SLO County supervisors open the door to water banking

April 6, 2021

(Editor’s note: This is part one of a two-part series on the San Luis Obispo County Board of Supervisors recent vote to allow water banking in the county’s aquifers.)

By DANIEL BLACKBURN

A barely-noticed action early in March by the San Luis Obispo County Board of Supervisors likely has placed greater control of the region’s water supply in the hands of a few individuals and private water agencies.

On a split 3-2, north-south vote, supervisors on March 3 approved an amendment to the county’s contract with the state of California for deliveries from the State Water Project (SWP). An approval that creates the opportunity, some say, for a controversial practice called “water banking.”

“I’m very worried about this amendment,” said Supervisor Debbie Arnold, who voted against the proposal along with fellow North County Supervisor John Peshong.

The vote turned on Supervisor Lynn Compton’s support of the amendment, joining supervisors Bruce Gibson and Dawn Ortiz-Legg.

“I voted in the interest of my constituents,” said Compton, whose district is in the south county.

According to a report from county staff, the amendment “stems from SWP contractors’ need to have broader flexibility to pursue water exchanges or transfers within the project.”

This county was among the last of 24 state project contractors whose endorsements were required to enact the amendment.

The contract amendment reverses several prohibitions, and according to a staff report, now allows the county to (1) sell available water on an annual basis at a higher cost recovery rate; (2) both store water and transfer water in the same year; (3) utilize San Luis Reservoir as an exchange or transfer point, and (4) utilize storage locations other than San Luis Reservoir as an exchange or transfer point.

It’s the latter point Arnold and others find particularly disturbing, because the “other” primary storage location is the Paso Robles water basin, the largest underground aquifer west of the Mississippi.

“This amendment makes it easier for SWP contractors to bank, transfer, move water all over the place,” Arnold said. “This is just the wrong way for the county to go. If we are going to transfer and exchange, let’s do it within the county.”

Mike Brown is the government affairs director for the Coalition of Labor, Agriculture and Business (COLAB), an organization with members in both the southern and northern parts of the county.

“The fear of water banking is probably valid,” Brown said. “People in the Paso Robles area are very afraid this amendment will be manipulated by future users who want to be in the water banking business,” he said, adding that some of those “future users” may be individuals “posing as agriculturists.”

He noted that county and other water agencies will now have “the opportunity to store water they don’t immediately need, or sell to any of other SWP contractors, and also do water trades, sales, and swaps.”

The practice of water banking was explained in a Jan. 2015 CalCoastNews series entitled “Eyes on Your Water”:

“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, novel ways to develop, store, sell, and deliver water are 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.”

Arnold points to a “seismic shift” in the state’s water policy that has helped create current circumstances pitting the county’s north and south water interests against one another.

“The state has turned to underground water banking instead of building above-ground reservoirs, or other above-ground storage,” she said. “This is creating more (economic) opportunity for (private) traders in the future.”

Compton pointed to staff’s assertion that “the county would be under no obligation to use the tools enabled by the amendment.”

Arnold countered by noting that “this (vote) opens the door a little wider” to future actions that “might not benefit the county as a whole.”

One characteristic water developers share is patience: from-the-top planning for adequate water supplies occurs in 25-year increments.

Brown said the problem is part hydrology and part politics.

“In the Paso Robles basin there is a natural water level,” he said. “When imported water is placed essentially on top of the natural supply,” legal rights to the basin’s water are altered.

Traditionally, overliers (owners of property over an underground water source) would have priority rights to first use.

But Brown said he asked County Counsel Rita Neal at the March 3 meeting: “Who controls the state water placed on top of natural levels?”

Neal replied, according to Brown: “They do,” referring to entities banking their water.

Arnold said of Compton: “I don’t think she understands the issue; I’m not even sure she understands the issue as it relates to her district.

“One part of the newly-adopted amendment says ‘you shall cooperate with water banking’ very clearly,” Arnold added. “I want to create water independence for this county. That can be done, easily. I don’t want staff chasing around after state water, as they like to do.”

Three years after county voters soundly rejected a controversial bid for private control of the Paso Robles water basin, a small, resurgent group of wealthy, politically-connected landowners has quietly escalated efforts to ‘bank’ water in the voluminous North County aquifer, CalCoastNews first reported in Dec. 2019.

“Enlisting a powerful slate of individuals and entities — including a state board president, several political candidates, and local media—to bolster their claims, former proponents of a failed water district are seeking state assistance in promoting plans to store Paso Robles’ recycled sewer water and Nacimiento Lake water in the basin.”

(Next: The players behind the current quest for control of the Paso Robles water basin.)