California State University, San Marcos

THE HISTORY OF A FLUID RELATIONSHIP:

THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA

AND THE SAN DIEGO COUNTY WATER AUTHORITY TO 1995

A thesis submitted in partial satisfaction of the

Requirements for the degree Master of Arts in History

by James J. Taylor

Thesis Committtee:

Professor Jeffrey Charles, Chairman

Professor Anne Lombard

Professor Theodore Andrew Strathman

Copyright © 2012 James J. Taylor

All rights reserved

Contents

Acknowledgements i Abstract iv Introduction 1

Chapter 1 Securing Imported Water for Southern California: The Genesis of the Metropolitan Water District and San Diego County Water Authority 10 Historical Roots 11 The Progressive Era and Early Twentieth Century Water Development 13 The Quest for Colorado River Water 17 San Diego Water Politics in the 1920s 24 Creation of the Metropolitan Water District of Southern California 27 Metropolitan Water District Organization 31 Special Districts – Good Government or Anti-Democratic? 34 Passage of the Boulder Canyon Project Act and Agreement on River Allocations in California 38 The Colorado River Aqueduct: MWD Determines a Route and Secures Funding 44 Attempts to Reroute the Aqueduct through San Diego County 45 San Diego Signs Its Colorado River Contracts 48 San Diego Inaction in the 1930s 49 World War II and the San Diego’s Water Crisis 53 Creation of the San Diego County Water Authority 55 San Diego’s Pursuit of Imported Water Escalates 59 President Roosevelt Orders Construction of the San Diego Aqueduct 63 SDCWA Retains its Options 65 SDCWA Annexation to MWD 72 Contrasting Los Angeles Activism and San Diego Indecision 77 Did SDCWA Make the Right Decision? 79 The Stage is Set 81

Chapter 2 The Uncertain Path of Expansion 1947-1955 83 Fred Heilbron and Joseph Jensen Take Charge 84 Completing the San Diego Aqueduct 87 SDCWA Consolidates its Position at MWD 89 New Concerns Over Water Supply Reliability: MWD’s Short- lived Annexation Moratorium 92 Joseph Jensen Becomes Chairman of the MWD Board of Directors 99 SDCWA Campaigns for the Second Pipeline 102 Heilbron Defies the City of San Diego 106 Other Obstacles to the Second Barrel 109 The Korean War Intervenes 112 A Second Barrel Retrospective 116 The Laguna Declaration 118 Expansion of MWD and SDCWA in the 1950s; Joe Jensen Prods SDCWA into Annexing Rural Areas 124 The Laguna Declaration Sets the Stage for the Pursuit of More Water and Accompanying Internal Conflict at MWD 130

Chapter 3 The State Water Project and Battles Over Allocation of Costs 1955-1964 132 MWD’s Reservations Concerning the Feather River Project 135 MWD and SDCWA Disagree on Feather River Project Funding 138 SDCWA Uses the Feather River Project as Leverage to Obtain the Second Aqueduct 143 Controversy Over Expansion of the Colorado River Aqueduct 146 SDCWA Annexations Continue Despite Water Supply Uncertainties 148 The Feather River Project Stalls 149 Governor Brown Pushes the State Water Project 156 Dissension Appears Among Los Angeles Officials 158 The State Water Project Controversy Propels a Fundamental Change in the MWD Revenue Structure 161 MWD and the State Wrangle Over Contract Terms 167 Jensen Is Overwhelmed 174 MWD Lobbies the Legislature Not to Modify the Water Contract; the Los Angeles Department of Water and Power Renews the Effort to Revise the MWD Revenue Structure 180 MWD Renews Its Attack on the East Branch Canal 185 State Water Project Postscript 192

Chapter 4 Agencies in Transition 1964-1975 194 Jensen and Heilbron Still in Control 197 MWD Changes Policy on Annexation Charges 200 SDCWA and MWD Agree on a New Pipeline for the San Diego Aqueduct 204 The Federal Government Proposes the Greatest Water Project of Them All 210 MWD Pushes a Desalination Project, but SDCWA Objects 220 SDCWA Frustration over Preferential Rights Continues 232 The Environmental Movement Challenges Water Developers 233 Reevaluating Population Growth and Water Requirements 247 Fred Heilbron and Joseph Jensen Bow to the Inevitable 249 Endings and Beginnings 253

Chapter 5 Consensus and Conflict: Adjusting to a Limited Water Supply 1975-1985 256 Hans Doe and Harry Griffen Carry SDCWA Interests at MWD 258 Los Angeles Sues to Lower Taxes and Raise the Water Rate 260 The Drought of 1976-1977 Threatens Water Supplies 264 The Showdown Comes for the Peripheral Canal 269 The Peripheral Canal Failure Reorders the Universe of MWD and SDCWA 276 Doe and Griffen Test the Merits of “Getting Along” at MWD 281 Los Angeles Renews Its Fight to Reduce Taxes 286 The Old Battle Between Taxes and the Water Rate Is Rekindled 292 MWD and SDCWA Pick New General Managers, and SDCWA Raises the Stakes 298 Boronkay Mediates a Resolution of the SDCWA-Los Angeles Standoff 301 SDCWA Campaigns for a Change in Preferential Rights 305 SDCWA Pursues a New Water Supply 310 SDCWA Loses its Allies on the MWD Board as Galloway Wanes 316 Repercussions of the Galloway Proposal 317 SDCWA Waves an Olive Branch 321 Los Angeles Nixes Another Preferential Rights Compromise 323 SDCWA Gives In 324 The Seeds of Dissension are Sown 325

Chapter 6 Diversification, Drought, and a New Path 1986-1995 328 The Role of the General Manager and Staff Broadens 330 SDCWA Prepares for an Expanded Role, But Encounters More Frustration 332 The Preferential Rights Controversy Never Goes Away 336 MWD Finally Closes a Deal with IID 340 Long-term Drought Highlights SDCWA Vulnerability 343 MWD Attempts to Mollify SDCWA Fears Over Preferential Rights 351 Opportunity Knocks and SDCWA Answers 353 The QSA as a Culmination and a Fundamental Change of Relationship 356 Common Threads 359 The Progressive Experiment a Century Later 361 The Future 363 Bibliography 365

i

Acknowledgements

I would not have started and could not have completed this thesis without the mentoring and friendship of my colleagues at the San Diego County Water Authority

(SDCWA), where I worked from 1995 to 2007 as assistant general counsel. The same goes for my colleagues at the Metropolitan Water District of Southern California

(MWD), with whom I cooperated on and contested various issues over those years. I hope in some small part this history repays their kindnesses and provides us all additional perspective on the relationship between the two water agencies.

I am grateful to SDCWA General Manager Maureen Stapleton, who gave me access to files at the water authority that had not heretofore been used in scholarly research. I am also grateful to the mostly unknown employees at SDCWA who through half a century collected and retained newspaper clippings, reports, correspondence, brochures, and other assorted documents that added clarity and color to the thesis in so many instances. MWD facilitated my work and the work of other researchers by putting its meeting minutes and associated letters and reports online, beginning with the organization of the district in 1928.

Professor Jeff Charles at CSU San Marcos provided essential insights, recommendations, and encouragement throughout the long drafting process. Professor

Andy Strathman generously contributed his expertise on the history of Southern

California water development, providing valuable feedback on topics that appear from the beginning to the end of the thesis. Professor Anne Lombard’s reading ii yielded a fresh look at the project and certain of its elements that deserved more attention.

I am grateful for the love and support of my wife, Adriana, whose unrelenting faith in me and my endeavors is not always fully deserved, but is always and forever appreciated. iii

This thesis is dedicated to John and Lois. iv

Abstract

This thesis documents as a historical continuum the relationship between the Metropolitan Water District of Southern California (MWD), the nation’s largest water district by population served, and the San Diego County Water Authority (SDCWA), MWD’s largest water purchaser among its 26 member agencies. That association has been marked over the years by alternating cooperation and conflict driven by perceived self-interest. As single purpose special districts with appointed directors and the power to raise their own revenues, MWD and SDCWA operate under less public scrutiny than general jurisdiction governments and have largely ignored competing societal interests in the pursuit of their mission to provide an adequate water supply for a growing population. Although they are united by a common goal, the differing positions of SDCWA and other MWD member agencies, particularly the city of Los Angeles, have led to decades-long battles over the need for and means of acquiring new water supplies and transmission facilities, the allocation of existing supplies, and the apportionment of costs. Those issues intensified beginning in the 1960s as environmentalism and growing water demands throughout the West made the water districts’ job more difficult and complex. As complexity and contentiousness increased, so did the role of agency staff, which assumed policy roles that had heretofore been the sole purview of part-time boards of directors. After drought curtailed water supplies in the early 1990s, a dissatisfied SDCWA began an ultimately successful effort to acquire a large additional water supply outside the MWD sphere, fundamentally altering the relationship between the two agencies. Keywords: special district, water district, bureaucracy, Metropolitan Water District of Southern California, San Diego County Water Authority 1

Introduction

In 1995, the San Diego County Water Authority (SDCWA) began a determined effort

to purchase Colorado River water from the Imperial Irrigation District (IID), an

agency that supplies about three million acre-feet of water each year to its agricultural

customers in California’s Sonoran Desert just north of the border with Mexico.1 The

proposed purchase should not have seemed controversial to those unfamiliar with water politics in Southern California and the American West. After all, SDCWA was

created in 1944 to bring imported water to the growing San Diego region.2 However,

in the arcane world of western water, the SDCWA initiative was the catalyst for a

“water war” between SDCWA and its sole imported water supplier, the Metropolitan

Water District of Southern California (MWD), which itself had been organized in

1928 to import Colorado River water to its service area.3 That, in turn, spawned actual or threatened water wars between urban and agricultural water districts in

Southern California, between water interests in Southern and Northern California, among the three states of the lower Colorado River Basin, and between the states of the Lower Colorado River Basin and the Upper Colorado River Basin. In an era of increasing demand for an essential finite resource, any significant adjustment of water

1 An acre-foot of water is an acre of water one foot deep, or 325,801 gallons. 2 San Diego County Water Authority, First Annual Report (San Diego, 1946), 11. 3 Metropolitan Water District of Southern California, History and First Annual Report (Los Angeles, 1939), 39-40. 2

allocations, especially on the overdrafted Colorado River, creates repercussions that

affect water users throughout the arid West.

MWD is made up of 26 member agencies, all of them government entities that

provide imported water from the Colorado River and Sierra Nevada Mountains to

customers in Los Angeles, Orange, San Bernardino, Ventura, Riverside, and San

Diego Counties. SDCWA perennially purchases more water from MWD than any

other member agency, and sells that water to its own 24 member agencies, which

range from the city of San Diego to predominantly agricultural water districts along

Interstate 15 in north San Diego County.

From the SDCWA viewpoint, the proposed water transfer with IID was

prompted by concerns whether MWD could continue to supply San Diego’s imported

water needs in the face of growing demands locally and throughout the West. Those

concerns were exacerbated by cutbacks in MWD deliveries in 1991 during a multi-

year drought, and by the MWD rule of “preferential rights,” which determined

allocations of water to its member agencies during times of shortage and worked to

SDCWA’s disadvantage. Some at MWD, however, saw the SDCWA water transfer

proposal as a threat to the concept that importation of water should be conducted on a

regional basis to prevent competition among water agencies and disproportionate

allocations of a precious resource.

For observers unfamiliar with the fifty year relationship between the two agencies, the SDCWA effort to buy water from a source other than MWD was seen as

an event with only recent origins. Indeed, the drought has been described as a “wake- 3

up call” that stirred SDCWA from a status of relative complacency. 4 However, the

record shows that San Diego’s concern with the reliability of its water supply from

MWD dates almost from the time SDCWA was annexed to MWD as a member agency in December 1946.

This thesis will examine the historical relationship between MWD and

SDCWA, and place in perspective the controversial SDCWA decision to seek water from a third party in 1995. The strife between the two agencies in the late 1990s was the culmination of differing institutional policies and priorities at MWD and

SDCWA, and within their member agencies, that had been in play for half a century.

In particular, SDCWA and the MWD agency with the greatest voting power and preferential right, the city of Los Angeles, had been at odds for decades over policies on expansion of service areas, acquisition of new water sources, and the means of producing revenue. It only took a water shortage and the threat of future water shortages to bring the pot to a boil.

In a larger sense, the behavior of MWD and SDCWA over the years has been

influenced, if not driven, by their status as special districts with a relatively narrow mission, no retail customers, and a board of directors that is not elected, but appointed by the member agencies. They are answerable only to the state legislature that created

them and to their member agencies. The result, as Robert Gottlieb and Margaret

FitzSimmons state in Thirst for Growth, is that MWD, SDCWA, and other water

4 Dan Walker, Thirst for Independence: The San Diego Water Story (San Diego: Sunbelt Publications, 2004), 70. 4

districts are “hidden governments” that have acted largely free from public oversight.5 Working within these parameters, agency policymakers can determine

priorities free of the give and take of elective politics, and in relative seclusion. The result has been an insular range of goals directed toward each agency’s mission and values. Because MWD and SDCWA each contain over twenty member agencies, some of which have their own client districts, the multi-layering and interdependence of districts was bound to produce conflict between agencies operating under different circumstances and with different goals.6

This thesis will contribute two new perspectives to the historiography of the

development of water resources in Southern California. First, it will demonstrate that

the San Diego decision to pursue a water purchase from a third party in 1995 was a

predictable result of the history of the relationship between SDCWA and MWD, and

the city of Los Angeles as the most powerful MWD member agency. The long-term opposing interests and conflicts that brought the agencies to 1995 have been suggested generally in David’s Zetland’s 2008 dissertation, “Conflict and

Cooperation within an Organization: A Case Study of the Metropolitan Water District of Southern California.”7 However, Zetland’s work, a study in economics, only

touches on that theme before moving into a set of “public goods experiments” with

MWD member agency managers and suggestions regarding future allocations of

5 Robert Gottlieb and Margaret FitzSimmons, Thirst for Growth: Water Agencies as Hidden Government in California (Tucson: University of Arizona Press, 1991), xvii. 6 David Jason Zetland, “Conflict and Cooperation within an Organization: A Case Study of the Metropolitan Water District of California” PhD. diss., University of California, Davis, 2008), i. 7 Ibid. 5

water. Gottlieb and FitzSimmons’ Thirst for Growth provides a glimpse at SDCWA overtures for independence from MWD in the 1980s and a short synopsis of earlier relations between the two agencies, but in no depth. Other works have described the

“water war” between MWD and SDCWA that began in 1995 without providing a detailed description of the fifty year relationship that brought the agencies to that point. Additionally, those descriptions of the recent conflict have been more concerned with assigning blame than examining it as an exercise in institutional self- interest.8 This thesis will not attempt to analyze the dispute that started in 1995.

Rather, it will show why the dispute was a logical outcome of differing agency interests that had festered since SDCWA joined MWD.

This thesis will also expand Gottlieb and FitzSimmons’ concept of water agencies as “hidden government,” using the historical relationship between MWD and SDCWA as a case study on how their organizational composition affects policies, operations, and interagency alliances and conflicts.9 Water agencies are “special

districts,” a species of public entities that grew rapidly during the twentieth century as

government assumed a larger role in the provision of essential services. Special

districts are broadly defined as “autonomous local governments that provide a single

8 For the viewpoint of Metropolitan as the villain, see Walker, Thirst for Independence, 129-152. For the water authority as the bad guy, see Steven P. Erie, Beyond Chinatown: The Metropolitan Water District, Growth, and the Environment in Southern California (Stanford: Stanford University Press, 2006), 97-132. 9 Gottlieb was himself a MWD director in the 1980s who earned “renegade” status by opposing expansionist water initiatives, most famously the Peripheral Canal. 6

or limited services.”10 That definition must be considered a loose fit, however; it is a

stretch to consider MWD a “local” agency, as it encompasses a six county area containing almost twenty million people. The concept of “autonomy” is also elusive.

Although the directors of MWD and SDCWA are appointed, the governing bodies of

many special districts are elected.11

Special districts are an outgrowth of the Progressive Era of the early twentieth

century, a time when reformers successfully argued that certain vital public services

and resources were too important to be left in the hands of private interests, and must

be assumed by government. While the appropriation by government of water supply and other public services appears at first blush a victory for popular control, a component of the progressive mentality thwarted that result in many cases. Just as private interests were motivated by profits and not the public good, elective politics were viewed as divisive and corrupted by the quest for power and money. For some progressives, public resources were better placed in the hands of appointed experts who were shielded from these influences. 12 However, making the water supply the

domain of an expert elite without accountability to the electorate is inherently anti-

democratic, and as this thesis will demonstrate, insulation from popular control can

lead to its own abuses.

10 Kathryn A. Foster, The Political Economy of Special Purpose Government (Washington, D. C.: Georgetown University Press, 1997), 2. 11 Ibid., 7. 12 Foster, The Political Economy of Special Purpose Government, 18. 7

The description of special district water agencies as “hidden government” is generally valid, but requires qualification. Over the decades, the actions of MWD and

SDCWA drew considerable public attention and occasionally threats to curb their powers in two circumstances: when the water supply was in doubt and when the agencies themselves saw it in their interest to bring an issue to the public arena. In fact, as the footnotes indicate, newspaper articles were a crucial resource in researching this thesis.

MWD and SDCWA will also be studied as bureaucracies, that is, agencies exercising power without immediate accountability outside their own organizations.13

The districts are ultimately accountable to the state legislature, which can amend their

statutory charters, and to their member agencies, which can appoint and recall

directors. However, with notable exceptions, MWD and SDCWA have in most cases

acted with impunity. Unlike executive agency bureaucracies, special districts have a

governing body, usually a board of directors, and a chief executive officer, or general

manager, who is answerable to the board. This thesis will examine shifts in power

sharing among the board of directors, its chairman, and the general manager and staff

within each agency to help explain how and why the districts formulated and acted

upon goals.

There has been a clear trend over the decades in the allocation of power within

MWD and SDCWA. Until the 1970’s, the general manager of each agency also held

13 Louis Galambos, ed., The New American State: Bureaucracies and Policies since World War II (Baltimore: Johns Hopkins University Press, 1987), 111. 8

the title of chief engineer. This was because the job of the staff, almost exclusively, was to construct and operate the aqueducts, reservoirs, pump stations, and other facilities needed to deliver imported water to the agency service area. Policy and politics were in the hands of the board of directors, consisting entirely of men, mostly successful businessmen in professions often unrelated to water. And for over two decades, until the early 1970’s, the board of directors of each agency was dominated by a perennially re-elected chairman: Joseph Jensen at MWD and Fred Heilbron at

SDCWA.

Heilbron and Jensen died in office in 1973 and 1974, respectively, at the same

time that newly enacted environmental laws were challenging the axiom that

continuous growth and expansion of the water supply were sacrosanct. These two

events precipitated gradual but momentous changes in the agencies’ power structure and direction. In both agencies, term limits were established to prevent a repeat of the

Jensen/Heilbron regencies, and staffs’ duties and numbers expanded to include water

conservation, environmental compliance, public affairs, and lobbying. The dual role

of chief engineer was dropped from the general managers’ title, and the GM became

an administrator and increasingly the face of the organization. The result of these

changes was a dispersion and dilution of power at the board level, and transfer of

power to the executive staff. This is not to say the directors did not retain the ability

to control staff. However, as the agencies’ responsibilities became more complicated,

the board had to rely increasingly on the staff’s expertise. 9

MWD and SDCWA were created to bring imported water to areas that were growing out of their local supplies. The struggle to provide more water to meeting

increasing demands, however, had been in motion in Southern California long before

those agencies were conceived. In a large sense, MWD and SDCWA are only the

latest chapter in a history of water resource development that began even before

Europeans brought their brand of civilization to California. To understand the

districts’ structure, goals, and institutional mindset, one must examine the past that

gave them birth. 10

Chapter One

Securing Imported Water for Southern California: The Genesis of the Metropolitan Water District and San Diego County Water Authority

Sufficient water supply has always been a concern on the Southern California coastal

plain. Contrasted with the eastern United States, where fifty inches of precipitation a

year is common, San Diego receives on average about ten inches, and Los Angeles a

little more. In some years, the number is half that. Most of the water comes during

the winter; there may be no rain at all from May to November.14

The struggle to secure a sufficient water supply did not begin with MWD in

the Los Angeles region, or with SDCWA in the San Diego area. Human development

in the West is inextricably tied to the need for an ever-increasing fresh water supply.

The progression from the use of primitive tools by individuals to store and divert

water, to massive government agencies that transport millions of acre-feet hundreds of miles, made growth possible. MWD and SDCWA, along with hundreds of other federal, state, and local water purveyors, became the culmination of an ideal that growth is good, and water is necessary to grow.

14 Erwin Cooper, Aqueduct Empire: A Guide to Water in California, Its Turbulent History, and Its Management Today (Glendale: Arthur H. Clark Company, 1968), 22-28. 11

The emergence of western cities and development of their water supplies was

an inexorable process, but that process was neither uniform nor consistent. Los

Angeles and San Diego are cases in point. The circumstances that required San Diego

and SDCWA to become dependent on MWD for their water and the region’s

prosperity did not suddenly materialize in 1946. Rather, those circumstances evolved

from the time Southern California was first settled.

Historical Roots

Before the arrival of Europeans, Native Americans lived near fresh water sources and

erected rudimentary alterations of the waterscape, such as slowing the flow of streams

with rocks to increase ground saturation.15 The Catholic missions constructed in

Spanish California in the late eighteenth century included sites at present day Los

Angeles and San Diego, with accompanying secular pueblos. The settlers needed a reliable water supply, and that meant damming the major streams so that water would

be available during dry periods. Perhaps the first water war in Southern California

occurred in 1810 when the friars at the San Fernando mission dammed the Los

Angeles River near present day North Hollywood. That diminished the supply of the

downstream pueblo of Los Angeles, which asserted its primary water right and had

the dam removed. 16 In San Diego, the original Alta California mission, founded in

1769, had to be moved in 1774 from a site near the coast with unreliable water to a

15 Theodore Andrew Strathman, “Dream of a Big City: Water Politics and San Diego Growth: 1910- 1947” (PhD. diss., University of California, San Diego, 2005), 35. 16 Remi Nadeau, The Water Seekers (Santa Barbara: Crest Publishers, 1997), 9. 12

location six miles inland where the San Diego River was dammed and a canal built to

the mission grounds.17

With the Treaty of Guadalupe Hidalgo ending the Mexican War in 1848,

California became American territory. All the action in the early years, however, was

in Northern California, where the gold rush balooned the population and water was relatively abundant. In fact, only about two percent of California’s water comes from

Southern California.18 As late as 1880, the population of Los Angeles was only

11,183, and the population of San Diego about 2,600.19 In the late nineteenth century,

growth in the Los Angeles area began to take off, with agriculture as the main draw.

When Los Angeles became the terminus of a new transcontinental rail line in 1885, a

population boom ensued. The boom engendered massive real estate speculation and

ended as most booms do in a bust in 1889. Despite the temporary downturn, the stage

was set for dramatic expansion in the twentieth century, so long as sufficient water

was available to support it.20

San Diego also had its boom and bust period in the late 1880’s, but on a smaller scale than Los Angeles. The region did obtain a railroad connection in 1885, but only as a spur line from San Bernardino that charged excessive fares and did not carry freight. Without the access to distant markets that the Los Angeles basin

17 Strathman, “Dream of a Big City,” 37. 18 Nadeau, The Water Seekers, 8. 19 Kazuto Oshio, “Urban Water Diplomacy: A Policy History of the Metropolitan Water Supply in the Twentieth Century California” (PhD. diss., University of California, Santa Barbara, 1992), 28; Strathman, “Dream of a Big City,” 43. 20 Marc Reisner, Cadillac Desert: The American West and Its Disappearing Water (New York: Viking Press, 1986), 56-57. 13

enjoyed, San Diego’s agricultural production grew, but at nowhere near the pace of

its northern neighbor.21 San Diego would experience phenomenal growth in the

twentieth century, but in 1900 remained a distant second to Los Angeles in terms of population and development. Because of the relatively smaller demand, San Diegans

would be able to rely solely on local water resources for decades longer than the

Angelenos.

The Progressive Era and Early Twentieth Century Water Development

Los Angeles was outgrowing its local water supply just as the Progressive Era

dawned. Until the end of the nineteenth century, government saw its role in providing

water resources and infrastructure as one of laissez-faire; that is, leave development

where possible to private entities, except to provide an atmosphere in which business

could operate without undue limitations. 22 This attitude stemmed from an abiding faith in the free enterprise system and an inherent distrust of politicians. In Los

Angeles, as in most California cities in 1900, virtually all utility services, including water, electricity, telephone, and urban transit, were delivered by private companies.23 The city of San Diego was no different, with local dams, reservoirs, and

delivery systems in the hands of private enterprise.24

21 Strathman, “Dream of a Big City,” 61-64. 22 Norris Hundley, Jr., The Great Thirst: Californians and Water: A History (Berkeley: University of California Press, 2001), 113. 23 Oshio, “Urban Water Diplomacy,” 28. 24 San Diego County Water Authority, To Quench a Thirst: A Brief History of Water in the San Diego Region (San Diego County Water Authority, 2003), 24. 14

The Progressive Era, which began in the 1890s, signaled a shift from the public’s reliance on the free enterprise system to provide essential municipal services

to a preference for more government control. The rise of big business in the late nineteenth century and exposure of the unscrupulous practices of capitalism run amuck led to state and federal laws designed to curb those abuses, and a loss of confidence that the private sector would act for the public good.25 The emerging

urban centers of Southern California quickly joined the trend in favor of government

activism. In 1901, the city of San Diego formed its own municipal water company, buying out private delivery systems serving city residents. This was followed by a series of acquisitions of private dams and conveyance structures in the region, and government construction of new dams that continued through the 1930s.26 In 1902,

Los Angeles acquired the dams, reservoirs, and delivery system of the private

company that had supplied the growing city for two decades. Along with the company, the city acquired as water works superintendent a self-taught Irish immigrant named William Mulholland, who was to dominate Los Angeles water policy for the next thirty years. 27

The Los Angeles area was experiencing rapid growth as the new century began. The city’s population was 11,183 in 1880, 50,395 in 1890, 102,479 in 1900, and had grown to a quarter million in 1905.28 With similar growth in the outlying

25 Galambos, The New American State, 10-11. 26 San Diego County Water Authority, To Quench a Thirst, 24-28. 27 Nadeau, The Water Seekers, 12. 28 Ohsio, “Urban Water Diplomacy,” 28. 15

areas, local water resources were fast becoming inadequate. Los Angeles had earlier addressed the increasing regional competition for local water resources by asserting a

“pueblo right” to the entire Los Angeles River system. The city argued that when

California was ceded to the United States at the end of the Mexican War, the United

States at that time recognized existing property rights. Under Spanish and

subsequently Mexican law, the pueblo of Los Angeles had the paramount right of use

of the river’s water, and as successor to the pueblo, the city of Los Angeles now held

that right. In 1895, after a twenty year series of court battles, the California Supreme

Court granted the city a complete victory, holding that its pueblo rights were superior

even against those who had been diverting the river’s water for decades.29

As a corollary to the Progressive Era preference for government

administration of essential services, the cost of bigger water projects was becoming

something only government could afford. By 1905, the city of Los Angeles had completely diverted the normal runoff of the Los Angeles River, and to augment that

supply had constructed wells and other facilities to tap underground aquifers. With

the aquifers being depleted and the population in a state of relentless growth, another

source of water had to be found. That source was the Owens River, over 200 miles

away on the eastern flank of the Sierra Nevada Mountains. 30

Taking water from the Owens Valley was the brainchild of Fred Eaton, an

engineer who had served as mayor of Los Angeles from 1898 to 1900. Along with

29 Hundley, The Great Thirst, 135-136. 30 Metropolitan Water District, First Annual Report, 18-19. 16

Eaton, the prime movers were William Mulholland, head of the newly created city

water department, and William Matthews, city attorney and later the water department attorney. The project required money for acquisition of water rights and construction of an aqueduct capable of carrying 400 cubic feet per second (or about

553,000 acre-feet per year of steady flow), which by itself would cost about $23 million. After convincing the United States Reclamation Service to cancel its own plans to develop the Owens Valley, city officials put up a bond issue for the aqueduct

project, which was passed overwhelming in 1905 by an electorate committed to the idea that water was the key to prosperity. The aqueduct was begun in 1908 and completed in 1913, setting off a group of annexations into the city of outlying lands that needed the new water supply.31 By 1915, the city had nearly tripled in size, from

108 to 285 square miles, with the San Fernando Valley the largest single annexation32

San Diego continued to grow during the first years of the twentieth century, but not enough to exhaust its local water supply. The city population was 39,578 in

1910, and had almost doubled to 74,683 in 1920. By comparison, Los Angeles

County had 936,455 residents in 1920, while San Diego County numbered about

120,000.33 Through the 1930’s, the city of San Diego played an increasingly dominant role in the development of local water, continuing to purchase private systems and building its own dams and reservoirs. In 1923, the city brought suit to

31 Nadeau, The Water Seekers, 14-25, 35-51. 32 Oshiro, “Urban Water Diplomacy,” 31. 33 Ibid., 17, 39; San Diego County Water Authority, First Annual Report, 42. 17

establish its pueblo right to the waters of the San Diego River, eventually winning the

case in 1930.34 It was becoming increasingly evident, however, that at some point

local supplies would be insufficient to support continuing growth. Although estimates

vary, it is generally agreed that the “safe yield” of San Diego’s local water supply was

less than 100,000 acre-feet per year.35

As San Diego was discovering that it would someday need imported water,

Los Angeles was finding that the Owens River aqueduct would prove inadequate sooner than earlier anticipated.36 It mattered little that the city was creating its own

impending water shortage. By 1927, new annexations had increased the area of Los

Angeles to 441 square miles.37 As the 1920’s began, both cities were investigating

possibilities for securing new imported water. Those investigations led them to the

Colorado River.

The Quest for Colorado River Water

The Colorado River watershed encompasses parts of seven states and, at its southern

end, a portion of Mexico as the river empties into the Sea of Cortez.38 Deriving its

water mainly from the Rocky Mountain snow pack, the river cuts south through the

34 Strathman, “Dream of a Big City,” 191-192. 35 The San Diego County Water Authority estimated a local safe yield of 96,000 acre-feet in 1946. However, the California Department of Water Resources estimate was 70,000 acre-feet in 1957. See San Diego County Water Authority, First Annual Report, 39; and Cooper, Aqueduct Empire, 106. 36 Metropolitan Water District, First Annual Report, 19. 37 Oshiro, “Urban Water Diplomacy,” 34. 38 The seven states that contain the Colorado River basin are Colorado, Wyoming, Utah, New Mexico, Nevada, Arizona, and California. 18

Mojave and Sonoran Deserts, forming the boundary between California and Arizona.

By the early twentieth century, the river was already an important source of

agricultural irrigation.

Aside from limited irrigation along the river by Native Americans, the first

recorded use of the Colorado River in California occurred in the Palo Verde Valley,

where in 1877 Thomas Blythe made the first water rights claim under state law.

Beginning in the 1870s, government surveyors and private developers looked to a waterless desert valley, some 60 miles west of the river and just north of the Mexican

border, as an ideal location to irrigate on a massive scale. The problem was to devise

a practical means of getting the river’s water to that distant site. Because much of the

valley under consideration was below sea level, water could move by gravity. The

remaining issue was to provide a means of transportation.

Over the millennia, the Colorado River had periodically diverged from its

southerly course near the site of Yuma, Arizona, to a westerly route that ended at the

Salton Sink, a depression in the California desert, forming a huge lake that would

evaporate when the river again changed direction. Although the river had not taken

that course in the memory of any European, the westerly course had served two

important purposes. First, the river had deposited multiple layers of fertile silt that

only needed moisture to grow crops. Second, the ancient river bed, with some work,

could provide a cost-effective way to move the water. After several aborted attempts,

an enterprise headed by Charles Rockwood and George Chaffey constructed a canal 19 in 1900 along the old river channel and christened their soon-to-prosper desert expanse the Imperial Valley.39

A land boom ensued in the valley and by 1903, 100,000 acres were under irrigation. Rapid growth suffered a setback in 1905 when the diversion structure at the river washed out, causing the entire river to flow into and flood the valley. When the breach was finally closed in 1907, the Salton Sink had been transformed into the

Salton Sea. Not to be deterred, local farmers formed the Imperial Irrigation District in

1911, bought out the developers’ water rights and facilities, and by 1919 were farming 400,000 acres. Under the triple benefits of soil, heat, and water, the Imperial

Valley had become the nation’s outdoor greenhouse. Two issues, however, remained.

First, a large portion of the existing canal ran through Mexico, where there was no way to prevent opportunistic diversions. 40 Second, without a huge dam and reservoir system upstream, the flow of the river was not completely reliable.

The fledgling United States Reclamation Service (later to become the Bureau of Reclamation) was also interested in the development of the Colorado River, but on an even larger scale than proposed by the Imperial Valley denizens. Reclamation

Director Frederick Newell, in the progressive tradition, believed that western irrigation required centralized planning and funding, a job best undertaken by a government agency, namely his own. Although Imperial Valley developers were

39 Nadeau, The Water Seekers, 140-144; Metropolitan Water District, First Annual Report, 26-27. 40 Cooper, Aqueduct Empire, 70-72. 20

wary of federal involvement in their affairs, by 1919 they had agreed to join in a

“unified Colorado River Project” led by the federal government.41

The first organized regional effort to advocate development of Colorado River

water originated in San Diego. The League of the Southwest was founded in 1917 by

a group of civic leaders operating as the San Diego Progress Commission.42 At the

league’s first conference in San Diego, representatives of eight states appealed to

Congress for action to control the river and to reclaim lands in its vicinity. 43 Although

the league’s meetings were later held in Los Angeles County and dominated by the city of Los Angeles, San Diego officials were prominent through the early 1920s. The league’s successor, the Boulder Dam Association, elected San Diego Mayor John L.

Bacon its first president in 1923. By 1924, the association had added hydropower and a domestic water supply for the California coastal plain to its demands for federal

action on the river.44

The drive to dam the river and build an all-American canal to the Imperial

Valley was picking up steam. In 1921, the Fall-Davis report, named for Secretary of the Interior Albert Fall and Reclamation Director Arthur Davis, recommended both a dam “at or near Boulder Canyon” southeast of Las Vegas and an all-American canal,

41 Donald Worster, Rivers of Empire; Water, Aridity, and the Growth of the American West (New York: Oxford University Press, 1985), 203-204, 207-208. 42 “League of Southwest Will Emphasize Birth,” Los Angeles Times, September 15, 1917. 43 “League Holds Final Session,” Los Angeles Times, November 17, 1917. The eight states participating were California, Colorado, Utah, Texas, Nevada, New Mexico, Arizona, and Oklahoma. 44 “Fifteen Cities Indorse Colorado Water Plan; Committee Will Direct Campaign for Great Community Aqueduct for Southern California,” Los Angeles Times, July 20, 1924. 21

with the dam to be financed by hydropower sales.45 Meanwhile, Phil Swing, recently

the general counsel for IID and a newly elected congressman, introduced a bill in

1922, sponsored by Hiram Johnson in the Senate, to implement Fall-Davis.46

The 1922 Swing-Johnson bill never got out of committee, mainly because of opposition by the six other states of the Colorado River basin that were afraid

California would establish rights to the lion’s share of the river’s water. That fear was based on the western water rights principle of “prior appropriation” in which the senior priority went to the party with the earlier claims and beneficial uses. Because the Colorado River is an interstate system, Congress could legislate its allocation, and the United States Supreme Court had jurisdiction over disputes among states regarding water rights. In 1922, the Supreme Court, in Wyoming v. Colorado, held that the doctrine of prior appropriation applied to states recognizing that doctrine (as all the basin states did) and sharing a common water source.47 Although that case did

not involve the Colorado River, the holding did apply. Under the doctrine, California

could gobble up the water long before the other states developed the resources to

exploit the river.

With the Imperial Valley already taking millions of acre-feet from the river

each year and the coastal cities clamoring for federal action to facilitate their use of the river, the other basin states were not disposed to allow any action that would

45 Nadeu, The Water Seekers, 174. 46 Worster, Rivers of Empire, 208; Hundley, The Great Thirst, 211. 47 Hundley, The Great Thirst, 211-212; Wyoming v. Colorado, 259 U.S. 419 (1922). 22 provide California greater advantage. California’s insistence on prompt federal action to construct a dam and the other six states’ opposition splintered the League of the

Southwest in late 1921, rendering it ineffectual.48

Colorado, the leader of the six states, insisted that a regulating dam could not be constructed on the river until a multi-state agreement, with federal approval, suspended the doctrine of prior appropriation and allocated the water more equitably.

Such an agreement would enable the upper basin states to preserve their water rights for future use. For California’s part, federal action on a dam and reservoir was impossible if opposed by the other six states, so it, too, was motivated to pursue a compromise agreement. During 1921, the seven state legislatures and Congress authorized discussions to formulate such an agreement. Meetings were scheduled for

1922.49

President Harding chose his Secretary of Commerce, Herbert Hoover, to preside over the multi-state meetings. After months of discussion, the Colorado River

Compact emerged in November 1922. The compact was not complex. It divided the river’s watershed into the upper and lower basins, with the dividing line at Lee’s

Ferry above the Grand Canyon in northern Arizona. 7.5 million acre-feet were allotted to each basin annually, although the lower basin could increase its share by another million acre-feet (presumably from tributary flow). 50 The compact did not

48 Nadeau, The Water Seekers, 175-176. 49 Ibid., 173-14. 50 Hundley, The Great Thirst, 214. 23

divide the water among the states, leaving the lower basin states of California,

Arizona, and Nevada, and the upper basin states of Colorado, Utah, Wyoming, and

New Mexico to divide their respective shares at a later time. Significantly, as future decades would demonstrate, the negotiators’ allocations were based on an

overestimation of the river’s annual yield.

The Colorado River Compact required ratification by Congress and the seven

states before dam building could occur. Six of the states had formally approved the compact by April 1923, but Arizona balked. Because the compact would suspend the

principle of prior appropriation only as between the two basins, California could still,

by earlier use, leave the other two lower basin states, Arizona and Nevada, with

relatively small apportionments. This did not bother Nevada, which failed to

anticipate twenty-first century Las Vegas, but Arizona was worried. When William

Mulholland and other Los Angeles officials began investigating a route to bring the

water to the coastal plain, Arizona’s opposition hardened. Without Arizona’s

acquiescence, the upper basin states would not support federal dam building

legislation. 51

While the Swing-Johnson bill floundered through multiple sessions of

Congress, Los Angeles and San Diego acted to establish their claims to a share of

Colorado River water. In 1924, Los Angeles and other Southern California municipalities formed the Colorado River Aqueduct Association, an advocacy group that presaged a regional approach to the importation of river water. On June 28, 1924,

51 Nadeau, The Water Seekers, 186-191; Metropolitan Water District, First Annual Report, 36. 24

the city of Los Angeles filed a state water rights claim for 1,500 cubic feet per second

(or 1,100,000 acre-feet per year of constant flow) from the river. In the 1924 city

elections, in which Boulder Dam was the major political issue, dam supporters were

swept into office by large majorities. In 1925, the Los Angeles electorate approved $2

million in bonds to fund aqueduct engineering and investigation work. Angelenos’

desire to secure another water source was fueled by predictions of municipal growth and the presence of a lingering drought. Also in 1925, a bill was introduced in the

California legislature to authorize formation of a regional water district to import supplies from the river. 52 The bill did not pass that year, primarily due to fears of the

power of a regional agency dominated by Los Angeles, but the process had begun.

San Diego Water Politics in the 1920s

In San Diego, the impetus to access Colorado River water was not as compelling.

After its early leadership of the League of the Southwest, the city had taken a back

seat to Los Angeles in the pursuit of imported water. The primary reason for San

Diego’s lack of enthusiasm was that the region had not yet taken full advantage of

local supplies. Although the opportunities were there, infighting among civic leaders

over construction priorities, along with the continuing dispute over pueblo rights,

delayed development of regional resources in the 1920s.

Water policy for the city of San Diego was the domain of the city council and

the mayor. In 1919, San Diego voters created a semi-autonomous Board of Water

52 Nadeau, The Water Seekers, 190-192; Metropolitan Water District, First Annual Report, 37-38. 25

Commissioners, emulating the Los Angeles example of putting water development in

the hands of administrators who supposedly operated outside the sphere of elective

politics. However, when conflicts over power and policy arose between the

commissioners and the city council, the elected officials who controlled the city’s

purse strings won out and the board was abolished by popular vote in 1923.53

Also in 1923, the city council hired a nationally respected engineer, John R.

Freeman, to investigate how water might be supplied to the growing community for the foreseeable future. The Freeman Report, issued in May 1924, recommended the construction of a series of dams on the San Diego River and its tributaries, beginning

with a dam at Mission Gorge, and later the development of other county drainages.

The council and mayor then advocated funding of dam construction on the San Diego

River, but for different projects. The mayor backed Freeman’s recommendation to

build a dam at Mission Gorge first, but the council commissioned a rival study that

recommended new dam construction begin in the back country at El Capitan. Bond measures were put before the voters in 1924, and in acrimonious campaigns the

Mission Gorge site was rejected and El Capitan approved. The elections, however,

did not end the dispute, and public quarrels over water policy continued into the

1930s.54 In fact, political squabbles and uncertainty over the city’s pueblo rights delayed completion of El Capitan Dam until 1935.

53 Heilbron, History of San Diego County, Part II, 270-271. 54 For a discussion of San Diego water politics in the 1920s and 1930s, see Strathman, “Dream of a Big City,” Chapters 2, 3, and 4. 26

In addition to the local construction projects it recommended, the Freeman

Report is also remarkable for the limitations it suggested. Freeman questioned whether the progressive ideal of continuous growth was appropriate for the idyllic

San Diego community. If “there is not too much of a hurry to merely secure additional ‘population’,” Freeman argued, the city would be able to retain its unique charm and function under a limited water supply. Further, the report attempted to dampen prospects of access to a Colorado River supply. The report stated that “for

San Diego to rely upon obtaining water from the Colorado River… is like reliance upon finding at some future day ‘the pot of gold at the end of the rainbow’.”55

Despite Freeman’s pessimism, many San Diegans believed the Colorado

River was indeed the answer to the region’s water requirements. Members of the city council first discussed the necessity of drawing on the river on July 25, 1921, and

Councilman Fred Heilbron proposed that the city should claim at least 112,000 acre- feet per year.56 However, it was not until April 15, 1926, that San Diego filed a state claim for 112,000 acre-feet of river water.57 It is not clear why it took so long to make the claim, but based on the law of prior appropriation, the delay put San Diego behind

55 John R. Freeman, “The Freeman Report: Summary of Recommendations Regarding Future Extensions of Water Supply for the City of San Diego, California” (May 16, 1924), 1, SDCWA archives. 56 Shelley J. Higgins, This Fantastic City – San Diego (San Diego: City of San Diego, 1956),210; San Diego County Water Authority, First Annual Report, 27. The reason why Heilbron recommended 112,000 acre-feet has so far eluded historians. The amount is equal to a constant flow of 155 cubic feet per second, or 100 million gallons per day. 57 San Diego County Water Authority, First Annual Report, 27. 27

not only the agricultural interests that were already using the water, but also the city of Los Angeles, which had filed in 1924.

Creation of the Metropolitan Water District of Southern California

While Los Angeles acted alone in purchasing Owens Valley water rights and constructing the Los Angeles Aqueduct years earlier, city officials desired a regional effort to secure Colorado River water. The cost of an aqueduct from the river exceeding 200 miles in length was more than even Los Angeles could manage by itself. Also, the city and neighboring communities had established an economic and cultural interdependency that, to thrive, required mutual growth.58 The preference for

combined action was not just about finances. City officials believed a regional effort

would be more effective in establishing state and federal water rights and securing

hydroelectric power. Further, a regional water consensus could counter the statewide

political isolation of Los Angeles resulting in large part from its reputation as the

villain in the “rape” of Owens Valley.59

Communities around Los Angeles had three basic options with regard to

future water supplies. First, those with adequate groundwater supplies could decide to

forego more expensive imported water, at least for a while. Second, annexation to the

city of Los Angeles would provide access to Owens Valley water, although local

autonomy would be lost and that resource alone was not sufficient for the entire

58 Cooper, Aqueduct Empire, 82; Hundley, The Great Thirst, 217-218. 59 John C. Bollens, Special District Governments in the United States (Berkeley: University of California Press, 1961), 82; Erie, Beyond Chinatown, 46. 28

region. Third, despite fears that Los Angeles might dominate a regional agency, many

of the smaller municipalities chose that option. Going it alone for a distant imported water supply was financially out of the question. The cost of an aqueduct from the river was far more than any of them could bear without a Los Angeles alliance.60

In addition to concerns about Los Angeles domination, the state legislative bill

to create the metropolitan water district was hindered in 1925 by the ideological issue

whether public utilities should be operated by government or private interests. The

dispute was triggered nationally by Senator George Norris, a progressive Republican,

who advocated a government-run hydroelectric project at Muscle Shoals on the

Tennessee River. The Los Angeles Times, which saw the dispute primarily as an

electric power issue (the new metropolitan water district would be authorized to

purchase power), sided with traditional Republicans who wanted private interests in

charge.61

After the 1925 enabling bill failed in the legislature, public sentiment rallied

in favor of the nascent water district. In November 1926, Republican-Progressive

Clement C. Young was elected governor on a platform of strong support for all the

Colorado River projects as well as the metropolitan water district bill. Shortly after

Young took office, the bill was reintroduced and passed by an overwhelming majority in both chambers of the state legislature. In response to ongoing concerns that Los

Angeles would control the new district, the 1927 version of the act was changed to

60 Oshio, “Urban Water Diplomacy,” 56. 61 Ibid., 64. 29

provide that no city would possess more than fifty percent of the vote of the

governing board. This was significant because voting strength would be based on assessed property valuation, which was concentrated in the city. 62

The 1927 Metropolitan Water District Act (MWD Act) was not limited to the

formation of a district in the Los Angeles area or for procurement of water from the

Colorado River, but that was the reason for its passage. The original act provided for

a district comprised solely of municipalities, and formed by approval of the joining

cities and their electorates. By prior arrangement, the city of Pasadena initiated the

process for creation of the Metropolitan Water District of Southern California in

1928, and upon ratification by the governing bodies of eleven cities and approval by voters, the MWD was born. The original eleven member cities were Beverly Hills,

Burbank, Glendale, Los Angeles, Pasadena, Santa Monica, San Marino, San

Bernardino, Colton, Anaheim, and Santa Ana.63

Although the membership of MWD came from a multi-county area, the city of

San Diego was not included. The possibility of San Diego membership in a Los

Angeles-based district had been raised in the 1920s. In fact, San Diego’s 1926 water

rights filing contemplated a point of diversion from the river either at Laguna Dam, utilizing the proposed All-American Canal, or further north at Palo Verde, using a

62 Ibid., 71-72. 63 Metropolitan Water District, First Annual Report, 39. Although approved by their city councils, the electorate of Glendora and Orange voted down participation in MWD, and were therefore excluded from the original membership. 30

proposed aqueduct then being studied by the city of Los Angeles. 64 San Diego

officials attended early MWD meetings with a view toward participation, either

through membership or by the lease of space in the contemplated Colorado River

Aqueduct.65 The idea of San Diego membership also interested MWD. Shortly after

MWD was created, one of its officers suggested the eventual membership of San

Diego, although recognizing that it would entail significant cost and construction to

extend an aqueduct that far south.66 San Diego, however, decided against MWD membership, at least for the time being, because of the expense of transporting the water, the fact that local resources had not yet been fully developed, and the ever- present fear of Los Angeles domination. Some San Diego civic leaders, including

City Engineer Hiram Savage, did propose an eventual regional water agency, but for communities within San Diego County. 67 In any event, the time was not yet ripe for such an enterprise.

The creation of MWD was only one of a series of steps needed to bring

Colorado River water to the Southern California coastal plain. Other measures required before the dream could become reality were congressional ratification of the

Colorado River Compact and authorization for a dam, apportionment of the river among the lower basin states and within California, a delivery contract with the federal government, and an aqueduct to transport the water.

64 San Diego County Water Authority, First Annual Report, 46. 65 Ibid., 90. 66 Franklin Thomas, “Metropolitan Water Distribution in the Los Angeles Area,” Annals of the American Academy of Political and Social Science 148, part 2 (Mar. 1930): 9-10. 67 Strathman, “Dream of a Big City,” 274-280. 31

Metropolitan Water District Organization

Because the MWD Act was created specifically to permit the formation of the

Metropolitan Water District of Southern California, the authors had significant discretion in determining its terms. This begged the question as to the type of organization the enactors desired. William Mulholland and other Los Angeles leaders

wanted a district with a governing structure similar to that of the Los Angeles

Department of Water and Power; that is, an appointed board of directors insulated

from politics and popular control. As this was yet another application of the

Progressive Era bias in favor of strong administration by expert-guided independent

commissions, there was little opposition to that form of governance.68

MWD was set up as a cooperative among the eleven cities that formed its

original membership, with the issues of district funding, voting rights, and the right of

access to the district’s water supplies in times of shortage tied to each other. Directors

were appointed by the member municipalities. Each member was entitled to at least

one director, but could also appoint one additional director for each $200 million of

its assessed value. Under that formula, each member city had one director, except Los

Angeles, which appointed three. If a member had more than one director, its directors

were required to vote as a bloc. 69

Regardless of the number of directors, each member city had one vote for

each $10 million dollars of assessed value within its corporate limits. However, no

68 Hundley, The Great Thirst, 219. 69 Metropolitan Water District Act, Stats. 1927, Chap. 429, p. 694, Sec. 6. 32

member city could have more votes than all of the other members combined.70 This

limited Los Angeles’ voting strength to fifty percent of the total. If the limitation were

not in effect, the city’s original voting power would have been about seventy five

percent of the total. 71

Just as voting strength was tied to assessed value, so was district funding, at least in the early decades. The MWD Act required the board of directors, so far as practicable, to pay district operating expenses, and principal and interest on bonded debt, from water revenues (emphasis added).72 However, until the Colorado River

Aqueduct was completed in 1941, MWD had no water to sell, and for years thereafter

water rates had to be kept low to compete with the cost of other available water.73

This left property taxes as the bulwark of MWD funding. As late as 1950, ninety

percent of MWD’s income was derived from taxes.74 The balance of taxes versus

water sales revenues as sources of income for MWD proved to be one of the longest

and most rancorous debates among member agencies in the decades to come. Los

Angeles, with by far the largest tax burden but relatively small draw on MWD water

supply, continuously argued for greater reliance on water sales revenues. Member

agencies that bought a larger share of the MWD water supply than their percentage of

assessed value were generally pleased with taxes as the largest revenue producer.

70 Ibid. 71 Metropolitan Water District, First Annual Report, 4. 72 MWD Act, Sec. 7(j). 73 Gottlieb and FitzSimmons, Thirst for Growth, 10. 74 Stanley Scott and John C. Bollens, “Special Districts in California Local Government,” The Western Political Quarterly 3, no. 2 (1950): 241; The assessment of property taxes was authorized by Section 5(7) of the MWD Act. 33

The MWD Act also tied member city financial contributions to their share of the district water supply in the event there was not enough to satisfy demands. A

member’s share of water in times of shortage, known as a “preferential right,” was

determined by its share of total contributions to MWD toward capital cost and

operating expenses over time, from property taxes. This formula was changed in 1931

to include member contributions from sources other than property taxes, but

excepting the purchase of water. The effect of the preferential rights provision was

that, during a shortage, rights to available supply would not be based on need but

rather on assessed value and taxes paid. 75 The preferential rights rules had little

impact during MWD’s early years because there was no Colorado River Aqueduct, and for years thereafter because there was no water shortage. However, even when a

shortage was not imminent, the future threat of a preferential rights apportionment

drove policy decisions for member agencies, particularly SDCWA, that consistently

purchased water from MWD in excess of their preferential right.

MWD organization, then, was more akin to a private corporation than an exercise in general government. The member cities were essentially shareholders whose voting rights were roughly equivalent to their share of district revenues, and who, in times of shortage, had a right to purchase water in proportion to their contributions. The system was fair in the sense that a member’s voice in district affairs and its share of benefits were measured by its contribution, but that does not necessarily mean it was good government. If the MWD system of allotting voting

75 MWD Act, Sec. 5 ½. 34

rights were applied to general government, each person’s vote would be counted in

the same proportion to the whole vote as his or her taxes were in proportion to total tax receipts. This would give a small minority of the electorate the majority of the vote and drastically alter governmental decision making. As contrary as that notion may appear to a democratic ideal, it is by no means confined to MWD. MWD is only

an example, albeit a prominent one, of governmental special districts that operate in

this manner.

Special Districts – Good Government or Anti-Democratic?

Special districts are many and varied, and for that reason must be defined broadly

according to their characteristics. Generally, special districts are a class of

governmental units which possess substantial fiscal and administrative independence

and are not merely part of other governments.76 Additionally, special districts almost

always provide a single service or limited services.77 In terms of numbers of governmental units, special districts have for several decades outnumbered the combined total of all other governments in the United States. By 1950, compared with 304 cities and 57 counties, California had 4,437 special districts.78 In 1980, the state of California counted 4,948 special districts within its boundaries. 79

76 Bollens, Special District Governments, x. 77 Foster, The Political Economy of Special Purpose Government, 2. 78 Scott and Bollens, “Special Districts in California,” 233. 79 Joint Legislative Audit Committee, Office of the Auditor General, “Report P-915: Special Districts: Opportunities for Benefits Through Jurisdictional Changes,” (State of California, 1980): 35

Special districts in California are creatures of the state assembly, which

authorizes district formation through enabling legislation. A special district can be

formed under a general act, which permits the creation of several such districts. An

early and often-used example was the Irrigation District Act, or the ”Wright-

Bridgeford Act,” which became law in 1897, and by 1925 had 107 irrigation districts

functioning under its authority. As the progressive impetus for government

involvement in services grew, the state assembly enacted the Municipal Water

District Act of 1911, and the County Water District Act and California Water District

Act in 1913. A special district might also be formed under a special act, which by its

terms permits only one particular district. The first such special act in California was

the Los Angeles County Flood Control Act of 1915, but such acts did not become

common until the 1940s.80

MWD required an innovative enabling act because its multi-county membership and the powers required to import water long distances did not fit within

the confines of any existing law. Although the act was tailored to the needs of what became the Metropolitan Water District of Southern California, other metropolitan districts were allowed under the act, but none have ever been formed. As the only entity operating under the act, MWD has been able to secure amendments over the

4. Because the definition of a special district is broad, different sources may disagree on what government entities come within the definition. 80 Albert T. Henley, “The Evolution of Forms of Water Users Organizations in California,” California Law Review 45, no. 5 (1957): 667-668. 36

decades without having to be concerned about districts that would have been similarly

affected.

MWD’s framers could have created a district in which voters elected the governing body. That has historically been the case with special districts in the United

States.81 MWD, however, was not intended as an exercise in democracy. Rather, it

was a cooperative of cities that paid to play, and whose voting power and water rights

were roughly in proportion to their financial contributions. MWD was not the first

special district of this ilk and certainly not the last, but the act gave it one important power that has rarely been granted to appointive bodies: the power to tax. Today,

nearly all taxing districts have elected governing bodies, a structure consistent with the core democratic principle demanding no taxation without representation.82 MWD

is an exception. As a practical matter, MWD clearly needed the ability to levy

property taxes, at least in the early years. Construction bonds had to be paid before

there was any water to sell. And in any event, the process was not totally without

public consent. The formation of MWD required a popular vote, as did MWD’s decision to sell bonds to fund the Colorado River Aqueduct.

Nevertheless, MWD was deliberately organized as an institution that would be

insulated from politics and the electorate. Whether that has been beneficial or

detrimental in the long run is largely theoretical, because one can only guess at the

81 Bollens, Special District Governments, 31. 82 Foster, The Political Economy of Special Purpose Government, 7. 37

result if MWD had a popularly elected governing body, or if some other arrangement

had been made to import water into the region.

MWD’s efficiency both as to its primary mission of importing water and the cost of doing so will be a topic for the remainder of this thesis. That inquiry will also

be directed toward SDCWA, which was created later, but with a governance structure

copied from MWD. There has been significant debate whether MWD specifically,

and special districts generally, are on the whole better suited to accomplish their

purposes than some other form of organization. On the one hand, an appointive board

of directors lacks accountability to voters, and because it is not subject to periodic

elections tends to escape public scrutiny. On the other hand, because it is shielded

from the potentially sharp political and policy swings of state and local general-

purpose government, MWD may better achieve long-term planning and policy

results.83

Aside from the method of selecting the governing body, is governmental

efficiency fostered or impeded by a large metropolitan special district? A special district by its nature usually serves one primary purpose, and may be the only governmental entity performing that function within its boundaries. For that reason, district policy makers do not have to negotiate the tradeoffs and compromises that general purpose governments must inevitably make in order to provide a variety of services with limited resources. But it can work both ways. While a single purpose

83 Erie, Beyond Chinatown, 15. 38

allows concentration, it can also limit the range of alternatives when decision makers

disagree on the means of achieving broad goals.

Coupled with its relative obscurity and independent funding sources, a

district’s emphasis on just one function may result in relatively higher proportional

investment in district-provided services.84 However, while that may increase

expenditures for a particular service, in MWD’s case the delivery of imported water,

it has not as a matter of course meant that MWD is less efficient than a general purpose government. It merely has a different priority.

Within the confines of a special district, a bureaucratic structure will develop and evolve. That structure is not static, and will oscillate depending on the relative strengths of members of the governing body and executive management, and the extent to which they are able to work in tandem. Unity of purpose within an organization increases the ability to achieve goals and effectively combat entities with opposing agendas. While unity is more easily achieved within an appointive special district than in an elective general government, MWD and SDCWA have both experienced periods of internal dissension.

Passage of the Boulder Canyon Project Act and Agreement on River Allocations in California

Although MWD was created as the agency designated to import Colorado River water to the Los Angeles region, the water could not be delivered until the federal

84 Foster, The Political Economy of Special-Purpose Government, 174-176, 190. 39

government agreed to provide it and an aqueduct was built to connect the river with the coastal plain. After repeated attempts, the Swing-Johnson Bill was passed as the

Boulder Canyon Project Act (BCPA) in December 1928. Faced with Arizona’s continuing opposition, to take effect the act required ratification by the seven basin states or ratification by six of the basin states, one of which had to be California,

provided that California also agree that its use of the river would not exceed 4.4 million acre-feet of that amount apportioned to the lower basin states, plus one-half of any excess. The BCPA authorized Arizona, California, and Nevada to apportion among themselves the lower basin allotment of water, but gave the Secretary of the

Interior the ability to do so in the absence of an agreement. Construction of Hoover

Dam and the All-American Canal were authorized, the cost of the dam to be repaid through hydropower revenues, and the cost of the canal to be repaid in installments by its users.85

The basin states, excepting Arizona, ratified the BCPA, California passed legislation recognizing its limitations under the act, and President Hoover issued a

proclamation in June 1929 that the BCPA was in effect.86 Of the lower basin

allotment of 7.5 million acre-feet, California had limited itself to 4.4 million acre-feet,

although it could receive one-half of any “excess” as described in its limitations act.

Although the exact amount of the state’s allotment was somewhat fuzzy, the entities

85 Public Law No. 642, 70th Cong.; 45 Stat. 1057; Ray Lyman Wilbur and Northcutt Ely, The Hoover Dam Power and Water Contracts and Related Data (Washington D. C.: United States Government Printing Office, 1933), 8-14. 86 Metropolitan Water District, First Annual Report, 43-44. 40

in California claiming rights on the river were ready to divide it among themselves. In

February 1930, the Colorado River commissioners of California, including

representatives of the Governor, the Boulder Dam Association, and parties claiming water rights, recommended a division of the California allotment. Under their

“Preliminary Agreement,” the “Agricultural groups,” consisting of the Imperial

Irrigation District, Coachella Valley Water District, Palo Verde Water District, and other agricultural interests were to receive “Class A water” in the cumulative amount of 3.85 million acre-feet. MWD was to receive 550,000 acre-feet of Class A water, with that class totaling 4.4 million acre-feet. After the apportionment of Class A water, MWD was to receive the next 550,000 acre-feet, bringing its total to 1.1 million acre-feet; any additional water was reserved for the agricultural group.87 The

position of the agricultural group reflected their senior water rights priorities under

California water law, which would likely have been enforced by the United States if the parties had not come to an agreement.

In April 1930, MWD signed a contract with the Secretary of the Interior for the delivery of 1.05 million acre-feet of water, 50,000 acre-feet less than the

Preliminary Agreement assigned the district. The Secretary’s reason for shorting

MWD was to “provide a margin against further demands from the California Coastal

Plain on behalf of cities not members of the Metropolitan Water District.”88 That

reference had to be to San Diego, the only other entity on the coastal plain that

87 Wilbur and Ely, The Hoover Dam Power and Water Contracts, 549. 88 Ibid., 31, 297-306. 41 claimed rights on the river. In effect, the federal government was acting to remedy the omission of San Diego in the Preliminary Agreement.

The failure to include San Diego in the Preliminary Agreement is curious both from San Diego’s lack of participation and the drafters’ lack of concern for the city’s

1926 water rights application. Former San Diego Mayor John Bacon, the chairman of the Colorado River Commission, was a signatory to the agreement, but apparently neither notified San Diego officials of the proposed agreement nor asserted any rights on behalf of the city. This was despite the fact that Bacon was mayor when the water rights claim was filed in 1926.

Shortly after the Preliminary Agreement was signed, the news somehow was conveyed to San Diego civic leaders and the public. The result was an uproar that sent

City Engineer Hiram Savage at the head of a delegation to lobby the Interior

Department and California authorities to give San Diego a place in the California river allotment. That place would be toward the end of the line and relatively small, since San Diego had filed its claim two years after Los Angeles, and at one-tenth of the Los Angeles claim. Nevertheless, the 1926 claim merited a seat at the table.

In response to San Diego’s complaints, Preliminary Agreement participants maintained that they assumed former Mayor Bacon had represented the city’s interests, and absent his objection, San Diego’s exclusion was appropriate. Bacon 42

stated he had not represented San Diego, and that the city council had been negligent

in not attending the proceedings that resulted in the proposed California allocation. 89

After renewed negotiations, the California parties submitted a new

apportionment recommendation to the Secretary, entitled the Seven Party Agreement.

The recommendation, this time with San Diego’s participation and consent, followed

the Preliminary Agreement, with important exceptions. The Agricultural group

retained rights to the first 3.85 million acre-feet, but three priorities were established

within that group to recognize each district’s relative seniority. The fourth priority, at

550,000 acre-feet, went to MWD, rounding out California’s basic allocation of 4.4

million acre-feet. The fifth priority was shared by MWD, at 550,000 acre-feet, and

the city and county of San Diego, at 112,000 acre-feet, the same amount as the city’s

1926 water rights filing. 90 The record is unclear why the city of San Diego water

rights application was transformed into a right shared by the city and county of San

Diego. Perhaps the city recognized that importation of Colorado River water had to be a regional effort, although it would be years before that effort coalesced. William

Jennings, a local water lawyer and later the general counsel of SDCWA, stated decades later that the Secretary of the Interior required that the federal water right be awarded jointly to the city and county because the 1926 state claim had been made on behalf of “San Diego” and not the “City of San Diego.”91

89 “Name of Bacon on Water Pact Adds to Tangle,” San Diego Union, March 31, 1931. 90 Northcutt and Ely, The Hoover Dam Water and Power Contracts, 32-35, 555-560. 91 William Jennings, “William H. Jennings; Water Lawyer” (Los Angeles: University of California Los Angeles Oral History Program, 1967), 23. 43

In San Diego, the efforts of Engineer Savage to obtain a stake in the river for

the city were praised and celebrated.92 Although San Diego’s allocation was in the

fifth priority and outside California’s basic allocation of 4.4 million acre-feet, government officials and business leaders believed there would be sufficient surplus in the river to fill San Diego’s apportionment for the long term. Phil Swing argued that “[t]hese technical priorities… are of little importance, since the total of all

California contracts is well within our legal limit, and since Boulder Reservoir will have ample storage to meet all demands.”93

The Secretary of the Interior accepted the Seven Party Agreement and executed water delivery contracts with the signatories according to its terms. The

MWD contract, an amendment to its original 1930 contract, was executed in 1931, and the contract with the city and county of San Diego was signed in 1933.94 MWD

had contracted with the Secretary in 1930 to purchase power from the new dam to

power the pumps that would be required to send the water through its aqueduct.

MWD now needed to finance and construct its Colorado River Aqueduct.

92 “Full Share of Colorado Given City,” San Diego Union, June 14, 1931; “Savage Praised for Efforts at Boulder Parley,” San Diego Union, June 26, 1931. 93 Phil D. Swing, “San Diego’s Allocation and Ultimate Need of Colorado River Water,” in History of San Diego County, ed.-in-chief Carl H. Heilbron (San Diego: San Diego Press Club, 1936), 330. 94 Metropolitan Water District, First Annual Report, 50-51; San Diego County Water Authority, First Annual Report, 31. 44

The Colorado River Aqueduct: MWD Determines a Route and Secures Funding

The construction options for the MWD aqueduct connecting the river with its service

area were provided through a report issued in November 1930 by General Manager

and Chief Engineer Frank Weymouth. The Weymouth report projected the regional

demand for Colorado River water and recommended an aqueduct route.95 Weymouth

concluded that a supply of 1,500 cubic feet per second (about 1.1 million acre-feet per

year) would cover requirements up to the year 1980. He further stated that

approximately 1,000 cubic feet per second would be consumed almost from the

beginning of the aqueduct’s planned completion in 1940. The prediction of immediate

need would be effective in mobilizing public opinion for aqueduct funding, but in the

1940s proved to have been a gross overestimation.96

The Weymouth report considered aqueduct routes ranging in the north from a

diversion point far above the future site of Hoover Dam, to an extension of the

proposed All-American Canal just north of the Mexican border. Additionally, an outside review board assembled by MWD added consideration of an aqueduct route originating at Laguna Salada in Mexico south of the Imperial Valley. 97 The

recommended route, and the one selected by the MWD Board of Directors in January

95 Metropolitan Water District, First Annual Report, 64. 96 Oshio, “Urban Water Diplomacy,” 84-87. 97 Metropolitan Water District, First Annual Report, 89-91. 45

1931, was the “Parker route,” originating on the river just above Blythe, California, and traveling west 252 miles to the coastal plain. 98

Having settled on an aqueduct route, MWD set an election for September 29,

1931, to approve a bond issue of $220 million to finance construction. Before the vote

was taken, two cities, Colton and San Bernardino, withdrew from MWD, and four

cities, Fullerton, Long Beach, Torrance, and Compton, annexed as new members.

This jockeying of membership occurred when it did because, upon issuance of the

bonds, member agencies would be bound to pay their share of the debt. After an

extensive campaign to rally public support, the bond issue was approved by a margin

of almost five to one.99

Attempts to Reroute the Aqueduct through San Diego County

Shortly after the MWD bonds were approved, San Diego interests saw an opportunity. In December 1931, San Diego businessman John Forward and consulting engineer J. C. Allison proposed that MWD build its aqueduct not along the

Parker route, but from a proposed reservoir in northern Baja California on a dry lake

bed called Laguna Salada, which had earlier been considered by MWD. Known as the

Allison-Forward route, a canal would be built from a point just south of the Mexican

border on the Colorado River to Laguna Salada. From the proposed reservoir, water would be transported by aqueduct west through Mexico, turning north into inland San

98 Ibid., 63. 99 Ibid., 329. 46

Diego County and on to Los Angeles. Proponents claimed that the cost to MWD

would be far less than with the Parker route. Engineer Allison predicted that a Laguna

Salada reservoir would hold five million acre-feet of water, and there would be plenty

of water coming down the river to fill it. In Allison’s view, the major water source

would be 3.544 million acre-feet per year released from Hoover Dam to fulfill power

contracts that could not be used for irrigation. 100 Like so many early predictions of

Colorado River water availability, time proved Allison’s forecast of bounteous excess

to be far off the mark.

San Diego developer Ed Fletcher saw in the Allison-Forward scheme an

endless supply of water for San Diego County and his land holdings, and became a

vocal advocate. Employing his formidable boosterism and salesmanship skills,

Fletcher organized a hundred car motorcade that began at San Diego and followed the

proposed aqueduct route to Laguna Salada. The festive convoy carried California’s

lieutenant-governor and several other state and local officials, including some from

the MWD service area. On the way, the 500 participants stopped in Mexicali to visit

the governor of Baja California. Predictably, Fletcher declared the trip a resounding

success.101 Despite reliability issues associated with conveying a water supply through a foreign country, salinity problems at Laguna Salada, and the opposition of

100 “Laguna Salada Must Be Built, Engineers Told,” San Diego Union, June 26, 1932. 101 “Allison Water Route is Seen at Close Range by Group of 500,” San Diego Union, May 29, 1932; “Colonel Fletcher Praises Reception Given Motorcade,” San Diego Union, May 30, 1932. 47

the Mexican federal government, Fletcher kept up a public relations campaign throughout Southern California.102

Advocates of other aqueduct routes through San Diego County surfaced as

1932 wore on. John Barger of Ramona championed a plan in which water would be taken at Hoover Dam and conveyed southward through San Bernardino County and the Borrego Valley on the eastern edge of San Diego County. The water would be deposited in a reservoir in the San Pasqual Valley near Escondido for further

transport to Los Angeles and San Diego.103 L. H. Francisco, an Anaheim resident,

proposed building an aqueduct from the western terminus of the proposed All-

American Canal into San Diego County and up the coast to Los Angeles. Francisco’s

plan included construction of a reservoir in the county that would hold 3.5 million

acre-feet of water.104 Ed Fletcher, who was not inclined to quibble over details,

declared that he could support any of the proffered routes that ran through San Diego

County. 105

Despite the hoopla by Fletcher and other business interests, local government

officials did not join the clamor for an MWD aqueduct route through San Diego

County. While they did not oppose the proposals, they also did not fight for them.

The exception was Mayor Forward, who with Allison had hatched the Laguna Salada

plan before he was elected. In any event, MWD ended the episode by emphatically

102 “Consul States Mexican Stand,” San Diego Union, June 4, 1932. 103 “Colorado River Project by Way of County Bared,” San Diego Union, June 25, 1932. 104 “San Diego Route Urged for River Water Aqueduct,” San Diego Union, August 7, 1932. 105 “Los Angeles Citizens Urge Delay on Parker Route Until Southern Water Project is Investigated,” San Diego Tribune, September 17, 1932. 48

refusing, in response to a letter from Fletcher, to reconsider its decision to adopt the

Parker route. The district asserted that the costs of the southern routes were more than

double those of the Parker route, and in a slap at Fletcher stated that his plans

“involve at least a considerable degree of speculative land promotion and

development schemes.”106

San Diego Signs Its Colorado River Contracts

With dreams of an MWD aqueduct through San Diego County dashed, the city of San

Diego took the first steps toward receiving its allocation of Colorado River water

independent of the MWD system. On February 15, 1933, the city signed an

agreement with the Bureau of Reclamation for delivery of its Colorado River apportionment. The contract adopted the priority system of the Seven Party

Agreement, with San Diego’s fifth priority of 112,000 acre-feet outside California’s basic allotment of 4.4 million acre-feet. The contract also ostensibly gave San Diego

the opportunity to store up to 250,000 acre-feet of its unused yearly apportionments in

Lake Mead, although other states objected to that provision as a violation of the Law

of the River, and such storage has never been realized. Reclamation’s delivery

obligation was to make the water available at a point on the river immediately above

Laguna Dam, near Yuma. This meant the city did not plan to use the MWD aqueduct,

and instead would acquire space in the All-American Canal and construct its own

conveyance facilities from the canal’s western terminus to the city’s reservoirs.

106 “Fletcher Plan Repudiated by District,” San Diego Union, October 16 1932. 49

Significantly, the contract provided that if San Diego could not take the water within

ten years after the completion of Hoover Dam, the Secretary of the Interior could

declare the agreement null and void. Finally, because the allocation of water was to

the city and the county, the contract required and received the county’s approval.107

On October 2, 1934, the city contracted with the Bureau of Reclamation for space in the proposed All-American Canal. San Diego was required to pay that portion of construction costs equal to the proportion that its 112,000 acre-feet of capacity bore to the entire canal capacity. Since the canal would be built to deliver over three million acre-feet per year to IID, San Diego’s proportion was relatively small. The payment terms were exceedingly generous. San Diego was to repay its

share of construction costs in 38 annual installments, with payments weighted more

heavily in the later years. Because no interest was to be charged on the unpaid

balance during the course of repayment, the city effectively received a huge discount.

Finally, implementation of the contract was contingent on approval by a city election

requiring a two-thirds majority. 108

San Diego Inaction in the 1930s

The city wasted no time submitting the question to the voters at the general election of November 6, 1934, amid a strident public relations campaign in its favor. The

107 Ray Lyman Wilbur and Northcutt Ely, The Hoover Dam Documents: Second Edition of ‘The Hoover Dam Power and Water Contracts and Related Data” 1933 (United States Government Printing Office: Washington D. C., 1948) “Contract for Delivery of Water,” A513-A521. 108 Ibid., “Contract for Construction of Capacity in Diversion Dam, Main Canal and Appurtenant Structures,” A671-A686. 50

Chamber of Commerce organized the United Citizens’ Water Committee on October

9 to press the issue, and the San Diego Union gave their efforts front page coverage.

By this time, the city’s obligation was estimated at $450,000, and was touted as both

a bargain and a requirement for the future growth of San Diego. Phil Swing, now

retired from Congress, maintained that other communities had applications pending

for Colorado River water, and if the voters turned down the agreement, “the water

allocated to the city will go to them.” 109 A Union editorial stated that “[W]ater necessarily takes precedence over all other issues in San Diego” and “there will be no

second opportunities in this case.”110 Despite the dire warnings, the measure failed to

win the required two-thirds majority, with about 32,000 in favor and 20,000

opposed.111 The measure was resubmitted for the municipal election on April 23,

1935, with the San Diego Union publishing pleas from Phil Swing, United States

Bureau of Reclamation Director Elwood Mead, and State Engineer Edward Hyatt to commit the funds. It again failed, this time by a vote of 19,000 in favor and 14,000 opposed. In addition to skepticism whether imported water would be needed in the foreseeable future, voters were concerned about the estimated $20 million cost of an

109 “Group Organizes to Guard City’s Future: Voters Requested to Provide Way for Water Needs,” San Diego Union, October 10, 1934. 110 “Water Comes First,” San Diego Union, October 10, 1934. 111 “Council Delays Water Program Until Canvass,” San Diego Union, November 8, 1934. 51

aqueduct connecting the western end of the All-American Canal with San Diego reservoirs, and the salt content of river water.112

The failure of the All-American Canal vote, along with two failed votes on

local water projects that occurred in the November 1934 election, contrast sharply

with popular support for water initiatives in the Los Angeles area. The repeated

overwhelming votes of Los Angeles citizens to support imported water measures in

the 1920’s, and the vote within the MWD service area to authorize the $220 million bond issue for the Colorado River Aqueduct in 1931, were obtained in response to public relations efforts similar to those employed in San Diego. One major difference,

however, was that while San Diego supporters claimed a decision was urgent, they acknowledged that a water shortage was not imminent. In fact, a leading proponent of the city’s contract for All-American Canal space accepted a forecast that the city would not need Colorado River water for about 40 years.113 In Los Angeles,

supporters of the MWD bond argued that Colorado River water would be needed as soon as the aqueduct could be built. Ironically, it turned out that the San Diegans would need imported water sooner than they had expected, and MWD, when its aqueduct was completed, was able to market little water.

With the All-American Canal contract between the United States and San

Diego in limbo, the city renewed discussions with MWD regarding the possible use

112 “Importance of Vote for Ratifying Canal Contract is Stressed by Three Authorities,” San Diego Union, April 21, 1935; “Council Canvass of Record Vote for City’s New Deal Set Today,” San Diego Union, April 25, 1935. 113 Joseph E. Kuhn, “Future Support of Opponents to Three Water Issues on Nov. 6 Ballot is Urged as City Faces Problem,” San Diego Union, November 25, 1934. 52

of the district’s Colorado River Aqueduct to convey its water. San Diego asked MWD

to consider a temporary or permanent lease of space in the aqueduct, in addition to an

alternate scenario in which San Diego would annex to MWD as a member agency.

The MWD reply, in a letter dated May 13, 1936, was that the only basis on which San

Diego could use the aqueduct would be through annexation to MWD, which would

require a pooling of the city’s water right with MWD and payment of a sum in lieu of

back taxes.114

Meanwhile, the city’s Hydraulic Engineer, Fred Pyle, was conducting an

investigation of the city’s water requirements and resources. That study was followed

by the report of an appointed engineering board, which recommended that San Diego

develop local resources before tapping the Colorado River, starting with the

development of a reservoir on San Vicente Creek. The engineers’ report refocused

attention on local supplies, and negotiations for annexation to MWD were again set

aside.115

Voters finally approved ratification of the canal contract on April 25, 1939.

The San Diego Union again ran uniformly favorable articles, and proponents garnered

almost 71 percent of the vote. At the same time, a proposition to obtain bonds for the

construction of San Vicente dam was defeated, but with a 60 percent majority in

114 San Diego County Water Authority, First Annual Report, 91-92. 115 Ibid. 53

favor.116 A bond for the dam finally passed at the general election of November 5,

1940, with over 78 percent of the vote.117 Supporters did not then realize that San

Vicente reservoir would prove a vital component of the region’s imported water

system before the end of the decade.

As the 1940s began, MWD was only a year away from completing the

Colorado River Aqueduct, while San Diego had no firm plan or timeline for ever

getting imported water to the region.

World War II and the San Diego’s Water Crisis

As it turned out, the 1937 study forecasting regional water requirements did not

account for the phenomenal growth that occurred in San Diego as the nation was

drawn into World War II. The federal government rapidly increased the area’s

military presence and the local defense industry kept pace. From 1940 to 1946, the

population of San Diego County increased from 289,348 to 552, 804.118 Far sooner than expected, water shortages were a looming possibility. San Diego’s response was

not to take immediate action to arrange the transport of its Colorado River allocation,

but rather to start a campaign to place the burden on the federal government. That

effort, led by the San Diego Chamber of Commerce, was in full swing by late 1941, even before America’s entry into the war, and was characterized by a huge 30-page

116 “Three Water Problems before S. D. Voters; Pyle Gives Background of Ballot Items,” San Diego Union, April 23, 1939; “Resignation Rumors Spiked; Flack Silent,” San Diego Union, April 27, 1939. 117 San Diego Union, November 7, 1940. 118 San Diego County Water Authority, First Annual Report, 41. 54

folder apparently designed as a persuasive display. 119 The folder provided water

consumption statistics for area military establishments, defense industries, and federal

housing, illustrating their steep increase in water usage and even higher estimates for

1942. Population growth was likewise presented, indicating that the estimates of the

1937 study had been far exceeded due to the national defense activities. The document stated that “a careful study of the situation is indicative of the fact that this

is not a San Diego problem…. [T]he problem of a sufficient, secure water supply… becomes primarily a national defense problem and should be recognized and treated as such.” In other words, the federal government should pay for the connection to

Colorado River water. The folder also advocated delivery through a connection to

MWD’s Colorado River Aqueduct versus an extension of the All-American Canal, presumably because it would take less time to build, was more accessible to north county military bases, and as an emergency measure would not require San Diego’s annexation to MWD.

The federal government failed to take the hint that it should build an aqueduct,

suggesting the situation was not as bad as all that.120 As 1942 faded to 1943, there was still no definitive action toward construction. The United States did contract with

the city in May 1943 to conduct studies regarding the cost of a connection with the

119 “The Need for Stand-by Water for the San Diego Area” (San Diego, 1941), SDCWA archives. 120 Strathman, “Dream of a Big City,” 329. 55

Colorado River Aqueduct and the All-American Canal, studies that would not be completed until after they had become obsolete.121

Creation of the San Diego County Water Authority

Because the 1933 contract for the delivery of Colorado River water was for the benefit of the “City of San Diego and/or the County of San Diego,” neither the city nor the county could unilaterally take control of the water or dictate its use.

Advocates had recognized since the early 1930s that a separate organization would be required for that purpose, but it was not until 1943 that action was taken.122 Lacking

an existing state law authorizing a regional water agency that could include all

potential member agencies in San Diego County, at the behest of local officials State

Senator Ed Fletcher sponsored the County Water Authority Act (CWA Act), which

became law on May 17, 1943.123

The CWA Act was drafted by a consortium of three water attorneys, namely

Phil Swing, the former congressman acting as special counsel for the city of San

Diego, Shelley Higgins, former San Diego city attorney but now counsel for the north county Fallbrook Public Utilities District, and William Jennings, counsel for the east county La Mesa, Lemon Grove and Spring Valley Irrigation District.124 The drafters

appropriated the MWD Act in large part, copying MWD’s governing structure,

121 San Diego County Water Authority, First Annual Report, 37. 122 Ibid., 11. 123 County Water Authority Act, Stats. 1943, Chap. 545. 124 Jennings, “William H. Jennings; Water Lawyer,” 32-34. 56

except that member agencies could include any public agency empowered to acquire

and distribute water, not just municipalities as the MWD Act had originally

provided.125 As with the MWD Act, no agency could have more than fifty percent of

the total vote of the board of directors.126 This provision was, of course, directed at the city of San Diego which, with voting strength determined by assessed property value, would otherwise have had eighty percent of the vote. Unlike the MWD Act, however, a County Water Authority could not acquire water or water rights within its

own county. 127 This provision came at the insistence of Shelley Higgins, the drafter from the north county, where locals were afraid that the new agency might interfere with their own development of the Santa Margarita and San Luis Rey Rivers.128

The choice of the MWD Act as a model for the CWA Act made sense. Time was short by 1943, and imported water would be required in the near future. By working from the MWD Act, the CWA Act drafters produced a bill in short order.

Also, with the MWD Act as a reliable precedent that had been in use since 1928, the

CWA Act was passed by the state legislature quickly and overwhelmingly. From an institutional standpoint, a MWD-style structure guaranteed control by the member agencies. The CWA Act could have been organized so that its board of directors would be popularly elected, and the agencies that received its water would have been mere customers rather than constituent members who appointed their own directors.

125 CWA Act, Sec. 3. 126 Ibid., Sec. 6 127 Ibid., Sec. 5(11). 128 Jennings, William H. Jennings; Water Lawyer, 34-36. 57

However, an independent board of directors that would be more concerned about voters than the member agencies was not something the drafters wanted. The specter

of city domination of the board did give the smaller agencies pause, resulting in the

compromise that limited San Diego’s vote to fifty percent of the total. The city of San

Diego, in effect, would occupy the role in the new agency that Los Angeles played at

MWD.

With the CWA Act in place, the new regional agency could be formed. Under

the act, the legislative body of each public agency intending to join the water

authority would pass a resolution to that effect and submit the question to a popular

vote.129 The public agencies calling for a vote were the cities of San Diego,

Coronado, National City, Chula Vista and Oceanside; Ramona Irrigation District,

Lakeside Irrigation District, and La Mesa, Lemon Grove and Spring Valley Irrigation

District; and the Fallbrook Public Utilities District.130 Most of the agencies were clustered around the city of San Diego. Ramona, Oceanside, and Fallbrook, however, were many miles to the north and northeast.

The Citizens’ Water Committee of the San Diego Chamber of Commerce served as a focal point for the regional campaign to secure an electoral victory for the

proposed San Diego County Water Authority. 131 The committee chairman was Fred

Heilbron, the San Diego city councilman who had advocated the city’s original filing

129 CWA Act, Sec. 4. 130 San Diego County Water Authority, First Annual Report, 12-13. 131 Strathman, “Dream of a Big City,” 338. 58

for a Colorado River water right in 1926. Heilbron had left the council after failing re-

election in 1927, and never again served in elective public office. By 1940, he had

reemerged as the head of the chamber committee.132

With a less than spectacular record of passing water-related propositions during the previous twenty years, water authority advocates needed to convince the public that imported water had to be secured immediately. A coordinated effort was launched in the months approaching the election of May 16, 1944, that included newspaper and radio ads, pamphlets and brochures, and speeches by prominent citizens. 133 One of the pamphlets, published by the chamber of commerce and San

Diego County Development Association, was entitled “Proposed San Diego County

Water Authority: The ‘How and Why’ for its Organization.”134 The pamphlet argued

the immediacy of the issue by citing the growing water requirements and potential for

shortage if a drought developed, and also the 1933 water delivery contract that

allowed the federal government to cancel if San Diego’s water rights were not used

by 1946, ten years after the completion of Boulder (formerly Hoover) Dam. Although

a conveyance facility might not be completed by that time, the pamphlet reasoned,

establishment of the water authority would likely justify an extension of time.

The pamphlet acknowledged that the cost of bringing the region’s 112,000

acre-feet per year to the users would be about $16 million, but maintained that the

132 “S. D. Hampered by Inadequate Supply, Claim,” San Diego Union, September 30, 1940. 133 Strathman, “Dream of a Big City,” 334-339. 134 San Diego Chamber of Commerce and San Diego County Development Association, “Proposed San Diego County Water Authority: The ‘How and Why’ for its Organization (San Diego, undated), SDCWA archives. 59

water, over time, had a value of $50 million. The Colorado River water supply’s dependability was described to be “as good as Boulder Dam,” and did not mention that San Diego’s allotment was outside California’s basic entitlement of 4.4 million acre-feet. There was virtually no discussion of the means by which water would be transported, although the debate over a connection to MWD’s Colorado River

Aqueduct versus an extension of the All-American Canal had gone on for over a decade. The pamphlet only stated that “[t]he route by which the water comes into the county is relatively unimportant so long as it is the best and most economical one.”

Apparently, what the proponents did not want at this juncture was a controversy.

A super majority of two-thirds of all those voting within the approving agencies was required to create the water authority, although only a bare majority was needed in any individual approving agency.135 The measure passed in all nine

proposing agencies by an overwhelming fifteen to one majority. Following

certification of the election results, the San Diego County Water Authority was

organized on June 9, 1944.136

San Diego’s Pursuit of Imported Water Escalates

At the first SDCWA Board of Directors meeting on June 15, 1944, Fred Heilbron was

unanimously elected chairman, a post he would hold until his death in 1973.137

Heilbron assumed the leadership position at age 66, when most successful men were

135 CWA Act, Sec. 4(3). 136 San Diego County Water Authority, First Annual Report, 12. 137 Minutes, SDCWA Board of Directors meeting, July 15, 1944. 60

settling into retirement. Heilbron was born in Sacramento in 1877 to German immigrants, and moved with his family to San Diego in 1888. He started a plumbing

business in 1902, and ran it until his death seven decades later.138 In addition to his service on the city council from 1919 to 1927, Heilbron was the consummate joiner and city booster, serving at times as a director of the chamber of commerce and

YMCA, a member of the San Diego Merchants Association, president of the state

Master Plumbers Association, and a Rotarian, Mason, Shriner, and Elk. 139 He also

found a way to spend three years in part-time study at a local law school and pass the

state bar exam in 1916, although he never actively practiced law.140

The original SDCWA Board contained one member for each agency, except that San Diego merited four members under the statutory formula assigning

additional directors based on assessed valuation. Although SDCWA was a

functioning agency by mid-1944, the city of San Diego continued to be an

indispensable player for imported water decision-making. The city had fifty percent

of the board vote, and without its support there was little SDCWA could do.

Additionally, the city held the Colorado River water right of 112,000 acre-feet,

although that right was compromised by the county’s co-existing right. Over the next

two years, SDCWA repeatedly petitioned the city to transfer the water right to the

new agency, but the assignment never came.

138 Robert E. Melbourne, “San Diego’s Water Crusader, Fred A. Heilbron,” Journal of San Diego History 32, no. 4 (1986). 139 Clarence Alan McGrew, ed., City of San Diego and San Diego County: The Birthplace of California (Chicago: The American Historical Society, 1922), 282. 140 “Heilbron Admitted to Bar; Surprises Friends,” San Diego Union, October 1 1916. 61

Until the second half of 1944, little of substance had been accomplished

toward bringing imported water to the region. With the beginning of a drought that year and increasing wartime water consumption, something had to be done quickly.141 In September 1944, representatives of SDCWA and the city of San Diego

met with MWD officials to discuss potential use of the Colorado River Aqueduct as a

conduit for San Diego’s water. MWD laid out basic principles that were consistent

with their earlier position and would govern future negotiations: (1) a connection to

MWD facilities could occur only by obtaining membership in MWD; (2) the MWD

Act would have to be amended to allow SDCWA to join, as only cities and certain special districts were then eligible; (3) annexation would require payment of a share of past MWD tax assessments on member agencies; (4) MWD would assume some portion of the cost of a new connecting aqueduct; and (5) San Diego would turn its

Colorado River water right over to MWD.142 On September 15, 1944, the city of San

Diego sent a letter to MWD formally requesting terms of annexation, stating that

SDCWA might be the annexing member.143 The MWD reply of October 6 reiterated

the conditions stated informally in September and added an estimate of back taxes of

about $10 million, payable without interest in twenty annual installments.144

While MWD insisted that access to the CRA could be achieved only through annexation, it was also motivated to bring San Diego into the family. General

141 Cooper, Aqueduct Empire, 104. 142 Minutes, SDCWA Board of Directors meeting, September 8, 1944. 143 Ibid., September 22, 1944 144 MWD Water Problems and Public Relations Committee, Letter to Walter H. Cooper, City Manager of San Diego, October 6, 1944, SDCWA srchives. 62

Manager Weymouth’s prediction, made in anticipation of the aqueduct bond vote in

1931, that 1,000 cubic feet per second, or about 720,000 acre-feet per year, of aqueduct water would be required as soon as the system was completed turned out to

be a monumental overstatement. The first delivery of water from the aqueduct was

made to Pasadena on June 17, 1941, and to encourage member agencies to begin

using the system, water was provided free of charge through July 31, 1941.145 Water

deliveries to MWD member agencies in fiscal year 1941-42 (July 1-June 30) totaled

16,000 acre-feet, of which 7,000 acre-feet was free water. 14,483 acre-feet was delivered in fiscal year 1942-43, and 16,091 acre-feet in fiscal 1943-44, over half of which went to the relatively small community of Santa Monica. As an emergency measure, an additional 2,500 acre-feet was delivered to military installations in 1942-

43, and about 3,100 acre-feet in 1943-44. Because of low deliveries, water sales accounted for only $325,000 in revenue in 1943-44, while member agencies had to

contribute $9.79 million in taxes.146 In addition to the problem of low deliveries to member agencies, MWD had difficulty attracting new members. Prospective members were reluctant to assume the tax burden incident to membership and pay an

annexation charge when they could pump groundwater less expensively. The fact that

Los Angeles experienced high precipitation years beginning in 1937 that ran into the

145 Metropolitan Water District, Sixth Annual Report (Los Angeles, 1944); Oshio, “Urban Water Diplomacy,” 115. 146 MWD, Sixth Annual Report, 45, 84. 63

early 1940s made MWD membership even less attractive.147 MWD clearly needed a member agency that would buy significant amounts of water. SDCWA fit the bill.

The city of San Diego responded to MWD’s annexation terms by observing that they “seem somewhat onerous,” but promised a “careful and open-minded study” with a desire for early resolution. 148 Copies of the correspondence were provided to

SDCWA. SDCWA, however, had something more pressing to consider.

President Roosevelt Orders Construction of the San Diego Aqueduct

On October 3, 1944, President Roosevelt directed William Warne, Assistant

Commissioner of the Bureau of Reclamation, to convene an interdepartmental committee to make recommendations regarding an emergency imported water connection to San Diego.149 The water situation in San Diego had become so acute

that the federal government was at last taking action. Pursuant to the president’s direction, Warne formed the Committee on Methods for Financing the San Diego

Water Supply Project consisting of himself and representatives appointed by the

Navy Bureau of Docks and Yards, the Army Corps of Engineers, the Federal Works

Agency, and SDCWA. On October 6, the SDCWA Board of Directors named Phil

Swing as the agency’s representative.150 During the previous year, Swing had been

147 Oshio, “Urban Water Diplomacy,” 112-113, 115. 148 Walter H. Cooper letter to MWD, October 9, 1944, SDCWA archives. 149 President Franklin D. Roosevelt letter to William Warne, October 3, 1944, SDCWA archives. 150 Minutes, SDCWA Board of Directors meeting, October 6, 1944. 64

active in the campaign to create SDCWA, and was appointed its general counsel on

August 4 1944.151

Warne’s committee first met on October 16, and in a remarkable turnaround time, submitted its report to the President on October 21. The committee unanimously advised that (1) an imported water aqueduct was immediately required as a result of federal war activities; (2) the aqueduct should connect to MWD’s Colorado River

Aqueduct, rather than the All-American Canal; and (3) the federal government should fund the entire project, which would be headed by the Navy. 152 The MWD route was

selected over the All-American Canal route because it cost less, would take less time

to construct, would run by gravity, and could service military bases in north San

Diego County. Pipeline capacity was recommended at 50 million gallons per day

(mgd), except that tunnels should be sized at 100 mgd in contemplation of post- emergency expansion. 100 mgd at a constant flow coincided with the San Diego

Colorado River water right of 112,000 acre-feet per year.

At their meeting on October 20, the SDCWA directors reviewed a telegram from Swing stating that Warne’s committee had completed its recommendation to the president, with a full report on the way. In the excitement of the moment, the board also received MWD’s October 6 letter stating the conditions of annexation which, by unanimous vote, they “filed.”153 With the prospect of federal construction of a

151 Minutes, SDCWA Board of Directors meeting, August 4, 1944. 152 William Warne letter to President Franklin D. Roosevelt, October 21, 1944, SDCWA archives. 153 Minutes, SDCWA Board of Directors meeting, October 20 1944. 65

connection to MWD under the president’s emergency war powers, MWD cooperation

and its “somewhat onerous” annexation terms appeared less important. However, the

Warne committee did recommend that SDCWA and the city of San Diego continue to

work with MWD to arrange permanent service on termination of the war emergency.

On November 29, 1944, President Roosevelt announced his decision to the

concerned parties. In a letter to SDCWA via Phil Swing, the President stated that he

had approved the Warne Committee report, and specifically noted the

recommendation that local interests “press negotiations [with MWD]… in order that equitable arrangements may be completed looking toward the continued use of the

works.” The president further admonished that “I hope that I may receive assurance that this will be done.”154 Such assurances were given. 155

SDCWA Retains its Options

Meetings were held in late 1944 and 1945 with MWD to discuss annexation, and with

the city and county of San Diego for transfer of the Colorado River water right to

SDCWA. But by mid-1945, there was no apparent end in sight on either issue.

Contrary to the president’s wishes, negotiations with MWD for permanent use of the

emergency aqueduct were not making significant progress, largely because SDCWA

was not committed to that result.

154 President Franklin D. Roosevelt letter to Phil Swing, November 29, 1944, SDCWA archives. 155 F. A. Rhodes letter to President Franklin D. Roosevelt, December 8, 1944, SDCWA archives. 66

On February 16, 1945, SDCWA General Manager Joseph Burkholder presented a report to the board of directors on the planning phase of the SDCWA program for importing and distributing Colorado River water.156 Despite the

president’s directive to build an aqueduct from the MWD facilities, Burkholder stated

that SDCWA still had the alternative of choosing that route or the route from the All-

American Canal for its permanent supply pipeline. Burkholder noted that the

aqueduct route studies commissioned in 1943 were still underway and would not be

available until the fall, after which a decision could be made. As for the federal

emergency aqueduct project, Burkholder stated, “[o]ffhand it may appear that the

construction of this conduit would effect a permanent settlement of San Diego

County’s water problem.” Not so, said Burkholder, who maintained that the

emergency aqueduct could provide temporary relief while SDCWA and its member

agencies figured out which route they wanted to pursue. Of course, he said, “[i]t

should not be maintained from the above that the Federal emergency conduit will

have little or no value…. One of the principal values is… the grant of time it affords

this community to prepare plans for permanently solving the water question.” In a

report to the board of directors on July 16, 1945, Burkholder reiterated that the

decision to construct a permanent aqueduct from either MWD or the All-American

156 Minutes, SDCWA Board of Directors meeting, February 16 1945. 67

Canal was still open, and should not be decided until the relevant studies were completed.157

Federal officials were probably not pleased with the prospect that their multi- million dollar aqueduct might only be used for a few years, if at all, and that SDCWA might use the temporal relief it provided to choose some other means of conveyance.

Nevertheless, there was a war on, and emergency water was urgently required.

However, local officials would have been prudent to recognize that the United States had no contractual requirement with SDCWA or the city to build the aqueduct.

The Feds Threaten to Pull the Plug – San Diego Makes a Commitment

As 1945 progressed, bids were solicited for the initial segments of the aqueduct project, the total cost of which was estimated at $17.5 million. 158 However, there were rumblings from the federal government over San Diego’s failure to complete arrangements for permanent use of the aqueduct. In July, William Warne visited the city “to see where we stand with regard to the San Diego aqueduct and to see what we can do to make it permanently useful to the city.” Warne reminded locals of the provision in the 1933 Colorado River contract that allowed the government to void San Diego’s water right if diversions were not begun by 1946. Finally, he stated,

157 J. L. Burkholder, “Historical Outline of Proposed Importation of Colorado River Water to San Diego County,” July 16, 1945, SDCWA archives. 158 “Bids Opened By Navy for S. D. Pipeline,” San Diego Union, July 7, 1945. 68

“Up to now the good faith has been all one-sided, with the U. S. government doing all

the building.”159

On August 14, 1945, Japan accepted the Allied surrender terms and World

War II came to an end. With the end of the war, there was some concern in San Diego

that the emergency aqueduct project might be cancelled.160 Warne, however, stated he

believed the project would go forward.161 On September 12, groundbreaking

ceremonies were held for the first construction work on the aqueduct.162

Although the project appeared to be on track, some members of the board of directors were wondering if SDCWA plans to wait on choosing a route for a permanent aqueduct were in jeopardy. At the board meeting of September 7, 1945,

Directors Neal of Coronado and Lynds of Chula Vista “asked if any decisive action regarding annexation to the Metropolitan Water District would be taken by either the

City of San Diego or the Water Authority before the U. S. Bureau of Reclamation had submitted its report on the All-American Canal connection.” It was the consensus of the board that no such action could or would be taken.”163

Everything changed when San Diego officials were informed on October 2,

1945, that a directive canceling the emergency aqueduct project was on Secretary of

159 “Reclamation Officials Will Make Effort Today to Solve San Diego Water Problem,” San Diego Union, July 25, 1945. 160 “Aqueduct Work May Continue,” San Diego Union, August 22, 1945. 161 “Aqueduct Work To Be Pushed,” San Diego Union, August 28, 1945. 162 “Ground Broken For Aqueduct,” San Diego Tribune-Sun, September 13, 1945. 163 Minutes, SDCWA Board of Directors, September 7, 1945. 69

the Navy James Forrestal’s desk awaiting signature.164 This sparked a rash of meetings in San Diego and frantic telegrams to Washington, D. C. asking for

reconsideration. The SDCWA Board of Directors met on October 5 to appoint

representatives to lead the fight to save the aqueduct, who then attended a meeting

with the San Diego city council that evening which lasted until 5:50 the next

morning. Despite the burst of activity and projections that the city’s water supply

would be depleted within 18 months, Secretary Forrestal signed a project cancellation

order on October 6. At that point, city officials conceded “that virtually little or no

hope remained for construction by the navy….” However, a ray of hope did remain as

Forrestal agreed to hold the cancellation order for a few days pending further

information.165

A San Diego delegation arrived in Washington on October 9 to plead the region’s case, with Fred Heilbron and Joseph Burkholder representing SDCWA. By

October 12, with help from the local congressional delegation, Secretary Forrestal had made a counterproposal under which the city would reimburse the Navy for the cost of the aqueduct. The city, however, was given only five days to accept the

Navy’s terms. 166 During that period, San Diego Mayor Harley Knox suggested that

any reimbursement contract would need to be contingent on approval by the

164 “City Stunned by Report Aqueduct Canceled,” San Diego Journal, October 3, 1945. 165 “Forrestal Signs Death Warrant For Aqueduct,” San Diego Union, October 7, 1945. 166 “’Aqueduct Saved’ Says Izac; City Must Share Cost,” San Diego Tribune, October 12, 1945. “Navy gives City 5 Days to Pass On Aqueduct,” San Diego Union, October 14, 1945. 70

electorate167, but in the end such a provision was not required, probably because

Forrestal would not build the aqueduct on a contingency.

The reimbursement, or lease-purchase, contract was approved by the city council on October 15 and signed in Washington on October 17, 1945. Major

provisions were:

1 The city would reimburse the government for the “true cost” of the aqueduct

project, now estimated, because of favorable bids, at $14.5 million.

2 Reimbursement by the city would consist of a payment of $500,000 annually,

without interest, until the entire amount was paid (in approximately 30 years).

3 The city would lease and operate the aqueduct upon its completion, and receive

title when the entire amount was paid. The city had an early payment option,

which was unlikely to be exercised (and never was), since there was no interest

on the balance.

4 The city would diligently pursue steps necessary to secure an adequate supply of

water from MWD through the emergency (San Diego) aqueduct.

5 The city would make every reasonable effort to supply all government agencies

in the area an adequate water supply.

6 The government would consent to a later assignment of the city’s rights and

obligations under the contract to SDCWA and/or MWD.168

167 “Navy’s Aqueduct Offer to Reach Council Today,” San Diego Union, October 15, 1945. 168 “Contract No. NOy-13300” between the United States of America and the City of San Diego, October 17, 1945, SDCWA archives. 71

The city’s obligation to pay for the San Diego Aqueduct put a new light on things. Even as the contract was being wrapped up, Mayor Knox stated that San

Diego must accept the MWD alignment and abandon any idea of using the All-

American Canal route.169 This meant membership in MWD, as that agency had stated

once again in a letter of July 13, 1945, that the only way MWD would deliver water

through its facilities would be by membership of either the city or SDCWA. 170 At the

next SDCWA Board of Directors meeting after the reimbursement contract was

signed, Fred Rhodes, the city manager, stated that the city saw no alternative but to

join MWD. Rhodes indicated, however, that SDCWA and not the city should be the

agency annexing to MWD. The board of directors agreed with Rhodes and

unanimously voted to take immediate steps to effect annexation. 171

The reasons why the federal government contracted with the city rather than

SDCWA for reimbursement of aqueduct costs are self-evident. First, SDCWA in

1945 had acquired no appreciable debt or funding mechanisms, and was not in a position to obligate itself to a $15 million payment. Second, even if the means of financing were available, some member agencies were not ready to take that leap, as would be seen when two agencies later left SDCWA to avoid assumption of the aqueduct reimbursement obligations.

169 “Metropolitan Water Plan Must Be Accepted, Says Knox,” San Diego Tribune, October 15, 1945. 170 A. L. Gram letter to Fred Heilbron, July 13, 1945, SDCWA archives. 171 Minutes, SDCWA Board of Directors meeting, November 2, 1945. 72

The federal decision to terminate the aqueduct project absent assumption of

costs by San Diego may be seen as a mutual breach of faith by the United States and

San Diego. On the one hand, President Roosevelt had directed that the aqueduct be

built and San Diego had relied on his direction. When the war ended, some federal

authorities opined that the large military presence in the San Diego region would continue, and there were indications the project would remain on track.172 San Diego

officials appear to have been genuinely shocked at the impending termination, and

did not have sufficient time, due to dwindling local water resources, to start a new delivery project. There was no choice except to give in to federal demands. On the other hand, President Roosevelt had been very clear that he expected San Diego to make arrangements with MWD for permanent use of the aqueduct after the war.

Instead, SDCWA treated the aqueduct as a temporary facility that might or might not fit their plans to permanently access Colorado River water. This waffling may have served a purpose in annexation negotiations with MWD, but it did not sit well with the Navy, which was left with the prospect of an aqueduct that might have only a short-term or no use when completed. The result, at least in hindsight, should not have been surprising.

SDCWA Annexation to MWD

Although the SDCWA decision to join MWD had been made, there was time to work

out the details. As previously noted, MWD was favorably inclined toward annexation,

172 “Aqueduct Work To Be Pushed,” San Diego Union, August 28, 1945. 73

although there was some opposition on its board to bringing in the water authority.

SDCWA membership was championed at MWD by Victor Rosetti, a rising director representing Los Angeles, who would become board chairman on the death of

founding Chairman W. P. Whitsett in January 1947.173 In anticipation of annexation,

the MWD Act was amended in 1945 to permit the membership of a county water

authority.174 The act had previously been amended in 1941 to allow certain special districts to be granted membership.175 Before then, only cities could join.

With the war over, MWD refused to deliver any water to SDCWA until annexation was completed, but in any event the San Diego Aqueduct would not be operational until at least mid-1947. SDCWA held several meetings with MWD in late

1945 and early 1946, and on April 3, 1946, formally petitioned MWD for terms of annexation. MWD’s reply came only two days later, which suggests the interchange was pre-arranged. The MWD response of April 5, 1946 contained the following terms:

1 Annexation must be completed before January 1, 1947.

2 In addition to prospective MWD taxes, SDCWA would pay approximately $13

million in back taxes and interest in equal annual installments over 30 years with

no additional interest. This was an improvement over MWD 1944 proposed

annexation terms, which required a 20-year payback.

173 Oshio, “Urban Water Diplomacy,” 127; Metropolitan Water District, Ninth Annual Report (Los Angeles, 1947), x. 174 Metropolitan Water District, Seventh Annual Report (Los Angeles, 1945), 61. 175 Metropolitan Water District, Third Annual Report (Los Angeles, 1941), 89. 74

3 San Diego’s rights to Colorado River water under the 1933 contract would be

merged with MWD’s rights and held by MWD.

4 San Diego’s aqueduct reimbursement contract with the United States would be

assigned to SDCWA, which in turn would contract with MWD so that MWD

would pay half the cost of reimbursement and operate the northern portion of the

aqueduct that corresponded to half its cost. Upon completion of payment and

transfer of ownership to SDCWA, the northern portion would be deeded to

MWD.

5 MWD would be responsible for constructing future pipelines as necessary to the

same point at which SDCWA and MWD operation and control of the first

aqueduct met. 176

On April 19, 1946, SDCWA accepted the MWD terms with one minor change.177

That change was quickly accepted by MWD, with a repetition of the admonition that

no water would be delivered until annexation was effected.178 To complete the

annexation, certain actions were required. The reimbursement contract had to be assigned from the city to SDCWA, with a subsequent assignment of the northern portion from SDCWA to MWD. Voters within SDCWA had to approve annexation to

MWD and the financial obligations that were part of the overall deal. Finally, San

176 W. P. Whitsett letter to SDCWA, April 5, 1946, SDCWA archives. 177 Fred Heilbron letter to MWD, April 19, 1946, SDCWA archives. 178 Minutes, SDCWA Board of Directors meeting, May 3, 1946. 75

Diego’s 1933 water delivery contract had to be assigned to MWD, with a change in the point of diversion from the Imperial Dam to the district’s intake at Lake Havasu.

Ironically, on March 29, 1946, as negotiations for annexation to MWD were being wrapped up, the SDCWA Board of Directors considered the long-awaited report by the Bureau of Reclamation on the feasibility and cost of the All-American

Canal route. Having committed itself to annexation to MWD, the study had become irrelevant and the board concluded “this proposed route should be held in suspension until some later date.”179 That “later date” never came.

The required election, set for November 5, 1946, contained three measures.

Proposition No. 1 approved SDCWA annexation to MWD. Proposition No. 2

approved the assignment of San Diego’s rights and obligations in the reimbursement

contract to SDCWA. Proposition No. 3 approved a bond for $2 million to fund public

works required to deliver water from the San Diego Aqueduct to member agencies.

The election was preceded by a vigorous campaign led by SDCWA to secure “yes” votes. However, in anticipation of incurring significant indebtedness, the city of

Coronado and Ramona Irrigation District reconsidered their need for imported water and withdrew from SDCWA before the election. 180 By November, the necessary

agreements had been executed, but their effectiveness was contingent on voter

179 Minutes, SDCWA Board of Directors meeting, March 29, 1946. The SDCWA First Annual Report, issued in mid-1946, contained a lengthy analysis of the Bureau’s report, concluding that the San Vicente Aqueduct was cheaper than the All-American Canal extension, could be built in less time, and by virtue of annexation to MWD, would increase the amount of water to which SDCWA was entitled. The need for this explanation is evident. In mid-1946, SDCWA had already decided annexation to MWD was the only option, but that decision had to be ratified by the voters in the November election. See SDCWA, First Annual Report, 65-77. 180 San Diego County Water Authority, Second Annual Report (San Diego, 1948), 11. 76

approval. MWD published a resolution formally consenting to annexation based on

the April terms. 181 The city assigned its rights and obligations under the

reimbursement contract to SDCWA182, and the city and county merged their 1933

contract rights with MWD. 183

The election itself was almost an afterthought, with more than a 14 to 1 majority voting for approval. Having satisfied the prerequisites, SDCWA annexed to

MWD on December 17, 1946. 184

SDCWA became the fifteenth member agency of MWD, joining the thirteen that had been members since the aqueduct bond vote in 1931, and the Coastal

Municipal Water District in Orange County, which had joined in 1942. The assessed

value of taxable property within SDCWA was ten percent of the whole of MWD, but

because Los Angeles had 62 percent of assessed value and was limited to 50 percent

of the vote on the board of directors, SDCWA held 13 percent of the vote. However,

along with the city of Los Angeles, all member agencies in Los Angeles County

together held 83 percent of the total MWD vote.185 On the face of it, San Diego’s

water supply was dependent on an organization dominated by Los Angeles. This was

not a result San Diego had desired.

181 MWD Resolution No. 3612, October 4, 1946. 182 “Supplemental Agreement No. 1 to Contract NOy-13300” among the United States, the City of San Diego, and the San Diego County Water Authority, September 23, 1946. 183 “Contract Merging Rights of the City of San Diego and the Metropolitan Water District under Contracts with the United States dated February 15, 1933 and April 24, 1930 (Amended September 28, 1931” among the United States, City of San Diego, County of San Diego, San Diego County Water Authority, and the Metropolitan Water District of Southern California, October 4, 1946 184 San Diego County Water Authority, Second Annual Report, (San Diego, 1948), 28. 185 Metropolitan Water District, Ninth Annual Report, (Los Angeles, 1947). ix. 77

Contrasting Los Angeles Activism and San Diego Indecision

Although the SDCWA merger with MWD has been likened to a shotgun marriage

arranged by President Roosevelt, the primary reason for San Diego’s loss of water

supply independence was its failure over a course of decades to act decisively on its own behalf. As a foundational issue, San Diego was not as committed as Los Angeles

to continuous urban expansion during the first half of the twentieth century. By 1900,

Los Angeles had clearly won out over San Diego as the budding metropolis of

Southern California. Los Angeles had five times the population of San Diego and was

the terminus of two great railroads, while San Diego was merely the end of a branch

line. Los Angeles’ acquisition of a harbor with the annexation of San Pedro and completion of the aqueduct from Owens Valley just after the turn of the century solidified its dominant position. The realization that San Diego was not going to be the premier city in Southern California may have engendered a growing attitude within the city that quality of life merited consideration along with economic expansion. Richard Pourade describes a long-term “geraniums vs. smokestacks” discourse in San Diego highlighted by the mayoral election of 1917.186 In that

election, the candidate favoring rapid growth won, but the debate continued. The

1924 Freeman Report, which made recommendations for the city’s water development, suggested that an insatiable demand for growth was less important than

186 Richard F. Pourade, Gold in the Sun (San Diego: Union-Tribune Publishing Company,1965), 224. 78

ensuring preservation of the city’s charm. 187 Even as late as the 1980s, in a volume on

“Sunbelt Cities,” Anthony Corso characterized San Diego as the “anti-city.” 188

Political controversy during the crucial 1920s and 1930s also slowed San

Diego’s progress toward securing its Colorado River supply. Unlike Los Angeles, where the appointed board of water commissioners, and later MWD, coordinated planning, San Diego’s water policy and development was the purview of the elected city council. Theodore Strathman suggests that exposure to public debate stymied development of local water resources in San Diego.189 That appears to have had a

similar effect on attempts to acquire imported water. Even advocates of Colorado

River water conceded it would not be needed for decades, and wrangling went on for

years over the best conveyance route. In the Los Angeles basin, the MWD Board of

Directors quickly chose an aqueduct route and boldly claimed, incorrectly as it turned

out, that most of the aqueduct’s capacity would be required as soon as it could be

built. In response, voters in the MWD service area overwhelmingly passed a $220

million bond issue in 1931, while San Diego voters twice rejected an expenditure of

$450,000, spread over 40 years, to acquire capacity in the All-American Canal.

In short, there was a consensus in Los Angeles that did not exist in San Diego.

The San Diego region achieved relative unanimity on imported water policy only when the SDCWA was created in 1944. San Diego had finally determined that water

187 Freeman, “The Freeman Report,” 1. 188 13. Anthony W. Corso, “San Diego: The Anti-City,” in Sunbelt Cities: Politics and Growth Since World War II, edited by Richard M. Bernard and Bradley R. Rice (Austin: University of Texas Press, 1983), 328. 189 Strathman, “Dream of a Big City,” 264. 79

policy was too important to be left to the vagaries of elective politics, and must be

guided by an appointed board of experts.

Did SDCWA Make the Right Decision?

Since 1946, San Diegans have debated whether annexation to MWD was preferable

to the alternative, a connection to the All-American Canal. SDCWA argued during

the 1946 election campaign and after annexation that San Diego’s water rights were improved by membership in the MWD family. Under its 1933 contract, the city had a

fifth priority right to 112,000 acre-feet per year, but only if surplus was available. The

merger with MWD meant that MWD had a fourth priority of 550,000 acre-feet, within California’s 4.4 million acre-foot entitlement, and a surplus fifth priority of

662,000 acre-feet. Based on SDCWA’s “preferential right” to water under MWD regulations, SDCWA calculated in 1948 that it was entitled to about 128,000 acre-feet

per year, an improvement in both priority and quantity.190

Over the long term, SDCWA membership in MWD seems to have worked out

well compared to a world in which SDCWA would not have been a member of

MWD. For decades after 1946, MWD was able to take its fifth priority water from the

Colorado River due to unused allocations of Arizona and Nevada and limited development in the upper basin. In the early 1960s, MWD became a State Water

Project contractor, and has been receiving water from the Northern California Sierra

190 Ibid., 88. 80

Nevada Mountains since 1973. Until 1991, MWD supplies consistently satisfied

SDCWA’s water needs, which by 1990 reached 672,000 acre-feet.

If SDCWA had not joined MWD, but instead built a pipeline from the All-

American Canal, the region would have been limited to San Diego’s 1933 contract for

112,000 acre-feet per year. However, by 1960, SDCWA was receiving 157,000 acre- feet from MWD, and in 1965, 230,000 acre-feet.191 With only the surplus right of

112,000 acre-feet, how could San Diego have secured additional water without

MWD? There is no easy answer to the question. The State Water Project was a new source of water for which SDCWA could have independently contracted, but there were no deliveries until 1973, long after the water would have been needed. SDCWA might have been able to secure an additional surplus contract with the Department of the Interior for Colorado River water, but would have been last in the priority system.

While that water would have been available for some period, it is doubtful whether

SDCWA would have invested in an additional aqueduct for questionable deliveries.

The most likely scenario is that when SDCWA neared its 112,000 acre-foot limit in the mid-1950s, it would have approached MWD to request annexation. By that time, however, MWD may have considered SDCWA more of a burden than a benefit. In the late 1950s, MWD deliveries to member agencies were increasing and the district was considering whether it would buy into the State Water Project. MWD did become

191 San Diego County Water Authority, To Quench a Thirst, 69. 81

a State Water Project contractor, but without SDCWA’s water requirements, that may

not have happened.192

All things considered, annexation to MWD made sense in 1946, even if the

threatened federal pullout were not a factor. All this is not to say that SDCWA’s

relationship with MWD has been completely rosy over the last 65 years or that

membership in MWD solved all of San Diego’s water issues, but that is a story for the remainder of this thesis. The 1946 “shotgun marriage” between MWD and

SDCWA was literally “for better or for worse” for both agencies, and that dichotomy

will probably continue as long as they both exist.

The Stage is Set

With SDCWA’s annexation to MWD, relationships were established that laid the

foundation for the region’s water development over the next 50 years. Whatever doubts San Diego had harbored regarding the merits of unabated growth were largely put to rest as officials scrambled to provide an imported water supply. It was now up

to SDCWA, as a member agency of MWD, to ensure the district had sufficient water

and the facilities to deliver it so that growth could continue. Although MWD’s other

member agencies were similarly committed to growth, their differing circumstances

would engender conflict as to how and when water supplies should be developed, and

who would pay for it. In particular, Los Angeles, with its own imported water from

the Owens Valley and by far the largest preferential rights allocation at MWD, would

192 Hundley, The Great Thirst, 287-291. 82 constantly question why its taxes should pay the lion’s share to support expansion in other areas. While the clear sentiment in terms of growth and water was “onward and upward,” the path of expansion would not be smooth. 83

Chapter Two

The Uncertain Path of Expansion 1947-1955

With SDCWA finally ensconced as a member of the MWD family, 1947 would seem at first blush to inaugurate an era in which the San Diego region could rely on a virtually unlimited flow of water from the heretofore grossly underused Colorado

River Aqueduct. That was not to be the case. Mexico had already secured 1.5 million acre-feet of the river’s water by treaty in 1945, and Arizona clamored incessantly for a massive federal project to bring water from the river to Phoenix, Tucson, and agricultural interests along the way. At MWD, imported water consumption increased as member agencies discovered that their underground aquifers could yield only a limited supply. In short, Southern California water agencies in the 1950s and 1960s had to fight to ensure their Colorado River supply, and began to search for other distant sources of water to meet increasing demands. Despite the challenges and rumblings that water consumption and growth might at some point need to be constrained, growth continued and the water supply, with a few hiccups, kept pace.

Although the Southern California water agencies were unanimous in the desire to provide an adequate water supply for their constituencies, they did not always agree on the means of achieving that goal. It was easy to unite behind an agenda that would deny Mexico and Arizona more water, but within the MWD 84

boundaries the member agencies would squabble over whether new water supplies

and delivery facilities were required and who should pay for them. The same debates

would occur among the member agencies of SDCWA. Agencies that had their own

water supply or a large preferential right to imported water would ask why they

should shoulder the cost of bringing in new supplies when another member agency

would receive most of the benefit.

Although expansionist policies were sometimes questioned by member

agencies acting in their own perceived self-interest, the momentum for more growth

and therefore more water usually won out. In the end, the people who made the decisions shared the same philosophy, along with a public that believed more water was necessary for prosperity. Leading the charge were two men who would rule at

SDCWA and MWD for the next two decades.

Fred Heilbron and Joseph Jensen Take Charge

Until he died in office at age 95 in 1973, Fred Heilbron was chairman of the board of directors and the face of SDCWA. In contrast to the 1920s and 1930s, when San

Diegans fought among themselves over the means of acquiring additional water,

SDCWA and Heilbron now represented the region as a solid front. Although that unity of purpose was disrupted for a short time in the early 1950s when the city of

San Diego questioned the need for additional conveyance facilities, Heilbron overcame the city’s reticence by mobilizing public opinion, mustering the support of other member agencies, and exercising his personal power. While Heilbron was the 85

dominant force at SDCWA, his agency constituted a small minority at MWD, where

Heilbron’s political acumen was frequently tested on issues of water supply,

construction of new pipelines, and San Diego’s appropriate share of MWD costs.

At MWD, Joseph Jensen, a Los Angeles board member since 1940, became

chairman in 1949, and relinquished that position only when he died in 1974 at age 86.

A mining and petroleum engineer by trade, Jensen saw himself as the personification

of Southern California water interests and, according to Steven Erie in Beyond

Chinatown, “reigned supreme” at MWD. 193 As powerful as Jensen was, his reign was

not altogether serene. Member agencies, particularly Los Angeles and San Diego, had

differing interests regarding water supply and revenue sources that led to significant internal disputes on policy and specific projects. On occasion, Jensen had difficulty even keeping his own Los Angeles delegation together.

Already insulated from the electorate by the organizational structure, their personal power allowed Jensen and Heilbron to operate independently of Los Angeles and San Diego, the cities that appointed and could theoretically remove them. Jensen

and Heilbron saw themselves as representatives of the entire region and at times advocated growth and expansion policies that worked to their cities’ financial disadvantage.194 Under their control, MWD and SDCWA were not only “hidden” agencies; they were virtually autonomous.

193 Erie, Beyond Chinatown, 16. 194 Gottlieb and FitzSimmons, Thirst for Growth, 116. 86

Jensen and Heilbron were similar in many respects. Harry Griffen, a long time

director at both MWD and SDCWA, described them both as “strong-minded,

opinionated, sincere, [and] resourceful.”195 William Jennings, an original SDCWA

director and general counsel from 1948 to 1971, agreed that they were strong-minded

and opinionated, and added that they were stubborn and thought of themselves as

towers of strength for their particular viewpoints.196 With their dominating

personalities, Jensen and Heilbron predictably clashed from time to time, and on issues that would control the futures of MWD and SDCWA. Speaking in 1965,

Jennings, describing the relationship between MWD and SDCWA, stated “… we’ve had sort of a running feud, particularly between our chairman Mr. Heilbron and the chairman of Metropolitan, Mr. Joseph Jensen.”197 In spite of that stress, the two men

were fundamentally expansionists and cooperated more often than they fought,

serving together for 19 years as two of the three officers of the MWD Board of

Directors.

Although MWD had its periodic internal debates with SDCWA as a frequent protagonist, the Jensen and Heilbron era was the last great hurrah for the “water buffaloes” they exemplified. They were men who worshipped at the altar of unabated

195 Harry Griffen, “Harry Griffen Manuscript” (Helix Water District), chap. 2-5g, 35. Harry Griffen was a SDCWA director from 1956 to 1996, and a MWD director from 1963 to 1996. At the time of his death in 2001, he left an unfinished manuscript intended as a regional water history. 196 William Jennings, “William H. Jennings; Water Lawyer” (Los Angeles: University of California Los Angeles Oral History Program, 1967), 76. 197 Ibid., 99-100. 87 growth and saw their divine role as providing an ever increasing water supply to fuel that growth. And they were very successful at what they did.

Completing the San Diego Aqueduct

The immediate need for SDCWA in 1947 was to finish construction of the San Diego

Aqueduct before the combination of drought and overuse exhausted the local supply.

More than that, SDCWA and Heilbron wanted the federal government to reconsider the decision that San Diego would have to pay the entire cost of the aqueduct.

Although SDCWA had been allowed to pay for the project in equal annual installments over 30 years without interest, San Diego officials were still upset that

Secretary Forrestal had imposed a “take it or leave it” deal in 1945 that they had no choice but to accept. To study the possibility of federal cost sharing, President

Truman in September 1946 reconstituted the committee that in 1944 had made the construction recommendations on which President Roosevelt had acted.198 However, before the committee could meet, a congressional committee threatened to stop the project altogether.

In January 1947, with the aqueduct about 70 percent complete, the United

States Controller General reported to Congress that the Navy had illegally failed to obtain congressional approval for project construction. The Navy responded that construction was authorized under generic war powers legislation. The Senate

198 “Junior Senators Claim Storage Supply ‘Ample’,” San Diego Tribune, February 25, 1947 (SDCWA archives). 88

Executive Expenditures Committee scheduled a hearing on the matter in February amid reports that the work might be halted. 199 At the committee hearing, the project’s

greatest antagonist was a newly seated senator from Wisconsin, Joseph McCarthy.

McCarthy reportedly “heckled” federal officials and San Diego Mayor Knox as he

testified that San Diego was desperately short of water, claiming he had evidence

there was no imminent threat of exhaustion of local supplies and therefore no

compelling need to continue the project.200 In the midst of this turmoil, Fred Heilbron was dispatched to Washington to bolster the San Diego contingent. Heilbron had performed a similar function in October 1945 when the Navy threatened to stop the project, and had proven that he could speak effectively for the region. In performing the role of advocate, he was described as “tall and gaunt as a beanpole and carrying a twinkle in his eye – sort of a beardless Abe Lincoln – Heilbron scored points as much by his sincerity and good nature as by command of statistics – although he had those too.”201

By the time Heilbron arrived in Washington, the Navy general counsel had

presented his case that aqueduct funding was within the law. It remained for Heilbron

to provide the committee a detailed report of the region’s dire water situation, refuting

McCarthy’s allegations of sufficient supply. This was the ideal venue in which to turn

199 “Warren Pleads With Congress For Aqueduct,” San Diego Tribune, February 24, 1947 (SDCWA archives). 200 “Junior Senators Claim Storage Supply ‘Ample’,” San Diego Tribune, February 25, 1947; “Completion of San Vicente Aqueduct Assured, Says Knox,” San Diego Daily Journal, February 26, 1947. 201 Cooper, Aqueduct Empire, 105. 89

on his native charm. As Bill Jennings commented, Heilbron came across as “typically

grassroots” and a representative of the people, making him highly effective in public

forums.202 Recognizing the effect of Heilbron’s testimony, the same Senator

McCarthy who had heckled Mayor Knox stated, “I practiced law for some time, and I

always believed that some day in my trial of cases I would find a witness like you.”203

Based at least in part on Heilbron’s testimony, the committee decided that regardless

of the legalities, the project had to continue uninterrupted. To put the matter beyond

question, Congress enacted legislation later that year retroactively authorizing the

project. Unfortunately for SDCWA, the legislative scrutiny ended efforts to have the

United States share in the cost of the aqueduct.204 Finally, on November 24, 1947, the

first delivery of Colorado River water reached the aqueduct terminus at San Vicente reservoir, narrowly averting water rationing in several local areas. For months after its completion, the aqueduct ran at full capacity.205

SDCWA Consolidates its Position at MWD

Annexation to MWD did not mean SDCWA could ensure the water supply reliability

of its service area by ceding that function to MWD. Too many issues affected

202 Jennings, “Water Lawyer”, 44. 203 “Navy Continuance Held ‘Logical’ as Probe Ends,” San Diego Union, February 28, 1947; “Navy Counsel Aids Aqueduct,” San Diego Journal, February 28, 1947; “Hearings Before the Committee on Expenditures in the Executive Departments: United States Senate, Eightieth Congress, First Session on Senate Document No. 7, February 25 and 27, 1947” (Washington D. C.: United States Government Printing Office, 1947) 219-224. 204 SDCWA, Second Annual Report, 76. 205 Ibid., 13. 90

SDCWA differently than other MWD member agencies, and some of those issues

would find member agencies with opposing points of view.

As a new member agency, SDCWA, by virtue of its assessed valuation, was

entitled to two members on the MWD board of directors. Heilbron appointed as the first MWD director the man he considered most qualified: himself. That choice received the unanimous consent of the SDCWA board as did the nomination of

Joseph Burkholder, the SDCWA general manager.206 An engineer and former

executive at MWD, Burkholder was a logical choice, and because he was an employee of SDCWA, he could be counted on to follow Heilbron’s lead. At MWD, the SDCWA voting strength, also based on assessed valuation, was just less than ten percent, meaning Heilbron would have to forge alliances with other MWD member agencies to prevail on any contested issues.207

SDCWA’s first order of business at MWD was to reconcile conflicting

annexation terms in the two enabling acts. The problem was that annexation of a new

member agency or new territory within an existing member agency by SDCWA had

to be accepted also as an annexation to MWD. Otherwise, annexation to SDCWA

would provide no benefit because the annexed territory would not have access to

MWD’s imported water. In 1946, the CWA Act provided that annexation of new

territory to any member agency resulted in automatic annexation to SDCWA, without

payment of back taxes. New member agencies, however, could only join if accepted

206 Minutes, SDCWA Board of Directors Meeting, January 3, 1947. 207 San Diego County Water Authority, Third Annual Report (San Diego,1949), 6, 42. 91

by SDCWA under terms and conditions it determined. MWD Act provisions for

acceptance of new member agencies were essentially the same as the CWA Act.

However, the MWD Act granted automatic annexation of new territory within a member agency only if that agency was a municipality. Annexation of new territory within other member agencies was at the discretion of the MWD board and subject to its terms. Robert Skinner, longtime MWD employee and general manager from 1962

to 1967, said cities received the special treatment because they have a wide variety of

purposes, and it was felt that imposition of conditions could impede their power of

annexation. 208

Reconciliation required amendment of both acts. The CWA Act was amended

to provide automatic annexation of new territory only within member cities. Other

member agencies lost that privilege. The MWD Act was amended to allow automatic

annexation of new territory within cities that were themselves member agencies of a

MWD member agency, so long as the MWD member agency had a similar provision

for automatic annexation. The effect was that a member agency city of SDCWA, such

as the city of San Diego, could annex new territory and enjoy an automatic

annexation of that territory to both SDCWA and MWD.209

208 Robert A. Skinner, “Progress of the Metropolitan Water District: Recollections” (Los Angeles: University of California, Los Angeles Oral History Program, 1970), 38. 209 MWD, Ninth Annual Report, 73-76; SDCWA, Second Annual Report, 78-79. 92

New Concerns Over Water Supply Reliability: MWD’s Short-lived Annexation Moratorium

By 1949, the same MWD Board of Directors that in the early 1940s could not find a

buyer for its Colorado River water was concerned that it would soon not have enough

to supply its customers. This remarkable turn of events was the result of

developments that indicated the draw on the river might become so large that MWD

could not rely on its surplus allocation, which constituted 662,000 acre-feet of the

total contract amount of 1.212 million acre-feet.

The first blow was a water treaty between the United States and Mexico.

When the Boulder Canyon Project Act received congressional approval in 1929, the

United States had offered to guarantee Mexico 750,000 acre-feet per year from the

Colorado River, the most that nation had used in a single year until then. Mexico, however, insisted on 3.6 million acre-feet a year and negotiations terminated. By

1941, Mexico was using 1.5 million acre-feet per year. At the same time, the United

States wanted to ensure a flow of water to farmers on the Rio Grande, which was the border between Mexico and Texas. Most of the water flowing in the Rio Grande along the Texas border originated in northern Mexico, and a Mexican government perturbed about low deliveries from the Colorado could retaliate by cutting off the supply to the Rio Grande. At the urging of powerful Texas congressmen, the United

States signed a treaty with Mexico in 1944 that covered both rivers. On the Rio

Grande, Mexico agreed to an established flow from its tributaries, and on the

Colorado the United States guaranteed a flow of 1.5 million acre-feet per year at the 93

international boundary. The treaty still had to be ratified by the United States Senate,

and MWD got the California delegation to oppose it. Unfortunately for MWD and its

member agencies, they were effectively alone in their opposition to the treaty, as the

other basin states and California contractors were not so dependent on river surplus.

The treaty was overwhelmingly ratified by the Senate in April 1945.210 The fledging

SDCWA also opposed the treaty, as all of its 112,000 acre-foot entitlement was surplus water.211 The threat to that supply had been one of the factors that made annexation to MWD attractive.

While the allotment of Colorado River water to Mexico was a known quantity, the issue of Arizona’s share was not as definite. In 1944, the Arizona legislature finally ended its opposition to the Boulder Canyon Project Act and ratified a contract with the federal government for 2.8 million acre-feet, its share of the basic

7.5 million acre-foot allocation to the lower basin states.212 Arizona’s entry as a

Colorado River contractor ignited controversies over interpretation of the BCPA, and

federal involvement in construction of an aqueduct that would allow the state to use

its entire share of the river. These two issues would determine the amount of river

water Arizona could use in the future and would therefore have a direct impact on the

availability of the all-important surplus water to MWD.

210 Joel Schwarz, A Water Odyssey: The Story of the Metropolitan Water District of Southern California (Los Angeles: Metropolitan Water District of Southern California, 1991), 81-83. 211 San Diego County Water Authority Resolution No. 6, December 29, 1944. 212 Schwarz, A Water Odyssey, 83. 94

Arizona’s entitlement to 2.8 million acre-feet per year appears at first blush

rather definite. However, until its real meaning was decided by the United States

Supreme Court in 1964, it was anything but that. Everyone agreed that Arizona’s allotment was 2.8 million acre-feet; the disagreement was whether that amount was counted only against water coming from the river itself or from anywhere in the river system, including tributaries.213 By far the major tributary in the lower basin is the

Gila River, which runs through Arizona and enters the Colorado River just above

Yuma. Because the Gila provided upwards of one million acre-feet of irrigation in

Arizona, Californians argued that Arizona had to deduct that amount from its take on

the mainstream. This argument served California well, as that state provides virtually

no native water to the Colorado. Arizona, of course, argued that only water from the

mainstream counted against its allotment.

In any event, Arizona would never use 2.8 million acre-feet from the river

unless it could transport the bulk of that water to urban and agricultural areas in the

state’s interior. To that end, Arizona partnered with the federal Bureau of

Reclamation to create the Central Arizona Project (CAP) in 1946. With the extent of

Arizona’s water rights unresolved, California was able to block authorization and

funding of the CAP, and in 1952 Arizona brought suit in the United States Supreme

Court against the other basin states to settle its title.214 It was not until the 1960s that

the case was decided, but the threat to MWD’s surplus water was there.

213 Cooper, Aqueduct Empire, 311. 214 Schwarz, A Water Odyssey, 83. 95

As MWD’s Colorado River supply became less certain because of the water treaty with Mexico and Arizona’s effort to claim 2.8 million acre-feet from the

mainstream, water sales in the MWD service area picked up significantly. In fiscal

year 1948-1949, MWD delivered about 145,000 acre-feet of water, with almost half that amount going to SDCWA, where the San Diego Aqueduct was in its first full year of operation.215 New limitations on local supplies suggested that the demand on

imported water would only increase. In 1949, the California courts affirmed a

landmark adjudication of rights to water in an aquifer around Pasadena that ordered a

thirty percent reduction in extractions to prevent overdrafts. Natural forces also

intervened, as overdrafting of aquifers near the Pacific Ocean began to induce

seawater intrusion. 216 The only source for replacement of the lost groundwater was

MWD.217

To protect against the possibility that future water demands might exceed available supplies, some MWD directors favored a policy of limited expansion,

especially as it related to annexation of new member agencies. They were particularly

concerned about the annexation of undeveloped areas that would pay small annexation fees due to a relatively low assessed value, but potentially buy large amounts of water.218 This view was mainly held by some directors from Los Angeles,

215 Metropolitan Water District, Eleventh Annual Report (Los Angeles, 1949), 52. 216 Oshio, “Urban Water Diplomacy,” 160; Joseph Jensen, “Developing California’s Natural Resources” (Los Angeles: University of California, Los Angeles Oral History Program, 1970), 117. 217 Oshio, “Urban Water Diplomacy,” 130-131, 218 Ibid., 131. 96

which provided the lion’s share of the district’s revenue but, because of its Los

Angeles Aqueduct supply, was taking relatively little water from MWD.

The crisis came when the communities of Pomona in east Los Angeles County

and adjoining Ontario in San Bernardino County asked to join MWD in 1948. These

areas encompassed largely undeveloped lands, and as such drew opposition from a

majority of MWD’s Los Angeles directors. On December 21, 1948, the Los Angeles

directors, in a divided vote, blocked the attempted annexations over the protest of the

other fourteen member agencies.219 The outcome was particularly egregious because of voting rules under the MWD Act that allowed a small minority of directors to veto

any measure before the board. In the rejection of Pomona and Ontario, the seven Los

Angeles directors voted four to three against annexation.220 Because the MWD Act

required member agencies with multiple directors to vote as a unit, the entire Los

Angeles vote was against annexation.221 Since Los Angeles, with over fifty percent of

assessed valuation of the entire District, had fifty percent of the entire MWD vote, it

was impossible to obtain the majority needed to pass measures without the city’s support. This meant that four directors from Los Angeles could thwart the wishes of the other 20 directors of MWD.

In response to the snub from MWD, the state assemblyman from Pomona introduced a bill at the next legislative session to amend the MWD Act to change the

219 Oshio, “Urban Water Diplomacy,” 152-153; “Decision on Water Branded Unsound,” Los Angeles Times, December 22, 1948. 220 “L.A. Water Setup Faces Showdown,” San Diego Union, April 29, 1949. 221 MWD Act, Section 6; MWD First Annual Report, 341. 97

district’s voting structure. The bill provided that as to annexation matters, the unit

vote would be terminated and a measure would be determined by a majority vote of all directors, with each director entitled to one vote rather than a weighted vote based

on his agency’s assessed value. 222 This prospect must have mortified the city of Los

Angeles, whose seven directors would have less than one-third of the total vote if each director had an equal vote. Moreover, if the legislature would tinker with the rules on voting as it applied to annexations, in the proper state of aggravation it might

change the voting structure entirely along with other bedrock provisions such as preferential rights and district powers.

The bill passed out of committee on April 28, 1949, indicating some strength

despite the ardent opposition of Los Angeles legislators.223 Although the bill

ultimately failed of enactment, Los Angeles prudently reconsidered its position

regarding new MWD annexations. With the consent of the Los Angeles directors,

MWD formulated a new policy on July 8, 1949, which permitted the annexation of

largely undeveloped areas. The Los Angeles directors were swayed by reports that

even with the threat of an Arizona water grab, there was no practical danger of a

water shortage in the discernible future. After all, MWD was at the time taking only

eleven percent of its allocation of 1.212 million acre-feet. As a consolation, the MWD

Board decided that for future annexations, new member agencies would pay three

percent interest on any outstanding back taxes. The three agencies annexed earlier in

222 “L.A. Water Setup Faces Showdown,” San Diego Union, April 29, 1949. 223 Ibid. 98

the 1940s, including SDCWA, had been allowed payment of back taxes on a decades-

long installment plan without interest for the period after annexation. The requirement

of ongoing interest was estimated to increase the payment burden by about 25

percent.224

The short-lived annexation moratorium demonstrated that even though it was

an appointive body not accountable to the electorate, the MWD Board of Directors could be influenced by a threat to alter its legislative charter. Also remarkable was the

degree of autonomy under which the Los Angeles directors operated. On a matter of fundamental policy, the Los Angeles directors split their vote by a margin of four to three, and were apparently not obliged to vote in accordance with direction from the mayor and city council. That the controversy lasted more than six months suggests that once it arose, city officials did not intervene forcefully to put its directors in lockstep. Moreover, all of the directors who participated in the annexation votes continued at their posts during the controversy and after it ended. Although the MWD

Act did not specify that directors were subject to removal by the powers appointing them, the MWD general counsel had opined in 1933 that the right of removal was inherent in the common law. 225 In this instance, city officials apparently did not press

the matter. Directors could also be recalled by the electorate within an agency’s

224 “Way Cleared for New Areas to Come Into Water District,” Los Angeles Times, July 10, 1949. 225 George F. Flewelling, George F. Flewelling on the Metropolitan Water District Act; Derivation and History of Various Metropolitan Water District Act Provisions (Los Angeles: Metropolitan Water District, February 8, 1985), 49-53. 99

boundaries, but that remedy presumed an interested public and the wherewithal to put

an election campaign together.226

Joseph Jensen Becomes Chairman of the MWD Board of Directors

The annexation moratorium and its aftermath occurred during the first year of the

chairmanship of Joseph Jensen, who was to remain in office until his death in 1974.

The vote to allow Pomona and Ontario to join MWD was viewed by Jensen toward the end of his tenure as the most significant turning point in the life of the Metropolitan Water District…. It dispelled the opposition against annexing other than populated areas. We had then and thus adopted the policy of accepting farming areas and unsettled areas and vacant land into the District. This was a most important decision as it restored harmony, allowed for growth and helped to make southern California what it is today. 227

Jensen was not a newcomer to the MWD board or the water industry when he

was elected chairman. He was born in 1886 in Salt Lake City to Mormon parents who

had emigrated from Denmark after joining the church. Jensen received a degree in

mining engineering from the University of Utah in 1908, and by 1917 was working in

Los Angeles for the Tidewater Oil Company (later renamed Getty), where he was

employed until 1955 and served as a consultant until 1961. In 1927, Jensen was

appointed to the Water and Power Committee of the Los Angeles Chamber of

226 Sec. 12, MWD Act; Metropolitan Water District, First Annual Report, 353. 227 Jensen, “Developing California’s Natural Resources, 119. 100

Commerce, where he was instrumental in the creation of MWD. 228 In 1940, he was appointed a MWD director from Los Angeles.229 Jensen was elected chairman in

January 1949, succeeding W. P. Whitsett of Los Angeles, who held the position from

its inception in 1929 until 1947, Victor Rosetti of Los Angeles, and John Ramboz of

San Marino, who had filled the last six months of Rosetti’s term after Rosetti resigned

the chairmanship.

Like most MWD directors of the time, Jensen was a successful businessman who knew how to acquire and use power. Like Fred Heilbron at SDCWA, Jensen

served without pay and drew no direct financial benefit from his service on the board.

Julian Hinds, MWD general manager from 1941 to 1951, stated that “Mr. Jensen is a

very productive thinker, and not only a thinker, but a doer in the interests of the

District…. He always had a dominant influence.”230 While clearly an admirer, Hinds

also tried to explain Jensen’s psychology. “Joe Jensen… may argue and fight for something, but if you can convince him he’s wrong, he will soon think that it was his

idea in the first place. He comes around, fully cooperates, and then helps you.”231 A

case in point was the controversy over admission of Pomona and Ontario. Jensen had

earlier believed MWD should serve a limited area, but around the time of the

controversy came out in favor of expansion. 232 A MWD retrospective in 1991 stated

228 Gottlieb and FitzSimmons, Thirst for Growth, 8. 229 Ibid., v-vi. 230 Julian Hinds, “Western Dam Engineer” (Los Angeles: University of California, Los Angeles Oral History Program, 1971), 139. 231 Ibid., 80. 232 Ibid., 118. 101

that Jensen “held tight to the reins of influence and power at Metropolitan. Though a

relatively small man in stature, he was larger than life; he reportedly would go to

Sacramento… and, without an appointment, walk past the governor’s secretary and

into the office with no challenge given. 233 Hinds and his successor as general

manager, Robert Diemer, commented that with Jensen in charge, there was little or no

disagreement or discord between the board of directors and the staff. Hinds

experienced an outstanding rapport, and Diemer stated that practically everything the

staff submitted to the board was approved.234 How much of this extraordinary

cooperation was a genuine meeting of the minds and how much was fear of Jensen’s

wrath is questionable.

Robert Edmonston, a young engineer assigned by the state Department of

Water Resources in the 1950s to promote the Feather River Project, often clashed with Jensen and his allies who at the time opposed the project. Edmonston stated that

“[M[y own evaluation of the man is that unless he can get the credit for it or unless he

has thought of it, he automatically is negative on anything put to him…. I think a lot

of his motivation is the satisfaction of his own ego.”235 Also commenting on Jensen’s

opposition to the Feather River Project, Robert Skinner, an MWD negotiator and later

233 Schwarz, A Water Odyssey, 190. 234 Hinds, “Western Dam Engineer,” 126; Robert B. Diemer, “Thirty Years with the Metropolitan Water District” (Los Angeles: University of California, Los Angeles Oral History Program, 1971), 101. 235 R. M. Edmonston, “Preliminary Studies: The California Water Plan” (Los Angeles: University of California, Los Angeles Oral History Program, 1974), 76. 102

general manager under Jensen, observed, “Joe Jensen was a totally inflexible man and

it would take more than an earthquake to move him.” 236

Despite his reported ego and intractability, Jensen was able to secure re- election, usually unanimously, as board chairman every two years until his death in

1974. This institutional stamina cannot be dismissed as mere subservience by the rest

of the board of directors to a callous tyrant. Jensen clearly relished the exercise of

power at MWD, but he also projected that power for the district’s benefit with outside

entities. While Jensen won most of his policy fights at MWD, he also lost a few, but

continued to work on common causes with people who opposed him on other issues,

among them Fred Heilbron. As chairman, his first spat with Heilbron came when

SDCWA decided it needed to expand the capacity of the San Diego Aqueduct.

SDCWA Campaigns for the Second Pipeline

The committee that recommended construction of the San Diego Aqueduct to

President Roosevelt in 1944 assumed an ultimate aqueduct capacity of 100 million

gallons per day, which equals a steady flow of 155 cubic feet per second, or the

112,000 acre-feet per year that was San Diego’s allotment from the Colorado River.

The committee, however, proposed the aqueduct pipelines be sized for only half that capacity, with additional capacity constructed as necessary at some future date. An exception was made for tunnels, which would be sized at full capacity from the outset. The president adopted the recommendation, and as built, the aqueduct had a

236 Schwarz, A Water Odyssey, 113. 103

capacity of about 85 cubic feet per second, exceeding half of ultimate capacity by a

small amount to account for periodic shutdowns. As the San Diego Aqueduct was

being constructed in 1946, General Manager Burkholder estimated the facility would

not require additional capacity until about 1970.237 Similarly, the SDCWA First

Annual Report, published in September 1946, suggested that aqueduct enlargement

would not be required until 1977.238 In June 1948, the same Joseph Burkholder determined that without an increase in aqueduct capacity to its full 112,000 acre-feet,

if the then-current drought continued the region would face a critical water shortage by 1951. Reasons given for the dramatic reevaluation of need were overdrafts of local reservoirs during the war, a severe drought starting in 1946, and the fact that an expected postwar decline in population did not materialize.239 This abrupt change came just a few months after the aqueduct began operation, and initiated a second pipeline campaign that at times encountered the opposition of the federal government,

MWD, and the city of San Diego.

When asked who took the initiative in seeing the need for a second barrel of the San Diego Aqueduct, William Jennings’ answer was simply, “Mr. Heilbron.”240

Heilbron’s task in securing the second barrel would not be an easy one. To start, he

had the unanimous backing of his board of directors, including the representatives

237 J. L. Burkholder, “Report of the General Manager and Chief Engineer Recommending a Plan for Distributing Colorado River Water to the Authority Agencies,” June 1946, p. 2, SDCWA archives. 238 SDCWA, First Annual Report, 75. 239 J. L. Burkholder, “Report on the Need and Feasibility of Increasing the Capacity of the San Diego Aqueduct,” June 1948, p. 4, SDCWA archives. 240 Jennings, “Water Lawyer,” 82. 104 from San Diego. Even before the Burkholder report, the board had gone on record urging construction of the second barrel, not only because the region needed the water, but because the board thought that additional use would bolster California’s

Colorado River water rights against Arizona.241

The only serious obstacle to achieving unity within San Diego County on a second barrel project was the city of San Diego, and that problem did not take long to develop.242 By April 1948, SDCWA had contacted Assistant Secretary of the Interior

William Warne and obtained his support to begin negotiations for aqueduct expansion.243 Warne, as an Assistant Commissioner of the Bureau of Reclamation, had been on the committee that originally recommended aqueduct construction in

1944, and was already familiar with San Diego and its water requirements. Warne saw aqueduct expansion as a Reclamation project, although the original aqueduct had been constructed by the Navy Department with Reclamation assistance.

Two weeks after Warne’s positive statements regarding a second pipeline, the city of San Diego threw a wrench into the proceedings. Mayor Harley Knox and City

Manager Fred Rhodes, two of Heilbron’s stalwart allies in the quest for the original aqueduct, calculated that with “reasonable growth,” the city would not need additional water from a second pipeline for the next 30 years. The initial reasons

241 See San Diego County Water Authority Resolution No. 85, “A Resolution Urging Construction of the San Diego Aqueduct to Full Capacity and Requesting the General Manager and Chief Engineer to Study and Report on the Need and Feasibility of Such Construction,” March 11, 1948. 242 Jennings, “Water Lawyer,” 68. 243 Frank McComber, “Beginning of Talks for New S. D. Aqueduct Barrel Urged,” San Diego Union, April 4, 1948. 105

proffered for the city’s opposition were that (1) until California’s dispute with

Arizona over water rights was decided, the area could not be sure of enough water to

fill a second barrel; (2) immediate construction could jeopardize the city’s right to

develop the San Dieguito River; and (3) with development of the San Dieguito

system, the city could get by for 30 years with no additional water. Rhodes and

Gerald Arnold, the city’s water director, acknowledged that other areas in the county

had a greater need for additional aqueduct capacity, but emphasized they were only

considering the city’s situation. 244

The city did not immediately disclose other cogent reasons for its opposition to a second barrel, but the unstated reasons were perhaps the most compelling. Under the rules of preferential rights, which the CWA Act had lifted from the MWD Act, the city of San Diego had the right to take 85 percent of aqueduct flow in case demand was greater than supply. That 85 percent was derived from the proportion of

the city’s contribution in taxes to total SDCWA revenues. 245 Therefore, the city

already had the right to most of the water in the aqueduct, but would have to pay the

lion’s share of the cost of a second barrel, which would benefit other member

agencies with greater need of the additional water. The city’s position was eerily

similar to the position Los Angeles would take ten years later when SDCWA was

urging MWD to procure additional water from Northern California.

244 “Knox, Rhodes Oppose Second Aqueduct Barrel, Think Water Supply Adequate,” San Diego Tribune, April 21, 1948; “New Aqueduct Line Criticized,” San Diego Union, April 21, 1948. 245 San Diego County Water Authority, Second Annual Report, 8, 73. 106

Heilbron Defies the City of San Diego

Fred Heilbron was a knowledgeable, charming, folksy, and effective advocate when

he knew that sort of behavior was necessary to achieve his objectives. He was not so

reasonable on his home turf, even with the city that appointed him to the SDCWA

Board of Directors. In San Diego, Heilbron was gracious when his autocracy went

unquestioned, but a bully when someone challenged his judgment on regional water

issues. However one might have disparaged his tactics, Heilbron knew what he could

get away with, as evidenced by the fact that only death at the age of 95 would rob him

of his chairmanship. Had he not shared the condition of mortality with the rest of

humanity (and that was questionable for a time), he would probably be chairman

today.

As SDCWA waited for General Manager Burkholder to complete his report to

the directors confirming an immediate need for the second barrel, Heilbron took his

differences with the city to the public arena, leaving no doubt with whom he believed

the decision rested. “It is not the city’s province to bring Colorado River water to San

Diego,” he informed the city’s biggest newspaper. “The people decided the County

Water Authority should do that. The City forgot what the authority was constituted

for.” Additionally, “[t]he City didn’t get the facts in this matter. It went off half-

cocked.”246 Despite Heilbron’s criticism, the mayor stood firm in his opposition to the

second barrel. In response, the Bureau of Reclamation suspended preliminary studies

246 “Talk of Second Aqueduct Barrel Comes Up Again,” San Diego Union, May 14, 1948. 107

on the project until the matter could be resolved locally, but William Warne clearly

indicated his preference by saying he was puzzled by the city’s unexpected opposition

when the region was in a near-drought condition.247

Meetings between the city and SDCWA ensued, and by August city officials agreed that preliminary surveys could be made looking toward ultimate construction of the second pipeline. The conversation then turned to the question of how federal authorization and funding for the project might best ensure the earliest possible start.

Burkholder recommended stand-alone legislation as a national defense measure authorizing amendment to the existing aqueduct contract with the Navy. Warne and local Congressman Charles Fletcher believed peacetime defense legislation was impractical and the project should instead be authorized as a Reclamation expenditure. That route, however, would take longer.248

The pipeline advocates appear to have mistaken the city’s agreement to

conduct preliminary surveys as consent to immediate construction. That was not the

case, and the city’s appointment of Water Director Gerald Arnold as its fifth director

at SDCWA should have been a tip off, as Arnold was one of the strongest advocates

of a slowdown.249 The issue boiled over in September when Warne visited San Diego

to meet with local officials about the second barrel.

247 “Aqueduct Barrel Awaiting Truce,” San Diego Union, May 28, 1948. 248 “New San Diego Water Parley Will Be Held,” San Diego Union, August 4, 1948. 249 “Arnold Named to Water Board,” San Diego Tribune, July 27, 1948. 108

At the meeting, as William Jennings explained, “all was peace and harmony.

Mr. Heilbron had each one of us speak…. All the people there had been expressing themselves on how badly we needed that water…. We had heard from almost

everyone around the board table and were about to adjourn, when Mr. Heilbron came

to Mr. Arnold.”250 Arnold then stated that the city did not need the second barrel

anytime soon, and passed around a set of charts to support his contention.251 This

statement in front of the federal officials whose support for the project was essential apparently caught Heilbron by surprise. According the Jennings, “Fred, for one of the

few times in his life that I have known him, was just speechless.”252 At that point,

Heilbron launched a bitter tirade against Arnold, banging his fist on the table, and

yelling, “The most ridiculous statement I ever heard is we don’t need more water!”

After his attack on Arnold, Heilbron adjourned the meeting, stating, “If I have any apologies to make, I will not make them.”253 Heilbron was not kindly disposed to

disagreements over water issues on his home turf.

To get his way, Heilbron and SDCWA, according to city Councilman Charles

Dail, put on a publicity campaign to sell the second barrel and give the impression

that the council was opposed to the project.254 Dail was essentially correct on both

counts. The campaign for the second aqueduct had actually begun with Burkholder’s

250 Jennings, “Water Lawyer,” 68. 251 “Heilbron Hits Arnold Stand On Water Needs,” San Diego Union, September 14, 1948. 252 Jennings, “Water Lawyer,” 69. 253 “Heilbron Hits Arnold Stand On Water Needs,” San Diego Union, September 14, 1948. 254 “Dail Demands ‘Attitude’ on Second Barrel,” San Diego Union, May, 4, 1949. 109

report in June 1948, before the city’s views had been vetted. After the city’s

reluctance to endorse the project surfaced, Heilbron increased his efforts to put the

matter before the public and lambast the city position.

Through 1949, SDCWA and the city continued their feud over the second

pipeline, with city Water Director Arnold the most vocal opponent. In a trip to

Washington to request funding for regional water projects in March 1949, Arnold presented a priority list of seven items, with the second barrel dead last. Heilbron

immediately went to the press arguing that the pipeline should have been first. To

avert a battle over the priority list, Arnold claimed a few days later that the second

barrel was a county project and should not even have been on the list.255 As evidence

that the city’s position was beginning to soften, two councilmen sought to have

Arnold reprimanded for representing that the city was opposed, instead of undecided,

on the need for a second barrel.256

Other Obstacles to the Second Barrel

While SDCWA officials were working to bring the city of San Diego on board in support of the second pipeline, they also encountered problems with two other

indispensable partners: the federal government and MWD. Because SDCWA did not

own the aqueduct, it could not obtain a bond for construction of the second barrel, and wanted the Navy to build it under an amendment to the already existing contract

255 “Experts Argue Barrel Prioriy,” San Diego Tribune-Sun, March 4, 1949; “Arnold Says Warne Informed Aqueduct Is County Project,” San Diego Tribune, March 8, 1949. 256 “Two Councilmen Seek Reprimand of Arnold,” San Diego Union, April 27, 1949. 110

for the original aqueduct. William Warne of the Interior Department agreed that a

second pipeline was needed, but thought it was more practical to build it as an Interior

project even though the funding process might take longer. SDCWA continued to

advocate Navy participation, but was rebuffed in November 1948 when a Navy

admiral stated in no uncertain terms that the service could not take on the project. In a

peacetime environment, the chief of the Bureau of Yards and Docks explained, the

Navy was short of money and “[c]onstruction of an aqueduct would be far afield from

any purpose of the Navy.” Fred Heilbron’s reaction to the news, contrary to his

previously stated desires, was that negotiations would proceed with the Reclamation

Bureau, “which I’ve always felt would be the logical agency to handle it, anyway.”257

MWD, which SDCWA would rely upon to pay half the cost of the second

barrel as it had with the original aqueduct, was also less than enthusiastic. Concerns

over the future water supply that had prompted MWD’s Los Angeles directors to

question new annexations also raised the issue whether MWD should help pay for

additional aqueduct capacity that would stimulate growth and more water usage in

San Diego. Additionally, while the Colorado River Aqueduct tunnels and canals had been built to full capacity, MWD still had to add more pumps at its lift stations to

deliver full capacity. More water deliveries to SDCWA would hasten the need for that

expense.258 Fortunately for SDCWA, MWD had already committed to expand the

San Diego Aqueduct as needed. The terms of annexation of SDCWA to MWD in

257 “Navy Retires From Aqueduct,” San Diego Union, November 17, 1948. 258 Jennings, “Water Lawyer,” 72. 111

1946 provided, “the District, at its own cost, shall have the duty of operating,

maintaining, and, when necessary to satisfy the Authority’s requirements for water,

the obligation to enlarge or parallel that part of the… aqueduct lying northerly of

the… point of delivery.”259 In short, MWD had to pay its share of the second pipe if

SDCWA needed the capacity. While the city of San Diego may not have had an urgent need for the second pipeline capacity, most SDCWA member agencies clearly

did.

Joseph Jensen was rankled by the contractual commitment to enlarge the San

Diego Aqueduct, even though he was an ardent expansionist. The core irritant for

Jensen probably was that MWD did not control the situation. In that vein, Jensen and

MWD were unhappy that the second pipeline was shaping up as a federal project.

MWD had built the Colorado River Aqueduct on its own, and Jensen believed it

could construct the second pipeline more efficiently than the federal government.260

To appease Jensen, Heilbron dropped from an SDCWA resolution requesting a

federal survey of the need for the second barrel a clause implying that Reclamation would construct the project. Heilbron stated that the point could be debated later.261

By mid-1950, the Bureau of Reclamation was conducting its aqueduct survey

and sentiment among San Diego city officials was slowly heading toward support of the second barrel. Things, however, were not moving fast enough. The region was

259 Metropolitan Water District of Southern California Resolution No. 3612, October 4, 1946. 260 Jennings, “Water Lawyer,” 76. 261 “Water Group Asks Survey of Second Barrel,” San Diego Union, January 20, 1949. 112

again in the midst of a drought and SDCWA was drawing the full capacity of the first

pipeline. Moreover, areas in the county outside SDCWA were clamoring for

annexation. By June 1950, the San Diego City Council had requested its SDCWA

directors to refuse admission to any new agencies, and Heilbron informed applicants

that without a second barrel, he could not assure an adequate water supply.262

The Korean War Intervenes

The event that got the second barrel built occurred in, of all places, the Korean peninsula on the eastern edge of Asia. When North Korean troops invaded South

Korea on June 25, 1950, and President Truman decided to commit American troops to the struggle, a new war was in the offing. Within a month, advocates of the second pipeline saw their opportunity and initiated a campaign based on the premise that the

war would entail a military build up in the San Diego region and a demand for water

that could not be satisfied without additional aqueduct capacity.263 Heilbron, as usual,

was in the forefront of the effort, prodding federal officials with a prediction of the dire consequences of inaction.264

The Korean War brought the Navy back into the picture as the potential lead agency for pipeline construction. To that end, the Navy began its own study of water

262 “More Communities Seek Water Through S. D. County Water Authority,” San Diego Union, June 4, 1950; “New Water Agencies Opposed by Council,” San Diego Union, June 16, 1950. 263 Frank McComber, “Second Barrel Support Grows,” San Diego Evening Tribune, July 24, 1950. 264 Frank McComber, “Second S. D. Aqueduct Campaign Is Launched,” San Diego Evening Tribune, August 7, 1950. 113

requirements in the San Diego area on August 8, 1950.265 The San Diego City

Council went on record on August 10 supporting the Navy study, and on March 8,

1951, unequivocally endorsed federal legislation to ensure rapid construction of the

project.266 The August 10 resolution was followed on August 14 by the resignation

from the SDCWA Board of Directors of Gerald Arnold, the city water director who for two years had been Heilbron’s second barrel nemesis. 267 The record does not indicate whether the two events were connected.

With the Navy showing renewed interest and the city of San Diego in support,

local Congressman Clinton McKinnon introduced a bill in January 1951 to authorize

amendment of the original aqueduct contract with the Navy to provide for the second

barrel.268 In another positive step, the MWD Board of Directors endorsed the bill in principle after a finding by its general manager that additional water was urgently required in the SDCWA service area.269

As McKinnon’s bill made its way through Congress, SDCWA led a public

relations effort to keep the pressure on the federal government and fire the interest of

the general public. In cooperation with the San Diego Chamber of Commerce,

SDCWA produced a slick pamphlet intended solely for members of congress and

government agencies that portrayed the second barrel as a national issue whose

265 Frank McComber, “Navy Orders Survey Of 2nd Barrel Need,” San Diego Evening Tribune, August 8, 1950. 266 San Diego City Council Resolution No. 99041, August 10, 1950; San Diego City Council Resolution No. 101523, March 8, 1951. 267 G. E. Arnold letter to SDCWA Board of Directors, August 14, 1950, SDCWA archives. 268 “Second Barrel Bill Introduced by McKinnon,” San Diego Tribune, January 3, 1951. 269 A. L. Gram letter to SDCWA Board of Directors, January 15, 1951, SDCWA archives. 114

outcome was vital to the war effort.270 The progress of the legislation was reported extensively in the local press, along with predictions of water shortages owing to the

drought and increased wartime consumption.

Despite the pleas for urgency, the bill took the entire session of congress to achieve enactment. President Truman signed the authorization bill on October 11,

1951, followed shortly by a defense appropriations bill that included $18 million to

fund the project.271 The law as enacted also contained two provisions that were not in

the original aqueduct deal. First, SDCWA was given 40 years to repay the cost of the

second barrel, but had to pay interest on the outstanding balance. No interest had been

charged for the cost of the original aqueduct. Second, the member agencies of

SDCWA had to each agree to provide water on a preferential basis for federal

government activities within their service areas.272 After all, the project was justified

as necessary to provide water for the national defense.

Although MWD and Joseph Jensen had endorsed a second barrel, they had

their own ideas on how it should be constructed, at least as to the northern half that

MWD would pay for and operate. MWD wanted the northern half of the pipeline to carry a larger capacity than the Navy had planned, and more significantly MWD was

willing, and probably preferred, to construct the northern portion itself. Such a change

in plans could have entailed delay and perhaps have required new legislation,

270 Water Committee of the San Diego Chamber of Commerce, “For the Want of a Nail…” (San Diego: 1951), SDCWA archives. 271 “Barrel Bill Signed by President,” San Diego Union, October 12, 1951. 272 Public Law No. 171, 82nd Congress, Second Session. 115 outcomes that SDCWA would not abide. When MWD arranged a meeting with

Secretary of the Navy Daniel Kimball in Los Angeles on Christmas Eve 1951,

Heilbron learned of the meeting and decided to attend as a member of the MWD

Board of Directors. Heilbron brought along SDCWA General Counsel Bill Jennings, whom he directed to monopolize the conversation with Secretary Kimball. As Jensen started to explain the MWD position, Jennings intervened to emphasize in detail the dire situation confronting San Diego if the pipeline were not promptly built. After

Jennings exhausted himself, Kimball turned to Jensen and stated he presumed MWD was willing to go along with the relief for San Diego. While Jensen hemmed and hawed, Kimball departed for other business, leaving Jensen outwitted and frustrated.273

Despite being temporarily sidetracked by the SDCWA machinations, MWD finally made its case to the Navy, and the two agreed that the second barrel should be constructed as a Navy project, but with a larger capacity than originally planned. That alteration did not require additional legislation, and allowed the necessary contracts to proceed. However, in its contract with SDCWA taking responsibility for the northern half of the project, MWD insisted on a provision stating, “…compliance with this contract shall constitute full performance of any existing agreement by the District to enlarge or parallel any part of the Aqueduct.”274 MWD wanted to erase any obligation to provide additional aqueduct space to SDCWA in the future, and SDCWA, faced

273 Jennings, “Water Lawyer,” 76-80. Jennings gives a colorful account of the meeting. 274 “Agreement between the Metropolitan Water District of Southern California and the San Diego County Water Authority,” September 29, 1952, SDCWA archives. 116

with a take-it-or-leave-it proposition, had to agree. The issue would be revived when

SDCWA needed additional pipeline facilities only a few years later.

The contract between SDCWA and the Navy for repayment of the cost of

construction required ratification by popular vote, which occurred on February 26,

1952, by an overwhelming 40-1 majority. 275 Construction contracts for the second

barrel were awarded in September 1952, and the completed project was turned over to

SDCWA by the Navy on February 28, 1955.276 Just three months later, a staff report

indicated that SDCWA could need an additional supply of water by 1960.277

A Second Barrel Retrospective

The struggle to acquire the second barrel is a case study on how SDCWA operated in

its early years, and the central point is that Fred Heilbron was SDCWA. Heilbron’s

mantra was that progress required growth, and growth required water. Toward the end

of his life, a newspaper article summed up his work by observing, “Throughout the

years, Heilbron hammered out his theme on podiums, desk tops and lawmakers

tables: ‘More water, gentlemen, more water!!!’”278 The second barrel saga was not

Heilbron’s first effort to acquire more water for the region nor his last, but it is representative of his philosophy and modus operandi.

275 “Three Water Issues Carry,” San Diego Evening Tribune, February 27, 1952. 276 San Diego County Water Authority, Seventh Annual Report (San Diego, 1953), 36-37; San Diego County Water Authority, Ninth Annual Report (San Diego, 1955), 28. 277 San Diego County Water Authority, Ninth Annual Report, 12. 278 Joe McCain, “’Mr. Water’ Won Battle,” San Diego Tribune, March 8, 1968. 117

Heilbron was a dominant force. As a director representing the city of San

Diego, he openly defied the city’s reticence on the second barrel and made sure the city was blamed in local newspapers for holding up the project. This would seem grounds for removal from office, but that did not happen for a couple of reasons.

First, under the CWA Act, a director could be removed before the conclusion of his six-year term only by a popular recall vote or by the unanimous vote of the governing body of the public agency from which he was appointed.279 That was a difficult standard, and the record indicates that Heilbron consistently retained the support of at

least some members of the city council. Second, Heilbron’s stature made him

bulletproof. When Heilbron’s initial six year term expired in June 1950, the mayor

could simply have appointed another representative. Instead, the mayor reappointed

Heilbron with city council approval.280 In effect, Heilbron was answerable to nobody.

Heilbron’s success with the federal government and MWD is also remarkable.

He preferred to woo his audience with homespun charm and a shared allegiance to the

religion of constant growth, but if charm did not do the job, he was a master of

political maneuvering. Heilbron’s treatment of Joseph Jensen at the meeting with

Secretary Kimball in December 1951 must have ruffled Jensen’s feathers, and was to

be followed by many dustups between them over the years. But that did not prevent

Heilbron from being elected Secretary of the MWD Board of Directors in 1951, apparently with Jensen’s blessing, a post to which he was re-elected continuously

279 San Diego County Water Authority, Fifth Annual Report (San Diego, 1951), Section 6, CWA Act, p. 73. 280 City of San Diego Resolution No. 98409, June 22, 1950. 118

until he voluntarily relinquished the position in 1970. In 1966, when asked about the

cooperation he had experienced with Heilbron, Jensen responded, “That’s all been

very good. That’s been very good.”281 Somehow, Heilbron could fight periodically

with Jensen and yet over time remain in his good graces.

Finally, Heilbron used the press relentlessly in the campaign for the second

aqueduct. In characterizing water agencies as “hidden government,” Gottlieb and

FitzSimmons describe an environment in which agencies can keep their activities under wraps to avoid public scrutiny. This allows the agency to conduct its business without interference, but it also empowers the agency to determine when it is advantageous to put an issue before the public. Amid a barrage of articles stressing the region’s imminent threat of a water shortage, the region’s largest-circulation newspapers reported every move by the city of San Diego, MWD, and the federal government with respect to the second barrel, dispensing praise or condemnation depending on the subject’s enthusiasm for the project. This was an orchestrated campaign led by SDCWA, the only entity that had access to all the information and a motive to share it.

The Laguna Declaration

With ample aqueduct capacity assured for the time being by the second barrel,

SDCWA focused its attention on whether there would be sufficient water available

from MWD to fill the pipelines. When MWD loosened its annexation policy in 1949,

281 Jensen, “Developing California’s Natural Resources,” 149. 119

new annexation requests ensued, including some from agencies asking access to

MWD through membership in SDCWA. In addition to absorbing the new territory

from SDCWA and other member agencies, MWD added the Pomona Valley Water

District in 1950, and the Chino Basin Municipal Water District and Orange County

Municipal Water District in 1951. By mid-1953, MWD contained 1,750 square miles

and a population of 4,342,000.282 In contrast, the MWD service area just after

annexation of SDCWA in December 1946 was 784 square miles, with a population of

3,100,000.283 Despite SDCWA’s growth, its voting strength at MWD had actually

declined slightly, to about 9.3 percent.284

A liberal annexation policy meant that more land would come within the

MWD service area, resulting in increased competition for available water supplies.

SDCWA and other MWD member agencies worried that at some point Colorado

River supplies would not be able to keep up with demand. Such worries were exacerbated by an outdated MWD statement of policy that had never been revised. In

1938, the MWD Water Problems Committee summarized the district’s overall policy

objectives. It linked “the ultimate capacity of the [Colorado River] Aqueduct” with the extension of the MWD service area “within certain definite limits” based on

MWD’s ability to assure an “adequate supply” of water.285 In other words, MWD did

282 Metropolitan Water District, Fifteenth Annual Report, (Los Angeles, 1953), xiv, 3. 283 MWD, Ninth Annual Report, 4. 284 MWD, Fifteenth Annual Report, xvi. 285 Metropolitan Water District, Special Water Problems Committee, “Statement of Conditions Governing Annexation to the Metropolitan Water District of Southern California,” October 26, 1938; cited in Gottlieb and FitzSimmons, Thirst for Growth, 14. 120

not anticipate satisfying water demands of member agencies through any means other

than the Colorado River Aqueduct.

Whether MWD still adhered to the 1938 policy statement was questionable,

but until a new policy was adopted, it was the district’s last statement on the subject.

This concern led San Diego city representatives to set a meeting at Laguna Beach on

December 12, 1952, with a group of MWD directors that included Joseph Jensen and

Fred Heilbron. The request for a meeting arose when worried city officials asked

SDCWA to refrain from further annexations in order to preserve the city’s future

supplies. SDCWA directors replied that they were confident MWD would be able to

furnish ample supplies, and the meeting was arranged to receive such assurances.286

A. L. Gram, MWD’s Executive Secretary, provided a detailed summary of the

meeting at Laguna Beach that is instructive of the relationships among the city of San

Diego, SDCWA, and MWD at the time, as well as the issues that concerned them. 287

Mayor John Butler of San Diego began with a description of the city’s water supply situation. As things then stood, the city estimated that its local supply and entitlement to Colorado River water based on preferential rights would suffice until 1975.

However, as SDCWA and MWD annexed more territory and agencies, the right would diminish. To counter that problem, the city asked if MWD could provide it a guaranteed supply of water. MWD General Counsel James Howard stated that no

286 “Water Session Set for Friday,” San Diego Evening Tribune, December 10, 1952. 287 A. L. Gram, “Summary: Joint Meeting: Representatives of the City of San Diego and of the Metropolitan Water District of Southern California,” December 12, 1952, SDCWA archives. 121

member agency could be guaranteed a certain supply except for the system of

preferential rights that applied only when supply could not meet demand.

MWD directors explained that limitations on annexations to preserve future

supplies for current member agencies might encourage the state legislature to amend

the MWD Act and SDCWA Act to make such annexations mandatory. Also, they

feared the courts might forbid MWD to hoard water for future use when other areas in

the region needed it immediately. However, uncontrolled annexation of rural areas

could also be detrimental. A potential solution was to impose a minimum annexation

charge so that areas with low assessed value would have to make a substantial

investment. MWD Vice-Chairman Warren Butler believed such a requirement would

deter unsound and uneconomic annexations.

When asked to comment, Chairman Jensen spoke at length. He endorsed the

proposition that areas of low assessed value should be assessed a minimum charge

per acre for annexation, and attributed that idea to SDCWA representatives Heilbron

and Burkholder. He also criticized San Diego’s actions regarding the second barrel.

Jensen maintained that MWD would have built the pipeline cheaper and at greater

capacity, but SDCWA and San Diego negotiators in Washington had precluded that

possibility.

The remainder of Jensen’s statement reflected his philosophy. Jensen

expressed the conviction that Southern California would continue to grow and that somehow the necessary water would be found. He cited the proposed Feather River

Project, which would bring water from Northern California, as a potential source. 122

More fundamentally, Jensen stated that by the time all of the Colorado River water was put to use, MWD would be the largest integrated taxing unit in the state of

California, except for the state itself. That would give the district the wealth and population to deal from a position of strength with anybody. To achieve this power, it was essential that MWD be the only importer of water into the region. 288 In other

words, MWD regional hegemony was essential to the prosperity of Southern

California. According to Jensen, “It is time to make the declaration that we are the

boys who are going to gather the water for Southern California and dish it out. We are

going to tell the state engineer [who was planning the Feather River Project] to keep

out of our way unless he deals through us with Southern California.”289

At the end of the meeting, Fred Heilbron was asked to provide his perspective.

He pointed out that:

[MWD] represented a united group in Southern California for the

development of a water supply as a basis for future growth and

prosperity; a situation that had been almost impossible of achievement

in the past due to the existence of rivalries. He stated the opinion that

the San Diego area had made the best possible investment in becoming

a part of [MWD]; and that the growth and the necessary providing of

water supply was only limited by the ability to raise money….290

288 Ibid. 289 “’We’re Water Boss,’ Metropolitan Told,” San Diego Evening Tribune, December 13, 1952. 290 Gram, “Summary of Joint Meeting of December 12, 1952,” 9. 123

Despite their past and future differences, Jensen and Heilbron were cut from the same

cloth. For them, growth meant prosperity, water meant growth, and the best way of

acquiring additional supplies was to present a united, powerful front that could defeat

competing interests. They were also each convinced that he himself was the

appropriate person to lead and control that effort.

Days after the Laguna Beach meeting, the MWD Board of Directors adopted the statement of policy that is today known as the Laguna Declaration:

[MWD] is prepared, with its existing governmental powers and its

present and projected distribution facilities, to provide its service area

with adequate supplies of water to meet expanding and increasing needs

in the years ahead…. When and as additional water resources are

required to meet increasing needs for domestic, industrial and municipal

water, [MWD] will be prepared to deliver such supplies…. Establishment

of overlapping and paralleling government authorities and water

distribution facilities to service Southern California areas would place a

wasteful and unnecessary financial burden upon all of the people of

California, and particularly the residents of Southern California.291

In “Urban Water Policy,” Kazuto Oshio describes the Laguna Declaration as a

complete reversal of previous policy, with MWD declaring it would provide water to

291 Metropolitan Water District. “Statement of Policy: Approved by the Board of Directors of the Metropolitan Water District of Southern California,” December 16, 1952, SDCWA archives; Minutes, MWD Board of Directors Meeting, December 16, 1952. 124

any member at whatever the cost.292 Joseph Jensen did not see the Laguna

Declaration in such revolutionary terms. According to Jensen, “The Laguna Beach

declaration was made about in 1952, but the big scrap… was in 1948 when Pomona

and Chino wanted to come in…. We had a wide-open policy from 1949 on – during the fifties –up until 1960. Anybody could come in that wanted….293 Jensen

apparently saw the Laguna Declaration only as the formal statement of a policy that had been settled when the decision was made in 1949 to allow the Pomona and

Ontario areas into MWD. Nevertheless, annexations at MWD and SDCWA increased in the aftermath of the Laguna Declaration, leading to the next contest between the two agencies.

Expansion of MWD and SDCWA in the 1950s; Joe Jensen Prods SDCWA into Annexing Rural Areas

MWD annexation statistics support Joseph Jensen’s contention that the real change in the district’s annexation policy occurred with the decision to admit the Pomona and

Ontario areas. In 1949, the MWD service area included 904 square miles, increasing to 1,555 square miles at the time of the Laguna Declaration.294 Growth continued

after the Laguna Declaration, and by 1955 MWD had added three more member

292 Oshio, “Urban Water Diplomacy,” 167. 293 Jensen, “Developing California’s Natural Resources,” 150. 294 Metropolitan Water District, Eleventh Annual Report, 5; Metropolitan Water District, Fourteenth Annual Report, (Los Angeles, 1952), 4. 125

agencies, boasting a service area of 2,803 square miles and a population of seven

million.295

SDCWA did not expand as rapidly as the rest of MWD. At the time of annexation to MWD in 1946, SDCWA encompassed an area of 148 square miles.296

Two new member agencies had been added in 1948, and two more between 1950 and

1952, but total area by early 1953 had experienced a relatively small increase to 219

square miles.297 SDCWA had received applications from other areas in the county

with more to come, but uncertainty over construction of the second barrel and

concerns about sufficiency of the MWD water supply made the agency cautious about

taking on new responsibilities.

SDCWA directors had other reasons for discouraging annexation of outlying

areas. Those concerns surfaced when the Rainbow Public Utility District in inland

north county inquired about membership. As with MWD, annexation to SDCWA

required the payment of back taxes based on the assessed valuation of the annexed

agency. Because Rainbow had little assessed value, its annexation fee would be

miniscule. The benefit for Rainbow landowners, however, would be tremendous.

When land “gets water on it,” as Joe Jensen stated, its value would skyrocket.298 Also,

SDCWA directors wanted new members to have at least some developed water

supply so that MWD and SDCWA would not be its sole provider. Faced with the

295 Metropolitan Water District, Seventeenth Annual Report, (Los Angeles, 1955), 4. 296 SDCWA, First Annual Report, 6. 297 SDCWA, Seventh Annual Report (San Diego County Water Authority, 1952), ix, 3. 298 Jensen, “Developing California’s Natural Resources,” 129. 126

Rainbow application, the SDCWA Board of Directors in September 1952 unanimously approved the policy that an area would be considered favorably for

annexation if (1) it had sufficient assessed value to result in an annexation fee that

was somewhat comparable to capital costs borne per acre by present members; and

(2) it had sufficient developed local water supplies so that the new agencies’ requirements for supplementary water from SDCWA would be somewhat comparable to present members. 299 In other words, SDCWA wanted new member agencies to pull

their own weight. On the basis of those criteria, the Rainbow application was rejected.

The SDCWA denial of membership did not sit well with Rainbow, which then

applied for annexation directly to MWD. When the application was accepted for

consideration by the MWD Water Problems Committee, Fred Heilbron was outraged.

“He stated the Authority was organized to be the agency in San Diego County to

provide imported water within the County and the Committee should deny the

application and suggest annexation to the Authority.”300 Although Heilbron’s recommendation appears logical, MWD and especially Joseph Jensen had an ulterior motive. When Rainbow applied for membership with MWD, its representative stated

that Rainbow would be responsible for the cost of building any necessary pipelines from the Colorado River Aqueduct to provide water. This offer had a strong appeal for Jensen, who was still unhappy over MWD having to pay for half of the second barrel on someone else’s terms, and was concerned, despite the disclaimers, that

299 Minutes, SDCWA Board of Directors Meeting, September 18, 1952. 300 Harry Griffen, “Harry Griffen Manuscript,” chap. 5-3g, 9. 127

MWD might again have to pay for subsequent pipelines. Jensen had already written

to the Los Angeles delegation on the MWD Board urging the position that SDCWA would have to pay the entire cost of any new pipeline from the Colorado River

Aqueduct, and the Rainbow situation provided him a convenient strategy. Jensen envisioned Rainbow as a nucleus around which other north San Diego County areas could be added on the condition that they would pay the cost of transportation facilities. Alternatively, MWD could allow SDCWA to annex Rainbow, but only if it agreed to the same condition. 301

Fred Heilbron was in a delicate position. He was committed to a county-wide

approach to water, with himself in charge, and the thought of another imported water

supplier in San Diego County was anathema. But before he could deal with MWD, he

needed to consolidate the SDCWA position. At a SDCWA Board of Directors

meeting on April 26, 1953, Heilbron produced a letter from the San Diego City

Council stating that only one agency in the county should distribute water from the

same river at the same time. However, the council also stated that newly annexed

areas should receive water only if existing member agencies had sufficient supplies.

General Counsel Bill Jennings stated that neither the SDCWA Act nor the MWD Act

allowed such a provision, and that preferential rights would apply in times of

shortage. After discussion, the board of directors voted to inform MWD by resolution

that it would allow annexation of Rainbow to SDCWA but with the same condition

301 Ibid., 10. 128

that Jensen had proposed, i.e., that Rainbow would have to provide its own

transportation.302

Jensen was not pleased with SDCWA imposing the same condition on

Rainbow that he himself had proposed for Rainbow’s admission to MWD. In response to the SDCWA offer, the MWD Water Problems Committee recommended that the annexation of Rainbow to SDCWA be approved only if SDCWA amended its

resolution to delete the requirement that Rainbow pay for any new pipeline needed to

provide water to its service area.303 This did not satisfy Jensen, who offered a

resolution at the next MWD Water Problems Committee meeting that annexation of

Rainbow by SDCWA would be permitted only if SDCWA agreed to pay the cost of

any new pipelines into the area from the Colorado River Aqueduct. Fred Heilbron

objected, stating that such a measure would single out SDCWA for unfair treatment

among MWD member agencies. A MWD assistant general counsel at the meeting

supported Heilbron, stating that MWD had a statutory duty to provide service to its

member agencies, although the extent of that obligation was uncertain, leaving the

board of directors considerable flexibility. 304 Finally, MWD adopted a more generic position that did not mention SDCWA, stating that it was not responsible to provide additional water delivery facilities required by virtue of any future annexations. 305

302 Minutes, SDCWA Board of Directors Meeting, April 27, 1953. 303 Minutes, SDCWA Board of Directors Meeting, May 11, 1953. 304 Griffen, “Harry Griffen Manuscript,” 10-12. 305 Minutes, SDCWA Board of Directors Meeting, July 16, 1953. 129

After all the controversy, SDCWA, with MWD’s consent, approved the

Rainbow annexation application under its existing terms and conditions, without

special provision. However, of the eight directors from the city of San Diego, two

opposed the annexation and a third stated that he voted in favor only because the San

Diego City Council supported the measure. One of the opponents maintained that it

would benefit both Rainbow and SDCWA to have the area annexed directly to

MWD.306 Because the city’s assessed value votes were cast as a unit, the recorded

vote was unanimous.

With the second barrel almost complete, SDCWA admitted Rainbow and four

other north county agencies in 1954 and an additional agency in 1955, increasing its total area from 219 square miles in 1953 to 546 square miles in 1955.307 This

expansion guaranteed that a third barrel would be needed soon and that another

controversy with MWD over allocation of costs would ensue.

Years after the event, Joseph Jensen stated that the reason he offered to bring

Rainbow into MWD after SDCWA turned it down was because MWD had decided as

a matter of policy that “[a]nybody could come in that wanted and was welcome.”308

However, at the MWD Water Problems Committee meeting of May 26, 1953, Jensen

stated that he favored direct annexation of the north county area solely because it

would eliminate the burden of constructing a third pipeline to serve SDCWA. 309 The

306 Ibid. 307 SDCWA, Ninth Annual Report, 46. 308 Jensen, “Developing California’s Natural Resources,” 150. 309 Griffen, “Harry Griffen Manuscript,” chap. 5-3g, 11. 130

1953 explanation is more plausible, given the conditions Jensen attempted to impose

on accepting a Rainbow annexation to SDCWA. In the end, Rainbow and other north

county areas came into the SDCWA and MWD familes, realizing Jensen’s stated

preference for inclusion but making the dreaded third barrel a much more immediate

issue. The episode also points to a lack of finesse, particularly on an issue that bit at

Jensen. He had been outmaneuvered by Fred Heilbron and SDCWA on the second barrel, having to accept construction by the Navy and payment of half the cost. For

Jensen, the next pipeline would be a different story. However, he should have known that singling out one member agency for denial of future water conveyance facilities would raise legal issues, and he was contradicted on that position in public by his legal counsel. In 1960, Jensen would again be frustrated in his attempt to control an outcome, but on a much more important issue – the State Water Project. Nevertheless, the same imperious and stubborn traits that hurt him on occasion also helped keep him at the head of MWD until the end of his life.

The Laguna Declaration Sets the Stage for the Pursuit of More Water and Accompanying Internal Conflict at MWD

The first years of the MWD and SDCWA partnership was a time of growth and expansion, but not always of unanimity. Acting in Los Angeles’ self-interest, its directors at MWD initially opposed annexation of outlying areas in 1949 because the new member agencies by virtue of their low property value would pay a small entry fee but demand increasing water deliveries to support development. The Los Angeles 131

directors balked at paying for another area’s growth, but under the threat of legislative

intervention soon returned to the expansionist camp. At SDCWA, the city of San

Diego in 1951 questioned the need for a second barrel of the San Diego Aqueduct for

the same reason, but was bowled over by the personal power of Fred Heilbron and

public sentiment favoring growth. In 1953, SDCWA adopted a policy to reject

membership applications of agencies in the county with a small tax base and little of

their own water. That policy was quickly voided when MWD threatened to directly

admit such agencies. Each of these episodes was followed quickly by the admission

of more member agencies. As it turned out, even the most powerful member agencies,

Los Angeles at MWD and San Diego at SDCWA, could not slow the growth for

which they would pay the lion’s share.

Despite the occasional differences, MWD in adopting the Laguna Declaration

was firmly committed to providing whatever water its service area needed to

accommodate growth. To make good on that promise, it was becoming increasingly

evident that MWD would eventually require a new water supply to augment what it

drew from the Colorado River. The most likely source was rivers flowing west from

the Sierra Nevada mountain range in Northern California, which would require a

transportation system longer than MWD’s Colorado River Aqueduct. The state engineer had already proposed the Feather River Project to do the job, but in the early

1950s it was only a proposal. Over the next ten years, SDCWA, Los Angeles, and the

other MWD member agencies would address the project from their own particular

viewpoints, and use it as leverage to attain their individual goals. 132

Chapter Three

The State Water Project and Battles Over Allocation of Costs 1955-1964

The Feather River Project (in 1960 expanded and renamed the State Water Project)

was proposed by California State Engineer A. D. Edmonston in a feasibility report published in May 1951.310 The Feather River is the most important tributary of the

Sacramento River, rising in the snow-laden Sierra Nevada mountains and, after its

convergence with the Sacramento, emptying into the Sacramento-San Joaquin Delta and then to the San Francisco Bay. The project would erect a dam near Oroville, with

a capacity of up to 3.5 million acre-feet, to provide flood control in the river drainage

and supplemental water to Alameda and Santa Clara Counties in Northern California,

the San Joaquin Valley in Central California, and all the counties of Southern

California. While the concept of such a project was not new, Edmonston’s report

recommended that it be adopted as a part of the California Water Plan, and that

legislation be considered for its implementation.311

The Feather River Project report immediately drew interest among Southern

California water agencies, which were attracted to the prospect of millions of acre-

310 California State Water Resources Board, “Report on Feasibility of Feather River Project and Sacramento-San Joaquin Delta Diversion Projects Proposed as Features of the California Water Plan,” (Sacramento, 1951). 311 Ibid., 51. 133

feet of new water. For the next fifteen years, MWD, SDCWA, and the city of Los

Angeles attempted with varying success to manipulate the project to their advantage,

withholding or providing support not only as a function of their perceived need for

additional water, but also to acquire leverage for other agendas. Prominent among

those agendas were MWD and Joseph Jensen’s effort to bolster the agency’s regional

hegemony, SDCWA and Fred Heilbron’s need for a third aqueduct pipeline into the

county, and the city of Los Angeles’ desire to shift the balance of MWD revenues

away from taxes and toward the cost of water. The Feather River Project provided the

stage for new contests between Joe Jensen and Fred Heilbron, and at a crucial point found Jensen isolated from his own city of Los Angeles.

The ultimately successful drive to authorize, fund, and implement the State

Water Project was the product of an eventual partnership among the state and

Southern California water agencies that each embraced the mission of providing ample water to fuel the growth of its service area. However, while sharing the same vision, they would fight a long battle over who would control the new water supply and how the costs would be allocated.

Within MWD, three distinct viewpoints would dominate the debate over the

State Water Project. First, the expanding member agencies, led by SDCWA, with relatively small preferential rights worried that MWD’s Colorado River supply would someday prove insufficient to meet demands, and their service areas would be hit the

hardest by shortages. Those agencies were early and ardent supporters of the project and were not particular about the terms of a delivery contract. Second, the stable, 134

built-out member agencies led by Los Angeles generally held preferential rights in

excess of their actual draw on MWD and felt relatively secure with the Colorado

River supply. Because their taxes still constituted most of MWD’s revenues, they did

not want to pay for a State Water Project that would mainly benefit member agencies

that paid less. It was only after the MWD Board of Directors changed the revenue

structure to rely more on the water rate and less on taxes that Los Angeles and

similarly situated agencies supported the project. Third, Joseph Jensen would oppose

the State Water Project mainly because he saw it as a state invasion of his territory.

Even when the Los Angeles delegation joined other MWD member agencies in approving the contract with the state and endorsing a bond election to finance it,

Jensen decried the action as “tragic.” Shortly thereafter, however, even Jensen could adapt and soon acted as if the State Water Project was his own.

The state representatives who initially approached MWD with the prospect of a vast new source of water probably expected to be met with gratitude and open arms.

Instead, MWD officials attacked the state plan over a course of years and, combined

with the opposition of Northern Californians, almost derailed it. While the MWD

attitude was alternately noncommittal and negative, SDCWA and other expanding

member agencies that felt a new water supply was crucial to their mission allied with

the state against their parent district. SDCWA even threatened to execute its own

water contract with the state if MWD would not. In the end, the parties compromised

and the bond measure funding the project squeaked by on a statewide vote. The water

buffaloes did not know it at the time, but the State Water Project would be the 135

greatest and last victory for the premise that progress required growth, and growth

required more and more water.

MWD’s Reservations Concerning the Feather River Project

The MWD leadership took a cautious approach toward Edmonston’s proposal.

Although the district supported the concept of a massive additional water supply for its service area, most member agencies wanted to see how the project developed.

Taking a position was not necessary until members of the state legislature proposed a

$16 million appropriation to begin work on the Feather River Project. At that point,

MWD General Manager Diemer weighed in. In February 1955, at a meeting in San

Diego, Diemer and Assistant General Counsel Charles Cooper argued that MWD should not participate in the project until contractors could obtain a firm right to water it produced. Their concern was ignited by a recent state attorney general opinion that a “county of origin” had a superior right to water originating in its jurisdiction. To counter the threat that project water might in the future be reclaimed by a county of origin, the MWD officials argued that the problem could only be corrected by a state constitutional amendment. At the same time, MWD questioned the wisdom of proposed aqueduct routes, especially a plan to pump water more than 3,000 feet over the Tehachapi Mountains, and advocated further study of a less mountainous coastal 136

route.312 The MWD position was memorialized in a statement of policy adopted by the board of directors on August 19, 1955.313

Other factors, not as amenable to discussion in a public forum, also drove

MWD’s less than enthusiastic response to the Feather River Project. In the first place,

some member agencies believed that MWD had all the water it would ever need with

the Colorado River supply. After all, in fiscal year 1956, MWD had delivered a total

of 406,000 acre-feet to its member agencies, and that after a significant expansion of

district boundaries. With MWD’s Colorado River contracts at 1.212 million acre-feet,

some board members did not believe a new supply was necessary. This feeling was

especially true with MWD’s Los Angeles directors, whose city possessed not only a

large preferential right to the MWD supply, but also its own supply from the Los

Angeles Aqueduct and Owens Valley. Moreover, if MWD contracted to pay the cost

of transporting water from the north, so long as the bulk of district revenues came

from taxes, Los Angeles would bear the greatest portion of the cost. There was also

some concern that acquisition of a new water supply would damage MWD’s case in

Arizona v. California. Water lawyers had warned that the Supreme Court might rely

on the doctrine of “equitable apportionment” in deciding the case, which would take into consideration the relative need of each of the litigants for Colorado River water.

If MWD had another available supply from Northern California, its requirement for

312 “Feather River Plan Opposed Until Changes Are Adopted,” San Diego Union, February 18, 1955; “Water Chief Opposes Feather River Outlay,” Los Angeles Tmes, March 9, 1953. 313 Metropolitan Water District of Southern California, Seventeenth Annual Report, 97. 137

Colorado River water would not be so urgent. Finally, some MWD officials saw the

Feather River Project as a threat to their regional monopoly over imported water.

Robert Edmonston, the son of State Engineer A. D. Edmonston and himself a

state employee working on behalf of the Feather River Project in Southern California

during the 1950s, gave his assessment of MWD’s reluctance to support the project.

“So I think they [MWD officials] spoke out of ignorance, number one, as to what

their future demands were; number two, over fear that this was going to jeopardize

their position in court with Arizona, and number three, underlying it all and knowing

the people involved, that it kind of took something away from them…. They were

fearful, I think, of political control by the state and the state getting into the water

business.”314 Harvey O. Banks, who succeeded A. D. Edmonston as state engineer in

1955 and became the director of the new state Department of Water Resources in

1956, had a similar view of the MWD position. He saw MWD as unrealistic about the

availability of future supplies, largely because of a refusal to recognize that Arizona v.

California could end badly for California. He said, “[A]s far as the Metropolitan

Water District is concerned, up until 1960, that District refused to admit even to themselves, so far as I’m aware, that they possibly could be cut down on the Colorado

River supply. I can remember distinctly in 1957 and 1958 being told by [MWD Board

314 R. M. Edmonston, “Preliminary Studies: The California Water Plan,” 75. 138

members]… that there was no possibility of their being short on water…, and that

they saw no reason to be interested in a state water plan.”315

MWD and SDCWA Disagree on Feather River Project Funding

With the second barrel of the San Diego Aqueduct under construction, SDCWA wanted to ensure that there would be enough water available from MWD to fill it.

Arizona v. California was still in its early stages in the mid-1950s, but if Arizona got

its way, California’s right to receive surplus water in excess of its basic

apportionment of 4.4 million acre-feet would be severely undermined. In that event,

since all but 550,000 acre-feet of the MWD entitlement was surplus water, SDCWA’s

preferential right of about ten per cent would prove completely inadequate. This, of

course, concerned the San Diegans, who were therefore enthusiastic about securing a

new supply from Northern California. As early as January 1953, the SDCWA Board of Directors declared its “definite interest” in the Feather River Project and invited

State Engineer Edmonston to discuss the plan with them and where SDCWA might fit in.316

To add to SDCWA’s sense of urgency, the addition of new agencies, annexation of territory within existing member agencies, and continuing population

growth fomented ever-increasing estimates of water demand in the near future. In

January 1954, Fred Heilbron boasted that with the completion of the second barrel,

315 Harvey O. Banks, “California Water Project, 1955-1961” (Berkeley: Statewide Water Resources Center, University of California, 1967), 9. 316 Minutes, SDCWA Board of Directors Meeting, January 15, 1953. 139

the region should have enough water for the “next 20 or 25 years.”317 However, the

next year a report commissioned by SDCWA painted a disturbing picture as to both the adequacy of water transportation facilities and of the water supply itself. The

“Report on Water Supply for the Probable Future Developments in the San Diego

County Water Authority,” issued by a board of engineers in September 1955, determined water supply requirements based on an estimate of the probable future extent of the Authority’s service area made by General Manager Holmgren.318 With

an area of only about 97,000 acres in 1946, SDCWA had grown to more than 351,000

acres by June 1955, and six areas, with another 138,000 acres, were considering

annexation. Holmgren estimated the ultimate SDCWA service area in the year 2000 at 821,000 acres, with 557,000 of those acres actually served.319

Future water demand at SDCWA was not the only worry for local officials.

The 1955 engineers’ report predicted that expansion and growth would similarly increase water usage by other MWD member agencies, putting further pressure on

Colorado River supplies. Also, if the pending Upper Colorado River Storage Project were to be authorized by Congress and implemented, increased usage in the upper basin could deprive MWD of surplus allocations and reduce its Colorado River

317 “Lasting Flow of Water Seen,” San Diego Union, January 14, 1954. 318 Raymond A. Hill, John S. Longwell, and Carl R. Rankin, “Report on Water Supply for Probable Future Developments in the San Diego County Water Authority,” (San Diego: San Diego County Water Authority, 1955), SDCWA archives. 319 Ibid., 1-3; SDCWA, First Annual Report, 4. 140

supply to about 542,000 acre feet per year as early as 1970.320 Clearly, another source

of water had to be found, and the board of engineers suggested four possibilities.

Three of those potential sources were reclamation of sewage, transfer of irrigation

runoff from the Imperial Valley, and desalination of ocean water. Each of the three

were deemed infeasible at the time for various problems of cost and lack of technology, and, in a remarkable display of prescience, were left to future generations

of SDCWA officials to consider.321 The most promising major source of new water was the Feather River Project, and the report recommended that SDCWA work with

MWD and others to secure that supply.

To transport the additional water the region would soon need, the engineers’ report recommended that SDCWA proceed with plans to build a second aqueduct from the MWD supply source with a capacity of 200 cubic feet per second, far exceeding the combined capacity of the first and second barrels of the existing aqueduct. This coincided with MWD’s own initiative to install additional pumps along the Colorado River Aqueduct to send more water through its system. 322 Finally,

to avoid future water shortages, the board of engineers recommended that no further annexations be made to SDCWA “pending a more thorough and complete analysis of

the water supply problems.”323

320 Hill et al., “Report on Water Supply for Probable Future Development in the San Diego County Water Authority,” 6-14. 321 Ibid., 16-17. 322 Metropolitan Water District, Seventeenth Annual Report, 63-64. 323 Hill et al., “Report on Water Supply for Probable Future Development in the San Diego County Water Authority,” 19. 141

The 1955 engineers’ report defined SDCWA goals in its relations with MWD for the next five years. The Colorado River supply was in jeopardy for a number of reasons: increased demand in the MWD service area, the potential for a bad result in

Arizona v. California, and the prospect of more usage in the upper basin if the Upper

Colorado River Storage Project were implemented. The most feasible source of a large new water supply was the Feather River Project, and SDCWA became one of its strongest advocates. Regardless of where the water came from, SDCWA needed additional delivery facilities to keep up with rising demands. A second aqueduct from

MWD was most urgently needed, but SDCWA also had to rely on MWD to increase the carrying capacity of the Colorado River Aqueduct. Although Colorado River supplies were threatened on multiple fronts, even in the best case scenario that would have to be the source of imported water until the Feather River Project could come on line around 1970.

The MWD response to each of the SDCWA objectives was less than enthusiastic and, at times, antagonistic. Although SDCWA had earlier agreed with

MWD that water rights and engineering issues should be resolved before the Feather

River Project could proceed, by the second half of 1955 SDCWA wanted the project to move forward despite the uncertainties. MWD officials, led by Joe Jensen and

General Manager Robert Diemer, continued to oppose the project until their concerns were put to rest. The differences between the two agencies were spelled out in policy statements issued in August and September. The MWD statement, drafted by a directors’ committee that included Jensen and Fred Heilbron, supported the 142

acquisition of dam and reservoir sites on the Feather River, but opposed any commitment of construction funding until water rights were determined through a state constitutional amendment and further studies of proposed aqueduct routes were made. MWD also announced that it expected to be the distributing agent for any water supplies brought into Southern California under a state water plan. 324

A month after MWD issued its policy statement, the SDCWA Board of

Directors gave preliminary approval to its own statement on the Feather River

Project. That statement, proposed by the agency’s policy committee led by Fred

Heilbron, urged immediate acquisition of damsites, followed by construction of a dam and an aqueduct to bring the water to San Diego. Further, the statement urged

MWD to assume aggressive leadership in the project’s authorization and construction. While MWD officials may have been chagrined by Heilbron’s apparent duplicity in composing a policy at SDCWA significantly different from the one he helped author at MWD, they should not have been surprised. What might have surprised them is that SDCWA also advocated inclusion of its proposed second

aqueduct in the Feather River Project. Although water from Northern California

would not be available for several years, SDCWA asked for immediate construction of the second aqueduct as part of the Feather River Project so that it could be used to

transport Colorado River water until the state water plan began deliveries.325

324 “Metropolitan Water Board Approves Diversion Project,” San Diego Union, August 25, 1955. 325 “Water Directors Urge Start On Feather River,” San Diego Union, September 16, 1955. 143

SDCWA Uses the Feather River Project as Leverage to Obtain the Second Aqueduct

SDCWA’s decision to advocate the second aqueduct as part of the Feather River

Project was strategically sound. MWD, and particularly Joseph Jensen, resented that

SDCWA had dictated the conditions under which the second barrel of the first aqueduct would be built, and was not inclined to assume the same funding obligations for a new pipeline. Although the second aqueduct would not follow the same right-of- way as the earlier pipelines and therefore have no participation by the Navy or the

federal government, SDCWA wanted MWD again to pay for construction as far south

as it had with the first aqueduct. However, the two agencies had agreed in 1952 that

MWD funding of the second barrel constituted “full performance of any existing

agreement by the District to enlarge or parallel any part of the Aqueduct.”326

SDCWA’s bid to make the second aqueduct a component of the Feather River

Project raised the possibility that the state would pay for it, and just as importantly

threatened MWD regional hegemony. The idea that the state would fund the second aqueduct years before the rest of the Feather River Project could be constructed seems far-fetched. However, SDCWA and its San Diego allies were able to induce the state legislature in 1956 to appropriate $200,000 to study an aqueduct route to San

Diego. 327 In this effort, San Diego had an important ally in the state engineer’s office,

soon to be reorganized as an expanded Department of Water Resources. For State

326 “Agreement between the Metropolitan Water District of Southern California and the San Diego County Water Authority,” September 29, 1952, SDCWA archives. 327 San Diego County Water Authority, Tenth Annual Report (San Diego, 1956), 32. 144

Engineer A. D. Edmonston, San Diego’s enthusiasm for the project was a welcome contrast to MWD’s foot-dragging.

Robert Edmonston, the state’s point man for the project in Southern

California, was assigned to conduct the study of a new San Diego aqueduct. He had no illusions, however, about San Diego’s real motive, which he explained in 1966:

[W]e had six months in which to get out a report on the second San

Diego Aqueduct. That was a little power play by the San Diego

County Water Authority who had gone to Metropolitan and said, “We

need another aqueduct.” And Mr. Diemer and Mr. Jensen told them

“Go build it, because we’re not going to contribute any money to it.”

So they went to the legislature and got, I think it was, $200,000

appropriated to the Department of Water Resources to study it as a

unit of the Feather River Project. Well, this shook MWD pretty badly,

and they had the desire to share it…. And the whole report had its

effect because it brought MWD around to the San Diego County

Water Authority. And they negotiated with MWD, and MWD built the

first thirty or forty miles of the aqueduct…. Our department was being

used as a tool [by SDCWA] to get the Metropolitan Water District to

take some action. Their one basic objective was to get Metropolitan to

finance at least part of the aqueduct down there.328

328 Edmonston, “Preliminary Studies: The California Water Plan,” 87, 90, 99-101. 145

Despite “being used” by SDCWA, Edmonston harbored no ill will, and described

Fred Heilbron as “quite a delightful guy.” 329

As SDCWA no doubt intended, MWD executives saw San Diego’s initiative to get water directly from the state as a grave threat to the district’s monopoly on water planning in Southern California and perhaps to its very existence.330 By the

time the Department of Water Resources issued its final report on alternate aqueduct

routes on March 1, 1957, MWD had agreed to fund the northern forty miles of the

second aqueduct to a point six miles south of the San Diego County line. 331 The

aqueduct was designed with a capacity of 500 cubic feet per second for canal

sections, and 250 cubic feet per second (180,000 acre-feet per year) for pipeline

sections.332 After an intense public relations campaign, a $35 million bond issue for the cost of SDCWA’s portion of the aqueduct passed in July 1957 by a fourteen-to- one margin, and the second aqueduct was finally completed in November 1960.333

While Robert Edmonston quickly discerned Heilbron’s real motive in advocating the second aqueduct as part of the state water plan, some of Heilbron’s fellow directors at SDCWA were not as astute or well-informed. In November 1956, the board of directors considered a statement of policy endorsing immediate

329 Ibid., 100. 330 Oshio, “Urban Water Diplomacy,” 167. 331 “MWD Orders Work On Second Aqueduct, San Diego Union, January 23, 1957. 332 San Diego County Water Authority, Eleventh Annual Report (San Diego, 1957), 31-33; Metropolitan Water District, Nineteenth Annual Report (Los Angeles, 1957), 64-65. Canal capacity was increased to 1,000 cubic feet per second before the facility was constructed. See “Aqueduct Canal Capacity Enlarged,” San Diego Union, February 13, 1958. 333 San Diego County Water Authority, Eleventh Annual Report, 33; San Diego County Water Authority, Fifteenth Annual Report (San Diego, 1961), 33. 146

construction of the second aqueduct by MWD to the agreed point of delivery, and by

SDCWA south of that point. Some board members objected to the policy, holding out

hope that the state might in 1957 fund the aqueduct as part of the Feather River

Project. They were gently apprised that the wiser course would be to accept MWD funding of the northern part of the aqueduct rather than gamble on a state appropriation. The policy statement passed, but with three city of San Diego directors

still unconvinced that the state money would not be forthcoming.334

Controversy Over Expansion of the Colorado River Aqueduct

If San Diego’s second aqueduct were to be of any use, there would have to be water

to put in it. With water from Northern California at least several years in the future,

the Colorado River was Southern California’s only source of imported water, and the

Colorado River Aqueduct was the only means of transportation. MWD had planned

to add pumps and auxiliary facilities to bring the aqueduct to full capacity by 1960,

but that plan was threatened by a dispute over funding in late 1955. SDCWA, with its

ever-increasing demands and relatively small preferential right, was anxious to have

the expansion project competed as soon as possible. It was in this environment that

Fred Heilbron in November 1955 attacked a “wall of secrecy” at MWD that he said attempted to cover up moves by directors from Los Angeles and Beverly Hills to stymie aqueduct expansion. Heilbron alleged that the two cities were opposed to funding the project through short-term financing, and instead favored a region-wide

334 Minutes, SDCWA Board of Directors Meeting, November 8, 1956. 147

bond issue requiring a vote of the electorate. Short-term financing, repaid through the

collection of annexation fees, required a three-fourths majority vote of the directors,

and Los Angeles, with forty percent of the total board vote, had a veto power.

Heilbron believed a bond issue would waste time and might be defeated.335

The MWD Board of Directors addressed the problem in January 1956 by asking for quick passage of an amendment to the MWD Act that would allow short- term financing by a simple majority vote if the electorate approved the amendment.

The amendment passed the legislature and was approved by a popular vote of over ten to one in June 1956.336 This was the first district wide vote since the original vote

to issue bonds for the Colorado River Aqueduct in 1931.337

Although a relatively minor squabble in the history of SDCWA relations with

MWD and city of Los Angeles directors, the episode reveals an increasing

combativeness in Fred Heilbron’s actions at MWD. By 1955 he had been on the

MWD board for almost nine years and a board officer for four years, and had become

a force in his own right within MWD. This is not to say Heilbron and SDCWA

usurped Jensen and Los Angeles’ dominant role. However, given the right set of circumstances, Heilbron would include a strategically placed burst of outrage in his repertoire.

335 “MWD ‘Wall of Secrecy’ Assailed by San Diegan,” Los Angeles Times, November 19, 1955. 336 Metropolitan Water District, Eighteenth Annual Report, (Los Angeles, 1956), 145. 337 “New Aqueduct Proposition Put On June Ballot,” San Diego Evening Tribune, April 4, 1956. 148

The short-term financing episode also exemplified Heilbron’s use of the press

as a tool to get what he wanted. In an era when more water was considered a vital component of progress, popular opinion was on Heilbron’s side and he used that resource repeatedly.

SDCWA Annexations Continue Despite Water Supply Uncertainties

Despite the recommendation of the 1955 engineers’ report that SDCWA discontinue new annexations, the board of directors decided to move forward on expansion before any of its water supply issues were resolved. In December 1955, the board adopted a

policy under which annexations previously given informal approval would be

confirmed, and all other future annexation requests would be decided on their merits.

In making that decision, the board reiterated its reliance on the Laguna Declaration

and MWD’s assurance that it would satisfy regional water requirements.338 In the

same month, SDCWA agreed to annex the Rio San Diego Municipal Water District, with an addition of 17,000 acres, and in October 1956 annexed the Otay Municipal

Water District, consisting of 55,500 acres. Thirteen months after the engineers’ report was issued, SDCWA had increased its service area by about twenty percent.339

338 Water Problems Committee and Engineering and Operations Committee letter to SDCWA Board of Directors, December 15, 1955, SDCWA archives; “Water Board To Continue Annexations,” San Diego Union, December 16, 1955. 339 San Diego County Water Authority, Tenth Annual Report, 48; San Diego County Water Authority, Eleventh Annual Report, 46. 149

The Feather River Project Stalls

The SDCWA victories in obtaining MWD participation in its second aqueduct and

assuring enlargement of Colorado River Aqueduct capacity were offset by a failure to

move forward on the Feather River Project, which had become part of the California

Water Plan. Although SDCWA officials portrayed a state commitment to build an

aqueduct from Northern California as urgent, it was not so urgent as had been the

need to increase capacity of the Colorado River delivery system. The time would

come when Colorado River supplies were insufficient, but that was not in the

immediate future. This was despite the fact that demand for imported water in

Southern California was growing and the Colorado River Storage Project Act, which

would provide water projects and increased water use in the upper basin, finally was

enacted by Congress in 1956 over the objection of MWD and SDCWA.340

Fortunately, it would take many years for those projects to be built. Likewise, even if

Arizona prevailed in Arizona v. California, that state could not hope to use its full

Colorado River entitlement until the Central Arizona Project was authorized and

built. While this gave San Diego some breathing room in its quest for an additional

water supply, Fred Heilbron and SDCWA constantly trumpeted the need for the

Feather River Project.

340 “Colorado Bill Called ‘Licking’ for State,” San Diego Evening Tribune, March 9, 1956. 150

Governor Goodwin Knight, a moderate Republican, announced his support for

the Feather River Project in early 1956, and placed it on his legislative agenda.341 In

May 1957, Governor Knight oversaw publication of the new California Water Plan, which incorporated the Feather River Project into a grand scheme to provide the state

an adequate water supply for the next several decades.342 The governor’s support,

however, did not dissuade MWD from its reluctance to back the project. In fact,

MWD’s reticence only seemed to solidify as others urged the agency to join the project bandwagon.

Robert Edmonston, the state’s point man for the Feather River Project in

Southern California in the 1950s, described the MWD opposition. When Edmonston would give a presentation promoting the project, “the Metropolitan Water District of

Southern California would have representatives there, including Mr. Joseph Jensen, who, after the conclusion of your talk, would get up and attempt to torpedo you….

MWD was practically living with us and making their views rather clear.”343

MWD’s concerns about the project were well-founded, but the California

Water Plan could not be implemented without MWD’s financial backing. Harvey

Banks, the California Director of Water Resources who spent years trying to pull

MWD into the State Water Project, acknowledged in 1965 that there would likely have been no project without MWD participation. “We would not have [a program]

341 “Knight To Back Feather River Water Project,” San Diego Union, February 3, 1956. 342 “Knight and Legislators Get State Water Plan,” Los Angeles Times, May 29, 1957. 343 Edmonston, “Preliminary Studies: The California Water Plan,” 63, 167. 151

because it would have gone on beyond the payment capacity of agriculture.” At the same time, Banks conceded that if he had represented MWD, he would have taken the

same position [as MWD] for negotiating purposes.344 Banks apparently dismissed the

possibility that MWD member agencies might independently subscribe to the State

Water Project.

From 1956 through 1958, the effort to authorize a State Water Project floundered amid vituperative arguments that focused on water supply reliability, means of raising project funds, and how those funds would be apportioned among

participants. The primary stalemate was over a proposed state constitutional

amendment assuring participants of their right to receive contracted supplies, and pitted prospective Southern California contractors against county of origin advocates in Northern California. Bill Jennings, the SDCWA general counsel who served on a lawyers’ committee appointed by Governor Knight in 1957 to attempt to find a solution to the problem, described the respective positions:

…[T]hose in southern California wanted to protect southern

California in the retention of the water that would be available from

the project. They argued on the basis that southern California would

be putting in most of the money into the project, and in view of these

county of origin laws… interpreted by the Attorney General to mean

that those counties… would have the right to recapture the water if

344 Banks, “California Water Project: 1955-1961,” 129-130. 152

they ever needed it, southern California felt that it must have a

constitutional amendment…. Now, the northern area of the state

opposed that very strongly. Their position was that the only way they

could force southern California to participate in northern California

development, for its uses, was to have this right of recapture.”345

This impasse preceded the 1960s reapportionment of the state senate that determined

legislative districts based on population. As the Feather River Project was being

debated, the senate was still dominated by rural northern lawmakers capable of

defeating any measure.346 Since any constitutional amendment would benefit one side

to the detriment of the other, the result was a stalemate. This did not bode well for the

project, as the State Water Resources Board proclaimed in May 1957 that a

constitutional amendment guaranteeing water rights was “absolutely essential” to

moving forward.347 Jennings’ committee, however, saw an alternative solution.

…[W]e finally came to the conclusion that we would have to preserve the right to

recapture on the part of the north, but preserve for the south the construction of the

whole project at state expense through a state bond… instead of money paid out as it

was required for the project.348

As the lawyers committee realized, if there were adequate financial assurances

that all project components would be built, enough water should be conserved to

345 Jennings, “William H. Jennings; Water Lawyer,” 104. 346 Schwarz, A Water Odyssey, 109. 347 “Water Guarantees Essential, State Board Tells Legislature,” San Diego Union, May 4, 1957. 348 Jennings, “William H. Jennings; Water Lawyer,” 109. 153

satisfy any county of origin requirements as well as the contractors’ quotas. For this reason, MWD began to press for a bond issue which would require legislative authorization and a majority vote in a statewide election.349 Fred Heilbron and other

Southern Californians joined MWD in advocating a bond, and for a time insisted on both that measure and a constitutional amendment.350 However, unlike MWD,

SDCWA continued to insist that the Feather River Project be constructed

immediately and the details worked out later.351

In late 1958, Governor Knight’s administration wound down with no

definitive action on the Feather River Project. That did not mean, however, that the

state was inactive. An announcement from Department of Water Resources Director

Harvey Banks regarding the state’s selection of an aqueduct route to deliver project water to Southern California was expected at any time, and the apparent choice did not please Joseph Jensen. The two basic alternatives would both lift water over the

Tehachapi Mountains, but they diverged on delivery points to the south. The so-called coastal route would deliver water into the San Fernando Valley of northwest Los

Angeles, where it could be delivered to MWD agencies within a limited area. The highline route (later called the east branch) would also deliver water to the San

Fernando Valley, but would add a line heading inland and then south to a terminus at a reservoir in Perris, in Riverside County. Fred Heilbron and SDCWA urged the

349 “MWD Scores Lindsay Plan For Feather River Project,” San Diego Union, August 22, 1957. 350 Henry Love, “Banks Urges Second State Water Phase,” San Diego Union, September 1, 1957. 351 San Diego County Water Authority, “Statement to be Presented to the Joint Committee on Water Problems of the California Legislature, Meeting in San Diego on December 17, 1957,” SDCWA archives. 154

highline route as an absolute necessity, because the coastal route could not deliver

Feather River water to San Diego.352 SDCWA saw Northern California water as essential for two reasons. First, the Colorado River supply might prove inadequate to meet the needs of MWD member agencies that did not have access to Feather River water. Second, even if there was sufficient Colorado River water, its salinity was increasing. Water from Northern California, with a much lower salinity, could be blended with Colorado River water to address the issue.

Joseph Jensen saw the highland route as a waste of money (most of which would have to come from MWD) and a threat to MWD’s regional monopoly. Jensen believed the inland and San Diego member agencies could be served for many years in the future with Colorado River water only. Just as significant as the financial consideration, a State Water Project line extending into inland Southern California would give areas that had not yet joined the MWD family an alternate source of imported water. This, with the failure to secure a state constitutional amendment fixing contractors’ water rights and other concerns regarding project funding, left

Jensen dissatisfied with the project.

At an MWD Board of Directors meeting in December 1958, Jensen proposed

a “go-it-alone” program whereby MWD would obtain water from the Eel River in the

far northwestern corner of California. Under Jensen’s concept, his Eel River project

would be constructed apart from the Feather River Project and without state control.

Jensen said he did not believe the state would pass a constitutional amendment on

352 Henry Love, “FRP Route For Water Wins Favor,” San Diego Union, November 14, 1958. 155

water rights, and suggested that engineering studies be started by the district on the

Eel River at a cost of $500,000 to $1 million per year. Jensen did not ask for an

outright exit from the Feather River Project, but other speakers stated the state project

would fail if delayed two or three years by a MWD study of the Eel River. Fred

Heilbron predictably objected to Jensen’s proposal, stating MWD could not go it

alone on a $2 billion project, and that the incoming governor, Pat Brown, and the

newly elected legislature should be given a chance. Significantly, Warren Butler of

Compton, the third MWD board officer as Vice-Chairman and a close ally of Jensen,

broke with the chairman on this issue. Butler suggested a compromise under which

the state would construct facilities down to the California delta, and contractors below

that point would combine to provide transportation south of the delta. Even Jensen’s

fellow representatives from the Los Angeles Department of Water and Power

opposed his idea. At meeting’s end, the matter was referred to the board’s Water

Policy Committee.353

The Jensen proposal had apparently circulated among the MWD leadership

for some time, and only went public when the chairman raised it at an open meeting.

In addition to the broad opposition from other members of the MWD board, the Los

Angeles Times editorialized that MWD should continue working with the state.354

In response to Jensen’s Eel River scheme, an anti-Jensen caucus of board members from outside Los Angeles carried a motion to dilute the chairman’s power

353 Ed Ainsworth, “Strife Over Water Policy Results in a 3-Way Split,” Los Angeles Times, December 18, 1958. 354 “The Water Issue Is Out in the Open,” Los Angeles Times, December 20, 1958. 156

to control the board’s executive committee, which collectively could challenge Jensen

on important issues.355 This did not mean, however, that there was a majority vote

within the MWD board for the Feather River Project or the California Water Plan.

Governor Brown Pushes the State Water Project

Governor Edmund G. “Pat” Brown took office in January 1959 resolved to use all his

resources to end the legislative deadlock and authorize the Feather River Project.356

On January 22, Brown presented to the state legislature a program that attempted to balance the needs of the northern and southern areas of the state. Essentially, Brown maintained that a constitutional amendment was both undoable and unnecessary, and proposed a $658 million plan with cost assurances and a group of projects meant to guarantee sufficient water to the counties of origin and the project contractors. To

finance the project, Brown asked for a $500 million bond issue and access to $158 million in other state funding.357 Initial reactions to the broadly defined plan were

positive from both MWD and SDCWA. Fred Heilbron emphasized that the detailed plan, which would be published the next month, must provide for a highline canal.358

The MWD Board of Directors unanimously offered support for Brown’s plan, but

suggested the bond should be for $1.5 to 2 billion dollars, and continued to insist that

a constitutional amendment was needed to guarantee water deliveries to contractors.

355 Ed Ainsworth, “Coup Foiled on Feather River Plan,” Los Angeles Times, January 14, 1959. 356 Schwarz, A Water Odyssey, 109. 357 Henry Love, “San Diego Joining In Study Of Governor’s Water Plan,” San Diego Union, January 24, 1959. 358 Ibid. 157

Without sanction from his board, Joseph Jensen offered a thirteen point proposal of his own. In addition to the board’s suggestions, Jensen proposed that MWD claim

rights to four million acre-feet of water from the Eel and adjacent rivers.359 While the

MWD response was portrayed as positive, it nonetheless indicated disagreement with

Governor Brown on basic provisions of his plan.

The state released water plan details on February 26, 1959. As expected, the

plan included the highline route for water deliveries into Southern California, much to

the delight of Fred Heilbron. 360 In May, in response to demands from Southern

California, Brown had the water plan bill adjusted to raise the bond that would be

presented to voters in November 1960 to $1.75 billion, with receipts from water

contractors to be used to pay for it. The governor also added a contractual guarantee ensuring water delivery, but still would not agree to a constitutional amendment.361

The water plan, styled the Burns-Porter Act after its chief legislative sponsors,

went to a vote in the state assembly and senate near the close of their session in June.

Despite concerns regarding the lack of a constitutional amendment, SDCWA

announced its support of the legislation in May, followed by similar actions by the

San Diego City Council and San Diego County Board of Supervisors in early June.362

MWD, however, had the opposite view. In early June, MWD pronounced the bill

359 Ed Ainsworth, “Southland Water Agencies Offer Brown Co-operation,” Los Angeles Times, January 28, 1959. 360 Henry Love, “Water From North Indicated By 1977,” San Diego Union, February 27, 1959. 361 Robert Blanchard, “Compromise Plan on Water Offered,” Los Angeles Times, May 6, 1959. 362 Henry Love, “CWA Supports Brown On Water,” San Diego Union, June 19, 1959; “City, County Voice Water Bill Support,” San Diego Union, June 5, 1959. 158

“completely unacceptable to Southern California as it now stands,” and offered

twenty amendments reflecting positions the agency had previously taken.363

Despite MWD’s opposition and objections from Northern Californians who

believed their water supply was not sufficiently protected, the Burns-Porter Act easily

passed both houses of the legislature and was signed by Governor Brown.364

However, with almost a year and a half until the November 1960 popular vote on the

statute’s bond provision, the battle was far from over.

One of the governor’s guidelines for project construction was that building

could not begin until the state secured contracts for at least 75 percent of the water

that would be developed. This would ensure the financial stability of the venture.

Thus, the passage of the bond, styled Proposition 1, and securing signed contracts

became linked. Further, Brown believed the first contract had to be with MWD,

whose boundaries contained the largest voting block in the state.365 This set up a

confrontation between the state and MWD, and more specifically between Governor

Brown and Chairman Jensen, that would determine the future of the State Water

Project.

Dissension Appears Among Los Angeles Officials

Through 1959, MWD continued its attacks on the governor’s water plan and asked for a special legislative session in early 1960 to consider amendments to the Burns-

363 “District Board Sees Water Bill As Unfair,” Los Angeles Times, June 9, 1959. 364 Schwarz, A Water Odyssey, 112. 365 Ibid., 112-113. 159

Porter Act. That position was assailed by Los Angeles Mayor Norris Poulsen, who

was converted to Brown’s water plan when the governor included Poulsen’s

suggestion for contract guarantees. In a November 1959 letter to the MWD Board of

Directors, Poulsen accused the agency of obstructing a program vital to the future of

Southern California. Poulsen lambasted MWD for “sowing the seeds of fear, doubt,

and suspicion” and for its unrealistic demands for a special legislative session and its

own Northern California water rights. 366 Fred Heilbron immediately lauded Mayor

Poulsen’s criticism, saying it expressed the views of SDCWA. Heilbron added that

Poulsen should have directed his criticism primarily to the city of Los Angeles members on the MWD Board, who spearheaded the MWD demands.367 Heilbron’s

observation highlighted the seemingly incongruous fact that the Los Angeles mayor

and the city’s delegates to MWD had opposing views on the governor’s water plan.

The situation was possible because, once appointed, the Los Angeles directors at

MWD were virtually autonomous. Over the next few years, the Los Angeles position on important issues would become further muddled by this situation, compounded by the fact that two other virtually independent entities, the Los Angeles Department of

Water and Power and the Los Angeles City Council, would also weigh in with their own policies.

Governor Brown naturally welcomed Poulsen’s attack on MWD, wiring the

mayor that he hoped “the MWD officials will recognize the truth and urgency of your

366 “Mayor Rips MWD Board for Opposing State Water Plan,” Los Angeles Times, November 5, 1959. 367 “Heilbron Lauds Poulsen Action,” San Diego Union, November 6, 1959. 160

message.”368 The MWD response to Poulsen’s letter was conciliatory but firm,

maintaining MWD was following the course that best fulfilled its responsibility to

provide a secure water supply for its constituency.369

Meanwhile, the Los Angeles Department of Water and Power had ideas of its

own. In late December 1959, Fred Heilbron complained that the department wanted to amend the MWD Act so that Los Angeles would escape most of the share it would

otherwise pay if MWD contracted for water from the State Water Project. Under the department’s proposal, MWD member agencies would pay for project water roughly

in proportion to the amount of water each took from the project. At the same time, the

act would be changed so that Colorado River water would be allocated based on the

proportional amount that a member had paid into the cost of the Colorado River

Aqueduct. Because Los Angeles paid the majority of MWD capital expenses in the district’s early years, the bulk of MWD’s Colorado River water could be taken by the

city at little additional cost. The river water, along with deliveries from the Los

Angeles Aqueduct, would in the department’s estimation reduce the city’s need for

State Project Water to a relative trickle until 1990. Under the department’s plan, the

Los Angeles estimated share of MWD’s contribution to the State Water Project would drop from about $207 million to $48 million, while SDCWA’s share would rise from

368 Walter Ames, “Brown Praises Poulsen Attack on MWD Position,” Los Angeles Times, November 6, 1959. 369 “MWD Sends Reply To Poulsen Blast,” Los Angeles Times, November 11, 1959. 161

$90 million to $271 million.370 This was not an idea that appealed to SDCWA and

Heilbron.

The Department of Water and Power proposal to restructure the MWD

revenue system also did not sit well with the MWD Board of Directors. In April

1960, the Board rejected the department plan, holding that it would result in the

“disintegration” of MWD. The vote on rejection was unanimous and included the

directors from Los Angeles. According to Fred Heilbron, Joseph Jensen had earlier

proposed tentative approval of the department’s plan, but later voted with the rest of the board.371

The State Water Project Controversy Propels a Fundamental Change in the MWD Revenue Structure

The Los Angeles Department of Water and Power reluctance to pay a far greater

proportion of the cost of the State Water Project than its actual water use was only the

latest demonstration of its long-term dissatisfaction with the MWD revenue structure.

The basic issue was whether taxes should continue to provide the bulk of revenue, or

whether revenue from the sale of water should take on an increasing share. In 1959,

although its share had lessened over the years with new annexations and suburban

growth, the city of Los Angeles still had about 34 percent of the assessed value within

MWD, the criteria upon which taxes were based. SDCWA, on the other hand, had

only about ten percent of valuation. In fiscal year 1958-59, MWD took in about

370 Henry Love, “CWA Questions L.A. Water Stand,” San Diego Union, December 30, 1959. 371 “L.A. Bid to Alter Water Act Denied,” San Diego Union, April 13, 1960. 162

$11.13 million in water sales, although $2.84 million of that amount represented a ten

dollar surcharge on sales of water that had been treated before delivery. The water

rate paid all district operating costs and funds for capital replacement, and provided

about $2.4 million for other purposes, mainly payments for construction costs. The

price of untreated water had increased from eight to fifteen dollars per acre-foot

between 1950 and 1959, relieving the need for taxes to help pay the cost of operation

and maintenance. MWD tax collections totaled $27.55 million, going almost entirely

to capital costs, including the costs to pay interest and principal on bonds.372

Although Los Angeles had paid far more into the MWD treasury than

SDCWA, through June 1959 SDCWA had received a total of 1.05 million acre-feet of water compared to 314,000 for Los Angeles.373 For that reason, Los Angeles

officials claimed they were subsidizing the cost of San Diego’s water. As late as

1970, Joseph Jensen remarked that San Diego had paid only one-twelfth of MWD taxes over the years, but had received twenty five percent of the water.374 The most

often suggested solution to this perceived imbalance was to shift revenues from taxes

to the water rate, and this in fact had been happening slowly over a number of years.

While the untreated water rate had climbed to $15 per acre-foot, taxes had decreased

from 50 cents per $100 in assessed value in 1945-46 to 18 cents in 1958-59.375

372 Metropolitan Water District, Twenty-First Annual Report, (Los Angeles, 1959), xiv-xv, 42, 144, 150-151. 373 Ibid., 38-39. 374 Jensen, “Developing California’s Natural Resources,” 123. 375 Metropolitan Water District, Twenty-First Annual Report, 144. 163

However, because district assessed value had risen dramatically over those years, the

yearly tax revenues had still increased.

Opposing arguments for tilting revenues toward taxes or the water rate were stated succinctly by two MWD general managers. Robert Diemer viewed the issue much like Joseph Jensen. For him, it was inequitable for San Diego to pay ten percent

of the taxes and receive twenty percent of the water.376 However, his predecessor as

general manager, Julian Hinds, had a different perspective. He believed member

agency contributions should consider not only the amount of water used in the

present, but the right to use water in the future. Hinds stated, “Los Angeles should

pay at least the part of the cost of the works that are being built for her future….

[Otherwise, U]ntil Los Angeles begins using water, they would be getting a free

ride…. That’s the way Los Angeles wants to work it, and it’s selfish.”377 Hinds’

thinking coincided with the preferential rights provision of the MWD Act, under which a member agency had the right to water in times of shortage in the proportion

that it had contributed to capital costs and operating expense, but excepting such contributions from the purchase of water.

It was not so much the merits of the “taxes versus water rate” argument that drove the controversy over the MWD revenue structure in 1960 as it was the looming

vote on Proposition 1 and whether MWD would participate in the State Water

Project. Northern Californians in the main were likely to vote against sending “their”

376 Diemer, “Thirty Years with the Metropolitan Water District,” 113. 377 Julian Hinds, “Western Dam Engineer,” 64, 130. 164

water to the south, so a united Southern California was required to pass the measure.

Without Los Angeles, it was highly doubtful that MWD would participate in the State

Water Project, or that there would even be a State Water Project.

While Fred Heilbron had to be pleased that the MWD Board of Directors opposed the Department of Water and Power restructuring of MWD revenues, he wanted additional allies. At the same time Heilbron went to the press exposing the department’s plan, SDCWA wired a message to Los Angeles Mayor Poulsen that the

plan would “insure defeat of the state water bond issue and destroy Southern

California.” Since Poulsen had just accepted the Southern California chairmanship of

the campaign to pass Proposition 1, SDCWA must have felt this missive was the best

way to get his attention.378 According to Heilbron, who conferred with Poulsen after the message was delivered, the mayor took “heated exception” to the contention that

the department’s proposal would kill the water bond. 379 Poulsen too believed that Los

Angeles was contributing a disproportionate amount to MWD, and questioned whether a discussion of MWD finances should doom the State Water Project. Poulsen

and Heilbron did agree that the parties should discuss the issue.

SDCWA was not the only MWD member agency that would suffer from the

Department of Water and Power plan. Newer member agencies with low valuation

but projected high water use would also pay a much larger fee. This was particularly true of the Western Municipal Water District and Eastern Municipal Water District in

378 Henry Love, “CWA Questions L.A. Water Stand,” San Diego Union, December 30, 1959. 379 Henry Love, “L.A. Conference Planned On Water,” San Diego Union, December 31, 1959. 165

Riverside County. Together, the three agencies commissioned a study that maintained

the department plan would wreck MWD and it was unnecessary to shift revenues

away from Los Angeles. The study observed that MWD water rates were scheduled

to increase over the next few years, and as more water was sold at higher prices, the

tax rate would decline. On a more altruistic level, the study argued that the economic

vitality of the entire Southern California region was vital to Los Angeles’ own

progress, and abundant water supplies at an affordable rate benefited everyone.380

As the study related, in March 1960 the MWD Board enacted a stepped increase in water rates, going from $15 per acre-foot for untreated water to $21 per acre-foot effective January 1, 1963.381 This, however, did not satisfy the Department of Water and Power, and the dispute over revenue structure went on into the summer.

Because the MWD Board would not support a change in its statute, the department was not likely to prevail on an amendment in the legislature. The real danger was that

Los Angeles might oppose Proposition 1.

The dispute was given extensive coverage in the Los Angeles Times in June, where it was characterized as a contest between the Department of Water and Power and the MWD Board of Directors, not SDCWA. In the Times articles, Mayor Poulsen

backed the department’s position, but asked the parties to reach an amicable

380 Albert A. Webb Associates, “Analysis of the Proposal of Los Angeles Department of Water and Power Relative to the Importation of Feather River Water,” (Riverside, California, 1960), SDCWA archives. 381 Metropolitan Water District, Twenty-Third Annual Report (Metropolitan Water District, 1961), 49. 166

compromise so that they all could support Proposition 1.382 As late as September,

MWD had not reached agreement with the state on a water delivery contract, and the

Department of Water and Power continued to threaten to oppose Proposition 1 if the

MWD revenue system were not restructured.

Finally, on September 27 the hoped-for compromise was reached, and it was a

very simple one. Effective January 1, 1964, revenues from water sales would pay for

all MWD operation and maintenance costs and one-half of capital costs. Taxes would

pay the other half of capital costs. This was a further shift of the financial burden

from the taxpayers to the water users, but the measure passed the MWD Board with

no dissenting votes.383 Mayor Poulsen immediately praised the compromise and in

early October the Department Board of Commissioners announced its support of

Propostion 1, chiding MWD for stalling contract negotiations with the state and confusing the public.384 Unlike the Department of Water and Power original proposal

that the MWD revenue system undergo fundamental change, the board’s action was

only a shift within the existing structure and did not require an amendment to the

MWD Act. Because the district needed to promote water sales in its early years, it

had cut water rates far below the cumulative cost of delivery to promote usage,

placing the burden of repaying capital costs on taxes. Those days were rapidly ending

in 1960.

382 Ray Hebert, “Debate on Water Centers in L.A.,” Los Angeles Times, June 21, 1960. 383 “Users to Pay More of Water Project Costs,” Los Angeles Times, September 28, 1961. 384 “Poulsen Praises New MWD Pricing Policy,” Los Angeles Times, September 29, 1960; “City Board Backs Water Bond Issue,” Los Angeles Times, October 8, 1960. 167

SDCWA went along with the MWD cost shift to clear the way for passage of

Proposition 1. The SDCWA Board of Directors had asked that in the event water

sales were used to pay capital costs, the MWD Act should be amended to include

water sales applied to capital costs in the computation of member agency preferential

rights. 385 Unfortunately for SDCWA, the compromise had to be made before the

November vote, and there was no time to secure an amendment to the Act. The preferential rights issue, therefore, was left hanging.

MWD and the State Wrangle Over Contract Terms

MWD began negotiations with the state Department of Water Resources for a water delivery contract in January 1960. The district insisted that terms be agreed upon and the contract signed before MWD would endorse Proposition 1, but with ten months before the vote was to occur, it seemed there was time to work things out. However, by October, even though the Los Angeles Department of Water and Power now favored the project, MWD and the state were still at loggerheads and the prospects of agreement appeared bleak. Although MWD had dropped its insistence on a constitutional amendment guaranteeing its contracted water rights, the parties were

still at odds on fundamental provisions. The core issue in 1960 was money, and many

millions of dollars were at stake. First, MWD wanted each water contractor to pay its

fair share of project costs, and that included the agricultural interests in California’s

Central Valley. For MWD, a “fair share” meant an equal share based on the amount

385 Minutes, SDCWA Board of Directors Meeting, February 4, 1960. 168

of each contractor’s water entitlement. However, farming interests could only

generate income if water was available and they would be cash-poor in the early years

of their contracts. Second, MWD wanted cost sharing to be based on the amount of aqueduct capacity each contractor used. The state instead insisted that cost sharing among contractors be based on the total amount of water used each year. The state’s

position benefited agriculture, which used water irregularly and needed capacity

sufficient for its peak uses. MWD, however, would have ample storage facilities in its

service area to permit a constant flow with no peaking.386

In San Diego, water officials were less concerned about contract specifics than

they were about the passage of Proposition 1. San Diego County was the first in the state to open a formal campaign for the water bond. The campaign organization was a broad-based consortium of government and business leaders, with Fred Heilbron serving as an honorary co-chairman. The committee’s campaign slogan was clear and

succinct: “Don’t let San Diego County dry up!”387

Aside from the muddled situation at MWD and in Los Angeles, most of

Southern California jumped on the Proposition 1 bandwagon. As an added incentive for the south to procure Northern California water, the state experienced a significant setback in Arizona v. California, the U. S. Supreme Court Colorado River water rights case. In May, Simon Rifkind, the Special Master assigned by the Supreme

Court to take evidence and submit recommended findings, published a preliminary

386 Schwarz, A Water Odyssey, 114-115. 387 “County Opens 1st Water Drive Unit,” San Diego Tribune, July 29, 1960. 169

decree adverse to California. Rifkind agreed with Arizona that its 2.8 million acre-

foot allotment could only be counted against what it took from the river’s mainstream

and not its tributaries. 388 The effect of this finding was that California would eventually be limited in many years to its basic allotment of 4.4 million acre-feet, with no available surplus. The brunt of that ruling would fall on MWD, whose fourth

priority water right of 550,000 acre-feet was within the basic allotment, but whose

fifth priority right of 662,000 acre-feet had to come from surplus. Rifkind’s findings

were subject to review and a final judgment by the Court, but the threat to Southern

California’s water supply was evident.

Governor Brown immediately took notice of the Special Master’s action, wiring Joseph Jensen that the decision made it imperative for construction to begin very soon on the Feather River Project.389 At the same time, regional organizations

endorsed Proposition 1. The Southern California Water Coordinating Conference, an

alliance of regional water agencies, backed the measure unanimously with the

exception of the two MWD representatives, Joseph Jensen and MWD Board Vice-

Chairman Warren Butler. Jensen voted against the endorsement and Butler abstained,

fighting off allegations that MWD was trying to blackmail the state into firm water

commitments. Bill Jennings, a SDCWA representative, argued that the current state offer was the best deal they could get.390 Also in May, the state chamber of commerce

388 San Diego County Water Authority, Fourteenth Annual Report (San Diego County Water Authority, 1960), 38-40. 389 Arthur Ribbel, “MWD OKs Talks On Backing Bonds,” San Diego Union, May 14, 1960. 390 “Southland Water Unit Backs Bonds; MWD Chief Dissents,” San Diego Union, May 17 1960. 170

backed the water bond, citing the Rifkind findings as a major consideration, as did a unanimous Los Angeles County Board of Supervisors.391

None of this budged the MWD Board of Directors, whose majority continued

to follow Joseph Jensen in his opposition to the state’s contract terms. In fact, as the

November election drew near and contract details emerged, new issues arose. The

parties did agree that MWD’s share of the State Water Project would be 1.5 million acre-feet at build out, the contract would be binding for at least 75 years, and MWD would have an option to contract for more water if other entities did not take the project’s entire water allotment.392 However, the parties diverged over the contract’s effective date, the construction schedule, and the state’s desire to assess a higher water rate for property owners with more than 160 acres. The state insisted that the contract be subject to review and revision by the 1961 legislature, while MWD countered that it could not sign a contract whose terms might change. Also, MWD wanted the ability to dictate the construction schedule for project facilities in

Southern California, stating that the east branch would not be needed until around

1985. The state countered that it could not cede the construction schedule to one agency, especially because other agencies would be using the facilities.393 Regarding

the large property owner surcharge, MWD argued that such a requirement would be impractical to enforce.

391 “State C Of C Backs Water Bond Issue,” San Diego Union, May 21, 1960; Ray Hebert, “Supervisors Endorse Senate Change, State Water Bonds,” Los Angeles Times, May 18, 1960. 392 “Feather River Pact Terms Affecting Southland Given,” Los Angeles Times, August 25, 1960. 393 Ray Hebert, “Brown Plans More Talks With MWD On Water Pact,” Los Angeles Times, September 29, 1960. 171

Entering October, progress had been made on the allocation of project costs

among the contractors. Robert Skinner, at the time MWD Assistant General Manager

and its chief contract negotiator, brokered a compromise under which costs among

contractors would be determined by combining their share of aqueduct capacity and

their share of total water entitlement, and taking average of the two.394 The parties

also compromised on how agricultural interests would pay their share of project costs,

allowing them a lower rate initially and then paying more in later years.395 The

impasse over the contract’s effective date, the 160 acre surcharge, and control over east branch construction, however, brought relations between the state and MWD to a

boiling point.

While support for Proposition 1 had grown in Southern California and in the

MWD board room, Chairman Jensen steadfastly opposed the state’s contract terms and had been able to hold a majority of directors’ votes. As the prospect of rejection

of the state contract and Proposition 1 grew nearer, Jensen came under increasing

attacks as the sole reason for lack of an agreement. San Diego state Senator Hugo

Fisher suggested the legislature might somehow force MWD to participate in the

State Water Project, and blamed Jensen for MWD’s recalcitrance. Fisher stated that

Jensen regarded MWD as “his own personal fiefdom” and his “unyielding, unsympathetic stance” could be responsible for the defeat of the water bond.396

394 Schwarz, A Water Odyssey, 116. 395 Ibid., 114. 396 Ralph Bennett, “Fisher Warns MWD In Water Bond Fight,” San Diego Tribune, October 1, 1960. 172

On October 3, the MWD Water Problems Committee, composed of a group of

directors, recommended to the full board a compromise on the contract’s effective

date that would give MWD the opportunity to nullify the contract if the 1961

legislature changed any of its terms. The committee also recommended that MWD

finally take a firm position on Proposition 1.397 The next day, the board of directors rejected any further compromise with the state and wired the governor that if he did not meet MWD’s terms by October 11, the district would not support the water bond issue. 398

Governor Brown replied to the MWD ultimatum with a strongly worded letter

of his own. First, Brown asserted the MWD communication was intemperate and either mistaken or misleading in fact. Brown went on, “More important, the Board

appears to have set itself above the executive and legislative branches of state

government which created the Metropolitan Water District…. Not a single member of

your Board is elected by the people, yet you collectively assert the right to pass on

statewide policy….” The governor then chastised the board as “unwilling even to

explore with us the promising areas of compromise suggested by your own water

committee and technicians.” Regarding the consequences, the letter stated “you are

risking a long and crippling delay in bringing urgently needed new supplies of water

into Southern California….” Finally, Brown indicated he was willing to continue

397 Ray Hebert, “MWD Deadline Asked on Water :Pact Talks,” Los Angeles Times, October 4, 1960. 398 Ray Hebert, “MWD Flatly Rejects All Compromise Over Water, Los Angeles Times, October 5, 1960; “MWD Quashes Compromises With Brown,” San Diego Union, October 5, 1960. 173

contract negotiations and that the lack of a contract should not be an obstacle to a

MWD endorsement of Proposition 1.399

The governor’s letter provided the backdrop for the MWD Board of Directors

meeting on October 11. At the meeting, directors offered competing motions, one of which would not endorse Proposition 1 because a contract had not been completed, and another that would endorse Proposition 1 because the contract had almost been completed. Fred Heilbron and the other San Diego directors supported endorsement, but in the end a motion was passed merely to continue negotiations. MWD had therefore backed down on its ultimatum of a week before. 400 Heilbron, who

desperately wanted MWD to endorse Proposition 1, was nothing if not astute and

must have sensed that Joseph Jensen’s support on the board was faltering.

Nevertheless, Heilbron’s public pronouncements on the controversy were reserved.

After the October 11 board meeting, Heilbron stated the prospects for a MWD

approval of the water bond issue was “discouraging,” and he and other directors had warned that failure to compromise with the state might cause MWD to lose concessions they had previously gained.401 More than anything else, Heilbron

portrayed himself as the voice of reason. In an October 9 Los Angeles Times article that characterized the contract dispute as a contest between Governor Brown and

399 Edmund G. Brown, Sr., “The California Water Project: Personal Interest and Involvement in the Legislation, Public Support, and Construction, 1950-1966,” (Berkeley: University of California Governmental History Documentation Project, Goodwin Knight/Edmund Brown, Sr., Era, 1981), 38a-38c. 400 George Dissinger, “Water Bonds Get Support,” San Diego Tribune, October 14, 1960. 401 “District Chiefs Refuse to Back Water Project,” San Diego Tribune, October 12, 1960. 174

Chairman Jensen, Heilbron pleaded, “Don’t let the board go on record as opposing the only water development in California. For goodness sake, let’s come out and say

‘Vote for the bonds.’ Then we can settle the technical differences later.”402

Jensen Is Overwhelmed

At its October 18 meeting, Jensen encouraged the MWD Board not to “pussyfoot”

and to take a firm stand on the water bond. But with a positive report from MWD

negotiators and a plea from Heilbron to keep the talks going, the board refused to end

contract talks or set a deadline.403 Encountering growing opposition on the MWD

Board, Jensen decided to act on his own. On October 22, without the sanction of what

had become a sharply divided board of directors, Jensen had the MWD staff send out

a press release in which he listed nine points questioning the viability of financing for

the State Water Project. Governor Brown called Jensen’s foray a “striking

demonstration of bad faith” that was inaccurate and contradicted previous items of

agreement between the state and the board of directors.404

On October 24, the MWD Water Problems Committee recommended acceptance of the state’s latest contract offer based on compromises reached on the three remaining items of contention. Under the compromise, the 1961 legislature would have an opportunity to modify the contract but MWD would then be able to

402 Ray Hebert, “Water Row at Boiling Point --- Getting Hotter,” Los Angeles Times, October 9, 1960. 403 Ray Hebert, “MWD Rejects Deadline for Action on Water Bonds,” Los Angeles Times, October 19, 1960. 404 Ray Hebert, “MWD Chairman Attacks Water Plan’s Financing,” Los Angeles Times, October 23, 1960. 175

back out, MWD would not be required to enforce any water surcharge for property

owners with over 160 acres, and the state would ultimately determine when the east branch would be built. As the committee endorsed the contract, Los Angeles Mayor

Poulsen accused Chairman Jensen of trying to undermine negotiations so that MWD could “go it alone”, develop the Eel River, and build its own aqueduct to Southern

California.405

At the MWD meeting on October 25, the board of directors again refused to

accept the state’s contract offer against the recommendation of both the Water

Problems Committee and its negotiators, Robert Skinner and General Counsel

Charles Cooper.406 Years later, Skinner explained, “There was no possibility of

getting a better contract and without our endorsement there was the possibility the

bond issue would not pass. That would have obliterated the project.”407 Although the

board again backed Jensen, the circumstances were embarrassing. 25 of 39 directors voted in favor of the contract, but because each director’s vote was weighted

according to assessed value and the Los Angeles delegation was required to vote as a

block, the actual vote was 728 to 620 against contract approval. In fact, only ten

directors voted against approval (the other four were absent), but they carried Los

Angeles’ 428 votes and the votes of other agencies in the Los Angeles area. Fred

Heilbron, who had emerged as the spokesman for the minority position, again warned

405 Ray Hebert, “MWD Committee Asks OK of Latest State Water Offer,” Los Angeles Times, October 25, 1960. 406 Ray Hebert, “MWD Board Refuses to Approve Water Bond Issue,” Los Angeles Times, October 26, 1960. 407 Schwarz, A Water Odyssey, 116. 176

that MWD was affecting the future of the entire state and should endorse the water bond. Governor Brown commented that “Jensen and his small group of obstructionists” had used an archaic voting method to thwart the will of the

majority. 408

With another MWD Board meeting scheduled for November 1, there was one

more chance to approve a contract and endorse the water bond before the election.

The Feather River Project Association, a statewide group endorsing the water bond,

noted that those directors voting in favor of contract approval on October 25

represented 16 of MWD’s 23 member agencies and 82 percent of Southern

California’s expected water demand from the State Water Project. The association

further suggested the state make separate contracts with those member agencies,

which included SDCWA. 409 A Los Angeles Times editorial reiterated the paper’s endorsement of Proposition 1, stating that a minority of MWD directors was undermining a vital state project “for reasons that are not clear to anyone but themselves.”410 Then, in telegrams to each of the board’s directors, Governor Brown

announced on October 30 a moratorium on further negotiations until after the

election. The governor’s conciliatory tone and communication with each director

may, however, have been more of a request to reconsider than a suspension of

contract talks. 411

408 Hebert, “MWD Board Refuses to Approve Water Bond Issue.” 409 Ray Hebert, “Group Asks Separate Water Pacts,” Los Angeles Times, October 27, 1960. 410 “Proposition 1 Is Still There!,” Los Angeles Times, October 27, 1960. 411 “Brown Calls Off Water Discussion,” Los Angeles Times, October 31, 1960. 177

Whatever the governor’s intention, the MWD Water Problems Committee again recommended contract approval at the board meeting on November 1.

Chairman Jensen, however, stated that the governor’s moratorium eliminated the possibility of contract approval and the board’s endorsement of Proposition 1.412 The

board thought otherwise.

At the board meeting, Jensen’s eroding support crumbled completely. Two of

his allies in the Los Angeles delegation were absent and another changed his vote,

changing all the Los Angeles assessed value votes from “no” to “yes.” At that point,

nearly everyone jumped on the pro-contract bandwagon and the contract was

approved in a landslide.413 The directors also endorsed Proposition 1 on the condition

that the state sign the contract before the election.414 Joseph Jensen opposed the contract and water bond endorsement to the end, describing the board’s decision as

“tragic.”415 He later cited the state’s control over east branch construction as the

primary reason for his opposition, and maintained that if the State Water Project

failed, MWD was strong enough to take water from the Eel River by itself. 416 For his

part, Fred Heilbron publicly showed only relief, saying, “It was a matter of the

directors realizing that the state’s water problems are bigger than the MWD.”417

412 Ray Hebert, “MWD Group Will Again Ask Board to Accept Water Pact,” Los Angeles Times, November 1, 1960. 413 Schwarz, A Water Odyssey, 116-117. 414 “The MWD Comes Through,” Los Angeles Times, November 2, 1960. 415 Ray Hebert, MWD to Sign Water Pact for Feather River Friday, Los Angeles Times, November 3, 1960. 416 Jensen, “Developing California’s Natural Resources,” 158. 417 Richard Eby, “Brown Prepares To Ink Water Pact,” San Diego Tribune, November 2, 1960. 178

While Governor Brown signed the contract for the state on November 4,

Jensen declined to participate and the contract was signed by the MWD

negotiators.418 Just a day before the election, Jensen appeared before the Los Angeles

City Council to argue against its endorsement of Proposition 1. The council’s

endorsement failed on a seven to seven vote, even though the Mayor and the

Department of Water and Power had long since announced their support of the water

bond. 419

On election day, which featured the presidential contest between John

Kennedy and Richard Nixon, Proposition 1 narrowly passed with a statewide majority

of 173,949 out of a total vote of a little less than six million.420 In San Diego County,

a spirited campaign in favor of the water bond yielded important results. County voters approved the measure by a more than four to one ratio, providing a majority of about 209,000. But for San Diego County, Proposition 1 would have failed. 421

Shortly after the election, news articles reported that unnamed MWD directors

were campaigning to oust Joseph Jensen as board chairman, and that Fred Heilbron was identified as a leader in the effort. When questioned, Heilbron said, “It’s news to

me.”422 Nothing came of the reports, and Jensen continued to be elected chairman

biennially until his death in 1974.

418 Ray Hebert, “Brown and MWD Make Water Pact Official,” Los Angeles Times, November 5, 1960. 419 Gene Hunter, “Council Fails to Endorse Water Plan,” Los Angeles Times, November 8, 1960. 420 Oshio, “Urban Water Diplomacy,” 199. 421 “State Okays Water Bonds By 140,000,” San Diego Tribune, November 10, 1960. 422 “Some MWD Aides Seek Chief’s Ouster,” San Diego Union, November 25, 1960. 179

The State Water Project was a close call, due in no small part to Joseph

Jensen’s intransigence. For months, Jensen opposed Proposition 1 even though Mayor

Poulsen led the Southern California campaign for its passage, the Los Angeles

Department of Water and Power supported it, and ultimately a large majority of

MWD member agencies backed both the water bond and the contract with the state. If

Proposition 1 had not passed, no less an authority than Governor Brown asserted that

“we would never have had a California Water Project.” In retrospect, Brown agreed with Jensen that the east branch canal was the main sticking point with MWD because, in Brown’s opinion, “they wanted to control the project, they wanted to sell

all the water.” That mindset was true, at least, of Joseph Jensen, who had used the

Laguna Declaration in 1952 as a manifesto for MWD control of the Southern

California imported water supply. In opposing what he saw as state interference with

MWD hegemony, Jensen was only being consistent, although Governor Brown just

saw him as “a stubborn old man.”423 Fortunately, other MWD officials and several

member agencies were not wedded to Jensen’s ideology. In fact, SDCWA and other member agencies had learned that MWD water supply and revenue policies could

work against their interests. In some respects, that faction saw the state as an ally

against Los Angeles and other member agencies which controlled a majority vote at the district. But in the final analysis, MWD rejected Jensen and backed the State

Water Project because its directors devoutly believed more water meant more progress, and that was where the water would come from.

423 Brown, “The California Water Project,” 34, 37-38. 180

MWD Lobbies the Legislature Not to Modify the Water Contract; the Los Angeles Department of Water and Power Renews the Effort to Revise the MWD Revenue Structure

With the passage of Proposition 1 and execution of the contract with the state for

project water, a casual observer might have thought 1961 would be a year of relative

calm at MWD. That was not to be the case. Although MWD had refused to endorse

the water bond and contract terms until the last minute, the district leadership,

including Joseph Jensen, now wanted to ensure the contract would survive the threat

of tampering from the state legislature. One of the final contract compromises had

recognized the state’s insistence that the legislature would have the opportunity to

review and modify the contract, but at MWD’s insistence, the district could choose to

nullify the contract if it were modified in any respect.

As the January legislative session was set to begin, MWD warned that any

changes to the contract could prove fatal to its participation in the State Water

Project, and without MWD’s financial backing the project was probably not viable.

Even Joseph Jensen thought the contract workable and stated that it should not be

altered in any of its fundamentals.424 The same MWD chairman who had deemed the

agreement “tragic” two months earlier now stated “[i]t is imperative that we protect

our delivery contract with the state.”425 Jensen’s newfound enthusiasm for the

424 Ray Hebert, “New State Legislature Battle Shapes Up on Water Plans, Los Angeles Times, January 1, 1961. 425 “MWD To Guard Water Bond Pact,” San Diego Union, January 18, 1961. 181

contract must have been gratifying to SDCWA officials, who were willing to let

MWD take the lead so long as it represented San Diego’s interests.

The prospect of legislative meddling with the water contract was not far- fetched. In the pre-reapportionment state senate where Northern California was

allotted most of the seats, legislators who had opposed Proposition 1 saw the MWD

contract as a way to derail the project.

Southern California solidarity was shaken early in the legislative session when

the Los Angeles Department of Water and Power resurrected its plan for restructuring

MWD revenues that had been proposed but rejected the year before. The department

again wanted separate pricing for Colorado River and State Water Project water, with

each to be priced at their respective costs of delivery. The appeal was made not to

MWD, but to the governor’s office and the legislature, where an amendment to the

MWD Act would be required to institute separate pricing.426

Fred Heilbron was furious when he learned of the proposed legislation. With its preferential rights to Colorado River water far below actual purchases from MWD,

the department’s proposal would eventually force SDCWA to buy from MWD’s State

Water Project supply at much higher prices. Heilbron probably believed he had made

a deal just a few months earlier when SDCWA agreed that one-half of capital costs

would be paid through the water rate, and that the department was now acting in bad

426 Ray Hebert, “City Asks Better ‘Break’ on Water,” Los Angeles Times, February 9, 1961. 182

faith. Heilbron duly informed the department that he and SDCWA would strenuously

oppose the department’s legislative efforts.427

There was no need at first for SDCWA to lead the opposition to the department’s efforts because the MWD hierarchy was also against the proposed legislation. In a meeting with the department and legislators in Sacramento, MWD officials claimed that a composite price was necessary to pay for the district’s share of

the State Water Project. If Colorado River water revenues could not contribute to the

cost of the state project, they maintained, in order to sell Northern California water

the district would have to increase its tax base to a level that could endanger the entire

project.428 In a somewhat contradictory but forceful statement, Joseph Jensen chimed

in that the Department of Water and Power proposal “could destroy the MWD and

render it ineffectual….” He charged that such a change to the MWD Act would materially impair the district’s ability to make payments and constitute a modification of the State Water Project contract with the state.429

As MWD and the department approached an April 21 deadline set by legislators for agreement between the two parties, the agencies faced the prospect that the legislature would decide the issue without their input. This incentive apparently motivated the parties because they reached agreement in early April on a bill to be introduced with their joint endorsement.430 The bill, which was enacted as proposed,

427 Griffen, “Harry Griffen Manuscript,” chap. 5-5g, 17. 428 “Power Dept., MWD Fail to Gain Accord,” Los Angeles Times, February 22, 1961. 429 Ray Hebert, “Deadline in Water Price Dispute Nears,” Los Angeles Times, March 26, 1962. 430 “Welcome Compromise of a Water Issue,” Los Angeles Times, April 4, 1960. 183

made two major changes to the MWD Act. First, the board of directors was authorized, but not required, to fix water rates that might vary with regard to different sources from which the water was obtained. Second, the board was mandated as far as practicable to fix water rates so as to result in sufficient revenue to pay operating

expenses, repair and maintenance costs, expenses for acquisition of services, property

and other rights, and principal and interest on bonded debt.431 The provisions, while

important, were not as conclusive as the Department of Water and Power had earlier

wanted. The bill left separate water pricing to the MWD Board’s discretion, and the

directive to set the water rate to pay for, among other things, bonded debt for capital

projects, was to be instituted only “so far as practicable.” Nevertheless, when the

MWD Board voted approval of the measure, the San Diego directors spoke out sharply against it.432

SDCWA was in a bad spot, now at odds with MWD and facing the potential of having to pay exorbitant rates for Northern California water. With an April 21 deadline for the introduction of bills, the best chance was to obtain some concessions before that date. The result was an April 18 memorandum of understanding (MOU) between SDCWA and the Department of Water and Power.433 The MOU provided

that SDCWA would withdraw its opposition to the legislation and in return the two agencies would agree on certain positions as to its meaning and intent. Those

431 Metropolitan Water District, Twenty-Third Annual Report, 129-130. 432 Ray Hebert, “Solid Front Backs Water Price Code,” Los Angeles Times, April 20, 1961. 433 “Memorandum of Understanding between the Department of Water and Power of the City of Los Angeles and the San Diego County Water Authority,” April 18, 1961, SDCWA archives. 184

positions were that (1) the legislation was permissive and subject to the discretion of

the MWD Board; (2) a two-price rate structure would not be applied until water from

the State Water Project was actually available to MWD members; (3) regardless of

availability, a member agency would not have to pay a higher water rate if water from

the cheaper source was sufficient to supply members’ needs; and (4) the preferential

rights provisions of the MWD Act should be amended at some future legislative

session to include in its computation each member’s actual contribution to capital

costs from whatever source, including water purchases.

At first glance, the MOU is curious because it was an agreement only between

SDCWA and the Department of Water and Power. MWD, the entity that would

actually determine its own water rate, was not a signatory and any change in

preferential rights would be up to the legislature. Moreover, events of the previous

year had demonstrated that the department’s position would not necessarily be the

position of the MWD directors appointed by Los Angeles, the Los Angeles mayor, or

the city council. The MOU’s value to SDCWA, therefore, was suspect. Realistically,

however, it was probably all that SDCWA could salvage from a process not within its

control. The MOU would have carried far more weight if it had been signed also by

MWD, but it was probably futile to convince the district to commit itself to future

actions when there was no need to do so.

SDCWA’s desire to include that portion of water rate revenues applied to capital costs in the preferential rights calculation made sense, and the MOU was the first of many efforts over the years to make that change to the MWD Act. Los 185

Angeles and other MWD member agencies that had paid high taxes in earlier

decades, however, were motivated to keep the rules as they were. As SDCWA and

other developing member agencies increased their tax base, Los Angeles’ share of

preferential rights was bound to decrease. That reduction would be significantly more

dramatic if water revenues devoted to capital costs were in the mix.

Without a change in preferential rights, Los Angeles would have its cake and

eat it, too. The revenue base for payment of capital costs was shifting from taxes to

water purchases, but preferential rights continued to exclude the purchase of water

from its calculation. This was to be a continual burr in SDCWA’s saddle into the

twenty-first century. Bill Jennings, the SDCWA general counsel from 1948 to 1971,

explained that San Diego repeatedly asked MWD to adjust the preferential rights

rules and considered going to the legislature for a change in the MWD Act. Jennings

believed the prospects for legislative relief were good, but SDCWA did not pursue

that course because MWD could punish San Diego in other ways, particularly by

refusing to cooperate in building future pipelines.434

MWD Renews Its Attack on the East Branch Canal

Having thwarted attempts to amend and perhaps kill the MWD water contract in the

1961 legislative session, supporters of the State Water Project might have believed the state could now concentrate on construction. However, MWD had one more chance to delay or eliminate the east branch canal, and Joseph Jensen intended to

434 Jennings, “William H. Jennings; Water Lawyer,” 98-99. 186

make the most of it. In its contract with the state, MWD had reluctantly accepted a

provision that the state would determine the route and timing of construction of the east branch. However, if all the contractors that would be served by the east branch could agree by June 30, 1963, on a particular construction regimen, the state would accept that plan. Failing such an agreement, the state would develop its own plan, although it would still accept a solution from all the east branch contractors if they could agree by December 31. MWD’s task, then, was to convince other contractors to accept its plan with regard to the east branch. 435

MWD had good reason to be interested in the east branch. The district was

obligated to pay over sixty percent of State Water Project costs, and with a total estimated east branch project cost of about $300 million, MWD’s share would be around $200 million.436 MWD agreed with the state’s preliminary plan to complete the west branch in 1970 to serve the Los Angeles area, but balked on the state’s plan

to complete the east branch by 1972.437 During 1962 and 1963, MWD argued for a delay of east branch completion until 1985 or its elimination, to be replaced by MWD

facilities that would deliver Northern California to its member agencies and other

State Water Project contractors.438

MWD faced opposition from state officials, other contractors who planned to

take water from the east branch, and its own member agencies who could access

435 Ray Hebert, “Feather River Battle Rages Outside of L.A.,” Los Angeles Times, February 11, 1963; Ray Hebert, “Showdown Near on Aqueduct Plan,” Los Angeles Times, June 24, 1963. 436 “MWD Delays Deciding Its Aqueduct Policy,” Los Angeles Times, November 21, 1962. 437 Ray Hebert, “First Feather Water Urged for L.A. Area,” Los Angeles Times, April 2, 1962. 438 Jennings, “William H. Jennings; Water Lawyer,” 117-121. 187

Northern California water only through the east branch. The state’s primary

representative was William Warne, appointed in 1961 by Governor Brown to be the

Director of Water Resources. This was the same William Warne, who as Deputy

Commissioner of the United States Bureau of Reclamation, chaired the committee

that in 1944 recommended to President Roosevelt the construction of the San Diego

Aqueduct from MWD’s Colorado River Aqueduct. Warne, along with other members

of the Brown administration, consistently supported construction of the east branch, stating that it would be built and completed on schedule in 1972 unless all the contracting water agencies decided to postpone it.439

With the state in favor of east branch construction, Joseph Jensen had to find

some way to entice all the other contractors into putting off the project. Jensen himself stated a few years after the fact that “Metropolitan made a most generous offer to provide water for all of these agencies at no cost to them except the operating

cost which they would have to pay under the state contract.” In the case of Palmdale,

which lies in the Mojave Desert north of Los Angeles, MWD offered to build a

pipeline to deliver water to the area.440 Jensen also reportedly tried to get the San

Bernardino Valley Water District to give up its 90,000 acre-foot per year allocation from the State Water Project and join MWD.441 That feeler was quickly rejected even

though MWD offered San Bernardino a reduced annexation fee and delivery of

439 Ray Hebert, “State Official Pledges Aid on Aqueduct,” Los Angeles Times, December 9, 1962; Ray Hebert, “MWD Accuses Warned of Slighting District on East Branch Aqueduct,” Los Angeles Times, July 20, 1963. 440 Jensen, “Developing California’s Natural Resources,” 159. 441 Ray Hebert, “MWD Chief Accused Of Ignoring Areas,” Los Angeles Times, October 20, 1962. 188

Northern California water through the MWD system. 442 For contractors in desert areas of eastern Riverside County, Jensen suggested a water swap in which the desert

contractors would trade their Northern California water for a portion of MWD’s

Colorado River allocation, which could be delivered through the existing Coachella

Canal or a turnout on the Colorado River Aqueduct.443

Central to the MWD strategy to supply Northern California water to inland

areas was a new MWD water line that would start at the west branch and run 109 miles to the proposed terminus of the east branch, Perris Reservoir.444 The proposed

line, dubbed the “foothill feeder” would be constructed, owned and operated by

MWD, and follow the western side of the coastal mountain range, whereas the east branch would start on the inland side of the range to first service desert communities

and then turn south. The foothill feeder, along with separate lines to the Antelope

Valley and water swaps with Riverside County desert regions, completed the MWD

alternative to the east branch.

Just as Jensen had difficulty selling the state and other contractors on his alternative to the east branch, he also faced opposition within the MWD family.

SDCWA was the most vocal opponent but had ready allies in the Riverside County member agencies. In July 1962, Fred Heilbron warned his similarly-minded SDCWA

Board of Directors that agencies in the east branch service area must work together to

442 Jennings, “William H. Jennings; Water Lawyer,” 121. 443 “Colorado for Feather Swap Urged,” Los Angeles Times, November 27, 1962. 444 Ray Hebert, “Southland in New Fight Over Route for Water,” Los Angeles Times, February 10, 1963. 189

fund the east branch as well as the west branch.445 To that end, the SDCWA Board adopted a resolution reiterating its support for prompt construction of the east

branch. 446 MWD Director Irwin Farrar, representing the Eastern Municipal Water

District in Riverside County, was also a proponent of a 1972 completion of the east branch. He wanted Northern California water to provide dilution for the saltier

Colorado River water.447 Although the foothill feeder would also provide Northern

California water to the Riverside and San Diego County member agencies, those

agencies were wary of a line whose construction and operation would be entirely

within MWD’s control. They wanted the state to construct the connection to the State

Water Project, rather than a MWD Board whose voting majority apparently did not

share their interests.448

Although it had failed to convince the state, other contractors, and some of its

own member agencies, MWD in June 1963 formally asked the state to delay

construction of the east branch until 1985. Directors from Riverside and San Diego

Counties predictably opposed the measure.449 Additionally, all other contractors who

would be served by the east branch asked the state for completion in 1972.

Negotiations continued until the end of the year, with Joseph Jensen personally lobbying the other contractors for water delivery alternatives to be funded by

445 Minutes, SDCWA Board of Directors Meeting, July 12, 1962. 446 Minutes, SDCWA Board of Directors Meeting, August 8, 1963. 447 Oshio, “Urban Water Diplomacy,” 213. 448 Jennings, “William H. Jennings; Water Lawyer,” 122-123. 449 “Delay in Big Aqueduct Asked by MWD Board,” Los Angeles Times, June 26, 1963. 190

MWD.450 However, no agreement had been reached by the end of the year and at that

point the decision was left to the state.451

As the east branch drama played out in the second half of 1963, SDCWA

decided to investigate the possibility of contracting with the state on its own.452 On

November 14, a special committee of the SDCWA Board of Directors reported that a

contract with the state for 50,000 acre-feet per year of water was potentially feasible,

but recommended against negotiations to that end. The question of commencing

negotiations with the state was put to a vote by the full board and defeated by a large

majority, although Fred Heilbron voted in favor of negotiations.453 This was a rare

and perhaps unique instance of Heilbron on the short end of a vote of the SDCWA

Directors, and begs the question as to the agency and Heilbron’s real intentions. State

Water Project rules dictated that agencies had a deadline of December 31, 1963, to contract for Northern California water, and there may have not been enough time to reach an agreement. Also, the cost of delivery to San Diego may well have been prohibitive and MWD certainly would not have shared the cost of a line from the

Perris Reservoir to the SDCWA service area. In retrospect, the flirtation with its own

State Water Project contract might have been merely a good faith investigation of a

concept, or it could have been an attempt to dissuade MWD from opposing the east

branch.

450 “MWD Chief’s Plan Meets Resistance,” Los Angeles Times, December 3, 1963. 451 Metropolitan Water District, Twenty-Sixth Annual Report (Metropolitan Water District, 1964), 96. 452 Minutes, SDCWA Board of Directors meeting, July 11, 1963. 453 Minutes, SDCWA Board of Directors meeting, November 14, 1963. 191

As expected, on February 14, 1964, the state announced it would proceed with

construction of the east branch as originally scheduled, with an estimated completion

date of 1972. The decision was a personal defeat for Jensen, who had really lost the

battle in November 1960 when, over his objection, MWD signed the contract giving the state power to make the decision if all the contractors could not agree.

Jensen claimed he opposed the east branch only because it was an unnecessary

cost and subject to seismic disruption. William Warne at the Department of Water

Resources saw Jensen’s motivation differently. According to Warne:

Joe Jensen thought that [the] Metropolitan Water District ought to

include everything south of the Tehachapis, no matter…. Jensen

thought that by limiting the amount of water that went through the

east branch, he could control any spread of water outside the

jurisdiction of the Metropolitan Water District of Southern

California.454

While Jensen probably harbored mixed motives, Warne’s assessment had merit and

rephrased Jensen’s pronouncements in 1952 as the Laguna Declaration was being discussed. On that occasion, Jensen stated “we are the boys who are going to gather the water for Southern California and dish it out. We are going to tell the state

454 William E. Warne, “Administration of the Department of Water Resources, 1961-1966,” (Berkeley, University of California Governmental History Documention Project, Goodwin Knight/Edmund Brown, Sr., Era, 1981), 95. 192

engineer to keep out of our way unless he deals through us with Southern

California.”455 As things turned out, Joseph Jensen did not get his way.

Warne also had an opinion of Jensen’s personality. Comparing him with

another hard-nosed politician of the period, Warne said, “Unlike George Miller, who

had certain warm or malleable facets to his character, I never found one in Joe

Jensen.”456 The same could not be said about Fred Heilbron, who could turn on an engaging personality, particularly with people he was trying to court on one of his

issues. Finally, Warne commented on Jensen’s behavior at the 1973 ceremony

recognizing completion of the east branch canal:

I remember that I was seated in the front row. Next to me was Joe

Jensen, just as proud as punch of the completion of the east branch

and the Perris reservoir. He was there to receive the plaudits.457

State Water Project Postscript

MWD’s conversion to the State Water Project was further cemented in September

1964 when the district executed Amendment No. 1 to its contract with the state, increasing its water allocation from 1.5 to 2 million acre-feet per year. MWD took that action because the United States Supreme Court in 1963 ratified Special Master

Rifkind’s pro-Arizona recommendation in Arizona v. California, which would eventually limit MWD to Colorado River to 550,000 acre-feet in many years, and

455 “’We’re Water Boss’, Metropolitan Told,” San Diego Evening Tribune, December 13, 1952. 456 Warne, “Administration of the Department of Water Resources, 1961-1966,” 99. 457 Ibid., 96. 193

because continuing annexations to the district had increased water demands.458

Experts estimated that because of the larger water allocation, MWD’s share of total

State Water Project costs would increase from 66 percent to 75 percent.459

Although future opposition to State Water Project expansion by the

environmental movement eventually limited the project to only about half of the four

million acre feet per year originally intended, without it urban Southern California

would have been hard pressed to find alternative water sources to fuel its relentless

growth. Joseph Jensen would have preferred the project to be an organ of MWD and

not the state of California, but that preference notwithstanding, the additional water

made MWD the power Jensen wanted it to be. With only Colorado River supplies,

MWD would have soon been unable to meet demands within its service area. By

adding the State Water Project, MWD could for decades meet all regional water

requirements and fulfill the promises made in the Laguna Declaration, although

environmental limitations would later bring shortages sooner than expected. The new

supply for which Fred Heilbron had fought long and hard meant SDCWA and its

member agencies had the comfort of knowing that MWD could provide all their

water needs for the foreseeable future. It also meant, however, that the San Diego

region had put all of its imported water supply eggs in one basket. That circumstance

would become a matter of regret for SDCWA before the end of the century.

458 Metropolitan Water District, Twenty-Seventh Annual Report (Metropolitan Water District, 1965), 91-94. 459 Ray Hebert, “L.A. to Get More Water From North,” Los Angeles Times, June 21, 1964. 194

Chapter Four

Agencies in Transition 1964-1975

By 1964, the State Water Project was an accomplished fact, although issues of cost and conservation would later limit its extent and the amount of water it could make available to contractors, among whom MWD was the project’s largest financier.

MWD could now concentrate on other issues demanding its attention, both internal and external to the organization. As MWD’s biggest customer, SDCWA was keenly interested in the same issues and, except for continued tension over revenue sources and a simmering dissatisfaction regarding the preferential rights calculation, was for the next decade either in agreement with the MWD majority or otherwise able to get its way. After the turmoil of the previous decade, the relationship between the two agencies remained relatively harmonious well into the 1970s.

MWD in 1964 had 26 member agencies blanketing a six county area (a

Ventura County agency had joined in 1961), with a population of about 9.13 million and an area of 4,415 square miles. As part of that total, SDCWA, with 21 member agencies of its own, contributed a population of about 1.125 million and an area of

1,117 square miles. Of the 1.64 million acre-feet of water that MWD delivered in fiscal 1963-1964, 232,000 acre-feet went to SDCWA. With most of the region’s 195

developed areas now within its sphere, SDCWA encompassed over 95 percent of the

county’s population.460

Some internal issues had familiar themes. Although MWD had steadily shifted much of its revenues from taxes to water sales, the city of Los Angeles wanted to complete the transition to the disadvantage of member agencies with high water

usage such as SDCWA. MWD annexation policy also continued to occupy directors’

minds, with ongoing debates over what areas should be allowed to join and how much they should pay for the privilege. The discussion over annexation charges generally split the member agencies into the same two camps as did the debate over taxes and the water rate. Expanding agencies such as SDCWA wanted to annex relatively undeveloped property at as low a rate as possible, while the already- developed member agencies such as Los Angeles felt that without a larger buy-in requirement, new lands would receive the benefits of membership largely at their expense. The extent and timing of construction of new water transmission facilities remained a third recurring issue, with fast-growing areas clamoring for more delivery capacity at district expense.

What the agencies had not needed to consider for several years was their leadership. Since 1949, Joseph Jensen had ruled MWD as its board chairman and although he had taken his lumps in the battle over the State Water Project, Jensen still held the reins, winning re-election biennially without significant opposition. At

460 Metropolitan Water District, Twenty-Sixth Annual Report, xxxv, 42-43; San Diego County Water Authority, Eighteenth Annual Report (San Diego, 1964), 48-49. 196

SDCWA, Fred Heilbron remained firmly in control as the only board chairman in the

agency’s history, and showed no inclination to abdicate. The problem was that this

situation could not go on forever. In 1964, Jensen turned 78, and Heilbron celebrated

his 87th birthday.

Even with the panoply of internal issues, events external to the agencies most

affected their future. The mid-1960s brought the disappointment of Arizona v.

California, in which the United States Supreme Court decreed that Arizona was

entitled to 2.8 million acre-feet of water per year from the Colorado River, leaving less for MWD and SDCWA. That threat was offset by the promise of ample water from the State Water Project, a plan to build a huge desalination project complete with nuclear power plant in Orange County, and United States Department of the

Interior plans to augment Colorado River supplies from as far away as the Columbia

River. However, by the late 1960s those grandiose schemes ran headlong into the

rapidly developing environmental movement, financial constraints, and opposition

from areas in which new water was to be obtained. For the first time, urban and

suburban Southern California had to face the real prospect of a finite water supply, resulting in a reexamination of the water agencies’ mission and how that mission was to be accomplished.

The water barons’ first reaction to the environmental movement was incredulity, then a “circle the wagons” mentality, and finally a realization that the

world in which they operated had changed, and in terms of achieving their mission

not for the better. Environmentalism portended a future in which not enough imported 197

water could be secured to meet all the member agencies’ needs. That would lead to efforts to develop other, mainly local, water resources and increased friction among

MWD member agencies over the apportionment of the water MWD could make available.

Jensen and Heilbron Still in Control

In 1964, Joseph Jensen still held sway over the MWD Board of Directors, although it had become a given that individual member agencies would fight periodically over who would bear the burden of contributions to district revenues and whose pet construction projects would get built. The only time Jensen had lost control over his board was at the end of the State Water Project fight, when even the Los Angeles directors deserted him and voted for an agreement with the state. Jensen had also lost the battle with the state over immediate construction of the east branch canal, but despite opposition from Riverside and San Diego County member agencies he had not lost his board majority. When asked how Jensen controlled the board over a course of decades, William Warne, his nemesis in the east branch controversy, offered an opinion. “What gave him that iron hand, I was never able to figure out

completely, except that he had an unwavering block of votes and he was ornery. He controlled the Los Angeles vote on the board….”461 Although Warne may have

oversimplified, he was right. The Los Angeles share of the board vote had decreased

over the years, but it was still 31 percent in 1964. The next largest agency had only 13

461 Warne, “Administration of the Department of Water Resources, 1961-1966,” 99. 198

percent of the vote.462 With a voting block almost three times larger than anyone else,

Jensen had an enviable base on which to form majorities, reward his friends, and

punish his enemies.

At SDCWA, Fred Heilbron had not experienced significant dissension among

his member agencies since the city of San Diego had balked at building the second

barrel of the first aqueduct in the early 1950s. His battles occurred in the MWD board

room. SDCWA and MWD director Harry Griffen commented in 1964 that Heilbron

was “still in complete charge of ‘his’ authority and an able and competent leader in

San Diego’s continuing quest for water.”463 Nat Eggert, one of Heilbron’s successors

as board chairman, was more blunt. According to Eggert, Heilbron “was a strict

autocrat. He knew what he wanted. Boy, he was a boss. He bossed that water

authority.”464

While time had so far not caught up with Heilbron, it had not been as gentle

with others in the SDCWA hierarchy. With the exception of the chairman, the only original SDCWA director left from 1944 was Fred Simpson, a Heilbron ally in failing

health. Also, Richard Holmgren, who had been with SDCWA since its inception and

its general manager since 1953, retired in 1963.465 The only other SDCWA founder still around was William Jennings, the original board secretary who resigned as a director to become general counsel in 1948, and still held that position.

462 Metropolitan Water District, Twenty-Sixth Annual Report, xxxiii. 463 Griffen, “Harry Griffen Manuscript,” chap. 5-4g, 32. 464 Nathan L. Eggert, “An Interview with Nathan L. Eggert,” (San Diego: San Diego Historical Society Oral History Program, 1982), 14. 465 San Diego County Water Authority, Eighteenth Annual Report (San Diego, 1964), 11. 199

By 1964, Heilbron had formed a new leadership clique with himself, of

course, as its undisputed head. Joining Heilbron as officers on the SDCWA Board of

Directors were Raymond Badger as Vice-Chairman, Hans Doe as Secretary, and

Harry Griffen as Treasurer. Those directors would not relinquish their positions until

after Heilbron’s death in 1973. Although Heilbron devotees, none of them

represented the city of San Diego. Badger came from the Santa Fe Irrigation District,

a small agency just north of San Diego. Doe represented Bueno Colorado Municipal

Water District in the Vista area of the north county, and Griffen was from the Helix

Water District east of the city. Although Badger was nominally second in authority at

SDCWA, it was Hans Doe and Harry Griffen who Heilbron developed as his

proteges.466 Doe joined the SDCWA board in 1954, and in 1956, when SDCWA became entitled to a third director at MWD (in addition to Heilbron and Holmgren),

Doe was chosen. Griffen became a SDCWA director in 1956 and was sent to the

MWD board in 1963.

Until 1963, the SDCWA general manager, first Joseph Burkholder and then

Richard Holmgren, had served with Heilbron on the MWD board. Although it appears incongruous that SDCWA’s chief staff member should serve on the policy- making body of MWD, the arrangement guaranteed Heilbron would have a colleague

who was beholden to him for his job. That practice ended when Holmgren retired. To

replace Holmgren as general manager, SDCWA hired Linden Burzell, the general

manager of the Vista Irrigation District, which held membership at SDCWA as

466 Gottlieb and FitzSimmons, Thirst for Growth, 35. 200

Bueno Colorado. Burzell was selected by a directors’ committee and endorsed by

Bueno Colorado’s Hans Doe, but Heilbron did not know him. Nevertheless, Heilbron

accepted the committee’s decision.467 That acceptance, however, entailed a more limited role for the new general manager. Burzell went on to serve 20 years as the

SDCWA general manager, but never sat on the MWD Board of Directors. At

Heilbron’s insistence, Burzell was not even allowed to attend MWD Board meetings. 468 With Doe and Griffen as his loyal lieutenants at MWD, Heilbron entered

into a period of relatively calm relations with the district.

MWD Changes Policy on Annexation Charges

Through the 1950s, MWD continued to base annexation charges on the assessed

valuation of the annexed property. This policy fostered a situation in which areas of relatively little value could “buy in” to MWD at a low price and then undergo rapid development and realize higher property values at least in part because of the new water supply. The old, established members of MWD with high assessed property values, most prominently the city of Los Angeles, saw the annexation rules as a boon to outlying areas that came at their expense. Joseph Jensen stated the Los Angeles position as well as anyone:

…[L]and is just land until it gets water. When it gets water, its

assessed value and its sale value increase materially. For example,

467 Linden Burzell, “An Interview with Linden Burzell,” (San Diego: San Diego Historical Society Oral History Program, 1992), 24-25. 468 Gottlieb and FitzSimmons, Thirst for Growth, 34. 201

land could have been bought in Riverside County for $200 to $500 an

acre without difficulty. When it becomes part of the district, the $200

price becomes $600 and the $500 price has now, in some cases, gone

up to $2,000 to $4,000 an acre merely because of the assurance that

the water is now available…. When the land value, in anticipation of

water being available, can increase that much, it also follows that the

annexation of an area should be accompanied by a substantial

payment for the privilege of joining the District.469

Jensen’s reasoning had merit depending on how one perceived MWD’s obligation to

deliver water to its member agencies. If, according to the Laguna Declaration, MWD

was obliged to serve all the water demands of all its member agencies, areas of low

value had the same right to water as Los Angeles, and arguably should be expected to

pay a like toll for entry into the system. On the other hand, if a water shortage were to

ever occur and preferential rights were allotted by law in proportion to past property

taxes paid, including annexation fees, areas of high value would be entitled to the

lion’s share of available supplies. Although MWD directors in the 1960s spent

significant time debating appropriate annexation fees, they did not address the

provisions of the MWD Act forbidding the levy of annexation fees to member cities that brought expanded territories into the district. Only new member agencies and

469 Jensen, “Developing California’s Natural Resources,” 129. 202

non-city member agencies that annexed additional territory into MWD could be

required to pay for annexation, a rule which continues today.

The MWD faction wanting a minimum annexation charge based on the

amount of acreage annexed, not its assessed value, had an advantage by the 1960s.

The days when MWD had to seek out new members to create customers for its water

supply were over. The opportunity to join MWD was now a privilege for areas that

did not have a sufficient supply or for whom the MWD supply was the cheapest

available. With the State Water Project promising more water by the early 1970s,

MWD was amenable to acquiring new territory and could do so with a higher cost of

membership.

The MWD Board of Directors began in 1961 by adopting a formula that

assessed a minimum annexation charge of $100 per acre. However, this did not

satisfy some directors, and the debate continued. From 1963 to 1966, new annexation

applications were held up, except for automatic annexations to member cities,

pending studies of an appropriate cost of entry. 470 That situation prompted the

SDCWA Board of Directors in March 1966 to pass a resolution urging MWD to terminate the stalemate and adopt a “simple and reasonable policy of orderly expansion under reasonable terms and conditions….” For SDCWA, such reasonable terms included an annexation rate that would continue to be based on the assessed

470 Ibid., 121-122. 203

value of the annexed territory.471 However, the main need was to get annexations

moving again.

Discussions regarding an appropriate annexation charge were held in the

MWD Water Problems Committee, which included Jensen and Heilbron as members.

According to Jensen, he had to carry the work of getting an increase “pretty much

alone,” and began with a $700 per acre charge which he soon dropped to $400.

Jensen argued the cost of providing water fell within that range, but as most

committee members were from outlying districts, they voted down first the $400 figure and then a $300 charge. Director Irwin Farrar from the mostly rural Eastern

Municipal Water District offered $125, and Fred Heilbron amended it to $150, the number which the committee adopted as a recommendation to the full board of directors.472 At the board meeting on September 13, 1966, the directors instead

adopted a minimum annexation charge of $200 per acre, apparently influenced not

only by Jensen but also by a staff report that placed the asset value of MWD at about

$206 per acre within the district.473 The board continued to allow deferred payments on annexation charges but at an interest rate of four percent.474 The effect of the new

charge was significant. Until the $200 minimum charge was established, the average

annexation charge per acre for land in Riverside County had been $30.

Approximately 500,000 acres had been annexed in the county under the old rules at a

471 SDCWA Board of Directors, Resolution No. 882, March 10, 1966. 472 Jensen, “Developing California’s Natural Resources,” 125-126. 473 Griffen, “Harry Griffen Manuscript,” chap. 6-6, 15-16. 474 Metropolitan Water District, Twenty-Ninth Annual Report (Los Angeles, 1967), 143. 204

total charge of less than $15 million; the first 125,000 acres annexed after the new charge took effect paid $23.8 million. 475

The $200 minimum charge per acre lasted until 1975, when it was replaced by

a $300 charge that was thereafter increased yearly to account for inflation.476

Although the annexation charge has been increased over time, the board decision in

1966 effectively ended the controversy among MWD member agencies.

Establishment of the new annexation charges was the result of a compromise

between expanding member agencies wanting low entry fees as they grew, and

established agencies that wanted new territory to bear a larger financial burden for the

right to received imported water. It probably helped that the new annexation fee could

be justified as something approximating the per acre value of MWD assets, but at its

heart the debate was again over how much each of the self-interested agencies would

pay to get their water.

SDCWA and MWD Agree on a New Pipeline for the San Diego Aqueduct

With the annexation logjam broken and the territory and population of SDCWA

expanding, the agency’s attention again turned to the need for additional pipeline

capacity to transport MWD supplies to San Diego. In February 1965, SDCWA staff issued a report estimating additional delivery capacity would be required to meet

475 Jensen, “Developing California’s Natural Resources,” 126, 130. 476 Griffen, “Harry Griffen Manuscript,” chap. 6-6, 16. 205

growing needs by 1970.477 As with the previous three pipelines, SDCWA wanted

MWD to pay for the new pipeline to a point approximately six miles below the

northern boundary of San Diego County, while SDCWA would pay for the pipeline to its southern terminus. Getting MWD to agree to that arrangement had never been easy. The first pipeline had been constructed by the Navy without MWD’s consent and responsibility for payment had been settled only after more than two years of negotiations over the terms of SDCWA’s annexation to the district in 1946. The second pipeline was again constructed by the Navy over Joseph Jensen’s objection that MWD could do a better and more cost effective job, but MWD eventually reluctantly agreed to fund its share. In 1956, when SDCWA sought MWD participation in the third pipeline, also known as the first pipeline of the second aqueduct, Chairman Jensen initially refused, maintaining that MWD had fulfilled any obligation it may have had to construct transmission facilities for SDCWA.

Fortunately for SDCWA, Fred Heilbron was able to use the threat of direct participation in the Feather River Project rather than as a MWD member agency to get MWD to again pay up. With this history of acrimony, it would have been entirely

reasonable to predict another battle over funding for the fourth pipeline. But that was

not to be the case.

In 1965, MWD needed a large infusion of money in addition to normal

revenues to fund payments for the State Water Project and embark on an ambitious construction program of its own. At that year’s March board meeting, MWD directors

477 San Diego County Water Authority, Nineteenth Annual Report (San Diego, 1965), 24. 206

voted to place an $850 million bond measure on the ballot in June 1966. The bond would finance the major portion of a $1.2 billion plan to provide new facilities for distribution of State Water Project supplies and accommodate the need for additional district pipeline capacity for the next 20 years. The largest project in the MWD program, with an estimated cost of $500 million, was the foothill feeder, which would carry up to two million acre-feet of water 94 miles from Castaic Lake north of Los

Angeles to a site on the State Water Project’s east branch in the San Bernardino

Mountains. Turnouts would connect with various lines along to the way to deliver water to member agencies. Among the many branch lines included in the MWD program was another pipeline to SDCWA. 478

There is no indication SDCWA had to fight for inclusion of its fourth pipeline

in the MWD construction program. The San Diego conduit would be a relatively minor piece of the puzzle, with the MWD portion costing less than $20 million on completion in 1970.479 Given the numerous branch lines in the program benefitting

many of its member agencies, it would have been difficult for MWD to single

SDCWA out for exclusion.

SDCWA had to be pleased with MWD’s decision to build its portion of the

fourth pipeline, although it came as part of a program that would increase the member

478 Metropolitan Water District, Twenty-Seventh Annual Report, 102; Ray Hebert, “Water Bond Proposal Will Go on 1966 Ballot,” Los Angeles Times, March 10, 1965. 479 Metropolitan Water District, Thirty-Second Annual Report (Los Angeles, 1970), 125; The cost of the MWD portion was relatively low because the district had already built the requisite additional capacity into the San Diego Aqueduct for the first fifteen miles from the Colorado River Aqueduct turnout. 207

agencies’ financial obligations for decades. SDCWA in 1963 viewed the foothill feeder as part of Jensen’s scheme to obstruct or delay the east branch of the State

Water Project but now apparently raised no objection to its funding.480 For its part,

SDCWA needed to finance construction of the pipeline south of the MWD delivery point. In January 1966, the SDCWA Board of Directors authorized a $30 million bond issue that would appear on the June ballot with MWD’s $850 million bond.481

The two bonds were linked for the election campaign when the county chairman of the MWD bond campaign also took charge of promoting the SDCWA bond.482

The San Diego bond drew no significant opposition, but there were rumblings

in the Los Angeles area over the MWD bond. The city council of Santa Monica, an

MWD member agency, voted unanimously to oppose the bond, stating that some of the planned facilities would not be needed for several years and complaining that

MWD’s urban agencies would bear an unfair portion of bond repayment.483 Santa

Monica’s gripe echoed the argument Los Angeles had made for years that agencies

with high assessed value paid a disproportionate share of taxes to MWD while other agencies took the lion’s share of the water. Although MWD had begun in 1960 to shift its revenue structure to a heavier reliance on water sales rather than taxes, Santa

Monica believed the change was not happening fast enough. Los Angeles City

Councilman Ernani Bernardi quickly took Santa Monica’s cue, suggesting the city

480 It is a matter of conjecture whether MWD’s inclusion of the fourth pipeline influenced SDCWA’s change of heart. 481 “CWA Slates $30 Million June Bond Vote,” San Diego Union, January 5, 1966. 482 “Unit To Push Water Bond Drive Urged,” San Diego Union, January 14, 1966. 483 Ray Hebert, “Solid Support for Water Bond Issue Cracks,” Los Angeles Times, April 7, 1966. 208

reconsider its endorsement of the MWD bond in January. In a “bitter attack,”

Bernardi charged that MWD’s taxing policies could force Los Angeles to provide less

developed member agencies such as SDCWA a subsidy of $500 million by 1990.

MWD officials responded that taxes were already being reduced and water rates

increased, and that failure to pass the bond would only mean a sharp increase in taxes

to pay for the State Water Project and needed internal improvements.484 A Los

Angeles Times editorial agreed with the MWD assessment, stating that passage of the

bond was vital and the revenue issue should be addressed separately.485

After that squabble, the MWD bond encountered little opposition and passed by a majority of more than three to one. In San Diego County, both the MWD bond and the SDCWA bond enjoyed a majority of more than four to one.486 The election,

however, did not end Councilman Bernarni’s crusade against the MWD revenue structure. That effort continued for years thereafter.

The bond election would not have been at all controversial except that once again, MWD member agencies that believed they were paying too much for district expenses used the election in an attempt to gain leverage for their point of view. No one in the MWD family disputed that the facilities the bonds financed would at some

point be needed. The dissenting agencies just wanted to pay less for the facilities and

have the expanding member agencies pay more.

484 Erwin Baker, “L. A. Pays Other Counties’ Water Bills, Bernardi Says,” Los Angeles Times, April 22, 1966. 485 “MWD: Bonds Have First Priority,” Los Angeles Times, April 25, 1966. 486 Paul James, “S. D.’s Ballot Tops Water Bond Vote,” San Diego Union, June 9, 1966. 209

MWD and SDCWA cooperation on the fourth pipeline was not confined to

the mutual effort to fund its construction. In June 1965, a year before the bond election, MWD and SDCWA contracted for SDCWA to conduct the engineering work for the MWD portion of the fourth pipeline and also for a feeder line connecting

Perris Reservoir, the terminus of the State Water Project, with the San Diego

Aqueduct. The work included field and office engineering for location, design,

preparation of plans and specifications, and determination of right of way

requirements; in short, all the functions of a consulting engineer.487 The arrangement

was opportune for both agencies. The MWD staff was at the time overworked and

SDCWA needed work to do. Every department of the SDCWA staff, including the

general manager, performed tasks under the contract with MWD, which for extended

periods took almost half the time of the engineering department and almost all the

time of the design and construction department.488

The first three pipelines of the two San Diego Aqueducts provided 450 cubic feet per second of flow, which if operated continuously except for occasional reductions, could transport about 320,000 acre-feet of water per year to the member agencies.489 The fourth pipeline had a design capacity of 380 cubic feet per second at

the MWD point of delivery, adding another 270,000 acre-feet of transmission

capacity. Even as the new pipeline was being designed, SDCWA estimated that a

487 Linden Burzell letter to SDCWA Board of Directors, June 10, 1965, SDCWA archives. 488 Linden Burzell letter to SDCWA Board of Directors, February 3, 1967, SDCWA archives. 489 San Diego County Water Authority, Fourteenth Annual Report, 33. 210

third barrel of the second Aqueduct would be required around 1988, but that could be

left to the future.490

The Federal Government Proposes the Greatest Water Project of Them All

MWD and SDCWA were not the only apostles of the dogma that progress required

development, and development required an ever-increasing water supply. Through the 1960s such was the almost universal religion of every western water agency with any potential for urban or agricultural expansion. In that vein, Secretary of the

Interior Stewart Udall in 1963 hatched the Pacific Southwest Water Plan, whose main

purpose was to authorize the Central Arizona Project but which also included provisions for augmentation of Colorado River water for other states. Most new water

projects in the West set off a chain reaction that affected other water users, a situation

especially true on the Colorado River which had been fully appropriated for decades.

Udall’s plan immediately drew the attention of MWD, SDCWA, and everyone else

with an interest in the river, and as those interests morphed the plan into an interbasin

scheme of gargantuan proportions, it involved water interests throughout the West.

Secretary Udall was an Arizonan and a conservationist in the John Wesley

Powell and Gifford Pinchot mode. He believed natural resources must be conserved

so that they could be used in the most efficient manner for the common good. This

meant dams for the collection and storage of water, and transmission facilities to take

the water to its place of best use. As an Arizonan, Udall was keenly interested in

490 Linden Burzell letter to SDCWA Board of Directors, January 31, 1967, SDCWA archives. 211

putting the principle to work in this home state through the Central Arizona Project, or CAP. With Arizona’s victory in Arizona v. California, the state now had an established right to 2.8 million acre-feet of water from the river’s main stem, but without the CAP could not use most of it. The project would move water to the state’s interior where it could be accessed by Phoenix, Tucson, and the towns and fields

along the way. However, more water for Arizona meant that eventually there would be less water for California, especially MWD, which counted on river surplus for

662,000 acre-feet, over half the water needed to fill the Colorado River Aqueduct.

Knowing this, the California congressional delegation had adamantly and

successfully opposed the CAP for years. Udall had to formulate a plan that would

authorize the CAP and at the same time mollify California and gain the support of

other basin states.

In August 1963, Udall revealed his $4 billion plan as the solution to the

continuous battle among basin states over Colorado River water, allocation of a fair share of that water to Arizona, and the dawn of a new era of federally managed resource development. Behind the rhetoric was the CAP, a network of projects spread among the basin states, and two “cash register” dams on either side of the Grand

Canyon that would subsidize the plan through the sale of electric power. Udall’s concept of generating all the water needed to satisfy the basin states may have been attractive to California, but it included a project taboo to water interests within the state. To augment Colorado River supplies, Udall proposed the interbasin export of 212

water from Northern California to free up Colorado River water for Arizona.491 For

MWD and SDCWA, the exportation of Northern California water to their service

areas was a grand idea as evidenced by the State Water Project, but they would not obtain that water at the cost of their Colorado River supplies.

The Udall plan would implement the importation of Northern California water in two phases. First, the State Water Project’s California Aqueduct would be enlarged

by 1.2 million acre-feet to permit conveyance of an additional water supply to

Southern California. This number coincided with MWD’s allotment of 1.212 million

acre-feet of Colorado River water in Priorities 4 and 5. Later, facilities would be built

to transport another 1.2 million acre-feet from Northern California to deposit in the

Colorado River for distribution downstream. 492

California politicians and water agencies acknowledged that river

augmentation made good sense. Colorado River Compact negotiators in the early

1920s had overestimated the river’s yield when it divided 15 million acre-feet

between the upper and lower Basins. With an additional 1.5 million acre-feet allotted

to Mexico under the 1944 treaty, the river would be significantly overdrawn if every

entity took its full entitlement. The prospect of Arizona taking 2.8 million acre-feet

fueled the need to consider sources of additional water. However, for Californians the

additional water had to come from somewhere other than their state.

491 Robert Dean, “’Dam Building Still Had Some Magic Then: Stewart Udall, the Central Arizona Project, and the Evolution of the Pacific Southwest Water Plan,” Pacific Historical Review 66 (1997): 83. 492 Wesley B. Steiner, “The Pacific Southwest Water Plan,” (Presented before the California Water Commission: 1963), SDCWA archives. 213

Once the major components of Udall’s plan were unveiled, the California reaction was almost uniformly negative. Water officials immediately criticized the proposed exportation of Northern California water to the Colorado River. According to them, the new line carrying water out of the state, dubbed the Lake Havasu

Aqueduct, would effectively empty MWD’s Colorado River Aqueduct.493 After all,

the Colorado River Aqueduct was built to take 1.2 million acre-feet out of the river, and Udall proposed to build an aqueduct to put 1.2 million acre-feet of California

water into the river. In an attempt to quell the opposition, Secretary Udall spoke in

October 1963 at a meeting of the Colorado River Water Commission, a board appointed by the governor to advise the Department of Water Resources. Udall assured the commission that his plan was not offered on a “take it or leave it” basis, and was subject to revision. 494 This conciliatory statement was not well received.

SDCWA General Counsel Bill Jennings, a member of the commission, described a later hearing in which the commission invited “state agencies of all kinds, that is, the water distributors of the state to come in and make their remarks. Without fail, every one of them damned the report and damned the project and would have nothing to do

with it.”495 The MWD Board of Directors joined the opposition to the Udall Plan,

stating it was incompatible with the California Water Plan, would make the Colorado

River Aqueduct useless, did not guarantee California its basic Colorado River

493 Ray Hebert, “Criticism Mounts on Southwest Water Plan,” Los Angeles Times, September 23, 1963. 494 Jerry Gillam, “Udall Says Water Plan Is Subject to Revision,” Los Angeles Times, October 19, 1963. 495 Jennings, “William H. Jennings: Water Lawyer,” 181. 214

entitlement of 4.4 million acre-feet, and would result in a takeover of California water

resources by the federal government.496

Southern Californians did not remain idle while waiting for Secretary Udall to

revise his water plan. The Los Angeles Department of Water and Power agreed water

was needed to augment the Colorado River; it should just not come from California.

The department suggested instead that water from the Snake River in the Pacific

Northwest was a more abundant source and could be transported to the Colorado

River basin at less cost. That idea was quickly endorsed by MWD Chairman Joseph

Jensen and by the Colorado River Board, which included representatives from MWD and SDCWA. 497

In the face of broad opposition, Udall announced he would prepare a revised water plan, which was released in February 1964. The revised plan eliminated the

Lake Havasu Aqueduct, the biggest sticking point for California. The plan still

provided for immediate authorization of the Central Arizona Project with a capacity of 1.2 million acre-feet, construction of the so-called Bridge Canyon and Marble

Canyon dams on each end of the Grand Canyon, projects in Nevada and Utah, and irrigation of Indian lands. For California, the revised plan included an immediate financial contribution for the enlarged capacity of a section of the California

Aqueduct. The plan also contemplated replacement of Colorado River water lost to

California by water from Northern California, but relegated that item to feasibility

496 Ray Hebert, “MWD Flatly Opposes Udall Water Proposal,” Los Angeles Times, October 31, 1963. 497 “Snake River Plan Backed,” Los Angeles Times, November 15, 1963; “State Board Backs L. A. Snake River Water Plan, Los Angeles Times, November 20, 1963. 215

studies for a future authorization. The revised plan did not mention any other sources

of river augmentation and did not guarantee California its basic allotment of 4.4

million acre-feet per year from the river.498

Although Governor Brown welcomed the revised plan, the rest of California did not. SDCWA General Counsel Jennings recommended that SDCWA oppose the plan because it (1) did not guarantee California’s Colorado River supplies lost to the

CAP would be replaced, (2) provided no source of replacement supplies other than from Northern California, and (3) did not guarantee 7.5 million acre-feet per year to the lower basin, except by some possible future authorization.499 The MWD Board of

Directors in March unanimously opposed Udall’s revised plan, saying it would render

the Colorado River Aqueduct useless in exchange for promises of substitute water.500

Fred Heilbron, who joined the MWD vote with his fellow SDCWA delegates, advised

the SDCWA directors that, in his opinion, “… the San Diego County Water

Authority, as an important unit of Metropolitan, is not in position to offer any

substitute statement that would be effective. Therefore, we should perhaps endorse it,

or take no action, allowing the Metropolitan statement to stand.”501 Heilbron in the

past had not been so shy about offering a “substitute statement,” but that had occurred

498 Ray Hebert, “New 5-State Udall Water Plan Ready,” Los Angeles Times, February 16, 1964; W. H. Jennings memo to SDCWA Water Problems Committee re Pacific Southwest Water Plan (1964 Revision) Report and Recommendation (1964), SDCWA archives. 499 Jennings memo to SDCWA Water Problems Committee re Pacific Southwest Water Plan Report and Recommendation. 500 “MWD Votes Against Southwest Water Plan,” Los Angeles Times, March 18, 1964. 501 Fred A. Heilbron letter to Members of the Board of Directors, San Diego County Water Authority, March 23, 1964, SDCWA archives. 216 when SDCWA opposed a MWD position. Here, Heilbron and SDCWA were in complete accord with MWD, and the SDCWA Board of Directors decided to take no immediate action on the Udall plan.502

While Californians were criticizing Udall’s revised plan, they were also formulating alternate concepts for augmenting the Colorado River from sources other than California. As often happens at a conceptual level, grand plans of dubious rationality were unveiled that would solve all the problems of western water supply and then some. The Ralph M. Parsons Company, a national engineering and consulting firm, proposed a stupendous project that would take water runoff from

Alaska, British Columbia, and the Yukon Territory, and distribute it to various and sundry locations in the United States, Canada, and Mexico. The plan included a canal to Lake Superior, which would increase water flow in the Great Lakes and supply areas as far away as the state of New York. Parsons estimated the cost at a mere $100 billion, compared with the $1.75 billion authorized in 1960 for the State Water

Project.503 As fantastic as the scheme was, it received a favorable review from the

Los Angeles Department of Water and Power General Manager and from MWD

Board Vice-Chairman Warren Butler. 504

By April 1964, MWD and its allies had put together an alternate plan considerably less audacious than the Parsons concept, but monumental in its own

502 Minutes, SDCWA Board of Directors Meeting, April 19, 1964. 503 Ray Hebert, “Vast North American Water Plan Proposed,” Los Angeles Times, March 18, 1964. 504 Ray Hebert, “L. A. Water Chief Urges Alaska Project Study,” Los Angeles Times, March 22, 1964. 217

right. The new regional water plan was proposed by the Colorado River Association,

a civic organization whose main purpose was to protect California’s Colorado River

water rights. Under its proposal, California’s right to 4.4 million acre-feet from the

river would be guaranteed and water to augment the river would be sought from a

much larger area than envisioned by Secretary Udall. With those conditions satisfied,

the Californians would agree to a Central Arizona Project with a capacity of 1.2

million acre-feet per year.505 Dubbed the Pacific Southwest Project, the California

plan was quickly endorsed by the state’s water establishment, including MWD. An enthusiastic Joseph Jensen acknowledged the project would consider augmentation

water from a number of sources, but that the real target was the Columbia River.

Jensen stated the Columbia had been studied as a potential water source for years and

that it “wasted” 170 million acre-feet of fresh water into the Pacific Ocean

annually. 506

The California plan was introduced as a bill by California Senator Thomas

Kuchel, and differed from Udall’s revised plan in three major respects. It required the

Secretary of the Interior to investigate and report within three years on all possible

sources of importation of water into the Colorado River, made any water used by the

CAP junior in right to California’s 4.4 million acre-foot allotment, and forbade

increased use of river water on Indian reservations until augmentation water was

505 “Group Offers New Water Delivery Plan,” Los Angeles Times, April 6, 1964. 506 Ray Hebert, “New Northern Water Plan Seen ‘Cure to All Problems’,” Los Angeles Times, April 15, 1964. 218

available. 507 Kuchel’s bill quickly drew fire from Arizona’s Senator Barry Goldwater,

who stated California wanted too much, and Washington’s Senator Henry Jackson,

who attacked the proposal to divert water from the Columbia River.508

Even though it was not his idea, Secretary Udall was attracted to the

California plan because it contemplated a series of projects that could satisfy western

water demands for the foreseeable future. As his department studied the possibilities,

Udall predicted in 1965 that “if western water politics is played wisely and well… the

world’s largest water aqueduct will one day run from Portland to Lake Mead.”509 The

proposal was equally alluring to Southern California water officials; it would give

them all the water they would ever need, paid by federal funds. Joseph Jensen

generally feared federal intervention in regional matters could undermine local governance, but in this case he welcomed federal involvement as the only way to

finance a project of this scale.510 William Jennings also supported the plan but

cautioned that cost concerns and possible conflicts over state water rights had to be overcome.511

Jennings’ concerns were well-founded. Various iterations of a Central Arizona

Project authorization bill languished in Congress until 1968, when Secretary Udall

finally was able to put together a legislative package that did not draw the wrath of

507 Metropolitan Water District, Twenty-Sixth Annual Report, 150-152. 508 Vincent J. Burke, “Kuchel Water Plan Spurned by Goldwater,” Los Angeles Times, April 24, 1964; Vincent J. Burke, “Effort Made to Squelch Water Plan, Los Angeles Times, April 22, 1964. 509 Charles Coate, “’The Biggest Water Fight in American History’: Stewart Udall and the Central Arizona Project,” Journal of the Southwest 37, No. 1 (Spring, 1995): 79. 510 Jensen, “Developing California’s Natural Resources,” 184. 511 Jennings, “William H. Jennings: Water Lawyer,” 183-184. 219

some influential congressman or interest group. The CAP was authorized but its water was made junior in priority to California’s 4.4 million acre-foot allotment until,

if ever, the river was augmented by 2.5 million acre-feet per year of new water.

Nevada and the upper basin states were reconciled to Arizona’s increased draw on the river by a smattering of smaller projects for their benefit. As a concession to states in

the Columbia River basin, river augmentation studies were put off for at least ten

years.512 Finally, a growing environmental movemen forced Udall to eliminate the

Marble Canyon and Bridge Canyon dams, which would have provided power for the

CAP and revenues to finance the project. To replace this lost power, the

environmentalists agreed to construction of a coal-fired or nuclear power plant away from the river and national park, a compromise they would later regret.513

President Johnson signed the Colorado River Basin Project Act on September

30, 1968, to the satisfaction of both Californians and Arizonans, and the newly

empowered environmentalists.514 In correspondence with Arizona Congressman John

Rhodes, Joseph Jensen prophesized this was only the first step toward building a canal from the Columbia River to Lake Mead that “will last for a thousand years.”515

The San Diego Union, in a similar mood, heralded “the end of a 50-year water war,”

but added the postscript “at least for the time being.”516

512 Coate, “The Biggest Water Fight in American History,” 85-93. 513 Dean, “Dam Building Still Had Some Magic Then,” 94. 514 Public Law 90-537, 90th Congress; 82 U. S. Statutes, 885 et seq. 515 Coate, “The Biggest Water Fight in American History,” 93. 516 “The End Of a 50-Year Water War,” San Diego Union, February 9, 1969. 220

The vision of a vast artificial watercourse sending a virtually unlimited supply

of water to the Colorado River and those who used it was not borne out over time.

The era of water for the taking was ending, along with the epic projects that stored

and transported it to distant places. Project costs had always been an issue, and as

more water was demanded for a growing west, fights over the right to use the

remaining available supplies were escalating. And now, a surge of environmentalism

that valued preservation over employment of resources made the job of the water

barons even more difficult. Looking back in 1990, Stewart Udall called the Colorado

River Basin Project the “last fling” of the water developers.517 But in 1968, men in

the mold of Jensen and Heilbron could not know their time was almost past.

MWD Pushes a Desalination Project, but SDCWA Objects

One of the quickly discarded elements of Secretary Udall’s original Pacific Southwest

Water Plan was a 50 million gallon per day seawater desalination plant to be built

somewhere along the Southern California coast.518 This was not the first suggestion that seawater desalination should someday figure into the regional water supply. In his 1955 study on the SDCWA future water supply, General Manager Richard

Holmgren saw seawater desalination as a possible future water source, although at the

517 Coate, “The Biggest Water Fight in American History,” 80. 518 Metropolitan Water District, Twenty-sixth Annual Report, 147-149. At a continuous flow, 50 million gallons per day equals about 56,000 acre-feet per year. 221

time it was too expensive to produce.519 In 1959, MWD had contracted with a

consultant for a study of a desalting project.520 But by the early 1960’s, MWD and

SDCWA had taken no further steps in that direction. This was to soon change,

although the MWD majority and SDCWA were to have opposite opinions of the practicality of adding a large scale desalination project to MWD’s water resource arsenal.

President Kennedy’s administration was also interested in desalination.

Seawater could be converted into fresh water through more than one process, among

them evaporation, electrodialysis, and reverse osmosis, but in any case substantial energy and resultant cost were required to do the job. Federal officials believed energy could be generated economically through nuclear power, and for that reason desalination became a joint concern of the Department of the Interior and the Atomic

Energy Commission. At a congressional hearing in February 1963 Atomic Energy

Commissioner Robert Wilson suggested desalination for irrigation may be twenty years distant, but desalination for cities, which could afford greater cost, might be only ten or fifteen years in the future. Deputy Secretary of the Interior James Carr believed such projects could be commenced sooner.521 Indeed, the White House

Office of Science and Technology had commissioned a study that looked at nuclear- powered desalination on a huge scale. The study considered a potential site in

519 Hill et al., “Report on Water Supply for Probable Future Development in the San Diego County Water Authority,” 37. 520 Metropolitan Water District, Twenty-seventh Annual Report, 164. 521 “Desalinated Water Called 20 Years Off,” Los Angeles Times, February 22 1963. 222

Southern California in which a nuclear plant and desalination facility would produce

500 to 800 millions gallons of fresh water per day and enough additional energy to

serve one million people. At the time, the largest desalination facility in the world

produced only 2.4 million gallons per day. The study was headed by Roger Revelle of

the University of California and San Diego’s Scripps Institute of Oceanography.

Revelle stated that if the facility were built near Point Conception, the waste heat

pumped back into the ocean by the nuclear plant would raise water temperature about

20 degrees over a 40 mile long and one mile wide stretch of beach. Revelle saw the temperature change as a benefit, resulting in enormously increased use of the waters for swimming and fishing.522 Revelle did not consider, as today’s environmentalists

do, the adverse impact on the existing underwater habitat.

The growing federal interest in desalination drew a response from MWD, where the board of directors in April 1964 authorized a study of the possibility of

acquiring a site in Southern California for a sea-water conversion plant with a

150,000 acre-foot annual capacity.523 The work became a joint effort in August when

MWD, the Department of the Interior, and the Atomic Energy Commission

contracted to fund the study of the engineering and economic feasibility of a

522 Robert C. Toth, “Huge Atom Plant for Fresh Water, Power Possible in Southland by ’75,” Los Angeles Times, April 2, 1964. 500 million gallons per day at continuous flow equals about 560,000 acre-feet per year. 523 “MWD Orders Desalination Plant Study,” Los Angeles Times, April 15, 1964. 223

combination power and desalting plant using a nuclear energy source, with results

deliverable in 1965.524

The federal interest in nuclear powered desalination accelerated in July 1964,

when President Johnson declared every means should be explored to increase the

momentum of desalting progress, and evaporation was the best developed technology.

The president further directed the Interior Department to work with other executive

agencies to develop an action plan for that purpose.525 The next year, Johnson

directed that every resource of the federal government be employed to achieving a

rapid breakthrough in the economical desalination of sea water, not only for domestic

consumption but as a matter of foreign policy. 526

A possible nuclear power and desalination facility also attracted the attention of regional energy utilities. In April 1965, the Los Angeles Department of Water and

Power and two privately owned utilities, Southern California Edison and the San

Diego Gas and Electric Company, submitted a set of principles suggested as a basis for joint participation in a dual purpose nuclear power and desalination plant. 527

As interest escalated and a potential partnership was forming, MWD directors

in August 1965 enlarged the scope of its studies to include the utilities’ proposal for a

dual purpose plant and the possibility of constructing an artificial island to

524 Metropolitan Water District, Twenty-seventh Annual Report, 164-165. 525 “Desalination Haste Asked by Johnson,” Los Angeles Times, July 27, 1964. 526 Robert E. Thompson, “Johnson Orders Speed on Water Desalination,” Los Angeles Times, August 6, 1965. 527 Griffen, “Harry Griffen Manuscript,” chap. 6-6, 30. 224

accommodate it.528 At the same time, MWD created a directors’ Special Advisory

Committee on Nuclear Power and Desalting to spearhead the fast moving process. As

was his habit, Joseph Jensen placed himself on the committee. However, while Fred

Heilbron wanted a SDCWA representative on the committee, he gave the job to Hans

Doe. A fellow SDCWA representative at MWD, Harry Griffen, saw Heilbron’s

decision not to put himself in the forefront of an important issue as unusual.529

Indeed, such a move was contrary to Heilbron’s modus operandi, and perhaps an

acknowledgement at age 88 that he might need to slow down a bit.

The feasibility study continued apace, with MWD’s consultant, the Bechtel

Corporation, in December 1965 confirming the feasibility of a 150 million gallon per

day desalination facility. Bechtel also supported a plant site on a planned man-made

island offshore from Bolsa Chica State Park in Orange County, which came to be

known as “Bolsa Island,” on which a dual purpose plant similar to the one

recommended by the utilities could be constructed.530 Bechtel estimated the project

cost at $350 million, with cost sharing to be negotiated among MWD, the utilities,

and the federal government.531

Cost sharing received tentative agreement in August 1966 for a two-phase project. The cost to MWD was estimated at $117.7 million, the cost to the three utilities was about $257 million, and the federal contribution was set at $72.2 million.

528 Metropolitan Water District, Twenty-eighth Annual Report (Los Angeles, 1966), 151. 529 Griffen, “Harry Griffen Manuscript,” chap. 6-6, 34, 530 Ibid., chap. 6-6, 35-36. 531 Ray Hebert, “Island Favored as Site for Sea Water Facility,” Los Angeles Times, November 4, 1965. 225

The total project estimate was about $445 million.532 With the financials outlined, the

parties commenced contract negotiations and sought necessary legislation. Federal

legislation in 1966 and 1967 authorized participation by the Atomic Energy

Commission and the Office of Saline Water. In 1967, the California legislature

enacted a bill to provide MWD title to and easements in land required to construct a facility at the Bolsa Chica site. This included a grant of submerged offshore lands on which to build Bolsa Island and a causeway to the shore.533

On November 20, 1967, at a ceremony in Newport Beach, MWD signed two contracts, one with the federal agencies and the other with the three utilities, for joint participation in the Bolsa Island Nuclear Power and Desalting Plant. A newspaper

report treated the matter as settled and repeated the agencies’ respective contributions

toward the $444 million project. What the report did not mention was that the

contracts included an option to terminate in the event it was determined by any of the

parties that participation was uneconomical. 534

Not everybody at MWD was enthusiastic about the desalination project.

Although the Los Angeles directors were largely in favor, Joseph Jensen felt differently. Jensen believed the cost of seawater desalination was too expensive

compared to the cost of imported water, and that Colorado River and State Water

532 Ray Hebert, “Southland to Get World’s Largest Desalting Plant,” Los Angeles Times, August 10, 1966. 533 Metropolitan Water District, Twenty-ninth Annual Report, 164-166, 168-169; Metropolitan Water District, Thirtieth Annual Report (Los Angeles, 1968), 171. 534 Metropolitan Water District, Thirtieth Annual Report, 168-169; “Island Desalting Plant Contracts to Be Signed,” Los Angeles Times, November 19, 1967. 226

Project supplies would be sufficient until about 1990.535 SDCWA and its MWD

directors had the same concerns, adding that the project represented a technological breakthrough beneficial to the entire nation, and MWD should therefore not pay a

major cost for it. 536 The Jensen and SDCWA position was a departure, at least in part, from their basic attitude that the prospect of new water was a welcome development.

Jensen had earlier opposed the State Water Project, but observers believed his main

objection then was that MWD would lose control of the regional imported water supply. Here, MWD would own the converted seawater. SDCWA’s opposition may have been influenced by the ongoing shift from taxes to water sales as MWD’s main revenue source. As long as taxes were the primary source of MWD’s income,

SDCWA would contribute ten percent of revenues for twenty five percent of the water. Under the existing scenario, water that was expensive for MWD would not be so expensive for SDCWA. However, as MWD revenues continued to place greater emphasis on water sales, the SDCWA contribution would rise and the cost of new supplies would become more onerous. In any event, for Jensen and SDCWA, cost was now a more important factor.

Jensen intended to fight MWD’s participation in the desalination project and counted on SDCWA’s to support him in the effort. However, it gradually became

clear he could not hold his own Los Angeles delegation and that opposition was

futile. The project had the support of Los Angeles Mayor Sam Yorty as well as most

535 Ray Hebert, “Southland to Get World’s Largest Desalting Plant,” Los Angeles Times, August 10, 1966. 536 Minutes, SDCWA Board of Directors Meeting, July 14, 1966. 227

state and federal officials. Moreover, desalination was alluring. As Jensen described

it, “[w]hen I tried to make our directors discuss the matter with their agencies, they talked glamour; they didn’t talk money.” In the end, Jensen went along with the majority and ended his opposition to the project.537

The Los Angeles City Council also got into the mix, threatening to refuse to authorize desalination project contracts unless MWD guaranteed the city’s taxes would not increase. This was clearly an attempt by the council to force MWD to

hasten its shift to decrease taxes and increase the water rate, but the threat stung the

Los Angeles Department of Water and Power worse than it did MWD. A department

spokesman asked the council not to tie up its participation in the project with the

MWD tax and water rate policies. Urging approval of the project, the department

spokesman said the nuclear plant would provide power “at a price lower than any

other source now available” and help maintain low energy rates for city residents.538

Ultimately, the Department of Water and Power plea worked and the city council

approved the department’s participation. 539 As a parting shot, Councilmen Ernani

Bernardi and James Potter demanded that Mayor Yorty remove the Los Angeles directors from the MWD Board. Yorty refused.540

Project planning continued into 1968, but in April the participants revealed

that the cost estimate had increased from $444 million to about $765 million. The

537 Jensen, “Developing California’s Natural Resources,” 180-187. 538 Erwin Baker, “Council Foes to Fight MWD on Tax Hike,” Los Angeles Times, November 21, 1966. 539 “Council Favors DWP Role in Desalt Plan,” Los Angeles Times, March 1, 1967. 540 “Attack on Directors of MWD Hit By Yorty,” Los Angeles Times, January 25, 1967. 228

almost 75 percent rise was attributed to the failure of the 1965 estimate to calculate annual increases in the cost of labor, materials, and equipment, and design changes made after 1965.541 The added costs prompted a reevaluation of the project by MWD

and the utilities, with the potential that any of the parties might exercise the contract

termination option.

After due consideration, MWD for its part decided at a board of directors meeting on June 20, 1968, to continue participation in the nuclear plant and desalination project. The only significant opposition to the MWD action came from directors representing SDCWA, who all voted against further involvement. Joseph

Jensen, described as “lukewarm” to the project, abstained from the vote. At the same meeting, MWD agreed to extend the period during which the utilities could exercise their option to terminate until September 30. While Mayor Yorty declared the Los

Angeles Department of Water and Power was willing to continue, Southern

California Edison and San Diego Gas and Electric were less sure that, with the added

cost, the project made sense. Secretary of the Interior Udall, whose federal

contribution to the project was fixed, remained an enthusiastic supporter.542

Facing the prospect that MWD would drag SDCWA into a project it had opposed even before the cost estimate ballooned, SDCWA directors renewed their opposition and briefly considered but tabled a motion to institute legal proceedings

541 Ray Hebert, “$765 Million Cost Put on A-Power Plant,” Los Angeles Times, April 6, 1968. 542 Ray Hebert, “Water Leadership Gives Nuclear Plant Another Go-Ahead,” Los Angeles Times, June 21, 1968. 229

against MWD. 543 In July, Hans Doe laid out the SDCWA case against the project in an extended discussion with a local newspaper. Doe reiterated that additional water would not be needed until about 1990 and the cost of desalinated water would be

much higher than the cost of the current water supply. With the new estimate of $765

million, the MWD share had grown from $126 million to $217 million and the

utilities’ contribution had risen from $257 million to $487 million. Doe also said desalination techniques were developing so rapidly that the facility might be obsolete when it came on line. The impetus to keep the project going, Doe alleged, came from

Los Angeles where the Department of Water and Power still believed, because of the

tentative cost sharing arrangement, that the nuclear plant was its most economical

means of generating new power. Doe saw it as a situation in which the department would finance a nuclear plant with money provided by others. Orange County agencies continued to support the project, Doe maintained, because local government

could tax the portion of power facilities owned by the two utility companies.544

The project did fall apart per the wishes of SDCWA, but only because

Southern California Edison determined it no longer made financial sense. After a two

day meeting in Washington, all of the participants agreed to terminate their contracts,

although Edison reportedly was chiefly responsible for the decision. An Edison

spokesman stated the company would still support a feasible desalting project in

Southern California “even though increased costs of more than $300 million over the

543 Minutes, SDCWA Board of Directors Meeting, July 11, 1968. 544 Richard Sullivan, “County Fights Bolsa Island Project,” San Diego Evening Tribune, July 24, 1968. 230

1965 estimates makes the Bolsa Desalting Project as presently constituted

uneconomic.”545

Hans Doe hailed the contract terminations as “perfectly wonderful,” and

might at the time have considered the Bolsa Island Project a dead issue.546 That was not the case. In December 1968, the MWD Board of Directors decided the district would proceed with the planning of a nuclear-powered Bolsa Island facility on its own. At this point, the concept was a smaller expandable plant for which construction

would begin in the mid-1970s with water production by 1980.547 Proponents saw the

facility as a large demonstration project that would help determine the role of

desalination projects as water supply components “[l]ooking ahead to 1990 or 2000 or

beyond….”548 Joseph Jensen felt otherwise. In 1968, MWD was facing rising costs

not only at Bolsa Island, but also on the State Water Project and its own construction

projects. Jensen believed the financial issues were changing board sentiment

regarding a desalination facility, and he was “not optimistic” that the project would be

constructed within the next ten years.549

MWD’s bold decision to press forward with the Bolsa Island facility only meant the project would suffer a long, lingering death. At a November 1969 legislative hearing examining the wild miscalculation of costs, MWD maintained the

545 Rudy Abramson, “Orange County Desalting Plant Project Dropped,” Los Angeles Times, July 25, 1968. 546 “Bolsa Project Dropped,” San Diego Evening Tribune, July 25, 1968. 547 Metropolitan Water District, Thirty-first Annual Report (Los Angeles, 1969), 181. 548 Richard West, “MWD to Go Ahead on Coastal Desalting Plant,” Los Angeles Times, December 11, 1968. 549 Jensen, “Developing California’s Natural Resources,” 191. 231 project would continue, although as an observer noted, “…there is no program, other than vaguely expressed hopes, for anything to be done at Bolsa Island by MWD on its own.”550 In 1978, a Los Angeles Times reporter with apparently nothing else to do wrote a post-mortem on the project. He noted that MWD in 1972 had bought 82 acres of land near the never-built island to house support facilities. A MWD spokesman

“conceded that the Bolsa Island project is dead, but said the MWD will hold on to the land in the event water needs increase sharply in the next two decades. If the need increases, he explained, public pressure may be brought to restore the desalination proposal.”551 That public pressure has yet to materialize.

The Bolsa Island desalination project is a curious episode in the history of

MWD and its relationship with SDCWA. Contrary to prior and future positions,

SDCWA opposed a project that would have increased the water supply, and Joseph

Jensen was himself at best lukewarm to the proposal. The primary reason for their reluctance was project cost, along with a belief at the time that the State Water Project had solved water supply issues for the next few decades. SDCWA also suspected that the project masked a scheme by the Los Angeles Department of Water and Power to obtain a nuclear power plant paid for in part by the water agencies. At the least, the project provided the power utilities a convenient reason to build a new nuclear plant.

The fact that the MWD Los Angeles delegation and the department continued to back

550 Howard Seelye, “Was Public Misled on Cost of Bolsa Island?,” Los Angeles Times, November 23, 1969. 551 Ted R. Vollner, “Postscript: Bolsa Island Nuclear Desalting Plant: An Idea That Evaporated,” Los Angeles Times, March 24, 1978. 232

the project when the other participants backed away lends credence to the explanation

that for them, the project was attractive because it provided both water and power. In

the end, however, without the partners and with significant opposition in its own board room, the MWD desalination foray quietly died.

SDCWA Frustration over Preferential Rights Continues

Even with the promise of new supplies from the State Water Project, SDCWA

remained unhappy with the preferential rights formula in the MWD Act, claiming

contributions to revenues from the water rate should be included in the calculation

just as any other revenue source. The MWD General Counsel’s office conducted

analyses of preferential rights and its alleged inequities in 1965 and 1968.552

However, no action came from the MWD Board of Directors, either as a result of

those inquiries or the agreement between SDCWA and the Los Angeles Department of Water and Power in 1961 to support legislation for the inclusion of water sales in the preferential rights calculation.

All the while SDCWA was protesting the preferential rights formula in the

MWD Act, SDCWA’s enabling legislation, the County Water Authority Act,

employed the same formula in the calculation of its member agencies’ preferential

rights. That embarrassing hypocrisy was remedied in 1968, when San Diego

Assemblyman Pete Wilson carried a bill to amend the CWA Act. The bill eliminated

552 Flewelling, George F. Flewelling on the Metropolitan Water District Act, 49-53. 233

the exception of “money paid for water” from the preferential rights calculation, and

only detracted from the formula money paid for “operation expense.”553

The SDCWA action gained no traction in the attempt to change MWD’s preferential rights. In a MWD Board Executive Committee meeting in December

1971, SDCWA delegate Hans Doe referred to his agency’s change in the preferential

rights formula and noted that with increasing revenues from water sales, it was only proper MWD should follow suit. Doe also cited the 1961 agreement with Los

Angeles to support such a change, again to no avail. 554

Apparently tired of butting its head against a brick wall and with the prospect

of plentiful supplies from the State Water Project, the SDCWA effort to change the

MWD preferential rights formula went into relative dormancy. During the 1980s, however, as the likelihood of insufficient water supplies increased, preferential rights would again move to the head of the SDCWA priorities.

The Environmental Movement Challenges Water Developers

By the 1960s, the water barons of the west had been building their empires and fueling the growth of cities and agriculture for a century, almost always with the support of government and public sentiment. Dams and reservoirs and transmission pipelines were considered a good thing; the only controversies occurred over who held the water rights and how project costs would be paid. The best use of natural

553 San Diego County Water Authority, Twenty-second Annual Report (San Diego, 1968), 34. 554 Flewelling, George F. Flewelling on the Metropolitan Water District Act, 53. 234

resources was to employ them to achieve a more comfortable life for an expanding population. Fresh water emptying into the ocean was seen as wasted water, water that

should be used for industrial, domestic, and agricultural growth. While deploring what they considered the unnecessary destruction of natural resources, the

enlightened developers advocated the efficient use of those resources to serve mankind.

The environmental movement that accelerated in the 1960s included a large segment that wanted to preserve natural resources in their pristine state, not use them for some other purpose. In a few short years, the preservation ethic took hold in the

United States and fundamentally altered the way large water agencies like MWD and

SDCWA did business. Although there were signs the preservationists were on the

ascent in the 1950s and early 1960s, the water developers did not see the change

coming and were flabbergasted when it was upon them.

The water agencies had not always presented a united front for continuous

growth and more water. During the early years of SDCWA, Arthur Marston, a

director representing the city of San Diego, led a group that wanted to slow the pace

of annexation, fearing demand would outgrow the water supply. 555 With Fred

Heilbron at the helm, the Marston faction never prevailed. In any event, Marston’s cautious approach to growth was not primarily for the purpose of preserving natural resources, but rather to ensure growth would not outstrip available resources.

Motivated largely for the same reasons as Marston, a group of MWD directors was

555 Jennings, “William H. Jennings: Water Lawyer,” 89-90. 235 actually able to thwart annexation requests for a short period in the late 1940s, although they were soon overwhelmed by the pro-growth advocates.556

Preservationists gained a foothold in the debate over water development during the evolution of the Colorado River Storage Project Act, which was enacted by

Congress in 1956. The Sierra Club and other like-minded organizations conducted a successful campaign to prevent construction of a dam on the Green River at Echo

Park and Dinosaur National Monument, but at the cost of conceding a dam at Glen

Canyon. 557 Although the environmentalists later saw the sacrifice of Glen Canyon as a terrible mistake, the episode marked the first major role for preservationists in affecting water development policy. 558

In the mid-1960s, the preservation movement successfully opposed Stewart

Udall’s proposal as part of the Pacific Southwest Water Plan to bracket the Grand

Canyon with cash-producing hydroelectric dams. The cost, however, was a substitute coal-fired energy facility in the Four Corners area.

During the State Water Project debate in California that culminated in passage of the bond measure in 1960, the main sticking points were water rights and allocation of costs. Preservation of natural resources was not a determining factor.

That changed, however, as attempts were made to expand the State Water Project.

556 Oshio, “Urban Water Diplomacy,” 130-131. 557 Mark W. T. Harvey, “Echo Park, Glen Canyon, and the Postwar Wilderness Movement,” Pacific Historical Review 60, no. 1 (February 1991): 43-67. 558 Some 50 years earlier, John Muir and the Sierra Club had tried and failed to prevent the damming of Hetch Hetchy Valley in Yosemite National Park, which provided a water supply for San Francisco. 236

In October 1964, Governor Brown announced a grand plan to build a series of

dams over the next 50 years on rivers in water-rich coastal Northern California. The nine projects Brown envisioned, with 35 dams and reservoirs, would serve as an extension of the State Water Project and at build out provide 12 million acre-feet of annual yield. Of the 12 million acre-feet, ten million would be available to water- deficient areas, including urban Southern California. It was one thing, however, to announce a plan, and another to implement it.

Governor Brown’s Director of Water Resources, William Warne, knew additional water projects had to be built to provide the 4.23 million acre-feet of water

per year for which the State Water Project had contracted. By itself, Oroville Dam

would provide only about half the amount and for that reason the Burns-Porter Act contemplated the need for more storage and diversion capacity. After conducting studies and before he left office in 1966, Warne announced as the first additional project a dam on the middle fork of the Eel River at Dos Rios. 559 The project was to

begin construction around 1970, about the time Feather River supplies would be

ready for delivery. 560

The Burns-Porter Act also envisioned a delta bypass facility to move water

from the north end of the Sacramento-San Joaquin Delta to its south end, where the

State Water Project canal would carry the water to the Central Valley and Southern

California. By 1960, the delta, which connected with the San Francisco Bay on its

559 Warne, “Administration of the Department of Water Resources, 1961-1966,” 104-108. 560 Cooper, Aqueduct Empire, 260-261. 237

western side, had become home to extensive agriculture which used levies to protect

the land from flooding, and to an array of fish and wildlife. Officials had considered in-delta solutions to the water conveyance problem, which included some type of barrier on the delta’s west side to prevent seawater intrusion and manipulation of existing channels to move fresh water as required. All the in-delta proposals, however, would affect waterways, change tidal flows, and cause fish and wildlife problems. The state decided to proceed instead with the Peripheral Canal, a 42-mile unlined channel that would skirt the delta’s eastern edge. The canal was independent of existing waterways and, as it brought water down to the State Water Project on the south end of the delta, would have 14 freshwater release points that could help prevent seawater intrusion in the delta. For State Water Project contractors, the

Peripheral Canal, by avoiding the delta, would not subject project water to contamination from saltwater or agricultural runoff. When Warne authorized the

Peripheral Canal in March 1966, the state began buying up land, with construction scheduled to begin in 1967.561

Although State Water Project expansion seemed to be on track when

Governor Brown relinquished his office to Ronald Reagan in January 1967, problems

soon arose. As usual, Northern Californians thought Southern California was stealing

their water and were generally amenable to anything that might prevent the theft.

Other issues posed additional threats to expansion of the system. First, Governor

Reagan was a fiscal conservative who had campaigned against what he considered the

561 Scharz, A Water Odyssey, 133; Metropolitan Water District, Twenty-eighth Annual Report, 150. 238

runaway spending of the Brown administration. This included massive state-funded water projects.562 Second, the environmental movement was gaining momentum. 563

Financially, the Dos Rios project was a good deal for California. The federal government, through the United States Army Corps of Engineers, would build the

dam for flood control purposes, and the state would finance and construct the

conveyance system needed to deliver the water to the delta. However, in furthering

flood control, the dam and its reservoir would permanently inundate the pastoral

community of Round Valley, a prospect that sparked vigorous objections from valley

residents. Round Valley was home to about 1,200 residents, 400 of whom were

Indians whose ancestors had been forcibly removed to the valley in 1854. Opponents

argued Dos Rios was too far upstream on the Eel River to provide the promised flood

control, and that project negatives far outweighed any positives. In addition to

destroying the valley, the dam would ruin the Eel River and wipe out one of the

largest steelhead trout and salmon runs in California. As one of the locals put it,

“Why destroy Round Valley for the sake of Los Angeles?”564

The MWD family supported the Dos Rios project as the best way to augment

State Water Project supplies to satisfy contractors’ requirements.565 But on this issue,

MWD lost a heretofore key ally. In August 1968, the Los Angeles Times, which had a

562 Oshio, “Urban Water Diplomacy,” 223-224. 563 For an excellent and more thorough treatment of the impact of the environmental movement on MWD, see Oshio, “Urban Water Diplomacy,” “The 1970s: The Surge of Environmentalism,” pp. 240-285. 564 Charles Hillinger, “There’s No Peace in the Valley Amid Talk of Ruin From Dam,” Los Angeles Times, June 24, 1968. 565 Metropolitan Water District, Thirty-first Annual Report, xxxvi. 239

long record of supporting water projects for Southern California, editorialized that the

Dos Rios Project should be put on hold pending further study.566 As the debate over the project warmed, there was a decided tilt toward the environmentalist position. A local Round Valley group, Save the Eel River Association, drew support from nearly a dozen conservation-oriented organizations, including the Sierra Club and the

Planning and Conservation League. This level of environmental concern was new to

California. Ten years earlier, during the debate over the State Water Project and the

Oroville Dam, the discussion was almost solely focused on water rights and cost. But as the Times recognized, Dos Rios “finds Southern California pitted against

institutions that have grown enormously popular – conservation and preservation of

the environment.”567

While preservationism had become a big factor in the Dos Rios discussion,

cost was still a prime consideration. The Los Angeles Times suggested Dos Rios was

a “white elephant” that would cost the state more than it was worth, and urged the

Reagan Administration to closely examine its position on the project.568

On May 14, 1969, Governor Reagan decided to withhold approval of the Dos

Rios Dam project and ordered new studies on alternatives for meeting future water

demands. In making his announcement, Reagan emphasized not the project cost, but

566 “Dos Rios Dam Needs More Study,” Los Angeles Times, August 21, 1968. 567 Ray Hebert, “Dam Project Rekindles California ‘Water War’,” Los Angeles Times, March 17, 1969. 568 “Dam Project: A White Elephant,” Los Angeles Times, March 19, 1969. 240

rather his concern over the flooding of Round Valley. 569 In a post-mortem on the

governor’s decision, MWD attributed opposition to the project to “one principal

theme – the preservation of the environment.”570

Governor Reagan’s action did not rule out a future Dos Rios project; it merely

required further study of the alternatives. However, the momentum against

exploitation of the north coastal rivers was growing and in 1972 the state legislature

passed the California Wild and Scenic Rivers Act. The act prohibited development of

portions of certain rivers, particularly on the north coast, dimming prospects for new

water from that area.571

The Peripheral Canal also drew growing criticism after it was adopted as part

of the State Water Project in 1966. The canal was to be a joint federal-state facility, transporting California’s State Water Project supplies and water for the federal

Central Valley Project.572 Canal construction was at first delayed because the

incoming Reagan administration was short of project funding. Reagan and new

Department of Water Resources Director William Gianelli felt other facilities should

be built first so that deliveries to contractors could begin. They reasoned that the

canal could wait a few years. If Gianelli and his successor, John Teerink, had known

opposition to the Peripheral Canal would rapidly develop, they would probably have

started construction immediately. Reflecting on the delay, Teerink said “… if there

569 “Dam Proposal Rejected by Governor,” Los Angeles Times, May 14, 1969. 570 Metropolitan Water District, Thirty-first Annual Report, 126. 571 Oshio, “Urban Water Diplomacy,” 261-262. 572 Metropolitan Water District, Thirty-second Annual Report, 108. 241

were mistakes made on the state project, the outstanding one was delaying the

Peripheral Canal…. We didn’t know then the roadblocks we’d face….”573

Even if the state had committed money earlier to the Peripheral Canal, a congressional funding authorization was required if it was to be a joint federal-state project. Federal funding bills were introduced beginning in 1966, but failed of enactment repeatedly as environmental concerns increased.574

By 1970, progress toward beginning construction on the Peripheral Canal had

stalled. MWD stated at the time that the original opposition to the canal had come

almost entirely from people and organizations in the lower delta and the San

Francisco Bay area who had long opposed the State Water Project because it would deprive them of large flows of fresh water to flush out municipal and industrial wastes. However, in the intervening years canal opponents gained support from several groups concerned about the environment and the asserted damage that would be done to the bay-delta ecosystem.575 Congressman Jerome Waldie, representing a

district on the bay-delta, led opponents who found strength in the environmental cause. Responding to the argument that Southern California needed secure State

Water Project supplies, Waldie countered that the south actually had enough water, but because of the smog did not have sufficient air. According to Waldie, “[t]here’s no need to send water just to enable the population of Los Angeles to grow – the

573 Schwarz, A Water Odyssey, 135. 574 Metropolitan Water District, Twenty-ninth Annual Report, 150-151. 575 Metropolitan Water District, Thirty-second Annual Report, 108-109. 242

pressure ought to be the other way, to allow it to shrink until it can live with its air

supply.”576 Waldie may have been one of the first to suggest growth should be

controlled by limiting the water supply, but he would not be the last.

MWD and other Southern California water agencies were slow to appreciate

the threat posed by environmentalist opposition to the canal, and when they finally

did could not fully understand the nature of the threat. In January 1970, the MWD

Board of Directors launched a campaign to support the Peripheral Canal, charging opponents with making “wild distortions” about its impact on the delta. While acknowledging the need to combat the opposition, MWD at the same time trivialized

it, stating that a “few self-appointed ‘saviors of the delta’… apparently believe there is some temporary political advantage in blind opposition to the canal.”577 The

SDCWA Board of Directors, which was just as committed to the Peripheral Canal as

its MWD counterpart, pitched in with resolutions urging an early authorization.578

Canal supporters were able to retain the support of the state director of water

resources, and in April 1970 the Reagan administration notified the Bureau of

Reclamation that the state supported the canal and urged federal authorization for the

576 Philip Hager, “’Save the Delta’ Unit, State Clash Over Canal,” Los Angeles Times, January 18, 1970. 577 “Water Leaders Strike Back at Foes of State’s Delta Canal,” Los Angeles Times, January 27, 1970. 578 SDCWA Board of Directors, Resolution No. 1088, “Resolution Urging the Early Authorization of the Construction of the Proposed Peripheral Canal As a Part of the California Water Project, Either Jointly With Agencies of the Federal Government or Singularly by the State of California,” June 12, 1969; SDCWA Board of Directors, Resolution No. 1138, “A Resolution of the Board of Directors of the San Diego County Water Authority Urging Early Approval and Construction of the Peripheral Canal As a Part of the State Water Project,” February 13, 1970. 243

project.579 Governor Reagan himself asked for construction “as soon as possible,” but

cautioned that “not only the facility meet the needs of water users but also insure

enhancement and protection of the environment in the delta.”580 Despite the state’s

support, federal funding was not forthcoming.

To complicate matters for the water developers, new federal and state statutes

subjected large projects to legal scrutiny for their impacts on the environment.

Congress enacted the National Environmental Policy Act in 1969, and the California

legislature followed suit with the California Environmental Quality Act in 1970. Each

law required a detailed analysis of a project’s environmental impacts, measures to

mitigate those impacts, and project alternatives that would have a lesser impact. Other

laws gave protection to endangered and threatened species, wilderness areas, water

quality, and coastal areas.581 Violation of these statutes could result in government

action or citizen lawsuits to halt or modify a project.

MWD and its allies at first attempted to portray those who advocated environmental preservation as opportunists with hidden agendas, or as irrational radicals. In some cases, the charge of opportunism was well-founded. More water in the delta would protect agriculture in the area and help flush municipal and industrial waste. If those purposes could be achieved through the guise of environmental

579 Metropolitan Water District, Thirty-second Annual Report, 109. 580 Tom Goff, “Reagan Gives Support to Delta Canal Project,” Los Angeles Times, April 30, 1970. 581 Hundley, The Great Thirst, 310. 244

preservation, so be it. 582 Genuine preservationism, however, was harder for the

developers to understand. In 1967, former MWD General Manager Julian Hinds

described conservationists opposing dams as “just a matter of hysteria among people

who don’t want to see anything disturbed.”583 Former Governor Pat Brown, who supported the Peripheral Canal as essential to his State Water Project, said “the misguided opposition of these few people must not be allowed to succeed.584

Assemblyman Robert Badham of Orange County labeled canal foes as

“ultraconservationists.”585 State Director of Water Resources William Gianelli attacked environmentalists as emotional doomsayers. Speaking to his soul mates at the Irrigation District Association convention, he pleaded, “Let us not fall into the

quagmire trap of Chicken Little emotionalists who tell us we have to bring

development to a full stop in this state because we’re desecrating our

environment.”586 Former Director of Water Resources William Warne compared

“virulent environmentalism” to an infectious disease determined to root out the ethic

of growth from the American culture.587

While describing the preservationists as emotional alarmists, the water

agencies attempted to cast themselves as the real environmentalists. SDCWA General

582 Oshio, “Urban Water Diplomacy,” 253; Ray Hebert, “Water Project Foes Assailed on ‘Deception’,” Los Angeles Times, August 18, 1970. 583 Hinds, “Western Dam Engineer – Julian Hinds,” 210. 584 Jerry Gillam, “Water Project Seen Doomed Without Canal,” Los Angeles Times, February 5, 1970. 585 “Badham Sees Threat to State Water Project,” Los Angeles Times, March 28, 1970. 586 Laurence J. Kirshbaum, “Coming Out in the Wash: A Report on the California Water Controversy,” Los Angeles Times, July 19, 1970. 587 William E. Warne, “An Editorial: Virulent Environmentalism,” Public Administration Review 30, No. 3 (May – June 1970): 327-328. 245

Manager Linden Burzell described their position at a hearing before the California

Water Commission:

“The Water Authority considers that water development in California

has improved the environment in almost every case of record.

Certainly the changed conditions after construction of dams and

waterways favor some species of fish and animals over others;

frequently some species decrease in number. However, recreational

activities including fishing, hunting, boating, etc., invariably increase

on the developed water indicating a net environmental improvement

for both man and wildlife.”588

Burzell was not creating a new version of environmentalism. Rather, he was echoing the old progressive philosophy that government should use the resources at hand to improve the life of its citizens. The goal was efficient utilization, not preservation.

Joseph Jensen, the embodiment of water development, reportedly felt personally affronted by the environmentalist threat to his liquid empire. Discussing his water plans with a Los Angeles Times writer, Jensen pointed to a map of desert terrain in Riverside County and said, “Some day there will not be just irrigated farm land, but gleaming cities like Los Angeles…. Isn’t that ecology, to make the desert

588 San Diego County Water Authority, Comments: Hearing Before California Water Commission, Department of Water Resources Bulletin No. 160-70 (May 6, 1970), SDCWA archives. 246

bloom like a rose?”589 Ecology, as Jensen was painfully aware by 1970, was in the

eye of the beholder.

Not every water agency official was impervious to the arguments of the

preservationists. At a Colorado Water Commission meeting where William Gianelli

continued his call to “counter the emotional persuasion and deceits” of ecologists and

conservationists, Commissioner and SDCWA General Counsel William Jennings was

not so dismissive of the environmental position. Jennings did not want the State

Water Project halted, but he suggested there might be some merit to the

conservationists’ arguments. He wanted to find out “where we are wrong in the minds

of so many people” and “seek necessary changes.”590

Perhaps in response to Jennings’ wishes, the SDCWA Board of Directors created an environmental subcommittee of its Water Problems Committee in March

1970. The subcommittee’s charter to “examine and explain the part that the Water

Authority and its agencies have played in enhancing the environment in the county” was self-serving and presumptive. On a more substantive note, the subcommittee was charged with “gaining understanding of what has been done and will be done in matters which affect the environment….”591

Finally, the water establishment began to take the environmental “threat”

seriously. In August 1971, MWD retained environmental consultants to assist in

589 Laurence J. Kirshbaum, “Coming Out in the Wash: A Report on the California Water Controversy,” Los Angeles Times, July 19, 1970. 590 Beverly Beyette, “State Officer Appeals For Water Project,” San Diego Union, January 10, 1970. 591 Minutes, SDCWA Board of Directors Meeting, March 12, 1970. 247

“identifying, avoiding and solving environmental problems.”592 This development

came none too soon, as environmental groups had begun to sue government agencies

over water quality in the delta and elsewhere, and any future major public project

would require intensive environmental analysis and public participation before it

could be implemented, if at all. By the early 1970s, it should have been clear to any

perceptive water agency official that environmental compliance and limitations were

henceforth going to occupy a formidable and growing portion of directors and staff’s

time and efforts. It should also have been apparent that the halcyon days of giant

water projects as hallmarks of a utopian society were over. Just how much things had

changed would become evident as the fight for the Peripheral Canal proceeded into

the 1980s.593

Reevaluating Population Growth and Water Requirements

By 1970, MWD and SDCWA had far outgrown their original boundaries and populations. In 1970, the MWD service area encompassed 4,800 square miles, and its population in the previous ten years had risen from 7,834,000 to 10,200,000.

SDCWA covered 1,177 of those square miles, and its population had increased from about 985,000 to 1,310,000.594 With population growth in both agencies exceeding

thirty percent during the 1960s, an uninformed observer might well assume that

592 Oshio, “Urban Water Diplomacy,” 251. 593 For a series of excellent case studies on the impact of environmentalism on water projects in California and the West, see Hundley, The Great Thirst, 308-461. 594 Metropolitan Water District, Thirty-second Annual Report, xl. 248

projections of future water needs should be revised upward. The opposite, however,

occurred.

A MWD staff study made public in October 1970 forecast that water from the

State Water Project and the Colorado River would be sufficient to meet district needs

until the year 2010 or 2020, about 20 or 30 years longer than previously thought. The

lower anticipated water requirements were due primarily to a recent substantial drop

in the rate of migration into the area, perhaps even to the point of a higher out-

migration. MWD attributed the diminished allure of Southern California in 1971 to

increasing population density, air pollution, the rise of unemployment, and fears

engendered by a February 1971 earthquake. Along with a lower population, the staff

noted a trend away from single-family houses to apartment living, resulting in less

water use per capita. Additionally, the planning and construction of the Central

Arizona Project had been delayed for several years, leaving MWD with surplus

Colorado River water for a longer period. As a result of the downward forecast, the

MWD Board of Directors deferred by as much as 12 years completion dates for several major projects needed to distribute State Water Project supplies. 595

The revised forecast was an abrupt change for an agency that had constantly beat the drum for more water. As noted by a Los Angeles Times reporter, “The new outlook marks a reversal of the doomsday attitude that has prevailed among many

595 Metropolitan Water District, Thirty-third Annual Report, xxxiii, 75-76. 249

water officials for the past decade.”596 Conveniently, the lower projections and

continued assurance of a full Colorado River Aqueduct took pressure off the need for

early completion of the Peripheral Canal and Dos Rios Dam, both of which by 1971

were experiencing increasing resistance from environmentalists.597 In later years,

water officials would regret the less urgent attitude taken toward these two projects. If

they had hoped the opposition would eventually die down, they were mistaken.

The slowing of construction eased the need for district revenues at a time when the battle over taxes or the water rate as the primary source of funding was again heating up. The reduction in revenue requirements may have had some softening effect on that struggle, but could not long delay the showdown that would come in the next few years.

Fred Heilbron and Joseph Jensen Bow to the Inevitable

Neither the MWD Act nor the CWA Act provided for a Chairman of the Board for

Life, but for Joseph Jensen and Fred Heilbron, that is how it worked out. Both were reelected biennially with little, if any, opposition, even when the infirmities of old age impaired their leadership abilities.

After his successful fight for immediate construction of the east branch of the

State Water Project ended in 1964, Heilbron became less and less the face of

SDCWA at the MWD Board of Directors. He was still active at MWD in the mid-

596 Ray Hebert, “Outlook Changes: More Water Than Needed for 50 Years,” Los Angeles Times, October 25, 1970. 597 Ibid. 250

1960s, opposing the high annexation fees proposed by Chairman Jensen and pushing

MWD participation in San Diego’s fourth pipeline.598 And even in his 90s, Heilbron sought new sources of water for Southern California. In a 1968 interview, he

supported the Pacific Southwest Water Plan and talked of a new aqueduct that would

be needed around 1990, when he would turn 113.599

But Fred Heilbron was slowing down. His lieutenants, Hans Doe and Harry

Griffen, took on increasing roles, with Doe often acting as the spokesman for

SDCWA interests. In January 1970 Heilbron relinquished his position as Secretary of

the MWD Board, stating, “I have decided that the time has come for me to retire,

having reached retirement age of 92.”600 He did not, however, give up his offices as a

MWD director or as Chairman of the SDCWA Board, and stayed in those positions

until he died.

At SDCWA, Heilbron remained chairman but was increasingly less able to

run the operation. General Manager Linden Burzell described Heilbron’s decline:

…[A]s he got into his ‘90s, there were times when he was slipping,

and he wouldn’t give up the job. It made it easier for me, in a way. I

was able to move faster, you know, on things that needed action, but it

bothered me to have our leader not able to get around. He went into

his last illness, and still never gave up the job. Nobody had the guts to

598 Linden Burzell, “An Interview with Linden Burzell,” 5. 599 “’Mr. Water’ Won Battle,” San Diego Tribune, March 8, 1968. 600 “Heilbron, 92, Resigns Post As Water District Secretary,” San Diego Union, January 14, 1970. 251

say: “We need a new chairman.” It was a sad time for the Water

Authority….601

Heilbron’s persistence in keeping his job may have been sad, but nevertheless predictable. It was in his nature. Death finally came at age 95 on February 14,

1973.602

Joseph Jensen, Heilbron’s sometime collaborator and sometime nemesis, lasted a little longer, but then he was still a youthful 86 in 1973. Unlike Heilbron,

Jensen remained the voice of his agency and of MWD’s Los Angeles directors into the early 1970s. Ironically, most of Jensen’s squabbles near the end of his life were not with long-time foes such as the state Department of Water Resources and

SDCWA, but with the Los Angeles City Council. The council, which was increasingly discontented with what it viewed as an inordinately slow process to move the bulk of MWD’s revenues from property taxes to the water rate, badgered

Jensen repeatedly to lower the tax rate. At a council meeting in August 1972, Jensen appeared to respond to demands that the MWD tax rate be lowered from 17 cents to

13 cents per hundred dollars of assessed value. Jensen asked the council to allow the

Los Angeles directors to support a reduction to 16 cents, which was refused.

Councilman Bernardi, who was making a career of fighting the MWD rate structure, even threatened to initiate proceedings to remove the city from MWD membership if the council’s demands were not met. Jensen, who was not known for his humility,

601 Linden Burzell, “An Interview with Linden Burzell,” 26. 602 “Mr. Water’s Lifetime of Service Ends,” San Diego Tribune, February 15, 1973. 252

conceded that he would “kiss the book” if ordered by the council and vote for the 13

cent rate. At the same time, he asked for the freedom to vote otherwise and suggested

the council “punish me some other way,” noting he could be removed when his

current term as director expired. In response to Jensen’s handwringing, Councilman

Lorenzen replied, “I bleed for you, Joe. You never pay any attention to us

anyway.”603 At the next MWD Board meeting, Jensen and the other Los Angeles

directors dutifully voted for the 13 cent tax rate, but when that failed voted with a

unanimous board of directors for a 15 cent rate.604

Compared to his problems with the Los Angeles City Council, Jensen’s final years with his fellow MWD directors were downright collegial. However, the infirmities of old age caught up with Jensen just as they had with Fred Heilbron.

Although still at the helm at the beginning of 1974, Jensen could not maintain his grip on the MWD Board and a leadership vacuum developed. Fellow director and Jensen protégé E. Thornton Ibbetson recalled later, “During those last years, he [Jensen], like so many of us, had trouble letting go. He had been an institution for so long. Out of respect for him, we didn’t push for a new chairman.”605 Under those circumstances,

which were sadly similar to the final days of Fred Heilbron at SDCWA, Joseph

Jensen died on July 8, 1974, at age 87.

603 Erwin Baker, “City Urges $5 Million MWD Refund to Users,” Los Angeles Times, August 10, 1972. 604 Ray Hebert, “Water District Cuts Tax Rate 2 Cents, Rejects Further Trim,” Los Angeles Times, August 19, 1972. 605 Gottlieb and FitzSimmons, Thirst for Growth, 18. 253

Endings and Beginnings

One month after Joseph Jensen died, MWD welcomed its first woman director. On

August 20, 1974, Katherine Dunlap, an incumbent on the Los Angeles Board of

Water and Power Commissioners, took her seat on the MWD Board as a member of the Los Angeles delegation that had so recently been Jensen’s domain. 606 By the end

of 1976, three more women had been appointed to the board, two of whom were

Hispanic. 607

At SDCWA, Edith Kamm had served as a director representing the city of San

Diego since 1965. When Katherine Dunlap was appointed to the MWD Board,

SDCWA already had three female directors, each representing the city of San

Diego. 608 SDCWA’s first African-American director was appointed in 1977, again a city of San Diego representative, but Hispanic surnames were still lacking in the boardroom.609

Although ethnic and sexual diversity were slow to penetrate the water boards,

it was happening. It was also dawning on some directors that the environmental

movement had fundamentally changed their world, while others continued to press for more and bigger water development projects. These varying backgrounds and opinions would make for more internal controversy and complexity, which would be

606 Metropolitan Water District, Thirty-seventh Annual Report, (Los Angeles, 1975), xv; Erwin Baker, “3 Bradley Appointees to Water Boards OKd,” Los Angeles Times, August 1, 1974. 607 Metropolitan Water District, Annual Report Appendix-1977 (Los Angeles, 1977), xv-xvi. 608 San Diego County Water Authority, Twenty-eighth Annual Report (San Diego, 1974), 6-7. 609 San Diego County Water Authority, Thirty-first Annual Report, (San Diego, 1977), 7. 254

compounded by the fact that there was no Joe Jensen or Fred Heilbron in charge to work his will. In fact, the directors had seen to that by adopting internal rules limiting

the tenure of future board chairmen (and chairwomen). In the four decades since

Jensen and Heilbron’s deaths, MWD Chairmen have served as long as six years, but no SDCWA Chairman has exceeded a single two-year term.

In 1991, five MWD directors who each had served over 20 years were asked how the district and its governing body had changed during their service. They were survivors of a time when the board of directors was a homogenous group of middle aged to elderly businessmen who, if not always in agreement, were cut of the same cloth. To a man, these “water buffalos” longed for the days when “politics” did not obstruct their efforts to obtain more water to facilitate growth. Of course, politics had always played a large part in the world of water, but until the environmental movement changed the playing field, almost everyone conformed to their way of thinking. For the old men who had earlier built great projects to the applause of their fellow citizens, the altered political landscape was cause not for greater resolve, but for melancholy. 610 Their time was past, and the water districts beginning in the 1970s

would have to rely on fresher minds to keep the water supply in sync with growth.

Although the boards of directors at MWD and SDCWA were slowly

becoming more racially, sexually, and ethnically diverse, that did not mean the

mission to supply whatever water supply it took to meet demands had changed.

Indeed, it had not. Directors were still appointed by the member agencies, and above

610 Schwarz, A Water Odyssey, 202-207. 255

all they wanted their water. The individual self-interest inherent in each of the

member agencies would also guarantee the continuation of internal struggles at MWD

over cost apportionment and rights to the water supply during times of shortage. What

the new faces did bring was a fresh outlook on how the water supply might be obtained and recognition that the challenges of environmentalism and increasing competition from other water users were not just passing fads. Even some of the old guard directors adapted to the new situation, but increasingly the district would have to rely on their employees to deal with the new complexities of finding sufficient water. Such was the case as MWD and SDCWA headed into the mid-1970s. 256

Chapter Five

Consensus and Conflict: Adjusting to a Limited Water Supply 1975-1985

As the 1970s went on, the lack of progress on the Peripheral Canal and on obtaining

additional sources of supply gave even the optimistic water buffaloes cause to doubt

whether the State Water Project would ever operate at full capacity. To compound the

problem, it was only a matter of time before the Central Arizona Project would deprive California and MWD of the surplus water needed to fill the Colorado River

Aqueduct. In short, the specter of future imported water shortages loomed over urban

Southern California.

Concerns over the water supply did not stem the constant rise in water deliveries to MWD member agencies. In fiscal year 1975, MWD delivered about 1.33 million acre-feet of water to a population of 10.83 million constituents. Of that total,

the SDCWA service area contained 1.49 million people, or about 13.8 percent.

However, SDCWA bought 378,000 acre-feet of water from MWD, about 28.4% of

district deliveries. Yet SDCWA had only 13.4 percent of the vote on the MWD Board

of Directors and a similar preferential right to the district supply in the event of a

shortage.611

611 Metropolitan Water District, Thirty-seventh Annual Report, xxxii, xxxiv, 25-26. 257

1976 and 1977 saw an episode of drought during which the prospect of a limited water supply was felt even more keenly. Although the drought lifted before any serious damage was done and a formal resort to preferential rights was avoided, it left a deep impression, particularly on SDCWA.

The threat of inadequate imported water supplies stimulated an expansion of the agencies’ functions. Through the 1950s, MWD’s imported water competed with local water supplies, and the district kept its water rate low in large part to attract purchases. By the 1980s, MWD and SDCWA realized that with limited imported water, local water must again play an integral part in the total supply picture. To encourage the increase of local supplies, the agencies added staff with expertise in water development, conservation and storage, and began subsidizing projects by

member agencies. The agencies’ mission of providing an adequate water supply for its growing population had not changed. The means of providing that water supply had just become more complex and more difficult.

The battle the city of Los Angeles had waged since 1960 to shift the burden of

raising MWD revenues from the tax base to the water rate continued with even

greater determination. The Los Angeles offensive traveled from the courts to the state

legislature and ultimately meant that San Diego would pay a larger share of MWD costs. Rather than fight Los Angeles head on, SDCWA policymakers at MWD

worked diligently within the boardroom to build relationships and exploit alliances

with similarly situated member agencies. Their strategy was partially successful, as

San Diego representatives played a major role in formulating a new compromise 258

methodology for apportioning revenues among taxes and the water rate in the wake of

the Los Angeles lawsuit. That hard work, however, would be largely undone by a Los

Angeles state legislator who used a seemingly innocuous bill to mandate an even

harder shift away from taxes.

SDCWA reluctantly acceded to a higher water rate but, with the threat of shortages rising, renewed its own decades-long struggle to change the MWD formula

for determining preferential rights. That struggle was to result in bitterness and

frustration, and for the first time an effort by SDCWA to obtain an independent water

supply to augment its MWD resources.

Hans Doe and Harry Griffen Carry SDCWA Interests at MWD

Upon Fred Heilbron’s decline and demise, SDCWA relations with MWD were

conducted mainly by his protégés and chosen successors, Hans Doe and Harry

Griffen. At the time of their ascension, they were not young men. Doe was born in

1903 and Griffen in 1907. Heilbron had put Doe on the MWD board in 1959,

followed by Griffen in 1963, where they were able to watch Heilbron while he was

still in full vigor. As Heilbron’s abilities diminished, Doe increasingly became the

voice of SDCWA at the district.

While loyalty to Heilbron had been the primary criterion for continuation in

office, things became more complicated for Doe and Griffen after their benefactor

died. Neither of them represented the city of San Diego on the SDCWA Board of

Directors; Doe came from the Bueno Colorado Municipal Water District in a rural 259

and suburban portion of the north county, and Griffen represented the Helix Water

District east of the city. However, since the city had 50 percent of the board’s total

vote, Doe and Griffen could operate only with the approval of SDCWA’s largest member agency. Within the SDCWA governing structure, there would not be a second Fred Heilbron. After Heilbron, no director has ever served more than one two- year term as board chairman, making the establishment of a lasting power base within that office impossible.

At MWD and SDCWA, Doe was considered the authority on policy and planning while Griffen focused on finances. Those functions often intermingled, and

Doe and Griffen sometimes clashed. General Manager Linden Burzell observed that

“Hans Doe and Harry Griffen were very, very competitive.” They each had a penchant for power and control, which they exercised liberally. 612 Nevertheless, they

could work together. At a tribute for Doe after he died in 1988, Griffen stated:

… [I[t was the general opinion that we were not the closest of friends.

To the contrary, we shared an unusual amount of respect for each

other. We shared the same philosophical objectives, but we attempted

to achieve those objectives in a vastly different manner. I was

aggressive and pushed the objectives relentlessly. Hans was a

diplomatic statesman offering compromise and appeasement to make

612 Linden Burzell, “An Interview with Linden Burzell,” 25, 27-28, 33-36. 260

everyone happy. Actually, we worked as a team. I shot the enemy

down, and Hans would come along and heal the wounded.613

However they personally perceived their uneasy alliance, Doe and Griffen bolstered

SDCWA’s influence at MWD by forming partnerships with expanding agencies in

Orange and Riverside counties that formed the “growth bloc” of MWD into the

1980s. This group ensured that MWD continued to support expansion of the State

Water Project and pushed for the construction and favorable location of distribution and treatment facilities to serve their areas.614 Doe and Griffen were less successful in treating issues that directly affected the cost and reliability of SDCWA’s water supply: the shift of MWD revenues from tax levies to the water rate, and the formula for determining a member agency’s preferential rights. Ultimately, these failures would contribute to the emergence of a new SDCWA policy group in the 1980s.

Los Angeles Sues to Lower Taxes and Raise the Water Rate

By 1975, the Los Angeles City Council and Councilman Ernani Bernardi in particular were thoroughly dissatisfied with what they perceived as MWD’s sloth in shifting the bulk of its revenues from tax receipts to water sales. By this time, the council had the full support of Mayor Tom Bradley, who in March urged an immediate inquiry into the matter with a view toward possible court action. Bradley noted that Los Angeles paid 22 percent of MWD’s tax revenues but bought less than five percent of the

613 Kyle Emily Ciani, “A Passion for Water: Hans H. Doe and the California Water Industry,” Journal of San Diego History 39, no. 4 (1993). 614 Gottlieb and FitzSimmons, Thirst for Growth, 35-36. 261

district’s water, owing to Los Angeles’ Owens Valley supply. He further alleged that

MWD was in violation of a MWD Act mandate to raise revenues through the water

rate and district Resolution No. 5821, adopted in 1960 to shift revenues away from

taxes to the water rate as a condition of the city’s support for the State Water

Project.615

The dispute climaxed in August 1975 when MWD was to set the tax rate for

1976. Before the MWD Board met, the Los Angeles City Council voted unanimously

to authorize a lawsuit if the district continued its alleged discrimination against the

city. Meanwhile, the MWD Board’s Finance Committee recommended a tax rate of

13 cents per hundred dollars valuation, a one cent decrease from the existing rate.616

With the threatened lawsuit before it, the board of directors adopted the 13 cent rate over the objection of the Los Angeles directors, who wanted a lower rate. Board spokesmen called the Los Angeles allegations of discrimination erroneous, claiming city taxpayers “are getting their money’s worth if not in an actual water supply then in services, as well as in the insurance of having a massive water supply they can depend on in an emergency.”617 The MWD statement echoed the argument SDCWA

had made for many years. Hans Doe, now a vice-chairman of the MWD Board, reiterated San Diego’s stand, claiming the threatened suit did not take into account

MWD’s massive investment in water facilities. According to Doe, “… customers not

615 Erwin Baker, “MWD Accused of Illegal Tax Charges,” Los Angeles Times, March 21, 1975. 616 Erwin Baker, “Council Vote to Sue MWD if Tax Rate Is Too High,” Los Angeles Times, August 19, 1975. 617 Kay Cooperman, “MWD Ignores Threat of Suit, Sets Tax,” Los Angeles Times, August 20, 1975. 262

only pay for the water, they pay for MWD’s capacity to bring them water at any

time.”618

In September 1975, the city of Los Angeles filed its lawsuit against MWD,

asking the court to rescind the district’s rate structure and order it to raise revenues on

a “pay-as-you-go” basis; in other words, through the water rate.619 In addition to the

attack on taxes, the complaint contested the MWD practice of charging a lower rate for water used for agriculture and local replenishment. Although MWD member agencies and sub-agencies had an opportunity to participate as co-litigants, SDCWA stayed out, apparently because it trusted MWD to advocate a position compatible with its own. Two SDCWA member agencies with large purchases at the agricultural discount rate, Rainbow Municipal Water District and Otay Municipal Water District, did join the lawsuit. In fact, about 25 percent of the water SDCWA bought from

MWD was at the cheaper agricultural rate.620

The Los Angeles lawsuit lumbered along for two years, when at last the court

set a trial date for September 19, 1977. A month before the trial was to start, the

parties settled the case. Although MWD retained a discount rate for agriculture and

replenishment deliveries, Los Angeles otherwise got what it wanted. The settlement

agreement required MWD to adhere to the formula of Resolution 5821, which

618 “LA threatens water suit,” Vista Press, August 24, 1975. 619 Myrna Oliver, “Suit Seeks To Force Change in MWD’s Rates,” Los Angeles Times, September 18, 1975. 620 Paul D. Engstrand, SDCWA General Counsel, memorandum to Legal and Claims Committee, November 6, 1975, SDCWA archives; Paul D. Engstrand, SDCWA General Counsel, letter to Board of Directors, San Diego County Water Authority, with attached Memorandum from Wallace R. Peck dated October 13, 1976, October 14, 1976, SDCWA archives. 263

required that water sales revenues pay all operating and maintenance costs of the district, and one-half of capital costs. The remaining half of capital costs could be

paid through taxes.621

Because it was by far the largest purchaser of MWD water and had a

relatively small tax valuation, SDCWA was arguably the member agency most

adversely affected by the settlement. Yet SDCWA took no independent role in

MWD’s defense and supported the settlement when it came before the MWD Board

of Directors.622 This seeming indifference might be explained by two factors. First, in

limiting tax revenues, Los Angeles was only enforcing what had been promised by

Resolution 5821 fifteen years earlier. Second, the settlement allowed retention of the

agricultural discount rate, which was important to several SDCWA member agencies.

What is surprising is that SDCWA, in the face of escalating water rates, did not renew

its efforts to change MWD’s preferential rights formula to include revenues derived

from water sales. SDCWA would fight for a preferential rights change again, but the

next installment in that saga would not come until the 1980s.

The fight over apportionment of revenues between the water rate and taxes

would also reappear. The MWD Board still had to decide in accordance with the

settlement how to implement Resolution 5821 or whether to adopt a new

621 Robert P. Will, MWD General Counsel, letter to MWD Board of Directors, regarding City of Los Angeles, et al. v. Metropolitan Water District, et al. with attachments, August 10, 1977, MWD archives. 622 Minutes, Adjourned Regular Meeting of the MWD Board of Directors, August 19, 1977. 264

apportionment formula. Even after the board approved a new methodology, Los

Angeles would pursue further restrictions on taxes outside the MWD boardroom.

The Drought of 1976-1977 Threatens Water Supplies

The 1975-1976 water year (measured from October 1 through September 30) was one

of the driest in recent times, particularly in Northern California.623 Although the State

Water Project cut back surplus deliveries, at first it was of no great concern as there was still water in storage and Colorado River supplies were limited only by the capacity of the aqueduct. As the dry spell continued, MWD curtailed the delivery of replenishment water to its member agencies. MWD General Manager John Lauten emphasized, however, that he foresaw no water shortages for urban or agricultural use.624 Things got more uncertain in August when the trial court in an environmental

lawsuit between the city of Los Angeles and Inyo County curtailed the city’s

pumping of underground basins in the Owens Valley, limiting deliveries from the Los

Angeles Aqueduct. MWD officials recognized the decision might force Los Angeles

to buy more water from MWD, but again the problem was shrugged off. According to

MWD Assistant General Manager David Kennedy, “I don’t anticipate any problem.

There’s enough coming from the State Water Project and even if we run out of that, there’s still that Colorado River water.625

623 Metropolitan Water District, Annual Report Appendix – 1976 (Los Angeles, 1976), xxvii. 624 “Subsurface Water Curtailed By MWD,” Los Angeles Times, July 14, 1976. 625 Robert A. Jones, “No Shortage Expected in Order for Water Cutback,” Los Angeles Times, August 20, 1976. 265

As the drought wore on into 1977, SDCWA assured its customers there was nothing to worry about. At the end of January, local rainfall was slightly above normal as was storage in area reservoirs, and reservoirs in the lower Colorado River basin were at 130 percent of normal, ensuring no shortage of supplies from the

Colorado River Aqueduct. According to the Authority’s Bob Miner, “[S]an Diego is one of the few areas of the state with plenty of water and no prospect of rationing or a shortage in the foreseeable future.”626 Officials at MWD, on whom SDCWA relied for the bulk of regional supplies, had by this time become less sanguine.

In February 1977, MWD increased its deliveries from the Colorado River

Aqueduct and virtually stopped taking State Water Project supplies in order to leave what little that source could provide to the water-starved farms in Northern and

Central California. Before the shift, MWD had planned to take its yearly total of about 1.4 million acre-feet in equal shares from the two sources. By March 1, all nine pumps taking Colorado River water out of Lake Havasu were operating around the clock and the aqueduct was carrying water above its rated capacity. At the same time,

MWD and its member agencies, including SDCWA, urged their customers to curtail water use. Despite the plea, water demands in the MWD service area grew. Having failed at moral persuasion, the MWD Board of Directors adopted a surcharge of 100 percent on water delivered in excess of 90 percent of 1976 levels, and a 20 dollar credit for each acre-foot delivered under that amount. 627

626 Bill Parry, “S. D. County Has Plentiful Water Supply,” San Diego Union, January 30, 1977. 627 Metropolitan Water District, Annual Report Appendix - 1977 (Los Angeles, 1977), 57-60. 266

As MWD imposed economic penalties and incentives, General Manager

Lauten said that unless water use was reduced by at least ten percent, the district

would be forced to impose mandatory water rationing. Lauten did not say how a rationed water supply would be divided among the member agencies; he merely stated it would be up to the MWD Board of Directors.628 The prospect of MWD

rationing water set off alarm bells for SDCWA General Counsel Paul Engstrand, who

warned that the impact on the San Diego region could be particularly devastating.

With the Owens Valley water curtailed by the courts, Los Angeles was poised to

dramatically increase its draw on MWD at a time when the district was already hard-

pressed to meet demands. If Los Angeles demanded more MWD water, it could

invoke its so far dormant preferential rights to the detriment of agencies that were

then using water in excess of their preferential rights. 629 Because of the court ruling,

Los Angeles expected to receive only 200,000 to 250,000 acre-feet from the Owens

Valley, when it had been taking about 450,000 acre-feet. With a preferential right to one-third of the MWD supply, Los Angeles could make up the entire shortfall

through increased purchases from the district. On the other hand, SDCWA, which

supplied 90 percent of the total water supply to its service area, bought about 400,000

acre-feet of water annually from MWD, but had a preferential right to only 120,000

acre-feet. To compound the problem, MWD General Manager Lauten was not entirely correct when he stated that rationing allocations would be decided by the

628 “Fee on water called plan to skirt rationing,” San Diego Evening Tribune, March 31, 1977. 629 Minutes, SDCWA Board of Directors Meeting, April 14, 1977. 267

MWD directors. Preferential rights were guaranteed by the MWD Act and the board of directors had to act within its confines. For Engstrand and others at SDCWA who

had failed to have MWD revise its preferential rights rules over the years, the

chickens were apparently coming home to roost.630

The San Diego citizenry did not immediately appreciate the situation and in

April 1977, the first month of the MWD economic incentives and penalties, SDCWA

incurred a penalty of $174,096. In May, however, due to increased conservation and

unusually heavy rainfall, SDCWA consumption dramatically declined, resulting in

MWD credits that almost erased the April penalties.631

Meanwhile, Los Angeles had been pursuing an appeal of the court decision

limiting its use of Owens Valley water. On June 27, a state appeals court upheld the trial court’s injunction against additional deliveries, prompting SDCWA to join the case in support of Los Angeles so that the court understood the effect its ruling could have on San Diego.632 Going into the driest months of the year, local officials were justifiably worried. John Hennigar, general manager of the Valley Center Municipal

Water District, a SDCWA member agency, stated succinctly that the water situation

“will be serious unless we get a lot of rain or injunctive relief.”633 Hennigar didn’t

know it at the time, but he was to get both.

630 Tim Shepard, “Drought May Force Water Cuts Here,” San Diego Union, April 15, 1977; Tim Shepard, “Water Rights Ruling Perils S. D. Supply,” San Diego Union, June 29, 1977. 631 Bill Parry, “Water Use Is Cut 12% In County,” San Diego Union, June 12, 1977. 632 “City Receives Water Setback,” Los Angeles Times, June 28, 1977; John Gilmore, “Authority joins fight against water ruling,” San Diego Evening Tribune, June 29, 1977. 633 John Nunes, “Rationing of water possible,” Escondido Times-Advocate, June 30, 1977. 268

On July 22, the same appeals court that had ruled against Los Angeles the

month before reconsidered and agreed to let the city double its take from Owens

Valley for the next eight months, provided that a ten percent reduction in water usage was sustained. At the end of that period, on March 31, 1978, the depth of the winter snowpack would be known and with it the relative importance of the Owens Valley supply to Southern California for the next year.634 The court decision, along with an increasing public commitment to conservation, assured San Diegans that water rationing would not have to be imposed any time soon.635

Further relief came when the winter of 1977-78 turned out to be one of the wettest on record. Snow and rain drenched the state in December and in January State

Water Project deliveries to MWD resumed. On February 1, 1978, MWD terminated its conservation surcharge. By June 30, 1978, combined storage in reservoirs of the

State Water Project and the federal Central Valley Project stood at 13.519 million

acre-feet, compared to 4.677 million acre-feet the year before.636 The drought was

over and with it, for the time being, the fear that SDCWA would suffer for its status

on the short end of MWD’s preferential rights. The problem was not solved; it was

only, once again, deferred.

634 Richard West and Erwin Baker, “L. A. Wins Court Water Fight,” Los Angeles Times, July 23, 1977. 635 Bill Parry, “Fears Eased Here For Rationing,” San Diego Union, July 28, 1977; “Water Use Decreases In County,” San Diego Union, July 28, 1977. 636 Metrpolitan Water District, Annual Report Appendix - 1978, (Los Angeles, 1978), 15, 80. 269

The Showdown Comes for the Peripheral Canal

Although the Peripheral Canal had been designated a component of the State Water

Project in 1966, funding challenges, opposition from Northern California and

environmentalists, and the hope that the federal government would commit to share in

its cost kept the project on the drawing board through the 1970s. Finally, in 1980 the

Peripheral Canal effort shifted out of neutral. In 1977, Governor Jerry Brown, the son

of State Water Project champion Governor Pat Brown, announced his support for a canal. His support, however, was conditioned on the inclusion of environmental assurances that would later prove indigestible to large farming interests which otherwise should have embraced the project. The Peripheral Canal bill that emerged in the state legislature in 1980 was new in other important respects. First, the bill did not call for a joint state-federal project. This eliminated a significant obstacle to passage, and in any event project proponents believed the federal government would eventually pay to use the canal to transport water from its Central Valley Project.

Second, the Peripheral Canal bill, styled Senate Bill 200, was tied to a proposed state constitutional amendment that added new guarantees to guard the Sacramento-San

Joaquin Delta and strengthened protection from development for rivers on the north coast. The constitutional amendment would become Proposition 8 on the November

1980 ballot, and neither it nor the Peripheral Canal bill would become law unless both were enacted.637

637 Schwarz, A Water Odyssey, 151-155; Hundley, The Great Thirst, 323-325. 270

Although water developers considered the constitutional amendment a high

price to pay for the Peripheral Canal, most but not all were realistic enough to

recognize it was necessary. As conditioned, Senate Bill 200 passed largely along regional lines, mainly because pro-canal and populous Southern California held a majority in both houses of the post-reapportionment legislature. For MWD and

SDCWA, passage of the canal bill was a victory that had been a long time coming.

MWD and its Board of Directors Chairman Earle Blais were leaders in pushing the legislation, and SDCWA had joined other water agencies to lobby for passage, even with the environmental provisions.638 While their public relations efforts regarding

the bills were described as “educational,” agency officials were not above throwing a

scare into the mix. Pete Rios, the government and community affairs officer for

SDCWA, suggested to a group of La Jolla Kiwanians that without the Peripheral

Canal, the landscape of San Diego could resemble the blasted desert around Borrego

Springs.639

Canal proponents were not given long to celebrate. On the same day he signed

the canal bill into law, Governor Brown issued an executive order requesting the

United States Secretary of the Interior to include four north coast rivers in the national

Wild and Scenic Rivers system. 640 Although those rivers had earlier been placed in a

similar state program and would receive additional protection under the proposed

638 Schwarz, A Water Odyssey, 152; Minutes, SDCWA Board of Directors Meeting, April 10, 1980. 639 Gay Knapp, “Water shortage is next,” La Jolla Light, March 6, 1980. 640 W. B. Rood, “Brown Signs $5.1 Billion Peripheral Canal Measure,” Los Angeles Times, July 19, 1980. 271

constitutional amendment, state regulations could be reversed by a vote of the people

or by the legislature, leaving the water industry some hope for a future reservoir

project. Federal designation would effectively eliminate that possibility. Brown made

the application without prior notice to water agency officials, who immediately began

to explore the potential for litigation to negate the governor’s action.641

Even worse for the Southern California water agencies, opponents began to

collect petition signatures to force a general referendum on the Peripheral Canal. By

October 1980, the petition contained almost 500,000 valid signatures and qualified for the state ballot in the next general election to be held in June 1982.642 Canal

proponents wanted Governor Brown to call a special election on the matter in 1981, but he refused.643

Meanwhile, Proposition 8, the proposed constitutional amendment to provide additional protection to the bay-delta and north coast rivers, was on the ballot for

November 1980. Because its passage was necessary to enactment of the canal bill, the

Southern California water agencies came out in favor of what they would otherwise have probably opposed. The SDCWA Board of Directors unanimously passed a resolution supporting Proposition 8 in August 1980, and the MWD Board of

Directors unanimously followed suit in September.644 The measure passed by a

641 Minutes, SDCWA Board of Directors Meeting, August 14, 1980. 642 “Peripheral Canal Issue on 1982 Ballot,” Los Angeles Times, October 16, 1980. 643 Schwarz, A Water Odyssey, 155. 644 SDCWA Board of Directors, Resolution No. 80-48, “Resolution by San Diego County Water Authority Board of Directors Urging Voters Within Its Boundaries to Vote in Favor of Proposition 8,” August 14, 1980; MWD Board of Directors, Resolution 7820, “Resolution of the Board of 272

margin of 54 percent to 46 percent, setting up the vote on the Peripheral Canal that was to come two years later.

For the most part, battle lines for the election on the Peripheral Canal, which would appear as Proposition 9, were clearly drawn. Northern Californians by an overwhelming majority opposed the canal as a Southern California water heist.

Environmentalists opposed the measure even with the protections of the constitutional amendment because of potential consequences to the bay-delta ecosystem. Farmers in the delta were opposed because they saw the canal as a threat to their water quality.

Canal proponents were virtually all the government entities and private businesses that favored continued growth in Southern California, and farmers in the Central

Valley who depended on Northern California water for their livelihood. MWD was perhaps the most prominent of the canal’s supporters, but even MWD was exceeded in its fervor by SDCWA, where fear of preferential rights made a plentiful water supply an article of faith.

The big surprise was that a pair of huge farming conglomerates in the Central

Valley, J. G. Boswell Company and the Salyer Land Company, opposed the canal.

Boswell and Salyer were not converts to environmentalism; they wanted as much new water as they could get. Rather, they believed the environmental protections in the canal bill itself and in the proposed constitutional amendment were too high a price to pay for the water, and would preclude future use of the north coast rivers. With their

Directors, Metropolitan Water District of Southern California, in Support of Proposition 8,” September 9, 1980. 273

opposition the two mega-growers brought funding to run a campaign that eventually spent significantly more money than the pro-canal forces. As Marc Reisner observed in Cadillac Desert, the coalition of wealthy growers and environmentalists was in the minds of some the oddest alliance since the Hitler-Stalin Pact, but it proved effective.645

The pro-canal forces were hindered by a state law that prevented government

agencies from spending money to influence an election. MWD and SDCWA could

lobby the legislature for or against bills and endorse a ballot measure, but could not

use public funds to advocate a particular vote in an election. The rule was not

absolute; directors could speak in favor of the canal as private citizens, as could employees in their off-hours. Also, educational programs that did not advocate one side of an issue could be funded by the agency. To that end, in 1981 MWD provided

$625,000 for a “public awareness” program and SDCWA authorized $220,000 for an

expanded “public information” program to discuss aspects of Proposition 9.646 Canal

opponents believed the agencies were using the education programs to encourage a

“yes” vote on the proposition. As the campaign escalated, opponents sued MWD in

April 1982 for wrongful expenditures in support of the proposition, also naming individual directors and staff employees as defendants. As recommended by the

MWD general counsel, any defendant director or employee desiring representation

645 Reisner, Cadillac Desert, 363-364. 646 Minutes, SDCWA Board of Directors Meeting, May 7, 1981; Minutes, SDCWA Board of Directors Meeting, June 11, 1981. 274

would be provided counsel at district expense. 647 News of the lawsuit against MWD elicited some apprehension in the SDCWA boardroom, where directors were reminded of the relevant rules of the game, including potential individual liability of directors.648 Such apprehension was not misplaced. The same canal opponents who

sued MWD threatened a similar lawsuit against SDCWA, arguing that its advertising

campaign highlighting the need for more water from Northern California was

designed to promote Proposition 9.649

As the election drew near, water officials acknowledged the vote would be

close. An early April poll showed proponents with a slight edge, but the margin was

much smaller than the number of voters still undecided. Harry Griffen, coordinator of

“San Diegans for the Peripheral Canal,” stumped for the canal as a “private citizen” and not as a director at both SDCWA and MWD. Rising to the occasion, Griffen

warned that if you “could care less” about having a green lawn, or any landscaping around your home at all, and if you don’t care whether unemployment rises in water- related industries, then skip Proposition 9. On the other hand, Griffen argued, if you want to enjoy life in San Diego, rather than just exist in the arid climate, then vote

“yes”.650

647 Carl Boronkay, MWD General Counsel, letter to Board of Directors; Subject: Retention of Special Counsel, April 12, 1982, MWD archives. 648 Minutes, SDCWA Board of Directors Meeting, April 8, 1982. 649 Tom Gorman, “Ads About County’s Water Needs Spark Controversy,” Los Angeles Times, May 1, 1982. 650 Nancy Skelton, “MWD Official Disputes Anti-Canal Report,” Los Angeles Times, April 21, 1982. 275

Opponents played to the fears of Northern Californians and environmentalists

who already opposed the measure, and also hammered away at the project’s cost. As

proponents’ cost estimates rose, public relations experts employed by Salyer and

Boswell continually reiterated the theme that “It’s just too expensive.” This argument

played well in Northern California and more importantly siphoned away some votes

in Southern California. 651

Trepidation over the election affected actions in the MWD boardroom. In May

1982, a divided board deferred a decision on annexation of a development project

known as the Honey Springs Ranch in San Diego County. The project, which would

transform land designated for agriculture to an upscale suburban neighborhood, had

already been tentatively approved by MWD and received unanimous support at

committee meetings. However, at the board meeting directors balked at approving the

project, which featured an 18 acre man-made lake that would be filled in part by

water from MWD. One director stated it would be “totally inappropriate to be voting

for a project for decorative lakes” while the pro-canal campaign warned of potential

water shortages in Southern California. Harry Griffen, for one, failed to get that message and labeled opponents of the development as obstructionists.652

After all the hoopla, Proposition 9 and the Peripheral Canal were defeated by

the overwhelming margin of 62 to 38 percent. Northern California counties uniformly

voted over 90 percent against the proposal, and even in the Central Valley where the

651 Marc Reisner, Cadillac Desert, 364-365. 652 Victoria Merina, “MWD, Fearing Canal Vote Trouble, Delays Man-Made Lake Plan,” Los Angeles Times, May 12, 1982. 276

canal would provide more water, a majority opposed the measure. Nevertheless, the

opposition could have been overcome by a landslide in Southern California

reminiscent of lop-sided victories in favor of past water projects. Unfortunately for

project advocates, that kind of support was not forthcoming. Los Angeles County

could only muster a 61-39 percent majority, similar to results in Riverside and Orange

Counties. Only in San Diego County, with a majority of 73.4 percent to 26.6 percent,

was there a result approaching the old enthusiasm for more water. A campaign

retrospective attributed the relatively poor showing in Southern California to concerns

over cost and to the fact that people did not believe the message of MWD and other

water agencies that a water shortage would ensue if the canal were not built.653

Whatever the reasons, the dismal failure of Proposition 9 triggered consequences that

still reverberate at MWD and SDCWA, and throughout Southern California.

The Peripheral Canal Failure Reorders the Universe of MWD and SDCWA

As the 1980s began, MWD anticipated that, by 1990, 75 percent of its water supply would have to come from the State Water Project. 654 This was because the Central

Arizona Project was scheduled for completion in 1985, with the assumption that

Arizona would soon thereafter take its full Colorado River apportionment. Since

California had filled most of the Colorado River Aqueduct with Arizona’s unused

653 Ronald L. Soble, “Foes of Canal Built Success on Two Points,” Los Angeles Times, June 10, 1982; Public Policy Institute of California, “Voting Patterns on Proposition 9 (Peripheral Canal), 1982. www.ppic.org/main/mapdetail.asp?i=855 (accessed March 27, 2012). 654 Oshio, “Urban Water Diplomacy,” 292. 277

apportionment, that source would be cut by more than half during a “normal” year of

water availability, as determined by the United States Bureau of Reclamation. The

reduction had not been a problem so long as MWD could count on the two million

acre-feet per year for which it had contracted with the state. With the failure of the

Peripheral Canal and the loss of additional supplies from the north coast rivers, MWD

was left with the obligation to pay for a water delivery system that could carry its two

million acre-feet, but a water supply of perhaps half that, and during years of drought

much less.

After the defeat of Proposition 9, MWD and SDCWA in some respects went

back to business as normal. The Honey Springs Ranch annexation was approved by

the MWD Board of Directors a month after the June election.655 The plaintiffs who

alleged MWD illegally expended funds to influence the election had the suit

dismissed.656 As will be described, Los Angeles and San Diego renewed their

grappling over how to apportion revenues between taxes and the water rate. But

certain fundamental assumptions and approaches toward ensuring an adequate water

supply were shaken at their roots, with far-reaching consequences.

While MWD and SDCWA did not give up on additional supplies from the

State Water Project, they were forced to contemplate a future in which they would

have to operate with the system as it then existed. They and other water developers

did make another effort in 1984 to enhance through-delta water transportation in a

655 Minutes, MWD Board of Directors Meeting, July 13, 1982. 656 Metropolitan Water District, Annual Report – 1983 (Los Angeles, 1983), 152. 278

series of bills proposed by Governor George Deukmejian, but with the defection of

Southern California Democrats the plan died in the legislature.657 Other water

resources had to be found.

The 1982 annual reports of MWD and SDCWA both led off with an account of the Peripheral Canal’s defeat and the consequent need to find alternate water supplies. MWD highlighted the Chino Basin in east Los Angeles County as a groundwater storage site, and a local projects program that could include “increased use of reclaimed wastewater, facilities to capture additional runoff, brackish groundwater desalting programs and other plans… partially funded by the

District.”658 The consideration of a broad-based local projects program was a

remarkable change in policy for a MWD that had spent decades promoting the use of

its imported water over local supplies. The 1976-1977 drought had suggested that

local water should be developed to bolster imported water during times of shortage,

but the primary fix then was to increase State Water Project supplies through

additional water resources and the now-defunct Peripheral Canal. With state water

prospects having stagnated, MWD was forced to seek new solutions.

SDCWA also emphasized “stepped up conservation and reclamation” along

with a proposed Pamo Dam and Reservoir in northeast San Diego County to provide

water storage during periods of short supply and increase the capture of local runoff.

657 Ibid., 301. 658 Metropolitan Water District, Annual Report – 1982, (Los Angeles, 1982), xxix. 279

The SDCWA annual report further suggested in-delta projects less ambitious than the

Peripheral Canal to increase State Water Project supplies. 659

The Peripheral Canal failure did more than compel programs to find

alternative water supplies. The rejection of the measure by California voters and the

less than enthusiastic support from the state legislature demonstrated the need to commit additional money and manpower to public relations and political advocacy

with state and federal decision makers. As the region’s imported water supplier,

MWD had dabbled in those arts for years, but something more was needed. SDCWA

expanded its public information programs and although in some respects a subsidiary

of MWD, resolved to take a more active role in pressing its agenda in Sacramento and

Washington, D. C.660

The new and increasing missions of the water agencies would require them to

operate in a more complex world. MWD had recognized a decade earlier that its general manager no longer needed to be an engineer. Certainly, construction still took a large part of the district’s budget and manpower requirements, but the general manager had become a chief executive officer overseeing multiple departments and functioning in an environment more political than operational. With the retirement of

Linden Burzell in 1983, SDCWA followed suit and eliminated the requirement that its general manager be a registered civil engineer.661 As the role of the general

659 San Diego County Water Authority, Thirty-Sixth Annual Report – 1982 (San Diego, 1982), 9. 660 Ibid., 26-28. 661 Minutes, SDCWA Board of Directors Meeting, October 13, 1983. 280

manager and staff widened, directors necessarily had to relinquish what in the old

days had been the daily, hands-on control of their agency’s affairs. It was too much to

do, particularly in light of the fact that directors were unpaid and almost all of them

were either retired or working at a regular job.

The loss of the Peripheral Canal and the north coast rivers blasted Fred

Heilbron’s strategy of dealing with SDCWA’s relatively small allocation of MWD’s

preferential rights. That is, so long as there was enough imported water to satisfy the

needs of all member agencies, MWD would not experience a water shortage and

preferential rights would never be invoked. With the State Water Project now able to

yield only about half of its contract amounts in the early 1960s, the odds of a future water shortage went up dramatically and with it the chances that preferential rights might someday be invoked. This realization led to SDCWA’s most determined effort

to alter the preferential rights formula at MWD and when that failed, to search for

other sources of imported water outside the MWD family. The SDCWA initiatives

were to engender an unprecedented friction between the two agencies which was to

grow over the next two decades.

The defeat of Proposition 9 did not end the dream of the eventual construction

of the Peripheral Canal or something like it to deal with the problem of delivering

state project water through the delta. Project expansion remains moribund today, but the dream is still alive. 281

Doe and Griffen Test the Merits of “Getting Along” at MWD

At the time of the Peripheral Canal vote, Hans Doe and Harry Griffen had been handling SDCWA relations with MWD for ten years. Although they had been unable

to obtain a change in the preferential rights formula and appeared to be fighting a

losing battle in Los Angeles’ decades-long crusade to shift MWD revenues from

taxes to the water rate, there were other issues that required the nurturing of alliances.

Doe and Griffen’s strategy was to avoid direct confrontations and instead work

behind the scenes to secure achievable goals. That strategy made them leaders within

MWD and the statewide water industry and was, within limits, productive. Griffen

and Doe were particularly successful in developing relationships with MWD member

agencies outside Los Angeles County, especially the expanding agencies in Orange

and Riverside Counties. As then-MWD Director Robert Gottlieb observed, “This

‘growth bloc’ ensured that MWD continued to focus on expansion of the state project

and pushed for the construction and favorable location of expensive distribution and

treatment facilities to serve their areas.”662

Doe and Griffen routinely held leadership positions within the board of

directors. After Fred Heilbron gave up the office of secretary of the board in 1970,

Doe was appointed to the MWD Executive Committee, and when vice-chairmanships were expanded in 1975 from one to three after Joseph Jensen’s demise, Doe received

662 Gottlieb and FitzSimmons, Thirst for Growth, 35-36. 282

one of those slots. Harry Griffen became chairman of the Finance and Insurance

Committee in 1976 and succeeded Doe as a vice-chairman of the board in 1979.

The SDCWA representatives avoided fights that looked like losers and made inroads where they could. As an example, SDCWA, unlike other “growth bloc” member agencies, did not join MWD in its defense of the lawsuit brought by Los

Angeles over revenue sources in 1975. However, SDCWA did come out of the settlement of the litigation in 1977 with the discount agricultural rate intact, a huge benefit for outlying SDCWA member agencies. In 1981, the agricultural rate was again “in serious jeopardy” according to Director Doe. In large part to save the agricultural rate, SDCWA supported MWD adoption of a discount “interruptible rate” that included agricultural deliveries, but also provided the same rate for deliveries to member agency storage in groundwater and surface reservoirs. Although most

SDCWA member agencies had few storage opportunities, SDCWA accepted the compromise to preserve the agricultural discount.663

The MWD capital project that most directly affected SDCWA during the Doe-

Griffen era was Pipeline 5 of the San Diego Aqueduct. MWD included the cost of its

share of the pipeline, along with other proposed projects, in a $400 million revenue

bond passed by voters in June 1974. The bond garnered a majority of only 56 percent,

further indication that concerns over the environment and uncontrolled growth were

663 Evan L. Griffith, MWD General Manager, letter to Board of Directors (Water Problems Committee); Subject: Interruptible Water Service Proposal, March 2, 1981, MWD archives; Minutes, SDCWA Board of Directors Meeting, May 7, 1981. 283

dampening enthusiasm for an ever expanding water supply.664 Pipeline 5 was sized at

500 cubic feet per second, or about 360,000 acre-feet per year at continuous flow. 665

From the beginning, MWD agreed it would pay for construction and operation of the

new pipeline from its Lake Skinner reservoir south to about six miles below the San

Diego County line, the same terminus as previous aqueduct pipelines. This made

MWD’s section of Pipeline 5 about 18 miles long, and the SDCWA section about

10.6 miles in length, with a roughly proportionate allocation of costs.666 Prior

disputes over MWD’s sharing in the costs of the first three pipelines to San Diego

appeared to be a relic of the distant past. This embodiment of mutual goodwill

occurred no doubt in part because Pipeline 5 was a relatively minor portion of the

MWD construction program, but it also must be attributed to the stature of Hans Doe

and Harry Griffen in the MWD board room.

After the settlement of the Los Angeles lawsuit in 1977, SDCWA remained

active in the attempt to stem the tide that was shifting revenues from taxes to water

sales. During the late 1970s, Harry Griffen, a banker by profession, was in a position

to influence the issue as chairman of the MWD Finance and Insurance Committee,

which had cognizance over the district’s revenue structure. As provided in the 1977

664 Metropolitan Water District, Thirty-Sixth Annual Report, (Los Angeles, 1974), xxx; John M. Cranston, Chairman, SDCWA Board of Directors, “An Open Letter to the Members of the Board of Directors of the Comprehensive Planning Organization,” November 30, 1979, SDCWA archives. 665 Evan L. Griffith, MWD General Manager, letter to Board of Directors; Subject: Revision No. 1 to Appropriation No. 378 for $3,000,000, an increase of $2,800,000, to finance all costs in advance of award of the first construction contract for San Diego Pipeline No. 5 and the interconnection of San Diego Pipelines Nos. 1 & 2 to San Diego Pipeline 4, June 20, 1979, MWD archives. 666 Ibid.; San Diego County Water Authority, Thirty-Fourth Annual Report ( San Diego, 1980), 35-36. 284

settlement, Resolution 5821 was to remain in effect until repealed or modified by the

MWD Board of Directors. To consider alternative methods of apportioning capital

costs between water sales and taxes, the board created a special Subcommittee on

Resolution 5821. Griffen was appointed subcommittee chairman even though he was

from SDCWA, which benefitted from high taxes and lower water rates.667 At the end

of lengthy deliberations, the subcommittee created what it called the “proportionate use formula” for allocating capital costs to taxes and water sales.

Under the proportionate use formula, MWD capital costs would be paid by

water sales in the percentage that the volume of water deliveries bore to the maximum

annual water entitlements of MWD. The maximum entitlements were calculated at a total of 3,223,500 acre-feet, the sum of the Colorado River entitlement of 1,212,000 acre-feet and the State Water Project entitlement of 2,011,500 acre-feet.668 Therefore,

if MWD water deliveries were 1.5 million acre-feet, or about 46.5 percent of MWD’s

total entitlements of 3,223,500 acre-feet, that percentage of capital costs would be

paid by water sales. The remainder would be paid by taxes and annexation fees.

Western Municipal Water District, a MWD member agency in Riverside

County and part of the “growth bloc” that would benefit from a lower water rate,

summed up the effect of the new formula in testimony to the MWD Water Problems

Committee. The impact would not be much at first, but as MWD sales increased, the

667 Minutes, SDCWA Board of Directors Meeting, April 12, 1979. 668 Evan L. Griffith, MWD General Manager, letter to All Directors; Subject: Proportionate-Use Formula for Allocation of Capital Costs to Tax Revenues and Water Sales Revenues, April 10, 1979, MWD archives. 285

proportion of capital costs paid by the water rate would rise so that by the year 2000,

at least $200 million less would have been assessed in taxes than with continuation of

Resolution 5821. Western was willing to go along with the change even though it

would mean higher water rates, provided it was accepted by the other member

agencies, particularly the city of Los Angeles, and would not “simply mean another

lawsuit on the same issue.”669 Western’s concern over Los Angeles’ acceptance of the

proportionate use formula was well-founded. The city’s ace-in-the-hole was the

MWD Act requirement that, so far as practicable, virtually all district costs be paid

through the water rate.670 The “so far as practicable” qualifier had always been used to justify continuing taxes, but as water sales rose, the justification diminished.

The proportionate use formula was approved by the MWD Board of Directors

in November 1979, with both the pro-tax and pro-water rate member agencies voting

in favor.671 Whatever satisfaction Harry Griffen may have gained from shepherding the compromise to fruition was dashed only four years later when Los Angeles again pushed for further reductions in the tax rate, this time in a different forum.

The spirit of compromise and congeniality between SDCWA and MWD also fostered a joint feasibility study of a proposed Pamo Dam and Reservoir in northeast

San Diego County. The city of San Diego owned almost all the land necessary for the

669 Western Municipal Water District of Riverside County, letter to MWD Water Problems Committee concerning Proportionate Use Formula, October 8, 1979, SDCWA archives. 670 Section 134, MWD Act. In 1969, the MWD Act was re-enacted and existing provisions were reordered and renumbered. Under the original MWD, the cited provision of Section 134 was located in Section 7(j). The re-enacted MWD Act is at Stats. 1969, Chap. 209. 671 Minutes, MWD Board of Directors Meeting, November 13, 1979. 286

project, which could store about 130,000 acre-feet of water, most of which would be

imported water. In June 1982, MWD and SDCWA agreed to contribute $50,000 each

to the feasibility study with the understanding that MWD might be interested in

acquiring a portion of the reservoir’s storage capacity.672 Little did they know it at the

time, but SDCWA directors by the end of the decade would likely wish that they had

never heard of the Pamo Reservoir.

Los Angeles Renews Its Fight to Reduce Taxes

The city of Los Angeles tolerated the MWD proportionate use revenue formula for

less than four years. In 1983, an Act of God and a seemingly innocent piece of

legislation provided the incentive and the means for the city to again fight to reduce

the tax rate at the expense of a higher water rate. This time, the contest would embitter SDCWA and set off a chain of events that left SDCWA a maverick rather than a consensus builder in the MWD boardroom.

The Act of God was the extraordinarily wet winter of 1982-1983 followed by unseasonally heavy rain during the summer months. MWD usually set the annual

water rate at its March meeting, with the new rate to take effect on July 1. Even

before the impact of the storms were felt, MWD had raised its rates substantially. In

March 1982, the board of directors approved an increase in the rate for non-

interruptible, untreated water from $96 to $114. In March 1983, the rate jumped from

672 Evan L. Griffith, MWD General Manager, letter to Board of Directors; Subject: Pamo Reservoir Feasibility Study, June 17, 1982, MWD archives; Minutes, MWD Board of Directors Meeting, July 12, 1982. 287

$114 to $144.673 The 50 percent jump in the price of water over only two years was attributed to the increasing cost of power to pump state project water over the

Tehachapi Mountains for delivery to Southern California.674

While the water rate rose, the MWD tax rate continued to decline as intended

under Resolution 5821 and the proportionate use formula. The tax rate for fiscal 1983

was set at 6.6 cents per $100 of assessed value, the lowest rate since MWD had begun

to pay the costs of the Colorado River Aqueduct in the 1930s.675 As the proportion of

income from taxes fell and income from water sales rose, MWD’s revenues, most of

which were fixed, became increasingly dependent on meeting water sales projections.

If water sales matched projections, costs were covered. If water sales exceeded

projections, there was a surplus. If water sales were significantly less than

projections, MWD was in big trouble. This is what happened in 1983.

Fiscal Year 1983 water deliveries totaled 1,226,361 acre-feet, an 18.6 percent

decline from the previous year and less than MWD had delivered during any of the

last ten years.676 To make up for lost sales, MWD would ordinarily dip into a reserve

fund to flatten out the water rate. However, district reserves had already been

depleted over the preceding two years and a significant mid-year rate hike appeared

673 Metropolitan Water District, Annual Report – 1984 (Los Angeles, 1984), 118. 674 Michael Seiler, “MWD Directors Approve Sharp Increase in Rate,” Los Angeles Times, March 9, 1983. 675 Metropolitan Water District, Annual Report – 1984, 119. 676 Metropolitan Water District, Annual Report – 1983, xxx; Metropolitan Water District, Annual Report Appendix – 1980 (Los Angeles, 1980), 19-20. 288

inevitable.677 The budget shortfall to be covered was $60 to $70 million, and MWD staff prepared a set of alternatives to raise rates anywhere between $30 and $96 per acre-foot.678

In response to the impending rate increase, MWD Director Robert Gottlieb,

representing the city of Santa Monica, suggested the district scale down its $1 billion

construction program to lower costs. Although SDCWA as MWD’s largest water

purchaser stood to pay the largest share of the rate increase, its MWD directors

favored a higher water rate to keep the construction program intact. Recently appointed MWD Director Mike Madigan, who represented the city of San Diego at

SDCWA, cited particularly the Pamo Dam as a local project for which a large financial commitment from MWD was vital. As envisioned by the project’s feasibility study, SDCWA hoped MWD would buy capacity in the proposed reservoir and contribute half the estimated $80 million cost.679

In accordance with the proportionate use formula, MWD staff also

recommended an increase in the tax rate to help cover the deficit. As the tax increase

was being contemplated, a newly enacted law came to light that was either miswritten

or perhaps the most remarkable piece of legislative skullduggery in MWD’s history.

Earlier that summer, state Assembly Majority Leader Mike Roos introduced a bill to

bail out Los Angeles and more than 60 other cities that were involved in a

677 Bill Boyarsky, “Questions Raised About Policies of Water District,” Los Angeles Times, August 15, 1983. 678 Cheryl Clark, “Water rate rise looms; farmers cross fingers,” San Diego Union, August 18, 1983. 679 Cheryl Clark, “August showers bring grim glowers, to MWD,” San Diego Union, August 29, 1983. 289

complicated legal dispute over allocation of property taxes within the limitations of

Proposition 13, which had passed in 1978.680 The bill dealt with the issue but also

forbade any “local agency” from imposing a property tax rate in fiscal 1983-1984 and

1984-1985 in excess of that imposed for fiscal year 1982-1983.681 Because the bailout

provisions did not apply to MWD, the district took no notice of the bill. However, as

MWD was within the definition of a “local agency” under California law, the

restriction against raising the property tax, by its terms, applied to the district.

The Roos bill was enacted on July 28, 1983, and became an issue in the MWD

boardroom in August when the tax rate increase was being considered. MWD

General Counsel Carl Boronkay confessed that when he first read the legislation, he

believed the district was bound by the new law. However, after further study,

Boronkay determined the Roos bill was not intended to apply to MWD. Boronkay

therefore advised the board of directors it could raise property taxes, although he

acknowledged others disagreed with his opinion and if taxes were increased, a lawsuit

would probably ensue.682

Armed with Boronkay’s opinion, the MWD Board of Directors voted on

August 31 to raise the tax rate, with only the directors representing the city of Los

Angeles dissenting. The tax increased from 6.6 cents per $100 of assessed value to

9.5 cents, or .0237 percent of full value, as the tax rate was now required to be

680 Bill Boyarsky, “MWD Votes to Boost Propety Tax,” Los Angeles Times, September 1, 1983. 681 Stats. 1983, chap. 491. 682 Cheryl Clark, “Water district to test rate increase,” San Diego Union, September 1, 1983. 290

expressed.683 The MWD action elicited a howl of outrage from Assemblyman Roos, who claimed he had intended all along for his bill to apply to MWD. Roos stated that

collection of the increased tax would be illegal and accused MWD directors of

“incredible arrogance in flaunting the law.” He argued that MWD had made no

objection to the bill during lengthy committee hearings, but had later asked for a complete exemption which the legislative committee turned down.684

Taking Roos at his word that he had always intended the bill to apply to

MWD, one must fault the MWD staff for not realizing its impact before it was too late to do much about it. However, on the whole one must conclude the bill was a sneak attack on MWD’s tax policy. Roos had emerged as a leading legislative spokesman for Los Angeles’ attempt to prevent more MWD tax hikes and, assuming the bill’s language was no mistake, the Los Angeles hierarchy must have been in on it. 685 Harry Griffen claimed the crucial provision was approved at a night legislative conference that went undetected by MWD’s legislative representative. 686

Despite General Counsel Boronkay’s opinion that the Roos bill did not apply

to MWD, district representatives promptly went to Sacramento to plead for an

exemption from the legislation. Because the plain language of the bill included MWD

and the bill’s author declared in no uncertain terms that was indeed the intent, the

683 Bill Boyarsky, “MWD Votes to Boost Property Tax,” Los Angeles Times, September 1, 1983; Metropolitan Water District, Annual Report – 1984, 110-111, 119; Metropolitan Water District, Annual Report – 1985 (Los Angeles, 1985), 120. 684 Bill Boyarsky, “MWD Votes to Boost Property Tax,” Los Angeles Times, September 1, 1983. 685 Ibid. 686 Griffen, “Harry Griffen Manuscript,” chap. 6-6, p. 13. 291

district obviously was on thin ice. Unfortunately for MWD, Roos sat on the conference committee that heard the MWD plea and ensured its rejection. 687

For SDCWA, there was a bitter irony in the turn of events. The Doe-Griffen strategy of appeasement, coalition-building, and compromise had largely worked. The proportionate use formula that Harry Griffen authored was accepted by the MWD

Board of Directors and unanimously, minus Los Angeles, defended in the face of

questionable legality and almost certain litigation. MWD directors had rallied around

the SDCWA contingent and were united in their opposition to Los Angeles. Los

Angeles, however, had changed the rules of the game. The decisions now would be

made not in the MWD boardroom but in the state legislature.

While the validity of the tax rate increase was being pondered, MWD still had

to take action to raise the water rate. On September 13, the board of directors

increased the price of non-interruptible, untreated water by $53 per acre-foot. With

this action, MWD had raised the water rate from $96 to $197 in two years, an

increase of over 100 percent. Meanwhile, there were reports of progress in the

legislature to ratify the recent tax rate increase. That relief, however, would come

with strings attached.688

As the state legislative session neared an end, a bill passed with Assemblyman

Roos’ concurrence exempting the recent MWD tax rate increase from the prohibitions

687 Claudia Luther, “Panel Rebuffs MWD on Plan to Boost Tax,” Los Angeles Times, September 13, 1983. 688 Bill Boyarsky, “MWD Votes Bigger Rate Hike,” Los Angeles Times, September 14, 1983; Metropolitan Water District, Annual Report – 1984, 117. 292

of the Roos bill. The exemption had a price. While the fiscal 1983-1984 tax rate was

saved, the new bill prohibited MWD from imposing a tax rate for the next two years

in excess of the rate for 1982-1983, unless at least 80 percent of the MWD directors declared a fiscal emergency. Moreover, MWD was required to submit a report to the

legislature by March 31, 1984, “detailing its program to reduce the reliance of the

district on the property taxes and to assure that the property tax burden is equitably

distributed.”689 That report presumably would set the stage for further legislative

action in 1984.

The Old Battle Between Taxes and the Water Rate Is Rekindled

The pending report and the prospect of legislative action set off another round in the

periodic struggle over the allocation of MWD revenues to water sales and taxes. As

usual, SDCWA and its allies defended the status quo and Los Angeles went on the attack in an effort to again place a larger burden on the water rate. The same old

arguments were dusted off and presented as if someone had just thought of them. A

Los Angeles Times editorial stated that Los Angeles received only two percent of its water supply from MWD but paid 23 percent of the district’s income due to the property tax burden. The Times described MWD’s property tax income as a subsidy and declared the cost of delivering water should be paid by the water users, not the taxpayers.690 In a reply to the editorial, MWD Board Chairman E. Thornton Ibbetson

689 Stats. 1983, chap. 1324. 690 “MWD and Water Pricing,” Los Angeles Times, September 11, 1983. 293

stated Los Angeles actually received six percent of its water supply from MWD, a

number that would grow if the city lost part of its Owens Valley supply due to

ongoing environmental litigation over impacts to Mono Lake. Additionally, Los

Angeles did not pay 23 percent of all MWD revenues. Rather, it paid 23 percent of tax revenues but only eight percent of total MWD revenues. Ibbetson also noted that

Los Angeles received value for its tax contributions. When MWD contracted for capacity in the State Water Project, it sized the project to meet Los Angeles’ water entitlement. 691 In other words, the actual delivery of water was not the only benefit a

MWD member agency enjoyed. The agency also had the right to receive water when

needed. Whether deemed a property right or an insurance policy, it had value.

Ibbetson’s letter concluded by noting Los Angeles had agreed to the proportionate use

formula, which was gradually shifting costs toward water sales.

SDCWA and Harry Griffen had to be pleased with the Ibbetson article, as it

stated the San Diego point of view. Indeed, water sales had been paying a growing

share of MWD revenues over the years. During fiscal year 1982-1983, water sales

produced $145.7 million in MWD revenues and tax levies accounted for $56.4

million, a 72 to 28 percent split. The margin was 75 to 25 percent in 1983-1984, when

both the price of water and the tax rate were dramatically increased.692 MWD had

come a long way from the 1950s, when taxes accounted for around 90 percent of

revenues. But things were not changing fast enough for Los Angeles.

691 E. Thornton Ibbetson, “Metropolitan Water’s Tax and Rate Policies,” Los Angeles Times, September 24, 1983. 692 Metropolitan Water District, Annual Report – 1984, 121. 294

Despite Chairman Ibbetson’s supportive statement, SDCWA and Harry

Griffen did not feel constrained to offer their own thoughts. They believed Los

Angeles received two huge benefits from MWD other than its actual water purchases.

First, Griffen asserted that the availability of water made the growth of Southern

California possible and with it the establishment of Los Angeles as its financial center. Second, echoing Ibbetson, SDCWA and its allies saw the MWD system as security for Los Angeles in case its own imported water supply should someday prove insufficient. The editorial board of the San Diego Union chimed in with a similar assessment:

Although Los Angeles receives less water and thus less direct benefit

from MWD and its water distribution system, it receives indirect

benefits that far exceed its contribution to the district. Los Angeles

may not need MWD’s water on a regular basis; it certainly does need

the regional prosperity that MWD water has brought to Southern

California and, most important, it must have MWD’s water reserve

insurance against droughts when its own supplies fall short.693

While Los Angeles officials did not necessarily disagree that the city received

tangible benefits from MWD other than the delivery of water, it did not justify for

them continuation of the existing tax policy. One Los Angeles Department of Water

and Power executive claimed that if city taxpayers owed anything to MWD, either as

693 “Taxes and Water,” San Diego Union, February 18, 1984. 295

ongoing insurance or payment for growth that helped the city prosper, it was a debt long since paid.694

As the debate continued, MWD staff was preparing the report to the

legislature mandated by the Roos bill, which carried a deadline of March 31. The staff

could detail the history of the MWD revenue structure and postulate alternative rate

structures for consideration, but it was up to the divided board of directors to

determine a revenue policy to submit to the legislature. Even Harry Griffen

understood that some change to the proportionate use formula had to be made to

obtain relief from the Roos bill prohibitions on future property tax increases. In

January, the MWD staff suggested a possible compromise in which the burden of

taxes would be shifted more heavily onto water users rather than areas with high

property values. Although Griffen stated he did not agree with the compromise, he

downplayed its cost to the San Diego region and opined that the chances of lifting the

Roos bill restrictions would be “nil” if further reductions of taxes to Los Angeles

were not made.695

Technically, the staff proposal was not a shift in the tax burden but instead a new method of securing fixed revenues. The recent experience of a revenue shortage due to lower water sales graphically demonstrated the danger of meeting what were largely fixed costs with mostly variable revenues. Because they were fixed revenues,

694 Cheryl Clark, “Officials hope report helps limit water cost here,” San Diego Union, October 27, 1983. 695 Cheryl Clark, “MWD moves closer to $1.6 million S. D. tax increase,” San Diego Union, January 11, 1984. 296

taxes supplied a predetermined supply of funds. However, as the MWD revenue structure depended less on taxes and more on the water rate, the amount of money

MWD collected became more and more dependent on meeting water sales projections. The MWD staff understood that if the property tax rate had to decrease,

MWD needed another fixed revenue source to take its place. The solution was presented in two bills Assemblyman Roos introduced in February. They would amend the MWD Act to allow the district to collect standby charges and connection fees from its member agencies, and to establish zones of benefit within the district for the

purpose of imposing benefit assessments.696 These devices would allow MWD to set

fixed revenues based on something other than property values, such as water use and

new connections. Although the proposed charges were not taxes, for MWD they

could preserve fixed revenues while reducing the Los Angeles tax burden. If

calculation of the new charges was to be based on water use, SDCWA would pay a

larger share. A standby charge, however, would be included in the determination of

preferential rights since it was not excluded as a water rate.

Although given a tool for maintaining fixed revenues, the warring factions on

the MWD board, with Los Angeles and SDCWA as the main antagonists, could not agree on a division of costs. A MWD committee led by Griffen recommended that a decision on the revenue structure could not be made by the March 31 deadline and the

legislature should be informed more time was needed. Board Chairman Ibbetson,

696 Carl Boronkay, MWD General Counsel, letter to Board of Directors, Subject: Pending Legislation, February 29, 1984, MWD archives. 297

fearing a legislative backlash, said he hoped the board could make up its mind by

February 1.697

February did not produce a deal. Harry Griffen, frustrated over the inability to

get a clear board endorsement of the existing proportionate use formula, stated he was

ready to carry the fight to the legislature and that San Diego was strong enough to

win. 698 Amid the saber rattling, Ray Corley, MWD’s Sacramento lobbyist, appeared before the board with a grim warning of the potential consequences if the dispute was

fought out in the legislature. Corley warned that MWD’s image was already tarnished

because of lingering bitterness among Northern Californians over the Peripheral

Canal fight, and environmentalists would love to interest legislators in what they regarded as Southern California water waste. Neither of the two factions within

MWD, Los Angeles on the one hand and SDCWA and its coalition on the other, could alone win and they would inevitably compete against each other in offering

deals to gain support. The outcome could include new rules on how MWD directors were appointed, how it spent its money, and how it would be subject to public accountability. Assemblyman David Kelley foresaw that if the legislature took control of the issue, “life at the Met will never be the same. Met has no idea what kind of a Pandora’s Box might be opened.”699

697 Bill Boyarsky, “San Diego – L. A. Feud Over Water Costs Boils,” Los Angeles Times, January 11, 1984. 698 Cheryl Clark, “MWD plan would increase water rates,” San Diego Union, February 15, 1984. 699 Cheryl Clark, “Feuding MWD told to settle its own problems,” San Diego Union, February 20, 1984. 298

MWD and SDCWA Pick New General Managers, and SDCWA Raises the Stakes

The mounting political battle within MWD came at a time when both MWD and

SDCWA had to select a new general manager. At MWD, the selection came easily

despite the fact there were about 200 applicants. Carl Boronkay, the MWD general

counsel, was the unanimous choice of a selection committee composed of 18 directors and received easy confirmation at the March board meeting. Harry Griffen was among Boronkay’s advocates, indicating the new general manager was well qualified to represent the district in the political arena with legislators in Sacramento and with other water agencies.700 Boronkay’s political skills would immediately be

tested within the confines of his own agency in an attempt to mediate the festering

debate over water rates and taxes.

The qualities Harry Griffen admired in Carl Boronkay were something he and

others in the SDCWA boardroom sought in their own general manager. Retiring

General Manager Linden Burzell was first and foremost an engineer and a builder.

When he assumed his post in 1964, he was the person SDCWA needed to run the

staff. The environmental movement had not yet created the complexities that existed

20 years later, and Fred Heilbron and his lieutenants personally handled

disagreements among MWD member agencies. By 1984 the landscape had changed.

The SDCWA Board of Directors was as a whole still development-oriented but the agency now had to deal with environmental requirements, no-growth and limited

700 Barry M. Horstman, “Water District Job Candidate Endorsed,” Los Angeles Times, March 2, 1984; Cheryl Clark, “Attorney nominated to MWD general manager post, San Diego Union, March 2, 1984; “MWD’s General Counsel Selected to Head Agency, Los Angeles Times, March 14, 1984. 299

growth advocates, and the need to find other sources of water through reclamation, storage, desalination, conservation, or some combination thereof. For Griffen and like-minded directors, SDCWA needed to follow the example of MWD and find a true chief executive officer who could succeed in a political environment across multiple venues. Engineering could be left to the engineers.

Not everyone on the SDCWA board agreed their general manager should be a politician. A selection committee spent three months considering 25 applicants and overwhelmingly recommended Larry Michaels, a SDCWA engineer then employed as head of special projects planning, most notably the proposed Pamo Dam.

Dissatisfied with the selection committee’s choice, Board Chairman Roy Lessard, a

San Diego representative, appointed a seven member ad hoc committee to make its own recommendation. Lessard and his hand-picked committee favored the appointment of John Hennigar, a SDCWA director representing the Valley Center

Municipal Water District, where he served as its general manager. Hennigar was not an engineer, but was considered more adept at dealing with the politics of the water industry. Hennigar was supported by SDCWA’s old hands at MWD, Hans Doe and

Harry Griffen, and by recent appointees to the MWD Board, Michael Madigan and

Francesca Krauel, both representing the city of San Diego. The faction supporting

Michaels accused Lessard and his cohorts of circumventing the selection process to choose a candidate who would ensure adequate water to support regional growth.

Madigan, speaking for the pro-Hennigar group, replied,

I’m sorry that some members are upset, but there is a lot of concern that 300 the role of general manager has changed to where the message is not just building the pipelines and establishing accounts with various agencies. Now water has become much more visible and political, if you will, and certainly the general manager needs to have a lot more visibility. 701

To prevent a debilitating internal struggle in the midst of the conflict with Los

Angeles at MWD, the SDCWA leadership agreed in February that all 34 board members would interview the candidates at their next meeting and then make a decision. At the same time, some directors advocated splitting the general manager’s job in two, with one executive handling the political duties and the other tending to construction. Supporting this concept, Harry Griffen observed that, in his opinion,

SDCWA representatives at MWD were handicapped compared to their Los Angeles counterparts because of a lack of staff advisors.702

SDCWA’s intra-agency dispute was quietly resolved when the Lessard faction determined it did not have the votes to appoint Hennigar. At the conclusion of the interviews and after the directors in closed session reportedly favored Michaels by a vote of 19 to 16, the board in open session unanimously selected Michaels.703 In recognition of the general manager’s expanded duties, Michaels was authorized to hire an assistant general manager and assistant chief engineer, which he proceeded to

701 David Smollar, “Water Authority Board in Bitter Dispute,” Los Angeles Times, February 8, 1984. 702 David Smollar, “Water Board Works to Heal Dispute Over Leadership,” Los Angeles Times, February 10, 1984. 703 Gottlieb and FitzSimmons, Thirst for Growth, 124-125; Cheryl Clark, “Water board picks Michaels to be manager,” San Diego Union, February 24, 1984. 301

do. Michaels’ tenure was to last only four years. The next time SDCWA chose a

general manager, it would not be an engineer.

With their general manager selected, SDCWA directors could again focus on

the dispute at MWD. Having failed to break the stalemate over the appropriate

division of water sales and taxes, SDCWA went to the legislature with a bill of its own. Early in February 1984, Assemblyman Steve Peace of San Diego introduced

Assembly Bill 2619, co-authored by the entire San Diego legislative delegation. AB

2619 would repeal the Roos bill limits on MWD’s ability to levy property taxes, and it went further. The bill would also repeal the preferential rights provision of the

MWD Act and authorize MWD to sell water to its member agencies for all beneficial uses, thus eliminating any potential restrictions on the delivery of water for agriculture.704 In conjunction with the Peace bill and the effort to modify the Roos

statute, the SDCWA board also hired a legislative advocate to champion its cause.705

San Diego had thus declared it was ready to carry the fray at MWD to Sacramento, and with an expanded set of long-standing issues.

Boronkay Mediates a Resolution of the SDCWA-Los Angeles Standoff

Newly appointed General Manager Boronkay faced the real possibility that a deeply divided MWD would take its internal disputes to Sacramento and thereby cede control of its future to the legislature. Boronkay resolved to do whatever he could to

704 Minutes, SDCWA Board of Directors Meeting, February 9, 1984; SDCWA Board of Directors, Resolution No. 84-19. 705 Minutes, SDCWA Board of Directors Meeting, April 12, 1984. 302

settle differences within the agency, but he needed to act quickly. On March 13, 1984,

the same day Boronkay was unanimously installed as general manager, the board of directors voted to send the legislature its report mandated by the Roos bill, entitled the “AB 322 report.” However, the report failed to make recommendations on further reductions in the property tax as the bill required. Instead, the board voted, with Los

Angeles opposed, to request that MWD “(1) be granted a two-year moratorium for submission of Chapter Eleven of the report [the recommendations] required by AB

322; (2) be released from the restrictions of AB 322; (3) submit the historical portion of the aforementioned report; and (4) report back to the Legislature in two years, following a study conducted by an independent consultant.”706

Based on prior warnings from political pundits, the refusal or inability of the

MWD board to make a recommendation on the reduction of property taxes practically dared the legislature to take matters into its own hands. Upon taking the reins,

General Manager Boronkay began one last attempt at a compromise solution within the agency. At the May 8 board meeting, he formally presented his plan. Under the

Boronkay proposal, starting with fiscal year 1990-1991, the district’s property taxes would not exceed (1) the amount required to pay debt service on MWD’s general obligation bonds, and (2) that portion of MWD’s payment obligation to the State

Water Project allocable to debt service used to finance construction. Until 1990, taxes

706 Minutes, MWD Board of Directors Meeting, March 13, 1984; Metropolitan Water District, “Report to the California Legislature in Response to AB 322,” (March 23,1984), MWD archives. 303

would be based on the proportionate use formula. The new rules would be inserted by

the legislature into the MWD Act as a new Section 124.5. 707

The deal, termed the Boronkay Compromise by some and the Boronkay

Giveaway by others, was designed to systematically reduce taxes so that eventually

MWD would have no tax levy. 708 This would happen because the two financial

obligations to which taxes could be applied would be fully paid in the early decades of the twenty-first century. MWD was no longer issuing new general obligation bonds to raise capital, but rather revenue bonds. When payments on the existing bonds and State Water Project construction costs were completed, tax assessments would end.

At the same May 8 meeting in which Boronkay presented his deal, Hans Doe submitted a letter recommending the board of directors support AB 2619, the bill that would remove the Roos bill limitations on property taxes and eliminate preferential rights. 709 In light of the Boronkay plan, Doe’s issue was deferred.710

The general manager had apparently shopped his proposal extensively among

the rival factions within the board before the May 8 meeting. The vote in favor of the

707 Carl Boronkay, MWD General Manager, letter to Board of Directors; Subject: Proposed Legislation Amending Metropolitan Water District Act and Revisions to Metropolitan Water District Administrative Code Relating to Taxation and Water Pricing, April 30, 1984, MWD archives. 708 Griffen, “Harry Griffen Manuscript,” chap. 6-6, p. 13. 709 Hans H. Doe letter to Board of Directors; Subject: Support of Amended AB 2619 (Peace) Revising MWD Act, April 30, 1984, MWD archives. 710 Minutes, MWD Board of Directors Meeting, May 8, 1984. 304

compromise was unanimous.711 The amendment to the MWD Act was introduced as

Senate Bill 1445 and on July 3 became law. 712 In addition to whatever anxiety they

felt over a threatened legislative makeover of the MWD Act, San Diego’s MWD directors voted for the compromise so that MWD member agencies could present a united front in their ongoing effort to enhance the State Water Project.713

The episode that began with the Roos bill and ended with the Boronkay compromise was a bitter pill to swallow for SDCWA and its MWD delegation. The deal did extend Harry Griffen’s proportionate use formula for another six years, but after that taxes could only be used to pay certain debts already incurred. When those debts were retired, taxes would no longer be a source of revenue for MWD. It was a complete, though delayed, Los Angeles victory in the decades-long battle over the apportionment of MWD revenues between taxes and the water rate. Yet the SDCWA delegation voted in favor of the compromise with the rest of the MWD directors, knowing its share of contributions to MWD revenues would grow while the Los

Angeles share would decrease. Undoubtedly SDCWA wanted to avoid a fight in the legislature despite its earlier bravado indicating otherwise, but San Diego officials probably also conceded the result was inevitable. After all, the MWD Act required that district expenses be paid through the water rate so far as practicable, and

711 Ibid. 712 Stats 1984, chap. 271. 713 Cheryl Clark, “Water accord will cost San Diegans $1 million,” San Diego Union, May 9, 1984. 305

dramatic increases in the water rate had done nothing to slow sales. It was, in fact,

“practicable” for MWD to raise virtually all its revenues through the water rate.

The relative merits of the Boronkay compromise have been debated over the

years, but it is still in place. As significant as the outcome was for MWD’s revenue structure, the process also signaled a new role for the district’s general manager.

Traditionally at MWD, SDCWA, and similarly situated government agencies, the legislative body sets policy and provides general direction. The chief executive officer manages staff and works with third parties to implement the governing body’s

policy. Here, General Manager Boronkay instead managed a 52-member dysfunctional board of directors to arrive at a fundamental policy decision. Such a thing was unnecessary and unthinkable during the autocracies of Joseph Jensen at

MWD and Fred Heilbron at SDCWA. However, now that power was dispersed within the MWD board, the general manager would increasingly have to fill the void in leadership.

SDCWA Campaigns for a Change in Preferential Rights

SDCWA and its allies could not have been pleased with MWD’s new limitations on the property tax. They had negotiated multiple deals over the previous quarter century, and each time the proportion of property tax revenues decreased while Los

Angeles took a short breather before renewing the relentless attack that would not end

until taxes were phased out altogether. The frustration in San Diego was reaching a

new high. 306

At the same time, leadership on the SDCWA Board of Directors was changing. Harry Griffen was still a dominant force, but Hans Doe was playing a lesser role as old age took its toll. A new leadership bloc emerged that, along with

Griffen, included city of San Diego Directors Mike Madigan and Francesca Krauel, both of whom were politically connected, and Directors John Hennigar and Dale

Mason, representing north county member agencies.714 Madigan and Krauel were appointed to the MWD board in 1982 and 1983 respectively, and were joined by

Hennigar and Mason when vacancies occurred in 1986.715 The group was not fully in

control; it had been unable to impose Hennigar as SDCWA general manager earlier in

the year. However, the new power bloc would play the key role in taking a more

militant approach toward relations with MWD.

The resolution of the MWD property tax debate in May removed that issue as

a direct point of contention, but the agreement did not address preferential rights.

Preferential rights had always been a sore point with SDCWA, which feared that

during a water shortage it would have a right to purchase less than half of its usual

proportion of the MWD supply.

The rules for determining preferential rights were set in the first few years of

MWD’s existence. Originally, a member agency’s preferential right was simply the

same percentage of the total supply as its assessed valuation was to the total assessed

valuation within the district. In 1931, the rule was changed so that the percentage a

714 Gottlieb and FitzSimmons, Thirst for Growth, 38. 715 San Diego County Water Authority, Forty-second Annual Report (San Diego County, 1988), 8. 307

member agency contributed to all amounts paid toward district capital costs and

operating expense, excepting the purchase of water, would also be the percentage of its preferential right. The amount was cumulative; that is, the formula counted all

such contributions from the formation of MWD, not just year to year. A commentator

on the MWD Act suggests the change was the brainchild of Los Angeles, which in

1931 had 50 percent of the board vote. “It was certainly that City’s interest to change

the ratio to one specifically exempting water purchases (because of its separate water

supply) but counting all other payments made (not only because its tax payments

were then 80 percent of the total paid but also because it alone had paid the “start up”

costs for the new district….)”716

The exclusion of water purchases from the preferential rights formula made

little sense except as a self-serving move by Los Angeles. The actual cost of MWD’s

water was virtually nothing. MWD’s costs were incurred in the construction and

operation of a system to collect the water, transport it to the service area, and

distribute it among the member agencies. So long as the water rate was significantly

discounted to promote sales, the fact that water purchases were not included in the

preferential rights calculation was not so important. After 1960, as MWD shifted its revenue dependence to water sales, the water rate over time became the primary source of funds for capital costs and operating expenses. Yet, as revenues depended more and more on water sales the preferential rights formula was not amended to include those funds. The effect was that member agencies with a high dependence on

716 Flewelling, George F. Flewelling on the Metropolitan Water District Act, 47. 308

MWD water but relatively low tax base found themselves with a preferential right

significantly less that their historic water use. SDCWA was the prime example. The water authority’s goal in 1984, as it had been since the early 1960s, was to have water

sales included in some fashion in the preferential rights calculation.

As much as SDCWA fretted over the situation, preferential rights had never

been invoked and some believed it would never happen. Warren Abbott, who succeeded Carl Boronkay as the MWD general counsel, opined to the contrary that preferential rights could be invoked under the proper circumstances. Abbott stated that under Section 350 of the California Water Code, the MWD Board could declare a water shortage emergency and in that event was empowered to distribute water regardless of preferential rights. However, according to Abbott, Section 350 could be

employed only to the extent that health and welfare aspects of the emergency would dictate. Any remaining water would be subject to the preferential rights formula.717

Abbott’s analysis gave SDCWA little comfort. In the first place, for Section 350 to trump preferential rights, the MWD Board of Directors would have to declare an emergency by majority vote. Second, even if Section 350 were invoked, it would only be effective to a certain point.

In July, Harry Griffen on behalf of SDCWA wrote Los Angeles MWD

Director Mark Lainer, stating preferential rights had to be changed in order for MWD

to meet its obligation in the 1952 Laguna Declaration to satisfy the water demands of

717 Warren J. Abbott, MWD General Counsel, letter to Chairman Ibbetson; Subject: Preferential Rights, May 30, 1984, MWD archives. 309

all member agencies. Failing that change, according to Griffen, “the Authority should

commence immediate steps to secure rights to purchase water from entities other than

MWD.”718 Griffen was backed by SDCWA General Counsel Paul Engstrand, who

stated that if MWD failed to vote to amend Section 135, or if Los Angeles were able

to thwart such a change in the legislature, “then the Authority should seek sources of

water supply in addition to that available from MWD.”719

About the time he sent his communiqué to Lainer, Griffen offered an amendment to the preferential rights section of the MWD Act that had the look of a compromise among similarly-minded member agencies. The proposal would not affect preferential rights calculations before September 1, 1984, but subsequent water

rate payments would be included along with all other revenues toward capital costs.

Also, when MWD ceased to levy taxes, which the general manager determined would

be around 2024, preferential rights would be eliminated altogether. Over time, the

addition of the water rate to the preferential rights formula would bring the right more

in line with a member agency’s actual demand for water.720

SDCWA and allied agencies had apparently planned their move well. When

the Griffen proposal was put to a vote of the board on July 24, Los Angeles offered a

substitute motion to further study preferential rights and report to the appropriate

718 Harry Griffen letter to Mark Lainer, July 6, 1984, MWD archives. 719 Paul D. Engstrand, SDCWA General Counsel, letter to Roy Lessard, Chairman, July 6, 1984, SDCWA archives. 720 Carl Boronkay, MWD General Manager, letter to Board of Directors; Subject: Section 135 of the Metropolitan Water District Act, July 13, 1984, MWD archives; Carl Boronkay, MWD General Manager, letter to Board of Directors; Subject: Amendment of Section 135 of the Metropolitan Water District Act, July 16, 1984, MWD archives. 310

committees on recommended actions by December 31, 1984. The substitute motion was easily defeated and the Griffen measure passed by a margin of more than two to one. Of the votes against the proposal, four-fifths came from directors representing

Los Angeles. 721

The only remaining problem for advocates of the preferential rights amendment was to get the legislature to pass it. Unfortunately for them, even with the

MWD stamp of approval, the opposition of Los Angeles would be formidable. The

MWD-sanctioned amendment was inserted into Assemblyman Peace’s AB 2619 and referred to the Senate Committee on Natural Resources and Wildlife. At an August 6

hearing, Los Angeles representatives testified in opposition to the bill, using the same

argument for delay that Los Angeles had unsuccessfully presented in the MWD

boardroom. As a result of the opposition by Los Angeles and its ally Senate President

Pro Tem David Roberti, the bill failed to pass out of committee and Assemblyman

Peace decided not to pursue the matter further that session.722

SDCWA Pursues a New Water Supply

The SDCWA threat to seek additional water from sources other than MWD if

preferential rights reform failed would now be put to the test. While MWD

encouraged the development of local supplies to lessen the need for the district’s

imported water, the independent pursuit of imported water by a member agency was

721 Minutes, MWD Board of Directors Meeting, July 24, 1984. 722 Minutes, SDCWA Board of Directors Meeting, August 9, 1984; Richard C. Paddock, “L. A. Clout Kills Plan to Cut Water in Dry Years,” Los Angeles Times, August 9, 1984. 311

another matter altogether. To understand the issue, one had to only hearken back to the Laguna Declaration and the ghost of MWD patriarch Joseph Jensen. The declaration was most often invoked for its promise of an adequate water supply for all of its member agencies’ requirements. The other prong, less often cited, was that

MWD should be the sole provider of imported water for its service area. Any other arrangement would be duplicative and a “wasteful and unnecessary financial burden.”723 When the policy was adopted in 1952, it was directed mainly at the proposed Feather River Project, but in 1984 most MWD officials would apply it equally to a member agency seeking its own outside supplies.

MWD would be particularly sensitive to imported water shopping by SDCWA because of its own potential opportunity to acquire water from the Imperial Irrigation

District (IID), which held senior rights to about three million of California’s 4.4 million acre-foot Colorado River entitlement. In June 1984, the State Water

Resources Control Board determined that IID’s failure to implement sufficient water conservation measures was unreasonable and constituted a misuse of water under the

California Constitution. Although the decision would be appealed, it started discussions between MWD and IID on a proposal whereby MWD would finance water conservation measures in exchange for the water saved.724 A potential deal with

IID was highly attractive to MWD, as it could help replace Colorado River water that

would be lost when the Central Arizona Project came on line. MWD did not want the

723 Metropolitan Water District, “Statement of Policy: Approved by the Board of Directors of the Metropolitan Water District,” December 16 1952, SDCWA archives. 724 Metropolitan Water District, Annual Report – 1984, 7. 312

distraction of a member agency seeking its own imported water supplies, perhaps

even as a competitor. Such a possibility was not fanciful thinking. The SDCWA

general manager on August 3 had suggested the option of direct negotiations with IID

if (as it turned out) relief on preferential rights was not forthcoming. 725

On August 29, SDCWA dropped a bombshell by signing a $10,000 option

agreement to buy at least 300,000 acre-feet of water per year from the Galloway

Group, Ltd., a private company that planned to provide the water by building a storage dam on the Yampa River in northwestern Colorado. Before going public on the proposal, water authority officials notified MWD and the city of San Diego, from

whom they received opposite reactions. San Diego Mayor Roger Hedgecock sent a

letter endorsing the deal, while MWD General Manager Boronkay opined the water

transfer would be impossible to implement under the Law of the River.726 Boronkay’s

reaction to the press was more imaginative. He was quoted as saying the decision was

“shocking” and asked whether “members of the authority actually smoke (controlled substances) before meetings? Do they look woozy in public? Was there any slurring of words?”727 Harry Griffen responded to the skepticism by saying the most SDCWA

stood to lose if the deal were not consummated was the $10,000 option deposit, and

725 Lawrence R. Michaels, SDCWA General Manager, letter to Board of Directors; Subject: Metropolitan Water District negotiations with Imperial Irrigation District, August 3, 1984, SDCWA archives. 726 Minutes, SDCWA Board of Directors Meeting, August 29, 1984. 727 Cheryl Clark, “S. D. makes water deal,” San Diego Union, August 30, 1984. 313

that all of the implementation issues were Galloway’s problem, not the water

authority’s.728

The terms of the Galloway proposal were attractive. The project would be

operable by 1989, SDCWA would pay no more for delivered water than 90 percent of

the MWD water rate, and Galloway would be responsible for implementation. The

option included a provision allowing assignment of the water authority’s interest to

MWD, although Galloway preferred to negotiate with SDCWA. 729

At least one reason Galloway preferred to negotiate with SDCWA was that

MWD would not consider it. Aside from their belief the proposal could not be

implemented under the Law of the River, district officials did not want Galloway to

serve as a precedent for market-based water transfers. A deal with IID would be more

doable, as it only involved river apportionments within California, and MWD hoped

to get the water for the cost of conserving it.

Between September and November, MWD staff unleashed a barrage of position papers, opinions, and letters intended to crush any hope that the Galloway deal might somehow be consummated. The California deputy attorney general who advised the state’s Colorado River Board addressed the legal issues, concluding the

Galloway proposal was “simply not achievable within the practical realities of

Colorado River law and development.” To deliver Yampa River water to SDCWA, the upper basin states would need to agree to increase their required delivery to the

728 Minutes, SDCWA Board of Directors Meeting, August 29, 1984. 729 Ibid. 314

lower basin states, the lower basin states of Arizona and Nevada would need to agree

that California’s apportionment could exceed 4.4 million acre-feet, and the California

contractors would have to waive their priorities. The lawyer concluded that none of

these conditions might happen. 730 MWD fully agreed with the state attorney’s opinion.

Moreover, MWD argued that the Galloway plan, if successful, would undermine decades of work within the existing Law of the River to shore up the

reliability of deliveries to the Colorado River Aqueduct. MWD was carefully

developing water acquisition proposals, such as the one with IID, to conform to the river’s priority system, and if the Galloway proposal upset that system all of the district’s work would be for naught. Even if the proposal failed, the attempt to implement it would destroy carefully nurtured relationships with the other basin states.731

MWD officials claimed that even the suggestion SDCWA could obtain large amounts of water from the upper basin would hinder ongoing attempts to obtain more supplies from the State Water Project. Northern Californians and environmentalists would simply say the south could get its water elsewhere.732

730 Douglas B. Noble, Deputy Attorney General, letter to Vernon E. Valentine, Chief Engineer, Colorado River Board; Subject: Purchase of Lease of Upper Colorado River Basin Water Rights, October 3, 1984, MWD archives. 731 Carl Boronkay, MWD General Manager, letter to Board of Directors; Subject: Analysis of Option Agreement between the Galloway Group, Ltd., and San Diego County Water Authority, September 11, 1984, MWD archives. 732 Ibid. 315

MWD’s list of horribles included a disastrous impact on district revenues if

SDCWA were to purchase hundreds of thousands of acre-feet per year from a third party. Because MWD’s costs were largely fixed, the sale of less water would necessarily increase the water rate for all other member agencies unless SDCWA were forced to pay a special charge to make them whole. 733 MWD continued its attack with a summary of environmental issues, and questioned whether SDCWA could force MWD by an action in eminent domain to provide Colorado River

Aqueduct space to transport the Galloway water.734

SDCWA General Counsel Paul Engstrand’s response to the MWD assault on the legality and wisdom of the Galloway proposal was more of a policy argument

than a legal one. He acknowledged the upper basin states’ consent was probably required and left the question open whether Arizona’s consent was needed. Engstrand

did not address the issue whether the priority system under which the California

contractors operated would preclude delivery to SDCWA.735

Engstrand was probably correct that if all of the interested parties with rights on the river supported it, the Galloway plan could be implemented. The problem was

733 Carl Boronkay, MWD General Manager, and Warren J. Abbott, MWD General Counsel, letter to Board of Directors; Subject: Proposed Water Service Agreement Between The Galloway Group, Ltd., and San Diego County Water Authority, with attachments, November 9, 1984, MWD archives. 734 Ibid.; Warren J. Abbott, MWD General Counsel, letter to Board of Directors; Subject: Analysis of Legal Opinions Re Proposed Water Service Agreement Between The Galloway Group, Ltd. and San Diego County Water Authority, with attachments, November 9, 1984, MWD archives. 735 Paul D. Engstrand, SDCWA General Counsel, letter to Board of Directors; Re: Proposed Galloway Agreement, October 4, 1984, MWD archives. 316

that all of those parties were against it. Among the documents produced in the MWD

reports to its directors were letters of opposition by most of the basin states.736

SDCWA Loses its Allies on the MWD Board as Galloway Wanes

As the uproar over the Galloway proposal developed, serious doubts about the

feasibility of the project began to be heard in the SDCWA boardroom. On September

20, John Cranston, an attorney who had been on the SDCWA board for 20 years and

a water authority representative on the MWD board for ten years, temporarily

abandoned his quiet demeanor to label the Galloway plan as “a desert mirage.” He

warned that San Diego would “needlessly antagonize” other states in an effort

“doomed to failure.” 737 Director Larry Hirsch, a ten year member from the city of

San Diego, said the proposal was “a legally devious concept” lacking in engineering and financial judgment.738

On November 20, the MWD Board of Directors voted to officially oppose the

Galloway plan. Only Director John Starkey from SDCWA voted against the measure.

The other directors from SDCWA abstained as did four directors from the Municipal

Water District of Orange County. 739 With the MWD vote, San Diego members of the

MWD Board reportedly admitted that the Galloway proposal was doomed. The final

736 Carl Boronkay, MWD General Manager, and Warren J. Abbott, MWD General Counsel, letter to Board of Directors; Subject: Proposed Water Service Agreement Between The Galloway Group, Ltd., and San Diego County Water Authority, November 9, 1984, MWD archives. 737 Cheryl Clark, “Water deal support seen washing away,” San Diego Union, September 21, 1984. 738 Michael Richmond, “Water-buying plan’s support evaporating,” San Diego Tribune, September 21, 1984. 739 Minutes, MWD Board of Directors Adjourned Regular Meeting, November 20, 1984. 317

nail in the coffin came in December when the four states of the Upper Colorado Basin

Commission formally voted unanimously to oppose the deal. In response, SDCWA

Board of Directors Chairman Nat Eggert remarked, “Personally, I think the plan is dead.”740 Although the SDCWA board, with Chairman Eggert’s support, extended its

option agreement with the Galloway Group in January 1985 for an additional two

years, the matter was not seriously considered again. 741

Repercussions of the Galloway Proposal

SDCWA officials put a brave face on the Galloway experience. Chairman Eggert

claimed in December 1984 that the water authority had made its mark and was no

longer being treated lightly. According to Eggert, while the basin states continued to

object to the proposal, San Diego was credited with courage in taking the initiative

and introducing new ideas on water delivery. 742 Indeed, a Los Angeles Times editorial

commended the SDCWA for doing just that.743 Whether the newfound stature might translate into some tangible benefit was another matter.

Unfortunately for SDCWA, just the opposite appeared to be happening. As

the Galloway drama played out, the water authority was touting Proposition B, a local

ballot initiative to allow the sale of $82 million in revenue bonds for construction of

the Pamo Dam. The ballot argument distributed in favor of the proposition stated that

740 David Smollar, “Upper Basin States Oppose County’s Plan to Lease Water,” Los Angeles Times, December 15, 1984. 741 Minutes, SDCWA Board of Directors Meeting, January 10, 1985. 742 Minutes, SDCWA Board of Directors Meeting, December 20, 1984. 743 “Fear and Loathing Over Water,” Los Angeles Times, December 28, 1984. 318

“other costs” of the project would be paid in part by MWD. Given the project

feasibility study co-funded by the two agencies and supportive statements by MWD representatives, San Diego officials relied on the expectation of MWD participation to show that the large reservoir plan would work financially. However, in October

MWD issued a press release declaring the ballot statement was erroneous and that

MWD had made no commitment to provide funds for the project.744 SDCWA

General Manager Michaels responded that MWD General Manager Boronkay had

earlier indicated he would recommend MWD participation in the project, but in any

event Pamo Dam could be constructed on a smaller scale without MWD

involvement.745 Despite the bad publicity, the bond measure passed in November, but

with only a 55 percent majority. 746 There is no proof MWD denied financial support

for the dam because of resentment over the Galloway proposal, but it is a logical

explanation for the district’s change in attitude.

While SDCWA touted the Galloway plan, MWD was attempting to negotiate

its own deal for Colorado River water with IID. An IID-MWD arrangement was

considerably more feasible under the Law of the River than Galloway. The transfer of

river water from IID to MWD could be accomplished completely inside the

California allocation. Neither the upper basin states nor Arizona and Nevada would

have to consent. Further, the deal would not actually involve a water transfer, but

744 David Smollar, “Error Cited in Ballot Plea for Reservoir,” Los Angeles Times, October 11, 1984. 745 Minutes, SDCWA Board of Directors Meeting, October 11, 1984. 746 “Prop. B wins voter approval; Pamo Dam hinges on voter approval,” San Diego Union, November 7, 1984. 319

could instead rely on the priority system. Under such an arrangement, MWD would pay IID to conserve water. IID would then refrain from using the conserved water, so

it would pass to the next priority. With IID at Priority 3 and MWD holding Priorities

4 and 5, it would be a relatively simple process. The only glitch was that the

Coachella Valley Water District and the Palo Verde Irrigation District also held

Priority 3 rights, and they would need to agree not to use the conserved water

themselves.

Before the Galloway proposal was announced, there was some discussion that

SDCWA might itself attempt a deal with IID. In fact, Harry Griffen had stated that

SDCWA should negotiate separately with Imperial, especially if MWD did not

support a change in preferential rights. In early August, however, Griffen recanted

and said his earlier statements were “a threat, a bit of braggadocio,” and that SDCWA

would rely on MWD to work with IID. However, Griffen cautioned “[i]f MWD can’t

or doesn’t follow through on negotiations, then we might look at any opportunity that

presents itself.” 747 The possibility of a IID – SDCWA negotiation would reemerge as

the Galloway proposal faded and new efforts to change preferential rights continued

to run up against the Los Angeles blockade.

MWD General Manager Boronkay realized the SDCWA affair with Galloway

was prompted in large part by the failure of preferential rights reform. Even as he

criticized the water authority over the Galloway affair, Boronkay promised he would

747 David Smollar, “Bond Sale to Build Dam Up to Voters,” Los Angeles Times, August 10, 1984. 320

work with San Diego and Los Angeles to obtain an agreement on changes in the

preferential rights rules. 748

SDCWA General Counsel Engstrand clearly delineated a connection between

preferential rights and the possibility of water authority negotiations with IID in a

January 1985 letter to his board of directors. Engstrand advised that “either section

135 [the preferential rights section of the MWD Act] should be repealed by the

Legislature or the Authority should seek to negotiate directly with IID to secure an additional source of supply.”749

If SDCWA could obtain IID water for itself rather than as a member agency of MWD, the water authority would have an independent supply not subject to preferential rights. Engstrand recognized MWD staff believed SDCWA could not purchase water from IID, and that the California apportionment under the law could only descend through the priority system. Engstrand disagreed, stating in his opinion that IID could sell the water.750

True to his word, MWD General Manager Boronkay labored during the first

half of 1985 to find a solution to the preferential rights issue acceptable to the two major antagonists, Los Angeles and San Diego. By mid-May, a proposal was vetted by the SDCWA general manager to his board chairman and MWD delegates. Under

748 Carl Boronkay, MWD General Manager, and Warren J. Abbott, MWD General Counsel, letter to Board of Directors; Subject: Proposed Water Service Agreement between the Galloway Group, Ltd., and San Diego County Water Authority, October 1, 1984, MWD archives. 749 Paul D. Engstrand, SDCWA General Counsel, letter to San Diego County Water Authority, Water Policy and Administrative Policy Committees; Re: MWD’s Section 135, January 10, 1985, SDCWA archives. 750 Ibid. 321

the Boronkay plan, the existing preferential rights formula would apply only to the

first 550,000 acre-feet of MWD supply each year. That amount reflected the district’s

fourth priority to Colorado River water, which officials presumed would be its safe

supply after the Central Arizona Project was operational. The remainder of the MWD

supply would be distributed, according to the SDCWA general manager, “according

to need.”751

SDCWA Waves an Olive Branch

On June 13, the SDCWA Water Policy Committee considered the Boronkay proposal

along with the general state of affairs between the water authority and MWD. As

usual, Harry Griffen was at the forefront. However, Griffen, who had previously led

the charge against MWD, was now in a conciliatory mood. He observed that the

water authority’s pursuit of Galloway and its interest in the IID water, for which

MWD was already negotiating, caused tremendous dissension at MWD, disrupted its efforts to acquire water from IID and in the Central Valley, and besmirched the district’s statewide image. According to Griffen, the authority’s many friends on the

MWD board bitterly resented what they felt was SDCWA’s lack of confidence in their willingness to supply San Diego’s future needs.752

751 Lawrence R. Michaels, SDCWA General Manager, letter to Chairman and Metropolitan Water District Delegates; Subject: Preferential Rights settlement, May 16, 1985, SDCWA archives. 752 Minutes, SDCWA Water Policy Committee Meeting, June 16, 1985. 322

Although he conceded the Boronkay preferential rights proposal was flawed,

Griffen recommended its acceptance in the interests of harmony and to put aside a

long and bitter fight. He then read a draft board resolution with four points:

1 SDCWA would continue to rely on MWD to meet its water needs;

2 SDCWA would not seek independent water supplies unless and until it

determined MWD could not do the job;

3 SDCWA would pursue cooperative actions at MWD to increase available

supplies and fair treatment in the event of a shortage; and

4 SDCWA would agree to the Boronkay proposal if a majority of the MWD board

favored it.

At the insistence of Director Krauel and others, the second point, stating that

SDCWA would not seek independent water supplies, was replaced by a general

statement of reliance on the Laguna Declaration. Krauel asked for the change as a

concession to local politics, but recognized SDCWA intended to suspend its own search for water.753 When considered by the full SDCWA board, the resolution as

amended was adopted with minor changes. Chairman Eggert noted the resolution was

intended to mend the authority’s damaged friendships at Metropolitan, and would let

MWD try to secure an adequate water supply for everyone.754

753 Ibid. 754 Minutes, SDCWA Board of Directors Meeting, June 13, 1984; SDCWA Board of Directors, Resolution 85-18: Resolution of the Board of Directors of the San Diego County Water Authority Adopting Water Supply Policies for the San Diego County Water Authority. 323

SDCWA clearly wanted to end the conflict with MWD. While the board’s

resolution accepted Boronkay’s preferential rights compromise, just as importantly it

left IID negotiations to MWD. Unhappy over MWD’s insistence on paying only for

the cost of conservation, IID had courted SDCWA as a means of getting the district to

pay something akin to a market price.755 With the San Diego card off the table,

MWD’s bargaining position was strengthened.

Los Angeles Nixes Another Preferential Rights Compromise

After SDCWA’s acceptance of his preferential rights proposal, MWD General

Manager Boronkay formally presented it to his own board of directors. His letter to the directors recommended adoption of an amendment to the MWD Act that would freeze preferential rights in place for 550,000 acre-feet of water per year, and leave the allocation of the remainder to the discretion of the board.756 All Boronkay needed

now was acceptance of the proposal by Los Angeles.

Having been through this before, San Diego officials were skeptical whether

Los Angeles would go along. Boronkay, however, thought the “chances are good.

I’ve urged Los Angeles to help us get this matter out of the way.” Boronkay

755 David Smollar, “S.D.’s Search for Water Causes Waves of Dissent,” Los Angeles Times, January 6, 1985. 756 Carl Boronkay, MWD General Manager, letter to Board of Directors (Water Problems Committee); Subject: Proposed Legislation Regarding Preferential Rights, June 17, 1985, MWD archives. 324

confirmed his optimism by arranging a special MWD board meeting to consider the issue. 757

Just as the San Diegans feared, Los Angeles balked, Boronkay called off the special meeting, and SDCWA’s history of frustration over preferential rights continued. A Los Angeles Times editorial urged Los Angeles to make a deal and end

San Diego’s “course of water-supply raiding,” but to no avail. 758

SDCWA Gives In

Contrary to the Times prediction, Los Angeles’ refusal to compromise on preferential

rights did not rekindle SDCWA’s drive for an independent water supply. Water

authority directors at MWD, particularly Harry Griffen, could not see a clear path to

success in their recent endeavors and did not desire to remain pariahs on the MWD board. They wanted to reestablish the leadership and policymaking role Griffen and

Hans Doe had occupied just a couple of years earlier. Important decisions had to be made on the Colorado River supply, the State Water Project, rate structure and water rates, water conservation and recycling, and construction projects, and the SDCWA directors wanted to be players. For that, they were willing to give up the fight.

A measure of finality came in September 1985 when the water authority’s

MWD directors and the SDCWA Board Chairman responded to inquiries on the progress of negotiations on preferential rights. In a letter to the MWD Board

757 Cheryl Clark, “Proposal considered that would give S. D. more water,” San Diego Union, June 21, 1985. 758 “Treading Water,” Los Angeles Times, July 2, 1985. 325

Chairman, they stated that further efforts to change preferential rights would only cause unnecessary divisiveness, and SDCWA would rely instead on the district’s efforts to augment Colorado River supplies and expand State Water Project facilities.

Failing that, the water authority would rely on the Laguna Declaration and the water shortage emergency provisions of the State Water Code to govern. The signatories also wrote that they would prefer to eliminate the preferential rights provision entirely, or let it stand unamended.759 What had started with a bang ended with a whimper.

The Seeds of Dissension are Sown

While SDCWA reluctantly accepted its conclusive defeat in the marathon struggle over taxes and the water rate and abandoned efforts to reform preferential rights and obtain an independent water supply, those experiences left wounds that would not close. Continuing uncertainties over the Colorado River and State Water Project supplies, coupled with the failure to bring preferential rights roughly in line with actual water use, for the first time presented realistic scenarios in which the San

Diego region could suffer water shortages. For the first time, SDCWA could fail in the mission it had been created to accomplish. And even as supply reliability diminished, the water authority’s costs would rise as the water rate took on even more of the MWD revenue burden.

759 San Diego County Water Authority delegation on M.W.D. Board of Directors, and Chairman, SDCWA Board of Directors, letter to E. Thornton Ibbetson, Chairman, MWD Board of Directors, September 19, 1985, MWD archives. 326

While he fought SDCWA’s pursuit of water with the Galloway Group, MWD

General Manager Carl Boronkay also labored to change preferential rights more in

San Diego’s favor and kept those efforts going after the Galloway proposal died.

Boronkay sympathized with San Diego’s need for a higher level of supply reliability and on another plane recognized that he and MWD needed the good will of its largest

water purchaser. Unfortunately, the MWD member agencies had a difficult time

seeing past what they perceived as their own self-interest. Los Angeles could have gone along with a change in preferential rights when almost all the other member

agencies had agreed on a compromise measure. Instead, Los Angeles had the

necessary amendment to the MWD Act blocked in the legislature. Also, only four

years after agreeing to the proportionate use formula for dividing revenues between

taxes and the water rate, Los Angeles either conspired to pass “stealth” legislation

overturning proportionate use, or at least took full advantage when it came to light.

Los Angeles advanced its immediate self-interest in doing so but perhaps should have

considered the value of amicable relations in the MWD boardroom. Los Angeles was

not the only member agency mired in self-interest; it just had more tools than the

other agencies to work its will.

As with many issues in the arcane world of water politics, dissension over

preferential rights and an independent water supply for SDCWA went dormant for a period after 1985, but it would return. No one knew it at the time, but a six year

drought would begin in 1987 and with it came the water shortages San Diego officials 327 had so long dreaded. When opportunity knocked in 1995, SDCWA would answer.

But meanwhile, there was work to be done at MWD. 328

Chapter Six

Diversification, Drought, and a New Path 1986-1995

As the turmoil subsided from SDCWA’s aborted flirtation with an independent water

supply and its latest unsuccessful effort to obtain relief on preferential rights, MWD

faced an uncertain future. By 1986, the Central Arizona Project had begun deliveries

and eventually would allow Arizona to take its full Colorado River entitlement.

However, for a while there would still be unused apportionment from Arizona and

Nevada available for California, and the vast reservoirs at Hoover Dam and Glen

Canyon Dam were for the moment full. So long as those conditions lasted, California

could continue to exceed its 4.4 million acre-foot allotment and MWD could fill the

Colorado River Aqueduct.760 To provide in part for the day when Arizona would take

its full share, MWD was entering a third year of so far unproductive discussions with

IID to obtain water in return for funding conservation projects.

MWD’s second source of imported water, the State Water Project, was also a

problem. The system had an estimated “firm yield” of only a little over half its total

annual contracted entitlement of 4.2 million acre-feet, and with the defeat of the

Peripheral Canal and Governor Deukmejian’s proposed enhancements, MWD and fellow contractors were investigating other means of increasing the supply. Although

760 Metropolitan Water District, Annual Report – 1986 (Los Angeles, 1986), 9-10. 329

1986 was an extremely wet year, the state project lacked facilities to store the excess.

While the Colorado River boasted over 60 million acre-feet of storage, the State

Water Project had a total of only 4.8 million acre-feet.761 Two consecutive years of

drought could create a bad situation.

The MWD service area was still growing, with a population of 13.28 million in 1986. Of that, the SDCWA service area had a population of just over two

million.762 During fiscal year 1985-1986, MWD delivered 1.647 million acre-feet of water, of which 486,000 acre feet went to SDCWA, or almost 30 percent of the total.

Both amounts were record deliveries even though local supplies during this wet

period were relatively abundant.763 Although SDCWA had for the time being

suspended its battle to change preferential rights, the disparity between its 11 percent

share and its actual dependence on MWD would be a constant irritant.

With rising demand, reliability problems for both the Colorado River and

State Water Project supplies, and concern over how MWD would apportion water

among its member agencies if and when demand exceeded supplies, SDCWA foresaw a difficult future. The water authority in the late 1980s would continue the start it had made to better operate in the new landscape. SDCWA would hire a politically astute planner as its general manager, expand conservation and local projects programs, and work to extend its influence through public outreach and

761 Ibid., 17-21. 762 Ibid., xxxviii. 763 Ibid., 58-59. 330

government relations efforts. The adjustments, however, could only do so much, and

the hoped-for effects would not take hold immediately. Just as their counterparts at

MWD, SDCWA officials were changing with the times, but if the weather didn’t

cooperate change might be too little and too late.

The Role of the General Manager and Staff Broadens

Running MWD and SDCWA in the late 1980s was, to say the least, a more difficult task than it had been in the days when water was plentiful and agencies had only to construct facilities for delivery to an appreciative and supporting public. The environmental movement and an ever-increasing demand on limited resources had changed all that. Agency staff needed to do more than simply build facilities and operate them. In addition to the traditional roles, employees were brought in to handle environmental compliance, public relations and government lobbying, and local projects and water conservation programs. Executive staff, especially at MWD, took a larger role in resolving internal differences that directors could not resolve themselves.

MWD directors were still unpaid and the large majority either had to work at other jobs or were retired. In other words, they were either old or could only devote limited time to their duties, or both. With that makeup, the board of directors had

neither the manpower nor the expertise to personally run the district’s affairs in a

world where the issues had multiplied in their breadth and complexity. 331

MWD General Manager Carl Boronkay epitomized the new role of executive

staff. Immediately upon assuming his position, he forged the compromise over water

rates and taxes that prevented what could have been disastrous legislative

intervention. Shortly thereafter, Boronkay led efforts to find a solution to the

preferential rights controversy, achieving success with his board of directors but a

roadblock in the state legislature. Those efforts were to continue throughout his

tenure. In effect, Boronkay was forging a world turned upside down. Historically, the

board of directors set policy and managed the general manager. Now, Boronkay was

managing his board and in the process setting policy. The general manager’s

expanded role occasionally created friction. As reported by Harry Griffen, MWD

board members complained when Boronkay rejected IID suggestions in negotiations

for conserved water without consulting the directors, but they apparently did nothing

about it. 764 As the scope of staff functions grew, so did the number of employees.

MWD had 1,242 regular employees in 1980, 1,416 in 1987, and 2,073 in 1993.765

Because SDCWA operated on a smaller scale than MWD and relied on district initiatives to help implement its own local programs, growth of staff numbers

and influence occurred later, although the proportionate increase in staff at SDCWA was at least as much as at MWD. In addition to programs within its service area,

recent experience in the state legislature and in the Colorado River basin convinced

764 Minutes, SDCWA Board of Directors Meeting, September 11, 1986. 765 Metropolitan Water District, Annual Report – 1984, 123; Metropolitan Water District, Annual Report – 1991 (Los Angeles, 1991), 173; Metropolitan Water District, Annual Report – 1993 (Los Angeles, 1993), 208. 332

SDCWA officials they needed more manpower and expertise to participate at those

levels. In 1987, the water authority had 45 regular employees, two-thirds of whom

worked in the operations center. In 1995 there were 169 employees, with eight more

positions budgeted. The SDCWA general manager in 1986 was still an engineer, but

that was to change shortly.

SDCWA Prepares for an Expanded Role, But Encounters More Frustration

The SDCWA decision in 1985 to mend fences with MWD appeared to make for a

more amicable situation. Whether détente would produce quantifiable results was yet

to be seen. Harry Griffen reported to SDCWA directors in December 1986 that the

water authority’s directors at MWD were meeting individually with other MWD directors and getting to know them on a personal basis. Griffen felt the effort was paying off and SDCWA and MWD seemed to be on more friendly terms.766

As SDCWA leaders came to realize the agency needed to broaden its mission,

they encountered mounting problems in bringing the Pamo Dam project to fruition.

Shortly after the bond measure to finance the project passed, a small native songbird,

the least Bell’s vireo, was discovered on the site of the proposed reservoir. The vireo

was an endangered species under state law and a candidate for listing under the

federal Endangered Species Act. In May 1985, when SDCWA General Manager

Larry Michaels informed his board that mitigation for impacts to the vireo could be

766 Minutes, SDCWA Board of Directors meeting, December 18, 1988. 333

expensive and the bird might threaten the project itself, some directors were skeptical

and even amused.767 They would later not be so amused.

For the next two years, the Pamo Dam project kept stumbling over the

inability to secure a required Section 404 permit under the federal Clean Water Act,

mainly because impacts to the vireo could not be adequately addressed. As the

directors’ frustration heightened, so did their dissatisfaction with General Manager

Michaels. At a board of directors meeting on March 12, 1987, while opposition to the

Pamo project by the Environmental Protection Agency was being aired, Michaels

abruptly resigned his post during a lengthy closed session.768 One anonymous director

observed that Michaels “was probably the best chief engineer they could have had,” but failed as a manager.769

SDCWA did not choose a permanent successor to Michaels until the next

November. Finally admitting the times called for something more than a construction engineer, the board hired Lester Snow, who had been director of the Tucson Active

Management Area, a regional water planning district. Snow, who held a master’s degree in water resources management, was not an engineer; he was a manager and a planner. 770 Within a year of Snow’s ascension, the water authority bowed to the

767 Cheryl Clark, “Songbird may jeopardize proposed dam,” San Diego Union, May 17, 1985. 768 Michael Richmond, “General manager resigns from county water post,” San Diego Tribune, March 13, 1987; 769 Frank Mickadeit, “County water authority manager resigns,” Escondido Times-Advocate, March 13, 1987. 770 R. B. Brenner, “Arizona man is chosen by water board,” San Diego Union, November 13, 1987. 334

environmental impact issues and suspended efforts to advance the Pamo Dam project.771

In keeping with General Manager Snow’s background, in 1988 SDCWA

formed a new Water Resources Planning Department to address long range resource planning and policy analysis needs. The new department would analyze water storage

and imported water requirements, keeping interest alive in the sorts of projects that

had been stymied in the recent past, and evaluate financial aid and oversight for conservation projects that would create verifiable water savings.772 Although

SDCWA had been heading in this direction for some time, Snow formalized the

expanded functions.

Just as SDCWA was redefining its place in the San Diego region, it faced the

possibility of taking on an entirely unexpected role far removed from its historic

purview. In November 1988, the San Diego Gas and Electric Company (SDG&E), a

privately owned utility, announced an agreement to merge into Southern California

Edison (SCE), another privately owned company that provided power to much of

Southern California.773 The proposed merger was immediately opposed by San Diego

city and county leaders, who saw the merger as a threat to regional identity. Along with like-minded SDCWA officials, to counter the threat they envisioned a government takeover of the utility with SDCWA as the likely vehicle, given its

771 San Diego County Water Authority, Forty-third Annual Report (San Diego, 1989), 47. 772 Ibid., 52-54. 773 Ibid., 68. 335

overlapping jurisdiction, interrelated activities, and condemnation powers.774 In

December 1988, with financial participation from the city of San Diego, the SDCWA

Board of Directors authorized a study of the impacts of an SDG&E and SCE merger

and the feasibility of a public ownership alternative. Meanwhile, the water authority

general counsel drafted legislation amending the County Water Authority Act to

allow SDCWA to condemn SDG&E’s gas and electric operations. The proposed

legislation was introduced when the legislature convened in January 1989, amid

fervent opposition from the affected utilities. 775 In May, when it became apparent the

legislation would not get out of committee, the amendment to the water authority’s

act was dropped in favor of an option to create a new county utility district. At the time, SDCWA’s Sacramento lobbyist said the agency never felt very comfortable in any event with the prospect of operating an energy utility. 776 Thus ended the agency’s

short foray outside the water industry, which was probably a good thing. SDCWA

had plenty to do within the realm of water.

The idea that SDCWA would become the purveyor of energy for San Diego

County made little sense. If SDCWA had taken over SDG&E, the water authority’s governing body, appointed mostly by water districts, would have been a bad match for the agency’s functions. Eventually, the governing structure would have probably

774 Gottlieb and FitzSimmons, Thirst for Growth, 43. 775 SDCWA Board of Directors, Resolution No. 89-59, “Resolution of the Board of Directors of the San Diego County Water Authority Reviewing Actions Taken Pursuant to Resolution No. 89-4 and an MOU with the City of San Diego Accepting the Final SDG&E Study, Making Findings, and Directing Further Actions,” December 14, 1989. 776 Daniel C. Carson, “Water Authority changes tactics on SDG&E takeover,” San Diego Union, May 12, 1989. 336

changed, with the popular election of directors a likely outcome. That would have

meant the water purveyors had lost control of their supplier, a result none of them

wanted. The real impetus for even considering a water authority takeover of SDG&E, both at the city of San Diego and in the SDCWA boardroom, was apparently the

alternative of a takeover by Southern California Edison, which operated out of Los

Angeles. The threat of becoming a colony of the megalopolis to the north could be a powerful motivator in the world of energy and in the water world.

The Preferential Rights Controversy Never Goes Away

Although SDCWA’s contentiousness over the MWD preferential rights rules subsided after 1985, it remained a sore issue in San Diego. In a long memorandum to his board of directors in March 1987, SDCWA General Counsel Engstrand argued

that the appropriate solution to the problem was to have the MWD Act amended to eliminate preferential rights. In its place, Engstrand recommended a provision instructing the MWD Board of Directors to provide, as far as practicable, a water

supply to meet all member agency needs, and if supplies proved inadequate to

allocate water “for the greatest public interest and benefit.” Engstrand’s concern was

heightened by the fact that MWD had so far not been able to secure more water from

the State Water Project, and its proposed water conservation deal with IID was

floundering. 777

777 Paul D. Engstrand, SDCWA General Counsel, “Reappraisal of Impact on San Diego County Water Authority of MWD’s Section 135,” March 4, 1987, SDCWA archives. 337

Engstrand’s plea for what he considered a fair allocation of MWD’s resources

in time of shortage was, as usual, not well received by the city of Los Angeles. In

response to a city council request in February 1988, the Los Angeles city attorney

opined that the city’s large preferential right to MWD water was enforceable, except

to the extent superseded by health and safety requirements under Water Code Section

350. This mirrored the opinion of MWD General Counsel Abbott in 1984. Further,

the city attorney asserted, to exercise its preferential right Los Angeles did not first

have to exhaust its own water resources. He acknowledged that “[i]f the City of Los

Angeles were to exercise its full entitlement to purchase water, it is likely that the San

Diego County Water Authority, and any other member agency that is currently

purchasing water in excess of its entitlement, could be correspondingly curtailed in its

future water purchase from the District.”778 This could not have comforted SDCWA officials.

As reflected in the Engstrand memorandum of March 1987, SDCWA’s preference for a preferential rights fix had shifted from including credit for water sales, with a consequent increase in the SDCWA proportionate share, to complete elimination of the system. In a letter to MWD General Manager Boronkay in January

1989, SDCWA General Manager Snow argued that in times of shortage, water should

be allocated based on existing needs, not on prior financial contributions under any

particular formula. Snow noted that in 1968, SDCWA had obtained a change in the

778 James K. Hahn, Los Angeles City Attorney, “Report No. R 88 0105; Report Re: City of Los Angeles Entitlement to Purchase Water from the Metropolitan Water District,” (1988), MWD archives. 338

County Water Authority Act preferential rights formula to include water sales, and

was now sponsoring legislation to abolish the provision altogether. Snow urged

MWD to do the same. 779

As announced, the preferential rights section of the County Water Authority

Act was abolished during the 1989 legislative session.780 Similar action on the MWD

Act was not forthcoming.

SDCWA’s evolution in its attitude toward preferential rights reflected a more

fundamental question about the nature of water as a public resource. Should water be

apportioned to those with the right of first use or the financial wherewithal to acquire

it, or should it be distributed for the highest public good? In California as in other

jurisdictions, both sides have legal support. The development of the West required the

ability by private entities to acquire a water supply and during the latter half of the

nineteenth century California developed a detailed system of water rights. Within

certain limits, those rights could be transferred to other private parties for value

received. However, as the state matured there was a growing appreciation for water as

a precious resource that transcended property rights. In 1928, a state constitutional

amendment provided that all waters of the state must be put to reasonable and

beneficial use. Any water in excess of reasonable and beneficial use would be

available for others.781 As the twentieth century progressed, court decisions

779 Lester A. Snow, SDCWA General Manager, letter to Carl Boronkay, MWD General Manager; Re: Water Supply Reliability and Section 135, January 16, 1989, MWD archives. 780 San Diego County Water Authority, Forty-third Annual Report, 69-70. 781 California Constitution, Article X, Section 2. 339

developed the public trust doctrine, which recognized that even when individual

water rights were put to a reasonable and beneficial use, those rights could be

diminished by a compelling public need. In California, the public trust doctrine was

famously applied to the rights of the city of Los Angeles to water flowing from the eastern Sierras. The 1983 California Supreme Court held in National Audubon

Society v. Superior Court that, although Los Angeles had the requisite appropriative rights and depended on the water to meet critical needs, the state as trustee for its

citizens had the right and responsibility to ensure some of the water would be diverted

to maintain the environmental values of Mono Lake.782 The decision did not destroy individual water rights, but it did signal that individual rights and the public trust

must both be taken into consideration when determining the appropriate use of water.

While the public trust doctrine and the SDCWA desire to abolish preferential

rights shared similar philosophical roots, the desired ends were quite different. The

public trust doctrine was most often invoked to preserve environmental values;

SDCWA officials wanted what they saw as a more equitable apportionment of water

for urban, industrial, and agricultural use.

Over the years, representatives of the city of Los Angeles suggested they might be willing to include capital contributions from water sales in the preferential rights equation if the time value of contributions were also adjusted for inflation.783

Under that scenario, the Los Angeles contributions in MWD’s early years to pay

782 National Audubon Society v. Superior Court, 33 Cal. 3rd 319 (1983). 783 Erie, Beyond Chinatown, 123. 340

bonded indebtedness on the Colorado River Aqueduct would have far more weight

than SDCWA payments for water in the 1980s and 1990s. The Los Angeles

suggestion was arguably a reasonable method for valuing financial contributions but it would have still left SDCWA with a preferential right much lower than its

proportionate historic purchases from MWD, and therefore would not solve the water

authority’s problem. Whether or not the preferential rights formula was unfair, if it

did not provide SDCWA something approaching its usual proportionate share of

MWD allocations, SDCWA officials felt they had to consider the acquisition of additional water from somewhere else.

It did not help SDCWA’s argument for a fair allocation of water based on need that MWD (and SDCWA for that matter) had been set up more as a consortium

of shareholders than as a governmental entity with a mission to dispense its assets for

the public good. The old sore point, preferential rights, was based on financial

contributions, and voting strength was determined by property values, not population.

Like shareholders of a private corporation, in defending preferential rights Los

Angeles believed it was only protecting its financial investment.

MWD Finally Closes a Deal with IID

The proposed water conservation agreement between MWD and IID that seemed so

promising in 1984 was still in limbo at the beginning of 1988. The idea of providing

water to MWD for only the cost of conservation rather than at some market price

continued to rankle the Imperial Valley, but the pressure to make a deal was 341

increasing. IID had failed to interest SDCWA as a potential buyer, so that leverage was absent. At the same time, IID was under orders from state regulators to conserve

and a recent agricultural downturn causing lower water sales made the prospect of an

alternate source of funds attractive.784

As 1988 ended, MWD and IID finally had a deal. Under the agreement, MWD

would pay for a conservation program consisting of projects such as irrigation canal linings that, when completed in five years, would save about 100,000 acre-feet of water per year. The conserved water would be delivered by the Bureau of

Reclamation from Lake Mead and provided to MWD by diversion at its Colorado

River Aqueduct. The arrangement seemed simplicity personified, but simplicity was

rarely possible under the Law of the River. Under the proposed agreement, MWD

would have the exclusive right to the conserved water and the water would retain its

position in the third priority under the California Colorado River contracts, coming

out of the 3.85 million acre-foot agricultural entitlement. That would be fine for

MWD but it would fly in the face of the district’s previous insistence that any water conserved by IID could not be transferred, but would instead be available to other contractors in the order of their priority. Because the Coachella Valley Water District

(CVWD) and Palo Verde Irrigation District (PVID) shared the third priority with IID,

they would have rights senior to MWD’s fourth and fifth priorities. The agreement

784 Ibid., 183. 342

between MWD and IID did stipulate that approval by CVWD and PVID was needed

for it to take effect, but those requirements could be waived. 785

The agreement was approved on December 22, 1988, by the MWD Board of

Directors, with only one “no” vote. The SDCWA delegates voted for the deal. 786 In

February 1989, CVWD sued to invalidate the agreement.787

MWD spent most of 1989 in negotiations with IID, CVWD, and PVID, and

the parties finally settled in December through a device known as the Approval

Agreement. The agricultural agencies agreed that MWD could have IID’s conserved water, but it would be delivered under the district’s fourth or fifth priorities, and under certain shortage conditions CVWD would be entitled to 50,000 acre-feet per year, or about half the conserved water.788

The MWD-IID conservation agreement was an important breakthrough in the

reallocation of Colorado River supplies, but neither party was completely satisfied.

MWD had earlier hoped to realize much more than the 100,000 acre-feet per year the

project would conserve, as it stood to lose more than 600,000 acre-feet from the river

when Arizona and Nevada took their full apportionments. Also, because the final deal

was not a water transfer but rather an arrangement in which senior priority holders

785 Carl Boronkay, MWD General Manager, letter to Board of Directors; Subject: Resolution on Agreement with Imperial Irrigation District for the Implementation of a Water Conservation Program and Use of Conserved Water, with attachments, November 30, 1988, MWD archives. 786 Minutes, MWD Board of Directors Meeting, December 22, 1988. 787 Metropolitan Water District, Annual Report – 1989 (Los Angeles, 1989), 139. 788 Carl Boronkay, MWD General Manager, letter to Board of Directors; Subject: Authority to Enter into Agreement and Supplemental Agreement for Approval of Imperial Irrigation District- Metropolitan Water District Water Conservation Agreement, with attachments, December 1, 1989, MWD archives. 343

would allow the conserved water to pass through to MWD, the district had to make

concessions to CVWD to get its cooperation. IID, on the other hand, would not have

made any deal but for the state mandate that it curtail the waste of water. Since IID

did not have the finances to fund expensive conservation, it was forced to find a partner. When faced with the need to give up some of its water, IID insisted on a

“market price,” meaning whatever the traffic would bear. Unfortunately for IID, despite some preliminary interest from SDCWA, the only viable customer was

MWD, which insisted on paying only for the cost of conservation. Though imperfect

for both parties, MWD realized its goal of acquiring new water and IID staved off the

state threat to reduce its water supply.

As project implementation began, MWD looked forward to additional

conservation agreements. IID, however, still had visions that future transactions

would be water transfers at a market price. For that, it needed a willing partner.

Long-term Drought Highlights SDCWA Vulnerability

The drought that had been long feared began in 1987, peaked in March 1991, and did

not end until 1993. As it lengthened, MWD lost the ability to fulfill the promise of the

Laguna Declaration that it would provide an adequate water supply for its member

agencies. The experience heightened the district’s resolve to bolster existing water

supplies and create new ones, and renewed SDCWA’s interest in finding additional

water to add to the supply from MWD. That interest, ignited by an opportunity,

would in time fundamentally change SDCWA and its relationship with MWD. 344

The dynamics of drought are such that the need for imported water intensifies

as the lack of precipitation depletes local runoff and storage. With MWD, as the drought extended into its third and fourth years, deliveries to member agencies did

not decrease but rather increased dramatically. The gamble was that the drought

would end before the district exhausted storage on the Colorado River and the State

Water Project. In fiscal 1986-1987, MWD delivered 1.826 million acre-feet of water to its member agencies, compared with the previous record amount of 1.647 million acre-feet a year before. The amount increased to 1.927 million acre-feet in 1987-

1988, and 2.109 million acre-feet in 1988-1989. In 1989-1990, MWD deliveries rocketed to 2.501 million acre-feet, over 50 percent more than the last pre-drought year of 1985-1986.789

SDCWA purchases from MWD also rose steadily as the drought continued.

MWD delivered 486,579 acre-feet to the water authority in 1985-1986, 520,892 acre-

feet in 1986-1987, 529,930 acre-feet in 1987-1988, and 592,216 acre-feet in 1988-

1989. Deliveries to SDCWA jumped to 672,844 in 1989-1990, making an increase of

about 186,000 acre-feet, or 38 percent from 1985-1986.790

For Los Angeles, dwindling supplies from the Owens Valley meant the city

would have to rely increasingly on MWD. In the last pre-drought year of 1985-1986,

the city received about 490,000 acre-feet of water through its Los Angeles Aqueduct

789 Metropolitan Water District, Annual Report – 1990 (Los Angeles, 1990), 45. 790 Metropolitan Water District, Annual Report – 1986, 60; Metropolitan Water District, Annual Report – 1987 (Los Angeles, 1987), 53; Metropolitan Water District, Annual Report – 1988 (Los Angeles, 1988), 39; Metropolitan Water District, Annual Report – 1989, 41; Metropolitan Water District, Annual Report – 1990, 38. 345

and bought 81,855 acre-feet from MWD. In 1986-1987, about 480,000 acre-feet came

from the aqueduct and 125,176 from MWD; in 1987-1988, about 415,000 acre-feet was from the aqueduct and 148,262 from MWD; and in 1988-1989, about 330,000 acre-feet came from the aqueduct and 230,148 acre-feet from MWD. 1989-1990 saw

an even more drastic reduction in Los Angeles Aqueduct supplies, down to just over

200,000 acre-feet, with purchases from MWD rising to 385,065 acre-feet.791 From

1985-1986 to 1989-1990, Los Angeles purchases from MWD increased about

304,000 acre-feet, or 370 percent.

Heading into what became the fifth year of drought at the end of 1990, two things were clear. First, the MWD service area had not taken the unfolding water

crisis seriously. Despite conservation, reclamation, and local project initiatives of the

last decade, the primary reaction to the drought was to import more water. Second,

Los Angeles had demonstrated that when its own aqueduct failed to deliver, the city would dramatically increase its draw on MWD.

In November 1990, as California headed into what was normally the wet season, the MWD Board of Directors instituted a staged program under which, if the drought persisted, tiered water delivery limits would be instituted. Dubbed the

Incremental Interruption and Conservation Plan (IICP), the program consisted of five increasingly austere stages of water conservation, beginning with Stage I, which sought a voluntary ten percent reduction in deliveries from the previous year. Stages

791 Ibid.; Los Angeles Department of Water and Power, Urban Water Management Plan – 2010 (Los Angeles, 2011), 111. 346

II through V mandated increasing levels of reduction in “non-firm” deliveries and

smaller but increasing reductions in “firm” deliveries. Non-firm deliveries included

agricultural water, of which SDCWA was by far the largest customer. At Stage V, the

last tier, non-firm deliveries would be cut 50 percent and firm deliveries by 20

percent. Although MWD would calculate the amount of water allotted to each

member agency under the IICP, the member agency would decide how to distribute

the water within its service area. Member agencies would pay double the firm water

rate for deliveries exceeding their allocation and receive a credit of half the firm delivery rate for water to which they were entitled but did not take. In adopting the

IICP, MWD activated Stage I.792 The board of directors voted overwhelmingly to

adopt the IICP, with both the Los Angeles and SDCWA delegations in support.793

As the winter wore on and the hoped-for precipitation did not come, MWD

moved rapidly through the IICP conservation stages, reaching Stage V effective

March 1, 1991. The 50 percent reduction in non-firm deliveries and 20 percent drop in firm deliveries made for an overall 31 percent reduction. By late February, it was clear that would not be enough. On March 4, the MWD Board created a new Stage VI to take effect on April 1. Under State VI, non-firm deliveries would be cut by 90 percent and firm deliveries by 30 percent, for an overall reduction of 50 percent. The

SDCWA delegates voted against implementation of Stage VI, but only because they had argued for a smaller reduction in non-firm deliveries, to 80 percent, offset by a

792 Carl Boronkay, MWD General Manager, letter to Board of Directors; Subject: Incremental Interruption and Conservation Plan, with attachment, November 20, 1990, MWD archives. 793 Minutes, MWD Board of Directors Meeting, November 20, 1990. 347

larger reduction in firm deliveries to 35 percent. SDCWA delegate Michael Madigan

explained that if some water was not reserved for agriculture, mature crop-producing

trees would die. 794

Keeping trees alive was just one of the problems facing the SDCWA Board of

Directors as it debated how to comply with the 50 percent reduction. After two lengthy meetings in early March, the board adopted an ordinance designed to meet the reduction goal. The ordinance did not strictly conform to MWD’s 30 percent reduction in firm deliveries and 90 percent reduction in non-firm deliveries. Rather, after receiving comments from its member agencies, businesses, special interest groups and the public, SDCWA fashioned a plan to preserve what it could of the economic and human values that water sustained.795

Then the weather turned wet. March precipitation on the State Water Project was more than 200 percent of normal, with accompanying gains in the water supply for the Los Angeles Aqueduct. Moreover, because of increased precipitation and the fact that Arizona and Nevada were still not using their full apportionments, Colorado

River supply projections increased to an almost full aqueduct capacity of 1.2 million

794 Carl Boronkay, MWD General Manager, letter to Board of Directors; Subject: Incremental Interruption and Conservation Plan, Stage VI, with attachment, February 26, 1991, MWD archives; Minutes, MWD Board of Directors Meeting, March 4, 1991. 795 SDCWA Board of Directors Meeting, March 7, 1991; Minutes, SDCWA Public Hearing re Ordinance 91-1, March 14, 1991. 348

acre-feet. Based on the good news, the planned move to Stage VI on April 1 was

rescinded and MWD stayed at IICP Stage V.796

Even as precipitation improved, the prospect of a 50 percent reduction in supplies finally prompted MWD member agencies to drastically cut their water use.

Although March 1991 saw the lowest MWD deliveries for the year, deliveries stayed well under the average of recent years for the rest of 1991 and through 1992.797 In

March 1992, reduced deliveries and adequate moisture allowed MWD to return to

IICP Stage III, and to Stage I, voluntary conservation, the next month.798 When

California received heavy precipitation in early 1993, Governor Pete Wilson

officially announced the end of the six-year drought on February 24, 1993.799

The drought and its impact on water supplies were eye-openers for all of

MWD’s member agencies, but most profoundly for SDCWA, the agency most reliant

on MWD to satisfy regional water requirements. The contrast between the

experiences of Los Angeles and SDCWA during the crucial months had to be

unsettling in San Diego. In fiscal year 1990-1991, drought and environmental

constraints reduced the city’s deliveries from the Los Angeles Aqueduct to about

130,000 acre-feet, far removed from the 490,000 acre-feet of just a few years earlier

796 Carl Boronkay, MWD General Manager, letter to Board of Directors; Subject: Incremental Interruption and Conservation Plan – Recommendation of Stage V as the Appropriate Conservation Level, with attachment, March 28, 1991, MWD archives. 797 Metropolitan Water District, Annual Report – 1991, 40; Metropolitan Water District, Annual Report – 1992 (Los Angeles, 1992), 35. 798 Carl Boronkay, MWD General Manager, letter to Board of Directors; Subject: Water Supply Update, June 30, 1992, MWD archives. 799 Metropolitan Water District, Annual Report – 1993, 6. 349

and substantially less than the 200,000 acre-feet of 1989-1990.800 To help alleviate

the losses, in that peak drought year Los Angeles took over 412,000 acre-feet from

MWD, more than ever before. At the same time, SDCWA saw its deliveries from

MWD fall from 672,000 acre-feet the previous year to 559,276 acre-feet.801

The critical water shortage at SDCWA was not caused by its relatively low

percentage of preferential rights at MWD. Preferential rights were not invoked by

MWD during the drought. In 1991, SDCWA had a preferential right to only 12.23

percent of the MWD supply but during the fiscal year received 24.8 percent of MWD

total deliveries of 2.264 million acre-feet.802 During the second half of the fiscal year,

when MWD mandatory conservation ramped up, SDCWA received an even larger

portion of the district supply. Of almost 808,000 acre-feet delivered by MWD to its

member agencies from January through June 1991, SDCWA received 229,684 acre-

feet, or 28.4 percent of the total. 803 This roughly approximated the percentage of the

MWD supply SDCWA had purchased in preceding years.

The problem for SDCWA was not that its share of MWD supply dramatically

decreased. It did not. The problem was that the SDCWA service area depended

almost entirely on MWD for its water supply, and when MWD failed, there was no

other source upon which to draw. According to MWD, in fiscal 1990-1991 Los

Angeles delivered an “adjusted local supply,” which included its Los Angeles

800 Los Angeles Department of Water and Power, Urban Water Management Plan – 2010, 111. 801 Metropolitan Water District, Annual Report – 1991, 45. 802 San Diego County Water Authority, Forty-fifth Annual Report (San Diego, 1991), 23, 92. 803 Metropolitan Water District, Annual Report – 1991, 37-40. 350

Aqueduct deliveries, of 341,376 acre-feet, and bought 412,000 acre-feet of MWD

water. MWD’s third largest water user that year, the Municipal Water District of

Orange County, had an adjusted local supply of 201,724 acre-feet, much of which

came from aquifers underlying the Santa Ana River, and a take from MWD of

231,634 acre-feet. SDCWA had an adjusted local supply of 46,395 acre-feet, and received 559,276 from MWD. 804 Based on those numbers, the SDCWA service area got 92.3 percent of its water supply from MWD, while Los Angeles and the Orange

County agency received only 54.7 and 51.1 percent, respectively, of their total supply from the district. San Diego’s distinction and its vulnerability was a lack of alternate water supplies. That is not to say concerns over preferential rights were unimportant.

If the drought had continued and preferential rights had been invoked, the results could have been catastrophic.

The drought reinforced the fear that the SDCWA service area’s almost total reliance on MWD for its water supply was no longer a safe strategy. Unfortunately though, by the early 1990s opportunities for diversification were negligible.

SDCWA’s aborted attempt to acquire alternate water supplies in the mid 1980s had shown significant new water rights were difficult to acquire, and even if that could be achieved, MWD was indisposed to allow the use of its conveyance system to bring someone else’s imported water to the region. However, if an opportunity did arise,

SDCWA would be receptive.

804 Ibid., 45. 351

MWD Attempts to Mollify SDCWA Fears over Preferential Rights

By 1993, the acrimony over SDCWA’s flirtation with the Galloway Group had faded,

and the water authority’s representatives at MWD were once again working within

the mainstream of leadership. Hans Doe had died five years earlier, but the now venerable Harry Griffen still held a position of influence on the MWD board,

although younger directors, most notably city of San Diego representatives Francine

Krauel and Christine Frahm, were assuming larger roles. In February, Griffen observed at the SDCWA board meeting that the water authority was in a position to play a leading role in guiding decision making at MWD.805

Preferential rights, however, was still a potentially disruptive issue. Although

Los Angeles continued to be adamant in its support of the existing rules, MWD staff looked for ways to diffuse the issue. In December 1993, MWD Deputy General

Counsel Setha Schlang authored a memo which argued preferential rights was not as much of a threat as SDCWA imagined. Schlang maintained that General Counsel

Warren Abbott had overstated its importance in 1984, and the declaration of a water emergency by MWD under Water Code Section 350 would entirely supersede preferential rights. Further, Schlang suggested a strict application of the preferential rights rules might run afoul of the California constitutional requirement that water be used reasonably. But even as she attempted to trivialize the issue, Schlang acknowledged that Water Code Section 350 would take precedence only if the MWD

805 Minutes, SDCWA Board of Directors Meeting, February 11, 1993. 352

Board of Directors declared an emergency, that Los Angeles disagreed with her opinion, and that litigation would likely result from a failure to honor preferential rights. 806 These flies in the ointment significantly dampened the intended message.

On another tack, MWD lawyers opined that changes approved in December

1993 to the district revenue structure would increase SDCWA’s preferential right. To

help mitigate the problem identified years earlier that MWD’s expenses were largely

fixed but its revenues, consisting mainly of the water rate, were variable, the board

approved a “readiness to serve” charge to take effect in fiscal 1995-1996. Although

based on past water sales, MWD attorney Sydney Bennion stated that because the

readiness to serve charge was not an actual purchase of water, it would be included in

the preferential rights calculation. Bennion came to the same conclusion regarding

two other new charges: a “new demand” charge assessed for increasing water usage,

and a “connection maintenance” charge. Because the new charges were tied mainly to

water use, over time and depending on how much revenue they raised, SDCWA’s

preferential right would slowly rise. 807

SDCWA representatives on the MWD board supported the new rate structure

and the capital improvement program it financed, but with the caveat that MWD

should take action to guarantee “the Authority’s need for supply assurances equal to

806 Setha Schlang, MWD Deputy General Counsel, letter to General Counsel; Subject: MWD Act Section 135 – Preferential Rights, December 1, 1993, MWD archives. 807 Sydney B. Bennion, MWD Deputy General Counsel, letter to General Counsel; Subject: Effect of Preferential Rights on New Rate Structure, March 30, 1994, MWD archives. 353

its financial contributions can be met.”808 In other words, SDCWA still wanted MWD

to fix the discrepancy between the water authority’s actual draw on the district’s water supply and its much smaller share if preferential rights were ever invoked. As it stood, preferential rights remained as always a constant reminder that in the event of another water shortage, the San Diego region could face disaster.

Opportunity Knocks and SDCWA Answers

With no prior public notice it was considering such a thing, the SDCWA Board of

Directors voted on September 14, 1995, to enter into a memorandum of understanding with the Imperial Irrigation District to develop an agreement in which

IID would transfer conserved water to SDCWA. The vote in favor of the MOU was

19 to 6, with the dissenters objecting to some of the declarations in the document but not to the idea of obtaining drought protection through water transfers.809 The MOU,

executed on September 19, merely stated in substance that the two agencies would

work to arrive at acceptable deal terms, and were not bound in any way to enter into a

final agreement. The MOU was more remarkable for its preamble, which recited a

litany of reasons why SDCWA desired to seek another water source in addition to its

MWD supplies. Among the recitals were:

1 Lack of reliability of MWD supplies from the Colorado River and State Water

Project;

808 Minutes, MWD Board of Directors Meeting, January 10, 1995. 809 Minutes, SDCWA Board of Directors Meeting, September 14, 1995. 354

2 MWD’s failure to guarantee it will meet all water needs;

3 SDCWA’s overdependence on MWD;

4 Lack of representation on the MWD Board of Directors in proportion to its

financial contributions;

5 Preferential rights;

6 Characterization of agricultural water by MWD as “surplus” and subject to

interruption; and

7 MWD encouragement of member agencies obtaining independent supplies.

Despite the complaints, SDCWA also asserted it would continue to remain a member

agency of MWD and rely on the district for a large portion of its water supply. In a

much shorter statement, IID emphasized it wanted an agreement in which water was priced at “fair market value.”810 This condition was in stark contrast to IID’s 1988

agreement in which MWD obtained water for the cost of conservation and which

MWD wanted to repeat in new conservation agreements with IID.

SDCWA obtained a better potential partner in IID than it had with Galloway

ten years earlier. Unlike Galloway, IID had a secure water right and as a California contractor would not become a target for other basin states that perceived a violation

of their rights. On the other hand, MWD would not be favorably disposed to losing perhaps hundreds of thousands of acre-feet in water sales each year to SDCWA, or to

the water authority becoming a competitor for IID water. MWD would again argue

810 Memorandum of Understanding between Imperial Irrigation District and San Diego County Water Authority, September 19, 1995, SDCWA archives. 355 that the Law of the River did not permit water transfers by California contractors, and would not easily allow the use of its Colorado River Aqueduct, the only existing conduit to the urban coast, to move the IID water.

The 1995 MOU signaled the start of long and bitter struggle culminating in

October 2003 with a series of agreements collectively referred to as the

Quantification Settlement Agreement, or “QSA.” Under the QSA, the concerned

California contractors, including MWD, agreed to a water transfer from IID to

SDCWA that would ramp up over 15 years to 200,000 acre-feet per year, with a term of at least 35 and as many as 75 years. SDCWA also received 77,700 acre-feet a year for 110 years from water that would be conserved by a concrete lining of the All-

American and Coachella Canals. The QSA provided significant concessions to MWD and the Coachella Valley Water District, and would prove costly to SDCWA in terms of the price paid for the water, the use of MWD’s aqueduct, environmental compliance, and socio-economic impacts in the Imperial Valley. Yet, the QSA only occurred at all because SDCWA succeeded in convincing the State of California, the

United States Department of the Interior, and the other basin states that the water transfer was in their interests as the key component of a plan to more efficiently use the West’s limited water resources.811

811 For a contemporaneous report on the development of the QSA, see James J. Taylor, “The Colorado River Quantification Settlement Agreement on the Brink – A View from San Diego,” California Water Law & Policy Reporter 13, no. 7 (April 2003): 191-196; and James J. Taylor, “ The Colorado River Quantification Settlement Agreement – Wrapping Up the Deal,” California Water Law & Policy Reporter 14, no. 3 (December 2003): 67-71, and also at Western Water Law & Policy Reporter 8, no. 2 (December 2003): 35-39. For opposing views of the QSA, see Erie, Beyond Chinatown, and Walker, Thirst for Independence. 356

The QSA as a Culmination and a Fundamental Change of Relationship

As stated in the 1995 MOU, the primary reason SDCWA pursued a water transfer

with IID was that it could no longer rely on MWD as its sole source of imported

water. The water authority’s dearth of preferential rights exacerbated the situation,

but more fundamentally the 1986-1993 drought demonstrated there would be times

when MWD could not meet its member agencies’ water needs. MWD’s second and

third biggest water users, the Municipal Water District of Orange County and the city

of Los Angeles, had alternate supplies to help deal with MWD shortages and

SDCWA wanted its own alternate supply.

In Beyond Chinatown, Steven Erie portrays the SDCWA negotiations with

IID as a drive for independence from MWD prompted by the fear that “San Diego

could never be a real metropolis as long as it depended on Los Angeles for its water

supply.”812 Additionally, Erie claims “the IID-SDCWA deal does not bring one single

drop of new water to Southern California. This was the same water, but with a

SDCWA tag rather than an MET tag on it.”813

Erie is correct that fear of Los Angeles domination is a recurring theme in San

Diego. That had been most recently demonstrated by the reaction to the proposed

acquisition of the local energy utility by Southern California Edison, and the questionable decision by SDCWA to consider, albeit for a short time, entry into the energy business. Fear of Los Angeles, however, was not the primary reason SDCWA

812 Erie, Beyond Chinatown, 106. 813 Ibid., 113. 357

looked for alternate water sources. Erie concedes that San Diego feared water

shortages from MWD because of the failure of the Peripheral Canal, the potential that

regional growth might outstrip supplies, the prolonged drought, and preferential

rights. These and other factors were recited by SDCWA in its 1995 MOU with IID as

justification for a potential water transfer. Yet Erie will not acknowledge they were

the main reasons the water authority pursued an agreement with IID.

Erie repeatedly characterizes the SDCWA goal as independence from MWD.

In fact, the title of his chapter on the water transfer is “David and Goliath? San

Diego’s Quixotic Quest for Independence.”814 Perhaps San Diego officials would have pursued independence if it had been possible, but it was not and they knew it.

What SDCWA wanted was supply diversification so that if MWD failed to fully deliver, there was another option. Los Angeles and the Municipal Water District of

Orange County had large alternate supplies and it was prudent for San Diego to assemble a similar portfolio. SDCWA had far too much of a stake in MWD to leave it. Although MWD’s Laguna Declaration promise to satisfy all member agency water needs was legitimately in doubt, the district still was capable even during drought of satisfying a large portion of those needs. If SDCWA had walked away from MWD, it

would have given up its rights to a share of the district’s water supply.

Even if Erie were to agree SDCWA was prudent to seek diversification of its

water supply, he maintains the IID transfer did not bring any new water to Southern

California. Such would have been the case in 1995 when MWD could fill the

814 Ibid., 97. 358

Colorado River Aqueduct with the unused apportionment of Arizona, but water officials knew that would change in the next few years, and it did. Since Arizona started taking its full apportionment in the late 1990s, MWD has scrambled to fill the hole in its aqueduct and the SDCWA water transfer contributes to that effort. Also, the IID transfer water has a priority right senior to MWD’s priority on the river and is therefore more reliable. In the unlikely event IID’s deliveries were ever reduced due to shortages, and only after the MWD fourth and fifth priorities were eliminated,

SDCWA’s transfer water would bear a shortage only in the same proportion as IID’s entire third priority right.815 In addition to being more reliable than MWD’s Colorado

River water and helping to fill the aqueduct, the IID transfer water is a SDCWA supply, not a MWD supply. That means the water cannot be apportioned by MWD among its member agencies; it belongs entirely to SDCWA.

Contrary to Erie’s assertions, the SDCWA-IID water transfer is neither a paranoid overreaction to fears of Los Angeles domination nor a valueless purchase of water that Southern California already had. To give Erie his due, the agreement is certainly not without its problems, but that inquiry is beyond the scope of this work.

SDCWA got its alternate supply but it took a “water war” with MWD to make it happen, a war that has not yet ended. Since the 1995 MOU was signed, MWD sued

SDCWA to stop the water transfer (the suit was withdrawn when the QSA was signed), SDCWA sued MWD over its “wheeling rate” through the Colorado River

815 “Agreement for Transfer of Conserved Water by and between Imperial Irrigation District and San Diego County Water Authority, Dated: April 29, 1998, Section 11.1, SDCWA archives. 359

Aqueduct, and sued and lost a case against MWD challenging the validity of preferential rights. Ironically, SDCWA and MWD are together as defendants in a lawsuit challenging the QSA. In 2010, SDCWA launched a new lawsuit challenging the MWD wheeling rate, application of the preferential rights rules, and a 2004 MWD decision to deny financial aid to any member agency (such as SDCWA) that sues to challenge MWD water rates. The QSA lawsuit and the 2010 SDCWA suit against

MWD are ongoing as of 2012. This spate of litigation is the antithesis of the previous half century of SDCWA membership at MWD when there was no litigation at all between the two agencies. Additionally, SDCWA and MWD have since 1995 made several contentious requests under the California Public Records Act for documents the other agency might possess. To say that SDCWA is currently a pariah at MWD would be an understatement.

Common Threads

The pursuit of an alternate water supply by SDCWA officials at the end of the twentieth century raises the question whether that action was prompted by a change in the mindset of the regional leadership or a change of circumstances, or both.

Circumstances had indeed changed from the time Fred Heilbron ruled the water authority. The environmental movement, growing water demands throughout the west, and a public that had become less inclined to support large infrastructure projects made the acquisition of additional supplies to accommodate growth a far more uncertain proposition. Heilbron’s basic strategy was simple: prod MWD into 360

securing enough water so that all member agencies would get all the water they needed, thus eliminating the need to pursue alternate supplies and rendering preferential rights harmless. That strategy stumbled in the 1970s and 1980s, and broke down when MWD could not meet demands in 1991.

Heilbron’s successors in 1995 saw their mission just as he did: to provide whatever water the region needed. As a one-function government agency, SDCWA had no competing mission. The difference between Heilbron’s time and the 1990’s was not what the agency should do, but how it could be done. Interestingly, the city of San Diego, by far the largest stakeholder at SDCWA, had become a key supporter of an alternate water supply in the 1990s, in contrast to its tepid reaction in the 1950s to financing additional imported pipelines and the State Water Project. The reason, of

course, was self-interest, as it was with all the member agencies. In the 1950s,

SDCWA held most of the region’s local water supplies and a majority of preferential

rights within the water authority. In the 1990s, with SDCWA’s preferential rights

abolished and the reliability of deliveries uncertain, the city had a decidedly more

positive view of potential new resources.

Heilbron himself had threatened to have SDCWA join the State Water Project

separately from MWD in 1956 when the district’s Joseph Jensen was one of its

biggest critics. Perhaps SDCWA would have carried out the threat if it and like-

minded agencies had not gotten MWD to finally support the project.

Heilbron was so successful at MWD that the result was not only a bountiful

water supply for a time, but also SDCWA’s complete dependence on MWD for its 361

water. By 1995, when the water supply had become thinly spread by the relentless growth of previous decades, finding a viable alternate source would be difficult. The

new leaders, however, were cut in the mold of Heilbron, and as such were determined

to find more water. Under circumstances considerably more challenging than

Heilbron ever encountered, they obtained a new water supply.

The Progressive Experiment a Century Later

MWD and SDCWA have operated over the decades as a workshop testing the

progressive premise that government, acting in the guise of special districts, should

provide services essential to the community. The progressives viewed government as

a better alternative than private business, which was guided more by the desire to

make a profit than to benefit the community. Government involvement in these

entrerprises grew but has manifested itself in different ways. Some utilities such as

natural gas and electricity are often privately owned but heavily regulated by

governmental public utilities commissions. Other essential services such as medicine

and automotive fuel are less regulated but subject to frequent debates over the

imposition of additional government controls. Today however, the great majority of

Americans receive their drinking water from a government utility. Private firms tend

to operate only the smallest water systems.816 The preference for control of water by

816 Megan Mullin, Governing the Tap: Special District Governance and the New Local Politics of Water (Cambridge, Massachusetts: The MIT Press, 2009), 19. 362

government is here to stay and has been strengthened by the development of the public trust and beneficial use doctrines.

It is another question how special districts have fared and adapted as the government vehicle to manage water resources. As single-purpose agencies, special districts focus on one goal but in doing so tend to discount other worthy and

sometimes competing values. In their early years, MWD and SDCWA were able to concentrate on the single purpose of delivering water with overwhelming public support and little interference. Although they would have preferred to enjoy that situation forever, balancing interests intervened. Northern Californians have succeeded in limiting the amount of water MWD can take from their part of the state.

Every water deal and construction project MWD and SDCWA attempts is subject to environmental statutes and regulations that can require costly mitigation and significantly change or even kill a proposal. The growth the agencies were formed to support now places demands on them that they are hard pressed to meet. To their

credit, MWD and SDCWA have adapted to the more difficult world, but it has meant

more staff, more costly projects, paying for water that had once been virtually free,

and forming necessary alliances with federal, state, and local government.

In the complex world of the twenty-first century, MWD and SDCWA are still

what they were created to be: water providers. In that endeavor, they probably

succeeded better than any other form of government might have. Over time,

competing interests have invaded their world and changed the way they do business.

That was not the desire of the water agencies, and has frankly made them less 363 successful in their single purpose. But it has brought balance and perspective that did not earlier exist.

The Future

The fight between MWD and SDCWA today is about money. Although there are important collateral issues, the main conflict is over the price MWD charges SDCWA for transporting water from the IID transfer and the All-American and Coachella

Canal linings through the Colorado River Aqueduct. Both parties agree that MWD can only apply actual transportation costs, but they disagree on what those costs are.

MWD member agencies have fought over money before, most remarkably the decades-long struggle over the apportionment of revenues between taxes and the water rate. This time, SDCWA is the only member agency wheeling a significant volume of water through MWD facilities and for that reason is opposed by all the other member agencies, who perceive that a reduction in the wheeling rate for

SDCWA would result in an increase in their water rate. The current battle is being waged not in the MWD boardroom or the legislature, but in the courts; SDCWA alleges that MWD’s fees are illegal.

Whatever the outcome of the current unpleasantness, SDCWA must and will remain a member agency of MWD. Preferential rights notwithstanding, SDCWA owns a significant and vital share of MWD’s water rights and would lose those rights if it were ever to leave the district. By the same token, most of MWD’s costs are 364

fixed, and as the current litigation demonstrates, MWD cannot afford to lose its revenues from SDCWA. It is an uneasy marriage but it is better than divorce.

Eventually, today’s fight between SDCWA and MWD, backed by the

district’s other members, will subside but the core issues that have produced friction over the decades among the water hungry agencies will continue to emerge in some way or another. Those issues are and always have been the struggle for an adequate water supply at the lowest possible cost, fueled by self-interest. 365

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