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<br />7A - ATTACHMENT NO.3 <br />Saltworks Proposal- Water Group Summary Report (22 January 2010) Page 50 <br /> <br />1112, 1130; Pub. Resources Code, 921167.2.) For this reason, the legality of KCWA's <br />CEQA compliance efforts in 2000-2001 is not relevant to DMB's proposal. <br /> <br />2002-2008 <br />The water team obtained available public documentation concerning certain transfers of <br />the Nickel water between 2002 and 2007. The water team does not know whether <br />transfers occurred during other years throughout this period. <br /> <br />In 2006, Nickel delivered 8,393 acre-feet of water into the "North Kern Water Storage <br />District" recharge facilities. In 2008, the North Kern Water Storage District approved <br />Nickel's request to recover this water, for delivery back into the California Aqueduct. <br />The District prepared an Addendum to the 2001 Negative Declaration in connection with <br />its approval of Nickel's request. (CEQA Guidelines, 9 16164.) This water appears to <br />have been delivered to the Antelope Valley-East Kern Water Agency, which approved <br />the delivery based on a Class 1 (existing facilities) CEQA Categorical Exemption in <br />October 2008. (CEQA Guidelines, 9 15301.) DWR also posted a Class 1 Notice of <br />Exemption for what appears to be this same transfer. The notices describe the Nickel <br />water as a pre-1914 water rig ht. <br /> <br />In May 2007, DMB and Nickel entered into an option agreement concerning 8,393 AFY <br />of Nickel water. The agreement does not indicate why the 10,000 AFY originally <br />identified in the KCWAlOWD/Nickel agreement was reduced by 1,607 AFY. DMB <br />representatives stated that Nickel had conveyed this portion of the Nickel water <br />elsewhere. In any event, the amount of water available to DMB under the agreement <br />was 8,393 AFY. Financial terms between Nickel and DMB were redacted from the <br />agreement reviewed by the water team. Those financial terms are not relevant to the <br />water team's analysis, insofar as they concern solely financial terms between two private <br />entities. The agreement has a 35-year term, with an additional renewal term of 35 years <br />at DMB's discretion. There is no provision for renewal beyond the combined 70 years. <br /> <br />The option agreement characterizes the 8,393 AFY of Nickel water as deriving from a <br />"pre-1914 water right." The option states that Nickel has the right to make the water <br />available at the Tupman Turnout, and that no further discretionary action is required with <br />respect to the delivery of this water. <br /> <br />On December 16, 2008, DMB notified Nickel that DMB was exercising its option. DMB <br />therefore owns 8,393 AFY of Nickel water for a period of 35 years, renewable for <br />another 35 years. <br /> <br />2009 <br />In 2009, DMB sold 2,000 acre-feet of Nickel water to the Santa Clara Valley Water <br />District (SCVWD or District). SCVWD acquired 2,000 acre-feet of Nickel water as a one- <br />year agreement as part of SCVWD's ongoing program to augment surface water <br />supplies. SCVWD acquired the water to offset expected cutbacks in water deliveries <br />from the SWP and Central Valley Project (CVP). An SCVWD Board memorandum <br />describes the transaction as follows: <br /> <br />"DMB, a private developer, has purchased very reliable water rights in <br />Kern County. Water purchased by the District would be delivered by an <br />exchange with Kern County Water Agency for an equal amount of its <br /> <br />43 <br />