OID won’t shut off water for late payment

July 21--OAKDALE -- Farmers caught off guard by the Oakdale Irrigation District's new by-volume water billing schedule won't face delivery shut-offs this year for late payments, OID leaders said Wednesday in a tentative decision.

In other news, the OID board reviewed developments in a couple of ongoing lawsuits, including:

-- OID's request that a judge allow the district's fallowing program to resume. That would reverse another judge's order to halt the program until OID studies environmental consequences of selling freed-up Stanislaus River water to outside buyers.

-- OID intends to ask that plaintiffs in the fallowing case be forced to pay OID's legal expenses.

-- OID's insurance company won't pay to defend elected board members Linda Santos and Gail Altieri, who were sued by the three other board members in relation to the fallowing lawsuit.

-- The district's legal battles could hurt its bond ratings, affecting interest rates on money previously borrowed.

It's an unintended consequence, but it is a consequence.

OID General Manager Steve Knell, on bond ratings affected by lawsuits

OID has been planning since 2014 to charge farmers a volumetric fee reflecting how much water they use, in addition to per-parcel flat charges. Last year, the district sent customers mock bills reflecting what they might be charged when those rates would take effect.

That happened this season. When people began receiving real volumetric water bills, "all hell broke," said OID General Manager Steve Knell, whose staff was hammered by complaints, especially from farmers threatened with no more water deliveries unless they paid up.

Owners of 385 parcels fell in that category. That portion -- about 14 percent of customers -- is in line with the normal ratio of delinquent payments, but outcry was greater.

OID can't afford to bill annually after delivering water, as do the Modesto and Turlock irrigation districts, Knell said. He recommended staying with a plan to send three bills spaced throughout the irrigation season, but not shutting off water if someone doesn't pay right away.

"I think we've come up with a way to solve this without people getting their water turned off," board chairman Steve Webb said.

Under proposed rules, bills would become delinquent, and 10-percent late fees imposed, at year's end, and customers not paid up when the next irrigation season starts would get no water then. The board is expected to formally adopt that proposal at its Aug. 2 meeting.

OID's plan for volunteers to fallow some land in exchange for money from selling freed-up water skidded to a stop in late May when Stanislaus Superior Court Judge William Mayhew granted a preliminary injunction, as OID had not conducted environmental studies. But attorneys succeeded in having the case reassigned to another -- Judge Roger Beauchesne -- and OID wants him to reverse Mayhew's decision based on a technicality.

When a court issues an injunction without the required bond, as it did in this case, the party enjoined has the right to have it dissolved.

OID attorney Valerie Kincaid, in legal brief

Mayhew should have required that a bond be posted to cover OID's damages in case the district ends up winning the lawsuit, OID's attorneys argue in a new briefing.

That's nonsense, say opponents, because bonds almost never are imposed in other environmental cases throughout California. Also, OID failed to ask Mayhew to require a bond in any of its previous court papers or at three court hearings, plaintiffs contend.

OID's request "is the most recent in a string of legally baseless actions OID has taken in this case that appear calculated to frustrate (plaintiffs)," reads the document filed by attorney Osha Meserve, representing OID customers Robert Frobose and Louis Brichetto. Their lawsuit asks that OID pinpoint how shipping water elsewhere might affect groundwater levels here.

It was well within Judge Mayhew's discretion to issue a preliminary injunction without a bond in this CEQA case to uphold the public interest purpose of CEQA.

Osha Meserve, plaintiff's attorney, in legal brief

The district was surprised, Knell said in a report to the board, when Meserve earlier this month dropped accusations that OID illegally spent public money and that board member Gary Osmundson violated state law by signing up to idle some farmland, then voting to create the fallowing program. Unresolved are environmental differences, but OID ran up attorneys' fees preparing to defend the now-dropped portions of the lawsuit, Knell said.

The board majority created a spinoff from the fallowing case by successfully suing to keep Santos and Altieri out of closed-door strategy discussions and votes on the fallowing lawsuit. Their sworn statements had been used by Meserve to hurt the district, the board majority said.

We hereby demand that you cease and desist all direct communications with any members of the board of directors of OID.

OID attorneys Fred Silva and Kathy Monday, in a letter to attorney Osha Meserve

The women's legal bills won't be covered by OID's insurance provider, the Association of California Water Agencies Joint Powers Insurance Authority said in a letter to Santos and Altieri. The insurance policy addresses claims resulting from "a sudden or accidental occurrence which causes monetary damage" to someone, not lawsuits based on board members' conduct, the letter says.

Also, rancor associated with legal woes could cause jitters among OID's bond investors. "They don't like discord," Knell told the board.

Meanwhile, in his July newsletter to customers, Knell defended OID's practice of selling river water to outside buyers. Neighboring agencies -- including Oakdale, Riverbank, Modesto and the Modesto and Turlock irrigation districts -- apparently don't want to buy water, and others who do have no easy way to take it, Knell wrote.

Also, shipping water elsewhere keeps OID customers' prices at $28 per acre, a cost that could jump to $160 per acre without outside sales, Knell wrote. "Keeping water local makes for a nice sound bite but in reality it's difficult and complicated to do," he concluded.

A county water official forwarded the newsletter to members of the county's water advisory committees. Frobose countered with a similar mass email, saying, "If our underground water aquifers go dry, the true cost (of selling elsewhere) will be recognized as nothing but a fatal mistake."

County Supervisor Terry Withrow asked Frobose to refrain from using the email address list "as a personal vehicle," prompting a response from Brichetto -- a member of the county water committee -- who said the county had provided Knell a "political propaganda forum."

Garth Stapley: 209-578-2390

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