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California Mutual Water Company Training Set for May 2018

Since 2012, I have had the privilege of providing training to more than 350 directors of California mutual water companies to satisfy the legal requirements of Assembly Bill 54 (2011). Given continued interest in the training, I will offer the course again on Tuesday, May 15, 2018 at 6:00 pm PDT. Because mutual water companies are spread across the state, making travel to a central location impracticable, the training will be conducted by webinar.

The training will be similar to previous years, updated for new developments through 2017. As in past years, the training is free to all directors of a mutual water company. Since there is no charge, I hope some directors will attend who have had the required training but could benefit from a refreshed memory and updates.

If you are interested in attending the training or learning more, please call Pat Starkie at (512) 236-2231 or email her at pstarkie@jw.com. I can also answer questions below. I look forward to meeting you.

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Federal Reserved Groundwater and California

On November 27, 2017, the United States Supreme Court denied certiorari regarding the Ninth Circuit’s decision in Agua Caliente Band of Cahuilla Indians v. Coachella Valley Water District, 849 F.3d 1262 (March 7, 2017). Thus, the Supreme Court left in place the appellate decision, which was the first to hold that an Indian tribe may claim reserved rights in groundwater resources.

The United States formed the Agua Caliente Reservation through executive orders in 1876 and 1877, with the purpose of providing a sustainable home in the Coachella Valley for the Agua Caliente Band of Cahuilla Indians. Surface water in the area is limited to relatively small quantities in the Whitewater River System, so that the vast majority of local water supplies are derived from groundwater. Production and use of groundwater by local cities and agriculture have resulted in cumulative overdraft of the Coachella Valley Basin by approximately 5.5 million acre-feet since the 1980s. Historically, the Agua Caliente Tribe has not produced groundwater directly from the Basin, but has purchased water (including groundwater, surface water and imported water supplies) from the Coachella Valley Water District (CVWD) to meet its needs.

In 2013, the Tribe filed an action for declaratory and injunctive relief against the two largest producers of groundwater from the Basin, CVWD and Desert Water Agency (DWA). The parties and court divided the litigation into three phases, the first of which concerned whether the Tribe holds reserved groundwater rights and resulted in the decisions of the Ninth Circuit and Supreme Court.

As recognized in a long line of cases, when the United States reserves lands from the public domain for specific purposes, that reservation impliedly includes water resources that are necessary to accomplish its purposes. See United States v. New Mexico, 438 U.S. 696, 701 (1978); Cappaert v. United States, 426 U.S. 128, 138 (1976); Arizona v. California, 373 U.S. 546, 600 (1963); Winters v. United States, 207 U.S. 564, 575-78 (1908). The reservation of land and water rights for federal purposes may be for Indian, military, forestry or other purposes. Importantly for the development of water resources in the western states, reserved rights vest on the date of the reservation and are superior to the rights of subsequent appropriators under state law.

Although the doctrine of federal reserved water rights has been established for over 100 years, no federal appellate court had ever directly considered whether the United States could reserve rights in groundwater as well as surface water. The Ninth Circuit held that there is no meaningful distinction between the two sources of water when considering the achievement of federal purposes, and so extended the possibility of reserved rights to groundwater. CVWD and DWA argued that it was unnecessary for the court to recognize federal reserved rights for the Tribe in the Basin, because California law would provide correlative, overlying groundwater rights for the Tribe. The Ninth Circuit disagreed, noting that reserved rights are a creature of federal law and thus preempt conflicting state laws.

With the denial of review by the Supreme Court, the decision of the Ninth Circuit effectively ends the question of whether federal reserved rights may extend to groundwater resources in the affirmative. While it is possible that another appellate circuit could disagree and force resolution by the Supreme Court, that appears unlikely. Thus, the decision represents a significant victory for Indian and other federal reservations across the United States.

Within California, the decision means that CVWD and DWA may have less groundwater to allocate between themselves and other users in the Coachella Valley Basin. As those agencies seek to comply with the Sustainable Groundwater Management Act of 2014, they will need to decrease their use of groundwater from the Basin, increase recharge with imported supplies or both. While the Tribe’s reserved rights will be quantified in a future phase of the litigation, the decision of the Ninth Circuit can be expected to result in greater need for imported water supplies by CVWD and DWA. That will increase demands for water from the state’s water conveyance infrastructures, including those which transport water from the Colorado and Sacramento Rivers. Thus, it was not surprising that CVWD approved its participation in the California WaterFix by a board action on October 10, 2017.

Given the interconnected nature of California’s water system, pressures in one Basin often create ripple effects across the state. Those effects can be negative, in that deficits in one area can lead to higher prices in other areas or, if prices are not allowed to operate effectively, shortages. Those effects can also be positive, in that the state can resolve local water deficits on a statewide level, especially during wetter years.

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H2O4 Texas and Jackson Walker LLP

My firm Jackson Walker LLP was a member of the H2O4 Texas Coalition that helped support implementation of the Texas State Water Plan through creation of SWIFT. Administered by the Texas Water Development Board, that fund provides low-interest loans to local and regional governments for the development of water resources and infrastructure. H2O4 Texas made a series of videos about their efforts and were kind enough to mention our involvement.

 

 

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Temperance Flat Reservoir Update

Supporters of Temperance Flat Reservoir have published a new video promoting this water storage project on the San Joaquin River. In August 2017, the San Joaquin Valley Water Infrastructure Authority filed an application with the California Department of Water Resources (DWR) for $1.3 billion in funding from Proposition 1. DWR is expected to issue a decision in the second quarter of 2018 regarding which water storage projects will receive funding. In the meantime, the video offers a summary of, and advocacy for, the project.

Note: The author of this blog has no opinion on Temperance Flat Reservoir.

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Bad Behavior at California Water Districts

The California courts have released two opinions regarding cases of bad behavior at California water districts. They illustrate two problems that can occur in district governance.

First, the Court of Appeal for the Sixth Appellate District released an opinion in People v. Collins, denying an appeal by Steve Collins related to his felony conviction for conflicts of interest while serving as a director on the Monterey County Water Resources Agency. The trial court denied a motion to reduce his conviction from a felony to a misdemeanor, based on his failure to pay restitution to a client in a separate charge of theft by fraud. The appellate court upheld the decision by the trial court, holding that payment of restitution was a valid consideration. This likely concludes the latest legal proceedings against Mr. Collins, who was working as a paid consultant on a proposed seawater desalination project, while at the same time holding public office with the agency responsible for the project. It was a clear conflict of interest, and was one of the more egregious examples of bad behavior by public officials in recent years.

Second, the US District Court for the Eastern District of California released an order dismissing the case of Harrell v. Hornbrook Community Services District. The court held that Mr. Harrell, a former general manager of Hornbrook Community Services District who had filed numerous pro se complaints against the district over a period of three years, was abusing the court process through “purposeful overloading of the court with pleadings which take up more than warranted judicial attention, but which simultaneously demonstrate a desire to wage a war of attrition on the opposing parties.” The court dismissed the case with prejudice under Rules 12(b)(6) and 41(b), concluding that Mr. Harrell had shown no interest in having the court reach the merits of his complaints, but only sought to harass the district through the imposition of burdensome defense costs.

The cases represent two of many challenges for governance of local water districts. In the case of Mr. Collins, he was serving as a director on the governing board of an agency, while earning money as a consultant with projects being considered by that same board. His was a crime of an individual public official. In the case of Mr. Harrell, he was an ex-employee of a water district who engaged in a protracted legal battle for the purpose of harassment. Districts often face a small number of critics that attack the district on a regular basis for every action they take. Those critics require a large expenditure of management time and sometimes money, and can prevent a district from moving forward on its essential mission of providing clean, safe and reliable water supplies in an expeditious and efficient manner.

Luckily, these examples of bad behavior are not the norm. Most officials and district residents are sincerely motivated to serve the public interest, and most disputes concern the proper setting of goals and strategies.