By Lisa McEwen, SJV Water

Lawyers for the Friant Water Authority and the Eastern Tule Groundwater Sustainability Agency agreed to mediation Friday to settle a dispute over how quickly payments should be made for repairs to the sinking Friant-Kern Canal.

During a status conference in Visalia, both parties told Tulare County Superior Court Judge Bret Hillman via Zoom that they will work with Gail Andler, a mediator with JAMS (Judicial Arbitration and Mediation Services, Inc.), to find common ground in a breach of contract lawsuit filed in February by the Friant Water Authority and the Arvin-Edison Water Storage District against Eastern Tule.

When the mediation will take place is a sticking point, however. Gina Nicholls, who represents Eastern Tule, said the GSA prefers mediation to take place as soon as possible.

David Darroch, a lawyer for the Friant Water Authority, responded: “We are not sure we will be ready for mediation before the end of the year.” He pointed to the need for a thorough discovery process in which witness statements are taken and each side must produce requested documents.

However, he assured Judge Hillman that both sides “get along well.”

“That’s good,” Hillman said. “Communication is key. This is a complicated issue.”

To say the least.

This latest twist in the litigation followed closely on the heels of a tense two-hour meeting on Aug. 12 during which Friant Water Authority board members voted to ask four Friant-member water districts within the boundaries of the Eastern Tule GSA to help pay expected shortfalls from the massive canal project.

Those districts include the Tea Pot Dome Water District and the Saucelito, Porterville and Terra Bella irrigation districts. Tea Pot Dome voted in June to withdraw from the Eastern Tule GSA and form its own GSA with the neighboring Vandalia Water District, which is not in Friant’s sights.

Some see the move as Friant’s attempt to pressure Eastern Tule into complying with terms set out in a 2021 settlement agreement, in which Friant expected to receive $25 million annually from GSA. Eastern Tule has paid $17 million so far, not nearly as much as the agency expected. This is the reason for the lawsuit filed in February. The lawsuit alleges that Eastern Tule board members gave farmers too many groundwater credits and allowed the credits to be traded and sold so farmers didn’t have to pay for expensive groundwater.

In the meantime, the newly constructed section of the canal continues to sink due to subsidence or land subsidence caused by over-pumping of the aquifer.

The Friant Water Authority operates the canal under contract with the Federal Waterways Agency and owes up to $90 million plus interest for its share of the project’s costs. A potential $5.1 million construction payment is due in summer 2026, for which the company may not have the funds to pay.

The agency has asked the authority to explain how it plans to raise money for its share of the first phase of construction, which totals $326 million, and to ensure that a financing path is found for the second phase of construction, which is expected to cost about $247.2 million.

Friant attorney Don Davis said if Eastern Tule had followed the principles of the settlement agreement, last Monday’s actions to get the water districts to pay could have been avoided.

“They know what they have to do,” he said. “They brought this on themselves. If they hadn’t given away $20 million worth of groundwater, we wouldn’t have this deficit. They chose a free program for their farmers as part of their water trading program.”

Davis said those four districts have 60 days to appeal the panel’s decision. No legal challenges have been filed yet, but Tea Pot Dome attorney Alex Peltzer said Friday that discussions are underway with Friant to clarify cost allocation for that district.

Davis is confident that districts that already pay to discharge surface water into the canal will object to the panel’s actions.

“We’ve run out of options,” he said. “We’ve laid it out and we don’t think it’s fair to burden these costs on other people who obviously have nothing to do with it.”

As for the settlement of the lawsuit, Rogelio Caudillo, general manager of Eastern Tule, wrote in an email that Friant appears to be wasting time, spending public money on lawsuits and lawyers, and plans to take the case almost to trial before reaching a settlement.

He also asked: “Why is it also necessary (or legitimate) for Friant to penalise its own member agencies that overlap with ETGSA?”

The hearing is scheduled for June 2, 2025.