STATE WATER RESOURCES CONTROL BOARD PUBLIC HEARING 1998 BAY-DELTA WATER RIGHTS HEARING PHASE VIII HELD AT 901 P STREET SACRAMENTO, CALIFORNIA WEDNESDAY, APRIL 12, 2000 9:00 A.M. Reported by: MARY GALLAGHER, CSR #10749 CAPITOL REPORTERS (916) 923-5447 1 APPEARANCES ---oOo--- 2 3 BOARD MEMBERS: 4 JOHN W. BROWN, COHEARING OFFICER MARY JANE FORSTER 5 6 STAFF MEMBERS: 7 WALTER PETTIT - Executive Director JULIE CHAN - Supervising Engineer 8 NICK WILCOX - Chief Bay-Delta Unit 9 COUNSEL: 10 BARBARA LEIDIGH - Senior Staff Counsel 11 12 ---oOo--- 13 14 15 16 17 18 19 20 21 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 16913 1 REPRESENTATIVES 2 PRINCETON CODORA GLENN IRRIGATION DISTRICT, et al. 3 FROST, KRUP & ATLAS 4 134 West Sycamore STreet Willows, California 95988 5 BY: J. MARK ATLAS, ESQ. 6 JOINT WATER DISTRICTS: 7 MINASIAN, SPRUANCE, BABER, MEITH, SOARES & SEXTON P.O. Box 1679 8 Oroville, California 95965 BY: WILLIAM H. BABER, III, ESQ. 9 CALIFORNIA SPORTFISHING PROTECTION ALLIANCE: 10 ROBERT J. BAIOCCHI 11 P.O. Box 357 Quincy, California 95971 12 BELLA VISTA WATER DISTRICT: 13 BRUCE L. BELTON, ESQ. 14 2525 Park Marina Drive, Suite 102 Redding, California 96001 15 WESTLANDS WATER DISTRICT: 16 KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD 17 400 Capitol Mall, 27th Floor Sacramento, California 95814 18 BY: THOMAS W. BIRMINGHAM, ESQ. JOHN RUBIN, ESQ. 19 THE BAY INSTITUTE OF SAN FRANCISCO: 20 GRAY BOBKER 21 55 Shaver Street, Suite 330 San Rafael, California 94901 22 CITY OF ANTIOCH, et al.: 23 FREDERICK BOLD, JR., ESQ. 24 1201 California Street, Suite 1303 San Francisco, California 94109 25 CAPITOL REPORTERS (916) 923-5447 16914 1 REPRESENTATIVES 2 LEAGUE OF WOMEN VOTERS: 3 ROBERTA BORGONOVO 4 2480 Union Street San Francisco, California 94123 5 UNITED STATES DEPARTMENT OF THE INTERIOR: 6 OFFICE OF THE SOLICITOR 7 2800 Cottage Way, Roon E1712 Sacramento, California 95825 8 BY: ALF W. BRANDT, ESQ. JAMES TURNER, ESQ. 9 CALIFORNIA URBAN WATER AGENCIES: 10 BYRON M. BUCK 11 455 Capitol Mall, Suite 705 Sacramento, California 95814 12 RANCHO MURIETA COMMUNITY SERVICES DISTRICT: 13 MCDONOUGH, HOLLAND & ALLEN 14 555 Capitol Mall, 9th Floor Sacramento, California 95814 15 BY: VIRGINIA A. CAHILL, ESQ. 16 CALIFORNIA DEPARTMENT OF FISH AND GAME: 17 OFFICE OF THE ATTORNEY GENERAL 1300 I Street, Suite 1101 18 Sacramento, California 95814 BY: MATTHEW CAMPBELL, ESQ. 19 NATURAL RESOURCES DEFENSE COUNCIL: 20 HAMILTON CANDEE, ESQ. 21 71 Stevenson Street San Francisco, California 94105 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 16915 1 REPRESENTATIVES 2 ARVIN-EDISON WATER STORAGE DISTRICT, et al.: 3 DOOLEY HERR & WILLIAMS 4 3500 West Mineral King Avenue, Suite C Visalia, California 93191 5 BY: DANIEL M. DOOLEY, ESQ. 6 SACRAMENTO MUNICIPAL UTILITY DISTRICT: 7 LESLIE A. DUNSWORTH, ESQ. 6201 S Street 8 Sacramento, California 95817 9 SOUTH SAN JOAQUIN IRRIGATION DISTRICT, et al.: 10 BRAY, GEIGER, RUDQUIST & NUSS 311 East Main Street, 4th Floor 11 Stockton, California 95202 BY: STEVEN P. EMRICK, ESQ. 12 EAST BAY MUNICIPAL UTILITY DISTRICT: 13 EBMUD OFFICE OF GENERAL COUNSEL 14 375 Eleventh Street Oakland, California 94623 15 BY: FRED ETHERIDGE, ESQ. 16 GOLDEN GATE AUDUBON SOCIETY: 17 ARTHUR FEINSTEIN 2530 San Pablo Avenue, Suite G 18 Berkeley, California 94702 19 CONAWAY CONSERVANCY GROUP: 20 UREMOVIC & FELGER P.O. Box 5654 21 Fresno, California 93755 BY: WARREN P. FELGER, ESQ. 22 THOMES CREEK WATER ASSOCIATION: 23 THOMES CREEK WATERSHED ASSOCIATION 24 P.O. Box 2365 Flournoy, California 96029 25 BY: LOIS FLYNNE CAPITOL REPORTERS (916) 923-5447 16916 1 REPRESENTATIVES 2 COURT APPOINTED REPS OF WESTLANDS WD AREA 1, et al.: 3 LAW OFFICES OF SMILAND & KHACHIGIAN 4 601 West Fifth Street, Seventh Floor Los Angeles, California 90075 5 BY: CHRISTOPHER G. FOSTER, ESQ. 6 CITY AND COUNTY OF SAN FRANCISCO: 7 OFFICE OF THE CITY ATTORNEY 1390 Market Street, Sixth Floor 8 San Francisco, California 94102 BY: DONN W. FURMAN, ESQ. 9 CAMP FAR WEST IRRIGATION DISTRICT, et al.: 10 DANIEL F. GALLERY, ESQ. 11 926 J Street, Suite 505 Sacramento, California 95814 12 BOSTON RANCH COMPANY, et al.: 13 J.B. BOSWELL COMPANY 14 101 West Walnut Street Pasadena, California 91103 15 BY: EDWARD G. GIERMANN 16 SAN JOAQUIN RIVER GROUP AUTHORITY, et al.: 17 GRIFFIN, MASUDA & GODWIN 517 East Olive Street 18 Turlock, California 95381 BY: ARTHUR F. GODWIN, ESQ. 19 NORTHERN CALIFORNIA WATER ASSOCIATION: 20 RICHARD GOLB 21 455 Capitol Mall, Suite 335 Sacramento, California 95814 22 PLACER COUNTY WATER AGENCY, et al.: 23 KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD 24 400 Capitol Mall, 27th Floor Sacramento, California 95814 25 BY: JANET GOLDSMITH, ESQ. CAPITOL REPORTERS (916) 923-5447 16917 1 REPRESENTATIVES 2 ENVIRONMENTAL DEFENSE FUND: 3 DANIEL SUYEYASU, ESQ. 4 and THOMAS J. GRAFF, ESQ. 5 5655 College Avenue, Suite 304 Oakland, California 94618 6 CALAVERAS COUNTY WATER DISTRICT: 7 SIMON GRANVILLE 8 P.O. Box 846 San Andreas, California 95249 9 CHOWCHILLA WATER DISTRICT, et al.: 10 GREEN, GREEN & RIGBY 11 P.O. Box 1019 Madera, California 93639 12 BY: DENSLOW GREEN, ESQ. 13 CALIFORNIA FARM BUREAU FEDERATION: 14 DAVID J. GUY, ESQ. 2300 River Plaza Drive 15 Sacramento, California 95833 16 SANTA CLARA VALLEY WATER DISTRICT: 17 MORRISON & FORESTER 755 Page Mill Road 18 Palo Alto, California 94303 BY: KEVIN T. HAROFF, ESQ. 19 CITY OF SHASTA LAKE: 20 ALAN N. HARVEY 21 P.O. Box 777 Shasta Lake, California 96019 22 COUNTY OF STANISLAUS: 23 MICHAEL G. HEATON, ESQ. 24 926 J Street Sacramento, California 95814 25 CAPITOL REPORTERS (916) 923-5447 16918 1 REPRESENTATIVES 2 GORRILL LAND COMPANY: 3 GORRILL LAND COMPANY 4 P.O. Box 427 Durham, California 95938 5 BY: DON HEFFREN 6 SOUTH DELTA WATER AGENCY: 7 JOHN HERRICK, ESQ. 3031 West March Lane, Suite 332 East 8 Stockton, California 95267 9 COUNTY OF GLENN: 10 NORMAN Y. HERRING 525 West Sycamore Street 11 Willows, California 95988 12 REGIONAL COUNCIL OF RURAL COUNTIES: 13 MICHAEL B. JACKSON 1020 Twelfth Street, Suite 400 14 Sacramento, California 95814 15 DEER CREEK WATERSHED CONSERVANCY: 16 JULIE KELLY P.O. Box 307 17 Vina, California 96092 18 DELTA TRIBUTARY AGENCIES COMMITTEE: 19 MODESTO IRRIGATION DISTRICT P.O. Box 4060 20 Modesto, California 95352 BY: BILL KETSCHER 21 SAVE THE SAN FRANCISCO BAY ASSOCIATION: 22 SAVE THE BAY 23 1736 Franklin Street Oakland, California 94612 24 BY: CYNTHIA L. KOEHLER, ESQ. 25 CAPITOL REPORTERS (916) 923-5447 16919 1 REPRESENTATIVES 2 BATTLE CREEK WATERSHED LANDOWNERS: 3 BATTLE CREEK WATERSHED CONSERVANCY 4 P.O. Box 606 Manton, California 96059 5 BUTTE SINK WATERFOWL ASSOCIATION, et al.: 6 MARTHA H. LENNIHAN, ESQ. 7 455 Capitol Mall, Suite 300 Sacramento, California 95814 8 CITY OF YUBA CITY: 9 WILLIAM P. LEWIS 10 1201 Civic Center Drive Yuba City, California 95993 11 BROWNS VALLEY IRRIGTAION DISTRICT, et al.: 12 BARTKIEWICZ, KRONICK & SHANAHAN 13 1011 22nd Street, Suite 100 Sacramento, California 95816 14 BY: ALAN B. LILLY, ESQ. 15 CONTRA COSTA WATER DISTRICT: 16 BOLD, POLISNER, MADDOW, NELSON & JUDSON 500 Ygnacio Valley Road, Suite 325 17 Walnut Creek, California 94596 BY: ROBERT B. MADDOW, ESQ. 18 GRASSLAND WATER DISTRICT: 19 DON MARCIOCHI 20 22759 South Mercey Springs Road Los Banos, California 93635 21 SAN LUIS CANAL COMPANY: 22 FLANAGAN, MASON, ROBBINS & GNASS 23 3351 North M Street, Suite 100 Merced, California 95344 24 BY: MIICHAEL L. MASON, ESQ. 25 CAPITOL REPORTERS (916) 923-5447 16920 1 REPRESENTATIVES 2 STONY CREEK BUSINESS AND LAND OWNERS COALITION: 3 R.W. MCCOMAS 4 4150 County Road K Orland, California 95963 5 TRI-DAM POWER AUTHORITY: 6 O'LAUGHLIN & PARIS 7 870 Manzanita Court, Suite B Chico, California 95926 8 BY: TIM O'LAUGHLIN, ESQ. 9 BRAY, GEIGER, RUDQUIST & NUSS 311 East Main Street, 4th Floor 10 Stockton, California 95202 BY: STEVEN P. EMRICK, ESQ. 11 DELANO-EARLIMART IRRIGATION DISTRICT, et al.: 12 MINASIAN, SPRUANCE, BABER, MEITH, SOARES & SEXTON 13 P.O. Box 1679 Oroville, California 95965 14 BY: JEFFREY A. MEITH, ESQ. 15 HUMANE FARMING ASSOCIATION: 16 BRADLEY S. MILLER. 1550 California Street, Suite 6 17 San Francisco, California 94109 18 CORDUA IRRIGATION DISTRICT, et al.: 19 MINASIAN, SPRUANCE, BABER, MEITH, SOARES & SEXTON P.O. Box 1679 20 Oroville, California 95965 BY: PAUL R. MINASIAN, ESQ. 21 EL DORADO COUNTY WATER AGENCY: 22 DE CUIR & SOMACH 23 400 Capitol Mall, Suite 1900 Sacramento, California 95814 24 BY: DONALD B. MOONEY, ESQ. 25 CAPITOL REPORTERS (916) 923-5447 16921 1 REPRESENTATIVES 2 GLENN COUNTY FARM BUREAU: 3 STEVE MORA 4 501 Walker Street Orland, California 95963 5 MODESTO IRRIGATION DISTRICT: 6 JOEL MOSKOWITZ 7 P.O. Box 4060 Modesto, California 95352 8 PACIFIC GAS & ELECTRIC: 9 RICHARD H. MOSS, ESQ. 10 P.O. Box 7442 San Francisco, California 94120 11 CENTRAL DELTA WATER AGENCY, et al.: 12 NOMELLINI, GRILLI & MCDANIEL 13 P.O. Box 1461 Stockton, California 95201 14 BY: DANTE JOHN NOMELLINI, ESQ. and 15 DANTE JOHN NOMELLINI, JR., ESQ. 16 TULARE LAKE BASIN WATER STORAGE UNIT: 17 MICHAEL NORDSTROM 1100 Whitney Avenue 18 Corcoran, California 93212 19 AKIN RANCH, et al.: 20 DOWNEY, BRAND, SEYMOUR & ROHWER 555 Capitol Mall, 10th Floor 21 Sacramento, California 95814 BY: KEVIN M. O'BRIEN, ESQ. 22 OAKDALE IRRIGATION DISTRICT: 23 O'LAUGHLIN & PARIS 24 870 Manzanita Court, Suite B Chico, California 95926 25 BY: TIM O'LAUGHLIN, ESQ. CAPITOL REPORTERS (916) 923-5447 16922 1 REPRESENTATIVES 2 SIERRA CLUB: 3 JENNA OLSEN 4 85 Second Street, 2nd Floor San Francisco, California 94105 5 YOLO COUNTY BOARD OF SUPERVISORS: 6 LYNNEL POLLOCK 7 625 Court Street Woodland, California 95695 8 PATRICK PORGENS & ASSOCIATES: 9 PATRICK PORGENS 10 P.O. Box 60940 Sacramento, California 95860 11 BROADVIEW WATER DISTRICT, et al.: 12 DIANE RATHMANN 13 P.O. Box 156 Dos Palos, California 93620 14 FRIENDS OF THE RIVER: 15 BETSY REIFSNIDER 16 128 J Street, 2nd Floor Sacramento, California 95814 17 MERCED IRRIGATION DISTRICT: 18 FLANAGAN, MASON, ROBBINS & GNASS 19 P.O. Box 2067 Merced, California 95344 20 BY: KENNETH M. ROBBINS, ESQ. 21 CENTRAL SAN JOAQUIN WATER CONSERVATION DISTRICT: 22 REID W. ROBERTS, ESQ. 311 East Main Street, Suite 202 23 Stockton, California 95202 24 25 CAPITOL REPORTERS (916) 923-5447 16923 1 REPRESENTATIVES 2 METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA: 3 JAMES F. ROBERTS 4 P.O. Box 54153 Los Angeles, California 90054 5 SACRAMENTO AREA WATER FORUM: 6 CITY OF SACRAMENTO 7 980 9th Street, 10th Floor Sacramento, California 95814 8 BY: JOSEPH ROBINSON, ESQ. 9 TUOLUMNE RIVER PRESERVATION TRUST: 10 NATURAL HERITAGE INSTITUTE 114 Sansome Street, Suite 1200 11 San Francisco, California 94194 BY: RICHARD ROOS-COLLINS, ESQ. 12 CALIFORNIA DEPARTMENT OF WATER RESOURCES: 13 DAVID A. SANDINO, ESQ. 14 CATHY CROTHERS, ESQ. P.O. Box 942836 15 Sacramento, California 94236 16 FRIANT WATER USERS AUTHORITY: 17 GARY W. SAWYERS, ESQ. 575 East Alluvial, Suite 101 18 Fresno, California 93720 19 KERN COUNTY WATER AGENCY: 20 KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD 400 Captiol Mall, 27th Floor 21 Sacramento, California 95814 BY: CLIFFORD W. SCHULZ, ESQ. 22 SAN JOAQUIN RIVER EXCHANGE CONTRACTORS: 23 MINASIAN, SPRUANCE, BABER, MEITH, SOARES & SEXTON 24 P.O. Box 1679 Oroville, California 95965 25 BY: MICHAEL V. SEXTON, ESQ. CAPITOL REPORTERS (916) 923-5447 16924 1 REPRESENTATIVES 2 SAN JOAQUIN COUNTY: 3 NEUMILLER & BEARDSLEE 4 P.O. Box 20 Stockton, California 95203 5 BY: THOMAS J. SHEPHARD, SR., ESQ. 6 CITY OF STOCKTON: 7 DE CUIR & SOMACH 400 Capitol Mall, Suite 1900 8 Sacramento, California 95814 BY: PAUL S. SIMMONS, ESQ. 9 ORLAND UNIT WATER USERS' ASSOCIATION: 10 MINASIAN, SPRUANCE, BABER, MEITH, SOARES & SEXTON 11 P.O. Box 1679 Oroville, California 95965 12 BY: M. ANTHONY SOARES, ESQ. 13 GLENN-COLUSA IRRIGATION DISTRICT: 14 DE CUIR & SOMACH 400 Capitol Mall, Suite 1900 15 Sacramento, California 95814 BY: ANDREW M. HITCHINGS, ESQ. 16 NORTH SAN JOAQUIN WATER CONSERVATION DISTRICT: 17 JAMES F. SORENSEN CONSULTING CIVIL ENGINEER, INC.: 18 209 South Locust Street Visalia, California 93279 19 BY: JAMES F. SORENSEN 20 PARADISE IRRIGATION DISTRICT: 21 MINASIAN, SPRUANCE, BABER, MEITH, SOARES & SEXTON P.O. Box 1679 22 Oroville, California 95965 BY: WILLIAM H. SPRUANCE, ESQ. 23 24 25 CAPITOL REPORTERS (916) 923-5447 16925 1 REPRESENTATIVES 2 COUNTY OF COLUSA: 3 DONALD F. STANTON, ESQ. 4 1213 Market Street Colusa, California 95932 5 COUNTY OF TRINITY: 6 COUNTY OF TRINITY - NATURAL RESOURCES 7 P.O. Box 156 Hayfork, California 96041 8 BY: TOM STOKELY 9 CITY OF REDDING: 10 JEFFERY J. SWANSON, ESQ. 2515 Park Marina Drive, Suite 102 11 Redding, California 96001 12 TULARE IRRIGATION DISTRICT: 13 TEHEMA COUNTY RESOURCE CONSERVATION DISTRICT 2 Sutter Street, Suite D 14 Red Bluff, California 96080 BY: ERNEST E. WHITE 15 STATE WATER CONTRACTORS: 16 BEST BEST & KREIGER 17 P.O. Box 1028 Riverside, California 92502 18 BY: ERIC GARNER, ESQ. 19 COUTNY OF TEHEMA, et al.: 20 COUNTY OF TEHEMA BOARD OF SUPERVISORS P.O. Box 250 21 Red Bluff, California 96080 BY: CHARLES H. WILLARD 22 MOUNTAIN COUNTIES WATER RESOURCES ASSOCIATION: 23 CHRISTOPHER D. WILLIAMS 24 P.O. Box 667 San Andreas, California 95249 25 CAPITOL REPORTERS (916) 923-5447 16926 1 REPRESENTATIVES 2 JACKSON VALLEY IRRIGATION DISTRICT: 3 HENRY WILLY 4 6755 Lake Amador Drive Ione, California 95640 5 SOLANO COUNTY WATER AGENCY, et al.: 6 HERUM, CRABTREE, DYER, ZOLEZZI & TERPSTRA 7 2291 West March Lane, S.B. 100 Stockton, California 95207 8 BY: JEANNE M. ZOLEZZI, ESQ. 9 WESTLANDS ENCROACHMENT AND EXPANSION LANDOWNERS: 10 BAKER, MANOCK & JENSEN 5260 North Palm Avenue 11 Fresno, California 93704 BY: CHRISTOPHER L. CAMPBELL, ESQ. 12 SAN LUIS WATER DISTRICT: 13 LINNEMAN, BURGES, TELLES, VAN ATTA 14 1820 Marguerite Street Dos Palos, California 93620 15 BY: THOMAS J. KEENE, ESQ. 16 17 ---oOo--- 18 19 20 21 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 16927 1 I N D E X 2 ---oOo--- 3 4 PAGE 5 OPENING OF HEARING 16929 6 END OF PROCEEDINGS 16985 7 REBUTTAL TESTIMONY OF WESTLANDS WATER DISTRICT: 8 MR. SNOW 16929 9 CROSS-EXAMINATION OF WESTLANDS WATER DISTRICT: 10 MR. NOMELLINI 16942 11 MR. O'BRIEN 16944 THE BOARD 16952 12 FURTHER REBUTTAL TESTIMONY OF WESTLANDS WATER DISTRICT: 13 MR. BIRMINGHAM 16955 14 CROSS-EXAMINATION OF WESTLANDS WATER DISTRICT: 15 MR. O'BRIEN 16960 16 MS. CROTHERS 16962 17 ---oOo--- 18 19 20 21 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 16928 1 WEDNESDAY, APRIL 12, 2000, 9:00 A.M. 2 SACRAMENTO, CALIFORNIA 3 ---oOo--- 4 H.O. BROWN: Good morning. We will continue. 5 Mr. Birmingham, I believe you are up. 6 MR. BIRMINGHAM: Yes. Thank you, Mr. Brown. 7 Westlands Water District would like to call James Snow. 8 And Mr. Snow has not been sworn, Mr. Brown. 9 H.O. BROWN: Okay. While you're standing, Mr. Snow, 10 do you promise to tell the truth during these proceedings? 11 MR. SNOW: Yes. 12 H.O. BROWN: Be seated. 13 ---oOo--- 14 REBUTTAL TESTIMONY OF WESTLANDS WATER DISTRICT 15 BY MR. BIRMINGHAM 16 MR. BIRMINGHAM: Good morning, Mr. Snow. 17 MR. SNOW: Good morning. 18 MR. BIRMINGHAM: By whom are you employed? 19 MR. SNOW: Westlands Water District. 20 MR. BIRMINGHAM: And when did you go to work for 21 Westlands Water District? 22 MR. SNOW: June of last year. 23 MR. BIRMINGHAM: So June of 1999? 24 MR. SNOW: Right. 25 MR. BIRMINGHAM: And prior to working for Westlands CAPITOL REPORTERS (916) 923-5447 16929 1 Water District, where did you work? 2 MR. SNOW: For the Department of Water Resources. 3 MR. BIRMINGHAM: Mr. Snow, do you have a copy of 4 Westlands Water District Exhibit 133 with you? 5 MR. SNOW: Yes. 6 MR. BIRMINGHAM: What is Westlands Water District 7 Exhibit 133? 8 MR. SNOW: Description of my work experience and 9 resume. 10 MR. BIRMINGHAM: Does Westlands Water District 11 Exhibit 133 accurately describe your education and work 12 experience? 13 MR. SNOW: Yes, it does. 14 MR. BIRMINGHAM: Would you briefly describe your 15 responsibilities as an employee for the Department of 16 Water Resources? 17 MR. SNOW: I was in a variety of tasks. Mostly the 18 last ten years or so in the operations of the State Water 19 Project, scheduling operations and doing studies on water 20 delivery capability. 21 MR. BIRMINGHAM: In that capacity, did you become 22 familiar with the operations of the Central Valley Water 23 Project? 24 MR. SNOW: Yeah, to a pretty good extent. We had 25 close cooperation with Bureau operations staff. So in the CAPITOL REPORTERS (916) 923-5447 16930 1 coordination of the two projects, we have become pretty 2 familiar with the other's project. 3 MR. BIRMINGHAM: Are you familiar with the 4 Coordinated Operation Agreement? 5 MR. SNOW: Yes, I am. 6 MR. BIRMINGHAM: And what is the Coordinated 7 Operation Agreement? 8 MR. SNOW: It's an agreement where it defines the 9 two projects' responsibilities. It specifies the sharing 10 formulas for distributing available water supplies and 11 defining project responsibilities for meeting Delta water 12 quality compliance and in-basin uses. 13 Many people are familiar with the splits that 14 we've talked about here, the 75 percent for the State -- 15 or 75 percent for the CVP and 25 percent for the State 16 Water Project. And those splits occur when the Delta is 17 in balanced conditions and stored withdraws for exports 18 are being made. And those splits occur kind of primarily 19 in the summertime on average. 20 The other split that we haven't talked too much 21 about, the 55 percent for CVP and 45 percent for SWP, 22 occurs when the Delta is in balance, but storage withdraws 23 are less than exports. And this is kind of a relatively 24 short time frame. It's usually in the spring those 25 percentages apply and maybe the fall again. CAPITOL REPORTERS (916) 923-5447 16931 1 MR. BIRMINGHAM: Mr. Snow, in your last answer to my 2 question you used the term, "balanced conditions." What 3 does the term "balanced conditions" mean? 4 MR. SNOW: John Pacheco yesterday gave a pretty good 5 textbook definition of it. It's when reservoir releases 6 and unregulated flows are sufficient to meet Sac Valley 7 in-basin uses of Delta exports. More, maybe a layman's 8 definition, is kind of when the two projects, the CVP and 9 SWP, are managing their releases and exports to just meet 10 the Delta water quality outflows, or water quality 11 parameters. 12 MR. BIRMINGHAM: So a balanced condition means that 13 the two projects are in a coordinated fashion operating 14 their projects to make releases sufficient to maintain 15 water quality objectives, or flow objectives in the Delta 16 with sufficient excess water to meet export demands? 17 MR. SNOW: Yeah, that's a better way, another way of 18 putting it. 19 MR. BIRMINGHAM: Have you reviewed the Settlement 20 Agreement between the Department of Water Resources and 21 South Sutter Water District and Camp Far West Irrigation 22 District which is now in evidence as South Sutter Water 23 District Exhibit 2? 24 MR. SNOW: Yes, I have. 25 MR. BIRMINGHAM: And are you aware that the CAPITOL REPORTERS (916) 923-5447 16932 1 Department of Water Resources has represented that it will 2 assume any obligation imposed on South Sutter Water 3 District and Camp Far West Irrigation District as a result 4 of the Phase VIII Water Rights Hearing if the obligation 5 is in excess of what South Sutter Water District and Camp 6 Far West Irrigation District have agreed to contribute 7 under the Settlement Agreement? 8 MR. SNOW: Yeah, that's my understanding. 9 MR. BIRMINGHAM: That is a representation that is 10 commonly referred to as the backstop? 11 MR. SNOW: Yes. 12 MR. BIRMINGHAM: Have you reviewed the Department of 13 Water Resources Exhibit 44 in evidence, which is a letter 14 dated March 21, 2000, to Lowell Ploss from Raymond Hart? 15 MR. SNOW: Yes, I have. 16 MR. BIRMINGHAM: And in that letter it states, I'm 17 looking at the last sentence in the second paragraph on 18 Page 1 of Department of Water Resources Exhibit 44. 19 (Reading): 20 "DWR intends that these settlements not 21 adversely impact the operations or water supply 22 of the CVP." 23 Do you see that statement? 24 MR. SNOW: Yes. 25 MR. BIRMINGHAM: Would it be necessary for the CAPITOL REPORTERS (916) 923-5447 16933 1 accounting under the Coordinated Operation Agreement to be 2 adjusted in order for the settlement, South Sutter Water 3 District Exhibit 2, not to adversely impact the operations 4 or water supply of the Central Valley Project? 5 MR. SNOW: Yes. 6 MR. BIRMINGHAM: How would the accounting under the 7 Coordinated Operations Agreement have to be adjusted in 8 order for the settlement, South Sutter Water District 9 Exhibit 2, not to adversely impact the operations or water 10 supply of the Central Valley Project? 11 MR. SNOW: I guess it would be -- there's several 12 issues there with the co-adjustments that would have to be 13 addressed for the settlement to both not impact the CVP 14 and for the SWP to get their water for that matter. 15 I guess the first adjustment that has been 16 discussed is concerning the 4400 acre-feet settlement 17 water. If no adjustment is made, then -- in the daily COA 18 computations, the CVP would get 75 percent of that water 19 if it was released during that 75/25 split time. 20 The releases from the districts would come into 21 the Delta and be counted for in the normal accretions of 22 the COA computation. Another way to think about it is 23 that the releases would replace water that the SWP/CVP are 24 having to release for Delta requirements and exports. So 25 now the projects can reduce their upstream releases and CAPITOL REPORTERS (916) 923-5447 16934 1 the CVP would get 75 percent of that benefit. 2 So it's been recognized that an adjustment needs 3 to be made. And I think what's been talked about as 4 treating it like the water transfers, or treating it like 5 back in the water bank days is probably a good way to do 6 that. The project has got some pretty good experience on 7 making some of these adjustments for things like this, 8 where one project would buy water and they are able to 9 make adjustments pretty easily for these. 10 I guess the only other thing that I would bring 11 up on that aspect of it is that we would like to see some 12 kind of analysis, or make sure that this accounting would 13 be (b)(2) accounting withdraw as well. With the CVP doing 14 essentially daily accounting on how they're extending the 15 800,000 acre-feet of (b)(2) water on the CVP yield that we 16 would want to make sure that this accounting did not 17 effect those computations and either make more (b)(2) 18 water available or less. So that's the only other issue 19 there. 20 On the backstop adjustment, if the State Board 21 would obligate the districts to a larger share of meeting 22 water quality control requirements than is covered in the 23 settlement, and since DWR has agreed to cover these 24 obligations, of course, another adjustment of some kind 25 needs to be made to make sure the CVP is not impacted. CAPITOL REPORTERS (916) 923-5447 16935 1 I guess the first thing that would have to be 2 done is, of course, the obligation would have to be 3 defined and specified. We talked about some of those 4 volumes that might be involved yesterday. 5 And then the COA would need to be adjusted to 6 recognize this new responsibility by the SWP, they have 7 said that they would support that. In essence, the SWP 8 would need to provide more than their normal percentage 9 share of in-basin uses and the CVP would provide less than 10 their normal share. 11 MR. BIRMINGHAM: I'd like to follow up on the first 12 adjustment that you discussed. I believe you indicated 13 that when South Sutter Water District and Camp Far West 14 Irrigation District are providing the 4400 acre-feet of 15 settlement water, without some adjustment in the 16 accounting it would be possible for the CVP to take up to 17 75 percent of that water. Is that correct? 18 MR. SNOW: Yes. 19 MR. BIRMINGHAM: Now, yesterday, were you present in 20 the hearing yesterday? 21 MR. SNOW: Yes. 22 MR. BIRMINGHAM: And did you hear Mr. Nomellini ask 23 a question of Mr. Pacheco about the CVP being able to take 24 a portion of the 4400 acre-feet? 25 MR. SNOW: Yes. CAPITOL REPORTERS (916) 923-5447 16936 1 MR. BIRMINGHAM: Now, I'd like you to look at DWR 2 Exhibit 44. And on the first page there's a paragraph 3 number one. And paragraph number one, if you look at the 4 letter, I believe it states some of the principles of 5 adjustment under COA accounting would have to be made. Is 6 that your understanding? 7 MR. SNOW: Yeah, like the first sentence. 8 MR. BIRMINGHAM: The first sentence in paragraph 9 number one states that, 10 (Reading): 11 "Transfers by settling parties and DWR under 12 these agreements will be handled like other 13 water transfers." 14 Now my question is this: If the water, the 4400 15 acre-feet were treated under the COA like other water 16 transfers, would the CVP then be able to take 75 percent 17 of that water? 18 MR. SNOW: No. If it was -- the way that some of 19 the other water transfers were treated, I mean the normal 20 COA computation goes along the release shares are computed 21 and the shares of exports are computed. 22 And then the amount of release and exports that 23 is made, in this example, SWP would not be making a 24 release, but they would either be backing off their 25 release or increasing exports when the flows are released CAPITOL REPORTERS (916) 923-5447 16937 1 by the districts. 2 Then let's just say, for example, that they're 3 going to export that water right when it's released, if no 4 COA adjustment is made then SWP will look like they're 5 exporting more than their share, because they didn't 6 release that water. 7 So what is often done in these kinds of things if 8 there's a release coming in that belongs to one of the 9 other projects that's being released, like a district 10 releasing its water, then that volume is backed out of the 11 COA computation for that particular day or month. 12 MR. BIRMINGHAM: So there is an adjustment to the 13 accounting so that the Central Valley Project, in this 14 circumstance, would not be entitled under COA to take 75 15 percent of the water being released by South Sutter Water 16 District and Camp Far West Irrigation District? 17 MR. SNOW: Right. 18 MR. BIRMINGHAM: I'd like to follow up on the second 19 aspect of the adjustments that you said would have to be 20 required in those circumstances where DWR is backstopping 21 an obligation that is in excess of the contribution being 22 made by the two districts under the Settlement Agreement. 23 Let us assume that under DWR's agreements to 24 backstop the obligations of South Sutter Water District 25 and Camp Far West Irrigation District in wet, above CAPITOL REPORTERS (916) 923-5447 16938 1 normal, and below normal years, DWR would have to release 2 water from storage in Lake Orville to make up for flow 3 that otherwise would have to be bypassed by South Sutter 4 Water District and Camp Far West Irrigation District. 5 Do you understand that assumption? 6 MR. SNOW: Yes. 7 MR. BIRMINGHAM: Specifically, how would a daily 8 adjustment in the COA accounting be accomplished in order 9 for DWR to actually backstop that obligation? 10 MR. SNOW: If it was done on a daily basis, and I'm 11 not sure that that in this situation is the best way to do 12 it, but for -- we'll go with that assumption for now. 13 If the districts are supposed to provide some 14 water to meet a share of outflow or bypass unregulated 15 flow to maintain balanced conditions, the CVP and SWP 16 would be able to reduce their storage releases to maintain 17 the balanced condition. And since SWP has stated that 18 they will provide the District's obligation in addition to 19 their own, the SWP-COA share would be greater than their 20 normal 25 percent and the CVP share will be less than 21 their 75 percent. 22 So if you're doing it on a daily basis, I mean, 23 that's what the result would be. It may not always be the 24 best way to do it on a daily basis. There are times when 25 the CVP, perhaps, would not be able to back off on their CAPITOL REPORTERS (916) 923-5447 16939 1 releases if they were maintaining a certain minimum flow 2 at their -- downstream in the reservoirs, or maintaining 3 maybe a winter-run temperature control in the Sac River, 4 so the SWP would say, okay, we want to provide more than 5 our share today, and the CVP may not be able to take 6 advantage of that on that particular day. 7 So in that circumstance I suppose the COA account 8 that is maintained everyday could be used to keep track of 9 this extra amount of water that the State would be wanting 10 to pay back. And then the volume would be traded at some 11 point in the future in the COA daily account. 12 MR. BIRMINGHAM: Now, in response to one of my 13 earlier questions you stated that a concern from a CVP 14 contractor perspective is that the adjustments in SWP 15 operations to backstop the obligation of South Sutter 16 Water District and Camp Far West Irrigation District be 17 (b)(2) neutral. Could you provide an explanation of what 18 you meant by that? 19 MR. SNOW: I don't know if in this hearing -- we 20 haven't really talked about (b)(2) accounting. It's 21 probably a session all of its own. But the Bureau is 22 going through quite a series of studies and daily 23 accounting to make sure they expend this 800,000 acre-feet 24 of CVP yield. And they do that by doing some base-case 25 studies, and then they layer on the Accord, and then they CAPITOL REPORTERS (916) 923-5447 16940 1 layer on all the (b)(2) actions. 2 And then they compare these model studies to 3 determine how much water they've expended. And in that 4 accounting both the SWP exports and the CVP exports and 5 releases are tracked on these base-case studies as well as 6 the actual real-time operation. 7 And so if something like this occurs and the 8 State is bringing in extra water, which would affect 9 either their releases and/or exports it could affect the 10 (b)(2) accounting in a way to either expend more than 800 11 or, perhaps, make it look like they're spending less than 12 800. 13 MR. BIRMINGHAM: Excuse me, may I have a moment? 14 H.O. BROWN: Do you want to go off the record for a 15 moment? 16 MR. BIRMINGHAM: No, we're fine. Thank you. 17 Go ahead and finish your explanation, Mr. Snow. 18 MR. SNOW: So there's at least a concern that we 19 have in making sure that the CVP is not impacted either in 20 operations or water supply, that either some analysis or 21 demonstration is made to make sure that this extra COA 22 accounting that we're doing does not affect that 800,000 23 accounting. 24 MR. BIRMINGHAM: I have no further questions on 25 direct examination. CAPITOL REPORTERS (916) 923-5447 16941 1 C.O. BROWN: Thank you, Mr. Birmingham. 2 As a reminder to those who wish to cross the 3 rebuttal, the questions are limited to the subjects that 4 were presented in the rebuttal. Let's see a show of hands 5 of those who would like to cross. Okay. 6 Mr. O'Brien and Mr. Nomellini. 7 MR. NOMELLINI: Can I go first? I have to go to the 8 Capital and normally it is viewed as a disadvantage to go 9 first, but I have one brief question. I'd be willing to 10 jump in front of Mr. O'Brien. 11 MR. O'BRIEN: I have no problem. 12 C.O. BROWN: With Mr. O'Brien's permission and 13 approval, I would be pleased to grant that request to you, 14 Mr. Nomellini. 15 MR. NOMELLINI: Thank you. 16 MS. CROTHERS: Excuse me? 17 H.O. BROWN: Okay, Ms. Crothers. 18 MS. CROTHERS: After Mr. O'Brien is done, I may have 19 some questions. 20 H.O. BROWN: Okay. 21 Mr. Nomellini. 22 MR. NOMELLINI: Okay. Thank you very much. 23 MEMBER FORSTER: Is your bill up? 24 MR. NOMELLINI: Oh, sure. 25 // CAPITOL REPORTERS (916) 923-5447 16942 1 ---oOo--- 2 CROSS-EXAMINATION OF WESTLANDS WATER DISTRICT 3 BY CENTRAL DELTA PARTIES 4 BY MR. NOMELLINI 5 MR. NOMELLINI: Dante John Nomellini, attorney for 6 Central Delta Parties. 7 Mr. Snow, if the State Water Resources Control 8 Board found that the State Water Project and CVP have the 9 sole responsibility for meeting the 1995 Water Quality 10 Control Plan, then in that case the Department has 11 purchased water from South Sutter and you're testimony is 12 as I gathered overall, that they should be given a credit 13 in this Coordination Operation Agreement for bringing more 14 water to the table. 15 MR. SNOW: The 4400 -- 16 MR. NOMELLINI: The 4400 acre-feet? 17 MR. SNOW: That's how I understand it. In order for 18 them to get the water, yes. 19 MR. NOMELLINI: Okay. So there wouldn't be under 20 this agreement a situation where the Bureau could pump 21 their share of that water -- would there be any 22 possibility of that under the present agreement? 23 MR. SNOW: As long as the agreement is made in such 24 a way that the COA adjustment is made to make sure all 25 that water gets to the State then the answer is no. CAPITOL REPORTERS (916) 923-5447 16943 1 MR. NOMELLINI: Okay. So the agreement provides a 2 mechanism when someone else brings extra water to the 3 table they should get credit for it? 4 MR. SNOW: This letter agreement as I understand it 5 they're trying to develop the principles or rules of how 6 they will do that, but that's the intent to make that 7 adjustment. 8 MR. NOMELLINI: Okay. Thank you very much. And 9 sorry I have to leave. 10 H.O. BROWN: Okay. Thank you, Mr. Nomellini. 11 MR. NOMELLINI: I'm leaving my man here to protect 12 our -- 13 H.O. BROWN: You're in good hands. 14 Mr. O'Brien. 15 ---oOo--- 16 CROSS-EXAMINATION OF WESTLANDS WATER DISTRICT 17 BY SOUTH SUTTER WATER DISTRICT 18 BY MR. O'BRIEN 19 MR. O'BRIEN: Mr. Snow, I'd like to refer you to the 20 COA, which has been marked as Westlands Water District 21 Exhibit 131. And specifically to Page 8, Paragraph 22 6(A)(3). I just want to make sure that I understand how 23 this accounting adjustment process works in the context of 24 the agreement itself. 25 Do you have that in front of you? CAPITOL REPORTERS (916) 923-5447 16944 1 MR. SNOW: Yes. 2 MR. O'BRIEN: Now, 6(A)(3) I'm just going to read it 3 into the record, because I'm going to ask some questions 4 about it. It says, 5 (Reading): 6 "As either party proceeds toward the full 7 utilization of the project, any changes in the 8 underlying assumptions with respect to the 9 development of the two projects and the demands 10 for water from each project will be reflected 11 by recomputing the annual water supplies 12 specified in Exhibits B-1 and B-2 in accordance 13 with provisions of sub-Article 14A. 14 The methodology described in the document 15 entitled, quote, 'Technical Report on 16 Determination of Annual Water Supplies for 17 Central Valley Project and State Water 18 Project,' end quote, dated March 1984 will be 19 used to recompute the annual water supplies and 20 to revise, if necessary, the factors and 21 procedures contained in this article." 22 You're familiar with that provision in the COA? 23 MR. SNOW: I've read it. 24 MR. O'BRIEN: Okay. And is it your understanding 25 that that's at least the general provision under which CAPITOL REPORTERS (916) 923-5447 16945 1 some of these accounting adjustments that you've been 2 discussing would occur? 3 MR. SNOW: No. I don't know if that's that comes 4 from or not. 5 MR. O'BRIEN: Okay. I guess my question is: To 6 your knowledge is there any other provision of the COA 7 that governs the types of accounting adjustments that 8 we've been discussing this morning? 9 MR. SNOW: I don't know if there's a specific 10 paragraph that deals with extraordinary issues like water 11 transfers and that kind of thing. 12 MR. O'BRIEN: In any event, it's apparent from your 13 direct testimony that this process of recomputing COA 14 allocations occurs from time to time between the 15 Department and the Bureau. Is that a fair statement? 16 MR. SNOW: Yes. 17 MR. O'BRIEN: And it sounds like that occurs on a 18 fairly regular basis? 19 MR. SNOW: Yeah, I would say so. More so, you know, 20 sometimes than others, but, yeah, it's a fairly regular 21 occurrence. 22 MR. O'BRIEN: And could you just briefly for me 23 describe the process by which those recomputations occurs? 24 Is it a formal process? Is it fairly informal? How does 25 it happen? CAPITOL REPORTERS (916) 923-5447 16946 1 MR. SNOW: Normally, like when one of the projects 2 is doing a transfer or doing something that would require 3 some kind of adjustment like this, there's kind of an 4 informal letter agreement between Mr. Larry Gage, who kind 5 of heads up the State's side of operations and Lowell 6 Ploss with the CVP side. And they do this kind of letter 7 agreement that they recognize that some situation has come 8 up that's not handled correctly in the daily accounting 9 and agree to some adjustment of some kind. It could be 10 either water and/or power related, energy related. 11 MR. O'BRIEN: So there have been occasions where 12 they've essentially made retroactive adjustments where 13 they realized something in the accounting was out of 14 whack? 15 MR. SNOW: Normally, we kind of see it coming. You 16 know we know that the situation is out there and I don't 17 know if I'd say it's always retroactive, but at times it 18 has been. 19 MR. O'BRIEN: Okay. And I assume that from time to 20 time the Bureau and the Department have been in 21 disagreement as to some of the accounting issues? 22 MR. SNOW: Yes. 23 MR. O'BRIEN: Has there ever been a situation, to 24 your knowledge, where they have not been able to 25 ultimately work out their differences on a COA accounting CAPITOL REPORTERS (916) 923-5447 16947 1 issue? 2 MR. SNOW: No. 3 MR. O'BRIEN: To your knowledge, has Westlands Water 4 District or any other CVP water contractor ever objected 5 to the type of process that you just described as to how 6 these adjustments are made? 7 MR. SNOW: I'm not aware that they have. Of course, 8 I've only been working for them for eight months. 9 MR. O'BRIEN: But based on your long experience with 10 the Department, you're not aware of any? 11 MR. SNOW: I'm not aware of any. 12 MR. O'BRIEN: Now, as I understand the position of 13 Westlands Water District in this proceeding, the District 14 is asking the State Board to withhold approval of this 15 particular Settlement Agreement until there is a detailed, 16 and I emphasize the word "detailed" written agreement 17 between the Department and the Bureau that spells out 18 exactly how the accounting related to this settlement will 19 occur. Is that your understanding? 20 MR. SNOW: Yeah, I believe so. It would be better 21 to ask Tom, but I believe so, it's been our position. 22 MR. O'BRIEN: To your knowledge, has Westlands Water 23 District in the past ever taken a position with respect to 24 any water transfer, or other transaction involving water 25 supplies, taken the position that that sort of detailed CAPITOL REPORTERS (916) 923-5447 16948 1 accounting protocol should be undertaken and agreed to up 2 front? 3 MR. SNOW: I'm not aware of any, but I don't know 4 that we've had any situations like this in this day and 5 age with all of the things that are going on. 6 MR. O'BRIEN: Well, you've been involved, for 7 example, in some of the water transfers that have occurred 8 from time to time. Has Westlands ever said before a water 9 transfer can be approved but we need to have a detailed 10 accounting protocol in place before that transfer could be 11 approved? 12 MR. SNOW: Like I said, I'm not aware of what their 13 position was during the water transfers. I'm not aware 14 that they did, but that doesn't mean that they didn't. 15 MR. O'BRIEN: And has, to your knowledge, Westlands 16 or any other party ever requested that the State Water 17 Resources Control Board be involved in the process of 18 accounting adjustments under COA? 19 MR. SNOW: It seems like in some of the water 20 transfers that the State Board has required some 21 agreements on how things were going to be handled before. 22 I don't have a specific recollection, but I believe that 23 has been the case at times in the past. 24 MR. O'BRIEN: I guess let me rephrase my question. 25 My question was: Has Westlands requested that the State CAPITOL REPORTERS (916) 923-5447 16949 1 Board involve itself in the process, the detailed 2 accounting process of figuring out how to allocate water 3 within the bounds of the COA? 4 MR. SNOW: I don't think -- the things I was 5 thinking of where the State Board has said there should be 6 an agreement and the two projects should agree on how to 7 handle it, I don't believe they have gotten involved in 8 the details. 9 MR. O'BRIEN: They've essentially left that to the 10 Bureau and the Department to work out? 11 MR. SNOW: That would be my assumption. 12 MR. O'BRIEN: In discussing the backstop issue in 13 your direct examination you made the point that in this 14 particular case a daily adjustment in the COA accounting 15 might not be the best way to go. Do you recall that? 16 MR. SNOW: Yes. 17 MR. O'BRIEN: Is that due in part to the small 18 quantities of water that we're dealing with here? 19 MR. SNOW: Well, I wasn't really thinking of the 20 quantities, although, they are a little bit troublesome 21 when you're talking about the range of the flows and the 22 exports that we have. But the daily accounting is down 23 to, you know, the nearest cfs. So it can handle the small 24 amounts. That's really not the issue -- or the problem 25 that I see. CAPITOL REPORTERS (916) 923-5447 16950 1 MR. O'BRIEN: The problem, one of the problems that 2 you mentioned on that issue is that just operationally 3 there may be times, for example, when the CVP could not 4 back off on reservoir releases. In that situation in the 5 past has the approach typically been to go back and 6 retroactively make some adjustments to account for that 7 sort of situation? 8 MR. SNOW: This is a relatively new type of 9 situation that's popped up the last several years in 10 operations. And there's -- I mean the two projects are 11 still, I guess, in disagreement on how to handle some of 12 those issues. 13 They have at times even though the Delta is in 14 balance, have suspended accounting when those kinds of 15 things have happened. And so the daily accounting of the 16 percents have been essentially suspended for a period of 17 time, even though the Delta is still in balance. 18 And they have kind of said, okay, this is an 19 issue that needs to be addressed in COA negotiations and 20 review of COA with the new Water Quality Control Plan and 21 a lot of other issues that have come up in recent years. 22 So I wouldn't say that they have agreed to go 23 back and address those at this time. They have kind of 24 agreed to disagree would probably be another way of saying 25 it. CAPITOL REPORTERS (916) 923-5447 16951 1 MR. O'BRIEN: Thank you. Nothing further. 2 H.O. BROWN: Ms. Crothers? 3 MS. CROTHERS: Mr. Brown, I don't have any further 4 questions. Mr. O'Brien covered them all. Thanks. 5 H.O. BROWN: All right. 6 Mr. Birmingham, any redirect? 7 MR. BIRMINGHAM: Yes. 8 ---oOo--- 9 CROSS-EXAMINATION OF WESTLANDS WATER DISTRICT 10 BY THE BOARD 11 H.O. BROWN: Okay. Ms. Forster has some questions 12 that might help you, Mr. Birmingham. 13 MEMBER FORSTER: I have some questions of your 14 witness. Mr. Snow, something that's a little puzzling to 15 me that maybe you can help me understand from your prior 16 work experience in what you're doing now. 17 You were here yesterday and you heard the 18 Department talk about the goal of 300,000 acre-feet and 19 then the Settlement Agreement is 4400 acre-feet. And this 20 morning you were talking about the 75 percent to the 21 Bureau. So here's where my confusion is: 22 Is 75 percent of what they're seeking in the 23 300,000 always to go to the Bureau? 24 MR. SNOW: As I understand it the goal of 300 is for 25 all the water rights settlements, I'm not aware of CAPITOL REPORTERS (916) 923-5447 16952 1 discussions on how that would be split between the two 2 projects. 3 I think back a few years it was -- both CVP and 4 SWP were kind of working on the settlement things. The 5 CVP as far as I know has not been involved in a lot of the 6 recent issues on that. It gets into how the (b)(2) 7 accounting is done. It gets into a lot of the recent -- 8 some of the requirements on the CVP that the SWP does not 9 have and whether the CVP would get to take advantage of 10 these flows. 11 MEMBER FORSTER: What do you mean by -- 12 MR. SNOW: If DWR continues on towards meeting that 13 300,000, more of these COA adjustments would have to be 14 made in order for the CVP, if they were not participating 15 in the purchases, for them not to get that water. 16 So we see more and more of these COA adjustments 17 being necessary in order for them not to receive the 18 benefit if they were not -- if they chose not to enter 19 into the water right settlements. 20 MEMBER FORSTER: If the CVP decided not to enter 21 into the water rights? 22 MR. SNOW: Right. 23 MR. BIRMINGHAM: Mr. Brown, may I make an offer of 24 proof? 25 H.O. BROWN: Go ahead. CAPITOL REPORTERS (916) 923-5447 16953 1 MR. BIRMINGHAM: I believe if Mr. Pacheco or any of 2 the representatives of the State Water Contractors 3 involved in the negotiations were to testify they would 4 testify to the effect that when the Bureau of Reclamation 5 was participating in the settlement discussions along with 6 CVP contractors that there were discussions about how 7 adjustments would have to be made to sharing of the 8 settlement water, because it was the view of the State 9 Water Project, the Department of Water Resources, and the 10 State Water Contractors that the 75/25 percent split for 11 settlement water would be inappropriate. 12 MEMBER FORSTER: Inappropriate? 13 MR. BIRMINGHAM: Inappropriate. That I believe 14 would be the testimony of Mr. Pacheco or, say, 15 Mr. Schuster who has been involved in those discussions. 16 MEMBER FORSTER: I can't ask you questions, but I 17 can continue to ask of him some questions. 18 H.O. BROWN: Probably enough -- 19 MR. SNOW: I have not been involved in the 20 development of the 300,000 number, or even some of the 21 negotiations on meeting that. So I am very limited. 22 H.O. BROWN: If you like, Ms. Forster, we can swear 23 Mr. Birmingham in and -- 24 MEMBER FORSTER: No, I don't want to start that, I 25 don't think. CAPITOL REPORTERS (916) 923-5447 16954 1 MR. BIRMINGHAM: I don't want to start that either. 2 MEMBER FORSTER: I guess my other question is: Is 3 it your opinion that if the State Water Board is held to 4 policies, programs, and processes like the COA or (b)(2) 5 water, what do you think our role is in having to look at 6 those kind of agreements? If you can't answer it, just 7 say -- 8 MR. SNOW: I can't answer it. Maybe you may want to 9 swear Tom in. You may want to think twice about that. 10 MEMBER FORSTER: No. I guess I was just curious 11 about mostly the 75 percent, the 25 percent. And 12 Mr. Birmingham answered that. And so I'll stop now. 13 H.O. BROWN: Mr. Birmingham, you had an offer of 14 proof. 15 Staff, do you have any questions on this? 16 MS. LEIDIGH: No. 17 H.O. BROWN: Is that all, Ms. Forster? 18 MEMBER FORSTER: Yes. 19 H.O. BROWN: Okay. Mr. Birmingham. 20 ---oOo--- 21 FURTHER REBUTTAL TESTIMONY OF WESTLANDS WATER DISTRICT 22 BY MR. BIRMINGHAM 23 MR. BIRMINGHAM: Thank you. I do have some 24 questions on redirect following up on some questions asked 25 of you by Mr. O'Brien. CAPITOL REPORTERS (916) 923-5447 16955 1 Let me ask about prior situations in which there 2 was adjustments under the COA accounting for transfer of 3 water. Do you recall those questions? 4 MR. SNOW: Yes. 5 MR. BIRMINGHAM: The transfers that have occurred 6 previously, were they temporary transfers or long-term 7 transfers? And by "long-term," I mean in excess of two 8 years. 9 MR. SNOW: They were -- the ones that I've been 10 aware of have been short-term transfers. 11 MR. BIRMINGHAM: And by "short-term" you mean? 12 MR. SNOW: Either one year -- actually, I don't know 13 of any that were longer than one year. 14 MR. BIRMINGHAM: So would it be the transfers that 15 Mr. O'Brien was talking about were all transfers that 16 occurred in a single year? 17 MR. SNOW: Yes. 18 MR. BIRMINGHAM: Again, I'd like to go back to -- 19 let me ask you one more question before we go to DWR 20 Exhibit 44. Mr. O'Brien asked with respect to those prior 21 accountings did Westlands -- excuse me. Let me restate 22 the question. 23 With respect to the prior transfers, did 24 Westlands Water District ever request a detailed 25 accounting protocol before the transfer could be approved CAPITOL REPORTERS (916) 923-5447 16956 1 and you responded not to your knowledge. Is that correct? 2 MR. SNOW: Yes. 3 MR. BIRMINGHAM: Now, I'd like to look at DWR 4 Exhibit 44. And there is a statement in the third 5 paragraph of DWR Exhibit 44 that states, 6 (Reading): 7 "Staff level discussions between our two 8 agencies have identified these settlements 9 among other issues, CVPIA, ESA, et cetera, that 10 emphasize the need to review the accounting 11 procedures of the COA. However, our respective 12 staffs recognize that the analysis and 13 negotiations necessary to do this review will 14 be a significant task and will take a 15 substantial length of time." 16 Do you see that statement? 17 MR. SNOW: Yes. 18 MR. BIRMINGHAM: Now, is the Settlement Agreement 19 that's being proposed by the Department of Water 20 Resources, South Sutter Water District, and Camp Far West 21 Irrigation District of a duration longer than one year? 22 MR. SNOW: That's my understanding. 23 MR. BIRMINGHAM: Is it your understanding that this 24 is a proposed long-term settlement of the potential 25 obligation of Camp Far West Irrigation District and South CAPITOL REPORTERS (916) 923-5447 16957 1 Sutter Water District to contribute water towards the 2 implementation of the 1995 Water Quality Objectives? 3 MR. SNOW: Yes. 4 MR. BIRMINGHAM: Now, in response to one of 5 Mr. O'Brien's questions about prior transfers and 6 adjustments in accounting, you said that you were not sure 7 that a circumstance like this existed with respect to 8 those prior transfers. When you said that you were not 9 sure that a circumstance existed with respect to those 10 prior transfers, what did you mean? 11 MR. SNOW: Oh, let's see, I guess I was thinking of 12 the nature of the long-term nature of it. That where -- I 13 guess more I was thinking of the backstop issue, probably, 14 than of the settlement, although, the settlement if you 15 take the length of time out of it is pretty similar to 16 what's gone on before at times. 17 But having DWR backstop any additional water that 18 might be out there on the table is I think what I 19 primarily had in mind. 20 MR. BIRMINGHAM: So, in fact, as part of this 21 agreement there is an obligation that is going to be 22 assumed by the Department of Water Resources that it 23 otherwise would not have under the COA, you think that 24 that is a circumstance that necessitates having, using 25 Mr. O'Brien's words, a detailed accounting protocol? CAPITOL REPORTERS (916) 923-5447 16958 1 MR. SNOW: Yes. 2 MR. BIRMINGHAM: Do agree with the statement that is 3 contained in the DWR letter, Exhibit 44, that issues 4 related to these settlements of CVPIA, ESA emphasize the 5 need to review the accounting procedures under the COA? 6 MR. SNOW: Yes. 7 MR. BIRMINGHAM: And in your view without a detailed 8 accounting protocol, will it be possible for the Central 9 Valley Project and its contractors to be comfortable that 10 the implementation of this Settlement Agreement will not 11 effect CVP operations or CVP water supplies? 12 MR. SNOW: No. There's some kind of -- details will 13 need to be specified in order for us to believe that no 14 impacts will be made. 15 MR. BIRMINGHAM: I have no further questions. 16 H.O. BROWN: Thank you, Mr. Birmingham. 17 Recross of rebuttal, anyone? 18 MR. O'BRIEN: If I could have just one minute, 19 Mr. Brown? 20 H.O. BROWN: All right. We'll go off the record for 21 just a moment. 22 (Off the record from 9:50 a.m. to 9:51 a.m.) 23 H.O. BROWN: Back on the record. 24 MR. BIRMINGHAM: May I ask Mr. Snow one more 25 question? CAPITOL REPORTERS (916) 923-5447 16959 1 H.O. BROWN: Yes. 2 MR. BIRMINGHAM: Mr. O'Brien asked you a question 3 about Westlands Water District's position with respect to 4 this proposed settlement. And I want to follow up on 5 that. 6 Westlands Water District is not opposed to 7 parties reaching some kind of compromise concerning 8 potential obligations to meet Bay-Delta Water Quality 9 Objectives; is that correct? 10 MR. SNOW: Yes. 11 MR. BIRMINGHAM: So that if Westlands can have some 12 reasonable certainty that this Settlement Agreement would 13 not affect its water supplies, Westlands Water District 14 would be fully supportive of this Settlement Agreement? 15 MR. SNOW: Yes. 16 MR. BIRMINGHAM: Thank you. 17 H.O. BROWN: Mr. O'Brien? 18 MR. O'BRIEN: I am glad I let him ask that last 19 question. Just a couple questions, Mr. Snow. 20 ---oOo--- 21 CROSS-EXAMINATION OF WESTLANDS WATER DISTRICT 22 BY SOUTH SUTTER WATER DISTRICT 23 BY MR. O'BRIEN 24 MR. O'BRIEN: You stated in your redirect that to 25 your knowledge there hasn't been any long-term transfers CAPITOL REPORTERS (916) 923-5447 16960 1 that have required these types of adjustments in the COA; 2 is that correct? 3 MR. SNOW: Yes, that's my recollection. You're not 4 going to bring one forward and say, "What about this one," 5 are you? You're not trying to trick me, are you? 6 MR. O'BRIEN: I'm not trying to trick you. I just 7 wanted to know if you know about the settlements that were 8 approved under Section 1641? 9 MR. SNOW: No. 10 MR. O'BRIEN: So you're not familiar with the San 11 Joaquin River Agreement? 12 MR. SNOW: Oh, yes. 13 MR. O'BRIEN: And there were some other settlements 14 that were approved in that decision. Are you familiar at 15 all with any of the other settlements? 16 MR. SNOW: Not to a great degree, no. 17 MR. O'BRIEN: To your knowledge, have all the 18 various accounting issues that will arise under the 19 implementation of the San Joaquin River Agreement been 20 fully documented and resolved at this point in time? 21 MR. SNOW: I don't know if they have or not. 22 MR. O'BRIEN: Okay. Thank you. 23 H.O. BROWN: Ms. Crothers. 24 // 25 // CAPITOL REPORTERS (916) 923-5447 16961 1 ---oOo--- 2 CROSS-EXAMINATION OF WESTLANDS WATER DISTRICT 3 BY THE DEPARTMENT OF WATER RESOURCES 4 BY MS. CROTHERS 5 MS. CROTHERS: Good morning. Kathy Crothers, staff 6 counsel for DWR. I'm not trying to trick you either. 7 MR. SNOW: Good. 8 MS. CROTHERS: In DWR Exhibit 44 which 9 Mr. Birmingham has already referred to, this is our letter 10 between the Department of Water Resources and the Bureau 11 of Reclamation setting forth principles on sharing under 12 the settlement agreements. Is that correct? 13 MR. SNOW: Yes. 14 MS. CROTHERS: In that letter on principles -- and 15 there's some items listed -- it recognizes in item number 16 one -- well, prior to the item number one, the sentence 17 before that. It says, 18 (Reading): 19 "Therefore, in the interim our staff recommends 20 the following principles will apply." 21 And what that is in reference to is the following 22 principles will apply with respect to the obligations 23 under the settlement agreements like the Bear River 24 Agreement; is that correct? 25 MR. SNOW: Yes, that's what I understand. CAPITOL REPORTERS (916) 923-5447 16962 1 MS. CROTHERS: And then the first item it says, 2 (Reading): 3 "Transfers by settling parties and DWR under 4 these agreements will be handled like other 5 water transfers." 6 Is that correct? 7 MR. SNOW: Yes. 8 MS. CROTHERS: Now, in your opinion then in the past 9 the Department and the Bureau have made adjustments to 10 their accounting to the COA to handle other water 11 transfers; is that correct? 12 MR. SNOW: Yes. 13 MS. CROTHERS: Has there been any difficulty in 14 making these adjustments to accounting to COA for that 15 purpose? 16 MR. SNOW: No. I would say those went pretty 17 smoothly. 18 MS. CROTHERS: Well, in your opinion, would the 19 adjustments for this Bear River Settlement Agreement in 20 terms of the obligations that DWR will have to meet, is 21 that going to be any different than those adjustments that 22 you're familiar with in the past, for instance, for 23 similar transfers? 24 MR. SNOW: I would say that the basic -- the 4400 I 25 think probably will be pretty easy to do. The only caveat CAPITOL REPORTERS (916) 923-5447 16963 1 might be now with the (b)(2) stuff, whether we can agree 2 on how that should be handled maybe as a minor problem 3 with that. 4 But I think that basically the 4400 will probably 5 be pretty easy. And as I mentioned, the other backstop 6 issue, the kinds of unknowns out there is a little bit 7 trickier since those kinds of things were not really 8 handled in the water transfer arena in the past. 9 MS. CROTHERS: In this letter on the principles 10 here, item number four, goes on to say, 11 (Reading): 12 "That the obligation of the settling parties 13 will be determined on a real-time basis and 14 appropriate periodic adjustments made to the 15 COA balance." 16 Do you think that this principle will -- is that 17 principle stating assurances that the Bureau will need so 18 that it will not be impacted adversely by the Bear River 19 Settlement? 20 MR. SNOW: I think it says the basics, but I guess 21 where our concern may be is the devil in the details of 22 how that's worked out. And you know I don't have a 23 problem with that basic statement. And it gives us kind 24 of a little bit blanket of good feeling. But I guess 25 all -- we're kind of saying we'd like to see a little bit CAPITOL REPORTERS (916) 923-5447 16964 1 more before we're completed. 2 MS. CROTHERS: Well, item number five follows. That 3 says, 4 (Reading): 5 "Through another agreement, respective 6 operations offices of both our agencies at the 7 joint operations centers will work out the 8 detailed and real time implementation of these 9 principles." 10 Is that correct? 11 MR. SNOW: Uh-huh. 12 MS. CROTHERS: So is it your understanding that this 13 detailed agreement is in the works, being prepared at this 14 time? 15 MR. SNOW: That's what I understand. 16 MS. CROTHERS: So is it your understanding that this 17 type of specific agreement is possible to be prepared and 18 created by the respective agencies for purposes of meeting 19 these principles? 20 MR. SNOW: Yeah, if you're asking me if they are 21 capable -- 22 MS. CROTHERS: Yes, that's a better way of saying 23 it. 24 MR. SNOW: Yeah, I think they are. I guess I would 25 still, you know -- would we be -- are we happy with just CAPITOL REPORTERS (916) 923-5447 16965 1 the projects doing it in a closed room and then they bring 2 it out and say, "Here it is"? I guess I'd feel a lot 3 better seeing it and making sure that some of these kind 4 of peripheral issues like you know (b)(2) and some of the 5 other things that I've mentioned, are adequately covered. 6 But I mean I don't want to say that, no, they do 7 not know what they're doing, I want to look at it, too. 8 But to make sure some of these issues are handled. And 9 some of them are, you know, controversial between the two 10 projects, I'd feel a lot better seeing it before I'd say 11 for sure, is it good enough? Does that answer your 12 question? 13 MS. CROTHERS: Yes, it does. And I'm not sure -- 14 are you somewhat familiar with the Bear River Settlement 15 Agreement which is Exhibit 2 -- 16 MR. SNOW: Yeah, I have reviewed it. 17 MS. CROTHERS: -- of the South Sutter Water 18 District, Exhibit 2. In that agreement one of the 19 conditions precedent -- are you aware that one of these 20 conditions precedent before the Department and the 21 settling parties actually implement this does require that 22 such a specific agreement will be completed before we 23 implement this agreement? 24 MR. SNOW: What -- 25 MS. CROTHERS: Maybe I should point it out, on Page CAPITOL REPORTERS (916) 923-5447 16966 1 9 of Exhibit 2 under "Conditions Precedent." It's Section 2 4A. 3 MR. SNOW: Is that -- I didn't know if that was the 4 detailed agreement, or just the principle letter. I 5 wasn't sure. 6 MS. CROTHERS: Well, then in our principles we spell 7 out that we would have that detailed agreement. 8 MR. SNOW: Okay. 9 MS. CROTHERS: So it's your understanding that that 10 is how the agreement will be working? 11 MR. SNOW: Okay. Yes. 12 MS. CROTHERS: I think that's all my questions. 13 Thank you. 14 MEMBER FORSTER: Mr. Chairman, I have a question of 15 legal staff that I wanted to see if I could ask 16 Ms. Crothers a question. I don't know if she can do the 17 same thing that Mr. Birmingham just did in the burden of 18 proof. How do I ask her a question? 19 MS. LEIDIGH: Well, I think that you can just ask 20 her a question. What Mr. Birmingham did, I think, 21 actually, was more in the nature of legal argument than 22 was an offer of proof, since he didn't put on a witness. 23 But I think you can ask Ms. Crothers a question about the 24 Department's legal position. 25 MEMBER FORSTER: Well, what I want to know is I CAPITOL REPORTERS (916) 923-5447 16967 1 don't remember this being an issue in our first seven 2 phases. Did this issue come up, but we just didn't have 3 it as a part of a phase? I don't remember the COA and the 4 split being an issue. And I'm curious as to why it's an 5 issue on the Sacramento River side and it wasn't an issue 6 on the San Joaquin River side. 7 H.O. BROWN: All right. Ms. Crothers, I'm going to 8 provide you and the rest of the legal staff, attorneys, 9 the opportunity for oral closing statements. And then you 10 also will have the opportunity for some written 11 statements. So you may think on that question and include 12 it within your statement and that way you could get it 13 into the record. 14 MS. CROTHERS: I think that's a good idea, because, 15 actually, that might take a specific review of the COA to 16 see if the COA -- and I am not that familiar with it, I 17 haven't read it lately in how it deals with the San 18 Joaquin side. 19 H.O. BROWN: But include it in your oral statements. 20 MS. CROTHERS: Okay. 21 H.O. BROWN: We're just real close to that right 22 now. In fact, I think you probably would be the first one 23 up. And what I'm going to do is provide you -- how many 24 want to give oral closing statements? Three. All right. 25 I'll provide you five minutes a piece to give CAPITOL REPORTERS (916) 923-5447 16968 1 your oral closing statements. And we'll give you 30 days 2 to submit your written closing statements. All right. 3 So, Ms. Crothers, if you would like to stay up, 4 assuming that staff -- do you have any questions on 5 rebuttal, redirect? 6 MS. LEIDIGH: No. 7 H.O. BROWN: All right, no questions. 8 Then, Ms. Crothers -- 9 MEMBER FORSTER: Maybe a break. 10 MS. CROTHERS: I'd like to take a few moments just 11 to look at the COA. 12 H.O. BROWN: Okay. We'll take a 12-minute break. 13 MS. CROTHERS: Thank you. 14 (Recess taken from 10:04 a.m. to 10:17 a.m.) 15 H.O. BROWN: We'll come back to order. And we have 16 a visitor, Mr. Ray Miller, from Orange County with WWA. 17 Vice-president now, Ray? 18 MR. MILLER: Treasurer. 19 H.O. BROWN: Treasurer, welcome. You've come at a 20 good time. 21 Ms. Crothers, I believe you're up. 22 MS. CROTHERS: Thank you. I would like to respond 23 to Ms. Forster's question on the COA and why it appears 24 that this seems to be an issue now at the beginning of 25 this phase -- can you hear me all right? CAPITOL REPORTERS (916) 923-5447 16969 1 MEMBER FORSTER: Yes. 2 MS. CROTHERS: -- and it's not been brought up 3 before, well, it wasn't an issue before, it's not that is 4 wasn't there, but in the prior agreements that we 5 discussed in Phases II and IV that dealt with the San 6 Joaquin River Agreement and the Mokelumne River Agreement 7 where there was some backstopping by the Department, in 8 those backstops the Bureau of Reclamation and DWR both 9 were participating as backstopping entities. 10 So we were both responsible for our share of the 11 backstop, whatever that was and actually took into account 12 the COA. So any -- from the San Joaquin River Agreement 13 the Bureau is responsible for the Vernalis flow objectives 14 backstop; but DWR and the Bureau were both responsible for 15 the in-delta basin obligations backstop. And that would 16 have been shared under the COA arrangements. 17 And similar with the Mokelumne River and East Bay 18 MUD, we stated we would be backstopping our proportionate 19 share. So in this case, this Bear River Agreement the 20 Bureau didn't participate in this agreement for its own 21 reasons. 22 And therefore the Department has taken on the 23 full obligation of the backstop, 100-percent obligation. 24 And then, thus, arose the concerns then that if DWR is 25 going to be making whole on that 100-percent obligation CAPITOL REPORTERS (916) 923-5447 16970 1 for in-delta basin water quality needs, which we share 2 under the COA, then how does the Bureau get assurances 3 that we are taking on our full responsibility, their 75 4 percent that they would have normally taken on. 5 And I think that's what we discussed with the 6 Bureau of Reclamation. They have agreed, in principle, 7 that they believe this can be done through their COA 8 accounting methods. As Mr. Snow explained that they have 9 done this type of thing in the past, especially if you 10 kind of treat it like a water transfer and they have 11 experience with that. 12 So I don't think this is really a large problem 13 for the Bear River Agreement to be implemented. It's a 14 detail that can be worked out. And I recognize the 15 concerns that Westlands Water District has in making sure 16 that it is done correctly. And I have confidence that it 17 will be done. 18 We're in the process of getting that done. And, 19 frankly, I've been told that it would be just be a matter 20 of one, maybe two weeks to actually finalize our specific 21 agreement that we talked about. And so I think we'll be 22 able to satisfy Westlands' concerns with that. 23 And, in fact, for the purposes of what the Board 24 should be considering in an order to deal with this issue, 25 I don't know how much detail the Board would really have CAPITOL REPORTERS (916) 923-5447 16971 1 to be involved in more than that the Board would be 2 requiring in their order that DWR make sure that there 3 aren't adverse impacts to the Bureau by preparing such an 4 agreement between the Bureau and DWR. 5 And that, in fact, our agreement requires us to 6 do that. And if the Board embraces that requirement, you 7 know, it would be a requirement that we would have. I 8 don't know if there would be anything further that the 9 Board would really have to do in terms of assuring that. 10 In general, then, and in other points that I'd 11 like to make at this time I would just kind of like to 12 restate some of our views on this agreement and why we 13 believe it's important to have these settlement 14 agreements. 15 The one we have with the Bear River, being our 16 first like this, DWR has come to the Board before 17 supporting that we participate in open negotiations with 18 parties on the Sacramento River to achieve the 19 implementation of the water quality control plan. 20 And this settlement is an example of that, how we 21 can negotiate with these parties to come to a reasonable 22 means of trying to implement the water quality control 23 plan that we both can live with, that is acceptable to the 24 water agency, that voids their impacts, their potential 25 problems, such as you've heard some of -- the potential CAPITOL REPORTERS (916) 923-5447 16972 1 for groundwater problems. 2 We believe through our agreements we deal with 3 those issues. We have somewhat limited the amounts we're 4 purchasing. Those limited amounts actually help assure 5 that we're not going to get into environmental problems. 6 We went through a CEQA analysis. South Sutter 7 Water District was the lead agency in the initial study. 8 In neg dec, DWR and Camp Far West Irrigation District 9 acted as responsible agencies. We completed the comment 10 period, received no comments from anybody. 11 The analysis did look at potential impacts to the 12 Bear River area and also the Delta area. We looked at the 13 months that we've limited our transfer -- our release of 14 water and the potential for exporting water to avoid 15 potential impacts so that we had no significant impacts 16 from this action. 17 One of the other issues that has been brought up, 18 which I think there should not be made too big a light of, 19 is the 300,000 acre-foot goal that was proposed I don't 20 know, several years ago now, I know it was 1998, or 21 something, maybe '97, where at one time the settlements on 22 the Sacramento River watershed area we were trying to plan 23 on how to achieve such settlements to implement the water 24 quality control plan and avoid Phase VIII. 25 So there was a big interest especially by the CAPITOL REPORTERS (916) 923-5447 16973 1 water contractors to avoid the Phase VIII issues and do 2 that through settlement. And there was thought about how 3 to do that, amounts of water that could be obtained by 4 other water users, and done through negotiated settlements 5 so that everybody felt comfortable with meeting the 6 obligations under the '95 Plan. 7 Well, that 300,000 acre-foot number as 8 Mr. Pacheco said did take into consideration more than 9 just technical, how much do we need? Because it was going 10 to be compromises that we had to deal with, what people 11 could actually deliver, and what would avoid possible 12 significant adverse impacts to local areas. So there were 13 a lot of considerations to be made and some sort of figure 14 to have as a goal. 15 I want to emphasis this was just a goal, because 16 when you're working towards something it's good to have an 17 objective. And, frankly, I don't think that goal is even 18 really anymore. We're already in Phase VIII, we have a 19 few agreements in the works. We're not going to be 20 getting there. I don't think the goal is really that 21 relevant to any future settlements that we will be working 22 on. There will be more done on a specific site-specific 23 basis. 24 And anyway I think that's really all I wanted to 25 emphasize. And I thank you for holding this special CAPITOL REPORTERS (916) 923-5447 16974 1 hearing for this settlement agreement. Thank you. 2 H.O. BROWN: Thank you, Ms. Crothers. 3 MEMBER FORSTER: Thanks for your explanation, it was 4 very clear. 5 H.O. BROWN: Mr. O'Brien. 6 MR. O'BRIEN: I'll just start by reiterating what I 7 said yesterday that this proceeding, because it's the 8 first Sacramento Valley Water Rights Settlement in 9 Bay-Delta will have repercussions in terms of other 10 settlement discussions that may occur in the future. So I 11 think it is important in terms of what the Board does in 12 this proceeding. 13 And the Board has been a strong proponent of 14 settlements on Bay-Delta water right issues and D-1641 15 very clearly indicates that and I think that's the right 16 policy. And I would urge you to follow that policy in 17 this proceeding as well. 18 This settlement agreement is a compromise. And I 19 think in some of the discussion and testimony about some 20 of the numbers maybe we lost sight of it at the end of the 21 day yesterday. It's troubling to me that alternative 22 three has become the benchmark by which this settlement is 23 being examined, because as far as I know this Board has 24 not made a decision on which alternative will be the 25 alternative selected. It may be two, it may be three, it CAPITOL REPORTERS (916) 923-5447 16975 1 may be some other alternative, or it may be something in 2 between. We still have to go through that process. 3 South Sutter Water District is taking a risk 4 here. It's agreeing to provide water which ultimately may 5 be water that it doesn't have to provide. And, please, 6 understand that that Board of Directors struggled long and 7 hard with that issue, but ultimately it decided that it's 8 in the best interest of South Sutter Water District, the 9 same can be said with Camp Far West Irrigation District, 10 to resolve this dispute, put in agreements that have 11 benefits for both side and, essentially, go forward with 12 the Department of Water Resources on this project and, 13 perhaps, other projects in the future. 14 I understand the concerns expressed by Westlands 15 Water District. We all know that they've been through a 16 lot of battles recently on various accounting issues. And 17 we know about the water supply issues that they face. 18 I think a lot of the testimony we heard from 19 Westlands can be viewed in the context of some of the 20 struggles that have occurred on the (b)(2) issues. I 21 think there's a heighten sensitivity and awareness on the 22 part of Westlands and, perhaps, others in San Joaquin that 23 accounting be done in a very precise manner so they are 24 assured that there's no injury. And I don't hold that 25 against them. CAPITOL REPORTERS (916) 923-5447 16976 1 But I think that the important point here is that 2 there is conceptual agreement by all the parties in this 3 proceeding. That the United States Bureau of Reclamation 4 should not be harmed by the implementation of this 5 agreement. Nobody disagrees with that concept. The 6 question is: How do you carry that out in terms of the 7 accounting? 8 As Ms. Crothers has indicated that work is 9 currently underway. And we are hopeful that it will be 10 concluded very shortly. But I think that there is a 11 possibility that there could be further discussions and 12 that that process could end up being drawn out to some 13 extent. 14 And I think the policy decision for this Board 15 is: Do you hold up a settlement pending the resolution of 16 these accounting level decisions when there has been 17 conceptual agreement as to the basic principle involved? 18 And I would submit that the Board would be best 19 served by approving this settlement, sending a signal to 20 the world that you are going to support and encourage 21 these types of settlements, also, admonishing the parties 22 to resolve the accounting issues quickly and efficiently. 23 And Mr. Snow indicated that although there have 24 been disagreements on COA accounting, they've always 25 managed to eventually reach an agreement. And I think CAPITOL REPORTERS (916) 923-5447 16977 1 they can do so in this case. 2 And if ultimately Westlands has a problem with 3 the way that issue is resolved, and I hope that they 4 don't, but if there is a problem their remedy really lies 5 with the Bureau of Reclamation. And they've demonstrated 6 an ability to pursue those remedies when necessary. And I 7 truthfully hope that doesn't occur in this case, but I 8 don't think that's a State Board problem. The State Board 9 has enough issues on its plate, it doesn't need to get 10 into COA accounting issues. 11 So just in closing, I would request that the 12 Board approve the settlement as quickly as possible and 13 also the related petition for change. And as I said, 14 encourage and admonish the parties to move forward quickly 15 with the completion of the accounting protocols that need 16 to be put in place. 17 Thank you. 18 H.O. BROWN: Thank you, Mr. O'Brien. 19 Mr. Birmingham. 20 MR. BIRMINGHAM: Thank you. Mr. Brown, Ms. Forster, 21 Westlands Water District agrees with many of the comments 22 that have been made by Ms. Crothers on behalf of the 23 Department of Water Resources and Mr. O'Brien on behalf 24 South Sutter Water District and Camp Far West Irrigation 25 District to the extent they convey the idea that parties CAPITOL REPORTERS (916) 923-5447 16978 1 involved in a dispute should be permitted to assess risks 2 and reach agreements in compromise of the dispute. 3 But, they should only be able to do that to the 4 extent that the implementation of their settlement will 5 not effect other parties. That has been the hallmark of 6 the settlement agreements that have been approved to date 7 by this Board. 8 As Ms. Crothers said there is a distinction 9 between this settlement agreement and the others that have 10 previously come before the Board. In the others, both the 11 Department of Water Resources and the Bureau of 12 Reclamation were agreeing to backstop the obligations of 13 the settling parties in the event the obligations 14 established by the Board were in excess of what they 15 agreed to contribute under the agreements. 16 So issues concerning accounting really did not 17 arise, because the COA dealt with that circumstance. 18 Moreover, I will observe that with respects to the San 19 Joaquin River Agreement and the Mokelumne River Agreement, 20 many of the CVP and SWP contractors were parties to those 21 agreements including Westlands. 22 Westlands was a party to both of those settlement 23 agreements, because it was Westlands' view that it would 24 benefit from those agreements. For many, many, reasons 25 Westlands is not going to be a party to this agreement. CAPITOL REPORTERS (916) 923-5447 16979 1 And I'm not sure that it's appropriate to go into those 2 reasons here. 3 But what we know from the evidence in this case 4 is that the Department of Water Resources, for its own 5 reasons and reasons that we don't suggest the Board should 6 go behind, but for its own reasons the Department of Water 7 Resources has agreed to backstop what may become a very 8 substantial obligation. 9 Even assuming that the numbers that were prepared 10 by Mr. VanCamp are correct, if the Board adopts 11 alternative three, in wet years the Department of Water 12 Resources will have agreed to backstop on behalf of the 13 two settling agencies 11,000 acre-feet. In above normal 14 years, they will have agreed to backstop 26,000 acre-feet. 15 Now, in the grand scheme of things, that doesn't 16 represent an awful lot of water. But if the Department of 17 Water Resources continues to pursue settlement agreements 18 and they get anywhere near the objective, there is a 19 substantial obligation that they are willingly going to 20 assume. 21 I believe the Environmental Impact Report 22 indicates that if the Board were to adopt flow alternative 23 three, that contributions from Sacramento Valley water 24 users towards meeting the objective would be somewhere in 25 the vicinity of a million acre-feet. Compared to the CAPITOL REPORTERS (916) 923-5447 16980 1 300,000 acre-foot objective, that is a substantial 2 objective that DWR is willingly going to assume. 3 We want to assure ourselves that when they 4 undertake that obligation, the Central Valley Project will 5 not be impacted -- 6 MEMBER FORSTER: Can I ask you to correct -- you 7 just said something that I don't know that was an 8 appropriate statement. We don't know, yet, and I'm sure 9 DWR has not agreed to willingly assume that. You didn't 10 mean to say speaking for them, that they willingly assume 11 that? 12 MR. BIRMINGHAM: No. That is exactly what I meant. 13 That is precisely what I meant. And let me explain why. 14 The objective, the original objective the 300,000 15 acre-feet towards the settlement, if they get to 300,000 16 acre-feet and the difference between what would be made 17 available by all of the settling parties, let's assume 18 that they reach a settlement agreement with everyone in 19 the Sacramento Valley, the obligation that they would be 20 assuming would be approximately 700,000 acre-feet towards 21 meeting Bay-Delta water quality objectives. 22 Now, I agree with Ms. Crothers that it's unlikely 23 that they will reach a settlement agreement with all of 24 the contractors in the Sacramento Valley. And I agree 25 that the 300,000 acre-foot objective may no longer be CAPITOL REPORTERS (916) 923-5447 16981 1 relevant. But if they were to reach a settlement with all 2 of the Sacramento Valley contractors and they got 300,000 3 acre-feet in the aggregate, which was their original 4 objective, and the Board were then to adopt flow 5 alternative three, they would have assumed voluntarily an 6 obligation of approximately -- they would have agreed to 7 backstop for approximately 700,000 acre-feet. 8 Now, I don't know that that is what's going to 9 happen, but you're going to have their -- they hope you're 10 going to have other settlement agreements come before the 11 Board. And we, again, do not want to in any way prevent 12 the Board, or oppose approval of those settlement 13 agreements, because as Mr. O'Brien said and as 14 Ms. Crothers said they represent decisions by their 15 respective boards, or agencies based upon an informed 16 analysis. 17 And they should be free to do that. But because 18 of the potential impacts that could occur under the 19 Coordinated Operation Agreement that was described by 20 Mr. Snow and Mr. Pacheco and as is indicated in DWR 21 Exhibit 44, the Department of Water Resources recognizes 22 that there is a need to review the accounting procedures 23 under the COA, because of issues arising under the 24 settlement agreements and related issues including CVPIA 25 and ESA. What we would ask the Board to do -- CAPITOL REPORTERS (916) 923-5447 16982 1 H.O. BROWN: One minute, Tom. 2 MR. BIRMINGHAM: What we would ask the Board to do 3 is one of two things: Defer approval of this agreement 4 until the detailed agreement, the detailed protocol that 5 Mr. O'Brien described in his cross-examination has been 6 completed. And it is our hope that when that is done we 7 will be assured that, in fact, the backstop obligation 8 will be accounted for in a way that will not effect CVP 9 operations and, therefore, our water supply. 10 Alternatively, what the Board could do is approve 11 the agreement but include in its order a provision that 12 says that in the event some party is dissatisfied with 13 that agreement, that that party could come back to the 14 Board and request that the Board reconsider the agreement. 15 It would be very difficult for this Board to 16 determine that the settlement agreement is in the public 17 interest until there is some degree of certainty that 18 other nonsettling parties will not be affected. 19 Either one of those alternatives would provide 20 the Board with the opportunity to consider the agreement 21 in light of the final detailed accounting protocol that 22 would modify accounting under COA. 23 But just at the risk of repeating myself, 24 probably for the third time, we applaud the efforts of DWR 25 and South Sutter Water District in reaching a settlement. CAPITOL REPORTERS (916) 923-5447 16983 1 They should be commended. I know from having participated 2 in some of the early discussions with Mr. O'Brien years 3 ago that it has been a very difficult task to reach this 4 agreement. And we support them, subject to the single 5 caveat which I've expressed. 6 Thank you. 7 H.O. BROWN: Mr. Birmingham, you still have an 8 exhibit that you need to offer into the evidence. 9 MR. BIRMINGHAM: Yes, I would offer Westlands Water 10 District Exhibit Number 133. 11 H.O. BROWN: Are there any objections to the 12 acceptance of that exhibit into evidence? Seeing none, it 13 is so accepted. 14 MR. BIRMINGHAM: Thank you. 15 H.O. BROWN: Is there any other closing comments 16 anyone wishes to make before we conclude our business? 17 Seeing none, you now have 30 days to file your briefs. 18 That would bring it up to -- your written briefs -- that 19 would bring it up to May 12th, I think that's on a Friday, 20 May 12th at 4:00 p.m. is when it will be the closing time. 21 Is there any further business? I ask you to pick 22 up any paper cups or evidence that we have left behind 23 from having drinks in this room, for my own well-being. 24 And thank you all for participating. This hearing is 25 closed. CAPITOL REPORTERS (916) 923-5447 16984 1 (The proceedings concluded at 10:42 a.m.) 2 ---oOo--- 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 16985 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 16912 through 16986 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 22nd day of 14 April, 2000. 15 16 ________________________________ MARY R. GALLAGHER, CSR #10749 17 18 19 20 21 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 16986