Westlands Water Service Contract To Pay Applicable Charges

Westlands Water District

Westlands Water Service Contract To Pay Applicable Charges

February 28, 2020

Statement from Thomas Birmingham, General Manager of Westlands Water District, on the Execution of the District’s Repayment Contract

Today,  Westlands Water District and the Bureau of Reclamation signed Irrigation and M&I Contract No. 14-06-200-495A-LTR1-P, which converted Westlands’ water service contract to a repayment contract, which will remain in effect so long as the Westlands pays applicable charges, consistent with section 9(d) of the Reclamation Act of August 4, 1939. 
Westlands was one of more than 75 water agencies that contract with the United States for the delivery of water service from the Central Valley Project that elected to convert their water service contract to repayment contracts pursuant to section 4011 of the Water Infrastructure Improvements for the Nation Act. 
The effective date of Westlands repayment contract will be June 1, 2020. Prior to that date, Westlands will continue to receive water under an interim renewal contract.
 
When President Barack Obama signed the WIIN Act in 2016, it was with the express intent of improving the nation’s water infrastructure, especially in the western United States. Section 4011 (a)(1) of Subtitle J of the Act provides that the Secretary of the Interior shall convert water service contracts to repayment contracts at the request of any existing water service contractor.
 
Section 4011 was included in the WIIN Act to create a source of money that the Bureau of Reclamation could use to construct water storage projects around the west. It was intended by the Act’s co-author, Senator Dianne Feinstein, to help California “prepare for [that] future while providing us with access to more water now.” When President Obama signed the bill into law, he stated that, “This important partnership has helped us achieve a careful balance based on existing state and federal law.”
 
Converting “temporary” water service contracts to “permanent” repayment contracts is not uncommon. In fact, an underlying principle of federal Reclamation law — that water users who have repaid the construction costs of a project would have a permanent right to the use of water developed by a project — has been reaffirmed by Congress multiple times since it was first laid out in the Reclamation Act of 1902.
In the Central Valley Project, the San Joaquin River Restoration Settlement Act directed the Secretary of the Interior to convert water service contracts in the Friant Division to repayment contracts to generate revenue for the San Joaquin River restoration program, and those water service contracts were in fact converted to repayment contracts.
According to the Bureau of Reclamation, as of October 2019 more than 75 agencies that had “temporary” water service contracts to receive Central Valley Project water, including the State of California Department of Fish and Wildlife, have exercised the option provided by the WIIN Act to convert their contracts to “permanent” repayment contracts. The contract terms proposed in the repayment contracts for Westlands and other Central Valley Project contractors under the WIIN Act are nearly identical to those in the Friant Division repayment contracts.
 
Further, as President Obama also noted, the provisions of Subtitle J of the WIIN Act were intended to help meet California’s long-term water needs, helping to “assure that California is more resilient in the face of growing water demands and drought-based uncertainty.” In the case of Westlands’ contract conversion, like all contract conversions done before or after, it offers a win-win for all parties.
The Westlands contract conversion will accelerate payment of approximately $200 million to the federal government years before payment otherwise would be due. This money, pursuant to the WIIN Act, will be placed in the Reclamation Water Storage Account to be used for the construction of water storage and supply projects that can benefit all Central Valley Project purposes.

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