When the big-time investors from the Bay Area showed up in Oakdale saying they were ready to become farmers, the city swooned. Oakdale Irrigation District (OID) was entranced by their offer to build infrastructure for water deliveries and offered them bargain-basement water rates and a sweet annexation deal, even while it had previously denied many long-term farmers’ applications.
When a few local farmers suggested Trinitas Partners was yet another “turn and burn” operation that was interested only in short-term profits, spokesman Ryan Paton replied:
“These are long-term investments for us,” Paton said. “We’re not short-termers. We’re not flippers. Nothing we have is for sale.”
This was back in 2013, when Trinitas was greeted by many as a savior. Its multi-million dollar annexation fees and water payments were seen as a way out of OID’s budget shortfalls, which OID board member Frank Clark said at the time were due to decreased revenues from power customers and the inability to sell water outside the district.
Outside water sales have since become yet another drain on OID finances. Not only has the district found them hard to accomplish, but its defense of the sales against claims of failure to follow requirements of the California Environmental Quality Act (CEQA) has cost OID hundreds of thousands of dollars in legal fees.
Meanwhile, annexing Trinitas never did produce the revenue OID management had anticipated, in part because water deliveries to Trinitas were at times thwarted by farmers who caught OID in violation of contract agreements with other district members. Trinitas’ 7300 acres remained largely dependent on groundwater. The district carried the annexation fees at low interest rates.
Some local farmers were especially incensed when Trinitas was annexed because they had applied for inclusion in the district and offered to pay over double for water than the Trinitas price. The district’s position had been that it lacked proper infrastructure to deliver water outside district boundaries.
OID’s water problems were compounded when California state government implemented the Sustainable Groundwater Management Act in 2014. With hundreds of new wells in the foothills east of Oakdale, declining groundwater levels became a crisis when more and more wells throughout the region began running dry.
With its surpluses in allocated surface water, many of the district’s water users thought OID management would become more receptive to selling water locally and helping recharge the stressed aquifers. Nonetheless, the district has persisted in trying to send local water south, especially to Westlands Water District.
Last year, with little public notice, Trinitas Partners sold its thousands of acres of almond orchards to a company in Canada. According to contract terms specified by OID, the balances owed on annexation fees of over $18 million came due at the time of the sale, but as of last week, still hadn’t been collected.
In an odd coincidence, another sale closed just recently. The owner of the property that changed hands, Wendell Naraghi, was pressed immediately for the annexation fees as specified in his contract with OID.
From the very beginning, Trinitas Partners dictated highly favorable terms to an irrigation district that would seem to have had the upper hand in any negotiation involving water. With OID still seeking water sales and lacking the infrastructure to deliver more surface water to a region suffering from declining aquifers, the decision to carry an $18 million note seems more than merely curious, especially given its demands for payment from another party. But then, maybe it’s just another case of city slickers getting the best of OID’s country management. Wouldn’t be the first time.
Damon Woods says
Hmm, well, then OID should be filing suit against Trinitas for breach of contract.
Eric Caine says
There’s a passage in the contract that enables OID to allow Trinitas a way out of the payoff. Guess OID Board decided to carry the note.
Mike birch says
Exactly right conclusion. Total film flam.