California District Gives Lessons in Water Policy

Published August 25, 2016

The Goleta Water District (GWD), north of Santa Barbara, Calif., is providing a textbook case of how government water control often serves the interests of lawyers, and water bureaucrats, not the public.

GWD serves about 90,000 residential, commercial and agricultural customers. As is common in many districts in the central and southern California, water, a vital resource, is unevenly distributed leading to tradeoffs, restrictions, and purchases from other districts.

Despite a severe drought in 2013 GWD believed, because it had a diverse water supply, it would be insulated from water shortages threatening other areas. GWD was wrong. Because it lagged behind other districts in taking significant water conservation measures, GWD was forced to declare three water emergencies between March 2014 and May 2015. Subsequently, GWD assessed farmers and ranchers water surcharges effectively doubling their water bills at which point the farmers and ranchers sued GWD. In order to placate farmers, in late 2015, the GWD purchased 2,500 acre-feet of California Aqueduct water from the Antelope Valley-East Kern Water Agency for $1.2 million.

The water purchase failed to halt the ranchers lawsuit because, as Paul Van Leer, General Manager of the Las Varas and Edwards ranches, told the Santa Barbara Independent, the purchase was “too little, too late.”

“They’re supposed to think way ahead. They should have either started reducing their use of Cachuma [lake] or looking for extra supplies a year or more ago. Now, they’re trying to scramble and recover,” continued Van Leer, who said the water surcharge, “is going to put us out of business.”

GWD evidently feels what’s good for it, is not good for other districts. Having secured new water supplies through its purchase from Antelope Valley, it is now trying to prevent other water districts from cutting the same kind of deals, in this case from a private party.

The Slippery Rock Ranch (SRR) near Santa Barbara sits atop 200,000 acre-feet of water, well beyond the needs of the ranch’s avocado trees. The ranch sought to sell its excess groundwater supply to other districts in the area, including the GWD, with which it could not reach agreement. When nearby water districts sought to purchase 2,000 acre-feet of water per year from SRR, GWD filed suit in February of 2015 in Santa Barbara Superior Court to halt the purchase, claiming the water under SSR is connected to Goleta’s underground basin.

The lawsuit is a bit curious since if SSR’s water was connected to GWD’s underground supply, it would not have needed to purchase the water from SSR in the first place, it would already have been drawing from the reservoir. In addition, SRR conducted a hydrogeologic study showing the water under the ranch is not connected to the GWD’s aquifer and thus the sale of its water to other districts will not affect Goleta’s groundwater supplies.

Water Users Suffer, Water Bureaucrats, Attorneys Prosper

While GWD’s water customers face high prices and are arguably suffering from what ranchers and other water district’s executives say has been poor water planning on GWD’s part, GWD’s executives and the lawyers retained to fight the multiple lawsuits GWD is involved in, have prospered.

GWD has some of the highest water rates in the country. According to a February 2016 report published in Food & Water Watch, at $736.62 per year on average, GWD is the 8th most expensive water provider in the nation.

One reason for these high costs might be the generous salaries and benefits GWD’s top executives receive. Hired in 2010, John McInnes, general manager of GWD has a salary of $217,593.37, with total pay and benefits of $349,328.53, making McInnes the second highest paid employee in the district. Upon being hired, the GWD acceded to McInnes’s request they hire additional administrative staff, hiring Dave Matson as assistant general manager, with total pay and benefits of $266,673.73. Two others GWD employees have total benefits and pay exceeding $200,000 annually.

One of GWD’s biggest, and growing, expenses currently is the amount it spends on litigation and consultant fees, topping $1.6 million in 2015, an amount equal to $18.95 a month per customer. In contrast Carpinteria Valley Water District, 20 miles south, has spent $45,000 this year or $2.90 per person per month on legal fees.

GWD’s case against SSR is slated for trial in August 2016, but even if it wins, it will not increase the district’s water supply.

Water is Priceless

Improving California’s water situation over the long-term will require an increasing recognition of water rights within the state, with the ability to freely exchange water, according to K. Lloyd Billingsley, a policy fellow at the Independent Institute.

“Creating new administrative positions at water districts does not increase the supply of water,” writes Billingsley. “Stellar salaries and benefits for administrators do not guarantee sound management of existing supplies. Lawsuits do not create more supplies of water, but they do consume public resources and waste time.”

Whether in times of scarcity or abundance, Billingsley says the best solution is to replace California’s bureaucratic allocation system with market pricing, empowering the state’s various water users to engage in mutually beneficial trades.

“All California communities would benefit from a system of tradable, private water rights,” Billingsley writes.

Kenneth Artz ([email protected]) writes from Dallas, Texas.


K. Lloyd Billingsley, “Cross-Currents In California Water: A Case Study of Bureaucracy Versus Tradeable, Private Water Rights,” Independent Institute, July 18, 2016: