Merced Irrigation District moves forward with water rate hike proposals

03/04/2014 8:01 PM

03/04/2014 11:02 PM

Farmers drawing water from the Merced Irrigation District are considering a proposal to raise the amount of money they pay for water and the amount landowners pay per acre of land within the district to keep it afloat.

The MID board of directors voted unanimously Tuesday to send ballots to district farmers requesting a water rate increase that would take prices from $23.25 per acre-foot of water to $100.67 per acre-foot. An acre-foot is the amount of water it would take to cover an acre of land 1 foot deep, or about 325,900 gallons.

Additionally, the board is seeking an increase in stand-by fees, which are assessments paid by farmers per acre of land to help maintain canals and other facilities. If approved by district farmers, stand-by fees would increase from $24 to $34 per acre, the board said Tuesday.

Officials at the meeting noted that if voters approve the stand-by fee increase, the price of water could be kept to about $81.82 per acre-foot, instead of more than $100.

The MID board has said a higher rate is needed to help the district cover a projected $10.6 million revenue shortfall. With much less water to sell to growers and other users because of the drought, the district expects significant revenue declines.

In a typical year, the district sells about 300,000 acre-feet of water to Merced growers. But under present drought conditions the district anticipates having only about 98,000 acre-feet of water to sell to farmers, according to an engineer’s report presented Tuesday.

More than 60 people attended the board of directors meeting Tuesday.

“It’s an emotionally charged situation,” said Ray Veldhuis. “But those (proposed) prices are not out of line with the cost of water in the rest of California.”

Veldhuis, owner of RV Dairy, also farms almonds, walnuts and pistachios in Merced and Stanislaus counties.

Not everyone supported the proposals.

Farmland owner Anthony Roggero said he would fight cost increases.

“The fact is they have no water to sell, but they don’t want to cut anything on their end,” Roggero said. “They just want us (farmers) to take care of them and put it on our backs, and we’re not getting any service from them.”

MID has trimmed several million dollars from its budget in recent years, including laying off more than 30 full-time staff members in 2010. The district also cut contracts with outside companies and doing the work in-house, and is recovering some costs associated with the New Exchequer Hydroelectric Project, MID spokesman Mike Jensen said.

Roggero said the district needs to make additional cuts.

Veldhuis, however, said he believes keeping MID financially solvent should be a priority for every farmer in Merced County.

“My fear is that, if MID can’t honor its bond covenants, then bondholders could exercise their rights and step in and force the district to sell water down the river, out of the county, in a year when farmers really, really need it,” Veldhuis said. “I think it’s our duty as property owners to get the district whole and healthy.”

Brian Stubbert, MID’s budget director, told the crowd at Tuesday’s meeting that the proposed rate and fee increases would be short-term solutions to address the drought crisis. John Sweigard, MID’s general manager, has said the district has a “long-term planning process” in place to address future needs.

“As board members noted, the board can lower rates in future years to meet the needs of the district,” Jensen said.

Ballots were mailed to farmers after Tuesday’s meeting. A public protest hearing is scheduled for April 18.

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