An obscure water agency that owns no pipes and delivers no water may be able to stymie the state's grand plan for a canal to carry water around the Delta to Southern California.

The North Delta Water Agency is made up of Delta landowners, farmers mostly, who get their irrigation water directly from the Sacramento River or its tributaries.

Now the agency is asking those landowners to pay higher taxes. The reason: It may need to mount a legal defense against the canal plan.

The little-known agency occupies a unique niche in California's water hierarchy. It exists exclusively to monitor and defend a powerful legal contract it holds with the state Department of Water Resources.

Signed 30 years ago, the contract forbids the state from managing water in the Sacramento-San Joaquin Delta in ways that harm the agency, whose landowners depend on fresh water to grow food on Delta islands. Too much water diverted from the Delta would cause saltwater to flow in from San Francisco Bay, hurting crop production.

The contract is only four pages long. But it has become a vital cog in statewide water supply planning, because its terms could block a canal diverting Delta water from the heart of the agency's turf.

"Because of all the issues and stress on water in the Delta, I think it's a natural to be challenged," confirmed Stuart Somach, a prominent Sacramento water attorney.

The contract won the North Delta Water Agency a seat at negotiations over the canal – a process called the Bay Delta Conservation Plan. It is the only local government entity on the steering committee for the plan, which is largely financed by Southern California water interests.

The agency anticipates a fever to build the canal will result in legal and technical challenges to its contract. Hence the need for a defense fund.

"The political and economic pressures right now are intense," said Melinda Terry, the water agency's manager and one of only two employees. "We need to be financially in a position to do any legal defense."

The agency encompasses 380,000 acres, or fully half the land area in the Delta. About 83 percent of parcels affected by the assessment are agricultural, though the agency includes a large chunk of West Sacramento.

At $1.80 per acre, the annual assessment hasn't changed in 14 years. An $8 minimum applies to residential and commercial lots.

The proposed new assessment ranges from $3.08 per acre to $7.67, based on a formula that depends largely on the type of water right each property owner holds.

Most residential and commercial taxpayers would not be affected, because the minimum assessment would remain at $8 a year.

The additional assessment is also needed to cover an annual payment to the state required by the contract. Now $370,000, the payment increases every five years. Next year it hits $460,000, Terry said, then $575,000 in 2017.

The assessment now draws $535,000 annually, so in a few years it won't cover agency costs, Terry said.

The new assessment, if approved, would raise $1.2 million.

The North Delta Water Agency is holding a public forum to discuss the proposed assessment at 6:30 p.m. Tuesday at the Courtland Auditorium, 146 Primasing Ave., in Courtland.

The assessment vote will be conducted by mail. Ballots were sent to affected property owners last week and must be returned by April 20. The agency's five-member board will announce results May 4.

Most Delta farmers understand the stakes.

"To keep ahead of the water grabbers, it's probably a pretty good buy," said Gene Wiseman, a retired pear farmer on Grand Island, near Walnut Grove. "I'm not one of these anti-tax nuts, because taxes properly handled are how we get things done."

Plans for a Delta canal remain in draft form. The state is coordinating the planning effort and would likely be a primary sponsor if it is built.

Preliminary designs include five massive intakes along the Sacramento River south of Freeport. The size and operational rules will determine whether the state can honor its contract with the North Delta Water Agency.

The main project sponsors have done computer modeling to determine effects on Delta salinity. Terry has repeatedly asked for the data so the agency can conduct its own study. She says these requests have been ignored.

The agency's contract terms actually allow it to obtain a court injunction to shut down the state's massive Delta water diversion pumps if its water quality is harmed, said George Basye, the attorney who negotiated the contract for the agency.

Though the agency has never exercised this contract term, it nags at the canal negotiations like a bee sting.

"Whatever is drawn off (by a canal), they've got to meet the assurances in the North Delta contract," said Basye, who is now retired. "For somebody to pay a few dollars for the protection of this contract is a bargain."

The contract was signed in 1981 during the state's last attempt to build a Delta canal. North Delta water users needed an assurance their supplies would be protected, and the state was eager to neutralize a potential foe.

Voters defeated that diversion project, then known as the peripheral canal, in a statewide vote in 1982.

The contract, however, is perpetual. The only term open to revision – every 40 years – is the size of the agency's annual payment to the state.

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Call The Bee's Matt Weiser, (916) 321-1264. Follow him on Twitter @matt_weiser.

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