Water Archives · Earnest Conant interview

Title

eng Earnest Conant interview

Description

eng Bakersfield water lawyer with a long history of working on water rights on the Kern River and working with south Valley water districts.

Creator

eng Conant, Earnest

eng Holyoke, Thomas

Relation

eng Water Archive Oral Histories

Coverage

eng California State University, Fresno

Date

eng 6/30/2015

Format

eng Microsoft Word 2013 document, 16 pages

Identifier

eng SCMS_waoh_00001

extracted text

>> Thomas Holyoke: Okay, we are talking to Ernest Conant and he's a water
lawyer from Bakersfield. Let's just start off with a little bit of
biography. You know, where are you from? Where did you get your education?
How did you get into water law?
>>Earnest Conant: Yeah, I was reared on a farm in Northern California where
my family still farms. And I went -- got my undergraduate degree at Cal Poly
San Luis in AG business, and then went on to law school at Pepperdine. After
graduating from Pepperdine and passing the bar I joined the firm I'm now
with and have been there for going on 36 years. You know, Low Ridge
[phonetic] in Bakersfield.
>> Thomas Holyoke: Did you study water law at Pepperdine?
>> Earnest Conant: Not really. There really weren't very many classes in
water law, per se. I did some research and wrote a law review article on
some water law issues when I was going to law school and knew that I was
interested in law school -- or interested in water law from the beginning.
So that was the path I was going to pursue after I got law school.
>> Thomas Holyoke: I'm starting to hear that there really aren't any law
schools in California that truly specialize in water law.
>> Earnest Conant: Earnest Conant: No, most of them have maybe a class or
two and then they'll have a class in environmental law or related topics,
but most would just have one class on water law per se.
>> Thomas Holyoke: Anyway, so I guess we can pick up your career with the
Kern River down by Bakersfield.
>> Earnest Conant: Yes, so my firm has been involved in representing water
right holders on the Kern River for a long time. We also represent the Kern
River water master. And the Kern River is very interesting in that that's
where California water law was kind of established, in Lux v. Haggin, on the
Kern River establishing the precedent, the repairing rights come first, and
appropriators second with a whole bunch of qualifications that we don't need
to go into here, which were actually the topic of that case. So that case is
still the longest reported case of the California Supreme Court from 1886.
And then two years later the parties settled in what's called the MillerHaggin Agreement. And the Miller-Haggin Agreement still governs how the Kern
River is allocated on a daily basis to the state. Where there's one group
called First Point and those rights are now held by North Kern Water Storage
District, the city of Bakersfield and Kern Delta Water District and in
another group which were the Miller Group, or the Lux Group and those rights
are held by Bona Vista Water Storage District. And the Miller-Haggin
Agreement basically provides that one third of the undiminished flow during
irrigation season is to be delivered to second point by first point, and a
bunch of details. But that agreement still is in place and dictates how the
river is allocated, and generally it has worked pretty well for 130 years or
so. There have been disputes between some of the parties but the overall
framework is still in place.
>> Thomas Holyoke: What kind of work do you personally do with...there... on
the Kern River, I mean or have done, I mean representing the water rights of
the holders there? Any major disputes or interesting stories from that time?

>> Earnest Conant: Well there have been disputes within the first point
group. And the situation that arose was a certain water right holder had
what we would refer to as certain paper and entitlement that they have not
historically used part of it. And so that case has been litigated for about
the last 20 years and has now pretty much concluded itself, determining that
there were certain rights that were forfeited and the issue now is who
decides where that forfeited water goes, and right now the matter is before
the State Water Resources Control Board for them to determine whether
there's unappropriated water or whether the water goes in order of priority
to the next junior appropriators. So that's an issue that's been ongoing in
a broader sense. The Kern River has had a couple issues about 10 years ago.
The issue was that the southwest willow flycatcher, an endangered species,
had set up home when the water level was low and then there was litigation
by a Center for Biodiversity asserting that the lake could not be filled
because it might flood out the southwest willow flycatcher. Ultimately that
issue was resolved and alternative habitat was acquired by the core of
engineers as authorized by Congress. And that was resolved -- within nine
months after that was resolved then another issue came up and it was
determined that the dam, Isabella Dam, was not seismic compliant with new
standards, that there was a newly discovered fault under the dam. And,
again, the water level was lowered, this was in 2006, almost 10 years ago,
to about the same level it was with the flycatcher issue. So we were back to
where we were and have been for the last 10 years. And now the core of
engineers is going through an extensive process to basically rebuild the dam
and anticipates that being completed in 2022.
>> Thomas Holyoke: Is the water behind Isabella Dam used for irrigation or
is that purely, you know, recreational? Actually, is Isabella Dam a
hydroelectric dam?
>> Earnest Conant: There is a small hydro project on it, but it's not very
significant. Its main purpose is flood control, very similar to the other
Southern Cal -- Southern San Joaquin Valley streams, the Kings, the Tule,
and the Kaweah, and the Kern are all core projects that were built in large
part for flood control purposes. In the case of Isabella, most of its
allocated to flood control, it's the primary purpose. And then the secondary
purpose is for irrigation and, you know, water conservation. And then also,
of course, there's a recreation component. But, yeah, the Isabella is
primarily a flood control facility.
>> Thomas Holyoke: Okay. In 2015 during the extreme drought, what condition
is the Kern River in?
>> Earnest Conant: It's the worst ever in recorded history. Like most
streams, in particular in the San Joaquin Valley, unprecedented, you know,
11% of normal. So things are very, very dry.
>> Thomas Holyoke: Given that the river is so dry, I mean, is all of the
organization of legal water rights on the river set up to deal with that? I
mean, is it clear who loses out when the water get this low?
>> Earnest Conant: Yeah, there's a priority. As I mentioned, how it works
between first point and second point. And then within first point there's a
priority based on time of filing the original appropriations. So the first
right is called the Kern Island, it gets the first 300 CFS and it will be
the only right that accrues any entitlement during the summer. And that's
all understood by everyone. And so everybody else either has groundwater or

they have a little bit of water storage, although that's pretty much
exhausted.
>> Thomas Holyoke: Okay. All right, anything else generally on the Kern
River we can discuss?
>> Earnest Conant: No, I think that covers it.
>> Thomas Holyoke: Okay, then you've done work with the Central Valley
project. Anything particular about that you want to start with, or go right
into CVPIA or...?
>> Earnest Conant: Yeah, so you know, a little over 20 years ago I spent a
lot of time working with the legislation that led to this Central Valley
Project Improvement Act that made dramatic changes in how the CVP is
operated. One of its primary purposes was to broaden the purposes of the
CVPIA to specifically include environmental purposes. It also dedicated over
a million acre feet of the yield of the CVP to environmental purposes which,
of course, was, you know, very detrimental to farms and cities that have
relied upon the CVP historically. But nonetheless, that's the law that we
have. You know, very interestingly Bush 41 was running for president for a
second term at that time, came here to Fresno and in a speech, you know,
said and under no certain -- under no conditions would he sign this bill
[laughter]. And within a couple months, you know, this bill was packed with
a whole bunch other titles from throughout the Western United States of
things that senators absolutely had to have to get reelected. And so, you
know, he was pressured into signing the bill and did so on October 30, 1992,
just a few days before the election and he lost. But his successor, Mr.
Clinton, I'm sure he would've signed it any way if he had vetoed it.
>> Thomas Holyoke: How did you become involved with CVPIA?
>> Earnest Conant: So I -- we represent, you know, the Friant districts in
Kern County. We also represent some other CVP districts so in that context I
was, you know, working with a group of lawyers and policymakers that were
trying to influence the process.
>> Thomas Holyoke: That's right, because Friant-Kern Canal gets almost all
the way down to Bakersfield.
>> Earnest Conant: Yes.
>> Thomas Holyoke: So it’s in the Kern County.
>> Earnest Conant: Right, the Friant-Kern Canal actually terminates at the
Kern River so if there are really large flows coming down the Friant-Kern
Canal they actually go into the Kern River and ultimately water from the
Kern River can then go into the California aqueduct. And during a flood
control season, you know, water comes out of many of these rivers, the Kings
and Tule gets diverted into Friant-Kern Canal, down to the Kern River, and
into the intertie onto the California aqueduct as a flood control measure.
>> Thomas Holyoke: Did CVPIA in the end have much of an impact on irrigators
and districts that pulled water out of the Friant-Kern Canal?
>> Earnest Conant: It didn't directly have an impact on the Friant-Kern
Canal because there was a language that the secretary was to do a study and

determine whether it was feasible to restore salmon and other environmental
issues in the San Joaquin River. That study never resulted in anything
because ultimately the San Joaquin River settlement kind of overtook it. So
it didn't have a direct impact there but it certainly had a major impact on
other parts of the CVP, including the west side of Fresno County and the
Westlands area and Delta-Mendota Canal contractor supplies that have, you
know, dramatically been reduced as a result CVPIA. It also had other aspects
to it, that the urban constituency within California was pushing hard on for
making it easier to do transfers out of the CVP to Southern California,
wherever, but ironically that really hasn't happened to any degree. But that
was a key component of CVPIA and a key pusher was to open up transfers. And,
unfortunately, it really didn't open up transfers because it developed a
whole bunch of new rules that also applied to existing contractors doing
routine transfers with each other, and has made those, in some cases, a
little more difficult, although the Bureau of Reclamation has tried to work
with it to make the process more expeditious. But that was a major driver of
CVPIA to, you know, move water out of the CVP potentially to Southern
California and it really hasn't happened.
>> Thomas Holyoke: So in a sense, maybe it's just as well that it hasn’t
potentially increased the loss.
>> Earnest Conant: Oh absolutely. Yeah. Yeah, the first and only major
transfer has been tried out of the CVP to Southern California was early on
Rusty Reyes who was then a assemblyman and his family had a dairy and the
exchange contractor area attempted to transfer to Metropolitan Water
District of Southern California, which ended up in auditoriums being full
with people and Metropolitan quickly decided that was really not a good
idea. So that kind of blew away. That was probably 20 years ago, shortly
after CVPIA. So that's a little bit about CVPIA.
>> Thomas Holyoke: Okay. You've also been involved with the efforts to renew
contracts with -- for CVP contractors?
>> Earnest Conant: Yes, so the original CVP contracts were for 40 years from
when water started to be delivered. So the first contracts that came up for
renewal were the Friant contracts. The first group were in 1988. And so we
commenced negotiations with the Bureau of Reclamation in '86 or '87 and
worked through the various issues. And then shortly after the initial
contracts were signed NRDC and a group of environmental -- and a group
environmental organizations filed a lawsuit challenging the propriety of
those renewals. And that resulted in 18 years of litigation that we were
involved with and then ultimately led to the San Joaquin River settlement,
which I can talk about in a moment. In terms of the other renewals, you
know, most of -- all of the CVP contracts, most of them came up for renewal
before 1995. The last big one would have been the San Luis unit, Westlands
and so on. I think it can up in 2008. But there was a process in 1995 where
we had I believe it was 112 CVP contractors around a table in Sacramento
negotiating with the Bureau of Reclamation on what would be the standard
terms and conditions for renewal of these 112 contracts. Recognizing that in
different areas and for different districts specific provisions need to be
put in, but there were standard provisions that would apply to all 112. And
so we literally had negotiations in ballrooms in Sacramento so that
everybody had a spot around the table. And, unfortunately, I was kind of the
de facto chairman of the drafting committee trying to, you know, lead this
multi-ring circus. And, you know, we spent as much time in caucuses trying
to figure out what our positions were going to be as we did actually

negotiating with the Bureau of Reclamation. But ultimately we got it done
and then that formed the basis for all of the CVP contracts that then were
renewed starting in 1995. Most of them were done under interim contracts and
for the most part have now converted to permanent contracts -- or well 25
year contracts. One of the provisions of CVPIA was that a renewal contract
could only be for 25 years as opposed to the 40 years that is authorized
under general reclamation law. So some of the earliest ones that got
renewed, 2005, you know they're already 10 years into it, and in another 15
years we'll be doing renewals again.
>> Thomas Holyoke: During this whole process was it difficult to get all of
the, you know, irrigation and water districts, whoever, sort of on the same
page as to how to negotiate with the Bureau and what they wanted in the
contracts?
>> Earnest Conant: I mean, it was challenging but, you know, there's a
pretty good working relationship between the various attorneys that
represent different districts within the CVP up and down the state and with
the clients and the managers and, you know, we were able to work through all
of that. It just, you know, it takes a little time because when you got that
many people around the table everybody has a little different idea
[laughter].
>> Thomas Holyoke: When the Natural Resources Defense Council started filing
suits over these contracts, I mean what was their concern? What were they
suing over essentially?
>> Earnest Conant: Yeah, so initially there -- this would be the Friant
litigation which resulted in the San Joaquin River settlement, which maybe
we could talk a moment about, but so their initial complaint was alleging
that the bureau had not complied with NEPA, the National Environmental
Policy Act, which would require that they do an EIS and look at all the
environmental impacts before they renew the contract. Subsequently, they
amended their complaint and the main focus of their complaint became Fish
and Game Code section 5937, which provides that you -- that an operator of a
dam has to leave enough water in a stream to have a viable fishery below the
dam. And so they were all kind of -- this is what, you know, why the
litigation went on for 18 years and went up to the Court of Appeals and
petitions to the Supreme Court and back down and up again. It focused on
issues like, you know, does 5937 even apply to the Federal Government in
this context. We had this CVPIA provision that I mentioned earlier from 1992
that said that water shouldn't be released from Friant Dam until a study is
done and Congress says that some action needs to be taken. You know, all of
these attempts by the Bureau of Reclamation and the Friant contractors to
repel the efforts of NRDC and the other environmental groups were in large
part unsuccessful. The one claim that we did win on was their initial claim,
the courts found that it was not subject to NEPA because it was not a
discretionary act, that the United States have an obligation to renew these
contracts. It was just a question of what the terms were going to be.
>> Thomas Holyoke: So at least the next time that the contracts come up you
wouldn't have to worry about being sued under NEPA?
>> Earnest Conant: In theory you wouldn't have to [laughter]. Nonetheless,
the bureau has done extensive environmental work because then what happened
after '88 when they filed their litigation, you had CVPIA and one of the
provisions of CVPIA, this was in 1992, was that the bureau shall do in a

programmatic environmental impact report on renewal of all the contracts,
which took them many years. And then -- so Congress said, well we don't care
what the courts have said, we want you to do an EIS on the renewal of these
contracts. So it kind of became a moot issue. But, in any event, you know,
the litigation went on and on and, as I mentioned, for the most part the
Friant contractors and the bureau were unsuccessful. The court found and
Court of Appeals Ninth Circuit confirm that 5937 did apply to Friant Dam and
the court went so far as to say that in terms of maintaining a fishery below
the dam, it was not sufficient to just have a warm water fishery as exists
now, but rather there needed to be the reestablishment or an attempt to
reestablish a salmon fishery, which existed to some degree before the
construction of Friant Dam, which led them to the San Joaquin River
settlement where the Friant contractors and the Bureau ultimately reached
agreement with the environmental groups in approximately -- in 2006 for a
settlement which would take some of the water from Friant and use it to
restore a salmon fishery which would also result in a major construction
project to rebuild part of the San Joaquin River, you know, where water
basically hadn't flowed except during flood seasons for 75 years. And it
will result in a reduction of the Friant supplies by 15 to 20% depending on
the year. And a year like this where there's no water, well there's no water
released for the fishery. But in wetter years there would be a certain
portion of what the Friant contractors would otherwise receive, would go
down the river to help restore the salmon fishery. Unfortunately -- and I
should also mention that settlement agreement was literally subject to
approval of Congress. So a prerequisite to the settlement agreement going
forward was for Congress to adopt -- well it became the San Joaquin River
Settlement Act, which approved the settlement. And along the way, because
Congress had just recently adopted new rules called paygo, is a budgetary
process that I think you are familiar with, Tom, that, you know, if you're
going to come up with a new obligation for the government to fund you, have
to come up with a payment source. And so the San Joaquin River Settlement to
rebuild the San Joaquin River, the capital cost was guesstimated to be
around 800,000 -- $800 million, almost $1 billion. Since then they've come
to understand that's not near enough, of course. But part of the -- part of
the process that evolved out of the efforts by Congress to move forward with
the San Joaquin River settlement was the offering of 9D contracts to the
Friant contractors and ->> Thomas Holyoke: What is the 9D?
>> Earnest Conant: So a 9 -- in -- with the Bureau of Reclamation there are
two kinds of contracts. There are repayment -- there are first of all are
water service contracts. That's what the CVP has historically had in the 40
years of 25 subject to renewals that say, you know, you pay a certain amount
of money to the federal government and we provide a water supply to you. A
9D contract is that you pay the construction cost to the government. And
after you repay it then you have this facility. And that's what historically
has been done throughout most of the west, has been 9D contracts, but not in
the CVP. So the mechanism to help Congress with its budgetary issues was
that Friant contracts offered to, we will prepay our capital because they
still owed, you know, a couple hundred million dollars to the federal
government for their share of the capital. We will prepay our capital to the
federal government in exchange for getting a 9D contract like is used in
most of the west. And then that becomes a permanent contract as opposed to a
25 or a 50 year contract to provide its water supply since you've paid off
your capital. So that was authorized under the San Joaquin River Settlement
Act along with approving the settlement itself. And those contracts had to

be completed by the end of 2010. So in 2010 we had extensive negotiations
between the Friant contractors and the Bureau of Reclamation to get those
contracts done. We got them done and districts went out and floated bonds
and got other forms of financing to raise the 200 million or so and that
money was paid to the federal government for the most part by the end of
2010. The other thing that occurred, that I should mention as we were going
along here is, you know, it took three years to get this act through
Congress. So it actually wasn't approved until March of 2009 when President
Obama came into the White House and he signed the bill as one of his early
acts in March of 2009.
>> Thomas Holyoke: Were you involved in any of the negotiations out in
Washington on this?
>> Earnest Conant: Yeah, actually I was -- I was special counsel to the
Friant water users. Dan Dooley had started the effort to kind of be in the
lead of the attorney group and working through the issues with the folks in
Washington. And then he became a vice president of the UC system, one your
bosses just retired from that post recently. And so after he took that job
then -- and that would have been in, I forgot what year, 2007 or so, then I
kind of took his spot to lead the effort and was involved in the efforts of
Washington to finalize the legislation to provide for the mechanism for
these 9D contracts. And then in 2010, on behalf of Friant, kind of lead the
effort of the Friant contractors to get these contracts done. So, yeah, I
was very involved in that. It was the exciting part of my career.
>> Thomas Holyoke: I’ve heard people talk about -- it sounds like
essentially you were all locked into Senator Feinstein’s conference room
until you could hash out an agreement.
>> Earnest Conant: Yeah, actually the initial part of that occurred with -when Dan Dooley was there and that's exactly what happened. And then there
were some subsequent meetings I was involved with as the process went along
with Senator Feinstein. She was very much the driver of this and continues
to be very involved. You know, the San Joaquin River Settlement has not
worked out as anyone anticipated. It's taken a lot longer for the Bureau to
complete the tasks that need to be completed. The funding hasn't been there.
And then to kind of add insult to injury we now have a new physical problem,
and that is subsidence, where portions of the land out there near the
exchange contractors where some of these main conveyance facilities are
which -- where the river would have to be restored have sunk. And so that
has added complications and costs to ever, you know, rebuilding the San
Joaquin River and reestablishing a salmon fishery. And then most recently,
last Thursday or Friday, you know, our congressional delegation has
introduced a new bill similar to what has been attempted before that would
modify the San Joaquin River Settlement that was approved and basically
convert it from a restore a salmon fishery to improve the warm water fishery
between Friant Dam and the Mendota pool.
>> Thomas Holyoke: Now can Congress go ahead and change that part of the
settlement? I know Congress can change, you know, past statute but this was
also a judicial settlement.
>> Earnest Conant: Yes.
>> Thomas Holyoke: With Judge Carlton --can Congress just go ahead and
change those terms?

>> Earnest Conant: Well I think they could if settlement was subject to
approval of Congress and Congress could change its mind [laughter]. As
Congress has from time to time.
>> Thomas Holyoke: Yes, it does.
>> Earnest Conant: So ->> Thomas Holyoke: Okay.
>> Earnest Conant: There undoubtedly will be a lot of
this year and I'm sure that Senator Feinstein will be
expect that the house will pass out a bill similar to
and then it'll remain to be seen what the senate does

discussions about that
involved. I would
what was introduced
with it.

>> Thomas Holyoke: Rumors are that Senator Feinstein has been -- is
developing her bill but she's been developing her bill for years now it
seems.
>> Earnest Conant: Yeah, she's very frustrated, and understandably so. With
this whole process, it has not gone as anyone expected. And at a minimum
there has to be some change to the settlement agreement and settlement
legislation if anything is to proceed and, you know, in our lifetime.
>> Thomas Holyoke: Well anything else on Central Valley Project you would
like to talk about?
>> Earnest Conant: No, I think that covers the main things that I've been
involved with.
>> Thomas Holyoke: Okay. Well, being a good well-round water lawyer you've
also been involved in the other great project, the state water project.
>> Earnest Conant: Yes.
>> Thomas Holyoke: Let's talk a little bit about that, your involvement with
that.
>> Earnest Conant: Yeah, so we represent several of the major member units
of the Kern County Water Agency. You know, generally the SWP is divided up
where half of the allocation goes to Metropolitan Water District of Southern
California, a quarter goes to Kern County Water Agency, and the other
quarter goes to another 26 contractors up and down the -- up and down the
state from Yuba City or Butte County, I guess would be the furthest north
to, you know, various other agencies in Southern California that are not
part of [inaudible]. And so we represent some of the larger member units
within the Kern County Water Agency and in that context have been involved
with the SWP. And, you know, the largest change there that's occurred within
the last 20 years has been the Monterey Amendments. We call them the
Monterey Amendments because the final deal was struck in Monterey during an
aqua conference where everybody happened to be from the state -- happened to
be in the same city so that's where they met. But -- and that was in
December of 1994. So what had occurred was -- before that -- before the
Monterey Amendments the state contracts had what we called AG first shortage
provision, which basically provided that the agricultural contractors would
take the first 50% of the shortage. And so in 1991 when we had the last big

drought, the culmination of the last big drought went on for five years,
Jim, in 1991 the AG contractors got zero and the urban contractors got 35%.
And after that occurred, you know, in Kern County we kind of told ourselves
never again. And so we commenced a process to get ready to litigate the
validity of the state water contracts and how they were being implemented,
particularly in 1991. And that ultimately led to a mediation process that
was -- the principal mediator was Jim Waldo, who is still involved in
various California water issues as a mediator, very effective. But he was
able to bring the parties together again in December of 1994 and the
Monterey Agreement was reached, which was just a series of principles,
basically a two pager, and then during 1995 that was translated into
contract language. But the key provisions, as it relates to the contractors
in our area, which would include the, you know, not only Kern County, but
Tulare Lake Basin water storage district, Dudley Ridge Water District that
Jim historically and his firm have represented, Kings County and a few
others, Empire West, so various contractors in this general area. But did
the principal provisions were to get rid of the AG first shortage so that
all contractors were treated equally. When there's surplus water the AG
contractors used to get priority. Now that's the same whether its regular
Table A entitlement or surplus water, all contractors are treated the same.
So Metropolitan gets half, Kern County gets a quarter, and everybody else
gets the other quarter. Secondly, to open up and allow for transfers -permanent transfers of entitlement from AG contractors willing -- and
sellers AG contractors to urban contractors, and for the most part that has
occurred. Also to provide additional flexibility to the urban contractors so
they can store water anywhere in the state they wanted, including areas like
Semi-Tropic and urban Edison. Maybe we'll talk about in a moment. And then
those were the principal provisions. And then lastly was to transfer the
Kern Water Bank, which the state had acquired in 1987 with the idea to build
a water bank, but frankly they fumbled around a bit and never got it
completed. And by 1994 -- 1993 the Department of Water Resources had
determined that it wasn't feasible, this wasn't going to happen. So as part
of the Monterey Agreements, Kern -- the DWR agreed to transfer this 20,000
acre block of land that was originally intended to be a water bank to local
interests. And so that then as part of the Monterey Agreement was
transferred to the Kern County Water Agency, which in turn then transferred
it to the Kern Water Bank authority, which I represented them and continue
to represent. In any event, the Monterey Amendments then were signed in
December of 1995. And then litigation was filed by the Planning and
Conservation League, which went on for a number of years. And ultimately
there was a settlement of that case in 2003, which resulted in the
Department of Water Resources agreeing to prepare a new EIR on the Monterey
Agreements. It took them seven years that EIR came out in 2010 and then
litigation was filed by another group of environmental interests and delta
interests led by the Center for Biodiversity following that EIR being
completed in 2010. And that litigation continues to this day and is now up
on appeal with the Court of Appeals. The trial court ruled in favor DWR and
the contractors and essentially all respects and now the Center for
Biodiversity is appealing those orders.
>> Thomas Holyoke: The Center for Biodiversity, what's their principal
complaint?
>> Earnest Conant: Their principal complaint was they think that the
transfer -- that the Monterey Amendments for various reasons and the
transfer of the Kern Water Bank were illegal. And secondly, that the EIR -that DWR, the second one that they prepared in 2010 was insufficient. Those

are their two primary complaints, which Judge Frawley in Sacramento, the
judge that this has been assigned to, is essential thrown out. So now it's
with the Court of Appeals.
>> Thomas Holyoke: Okay.
>> Earnest Conant: So at any rate, that -- you know, 20 years later
[laughter] we still have litigation going on with respect to the Monterey
Amendments which, for the most part, have been very successful. The urban
contractors have been able to effectuate water transfers if they wanted. The
Kern Water Bank got transferred and has been very successful. The
contractors generally get along pretty well. Urban and AG, now that
shortages are shared equally.
>> Thomas Holyoke: Was it difficult to get the urban contractors, including
the Metropolitan, to agree to that base of requirement? Because they would
have -- you're essentially requiring them to give up water it sounds like.
>> Earnest Conant: Yes. They came to realize that, you know, the basic
problem with the State Water Project is that everybody that signed up in the
'60s assumed that it was going to have a yield of, you know, 4.1 million
acre feet, approximately. And that during a seven year dry period there
would be a cumulative total of 100% shortage, in over the seven years. And
as it evolved, you know, we end up with 100% shortage in a single year like
last year because of the project not being completed. You know, originally
it was envisioned that the north coast streams would be part of State Water
Project. That got taken off the table in the '80s or the '70s because of the
– Wild and Scenic Rivers Act and then significant additional constraints on
the project, both the CVP and SWP in terms of operation and the Delta, both
in terms of additional flows required for water quality purposes to protect
the integrity of the Delta and also huge issues with endangered species in
the Delta, that I think you're very familiar with. So those have all
resulted in, you know, the yield of the State Water Project being, you know,
maybe half of what was originally envisioned. The DWR's official number is
that the reliability is, you know, 61% rather than 90 -- 95% that was
originally envisioned. So to answer your question in a roundabout way, DW -the urban contractors led by Metropolitan, you know, came -- in my judgment
came to realize that the AG first shortage and the assumptions that went
into it when the contracts were negotiated in 1961 were just not viable any
longer and that a change needed to be made. And they were willing to make
that change for some quid pro quo in terms of, you know, additional
opportunities for transfer of AG entitlement and additional flexibility in
terms of them managing their supplies, banking water -- when -- in urban
area -- in AG areas such as ours, additional flexibility and use of the
Southern California reservoirs. There were a number of components were part
of this package that provided, you know, real and tangible benefits to the
urban contractors and so they were willing to, you know, pass on the AG
first shortage language.
>> Thomas Holyoke: Okay.
>> Jim Provost: Go on about the Kern Water Bank for a little bit. Tell us
about your observations about how it's been operated by [inaudible]?
>> Thomas Holyoke: Actually before that could you say what a water bank is?

>> Earnest Conant: Okay. So a water bank is -- it gets used a lot and the
terminology, and I don't know if there's any agreed upon nomenclature as to
exactly what the terminology is, but you hear conjunctivae use. I think in
terms of conjunctive uses being what most of our water projects do, the idea
being -- to bring in surface water when it's available and rely upon
groundwater when it's not. That's the traditional conjunctive use project
that most of the central valley projects are based upon. Whether it be CVP,
the SWP, the Kings River, wherever. A kind of subset of that that's
developed is the concept of water banking. And water banking I think in
terms of where you're not just turning off pumps to store -- to, you know,
rejuvenate the basin for a dry year, but in addition you're actively storing
water in the underground for use at a later time either in your area or in
some other area. So examples of that would be in my area, Arvin Edison Water
Storage District and North Kern Water Storage District, 50 years ago built
projects that have spreading ponds, they recharge water in wet years and
then they have wells and they pull water out in dry years to deliver to
their farmers in a dry year like this. And so that's clearly a water bank,
but it's for a local use. Contrasted with, you can have a water bank for use
somewhere else. So for example, the Kern Water Bank has various participants
who store water and then they extract that in a dry year like this and use
it on their lands that are not located immediately adjacent necessarily to
the Kern Water Bank but somewhere else. So that would be an example of -another example of how a water bank works.
>> Thomas Holyoke: Okay. Now, Jim, what's your question?
>> Jim Provost: Oh, it's fine.
>> Earnest Conant: The Kern Water Bank ->> Jim Provost: Yeah, the Kern Water, I mean what specific activities have
happened?
>> Earnest Conant: Yeah, so the Kern Water Bank from the beginning had
various challenges. The principal one was that there was this 20,000 acres
that DWR bought from DW -- that DWR bought from Tenneco West, which was the
successor of the Kern County Land Company, all in one area along the Kern
River. So it was ideally located. You know, unique within the state of
California to have that much land in an alluvial basin where you could
easily recharge water. So in 1991 when we had the big drought DWR, all this
land, or most of it, was leased to farmers who were farming it. And in 1991,
because of the big drought, they basically terminated all the leases and
kicked the farmers off. And then, unfortunately, they didn't -- did not disk
it and, as a result, endangered critters moved in. And so then a couple
years later when they get around to let's go develop plans to build this
water bank we've been talking about, you know, the Fish and Wildlife Service
and Fish and Game say hey, wait a minute, this place is crawling with
endangered species. You can't just go build recharge ponds without getting a
series of permits and -- from us, the wildlife agencies. And at some point,
as I mentioned earlier, around 1993 they kind of threw up their hands. There
were also questions about because of the new constraints in the Delta, how
much water they would actually have to import to bank and; therefore,
whether this project still made sense for the state water project.
>> Thomas Holyoke: This was going to be SWP water?

>> Earnest Conant: It was going to be SWP water. So then when the potential
came up in 1994 for it to be transferred to local interests, you know, we
looked at it and the locals decided that well, we think we can make this
work. You know, we're closer to the situation. There were also a lot of
concerns expressed by the neighbors, neighboring districts that made DWR
very nervous. And so we thought that we could, you know, work through these
issues. It was a big gamble and there were six different participants in the
Kern Water Bank. Everyone in the county plus Dudley Ridge, Jim's client, had
all the AG contractors as a matter of fact, had an opportunity to
participate in the water bank. As it turned out only six districts in Kern
County plus Dudley Ridge, or including Dudley Ridge, elected to participate,
because it was a big risk. We didn't know in 1995 when we made this
commitment, because we had to -- as part of the -- I should have mentioned
this earlier as part of acquiring the Kern Water Bank we had to give up
45,000 acre feet of Table A entitlement. That was exchanged, 45,000 acre
feet in exchange for the 20,000 acres. So the districts like mine Wheeler
Ridge, Maricopa Water Storage District gave up over 10,000 acre feet Table A
betting that we would ultimately get the Kern Water Bank to work. It was a
big bet. But ultimately it worked out. We had, you know, we had a lot of
driven people to get this to happen. We had good political support from
people like Senator Costa, you know, making sure that the state agencies did
the right thing. And in 1997, so it's a couple years after we actually
closed the deal, we finally got the permits from the Fish and Wildlife
Service, the Feds, and the Department of Fish and Game, and then Governor
Wilson came down to do the final deed and sign the final documents that gave
us the permit so that we could actually go construct the facilities that
need to be constructed. And we did this through a habitat conservation plan
and tried to do it in an, you know, environmentally friendly manner. So the
facilities that we built, for the most part, we did not disturb the habitat.
We just built berms where we needed to. We don't routinely disk it like you
do with some Kern -- with some water banks. We graze it. So we have a lot of
measures in place to try to preserve the habitat that was there. We did, of
course, have to build a canal and put in, you know, various wells, about 100
wells, or not quite that many, and that's all provided for in this habitat
conservation plan. But it's a 75 year contract with the wildlife agencies
that allows the Kern Water Bank to operate.
>> Thomas Holyoke: And water is put into the water bank through ponding
basins?
>> Earnest Conant: Yeah, we have seven or 8,000 acres of the 20,000 acres
that is basins that in a wet year are filled and it can recharge, you know,
three or 400,000 acre feet in a year. And then in a dry year then we
extract, you know, the bank water. And in most years we can extract up to
maybe 200,000, but this year it's about 150 because the water table keeps
going down and our ability to withdraw water, you know, keeps decreasing
just because the water table is now lower.
>> Thomas Holyoke: And you said the number of irrigation districts -- or
water districts actually have part shares of that water or accounts in the
bank, so to speak?
>> Earnest Conant: Yes. Yes, so there are various members of the Kern Water
Bank, or partners as it were, and each one has a shared, depending on how
much entitlement, Table A entitlement they originally put up. So like my
client, Wheeler Ridge put up just over 10,000 acre feet, closer to 11,000,
so they're 24% of the Kern Water Bank. You know others, Jim's client, put up

whatever that was. They put up 40, they're 10% so they put up 4,500 acre
feet of Table A and got a 10% share of the Kern Water Bank. And so in a year
like this if we could extract 20,000 acre feet -- if we could extract in a
normal year 200,000 acre feet they could extract 20,000 acre feet of their
stored water and take it to Dudley Ridge to keep farms on the west side that
for the most part don't have groundwater in business.
>> Thomas Holyoke: Who manages the water bank?
>> Earnest Conant: The water bank is managed by -- it has -- it has its own
employees. You know, not a big staff, maybe half a dozen, a manager and
several people out in the field and engineer and, you know, that kind of
thing. It's a relatively small organization. But, you know, a lot of -- the
major work gets contracted out to contractors.
>> Thomas Holyoke: Okay, so and it's generally considered a successful
operation?
>> Earnest Conant: Yeah, very successfully. We frankly had some differences
of opinion with some neighbors -- neighboring districts as there was a
parallel lawsuit to the Center for Biodiversity lawsuit that I mentioned a
moment ago brought by two of the neighbors, Rosedale-Rio Bravo Water Storage
District and Buena Vista Water Storage District, and DWR is now doing a
supplemental EIR to address some of their concerns and we have a agreement
with them for interim operations. So we seem to be getting along better now
and have a protocol in place. One of the main concerns is that, you know,
there are a number of water banks in this area. It's not just the Kern Water
Bank and Pioneer Project, Rosedale-Rio Bravo has its own projects, own water
banking projects with various urban contractors and others and they have an
impact. And then not that far away there are a number of residents, some of
which are, you know, on relatively shallow wells. And so we're very
cognizant of that and we have this program in place now where if those folks
are being impacted we've all contributed a sack of money so that we can go
help them drill new wells or hook up to other domestic supplies to address
those issues.
>> Thomas Holyoke: So is water banking a model that deserves more
replication around the state?
>> Earnest Conant: You know, to some degree but the opportunities are
limited. You know, first of all you have to have an area where the ground is
permeable. That is not everywhere by a long stretch of the imagination, it's
rather unique. And then ideally you have to have an area that's near major
conveyance facilities. And in a wet year when you have large volumes of
water that you want to put in the bank you've got to have the ability to get
it there, you can't just have a little pipeline. So, you know, the Kern
Water Bank is uniquely located because it's between -- on the Kern River
between the Frank Kern Canal and the California aqueduct and we have various
canals kind of running between that we can get water to and from the Kern
Water Bank. So it's not situated -- it's a phenomena that you can't
replicate throughout the state, by any stretch of the imagination. But there
are other areas that it can be, and there are a number of agencies up and
down the state that are pursuing various programs. I don't think any as big
as the Kern Water Bank, but there are a number of agencies attempting to
pursue those kind of programs.

>> Thomas Holyoke: Okay. All right. And we're coming down to the end of the
list here. Anything else on water banking you want to talk about or?
>> Earnest Conant: Well the other thing I could mention, kind of alluded to
earlier when we were talking about the Monterey Amendments, is that the
urban agencies, in particular, have been very interested in being able to
bank water in wet years in areas outside of metro -- outside of the urban
areas. And so the first major program was between a Semi-Tropic Water
Storage District that we represent and the Metropolitan Water District of
Southern California. That deal was struck in -- initially the first phase
and actually before the Monterey Amendments in '94, and then the final
agreement in '95. As part of the Monterey Amendments, DWR and the other
contractors consented to districts like Metropolitan taking part of their
allocation and delivering it somewhere else to temporarily store it. And so
the Semi-Tropic program is different than the others I've described in that
it's an in lieu program. So their physical phenomena is that they don't
really have any significant areas where they could go with direct recharge
like the Kern Water Bank. There's a clay layer under most of the district,
so you can't recharge water and get it to the lower aquifer. So they have an
in lieu program, and how that works is that you develop facilities to
deliver this bank water coming from Metropolitan or whoever to farmers who
otherwise would pump groundwater. And to the extent that water is delivered
to a farmer who otherwise would pump groundwater, that water is deemed to be
banked in the underground. And so Semi-Tropic set up a system where they
have these contracts with Metropolitan and others to provide capital to
build and greatly expand their distribution system so that they could
deliver water from banking partners when the banking partners had water to
deliver. And then the same system then reverses itself, and generally offpeak that is when the farmers don't need their wells in the wintertime.
Their wells are used to extract the bank water and return it -- the system
reverses itself and returns to the California aqueduct. So that's how the
Semi-Tropic program works as an in lieu program. And Semi-Tropic has various
other banking partners after Metropolitan signed up in '94, and there was
Santa Clara Water Agency up in Silicon Valley folks, Alameda County, zone
seven of Alameda County, of San Diego, and a couple others that I’ve
forgotten, but various urban agencies throughout the state are part of the
Semi-Tropic Water Bank. The other major water bank that I've been involved
with is the Arvin Edison program which was consummated in 1997, shortly
after the Semi-Tropic program. And it's a direct recharge program. I had
mentioned earlier that Arvin Edison, you know, 50 years ago developed its
own banking program where they take high flow Friant Kern water, spread it
in a wet year, and then pump it out to supply their farmers in a dry year.
So the Metropolitan Arvin Edison program involved in expansion of their
existing program where Metropolitan paid for building new spreading ponds,
additional infrastructure including a direct connection to the California
aqueduct from Arvin Edison facilities, the water could be pumped back and
brought into Arvin Edison from the California aqueduct and additional wells.
And it works similar to Semi-Tropic program except the water is spread
directly through recharge ponds that Metropolitan brings in. And then when
it's returned again it comes off-peak but using Arvin Edison’s wells during
the wintertime when they're not needed for the farmers. And again the system
reverses and then takes water back to the California aqueduct to return the
water to Metropolitan that they temporarily loaned to Arvin Edison.
>> Thomas Holyoke: Now these -- from a lawyer's point of view, are these
difficult legal arrangements to put together?

>> Earnest Conant: Yeah, they're pretty complicated agreements. Made more
complicated probably than they need to be [laughter]. But the, you know,
interesting side note, if that's the kind of things you're looking for, we
had an Arvin Edison, the Semi-Tropic program we had the attorney from the
general counsel's office of Metropolitan and I had worked out this
agreement. We thought it was pretty good. It was maybe 30 or 40 pages long.
And one weekend the general counsel of Metropolitan happened to be in
Arizona. And three districts in Arizona had just declared bankruptcy because
they were in a dispute with the Bureau of Reclamation and they thought if
they went into bankruptcy they would get some additional leverage to get the
Bureau to do what they want them to do. So the general counsel came back and
asked its troops, well what do we do if Semi-Tropic goes bankrupt? So they
brought in O'Melveny and Myers, you know, a big high power firm from LA and
put on their thinking caps and they decided well, the way we'll solve this
problem is we'll put all the water that Semi-Tropic is holding in trust. We
will create this fictional trust so that the water is held not by SemiTropic, but by the Semi-Tropic trust. And if Semi-Tropic declares bankruptcy
then this trust will be outside of the purview of the bankruptcy court and
the bankruptcy court won't be able to take our water. Anyway, we all thought
it was kind of hilarious but if that's what it took to get the deal done, we
worked through it, and so the agreement ends up being, you know, 100 pages
full of all kind of formulas and trusts and stuff that's more difficult to
understand than our original 30 or 40 page agreement. And -- but it's ironic
though, the rest of the story, is that shortly after we got this done one of
their major constituency, Orange County, declares bankruptcy [laughter].
>> Thomas Holyoke: Their own backyard.
>> Earnest Conant: In their own backyard. Orange County itself wasn't a
contractor of Metropolitan so it really didn't matter. But it was kind of
ironic that that's where the next bankruptcy fell, the big one. So at any
rate, these banking programs from the standpoint of agricultural contractors
like I represent that have done these banking contracts with urban partners
and, you know, there's been a lot of apprehension by some of own folks and
then another folks looking at it. You know, how do you trust Metropolitan?
How do you do business with them? You know, I mean that was the mantra 20
years ago when we first started talking about this kind of thing. And I've
got to say that they've been very honest partners and we haven't had any
disputes with them, you know, that couldn't easily be resolved, not even
threats of litigation or anything like that. It's worked out pretty well.
You know, and the main benefits to the people I represent, the AG
contractors that do these partnerships with urban contractors are, you know,
number one they bring capital so that we can expand our systems. And when we
expand our systems, those systems are also available for bringing in own
water to help recharge the groundwater basin. And then secondly, we have a
temporary benefit in that when they store their water our water level is
that much higher, so we're pumping from a reduced depth when -- as their
water is stored here and everybody gets the benefit of that. And then third,
we make a little money off of them. That helps to offset cost.
>> Thomas Holyoke: So if it's a win-win situation is this something we might
see more of, you know, these partnerships with urban contractors?
>> Earnest Conant: Yeah, I mean, other districts within the state have done
these kind of things, not on the scale that Semi-Tropic and Arvin Edison
have, but Metropolitan does have other programs with other participants,
primarily in Kern County and, you know, they've done other types of programs

too, that provide other benefits with agricultural contractors, particularly
on the Colorado, you know, they have a fallowing program in Palos Verdes
irrigation district. They have a water savings program with Imperial
Irrigation District. So they've done deals with other agricultural
contractors. Their banking programs are principally in Kern County, that
being Semi-Tropic, Metropolitan, and another district, Kern Delta Water
District. But overall it's been a successful program. I think it's
benefited, you know, our clients and others similarly situated, has
benefited the urban partners. And, you know, as I said, so far everybody's
got along okay.
>> Thomas Holyoke: Let’s hope that's the case.
>> Earnest Conant: Hopefully it stays that way, at least until I retire
[laughter].
>> Thomas Holyoke: Okay, anything else you want to talk about?
>> Earnest Conant: Not unless you have any other questions.
>> Thomas Holyoke: No, I don't. Jim?
>> Jim Provost: No, you did an excellent job.
>> Thomas Holyoke: Thank you very much then.
>> Earnest Conant: Okay, good.

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