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HomeMy WebLinkAbout05/10/1988, 3B - WATER ALLOCATION REGULATIONS �I�U city o f San Luis OBI SPO - MEE„ G -T)t aft WMACOUNCIL AGENDA REPORT ITEM NUMBER: FROM: Michael Multari, Community Development Director; BY: Glen Matteson, Assoc. Planner SUBJECT: Water Allocation Regulations . CAO RECOMMENDATION: Review the EIR, draft regulations, and public, staff, and Planning Commission comments. Give direction to staff concerning adequacy of the EIR and desired approach for the regulations. DISCUSSION City water use exceeds safe yield of supplies. Over the next several years, expected additional water supplies may not be enough to meet the needs of expected development. Last February the City Council, by adopting the Water Management Element of the general plan, set maximum acceptable levels of risk in exceeding the safe yield of water supplies and called for regulations to help balance water use and supply. The Planning Commission and staff had recommended draft regulations last spring. The council considered the regulations in July and August 1987. As directed by the council, an environmental impact report (EIR) has been prepared and circulated for public review. This council meeting will mark the end of the EIR's public comment period. The council must consider responses to the significant issues which have been raised and certify that the EIR is adequate before adopting the regulations. Under adopted policies and the proposed regulations, the current water situation would lead to a moratorium. However, if new groundwater sources become available during the year, the moratorium would probably last only a few nmonths. Since the disruption caused by a probably short moratorium does not appear justified by the resulting small improvement in supply/demand balance, staff has decided to recommend an alternate strategy: allow a one percent increase in water use, with no further increases until supplemental water is made available. This alternative will require redrafting the regulations and amending the Water and Wastewater Management Element. Also, in reponse to previous direction, staff is suggesting a special allocation for 'pipeline' projects such as the Edna-Islay Specific Plan area. If these provisions are adopted, water use could increase from about 106 to about 108 percent of safe yield. This meeting is an opportunity for the council to make its own and consider others' comments on the EIR. Also, staff wanted to inform the council of the additional alternative, which the Planning Commission is to discuss April 27. No action is needed at this meeting. SIGNIFICANT IMPACTS The EIR concludes that the regulations will have no significant impacts, and that the effects on the community of the expected slowdown in development are due to the water situation, not the proposed regulations. The EIR says potentially undesirable effects can be mitigated by conserving and obtaining more water. CONSEQUENCES OF NOT TAKING ACTION If some form of development-limiting regulations are not adopted and supplemental water sources are not made available, water use will probably increase from 106 percent of safe yield to 113 percent of safe yield (the upper limit of acceptable risk) within three or four years. In periods of below-average rainfall, the community would face increasingly disruptive water-saving measures to avoid running out of water. ��u�u�►�Illlri��hil�����1 city of san wi s osi spo COUNCIL AGENDA REPORT Water Regulations Page 2 Situation Safe annual yield is the amount of water the city can draw from its reservoirs year after year and still have sufficient water during a drought like the worst one experienced since rainfall records have been kept. City, water use exceeded safe yield in 1984. Water use peaked at 13 percent above safe yield in early 1987, and is now about six percent above safe yield. The closer balance is due to increased yield from "cooperative use" of the two reservoirs and, apparently, reduced consumption resulting from conservation programs. No substantial new sources have been developed. The city has not completed environmental review nor begun engineering design for any supplemental source, though several sources with time frames of one to seven years are under consideration. The supplemental source most likely to be available within one year is groundwater. The city has completed the first phase of a groundwater study, which concluded that as much as 1,500 acre-feet may be available. Next steps include confirming water rights, drilling and operating test wells at selected sites, completing environmental review, and approving construction plans for connecting production wells to the city water system. Staff estimates that in the last four years, the annual increase in demand for water due to additional development has averaged about three percent per year; it will be just under two percent this year. We expect annual increases of two to three percent during the next several years if the city sets no limits. Last year the City Council adopted the Water Management Element of the general plan. This element outlines the city's efforts to obtain additional water supplies and to use water more efficiently. It also sets acceptable levels of risk in exceeding the safe yield of water supplies. The element calls for specific regulations to eventually bring water use and supply back into balance, by controlling increases in water demand from new development. The regulations were to have been in effect July 1987. The Planning Commission and staff have previously recommended draft regulations. As directed by the council a focused EIR has been prepared and circulated for public review. Planning, public works, and administration staff have reviewed the water situation, supplemental sources likely to become available during 1988-89, and the likely consequences of carrying out existing policy and the proposed regulations: a moratorium which would probably last less than one year. We have decided to recommend a change in strategy, while keeping within the goal of working toward a closer balance between safe yield and use, since the disruption caused by a probably short moratorium does not appear justified by the resulting small improvement in supply/demand balance. Environmental Impact Report The draft EIR looks primarily at how the proposed regulations would influence the amount and distribution of development in the county as a whole. The draft EIR, distributed previously, concludes that the proposed regulations will have no significant impacts. It says the impacts which would occur follow from the water situation, not from the mechanisms for allocating available water. It points to more aggressive conservation programs and obtaining additional water sources as mitigation measures. �„��►�Il�l��lp ►SIN city of San LUIS OBISp0 COUNCIL AGENDA DEPORT Water Allocation Regulations Page 3 Staff and the environmental consultants will prepare for the next council consideration_ of this item a list of comments received and responses. Staff expects to correct several technical items in the draft EIR.and to further emphasize the factors which could make the identified results less assured (such as additional employment potential in existing facilities vs..limited residential expansion, which would lead to a larger imbalance between jobs and housing than anticipated in the report). Draft Resulations In summary, the previously recommended regulations would work this way:. Each May, the council would consider a report from staff on the water situation. Depending on the relationships between water use and.supplies, there would be no limit for water purposes, or the limit for increased water use in the following year (July through June) would a be a certain number of acre feet ranging between zero and two percent of then-current water use, as provided in the. Water and Wastewater Management Element (Figure 7). It appears that very little or no water would be available to:.new development in 1988-89 under the proposed regulations and the general plan policies, since nearly all the additional supply obtained since 1986 ("cooperative use" of the existing reservoirs) which was not used to bring use and safe yield closer together will have been taken by projects receiving building permits from July 1987 through June .1988. Before getting a building permit for a new building, major addition, or change in building use to one requiring more water, a water allocation would have to be assigned. Projects would be eligible for water allocations after all discretionary (planning) approvals had been granted and a complete building-permit application was received. The city would issue building permits for projects first=come, first-served; so long as their cumulative expected water use would not exceed the allowed increase. Several types of minor projects (such as house additions), projects supplying all their own water, and projects making reductions in water use elsewhere in-the city to offset their expected water use, would be exempt from the limits. Of thetotal allowed annual increase, 66 percent would bei reserved for residential projects. Of the water available for residential uses, 15 percent would be reserved for projects with dwellings affordable to low-income or moderate-income people, as defined by the city's Affordable Housing Incentives. The city would assign water. allocations (the amount of water.a project is expected to use, in acre-feet per year) and issue building permits in the order complete building-permit applications are received, until 85 percent of the residential water reserve had been allocated. If assigned water allocations reached 85 percent of the residential reserve before the end of the year, the remaining 15 percent of the residential reserve would be held for any affordable housing projects that might be ready before the end of the year. If at the end of the year affordable housing projects had not used all their reserve, the remaining part would be available for any other residential projects that were waiting. city of San LUIS OBISpo =WMermis COUNCIL AGENDA REPORT Water Allocation Regulations Page 4 While the Water Allocation Regulations are in effect, the Residential Growth Management Regulations would be suspended. Of the total allowed annual increase, thirty-four percent would be reserved for nonresidential projects. For nonresidential projects, water allocations would be assigned in the order complete building-permit applications are received. Additional Alternative The draft EIR identifies the alternatives of allowing a higher risk (letting use reach 115 percent of safe yield) or taking no action. Since water use has been brought below 110 percent of safe yield and there is a good chance, but not a certainty, that some additional supply will be obtained in 1988-89, staff is suggesting an additional alternative, which would simplify the adopted evaluation procedure (Figure 7 of the Water and Wastewater Management Element) and provide additional flexibility, particularly for the coming year. Following are the basic features of this alternative approach: A. Beginning on the effective date of the regulations, probably Mid-July, the allowed increase in water use due to new development would be 87 acre-feet per year (AFY) —one percent of existing use. Of this amount, 49 AFY would be available for residential projects in the order of building-permit applications. Nine AFY would be reserved for housing projects containing at least 25% of units affordable to low- or moderate-income residents. Twenty-nine AFY would be available for nonresidential uses. B. Once these increments of water use are allocated to developments, if no additional supplies are obtained, no new development which would increase water use would be allowed, with the exception explained in item C below. At any time after the effective date, if then-current use exceeded then-current safe yield, any additional supply obtained would be split, with one-half going to bring use and safe yield closer and one-half becoming available for allocation to new development. Of the added yield available to new development, 66 percent would be reserved for residential projects (15 percent of that for affordable projects) and 34 percent would be reserved for nonresidential projects. C. In addition to any added supply available to new development as described in item B, there would be available 120 AFY for allocation to projects in the Edna-Islay Specific Plan area and tenant improvements and use changes in completed buildings. The 120 AFY would be a special, one-time allowance. Once it is used, these types of projects would be subject to whatever limits are in effect for the rest of the city. D. If safe yield exceeded use, the whole amount of the difference would be available for allocation to development. E. A source would be counted toward total supply only when all of these have occurred: (1) Environmental review has been completed; (2) The City Council has approved plans and specifications; (3) The utilities manager determines that the source could actually deliver the yield to be counted within one year. ����n� I�IIIII�I�p��u�q�Ulll city of san Luis osispo iWMNZN COUNCIL AGENDA REPORT Water Allocation Regulations Page 5 - F. As with the previously proposed regulations, the determination of city water use could employ an updated baseline estimate to avoid extreme short-term changes in measured water use due to weather or economic conditions. These are the reasons for this approach: As noted above, most types of new development would have to stop this July, under existing policies. The existing policies say new sources can be counted toward total supply only if they are actually providing water when the evaluation is conducted (May of each year). This limitation was to avoid the temptation to count sources that were "almost" available, but not certain. The proposed alternative approach would allow immediate accounting for supply changes. Also, the revised criteria for considering a source available would avoid a short moratorium in the event that the city had approved a definite project, and delivery of water had not begun, but delivery could occur within a year. (These criteria would allow, for example, the reliable yield from an approved well to be counted toward supply once the specific well was approved, but would not count the potential for ground water in general or the safe yield from a new reservoir that would take several years to fill.) These changes represent a relaxing of the criterion in the footnote to Figure 7 and a tightening of the criteria in the middle column of Figure 7. The approach of splitting supply additions between new development and reduction of the disparity between use and supply simply carries out the existing policy to be applied when use is between 100 and 110 percent of safe yield. The one-percent increase for the coming year would allow those projects that are close to receiving building permits to proceed, without substantially enlarging the disparity between use and safe yield. The special allocation for Edna-Islay is staff's response to previous Planning Commission and City Council direction to provide for "pipeline" projects --parts of phased developments which have made substantial commitments to public facilities in anticipation of private construction. The separate allocation seems to be the only way to provide for "pipeline" projects without depriving other projects of a chance to obtain limited allocations. The allowance for tenant improvements and use changes in existing buildings, expected to require a small part of the total allowed increase, appears to be a fair way to provide for them. The following page shows, in terms of water use, the worst-case consequences of the alternative approach. 3 — ���Nn► ��IIIII���i� ���u111 city of San LUIS OBISpo MaZe COUNCIL AGENDA REPORT Water Allocation Regulations Page 6 General residential allocation: 49 AFY (Equivalent to 132 houses on standard lots) Low/moderate affordable resid_ 9 AFY (Equivalent to 41 apartments) General. nonresidential: 29 AFY (Equivalent to 181 motel rooms or 350,000 sq. ft. of nonmedical office o 181,000 sq. ft. of service-commercial building) Edna-Islay and tenant improve- ments in existing buildings: 120 AFY (Equivalent to 324 houses on standard lots; about 450 dwellings remain to be built in Edna-Islay.) TOTAL 207 AFY 8.658 AFY (1987-88 xwl t 2D77 AFY (maximumla lowed use without additional u lies 8,180 AFY (1988 safe annual yield) 108.4 % PREVIOUS REVIEW Staff discussed this alternative approach with the Planning Commission on April 27, and will report the commissions' comments orally. When the council last considered the draft regulations, several details remained to be resolved. Staff outlined options and noted the following apparent preferences of the council. 1. Government projects: Most are not required to get city building permits and some can condemn city utility service. The Planning Commission had wanted to require allocations for government projects. Staff and the council favored accounting for the expected water use of such projects, but not trying to restrict them through the regulations. 2. Size limit: Staff, the comission, and council agreed that there should be a limit to the portion of remaining water that could be allocated to one project. Staff suggested 25 percent of the year's allowed increase for the project's land-use category, unless the council approved an exception. Making a fair and useful definition of "a project" is difficult, but staff believes "the smallest, single discretionary approval by the city (subdivision, use permit, or architectural approval)" meets the council's intent. (This aspect would need to be refined further under staff's newly proposed continous rather than annual accounting for use and supply.) 3. "Pipeline" projects: The commission and council favored special provision for projects that are part of large, phased developments which have made subtantial financial commitments to public facilities. ����+�►IIIIII���i� i►���I city of San Luis osIspo =009a COUNCIL AGENDA REPORT Water Allocation Regulations Page 7 4. Evaluation of projects: Staff and the Planning Commission favored the administrative simplicity of a largely first-come, first-serve allocations within categories reserved for housing in general, affordable housing, and nonresidential projects. Some councilmembers favored giving less weight to when a project is proposed and more weight to its characteristics, along the lines of the current Residential Growth Management Regulations. (Staff continues to prefer the economy and simplicity of first-come, first-served within categories that reflect city objectives; we suggest creating additional reserve categories within the maximum allowed citywide increase to accommodate certain types of development the council sees.as being more desirable, rather than batching and scoring projects.) Several councilmembers supported some consideration for housing projects that provided modest dwellings even though they were not affordable to low- or moderate-income people under the city's Affordable Housing Incentives criteria. Also, a previously considered option was a reserve within the nonresidential allocation for downtown projects. OTHER DEPARTMENT COMMENTS The basic features of the Water and Wastewater Management element, previously drafted regulations, and proposed changes resulted from cooperative efforts of planning, public works, and administrative staff. The city attorney will again review draft regulations and amendments before council action. ALTERNATIVES This meeting is mainly to update the council on the water situation, familiarize new councilmembers with the background for this item, and discuss the option staff is suggesting. The council need not act on any of the proposals, but should give direction so staff can return soon with material for action. RECOMMENDATION 1. Concerning the EIR, take public testimony and consider the written comments which have been received. Identify council concerns on adequacy and accuracy of the EIR, so staff and consultants can return with a package that will allow certification of the final EIR. 2. Concerning the regulations, consider the suggestions of staff, the Planning Commission, and the public. Initiate any amendments to the Water and Wastewater management Element which may be needed and give direction so staff can return with draft regulations for passage to print (probably June 6). Attached: Comments on EIR received in time for inclusion in packet Distributed previously: Draft EIR gm4/ccregrep 4-22-88 8�