CC 2017-01-10_09g Letter of Intent
MEMORANDUM
TO: CITY COUNCIL
FROM: TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR
SUBJECT: CONSIDERATION OF A LETTER OF INTENT TO PARTICIPATE WITH
THE CITIES OF PISMO BEACH AND GROVER BEACH AND THE
OCEANO COMMUNITY SERVICES DISTRICT IN THE REGIONAL
GROUNDWATER SUSTAINABILITY PROJECT
DATE: JANUARY 10, 2017
RECOMMENDATION:
It is recommended that the City Council authorize the Mayor to sign the Letter of Intent
(LOI) for the Regional Groundwater Sustainability Project (RGSP).
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is no direct cost associated with signing the Letter of Intent; however, if funding
associated with the groundwater model, which is a component of the RGSP and
described in the LOI, is ultimately not reimbursable as currently anticipated, then the
City will need to fund its respective portion of the groundwater model development
which is estimated to be approximately $68,000. In such case, a separate agreement
will be brought forward to the City Council. Additionally, staff resources will continue to
be required for participation in ongoing regional collaboration associated with the
project, including participation in the review of the Environmental Impact Report,
modeling efforts, development of a basin level response plan and drafting of future
agreements for future consideration by the City Council. Addressing water supply and
increasing water security remains a top priority of the City as identified in the Critical
Needs Action Plan and reiterated in the City Council’s 2016 Goals.
BACKGROUND:
In 2014, the Council directed staff to pursue the following goals:
Meet the City’s future projected water demand of its buildout population by:
Meeting the reduction in per capita use as prescribed in the Water
Conservation Act of 2009;
Proceeding with work necessary to develop a recycled water project
that can be used to prevent seawater intrusion in order to provide long-
range protection of the City’s groundwater supply; and
Ensure water use efficiency and drought protection through regional
conjunctive use, storage and management of surface and groundwater
supplies.
Additionally, in 2014, the Council supported the NCMA Technical Group’s Strategic Plan
that provides a framework for identifying common water resource planning goals and
Item 9.g. - Page 1
CITY COUNCIL
CONSIDERATION OF A LETTER OF INTENT TO PARTICIPATE WITH THE CITIES
OF PISMO BEACH AND GROVER BEACH AND THE OCEANO COMMUNITY
SERVICES DISTRICT IN THE REGIONAL GROUNDWATER SUSTAINABILITY
PROJECT
JANUARY 10, 2017
PAGE 2
objectives and to establish a 10-year work plan for implementation of those efforts,
including pursuing recycled water options.
In November 2014, the Regional Recycled Water Strategic Plan (RRWSP) was
completed that was one component of an update to the SLO Integrated Regional Water
Management Plan (IRWMP), and was funded by a Round 2 IRWM Regional Planning
Grant from the California Department of Water Resources (DWR). According to the
study, the South San Luis Obispo County Sanitation District (SSLOCSD) has the largest
volume of effluent considered in the RRWSP and the largest opportunities for large-
scale reuse.
In May of 2015, an IRWMP planning grant funded a groundwater basin characterization
study of the Santa Maria Groundwater Basin. The objectives of the overall study were
to compile previous studies and data, develop a lithologic database and prepare
geologic cross-sections, perform and analyze pumping tests, and evaluate several key
hydrogeologic issues for the study area. It provided a basis for future studies related to
a Salt and Nutrient Management Plan and the development of a numerical groundwater
model.
Also in 2015 and 2016, two specific recycled water studies specified potential regional
projects. The first was the City of Pismo Beach’s Recycled Water Facilities Planning
Study. The second was the SSLOCSD/City of Arroyo Grande grant funded Recycled
Water Facilities Planning Study. These efforts have now merged into the RRGSP.
ANALYSIS OF ISSUES:
The LOI was drafted in collaboration with the Cities of Pismo Beach, Grover Beach and
the Oceano Community Services District in order to recognize joint interests and
collaborative opportunities for ground water management and conjunctive use. Each
agency recognizes the value of a sustainable, supplemental water supply as an
additional measure to assure water supply reliability. Steps required for the RGSP
include the preparation of an Environmental Impact Report and groundwater model,
being led by the City of Pismo Beach, the establishment of a basin level response plan,
and eventual governance structure. The LOI is a first step to advance the RGSP and
secure a commitment to continue to collaborate toward establishing a new, local,
drought resistant, sustainable and highly purified water resource.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Authorize the Mayor to sign the LOI;
2. Provide direction to staff.
Item 9.g. - Page 2
CITY COUNCIL
CONSIDERATION OF A LETTER OF INTENT TO PARTICIPATE WITH THE CITIES
OF PISMO BEACH AND GROVER BEACH AND THE OCEANO COMMUNITY
SERVICES DISTRICT IN THE REGIONAL GROUNDWATER SUSTAINABILITY
PROJECT
JANUARY 10, 2017
PAGE 3
ADVANTAGES:
The LOI provides a more formal means to continue collaboration on the RGSP.
DISADVANTAGES:
No disadvantages have been identified.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
Attachment:
1. DRAFT Letter of Intent
Item 9.g. - Page 3
ATTACHMENT 1
Draft Letter of Intent – For Water Agencies
Mr. Jim Lewis
City of Pismo Beach
760 Mattie Rd.
Pismo Beach, CA 93449
SUBJECT: REGIONAL GROUNDWATER SUSTAINABILITY PROJECT – LETTER OF INTENT
Dear Mr. Lewis:
The City of Arroyo Grande submits this letter of intent to participate in the Regional Groundwater
Sustainability Project (RGSP). The Cities of Pismo Beach, Arroyo Grande, Grover Beach and the Oceano
Community Services District (OCSD) have collaborated for decades to cooperatively manage water
resources through both voluntary and formal mechanisms. Management of Groundwater resources in
the Northern Cities Management Area (NCMA) of the Santa Maria Groundwater Basin (Basin) has been
guided by several agreements and legal decisions, including the 1983 Gentlemen’s Agreement, the 2002
Management Agreement, the 2005 Stipulation, and most recently the 2008 Judgement. Today, the four
agencies collaborate on the management of the Basin through the NCMA Technical Group.
In 2009, the NCMA agencies detected early indications of seawater intrusion in the sentry wells that are
used to monitor groundwater levels and quality. The agencies responded by voluntarily reducing
groundwater pumping through significant water conservation measures and utilization of surface water
supplies. Through these efforts and above average rainfall in 2010, groundwater levels recovered to
historical levels and the seawater/freshwater interface retreated offshore. However, with the
continued drought, groundwater levels today are similar to the levels measured when early indicators of
seawater intrusion were detected and are below the trigger levels that have been established to
indicate a potential for seawater intrusion. Additionally, Lopez Lake, a critical water supply source for
the NCMA agencies, is at historic low levels. The City of Arroyo Grande recognizes the value of a
sustainable, supplemental water supply as an additional measure to assure water supply reliability
during periods of drought.
The RGSP will provide a new, drought resistant, sustainable water supply for the region. The RGSP is a
regional recycled water project that will provide advanced treatment of wastewater to produce highly
purified water for recharge to the Basin for potable use. Phase 1 of the RGSP is envisioned to include
advanced treatment and recharge of flows from Pismo Beach’s wastewater treatment plant (WWTP),
and Phase 2 would add treatment capacity to accommodate flows from the South San Luis Obispo
County Sanitation District’s (SSLOCSD) facility. The RGSP will recover a resource that is currently
disposed to the ocean, and create a new and highly reliable water supply for the region.
The RGSP will provide multiple benefits to the communities served by the NCMA agencies, including:
A new, local, drought resistant, sustainable and highly purified water resource
Improved groundwater basin quality
Protection from seawater intrusion
Offset drought impacts on groundwater, State and Lopez fresh water supplies
Reduced ocean discharge of treated wastewater effluent
Item 9.g. - Page 4
Streamlined timeline with a phased approach
The key project components include: (1) an advanced treatment plant; (2) recycled water distribution
infrastructure; and (3) injection wells and monitoring wells. The project will also include new extraction
wells, and the possibility to deliver recycled water for agricultural customers.
The City of Arroyo Grande commits our support to the RGSP, and acknowledges our shared interest in
the multi‐phase recycled water project. We agree to work together with the key project stakeholders to
develop the project, including the Cities of Pismo Beach, Grover Beach, the OCSD and the SSLOCSD. The
City of Arroyo Grande acknowledges that the multi‐phase approach provides an expedited timeline for
implementing groundwater recharge and agrees to actively participate in workshops and efforts to
define cost and benefits, and develop future project agreements as the project develops.
The City of Pismo Beach has initiated the environmental review process for Phase 1 of the RGSP to meet
the requirements under the California Environmental Quality Act (CEQA). Arroyo Grande supports
expansion of the Environmental Impact Report (EIR) currently being prepared by the City of Pismo Beach
to include evaluation of Phase 2 of the RGSP, as well as evaluation of the SSLOCSD site as a potential
preferred advanced treatment location. The EIR will be expanded to include distribution and injection
infrastructure for Phase 2 (SSLOCSD) flows, in addition to Pismo Beach flows. With the expanded EIR, a
total of three sites for the advanced treatment plant will be evaluated: (1) Pismo Beach WWTP; (2)
SSLOCSD WWTP; and (3) an offsite location to be identified. It is Arroyo Grande’s understanding that
the SSLOCSD will cover the incremental costs to include the SSLOCSD WWTP site in the EIR, as well as
the associated infrastructure to recharge Phase 2 flows. The City of Pismo Beach will continue to serve
as the lead agency for the EIR, with the other NCMA Agencies serving as responsible agencies.
Arroyo Grande supports expansion of the groundwater model that the City of Pismo Beach is currently
developing for the RGSP. The groundwater model expansion will include extending the groundwater
model boundaries to include the entire NCMA and Nipomo Mesa Management Area (NMMA) areas and
evaluation of recharge and extraction scenarios that include flows from both the City of Pismo Beach
and the SSLOCSD. Arroyo Grande supports utilizing funding from SSLOCSD settlement funds
(reimbursed) and County funds (if made available). We acknowledge the expediency of this approach to
develop a long‐awaited groundwater model for the NCMA. As a means of commitment, Arroyo Grande
will reimburse the City of Pismo Beach for our respective portion of the groundwater model
development if the costs are not reimbursed by the SSLOCSD settlement funds.
Arroyo Grande agrees to participate in the development of an NCMA Basin Level Response Plan that is
intended to establish groundwater basin pumping management guidelines tied to basin levels, similar to
the Lopez Reservoir Low Level Response Plan (LRRP). This Plan would set a framework for establishing
supplemental supplies and recharge projects, like recycled water.
Arroyo Grande acknowledges that the City of Pismo Beach will lead Phase 1 of the project, which will
provide advanced treatment and recharge of flows from Pismo Beach, with input and participation from
the other NCMA Agencies. It is our understanding that the governance structure will be evaluated
during this initial project phase with a goal of developing a regional governance structure as the project
evolves. Arroyo Grande agrees that non‐reimbursed project costs will be shared among project
participants apportioned based on benefits. The parties will coordinate on a written cost‐sharing
agreement, to be approved in conjunction with the Phase 1 activities.
Item 9.g. - Page 5
The RGSP will provide a new, local, drought resistant, sustainable and highly purified water resource to
our community. Arroyo Grande acknowledges this important benefit, along with the many other project
benefits described in this letter. Arroyo Grande is committed to advancing the RGSP, realizing its
benefits, and actively engaging in the development of the project.
Sincerely,
Mayor Jim Hill
City of Arroyo Grande
Item 9.g. - Page 6