At least some blame for one of the most complicated and intractable water-policy conundrums in the West can be laid fairly at the feet of Charles Rockwood and George Chaffey. Rockwood, a land developer, and Chaffey, a public-relations whiz, teamed up during the 1890s to create the California Development Company. The outfit constructed a crude wooden headgate and canal to divert Colorado River water into a vast expanse of desert on the California-Mexico border they grandly renamed "Imperial Valley." In 1901, settlers lured by Chaffey's promises of boundless fecundity and wealth began settling in the forbidding region; five years later, the company's primitive diversion works collapsed under pressure from the unruly river. Floodwaters chewed through the valley and poured into an ancient dry lakebed, creating the Salton Sea. Although the California Development Company quickly died, the dream upon which it was founded remained alive. The ill-fated venture by Rockwood and Chaffey was revived by others, eventually spawning a $1 billion-a-year agricultural empire in Imperial County, establishing the farmers there as owners of the most senior rights to Colorado River water in California, and setting a political and ecological trap that has slowly ensnared nearly every water user in the Southwestern United States. This fall, through a complex series of legal agreements reached under pressure from the federal government, several Southern California water agencies began hacking their way out of the snare unwittingly set by land speculators a century ago. The deals announced in late October herald a significant change in the way the region's most important surface water resource is apportioned. Distribution of the Colorado River's flows is governed by a pastiche of laws, contracts, court rulings, treaties and agreements known collectively as "The Law of the River" — a label that implies more coherence than the situation merits. Basically, it doles out the Colorado's flow in two tiers. The first tier is governed by the Colorado River Compact of 1922, which divided the Colorado's 246,000-square-mile watershed into two units — an upper basin, comprising Wyoming, Utah, Colorado and New Mexico, and a lower basin comprising California, Nevada and Arizona — and gave each basin the right to half the river's estimated annual flow. Under the compact, the lower basin's 7.5 million-acre-foot entitlement is then further subdivided by state: California was granted 4.4 million acre-feet, Arizona 2.8 million acre-feet and Nevada 300,000 acre-feet. The second distribution tier is governed by the 1931 Seven Party Agreement, which concerns priority among water agencies in California. The agreement divides the state's share into two large chunks: 3.85 million acre-feet for agricultural water agencies in the desert — the Imperial Irrigation District (IID), the Palo Verde Irrigation District, the Yuma Project Reservation Division and the Coachella Valley Water District — and 1.212 million acre-feet for the Metropolitan Water District of Southern California (MWD), which serves 16 million urban customers on the coast. Obviously, 3.85 million and 1.212 million do not add up to 4.4 million. They equal 5.062 million — 662,000 acre-feet more than California's apportionment. And therein lies one of the thorny problems the recent spate of water deals intends to solve. The Met can withdraw the full 1.212 million acre-feet only if the Interior secretary declares that there are surplus or unused flows in the river that year. There have been such surpluses almost every year, mainly because Arizona and other upstream states have not diverted all the water to which they are entitled. So over the past decade, MWD has come to rely on its full allotment — enough to supply nearly 10 million people. Rapid population growth in the other lower basin states is boosting water demand, however, and in 1996 Interior Secretary Bruce Babbitt warned that the era of Colorado River surpluses was ending. California, he said, had to come up with a plan to reduce its use to the 4.4 million acre-feet it was granted by the 1922 compact. Later negotiations set December 31, 2002, as the deadline for that plan to be submitted to the federal government. Practically, MWD has to find a replacement for the surplus flows on which it has come to rely. Imperial Valley farmers, whose water rights are held in trust by IID, have the oldest and largest claim to California's share of the Colorado River. It was to the Imperial Valley that MWD turned. Following years of contentious debate, two months of marathon talks ended in mid-October with a complex set of agreements. They have two key elements: * IID will sell water to the San Diego County Water Authority (SDCWA), a MWD member, starting at 10,000 acre-feet in 2003, increasing to 130,000 acre-feet annually in 2018 and 200,000 acre-feet in 2021, and remaining at that level for the duration of the 75-year agreement. * SDCWA will contribute $20 million to a special fund to offset socioeconomic impacts in the Imperial Valley associated with any decrease in farm activity resulting from the water transfer. Although they are an important step, the agreements alone do not satisfy the federal government's demand for a plan demonstrating reduction in California's Colorado River use. Nor do the agreements shift enough water to MWD's customers to offset the pending loss of surplus flows. (The agency is pursuing other strategies, ranging from additional agricultural water transfers to desalination to make up the difference.) The agreements do resolve some of the political conflicts set in motion a century ago by Charles Rockwood and George Chaffey — who helped give a relative handful of desert farmers control of water coveted by millions of city dwellers — but the agreements do not really address the ecological trap those speculators also set. Irrigation runoff from Imperial Valley farms drains into the Salton Sea, which serves as a crucial resource for migratory waterfowl. Water transfers that result in reduced irrigation runoff will shrink the sea, exposing its bed and possibly leading to dangerous dust storms. Reduced inflow also will cause the sea's salinity — already 30 percent greater than the ocean — to rise so high that the sea can no longer sustain life. Preventing that looming biological disaster is the focus of a wide-ranging research program loosely overseen by the Salton Sea Authority, whose executive director, Tom Kirk, is among those unmoved by the October agreement. "I feel like I'm sitting in the back of the pew of the wedding when the priest asks if anybody objects," Kirk told a Copley News Service reporter. "I do." Contacts: Adan Ortega, MWD, (213) 217-5786. Ron Hull, IID, (760) 482-9600. Dennis Cushman, SDCWA, (619) 252-6600. Tom Kirk, Salton Sea Authority: (760) 564-4888.