount we actually irrigate 12 with surface water is close to 15,000 acre feet. 13 The 60,000 that's in our contract really only 14 amounts to about 55,000, because we have to use half of it 15 before July 1. And so that -- and we can't use half of it 16 before July 1, so we can only prepare to irrigate -- we can 17 only gear up to irrigate enough water -- land with surface 18 water after July 1. What it amounts to is the amount we 19 can effectively use under that for surface irrigation is 20 only about 55,000 acre feet. 21 But what happens is that our canals, we have about 22 a hundred miles of canals. And we lose 25 to 30 percent of 23 that water that we divert in seepage and percolation into 24 the ground. And what we're doing is we're replenishing the 25 groundwater base in there. We're in the East San Joaquin CAPITOL REPORTERS (916) 923-5447 274 1 Water Basin, which is overdrafted. So what this extra 2 water has meant to us that's been coming down the river is 3 that we're able to replenish the groundwater supply; and 4 the farmers within our District, about more than half of 5 that irrigation in there comes from groundwater. Our 6 surface water deliveries are only part of it and the rest 7 of it is irrigation of groundwater. 8 So what this means to us is that we're going to -- 9 if they loop off these flows over 60,000 acre feet when 10 they're available, we're not going to be able to take it. 11 If we comply with this agreement, we're not a party to it, 12 but the agreement has some provisions in it for 13 stakeholders. It invites my district to come in as a 14 stakeholder and work on the river with this agreement. 15 Woodbridge's position really is: Here, we're 16 willing to go ahead and go along with this agreement and 17 not take the additional water that we could take under our 18 water rights. See, the phase amount of our water rights 19 were over 400,000 -- I mean 400 second feet. But if we 20 limit ourselves and go along with this agreement, we 21 will -- we will -- in effect, we would propose that that be 22 our contribution to the Bay-Delta Requirements. 23 So our plan is that if this agreement is 24 acceptable to this Board and to the other parties to it, we 25 would -- we would propose to become a stakeholder and limit CAPITOL REPORTERS (916) 923-5447 275 1 our diversions, and also do some other things that would 2 have to be done to make this work. One of the major things 3 it that what we're proposing to do is rebuild the fish 4 ladder at Woodbridge Dam. It's about a 5 twelve-million-dollar project. And so we have made 6 application for Prop 204 funds to go ahead and rebuild that 7 fish ladder. And we have to do other things to make this 8 agreement work as well. That's our plan. 9 If this is acceptable, and we think it provides 10 not only -- takes care of the Lower Mokelumne River habitat 11 but that it does provide additional water to the Delta, we 12 think, in that sense, we're supportive of it and we 13 encourage the Board to look at it favorable. 14 HEARING OFFICER CAFFREY: Thank you, Mr. Gallery, for 15 your commentary. Anything from the Board Members? 16 Mr. Brown. 17 MEMBER BROWN: Let me see if I understand this, 18 Mr. Gallery. You have 60,000 acre feet base water supply 19 that is often, I guess, augmented with an interim supply of 20 maybe 50,000 acre feet when water is available? 21 MR. GALLERY: Yeah. The first base number is 55,000. 22 MEMBER BROWN: 55. If East Bay MUD puts another 27 23 to 28,000 acre feet, if they dedicate more of that out of 24 Camanche, that comes off the top of your interim water? 25 MR. GALLERY: No. Our interim water, it was gone in CAPITOL REPORTERS (916) 923-5447 276 1 the 1980s 2 MEMBER BROWN: So it's gone regardless? 3 MR. GALLERY: It's gone, yeah. Yeah, that's history. 4 So we're now down to the base supply that we had never 5 expected to live with beyond 1965 -- 6 MEMBER BROWN: Will their commitment of the 28 to 7 27,000 eat into your base supply? 8 MR. GALLERY: No, it would not. That assumes our 9 base supply needs would continue to be met. That's the way 10 we read the agreement. And that's what East Bay MUD has 11 indicated to us. 12 MEMBER BROWN: Okay. And there's no more interim 13 water that would be available to you? 14 MR. GALLERY: No. No. The East Bay MUD's needs have 15 grown and so the interim water supply is -- they are now 16 using that. That's gone, but -- 17 MEMBER BROWN: Okay. Thank you. 18 MR. GALLERY: Uh-huh. 19 HEARING OFFICER CAFFREY: Any other questions from 20 the Board Members? Anything from staff? Okay. Thank you 21 very much, Mr. Gallery. 22 Patrick Porgans? Not here. Alex Hildebrand? 23 John Herrick? Not here. Dante Nomellini? 24 Good morning, Mr. Nomellini. Welcome back. 25 MR. NOMELLINI: Mr. Chairman, Members of the Board, CAPITOL REPORTERS (916) 923-5447 277 1 I'm Dante John Nomellini here on behalf of the Central 2 Delta Water Agency. Again, we oppose any piecemeal 3 settlement pertaining to the water rights of the Delta and 4 any allocation. Until we know what the total picture is, 5 any kind of settlement like this would be premature. 6 And our attitude towards this particular agreement 7 is that we participated in the hearings that you held on 8 the Mokelumne River, I think it was a petition by the Sport 9 Fishing Alliance, or something like that, with regard to 10 violations along the Mokelumne River. There's not yet been 11 a decision in that case. We do not know that FERC has 12 approved this. And I think it was stated that the approval 13 was expected, and I think the Board was waiting to see what 14 FERC did. I'm speculating now that we would like to see, 15 with regard to that Mokelumne case a decision by the Board. 16 We did not view that case to be dealing with the 17 Delta requirements. As such, I think Fish and Game's 18 statement about the focus of their negotiation on it is 19 that they were looking at the Lower Mokelumne River from 20 the Delta upstream. 21 Our view of the overall water rights proceeding 22 would be dependent upon which way you go. Of course, if 23 you concluded that the State and the Federal Government 24 have the responsibility and nobody else does, then maybe 25 that doesn't make any difference. But if you decide to go CAPITOL REPORTERS (916) 923-5447 278 1 ahead and make some kind of allocation to people on the 2 basis of their water rights, we've got all the water rights 3 priority questions, we may want to step in to some kind of 4 adjudication of water rights that would involve all these 5 people. East Bay MUD's contribution would be different 6 under those circumstances, how you can figure the Delta 7 physically would change our attitude. 8 If we don't have water running through the cross 9 channels where water goes through a peripheral canal 10 through the bums, then the contribution from the Mokelumne 11 is much different. And the State Water Project, I 12 appreciate Mr. Winkler who now works for Met committing the 13 State. But the State Water Project cannot reproduce the 14 water quality that comes out of the Mokelumne. 15 So we would not view their guarantee to be the 16 equivalent of water flows from the Mokelumne, but it 17 depends how we kind of end up down the road. But the basic 18 message is: We don't think any of these settlements are 19 appropriate on a piecemeal basis. We've got to get the 20 total picture. We haven't seen the environmental document 21 with regard to this, although there is some general 22 discussion in your documents. So we would oppose the 23 piecemeal settlement again. 24 Thank you. 25 HEARING OFFICER CAFFREY: We understand your position CAPITOL REPORTERS (916) 923-5447 279 1 and your situation, Mr. Nomellini. Are there questions of 2 Mr. Nomellini? Anything from staff? 3 Thank you, sir. 4 Cynthia Kochler? I believe she's gone, also, 5 today. That completes the cards, then, for the Mokelumne 6 Agreement discussion. Is there anything else from the 7 Board Members on this proposed agreement? Anything from 8 the staff? 9 MS. LEIDIGH: No. 10 HEARING OFFICER CAFFREY: All right. Thank you, 11 gentlemen, very much for your presentation and for your 12 efforts. And thanks to all the commenters. The Board -- 13 the Board with all the presentations and comments will be 14 taking everything under submission for due consideration in 15 the next little while. 16 With that, then, let's see, we're a little early 17 for a break. Let's see, with regard to the Yuba 18 presenters, Mr. Lilly, is that going to be you? 19 MR. LILLY: Mr. Caffrey, I believe we arranged for 20 Mr. Schulz to go first and I will go second. 21 HEARING OFFICER CAFFREY: All right. You gentlemen 22 have a feel for how much time you need? I'm trying to 23 figure out when to take a break, so we don't have to 24 interrupt you if we can avoid it. 25 MR. SCHULZ: My guess is that we can probably be CAPITOL REPORTERS (916) 923-5447 280 1 through with both of our main presentations by 10:30. 2 Alan -- 3 HEARING OFFICER CAFFREY: That works. 4 MR. LILLY: It might take a little longer than that. 5 I probably have 15 minutes. I suggest you start with 6 Mr. Schulz and, frankly, if I'm in the middle of mine and 7 you think it's time for a break, I won't be offended if you 8 ask for a break. 9 HEARING OFFICER CAFFREY: We have to make sure our 10 Court Reporter stays healthy and in good morale. 11 MR. LILLY: We'll follow whatever schedule you want. 12 HEARING OFFICER CAFFREY: That's the most important 13 person in the room, let's face it. 14 MR. SCHULZ: I won't let Mr. Schuster talk then. 15 HEARING OFFICER CAFFREY: Okay. That's a deal. 16 That's easy for you to say, he left. 17 MR. SCHULZ: Otherwise, I can't take pops. 18 HEARING OFFICER CAFFREY: All right. This is the 19 Yuba Agreement presentation, ladies and gentlemen. 20 And good morning, Mr. Schulz. 21 ---oOo--- 22 YUBA RIVER SETTLEMENT AGREEMENT 23 ---oOo--- 24 MR. SCHULZ: Good morning. As you said yesterday 25 that some of the things that will happen at the beginning CAPITOL REPORTERS (916) 923-5447 281 1 of our presentations is we will try to put the agreements 2 that we're talking about into context. And I'd like to do 3 that at the beginning, because the Yuba is the first of the 4 Sacramento River side agreements that we will be talking 5 about in this workshop. 6 HEARING OFFICER CAFFREY: Please, go ahead. That's 7 what we have been doing on many of these presentations, we 8 have been allowing that. 9 MR. SCHULZ: And there's a fairly substantial 10 difference in our view between the Sacramento River and 11 what you heard yesterday on the San Joaquin River 12 Agreement, because in the San Joaquin River Agreement we 13 were asking the Board to defer implementation of what's in 14 your Water Quality Control Plan, coming up with a study 15 program and finding functional equivalency between what we 16 want to do in the study program and what you have in the 17 Water Quality Control Plan. That's not the case on the 18 Sacramento River side at all. 19 On the Sacramento River side there is -- we are 20 talking about how to meet your Water Quality Control Plan 21 Outflow, the flow related to requirements, whether it be X2 22 or flows at Rio Vista. We're talking about full 23 implementation of the outflow, or the flow-related 24 standards, and not asking for any deviation from that. So 25 what we're really talking about is: How is it done? You CAPITOL REPORTERS (916) 923-5447 282 1 know, what is -- what is the allocation and the 2 responsibility between -- between the parties? 3 And that's made it, in a lot of ways, simpler. 4 Boy, do I put that in quotes. But -- because what you have 5 in your environmental impact gives effect to meeting the 6 standards in the Delta is going to occur, it's just does it 7 come out of Oroville? Does it come out of Bullards Bar? 8 Does it come from reduction in diversion from a Sacramento 9 River diverter? What's the source of the water if we're 10 going to meet the standards? 11 And that's why I earlier talked about the 12 Mokelumne. That's why the backstop issue is so important. 13 There can't be a gap between what we have in these 14 agreements and the water needed to meet your standards. So 15 that's one major point that I wanted to make and have 16 everybody keep in mind as we go through these agreements. 17 We've gotten some -- some indications that some 18 people are objecting to these agreements, because they 19 don't really like the standards. All of our agreements are 20 for the base plan standards as they now exist. And all our 21 agreements have reopening clauses in them if you ever 22 modify the standards. So we have not attempted to do 23 anything other than allocate the obligation of the current 24 standard and we have covered the future in the agreement. 25 So that's another point I want to make. CAPITOL REPORTERS (916) 923-5447 283 1 Finally, there has been discussion about what the 2 flows ought to be in the tributaries. And as a matter of 3 fact, the United States in its 11 points that it made 4 yesterday talked about they wanted to see water coming from 5 each of the tributaries. We have not done anything with 6 respect to what the flows ought to be in the tributaries. 7 We have focused our efforts with respect to how to meet the 8 Bay-Delta standards. 9 The agreements do not in any way stop the Board, 10 or force the Board, to look at what flows ought to be in 11 tributaries downstream from dams. And those are completely 12 open. Like you have the Yuba proceeding that's pending 13 now; you had a Mokelumne hearing. It doesn't stop somebody 14 from filing a request under Public Trust to get additional 15 flows in the tributaries. 16 But we do not believe -- we strongly do not 17 believe that right now flows in the tributaries below those 18 dams are part of these proceedings. It hasn't been noticed 19 for that. The EIR doesn't deal with that. And what we're 20 doing in these hearings, as far as we understand it, is 21 trying to figure out how to implement the Bay-Delta 22 standards. So that's how we structured our agreements and 23 that's the way we're approaching these hearings. 24 I want to talk a little bit about -- I know 25 otherwise I would get questions -- we would all get CAPITOL REPORTERS (916) 923-5447 284 1 questions about the history of our negotiations and how we 2 came up with -- our negotiating position and policy for 3 this. We've been doing this for a number of years ever 4 since Chairman Caffrey suggested, condoled, pleaded with us 5 to see if we could reach settlements that would make this a 6 much easier hearing. And we think we did that. But first 7 what we had to do is to figure out what was the art of 8 possible. What was it possible to do in the settlement 9 realm? It was far different if you went through hearings. 10 I've got a couple of overheads, and there are hard 11 copies of these that have been handed out. And I just want 12 to briefly show -- this shows where we started from. 13 HEARING OFFICER CAFFREY: It's the red one on top. 14 MR. SCHULZ: Red one on top, right. This first 15 overhead is an average of the water which the projects 16 release from storage to meet -- in excess of what they 17 export in order to meet Bay-Delta standards; and also to 18 serve water users along the Sacramento and Feather Rivers 19 under the various settlement contracts. 20 And on average storage releases are made about a 21 million acre feet, 985,000 as shown on the table. And you 22 can see they predominantly occur in the months of June, 23 July, and August. There's a range within that average 24 which is fairly interesting. In wet years the number is 25 only about 300,000 and the vast majority of that is in CAPITOL REPORTERS (916) 923-5447 285 1 July. And that's because natural flows in the wet years 2 take care not only of the water needed to meet Bay-Delta 3 standards, but also take care of the vast majority of the 4 diversions that occur along the Sacramento River and along 5 the Feather River above the Delta and in the Delta, so that 6 we don't have a problem in the wetter years in terms of 7 issues that led to this Board's adoption of Term 91. And 8 even those numbers, quite frankly, are occurring at times 9 when all of the reservoirs are plumb full. And if you take 10 a look at yield calculations and do analyses, they aren't 11 as much concern as the releases we make in other year 12 types. 13 Interestingly, the most difficult years for us are 14 not critical years, they're dry years. And that's probably 15 because of -- there are 25-percent reductions in the USBR's 16 Settlement Contracts in a lot of critical years, like there 17 were in '91/'92. There are shortage provisions in the 18 Feather River Settlement Contracts that are relaxation to 19 the Delta standards. So, dry years, our average is over a 20 million-and-a-half acre feet. And in some years it rises 21 to close to two-million acre feet. These are the years and 22 you can see huge releases made in the months of June, July, 23 and August in order to provide the water that is necessary 24 to meet the standards and serve the users along those 25 streams. CAPITOL REPORTERS (916) 923-5447 286 1 By the way, these charts are pretty much out of 2 your environmental documentation, I believe. Now, once 3 that I've shown you all that, I want you to forget about 4 it, because what we did in determining how we should go 5 about our settlement negotiations is to realize that to 6 figure out how much of those storage releases were required 7 to meet the settlement contracts were required because of 8 the operations in the Delta would involve a horrific 9 hearing before this Board. 10 Our number that we chose to try to reach in terms 11 of total settlements within the Sacramento River Basin is 12 300,000 acre feet. And don't ask me to justify it on a 13 technical basis, it's not a technical determination. It's 14 what we thought is doable within the context of where we 15 are today in California water. 16 We as exporters don't feel that the salvation for 17 the State and Federal Projects is coming from these 18 hearings. Sorry. We think it's in CalFed. We think that 19 the CalFed Program is where we want to get the solutions 20 worked out. The last thing that we wanted to do in the 21 middle of the CalFed process was go have a sectional or 22 regional war before this Board on area of origin issues and 23 what should happen with respect to the allocation of 24 responsibility. We think that's a bad idea. 25 So with that in mind, we took a look at the types CAPITOL REPORTERS (916) 923-5447 287 1 of issues that would be involved in the water rights 2 hearings. We know from talking to in-basin users that if 3 we had gone to a hearing on these subjects that one of the 4 questions would have been: Would the standards be the same 5 if the projects did not have their pumps in the Delta? Or 6 would X2 be in a different location, which would have made 7 more natural flow water available to everyone? We knew 8 those kinds of very, very difficult issues were going to be 9 litigated. So lawyers, policy people made the kind of 10 decisions that one makes every day in every kind of 11 possible litigation about what's a reasonable settlement, 12 what's our policy, what do we want to do? 13 And we literally came up with, we think it's 14 doable in settlement context to try to develop 300,000 acre 15 feet of water from various in-basin users and try to get 16 that; and that would meet, what we believe, was a 17 reasonable number, which should -- which satisfied the 18 state and federal contractors and which we felt we could 19 convince the Department of Water Resources and the Bureau 20 of Reclamation was a better process and a better deal than 21 what we could get out of an adjudicated proceeding before 22 this Board at least from standpoint, not necessarily of 23 numbers, but of timing. Because -- 24 HEARING OFFICER CAFFREY: Mr. Schulz, Mr. Stubchaer 25 has a question. CAPITOL REPORTERS (916) 923-5447 288 1 MR. SCHULZ: I'm sorry. 2 CO-HEARING OFFICER STUBCHAER: Is that 300,000 acre 3 feet each and every year, or is it more in wet years and 4 less in wet years? 5 MR. SCHULZ: We did it basically -- and what you'll 6 hear in our negotiations, it's in dry and critical years, 7 because we took a look at the situation with reservoirs, 8 carryover storage, and all of those things and said: When 9 do we need it? 10 CO-HEARING OFFICER STUBCHAER: Right. 11 MR. SCHULZ: As I pointed out, yeah, there is a 12 number of 300,000 in wet years, but it's sort of in a 13 nutshell, so what? So as you see as we get into the Yuba 14 Agreement that we structured it so that we get the water at 15 the times when it is valuable and useful. And the other 16 thing that we like about settlements in this regard was 17 that we could schedule the water, which is not something 18 that we think would necessarily be easy for you people to 19 do through a regulatory process. But through the 20 settlement process we can get the water when it's valuable. 21 And there's a lot of flexibility that you can have through 22 a settlement which doesn't necessarily come through a State 23 Board Order. 24 So once we develop by a slight, slight of the 25 hand, we agree, but we think it's a good number, the CAPITOL REPORTERS (916) 923-5447 289 1 300,000, then we had to move on to: How much of that 2 should we try to get from each individual settlement 3 negotiation? And as you'll hear over the rest of this day 4 and if we go tomorrow, is that every one of these districts 5 has a unique aspect for it. So it's not something that you 6 can simply do from a closing standpoint. 7 I'll go over that allocation process as part of 8 the discussion of Yuba, we'll use Yuba as an example as to 9 the methodology that we used to go from the 300,000 to the 10 19,000 that's in the Yuba Agreement. I wanted to mention 11 one other thing before we get into Yuba specifically. And 12 that is I want to mention Prop 204. I apologize I did not 13 prepare copies of something I took out of the Code Book, 14 but this is the language of Prop 204, Article V of Prop 15 204, which are SB 900 which was negotiated among a very, 16 very large group of stakeholders. 17 This administration, this Board and the Department 18 of Water Resources and others were involved in the 19 development of SB 900 as were major environmental groups, 20 water users, labor, and building trades and federal 21 officials and everybody else and then finally approved by 22 the voters. But it was recognized back in June/July of '96 23 when we were negotiating SB 900 that there needed to be 24 motivation provided that was very important to the CalFed 25 process to get these settlements going. CAPITOL REPORTERS (916) 923-5447 290 1 And so Prop 204 concluded with what is Article V 2 the Sacramento Valley Water Management had protection 3 measures of 25 million dollars to help the settlement 4 process along by providing some dollars for infrastructure 5 that might be needed in order to allow these settlements to 6 go into place without adversely impacting water supply and 7 other aspects of the settlement parties. 8 One of the things I want to say here is this Board 9 has a role under this provision. The Board -- in 78681.8 10 it says, "The Board shall provide adequate public review 11 for proposed programs, or projects. And shall" -- 12 THE COURT REPORTER: Okay. Slow down, please. 13 MR. SCHULZ: Sorry. "And shall determine that those 14 programs or projects are consistent with the requirements 15 of Section 78681.4, which says that the money is to be used 16 in the implementation of the Water Quality Control Plan for 17 the Bay-Delta adopted by the Board by Resolution 95-24." 18 But the Department of Water Resources manages the 19 program that has the money. So there's a bifurcation of 20 authority here. In all of the settlement agreements that 21 we've been working on we have been sending the Northern 22 California parties to the Department to work out a 23 definition of the project that they want to construct and a 24 contract with DWR for the use of the Prop 204 money. That 25 is not in the agreement that we're presenting to you today CAPITOL REPORTERS (916) 923-5447 291 1 it would be a parallel agreement. 2 But this Board's role is to say once they see what 3 that project is, say, yes, this project will help meet the 4 Water Quality Control Plan. And there's lots of ways of 5 doing that. It could be fishery enhancement facilities 6 would help meet the plan, because this is written broadly. 7 It doesn't say just to meet the outflow aspects of plan, 8 but any portion of the plan. Or it could be conservation 9 facilities or conjunctive use facilities to free up the 10 water so that they can provide the flows in the dry and 11 critical years. 12 And so one of the things we will need to deal with 13 your staff on is: Do we do that at the same time we do 14 these hearings, or is there going to be separate 15 proceedings on that? But those Prop 204 matters are going 16 to be before you as part of the settlement process. I 17 think that's where I want to stop in terms of the general 18 matters and move on to the -- specifically the Yuba 19 Agreement. And let me start off before I turn it over to 20 Alan by simply putting up another overhead. This one there 21 are copies of. 22 HEARING OFFICER CAFFREY: Ms. Forster? 23 MEMBER FORSTER: I don't know if I have a statement 24 or question, I've been curious about the Prop 204 and how 25 it relates to this water rights proceeding and how we CAPITOL REPORTERS (916) 923-5447 292 1 account for it and put it in as the total package. And 2 maybe some of you should put that down on paper and what 3 your vision is, because it isn't in anything that we have 4 written up so far. 5 And when -- when everything is done, we would -- I 6 think we all owe it to the public to say: This is what we 7 did. This is where all the money that you voted for and 8 put in, it's like the total package. And I'm not sure, you 9 know, we may have an idea how to do it, but it would help 10 if other people supplied us with their thoughts of how to 11 do it. 12 MR. SCHULZ: Certainly, our visions at the time SB 13 900 was being negotiated was -- in a short word it was a 14 motivator to get these settlements done. And one of the 15 things you will hear from everybody today is their vision 16 of what they want to use the money for, but that's going to 17 be part of our presentations. 18 MEMBER FORSTER: And it will be in part satisfying 19 that we did improve, it's just not the flows that went to 20 improve the environment, all of that money that is going 21 for these projects are supposed to improve the environment. 22 So I've always worried about getting the whole 23 picture out there so we could say: Might not be a flow, 24 but look at this project. 25 MR. SCHULZ: Yes. And I think that comes home very CAPITOL REPORTERS (916) 923-5447 293 1 clearly when you hear the Yuba presentation as to what they 2 want to do with the Prop 204 aspect. Real quickly, we took 3 a very simple view of how to do an allocation. We took the 4 total Sacramento River average base, unimpaired flow. In 5 the case of Yuba, we took the North Yuba portion of that, 6 came up with a percentage, multiplied it by 300,000 acre 7 feet and came up with a number. 8 Now, this is not unlike what you have in one of 9 your alternatives in terms of the watershed allocation, but 10 there's a huge difference between using that process under 11 a regulatory premise and us deciding that that's a simple 12 way of doing it for purposes of settlement negotiations. I 13 want to really make that point. The reason that Yuba comes 14 out a little different than the calculation with 19 rather 15 than 17 is because there was -- one of the main reasons was 16 there was a dam that is down the stream that flows into the 17 Yuba. It's Collins Reservoir of the Browns Valley 18 Irrigation. We wanted to encompass that within the 19 settlement, so that's why we increased it to pick up those 20 flows. And also there's other water users below Bullards 21 to take water out of the Yuba River. So the negotiated 22 number was adjusted as I just said, every one is a little 23 bit unique, and we came up with the 19,000 acre foot 24 number. 25 HEARING OFFICER CAFFREY: Interesting, Mr. Schulz. CAPITOL REPORTERS (916) 923-5447 294 1 So the percentage is not constant, but the amount is 2 constant. So in a dry or critical year your percentage is 3 higher than it would be in a dry year or wet year? 4 MR. SCHULZ: That's correct. 5 HEARING OFFICER CAFFREY: Interesting concept. 6 MR. SCHULZ: Yeah. But, again, as I said, if you're 7 trying to find science in this you'll find yourself in 8 allies. 9 HEARING OFFICER CAFFREY: Yeah. 10 MR. SCHULZ: Because it's a settlement process. 11 Okay. At this point I want to turn it over to Alan Lilly, 12 who's going to make a presentation on behalf of the Yuba 13 County Water Agency. 14 HEARING OFFICER CAFFREY: Maybe we should avail 15 ourself of Mr. Lilly's offer, it's getting close to 10:30. 16 Let's take about a 15 -- 10-to 15-minute break, listen for 17 the gavel. And then we'll complete the recitation of 18 Mr. Lilly. 19 (Recess taken from 10:22 a.m. to 10:40 a.m.) 20 HEARING OFFICER CAFFREY: Please, let's retake our 21 seats and we'll reconvene our workshop. Let the record 22 show that we have been joined by our Executive Director 23 Mr. Walt Pettit up here at the dais. Mr. Pettit, was 24 again, defending the Board this morning in the Legislature 25 and as usual did a very good job. CAPITOL REPORTERS (916) 923-5447 295 1 Okay. We'll now hear the second part of the 2 presentation on the Yuba River Agreement. Mr. Alan Lilly. 3 Good morning, sir. Welcome back. 4 MR. LILLY: Good morning, Chairman Caffrey, Members 5 of the Board. Mr. Pettit, I hope you were successful, 6 although I'm sure you were able to report with all these 7 settlements that the Bay-Delta Water Right Hearings will be 8 significantly shorter than was originally planned. 9 For the record, I am Alan Lilly of Bartkiewicz, 10 Kronick and Shanahan in Sacramento representing the Yuba 11 County Water Agency. Also in the audience here, if 12 necessary for questions, are Don Wilson the Agency's 13 Engineer Administrator; Herb Greydanus from Bookman 14 Edmondson Engineering, who's been the agency's principal 15 engineer for many years; and my partner Paul Partkiewicz 16 just stepped out, but he will be back. 17 I do have to start out by way of background to 18 state that Yuba's position has been -- and if we are not 19 able to fully achieve a settlement, will be that the State 20 Water Board should hold that Yuba has no obligation to 21 curtail its diversions or storage of water under its water 22 rights to help implement the 1995 Water Quality Control 23 Plan. 24 The declines in the populations of both the 25 resident Delta fish and the anadromous fish that pass CAPITOL REPORTERS (916) 923-5447 296 1 through the Delta only began when the State and Federal 2 Export Projects began their massive diversions from the 3 South Delta. And the principal reason for these declines 4 was the project. And frankly, I don't think there's any 5 question that the principal reason for the water quality 6 objectives in the 1995 Plan is to mitigate the adverse 7 impacts of these exports; and, frankly, to try to move the 8 fish away from the pumps so they won't be adversely 9 affected. 10 However, Yuba also recognizes the uncertainties 11 and expenses of litigation and the fact that all interested 12 parties will be better off if the pending Bay-Delta issues 13 can be resolved. We also took to heart the many 14 admonitions from Chairman Caffrey and the other Members of 15 the Board that it would be in our interest, as well as the 16 Board's interest, to try to resolve the Bay-Delta disputes. 17 And we've, frankly, been working very hard following those 18 directions over the past several years. 19 The negotiations for the exporters have not been 20 either quick nor simple. There were several disputed 21 issues and numerous meetings. I can safely say I've lost 22 count of how many have been necessary to resolve these 23 issues. The result of this effort is the February 10, 24 1998, Draft Agreement that is cited in the workshop notice. 25 Copies of these draft agreements have been posted on the CAPITOL REPORTERS (916) 923-5447 297 1 Internet, submitted to the State Water Board and made 2 available to interested parties. And I did submit some 3 yesterday. And just in case anyone in the audience is 4 wondering, I don't have any formal written presentation 5 beyond the submission of the Draft Agreement, but my intent 6 today is just to discuss that Draft Agreement, on which 7 I'll do now. And I will give a brief summary only the 8 Agreement is many, many pages long and has quite a few 9 details. 10 The parties to the Agreement are Yuba and the same 11 export agencies and organizations that are parties to the 12 Mokelumne River Agreement that you just heard about. 13 They're referred to in the agreement -- and I'll refer to 14 them today as the "exporters." They basically are the 15 major water districts that receive export water from the 16 State and Federal Projects. The Draft Agreement also 17 contemplates for ancillary agreements with the Department 18 of Water Resources and the Bureau of Reclamation. And 19 those are being negotiated now. 20 Under the agreement Yuba would be required to 21 release 19,000 acre feet of new water during every dry and 22 critical year. There's a caveat occurring, extremely 23 critical years like 1977, the releases would not be 24 required. I can answer questions, but I don't want to get 25 into to many details, unless the Board has questions. CAPITOL REPORTERS (916) 923-5447 298 1 The determination of new water is -- would be 2 similar to that that was developed and used in past Yuba 3 County Water Agency water transfers. Again, there's about 4 25 pages of exhibits to the Draft Agreement that go into 5 detail in defining what new water is. And I'm considering 6 not going to discuss those today. But just in summary and 7 in general terms, new water is water that Yuba would have 8 to release from storage in New Bullards Bar Reservoir to 9 implement the settlement agreement. And this is water that 10 would otherwise remain in storage under Yuba's contract 11 with PG&E. 12 The -- as Mr. Schulz mentioned, the 19,000 acre 13 foot amount was negotiated with the exporters. And it 14 really was negotiated, as with any settlement, there's not 15 strict scientific basis for the number, although there's 16 probably a little better scientific basis for how we got 19 17 from the 300,000. Basically, we took the ratio of the 18 calculated depletions of water that were caused by the 19 diversions by the water right holders in Yuba County that 20 divert water from the Yuba River, took that divided by the 21 total depletions in the Sacramento Valley, and then 22 multiplied that by 300,000 and got to 19,000. 23 And, incidentally, it turns out that you get just 24 about the same result if you take the calculated inflows 25 into New Bullards Bar Reservoir and Collins Reservoir and CAPITOL REPORTERS (916) 923-5447 299 1 divide it by the total unimpaired flows in the Sacramento 2 Valley. So we think there's at least some basis for the 3 percentage, which is somewhere between 6 and 7 percent 4 under the 300,000. 5 The agreement contemplates that these releases 6 would satisfy completely all of the obligations of the Yuba 7 County Water Agency and the other water right holders in 8 Yuba County that divert water from the Yuba River to help 9 implement the objectives in the 1995 plan. And just so you 10 know, the other water right holders in Yuba County that 11 would be covered by this agreement are the Browns Valley 12 Irrigation District, the Cordua Irrigation District, and 13 the Hallwood Irrigation Company. They are all listed on 14 the list of water rights that the State Board included with 15 its Notice for the Bay-Delta hearings. 16 As Mr. Schulz stated -- and I do have to agree 17 with him on this, we certainly don't agree with him on 18 everything, but there are two major benefits to this 19 settlement approach over water rights hearing. And those 20 are, number one, the matter can be resolved promptly 21 without years of litigation. Something this Board can, no 22 doubt, can understand because there has been years of 23 litigation involving Bay-Delta. And, frankly, we like the 24 exporters, would rather proceed to more productive things 25 than litigation. CAPITOL REPORTERS (916) 923-5447 300 1 There are construction projects to help both water 2 users and the people of Yuba County that suffered seriously 3 from flood damages over the past few years and as well as 4 for the exporters to go ahead. So we would rather move 5 forward than be bogged down with litigation. And Mr. 6 Barkowitz and I will be able to find other work to do and 7 we certainly would prefer that the Agency move forward than 8 we be involved in litigation and hearings that aren't 9 necessary. 10 The second thing that's equally important is with 11 this agreement Yuba can work every year in the spring after 12 the water supply forecasts have been determined -- are 13 available from the snowpack surveys and so forth, to 14 develop a schedule for when the water can be released. 15 And I do want to emphasize, this is an important 16 point, if the agency through Mr. Wilson can work with the 17 DWR and the Bureau and operators of the State and Federal 18 Projects to develop a schedule of releases of the water 19 from New Bullards Bar Reservoir that water can be used much 20 more efficiently, much more efficiently than if it's a 21 day-to-day administration of when the Delta is in balance, 22 when Term 91 or its successor is in effect versus when it's 23 not in effect. 24 Just because of the lag times alone for the flow 25 of waters from the reservoirs to the Delta, plus not CAPITOL REPORTERS (916) 923-5447 301 1 knowing exactly what the hydrological conditions are, 2 there's going to be inefficiencies. And being able to 3 dispatch the water according to a prearranged schedule will 4 allow that water to be used more efficiently, which, of 5 course, is one of the primary policies of the water law in 6 California. 7 And in recognition of this benefit, the Draft 8 Agreement provides that the exporters will pay Yuba County 9 Water Agency $25 per acre foot for this water. This 10 represents approximately half of the present market price 11 for the water. Again, the negotiated number, I guess I can 12 say in simple terms, they started saying that the number 13 should be zero and we started out saying the number should 14 be 50, or at least 50. And after some negotiations we 15 reached a no-ground on that point as we did on the other 16 points. 17 Another important point -- 18 MEMBER BROWN: Who's paying the $25? 19 MR. LILLY: Well, that I think I'll have to leave to 20 Mr. Schulz exactly how it is going to be arranged, but I 21 think the simple answer, Mr. Brown, is that the water 22 districts among the exporters that receive the benefit for 23 the water would pay for it. I really have to defer to 24 Mr. Schulz to give a more detailed response. If you like I 25 can do that now, or later. CAPITOL REPORTERS (916) 923-5447 302 1 MEMBER BROWN: Whenever. 2 MR. LILLY: Okay. You want to stand right here? 3 MR. SCHULZ: Remember also that this is not only the 4 State Project, but also the Federal Central Project. So 5 it's very likely to be handled differently between the two 6 projects. The State Project side, we're sitting down with 7 the Department of Water Resources right now and talking 8 about whether it is folded into Delta water charge, or 9 whether it's treated more like an opt-in/opt-out program 10 among the contractors. So we're working on the internal 11 financial structuring of that with DWR right now. But one 12 way or the other it will come either from State Project 13 water users or DWR through the State water contracts. 14 MEMBER BROWN: What about the Federal? 15 MR. SCHULZ: I don't know. That's -- again, perhaps 16 Steve Ottemoeller, or Tom Bermingham -- okay. 17 MR. BERMINGHAM: My name is Tom Bermingham and I 18 represent Westlands Water District. Currently there are 19 discussions that are going on between the Bureau and the 20 Central Valley Project Contractors, the export contractors 21 concerning the payment. The situation is a little more 22 complicated on the federal side than it is on the state 23 side, because there are some issues that relate to how 24 water will be accounted for under CVPIA. But there are 25 discussions and ultimately it will be like the state CAPITOL REPORTERS (916) 923-5447 303 1 contractors, the federal contractors who pay either through 2 the Bureau or directly to the agency. 3 MEMBER BROWN: Okay. Thank you. 4 HEARING OFFICER CAFFREY: Thank you, Mr. Bermingham. 5 Please, proceed, Mr. Lilly. 6 MR. LILLY: I'm glad they were here to answer that 7 question; that's obviously not our side of the deal. Our 8 point of delivery for this water is the Marysville Gauge on 9 the river and, of course, from there on it's up to them to 10 deliver the water. 11 The next important provision -- and I am just 12 going to summarize the key points of the Draft Agreement. 13 If either this Board or the Federal Energy Regulatory 14 Commission impose these new in-stream flow requirements for 15 the Lower Yuba River on the Yuba County Water Agency, then 16 the agency still is obligated to release 19,000 acre feet 17 of new water during dry and critical years. 18 However, the exporters would not be required to 19 pay anything for water that's within that 19,000 that had 20 to also be released to satisfy the in-stream flow 21 requirements in the Lower Yuba River. And, again, this 22 frankly is a point of negotiation. Their argument was, 23 "Well, you know if we were going to get it anyway, we 24 shouldn't have to pay you for it." And after some 25 grumbling, we dredgedly agreed to that point, but that's CAPITOL REPORTERS (916) 923-5447 304 1 the way it is set up now. 2 I mentioned the ancillary agreements and they are 3 important. And, particularly, Prop 204 is very important. 4 We are working with the Department of Water Resources and 5 this one is Yuba directly with the Department of Water 6 Resources, because it's Prop 204 funding and use of that 7 money for fishery enhancement projects. What we agreed to 8 in the agreement is basically take that same ratio of about 9 6 to 7 percent, take 19, divide it by 300, and multiply it 10 times the 25 million funding that's in Chapter 5 of Prop 11 204 that Mr. Schulz referred to, and the result is slightly 12 over one-and-a-half million. And that number would be used 13 for funding fishery enhancement projects in the Yuba River. 14 And it turns out that we have a very good project 15 that we're working on and Mr. Greydanus and his staff are 16 currently developing the plans for this; and that is a 17 temperature device at Inglebreck Dam. Similar in concept 18 to the temperature control device that checks the dam ours 19 may seem much smaller. Ingelbreck Dam was built by the 20 Army Corps of Engineers in approximately 1940, technically 21 by United States Fleet Commission which was a predecessor 22 to the Army Corps. 23 And it has no lower level outlets. And as a 24 consequence, the warmer water off the surface is released 25 into the Lower Yuba River and both Fish and Game and Fish CAPITOL REPORTERS (916) 923-5447 305 1 and Wildlife have identified water temperatures as an issue 2 in the Lower Yuba River. And, frankly, this is a great 3 opportunity to mitigate the effects of that federal 4 facility and lower the water temperatures in the Lower Yuba 5 River during the critical times of the year. It looks like 6 Mr. Greydanus can give more details if the Board has 7 questions, but it looks like the 1.5 million will fund a 8 substantial share, although not all of that, and the 9 remainder be funded from other sources. 10 A point that was mentioned yesterday by the 11 environmentalists that I do want to mention, the proposed 12 agreement also has a clause that would require Yuba to meet 13 with the exporters to discuss potential long-term water 14 transfers. And that would be -- in other words, 15 transferring water not included in the 19,000 acre feet per 16 year. There's no obligation. Frankly, we couldn't go much 17 further to meet in good faith without having to do further 18 CEQA evaluation, and obviously that was not possible at 19 this stage. And it also gives the exporters the first 20 right of refusal on any future long term, more than one 21 year Yuba water transfers. 22 I'd like to talk about the procedures for where we 23 see this agreement going forward. We expect this proposed 24 settlement agreement to be executed by all the parties and 25 that's basically Yuba and the exporters, within the next CAPITOL REPORTERS (916) 923-5447 306 1 few weeks, and then for the exporters to continue to work 2 on their ancillary agreements with DWR, the Bureau and for 3 us at Yuba to be preparing a petition to the State Water 4 Board requesting approvals of the necessary changes in 5 Yuba's water rights to implement the agreement. 6 I'm still working out exactly what those details 7 are and I've had some discussions with your staff on what 8 the staff thinks is appropriate in that regard. We're 9 looking for changes in the authorized purposes of use and 10 places of use to add Delta inflows and outflows to the 11 Agency's water rights and the Water Code Section 1707; and 12 also if necessary, to add the export projects once the 13 diversions and places of use just for the 19,000 that would 14 be required. 15 It gets to be a little complicated, and one of the 16 issues is where is that 19,000 going? Is it going out the 17 Delta, or is it going to the exports? And, of course, 18 there's never an answer to that. It's all comingled once 19 it gets in the Delta and you can't say where that 19,000 20 went, and it depends on how the State and Federal Projects 21 are operating to accommodate that. 22 But to cover both bases we expect from the water 23 rights point of view we'll ask for it to be authorized to 24 go either direction. The agreement provides, and we 25 certainly intend, that the settlement agreement in its CAPITOL REPORTERS (916) 923-5447 307 1 approval by the State Board would not increase the 2 Bay-Delta obligations of any other non-CVP or SWP water 3 right holder, in particular other water right holders in 4 the Sacramento Valley. 5 Basically the way it works is if there's 6 differences between the amounts of water that Yuba must 7 release under the agreement and the amounts that Yuba 8 otherwise would have to bypass under a State Water Board 9 Bay-Delta Order, then depending on which way the difference 10 goes the State and Federal Projects either get the benefit 11 if we're releasing more water than we otherwise would have 12 to, or they make up the difference, if we're releasing less 13 water than we have to. And, frankly, it's likely that both 14 of those will occur depending on hydrological conditions 15 from year-to-year; you may get it going one, and you may 16 get it going the other. 17 The State Board staff submitted comments on the 18 Agency's initial study for this project basically asking 19 whether we contemplated that the objectives in the plan 20 would be fully implemented. And as we stated in our 21 response to those comments, the clear intent, both from 22 Yuba's point of view and the exporters' point of view, is 23 that all of this -- the water quality objectives in the 24 1995 plan would be fully implemented. And that mechanism 25 would be just as I said, the word "backstop" has been used. CAPITOL REPORTERS (916) 923-5447 308 1 Basically the State and Federal Projects get the benefit of 2 any excess and make up any lower release depending on the 3 circumstances. 4 So there's no intent for the standards not to be 5 fully implemented and there's no intent to shift the burden 6 to any other water users besides the State and Federal 7 Projects. As I just mentioned, the Agency adopted -- 8 circulated an initial study and then it just recently 9 adopted a negative declaration that covers the changes in 10 operations that the Agency and the projects will have to 11 make to implement the agreement. 12 And this initial study and negative declaration 13 lists the State Water Resources Control Board as the 14 potential responsible agency, Yuba was the lead agency on 15 that document. So basically as I see it the State Water 16 Board has two regarding CEQA and this agreement. It could 17 rely on Yuba's negative declaration for its CEQA 18 documentation in connection with this decision on the 19 agreement, or it could use its own draft Bay-Delta EIR 20 potentially with some amendments to recognize the existence 21 of this agreement and certify that EIR before adopting any 22 decision on the agreement. 23 Frankly, we think that this agreement is within 24 the end points described by flow alternative two and by 25 flow alternatives three and four and would not cause any CAPITOL REPORTERS (916) 923-5447 309 1 additional environmental impacts that are not already 2 analyzed in that document. So while some commenting or 3 editing might be necessary, or clarification, we believe 4 that the State Board's document assuming it is certified as 5 a final EIR, would provide adequate CEQA documentation for 6 this agreement. Again, as Mr. Schulz said, this agreement 7 is complicated, but it's nowhere near as complicated as the 8 San Joaquin River Agreement, because we're talking about 9 functional equivalence of the standards, we're talking full 10 implementation of the standards and that makes a big 11 difference. 12 We strongly recommend that the State Board follow 13 its proposal to conduct the Bay-Delta Water Right Hearing 14 in phases. And I think what I'm talking about here may 15 make this about as clear as anybody can today: The 16 settlement agreement should be in the first phase and that 17 may have sub phases to consider the separate agreements 18 separately; and then any remaining water rights issues 19 would be considered in the second phase after a decision 20 has been issued on the first phase. 21 Very clearly, if you don't do this it's going to 22 be very confusing and not just for us, but also for you. 23 If you have the water rights hearing all at once we're 24 going to have one bundle of evidence regarding why you 25 should adopt the agreement, why it's a good idea, and what CAPITOL REPORTERS (916) 923-5447 310 1 environmental impacts and hydrology are and another whole 2 bundle of evidence regarding why you should adopt a certain 3 Bay-Delta water right decision in the absence of the 4 agreement. And it would be very confusing, to say the 5 least, to hear testimony and receive exhibits on both of 6 those issues in the same proceeding. 7 It's also critical for us that there be a decision 8 after the first phase before the second phase starts. 9 Otherwise, while we don't have to present the evidence at 10 the same time, we have no alternative but to present 11 evidence on the second phase if we don't know whether or 12 not we're off the hook for any Bay-Delta obligation we have 13 to present that evidence. Which I will just state, we have 14 been developing and we are prepared to present detailed 15 evidence if the agreement does not go forward. So we have 16 to have approval of the agreement and a finding by the 17 Board that that satisfies the Yuba Bay-Delta obligation to 18 know we don't have to proceed with the second phase. 19 And, frankly, as I just mentioned, I think it's 20 also in the State Board's benefit to take this approach. 21 If you have settlement agreements, and there may be as many 22 as ten or even more by the time you have the hearing on the 23 first phase, it will significantly narrow the issues, the 24 time for your second phase, and the decision as well. So 25 it's both in our interest and your interest to do that. CAPITOL REPORTERS (916) 923-5447 311 1 As I said, we do recommend splitting the first 2 phase of the hearing into separate hearing units for the 3 different agreements; frankly, there's almost no overlap 4 between the San Joaquin River Agreement and the Mokelumne 5 Agreement and this agreement. And it doesn't make sense to 6 have all the parties submitting their exhibits and 7 testimony exchange among everyone else in those 8 proceedings. If there are other agreements in the Sac 9 Valley, those are probably appropriate to be considered in 10 the same phase, but not with the San Joaquin. 11 There was a discussion yesterday by certain 12 parties to bifurcate the hearing into a hearing on legal 13 issues and then a hearing on the factual issues. We 14 strongly urge the Board not to follow that approach. 15 Frankly, it would be inconsistent with the way this Board 16 and the courts have operated for probably the last 100 17 years. It's just about -- like Ms. Leidigh pointed out, 18 it's just about impossible to issue an effective decision 19 on legal issues if you don't have a factual record on which 20 to base that decision. And I think there's some serious 21 questions as to whether the courts have jurisdiction to 22 consider an interim decision like that, because the 23 Doctrine of Exhaustive and Administrative Remedies is 24 jurisdictional in the courts. And I don't think the court 25 would have jurisdiction. CAPITOL REPORTERS (916) 923-5447 312 1 Yesterday we heard comments from several different 2 environmental organizations about the agreement. And they 3 did mention that representatives from the agency met last 4 week with the environmental organizations to discuss these 5 issues; and, frankly, we thought it was a productive 6 meeting. And we will continue to meet with them to try to 7 resolve the disputed issues as we do always before 8 hearings. I do want to respond to their -- I think there 9 was basically three issues they raised and I do want to 10 respond to those. 11 The first issue is the exporters' right of first 12 refusal for future long-term water transfers. This seems 13 to be a major bone of contention with the environmental 14 organizations. Frankly, it doesn't do Yuba any good, and 15 if the exporters agree to take it out, we'll be happy to 16 take it out. It doesn't provide us any benefit whatsoever. 17 The exporters included it as part of the negotiations and 18 we were willing to have that in there, but that's not a 19 reason for the State Board to reject the settlement 20 agreement. In fact, it's not even an issue that the State 21 Board has the authority or jurisdiction to consider. 22 There's been talk -- and, perhaps, we're all 23 guilty of just talking in generic terms about presenting an 24 agreement to the Board for approval. Well, of course, the 25 Board can't approve everything. The Board can only approve CAPITOL REPORTERS (916) 923-5447 313 1 the water rights' issues that are within its authority. 2 For example, if we submit an agreement with a $25 per acre 3 foot price, you don't have the authority to say, well, we 4 aren't going to approve it unless it's $20, or unless it's 5 $30. That's just not a water right issue that's within the 6 Board's authority. Well, similarly an issue regarding 7 negotiations on future long-term water transfers it's just 8 not a water right issue that's within the scope of this 9 hearing or the Board's authority. 10 The second issue is what Mr. Graff referred to 11 yesterday as baseline flows in the Lower Yuba River. It's 12 been called other things, but basically the argument is 13 that there ought to be some determination of new in-stream 14 flow requirements in the Lower Yuba River before the State 15 Board considers this agreement. This issue came up in 16 1992. In 1992 the Department of Fish and Game in the 17 Bay-Delta hearings tried to offer us the Lower Yuba River 18 Fisheries Management Plan and said: 19 "While you're adopting a Bay-Delta decision, also 20 adopt in-stream flow requirements on the Lower Yuba River." 21 And the State Board correctly rejected that evidence and 22 said, "No. This is a hearing on Bay-Delta. We're talking 23 about how much water has to come into the Delta and go out 24 of the Delta. I believe we'll address inflow stream 25 requirements in the tributaries in separate proceedings." CAPITOL REPORTERS (916) 923-5447 314 1 And, in fact, the notice -- I'll just read one 2 sentence from the Notice that the State Board issued for 3 this hearing. It says, "With respect to meeting the 4 objectives, the proceeding is intended to establish water 5 right implementation requirements that will meet the flow 6 dependent objectives within the Bay-Delta." And here's the 7 important part, "Not to establish specific in-stream flow 8 requirements to protect fish and wildlife upstream of the 9 Delta." 10 You have it right in the Notice and I strongly 11 urge the Board to stick with that. I also will note 12 Mr. Bobker said yesterday, kind of grudgingly said, "Well, 13 the fishery in the Yuba River is fairly good." I just have 14 to correct that. The fishery in the Yuba River is 15 phenomenal. There is no other way to describe it. Before 16 New Bullards Bar Reservoir was built, the average salmon 17 runs were about 12,500 adults coming up each year. In 1996 18 and 1997 over 25,000 adults came up the Lower Yuba River 19 each year, over double the pre-project average. And this 20 is on a river with no hatchery. There is no other river in 21 the Central Valley without a hatchery that comes anywhere 22 close to that kind of salmon run. This is not a river in 23 distress. 24 And as I -- the other point as I said, the draft 25 agreement does recognize that either the State Board or CAPITOL REPORTERS (916) 923-5447 315 1 FERC may adopt in-stream flow requirements at some point in 2 the future, but there's no reason why that has to be done 3 first. And considering the crisis in the Delta and the 4 need for immediate attention in the Delta, there's no 5 reason why the State Board should delay Delta proceedings 6 to resolve in-stream flow issues in the Lower Yuba River. 7 Finally, the third issue raised by the 8 environmentalists is they said our initial study in 9 relation to depredation was inadequate. I'd just like to 10 say significantly although EDF, the Bay Institute, and 11 Natural Heritage Institute all made that comment yesterday, 12 none of them submitted any comments on Yuba's initial study 13 during the CEQA comment period. And, of course, if they 14 had a problem with it that's when they should have done it. 15 So in summary, I will, of course, be glad to 16 answer any questions. We support the Bay -- the State 17 Board's proposal to phase the proceeding. We certainly 18 hope that the Board ultimately will take the appropriate 19 water right actions to implement the agreement. And we'll 20 be glad to answer any questions. 21 Thank you. 22 HEARING OFFICER CAFFREY: Thank you very much, 23 Mr. Lilly. Are there any questions from the Board Members? 24 Anything from the staff? 25 MEMBER BROWN: What was that salmon count again? CAPITOL REPORTERS (916) 923-5447 316 1 MR. LILLY: Yes. Mr. Brown, the pre-New Bullards Bar 2 Reservoir numbers which basically are 1953 through 1971 are 3 about 12,500 -- excuse me, exact number 12,906. That's for 4 1953 through 1971. The average since New Bullards Bar 5 Reservoir was built, which was 1972 through 1977 with the 6 exception of 1990 when Fish and Game didn't take data, are 7 14,174 fish. So there's been a slight improvement on the 8 average since New Bullards Bar was built. The last two 9 numbers 1996 and 1997, 1996 the number was 27,520. In 1997 10 the number was 25,778, and those are adult fall-run chinook 11 salmon escapement. 12 HEARING OFFICER CAFFREY: Mr. Howard, you've got a 13 question? 14 MR. HOWARD: Just one question. Mr. Lilly, on 15 Section F of your agreement it says, "The parties to this 16 agreement expect the Water Board to," and under number two 17 it says, "Not hold any further hearing, or issue any 18 further decisional order regarding any additional 19 obligation of any Yuba water right holder to contribute to 20 the implementation of the objectives." And it goes on to 21 define Yuba water right holders as anyone with points of 22 diversion on the Yuba River, or places of use on Yuba 23 County -- 24 MR. LILLY: Excuse me, critical "and." "Points of 25 diversion and," is -- CAPITOL REPORTERS (916) 923-5447 317 1 MR. HOWARD: Right. I'm sorry. Earlier you said that 2 your opinion that this covered Yuba County Water Agency, 3 Browns Valley, Hallwood, and Cordua. And my question is: 4 Might it cover any other district now or in the future? 5 And if so, could you identify them? Because there are 6 other water right holders in Yuba County. 7 MR. LILLY: The only other -- let's put it this way; 8 that is the list of everyone who is on your list for this 9 hearing process who fits within that definition. The only 10 other diverters that would fit that category are some very 11 small riparian right holders along the Lower Yuba River. 12 Who are not even -- they're far smaller than the cutoff 13 criteria that you used for your hearing notice. 14 To answer your question nobody knows for sure, 15 obviously, what's going to happen in the future, but those 16 water rights pretty much cover all of the land that's 17 potential irrigatable from the Lower Yuba River in Yuba 18 County. So I don't see that there could be a significant 19 expansion of those water rights in the future. And, of 20 course, if somebody were to file an application for a new 21 appropriate water right, the issue of availability of water 22 would have to be considered at that time. But this 23 basically covers the irrigatable land in Yuba County that's 24 irrigatable from the Lower Yuba River. 25 MR. HOWARD: My only concern, it seems to be so CAPITOL REPORTERS (916) 923-5447 318 1 inclusive that, you know, there might be some proceeding in 2 the future in which someone might be covered, or might be 3 asked to provide some contribution, but it seems to already 4 be precluded by this agreement. 5 MR. LILLY: Well, I understand your concern and, 6 frankly, the exporters raised that concern. And the next 7 sentence of the agreement says, "That the parties expect 8 the State Board to add the State Board Standards Permit 9 Term 91 to any new water right permit that is issued after 10 execution of this agreement." 11 And that basically fits those criteria. So I 12 think we've also covered it that way. If there's someone 13 new, they're going to be subject to Term 91 anyway, which I 14 think will take care of your concern. 15 MR. HOWARD: Those are for new ones. I'm just 16 talking about the existing ones. 17 MR. LILLY: And I've given you the list of the 18 existing ones -- 19 MR. HOWARD: We'll look at the list ourselves and see 20 what the total of this -- of the possible people that 21 might be involved. I think there are possibly other water 22 right holders, appropriate water rights holders that would 23 be covered by this agreement the way it is presently 24 phrased. 25 MR. LILLY: Well, let me know if you find any. I'm CAPITOL REPORTERS (916) 923-5447 319 1 not trying to fool you. 2 MR. HOWARD: Sure. 3 MR. LILLY: I'm not aware of any other appropriate 4 water right holders. As I said, I believe there might be 5 some small riparians who may have filed statements. 6 MR. HOWARD: We'll look into it. 7 MR. LILLY: Yeah, let me know. We're not -- that was 8 the intent. 9 MR. HOWARD: Okay. 10 HEARING OFFICER CAFFREY: All right, gentlemen, thank 11 you for the colloquy. And we'll go to Ms. Leidigh. 12 MS. LEIDIGH: I have a couple of questions. 13 MR. LILLY: All right. 14 MS. LEIDIGH: Following up a little bit -- 15 HEARING OFFICER CAFFREY: Pull the mic over, Barbara, 16 we can't hear you. 17 MS. LEIDIGH: I'm sorry. Following up a little bit 18 on Mr. Howard's question and your response, there's an 19 exception with respect to the Term 91 in any new water 20 right permits. It says at the end of that sentence, it 21 says, "Except for any permit issued on State filing may be 22 for 1965." 23 And my question is: Are there State filed 24 applications on the Yuba River that have not been assigned, 25 or approved? CAPITOL REPORTERS (916) 923-5447 320 1 MR. LILLY: And the answer to that is, yes. I 2 believe there's -- according to Mr. Greydanus there are 3 three. And basically that's to leave an opening for them. 4 The argument would be if they have much more senior 5 priorities they shouldn't be put in a junior priority 6 position that they would not otherwise be subject to. 7 MS. LEIDIGH: I see. All right. 8 MR. LILLY: You can look that up, too, obviously. 9 But I think according to Mr. Greydanus, there's three State 10 filings on the Lower Yuba River. I'm not sure what the 11 exact amounts are. 12 MS. LEIDIGH: Is there any likelihood that Yuba is 13 going to be asking to have those assigned sometime in the 14 next few years? 15 MR. LILLY: At this point, no. As you're probably 16 aware, the major concern in Yuba County is too much water. 17 They've had serious problems with levee breaks and flooding 18 during the last couple of years. And they are engaged in a 19 detailed study of basically, "What's the best alternative 20 to prevent future floods?" And it is possible that out of 21 that process will come a proposal for some kind of new 22 storage facility for both flood control and potentially to 23 finance it also for a water supply. So at that time the 24 State filing could come into play, but at this point 25 there's no specific filing. CAPITOL REPORTERS (916) 923-5447 321 1 MS. LEIDIGH: Now, if the Board were to, as part of 2 this process, revise Standard Permit Term 91, said that it 3 affected water right holders with different priority 4 levels, is this provision intended to prevent a revised 5 Term 91 from being applied to the priority level that a 6 pre-1965 State filing would have? 7 MR. LILLY: The answer is I think there only are the 8 four entities that I mentioned. Water rights would be 9 subject to that -- that issue that would be the Yuba County 10 Water Agency, Browns Valley, Cordua, and Hallwood. And as 11 to them, this agreement is supposed to take the place of 12 any State Board Order. 13 So as to them the answer is: Yes, we would expect 14 this agreement to govern their water rights and not revise 15 Permit Term 91. As we talk today I cannot think of any 16 other water right holder that would be subject to that 17 issue that you just raised. This agreement does not affect 18 water right holders on -- in the Yuba River watershed 19 upstream which are not in Yuba County. So those are the 20 only other ones that I could potentially see that would 21 come within the scope of that. And the answer for those -- 22 them, either they work out an agreement or they're subject 23 to whatever the Water Board does. 24 MS. LEIDIGH: Okay. Do you think that the State 25 Board has the ability to make a determination now as to CAPITOL REPORTERS (916) 923-5447 322 1 what it would be able to do in the future under Term 91 so 2 far as establishing that, or would it have to wait until it 3 actually had those applications in front of it before it 4 decided whether Term 91 was placed in them or not? 5 MR. LILLY: I -- I think your question only could -- 6 only would apply to the State filings. As I understand 7 it -- 8 MS. LEIDIGH: Yeah. I'm talking about the State 9 filings. 10 MR. LILLY: Right. And as to them it's a little hard 11 to say -- I mean I don't think the Board should or could 12 limit its discretion. And, obviously, as you know, if 13 there's a petition for an assignment of a State filing and 14 an application permit based on State filing, the Board has 15 to look at the whole gamut of the public interest issues. 16 I don't see that this agreement would limit the Board's 17 discretion to do that. This agreement does define what 18 these parties' position are regarding that, but I think the 19 Board would have its discretion to rule on that. We're not 20 intending to limit them. We're not intending to limit 21 them. I think you would agree we probably can't limit 22 them. I don't think the Board would want to issue a 23 decision now limiting its discretion in the future. 24 MS. LEIDIGH: Yeah. Okay. My other question is: 25 You indicated that Yuba will probably be filing change CAPITOL REPORTERS (916) 923-5447 323 1 petitions, or petitions; when do you expect to do that? 2 MR. LILLY: I knew you were going to ask that 3 question. I can't give a specific schedule, part of it 4 depends on -- obviously, will be driven when your hearing 5 notice is, but we would try to get them on file within a 6 month if possible. Obviously, you need those as soon as 7 possible. 8 MS. LEIDIGH: Yes, the sooner the better. I think 9 that covers my questions. 10 MS. WHITNEY: I've got a question. 11 HEARING OFFICER CAFFREY: Ms. Whitney has a question. 12 13 MS. WHITNEY: This is in regard to the State filings 14 and Term 91. Is this agreement intended to prevent the 15 exporters from requesting Term 91 be inserted in any 16 permits that might be issued on the State filings and would 17 that also apply to DWR and the Bureau? 18 MR. LILLY: This agreement basically does not address 19 what would happen on a State filing. It says that we 20 expect that Term 91 would be applied on any other 21 application, but it does not address one way or the other 22 what would happen with Term 91 vis-a-vis a State filing. 23 The major concern we have is we don't want someone 24 coming back -- if there is a State filing, we do not want 25 them coming back and saying, "Well, as part of you getting CAPITOL REPORTERS (916) 923-5447 324 1 a State filing you have to dedicate half the yield in the 2 Delta at no expense." That's the sort of thing that we're 3 talking about here. Obviously, we're not intending that 4 the State filing could be used to somehow circumvent the 5 Bay-Delta requirement. We just don't want an unfair and 6 disproportionate burden placed on an application made with 7 the State filing. They're going to be subject to whatever 8 Delta requirements the State filings are subject to at that 9 time. 10 HEARING OFFICER CAFFREY: Any other questions? Does 11 that complete the presentation on the Yuba River Agreement? 12 MR. LILLY: That is correct, Mr. Caffrey. I talked 13 to Mr. Sandino and he said he'll just wait until you call 14 his card somewhere in the order, and that he can make DWR's 15 comments at that time. He said he'll wait his time. 16 Thank you very much. 17 HEARING OFFICER CAFFREY: Thank you, Mr. Lilly. And 18 thank you, Mr. Schulz. That will then take us to the 19 commentary cards, and we'll take the same order we had 20 earlier on the previous agreement, that is the order for 21 the day. 22 Steve Ottemoeller. 23 MR. OTTEMOELLER: Mr. Bermingham has a comment. 24 HEARING OFFICER CAFFREY: All right. Thank you, sir. 25 Welcome again, Mr. Bermingham. Welcome. CAPITOL REPORTERS (916) 923-5447 325 1 MR. BERMINGHAM: In response to the question that was 2 raised by Mr. Howard, there are a number of other districts 3 that would be covered by the Yuba -- the Yuba Agreement. 4 And those are districts which have contractual rights with 5 the agency itself. For instance, Ramirez Water District 6 has a contractual entitlement to receive Yuba County Water 7 Agency water. And those districts would also be covered by 8 this agreement. And that's the expectation of the 9 potential exporters. 10 HEARING OFFICER CAFFREY: All right. Thank you, 11 Mr. Bermingham. Dave Schuster? Not here for the moment. 12 Michael Jackson? 13 Good morning and welcome back, Mr. Jackson. 14 MR. JACKSON: Thank you, sir. First of all I 15 would -- I'm here today representing the Regional Council 16 of Rural Counties. I'm not here representing the 17 California Sport Fishing and Protection Alliance. 18 HEARING OFFICER CAFFREY: Duly noted. 19 MR. JACKSON: I would like to very clearly agree with 20 Mr. Lilly's analysis that this particular decision is not a 21 decision that has anything to do with the 1992 hearing that 22 we went through and what the appropriate in-stream flows 23 ought to be on that river. Those of you who were there at 24 that time fully understand that that is a different issue. 25 I represent a different client. CAPITOL REPORTERS (916) 923-5447 326 1 In these particular circumstances, the Regional 2 Council of Rural Counties has no objection to -- to Yuba 3 County Water Agency, or any of the other Sacramento Valley 4 irrigation districts, donating their water to the Delta. 5 Whatever price they want to work out with that, that's 6 fine. We do not believe that there is any obligation on 7 the part of any one upstream of the Delta to deal with 8 Delta obligations. 9 We do not want the Board to assume that because 10 Yuba, or someone else in Northern California has bought the 11 idea that this 300,000 acre figure, which seems to be 12 pulled out of whole cloth, is one that needs to be met by 13 this Board. We support flow alternative two in the State 14 Board's alternatives. That alternative is consistent with 15 the area of origin, watershed of origin laws. These 16 projects were built with the expectation that they would 17 take care of the problems that they caused in the Delta. 18 And so at this point we would object to the State 19 Board using a 300,000 number, or any other number higher 20 than zero as a requirement for the folks in Northern 21 California. And we believe that any such change would be a 22 complete change in not only the law, but the equity of the 23 situation since we relied on these arrangements. 24 The State licenses are important to us, because 25 they are our future water supply. They were developed for CAPITOL REPORTERS (916) 923-5447 327 1 the reason, to supply our future needs. And we would 2 object to any consideration of State licenses and how they 3 are to be used in this particular hearing. That said, if 4 Yuba County Water Agency wants to settle out because they 5 believe they have a potential liability, that's up to them 6 individually. 7 We -- we do believe that there is a risk in this 8 300,000 figure. You're going to have some of the biggest 9 agencies in Northern California come to you, and they are 10 going to give you some settlement numbers. There is -- 11 there are a tremendous number of people in Northern 12 California both presently and in a -- in a future sense 13 would depend upon the water of Northern California. And so 14 having the larger irrigation districts sign an agreement in 15 which they buy off on this supposed 300,000 contribution 16 from Northern California before the hearing is very 17 problematical in terms of the other individuals who may 18 hold water upstream. 19 In any event, we do support Yuba County going 20 forward trying to attempt to solve its problems in terms of 21 the Delta contribution. And we want to make it very clear 22 that this is purely, in our minds, a voluntary approach on 23 their part. And that the State Board in adopting this -- 24 these particular settlements should not be in a 25 circumstance in which it binds itself to this 300,000 CAPITOL REPORTERS (916) 923-5447 328 1 number, because we believe that that number is simply a 2 matter of convenience to the parties who have signed the 3 document, has no scientific support, no public trust 4 support, no Article 10 Section 2 support, and violates the 5 area of origin, the watershed origin and the Delta 6 Protection Act. 7 Thank you. 8 HEARING OFFICER CAFFREY: Thank you, Mr. Jackson. 9 Any questions? None from the Board Members, none from the 10 staff. Thank you, sir. 11 Alf Brandt. 12 MR. BRANDT: I'm Alf Brandt, Department of Interior, 13 again. I'll just note that both Mr. Schulz and Mr. Lilly 14 made some comments about the Bureau of Reclamation being 15 the backstop. Again, this may be repetitive, but again we 16 have not -- we have just in the last couple weeks our 17 operators have started to meet with their operators to talk 18 about it. 19 I guess I want to emphasize this message as much 20 for you, the Board, as much as for the audience and all 21 those out there who may have agreements where you think 22 we're going to be the backstop for, get us involved. We 23 finally got a February draft of this agreement in March and 24 we started to hear about it. We've gotten our operators 25 and we're moving on it, but there's a lot of issues here CAPITOL REPORTERS (916) 923-5447 329 1 that need to be resolved. So if you're asking about the 2 status of these agreements, it's important to note that 3 we've got a lot of way to go and we apply the same criteria 4 and say, "We've got to deal with these issues, but we've 5 got a long road ahead." 6 HEARING OFFICER CAFFREY: You have many more 7 advocates than you thought you did, Mr. Brandt. Thank you, 8 sir. 9 David Sandino. Welcome back, Mr. Sandino. 10 MR. SANDINO: Good morning, again. I'm David Sandino 11 on behalf of the Department of Water Resources. The 12 Department has reviewed and supports the settlement 13 agreement for the Yuba River reached by the export 14 contractors/Yuba County Water Agency. The Department 15 believes that this settlement is an important first step to 16 achieving settlement on the entire Sacramento Valley; and 17 that this settlement will serve as a catalyst to reach 18 consensus on other tributaries to the Sacramento River. 19 The Department would like to emphasize that this 20 settlement still requires additional agreements to be 21 reached between the Department, Yuba Water County Agency, 22 the Bureau, and other export contractors as was mentioned 23 by earlier speakers. These additional agreements include 24 ones relating to: 25 One, Proposition 204's funding of Yuba's project CAPITOL REPORTERS (916) 923-5447 330 1 to assist in meeting the Water Quality Plan; two, a method 2 of scheduling the settlement water; and, three, payment for 3 the settlement water. 4 The Department has established a team to work on 5 these agreements with the other parties. It is conceivable 6 that for this settlement to work the main contractual 7 vehicle may need to be an agreement between the Department 8 and Yuba County Water Agency. As was mentioned earlier, 9 the agreement also provides that Yuba River's obligation to 10 meet Delta objectives be limited to the release of this 11 settlement water and that the Department and the Bureau are 12 responsible for providing any additional water imposed by 13 the Board to meet Yuba's obligation to meet Delta 14 objectives. The Department has agreed to meet its share of 15 this responsibility and details for this will be worked out 16 in one of the other agreements referred to earlier. 17 Does the Board have any questions? 18 HEARING OFFICER CAFFREY: Thank you, Mr. Sandino. 19 Questions from the Board? 20 MEMBER BROWN: No. 21 HEARING OFFICER CAFFREY: Any from the staff? Thank 22 you again, sir. 23 MR. SANDINO: Thank you. 24 HEARING OFFICER CAFFREY: Virginia Cahill. Welcome 25 again, Ms. Cahill. CAPITOL REPORTERS (916) 923-5447 331 1 MS. CAHILL: Thank you. I don't really have any 2 comments, but I have something of a question. I'm just 3 trying to understand what's being proposed. Is the 300,000 4 the sum total that would need to be acquired to satisfy the 5 entire Sacramento Valley's obligation to Bay-Delta? 6 MR. WINKLER: As a settlement target. 7 MS. CAHILL: As a settlement target. And you believe 8 that would be adequate, then, to meet all the standards in 9 the Delta? 10 MR. WINKLER: The current standards. 11 MS. CAHILL: And so if the 300,000 were able to be 12 acquired, then there wouldn't be need to go after all the 13 other individual water right holders listed in the Board's 14 hearing notice? 15 MR. WINKLER: The 300,000 is a condition -- 16 HEARING OFFICER CAFFREY: Mr. Winkler, could you come 17 up to the mic? 18 MR. WINKLER: Yeah. Sorry, Cliff Schulz had to 19 leave. I'll take a shot at this. The 300,000 acre feet is 20 a grand total settlement amount for the Sacramento Valley. 21 So the question is: Would there be remainder for other 22 users? It is the grand total that we're looking for in 23 terms of a settlement. 24 MS. CAHILL: And if you didn't reach it, then there 25 would be settlements with some people and other people are CAPITOL REPORTERS (916) 923-5447 332 1 still out there subject to Board hearing? 2 MR. WINKLER: That's correct. If we didn't -- 3 obviously, we're going to try to settle with as many 4 entities as possible. And I guess if there is a remainder 5 I guess that would be the subject of your phase two 6 hearing. 7 MS. CAHILL: Okay. Thank you. 8 HEARING OFFICER CAFFREY: Let the record show that 9 this was an indulgence on our part for Ms. Cahill to get 10 some clarification, not to cross-examine. 11 MS. CAHILL: Right. I was trying to understand. 12 HEARING OFFICER CAFFREY: And that's the spirit in 13 which it was taken, Ms. Cahill. Thank you very much. 14 Jean Zolezzi? Tim O'Laughlin? 15 Welcome back, sir. 16 MR. O'LAUGHLIN: Thank you. Tim O'Laughlin on behalf 17 of the San Joaquin River Group Authority. We support the 18 process that led to the Settlement Agreement. We 19 anticipate supporting this Settlement Agreement. We will 20 be reviewing this agreement and will provide the State 21 Water Resources Control Board our comments on the 22 Settlement Agreement. 23 Thank you. 24 HEARING OFFICER CAFFREY: Thank you, sir. 25 Steve Macaulay? CAPITOL REPORTERS (916) 923-5447 333 1 MR. MACAULAY: No comments. 2 HEARING OFFICER CAFFREY: Thank you, sir. Tom Graff 3 I believe is not here. Kevin O'Brien? 4 MR. O'BRIEN: No comment. 5 HEARING OFFICER CAFFREY: No comment. Department of 6 Fish and Game. Is that Mr. White, again? 7 Welcome back, sir. 8 MR. WHITE: Thank you. I'll try to keep the pace of 9 my speech at something a little more reasonable this time. 10 The Department of Fish and Game provided comments to the 11 Yuba County Water Agency on its draft mitigated negative 12 declaration for proposed outbreaks of changes related to 13 the kind Yuba County Water Agency/Bay-Delta Settlement 14 Agreement. Copies of our comments are available here 15 today. 16 One of the issues that we raised in that letter 17 relates to have how the Yuba settlement would fit into the 18 overall picture here. And a lot of questions have been 19 raised on that topic here today. And it appears as if the 20 details and the answer to that issue remain to be decided. 21 In addition, we noted that the Yuba Settlement Agreement 22 may adversely affect spring-run chinook salmon and 23 steelhead in the Yuba River. Consequently, further 24 analysis and consideration of the agreement by the DFG and 25 the State Board is necessary. CAPITOL REPORTERS (916) 923-5447 334 1 The Department of Fish and Game will continue to 2 evaluate the proposal to the Settlement Agreement based on 3 information received by the Board regarding the agreement 4 during this workshop. And, finally, the Department of Fish 5 and Game agrees with Yuba County that the baseline fishery 6 flows necessary for the Yuba River were not included in the 7 notice for the Bay-Delta Hearings. Mr. Lilly urged this 8 Board not to delay the proposed Yuba Settlement Agreement 9 while waiting for a State Board determination regarding the 10 necessary fishery flows. However, delay is not necessary, 11 as the Board has already held a hearing and received 12 extensive evidence from DFG and other parties regarding 13 necessary fishery flows. 14 It would be helpful to know Yuba County's 15 in-stream flow obligations in the Yuba before proceeding to 16 determine their fair share contribution to meet Bay-Delta 17 Standards. These two obligations are not likely to be the 18 same. 19 Thank you. 20 HEARING OFFICER CAFFREY: Thank you, Mr. White, 21 appreciate you taking the time again. I don't know if 22 we're going to see you again here. I know you have four 23 speakers. 24 MR. WHITE: I think you've got a new face next time. 25 HEARING OFFICER CAFFREY: Thank you, sir. Ralf CAPITOL REPORTERS (916) 923-5447 335 1 Carter? Bill Baber? 2 Welcome back, sir. 3 MR. BABER: Chairman Caffrey, Members of the Board, 4 good morning -- it's almost afternoon. 5 HEARING OFFICER CAFFREY: Little while yet. 6 MR. BABER: Getting close. My name is Bill Baber. 7 I'm with the Minasian Law Firm in Oroville. And I'm here 8 today representing a number of clients in the Sacramento 9 Valley. So I may be expanding my presentation beyond just 10 commenting on the Yuba County proposed settlement, so I 11 hope you will bear with me a little bit. I should get into 12 the structure of the settlement process and maybe that will 13 eliminate a lot of the stuff that I was going to say later 14 on. If that's okay, it shouldn't take me too long? 15 HEARING OFFICER CAFFREY: All right, sir. We have 16 been allowing the formulation of a context in which to -- 17 MR. BABER: To expand. 18 HEARING OFFICER CAFFREY: -- receive comments, 19 although we will -- I also want to remind you -- that's 20 fine. I want to also remind you that we will have a period 21 after the discussion of the Suisun Marsh Preservation 22 Agreement where we can have closing -- rather the 23 presentation of other agreements. And then after that, 24 closing statements if anybody wishes to make any. Please 25 proceed. CAPITOL REPORTERS (916) 923-5447 336 1 MR. BABER: Thank you. I'm representing the Feather 2 River Diverter Group, and I know Mike Sexton made some 3 comments on the Mokelumne. And we neglected to make -- 4 initially I should have jumped up on the Mokelumne and East 5 Bay MUD agreement, because we felt as I think Mr. Stubchaer 6 felt that it related simply to that particular river flow. 7 Of course, I agree with Mr. Sexton. We didn't 8 want to have any water taken from our water rights from our 9 clients as Mr. Brown noted. So the Feather River Diverter 10 Group includes Biggs West-Gridley, Richvale, Butte, and 11 Sutter Extension Water District so the Joint Water District 12 Board and the Western Canal Water District, 13 Oroville-Wyandotte Irrigation District, a couple of smaller 14 districts a little southeasterly of the Sutter Extension 15 represented by Mr. Gallery who we are including here to the 16 regional water company, Garden Highway. We are also 17 picking up Cordua Irrigation District's pre-1914 rights and 18 we will defer to the staging of the water rights hearing 19 process where the Yuba County Settlement Agreement is given 20 opportunity for exploration by all parties, because we 21 don't think there will be any impairment with the Cordua 22 pre-1914 rights by the terms of the agreement. I haven't 23 discussed that with Mr. Lilly. 24 We're also representing Los Molinos Mutual Water 25 Company, M&T Ranch, Nevada Irrigation District, Paradise CAPITOL REPORTERS (916) 923-5447 337 1 Irrigation District, Orland Unit Water Users, Reclamation 2 District 1004, Plumas Mutual Water Company. And then the 3 exchange contractors are picked up by Mike Sexton, and they 4 are currently a participant in what looks like will be a 5 settlement through VAMP if approved by this Board and other 6 parties, including environmentalists, hopefully. 7 I think I want to diversify my comments into two 8 things, first, the settlement process overall; and then the 9 structure of the hearings. Basically our clients support 10 any settlement achieved by a Bay-Delta hearing participant 11 provided that the settlement is scientifically based and 12 geared to protecting Delta water quality and scientifically 13 using fresh water flows to improve the fisheries as opposed 14 to simply demanding more fresh water flows for in-stream 15 uses. 16 Additionally, settlements supported by our clients 17 must, one, preserve the concept of senior water rights 18 developed by California's water right priority system 19 without reducing, conditioning, or limiting those rights. 20 And, two, compensation must be an element of the settlement 21 agreement. 22 In light of those -- that settlement process, let 23 me move into the structure of the balance of these hearings 24 and tell you first that we will be filing a motion by the 25 end of this month, which is I think Wednesday of next week CAPITOL REPORTERS (916) 923-5447 338 1 or Thursday, to reopen 990 and 1275 which basically 2 requires the State Water Project and the Central Valley 3 Project to finish and conclude those hearings before the 4 Board to tell us why they need additional surplus water to 5 meet those standards that were given by the Board in 1961 6 and '67 when those two decisions were adopted. 7 The structure of the hearing should -- and 8 hopefully, Barbara, you'll get a copy of that by the 30th 9 of this month. The structure of the hearings is basically 10 phase one was settlements. And we assume that will just 11 continue on as settlement discussions are continuing 12 through this process. And as they are reached we suppose 13 someone would pop up with a request for a hearing and 14 approval. And at that time that would be accommodated by 15 the Board. 16 Phase two, we presume, would be the point of 17 diversion, joint point of diversion issue between the State 18 and Federal Projects then maybe combine that with the 19 requested Bureau consolidation of the CVC place of use. 20 And we would prefer that there be a phase three for the 21 hearing of the remainder of the water right holders in the 22 water system who have not reached settlement, or have not 23 gone through this hearing process to determine whether 24 their water rights are impacted and required to be given a 25 certain portion to the Delta as their contribution, so to CAPITOL REPORTERS (916) 923-5447 339 1 speak, to the Delta fix. 2 And let me back -- I guess, mention now the 3 300,000 acre foot number should not be considered by this 4 Board as the fixed number which is to be contributed to by 5 all of the water entities in the Sacramento Valley as their 6 prorated contribution to fixing whatever is wrong with the 7 Delta right now, because our clients are demanding that 8 their attorneys say that they have no cause of any problem 9 in the Delta. They have never contributed to any harm in 10 the Delta. And they object to contribution of any water 11 supplies to fix the Delta. And the 300,000 acre foot 12 number is just something that's thrown out there as a means 13 of settlement discussions. 14 With that in mind, I'll say that the Feather River 15 diverters, particularly the Joint Board and Western Canal, 16 feel they have already settled their problems with the 17 State Board by entering into agreements with the Department 18 of Water Resources. In fact, the Department of Water 19 Resources requires that these Feather River diverters 20 object to any proceedings trying to impair their water 21 rights. And, in fact, for the Joint Board, the Department 22 of Water Resources should be right here with me raising my 23 objections. And Mr. Sandino should be walking up here 24 right now and saying, "Mr. Baber, we support you and the 25 agreement that your clients entered into scheduling the CAPITOL REPORTERS (916) 923-5447 340 1 amount of acre feet for delivery to you and giving you the 2 right to store your pre-1914 supplies behind Oroville Dam 3 and Reservoir." 4 And Mr. Sandino for the State should say for DWR, 5 "That's why you allowed us to build Oroville Dam, because 6 you were diverting water and growing agricultural products 7 and the only reason you allowed us to build that dam is if 8 we agreed with you that we would deliver a certain number 9 of acre feet of water supplies to you on annual, monthly, 10 and weekly bases each year subject to the fishery payments, 11 subject to contractual basis." And they still have that 12 obligation. It should not be unimpaired -- be impaired, 13 excuse me, by these proceedings. We don't expect it to be. 14 And I would, certainly, hope that DWR would say the same 15 thing. We're in the process of talking to them about that. 16 We are also in the process in terms of settlement 17 negotiations for any of the clients that I've named here. 18 We are pursuing settlement negotiations. We're open to 19 talking. We've talked with Cliff, Dave Schuster, we've 20 talked to Ed Winkler, and the whole group. Those are still 21 ongoing. We don't choose to discuss the content of those 22 settlement negotiations, which may involve this 300,000 23 acre foot number, because we don't want to give it that 24 dignity before this Board. And we are very concerned that 25 you would assume that that number is a contribution that we CAPITOL REPORTERS (916) 923-5447 341 1 must give to satisfy some legal obligation that we may 2 incur, which seems to be coming out of nowhere. And with 3 that, I'll stop talking. 4 Any questions? 5 HEARING OFFICER CAFFREY: Thank you, Mr. Baber. Any 6 questions of Mr. Baber? 7 MEMBER BROWN: I do. 8 HEARING OFFICER CAFFREY: Mr. Brown. 9 MEMBER BROWN: Mr. Baber, does that position include 10 the waters that during the years that are surplused to the 11 needs of the districts? Is that the same position for that 12 water, too? 13 MR. BABER: Yes, it is, Mr. Brown. 14 MEMBER BROWN: Thank you. 15 HEARING OFFICER CAFFREY: Anything from staff? Thank 16 you, Mr. Baber, appreciate your comments. 17 MR. BABER: Thank you. 18 HEARING OFFICER CAFFREY: Paul Simmons? Andrew 19 Hitchings? 20 MR. HITCHINGS: No comment. 21 HEARING OFFICER CAFFREY: Patrick Wright, I don't 22 think he's here. Mr. Thomas, not here. Steve Chedester? 23 Roger Guinee? Did I get it right that time, sir? 24 MR. GUINEE: Yes, sir. 25 HEARING OFFICER CAFFREY: Apologize for all those CAPITOL REPORTERS (916) 923-5447 342 1 other times. 2 MR. GUINEE: No need to apologize. Mr. Caffrey, and 3 Members of the Board, my name is Roger Guinee. I'm a 4 fishery biologist with the U.S. Fish and Wildlife Service 5 here in Sacramento and have been -- have been participating 6 in development and implementation of the Anadromous 7 Restoration Program. 8 Just a couple of brief comments reiterating what 9 Mr. Brandt said earlier. Fish and Wildlife Service, 10 Department of Interior, have developed some criteria for 11 evaluating proposed agreements such as the Yuba Agreement, 12 Mokelumne River Agreement. We are in the process now of 13 reviewing those and will provide, you know, more detailed 14 comments at further Board hearings, or other processes that 15 you decide upon. 16 I wanted to mention as well that from a biological 17 prospective the timing and the schedule of releases is an 18 important consideration when evaluating potential impacts 19 on fishery and aquatic resources in the Yuba River, or any 20 other river. And then briefly on the historical context as 21 was referred to earlier, the Fish and Wildlife Services did 22 participate in the 1992 hearings before the Board on the 23 in-stream flow needs of the Yuba River. So our review of 24 this agreement will be considering what we have said and be 25 consistent with what we've said in those previous Board CAPITOL REPORTERS (916) 923-5447 343 1 hearings. 2 Finally, I want to mention as well that the Yuba 3 River, as you know, is biologically and hydrologically 4 connected to the Delta and the steelhead and salmon that 5 use the river migrate through the Delta to the ocean. So 6 that in terms of a biological and ecological perspective, 7 I'll just call your attention to one of our criteria is the 8 proposed agreements have the opportunity and are -- we 9 believe the Board should consider the opportunity to 10 include specific consideration of in-stream flow needs on 11 each tributary in helping to meet the Water Quality Control 12 Plan's narrative salmon objective. And with that said, 13 I'll close my remarks. 14 HEARING OFFICER CAFFREY: Thank you, Mr. Guinee. 15 Questions of Mr. Guinee? Anything from staff? Thank you 16 for sharing your thoughts and concerns with us, sir. 17 Thomas Shephard? Reid Roberts? Michael Sexton? 18 Welcome back, sir. 19 MR. SEXTON: Thank you. Mr. Caffrey and Members of 20 the Board, Michael Sexton on behalf of the Exchange 21 Contractors, a point of clarification. The motion that 22 Mr. Baber referred to reopen B 990 and 1275 will not be 23 joined by the Exchange Contractors at this point in time. 24 Thank you, sir. 25 HEARING OFFICER CAFFREY: All right. Thank you for CAPITOL REPORTERS (916) 923-5447 344 1 that point of clarification, sir. 2 Cliff Schulz is -- I believe he's going to be back 3 this afternoon for other items. Gary Bobker I believe is 4 not here. Lowell Ploss. 5 MR. PLOSS: I defer to Ralf Brandt. 6 HEARING OFFICER CAFFREY: All right, sir. Dan 7 Gallery? 8 MR. GALLERY: No comment. 9 HEARING OFFICER CAFFREY: No comment, sir. Patrick 10 Porgans I believe is not here. Alex Hildebrand I believe 11 is not here. Dante Nomellini? 12 Welcome back, Dante. 13 MR. NOMELLINI: Dante John Nomellini, again, on 14 behalf of Central Delta Water Agency. I should clarify I 15 have a couple of other clients that are named in our Notice 16 of Intent to Appear and I intend by my presence to 17 represent them as well. 18 Again, we're concerned about and object to any 19 piecemeal settlement in the water rights phase. I'd like 20 to make a little more positive spin on our position. I 21 attempted to state it at the outset of how we thought the 22 procedure could be followed to eliminate the necessity of a 23 Delta Water Rights Hearing. If, in fact, we had a total 24 settlement being proposed by DWR and the Bureau, which they 25 haven't done, but they have language about being a backstop CAPITOL REPORTERS (916) 923-5447 345 1 and all of this kind of thing, if they're really saying 2 that, yes, we're willing to continue to meet Delta Water 3 Quality Standards for whatever interim period of time, 4 everything we do is pretty much interim, on the basis that 5 we could obtain water from other supplies in the basin -- I 6 tried to characterize them earlier as basically water 7 transfers, but these agreements are a lot more complicated 8 than that. 9 It's a no further obligation -- I could argue with 10 you over your Term 91, which I question as to how you come 11 to origin of principles and stuff like that. But in any 12 event, if we were talking about a settlement proposal that 13 encompassed the whole thing by the Bureau and the State 14 coming forward and saying, "Well, there is where we're 15 going to get this water," and this, on that basis there's 16 no need for a Delta Water Rights proceeding. 17 Then we could focus on the particular transfers of 18 water and the third-party impacts that are involved. And 19 then the question of where the money comes from to fund 20 them, you know, I heard this talk about Sandino coming up 21 committing Prop 204 funds. What went through my mind is: 22 Who is really going to allocate these Prop 204 funds, the 23 public monies? We're going to give water to these 24 contractors with the Prop 204 funds. 25 That would be the worse characterization you could CAPITOL REPORTERS (916) 923-5447 346 1 give to those, but I think we have to be sensitive but I 2 wasn't aware that you people have a duty to sign off on 3 those 204 funds by proving consistency with the Water 4 Quality Control Plan. That's a new one I hadn't thought 5 about as to what that does. But it concerns me that we're 6 dealing with all these things at one time. 7 HEARING OFFICER CAFFREY: We get all the fun jobs. 8 MR. NOMELLINI: And it's going to get more 9 complicated, too. 10 MEMBER BROWN: Mr. Chairman? 11 HEARING OFFICER CAFFREY: Mr. Brown. 12 MEMBER BROWN: Before you leave that, you said give 13 water to the contractors with the Prop 204 -- 14 MR. NOMELLINI: Well, you heard the testimony come up 15 from the various water contractors' representatives, and 16 I'm distinguishing those from the DWR, talking about the 17 300,000 acre feet and they're getting this contribution 18 down and they're willing to have money paid to get it -- 19 MEMBER BROWN: You visualize that 300,000 acre feet 20 going to the contractors? 21 MR. NOMELLINI: I think some of it does, yes. Let's 22 assume -- let's characterize it where they -- the water 23 projects have the total obligation. Let's assume that's 24 the fact that they have the total obligation to meet 25 requirements in the Delta, because they caused the damage. CAPITOL REPORTERS (916) 923-5447 347 1 That means there's X amount of water that goes to the 2 contractors. So we can get extra water in here from other 3 sources, it means the contractors will get more than they 4 would have otherwise gotten had the State and the project 5 and the federal government had them meet all its 6 commitments out of the project. So, yes, to me you follow 7 it right on through. That shouldn't bother us. 8 The idea if we had a total settlement -- and the 9 environmentalists aren't here, they have some concern about 10 using restoration funds to pay for some of the water. And 11 I don't -- I wasn't in on those deals on the CVPIA and all 12 of that. And so I don't know what type of infringement 13 that constitutes on what they thought they had agreed to. 14 But the concept of a total settlement -- now, I'm 15 going to go back, I'm trying to get back on this positive 16 deal, the total settlement, somebody comes in here and 17 says, "We need get to get rid of this Delta hearing, we're 18 all going to go fishing this summer instead of sitting here 19 in these water rights proceedings." And they come forward 20 and say, "We're going to get this water over here, and get 21 this water over here." All right. All right, worry about 22 third-party impacts, I think we can work our way through it 23 and then where do we get the money? 24 Some money comes out of contractors, some money 25 comes out of public funds, or whatever, our clients have CAPITOL REPORTERS (916) 923-5447 348 1 never had an objection to trying to use public funds to 2 help settle the waters, because of the confusion in the 3 lines of, you know, we really do not know exactly where to 4 draw the line on enhancement of fisheries, restoration, and 5 all of that. And it helps the State contractors, it helps 6 the people in the areas of origin to have these public 7 funds be used to do a positive, it helps everybody, you 8 know, big deal. 9 But, if we don't have a total resolution, let's 10 take the argument that they come in here and you have a 11 hearing on the water rights settlements only, we're going 12 to do that first. I heard these guys come in here, 13 Mr. Lilly, who I listened to carefully, say, "Well, we're 14 going to have a water rights settlement on our deal," but 15 then at the same time in the other breath he says, "Well, 16 if somebody is looking at our water rights we're going to 17 be here defending them and stick it on the project." 18 Well, you know our position on these water rights 19 settlements, we don't think they're proper. You make an 20 interlocutory judgment approving those, we'll challenge 21 that. And I'm not doing that just to threaten, I'm just 22 going through the process. These guys aren't going to be 23 able to sit outside and let us come in here in a water 24 rights proceeding, they're not going to want us in here in 25 front of the Board by ourselves, they're going to be in CAPITOL REPORTERS (916) 923-5447 349 1 here. We're going to have a water rights hearing just the 2 same. 3 Now, if you piecemeal it, or whatever, we're all 4 going to be here unless you've got a total solution in 5 front of you that eliminates the need for a Delta Water 6 Rights Proceeding, I see us being in the same position. 7 And I think that's a positive on my negatives in terms of 8 saying, "You can't piecemeal these things." And there's a 9 lot of stuff thrown in these agreements because they're 10 piecemealed and they're not just looking at them as a 11 supply of water for X amount of dollars. There's all these 12 other things about qualifications that I don't know how you 13 deal with them. I don't think it's appropriate. The 14 Bureau, they put their little weasel word of "sandbag" in 15 that San Joaquin Agreement that would limit their 16 obligation. 17 Their clear obligation is D-1422, is that they 18 have to meet the Vernalis Water Quality Requirement. Well, 19 they put words in there that says, reasonable flow, this 20 that and the other thing. No way. I can't even conceive 21 of you guys being willing to buy off on those elements and 22 bless them in that form of agreement. 23 Recognizing that we all want to avoid an 24 unnecessary costly process -- and I heard these guys. And 25 I know these guys. We all bump around together more or CAPITOL REPORTERS (916) 923-5447 350 1 less, going in opposite directions, of course, most of the 2 time, but they're saying to you in one breath that they're 3 backstopping all of these deals, but they haven't come out 4 and put the total solution in front of you. 5 So until we see it -- and I think we ought to 6 encourage them to come forward with the total type of 7 solution that would avoid the hearing, but we haven't seen 8 it in this process yet. And maybe this is just a stepping 9 stone to get it, but if you're going to hold hearings, 10 you're going to start them in July. So there's some work 11 that has to be done. And it's got to be done fast if 12 you're going to keep that timetable. And -- 13 HEARING OFFICER CAFFREY: I think, Mr. Nomellini, 14 that you raise a very good point. You're a lot more 15 eloquent than I am -- 16 MR. NOMELLINI: I've never been accused of that one 17 before. 18 HEARING OFFICER CAFFREY: Maybe it's a little naive 19 and Pollyanna of me, but I always in my heart of hearts and 20 dreams of dreams hoped maybe there would be another phase 21 to this. If we get 10 or 12 agreements, just quoting from 22 somebody, that those same agreers could all get in the same 23 room and figure out how to make it all work together so 24 that whatever proceeding the Board would subsequently hold 25 would be a relatively simple thing, because everybody, CAPITOL REPORTERS (916) 923-5447 351 1 including environmentalists, would be in agreement. 2 Now, if you are able to -- 3 MR. NOMELLINI: I don't have any -- 4 HEARING OFFICER CAFFREY: No, I know. 5 MR. NOMELLINI: My people don't have any water to 6 give up. In fact, if they succeeded in putting my guys out 7 of business, you'd use more water in the Delta due to 8 evaporation than we're using now farming. 9 HEARING OFFICER CAFFREY: We will do what we have to 10 do if by no other description then by default, because 11 we're going to try in every way possible to stay on our 12 schedule. And if it is somewhat adversarial, so be it, as 13 we have said. But if you or anybody else can put this 14 whole thing together to the satisfaction of all the 15 parties, I will personally nominate you to be the namesake 16 for the New Cal EPA building. 17 MR. NOMELLINI: The best thing I could do for the 18 process is try and make the positions that we will advocate 19 clear in advance to people who know what we're telling 20 them. That's the best I can do for the process. To go 21 under some figment of their imagination that you're going 22 to approve settlement agreements and then be able to have a 23 piecemeal water rights proceeding on the Delta, you know, I 24 think is naive. 25 Let's take it one step further to make it clear. CAPITOL REPORTERS (916) 923-5447 352 1 Let's take the East Bay MUD Settlement on the Mokelumne 2 River. Let's assume that that settles East Bay -- in the 3 mind of the Board, East Bay MUD's contribution to the 4 Delta, we still have the other water right holders on the 5 Mokelumne River not settled out. So the Board goes through 6 a process and they say, "Okay, Woodbridge, give us 10,000 7 acre feet." "Ha!" Woodbridge says, "Oh, bologna." They 8 file an adjudication on the Mokelumne so the settlement on 9 East Bay MUD is nothing. All it was was a chance to come 10 up before you and talk about a Settlement Agreement. It 11 hadn't really resolved the problem. 12 So we're just -- to me if you go the steps down 13 the road, where we're going to end up we've got to have a 14 settlement proposal that will dispose of the entire 15 proceeding for the interim. If you wanted to do it for 12 16 years while you found out how fish are affected, I don't 17 know, but it's got to be an all-encompassing thing. The 18 piecemeal approach, I don't think will work assuming that 19 you would go along with what they requested, isn't going to 20 resolve it. That's all. You're going to hear me two or 21 three more times if these things come up. But I will not 22 go on the positive on the negative, I'll just give you the 23 negative. 24 HEARING OFFICER CAFFREY: That was really a very 25 positive on the negative. Thank you, Mr. Nomellini. CAPITOL REPORTERS (916) 923-5447 353 1 Last card is Cynthia Kochler. And I don't believe 2 she's here today. That completes the commentary on the 3 Yuba County Agreement. Any comments from the Board Members 4 or staff? Hearing and seeing none, we'll come back this 5 afternoon at 1:15. We will resume and we will take up the 6 Suisun Marsh Preservation Agreement, and it looks like 7 we're making some good progress today. We might get 8 finished today. See you at 1:15. 9 (Luncheon recess.) 10 ---oOo--- 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 354 1 WEDNESDAY, APRIL 22, 1998, 1:18 P.M. 2 SACRAMENTO, CALIFORNIA 3 ---oOo--- 4 HEARING OFFICER CAFFREY: Resuming the workshop, the 5 time has arrived to hear the presentation on the Suisun 6 Marsh Preservation Agreement. I believe the presentation 7 is going to be made by Mr. Guivetchi; is that correct? 8 MR. GUIVETCHI: That's correct. 9 HEARING OFFICER CAFFREY: Good afternoon, sir, and 10 welcome. Are you going to be having others join you? 11 ---oOo--- 12 SUISUN MARSH PRESERVATION AGREEMENT 13 ---oOo--- 14 MR. GUIVETCHI: I will making a joint presentation, 15 the parties to Amendment Three of the Preservation 16 Agreement, but members of the other parties are available 17 today in the audience for questions. 18 HEARING OFFICER CAFFREY: Okay. 19 MR. GUIVETCHI: And let me first introduce myself. 20 My name is Kamyar Guivetchi. I'm the program manager of 21 DWR's Suisun Marsh Program. I will be providing you an 22 update on the status of Amendment Three to the Suisun Marsh 23 Preservation Agreement. And I will be doing this on behalf 24 of the four parties of the Preservation Agreement; namely: 25 The Suisun Resource Conservation District, or SRCD; the CAPITOL REPORTERS (916) 923-5447 355 1 Department of Fish and Game; the U.S. Bureau of 2 Reclamation; and the Department of Water Resources. 3 And as I mentioned, members of all four parties 4 are available here to answer any questions that you may 5 have after our joint presentation, and I'd like to 6 introduce Mr. Lee Leman of the Suisun Resource Conservation 7 District; Mr. Frank Wernette of the Department of Fish and 8 Game; Mr. Will Keck of the U.S. Bureau of Reclamation. And 9 I will be representing the Department of Water Resources on 10 any questions that you may have. 11 The first thing I'd like to do is reiterate that 12 in preparation of this workshop we provided documents to 13 the State Board; the April 8th, 1998, version of the Suisun 14 Marsh Preservation Agreement as well as the April 1998 15 revision to what we call the demonstration document. Both 16 of these documents were provided to the State Board last 17 September; earlier versions of them and these versions 18 update those. Both of these documents are available on the 19 Internet site. 20 And I believe a reference is provided on the State 21 Board site to get to these documents. We also have hard 22 copies, or paper copies, for those individuals who are 23 interested. In addition, in preparation of this workshop 24 we have a document that we had available out front, the 25 joint update, or statement by the four parties. And, CAPITOL REPORTERS (916) 923-5447 356 1 again, we're out of copies, and if people are interested we 2 will provide additional copies to you. 3 Also, I'd like to mention that last September the 4 four parties provided the State Board a Letter of Intent to 5 execute the Suisun Marsh Preservation Agreement, excuse me, 6 signed by all four parties. In fact, all four parties in 7 principle had agreed on the Amendment Three to the 8 Preservation Agreement a year ago. And the last year we 9 spent preparing the environmental CEQA/NEPA document for 10 these actions and provisions of Amendment Three. And that 11 document will be ready for distribution by the end of this 12 month. And, again, we'll make copies of that available 13 both on the Internet and hard copies will be distributed 14 for the standard of normal CEQA/NEPA review. 15 I do have some overheads today, and what I'd like 16 to note is that the overheads are really bulleted excerpts 17 of our joint statement, only as talking points for the 18 State Board. So anyone who has copies of the joint 19 statement can essentially follow along in sequence; 20 however, if anyone would like copies of our overheads we 21 will provide them -- provide them to them. 22 HEARING OFFICER CAFFREY: Thank you, Mr. Guivetchi. 23 You saved me the trouble of repeating all that. 24 MR. GUIVETCHI: You're welcome. What I'd like to do, 25 then, and I'm going to see if I can kind of do it like CAPITOL REPORTERS (916) 923-5447 357 1 this, and if people cannot hear, please, mention it and I 2 will try to accommodate. 3 I'd like to get -- cut to the chase and in a 4 clamshell tell you what we would like you to take away from 5 our presentation today. First and foremost, is that we've 6 concluded negotiations on Amendment Three to the 7 Preservation Agreement. Second, that the parties have 8 identified in this process supplemental actions and 9 provisions that we believe improve the Marsh habitat on the 10 managed wetlands. And, in addition, we believe that these 11 provisions and actions will first meet the 1995 Water 12 Quality Control Plan Suisun Marsh objectives for the 13 Western Marsh as well as the Eastern Marsh. 14 Secondly, that the actions provide better 15 protection than called for in the State Board's plan in 16 many areas of the Marsh. And, thirdly, because we're going 17 to be providing equivalent and better protection to 18 Cordelia Slough and Goodyear Slough, we believe that the 19 salinity compliance stations at S-35 and S-97 are no longer 20 needed. Finally, we'll note that before we execute 21 Amendment Three we will, obviously, have to complete all 22 the necessary environmental CEQA/NEPA documentation and the 23 consultations under the California and Federal Endangered 24 Species Act. 25 Overview of our presentation, points we'd like to CAPITOL REPORTERS (916) 923-5447 358 1 present to you today, I've kind of grouped them the way I 2 have, because items one, two, and three are the purpose and 3 basis of the Suisun Marsh Preservation objectives; the 4 Water Quality Control Plan, its implementation program and 5 Order WR 95-6 as well as the original SMPA and its 6 accomplishments both kind of set up both the regulatory and 7 the contractural framework under which we divided or 8 crafted Amendment Three to the Preservation Agreement. 9 Item number four we'd like to share with you, or 10 explain to you the change conditions that led us to believe 11 that a necessity to amend the Preservation Agreement with 12 Amendment Three. And then items five, six, and seven we'll 13 try to provide to you a brief description of the 14 amendment's reactions, its purposes, the approach we took, 15 what it will take to implement the agreements, and the 16 differences between the Amendment Three as described today 17 and the Alternative Five in the Draft EIR put out by the 18 State Board for meeting Suisun Marsh objectives and then 19 some concluding remarks. 20 We feel it important to just briefly explain, or 21 reiterate what the -- the purpose and the basis of the 22 objectives for Suisun Marsh are, because that will be the 23 basis on which we will try to convince you we are going to 24 provide equivalent or better protection in the Western 25 Marsh. To quote from the Water Quality Control Plan, "The CAPITOL REPORTERS (916) 923-5447 359 1 purpose of the salinity objectives in the Suisun Marsh is 2 to provide water of sufficient quality to the managed 3 wetlands to achieve soil water salinities capable of 4 supporting the plant's characteristic of a brackish marsh," 5 end quote. 6 In the decision 1485 proceedings, the schedule of 7 monthly numeric standards that have been carried over to 8 the Water Quality Control Plan in 1995 are based on 9 salinity tolerance and growth cycle data for waterfowl and 10 food plants developed by Mall and Rollins. 11 Secondly, the entire goal or purpose of this 12 schedule of those numeric monthly standards is to achieve 13 soil salinities in the Marsh on managed wetlands in the 14 range of about nine parts per thousand total dissolved 15 solids, because that is what is felt by the Department of 16 Fish and Game is necessary to promote seed germination for 17 those plants. And, thirdly, the Department of Fish and 18 Game established management guidelines running from October 19 through May, or what we called the control season, for the 20 managed wetlands to achieve certain habitat goals. 21 The regulatory and contractual framework that 22 Amendment Three was developed under essentially started 23 with the Bay-Delta Accord and the water projects 24 essentially meeting those Accord standards in the interim. 25 So we have actually seen in real life what salinity CAPITOL REPORTERS (916) 923-5447 360 1 conditions in the Marsh will likely be with the Accord -- 2 with the -- with the objectives or flows and salinities 3 that we would likely have with the Water Quality Control 4 Plan. In fact, those same objectives, in large part, were 5 included and adopted in the '95 Water Quality Control Plan 6 with the provision that at these control sites that I have 7 here on the map to my right, we could either meet the 8 channel water salinity standards, or provide equivalent or 9 better protection based on the objectives, or the purpose 10 of those standards -- of those objectives were set in the 11 first place. 12 And finally the State Board in its program of 13 implementation recommended that the Preservation Agreement 14 agencies begin implementing measures to control soil and 15 channel water salinity to make better use of channel water 16 and to use land and water management practices as well 17 as -- as a water manager to be able to achieve the 18 objectives in the Plan. 19 The original Preservation Agreement, which was 20 signed in 1987, has objectives which are unchanged in 21 Amendment Three. And those objectives, in essence, are to 22 provide water and facilities to protect the brackish water 23 nature of the Marsh while mitigating for the effects on the 24 managed wetlands of Suisun Marsh of operating CVP and SWP 25 and from other upstream water diversions. CAPITOL REPORTERS (916) 923-5447 361 1 We'd like to note that the SMPA is consistent with 2 the State Board's permit conditions, but at the same time 3 we acknowledge and recognize that the SMPA does not 4 necessarily cover or encompass all the State Board's 5 requirements for the Marsh. Namely, our primary focus has 6 been on the managed wetlands. And we understand that the 7 Board has responsibilities for the tidal wetlands. 8 However, in the context of the SMPA we are not addressing 9 those standards, the tidal wetland narrative. So we are 10 looking at the interior Marsh objectives, which, as I 11 shared with you before, were set up to protect primarily 12 the managed wetlands. 13 The channel water salinity standards that are in 14 the Preservation Agreement are essentially out of Decision 15 1485 with a provision for what we call "deficiency 16 standards" wherein dryer years, critical years the salinity 17 values would actually be allowed to be higher. And, in 18 fact, in the '95 Water Quality Control Plan the Board has 19 adopted the SMPA deficiency standards for the Western 20 control sites. That would be S-42, S-21, S-97, and S-35. 21 So that here is a give-and-take where the SMPA in large 22 part was developed as, in effect, a program of 23 implementation of D-1485. And things that we had in the 24 SMPA have now actually gone back to the Board and the Board 25 has made part of their plan. CAPITOL REPORTERS (916) 923-5447 362 1 So yesterday it was offered that the San Joaquin 2 Valley Agreement would be a good model for doing these 3 kinds of settlement agreements to implement Board actions, 4 or Board objectives. I would offer to you that the 5 Preservation Agreement historically has been fulfilling and 6 is continuing to fulfill that role. And finally we have 7 constructed a number of facilities based on a plan of 8 protection which again was developed based on condition 9 seven in D-1485. So, again, very interwoven between the 10 SMPA and the Board's standards and objectives for the 11 Marsh. 12 What have we accomplished over the last 20 years? 13 We set up an extensive monitoring network which has 14 provided data and information which we have used to develop 15 Amendment Three. We built the initial facilities in 1980, 16 which again was required by Condition 7(c) of D-1485, and 17 those are three separate facilities which include the 18 Roaring River Distribution System, the Morrow Island 19 System, and the Goodyear Slough Outfall. And then in water 20 year 1989 we constructed the Suisun Marsh salinity control 21 gates as phase two of the Plan of Protection. 22 We also have built smaller facilities on what we 23 call the Cygnus Unit in Cordelia Slough in 1991, the Lower 24 Joice Island Unit and its companion fish screen in 1993. 25 And we actually began the planning and documentation for CAPITOL REPORTERS (916) 923-5447 363 1 phases three and four of the Plan of Protection starting in 2 1990 through '95. However, as I'll explain, we stopped in 3 '95 in the context of the new Water Quality Control Plan. 4 One thing that is not on this slide which I would 5 also like to add as an accomplishment, as part of the SMPA 6 we have what we call the cost-share program where we had 7 set up, DWR and the Bureau, a million dollars, 995,000 back 8 in '85 dollars to help landowners build infrastructure on 9 an initially 50/50 cost share; and later now, 75/25 cost 10 share, because we felt and still do feel even more so today 11 that infrastructure and water management is key to 12 achieving what we would like to on the Marsh. 13 What are the changed conditions that we felt 14 required us to amend the Preservation Agreement? First and 15 foremost, the Water Quality Control Plan has higher winter 16 and spring Delta outflows, which in turn not only reduces 17 salinity in the winter and spring, but has a carryover 18 effect in summer salinities. So in many months our 19 modeling has shown, Suisun Marsh modeling, that in 20 September/October when people began their operations, they 21 actually have or will have water of lower salinity as a 22 result of the estuary flows that are in the winter and 23 spring. 24 Secondly, field data has shown the salinity 25 control gates have operated more effectively at reducing CAPITOL REPORTERS (916) 923-5447 364 1 salinity throughout the Marsh than what was originally 2 expected. So those two things together told us that going 3 on with those large-scale facilities is not the thing to 4 do, because salinities in the Marsh will be significantly 5 lower than under D-1485 conditions, which was the whole 6 premise, the whole foundation of the Plan of Protection in 7 the original SMPA. 8 Based on our forecast of the field data and 9 modeling results we have summarized, or we forecast, that 10 in the Eastern and Central Marsh the Board's salinity 11 objectives will be met with the initial facilities, 12 salinity control gate operations, with minor exceptions 13 during the drought. And, secondly, that in the Western 14 Marsh there will be less frequent and lower salinity 15 exceedances of those numeric standards in the future. 16 What are the consequences of those changed 17 conditions? Well, first of all in 1995 DWR and the Bureau 18 stopped work on the Western Marsh Project, it didn't make 19 sense, it was predicated to be for D-1485 conditions. 20 Secondly, which you actually don't see on the slide, the 21 parties in July of 1995 soon after the Board adopted the 22 Water Quality Control Plan decided to work together to come 23 up with Amendment Three. And one of the first things we 24 did was to evaluate whether those large-scale facilities 25 would still be needed. And our determination is that they CAPITOL REPORTERS (916) 923-5447 365 1 will not. Thirdly, we have decided based on the 2 information that we've collected over the last 15 years, 3 that supplemental management actions are needed for the 4 Western Marsh because there still will be some exceedances 5 with the existing plumbing, facilities, and outflows. 6 And, finally, what are the consequences of no 7 action if we did not amend the Preservation Agreement and 8 just continued blindly with trying to build large-scale 9 facilities? Either we'd get caught in the environmental 10 documentation process because people won't allow us to do 11 it; or even if they did, we would have much greater 12 disruption and adverse impacts on the Marsh habitat by 13 building those facilities. 14 So what is the purpose and approach that we used 15 for coming up with Amendment Three? The purpose is to make 16 SMPA consistent with the '95 Water Quality Control Plan and 17 the change conditions. The approach we used is we felt 18 that we need to focus on improving water and land 19 management as the Board recommended in its program of 20 implementation. And we selected actions, this is very 21 important, that could be implemented under existing 22 permits. 23 Because, again, we didn't want to choose a set of 24 actions that would require five to ten years of 25 environmental documentation before we could actually CAPITOL REPORTERS (916) 923-5447 366 1 implement something, because we wanted to get something on 2 the ground as soon as possible. And, finally, it's not on 3 the slide, but SRCD in Amendment Three will be taking a far 4 greater role in implementing these management actions than 5 under the original Preservation Agreement. 6 What are the objectives of the Amendment Three 7 actions and provisions? One is to provide funds to wetland 8 managers in impacted areas to improve water land management 9 for infrastructure and management techniques; second is to 10 maintain soil salinities within the range of characteristic 11 of brackish soil as outlined by the Soil Conservation 12 Service; thirdly is to improve water and the wildlife 13 habitat on managed wetlands throughout Suisun Marsh not 14 just the Western Marsh; and finally we are working and will 15 be broadening our mitigation activities as a result of the 16 actions we are going to be taking, and we'll be emphasizing 17 management, restoration projects and studies to mitigate 18 for impacts on listed and sensitive species. I will note 19 that this could, in fact, include Tidal Wetland Restoration 20 Projects. 21 Some of the considerations that we took in 22 developing the action and provisions was, again, the 23 importance and consequences of management, the importance 24 of management during drought conditions, and those two what 25 we saw based on our monitoring data was you could have two CAPITOL REPORTERS (916) 923-5447 367 1 managed wetlands on the Eastern Marsh that are using the 2 same diversion water, but one that has the proper 3 infrastructure and the proper lay of the land gets very 4 good habitat, while the adjacent one, because they don't, 5 has gotten poorer habitat and high soil salinities outside 6 of the range established by Fish and Game. 7 Conversely, or consistently, we have two 8 properties on the Western Marsh which does get higher 9 salinity than the Eastern Marsh if the ones that are 10 managed actually can get better habitat than some of the 11 properties on the Western Marsh, again, because they are 12 manageable and they are able to manage them, both because 13 they have the infrastructure and the knowledge and the 14 technical information. 15 We also noticed that the State Board set the 16 standards based on the mean of the high tide salinity, and 17 this makes sense if you consider that most of the people on 18 the Marsh fill with gravity flow through culverts. They 19 can flow -- divert water when the water is high in the 20 channel. So it makes sense to specify the standard that 21 way. But what we've noticed is that throughout many 22 portions of the Marsh, the salinity at low tide is 23 significantly lower than high tide. So maybe with pumps 24 people can then take water of lower salinity without 25 requiring to reduce the high tide salinity. CAPITOL REPORTERS (916) 923-5447 368 1 Fourth, the Marsh Creek flows we have established 2 through our data and monitoring are unaffected by the 3 project operations. We have creeks, Green Valley Creek, 4 Suisun Creek, a number of other small -- Ledgewood Creek 5 that come into the Central and Northwestern Marsh. Project 6 operations don't affect the flows in those creeks, but 7 those creeks are what really affect the water quality 8 regime north to south in the Western Marsh. And, finally, 9 we recognized that the original SMPA did not account for 10 prolonged droughts as we experienced in '87 through '92. 11 The deficiency standards that we set up was only in 12 recognition of a '76/'77 drought, kind of two years 13 back-to-back. So we took that into our thinking. 14 The 11 actions: What I'd like to note is action 15 number one is to set the channel water salinity standards 16 consistent with the Water Quality Control Plan objectives. 17 And Table 1 in the Preservation Agreement, if you look at 18 it it looks very close to the objective standard in the 19 Water Quality Control Plan with two exceptions. 20 One is that S-97 and S-35 don't show up on Table 21 1, to provide management actions to meet those objectives 22 not meeting the explicit salinity standard. But all the 23 other compliance stations are on Table 1 and these are 24 the -- these are the stations that through gate operations, 25 salinity control gate operations and assuming the outflow CAPITOL REPORTERS (916) 923-5447 369 1 regime required under the Water Quality Control Plan, DWR 2 and the Bureau and the parties would work to meet. We are, 3 as part of the SMPA, saying we will meet all of the 4 standards up to S-21 with gate operations and assuming the 5 outflow regime of the Water Quality Control Plan. 6 The other exception is the State Board in its EIR, 7 draft EIR, noted an exception that based on our data and 8 modeling that even though they are looking to DWR and the 9 Bureau to meet those standards with gate operations, there 10 are some exceptional hydrological conditions that would 11 preclude, or make it unfeasible to meet that unless you 12 release excessive amount of Delta outflow. And what we've 13 done in our Table 1 is we have added a Footnote 3, which we 14 are offering to the Board as a way -- the statement in the 15 Board's EIR is, "An exception to this responsibility would 16 be made when hydrologic conditions are such that even with 17 gate operations, as described above, the objectives cannot 18 be achieved." 19 And what we've done is put some objective 20 implementation rules that we could use to do that. And, 21 essentially, what it says is if one or two months in a 22 controlled season one of the standards are not met 23 because -- in a deficiency period, so you actually have to 24 be in the second of a critical year, that we would not do 25 anything. We would waive the Table 1 standards, because we CAPITOL REPORTERS (916) 923-5447 370 1 don't think there would be harm done to the Marsh. 2 However, if that became three months we would 3 invoke what I will explain as the Drought Response Fund to 4 provide additional funds to the wetland managers to be able 5 to get the additional salt load out of the soil in that 6 control season and the following control season. And, 7 finally, what we said is if this assumption that this is a 8 rare event is not true, meaning that in any two control 9 seasons, 16 months, if there are more than four 10 exceedances, more than 25 percent, then we will be back at 11 the negotiating table because our assumption that it's a 12 rare event is not true. Okay. 13 What we've done with S-35 and S-97, then, is taken 14 it and put it into Table 2, our monitoring station, but all 15 of the other actions, eight actions or nine actions, are 16 set to provide equivalent or better protection in the 17 Western Marsh of those two stations. One of those things 18 is to set criteria for September operation of the salinity 19 control gate. 20 I'd like to make one important clarification. 21 DWR's permit to operate the gate allows us to operate in 22 September. In fact, over the last eight, nine years we've 23 operated four years in September, especially during the 24 drought. What we're offering here is not to or -- not to 25 operate in September but set up objective criteria of when CAPITOL REPORTERS (916) 923-5447 371 1 those gates would be operated. And that is: If the 2 seven-day running average of salinity at any of the 3 compliance stations and S-35, which is now a monitoring 4 station but we would use it to trigger gate operations, is 5 above 17 milli-siemens, which is 2 milli-siemens shy of the 6 end of October, we would then operate the gates in 7 September. 8 Action number four is the implement of a Water 9 Management Program. And this is one that the Board 10 actually recommends in its Water Quality Control Plan. And 11 we think this is one of the cornerstones of the management 12 activities. It would include anywhere from two to three 13 staff people administered and implemented by SRCD to help 14 ensure that land managers, wetland managers follow their 15 management plan and to provide them the knowledge and 16 information to meet the objectives and the goals, the 17 habitat goals. 18 Number five is to update the existing management 19 plans. And what we're -- what SRCD, again, is the one that 20 is going to be doing this, is going to be focusing is 21 providing a living document, not set in stone, that would 22 be updated continually through the Water Management 23 Program. It would identify those activities that will 24 provide a diversity of habitats rather than telling them 25 just grow alkali bulrush, or just grow fat hen to get away CAPITOL REPORTERS (916) 923-5447 372 1 from monocultures. 2 And, finally, it will be adaptive. It will 3 provide landowners a number of different management schemes 4 that they could actually try, year in and year out, rather 5 than doing the same set management plan every year. 6 Item number six is the Joint Use Facilities 7 Program. This would be funded by DWR and the Bureau 100 8 percent and facilities' infrastructure that would be 9 identified to help two or more neighboring managed wetlands 10 which would be constructed under this program by SRCD. And 11 it would, again, go to help them manage their water and 12 their land better. 13 Action number seven is to establish a managed 14 Wetlands Improvement Fund. This is a continuation of the 15 cost-share program that I spoke of. And it actually will 16 have -- it's a two-tier program, a 75/25 cost share will be 17 used for infrastructure; and 50/50 cost-share program will 18 be used for paying for land management techniques, helping 19 them clean out their ditches year in and year out, et 20 cetera, et cetera, again, to help them get the water in and 21 off of their land efficiently. 22 Number eight and nine go together. We're going to 23 be setting up a portable pump pool administered by SRCD 24 which will include 20 pumps and 20 detachable fisheries. 25 Those pumps could be used in action number eight at CAPITOL REPORTERS (916) 923-5447 373 1 diversion pumps, again, to try to take water at the low 2 tides, or throughout the tide which would give you a mean 3 tide lower than the high tide salinity. And it would 4 also -- they could also be used to help drain. Many of 5 these lands because of their elevation and contouring and 6 ditch system cannot efficiently drain all of their land 7 water off their property to about 8 to 12 inches below the 8 surface, is what the guideline is. These pumps would help 9 them do that and do it very quickly to stay within the 10 30-day flood drain leaching cycles that we would want them 11 to do. 12 Number ten is to help realign and stabilize the 13 Roaring River turnouts. The system that we already built, 14 the initial facilities, about 20 of those turnouts have 15 uplifted during time and the people aren't able to take 16 water at all times. So we have agreed to be able to allow 17 them to meet their management goals and their management 18 plans; DWR and the Bureau again would pay to have those 19 realigned. And, finally, we'd establish a Drought Response 20 Fund which would be triggered both by S-97 and S-35 in the 21 Western Marsh as well as the other compliance stations. 22 And let me try to explain this. The idea is if 23 you are in a drought that lasts more than two years, the 24 accumulation of salt in the soil begins to be so extensive, 25 especially if the deficiency standards are in effect in the CAPITOL REPORTERS (916) 923-5447 374 1 Western Marsh, that it becomes harder and harder to leach 2 them out quickly and efficiently unless you do more 3 intensive management. So the fund, again, funded by DWR 4 and the Bureau and administered by SRCD, once it's 5 triggered we would put in an amount of fund and it would, 6 again, occur in either the second or third year of drought 7 and it would be triggered for any year that met the trigger 8 criteria -- and I'll explain those briefly in a second. 9 And it would also continue one year after that to allow 10 them to follow-up and get the salinity out of the soil. 11 What triggers it? If you're in the Western Marsh 12 and you're in the second deficiency year, which means 13 second or third dry year in a row, and if you're one 14 milli-siemens over the regular standards, not the 15 deficiency standards, you would then trigger the fund. If 16 you're the other compliance stations and you're in the 17 third deficiency year, we allow one more year because they 18 get more salinity water anyway, then you would trigger the 19 fund plus one year after that. 20 Okay. The other companion activities that we 21 would do along with those eleven actions is we would amend 22 monitoring agreement to include monitoring that could help 23 us, tell us whether these actions are working. And we 24 would also include SRCD in that program, because they're 25 now a major player in implementing those actions. And also CAPITOL REPORTERS (916) 923-5447 375 1 very importantly we would amend the mitigation agreement to 2 broaden those activities as I mentioned earlier. DWR and 3 the Bureau as part of the original Preservation Agreement 4 has a three-million-dollar third installment to go into 5 this mitigation fund. What we are proposing is that 6 those -- that three million dollars be used specifically 7 for what we call multi-species management including 8 restoration projects, tidal restoration projects, studies, 9 and emphasize management that would help threatened and 10 endangered species. We are also establishing what we call 11 the SMPA/ECAT, the Environmental Coordination Advisory 12 Team, which will be a body that ensures that we meet all of 13 our mitigation and permit requirements. 14 To implement the agreement we need to fulfill NEPA 15 and CEQA documentation. The initial study environmental 16 assessment will be completed by the end of the month and 17 will go out for public review. Again, as I explained, one 18 of the focuses of setting up the actions and provisions in 19 the way in which we did was we wanted to do things we could 20 do now under either our and DWR and the Bureau's permits, 21 or under SRCD and Fish and Game's general permit for 22 maintenance activities. 23 So given that as going in to set up our actions, 24 our finding is going to be no significant incremental 25 impacts because we're doing everything under existing CAPITOL REPORTERS (916) 923-5447 376 1 permits and under the mitigation that have already been 2 established for those permits. And the level of activity 3 as we show in the CEQA/NEPA document will not go over and 4 above the caps that are allowed in those existing permits. 5 And, finally, we will fulfill CESA and ESA; the 6 Department of Fish and Game has a draft biological opinion 7 which essentially comes up with the same conclusion of no 8 significant incremental impacts. We have completed 9 informal consultation with the National Marine Fishery 10 Service and have gotten a letter of concurrence from the 11 Service to proceed with Amendment Three. They ask that we 12 put in a provision in the agreement recognizing that 13 studies are underway to assess the impacts of the salinity 14 control gate operations on upstream adult migrating salmon. 15 And if there are impacts, to implement measures to, 16 essentially, provide unimpeded -- the opportunity for 17 unimpeded passage. And we have included that agreement 18 provision in the agreement. 19 And, finally, we have been in consultation with 20 the U.S. Fish and Wildlife Service since August of last 21 year. And they have reviewed two administrative drafts of 22 our CEQA/NEPA document. And we have both modified our 23 amendment plus our CEQA/NEPA document in response to their 24 comments. And we feel that they are both better documents 25 as a result. CAPITOL REPORTERS (916) 923-5447 377 1 And, finally, as soon as we can sign the 2 agreement, we will begin implementation of these actions. 3 Some of the actions which require construction can only be 4 done during the construction season in the Marsh, which is 5 primarily the summer months. And there is also a clapper 6 rail concern and we'll have to work around those clapper 7 rail time periods where they have been monitored. 8 What are the differences between Amendment Three 9 and Alternative Five in the Draft EIR of the State Board? 10 There is no Green Valley Creek flow augmentation in 11 Amendment Three at this time. We actually went -- provided 12 a proposal to the Fairfield Suisun Sewer District to 13 provide treated effluent to Green Valley Creek through the 14 construction of infrastructure. In the demonstration 15 document in one of the appendices is our proposal. There's 16 also the letter of response from the District saying at 17 this time they see too many obstacles to proceed with that 18 plan. 19 There's no Morrow Island drainage diversion and 20 redirection in Amendment Three at this time. The Fish and 21 Wildlife Service thought they -- they had concerns about 22 the impacts of clapper rail at Goodyear Slough if we 23 actually did reduce salinity at Goodyear Slough as a result 24 of this action, which was the objective of this action. 25 And in response to their comments we did additional CAPITOL REPORTERS (916) 923-5447 378 1 modeling and we convinced them and ourselves that we 2 actually can't reduce Goodyear Slough salinity by doing 3 that. So we dropped it as an action, it didn't make sense. 4 And, finally, we modified the original Drought 5 Response Fund compensation, because we don't have the Green 6 Valley Creek flow augmentation to provide rather than 7 $50,000 when it's triggered to $22,000, because a greater 8 area is now affected by higher salinities without the Green 9 Valley Creek flow augmentation. And then the last pitch, 10 we would conclude that Amendment Three management actions 11 that replace the Western Marsh salinity standards will 12 provide better use of channel water, do not require 13 additional Delta outflow, are in the public interest to 14 improve wetlands with reasonable water use, and have no 15 unreasonable affects to the fish and wildlife. And we 16 would recommend the SMBA parties to the Board that they 17 implement Amendment Three as the next step in implementing 18 Suisun Marsh objectives of the Water Quality Control Plan. 19 And we would recommend that the Board find that the 20 provisions of Amendment Three, one, provides equivalent or 21 better protection then meeting salinity standards at S-35 22 and S-97; and, two, that those provisions will fulfill the 23 two -- the State and Federal Water Project's share of 24 responsibility for meeting the Western Marsh objectives in 25 the '95 Water Quality Control Plan. CAPITOL REPORTERS (916) 923-5447 379 1 That concludes my presentation. Again, we have 2 representatives from the four parties to address your 3 questions. 4 HEARING OFFICER CAFFREY: Thank you. Thank you very 5 much, Mr. Guivetchi. Are there questions from the Board 6 Members at this time before we go to the commenting 7 parties? Anything from staff? Mr. Pettit. 8 MR. PETTIT: I was just going to ask if Fish and Game 9 is going to comment separately. 10 HEARING OFFICER CAFFREY: Is Fish and Game going to 11 comment? 12 MS. MURRAY: Fish and Game is going to comment 13 separately. 14 HEARING OFFICER CAFFREY: Thank you, Ms. Murray. 15 MR. PETTIT: Okay. I'll hold off. 16 HEARING OFFICER CAFFREY: Thank you, Mr. Pettit. 17 I'll go through the cards, then. And thank you very much, 18 Mr. Guivetchi. I assume you're going to stay and hear the 19 commentary? 20 MR. GUIVETCHI: Yes. 21 HEARING OFFICER CAFFREY: Thank you, sir. 22 Steve Ottemoeller? 23 MR. OTTEMOELLER: No comments on Suisun Marsh. 24 HEARING OFFICER CAFFREY: Dave Schuster? I know 25 Mr. Schuster, I think, had planned to make some comments. CAPITOL REPORTERS (916) 923-5447 380 1 If he returns he can do so later. Michael Jackson? There 2 he is. Welcome back, Mr. Jackson. 3 MR. JACKSON: Thank you, sir. Michael Jackson 4 representing the Regional Council of Rural Counties. We 5 have some questions in regard to this particular item and 6 also some, I think, comments in regard to the question of 7 equivalent protection. 8 One of the things, of course, that folks upstream 9 worry about is how many times they're going to be called 10 upon for a flow in not only in this hearing but in future 11 hearings. The good thing about this is that both DWR and 12 the Bureau seem to indicate that they're willing to take 13 the responsibility for the effects that they've caused with 14 their projects on Suisun Marsh. And we think that's a very 15 admirable thing, it's also the law. And it's something 16 that ought to be considered upstream as they ask for other 17 people to share the pain. 18 Clearly, there is very little difference on who's 19 responsible for the outflow into Suisun Marsh and who's 20 responsible to the -- in regard to the effects of the 21 diversions. These are the only two ways that water leaves 22 that area. And it seems to us inconsistent to argue that 23 they are responsible for it in the Marsh but not 24 responsible for it solely in front of the pumps. That 25 said, my -- my question is this: CAPITOL REPORTERS (916) 923-5447 381 1 The deletion of compliance at stations S-35 and 2 S-97 and the elimination of alternatives that have the 3 ability to reach compliance in terms of the salinity 4 standard at those -- at those points may be the right thing 5 to do environmentally. It may very well be that the 6 original compliance locations, the original compliance 7 standards were based upon outmoded information. And from 8 reviewing your draft environmental document, that seemed to 9 be your conclusion, that with the clapper rail listing and 10 a number of other things we actually wanted water to be a 11 little more salty in those areas than the existing 12 compliance standards would indicate. 13 My question is this: I understood that those 14 compliance standards were put into the state law and 15 presently exist in the Public Resources Code. So the 16 question becomes: Do you have the authority to not meet 17 the law simply because everybody agrees that you shouldn't 18 for environmental reasons? So I would check the Public 19 Resource Code and the Suisun Marsh Preservation Act, which 20 is a part of that code section. 21 Clearly, the Green Valley Creek augmentation of 22 flows would meet those compliance standards. Now, if it 23 turns out that -- I mean I'm not one here to tell you you 24 ought to solve your problem by building more facilities. 25 So the idea that we are not going to build expensive CAPITOL REPORTERS (916) 923-5447 382 1 facilities in the Goodyear Slough area seems to me to be on 2 basically a good decision. But if the law requires it and 3 it's the only way to meet those standards, then we better 4 get the law amended before we change to operate under this 5 new discretion. Because what we would worry about is that 6 we could all sit here and agree that the new facilities 7 should not be built at Cordelia and Goodyear Slough, that 8 the existing operation and the change conditions within -- 9 within the Bay and the Delta have made it clear that we 10 need more brackish water; and therefore, in the Western 11 Marsh the water ought to be saltier. 12 But what we generally get is that if the -- if the 13 Bureau and DWR don't have to build the facilities and if 14 we're not going to take water out of Barryessa to meet the 15 Western standard, which can be done without limiting 16 anybody's water right according to your environmental 17 document, that, number one, it be legal within the Public 18 Resources Code; and, number two, that there be some 19 assurance that if it doesn't work that isn't the limit of 20 the Bureau and DWR's activities and that we don't end up 21 supplying more water from upstream. 22 It's been variously estimated over the last 15 23 years I've been coming to these meetings that it could 24 take -- to meet the water quality standard at S-35 and S-97 25 it could take as much as a million-and-half acre feet of CAPITOL REPORTERS (916) 923-5447 383 1 water. Clearly if it was taken out of Barryessa they could 2 be met probably at the level of 80,000 acre feet of water. 3 And that's the Bureau's water, and the Bureau has the 4 control and they do not have anybody for that water. 5 So it would be a useful way to do this. 6 So I guess what I would -- what I would like to 7 point out is that the alternatives that we presently have 8 in the draft document do find ways to solve this problem 9 other than this Amendment Three. And I would suggest that 10 Amendment Three be compared not only with the statutes, but 11 with the facts in the hearing so that there is not -- or 12 that the Bureau backstop this as well. That they will -- 13 the Bureau and DWR will meet these standards in whatever is 14 the most cost-effective way, the least water-effective way. 15 and that this document also be placed in the State law so 16 that there is not the potential for another call on water 17 from upstream. 18 Other than that, it seems to me like this has been 19 a very valuable exercise and these people have worked very 20 hard. And it looks to me like they have designed a system 21 that will be workable. But it -- before the Bureau and the 22 DWR reach the end part of this process, it seems to me that 23 we ought to be sure that this is not just a first step 24 toward more flow from upstream. 25 Thank you. CAPITOL REPORTERS (916) 923-5447 384 1 HEARING OFFICER CAFFREY: Thank you, Mr. Jackson. 2 Questions from the Board Members? Anything from staff? 3 Ms. Leidigh? 4 MS. LEIDIGH: Yeah, Mr. Jackson, do you happen to 5 have a citation for that section that you were mentioning? 6 MR. JACKSON: No, but I can certainly send it to you. 7 MS. LEIDIGH: I'd appreciate that. 8 MR. JACKSON: It's in the Suisun Marsh Preservation 9 Act in the Public Resources Code. 10 MS. LEIDIGH: Okay. I'd appreciate it if you would 11 send it to me. 12 HEARING OFFICER CAFFREY: Thank you, Mr. Jackson. 13 Mr. Brandt, Alf Brandt. 14 MR. BRANDT: No comment. 15 HEARING OFFICER CAFFREY: David Sandino? 16 MR. SANDINO: No comment. 17 HEARING OFFICER CAFFREY: Virginia Cahill -- sorry. 18 MS. CROTHERS: I'd like to speak on behalf of DWR in 19 place of David Sandino. 20 HEARING OFFICER CAFFREY: That's all right. Come 21 forward. We'll give Mr. Sandino a pass, but we'll let you 22 speak for him. 23 MS. CROTHERS: Hello, my name is Kathy Crothers, 24 attorney at DWR. And I've been working on the Suisun Marsh 25 Agreement for the last couple of years with the program CAPITOL REPORTERS (916) 923-5447 385 1 staff. So I was -- I was chosen to make this comment on 2 behalf of DWR. 3 This is a separate comment that the Department 4 would like to make and it kind of ties into what 5 Mr. Jackson has just been -- I'm not sure if he's concerned 6 about, but I think we almost agree with him, in fact, that 7 to try to meet the two Western Marsh standards at S-97 and 8 S-35 would be an unreasonable use of water in that we would 9 mention to the Board that we believe it is not actually 10 constitutional having the Department meet S-97 and S-35 11 with additional releases of waters from reservoirs. 12 And in consideration of what you just heard from 13 Mr. Guivetchi that the land management actions that we're 14 helping to fund in terms of building facilities, creating 15 ditches, providing portable pumps that would improve the 16 use of the water in the channels as it is to improve the 17 habitat and achieve desired habitat benefits that are the 18 objective of the agreement in the first place. 19 So we don't believe there should be any need to 20 have those two salinity compliance stations as a term in 21 the water rights for DWR. They're just not appropriate 22 really anymore with the conditions as they exist now. 23 Also, I'd just like to make another comment about 24 the Suisun Marsh Preservation Agreement in the Public 25 Resources Code. It does not have any specific standards CAPITOL REPORTERS (916) 923-5447 386 1 for the Marsh. It just basically says the Suisun Marsh 2 should be managed to provide wetland habitat. It doesn't 3 set anything in terms of specific numeric criteria. If you 4 have any questions I'd be happy -- 5 HEARING OFFICER CAFFREY: Any questions of 6 Ms. Crothers? Thank you very much. 7 MS. CROTHERS: Okay. 8 HEARING OFFICER CAFFREY: Virginia Cahill? 9 MS. CAHILL: No comment. 10 HEARING OFFICER CAFFREY: Jean Zolezzi? 11 MS. ZOLEZZI: No comment. 12 HEARING OFFICER CAFFREY: Tim O'Laughlin? 13 MR. O'LAUGHLIN: No comment. 14 HEARING OFFICER CAFFREY: Steve Macaulay? 15 MR. MACAULAY: No comment. 16 HEARING OFFICER CAFFREY: Tom Graff is not here. 17 Kevin O'Brien? 18 MR. O'BRIEN: No comment. 19 HEARING OFFICER CAFFREY: No comment. State 20 Department of Fish and Game. 21 MS. MURRAY: We would request we go to the end of 22 this list. Mr. Wernette who has been intimately involved 23 in this process has been called to another meeting that 24 began at 1:30. And we estimated he could get on it at 25 2:00. If not, I will read his statement at the end, but he CAPITOL REPORTERS (916) 923-5447 387 1 has been much more involved in this. 2 HEARING OFFICER CAFFREY: All right. We'll 3 accommodate you, Ms. Murray. We'll put Mr. Wernette at the 4 end of the list here. 5 Ralf Carter? Mr. Carter, you look a lot like 6 Mr. Baber. 7 MR. BABER: Chairman Caffrey and Members of the 8 Board, I'm Bill Baber with the Minasian Law Firm 9 representing Sacramento Valley clients the same as I 10 represented on -- before and I'll give the Madam Reporter a 11 list of them afterwards, basically the Feather River 12 diverters. We think the Suisun Marsh Agreement is good. 13 And that if workable and accepted by the State Board, we 14 ask that it be backstopped by both the Bureau and DWR. 15 And with regard to the evaluation criteria for 16 Delta Settlement Agreements, which the Bureau -- at least 17 which I received yesterday morning and reviewed for the 18 first time, I think the Bureau submitted them a couple days 19 ago, specifically with regard to criteria two regarding the 20 share of the paying criteria, we disagree with that. We 21 don't believe that the interpretation of Raconelli given in 22 this brief statement is correct. We do, however, agree 23 with the statement that the Bureau has shared full 24 responsibility for Delta standards for almost 40 years 25 citing D-990, and we hope to point that out to you in the CAPITOL REPORTERS (916) 923-5447 388 1 next week and have that petition filed. 2 Thank you. 3 HEARING OFFICER CAFFREY: Thank you, Mr. Baber. Any 4 questions? Thank you, sir. 5 MR. BABER: Thank you. 6 HEARING OFFICER CAFFREY: Paul Simmons? 7 Mr. Hitchings? 8 MR. HITCHINGS: No comment. 9 HEARING OFFICER CAFFREY: Patrick Wright is not here. 10 Greg Thomas is not here. If I say you're not here and you 11 are, please, speak up. Alan Lilly? 12 MR. LILLY: No comment. Thank you. 13 HEARING OFFICER CAFFREY: No comment. Steve 14 Chedester? Roger Guinee? 15 MR. GUINEE: No comment. 16 HEARING OFFICER CAFFREY: No comment. Thomas 17 Shephard? Not here. Reid Roberts? Michael Sexton? 18 MR. SEXTON: No comment, sir. 19 HEARING OFFICER CAFFREY: No comment. Cliff Schulz? 20 MR. SCHULZ: No comment. 21 HEARING OFFICER CAFFREY: Gary Bobker is not here. 22 Lowell Ploss? 23 MR. PLOSS: No comment. 24 HEARING OFFICER CAFFREY: No comment. Patrick 25 Porgans is not here. Alex Hildebrand and/or John Herrick, CAPITOL REPORTERS (916) 923-5447 389 1 not here. Dante Nomellini? 2 MR. NOMELLINI: No comment. 3 HEARING OFFICER CAFFREY: No comment, Mr. Nomellini. 4 MR. NOMELLINI: At this time. 5 HEARING OFFICER CAFFREY: Thank you, Mr. Nomellini, I 6 needed that. Cynthia Kochler is not here. Jeanne Cave? 7 This is a new card. We have had two new cards: Jeanne 8 Cave and Richard Denton. 9 MR. DENTON: No comment. 10 HEARING OFFICER CAFFREY: This is for comments on the 11 Suisun Marsh Preservation Agreement. Good afternoon, 12 ma'am. Welcome. 13 MS. CAVE: Hi. I'm Jeanne Cave from Colusa, the 14 Pioneer Duck Club. And this is in general that through 15 yesterday and today the word "ducks" has not been 16 mentioned. Possibly I have tunnel vision, but I want you 17 to realize there is a little category of duck clubs where 18 U.S. Fish and Wildlife have bought the farming rights and 19 paid its -- substantially for that and then paid us through 20 the water bank each year a little dab for maintaining 21 and -- we had a rehabilitation project for 8,000 a couple 22 years ago and Ducks Unlimited participated. 23 This is close to $400,000 that's been spent of 24 taxpayers' money just on our place. And there's a good 25 many, but we are staggered. And most of them are just duck CAPITOL REPORTERS (916) 923-5447 390 1 clubs, they are not rice. And it almost seems as though 2 one branch of the government establishes and the other 3 branch is going to turn us into -- take-ith away our water 4 that we need to survive. I hope there's a conclusion that 5 can take recognition of this, because we don't have an 6 alternative. 7 Thank you, everybody. 8 HEARING OFFICER CAFFREY: Ms. Cave, I'm not that 9 familiar with where the -- I'm not a duck hunter and I 10 don't know where the duck clubs are -- 11 MS. CAVE: We're at the bottom of the Valley five 12 miles west of Colusa, it's rice country. And we're a 13 permanent habitat for zillions of different kinds of 14 waterfowl -- 15 HEARING OFFICER CAFFREY: I hope it's safe to assume 16 that the process we're about here is not going to do 17 violence to any current beneficial use of water such as the 18 preservation of -- 19 MS. CAVE: That's why I'm here, so. 20 HEARING OFFICER CAFFREY: If it does, I don't 21 think -- I'm not sure we're doing a very good job. 22 MS. CAVE: The business of saving the salmon in this 23 perfect environment is so that they can be caught and 24 eaten -- or caught and sold and eaten. And that's the same 25 kind of fate that some of the ducks will have, but I feel CAPITOL REPORTERS (916) 923-5447 391 1 they need some recognition, too. Thank you. 2 HEARING OFFICER CAFFREY: I must confess I'm at a 3 loss of what to tell you, Ms. Cave. Do our staff have any 4 reassuring words with regard to what we are about here and 5 the law and the protection of our flying species waterfowl? 6 MR. HOWARD: I don't believe in any of the 7 alternatives that we looked at we put a special 8 consideration for, you know, for the actual use of the 9 water. We were looking at the rules that were applied to 10 the alternative. And then we applied them to all water 11 users. I'm not sure whether your water rights were -- 12 received notice of possibly being affected by the Board's 13 proceeding. 14 MS. CAVE: We're on your list. 15 MR. HOWARD: If you're on the list, then, your water 16 rights are subject to the Board's proceeding. 17 MS. CAVE: In the year 2000 we would have our 60th 18 anniversary, but will that be presiding over a desert at 19 that time? 20 MR. HOWARD: Thank you. 21 HEARING OFFICER CAFFREY: Thank you for being here 22 and expressing your concerns, Ms. Cave. I might add that I 23 don't know if you've talked to anybody at the Resources 24 Agency here in this building, but you may want to express 25 your concerns to them. Thank you very much. CAPITOL REPORTERS (916) 923-5447 392 1 CO-HEARING OFFICER STUBCHAER: Mr. Chairman? 2 HEARING OFFICER CAFFREY: Yes, Mr. Stubchaer. 3 CO-HEARING OFFICER STUBCHAER: I'd like to ask the 4 staff this question: Even if their water rights are 5 affected, is it likely that various and definite portions 6 of their water rights would be taken for Delta purposes? 7 MR. HOWARD: Well, likely their water rights are 8 listed because they fall under our alternative three, or 9 four, our water rights alternative priorities. And those 10 really curtail water diversions in the period of 11 approximately June through August. 12 I don't know if they use duck water to flood up in 13 that period, but if they did, then there's a possibility. 14 But it wouldn't affect -- at least or modeling indicates 15 that it wouldn't affect anybody's diversions in the period 16 of September through May, basically. I don't know if 17 that's any comfort, but -- 18 CO-HEARING OFFICER STUBCHAER: Okay. Thank you. 19 HEARING OFFICER CAFFREY: Thank you, Mr. Howard. 20 Richard Denton? Did Mr. Denton want to comment on the 21 Suisun Marsh Preservation Agreement? 22 MR. DENTON: No comment at this time. 23 HEARING OFFICER CAFFREY: All right. Thank you, sir. 24 Department of Fish and Game? Ms. Murray, would you like to 25 read Mr. Wernette's statement? Good afternoon. CAPITOL REPORTERS (916) 923-5447 393 1 MS. MURRAY: Good afternoon. And I will read Frank's 2 statement and I will attempt to answer any questions. And 3 who knows, he might get here before any complicated 4 questions arise. 5 "The Department has been and continues to be 6 closely involved in the interagency efforts to protect the 7 Suisun Marsh. The Department signed and supported the 8 original Suisun Marsh Preservation Agreement in 1987. More 9 recently DFG also supported Amendment Three to that 10 agreement. DFG comments are two-fold. 11 "One, DFG supports Amendment Three to the SMPA as 12 fulfilling the obligations of the State Water Project and 13 the Central Valley Project to provide adequate -- adequate 14 quality channel water. And, two, the Department 15 recommends that the State Water Resources Control Board 16 require additional local flow restoration actions outlined 17 in our comment letter on the DEIR. 18 "DFG believes that both Amendment Three and the 19 additional flow restoration actions are necessary in order 20 to provide equal protection to the Marsh even with the 21 deletion of two compliance stations in the West and 22 Northeast Marsh. And those are S-35 and S-97. Adopting 23 and implementing Amendment Three and also requiring local 24 flow restoration in the Northwestern portion of the Marsh 25 achieved through scheduled releases from Fairfield, Suisun CAPITOL REPORTERS (916) 923-5447 394 1 Wastewater Treatment Plant and reservoirs on Green Valley 2 Creek will preserve or partially restore flow patterns and 3 salinity conditions that will help improve the ecological 4 health of Suisun Marsh and Bay and ensure maintenance of 5 biological diversity. 6 "The combination of the implementation of 7 Amendment Three and local flow restoration requirements 8 should sustain an east to west and north to south channel 9 water salinity gradient in the Marsh. Those actions will 10 ensure that rare plant communities and listed wildlife 11 species are maintained or enhanced. 12 "Amendment Three will provide improved wetland 13 management and the appropriate water channel salinity 14 needed by wetland managers to grow brackish Marsh plants, 15 some of which provide critical wintering waterfowl 16 habitat." There was some waterfowl discussion and it's in 17 the Suisun Marsh. 18 "The DFG also remains engaged in the Suisun 19 Ecological Work Group. And this work group has not 20 provided its recommendation to the Board with respect to 21 the 1995 Water Quality Control Plan's narrative standard to 22 protect the brackish tidal marshes of Suisun Bay, but it 23 will do so at the next tri-annual review. 24 The Department recommends that this Board take 25 action now to implement Amendment Three and the local flow CAPITOL REPORTERS (916) 923-5447 395 1 restoration actions described in the DFG comment letter on 2 the Draft EIR, but that you defer a decision on the 3 narrative standard until the next tri-annual review is 4 completed." 5 And we have further comments on some criteria that 6 we have as well as closing arguments, but that's all we 7 have in terms of the Suisun Marsh Preservation Agreement. 8 HEARING OFFICER CAFFREY: Thank you very much, 9 Ms. Murray. You know I was going to mention something; you 10 used the term "closing arguments," and I had planned to say 11 something. I want to make sure that everybody understands 12 that the closing statement portion of this proceeding, 13 which will come after our discussion on any other pending 14 or looming agreements, is not in the adversarial sense or 15 even in the hearing sense. 16 It's simply an opportunity for anybody to come up 17 here who was late, or didn't have a chance to speak 18 earlier, or was early enough in the process and didn't get 19 a chance to comment on something that came later. It's not 20 an opportunity to summarize in the classic sense, to rebut, 21 or to repeat what we've already said. That's already in 22 the record. So it's not an argumentative. And we don't 23 expect everybody to have to come up here and avail 24 themselves of it. So -- and that's not meant to stifle 25 you. It's just meant to clarify what the reason is of why CAPITOL REPORTERS (916) 923-5447 396 1 we put it on the agenda. It's an opportunity in case 2 somebody didn't have an opportunity. 3 MS. MURRAY: And I will say the Department intends to 4 give its recommendations regarding phasing and the criteria 5 that we think the Board should consider in looking at these 6 agreements -- 7 HEARING OFFICER CAFFREY: I didn't mean to direct 8 that to you. You used that term and it triggered my 9 thought. 10 MS. MURRAY: Right. 11 HEARING OFFICER CAFFREY: I know that you had already 12 spoken, Ms. Murray, about waiting till then for your 13 presentation on how we should proceed. And we will look 14 forward to that at that time. Any questions? Mr. Pettit 15 has a question. 16 MR. PETTIT: Ms. Murray, your statement tends to 17 indicate a difference of opinion among the proposed 18 signatories to the agreement, and that's with regard to the 19 flow augmentation fund. Does that mean the Department 20 supports the agreement, or doesn't support it? And is 21 there any effort underway among the potential signatories 22 to resolve that difference? Where does that leave us? You 23 are one of the proposed signatories to the amendment? 24 MS. MURRAY: Right. We do support the agreement as 25 fulfilling the obligation of SWP and CVP. However, we do CAPITOL REPORTERS (916) 923-5447 397 1 feel that the local flow augmentation is also necessary for 2 a full package. And we do continue to have discussions 3 with DWR and the other parties, but we do feel that there 4 are other measures that need to be addressed. 5 MR. PETTIT: Am I to understand, then, that that 6 wouldn't be a showstopper as far as the amendment goes? 7 MS. MURRAY: That is correct. 8 MR. PETTIT: Thank you. 9 HEARING OFFICER CAFFREY: Mr. Howard, did you have 10 something? 11 MR. HOWARD: Does DFG intend to come forward with 12 specific flow recommendations from Fairfield Suisun 13 Treatment Plant and the local creeks? It's rather a 14 difficult decision, as you can imagine. 15 MS. MURRAY: Right, and that is to be worked out in 16 that meeting and that may be discussed further, in more 17 detail at a hearing. But if that were to become a hearing 18 issue, we would put on our opinions as to those local flow 19 augmentations or restorations. 20 MR. HOWARD: My other question was more towards 21 Mr. Guivetchi, the person who did the Department 22 presentation. And that is that you mention in your 23 comments that you're interested in, perhaps, deferring 24 consideration of implementation of a narrative objective 25 until the Suisun Ecological Work Group in the next CAPITOL REPORTERS (916) 923-5447 398 1 tri-annual review. 2 Is that also the opinion of all of the signatories 3 to the Suisun Marsh Preservation Agreement, or is there 4 some disagreement in that respect? 5 MR. GUIVETCHI: I'm Kamyar Guivetchi, again. I will 6 speak on behalf of the four parties; members of other 7 parties are here and please feel free to add to what I 8 might say. 9 As I tried to explain, the Preservation Agreement 10 the focus is primarily on the managed wetlands, which is 11 separate from the narrative standards. So in the framework 12 of our agreement we have not addressed that. However, I 13 will note that all four -- representatives of all four 14 parties are participants of the Suisun Ecological Work 15 Group and have been for the last three years, since it was 16 given in the Board recommendation. 17 And we also concur that group has not completed 18 its work. And it's always been our consideration, or we're 19 of the mind that that information would be provided to the 20 Board about October of this year, and that it was not 21 intended to be part of the water rights proceedings, 22 because it's actually speaking to the objectives 23 themselves, and that that would be considered under the 24 next tri-annual review by the State Board. 25 MR. HOWARD: Thank you. CAPITOL REPORTERS (916) 923-5447 399 1 HEARING OFFICER CAFFREY: All right. Thank you, sir. 2 Any other questions for Ms. Murray? Thank you very much. 3 That completes the portion of the workshop on the 4 Suisun Marsh Agreement, which then leaves one other subject 5 area, which is presentation and comments, if there are any, 6 on other agreements that may be near completion, or still 7 being negotiated. I think maybe what we can do by a 8 showing of hands is to try and just get a tally of how many 9 parties may wish to make such a presentation. 10 Could we just start out by showing of hands and 11 then break that down by groups, if there are groups. One, 12 two, three, four, five, six. 13 MR. SCHULZ: I think I've got the complete list, if 14 you're interested. 15 HEARING OFFICER CAFFREY: Well, that's good. 16 Mr. Schulz, why don't you come up here, if none of the 17 other parties have a problem with you speaking to the list 18 anyway. 19 MR. SCHULZ: Right. 20 HEARING OFFICER CAFFREY: Anyone who has an objection 21 to what Mr. Schulz says, I know you are all very shy, you 22 probably won't even try to raise your hand. 23 MR. SCHULZ: There is going to be presentations with 24 respect to the status of negotiations with the Glenn/Colusa 25 Irrigation District, with the -- in combination with the CAPITOL REPORTERS (916) 923-5447 400 1 South Sutter and Camp Far West, what we call the Lower 2 Sacramento River Water Users, which are Natomas Central RD 3 108, that is going to be a group that's going to be talked 4 about in a block. 5 The Department of Water Resources I know wants to 6 discuss South Delta, North Delta, Putah Creek and Cache 7 Creek. So those are four presentations. And then I was 8 going to make a very brief statement on just grouping 9 others that we're working on that haven't reached the point 10 where we feel a separate presentation on them is necessary. 11 HEARING OFFICER CAFFREY: Is there anybody that 12 raised their hand that's not covered by Mr. Schulz's list? 13 I doubt I could repeat your list, by the way. How many 14 separate presentations are we talking about? Why don't I 15 make a list up here. 16 MR. SCHULZ: I believe seven and then my summary of 17 others that we're working on. 18 HEARING OFFICER CAFFREY: Seven separate 19 presentations and then your summary? 20 MR. SCHULZ: Right. 21 HEARING OFFICER CAFFREY: Anybody have an estimate of 22 how much time that's going to take? Does anybody out there 23 feel that they need more than -- I mean since these are 24 still being formulated, I would anticipate that these are 25 not going to be detailed presentations -- CAPITOL REPORTERS (916) 923-5447 401 1 MR. SCHULZ: Well, actually, four of them have 2 agreements in place, North Delta, South -- 3 HEARING OFFICER CAFFREY: You're going to talk about 4 some that are already in place? 5 MR. SCHULZ: Oh, yes. North Delta, South Delta, 6 Putah Creek and Cache Creek have all got agreements in 7 place. And those the Department will present. 8 MR. SANDINO: We'll probably need 20 to 30 minutes. 9 HEARING OFFICER CAFFREY: 20 to 30 minutes? 10 MR. SANDINO: Yes. 11 MR. SCHULZ: And then I'm going to be participating 12 in the GCID, in the Lower Sacramento River Water Users, and 13 the South Sutter Camp Far West presentations. Those 14 probably in combination are maybe another half hour -- 20 15 to 30 minutes, again. And then I've got about a 16 five-minute presentation at the end on the other ones that 17 we're working on. 18 HEARING OFFICER CAFFREY: So roughly estimating that 19 sounds like an hour, hour and a half on the presentation 20 part? Did I understand that correctly? 21 MR. SCHULZ: Yeah. 22 HEARING OFFICER CAFFREY: I think what I would be 23 inclined to do -- I'm open for suggestions or discussion 24 among the Board Members and anybody else in the audience, I 25 think what we might do is just hear all of those first CAPITOL REPORTERS (916) 923-5447 402 1 without going through the list of cards for every single 2 one, and then allow the card submitters the opportunity to 3 comment on those in general. Is that disagreeable to 4 anyone -- disagreeable to you, Mr. O'Brien? 5 MR. O'BRIEN: Just one suggestion, Mr. Caffrey? 6 HEARING OFFICER CAFFREY: Please. 7 MR. O'BRIEN: A lot of these, Mr. Schulz and some of 8 us are working on together, I think it might be helpful to 9 have the people involved in each deal, to the extent they 10 want to supplement Mr. Schulz's comments do that at the 11 outset, and then others can comment. 12 HEARING OFFICER CAFFREY: That's fine. As a matter 13 of fact, I think that's a great suggestion and goes along 14 with what we've been doing. As the principal presenter 15 comes up for each of these, please, identify who's with 16 you. And by all means, those of you that think you might 17 have a comment to add, come to the front and sit with the 18 presenter. It will keep us from forgetting. I think 19 that's a good suggestion. 20 Would there be any objection, then, with starting 21 with the Department of Water Resources, or did you -- did 22 you as a group have an order in mind? 23 MR. SCHULZ: No. 24 HEARING OFFICER CAFFREY: Does that work? 25 Mr. Sandino, do you want to start out with DWR's CAPITOL REPORTERS (916) 923-5447 403 1 explanation of agreements and then the other -- we had -- 2 were you going to be the principal spokesman for the entire 3 other group, or -- 4 MR. SCHULZ: The other group is essentially all 5 Sacramento River. So they do fit into a block. 6 HEARING OFFICER CAFFREY: All right. Sounds goods. 7 Mr. Sandino. 8 MR. SANDINO: I have a question for you, too. We 9 want to make some comments on the phasing of the hearing. 10 It sounds like that would be more appropriate for closing 11 comments. 12 HEARING OFFICER CAFFREY: Actually, people have been 13 doing that as they came up, because I think some people 14 were here to comment on only portions of the agreement. So 15 early on in the proceeding I encouraged people to do that 16 at whatever time they wished to. You can do it when you 17 present this. It if it's unrelated, or if it takes a 18 significant amount of time, you might want to wait until 19 the end. 20 MR. SANDINO: I think we'll wait until the end, 21 closing. 22 HEARING OFFICER CAFFREY: Okay. 23 MR. SANDINO: My name is David Sandino and I'm 24 appearing on behalf of the Department of Water Resources. 25 I'm going to make presentations on three settlements, one CAPITOL REPORTERS (916) 923-5447 404 1 on-going negotiation. And then after that I will turn over 2 the podium to my colleague Dave Anderson who will make a 3 presentation about the Department's efforts in the South 4 Delta. 5 The first settlement I'd like to speak to is the 6 Putah Creek Settlement. The Department and the State Water 7 Contractors and Solano County Water Agency have proposed to 8 enter into a settlement concerning Putah Creek. The 9 parties have agreed to a factual stipulation. And I want 10 to emphasize, a factual stipulation that as long as Solano 11 County Water Agency continues to exercise its water rights 12 on Putah Creek in accordance with its current water rights, 13 no requirement should be placed upon Solano to implement 14 the water quality objectives in the Delta. 15 The parties believe this settlement is consistent 16 with the Board Decision 1494 issue in 1993 which determined 17 for purposes of Term 91 that Putah Creek water -- water 18 rights have been exercised on Putah Creek as little, or no 19 hydraulic continuity with the Delta, or when the Delta was 20 not in balanced conditions. The Department has reviewed 21 the technical basis for Decision 1494 (sic) as applied -- 22 as applied to the current water quality objectives and 23 believes that the conclusions in Decision 1594 about Putah 24 Creek are still correct and are applicable to these 25 objectives. CAPITOL REPORTERS (916) 923-5447 405 1 So in summary, we believe that we have a good 2 factual stipulation that Solano County Water Agency when 3 it's exercising its water rights is doing so when there is 4 little or no hydraulic continuity with the Delta or when 5 the Delta is not in balance. So that is number one. Maybe 6 I should stop there and see if there's any questions. 7 HEARING OFFICER CAFFREY: Actually, what we'll do is 8 we won't be shy. 9 MR. SANDINO: Okay. Very good. 10 HEARING OFFICER CAFFREY: If any of the Board Members 11 have a question, they'll get my attention or yours and the 12 staff as well. I'll ask the staff to please raise their 13 hand to any question. 14 MR. HOWARD: Mr. Sandino, I assume that also assumes 15 the Suisun Marsh objectives? 16 MR. SANDINO: What we're dealing with strictly is for 17 Putah Creek and Suisun Marsh, yes. We left open the 18 possibility for Green Valley Creek. That was not addressed 19 specifically in the stipulation. 20 MR. ANDERSON: You misspoke, Dave, just repeat it. 21 MR. SANDINO: Did I? Maybe I need some help. Could 22 you repeat the question? 23 MR. HOWARD: You mentioned they had no responsibility 24 for meeting Delta objectives. In our EIR we also looked at 25 the possibility of using water from Lake Barryessa for CAPITOL REPORTERS (916) 923-5447 406 1 Suisun Marsh objectives in the Western Marsh. And my 2 question was: 3 Your stipulation for your factual document would 4 also apply to the trying to meet the Western Suisun Marsh 5 objectives from Lake Barryessa; that is that Lake Barryessa 6 has no responsibility to meet those? 7 MR. ANDERSON: I can answer that. The answer is: 8 No, it does not apply to the Suisun Marsh objectives. 9 HEARING OFFICER CAFFREY: That was David Anderson 10 from the Department of Water Resources. Please proceed, 11 Mr. Sandino. 12 MR. SANDINO: Thank you. The second settlement that 13 we would like to discuss is the Cache Creek Settlement. 14 The form and foundation for this settlement between the 15 Department and the State Water Contractors and Yolo Flood 16 Control and Water Conservation District concerning Cache 17 Creek is very similar to the settlement that we just 18 discussed for Putah Creek. 19 Yolo County Flood Control and Water Conservation 20 District has exercised its Cache Creek rights when Cache 21 Creek has little or no continuity with the Delta, or when 22 the Delta is not in balanced conditions as recognized in 23 Decision 1594. Similar to the settlement for Putah Creek, 24 the Cache Creek Settlement also provides that no 25 requirements be placed on the District to implement the CAPITOL REPORTERS (916) 923-5447 407 1 water quality objectives provided the District continues to 2 exercise its water rights consistent with its current 3 permits. 4 The third settlement or stipulation that I would 5 like to discuss is involving North Delta Water Agency. In 6 1981 the Department entered into a long-term agreement with 7 North Delta Water Agency concerning the assurances of water 8 quality, water supply of dependable quality from the Delta 9 for use by the Agency. The Department and the Agency have 10 entered into a stipulation that clarified the 11 interpretation of the 1981 Agreement as it relates to this 12 water rights hearing. The stipulation provides in its deep 13 part that the Department will be responsible for meeting 14 North Delta Water Agency's obligation, if any, to 15 contribute to the plan's water quality objectives. 16 So those are the three stipulations that we feel 17 are -- are relevant. We've discussed -- these stipulations 18 have been attached to our statement to the Board and are 19 also available on the Department's web site if parties to 20 the proceeding wish to review them. 21 HEARING OFFICER CAFFREY: Let the record show, while 22 we have a slight pause, that Mr. Del Piero has returned 23 from the water -- other water wars and is joining us at the 24 dais. 25 MEMBER DEL PIERO: It's cooler in Oakland, CAPITOL REPORTERS (916) 923-5447 408 1 Mr. Chairman. 2 HEARING OFFICER CAFFREY: Welcome back, Mr. Del 3 Piero. I saw you standing at the back of the room with 4 your twin brother. That's the first time I've seen him. 5 It was a bit of a shock. At first I thought you were going 6 to send him up here and see if anyone was going to notice. 7 MEMBER DEL PIERO: That would be too cruel to suffer 8 with two of us in a day. 9 MEMBER FORSTER: He looks older than you. 10 MEMBER DEL PIERO: That's good. 11 HEARING OFFICER CAFFREY: Mr. Sandino, please, 12 proceed. Sorry for the interruption. 13 MR. SANDINO: No problem. Now, we will turn next to 14 a brief discussion item before the Board about settlement 15 discussions that are ongoing in the Feather River service 16 area. The Department, the Western Canal District, the 17 Joint District, and State Water Contractors have been 18 involved in discussion with the Feather River folks. 19 The Department is mindful of the position of 20 Mr. Baber as he presented that to you earlier this morning 21 and you listened to his comments carefully. The Department 22 believes that due to the special relationship with the 23 entities in the Feather River area and importance of the 24 Feather River's contribution to satisfy Delta objectives, 25 the Department believes that it is in the interest of all CAPITOL REPORTERS (916) 923-5447 409 1 the parties to the proceedings that the Feather River's 2 Delta obligations are resolved through discussions. 3 Although we do not have a settlement to report to 4 the Board at this time, the Department is optimistic that 5 we will have a settlement in the next few months. We will 6 keep the Board and other parties to this proceeding 7 informed of our efforts. If something turns up we'll let 8 you know right away. Before I leave and ask Steve Anderson 9 to come up, do you have any questions? 10 HEARING OFFICER CAFFREY: Any questions from the 11 Board Members? 12 MEMBER DEL PIERO: Mr. Sandino, your direction to me 13 was to make sure that all my questions were directed to 14 Mr. Anderson? 15 MR. SANDINO: That was one of the noticed principals 16 of the hearing. So -- 17 MEMBER DEL PIERO: Thank you for -- 18 MR. SANDINO: Hopefully, he'll come up. 19 HEARING OFFICER CAFFREY: Continuing colloquy. 20 MEMBER DEL PIERO: Nice to see you, Mr. Anderson. 21 MR. ANDERSON: You, too, Mr. Del Piero. Glad to see 22 you returned for my presentation. 23 MEMBER DEL PIERO: I wouldn't have missed it, sir. 24 HEARING OFFICER CAFFREY: I'm overwhelmed by the 25 sincerity of that remark. CAPITOL REPORTERS (916) 923-5447 410 1 MEMBER DEL PIERO: Mine or his? 2 HEARING OFFICER CAFFREY: Both. 3 MR. ANDERSON: I'm here with the secret desire of 4 every lawyer for the Department. I do want to note that 5 Mike Ford will attempt -- Mike Ford had planned to make 6 this presentation, but he had a sudden illness and couldn't 7 make it. And since I made capitalizations of our South 8 Delta Program before, I thought I would come up and make a 9 brief summary of what was submitted in Mike Ford's 10 presentation, which was distributed yesterday, I believe. 11 I'd also like to note, also, we have a Draft EIR 12 out in the interim South Delta Program, which contains the 13 interior South Delta elements which we'll be discussing 14 today. I'll also note, too, as I alluded to, we made 15 previous presentation to the Board and particularly in the 16 late fall of 1995 when the Board was conducting its scoping 17 for the EIR process. We conducted a very lengthy workshop 18 on this program. So there's really nothing new here. I 19 think it's appropriate to summarize this material. 20 And also I'll direct people to refer to the 21 written presentation which we've made. This settlement 22 came out of a lawsuit that was filed by the South Delta 23 Water Agency a number of years ago, I guess the Bureau and 24 the Department. And in a nutshell what this is all about 25 is a barriers program. There's three barriers involved, CAPITOL REPORTERS (916) 923-5447 411 1 the Middle River Barrier, Old River Barrier and a Grantline 2 Barrier which are designed to protect adverse impacts upon 3 water circulation, elevations, and water quality in the 4 interior South Delta. 5 The Board has agricultural objectives in its Water 6 Quality Control Plan which include Vernalis, and then what 7 I would call the Interior South Delta objectives. And it's 8 in reference to the latter group, the Interior South Delta 9 objectives that we've made two very, very important points. 10 And they're made on the last page of Mr. Ford's 11 presentation. 12 The first one is that given the current patterns 13 of agricultural use and the current channel configuration 14 in the South Delta, one, the Board's objectives can't be 15 met through the regulation of Delta inflow and Delta 16 diversions alone. 17 And the second is that we believe that the barrier 18 program is the best practical solution to providing the 19 best quality possible to agricultural beneficial uses in 20 the South Delta. But even with the aid of the proposed 21 barriers, and this is the second important truth, the 22 compliance with the objectives cannot always be guaranteed. 23 So whatever order the Board fashions to embrace this 24 agreement in this program ought to recognize that. That -- 25 that the best that the projects can do here is to install CAPITOL REPORTERS (916) 923-5447 412 1 and operate these barriers as they have been designed. 2 I would note that Mr. Ford's presentation contains 3 a discussion of where we've been and where we're going with 4 this project. It's been incorporated into -- by this 5 project, I refer simply to the agricultural barriers. It's 6 incorporated into our temporary barriers' program as well 7 as the Interim South Delta Program. And as I just said, 8 too, a draft EIR/EIS was released on this latter program in 9 the last couple months. 10 I will also note, too, that the barriers are 11 referred to in VAMP with respect to protecting South Delta 12 agricultural from the aggravating effects of the 13 installation of the Head of Old River Barrier. Finally, 14 what I'd like to do is introduce Mr. Steve Roberts who is 15 the chief of the South Delta Management Section and will be 16 here to answer any questions that the Board may have. 17 And that concludes my presentation. 18 HEARING OFFICER CAFFREY: Is that the entirety of the 19 DWR presentation? 20 MR. ANDERSON: Yes, it is. 21 HEARING OFFICER CAFFREY: All right. Let's see if 22 there's any questions at this time from the Board Members. 23 Nothing. 24 Mr. Howard. 25 MR. HOWARD: Yeah, the water quality objectives have CAPITOL REPORTERS (916) 923-5447 413 1 a narrative clause in them that says if they can't be met 2 that -- it says if a three-party agreement is executed 3 between the Department, the Bureau and South Delta Water 4 Agency, that provides protection for South Delta Water 5 Agency's interests that they'll be reevaluated. 6 Is there going to be a contract executed that 7 would reflect operation of these barriers and perhaps the 8 quality that's anticipated with the operation of these 9 barriers? 10 MR. ANDERSON: Right now there is a draft contract 11 that's been drafted over several years, which South Delta 12 Water Agency has signed and the Bureau is yet to sign it. 13 In fact, the Bureau is coordinating and participating with 14 us in the interim South Delta Program. So we do expect the 15 Bureau to sign this; you would actually have a signed 16 agreement. 17 MR. HOWARD: And would that agreement cause this 18 clause to be executed, in your opinion? 19 MR. ANDERSON: Yes. 20 MR. HOWARD: Thank you. 21 HEARING OFFICER CAFFREY: Anything else? 22 Ms. Leidigh. 23 MS. LEIDIGH: Yeah. I had a question: Are there any 24 other impediments to carrying out this agreement other than 25 getting the Bureau to sign? Is there any Endangered CAPITOL REPORTERS (916) 923-5447 414 1 Species Act? 2 MR. ROBERTS: No. Yes, just like anything else, we 3 have to get a biological opinion. We need to get it 4 through the EIR/EIS process also. And we need to get 5 permits like any other project, a permit from the Corps of 6 Engineers. So we're -- we're early in the process. 7 MS. LEIDIGH: Okay. How soon do you expect that 8 process to be completed? 9 MR. ROBERTS: I don't have to take an oath on this, 10 do I? We've been working on this program now for about 12 11 years. And we had hoped -- we have received draft 12 biological opinions right now from two agencies. We're 13 still waiting to get a draft opinion from NMFS. We're not 14 quite sure when we'll get that. But there's going to be 15 some work required after we receive those to iron out some 16 inconsistencies between the various opinions. So we have 17 our work cut out for us still. 18 MS. LEIDIGH: Okay. 19 HEARING OFFICER CAFFREY: That's it on the questions. 20 Thank you, gentlemen. Appreciate it. Thanks to the 21 Department of Water Resources. We will -- why don't we 22 take about a 15-minute break. And then when we come back 23 we'll hear the grouping of the agreements as presented by 24 Mr. Schulz. 25 (Recess taken from 2:46 p.m. to 3:05 p.m.) CAPITOL REPORTERS (916) 923-5447 415 1 HEARING OFFICER CAFFREY: Please, find your seats and 2 we'll continue with our presentation on pending and -- 3 pending agreements and some which have already been in 4 operation. And we will hear from Mr. Schulz when he is 5 ready. 6 MR. SCHULZ: Good afternoon. In addition to the Yuba 7 River Agreement, which you heard quite a bit about this 8 morning, the export users have been negotiating with a 9 number of other Sacramento River and tributary water users 10 over the last year plus. And we would like to give you 11 some information on several of those that have reached a 12 pretty definitive stage, not the stage of having a contract 13 such as Yuba's, but some of them are quite close to that. 14 And the -- one thing that I would point out that 15 we're going to be talking about this afternoon, not only 16 other reservoirs, but we'll also be talking about direct 17 diverters. So there's two -- really two different kinds of 18 contracts that we're dealing about, those entities that 19 operate reservoirs and those that have direct diversions 20 off of the Sacramento and the Feather -- or major 21 tributaries. We would like to start out by talking about 22 Glenn/Colusa Irrigation District. And the presentation -- 23 I'll be making the presentation on behalf of the exporters. 24 MR. HITCHINGS: Andrew Hitchings on behalf of 25 Glenn/Colusa Irrigation District. CAPITOL REPORTERS (916) 923-5447 416 1 HEARING OFFICER CAFFREY: Thank you, gentlemen. 2 Please proceed. 3 MR. SCHULZ: We'll be sharing the podium on this one. 4 Glenn/Colusa -- the reason I'm talking about this one first 5 is this is a pretty large one. Glenn/Colusa is about -- in 6 excess of 800,000 acre feet of diversions. And so when we 7 start applying the formula which we talked about earlier 8 today, it's a -- it's a settlement agreement that can range 9 in the 70 to 80,000 acre feet of water. So it's a 10 substantial block in terms of what's going on. 11 It represents a Bureau Water Rights Settlement 12 with contractors with whom we are dealing with that have 13 not only water rights of their own, but also a Bureau 14 contract. And it involves an interesting situation for us, 15 which Andy will go into a little more detail, that is that 16 as you may be aware, they are the ones that have had a 17 major problem with the screen at Hamilton City; and have 18 had to reduce their diversions historically. And as a 19 result, we got a peak at what possibly can be done in water 20 short years in trying to stretch your water supply when you 21 can't divert your full right. And so one thing I would 22 point out at the very outset in our discussions with GCID 23 is we do not expect their screen to be completed until 24 about 2002? 25 MR. HITCHINGS: In about three to five years. CAPITOL REPORTERS (916) 923-5447 417 1 MR. SCHULZ: Yeah, three to five years. 2 MEMBER DEL PIERO: What's taking so long? 3 MR. SCHULZ: It is a very big screen. 4 MEMBER DEL PIERO: I deserved that. 5 MR. HITCHINGS: We just had the ground breaking 6 ceremony this past Friday. And that was after a lengthy 7 environmental review process. And it will be the longest 8 flat-plate screen in the world. It will be about 600 feet 9 long. And it's -- it's been an enormous undertaking and 10 there are a lot of issues that are associated with it as 11 far as eminent domain and settling with some of the parties 12 that own the land in the vicinity. So it will probably 13 take, I think, three years is the optimistic forecast and 14 it can take slightly longer. 15 MEMBER BROWN: What is the cost? 16 MR. HITCHINGS: It's 40-million dollars is the 17 estimated cost right now. And it is a specifically 18 authorized project under the CVPIA. The Federal Government 19 is picking up 75 percent of the cost; the State is picking 20 up 12 and a half; and then the District itself is picking 21 up 12 and a half percent. 22 MR. SCHULZ: But the aspect that is important from 23 the standpoint of the exporters is since 1991 when the 24 screening problems first arose under the Endangered Species 25 Act, GCID has been diverting in the neighborhood of 100 to CAPITOL REPORTERS (916) 923-5447 418 1 150,000 acre feet less than its entitlement under this 2 contract with the Bureau. And so the other State and 3 Federal contractors, the exporters in effect, have been 4 seeing that as extra flow that we had not received or 5 gotten. 6 So one of the things that we have been working 7 with GCID is the fact that we would not be seeking anything 8 from them in this proceeding until their screen program is 9 done, because we're already getting it. And so we have a 10 triggering event that we've been working on in the 11 negotiations that will put the program into place after -- 12 after the screen is completed and when they're authorized 13 to go back to their full diversion rate. 14 MEMBER DEL PIERO: The Bureau has been diverting that 15 water farther down stream? 16 MR. SCHULZ: It's probably being split. In effect 17 it's flow in the river, either storage releases, it may be 18 less storage releases, carryover in Shasta, it could be 19 natural flows in the river which are split under the COA, 20 so it's going to various places. But it's clearly new -- 21 in effect, new water that's been in there since '91, but 22 when the screens go in it might not be there any longer. 23 So that's -- I guess the reason I'm saying this is because 24 it's an example of what we've run into in these negotiating 25 processes, every one of these districts presents a rather CAPITOL REPORTERS (916) 923-5447 419 1 interesting and unique set of facts that we have to deal 2 with. 3 MEMBER BROWN: How have you been making up the 4 shortfall, Andy? 5 MR. HITCHINGS: We have relied on groundwater in some 6 years. We have a groundwater well program. The other 7 thing that's interesting about the district, we don't have 8 a number of our own groundwater wells. We execute 9 individual agreements with landowners who have wells and we 10 wrapped that into a groundwater well program where we pay 11 them for the water and we apply that in lieu of diverting 12 surface water. That's one component. 13 A very large component of it is very extraordinary 14 conservation measures. We say "extraordinary," most of our 15 landowners say conjunctive, because in many cases it has 16 essentially stopped tail water flows, or very little tail 17 water flows out of the rice fields up there, which accounts 18 for about 85 percent of the planning in GCID. So that in 19 itself has also led to some problems as far as salinity is 20 concerned on some of the landowners' property in the 21 district. So there is a real growing pressure once we get 22 back up to the level where we can divert our historic 23 amounts to go back to those levels and decrease some of 24 these -- or to do away with some of these extraordinary 25 conservation measures to deal with some of these salinity CAPITOL REPORTERS (916) 923-5447 420 1 concerns that a lot of our farmers are experiencing. 2 MR. SCHULZ: So the direction that we have been going 3 with respect to these litigations is in dry and critical 4 years to ask that some of those existing conservation and 5 other programs be continued, but not continued in all year 6 types in the way that it is happening right now because of 7 the screening problem. But like the Yuba Agreement, to 8 have a program in place so that in dry and critical years 9 when we would want to exercise the option to get water 10 under the settlement process is to have them reinitiate 11 some of those programs. And thereby we believe -- if they 12 initiate -- GCID is sort of a closed basin. So we believe 13 we can be fairly confident that they're up at their maximum 14 authorized rate of 825,000 acre feet. 15 If we have conservation programs in place that 16 that would reduce the diversions at Hamilton City and; 17 thereby, we will experience the additional water in the 18 Sacramento River that we're looking for. And so that's the 19 direction that we're moving in with GCID. We have had 20 numerous settlement discussions. One of the things that 21 we're negotiating right now is what is the baseline in 22 which additional conservation would be measured? They've, 23 obviously, carried out some conservation measures already. 24 And we'd be looking for additional conservation measures in 25 those drier years. We would be looking for the baseline on CAPITOL REPORTERS (916) 923-5447 421 1 those. And we're also negotiating what the payment would 2 be, similar to Yuba, for that -- for that additional 3 conservation, or possibly the groundwater programs, or 4 whatever we put into place. 5 I think we have a good conceptual agreement. And 6 now we're going to be in the process of trying to get it 7 down in writing, negotiate out a couple of difficult 8 issues. Again, I think we'll be using the Yuba County 9 Water Agency format. That's the contract that we sort of 10 now have. It's a standard form contract with necessary 11 modifications in particular to the exhibits, take care of 12 the different characters of GCID Water Agency. 13 MEMBER BROWN: That basin is not being overdrafted. 14 So that would be a good program to try to develop a 15 conjunctive use program where you might be able to increase 16 the yield of the projects. Are you considering that? 17 MR. HITCHINGS: Mr. Brown, those are some of the 18 long-term plans of the District. And the District is very 19 active with -- there's a Groundwater Committee in Glenn 20 County, that is very active now with some of the efforts 21 now in Colusa County. So there is a push to do that. And 22 one of our major problems with that though is that 23 infrastructure cost. Since the District does not have its 24 own wells at this point, those are substantial costs for 25 the District to incur. CAPITOL REPORTERS (916) 923-5447 422 1 MEMBER BROWN: Okay. 2 MR. HITCHINGS: But then, again, we're going to be 3 looking for Prop 204 money to hopefully put some type of 4 program like that into place. 5 MEMBER BROWN: That could increase yield, I would 6 think. 7 MR. HITCHINGS: I agree. 8 MEMBER DEL PIERO: Is there a Groundwater Management 9 District there in Glenn County? 10 MR. HITCHINGS: GCID does have an AD 3030 Plan and it 11 is in the middle of its monitoring and data gathering phase 12 of that plan right now. 13 MEMBER DEL PIERO: Did the plan get approved, or did 14 you do a neg dec? How did you do it? 15 MR. HITCHINGS: Neg dec and I think it was adopted in 16 1995. 17 MEMBER DEL PIERO: Was there a study on defining the 18 magnitude of the underground basin? 19 MR. HITCHINGS: That's part of the plan itself. 20 MEMBER DEL PIERO: Okay. 21 MR. HITCHINGS: A few other things I wanted to add, I 22 think we spoke to a number of the points that I was going 23 to go through. I think it's important to emphasize like 24 the Yuba Agreement, the standards are intended to be met as 25 part of this agreement. It's contemplated that the Bureau CAPITOL REPORTERS (916) 923-5447 423 1 and DWR will ultimately be the guarantors, again, like it's 2 contemplated within the Yuba Agreement. 3 So this, essentially, will be a part of the water 4 that would be provided, but ultimately DWR and the Bureau 5 would pick up -- the obligation would ultimately rest with 6 them. We are going to need to talk further with the Bureau 7 and DWR about that. We recognize that and I think Alf 8 Brandt's comments previously during the workshop apply here 9 as well. And the other thing, there's no intent to place 10 the burden of meeting the standards on anyone but the State 11 and Federal Projects as far as GCID is concerned. And 12 that's the way this agreement contemplates that happening 13 similar to the Yuba Agreement. 14 MR. SCHULZ: That's GCID. 15 HEARING OFFICER CAFFREY: All right. 16 MR. SCHULZ: Kevin O'Brien is going to be sort of 17 doing the next group with me. 18 HEARING OFFICER CAFFREY: Good afternoon, 19 Mr. O'Brien. 20 MR. O'BRIEN: Good afternoon, Mr. Chairman, Members 21 of the Board, Kevin O'Brien representing various Sacramento 22 Valley Districts as indicated on our notice. 23 MR. SCHULZ: Why don't we start with South Sutter and 24 Camp Far West. They are the operators of the Camp Far West 25 Reservoir on the Bear River. CAPITOL REPORTERS (916) 923-5447 424 1 MR. O'BRIEN: South Sutter Water District is about a 2 40 to 45,000 acre district, primarily rice growing. It 3 owns and operates the Camp Far West Reservoir, which is 4 about 105,000 acre foot reservoir on the Bear River. Camp 5 Far West Irrigation District, which Mr. Gallery represents, 6 has certain prior rights and pursuant to agreements with 7 South Sutter has certain rights to water from the Camp Far 8 West Reservoir. 9 This settlement would include and cover both South 10 Sutter Water District and Camp Far West Irrigation 11 District. The interesting thing about South Sutter Water 12 District is it currently engages in a conjunctive use 13 program. The reservoir provides about two acre feet per 14 acre to meet the rice growing needs. As you know rice 15 requires somewhere around five to six acre feet per acre. 16 The difference is made up by pumped groundwater every year. 17 So they've been doing conjunctive use for quite some time. 18 This settlement, as Mr. Schulz will explain, would involve 19 some additional releases of stored water. And they would 20 make that water up by pumping additional water in dry and 21 critical years. 22 MR. SCHULZ: This is -- again, we're back to a 23 reservoir project. The same process that we described in 24 Yuba and applied it to the unimpaired flows of the Bear and 25 the Camp Far West it is a small settlement. It's 4,400 CAPITOL REPORTERS (916) 923-5447 425 1 acre feet in dry and critical years. But the small numbers 2 start adding up after a while. And it's -- it's a -- is 3 different than what we see. And maybe, Kevin, you can 4 comment on this, it is likely that Prop 204 monies here 5 will be involved in producing some facilities alterations 6 on maybe lining of ditches, or some enlarging of siphons 7 under major highways so that in the wetter years they can 8 take more surface water which would enable them to provide 9 the addition surface water out of the reservoir in dry 10 years, and rely on groundwater basin less in the wet years 11 and more in the dry years and, in effect, a more effective 12 conjunctive use program is what we're looking at in terms 13 of Prop 204. 14 CO-HEARING OFFICER STUBCHAER: Mr. Chairman? 15 HEARING OFFICER CAFFREY: Question, Mr. Stubchaer? 16 CO-HEARING OFFICER STUBCHAER: You mentioned ratio 17 voluntary flows. I thought we heard that Yuba was based 18 upon depletions to get the 19,000. 19 MR. SCHULZ: What we said was that the -- I believe 20 somebody said we did it both ways, but I believe my 21 overhead -- 22 MEMBER BROWN: Watershed, wasn't it? 23 MR. SCHULZ: -- was based on unimpaired flows. 24 CO-HEARING OFFICER STUBCHAER: I thought that came 25 out to 17,000. Based on depletions came out to 19,000. CAPITOL REPORTERS (916) 923-5447 426 1 MR. SCHULZ: Both methods came out roughly 17 2 measured flows. The reason we went to 19 was to pick up 3 Collins Lake, the Browns Valley Irrigation District, which 4 was not in the calculations, because it flows into the Yuba 5 below Bullards; and also to pick up Cordua, Hallwood, and 6 those who take out of the river below. So that was the 7 reason why the adjustments were made from the calculations 8 made on the Yuba. Here there doesn't appear to be any 9 reason to do any adjustments on the Bear. And so the 10 formula we discussed this morning was the way we approached 11 it. 12 It -- again, other than the number differences I 13 think you can expect to see a contract that is almost 14 identical to the Yuba format, again, with making sure that 15 there are no -- with the backstops, with making sure that 16 the standards are fully met, and the other things that 17 we'll talked about a whole lot during the rest of this day. 18 MR. O'BRIEN: The one issue that is sort of 19 different, and the one issue we haven't resolved, is the 20 payments for the water. Yuba, as you recall, is going to 21 be paid $25 per acre foot for released water. Since this 22 water will be made up by pumping, we think it's only fair 23 that the pumpers be made whole on the pumping cost. And I 24 think they had agreed in principle with that. We still 25 haven't reached agreement on the actual number, but we have CAPITOL REPORTERS (916) 923-5447 427 1 a bracketed range of numbers and I think we'll be able to 2 close that gap. 3 MEMBER BROWN: Are you talking about reimbursement 4 for pumping cost, or reimbursement for a water value plus a 5 pumping cost? 6 MR. SCHULZ: On the settlements we are talking about 7 the pumping cost. In other words, this -- again, this is 8 not a water transfer, per se, it's a settlement. So for 9 this we're talking about ascertaining what their actual 10 costs of pumping are and making sure they're made whole. 11 MEMBER BROWN: Okay. 12 MR. SCHULZ: And the Prop 204 money to be used for 13 infrastructure by the contractors as we discussed. 14 MEMBER DEL PIERO: Do they have an AB 3030 Program 15 yet? 16 MR. O'BRIEN: Yes, they do. 17 MEMBER DEL PIERO: They do. And is this percolated 18 groundwater or underflow? 19 MR. O'BRIEN: This is all percolating groundwater. 20 This is a basin, it was an overdraft before the reservoir 21 went in. And since the reservoir went in it maintains 22 groundwater levels fairly consistent. 23 MEMBER DEL PIERO: Do they still rely heavy on 24 groundwater for pumping? 25 MR. O'BRIEN: As I said, they get about a third of CAPITOL REPORTERS (916) 923-5447 428 1 their water from the reservoir and about two thirds is 2 pumped. 3 MEMBER DEL PIERO: And the third that comes from the 4 reservoir, is that direct application or percolation from 5 the basin? 6 MR. O'BRIEN: Direct application. 7 MEMBER DEL PIERO: What kind of fee do they pay for 8 the groundwater that they pump? 9 MR. O'BRIEN: Fee in the sense of -- 10 MEMBER DEL PIERO: Do they pay the district -- do the 11 groundwater pumpers pay the district a fee pursuant to the 12 AB 3030 Plan? 13 MR. O'BRIEN: No. There's nothing like a pump tax or 14 anything like that. 15 MEMBER DEL PIERO: What's the AB 3030 Plan do then? 16 MR. O'BRIEN: Primarily monitors groundwater levels. 17 MEMBER DEL PIERO: How do they plan to do that? 18 MR. O'BRIEN: I guess their attitude is they're doing 19 conjunctive use. They are light years ahead of a lot of 20 folks in the State. If it's not broke, don't fix it. 21 MEMBER BROWN: The basin is in balance? 22 MR. O'BRIEN: Correct. 23 MEMBER DEL PIERO: Okay. 24 MR. SCHULZ: The next one we want to talk about is 25 Kevin represents a group of plans for which we the CAPITOL REPORTERS (916) 923-5447 429 1 exporters call the Lower Sacramento River water users. 2 I'll let him describe who they are, because I can never 3 remember all the names. 4 MR. O'BRIEN: There is quite a few of them. The 5 major districts are Sutter Mutual Water Company, 6 Reclamation District 108, Natomas Central Mutual Water 7 Company, Maxwell Irrigation District, River Farms Mutual 8 Water Company, Meridian Farms Mutual Water Company, I 9 probably missed one or two, but those are the major ones. 10 It's about 600,000 acre feet total contract water under the 11 water rights settlement contracts. 12 MR. SCHULZ: So, again, this is a fairly large group. 13 There's an interesting element with respect to this group 14 of negotiations which I'd like to distinguish from GCID in 15 particular, and would like to demonstrate some of the 16 complexities that we're going through in trying to 17 negotiate out these matters. 18 In GCID's case there is -- somewhere I have an 19 overhead I want to put up. In GCID's case they have 20 historically and currently divert, except for when they 21 have the screen problem, about 100 percent of the amount of 22 water that they have under contract with the Bureau. In 23 the case of a lot of these contractors that we just -- that 24 Kevin represents, they in the '80s diverted just about all 25 of the water that they had under contract with the Bureau. CAPITOL REPORTERS (916) 923-5447 430 1 But in recent years they have -- their diversions are less 2 than their maximum contractual amounts. And that has 3 raised Water Code Section 1011 as an element of these 4 negotiations. 5 And Water Code Section 1011 is the one that was 6 passed, I think it was part of the Governor's Commission on 7 Water Rights back in the early '80s. And -- or late '70s, 8 which essentially says that if you reduce the amount of 9 your diversion through conservation efforts, you don't lose 10 the water right. And in Section (b) of 1011 it says, 11 "Water or the right to the use of water -- 12 THE COURT REPORTER: I'm sorry, Mr. Schulz. 13 MR. SCHULZ: Okay. I'm sorry, I'm trying to read. 14 "May be sold, leased, exchanged, or otherwise transferred 15 pursuant to any provision of law relating to the transfer 16 of water rights." 17 What is "conserve water" is an issue that these 18 sets of negotiations have brought to the forefront, because 19 we do have a gap between the amount of water that's been 20 diverted, say, for the last ten years and the amount that 21 they have under their contracts, and also a gap between 22 what their maximum historic diversions have been since 1011 23 was passed and what they are diverting now. 24 We are trying to avoid litigation on what 1011 25 means as much as we're trying to avoid a contentious CAPITOL REPORTERS (916) 923-5447 431 1 proceeding before this Board. I don't know whether 2 conversion of land from rice to a runway is conservation, 3 or a switch of crops from rice to tomatoes, or what is 4 conservation? Plus it's even more complicated with respect 5 to some of these, because 1011 talks about the use of water 6 under the appropriate right. And, of course, they have a 7 combination of appropriate rights, riparian rights, Bureau 8 contracts, and everything else -- 9 MEMBER DEL PIERO: The reduction has been in the 10 contract water, right? 11 MR. SCHULZ: Not completely. 12 MEMBER DEL PIERO: But for the most part? 13 MR. O'BRIEN: It's primarily base supply. 14 MEMBER DEL PIERO: Really? 15 MR. SCHULZ: 1011 has thrown a rather nasty curve, 16 one which I believe we are starting to work out now, but 17 it's there. Because we don't want to enter into a 18 settlement agreement with respect to the Delta standards 19 and then find out that 1011 comes along later and there's a 20 water transfer of water that's not been diverted for the 21 last 10, 12 years, and the benefit we get out of the 22 settlement agreement goes down the river. So we have 23 been -- that's probably the most difficult aspect of this 24 particular set of negotiations. 25 MEMBER DEL PIERO: I've got an answer for your CAPITOL REPORTERS (916) 923-5447 432 1 question. 2 MR. SCHULZ: You do? 3 MEMBER DEL PIERO: Yeah, unless washing the runway 4 down is designated as a beneficial use it's not 5 conservation. 6 MR. O'BRIEN: I feel compelled to speak. 7 MEMBER DEL PIERO: I knew you would. 8 MR. O'BRIEN: We -- actually, our engineers have done 9 some fairly extensive analysis of this conservation water. 10 We've decreased our diversions by about 120,000 acre feet 11 over the last 10, 15 years. And we believe based on some 12 calculations that they've done, that they've done a net 13 savings to the Sac River System of about 50 to 70,000 acre 14 feet. You can argue about the numbers, but that primary 15 result changes in cropping patterns, changes in crops. And 16 you can see under the definition of "conservation" in 1011 17 that crop rotation is specifically mentioned as a basis for 18 water conservation, the bulk of this to conserve water is 19 in relation to changing crops. 20 MEMBER BROWN: You've got more consumptive use crops, 21 then? 22 MR. O'BRIEN: Correct, primarily rice. There's also 23 an element in this relating to circulation of water 24 relating to the rice service side issue. Many of these 25 districts have installed expensive systems to recirculate CAPITOL REPORTERS (916) 923-5447 433 1 the water within the District and that has reduced the 2 gross diversions from the river. 3 MR. SCHULZ: Anyway, both sides of these negotiations 4 are in agreement that we have to settle this issue as well 5 as any other settlement issues we may have with other 6 users. We've agreed that our people from a policy -- my 7 clients have agreed from a policy standpoint that they're 8 willing to recognize that there probably is some 1011 water 9 in this. 10 What our negotiations are about is: How much? 11 And what would we be willing to pay in order to have 12 that -- have them in effect waive their right to market 13 that, any 1011 -- historic 1011 water to a third party? 14 And we had our most recent negotiation no more than a week 15 to 10 days ago. And we believe we made some very 16 substantial progress on it. 17 We want to talk about this one, specifically, 18 again, to show you the types of things that we run into, 19 the very different issues that each one of these 20 negotiations raises. And also to say -- we didn't want to 21 just say, by the way we're talking to them. We continue to 22 give deference to our activities. I mean we're really out 23 there, we're really working to get these things done. 24 MEMBER BROWN: Mr. Chair? 25 HEARING OFFICER CAFFREY: Mr. Brown. CAPITOL REPORTERS (916) 923-5447 434 1 MEMBER BROWN: The tail water from that area, does it 2 drain into, what is it, the 2040 ditch, or what is the -- 3 is that it? 4 MR. O'BRIEN: Much of it. Well, most of it is sent 5 back to the river. For example, RD 108 pumps water 6 directly back into the river at a pumping plant. Some of 7 it goes into the 2047 drain. 8 MEMBER BROWN: 2047? 9 MR. O'BRIEN: Yeah. 10 MEMBER BROWN: Has there been any problem with 11 downstream users that use out of that, or do they still 12 pump out of that drain for irrigation purposes? 13 MR. O'BRIEN: That has been a problem more for 14 Glenn/Colusa Irrigation District. In fact, some of the 15 clients that my firm represents are downstream water users 16 on that drain. And there have been some discussions 17 between GCID and that group of growers relating to those 18 diversions. 19 MR. SCHULZ: And that's an issue being dealt with in 20 the GCID negotiation. 21 MEMBER BROWN: Okay. 22 MR. SCHULZ: So that's another large set of 23 negotiations. Since, again, this is about 600,000 acre 24 feet of diversion, so we may be talking about 50, 60,000 25 acre feet of water through this process. And when you CAPITOL REPORTERS (916) 923-5447 435 1 combine these negotiations with the Feather, which the DWR 2 talked about and the ones we've got in place, we're 3 probably talking right now of negotiating with people that 4 divert and hold water rights of maybe 5 two-and-a-half-million-acre feet of diversions in the 6 Sacramento River Basin and its tributaries. 7 In addition, the only other thing -- the only 8 thing I guess I wanted to do was quickly list. We are also 9 talking to the Placer County Water Agency. We have had 10 negotiating sessions with Placer on the Upper American 11 River. They have taken a copy of the Yuba format contract 12 and are marking up and are suppose to have a copy back to 13 us in approximately a week. We have provided them with our 14 calculations, again, on the same methodology. And I think 15 it comes out around -- Placer, about 20,000 acre feet on 16 their project. 17 We've been contacted by Nevada Irrigation 18 District, which has indicated that they would like to begin 19 negotiations with us. Dan Gallery talked to you about 20 Woodbridge earlier. Dan Gallery and I have discussed -- 21 I've asked Dan for some data on Woodbridge's -- what impact 22 the Mokelumne Agreement is going to have on Woodbridge. 23 And he's going to provide me with that to see if we can 24 work out an agreement with Woodbridge. We had negotiations 25 with the City of Sacramento, RD 1004. And then as Kevin CAPITOL REPORTERS (916) 923-5447 436 1 mentioned, Maxwell Irrigation District is one of his group 2 of clients. 3 So that's -- we're probably negotiating with a 4 dozen organizations, groups, districts, whatever, right 5 now. And one of the things that we will ask when we get to 6 the portion of this proceeding on the schedule is: We 7 would really like to have another workshop in the latter 8 part of May to bring you up-to-date on where these are. 9 And we expect to have more by that time in the same 10 position that Yuba was today. 11 HEARING OFFICER CAFFREY: Let me say that we will 12 always accommodate that -- the provision of that kind of 13 information. I'm not sure whether it's going to be in a 14 separate workshop, or if -- if these things come up when 15 the water rights proceedings have already started and then 16 we wait, we can always accommodate all of the parties by 17 presenting them within the time period of the hearing 18 itself and treating it something like a policy statement, 19 or a workshop within the -- a clause within the water 20 rights so that everybody who wants to can participate just 21 as we've done here today. 22 Mr. Stubchaer? 23 MR. SCHULZ: When we start the July/August hearing 24 we're not planning on stopping the negotiations. 25 HEARING OFFICER CAFFREY: We wouldn't expect you to. CAPITOL REPORTERS (916) 923-5447 437 1 Let me say this, there's no question that time is of the 2 essence. We certainly commend you all for your efforts. 3 People are doing a lot of hard work here and we appreciate 4 that. And I'm sure that -- I don't mean that in the 5 majority of the wrath. I'm sure the people who oppose some 6 of the provisions of these agreements also appreciate the 7 hard work that's gone into them. 8 At the same time, I want to make it clear that we 9 really don't have all the time in the world, but we're 10 trying our hardest to facilitate the fact that you are 11 working hard on these agreements. And so if the water 12 rights process does start, we plan to start in July and 13 August, there will be some way to introduce what you're 14 doing, or what you've accomplished into that context. 15 Mr. Stubchaer? 16 CO-HEARING OFFICER STUBCHAER: I want to ask 17 Mr. Schulz a question. Do you envision -- just as a 18 hypothetical, say the Board decides to face its hearings, 19 does the first four agreements in a water rights hearing, 20 are you envisioning that almost concurrently with that we 21 would hold workshops on the other pending agreements that 22 would then be the subject of another round of water rights 23 hearing? 24 MR. SCHULZ: Yes. Plus I think there are -- I guess 25 the answer to that would be, yes. But -- I can see that CAPITOL REPORTERS (916) 923-5447 438 1 occurring. In other words, we're going to be ready for 2 VAMP in July. We know that we're going to be ready for 3 Yuba. We're going to be ready for Suisun Marsh. We are 4 going to be ready for those kinds of proceedings to start. 5 And I'm hoping, quite frankly, that I'm ready with some 6 others, too. There's absolutely no reason why we can't be 7 ready on Camp Far West and South Sutter and possibly with 8 Placer and do some of those at the same time. 9 HEARING OFFICER CAFFREY: But I take it the timing 10 that you're describing, it is your hope -- I don't want to 11 put words in your mouth, it is your hope that a lot of 12 these agreements would come to fruition and be offered to 13 the Board and the other parties before entering into the 14 phase of the water rights that would cover the non-agreeing 15 parties? 16 MR. SCHULZ: Oh, absolutely. 17 MEMBER DEL PIERO: And the question I have -- I'll 18 ask you the same question I asked yesterday and I know 19 people don't like hearing it, but I'm going to ask it 20 anyway: When are the environmental reviews suppose to be 21 conducted on documents that no one knows what the content 22 is going to be? 23 MR. SCHULZ: Well, I mean, the Yuba Agreement, of 24 course, has the environmental documentation, but as soon as 25 we knew what the contract looked like, the -- Yuba acted as CAPITOL REPORTERS (916) 923-5447 439 1 the lead agency and did the environmental review. And 2 that's done. 3 MEMBER DEL PIERO: I've already seen the 4 correspondence -- 5 MR. SCHULZ: Right. 6 MEMBER DEL PIERO: -- from everybody. Have you seen 7 ours? 8 MR. SCHULZ: The Board's correspondence to Yuba? 9 MEMBER DEL PIERO: Yeah. 10 MR. SCHULZ: And I believe Yuba -- 11 MEMBER DEL PIERO: Maybe that was discussed this 12 morning when I wasn't here. It was discussed this morning. 13 Forget it. I'm sorry. Don't worry about it. 14 MR. SCHULZ: Okay. And, again, Yuba took a long time 15 because it was the first one. But we created not only -- 16 we not only negotiated an agreement, but we created a form 17 of contract that is going to speed the others up and it has 18 certain fundamental precepts. So I think the other things 19 are going to go faster. 20 MEMBER DEL PIERO: You're assuming, then, at least in 21 terms of Yuba, since that's the only one we've got here, at 22 this point that this Board would not amend their water 23 rights then? 24 MR. SCHULZ: No. We talked about -- Alan Lilly has 25 been talking to your staff about possible amendments to CAPITOL REPORTERS (916) 923-5447 440 1 their water rights to accomplish this. 2 MEMBER DEL PIERO: So, then, we would be expected to 3 be the responsible agency in that instance; is that 4 correct? 5 MR. SCHULZ: You would be acting as the -- I should 6 really let Alan be talking about this. You would be acting 7 as the responsible agency with respect to their reservoir 8 and their issues and -- and utilize your environmental 9 documentation for a Delta issue. 10 MEMBER DEL PIERO: I'd like to have staff explain 11 that. How we're going to be a responsible agency on a 12 water rights decision? I don't mean now. I mean how -- 13 HEARING OFFICER CAFFREY: There was commentary this 14 morning to that effect. I did need to bring Mr. Del Piero 15 up to speed as to what the answer was to that. 16 MEMBER DEL PIERO: I apologize. 17 HEARING OFFICER CAFFREY: No, no, don't apologize. 18 We understand your concerns and they are not taken lightly. 19 And we will make sure that you understand what the comments 20 were with regard to that. 21 MEMBER DEL PIERO: And the other agreements that 22 you've been talking about, when does the environmental 23 review get done, Mr. O'Brien? 24 MR. O'BRIEN: I would anticipate we would follow the 25 Yuba approach. CAPITOL REPORTERS (916) 923-5447 441 1 MEMBER DEL PIERO: Negative declaration is off? 2 MR. O'BRIEN: Well, to the extent that's appropriate. 3 MEMBER DEL PIERO: Okay. 4 HEARING OFFICER CAFFREY: Does that complete the 5 presentations on existing and pending agreements? 6 MR. SCHULZ: Yes. 7 HEARING OFFICER CAFFREY: All right. Did we miss 8 anybody? All right. Thank you. What we now want to do -- 9 and it looks like we will conclude today. I have about 40 10 cards including the presenters. What I thought we might do 11 is to go through the cards one more time and give everybody 12 the opportunity to come forward and comment on the 13 presentations, or the joint presentation that we just had 14 and/or give your closing remarks, if you feel the need to 15 give some kind of a closing statement on something you 16 didn't get a chance to cover. We'll just go through the 17 cards one more time and you can do either/or both, or you 18 can decline as well. So, with that then we'll go through 19 the cards in the order that we've been following today. 20 Steve Ottemoeller? 21 MR. OTTEMOELLER: I'd like to defer to Tom 22 Bermingham. 23 HEARING OFFICER CAFFREY: All right, sir. 24 Mr. Bermingham, welcome back, sir. 25 MR. BERMINGHAM: Thank you, Chairman Caffrey. I CAPITOL REPORTERS (916) 923-5447 442 1 won't take up too much of Board's time in making closing 2 remarks, because Westlands Water District joins in remarks 3 that will be made later by the State Water Contractors. 4 But there's one issue I'd like to address specifically and 5 that's when Westlands thinks the Board should take up the 6 issue of consolidated place of use which is a result of a 7 petition filed by the Bureau of Reclamation. 8 I have seen in some of the written comments that 9 have been submitted in connection with this workshop that 10 certain parties propose taking up that issue in the first 11 phase. Based on the comments that were received by the 12 State Board in connection with the EIR/EIS, I suspect that 13 is going to be an issue that is more contentious than any 14 of the parties expected. And for that reason we would -- 15 we would propose that if the State Board phases the hearing 16 process that that issue be put off to a later stage in the 17 hearing. And those are the only specific comments that 18 Westlands would make other than, again, stating that we 19 will -- we have joined in the statements that will be made 20 by the State Water Contractors. 21 HEARING OFFICER CAFFREY: Thank you very much, 22 Mr. Bermingham. 23 MR. BERMINGHAM: Thank you. 24 HEARING OFFICER CAFFREY: We will certainly consider 25 your advice. CAPITOL REPORTERS (916) 923-5447 443 1 Dave Schuster? Good afternoon, Mr. Schuster. 2 MR. SCHUSTER: Thank you, Mr. Chairman, Board 3 Members, my name is Dave Schuster. I've got two issues 4 that I'd like to talk about. One of them is on the Marsh, 5 that I missed particulars on that, in that case I represent 6 the State Water Contractors. First, obviously, State Water 7 Contractors they strongly support what was represented to 8 you by the agency themselves. 9 One thing I thought I could do in terms of 10 assisting this Board is that on behalf of State Water 11 Contractors is I hired to sort of was monitor, if you will, 12 those negotiations and discussions primarily because of my 13 historical background dealing with the original agreement. 14 The parties, the four parties were kind enough to allow me 15 to participate directly in those discussions. I wanted to 16 say from my perspective they've been very successful in 17 meeting this Board's objectives. 18 The numeric objectives that we're trying to meet 19 in this agreement were established initially in 1978 20 through the 1485. They were very contentious at that time, 21 because of meeting Delta outflow, it was taking lots of 22 water which our people such as myself regarded as 23 unreasonable. And what is through this Board, what we've 24 done here is find ways to meet those standards directly in 25 terms of Water Quality Standards in the channels as CAPITOL REPORTERS (916) 923-5447 444 1 required by the Board, or meet in the Western Marsh 2 specifically the original objective of this Board was to 3 provide the soil salinities necessary to grow the habitat 4 necessary for the wintering waterfowl. They've done a good 5 job. There's a significant amount of money being proposed 6 to spend to do that through the management efforts that 7 they have explained to you. 8 State Contractors will be the ones paying for 40 9 percent of that cost. We are in total agreement with this 10 agreement and willing to pay that. I also coordinated 11 very, very closely with the Federal Contractors and 12 attempted to represent their interests also with less 13 enthusiasm since they weren't paying me. And I think I can 14 say with confidence they, too, support this agreement in 15 terms of their contribution to implementing that agreement. 16 I think one thing I think that needs -- we -- this 17 Board deserves a heads up on -- and I've been trying to 18 think about how to say this, I don't want to create a 19 conflict that will result outside of these hearings, but at 20 this point in time the four parties have not sign that 21 agreement. There is some issues with some of the federal 22 agencies as alluded to to some extent in the Club Fed 23 statement and my written statement given by Patrick Wright 24 in terms of concerns about -- I don't mean how it was 25 worded, but whether you're actually addressing a narrative CAPITOL REPORTERS (916) 923-5447 445 1 directive directly, and he talked about brackish marshes. 2 Some of the exception is really -- is the original 3 objective of this Board, and the I think the rest of us, I 4 don't mean to lay that on the Board, are appropriate, more 5 brackish marsh habitat for other species, that there's a 6 process established today among the agencies. I was going 7 to say led, but Mr. Spear was involved in that process and 8 they hope to have that resolved prior to your official 9 hearing in July. I just want you to know there's still 10 work to do. I want to make sure you knew about that. I 11 think we, in the broad sense of the word, will be able to 12 resolve it outside of the hearing. 13 Second issue I want to talk about -- and it will 14 be very, very brief is just sort of a backing up some of 15 the stuff Cliff Schulz said and others in terms of 16 settlement agreements, in that case I'm representing Kern 17 County Water Agency. One of things I just want to remind 18 the Board is Mr. Schulz talked about the way our policy 19 goal, and therefore us, the hands-on negotiators is working 20 with Kevin O'Brien and his group in terms of getting past 21 credits in some way for past conservation. I don't need to 22 remind the Board, I'm sure you're very aware of the ten 23 points that were presented in terms of what would make 24 these settlement agreements acceptable to the Club Fed 25 agreement, Club Fed group, that would not be acceptable. CAPITOL REPORTERS (916) 923-5447 446 1 So that's another issue we have to work with if not 2 document, but water being made available since 1994. And 3 we're talking about conservation measures that have taken 4 place prior to that, a number of years prior to that. And 5 I forgot the last one, so it must not have been very 6 important, but it was on the same issue. The main point I 7 want to let you know is that on the Marsh it's a very, very 8 good agreement. We're very strongly supportive and we 9 still have got more work to do and we want you to be aware 10 of that. 11 HEARING OFFICER CAFFREY: Thank you, Mr. Schuster. 12 It's been quite a while since we've seen you. Mr. Brown 13 has a question for Mr. Schuster. 14 MR. SCHUSTER: Sorry. 15 HEARING OFFICER CAFFREY: Mr. Brown. 16 MEMBER BROWN: Dave, you're pretty familiar with the 17 CVPIA and have worked with it for several years. Do you 18 know anything in that that would support or preclude usage 19 of those funds for purchase of water as proposed in the 20 VAMP Agreement? 21 MR. SCHUSTER: No, of course, that's my opinion. I 22 think the background on that one is interesting. The idea 23 that I think Congress intended, when I say, "I think," I 24 don't want to make this a flash statement, actually started 25 before this Board in the late '80s, one of the many CAPITOL REPORTERS (916) 923-5447 447 1 hearings we were having that led to 1630, D-1630 was an 2 idea saying that Friant, you know, has an obligation to 3 mitigate for impacts caused by Friant doing that to 4 releasing water banks, no economic sense, in our opinion, 5 water users opinion, but they would still have a mitigation 6 responsibility. 7 So we talked about them providing money to help 8 mitigate, and mitigate really means to provide better 9 habitat and more fishery populations in the Lower San 10 Joaquin from the Merced confluence downstream. That was an 11 idea presented to this Board by me and others. When the 12 surcharge occurred, it came up in a bill submitted by 13 Senator Semore and that was proposed. That's where the $4 14 surcharge came up with the idea of doing just that, Friant 15 people contributing on top of the other surcharges, money 16 to help mitigate or to improve fishery habitat downstream 17 of Merced. That idea is incorporated in CVPIA. The 18 four-dollar surcharge that has now escalated because of 19 inflation, although it was never stated as I just stated 20 it. So to answer your question directly: I don't think 21 there's anything that precludes it. It's up to the 22 agencies. I personally would agree -- my personal opinion 23 is actually very consistent with what I think Congress 24 intended. 25 MEMBER BROWN: Thank you. CAPITOL REPORTERS (916) 923-5447 448 1 HEARING OFFICER CAFFREY: Anything else? Thank you 2 very much, Mr. Schuster. 3 Michael Jackson? 4 MR. JACKSON: No comment. I've had plenty of time to 5 talk. 6 HEARING OFFICER CAFFREY: Thank you, sir. Alf 7 Brandt? 8 MR. BRANDT: Yes, please, sir. Alf Brandt, 9 Department of Interior, we're not going to make a comment. 10 Let me just do a couple of things. One is make an 11 observation as far as scheduling, after hearing all of 12 today, I'm not going to put forward a position of exactly 13 what we should do, but as I've listened to these agreements 14 this afternoon I've -- I've started to think maybe joint 15 point -- maybe the issue of joint point may be something 16 that we need to deal with earlier rather than later, 17 because it may be a foundation issue for resolving how the 18 settlement agreements get worked out. So it's just an 19 observation I'll offer. It's not an absolute position at 20 this point of the Department of Interior. It's just an 21 observation as I listened this afternoon. 22 The only other thing I want to do is one thing, 23 and we may have other comments that we'll submit to you in 24 writing, but I want to correct any misimpression given by 25 some of the San Joaquin County -- San Joaquin area CAPITOL REPORTERS (916) 923-5447 449 1 contractors, or water right holders about the operation of 2 New Melones. And I guess the key thing here is the San 3 Joaquin River Agreement does not cause any losses that they 4 may perceive in their reduction in the amount of contract 5 water, or other things from New Melones. 6 The issues that those really are about are -- 7 predate the San Joaquin River Agreement, predate many 8 things. We go back to a flow cap of 1500 csf that goes 9 back to the '80s, that the Ninth Circuit has adopted for 10 flows for New Melones, it goes back to Endangered Species 11 Acts issues, it goes back to the CVPIA, it goes back to a 12 number of things that far predate the San Joaquin River 13 Agreement. So it's not the San Joaquin River Agreement 14 that's suddenly imposing all these losses, or greater loss, 15 or more loss on these contractors. 16 Many of them have -- or at least two of them have 17 at least partly what I'll call conditional rights, but 18 they're basically rights to supplemental water anticipated, 19 or long-term contracts anticipated over the years. They 20 may be reduced, the amounts that they have access to may be 21 reduced. So they don't -- Central San Joaquin has some 22 sure firm supplies, but they don't have the kind of 23 contracts that are the firm supplies. 24 MEMBER BROWN: What about Stockton East I think they 25 call it "interim supply"? CAPITOL REPORTERS (916) 923-5447 450 1 MR. BRANDT: That's right, an interim supply. 2 MEMBER BROWN: 35,000 acre feet or something? 3 MR. BRANDT: Yes, it may not be official on that, 4 but, yes, it is an interim supply. 5 MEMBER BROWN: Does it have an effect on that 6 potential? 7 MR. BRANDT: Yes, I think the effect has been what's 8 happened up until now. We've had problems trying to 9 provide enough water for them even before the San Joaquin 10 River Agreement, because we've had duties under our permits 11 and other things to take care of the water -- water quality 12 issues at Vernalis and other places as well as in-stream 13 issues, all those things together have contributed to it, 14 so it's not really the San Joaquin River Agreement. 15 And the same with Tuolumne Utilities District, you 16 know, we are willing to give them a supply if we have any, 17 but at this point because of our other demands we don't 18 have any. I guess I just want to emphasize that we're -- 19 we would be happy to negotiate with them, but there are 20 limits, there are limits that are outside of the San 21 Joaquin River Agreement. And if you take away anything, 22 it's not the San Joaquin River Agreement that's in their 23 way, but it's a number of other permits. And I'll leave it 24 at that. 25 HEARING OFFICER CAFFREY: Thank you, Mr. Brandt, CAPITOL REPORTERS (916) 923-5447 451 1 appreciate your comments. 2 David Sandino. Anything from DWR? Welcome back, 3 sir. 4 MR. SANDINO: Good afternoon, David Sandino on behalf 5 of the Department of Water Resources. The Department would 6 like to first express its support for the Board's decision 7 to hold this workshop. The settlement process has been 8 facilitated by the workshop. The significant progress on 9 settlements that we've heard over the last few days I think 10 is strong evidence of the wisdom of the Board's decision. 11 Most long-time observers of the Delta agree 12 because of the complexity of these Delta Water Rights 13 Hearings, the most likely way to achieve a successful 14 resolution is through a negotiation and settlement. The 15 Legislature also recognized this fact through its passage 16 and ultimate adoption by voters of Proposition 204 which 17 created, as you know, a 25-million-dollar bond program 18 administered by the Department and the Board to assist in 19 implementing the plan. 20 The substantial funds that have been earmarked 21 under Proposition 204 to assist in implementing the plan is 22 a clear expression by the Legislature and the voters of the 23 importance of the successful resolution of this hearing. 24 Let me give you, as promised, our blueprint for the 25 remainder of the hearings. CAPITOL REPORTERS (916) 923-5447 452 1 The Department strongly supports a phasing of the 2 hearings into two rounds, which we believe gives the 3 hearings the optimum chance of being successful. We 4 suggest that the first rounds of hearing be noticed to 5 include all scheduled settlements discussed today and -- 6 during today's workshop and yesterday's, and which occur 7 after the workshop and before the first round is noticed. 8 At the end of the first round, the Board would 9 issue a draft water rights decision, this is our view. 10 This decision would be followed by the Board's adoption of 11 a CEQA document for the first round and then the Board's 12 issuance of a final water rights order covering the first 13 round. The second round of the phasing would cover all 14 remaining issues. 15 We believe that the start of the first round of 16 the hearings should be timed to permit the maximum 17 opportunity to reach still further settlements, yet, at the 18 same time keep the hearings on track to be completed in an 19 expeditious manner. We suggest the first round of hearings 20 start sometime this summer to achieve these goals. We 21 would also support that the Board hold another workshop 22 before the first is noticed to give the Board an update on 23 the ongoing settlement negotiations. 24 The Department also recommends that the Board 25 divide the first round of hearings according to subject CAPITOL REPORTERS (916) 923-5447 453 1 areas to facilitate the presentation of testimony and to 2 give the hearing structure. We suggest that the first 3 subjects to be heard in this first round, or to be heard 4 this summer would be San Joaquin River Settlements and 5 Delta Settlements. 6 Included with these first settlements to be 7 presented would be VAMP, Mokelumne Settlement, Suisun 8 Marsh, and the South Delta Agreement. We estimate that the 9 presentations of these subjects would take at least a 10 month. After these subjects are completed, the Board would 11 next hear testimony on the Sacramento River Settlements 12 that would be completed at that time. 13 As we mentioned earlier, the second round of the 14 hearings would consist of the presentation of all issues 15 that remain unresolved after the Board's first round of 16 hearings. These would include the allocation of 17 responsibility, a flow objectives to nonsettling parties, 18 and to parties in which the Board does not accept 19 settlement, and also the joint point of diversion issue. 20 That concludes my presentation on our suggestion for the 21 phasing of the hearings. 22 HEARING OFFICER CAFFREY: Thank you very much, 23 Mr. Sandino. We appreciate your comments and the thought 24 that you've given this. 25 MEMBER DEL PIERO: And your vacation schedule. CAPITOL REPORTERS (916) 923-5447 454 1 MR. SANDINO: It's not going to be this summer, 2 unfortunately. 3 HEARING OFFICER CAFFREY: It's kind of looking that 4 way for some of us, too. Are there questions? 5 Ms. Whitney. 6 MS. WHITNEY: When would you propose we would take up 7 the issue of a consolidated place of use? 8 MR. SANDINO: I don't think we have a strong opinion 9 on that. We had discussed it, but I think we're going to 10 leave that one open. 11 MR. WRIGHT: Thank you. 12 MEMBER DEL PIERO: Mr. Chair? 13 HEARING OFFICER CAFFREY: Yes, Mr. Del Piero. 14 MEMBER DEL PIERO: Are those the four issues that 15 need to be addressed? 16 MR. SANDINO: Are the ones that we suggested, yes. 17 MEMBER DEL PIERO: The rest of them, even the ones 18 that might be present now, are you recommending for later 19 hearing? 20 MR. SANDINO: Well, we're suggesting that any 21 settlements that occur between now and the Notice that we 22 would add those to the first round. 23 MEMBER DEL PIERO: Question -- shall I pose the 24 question to you that has been posed to everyone else? 25 MR. SANDINO: About CEQA compliance? CAPITOL REPORTERS (916) 923-5447 455 1 MEMBER DEL PIERO: Yes. 2 MR. SANDINO: I don't think I can add or detract to 3 all the learner answers that have been given. 4 HEARING OFFICER CAFFREY: Spoken like a fine Santa 5 Clara law professor. 6 MR. SANDINO: No, we'd be happy to share our views on 7 the CEQA compliance. If you wish we can do that in 8 writing, if you wish. 9 MEMBER DEL PIERO: Okay. 10 HEARING OFFICER CAFFREY: Thank you very much, 11 Mr. Sandino. We appreciate your input. 12 Virginia Cahill? 13 MS. CAHILL: No comment. 14 HEARING OFFICER CAFFREY: Jean Zolezzi? 15 MS. ZOLEZZI: Thank you. Jeanni Zolezzi representing 16 Solano County Water Agency. I just wanted to support the 17 presentation made by David Sandino, Department of Water 18 Resources. Solano County Water Agency is one of the 19 signatories to the Putah Creek Settlement. We hold the 20 water -- the contractual water rights from the United 21 States for the Solano Project, which is the major water 22 user on Putah Creek. 23 A couple of things that really distinguishes this 24 agreement and the Cache Creek Agreement from some of the 25 others here today. We believe that these settlements are CAPITOL REPORTERS (916) 923-5447 456 1 simply an abbreviated method to reach the correct legal 2 result that would be reached through a hearing process 3 because of the factual support of the lack of hydrologic 4 continuity during the times of critical period. And the 5 fact that these settlements are consistent with both the 6 environmental document for these hearings and prior Board 7 decisions, which noted that lack of hydrologic continuity. 8 And we can provide factual information at any subsequent 9 hearing which we will do that supports that finding of the 10 lack of hydrologic continuity. 11 And finally two points: The settlement agreement 12 for Putah Creek does not address two of the more 13 contentious issues which are left aside. I think we 14 clarified earlier that it does not address the Suisun Marsh 15 issue. That is left outside of the agreement, so that the 16 different alternatives can be looked at. And while Solano 17 County Water Agency will definitely have opinion on that 18 alternative, it will be dealt with outside of the 19 settlement agreement. 20 It also does not address in-stream flows on Putah 21 Creek, which as you well know have been a very contingent 22 legal issue. They're currently subject to litigation and 23 will be in front of the Board in the licensing issues, 24 those will be resolved in the other forums and not 25 addressed, not attempted to be addressed in this settlement CAPITOL REPORTERS (916) 923-5447 457 1 agreement. So we would support that and, of course, could 2 answer any questions and will provide further factual 3 information at the subsequent hearings. 4 Just one point of clarification on behalf of 5 Stockton East Water District in response to Mr. Brandt's 6 presentation, I want to clarify as well that it is not our 7 position, and I don't believe the position of the San 8 Joaquin County interests that we believe that the San 9 Joaquin River Agreement is in itself depriving us of any 10 water, or creating the problem on the Stanislaus River. To 11 the contrary, we acknowledge and agree with Mr. Brandt that 12 those problems predated the San Joaquin River Agreement. 13 Our concern is this: The San Joaquin River 14 Agreement is being proposed to the Board to be adopted as a 15 part of a water rights decision. Whether or not it changes 16 water right permits, it would be a decision of this Board. 17 Our concern is that having it adopted as a decision of this 18 Board would bootstrap some legitimacy to those flows. You 19 know that we have a dispute with the United States, that 20 is: Their legal right to make those releases before our 21 contractural commitment. That is a dispute under CVPIA, 22 that is a dispute under Bay-Delta Accord, and those 23 disputes are being negotiated and are being litigated. 24 We believe the San Joaquin River Agreement, if 25 adopted by this Board, would somehow give legitimacy to CAPITOL REPORTERS (916) 923-5447 458 1 those rights being claimed by the Bureau, because then they 2 can say, "We have to do it, it's a Board order, it's a part 3 of our water rights." That creates serious problems and 4 would put us at a disadvantage to resolving those issues in 5 another forum. So that's our position as a matter of 6 clarification. 7 HEARING OFFICER CAFFREY: All right thank you, 8 Ms. Zolezzi. Mr. Del Piero? 9 MEMBER DEL PIERO: When do you plan on presenting 10 environmental documentation on that issue for incorporation 11 into the Draft EIR? 12 MS. ZOLEZZI: On the San Joaquin River Agreement and 13 our position? 14 MEMBER DEL PIERO: Yes. I'm going to ask 15 Mr. Gallery that same question, if he ever shows back up 16 here again. 17 HEARING OFFICER CAFFREY: He's here. 18 MS. ZOLEZZI: Well, we're encouraging you not to 19 take action on that, so that wouldn't require environmental 20 documentation on that. 21 MEMBER DEL PIERO: Yeah, but they're encouraging us 22 to take action so that's considered an alternative pursuant 23 to the document, or at least ostensibly could be 24 considered. 25 MS. ZOLEZZI: You have proposed a schedule for CEQA CAPITOL REPORTERS (916) 923-5447 459 1 for the San Joaquin River Agreement. That's my 2 understanding. 3 MEMBER DEL PIERO: Are you prepared? 4 MS. ZOLEZZI: To respond to it? 5 MEMBER DEL PIERO: Yes. 6 MS. ZOLEZZI: Of course. That's been drafted for 7 several years. 8 MEMBER DEL PIERO: Hey, I mean, I'm hearing that 9 we're going to process negative declarations -- no 10 disrespect to everybody, but we're going to process 11 negative declarations on 30-year water contracts for 12 deliveries south of the Delta that haven't taken place 13 before. So I'm just wondering whether or not we are just 14 going to not -- not -- 15 MS. ZOLEZZI: Well, I propose negative declarations 16 for a similar -- I won't comment on that. 17 MEMBER DEL PIERO: I asked that question, Mr. 18 Chairman, because I hear the -- I want to hear the 19 substance. 20 MS. ZOLEZZI: Thank you. 21 HEARING OFFICER CAFFREY: Thank you, Ms. Zolezzi. I 22 thought you handled it very well. 23 Tim O'Laughlin? 24 MR. O'LAUGHLIN: First of all, on behalf of the San 25 Joaquin River Group Authority I'd like to address the CAPITOL REPORTERS (916) 923-5447 460 1 settlement proposal and agreements that were discussed this 2 afternoon. We support the process that led to those. We 3 look forward to reviewing those documents. We do not 4 anticipate any problems in supporting those agreements. We 5 will provide the Board with our comments. 6 In regard to the process, I want to go back to 7 yesterday and a discussion and some questions that were 8 raised by Mr. Del Piero. Those were excellent questions 9 and he continues to ask those questions. So what I did 10 last night is I went home and went to the office and 11 prepared a briefing paper, because I decided that those 12 questions deserve to have answers. 13 First of all in regards to that, on behalf of the 14 San Joaquin River Group Authority we will be providing 15 within this document what we would see as a notice coming 16 out of this hearing for the San Joaquin River Group 17 Authority's hearing. We also put into the document the 18 Board's authority for phasing of the hearing. We've also 19 put in a position as to why phasing is a superior 20 alternative to any alternatives proposed at this workshop 21 such as the legal alternative that you heard about, i.e., 22 let's brief legal issues first and then -- what I call the 23 whole enchilada, we can't communicate unless we have the 24 whole thing at once. 25 The next issue that we've addressed in this CAPITOL REPORTERS (916) 923-5447 461 1 document, which takes up about 14 pages on this part is the 2 CEQA compliance that you've asked about. We've set forth 3 two theories under which the Board will be able to pursue a 4 phased hearing, an implementation of a final water rights 5 order in regard to phasing with a final EIR for that 6 document. 7 MEMBER DEL PIERO: By when? 8 MR. O'LAUGHLIN: By when? 9 MEMBER DEL PIERO: Yeah, what's the completion date? 10 MR. O'LAUGHLIN: Well, that would depend on the 11 staff and the State Water Resources Control Board 12 responding to the comments that have been made in regard to 13 the Draft EIR and supplemental EIR. But our understanding 14 is that as soon as those comments can be done and the 15 hearing is closed in regard to phase one, we would expect 16 that a final EIR could be issued in regards to the phase 17 one order and the legal authority is in the briefing. 18 MEMBER DEL PIERO: I understand the legal authority. 19 I'm very familiar with the CEQA guidelines, that's why I'm 20 asking the question. 21 MR. O'LAUGHLIN: Finally, the other question that was 22 raised is how the signatories to the San Joaquin River 23 Agreement view a State Water Resources Control Board order 24 to meet the terms and conditions of the San Joaquin River 25 Agreement and to implement the San Joaquin River Agreement. CAPITOL REPORTERS (916) 923-5447 462 1 As you know that was another question that was raised 2 yesterday in regard to what terms and permits and licenses 3 would, or would not be changed. We have set those forth in 4 detail within this document. 5 As you could probably well appreciate since there 6 are numerous signatories to the agreement, this document is 7 going to be circulated to those other parties before it is 8 submitted to the Board for their review and comment and we 9 would expect this to be in front of the Board in short 10 order for your review in regards to this workshop. 11 Are there any questions? 12 HEARING OFFICER CAFFREY: Thank you, Mr. O'Laughlin. 13 Anything from the Board? 14 MEMBER DEL PIERO: No. I'm looking forward, because 15 yesterday you were talking about us completing the process 16 by the end of August, which in the context of the 30-day 17 requirements for notification pursuant to CEQA guidelines I 18 want know how in the 15 pages you figured out we can do it, 19 because I'm really interested. 20 MR. O'LAUGHLIN: Well, I'm glad and I hope you find 21 it enjoyable reading. 22 MEMBER DEL PIERO: Mr. Anderson is sitting in the 23 back of the room with a smile on his face. 24 MR. O'LAUGHLIN: The other issue, if I could? 25 HEARING OFFICER CAFFREY: You really want to? CAPITOL REPORTERS (916) 923-5447 463 1 MR. O'LAUGHLIN: Yeah, one more. I'm going to step 2 outside with my -- as you know water rights attorneys 3 sometimes represent more than one client, these comments 4 are going to be made specifically on behalf of Oakdale 5 Irrigation District. 6 We -- the Oakdale Irrigation District understands 7 the concerns with regard to the Stanislaus River and the 8 operation of the New Melones interim operation plan. We 9 have been involved in the stakeholder process since the 10 beginning in regards to that. I actually drafted the 11 interim operation plan for New Melones. We have been 12 working with the parties in San Joaquin County to try to 13 arrive at a solution that is -- meets the parties' concerns 14 within the basin. 15 We believe in connection with the studies that 16 we've done with Mr. Steiner and with the United States 17 Bureau of Reclamation that the San Joaquin River Group 18 Agreement provides in connection with the interim of te 19 operation plan a betterment to allowing us to resolve those 20 situations within the basin. We are hopeful that between 21 now and July we will be able to meet with the San Joaquin 22 County interests again as we have met in the past in the 23 stakeholder process to try to iron out those concerns and 24 arrive at some type of solution and understanding so that 25 those entities can support an interim solution for the next CAPITOL REPORTERS (916) 923-5447 464 1 12 years in regards to the adoption of the San Joaquin 2 River Agreement. 3 Thank you. 4 HEARING OFFICER CAFFREY: Mr. Brown? 5 MEMBER BROWN: Yeah. With the water that OID 6 proposes to supply to help mitigate some of the downstream 7 requirements, that water that would be consumptive use 8 water, conserved, or -- 9 MR. O'LAUGHLIN: Yes, within Oakdale Irrigation 10 District we went through the drought period. Our farmers 11 experienced distress during that time period. During the 12 last four years we've been using at or about our maximum 13 contractual agreement with the Bureau of around 300,000 14 acre feet. However, last year we did transfer 10,000 acre 15 feet to the Bureau pursuant to the two-year interim 16 operation plan. This year we're looking to transfer 25,000 17 acre feet to the Bureau pursuant to the interim operation 18 plan. 19 Just to let you know, we haven't even started 20 irrigating within Oakdale this year. So the transfer 21 wouldn't be consumptive water this year, but in years past 22 it has been. And we would expect in the future it will be 23 as well. So we are looking at a program of -- and you'll 24 hear it again when the San Joaquin River Agreement comes 25 forward, Merced is the biggest proponent of this in regards CAPITOL REPORTERS (916) 923-5447 465 1 to their conjunctive use program within Merced Irrigation 2 District. 3 But Oakdale Irrigation District, which is going to 4 put up a large part of the water for the San Joaquin River 5 Agreement is going to be embarking on a very impressive 6 conjunctive use conservation program in regards to monies 7 that are coming into our District so that we can firm up 8 our supply and help meet this need within the Stanislaus 9 Basin and Bay-Delta. And that's we think -- that's why 10 we're confident -- not confident, but hopeful that given 11 some monies coming in and inter -- some relationships that 12 have been developed -- 13 HEARING OFFICER CAFFREY: Mr. O'Laughlin, we 14 appreciate your commentary, but we have many more cards to 15 go. 16 MR. O'LAUGHLIN: Okay. 17 HEARING OFFICER CAFFREY: We're not throwing you out, 18 but you've more than answered that question and I wanted to 19 see if there are any other questions. 20 MR. O'LAUGHLIN: Okay. 21 MEMBER DEL PIERO: No. 22 HEARING OFFICER CAFFREY: Nothing from staff. 23 MEMBER DEL PIERO: When do I get my memo? 24 MR. O'LAUGHLIN: The memo will be -- is being 25 circulated among the signatories and we would expect to CAPITOL REPORTERS (916) 923-5447 466 1 have it to you next week. 2 HEARING OFFICER CAFFREY: I was going to make that 3 announcement as to how much time we have. We'll allow for 4 any further submittals, but we are thinking of May 4th. 5 Mr. Jackson, you had your hand up? 6 MR. JACKSON: Yeah. I was wondering when these 7 memos, since we've entered the workshop program, get filed 8 do they go to everybody who is -- 9 HEARING OFFICER CAFFREY: Seems to me they're 10 probably going to have to. Am I missing anything? 11 MS. LEIDIGH: They should. 12 MR. O'LAUGHLIN: We were going to distribute to all 13 parties who made a Notice of Intent to appear. 14 HEARING OFFICER CAFFREY: All right. Thank you for 15 raising that, Mr. Jackson, for reminding us. 16 HEARING OFFICER CAFFREY: Mr. Macaulay. You've 17 waited long and patiently. 18 MR. MACAULAY: Thank you very much. The good news is 19 I'll be brief. The bad news, I have two statements to 20 make. 21 HEARING OFFICER CAFFREY: Let me just say -- I 22 apologize for interrupting you, we will allow to May 4th, 23 close of business, 5:00, to submit any written commentary, 24 any further written comments that you may have with regard 25 to the subjects that we've covered in this workshop. So CAPITOL REPORTERS (916) 923-5447 467 1 you, also, have that option. 2 Please proceed, Mr. Macaulay. 3 MR. MACAULAY: Thank you very much. The first 4 statement is a statement by various water users that have 5 been distributed to the Board, copies are in the back. 6 This statement is on behalf of the San Francisco Public 7 Utilities Commission, the State Water Contractors -- 8 THE COURT REPORTER: Could you slow down just a 9 little bit? 10 MR. MACAULAY: The San Joaquin River Group Authority, 11 Metropolitan Water District of Southern California, 12 Westlands Water District, the Santa Clara Water District, 13 and the Kern County Water Agency. These water users, and 14 likely others, support the concept outlined in the State 15 Board's -- State Board John Caffrey's March 19th letter and 16 the schedule attached thereto regarding Bay-Delta water 17 rights process. 18 The schedule provides for the phasing of the water 19 rights hearing, it will allow additional time for 20 settlement negotiations to proceed. We also suggest that 21 issues upon which there are already substantial agreements 22 as to other parties should be considered in the first phase 23 of these hearings and that the more contentious issues 24 should be left to a subsequent phase. 25 As several parties have articulated previously in CAPITOL REPORTERS (916) 923-5447 468 1 correspondence and in discussions before this Board, we do 2 not want the Board proceedings and the implementation of 3 ultimate water right decision delayed, to avoid as much as 4 possible any lengthy delay that could be caused by the 5 contentious water right proceedings, which we all fear; and 6 subsequent litigation of broad coalition of the water 7 users, federal and state agencies, and others have been 8 actively involved in settling as many issues as possible. 9 As you've heard before on a variety of these 10 agreements, settlement agreements, the Suisun Marsh 11 Agreement, and so on, to date I think it's clear that our 12 efforts have proven to be successful. There's a great deal 13 of success that has been talked about all day yesterday and 14 today. Despite the success as all Board Members have 15 observed, the process is not complete. The unfinished 16 settlement agreements discussed today by Cliff Schulz and 17 others, today's other settlement negotiations which are 18 expected to be in-progress soon will continually be 19 actively pursued in the next weeks and months ahead. 20 Obviously, the process that the Board lays out 21 can't be delayed in the hope that all issues will be 22 settled. The schedule attached to Chairman Caffrey's 23 letter, however, provides a useful framework to allow the 24 Board hearing process to commence, while continuing the 25 opportunity for completion of additional agreements. CAPITOL REPORTERS (916) 923-5447 469 1 In fact, we suggest that the Board, as with other 2 parties, hold an additional workshop prior to the 3 commencement of the water rights hearing in July to allow 4 the opportunity to hear more about some more successes, 5 more progress on some of the settlement agreements 6 discussed today. In deciding how to proceed with the water 7 right hearings, the Board should be fully cognizant of the 8 fact that the San Joaquin River negotiations which 9 culminated in the agreements discussed yesterday might not 10 have come this far if the Board had not delayed the 11 commencement of the water rights hearing from March to 12 July. 13 It is clear that this minor delay was worth the 14 effort and the fact that a negotiated settlement is in 15 front of us that otherwise might have taken years to reach 16 success is a measure of the benefit in that slight delay. 17 We see at least three benefits from a phased hearing 18 process, which is the one attached in the proposed schedule 19 in Chairman Caffrey's letter laid out: 20 First, the completion of additional settlement 21 agreements which could decrease the number of participants 22 in the subsequent hearings. Second, the completion of 23 settlement agreements will facilitate a consensus 24 atmosphere for the ongoing CalFed process. As we all know 25 the same folks who were involved in the CalFed process will CAPITOL REPORTERS (916) 923-5447 470 1 be involved in the Water Board's water rights proceeding. 2 And it's tough to be able to give full attention to both 3 and have both succeed in the short time that both processes 4 really demand. 5 Finally, the agreements that result from the 6 negotiations will ensure that the Water Quality Control 7 Plan's objectives will be implemented whereas protracted 8 proceedings present a risk of the voluntary agreements 9 contained in the Bay-Delta Accord will be lost. 10 For these reasons the parties which I indicated at 11 the beginning of my statement support the draft hearing 12 schedule, which we talked about previously. We suggest an 13 additional workshop, as I mentioned, probably in the 14 May/June time frame. We believe that the hearing schedule, 15 and more importantly the strategy that it represents is 16 responsive to the concerns raised in the Federal 17 Government's letter, which was referenced by Patrick Wright 18 yesterday. We look forward to participating in the 19 discussions that Mr. Wright suggest. 20 As with other parties, we also had suggestions in 21 terms of the order of process, in the two-stage hearing 22 process. In the first stage we contemplate the four and -- 23 recommend the four items: The San Joaquin River Agreement, 24 Suisun Marsh, South Delta facilities, and finally those 25 agreements which have been -- have been or soon will be CAPITOL REPORTERS (916) 923-5447 471 1 completed including those in the East Bay MUD, Yuba County 2 Water Agency, the stipulation -- stipulated agreements 3 which the Department of Water Resources has mentioned 4 earlier and others as they may come to fruition. 5 Exhibits and testimony for the subjects would be 6 due in early June. The August hearing dates would be used 7 to address the settlements that are then ready for the 8 Board's consideration as well as some of the more 9 contentious issues that others have talked about earlier 10 today. The parties involved in the negotiations would not 11 stop trying to complete additional settlements between the 12 first and second hearing phases. We would, therefore, hope 13 to have the beginning of the second phase to consider new 14 settlements as they arise. 15 We believe that conducting the hearings in this 16 manner will improve the likelihood of successful completion 17 of a water rights decision sooner than later. And that the 18 most likely cause for a delay in a water rights decision is 19 conducting the hearings in one phase beginning in July, 20 which would not allow time for the agreements to proceed as 21 they have over the last several months, since the Board 22 made the change in delay in the commencement of the water 23 rights hearing for July. That ends this statement. I 24 have -- unless there's any questions about that, I will 25 proceed to make an additional statement on behalf of the CAPITOL REPORTERS (916) 923-5447 472 1 State Water Contractors. 2 HEARING OFFICER CAFFREY: Go ahead, Mr. Macaulay, 3 then we'll ask the Board Members if they have questions 4 after you finish both. 5 MR. MACAULAY: Thanks. There seems to be some 6 confusion, perhaps, in the mind of some people regarding 7 how the backstop of the settlement agreements, the 300,000 8 acre feet, and the manner of how all this fits into the 9 hearing process fits together in one piece. And I have 10 four points to make. 11 The first is that I agree with Dan Nomellini on 12 the desirability of a total solution. But from a practical 13 standpoint we just don't think that that is likely. I 14 think our door has been opened, and the door of many have 15 been open for the last two years and more to settlement 16 negotiations. We would like to see that all parties will 17 reach settlement negotiations prior to the commencement of 18 the hearings, but that isn't likely to be the case a 19 hundred percent. And we believe the Board needs to plan 20 accordingly. 21 The second point is part of the 300,000 acre feet 22 target for negotiated settlements is based on what we think 23 is possible. It's a practical notion as Cliff Schulz 24 outlined. The fact that money is coming from export water 25 users to help make the settlements work reflects the same CAPITOL REPORTERS (916) 923-5447 473 1 position: Let's get something going in the practical real 2 world. 3 The third point is: What's the Boards scope for 4 dealing with the nonsettling parties? From our perspective 5 should there be a substantial number of nonsettling parties 6 representing significant upstream diversions the Board is 7 not bound by our compromise number in terms of water 8 targets of 300,000 acre feet. Bear in mind that the 9 300,000 acre feet is a target, from our perspective, and 10 has that sentence built in. 11 Again, from our perspective that number is 12 something that we hope will move the negotiations along and 13 will save us, and the other parties with whom we are 14 negotiating, the time commitment and effort involved in 15 lengthy adversary hearings and the possibility of 16 subsequent litigation. So we wanted to speed things along 17 with what we believe is a practical number as a target and 18 some money to go with that. 19 A fourth point is there has been some confusion, I 20 believe, about the backstop, the 300,000 acre feet and who 21 the water goes to. Simply stated, as the Board is aware 22 right now the State and Federal Projects are voluntarily 23 meeting 100 percent of the burden. Ultimately, others will 24 contribute a portion of that burden either through 25 settlements, or Board actions. CAPITOL REPORTERS (916) 923-5447 474 1 In the case of settlements, the State and Federal 2 Projects will assume the obligation appropriately assigned 3 by this Board to the upstream settling parties in return 4 for water provided through the projects through the 5 separate settling agreements. This will free up water 6 which is now being used to voluntarily meet the standards 7 by the water projects which would otherwise go now to the 8 state and federal water contractors. And I hope that 9 statement clarifies the issue of the 300,000 and how that 10 fits into the backstop. 11 Thank you. 12 HEARING OFFICER CAFFREY: Thank you very much, 13 Mr. Macaulay. We appreciate your comments. I apologize to 14 the Board for my failing condition. I'm under a vent and I 15 think I'm getting Legionnaire's disease from the 16 circulatory system, closed system of this building. 17 Mr. Macaulay, I didn't mean to have you sit down 18 yet, because I didn't get a chance and check see if anybody 19 had questions. Nothing at this time. Thank you for your 20 comments. We appreciate it very much. 21 Tom Graff is not here. Kevin O'Brien? 22 Mr. O'Brien. 23 MR. O'BRIEN: Just very briefly, Mr. Chairman, we've 24 heard a lot today about CEQA concerns. And, unfortunately, 25 Mr. Del Piero had to leave. It seems to me that one thing CAPITOL REPORTERS (916) 923-5447 475 1 that the Board might want to consider here is the 2 possibility of convening some kind of a CEQA work group to 3 examine these CEQA compliance issues that are coming up as 4 these settlement agreements are developed. 5 Frankly, many of us have been so focused on these 6 settlement negotiations that we haven't had a chance at 7 this point, with the probable exception of you, to really 8 analyze thoroughly the CEQA issues. And, obviously, 9 there's also a NEPA aspect to this. To the extent that 10 you're going to ask the Bureau to sign on to these 11 agreements, I think it might be useful, and I don't 12 particularly want to do this in the context of another 13 workshop, but maybe to have -- to be in a work group 14 inviting anyone who's filed a Notice of Intent to appear 15 and maybe ask for some briefing in advance on the legal 16 issues. And hopefully we can make some progress on these 17 issues. And I would hope Mr. Del Piero could, perhaps, 18 attend that process. That's all I have. 19 HEARING OFFICER CAFFREY: That's an interesting 20 suggestion, Mr. O'Brien, and we will certainly take that 21 under submission. 22 THE COURT REPORTER: Mr. Caffrey, can we take a 23 break? 24 HEARING OFFICER CAFFREY: Yes. Let's take about a 25 five-minute break. CAPITOL REPORTERS (916) 923-5447 476 1 (Recess taken from 4:34 p.m. to 4:52 p.m.) 2 HEARING OFFICER CAFFREY: Please take our seats. We 3 still have about 35 cards to go. We'll stay until we're 4 finished. We completed with Mr. O'Brien. 5 Ralf Carter? Bill Baber? 6 MR. BABER: No comment. 7 HEARING OFFICER CAFFREY: Paul Simmons, not here. 8 Andrew Hitchings? 9 MR. HITCHINGS: No comment. 10 HEARING OFFICER CAFFREY: No comment. Patrick Wright 11 is not here. Greg Thomas not here. Department of Fish and 12 Game? Just as she went back and sat down. 13 MS. MURRAY: I know. 14 HEARING OFFICER CAFFREY: You were right the first 15 time. Welcome back, Ms. Murray. 16 MS. MURRAY: I will first give the Department's brief 17 comments on the other agreements that were added in this 18 afternoon. And the only one I will comment on is the Putah 19 Creek Agreement. And as to that agreement, the DWR stated 20 that it was based on a factual stipulation regarding the 21 hydrologic connection and the time of diversion by the 22 Solano County Water Agency. 23 The Department of Fish and Game's comment on the 24 Draft EIR did -- didn't say that we have some problems with 25 the statement in the Draft EIR that there is a lack of CAPITOL REPORTERS (916) 923-5447 477 1 hydrologic continuity, in that there's a lot of salmon 2 spawning this year. And it's a very good year for salmon 3 in Putah Creek. I was glad to hear Ms. Zolezzi say that 4 Solano County Water Agency intends to put on evidence that 5 there is a lack of a hydrologic connection at the time that 6 they are doing their diversion. But this is very much an 7 issue that needs to be looked at beyond the factual 8 stipulation between the parties. 9 Secondly, in regards to that agreement, unlike -- 10 at least, it seems to be some in some of the other 11 agreements where there is this backstop, I did not see in 12 the stipulation an expressed backstop and as I also did not 13 see in the Yuba Agreement an expressed backstop. And if 14 there are -- my concern is going to other settling parties 15 is that if you're using Yuba as the framework, or a cookie 16 cutter for other ones, I reread it last night and I don't 17 see an expressed backstop in that agreement. Maybe we can 18 talk about that later. If it is to be used, again, I think 19 that needs to be spelled out a little clearer. 20 Now to our closing statement, first off I'll 21 discuss phasing. The Department of Fish and Game believes 22 that these Bay-Delta hearings should be done in phases with 23 an extension of Water Right Order 95-6 through the end of 24 the first phase, and beyond that date to the extent that 25 issues covered in Water Right Order 95-6 are not addressed CAPITOL REPORTERS (916) 923-5447 478 1 in phase one, at the end of phase one a water rights 2 decision would be issued by the Board after compliance with 3 CEQA and CESA. 4 DFG recommends that phase one begin by addressing 5 the four existing agreements and any other agreements in 6 the notice -- March noticed workshop, and any other 7 agreements submitted at least 30 days before testimony for 8 phase one is due. This subsequent notice should be issued 9 by the Board and make copies of any of these additional 10 agreements available to all the parties, because the 11 parties really need to have adequate time to review any of 12 these additional agreements. 13 DFG also recommends that phase one contain a 14 package of issues involving the Delta and the San Joaquin 15 River as it relates to the Delta. This is not a 16 comprehensive list of San Joaquin River issues, but we 17 believe it is a significant biological grouping of the San 18 Joaquin River and Delta issues. 19 Therefore, in addition to the proposed settlement 20 agreements such as Vernalis Adaptive Management Plan, phase 21 one should also address issues mentioned by the various 22 representatives of the City of Stockton yesterday, such as 23 the method of achieving the 1995 Water Quality Control Plan 24 objectives for dissolved oxygen in the Delta, salinity 25 control measures in the San Joaquin River Basin, and CAPITOL REPORTERS (916) 923-5447 479 1 salinity objectives in the South Delta. 2 While it might make logical sense to first address 3 only the negotiated agreements, the grouping of those 4 agreements is not biologically linked. DFG believes it 5 makes biological sense to consider, in phase one, the San 6 Joaquin River issues beyond those covered in the San 7 Joaquin River Agreement. Again, those are the issues of 8 dissolved oxygen, salinity control measures in the San 9 Joaquin River, and salinity control in the South Delta. 10 Next I'll go on to our recommended criteria for 11 assessing the preferred alternative in any of these 12 upcoming proposed settlement agreements. And dearly enough 13 we have eleven. When I counted the Bureau's it's very 14 interesting we came up with the same number. 15 But we -- and they are, number one, that the 16 agreement be consistent with CESA, the California 17 Endangered Species Act; and that it avoid jeopardy, and 18 that it avoids or minimizes additional adverse impacts on 19 State-listed aquatic and terrestrial species; that it 20 preserve the baseline environmental protection afforded by 21 the 1995 Water Quality Control Plan; that it avoid or 22 minimizes increase in exports from the Delta above existing 23 conditions in February through June given the current 24 configuration of the Bay-Delta export system. 25 That it limit the impacts associated with CAPITOL REPORTERS (916) 923-5447 480 1 increased exports from the Delta in the November through 2 January period under adverse internal Delta flow 3 conditions; that it preserve or partially restores flow 4 patterns and salinity conditions that help improve the 5 ecological health of the estuary; provides a high level of 6 flow-related habitat benefits in the upstream tributaries; 7 that it balances unavoidable adverse impacts on reservoir 8 carryover storage among Central Valley reservoirs; that the 9 agreement works synergistically with other ecosystem 10 restoration in part CC as part of the activities, and 11 contribute to achieving the narrative objective of doubling 12 salmon -- the production of chinook salmon set forth in the 13 1995 Water Quality Control Plan. 14 That it avoid or minimize adverse impacts on 15 wildlife habitat provided by both privately and publicly 16 manage wetlands. And, again, this is to the woman who 17 mentioned -- we aren't saying much about waterfowl, that's 18 both publicly managed lands and private, too, is consistent 19 with the Bay-Delta program, or at least does not preclude 20 implementing the FERC CalFed alternative. And, lastly, 21 that it reduces the extent of adverse hydronomic effects in 22 the Central Delta from flow-control structure installation 23 and operation. 24 Lastly I just want to highlight one thing that 25 has -- that's mentioned in one of our criteria, which is CAPITOL REPORTERS (916) 923-5447 481 1 that it provides a high level of flow related habitat 2 benefits in the upstream tributaries. And I want to 3 highlight that these hearings focus only on conditions at 4 Vernalis, and do not address the issue of fishery 5 conditions in other areas such as the tributaries. There 6 is a relationship between the two. The fishery conditions 7 focused only at Vernalis do not ensure a healthy fishery, 8 or do not prevent further CESA or ESA listings. 9 Specifically, with the Yuba Agreement, DFG is very 10 concerned that by requiring Yuba County to contribute only 11 19,000 additional acre feet to meet the Bay-Delta 12 obligation this number will also be used by Yuba County and 13 possibly this Board to establish in-stream fish flows. As 14 we've heard today, the 19,000 acre feet is not based on 15 science and is not related to the necessary minimum 16 in-stream flows for the Yuba River. Despite the eloquent 17 picture painted by Mr. Lilly of the Yuba River fall-run 18 chinook salmon, there are also steelhead and spring-run 19 salmon in the Yuba River that are not faring quite as well. 20 DFG testified at the 1992 Yuba River Water Board hearing 21 that a minimum in-stream flow of 603,000 acre feet is 22 necessary. 23 The average unimpaired amount of flow in the Yuba 24 River is 2,333,000 acre feet. It -- and there's an 25 existing agreement between the Yuba County Water Agency and CAPITOL REPORTERS (916) 923-5447 482 1 DFG executed in 1965 that provides for 173,000 acre feet of 2 water for in-stream flow. Therefore, the difference 3 between what DFG recommended in the 1992 hearing and this 4 1965 agreement is around 430,000 acre feet as an increase 5 for in-stream flows. 6 And the concern is just that the delivery of this 7 19,000 acre feet, which is being proposed to help with 8 Bay-Delta standards, is not connected to the minimum 9 in-stream flow that is needed for the Yuba River, and that 10 that be clearly delineated and separated that that be not, 11 in fact, weight on a decision on the Yuba River in pending 12 thinking that the 19,000 that's going toward the Bay-Delta 13 is, in fact, doing a lot of good for the Yuba River 14 in-stream river. 15 We have issues on the delivery as we said in our 16 draft -- or in our comment letter to Yuba on the negative 17 declaration. The possible decrease inflows after June, 18 under some scenarios, could negatively affect juvenile 19 steelhead out-migration. So even with the 19,000 acre feet 20 we have some delivery concerns. 21 So just as Mr. Lilly asked you not to weight on 22 the 19,000 acre feet for some kind of a decision on the 23 true in-stream flow needs of the Yuba River, we also ask 24 you not to weight on a decision on the true in-stream flows 25 on the Yuba River thinking that this 19,000 acre feet is CAPITOL REPORTERS (916) 923-5447 483 1 panacea, or as even, in our mind, definitely helpful to the 2 salmon and/or steelhead and spring run as to when it could 3 be delivered. And that's really all of our comments today. 4 HEARING OFFICER CAFFREY: All right. Thank you very 5 much, Ms. Murray, appreciate your comments. Any questions 6 from the Board? Any from staff? Thank you very much, 7 appreciate your time and to all the other presenters from 8 the Department of Fish and Game over the last two days. 9 Alan Lilly? 10 MR. LILLY: Thank you, Mr. Caffrey, Alan Lilly of 11 Bartkiewicz, Kronick and Shanahan. I'm going to first make 12 some comments on behalf of one of our clients the Yolo 13 County Flood and Water Conservation District. We wanted to 14 follow-up on Mr. Sandino's presentation regarding the Cache 15 Creek Agreement. 16 I just want to emphasize that this really should 17 not be an area of dispute. There's no doubt that Cache 18 Creek, like Putah Creek, sometimes has hydraulic continuity 19 with the Delta. For example, when the Yolo bypass is full 20 of water and there's flood flows going on, there's 21 hydraulic continuity and that's never been disputed. The 22 important thing is that when it matters, when the Delta is 23 in balance and water is needed to implement the standards 24 there is not the hydraulic continuity and large amounts of 25 water could be released from Yolo's reservoirs on Cache CAPITOL REPORTERS (916) 923-5447 484 1 Creek and its tributaries, or bypasses of diversions. I 2 mean water simply would not get to the Delta and do any 3 good for implementing the standards. 4 This point was recognized by this Board in 5 Decision 1594 back in 1983. And, therefore, Term 91 was 6 not applied to any water rights on Cache Creek. During the 7 1992 Bay-Delta hearings, the District's engineer. 8 Mr. Frances Forcauley (phonetic) submitted substantial 9 evidence on this point. And the Board did follow that 10 evidence, which was not disputed in Draft D-1630. There 11 were other disputes with Draft D-1630, but this particular 12 point was never in controversy. And, of course, this State 13 Board's staff's Draft EIR for this proceeding also 14 recognized that. 15 So this really is an opportunity to narrow the 16 issues that will have to be resolved in a subsequent water 17 rights hearing on something that I don't believe there is 18 any significant dispute on. And, therefore, we agree with 19 Mr. Sandino and hope the Board will both consider and 20 approve the Cache Creek Agreement that he has described. 21 Just going forward briefly to the process, I'll 22 make these comments on behalf of both Yolo and the Yuba 23 County Water Agency. We, obviously, do support the phasing 24 proposal. I think both Mr. Sandino and Mr. Macaulay have 25 stated the proposal in some detail, and I won't go CAPITOL REPORTERS (916) 923-5447 485 1 forward -- I won't repeat that, but obviously I think it's 2 efficient for both the parties and the Board to go forward 3 that way. 4 We are a little concerned about the comment about 5 joint point of diversion. We think that really has to be 6 in a subsequent phase, because that's an area that will be 7 disputed. And, particularly, water right holders like Yuba 8 if we are not able to gain approval of our settlement we're 9 going to have to make an argument on that point, because 10 that could increase the issue of environmental impacts in 11 the Delta and the corresponding need for more water. And 12 that would need to be considered in a protracted water 13 rights hearings. Hopeful, we won't have to get to that 14 issue. 15 It's unfortunate that Mr. Del Piero has left, 16 because he did ask good questions about CEQA. And CEQA 17 needs to be taken seriously by this Board. Obviously, we 18 think that with some effort this Board and the staff could 19 make the necessary amendments, either amendments or 20 addendums within that to the Draft EIR, it has already been 21 circulated to address the settlements. And, frankly, 22 there's a good foundation in what's already been done to do 23 that. And I'm not belittling that, I think that would 24 require a significant amount of work. 25 But let me just say that's nothing compared to the CAPITOL REPORTERS (916) 923-5447 486 1 amount of effort that would be required to do a complete 2 EIR and a complete water rights decision in a nonphased 3 hearing. There's just no comparison. They're both work, 4 but the second one is a lot more work and years of 5 differences in its final process. So CEQA is important. 6 CEQA should be followed, but I think your staff has 7 demonstrated that they have the capability of doing that 8 and they should do that in this proceeding. 9 Final point, just now shifting over to just 10 comments for Yuba County Water Agency, I'm not going to get 11 too bogged down in the Yuba River issues that Ms. Murray 12 has referred to, steelhead and spring-run are other species 13 in the Yuba River. According to the Department of Fish and 14 Game's own Fisheries Management Plan, while there aren't 15 good data on steelhead because the collecting of data is 16 not as straight forward as for chinook salmon, their own 17 estimate was that the steelhead would have an increase by 18 factor of ten since New Bullards Bar Reservoir was built. 19 So, again, there has been significant increase, 20 largely due to the fact that New Bullards Bar Reservoir 21 increase the summer flows and reduce the summer 22 temperatures in the Lower Yuba River from what they had 23 been pre-river project. 24 Spring-run salmon, we also recognize there -- 25 frankly, Department of Fish and Game made some comments on CAPITOL REPORTERS (916) 923-5447 487 1 the initial study on that issue. And when Jones and Stokes 2 Associate, the Agency's consultant, tried to get the data 3 on what those were purportedly based on, the response was 4 that data was not yet ready for outside review. So they 5 can't have it both ways. If they're going to make 6 comments, they have to show us the data that they're 7 relying upon. And, frankly, in all the other cases Jones 8 and Stokes provided detailed comments responding to their 9 biological comments. The bottom line is: 19,000 acre feet 10 of more water coming down in the summer is going to 11 increase the flows and reduce the temperatures during 12 summer and that is going to have a benefit for the fish. 13 It's not going to -- the mitigation measures that the 14 Agency has adopted will avoid the adverse impacts from flow 15 fluctuations. 16 So we stand by our comment that this is a benefit. 17 We are not trying to say that the 19,000 is going to 18 resolve all of the in-stream flow issues in the Yuba River, 19 that's obviously a separate proceeding, as we have said 20 before, one that we still are trying to reach resolution 21 with the Department on. Hopefully, we will be able to do 22 so, but that is separate from Bay-Delta. So with that, 23 I'll be glad to answer any questions. 24 HEARING OFFICER CAFFREY: Anything for Mr. Lilly? 25 Thank you, sir. CAPITOL REPORTERS (916) 923-5447 488 1 MR. LILLY: Thank you. 2 HEARING OFFICER CAFFREY: Appreciate your time. 3 Steve Chedester? Not here. Roger Guinee? Not here. 4 Thomas Shephard? Not here. Reid Roberts? Michael Sexton? 5 MR. SEXTON: No further comment. 6 HEARING OFFICER CAFFREY: Cliff Schulz? Mr. Schulz 7 leave? He left. All right. Gary Bobker is not here. 8 Lowell Ploss? Not here. Dan Gallery. 9 MR. GALLERY: Just a brief comment, Mr. Chairman. 10 Mr. Nomellini in making his point that he thought it would 11 be a mistake to phase the hearings and instead have 12 everything at once, which seems to me would result in the 13 mother of all Water Board hearings, everything going at 14 once, I hypothesize that the Board might find that the East 15 Bay MUD agreement was acceptable, but that Woodbridge 16 would have to come up with something new and different and 17 more. 18 And we just wanted to respond that we at 19 Woodbridge really have to work with East Bay MUD on that 20 agreement. We have got to be flanged together on it. So 21 we don't want the Board to get the idea that there might be 22 any difference between us. We need to be together on that. 23 And we didn't feel that was a very good example in support 24 of his argument. 25 Thank you. CAPITOL REPORTERS (916) 923-5447 489 1 HEARING OFFICER CAFFREY: All right. Thank you very 2 much, Mr. Gallery. 3 Patrick Porgans is not here. Alex Hildebrand and 4 John Herrick are not here. 5 Dante Nomellini. 6 MR. NOMELLINI: Mr. Chairman, Members of the Board, 7 Dante John Nomellini on behalf of the Central Delta 8 parties. First of all for clarification, I'm not opposed 9 to phasing the hearings. What I objected to was any 10 segmented settlement of the water rights proceeding, I 11 don't see how you could approve a particular water rights 12 settlement separate and apart from the total package. 13 Now, in terms of rolling up our sleeves and going 14 to work on the hearing and the phasing, I have no objection 15 to taking on this San Joaquin River Agreement at the first 16 phase. But what I was telling you is that I think from a 17 legal standpoint you cannot segment the approvals. 18 HEARING OFFICER CAFFREY: Understand. 19 MR. NOMELLINI: And if you do I'd be very interested 20 in seeing how you make this interlocutory judgment, final 21 adoption of the environmental impact statement with regard 22 to it. And, of course, I would look forward to the 23 opportunity to getting an early review of some of the 24 issues pertaining to that. So I would be in favor, if you 25 could, render a separate legal opinion and judgment that we CAPITOL REPORTERS (916) 923-5447 490 1 would have an opportunity to review on the San Joaquin 2 River Agreement. I was cautioning you as to what my 3 judgment is on your inability to do that. 4 I think the San Joaquin River Agreement is a 5 perfect one to start with, because as I told you before, it 6 has the weasel wording in it that I think is critical as to 7 the Bureau's obligation. It also has the requirement that 8 you adopt an order enforcing the obligations of the Bureau 9 and the Department of Water Resources. And my comments 10 with regard to the sovereign immunity waivers and those 11 things are particularly pertinent there. 12 And we have some very strong outstanding issues on 13 the San Joaquin River. The San Joaquin River, of course, I 14 think is a disgrace the way it's been allowed to be 15 degraded and the Bureau has been thumbing its nose at the 16 problem. So that's ideal. 17 The Mokelumne River Agreement I don't think is 18 appropriate for an early resolution. I think you owe us a 19 decision in the other matter. How you tie those together? 20 You know, I don't know. I'm a little bit worried about -- 21 and it's okay, we can negotiate these agreements in the 22 hearing process, but you have agreements that haven't been 23 signed by all these parties that are involved. You've got 24 the Mokelumne Agreement that hasn't been approved by FERC. 25 You know, it's okay. It's one of those things -- and maybe CAPITOL REPORTERS (916) 923-5447 491 1 by getting into some of these things up front it will help 2 resolve enough of it that the "big" water rights proceeding 3 of all time, or whatever, that Nomellini wants, supposedly, 4 which I don't, but that it may be avoided. But you're 5 going to need the total settlement the way I saw it before 6 before you can avoid that. 7 My last comment is: I think the concern that 8 really is before us is the position of the Bureau of 9 Reclamation with regard to whether or not it will meet the 10 Accord requirements for a period after December 31st of 11 1998; and what kind of a hearing record do you need by that 12 date, assuming that for some reason the Bureau does not 13 agree to extend the Accord? 14 Do you need something further than your 95-6, 15 which we've been arguing about? But you hear these guys 16 come up and say it was a voluntarily thing on the part of 17 the Bureau to go ahead and meet that, and we simply 18 facilitated that -- you facilitated it, I used that 19 argument, too, that you guys just facilitated the Bureau's 20 wishes by doing it. Well, if you're free enough to turn 21 that around and bind the Bureau by extending it, then fine. 22 But I would be concerned at an early stage that 23 you face that question and the Bureau, of course, could 24 save us all a lot of trouble if they come up and belly up 25 to the bar and say, no, problem as long as you're starting CAPITOL REPORTERS (916) 923-5447 492 1 these hearings we agree we've tackled the San Joaquin River 2 Agreement, da-da-da and then you go on. But that would be 3 a concern that I would think would be before us. 4 You have a lot of these other issues that are 5 going to be jumping around. You're going to reopen D-990 6 and 1275, or have a request to do it which stimulates our 7 interest in seeking some kind of relief with regard to 8 curtailing the export pumping, especially during the time 9 that we have substantial violations of water rights already 10 proceeding, including deliveries of water outside the 11 permitted places of use. 12 So we may be eagerly standing alongside Baber when 13 he reopens, or tries to reopen 990 and 1275. No, I'm not 14 opposed to the phasing of the hearing. And the San Joaquin 15 River Agreement is a good one. And let's get started on 16 that one. Thank you. 17 HEARING OFFICER CAFFREY: Thank you very much, 18 Mr. Nomellini, appreciate your comments. Let's see Cynthia 19 Kochler is not here. Jean Cave? 20 MS.CAVE: I pass. 21 HEARING OFFICER CAFFREY: Thank you, ma'am. Richard 22 Denton? 23 MR. DENTON: Good afternoon, Mr. Caffrey and Members 24 of the Board. 25 HEARING OFFICER CAFFREY: Welcome. CAPITOL REPORTERS (916) 923-5447 493 1 MR. DENTON: My name is Richard Denton, Water 2 Resources Manager of the Contra Costa Water District. CCWD 3 has attended both days of the hearing -- of this workshop. 4 Legal Counsel Mr. Meddow (phonetic) was here yesterday, but 5 he was unable to be here today. 6 We are reviewing the agreements and we will be 7 providing you with our comments I guess by May 4th on those 8 agreements. We are encouraged by the progress that has 9 been made so far with the negotiations. And in reviewing 10 the settlement agreements we will be focusing particularly 11 on water quality impacts in the Delta. You heard a 12 presentation today, for example, from the Department of 13 Water Resources on the South Delta Barriers. We did submit 14 substantial comments on the interim South Delta Program, 15 Draft EIR/EIS which was released back in August of 1996. 16 We, again, want to reiterate that we do need to 17 meet the goals of the South Delta Program, but we need to 18 do that without redirecting impacts to other locations such 19 as the District's Rock Slough and Old River intakes. And 20 we have discussed with DWR different mitigation measures 21 that may be an offset on any impacts on the District's 22 water quality; for instance, reductions in local drainage 23 from locations close to and around intakes. This not only 24 benefits the District, but it also benefits the projects 25 because it makes it easier for them, for instance, to CAPITOL REPORTERS (916) 923-5447 494 1 comply with the Rock Slough standards and also would be 2 consistent with the goals of CalFed in terms of the Water 3 Quality Control Plan. 4 Thank you very much. 5 HEARING OFFICER CAFFREY: Thank you, Mr. Denton, 6 appreciate your being here and your comments. Martha 7 Lennihan representing the City of Davis. Good afternoon 8 and welcome. 9 MS. LENNIHAN: Thank you, Mr. Chair. I'm Martha 10 Lennihan and I'm here to make two comments to you this 11 afternoon. The first one I'm going to make on behalf of 12 the City of Davis with regard to the Putah Creek Settlement 13 as described by the Department of Resources's earlier and 14 commented on by Jeanni Zolezzi. 15 As you know there is a quite an extensive 16 litigation history which is not yet resolved regarding 17 in-stream flow. We commented quite extensively on your 18 Draft EIR. The facts supposedly contained in that EIR are 19 wholly incorrect with regard to the hydraulic connection 20 between Putah Creek and the Delta. 21 Now we learned, frankly by rumor yesterday, that 22 there is a stipulation which we've not yet seen that the -- 23 based on some set of facts which -- of which we are 24 unaware, and so we would like to raise a couple of 25 questions for you and request that you exercise your own CAPITOL REPORTERS (916) 923-5447 495 1 independent judgment when looking at this since, frankly, 2 we haven't even had a chance to look at it. 3 We do not object to parties settling out. Parties 4 have a right to do that and that's fine but, again, the 5 Board's Draft EIR misstates the facts regarding Putah Creek 6 connectiveness. I don't know what the factual basis is for 7 some supposed stipulation. It was not made public, at 8 least, to my knowledge in advance of this workshop. So 9 therefore, there's no way for us to provide you with a 10 meaningful comment on it. 11 So I would endorse that you look at this 12 independently. I'm sure your staff will take a serious 13 look at it and in so doing consider a couple of questions. 14 One question is: What is the time of exercise of right, 15 which I understand from the Department's testimony earlier 16 is the criterion upon which the stipulation is apparently 17 based? I'm not sure what that means and I'm not sure what 18 its relevance is to the issue. 19 The second question is: Whether time of 20 diversion, if indeed that is what is intended as Ms. Murray 21 implied, whether that is the relevant time period that 22 you're looking at to make a decision as to whether a party 23 has some sort of obligation in this Bay-Delta proceeding. 24 There may well be other questions, I'm not able to raise 25 them at this point because I haven't even seen the document CAPITOL REPORTERS (916) 923-5447 496 1 yet. 2 The second item that I want to comment on is the 3 overall staging and scope, the procedural aspects of how 4 you go forward. And in this respect I am speaking on 5 behalf of the Butte Sink Waterfowl Association, which is a 6 group of landowners who maintain an enormous contiguous 7 block of wetlands acreage in the Sacramento Valley; and 8 also on behalf of the Stanford-Vina Ranch Irrigation 9 Company, which is a very small diverter off of Deer Creek. 10 We do support this phasing. These are, relatively 11 speaking, small players compared to the folks that you've 12 had before you today and compared to the folks that you 13 usually hear from, at least the most. And so the resource 14 burden on small parties, and I'm here on behalf of only two 15 of them, is very significant. And the staging is really 16 important to them both from the common sense of not wasting 17 resources, but also because, frankly, it's just a huge 18 burden. 19 In your staging and the number of proposals that 20 have been made there are a number of options and we don't 21 have a comment on that. But in your staging, please, do 22 consider calendering things so that written testimony and 23 evidence does not have to be submitted until the prior 24 stage is complete in some respect. Now there's a big issue 25 of the debate over what "complete" means, but that's not CAPITOL REPORTERS (916) 923-5447 497 1 the concern I'm raising here today. 2 What I ask you to not do, by way of example, is 3 ask for all parties written testimony and exhibits to be 4 submitted in advance of phase one, which testimony and 5 exhibits would apply to phases two and three should those 6 exist. You can see the burden problem. Second point, it 7 appears that if there are two phases or more there will 8 probably be an interim decision making of some sort to 9 decide on the scope and, indeed, the necessity for 10 subsequent phases. 11 And I ask you to consider how you're going to do 12 that, you may not need those subsequent phases, it would be 13 that we would be so lucky. And in so doing, that may also 14 provide an opportunity for this Board to reduce the burden 15 on the public and the parties subject to the notice in 16 itself. The final point that I want to raise for your 17 consideration today is that there may be, as Ms. Cave 18 testified earlier, some opportunity to reduce the number of 19 parties who are required to participate in this proceeding. 20 Let me give you an example. 21 The Stanford-Vina Ranch Irrigation Company was 22 included in your notice because of errors that were made on 23 its original statement of water diversion and use. Those 24 errors stemmed, possibly, from inadvertent errors on the 25 part of the irrigators not understanding the form. They CAPITOL REPORTERS (916) 923-5447 498 1 also stem from errors made by the Water Board staff in 2 entering the data into the database. This is all 3 documented in our comments on the Draft EIR. 4 They do not qualify for inclusions in the Draft 5 EIR, but they remain on the notice. Can you not come up 6 with a mechanism to relieve them from this burden? I have 7 attempted to do so, but because the ex-party rules have I 8 prevented me from having that conversation. And I do 9 appreciate this workshop as an opportunity to ask for your 10 serious consideration. 11 The second type of party that might fall within 12 that type of category would be those that are either 13 diverting or receiving water for things such as wetlands 14 maintenance. Ms. Cave mentioned earlier her duck club 15 earlier, I'm not familiar with it, but I will tell you that 16 the water that is in part diverted and in part flow through 17 for the Butte Sink Waterfowl Association supports some of 18 the most valuable wetlands in the entire Sacramento Valley. 19 And what the Board has told us by the Notice is 20 that you want us to have a portion of that taken away. And 21 I -- we will go through the hearing process if you require 22 us to, but I would suggest that if there were some interim 23 mechanism to take a second look at that, you might be able 24 to alleviate all of us of considerable and frankly 25 unnecessary expense. CAPITOL REPORTERS (916) 923-5447 499 1 Thank you. 2 HEARING OFFICER CAFFREY: Thank you very much, 3 Ms. Lennihan. Questions from the Board Members, or the 4 staff for Ms. Lennihan? 5 MS. LENNIHAN: Thank you. 6 HEARING OFFICER CAFFREY: All right, thank you very 7 much. I'm glad you had the opportunity to express your 8 concern without the burden of ex-party communication. 9 MS. LENNIHAN: Thank you. 10 HEARING OFFICER CAFFREY: We will look into what 11 you've asked us to. I actually should call on two other 12 cards that were presenters, Kamyar Guivetchi? 13 MR. GUIVETCHI: No comment. 14 HEARING OFFICER CAFFREY: All right, sir. And Fred 15 Etheridge? 16 MR. ETHERIDGE: No comment. 17 HEARING OFFICER CAFFREY: All right, sir. That 18 completes all of the cards and all of the subjects for 19 today. I want to particularly thank those of you who stuck 20 it out to the bitter end. This for me, and I'm pretty sure 21 that I speak for the other Board Members because they have 22 all commented to me that this has been a very enlightening 23 two days, a lot of important information. Where we go with 24 it, obviously, remains to be seen. There's obvious 25 differences. CAPITOL REPORTERS (916) 923-5447 500 1 Let me just as a closing say that the Board will 2 give parties, as I mentioned earlier until 5:00 p.m. on 3 May 4th to deliver any additional written comments in 4 connection with this workshop. Please, submit those to the 5 staff. Any written comments should be delivered to 6 Ms. Whitney, or her designated staff to ensure that the 7 comments are properly logged in and receive immediate 8 attention. 9 Thank you all for participating in these 10 proceeding. We've gained valuable insights and we will 11 consider all that you have discussed in this workshop and 12 presented in this workshop. As I stated at the beginning 13 of this workshop. We will soon issue a revised hearing 14 notice for the Bay-Delta Water Rights Hearing. Among other 15 things, the Notice will explain the order in which we will 16 proceed during the hearing including how we will proceed to 17 take evidence on the agreements that were presented during 18 this workshop. 19 So you will be hearing from us soon. And, again, 20 we thank you all very much. Let me just make sure there 21 isn't any closing comments from our Board Members. 22 MEMBER FORSTER: Yeah. 23 HEARING OFFICER CAFFREY: Ms. Forster. 24 MEMBER FORSTER: I just wanted to say even though the 25 Chairman is trying to speak for all of us, I'm going to CAPITOL REPORTERS (916) 923-5447 501 1 give you my own appreciation. I thought the way that you 2 organized the information that we got was very 3 understandable and really an outstanding work of the effort 4 and I am very impressed. 5 HEARING OFFICER CAFFREY: Thank you, Ms. Forster. 6 Ms. Whitney, you were going to make an 7 announcement. 8 MR. WRIGHT: Housekeeping, if you brought handouts to 9 distribute to the parties and you didn't bring a sufficient 10 number that everybody got one, there's been sign-up sheets 11 posted at the back for parties to request copies of your 12 handouts. Please pick up the sign-up sheet and make sure 13 that you send the requested handouts to those particular 14 parties. And for the people who have already left, we're 15 going to mail them to them, but if you're here please pick 16 it up before you leave. 17 HEARING OFFICER CAFFREY: Mr. Pettit, anything else? 18 MR. PETTIT: Mr. Nomellini. 19 MR. NOMELLINI: I think -- Michael Jackson -- 20 HEARING OFFICER CAFFREY: Wait a minute, folks. 21 Mr. Nomellini is entering something into the record here. 22 MR. NOMELLINI: Michael Jackson made the point, and I 23 think you stated it earlier that everyone should copy all 24 the parties who have filed a Notice of Intent that are on 25 that mailing list already. And I thought you had indicated CAPITOL REPORTERS (916) 923-5447 502 1 that. 2 HEARING OFFICER CAFFREY: That's true. 3 MR. NOMELLINI: And I didn't want that to slip by and 4 it wasn't mentioned at the end, but I think that's a good 5 way to save a lot of trouble for your staff in us trying to 6 inspect records. From this point forward if everybody 7 copies everybody else -- 8 HEARING OFFICER CAFFREY: That's a good point. Thank 9 you for reminding, Mr. Nomellini. When you communicate in 10 writing with the Board, please make sure you provide all 11 the parties copies. Thank you. We appreciate your 12 attendance. 13 (The proceedings concluded at 6:05 p.m.) 14 ---oOo--- 15 16 17 18 19 20 21 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 503 1 REPORTER'S_CERTIFICATE __________ ___________ 2 3 STATE OF CALIFORNIA ) ) ss. 4 COUNTY OF SACRAMENTO ) 5 I, MARY R. GALLAGHER, certify that I was the 6 Official Court Reporter for the proceedings named herein, 7 and that as such reporter I reported in verbatim shorthand 8 writing those proceedings; that I thereafter caused my 9 shorthand writing to be reduced to typewriting, and the 10 pages numbered 238 through 504 herein constitute a 11 complete, true and correct record of the proceedings. 12 IN WITNESS WHEREOF, I have subscribed this 13 certificate at Sacramento, California, on this 6th day of 14 May, 1998. 15 16 ________________________________ MARY R. GALLAGHER, CSR #10749 17 18 19 20 21 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 504