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HomeMy WebLinkAbout07/16/86 AGENDA WATER BOARD - CITY OF BAKERSFIELD WEDNESDAY, JULY 16, 1986 12:00 P.M. - NOON COMMUNITY SERVICES DEPARTMENT CONFERENCE ROOM Call meeting to order Roll call'- Board Members:~ Moore,~Chairman Ratty, Salvaggio 1. Approve minutes of~meeting~held May 14, 1986. 2. Scheduled public statements. 3. Correspondence: George' Nickel letter to 'Water.Board dated June 26, 1986 - refer t° Agenda Item'No. 6. 4. Proposed Laborde Annexation to City of Bakersfield Domestic Water service ~area. The area.comprises approximately 2200 acres. FOR BOARD ACTION and RECOMMENDATION TO CITY COUNCIL. 5. Status of water contract with the ' California Living MuSeum (C.A.L.M.). FOR BOARD INFORMATION. ~. 6. Presentation by George Nickel regarding the proposed "NICKEL PLAN" to bank and sell water to Metropolitan Water District of Los Angeles. FOR BOARD 'INFORMATION and DISCUSSION. 7. Staff comments. 8. Board comments. 9. Adjournment. WATER BOARD - CITY OF BAKERSFIELD WEDNESDAY, MAY 14, 1986 12:00 P.M. - NOON The meeting was called to order by Chairman Moore in the Community Services Department Conference Room. The secretary called the roll as follows: ~ Present: Moore (Chairman), Ratty Absent: Salvaggio The minutes of the regular meeting held March 5, 1986 were approved 'as presented. A letter from Mr. Scott Kuney, Attorney representing North Kern Water Storage District, 'was brought before the Board re- questing City join North Kern W.S.D. in terminating the Oilfield Discharge Agreement with Chevron U.S.A., Inc. ~ A presentation was made to the Board by Mr. Kuney, on behalf of North Kern W.S.D., giving reasons why the agreement should be terminated. Mr. Kuney recommended that the Board authorize the execution of a one-year termination notice. After further discussion, a motion was made by Dr. Ratty to approve the letter ~of termination and refer to .City Council for approval. The motion passed. Adjourned to Closed Session regarding potential litigation of water matters (per Government Code No. 54956.9.B(1)). The meeting re-opened to the public at l:57p.m. There were no staff comments. Mr. Moore requested that the Water Board go on record to re- commend to the City Council that it reaffirm the~ policy that the City of Bakersfield would not allow its Kern River water to be used outside of the San Joaquin Valley portion of Kern County. Also, Mr. Moore informed the Board that he was elected Chairman of the Kern County Water Agency Groundwater Storage Advisory Com- mittee, which will be conducting meetings to review and evaluate proposed groundwater storage programs in Kern County. The meeting adjourned at l:59p.m. C~ty of ~~ater Board Sharon Robison, Secretary City of Bakersfield Water Board 7///// ~ 27 ~ '26 ~ 2S ' S0 ~ 28 7 ;~::: ::::~ :::::::::::::~: :::::::::~::::::::: :::::~:::::::::::::: ~:::::::~;~: ~R ~E, :::::::::::::::::::: ~t.::::::::: ..... : :::.l:;~:::~: ~ ......... ~[~::,: ~:.~2~ :.~:.~:.:.~ ,.~:.:.~:.~:.:.~. AVe. = ' LANE ~s ~ ~ :::::::::::::::::::::::: ::~:......:~ ~45~5~ ~~ 22 I'AN~IA 23 24 ~ 19 ~ ~ ::~::~i~i'-~::'-~i~::':: :: "-"1''''' , ,, 27 26 25 30 29 28 27 26 34 3S 36 ~ 31 ~ 32 ~ 33 34 TAFT m o ~ 111~. 3 2 1 6 S 4 3 2 10 11 12 7 8 9 10 CITY o[ BAKERSFIELD DOMESTI~ WATER SYS~E~ ASIIE & FAIRIIAVEN SERVICE AREAS~-- PRESENT SERVI~E EFFEOTIVE DATE - 1/30/80 ~SOLUTION NO. 80-1 -- PEOPOSED SERVI~E AEEA ~NE~TION FAIRI~VEN ANNE~TION 3/15/82 FAIRIIAVEN ADDITION 8/29/8~ RESOLUTI08 ~O. SEGTIOR 21 & 22~ T.3OS. R.2~E. ~DITION~ 10-2-85 ~ATER BO~D ~ ~ CITY OF BAKERSFIELD DOMESTIC WATER SERVICE RANCHO LABORDE ANNEXATION ~ ~' LEGAL DESCRIPTION A Parcel of land situated in the County of Kern, State of California, being a portion of Sections 7, 8, 9, 18, 19, 20, 28, 29, 30, 31, and all of Section 17, Township 29 South, Range 27 East, ~4.D.B. & M., more particularly described as follows: Beginning at a point on the west line of said Section 29, said point lies at the south west quarter corner of said Section 29, said point being on the Domestic Water System Boundary of the City of Baker. sfield; Thence East along said north right of way line 10.00 feet to a pofnt on the west right of way line of Calloway Road (Co. Rd. No. 360); Thence along said west right of way line of Calloway Road, N.00o14'43"W., 1072.20 feet to a point on the westerly prolongation of the south line of parcel 1 of Parcel Map 3582 recorded in Book 16 of Parcel Maps at Page 70 in the Office of the Kern County Recorder; Thence S.89o46'49"E., 1322.58 feet to the southeast corner of Parcel 2 of said Parcel Map; ' Thence N.00°14'01"E., 220.36 feet t0 the southwest corner of Lot 22 of the Sales Map of Lands of Kern County Land Company filed August 20, 1890, in the Office of the Kern County Recorder; Thence N.00°12'49"E., 646~33 feet along west line of said lot 22; Thence S.89°48'11"E., 661.06 feet to a point on the east line of said lot 22; Thence N.00012'29"E., 711.23~:'feet to a point on the south right o~f way line of the Atchison Topeka and Santa Fe Railroad; Thence S.89°47'39"E., along said south railroad right of way line, 660.98 feet to a point on the north-south midsection line Of said Section 29; Thence N.00°13'20"E., along said midsection line, 2579.11 feet to the south right of way line of Rosedale Highway (State Route VI KER 58); Thence N.89°08'14"W., along a line parallel with and 30.00 feet distant as measured at ·right angles from the north line of said Section 29, 1808.41 feet; Thence N.00°29'05"E., 260.00 feet; Thence N.89°08"14"W., 150.00 feet to a point on the west line of parcel 1 of Parcel Map 6521 recorded in Book 30 of Parcel Maps at Page 6 in the Office of the Kern County Recorder; Thence.N.00°29'O5"E., along said west line, 1134.35 feet; Thence N.89°08'14"W., 720.77 feet to the west right Of way line of Calloway Drive (Co. Rd. No. 522); Thence on and along said west right of way the following courses: N.O0°29'O5"E., 1307.35 feet; thence N.00°28'15"E., 2670.32 feet; thence N.00°35'09"E., 5280.54 feet; thence N.00°37'47"E., 1977.55 feet to the intersection of said west right of way of Calloway Drive and the westerly prolongation of the north line of Parcel 3 of Parcel Map No. 3249 as filed in Parcel Map Book 16 at Page 7 in the Office of the Kern County Recorder; Thence S.88°54'39"E., on and along said northerly line and said westerly prolongation thereof, a distance of 1351.50 feet to the west line of the east half of the Southwest Quarter of Section 8, T.29S., R27E., M.D.M.; Thence~N.00°36'12"E., on and along said west line, a distance of 629.75 feet to the south right of Way of Norris Road; Thence S.88°54'40"E. on and along said south right of way line a distance of 360.69 feet to the west line of east 300 feet of the west ~ of the east ½ of the southwest ~ of said Section 8; Thence South along said west line, to a point on the south line of the north 145.00 feet of the southwest ¼ of said Section 8; Thence East along said south line 300.00 feet to a point on the east line of the west ½ of the east ½ Of the southwest ¼ of said Section 8; Thence North along said east line to ~he south line'of the north 45.00 feet of the southwest ¼ of said Section 8, also being the south right of way line of Norris Road. Thence S.88°54'40"E. along said south right of way line 660.69 feet to the east line of the southwest ¼ of said Section 8; Thence North along said east line, 15.00 feet to a point on the south right of way line of Norris Road (Co. Rd. No. 30); Thence S.88°54'40"E., on and~along said south right of way and the easterly prolongation thereof, a distance of 2672.51 feet to the east right of way of Coffee Road (Co. Rd. No. 401); Thence S.00°32'12"W., on and along said east right of way of Coffee Road, a distance of 1298.27 feet to the North boundaFy of the Tract No. 3806, as filed in Map Book 27 at Page 42 in the Office of the. Kern County Recorder; Thence S.89°12'53"E., on and along said north line a distance of 25.00 feet to the east right of way of said. Coffee Road (Co. Rd.~ No. 401); Thence S.00°32'12"W., on and along said east right of way a distance of 1320.64 feet; . Thence continuing on and along said east rigi~t of way, S.00°37'57'' W., 2645.30 feet to the north line of the s~outh half of Section 16; T.295., R.27E., bi. DM.; Thence N.89o09'10"W., a distance of 55.00 feet to W. ¼ corner of Section 16, T.295., R.27E., M.D.M.; 'Thence S.00o38'16"W., on and along west section line of said Section 16 a distance of 2644.43 feet to the S~, ¼ corner of ~said Section 16; Thence S.89o05'31" E., a distance of 30'.00 feet to a point on the north line of Section 21, T.295., R.27E., M.D.M.; Thence S.00o25'39"W., on and along said east line 2660.94 feet to the east- west midsection line of said Section 21; Thence N.89o44'05"W., along said east-west line 30.00 feet to the west quarter~ corner of said Section 21; Thence along west line of said Section 21, S.00°26'12"Wo, 2549.22 feet, more or less, to the north right of way line of Rosedale Highway (State Route VI - KER - 58) as shown on State Highway Map No. 7-1, filed in Book 4, Pages 96 and 97 in the Office of the Kern County Surveyor; Thence continuing along said north right of way line, S.89°42'16"E., 259.53 feet; Thence S.00°16'05"W., 10.00 feet; Thence continuing along said north right of way .line, S.89°42'16"E., 713.59 feet to the west right of way line of the Calloway Canal; Thence S.40°01'46"E., along said west line, 104.93 feet to a point on the south line of said Section .21; Thence southerly along said west right Of way line, parallel with and 150.00 feet westerly as measured perpendicularly from the existing Calloway Canal centerline, to the intersection of the north line of the SW¼ Q~ the NW ¼ of said Section 28;~ Thence N.89o47'26"W., along said north line to a point which is 797.18 feet bearing S.89°47'26"E., from the north 1/16 corner of said Sections 28 and 29 and being on the east right of way line of the Friant-Kern Canal; then continuing along said east right of way line on the following (19) nineteen courses; Thence S.09°13'00"E., 238.20 feet; Thence S.46°48'00"E., 320.70 feet; Thence S.45°00'00"W., 40.80 feet; Thence S.45°00'00'' E., 50.00 feet; Thence N.45°00'00"E., 51.00 feet; Thence S.47°12'00"E., 594.20 feet; · Thence S.00°22'00"W., 305.20 feet; Thence S.00°22'00"W., !00.00 feet; Thence S.89°36'00"E., 15.80 feet; Thence S.00°56'00"W., 35.00 feet; Thence S.00°56'00"W., 571.90 feet Thence S.03°14'00"W., 400.50 feet Thence S.02°06'00"E.~ 349.60 feet Thence S.00°22'00''W., 250.80 feet., Thence S.01°48'00"W., 400.10 feet Thence S.00°22'00''W., 500.00 feet Thence S.04°38'00"E., 172.00 feet to the south line of said Section 28; Thence along the various courses of-the said Domestic Water 'System Boundary of the City of Bakersfeild to the true point of beginning. Containing 2199.85 acres of land, more or less. ; eo 'gd W.,l lckel, Jr. 6200 Lck~ Ming Ro~d Sta~ Route 4. Box ~1 ~ ~ Tele~hone~5/8~-~ ~ 2 7 ~Sb ~u~e 26~ 1986 Ol~ OF BAKERSFIELD Don Ratty Mark Salvaggio Rollie Moore -~ Cit~ Water Board Bakersfield, CA 9330! Dear City Water Board Members, Rollie, Don and Mark: I am enclosing a copy of my June 25th letter to Donald J. Finlayson,' Chief of the Planning Branch.of the DWR. As ~am sure Gene Bogart will report to you, I read'this letter at the'DWR~s Public Hearing last night dealing with its EIR on a State water~regulation~program~inKern County. As you will observe, I made a particular.effore.to have full'proeec~ton~given to the City's 2800 acre spreading area. I think that it is essential-in any State water regulation program that the City and its contractors are~fully protected on both future ~spreading and water recovery rights. In addieion~I-believe it should be stipulated by all participating parties:that theWater-now stored by spreading~ in the City's spreading area='Is fully recoverable. ~¥our staff has a good record keeping procedure; consequently, those figures'~are 'available. Enclosed with this letter is a copy of my memorandum eo Stu Pyle and Tom Clark of the Agency. I call particular attention'to my-suggestion~of an initital. water sale to MWD, et al, in order?to have the funds available for the Tenneco land purchase. ~'As we have all agreed, there would be no withdrawal of this water by MWD, et al, until like amounts of imported water are brought into Kern COunty bY the water sellerS. If we can.succeed in'getting MWD, et al, to · make that imported water'available.at Just'the'incremental transportation cost in the Aqueduct between'the'Delba and Kern County~ we are looking at a cost of only about $10 per acre .foot'vermus the"$110'per'acre foot.'price that MWD, et al, may be required to pay.~forLthe'.regulated'water~ I think the City can easily put into Such a program 200',000 acre feet and gain some $20'million by doing so. I am looking forward to the potential of'an early special meeting of the City Water Board to have a full discuSsion'with me on this overall plan. I am furnishing copies of this'note to Paul Dow and Gene Bogart. GWN:rjp Ge°rge. W' .Nickel' Jr' [ Encs. c- j Paul Dow' Gene Bogart TO: Stu Pyle Ref, File: #220-f-5 Tom Clark FROM: George W. Nickel~ Jr. DATE: June 26, 1986 SUBJECT: MY SUGGESTiONS'AT TH~ PUBLIC HEARING ON THE DWR'S E~R LAST NIGHT Because I didn't have the'opPortunity to meet with either~of you following last night's meeting, ~ was unable to give Mou'a copy of'my letter to Don Finalyson; consequently, you'will find copies'enclosed~~ ~ do think I touched on several constructive Suggestions. It definitely appears that there would be little, or nothing, to gain by purchaSe of'Tenneco lands~south of"the Taft Highway. I believe the same thing can he.stated regarding the'Tennec~ lands lying between the Taft Highway and Panama Lane,~.particularly.in the'Ten'Section Oilfield · area. I think thiS will be Confirmed by~the'further engineering studies being done by the DWR and the'Agency. ~f it'.is, agreed'that the'Tenneco purchase can be so limited, there Should be'a more reasonable' Price for the project land purchase~ Regarding protection and use of.the City's 2800 acre Spreading area, I do hope that you will~give some consideration'to my'suggestions. .It should be simplier and. more efficient to have a coordinated spreading and water recovery program involving the City's 2800.acres'and the'TennecO'lands. The key to .being able to do this, in my opinion~ is to,give the'City and its contractors the full protection that ~ have advocated. I continue to feel that my most important suggestion is to initiate a program for MWD and theOther state~M&~'-Aqueduct contractors to Purchase sufficient Kern County water to provide the'Sellers o~'.such Water with Sufficient funds to purchase the Tenneco lands.' My fu=therlsuggestion~continues'to be that these funds can be loaned to the Agem~y.so.~that the. purchase'will be made in the name of the Agency, which.can subsequently have a revenue bond program to retire the purchase obligations. 'The Water purchase Price.that woUld he'paid by MWD, et al, should be very~much~in~the'range o~a $13O'per acre foot'price that DWR estimates'to result from~he'prop~s~d'State Project. ~n other words, MWD, et al~ should be able to Properly rationalize'this initia~ wa~er'purchase in order to get the water regulation'program underway. ~At the'.same time, ~D, et al, should be able ~o rationalize making surplus Aqueduct entitlement available to Kern County'~at the ~ncrementalcost of water-transportation from the Delta to'Kern County. This will work no hardship upon'MW D, et~al, and will make possible the neWwater'in ~ern county tha~ will balance the-initial.~water sale to provide, funds for'the'Tennec° Pu=chase...~ ~ave Urged Mou before, and urge you. again, t'o °rganize a meeting with'MWD representatives that ca~ be attended by the potential water'sellers,~whieh are logically the~City, Buena Vista, Hacienda and the Agency. I do look~forward to you~Upda~ed reaction to this suggestion. GWN:rjp ~~ ( eorge W. Nickel, 6200 Lake Ming ~oad Stc~ ~gute ~ ~x ~1 ~er~iel~ CA 9~6 Telephone ~/8~-~ June 25, 1986 Donald J. Finlayson ~. 'Department of Water'Resources. P.O. Box 388. Sacramento,.CA 95802 /..., . ~ Dear Don: · In preparatfon for your Public Hearing tonight at the Kern County Farm Bureau office of the draft Environmental Impact Report,..I am writing this note to make some comments on the'draft EIR. Before doing so, I would like to set forth my background and involvement in this general subject matter. I was a very direct participant.in bringing into'bging the Kern RiVer Water Rights and Storage. Agreement of 1962. The'same thing can be said regarding the water conservation storage purchase in Isabella ReserVoir. from'the United States and also for the RiverCanal Agreement, whick-made'feasible storage of Buena Vista' Water Storage District water inIsabella Reservoir'rather than in Buena Vista Lake. I also conceived .and assisted in bringing.about the Intertie between the' Kern River and the California'Aqueductl Furthermore,'I had direct responsibility for the development of theBuena'Vista Lake area from'a storage water facility to the highly efficient farming operation that now exists.in that area. In re- gard to the development of'the~farming operations in the Buena Vista Lake area, there was a definite need'to'devel0p'a full water~.supply; consequently, I spear- headed the program to develop ·useable groundwater~ a..program'which proved to be difficult and short of our'obJectives,' Consequently, I had engineering studies made to determine if waterspreading operationS-along'the Kern River between Bakersfield and Tupman woUld crea~e"useable recharge'for our Buena Vista Lake area wells. For'your information~..I learned"that water'spreading for recharge can be very efficient along the route Of'the-Kern River'an~ to'a substantial extent, north and northwest of the'Kern River~ but definitely not'to the Buena Vista Lake area or even'to points south of the Taft Highway. Based upon the preliminary findings of the State' Engineers, I believe that the' general con- .clusion is being made that on the'Tennec° lands there is not a'satisfactory re- charge'potential south of the Taft Highway. Based'on-these findings, I suggest that your alternative #1 entitled "North of Taft Highway Recharge Project" will · be the potentially most efficient purchase of Tenneco land. I don't believe the' land south of the Taft Highway even has any particular benefit as a buffer zone. As noted above, I have substantial knowledge of the spreading efficiency of the lands along the Kern River betweenBakersfield and Tupman, I utiliz~.this knowledge in working with the'City'of Bakersfield following its purchase from Tenneco of what is now referred'to' as'the'2800 .acre spreading'area. I worked out a program with the City to spread Kern River water in the City's spreading area for subsequent recovery and use in the 01cese Water District, a large part ~'une .25, 1986 Page 2. ~ of~hich is now in ~he City.of BakerSfield. In addition, I worked Out an exchange program with the Buena' Vista Water Storage District'to take p~ped water from the City's spreading area'in exeh~ge-.for"like amounts'of BuenaVista's Kern River water released from'Isabella'Rese~oir. Since initiation'of this program, the City has made extensive Use of its'spreading area for its'own Kern River water has also permitted the Buena Vista' District-to do likewise, and, in more recent times, a ~rogr~ has been worked' out with the' Kern 'County Water Agency..' I think it can be slated ~thout .any question'that the'City's 2800 acre spreading area is a fine, efficient project'that'must be given absolute,-unqualified protection in any.programthat-theSta~emayhave for'wate~'re~lati~'in ~rn.County. suggest that the State ~d the' Kem Co~y· Water Agency should respect ~d work toward this'obJect~e of full'protection~.'.I also ~uggest.-that there may.be a s~ple way in doing so.' ~ long'as the~rights of'this City and. its Contractors.are raco~ized on both Water extraction'and spreading, the'difficulties of spreading State and other water-on'adjacent Tennec° lands c~ be overcome. Specifically, I' suggest that reco~ition'should be~given'~o ~he full right of extraction of all water stored in'the City's'spreading area'at the'time'that the proposed State Project is initiated. ~e engineering staff of'the City Water .Board has ve~ .complete water spreading records that can be ~de available for this pu~ose. next suggest that after'the TennecO.lands-are acquired, it will be desirable to combine into a total spreadin~ and recove~ progr~the Tenneco lands with the' City's 2800 acres. Under such ~ arrangement, it.shoed be specifically spelled out that the City and its contractors can spread,'without, additional cost, their owned water in either the'City spreading area or On the Tenneco lands, wherever. it'is determined that'spreadingwill be most efficient at any particular time. · ~ereafter, it will be ~derstood'.tha~ the City'and its contractors caw. recover` ' from wells in the City's spreading area'their-total spread water,' whether it be' · .in the City's 2800 acre area~ or Oh"the'adjacent Tenneco lands. To get this overall' program under'operation, I have a further important suggestion for your consideration, as"well as .that.of'MWD and other State M&I Aqueduct Contractors. ~e'simplist way"to get'this:program off of'dead center would be for MWD, et al, to make a water'purchase in Kem County of'sufficient magnitude to provide the f~ds that will be-necessary to. PurchaSe the:Tenneco lands.and install required facilities.thereon~ In order for'such a sale Of'available Kern County water to take place,'it will'be,"'in my opinion;'necessa~ for'the water selling entities to first bring into Kern'County sufficient su~'lus Aqueduct and Friant/ Kem Canal water to halite.the'withdrawals of water that-will be made by MWD, et al. To insure that the.surplus. AquedUct water is available, HWD, et al, can stipulate that surplus water'in their Aqueduct contracts ~tl be made available .to the ~em County sellers at the'incremental cost'.of transporation from'the Delta to Kem County. ~is will work'.no hardship on MWD~ et al, and will, in my opinion, make this project a feasible one.' I have much more to add on how to'make this overall progr~ feasible, but will do that in subsequent letters'to you~ GWN:rjp TO: The Agency Groundwater Advisory Committee FROM: George W. Nickel, Jr. Ref. File: #220-f-5 DATE~ July 2, 1986 In preparation for our scheduled meeting on July 10th, I~am submitting my comments in advance so that ·they can be studied by all participants prior to the July 10th meeting. ! would appreciate receiving any comments o~.questions that any of you may have prior to our get together on July 10th. I hope that it may be possible at the July 10th meeting for our Advisory Committee to put together a package of ideas and comments that can be submitted to the Department of Water ResoUrces regarding the program Set forth in their draft EIR underground water program here in Kern County. The DWR has asked for all comments to be submitted on or before July 16th. As many of you know, % did make a presentation at.the June 25th DWR public hearing held at the Kern County Farm Bureau office on June 25th. I read my letter·of June 25th to Don Finlayson, Chief·of the Planning Branch of the DWR. I am enclosing a copy of my June 25th letter to Don Finlayson, as it does set forth much of the specific program·that I believe should be considered by all Kern County.water interests, the DWR and the Meto- politan Water District and other M&I Contractors for Aqueduct water. For your quick summary, let me set forth the comments and presentation that I would like to see our Advisory Committee make to'the DWR on or before. July 16th. · 1. State participation in a groundwater program in Kern County as a part of the State Water Project is desirable, provided that it can follow acquisition of the Tenneco lands by the Agency with the assistance and participation of the Kern River %nterests. 2. To have a feasible DWR groundwater program on the Tenneco lands, it becomes necessary to deal directly with the City of Bakersfield'$ 2800 acre spreading area and those entities that have stored water therein and have programs for future storage and water recoverY programs. ~The Tenneco lands that have the best spreading potential are immediately adjacent to the north, west and south side of the City's spreading area. It is our analysis that the City~·s spreading area, together'with its water distribution facilities should become an intrigal part of the total~water spreading and recovery program that will be put together for the benefit of the State Aqueduct water contractors. To accomplish making the City's spreading area a project com- bined with the program on the Tenneco lands, we believe that it is essential that the City and the authorized users of the City's spreading area must be fully 'protected on their rights to recover waters that has already been spread for future recovery. The City and the Rem River Watermaster have carefully established water spreading records that are available for inspection. In addition to the City, the'City's contractors having water spreading rights and programs of recoverY are. the Buena Vista District, Olcese-Hacienda, and the Kern County Water Agency. ~? 3. Although we do not know at this time what the price of the useable Tenneco land will be through negotiation or condemnation, we need to make some assumptions based upon what we think may'be a maximum price for the useable Tenneco land. If the price is less than the maximum that we project, all participants in the project will be benefitted. At this time, we project that the outside maximum price will be $50 million. Hopefully, it will be. substantially less than that amount. 4. In order for there to be a workable program for the Kern River Interests and the Agency to put up the money for the purchase of the Tenneco land, we propose that a sale be made of Kern County groundwater to MWD, et al. The sale will be. based upon water stored in the City's 2800 acre spreading area and at a price of $110 per-acre foot.' Using the outside figure for the Tenneco land of $50 million, the total sale of 454,545 acre feet will be required.. The designated purchaser of the Tenneco land is scheduled to be the.~Agency, ~tilizing net monies received from its portion of the water sale to MWD, et al, plus monies loaned to the Agency by the three Kern River Interests that will be selling a portion of their stored water in the City's spreading area. 5. To fully satisfy the concerns 0f the people in Kern County, it is t° be stipulated that no water deliveries from this overall sale will be made to ~D, et al, in excess of the amount of "new" water that.has been brought into the Kern County groundwater basin by the sellers of water to MWD, et al. The intent and determination is that Kern county will not.lose from its total water supply by having made a sale to.MWD, et al. 6. The definition of "new" water to be'brought into Kern County will largely be satisfied by an understanding with MWD, et al, on'ha~ing all Of'its Surplus Aqueduct entitlement water made available to the sellers of the Kern County water until such a time as there'has been brought into Kern County sufficient "new" water until it balances the sale of the Kern County water to MW-D, et al. 7. A further important stipulation with MWD, et al, is that the surplus Aqueduct entitlement water is to be priced at the incremental cost of bringing such water from'the Delta to Kern County. This should work no disadvantage upon MWD, et al, and will make'feasible the Kern county entities'purchase of such water. 8. .On this initital water purchase program, ~D, et al, will be limited tO, but at the same time guaranteed, 95% of that amount of water in the California Aqueduct at a rate of delivery not to exceed 20% per year, There will be'a calculated cost per acre foot'for having such water available in the California Aqueduct for MWD, et al.. On this particular block of water of some 500,000 acre feet, t~e calculated return costs will be set at $40 per acre foot. In summary', it is noted that the final cost to MWD, et al~ for thislpurchase water will be calculated on 95% of 500,000 acre feet for a net o~ 475,000. acre feet. This raises the net cost of the purchased water from~the'PurchaSed water'stored in the ground from $110 per acre foot'to $115.80 per acre ~oot'~ We then~add the Calculated recovery cost to the~AquedUct of'$40 pet acre foot'making the'final cost of such water to M~D, et al, to be $155.80 per acre'foot,' 9. Set forth above is the water purchase program that makes possible the purchase of the Tenneco land that will be scheduled.to be taken in .the name of the Agency. We are now ready to proceed with the DI*~ program for'bringing occasional blocks of surplus Aqueduct water for spreading and subsequent recovery in Kern County..This activity of DWR will be scheduled to be a part of the State Water Project by making more useable water in the Aqueduct. The cost of the program will be scheduled to be divided as other State Water Project costs.are, which basically is 50% to MWD, et al, south of the Tehachapis, 25% to the Kern County Water Agency and 25% to other agricultural and M&I contractors north of Kern County. The program to be offered to DWR by the Kern County Water Agency for the Aqueduct Contractors will be the following: 1. On the assumption that the useable Tenneco land is purchased~at the' maximum projected price of $50 million, there will be an annual charge'made to the DWR of 10% or $5 million per year.. 2. An assumption is made that the average storage will be approximately . 500,000 acre feet amd that maximum permissible storage will be 700,000 acre feet. It will be further assumed that the average take of water will be 140,000 acre feet per year. Using those figures, the $5 million annual payment on the Tenneco land will result in a storage cost on the water used of $35 per acre foot. 3. Through full cooperation among the Kern River Interests and the Agency, 'the cost of utilization of both new and existing conduits for the spreading of the D~ surplus Aqueduct water should run in the range of $30 per acre foot and recovery of the spread water should be in the.range of~$50 per acre foot.. Added to this will be DWR's incremental costs from the' Delta to Kern County of approximately $10 per acre foot making total cost of'water under this program to be approximately $125 per acre foot..This compares to the present DWR estimate. of $130 per acre foot, Ail of these cost figures will be carefully evaluated with DWR and MWD, et al. One thing for certain is that there should be some real economy resulting in joining into one program area with the adjacent Tenneco land. It is indeed possible' that the final cost figures will be less than $125 per acre foot. GWN: rjp . TO: THE FAN COMMITTEE Ref. File: #220-f-5 FROM: George W.-Nickel, Jr. DATE: July 7, 1986 'SUBJECT: A CONSTRUCTIVE PROMPT PROGRAM FOR THE GOOD OF ALL KERN COUNTY WATER INTERESTS For the good of ourselves and all of Kern County, we must move promptly to make a deal with MWD, et al, that will make possible early purchase of Tenneco land. Any delay will cause Tenneco to.promote sale of its land. to other entities. A delay will permit surplus Aqueduct water to be wasted into the Pacific Ocean instead of being taken into Kern County. A delay will cause MWD, et al,.to firm up water supply in other areas. A delay will cause the Agency to lose an opportunity to sell surplus.Agency Member~Unit.water to MW-D, et al, that will provide'some financial relief~for Such Agency Member Units. A delay will mean that the Agency and Kern River.Interests have failed to work out programs of mutual benefit. A delay will eliminated the present good negotiating'position that~a joint. Kern County effort can have with MWD, et al. Kern County Interests need to sell enough Kern County water to MWD, et al, to have the funds with which to purchase, the useable Tenneco land. Sales can be made with the stipulation that MWD, et-al, cannot, take more of the purchased water than the amount of "new" water for Kern CountYthat the sellers are first to provide.. This "new" water program will be further set.~forth later in this memorandum.. What can a properly structured program mean to our Fan Committee Members and for the good of all Kern County? For evaluation and discussion, I am going to highlight what I think the needs and objectives are of our Fan Committee Members. In doing so, it will be noted that many of the constructive Programs will be joint efforts. First of all, I would like to start out with the Rosedale-Rio Bravo Water Storage District. I have read Rosedale's 12 Commandments and tried to understand the needs and objectives of Rosedale For critical comment, I will note below what I have 'tentatively concluded. 1. Rosedale wants full credit and water extraction rights for ali its water spread to the underground.. Z. Rosedale likes the concept of "in lieu" programs wherein Rosedale can receive from another entity water for Rosedale's consumptive use for later giving up like amounts of Rosedale's Aqueduct Contract water to the other entity. The other entity could, of course, be MWD, et al. 3. When Rosedale gives up Aqueduct entitlement, Rosedale will need to re- place such water for consumptive use .in Rosedale. For that purpose, water wells can be pumped within Rosedale, but can also be supplemented by wells that can be made available in the adjacent Tenneco land. 4. Rosedale will be doubly advantaged by being able to pump wells in the Tenneco land. In addition to supplying agricultural water, Rosedale has a growin~ residential and commercial water demand that can be best supplied by wells, not sub- Ject to contamination by septic tanks, agricultural~chemicals, etc. 5.' Rosedale still has within its boundaries the old Jerry Slough Channel that has application for~bothwater conveyance and spreading. Such channel can 'potentially get increased'conveyance use that can benefit both Rosedale and potentially Semitropic in the carriage of MWD, et al, water to and thru Rosedale and Semitropic as "in lieu" water. A part of this water regulation program can be accomplished by improvement and greater utilization of.the Jerry Slough Channel. 'Funds for this purpose cam.be made. available from the MWD, et al, program. 6. Rosedale also stands to benefit from other conveyance conduits that will · make possible more direct.consumptive use. Here,. again, funds for further conduits can result from the overall Program with MWD, et al. The next Fan Member Group I.would like to refer to is the City of Bakersfield and its Contractors, namely,..Hacienda-Olcese, Buena Vista and the Agency. 1. The City's 2800 .acre spreading area must be fully protected on both · spreading and water recovery rights The'objectives here are the same as the.stated · objectives of Rosedale. 2. .Subject to'these objectives~being satisfied, the City can.logically incorporate its 2800 acre spreading area into the program contemplated on the adjacent Tenneco land. 3. As a point of beginning, .it should be set forth'the amount of water now stored in the'City's spreading area. Ail Fan Members, the Agency, plus MWD, et al, will stipulate that all water spread by the City and its Contractors~is. fully recoverable. Here, again, this .is the sameprogram that will be set forth for Rosedale. 4. Once incorporated with the Tenneco land spreading and recovery program, both the City and Tenneco land will be used for all authorized participants for spreading and recover~. 5. The City and its Contractors will always be allocated sufficient spreading capacity.in the combined City and Tenneco lands to handle all present and future Kern River water entitlement that may be scheduled for spreading and subsequent. .recovery. This same understanding will be extended to Rosedale to the extent that the spread and later recovered water is required.for residential and commercial use. 6. As a suggested practical matter, MWD, et al, will contract for a maximum of 700,000 acre feet of spread water on the jointly operated City and Tenneco lands. It is projected that. acquisition of the useable Tenneco lands will make possible spreading of far more than an additional 700,000 acre feet. Ail such additional spreading capacity will be for the benefit of Kern County. It is suggested that 50% of the additional spreading capacity should be made available for the Agency- and its Member Units and 50% should be made available for the Kern River Interests through the Kern River Watermaster. The objectives of Buena Vista and the cooperation to achieve such objectives will next be noted. .page' 3., ~ 1. As a practical matter, I note that I am treating Buena Vista and the Henry Mi~Ier D~strict together.. Although their respective water rights are different, they operate together and both have Kern River.Water Rights and Aqueduct rights as Member Units of the Agency. 2. Physically, BuenaVista and Henry Miller are particularly well located to receive Aqueduct water and can exchangeKern~River entitlement for both Aqueduct water and well water that. can'be brought down the'River Canal. The indicated objective of Buena Vista and Henry Miller is to have ~full economic water supplies 'for the agricultural lands therein in dry years as well as wet years. By maximizing carryover storage.in Isabella Reservoir'thru exchange and "in lieu" programs, much can be accomplished along that line. In addition, use of. the City's spreading area, as a Contractor, is also valuablein regulating water.~ There are many logical programs that can be worked out to meet.the obJectivesof Buena Vista; however, this is a big subject that should be separately dealt with. I next make reference to Hacienda-Olcese,.which has the high flow LowerRiver Water rights on the Kern River and the use of 20% of. the conservation storage in Isabella Reservoir for such water entitlement. Primary dedication of such water has been made to the Olcese Water District and water supplY.is insured by the contract with the City on storage and.recovery in the City's 2800 acre spreading area. An ex- change program has also been.worked~out between Olcese.and Buena Vista,~whereby well water from the City's spreading area 'can be pumped for Buena Vista by Olcese for a like amount of Buena Vista Kern River water as it passes through the Olcese Water District. 1. The objective of Hacienda-Olcese.is to have an assured water supply for the Olcese District~ and to market or directly utilize water supplies 'in excess of the 13 year projected~requirements .of.Olcese. Under the Kern River Water Rights and Storage Agreement, the Hacienda-Olcese water can be utilized both within and without Kern County. Hacienda-Olcese is interested in working with the Kern River Fan Committee in marketing and~regulating its Kern River water. How do we achieve the objectives of Kern County and at the same time accommodate MWD, et al? 1. We first must agree amongst ourselves on our.objectives and how to reach them. 2. Then, we are ready to move with a Program.to purchase the Tenneco land by a sale of water that is backed up by advanced acquisition of "new" water. 3. ~s part of the understanding with MWD, et al, MWD, et al, must make . available its surplus Aqueduct entitlement at just the incremental cost between the Delta and Kern County. There is presently substantial quantities of this water available and such availability is projected, ~at least intermittently, for several years to come. This purchase program with MWD will continue until Kern County receives sufficient '!new" water to equal the amount of water sold to MWD, et al. 4. In addition to the water sale, simultaneous agreement will be reached with MW-D, et al, on regulating water for MWD, et al. I suggest that MWD, et al, can have the right to spread up to 700,000 acre~feet of Aqueduct water for a 95% recovery and be limited to a take of up to 20% of the maximum recoverable water. DWR will be asked to concur in these overall arrangements and to schedule, for all Aqueduct Contractors in the future, surplus water requested over contracted supplies. · P~g~ 4. . .~. 5. I suggest that the Agency should reach an understanding with DWR and with the.other Aqueduct Contractors whereby the Agency will have an option, but not a requirement, to purchase 25% of surplus Aqueduct water'when it exists over.. contracted amounts of water. I project that it will work in the best interest of Agency Member Units to be separate from the MWD, et al, spreading program in Kern County. . . 6. MWD, et al, will contract withthe Agency and the involved Kern River Interests on a charge annually for the use of the'Tenneco land.plus.contracted spreading and recovery charges. After reaching a joint operating agreement, the Agency and the Kern River Interests can set up the Agency as the overall operator of'the project.. The approximate contract arrangements with MWD, et al,. might be the following. a. .For lack oflhavinganything better, I will estimated the Tenneco land purchase to'come to $50 million. Based on that price, MWD, et al, will pay 10% annually, which comes to $5 million. Figuring average recovery of MWD, et'al's, Own spread Aqueduct water'at 140,000 acre feet per year, the average cost per acre foot comes to $35.70 per.acre foot. b. I estimate charging MWD, et al, $30 per acre foot for spreading 'their water. c... I estimate charging. MW-D, et al, $50 per.acre foot for water recovery. d. The total indicated'cost above come to $115.70 per acre foo~. To this will be added the approximate cost of surplus Aqueduct water to MWD, et al, of about $10 per.acre foot, which brings to a final total $125.70 per acre foot for MW-D, et al,.on such water. 7. Although the contract charges.noted above are reasonable for MW-D, et al, the fact that Kern County already has a good portion of the spreading and recovery facilities will make it possible for the involved Kern.County entities to make a · good return on these contracted amounts. Here'is where cooperation between Kern River Interests and the Agency is essential in order to have a program that is good for all of Kern County. I will note below several cooperative programs that' can be workable and financially rewarding. a. The holders of the conservation storage rights in Isabella Reservoir, namely, North Kern, Buena Vista, Hacienda, and.those entities represented by them, are often physically in a position to deliver Kern River water to the higher east ~ide lands and take in exchange Aqueduct water on the more westerly KernRiver water entitlement lands. This can, of course, constitute a large financial savings as against, pumping to the higher east side lands. b. The Agency's Improvement District #4 has an M&I entitlement of some 77,000 acre feet annually. In years when MWD, et al, is asking for recovered water, the Agency can supply all or a portion of the ID#4 entitlement right in the Aqueduct. Then, Improvement District #4 can logically get good quality well water from the spreading areas for direct delivery or through the Cross Valley Canal to the treatment plan where much less treatment will be required than would be with. either Kern River water or Aqueduct water. c. DiStricts like Buena Vista and Henry Miller can also take well water from the spreadings areas and give up like amounts of Aqueduct entitlement to MWD, et al. Page 5. Th~., of course, is a big s~Ject that desexes a lot of attention. I have what I believe to be competent~advice that there is little or no chance from a timing standpoint that the DM progr~-set forth in its EIR has any chance of accomplishment until sometime next year. Tenneco has served written notice that it will not wait that long. Aside from .those two problems, I think the facts of life are that a joint Agency-Kern River Interests program with MWD, et al, is far better for Ke~ County than the progr~ projected in the D~ EIR. Fucthe~ore, the program that I. have suggested can be potentially, proceeded with' promptly. Moreover, it is a good deal for MWD, et al, that should find recognition.with that group.~ We do.have potential sellers of water, that will receiVe benefits from such sales without any disadvantage whatever to Kern County. I believe we have a program well worth discussing and getting into. I hope that ~11 be the reaction~of the Fan Co~ttee and Ke~ County water interests generally.. G~:rjp WATER BOARD ADDENDUM Attached find recently-received items pertaining to the Water Board meeting scheduled for Wednesday, July 16~, 1986, at the Water Board conference room: A. ) AGENDA ITEM NO. 6: Additional written correspondence from George Nickel regarding the proposed "Nickel Plan." ~ B.) FOR BOARD INFORMATION: Proposed contract amendment language betWeen Kern River'Interests and U. S. Bureau of Reclamation exempting Isabella Reservoir. from~the provisions of Federal-Reclamation Law (acreage limitation). cc: Councilman'Rollie Moore, Chairman Councilman Donald~K~' Ratty Councilman Mark Salvaggio Alan Daniel, Attorney's Office TO: THE FAN coMMITTEE Ref. File: #220-f-5 FROM: George W. ~Nickel, Jr. DATE: July 7, 1986 SUBJECT: A CONSTRUCTIVE PROI~T PROGR32~ FOR THE GOOD OF. ALL KERN COUNTY WATER INTERESTS For the good of ourselves and all of Kern County, we must move promptly to make a deal with MWD, et al, that will make possible early purchase of Tenneco land. Any delay will cause Tenneco to promote sale of its land. to other entities. A delay will permit surplus Aqueduct water to be wasted into the Pacific Ocean instead of being taken into Kern County. A delay will cause MWD, et al, to firm up water supplY in other areas. A delay will cause the Agency to lose an opportunity to sell surplus Agency Member.Unit water to M~, et al~ that will provide some financial relief'for such Agency Member Units. A delay will mean that the Agency · and Kern River Interests.have failed~to work out Programs of mutual benefit. A delay will eliminated the present good negotiating position that~a joint Kern County effort can have with MW D, et al. Kern County Interests need to sell enough Kern County~water to ~D, et al, to have the~funds with which to purchase.the useable Tenneco land. Sales can be made with the stipulation that MW-D, et al, cannot, take more of the purchased water than the amount of "new" water for Kern County that the. Sellers are first to provide. This "new" water program will be further set.forth later in this memorandum. What can a properly structured program mean to our Fan Committee Members' and for the good of all Kern County? For evaluation and discussion, I am going to highlight what I think the needs and objectives are of our Fan Committee Members. In doing so, it will be noted that many of the constructive programs will be joint efforts. First of all, I would like to start out with the Rosedale-Rio Bravo Water Storage District. I have read Rosedale's 12 Cammandments and tried to understand the needs and objectives of Rosedale. For critical comment, I will note below what I have tentatively concluded. 1. Rosedale wants full credit and water extraction rights for all its water spread to the underground. 2. Rosedale likes the concept of "in lieu". Programs wherein Rosedale can receive from another entity water for Rosedale's consumptive use for later giving up like amounts.of Rosedale's Aqueduct Contract water to the other entity. The other entity could, of course, be MWD, et al. 3. When Rosedale gives up Aqueduct entitlement, Rosedale will need to re- place such water for consumptive~use in Rosedale. For that purpose, water wells can be pumped within Rosedale, but can also be supplemented by wells that can be made available in the adjacent Tenneco land. 4. Rosedale will be doubly advantaged by being able to pump wells in the Tenneco land. In addition to supplying agricultural water, Rosedale has a growing residential and commercial water demand that can be best supplied by wells not sub- Page 2. jec~ to c6ntamination by septic ta~ks, agricultural'chemicals, etc.' ' 5. Rosedale still.has within its boundaries the old Jerry Slough Channel that has application for bo.th water conveyance and spreading. Such channel can potentially get increased conveyance use that can benefit both Rosedale and potentially SemitrOpic in the carriage of MW-D, et al, water to and thru Rosedale and Semitropic ~as "in lieu" water. A part of this water regulation program can be accomplished by improvement and greater utilization of~the Jerry Slough Channel. Funds for this purpose can be made.available from the MWD, et al, program. 6. Rosedale also stands to benefit from other conveyance conduits that will ~ make possible more direct consumptive use. Here,. again, funds for further conduits can result from~the overall program with MWD, et al. The next Fan Member Group I would like to refer to is the City of Bakersfield and it§ Contractors, namely, Hacienda-Olcese, Buena Vista and the Agency. 1. The City's 2800 acre spreading area must be fully protected on both spreading and water recovery rights...The objectives here are the same as the~stated objectives of Rosedale. 2. .Subject to these objectives being satisfied, the City can logically incorporate its 2800 acre spreading area into the Program contemplated on the adjacent Tenneco~land. 3. As a point of beginning, it should be Set forth the amount 6f water.now stored in the City's spreading area. Ail Fan Members, the Agency, plus MWD, et al, will stipulate that all water spread by the City and its.Contractors is fully recoverable. Here, again, thisis the same program that will be set forth for Rosedale. 4. Once incorporated with the Tenneco land spreading and recovery program, both the City and Tenneco land will be used for all authorized participants for 'spreading and recovery. 5. The City and its Contractors will always be allocated sufficient spreading capacity.in the combined City and Tenneco lands to handle all present and future Kern River water entitlement that may be scheduled for spreading and subsequent recovery. This same understanding will be extended to Rosedale to the extent that the spread and later recovered water is required for residential and commercial use. 8. As a suggested practical matter, MWD, et al, will contract for a maximum of 700,000 acre feet of spread water on the jointly operated City and Tenneco lands. It is projected that acquisition of the useable Tenneco lands will make possible spreading of far more than an additional 700,000 acre.feet. All such additional spreading capacity will be for the benefit of Kern County. It is suggested that 50% of the additional spreading capacity should be made available for the Agency. and its Member Units and 50% should be made available for'the Kern River Interests through the Kern River Watermastar. The objectives of Buena Vista and the cooperation to achieve such objectives will next be noted. ~ge 3. 1. As a practical matter, I note that I am treating Buena Vista and the Henry Milter District together. Although their respective water rights are different, they operate together and both have Kern River Water Rights and Aqueduct rights as Member Units of the Agency. 2. Physically, Buena Vista and Henry Miller are particularly well located to receive Aqueduct water and can exchange Kern.River entitlement for both Aqueduct water and well water that can be brought down the~River Canal. The indicated objective of Buena Vista and Henry Miller is to have full economic water supplies for the agricultural lands therein in dry years as well as wet years. By maximizing carryover storage in Isabella Reservoir thru exchange and "in lieu" programs, much can be accomplished along that line. In addition, Use of the City's spreading area, as a Contractor, is also valuable in regulating water. There are many logical programs that can be worked out to meet the objectives.of Buena Vista; however, this is a big subject that should be separately dealt with. I next make reference to Hacienda-Olcese, which has the high flow Lower River water rights on the Kern River and the use of 20%~of the conservation storage in.Isabella Reservoir for such water entitlement. Primary dedication of such water has been' made to the Olcese Water District and water'supply.is insured by the contract with the City on storage and recovery in 'the City's 2800 acre spreading area. An ex- 'change program has also been worked'out between Olcese and Buena Vista, whereby .well water from the City's spreading area can be pumped for Buena Vista by Olcesl for a like amount of Buena Vista Kern Riverwater as it passes through the Olcese Water District. I. The objective~of Hacienda-Olcese is to have an assured water supply for the Olcese District and to market or directly utilize water supplies in excess of the 13 year projected requirements of Olcese. Under the Kern River Water Rights~ and Storage.Agreement, the Hacienda-Olcese water can'be utilized both within and without Kern County. Hacienda-Olcese is interested in working with the' Kern River Fan Committee in marketing and regulating its Kern River water. How do we achieve the objectives of Ker~ County and at the same time accommodate MWD, et al? 1. We first must agree amongst ourselves on our.objectives and how to reach them. 2. Then, we are ready to move with a program to purchase the Tenneco land by a sale of water that is backed up by advanced acquisition of "new" water. 3. As part of the understanding with MWD, et al, MWD, et al, must make available its surplus Aqueduct entitlement at just the incremental cost between the Delta and Kern County. There is presently substantial quantities of this water available and such availability is projected, at least intermittently, for several years to come. This purchase program with MWD will continue until Kern County receives sufficient "new" water to equal the amount of water sold to bg~D, et al. 4. In addition to the water sale, simultaneous agreement will be reached with MW-D, et al, on regulating water for ~fWD, et al. I suggest that MWD, et al, can have the right to spread up to 700,000 acre feet of Aqueduct water for a 95% recovery and be limited to a take of up to 20% of the maximum recoverable water. DWR will be asked to concur in these overall arrangements and to schedule, for all Aqueduct Contractors in the future, surplus water requested over contracted supplies. age 4. '~ ~o 5. I suggest that the Agency should reach an understanding with DWR and wi~'h the other Aqueduct Contractors whereby the Agency will have an option, but not .a requirement, to purchase 25% of surplus Aqueduct water when it exists over contracted amounts of water. I project that it will work .in the best interest of Agency Member Units to be separate from'the MWD, et al, spreading program in Kern County. .~ 6. MWD, et al, will contract with the Agency and the involved Kern River .Interests on a charge annually for the use of the Tenneco land plus contracted spreading and recovery charges. After reaching a joint operating agreement, the Agency and the Kern River Interests can set up the Agency as the overall operator. of'the project. The approximate contract arrangements with MWD, et al,.might be the following.. a. For lack of.having, anything better, I will estimated the Tenneco land purchase to come to $50 million. Based on that price, MWD, et al, will pay 10% annually, which comes to $5 million. Figuring average recovery of MWD, et al's, own spread Aqueduct water'at 140,000 acre feet per year, the average cost per acre foot comes to $35,.70 per acre foot. b. I estimate~charging. MWD,.et al, $30 per acre foot for spreading their water. c. I estimate charging MW-O, et al,~.$5Oper acre foot for water recovery. d. The total indicated cost.above come to $115.70 per acre foot. To this will be added the approximate cost of surplus Aqueduct water to MWD, et al, of about $10 per acre foot, which brings to a final total $125.70 per acre foot for · MW]), et al, on such water. 7'. Although the contract charges noted above are reasonable for MW-D, et al, the fact that. Kern County already has a good portion of the spreading and recovery facilitiep will make it possible for the involved Kern County .entities to make a good return on these contracted amounts. Here is where cooperation between Kern River Interests and the Agency is essential in order to have a program that is good for all of Kern County. I will note below several cooperative programs that can be workable and financially rewarding. a. The holders of the conservation storage rights in Isabella Reservoir, namely, North'Kern, Buena Vista, Hacienda, and those entities represented by them, are often physically in a position to deliver Kern River.water to the higher east side lands and take. in exchange Aqueduct water on the more westerly Kern River water entitlement lands. This can, of course, constitute a large financial savings as against pumping to the higher east side lands. b. The Agency's Improvement District~#4 has an M&I entitlement of some 77,000 acre feet annually. In years when MWD, et al, is asking for recovered water, the Agency can supply all or a portion of the ID#4 entitlement right.in the Aqueduct. Then, Improvement District #4 can logically get good quality well water from the spreading areas for direct delivery or through the Cross Valley Canal to the treatment, plan where much 'less treatment will be required than would be with either Kern River water or Aqueduct water. c. Districts like Buena Vista and' Henry Miller can also take well water from the spreadings areas and give up like amounts of Aqueduct entitlement to MWD, et al. ~ ~Page 5.. Th~', of course, is a big subject that desexes a.lot of attention. I have what I believe to-be competent.advice that there is little or no chance from a timing standpoint that the DM program set forth in its EIR has any chance of accomplishment until sometime next year. Tenneco has served written notice that it will not wait that long. Aside from those two problems, I think the facts of life are that a joint Agency-Kern River Interests program with MWD, et al, is far better for Ke~ County than the progr~ projected in the DM EIR. Furthe~ore, the program that I have suggested can be potentially proceeded with promPtlY. Moreover, it is a good deal for MWD, et al, that should find recognition with that group. We do have potential sellers of water.that will receive benefits from such sales without any disadvantage whatever to Kern County. I believe we have a programwell worth discussing and getting into. I hope that will be the reaction'of.the Fan Co~ttee and Ke~ County water interests generally. G~: rjp TO: ~The Agency Groundwater Storage. Advisory Committee Ref. File: #220-f-5 FROM: George W. Nickel, Jr. DATE: July I0, I986 'SUBJECT: FOLLOW UP ON REQUEST OF THE KERN FAN SUBCOMMITTEE ON JULY 7th TO COMPARE THE AGENCY DWRPROGRAM ON WATER REGULATION IN KERN COUNTY WITH THE ALTERNATE PROGRAM SUGGESTED TO THE FAN COMMITTEE ON JULY 7th BY GEORGE NICKEL At the Fan Committee meeting on July 7th, my memorandum entitled "A Constructive Prompt Program for the Good of All. Kern County Water'Interests"was presented by me. This was then followed up by a review of the Agency's July 3rd memorandum to the Fan Committee'entitled "Agency - DWR Contract Guidelines". Regarding this Agency memorandum, the Fan Committee~did make certain recommendations on what the position of the Agency should be with D~R on the 12 noted contract guidelines. For~ the review of the Advisory Committee, I will set forth what I understand to be the general recommendations adopted regarding the positions set forth by DWR in its draft EIR. 1. Ownership- DWR is proposing to purchase~up to 46,000 acres of Tenneco land by the State through a Revenue Bond issue.' The'Agency would prefer to pur- chase and contract with the State for the proposed DWR operation; however, the Agency recognizes, that there would be a considerable time dela~ and some uncer- tainty on results, of having to proceed with a Revenue Bond election~in Kern County of some $100 million. The Agency is on notice by Tenneco that the Tenneco land will only be held for Agency or State purchase until the end of this calendar year. This appears to eliminate any chanc~' of an initial Tenneco land purchase by the Agency. It is also recognized that it is unlikely that the State can act on a purchase before the-end of this calendar year. Further input from the State on'this subject will be required at an early date. 2. Local Use of'Facility.- DWR has set up no limit on the amount of water that it will spread on the Tenneco land. In the.EIR there is some reference to possible spreading of high flow Kern River water~ but nothing is~set forth to limit DI.?R in spreading in that type of year. Consequently, it was concluded that the Agency should set forth an understanding with D~,rR on limitation of DIOR spreadidg in years when there is a need to spread high flow Kern River waters. 3.. In lieu Programs - DWR favors in lieu programs in addition to spreading on the Tenneco land. It is kno~,~ that ~ is negotiating with Arvin-Edison to use bB~ entitlement water in an in lieu program. This, of course, goes beyond DWR's concept in its EIR of just using surplus Aqueduct water; however, there is no indicated Fan Committee opposition to in lieu programs for possibly both ~D entitlement water and Aqueduct surplus water. It was recOgnized that if ~B~rD cannot spread its entitlement water in Kern County, ~g~D~will proceed with spreading programs elsewhere. ~. Impacts on Impoyted ~ater./.~upply - In the D~ program surplus Aqueduct water presently available to the Agency will bereduced by approximately 75%. The surplus water spread on Tenneco land will become State Project water supply fro~which the Agency is entitled to approximately 25%, when there is a demand by all State Contractors for such water to meet entitlement; hence, when the predictable time comes when there is a g~neral shortage of State water contract entitlement, distribution of DWRwater recovered in Kern County will go approxi- mately 25% to the Agency and 75% to the other State Contractors. Furthermore, if the State MAI Contractors are then still short of entitlement, they can then take up to 50% of the Agency's agricultural entitlement. The Agency and the Fan Committee, generally, would like limitations~placed on what DWR can take of the 25% Agency ownership of the stored water in a dry year. 5. Export of. Local.~Water~'SUp.p!y - As will later be noted, DWR, under conditions satisfactory to Kern.County, has expressed interested in some~purehase of local water supply; however, the Fan Committee is in unanimous agreement that prior to the exportation of any local water supplies, there should be prior. import of "new" water'to Kern County. "New" wate~ is defined as water not committed to Kern County such as not presently contracted Friant-Kern Canal and Aqueduct water. 6. Local Sales~-'Transfers~- DWRhas indicated interest in taking some of the present groundwater in the Tenneco land in advance of recharge in order to provide storage space for DWR water and, conceivably, to subsequently replace that amount of water for direct consumptive use in Kern Eounty. As an alternative, DWRhas also set forth possible purchase of local groundwater that has been stored previously. The Fan Committee continued to take th'e position that if presently stored Kern County groundwater is to be exported, it will only be permitted to the extent that "new" water has first been brought into Kern County. 7. Recovery Principles'&'Percent of Recovery - DWRhas set forth a 95% recovery objective; however, DWR has agreed that there would be ongoing studies to determine if the spread and stored water moves to some extent to areas outside of the Tenneco land underground. The Fan Committee recommended that the percentage of recovery should be determined by ongQing factual studies and evaluations. Such would need agreement by DWR plus specific understanding'by DWR of the water recovery rights of adjacent areas like the City's 2800 acre spreading area, Rosedale and Kern Delta. 8. Effects of ProjeCt. Operation 0n Basin~- The Fan Committee. approved the suggested language of the Agency, which will afford more protection for Kern County than what is set forth in the~DWR EIR. The Agency's suggested language is noted below: "The Project will be constructed and operated with the objective of not allowing groundwater levels of adjacent lando~,~ers to fall below level, which would have existed without the Project. Methods of fore- casting no Project conditions will be established prior to construction and a monitoring program developed to determine.~the effects of the project. If project groundwater levels are %ower then the objective mitigation in the form of'surface deliveries, payments to the affected parties, or other compensation, should'be'established". 9. Management of'Project.and~'Maintenance of Project - With indicated DWR approval, Agency is setting up to manage, operate and maintain the project. 'It was agreed by the Fan Committee that would be satisfactory provided that there is first an agreement worked out between the Agency and all other Kern County Ju%y 10f 1986~ .COb~.ARISON OF NICKEL ALTERNATE PROGRAM WITH THE AGENCY-DWRPLAN SET FORTH ABOVE. Reference'will be made to each of the 12'items. 1. ~nership.- Instead of waiting for a State purchase of the Tenneco land that may not even become a reality, Nickel suggests a sale of Kern CoUnty water ~ to ~D, et al, at a price and in sufficient amount to make it possible for the sellers to purchase the Tenneco land. Gene Bogart reported that the'approximate amount of water spread in the City~m spreading area to date is noted below: City of Bakersfield 450,000 acre feet Buena Vista District 50,000 acre feet Agency .50,000 acre feet Olcese-Hacienda 150,000 acre~feet TOTAL 700,000 acre feet At a sales figure of $110 per acre foot, Nickel estimates that less 'than 500,000 acre leer'will be required sold in order to have the funds for the. Tenneco purchase. ~ Nickel suggests that MW-D, et al, shall stipulate that there can be no more take of purchased'water'than the amount of "new"'water that the sellers'first bring in for Kern county use~ The sellers of the water will be scheduled to purchase the Tenneco land but with the understanding that the Agency, upon getting a voter approved Revenue Bond issue, will buy out the interest of the other sellers. 2. Local Use of Facility - As contrasted with no commitment on the part of DWR, on the amount of water'it can spread, Nickel suggests an absolute limit of 700,000 acre feet. Nickel'projects that there will be additional spreading capacity, but that extra spreading capacity should be for Kern County use. 3. In Lieu Programs.- Nickel suggests, as 'the Fan Committea has, that in lie'u programs should be promoted to be a supplement to the spreading on the Tenneco land. ~.To the extent that DWR participates in lieu programs, Nickel suggests that the amounts of water involved will, to that extent, reduce the maximum ~700,000 acre feet that DI~ can spread. · ' 4. - Impact.on Imported Water Suppl~ - Instead of the Agency becoming obligated to DI~ for approximately 25% of the cost of the Dk~ program, Nickel suggests that the Agency should have an option, but not a requirement, to purchase 25% of surplus Aqueduct water that DWR will schedule for spreading in Kern County. Nickel suggests that the option purchase price to the Agency should be just the incremental cost of conveying water from the Delta to Kern County~ This should be a substantial savings for the Agency. In addition, it will be an assured water purchase that the State M&I Contractors cannot take up to 50% of in a dry water year. 5. Export of Local Water Supply - The Nickel program is identical to the Fan Committee position in that there cannot be sale and exportation of any local water supplies prior to import of like amounts of "new" water to Kern County. ~ 6. ~Local Sales~-'Transfers - Hereg again, the Nickel position is the same as that of the Fan Committee. 7. Recovery. Principles~'and-'Percent .of..'..ReCoyery - The Nickel program is the same as the stated Fan Committee position. It should be further noted that regarding both spreading and recovery, Nickel has suggested contract rates for D~fR that should be rewarding to the Kern County Interests because of their ~having existing facilities that can be fully utilized without having to be duplicated. 8. Effects of'.~Prq.j~ct.'Op.~r~tionlon'Basin~- The Nickel program will fully accept the Agency's suggested language. 9. Manage~ent'qf~P.r~ject.'and~Maintenance'of'Pr~j.ect.- The Nickel and Fan Committee plans are in complete~agreement. 10. ~Groundwater Overdraft'Correction - Here, again, the Fan Committee and Nickel program are identical. 11. Legal. Concerns - Once again the Nickel and Fan Committee are in full agreement. 12. Review Requirements-- Once again there is agreement between the Fan Committee and-the Nickel'plan. As the basic author of the Nickel Plan, I do want to summarize what the projected financial and other benefits are of the Nickel Plan over'that of the prOposed Agency-D~R project. Before doing so, I would like to note that the Nickel Plan has come about by listening to and knowing of the'objectives of~Rosedale, the Kern River Interests and many of'the'farmers within the Agency's Member Units. The indicated advantages of the Nickel Plan are noted below. 1) MWD, et'al, can well afford to purchase the Kern County water that will enable the sellers to make the'earliest possible Purchase of the useable Tenneco land. The water sellers should gain some financial advantage, but without any cost whatever to Kern County. The Tenneco time limit'on purchase can be met. 2) Kern County oWnership of the Tenneco land is. far b~tter than having State temporary, or permanent, ownership. 3) There appears no question but that the Agency and its Member Units will be better off to have an option to purchase 25% of surplus DIo~ water at the incremental cost of transportion between the Delta and Kern County than there could possibly be under a full participation in the DI~ program. 4) The Nickel program for contracting rates for DWR spreading and water recovery can. be of substantial financial advantage to the Agency and the participating Kern River Interests. Gk~:rjp DAVID GRIFFIN' BAKERSFIELD, CALIFORNIA 933OI-529B SCOTT K. KUN[Y s,cvcw.,,c.oLs. June 30, 1986 RECEIVED .. Gene R. ~c~urtrey, Esq. JUL At to~e~ ~o~ ~e~a VJ s t~ NORTH KERN wATER Water Sto~age District. STOR~D~STR~CZ Post Office Box 10478 Bakersfield, Catifo~nia 93389 Michael Ho~dst~om~ Attorney fo~ Tula~e ~ake Basin. .. ~ate~ Sto~age District and Nseiend~ Wste~ District Post Of[ice. Box 4?5 Coreoran, California 93212 ~E~NT OF I S~ELLA ~N~CT - RECL~T I OH LAW MATTERS O~ FILE ~BER NK 14.18 Gentlemen: Enclosed find a copy of a letter from the Bureau of Reclamation, dated June 26, 1986, enclosing a revised form of contract amendment to make the Isabella contract consistent with ~eetion 212 of the Reclamation' Reform Act of 1982 ("~A"). It appears that this form of contract amendment is sufficient and addresses eo~ents that we provided regarding an earlier form of proposed amendment. If you have any questions or problems regarding the form of the contract amendment, please contact me As I have related to you previously, the Bureau of Reclamation has been considering changes to the Rules and Regulations implementing the RRA, which, if implemented, would delet~ that provision providing for amendment of such contracts. Although I am hopeful that we have convinced the pokers-to-be that such language should not be deleted from the Rules and Regulations, I believe it is in the best interest of all the Kern River Interests that we-proceed with all haste to amend the contract and once and for all resolve this issue which has plagued our clients for over 20 years. I intend to shortly submit the contract to the officers of North Kern ~ater Storage District to execute, and then forward the copies on to Gene for Buena Vista to execute, who should then Gene R. McMurtrey, Esq. Michael Nords[rom, Esq. June 30, 1986 Page Two forward the copies on to Mike to have his districts execute same and then return to the Bureau for signature. Sincerely, Ernest A. Conant EAC/j r Enclosures Stanley M. Roden, Esq. Hatch and Parent Attorneys for City of Bakersfield Gene R. MeMurtrey, Esq. ~' Attorney for Kern Delta Water Distriet Lloyd Hinkleman Kroniek, Moskovitz, Tiedemann & Girard Attorneys for LaHaeienda, Inc.  /~rth Kern Water Storage Distriet [all with enclosures] United States Dep tment of the Interior ~~ MID-PACIFIC REGIONAL OFFICE 2800 CO. AGE WAY IN R~PLY ~-tl0 SACRAMENTO, CALIFORNIA 95825-1898 REFER TO: JUN 2 6 1986 Mr. Ernest A. Conant Young, Woolridge, Paulden, Self, Farr aad Griffin 1675 Chester Avenue, Fourth Floor Bakersfield, CA 93301-5298 Dear Mr. Conant: We have reviewed the comments on the proposed amendmant to contract No. 14-06-200-1360A presenfed in your March 26, 1986 letter. Based on those comments and our subsequent conversations regarding the Kaweah Delta Water Conservation District's (KDWCD) amendatory contract, we have revised the proposed amendment as follows: 1. The first "Whereas" clause has been changed to provide: "WHEREAS, the parties hereto have entered into a repayment contract, dated October 23, 1964, and identified as Contract No. 14-06-200-1360A, as amended, which provides for storage of the Contractor's irrigation water'supply in Isabella Dam and Reservoir, and is hereinafter referred to as the repayment contract; and" 2. The second "Whereas" clause has been changed to provide: "WHEREAS, pursuant to Section 212 of Public Law 97-293 the Reclamation Reform Act of October 12, 1982, the Contractor's water stored in the above stated reservoir is exempt from the provisions of Federal reclamation law; and" 3. The language in the third "Whereas" clause regarding the effective date of the proposed changes to contract No. 14-06- 200-1360A has been deleted. The language is now included in Article 1. If the enclosed amendatory contract is satisfactory, please have the appropriate officials sign the three bluebound copies and return all three signed copies to our office. The contract will be dated when the Regional Director signs it on behalf of the United States. The signed contract must be accompanied by copies of the resolutions authorizing the signing officials to act on behalf of the Boards. Upon final execution, we will provide you three signed, original contracts and any additional copies you request. We appreciate your efforts in developing the proposed amendatory contract. If you have any questions regarding this contract, please contact Betty Riley at (916) 978-5036. Sincerely, NElL W. Enclosures cc: Gary W. Sawyers Law Offices of A. B. Ewell, Jr. 83 East Shaw Avenue, Suite 203 Fresno, CA 93710 2 R.O. Draft 12/10-1984 Rev. R.O. 6/2-1986 Contract No. 14-06-200-1360A Amendatory UNITED STATES DEPARTMENT OF THE INTERIOR BUREAU OF RECLAMATION Kern River Project, California AMENDATORY CONTRACT AMONG THE UNITED STATES OF AMERICA. AND NORTH KERN WATER STORAGE DISTRICT~ BUENA VISTA WATER STORAGE DISTRICT, TULARE LAKE BASIN WATER DISTRICT~ AND HACIENDA WATER DISTRICT THIS AMENDATORY CONTRACT, MADE THIS ~ day of , 19__, between the UNITED STATES OF AMERICA, hereinafter referred to as the 'United States, represented by the Contracting Officer executing this amendment, and NORTH KERN WATER STORAGE DISTRICT, BUENA VISTA WATER STORAGE DISTRICT, TULARE LAKE BASIN WATER STORAGE DISTRICT, AND HACIENDA WATER DISTRICT collectively hereinafter referred to as the Contractor, WITNESSETH, That: EXPLANATORY RECITALS WHEREAS, the parties have entered into a repayment contract, dated October 23, 1964, and identified as contract No. 14-06-200-1360A, as amended, which provides for storage of the Contractor's irrigation wate~ supply in Isabella Dam and Reservoir and is hereinafter referred to as the repayment contract; and WHEREAS, pursuant to Section 212 of Public Law 97-293 the -Reclamation Reform Act of October 12, 1982, the Contractor's water stored in the abovestated reservoir is exempt from the provisions of Federal reclamation law; and WHEREAS, the Contractor desires to amend the repayment contract to reflect the intent so stated in Section 212 of Public Law 97-293; NOW, THEREFORE, in consideration of the mutual and dependent 'stipulations and covenants herein contained, it is mutually agreed by the parties hereto as follows: 1. It is agreed that the following changes to contract No. 14-06-200-1360A dated October 23 1964 (existing contract), between the United States and the' Contractor, shall be effective commencing October 12, 1982. 2. Articles 24, 25, and Exhibit.C of the repayment contract are hereby deleted in their entirety. 3. Nothing in this amendatory contract shall terminate, cancel or affect any sales of land heretofore made under recordable contract, 4. Except as herein amended, all provisions of the repayment contract shall remain in full force and effect. 2 IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and year first above written. UNITED STATES OF AMERICA Regional Director, Mid-Pacific Region Bureau of Reclamation NORTH KERN WATER STORAGE DISTRICT (SEAn) By Attest: President 'Secretary BUENA VISTA WATER STORAGE DISTRICT (Seal) Attest: President Secretary TULARE LAKE BASIN WATER DISTRICT (SSAn) By Attes'~t: President Secretary HACIENDA WATER DISTRICT (Seal} BM Attest: President Secretary CORP 3 CALIFORNIA ~ COMMUNITY SERVICES DEPARTMENT ~-~ .=~"~//~,~ ~ .- ' '--~-----'-'-'-'-'-'-'-'~=_. P,AUL DOW, Manager GENE BOGART, Director of Water Resources FLORN CORE, Assistant Director of Water Resources FRANK FABBRI, Parks Superintendent, 326-3781 JIM LEDOUX, Recreation Superintendent, 326-3701 ROBERT HART, Sanitation Superintendent0 326-3781 J~lly 14, 1986 Ms. Delores Brown Department of Water Resources '. P. O. Box 942836 Sacramento, CA 94236-0001 RY.: Kern Water Bank; Response to Draft F~.I.R. Dear Hs. Brown: As noted in our April 16, 1986 letter, the City of Bakersfield owns property and has 'spreading and extraction facilities located in the pro- posed project area. The improved facilities, referred to as the "2800 acres," have demonstrated the:capability of' recharging .and storing up to 200,000 acre feet of water per year. 'Through the 'efforts of the City, Olcese Water. District, *Buena Vista water Storage District and the Kern County Water Agency, over 700,000 acre feet have been recharged since 1977. Therefore, it is,of paramount importance that. the City and its contractors reCeive full protection hgai. nst any adverse conditions that might limit or restrict the recharge or extraction' capability of the 2800 acre facility· : Since' acquisition of the .Kern River water, rights and facilities from Tenneco in 1976, the City has been in the development phases of a long- term conjunctive use program involving extraction of City water previously stored in the 2800 acres for' domestic use in urban Bakersfield. The short term ~lan includes the drilling of several potable quality water wells and construction of pipelines to a terminal storage tank' located at the' ex- treme western.boundary of the urban area. Ultimately, additional wells and two large diameter pipelines would deliver finished water to: areas eas~ and north of the '2800 acre facility. These plans are predicated upon the u~e of excellent quality water, used for recharge. Since State .project water is of' lesser quality than Kern River and Friant~.Kern water, it is anticipated that massive recharge efforts outlined in 'the State plan could cause degradation of overall' groundwater quality in the project area. 4101 TRUXTUN AVENUE · BAKERSFIELD, CALIFORNIA 93309 ' ' · {ItOR) .q?.6-3716 Ms. D~lores Brown :Page 2 We are concerned and therefore want to stress the importance of.the State's intent to carefully monitor water quality, . both before and after implementation of the proposed project. ~e also feel tl-~e proposed ."In Lieu" recharge program suggested in the Draft ~.~I.R. would reduce the overall effect of .importing large quantities of State water, to a single area. The "In Lieu". concept wo. uld also provide additional flexibility to the'.State when local interests a~e recharging during normal or above-normal water Years, thereby reducing potential~ competition for available "storage spa. ce.', In respect to the Tenneco lands that would be taken out of production, the proposed project lands are currentlY, under contract' with the City for supplying miscellaneous Kern River water'.to them. Under the same contract (No. 77-71, dated May 2, 1977), the City has the right t© utilize Tenneco wells, canals and conveyance facilities. in order to stabilize the City's water re charge program. The City would like to see'a clarification of the State in- tention regarding this matter in.the Final E.I.R. Our staff would be avail- able to discuss this item at your earliest 'passible convenience. Again, thank you for the opportunity to respond to the Draft E.I.R. re~ garding the prOposed 'KERN ~ATER BANK project. Very truly yours, PAUL DO~ Community Services Manager Gene Bogart , Director of 'Water. Resources -' GB:sr ' · .cc: Councilman Rollie Moore I; Chairma.n, City Water 'Board Councilman Donald K. Ratty Councilman Mark Salvaggio · George Caravalho, City Manager Tom Clark," Kern County ~ater Agency PRELimINARY STSTEMENT TO BE MADE AT THE WATER BOARD .MEETING ON JULY 16th I~ appreciate the opportunity to appear before you today. We will be dealing with the shbject of water regulation, which is of vital importance to the City and its Contractors, who', .together with the City, are constructively using the City's 2800 acre spreading area'-along-the Kern River. Because I do have recommendations to set before you, I think'mybackground and knowledge on this subject is important and will be of interest to you~ As a point of beginning, I note that the basic water rights on t~e Kern River' were established by the Mil~e--Haggin Agreement of .1888. 'I'he Miller of that Agreement was my Great Grandfather Henry Miller. Miller was an Outstanding develOper'of'land and water throughout the San Joaquin Valley and had taken a great interest in land Ownership and development along the Kern River, primarily doWnstream from where the City's 2800 acre spreading area is located. Miller claimed' and was granted in Court in the' Miller-Haggin Agreement of 1888 a Riparian water-right position on his lands doWnstream from the City's 2800 acre spreading areal Much off,Miller's lands are what make up the Buena Vista Water Storage District todaY. In Miller's contest with the founders of the Kern County Land ComPany,-Haggin and Tevis, Miller, among other things, was granted in the Miller-Haggin Agreement of 1888 the stipulation that Miller's Kern River water rights were to be delivered in undiminished quantities to what was established as Second'Point of Measurement, which is at the westerly end of what is now the City's 2800 acre spreading area. Miller was knowledgeable enough to know that there were high transporation losses in the Kern River Channel area from First Point of Measurement above Bakersfield ~ Second Point of Measurement. Miller wanted to be certain .that Haggin and Tevis, and their successors in interest, would have to provide the water transporation losses to Second Point of Measurement, from which Miller then diverted Kern River water to regulatory storage in. Buena Vista Lake and for direc: use on the lands that he reclaimed from flooding in the Buttonwillow area by construction of the Flood Canal-on the west side of the Buttonwillow area. The important thing here to note is the'~arly recognition of the'water spreading capacity of the City's 2800 acre spreading groun~ as well as some of the adjacent ground now standing in Tenneco 9~ership. The loss of water to the underground by Haggin and Tevis, in order 'to deliver Miller's water in undiminished quantities, was, of course, a liability and loss of water to Haggin and'Tevis and their successors in interest, the Kern County Land Company. However, with the passage of time and the physical changes that have taken place, that liability is now an asset of great consequence as an efficient water storage and regulation area. Now, getting to my own personal background and contribution regarding the City's 2800 acre spreading area, as Vice President of Miller & Lux, Inc., I took over control of the remaining Miller & Lux lands and operations in Kern County in 1955. The largest remaining asset was the 30,000 acre Buena Vista ,Lake area, which was still being utilized for the regulatory storage of Kern River-wAter, primarily for the Buena Vista Water Storage District lands in the Button%illow area, extending north to Highway #46. At this same time, Isabella Reservoir was under construction and almost completed primarily as a flood control reservoir; however, together ~th other Kern County water.leaders, I recognized that water conservation and regulation in Isabella Reservoir was potentially much more efficient than regulatory water storage in Buena Vista Lake. I, of course, further recognized that Buena Vista Lake's 30,000 acres were much more valuable for.farming than for water storage purposes; however, I had one big road block in making Isabella Reservoir storage water conserving and efficient as a substitute for water storagein Buena Vista Lake. Under the Miller-Haggin Agreement of'1888, the Ke~--n County Land Company, as successor in interest to Haggin,. on/y had the obligation to transport Kern River water in Page 2. ~ ~ u~minished quantities to Second Point of Measurement under natural flow conditions for the 6 month.Period'of March through August of each calendar year.. I concluded that it would not be practical for'my company, Miller & Lux,' to assume resPonsibility of Kern River transporation'losses over and above the requirements of'the Kern County Land Company in order to bring regulated water to the Buena Vista Water Storage District and gain the right to use the Buena Vista Lake area for farming instead of'wate~ storage: hence, I conceived and negotiated'a program that worked to the mutual advantage of the Kern County Land Company, and its successors in,interest, the Buena.Vista Water Storage District and Miller & Lux and its subsidary corporation, Buena Vista Farms. The plan negotiated was for the Kern County Land Company to build the 1100 cfs RAver Canal, which now generally borders the south side of the City'S 2800 acre spreading area. The R/vet Canal has made possible transporation of Kern River water without conveyance loss'to Second Point of Measurement. In exchange for constructing the River Canal, the Kern County Land Company and its successors in interest were able to pick up most of the water lost in transportation in the River Channel to SecOnd Point of Measurement as required in the Miller-Haggin Agreement of 1888. I then simultaneously worked out an agreement with the Buena Vista Water Storage District wherein M/ller & Lux, and its affiliated .corporation, Buena Vista Farms, agreed to pay for 32% of the conservation storag? in Isabella Reservoir in exchange for being relieved of most all of the water storage obligations that we had in the Buena Vista Lake area. ~ "As earlier noted, the program involving the construction of'the River Canal 'was definitely of benefit for all participating parties~ however, I then faced the problem of having an adequate water supply for the farming of the 30,000 ~cre Buena Vista Lake area. Consequently, I promptly initiated a water well installation program, but soon found out that there is a limited supply of useable groundwater in the Buena Vista Lake area. Consequently, I explored the potential of working out a program to get good quality, economic groundwater from the Kern County Land Company lands along the Kern River, where the City's spreading area is now locatedl This was back in the late 1950's and finally in the Kern River Water Rights Storage Agreement of 1962, I was able to get .. language incorporated'in that Agreement wherein it is set forth that a full investigation will be made of the potential of regulating high flow waters in the area of the Kern County Land Company lands along the Kern River for later recovery and use. Although I was su'ccessful in getting that language incorporated into the Kern River Water Rights and Storage Agreement, t, quite frankly, there- after had little or no cooperation from the Kern County Land Company in proceeding with a study and a plan of action. Fortunately, for the Buena Vista Lake area, the California Water Plan had been adopted and the California Aqueduct was under 's6nstruction and became the main backup supply of water for the Buena Vista Lake area. ~.~en I bought the Rio Bravo Ranch on the Kern River in 1965, I did so with the knowledge that, in addition to the riparian rights on the Kern River for a portion of the property, I also had my Lower River high flow Kern River righ:s and 20% of the'conservation storage in Isabella Reservoir that would insure water supplies for agricultural and other development at Rio Bravo: however, I also recognized that these high flow water rights would profit-from further regulation in what is now the City's 2800 acre spreading area. I succeeded in an effort to have a substantial portion'of'the Rio Bravo Ranch annexed to the City of Bakersfield at the same time TO: The City Water Board Ref.'File FROM: George W. Nickel, Jr. DATE: July 15, 1986 SUBJECT: AN ALTERNATIVE PROGRAM TO THE WATER REGULATION PROGRAM BEING INVESTIGATED BY THE AGENCY AND THE STATE DWR I have already provided you-and City Water Department staff with considerable information on this subject. At this time, I thought it might be helpful to you if I would just set forth what I see to be the major objectives of the City and its Contractors in the City's 2800 acre spreading area along the Kern River. 1. The City, together with its Contractors, namely Buena Vista, Olcese- Hacienda and the Agency, have done a good job in spreading water for future recovery in the .amount of'600,000 acre feet in the City's spreading area. The value of this program is far reaChing and should definitely be preserved. The program of water regulation on adjacent Tenneco land under consideration ~y the Agency and the DWR could very eaSily be in conflict'with and a detriment to the operation of the City's spreading area and the recovery of water therefrom. To be sure that there is no such Conflict, positive assurances will be necessary from both the State and the' Agency. This should certainly be one of the ~ajor objectives of the City and its Contractors in the City's spreading area. Achieving this objective following State OWnership of the Tenneco land will likely be most difficult to accomPlish. Assurance of this objective can likely be best achieved if ownership of the Tenneco land is brought about by the City and its Contractors. 2. The City and two'0f its Contractors, namely Buena Vista and Olcese-Hacienda, have substantial quantities of Kern River entitlement to regulate in the City's spreading grounds. Unless there is some form of protection of the spreading capacity in the City's. 2800 acres, such Spreading capacity may be interfered with and reduced by the contemplated spreading of surplus Aqueduct water by the state and the Agency on adjacent Tenneco land. Here, again, the objective of the City and its Contractors will be to have a firm understanding that if there is not adequate spreading capacity in the City's spreading area, there will be a right extended to the 'City and its Contractors to spread all or a portion of their Kern River entitlement on the adjacent Tenneco land. '3. As already stated, full spreading rights must be maintained by the City, Buen~ Vista and Olcese-Hacienda. In addition, there must be stipulated by the Stat~ and the Agency that the City and its Contractors have 100% recovery rights on waters already spread as tabulated by the City Water Department'and the same right of full recoverY for Kern River entitlement that may be spread in the future in either the City's spreading area'or on, the adjacent Tenneco land. Properly located wells along the River Canal and the Cross,Valley Canal will logically be able to recover water spread in both the City's spreading area and the adjacent Tenneco land. City Water Board - Memo Page 2. ~ ~ 4. To insure Kern County control of the State's program to spread surplus Aqueduct water on the Tenneco land and other lands in Kern County, an initial purchase of the Tenneco land can likely be achieved by the City and its Contractors by selling approximately 500,000 acre feet of water to MWD and other Aqueduct M&I Contractors. Water sales can be negotiated with MWD, et al, which will really constitute a purchase of water that must first be imported as "new" water into Kern County that will not'otherwise be scheduled for Kern County take or use. There will be no Kern County groundwater exported for'MWD, et al, use in excess of the amount of "new" water'that is first brought into Kern County. This will give absolute assurance to everyone in Kern County that there will be no reduction in Kern County water supply as a result of the water'sale to MWD, et al. 5. To make sure that this type of water sale is feasible, financially attractive and the temporary source of money to purchase the Tenneco land, it should be our objective to have MI~D, et al, with the approval of the State DWR, to make available to .the sellers of water group both MWD, et al, surplus Aqueduct entitlement, plus other surplus Aqueduct water at a unit charge per acre foot of just the incremental transportation costs between the Delta and Kern County. This should be a charge of less than $10 per acre foot and should compare to our sales price to MWD, et al, of approximately $150 per acre foot in the Aqueduct, when subsequently taken by MWD, et al. It may be argued by some that MWD, et al, will not'agree to such an overall program; however, the facts of life are that Kern County is in a good bargaining position at th±s time and the price to MWD, et al, of '$150 per acre foot is reasonable for M&I use and a better value than alternative projects such as the projected Los Banos Grandes'-Reservoir. 'I ~also~note~tha~ astong~as the~e is-.available Surplus MWD, et al, entitlement, .and other'surplus Aqueduct water, there is no financial disadvantage tO MWD, et al, in making that water available to Kern County at the incremental transportation costs between'the'Delta and Kern County.. The sellers to MWD, et al, should have the right to take this surplus Aqueduct water until it amounts to the total sale for the take of MW-D, et al, in future years. 6. The logical sellers of a water supply program to MW-D, et al, will be the City and its Contractors in the 2800 acre spreading area, which include Buena Vista, Olcese, Hacienda and the Agency. I suggest that the City should consider a sale as I have structured the sales program in the amount of about 300,000 acre feet. My projections show'that the'City should net about $30 million on such a sale. Then, the City and'the'other sellers will make their money avail- able to cover the purchase Of the useable Tenneco land, which will likely become 'the final responsibility of the Agency% however, the other selling entities would loan money at 10% annually to the Agency so that there can be early consumation of .the Tenneco land purchase. The Agency would then proceed with a properly formulated Revenue Bond issue that will provide the City and the other sellers repayment of the money temporarily loaned to the Agency. This will greatly accelerate and eRpedite the purchase from Tenneco, which, according to Tenneco top management, is only ~available Until the end of 1986. 7. Once the Tenneco land purchase is assured, the Agency, in harmony with the Kern River Interests, can then offer to the State DWR and the other Aqueduct water contractors the opportunity to store a limited amount of water in Kern County by agreement for the DI~ to pay 10% annually on the cost of the Tenneco land plus contract rates for the spreading and recovery of the surplus Aqueduct water. In other words, this would be, then, very similar to the projected DWR City Water Board_ - Memo Page 3. ~ Agency program set forth in the'DWR's EIR, except that control of the program will be by the Agency and the Kern River Interests rather than by the DWR. I suggest that the maximum storage for the participants in the DWR program should be a total of 700,000 acre feet. I anticipate that properly administered, the acquired Tenneco lands and related Kern County programs can handle well over 700,000 acre feet, but that would be for the benefit of Kern County and outside of the DWR program. If the projections that I have Set forth above can be realized, the great benefits to the City can be briefly stated. First, there will be a guarantee that the City and its Contractors can always have a spreading program for Kern River entitle- ment water that they wish to regulate. Second, there will be stipulated rights for the City and its Contractors to fully recover their present and future spread water. Thirdly, on the basis of a 300,000 acre foot water sale project for just the City, the benefit should be in the range of $30 million. These are benefits well worth working for. I urge prompt exploration of this program with MWD, et al, and the State DWR. I further urge that the Agency should be asked to participate in these contacts with MWD, et al, and the State DWR. G~:rjp ?f