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Show have to pay for the resulting externalities, operation and maintenance, and capital costs. Charges would vary with the distance of water transmission as well as seasonal changes in flow. Under the present system, efficient water use is not the primary objective of administrative agencies. The legal and institutional constraints on the trading of water rights sometimes make allocation to the most productive uses difficult. Farmers and irrigation districts seek the lowest possible price to the user. In many cases water administrators do not even measure the water delivered ( National Water Commission, 1973). Many state constitutions in the west assert that water resources are owned by the public. Following a policy of promoting economic development, states have not levied fees on the rights to use water ( Howe et al., 1971). The doctrine of prior appropriation in water rights was developed on a first- come- first- served basis. Much of the privately developed water used in agriculture is groundwater. The National Water Commission ( 1973) suggests that groundwater reservoirs be treated as if in single ownership. Practically, this means the organization of a water management district for allocating the resource. In terms of pricing, this might mean that a pump tax could be levied on each acre foot withdrawn from the underground reservoir to build a development and operating fund. One arrangement for water pricing in irrigation districts is a combination of land value assessment and a toll for water use. The assessment is an integral part of the pricing device of public water districts which also includes a charge per unit used or water toll. These two components jointly determine the payments members make to their district. Assessments are levied annually on privately owned land within the district. The water toll is incident only upon members using water supplied to them by the district. Customarily, the toll is defined in terras of a volume unit, such as an acre foot, although occasionally it is based on the area irrigated with district water. The most usual practice is to specify a seasonal charge for each acre irrigated from the district supply. This may be the same for all crops, but most commonly varies in rough proportion to the relative amount of water applied to each irrigated crop. The entire payment incident upon a member for a given amount of water may change either in terms of its total magnitude or the proportion that the toll and assessment components bear to each other. Although emphasis is placed on the district assessment, it cannot be considered relevantly in isolation from the water toll ( Brewer, 1961). The following alternatives are used for valuing land within a district: ( 1) a single value per acre on all land assessed; ( 2) a set of per acre values, applied to land and water use; ( 3) a set of per acre values that are relative to the cost incurred by the district for supplying a particular land parcel; and ( 4) a set of per acre values applied according to the relative soil characteristics of particular parcels. Generally, the assessment is in dollars per $ 100 of the property base value; however, procedures for valuing property differ widely among districts and even within districts over time. " Old valuation practices generally used either a flat rate value for all land or some fraction of the value assigned for county tax purposes. Many districts have modified these early methods to make allowance for land of different agricultural potential" ( Brewer, 1961). Another way for recovering costs of water projects was proposed by the Stanford Research Institute. It appears that the state must recover all of the costs allocated to water and encourage the maximum use of its water facilities by dividing its water charges into two parts. The first part would be an annual fixed ( or capacity) charge, payable by the contracting agency even if it bought no water at all and covering all of the annual capital costs allocated to that agency. The charge would be fixed in the sense that it would depend not on the amount of water actually used by the agency in a given year, although it might vary from year to year because ( 1) total capital costs are repaid in amounts which change ( increase) each year over the lifetime of the project, or ( 2) because the share of the total annual capital costs allotted to any given agency might be revised to reflect changed conditions. Provision also might be made for the state itself to assume the obligation of repaying the fixed charge allocated to certain public water districts during some initial development period, providing the district agreed in turn to repay the state subsequently with interest. The second part of the charge would be a variable amount designed to cover the operation and maintenance costs of producing the water actually used by the contracting agency ( Stanford Research Institute, 1958). Three other alternatives are set forth for recovering the costs of irrigation water: 1. The state could market water on a per- unit basis, charging the water user a price designed to recover annual costs under conditions of full capacity operations. Of course, such a policy would not pay for itself until the project reached full capacity operation. 2. The state could set a price designed to cover all costs year by year regardless of the level of operations; however, such a price would be so high at the outset that almost no water would be sold. 3. The state might attempt to set a price to remain unchanged over the lifetime of the project and still recover all the costs over the long run. Such a price would require very difficult forecasts of future use and costs in addition to discouraging the growth of water use in the early years of the project's operation ( Stanford Research Institute, 1958). 14 |
