Thursday, May 14, Oakdale Irrigation District (OID) General Manager Steve Knell told a group of local farmers he was more worried about OID’s financial situation than he was about the drought. Knell said OID lost $7 million last year and would lose $10 million this year. “Those losses will be made up with water sales,” he added.
Knell is a staunch advocate of water sales, euphemistically known as “water transfers.” Over the past ten years, OID has sold nearly 400,000 acre feet of water outside the region.
Earlier this year, the district was on track to sell another $3.9 million worth of water to distant buyers. The sale was quashed by Oakdale farmer Louis Brichetto when Brichetto’s attorneys claimed the sale failed to address requirements of the California Environmental Quality Act.
Brichetto said he is opposed to water sales outside the district on principle. “It doesn’t make sense to sell your greatest asset,” he said. “Water is a farmer’s greatest asset.”
Brichetto and others are among a growing group of farmers who think local irrigation rates are too low. On April 21, when OID Board members were discussing a surcharge for the $27 per acre irrigation rate, farmer Brian Lemons said the surcharge was far too little.
“A $6 surcharge is a laughable amount,” Lemons said. “It’s time for us water customers to pony up and pay what water is really worth, if we’re concerned about the longevity of the district.”
Farmers within the district would have to approve a rate increase, and apparently most prefer current rates, which are actually below the cost of delivery. When Trinitas Partners was annexed into the district in 2013, it agreed to buy water for $55 an acre foot―a far greater figure than senior members of the district had ever paid.
While that figure seemed ludicrously low to anyone who follows water rates throughout the state, it has given Trinitas leverage with OID management. Knell claims delivering water to Trinitas ahead of senior members of the district makes sense because it helps OID subsidize district farmers. “You’re getting your water for free,” he told district farmers last Thursday.
For many, this kind of water math looks like a shell and pea game. Angry farmers at last Thursday’s meeting claimed Knell and the OID had violated their trust when proposing to deliver water to newcomer Trinitas while cutting their own allotments.
Even the state’s Department of Water Resources (DWR) has become wary of OID’s claims about “surplus” water. Earlier in the year, the DWR sent a “Water Transfer White Paper” to OID warning it against overestimating water supplies so that it could sell water.
Though Steve Knell complained about the restrictions, imagine the scenario if OID had managed to proceed with this year’s sale. Had it not been for Louis Brichetto’s threat of a lawsuit, OID would have even less water and all those angry farmers would be even angrier.
While some OID farmers are still fighting to maintain their low water rates, others are realizing that as water becomes scarcer throughout the state, the price is rising exponentially. Even in their own district, newcomer Trinitas seems to be receiving favorable treatment solely because it has offered to pay more than senior members of the district.
Ordinarily, farmers are among the shrewdest businessmen anywhere. Today, too many in the Oakdale Irrigation District seem to have forgotten the old businessman’s adage that proclaims, “There’s no such thing as a free lunch.” As more of their water goes to the highest bidder, they may have to learn the hard way.