May 4, 2004 - From the July, 2003 issue

San Diego's Mike Madigan Offers An Informed Opinion On Imperial/Colorado Water Negotiations

The parties involved in the Colorado River/Imperial Irrigation District water negotiations are inching their way towards a deal. In order to shed light on the negotiations and provide an independent and expert analysis of the dealings, Metro Investment Report spoke with water policy veteran Mike Madigan, former Chairman of the Board of Directors of the San Diego County Water Authority and former Chairman of the California Water Commission.


Mike Madigan

Colorado water allocation negotiations involving the federal government, the state of California, the Imperial Irrigation District, Coachella and the Metropolitan Water District? What is at stake for each party?

Each of the parties is, to the best of their abilities, representing their self-interest. You have to sort through what those self interests are. When you look at the feds, the self-interest is the Colorado River, pressure from other states to get California to conform to 4.4 million acre-feet, concern about endangered species, storage behind the big dams and other issues of that nature. When you watch what the feds are doing, they are trying to protect those interests.

The state of California has its own set of interests. They include weaning California off of over use of the Colorado River, because they're getting pressure from other states. You've got a Metropolitan Water District board that sees itself as being the water supplier for Southern California. So, their self-interest is not only ensuring that Southern California has an adequate water supply-and I think that is their self interest-but they also want to continue in their role as Southern California's water supplier.

Coachella's interest has been, as long as I can remember, in shoring up the reliability of the water supply that they get through their third priority.

The San Diego County Water Authority has an interest in doing two things. Number one is improving the water supply situation for San Diego, and this 200,000 acre-feet represents an important way to do that. It also represents for San Diego not so much water and independence as some ability to have a water supply independent of MWD.

The Imperial Irrigation District is in a tremendous position to capitalize an asset by turning it into what is the commonly recognized medium of exchange in this country, and that's money. By utilizing conservation so that the water transfer doesn't have adverse economic consequences for the Valley and by taking the money for the excess water and using it for economic development, Imperial has an opportunity to combat the kinds of problems brought on by their current agricultural economy, such as low wages and high unemployment.

You could look at any of them and say, "they've done this really well," and, "they've done this badly," or "they haven't represented us as clearly as they should," or "they haven't communicated back to their constituencies the way they should." But, I think that they have all behaved in a way that reflects their self-interests.

A recent editorial in the San Diego Union Tribune asserts a motive for why the Metropolitan Water District is fighting the proposal on the table: "MWD President Ron Gastelum may argue that the deal somehow resembles energy deregulation or that its environmental impacts are too costly, or that it's an improper use of state water bonds. But, the real reason Gastelum doesn't want San Diego County buying Imperial Valley water may be that he thinks Los Angeles-based MWD can get that water and a lot more for free." How do you respond to that quote?

In California, the agricultural districts have the top priority for Colorado River water. Metropolitan has the next priority down from the agricultural districts. Certainly, to the extent that the Imperial Irrigation District and/or Coachella leave water in the river or do not use their full entitlement, then the next two entitlements belong to MWD. So, theoretically, if this water were conserved by the IID and left in the river, and Coachella didn't claim it, then that water would therefore be MWD's fourth or fifth priority-and it would be there for free.

Now, the question is, does the federal government have the ability to make the case that IID is wasting water? If IID did conserve, would Coachella step up and claim that water and use it? There are lots and lots of things that interfere. So, what San Diego attempted to do was say, "It is in our economic self interest, for purposes of reliability and what it might cost to develop the next increment of water someplace else, to pay you money for that water."

As a result, that third priority water transfers to San Diego County, which no longer has a priority of any meaningful status on the river. So sure, there is a Met argument that can be made in that regard. From the Metropolitan Water District's standpoint, is it a better thing for San Diego to be 90-percent dependent on MWD for their water supply? And, is it better for that water to flow for free to MWD on the assumption that it could? Or, in fact, is MWD better off with San Diego being somewhat less reliant on MWD water and more closely replicating the typical Met agency for financial purposes?

Is MWD a public body with one point of view which never changes. Hasn't MWD changed positions several times re the Colorado/IID deal? How are Met's decisions typically reached? Who among its members controls the agenda today, and who ought to control the agenda tomorrow?

In any organization where you have part-time boards and full-time staffs, the staff is going to play a very powerful role in the decision-making processes of that board. That's true whether it's MWD, or your local school district, or the suburban community city management.

There was a time at Met when the board members tended to stay on for very long periods of time. So, twenty years ago, there may have been more of a balance between the board and the staff than you have today, where a lot of the board members are newer and perhaps don't have the depth of experience. That's not to say that today's board members aren't intelligent, because they are, or that they're not representing their constituencies, because they do. But it's a fact of life that someone who spent twenty years on the board is likely to know more than somebody who spent three years there. Today, there certainly is a board leadership at Met, but the general a manager is a very important player in terms of the policy of the organization.

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So cut the Gordian knot re the allocation of scarce water for our readers, Mike. How, as Southern California adds another 6+ million people in the next twenty years, ought we divey up what's available?

It isn't easy. In some sense, if it was easy, it would have been done by now. And, it won't get any easier in the future as the population increases. This was an effort to use what western civilization has developed as sort of the common medium of exchange, and that would be money, to balance the scales. This isn't an attempt at the barter system. This is a deal in which some people will get water and other people get money for that water, and an attempt to satisfy other environmental concerns.

The IID deal, in something like its present structure, satisfies most, but not all, of the concerns. Even those that it satisfies, as is the case with most compromises, it doesn't satisfy in an overwhelmingly popular or beneficial kind of way. So you see that the IID people, I suspect, would really like more money, or they would like for it to be a shorter period of time. Met would really like for the water to run through them. The state would really prefer not to spend all of their bond money on the Salton Sea. The feds would really prefer that there was more conservation going on as a matter of course in the Imperial Valley because they're looking forward to the time when the population of Southern California is going to increase dramatically. The San Diego County Water Authority would have preferred a 75-year deal at the beginning, 300,000 acre-feet instead of 200,000 acre-feet, and probably that it be for less money. Coachella undoubtedly has their spin on that whole thing too.

The only party, it seems to me, that is not pretty well taken care of in this-and I say that because I don't have to run for re-election as a member of any board-is probably MWD. The problem for MWD is that this really does lessen the dependence, for some period of time, of San Diego on MWD. If your interest is being the water supplier, as opposed to the supplemental water supplier, then that's not moving in the right direction. Met's basic charter suggests that it's the supplemental water supplier. I would argue that Met will be better off and will have fewer arguments when all of the large agencies of MWD-including the SD County Water Authority-have more or less the same circumstances. That is, if the Met's agencies are dependent on Met for a significant share of the water, but not nearly all of the water.

The city of Los Angeles is somewhat dependent on MWD, but not entirely. But, as they have lost the ability to utilize Mono Lake, and as requirements continue to come down the line for using some of that water to supply the Owens Dry Lake, then L.A. tends to move towards the middle in terms of the MWD situation. This would move the SD County Water Authority, the second largest agency there, towards the middle as well.

It's almost like having a solar system where you have two very large planets out there circling around and destabilizing the situation. To the extent that those planets destabilize the political environment of Met, that doesn't bode well for the long-term health of MWD. So I think it's in Met's interest to encourage a situation where the SD County Water Authority more closely resembles most of the other large agencies in terms of their own water supply versus MWD, and in terms of base loading versus rolling on and rolling off. To the extent that MWD considers the long-term health of the situation, they are better off with the SD County Water Authority looking more like the other Met agencies.

If you were to be co-special envoy, along with former Speaker Hertzberg, for conveyning all the interested parties together, how would you move the negotiations to conclusion around such an agenda?

Fortunately, I haven't been asked. However, I would try to sort through that kind of an argument, that there is a very good and rational and responsible reason for MWD to want to see this kind of agreement in place. If that's the case, then you deal with the issues that MWD has that come out of that agreement. Right now, it's difficult because MWD sees things differently than the state, the feds, the San Diego Water Authority, and for most purposes, Coachella and IID.

Water policy, in many parts of the state, is better followed and more fully debated that it is in Los Angeles, where for more than half a century three independent sources of water have given the public a sense of security. Bureacracies have evolved to grapple with supply, reliability and quality. Do we need to better engage the larger civic community in California and in L.A. in this critically important issue?

That's hard. If you stop and think about the circumstances in which most people find themselves-the kid is sick, the job is looking a little shaky, the car is not doing well, the mortgage is due on the house-those are immediate problems that require people's immediate thought processes. So, the best thing that you can typically do, because you want to avoid the crisis that then precipitates the major public conversation, is that you have to go back to the underpinnings of the republic and think about why it is that the founding fathers established the republic to begin with. It's important to try to build a level of confidence by the quality of conversation and debate you have in the general public that is reflected by the public saying, "Yes, we've entrusted you with this, I understand the kind of conversation you are having and I trust that your bringing this thing to a rational conclusion." It is, at some level, a pretty fundamental exercise and it is why this country was organized the way it was way back when.

Speaking of how we've organized ourselves in this country, how would you characterize, in closing, what the voters have done to the republic of California through passage of initiatives, referenda, and reforms in the last twenty five years?

I am in terrible trouble on that subject right now because I was a part of a press conference the other day around here suggesting that, as a Republican against the recall, that that was not the best way to do business. I have taken to carrying around Madison's chapter 10 of the Federalist Papers in my pocket to explain to people why it is that I think that the recall, and for that matter the abuse of the initiative process, have in fact weakened the republic. At some level, the initiative process has led to this kind of crisis of decision making that we see in a lot of quarters where people who normally would be entrusted to make these decisions are afraid to make them. It results in a sort of paralysis, which is extremely unhealthy. In the immediate case of the recall, people who are in other states in this country and in other nations are in a position to make economic decisions for California. This is not advantageous for our state.

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