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Home My WebLink AboutItem 6e. Update on the Roadmap for Maximization of Recycled Water Item 6e Department: Utilities Cost Center: 6001 For Agenda of: 2/7/2023 Placement: Consent Estimated Time: N/A FROM: Aaron Floyd, Utilities Director Prepared By: Mychal Boerman, Utilities Deputy Director - Water SUBJECT: ROADMAP FOR MAXIMIZATION OF RECYCLED WATER RECOMMENDATION Receive and file an update related to the City’s timing and strategy for maximization of recycled water. POLICY CONTEXT Policies and restrictions on delivery of recycled water outside of City limits are outlined in the General Plan Land Use Element Policy 1.13.2 Recycled Water: Provision of recycled water outside of City limits may only be considered in compliance with Water and Wastewater Element Policy A 7.3.4 and the following findings: A. Non-potable/recycled water is necessary to support continued agricultural operations. B. Provision of non-potable/recycled water will not be used to increase development potential of property being served. C. Non-potable/recycled water will not be further treated to make it potable. D. Prior to provision of non-potable/recycled water, the property to be served will record a conservation, open space, Williamson Act, or other easement instrument to maintain the area being served in agricultural and open space while recycled water is being provided. Policy A 7.3.4, referenced above, reads as follows: Consider the potential to deliver available recycled water supplies to customers outside the City limits, including analysis of policy issues, technical concerns, and cost recovery, provided it is found to be consistent with the General Plan. Page 359 of 489 Item 6e DISCUSSION Background On November 15, 2022 the City Council held a study session to discuss opportunities for expansion of the use of recycled water in order to maximize the use of this resource. At this meeting, staff provided the City Council with long-term and short-term opportunities for maximization of recycled water. Long-term strategies included utilizing available resources to recharge the groundwater basin, either through injection wells, or percolation, and short-term strategies included expanding in-City recycled water irrigation, exchanging recycled water for a reduction in groundwater pumping by agricultural parties within the SLO Valley Subarea, and selling recycled water outside City limits during periods in which it had no feasible use within the City. The City Council provided general feedback that staff should continue to pursue long- term use of recycled water for recharge of groundwater or surface water reservoirs and that all three short-term options should be considered in order to maximize supplies. The City Council also provided direction that staff should develo p a transparent process and roadmap for recycled water sales that would be legally compliant, recover costs, and be consistent with existing City policies. Additionally, City staff were directed to coordinate with County of San Luis Obispo staff on creation and submission of a grant application that would provide the City and County Groundwater Sustainability Agencies with funding to complete elements of the Groundwater Sustainability Plan that are precursors to delivering recycled water outside of City limits. This grant application was submitted and includes a request for funding to support expansion of the groundwater monitoring network, a groundwater extraction measurement program, a pumping fee program for the Edna Valley, a supplemental water feasibility analysis, and various other activities. Recycled Water Roadmap Following the study session and at the direction of Council, staff began developing a Roadmap for Maximization of Recycled Water (Attachment A). This roadmap is a flowchart or process diagram which includes all short-term and long-term maximization options discussed during the study session. The roadmap details the sequential steps that that would be required prior to expanding the use of the City’s recycled water resources, specifically outlining a series of steps that are needed as part of the process to sell recycled water outside of City limits. Because parties that are interested in purchasing recycled water are attempting to understand when recycled water may be available for sale and use, the Estimated Recycled Water Delivery Timeline (Attachment B) provides projected timelines for completion of each step in the sales process, as well as additional narrative. Previous Council or Advisory Body Action On March 21, 2017, the City Council approved the 2017 Recycled Water Master Plan which outlined the City’s expansion strategy for recycled water use, including plans to ultimately utilize recycled water as a potable water supply in the future. On November 15, 2022, the City Council participated in a study session to provide staff with feedback regarding long-term and short-term strategies to maximize recycled water use. Page 360 of 489 Item 6e Public Engagement In addition to the November 2022 study session regarding recycled water maximization, staff also met with a County Supervisor, County of San Luis Obispo staff, Cal Poly staff, and the Edna Valley Growers in January 2023 regarding the availability of recycled water for short-term sales. These meetings included details related to the sales process, as well as projected timelines for delivery. CONCURRENCE This report has been reviewed by Utilities staff who are involved with the production and delivery of recycled water. As this project is focused within the Utilities Department, and does not impact other City departments, concurrence from other City depart ments is not required at this point. ENVIRONMENTAL REVIEW Receiving an update regarding recycled water maximization does not constitute a “Project” under State CEQA Guidelines Sec. 15378. CEQA may be required for future expansion projects and projects will be analyzed on a case-by-case basis to determine environmental review requirements. FISCAL IMPACT Budgeted: NA Budget Year: 2021-23 Funding Identified: NA Fiscal Analysis: Updates to the City Council related to recycled water maximization do not directly result in a fiscal impact. Requests for resources associated with maximization of recycled water may be brought forward as part of the 2023-25 Financial Plan. Resources required to complete maximize the City’s recycled water resources are estimated to be less than one FTE. ALTERNATIVES The City Council could request that staff modify projected timelines or specific work efforts associated with the Recycled Water Roadmap. Staff believe that the actions shown in the Recycled Water Roadmap and the proposed timeline are feasible for completion by staff and required to meet legal requirements associated with this project. ATTACHMENTS A - Roadmap for Maximization of Recycled Water B - Estimated Recycled Water Delivery Timeline Page 361 of 489 Page 362 of 489 City Council Study Session 3.0 - Short Term Use1.0 - Long Term Use 1.1 Potable Reuse Road Map (Carrollo Engineering) 3.3 Deliver Recycled Water Outside of City Limits 3.2 Expand In-City Irrigation 3.1 - Offset In-Basin Groundwater Pumping 3.1a Identify Largest Exchange Opportunities that Require Minimal Infrastructure 3.1b Meet with Large Exchange Partners to Gauge Interest 3.1c Interested in an Exchange 3.d Not Interested in an Exchange 3.1e Review Specifics with Water Rights Attorney 3.1g Negotiate and Develop Contract 3.1f Refocus Efforts on Outside-City Sales & In-City Expansion 3.2a Utilize Existing CIP Process to Identify and Pursue Largest Sites Only 3.2b Expand to Large Developments through Existing Development Process 3.3a Develop & Release Request For Interested Parties (RFIP) 3.3i Update Interested Parties / Gather Additional Information/Clarity 3.3j Refine Pricing Based on Received Proposals and Negotiation Terms 3.3k Meet With Parties for Go/No Go Based on Estimated Pricing & Negotiation Parameters - Require Letter of Intent if Interested 3.3l Interested 3.3m Not Interested 3.3q Focus on in-City Expansion and In- Basin Pumping Offset 3.3p Env. and Infrastructure Impact Analysis 3.3n Full 218 Analysis 3.3o Full Legal Analysis 3.3r Refine Costs and Negotiate Contract Terms 3.3s Begin Construction/ Delivery (2025) Completed / Ongoing Work Efforts Legend/Key Need Additional Resources / Staffing Will Utilize Existing Staffing 3.3b Develop Baseline Pricing (rough estimate of minimum cost) 1.2 Surface Water Augmentation 1.3 In-City Groundwater Recharge 1.4 Outside-City Groundwater Recharge 1.5 TBD - Soonest Completion 2029 3.3d If Oversubscribed (Based on RFIP Interest) 3.3c If Not Oversubscribed (Based on RFIP Interest) 3.3f Develop Competitive Selection Criteria (Price, Alignment with City Goals, env benefit, etc.) 3.3g Return to Council to Determine Negotiation Parameters 3.3h Return to Council to Review/ Approve Criteria & Determine Negotiation Parameters 3.3e Refine Pricing Model Roadmap for Maximization of Recycled Water Page 363 of 489 Page 364 of 489 'HYHORS 5HOHDVH5),3&RPSOHWH 5HYLHZ5),3VDQG'HYHORS5DQNLQJ&ULWHULD5HYLHZ5DQNLQJ&ULWHULD 'HWHUPLQH1HJRWLDWLQJ3DUDPHWHUV(VWLPDWHG5HF\FOHG:DWHU'HOLYHU\7LPHOLQH'HYHORS5HTXHVWIRU,QWHUHVWHG3DUWLHV5),3WRLGHQWLI\ORFDOSDUWLHVZKRDUHLQWHUHVWHGLQSXUFKDVLQJUHF\FOHGZDWHU5HTXHVWZLOOLQFOXGHWKH&LW\¶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age 365 of 489 Page 366 of 489