BOARD02567

• Board Meeting Date: 1/24/2001
• Description: CWCB Director's Report
• Board Meetings - Doc Type: Memo

1 am especially grateful to my Deputy Secretary, David Hayes, for his leadership in bringing these many complex
negotiations to a successful conclusion. His ability to translate the various parties to each other and his patience in
staying with the issues until they are resolved have been key to our success here.

1 am satisfied that the California plan is realistic and will be achieved, for at least three reasons:

First, urban Southern California has demonstrated that it is serious about restraining water consumption. Through
conservation and water recycling programs, 700,000 acre-feet of water a year, more than the entire water demands for
the City of Los Angeles, have been saved in the Met's service area. The Met projects that these savings will double over
the next 20 years.

Second, the combined lIDIMWD and the lID/San Diego water transfers will together provide a substantial increment of
water, establishing a solid base on which to build further implementation of the California Colorado River Water Use
Plan.

Third, the implementation of the CALFED agreement promises to help stabilize the water supply situation throughout
the state. The statewide CALFED agreement signed in August owes much to the MWD's early recognition that it had a
big stake in both water reliability and quality, and to its constructive participation in the program. Like the work you
have been doing in the Colorado basin, the CALFED program also incorporates the fundamental elements of a
successful water plan, including incentives for efficiency, the use of market transfers, and a commitment to
environmental restoration.

Nevada: As Nevada has moved toward utilization of its entire Colorado River allocation, the search for an innovative
means to assure that it could meet its needs during the coming decades became a high priority concern. Thanks to the
creative and cooperative efforts of our colleagues in Nevada and Arizona, a novel and imaginative solution has been
developed. Arizona enacted an offstream banking law that will permit it to store water that is not currently needed in
Arizona, so that in future years that water can be used in substitution for comparable amounts of Colorado River water to
which Arizona is entitled, and the river water can be made available to other lower basin states where it is needed. We
then put in place the final federal rule needed to make the Arizona interstate off stream banking program operative under
Arizona law. As a result negotiations are underway between Arizona and Nevada so that Nevada (and perhaps California
as well) will be able to make use of the Arizona program to avert near-term shortages.

Conclusion: As 1 look back on Colorado River efforts over the last eight years, 1 believe we can be justly pleased to have
demonstrated two things that will prove to have lasting significance, not only for the Colorado basin, but for western
water issues more generally:

First, we have learned some important lessons about process. The law of the river is not a prison that constrains us from
creativity. We can work within it, and we can do what needs to be done to meet contemporary needs on the river.
Moreover, we can do it among ourselves with working partnerships, within the states, among them, between the
states and the United States, and with tribes and other affected interests. We have worked together and made our
partnerships work.

Second, we have learned that flexibility in managing the river's limited supply of water can significantly stretch that
supply to meet new and increasing demand. We are showing that California, for all its burgeoning urban growth, can
bring its call on the river down to its legal entitlement. We have in place tools by which Nevada, whose current was
wholly unexpected when the river was divided among the states, will be able to meet its 21st century needs. We are
seeing the potential of new tools like offstream banking, aquifer storage and recovery, dry year options, inter- and
intrastate negotiations, and water marketing. We are demonstrating the capacity of river management, employed in a
nuanced way, as with the surplus criteria, to enhance our ability to meet both short and intermediate-term needs.

These are major accomplishments, not only for the Colorado River, but as examples to others of what can be done by
engaged stakeholders, along with state and federal representatives who are committed to finding fixes, rather than re-
fighting yesteryear's battles.

The past eight-years have been a productive time for those of us who use and benefit from the Colorado River, in both
the upper and lower basins. But, inevitably, for all our efforts, we leave far more yet to be accomplished than has been
done by us. As individuals we pass quickly from the scene, but the river itself, as a resource vital to both human and
natural communities, remains; and the obligation remains to look forward to the needs and responsibilities of those who

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