Phil Isenberg wants to end California’s water wars. The member of the Delta Stewardship Council and its past chair wants to connect the cost of water more closely to its users.

According to a report by the California Economic Summit, he points out that the cost of water is about $30 billion a year for the state. And it breaks down to 4 percent from federal spending, 12 percent from state spending and 84 percent from water users.

    Yearly Water Spending in California by Source (2008-2011) in $ billions

Result

The result, Isenberg said:

“Well for one thing, because this is directly contrary to popular perception and most of the recommendations of interest groups who come to Sacramento — or at least the ones who talk to us. … Most of the water decisions about what to build and who pays are made locally in California — and grumpy ratepayers pay the majority of the cost.”

He noted that only $1 billion of that $30 billion the state spends on water comes from bond funds. Yet California spent about $25 billion on five voter-approved statewide water bonds since 2000.

The state hasn’t derived a drop of water storage from these bonds to lessen the impacts of the current combined drought and man-made water shortage; 54 percent of that funding went for open-space acquisitions.  Another 14 percent went for restoring wetlands.  None went for water storage, as shown by the graph below, from p. 47 of the recent study, “Paying for Water in California,” by the Public Policy Institute of California.

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Because these were statewide bonds, there was no link required between the funding and any water services provided as there is in local water projects under Proposition 218.

Local taxes

The problem leads the PPIC study to the following analysis:

“The flip side of the cost challenge is shrinking revenue alternatives. A series of constitutional reforms adopted by the state’s voters, starting with the landmark Proposition 13 (1978) and followed by Proposition 218 (1996) and Proposition 26 (2010), have made it increasingly difficult for local water agencies to raise funds from local ratepayers, and they have also set up higher hurdles for new local and state taxes to support this sector.”

The PPIC report concluded the tax reforms approved by voters for the local level are “impeding efficient and equitable funding of California’s water system.

Isenberg concurred. “Some provisions like Prop 218 are just nutty, but they serve another goal of the public, which is to reduce costs for themselves,” he said. 

In the California Economic Summit summary, “He believes any changes to Prop. 218 will have to show they’ll provide something the public wants just as much: ‘A regular supply of cheap water.’”

The specific reforms sought by the PPIC include:

• Provides that reviewing courts must uphold a public agency’s determination of a need for a tax or rate hike over the objections of any citizen initiative or petition to the Public Utilities Commission or water board;
• Allows “service fees” that don’t service those paying the fee;
• Specially carves out water projects from the two-thirds vote requirement of Proposition 13 so that only a majority vote would be required. In other words, there would be no Proposition 13 for water projects.

The PPIC also wants to use “regulatory fees,” which are limited under Prop. 26 as a source of funding for water projects. This would provide an incentive for government agencies to declare benign environmental substances as toxic as a way to end-run voter review of taxes for water projects.

For example, PPIC proposes a regulatory fee on the agricultural and residential use of fertilizer, which they say contains nitrates that contaminate water. There have been a number of previous attempts to justify taxing fertilizer to fund water projects in California, including the non-existent “blue baby syndrome.”  This has compelled agricultural researchers to find ways to escape such taxes by genetically modifying crops to take nitrogen out of the air, as sugar cane does, rather than from the ground.

Tax wars

However, ending California’s water wars might only spark tax wars.

If Prop. 26 were gutted to remove the provision requiring a tax or regulatory fee to benefit those who are taxed, it might undo a recent water rate court decision.  Last month a Sacramento judge ruled, based on Prop. 26, that the water rates of the Metropolitan Water District of Southern California would overcharge the San Diego County Water Authority by $2 billion over 45 years. Without Prop. 26, the court may have had to rule differently.

Finally, any attempt to change Prop. 13 would be met with string resistance from anti-tax groups, such as the Howard Jarvis Taxpayers Association. Such groups contend that any weakening of Prop. 13 might lead to gutting the whole proposition, leading to much higher property taxes for homeowners.

By WAYNE LUSVARDI

Is the Delta Stewardship Council:

1. A bunch of environmentalists appointed by politicians to produce endless numbers of useless plans to restore the Sacred Delta Ecology;
2. A group of water agencies serving the thirsty cities of Southern California to pull off a water grab of Northern California water; or
3. A group of Delta landowners who are opposed to the use of eminent domain to take any of their land or water rights for water conveyance facilities for Los Angeles.

Correct answer: None of the above.

The Delta Stewardship Council is a state agency actually created by the California Legislature in 2009 as part of the Delta Reform Act: Senate Bill SB X7-1.  The council’s task is to devise a Delta Plan and Environmental Impact Report  to accomplish what are called the “co-equal goals” of the legislature:

1. Providing a more reliable water supply for California; and
2. Protecting, restoring and enhancing the Delta ecosystem.

The Draft EIR that is now being vetted in different points around the state emphatically clarifies that “restoring the Delta” does not mean returning the Sacramento Delta and Suisun Marsh to a pristine condition by pulling out all the water pumping plants.  According Keith Coolidge, a member of the Stewardship Council, shutting off all water pumps to farmers and Southern California cities wouldn’t restore the Delta anyway.  He was speaking Thursday at an official meeting of the council held at the Pasadena Public Library.

Coolidge said the council’s mission is, “Not to sacrifice the Sacramento economy for the ecology, but also not to sacrifice the ecology for water supplies.”

The purpose of the meeting was to accept formal comments to the Draft EIR for the Delta Plan, which should be finalized in late spring 2012.  Afterward, the council will finalize its Delta Plan, which will become enforceable law.

Diversification?

Emily Green runs a popular water blog, “Chance of Rain.” She asked, “If we’re going to be required to diversify water supplies, where is that diversification coming from?”

Here the council was evasive. Coolidge said there was not necessarily going to be a loss of water or a gain in water supplies.

But common sense dictates that, if there is equal footing between a) Delta eco-system restoration and b) supplying water for farms and cities, the farms and cities are going to have their water supplies cut, especially in dry years.  The members of the council were adept at side-stepping this hot-button issue because the California Legislature has put them on the hot seat.

The maximum total amount provided to cities and farms under the State Water Project is 4 million acre-feet of water per year. That is 4 million football fields of water one foot high; or enough for 8 million households.  Alternatively, it is enough irrigation water for 4 million acres of farmland.  But the actual amount varies each year depending on Sierra snowpack and precipitation.

Southern California is entitled to a maximum 1 million acre-feet of water per year from the State Water Project.

Pasadena resident David Powell is the former head of the State Department of Water Resources’ San Diego Office and head of engineering for the Alameda County Water District. He previously told me that Southern California would likely suffer a cut of half of its water supplies under the Delta Plan.

Phil Isenberg, the Delta Stewardship Council’s chairman, clarified that the Water Code specifies two broad goals for the diversification of water supplies: conservation and greater efficiency.  However, it does not spell out what type of conservation or water storage and conveyance facilities might eventually be built.

Isenberg emphasized that the council is an independent body that can formulate enforceable policies. But it does not have the power to levy taxes, fees and fines, or to authorize bonds.  Those activities will still be done by the Legislature in tandem with voter approval, where required.  Thus, voters will not be taxed without representation.

‘Covered Actions’

Nonetheless, there are still obscure parts to the Delta Plan.  It requires state or local agencies to clear any actions that directly affect the Delta with the Delta Stewardship Council under what is bureaucratically called a “covered action.”   Isenberg said that there were a lot of exclusions to what a “covered action” would pertain to.   Unfortunately, the term “covered action” will likely be the butt of jokes as it sounds like “covert action.”  What it really means is, “actions covered” by the Delta Plan.

I asked whether the Delta Plan, once enacted, would require revision of existing legislation on the books that conflicts with the new Delta Plan. No one on the council knew.

I asked, in particular, if SB 375 –- California’s “anti-sprawl” bill — requires that population growth be directed toward the urban coastline, which has sparse groundwater supplies.  And I asked: If demands on Delta water are going to be lessened, would that mean diverting population growth to inland areas where there are more abundant groundwater supplies to rely on in dry years?

Staff legal counsel Chris Stevens replied that SB 375 is not one of the exemptions to the Delta Plan or “covered actions.”  This might mean that all the hodge-podge of existing laws on the books that conflict with the Delta Plan might remain in place.

However, determining which environmental policy takes priority over the other is a job for the Legislature, not the Delta Council.

Values, Not Science

Unfortunately, the Delta Council has been given only vague directions by the Legislature as to how much freshwater, saltwater and brackish water habitat is desirable public policy for the Delta.  As environmental scientist William Cooper has said, ecosystems such as the Delta can be operated as a freshwater habitat for salmon and sport fishing; a saltwater habitat for catfish and commercial fishing; a brackish water habitat for minnow such as the infamous Delta Smelt; or a mix of the above.  The choice of the mix of these water habitats is not an issue that can be determined solely by science.  They are cultural values; albeit there are some limits as to how much of each type of ecology can be engineered.

Unfortunately, the Legislature is still covering its actions with scientific justifications for what are unavoidable cultural and political value judgments.  It is asking too much of scientists and too much of the Delta Stewardship Council.

It might behoove the Legislature to consider adding a water sociologist to help in developing what cultural values are important.  Then Delta scientists can determine what is feasible and develop a before-and-after plan.

Isenberg also clarified that the proposed $11.1 billion Water Bond for the November 2012 ballot will not halt the adoption or enforcement of the Delta Plan or EIR.  He said only some projects would be affected if funding were not provided.

Bureaucratic Restoration

The Delta Stewardship Council is not only tasked with repairing the Delta, but repairing its image around the state.  To do this, it is holding meetings at various locations to take official comments to its Draft Plan EIR, even though it’s not required to do so.

The next meetings are:

Central California
Tuesday, January 17, 2012, 6 p.m.
Ceres Community Center, Large Assembly Room
2701 4th Street, Ceres, CA 95307

Delta
Wednesday, January 18, 2012, 6 p.m.
Clarksburg Middle School Auditorium
52870 Netherlands Road, Clarksburg, CA 95612

Northern California
Thursday, January 19, 2012, 6 p.m.
Willows City Council Chambers
201 North Lassen Street | Willows, CA 95988

Clarification

But the council might improve its public image if it clarified that it is the “California State Legislature’s Delta Stewardship Council,” not some presumed association of environmentalists, water agencies, farmers, Delta landowners and recreational fishing advocates.  And that unfortunate bureaucratic term “covered actions” might have to be reconsidered.

If the Delta Council is going to be perceived as more than some secret society that shrouds its decisions in scientific language, the Legislature is going to have to do a better job of clarifying what it wants the Delta to look like before and after its proposed plan. In postmodern California, “science says” has become the equivalent of, “God willed it.”

The Delta Stewardship Council is working hard at restoring its public image and eventually re-engineering the Delta.  But it’s going to need more clarification from the Legislature than the vague project alternatives detailing how much water should or should not be exported out of the Delta. It needs a vision and a map of what it wants the Delta to look like.

For the past couple years we have watched our home town struggle to keep the Sacramento Kings basketball team in Sacramento. We have also observed the proposed attempt to build a new $400 million stadium for the team in downtown Sacramento at the old Southern Pacific railroad yards.

We have also followed all the headlines and rumors about how the Kings are “moving to Anaheim.” The NBA and Mayor Kevin Johnson are “trying to keep the Kings in town.” Senate President Pro Tem Darryl Steinberg, D-Sacramento, introduces legislation to keep the Kings in his home town. And developers Ron Burkle and Darius Anderson “pledge to buy the team and keep it in Sacramento.”

It all has a similar ring to when one of us, Patrick Melarkey, was on the Sacramento County Board of Supervisors in the 1970s and the stadium activity began. Back then it was going to be a privately financed baseball stadium put together by a couple of local boys. It was not for a basketball arena.

“It was 1974 when a call came into my office,” Melarkey remembered. “I was president of the Board of Supervisors and two local lads wanted to build a privately-financed baseball stadium. The taxpaying public wouldn’t have to shell out a nickel for it. The two young men, Gregg Lukenbill and Frank McCormack, were both Catholic boys who had met at Sacred Heart Elementary School and they wanted to meet with me because I had been pushing for a new baseball stadium that would cost $1 million. The idea I had for the stadium design was based on the new minor league baseball stadium in Albuquerque, New Mexico. I had made a trip out there, visited the stadium and began thinking about a stadium like it in Sacramento. I thought the new state fair ground at Cal Expo might be appropriate.”

It was in the early stages of this plan when Lukenbill and McCormack came in to see Melarkey. Lukenbill was in his early twenties, McCormack a bit older. They were both dressed in leisure suits, then the current fashion trend, and were eager to outline their stadium dream plan.

“We want to build a state-of-the-art baseball stadium for Sacramento and it won’t cost the public a nickel,” said Lukenbill, by far the more vocal of the duo. “It’s gonna be all privately financed and we’re putting together a team to raise the money. We’re wondering if you might be able to help.”

Melarkey told them he’d do what he could for them and asked them where they wanted to build such a stadium. They had a few ideas, but nothing set in stone. Melarkey waited to see how it would play out.

Baseball in Play

Over the next few years, throughout the rest of Melarkey’s second and final term as a supervisor, he met and consulted with Lukenbill and McCormack a number of times. The baseball stadium idea was still in play. But Lukenbill was interested in any professional sports franchise that would put Sacramento on the map. Gregg said Sacramento was “a world-class city” and deserved such an urban amenity as a professional sports franchise. How the one attribute has anything to do with the other was a mystery.

During these years Lukenbill and McCormack began building their executive and financing team to get a professional sports team. First they hired Greg “Dutch” Van Dusen, the former general manager of the Sacramento Solons baseball team. The Solons were a Pacific Coast League franchise which had broken all attendance records in 1976 playing their home games at Sacramento City College’s Hughes Stadium. “Dutch” came on board the Lukenbill-McCormack vessel in 1978. Then Lukenbill secured the backing of the wealthy Benevenuti family, developers Joe and his son, Richard. Another addition was Frank Cook, a local realtor. The Benvenutis had a large parcel of land in the North Natomas area of Sacramento. Perhaps they could build a stadium there.

The problem was that North Natomas was a political hot potato. Although it had been master-planned as one site for Sacramento expansion in the early 1960s, by the 1970s the local environmental movement wanted to see it preserved. The local No Growth movement had a significant ally in Mayor Phil Isenberg, who was opposed to the development. No way would there be a traffic-generating stadium out in North Natomas, Isenberg vowed.

Now it looked as if there was no way it would even be a baseball stadium. There weren’t any major-league baseball franchises available at that time. But a basketball team could be found. It was the old Rochester Royals franchise, a team that began in the 1920s and won the 1951 NBA championship before it moved to Cincinnati in 1957. Then it moved to Kansas City in 1972, where it was renamed the Kings. This team was now in play and Lukenbill wanted to buy it.

Melarkey was retired from the board when Lukenbill bought the Kansas City Kings franchise in 1983. Lukenbill first vowed to keep the Kings in Kansas City, but only the foolhardy believed it. Lukenbill now had a franchise that could justify the need for a new stadium, and North Natomas was the chosen site.

Melarkey remembers going out there once with Lukenbill and the Benvenutis, standing on the I-880 freeway overpass about a half mile away from the present home of the Kings. Richard Benvenuti pointed from south to north, then west to east, and said, “All this land below us will all be developed as business and office parks if we can get the rezoning through the city council to allow it.” Melarkey thought Lukenbill and the Benvenutis had a king-sized battle on their hands if they intended to take on Phil Isenberg. “The best thing you can do if you intend to try this is to hire Maurice Read,” the Sacramento Public relations wizard, Melarkey told them. “Read and Isenberg are good friends and if anybody can move this stadium forward, it’s Maurice Read.”

Baseball and Development

Then Melarkey stopped following the stadium action. Lukenbill did achieve his plan to build a new basketball arena in North Natomas after a development plan was reached between the developers and the local environmental community in 1987.

Over the next years, Gregg Lukenbill and the Sacramento Kings had a chaotic tenure in Sacramento. The team moved to a different stadium in 1986. Lukenbill sold his part of the franchise in 1992. Frank McCormack, his original partner, was never paid by Lukenbill for his 3 percent share of the franchise. Dutch Van Dusen and Maurice Read moved on. The Benvenutis still had their share of the franchise and the value of property they owned in North Natomas shot through the roof.

The Kings may be in danger of leaving Sacramento, but they have left a lasting mark with the fortune they made for some of their benefactors, such has the Benvenutis.

One beneficiary was Leonard Padilla, the celebrated black-hat bounty hunter most recently seen during the Casey Anthony murder trial. Upon advice from the Benvenutis, in 1979 Padilla bought a 60-acre parcel in North Natomas for $240,000. He received an offer of more than $12,000,000 for the land in 2005, according to a Feb. 25, 2005 story by Sacramento News & Review reporter Cosmo Garvin. Using the same formula provided in the article on Padilla, between 1980-2005, the value for the 4,000-acre North Natomas property held by the Benvenutis increased from $3 million to $400 million.

Two years ago there was an article in the Sacramento Bee about a proposed land swap that involved building a new arena for the Kings at Cal Expo. It seemed that the wheel had come around to where it began.

But the differences were huge. This was no privately-financed stadium; this was a $400 million monster that the city of Sacramento was supposed to finance for the owners. This new plan was called the Convergence Plan and it called for a huge land swap. Cal Expo would be “given” to local developers. The second part of this trifecta called for moving the fair to the site of the present Kings Arena. The final piece in the deal would be a new publicly financed basketball arena in downtown Sacramento adjacent to the old Southern Pacific railway station.

The deal seemed screwy. It was actually proposed by NBA Commissioner David Stern and backed by Sacramento Mayor Kevin Johnson, a former NBA star with the Cleveland Cavaliers and Phoenix Suns.

The questions that came to mind were these: Why should Cal Expo be opened up to developers such as the Lennar Corporation, which would likely make a fortune, while the state fair left town and took with it the revenue that comes annually to Sacramento? Was the Kings basketball arena site too small to accommodate the state fair? And how about the cost of the new stadium, estimated at $400 million. Would local taxpayers approve such an expenditure given the state of the fragile economy? Not likely, and in fact they voted down a proposed 0.25 percent sales tax in 2006.

The Anaheim Royals?

In the interim, a decade ago the Maloof family acquired the Kings. When the Convergence Plan went kerflooey, the Maloofs began looking for greener pastures. They thought they found them in Anaheim. The Maloofs went to Anaheim to showcase their wares. The City of Anaheim was interested and the talks began. They would rename the Kings the Royals and the franchise would have a new home.

But moving the Kings to Anaheim would cost a lot of money. The Maloof family would have to pay off the $67 million they owe the City of Sacramento, plus a $9 million early repayment fee. And according to Wikipedia, “In June of 2011, the Maloof brothers, Joe and Gavin, Sold majority share of the Palms to a lending company, Leonard Green & Partners LP in Los Angeles and TPG Capital in Texas, allowing them to continue building their stadium.” Professional sports leagues frown on owners being associated even with legalized gambling.

David Taylor, the local developer flavor-of-the-month in Sacramento, was deputized by the Sacramento City Council to study the feasibility of a new arena in the city. Taylor hasn’t yet met with the Maloofs. Taylor also is waiting for market studies the Kings have promised him.

Sacramento Mayor Kevin Johnson said of all the basketball maneuvering, “As a city, we can only control what we can control. If [the Maloofs] decide they don’t want to be in Sacramento, that is a choice they have to make.”

And on it goes, up to the present, with the future of professional basketball in Sacramento uncertain. Will Kevin Johnson and his new allies, billionaire developers Ron Burkle and Darius Anderson, deliver on their promise to keep the Kings in Sacramento? Or will they buy an existing NBA franchise, such as the financially troubled New Orleans Hornets, and bring it here? Maybe they will, but Burkle and Anderson still want a new publicly financed downtown arena if they do that. And while basketball franchises may be the stalking horse, in Sacramento the name of the game is still the same: the insider developers who benefit from voter-approved public projects, whether their names are Benvenuti, Burkle or Angelo Tsakopolous, the local developer of record for the Southern Pacific site.

It was like déjà vu all the way back to the Gregg Lukenbill-Frank McCormack plan for a privately financed baseball stadium. That was the original Field of Dreams, and the only one that still makes sense for Sacramento.