Is water banking in SLO County’s future?

January 27, 2014

Semitropic004Eyes on your water: First in a series of reports on the North County’s festering water politics.


Little San Luis Obispo County is poised to become a major player in the West’s high-stakes water future, even while local land-owning water users fret about declining supplies stressed by an increasingly voracious agricultural thirst.

Meanwhile, strategies of a variety of county water users — their anxieties exacerbated by a deep and persistent drought — are competing for control of the biggest component of this county’s water storage capability, the Paso Robles water basin.

And now, the basin — the largest aquifer west of the Rockies — is being considered by some powerful entities for utilization as a “water bank.”

It is an objective that cannot be realized without creation of a special water district, plans for which are gaining a considerable head of political steam. A district’s formation would necessitate enabling legislation, now being contemplated for sponsorship by Assemblyman Katcho Achadjian (R-San Luis Obispo). Such a district is favored by two area groups which recently merged their objectives, the Paso Robles Agricultural Alliance for Groundwater Solutions (PRAAGS) — representing the biggest vineyards overlying the Paso Robles groundwater basin — and PRO Water Equity.

PRAAGS legal representation is being provided by Ernest Conant, a lawyer for the controversial Kern Water Bank in the Central Valley.

Consensus on local water banking is thin; some North County landowners are balking at the idea of establishing a water district, fearing that special interests are fast-tracking legislation to prevent any future intervention in North County water-rights conflicts by the courts. Two local lawsuits have been filed in an attempt to protect existing rights of current landowners, and to assure those rights carry into the future.

A plaintiff in one of the lawsuits, Cindy Steinbeck, said in an email to members of an overlying landowners group, Protect Our Water Rights (POWR), that representatives of the two bigger entities, PRAAGS and PRO Water Equity, may not be revealing the whole story.

“What they are not disclosing [about plans for a district and the legislation] may seriously impact your property rights, as well as the financial value of your property,” Steinbeck wrote. “We must stand together to protect our groundwater rights.”

Steinbeck said in a later conversation with a reporter that leaders of PRAAGS and PRO Water Equity “cannot seem to tell the truth” about plans for water banking in this county.

“I’m certain that at least one person in each group knows exactly what is going on,” she said, “and many of the rest are completely naive.”

At a Pear Valley Vineyard meeting last week,  members of PRAAGS admitted they seek in the legislation “exporting” powers and plan to do “water exchanges” with a Central Valley water bank, Semitropic Water Storage District.

Wider needs, less water

In concept, the idea of capturing water during wet years and saving it to use for homes, farms, ranches, and businesses during a dry spell sounds like it makes fiscal sense.

In reality, a water bank can create circumstances jeopardizing unsuspecting landowners who believe they have the rights to the water under their property.

Conservation measures of some sort are becoming increasingly important, because diminution of the above-ground resource parallels statewide urban and rural population expansion, and agricultural and industrial demands are increasing.

In prior decades, overland transfer was the preferred method of moving water from one location to another. But dams, reservoirs, canals, pumping plants, and other delivery infrastructure now are mere remnants of a past where “abundance” of the resource was a commonly-held misperception.

Even without a serious drought, evidence of a rapidly-shrinking water supply in the western United States is abundant: the combined capacities of the Colorado River, the state’s northern watersheds, the Central Valley Project, the Owens River and California aqueducts, cannot deliver one-fifth of the promised, and contracted-for quantities.

With more eyes on less water today, novel ways to develop, store, sell, and deliver water are being sought.

Banking is a system that makes it possible for water-rights holders to store water underground in aquifers for future use, but it also creates the potential of sale or lease of those water rights to distant destinations.

Why would the North County water basin, already over-utilized, stir the lust of any outside interest?

For advocates of a water banking future, it is simple: They perceive this county’s subterranean water vault, though increasingly bereft of actual supply, like wizened old prospectors surveying an empty moonscape mountainside and correctly concluding, “There’s gold in them thar hills.”

In this case, the “gold” is in storage capacity. Even if water in the Paso Robles basin continues to decline, the basin essentially remains a priceless resource repository, the kind that is bound to attract attention from beyond county borders.

It’s a snowballing profit potential that makes this basin the object of many covetous desires.

Evidence of outlying interest in the basin was suggested when the venerable Hardham Ranch, located on the southeastern edge of the city of Paso Robles, was sold to Roll International, the Southern-California based holding company owned by Stewart and Lynda Resnick of Beverly Hills. The ranch has for years been used for grazing and dry-farming.

But Stewart Resnick, 74, a UCLA law school alumni who has amassed an estimated personal fortune of $2 billion, had other ideas for the land, and for the water rights under that land.

Resnick purchased the ranch in 2011 and began a massive vineyard planting and irrigation project spanning its entire 750 acres, despite widely-recognized groundwater deficiencies in the region. Few country residents, save those whose properties were close to the property, voiced much concern. Few, as it happened, had ever heard of the Resnicks.

That probably won’t be the case in the near future.

A reckoning force

The Resnicks own a majority of the Kern Water Bank through their Paramount Farms, one of the nation’s largest agribusiness corporations. As part of that enterprise, their Central Valley farms produce huge harvests of pistachio nuts. They also own FIJI Water, Justin Winery, and other high-profile business entities.

Resnicks’ stranglehold on the Kern Water Bank is the unintended consequence of several historically-questionable decisions made by state water officials over the past 15 years. The bank was acquired after the state transferred Californians’ ownership of the bank to a Central Valley joint powers authority controlled, at least in part, by Resnick’s companies.

Among other fiscal benefits, according to a July 2011 article in the New York Times, the agreement authorized, for the first time, “permanent sales of water by and between State Water Project contractors, creating a new private water market.”

The notion of water banking in the past, reported The Times, “has been widely embraced as a tool for making water supplies reliable, sustainable and marketable. Groups traditionally at odds —  environmentalists seeking full rivers for fish, and farmers tending pistachio or pomegranate trees — agree that water banking is a useful strategy for managing a vital resource.”

But pristine as the intention might be, the business of water banking is not always conducted with the resource’s highest and best use in mind.

The Times reported that “pumping out huge amounts of (Kern Water Bank’s) stored water in dry years was thought to have little impact on the underground geology. But now engineers believe it reversed the area’s underground hydraulic gradient, turning a hill-shaped water table, accessible by shallow wells, into a valley. The trigger for the huge withdrawals was a drought that began in 2007. Kern County’s allocation of water from Northern California was cut. Then, in the 40 months beginning in March 2007, roughly half the banks’ capacity was pumped out to keep fruit and nut trees alive.”

Resnick’s farm company produces the world’s largest harvest of almonds and pistachios, both water-intensive crops, both grown in the semi-arid but richly-irrigated soil of Central California.

Roll International’s lawyers have been squaring off against a phalanx of lawsuits and ongoing water bank-related legal problems, and have found the efforts of a San Francisco lawyer named Adam Keats to be particularly nettlesome. Keats, senior counsel for the Center for Biological Diversity, heads the center’s California Water Law Project, aimed at seeking long-term solutions to freshwater delivery in California.

Keats told The Times that the Kern Water Bank was the result of a “back room deal by a cabal” of agricultural barons “that has produced an environmental nightmare, depleting fresh water in the Bay-Delta region; contributing to over-irrigation, groundwater depletion, and the buildup of selenium in the soils of the San Joaquin Valley; and threatening the habitats of endangered fish and wildlife.”

It all means, he told The Times, that “All this to serve the god of profit rather than the public good.”

He predicted a similar fate for the San Luis Obispo County region if water banking is initiated.

“What will probably happen is that the entire water supply will end up controlled by a few powerful people whose interests are not the same as those of most of your residents,” Keats told CalCoastNews in a recent interview.

Disputing the premise of a degraded supply caused by heavy agricultural pumping, Conant, the Kern Water Bank lawyer now locally involved with PRAAGS, told The Times he disagreed that the “rapid pumping caused the well problems in west Bakersfield, or that environmental reviews, in failing to anticipate the problem, were inadequate.”

Conant’s client Resnick rarely responds to media interview requests. But in November 2010 the billionaire told Bloomberg Businessweek that he regarded those lawsuits plaguing his Kern Water Bank as “a nuisance,” commenting, “If I think I’m right, I don’t care what people say. It’s their problem.”

(Next: “Paper water” may someday “fill” the basin’s water bank, and some visionaries will be getting very rich.)


Could the reason more homes and hotels are being built in the City of Paso Robles is so the City can sell more water too? That’s what it seems like.

Because common sense says:

“STOP BUILDING FOR A MOMENT” until things work themselves out so it doesn’t stir

controversy and citizens don’t feel deprived of current rights, at their expense.

What a bunch of crooks. Wake up people and get these city officials out of office.


Isn’t that what the county emergency ordinance did that has people up in arms. ( I know it applies to the county and not the city)


Where does the City of Paso Robles get their water (pump from) for resale to the

citizens that live within the city limits? Is it same basin that the county residents draw

from, ghee ya think? How come we never hear of the progress of the water processing

plant that is to process water drawn from Naciamento? Where is the plant and how far along in

construction are they? Who is accountable, what’s the time line and the price tag. It’s

like developing a health care website, peddling water with the back end not completed

don’t ya think? Cart before the horse?

Just stop building until this whole thing irons itself out for God’s sake. Why the push? Really, why the push to build when it is such a scarce commodity at this time due to drought and an explosion in agricultural growth.

Has any major grape growing establishment posted it’s water usage via meter to date? How much water do they use or are we going to just continue to speculate and take their word for it? I want to know, let’s say, how much water does Cindy use or Pear Valley use? “We don’t use that much water” doesn’t cut it for me.

Don’t you think we ought to know regardless of whether they are metered or not, so we, the people can asses actual usage? Is it a secret? We know how much every resident of Paso uses and what the city charges for it. Bottom line is, wineries affected don’t want to pay for the water. It will cut into their bottom line and leave the owners with less to operate with.

Why should I care? I have no water, the well went dry, 80 acres and no grapes or irrigated crops. Ficken bill me, for my usage I doubt it will break my bank for what we

use as a residence of over 50 years.

If there is no water, what difference does your rights make? Rights to water that doesn’t exist leave you with nothing in the end.

Can’t stand the heat, get out and go find another line of work or diversify like the rest of us.


The government uses crises to take control. Water is no different. Once the government has control of the water they will add fees, taxes and surcharges so that we all pay more and with all government programs the water will flow to the votes or the money that buys the votes. We are frucked as usual.

Jorge Estrada

If the plot thickens, just like oil, the owners of the pipelines will control all. Sure what is below your land will remain yours but the water level may be lost to the monster pipelines that get filled for the benefit of the high revenue residential customers.

All of this petty blame on agriculture is just a smoke screen for this slide of the hand. Don’t forget the Owens Valley, that Ground Water Basin and that we don’t have to become SLO Angeles!

If I had farm land, I’d farm every inch unless there was a law to protectect water rights, greater than or equal to, the level of voluntary conservation. I suggest ignoring the recent lowly local ordinance, it’s a Trojan Horse, adverse for those who comply.



I am trying to figure out what your logic and position is here — can you take the time to make it a bit more clear?

Jorge Estrada

OTOH, Obviously I’m not a writer but I do have founded opinions based on my experience and local view point.

If we did not have a pro-ag culture (rights-of-owners) in this county, wells and housing projects would be the sour grapes for discussion. In my opinion the battle over private rights just happens to be water this time. Private is a word that negates the need for more governance thence less tax revenue.

Today, during a drought, gov is going after private water rights using their old, very palatable, excuse to covert rich and poor to fare (as in what is yours is negotiable).

How would that work in your back yard, let’s say for a needed green space, for the neighborhood children? I do not value the right to privacy in your back yard to be any different than the right to privacy on ones large ranch, nor do I support trespass on any rights, water rights, that run with the land held in private ownership.


People of San Luis Obispo County-You may want to pay attention if you have a well.

You will lose rights to the water that is below YOUR LAND!

Quite possible that tour well will have a meter and will have to pay for YOUR WATER that is below your land!!!!!


Simply, water is gold and the Resnicks know it. He bought the land, then local concerned farmers lobbied to change water rights in Kern County because they were concerned about Paramount Farms. Not really, they used this as a ploy to set themselves up really nicely as water becomes scarcer. Don’t trust this people. A water district is about changing your water rights. Small land owners will lose all voting rights and larger land owners gain total control and then they can water bank – and bank is the key word here. Bank, for future sales.


Did the reporter bother to check in for comment from either PRAAGS or PRO Water Equity? If he had, he would have gotten the information that the Paso Robles Groundwater Basin’s geology is highly unlikely to be viable for banking. It is a very different geology than the Kern Water Bank. Furthermore, the Kern Water Bank was sold to Resnick’s interests essentially, with one intermediate step set up specifically for this purpose, BY THE STATE. The governance of the PRGWB would be in the hands of the landowners via a fairly elected board of directors. Now, if there isn’t a local governance structure in place, then either SLO County or the State of California will step in and provide governance. The State has already said it will do that if is isn’t done locally. Additionally, if none of these events happen and the basin is adjudicated, at the end, the courts will appoint a water master and that person will need a district to administer the allocations that he/she will define, and that would be the final outcome after years of time in court and millions of dollars, AND THERE WOULD BE NO MORE WATER IN THE BASIN THAN THERE IS RIGHT NOW. Seems like local control would be the best choice. This reporter is using scare tactics and it doesn’t represent Cal Coast News well as a result. Do your research!


Well put and right on the money


Why would the reporter ask PWE/PRAAGS about geology – isn’t that a question for an expert?

BTW Fullsail Local environmentalists pressured SWRCB to send that letter but it was admitted by SWRCB after that in a meeting the letter was an empty threat and that “the state” does not have the resources to step in.

The fear caused by this article should be felt because it IS REAL. It is strange to me that you are defending the Kern Water Bank and how it was created and that you fail to see the similarities in the PWE/PRAAGS water district – outside the public eye through Special Legislation that we are NOT able to review? Do you think that is fair? Maybe this reporter should look into that legislation and find out why they are hiding it from the public – I also find it really weird that the Blue Ribbon Committee unanimously endorsed PWE/PRAAGS but they have no idea what is in the PWE/PRAAGS Special Legislation. Aren’t they supposed to be looking out for PRGWB’s best interests?

Hate to break it to you but the PWE/PRAAGS board that enables the largest landowners to be able to sit the smallest agreage seats will be dominated by the largest landowners. That is not fair when those same landowners stand to profit IMMENSELY from expensive and unnecessary infrastructure projects that they will claim we need to “balance our basin” but really result in making US pay for the infrastructure so they can “exchange” our water for profit. This is absolutely ridiculous.

We have basins in our County and State with much more severe problems – doesn’t anyone find it odd that PRGWB, the largest aquifer western US, is the only basin with an Urgency Ordinance? And the basin that today the BOS admitted was considering “water exchanges” – FYI that means exchanging our water for someone else’s (aka water banking). Does anyone find it odd that the solution to our problem is to trade our water? Reality check folks – we have lots of water and no one else in the State does. So, the only way that the others can get it is to steal it from the overliers. To do this it must be done covertly and the way it is done is by transferring or exchanging or banking or conjunctively using our basin for the benefit of others – I am sure they will come up with a new word to throw us off since we now know all these ones. In order to do any of these a district needs to be formed and the “red herring” here is that PWE/PRAAGS needs “special legislation” for the hybrid 9 member board — when in actuality “special legislation” is being sought because they need “exporting” powers. Anyone defending PWE/PRAAGS at this point is either a PRAAGS member who stands to profit or people who were hired to come here to deceive the overliers and set up this “special” district. Watch the Matt Damon film called Promise Land – similar situation in our case it is water instead of fracking but unfortunately I don’t think the individuals pushing this agenda here will end up falling in love with a local and saving our basin – but we can hope@!


“PRAAGS legal representation is being provided by Ernest Conant, a lawyer for the controversial Kern Water Bank in the Central Valley.” This is not being done out of the goodness of their heart. Obviously, there is a big diamond at the end of the yellow brick road. Anytime you give up local control in this State you are done (actually, it is tough enough dealing with the local corruption). Anyone voting for this is very ill-informed. There is nothing good about this and the red flags should be Hill, Gibson and Praags are all in support.



Keats told The Times that the Kern Water Bank was the result of a “back room deal by a cabal” of agricultural barons “that has produced an environmental nightmare, depleting fresh water in the Bay-Delta region; contributing to over-irrigation, groundwater depletion, and the buildup of selenium in the soils of the San Joaquin Valley; and threatening the habitats of endangered fish and wildlife.”

It all means, he told The Times, that “All this to serve the god of profit rather than the public good.”

He predicted a similar fate for the San Luis Obispo County region if water banking is initiated.

“What will probably happen is that the entire water supply will end up controlled by a few powerful people whose interests are not the same as those of most of your residents,”


Water Banking is NOT a viable solution…It rarely is successful and ultimately destroys the health and Habitat of streams and waterways-You

CAN’T mess with mother Nature, and expect no consequence-Its another scam… a pipe dream that SLO residents will pay dearly for in the long run…


Not correct, pasovino. Water banking CAN be a viable solution as it’s little different from a surface tank or lake, and doesn’t destroy surface features like “streams and waterways”. Appurtenant politics however, of an enacted water bank, yes, now THAT is something to fear.

The problem comes from misused POLITICS or heavy handed or lop-sided administration by elected officials/boards/districts. From the strictly technical side, the vadose zone of almost any aquifer is like the freeboard in a surface lake, you can both RECHARGE and PUMP OUT moderate amounts of water based upon good hydrogeologic practices. The gravel or porous rock bed down there doesn’t much care if the water level rises and falls a bit, just as it rises and falls during heavy or light rainfall years.

I’m disappointed at your high number of thumbs up. We don’t need alarmism. We need to be aware of the differences of POLITICAL versus WATER STORAGE actions on our aquifer. Politics and districts, now yes THAT we can fear and be alarmist about.


“JUst as it rises and falls during high level -low level rain years?-That is true with NATURAL fluctuations in aquifers-Once an aquifer is pumped into overdraft-there are NO Guarantees that it can ever recharge and hold water to prior capacity. You risk saltation and pollution intrusion as well. The nearby surface waters (streams, rivers, wetlands, lakes) ARE effected by depleting and replenishing aquifers. Most hydrological systems are interdependent- Rivers and streams cannot maintain surface flows when the supporting aquifer falls below the substrate. Your data may pencil out on paper, but in practice, these projects often fall short. My caution is not a fear tactic -Just look at the TRUE long-term success rate of other water “banking ” operations in California-Who came out ahead? How did the environment and the nearby communities faire? …That’s what I thought….


And you state moderate amounts of water pumped out using sound practices…Who determines that?

Like you say, the cautionary tale is in the politics and money of “an enacted water bank”…there goes the safety, accountability and reliability…


I am with you pasovino. The truth is underground storage is relatively new and the ones that have been around 10+ years are telling us they are really not good. Check out Calleguas Water District in Ventura and how much water banking helped them. Or, look at the “water transfers” in Coachella Valley and litigation is sad and a cautionary tale to those who have been duped that this is a good plan for paso.

There is also a problem with what surface water you place under ground and whether it is real “wet” water or an allocation.

The problem is we have a failing State Water Project that has no water in it (only 5% this year) and legislation that has created a water market whereby private profit can be made from placing the “allocations” of SWP in “storage” underground. Urban areas have grown based on “allocations” of SWP water that were not a reality – FYI this is not regulated! Combined with the historical drought, we are seeing the most dependent users of SWP water (think LA) desperately trying to find places to put their empty allocations so that they have water resources secure for the future. Do a good search, water districts in their annual reports now have “portolios” like stocks! Unfortunately this is a very sophisticated Owens Valley scheme that the overlying landowners will not realize until it is too late. PWE/PRAAGS district will set up, we will get bills in the mail and over time as these transfers are made the ownership of the water under our land changes without us even knowing it.


NCGuy has it right. I only hope this very important issue is not too complicated or obfuscated by banking advocates for people to understand.


I am disappointed in your failure to research the long term success of water banking….and how it affects the local watersheds.

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