HomeMy WebLinkAbout05/19/1992, C-9 - STATE WATER PROJECT UNALLOCATED RESERVES lllll^I�tII��IIIIIII�I ppYi III MEETING DATE:
ul I Y�I �Ilfl City of SanSJS OBISpO May 19, 1992
u COUNCIL AGENDA REPORT ITEM NUMBER:C_a
FROM: William T. Hetland PREPARED BY: Gary W. Henderson
Utilities Director Water Division Manager
SUBJECT: State Water Project Unallocated Reserves
CAO RECOMMENDATION: By motion, direct staff to recommend to the San Luis Obispo
County Flood Control and Water Conservation District to only
subscribe for the amount of state water for which contracts
have been executed.
DISCUSSION:
The City Council approved the City's participation in the State Water Project on April 21,
1992. The City of San Luis Obispo has requested an allotment of 3,000 acre-feet per year.
The San Luis Obispo County Flood Control and Water Conservation District (District) has a
maximum water entitlement of 25,000 acre-feet per year. Due to a number of local agencies
opting not to participate in the project, it is anticipated that the full 25,000 acre-feet
entitlement will not be necessary to meet the requested allotments.. The District has to
decide what amount of state water, over and above the requested allotments, they will
request from the State Water Project. This amount of water is referred to as unallocated
reserves. The purpose of this agenda report is to obtain a Council recommendation to the
District on unallocated reserves.
There are a number of agencies that have expressed an interest in obtaining state water but
were not identified in the environmental impact report for participation. Since they were
not included in the environmental analysis, the District can not agree to serve these areas
until additional environmental assessments are completed. The District may also want to
establish unallocated reserves for future, yet to be determined, users of state water.
The County Board of Supervisors will decide on May 27, 1992 what portion, if any, of the
unallocated reserves will be held for agencies which have not committed to the project. The
amount of water held in reserve will have a direct financial impact on the City and other
agencies participating in the project. The water treatmEnt plant and the transmission
pipelines will have to be designed for increased future capacity and this extra costs will be
added proportionately to each participating agencies costs. In the future, if other agencies
request a portion of the reserve they would be required to pay all expenses incurred by the
other agencies for the portion of water that they receive.
At this time, the County staff estimates that 10,000 to 12,000 acre-feet will be requested by
participating agencies, including the City of San Luis Obispo's 3,000 acre-feet per year. The
City's April 21 staff report assumed a value of 10,268 acre-feet per year. Various interested
agencies not previously identified in the environmental reports have requested participation
(ie. Nipomo farmers, Airport area, Edna Valley area, Santa Margarita Ranch, etc.) with an
estimated total request between 2,000 and 6,000 acre-feet per year.
Il��hl►�►►iI�iIIIIIIIIP I11City of San 1. 6 OBISpo
COUNCIL AGENDA REPORT
State Water Project Unallocated Reserves
Page 2
The District has the option of requesting only the amount that is subscribed for or
establishing a reserve which could be as high as 15,000 acre-feet. The table in the fiscal
impact section of this report illustrates the impact on the costs associated with various levels
of allocated and unallocated scenarios.
I
FISCAL IMPACT: j
COUNTY OF SAN LUIS OBISPO SUBSCRIPTION
Allocated Unallocated Total cost
Best Case 25,000 0 25,000 $533
17,500 0 17,500 $547
I
10,268 0 10,268 $564
Figure 4
Assumption 10,268. 2,000 12,268 $5841/
10,268 7,232 17,500 $637
Worst Case 10,268 14,732 25,000 $709
1/ The $584 does not include the cost for the City's
local connection to the State Water Project, a cost
that is estimated at $24/af. It assumes 3,000 of for
the City of San Luis Obispo.
The above table shows the impact on the City of San Luis Obispo's unit cost for state
water depending on how much unallocated water is contracted for by the District.
The range of costs between the best and worst cases is $533 to $709, a difference of
$176 per acre foot. If no unallocated reserves were contracted for, the unit cost for
state water would be reduced by $20/acre-foot ($584 - $564 = $20). If the District
contracted for the full requested amount of unallocated reserves, the City's unit costs
would increase $53/acre-foot ($637 - $584 = $53). Finally, if the District contracted
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Nii% COUNCIL AGENDA REPORT
State Water Project Unallocated Reserves
Page 3
for the full 25,000 acre-feet entitlement, the City's unit cost for state water would
increase by $125/acre-foot ($709 - $584 = $125).
The primary factor driving the variation in costs is the sizing of the local water
treatment plant. The District is passing on the cost for oversizing the treatment plant
to the local contractors and will recapture those costs as future users connect to the
system. The plant must be large enough to treat all of the state water subscriptions
by Santa Barbara and San Luis Obispo Counties. The cost of oversizing of the State
Water Project Coastal Aqueduct would be passed on to the County taxpayers through
the existing tax rate. i
RECOMMENDATION:
The agencies identified in this report have only expressed an interest in state water
and have not committed to the project because of a lack of environmental review.
There is no guarantee that any of these agencies will commit in the future to pay for
the costs incurred. City staff also does not feel that the City should subsidize water
costs for undefined future water users. Therefore, staff recommends that the City
request the District to subscribe only for the amount of state water for which
contracts have been executed.
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