HomeMy WebLinkAbout11/21/1989, - WHALE ROCK COMMISSION MEETING A G E N D A
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WHALE ROCK COMMISSION MEETING
MONDAY, NOVEMBER 27, 1989
HEARING ROOM CITY HALL - 990 PALM STREET
SAN LUIS OBISPO, CALIFORNIA
12: 00 NOON Commissioners lunch at Angelo's Restaurant
969 Monterey Street
1:30 P.M. Commissioners reconvene at City Hall, Hearing Room
#91 990 Palm Street, San Luis Obispo
ROLL CALL Commissioner Ron Dunin, City of San Luis Obispo,
Commission vice Chair; John Dunn, City of San Luis
Obispo, Commission Secretary; Doug Gerard,
California Polytechnic State University,
Commission Chair; Carlos Madrid, California
Department of Water Resources; Carmen Salvato,
California Mens Colony; and Bill Statler, City of
San Luis Obispo
--------------------------------------------------------------
PUBLIC COMMENT PERIOD
(5 Minutes)
The Whale Rock Commission will receive public comment on items of
interest to the public within the Commission's jurisdiction.
As a general rule, action will not be taken on issues not listed
on the agenda. Staff will generally be asked to follow up on
such items at the discretion of the' Chair. Written material is
also encouraged.
1. Minutes - Approval of draft minutes of the June 13, 1989
meeting.
2. Establishing a Minimum Pool Level for Whale Rock Reservoir
3. Well Facilities operation and Agreement Update for the
Cayucos Area Water Organization
4. Leasing Ponding Area from the Mainini Family
5. Whale Rock Instrumentation Readings
6. . Operation and Maintenance of the Chorro Pump Station
7. Coastal Stream Diversion and Storage Project: Analysis of
Institutional and Financial Issues
November 27, 1989
Item #1
DRAFT MINUTES
WHALE ROCK COMMISSION MEETING
Tuesday, .. June 13 , 1989
Hearing Room, City Hall - 990 Palm Street
San Luis Obispo, California
COMMISSION MEMBERS PRESENT:
Ron Dunin, . City of gan Luis Obispo, Commission Vice Chair
Carlos Madrid, California Dept. of Water Resources
Carmen Salvato, California Mens Colony
William Statler, City of San Luis Obispo
COMMISSION MEMBERS ABSENT:
Doug Gerard, California Polytechnic State University
Commission Chair
John Dunn, City of San Luis Obispo, Commission Secretary
CITY STAFF PRESENT:
Barry Daffern, Water Supply Supervisor
William Hetland, Utilities Director
Allen Short, Water Division Manager
Lisa Woske, Recording Secretary
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ROLL CALL
Vice Chair Dunin called the meeting to order at 1:30 p.m. and invited
comments from the audience in accordance with the Brown Act (items not on
the agenda) . There was no public comment .
ACTION ITEMS
1. Draft Minutes from March 239 1989.
Commr. Statler moved to approve the minutes as submitted.
Commr. Madrid seconded the motion. Motion carried.
2. Election of Officers.
Commr. Salvato nominated the current slate of officers to continue
through the next fiscal year.
Commr. Madrid seconded the motion.. Motion carried.
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Whale Rock Commission Meeting
�'-•ne 13, 1989
ift Minutes
Page Two
3. Whale Rock Staffing Evaluation
Allen Short discussed the staffing duties and evaluation procedure and
noted the neutral positioning of city staff. He discussed contract
management and independent agency staffing alternatives. He further
discussed criteria for staff evaluation and recommended the existing
staff be maintained to service the Commission. ' as changing the method
of operation or adding members did not appear to be a streamlined or
efficient effort.
Commr. Madrid asked about improving organization and administration of
the Commission/staff communication. Mr. Short agreed that staff and
Commission communication could be enhanced, but reiterated that the
operation itself worked well. Bill. Hetland noted that the full—time
staff member at Whale Rock would aid in communication enhancement .
Commr. Salvato agreed with the staff recommendation and asked for more
advance notice of the meeting agenda and receipt of the information
packet for prior review.
Commr. Statler moved .to recommend and file the report and continue
present staffing. Commr. Madrid seconded the motion. The motion
carried.
4. Annual Budget and Financial Statement
Allen Short presented the document and discussed the reorganization of
staff and budget allocations. Of specific note during the budget
discussion were the decrease in power costs, due to the City of San
Luis Obispo using more Salinas water; all line items of less than
$300.00 were to be combined, and discussion of city overhead costs.
Commr. Madrid asked about excess water sales which would generate a
$9000.00 revenue. Commr. Statler responded by explaining the the
$9000.00 represents the City' s contribution for power costs associated
with the sale of water to Cuests College. Mr. Hetland discussed that
historically, Cuesta College had been sold excess water and this was
the method which accounted for the power costs associated with that
usage. Presently, there is not excess water to declare and Cuests
College is a normal City customer/
Commr. Salvato was concerned about the omission of capitol improvement
projects and fund balance activity line items. Staff responded with
discussion and clarification. Commr. Saivato. suggested the coast
stream item be listed separately. The Commission agreed.
Whale Rock Commission Meeting
June 13, 1989
Draft Minutes
Page Three
Commr . Madrid moved to approve the budget with discussed corrections.
Commr. Salvato seconded the motion. The motion carried.
5. Fishing Program Update
Barry Daffern discussed the program and noted that because of a
chlorine spill which killed a large number of fish and the lack of
rainfall, the number of fish available for restocking would be less
than expected. As a result, the cost of each restocked fish would be
40 cents. Approximately 247 people fished last year, which is an
increase over last year.
Commr. Dunin felt the program should be promoted more heavily for
higher usage or the program would be abandoned. Mr. Daffern agreed
with the need for a more aggressive exposure effort.
The Commission agreed to empower staff to aggressively pursue
promoting the programs. !�
Mr. Daffern discussed the Fines Committee and the Committee ' s funding
allocation and contract services line item funds. The contract line
item funds have $8 ,000.00 in the account. The San Luis Obispo Fines
Committee donated $2, 500.00 to the fishing program for stocking or
trapping fish.
Commr. Dunin suggested inviting local schools to come out to achieve a
more tangible return for budget spent.
Commr. Statler moved to receive and file the report.
Commr. Salvato seconded the motion. The motion carried.
6. Groundwater Status Report
Allen Short presented the staff report regarding the additional well.
He discussed the historical review of the project and presented to-
date figures and activity information. He discussed the proposed
agreement with Cayucos Area Water Organizations .
Barry Daffern discussed the expanded well field and felt it should
satisfy the commitment of acre feet per month demand. He noted staff
may need to explore another well option in the future to meet the 100
Whale Rock Commission Meeting
June 13, 1989
ift Minutes
Four
square-foot agreement .
The Commission discussed percolation tests and creek systems with
staff.
Commr. Madrid moved to receive and file the report.
Commr. Salvato .seconded the motion. The motion carried.
7. Coastal Stream Update
Commr. Dunin asked for another commissioner to be the designated
representative to appear at the Joint City Council meeting on June 14,
1989. Commr. Salvato agreed to represent the Commission.
Bill Hetland discussed the project, noting problems that were due to
lack of rain and the difficulty in completing the EIR. He estimated
the project would be delayed for approximately one. year.
There being no further business to come before the Commission, the meeting
adjourned at 2:30 p.m.
Respectfully submitted,
Lisa Woske
Recording Secretary
U —'P
MEETING DATE
Novem e
WHALE ROCK COMMISSION REPORT "�''"U2�:
FROM: William T. Hetland, Utilities Director(N
SUBJECT: _
Establishing.A Minimum Pool Level for Whale Rock Reservoir
BACKGROUND:
Reservoirs have established minimum pool values. A minimum pool represents the lowest storage
level at which a reservoir would be operated. There are a number of factors that influences the
establishment of a minimum pool. These factors include water quality, physical limitations, low
water level impacts on fisheries and environmental concerns.
The City of San Luis had the consulting firm of Leedshill-Herkenhoff Inc. perform a study on the
combined operations of the Salinas and Whale Rock Reservoirs. The basic purpose of the study
was to determine the increase of the safe annual yield if the two reservoirs were operated in a
combined manner. During this analysis the consultant reviewed the initial safe annual yield study
performed by the State Department of Water Resources on the Whale Rock Reservoir. The analysis
was preformed based on different minimum pool values. These values were based on factors listed
above and are identified below.
Minimum Pool Justification
1. 500 Acre feet Dead pool
2. 2000 Acre feet Environmental/water quality
3. 5000 Acre feet Historical/Water Quality
The dead pool represents the lowest physical level that water can be withdrawn from the reservoir
because of the intake structure limitation. 2000 acre feet is the City staffs current best estimate
at which the treatment plant is able to produce a high quality water for the consumers. It is also
the minimum pool level identified in the Commission's 1957 agreement with the California
Department of Fish and Game. Though, the agreement does have the flexibility to go lower than
2000 acre feet, but requires negotiations with the Department of Fish and Game to mediate any
adverse impacts to the fisheries. The 5000 acre feet minimum pool was a historical value based in
part on the initial level that the staff felt could be treated at the treatment plant. Since that time
additional process units have been added to the treatment plant(ie. potassium permanganate) which.
will allow the plant to effectively treat to at least 2000 acre feet based on the City's experience with
treating the Salinas Reservoir water.
The San Luis Obispo City Council accepted the 5000 acre feet as the minimum pool value at the
time the Leedshill-Herkenhoff report was issued. On September 26, 1989 the City staff
recommended that a new minimum pool value of 2000 acre feet be adopted. This would result in
more water being available to the City and delay the time that more stringent water conservation
measures would have to be enacted. The Council felt that the Whale Rock Commission was the
more appropriate agency to make the minimum pool determination.. The Council directed City staff
to bring this issue to the Whale Rock Commission.
The Leedshill-Herkenhoff report and the Department of Fish and Game agreement are available
in the Utilities Department office at 955 Morro Street for review.
Recommendation
Staff recommends the Whale Rock Commission establish 2000 acre feet as the minimum pool value
for the Whale Rock Reservoir.
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MEETING DATE
November 27 1989
WHALE ROCK COMMISSION REPORT ' ''""3�' -
}FROM: Allen Short, Water Division Manager
SUBJECT:
Well Facilities Operation and Agreement Update for the Cayucos
Area Water Organization
BACKGROUND:
During the last five (5) years the Cayucos Area Water
organization (CAWO) has experienced air entrapment problems
within the water systems. This is due to higher pumping demands
which lower the water aquifer to a level which allows air to be
drawn into the pump along with the water. Under our agreement
with the CAWO, the Whale Rock Commission is obligated to furnish
up to a maximum of 100 acre feet of water per month which we have
been unable to do.
Two studies were conducted to address these issues; one in 1987
by Lawrence Fisk and McFarland, Inc. (LFM) and the other by
Timothy S. Cleath, Engineering Geologist. Based upon the
results, a number of options were identified. They were;
1. Development of a new well
2. Expansion of the percolation ponds
C3. Acquisition and use of the Mainini Well.
The Whale Rock Commission authorized staff to pursue the design
and development of an additional well at its June 15, 1988
meeting. On January 21, 1989 staff advertised for bids. Bids
were opened on February 9, 1989 with Serene Construction the low
bidder. Well construction was completed and operational July 3 ,
1989.
Operationally, the well is performing as designed with an average
flow rate of 185 gallons per minute. The air entrapment problem
which had occurred before the construction of the well has not
returned. The new well does not provide any additional water to
CAWO but just provides for better management of the groundwater
basin by spreading out the well field.
The Whale Rock Commission Staff, along with the staff of the CAWO
Administrative Committee, have developed a draft agreement. This
agreement will provide a mechanism for transferring the ownership
and operational responsibility to the lead agency. In addition,
the cost distribution between each participating agency is also
identified. The process has been positive, productive, and
lengthy. At this time, staff is very confident and comfortable
with the present draft. If the Whale Rock Commission does not
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WHALE ROCK COMMISSION REPORT
November 27, 1989
Page Two
have any comments or concerns with this version, staff will be
returning to the Commission at its next meeting for formal
adoption.
RECOMMENDATION
Receive and file report. Provide direction to staff as
necessary.
Attachment: Draft Agreement
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AS:bja
wragenda.wp
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DRAFT No. 5 ( 11/2/89)
AGREEMENT FOR A NEW WELL TO SUPPLY WATER INDIRECTLY
FROM WHALE ROCK RESERVOIR TO CERTAIN DOWNSTREAM USERS
This agreement is made and entered into this day of ,
19899 by and between the Whale Rock Commission (herein sometimes
referred to as "COMMISSION" ) . and the. Paso Robles Beach Water
Association (PRBWA) , the Morro Rock. Mutual Water Company (MRMWC) ,
and the San Luis Obispo County Waterworks District No. 8 (WW #8)
.( herein collectively referred. to as "USERS" )
WITNESSETH:
WHEREAS, by agreement dated March 20, 19580 ( "1958
Agreement" ) , COMMISSION, the owner of the Whale .Rock Dam and
Reservoir, agreed that the USERS, plus' the Cayucos-Morro Bay
Cemetery District, could pump ground water or take direct delivery
of treated Whale Rock Reservoir water or a combination thereof, of
up to 600 acre-feet of water annually and up to 100 acre-feet per
month to USERS who are located downstream of said dam and
reservoir; and
WHEREAS, PRBWA, MRMWC, and WW #8, have each experienced
groundwater extraction problems;. and.
WHEREAS, the COMMISSION has decided that the existing system
.is not capable of delivering up to 100 acre-feet per month and
COMMISSION has concluded that- it is more economical to construct
another well to supplement and increase the efficiency of the
existing system rather than construct a water treatment plant and
provide direct delivery of Whale Rock Reservoir water; and
WHEREAS, the County of San Luis Obispo has permitted the
siting of the new well in County road right of way and the
COMMISSION has developed a new well for said purposes at no cost
to USERS; and
WHEREAS, USERS are willing to accept said new well from
COMMISSION when said well is completed and proved.
NOW THEREFORE, in consideration of the mutual promises herein
it is hereby agreed by and between the parties hereto as follows:
1. COMMISSION agrees to furnish and develop a new well complete
with pumps, motors, valving,. meters, etc. , to fully meet the
needs of USERS, and to deed said well and facilities thereto,
free and clear of all encumbrances, to USERS on satisfactory
completion thereof .
2. COMMISSION agrees that it shall be responsible for and shall
pay the total costs to furnish said well and the total costs
of developing and placing said well in operation in a manner
that water from said well will .meet drinking water standards
as established by the California Department of Health
Services.
3. USERS agree that 30 days following the signing of this
agreement, and provided that the well and appurtenant
equipment and facilities are in an acceptable operating
condition as determined by USERS, USERS will accept and the
COMMISSION -will transfer ownership of the well and all
appurtenances thereto.
4. At the time of the ownership transfer described in Paragraph
3, COMMISSION shall transfer warranties for ail equipment then
in warranty and USERS shall be responsible for all operation
and maintenance of the facility.
5. USERS agree to'share ownership of said new well and well site,
and to share the water purveyors permit for wafer pumped from
said new well , in the same proportions as their respective
water entitlements under that allocation Agreement executed
September 10, 1986, as follows:
OWNERSHIP
USER ENTITLEMENT OF NEW WELL .
PRBWA 229 AF 39.6194
MRMWC 175 AF 30.2768
WW #8 174 AF 30.1038
TOTALS 578 AF 100.0000
6. PRBWA agrees, and MRMWC and WW #8 agree to allow PRBWA, to
operate and maintain said well until such time as a majority
of the ownership of the new well shall designate some
different person or entity to operate and maintain said new
well for the benefit of PRBWA, MRMWC and WW#8, in a
responsible and efficient manner in accordance with standard
well operation practices, so as not to reduce the efficiency
and yield ,of said wel.l .
7. USERS agree to share all operation, maintenance and
replacement costs for said new well as follows:
a. Fixed Costs -- Those costs which occur regardless of
use, such as administration, accounting, auditing,
record keeping, insurance and liability , monitoring,
and required periodic inspection and service which are
functions of time rather than use, will be shared in
the same proportions as ownership as shown in
paragraph 5, above.
b. Variable Costs -- Those costs which are directly
related to use, such as labor, testing, power,
chemicals, maintenance and replacement costs shall be
2 /
prorated on the basis of use, that is, in the same
proportions as the amount of water taken from said new
well by each USER.
S. Based on an assumed useful life of thirty years, or as
otherwise agreed upon by USERS, USERS agree to provide., by
adjustments to their service charges, or from other revenues
or resources, a reserve fund to 'cover replacement costs for
said new well , pump, motor, and other appurtenances required
for the proper operation thereof ,. and further agree to
contribute to said fund on the basis of use as provided under
7.b. , above.
9. The parties hereto agree 'that title to, and ownership of,
said new ,well and well site, with all appurtenances thereto,
shall vest absolutely in USERS, in accordance with the
percentage of ownership proportions established under
paragraph 5, .above.
10. PRBWA shall develop an accounting and record keeping system
satisfactory to MRMWC and WW #8, and shall maintain such
system in a manner to show accurate and complete costs,
pumping and delivery records to date., by month, and annually,
and shall furnish such records to MRMWC and/or to WW #8
within five working days of request therefor, and/or within
ten working days following the end of each month.
11. MRMWC and WW #8 shall , within 15 calendar days following
receipt of said monthly cost records, send payment therefor
to PRBWA.
12. PRBWA shall deposit all such funds in an account established
for this purpose and shall pay all operating, maintenance and
replacement costs of said new well therefrom.
13. After the water from said new well has passed the point of
delivery into another party's water system, neither the party
delivering such water nor its officers, agents .or employees
shall be liable for the control , carriage, handling, use,
disposal , distribution or changes occurring in the quality
of such water supplied to the other party, or for claim of
damages of any nature whatsoever, including but not limited
to property damage, personal injury or death, arising out of
or connected with the control , carriage, handling, use,
disposal, distribution or changes in the quality of such
water beyond said point of delivery.
14. Once accepted by USERS, for operation and maintenance
purposes, COMMISSION is no longer liable or responsible for
the operation and maintenance of the well or well site.
Similarly , once the. ownership of the well and appurtenances
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are accepted by USERS, COMMISSION is no longer liable or
responsible for the well , appurtenances, or well site.
15. This agreement shall become effective immediately upon
execution by all of the parties hereto and shall remain in
effect at all times thereafter.
16. Any notices to be given shall be addressed as follows-:
Whale Rock Commission
City of San Luis Obispo
955 Morro Street
San Luis Obispo, CA 93401
Waterworks District No. 8
County Engineer
Room 207, County Government Center
San Luis Obispo, CA 93408
Morro Rock Mutual Water Company
P. 0. Box 757
Cayucos, CA 93430
Paso Robles Beach Water Association
P. O. Box 315
Cayucos, CA 93430
Provided , that any party may change such address by notice
in writing to the other parties hereto and thereafter notices
shall be addressed and transmitted to the new address(es) .
All required notices are to be in writing , and delivered in
person or sent by registered or certified mail , postage
prepaid.
17. No party hereto shall have the right to assign or transfer
this a-greement, or any part thereof , without prior written
consent of the remaining parties.
18. All provisions of this agreement shall be binding on the
parties and their executors, administrators, assigns and
successors in interest.
19. Any party' s waiver of breach of any one term, covenant, or
other provision of this agreement, is not a waiver of breach
of any other term, nor subsequent breach of the term of
provision waived.
20. This agreement does not amend or supersede any of the rights
or obligations of the parties to the 1958 agreement.
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IN WITNESS WHEREOF. , the parties hereto have executed this
agreement on the day and year first entered above.
SAN LUIS OBISPO COUNTY WATERWORKS
DISTR'ICT- NO. 8
By - - -
Chairman Board of Supervisors
ATTEST:
Clerk of the Board of Supervisors
[SEAL]
APPROVED AS TO FORM AND LEGAL EFFECT:
JAMES B. LINDHOLM, JR.
County Counsel
By:
Deputy County Counsel
Dated:
C' PASO ROBLES BEACH WATER ASSOCIATION
By
President, -Board of Directors
ATTEST:
By _ .
Secretary
MORRO ROCK MUTUAL WATER COMPANY
By
President , Board of Directors
ATTEST:
BY
Secretary
WHALE ROCK COMMISSION
BY -
ATTEST
BY - - -
Secretary
whlrck.agr
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_ MEETING DATE:
November 27, 1989
WHALE ROCK COMMISSION REPORT MNNUMBER
FROM: BARRY DAFFERN, WATER SUPPLY SUPERVISO -�
SUBJECT:
LEASING PONDING AREA FROM THE MAININI FAMILY
BACKGROUND:
The Whale Rock Commission has historically used a 7.89 acre (ponds)
parcel located on the Mainini property to recharge the under ground
water aquifer. The Whale Rock Commission has leased the ponding area
from the Mainini Family for approximately ten years at $160.00 per
month ($1,920.00 per year) . The ponds consists of five (5) large
basins which assist in the recharge of the underlying aquifer that
provides the Cayucos Area Water Organization CAWO with water. The
Well Rock Commission is obligated by agreement to provide CAWO with a
maximum of 100 acre feet per month or 600 acre feet per year. The
ponds have been one of the mechanisms the Commission has used to
recharge the water aquifer.
Historically, the ponds have been used to recharge the underground
aquifer. However, a recent study by Tim Cleath and associates
questions the efficiency and volume of water that is actually
recharged through the ponds. Based upon the. location and years of
service, the recharge potential may not be as beneficial as once
thought. However, staff feels that the area does provide some
benefit and would recommend that the ponds be retained as one `
available tool to recharge the aquifer.
Additionally, staff has and would continue to operate and maintain
the ponding area. To enhance percolation, periodic pond maintenance
is required. This includes the ponds dredging and weed removal at a
cost of approximately $10,000 per year. Each time this event occurs,
the basins are dredged and this cost is incurred once every 4-5
years.
For the past ten (10) years, the commission has had a "handshake
agreement" with the Mainini Family. This arrangement has been
satisfactory until October of 1988. At this time the Mainini Family
requested a substantial increase in the lease payment. Presently
they are requesting an annual payment of 6,000.00 dollars per year
which represents a 312.5 percent increase.
The Whale Rock staff and attorney have been working with the Mainini
Family and their attorney to draft an agreement which would be
mutually acceptable to each of the parties involved. Some of those
concerns include water for the cattle, and maintenance of roads
crossing ponding areas. However, the most serous concern is the rent
issue. Staff has offered to increase the lease payment by a 100
percent or $4, 000.00 per year. This is not acceptable to the Mainini
Family. .
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WHALE ROCK COMMISSION REPORT
November 27, 1989
Page 2
Staff has had the property appraised by Dennis E. Green and Co. and
its value is estimated to be 8,000 dollars for the 7.89 acre parcel.
Based upon the rent, . the Maininis are requesting $6,000. 00 for the
property. It is estimated the Commission would pay for the property
in 1.3 years assuming that the appraisal priceis paid.
ALTERNATIVES:
Three options have been identified and are listed below in the order
of staff's preference.
1. Initiate the eminent domain process.
2. Pay the $6,000 per year as requested by the Mainini.
3. Investigate other options in either supplying water to the
CAWO or recharging the underground aquifer.
IMPLICATIONS
Option 1 - The eminent domain process is a legal process by which the
land is obtained and a fair market price is paid. The process could
take up to a year, unless immediate possession is required. However,
it must be demonstrated and justified that immediate possession is
required. The process_ of eminent domain as outlined by the San Luis
Obispo City Attorney, is listed below:
Prior to initiating eminent domain proceedings the Commission
is required to file a "Resolution of Necessity" with
appropriate findings, including, that public interest and
necessity require the proposed project, in this case holding
ponds, and that the property in question is necessary for the
proposed project. Before filing an actual complaint, an offer
of just compensation must be made to the property owner.
Should the property owner refuse the offer then eminent domain
proceedings would be initiated by complaint; or if immediate
possession is required, additional pleadings would be
required. If such proceedings are necessary, the cost on an
approximately $8,000 parcel could exceed $30, 000.00
However, once the parcel is obtained no additional lease cost would
be incurred. The operation and maintenance cost which have been
incurred historically, would continue.
WHALE ROCK COMMISSION REPORT
November 27, 1989
Page 3
Option 2 - Pay the Mainini Family the requested amount of 6, 000
dollars per year. This represents a substantial increase in the
lease costs to the Commission. However,. this option is the most
inexpensive and requires the least amount of Whale Rock staff time to
development and implement. Periodically, the lease cost incurred by
the Commission would continue to increase and at some point the
Commission would have more than paid for the parcel. If this option
were selected staff would recommend that a formal agreement be
developed incorporating periodic adjustment for inflation so that
rental costs could be predicted from year to year and identified in
the budget.
Option 3 — Investigate alternative sites for recharge or other
options to supply the CAWO with the required volume of water would be
extremely costly. Additionally, a number of issues would need to be
addressed and resolved if this option were to be implemented. Some
of those issues are:
1. Should the Commission continue to recharge the underground
basin or provide a small scale package water treatment plant?
2. Acquisition of land to construct ponding basins or install
the package water treatment plant.
'i
3. The cost and method of financing the project.
4. Depending upon the option selected, How would the capital
costs (design and construction) , operation and maintenance,
and energy costs be identified and allocated?
The estimated cost of this option ranges from 250,000 to 780, 000
dollars.
RECOMMENDATION•
It is recommended staff negotiate the purchase of the property and if
that fails, initiate eminent domain proceedings.
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agenda27 -
MEETING DATE:
November 27, 1989
WHALE ROCK COMMISSION REPORT MEM NUMBER:5
CFROM: BARRY DAFFERN, WATER SUPPLY SUPERVISOR
SUBJECT:
WHALE ROCK INSTRUMENTATION READINGS
BACKGROUND:
Over the years a number of monitoring instruments have been installed
on and within the fare of the Whale Rock dam. The instrumentation
monitors dam movement and water drainage as well as water pressure.
In January, 1989 the Whale Rock Commission staff received approval to
have the consulting firm of Converse Consultants evaluate the
instrumentation data collected by the Whale' Rock Staff.
The instrumentation readings include the following:
1. Horizontal drains which function to relieve high water
pressure within the right abutment of the dam.
2. Inclinometers which function to measure earth movement
within the left abutment of the dam.
3. Open tube piezometers which function to measure water
levels in the right portion of the dam embankment and
foundation below the downstream bench of the dam.
4. Pneumatic piezometers which function to measure water
pressures within the dam embankment and foundation both
upstream of the internal drainage blanket of the dam and
downstream of the internal drainage blanket at the center near
the embankment foundation contact.
The results of the data collected indicate that the horizontal drains
have reduced the high water pressures that occurred during previous
investigations. The piezometers have indicated a decrease in water
elevation. The decrease in the water elevation is attributed to:
1. The installation of the horizontal drains into the right
abutment of the dam and;
2. A decrease in reservoir level over the last two years.
The two slope inclinometers have recorded movement on four
occasions. The most recent measurement on May 4, 1989, indicates a
downhill movement of the upper 15 feet of the casing with an
approximate displacement of .35 inches at the ground surface. These
movements indicate that the slide maybe relatively shallow, and that
movements of the slide are presently not of a magnitude to present a
safety hazard to the dam. This appears to be attributed in part to a
below normal; rainfall over the past three years. However, continued
monitoring of this slide is recommended particularly when the site is
subject to above normal rainfall.
P/8
WHALE ROCK COMMISSION REPORT
November 27, 1989
Page 2
Finally, the pneumatic piezometers are operating as expected. Based
upon the review of Converse Consultants the dam is in very good
condition and the dam meets all dam and safety concerns..
A copy of the report is available for your review at the Whale Rock
Office.
RECOMMENDATION
It is recommended that staff continue current reading schedules and
that the data collected by the Whale Rock personnel be reviewed by a
certified and qualified consulting firm.
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agenda27
8-�9
- - MEETING DATE:
November 27, 1989
WHALE ROCK COMMISSION REPORT "B"""' '
FROM: Allen Short, Water Division Manager
SUBJECT:
Operation and Maintenance of the Chorro Pump Station
BACKGROUND:
The Chorro Pump Station was designed and installed to efficiently
provide water to the California Mens's Colony (CMC) . The primary
consideration was to reduce the energy costs associated with .
delivery and required volume of water. The Whale Rock Commission
on January 31, 1985 approved the project. The system became
operational in May, 1987.
Also addressed in the January 31, 1985 staff report was the
operational and maintenance costs. The report as written and
with all recommendations was approved during that January
meeting. It was staff's recommendation and long believed
understanding that the Men's Colony is the lead agency and is
fully responsible for all of the operation and maintenance costs.
On September 16, 1989 operational problems developed with the
Chorro Pump Station. The Whale Rock staff was requested to
repair the pump station. It was at this time agency
responsibility was questioned. Additionally, the concern arose
that the pump station was not performing as designed.
Based upon staff investigation, the pump station is performing as
designed. The system was designed with the City of San Luis
Obispo's hydro electric plant in operation. When the City of San
Luis Obispo is operating the hydro plant, a back pressure is
created on the Whale Rock line. This back pressure allows the
Chorro pumps to operate on the most efficient portion of the pump
curve. When the hydro electric plant is not in operation, the
back pressure on the line is non-existent thus the pump will
still operate but not in the most efficient portion of the curve.
As a result, the volume of water supplied to CMC under this
condition is reduced.
Under normal operating conditions, the 100 horse power pumps are
designed to supply approximately 2100 gallons per minute (gpm) .
Based upon discussion with operational personnel, with the hydro
plant off line, the flow rate falls to approximately 1600 to 1700
gpm. This is not adequate to meet peak demands which range from
2000-2100 gpm. .
To resolve this problem staff has reviewed the operations of both
CMC. and the water treatment plant. The options are listed below:
1. Revert back to the historical method of operating the
treatment plant by having staff throttle down the influent
valve to create the required back pressure during peak periods.
WHALE ROCK COMMISSION REPORT
November 27, 1989
Page Two
2. The CMC Water Treatment Plant could operate for an extended
period of time taking a lesser volume of water for a longer
period of time.
Based upon the result of the review of the Chorro Pump Station,
the pumps are operating as designed. When the City of San Luis
Obispo's hydroelectric plant is out of operation, one of the two
options listed above must be incorporated into the operational
plan of both agencies. Either option will provide CMC with an
adequate volume of water.
RECOMMENDATION
In order to resolve any misunderstanding regarding the ownership
and operational responsibility of the pump station, direct staff
to develop an agreement to formally transfer the ownership and
operational responsibility of the Chorro Pump Station to CMC.
AS:bja
wragenda.wp
.. ....._.. _. ... .
MEETING GATE:
November 27 1989
WHALE ROCK COMMISSION REPORT "�''""" -
,RgOM: Allen Short, Water Division Manager
_. SUBJECT:
Coastal Streams Diversion and Storage Project: Analysis of
Institutional and Financial Issues
BACKGROUND:
The Coastal Streams Diversion and Storage Project (CSP) is a
proposed water supply project involving eight (8) streams in the
Morro Bay area. The concept of the project is to capture excess
runoff, which would otherwise flow into the Pacific Ocean. This
would be accomplished by constructing low concrete diversion dams
in the stream channels. The water would then be conveyed either
to the Whale Rock Reservoir via the existing 30-inch diameter
Whale Rock Conduit or to the San Luis Obispo or Morro Bay water
treatment plants.
A key element of the CSP is the development of a formal agreement
among the agencies that will participate in the project. The
agreement must .identify the level of participation of each
agency's operational responsibilities, yield allocation and cost
distribution. The type of formal agreement and the cost sharing
are identified under the institutional and financial issues of
the project.
Leedshill-Herkenhoff, Inc. as part of the scope of work under
Part D, per the contract dated November 28, 1989, has identified -
and analyzed the institutional and financial issues. The final
report has been completed and issued to the various staffs for
distribution. The purpose of the report was to provide an in-
depth analysis of the complex institutional and financial issues
related to the implementation and operation of the CSP. The
report identifies issues and can be used to assist the Whale Rock
Commission in negotiating a participation agreement.
The report by Leedshill-Herkenhoff identifies two key issues
which can be separated into two distinct categories; a) Water
Sharing and b) Cost Allocation. Some specific issues in the
Water Sharing category which need to be addressed are:
1. What type of water allocation method should be used; 1)
either the annual entitlement which allows each agency to use
any amount of water up to a pre-determined maximum limit in
each one-year period or 2) the storage volume accounting method
which allocates a portion of the existing storage volume at the
timeof the Operating Agreement becomes effective. Currently
the Whale Rock Project operates under this method.
WHALE ROCK COMMISSION REPORT
November 27, 1989
Page Two
2. Depending upon weather, the annual entitlement or storage
volume accounting method is used in determining if the stream
diversions are accounted or quantified. For the annual
entitlement method they are not, but for the storage volume
method they are.
3. How will direct diversions from the project to the water
treatment plant lie handled?
4. Reservoir spills under the entitlement Allocation. method do
not have to be allocated or quantified. Under the storage
volume accounting method, a reservoir spill presents a unique
problem. The .major issue is the other agency's ability to
purchase or be granted a portion of the reservoir storage.
Under Cost Allocation, the issues which need to be addressed are:
1. How should capital costs which include engineering design,
legal and administrative assistance, construction, and
construction management, be allocated?
2. How should the operation and maintenance costs for the
project which include energy costs for pumping the water .in the
pipeline, labor, and equipment be allocated.
3. The City of Morro Bay has filed an application for the
water rights on all project streams. How should the water
rights be handled?
4. The existing Whale Rock facilities represent a large
investment and are worth millions of dollars and provide a
critical link to the project, should non-commission members
compensate the Commission for the use of the facilities?
S. The City of Morro Bay is attempting to secure a low-
interest loan to fund the project. If successful and this
financing is used, should other parties owe the City of Morro
Bay compensation for the availability of the funding?
Because of the variety of agencies and number of issues involved,
the project will require extensive negotiation of each issue and
preparation of a comprehensive legal agreement for construction,
operation and maintenance of the project that is mutually
acceptable to each of the agencies involved.
As the negotiation process proceeds and each issue is resolved,
it is important that the agreement be reviewed by a legal
authority to insure that it is mutually acceptable to the
numerous parties involved.
0
WHALE ROCK COMMISSION REPORT
November 27, 1989
i
Page Three
RECOMMENDATION
Staff recommends that the Commission receive and review the
report and provide staff with the direction to proceed into the
negotiation phase of the project.
Staff .also recommends that the Commission provide staff with
direction to obtain independent council to periodically review
the agreement as staff requires.
Attachment: Analysis of Institutional and Financial Issues
(Leedshill-Herkenhoff, Inc.)
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wragenda.wp
LEEDSHILL•HERKENHOFF, INC.
303 Second Street,Suite 880 North
Sen Francisco,California 94107
4151243-9880
October 5, 1989
Mr. G.H. Nichols Mr. William T. Hetland
City of Morro Bay City of San Luis Obispo
695 Harbor Street 955 Morro Street
Morro Bay, Ca. 93442 San Luis Obispo, Ca. 93403
Subject: Coastal Streams Diversion and Storage Project
Analysis of Institutional and Financial Issues
Submittal of Final Report
Gentlemen:
Leedshill-Herkenhoff, Inc. hereby transmits the "Analysis of Institutional and
Financial Issues" prepared for the Whale Rock Commission (COMMISSION) and the
City of Morro Bay (CITY) . This concludes our work under Part D, "Institutional
and Financial Issues," of the Scope of Work for our contract dated November 28,
1988.
The purpose of the report is to provide an in-depth analysis of the complex
institutional and financial issues related to implementation and operation of
the Coastal Streams Diversion and Storage Project. The report can be used to
assist the COMMISSION and CITY in negotiating a participation agreement. The
report identifies key institutional and financial issues, provides detailed
background on these issues, and analyzes the impacts to various project
participants for four different water allocation scenarios.
If we can be of any further assistance, please do not hesitate to call . We look
forward to providing assistance to the COMMISSION and CITY on the remaining
studies for the Coastal Streams Diversion and Storage Project.
Respectfully submitted, � � � •
Willia J. Bardin Polly L. Boissevain
Project Manager Project Engineer
8836-16.ltr/298(m)
O '
SAN FRANCISCO SAN DIEGO DENVER ALBUQUERQUE SANTA FE PHOENIX
COASTAL STREAMS DIVERSION AND STORAGE PROJECT
ANALYSIS OF INSTITUTIONAL AND FINANCIAL .ISSUES
PREPARED FOR
WHALE ROCK COMMISSION
AND
CITY OF NORRO BAY
BY
LEEDSHILL-HERKENHOFF, INC.
OCTOBER 1989
i.
L� LEEDSNILL•NERKENNOFF, INC.
COASTAL STREAMS DIVERSION AND STORAGE PROJECT
ANALYSIS OF INSTIMIONAL AND FINANCIAL ISSUES
The following report and all related studies were conducted under the supervision
of a registered Civil Engineer in the State of California.
WILLIAM J BARDIN
Civil Engineer
4
w
(Jp CALk'T
J
MLEE06NILLiHERKENNOFF, INC.
COASTAL STREAMS DIVERSION AND STORAGE PROJECT
ANALYSIS OF INSTIMIONAL AND FINANCIAL ISSUES
TABLE OF CONTENTS
Page
Background and Purpose . . . . . . . . . . . . . . . . . . . . . . . . 1
Project Description. . . . .. . . . . . . . . . . . . . . . . . . . . 1
Institutional Setting. 2
Current. Operating Policy for Whale Rock0Reservoir. . . . . 3
CITY-SLO Coordinated Operations. . . . . . . . . . . . . . . . . . . . . 6
Issues to be Resolved. . . . . . . . . . . . . . . . . . . . . . . . .11
Sharing of Project Water . . . . . . . . . . . . . . . . . . . . . . . . .13
Allocation of Project Costs. . . . . . . . . . . . . . . . . . . . . . . .19
Potential Arrangements . . . . . . . . . . . . . . . . . . . . . . . .21
FIGURES
Figure I . . . . . . . . . . . 8
Figure 2 . . . . . . . . . . . 9
Figure 1 . . . . . . . . . . . . . . . . . . . . . 10
Figure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Figure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Figure6 . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .30
TABLES
Table1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Tablet . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table . . . . . . . . . . . . . . . . . . . . . . . . 15
Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Table6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8836-22.toc/298(m)
WLEEDSNILL-NENKENNOFF. INC..
units. These pumps would deliver the water into the Whale Rock Conduit (or a
separate pipeline for the Willow Creek Diversion) for delivery to Whale Rock
Reservoir. Because the Whale Rock Conduit would be operating "in reverse",
normal use of the pipeline for deliveries to the City of San Luis Obispo (CITY-
SLO) water treatment plant (WTP) would be prevented, requiring use of alternate
supplies such as Salinas and Chorro Reservoirs to meet demands during the
diversion periods. Alternatively, direct delivery from PROJECT diversion
facilities to WTPs without the use of Whale Rock Reservoir .is technically
possible but would likely require additional facilities (e.g. , extra pumps,
pressure-reducing stations, additional valves, etc.).
For purposes of this study, the "full" project involving diversions on all four
northern streams and an additional 36-inch diameter pipeline was used in the
analyses. Other alternative projects would present significantly lower project
costs and water availability but the relative differences among the parties for
the various proposals presented below would be the same_ Therefore, the full
project can be used to illustrate the various methods available for sharing of
Project water and allocation of the corresponding costs.
INSTIMIONAL SETTING
The individual agencies assumed to be involved in the so-called "Phase I" of the
PROJECT include the three COMMISSION agencies, the CITY-MB, and the town of
Cayucos, which is immediately adjacent to Whale Rock Reservoir and the CITY-MB.
Other local communities that are listed as places of use on the CITY-MB's water
rights applications for the four northernmost streams are assumed to Lot be part
of the PROJECT's initial phase.
The water supply operations of the various agencies assumed to be involved in
the PROJECT are described below. The first three entities comprise the
COMMISSION, which owns Whale Rock Reservoir and the associated pipeline and
pumping stations.
(1) City of San Luis Obisoo (CITY-SLO) -- The CITY-SLO relies on two major
surface water reservoirs for the vast majority of its water supplies. The
CITY-SLO currently has an agreement to use the entire supply provided by
Salinas Reservoir, which is owned by the Corps of Engineers and operated
by the County of San Luis Obispo. Based on the Whale Rock Operating Policy
(see next section) the CITY-SLO can store up to 22,383 acre-feet (AF) in
Whale Rock Reservoir and is entitled to an average of 2,057 acre-feet per
year (AF/YR) based an the currently accepted safe annual yield of the
reservoir.
Due to the availability and nature of the Salinas Reservoir supply, the
CITY-SLO only uses its Whale Rock supply to help meet peak demand during
the summer months or to replace Salinas Reservoir supplies during drought
periods. This "coordinated operation" of the two reservoir supplies may
have a significant impact on the operation of the PROJECT and, therefore,
is explained in more detail in a later section.
C
2
WLEEDSMILL•MERKMHOFF. INC.
I
The CITY-SLO operates a water treatment plant (WTP) that treats water from
both Salinas and Whale Rock Reservoirs. This WTP also provides treated
water to CAL POLY. The CITY-SLO is also currently investigating local
groundwater supplies.
(2) State of California Men's Colony (CM61 -- The CMC derives its water supply
from its share of Whale Rock Reservoir plus use of Chorro Reservoir on
Chorro Creek. The CMC can store up to 4,570 acre-feet in Whale Rock
Reservoir and is entitled to an average of 420 AF/YR based on the currently
accepted safe annual yield of the reservoir. The CMC operates its own WTP.
(3) California Polytechnic State University (CAL POLY) -- CAL POLY's only major
source of water is Whale Rock Reservoir. CAL POLY can store up to 13,707
AF and is entitled to an average of 1250 AF/YR based on the currently
accepted safe annual, yield of the reservoir. Much of CAL-POLY's water
supply is used for irrigation and, therefore, is not treated. The domestic
supply for CAL POLY is treated at the CITY-SLO's WTP.
(4) City of Morro Bay (CITY-MB) -- The CITY-MB currently operates its own
independent water supply system. All supplies are developed from several
groundwater wells in the Chorro Creek and Morro Creek basins. These
groundwater basins are extremely shallow and, as such, are susceptible to
drought conditions. Furthermore, the CITY-MB does not have an official
water right for use of the groundwater supply. However, applications for
the right to use up' to 1723.5 AF/YR from these two basins are now pending.
Due to water supply limitations , CITY-MB has restricted new development
since 1978. In 1972, the CITY-MB had to take untreated water from the
Whale Rock Conduit as an emergency measure. The CITY-MB has been
investigating a variety of water supply projects in recent years but is
now focusing on the Coastal Streams Project, the San Bernardo Creek Dam
Project, and/or the State Water Project. The CITY-MB is currently
designing a WTP to treat surface water supplies from one or more of these
projects.
(5) Cayucos -- The community of Cayucos currently is served by two small
private water companies and County Services Area Number 8. The bulk of
Cayucos' supply is derived from a well field located just downstream from
Whale Rock Reservoir. The COMMISSION is obligated to furnish enough water
so that Cayucos can pump up to 660 acre-feet per year from its groundwater
basin.
CURRENT OPERATING POLICY FOR WHALE ROCK RESERVOIR
The CITY-SLO currently operates the Whale Rock Project on behalf of the
COMMISSION agencies. The current operating policy for Whale Rock Reservoir was
approved on May 21, 1987. Prior to this agreement, the annual withdrawals for
each COMMISSION agency were strictly limited. For a given year, each agency
could withdraw no more than its share of the accepted safe annual yield (SAY)
3
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LLEEDSHILL-HERKENNOFF, INC.
of the reservoir, regardless of that agency's use in previous years. In other
words, water could not be "carried over" from one year to the next. The current
policy agreement set forth a new detailed water accounting system that is based
on storage volumes rather than annual withdrawal limits. This new system
monitors the storage volume controlled by each agency rather than the magnitude
of withdrawals in a given year.
At initiation of the new agreement in 1987, the existing storage volume was
divided among the three COMMISSION agencies according to the established contract
percentages:
CITY-SLO.. . . . . . . .. . .55.05 %
CMC. . . .... . . .. . . . . . .11.24
CAL POLY. ... . . . .. .... .11.71 %
Total 100.00 %
Once the storage volume was initially allocated, a "bank account" was created
to keep track of each agency's storage volume. Rather than restrict withdrawals
in accordance with the accepted SAY, each agency can now use its stored water
in virtually any desired manner. In essence, reservoir withdrawals are no longer
limited by or tied to the accepted SAY of the reservoir. An agency can withdraw
any portion of its storage account in a given year. The "balance" in an agency's
bank account is computed after the end of each month by the following formula:
End-of-month STORAGE
equals
Beginning-of-month STORAGE
minus
DELIVERIES
minus
SHARE OF EVAPORATION LOSS
minus
SHARE OF DOWNSTREAM RELEASES
plus
SHARE OF' RESERVOIR INFLOW
Deliveries are equal to the amount withdrawn from the reservoir or in-lieu
deliveries from one agency's alternative source to another agency (e.g., CITY-
SLO delivers Salinas Reservoir water to CAL POLY each winter). Each agency's
share of evaporation loss is based on the ratio of the agency's storage volume
to the total storage volume at the beginning of the month. Each agency's share
of the required downstream releases to Cayucos is based on the contract
percentages and, as such, has no relationship to the amount of water actually
in storage. The inflow to the reservoir for the month (as computed by the
difference in all other measurements) is also allocated by the contract
percentages and is the only source of replenishment to the agencies' "bank
accounts". Other minor adjustments are required due to the CITY-SLO's handling
of water supplies for Cuesta College and CAL POLY domestic use. A sample of the
monthly accounting summaries is shown in Table 1.
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MLEEDSMILL•MERKENNOFF• INC.
11
TABLE 1
WHALE ROCK RESERVOIR BALANCES
In Acre Feet
City of Cal Mens
SLA Poly Colony Total
Allocated Storage2 22.383 13,707 4.570 40,660
October 1. 3,988
Starting Balance 13,421.21 9,158.15 2.808.64 25.388.0
Delivered* -651.33 -45.66 -66.40 -763.39
Cuesta College -11.23 0 +11.23 0
Cal Poly D=esti c +58.73 -58.73 0 0
�1
Evaporation'- '-71.97 -49.11 -15.06 -136.14 �J
Pipeline Releases2 16.19 -9.91 -3.30 -29.40
Indicated Inflcot2 -22.06 -13.51 -4.50 -40.07
Ending Balance 12,707..16. 8,981.23 2,730.61 24,419.0
November. 1. 1988
46 of allocated storage 56.77% 65.62% 59.75% 60.06%
45.6 acre feet delivered from Salinas nas P sezvo]r to Cal Poly
Irrigation. This quantity is added to the amount delivered to Cal
Poly and subtracted fivm the amount delivered to the City of San Luis
Obispo.
lRatio of amounts in storage on first of the month.
2CorTt-rac:. ratios: City 0.5505, Cal Poly 0.3371, Mens Colony 0.1124
resform/hal#2
pr
L� LEEDSMILL-NERKENNOFF. INC.
Other noteworthy items included in the Whale Rock Operating Policy are as
follows:
- When the reservoir spills, each agency's account is reset to the maximum
allocated capacity (total reservoir capacity multiplied by agency's
contract percentage), regardless of the existing account balances.
- Annual withdrawals above an agency's theoretical share of the accepted SAY
can only extend for four consecutive years; after that point, the agency
must decrease its use or purchase water from another agency in order to
replenish its storage account.
- The Operating Policy states that, "Any adjustments, either increases or
reductions, in water entitlements or storage rights that may occur in the
future will be shared among all participating agencies based on the above
(contract) percentages." This philosophy will be important, in considering
arrangements for sharing the water and costs of the PROJECT.
The Operating Policy will be in effect for ten ,years but can be amended
and modified as necessary.*
CITY-SLO COORDINATED OPERATIONS
i As indicated above, the CITY-SLO relies on Salinas and Whale Rock Reservoirs for
its water supply needs. Since the Whale Rock OperatingPolicy was approved in
1987, coordinated operation of the two reservoirs is now possible. By
coordinating the use of thetwo reservoirs, the total amount of water available
during a critical dry period and the associated "safe yield" can be significantly
increased. The coordinated reservoir operations by the CITY-SLO may have a major
impact on the feasibility and/or effectiveness-'of the Coastal Streams Project
since Whale Rock Reservoir is such a vital part of the project plan. Therefore,
all interested parties should-have a sound understanding of the need and value
of coordinated operations to the CITY-SLO.
LH recently completed an analysis of the coordinated operation of the CITY-SLO's
two major reservoirs and documented the methodologies and findings in a report
dated February 1989. Much of the work performed in this previous study, along
with work performed during the feasibility study of the Coastal Streams Project,
was utilized in this study of institutional and financial issues.
LH's previous study of the coordinated reservoir operations indicated that
coordinated operation is extremely effective. Because the two reservoirs have
different physical and hydrologic characteristics, the two reservoirs can be used
to complement each other both in normal years and critical drought periods.
Simulations of reservoir operations by. LH indicated that the two reservoirs
�i
6
0-33
MLEEDSMILL•MERKENMOFF, INC.
operated in a coordinated manner can produce a combined SAY up to 2000 AF/YR
higher than if the reservoirs are operated independently (i .e. , with constant
annual withdrawals from each) . The reasoning for this profound impact of
coordinated operation on the CITY-SLO's total water supply capability is
explained below:
Because the storage capacity of Salinas Reservoir (21,800 AF) is relatively
small compared to the annual inflows produced by its watershed, the
reservoir spills frequently. On the other hand, the storage capacity of
Whale Rock Reservoir (40,680 AF) is large compared to natural inflows so
spills are very rare. The large disparity in reservoir inflows is clearly
shown in Figures 1 and 2. Furthermore, the surface area of Salinas
Reservoir is much greater than Whale Rock. Reservoir so evaporation losses
are greater for a given volume. Over a given period of time. the overall
amount of water available for use from the two reservoirs is maximized by
reducing reservoir spills and evaporation. Therefore, optimal use of these
two reservoirs dictates that withdrawals from Salinas Reservoir be at the
maximum possible rate and withdrawals from Whale Rock Reservoir at the
minimum rate in order to reduce the overall frequency and magnitude of
spills as well as to reduce overall evaporation. By lowering the water
level at Salinas Reservoir, additional water supplies are generated by
capturing more inflow during wet periods and reducing evaporation losses.
The large withdrawals made at Salinas Reservoir allow the CITY-SLO to
"bank" or store additional supplies at Whale Rock Reservoir in most years.
This operational philosophy will provide the CITY-SLO with the maximum
quantity of water supplies for future drought periods.
The operational philosophy described above is shown graphically in Figure 3,
which shows the optimal use of the two reservoirs under the historical hydrologic
conditions prevailing over the 1944 to 1986 period. As shown, withdrawals from
Whale Rock Reservoir in most years are limited to about 600 AF that is needed
to meet the peak summertime demands. Conversely, large withdrawals are made in
drought periods when Salinas Reservoir is nearly empty.
The results of the coordinated operations study for the 1946-51 dry period are
of special concern for purposes of this study of the Coastal Streams Project.
Based on previous optation studies the CITY-SLO would need to withdraw up to
25,000 AF from Whale Rock Reservoir under coordinated operation if identical
conditions were to reoccur. Even with the CITY-SLO's maximum storage allocation
of about 22,000 AF (which would have been available during the historic drought
since the reservoir would have been full in 1943) and the small quantity of
inflow that occurs over this period, the CITY-SLO may not have enough storaoe
capacity at Whale Rock to meet demands if a similar drought were to occur in the
future, particularly if several thousand acre-feet of storage is reserved for
a minimum pool . Therefore. .the -amount of storage available to the CITY-SLO at.
Whale Rock Reservoir is critical to the success of coordinated operation Any
reduction in storage capacity would adversely impact the CITY-SLO's ability to
meet demands (i .e. . would reduce the safe Yield) during a prolonged dry spell
such as occurred in 1946-51 .
7
8-3�
FIGURE 1
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ISSUES TO BE RESOLVED
Because of the variety of agencies involved, the PROJECT's institutional setting .
is quite complex. Each of the involved agencies has different needs, water
supply facilities, future plans, and financial resources. Three of the five
individual agencies (CITY-SLO, CMC, CAL POLY) have some common interests since
they are directly linked through participation in the Whale Rock Project, while
a fourth (Cayucos) has a water contract linked to the Whale Rock Project but has
no financial obligation. On the other hand, the CITY-MB has no financial or
legal connection to the Whale Rock Project but presumably will have the water
rights for the PROJECT diversions and low interest rate financing available for
the PROJECT. Also, the CITMLO has an important, set operating procedure for
Whale Rock Reservoir that may affect operation of the PROJECT. Finally, the
PROJECT would have to be operated in conjunction with the existing Whale Rock
Project, using the same reservoir and conveyance system. The use of these
facilities for the PROJECT and the impact upon the existing operating policy have
to be addressed.
Due to the numerous agencies involved and the variety of water supply facilities,
there are many institutional and financial issues that need to be addressed and
resolved if the PROJECT is to be implemented. Therefore, the implementation
process for the PROJECT will require extensive negotiation of each issue and
preparation of a comprehensive legal agreement for construction, operation, and
maintenance of the. Project that is mutually acceptable to the numerous parties
involved.
The various issues that need to be addressed and resolved have been identified
and are listed on Table 2. As shown, these issues can be separated into two
distinct categories -- (1) Water Sharing and (2) Cost Allocation. The two sets
of issues can be viewed individually but are really interdependent in that a
balance between water sharing and cost allocation should be achieved. Each
individual issue could be negotiated to an equitable solution or on a "give-and-
take" basis in which the overall arrangement is balanced, or somewhere in between
these two approaches. Provisions for dealing with each of these issues will have
to be included in the eventual contract adreement unless they are shown to have
no effect on the PROJECT.
The provisions for water sharing should be arranged first, then the cost issues
can be settled accordingly to result in an equitable arrangement. For example,
if arrangements are worked out to provide a particular agency with the
entitlement to 30 percent of the PROJECT water, then that agency should be
responsible for approximately 30 percent of the costs directly attributable to
the PROJECT. This philosophy is based on the principle that the eventual water
sharing and cost allocation agreement, hereafter called the "Operating
Agreement", should include provisions such that all participating agencies pay
the same unit cost for PROJECT water. However, in computing this unit cost, only
those costs directly attributable to the PROJECT should be considered_ Other
incidental costs should not be considered in developing an equitable cost sharing
formula as part of the Operating Agreement.
11
LEEDS HILL•NERKENNOFF. MC.
CTABLE 2
Coastal Streams Diversion and Storage Project
INSTITUTIONAL AND FINANCIAL ISSUES TO BE RESOLVED
Water Sharing
method (annual entitlement or storage accounting)
definition of "yield"
natural inflow
stream diversions to reservoir
direct diversions to WTP
- evaporation
- downstream releases
reservoir spills
reservoir "trigger" levels
minimum pool
- CITY-SLO storage deficiency
Cost Allocation
- capital (design and construction)
- operation and maintenance
- energy
financing
Whale Rock "buy-in" or user charge
water rights
additional Whale' Rock pumps
issues.wp/8836.22-JMK-1
��3 9
LM LEEDSNILL-NERKENNOFF. INC.. .
It should be noted that there is no clear-cut manner which the PROJECT water
supplies and associated costs should be allocated. Based purely on engineering
logic, one approach is to allocate the additional water supply and costs in
proportion to the supplemental needs of each agency. If that approach is
unacceptable, a somewhat arbitrary allocation will have to be negotiated. Again,
the magnitude of each agency's "share" in the PROJECT is not necessarily critical
-- the important factor is to achieve a balance between water sharing and cost
allocation.
The issues listed in Table 2 are discussed individually in the following
sections.
SHARING OF PROJECT WATER
The individual issues related to PROJECT water sharing are discussed below. The
reason that each issue is pertinent to the PROJECT is identified and possible
or recommended resolutions to the issue are also explained. The current
operating policy for Whale Rock Reservoir and the CITY-SLO's coordinated
operation of its supplies, both of which were discussed above, may have important
impacts on PROJECT water sharing.
Method - The fundamental philosophy or method behind the water sharing policy
within the Operating Agreement will be one of the two basic choices -- (1) annual
entitlement allocation and (2) storage volume accounting.
An agreement based on an annual entitlement allocation allows each agency to use
(withdraw from storage) any amount of water up to a pre-determined maximum limit
in each one-year period. Once the safe annual yield is determined through
operations studies and is formally accepted, rigorous accounting of all reservoir
inflows and outflows is not necessary. The sum of all annual entitlements is
merely set equal to or less than the accepted safe annual yield of the water
supply source(s) and each agency submits an annual request for water. In
essence, the parties are assuming that the theoretical safe yield estimate is
correct or, in other words, the water source will always be- able to meet the full
entitlement demand. However, because safe annual yield values are merely
estimates based on historical data and water supply purveyors are traditionally
highly conservative, water supply shortages will sometimes be declared in order
to reduce water use below the accepted safe yield estimate.
Under an entitlement allocation method, each agency typically withdraws a nearly
constant annual amount. To implement this allocation method would require a
change in the present allocation agreement.
The State Water Project and Central Valley Project, the. State's two major water
supply projects, operate under the annual entitlement allocation method,
including provisions to reduce entitlements in drought years. The Whale Rock
Project had previously operated under an annual entitlement allocation method
until the current operating policy (based on storage volume accounting) was
adopted in 1987.
13
L� 6EEDSN_ILL•NERKENNOFF. INC.
�J Under the storage volume accounting method, each agency is allocated a portion
of the existing storage volume at the time the Operating Agreement becomes
effective. From that point on, a storage "account" is maintained for each agency
and is adjusted monthly by the administrator of the PROJECT. Each agency's
account would be adjusted. monthly for withdrawals, evaporation, downstream
releases, evaporation, spill , natural inflow, and, in this instance, diversions
from the PROJECT streams. As explained above, the current Whale Rock Operating
Policy under which the Whale Rock Project is operated is based on the storage
volume accounting method. This method places essentially no restrictions on
annual reservoir withdrawals as long as the agency has a "positive" account
balance (i .e. , water in storage).
Because the non-COMMISSION agencies (CITY-MB and Cayucos) do not have a storage
allocation at Whale Rock Reservoir at this time, a portion of the storage volume
from COMMISSION agencies may have to be transferred for the storage volume
accounting method to be viable.
Definition of "Yield" - The safe annual yield attributable to the PROJECT will
be used in setting contractual limits and/or in the future water supply planning
of all involved agencies. However, computation of the safe yield of a water
supply source is not always straightforward since it is dependent on the manner
in which the facility is operated. As explained in the final report on the
feasibility study for the PROJECT, the average annual yield attributable to the
PROJECT will vary significantly depending on whether Whale Rock Reservoir is
assumed to be used for constant annual withdrawals or with large fluctuations
in withdrawals caused by the CITY-SLO's coordinated operations with Salinas
Reservoir.
A reliable yield estimate is critical for the safe annual yield method and
important for the storage accounting method. The currently accepted safe annual
yield of Whale Rock Reservoir under the "constant demand" case is 4400 AF/YR,
based on a 500 AF minimum pool and including 660 AF/YR committed (but not
necessarily delivered) to downstream users. However, LH has prepared revised
estimates of the reservoir's yield for "constant demand" operation using more
refined techniques for estimating historical hydrology at the site. Further
complicating this issue is the fact that the reservoir probably could not be
drawn down to 500 AF. Recent investigations by CITY-SLO indicate an acceptable
minimum pool may be 2000 AF, based on a Department of Fish and Game 1957
agreement, or so much as 5000 AF, based on water quality concerns. Table 3
shows the safe annual yield for these various assumptions.
If the reservoir is operated under the "high-low" demand case (reflecting
coordinated operation by CITY-SLO) , the incremental yield attributable to the
PROJECT must be defined through reservoir operations studies. The PROJECT yield
could either be defined by the increase in the average reservoir yield or the
increase in the dry year yield. As illustrated in the feasibility study report,
coordinated operation (termed "high-low demand" in previous report) will result
in a lower average yield but a higher dry year yield relative to the constant
demand case.
�' 14
L� LEEOBNILL-NERKENNOFF. INC.
TABLE 3
SAFE YIELD ESTIMATES
FOR WHALE ROCK RESERVOIR
Minimum Old New
Pool Hydrology Hydrology
500 4000 4960
2000 -- 4850
5000 -- 4650
-- not available
}
15
0 �7�
L� LEEDSNILL-HIMENNOFF. INC.
Therefore, the manner in which Whale Rock Reservoir will be operated in
conjunction with the PROJECT must be determined if a reliable estimate of the
incremental yield is desired. Reservoir operations studies would be required
to simulate actual operation of the reservoir and PROJECT. Other input such as
minimum pool and reservoir "trigger" levels would be needed for such studies.
Natural Inflow - Even if the PROJECT is implemented, natural inflow to Whale
Rock Reservoir will be the primary source of replenishment and, hence, the
primary manner in which each agency's storage account can be increased. If the
entitlement allocation method is used, natural inflow need not be accounted for
or quantified. However, under the storage volume accounting method, the natural
inflow could be shared among all participating agencies or only among existing
COMMISSION agencies. If the CITY-MB and Cayucos are granted or purchase a
portion of reservoir storage, they possibly should share in the natural inflow
to the reservoir.
In either case, the applicable percentages specified in the Operating Agreement.
to allocate the natural inflow could be determined in a number of different ways.
For example, natural inflows could be allocated to COMMISSION agencies only
according to the existing contract percentages or could be split among all
parties in some other reasonable manner. Because there are no constraints,
natural inflows will generally be much higher than PROJECT stream diversions into
the reservoir.
Stream Diversions to Reservoir - Again, if the entitlement allocation method is
��. used, stream diversions need not be accounted for or quantified. However, if
the storage volume accounting method is employed, decisions must be made on how
to allocate the water diverted into the reservoir from PROJECT facilities. The
applicable percentages could again be developed in any desired manner considered
equitable by all parties. PROJECT diversions would supplement natural inflow
for COMMISSION agencies and provide the only source of replenishment for others
unless they also receive a portion of the natural inflow.
Direct Diversions to WTP - The possibility of diverting water directly from
PROJECT stream to WTPs presents another complication. Direct diversions would
not require the use of Whale. Rock Reservoir but would require use of the PROJECT
facilities and Whale. Rock Conduit. Direct diversions could be treated in the
same manner as stream diversions to the reservoir in that they could be
considered to be water delivered in-lieu of reservoir water. Alternatively,
direct diversions could be considered to be completely separate from diversions
to the reservoir and, hence, not subject to the accounting procedures for the
reservoir. Direct diversion could be used by any or all participating agencies
(assuming a new delivery pipeline to Cayucos is constructed.) A priority
schedule would have to be set to determine whether reservoir diversions or direct
diversions have first priority in the event that adequate streamflow is not
available or the system's hydraulic configuration does not allow both types of
diversion simultaneously. Also, direct diversions will only be available on a
limited basis and, therefore, do not provide a reliable water supply.
��, 16
MLEEDSHILL•HERKENHOFF, INC_..
Evaporation - The loss of water due to evaporation from the reservoir surface —
constitutes a significant amount of supply. Again, under the annual entitlement
allocation, evaporation losses do not need to be quantified. However, under
the storage volume accounting method, this unavoidable loss must be allocated.
The only logical approach is to allocate the loss to all parties in proportion
to the amount of stored water for each agency. By adding more water to the
reservoir through PROJECT diversions, the overall evaporation loss will increase
slightly.
Downstream Releases - The existing obligation of the COMMISSION to release up
to 660 AF/YR to downstream users is not affected by the PROJECT. However,
because the town of Cayucos may be involved in both projects, there is an
opportunity to coordinate deliveries. Again, under the annual entitlement
allocation, downstream releases do not need to be quantified. Under the storage
volume accounting method, the water "lost" to downstream releases should be
considered as an unavoidable loss but should not be treated in the same manner
as evaporation since it has no relationship to the quantity of water in storage.
The downstream releases should be allocated as a loss to each agency in the same
manner chosen for natural reservoir inflow. Again, if the CITY-MB and Cayucos
are granted a portion of reservoir storage, they possibly should share in the
downstream releases.
Reservoir Spills - If the entitlement allocation method is used, reservoir spills
do not have to be quantified or allocated. However, under the storage volume
accounting method, reservoir spills present a unique problem. Under the current
Whale Rock Operating Policy, all storage accounts are "reset" in proportion to
the contract percentages if the reservoir spills. Unless the CITY-MB and Cayucos
are granted or purchase a portion of the reservoir storage volume (i .e. , existing
contact percentages are revised) , they would presumably lose their entire storage
account. If the CITY-MB and Cayucos do not acquire a storage right, they will
have no water available from the PROJECT (except for possible direct diversions)
until additional stream diversions are made. Therefore, the reliable or safe
yield of the PROJECT may be zero for these agencies unless storage is acquired
or special provisions are included in the Operating Agreement.
Reservoir "Trigger" Levels - If the PROJECT is implemented, there will be many
occasions when the PROJECT streams will have adequate streamflow but diversion
to Whale Rock Reservoir will not be prudent. This condition will occur whenever
the reservoir is at a relatively high level . If PROJECT water is diverted into
the reservoir over a given period and the reservoir spills before the next
critical drought period, all pumping and other operating costs associated with
the PROJECT diversions will essentially have been "wasted" since the reservoir
would have been full (or nearly full) without the PROJECT diversions. In. other
words, when the reservoir is not in danger of a shortage, any additional water
diverted into the reservoir may well be spilled before it is actually needed.
It is essential to recognize that the reservoir does not have to spill in the
same year as the diversions to make the decision to divert uneconomical -- the
pumping and other costs will be wasted if the reservoir spills at any time in
the future but before the next severe drought. To illustrate this principle,
11
O '7-/
MLEEDSNILL•NERKENNOFF, W-
the following hypothetical example has been prepared assuming that annual
withdrawals and losses equal 5000 AF/YR and the storage capacity of the reservoir
is 41,000 AF.
Beginning
Reservoir Natural PROJECT
Storage Inflow Diversions Spill
Year (AF) (AF) (AF) (AF)
1 259000 59000 500 0
2 25,500 109000 39000 0
3 339500 29500 500 0
4 31,500 1,500 21,000 0
5 369000 18,000 0 89000
As indicated, the PROJECT diversions over this hypothetical, period were 6000 AF.
However, the reservoir spilled 1000 AF of water in the fifth year. Therefore,
the reservoir would have been at the same level (i .e., full capacity) without
the PROJECT diversions. If PROJECT diversions were unrestricted and average
pumping costs were $50/AF, up to $300,000 of energy costs would be incurred with
no benefit. Therefore, an operating rule based on reservoir "trigger" levels
is required to find the best balance between safeguarding the yield of the
reservoir and pumping costs. A statistical analysis, as part of reservoir
operation studies, is required to determine the trigger levels, above which no
diversions should be made due to the high probability of spill . This would occur
once other decisions affecting the project (eg. minimum pool , instream releases)
are made. Again, even though Whale Rock Reservoir spills infrequently, a major
spill could result in the loss of hundreds of thousands of dollars in operating
costs if PROJECT diversions are completely unrestricted.
The selection of reservoir "trigger" levels is identified as an important issue
in this study since they will affect both the PROJECT yield and operating costs.
Furthermore, different agencies may have different opinions on what the trigger
levels should be. Agencies primarily interested in absolutely maximizing yield
with little regard for cost would choose to divert from the PROJECT streams
whenever adequate flow is available. Other agencies looking for the most
economical water supplies but not necessarily concerned with the quantity would
select trigger levels at lower elevations to restrict PROJECT pumping to periods
when the reservoir is in danger of a shortage. The selected trigger levels
should be included in the Operating Agreement.
Minimum Pool - There is a practical and, in some cases, legal limit to the
minimum storage volume or "pool " that is allowed in a particular water supply
reservoir. The minimum pool is usually selected after evaluating impacts of low
water levels on fisheries, wildlife and botanical resources, shoreline real
estate, recreation, water quality, and other considerations. The minimum pool
impacts the yield and the storage allocations of a reservoir and, hence, is
considered to be another relevant issue .to implementation of the PROJECT. The
value currently being used for the minimum pool at Whale Rock Reservoir is 500
AF based on a previous study by the State Department of Water Resources.
18
WL®SHILL-MEMMMOFF, INC.
However, as previously indicated, the acceptable minimum pool may be 2000 AF
based on the 1957 Department of Fish and Game agreement, or high as 5000 AF.
Prior to water quality setting the PROJECT yield and developing an Operating
Agreement, the appropriate minimum pool should be determined and yield studies
conducted accordingly.
CITY-SLO Storage Deficiency - As previously discussed, the CITY-SLO's coordinated
operation of Salinas Reservoir and its share of Whale Rock Reservoir may have
a significant impact on the PROJECT yield and operation. In addition to
recognizing this impact, a special concern has been identified that may become
a pertinent issue in pursuit of PROJECT implementation. As indicated above,
the results of reservoir operations studies conducted by LH have shown that the
CITY-SLO may not have enough storage capacity at Whale Rock Reservoir to carry
through a severe, prolonged drought such as the historical drought of 1946-51.
Possible exchanges of Salinas Reservoir water with other COMMISSION agencies
could partially mitigate this possible deficiency. Alternatively, the CITY-SLO
could negotiate with the CMC and CAL POLY to acquire a portion of their storage
volume, since these agencies only require minimal storage for their operations
at Whale Rock Reservoir.
This issue is of particular concern to the CITY-SLO and should be evaluated
whether PROJECT implementation is pursued or not. However, this issue is
discussed herein because the PROJECT would effectively increase the possible
storage deficiency since the CITY-SLO would be trying to meet a higher demand
level and, hence, would require even large withdrawals from Whale Rock Reservoir
during a severe drought. . Also, as mentioned above, the non-COMMISSION agencies
would need to acquire a share of storage in the reservoir in order to develop -"
a reliable yield. For these reasons, this issue will likely affect overall
negotiations for water sharing.
ALLOCATION OF PROJECT COSTS
The issues identified relevant to allocation of PROJECT costs were also listed
in Table 2. These issues include the basic construction and operation costs but
also include four other special. considerations that will affect negotiation of
the Operating Agreement. Each issue is discussed individually in the following
paragraphs.
Capital Costs - Capital costs include engineering design, legal and administra-
tive assistance, construction, and construction management. Allocation of these
costs to individual agencies would logically be done in proportion to the share
of PROJECT water allocated to each user. However, as discussed. above, defining
the precise share of PROJECT water for each agency may be difficult to determine
due to multitude of issues involved.
The annual capital costs for each agency could be fixed by contract percentages
or the total annual repayment cost could be allocated to agencies each year based
on proportionate use of the PROJECT for that given year. The latter method would
avoid having to accurately forecast each agency's use of the PROJECT but could
19
result in highly variable annual costs. The COMMISSION agencies and the State
Water Project contractors repay capital costs by a set of fixed percentages in
proportion to their water entitlement, not water use.
Operation & Maintenance Costs - The operation and maintenance (0&M) costs for
the PROJECT consist of energy costs for pumping the water into and out of Whale
Rock Reservoir, labor and equipment costs for operating the PROJECT facilities,
and other incidental costs. Because it deserves specially handling, energy costs
are discussed separately in the following section.
Most of the PROJECT 0&M costs '(other than energy) are somewhat unrelated to the
amount of water diverted to and from the reservoir. Costs associated with
routine maintenance, purchase of equipment and supplies, and employee salaries
are relatively fixed in that they will not vary dramatically with the quantity
of water diverted. Therefore, 0&M costs exclusive of energy for pumping should
be allocated in the same manner as capital costs. As described above for capital
costs, there are two primary philosophies for this cost allocation.
Energy Costs - Costs for pumping water into Whale Rock Reservoir from PROJECT
diversion facilities and for conveying water through the conveyance system(s)
will constitute a high percentage of overall operating costs. The logical way
to allocate energy costs is in proportion to actual water quantities diverted
and/or used by each agency. However, if the entitlement allocation method is
used, the PROJECT diversions will not be allocated to each agency. In that case,
the energy costs for PROJECT diversions should. be allocated in proportion to each
agency's entitlement, not actual water use. Under the storage volume accounting
method, the percentages used to allocate the PROJECT diversion water into each
agency's account should also be used to distribute the energy costs. Under
either method, the energy costs for reservoir withdrawals should be allocated
in proportion to actual use in the given year.
Financing - This issue was included since the CITY-MB is attempting to secure
a low-interest loan for up to $5 million from the State for use in financing the
PROJECT. If this financing is used to fund construction of the entire PROJECT,
the other parties may owe the CITY-MB compensation for the availability of the
low-interest funding. Such compensation could be in the form of a direct payment
or, more likely, compromises on other cost items. If the loan is used only to
fund the CITY-MB's share, no compensation would be due. It would appear that
full utilization of the loan would be prudent due to the extremely low cost of
funding (interest rate of 3.3 percent) relative to other alternatives.
Whale. Rock °Buy-in' or User Charge - Because the existing Whale Rock facilities
are worth several millions of dollars and provide critical elements to the
feasibility of the PROJECT, non-COMMISSION agencies may need to compensate the
COMMISSION for use of these facilities. The COMMISSION agencies have nearly
completely repaid the construction cost of the Whale Rock Project and, as such,
have a substantial investment in the facilities. The non-COMMISSION agencies
20
O % /
MLEEDSHILL-HEAKENHOIT, INC.
could provide a one-time "buy-in" charge for permanent use of the existing Whale -
Rock facilities or could pay an annual user charge (e.g. , lease) for their use.
On the other hand, non-COMMISSION agencies could present the argument that the
existing facilities would have to be paid off by the COMMISSION with or without
the PROJECT and the PROJECT will not significantly affect the condition or use
of the facilities. Clearly, this issue must be negotiated in conjunction with
all others.
Water Rights - The CITY-MB has filed applications for the water rights on all
PROJECT streams. LH is currently preparing the Environmental Impact Report for
submittal to the State for approval of the applications. As for the use of the
existing Whale Rock facilities, the value of these water rights could be viewed
from two very different perspectives. From the water right holder's viewpoint,
the value of the water right could be related to the cost of alternative sources
of raw water or the cost at which other PROJECT participants are currently
willing to pay for raw water. However, the COMMISSION agencies could argue that
the water rights have no intrinsic value without the existing Whale Rock
facilities. These agencies also could file for the water rights on the PROJECT
streams and would likely acquire at least. partial rights since the CITY-MB
currently has very limited use of the water without the COMMISSION's Whale Rock
facilities.
Another issue related to water rights involves the use of the existing Whale Rock
Conduit during periods when PROJECT water is being diverted into the. reservoir.
During such periods, the CMC and CAL POLY will require alternative supplies since
the Whale Rock supply has been temporarily cut off. Transfers from the CITY-
SLO's Salinas Reservoir and/or the CITY-MB's groundwater sources would be needed.
Such transfers may require some revision or addendum to existing water rights.
The impact of and procedures for the required transfers should also be worked
into the Operating Agreement.
Additional Whale Rock Pumns - LH is currently designing additional pumps for the
existing Whale Rock conveyance system. Substantially larger pumps are necessary
to meet anticipated future demands on the Whale Rock system, including those
imposed by the PROJECT. This improvement is listed as an issue pertinent to
PROJECT implementation for reasons similar to those outlined above under "Whale
Rock "Buy-in" or User Charge". The considerable cost incurred for expanding or
improving the Whale Rock system will at least be partially attributable to the
needs of the PROJECT. Therefore, repayment of such cost items should be
considered and addressed in the Operating Agreement.
POTENTIAL ARRANGEMENTS
All of the issues presented above must be negotiated and included in the eventual
Operating Agreement for implementation of the PROJECT. There are two primary
types of legal documents that could be prepared to contain the Operating
Agreement. The first of these is a Joint Powers Agreement (JPA) , which is
normally the best choice if there are variables and decisions to deal with on
21
O ^�O
WtEEDSNILL•NERKENNOFF. W. _.
an ongoing basis (e.g., allocating costs, changing operations, etc.) . A Board
of Directors would be selected to administer the PROJECT. The Board must be
different from any of the existing governing bodies (i .e., cannot be a City
Council or COMMISSION) . For example, the Board could consist of two representa-
tives from the COMMISSION, two representatives from the CITY-MB, and one
representative from Cayucos or another third party. If the COMMISSION decided
to sell a portion of the existing Whale Rock facilities to the non-COMMISSION
agencies, a JPA would have to be used.
The other possible legal arrangement for the PROJECT is a basic contractual
agreement in which all parties agree to act in conformance with the guidelines
set forth in the contract. The contract document would include provisions for
operation of all facilities (i .e., water sharing), allocation of project costs,
and arbitration procedures in the event of a dispute.
An assessment district does not appear applicable as these are normally used to
raise money to finance construction and operation. An assessment district does
not provide for administration or decision-making.
Due to the number of issues and related decisions required, there is a nearly
limitless number of potential arrangements. In order to demonstrate the relative
impacts of some of the water .sharing issues, five hypothetical scenarios have
been analyzed. Reservoir operations studies have been conducted to simulate
operation of Whale Rock Reservoir working in conjunction with the "full" PROJECT
as explained above under "Project Description". The 1943-86 hydrologic period
used in previous studies -was again used for this simulation. These five cases
are not intended to be suggestive or representative of any type of "recommended"
or typical agreement -T they are merely intended to facilitate negotiations by
illustrating the imoacts of some of the major issuesrelatedto water sharing.
Because the cost allocation can be shaped to "match" the water sharing
arrangements, the corresponding cost analysis has not been conducted: As
explained previously, the water sharing arrangements should be negotiated first
then an equitable cost allocation procedure could be worked out to achieve the
proper balance (e.g. , same unit cost for all parties) .
The five cases are presented below, along with several tables and figures.
Because the CMC and CAL POLY have similar use of Whale Rock Reservoir and can
exchange water, these two agencies have been considered to be a single entity
for purposes of analysis, and will be referred to as the State agencies.
In the cases used to illustrate the storage volume accounting method (all but
Case 1) , it was assumed that the CITY-SLO would operate its Salinas Reservoir
source in conjunction with its Whale Rock Reservoir supply. As described above,
annual withdrawals from Whale Rock Reservoir fluctuate greatly under this
coordinated operation.' Hence, the CITY-SLO's annual withdrawals from Whale Rock
Reservoir will be less than .its allocated (average) yield during normal and wet
years, and will be substantially more than its allocated average yield during
dry periods. In contrast, withdrawals for the State agencies are assumed to be
22
MLU MILL-MERKENNOFF, INC.
at a constant annual rate in all cases. For reasons explained below, deliveries -
to the CITY-MB and Cayucos have been analyzed in both manners depending on the
other underlying assumptions.
CASE 1 - CONSTANT ANNUAL WITHDRAWALS
Case 1 illustrates the entitlement allocation method described above. All
parties are assumed to withdraw their full annual entitlement each year during
the simulation. Therefore, the CITY-SLO's coordinated operation is essentially
precluded. By conducting operations studies both with and without the PROJECT,
the incremental reservoir yield (i.e., PROJECT yield) under this type of
arrandement was calculated to be 1530 AF/YR. In the illustration, the COMMISSION
agencies were arbitrarily allocated 40 percent of the yield with the CITY-MB and
Cayucos receiving 40 and 20 percent, respectively. The entitlement allocation
for the COMMISSION was divided between the CITY-SLO and State agencies using the
current contract percentages (55.05 and 44.95 percent, respectively), resulting
in allocation of 22 and 18 percent respectively. The results of the water
allocation are given in Table 4. Figure 4 illustrates the constant annual
withdrawal (including the existing Whale Rock supply) for each agency (CITY
indicates CITY-SLO) .
As shown in Table 4 and explained above, it is not necessary to allocate natural
inflows, PROJECT diversions, evaporation, or spill under this method. Storage
below the minimum pool and releases to downstream users are set aside when the
safe annual yield is determined. If, in actual implementation of this method,
a user withdraws less than that user's allocation, the water remains in the
reservoir and would slightly increase drought reserve.
Case 1 is the only illustration of the entitlement allocation method. Due to
its complexity, the storage volume accounting is illustrated using the final four
cases.
CASES 2A and 2B - CITY-MB/CAYUCOS USE EXCESS STORAGE ONLY
In these two related scenarios, the CITY-MB and Cayucos (i .e. , non-COMMISSION
agencies) would not be granted any permanent storage right in Whale Rock
Reservoir. These agencies would only be allowed to divert and store PROJECT
water in Whale Rock Reservoir if space is available. Their share of PROJECT
diversions would be their only source of replenishment and could be temporarily
stored in excess storage, but would be considered the first water to spill when
the reservoir overflows. Therefore, if the CITY-MB and Cayucos withdraw all
stored PROJECT water in drought OR if the reservoir spills, there would be no
available water supply for these agencies from Whale Rock Reservoir. However,
in both cases, direct diversions to the CITY-MB were also allowed to partially
mitigate this problem. Direct diversions were given first priority over
reservoir diversions if only limited streamflow was available. Nevertheless,
there would still be occasional years when no water at all is available from the
PROJECT for the non-COMMISSION agencies under this arrangement.
i
23
asp
MLEEDSSMILL•MEAKENNOFF. OIC.
TABLE 4
COASTAL STREAlS PROJECT
ALTERNATIVES FOR SHARING OF PROJECT WATER.
CASE 1
CONSTANT ANNUAL WITHDRAWALS
SLO STATE MS/CAY
uSEABLE STORAGE t'1.i n/a n/a n/a
(AF) n/a n/a n/a
(NATURAL INFLOW n/a n/a n/a
DIVERSIOf`JS TO RESERVOIR n/a n/a n/a
AVG. DIRECT DIVERSION (AF/YR) no no no
C
EiAP;;?ATICAi n/a n/a n/a
O;S RELEASES n/a n/a n/a
AVERAGE WITHDRAWAL (AF/YR) 2.531 2.059 920
INCREMENTAL INCREASE 340 270 920
TOTAL AVG WITHDRAWALS 5.510
INCREMENTAL INCREASE 1 .530
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FIGURE 4
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LhLEEDSXILL-HERKENNOFF. INC.
Due to the CITY-SLO's storage deficiency discussed above, the total available
storage (excluding minimum pool) was not allocated in accordance with the
existing contract percentages. Through a trial-and-error process, it was
determined that the CITY-SLO would require about 73 percent, or about 26,000 AF,
of the available storage volume in order to real iie the additional yield without
a "negative" storage account.
Cases 2A and 2B are based on the same primary assumptions with one notable
exception. Because a constant, firm supply would not be available under this
arrangement, the CITY-MB and Cayucos would have to decide whether to (1) maximize
their use of PROJECT water by taking as much as demand permits when water is
available in the stream or stored in the reservoir or (2) strictly limit
withdrawals in order to "stretch" the supply over a longer duration. For
purposes of analysis, the combined demand for the CITY-MB and Cayucos was assumed
to be 2000 AF/YR in Case 2A and 500 AF/YR in Case 2B.
The results of the reservoir operations simulations are shown in Table 5 for both
cases. As indicated, the averse PROJECT yield would be reduced to 935 to 1090
AF/YR without direct diversions or 1192 to 1275 AF/YR with direct diversions.
This reduction is due to the CITY-SLO's coordinated operations. The resulting
deliveries to each agency for Case 2A are shown on Figure 5. As shown, the
deliveries to the CITY-MB and Cayucos fluctuate from year to year, including some
years with no deliveries. Both agencies would receive water in most years but
the extent of deliveries would vary from year to year. The State agencies would
receive a constant supply from their share of reservoir storage while the CITY-
1 SLO's deliveries would fluctuate greatly under coordinated operations.
The results for Case 2B are similar to those for Case 2A. The deliveries to the
CITY-MB and Cayucos would be more constant but would still fluctuate and would
include some years with no deliveries.
CASE 3 - CITY-MB/CAYUCOS AS FULL PARTNERS
In Case 3, Morro Bay and Cayucos were considered to be "full partners" in the
Whale Rock Project. The assumptions and results ofthe reservoir operations
simulation are shown in Table 6. As full partners, adequate storage volume in
the reservoir was granted to the non-COMMISSION agencies in order to develop a
firm supply. The indicated storage volumes do not include the assumed 5000 AF
minimum pool . Furthermore, the natural inflow and downstream releases were also
shared with the non-COMMISSION agencies according to the indicated percentages.
The allocation of PROJECT diversions was altered from the previous 60-40 split
to be consistent with the other elements. The percentages used for storage and
the various inflows/outflows were derived through trial-and-error with an
objective of maintaining incremental increases in yield as shown.
Because direct diversions were not used in this case, the annual deliveries to
each agency except the CITY-SLO are constant. Therefore, the non-COMMISSION
agencies would have a firm water supply. The total incremental increase in
reservoir yield (i .e. , PROJECT yield) would be about 950 AF/YR.
26
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I
MLOMMILL•MERKENMOFF, IMC.
TABLE 5
COASTAL STREAMS PROJECT
ALTERNATIVES FOR SHARING OF PRDJECT WATER
CASE 2A CASE 2B
MS/CAY USE EXCESS STORAGE ONLY
2000 AF/YR for ME/CAY ; 500 AF/YR for MH/CAY
SLD STATE M8/CAY SLO STATE MB/CAY
USEABLE STORAGE (%) 739. 270/. 00/ ; 73Y. 27% 0%
(AF) 26.100 9.580 0 ; 26.100 9.580 0
NATURAL INFLOW 55/. 45/. 0% 55/. 45. 0%
DIVERSIONS TO RESERVOIR 22'/. 18Y. 60% ; 22'/. 18Y. 60%
AVG. DIRECT DIVERSION (AF/YR) no no 340 ; no no 102
E. =P 47ION by storage volume by storaq_e volume
;
D/S RELEASES 55/. 45/. 0% 55/. 45/. 0'!
AVERAGE WITHDRAWAL (AF/YR) 1.790 2.000 485 1.870 2.060 500
INCREhENTAL INCREASE 244 '.206 485 ; 324 266 500
TOTAL AVG WITHDRAWALS 4.275 4.430
INCREI"ENTAL INCREASE 935 1090
w/ direct div. 1275 w/ direct div. 1192
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FIGURE 5
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IFEDSNILL•NERKENNOFF. INC.
TABLE 6
COASTAL STREAMS PROJECT
ALTERNATIVES FOR SHARING OF PROJECT WATER
CASE 3 CASE 4
MB/CAY AS FLLL PARTNER MB/CAY AS LIM. PARTNE
540 AF/YR for MB/CAY
SL_ 0 STATE MB/CAY ; ; SLO STATE MB/CAY
USEASLE STORAGE (7) 75/. 20% 4*/ ; ; SY/ 430. 4%
(AF) 26,796 7,293 1,591 I . 18,846 15.242 1 .591
NA URAL INFLOW 420. 481% 10% 55/. 4S/. u%
DIVERSIONS TO RESERVOIR 42/. 480. 10% ; ; 22/. 18Y. 60%
AVG. DIRECT DIVERSION (AF/YR) no no no no no 105
EVAPORATION by storage volume by storaoe volume
D/=- RELEASES 42% 48% 10% 55/. 45% 0%
AVERAGE WITHDRAWAL (AF/YR) 1.800 2.050 440 1 ,550 2.200 432
INCREMEiVTAL INCREASE 254 256 440 4 406 432
TOTAL AVG WITHDRAWALS 4,290 4,1S2
INO;EhENTAL INCREASE 950 842
FIGURE 6
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CASE 4 - CITY-MB/CAYUCOS AS LIMITED PARTNERS
Case 4 reflects the inclusion of the CITY-MB and Cayucos (i .e. , non-COMMISSION
agencies) as a "limited" partner in the Whale Rock Project. As such, the non-
COMMISSION agencies would receive a permanent storage right but would. not share
in the natural inflow or downstream releases. The assumptions and results for
this case are also shown in Table 6. As indicated, .this case also reflects the
CITY-SLO storage right to be only 53 percent of the total capacity (55 percent
less half of 4 percent granted to non-COMMLSSION agencies) . Direct diversions
to the CITY-MB were allowed in thi's case.
The results for this case demonstrate that .the non-COMMISSION agencies could
maintain a substantial firm yield from Whale Rock Reservoir without being a full
partner. However, the results also demonstrate that the CITY-SLO cannot generate
any significant yield from the PROJECT without worsening the storage deficiency
discussed above. Annual withdrawals for each agency over the 43-year study
period are shown in Figure 6.
8836-22.ISS/298(m)
O
30