The Friant Water Authority met at the World Ag Expo facility in Tulare on Thursday, May 24, 2018. Chairman Kent Stephens called the meeting to order at 9:00 am. After no one had any public comments Karen Thesing, ACWA JPIA presented FWA with a check for $38,000 because they’ve been so safe. It was one of those giant, cardboard checks. Which by the way can be cashed or so I’ve been told by an actual banker. Good for them. Right after that CPA Joe Mastro gave the audit report and everything seemed in order to me.
Chief Financial Officer Don Willard started his report by saying he won’t use up the entire 10-minutes allotted him. He updated the board on the upcoming budget. FWA operates on a fiscal year and not a calendar year. So, it’s almost New Years Eve.
Jeff Payne, Director of Water Policy gave the board an update on Temperance Flat and related subjects. He said the bottom line is the California Water Commission has limited the biggest amount Temperance Flat can receive from Prop One grant money to $171 million. The Temp Flat application was for $1.3 billion. If the investors in Temperance Flat were to accept this money it would have to contract with DWR and/or Fish & Wildlife to ensure the state would get its share of water.
Friant CEO Jason Phillips said the assessments or “strings” attached by CWC would cost Temp Flat more than the $171 million offered. Payne said the Investor Group has begun looking at how to bring about the project without public funding. A computer model is being run and will be ready before the final CWC announcement in July. This model will tell investors who much needs to be raised, how much it will costs and how much water will be available. This will give the investors the information needed to make sound decisions.
Phillips said the executive committee met and discussed the strings attached and even if the public money was accepted the investors would still be paying more than 96 percent of the costs. It’s doubtful investors would want the state to call the shots when it’s only contributing four percent at beast. Another string would be if the DWR had a blowout in the Delta and couldn’t provide supplies to wetlands habitat Temperance Flat would have to give up 250,000 a/f for free. Phillips covered other deals like flood control and recreation.
Next Phillips said FWA, Westlands Water District and City of Fresno amongst others are members of the San Joaquin Valley Water Infrastructure Authority. The SJVWIA is the Prop One applicant. There has been a good deal of talk about how the SJVWIA operates after the Prop One efforts wind down in July. It is very important Temperance Flat be a Valley wide effort and conducted in unity. The SJVWIA and others have discussed limiting any further Temperance Flat activities after July to the Investors Group. This is not to avoid working with the counties and cities of the Valley but rather to coordinate with them. There is a need to form a new group right away. FWA, the Exchange Contractors, San Luis Delta Mendota Water Authority and Westlands WD met earlier this week and endorse this. Efforts with the US Bureau of Reclamation, dealings with congress and the media would be solely the responsibility of this new entity. Stephens got a motion and second and announced it passed. That stopped things and the voice vote then taken affirmed his earlier announcement. Steve Collup, Arvin Edison said there wasn’t a prayer to start the meeting and things have been going down hill since then. I was wondering about that myself. Stephens thanked Payne and Collup for all the heavy lifting that took place to get the ball this far down the road. Collup brought up early funding. Phillips said there is $8 million available from the CWC if matching funds are provided. He didn’t believe that would be a good idea since the Investors don’t want the strings and the SJVWIA doesn’t have $8 million, it’s probably a moot point. Phillips said there will immediate announcements and he hopes the directors will help promote this.
Payne then spoke on the NASA Airborne Snow Observatory. This proved very popular at the recent ACWA conference. There is additional funding to help keep this going and even DWR likes it.
USBR and Legislation
Rufino Gonzalez gave the USBR report and Michael Jackson reported title transfer on the Friant Kern Canal is going well and that’s about all he had to say.
Alex Biering have her legislative report by telephone and said many of the state bills listed in the agenda have been placed in the suspense file which means the authors don’t want to deal with them. They may or may not die. On the federal side S2800 was introduced in May to further Army Corps of Engineers needs but may be continually amended until it becomes the big water bill we’ve been hearing about. The Farm Bill died in the House over emigration disputes. She said there is legislation in California designed to help with safe drinking water for everyone. SB 623 sounds good on the surface. Revenue would be generated by water fees and a tax on fertilizer to raise $100 million annually. The water fee would be based on the amount of water used in urban areas. This developed from the State Board sending letters to growers in Tulare County and Salinas Valley. This bill will protect growers and well owners from the State Board for 15 years. This bill has been supported by both ag and enviro groups. ACWA opposed this because it is an urban rate increase without control and harms Prop 218 elections. Stephens asked how 15-years was arrived at and how can Prop 218 be trumped. Biering said she wasn’t sure how 15 years was picked. Alyssa Houtby with Citrus Mutual was on hand to answer the 15-year question. She said that number was picked because it gives enough time for ag to get its act together before the enviros can get their teeth into it. The board voted to support SB 623 although one district did so under protest.
The next bill was AB 2649, the groundwater recharge benefit bill by Assemblyman Joaquin Arambula. It had a couple of flaws depending on where you live. It could reduce exports from north of the Delta and this upset Southern California. Also, there has been no studies to show how this will impact statewide but in the Sacramento Valley there is an estimated groundwater storage capacity for millions of additional acre feet. For that reason, the recommendation is to not support. But the bill is in suspense. Phillips added there are communities in the San Joaquin Valley that rely on recharge so that could be a different view. He said the CVP is based on moving water from the Sacramento Valley to the San Joaquin Valley. If recharge in the Sacramento Valley were to shoot up it could harm CVP supplies. Mark Larsen, GM Kaweah Delta WCD said there is concern from districts that have been recharging would be subjected to additional permitting if the bill passed. Stephens suggested Friant direct its attorneys and staff to draft up some language that works for everyone and help Arambula by offering it as an amendment. Also, Houtby announced California Citrus Mutual has endorsed the November water bond and has contributed money towards this cause.
O&M and Other Matters
Doug DeFlitch, COO gave his report saying staff would like to send a letter to the USBR from FWA detailing the costs of transferring title of the Friant Kern Canal from FWA’s point of view. Bill Stretch, Fresno ID said engineer Dennis Keller sent FWA a letter with his concerns and FID shared many of those concerns. He asked if Friant responded to Keller. Attorney Don Davis said instead of responding individually Friant would like to gather them together as it has concerns as well. He said finding out the Bureau’s response would be the first step. As for the subsided section of the Friant Kern Canal DeFlitch recommended the board to enter into a deal with the Bureau for $5 million under the cost share part of the San Joaquin River Restoration Program and a cost share of $2.2 million available from the WIIN Act. The board agreed this would be a good source for financial help in fixing the canal. Also known as capacity correction.
Law & Order
Attorney Davis wanted to talk about insurance and had a power point presentation with a graphic of the earth. He said his staff prepared it for him and felt the entire world represented the gravitas of the subject. He said after review it’s been determined that so far there hasn’t been a FWA claim uncovered. He said Friant insures with ACWA JPIA for property and liability to third parties. The property policy is for $500 million and the liability for $60 million. There is also $560 million for terrorism coverage. As far as earthquakes go in California you can’t get much better than the east side of the San Joaquin Valley. But there is insurance for that event should it occur but $2.5 million may not be enough. There is a thing such as pollution insurance should there be a leak and the water cause a problem. It think that category as far as Friant is concerned my be misnamed somewhat. Should Friant water leak out of the canal and poison something it will take more than insurance to fix it.
The next item Davis spoke on was procurement policy. The traditional public works design-bid-build method may not be the only option or even the best option for Friant. He went over the legal implications and disadvantages to design-bid-build. For instance; you have to limited ability to reject the lowest bidder. The design-build option may be a better fit for Friant for projects over $1 million. There are usually less change orders and a maximum price can be established. But this could require special legislation to allow this could be completely modeled after the Santa Clara Valley WD’s bill. Davis believes a bill could be passed by 2019. He asked the board to let him sick Mike Villines on getting the bill written and passed. The board told to get after it.
The CEO Speaks
Next Phillips gave his report. He said the San Luis Delta Mendota’s interim GM Jon Rubin went to Westlands WD to be an attorney. He said Consultant Martin Roush is helping them find a new GM and Roush worked with Friant. There will be a workshop on the Pacheco Reservoir Storage project and he’d like Friant to be represented there. This will be on June 4th at Los Banos. There were also some good meetings last week with Bureau Commissioner Lisa Berman in Sacramento to talk about CVP matters and what contractors would like in a replacement for retiring Regional Director David Murillo. Phillips said at this meeting Directors Clifford Loeffler and Kole Upton did a great job in demonstrating to Berman what impact the Bureau has on a family farm. The icing on that cake was to talk about what the Bureau is doing in regards to Friant water rights at the State Board and how harmful this is. Berman said she’s very interested in getting big things done in California in the next two years. Phillips said former City of Fresno Public Utilities director Tommy Esqueda is now at CSU Fresno as a Vice President of Water Resources and Sustainability. Phillips also said recapturing lost water to over regulation is a Friant goal. He is part of a group that meets in Sacramento every month or so to get better science in the Delta. He said this is an opportunity to show not every drop of water sent to the fish isn’t helping. Showing this disconnect could be very helpful in getting the prioritizing resources and helping fish and farmers.
Loeffler prayed over lunch and Collup said the quality of the board packet at FWA is probably the best he’s seen and sets the bar. The meeting then went into closed session.
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FRIANT WATER AUTHORITY
The Friant Water Authority is a Joint Powers Agreement with 11 districts to operate and maintain the Friant Division of the Central Valley Project. Water from the San Joaquin River is diverted at Friant Dam at Millerton Lake to the Madera/Chowchilla Canal to the north and the Friant/Kern Canal to the south. More than one million acres of mostly family farms and numerous communities get their surface supplies from the Friant Division. Staff: CEO Jason Phillips, COO Doug DeFlitch, Superintendent Chris Hickernell and Attorney Don Davis.