Government / Politics

Agricultural water price increase is not arbitrary, official says

Jeff Cattaneo, district manager of the county water district, explains water usage and costs

Robert Huenemann, one of five members of the board directors for the San Benito County Water District, has taken his concerns about water usage and costs public by posting his commentaries on Benitolink. On Dec. 30, 2015, Huenemann advised Benitolink readers that they could protest a 47 percent blue valve water rate increase and even offered a free protest form.

In previous commentaries, Huenemann made a number of claims that warned residents to “prepare to watch bills skyrocket as agribusiness continues to get cheap water.”

Benitolink recently talked by phone with Jeff Cattaneo, district manager of the water district, about Huenemann’s concerns, and the general state of the county’s water situation.

Cattaneo confirmed that the rate for agricultural water is, indeed, going to increase significantly, but he said it is not an arbitrary rise and is firmly based on the effects of three years of drought and no water allocation from the federal government for agricultural customers.

“The result is that we take what our fixed operating and maintenance costs are and we spread that over how many acre feet of water we get delivered to us,” he said. “So when there is a lack of water delivered because of droughts, the price has to go up.”

Cattaneo said that if prices don’t rise, the district would be forced to sell the water for less than the cost of delivering it, which it cannot do. As for the call to protest rate hikes, he said that is the normal way for residents to voice their concerns.

“About 18 years ago, the state passed a law because they decided that public utilities had too much say in what the rates that would be charged to their customers and that the customers didn’t have enough say,” he said. “So they came up with this process by which public utilities are required to put out a ballot to allow a protest for the rate increases.”

Cattaneo said if 50 percent plus one voters are against the increase, the utility cannot increase the rate. The problem with that, he said, is whether the rate is justified or not, it’s necessary for the public utility to continue to operate and be fiscally sound, even though the customers do have the option to say they don’t want to pay the increase.

“Then you’re stuck with a situation where you’re not allowed by law to increase your rates, but it’s costing you more money than you’re recovering from the rate structure,” he said. “That’s the process that Mr. Huenemann is referring to in protesting the rate. He would like people to protest the rate so the district can’t go forward with the increase we need, and, in essence, we would be forced into a situation where either we’re not going to sell water because we can’t afford to or we’re forced to sell it at a loss, in which case all the rest of the taxpayers have to pay for it.”

Cattaneo said he is unsure of why Huenemann, who declined to comment when contacted by BenitoLink, has taken to social media to encourage rate payers to protest. He said that he offered to sit down with Huenemann to discuss the details and logic behind the rate structure, but Huenemann declined. Cattaneo said that he is at a loss as to why Huenemann’s would take such actions.

Cattaneo deflected claims Huenemann made in last year’s commentary, headlined, “Possible loan default could raise water rates,” that included a number of points that seemed to indicate unfair water usage by agriculture and payments by cities, by saying: “Those are things he gets off the Internet and different places, but you have to be careful and keep them in context. It’s not that it is not true, but you have to keep in in context on how the information is being used.”

Specifically, Huenemann stated that agribusiness uses 80 percent of the county water, while urban water users pay 38 percent more for “blue valve” (federal) water than agribusiness, which is true.

“This is primarily an agriculture county,” Cattaneo clarified, comparing San Benito County to Santa Clara or others that do not have significant agriculture. “There municipalities are going to use most of the water. It’s as if he’s demonizing that we’re an agricultural county. It’s just a fact.”

Cattaneo went on to explain the historical significance in the difference in rate structures between municipalities and agriculture, where cities typically pay more.

“There’s reclamation law that there is a difference in the pricing structure that basically subsidizes agriculture by the federal government,” he said. “Today, a lot of people see a problem with that, but when those laws were put in place it was because the Department of Interior wanted to support agriculture in the 11 western states. That’s how the Bureau of Reclamation came about and started all those water projects, a majority of which were to help develop agriculture.”

He said the federal government subsidizes agriculture throughout the country and is likely to continue doing so.

“Whether that’s right or wrong, that’s what the voters have chosen to approve,” Cattaneo said. “It’s not the district’s choice to make that distinction. It’s just the way the reclamation law is written. Our own district act, which was drawn up in 1953, is much the same. It states that the rate for agricultural water can be no more than one third of the rate of the M&I (municipal and industrial) water. We, as a water district and board of directors, have to live with it.”

Cattaneo said the board of directors is committed with getting the adjusting the agriculture rate over time to be more in line with the one-third M&I rate. He said this has to happen because it will be more costly to manage the ground water basin.

“The Sustainable Groundwater Management Act ( that the district will have to implement for all the basins in the county is coming up in 2017,” he said. “All of those state mandates will come with costs associated with them. We’ve started that process, but we have a year before we have to technically begin that process.”

Cattaneo felt that the most unsupportable claim in Huenemann’s July 1, 2015 Benitolink commentary, was that, “On July 7, the board will hold a special meeting to consider defaulting on the $100 million loan from the federal government…”

“He took something that the board was considering and blew it out of proportion,” Cattaneo said. “We were never going to default on the loan.”

Cattaneo said there is a provision within the contract with the Bureau of Reclamation that states during extreme periods of stress the district can request temporary relief from its payments.

“At that time we were in our second year of receiving no agricultural water for which we make half of the payments for everything that happens within this district. We were considering going to the Bureau of Reclamation to make that request to get some relief for the next year or two until they start to deliver us some water that would supply a revenue stream. We discussed it, but decided not to do that. It was not a default. It was a provision within our contract.”

El Nino will not break drought

At a water forum held last August, Cattaneo cautioned those attending that they should not count on El Nino conditions to relieve the state’s four-year drought. Even though the area has recently experienced significantly more rainfall as the forward fringes of El Nino began to cross the state, he said nothing has changed.

“The water system in California is so far behind, and even though we’ve had some rain, there will be no new water allocated to any of the federal customers until after March 1, from San Luis Reservoir,” he said. “We’re depending on the Bureau of Reclamation’s ability to pump enough water into San Luis Reservoir to make up for the deficit that they borrowed against last year in order to make their obligations to higher priority contractors that get water before we do.”

Water is all about politics

Cattaneo explained that higher priority contractors include refuges, environmental needs and the San Joaquin River Exchange that takes water off the San Joaquin River to deliver it to the Bakersfield and Kern area. In doing this, the bureau deprived landowners along the San Joaquin River of the natural flows that would occur in order to store the water behind dams.

“So, the water that comes from north to south through the federal system in the delta would replace that water,” he said. “They have a higher priority to any water than we do.”


John Chadwell

John Chadwell is a freelance photojournalist with additional experience as a copywriter, ghostwriter, scriptwriter, and novelist. He is a former U.S. Navy Combat Photojournalist and is an award-winning writer, having worked for magazine, newspapers, radio and television. He has a BA in Journalism and Mass Communications from Chapman University and graduate studies at USC Cinema School. John worked as a scriptwriting consultant, and his own script, "God's Club," was produced and released in 2016. He has also written eight novels, ranging from science fiction to true crime, which are sold on Amazon. To contact John Chadwell, send an email to: [email protected]