Executive Summary for March 11th

In this weekly roundup, we analyze key developments in the California drought, including a fine against the country’s largest water district by the Securities and Exchange Commission. We also look at how the state is helping to prepare California communities for climate change resilience and more.

Published on March 11, 2016 Read time Approx. 3 minutes

Enron Accounting

Westlands Water District, the biggest water district in the country, made national headlines this week when it was hit with a $125,000 fine from the Securities and Exchange Commission (SEC) on the grounds that the district misled investors about financial problems. Westlands’ general manager Thomas Birmingham was individually fined $50,000, and assistant general manager Louie David Ciapponi was fined $20,000.

Reports state that Birmingham referred to it as “a little Enron accounting” at a district board meeting.

“Although the SEC charge centers on a 2012 sale of $77 million in bonds, it is rooted in an accounting change two years before that, when the state’s long drought had crimped the district’s supply of federal water and cut deeply into its income from selling that water to farmers,” the New York Times reports. “Had it accurately stated its 2010 position, the commission said, it would have told bond buyers that it had only 11 percent of the money needed to service its debt — not 63 percent.”

Metropolitan’s Islands Plan Moving Forward

Who doesn’t dream of owning their own island? Southern California’s Metropolitan Water District is moving forward with plans to do just that after getting the go-ahead from their board to begin contract negotiations.

But of course, it’s not to kick back on the beach. Metropolitan is hoping to scoop up five islands in the Sacramento-San Joaquin Delta in strategic move tied to water. The islands, which are currently owned by a Swiss conglomerate, may be a key chess move in the battle to build Gov. Jerry Brown’s $15.5 billion twin tunnels, known as California WaterFix.

“[Metropolitan’s general manager Jeff] Kightlinger said some of the islands could serve as a staging ground for equipment, excavated dirt and other materials,” the Sacramento Bee reported. “Two of the islands lie in the heart of the proposed tunnels route.”

Kightlinger also said the water district could use the islands to improve wildlife habitat. “This is about safeguarding the water we do have,” he told the Sacramento Bee.

Others view the situation differently. An editorial in the San Francisco Chronicle said, “If it’s not a water grab, it comes close.”

The Chronicle sees the potential purchase as problematic for the state. “That constant search for water comes at an enormous cost to the rest of the state, especially the over-subscribed delta,” the editorial states. “The agency is buying its way, not negotiating. It would rather pay to flatten obstacles for the enormous twin tunnel solution than work out a settlement. Local farmers, cities and environmentalists are left on the sidelines.”

Restore the Delta, a local advocacy group, took issue with the plan.

“It is troubling for the Delta region that Metropolitan Water District is going to acquire such a significant portion of Delta land and Delta water rights,” said Barbara Barrigan-Parrilla, executive director of Restore the Delta. “They have the resources to change law and policies statewide to maximize their access to Delta water in their favor … We believe that having [Metropolitan Water District] as a neighbor is an existential threat to the future of the Delta and Delta communities.”

Climate Change Resilience

A new report lays out how California can become more resilient in the face of climate change. And for starters, it also explains why we should even be thinking about that.

“Since 2009, California has experienced several of the most extreme natural events in its recorded history: severe drought, an almost non-existent Sierra Nevada winter snowpack, five of the top 20 largest forest fires ever recorded in the state in terms of acreage burned, and back-to-back years of the hottest average temperatures,” the report says.

The plan focuses on 10 sectors to implement the recommendations already detailed in a 2014 report, “Safeguarding California: Reducing Climate Risk.”

When it comes to the water sector, climate risks vary by hydrologic region and a dozen are explored. Recommendations for the sector address the following: Preparing for flooding, protecting groundwater resources, increasing efficiency, diversifying local water sources, tackling the Delta’s vulnerability, increasing storage capacity, examining how disadvantaged communities will be affected, making sure climate change is factored into water management decisions, using low-impact development to address stormwater, ensuring coordination between water planning and land-use planning, restoring critical ecosystems and increasing the understanding of the state’s climate risks.

Top image: In this June 25, 2013, photo, a mechanical harvester picks tomatoes in the Westlands Water District near Five Points, Calif. The nation’s largest federal irrigation district was hit with a $125,000 fine from the government for misleading investors. (Gosia Wozniacka, Associated Press)

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