CC 2014-05-27_08.i. Support Letter Lopez Surplus WaterMEMORANDUM
TO: CITY COUNCIL
FROM:
~ .
TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR
GEOFF ENGLISH, PUBLIC WORKS DIRECTOR
SUBJECT: CONSIDERATION OF LETTER TO SUPPORT THE DECLARATION OF
LOPEZ SURPLUS WATER
DATE: MAY 27,2014
RECOMMENDATION:
It is recommended that the City Council approve and authorize the Mayor to sign the
attached letter regarding the declaration of Lopez surplus water to the Board of
Supervisors with a copy to the Zone 3 Advisory Board.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is additional cost for groundwater pumping in comparison to Lopez surplus water
of approximately $250/AF. Should surplus water not be declared, staff would anticipate
pumping approximately an additional 700 acre feet of groundwater, resulting in
approximately $175,000 of increased costs.
BACKGROUND:
The City's water supply includes surface water from the Lopez Reservoir, groundwater
from the Santa Maria Groundwater Basin and a small amount from the Pismo Formation
as indicated in the chart below:
WATER SOURCE ACRE FEET PER YEAR %
Santa Maria Groundwater Basin Entitlement 1,323 AFY 35.1
Lake Lopez Entitlement 2,290 AFY 60.7
Pismo Formation Groundwater 160 AFY 4.2
The City also maintains a vigorous conservation program and has committed to
reducing the necessity to import water and maximize available local resources. City
staff makes all attempts to conjunctively use groundwater and surface water supplies to
reduce cost, utilize stored water, maintain water quality and to protect the long-term
balance of resources.
Lopez Dam and Reservoir were planned, designed and constructed under the auspices
of the San Luis Obispo County Flood Control and Water Conservation District Zone 3
(District) to provide water supply for the contracting communities of Arroyo Grande,
Grover Beach, Pismo Beach, Oceano and CSA 12 (Avila Beach/San Luis Bay Estates
area). Approximately 61% of the City's water supply comes from Lopez. The City has a
Item 8.i. - Page 1
CITY COUNCIL
CONSIDERATION LETTER RECOMMENDING THE DECLARATION OF LOPEZ
SURPLUS WATER
MAY 27,2014
PAGE 2 of4
contract with the County of San Luis Obispo that acts as the Flood Control and Water
Conservation District [see attached Contract Between San Luis Obispo County Flood
Control and Water Conservation District and The City of Arroyo Grande For A Water
Supply ("Contract")].
In accordance with Article 4 of the Contract (Attachment 2), during years when less than
8,730 acre feet of combined downstream release and entitlement water is used, then
surplus water is available and required to be offered to contracting agencies. Due to
above average rainfall in 2010-2012, the City has been utilizing surplus water that has
been declared in accordance with the Contract by the County Public Works Director to
whom the Board delegated its authority. The annual calculation to declare the
existence of surplus water is based on a formula detailed in the Contract and is not
discretionary. This year's surplus water declaration has not yet been made and has
been referred to the Board of Supervisors/District for consideration.
ANALYSIS OF ISSUES:
The amount of surplus water available annually is determined at the end of a water year
by a mathematical calculation performed by District staff and is based on the amount of
water that was not used in the prior year within the lake's safe yield of 8,730 acre feet.
The safe yield is a combination of up to 4,200 acre feet made available for downstream
release and the 4,530 acre feet of water for the contract agencies. Any unused water
within the safe yield is then placed in a pool and offered to the contract agencies on a
proportionate basis in the next water year.
The City has used its proportionate share of surplus water, but only a portion of its
annual entitlement of 2,290 AFY. The unused entitlement is then carried over as a
contribution to the surplus pool and becomes available for use in the subsequent year.
As a cooperative strategy with other contract agencies, this enables efficient use of
stored water. Given that unused water entitlements were carried over last year, staff
has anticipated the annual declaration of surplus water with the intention to maintain a
reduced pumping regime. This is a prudent measure for the health of the groundwater
basin that is experiencing low ground water levels that create a condition favorable to
sea water intrusion.
Severe state drought conditions have caused all agencies to implement rigorous
measures for resource protection. For the Lopez Reservoir, the Contract includes
provisions for the declaration of surplus water in order to protect the safe yield of the
Reservoir. In years following above average rainfall, particularly drought years, available
surplus water can and should be used to protect groundwater without impacting the
surface water resource. This is particularly important as some contracting agencies are
intending to pump more groundwater to replace state water allocations.
Item 8.i. - Page 2
CITY COUNCIL
CONSIDERATION LETTER RECOMMENDING THE DECLARATION OF LOPEZ
SURPLUS WATER
MAY 27; 2014
PAGE 3 of4
County staff has taken the position that surplus water should be a decision of the Board
of Supervisors due to the drought and their emergency proclamation. They have
indicated that the aggregate entitlements available under the Contract may be reduced,
due to restrictions imposed upon the District caused by extreme changes in long-term
meteorological patterns that reduce the Safe Yield assumptions for the Project or multi-
year drought conditions. While the Contract appears to provide some discretion to the
County to reduce water entitlement amounts during certain drought conditions, there are
no provisions in the Contract that allow the County to modify surplus water allocations.
In addition, protocols are currently being developed by the Zone 3 TAG to clarify
procedures when entitlements would be impacted. Therefore, staff also recommends
that no decisions be made regarding entitlements until those protocols are established.
Finally, there is currently a Low-Level Response Plan (LRRP) in place for the Reservoir
and the criteria for modifying releases have not yet been met by existing drought
conditions. Lopez Reservoir is currently at 56% capacity and the LRRP is triggered if
the amount of water within the Reservoir drops below 20,000 AF, as measured .on April
1st of any given year. Lake levels in 2014 were well above the trigger level. The Zone 3
TAG also actively supports evaluation of the LRRP in conjunction with drought planning,
but it is not a factor in the determination of surplus water declaration from the previous
water year.
It is important to note that on May 15, 2014, the Zone 3 Technical Advisory Committee
(TAG) recommended that surplus water be declared in the amount of not less than
2,327 AF based on a modified calculation. From staffs perspective, the declaration of
surplus water should be completed in accordance with the provisions of the water
supply contract as it has been historically calculated, which would yield slightly less
surplus supply. However, as the supply calculations yield similar supplies, staff believes
either method of calculation is acceptable for this year's declaration. If the County staff
believe that modified calculations be utilized, concurrence from all agencies prior to any
future year declaration should be established.
Given the above stated conditions and justifications, staff believes that the declaration
of Lake Lopez "surplus water'' is warranted and prudent. Staff recommends that the
City Council approve and submit the attached letter recommending the declaration of
Lopez Surplus Water to the Board of Supervisors. The Cities of Grover Beach and
Pismo Beach are sending similar letters also urging the Board to declare surplus water.
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
• Approve and authorize the Mayor to sign and submit the proposed letter to the
County Board of Supervisors;
Item 8.i. - Page 3
CITY COUNCIL
CONSIDERATION LETTER RECOMMENDING THE DECLARATION OF LOPEZ
SURPLUS WATER
MAY 27,2014
PAGE4of4
• Modify, approve, and authorize the Mayor to sign and submit the proposed letter;
• Do not approve the proposed letter; or
• Provide staff direction.
ADVANTAGES:
Submitting the proposed letter will inform the Board of Supervisors/District, and Zone 3
TAC regarding contractual obligations and the importance and intended use of Lopez
Reservoir surplus water for water year 2014-15.
DISADVANTAGES:
No disadvantages have been identified by Staff.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, May 22, 2014. The Agenda
and staff report were posted on the City's website on Friday, May 23, 2014. No public
comments were received.
Attachment:
1. Draft letter to the County Board of Supervisors
2. Article 4 of the Contract with the San Luis Obispo County Flood Control and
Water Conservation District
Item 8.i. - Page 4
Attachment 1
DRAFT LETTER
May 28, 2014
Bruce Gibson, Chair, and Supervisors
San Luis Obispo County Board of Supervisors and Directors, San Luis Obispo County
Flood Control and Water Conservation District
Room D-430, County Government Center
San Luis Obispo, CA 93408
SUBJECT: COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT-
DECLARATION OF SURPLUS WATER
Dear Chair Gibson, Supervisors, and Members of the Board:
I am writing on behalf of the Arroyo Grande City Council to urge the District to
undertake and complete the process of declaring surplus water availability at Lopez
Lake in compliance with the provisions of the Water Supply Contract that exists
between the District and the City of Arroyo Grande.
The City receives its water supply from Lopez Lake and the Santa Maria Ground
Water Basin. Since its construction, the City has relied on Lopez Lake and its
treatment facility to supply approximately 61% of the City's water needs through the
regular allocation under the contract. In addition, the City has used Lake Lopez
"surpls water'' which is more appropriately defined as "carry-over entitlement and
unused down-stream release" whenever it has been declared.
In recent years, the San Luis Opispo County Director of Public Works was given the
authority to declare surplus water as the provisions are precisely included in
accordance with the contract. According to Article 4. Distribution and Sale of
Proiect Water subparagraphs (C) and (D) the amount of Surplus Water available
annually is determined by a mathematical calculation performed by the District. This
calculation is based on the difference between the amount of entitlement water
delivered to the Agencies plus the amount released downstream and the Safe Yield of
the reservoir. The safe yield consists of up to 4,200 acre feet made available for
downstream release and the total of 4,350 acre feet of project water that is to be
distributed to the contract agencies, including Arroyo Grande. The safe yield totals
8, 730 acre feet of water. Any unused project water within the safe yield is then placed
in a pool and made available to the contracting agencies on a proportionate share
basis as surplus water in the next water year. As noted in the contract, the
determination of the existence of surplus water is based on the completion of the
process and is not discretionary.
Item 8.i. - Page 5
Since 2011, Arroyo Grande, along with the other member agencies, has been
managing our Lopez water supply by utilizing the declared surplus before our
entitlements. We have each intentionally preserved an amount of entitlement water
each year so that it can be carried over to be declared as surplus in the next year and
then used as part of that year's supply. In light of the current drought conditions, the
City may also use the surplus in the coming year to offset the demand on·the ground
water basin and limit the potential for sea water intrusion.
While the Contract appears to provide some discretion to the County to reduce water
entitlement amounts during certain drought conditions, there are no provisions in the
Contract that allow the County to modify surplus water allocations. In addition,
protocols are currently being developed by the Zone 3 Technical Advisory Committee
(TAC) to clarify procedures when entitlements would be impacted. Therefore, staff also
recommends that no decisions be made regarding entitlements until those protocols
are established.
On May 15, 2014, the Zone 3 Advisory Committee recommended that surplus water be
declared in the amount of not less than 2,327 AF based on a modified calculation.
From the City's perspective, the declaration of surplus water needs to be completed in
accordance with the provisions of the water supply contract as it has been historically
calculated which would yield slightly less surplus supply. However, we would support
the Zone 3 Advisory Committee's recommendation Ci_S well. Once surplus water is
declared, it is the City's intent to use its proportionate share in combination with the
City's ongoing conservation efforts to ensure that the City's long-term water sources
are balanced and protected.
The Arroyo Grande City Council strongly requests that the Board ensure the
declaration of surplus water be conducted per the provisions of the agreement or as
recommended by the Zone 3 Advisory Committee.
Sincerely,
T any Ferrara
Mayor
cc: Zone 3 Advisory Board
Item 8.i. - Page 6
ATTACHMENT 2
Agency leading up to and including 1he making of this Contract and the validity of the provisions
thereof and hereof.
Article 4. Distribution and Sale ofPrpject Water. The following provisions govern the
distribution of water from the Project to the Agency, to the Other Agencies and for other pmposes,
in the priorities set forth below:
(A) Lep11y Requiml Water Releases. The parties hereto acknowledge aDd agree
that Project water is subject to certain releases and minimum storage requirements imposed by law
which are not affected by the terms hereof.
(B) Entitlements. Subject to the foregoing, the District shall make available to
the Agency in each WaterY ear, to the extent possible, 2,290 acre-feet ofProject water. The District
will, in order to satisfy this entitlement and the entitlements of Other Agencies, set aside from the
Safe Yield the total of 4,530 acre-feet of Project water which will be distributed to the Agency and
the Qt4er Agencies, as established lD1der Article 4(B) hereof and of their respective W*t Supply
Contracts. The Agency's Entitlement comprises SO.SS percent of the aggregate Entitlemt.nts
awarded under all the Water Supply Contracts, including this Contract. Such percentage comprises
the Agency's Proportionate Share hereunder. Notwithstanding the foregoing, the aggregate
Entitlements available under this Contract and under the Water Supply Contracts may be reduced,
following written notice given to the Agency from the District, due to ( 1) permanent or long-term
restrictions imposed upon the District caused by (i) extleme changes in long-term meteorological
patterns that reduce the Safe Yield assumptions for the Project; or (ii) multi-year drought conditions;
or (2) temporary or short-term limitations based upon (i) reduced ability of the Project either to treat
or distribute water because of force majeure; (ii) drought conditions; or (iii) water quality standards
--
which reduce the safe, treated output of the Project at the time.
595300.2 13
Item 8.i. - Page 7
(C) Sumlus Water Bates. Project waterremainingafterthe distribution ofProject
water as described in paragraphs (A) and (B) above shall comprise "Sutplus Water" hereunder.
Surplus Water shall be sold in accordance with the provisions of this paragraph.
595300.2
(1) Surplus Water shall first be offered by the District to the Agency and the Other
Agencies in accordance with their Proportionate Shares, with a price for such Surplus
Water to be established based on the Operation and Maintenance Cost of the District
incuned in delivering the Surplus Water actually purchased by the Agency or the Other
Agencies. If the Agency or any Other Agency shall commit in writing to purchase
Surplus Water from the District under this subparagraph, it shall be obligated to pay for
such Surplus Water, whether or not in fact ordered from the District or accepted by the
Agency, so long as such Surplus Water was in fact available for the period in question.
Neither the Agency nor any Other Agency shall resell Surplus Water at any time to third
parties, without the prior written consent of all Other Agencies.
(2) The District may offer to sell and deliver any Surplus Water not purchased by the
Agency or the Other Agencies hereunder to any otherprospectivepurchaserwithoutright
of renewal, in a manner and at prices which will return to the District the largest net
revenue practicable, but in no event at prices less than those at which such Surplus Water
is offered to the Agency, unless the Agency is first allowed another opportunity to
purchase such Surplus Water at the lower price, and in each case, attempting tO recapture
the Operation and MaintenanC1! Cost, the variable co~ if any, and Debt Service
attributable to the volmne of Surplus Water actually purchased by such third parties, at
the highest price the market will then bear.
14
Item 8.i. - Page 8
(3) All revenues derived by the District from the sale of Surplus Water to the Agency,
any Other Agency or any third party hereunder shall be applied as a ~t to the
obligations of the Agency and the Other Agencies, based on the Percentage Shares of the
Agency and each Other Agency.
(D) SurplusWater, Beginningwiththe2000-01 WaterYear,SurplusWatershall
be the portion of the Safe Yield for Project water remaining after distributions of water during the
s8id previous Water Year, as described below.
Surplus Water shall be calculated for each WaterY ear by subtracting from the Safe Yield
of the Project an amount equal to the sum of the quantity of water released downstream during the
immediately prior Water Year, which shall not exceed 4,200 acre feet unless legally required by
Article 4(A) hereot: and the quantity of Entitlement water delivered to the Agency and the Other
Agencies during the immediately prior WaterY ear, excluding downstream releases and Entidement
deliv~es that occurred during the period of time that the District determined that continuous
spillway flow was occurring at Lopez Dam.
The District shall notify the Agency of the total amount of Surplus Water available for
the cmrent Water Year, and once so declared by the District, said amount shall not be changed by
the District without first obtaining the consent of the Agency and all Other Agencies.
Surplus Water plD"Chased by the Agency will be delivered to Agency in the manner
provided for the delivery of its Entitlement and to the extent that all of said surplus water purchased
by Agency is not so delivered by the end of the Water Year in question, then such undelivered
amount shall revert to District and shall not thereafter be available to Agency.
Article 5. Water Shortages. From time to time during the term of this Contract, there
may occur a shortage in the quantity of Project water available for delivery to the Agency by the
595300.2 15
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