STATE WATER RESOURCES CONTROL BOARD ---oOo--- ITEM 9: ) ) CONSIDERATION OF AN ORDER DENYING ) PETITIONS FOR RECONSIDERATION AND ) AMENDING DECISION 1641 IMPLEMENTED, ) IN PART, THE 1995 BAY-DELTA PLAN. ) _____________________________________) ---oOo--- HELD AT PAUL R. BONDRESON BUILDING SACRAMENTO, CALIFORNIA WEDNESDAY, MARCH 15, 2000 1:00 P.M. ---oOo--- Reported by: ESTHER F. WIATRE CSR NO. 1564 CAPITOL REPORTERS (916) 923-5447 1 APPEARANCES 2 3 BOARD MEMBERS: 4 JAMES STUBCHAER, CHAIRMAN MARY JANE FORSTER, VICE CHAIR 5 JOHN BROWN ARTHUR BAGGETT, JR. 6 COUNSEL: 7 WILLIAM R. ATTWATER 8 STAFF MEMBERS: 9 WALTER PETTIT, EXECUTIVE OFFICER 10 DALE CLAYPOOLE THOMAS HOWARD 11 MAUREEN MARCHE 12 AUDIENCE: 13 WILLIAM JOHNSTON THOMAS BIRMINGHAM 14 DANTE JOHN NOMELLINI ARTHUR GODWIN 15 ROBERT MADDOW JEANNE ZOLEZZI 16 KARNA HARRIGFELD ANDREW HITCHINGS 17 NANCY SARACINO DAVID ALADJEM 18 FRED ETHERIDGE GARY BOBKER 19 GREG WILKINSON ED WINKLER 20 DAVID ANDERSON EDMUND GEE 21 TIMOTHY O'LAUGHLIN 22 ---oOo--- 23 24 25 CAPITOL REPORTERS (916) 923-5447 1 SACRAMENTO, CALIFORNIA 2 MARCH 15, 2000 1:00 P.M. 3 ---oOo--- 4 CHAIRMAN STUBCHAER: This is the State Water Resources 5 Control Board. The remaining item on the agenda is Item 9, 6 which is the order for consideration of and order denying 7 petitions for reconsideration and amending Decision 1641, 8 implementing in part the 1995 Bay-Delta Water Quality Plan. 9 We will begin with the staff presentation by Mr. 10 Howard. 11 Good afternoon, Mr. Howard. 12 MR. HOWARD: Good afternoon, Board Members, 13 Mr. Chairman, on your last day. My name is Tom Howard. 14 As you are aware, D-1641 was adopted in December of 15 this year -- last year. Since then we have received 21 16 petitions for reconsideration. I would like to briefly try 17 to describe the changes that staff is recommending, based on 18 the petitions for reconsideration that have been received. 19 And the way I would like to do it is to go to Page 47 of the 20 order, the order itself, which lists the changes that we're 21 recommending and very briefly run through each one and tell 22 you why we feel that particular change is appropriate. 23 On the very first one, we are recommending some changes 24 on the project description. This really comes about because 25 of a recommendation from the Sacramento Valley water users CAPITOL REPORTERS (916) 923-5447 3 1 that we clarify that CEQA lawsuits can be initiated after 2 the Board makes a decision on Phase VIII. This particular 3 language is included for the sole purpose to clarify that 4 the project under the CEQA document is not completed. We 5 have a more pointed response to their recommendation in a 6 later number here. 7 The second change is to delete a sentence from the 8 order. This is under -- from a recommendation from South 9 Delta Water Agency, Central and Southern Delta Water 10 Parties. The sentence states that in a previous Board order 11 the Board had concluded that the Delta riparians have no 12 right to the water from the Sacramento River. We are 13 recommending that that be deleted because it is not 14 necessary to support the order. It is basically dicta in 15 the decision. 16 The third change deals with the discussion we had in 17 D-1641 on the Delta Protection Act. Once more this was 18 recommended by the South Delta and Central Delta Parties. 19 The discussion basically said that the D-1641 made the 20 statement that the Delta Protection Act didn't provide a 21 water right to the Delta parties, that it protects those 22 who already have a water right. They objected to that 23 language. Again, it was considered to be unnecessary to 24 reach the conclusions needed to support the order, so we are 25 suggesting that it be deleted. CAPITOL REPORTERS (916) 923-5447 4 1 On the next page, on Number 4, we are proposing to put 2 in a footnote that deals with the San Luis Drain issue. 3 Basically, this is meant to bring up to date the order of a 4 recent federal court decision that dealt with the San Luis 5 Drain. The court order tells the Bureau that they have to 6 provide drainage service, but that they have options in 7 order to do so. The draft encouraged the Bureau to move 8 forward with an analysis of the San Luis Drain. The Draft 9 Order still contains that provision, asking the Bureau to do 10 that as one of the alternatives that was allowed under the 11 federal court decision. 12 Number 5, much like the Delta Protection Act, this 13 section dealt with the Watershed Protection Act. Again, we 14 felt that the discussion on the Watershed Protection Act 15 wasn't necessary to support the Board's decision. 16 Essentially, on D-1641 the Board said that the Delta 17 Protection Act required the Department to contract with 18 in-basin water users. It did not require the Central Valley 19 Project to contract with water users. 20 We had a lot of parties who objected to that language 21 either in one direction or the other, support of it or felt 22 that the analysis was incorrect. Our opinion is it is a 23 very important issue for Phase VIII, and it is going to have 24 to be addressed directly in Phase VIII. It isn't necessary 25 to come to the conclusion for the first seven phases. So we CAPITOL REPORTERS (916) 923-5447 5 1 are suggesting that it be deleted and then provided as an 2 issue in the Phase VIII hearing or listed as an issue. 3 The next issue deals with the legal water, legal user 4 of water protection under Water Code Section 1702. We are 5 not proposing any real change, but the State Water 6 Contractors felt that the language that we had in D-1641 7 could be a little clearer. And, consequently, we are 8 suggesting to delete the language we had on that issue and 9 put the State Water Contractors' language in. The substance 10 of the finding is still the same, that Water Code Section 11 1702 is not the proper place to settle disputes between 12 water supply contractors and their water suppliers with 13 water rights. So, it doesn't constitute, in our mind, a 14 substantial change but the language, we believe, is a little 15 clearer, so we recommend that change. 16 The next change deals with, again, the Sacramento 17 Valley Water Users Association issue that they want 18 clarification that a CEQA lawsuit can be initiated after 19 Phase VIII if the Board uses the CEQA document as adopted in 20 December to support the first seven phases. And this 21 language gets right to the point and tries to clarify that, 22 in fact, they do have the right to come forward with a 23 subsequent CEQA lawsuit after the Board adopts a Phase VIII 24 decision if, in fact, it uses the same CEQA document. 25 The next change, this is Number 8, on Page 49 is a CAPITOL REPORTERS (916) 923-5447 6 1 technical correction. Our transcripts that we were looking 2 at listed the months January, June, August and September, 3 but the Contra Costa Water District has told us that it 4 actually is January, June, July and August. This particular 5 change, this particular provision, is there for the 6 protection of Contra Costa Water District. The biological 7 opinion for their diversion restricts their diversion when 8 X2 is to the east of this location in these months and the 9 Delta is in excess conditions. And, so, under the joint 10 point of diversion, it would cause that shift, and we're 11 putting this provision in to protect them against the joint 12 point of diversion impact. 13 The next change was again requested by Contra Costa 14 Water District. They feel that there is the potential under 15 the joint point of diversion to adversely affect the 16 salinity at their intakes. We presently have a provision 17 very similar to this in to protect South Delta Water Agency 18 from water level changes. The change would allow Contra 19 Costa Water District or require Contra Costa Water District 20 or rather the Department and the Bureau to work with Contra 21 Costa Water District on a response plan, and then it would 22 have to be approved by the Division Chief of water rights. 23 I am now on Page 50, Number 10. This is a purely 24 technical correction. We were directed in the last order, 25 in D-1641, to include this term into the water permits of CAPITOL REPORTERS (916) 923-5447 7 1 the Department and the Bureau. Somehow this term, when 2 transcribing the changes, got put into the water permits of 3 the Bureau but was not put into the water permit terms of 4 the Department. The purpose of the term is to specify the 5 Board's response when there are salinity objective 6 exceedances in the South Delta. So that seems like an 7 appropriate change. 8 Again, Number 11 is what I would characterize as a 9 technical correction. The original footnote said the 10 condition, it is 1 and 2 and had the same language. We are 11 proposing Conditions 1, 2 and 3. This particular term deals 12 with the New Melones Reservoir storage permits. And the 13 Board in D-1641 wanted to clarify that they could use other 14 sources of water or other means to meet their obligations 15 under that, and so we wanted that to apply to all terms in 16 the New Melones Reservoir storage permits, and we are 17 suggesting that change. 18 The next one we had was recommended by the South Delta 19 Water Agency, this is Number 12. The South Delta Water 20 Agency was concerned that the term, this particular term, as 21 originally drafted could be construed to say that the 22 projects did not have to meet the -- the Bureau does not 23 have to meet the Vernalis salinity objectives for the first 24 five years, and after the five years are up, if there is 25 concern about meeting the objective, a report had to be CAPITOL REPORTERS (916) 923-5447 8 1 filed. 2 And that was never the intent. The intent was always 3 that the objective was to be met. However, we, as Board 4 Members, are aware there is an ongoing problem with meeting 5 Vernalis salinity objectives under all hydrologic 6 conditions, and we want to have the general term 7 incorporated here. That in five years from now that if the 8 Bureau through its modeling studies, despite what action is 9 taken through the five-year period, it is still going to 10 have that problem meeting the salinity objectives, that we 11 have a report that outlines what actions it has taken to 12 achieve the objective. In the meantime, it is still the 13 Board's intent that the Bureau should use every means 14 possible to meet that Vernalis salinity objective. And the 15 change is meant to reflect that. 16 Number 13 is purely changing some apostrophes. 17 And then Number 14 deals with clarification of the 18 mitigation requirements for the consolidated place of use. 19 That goes on for a couple of pages. But, really, the change 20 that we are recommending here or the clarification that we 21 are recommending comes into three issues. 22 First is, we want to make it clear that the mitigation 23 is not expected to exceed one-to-one for the consolidated 24 place of use. That there is, by our calculation, 45,390 25 acres of habitat that's been converted and that the CAPITOL REPORTERS (916) 923-5447 9 1 mitigation should never exceed that quantity. We also 2 wanted to make it clear that -- the second clarification is 3 that if the Bureau decides to meet this mitigation 4 requirement by purchasing habitat that has a value in excess 5 of the habitat that was converted, that by a measurement 6 that would be used by them they can reduce the 45,390 to 7 reflect an equivalent habitat protection. 8 The third is, we wanted to make it very clear that the 9 three methods that are available to the Bureau to reduce the 10 mitigation requirements that are required under this 11 provision: 12 The first one is if the encroachment is not subject to 13 CEQA, because it occurred prior to the effective date of 14 CEQA. The second one is if the encroachment was previously 15 mitigated and that can be used to reduce that 45,390. And 16 the third is if the CVP diversions began after -- the CVP 17 deliveries began after the land had already been converted, 18 then mitigation would not be required under that 19 circumstance. 20 So, that whole section on Page 80 -- rather, 51, 52 and 21 53, all are meant to cover those three general 22 clarifications. 23 Having gone through those, those are the changes that 24 we're recommending right now that came in in the petitions 25 for reconsideration. I would like to spend just a minute or CAPITOL REPORTERS (916) 923-5447 10 1 two going over the changes that we're not recommending 2 changing, were things that were of substantial discussion in 3 the petitions. 4 The first one is the Condition 2 on the permits of the 5 Bureau and the Department. Condition 2 on the Bureau and 6 Department's permits require them over the next two years to 7 meet the outflow in Rio Vista flow requirements in the 1995 8 Bay-Delta Plan. The Rio Vista requirements already are 9 required under the D-1485 permits, so functionally the issue 10 here is meeting the outflow requirement, and the requirement 11 is a temporary one. 12 I think that the concern that has been expressed by 13 most parties is they felt there wasn't adequate notice given 14 to the parties on this. And I think that in light of the 15 fact that we've gotten so many comments that felt there was 16 a problem with notice, it is only fair to say that we could 17 have obviously done -- staff could have obviously done a 18 better job in noticing this. Nonetheless, when we noticed, 19 in May of 1998, the renewal of 95-6, we put in language 20 that it was our intent to cover this possible action. The 21 language, and, really, the issue I think that it all breaks 22 down to, comes to three words in which we said we were 23 considering extension of 95-6 or, and the three words being 24 "equivalent temporary compliance." 25 It is our position that equivalent -- what we are CAPITOL REPORTERS (916) 923-5447 11 1 proposing in this instance constitutes equivalent temporary 2 compliance. The projects already have committed to meeting 3 these objectives and certainly there is no physical change 4 that is caused by the Board incorporating this into the 5 permits to ensure it becomes a permit condition. So, it 6 constitutes, in our mind, equivalent temporary compliance. 7 But I think, again, clearly some part -- there must be a 8 decent argument to support the fact that we didn't do as 9 good a job as we could have to notice the issue, because so 10 many parties are clearly surprised by the Board's action. 11 Nonetheless, we feel that the notice did exist, and we are 12 recommending that we move forward with this just to ensure 13 the objectives continues to be met. 14 The second one was a reservoir refill requirement. We 15 received a request from Merced Irrigation District, Modesto 16 Irrigation District and Turlock Irrigation District to 17 change a term that was incorporated into their permits as a 18 result of our approval of the San Joaquin River Agreement. 19 Specifically, we asked them or the term directs them not to 20 store water, to refill water that was released under the San 21 Joaquin River Agreement, that they can't refill that with 22 New Melones Reservoir released water, is releasing water at 23 all to meet the Vernalis salinity objective. 24 Their concern is that this sets in their mind the water 25 right priority system on its head since they are curtailing CAPITOL REPORTERS (916) 923-5447 12 1 diversions at a time to support the operations of a junior 2 water right holder. We did not mean that term to reflect 3 the water right priority system, but rather the protections 4 under Water Code Section 1702 which said that there should 5 be no injury to legal users of water, and the modeling 6 indicated that there could be under their refill operations 7 an injury to these parties to the Bureau. 8 However, I would note that the Bureau has offered to 9 backfill the San Joaquin River Agreement. And when we 10 looked over the San Joaquin River Agreement, it wasn't 11 necessarily clear to us that this backfill commitment 12 included this particular water supply impact. If, however, 13 the Bureau wants to state that it did, in fact, or was 14 intended to backstop this water supply impact as well, then 15 the recommendation of staff would be to change the language 16 in the water right permit term and incorporate the word 17 "stored water"; that is, that the refill operations are 18 precluded when the New Melones Reservoir is releasing stored 19 water for the purpose of salinity control. That would 20 reflect the water right priority system. 21 We have a comment from Santa Clara Valley Water 22 District, and they request expansion of the CVP place of use 23 to include their entire service area. We feel the CEQA 24 document we have, that we're using to support our document, 25 does not support that particular action. The Draft Order CAPITOL REPORTERS (916) 923-5447 13 1 recommends that they file a petition, work with the Bureau, 2 file a petition they can use with a CEQA document that they 3 feel is appropriate to support their petition at that 4 time. 5 And the last one is we continue to hear about the 6 narrative salmon objective. We've heard about that a lot 7 over the last couple of years, the Board. A lot of 8 environmental organizations, particularly, feel that we 9 should be increasing potentially or at least evaluating the 10 increased flows that may be necessary to implement the 11 narrative objective. It's my position, staff's position, 12 that probably the most appropriate way to look to meet the 13 narrative objective at this point is all of the actions that 14 are being undertaken by other agencies to improve habitat 15 conditions. That what is important at this point is to 16 implement the flow objectives. At sometime in the future 17 this might be an issue that requires some flow augmentation, 18 but that it is premature at this time for us to try to 19 estimate what additional flow augmentation might be required 20 to implement an objective like that. And that instead, it 21 is processes like CAL/FED and CVPIA that are taking actions 22 to improve habitat conditions that would be a principal 23 mechanism for trying to achieve that objective. 24 After we finished the petitions for reconsideration, I 25 have received nine written comments on the Draft Order that CAPITOL REPORTERS (916) 923-5447 14 1 was mailed out, and I have also received one verbal 2 comment. We have reviewed the nine comments and we have one 3 additional change based on those that we would like to 4 recommend, but that is all we have at this point. 5 Specifically, we received a letter from Kronick, 6 Moskovitz, Tiedemann & Girard in which they claimed that on 7 Page 4 of the Draft Order, in the last paragraph, that they 8 did not object to approval -- that the San Luis & 9 Delta-Mendota Water Authority did not object to the approval 10 for petition to consolidate and conform purpose and place of 11 use and, therefore, they should not be listed as a party 12 that discussed or that raised this topic. And so we would 13 recommend in the last paragraph that "San Luis & 14 Delta-Mendota Water Authority and" be deleted. 15 I have received one verbal comment that I put into an 16 E-mail message to the Executive Director. I understand that 17 it got sent to the Board Members. And, consequently, we 18 have made it available to all the parties on the table over 19 there in order to be sure that there isn't any inappropriate 20 communications that are occurring. 21 Those are the only comments that I had on this. I 22 think you probably heard enough from me. But if you have 23 any questions, I am willing to talk some more. 24 CHAIRMAN STUBCHAER: Any questions for Mr. Howard at 25 this point in time? CAPITOL REPORTERS (916) 923-5447 15 1 Thank you, Mr. Howard. 2 Now we are going to take a brief recess while the court 3 reporter sets up here. If any of you have not yet submitted 4 your blue speaker cards, you could take this opportunity to 5 do so. 6 Mr. Howard. 7 MR. HOWARD: Believe it or not, I forget one thing to 8 say. I was also -- it was also my intent to say that there 9 has been no response to the Board to the verbal 10 communication that was received, and, I guess that is 11 important to say. 12 Thank you. 13 CHAIRMAN STUBCHAER: Thank you. 14 About three minutes. 15 (Break taken.) 16 CHAIRMAN STUBCHAER: We will come back to order, 17 please. 18 The Court Reporter will transcribe Mr. Howard's remarks 19 from the audio tape, and what occurs from now on in this 20 session will be recorded directly by her. 21 We have 18 speaker cards. No one has requested more 22 than ten minutes. We will set a ten-minute limit per 23 speaker. First we will hear from William Johnston, followed 24 by Tim O'Laughlin. 25 William Johnson. CAPITOL REPORTERS (916) 923-5447 16 1 MR. JOHNSON: Good afternoon, Mr. Chairman. 2 I do not have any comments on the matter before you. I 3 just wanted to compliment you on your eight years of service 4 to the Board and to say that we will miss you. I don't know 5 if everyone knows this is your last day. You received a 6 couple of beautiful resolutions this morning. I don't have 7 a printed resolution, but I have words in my heart and I 8 want to thank you for your service. 9 And I also want to thank Bill and Walt for their 10 service. They are both leaving, and some of you have 11 announced this morning this is Walt's last actual meeting 12 with the Board, I believe. 13 CHAIRMAN STUBCHAER: Actual meeting, workshop. 14 MR. JOHNSTON: I've worked with Bill since he was the 15 counsel for my Regional Board 5 back in the 1970s, so thank 16 you. 17 CHAIRMAN STUBCHAER: I really appreciate the comment. 18 The words mean more than paper. 19 Are there any other speakers who wish to echo similar 20 sentiments? 21 UNIDENTIFIED VOICE: Mr. Chairman, is there a time 22 limit on those comments? 23 CHAIRMAN STUBCHAER: Of course not. 24 Tim O'Laughlin will be followed by Ed Winkler. 25 MR. O'LAUGHLIN: No comments. CAPITOL REPORTERS (916) 923-5447 17 1 CHAIRMAN STUBCHAER: Ed Winkler followed by Tom 2 Birmingham. 3 MR. WINKLER: Can I request to go after Greg Wilkinson 4 of State Contractors? 5 CHAIRMAN STUBCHAER: All right. We will do that. 6 Tom Birmingham followed by Dante John Nomellini. 7 MR. BIRMINGHAM: Good afternoon, Mr. Chairman and 8 Members of the Board. 9 I would like to take a few moments and address one 10 aspect of the proposed order, and it is the subject which 11 was the subject of my comments in December. And they 12 pertained to whether or not Westlands Water District can 13 raise the protection of Section 1702 of the Water Code in 14 opposition to the requested change in purposes of use for 15 the Bureau's permits. 16 I would like to begin by referring to the proposed 17 order, particularly on Page 17, where the question is asked: 18 "Can buyers of water from an appropriator prevent the 19 appropriator from changing its water rights?" Like so many 20 other issues, when a particular result is being sought, the 21 result can be influenced by the question that is asked. And 22 the answer to that question, there isn't any disagreement 23 among anyone in this room with any knowledge about water 24 rights, can buyers of water from an appropriator prevent the 25 appropriator from changing its water rights, the answer to CAPITOL REPORTERS (916) 923-5447 18 1 that question is no. We all agree with that. 2 But those are not the circumstances with which the 3 Board is dealing. Westlands Water District is not a mere 4 buyer of water. I would like to go back and have the Board 5 ask itself one very simple question. In water rights 6 Decisions 893, 990 and 1020 the decisions that this Board 7 issued granting to the Bureau the permits, which are the 8 subject of the petition, this Board said that the right to 9 use the water appropriated under the permits shall be 10 appurtenant to the land irrigated with that water, and those 11 rights shall continue in perpetuity. 12 That language gives Westlands Water District on behalf 13 of its landowners standing beyond the buyer of water. 14 And why was that language included in those water 15 rights decisions? The very simple reason, if you can go 16 back and look at the historical context of that language, is 17 the State of California wanted to prevent the kind of change 18 which is currently being sought by the Bureau of Reclamation 19 and the Department of Interior. 20 The Ivanhoe case addressed this question squarely. In 21 the Ivanhoe case the landowners challenged the contract 22 between the district and the United States because there was 23 no guaranteed right to continue delivery of water. That 24 question went to the Supreme Court, and the Supreme Court 25 said, no, there is a guaranteed right to water. CAPITOL REPORTERS (916) 923-5447 19 1 And I would like to read to you what the Supreme Court 2 has consistently said about this issue, and here I am 3 referring to a portion of the decision in California versus 4 United States, where the Supreme Court quoted from its 5 earlier opinions and said: 6 Although the government diverted, stored and 7 distributed the water, the contention of the 8 petitioner, the United States in this case, 9 that thereby ownership of the water or water 10 rights became vested in the United States is 11 not well founded. Appropriation was made not 12 for the use of the government, but under the 13 Reclamation Act for the use of the 14 landowners. And by the terms of the law and 15 of the contract already referred to, the 16 water rights became the property of the 17 landowners, wholly distinct from the property 18 right of the government in irrigation works. 19 The government was and remains simply a 20 carrier and distributor of the water with the 21 right to receive the same or the sums 22 stipulated in a contract as reimbursement for 23 costs. (Reading.) 24 Westlands Water District is not a mere buyer of water. 25 The landowners within Westlands Water District, the lands CAPITOL REPORTERS (916) 923-5447 20 1 within Westlands Water District, have appurtenant to them 2 the right to use the water which is the subject of these 3 petitions. 4 We are not asking this Board to engage in resolution of 5 the dispute concerning some contracts; we are asking this 6 Board to answer a substantive law raised under the 7 California Water Code and, that is, will this change 8 petition injure users of water. 9 I addressed this point many times. I am uncertain that 10 my comments today are going to persuade the Board to change 11 its position on this question. 12 There is one other aspect of the proposed decision that 13 I would like to touch on very briefly because it represents 14 a fundamental change in the policy of this state, and this 15 Board certainly has within its power the authority to make 16 the change. But I think before the Board makes that change, 17 it needs to be cognizant that it is, in fact, making a 18 significant change in the policy of this state as to who is 19 going to control the use of the water resources of the 20 state. 21 On Page 18 of the proposed decision, it states: 22 The U.S. Bureau witnesses made it clear that 23 the USBR has been using water for fish and 24 wildlife protection in the past few years 25 while reducing the amount of water it makes CAPITOL REPORTERS (916) 923-5447 21 1 available to its water supply contractors, 2 and that it intends to continue to operate in 3 this manner. Under Section 8 of the 4 Reclamation Act of 1902, USBR is required to 5 operate in compliance with state issued water 6 rights unless that would conflict with clear 7 Congressional directives. The federal 8 Endangered Species Act appears to be a clear 9 Congressional directive that mandates the 10 USBR use a portion of its water for fish and 11 wildlife purposes. (Reading.) 12 The last sentence that I just read, "the federal 13 Endangered Species Act appears to be a clear Congressional 14 directive that mandates the USBR use a portion of its water 15 for fish and wildlife purposes," is a finding by this Board 16 that is contrary to the position that the state of 17 California has litigated to the Supreme Court on at least 18 three occasions that I am aware of: in Arizona versus 19 California, in California versus United States and 20 California versus the Federal Energy Regulatory Commission. 21 In each one of those cases the State of California took 22 the position it should be up to the state to determine how 23 its water resources should be used. And it is correct that 24 in California versus United States the Supreme Court did 25 hold that Section 8 applies unless there is a clear CAPITOL REPORTERS (916) 923-5447 22 1 Congressional directive that would conflict with the state 2 substantive water law. But, for this Board to find that a 3 statute of general application, a statute like the 4 Endangered Species Act, is a clear Congressional directive 5 that takes from this Board its power to impose terms and 6 conditions on water right licenses would conflict with the 7 policy advocated by the State in each one of those prior 8 cases. And you need to know that is the change in water 9 policy that that one sentence represents. 10 Finally, Westlands has not argued that the Bureau of 11 Reclamation can operate its project without regard to the 12 Endangered Species Act. We have always acknowledged that 13 the Bureau must comply with the Endangered Species Act. 14 That is not the question that is presented. The question 15 that is presented is whether amending the permits to permit 16 the use of water for fish and wildlife enhancement to comply 17 with the CVPIA, not ESA, the CVPIA result in an injury to a 18 legal user of water of waters involved. 19 From our perspective, the answer to that question is 20 yes. But to get there, to get to the result that you want 21 to get to or that is indicated by these decisions. You do 22 not have to include a statement to the effect that the 23 Endangered Species Act is a clear Congressional directive, 24 and that sets a very dangerous precedent. 25 If you have no questions, that completes my remarks on CAPITOL REPORTERS (916) 923-5447 23 1 the proposed decision. 2 I would like to have a moment, though, also, on a 3 personal matter to congratulate Messers Stubchaer and Pettit 4 on the end of their years of service to the people of the 5 state. My experience has been that both of you have taken 6 very seriously your responsibility to the state, and you 7 have always treated the public that appears before the Board 8 with a great deal of respect and courtesy. I would like to 9 thank you personally for the courtesies you extended to me 10 in my practice before the Board. 11 CHAIRMAN STUBCHAER: Thank you, Mr. Birmingham. 12 Mr. Brown has a question for the substance. 13 MEMBER BROWN: Are you suggesting, Mr. Birmingham, that 14 the elimination of that one sentence, is that your bottom 15 line here? 16 MR. BIRMINGHAM: I think that the elimination of that 17 one sentence does not affect the substance of the decision, 18 but I think it would have a great deal of import with 19 respect to future decisions concerning how the Endangered 20 Species Act or other federal laws of general application 21 affect the Bureau's operation of the project and whether or 22 not those laws of general application affect the ability of 23 this Board to impose terms and conditions on the water right 24 licenses or permits issued to the Bureau of Reclamation for 25 operation of the reclamation project. CAPITOL REPORTERS (916) 923-5447 24 1 MEMBER BROWN: Thank you, Mr. Birmingham. 2 Mr. Chairman. 3 CHAIRMAN STUBCHAER: Mr. Brown. 4 MEMBER BROWN: Mr. Birmingham's argument is very 5 persuasive on this one issue. I suggest we wait to hear the 6 other comments relating to it, but would ask that staff be 7 prepared to address that specifically at the appropriate 8 time. 9 CHAIRMAN STUBCHAER: Thank you, Mr. Brown. We are 10 going to hear comments of all the parties. And we'll 11 probably go into executive session to discuss comments and 12 give direction to staff on what any additional changes the 13 Board wishes to make. 14 Next we will hear from Dante John Nomellini. He will 15 be followed by Arthur Godwin. 16 MR. NOMELLINI: Mr. Chairman, Members of the Board, at 17 the outset, congratulations on your years of service. Mr. 18 Pettit, I hope you don't go beyond subpoena power of the 19 state court. In jest. 20 MR. PETTIT: That is something to look forward to. 21 MR. NOMELLINI: You have been very successful up to 22 the end, Mr. Stubchaer, in keeping the violence from 23 erupting, but I notice Mr. Howard is suffering a bit and I 24 am not sure what the source was, but -- 25 CHAIRMAN STUBCHAER: He blames it on his baby. CAPITOL REPORTERS (916) 923-5447 25 1 MR. NOMELLINI: Anyway, congratulations on your years 2 of service. I appreciate the way in which you have treated 3 all of us and allowed us to argue back and forth and 4 expeditiously proceed with the hearing. 5 First of all, I guess it is not a strange thing for you 6 to hear that we are unhappy with a number of aspects of the 7 proposed decision. We did not seek that the language on the 8 Delta Protection Act or the language on the Watershed 9 Protection Act be deleted, but rather we sought what we 10 considered to be correct interpretation of the law. 11 These are technical matters that we suspect have been 12 handled more at staff level than at Board level. But the 13 Delta Protection Act was described in the proposed decision 14 as applying only to the state and federal governments. And 15 by its terms it clearly applies to them, but it applies to 16 all other water users as well, particularly with regard to 17 the duty not to export any water to which Delta users have 18 rights, the integration of releases from storage to the 19 maximum extent possible to fulfill the purposes of the act 20 which are both to provide salinity control and an adequate 21 water supply. 22 The language of the prior draft spoke to an assumption 23 that since water was not being exported that they didn't 24 have to deal -- you don't have to deal with the Delta 25 Protection Act in terms of your considerations with regard CAPITOL REPORTERS (916) 923-5447 26 1 to the San Joaquin River Agreement. In our view, when the 2 export pumps are running, there is export of all of the 3 water to some degree that comes into the system and, 4 therefore, that is an incorrect conclusion. 5 We, of course, believe the Watershed Protection Act has 6 clear language about directly and indirectly not depriving 7 those in the watershed origin, the areas immediately 8 adjacent thereto of their prior right to have their needs 9 met. We think that is applicable. We think the State Board 10 has an affirmative duty to apply these policy statutes in 11 consideration of various water right applications that comes 12 before you, including change petitions. 13 Now, perhaps for different reasons then expressed by 14 Mr. Birmingham, we, too, are unhappy with the idea and the 15 concept that's starting to get embedded in decision making 16 of this Board that nobody is a legal user of water when it 17 comes to finding that there is no significant injury on a 18 transfer or change petition. 19 What that means is whoever comes before the Board for 20 the changes enjoys the priority of the prior permit and 21 escapes the necessity of coming in for a subsequent permit 22 application which would have a junior priority. And we 23 think the idea of the no injury portion of the law was to 24 make sure that those things didn't adversely impact other 25 people who legally use water. We think it is hypertechnical CAPITOL REPORTERS (916) 923-5447 27 1 and incorrect decision that is being brought in to not only 2 the prior draft but the final draft as well. 3 The last point I want to make focuses in on the 4 Department of Water Resources' comments. The Department of 5 Water Resources and others have come before you and said you 6 shouldn't impose Condition 2 on them because of inadequate 7 notice. I don't know, we talked about the length of time 8 that that should be imposed on the Department and the 9 Bureau. We had quite a bit of discussion as to what the 10 length was, and was it perpetual or extending indefinitely. 11 It was later changed to a couple of years. 12 But more importantly, Dave Anderson's statement talks 13 about their being a complete understanding of the purpose 14 and scope of the 95-6 proceeding. If you remember, I came 15 before you and brought evidence of our concern that a deal 16 had been made that affected the independence of the Board 17 and its decision making. I was told at that time that that 18 is a matter to be dealt with in court. 19 And I think, Mr. Attwater, I am quoting you correctly, 20 that is a matter for the court. We went to court. And you 21 asked the judge to throw us out because the federal 22 government wasn't there, and he did and, therefore, we had 23 no resolution in court. 24 I raised that same issue with additional evidence at 25 the beginning of this hearing, which I think was 1998. And CAPITOL REPORTERS (916) 923-5447 28 1 I was assured by the Board in its statement that staff 2 participation was simply as an observer and that the Board 3 itself, of course, did not participate in any deal making or 4 making anything. 5 There is evidence in the record that indicates there 6 could have been more to that. There could have been some 7 kind of commitment. Today, I ask you to look at the 8 comments of the Department of Water Resources where Dave 9 Anderson tells you it is wrong for you to impose Condition 2 10 on the Department of Water Resources because everybody had 11 the understanding. And as I read it, the understanding was 12 that that would not be done. I think it's time to have a 13 full hearing on these types of matters and these types of 14 understanding. And I think it certainly ought to be done. 15 I would urge that you do it before you render your final 16 decision on this order. I am going to address it again 17 prior to Phase VIII. And I know, Mr. Stubchaer, you are not 18 going to be here. But I think it is very important that we 19 get this matter cleared. 20 There is a language from the statements of the 21 Department of Water Resources which really surprises that 22 given this purpose was understood personally by Board staff 23 and in the Board's own notice. Who are the staff members 24 that were part of that understanding? Does he mean that 25 understanding was there was some kind of commitment? Does CAPITOL REPORTERS (916) 923-5447 29 1 understanding mean there was an agreement? Who? Did those 2 people participate in the recommendations to this Board? 3 And what were those communications? 4 We cannot come before you as representatives of 5 clients, and these are important interests to our clients, 6 of course, I know you know that, involves a lot of money. 7 Water is worth a lot of money. And if we can't confront 8 what goes on outside the hearing and bring that into the 9 hearing record, and we can't find out about it, we don't 10 have a chance of refuting that. 11 I mean it maybe straight up good stuff and it may be 12 all fouled up. But the fairness of the hearing process 13 demands that we be given a fair short of that. And I know 14 that my complaints about ex parte communications have been 15 met with the argument that there is no ex parte 16 communication until the notice of hearing goes out. This 17 stuff went out while we had hearings. We have known we are 18 going to have a water right proceeding going all the way 19 back to the Racanelli decision. So we all knew that was 20 going on. 21 I think that this is a very disturbing thing, and I 22 would ask that we be given the opportunity to have this 23 heard. I would ask the Department of Water Resources and 24 Mr. Anderson in particular to give us the details of these 25 communications whereby the Department believes it was CAPITOL REPORTERS (916) 923-5447 30 1 understood that you would not impose requirements on the 2 Department. 3 Leaving it on that somber note, I think I have used 4 most of my time. 5 Thank you. 6 CHAIRMAN STUBCHAER: Thank you, Mr. Nomellini. 7 Any questions of Mr. Nomellini? 8 Arthur Godwin, followed by Robert Maddow. 9 MR. GODWIN: Good afternoon, Mr. Stubchaer and Members 10 of the Board. These comments are being provided on behalf 11 of the Turlock Irrigation District. 12 First of all, we appreciate the language on Page 29 of 13 the Draft Order that provides that the Executive Director 14 can act to insure that the refill condition is not imposed 15 when it would not otherwise be in effect. 16 That language however is only in the discussion of the 17 petition for reconsideration that was failed by the Merced 18 and Turlock Irrigation District. It does not appear in the 19 order itself. 20 We would respectfully request that the order be 21 modified to reflect that the Executive Director has the 22 authority to ensure that the refill condition not be 23 misused. 24 Secondly, I would like to concur with the comments made 25 by Mr. Birmingham with respect to the ESA language on Page CAPITOL REPORTERS (916) 923-5447 31 1 18 of the Draft Order. We support his statements. 2 Third, I would like to say that I concur with the 3 suggestion that Mr. Aladjem will be making on behalf of the 4 Merced Irrigation District in regards to the refill 5 condition. 6 Thank you. 7 CHAIRMAN STUBCHAER: Thank you, Mr. Godwin. 8 Robert Maddow followed by Jeanne Zolezzi. 9 Good afternoon to you, Mr. Maddow. 10 MR. MADDOW: Good afternoon, Mr. Chairman, Members of 11 the Board. I will echo the comments of the speakers before 12 me with regard to the departure from state service of 13 yourself, Mr. Chairman, and Mr. Attwater and Mr. Pettit. 14 I appear today on behalf of the Contra Costa Water 15 District. The district did file a petition for 16 reconsideration and a number of changes which were suggested 17 in that petition were actually made, and we appreciate that 18 very much. 19 We do rise today in regard to an issue we addressed in 20 a letter which was sent to the Board and to the parties 21 concerning the Draft Order. In the original version of the 22 Decision 1641 there was discussion of the Watershed 23 Protection Act and the Delta Protection Act with which we 24 did not agree. We suggested a number of ways in which that 25 might be addressed, and the Board actually has in the Draft CAPITOL REPORTERS (916) 923-5447 32 1 Order proposed to modify the decision by deleting a portion 2 of the language to which we objected. 3 However, our concern is that it has now expressed in a 4 footnote on Page 12 of the Draft Order a legal 5 interpretation of the Watershed Protection Act which frankly 6 we don't think is necessary in the Draft Order. You have 7 already deleted what we found to be the improper or 8 offensive language in the Draft Decision, that is if you 9 adopt the Draft Order. By leaving this footnote in the 10 Draft Order, stating in essence as the State Board's legal 11 interpretation of that provision of the Watershed Protection 12 Act, we think the Board would be staking out a position in 13 this order, not in the decision, in the order that would be 14 lying on the shelf ready to be dragged out at some future 15 time. 16 It's staking out a legal position that we think is 17 arguable. We think it is wrong legally. We think it is 18 something about which there can be considerable argument. 19 We think it would be unfortunate if left in the position of 20 having to make a decision as to whether or not to argue 21 about not on the language in Decision 1641 as it is being 22 modified, but the language of Footnote 3 on Page 12. 23 Our letter of March 14th addressed to you, 24 Mr. Chairman, signed by one of my partners, suggests a way 25 in which without doing great damage to the proposed decision CAPITOL REPORTERS (916) 923-5447 33 1 you could make it clear that the Board recognizes there is 2 still room for argument about the legal interpretation of 3 the Watershed Protection Act, which is stated in that 4 footnote. We respectfully suggest that the Board make that, 5 what we believe is a relatively minor change in the Draft 6 Order. 7 We appreciate the responsiveness of the Board to the 8 other matters raised in the district's petition. And that 9 concludes my remarks. I would be happy to answer any 10 questions. 11 CHAIRMAN STUBCHAER: Any questions? 12 Thank you, Mr. Maddow. 13 Jeanne Zolezzi followed by Karna Harrigfeld. 14 MS. ZOLEZZI: Good afternoon. Jeanne Zolezzi 15 representing Stockton East Water District. 16 In our oral comments today I will only be highlighting 17 three issues, but our written comments do cover all the 18 issues of concern and our original objection as stated in 19 the petition for reconsideration do still stand. 20 The first item I want to address is the refill 21 operation condition. And we just wanted to stress, as Mr. 22 Howard did this morning, that the refill conditions, we 23 believe, are very much needed. In our view they don't go 24 far enough, as we expressed in our written comment, to 25 ensure the protection of the rights of the Bureau on New CAPITOL REPORTERS (916) 923-5447 34 1 Melones because the impacts from the refill operations do 2 extend beyond the refill period. And the refill operation 3 condition only apply to that very period when refill 4 operations are being undertaken. 5 But just to move on, we were concerned that Mr. Howard 6 mentioned this morning that it would be possible that those 7 refill conditions could be amended in a way requested by the 8 condition permit holders if the Bureau were to state that 9 it, indeed, intended those consequences as a consequence of 10 its backstopping obligations. We think that you need to 11 look not to what the Bureau might say today about what it 12 intended, but what it testified to during the hearings. 13 Its testimony again and again during the hearings was 14 that it did not intend to adversely impact New Melones 15 contractors by the backstopping obligation. That should be 16 the statement that is relied upon here and the junior water 17 right holders should be protected. And to that extent we do 18 not agree that the order should be amended to include the 19 Executive Director's authority to alter the condition upon 20 certain circumstances. The condition is needed to protect 21 us. The parties should have to petition the Board to change 22 those conditions, and that works both ways. If we can show 23 evidence that it is not protecting, we would have to come 24 back to this Board and petition. We have asked for it to be 25 made more broad, but right now it is incumbent upon us to CAPITOL REPORTERS (916) 923-5447 35 1 prove it and come in and complain; and we think that that 2 same burden should be held by the permit holders. 3 The second issue is the use of New Melones water for 4 meeting the Vernalis flow standards. You will recall that 5 Decision 1641 imposes the condition to meet Vernalis flow 6 standards other than in the VAMP period, April/May, only on 7 New Melones Reservoir, on no other permit holder. This was 8 done despite the fact that Decision 1641 also acknowledges 9 there was no evidence to support that imposition, and there 10 was no analysis done that, in fact, New Melones should be 11 the one to assume that responsibility, even though D-1641 12 finds that the entire CVP has adversely impacted the San 13 Joaquin River. 14 Now, the Draft Order before you today states that 15 imposing this condition only on New Melones does not treat 16 it differently from other CVP projects because the condition 17 does not require the Bureau to release water? It requires 18 the Bureau to make sure water gets to Vernalis in the 19 amounts and at the time specified. With all due respect, 20 without a similar permit condition on other water right 21 projects, other than an act of God there is no other way for 22 the Bureau of Reclamation to get water to meet the Vernalis 23 flows but to release from New Melones Reservoir. The Bureau 24 will not buy water. Without permit conditions on other 25 projects it will not release water from those other CAPITOL REPORTERS (916) 923-5447 36 1 projects. So, with all due respect, perhaps there is a 2 better justification for imposing this on New Melones other 3 than it doesn't require the release of water when it 4 certainly does. 5 Again, I would ask you to recall the testimony of the 6 Bureau that it does not intend its backstop obligation to 7 adversely impact New Melones contractors. The imposition of 8 this condition to meet Vernalis flow objectives will 9 adversely impact those contractors. It was shown in the 10 modeling and it was shown on evidence during the testimony. 11 Again, we would say that the decision must protect the 12 junior water right holders, based upon the Bureau's 13 testimony that it did not intend harm on those CVP 14 contractors. 15 The final point we wanted to make on the San Joaquin 16 River salinity, which I believe you know is a very important 17 issue to Stockton East Water District. We had hoped, 18 perhaps naively, that the Bay-Delta hearings would be the 19 impetus for this Board to take the bull by the horns and 20 address this issue which we all know has been pending on the 21 San Joaquin River for decades. We looked at these hearings 22 expectedly because of the requirement that the Board under 23 the Clean Water Act, that this Board implement the Water 24 Quality Control Plan. We thought it was an opportunity for 25 this Board to take actions that have been promised and CAPITOL REPORTERS (916) 923-5447 37 1 postponed for over seven years to set standards on the 2 river. We saw it as an opportunity to right a wrong that 3 has been perpetrated on New Melones for decades; that is, 4 release water to meet the obligations of problems caused by 5 other CVP projects. But we were disappointed. 6 As Decision 1641 states, it does not mandate specific 7 measures to resolve the drainage problems. It did not 8 relieve the burden on New Melones to release water to 9 improve water quality. No action will be taken as a result 10 of 1641 to change or improve San Joaquin River water 11 quality. In fact, Decision 1641 will not alter the status 12 quo at all. We see this as a failure and as a violation of 13 the Clean Water Act, as well as other state water law that 14 has been provided in our written comments. 15 Basically, it's been put back to the hands of Regional 16 Board that has postponed acting on this for years and years 17 as you all personally know because you directed them to do 18 otherwise. Without further action we will have to try to 19 get that action taken in another venue, and it is very 20 disappointing to us. 21 Those are three major issues that we would like the 22 Board to take consideration of today. As I said in my 23 written comments, I do appreciate the Draft Order today. It 24 looks like a lot of time was taken, a lot of consideration 25 given to the comments, and we do appreciate the changes that CAPITOL REPORTERS (916) 923-5447 38 1 were attempted to be made. 2 Thank you and congratulations on the retirement. 3 CHAIRMAN STUBCHAER: Thank you. 4 Any questions of Ms. Zolezzi? 5 Ms. Harrigfeld followed by Andrew Hitchings. 6 MS. HARRIGFELD: Good afternoon. My name is Karna 7 Harrigfeld, and I am appearing today on behalf of North San 8 Joaquin Water Conservation District. North San Joaquin 9 appeared in Phase IV of the proceedings opposing the 10 settlement agreement proposed by East Bay MUD and was one of 11 the parties that filed a petition for reconsideration. 12 The district believes that Decision 1641 should be 13 reconsidered for two reasons. First, the Draft Decision 14 adversely impacts nonsettling, legal users of water. There 15 was evidence submitted at the hearing which showed that the 16 additional water made available from the Mokelumne River for 17 fish will result in a loss of water to North San Joaquin 18 Water Conservation District because of its surface water 19 supply. North San Joaquin will take the first deficiency 20 before any deficiency suffered by East Bay MUD. 21 The Draft Order denying the petition for 22 reconsideration finds that the protection supporter under 23 Water Code Section 1702, the no injury to legal users of 24 water, do not apply to North San Joaquin because the new 25 conditions imposed upon East Bay MUD and Woodbridge CAPITOL REPORTERS (916) 923-5447 39 1 Irrigation District water rights are the result of not a 2 petition for change but a determination by the State Board 3 of the extent of the contribution by the Mokelumne River. 4 The facts are simple. East Bay MUD and Woodbridge water 5 rights have been modified as part of the Decision 1641. 6 This modification came at the request of East Bay MUD and 7 Woodbridge in the form of a settlement that was expressly 8 encouraged by this Board. 9 To say that the State Board does not have a legal 10 obligation to evaluate the impacts on other legal users of 11 water because it is not a petition for change is 12 nonsensical. The State Board in this proceeding is acting 13 in its adjudicatory capacity. It cannot for convenience not 14 apply the protections afforded to legal users of water 15 simply because the water right holders fashioned it in a 16 form of a settlement instead of petition for change. 17 East Bay MUD, frankly, has requested changes in the 18 permit, and as a result of that request legal users of water 19 on the Mokelumne River are being injured. 20 I think it is important to note that adoption of the 21 settlement agreement is not a legal allocation of their 22 responsibility, but is a negotiated settlement. Because it 23 is a settlement, the State Board should consider other legal 24 users of water on the Mokelumne River. 25 Implementation of the settlement agreement without CAPITOL REPORTERS (916) 923-5447 40 1 proper protection for legal users of water continues to 2 perpetuate the fundamental unfairness of past decisions of 3 this Board. When the State Board allocated the water rights 4 on the Mokelumne River in 1956, it gave East Bay MUD 5 priority, even though North San Joaquin filed its 6 application first and even though North San Joaquin had as a 7 purpose of use municipal uses. The underlying premise for 8 giving East Bay MUD preference was that North San Joaquin 9 could be easily served by the Folsom South Canal. As you 10 know, neither the Folsom South Canal or any contract with 11 the Bureau for American River water has been materialized 12 for North San Joaquin. Instead, the district lies within a 13 water rich area, but is effectively foreclosed from being 14 able to tap into that water. The Board cannot and should to 15 the perpetuate this injustice. 16 What is even more disturbing is the Board's failure to 17 protect the area of origin interest. There is clear 18 legislative intent and past Board decisions that support the 19 protection and the priority of water users in areas where 20 the water originates. Inbasin users are preferred over 21 exporters. 22 The broad protections afforded by the State Board to 23 area origins cannot be overlooked in these proceedings, but 24 instead must be applied to the water right holders on the 25 Mokelumne River. The Draft Order denying the petition for CAPITOL REPORTERS (916) 923-5447 41 1 reconsideration ignores this fundamental protection, and the 2 resulting effect is the denial to North San Joaquin of a 3 dependable water supply for inbasin interests. 4 The consequence of this is devastating. The resulting 5 effect will be North San Joaquin water users will increase 6 their reliance on a critically overdrafted groundwater 7 basin. North San Joaquin is located, as I mentioned, in the 8 heart of Mokelumne River watershed. We have a water right 9 permit, and we have a vital need for the water. As a result 10 of implementation of the settlement agreement, North San 11 Joaquin will once again be deprived of that water in favor 12 of exports. State law mandates that the North San Joaquin, 13 a user of water within the area of origin be protected. 14 North San Joaquin respectfully requests that the State Board 15 cure these fatal flaws by imposing a condition on the East 16 Bay MUD water right permit to reduce exports as opposed to 17 taking it from North San Joaquin. 18 Thank you. 19 CHAIRMAN STUBCHAER: Thank you, Ms. Harrigfeld. 20 Andrew Hitchings to be followed by Michael Jackson. 21 MR. HITCHINGS: Good afternoon, Mr. Chairman, Members 22 of the Board. I have just a couple comments to make, a 23 minor typographical error. 24 We submitted comments on behalf of Glenn Colusa 25 Irrigation District and other Sacramento Valley water users CAPITOL REPORTERS (916) 923-5447 42 1 supporting the amendments to D-1641 regarding the use of the 2 Bay-Delta EIR for further Bay-Delta decisions. And those 3 were Amendments 1 on Page 47 and Amendment 7 on Page 49. 4 There is a typographical error, though, I believe on the 5 amendment on Page 49 -- or excuse me, on Page 47, Item 1. 6 I think the term "project" should be stricken to make 7 it consistent with the language on Page 44 indicating that 8 that is the change that would be made. So it should read, 9 "the purpose of this proceeding" rather than project 10 purpose. 11 CHAIRMAN STUBCHAER: Makes sense. 12 MEMBER BROWN: Can we make that change? Page 47? 13 MR. HITCHINGS: Actually, not in the heading, but the 14 text itself. 15 CHAIRMAN STUBCHAER: I see it. 16 MEMBER BROWN: Thank you. 17 MR. HITCHINGS: Another more substantive issue that has 18 arisen, and this comment is not made on behalf of Sacramento 19 Valley water users group collectively, but it's an item that 20 I admittedly just noticed as I was sitting here just looking 21 at the Section 1702 discussion. This is on Page 19, and it 22 is Footnote 6. It has to do with a statement regarding a 23 prior statement by the State Water Board in Order 95-9, 24 which, I believe, is the Deer Creek decision that had to do 25 with petition for change regarding reclaimed wastewater. CAPITOL REPORTERS (916) 923-5447 43 1 In that decision there was a footnote as well stating 2 essentially in dicta that fish and wildlife might be 3 considered a legal user of water. This footnote perpetuates 4 that same dicta, and I believe that it is surplusage, 5 similar to Mr. Maddow's concerns about Footnote 3 regarding 6 the interpretation of the Delta Protection Act. 7 I think the Board should be concerned about having 8 language like this sitting in its orders when it is not 9 necessary to the decision and its dicta and surplusage, and 10 as a result I think the Board should consider having that 11 deleted from this Draft Order as well. 12 CHAIRMAN STUBCHAER: Thank you, Mr. Hitchings. 13 Does that conclude your remarks? 14 MR. HITCHINGS: Yes, it does. Thank you. 15 CHAIRMAN STUBCHAER: Michael Jackson followed by David 16 Aladjem. 17 Mr. Jackson, you've changed. 18 MS. SARACINO: I got taller, little younger. He had to 19 testify -- you can't tell on me, please. He had to leave to 20 go testify over at the Capital. 21 CHAIRMAN STUBCHAER: Excuse me. I'm sorry, Esther, we 22 are all talking at once. You can't take us all down at 23 once, so we will get back to order. 24 Would you please tell us your name? 25 MS. SARACINO: My name is Nancy Saracino. I represent CAPITOL REPORTERS (916) 923-5447 44 1 Trinity County and will be doing so in Phase VIII and am 2 pleased to be joining the fray. 3 Mr. Jackson had to leave, but asked me to convey his 4 support for the staff decision, No. 5 on Page 48, to delete 5 the references to Section 11 1 28 and on the issue of area 6 of origin. And Trinity County would also like to support 7 that change and thanks you for our time and effort. 8 Thank you. 9 CHAIRMAN STUBCHAER: Welcome to the community. 10 MS. SARACINO: Thank you very much, and I am sorry that 11 you will be leaving. 12 MEMBER BROWN: Fray works, Mr. Chairman. 13 CHAIRMAN STUBCHAER: David Aladjem followed by Fred 14 Etheridge. 15 Good afternoon. 16 MR. ALADJEM: Good afternoon, Mr. Chairman. David 17 Aladjem again of Downey, Brown, Seymour & Rohwer, appearing 18 this afternoon on behalf of a number of water users in the 19 Sacramento Valley and appearing on behalf of the Merced 20 Irrigation District. 21 On behalf of our clients in the Sacramento Valley, 22 first, let me second Mr. Hitchings' comments on behalf of 23 Sacramento Valley water users and second his comments with 24 regard to, I believe it was, Footnote 12, the Deer Creek 25 decision. I think those were appropriate comments, and the CAPITOL REPORTERS (916) 923-5447 45 1 Board, as you heard already this afternoon, needs to be 2 weary about surplusage and dicta in your decisions. I know 3 you will take that into account. 4 On behalf of Merced Irrigation District this afternoon 5 I want to say that we were very pleased by Mr. Howard's 6 presentation earlier this afternoon when he said that it is 7 very clear that the San Joaquin River Agreement establishes 8 the United States Bureau of Reclamation will backstop all 9 regulatory requirements over and above the release 10 requirements that are set for the various members of that 11 settlement agreement. 12 We believe that the refill criteria constitutes that 13 type of a requirement. And we believe that the refill 14 requirement would firmly come within, I believe it is, 15 Paragraph or Section 10 of San Joaquin River Agreement. I 16 don't have my copy here today, so I can't double-check that, 17 but I believe that is the paragraph. 18 After hearing Mr. Howard's comments, I spoke with Mr. 19 Gee on behalf of the Bureau of Reclamation, and he is not 20 prepared this afternoon, if I am correct, to stipulate to 21 the addition of the word "stored." But we would like a few 22 days to be able to work that out, and I believe we will be 23 able to come to a stipulation, and I believe that the result 24 will be that we will ask the Board jointly to add the word 25 "stored" as requested in the Merced Modesto Turlock CAPITOL REPORTERS (916) 923-5447 46 1 petition. And I believe that Mr. Godwin, as he said early, 2 joins in these comments on behalf of Merced. 3 I would be delighted to take any questions at this 4 point in time. On behalf of myself and my partner Mr. 5 O'Brien, Mr. Stubchaer, let me say we have very much enjoyed 6 over the years appearing before you and enjoyed work with 7 Mr. Attwater and Mr. Pettit. We wish you well in 8 retirement. 9 Thank you very much. 10 CHAIRMAN STUBCHAER: Thank you, Mr. Aladjem. 11 Mr. Gee, we will get to you later, not right now. 12 MR. GEE: Thank you very much. 13 CHAIRMAN STUBCHAER: Fred Etheridge to be followed by 14 Gary Bobker. 15 MR. ETHERIDGE: Good afternoon, Mr. Stubchaer and 16 Members of the Board and State Board staff. 17 Before I get into my comments, as I was driving out 18 here today, I noticed this beautiful spring day; you could 19 see the snow on the Sierras. I thought maybe as one of your 20 last official acts, Mr. Stubchaer, we might adjourn the 21 meeting inside and somehow find a place outdoors to hold the 22 hearing. Either Land Park -- 23 CHAIRMAN STUBCHAER: While we are in executive session 24 you can go outdoors with the other folks. 25 MR. ETHERIDGE: As to my formal comments, for the CAPITOL REPORTERS (916) 923-5447 47 1 record, I am Fred Etheridge on behalf of East Bay Municipal 2 Utility District. 3 As to Mokelumne River provisions in your Draft Order, 4 we believe the order is reasonable and should be adopted as 5 it is. We did read the North San Joaquin Conservation 6 District's written comments and just heard their oral 7 comments. We think essentially what they are trying to do 8 is redecide D-858, which was decided by this Board's 9 predecessor in 1946, over 40 years ago. Your Draft Order 10 notes that, I believe, on Page 15. You have already weighed 11 those issues, the area of origin considerations opposed to 12 the initial reference. You made that decision in D-858. 13 Been there and done that. It is not the purpose of this 14 proceeding to revisit the issue. 15 We think that your Draft Order on reconsideration is 16 proper. That concludes my remarks. 17 I did want to add my congratulations to both Mr. 18 Stubchaer and Mr. Pettit and Mr. Attwater on the long years 19 of service. This Board has a very difficult job balancing 20 water issues in California, which we all know are just a 21 little bit controversial and have a difficult task. You 22 have done it well. We appreciate the time and effort you 23 have put into that. 24 CHAIRMAN STUBCHAER: Thank you. I just have one 25 comment. None of us are sure it is a retirement. It may CAPITOL REPORTERS (916) 923-5447 48 1 just be a change in jobs, but anyway. 2 MR. ETHERIDGE: Congratulations, nonetheless. 3 CHAIRMAN STUBCHAER: Gary Bobker followed by Nancy -- 4 you've already spoken. 5 Good afternoon, Mr. Bobker. 6 MR. BOBKER: Good afternoon, Mr. Chairman. Thank you. 7 Before I start, I too would like to add my thanks for 8 your service, Mr. Pettit's and Mr. Attwater's. It is a 9 difficult and often thankless job, and you have displayed 10 evenhandedness and stamina in wading through some complex 11 and controversial issues. 12 On your last day, Mr. Chairman, I would extend you the 13 opportunity to go out in a blaze of glory by correcting a 14 few deficiencies. 15 Gary Bobker with the Bay Institute. I want to address 16 two issues that were raised in the joint petition for 17 reconsideration that was submitted by the Bay Institute and 18 The National Heritage Institute. 19 First is the San Joaquin River Agreement. To cut to 20 the chase, one of our concerns with that in D-1641 and in 21 the order denying our petition, the Board essentially is not 22 implementing the '95 Water Quality Control Plan's objectives 23 for Vernalis flow. The Bay Institute was one of the parties 24 that helped develop the San Joaquin River Agreement and the 25 essential -- the heart of that agreement was a package of CAPITOL REPORTERS (916) 923-5447 49 1 flows and export restrictions which we believe provided an 2 equivalent level of protection to the flow only objective in 3 the '95 Water Quality Control Plan. 4 The Board chose to reject that finding of equivalence 5 and offered some compelling reasons why it did that. We 6 believe that there is ample evidence that was entered into 7 the record to demonstrate that, in fact, the agreement is 8 equivalent to the flow objectives in the '95 plan. 9 We also believe that the Board could have done some 10 additional work, like adopt biocriterion which could have 11 been used to test whether or not the agreement is 12 equivalent. The Board chose not to do that. 13 The Bay Institute never anticipated that the Board 14 would simply adopt the agreement, per se, if it found -- 15 especially if it found that it was insufficient in some way. 16 That is, you have a responsibility, obviously, to make sure 17 that it is sufficient to discharge your responsibilities. 18 But the problem is that if isn't sufficient, then you need 19 to consider alternatives. What you seem to be doing is only 20 requiring that portion of the agreement which contains the 21 flows which are not in any way equivalent; they are lower 22 than the flow objectives in the '95 Water Quality Control 23 Plan. And then you are relying on a contractual agreement 24 to provide the additional benefits of export restrictions. 25 As it stands, I don't think the Board has a reasonable CAPITOL REPORTERS (916) 923-5447 50 1 level of assurance that that contract will either be 2 enforced as it is written or will not be renegotiated. In 3 fact, one of the primary components of that agreement was 4 that the Board should adopt the agreement's finding of 5 equivalence. It did not. The parties have not reconsulted 6 as is contemplated under that agreement. 7 I want it clearly understood that I am not accusing any 8 of the parties to the San Joaquin River Agreement of bad 9 faith. The point here is simply that the Board should not 10 be relying on the good faith of the parties to execute that 11 contract. That is, I don't think, an adequate protection of 12 the beneficial uses and the public trust that you are 13 beholden to protect. I would suggest that rather than adopt 14 the order before you that you do one of the following: 15 You either adopt the export limits that are contained 16 in the San Joaquin Agreement as part of the permits of the 17 Central Valley Project and State Water Project subject to 18 the decision-making process which is described in that 19 agreement, which should be acceptable to all the parties 20 since they negotiated it. Or you should fully implement the 21 flow objectives for Vernalis that are in the '95 Water 22 Quality Control Plan, or you should consider some 23 alternative which does fully implement them. But right now 24 you are not doing any of those things. You are not fully 25 implementing the '95 Water Quality Control Plan, and you CAPITOL REPORTERS (916) 923-5447 51 1 have not offered a justification for not doing so. 2 The second point I want to hit is the narrative 3 objective for salmon protection. I think there is some 4 basic errors in the way that the Board has characterized its 5 decision not to engage on the issue of that narrative 6 objective. The fact that there are processes like CalFed 7 and the Central Valley Project Improvement Act, which are 8 dealing with salmon protection, which doesn't relieve you of 9 your responsibilities to implement what is an objective for 10 water quality protection that you yourself adopted. 11 Secondly, the Board's characterized this as an issue 12 where it is just nonflow and that is outside of your area of 13 regulation. And, in fact, that is not true. There are some 14 very important flow issues in implementing this 15 objective. 16 And, thirdly, I think I heard Tom said earlier that 17 there wasn't enough information to be able to make some 18 conclusive findings. In fact, the Board has really decided 19 not to deal with this issue. So, of course, you don't have 20 the information because you are not engaging on that issue. 21 Since the proceedings that led up to the adoption of 22 the '95 Water Quality Control Plan, there certainly has been 23 a lot of information from the federal government in 24 preparing its obligation of 3406(b)(2) of the CVPIA. In the 25 process of preparing the Anadromous Fish Restoration Plan, CAPITOL REPORTERS (916) 923-5447 52 1 the Fish and Game's proceedings and the listing of 2 spring-run chinook salmon, there is a lot of information. 3 And, in fact, there is ample information for this Board to 4 include flow and operational criteria in the permits of the 5 parties in order to implement the narrative objective. And, 6 certainly, there is ample evidence and ample reason to make 7 sure that State Water Project is cooperating with and 8 contributing to the federal measures to achieve that 9 doubling. 10 In addition, the narrative objective refers to 11 measures in the watershed, those measures that are necessary 12 in addition to Delta measures to implement this objective or 13 achieve this objective. Those measures are not just 14 nonflow. In fact, there are instream flow requirements 15 which may be necessary in order to achieve the doubling of 16 chinook salmon as required by law, state and federal law. I 17 think that the Board, if it feels it isn't appropriate to 18 deal with that in this kind of proceeding, should initiate 19 proceedings to examine what flow requirements are necessary 20 in the tributaries in order to achieve the narrative 21 objective for salmon doubling. 22 So I would urge you both to initiate such proceedings, 23 with the upstream and the flow measures and other measures 24 within your authority in the watershed and to amend D-1641 25 to include these kinds of measures in the Delta or to CAPITOL REPORTERS (916) 923-5447 53 1 consider these in Phase VIII. But I think that those things 2 are necessary to discharge your responsibility to implement 3 a narrative criteria to have the full force of the law. 4 That concludes my comments, Mr. Chairman. 5 Thank you. 6 CHAIRMAN STUBCHAER: Thank you, Mr. Bobker. 7 Any questions? 8 Greg Wilkinson to followed by Ed Winkler. 9 MR. WILKINSON: Good afternoon, Mr. Chairman, Members 10 of the Board. As one of the more senior water rights 11 lawyers here, although I'm nearly as senior as Nomellini, I 12 would like to reflect just a little on what I think is sort 13 of a passing veneer. I was a very young lawyer facing his 14 first trial in front of a very tough federal judge, and I 15 was assured it was going to be a three-day trial on Auburn 16 Dam. It turned out to be ten weeks in front of Judge 17 McBride in Sacramento. In that case and later on in a case 18 called People ex. rel, State Board versus Forni, I spent a 19 lot of time in Bill Attwater's office and found his counsel 20 then and later on to be extremely wise, and I appreciated 21 that a whole lot. 22 Later on when we were preparing the defense of D-1485, 23 I also spent a whole lot of time out at Water Rights 24 Division out by the Cadillac dealership on the east side of 25 town. And I spent time with Walt, Jerry Johns and others CAPITOL REPORTERS (916) 923-5447 54 1 and found Walt's counsel to be equally wise. And subsequent 2 to that, Mr. Chairman, I believe I had the good wisdom to 3 hire you as an expert witness in a matter before the 4 court. 5 I think all three of you have brought great dignity to 6 the State Board and to the State of California, and I think 7 that the Board is going to be poorer for your moving on to 8 other parts of your careers. I know my practice is going to 9 be the poorer for it. 10 I am going to focus today on behalf of State 11 Contractors on Condition 2. When Tom Howard spoke earlier 12 this afternoon, I listened very carefully. For the first 13 time I thought I detected a change of some sort in the staff 14 position with regard to Condition 2, a recognition, I think 15 for the first time, that there are noticed problems with 16 that condition. 17 For about three months since early December, the State 18 Contractors have been trying to convey the message to you 19 that Condition 2 is a radical departure from prior State 20 Board orders. Compared with D-1485, compared with 95-6 and 21 98-9, Condition 2 increases the regulatory burden on the 22 State Project and Central Valley Project by more than a 23 million acre-feet of water in some years. 24 For three months we have been trying to tell you that 25 Condition 2 was not properly noticed, that it is not CAPITOL REPORTERS (916) 923-5447 55 1 supported by the evidence. In fact, we don't believe there 2 is any evidence to support Condition 2 in your 3 administrative record. 4 And thirdly, we have trying to get the message across 5 to you that Condition 2 is inconsistent with the Racanelli 6 decision, which directed this Board to develop an 7 implementation program with respect to its water quality 8 planning process that included the projects for sure, but 9 also other uses along the water course. That is the 10 language from Racanelli that I am quoting. 11 Now, until today our arguments have been met by a 12 constantly shifting explanation from the State Board staff. 13 The latest version of that is found at Pages 25 and 26 of 14 the Draft Order denying the petitions for reconsideration. 15 Now, in this order we are told first that the original draft 16 of Condition 2 was inadvertently and unfortunately phrased. 17 We are told, without any explanation, that if Condition 2 18 had assigned outflow responsibility to the State Project 19 indefinitely, it would be a Phase VIII issue, but that as an 20 interim condition it is appropriately a Phase I matter. 21 There is no explanation for this difference other than 22 the length of time, and we are told that proper notice of 23 Condition 2 was provided. 24 Now the explanation I notice -- it is somewhat 25 different from Tom's version earlier this afternoon. But CAPITOL REPORTERS (916) 923-5447 56 1 the version that appears in this Draft Order is that even 2 though Order 95-6 assigned no responsibility for meeting 3 flow objectives, that because of May 1998 Board notice that 4 asked what terms and conditions should be included in an 5 extension, that is language that was referred to here. And 6 since that reference in the May 1998 order did not refer to 7 the exact content of 95-6, that we and others were somehow 8 informed by this notice that the regulatory burden on the 9 projects could be increased by as much as a million 10 acre-feet a year. 11 Then we are told -- and I am now on Page 26 of this 12 order. I am going to quote this for the record. The 13 parties may well have been more interested in other matters 14 during Phase I than future extensions and changes to the 15 temporary compliance requirements, and as a consequence may 16 not have submitted evidence on Phase I issues that they now 17 wish they had submitted. 18 I can't begin to describe to you the reaction of my 19 Board of Directors when they read that language. I am not 20 going to try to do it here. My concern is that that 21 language is inappropriate. It is not something that I've 22 ever seen, frankly, in a State Board order. It in effect 23 says that after somehow receiving full and fair notice, we, 24 the Department of Water Resources and the Bureau of 25 Reclamation, various other CVP water users, in fact, CAPITOL REPORTERS (916) 923-5447 57 1 virtually every party in the proceeding was somehow either 2 stupid or malfeasant in that we failed to put on any 3 evidence regarding an issue that we apparently were notified 4 about. 5 I think for the first time earlier this afternoon we 6 are beginning to hear the sheer numbers of people who are 7 complaining about Condition 2 would suggest that there was 8 not proper notice of that condition provided. In fact, 9 there is nothing in the May 1998 notice that told us or 10 anybody else that is a party to these proceedings that 11 Phase I was the time to submit evidence regarding 12 responsibilities of the state and federal projects. 13 As you may recall, at that time in May 1998, Phase VIII 14 was already pending, and there had been no determination by 15 this Board at that time to render an interim decision. In 16 those circumstances there would have been no reason to put 17 on evidence of the responsibility of the projects for flows 18 in Phase I when Phase VIII was ahead of us. That is sort of 19 the backward look we are getting now in this order. 20 Importantly, I think something that this order misses. 21 It seems to recognize that there was no evidence presented 22 in Phase I regarding the responsibilities of projects on an 23 interim basis or long-term basis. The problem that you are 24 going to face, I think, is that without any evidence, there 25 is no basis for the condition, and this seems to be, at CAPITOL REPORTERS (916) 923-5447 58 1 least to some degree, an admission that there isn't any 2 evidence regarding the interim responsibilities of the 3 projects. 4 Finally, there is no indication in this order that you 5 have complied with the directive of Racanelli to develop a 6 compliance program of implementation that includes the 7 projects and other users along the water course. It simply 8 isn't there. There is nothing in the record to indicate 9 that you made that attempt. That's what was directed by the 10 Racanelli decision. 11 Now, I have never been a Board member. I applied once 12 a long, long time and was unsuccessful. It does seem to me, 13 though, that in something like this there is a natural 14 tendency, especially on technical matters, to want to defer 15 to the staff. Lord knows you are dealing with concepts like 16 X-2, Q-West, models like DWRSIM and PROSIM. These things 17 are complex, and you have an excellent staff that is very 18 technically and highly trained and can deal with these 19 matters. I think it is absolutely natural for you to rely 20 on the staff in connection with these kinds of technical 21 things. 22 What we are talking about here, though, is not a 23 technical matter. We are looking at issues of whether there 24 is proper notice, whether there was evidence in the record 25 to support a fundamental condition that will alter radically CAPITOL REPORTERS (916) 923-5447 59 1 from a regulatory perspective the operations of both the 2 major projects in the state, and those circumstances you are 3 not in a position to defer to staff. You can make the 4 judgments in that regard just as well as they can. 5 There is a reason why you are sitting up there and not 6 Bill or Walt or Harry who are very technically trained. 7 Apparently the Legislature had concluded that they 8 wanted people with more general expertise to look at these 9 kinds of decisions that were very technical and say are they 10 fair, are they reasonable, do they appear to be supported by 11 the evidence. If you do go back and you discuss this 12 decision, I would hope that you would take that perspective 13 in with you. Because in our view, this decision isn't fair, 14 wasn't properly noticed and isn't supported by the evidence. 15 I will be happy to answer any questions you have. 16 CHAIRMAN STUBCHAER: Mr. Wilkinson, will the State 17 Water Contractors support the projects that you are 18 voluntarily meeting the standards? 19 MR. WILKINSON: Mr. Stubchaer, we have been presented 20 with that issue for a number of years. Our position 21 consistently has been that it is appropriate and 22 contemplated by Bay-Delta Accord to do that. That is a far 23 different question than whether or not we would support 24 regulatory changes that as a matter of regulatory burden 25 impose this on the projects. That is a very fundamental CAPITOL REPORTERS (916) 923-5447 60 1 difference. 2 And just one more comment on that. I would think as a 3 matter of policy that this Board would want to encourage 4 folks like the State Contractors, the federal contractors 5 and project operators to do exactly what has occurred over 6 the last six years; that is to say, voluntarily put up water 7 to try and keep things running as these hearings have been 8 going. Ask yourselves, though, is this kind of an order the 9 way to encourage that kind of behavior? What it really says 10 is if you do that, it is akin to no good deed going 11 unpunished. It is going to be used against you as a basis 12 for changing the regulatory standards, the terms and 13 conditions of the project permits. If you put up water 14 voluntarily, as cheaters, there is going to be an impact on 15 you. 16 CHAIRMAN STUBCHAER: I would like to get to that issue, 17 but if the contractors support voluntary compliance with the 18 flow standards, how would mandatory compliance with the flow 19 standards cost them water? 20 MR. WILKINSON: It cost us, among other things, 21 bargaining position in proceedings like CalFed, reduces our 22 bargaining position in dealing with Fish and Wildlife 23 Service, Department of Fish and Game. What you have done 24 here, Mr. Stubchaer, is you're changing the dynamics in 25 terms of the regulatory playing field. We have been putting CAPITOL REPORTERS (916) 923-5447 61 1 up water voluntarily because we felt, frankly, that it was 2 the right thing to do. If we didn't do it, the system very 3 likely could have come unstuck while these proceedings were 4 going forward. 5 What is being done now is it is being used against us 6 as the basis for a change in the regulatory playing field. 7 That does harm us, not in terms of water, but in terms of a 8 whole series of other things that we are concerned about. 9 CHAIRMAN STUBCHAER: I believe I heard you say that it 10 can cost you up to a million acre-feet of water. I was 11 trying to get the distinction between voluntary and 12 mandatory compliance of the flow standards. 13 MR. WILKINSON: Mr. Stubchaer, a million acre-feet of 14 water is the difference in D-1641 with Condition 2 in it 15 versus D-1485, 95-6 and 98-9. None of those decisions as a 16 matter of regulatory burden required the projects, State 17 Project or CVP, to meet outflow requirements. This decision 18 does. And that is the difference, and that is where the 19 million acre-feet is, as a matter of regulatory burden. 20 CHAIRMAN STUBCHAER: If the requirement was to do what 21 you are willing to do voluntarily, can you explain for the 22 Board how your bargaining position is hurt in the CalFed 23 process or other processes? 24 MR. WILKINSON: I am going to leave that for David 25 Anderson because David is closer to that process. I will be CAPITOL REPORTERS (916) 923-5447 62 1 very frank, I have not participated in CalFed. This is 2 coming to me by the people at State Contractors who have. 3 And I am hearing from them that it does harm the bargaining 4 position. 5 Let me ask you a question, and that is since the 6 contractors and the project operators have been voluntarily 7 complying, what purpose is served by imposing Condition 2 in 8 those circumstances? I mean, it's happening. Why do we 9 need to change the regulatory playing field now? Why can't 10 we do that at the conclusion of Phase VIII? That is all we 11 are asking. We know this is going to come up in Phase VIII. 12 Why do we do it now? 13 CHAIRMAN STUBCHAER: I normally don't answer the 14 questions, but I'll try. 15 MR. WILKINSON: Last day. 16 CHAIRMAN STUBCHAER: The Accord is expiring is one 17 question. I don't want to get in a protected discussion. 18 But then the counter question would be, if this requirement 19 expires at the conclusion of Phase VIII, when presumably the 20 voluntarily compliance would also expire, what is the 21 difference? That gets back to the impact, I guess, on the 22 bargaining position, because physically there wouldn't be 23 much difference. 24 MR. WILKINSON: Depends on what comes out of Phase 25 VIII, obviously. It's our expectation that Phase VIII is CAPITOL REPORTERS (916) 923-5447 63 1 going to have a somewhat different distribution of 2 responsibility for the outflow standards than 1641. I am 3 not sure that saying that Phase VIII is coming is enough of 4 a rationale for maintaining this in effect in the meantime. 5 CHAIRMAN STUBCHAER: Ms. Forster. 6 MEMBER FORSTER: I was interested in the comments, and 7 you reminded all of us of something, and that was when we 8 were doing the Phase I, I think you're correct, that we did 9 not know if we would be doing an interim standard at the end 10 of Phase VIII. And we did assume eight contiguous phases. 11 That is a very good reminder. 12 Mr. Stubchaer asked a question about the voluntary 13 compliance. And what he was asking, and maybe if you can 14 answer it or the next presenters will or the next responders 15 will answer, but if the Accord does end in November, we are 16 not a part of the Accord. We are looking at how to meet the 17 '95 water quality standards. So we would be looking for 18 compliance until Phase VIII is executed. We are not focused 19 on the Accord and what is in the Accord. We don't know all 20 the things that are in the Accord. So that, I think, is a 21 very important piece of information that we have to be aware 22 of by the end of the day. 23 MR. WILKINSON: I think the concern that you have is 24 that you don't want to see things go to hell in the Delta 25 pending the conclusion of Phase VIII. They won't go that CAPITOL REPORTERS (916) 923-5447 64 1 way if the projects voluntarily continue to meet the 2 standards. And I have no information at all to indicate 3 that the projects are not going to do that. 4 Let's assume, though, that perhaps the Bureau decides, 5 "We've had it with this process. We don't want to 6 voluntarily comply any longer." In those circumstances 7 there would be nothing that would prevent this Board from 8 convening a proceeding that would bring the Bureau before 9 them on whatever basis you choose, emergency or otherwise, 10 requiring, under those circumstances, the Bureau to continue 11 to comply. That hasn't happened. 12 One of the things that surprised us out of all of this 13 is there is no indication that it is going to happen, that 14 there is going to be any cessation in voluntary compliance. 15 In light of that, we didn't understand, particularly given 16 the absence of the notice, why it was necessary to impose 17 Condition 2 on the project. That's been one of our main 18 concerns here, is that we have been putting up this water on 19 a voluntary basis, to maintain the circumstances and 20 conditions in the Delta, and what appears to be happening to 21 us is that our regulatory conditioning or conditions have 22 changed almost to punish us for doing the things that we 23 thought were right. That just doesn't seem consistent with 24 what this Board is doing. 25 MEMBER FORSTER: Okay. I am listening to you. It CAPITOL REPORTERS (916) 923-5447 65 1 might be necessary, then, if the Board is going to consider 2 some of the issues on Condition 2 to put into our order, if 3 for some reason the project decided they weren't going to 4 voluntarily meet, we have an automatic hearing and we would 5 have to deal with that immediately. 6 MR. WILKINSON: Sure. I think the evidence that you've 7 received in the record is that the projects have been 8 voluntarily complying. And it would be appropriate for you 9 in those circumstances to write into the decision that 10 assumption as part of the decision, that there will continue 11 to be voluntary compliance. If that condition or that 12 assumption changes because of actions by either of the 13 project operators, it would be appropriate, in my view, for 14 you to provide in the decision for a reopener, for a 15 trigger, if you will, for a new set of hearings. 16 CHAIRMAN STUBCHAER: Thank you. 17 Ed Winkler to be followed by David Anderson. 18 MR. WINKLER: Thank you, Mr. Chairman and Members of 19 the Board. I am Ed Winkler. I am here on behalf of the 20 Metropolitan Water District of Southern California. 21 I would like to first just state in the same way that 22 Greg did my congratulations to you, Mr. Chairman, and to Mr. 23 Attwater and Mr. Pettit on your outstanding years of service 24 to the State of California. 25 This will be brief. I would like to say that CAPITOL REPORTERS (916) 923-5447 66 1 Metropolitan concurs with the position of the State Water 2 Contractors and arguments laid out by Greg Wilkinson. I 3 would just add a little bit with regard to Condition 2, 4 particularly regarding the policy ramifications of 5 Condition 2. 6 The Bay-Delta Accord and framework agreement were 7 delicate negotiations. Included in the Accord were, as Greg 8 stated, a million acre-feet of new water for the 9 environment, financial obligations by some of the water 10 users to help the environment. In the Accord also was 11 commitments on regulatory assurances that we would get, and 12 also as part of that whole package the projects did 13 voluntarily commit to meet the provisions of the Accord on a 14 temporary basis, for up to three years. That was a delicate 15 package. 16 I would want to emphasize at that time, when that was 17 being negotiated, the idea of changing the permit terms and 18 conditions on the projects' permits, had that been on the 19 table, we would have had a different negotiation and quite 20 likely a different outcome. We may not have had the 21 Bay-Delta Accord. 22 Number two, with regard to the CalFed process. I do 23 believe Condition 2 biases that process, and it undermines 24 our negotiating position. Having given up a million 25 acre-feet in our view and contributed to the environment in CAPITOL REPORTERS (916) 923-5447 67 1 that way, we are looking to CalFed for broader solutions, 2 for solutions that include ecosystem restoration and other 3 components that will allow us to receive some of that 4 million acre-feet back. We believe that going in, again, it 5 could be argued by some of the CalFed agencies by 6 conditioning our permit you have, in fact, changed the 7 baseline and undermined the negotiating position that we 8 have, that some of that water needs to come back to the 9 project in the overall project as CalFed developed the 10 package. 11 Those are the two key things I would like to emphasize 12 and once again urge you to remove Condition 2 from D-1641. 13 CHAIRMAN STUBCHAER: I have a question for you, Mr. 14 Winkler. Same question. 15 If Condition 2 essentially sunsets in November of 2001 16 or at the end of Phase VIII, how then is your positioning 17 status compromised or is the baseline changed? 18 MR. WINKLER: The big problem we have is timing. If 19 CalFed were in negotiation and a final decision on CalFed 20 were to coincide two years from now with Phase VIII, that 21 may be a different thing. But given that CalFed is 22 scheduled to make a decision in June of this year, that 23 negotiation is happening right now. So, the temporary 24 nature of 1641 doesn't -- that doesn't help us. It is the 25 fact that the baseline by which we will negotiate the CAPITOL REPORTERS (916) 923-5447 68 1 overall package of financing and water, that can be impacted 2 by the change in our permit. 3 CHAIRMAN STUBCHAER: How can the negotiations be 4 concluded in the absence of a Phase VIII decision? 5 MR. WINKLER: How can the CalFed decision -- 6 CHAIRMAN STUBCHAER: Yes. You were talking about a 7 package of water and money and things and measures and 8 things like that. If Phase VIII isn't in sync with CalFed 9 and we are not in contact with CalFed, how can you conclude 10 those negotiations? 11 MR. WINKLER: CalFed will necessarily need to take into 12 account your process in their negotiations. I can't speak 13 for CalFed and how they would come to an equitable 14 resolution, but the water users certainly don't view our 15 position as being bolstered by going into CalFed having our 16 permit modified and, you know, conditioned to meet all the 17 standards where we were going in before on a voluntary 18 basis. That is the key difference. 19 CHAIRMAN STUBCHAER: Thank you, Mr. Winkler. 20 MR. WINKLER: Thank you. 21 CHAIRMAN STUBCHAER: Dave Anderson to be followed by 22 Edmund Gee. 23 MR. ANDERSON: Good afternoon. 24 CHAIRMAN STUBCHAER: I think it is good. 25 MR. ANDERSON: I am Dave Anderson representing the CAPITOL REPORTERS (916) 923-5447 69 1 Department of Water Resources, and I also would like to 2 begin by echoing the comments of Greg Wilkinson. He put it 3 very aptly, to congratulate you upon your years of service, 4 yours and Walt's and Bill's. I think you have all been 5 exceptional public servants and have displayed at all times 6 the personal and professional excellence in the conduct of 7 your duties. It has been a great pleasure to personally 8 work with you all. 9 I would like to start out maybe just in a quick 10 reference to Dan Nomellini's comments. I think as I go 11 through my comments maybe more of this will be explained. 12 I don't frankly understand where Dan is coming from 13 on this. There is some confusion. And one point of 14 confusion I can at least identify at the outset is the 15 confusion when Dan talked with his concern over the deal 16 having been struck beforehand and so forth, in talking about 17 his whole concern about the Bay-Delta Accord having been a 18 deal struck with the Board on that, you guys have all been 19 through that. The confusion between that and water rights 20 Order 95-6. So I think a lot of what Dan is talking about 21 arises from the confusion on that point, but we will see. 22 Another point I would make, perhaps to -- I will get to 23 it again in my comments regarding the discussions with staff 24 about 95-6. And what I was referring to there and what I 25 will be talking about here is discussions were had after the CAPITOL REPORTERS (916) 923-5447 70 1 Accord was signed about the -- entered into post December 2 15, 1994, about the people realizing there was a conflict 3 between the obligation voluntarily being taken by the 4 projects and also to the extent obligations under D-1485. 5 It was the burdensome conflicts of D-1485 that was 6 discussed with Board staff. And these were discussed in the 7 context of some people sitting in the room over at the 8 Resources Building in CalFed OPS process discussing whether 9 and how we should go forward. We'd just done the Accord. 10 We had a set of standards and a set of institutional 11 understandings as to h