CC 2021-09-14_10a Supplemental No 1
MEMORANDUM
TO: CITY COUNCIL
FROM: WHITNEY McDONALD, CITY MANAGER
SUBJECT: SUPPLEMENTAL INFORMATION
AGENDA ITEM 10.a. – SEPTEMBER 14, 2021 CITY COUNCIL MEETING
CONSIDERATION OF PARTICIPATION IN CENTRAL COAST BLUE
PROJECT AND PRELIMINARY DISCUSSION OF WATER SUPPLY
ALTERNATIVES
DATE: SEPTEMBER 14, 2021
Attached is correspondence received for the above referenced item.
cc: Assistant City Manager/Public Works Director
City Attorney
City Clerk
City Website (or public review binder)
From: Jeff Edwards [mailto:
Sent: Monday, September 13, 2021 7:37 AM
To: Caren Ray Russom <crayrussom@arroyogrande.org>; Jimmy Paulding
<jpaulding@arroyogrande.org>; Lan George <lgeorge@arroyogrande.org>; Kristen Barneich
<kbarneich@arroyogrande.org>; Keith Storton <kstorton@arroyogrande.org>; Whitney McDonald
<wmcdonald@arroyogrande.org>
Cc: Will Clemens <will@oceanocsd.org>
Subject: Arroyo Grande City Council 9-14-21 Agenda item 10.a. Letter of Oppostion
Ladies and Gentlemen,
Please find attached a letter in connection with the matter above, including attachments. Please
let me know if you have any questions.
Thanks,
Jeff Edwards
Julie Tacker
Administrative Assistant
J.H. Edwards Company
P.O. Box 6070
Los Osos, CA 93412
805.528.3569 - Office
J. H. EDWARDS COMPANY A REAL PROPERTY CONCERN
Specializing in Water Neutral Development
P.O. Box 6070, Los Osos, CA 93412 (805)235-0873 jhedwardscompany@gmail.com
ACQUISITION MARKETING LAND USE REDEVELOPMENT
September 13, 2021
City of Arroyo Grande
300 E. Branch Street
Arroyo Grande, CA 93420
Attention: City Council
Subject: September 14, 2021, City Council Meeting Agenda item 10. a.
Consideration Of Participation In Central Coast Blue And Preliminary
Discussion Of Water Supply Alternatives
Dear Arroyo Grande City Council,
On April 13, 2021, your Council voted unanimously to rescind the City’s Conditional
Approval of the Central Coast Blue (CCB) Operating Agreement, dated March 23,
2021. As a condition of participation in CCB your Council required “robust public
participation…throughout the life of the project.” Also stipulated was, “A
governance structure that includes equal decision making by all member agencies.”
The Draft CCB Project Delivery and Governance Framework provided as Attachment
1 to the staff report does neither. Pismo Beach has retained its status as lead agency
and will procure and manage all contracts with consultants and contractors through
completion of project construction. So much for compromise.
On June 8, 2021, your Council directed City staff to identify and explore water
supply options for the Council’s consideration, including costs, as an alternative to
participation in CCB. Instead, your staff has included a Water Supply Alternatives
Study, dated August 24, 2004, prepared by Wallace Group provided as Attachment 2
to the staff report. Virtually no new research, analysis or cost estimates were
performed as directed. Staff simply asserts an update to the 2004 study is
underway, with a preliminary draft of options included as Attachment 3, with CCB
as one of the options. Is the City of Pismo Beach aware Arroyo Grande staff is
proposing a reduction from 39% to 25% participation? This would increase the
unsubscribed amount to 19% or about 190 acre-feet per year. Other non-starters
suggested in the 2004 Wallace Study include direct purchase of State Water
including expensive “buy in” costs, Nacimiento Project Water, desalination, and
stormwater capture.
The only affordable and reliable option for long-term augmentation of City water
supplies is to craft a deal with the Oceano Community Services District (OCSD). The
5-year Agreement with OCSD beginning in 2009 (attached) provided for the sale of
100AFY to Arroyo Grande. The agreement specified groundwater and/or Lopez
water as the source and included a provision for payment whether, or not, water
was delivered.
J. H. EDWARDS COMPANY A REAL PROPERTY CONCERN
Specializing in Water Neutral Development
P.O. Box 6070, Los Osos, CA 93412 (805)235-0873 jhedwardscompany@gmail.com
ACQUISITION MARKETING LAND USE REDEVELOPMENT
The staff report discounts the ability of Oceano to enter into a long-term agreement
based on the 2012 voter initiative regarding the permanent sale of water. To be
clear, Measure B-12 (attached) does not prevent the OCSD from the long-term sale
of water, rather it proports to require an election to be held “prior to any permanent
sale of water to any entity outside the Oceano Community Services District”. Notably
in that regard, since 2012 the OCSD has reduced water demand from 900AF to
743AFY. Today, Oceano uses less than 40% of its total water entitlement
(743AFY/1953AFY). Presently, there are limited opportunities in Oceano to
expand development and see a significant increase in demand for water over time.
In fact, the current downward trend in water demand in the community may
continue in the future.
Additionally, the OCSD, as a subcontractor has acquired State Project Water Drought
Buffer in the amount of 750AFY to complement its Table A allocation of 750AFY.
Currently, the OCSD has the unique opportunity to acquire additional Drought
Buffer, tripling the amount to 2,250AFY, as an example. Excess Entitlement Policies
dated January 14, 2003, were approved by the Board of Supervisors (attached).
This would have the effect of providing delivery of all 750AFY at a time of 25% State
Project Water deliveries, or greater. Measure B-12 also incorrectly estimated
OCSD’s future water demand to be over 1,400AF virtually twice the present
consumption. Given the OCSD needs for water infrastructure improvements it is
highly likely the voters in Oceano would approve a long-term agreement with the
City of Arroyo Grande to avoid significant water rate increases of their own.
Moreover, the OCSD, given its diversified water portfolio, would currently and in the
future, be capable of providing up to 400AFY to Arroyo Grande. In contrast to the
2009 agreement of temporary sales, a new agreement could establish a minimum
delivery amount using 200AF as an example for a payment of $400,000 at $2,000AF.
If Arroyo Grande desired additional water the city could pay for it on a per acre foot
basis at $2,000 per AF, e.g., 300AF x $2,000= $600,000. Delivery of all 400AF would
cost $800,000. The city would only pay for delivered water above 200AF.
Unfortunately, this type of analysis was not conducted by your city staff as directed.
Staff had over three months since your June 8th meeting to perform the work needed
for the council to consider water supply options to CCB now, not sometime after a
decision on continuing with CCB had to be made. Any meaningful analysis about
water supply options (other than CCB) was merely an afterthought. It appears a
couple phone calls may have been made between City Manager McDonald and OCSD
General Manager, Will Clemens without any apparent new or creative discussions or
advancement through in-depth analysis and negotiation. Importantly, there has
been no legal analysis of Measure B-12 which is ostensibly the reason a long-term
agreement regarding the sale/purchase of water with the OCSD is
discounted/eliminated in the staff report. Working with the OCSD as an existing
subcontractor, Arroyo Grande would avoid significant buy-in costs for State Project
Water. As such, this source of water has become more affordable, especially for
south county communities given the existing delivery infrastructure including
storage capability in Lopez Lake.
J. H. EDWARDS COMPANY A REAL PROPERTY CONCERN
Specializing in Water Neutral Development
P.O. Box 6070, Los Osos, CA 93412 (805)235-0873 jhedwardscompany@gmail.com
ACQUISITION MARKETING LAND USE REDEVELOPMENT
The City of Pismo Beach has applied for and received multiple State and Federal
grants totaling about $5,000,000. The grant applications contain many
misstatements of facts, untruths and outright lies including dozens if not hundreds
of references to non-existent seawater intrusion. A letter from the OCSD dated
February 8, 2012, refuting the notion of seawater intrusion is attached.
Perpetuating the seawater intrusion scare plays into the narrative of how CCB will
protect the water wells serving those poor south county folks. Moreover, the grant
applications are exploitative of Environmental Justice issues and the DAC status of
Grover Beach and Oceano, even when Oceano is not a CCB partner. The application
and the grant awards are likely the result of fraudulent representations made by
Pismo Beach. Is this something Arroyo Grande wants to associate itself with?
Regional water management has been provided as a reason to remain in CCB. Pismo
Beach promotes regionalism when it’s good for Pismo Beach. If it is not, it doesn’t.
The most recent glaring example is when Governor Newsom ordered the closure of
restaurants and hotels in 2020. Pismo Beach defied all orders and bragged about
posting an increase in year-over-year taxes including, transient occupancy tax.
It’s OCSD or CCB, you can’t afford both not even at 25% participation in CCB. It is
acknowledged the City of Arroyo Grande needs an additional 230-625 AFY of water
supply augmentation to achieve community build-out. Why would you buy 250 AFY
for $1,000,000, when can buy 400 AFY for $800,000? To do otherwise does not
make fiscal sense, nor is it responsible.
The fundamental paradox of CCB is that is claims to be a new source of water
supply, yet at the same time, there is the suggestion CCB will protect the
groundwater basin in the vicinity from the fictional seawater intrusion. One can’t
have it both ways. CCB needs to leave the water in the ground if it’s to be a seawater
barrier. If that is the case, what water is Arroyo Grande going to get?
The centerpiece of the CCB project are the five injection wells to reintroduce treated
effluent into the groundwater basin. The Coastal Dunes RV Park and Campground
owned by the County of San Luis Obispo along Highway One is the location of three
of the five proposed injection wells. Unfortunately, while the experimental
extraction well was allowed, none of the injection wells are permitted under current
zoning. Pismo Beach will be required to process a Local Coastal Plan amendment
which may take many months, if not years to complete the rigorous review process.
Pismo Beach will also need to acquire permanent easements in the campground
from the county, which may not be possible. CCB is hardly “shovel ready” which is
another of many Pismo Beach misrepresentations. Pismo Beach has only wanted
Arroyo Grande’s money from the start and that has not changed, e.g., “immediate
payment” recommended in the staff report.
J. H. EDWARDS COMPANY A REAL PROPERTY CONCERN
Specializing in Water Neutral Development
P.O. Box 6070, Los Osos, CA 93412 (805)235-0873 jhedwardscompany@gmail.com
ACQUISITION MARKETING LAND USE REDEVELOPMENT
Please reject the staff recommendation other than to direct staff to engage in a real
dialogue with the OCSD to detail a potential transaction. Likewise, in coordination
with the OCSD, prepare companion ballot measures for March of 2021 to ask the
voters of each community if this is a deal they support.
Sincerely,
Jeff Edwards
Jeff Edwards
Attachments:
2009 Agreement with OCSD
Measure B-12
Excess Entitlement Policies
OCSD seawater intrusion letter, February 8, 2012
TEMPORARY WATER SUPPLY AGREEMENT
BETWEEN THE CITY OF ARROYO GRANDE AND
THE OCEANO COMMUNITY SERVICES DISTRICT
THIS TEMPORARY WATER SUPPLY AGREEMENT (hereinafter referred to as the
AgreemenY') is made and entered into as of rtarcn 1 2009, by and between
the City of Arroyo Grande, a municipal corporation (hereinafter referred to as the "City")
and the Oceano Community Services District, a community services district organized
and existing pursuant to California State Law (hereinafter referred to as the "DistricY'),
with reference to the following recitals:
RECITALS
WHEREAS, City desires to temporarily purchase water from District during the City's
development of permanent alternate water supply sources; and
WHEREAS, City anticipates developing permanent alternate sources of water supply
within five (5) years to eliminate the City's need for the water being purchased on a
temporary basis; and
WHEREAS, the City and the District acknowledge that DistricYs temporary sale of water
as provided herein in no way contemplates the permanent transfer of any or all of the
DistricYs entitlements or contractual rights to any water rights or water supply that the
District holds as of the date of this Agreement; and
WHEREAS, the City and the District desire to effectively manage existing water
resources to meet the needs of constituents of both jurisdictions in the most cost
efficient manner and to communicate to each other on an ongoing basis regarding
efforts related to implementation of the terms of this Agreement, as well as efforts by
City to replace the temporary purchase of water with permanent water supply sources.
NOW THEREFORE, in consideration of the mutual promises, covenants and conditions
contained herein, the parties hereto agree as follows:
AGREEMENT
1.DISTRICT DELIVERY OF WATER TO CITY. District shall provide City with up to
one hundred (100) acre feet of water per year. City shall provide District with at least
ten (10) days prior written notice of the amount of water it desires each month.
2. WATER RIGHTS ENTITLEMENTS AND CONTRACTS NOT AFFECTED. This
Agreement is solely intended for the purpose of allowing the District to provide
temporary water supply for the benefit of City, in an amount not to exceed 100 acre-feet
per annum during each year while this Agreement is in effect. No transfer of any
interest, including but not limited to overlying, appropriative, or contractual rights or
entitlements to water held by the District under California law, is intended by the
execution of this Agreement. The parties hereto expressly agree that the temporary
supply of water to City agreed to herein does not affect the groundwater resources,
determinations or the rights to use of groundwater confirmed respectively to the District
and to the City by the Water Management Agreement dated June 10, 2002. The
parties expressly agree that nothing in this Agreement shall affect the contractual
entitlements of either party with regard to water originating from Lopez Reservoir, which
entitlements are specified in the Agreement Between San Luis Obispo County Flood
Control & Water Conservation District and County of San Luis Obispo, on Behalf of
County Service Area No. 13 For a Water Supply, dated October 24, 1966, as amended
Lopez Agreement). The parties also expressly agree that this Agreement is for a
temporary arrangement for the sale of water by the District to City that is consistent with
Article X of the Califomia Constitution, and with provisions of the California Water Code
concerning use and transfer or water, including but not limited to sections 100, 109,
382, 475, 1011, 1014, 1016, 1017, 1244, 1745. 07, 1745.10, and 1745.11.
3.SOURCE OF WATER AND METHOD OF DELIVERY. Water delivered from the
District to City shali be from either the Lake Lopez Reservoir through the Lopez Pipeline
System from DistricYs allocation under the Lopez Agreement ("Lopez Water") or
groundwater from the DistricYs allocation under the Water Management Agreement
Groundwater"). District shall have the option of either providing Lopez Water or
Groundwater.
4.METHOD OF DELIVERY. Water provided by District pursuant to this Agreement
shall be delivered as follows:
A. Lopez Water shall be delivered through the Lopez Pipeline and shall be
coordinated through and with the San Luis Obispo County Flood Control
and Water Conservation District. ("County of San Luis Obispo").
B. Groundwater shall be pumped directly from the groundwater basin by City.
If District opts to provide City with Groundwater, City shall monitor and
promptly report to District in writing any Groundwater pumped in excess of
City's allocation under the Water Management Agreement.
C. City will provide meter reports to the District on a quarterly basis showing
the amount of water used from each source.
5.PAYMENT FOR WATER. Upon receipt of an invoice from the District, City shall
pay to District on a bi-monthly basis the incremental cost for one hundred (100) acre
feet of water per year based on a rate of 105% of the actual rate paid by District to the
County of San Luis Obispo for Lopez Water, whether any or all of the full amount is
used, minus $275 per acre foot of Groundwater used.
6.TERM. This Agreement shall commence on the first date set forth above and
shall continue in effect for a five (5) year period.
7.NOTICE. Any and all notices or other communications required or permitted by
this Agreement or by law to be delivered to, served on, or given to any party to this
Agreement by any other party to this Agreement shall be in writing and shall be deemed
properly delivered, served, or given when personally delivered to the party to whom it is
directed, or in lieu of such personal service, when deposited in the United States mail,
first class, postage pre-paid, addressed to:
IF TO CITY: CITY OF ARROYO GRANDE
City Manager
214 East Branch Street
Arroyo Grande, CA 93420
IF TO THE DISTRICT: OCEANO COMMUNITY SERVICES DISTRICT
District Manager
P.O. Box 599
Oceano, CA 93475-0599
Any party to this Agreement may change his address for the purposes of this Section by
giving written notice of such change in accordance herewith.
8.MODIFICATION. This Agreement may be amended or modified only by an
instrument in writing, stating the amendment or modification, executed by the parties
hereto.
9.HEIRS AND SUCCESSORS. This Agreement shall be binding on and shall inure
to the benefit of the heirs, executors, administrators, successors and assigns of the
parties hereto.
10. SEVERABILITY. Should any portion of this Agreement be held unenforceable or
inoperative for any reason, such shall not affect any other portion of this Agreement, but
the remainder shall be as effective as though such ineffective portion had not been
contained herein.
IN WITNESS WHEREOF the parties have executed this instrument as of the date and
year above first written.
CITY OF ARROYO NDE:
J
v
TONYFER A
Mayor
ATTEST:
4
KELLY ET E
Director of A inistrative
Services/City Clerk
APPROVED AS TO FORM:
TI THY . RMEL
Cit Attorney
OCEANO COMMUNITY SERVICES DISTRICT:
i.G `rn-e/
BARBARA J. NN
President of the Board of Directors
ATTEST:
KEVIN WALSH
District Interim General Manager
APPROVE AS TO FORM:
AL SIMAS
District Counsel
7/30/2021 Print Preview
https://oceanocsd.municipalcodeonline.com/book/print?type=resolutions&name=2012-03_Sale_Of_Water 1/2
2012-03 Sale Of Water
RESOLUTION NO.: 2012-03
A RESOLUTION CALLING FOR PLACEMENT OF AN INITIATIVE MEASURE REQUIRING THAT AN
ELECTION SHALL BE HELD PRIOR TO ANY SALE OF WATER ON A PERMANENT BASIS
The following Resolution is now offered and read:
WHEREAS, Elections Code § 9301 allows for any proposed ordinance to be submitted to the District by
filing an initiative petition with the county elections official; and
WHEREAS, the initiative petition For The Enactment Of An Ordinance By The Oceano Community
Services District Requiring That An Election Shall Be Held Prior To Any Sale Of Water On A Permanent
Basis was filed with the county elections official on January 24th, 2011 (Petition attached hereto as
Attachment 1); and
WHEREAS, the Elections Division of the County Clerk-Recorder's Office conducted a random sample
verification of the signatures on that petition, and determined that the number of valid signatures was
more than the number required to certify the petition; and
WHEREAS, on February 23, 2011 the County Clerk-Recorder presented a certificate of sufficiency to
the OCSD Board of Directors for the petition; and
WHEREAS, pursuant to Elections Code § 9311, the OCSD Board of Directors has decided to submit to
the voters of Oceano the question of whether to require an election before making any sale of water on a
permanent basis; and
WHEREAS, pursuant to Elections Code § 1405(b) the election for a local initiative that qualifies pursuant
to Elections Code § 9311 shall be held at the next statewide election occurring not less than 88 days
after the date of the order of election; and
WHEREAS, the next statewide election date after the order is the General Election on November 6,
2012;
NOW, THEREFORE, BE IT RESOLVED AND ORDERED by the Board of Directors of the Oceano
Community Services District, as follows:
1. The question of whether to require an election before making any sale of water on a permanent basis,
as set forth in Attachment 1, will be placed on the November 6, 2012 General Election ballot as follows:
OCEANO COMMUNITY SERVICES DISTRICT ORDINANCE ______ Must an election be
held prior to any permanent sale of water to any entity outside the Oceano Community
Services District?
YES
NO
2. The full text of the measure will not be printed in the sample ballot booklet. The full text will be posted
on the OCSD website and on the County Clerk-Recorder's website, and a copy of the full text will be
mailed to any voter upon request. The statements required by Election Code § 9313 shall be printed in
the sample ballot booklet.
On motion by President Guerrero, seconded by Director Hurdle, and carried on the following roll call
vote, to wit:
AYES: President Guerrero, Director Hurdle, Director Angello, VP Lucey
7/30/2021 Print Preview
https://oceanocsd.municipalcodeonline.com/book/print?type=resolutions&name=2012-03_Sale_Of_Water 2/2
NOES:
ABSENT: Director Searcy
ABSTAIN:
HISTORY
Adopted by Res. 2012-03 on 5/9/2012
State Water Project
Excess Entitlement Policies
Approved by Board of Supervisors January 14, 2003
Excess Entitlement - Definition
The District State Water Project “Excess” Entitlement is the portion of the District’s total
entitlement that is not contracted to others for their deliverable or drought buffer uses.
Priority of Use
1. Prior to transferring the excess entitlement for any other use, contractors of state water
entitlement with capacity in Phase II of the Coastal Aqueduct shall have the first right
to utilize the excess entitlement for “drought buffer” (reliability) purposes under the
terms of a drought buffer agreement.
2. Preference shall be given to local agencies and water purveyors regardless of whether
a transfer is on an annual, multi-year, or a permanent basis.
3. No permanent transfer of the excess entitlement for use outside District boundaries
shall be made prior to a final update of the District’s Master Water Plan adopted by
the Board of Supervisors, and then only if the transfer is consistent with the then
adopted Master Plan. (See ‘Note’ below)
4. No multi-year transfer for use outside District boundaries shall be made with a term in
excess of five years prior to a final update to the District’s Master Water Plan adopted
by the Board of Supervisors, and then out of District transfers can only take place if
the transfer is consistent with the adopted Master Plan.
5. On any out -of-District transfer, preference shall be given to those that provide: a)
revenues that recover current costs and some or all of the District’s past costs, b)
maintain the District’s right to use the water in the future, or c) which are used for
environmental mitigation.
6. The Public Works Director is authorized to determine the annual amount of the excess
entitlement to transfer to the State Water Project “Turnback Pools” established under
the existing terms of State Water Agreements. In making that determination, the
Public Works Director shall first consider local needs and how the use of the Turnback
Pool might impact other potential transfers.
Note:
These policies were adopted by the Board of Supervisors “with the understanding there will be
no permanent sales outside the District.”