Water transfers in Northern California : analyzing the termination of the San Francisco--Modesto Irrigation District water transfer

Abstract

From 2011 to 2012, the Modesto Irrigation District (MID) and the San Francisco Public Utilities Commission (SFPUC) attempted to broker a deal that would transfer water from the rural Central California district to the metropolitan Bay Area. With a contract length of 50 years, it represented the type of long--term agricultural--to--urban water deal many experts had long anticipated occurring in Northern California, and might open the door for larger transfer deals in the region. Such transfers had been extolled for years by economists, policymakers, and even some environmentalists as an optimal way to manage scarce water resources among a variety of interests. This optimism was countered by those fearing potential social, economic, and environmental harm that such deals would bring upon those not directly involved in the negotiation, known as "third parties," and literature suggested these third--party concerns were a major hurdle in completing transfer deals. The SFPUC--MID proposal fell through in September of 2012, and this thesis set out to explore the key factors in its collapse using an institutional framework. Analyzing data collected through detailed interviews and primary sources, this thesis concluded that third--party concerns played only a tertiary role in the termination of the negotiations. Far more consequential factors were rifts within the MID, caused in large part by the election of a board member adamantly opposed to the transfer, and the threat of legal action by the city of Modesto, already engaged in a contract with the MID. These spheres of conflict--within the negotiating agency, among contractual partners, and outside by third parties--combined to scuttle the deal. As a result of the failed transfer, the two agencies are taking two very different paths forward, with the SFPUC considering a similar water deal with a different irrigation district while the MID, after an overhaul of personnel, will tackle its challenges with a completely new management approach. The thesis concludes with recommendations for those in the water management field, the most significant regarding the importance of dry year arrangements and the capacity of institutional leveraging.