STATE WATER RESOURCES CONTROL BOARD PUBLIC WORKSHOP on DEVELOPING KEY ISSUES FOR PHASE VIII MONDAY, MARCH 27, 2000 9:00 A.M. PAUL R. BONDERSON BUILDING SACRAMENTO, CALIFORNIA 9:00 A.M. REPORTED BY: ESTHER F. WIATRE CSR NO. 1564 CAPITOL REPORTERS (916) 923-5447 1 APPEARANCES 2 BOARD MEMBERS: 3 JOHN W. BROWN, COHEARING OFFICER ARTHUR BAGGET, JR., COHEARING OFFICER 4 MARY JANE FORSTER 5 STAFF MEMBERS: 6 JULIE CHAN, SUPERVISING ENGINEER NICK WILCOX, CHIEF BAY-DELTA UNIT 7 COUNSEL: 8 BARBARA LEIDIGH 9 10 AUDIENCE PARTICIPATION: 11 EDMUND GEE WILLIAM H. BABER, III 12 RICHARD MOSS CLIFFORD SCHULZ 13 ALAN LILLY FREDERICK BOLD 14 ROBERT MADDOW TIMOTHY O'LAUGHLIN 15 DANTE JOHN NOMELLINI JOHN HERRICK 16 MATTHEW CAMPBELL KARNA HARRIGFELD 17 MARTHA LENNIHAN CATHY CROTHERS 18 SCOTT MORRIS ANDREW HITCHINGS 19 VIRGINIA CAHILL NANCY SARACINO 20 MICHAEL JACKSON 21 ---oOo--- 22 23 24 25 CAPITOL REPORTERS (916) 923-5447 1 SACRAMENTO, CALIFORNIA 2 MARCH 27, 2000 9:00 A.M. 3 ---oOo--- 4 C.O. BROWN: Good morning, ladies and gentlemen. 5 This is the workshop for the hearing issues and 6 procedures for Phase VIII of the Bay-Delta Water Rights 7 Hearing. 8 Welcome to the workshop on the hearing procedures and 9 proposed settlement agreements for Phase VIII of the 10 Bay-Delta Water Rights Hearing. I am John Brown, Member of 11 State Water Resources Control Board. On my left is Art 12 Bagget, our vice chair and acting chair for the State Water 13 Resources Control Board. We expect Ms. Forster to be 14 showing up shortly. 15 Mr. Bagget and I will be cohearing officers for the 16 Bay-Delta Water Rights Hearing. 17 At the staff table seated are Mr. Walt Pettit -- out in 18 the audience, the Board's Executive Director; and Dale 19 Claypoole, the Assistant Executive Director; Nick Wilcox, 20 Bay-Delta Unit Chief, Mr. Wilcox; Julie Chan, Senior 21 Engineering geologist; Barbara Leidigh, Senior Staff 22 Counsel. 23 Other staff are also present and may assist from time 24 to time. 25 This workshop is being held in accordance with the CAPITOL REPORTERS (916) 923-5447 3 1 Notice of Public Workshop dated February 23rd, 2000. If you 2 intend to speak today, please fill out a blue speaker card 3 and give it to staff at the front table. That is one of 4 these. If you are not sure, fill the card out and mark it 5 "if necessary" so that we may plan our time. 6 The purpose of this workshop is to receive comments 7 from the parties to assist the Board in specifying the key 8 issues for Phase VIII of the Bay-Delta Water Rights Hearing 9 and to obtain comments on the status of any existing or 10 expected agreements among the parties to assign 11 responsibility for meeting the flow objectives. The Board 12 is also interested in hearing any recommendations the 13 parties may have for structuring Phase VIII. 14 Regarding the key issues for Phase VIII, the workshop 15 notice lists issues that include the responsibilities of the 16 water right holders to meet the objectives in the 1995 17 Bay-Delta Plan, protection of the public interest and the 18 public trust, the effect of the hearing on the Cal/Fed 19 program and methods for calculating carriage water. 20 Laws affecting the determination of responsibility of 21 water right holders that may require interpretation by the 22 Board after Phase VIII include: the Watershed Protection 23 Statute, the County of Origin Statute and the Delta 24 Protection Act. All parties are welcome to comment on each 25 issue. CAPITOL REPORTERS (916) 923-5447 4 1 The Board has scheduled a session of Phase VIII to 2 commence on April 11th to consider an agreement between the 3 Department of Water Resources, South Sutter Water District 4 and Camp Far West Irrigation District. 5 An issue in this workshop is whether the State Water 6 Resources Control Board should consider any additional 7 negotiated agreements before considering the 8 responsibilities of the parties who have not entered into an 9 agreement. 10 The Members of the Board and the Board staff may ask 11 questions at appropriate times during and after 12 presentation. Because this is not a hearing, there will be 13 no cross-examination and the parties should not attempt to 14 present detailed evidence in support of their position at 15 this time. All the parties will have an opportunity to 16 present their evidence and cross-examine opposing witnesses 17 during the water right hearing. The Board will not announce 18 any decision today regarding the matters to be discussed in 19 this workshop. 20 The Board will, however, release a supplement to the 21 May 6, 1998, Revised Notice of Public Hearings shortly after 22 this workshop is concluded. The notice will set the 23 scheduling and organization for Phase VIII of the Water 24 Hearing which we expect to commence this summer. This 25 workshop is convened to give the participants an opportunity CAPITOL REPORTERS (916) 923-5447 5 1 to state their thoughts regarding the issues, schedule and 2 organization of Phase VIII. 3 In the interest of time, please avoid repeating details 4 already presented by other parties whenever possible and 5 simply indicate agreement. Alternatively, parties with the 6 same interest are welcome and encouraged to make joint 7 presentations. In the notice of this workshop the Board 8 requested that participants provide copies of the written 9 comments and supporting materials to the Board and to the 10 parties on or before Tuesday, March 21st. As specified in 11 the notice of this workshop, additional copies should be 12 provided today for participants not on the service list. 13 We have received a number of written comments and we 14 have read them. The parties who provided written comments 15 are encouraged to summarize their comments orally. We ask 16 that parties presenting only an oral comment stay within the 17 20-minute time period allotted to each participant. 18 A Court Reporter is present and will prepare a 19 transcript. To accommodate the Court Reporter, all speakers 20 are requested to use a microphone. If you want a copy of 21 the transcript, you must make arrangements with the Court 22 Reporter. 23 The order for calling parties has just changed and it's 24 Mr. Gee, Department of Interior; Mr. Bill Barber; Mr. 25 Richard Moss; Mr. Cliff Schulz; Mr. Alan Lilly; Mr. CAPITOL REPORTERS (916) 923-5447 6 1 Frederick Bold; Mr. Robert Maddow; Mr. Dante John Nomellini; 2 Mr. John Herrick; Mr. Matthew Campbell; Karna Harrigfeld; 3 Tim O'Laughlin; Martha Lennihan; Cathy Crothers; Scott 4 Morris; Andrew Hitchings; Ms. Virginia Cahill and Ms. Nancy 5 Saracino. 6 We have just been joined by Ms. Mary Jane Forster. 7 Do any of the Board Members wish to comment at this 8 time or add anything to what I have said before we begin the 9 presentation? 10 Okay. First up is Mr. Gee. 11 Welcome, Mr. Gee. 12 MR. GEE: Mr. Brown, Ms. Forster and Mr. Bagget, thank 13 you for the opportunity to hear me speak today. My name is 14 Edmund Gee, and I'm appearing on behalf of the Department of 15 Interior and its agencies the U.S. Bureau of Reclamation, 16 the U.S. Fish and Wildlife Service. 17 The notice for today's hearing identified several broad 18 issues, and those issues were set forth on Page 2 of the 19 notice. Relative to those broad issues there are some 20 specific issues which I believe are within the scope of 21 Phase VIII and should, therefore, be addressed in Phase VIII 22 as well. 23 Regarding flow Alternative 3, that alternative, as 24 described in the Final EIR, assigns responsibility for 25 meeting the 1995 Water Quality Control Plan flow objectives CAPITOL REPORTERS (916) 923-5447 7 1 on certain water right holders on a water right priority 2 system. Under this alternative, Term 91 would modify and 3 add to certain post-1914 right permits. Therefore, 4 regarding the flow Alternative 3, Phase VIII should address 5 how Term 91 was developed and how it operatess, how Term 91 6 relates to the responsibility of the projects under the 7 Watershed Protection and Area of Origin Statutes and the 8 Delta Protection Act. 9 Phase VIII should also address how the modified Term 10 91, as described in the Final EIR, would operate and how a 11 modified Term 91 would be used on a near real-time basis to 12 implement Alternative 3. 13 Therefore, it would be useful to include a discussion 14 as to the history and concepts of D-990, the 1956 15 cooperative studies and D-1594. 16 Regarding flow Alternative 5, Phase VIII should address 17 how the flows for each of the major watersheds tributary to 18 the Delta will contribute to meet the flow objectives of the 19 1995 Water Quality Control Plan. And lastly, Phase VIII 20 should also address how the principles set forth in the 21 Racanelli Decision will be incorporated in determining the 22 responsibilities of water right holders for meeting the flow 23 objectives of the Water Quality Control Plan. 24 That is basically the comments that I wish to report to 25 the Board. CAPITOL REPORTERS (916) 923-5447 8 1 C.O. BROWN: Thank you, Mr. Gee. 2 MR. GEE: Thank you. 3 MEMBER FORSTER: May I ask a question? 4 C.O. BROWN: Ms. Forster, you may ask a question 5 anytime you wish. 6 MEMBER FORSTER: I have compiled a list of questions, 7 and I wrote them a while ago, so I'm trying to sort through 8 them. I probably won't ask you all of them. 9 My first question, and I will ask most of the parties 10 this: Do you think the Board should call for submission of 11 trial briefs by the parties? And, if so, some people have 12 said they need 90 days to prepare for the full Phase VIII. 13 So I am curious if trial briefs could be done in that time 14 frame. 15 And I think you asked about legal issues, how they were 16 going to be addressed in your statement position on legal 17 issues or to the party's position as well as the statement. 18 We would like to know or I would like to know a statement of 19 facts that the parties intend to prove. So that is my first 20 question. 21 MR. GEE: I'll answer your first question. I think it 22 would be useful to at least have opening written statements 23 of some form listing the issues that each party would be 24 proposing to argue about. I think that would facilitate 25 parties presenting joint responses to any concerns of the CAPITOL REPORTERS (916) 923-5447 9 1 Board. 2 As to the 90 days, I did note that a number of parties 3 did ask for that, and I think that should be up to the 4 Board. I understand there has been some statement made that 5 after this workshop that the hearings would begin in early 6 June. That I think would be a bit aggressive for me to try 7 to marshal all of the evidence together. I understand that 8 much of the evidence that has been presented prior will not 9 be deemed admitted for Phase VIII. It would have to be 10 rereferenced, and that may take some time as well. Ninety 11 days would be helpful. 12 MEMBER FORSTER: I have another question on how we 13 organize. A lot of people asked about procedure and how we 14 were going to organize Phase VIII. In fact, one said, is 15 everybody just supposed to show up? So this is just -- I 16 know you are not prepared for all of this, but I am throwing 17 these out. 18 How should the Board organize Phase VIII? Should part 19 of this be grouped according to the support for a particular 20 alternative, for allocating responsibility among water right 21 holders or by their interest in a specific watershed or at 22 random? 23 And then, further, if they're grouped for presentation 24 for their cases in chief, should they be done randomly or in 25 a particular order? And what do you see the benefits of the CAPITOL REPORTERS (916) 923-5447 10 1 different methods of establishing; one by the alternatives 2 or randomly? What do you think? 3 MR. GEE: I don't think randomly. I don't think there 4 is any real benefit to having been randomly done. Better 5 logic is having it done -- as I understand today, to have it 6 done on an alternative basis. That will allow at least a 7 sequential coherence as well as having parties with similar 8 positions to present their cases in a cogent and cohesive 9 fashion. 10 MEMBER FORSTER: Many of the comments that came in on 11 this hearing talked about the responsibility of parties to 12 meet the Bay-Delta flow objectives, and everybody raised the 13 issue that we need to talk about under the Watershed 14 Protection Act, the Delta Protection Act, County of Origin 15 Act. 16 What do you think are the specific issues we need to 17 resolve that relate to those? 18 MR. GEE: I know that one of the issues that was 19 noticed in the notice for today's hearing was responsibility 20 of the projects under the statutes. I think it may begin 21 there. 22 Ms. Forster, I don't know what you mean. If you can be 23 more specific in your question, I can be a little more 24 helpful. 25 MEMBER FORSTER: I will get to that. Do you think -- I CAPITOL REPORTERS (916) 923-5447 11 1 wrote another question. Do you think that water right 2 responsibilities or a decision interpreting laws such as the 3 Watershed Protection Act, Delta Act or County of Origin Act 4 affect Cal/Fed decision making? A lot came up in December 5 in our last meeting where we had the petitions for 6 reconsideration and what we are doing. And does that have 7 any relevance to Cal/Fed, those? 8 MR. GEE: I am inclined to say yes, but I am not the 9 attorney in charge of the Cal/Fed process. Unfortunately, 10 there is no one here to speak on that from Interior. 11 MEMBER FORSTER: One more thing I am trying to figure 12 out. Do you think we should do the carriage water 13 separately or group it in the presentation of evidence as we 14 go along? 15 MR. GEE: I am not quite familiar with the 16 technicalities of the carriage water issue. 17 MEMBER FORSTER: I have some other ones, but first up 18 -- and I am reviewing these and I wrote them last week. 19 Thank you very much. 20 MR. GEE: Thank you, Ms. Forster. 21 C.O. BROWN: Thank you, Mr. Gee. 22 MR. GEE: Mr. Brown. 23 C.O. BROWN: Mr. Baber. 24 MR. BABER: Mr. Brown, Ms. Foster, Mr. Bagget, thank 25 you for having the opportunity to present our comments to CAPITOL REPORTERS (916) 923-5447 12 1 you today. I'll be commenting -- I am Bill Baber, and I 2 will be commenting from the Minasian law firm's clients that 3 are north of Delta, Sacramento Valley clients primarily, on 4 your issues. 5 So I will start, and you raised some good questions, 6 Ms. Forster. I am sure you will hear responses from our 7 office as to how it should proceed. First, we are talking 8 about the way the notices for this particular hearing have 9 evolved. We are concerned that we don't have specificity as 10 to how you are going to tackle and hopefully not tackle 11 pre-1914 and riparian water right holders. 12 Specifically, we support Barbara Leidigh's letter to 13 our office in December 1997. And I want to quote from one 14 paragraph from her letter which we think is very important. 15 This is in her letter of December 7, 1997, written to our 16 office, stating another way: 17 These parties will not be ordered to 18 contribute water to meet Bay-Delta objectives 19 as a result of the forthcoming hearing, 20 unless the State Board decides to allocate 21 responsibility using a proportionate 22 allocation method such as Alternative 5. 23 This would not preclude the State Board 24 separately from this proceeding from 25 notifying these parties to stop diverting CAPITOL REPORTERS (916) 923-5447 13 1 water in excess of their rights or if 2 hydrological conditions are such that water 3 is not available under their water right 4 priorities (Such notifications are provided 5 whenever necessary under the State Board's 6 existing authority.) Additionally, the State 7 Board could bring these parties into the 8 allocation process under additional methods 9 of allocation after providing further 10 notice. (Reading.) 11 And we assume what you are referring to, there are 12 notices that any of our clients -- and we are representing 13 approximately 16 clients north of the Delta from our office 14 in my particular comments. 15 We assume that you're commenting about any particular 16 one of our clients using water wastefully, unreasonably, in 17 some way harming the public trust under the National Audubon 18 Decision. If we are then faced with those particular 19 allegations factually from this Board, we have the 20 opportunity to sit down with our clients, prepare our 21 testimony, prepare our evidence, gather together any expert 22 testimony which is necessary and respond. 23 To date we have not had those allegations. And we have 24 been assured by Ms. Leidigh's letter that we will not 25 receive those allegations -- unless this procedure is CAPITOL REPORTERS (916) 923-5447 14 1 totally reworked. And that was an allegation, not an 2 allegation but a statement that is made in your March 7, 3 2000, notice, in which you state that would you not expand 4 the proceedings by bringing in pre-1914 riparian water right 5 holders without totally reworking your notice of 6 requirement. That is point one and one of the most 7 important ones for us. 8 Point two, we believe that you have to determine for 9 our clients what issues we are going to be trying when we go 10 through Phase VIII. What evidence do you have, again, that 11 supports any Article X, Section 2 public trust allegations 12 that we have wasted, unreasonably used water in the exercise 13 of our rights? 14 Three, the order of evidence as it is presented before 15 you. We think, first, that the State Board staff should 16 list the issues which are going to be heard in Phase VIII 17 and then tell us who the preparers of the issues are, what 18 the preparers of evidence are so we can cross-examine them, 19 have an opportunity for discovery, to examine them before we 20 start the Phase VIII process. 21 Next, we believe the operators of the state and federal 22 projects should present their testimony as to why they 23 should be able to avoid D-990 and D-1275 and transfer their 24 obligations to protect the Delta and keep salinity within 25 reasonable bounds as stated in 990 and 1275, if we are CAPITOL REPORTERS (916) 923-5447 15 1 transferring that obligation to our clients or other of 2 those clients in these proceedings outside of the state and 3 federal projects. 4 Third, in the order of presentation of evidence, we 5 believe that those who are adversely affected by the state 6 and federal projects would then have an opportunity to 7 present their impacts. 8 Our fourth item would be additional issues which we 9 think the State Board should deal with. We would like to 10 see an update now that you've gotten a number of 11 settlements, particularly San Joaquin River Agreement. 12 You've got -- South Sutter, I think, is proposing a 13 settlement. Maybe even one with OWID that could come 14 sometime in the near future. 15 We think those -- with those settlements that you have, 16 if your staff could give us an update of water flow 17 deficiencies that now exist pursuant to implementing the '95 18 Water Quality Control Plan so we know about how much more 19 water the State Board needs to meet that plan, that would 20 give us a better idea of how we deal with it. 21 And fifth, our prior contracts. You have a number of 22 districts, particularly a number that we represent and a 23 number that other law firms and engineers, I guess, 24 represent that have water right settlement contracts that 25 have been in existence for 40, 50 years since the Sacramento CAPITOL REPORTERS (916) 923-5447 16 1 Delta Water Users Association negotiated CVP settlement 2 contracts in the early '60s, many of which our office 3 negotiated. 4 We would believe that you have to tell us how those 5 settlement contracts should be evaluated. Particularly, we 6 have a number of clients on the Feather River that have 7 state settlement contracts. We expect those would continue 8 to be implemented following Phase VIII hearings. We always 9 proceeded in that direction. We would like to hear how the 10 State Board intends to deal with those settlement contracts. 11 Those are the five issues that we have that we raised 12 in our letter to the State Board of March 21. We adopt 13 those comments. 14 We do have one other comment. We did not specifically 15 mention the Area of Origin or Watershed Protection Act. Ms. 16 Forster, I noticed you mentioned that. We also are very 17 concerned about that, and we believe that the comments of 18 Bob Maddow for Contra Costa Water District are applicable. 19 We adopt those comments. 20 That's it. Any questions? 21 MEMBER FORSTER: I have a question, Mr. Hearing 22 Officer. 23 THE COURT: Go ahead. 24 MEMBER FORSTER: Should we call you Mr. Chair. You are 25 chairing this proceeding; we should call you Mr. Chair. CAPITOL REPORTERS (916) 923-5447 17 1 MR. BABER: They are Cochairs. 2 MEMBER FORSTER: That's right. 3 I brought up with the Bureau the idea of submitting 4 trial briefs and the time that it would take to start this 5 phase. What are your opinions on that? 6 MR. BABER: I think trial briefs are appropriate. They 7 should be submitted definitely. I think you're going to 8 need a longer process than 90 days. You are going to need 9 at least six months or maybe more. We have asked that we 10 have -- we have asked that you rewrite your notices or tell 11 us if you are going to -- I guess it depends on how you are 12 going to phase it. 13 If you are actually going to tackle pre-1914 or 14 riparian users, you are going to do that, then we want to 15 see the allegations for waste and unreasonable use, how do 16 we harm the public trust, so we can prepare our clients to 17 come before you and present their testimony in opposition. 18 That is going to take an extensive period of time. 19 Now, if you are going to decide you are not going to 20 tackle that issue, be specific about it when rewriting, 21 Barbara, this March 7th notice so we know that we are not 22 going to have to deal with that, then I think sometime 23 within six months for the hearing is appropriate. 24 We will have issues that will be cut out that we don't 25 have to deal with. But I think trial briefs are CAPITOL REPORTERS (916) 923-5447 18 1 appropriate. We have a lot of legal issues that you can 2 imagine that are going to have to -- that will be argued, 3 and those could be started arguing in the trial briefs. 4 MEMBER FORSTER: What about the second question I 5 asked about doing some sort of logical process of going 6 alternative by alternative and having people who support a 7 certain alternative being grouped together, and then, you 8 know, the appropriate cross and all of that? 9 MR. BABER: Well, I would, rather than go alternative 10 by alternative -- first of all, if you decide you are not 11 going to tackle pre-1914 and riparians, in Barbara's letter 12 she says that will only be necessary if we adopt Alternative 13 5. So I assume if you are not going to adopt -- if you are 14 not going to talk about pre-1914 riparians, Alternative 5 is 15 out the door? 16 Am I right, Barbara? That is what we are really 17 concerned about. 18 MEMBER FORSTER: She doesn't want to answer that right 19 now. 20 MS. LEIDIGH: I think it was pretty well answered in 21 that letter in 1997. 22 C.O. BROWN: Pull the microphone closer, Barbara. 23 MEMBER FORSTER: I think it is pretty well answered in 24 1997 letter, but that is the alternative under which the 25 Board would put some responsibility on certain pre-1914 and CAPITOL REPORTERS (916) 923-5447 19 1 riparian right holders. But the environmental documentation 2 doesn't really have as much as the notice that we sent out 3 in '97 does, so I think that we would have to do a little 4 bit more in order to impose Alternative 5. It is not off 5 the table. 6 C.O. BROWN: That answer your question? 7 MR. BABER: That is why we've got to have a revised 8 notice that tells us whether pre-1914 and riparians are 9 still in the tent or out from the tent. That is what we 10 really want to know. If they are going to be in the tent, 11 then it is going to take us at least six months to prepare 12 for these hearings. We've got to know factually how we 13 harmed the public trust, how we wasted, unreasonably used 14 water with our clients so that we can face you and present 15 an opposition. 16 I think I understand Barbara's attempt not to let go of 17 Alternative 5 for you. If we have to deal with it, we are 18 going to need more time. That is my thought. 19 I hope I have tried to answer that question, Ms. 20 Forster. 21 MEMBER FORSTER: I have one more question, Mr. Chair. 22 If more agreements come in, do you think we should hear 23 the agreements just as we go in Phase VIII? That is another 24 logistics. If we are moving along in Phase VIII, we have 25 set out a procedure of what we know, and then we get to more CAPITOL REPORTERS (916) 923-5447 20 1 agreements, how would you recommend that we address those? 2 Just include them in or set a day aside and do them 3 separately and see how they fold in? 4 MR. BABER: I am assuming if you get more agreements 5 in, it is going to free up more water supplies, make less 6 water available to meet '95 standards. That is -- if that 7 is the case, that would take more pressure off our clients. 8 But I am also assuming that any additional agreements 9 that you get in outside of the San Joaquin River Agreement, 10 which is the major one, which, by the way, we support -- 11 Delta tributary agencies agreement supported it a year ago. 12 That will take -- the rest of the agreements will be minor 13 amounts of water, I would think. 14 So, to answer your question, I would say you could take 15 them incrementally as they come in. I don't know of any 16 major big agreement that is going to, particularly up 17 north. We are settled. 18 MEMBER FORSTER: Thank you. 19 MR. BABER: Any other questions? 20 C.O. BROWN: Thank you, Mr. Baber. 21 MR. BABER: Thanks, Mr. Brown. 22 Mr. Moss. 23 MR. MOSS: Thank you, Mr. Brown. Ms. Forster, Mr. 24 Bagget. And by the way, it is nice to have an Antiochian on 25 the Board. CAPITOL REPORTERS (916) 923-5447 21 1 Richard Moss for Pacific Gas & Electric Company. PG&E 2 returns to participate certainly in Phase VIII of this 3 proceeding because it raises clear legal issues that could 4 well affect the future of water rights in California. 5 PG&E's rights, as you are familiar, are generally for 6 licensed electrical projects or nonconsumptive rights. 7 Those that were noticed in the remaining rights particularly 8 involve prior contracts with the Department of Water 9 Resources or are extremely small individual domestic 10 rights. 11 In terms of the questions raised by this proceeding, 12 PG&E did not submit written comments but does concur with 13 the comments that were submitted by, for instance, the 14 Minasian law firm on behalf of the Western Canal Water 15 District and their north of the Delta clients, and those 16 submitted by Mr. Nomellini on behalf of Central and South 17 Delta Water Agency. We endorse those in terms of 18 establishing a procedure for this proceeding. 19 Also, I might add the comments that were submitted by 20 others raising the issue of delaying the proceeding until 21 the Cal/Fed ROD is submitted certainly makes sense to us 22 also. 23 Any questions? 24 C.O. BROWN: Thank you, Mr. Moss. 25 Mr. Schulz. CAPITOL REPORTERS (916) 923-5447 22 1 MR. SCHULZ: Good morning Mr. Brown, Ms. Forster, Mr. 2 Bagget. I am Cliff Schulz appearing today on behalf of the 3 State Water Contractors. The State Water Contractors did 4 submit written comments which I assume everybody has, and 5 that is probably the last time I am going to refer to them. 6 I have been spending a lot of time since I wrote those 7 comments trying to figure out a way to try to avoid making 8 Phase VIII a test of the chaos theory, whereby we gain some 9 order out of random motions. It is not going to be easy. 10 It is a very difficult phase, the hearings. 11 I want to start out talking a little bit about what I 12 think might be a way of ordering the hearings, and maybe, 13 Ms. Forster, one of the questions you have been asking. It 14 is a view that I have that Alternative 3 is almost sort of a 15 default situation. It is the water rights priority and 16 really nothing more than the application of very traditional 17 water rights law. 18 Riparian rights, pre-14 or post-14 appropriative rights 19 have never applied to somebody else's stored water. 20 Riparians have natural flow. They don't have the right to 21 foreign water, whether it be foreign -- foreign watershed. 22 Owners of reservoirs have always in California had the right 23 to utilize natural channels as a conveyance facility from 24 their reservoirs to the point of rediversion as long as they 25 don't injure other parties in the process. CAPITOL REPORTERS (916) 923-5447 23 1 If you take a look at the situation here, since 19-, I 2 think it is, -66, I didn't go back and check, this Board has 3 been imposing Term 91 on all new water rights since that 4 date. So for the last 43, 44 years that has been the rule. 5 It is well-established and people haven't really objected to 6 Term 91 being included in the permits. It may be that the 7 way to start this proceeding would be to have Term 91 be 8 deemed to be the default situation and to add Term 91 to all 9 the permits, whether post-14 permits. Because it seems to 10 me that the real issue in this hearing is why people should 11 not be subject to the normal water rights rules. 12 I tried to take the time to read most of the statements 13 that were presented by the parties before this workshop and 14 some of them take the position that the Delta Protection Act 15 or Watershed Acts or things like that should make Term 91 16 not applicable. Others contended that the 1995 Water 17 Quality Control Plan standards were imposed because of harm 18 caused by the projects and, therefore, it is a mitigation 19 responsibility of the projects to meet those terms and, 20 therefore, Term 91 should not be applicable. 21 To the extent somebody wants more than Term 91 imposed 22 on other users of the state and federal projects, whether it 23 be on Article X, Section 2 grounds, whatever, they would 24 have to show why the normal priority process should not be 25 applied to everybody in the system. It just might be a way CAPITOL REPORTERS (916) 923-5447 24 1 to order the proceedings and to sort of have Alternative 3 2 be the default situation and allow people who want an excuse 3 not to have to comply with that or a reason not to comply to 4 argue why the Delta Protection Act, for example, should 5 create a difference in the way the normal water rights 6 priority systems would function. It would probably mean, 7 quite frankly, that the State Water Contractors and perhaps 8 the Department and the Bureau would be putting on the cases 9 a little bit later because it might be a rebuttal situation. 10 They would be saying yes, no, the Delta Protection Act 11 doesn't do this or no, it is not a mitigation obligation 12 because we have fully mitigated and these outflows are for 13 different reasons unrelated to the project, et cetera. 14 I don't know. I am trying to come up with something 15 that makes sense. It's not going to be an easy hearing to 16 have. And I don't know how many people think that in the 17 absence of, for example, the Delta Protection Act, why Term 18 91 is not an applicable way of proceeding. 19 That leads me to the second point that I wanted to talk 20 about today, which is in our written statement and deals 21 with the fact that you don't have all of the necessary 22 parties before you, even for a Term 91 approach. Your staff 23 will tell you, their EIR will tell you, that the absence of 24 pre-14s and in particular the absence of the riparians 25 creates a situation that in a number of months in dry years CAPITOL REPORTERS (916) 923-5447 25 1 in your hydrology studies you are short in being able to 2 meet the standards without calling on very substantial 3 releases out of the state and federal projects. The numbers 4 in some years approach a quarter of a million acre-feet for 5 this purpose because you don't have all the parties before 6 you. 7 That is true unless something that has never happened 8 historically happens in the future. Namely, that the 9 riparians say, "Oh, gee, that water flowing by me is not 10 natural flow. It is foreign water. I better not divert 11 it." That hasn't happened so far, and for some reason I 12 don't have a great deal of confidence that it is going to 13 happen in the future without some action by this Board, 14 which is why we sent a letter to the Board sometime ago 15 suggesting that you have Phase VIII also be a quasi 16 legislative proceeding where you could adopt rules and 17 regulations that would apply a Term 91-type process to those 18 water users who don't hold permits from the Board. I think 19 the Imperial case indicates that you have very broad powers, 20 particularly Imperial One, over people who are 21 nonappropriators, non post-14 appropriators. 22 It seems to me that there is no reason to hold two 23 hearings on whether Term 91 should be applied to post-14 or 24 whether Term 91 should be applied to pre-14 and riparians 25 while in the meantime the projects have to provide hundreds CAPITOL REPORTERS (916) 923-5447 26 1 of thousands of acre-feet of water to those parties who 2 aren't currently before you. 3 We would urge once again that you consider joining the 4 riparians and the pre-14s, contrary to Mr. Baber's request, 5 that you make it clear that they are not before you. I 6 guess at this point I ask a rhetorical question: If 7 Alternative 5 is still under consideration as one of the 8 alternatives in Phase VIII, then does the Board consider it 9 has given proper notice to the pre-14s and riparians for 10 that purpose? Because, I guess, if they have been -- if 11 Alternative 5 is still on the table, if the Board believes 12 that they have given them appropriate notice to come in in 13 case Alternative 5 is adopted, they are before you. And if 14 they are before you for that purpose, why not have them 15 before you for Alternative 3 purposes also? 16 One additional point, I actually talked to your staff 17 and told them we are going to make this statement here 18 today. It is in our written paper. We have -- we believe 19 that the Board staff should be the first witnesses and that 20 they go through -- it might take a day. It might take two 21 days. I am not sure how long it would take, but the EIR and 22 the five alternatives, the five or six or seven, whatever it 23 is, the alternatives that are in there, I think need to be 24 testified to. It is not transparent from reading the CEQA 25 documents, the technicals means that they utilized to get to CAPITOL REPORTERS (916) 923-5447 27 1 the matters that are stated in there. I think some of them 2 are quite important that the parties understand them and 3 that they be in the record. 4 So we believe that perhaps the first order of business 5 in any Phase VIII would be the getting that information into 6 the record properly and allowing parties to cross-examine on 7 the basis upon which the technical materials that are in the 8 EIR were developed. 9 Final point, we were one of them that said at least 90 10 days needs to be given to get written testimony and exhibits 11 in after you issue the notice. 12 Ms. Forster, if you want to ask the question about 13 Cal/Fed, I am one who is deeply involved in Cal/Fed and do 14 think that as we get closer to Phase VIII, the parties who 15 are cooperating very, very closely in trying to work out a 16 package of Cal/Fed programs, including exporters and north 17 of the Delta folks, are going to be at each other's throats 18 in this proceeding. And I know I have heard arguments you 19 can negotiate and litigate at the same time. It is not 20 always the best way to do things. It usually is not. 21 We think that the Cal/Fed ROD or the results of the 22 negotiations should be occurring in the June/July time 23 frame, and we would very much not like to get diverted onto 24 having to prepare what is sure to be a very contentious set 25 of cases while we are trying to work out solutions to the CAPITOL REPORTERS (916) 923-5447 28 1 problems through Cal/Fed. 2 Thank you. 3 C.O. BROWN: Thank you, Mr. Schulz. 4 Questions? 5 MEMBER FORSTER: One of the reasons that we noticed or 6 we put into our hearing notice the effect of the hearing on 7 Cal/Fed is because in December and again on March the 15th, 8 I guess it was, people talked about Cal/Fed in the 9 negotiations, and we do not have firsthand knowledge, 10 because we are not a participant, of how that affects what 11 we are doing. We are not allowed to talk about it. And so 12 it was an opportunity for people who felt this burning need 13 to finish that process before we move forward to say more. 14 So I guess people aren't going to say too much about it 15 except that you are negotiating there. We don't want to 16 hang out forever. 17 What if that doesn't happen in June and they delay it, 18 and it would be just admirable just to have closure to this 19 '95 Water Quality Control Plan, and then they go into the 20 triennial review? You are ready to do this all over again. 21 My fear of going much beyond -- I can understand the 90 days 22 because of getting ready, us getting our procedure figured 23 out, people having to do their cases in chief and get 24 everybody else's evidence. I have no sense of why we would 25 just go and until that is done. I am worried about a big CAPITOL REPORTERS (916) 923-5447 29 1 delay and what does that mean to us. 2 MR. SCHULZ: I guess just a couple points. One, I wish 3 I could have been here on December 15th. At the same time 4 you were holding these hearings, the Senate Select Committee 5 on Cal/Fed was holding a hearing and asked me to testify 6 there. So I didn't have a chance to be here. 7 I have no trouble in talking about what is going on in 8 Cal/Fed. I might be up here an hour to really get the whole 9 thing through. There are meetings that are going on today 10 -- I don't mean specifically today, right now -- that 11 involve representatives in the highest levels of the 12 resources agencies and the Governor's office and Secretary 13 Babbitt and head of the Fish and Wildlife Service and Lester 14 Snow of the Bureau at which they are trying to put together 15 a comprehensive program, including assurance packages that 16 will allow -- set the basis, I guess, for Cal/Fed to come up 17 with their preferred alternative in a time so that they can 18 issue a ROD in June/July time frame. The participants are 19 talking to stakeholders. 20 There is -- all matters are on the table from storage 21 to Delta fix to conjunctive use programs. And it is just a 22 fact that all of those things involve, I guess if I was 23 going to try to characterize it, ways of avoiding the 24 conflict between area of origin laws, Delta Protection Act 25 and water supplies. If you can grow the supply, if we can CAPITOL REPORTERS (916) 923-5447 30 1 do a Delta fix through the Cal/Fed process, there is a 2 definite potential that we don't have to get into issues of 3 how do we divide up the pie in these proceedings. 4 And so, I think the reason I put 90 days, I want -- not 5 90 days before the start of hearings, but 90 days to present 6 our written testimony and exhibits, which probably means 120 7 days till we start the hearing. Normally you'd get 30 days; 8 you require the exhibits and testimony 30 days in advance. 9 So if you got a notice out sometime in early April, then I 10 am talking about May, June, July. I am talking about early 11 August. I quite frankly don't think that, absent Mr. 12 Baber's concern, there is going to be an expansive increase 13 in the scope of the hearing, that there is a need to go much 14 beyond that for starting the proceedings. 15 I think that is plenty of time for the Cal/Fed process 16 to either do its thing or for the Board on that occasion to 17 do its thing. So my request for 90 days was both on the 18 basis of that is how long I think it is going to take to do 19 some of the technical work and is also consistent with what 20 I think is needed to give Cal/Fed a chance to succeed. 21 MEMBER FORSTER: How much time do you think people's 22 cases in chief are going to take? What do you see as the 23 end of it? I would like to be here, and I am sure I won't 24 be. 25 MR. SCHULZ: You're up for reappointment in December of CAPITOL REPORTERS (916) 923-5447 31 1 next year, right? That is December of this year, excuse 2 me. I don't know if you are going to be here for the 3 decision. I hate to say it. 4 C.O. BROWN: Okay. 5 MEMBER FORSTER: Well, I appreciate that. You gave us 6 a little more enlightenment on the obvious connections from 7 your point of view, so thank you. 8 C.O. BROWN: Thank you, Mr. Schulz. 9 Mr. Lilly. 10 MR. LILLY: Good morning, Mr. Brown, Ms. Forster, Mr. 11 Bagget. My name is Alan Lilly from the firm of Bartkiewicz, 12 Kronick & Shanahan here in Sacramento. 13 I submitted written comments last week on behalf of the 14 San Juan Water District. We also represent several other 15 districts that are part of the Sacramento Valley Water 16 Users. I will just first briefly address the comments for 17 San Juan and then the others as well. 18 I appreciate very much not only the opportunity to be 19 heard today but the fact that the Board Members are asking 20 questions, because the workshop definitely goes much better 21 if we have some kind of a dialogue. Often we don't know 22 what is troubling unless you ask us. So, I really 23 appreciate all the questions we've been getting this morning 24 and I am sure we will continue to get this morning. 25 The issue of pre-1914 rights obviously has been a very CAPITOL REPORTERS (916) 923-5447 32 1 sensitive one that came out from the workshop notice. And, 2 frankly, it has been troubling for clients of ours like San 3 Juan Water District. Pre-14 rights have been mentioned 4 briefly and somewhat peripherally in some of the earlier 5 documents like the Draft EIR. But the Final EIR was very 6 unequivocal that pre-1914 rights would not be included in 7 the subsequent phases. And we quoted the pertinent pages in 8 our comment letter, and that was confirmed by Mr. Pettit's 9 letter earlier this year. 10 We were surprised when the notice of this workshop 11 included a list of many pre-14 and some riparian rights as 12 well in the list of water rights that potentially could be 13 affected by this proceeding. Apparently Board staff is not 14 considering those rights for flow Alternatives 3 or 4, or 15 for any of the alternatives except for flow Alternative 5. 16 But they want to just leave the option open to pull those 17 water rights into flow Alternative 5. It is not clear 18 exactly how that process would work because the Final EIR 19 and its analysis of flow Alternative 5 does not specifically 20 include these water rights or any analysis of any impacts on 21 them. 22 So it is very clear if the Board were to include these 23 water rights in a Phase VIII decision, there would have to 24 be a significant amendment to the Final EIR and probably 25 also significant renoticing, as Mr. Pettit had commented in CAPITOL REPORTERS (916) 923-5447 33 1 his letter. 2 We think that this proceedings is already going to be 3 complex enough with the post-1914 water rights included in 4 Phase VIII. According to the Board's own analysis, the 5 amounts of water that would be gained from these pre-14 6 riparian rights in the Bay-Delta proceeding would be 7 relatively small. So it does not appear justified to 8 dramatically increase the burden on the parties and the 9 Board in this process by including them, of course, 10 particularly for districts like San Juan Water District 11 where the only water rights they have are the pre-1914 12 rights. The rest of San Juan's water supplies all comes 13 from contracts and not from any of its own water rights. 14 So for districts like them, and there are others as 15 well in the notice, they would either have to participate in 16 Phase VIII or they don't, depending on what you do. It is a 17 significant thing; it is not just a case of one more issue. 18 They are having to hire people to represent them or not. 19 So, I think the Board staff has set out an appropriate 20 process that is very clearly do what is proposed for Phase 21 VIII without the pre-14s and riparians. And if it turns out 22 after the Board has gained the experience of implementing 23 its Bay-Delta water rights decision that there really is a 24 deficiency and it is significant and these water rights 25 holders need to be brought, then that could be done in a CAPITOL REPORTERS (916) 923-5447 34 1 subsequent proceeding. 2 I know "subsequent proceeding" is kind of an unpleasant 3 term when it comes to Bay-Delta because you have been having 4 proceedings for many years. But on the other hand, I will 5 point out that when you decided to split things up into 6 phases, and it was not just the phases of the water hearing, 7 but starting with the document in 1995 Water Quality Control 8 Plan you have really made significant progress. 9 I think where your predecessors got bogged down before 10 was trying to do it all at once. Before 1995 there was a 11 process that was going to adopt water quality standards and 12 all the water rights decisions at once, and that was 13 overwhelming and didn't work. Splitting it up into a phased 14 process has been successful so far, and I would recommend 15 that the Board continue to do that and in this case not go 16 forward -- not including the pre-14s in the Phase VIII 17 proceeding. 18 I did want to comment on the other questions that have 19 come up, and, obviously, we hope that these will not be 20 relevant to the San Juan Water District because we hope they 21 will not be in Phase VII, but we do have several other 22 districts with post-14 rights that will be in Phase VIII. A 23 couple of things, and I will let Mr. Hitchings give the 24 details for Sacramento Valley Water Users, and you will hear 25 from him later this morning. We certainly support the CAPITOL REPORTERS (916) 923-5447 35 1 comments that he submitted. 2 Quick points. I think that it is very important that 3 the Board have a complete notice for Phase VIII, complete in 4 and of itself. I heard the word "supplement" to the prior 5 notice. I think it really should supersede the prior 6 notice. The problem is if you say something like all issues 7 in the prior notices also apply or the comments in the prior 8 notices also are relevant, there have been so many prior 9 notices we won't be sure exactly what is in and what is out. 10 Obviously, a lot of the prior notices have been superseded 11 by the Board's actions on Phases I through VII and D-1641. 12 So, have a complete, stand-alone notice. If you have to cut 13 and paste with a word processor from your earlier notices, 14 please do that. But have one notice so we know exactly what 15 is in Phase VIII. 16 Order of proceeding, I know Ms. Forster asked the 17 question, I don't want to get into an argument with Mr. 18 Schulz about whether Term 91 or flow Alternative 3 is the 19 default. Suffice it to say, we don't agree that flow 20 Alternative 3 is where you start. We certainly don't agree 21 that you should assume that that is what is going to happen 22 unless somebody convinces you otherwise. We think flow 23 Alternative 3 is a constructive proposal, but clearly some 24 significant modifications are needed to account for the fact 25 that the state and federal projects have had CAPITOL REPORTERS (916) 923-5447 36 1 disproportionate impacts on the Delta. 2 As flow Alternative 3 currently is drafted, the 3 projects can happily release water from Shasta, Oroville and 4 Folsom and run it through the Delta and divert all of that 5 water at their pumps. They can release 10,000 cfs and pump 6 10,000 cfs while all the other water right holders have to 7 bypass water for Delta outflows, which could be up to 6- or 8 7,000 cubic feet per second. We think that there is clearly 9 going to be evidence in Phase VIII that the projects have to 10 mitigate for their pumping with some of the outflow. 11 Having said that, we propose the following order makes 12 sense: Certainly a summary from staff, and I will leave it 13 to you to decide whether they should be subject to 14 cross-examination. An initial summary from staff of the 15 different proposals and their development in the EIR would 16 be very valuable. Frankly, I think staff has done a very 17 good job of defining the issues and starting the process for 18 the alternatives so we all know what they're thinking and 19 where we go from there. 20 We think beyond that, as we have submitted in the 21 Sacramento Valley Water Users comments, the projects should 22 go next with their joint presentations, the Department of 23 Water Resources, State Water Contractors, Bureau of 24 Reclamation and the federal contractors. In essence they 25 are the advocates of this proceeding; they are the ones that CAPITOL REPORTERS (916) 923-5447 37 1 want something changed from the status quo. They should be 2 going forward and telling you what they want you to do. 3 Just as in any other case, if you have an applicant for a 4 water right, the applicant always goes first. If you have a 5 complainant, somebody who filed a complaint, the complainant 6 person goes first. They should go first; they want you to 7 make the changes. 8 And then as we have suggested, the other groups that 9 have prepared group presentation should go next because that 10 will really define the overall issues. Beyond that, the 11 individual parties can go. We think that will be the most 12 efficient process. 13 Finally, regarding Cal/Fed, we submitted in our 14 comments -- this is one place where I think I agree with Mr. 15 Schulz. I am glad to say we agree on something this 16 morning. The Cal/Fed process, we have also recommended that 17 that Record of Decision be developed, assuming it could be 18 done in a timely fashion. Obviously, Ms. Forster's comments 19 are valid. They have indicated a Record of Decision by June 20 or July of this year. Then, frankly, you will have a much 21 better idea of what the structure of the Delta is in which 22 water right issues can be addressed. 23 We would propose that your hearing be structured -- 24 probably that means starting late summer or early fall with 25 a notice coming out before then, of course. That would be CAPITOL REPORTERS (916) 923-5447 38 1 the actual starting date for the hearing to let that process 2 go forward and let all the parties get their documents 3 prepared. 4 Be glad to answer any questions. 5 C.O. BROWN: Thank you, Mr. Schulz. 6 MR. LILLY: That is Schulz. This is Lilly. 7 C.O. BROWN: Mr. Lilly, after the Yuba hearing, I 8 can't imagine me getting that mixed up. 9 MR. LILLY: I appreciate that. 10 C.O. BROWN: I apologize to both of you gentlemen. 11 MR. LILLY: That is a good neutral statement. 12 C.O. BROWN: Go ahead, Mary Jane. 13 MEMBER FORSTER: I have a question. 14 We have asked for some information on how people see 15 the issues related to the Watershed Protection Act and the 16 Delta Protection Act and the County of Origin Act and what 17 needs to be resolved with the laws during these hearings. 18 Can you give me your understanding of is there a law that if 19 we are in a terrible drought and the water is being released 20 from the reservoirs to meet the flow standards, what 21 protects that water to get to the Delta for what it is 22 supposed to get there for and not being pulled off by 23 riparian and pre-1914 water right holders? 24 MR. LILLY: If there is, in fact, insufficient natural 25 flow water in the system to provide the pre-14s and CAPITOL REPORTERS (916) 923-5447 39 1 riparians, then you are correct. We agree they would not 2 have the right to divert that water. 3 But, frankly, that is not a Bay-Delta issue. That is 4 straight, pure water right issue, and this Board already has 5 been addressing that. 6 Back in the last drought the Board, I think through Mr. 7 Pettit, sent out notices to the pre-14 riparians saying 8 after a certain date there was no water available in the 9 system for their diversions. We are not in any way 10 suggesting that that process should be stopped. If another 11 drought, the Board should do the same thing. If necessary, 12 follow that up with an enforcement action. That is not a 13 Bay-Delta issue; that is just a pure water right enforcement 14 and should be done as part of this Board's general water 15 right enforcement responsibilities. 16 What we have said we don't think is going to be 17 necessary is for the pre-14s to actually curtail for 18 purposes of Bay-Delta outflow, which is really a different 19 issue. We're certainly not advocating that they should be 20 able to steal water. And, frankly, a lot of them, like our 21 clients, are on tributaries where, if it is that severe of a 22 drought, the water is not there anyway. I think your issue 23 comes up most obviously on the Sacramento River where there 24 is flow from reservoir releases. And as I said, the Board 25 should be dealing with that with water rights enforcement. CAPITOL REPORTERS (916) 923-5447 40 1 C.O. BROWN: Thank you, Mr. Lilly. 2 MR. LILLY: Thank you. 3 C.O. BROWN: Mr. Frederick Bold. 4 MR. BOLD: Members of the Board, I am Frederick Bold 5 representing the City of Antioch, the City of Pittsburg and 6 the Diablo Water District. When I say "we," I am referring 7 to those three entities. 8 We are involved in this hearing solely with respect to 9 the Delta Protection Act. And, therefore, it is our 10 recommendation to the Board that the subject of the Delta 11 Protection Act be a separate session of Phase VIII, 12 separately scheduled and noticed. We have had quite a time 13 trying to find out when we are apt to be called or when we 14 are apt to be allowed time to present our case. And may I 15 add this, that we join the comments submitted by Robert 16 Maddow on behalf of Contra Costa Water District. 17 Thank you. 18 C.O. BROWN: Thank you, Mr. Bold. 19 Questions? 20 Mr. Robert Maddow. 21 MR. MADDOW: Thank you, Mr. Brown, Members of the 22 Board. Good morning. I am Robert Maddow appearing today on 23 behalf of the Contra Costa Water District. 24 The district has been involved through much of the 25 first seven phases and was quite involved in commenting on CAPITOL REPORTERS (916) 923-5447 41 1 what we all now know is Decision 1641. The Delta Protection 2 Act was a significant element in our comments in that 3 regard. We've fairly consistently been saying that the 4 water district believes that the Delta Protection Act does 5 have considerable significance to this proceeding, 6 especially in Phase VIII. I am not going to reiterate 7 everything that was in our comment letter that you have 8 received and that several others have remarked this 9 morning. 10 But let me sort of touch on a couple of high spots. 11 We think the Delta Protection Act does create a set of 12 obligations that this Board needs to carefully take into 13 account, and the Board is going to have to make some 14 determination as a part of this hearing. 15 We were talking about the -- I am here with Dr. Richard 16 Denton, the manager of water resources of the water 17 district, and we have been talking about this proceeding on 18 the way up and during the early part of today's workshop. 19 In many respects the Delta Protection Act works like some of 20 the settlement agreements that you have just been dealing 21 with in the first seven phases. It is a legislatively 22 imposed settlement agreement that deals with some of the 23 rights of some of the parties to this proceeding. 24 We think that just as those settlement agreements have 25 been made a part of Decision 1641 now and established the CAPITOL REPORTERS (916) 923-5447 42 1 rules in regards to some of the water rights holders before 2 you, so too does the Delta Protection Act work that way. We 3 think it is an important and perhaps early element of what 4 you need to decide so that we can all have a common 5 understanding of how the Board views the effects of that 6 statute. 7 We think that Delta Protection Act does set up some, I 8 am going to call them, preconditions that relate to the 9 exports by the state and federal projects. We've talked 10 about that in the various communications we have sent to the 11 Board over time. We think that when combined with the 12 Watershed Protection Act, those protections extend to areas 13 adjacent to the statutory Delta. We think those are also 14 issues that need to be dealt with in this proceeding by this 15 Board and some determinations made. 16 After the hearing we think it is possible that you will 17 need to actually put some of the provisions in some of the 18 permits of some of the parties before you, particularly, of 19 course, the federal government and the Department of Water 20 Resources, related to implementation of those protections 21 that flow from those statutes. 22 We certainly recognize that this is not a one-way 23 street, that the beneficiaries of the Delta Protection Act 24 and the other protective measures have certain obligations 25 with which they must comply. In the case of the Contra CAPITOL REPORTERS (916) 923-5447 43 1 Costa Water District, we think that obligation is best 2 expressed through the water supply contract of the type 3 which the district has with the federal government. 4 A second key issue you identified in your notice was 5 carriage water. We think that this, too, is a critical 6 issue in this proceeding. On the factual or technical side, 7 we think that it is perhaps among the issues you should 8 attempt to deal with early. Unlike Cal/Fed or some of the 9 other things you have been discussing with the people who 10 have appeared before you earlier today, we think that this 11 is work that can get going now. And we think it is 12 important because we really don't have a clear definition of 13 carriage water that works very well for all the types of 14 circumstances in which carriage water can be an issue. 15 There may be one definition. There may be variance on 16 that definition depending upon hydrologic circumstances or 17 different conditions. In dealing with carriage water, you 18 have to look at accounting for all the major factors that 19 have a bearing on or might even control Delta salinity. We 20 think there is a good deal of technical work that has been 21 done, and it needs to be focused and brought to bear for the 22 purposes of Phase VIII upon which you are about to embark. 23 We think it is important that whatever method or 24 methods that are used there, there be time and effort spent 25 on verification of the methods that are used by comparison CAPITOL REPORTERS (916) 923-5447 44 1 with historic data. There is a good deal of historic data. 2 A good deal of that comparison that has been done. We think 3 that where there is uncertainty about such things as the 4 impacts of Delta diversion or impacts of return flows, that 5 there needs to be some modeling exercises, some modeling 6 work needs to be done. We think there are sensitivity 7 analyses that need to be done to check the effects of 8 varying estimates of net Delta consumptive use values over a 9 reasonable range of predicted salinities. That is a fair 10 amount of modeling work that we think is not yet complete 11 and that we think can have a bearing on what carriage water 12 is in the opinion of this Board. 13 Contra Costa has been a participant in the activities 14 of the Bay-Delta Modeling Forum. You have received a letter 15 among the comments you have received for this workshop from 16 representatives of the Bay-Delta Modeling Forum. We commend 17 that letter to you and urge the Board to give it your 18 serious consideration because there is an important 19 technical issue on which the parties and the Board can work 20 together to try and get one of the fundamentals clearly 21 defined, perhaps early on as we go forward into this phase. 22 There have been a number of comments about the 23 structure of the hearing and particular finite tasks that 24 the Board might embark upon as you consider how to notice 25 Phase VIII. I would like to observe that we, Contra Costa, CAPITOL REPORTERS (916) 923-5447 45 1 agree with the comments of the Sacramento Valley parties on 2 whose behalf Mr. Baber spoke earlier this morning regarding 3 the wisdom of your Board having your staff quantify the 4 deficiencies that we are now looking at in light of what the 5 various settlement agreements in 1641 have meant in 6 relationship to the numbers that we were working with when 7 we have been working with the alternatives up to the time 8 that Decision 1641 was adopted. We are not sure that we 9 know exactly how the Board views the deficiencies now that 10 you have adopted those settlement agreements, in particular 11 when you look across the full range of various alternatives 12 before you. 13 Our suggestion is not to go back and reopen any aspect 14 of Decision 1641. We certainly don't want to go that way, 15 but we do think it would make some sense for you to have 16 your staff go first and, among other things, to give us a 17 new look at how they view the deficiencies and various 18 alternatives now that those settlement agreements have been 19 adopted. You almost have to have them say with and without 20 those settlement agreements what happens. 21 We recognize that staff doesn't and you don't have all 22 the evidence about exactly what would happen if one were to 23 take a look at the water rights, the parties who were 24 involved in those settlement agreements. Obviously, there 25 would need to be some ranges. Perhaps even with those CAPITOL REPORTERS (916) 923-5447 46 1 ranges by the staff that I have referred to would be a value 2 to the Board and to all the participants. 3 With regard to the idea of the staff going first in the 4 proceedings, Contra Costa endorses the comments of the State 5 Water Contractors made by Mr. Schulz and comments of the San 6 Juan Water District and other Sacramento parties represented 7 by Mr. Lilly. There are issues about the alternatives, 8 issues that have to do with the contents of the EIR, 9 frankly, on which having the kind of presentation that those 10 two gentlemen referred to by your staff early in the 11 proceedings could be helpful. In fact, Contra Costa thinks 12 that it may even be advisable for the parties to be given an 13 opportunity to not only hear from your staff in regard to 14 those issues that have been discussed earlier today, but 15 also to perhaps make a supplemental submittal of evidence, 16 perhaps not even have to submit their evidence until after 17 the staff presentation takes place. 18 I will stop at this point. Contra Costa does look 19 forward to participation in Phase VIII. As I said before, 20 Dr. Denton is here with me. He is far more capable of 21 dealing with the technical issues dealing with modeling and 22 that sort of thing than I am, and either one of us would be 23 happy to take any questions. 24 C.O. BROWN: Thank you, Mr. Maddow. 25 Any questions? CAPITOL REPORTERS (916) 923-5447 47 1 MEMBER FORSTER: One of the early comments you made on 2 carriage water, you asked that that be considered early 3 on. And I asked the question earlier whether that should be 4 alone, whether that should be folded into, if we chose a 5 process that went alternative by alternative or a 6 combination of alternatives or somebody who proposed an 7 alternative. You said early, but if you are having this 8 modeling group, would they be ready early? I am a little 9 confused about how we do the carriage water copy. 10 MR MADDOW: I can't tell you exactly how much time it 11 is gone to take for the modeling work that needs to be done 12 nor can I tell you exactly when your notice is going to come 13 out. My thought was that early on in the process meaning as 14 -- let me restart that sentence. 15 One of the things that the Bay-Delta Modeling Forum 16 letters suggested to you was that the State Board might 17 assign a member of its staff to work in this technical 18 modeling capacity with the modeling forum. Our thought, 19 Contra Costa's thought, anyway, in that regard is that 20 getting into those technical issues as early as possible, 21 there may be a series of answers from that modeling work 22 that will help the Board to cope with the issue of defining 23 carriage water and identifying the issues that relate to 24 carriage water that the parties are going to have to deal 25 with in this proceeding. CAPITOL REPORTERS (916) 923-5447 48 1 Our thought was, to the extent that work can be done 2 early, it might end up presenting part of technical for the 3 proceedings as we go forward. I can't speak very precisely 4 to the schedules because each is a variable that I don't 5 know all the answers to. But I think that the modeling work 6 can start very quickly. In that respect, I would urge the 7 Board to consider working with the modeling forum. Again, I 8 believe this is basically technical work that can be done 9 other than in this kind of an adversarial process. 10 In that way we can have a common base of fundamentals 11 to which we can add the results of the carriage water work. 12 And the Board then might make an early decision during the 13 proceeding as to how it intends to deal with carriage water 14 throughout the balance of the proceeding. 15 That is not carefully refined. We haven't worked our 16 way through that issue as thoroughly as we could have with 17 all the other participants who are here, but that is our 18 initial thoughts going into this process. 19 MEMBER FORSTER: What do you think about the trial 20 briefs up front where everybody lays out on the table their 21 thoughts on the issues that would be the most obvious issues 22 of Phase VIII? 23 MR. MADDOW: We think it is a good idea. I think the 24 key to what trial briefs can mean to you is your notice, and 25 I heartily enforce Mr. Lilly's comments about not just CAPITOL REPORTERS (916) 923-5447 49 1 giving us a new supplement or something like that. But I 2 think it should be done this time the long and hard way. I 3 think you need to go back to square one and start with a new 4 notice of this proceeding, call out what remains to be 5 decided from what has been decided and come up with a kind 6 of schedule that you have been discussing with others this 7 morning. 8 I do think the 90-day time frame is probably a 9 reasonable one to start thinking about. Then I would 10 suggest that the parties have an opportunity to submit trial 11 briefs, let me call it sort of expanded opening statements 12 in some respect, prior to the commencement of the actual 13 proceedings. I think that is a good idea. 14 MEMBER FORSTER: Do you like the idea of going 15 alternative by alternative? Do you think that if we went 16 that way, just as sort of a category like we did in phases, 17 if we went that way, would we be able to adequately 18 incorporate everything that everybody wants to say on the 19 Watershed Protection Act, the Area of Origin Act, the Delta 20 Protection Act, Racanelli, public trust? 21 Could we frame it all in those alternatives, or would 22 we have to just look at the alternatives, see how people 23 want to frame them -- staff will come up obviously with 24 procedures. We may need another workshop to see if that 25 procedure works. But if you were a Board Member, how would CAPITOL REPORTERS (916) 923-5447 50 1 you want to hear all this evidence? What would make it -- 2 what is the easiest thing for us, easiest thing for all you 3 parties in how to organize this? 4 MR MADDOW: Well, I am certainly not going to speak for 5 all these parties. And I have -- you used the word 6 "adequately" I think twice. I am not going to touch that. 7 I guess my reaction is that if you were to try to go 8 alternative by alternative, take all the testimony on 9 Alternative 2 before you heard any testimony on Alternative 10 3, I think that might lead to a more protracted hearing then 11 if you were to start with the two major projects and, 12 frankly, the State Project contractors who are always an 13 active participant when looking at the State Water Project, 14 and take their testimony in regard to each of the 15 alternatives and allow for a full range of 16 cross-examination. And then perhaps there is a way in which 17 to do some grouping rather than by alternative by watershed. 18 There might then be a group of Sacramento Valley 19 parties whose cases in chief are presented, and we're called 20 in a way through each of the alternatives in that regard; 21 and then there is sort of a natural grouping of the parties, 22 the Delta parties let me call them. I think that might tend 23 over time to reduce some of the repetitious and redundancy 24 which might occur if we were to go alternative by 25 alternative. CAPITOL REPORTERS (916) 923-5447 51 1 C.O. BROWN: Thank you. 2 MR. MADDOW: That is something I started thinking 3 about when I heard the first question you asked the first 4 witness on this matter this morning, Ms. Forster. 5 MS. FORSTER: Thank you. 6 C.O. BROWN: Thank you, Mr. Maddow. 7 MR. MADDOW: Thank you. 8 C.O. BROWN: We will take a 12-minute break. As usual, 9 I will allow you to bring a drink back into the room if you 10 have a lid on it. And on the proviso if a charming 11 redheaded lady walks through the door, you hide it, and you 12 are on your own. 13 (Break taken.) 14 C.O. BROWN: Come back to order, please. 15 I understand, Mr. Nomellini, that you are going to 16 allow Mr. O'Laughlin to proceed in front of you. 17 MR. NOMELLINI: Being the good guy that I am, Mr. 18 O'Laughlin may move ahead. 19 MR. O'LAUGHLIN: Strange bedfellows. 20 MR. O'LAUGHLIN: Thank you. Tim O'Laughlin 21 representing the San Joaquin River Group Authority. 22 We did not submit written comments. I have some brief 23 comments to follow up on the briefs that were submitted by 24 other parties as well as the questions that were asked here 25 today. CAPITOL REPORTERS (916) 923-5447 52 1 In regards to settlements, of course, we support 2 settlements. We are very pleased that the South Sutter was 3 noticed for April. In regards to Ms. Forster's question in 4 regards to other settlements that may come forward, we 5 believe that if those are properly noticed, they could fit 6 into a Phase VIII for one- to two- or three-day hearings as 7 needed, as the process moves forward. That should allow the 8 parties that are trying to reach settlements the benefits of 9 reaching those settlements and having them heard and dealt 10 with in an expeditious fashion. 11 We also are supportive of the request put forward by 12 numerous parties that a new Phase VIII notice go out, a 13 complete notice for Phase VIII setting forward the parties 14 and issues that need to be resolved. I went through an 15 exercise briefly of trying to go back and take the various 16 notices and put them together, bring my client up to speed 17 on who was and wasn't in the process and what the issues 18 were, and found it very difficult and cumbersome. In fact, 19 there were numerous conflicts that were within the notices. 20 If a new notice could be out in April, we would see 90 21 days for preparation of testimony, having that submitted in 22 late August or early September with a start date in late 23 September. 24 One of the things that we think is crucial, since 25 hopefully we won't be submitting much of any evidence in CAPITOL REPORTERS (916) 923-5447 53 1 Phase VIII on behalf of the San Joaquin River Group 2 Authority, we are very concerned, though, about a number of 3 the legal issues that will be addressed in Phase VIII. We 4 would like to see trial briefs submitted at the start of the 5 hearing process. We believe those should be submitted one 6 month prior to the hearing starting. I think that would 7 allow your staff time to organize the issues on a legal 8 basis for your understanding of the testimony as it comes 9 in. 10 One of the things that may be helpful, and we've talked 11 about this briefly within our group of clients, is that some 12 of the legal issues are so pervasive -- you heard about the 13 Delta Protection Act and Watershed Protection Act and Area 14 of Origin. It may be necessary as you go through the Phase 15 VIII hearing to set aside a separate day on legal issues 16 rather than have protracted opening statements by parties. 17 It may be that after the process has started and testimony 18 has started to come in that you would then have parties 19 being able to make what would be almost legal arguments or 20 closing statements or discussions regarding the application 21 of these various principles to the evidence that you are 22 hearing. You may want to set aside separate days during the 23 hearing procedure to hear that. 24 We are adamantly opposed to the suggestion by Mr. 25 Schulz. In fact, we wrote a letter on this when the State CAPITOL REPORTERS (916) 923-5447 54 1 Water Project contractors wrote a letter back in last August 2 on the 314s being including within the process. We 3 understand the problem. We met with representatives of the 4 Department of Water Resources and State Water Project 5 contractors on this problem, their water moving through the 6 Delta and having problems with it being diverted. We do not 7 see that as a Bay-Delta issue. We see that as a water right 8 issue. We see that as an enforcement issue by the State 9 Water Control Board, but not as a Bay-Delta issue. 10 We agree with Mr. Baber's comments, if you do do a 11 revised notice, that you clarify the issue of pre-14s and 12 riparians being included in the Phase VIII process. 13 As far as we can tell, it would be very helpful if you 14 took phase Alternative 5 off the table. We realize why you 15 had it in there for EIR purposes. But if it's not going to 16 be part of the adjudicatory process and you've reached that 17 conclusion, then we should take Alternative 5 off the table 18 thereby, if there is any lingering hope by anybody or 19 understanding, that pre-14s or riparians are in or out 20 finally. 21 Finally, we support the suggestion by numerous parties 22 that with this type of scheduling we would wait until the 23 Cal/Fed ROD is completed. And as far as the ordering of the 24 proceedings, we would see State Water Resources Control 25 Board staff going first. We would then see the CVP and SWP CAPITOL REPORTERS (916) 923-5447 55 1 projects going next. We agree with a grouping by parties 2 and parties of interest. We do not see it going forward on 3 an alternative-by-alternative basis. You would have a 4 protracted hearing if you did so. 5 The parties then would be free within those groupings 6 or within their presentation to make evidence available to 7 the State Water Resources Control Board on the various 8 issues or alternatives that they thought were important to 9 them or applicable to them rather than going alternative by 10 alternative. 11 I want to thank the other speakers for letting me jump 12 in front of them. 13 Do you have any questions? 14 C.O. BROWN: Thank you, Mr. O'Laughlin. 15 MEMBER FORSTER: I do have one question. 16 C.O. BROWN: Okay. 17 MEMBER FORSTER: Somebody brought up that we should 18 include in Phase VIII monitoring and enforcement. You 19 mentioned enforcement as a water right issue. It's probably 20 DWR that then said, "With all the monitoring going on, who 21 is going to pay for the monitoring?" 22 What are your feelings on that? Do you think that a 23 discussion of monitoring enforcement and how it would work 24 and that the parties should be a part of it, or does that 25 belong someplace else? CAPITOL REPORTERS (916) 923-5447 56 1 MR. O'LAUGHLIN: I have also been very curious as these 2 proceedings have been moving forward as to how the State 3 Water Resources Control Board viewed monitoring enforcement 4 under the various alternatives. To take a hypothetical 5 example of Term 91s are going to be applicable to everyone, 6 how is it that the State Board -- is the State Board going 7 to be responsible for doing that? Is staff going to send 8 out notices to everyone? What mechanisms are there for 9 enforcing that is the State Board going to take? Is it 10 going to leave that enforcement to the State Water Project 11 contractors and the CVP contractors? 12 I will tell you in looking at the various alternatives 13 that are in front of you, especially Alternative 5, where 14 your get information, how you interpret it and who is 15 applying it makes a great deal of difference in regards to 16 starting the clock ticking on who makes what water available 17 when and where, as well who is going to be empowered to make 18 those parties either bypass flow or release stored water to 19 meet those requirements. 20 I think that that is one of the things that I have been 21 very interested in seeing the State Board address. And it's 22 been completely lacking in the hearings to date. Because if 23 you leave it -- the question is, is the State Board going to 24 take on that responsibility and duty or does it have that 25 responsibility and duty? Or is it going to try to delegate CAPITOL REPORTERS (916) 923-5447 57 1 to other parties that responsibility and duty? 2 I think it would be very interesting. Take Alternative 3 5. Whose data are you going to rely on for triggering the 4 mechanisms within Alternative 5? I have to believe that is 5 a project operator for various reservoirs facilities that 6 have reporting data. If Alternative 5 comes down the track, 7 when do we make that data available? Who do we make it 8 available to? Who is making the decision in regard to 9 that? Those are very difficult questions. 10 That is an issue, that if you go forward within Phase 11 VIII, needs to be addressed and incorporated within the 12 hearing notice. 13 MEMBER FORSTER: Thank you for your comments. 14 MR. O'LAUGHLIN: Thank you very much. 15 THE COURT: Mr. Nomellini. 16 MR. NOMELLINI: Members of the Board, Dante John 17 Nomellini on behalf of Central Delta Parties. 18 I would like to begin first by giving you my broad 19 perception of how we got to where we are today, talking 20 about a Phase VIII. Some of this you have heard in various 21 parts. Some of it involves my concern for the role of the 22 State Board in deal making, the role of staff and those 23 things and subjects that are sensitive to talk about. But I 24 think it is important. If you don't understand our view of 25 it yet, perhaps I can try again. CAPITOL REPORTERS (916) 923-5447 58 1 Back in D-1485 the proceedings of the Board were 2 directed at limited determinations of what the water quality 3 standards should be, limited because the Board was focusing 4 in on the project, State Water Project and CVP permits 5 alone. And their entire proceedings limited what they 6 thought the protective mechanism should be for fish, 7 wildlife, agricultural and M&I in the Delta based on their 8 perception of what the projects might be. 9 When we got to court, the primary issue in the case, in 10 my view, was whether or not the Board made a mistake in 11 limiting its determination of what it needed to protect of 12 the beneficial uses in the Bay-Delta estuary by reason of 13 what they thought the remedy would be. 14 I think the law is clear, and of course all the lawyers 15 will argue forever on different sides, I think it is clear 16 that the message from the court was, "State Board, you're 17 not limited in your task or your duties aren't limited in 18 setting the protections that are needed, the protective 19 standards of water quality by reason of what you think you 20 can do as a remedy." That is why there is language in 21 there, all kinds of ways of implementing water quality 22 standards. 23 Well, following Racanelli, the Board had quite a 24 difficult time revisiting the water quality standards. And 25 EPA had established its own initiative, placed the Board on CAPITOL REPORTERS (916) 923-5447 59 1 notice, started the one-year waiting period that if the 2 Board did not implement that EPA would step in and determine 3 and designate objectives. The State Board made an attempt 4 in D-1630 to come forward with an interim, another interim 5 decision. That had a lot of concerns and, in my view, the 6 governor interceded and backed the Board off on D-1630, not 7 that I liked the decision. I thought it was terrible. The 8 process is what I am telling you, is what I see. 9 Subsequent to D-1630 there was what we call a framework 10 agreement put together by -- I think under the leadership of 11 the then governor, Governor Wilson. That put together the 12 state and federal agencies, the regulatory agencies, as well 13 as the two projects and unfortunately the State Water 14 Resources Control Board, which I think is totally 15 inappropriate as a party because you have to sit as our 16 judge in these water rights matters. 17 Anyway, out of the framework agreement came an effort 18 to reach agreements. The agreement that is most reflective 19 and most determinative of where we are today is the 20 principles of agreement or the Delta Accord. It basically 21 set up environmental protections that I think, and I use the 22 term rubber stamp but, reflect themselves in the 1995 Water 23 Quality Control Plan. And I think the efforts of the Board 24 of going forward, at least procedurally, were quite clearly 25 that you were going to embark on that endeavor to adopt CAPITOL REPORTERS (916) 923-5447 60 1 those 1995 water quality standards pretty much reflecting 2 what the agreement was that was worked out in the Delta 3 Accord. There are some minor differences, but they are not 4 significant in my view, just being hyertechnical to claim a 5 difference. 6 The Delta Accord had in it a number of features that I 7 think are totally inappropriate. And I don't know, you 8 know, whoever was in the room, you are dealing with some 9 sophisticated attorneys and water rights and stuff like 10 that, so it means different things to different people. But 11 one of them was, and written all over that agreement is, 12 State Water Resources Control Board shall do this and shall 13 do that. I pointed that out to you to the point that I am 14 sure you are tired of hearing that. But there was -- the 15 concept was to provide the environmental protections with no 16 net loss to exports. And, in fact, with regards to the San 17 Joaquin River fishery flows, the Bureau was going to provide 18 those for a three-year period with water from the watershed, 19 what I call the dirty deal. Take New Melones water and push 20 it down the river and buy water to the extent that you might 21 be able from the tributaries, but in all cases avoiding an 22 impact on the exporters. 23 As a part of that Delta Accord, I believe the Board 24 committed this process. The process was when the EPA 25 standards were put out, and I think they call it Club FED, CAPITOL REPORTERS (916) 923-5447 61 1 they were kind of grouped together, talking about what their 2 standards could be. There was an outcry that those 3 standards would deplete the water resources by 4 X-percentage. Somebody, I think it was EPA, said, "Well, if 5 you spread that burden among all the water right holders pro 6 rata, it comes down to a smaller percentage." To somebody 7 unfamiliar with the investment in property rights associated 8 with water rights, global thinker, probably seemed okay. 9 Coming right out of the philosophy course at one of the 10 universities. 11 As a result of that, we started a process. We had to 12 decide what to do in the interim because we have all this up 13 in the air. I came in early, and I said I thought we ought 14 to get the legal rules briefed and settled. Tom Graph, who 15 is not here today, he was the other guy in the room at the 16 regional workshop who said we ought to get these legal 17 issues settled before we spend money and time in these 18 hearings. 19 Anyways, the Board embarked on this process of phased 20 hearings. And my read of the objective of the water 21 contractors was to use the Board's threat of coming in and 22 imposing some arbitrary or some -- perhaps somewhat 23 substantiated method of casting this burden about all the 24 water right holders so that agreements could be negotiated 25 and worked out. The Board many times said we encourage CAPITOL REPORTERS (916) 923-5447 62 1 parties to work out agreements of this, that and other 2 things, I don't know, time and again. Hopefully the whole 3 thing would go away. Fine. 4 The parties to the Delta Accord are the ones that have 5 set the time table; and it is obvious that water as it 6 affects the Delta is primarily in the hands of the state and 7 the federal government. Those two projects are the lion 8 share of the control of water in the Bay-Delta estuary. 9 They are the big players. 10 Historically, the Board didn't get roped into doing the 11 enforcing for the projects or whatever. The Board set the 12 standards, set the obligation of the projects. If the 13 projects thought a water right holder was abusing their 14 water right, the project and their contractors would go jump 15 on them. In fact, after the '76-77 drought, the Department 16 of Water Resources on behalf of their contractors, a little 17 too much on behalf, sued Delta farmers for enjoying the 18 benefit of improved water quality during those drought years 19 that they contended would not be there at that time. 20 That's the appropriate forum for these water rights to 21 sort themselves out. I don't think the State Board has 22 jurisdiction by law over riparian right holders or pre-1914 23 water right holders. I just don't think they have it. I do 24 think you have authority if you find or you think you want 25 to prosecute a case of waste or unreasonable use of CAPITOL REPORTERS (916) 923-5447 63 1 water. And I think you heard some of the attorneys before 2 me say to you, if you bring these people in, show us what 3 the charges are. 4 What they are telling you, let's say you decide that 5 somebody in the Delta is wasting water, and for our clients 6 we know how they operate. If they took too much water into 7 the island, they'd have to pump it right back in the river 8 or else they'd flood the lands. It's easy to see. But you 9 are going to question the reasonableness or the wastefulness 10 of the use of the water in Northern California in comparison 11 to the use of water out in the deserts to put lagoons in 12 housing developments. We have to put this in perspective of 13 what these people are asking you to do. I think they are 14 asking you to do this tongue in check. And I think the 15 Board has been roped into an inappropriate process that 16 makes it very much more difficult for you to get into that. 17 If there was a water right holder that is taking water 18 from the river during the drought that shouldn't be taking 19 it, an action in court for trespass on that water right 20 would be an appropriate one for that -- any harmed water 21 right holder to commence. That is traditionally left in the 22 courts. 23 Another thing, if somebody really wants to get the 24 system adjudicated so we know what everybody's rights are, 25 and maybe some day it should be, that adjudication could be CAPITOL REPORTERS (916) 923-5447 64 1 started by a water right holder on the stream system or the 2 entire system. The problem has been it is a very tremendous 3 burden just like it would be for you to give adequate notice 4 to all the riparian right holders if you thought you had the 5 jurisdiction. I would suspect that it would be prudent for 6 you as a Board to make some preliminary investigations and 7 determinations just like a prosecuting attorney would as to 8 what wasteful and unreasonable use it is that you want to 9 call a water right, a riparian right holder or pre-1914 10 holder in before you. I don't think you can do it in this 11 massive proceeding. And, of course, if you did it, we'd 12 spend the next 12 years or whatever, maybe longer, arguing 13 about it through the process. I don't think that is the 14 right place to go. 15 Now, in order to get our arms around this question, 16 first thing I would do, I heard a change in position from 17 the beginning of these hearings way back when to now from 18 the people that I think are driving the pace of this 19 proceeding, and those are the water contractors, export 20 contractors and the two projects. And I hear them telling 21 you we want to wait until we see the Record of Decision from 22 Cal/Fed. Well, what the heck that means, how that is going 23 to help our proceeding? They're the ones that wanted -- 24 when we argued at the beginning that we ought to get these 25 legal issues out of the way, they were arguing, no, we want CAPITOL REPORTERS (916) 923-5447 65 1 to go forward with the phasing process and continue to do 2 this. 3 So, if there was an agreement by the Bureau and 4 Department of Water Resources and their water contractors 5 that they would continue to meet the Delta 1995 Water 6 Quality Control Plan requirements, and all of these things 7 have always been interim, always been interim as long as I 8 have been involved in this process, then we could certainly 9 wait to see the outcome of the Cal/Fed process. We have 10 litigation on file as to what we think your duties are, and 11 we are going to amend our complaint to add more issues. We 12 seek judicial determination of what your duties are with 13 regard to the Delta Protection Act, the Watershed Protection 14 Act. We seek those declarations. We have been trying to 15 get those determined in a court proceeding so we know what 16 the rules of the game are. 17 There would be an ideal opportunity if we went in 18 together -- and I don't mean on the same side of the issue, 19 I mean the Board is represented in the proceeding. We have 20 named all the real parties in interest. We have named the 21 federal government, the state. We could go in and ask the 22 judge in the court to decide those legal issues after 23 briefing. 24 The other alternative, some have suggested here, and I 25 think it is absolutely essential that if this Board is going CAPITOL REPORTERS (916) 923-5447 66 1 to embark anything like a Phase VIII, we have to get some of 2 the rules sorted out. And I would ask not that we just 3 submit briefs, but that we submit the briefs and then you 4 rule. You make the determination of how you think that 5 section is interpreted. And then we'll know what the rule 6 is when we go into the hearing. And I would suggest we'd 7 all benefit from early determination by court validating or 8 negating whatever your ruling is. 9 Now, the issues -- and maybe I didn't present it well 10 enough in my paper. I kind of presented it so many times my 11 enthusiasm for putting it out in front of you again perhaps 12 wasn't what it should be. But I view our role in this thing 13 as like a flea on the tail of the dog. We don't determine 14 the course of events. We, Central Delta Parties, have been 15 relegated for many years -- there is nothing new about it. 16 There is nothing wrong with it. We are reactive. We have 17 never been able to seek the direction that we think the 18 process should be in. 19 I appreciate this opportunity and I think you're 20 earnestly looking for broad comments and help on how to 21 proceed. I really recognize that, and I find that to be 22 refreshing and quite challenging, I might add, because it is 23 a difficult task to do. 24 I've outlined what I think the threshold questions 25 are. Let's say you really want to allocate a burden to CAPITOL REPORTERS (916) 923-5447 67 1 somebody else other than the projects. What are you going 2 to allocate? You to have find out -- I think it is clear 3 that they have to mitigate their own damages. They've got 4 to take care of the problems they caused. They can't take a 5 water right holder in the Delta or Sacramento River and say, 6 "Hey, you have to help me mitigate my damages." So we have 7 to find out -- we are talking about massive projects. There 8 is no question what the federal government has done to the 9 San Joaquin River. 10 Two minutes left? I beg for more time. I don't think 11 I am going to finish in two minutes. 12 C.O. BROWN: What do you need? 13 MR. NOMELLINI: I think I need at least ten. 14 C.O. BROWN: Okay. 15 MR. NOMELLINI: If I am holding somebody up, I will 16 step down and come back up later, if that is a problem. 17 We've got -- already you've indicated in your decision, 18 D-1641, what the burdens of the federal government are in 19 the San Joaquin River. 20 C.O. BROWN: I think Mr. Herrick just nodded you can 21 take off his time. 22 MR. HERRICK: Certainly. 23 MR. NOMELLINI: I don't want to be a burden. I want to 24 be helpful to this process if I can, whatever the orderly 25 process is. CAPITOL REPORTERS (916) 923-5447 68 1 C.O. BROWN: Proceed. 2 MR. NOMELLINI: What the impact of that is on the 3 Delta, for example, the theory is we are going to have Phase 4 VIII, and we are going to determine -- that is not clear. 5 Let's assume in your own mind you think you are going 6 to determine the responsibility of an appropriator of water 7 in the Delta without having the San Joaquin River as a part 8 of it. You kind of tried to tuck that away. We haven't 9 seen the result nor can we clearly define what the result is 10 going to be on the San Joaquin River. In fact, there is a 11 big study going on for ten years or whatever that is. 12 I don't know how you make a determination fairly as to 13 what the burden would be. We are going to say that the San 14 Joaquin River -- and I think the evidence is clear -- the 15 San Joaquin River always put good quality water in the 16 Delta, in the Southern Delta, even in the driest years like 17 1931. So I don't know how you do that without getting a 18 real determination of what is going to occur on the 19 Sacramento River -- I mean on the San Joaquin River. I 20 don't think you can leave it out. I think it all has to be 21 in there. 22 The pumps, what are the impacts of the pumps? Reverse 23 the flows -- having this stuff in the Water Quality Control 24 Plan is related to offsetting the damage of the pumps, 25 closing the cross channel, doing this and that. I don't CAPITOL REPORTERS (916) 923-5447 69 1 know how you plan on flopping that loss of yield associated 2 with that on somebody else. I don't think you can. And I 3 don't know for sure that we have enough knowledge or 4 evidence to come before you to clearly define where that 5 boundary is. Part of the testing on the San Joaquin River 6 is associated with determining what the effect of the pumps 7 is overall. 8 In a big picture what is happening with the projects, 9 and you heard Maddow talk about it, our view of the Delta 10 Protection Act is that it was the physical solution adopted 11 by the Legislature that said, "Look, projects, we are going 12 to let the state and federal projects build projects, go in 13 the water business to serve water to exporters. We are 14 going to let you do that, but you have special 15 responsibilities. You've got to provide an adequate water 16 quality in the Delta, salinity control which is an 17 enhancement in the summer." But what we are doing is we are 18 taking water away in the spring that would have otherwise 19 flushed the Delta. You have to do that as a part of the 20 overall planning and permission to do this. Take the 21 government, our own state and federal government, into the 22 business of moving water from Northern California to the 23 valley and Southern California. 24 So, we view it as a physical solution. We don't think 25 these water contractors have a claim on all the water that CAPITOL REPORTERS (916) 923-5447 70 1 is unregulated flow. What is the firm yield of the Oroville 2 Dam? I think it's less than 200,000 acre-feet, the firm 3 yield. Yet I sat here and had to listen to a lawyer say 4 they gave up a million acre-feet for the Delta Accord. They 5 were taking a million acre-feet they weren't entitled 6 to. That wasn't their water. It wasn't water they captured 7 in their dam. In fact, in '76 and '77 they were storing 8 water in the summer months of the drought, and they were 9 trying to collect money from us in the Delta. 10 The March -- 11 C.O. BROWN: Mr. Nomellini, we are really trying to 12 identify the process, how we go about doing this. I will 13 give you plenty of time -- 14 MR. NOMELLINI: The issues I've laid out in my paper in 15 terms of the obligations of the projects to do the 16 mitigation, their obligation. What is salinity control? 17 What is their obligation on tha