Key Deal Near on Shift of Water to Cities From Farms

In a move that could influence state and federal policy for decades, San Diego County and the Imperial Valley announced a tentative multibillion-dollar deal Thursday to shift water from some farms to thirsty urban and suburban areas.

The deal could provide the county with enough water for up to 2.4 million people for less money than it has been paying the mighty Metropolitan Water District of Southern California.

The arrangement will be sealed once the county reaches an agreement with the MWD over the use of its 242-mile Colorado Aqueduct to bring the water from the Colorado River. That could come as early as this weekend as negotiators, goaded by Gov. Pete Wilson, return to the bargaining table--although details that are still on the table could derail or delay finalization.

MWD officials have retreated significantly, albeit reluctantly, from earlier positions on the price of the water delivery.

If San Diego County and the MWD cannot reach an agreement, key state legislators are set to push legislation that would get the deal done.

State Sen. David G. Kelley (R-Idyllwild) hailed the plan as a model for the state and nation: a way to shift water from agricultural areas to cities without victimizing either side. The state’s perpetual conundrum is that the agricultural areas have the water, but the cities have the people.

For the first time, Kelley said, Southern California is trying to solve its problems within its own region rather than reaching out to Northern California, the Sierra Nevada or the Central Valley--solutions that are becoming politically untenable.

Although water disputes tend to be measured in decades, all three major parties--the MWD, the Imperial Irrigation District and the San Diego County Water Authority--seem motivated to make a deal quickly for at least three key reasons:

* To forestall U.S. Interior Secretary Bruce Babbitt from cutting back on California’s draw from the Colorado River--already 20% over its limit. Babbitt is set to give a key speech next week in Las Vegas on the subject.

* To keep the state Legislature from getting involved and possibly setting terms for the water sales that all three parties might find unpalatable.

* To keep together the fragile alliance that has been trying to find a solution to the pollution and saltwater problem in the San Francisco/Sacramento-San Joaquin Delta, a waterway that is crucial to the state’s water supply and economic health.

One suggestion has been to build a canal around the delta to keep Northern California water flowing to Southern California. But environmentalists and other Northern California pressure groups are liable to bolt from the alliance and fight a “peripheral canal” idea unless they are convinced that Southern California is serious about finding better ways to solve its water shortages than “stealing” the north’s water. In 1982, state voters rejected a peripheral canal measure.

At the heart of Thursday’s deal is San Diego’s decades-old drive for water independence and its continuing anger at having been forced to join the MWD during World War II. Bereft of ground water, San Diego is the MWD’s biggest customer.

A unique convergence of state and national politics--and the fact that the governor is a former San Diego mayor--has given that county leverage to wrench a deal from the MWD to use its aqueduct. Significantly, one of the county’s negotiators with the MWD is San Diego building industry executive Michael Madigan, a former Wilson staffer and still very much a Wilson insider.

An exultant San Diego Mayor Susan Golding called the deal with the Imperial Valley “the triple crown of the water industry” because it will provide a dependable source of water for the state’s second-largest city, help speed the solution to the bay delta problems and ease pressure on the Colorado River.

“What this is about is economic independence for our two communities [San Diego County and Imperial Valley] rather than being an appendage of Los Angeles and Metropolitan,” said state Sen. Steve Peace (D-El Cajon).

In a turn of phrase sure to resonate to local political ears, Peace railed at “those guys in Los Angeles,” a reference to the MWD. He compared the agency to a man “too dumb to know what is in his best interests.”

The MWD--water wholesaler to 16 million residents in six counties--has insisted that San Diego is attempting to shirk its share of the overall MWD water delivery system to the detriment of other Southern California water users.

For months, the MWD has insisted on a wheeling rate--a charge to deliver Imperial County water to San Diego via the aqueduct--of about $262 per acre-foot (Thursday’s deal is for up to 300,000 acre-feet). The MWD has now softened its position and is willing to accept $70 to $120 per acre-foot. (An acre-foot is enough water for two families of four for a year.)

San Diego County believes that the proper rate is $68. There are also differences between the two sides involving storage and use of the aqueduct during flood periods.

Also, the loss in revenues from San Diego to the MWD could force water users in other counties to pay higher rates.

Imperial County, with only 141,500 residents, has an annual entitlement of 3.3 million acre-feet of water from the Colorado River. If put to nonagricultural uses, that amount would accommodate virtually all of Southern California.

The San Diego-Imperial Valley deal would involve a graduated scale of sales over a period of years that eventually will reach at least 130,000 acre-feet a year and possibly as much as 300,000 acre-feet, depending on the needs of both parties. The pricing schedule is set so that the cost would always be lower than what San Diego would pay the MWD for an equal amount of water.

The deal, which will require one more vote each by the governing boards of the San Diego and Imperial Valley agencies, would last 45 years, with a possible extension for 30 years. San Diego County would buy the water, but the water rights would remain with Imperial Valley.

The money paid by the San Diego agency to the Imperial Valley would be used for conservation measures and equipment to allow farmers to reduce their use of water. Michael Clinton, general manager of the Imperial Irrigation District, said there would be no profit available for at least two decades, until such measures are fully paid for.

For 300,000 acre-feet, San Diego County would pay about $110 million to the Imperial district.

San Diego’s historic gripe with the MWD--restated at Thursday’s announcement--is that it could face a 50% cutback during a drought because it was not an original MWD member, like Los Angeles. In the 1991 drought, San Diego County suffered a severe cutback, particularly to its billion-dollar agricultural economy.

At a hearing last month, the judge in a wheeling-rate case filed by the MWD appeared to some observers to look askance at the MWD’s insistence that the cost of bringing water from Northern California through the State Water Project can be included in a wheeling rate for transfers from the Colorado River. Of the proposed $262 wheeling rate, about half would be to cover State Water Project costs.

Within days of that hearing, the MWD and San Diego returned to the bargaining table. A decision in the case could come next month.

David Kennedy, director of the state Department of Water Resources, said a San Diego-Imperial Valley deal is key to convincing Babbitt that California is learning to be more conservative in its water use and thus should be spared a drastic cut from the Colorado River.