Background & Key Dates
The Kern Water Bank was developed in response to wide fluctuations in California surface water supplies. It is a highly effective water storage project designed to enhance groundwater resources, to supplement inconsistent surface water supplies, and provide a more stable, reliable and sustainable source of water particularly in dry years. The Kern Water Bank generally accomplishes this by storing surface water that becomes available in wet years, including flood water flows that might otherwise not be conserved, in a groundwater aquifer. Those banked water supplies are later recovered for beneficial uses, typically in dry and critically dry years, when surface supplies are significantly diminished.
For decades prior to the Kern Water Bank’s development by the Kern Water Bank Authority (KWBA), most of the 20,000 acres on which the Kern Water Bank was built was used for farming. In 1988, the property was acquired by the California Department of Water Resources (DWR) on behalf of the State Water Project (SWP) Contractors, which planned to develop a functioning water bank on the property known as the Kern Fan Element of the Kern Water Bank (KFE). The SWP Contractors paid all the costs of DWR’s efforts to develop a water bank on the KFE property. Despite spending tens of millions of dollars and years of studies, testing and other efforts, DWR encountered many legal, institutional and environmental impediments to the implementation of a water bank on the property. DWR ultimately concluded that development of a water bank on the KFE property by DWR as part of the SWP was not feasible and halted all work on the KFE banking project.
Prompted by several dry water years and disputes by and among SWP Contractors relating to the allocation and management of SWP water supply shortages, mediated negotiations between the SWP Contractors and DWR in 1994 led to the Monterey Agreement. The Monterey Agreement was a Statement of Principles proposed to avoid litigation and settle a number of longstanding differences between certain of the SWP Contractors and DWR relating SWP management, water allocations and the operation of the SWP. One of those principles was providing for the transfer of the KFE property to local water agencies who believed in the water bank concept and were willing to take the financial and environmental permitting risks to develop the property into a functioning water banking facility, which would become known as the Kern Water Bank project. As provided in the Monterey Agreement, SWP Contractors were to obtain determinations from their respective Boards of Directors as to whether the Statement of Principles was acceptable, and, if ratified, their SWP long-term water supply contracts were to be amended as appropriate to conform to the Statement of Principles. The SWP amendment, vetted and approved through public processes by SWP Contractors’ Boards of Directors to implement the Statement of Principles, is known as the “Monterey Amendment.”
All of the SWP Agricultural Contractors, as well as the fifteen member units of the Kern County Water Agency, were offered the opportunity to participate in the development of a water banking project on the KFE property, which became known as the “Kern Water Bank,” but only five of these decided to do so. Those agencies that decided to participate, in addition to a mutual water company, all became member entities of a separate public entity created pursuant to the California Joint Exercise of Powers Act called the “Kern Water Bank Authority” – and are located in Kern and Kings Counties within the San Joaquin Valley.
The participants of the KWBA relinquished, or caused to be relinquished, and DWR retired 45,000 acre-feet of SWP entitlement (now known as annual “Table A amount”) to DWR in exchange for the KFE property. This retired Table A amount is presently would be worth at least $5,500/acre-foot or more than $250 million. In addition, as part of the KFE property transfer, the SWP Contractors funded minor remediation work on the site to address contamination associated with past oil and agricultural activities, and DWR transferred all future liabilities to the KWBA in exchange for $3 million. Since the transfer, the Kern Water Bank Authority has conducted necessary environmental review, including as required by CEQA, obtained the required permits, performed remediation, and invested about $70 million in infrastructure and improvements, including wells, canals, pump stations, and pipelines. In addition, KWBA members have recharged nearly 3 million acre-feet of water in wet years and recovered 1.7 million acre-feet of water in dry years when available surface supplies were insufficient. The KFE property transferred to KWBA became known as the “KWB Lands.”
The water in storage and the costs to recharge and extract it are borne exclusively by the members of the KWBA. Major infrastructure projects were funded through participant assessments, bonds and other commercial financing ($46 million), a Prop 204 loan ($5 million), and a Proposition 13 grant ($3.4 million) and two Proposition 1 grants ($4 million). KWBA’s members are solely responsible for the repayment of the loans used to fund the improvements.
Key Dates in the KFE Property and Kern Water Bank history
Transfer of the KFE Property and KWBA’s Development and Construction of the Kern Water Bank
Representatives of State Water Contractors and Department of Water Resources execute the Monterey Agreement – Statement of Principles, which included a principle for the transfer of the KFE property from the Department of Water Resources to the Kern County Water Agency in exchange for retirement of 45,000 acre-feet of State Water Project entitlement or annual Table A amount.
Statement of Principles executed by and between the Kern County Water Agency, Dudley Ridge Water District, Semitropic Water Storage District, Wheeler Ridge-Maricopa Water Storage District and Westside Mutual Water Company for the Development, Operation and Maintenance of the Kern Fan Element of the Kern Water Bank.
Kern Water Bank Authority is formally established.
Central Coast Water Agency (CCWA), as lead agency, and DWR, as responsible agency, certify a programmatic EIR for the Monterey Agreement.
Monterey Amendment to SWP contracts and agreements, providing for transfer of KFE property to the Kern County Water Agency (KCWA) and the Kern Water Bank Authority in exchange for relinquishment and retirement of 45,000 acre-feet of SWP Table A amount, as signed.
Title to KFE property is transferred to the Kern Water Bank Authority, and KWBA members relinquish, or cause relinquishment of, rights to 45,000 acre-feet of SWP annual Table A amount which contractual water rights are permanently retired by DWR.
Kern Water Bank Authority posts CEQA Notice of Determination for Kern Water Bank project, which includes a Habitat Conservation Plan developed in accordance with the requirements of federal Endangered Species Act and a Natural Community Conservation Plan developed in accordance with the California Endangered Species Act and Fully Protected Species Act.
Signing ceremony for completion of the Habitat Conservation Plan (HCP)/Natural Community Conservation Planning (NCCP) for the Kern Water Bank project. The HCP/NCCP ensures that the property will fulfill the dual roles of both water and wildlife conservation.
Kern Water Bank project is recognized by the Association of California Water Agencies with the Clair A. Hill Award for excellence in water management in California.
Construction started on major facilities, including a 6-mile-long canal, 72,000 feet of pipeline, and 40 new or rehabilitated wells.
Then U.S. Secretary of the Interior Bruce Babbitt visits the Kern Water Bank, hailing it as “the most effective groundwater storage program in the United States, probably the whole world.”
The PCL Settlement Agreement (described below) is signed, providing that the Kern Water Bank Authority shall retail title to the KWB Lands.
Construction started on the River Area Project, including eight new wells, pipelines for these wells plus seven other wells, a large diameter conveyance pipeline to route water for both recharge and recovery, and a lift station.
Construction started on the KWB Recharge and Recovery Enhancement Project, including three replacement wells and recharge basin expansion.
Construction started on the Kern Water Bank Recharge Enhancement Project.
Through December 2021 the Kern Water Bank has recharged 3 million acre-feet of water and recovered nearly 1.9 million acre-feet of water.
Litigation of Monterey Amendment and Kern Fan Element Property Transfer Agreement
Planning and Conservation League and other petitioners (PCL plaintiffs) commenced a lawsuit against Central Coast Water Authority (CCWA), DWR and others in Sacramento County Superior Court, challenging the 1995 EIR prepared by CCWA for the Monterey Agreement (PCL v. DWR).
PCL’s first amended complaint adds a 5th cause of action for invalidation of Monterey Amendment and DWR’s agreement to transfer the KFE property to KCWA (Validation Cause of Action).
The trial court, the Honorable Judge Bond presiding, enters judgment against the PCL plaintiffs denying their CEQA claims and dismissing the Validation Cause of Action, and the PCL plaintiffs’ appeal.
The Court of Appeal for the Third Appellate District opinion in the PCL v. DWR (83 Cal.App.4th 892), concludes that CCWA’s Monterey Agreement EIR violated CEQA, DWR as lead agency must prepare a new EIR, and dismissal of the Validation Cause of Action was error.
The Court of Appeal denies PCL plaintiffs’ petition for rehearing to void or set aside approvals of the Monterey Amendments and the agreement transferring the KFE property.
PCL plaintiffs, DWR and SWP Contractors issue a Joint Statement summarizes principles of settlement of PCL v. DWR, resulting from extensive mediated settlement discussions, including principle that the “Kern Water Bank will remain in local ownership and will operate as it has, but will be subject to addition restrictions on use.”
PCL plaintiffs, DWR, specified SWP Contractors, and KWBA execute formal Settlement Agreement in PCL v. DWR (PCL Settlement Agreement), requiring (among other things) DWR’s preparation of an EIR for the Monterey Amendment plus certain provisions of the Settlement Agreement (Monterey Plus Project), providing that “KWBA shall retain title to the KWB Lands” with operation and administration subject to additional restrictions, and requiring that PCL plaintiffs shall dismiss their Validation Cause of Action upon timely occurrence of certain conditions.
The PCL v. DWR trial court approved the PCL Settlement Agreement, and issued a peremptory writ of mandate (“2003 Writ”) requiring set aside of CCWA Monterey Agreement EIR certifications and preparation of new EIR by DWR pursuant to the Settlement Agreement and CEQA.
PCL v. DWR Validation Cause of Action is dismissed by Judge McMaster.
DWR drafts and finalizes new EIR required by the 2003 Writ pursuant to the Settlement Agreement’s EIR Committee process that involved several SWP Contractor and PCL plaintiff representatives.
DWR certifies Monterey Plus EIR (2010 EIR) and files it to satisfy the requirements of the 2003 Writ, including 2010 EIR and May 5, 2010 Notice of Determination.
PCL plaintiffs file consent to entry of order discharging the 2003 Writ, which is discharged in August 2010.
Central Delta Water Agency, Center for Biological Diversity, Carolee Krieger, California Water Impact Network (CWIN) and other petitioners (CD1 petitioners), file a new lawsuit consisting of a petition for writ of mandate, etc., in Sacramento County Superior Court against DWR, the SWP Contractors, KWBA and its members and others, including a CEQA cause of action challenging DWR’s 2010 EIR and a new Validation Cause of Action challenging the validity of the 1995 Monterey Amendment and 1995 DWR agreement to transfer the KFE property (CD1). CD1 petitioner Carolee Krieger verified the petition as the executive director of CWIN. Ms. Krieger was affiliated with Citizens Planning Association of Santa Barbara County – a plaintiff in the PCL v. DWR case and signatory to the 2003 Settlement Agreement that required dismissal (and precluded refiling of) the Validation Cause of Action in PCL v. DWR and agreed title to the KWB Lands (formerly referred to as the KFE property) shall remain with KWBA.
Rosedale Rio-Bravo Water Storage District and Buena Vista Water Storage District (Rosedale) petition for writ of mandate in Kern County Superior Court against DWR and KWBA and its members, alleging that DWR’s 2010 EIR did not comply with CEQA with regard to its evaluation of the Kern Water Bank (transferred to Sacramento County Superior Court).
CD1 petitioners’ file a second lawsuit in Kern County Superior Court against KCWA, KWBA and its members, and others challenging the validity of KCWA’s 1995 agreement to transfer the KFE property (CD2) (transferred to Sacramento County Superior Court and, in 2015, stayed pending the outcome of the appeals in CD1). The Honorable Judge Frawley presides over all three actions – CD1, Rosedale and CFS.
CD1 trial court issues statement of decision that the Validation Cause of Action and similar mandate cause of action are time-barred by affirmative defenses of statutes of limitation, laches, and the annual validating acts.
The trial court issues a ruling in Rosedale ruling that DWR’s evaluation of the KWB did not comply with CEQA, and issues a ruling in CD1 ruling against CDWA petitioners on all their CEQA arguments except with respect to the KWB as provided in the ruling in Rosedale.
The trial court issues a joint remedy ruling in CD1 and Rosedale that imposes restrictions on KWB recovery operations (pending discharge of the writ of mandate), but does not set aside approvals or enjoin KWB use and operation pending further CEQA review by DWR.
The trial court issues findings and peremptory writ of mandate (2014 Writ) in CD1 and Rosedale requiring DWR to prepare a revised EIR for the Monterey Plus Project evaluating the KWB.
Upon entry of judgment in CD1, CDWA petitioners appeal various CEQA rulings and the dismissal of the Validation Cause of Action as time-barred. In response, certain real parties file notices of cross appeal that CDWA petitioners’ CEQA challenge to the 2010 EIR is barred by res judicata for not challenging the same 2010 EIR in PCL v. DWR.
As required by the 2014 Writ, DWR certified a Revised EIR (2016 REIR) and filed a notice of determination (NOD), and KWBA made a responsible agency determination and filed a NOD, as required by the 2014 Writ and CEQA.
Center for Food Safety and certain CDWA petitioners (CFS petitioners) file a new lawsuit consisting of a petition for writ of mandate against DWR, SWP Contractors, and KWBA and its members in Sacramento County Superior Court, challenging the 2016 REIR under CEQA (CFS). CFS is considered an action related to CD1 and Rosedale, and are later consolidated for purpose of oral argument on appeal.
CFS petitioners file motion to stay, arguing that the trial court lacked jurisdiction to discharge or determine whether the 2016 REIR complies with the 2014 Writ until all appeals in CD1 are finally concluded.
The trial court issues a case management order setting a briefing schedule and a joint hearing in CD1, Rosedale and CFS on August 18, 2017, to hear argument concerning any objections any of the parties may have to discharge of the 2014 Writ and to address all issues raised by CFS challenging the 2016 REIR.
Trial court denies CFS petitioners’ stay motion.
The trial court issues a ruling denying CFS petitioners’ petition for writ of mandate, enters judgment against CFS petitioners, and issues orders discharging the 2014 Writ in CD1 and Rosedale. CFS petitioners subsequently appeal the judgment.
The Court of Appeal issues its unanimous published opinion denying each of petitioners’ appeals and affirming the trial court’s judgments in the CD1 and CFS cases. Those judgments (among other things) denied CFS petitioners’ petition for writ of mandate challenging DWR’s 2016 Monterey Plus Revised EIR pursuant to CEQA and adjudged that CD1 petitioners’ reverse validation cause of actions challenging the validity of the 1995 Monterey Amendment and DWR agreement for transfer of the Kern Fan Element property were time-barred.
The Court of Appeal issues an order denying CD1 and CFS petitioners’ petition for rehearing and modifying its opinion with no change in judgment.
CD1 and CFS petitioners file petitions for review with the California Supreme Court, seeking review and reversal of the Court of Appeal’s opinion and trial court judgments in the CD1 and CFS cases.
The California Supreme Court (En Banc) denies CD1 and CFS petitioners’ petitions for review.
The Clerk of the Court Appeal issues a remittitur in each of the appeals, certifying to the Trial Court Clerk that the Court of Appeal’s opinion has now become final.
CD2 petitioners file a dismissal with prejudice in CD2, which dismissal is subsequently entered by the Trial Court Clerk, thereby finally concluding the last remaining action challenging the validity of the KWB Land transfer.
All told, over 26 years elapsed between the time of the filing of the first lawsuit challenging the validity of the Monterey Amendment and the agreements providing for the transfer of the KWB Lands and the final conclusion and dismissal of all litigation challenging the validity of those agreements, which agreements the Court of Appeal confirmed have been validated.