1. CVP FRIANT DIVISION San Joaquin River Settlement FriantDamFriantDam Sacramento San Joaquin Delta Sacramento Merced River

2. San Joaquin River Settlement: Status Report Ronald D. Jacobsma Consulting General Manager Friant Water Users Authority March 11, 2008

3. Friant Division Service Area and Contractors Alpaugh I.D. Arvin-Edison W.S.D. Atwell Island W.D. Chowchilla W.D. Delano-Earlimart I.D. Exeter I.D. Fresno I.D. Garfield W.D. Hills Valley I.D. International W.D. Ivanhoe I.D. Kern-Tulare W.D. Lewis Creek W.D. Lindmore I.D. Lindsay-Strathmore I.D. Lower Tule River I.D. Madera I.D. Orange Cove I.D. Pixley I.D. Porterville I.D. Rag Gulch W.D. Saucelito I.D. Shafter-Wasco I.D. Southern San Joaquin M.U.D. Stone Corral I.D. Tea Pot Dome W.D. Terra Bella I.D. Tulare I.D. City of Fresno City of Orange Cove City of Lindsay Fresno Co. WWD #18 Madera County M&I Contractors Ag Water Contractors Service Area Merced Co Madera Co Fresno Co Tulare Co Kern Co MercedMerced BakersfieldBakersfield VisaliaVisalia Madera Canal Millerton Lake Friant Kern Canal FresnoFresno

4. SJR Channel Improvements

5. Litigation Background –Federal Judge determined that USBR was not operating Friant Dam (CVP) consistent with State Law (F&G code 5937) during “liability” phase of court proceedings, meaning water needed to be released to support historical (Salmon) fishery –“Remedy” phase of court proceedings was scheduled for February of 2006 –Senator Feinstein and Congressman Radanovich prompted parties to undertake another attempt at Settlement –Settlement Agreement reached In Summer of 2006

6. Settlement Provides: –End of protracted litigation - Resolution of all legal claims –Funding and Plan for San Joaquin River Improvements –Water Supply Certainty for 20 years or more –Opportunity to recover water and/or develop water supplies –No additional financial exposure –Cooperation from federal, state and local governments and plaintiffs provides greatest chance of success for future –No material third party impacts

7. San Joaquin River Equal Primary Goals of Settlement Restoration Goal Water Management Goal

8. Settlement Goals Restoration Goal  Specified water deliveries for fishery releases based on hydrology (results in 15% average annual water supply impact for Long Term Contractors; overall water supply reduction of 19% in Friant Division (145kaf – 240kaf) )  River improvements to support naturally reproducing self-sustaining anadromous fishery Water Management Goal  Water Recovery Account Plan-$10/a.f. in wet conditions  Plan to get back water (recirculation, recapture and reuse) to reduce or avoid water supply impacts  Utilize Transfers/Exchanges/groundwater programs

9. Why Water Management Goal Is Critical Approximately 15,000 mostly small family farms on nearly one million acres of the most productive farmland in the world have relied on Friant Water supplies for the last half century Farmers, Farmworkers, Support Industries, and Communities are dependent upon Friant water Supplies for their livelihood

10. Friant LT Irrigation water contractor impacts SETTLEMENT Without buffer flows and NO recovery of water supplies. THIS IS IMPACT TO BE MITIGATED BY WATER MANAGEMENT GOAL. ANTICIPATED JUDGMENT Reduction in Water Deliveries 145,000 acre-feet360,000 acre-feet Current Riparian Releases117,000 acre-feet Additional Releases for Fisheries 320,000 acre-feet632,000 acre-feet Remaining Flood Releases140,000 acre-feet74,000 acre-feet Farm land out of production51,300 acres116,000 acres Lost Crop Production $159.3 million direct $264.9 million total $372.5 million direct $621.0 million total Income Impact $36.6 million direct $80.7 million total $93.1 million direct $200.9 million total Employment Impact (jobs lost) 1,360 direct 3,070 total 3,490 direct 7,660 total Potential Consequences of Failure to Meet Water Management Goal

11. G.W. Basin G.W. Basin G.W. Basin G.W. Basin Water Management Goal Water Recovery Opportunities Purpose: To reduce or avoid adverse water supply impacts to all of the Friant Division long-term contractors that may result from the Interim Flows and Restoration Flows provided for in the Settlement.

12. Where We Are Today SJR legislation, now embodied in HR 4074 as Title I (formerly HR 24) has passed House Natural Resources Committee Legislation on hold pending resolution of Congressional PAYGO budget rules for non- discretionary spending and further delineation and clarification of the implementation of the water management goal