Hesperia to purchase $2.5 million in water rights (March 18, 2015)

HESPERIA — The Hesperia City Council voted Tuesday night to authorize the purchase of 500 acre-feet of water rights for $2.5 million.

The Council agreed unanimously to move toward the purchase of the permanent Base Annual Production rights in the Alto Subarea from Agua Capital Management at $5,000 per acre-foot.

After the vote, Mayor Pro Tem Bill Holland borrowed a phrase used by fellow Councilman Russ Blewett. He who controls the water, controls his destiny, he said.

Holland said with an unrelenting drought and water rates continually increasing, it’s better to purchase water rights and fix the cost rather than leasing them and being at the mercy of someone else.

Councilman Paul Russ said the water rights purchase falls into the traditional economic thinking to Buy appreciating assets and lease depreciating assets.

During public comment, one resident said Hesperia’s water appetite was getting expensive. Another speaker said in light of the state’s current drought condition, she’d like to see the Council place a moratorium on all construction in Hesperia. Meanwhile, some residents supported the decision.

Hesperia is doing the right thing by purchasing its own water rights, Jessica Thorpe, 47, told the Daily Press after the meeting. Someone else could come along and gobble them up and hold us hostage.

The city is purchasing water rights at the current market rate and believes it is a very cost effective solution that will help to ensure a dependable water supply for our citizens, City Manager Mike Podegracz said Wednesday.

Staff said funding for the purchase will come from the city’s General Fund Budget by appropriating the money from its reserves with the intention of reimbursing expenditures made prior to the issuance of the debt.

On Wednesday, Valerie Wiegenstein, watermaster services manager for the Mojave Water Agency, said her organization had several recent projects that were in the same price range as the Hesperia purchase.

Based on the Mojave Alto Subarea Market Indicator from the journalofwater.com, prices have generally trended upward.

In the second half of 2014, the average price was $4,998 per acre-foot, with average prices hitting $5,000 per acre-foot in the first half of the year. Prices were $4,694 per acre-foot in the second half of 2013.

The water website said spikes in price and volume can be caused by various water transactions. The second half of 2012 saw a local spike in both price and volume, driven by a single transaction in which Hesperia purchased 5,971 acre-feet for $5,024.28 per acre-foot from the Rancho Las Flores project.

Most water experts say in U.S. water management, one acre-foot can accommodate planned water usage of a suburban family household for one year. In some desert areas where water conservation is followed and often enforced, a typical family uses only about 0.25 acre-feet of water per year. One acre-foot per year is approximately 893 gallons per day.

Source: Rene De La Cruz, Hesperia Star