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The Monterey Agreement – Statement of Principles

It is impossible to understand the Monterey Agreement without also having the basic State Water Contract available so you can try to grasp what is going on.

Even then it can be difficult.

We intend this page and others linked from the Monterey Amendments essay to give the public access to documents one needs to understand what occurs with these amendments.

In early 1960, the State of California put forward a statement of “contracting principles” (pdf) for the State Water Project, followed later in the year by a sample State Water Project contract that would be the basis for negotiations with all potential contractors once the public approved general obligation bonds for the State Water Resources Development System (Proposition 1) in November 1960. Around the time of the election that year, the Metropolitan Water District signed the first contract, which would provide the District with over half the project’s yield of water.

By August 1962, standard provisions of the state’s contract  for water service were  available. These provisions were in effect with the Metropolitan Water District and Kern County Water Agency contracts, and pre-Monterey amendments.

Before the Monterey Agreement was signed by the parties, the California Research Bureau produced two important reports to the Legislature about the financial and contractual situation facing the State Water Project:

  1. Financing the State Water Project (pdf)
  2. Options for Change in Financing the State Water Project (pdf)

After the Monterey Agreement was executed, the Central Coast Water Authority (in Santa Barbara County) processed draft and final environmental impact reports.

For a variety of reasons, the environmental reports were litigated because of issues with the contracts, issues with the reports’ methodology, and issues of proper public noticing. The reports were found inadequate by the Third Appellate Court of the State of California. And the California Supreme Court chose not to review the case, stating that “the Court of Appeal crafted a decision of exceelence applying the California Environmental Quality Act (CEQA) requirements to the realities of the State Water Project and contemporary California water administration.”

In the meantime, the Monterey Amendments went into effect in December 1995, a year after their “principles” had been negotiated in secret, and without legislative approval.