Loading...
CC 2013-08-27 Supplemental Information ARROYO O o INCORPORATE. 92 * JULY 10. 1611 31. FORN'P MEMORANDUM TO: CITY COUNCIL FROM: STEVEN ADAMS, CITY MANAGER SUBJECT: AGENDA ITEM 10.A. —SUPPLEMENTAL INFORMATION DATE: AUGUST 27, 2013 Please find attached an e-mail from Kristen Barneich of the Tree Guild regarding their recommendation involving tree removals on the Police Station parking lot project, which I believe City Council Members already received directly. As a result, the architect has prepared an additional parking lot design alternative based on their recommendations, which is also attached. It is a variation of the former Alternative A, which has been designed to maximize both parking spaces and trees. They will present both alternatives at the meeting for Council consideration. A copy of the alternative plan has been provided to the Tree Guild for review. They are generally supportive, but have made some suggestions to increase street trees on Halcyon Road and to reposition trees in the memorial park area. Staff will meet with the Tree Guild to incorporate these changes should the Council direct staff to pursue this option. Let me know if you have any questions. Thank you. attachments Steve Adams From: Kristen Barneich [kbarneich@gmail.com] Sent: Sunday,August 25, 2013 9:38 AM To: Caren Ray; Jim and Betty Guthrie;Tony Ferrara;Joe Costello;Tim Brown Cc: Steve Adams; Teresa McClish;Scott P@DOT Dowlan Subject: Saved trees at Police Station site Good morning— After orningAfter lengthy discussions,the Tree Guild is recommending removal of the two eucs at the Police Station parking lot. I know Steve is going to pass on Dave Ragan's email below, and that is the primary reason for our recommendation. We agree with him. Due to all the construction and root disturbance that will take place at the site,we feel that the health of the trees may be affected. Even though it is extremely difficult to remove mature, skyline trees...we feel that in the long run this new landscape plan will be much better for the site and the City. Dave makes a very valid point that "replacement with trees appropriate for this location should result in a greater number of trees in the new parking area,there will be room for more parking spaces and the potential hazard of limb failure would be eliminated." This is probably a better long term solution. However,the Tree Guild wants to ensure that the proposed new landscape plan implements that recommendation by maximizing the number of trees on site with trees that are good sized trees,not small glorified tree/shrubs. Steve, Scott and I have come up with a list of proposed species (native sycamore,tristania, oak) and locations and Steve can fill you in on that. Again, Dave did say that the two,mature trees were viable, and came up with a comprehensive plan to save them,but we are concerned after such great lengths, that the trees could fail and we'd be left with limited area for replacement. Thank you-, Kristen Barneich President/Tree Guild of Arroyo Grande Original Message From: dragan [mailto:dragan@a,directv.net] Sent: Tuesday,August 20, 2013 1:24 PM To: Teresa McClish Subject: Saved trees at Police parking area Hello Teresa I was under the impression saving the 2 large Eucalyptus was a done deal but I wanted to pass along my thoughts on another option. Removal may be the best alternative in the long run. The root zones on the two Eucalyptus we talked about saving are currently impacted by the street, sidewalk and parking lot. Removal of the asphalt in the existing parking lot, soil excavation, addition of base material and compaction will damage additional roots. 1 The current area available for gas and water exchange will be reduced with the installation of the new parking. The trees maybe able to survive with the measures we discussed. However,removal of these existing trees and replacement with trees appropriate for this location should result in a greater number of trees in the new parking area, there will be room for more parking spaces and the potential hazard of limb failure would be eliminated. Please give me a call if you have any questions. Dave Ragan ISA Certified Arborist WE-0345A 2 EXISTING FACE OF CURB NEW STREET TREE,CLEAR OF NEW SECURE STAFF FUTURE ROW,TYP. SEE KEY VEHICLE PARKING LOT - — _- -- MANUAL SLIDING EMERGENCY EXIT FUTURE FACE OF CURB — POLICE MEMORIAL HALCYON ROAD ORNAMENTAL FENCING WITH TO REMAIN \ EXAMPLE RBED OP ELS.SEE �, W i r'`'."' N'' •� t d alb* • �3A %::::•!** �� `�.,. �• ♦ ,.`,, .. I I , ; , ' i 'ALM F R Coyfd - .. 1J4- ! '1 ,6.17• 8 9. 10 11 • ORAGE 77 Q VISITOR PARKING • • ••••• ••.;-_-• ••••.•••♦• i +.‘<4:4,1•:111•1:::, •� igj.�p••..p• II. ilitf FUTURE BACK OF SIDEWALK RELOCATE GAT _��, �` �. •••••' •15 •��•;.•• •�' .s•• FUTURE POLICE MEMORIAL TRUCK PARKING �� ��• ° `; � PARK AREA+/-3,000 SQ.FT . •• (, ' COMMAND VEHICLE PARKING 22x50'METAL BUILDING --4,_i •: EXISTING POLICEMANUAL SWING GATE EXIT STRUCTURE ON CONCRETE ,� r3 , '11 �.;'�� � PAD-(5)ROLL-UP DOORS oo i,, FACILITY \...****,%•••:::___;'24, . 2 \ / - � �` , 4 - -. L� `.' V, - NEW ADDITION % ��� / 6 798 SQ.FT. NEW SLIDING GATE ' r � in Q 10 .'�•• 1 2♦❖:❖•••',;;•'•-t÷:+•••'' ---- 7 / NEW S EE EOR TREE, -.". .",..•••.:❖•;❖❖$•. .11 G7/ TYPTREE IDENTIFICATION KEY I ` 9 10 '��;���:p••,�'" NEW STREET TREE,SEE KEY 7 ;.r ;•%•` RELOCATE/REPLACE 4. Ptatanusracemosa/CALIFORNIASYCAMORE i// ..�� ---- NEW NATURAL GAS GENERATOR (Interior Trees) \ iI/ NEW SLIDING GATE .r.::. ---.' DEMO AND RESURFACE • Tristania conferta/BRISBANE BOX �(E)PARKING LOT (Street Trees-Halcyon) \era . -••••---- GI 1 W- ------ NEW PARKING LOT FENCING (SteetTrees-enOASTLIVEOAK SECURE PATROL SECURE PARKING SUMMARY / • VEHICLE PARKING LOT 11111 •1'!Ly, I CITY VEHICLES PARKING REQ'D PARKING PROVIDED PATROL CARS 10 10 - STANDARD SPACES 12 12 I! TRUCK SPACES(LARGE) 2 1 TRAILER STORAGE 5 5 COMMAND POST TRAILER 1 1 t t I '' E STAFF VEHICLES STANDARD SPACES 18 15 I ACCESSIBLE PARKING 1 + I CODE REQ'D,BASED ON STAFF `•� VEHICLES 1 1 IBI s TOTAL PARKING REO'D: 49 45 GROUP SITE PLAN - Option 3A CITY OF ARROYO GRANDE O-z 3A ARCHITECTURE PLANNING ARROYO GRANDE POLICE STATION ADDITION/TENANT IMPROVEMENT ■ 11145.000 0 20' 40' 80' 08/27/13 J111145000_AGC_AGCo.PVd-Pogce59559 Drmvkgf159arcMgrrentATW5031110.42013 05 23.M Q p,RROVO INCORPORATED 9Z 3 10AWORIlk m JULY 10. 1911 )#. C'4/F00N 1? MEMORANDUM TO: COUNCIL MEMBER GUTHRIE FROM: STEVEN ADAMS, CITY MANAGER SUBJECT: CITY COUNCIL MEETING SUPPLEMENTAL INFORMATION DATE: AUGUST 26, 2013 Per your request, attached is additional information pertaining to items on the August 27, 2013 City Council Meeting agenda, which includes the following: • Original May 9, 2006 staff report on the Castillo Del Mar Memorandum of Understanding (MOU). • Recent staff reports on discussion of purchase of State water, including January 24, 2012, February 14, 2012, and March 13, 2012 Let me know if you have any questions. attachments cc. City Council City Attorney City Clerk pRROyo 11■as o INCORDOAATED 11 11 Y '°' "" '.. MEMORANDUM TO: CITY COUNCIL FROM: STEVEN ADAMS, CITY MANAGER SUBJECT: CONSIDERATION OF MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN THE CITY OF ARROYO GRANDE, LUCIA MAR UNIFIED SCHOOL DISTRICT, J.H. LAND PARTNERSHIP AND JOHN TAYLOR, TRUSTEE REGARDING LAND ACQUISITION AND EXTENSION OF CASTILLO DEL MAR TO VALLEY ROAD DATE: MAY 9, 2006 RECOMMENDATION: It is recommended the City Council approve and authorize the Mayor to execute the proposed Memorandum of Understanding (MOU) between the City of Arroyo Grande, Lucia Mar Unified School District, J.H. Land Partnership and John Taylor, Trustee. FUNDING: Under the proposed Agreement, J.H. Land Partnership will provide a traffic mitigation payment to the City of $600,000. Approximately $400,000 will be needed to complete the road improvements. The remaining amount of about $200,000 will be used for mitigation of the loss of agricultural land. The City will also be responsible for reimbursement of costs for planning services associated with implementation of the provisions of the MOU. This is estimated to be $15,000 and would be appropriated from the City's Unappropriated General Fund Balance at the 3rd Quarter budget report. DISCUSSION: Background In April 2003, a joint meeting of the City Council and Lucia Mar Unified School District Board of Education was held and potential traffic improvements to the Fair Oaks Avenue/Orchard Street intersection were discussed. At the meeting, City and Caltrans staff coordinated presentation of traffic model simulations that tested a number of alternatives identified, including intersection modifications, installation of a traffic signal, and adjustments to both Orchard Street ingress and egress. Unfortunately, the simulations showed that each option would either result in increased congestion or would create some other problem within the street or freeway offramp. As a result, the only option that was agreed would provide relief to the intersection was to create an alternative access from Orchard Street to Fair Oaks Avenue in order to provide an option for residents of Vista Del Mar to exit. CITY COUNCIL CASTILLO DEL MAR EXTENSION MOU MAY 9, 2006 PAGE 2 Castillo del Mar currently includes a private drive through Arroyo Grande High School that is owned by the Lucia Mar Unified School District ("District"). The most feasible way identified by the City to create a connection was to extend Castillo del Mar by providing public access to this road. However, this would not only require District \' approval, but would also require acquisition of a small portion of agricultural land adjacent to the High School in order to create an appropriate intersection at Valley Road. In September 2004, the City Council considered a request by J.H. Land Partnership to allow use of Orchard Street for access to a proposed 16-unit development in the County adjacent to Vista Del Mar in the City. During the approval of the Vista Del Mar development, the City maintained a one-foot access easement at the southeast end of Castillo del Mar. As mitigation for the traffic impacts to Orchard Street, J.H. Land Partnership offered a mitigation payment of $613,632 to the City. The City Council denied the request, indicating that any additional vehicle trips generated were unacceptable unless an alternate access could be developed. The City Council directed staff to continue to work on proposals for an extension to Valley Road. Issues Until recently, a number of issues have impacted the City's ability to extend Castillo del Mar, which include the following: • Cost of road improvements; • Inability to obtain District approval for use of the private road; and • Cost and inability to acquire adjacent agricultural land needed from John Taylor, the property owner. Provisions of MOU The proposed MOU includes a number of terms involving the District, J.H. Land Partnership and John Taylor, Trustee that may enable the City to accomplish the extension of Castillo del Mar to Valley Road at no cost to the City. The key terms include the following: • J.H. Land Partnership will acquire approximately one acre of agricultural land from John Taylor, Trustee, which they will deed to the City at no cost; • J.H. Land Partnership will pay to City $600,000 for the cost of road improvements and mitigation of loss of agricultural land; • District will relinquish the private road to the City at no cost upon approval by City of a General Plan amendment and rezoning to hillside residential of 10 acres owned by the District on the south side of the roadway ; and • The existing access easement and access control located at the south end of Castillo del Mar will be moved to the southern access point of the development proposed by J.H. Land Partnership. • Remaining land deeded to the City by J.H. Land Partnership not used for road construction will be deeded to the District. S:\Administration\CITY MANAGER\STEVE\Council Reports\Castillo Del Mar Extension MOU 5.9.06.doc CITY COUNCIL CASTILLO DEL MAR EXTENSION MOU MAY 9, 2006 PAGE 3 ALTERNATIVES: The following alternatives are provided for the Council's consideration: - Authorize the Mayor to execute the proposed MOU; - Modify the terms as appropriate and authorize the Mayor to execute the MOU; - Postpone consideration of the MOU; - Do not approve the MOU; - Provide direction to staff. Attachments: 1. Proposed Memorandum of Understanding with the Lucia Mar Unified School District, J.H. Land Partnership and John Taylor, Trustee S:\Administration\CITY MANAGER\STEVE\Council Reports\Castillo Del Mar Extension MOU 5.9.06.doc PRRoy° • CQ INCORPORATED 17Z V •.:�sri au va.) m it JULY tO. 1811 44IF0le°' MEMORANDUM TO: CITY COUNCIL FROM: STEVEN ADAMS, CITY MANAGER.Y1/ SUBJECT: CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER DATE: JANUARY 24, 2012 RECOMMENDATION: It is recommended the Council 1) adopt a Resolution calling for the holding of a special municipal election to be held on Tuesday, June 5, 2012, for the submission to the voters a question relating to the purchase of water from the California State Water Project; 2) adopt a Resolution setting priorities for filing written arguments for City measures and directing the City Attorney to prepare an impartial analysis; 3) adopt a Resolution providing for the filing of rebuttal arguments; 4) approve the ballot argument in support of the measure; and 5) appropriate $35,000 from the Water Availability Fund for the estimated cost of placing the measure on the ballot and preparing and distributing public education materials. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The estimated cost of State water is approximately $1,250 to $1,350 per acre foot of water. A one-time capital cost to pay the City's share of capital investments in the system that other contractors have been making through the life of the project is estimated to be approximately $25,000 to $30,000 per acre foot. The City has requested the State water purchase be structured so only holding costs be charged until the water is needed and used. Holding costs are estimated to be approximately $200 to $300 per acre foot. There is currently approximately $1.4 million available in the Water Availability Fund to cover costs for acquisition of new water supply. The City is currently in the third year of a five-year temporary water purchase agreement with the Oceano Community Services District (OCSD) for the purchase of 100 acre feet of water. The current annual cost is approximately $155,000. Staffs intent is to time the purchase of State water with the expiration of the OCSD temporary water purchase agreement. The actual amount of water recommended to be purchased will depend upon the terms agreed upon by the County and Central Coast Water Authority (CCWA). The objective is to maintain costs relatively close to Agenda Item 11.c. Page 1 CITY COUNCIL CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER JANUARY 24, 2012 PAGE 2 what is currently paid to OCSD in order minimize any impact on the City's water rates. The cost of placing the measure on the ballot is approximately $45,000 to $50,000. However, if it is accompanied with the Police Station ballot measure, the costs of the two measures can be shared. It is proposed to fund this cost from the Water Availability Fund. It is also recommended that $10,000 be appropriated for public education. Therefore, the total cost impact of the election to this fund will be approximately $35,000. There will be impacts on staff resources. However, the work will be accomplished as part of ongoing efforts to coordinate City water resources. Water supply measures are one of the priorities identified in the City's Critical Needs Action Plan. BACKGROUND: An Arroyo Grande ballot measure passed by the voters in 1990 requires a public vote before the City can purchase State water. The question on the ballot was as follows: Shall an affirmative vote of the voters of Arroyo Grande be required before the City of Arroyo Grande is authorized to participate in the California State Water Project? In June 2010, staff presented a water analysis and strategies to the City Council. It identified a projected need for approximately 400 additional acre feet of water to meet the community's needs when it reaches its buildout population under the existing General Plan. It was agreed to address these needs by expanding water conservation efforts, seeking purchase of State water, and to continue working on the potential for a water recycling project in the future. The City Council directed staff to prepare a ballot measure for the June 2012 election to enable purchase of State water. ANALYSIS OF ISSUES: State water would help diversify the City's water supply. Since the County has an excess supply of State water, it is also a reliable source. When the State reduces its delivery during drought conditions, the County has traditionally been able to provide delivery of the full allocation with its excess supply through the sale of drought insurance to State water contractors. Based on staffs analysis, State water appears to be the most cost effective option, but still has significant costs associated with it. The City is facing a number of challenges and pressures on its water and sewer rates. Reduced usage due to conservation efforts and rainfall levels, infrastructure needs, and reduced development impact revenues due to poor economic conditions have all impacted the City's ability to maintain a balanced budget in the Water Fund and will likely cause the need for future rate increases. As a result, staff has developed a strategy to Agenda Item 11.c. Page 2 CITY COUNCIL CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER JANUARY 24, 2012 PAGE 3 mitigate the impact of the State water purchase on water rates by: 1) timing the purchase with the expiration of the OCSD temporary water purchase agreement; and 2) deferring costs until the water is needed so the majority of costs can be assumed by new development and customers. County officials are negotiating with the CCWA for the State water purchase. While the County has excess water supply, the CCWA controls the distribution system. The amount of water recommended to be purchased will depend upon the amount of costs that can be deferred. The City can address its water needs through conservation efforts if it meets the goals set forth by State legislation. However, the ability to meet the State water conservation requirements is unknown. Therefore, staff believes obtaining some amount of State water is important, but it should not be relied on exclusively to meet future needs and conservation efforts should continue to be expanded. One of the most serious issues is the ability to respond to potential reductions in water supply if groundwater reliability is impacted in the future by seawater intrusion. Therefore, the recommended measure also requests authorization to purchase an increased amount of State water if necessary to address reduced water supply due to drought, seawater intrusion or other emergency conditions. The following ballot language is proposed: Shall the City of Arroyo Grande be authorized to purchase: 1) up to 250 acre feet of water from the State Water Project; and 2) up to an additional 750 acre feet of water from the State Water Project as needed to replace any existing water supply that becomes unavailable due to drought, seawater intrusion or other unforeseen emergencies? ALTERNATIVES: The following alternatives have been identified for City Council consideration: 1. Approve staffs recommendations; 2. Request changes to the ballot measure and/or ballot argument language and postpone adoption until the February 14, 2012 meeting; 3. Request staff to modify the ballot measure to authorize an unspecified amount; 4. Postpone the measure until the November 6, 2012 general election; 5. Postpone the measure until negotiations are completed with the County and CCWA; 6. Do not approve a ballot measure and reconsider relying entirely on conservation measures and/or recycled water to address the City's water needs; or 7. Provide other direction. Agenda Item 11.c. Page 3 CITY COUNCIL CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, • 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER JANUARY 24, 2012 PAGE 4 ADVANTAGES: Depending upon the terms of the purchase, State water provides the most cost effective option currently available to increase water supply. Since it represents a new water source, it will help diversify the City's water supply. Placing the measure on the ballot at this time will help facilitate negotiation of the purchase because it will resolve whether the City will have the authority for the purchase. Including the measure on the June ballot will help avoid confusion for voters that would occur if included along with a long list of controversial State and Federal items anticipated for the November election ballot. Placing the measure on the ballot at the same time as the Police building bond measure will also reduce the cost impact on the General Fund by funding a portion of the costs from the Water Availability Fund. DISADVANTAGES: The cost for a ballot measure at the June 5th election will be more than the November 6th general election. It is difficult to accurately project costs before the agreement for the purchase is negotiated, which may be a concern for voters. Lastly, there will be costs and significant staff time required for this effort. 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, January 19, 2012 and on the City's website on Friday, January 20, 2012. No comments were received. Attachment: 1. Proposed Argument in Favor Agenda Item 11.c. Page 4 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE CALLING FOR THE HOLDING OF A SPECIAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, JUNE 5, 2012, FOR THE SUBMISSION TO THE VOTERS A QUESTION RELATING TO THE PURCHASE OF STATE WATER WHEREAS, under the provisions of the laws relating to general law cities in the State of California, a Special Municipal Election shall be held on June 5, 2012, to submit to the voters at the election a question relating to the purchase of water from the State Water Project. NOW THEREFORE, BE IT RESOLVED, that the City Council of the City of Arroyo Grande does resolve, declare, determine, and order as follows: SECTION 1. That the City Council, pursuant to its right and authority, does order submitted to the voters at the June 5, 2012 Special Municipal Election the following question: CITY OF ARROYO GRANDE MEASURE Yes Shall the City of Arroyo Grande be authorized to purchase: 1) up to 250 acre feet of water from the No State Water Project; and 2) up to an additional 750 acre feet of water from the State Water Project as needed to replace any existing water supply that becomes unavailable due to drought, seawater intrusion or other unforeseen emergencies? SECTION 2. That the ballots to be used at the election shall be in form and content as required by law. SECTION 3. That the City Clerk is authorized, instructed and directed to coordinate with the County of San Luis Obispo Registrar-Recorder/County Clerk to procure and furnish any and all official ballots, notices, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 4. That the polls for the election shall be open at seven o'clock a.m. of the day of the election and shall remain open continuously from that time until eight o'clock p.m. of the same day when the polls shall be closed, pursuant to Election Code §10242, except as provided in §14401 of the Election Code of the State of California. Agenda Item 11.c. Page 5 RESOLUTION NO. PAGE 2 SECTION 5. That in all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections. SECTION 6. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in the time, form and manner as required by law. SECTION 7. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. SECDTION 8. The City Council authorizes the City Clerk to administer said election and all reasonable and actual election expenses shall be paid by the City upon presentation of a properly submitted bill. On motion of Council Member , seconded by Council Member and on the following roll call vote: AYES: NOES: ABSENT: The foregoing Resolution was passed and adopted this day of , 2012. Agenda Item 11.c. Page 6 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY Agenda Item 11.c. Page 7 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE SETTING PRIORITIES FOR FILING A WRITTEN ARGUMENT REGARDING A CITY MEASURE AND DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS WHEREAS, a Special Municipal Election is to be held in the City of Arroyo Grande, California, on June 5, 2012, at which there will be submitted to the voters the following measure: CITY OF ARROYO GRANDE MEASURE Yes Shall the City of Arroyo Grande be authorized to purchase: 1) up to 250 acre No feet of water from the State Water Project; and 2) up to an additional 750 acre feet of water from the State Water Project as needed to replace any existing water supply that becomes unavailable due to drought, seawater intrusion or other unforeseen emergencies? NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows: SECTION 1. That the City Council, being the legislative body of the City of Arroyo Grande, hereby authorizes ALL members of the City Council, to file a written argument in favor of the City measure not exceeding 300 words, accompanied by the printed names and signatures of the authors submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. The argument may be changed or withdrawn until and including the date fixed by the City Clerk after which no arguments for or against the City measure may be submitted to the City Clerk. The arguments shall be filed with the City Clerk, signed, with the printed names and signatures of the authors submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. SECTION 2. That the City Council directs the City Clerk to transmit a copy of the measures to the City Attorney, unless the organization or salaries of the Office of the City Attorney are affected. The City Attorney shall prepare an impartial analysis of the Agenda Item 11.c. Page 8 RESOLUTION NO. PAGE 2 measure not exceeding 500 words showing the effect of the measure on the existing law and the operation of the measure. If the measure affects the organization or salaries of the office of the City Attorney, the City Clerk shall prepare the impartial analysis. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments. SECTION 3. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. On motion by Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of January, 2012. Agenda Item 11.c. Page 9 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY Agenda Item 11.c. Page 10 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA, PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS FOR CITY MEASURES SUBMITTED AT MUNICIPAL ELECTIONS WHEREAS, Section 9285 of the Elections Code of the State of California authorizes the City Council by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for City measures submitted at municipal elections. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows: SECTION 1. That pursuant to Section 9285 of the Elections Code of the State of California, when the City Elections Official has selected the arguments for and against the measure which will be printed and distributed to the voters, the City Elections Official shall send a copy of an argument in favor of the measure to the authors of any argument against the measure, and a copy of an argument against the measure to the authors of any argument in favor of the measure, immediately upon receiving the arguments. The author or a majority of the authors of an argument relating to a City measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument may not be signed by more than five authors. The rebuttal arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument which it seeks to rebut. SECTION 2. That all previous resolutions providing for the filing of rebuttal arguments for City measures are repealed. SECTION 3. That the provisions of Section 1 shall apply only to the election to be held on June 5, 2012, and shall then be repealed. SECTION 4. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. Agenda Item 11.c. Page 11 RESOLUTION NO. PAGE 2 On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of January, 2012. Agenda Item 11.c. Page 12 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY Agenda Item 11.c. Page 13 ATTACHMENT 1 ARGUMENT IN FAVOR OF MEASURE Your "YES" vote on Measure will authorize the City of Arroyo Grande to purchase a limited amount of State water to continue to meet the needs of its customers in the most cost effective manner. Projections indicate the City will require approximately 400 acre feet of additional water to meet the needs of its buildout population under the existing General Plan. The City uses all the Lopez water it is legally entitled to and a court order prevents the City from pumping additional groundwater. This measure is not intended to acquire water to accommodate any growth not currently allowed or planned for. State water represents the most cost effective approach available to obtain additional water. The City's objective is to structure a purchase that will have minimal impact on customers' water rates. State water is a reliable source even in droughts because the County has excess supply that is available to compensate for periodic reductions in deliveries from the State. Since the City currently has only two sources of water, this will help diversify our water supply. Conservation and other efforts will still be needed, but given the uncertainties involving water resources, it is dangerous to rely solely on conservation to meet the City's needs. This will also provide the critical authorization needed to purchase emergency water if ever needed to replace the potential loss of existing supply due to drought or other emergency conditions. The City has worked hard to make available the water needed to serve its customers, but supply is restricted and options are limited. Your City Council unanimously urges you to take the steps necessary to help ensure it can continue to meet these needs in the future in a cost effective manner by voting "YES" on Measure . Tony Ferrara, Mayor Tim Brown, Mayor Pro Tern Joe Costello, Council Member Jim Guthrie, Council Member Caren Ray, Council Member Agenda Item 11.c. Page 14 p,RROYO INCORPORATED •....vim....:) JULY 10, 1911 * 44iFoccs P MEMORANDUM TO: CITY COUNCIL FROM: STEVEN ADAMS, CITY MANAGER fr SUBJECT: CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER DATE: FEBRUARY 14, 2012 RECOMMENDATION: It is recommended the Council 1) adopt a Resolution calling for the holding of a special municipal election to be held on Tuesday, June 5, 2012, for the submission to the voters of a question relating to the authority to purchase water from the California State Water Project; 2) adopt a Resolution requesting consolidation of the Special Municipal Election with the Statewide Primary Election; 3) adopt a Resolution setting priorities for filing written arguments for City measures and directing the City Attorney to prepare an impartial analysis; 4) adopt a Resolution providing for the filing of rebuttal arguments; 5) approve the ballot argument in support of the measure; and 6) appropriate $35,000 from the Water Availability Fund for the estimated cost of placing the measure on the ballot and preparing and distributing public education materials. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The estimated cost of State water is approximately $1,250 to $1,350 per acre foot of water. Of this amount, holding costs are estimated to make up $200 to $300 per acre foot and the remaining $1,050 is the cost to transport and deliver the water, There would be an additional cost of approximately $84 per acre foot if the City chose to purchase drought insurance, which would be recommended. A one-time capital cost to pay the City's share of capital investments in the system that other contractors have been making through the life of the project is estimated to be approximately $25,000 to $30,000 per acre foot. The City has requested the State water purchase be structured so only holding costs be charged until the water is needed and used. There is currently approximately $1.4 million available in the Water Availability Fund to cover costs for acquisition of new water supply. The City is currently in the third year of a five-year temporary water purchase agreement with the Oceano Community Services District (OCSD) for the purchase of 100 acre feet of water. The current annual cost is approximately $155,000. This is Agenda Item 10.b. Page 1 CITY COUNCIL CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER FEBRUARY 14, 2012 PAGE 2 based on the current cost for Lopez water of $1,470 per acre foot and a 5% fee. Staff s intent is to time the purchase of State water with the expiration of the OCSD temporary water purchase agreement. The actual amount of water recommended to be purchased will depend upon the terms agreed upon by the County and Central Coast Water Authority (CCWA). The objective is to maintain costs relatively close to what is currently paid to OCSD in order to avoid any additional impact on the City's water rates. The cost of placing the measure on the ballot is approximately $45,000 to $50,000. However, if it is accompanied with the Police Station ballot measure, the costs of the two measures can be shared. It is proposed to fund this cost from the Water Availability Fund. It is also recommended that $10,000 be appropriated for public education. Therefore, the total cost impact of the election to this fund will be approximately $35,000. There will be impacts on staff resources. However, the work will be accomplished as part of ongoing efforts to coordinate City water resources. Water supply measures are one of the priorities identified in the City's Critical Needs Action Plan. BACKGROUND: An Arroyo Grande ballot measure passed by the voters in 1990 requires a public vote before the City can purchase State water. The question on the ballot was as follows: Shall an affirmative vote of the voters of Arroyo Grande be required before the City of Arroyo Grande is authorized to participate in the California State Water Project? In June 2010, staff presented a water analysis and strategies to the City Council. It identified a projected need for approximately 400 additional acre feet of water to meet the community's needs when it reaches its buildout population under the current General Plan. It was agreed to address these needs by expanding water conservation efforts, seeking purchase of State water, and to continue working on the potential for a water recycling project in the future. The City Council directed staff to prepare a ballot measure for the June 2012 election to enable purchase of State water. A copy of that staff report is attached. County officials are negotiating with the CCWA for the State water purchase. While the County has over 15,000 acre feet of excess water supply, the CCWA controls the distribution system. Staff has developed a strategy to mitigate the impact of the State water purchase on water rates by: 1) timing the purchase with the expiration of the OCSD temporary water purchase agreement; and 2) requesting the CCWA to defer capital and transportation costs until the water is needed so the majority of costs can be assumed by new development and new customers. Therefore, the amount of water recommended to be purchased will depend upon the amount of costs that can be deferred. Agenda Item 10.b. Page 2 CITY COUNCIL CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER FEBRUARY 14, 2012 PAGE 3 Staff presented these recommendations to the City Council at the January 24, 2012 meeting. The City Council continued the item and requested additional information regarding the potential impact on developers' costs from the State water purchase. ANALYSIS OF ISSUES: Two issues were raised during the Council discussion of this item at the last meeting. The first was the issue of the cost. The second was potential impact on the Police Station bond measure. Cost Since Lopez water is currently more expensive than State water, it was concluded that there would be an ongoing water cost savings if a purchase of 100 acre feet was timed with the expiration of the temporary water purchase agreement with OCSD. Therefore, the issue identified involves how the one-time capital costs would be paid and whether it would impact the economic viability of new projects. A number of factors affect the ultimate cost impact of the purchase of State water. There are currently two separate development impact fees charged to new construction projects that provide revenue that could be used toward such costs. The first is the Water Availability charge. It generates revenue to ensure the City's availability of its water supply. The second is the Water Neutralization Fee. It is charged to "neutralize" the impact of new development on the City's water supply. The rate is established based upon, and used for, the cost of water conservation programs. The current cost of the Water Availability charge is $2,050 per water connection. The cost of the Water Neutralization Fee varies from $1,546 to $4,459 per unit depending upon lot size. An average unit on a lot .1 to .25 acres would be charged a fee of $2,200. Therefore, for purposes of this analysis, it can be assumed that a typical unit will pay approximately $4,250 for these fees. Since the majority of water need is still proposed to be addressed through conservation, it is recommended to maintain Water Neutralization Fee revenues for the water conservation program. Under the scenario of purchasing 100 acre feet of water, it would likely require a one- time payment of historical capital costs of approximately $2,750,000 ($2,750 per acre foot x 100 acre feet). It is estimated that the City has water capacity to serve construction all projects that have been approved, which will use a projected 200 acre feet of water. Therefore, it is likely the City can obtain fees from new development using up to 300 acre feet of water to help fund this cost (200 acre feet of existing capacity plus 100 acre feet of additional supply). For planning purposes, the projections are based on residential development and it is assumed that an average of 2.5 units will utilize one acre foot of water. This would Agenda Item 10.b. Page 3 CITY COUNCIL CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER FEBRUARY 14, 2012 PAGE 4 equate to 750 units, which would enable the City to generate a total of $1,537,500 in the Water Availability Fund for the one-time costs associated with the water purchase. The City currently has $1.4 million available in the Water Availability Fund, which would bring the total projected revenues to $2,937,500. If capital costs are not deferred, staff will likely recommend some form of financing be used to delay the full cost until additional revenues are received. The following table provides a summary of this cost analysis: One-time costs for 100 acre feet: Historical capital costs $2,750,000 Total one-time costs $2,750,000 One-time revenues for 300 acre feet: Existing Water Availability funds $1,400,000 Water Availability charges before water is needed $1,025,000 (200 acre feet = 500 units) Water Availability charges after water is needed $512,500 (100 acre feet = 250 units) Total one-time revenues $2,937,500 Remaining Water Availability Fund Balance $187,500 As a result, the City could purchase 100 acre feet of water and pay the capital costs with no increase in developer fees and continue to maintain the Water Neutralization Fee for water conservation efforts. Government Code Section 38743 limits the amount the fee can be raised by only $50 per year, which means the City could not increase the purchase of State water much over 100 acre feet without impacting existing rates or utilizing Water Neutralization funds. There is the potential the City could purchase State water from an existing State water contractor with excess supply, which would be the first attempt by staff if the measure is approved. Agencies that staff has contacted thus far are either interested in only selling water on a temporary basis or would want comparable one-time payments. There would also not likely be the ability to defer capital payments. However, it is possible that an opportunity could present itself where a seller would be willing to enter into a permanent agreement at a reduced rate for historical capital costs. Therefore, staff recommends the measure seek the authorization to purchase up to 200 acre feet of water to provide some flexibility in case such an opportunity arose. The real unknown cost factor is not State water, but conservation efforts. The current fee was based upon costs for the retrofit programs. The cost at this time to save one acre foot of water is $5,946, already above the current fee amount. It is unknown Agenda Item 10.b. Page 4 CITY COUNCIL CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER FEBRUARY 14, 2012 PAGE 5 what level of funding will be required to reach higher levels of water conservation. It will also be dependent largely on what amount of the decrease is achieved through voluntary measures and what amount through mandatory measures, which will become a policy consideration for the City Council. The important factor to consider regarding this issue is that the Council is not being asked at this time to approve any terms regarding the purchase of State water or fees. The recommendation is simply seeking authorization from the voters to purchase a limited amount of State water if it becomes available. The City has contracted for independent studies on multiple options and while expensive, State water currently provides the lowest cost alternative for acquiring additional water supply. It is the only option feasible to accomplish independently without financial participation from neighboring jurisdictions. Since the City's need is relatively small, it is also important because it is the only option that can provide additional supply without constructing a large capital project. The only other feasible option is to rely entirely on water conservation efforts to address the City's projected water need through reduced demand rather than increased supply. Staff believes it would be a dangerous approach, but would continue to be the backup alternative if the measure were to fail. This may provide a much more severe impact on new development if another moratorium becomes necessary. It also may require additional environmental review costs if the City does not have an adequate plan in place to demonstrate the availability of necessary water resources. It is important to emphasize that water projections can be highly unreliable given the impact of changing weather conditions. The recommendations seek to provide a reliable future supply at the lowest cost to the customer based upon staffs best estimates. As a result, it provides a buffer amount, but not excess supply sufficient to address unforeseen extreme conditions. However, the proposed measure would provide the ability to obtain additional supply on a temporary or ongoing basis if available under emergency conditions, which would be an important tool to potentially help address such serious situations. Timing Staff does agree that timing is an important consideration. On the one hand, placing the measure on the June ballot would help share the cost impact of the election and avoid confusion with a long list of controversial State and Federal issues in November. On the other hand, placing the measure on the June ballot will impact the amount of staff time that can be devoted to education efforts. Therefore, given concerns expressed at the last meeting, the City Council may want to consider placing the measure on the ballot at the November election instead. Staff Agenda Item 10.b. Page 5 CITY COUNCIL CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER FEBRUARY 14, 2012 PAGE 6 recommends against delaying it beyond that time. If State water does become available, the City will likely be a lower priority to receive the water behind cities and other entities that are existing State water contractors since the City rejected participation in the State water project when it became available in San Luis Obispo County. As a result, a two-year delay to the next election would increase the risk of losing the opportunity for obtaining an allocation of water that may become available. If the Council decides to delay the measure to November, staff recommends funding for public education be allocated now and staff be directed to initiate public education efforts. The City Council may also want to consider allocating additional funding for a professional telephone survey. It could be used to determine public opinion regarding different options. The estimated cost is $25,000. Questions regarding the proposed City Charter measure could also be added. There were also questions expressed at the last meeting regarding the priority of the State water measure in comparison to other efforts. Water supply measures are one of the City's top priorities as established in the Critical Needs Action Plan. Conservation efforts have reduced the existing urgency, but part of the drop in usage is due to heavy rainfall during the past year, a condition that has already been reversed. Now that the economy is improving, demands are expected to increase again and it is critical the City avoid circumstances experienced in the past when the City used its entire supply, evidence of seawater intrusion occurred, and a moratorium became necessary. Ballot Language The following ballot language is proposed: Shall the City of Arroyo Grande be authorized to purchase: 1) up to 200 acre feet of water from the State Water Project; and 2) up to an additional 500 acre feet of water from the State Water Project as needed to replace any existing water supply that becomes unavailable due to drought, seawater intrusion or other unforeseen emergencies? Please note that this is an adjustment in the amount recommended in the January • 24, 2012 staff report. Agenda Item 10.b. Page 6 CITY COUNCIL CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER FEBRUARY 14, 2012 PAGE 7 ALTERNATIVES: The following alternatives have been identified for City Council consideration: 1. Approve staffs recommendations; 2. Postpone consideration of the measure until July in order to instead place it on the ballot at the November 6, 2012 election, appropriate $10,000 and direct staff to initiate public education efforts; 3. In addition to the second alternative above, appropriate an additional $25,000 and direct staff to contract for a professional telephone public opinion survey; 4. Reduce the authorization amount to 100 acre feet in order to ensure no additional cost impact and approve the recommended actions; 5. Request staff to modify the ballot measure to authorize an unspecified amount; 6. Postpone the measure until negotiations are completed with the County and CCWA; 7. Do not approve a ballot measure and reconsider relying entirely on conservation measures and/or recycled water to address the City's water needs; or 8. Provide other direction. ADVANTAGES: State water would help diversify the City's water supply. Since the County has an excess supply of State water, it is a reliable source. When the State reduces its delivery during drought conditions, the County has traditionally been able to provide delivery of the full allocation with its excess supply through the sale of drought insurance to State water contractors. State water provides the most cost effective and feasible option currently available to increase water supply. By requesting authorization to purchase an increased amount of State water if necessary to address reduced water supply, the measure will also increase the City's ability to respond to drought, seawater intrusion or other emergency conditions. Placing the measure on the ballot at this time will help facilitate negotiation of the purchase because it will resolve whether the City will have the authority for the purchase. Including the measure on the June ballot will help avoid confusion for voters that would occur if included along with a long list of controversial State and Federal items anticipated on the November election ballot. Placing the measure on the ballot at the same time as the Police Station bond measure will also reduce the cost impact on the General Fund by funding a portion of the election costs from the Water Availability Fund. DISADVANTAGES: Placing the measure on the June ballot at the same time as the Police Station bond measure will limit staffs ability to devote the time necessary to provide an effective public education effort. ENVIRONMENTAL REVIEW: No environmental review is required for this item. Agenda Item 10.b. Page 7 CITY COUNCIL CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER FEBRUARY 14, 2012 PAGE 8 PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted in front of City Hall on Thursday, February 9 and on the City's website on Friday, February 10, 2012. No comments were received. Attachment: 1. Proposed Argument in Favor 2. June 8, 2010 Water Analysis Staff Report Agenda Item 10.b. Page 8 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE CALLING FOR THE HOLDING OF A SPECIAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, JUNE 5, 2012, FOR THE SUBMISSION TO THE VOTERS A QUESTION RELATING TO THE PURCHASE OF STATE WATER WHEREAS, under the provisions of the laws relating to general law cities in the State of California, a Special Municipal Election shall be held on June 5, 2012, to submit to the voters at the election a question relating to the purchase of water from the State Water Project. NOW THEREFORE, BE IT RESOLVED, that the City Council of the City of Arroyo Grande does resolve, declare, determine, and order as follows: SECTION 1. That the City Council, pursuant to its right and authority, does order submitted to the voters at the June 5, 2012 Special Municipal Election the following question: CITY OF ARROYO GRANDE MEASURE YES Shall the City of Arroyo Grande be authorized to NO purchase: 1) up to 200 acre feet of water from the State Water Project; and 2) up to an additional 500 acre feet of water from the State Water Project as needed to replace any existing water supply that becomes unavailable due to drought, seawater intrusion or other unforeseen emergencies? SECTION 2. That the ballots to be used at the election shall be in form and content as required by law. SECTION 3. That the City Clerk is authorized, instructed and directed to coordinate with the County of San Luis Obispo Registrar-Recorder/County Clerk to procure and furnish any and all official ballots, notices, printed matter and all supplies, equipment and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 4. That the polls for the election shall be open at seven o'clock a.m. of the day of the election and shall remain open continuously from that time until eight o'clock p.m. of the same day when the polls shall be closed, pursuant to Election Code §10242, except as provided in §14401 of the Election Code of the State of California. Agenda Item 10.b. Page 9 RESOLUTION NO. PAGE 2 SECTION 5. That in all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections. SECTION 6. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in the time, form and manner as required by law. SECTION 7. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. SECDTION 8. The City Council authorizes the City Clerk to administer said election and all reasonable and actual election expenses shall be paid by the City upon presentation of a properly submitted bill. On motion of Council Member , seconded by Council Member and on the following roll call vote: AYES: NOES: ABSENT: The foregoing Resolution was passed and adopted this day of , 2012. Agenda Item 10.b. Page 10 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY Agenda Item 10.b. Page 11 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN LUIS OBISPO TO CONSOLIDATE A SPECIAL MUNICIPAL ELECTION TO BE HELD ON JUNE 5, 2012, WITH THE STATEWIDE PRIMARY ELECTION TO BE HELD ON THE DATE PURSUANT TO §10403 OF THE ELECTIONS CODE WHEREAS, the City Council of the City of Arroyo Grande called a Special Municipal Election to be held on June 5, 2012, and is submitting to the voters the question of whether the City shall be authorized to purchase State water under certain circumstances; and WHEREAS, it is desirable that the Special Municipal Election be consolidated with the Statewide Primary Election to be held on the same date and that within the City the precincts, polling places and election officers of the two elections be the same, and that the county election department of the County of San Luis Obispo canvass the returns of the Special Municipal Election and that the election be held in all respects as if there were only one election. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows: SECTION 1. That pursuant to the requirements of § 10403 of the Elections Code, the Board of Supervisors of the County of San Luis Obispo is hereby requested to consent and agree to the consolidation of a Special Municipal Election with the Statewide Primary Election on Tuesday, June 5, 2012, for the purpose of placing a measure to appear on the ballot as follows: CITY OF ARROYO GRANDE MEASURE YES Shall the City of Arroyo Grande be authorized to purchase: 1) up to 200 acre feet of water from the State Water Project; and 2) up to an additional 500 acre feet of water from the State Water Project as needed to replace any existing water supply that becomes unavailable due to drought, NO seawater intrusion or other unforeseen emergencies? Agenda Item 10.b. Page 12 RESOLUTION NO. PAGE 2 SECTION 2. That the County election department is authorized to canvass the returns of the Special Municipal Election. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used. SECTION 3. That the Board of Supervisors is requested to issue instructions to the County election department to take any and all steps necessary for the holding of the consolidated election. SECTION 4. That the City of Arroyo Grande recognizes that additional costs will be incurred by the County by reason of this consolidation and agrees to reimburse the County for any costs. SECTION 5. That the City Clerk is hereby directed to file a certified copy of this Resolution with the Board of Supervisors and the County election department of the County of San Luis Obispo. SECTION 6. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions. On motion by Council Member , seconded by Council Member , and on the following roll-call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of , 2012. Agenda Item 10.b. Page 13 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY Agenda Item 10.b. Page 14 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE SETTING PRIORITIES FOR FILING A WRITTEN ARGUMENT REGARDING A CITY MEASURE AND DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS WHEREAS, a Special Municipal Election is to be held in the City of Arroyo Grande, California, on June 5, 2012, at which there will be submitted to the voters the following measure: CITY OF ARROYO GRANDE MEASURE Yes Shall the City of Arroyo Grande be authorized to purchase: 1) up to 200 acre No feet of water from the State Water Project; and 2) up to an additional 500 acre feet of water from the State Water Project as needed to replace any existing water supply that becomes unavailable due to drought, seawater intrusion or other unforeseen emergencies? NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows: SECTION 1. That the City Council, being the legislative body of the City of Arroyo Grande, hereby authorizes ALL members of the City Council, to file a written argument in favor of the City measure not exceeding 300 words, accompanied by the printed names and signatures of the authors submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. The argument may be changed or withdrawn until and including the date fixed by the City Clerk after which no arguments for or against the City measure may be submitted to the City Clerk. The arguments shall be filed with the City Clerk, signed, with the printed names and signatures of the authors submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. SECTION 2. That the City Council directs the City Clerk to transmit a copy of the measures to the City Attorney, unless the organization or salaries of the Office of the City Attorney are affected. The City Attorney shall prepare an impartial analysis of the Agenda Item 10.b. Page 15 RESOLUTION NO. PAGE 2 measure not exceeding 500 words showing the effect of the measure on the existing law and the operation of the measure. If the measure affects the organization or salaries of the office of the City Attorney, the City Clerk shall prepare the impartial analysis. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments. SECTION 3. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. On motion by Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of February, 2012. Agenda Item 10.b. Page 16 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY Agenda Item 10.b. Page 17 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA, PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS FOR CITY MEASURES SUBMITTED AT MUNICIPAL ELECTIONS WHEREAS, Section 9285 of the Elections Code of the State of California authorizes the City Council by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for City measures submitted at municipal elections. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows: SECTION 1. That pursuant to Section 9285 of the Elections Code of the State of California, when the City Elections Official has selected the arguments for and against the measure which will be printed and distributed to the voters, the City Elections Official shall send a copy of an argument in favor of the measure to the authors of any argument against the measure, and a copy of an argument against the measure to the authors of any argument in favor of the measure, immediately upon receiving the arguments. The author or a majority of the authors of an argument relating to a City measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument may not be signed by more than five authors. The rebuttal arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument which it seeks to rebut. SECTION 2. That all previous resolutions providing for the filing of rebuttal arguments for City measures are repealed. SECTION 3. That the provisions of Section 1 shall apply only to the election to be held on June 5, 2012, and shall then be repealed. SECTION 4. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. Agenda Item 10.b. Page 18 RESOLUTION NO. PAGE 2 On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of February, 2012. Agenda Item 10.b. Page 19 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY Agenda Item 10.b. Page 20 ATTACHMENT 1 ARGUMENT IN FAVOR OF MEASURE Your "YES" vote on Measure will authorize the City of Arroyo Grande to purchase a limited amount of State water to continue to meet the needs of its customers in the most cost effective manner. Projections indicate the City will require approximately 400 acre feet of additional water to meet the needs of its buildout population under the existing General Plan. The City uses all the Lopez water it is legally entitled to and a court order prevents the City from pumping additional groundwater. This measure is not intended to acquire water to accommodate any growth not currently allowed or planned for. State water represents the most cost effective approach available to obtain additional water. The City's objective is to structure a purchase that will have minimal impact on customers' water rates. State water is a reliable source even in droughts because the County has excess supply that is available to compensate for periodic reductions in deliveries from the State. Since the City currently has only two sources of water, this will help diversify our water supply. Conservation and other efforts are still proposed to address the 400 acre feet needed, but given the uncertainties involving water resources, it is dangerous to rely solely on conservation to meet the City's needs. This will also provide the critical authorization needed to purchase emergency water if ever needed to replace the potential loss of existing supply due to drought or other emergency conditions. The City has worked hard to make available the water needed to serve its customers, but supply is restricted and options are limited. Your City Council unanimously urges you to take the steps necessary to help ensure it can continue to meet these needs in the future in a cost effective manner by voting "YES" on Measure Tony Ferrara, Mayor Tim Brown, Mayor Pro Tern Joe Costello, Council Member Jim Guthrie, Council Member Caren Ray, Council Member Agenda Item 10.b. Page 21 o� wort) ATTACHMENT 2 �► * ; MEMORANDUM *Mil IF, TO: CITY COUNCIL FROM: STEVEN ADAMS, CITY MANAGER SUBJECT: CONSIDERATION OF UPDATED ANALYSIS OF WATER SUPPLY AND USAGE DATE: JUNE 8, 2010 RECOMMENDATION: It is recommended the Council: 1) continue efforts to purchase temporary Lopez water from the City of Pismo Beach and/or the Oceano Community Service District (OCSD) if a temporary emergency purchase of State water can be obtained from those jurisdictions; 2) direct staff to prepare modifications to the Municipal Code to permanently establish existing mandatory conservation measures; 3) direct staff to begin funding the half-time Water Conservation Coordinator position in the Water Fund rather than the Water Neutralization Fund when the next rate structure is prepared; 4) authorize staff to offer financial incentives to pay 75% of the costs of water efficiency measures identified in the water audits of major users; 5) direct staff to continue to work with neighboring jurisdictions on recycled water alternatives, determine cost of obtaining use of the Conoco Phillips pipeline for recycled water, and establish communications with agricultural property owners regarding use of recycled water; 6) direct staff to prepare a Resolution increasing Water Neutralization fees so that development impact fees will cover the full estimated capital costs of acquiring State water; 7) appropriate $25,000 from the Water Fund to develop a public education program regarding the status of the City's water supply and proposed measures to provide adequate long-term supply; and 8) direct staff to plan for preparation of a ballot measure at the June 2012 election to enable purchase of up to 450 acre feet of State water if a conditional purchase can be negotiated successfully with the County and Central Coast Water Authority (CCWA). FINANCIAL IMPACT: The future cost to the Water Fund of shifting the Water Conservation Coordinator to that Fund will be approximately $50,000. The annual holding costs for acquiring State water would be roughly $112,500 per year and drought insurance would be roughly an additional $25,000 per year. However, the intent would be to replace the cost of purchasing OCSD water, which is currently approximately $131,000 per year. Therefore, there would be no initial net cost of acquiring State water if negotiations are successful in structuring the purchase as proposed. Agenda Item 10.b. Page 22 CITY COUNCIL CONSIDERATION OF UPDATED ANALYSIS OF WATER SUPPLY AND USAGE JUNE 8, 2010 PAGE 2 The current cost to purchase State water is $1,250 to $1,350 per acre foot, which Is less than the cost of Lopez water. Therefore, once the City began receiving and using the water, the ongoing cost would be covered largely by revenue from new customers at that time. The recommendations would increase the Water Fund expenses by $25,000 in FY 2010-11 in order to fund a public education program. Sufficient revenue is currently available in the Water Fund for this expense. In addition, the City's Water Neutralization Fund has an existing balance of approximately $500,000 and the Water Availability Fund has a balance of approximately $1,500,000. BACKGROUND: The City's long-term water supply was identified as a significant issue during development of the City's 2001 General Plan and 2005 Urban Water Master Plan. At the August 24, 2004 meeting, the City Council reviewed a Water Alternatives Study identifying 17 alternatives for Council consideration. Since that time, a number of studies have been completed on the following alternatives: • Nacimiento Water project • Price Canyon oil field recycled water • Desalination • Recycled water • Raising of the spillway at the Lopez Lake dam • Acquisition of State water In 2008, it was determined the City had utilized 99% of its water entitlements. At the August 12, 2008 meeting, the City Council approved a Resolution declaring a 'severely restricted water supply condition.° Mandatory conservation measures were enacted. Meanwhile, the City's water conservation program and tiered rate structure were expanded, which have been successful in reducing water usage by 10% over the past two-year period. In January 2009, the City entered into a 5-year temporary water purchase agreement with the Oceano Community Service District (OCSD). Efforts are also under way to activate Well #10 and reactivate Well #11. In 2009, low groundwater levels and high chloride concentrations from water quality tests on one of the sentry wells located along the coast indicated the potential for seaweater intrusion. At the November 10, 2009 meeting, the City Council adopted an Interim Urgency Ordinance establishing a development moratorium. The moratorium was extended at the December 8, 2009 and April 13, 2010 meetings. It is now due to expire on July 12, 2010. Agenda Item 10.b. Page 23 CITY COUNCIL CONSIDERATION OF UPDATED ANALYSIS OF WATER SUPPLY AND USAGE JUNE 8, 2010 PAGE 3 ANALYSIS OF ISSUES: Water Analysis One of the purposes of the moratorium was to provide staff time to update data on water supply and water usage, which has been completed. A summary of results are as follows: Supply: Current Supply 3,694 acre feet Projected Additional Supply Well #10 90 acre feet Well #11 50 acre feet Total 140 acre feet Temporary Purchase of OCSD Water acre feet Total Supply 3,934 acre feet Usage: Current Usage 3,256 acre feet • Conservation Measures Proposed by Audits - 66 acre feet Projected Increase from Projects Approved or Submitted 213 acre feet Total 3,403 acre feet When current proposed wells, conservation measures and development are completed, it is estimated that water usage will be 86% of supply when factoring the temporary water purchase from OCSD. It is projected to be 88% when not factoring OCSD water. Therefore, staff believes current conservation efforts and new wells will address short-term supply needs. The General Plan projects the City's buildout population at approximately 20,000, a growth of approximately 17% over the current population. Annual growth rate is projected at approximately 1% per year. The water supply and building growth outlined above is expected to accommodate about 7%. Therefore, an additional increase in water supply or capacity of about 10% is needed. This would translate to about 384 acre feet if the goal is to maintain water usage around 90% or less of supply. Agenda Item 10.b. Page 24 CITY COUNCIL CONSIDERATION OF UPDATED ANALYSIS OF WATER SUPPLY AND USAGE JUNE 8, 2010 PAGE 4 Seawater Intrusion January and April test results of the sentry wells have both demonstrated dramatic drops in chloride levels. Therefore, it has been concluded that the threat of seawater intrusion has been diminished at this time, but continued monitoring is necessary. Arroyo Grande, Grover Beach, OCSD and Pismo Beach have been working with representatives of the County and the CCWA on a temporary emergency purchase of State water. Despite the most recent positive sentry well test results, it is proposed to continue with this emergency purchase for at least a one-year period. If the recent rainfall can be combined with a temporary decrease in groundwater usage, staff believes it will effectively replenish the groundwater supply and have important long- term benefits. The City of Arroyo Grande would not be able to utilize State water without a vote of the public. However, it is proposed that Arroyo Grande temporarily purchase Lopez water from Pismo Beach and OCSD. They would then purchase the additional State water. The cost of the water would be based upon the actual cost of the emergency State water purchase. It is not expected that the emergency State water will significantly exceed the cost to pump groundwater. Therefore, it will not result in a substantial cost impact. Additional upgrades to the sentry wells are being pursued to increase future accuracy of the test results. Staff from the agencies have also been working together on preparation of a Request for Proposal to develop a comprehensive groundwater model that would provide valuable data in the future on groundwater levels, quality and changes in the makeup of the groundwater table. Water Conservation The City has expanded its water conservation program over the past few years. The program has been successful in reducing water usage by 10% over the past two-year period. One-half of an Associate Planner position has been temporarily assigned to serve as the Water Conservation Coordinator. The City offers free replacements of toilets, free water sensors and controllers, and financial incentives for high efficiency washing machines and replacement of turf with drought tolerant plants and drip irrigation. Water audits have been prepared on the highest water users in the City, which includes City parks. Recommendations have been prepared, which are projected to save approximately 70 acre feet of water annually. Improvements have been installed at Strother Park as a pilot project to determine the accuracy of the recommendations. The City Council also approved funding to assist Wildwood Ranch as a pilot project for the first private property improvements from the survey. It was agreed to provide 75% of the cost. If this formula is used as the model for future projects, the total cost of implementing the measures is projected to be approximately $92,000 for all identified projects. Agenda Item 10.b. Page 25 CITY COUNCIL CONSIDERATION OF UPDATED ANALYSIS OF WATER SUPPLY AND USAGE JUNE 8, 2010 PAGE 5 During the past year, the City has also revised its rate structure to increase water conservation incentives and continued mandatory conservation measures under the "Severely Restricted Water Condition" designation. It is projected that the City must maintain these water savings on an ongoing basis. Therefore, it is recommended staff be directed to prepare an Ordinance to make existing mandatory water conservation measures permanent rather than to apply them only in certain conditions. If not approved, they should be eliminated at this time because water usage no longer falls within the criteria of a "Severely Restricted Water Condition" as defined in the Municipal Code. It is also recommended that a goal be established to reduce water usage by an additional 100 acre feet through conservation measures. To do this, it is proposed to continue to develop public education measures regarding the importance of water conservation. It is also recommended that the half-time Water Conservation Coordination position be funded on an ongoing basis from the Water Fund rather than from the Water Neutralization Fund beginning in the next budget, which would be FY 2011-12. Recycled Water Attached is the completed recycled water analysis prepared by the Wallace Group. It assessed the feasibility and costs of utilizing existing treated secondary water from the South San Luis Obispo County Sanitation District (SSLOCSD) wastewater treatment plant, upgrading the plant to provide tertiary treated water in order to expand potential uses, utilizing an existing Conoco Phillips pipeline to transport the water, and purchasing recycled water from the City of Pismo Beach. Expansion of the existing waste water treatment plants (SSLOCSD and City of Pismo Beach) to tertiary quality was not included as part of this study. However, this was addressed as part of two separate studies, the SSLOCSD recycled water study prepared by Wallace Group in 2008 and the 2007 recycled water study conducted by Carollo Engineers for the City of Pismo Beach waste water treatment plant. Staff also requested the consultant determine costs of using water from the existing Five Cities Center (Wal-Mart) retention basin to replace irrigation of the Five Cities Center landscaping. As outlined in the two separate reports, immediate recycled water options appear to be cost prohibitive, particularly when viewed as standalone projects with no future expansion plans. Capital costs to install necessary pipes to transport existing treated water are high due to the extensive water delivery system required and the relatively low demands contemplated. The sites identified as feasible include the Arroyo Grande Cemetery and Caltrans irrigation along the freeway. This would reduce water usage by an estimated 50 to 57 acre feet per year. If the treatment plant was upgraded to provide tertiary treated water, the savings could be expanded to over 230 acre feet per year by adding the Five Cities Center, K-Mart Center, St. Patrick's School, potentially Rancho Grande Park and other sites identified in the report. However, the increase in capital costs would be approximately $5 million for a 2 mgd Agenda Item 10.b. Page 26 CITY COUNCIL CONSIDERATION OF UPDATED ANALYSIS OF WATER SUPPLY AND USAGE JUNE 8, 2010 PAGE 6 tertiary recycled water plant upgrade, which is in addition to the distribution system costs. Conoco Phillips representatives would not discuss potential purchase price of their oil pipelines with the consultants. However, the portions of 12-inch oil pipelines that could be utilized for recycled water delivery would be valued at up to $2 million if constructed new. The feasibility and costs associated with utilizing the line have not been fully determined. Therefore, it is recommended that staff continue to work with Conoco Phillips on negotiation of a potential agreement if the City were to proceed with a project at some time in the future. In addition, use of recycled water could be increased dramatically if agricultural users were to agree to use it to augment and/or replace current groundwater wells. This could be a particularly important measure if additional seawater intrusion concerns occur. However, it would depend on cooperation of agricultural property owners and associated increases in water to the City would depend on allocation adjustments to the Santa Maria Groundwater Basin adjudication judgment. Therefore, it is recommended staff coordinate with neighboring jurisdictions in discussions with agricultural property owners to determine the feasibility of this option. Lastly, the report determined that cost for recycled water would be reduced by acquiring it from the City of Pismo Beach. Alternative pipeline routes are assessed in the report. Feasibility would likely depend on whether Pismo Beach independently constructs a recycled water system for their community. If so, Arroyo Grande would be responsible for connecting to their pipeline and would purchase the water rather than participating in the project itself. Therefore, it is recommended staff continue to coordinate with City of Pismo Beach staff on this option. State Water San Luis Obispo County has maintained an excess allocation of State water. However, approval of the capacity for allocation of any of this water would require approval of the CCWA. Discussions regarding a permanent purchase of State water allocation have been taking place concurrent with efforts to obtain a temporary emergency purchase. Representatives from the County Public Works Department are negotiating on the City's behalf. A group has been meeting on a regular basis, which includes County staff, supervisors representing the South County area, mayors and managers. State water would also involve a significant one-time capital cost. To become a State water contractor, existing contractors would require the City to pay for the estimated capital costs they have incurred since the project inception. This is currently estimated to be approximately $25,000 per acre foot. However, the primary advantage identified with State water is that staff believes it may be possible to negotiate the purchase so the City would only have to pay the Agenda Item 10.b. Page 27 CITY COUNCIL CONSIDERATION OF UPDATED ANALYSIS OF WATER SUPPLY AND USAGE JUNE 8, 2010 PAGE 7 holding costs until use of the water is necessary. Holding costs are estimated to be only $200 to $300 per acre foot, which would be roughly equal to the current cost of the OCSD water purchase. The City's development impact fees could be established at an amount equal to the capital cost. By doing this, the majority of costs would be paid by developments that would require the water. Therefore, there would be little if any cost to existing rate payers. The City charges three separate development fees associated with water, which include the Water Neutralization Fee, the Water Availability Fee and the Water Facilities Fee (connection fee). The purpose of the Water Neutralization Fee is to mitigate the impact of a proposed development on the City's water supply. The purpose of the Water Availability Fee is to ensure the availability of water to future development by funding necessary improvements to the Lopez water system and/or general water supply. Lastly, the Water Facilities Fee funds necessary expansion and improvements to the City's water distribution system infrastructure to accommodate new development. It is recommended the Water Availability Fee fund 20% of the State water capital costs and 80% be funded from revenue from the Water Neutralization Fee. Given the existing balance in the Water Availability Fund, no adjustment would be necessary. The current Water Neutralization Fee is based upon an estimated cost to reduce water usage through retrofits of approximately $6,000 per acre foot. Since 80% of the estimated $25,000 capital cost for State water equals $20,000, the fee would need to be increased by over 300%. As a result, the fee on a typical house would be increased from approximately $2,000 to approximately$6,600. This represents a significant increase, but is preferable to the current moratorium. Therefore, it is recommended Council direct staff to prepare an ordinance to increase the fee to this amount. This will ensure the funding necessary will be in place when the water is needed without impacting existing rate payers. A ballot measure approved in 1990 requires a public vote before the City can use State water. Therefore, in order to purchase State water, a ballot measure would first need to be approved. It is recommended the City target the June 2012 election to do this. This would provide time to determine actual costs, ensure acquisition of the State water is feasible, and implement a public education process to inform the public on the City's efforts and the benefits of acquiring State water. It is recommended $25,000 be allocated for a public education program during the upcoming year. The figures outlined above demonstrate that existing water resources can accommodate development during the next two-year period. There is likely to be two typical concerns by voters. The first would be the fear that acquisition of State water would stimulate growth. However, the ballot measure could be structured to enable the City to purchase only the amount projected necessary to accommodate the City's buildout as projected in the current General Agenda Item'10.b. Page 28 CITY COUNCIL CONSIDERATION OF UPDATED ANALYSIS OF WATER SUPPLY AND USAGE JUNE 8, 2010 PAGE 8 Plan. Based on the figures outlined above, staff believes 300 acre feet would be necessary. However, it is recommended to acquire 450 acre feet in order to ensure 300 acre feet is available during severe drought situations when the State reduces its delivery amounts. The second concern is reliability. However, the City is fortunate that San Luis Obispo County maintains an excess capacity, which is used to make up much of the loss when the State cuts back on its deliveries. They do this by offering what they refer to as "drought insurance" or "drought buffer" at relatively minimal cost. Drought insurance is available at a cost of $70 per acre foot. It is recommended to pursue purchase of 350 acre feet of drought insurance. Staff believes this would enable the City to maintain delivery of 300 acre feet of water even if the State reduced its delivery to 35%. Development Project Mitigation Development projects are required to fully mitigate water usage, which for the past several years has been accomplished through mitigation fees used to retrofit homes and businesses with high efficiency toilets and other water devices. Given water supply issues, the most recent project approvals have included conditions that specify that in lieu fees will only be accepted if they can be demonstrated to be utilized for a specified project that reduces usage equal to or more than the demand of the proposed project. However, with the recommended strategies and increased fees, staff believes this will no longer be necessary since staff can demonstrate the fees will be utilized and will generate revenue sufficient to expand water supply. Staff will monitor development projects and usage. If developments approved exceed projections, per capita usage increases, or the ballot measure were to fail in 2012, staff would then recommend returning to use of this mitigation measure language. ALTERNATIVES: The following alternatives are provided for the Council's consideration: • Approve staffs recommendations; • Approve the proposed strategies, but direct staff to prepare a ballot measure for purchase of State water for the November 2010 ballot; • Approve the proposed strategies, but direct staff to increase the requested purchase of State water to provide an additional buffer amount; • Do not pursue State water and rely entirely on conservation efforts and/or recycled water to address the City's future water needs; • Do not approve staffs recommendations; or • Provide other direction to staff. ADVANTAGES: Staff believes the recommendations will address the City's immediate and future water needs in the most cost effective manner, while minimizing the impact on water Agenda Item 10.b. Page 29 CITY COUNCIL CONSIDERATION OF UPDATED ANALYSIS OF WATER SUPPLY AND USAGE JUNE 8, 2010 PAGE 9 rates, diversifying the City's water supply, and targeting measures that are most feasible and largely within the control of the City. DISADVANTAGES: The disadvantage of the recommendations is that while diversified, the City's water supply will continue to be based on finite sources that can be impacted by drought conditions. However, continued efforts to develop recycled water will provide additional opportunities to incorporate other resources less impacted by drought conditions. ENVIRONMENTAL REVIEW: Environmental review is not required at this time for this item, but may be involved to proceed with particular projects in the future. PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted in front of City Hall on Thursday, June 3, 2010 and on the City's website on Friday, June 4, 2010. Attachments: 1. June 2010 Wallace Group Technical Memorandum on Recycled Water Distribution System Conceptual Plan — South San Luis Obispo County Sanitation District WWTP (distributed to City Council separately/ public copy available on file in City Hall due to size of document) 2. June 2010 Wallace Group Technical Memorandum on Recycled Water Distribution System Conceptual Plan — City of Pismo Beach WWTP (distributed to City Council separately/ public copy on file in City Hall due to size of document) 3. January 2009 Wallace Group Water Recycling Update Report (public copy on file in City Hall due to size of document) Agenda Item 10.b. Page 30 01ROyo ° c� INCORPORATED 92 g JULY 10. 1911 4440%14`1'. MEMORANDUM TO: CITY COUNCIL FROM: STEVEN ADAMS, CITY MANAGER SUBJECT: CONSIDERATION OF ONE-YEAR DELAY IN CONSIDERATION OF PLACING A MEASURE ON THE BALLOT TO AUTHORIZE PURCHASE OF STATE WATER DATE: MARCH 13, 2012 RECOMMENDATION: It is recommended the Council approve a one-year delay in considering placing a measure on the ballot to authorize purchase of State water. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: There will be no financial impact from the one-year delay. The delay will assist staff resources by providing more time to meet the City Council's request for updated projections of City water need and supply. BACKGROUND: In June 2010, staff presented a water analysis and strategies to the City Council, which identified a projected need of approximately 400 additional acre feet of water to meet the community's needs when it reaches its buildout population under the current General Plan. It was agreed to address these needs by expanding water conservation efforts, seeking purchase of State water, and to continue working on the potential for a water recycling project in the future. The City Council directed staff to prepare a ballot measure for the June 2012 election to enable purchase of State water. Staff presented a recommended measure to the City Council for consideration at the January 24, 2012 meeting. The item was continued and considered at the February 14, 2012 meeting after additional information was provided. The City Council directed staff to return by June with the cost comparison data on other alternatives and updated projections of the City's water needs and supply. Agenda Item 10.a. Page 1 CITY COUNCIL CONSIDERATION OF ONE-YEAR DELAY IN CONSIDERATION OF PLACING A MEASURE ON THE BALLOT TO AUTHORIZE PURCHASE OF STATE WATER MARCH 13, 2012 PAGE 2 ANALYSIS OF ISSUES: Staff recommends that the item be delayed for the following reasons: • Given other priorities, it will be difficult for staff to complete the level of analysis needed to accurately update water demand and supply projections during the requested time frame. • The ability to utilize 2012 rather than 2011 as a base year in preparing the projections will result in much more accurate figures. Since 2011 was a very wet year, it is difficult to accurately determine how much of the drop in water usage was due to conservation efforts versus the amount of rainfall that was received. It appears that 2012 is going to be a dry year, which provides data on the type of conditions the City needs to plan for in its supply strategies. • Given the level of concerns and questions regarding costs and revenues, it will be preferable to first determine the terms of a potential purchase so those questions and concerns can be responded to more accurately. • Additional time will allow for completion of the study on raising the spillway at the Lopez dam and additional efforts underway to develop potential strategies to increase the cost effectiveness of a recycled water project. Please note that the earliest opportunity to place the measure on the ballot unless a costly independent special election is pursued will be 2014. Therefore, a one-year delay in considering the ballot measure will result in a two-year delay in the measure being placed on the ballot. ALTERNATIVES: The following alternatives have been identified for City Council consideration: 1. Approve staffs recommendation for a one-year delay in considering a State water ballot measure; 2. Direct staff to move forward with prior direction for consideration of a measure on the November ballot; 3. Direct staff to eliminate State water as an alternative and take no further action regarding a ballot measure allowing a purchase of State water; or 4. Provide other direction. ADVANTAGES: The delay will provide staff the time and information necessary to provide more accurate projections regarding the need, costs and funding for a potential purchase of State water. This will help address stated concerns that need to be resolved for a successful ballot measure. Agenda Item 10.a. Page 2 CITY COUNCIL CONSIDERATION OF ONE-YEAR DELAY IN CONSIDERATION OF PLACING A MEASURE ON THE BALLOT TO AUTHORIZE PURCHASE OF STATE WATER MARCH 13, 2012 PAGE 3 DISADVANTAGES: The lack of authority to purchase any amount of State water places the City in a poor negotiation position for acquisition of any future potential water supply and increases the risk of missing an opportunity for a cost effective purchase if it becomes available. 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, March 8, 2012 and on the City's website on Friday, March 9, 2012. No comments were received. Agenda Item 10.a. Page 3 THIS PAGE INTENTIONALLY LEFT BLANK Agenda Item 10.a. Page 4