By LOIS HENRY
Californian columnist
July 30, 2016
http://www.bakersfield.com/news/lois-henry-taxpayer-funded-water-deal-that-makes-me-go/article_79f6c1b9-92ed-5b4b-99f6-e2881c1ad25d.html

The Nickel water came to my attention again recently.

Tejon Ranchcorp released its draft environmental impact report for its proposed Grapevine community of 12,000 new houses at the base of the Grapevine.

If the development is approved, it will be Nickel water flowing through the taps and toilets of all those homes.

I like following the Nickel water partly because it’s fascinating to see how many development dreams it continues to fuel.

And also because the Nickel water was part of a deal that cost taxpayers $10 million back in 2000 and I like to see how that investment is working out for us.

First, the background.

The Nickel family owned land up in Kings County that actually got a slug of Kern River water every so often when the river ran high.

After the Isabella Dam was built, George Nickel made a claim that storing water in Isabella Lake would deprive him of that high flow water.

The issue was settled with the other river interests agreeing that Nickel had rights to high flow water — now known as the Lower River right — and he was allowed to rent storage in Isabella.

Fast forward to 2000.

The late Tom Clark, who used to work for Nickel, was general manager of the Kern County Water Agency.

The agency made a deal to buy Nickel’s Lower River right and storage in Isabella for $10 million plus the agency agreed to give Nickel 10,000 acre feet of water every year in perpetuity.

That $10 million was public bond money, by the way.

It was part of Proposition 13 passed in 2000 to support safe drinking water, water quality and water reliability.

The agency’s deal definitely created reliability for the Nickel family, which now has 10,000 acre feet a year, rain or shine, to sell up and down the state. And, boy has it (see sidebar).

As for taxpayers who funded the deal, I’m not so sure how we made out.

The Lower River right has only materialized three times in the last 16 years, yielding about 300,000 acre feet to the agency.

Now that is a load of water. But where’s it all gone?

The agency sold a big chunk, 118,666 acre feet, mostly to its member units, local agricultural water districts.

A little more than 90,000 acre feet have been put into the agency’s Pioneer groundwater bank.

And more than 58,000 acre feet have been used to made good on the agency’s 10,000-acre-foot-a-year obligation to the Nickel Family LLC.

Oh, and a little more than 12,300 acre feet have been sold to the Western Hills Water District to support a swanky golf resort/housing development in the bone dry foothills west of Interstate 5 up near Modesto. (Who on earth thought that was a good use of Kern River water? Sheesh!)

Excluding the water sent to the Nickels and Western Hills, about 230,000 acre feet stayed put and was used here in Kern County, which was Clark’s argument for the deal back in 2000.

If the agency hadn’t bought the Lower River right, Clark told me several times, that water would have barreled down the river channel, gone into the intertie and on to the California Aqueduct where downstream users could lay claim to it. (Yes, but no one ever got extra water. It would just mean less pumping from the Sacramento-San Joaquin delta.)

That’s because the Nickels only had so much storage in Isabella. Once that was full and assuming the family had nowhere else to park it, that water was on the loose.

Okaaaay.

Except, I would argue back with Clark, that meant anyone — including the agency, the Kern Water Bank, Rosedale Rio Bravo Water Storage District, or anyone else with recharge facilities and the ability to divert water off the river — could capture it and use it for free.

I didn’t see the wisdom in the deal but Clark never stopped trying to convince me. I do miss that guy.

Anyhow, remember that the Lower River right was paid for by all Californians via a bond. But it was used mainly by large farming interests, which have made large profits from that water.

And, I would point out, our aquifer didn’t benefit. We are critically overdrafted — meaning more water is being pumped out than put back in.

So, that $10 million Lower River water hasn’t increased the “reliability” of the aquifer, which affects all of us.

Besides all that, the environmental documents the agency used to approve the Lower River deal were based on the premise that some additional bond money obtained by the agency would be used to build wells that would restore the river through Bakersfield at least part-time.

That never happened.

In fact, for the past few years, the agency has pumped the heck out of those wells to meet drinking water demand, which makes zero sense to me if the agency truly is flush with Lower River water stored in its Pioneer groundwater bank.

Some people got rich off this deal, some people got water and some got both.

But I still don’t see what taxpayers got out of it.

Opinions expressed in this column are those of Lois Henry. Her column runs Wednesdays and Sundays. Comment at http://www.bakersfield.com, call her at 395-7373 or email lhenry@bakersfield.com.

LOIS HENRY ONLINE
Read archived columns by Lois Henry at Bakersfield.com/henry.

Related Info

Watering suburbia
The 10,000 acre feet of water provided to the Nickel Family LLC by the Kern County Water Agency has been sold in long-term contracts to various entities intent on using it for development.

Most of these developments haven’t broken ground or been fully built yet so much of this water has been stored in groundwater banks or sold on a one-time basis to farming operations.

Here’s who currently owns the Nickel water:

• 2005, Newhall Land and Farming Co. signed a long-term contract to buy 1,607 acre feet. It plans to use that water to help supply 22,000 homes in the Santa Clarita area.

• 2007, DMB Communities II Inc. signed a long-term contract to buy 8,393 acre feet. DMB had tried to use the water for a controversial development in the northern California community of Redwood. But that met with severe opposition.

• 2013, DMB assigned 1,700 acre feet of its Nickel water to CV Communities and 6,693 acre feet to Tejon Ranchcorp. Tejon plans to use 6,278 acre feet of that water for the proposed 12,000-home Grapevine development. No word on what it plans to do with the remaining 415 acre feet.

• 2016, CV Communities assigned its 1,700 acre feet to Antelope Valley‐East Kern Water Agency. CV Communities plans to use that water for a proposed 758-home development called Avanti North near Lancaster.

Cash cow
The Kern County Water Agency gets 10 percent of what the Nickel Family LLC earns off its water sales.

Here’s how much the agency has made over the years:

2001 – $460,000

2002 – $213,945

2003 – $175,278

2004 – $165,672

2005 – $ 78,805

2006 – $ 81,366

2007 – $376,011

2008 – $628,929

2009 – $539,114

2010 – $556,251

2011 – $573,908

2012 – $592,531

2013 – $611,293

2014 – $655,251

2015 – $675,176

2016 – $695,707