Monthly Archives: August 2011

A hiatus.

Forgive me, friends. I will be back, but not for a bit. Thank you for sticking with me.

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ACWA loves other people’s money.

Principle 3 of ACWA’s comments on Financing the Delta Plan is to broaden the base, and see if we can’t get some of the other infrastructure users to shell out a little.

So, rather than placing much of the burden for financing theplan on water users, the Delta Plan should show how a sustainable Delta benefits users of highways, railways, energy transmission facilities, agriculture and other economic sectors, and how these value centers should play an appropriate part in the overall finance plan.

Sure, I suppose, although I can’t imagine ACWA would be pleased if all those other infrastructure needs started looking for ways to poach from water funds.

Principle 4 makes the case that as much of the Delta Plan as possible should be paid for out of the general fund, unless you can really pin down a narrow beneficiary getting a specific benefit.

Fundamental to the definition of “beneficiaries” is the concept that the public as a whole is a beneficiary of many values that will be provided by the Delta Plan. It is clear that substantial state general funds and program funds, as well as a variety of federal funding sources must be brought to the table to finance these public benefits.

Fine. This is even true. But it is a very silly distinction. The following three terms all refer to the same 39 million Californians: 1. water users, 2. taxpayers, 3. beneficiaries of a restored Delta. I don’t see how a water user fee on every household in California, which ACWA adamantly opposes, is different from a tax that would feed into the general fund, which is what “beneficiaries” should pay? I don’t understand the fetish for very carefully parting those out and assigning costs by fine gradations of value received. It is worth having conversations about which is the cheapest to administer, and which is most vulnerable to plunder if the prison system needs more money, and what message the different fees send. Those are interesting conversations. Parsing gradations of benefits and allocating costs accordingly sounds horrible.

Principle 5. Dude. I don’t know anyone who thinks the bond will pass.

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Why does ACWA hate democracy?

ACWA testified before the Delta Stewardship Council last week; their written testimony is here. They reiterate their position that the Delta plan should run on kumbaya, or maybe teaching the world to sing, but definitely not regulation. I take issue with their Principle 1.

Principle 1: Create Value
The fundamental principle of the financing strategy must be to create value for those who are expected to provide the funds. This depends on completing a Delta Plan that clearly describes the projects and management practices to be financed, and that creates value from the perspective of those providing the funds. Value cannot be dictated by the state or other governmental entity. [emphasis in the original]

This is patent nonsense. I’m sure they feel this way, but dictating value is the primary function of a representative democracy. That is the very thing an elected government is supposed to do: decide what the voters think is valuable through a series of contests and dictate that to their subsidiary entities by laws. (Worse, here in California, the voters can do that directly through the referendums.) Saying “value can’t be dictated by the state” is is like saying that “value cannot be dictated by a district’s Board of Directors” when that is single most important thing the Board of Directors should do, as elected representatives of the people of the district.

Water agencies may fear the specter of oppressive state governance, as embodied in the Delta Stewardship Council*. But frankly, the local v. state distinction isn’t as strong and pure as ACWA’s principles suggest. Water agencies themselves are creations of the state legislature, although that was long enough ago that they’ve forgotten their origins and gotten uppity. So is the Delta Stewardship Council. If the Legislature wants one of its creations to manage its other creations to accomplish co-equal goals, that is wholly right and appropriate for the Legislature to decide. If it wrong, or the DSC tells agencies that the wrong things are valuable, the voters can tell them so.

My guess is that ACWA is really driving at something like “Look, if we’re going to provide the funds for this, we want to see positive returns on investment within our agency boundaries. We aren’t looking to subsidize a whole bunch of activities that don’t return money or water to us.” This is understandable from a narrow point of view, which is the view that any jurisdiction would naturally take. Again, though, it is the very function of the larger governing entity to look at the whole and consider what needs to be done for the whole, especially the things that have fallen between jurisdictional cracks.

I get that there’s a lot of rhetoric out there about place-based this and Regional that, and local knowledge and state incompetence. All this de-legitimizes the State. But saying that the “Value cannot be dictated by the state or other governmental entity” is to reject the very concept of representative democracy. In a representative democracy, that is what the State does.

 

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Meant to write about this earlier.

I quite enjoyed Mr. Carter’s compilation of the annual pay of the top employees at Westlands Water District. I wasn’t too surprised. I agreed with Mr. Kurtz in the comments, that the managers are being paid market scale for their political skills and connections. Fine. I was mostly interested that the growers in the district are willing and able to bear the cost.

Assuming 570,000 irrigated acres in the district:

Tom Birmingham alone costs $0.60 per acre every year.
Jason Peltier alone costs $0.30 per acre every year.
The ten managerial positions mentioned by Lloyd Carter cost $3.10 per acre every year.

When LAO and Professor Howitt posit a public goods or user fee for agricultural water, they suggest imposing a per acre fee. Prof. Howitt suggests the laughably low fee of $2 per irrigated acre. Westlands growers, at least, are willing to pay more than that to have a powerful water district.

I couldn’t find a cost for providing shade to farmworkers, on any scale. But if I ever do, I’ll have something to compare it to.

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If you build for the peak, most of the time you’ll have excess capacity.

Saw this in Matt Weiser’s story on farms getting surplus water this year:

The abundant water has dramatically changed the fortunes of the San Joaquin Valley farm economy.

Shawn Coburn, a farmer near Firebaugh, planted processing tomatoes this year on 500 acres that had been fallowed the last two years due to water shortages.

This will yield about 40,000 tons of a relatively high-value crop, which also required a substantial investment on his part, including the purchase of a new tractor and harvesting equipment.

“In essence, it’s another $2 million that I’m going to spend (on equipment) that I wouldn’t spend if I didn’t have the water,” said Coburn, who also grows almonds and wine grapes. “It’s definitely a year where it’s pretty easy to convince us that water equals prosperity, and not just for the farmer but the overall farm economy.”

I’m sure that’s what Mr. Coburn said, but I don’t think it is true. I suspect Mr. Coburn said that to the nice reporter to help bolster the argument that more water equals more economic activity in the San Joaquin Valley. Maybe he needed a new tractor and harvester this year anyway, and the tomatoes helped. But if Mr. Coburn bought a new tractor and harvester to support his most marginal 500 acres of land, he is so fucking stupid he deserves to lose his farm. Mr. Coburn knows from the past two years that he doesn’t get water for that acreage every year. How many wet years does he need to amortize $2M worth of equipment on 500 acres? Right now he’s burdened those 500 acres with $4,000 per acre worth of machinery, because in the wettest year in recent memory, he got some surplus water? I’d worry about that grower, except that I don’t believe the explanation he gave. It was just a political talking point.

This is the danger of setting the expectation that the San Joaquin Valley’s economy should be size it is in freakishly wet years. Most years won’t be freakishly wet, and in the average and dry years, there isn’t water for those 500 acres. Growers shouldn’t buy machinery for them; picking in those fields gives an occasional extra jobs, not reliable ones every year. It it great for farmers and farmworkers to get the occasional boost of a very wet year. But that year doesn’t instantly peg the new baseline, compared to which everything is an economic contraction.

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