Water insecurity an economic hurdle that won't be cheap to fix

By Alex MacLean, The Union Democrat June 17, 2014 03:38 pm

This is part III of our III part series on Tuolumne County's water woes. 

In the past decade, California’s population exploded by 10 percent, and yet Tuolumne County’s has been mostly flat.

Tuolumne grew just 1.6 percent between the U.S. censuses in 2000 and 2010, making it among the five slowest growing counties in the state. And by many estimates, the county has actually shrunk 3 percent since then, to the most recent estimate of 54,000 people.

The anemic growth could be the result of well-reported depopulation of rural areas, or a lack of physical space to grow in a county where just 20 percent of the land is in private hands. But many people also blame the lack of a key resource: water.

As documented in Parts 1 and 2 of this series, most of Tuolumne County’s populated and economically active areas — Sonora, Jamestown, Twain Harte and Columbia — rely on the Tuolumne Utilities District for water. But TUD is a young organization, formed in 1992, and, in many ways, is ill-equipped to do its job. Consider:

• It relies almost exclusively on a single small watershed, the South Fork Stanislaus River, for almost all the water it supplies customers.

• It has no water rights of its own, instead relying on a contract with Pacific Gas and Electric Co. to supply water annually from the South Fork that the utility owns.

• It lacks storage. Almost all the water available to TUD is stored in two reservoirs, Pinecrest and Lyons, and both are owned and operated by PG&E. The dams provide enough water to meet TUD customer needs in an average year, but lack enough space to accommodate growth.

TUD has two other reservoirs — Matelot and Phoenix Lake — but they hold just enough water for about 1,200 households in Sonora and Columbia.

“This drought has finally got us in a bind where it’s blatant — our economy is going to go down the toilet,” said Ron Ringen, a businessman and former TUD board member who continues tracking county water policies.

“Without water, we are nothing,” he said. “We can’t attract businesses. No one is going to buy here if you’re going to be on 50 percent rationing every year.”

What’s at stake?

Many experts say a lack of water security going forward could affect every aspect of the county’s economy — from agriculture and manufacturing, to development and tourism.

At least a few development projects have already fizzled following questions about whether TUD could promise water service.

In March 2013, a proposal to build 80 apartments in Columbia met stiff resistance from the public because of questions about — among many other things — TUD’s ability to provide water to the apartments’ dwellers. Project developers backed away after opponents filed a lawsuit seeking a full environmental impact study of the project.

Another project, the Yosemite Gardens in Jamestown — a proposed 100-acre entertainment, recreation and hospitality plaza, with a botanical garden and multiple sports fields — failed to get off the ground last year when TUD questioned whether it could supply all the water required.

“Anytime someone’s trying to put together a development project, you have to ... show how you’ll provide services to those lots,” said Tuolumne County Board of Supervisors member Evan Royce, who is also a building contractor. “It’s going to be even more difficult to show that now.”

Another industry that stands to lose is tourism, which brings in an estimated $192 million in revenue to the county each year. 

Industry experts say county businesses that depend on visitors, particularly during the summer months, stand to lose from the lack of a reliable water supply moving forward.

“If we have the word of mouth that Tuolumne County is so dry and water levels are so low, people have other choices of places to go while on vacation,” said Nanci Sikes, executive director of the Tuolumne County Visitors Bureau.

This drought has underscored the point. Businesses in Twain Harte are having to cut services and spend thousands on new appliances in order to comply with mandatory water-use restrictions implemented this year by the Twain Harte Community Services District, which buys water from TUD.

THCSD this year passed along 50 percent water cuts imposed by TUD to its customers, forcing business owners like China House restaurant owner Larry Nieh to cut out the popular Saturday buffet to save water used for dishwashing.

He said he’s worried the lack of a reliable water supply, even after the drought passes, will hurt businesses and future property values.

“I really worry about it affecting the overall economy in this county,” he said. “If I were going to buy a house here, I would really think twice knowing that we don’t have a water right. I would be worried about that as a property owner.”

Agriculture, the county’s No. 2 industry behind tourism, is also facing a rough year due to the lack of certainty over water availability. Cattle ranchers and farmers who depend on TUD’s water supply have also been cut back 50 percent in irrigation water this summer as a result of mandatory measures imposed by the district’s board.

Sasha Farkas, field manager at Indigeny Reserve, which operates apple orchards in the Apple Valley and Cedar Ridge areas, said the industry won’t be able to survive under such uncertain conditions in the future.

“Something has to change, otherwise our county will have no future,” said Farkas, a  Tuolumne County Farm Bureau board member. “Agriculture will be gone. Whatever agricultural industries stay will all be on wells because there won’t be surface water available, and that could possibly have an effect on homeowners with wells.”

Possible solutions

Board of Supervisors member Karl Rodefer, who chairs the county’s recently reconstituted Water Policy Advisory Committee, has been thinking a lot about the county’ water issues.

Like others, he figures the county’s key water-supply problem is that it depends on a single-source of water, lacks rights to that water and is also dependent on a mish mash of old, failing water systems that were acquired and cobbled together during the 1980s.

“It’s a convoluted system and we have to deal with it,” Rodefer said. “Every crisis is an opportunity, and we need to see what kind of progress we can make while still managing the resources effectively.”

But perhaps the greatest problem is storage, or the lack of it, both now and for potential future needs.

Several ideas for addressing the storage issue have been floated — most involving increasing the size of existing reservoirs. 

A proposal that’s gained momentum within the community in recent months is the idea of replacing Lyons Dam with a larger dam. The idea actually dates to the 1960s, but was scrapped each time because of its expensive price tag.

That estimate, and the project’s scope, climbed as time passed.

By 2002, the estimated cost was $56 million to expand the storage from 5,500 acre-feet to 25,000 acre-feet. Upping the scope of the project to add 50,000 acre-feet would’ve cost $72 million.

Despite the considerable cost, the benefits of the project are hard to ignore, according to Rodefer and many county leaders, including members of TUD’s Board of Directors. 

Mike Sarno, a TUD director, said the Lyons proposal is the county’s “best bet” for solving its future water supply problems.

John Mills, of Columbia, widely regarded as a top state water expert, however, said it would be a long and expensive process — one that’s not guaranteed to provide the most desirable outcome for the county.

He noted the last major onstream dam built in California was New Melones in 1978, which came more than three decades after the project was first authorized in 1944. Furthermore, environmental protests pushed the actual filling of the reservoir back another five years to 1983.

Money and environmental concerns aside, Mills said the county lacks one important ingredient: It would likely need to obtain a so-called “water right” in order to divert more water from the South Fork to fill it.

The water rights — which establish a sort of ownership — could be a significant problem considering most of the water that flows in the South Fork of the Stanislaus River is already claimed by senior water rights holders, such as Oakdale Irrigation District, South San Joaquin Irrigation District and PG&E.

Plus, TUD’s current contract with PG&E for a free supply of water from the river stipulates that the district will not seek its own rights on the South Fork.

Despite such obstacles, the idea has gained some support from lawmakers who represent Tuolumne County in the state Legislature and U.S. House of Representatives.

Congressman Tom McClintock, R-Granite Bay, has introduced a bill for a streamlined program to permit new dam construction.

And State Sen. Tom Berryhill, R-Twain Harte, is looking to get funding for raising Lyons Dam added to a comprehensive water bond measure. The Legislature has since deferred putting the bond on a ballot, but other lawmakers are calling for action this year in light of the drought.

Many observers, however, say that the county’s time would be better spent focusing attention on alternatives to the long-discussed Lyons project.

Even those who support raising Lyons Dam, such as Pete Kampa, former TUD general manager, say that the length of time it will take to get approval for the project means that other, smaller projects will be needed to keep the county sufficiently supplied in the near future.

Some alternative storage projects being explored or already in progress include dredging Phoenix Lake east of Sonora, expanding Matelot Reservoir above Columbia, and building a small offstream reservoir and dam east of the former Sierra Pines golf course in Twain Harte.

Proponents of the small, offstream reservoir projects say they are more likely to attract state or federal grant money than larger on-stream projects like Lyons.

The project to dredge Phoenix Lake has already received $1.7 million from the state for planning and pre-construction work. TUD has also recently applied for $4 million dollars to begin construction work to scrape out the sediment-filled lake to boost its maximum storage capacity from 600 acre-feet to 900 acre-feet, enough to supply an additional 600 households for an entire year. 

TUD plans to seek another $8 million in state or federal funds to complete the dredging project.

The proposal for the 350-acre-foot reservoir near Sierra Pines has been in the works since 2007, when TUD learned the parcel would be available as part of a 2001 PG&E bankruptcy settlement with the state.

The Pacific Forest and Watershed Lands Stewardship Council, which is administering the distribution of 140,000 acres of PG&E watershed land throughout the state, says PG&E is working “cooperatively” to turn the parcel over to TUD.

District General Manager Tom Scesa said actual construction would still be years off. Among the hurdles: Finding some $9 million to build a small dam to capture spillage from PG&E’s main water-supply ditch in the area, as well as water that’s otherwise lost when PG&E operates the ditch in the winter.

Scesa doesn’t expect the project to stir much controversy as it moves forward, because it would be much smaller than an on-stream dam and wouldn’t impede any natural stream flows.

District construction crews are also currently working on a $270,000 project to expand Matelot Reservoir from 6 to 15 acre-feet in order to store extra water that will supply Columbia during the annual ditch outage in fall, when PG&E does routine maintenance on the system’s main canal.

Such small projects are unlikely to meet TUD’s future storage needs, but could improve the overall efficiency of TUD’s system by giving the district places to capture and store water to backup the supply in Lyons and Pinecrest reservoirs, Scesa said.

Improving the efficiency of the district’s Gold Rush-era water delivery ditches is another avenue to address the county’s water supply problem, but piping or coating the ditch with gunite has been a controversial topic for decades.

According to a study by current TUD Board President John Maciel, the ditch system loses roughly 35 percent of the water that flows through it each year. The primary sources of loss are identified as seepage, leaks and operational or end losses, from the point where water spills at the ends of each ditch. Other sources of loss are evaporation, absorption and theft.

Detractors of the ditch system say the losses are a waste of TUD’s limited water supply.

New sources

Whatever the project, the district’s goal should be to diversify the number of places it gets its water, experts say. 

According to the Association of California Water Agencies, the lack of diverse water sources is the leading cause for drought crises in many parts of the state, like Tuolumne County.

“There is truly only one source of water in this county,” said Stephanie Suess, community and resources development director for the Chicken Ranch Rancheria of Me-Wuk Indians, a small tribe near Jamestown. “This system has always supported the county, but look where we are this year. You need to have a plan B.”

Recognizing such a need, tribal leaders, Suess and the tribe’s water consultant, Mills, this spring managed to broker the first water transfer to the county from New Melones Reservoir.

The agreement allows TUD to buy up to 2,400 acre-feet, or 782 million gallons, of New Melones Reservoir water from the tribe at $200 per acre-foot. That’s the price the tribe is paying to buy it from the South San Joaquin Irrigation District, which holds water rights on the Stanislaus River and serves thousands of southeast San Joaquin County residents and farmers.

Suess hopes this can provide a building block to a more secure supply for both the tribe and TUD in the future.

“It’s about building that relationship with someone who actually has that water and our goal is to obtain that relationship with South San Joaquin,” she said.

Costs and commitment

Anyone who talks about improving the water supply in Tuolumne County, whether they support raising Lyons Dam, improving efficiency of the ditches or any of the other possible alternatives, eventually circle back to the same point: It’s going to be expensive.

County residents have enjoyed a relatively low-cost supply of water thanks to the agreement for free water from PG&E and a gravity-powered ditch system that reduces potential energy costs.

The corporation purchased the county’s water system in 1927 and sold the 57-mile TUD ditch system back to the county in 1983. PG&E still covers the cost to maintain some of the system’s most essential and costly parts, including the main canal and wooden flume that conveys water from Lyons to TUD’s ditches, Lyons and Pinecrest reservoirs and the expensive federal relicensing process to operate both dams.

Sonora resident Jerry Cadagan, a retired attorney and water activist, said the current trend with water rates around the state shows the cost of water is generally on the rise.

Any alternatives to the current supply, he added, will require a considerable investment from the community because all of the money won’t come from state and federal grants alone.

“It’s going to take money and it’s going to take leadership,” Cadagan said. “It’s going to take people that are willing to tell the general public the hard truth — we’ve got a problem and we’re going to have to do something about it.”

Tuolumne County isn’t alone in the prospect of paying more for water in the future.

A recent study by the Oakland-based Pacific Institute showed water rates across the state are generally on the rise. The report described the ever-increasing costs as “the new normal.”

The study said rates are expected to continue rising due to increasing capital costs from deteriorating infrastructure, stricter water quality standards and a state mandate for water suppliers to achieve a 20 percent reduction in water usage by 2020.

While the solution to the county’s water woes won’t be easy, and it certainly won’t be cheap, business leaders say collaboration from the community is key.

“There is not one easy fix or any easy solutions,” said Ron Kopf, executive director of the Tuolumne County Business Council. “We all need to take an active part in understanding the myriad of water issues and work together with county and state agencies to formulate and find ways to fund and implement the many water programs that are necessary.”