Roscoe Moss Company

Exchange Contractors June 1, 2018

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The Exchange Contractors board of directors met at its headquarters in Los Banos on Friday, June 1, 2018. Just barely sat down and Chairman Jim O’Banion called the meeting to order at 8:00 am with a flag salute. Everyone was in a good mood. The minutes were approved and Rick Iger, Provost & Pritchard stood up during public comment and said on behalf of P&P thank you to Ex Con for all the work over the years. He said the firm is celebrating its 50th anniversary they have some treats for lunch. Poor guy, trying to be nice and he was peppered with questions pretty good. “You giving 50 percent off your billing?” “You taking everyone to the Wool Growers for lunch?”

Executive Officer Steve Chedester asked to add an item to the agenda dealing with sub basin boundary modifications under SGMA. The board OK’d that.

Adam Hoffman, Water Master gave his report and said federal South of Delta Ag Contractors allocations went up five percent and may reach 50 percent before it’s over. The state side also bumped its allocation up as well. There is more than 500,000 a/f of storage upstream from Friant Dam in the power lakes, I like to call them. The tributaries are dropping off so flows past Vernalis are down as well. The California Aqueduct is under repairs so the intertie with the San Luis Delta Mendota Canal is being heavily used. The bank ruptured and then the coffer dam ruptured and the work deadline has been extended by a few months. Northern reservoirs; Shasta and others are well stocked with water. Storages are above average. Two terribly constructed sentences in a row there. Hoffman passed out for pages of spread sheets by consultant Dan Steiner. They showed different ways to figure out allocations, I think.

Chedester gave his report saying there is still fussing between the US Bureau of Reclamation and DWR over the Cooperative Operating Agreement. The Water Fix has raised a united front by the Central Valley Project “family”; no redirected impacts to nonparticipants: i.e. water supply, financial, reduction in marketable power. Just about everyone representing CVP contractors have stepped up.

The San Joaquin River Restoration has moved forward by 200 plus pages of USBR paperwork. The Bureau released its Funding Constrained Framework for Implementation. It sounds like the program is only $100 million short this year. Chedester said the priority for Ex Con is to get the necessary infrastructure build. Attorney Tom Berliner reported by telephone things are looking better and quite a few projects have been brought forward. Even though there is no evidence of steelhead trout going past Sac Dam the Bureau wants to plan for this to happen. Berliner also said the Bureau is looking at unrealistic salmon numbers. But, much of the infrastructure Ex Con wants should be funded before the money runs out; but for levees. John Wiersma, GM San Luis Canal Company said the Bureau has given Oks for the Sac Dam specs. In unrelated news there is a 80,000 a/f water transfer being negotiated with the USBR. It involves Madera ID, the Bureau and San Luis Delta Mendota.

In the wake of the California Water Commission’s peeing like a puppy on Temperance Flat Prop One funding what will be next? Ex Con is participating in what comes next in the form of an MOA investors’ group. The MOA group will be taking over moving the project ahead to keep the $171 million award on the table until July and I think the bigger picture is using the political clout, capital and will built up by the San Joaquin Valley Water Infrastructure JPA as opposed to letting it fade away. A lot of the SJVWIA folks are signing the MOA and Chedester said getting the folks who care about Temp Flat on track, working together. Randy Houk, GM Columbia Canal Company asked why Ex Con, Westlands WD and SLDMWA should all join since they are all represented by SLDM. Chedester said not all the SLDM folks have signed off on the special activities. Jeff Bryant, GM Firebaugh Canal Water District said since there are people willing to invest in Temp Flat and SJR water; it should be a priority to retain a seat at the table. That kind of summed it up.

Next was the special SGMA item and Jarret Martin, Central California ID gave the SGMA report. Martin said there are new updates on the groundwater balance with Dr. Ken Schmidt verifying the data. Martin said there will be a June 8th conference call for Valley wide subsidence issues. Grant funding of $1.5 million from Prop One will yield some more money to Ex Con’s GSA. The coordination and cost sharing agreements are moving forward as well. Chedester said Landowner Bill Ward wants to remove his lands from the Chowchilla Sub Basin and move them into the Delta Mendota Sub Basin. This is possible but DWR has placed a June 30 deadline. The board’s approval today doesn’t make it happen, it starts the process. Iger explained further saying Ward contacted P&P about this matter. Ward has been wanting to move his BB Limited property for some time. Houk said CCC has historically serviced these lands and the out of district lands as well. Although part of the lands are in the white area but being served under CCC’s function as a canal company. Chris White, GM CCID said the MOUs with counties allows this movement. The lands wont become a part of the Ex Con GSA, but rather a part of the Delta Mendota Sub Basin. Director Chris Cardella, CCC said he can’t find a downside. Attorney Lauren Layne clarified a couple of fine points dealing with the impacted water districts. Since CCC is privately owned a public agency needs to file a notice of intent. Attorney Andy McClure (I don’t know where Paul Minasian is – probably vacationing in Europe, but McClure’s taking care of business) said DWR reviews boundaries ever two years or so. But it would be much better to take care of this now. The board agreed to help.

Chedester said a staffing plan being worked out with consultants Martin Rosch and Adan Ortega. Ortega said there are a couple of important points to charting the course of Ex Con as an organization. Chedester said there needs to be a committee from the board to move this along. There is an upcoming workshop for members and member employees to zero in on where things need to go. Director Jim Nickel said he didn’t have time to fully participate and Houk said CCC has some concerns based on the memo and O’Banion appointed Houk to the committee. That’ll teach ‘em.

I had to step out of the meeting for a bit and when I returned it was the end of the subsidence discussion. Nickel said he didn’t think thing could be better even with a law suit. Someone else said the cooperation has been productive. Good to hear.

David Cory is a farmer and an attorney. He runs herd on the Regional Board and other wild eyed governmental things. Cory said yesterday the Regional Board adopted the CV Salts and it was Executive Officer Pamela Creedon’s last day. Patrick Pulupa will be XO from here on out. He said Pulupa is a man you want on your side. He’s smart, energetic and can influence the board. So far it appears he’ll continue Creedon’s work. And I think Cory would approve of that. Nitrates have replaced salt as the horrible chemical. This is how the state government seems to think: Salt will poison the land but nitrates will be a wedge between the taxpayers and their wallets – focus on nitrates. Northern California rice country and Westlands WD both have lower nitrate problems so that could impact the Irritated Lands Program regulation and reporting. Summer nitrogen reports have to be written by the coalitions and submitted with anonymous parcel numbers. This will be made public but you won’t be able to tell where the property is or who owns it. That’s a good thing. O’Banion is a dairyman and dairies are one of the most regulated facets of agriculture and he felt some of the requirements may not be as harsh as it could be.

Chedester gave the legislative report. Assemblywoman Laura Friedman d-Glendale wrote a bill to give California’s Secretary of Resources authority to declare a river wild and scenic if somebody wants to build a dam on it; like Shasta Dam expansion flooding a creek or Temp Flat filling up a canyon. There were enough amendments extracted to take some of the deadly nectar from it. Next, in California mutual water companies are not considered nonprofit, but they can be under federal law. Ortega said if a water company were to accept a grant it could be taxed on this. It can also be taxed on interested accrued from grant money. SB 623

McClure gave the attorney’s report saying there has been a lawsuit between Friant and the Bureau. Friant sued because it received zero allocations and believes it is owed. The court is asking if this is a property right from a contract or a contract right or a property right independent of a contract. McClure said the hearing will be in the fall. There could be a motion to dismiss. Ex Con isn’t a party but will submit an amicus brief this summer. The reason Friant didn’t get water was the US Bureau of Reclamation could get water it owes Ex Con through the Delta and gave Ex Con SJR water. That water would have gone to Friant. McClure said the court leans towards contract rights and the Bureau holds the water right. This trial is being held in the Washington DC court of claims. It will move out here for oral arguments since some of the folks from back east have yet to see Yosemite in person.

The four entities managers’ reports were next. Wiersma said SLCC is looking for ditch tenders to hire. White said May was lighter than average but cotton is coming on soon. He said if CCID goes to the wells it will be this month. Bryant said FCWD also had a light month of May. He’s upgrading SCADA. He’s concerned about the increase in aquatic weeds on the earth lined portion of the Delta Mendota Canal. He met with the DMC staff and asked them to get an NPDS permit because he’s spending way too much time on problems related to weeds. He asked the other Ex Conners to support his position with some that’a boys. There is a problem with moss and other crap clogging up intakes and it’s just bad news.

Under information Chedester said there will be a special meeting for the SGMA item under deadline. This can be by telephone.

The meeting then went to closed session for eight items.

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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