AgdaPkt 2010-02-01 clsd and regular

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7A - ATTACHMENT NO.3 Sa/tworks Proposa/- Water Group Summary Report (22 January 2010) Page 56 County of San Francisco "is prohibited from ever selling or lettering to any corporation or individual, except a municipality or a municipal water district or irrigation district, the right to sell or sublet the water or the electric energy sold or given to it or him" by the City or County of San Francisco. In this case, however, the transfer or sale would be between public agency wholesalers, so this prohibition does not appear to apply to OMB's proposal. BAWSCA Under the Water Supply Agreement, BAWSCA does not have approval authority over the proposed sale or transfer. Due to BAWSCA's central role in developing the agreement, BAWSCA should be consulted with respect to a proposed transfer and sale. BAWSCA has legislative authority to plan and implement water supply projects, and on behalf of its member agencies, has an interest in ensuring the new Water Supply Agreement is accurately interpreted and properly administered. DWR As noted above, the transfer of a portion of the Nickel water would also require OWR to approve a point-of-delivery agreement. OWR considers such agreements to be discretionary, and therefore subject to CEQA. Generally, OWR's policy is to evaluate each transfer proposal on an ad hoc basis. (Gray, The Modern Era in California Water Law (1994) 45 Hastings L.J. 249, 283). Such an agreement would be approved only after the City certifies the EIR for the Saltworks project; thus, CEQA coverage would exist for such an agreement. OWR has entered into a number of such agreements over the years as a means of facilitating water transfers. The agreements typically focus on establishing a mechanism for requesting water deliveries, the allocation of costs, and the like. OWR does not allow contractors to transfer a bare entitlement to water that the contractor has not yet used, thus preventing an increased demand in water with the transfer. (Id. at p. 284.) OWR also employs a policy known as the "Golden Rule" whereby transfers may not adversely affect deliveries to other contractors, diminish SWP storage, or increase service costs of other members. (Ibid.) There must also be sufficient capacity in the California Aqueduct to transport the water to transferees downstream on the aqueduct. (Ibid.) The water team is not aware of reasons why OWR would be unable to enter into such an agreement, as it did to facilitate the SCVWO transfer in 2009. KCWA Under the terms of the KCWAlOWO/Nickel agreement, KCWA would have to approve the transfer of some of the Nickel water to the City of Redwood City. KCWA is contractually obliged to facilitate such transfer, and has done so on at least two occasions since 2001 (and probably more). The water team is not aware of any reason why KCWA would be unable to grant its approval under OMB's proposal. KCWA's facilitation of such a transfer would not jeopardize its water rights because the Legislature, through the Water Code, has largely preserved the rights of water transferors. The transfer of water is deemed a beneficial use and the transferor's reduction in its own water use (to make water available to the transferee) will not result in a forfeiture or diminution of the transferor's water rights. (Water Code, 99 1244, 1745.07; see also Gray, supra, 45 Hastings L.J. at pp. 275-276.) Thus, the Legislature has created reasonable assurance to transferors that their water rights will not be placed in jeopardy by offering water for transfer or sale. In general, the Legislature enacted 49