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.)


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.

Supervisor Lynn Compton

“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.

Supervisor Debbie Arnold

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.)


Leave a Reply

Please Login to comment

Wouldn’t the NWP water be simply returning it to the basin?

You can’t count water originally prevented from entering the basing naturally as banked water when it is later “returned”.


Limited knowledge, 3 weeks water rights course given by a law firm that specialized. So know a little from a long long long time ago, dated, by no means legal advice.

Water rights are acquired by use. If you don’t use it, they can be acquired by others though a process similar to prescription.

So, if unused storage capacity of the North County basin is used by outside purveyors for a period of time (water banking), they might acquire ownership to that storage capacity, and the right to draw a certain amount of “stored” water even during a drought. They might then be able to redirect this water to where they choose, retaining the storage capacity since they would own that portion of the water tank, i,e., that portion of the North County Basin.

Please correct my simple interpretation.

Tyler Durden

And exactly ???WHY??? should the rest of the County care about the water and land rights of rural North County? You know the mask order defying, vaccine efficacy denying, Trump insurrection justifying, Second Amendment extremists?


You sound like Trump talking about Democrat cities. There are enough liberals up there for you to care about if that is your litmus test.


Man o Man are screwed! The ruin of north county financially is on its way, be ready. When “they” decide to inject water into the basin, you will see Millions upon Millions of our money spent on infrastructure projects that will have nothing to do with benefiting North County.

Jorge Estrada

They smell money, they like banks, they are smarter than you and will be glad to cut you a deal on what you already own thus pay taxes for. Remember the full cash value of the land you bought includes reasonable use of the water that lies beneath, per our State Constitution. If there is an exception on your title report which excludes this value to your property, well not yet, but beware this is the direction their efforts are headed. Your purchase of good land with ample water will be no more and the land value will go down but your taxes won’t unless you can prove a taking in court. Ha ha, cuz you ain’t got the dough for that lengthyyyyyyy legal court room battle. Yes the constituents are the head counts elsewhere in condo country who’s Supervisor is having decisive intercourse with the rural dwellers, never linking HER support to steal water elsewhere for the growth of another crap city. Let’s bank my water, give me a $%&#ing break, remember we bank money too as in for less than a percent and the bank lends your money for several percent. Banking your water will pay you nothing but you will pay others to get it back.


I smell Resnick


“When imported water is placed essentially on top of the natural supply,” legal rights to the basin’s water are altered.” This water basin storage ripoff should bridge the political divides in this County. Through establishing the right to store water in the North County aquifer, SWP (think SoCal development and West Side farming interests) will treat the North County as their water tank. Then they will be empowered to direct this storage capacity as they wish. For ProtectPaso, THIS is the call to action. For the enviros, if you can see the implications in this, drive along Mulholland and look at the San Fernando Valley.


We can blame it on the entrepreneur who brought us our first bottle of bottled water ….nobody ever pictured buying 100s or 1000s of plastic bottles of water each year in the mid 70s and prior…Actually it goes back to the earliest of times (BC)…The transcontinental railroad showed us the power and financial gains water could bring


San Luis Obispo neighbors please understand this is a shell game and our basin water is at risk. Do not be lulled into thinking it’s harmless. Thank you Debbie and John for your fierce commitment to our water.


The state and fed govt is so far off the rails, the incessant greed and ever increasing attempts to control everything and anything is mind boggling. I couldn’t agree more…do not be lulled into thinking its harmless. We desperately need to rekindle an interest in reading about & educating ourselves to find the truth behind their actions. Or we can just continue on with the status quo because its so much trouble and let them strip everything from our lives.


The largest aquifer west of the Mississippi is the Ogallala Aquifer. It stretches from South Dakota to Texas…..


I think article should read ‘West of the Rockies’ instead of West of the Mississippi.