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HomeMy WebLinkAbout01/19/1993, 6 - PROCEDURAL STEPS FOR DELIVERY OF STATE WATER TO AIRPORT AREA���h��N��INllllllllll III MEE "7 r TI 1 )_1r-:q3 1 =II� CI O Sdn *sOBISPO COUNCIL AGENDA REPORT ITEM NUMBER: FROM: Arnold B. Jonas, Community Development Director BY: Glen Matteson, Associate Planner, and Gary Henderson, Water Division Manager SUBJECT: Procedural steps for delivery of state water to airport area CAO RECONUMDATION: Receive this information and give direction to staff concerning desired City participation in the process. INFORMATION situation The County Board of Supervisors has reserved up to 1000 acre -feet annual supply from the State Water Project ( "state water ") for use by airport area property owners, at the request of those owners., All of the airport area is within the City's planning area, and most of the area planned for eventual development is within the City's urban reserve line. The City has planned to provide services and annex the airport area in phases, as resources become available (general plan Land Use Element Update, February 1992 hearing draft). City voters have rejected participation in state water. Provision of water through an entity other than the City would be inconsistent with adopted and proposed City general plans. At its January 5 meeting, Council asked staff to prepare an outline of the procedural steps and opportunities for City involvement in the decisions leading to state water actually being provided to the airport area. Response City staff has consulted with County staff, and has prepared the attached outline. The outline covers the most likely principal ways state water could become available to the airport area. Not all contingencies can be foreseen at this time, and other options may be available. The outcome depends largely on how the Board of Supervisors interprets its previously approved criteria for eligible water purveyors (Attachment C). Separately, the County Administrator is preparing a response to the Mayor's recent letter to the Board of Supervisors, which involves additional planning and utility issues. Principal opportunities for City input are as follows. eel,'/ 111111111111Iin10111 city of San " s OBISpo IMS COUNCIL AGENDA REPORT 1. The Local Agency Formation Commission ( LAFCO) would hold a hearing concerning the addition of water service to the existing County Service Area (CSA) 22. LAFCO approval is. required under the terms of formation of this special district, which is now limited to planning activities. Under the schedule for decisions on state water participation, the LAFCO meeting of February 18 is the most likely date for such consideration. Recommendation Have a council member and staff attend any LAFCO meeting to present the City's opposition to a special district providing urban services within the City's urban reserve line. 2. A Board of Supervisors meeting is scheduled for February 23, to decide if potential water contractors meet the approved criteria. Criterion #5 (Attachment C) requires all environmental impacts to be mitigated. There is a question how this can be decided when the environmental determination itself occurs later_(see item 3 below). Also, criterion #5 requires that "the project must be consistent with the recommendations of the Economic Advisory Committee and the Water Resources Advisory Committee." County engineering staff intends that these committees make recommendations before scheduled Board action. The water committee has considered the issue twice, and continued action, with further consideration scheduled for February 3. Recommendation Have a council member and staff attend this Board meeting, to present the City's position on environmental review and fulfillment of other criteria. Staff can provide additional analysis of these issues for the February 2 Council meeting, allowing a City position to be decided before the Board meeting. 3. A Board of Supervisors meeting is scheduled for May 25, to make an environmental determination (presumably approve an EIR addendum) and enter water supply contracts. Recommendation If efforts proceed this far, have staff review and comment on the EIR addendum, and present any concerns to Council in time for them to be presented.to the Board as City positions. ATTACHED A. State water procedures outline B. County Engineering Department timeline C. County criteria for using state water GMAAIRWT.CAR .01 PROCEDURES OUTLINE DELIVERY OF STATE WATER TOAIRPORT ApELA I-..OPERTY OWNERS > > = future public meeting; schedu ! -es are bold (A) Add water as service for existing CSA 22 (now limited to planning) > > LAFCO approval required Feb. 18 or Mar. 18, 1993 Board certifies El' for County participat: (1992) Board of Supervisors tentative: ,roves request to assign "unallocated . --rve." (November 1992) Property owners decide type of organization* to be water purveyor: (B) Form mutual water company (no public input) (C) Expand Cal Cities Water Company service area > > Cal PUC ruling required (D) Form new CSA > > LAFCO approval required > > Board of Supervisors approves draft contract for transmittal to potential purveyors. January 12, 1993. > > County Water Resources Advisory Committee County Economic Advisory Committee forms position on state water for airport forms position on state water for airport area: February 3 area ( ?) > > Board of Supervisors determines that purveyor meets criteria and enters water reservation contract with purveyor, contingent on environmental determination (this is the "no turning back" point); Board enters contract with environmental consultant for addendum to previous EIR's. February 23, 1993 Board approves EIR addendum and enters water suI212 and treatment agreement with purveyor. May 25, 1993 * Potential organizations are listed very generally from most (A) to least (D) likely to meet the County •heduile. Owners may pursue splitting the area, with one part pursuing SWP water and the other _ arsuing another source. GMAWTROL.DOC 1-s TIMELINE for SWP POTENTIAL CONTRACTS Nov 23, 1992 Board acts to approve consideration of potential contracts Dec 30, 1992 Meet with potential contractors • Distribute Draft Agreements • Project timeline Jan 4, 1993 Begin final design of Coastal Branch Jan 6, 1993 Water Resources Advisory Committee • Consideration of proposed Contractors Jan 12, 1993 Board of Supervisors • Approval of Draft Contract Jan 14, 1993 Contracts distributed to potential contractors Jan 18, 1993 Begin final design of Regional Water Treatment Plant Feb 15, 1993 Contracts received back from contractors Feb 23, 1993 Board of Supervisors • Enter water reservation contracts with potential contractors • Enter revised Master Water Treatment Contract with CCWA • Enter contract with CEQA consultant for EIR addendum Mar 25, 1993 Payments for Water Treatment and CEQA due May 25, 1993 Board of Supervisors • Approve EIR Addendum • Enter Water Supply and Water Treatment agreements a \timetwo R L W/-`/ CRITERIA FOR USING STATE WATER 1. Water be available to existing public agencies, public water companies regulated by the PUC and existing mutual water companies with no water being contracted to individuals. 2. Substantial public and economic benefit 3. Conservation and reuse of water must be significant components of water use plans for the project 4. All costs must be paid by the water user. 5. Project must be consistent with LUE, LUO, Coastal Plan (if in coastal zone), RMS, Master Water and Sewer Plan, and Rural Settlement Strategy. All environmental impacts must be mitigated. In addition, project must be consistent with recommendations of the Economic Advisory Committee and Water Resources Advisory Committee. 6. Countywide growth rate must not be altered simply because of participation in the SW P. 7. Must be geographically near other water users to avoid taking new water to a remote area and attracting other inappropriate development 8. Those requesting water for agricultural uses must use the water for agricultural purposes only and execute an easement on their property which will permanently limit the use of the land for agricultural purposes. 9. No water is to be used for projects within incorporated cities. a \criteria U .'r Ir • �___4* il y. TO: John Dunn, City Administrative Officer 0 FROM: Arnold Jonas, Community Development Director DATE: January 8, 1993 SUBJECT: City Participation in the Future of the Airport Area You have requested that I provide brief comments on likely future activity in the unincorporated area south of the current City boundary, and easterly of South Higuera (including the Margarita area) . I' 11 refer to that area as the Southern Unincorporated Area, or SUA, to both minimize association with specific sub areas such as the Airport Area, and to generally encompass a larger area of concern. Other major expansion areas, such as Dalidio, are not the focus of these comments. BASIC CITY OPTIONS Three basic options appear available to the City at this time in charting our future course relative to the SUA. 1. Abandon efforts to annex and participate directly in the future planning efforts for the SUA. 2. Continue to seek annexation of the area, in whole or part, with the goal of the City determining uses and intensities of development. This option has two obvious subdivisions: a) annexation of the entire area at one time, or b) annexation of the area on a planned incremental basis. CONCLUSIONS 1. The election, relative to the State Water Project, established a major "watershed" concerning City decision making in regard to this area. The perception on the part of many is that the City has withdrawn as an active participant in the determination of the future for the SUA. Other potential water sources, such as Naciamento or Salinas expansion, are seen as so speculative or far in the future as being non - responsive to dealing with questions of city expansion. 2. Urban uses will continue to develop in the SUA under County control. The City will be required to directly respond to the impacts of this development without the benefit of the increased revenues which it generates. Major impacts could include additional traffic on city streets, air pollution control concerns, demands for additional housing and supporting services, and demands A additional housing and supporting services, and demands to extend city services beyond our boundaries (such as being ordered by the Regional Water Quality Control Board to accept sewage from the new unincorporated development). 3. The type of future development in the SUA will be different than what would have occurred under City guidance, and could be of different character and lesser quality than our community would prefer. • Existing development in the City fully utilizes the safe annual yield of the present water supply system. Participation in the State Water project appeared to provide the most readily available source of supplemental supplies. The availability of other possible sources, such as increasing the capacity of Salinas Reservoir or utilizing Naciamento lake, could have a longer development schedule given political, environmental, technical, cost and other concerns. • Water has been the single most determining feature of development control in the SUA during past decades. The City has been the sole reliable source of water in quantity and quality sufficient to support any significant amount of additional new construction. Policies that prohibit new water service outside the City, and substantial reluctance to annex additional new areas, has slowed growth outside our jurisdictional boundaries. • The effectiveness of this "indirect control" has depended in part on the cooperation of the land owners within the SUA, and the County. As long as there was potential for urban services being available to them within what they perceived was a reasonable time period, it was advantageous for the land owners to tolerate the City's reluctance to take them in. This was particularly true given the potential for development intensities beyond what would be available in the County. In similar fashion, the County was willing to cooperate by restraining development while devising a mutually acceptable future development plan for the area. • The parameters of that tenuous relationship have now changed. The City is no longer able to hold out hope of providing the services land owners desire (most importantly water), and earlier expressed impatience with the City will most likely intensify. Alternative development possibilities within the County will be pursued, even if the overall potential is somewhat less than the landowners hoped the City would allow. o��w7 • Promotion of the California Cities Water Company (CCWC), and perhaps County Service Area 22, as alternative water purveyors for the SUA (utilizing in part the City's foregone state water allocation) may have created the impression /desire that substandard development can take place in the area without annexation to the City. City annexation of all or part of the SUA, with water provided by other purveyors, could act to minimize the potential for sub- standard development. However, Board of Supervisors criteria for allocation of state water prohibit it's use in any incorporated aarea. • The potential of joint service expressed in the preceding paragraph appears to have been also precluded by recent City Council actions. A de -facto policy of prohibiting city annexation for properties or projects making use of state water in any fashion appears to be in place. This philosophy, in conjunction with County provision of state water to the SUA, raises doubt as to the continued practicality, and hence validity, of many current and proposed city land use policies and programs. The extent of expansion necessary for our utility systems to serve the "built -out" community, for example, could be substantially less. Assuming the end result in the SUA to be an unincorporated, developed area, the need to provide urban levels of services would fall to the County. How well the County is able to plan for and provide those services could directly affect the City. • Given the constraints to timely provision of urban service levels to the SUA, the City could consider allowing (upon annexation) a lower density of residential or industrial use, or establishment of agricultural zoning as appropriate. This alternative has the advantage of retaining City control over quality of development, and accrual of incremental economic benefits. However, the benefits apparent to property owners may not be sufficient to stimulate them to participate in the annexation. Z-9 _ WETING AGENDI DATE ITEM # BOARD OF SUPERVISORS COUNTY GOVERNMENT CENTER • SAN LUIS OBISPO, CALIFORNIA 93408 • 805- 781 -5450 January 19, 1993 Peg Pinard, Mayor City of San Luis Obispo Post Office Box 8100 San Luis Obis , CA 93403 -8100 Dear Mayo . ' HAND DELIVERED LAURENCE L.LAURENT DISTRICT TWO Attached is a copy of a memo I just received from county planning staff which I requested to provide answers to your letter of December 30, 1992. 1 am sorry this is getting to you so late but I am sure the holiday period had something to do with the delay. For now, I will let staff's memo stand as my response to your letter, but I do believe a meeting between members of your council and members of the Board of Supervisors would be highly appropriate. I look forward to that meeting occurring. Sincerely, LAURENCE L LAURENT Supervisor, District Two Attachment cc - Members of the Board of Supervisors Robert E. Hendrix, County Administrative Officer Ellen Carroll, Environmental Coordinator Alex Hinds, Director of Planning /Building Clint Milne, County Engineer COPI1rSTO.- ❑ • l�a�ores Ammon f ❑Fri EirSDD[R. fAp ❑ FIN. DIR. m CAO ❑ FIRE CHIEF noW4Fy ❑ FW DIIt p�C=/oRIG. ❑ PouCECFL El MGMT. TEAM ❑ REC MR. F pF7Ll ET �EILA� 0 LR7LDIR n RECEIVED JAK 19 1993 CITY COUNCIL SAN LUIS OBISP_O;. CA COUNTY OF SAN LUIS OBISPO OFFICE MEMORANDUM DATE: JANUARY 19, 1993 TO: LAURENCE L. LAURENT, DISTRICT 2 SUPERVISOR FROM: DANA LrLLEY, SENIOR PLANNER VIA: ALEX HINDS, DIRECTOR PLANNING AND BUILDING DEPARTMENT SUBJECT: RESPONSE TO ITEM NO. 3 OF 12/30/92 LETTER FROM MAYOR PEG PINARD This information is provided to assist you in preparing a response to Mayor Pinard's request. The first two items in her letter relate more to the Engineering Department or the Environmental Coordinator's Office. Therefore, we are limiting our response to item no. 3 as it relates to the existing and proposed draft Land Use Element for the San Luis Obispo Planning Area. Both the existing and proposed versions of the San Luis Obispo Area Plan reflect the assumption that the area between the San Luis Obispo city limits and urban reserve line will be part of the city at some future date. The county is currently responsible for land use regulation and police and fire protection services for the area, and will continue to provide these services until the areas are annexed into the city (unless the city decides to provide services without annexation). The public review draft of the San Luis Obispo Area Plan (which is expected to be published in January 1993) will not propose that the county designate either state water or Nacimiento water to areas projected in the plan to be annexed into the city within the 20 -year horizon of the plan. Rather, the plan assures that this decision will be affected by the City of San Luis Obispo at the time of annexation. The remaining areas are proposed to be provided imported water by means of one or more community water supply systems to supplement existing groundwater resources, and only if water supply is not available from the city. The areas not projected in the plan to be annexed by the city within 20 years are located along and south of Tank Farm Road. Furthermore, if imported water supplies are provided to the area, the infrastructure for delivery of the water will to the extent feasible be designed for future integration with the city system. Neither this department nor the draft plan make any. conclusions regarding whether or not the city will be able to accept state water in the future, or whether another source of water can be substituted at that time (such as Nacimiento water). Publication of the public review draft San Luis obispo Area Plan will present the general public and the city an opportunity to provide additional guidance for county decision makers to consider regarding county land use policies for this area. Decisions made by the county to-date regarding state water and its potential availability to the airport area are by no means irrevocable. A number of major steps remain before the property might be successful in their pursuit of state or Nacimiento water while under county jurisdiction. For example, approval by LAFCo is a prerequisite to expansion of existing, or creation of new, water supply entities before they can serve the airport area. Also, financing for the substantial costs involved with obtaining imported water represents another major hurdle. Please contact me if have additional questions or concerns. c: Lee Williams, James Lindholm, Ellen Carroll r y 4.44 \�J (/Is 0 Eaoh copy of attach Cit y Of SeAuvl W1S OBISPO OFFICE OF THE CITY COUNCIL Post Office Box 8100 -San Luis Obispo. CA 93403-8100-805/549-711 December 30, 1992 Bud Laurent, Chairman Members of the Board of Supervisors County of San Luis Obispo County Government Center San Luis Obispo, CA 93408 Dear Chairman Laurent: DEC 3 11992 One of the most critical tasks currently facing the Board of Supervisors is allocating water from the State Water Project to various entities in the county. A significant number of requests now before the Board relate to properties which are within the urban reserve line of the City of San Luis Obispo. Both the County General Plan and our own city General Plan anticipate that these properties will be a part of the city at some future date, obtaining benefit from the availability of city services and contributing to the overall health and success of the community. Consequently, actions by you which facilitate future development within our area of interest are of critical importance to us. I have watched your allocation process with growing concern, as each request is considered individually and out of context with the larger area in which it is located. There appears to be little effort given to understanding the relationship of the allocation proposals to the city and county planning programs which encompass the area. Several questions immediately come to mind as a result. How do the current allocation proposals conform to the analysis and determinations of the Environmental Impact Report which was prepared for extendino the State Water Project to and. through our county? What are the findings (and mitigations, if any) that relate to urban levels of development in the unincorporated area adjoining San Luis Obispo? 2. Several different jurisdictions, including County Service Area 22, California Cities Water Company and Edna Valley property owners are vying for water in the general Airport Area. What are the limits of service for these different entities? Do they overlap, or result in areas which would not have service available? How would service capabilities be determined? For example, if a jurisdiction covers more than one area in the county could their water allocation be used anywhere within their service area at their discretion? 3. The residents of the City of San Luis Obispo have clearly indicated that they do not want State Water used within the city. If development takes place in the unincorporated area (including the Margarita area) utilizing State Water, future Page Two Laurent - December 30, 1992 annexation to the city could be precluded. Urban services such as police and fire protection, land use planning -..and regulation, and sewage treatment /water reclamation, would have to be provided by the County. Does the County have plans for providing such services? These few questions show that water allocations in the Airport Area must be made in .a thoughtful and comprehensive manner, avoiding the speculative, disjointed approach that seems to have characterized the process to date. Regardless of whether the County or the City is ultimately responsible for authorizing and regulating the development which will flow from the water decisions, good planning is critical to the well -being of both jurisdictions. I urge you to pursue that course now, before irrevocable decisions are made which, when viewed in retrospect, could be seen as not being in the best interests of the County or the City or the people we represent. Sincerely, f PEG PINARD MAYOR C. City Council Bob Hendrix Clint Milne Alex Hind City Administrative Officer Community Development Director Utilities Director { COPMT0: - 1 • � ActiOA FYI 6 CDD DIR O ❑ FIN. DIR. SUBMITTED BY KA ❑ FIRE CHIEF 0Er,Q MNEr ❑ FW Dm. i CLERK /CIRIG. ❑ POLICE C31 ALLEN SETTLE ❑ MCMT. TEAM CJ REC. DIR. ❑ D El UM DIR I" --TING AGENDA D,,. E ITEM # WHEREAS, the San Luis Obispo County Board of Supervisors has... entered into a contract with the Sta -te of California to purchase water entitlements from the State Water: Project; and WHEREAS, the City of San Luis Obispo has chosen not...- t.o...,.._. burden its taxpayers with this expensive and unreliable source of water; and WHEREAS, the State requires tie County to provide security in the event of default in the form-of a district tax to make up for the default; and WHEREAS, the San Luis Obispo County Board of Supervisors has proposed to sign contracts with unproven, private interests who are at greater risk of defaulting than legitimate municipalities, thereby increasing the risk of a "taxpayer bailout "; and WHEREAS, the City of San Luis Obispo has requested that the San Luis Obispo County Board of Supervisors not expose its taxpayers to financial risk by taking unallocated reserves of State Water Project water; and WHEREAS, the San Luis Obispo County Board -of Supervisors has chosen to ignore this request by taking unallocated reserves of State Water Project water, which more than doubles the County's obligation to the State of California, thereby doubling the risk to district taxpayers. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo that: 1. If the San Luis Obispo County Board of Supervisors chooses to enter into contracts with real estate developers, private partnerships, 11 paper" water companies, and other private interests, steps be taken to protect the taxpayers of this district from the financial liability which will occur should these private interests default. 2. All costs for C.E.Q.A. review, water treatment, and all other costs for reservation of the water be paid in a "lump sum" at the time of signing contracts. 3. Since these "up front" costs represent only a small fraction of the liability assumed by district taxpayers, capital costs for.the Coas.tal Branch of the State Water Project, ongoing operating costs, and other costs should be guaranteed by a bond. RECEIVED JAN Z � 1993 CITY COUNCIL SAN Buis. oeisEo, �A G R R M D E S I G N G R O U P Architecture - Phv ninj • Err;inrtnnS - !nhvioc4 • Landscape Architecture January 19, 1993 The Honorable Peg Pinard Mayor of San Luis Obispo City of San Luis Obispo P.O. En�_ 8100 San Luis Obispo, CA 93403 -8100 Re: Airport Area Dear Mayor and Members of the Council: MEETING COP['STO - ❑ - Dawtc Action ❑ FYI CDD DX KFIN. jn7 CA [� o D[R. ❑ FM CHIEF AC:�CAO ❑ Fw DaL _/�TTORNEY :e CLERxiORIG. ❑ POUCE a-L ❑ MGMT. TEAM U REC DIX ❑ CREADFILE ❑ UTILDIR. Q�i1� ❑ RECEIVED JAN .1- 91993 ADMINISTRATION SAN LUIS OBISPO, CA AGENDA ITEM # On behalf of the Airport Area property Owners, we respectfully request that the City Council schedule a study session to meet with our property owners and RRM Design Group and discuss mutual areas of interest and concern with respect to the future development and water issues in the Airport Area. Since time is clearly of the essence, we respectfully request that the City set this study session at the earliest possible date and delay any formal action expressing a City position on this issue until such time as we are able to have a cooperative and well- conceived study session. If the City is inclined to have this meeting, hopefully during the second week of February, we will be prepared to have the members of the CSA -22, the Airport Area Property Owners Association, the Airport Area Technical Advisory Committee, and the County Planning staff participate in this discussion. By way of background, the Airport Area has been the sub eci of an eiaboiate plunuino effort for a number of years with both the City and County. The property owners in the area feel they have been more than patient and supportive of the policy direction formed for the Airport Area. The City Council, an intimate player in this effort, approved the concept plan in 1989, but subsequently chose to deny this area the resource base it needs to fully buildout consistent with the concept plan. It was following this direction from the Council that the property owners decided to move forward with the planning effort under County guidance. Accordingly, the decision to secure a State Water allocation was a conscious effort to obtain the water resources needed to implement the City and County approved concept plan. 3o_6 South Higuera Street, San Luis Obispo, California 93401 805/543-1794 1011 - nth Street, Modesto. California 95354 2 091544 -1794 A C- l: ..... i .... ... .e..,. r V.,, ldrm.. -u. .A,.lnrra - Li., n.. ,.nm Ln C011110 The Honorable Peg Pinard Page 2 January 19, 1993 If the City is truly interested in becoming the ultimate controller and service provider of the Airport Area, we would like to discuss with you and the Council how this might be achieved in a way that makes sense to both the City and the Airport Area property owners who have waited so long for the proper land use and infrastructure planning of this most important area. We have reviewed the letter the City sent to the County regarding the Board's allocation of State Water to CSA -22. While we can appreciate the City's concerns, we are sincerely concerned about the tone and substance of this letter. If we are to establish a positive and mutually respectable dialogue on the issues that affect our respective constituencies, it can only occur through open communication and the thoughtful expression of ideas. Many years of cooperation and effort have already transpired. Let us each give ourselves one more opportunity to calmly listen to each other and discuss the issues and opportunities that face each of us. Perhaps then we can begin to resolve and settle upon a strategy for the Airport Area is mutually advantageous to all parties. This is an extremely important action by your Council. Please let us know your decision. Sincerely, R DESIGN GROUP 6 eeAnne aier Project Manager Airport Area Specific Plan cc: Board of Supervisors Airport Area Technical Advisory Committee Mr. Dana Lilley Mr. John Dunn v/lh- aasp.pin MEETING DATE L MEMORANDUM TO: John Dunn, City Administrative Officer (10 FROM: Arnold Jonas,/ Community Development Di DATE: January 12, 1993 ' Ion - YI d ❑ CDD DIP- CAO ❑ FIN. DIR ACAO ❑ FIRE CHIEF ATTORNEY ❑ FN' DIR !J CLMZK /O ?3G. ❑ pOUCEC,, 140.im MAIM CJ F,EC. DIR CREADFILE ❑ UTILDIR. SUBJECT: City Participation in the Future of the Airport Area You have requested that I provide brief comments regarding future activity in the unincorporated area south of the current City boundary, and easterly of South Higuera (including the Margarita area) . I'll refer to that area as the Southern Unincorporated Area, or SUA, to both minimize association with specific sub areas such as the Airport Area, and to generally encompass a larger area of concern. Other major expansion areas, such as Dalidio, are not the focus of these comments. CONCLUSION The City decision to decline participation in the State water Project has generated a perception on the part of some persons that we are no longer interested in positive participation in future land use decisions in the SUA. The City should consider issuing an accurate statement of the City vision for the area. If we embrace this area as a future city expansion area, this commitment should include a timely plan for the provision of adequate water to allow attainment of City General Plan land use proposals for the SUA. BASIC CITY OPTIONS Three basic options appear available to the City at this time in charting our future course relative to the SUA. 1. Abandon efforts to annex and participate directly in the future planning efforts for the SUA. 2. Continue to seek annexation of the area, in whole or part, with the goal of the City being determination of uses and intensities of development. This option has two obvious sub - options: a) annexation of the entire area at one time, or b) annexation of the area on a planned incremental basis. DISCUSSION • The election, relative to the State Water Project, established a major "watershed" concerning City decision making in regard to the SUA. The perception on the part of many is that the City has withdrawn as an active participant in the determination of the future for the IL area. Other potential water sources, such as Naciamento or Salinas expansion, are seen as so speculative or far in the future as being non - responsive to dealing with questions of city expansion. • Existing development in the City fully utilizes the safe annual yield of the present water supply system. Participation in the State Water project appeared to provide the most readily available source of supplemental supplies. The availability of other possible sources, such as increasing the capacity of Salinas Reservoir or utilizing Naciamento lake, could have a longer development schedule given political, environmental, technical, cost and other concerns. • Water has been the single most determining feature of development control in the SUA during past decades. The City has been the sole reliable source of water in quantity and quality sufficient to support any significant amount of additional new construction. Policies that prohibit new water service outside the City, and substantial reluctance to annex additional new areas, has slowed growth outside our jurisdictional boundaries. • The effectiveness of this "indirect control" has depended in part on the cooperation of the land owners within the SUA, and the County. As long as there was potential for urban services being available to them within what they perceived was a reasonable time period, it was advantageous for the land owners to tolerate the City's reluctance to take them in. This was particularly true given the potential for development intensities beyond what would be available in the County. In similar fashion, the County was willing to cooperate by restraining development while devising a mutually acceptable future development plan for the area. • The parameters of that tenuous relationship have now changed. The City is no longer able to hold out hope of providing the services land owners desire (most importantly water) , and earlier expressed impatience with the City will most likely intensify. Alternative development possibilities within the County will be pursued, even if the overall potential is somewhat less than the landowners hoped the City would allow. • Promotion of the California Cities Water Company (CCWC), and perhaps County Service Area 22, as alternative water purveyors for the SUA (utilizing in part the City's foregone state water allocation) may have created the impression /desire that substandard development can take place in the area without annexation to the City. City annexation of all or part of the SUA, with water provided by other purveyors, could act to minimize the potential for sub - standard development. However, Board of Supervisors criteria for allocation of state water prohibit it's use in any incorporated area. • The potential of joint service expressed in the preceding paragraph appears to have been also precluded by recent City .Council actions. A de -facto policy of prohibiting city annexation for properties or projects making use of state water in any fashion appears to be in place. This philosophy, in conjunction with County provision of state water to the SUA, raises doubt as to the continued practicality, and hence validity, of many current and proposed city land use policies and programs. The extent of expansion necessary for our utility systems to serve the "built -out" community, for example, could be substantially less. Assuming the end result in the SUA to be an unincorporated, developed area, the need to provide urban levels of services would fall to the County. How well the County is able to plan for and provide those services could directly affect the City. • Urban uses will continue to develop in the SUA under County control. The City will be required to directly respond to the impacts of this development without the benefit of the increased revenues which it generates. Major impacts could include additional traffic on city streets, air pollution control concerns, demands for additional housing and supporting services, and demands to extend city services beyond our boundaries (such as being ordered by the Regional Water Quality Control Board to accept sewage from the new unincorporated development). • The type of future development in the SUA will be different than what would have occurred under City guidance, and could be of different character and lesser quality than our community would prefer. • Given the constraints to timely provision of urban service levels to the SUA, the City could consider allowing (upon annexation) a lower density of residential or industrial use, or establishment of agricultural zoning as appropriate. This alternative has the advantage of retaining City control over quality of development, and accrual of incremental economic benefits. However, the benefits apparent to property owners may not be sufficient to stimulate them to participate in the annexation.