Sacramento Bee
July 1, 2014

Six weeks after ordering thousands of California water users to stop diverting from rivers and streams amid the worst drought in a generation, state officials say only 31 percent have bothered to respond by sending back the required forms. Now, their efforts to force the rest to comply are prompting threats of lawsuits and economic chaos.

On Tuesday, the State Water Resources Control Board held a daylong public hearing in Sacramento on whether to adopt streamlined regulations to cope with the drought. The proposal would allow the board to more rapidly punish water-rights holders who do not respond to a curtailment order. It would sidestep some procedural measures that the board said are “cumbersome,” and create a new penalty of $500 per day for failing to comply.

The hearing, held in a packed meeting room at California Environmental Protection Agency headquarters, stretched for hours as agency officials and attorneys went to the podium to protest the proposal – a response that in many ways underscores the drought’s severity. At Tuesday’s meeting, staff members told the board that water demand during July in the Sacramento and San Joaquin River watershed is projected to be five times greater than available supplies.

Foreseeing this shortage, the board on May 16 began issuing so-called curtailment notices to nearly 10,000 water-rights holders statewide, including individuals, irrigation districts and cities. More are expected in the weeks ahead. Such broad curtailments have not occurred since the drought of 1976-77, the worst in state history.

The notices went to those who hold so-called “junior” water rights, ordering them to halt their diversions immediately, and within seven days, to submit a form acknowledging the notice and describing their diversion situation. Only 31 percent of recipients statewide have submitted the form, leaving the state with a large information gap and a huge enforcement task to ensure those diversions have, in fact, been halted.

Junior water rights are those issued after 1914, the year when California adopted a comprehensive system to regulate water diversions across the state. State law requires junior rights to be diverted during times of shortage so that “senior” diversions – those that existed prior to 1914 – have access to any water that might be available. These senior rights also are held by individuals, farmers and cities, with the simple distinction that they were granted earlier in the state’s history.

State officials acknowledged that they don’t have sufficient powers to enforce compliance with curtailments in a timely manner. As it stands now, it is cheaper to ignore a curtailment order than to stop diverting water and suffer the economic consequences, said Diane Riddle, environmental program manager for the water board.

“We expect there will be a high degree of noncompliance during the drought that will impact senior water-right holders,” Riddle said. “Due to the limited penalties and the lengthy process to impose any remedy, we don’t believe the existing process provides an adequate deterrent.”

As regulations stand now, the board cannot order a diverter to comply with a curtailment order without first holding a time-consuming hearing. Fines as much as $1,000 per day and $2,500 per acre-foot of illegally diverted water could be imposed at a hearing as well.

The proposed new regulation would allow the board to enforce a curtailment order immediately, without holding a hearing first. The new rule calls for a lower fine of $500 per day, but a hearing would still be required to impose the fine.

“It’s these lower penalties that could be imposed more quickly that are intended to incentivize people that this is serious,” said David Rose, an attorney for the board. “It’s that enforcement that really turns this into a different situation that’s not available right now.”

The board was empowered to adopt these streamlined measures by emergency drought legislation signed in March by Gov. Jerry Brown. But at Tuesday’s hearing, dozens of water users and their attorneys took their turn at the podium to express outrage and opposition. Many argued that the proposal infringes on due-process rights by eliminating key procedural steps to defend their water rights. Some said it would compromise what they consider to be a property right embodied in their water diversions.

“Due process doesn’t mean you shoot the person and then give them a trial,” said Robert Mehlhaff, secretary and general counsel at Naglee Burke Irrigation District, which serves a farming region near Tracy. “That, unfortunately, is what curtailment at the very beginning of the process does. It has a real effect on the landowners in our particular district. We’re going to have substantial crop losses and potential permanent diminution in the value of our lands.”

Some of the speakers became emotional, warning the board its proposal threatened their livelihood.

Dino Del Carlo, a farmer on Roberts Island in the Sacramento-San Joaquin Delta, said he has not been able to sleep at night because he is so worried about getting enough water to finish growing crops that are worth as much as $5 million.

“My life has been a terror for the past month,” Del Carlo said. “If I’m not allowed to finish growing those crops, I’m basically going to go bankrupt after four generations in business, and that’s not OK.”

Many irrigation districts and diverters said the state must prove their water right is, in fact, junior to others before ordering a curtailment. This is normally done in a formal quasi-judicial hearing held by the board, a process that can take years. It takes so long because the exact size and conditions of a particular water right are rooted deep in history and frequently unknown. They asked that the proposal be revised to include, among other changes, a guaranteed hearing process.

“Those good intentions don’t mean anything unless they show up in your regulation because, with all due respect, there’s no trust there,” said Jeanne Zolezzi, an attorney who represents a number of water agencies in the San Joaquin Valley.

The board also heard from several environmental groups, on hand to say they support the regulations. Michael Warburton, executive director of the Public Trust Alliance, said the time is right for the board to adopt stricter enforcement options to protect water supplies that are, in reality, a public resource and not a form of private property.

At minimum, he said, the regulation would generate important information by forcing water diverters to respond to a curtailment notice. Without basic information, he said, it will be impossible for the state to manage the drought.

“The thing is, there are more rights than there is water, and it is reasonable that curtailments are going to have to be done,” he said. “I think the board is taking a very reasonable approach to moving forward.”

The board members, who are appointed by the governor, discussed the proposal extensively, but decided after seven hours of debate that they needed more time. The meeting is scheduled to continue Wednesday.

“We’re trying to reconcile the due-process requirements with an unfolding emergency in our state,” said board member Steven Moore.