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HomeMy WebLinkAbout03/12/1996, 1 - DISCUSSION OF CERTAIN WATER POLICIES CONTAINED WITHIN THE WATER MANAGEMENT ELEMENT OF THE GENERAL PLAN (W.M.E.) • MEETINr, GTF "'� ►�h�lf��ln �� city of San WIS OBISp0 /1- 1996 REM N MB COUNCIL AGENDA REPORT FROM: John Mossai' Prepared By: Gary W. Henderson Utilities Director Water Division Manager SUBJECT: Discussion of Certain Water Policies Contained within the Water Management Element of the General Plan (W.M.E.) CAO RECOM H24DATION: Provide direction to staff relative to potential revisions to the following policies contained within the Water Management Element of the General Plan. 1.) 9.1.A. - Two-to-One Retrofit Requirement 2.) 8.3 - Intensification and Infill Reserve 3.) 8.4 & 10.3-5. - Accounting for Reclaimed Water 4.) 8.5., 9.LB. & 11.1 - Use of Private Wells DISCUSSION: Report in Brief The City Council adopted the Urban Water Management Plan (U.W.M.P.) on November 15, 1994. Chapter 2 of the U.W.M.P. was adopted as the Water Management Element (W.M.E.) of the General Plan, therefore any revisions to the policies will require public hearings before the Planning Commission and the City Council. At the October 3, 1995 City Council meeting, Council directed staff to return to Council to discuss the following three policies: 1) the 2-to-1 retrofit requirement; 2) the reserve of water for intensification and infill within the 1994 City limits; and 3) accounting for reclaimed water. Staff also recommends that the Council discuss an additional topic relative to the use of private wells to serve new development. The 2-to-1 retrofit requirement was implemented with the original Water and Wastewater Management Element and Water Allocation Regulations. The 2-to-1 requirement was originally adopted because the City was unsure of the actual ongoing water savings that could be achieved through retrofits. Since that time, several studies have shown that the estimated water savings are actually being realized. During the public hearings held before the Planning Commission and City Council for the U.W.M.P., ratios other than 2-to-1 were discussed and the final consensus was to keep the retrofit requirement at 2-to-1. The policy relative to the reserve of water for intensification and infill (W.M.E. 8.3) within the existing City limits also received thorough discussions prior to the adoption of the U.W.M.P. & W.M.E. This policy was also discussed during deliberations regarding services for new development when considering the General Plan Land Use Element update on June 14, 1994. • e A��UIN city Of San IL-,.,4OBISPO sm COUNCIL AGENDA REPORT W.M.E. Policies Page 2 Policy 8.3 supports the land use policy contained within the Land Use Element by holding in reserve adequate water for infill and intensification. The method for accounting for reclaimed water is addressed by Policies 8.4, 10.3, 10.4, and 10.5. These policies restrict how reclaimed water can be accounted for and may tend to reduce developer participation in the project. Staff would recommend revising the policies to view reclaimed water as a new water supply and credit developed reclaimed supplies towards safe annual yield consistent with other polices contained within the W.M.E. The use of private wells to allow new development without City water allocations is referred to in several sections of the W.M.E. and the General Plan Land Use Element. Applicants for several recent developments have urged staff to allow the use of an on-site well to meet the needs of multiple properties, thereby reducing or eliminating the need for a water allocation. Staff's interpretation is that this is not allowed based on the adopted policies. Staff has concerns with this issue from an administrative and legal standpoint. The existing groundwater basin that underlies the city as been extensively investigated and has proven to be unreliable from a water quality and quantity basis. If private wells are allowed to serve properties and the wells become contaminated or go dry, the City may have a legal responsibility to serve the properties. The City can not bank on the use of private wells to meet the long-term water needs of the community. Therefore, staff recommends that the policies be revised to allow private wells on individual parcels to reduce or eliminate the offset requirement only as an interim source if no water is available for allocation or through the offset program. Background Following numerous public hearings before the City Council and the Planning Commission, the Council adopted the Urban Water Management Plan (U.W.M.P.) on November 15, 1994. Chapter 2 of the U.W.M.P., containing the policies concerning water resources, was adopted as the Water Element of the General Plan. Since this is an element of the General Plan, any revisions will require public hearings before the Planning Commission and the City Council. The policies contained in the W.M.E. were thoroughly discussed at numerous public hearings and reflect specific Planning Commission and Council decisions. On October 3, 1995, a report titled "Water Supply Study Session" was presented to Council. The report outlined the current available water resources and the projects that are being pursued to meet the City's current and future needs. Following the presentation, Council directed staff to return to Council to discuss three policies which are contained within the Water Management Element of the General Plan. The three policies concerned : 1) the 2-to-1 retrofit requirement; 2) the reserve for intensification and infill within the 1994 City limits; and 3) accounting for reclaimed water. These three policies will be discussed further in this report. ���n�(r►Ilullllllll�Pp1 IUIII city of San LUIS OBISPO COUNCIL AGENDA REPORT W.M.E. Policies Page 3 Staff suggests Council discuss an additional topic relative to the use of private wells to serve new development. Developers have requested that the City allow the use of a private well to serve multiple properties. Staff's interpretation is that this is not allowed based on a number of policies contained within the W.M.E. which are discussed in detail in the following sections of this report. 2-to-1 Retrofit Requirement Section 9 of the W.M.E. outlines water allocation and offset policies. The policy requiring the 2-to-1 retrofit for new development is contained in Policy 9.1.A. as shown below: "When there is no safe annual yield to allocate to a project, that project may be built if the developer makes changes, in facilities served by the City, which will reduce long-term water usage equal to twice the allocation required for the project, consistent with policy 8.3. " Prior to affirmation of this policy, ratios as low as 1-to-1 were considered. The 2-to-1 requirement was implemented with the original Water and Wastewater Management Element and Water Allocation Regulations when the actual water savings that could be achieved over the long term were not confidently known. Therefore, to be conservative, the City required a 2-to-1 retrofit to insure that even if the estimated water savings were not correct there would be a safety factor in the calculations. There have been several studies done in recent years that validate the water saving assumptions that the City uses to estimate the water saved through retrofitting existing facilities. At this point, staff is confident that the estimated water savings are actually being realized. Following adoption of this policy, Council adopted a financial policy that is related to the retrofit requirement. The policy credits$150 per bathroom retrofitted (ie. toilet, showerhead, and faucet aerator) against the water impact fee which must be paid as part of the new development. The $150 per bathroom credit is the estimated average cost to actually provide the retrofits. Therefore, the financial implications to the developer are essentially the same since the water impact fee is reduced by the cost of the retrofit requirements. It should be noted that the per capita planning figure of 145 gallons per person per day which was adopted as part of the W.M.E. (Policy 3.2.) is based in part on the assumption that all toilets within the City have been retrofitted, while approximately 43% actually have been. With the adoption of the 145 gpcd figure, the water use factors that are used to project the water demand of new projects (development) have been reduced by 20% thus lowering the required retrofit requirement for new projects. The original water use factors were based on figures � 3 �����i�►I�I(IIIIIII� ���IU city of San lUez; OBISpo COUNCIL AGENDA REPORT W.M.E. Policies Page 4 developed assuming per capita usage rate of approximately 165 gpcd which was reduced by 20% assuming an aggressive ongoing water conservation program. Alternatives to current policy. 1. Reduce the requirement to a 1-to-1 retrofit. Pros: May be perceived as more equitable requirement for new development to offset the estimated water demand on the City's water system. Additionally, projects which are consistent with the General Plan may be feasible and proceed. Cons: The retrofit of the entire City may take longer to accomplish. There would be no net gain of water savings as development occurs. 2. Eliminate the retrofit requirement. Pros: The City would receive the full water impact fee which could allow a more aggressive toilet retrofit rebate program. Also, the retrofit upon sale ordinance and the lack of availability of toilets and fixtures other than low flow will eventually result in the retrofit of the majority of the City. Cons: The retrofit of the entire City will take longer to accomplish. If retrofits through other programs do not keep ahead of new development, the City could be placed in a vulnerable position if another drought occurs. If the 2-to-1 requirement is reduced, several projects that have not obtained all their building permits will have excess credit. Staff recommends that if the policy is revised, it should only apply to projects that initiate the planning process after adoption of the revisions. Intensification and Infill Policy 8.3 relative to the reserve of water for intensification and infill is contained in the W.M.E. as shown below: "A sufficient amount of water supply, including the potential savings from replacing water fixtures in the City (policy 9.1), will be held in reserve to serve intensification and infill within existing City limits as of July 1994. " ����� ►►�IIIII��� IIUII� city of San Luis OBIspo MONO . COUNCIL AGENDA REPORT W.M.E. Policies Page 5 In their deliberations regarding services for new development when considering the General Plan Land Use Element update on June 14, 1994, Council approved a policy which states, "...development in an annexed area may be approved only when adequate City services can be provided for that development, without reducing the level of services or increasing the cost of services for existing development and build-out within the City limits as of July 1994" (1.13.4, Development and Services, General Plan Land Use Element). Water Management Element Policy 8.3 supports this land use policy by holding in reserve adequate water for infill and intensification within the existing city limits. Combined with other policies in the W.M.E., this policy reserves water available through the retrofit program to areas within the existing City limits, which leaves only 33 acre-feet (W.M.E. Table 8) of water available to annexation areas through retrofit offset. This policy will limit-the amount of annexation development that can occur until a new water supply project is initiated. The Water Reuse Project has the greatest potential at this time to be accomplished within a relatively short time frame, but even this project is not expected to deliver water before late 1998. While there may be a valid planning reason for the reserve requirement, that is, it is desirable that vacant properties within the City develop prior to development of outlying properties, as a practical matter, there always has been and will continue to be, undeveloped properties within the City. Their failure to develop, as the policy now stands, prevents development in outlying areas as the water held in reserve for infill, even though it is not being used, is precluded from being used for other purposes. In short, the assumption that sufficient water has to be held in reserve for total infill and intensification is somewhat unrealistic, because that situation has not and likely will not happen. Alternatives to current policy. 1. Allow some portion of the amount of water that is reserved for infill to be allocated to new annexation areas on a first come first serve basis. Pros: Additional projects which are consistent with the General Plan may be feasible and proceed. Cons: If additional new water supplies are not completed in a timely manner, water allocations may not be available in the future to all properties located within existing city limits. i ��m�i�►►�IIII��P� ►�U�U city of San tu,.3 OBISpo MiS COUNCIL AGENDA REPORT W.M.E. Policies Page 6 2. Delete the requirement to reserve water for intensification and infill within the existing City limits. Allocations would be available on a first come first serve basis. Pros & Cons: Same as alternative above. Accounting for Reclaimed Water The method for accounting for reclaimed water is contained within several areas of the W.M.E. The specific language of the policies relative to accounting for reclaimed water are shown below: ■ 8.4: "Reclaimed water shall be accounted for as a "non potable" supply as identified under policy 10.3. Use of reclaimed water shall not be considered a component of the City's safe annual yield, but may reduce demand for potable water supplies as reclaimed water use increases. " ■ 10.3: "As reclaimed water supplies new development or substitutes for potable water in existing development, reliable yield of non potable water will be increased. Reclaimed water will be credited to non potable reliable yield not when it is potentially available at the treatment plant, but when it is actually available to a user upon completion of the necessary distribution facilities. " ■ 10.4: "When the City provides distribution facilities that allow substitution of reclaimed water for potable water, the resulting reduction in potable water demand will be given offset credit for government projects (Including new City parks and buildings), under any policies or rules limiting the amount of water which can be allocated to development projects. " ■ 10.5: A. "When a developer of a private project provides distribution facilities that allow substitution of reclaimed water in facilities that have used potable City water, the resulting reduction in potable water demand will be credited to any allocation of potable water needed for the developer's project, at a two-to-one ratio, similar to the offset credit. " B. "When a developer of a private project provides distribution facilities that allow use of reclaimed water in that project, any required potable water allocation for that project shall be reduced by a corresponding amount. " I r iv �����►�►►►�uIIIIIIIIIP�°' ����III MY of san LUIS OBISPO j COUNCIL AGENDA REPORT W.M.E. Policies Page 7 These policies restrict how reclaimed water can be accounted for and may tend to reduce property owner/developer participation in the project. Alternatives to current policy. Council could consider a range of alternatives to the existing policies. The existing policies could be considered to be at one end of the range. The other end would consider reclaimed water as a new water supply and credited towards safe annual yield consistent with other policies contained with the W.M.E. for new potable water supplies. If there is no potable water to allocate to new development, offset credits could be developed using reclaimed water to offset existing potable water use within the City consistent with the policies contained within the W.M.E. Staff would recommend revising the policies to view reclaimed water as a new water supply, which is consistent with the development of the water impact fees contained within Appendix VII of the U.W.M.P. Use of Private Wells The use of private wells to allow new development without City water allocations is referred to in several sections of the W.M.E. and the General Plan Land Use Element. The interpretation of the policies is not clear and has led to disagreement between developers and staff. The specific policies are listed below: ■ 8.5: "when developments are supplied by private groundwater wells, the yield of those wells will not be counted toward the City's safe annual yield. Such yield, however, will result in the demand for City water supplies being lower than it otherwise would be, which may necessitate adjustments of the per capita water usage figure used to estimate overall demand. " ■ 9.I.B.: "The City may exempt a project from needing an allocation or an offset, or may reduce the amount of the required allocation or offset, to the extent that the project is supplied by a private well which will not significantly affect the yield of City wells. Such a well may be operated by the owner of the property containing the well only for the owner's use. The City will consider the cumulative effects of wells in the groundwater basin in making this decision. Such wells may be used only when: L The City Council approves the well proposal as part of a specific land development project approval, and the proposed well system meets all City standards. 1alrl011$111�104JJJ�1 city of San ILA,:; OB I Spo am COUNCIL AGENDA REPORT W.M.E. Policies Page 8 2. A qualified, independent, hydrological investigation demonstrates that the well(s) reliably can provide sufficient quality and quantity of water for the proposed land development project and will not impact the yields from City wells. " ■ 11.1.: "The City will be the only purveyor of water within the City. " Property owners have the right to utilize water which underlies their property for use on the property which contains the well. Use of the water for areas outside the property where the well is located falls under appropriative water rights which essentially means that the well is being used to supply other property owners. This would be in violation of Policy 11.1 above. Appropriative rights are second to overlying property rights and can be lost in the future if a groundwater basin is overdrafted or adjudicated. Applicants for several recent developments have urged staff to allow the use of an on-site well to meet the needs of multiple properties, thereby reducing or eliminating the need for a water allocation. Staff has concerns with this issue from an administrative and legal standpoint. The existing groundwater basin that underlies the city as been extensively investigated and has proven to be unreliable from a water quality and quantity basis. The largest producing city wells have been shut down due to contamination that was drawn into the wells, from areas surrounding the wells, due to constant pumping. If private wells are allowed to serve properties and they become contaminated or go dry, the City may have a legal responsibility to serve the property. It should be noted that the use of an on-site well does not reduce the amount of water that the City is pursuing through new water supply projects such as Salinas Reservoir and Nacimiento Projects. The City still needs to develop adequate supplies to serve all properties consistent with the General Plan. The City can not bank on the use of private wells to meet the long-term water needs of the community. Another closely related issue involves private properties which utilize a well to reduce or eliminate their water bill but are connected to or rely upon the water system to meet the fire protection needs of the property. These properties are benefiting from the water system but may not pay any bill because the City's current water billing is strictly based on commodity charges. Recommendation Staff recommends that the policies be revised to clearly not allow private wells to reduce or eliminate the need for an allocation to serve a project, with the following exceptions: I ����i�i�uuulllllflllll1Q ����III city of San LUIS OBISp0 COUNCIL AGENDA REPORT W.M.E. Policies Page 9 A. A well may be used to reduce the allocation based on the use of the well to serve non-potable needs of the project (ie. irrigation, etc.). B. When an allocation or potential offset is not available, a private well may be allowed to reduce or eliminate the required allocation or offset only as an interim source. The development must still pay water impact fees associated with developing new water supplies and eventually receive or develop an allocation when available. All policies relative to the use of private wells should clearly state that the well can not serve multiple properties. Also, staff recommends that the Council direct staff, as part of the annual rate review, to consider alternatives for billing properties that utilize the water system to meet their fire protection needs but use private wells to meet their consumptive demands. CONCURRENCES The Community Development Department concurs with the recommendations made within this report. FISCAL EMPACT There is no direct fiscal impact to the City associated with the proposed revisions contained within the body of this report. Any revisions directed by Council will require additional staff time to prepare and take through the public hearing process. I Ci .k < SAN LUIS OBISPO COUNTY HEALTH DEPARTMENT DIVISION OF ENVIRONMENTAL HEALTH 2156 Sierra Way • P.O. Box 1489 • San Luis Obispo, California 93406 TELEPHONE (805) 781-5544 • FAX (805) 781-4211 'oa January 11, 1996 John Dunn 1996, City Administrative Officer City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 Re: People's Kitchen--Temporary Relocation At the request of City Officials, I visited the Welding Shop at 609 Palm Street, San Luis Obispo to determine whether the shop would pose any apparent health or safety hazards to People's Kitchen diners. Assuming the shop meets structural and fire code occupancy requirements, I believe the welding shop would be satisfactory for the proposed temporary use providing: -All unsecured overhead items are removed or properly supported. -All nonessential/extraneous items are removed to proper storage facilities or recycled. -The shop is thoroughly swept out and the interior of the building is water flushed or steamed cleaned to remove accumulated dust, spider webs, loose paint, etc. If you would like for this Department to reevaluate the temporary dining structure after these cleanup activities have been completed please contact me at 781 5552. STEVE CARNES, R.E.H.S. Supervising Environmental Health Specialist Peopkichltr A DEPARTMENT OF THE SAN LUIS OBISPO COUNTY HEALTH AGENCY 7 Water: Ensuring the Future A Position Paper of the San Luis Obispo Chamber of Commerce RECEIVED December ]995 JAN 1 6 lyYb CITY COUNCIL SAN 1-111C n81SPO.CA Table of Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current Situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Recommendations . . . . . . . . . . . . • • • • • • • • " " " " " " " ' 4 Water Reuse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Salinas Dam Expansion . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Nadmiento Water Project . . . . . . . . . . . . . . . . . . . . . . . . . 7 Other Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Conservation/ Retrofitting . . . . . . . . . . . . . . . . . . . . . . . 10 State Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distribution Enhancements/Regional Water Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Desalination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Groundwater Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 A Position Paper of the San Luis Obispo Chamber of commerce. produced By Bill Thoma Water Task Force Members: Presidad Bob Griffin Bill coy Ltgrs&*c Via.-Presidcnt Bob Griffin Pierre Rademaker Wayne Longcrier Waier Task Fam Chair Pierre Rademaker Scott Gregory Rob Rossi Director of Governmental Affairs Steve Sec est Bill Thoma Introduction The commitment of the San Luis Obispo Chamberof Commerce to securin new water sources is one of our organization's most _ g over the past decade. In 1989, the Chamber Boes ard agreed that the single most important issue facing local businesses was that of water. This Prediction has continued to hold true well into the next decade. Although the many years of drought experienced by the community may seem to have come to an end with the "March Miracle " of 1991, the future of San Luis Obispo's water supply remains uncertain. The possibility of a return to drought conditions is a near certainty, and the many years of emergency water measures designed merely to keep water flowing to current residents has not alleviated pressures felt by local businesses, because additional water is still unavailable for expansion The Chamber's Water Task Force was established in 1990 to identify water sources having the greatest long term promise for the community. The Task Force published the first comprehensive study project on water by the Chamber'which was used for several years to educate the public on water supply issues. In 1995' the Water Task Force completely updated and revised this document to accommodate new issues surrounding the water supply problem in San Luis Obispo, as well as to incorporate changes in technology and the political climate that have affected the feasibility of different water programs. The Chamber continues to believe that securing art adequate water supply is the most important challenge faced by the City of San Luis Obispo. The Task Force has continued to be an important factor in the water equation thanks largely in the able guidance of its chair,Pierre htademaker. Operating under the guidance of our President, Bill Thoma, and Bob Griffin, the Chamber's Vice-President of Legislative Affairs, our commitment to providing San Luis Obispo with inexpensive, environmentally sound, and politically feasible sources of water has remained an important ongoing goal. 1 Process The Chamber has continued its emphasis on identification of stable,long- term water sources in this document. The Water Task Force has long operated under the assumption that short-term emergency measures,while important in drought conditions, accomplish little in terms of securing the long-term economic health of the area. To that end, the Task Force has identified the potential long-term water supply sources for the area, and has analyzed each of these options based on cost of service delivery,reliability,environmental impact, and political feasibility. The complex interplay of each of these factors has painted a picture wherein several water supply options remain available to the City, each with its own strengths and weaknesses. Current Situation Is the drought over? This seems to be one of the most important questions affecting how San Luis Obispo will plan for its long term water needs. In the winter months of 1995,the City saw major flooding as the decade-long drought seemed to break with a crash of thunder. For many citizens, the rains seemed to herald an end to their water supply woes. A longer view of the 1994-95 winter season paints a different picture, however. Much of the rain washed out to sea and was never used or saved. The season's rains also did not solve problems with severe groundwater depletion that occured as a result of emergency measures to cope with the drought The overdraft of the groundwater basin during the drought caused serious contimination problems in the basin— an impact that will affect the availability of this resource when the next drought occurs. And the next drought will occur. It may be that 1996 will see a return to drought conditions,or it may be that the next drought will take longer to arrive. Nevertheless,San Luis Obispo exists in a semi-arid climate, and our days of water abundance are dearly over. When the next drought occurs, it is important that our community be well-prepared. San Luis Obispo was ill-prepared for the last drought because lack of water resources had been used for three decades as a growth control measure. This emphasis resulted in limited access to water for prospective new residents, so that when the drought arrived even current residents were left without 2 sufficient water supplies. Limiting water has not limited population growth at all. San Luis Obispo's population grew even under resource limitation policies through increased densities per unit and undocumented rental units,casting further strain on the existing water supply. When future growth is factored into the equation,San Luis Obispo's water situation becomes even more threatening. The City's General Plan identifies the Airport Area, Dalidio Area, and Froom Areas as future growth zones. There is no water supply to semice these areas at the current time. The importance of the airport area in particular to the economic and environmental health of this community is explored in detail in the Chamber's Airport Area Annexation: Today's Action for Tomorrow's Options. Because there is no water available for business expansion,there is a de facto moratorium on development in the City at the present time. Without a water supply for the expansion areas, this moratorium will continue. If the City seriously desires to implement its General Plan,it will need to provide a water supply for these growth areas. Otherwise, development will cease to occur within City limits and will proceed on those County lands identified as greenbelt and open space zones. The City of San Luis Obispo can provide a water supply, keeping development in desirable areas consistent with the General Plan,or it can fail to provide such a source and allow development to occur in the County. To some extent, the lack of a reliable water source has already encouraged this second option to occur. Water resources for the airport area are currently being pursued with County Service Area (CSA) 22 funding. If the City does not want to see a separate urban area developing on its southern border with its own resource and infrastructure provisions, it will need to develop water options for this area. The water supply question affects every aspect of our quality of life in San Luis Obispo. Lack of water means businesses cannot expand in the City, so they will expand into the County and greenbelt areas instead. Lack of water means an edgy business climate, because businesses cannot be certain that they will be able to provide service during drought years. Lack of water encourages agriculture to leave the area for greener pastures,and to continue the legacy of agricultural land fracturing. Lack of water means no landscaping for residents, lowering property values and ruining the beauty of our city. Reliable,long term sources of water are vital to the health of our community,and the ability to maintain our quality of life. 3 /-4 Recommendations The good news for San Luis Obispo is that several options remain that can provide an adequate water supply for our community. It is not too late to secure these options,although further delays will result in increased costs to the community as the least expensive options disappear. To support the adopted City buildout identified in the General Plan, San Luis Obispo must acquire water sources that will provide 3,861 acre feet of water per year. Of this amount,2,500 acre feet will serve existing residents as a reliability and siltation reserve, and 1,361 acre feet will be the additional water required for the General Plan implementation. Water supplies must be able to deliver this much additional water per year under critical drought conditions,a factor known as safe annual yield. The Water Task Force analysis of the options available to San Luis Obispo has yielded three recommendations for water supply sources that we feel should be pursued immediately and simultaneously. These are the Water Reuse Program, the Salinas Dam Expansion,and the Nwimiento Project. There are also five sources that we feel are important options for the future should attempts to secure the three best sources fail. These alternate and future sources form a separate section at the end of this document, and should not be ignored. Water Reuse Supply Potential: 1,233 acre feet per year Delivered Cost Range: $716-$751 per acre foot The City's proposed Water Reuse program centers around the idea of using water currently processed in the City's wastewater treatment plant to support irrigation and industrial uses. Although this water is non-potable (i.e. it cannot be consumed by people), it is clean and can be used for numerous other uses. By using reclaimed water for irrigation and industrial uses, the potable water supply that residents and industries currently use would be freed up for other uses. Effectively, the Water Reuse Program would increase the water supply for the City by 1,233 acre feet per year. 4 Advantages of the Water Reuse Program include its environmental friendliness,resulting from the fact that it would essentially recycle water that has already been used. The project is also highly reliable because drought conditions would have little effect on water supply. The project. will automatically grow with the City as well,when San Luis Obispo grows to its General Plan buildout population of 56,000,the additional residents would increase the water available through this program to 1,600 acre feet per year. One negative issue surrounding water reuse is that it will slightly lessen the flow to San Luis Obispo creek during summer months. The City plans to mitigate any environmental problems that this could cause,especially to protect creek populations of steelhead and turtles. Because the Neater for the Reuse Program does not originate in the creek basin (it is imported from the Salinas and Whale Rock Reservoirs), reductions in creek flow would not be a reduction in natural water flow in any case. Even after mitigation, however, there could still remain a perceived environmental threat because the creek is not drought-proof even under current conditions. The major political obstacle with this project, however, lies with downstream property owners who have used the creek water for many years. They are likely to oppose the project because it might eliminate their ability to use this water. Because Meuse water does not originate in the creek, downstream users do not possess legal rights to it,and these users may be required to reduce their water consumption from the creek to ensure that habitats are sufficiently protected. If the City delays this project,however, continued use of this water by downstream users could preclude the City from being able to use it in the future. The Chamber strongly supports the Water Reuse program. It is one of the most cost-effective water supply options currently available, has few 7MO 7it0i's environmental impacts, is politically feasible, and water rights have already been established by the State Water Resources Control Board. Also, this program could be brought on-line fairly quickly (within five , years.) Nevertheless,Water Reuse alone is insufficient to provide all 0 of the necessary water that the City Wa6erbm UUMDam Nast needs, and should be pursued in No Single Pmied Fulfills Entire Need conjunction with otherprojects. 5 /-17 Salinas Dam Expansion Supply Potential: 1650 acre feet per year Delivered Cost: $M-$675 The Salinas Dam was constructed as an emergency,project to supply water for Camp San Luis Obiso and the City, during World War M It was constricted and is owned by the Army Corps of Engineers,is managed by the County, and is currently used for water only by the City of San Luis Obispo. The original construction called for inclusion of a operable gate on the dam spillway. In 1941,the Army decided the gate was unneeded, and it was never installed. The Salinas Dam Expansion Project would complete the original plan for the dam by constructing the gate, resulting in an additional safe annual yield from the dam of 1,650 acre feet of water per year. The Army Corps will not allow construction to proceed until a local agency takes control of the dam. The agency in charge will most likely be the County Flood Control and Water Conservation District. Prior concerns over the seismic safety of the dam have turned out to be unfounded, but as the project has continued, several issues have been raised regarding the draft environmental impact report. The City of San Luis Obispo implemented a phased approach to the project, and has committed to include mitigation measures that will alleviate environmental pressures that the project may create, including mitigating for the loss of oak trees and wetlands that will be inundated as the water line rises. Additional costs associated with the environmental mitigation process have resulted in the cost per acre foot of water increasing from original estimates Of$300. Nevertheless,water from the Salinas Dam still represents the most cost-effective source of water for the City. If the City chooses not to proceed with the expansion,however, it will sacrifice its right to pursue the expansion at a later time, because the State will reduce the City's entitlement at the reservoir if it is not used. The main stumbling block to obtaining Salinas water is the intense political Pressure against the project Several groups have threatened to take legal action protesting the project if the City proceeds with its current plan- Although the case law suggests that the City would prevail in such legal action, these lawsuits would slow the completion of the project and 6 increase the cost for delivering the water. The Chamber strongly supports continued pursuit of the Salinas Dam expansion,with continued mediation and arbitration to resolve issues of merit. Salinas Reservoir water is likely to remain one of the most cost- effective solutions to San Luis Obispo's water shortage. Although political pressures are strong, the proposed alternative to Salinas Dam water, the Nacimiento Water Supply Project,could be halted at any time if one of the four major players withdraws from the project The Chamber feels that the City of San Luis Obispo should not sacrifice its water rights at the Salinas Reservoir solely to pursue the Nacimiento project, especially because the success of Nacimiento relies on agreements outside the City of San Luis Obispo's influence. Nacinuento Water Project Supply Potential: 3,380 acre feet per year Delivery Cost: $90041,100 per acre foot The Nacmo iento Project is a regional project that is proposed to serve eighteen different water agencies. The County of San Luis Obispo has an entitlement of 16,200 usable acre feet of water in Lake Nacimiento, and plans to divide that water supply among agencies around the county. The project consists of construction of an intake structure, regional water treatment plant,pumping stations, and several pipelines to deliver water to the participating agencies. At the time of this report's publication,participating agencies have been identified and requests for water allocations have been made, although no agencies have yet signed a contract obligating themselves to take their allocation. Requests from Paso Robles,Templeton,San Luis Obispo,and Atascadero constitute the four largest requests for water allocation in the project Several advantages exist to pursuing the Nacimiento project as it now stands. The project could provide almost all of the water needed to support existing residents San Luis Obispo's General Plan buildout, and reliability studies have shown that the lake could have provided the City with its full allocation in every year from 1950 through the present had the Project existed at that time(this includes the most critical year of the recent 7 drought.) Furthermore, there is a great deal of political will to move forward. The County Board of Supervisors and each of the participating agencies has expressed strong support for the project. A major drawback to the project exists in that of the three principal water sources being pursued by the City of San Luis Obispo,Nacimiento water is by far the most costly. A significant portion of this cost arises from the regional treatment plant that would need to be constructed because most agencies do not have their own treatment plants (San Luis Obispo does have a treatment plant, so construction costs of the new plant would provide no benefit to the City.) The project also has significant environmental impacts resulting from the construction of fifty miles of pipeline. Although these can be mitigated, the cost of mitigation may be SIZO - higher than for other alternatives. .......................................... Reliance on the political " _....._._.__..........._................_..... cooperation of more than twenty aseparate entities to ensure the $6ao _. __....._........._._._...... success of this project is a serious La potential difficulty. If any one of the four major players in the $2M ---- ---- -- - project chooses not to pursue its allocation, the entire project could "'aWr Rem saiinn D= dmifflw� grind to a halt Several North Cost of Recommended Water Options County agencies have encouraged San Luis Obispo to participate in the Nacimiento project instead of the Salinas Dam expansion There is concern, however, that the Nackr lento project might fail or stall after San Luis Obispo has given up its ability to pursue Salinas Dam water because Paso Robles,one of the major agencies in the Nacimiento project, does not need additional sources of water for at least a decade. The Chamber supports the Nacimiento project, largely because of the current political will that suggests that it will likely be successful as details become more defined. We feel that the City of San Luis Obispo should show a strong preference for pursuing the Salinas Dam and Water Reuse programs, however, because the success of the Nacimiento project is far from ensured, and the cost of water under this program would be much higher for City residents. 8 Other Options By pursuing a balanced approach and aggressively seeking to complete the three major projects recommended above,it is likely that the City will reach its goal of securing a water supply source to support the General Plan buildout and protect existing residents in times of drought. If any of these projects fail, there are other options available that may provide a water supply for the City,although many are less attractive than the Water Reuse Program,Salinas Dam Expansion, and Nacimiento Project There are other options which the Chamber feels should be monitored cloy because they represent clear possibilities for greater efficiency in the water supply system. These projects are listed in this section because for the most part they are still in the embryonic stages. Finally,certain other options represent ongoing efforts that are extremely important to the community's water situation, but which provide only limited opportunities for development of additional water supplies. Conservation/Retrofitting Clearly, the most environmentally sensitive method for increasing the amount of water available for use is through conservation of existing water sources. The City of San Luis Obispo has had an aggressive conservation program in place for several years, which has been quite effective in reducing the amount of water used in the city. The hallmark of the City's program in this regard has been the toilet retrofit program This program has sought to replace all high water use toilets in the city with smaller capacity toilets. . The effectiveness of this program is documented by the fact that approximately 40% of toilets in the City have already been retrofitted. Although retrofitting is not complete, the City's water use figures have already accounted for full retrofitting, so additional retrofitting will not provide an additional source of water. San Luis Obispo's current planning use rate of 145 gallons per capita per day is one of the lowest in the State. Actual usage is currently much less than this figure,although usage has begun to rise as the drought has ended. This is a testament to the effectiveness of the City's conservation program, 9 /,. / but also makes significant additional savings unlikely in the near future. From time to time, increases in technology will arise that may result in additional opportunities for expansion of the City's conservation program. The Chamber feels that where feasible, any incentive-based measures that encourage water conservation should be pursued. At the current time, however, the already high level of conservation among city residents, coupled with the difficulty of encouraging additional conservation in non- drought periods,suggests that these methods cannot provide a significant new source of water. State Water The City of San Luis Obispo recently directed its staff to permanently retire the prospect of using the state water system as a supply source for the City of San Luis Obispo. This direction was given based on a voter referendum rejecting state water that took place in 1992. The Chamber does not suggest that San Luis Obispo discard the results of the referendum We feel,however, that any possible water source should be considered by the City, and feel that over time new data may arise concerning the reliability and cost of the state water project It is an important element of government responsibility to remain open to all possible water supply options. Keeping the option of accessing state water open allows the City to evaluate new programs related to this resource as they arise. As an example,state water was recently proposed as a source for the City's reliability reserve, a 2,000 acre foot per year "extra" source of water to be used only in emergency conditions. The flexibility of using state water for such a program is evidenced in that the entire reliability reserve could be reasonably assured simply by installing a turnout in the state water pipeline so that water could be purchased from another community if San Luis Obispo's resources dwindle to a point of critical danger. This concept of"wheeling"water is based on the ability of a participating community to trade or purchase excess water from another community that also participates in the State Water project The Chamber of Commerce continues favor a state water option Particularly, we feel that the use of state water as a source for the City's reliability reserve is an innovative use of this source that was not precluded by the voter referendum. Nevertheless, the extreme political disfavor 10 aV surrounding the project in this area suggests that state water will remain a politically infeasible option in the near future. Distribution Enhancements/Regional Water Management A major possibility for enhancing the water supply delivery system in San Luis Obispo County exists in the concept of regional water management Currently, each water project has an independent delivery system which has resulted in serious inefficiencies. As an example, there currently exists one pipeline that transfers water from the Whale Rock Reservoir to San Luis Obispo, while a second parallel line transfers water in the opposite direction from the State Water line to Morro Bay. Combining the resources of the various water projects in the county and correcting these types of inefficiencies would result in large economies of scale resulting from decreases in transportation costs, more effective water treatment,and an increased ability to "trade" water between communities in difficult times. In recent months, the County of San Luis Obispo has expressed interest in the possibility of developing a regional water management system. The feasibility of such a system will be greatly enhanced by pipelines that will spread across the county as communities become connected to the Nacimiento project. The Chamber supports continued exploration of the idea of regional water management by all of the relevant parties in the region,even though it is too early to predict specific dollar savings to each community at this time. Desalination Desalination is a process by which communities can remove salts and minerals from seawater, resulting in clean potable water for human use and consumption. Traditionally,desalination has been the most expensive water source option for communities, and has been used mainly in areas where other sources of water are technically infeasible or politically impossible to develop. In recent years desalination technology has become more affordable, and in some cases desalination has become an economically viable alternative water source. Desalination has several advantages over conventional water sources, including its extreme reliability as a water source, low 11 1 transportation costs in communities near the ocean, and the fact that reservoirs for storing water do not need to be constructed (the sea is the world's largest reservoir). The desalination process removes impurities from the water,so issues of contamination that surround other sources such as groundwater.wells are not a problem with desalinized water. Environmental concerns that have traditionally surrounded desalination may become less of a concern as new technologies develop to address these issues. Currently,the largest environmental issue is the discharge of brine into the ocean. San Luis Obispo County already has two intake systems for seawater,one at Morro Bay,and the other at PG&E's Diablo Plant. Used in conjunction with a regional water management strategy,desalination could become a more economical water source because these facilities have already been constructed. Depending on how economies of scale can be introduced to a desalination program, the cost per acre foot of water would range from$800 to$2000. At the present,other potential sources of water exist that could satisfy the needs of San Luis Obispo more economically. The Chamber feels that it is extremely important to monitor desalination as an option, however, because continued technological advances and the possibility of regional water management could make this process an affordable option in the relatively near future. Groundwater Use During the last drought period,San Luis Obispo developed several wells to extract groundwater. This was a fairly effective emergency measure,but resulted in serious overdrafting of the small San Luis Obispo groundwater basin. The consequence of this overdrafting was subsidence, or "sinking," of land, resulting in a partial collapse of the groundwater basin and permanently reducing its capacity. Also, two of the City's largest wells have been closed because nitrate contamination from agricultural activities was pulled into the basin as a result of the overdraft These effects have resulted in significant costs to the City because of lawsuits filed by affected property owners. The City's current estimate of groundwater production is 500 acre feet safe annual yield per year. In 1994 and 1995,however,less than 300 acre feet per year were produced because of contamination and liability problems. 12 At this time, additional groundwater pumping does not provide the possibility of securing additional water supplies for the City. Although the Chamber feels that it is wise to keep the option of additional groundwater use open, we do not feel that groundwater will represent a significant new source of water in coming years. Conclusion In 1990, the City of San Luis Obispo made a profound philosophical shift when it endorsed a multi-source water strategy, designed not only to find solutions to the drought but to provide better reliability and planning for the long-term water needs of the City as well. The Chamber wholeheartedly supports this policy,which has begun to show real benefits as the Salinas Dam Expansion,Water Reuse Project and Nacimiento Project have entered into the planning stages. It is important that the City retain the political will that has allowed these projects to go forward. The current City Council has demonstrated a sincere desire to proactively solve San Luis Obispo"s resource issues rather than returning to the decades-old, destructive paradigm of crisis management. The Chamber acknowledges that securing water supply sources is one of the most difficult political issues to face any city. All too often, the political obstacles that surface whenever any community seeks to supply itself with that most valuable commodity,water, seem impossible to surmount. The result of failing to make the difficult political decision to provide water for one's residents and businesses, however, is all too clear in several communities in San Luis Obispo county as costs have soared and businesses have departed. San Luis Obispo's General Plan, recently updated with a great deal of public input,seeks to avoid that situation by directing the development of adequate water supplies for the future. We strongly urge the City to continue pressing forward with the Salinas Dam expansion, Water Reuse program, and Nacimiento project, and to continue monitoring the possibility of other options that may arise. The issue of water supply is,in our opinion, the most important decision this City must make, and the Chamber most strongly supports all City efforts to ensure our successful future with an adequate water supply. 13 Pacific Gas and Electric Company Los Padres Division Dennis Hennessy 4325 S. Higuera.Street Manager 19, 1996 P.O.Box 8592 January San Luis Obispo, CA 93406-8592 805/546-3864 MEETING L AGENDA ` �UNCIL ❑ CDD DEQ R � DATE �Ny- v ITEM # ❑ FIN DIR Mayor Allen K. Settle ACRO 9 FIRE CHIEF �TTORNEY ❑ PW DIR City of San Luis Obispo C_LE�RIG ❑ POLICE CHF J z �sl� 990 Palm Street ❑-MGMT TEAM 0,REC DIR San Luis Obispo, CA 94301 OCPFILE fid UTIL DIR ❑ PERS DIR Dear Mayor Settle: As you will recall, PG&E has been discussing the possibilities of annexation of our property at 4325 South Higuera to the City of San Luis Obispo to enable us to receive city services. However,the recent council action to move forward with the Airport Area Annexation, which our property is included in,presents some new possibilities that we believe would be beneficial to both the City of San Luis Obispo and PG&E. Specifically, we would like to request the City to consider allowing PG&E to obtain fire water service to our property at 4325 South Higuera, for fee, on a pre-annexation basis. PG&E needs to satisfy an agreement with CDF to either upgrade our on-site fire suppression system or obtain fire water service from the City of San Luis Obispo. We would like to satisfy this need to improve our fire water capabilities by the end of the year. Recently we were exploring the possibility of annexation of our property separate from the airport annexation. After discussions with city staff regarding this it became apparent that this approach would not be financially feasible. Annexation as part of the Airport Area would provide this opportunity, however, our timeline for improving our fire water capabilities is sooner than the expected annexation. The City's land use element policy 1.13.1 states that the City shall not provide services to areas outside the city limits, although there are some exceptions. Given the council's recent action to annex this property at some point in the future, we believe the costs we would incur to upgrade our on-site system would be better used to fund upgrades to the city's fire mains, or be held for future annexation upgrades, and should,therefore,justify an exemption to the current policy. We estimate our costs for upgrading our on-site fire water system to be $80,000 to $100,000. In our opinion,we would rather put these funds toward the future annexation costs in exchange for connection to city fire water service. This request is only for fire water service,not domestic water or waste water services. RECEIVED JAN 1 9 IWO CITY COUNCIL SAN "10 np,SPO CA (rD 1,2 v Mayor Allen K. Settle January 19, 1996 Page 2 Your staff has suggested we request this to be considered as a part of your upcoming Water Management Plan Policies study session on January 23, 1996. If you have any 0;,�ns;11, s questions regarding this request,please contact Bob Burke at 546-5236. Si erely, i De Hennes Manager cc: City Council Members John Dunn, City Administrator Ken Hampian, Asst. City Administrator John Moss, Public Utilities Director kz2 7