Soaking Uncle Sam
Reports & Consumer Guides
Soaking Uncle Sam
Courtesy of U.S. taxpayers, a few hundred farms in Fresno and Kings counties annually get enough water to supply every household in Los Angeles, at pennies on the dollar of the price paid by urban water users. Now they're about to gain control of still more — even though they will need less in the future.
The farms are in the Westlands Water District, which is about to sign a contract with the U.S. Bureau of Reclamation that will set the price and amount of water the district gets from the Central Valley Project (CVP) for the next 25 years, with virtually automatic renewal for another 25 years.  If Westlands gets its way, it will control more water than the households of Los Angeles, San Francisco, San Diego, Riverside and San Bernardino combined use in a year.
Under the current contract, a computer investigation by Environmental Working Group (EWG) calculated the value of Westlands' federal water subsidy at $110 million a year in 2002.  The new contract will result in an increase in the price Westlands will pay for each acre-foot of water, but the vast amount of new water the district stands to receive will boost the value of the subsidy by tens of millions of dollars a year. Meanwhile, a third or more of the district's land is in such poor condition that to continue farming it, taxpayers will also have to pay for a drainage system the government says will cost at least $589 million to build and $11 million per year to run.  At the current value of the annual water subsidy, plus millions each year in federal crop subsidies, taxpayer-financed benefits to Westlands will total billions of dollars over the life of the contract.
EWG's analysis shows that the proposed new contract is a bad deal for taxpayers; for urban water users; for statewide water planners; for low-income Valley communities that lack adequate supplies of clean, affordable drinking water; and for fish and wildlife in the San Francisco Bay-Delta and rivers that Westlands' water comes from. It is, however, a very good deal for Westlands, cementing its position for decades to come as the dominant force in California water politics.
Over the life of the contract, its terms will affect the supply and cost of water throughout California. The public comment period for the proposed contract ends Sept. 15, but there's been little critical scrutiny of a deal that would lock up a huge amount of California's most precious resource for 50 years:
- Nowhere in the contract does it say what price Westlands will pay for CVP water in 2006 and beyond. Instead, the Bureau of Reclamation says it will adjust the rate — up or down — from year to year. This year, Westlands' base rate is $31.63 per acre-foot, less than one-fifth the water's market value. †1 With future prices a mystery, the contract cannot guarantee that Westlands will, as required by law, pay off by 2030 the $386 million it owes the government as its share of the cost of building the CVP, the largest federal irrigation system in the nation.
- The contract promises Westlands 1.15 million acre-feet of water a year, with the fine print adding another 38,490 acre-feet a year that may come from other irrigation districts through a scheme that seems designed to circumvent restrictions on water transfers. (An acre-foot is the amount of water needed to cover one acre one foot deep. The average California household uses half of an acre-foot per year.)
- Compared to the average of 755,635 acre-feet a year Westlands received from 1990 to 2003, the amount promised in the contract is an increase of more than 50 percent. Yet, in violation of federal law, none of the additional water was considered in studies of the new contract's environmental impact.
- Westlands is promised more water even though it's receiving a $107 million buyout from taxpayers in exchange for removing from cultivation 34,000 acres with severe drainage problems. To solve the drainage problem, the Bureau of Reclamation is considering taking out of production up to 298,000 acres — about half of the district — but the contract implies that Westlands would get to keep its full current water allotment no matter how much more land is retired.
Careful examination of Westlands' new contract is critical given what's at stake. In terms of both size and water use, Westlands is by far the largest of the roughly 100 CVP water districts. Almost all are signing new contracts this year, but because Westlands gets about one-fourth of all the irrigation water delivered by the CVP — more than five times as much as the next largest district — its contract will affect the supply and price of water throughout the state for the next half-century.  With the district's water subsidy conservatively estimated at $110 million a year, taxpayers have a right to know what they're getting for their money.
†1 Based on state and federal studies of the cost of irrigation water from a proposed new dam on the San Joaquin River, which is projected to be at least $170.42 per acre-foot. This cost estimate is highly conservative since it excludes the costs for road construction, relocations of existing facilities, environmental mitigation, land acquisition, reservoir cleaning, and interest during and after construction.