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Recent Developments On December 10, 2002, the Imperial Irrigation District Board of directors voted 3-2 not to approve the QSNwater transfer terms produced by the "Hertzberg Process" in mid- October. The principal reasons given by the lID Board for rejecting the transfer included uncertainty over a long-term solution for the Salton Sea; no firm commitment of funding from MWD and other agencies to cover environmental mitigation costs beyond the $30 million committed by lID; uncertainty about Interior Department approval of environmental mitigation measures for the Salton Sea; and a concern that the 7S-year term was too long. The Board directed the liD staff to develop a short-term fallowing- based transfer proposal to meet urban needs while a long-term deal was being negotiated. During the week of Dec. 16, lID and the other three California Colorado River agencies (MWD, SDCW A, CVWD) had discussions aimed at salvaging the transfer agreement, but little progress was made. All parties rejected nD's short-term transfer proposal. The State of California offered to provide funding to assist with mitigation costs, and the following week, IID and SDCW A made progress on a 45-year transfer proposal. On Dec. 27, the Interior Department issued a letter stating that if the QSA were not sighed by Dec. 31, it would invoke a little-know and never-used authority to reduce lID's 2003 water supply by approximately 330,000 acre-feet and give that water to MWD and CVWD. lID said that the action was illegal and that the Department's threat undermined support for a QSA deal because it held out the possibly that urban agencies could receive lID water without and agreement and at no cost. On Dec. 31, the lID board voted 3-2 to approved a 45-year transfer deal. San Diego County Water Authority voiced support for the deal, but MWD and the Interior Department said the proposal was flawed, in part because it allowed for termination of the QSAin Dee, 2003, if necessary environmental funding were not made available by Oct., 2003. During the first week of January, the Interior Department suspended the Interim Surplus Guidelines, effectively cutting California's Colorado River water supply to 4.4 million ace-feet. The Department also said that it would carry out its order to reduce liD's 2003 supply by 200,000 acre-feet. On Jan. 10, lID filed suit against the Department, contending that the Department had no legal authority to reduce lID's supply, and even if it did have such authority, the Depatment had violated its own rules in carrying out the decision. During the week of Jan. 13, lID and San Diego County Water Authority formally agreed to the terms of a 45-year water transfer as approved by the lID Board on Dec. 31. The California Legislature held oversight hearings on the status of the QSA on Jan. 14 and Jan 21. lID and the other California agencies agreed to resume QSA negotiations during the week of Jan 20.