11c Measure to Purchase State WaterMEMORANDUM
TO: CITY COUNCIL
FROM:
SUBJECT: CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT
THE JUNE 5, 2012 ELECTION TO AUTHORIZE PURCHASE OF
STATE WATER
DATE: JANUARY 24,201 2
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 $1 55,000. 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 MEASLIRE ON THE BALLOT AT THE JUNE 5,
2012 ELECTION TO AU'THORIZE PURCHASE OF STATE WATER
JANUARY 24,201 2
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 ddditional 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
CITYCOUNCIL
CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5,
2012 ELECTION TO AU'THORIZE PURCHASE OF STATE WATER
JANUARY 24,201 2
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 followivg 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
CITYCOUNCIL
CONSIDERATION OF PLACING A MEASURE ON THE BALLOT AT THE JUNE 5,
2012 ELECTION TO AUTHORIZE PURCHASE OF STATE WATER
JANUARY 24,201 2
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
6'h 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 RESOLU'TION OF THE ClTY COUNCIL OF THE ClTY 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:
SECTION 2. That the ballots to be used at the election shall be in form and content as
required by law.
ClTY OF ARROYO GRANDE
MEASURE -
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?
SECTION 3. That the City Clerk is authorized, instructed and directed to coordinate with
the County of San Luis Obispo Registrar-RecorderICounty 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.
Yes
No
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 510242,
except as provided in 514401 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 I
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, ClTY CLERK
APPROVED AS TO CONTENT:
STEVEN ADAMS, ClTY MANAGER
APPROVED AS TO FORM:
TIMOTHY J. CARMEL, ClTY ATTORNEY
Agenda Item 11.c.Page 7
RESOLUTION NO.
A RESOLUTION OF THE ClTY COUNCIL OF THE ClTY
OF ARROYO GRANDE SElTlNG PRIORITIES FOR
FILING A WRITTEN ARGUMENT REGARDING A ClTY
MEASURE AND DIRECTING THE ClTY 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:
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Arroyo
Grande as follows:
ClTY OF ARROYO GRANDE
MEASURE
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?
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.
Yes
No
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, 201 2.
Agenda Item 11.c.Page 9
RESOLUTION NO.
PAGE 3
TONY FERRARA, MAYOR
ATTEST:
KELLY WETMORE, ClTY CLERK
APPROVED AS TO CONTENT:
STEVEN ADAMS, ClTY MANAGER
APPROVED AS TO FORM:
TIMOTHY J. CARMEL, ClTY ATTORNEY
Agenda Item 11.c.Page 10
RESOLUTION NO.
A RESOLUTION OF 'THE ClTY COUNCIL OF THE ClTY OF ARROYO
GRANDE, CALIFORNIA, PROVIDING FOR THE FILING OF REBUTTAL
ARGUMENTS FOR ClTY 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, 201 2.
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 Tem
Joe Costello, Council Member Jim Guthrie, Council Member
-
Caren Ray, Council Member
Agenda Item 11.c.Page 14