Revisions Sought in Water-Sales Bill : Drought: Gov. Wilson asks for more time to amend the measure, which would allow individual farmers to sell their supplies to cities.

With opposition from rural water districts continuing to mount, Gov. Pete Wilson on Tuesday temporarily derailed a controversial bill that would allow individual farmers to sell their water to drought-stricken cities hundreds of miles away.

After a private meeting with Wilson, Assemblyman Richard Katz (D-Sylmar) asked the Senate Agriculture and Water Resources Committee to postpone its final vote on the measure for at least a month to give him time to try to work out compromises with rural interests and the governor’s office.

Water Resources Director David Kennedy told the committee the governor had expressed “serious concerns” with a number of provisions in the bill, especially those that would remove the state as a middleman in bargainings between water-rich farmers and water-short cities.

The bill would allow water sales to be negotiated directly between interested buyers--most likely cities or urban water districts--and individual farmers. To encourage this free-market approach to water sales, the measure would prevent local water districts from interfering with the negotiations or blocking a sale.

Katz, the author of the legislation, contended that water districts have been the biggest hindrance to such transactions because they often have local rules that prohibit water from being transferred outside of their boundaries.

Water district officials have argued it is important that they retain the power to veto sales to ensure that enough water stays in the district so the local economy is not threatened.

Bill Livingstone, Wilson’s press secretary, said it is this argument especially that has struck a chord with the governor.

“You could just offer water for sale and let the big cities take all of the water out of the valley and that would have tremendous consequences on the valley,” Livingstone said.

Wilson’s move to stall Katz’s bill came just as the legislation was picking up momentum after a surprisingly strong showing in the Assembly. Urban lawmakers from Northern and Southern California joined forces in the Assembly to overwhelm a rural minority and passed the measure by a wide margin. The margin was not wide enough, however, to override a gubernatorial veto.

Rural water interests caught by surprise by the Assembly vote prepared for an all-out fight in the Senate. Some irrigation districts have hired high-powered lobbyists while others have tried to pressure the Administration to join them in opposition.

The issue is particularly delicate for Wilson, who has always had strong political support from farm areas but has relied on a large urban following in Southern California to win statewide elections.

Wilson, who directed Kennedy to organize an emergency water bank this year to help drought-stricken areas, has also been an advocate of voluntary water transfers. In raising questions about Katz’s bill, he has had to make it clear that he was not opposing transfers, but simply expressing concern that the legislation does not offer enough controls.

By making it easier for farmers to sell their water, Katz said he is in effect providing a new source of water for urban areas and saving billions of dollars that might otherwise have to be invested in the construction of new water facilities.

With farmers using 80% of the water captured in the state for consumptive use, he said, they need only to sell a small portion of that water to ease shortages in urban areas.

But rural water interests said Tuesday they feared the legislation would create a bidding war, which would encourage more and more farmers to leave their land fallow in order to sell their water to cities with deep pockets. As more farming area goes out of production, they said, local economies will wither and eventually die.

“I think there is a dangerous potential that this bill will be perceived as the panacea to California’s water problems, and it isn’t,” said John Fraser, executive director of the Assn. of California Water Agencies.