PROPOSAL SUBMITTED TO PAJARO VALLEY WATER MANAGEMENT AGENCY OF FEBRUARY 26, 1998

Informational Update Note on Proposal, below:
Using the most recent demand and sustainable yield figures from PVWMA's Basin Management Plan 2000, the proposal below increases sustainable yield by 28,000 (a/f/yr) through "optimized pumping" and decreases demand by 21,000 (a/f/yr) through creation of ag preserve/land bank and/or dry farming, for an aggregate hydrological benefit of 49,000 (a/f/yr). The current overdraft is 45,000 (a/f/yr). Conservation and "local projects" are expected to yield savings/new supply of 12,5000 (a/f/yr), best case, when finally implemented. As for future importation by pipeline, PVWMA expects to be able to actually import only 55%, or around 11,000 (a/f/yr), of its original BLM entitlement.

In essence, the proposal can be viewed as creating a "hydrological agricultural and
environmental buffer zone and reserve/land bank" of 7,000 acres (at the two most hydrologically critical locations), being either dry farmed (seasoning for eventual organic production when and if an additional, sustainable water supply is obtained) or held in open space, park use, or ecological preserve. Coincidentally, this solution is equal in scale to the 7,000 acre Coast Dairies Ranch acquisition as well as being almost equal to the gross acreage of orchard lands that have been converted to water intensive production using
around four times as much water, a big part of the cause of the problem in the first place. 

Current possible sources of funding this acquisition are $2.1 billion AB-18 Park Bond Act and $2 billion Water Bond Act on March, 2000 ballot, PVWMA and SCWD funding, and foundation grants.

You can e-mail us, call/fax us at (831) 479-4009, 
and mail us @501 Mission Street, Santa Cruz, California, 95060.
Send your e-mail now!

*****

Douglas Deitch
Monterey Bay Conservancy
(Pogonip Foundation, Inc.)
501 Mission Street
Santa Cruz, California, 95060
(408) 476-7662
www.pogonip.org

FEBRUARY 26, 1998

Mr. Jim Dutra
Board of Directors
Pajaro Valley Water Management Agency
Fax 722-3139

Re: February 27, 1998 Meeting, Agenda Item 5., Water Supply and Basin Management Options if June 2nd Initiative is Approved by Voters

Dear Chairman Dutra and Board of Directors,

I submit the following proposal for your consideration at your meeting on February 27, 1998 on Agenda Item 5., Water Supply and Basin Management Options if June 2nd Initiative is Approved by Voters. As an individual concerned with the wise, responsible, and self sustainable use of all of our community's resources, attention, as a first priority, is not being given to, in at least some small manner, reversing the trend of increasing yearly overdraft volumes. Exemplar communities must be based on sound long term and implemented water strategies. This is not occurring now.

While the Pajaro Valley Water Management Act is predicated upon meeting the needs of all basin users, it is not clear whether it is the 1984 users' needs or the 1998 users' needs which must be satisfied. There's quite a difference. In any event, below I propose a viable, sure fire, and self sustainable "local" solution to our water problem requiring no importation of water or pipeline. Whether the initiative passes or not, this approach is available. It eliminates the present hydrological mining and deficit spending of our water resource. It lives within our means.

Actually, a variant of this approach is identified in the Basin Management Plan EIR as the environmentally preferred alternative (and would have, in fact, been the recommended alternative but for the legal mandate of the act) in lieu of an across the board 60% mandatory use reduction in the event of a basin adjudication. The project will bring the water basin into balance on a phased project basis as adverse economic effects of the project may be satisfactorily mitigated. Furthermore, the project does not preclude the future possibilities or potentials of imported, desalinated, reclaimed, conserved, or any other possible supplemental supplies which prove to be economically feasible.

* Water intensive agricultural production and pumping will be discontinued on the 4,700 acre Springfield Terrace Area and the 3,500 acre Buena Vista Area, with non water intensive ag uses substituted instead. These properties are either purchased outright or the owners are otherwise compensated for the diminution in value of their lands or for fallowing. By comparison, the recent north county Coast Dairies Ranch acquisition consists of 7,500 acres.

* With a purchase price of $20,000 per acre for 8,200 acres, the initial cost would be $164 million. However, these lands would have a residual value (let's assume, for example, of $10,000/acre) of $82 million. Net project cost would then be $82 million, compared to the $134 million slated for the pipeline project.

* With a water use reduction of 2.5 a/f per year per acre, a 20,500 a/f per year reduction in use is accomplished. Another 4,000 a/f per year water use reduction is accomplished through present PVWMA conservation projections of BMP, for a total water use reduction of 24,500 a/f per year.

* With the "new pumping practices", the 24,500 a/f annual savings to PVWMA from the current 68,000 a/f use brings its annual water use to 43,500 a/f, 6,500 a/f under the safe sustainable yield of the aquifer of 50,000 a/f annually.

* 4,000 agricultural jobs are eliminated and around $300 million of associated annual revenue production is also lost. Under, for example, LAFCO's methodology, to compensate for this employment/revenue loss, up to an additional 200 acres of new commercial/industrial development opportunities will have to be created to replace the jobs (@20 jobs/acre).

* Employment "retooling" and revenue loss will easily be compensated by new additional commercial and industrial development through either Watsonville's unique enterprise zone's economic advantages, and/or additionally through new intellectual property development opportunities afforded by CSU, UCSC, Fort Ord reuse, and related research and development facilities.

This local project provides for a reasonable and self sustaining use of our local available water resource, no significant loss of agricultural lands, and no future dependence on costly and perhaps unavailable imported water. Under this plan, coastal wetlands environments and general environmental self sustainability in these two areas totaling 8,200 acres will be expanded, protected, and enhanced. Finally, the project will provide for a needed and prudent diversification away from the two industries of agriculture and tourism which now imprudently over dominate our economy while further providing for a virtually unlimited and "green" increased revenue production potential in the intellectual property development area.

Respectfully submitted for your consideration,

Douglas Deitch.

*****

Douglas Deitch
Monterey Bay Conservancy
(Pogonip Foundation, Inc.)
501 Mission Street
Santa Cruz, California, 95060
(408) 476-7662
www.pogonip.org

MARCH 26, 1998

Mr. Jim Van Houten, Chairman Steering Committee
Mark Salmon and Tim Durban Bookman-Edmondston Randall Hanson USGS
c/o Mr. Charles McNiesh, Acting Director
Pajaro Valley Water Management Agency
Fax 722-3139

Re: Clarifications of proposal presented Monday evening, March 23, 1998

Dear Sirs,

In addition to the project described in my February 26th, 1998 letter to the agency, as I mentioned Monday evening, the following additional measures should be considered, perhaps even as necessary and integral to the proposal.

1. Amendment of the PVWMA Act

The Act presently mandates that the present and future needs of all users in the district be met, with a priority given to agricultural users. This should be reconsidered. In approximate figures, about 6,000 of the district's 25,000 ag acres have been converted from orchard and other ag use to water intensive crops since the agency was created. This ag use change on these properties so converted constitutes a large portion (if not all) of the problem. Importation of supplemental water is specifically contemplated by the act to meet these
increased needs.

The wisdom and practicality of this mandate of the act should be revisited given the current water situation and supply availability on a statewide and national basis. Instead, consideration should be given to limiting the agency's responsibility to provide water to all basin users on an equitable basis up to the safe sustainable annual yield of the basin, with proper management and conservation measures in place, which is presently estimated at 50,000 a/f/yr. The act should logically not require measures that, due to either their environmental and/or economic requirements, are unfeasible or impossible.

2. Establish Area Wide Water Use Authority

The Monterey Bay Area as a region has serious and chronic water overdraft problems. Monterey County's $1.9 billion annual ag production compared to Santa Cruz County's $255 million correlates to a water use (and abuse) in Monterey County roughly 6 times Santa Cruz'. A water crisis has already been formally declared and adjudication activities commenced in Monterey County.

Given the non-alignment and overlapping of the jurisdictional boundaries of the various water use authorities in our region with the underlying ground water basins, coordinated and effective management of the resource is presently not possible. Due to the significance of the massive agricultural production of the Monterey Bay Area, the environmental sensitivity and bent of the population generally, and the nexus with the Monterey Bay National Sanctuary, a "Monterey Bay Area Water Use Authority" should be considered and established to plan water uses issues (including importation) on a regional basis, taking all users needs into consideration. By this measure, the whole Monterey Bay region can be planned and managed as the interactive area wide drainage and storage basin it actually is. As the largest user in Santa Cruz County by far (consuming over 4 times as much as the next largest user), PVWMA can and should take a leading role in this matter.

3. Consider "Privatizing" Pipeline/Importation and Possibly Other Supplemental Supply Projects

The feasibility of the private sector should be considered as a possible developer and operator of supplemental supply projects, such as the pipeline project, which will provide water over the self sustainable yield of local supply for PVWMA's as well as any other regional suppliers' demands by intertie.

4. Review Underlying Economic Assumptions of Importance and Necessity of Present Level of Agricultural Activity Revenue Generation in Our Economy vs. More Diversified Economy

The submitted proposal assumes that alternate and compensatory revenue generation sources are available (as noted in the proposal) to replace lost ag activity revenues. Due to the beneficial diversifying possibility for our economy that this presents, a review of the economic assumptions used to justify the Basin Management Plan (BMP) in light of current development activities and potentials in the areas noted in the proposal should be conducted and evaluated.

5. Achievement of BMP's Most Critical Objectives

The proposal submitted is the only plan which can and will with certainty achieve the two critical BMP goals of providing a local water supply on a consistent and self sustaining basis and eliminating harmful excessive pumping from the 8,200 acre critical coastal areas identified, therefore providing the most efficacious treatment for the saltwater intrusion problem.

6. Identified Funding Sources For Proposal

Five different potential funding sources were identified:
1. AB 1000/Keeley- $ 800 million
2. SB312/Costa-Machado- $1.2 billion
3. Packard Foundation- $ 175 million
4. Augmentation Fees/Bank Acct.- $ 2.5-5 million/yr./$10 million
5. 8,200 Acre Residual Value- $ 82 million+

Respectfully submitted,

Douglas Deitch