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In The News

Water is hurdle for Saltworks developer
 
By Kelly Zito, Chronicle, 7/28/11

Supplying a 12,000-home development in Redwood City with drinking water from Kern County sounds complicated enough.

Now, one of the agencies that could play a key role in the complex transfer of water from the Central Valley to the Peninsula is considering a major policy change that would make it even more difficult for the developer of the proposed Saltworks project to secure water for the homes it plans to build.

Specifically, the board of the Santa Clara Valley Water District is considering changing its policy on water deals involving large-scale real estate developments.

That, after the Saltworks developer, DMB Associates, said it would rely on an intricate series of water transactions on paper to “wheel” more than 1 billion gallons of water annually from Kern County to the new Redwood City neighborhood.

At issue is a 2009 one-time­ only transfer of water that the developer made from Kern County to the Santa Clara Valley Water District to help boost the agency’s supplies.

That deal did not require board approval, and to some board members the move set a dangerous precedent. It could mean that future water deals — for example, long-term deals like the one sought by Saltworks — could be done without board approval and with little public scrutiny.

“DMB is using this ability to move water as a way of saying they have access to a long-term supply (for Saltworks),” said water district board member Linda LeZotte, who also voiced her concerns at a June 28 board meeting. “And I believe we can’t get in the middle of such a controversial or political fight over a development. It amounts to inadvertent, tacit approval.”

LeZotte hopes to change the approval process so that similar water deals will require a vote by the seven-member board.

It may sound like legal minutiae, but the rules governing water transfers are under increasing scrutiny in a state where most of the water supply originates in the north and most of the population resides in the south. It also raises significant questions about a housing development already unpopular with environmentalists who say the 1,400-acre swath of former Cargill salt ponds should be restored to a tidal marsh.

For members of Save the Bay, a group that advocates shoreline restoration, the water board’s reluctance to get involved with Saltworks shows that the plan is fundamentally flawed.

“It’s apparent DMB doesn’t have a credible water supply for this massive, destructive bay fill development — it’s all smoke and mirrors,” said Stephen Knight, conservation director with the group.

To understand the connection between Redwood City, water and Kern County, one must start with a California law that requires developers of 500 homes or more to demonstrate a “reliable water supply.” Because Redwood City’s water supply is already maxed out, an early draft of the Saltworks plan called for pumping water from below ground. In 2009, however, DMB and cosponsor Cargill changed course and said they could supply the new housing tract with above-ground water it had purchased from the Nickel Family LLC, a Bakersfield farming operation.

The water wouldn’t actually flow through a 300-mile-long pipeline between Bakersfield and Redwood City. Rather, delivery would rely on a set of elaborate agreements among several water utilities to adjust the amount of water they take from various sources. One of the “middle men” would have to be a customer of both the State Water Project — which supplies the Nickel operation — and the San Francisco Public Utilities Commission, which supplies Redwood City.

That middle man would take additional water from the State Water Project; in turn, the SFPUC would funnel the “extra” water in its system to Saltworks in Redwood City.

There are only a few candidates that fit the bill; and with deliveries to 1.8 million people, the Santa Clara Valley Water District is the largest. Another potential intermediary is the Alameda County Water District.

Even with the water board’s recent concerns about its role in the water-transfer scheme, Saltworks backers are convinced they have the proper mechanisms in place.

The Santa Clara Valley Water District “is one of many ways we can get water to Redwood City,” said Saltworks spokesman Pete Hillan. “It’s premature to say exactly how it will get done. But we’re confident these kinds of transfers happen on a regular basis in California, and it will happen on our site.”

 

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