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Exchange Contractors April 6, 2018



The Exchange Contractors board of directors met at its headquarters in Los Banos on Friday, April 6, 2018. The big storm everyone’s been waiting for has started. The board room was vastly underpopulated in comparison to most Ex Con meetings. Chairman Jim O’Banion called the meeting at 8:00 am and we kicked things off with a flag salute that included the term “under God.”  I don’t know why every government meeting doesn’t begin with recognition of our common heritage. The next thing to happen was a flurry of board approvals on various action items: agenda, minutes, public comment (none), financial statements, paying the bills and the finance committee reports.

Executive Officer Steve Chedester, the only non-attorney I know who consistently wears a tie to these meetings, had the good news that the actual budgets were pretty close to the amounts budgeted. CPA Joe Mastro gave the board the 2017 Ex Con audit. Good news all around and the board approved. Mastro gives a pretty good oral report. One of the ways to judge a good audit report is the amount of coughing and sometimes snoring sounds. The less the better. Another way to tell if it’s a bad report is the sound of wailing and gnashing of teeth. Of course the best way is to have the CPA report the audit was clean. Mastro did just that and the board approved.

Water Master Adam Hoffman gave his water report and said south of Delta Central Valley Project ag contractors may get an increased allocation with this storm. It could go up to 35 percent. Demands in Ex Con are down due to the rain. Pulse flows down the San Joaquin River have increased inflow at the Mendota Pool. During the storm last month someone might have been messing with Hoffman. He got a call saying there was muddy water going to San Luis Canal Company and he should check with Columbia Canal Company General Manager Randy Houk. Hoffman called Houk and asked him if his water was muddy. Houk laughed and told him of course it was, it was raining. Hoffman was a good guy about it saying if it made Randy laugh it was worth it.

Hoffman said pumping in the Delta is going well at the moment. Storms have hit the Lake Shasta watershed last month and inflow to the reservoir was good. There is still plenty of room for more storage. The report for Millerton Lake on the SJR included news the upstream reservoirs have gilled with storm water. Don Pedro Reservoir on the Stanislaus River had to make some flood releases sending more water to the Delta allowing the pumps to run. He said April’s pumping rates at the Jones plant will be good. The rain prediction for today and tomorrow will give us maybe two inches on the Valley floor and five to six inches of snow in the Sierra Nevada. Another storm is coming in next week, maybe. Snow packs on both the Sacramento and San Joaquin Rivers have jumped to high 70 percent range. It was a helpful March with increases water content to the snow. Chedester said the outage on the California Aqueduct should help boost the pumping on the federal side.

Chedester gave his report and said the CVP contractors are working together to figure out the impacts from the possibly misnamed Voluntary Settlement Agreements with the State Board and the American and Stanislaus Rivers. There was no Cooperative Operations Agreement meetings last month. The California Water Fix is still in flux and there’s not a lot of new news to be covered in open session. The SJR restoration comments have been accepted by the US Bureau of Reclamation and he’s waiting for the Bureau’s response. When Ex Con gets a document back and reviews it and the Natural Resources Defense Council reviews it maybe things will go forward and there will be a meeting with Senator Diane Feinstein. Is it true her husband is a major contractor on the High Speed Rail project?

The negotiations that brought this forward was reported on by Houk. He said the first consideration is the Mowery Bridge in Mendota. It is condemned and needs to be refurbished. The City of Mendota is a disadvantaged community seeking funds to do the work and found them in the SJR restoration. The next infrastructure improvement will be compacting dirt and installing fish screens and ladders on the Bypass. Houk said the long-term goal to reach a 4,500 cfs flow for the entire river will require more money in the future. For now, the Bypass is being upgraded to a 4,500 cfs channel. Seepage is still a concern to adjacent landowners in some areas of the river. Houk said there has been more progress made in the past year than the past decade combined. The consensus seemed to be Senator Feinstein took a firmer hand in encouraging all the parties to work together. Good for her and the Ex Con managers and engineers working so tirelessly on this. Attorney Paul Minasian questioned where in a worst-case scenario if restoration construction could prevent SJR water reaching Ex Con. It didn’t appear so. He would like to see the plan to discharge sediment downstream and that was put off until closed session by the urging of Houk and Chedester. That didn’t make sense to me – why that topic – but I need to remember this restoration is the result of a 20-year lawsuit.

Chedester continued his report saying the Temperance Flat Dam Prop One application process is still ongoing. The California Water Commission is supposed to release a revised public benefit ratio later this month and that can be appealed not only to the ranking staff but the CWC board itself. Chedester reported the merging of the San Joaquin Valley Water Infrastructure Authority JPA and the MOU Investors Group is making headway. Director Mike Stearns Firebaugh Canal Water District, said at yesterday’s San Luis Delta Mendota it was reported there are some grave concerns about some of the positions taken by some Friant districts. Chedester said he’s spoke with SLDM’s interim XO Jon Rubin about this matter and he thinks from Ex Con’s perspective it is still a doable transition. Chedester said he met with Senator Feinstein and Stantec Engineer Bill Swanson in Visalia recently. Chedester said Feinstein entered the meeting believing Temp Flat was a nonstarter. Swanson is good, really good at explaining complicated matters. He told Feinstein she was looking at the old Bureau vision. He updated her and she left the meeting in favor of Temp Flat. Someone asked if this might just be lip service on Feinstein’s part but nobody thought so. Chedester said she’s senior enough to tell it like it is.

Next, and I wish you could have been here for this, Central California ID’s Jarrett Martin gave the SGMA update. He said a couple of folks have commented that in the past his reports were boring. I didn’t think I was one. I don’t recall every writing that his reports were boring. Anyway, he’d loaded his phone with a Johnny Cash’s Folsom Prison and sang the first part of his report. He has a good voice and hope he continues this as a tradition. He reported he’s been to the GSAs in the sub basin and now ACWA’s insurance folks will provide insurance for the GSAs. He said the plan is to work up the GSPs as stand-alone documents but integrated for the benefit of DWR. There are public outreach workshops planned and he said there is an option to get DWR to pay for some monitoring wells. If needed. The grants to help develop GSPs have come in at $1.5 million. There is also a $1.2 million grant for disadvantaged communities.

Next the board was asked to appoint committee members to Personnel and Finance Committee. Chedester said most of the meetings are by teleconference. CCC’s Chris Cardella volunteered for the finance committee. It turns out a manager can sit on the personnel committee. Houk nominated Chris White, GM CCID because he lives in Los Banos and wouldn’t have to travel. Even though Houk can’t legally make motions or vote SLCC GM John Wiersma, who also can’t make or second a motion or vote seconded Houk. Somehow or other White has been appointed. I failed to mention earlier in this paragraph White was the only manager absent. He’s off wrestling with the State Board or the Cal Water Commission or some such.

The Mendota Pool Group held a meeting with Ex Con, Wonderful Orchards and consultants. I’m not sure what happened but everyone went away happy as I understand it.

Provost & Pritchard engineer Rick Iger gave the Subsidence report for White. He said the Clayton WD has been formed. Attorney Lauren Layne represents CWD and she said the district is annexing more land in Madera County to take care of some white areas. Chowchilla WD is negotiating selling surface water to the area. Iger said the Bureau is measuring subsidence by surveys in the Red Top area in July. The Bureau is also tasked to measure subsidence along the Delta Mendota Canal. Wiersma asked if any of the surveys are showing positive results. Iger said there was good news near the SJR and the Bypass due to recharge. The land at the bifurcation structure actually rose a bit. Iger said once the Corcoran Clay shrinks it’s gone but other clay layers can refill and cause an expansion of the land. He said that often happens at the Kern Water Bank.

Iger was up again for a report on the Ex Con Water Resources Plan. He said there needs to be a change of plans to update new info. The pilot project on Orestemba Creek has taken place and the facility is almost ready to go. Dr. Ken Schmidt is checking on water mounding and other metrics. Iger said he hopes by this fall the needed data will be gathered and analyzed so the project will be set to go. Iger presented a great deal of information on both hydrology, organization and financial scenarios. It turns out this is a very competitive project price wise. Iger said the shallow well scenario is on par with the Kern Water Bank. This news has opened up some opportunity for further banking in the area. There was a ranch near the Mendota Pool named after the Herminghouse (sp?) Family. Somehow or other Southern California Edison, the Bureau and no doubt an army of lawyers came up with an agreement than can be used as a test to limit pumping. If I understood correctly.

Consultant, farmer, attorney, Dave Cory answer to them all. Cory reports on matters dealing with the Regional and State Water Boards. He was concerned about following Hoffman and Houk’s positive reports and trying to match the entertainment value of Martin’s singing. But he went for it with shoulders back and head high. He said when it comes to drainage it has very little to do with surface water, it’s all groundwater. Monitoring salt and nitrate levels throughout the Valley are coming on line with groundwater quality protection at township levels. He said nitrates took over the salt in the Central Valley Salts eight years ago and now salts have been punted, maybe, 30-years down the road. He said CV Salts will change the basin plans impacting everyone from oil producers to food processors to of course farmers. Cory said how to adapt and implement these changes in unity is the key to survival. He said in his opinion if ag doesn’t band together to face this challenge the folks advocating for the most restrictive program will prevail. Layne said she’s heard there will be a push to move salts to the GSAs. Cory also said there are data points on maps the State Board uses that show domestic wells where none have ever existed. It would be a good idea for the State Board to purge its maps of false information.

Chedester gave the legislative report and said he’d like to take a closer look at a bill by Assemblyman Joaquin Arambula dealing with flood flows. He said it look benign on the surface but there needs to be more analysis. On the fed side there is $20 million in water storage for Shasta. He said he got a call from the Bureau to sign a letter of support – if I understand – to not drop a law suite to prevent the State Board from denying Pre-1914 water rights. Minasian said this is a very important law suite.

Speaking of Minasian his turn was next. He reported there are three parts to the Delta tunnel hearings in Sacramento. Two parts are moving quickly and most of the talk will be in closed session. The DWR changes are plans to build a separate forebay for the tunnel deliveries. This would give water going to Metropolitan WD higher quality water that could increase Delta Mendota Canal salinity. Minasian asked rhetorically if this is ominous and he said not so much. For one thing DWR would have to stand alone without the Bureau and it desperately wants to partner with the Bureau and DWR is flailing and this could just be change for the sake of change. He commented not to spend a lot of hope on federal money to run freely in California with the majority of the state’s government actively feuding against the feds – if I understood correctly. There are new regulations such as: not delivering water at a restaurant if a customer doesn’t ask for it, not allowing any new turf not watered by waste water. The State Board’s staff is trying to maneuver a power grab, trying to convince the world the State Board has the power to do whatever they want. However, the above mentioned regulations and many others were taken off the April 17th agenda of the State Board’s meeting. This could be a sign some progress is being made and more on that in closed session.

The four managers’ reports were next. White said water use in CCID is down due to the storms, as is deliveries to the refuges. He said his district is in standard operations for this time of the year under these conditions. Wiersma said SLCC held elections and there two new board members. He said the Sack Dam’s project requires a lot of permitting complexity but the construction is easier. Jeff Bryant, GM FCWD said he’s spending a lot of time dealing with sump pumps. The earlier storm sent Silver Creek moving down stream. Some went towards Mendota and the rest dissipated upslope and no water got in the canals. He said he’s keeping an eye on this weekend’s storm since the watershed is pretty much primed. Houk reported CCC is as the other districts; having a low demand month of March. The last open session item was JoAnn White asking who is going to the ACWA conference in Sacramento next month. The meeting then adjourned.

DISCLAIMER OF RESPONSIBILITY; strives to provide his clients with the most complete, up-to-date, and accurate information available. Nevertheless, does not serve as a guarantor of the accuracy or completeness of the information provided, and specifically disclaims any and all responsibility for information that is not accurate, up-to-date, or complete.’s clients therefore rely on the accuracy, completeness and timeliness of information from DAW entirely at their own risk. The opinions expressed in this report are those of the author and do not represent any advertisers or third parties.

ALL RIGHTS RESERVED.  Copyright 2018 by Don A. Wright   No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of DAW.


Main Office: 541 H Street, P.O. Box 2115 Los Banos, CA 93653 Office 209/827-8616 Email:

The Exchange Contractors cover almost a quarter of a million acres in Fresno, Madera, Merced and Stanislaus Counties.

Mission Statement

The Exchange Contractors Water Authority mission is to effectively protect the Exchange Contract and maximize local water supply, flexibility and redundancy in order to maintain local control over the members’ water supply.


James O’Banion-Chair Central California Irrigation District, Chris Cardella-Vice Chair Columbia Canal Company, James L. Nickel-Treasurer San Luis Canal Company, Mike Stearns-Director Firebaugh Canal Water District


Steve Chedester-Executive Director, Adam Hoffman-Water Master, Joann White-Administrative Assistant, Patty Baldini-Office Assistant, Paul Minasian-Attorney


The San Joaquin River Exchange Contractors hold some of the oldest water rights in the state, dating back to the late 1800s. The rights were established by Henry Miller of the legendary Miller and Lux cattle empire. In 1871, Henry Miller constructed canals to divert water from the San Joaquin and North Fork of the Kings Rivers for irrigation of his vast acreage. Today, several of the original Miller and Lux canals are operated by the Exchange Contractors.

Although Henry Miller’s canals served the irrigation needs of his estate in the western portion of Fresno, Madera, Merced, and Stanislaus counties, in order for more growth on the east side of the San Joaquin Valley to occur, more water was needed. In 1933, the United States Department of Interior undertook the Central Valley Project, a vast undertaking to build dams throughout the great Central Valley including the Sacramento, American and San Joaquin Rivers. When construction of the Friant Dam (north of Fresno) was under consideration, feasibility studies showed that irrigation development of the Friant Project between Chowchilla and Bakersfield depended upon water being diverted from the San Joaquin River at Friant Dam and brought to the east side of the valley, via the Friant-Kern Canal.

To accomplish this, the government asked the heirs of Miller and Lux to agree to “exchange” where they receive their pre-1914 appropriative and riparian water from the San Joaquin and Kings Rivers for guaranteed deliveries of “substitute” water from the Sacramento River by means of the Delta-Mendota Canal and other facilities of the United States. This agreement, known as the “Exchange Contract,” along with the accompanying “Purchase Contract,” were reached in 1939 and that led to the name “San Joaquin River Exchange Contractors.” In normal years, the Exchange Contractors are guaranteed 100% of their contractual water allotment (840,000 acre feet) and in critical years the amount is 75% (650,000 a/f).

The Exchange Contractors, however, did not abandon their San Joaquin River water rights. Instead, they agreed not to exercise those San Joaquin and Kings Rivers’ water rights if guaranteed water deliveries continued through the Delta-Mendota Canal or other facilities of the United States. In the event that the Bureau is unable to make its contracted deliveries of substitute water to the Exchange Contractors, the Exchange Contractors have



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