Less than two years after signing a contract to sell billions of gallons of water to San Diego County residents, angry Imperial Valley water leaders say the groundbreaking deal could be in danger because the San Diego County Water Authority is undermining their efforts.

Imperial Irrigation District board members say the Water Authority —— which opened an office in Imperial Valley earlier this year —— has:

• Suggested to valley farmers that the Irrigation District has cheated them by not passing money from the water transfer on to them.

• Told farmers that the controversial "fallowing" program —— taking farmland out of production to create water to sell to San Diego County —— could be "run better."

• Spread information about how much money it has paid the Irrigation District for water so far to "sway" public opinion to favor a study that says the transfer has "benefited" the valley —— a study the Irrigation District has challenged. Irrigation District officials say if the study is upheld, the Water Authority wouldn't have to pay the Irrigation District and valley residents millions of dollars in "extra" costs under the deal's terms.

Irrigation District board members sent a scathing letter to the Water Authority on May 9, accusing the agency that imports the region's water of "coming into our jurisdiction and interfering with or undercutting policies or decisions … made by the IID."

Water Authority board Chairman Jim Bond, who traveled to the valley Monday to meet privately with Imperial district board members, downplayed the brouhaha and characterized it as a misunderstanding.

He said the Water Authority plans to meet more often with Irrigation District officials to "improve communications."

But Irrigation District board member Andy Horne said Friday that his board was still very upset.

"We want them to understand that we don't appreciate what they're doing," Horne said. "They're supposed to be our partner. We met to register our intense displeasure. They seemed to understand and indicated they would back off. But that remains to be seen."

Bond, meanwhile, characterized the Irrigation District's sharp letter as an emotional outburst caused by the fact the water transfer deal is still controversial in Imperial Valley. Many people there opposed the deal and argued that coastal Southern California was trying to steal the valley's life-sustaining Colorado River supply.

But Horne said the dispute was about money and the perception the Water Authority was trying to manipulate information in the valley to save itself cash.

Horne said the dispute revolves around the very complicated conditions of the transfer deal —— and a disputed report by an independent panel of economists issued this year that stated the water transfer has not only failed to "harm" Imperial Valley, but has financially benefited it.

Water Authority leaders say the deal, which took nearly a decade to complete, will eventually supply 22 percent of all the water county residents use each year.

Under its general terms, Imperial Valley farmers have agreed to eventually sell San Diego County residents up to 65 billion gallons of water a year for roughly $52 million annually for at least 45 years, and possibly 75 years.

However, the deal would ramp up slowly over the first 19 years. And in the most controversial aspect of the deal —— at least in Imperial Valley —— farmers were asked to fallow farmland to come up with the water for the transfer in the early years.

As a condition of the deal, the Water Authority agreed to pay the Irrigation District $10 million that would only be spent if an independent group of economists ruled that the deal caused economic harm in the valley.

The group of three economists —— one chosen by the Water Authority, one chosen by the Irrigation District, and the last chosen by the other two —— would render judgment once a year. Fallowing would put farmworkers and others who rely upon the farm industry for their livelihood out of work.

This year, two of the three economists —— the Water Authority representative and the "at large" member —— ruled that the water transfer has financially benefited the valley.

The Irrigation District is challenging that finding, saying that it knows of at least 100 people who have been harmed by the deal and that it believes the two economists misused information to reach their conclusion.

Meanwhile, the Water Authority has said publicly, and written in "fact sheets," that it has paid the Irrigation District $9.3 million for fallowed water so far and that $2.3 million of that has been paid by the Irrigation District to farmers.

The Water Authority has said that the Irrigation District has "retained" the remaining $7 million, and repeated that assertion in meetings with the Imperial Valley Farm Bureau.

That has enraged the Irrigation District board. Horne said the Water Authority was telling local farmers that the Irrigation District was "gypping them" by pocketing the lion's share of the payments.

Horne said that's not true. He said the district has spent the $7 million to mitigate environmental effects caused by the transfer and to pay off some of the $26 million it had to borrow to make the transfer deal happen.

In addition, Horne said, the Water Authority's suggestion that the Irrigation District is keeping $7 million incorrectly buttresses the independent panel's ruling that the water transfer has actually benefited the valley —— and that the Irrigation District is simply not sharing the wealth.

Supporting the panel's finding, Horne said, directly benefits the Water Authority.

Because as long as there are no negative socioeconomic impacts, the Water Authority won't lose any of the $10 million it has set aside to cover those costs. If there are no impacts at the end of 15 years, the Water Authority would get the money back.

Finally, Horne and other board members say the Water Authority's actions violate the terms of the water-transfer contract, which states the Irrigation District is responsible for creating the fallowing program. He also said that the Water Authority messages will be used by "dissident" farmer groups in Imperial Valley who are suing to try to overturn the water transfer.

"This is none of their business," Horne said of the Water Authority's actions. "We're very disturbed by all of this."

Contact staff writer Gig Conaughton at (760) 739-6696 or gconaughton@nctimes.com.