Posted by Dave Hurley
on 8/14/2008, 6:59 am
76.20.97.22
Harvest of cash: Kern County agency buys public water low, sells high
Delta fish suffered a crippling decline while taxpayers paid nearly $100
million to a Kern County water wholesaler for an environmental protection program
that was largely ineffective, a Contra Costa Times investigation has found.
In the process, the wholesaler sold water to the state for as much as $200
an acre-foot and last year bought water from the state for as little as $28 an
acre-foot.
The Kern County Water Agency was the biggest buyer in a program that
delivered discounted Delta water in a way that now appears to have been particularly
harmful to the environment. It also was the biggest seller of water to an
ill-fated, publicly-financed state program meant to protect the same environment,
the investigation found.
The Kern agency collected $96 million in taxpayer money — nearly all of it
borrowed on the bond market — for sales to an "environmental water account" that
was shelved after seven years at the end of 2007, records show.
While state water officials took steps to ensure they did not directly
repurchase the discount water, the exchanges amounted to "classic arbitrage," where
investors exploit price differences in financial instruments, said Barry
Nelson, a water policy analyst at the Natural Resources Defense Council.
"What makes this arbitrage so remarkable is they're buying the water and
selling the water to the same entity, using water that should never have been
pumped in the first place," Nelson said.
The newspaper's investigation, which spanned six months and involved dozens
of interviews and reviews of hundreds of pages of documents, some of which were
obtained through the California Public Records Act, reveals:
See http://www.contracostatimes.com/ci_10152127?nclick_check=1&forced=true
for the full story.
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