O.C. Battles U.S. Over Cost of Water From Prado Dam

WASHINGTON —  A bitter dispute is pitting the U.S. government against the Orange County Water District in a showdown over whether the county should pay up to $150,000 a year for the right to use water now being dumped into the ocean.

The water district wants to capture for household use 1.6 billion gallons of the spring runoff that each year feeds the flood control reservoir behind the Prado Dam in Riverside County. The U.S. Army Corps of Engineers, which operates the dam, now releases the runoff into the Santa Ana River and--ultimately--the ocean.

To get the water, the district has agreed to pick up the tab for maintenance, operation and improvements, including reconstruction of a habitat for an endangered bird species. The cost could reach $15 million. But the Army wants more.

Before it will sign off on the deal, the Army is asking for an additional amount equal to half of the money the district would save by getting the water from the Army instead of buying it elsewhere. That payment could amount to $150,000 a year, or more.

Orange County officials said they are outraged, more by the principle than the price tag.

“It’s the most ridiculous proposition I’ve heard of since Caligula named his horse to the Roman senate,” said James F. McConnell, Orange County’s lobbyist in Washington.

Water district board members “are as mad as they can be about this, because they just don’t think it’s fair,” said William R. Mills, the water district’s general manager.

“It’s a one-way partnership,” Mills said. “(The Army) puts up no money and they get half of the benefits. . . . Where it all comes from is out of our customers’ pockets.”

“The Corps is wrong and we’re right,” said Rep. C. Christopher Cox (R-Newport Beach), who is hosting a meeting next week at which the Orange County congressional delegation will discuss the issue with water district officials and Assistant Army Secretary Robert W. Page.

Cox and Rep. Ron Packard (R-Carlsbad), whose district includes southern Orange County, sit on the House Public Works and Transportation Committee, which authorizes most Corps water projects.

Even with that potential leverage, the congressmen may face a tough audience.

“They want to get all the benefits,” G. Edward Dickey, Page’s deputy, said of the water district officials. “They don’t want to share the benefits with all the taxpayers of the nation.”

The Army’s decision stems from a year-old policy requiring the Corps of Engineers to recoup for the government the value that Corps projects provide to private parties.

County officials said they believe this is the first time the new policy has been applied to water reclamation that does not involve construction of a new dam or other major improvements.

At the heart of the conflict are two legal questions:

--What responsibility does the federal government have to use its flood control dams to provide household water for drinking and washing?

--What right does the government have to recoup the value created by its projects when the beneficiary is the public, and not a private business?

The Orange County Water District is the only district in the county that does not sell water directly to household customers. Rather, it maintains a vast underground reservoir in naturally occurring deposits of sand and gravel. The reservoir is capable of holding up to 10 million acre-feet of water--about 3.2 trillion gallons.

The 40 or so other water districts throughout the county draw about 70% of the water they use from the reservoir through an extensive network of about 500 wells. They pay the Orange County Water District $45 an acre-foot for the water they take.

The water removed from the underground reservoir is replenished both naturally and by the Orange County Water District, which maintains recharging ponds that feed the reservoir. The district purchases water to fill the ponds from the Metropolitan Water District. On occasion, it also uses water released from the Prado Dam, located about five miles west of Corona.

To be of use to the district, the dam water must be released slowly so it can be diverted before it rushes down the Santa Ana River channel to the sea. In addition, the Corps must keep more water in the dam for longer periods of time if the dam is to help feed the underground reservoir. That adds to operational and maintenance costs at the dam.

A policy of maintaining the dam purely for flood control would dictate leaving as little water as possible in the Prado reservoir, so that the dam is always prepared to handle a deluge from a major storm.

The Prado Dam opened in 1941 as a flood control dam, without a formal mandate to provide water for surrounding communities. Nevertheless, the Corps over the years has made Prado Dam water available to the water district on an informal basis, Mills said.

Faced with long-term concerns about dramatic population growth and short-term worries about a persistent drought, the water district several years ago sought a formal commitment from the Corps to provide water from the dam in the spring, when there is little danger of flooding.

The district spent $600,000 on a feasibility study, which concluded that the project would make sense, and then began work on an environmental impact report.

However, Army official Page wrote district officials last August to tell them the Corps would not provide the water free of charge, as had been the practice in the past.

In addition to paying the cost of operating the dam for water conservation purposes, the district would have to pay the Army an amount equal to half the market price of the dam water, minus the district’s expenses, the Army said.

Mills estimated it would cost the district about $200,000 a year to pay off the cost of rebuilding the bird habitat and making other improvements. The market value of the water the district would annually receive from the Army is about $500,000, Mills said. That makes for a net savings of $300,000 a year over the price the district would pay if it purchased the water from a supplier such as the Metropolitan Water District.

Under the Army’s new policy, that means the district would still owe the Army $150,000 a year.

Cox, an attorney who once served on the White House legal staff during Ronald Reagan’s presidency, argued that the Army’s policy of recovering value should apply only to private businesses that receive a specific benefit from government projects.

In this case, the beneficiaries are not just water consumers in Orange County, but all the citizens of California, because the dam water provides a net increase in the state’s overall supply, Cox said.

“Orange County has no responsibility to pay for this at all,” Cox argued. “They volunteered. And now somebody is going to stick them for extra costs.”

But the Army’s Dickey said: “The reason we have the new policy is that it’s part of the whole notion of cost sharing and cost recovery.