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Southern California water agency signs $175 million deal to buy Delta islands

Delta residents fear Metropolitan's island purchase is 'water grab'

The Metropolitan Water District of Southern California is spending $175 million to buy five islands in the Sacramento-San Joaquin Delta. Residents say they're concerned.
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The Metropolitan Water District of Southern California is spending $175 million to buy five islands in the Sacramento-San Joaquin Delta. Residents say they're concerned.

Already viewed with suspicion and hostility in the north state water community, the powerful Metropolitan Water District of Southern California is broadening its reach by purchasing $175 million worth of real estate in the very hub of California’s water delivery network: the Sacramento-San Joaquin Delta.

Metropolitan said Monday it has signed a 103-page contract to buy five agricultural Delta islands from Delta Wetlands Properties, a company controlled by Swiss financial services conglomerate Zurich Insurance Group. It represents the most concrete step to date in a controversial deal that has been in the works since fall.

The purchase, which has been approved by Metropolitan’s board of directors, will give the agency a vital asset in the ongoing skirmishes over California’s water as the state struggles to emerge from a four-year drought. The Delta is the estuary through which the State Water Project and the federal government’s Central Valley Project pump billions of gallons of Sacramento Valley water each year to the farmlands of the San Joaquin Valley and the urban residents of Southern California.

Metropolitan has parachuted into enemy territory. Despite denials from Metropolitan, Delta interests have said the south state agency would use the property to execute a “water grab.” George Hartmann, a lawyer for Delta landowners, said he’s prepared to sue if Metropolitan doesn’t honor a slew of land-use restrictions approved by Zurich in 2013.

“It may not be comfortable to have your opponent owning the land next door, but that’s what it is,” Hartmann said.

Even as it’s agreed to make such a hefty investment, Metropolitan still hasn’t finalized its plans for the islands, said Steve Arakawa, the agency’s director of Bay Delta initiatives. It might use at least one of the islands to store dirt and construction equipment for California WaterFix, Gov. Jerry Brown’s controversial $15.5 billion plan to re-engineer the Delta’s plumbing system by building a pair of underground tunnels. Metropolitan is a leading proponent of the tunnels, which are designed to improve the flow of water to the south state.

“We have some good business concepts,” Arakawa said.

The big Southern California agency also is formulating plans to restore some of the islands’ wildlife habitat, on the theory that anything that helps the Delta’s ragged ecosystem will improve the lives of the estuary’s fish and enable the pump operators to ship water more reliably. “Enlightened self interest,” is how Metropolitan General Manager Jeff Kightlinger has described it.

Whatever Metropolitan’s intentions, the land purchase isn’t sitting well with some Delta landowners and Northern California officials, many of whom fear the agency will use the properties to help itself to more water from the Sacramento Valley.

With a $1.8 billion annual budget, Metropolitan has shown the knack for procuring water from all corners of the state. Since 2005 Metropolitan has spent millions of dollars a year paying farmers in the Palo Verde Valley, near the Arizona border, to fallow their land and ship Colorado River water they control to Metropolitan. Rural Californians often invoke the city of Los Angeles’ ability to wrestle water away from the Owens Valley in 1913, a move that was fictionalized in the movie “Chinatown.”

For their part, Delta residents already blame Metropolitan for many of the Delta’s environmental ills, including the alarming drop in fish population, and are skeptical about having the Los Angeles agency owning land in the neighborhood.

“Met is one of the actors that’s responsible for the current destruction and degradation of the Delta ecosystem, through too many years of pumping,” said Hartmann. “They’ve killed a lot of fish....They claim to care about the Delta, but I don’t see how they can get anybody to believe that.”

The suspicions ran deep at Rosa’s at Tower Park, a riverside pizzeria near Bouldin Island, one of the properties being purchased. Melvin Love, who lives on a houseboat nearby, said he worries about the possibility of more water moving south.

“I think the water should stay with the land, it shouldn’t be shipped out,” he said.

Hartmann said he would try to block the deal if Metropolitan doesn’t explicitly agree to honor a lengthy series of legal settlements Zurich Insurance made in 2013 with San Joaquin County and a host of landowner groups in the Delta. There’s no such agreement in Metropolitan’s purchase contract, he said.

Zurich bought Delta Wetlands 20 years ago with the notion of converting the islands, some of which sit below sea level, into giant reservoirs that would store water in wet years and ship it to Southern California when supplies run low. The plan fizzled amid opposition from neighboring Delta landowners and elected officials, and the properties have remained agricultural.

Metropolitan officials said they won’t use the islands as reservoirs. Because of that, the agency believes it isn’t governed by the 2013 settlements made by Zurich, according to Arakawa.

The 2013 settlement put limits on how the Delta islands can be used. Among other things, Hartmann said, the settlement might prohibit Metropolitan from storing “hundreds of thousands and millions of cubic feet” of soil that would get excavated in order to build Brown’s tunnels.

The tunnels would divert a big portion of the Sacramento River’s flow near Courtland and send it about 40 miles south to the state and federal pumping stations near Tracy. Brown administration officials said the diversion would remedy one of the major problems caused by the pumps: They are so powerful they literally can reverse the natural flow in a crucial part of the Delta, killing fish by drawing them toward predators and into the pumps themselves.

Fish problems, and other woes, occasionally force the pumps to reduce or shut down operations. The pumps have been throttled back again in recent weeks to safeguard the Delta smelt, steelhead and other species, to the considerable irritation of water agencies south of the Delta.

The Delta tunnels plan has sparked protests from Delta landowners and Northern California elected officials. The project appeared to hit another hiccup Monday. The U.S. Interior Department’s inspector general said it will “conduct a review” into allegations lodged by a group called Public Employees for Environmental Responsibility, which contends the state and federal governments improperly diverted millions of dollars from a habitat restoration project and used the money for environmental studies on the tunnels.

Spokesmen for the federal Bureau of Reclamation and the California Natural Resources Agency said they will cooperate with the review, but declined further comment.

The five islands Metropolitan is buying– Bouldin, Bacon Island, Webb Tract, most of Holland Tract and a small slice of Chipps Island – cover a total of 20,000 acres in San Joaquin, Contra Costa and Solano counties.

Metropolitan previously discussed buying the islands in partnership with a group of agricultural water agencies at the southern end of the San Joaquin Valley. Kightlinger said recently that Metropolitan continues to talk with those agencies, but the purchase agreement released Monday lists only Metropolitan as the purchaser.

Dale Kasler: 916-321-1066, @dakasler

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