On September 15, 2015, Westlands Water District (“Westlands”) and the U.S. Department of Justice executed an agreement to settle the long-standing drainage lawsuit between the district and the federal government.
The drainage litigation came from the U.S. Bureau of Reclamation’s (“Reclamation”) failure to construct agricultural drainage facilities and provide drainage service as required under the 1960 San Luis Act, which authorized construction of the San Luis Unit of the Central Valley Project. In 2000, the Ninth Circuit Court of Appeals ordered Reclamation to provide drainage service to lands in the San Luis Unit. Reclamation signed a Record of Decision in 2007 selecting a drainage plan with an estimated cost of $2.6 billion and began implementing the plan on a portion of lands in Westlands in 2010. Reclamation now estimates that costs are $3.5 billion and that only about $513 million in authorized funding remains. In late 2011, landowners in Westlands filed a class action suit claiming that the failure to provide drainage service constitutes a taking of their lands; and Westlands followed a few months later with a breach of contract case.
The takings case and the breach of contract case are both pending in court. Under the settlement agreement the parties agree to stipulate to the dismissal of Westlands’ breach of contract case. They also agree to cooperate in good faith to develop a settlement to the landowners’ takings case, which would include Westlands agreeing to pay compensation to the landowners. Westlands would also indemnify Reclamation for any other claims stemming from the failure to provide drainage service to the district.
The settlement would also resolve the drainage issue by assigning legal responsibility for the management of drainage water to the district. While specific strategies for managing drainage will vary based on location needs and conditions, alternatives include land retirement, groundwater management, source control, reuse projects, treatment of drain water, and salt disposal.
Westlands will also permanently retire at least 100,000 acres from production and convert the land to environmentally-friendly uses, such as management of drain water, renewable energy projects or upland habitat restoration. The district’s CVP contract deliveries would be capped at 75% of its contract amount—so deliveries would be capped at 895,000 AF, instead of the contract amount of 1.193 million AF; and Westlands would be required to wheel CVP water that Reclamation makes available to the Lemoore Naval Air Station.
In return, Westlands would be relieved of its existing CVP repayment obligation, estimated at $375 million, and will convert the district’s water service contract into a repayment contract. As a “paid out” contractor, the repayment contract becomes a permanent right to the specified volume of CVP water. However, the United States retains the right to cease water deliveries if Westlands fails to fulfill its obligations to manage drainage water in its service area.
Upon execution of the repayment contract, the United States will transfer to Westlands certain facilities, equipment and real property—the portion of the San Luis Canal System within the district, the Mendota Pool System, the Pleasant Valley System, the portion of the San Luis Drain within the district, the Tranquility Field Office and the Huron Field Office.
The agreement was reviewed extensively by the Department of Justice, Department of the Interior and Westlands, but Congressional approval is still required before it can become effective.
Written by Marta L. Weismann