The San Luis Delta Mendota Water Authority held its board of directors meeting on Thursday, September 16, 2021, at its Los Banos headquarters and on Zoom telephone. The meeting was scheduled to begin at 9:30 and it did. Chairman Cannon Michael called things to order and attorney Becca Ackroyd took role. The agenda had an addition. Ackroyd said it would be item 9 and that is a contract for some work on the Jones Pumping Plant I believe. After the repairs began it was discovered there was a need for more work. The board agreed to add this to the agenda.
The consent calendar was next and it was approved. Ackroyd and Frances Mizuno reported on the efforts to move water through the Delta for exports. The board was asked to approve a project modification to extend the potential transfer window and adopt the corresponding environmental document addendums. Aqua Alliance, an NGO and the South and Central Delta Water Agencies opposed this extension and believe a new set of environmental documents need to be drawn up and approved before continuing. Ackroyd said the proponents believe the documents are good to go as is and the board agreed in the form of a resolution stating so.
After COO Pablo Arroyave explained things the board agreed to pay Kingsbury Inc. up to $233,160 to fix a thrust collar and bearing on something. This was the last minute item added at the beginning of the meeting.
The board also heard about the need to adopt another resolution authorizing an MOU for the use of a supplement mitigation project fund for the Grasslands Basin Drainage. Engineer Joe McGahan explained the ins and outs. For Grasslands to get this chunk of change the board had to approve the resolution and it did.
J. Scott Petersen gave the legislation report and the water resources committee recommending support on three federal bills pending in the House. There is another Senate bill that would be supportable if amended. The bills were HR 3023, 4284 and 4915 and S 2334. The board said yes.
Arroyave gave the board a look at the Dam Raise on the San Luis Reservoir, if I understood correctly. The agenda said an MOU is needed. Westlands’ Tom Birmingham asked if there was enough information to make the decision on a cost share with the US Bureau of Reclamation. He said the 50/50 split has yet to define the non-reimbursable amount, such as the public benefit portion of the project. SLDMWA CEO Federico Barajas said the Bureau hasn’t given an ultimate confirmation on what is reimbursable and non-reimbursable.
Arroyave posted five questions to be submitted to the Bureau. The discussion dived into the deep end of federal project financing minutia but the goal is to find answers to when and how much money this project will cost SLDM. Here’s two short questions – Will selection of an operational configuration in the Feasibility Report Addendum limit adjustments in the future? When does Reclamation ultimately affirm the non-reimbursable federal benefits, is this completed as a part of the final cost allocation or earlier? All clear?
San Luis Water District Director Bill Diedrich said while he’s not an expert in this area he knows he needs as much South of the Delta storage as he can afford. He said if going 50/50 with the Bureau is going to cost as much as if SLDMWA went on its own then who needs the federal funding? Santa Clara Valley WD Director Gary Kremen said he/him agrees with Birmingham and Diedrich.
Barajas said fixing the subsidence problem on the Delta Mendota Canal looks like it will require a cooperative agreement with the Bureau. Arroyave said by the end of next year the design should be completed. It looks like SLDM will have to cough up $4.3 million to make the B.F. Sisk Dam higher. The board agreed to go further with the project.
There was a settlement agreement between Panoche WD and SLDM. PWD had to pay more than one million dollars for back O&M costs and interest. The board agreed to pay the members their share of these funds.
One of the big electric power uses in California is moving the amazing amount of water across the state. In order to get the power to where it is needed transmission lines and facilities are built. They don’t come cheap and some new lines are needed. Mizuno gave the board an update on the financing components. She spoke with the investors and consultants and worked to get answers the board raised at a workshop on this subject that took place last month. The board will have to make some decisions to get the project up and running. It looks like it is cheaper to build new, dedicated lines than continue to pay the current provider’s spiraling Cal ISO cost increases. If I understood SLDM could save more than $150 million.
One option is for SLDM to enter into a financing agreement with the Bureau and the Western Area Power Association. A bond can be issued. SLDM can reserve transmission capacity and lease out the extra amount and save some money that way. I think I heard the lease terms would include 10 and 30-year lengths. Mizuno strongly suggested retaining some expert consulting to make all this work.
Financing expert Laura Carpenter spoke about the bond financing for $282 million over a 30-year period. Some additional funds can be borrowed against future income during construction so SLDM won’t have any out of pocket until the project is up and running and generating savings and income. In order to lease the capacity to private businesses like solar power generators the bond will be taxable. If it was nontaxable capacity would be limited to government agencies.
After an exhaustive analysis Mizuno determined the best course for SLDM is to work with a willing investor (there is one standing by) and self-finance the project. This investor wants to pull the trigger in early 2022. Birmingham had made many comments and asked questions throughout the presentation and thanked staff and the consultants for the hard work that went into this analysis. The board agreed and approved the financing. Mizuno answered a question for me – she retired a while back but evidently she wanted to see this through before she walks on to a new chapter in her life. What an example of character.
Petersen, Dennis Cardoza and Kristin Olsen gave state and federal reports. Petersen reported Ellaine Trevino, formally with the Almond Alliance was nominated to the international ag trade position in the USDA and that is good news.
Petersen reported congress once again missed setting a budget it can live with and have a continuing resolution. Why are we cheated by government accounting over and over? Now they want to spend five or six trillion dollars. They didn’t earn it, in fact no one has yet earned it. But it is our money, the government has and will take it from our pockets and it gives some of it back and many of the elected officials not only pose like they’re benevolent saints of compassion but want us to plant a big thank you kiss on their rosy, red butts. Senator Joe Manchin was mentioned. Petersen said he wrote an op ed stating the democrats need to hit pause on this crazy mess.
Consultant Cardoza reported it is akin to a rugby scrum in Washington DC right now. Cardoza said there centrist Dems in both the Senate and House who agree with Manchin. He mentioned Valley Congressman Jim Costa as among them. There are severe concerns about retroactive taxation being included in upcoming legislation. This will target inheritance tax which is particularly onerous burden for ag families. One might inherit a plot of land worth a million dollars and have to come up with an inheritance tax so large you have to sell the land to pay for it. Cardoza said in 40-years he’s never seen such a spending spree taking place in leadership and behind closed doors in every committee. He said it is an ugly time in Washington right now.
Olsen said both houses in Sacramento closed the session before 9pm on the last day. The margin of victory for Governor Gavin Newsom was large. Usually the more controversial issues are taken up in off election years, which is this year but the recall tamped much of that down. So, will the extra nasty come out next year, an election year? SB559, a good bill by state Senator Melissa Hurtado was shelved for a year. Too many busy bodies got ahold of it and it’s better to wait until next year to get the state to give the taxpayers some of their money back to fix the state’s elderly water infrastructure.
Olsen said the Racial Equity Resolution hasn’t made it to a State Board agenda yet. Good, may it never get there. The State Board is not the arena for such radical, extremist messing around. She said there is a growing mood of discontent amongst some legislators about the lack of water infrastructure in the new budget with “water” money going to climate change. We’ll see if anything comes of that. There is a proposal to make the current voluntary 15 percent reduction in water use mandatory.
Barajas said the emergency provisions in the Brown Act expires at the end of this month but as Olsen had reported it may be extended due to the cooties from a lab somewhere else. Don’t want to be racist somehow by writing what country the lab was located in. By the way, is anyone else receiving a slew of emails praising life in Communist China while claiming western news sources are biased? I get a couple a day. Anyway, everyone wants to meet in person but SLDM wants to also be caring towards those who have legitimate concerns with public meetings and communicable disease.
Barajas congratulated Petersen for being selected to the ag leadership program. Birmingham said one of the features of that program is to explain how ag and congress work together and Petersen might end up teaching that class. Good for him. It’s not just anyone who is selected to that competitive program.
Arroyave asked Mizuno to give an update on water transfers. She said the Stockton East transfer has been completed and the Yuba water should be coming through. When she knows more she’ll update everyone. She said since next year could be dry she recommends starting transfer discussions now.
Arroyave said the Jones Plant unit one repairs should be completed next month. The common aquarium plant, hyacinth, has made it into the wild and it is a major problem. Even the Mendota pool is swamped with the stuff. It grows thick and gums up flows, uses water and creates a major mess in equipment.
Tom Boardman gave his always excellent report saying there is some rain expected in Northern California next week and that could help in many ways; including operations at Shasta and Folsom. He said the monthly average Delta outflows are steady, if I understood and there is some exports taking place.
Storage in San Luis Reservoir is shared by both state and federal water systems. The federal Central Valley Project amount has been low and to meet demands some storage from the state side was borrowed and must be returned before the end of the year.
Diedrich reported the end of November ACWA conference will be part live and part online. ACWA is working on getting good leadership and he thanked everyone for those efforts. There was no San Joaquin Valley Water Blueprint update today. There were no board member reports.
The meeting then went into closed session at 12:18pm. So it was a longer than usual meeting. There was the transmission lines discussion and the bond funding discussion so when folks are talking about spending hundreds of millions of tax dollars things do slow down. At least they should like today. So that was that for this month.
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SAN LUIS & DELTA-MENDOTA WATER AUTHORITY was established in January of 1992 and consists of approximately 2,100,000 acres of 29 federal and exchange water service contractors within the western San Joaquin Valley, San Benito and Santa Clara counties. The governing body of the Authority consists of a 19-member Board of Directors classified into five divisions with directors selected from within each division. The main conveyance is the Delta-Mendota Canal that delivers approximately 3,000,000-acre feet of water within the Authority service area. Of this amount, 2,500,000-acre feet are delivered to highly productive agricultural lands, 150,000 to 200,000-acre feet for municipal and industrial uses, and between 250,000 to 300,000 acre-feet are delivered to wildlife refuges for habitat enhancement and restoration.
Board – Chairman: Cannon Michael,
Staff – Executive Director: Federico Barajas, COO: Pablo Arroyave, Attorney: Becca Ackroyd, J. Scott Pedersen: Director of Water Policy