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IIIII^I�Illl�lnl N, MEETING DATE:
I II�IfIIIV_=�ulllullll city of san is oBispo
COUNCIL AGENDA REPORT STEM NUMBER:
FROM: William T. Hetland OT�- PREPARED BY: Gary W. Henderson
Utilities Director Water Division Manager
SUBJECT: State Water Project - Whale Rock Exchange
CAO RECOMMENDATION: Direct stat to Proceed with Alternative 3 .
or alternatively No. 4 , and negotiate A,,rer-.. ...ts
with Involved Agencies and Return to Counci- .:.
for Final Approval.
BACKGROUND:
The City Council approved the City's participation in the State Water Project on April 21,
1992. Following this decision, a number of agencies have requested that the City of San Luis
Obispo exchange water from Whale Rock Reservoir for State Water which would eliminate the
need to build all or a portion of the Chorro Valley pipeline.
The idea of an exchange was presented in the environmental impact report prepared for the
local facilities portion of the State Water Project. The exchange was identified as the preferred
alternative, from an environmental standpoint, to the construction of the Chorro Valley
pipeline. The Chorro Valley pipeline would begin at the Cuesta Tunnel (which was
constructed to convey water from Salinas Reservoir) and proceed up the valley parallel to the
Whale Rock pipeline to Morro Bay and then proceed on to Cayucos (see Attachment 1 for
map of the Chorro Valley pipeline).
PURPOSE
The purpose of this report is to assess the impact of the exchange on the City's water supply
resources and identify other areas of concerns which the Council needs to be aware of prior to
making a policy decision on the exchange. If
the City of San Luis Obispo does not
participate in the State Water project, it is Table I: Requested Exchange Amounts
assumed that no exchange would be possible.
City of Morro Bay 1,313 of
The agencies that are interested in an County Water Works District #8 80 of
exchange and the amounts of water Morro Rock Mutual Water Co. 61 of
requested are shown in Table 1. If all the Paso Robles Beach Water Assoc. 40 of
agencies were included in the exchange, the Cuesta College 200 of
total amount would be 2,119 acre-feet per County Operations 425 of
year (afy). This large amount of yearly
exchange from Whale Rock Reservoir would TOTAL 2,119 of
have a significant impact on the City's safe
annual yield estimate.
m����►►i�IIiIIII�In ���lU city of San ll_.S OBISp0
COUNCIL AGENDA REPORT
State Water Project - Whale Rock Exchange
Page 2
PROCEDURE
The City of San Luis Obispo has adopted a multi-water fesource supply policy. A computer
model was developed based on the coordinated operation of the two reservoirs and recent
hydrologic information. Based on this analysis, City Council recently adopted a revised
combined safe annual yield of 7,735 afy (assuming 500 afy of groundwater). This computer
model was utilized to determine the impact of exchanging Whale Rock water for an equal
amount of State Water.
The computer model is based on a number of assumptions which have a direct impact on the
ability of the City of San Luis Obispo to participate in an exchange of water. The model
assumes that groundwater (500 afy) and state water are used first, then Salinas Reservoir is
used next to meet the City's water demand. Whale Rock water is the last to be used and is
primarily held in storage as a backup reserve. The analysis also assumes that each year a
minimum of 1,000 of is used from Whale Rock due to water quality problems at Salinas
Reservoir (ie. algae blooms, sediment washed in during storms, etc.). This is an important
assumption and has a direct impact on the amount of water that the City can exchange with
other agencies. Except for the above amount withdrawn from Whale Rock, Whale Rock is
only used when Salinas reaches minimum pool. By managing the water supply in this manner,
the City increases the overall yield from the reservoirs.
Based on the above assumptions, staff analyzed the impact of an exchange on the City's safe
annual yield estimates. Figure 1 shows the impact on the City's yield with varying exchange
amounts. The figure indicates that
exchanging Whale Rock water for State
Water can have a significant impact on the m0
City's safe annual yield. This reduction in 9 �o
yield is due to Whale Rock being used by the
exchange agencies and not being available as
a City backup to Salinas Reservoir. It 60D
basically eliminates the City's advantage of SM
coordinated use of the two reservoirs. 4W-
3W--
RESULTS
W3WRESULTS
2 2MU
Attempting to withdraw 2,119 afy in addition ¢ t00
to the 1,000 afy which is already assumed, 00 .6D wo so ,wo ,
exceeds the City's safe annual yield from EXCH riMAMOMff(A-F•Y•)
Whale Rock Reservoir. Therefore, the City
would be unable to meet the full requested Figure 1: Impacts of Exchange Amounts
exchange amount. It was then determined,
based on hydrologic data from September 1943 to December 1991, that the maximum exchange
amount, in addition to the 1,000 afy, that could be withdrawn from Whale Rock would be 1,145
�����ai�i►►�IfIIIIIIII�� �Illlll city of San ' 'IS OBISPO
COUNCIL AGENDA REPORT
State Water Project - Whale Rock Exchange
Page 3
afy. The major problem with exchanging this amount of water is that the critical time period
controlling the computer analysis is the end of the data in the program (ie. December 1991).
Therefore, the critical time period has not ended and since Whale Rock Reservoir did not see
a significant increase in storage this year, the amount calculated as a maximum (ie. 1,145 afy) is
questionable. If this amount was exchanged on an annual basis, there would be a reduction of
880 afy in the City's yield. This indicates that the City would lose the majority of the increased
yield attributable to the coordinated operation of the two reservoirs.
In order for the City to avoid being negatively impacted, it is assumed that any decrease in the
City's safe annual yield would need to be offset by an equal amount of state water above the
Whale Rock exchange amount. Therefore, the City would not support a one for one exchange
for state water. It is obvious from the above discussion, that the City cannot provide all of the
requested exchange amounts. The amount requested by the City of Morro Bay is
approximately 62% of the total requested and as such has a drastic impact on the possibility of
an exchange. With the reduction in City yield shown in Figure 1, an exchange with Morro Bay
would not appear to be in the City of San Luis Obispo or Morro Bay's best interest because of
the large exchange amount results in a significant reduction in safe annual yield. In other
words, if the City of San Luis Obispo were to exchange water with only Morro Bay, who has a
maximum requested allotment of 1,313 afy, the City would only exchange approximately 800 afy
(see Fig. 1 - 800 exchange + 550 reduction = 1,350) of water from Whale Rock Reservoir in
order to offset the amount of safe annual yield lost due to the exchange.
CMC/CAL POLY EXCHANGE
The California Men's Colony has requested an exchange of 400 afy of state water for an equal
amount of Whale Rock water with Cal Poly. Cal Poly will not have a physical connection to
the State Water Project, the exchange would require an agreement with the City to accept the
state water into our system and provide water to Cal Poly through their existing connections to
our system. The exchange which the California Men's Colony is negotiating with Cal Poly will
have a minimal impact on the City of San Luis Obispo. The impact is significantly less than an
exchange of the City's Whale Rock water because the City can deliver water from any of our
sources to Cal Poly (ie. the reservoirs can still be operated in a coordinated fashion).
The impact on the City's safe annual yield due to an exchange between CMC and Cal Poly, is a
result of state water being delivered at a constant rate throughout the year but Cal Poly's water
demand fluctuating during the period. Fifteen (15) acre-feet per year is loss through
evaporation due to water left in storage resulting from the variation in Cal Poly's demand.
This means that if CMC wishes to exchange 400 afy of Whale Rock water they will need to
provide 400 afy to Cal Poly and 15 afy to the City of San Luis Obispo. This item will have to
be addressed in negotiations with CMC and Cal Poly.
� -3
��►iia►n►ii��illlllilfP��u��lllllll City Of San tL_.10-$ OBISPO
aiis COUNCIL AGENDA REPORT
State Water Project - Whale Rock Exchange
Page 4
OTHER CONCERNS
Since State Water is delivered at a constant rate to participating agencies, it is questionable if
the City of San Luis Obispo can currently use more than the 3,000 afy. This is due to the fact
that currently the City is using approximately 5,000 afy but the daily demand fluctuates
throughout the year. There are currently days during the year that the demand may not equal
the constant delivery rate of state water if the City agrees to exchange a large amount of
Whale Rock water. The demand is expected to increase following the end of mandatory
rationing but may require the City to cut back requested state water deliveries in the interim.
This may cause an increase in the unit cost of state water which would need to be recovered
from the agencies involved in the exchange.
The City's current water right permit for Whale Rock Reservoir defines the service area as the
City of San Luis Obispo and Cuesta College. An exchange with any other agencies will require
an application for change of service area to be filed with the State Water Resources Control
Board. This change of service area will require CEQA review and State Board approval.
There are a number of other technical issues which will have to be addressed in the
agreements between the City and the agencies if such an exchange were to take place. The
agreements will have to be carefully prepared to insure that the City is protected under present
and future conditions (ie. the City's water supply resources are not adversely impacted). These
agreements would be brought back to Council for their approval.
ALTERNATIVES
A number of alternatives are listed below for consideration. The impacts of each alternative
are shown in Table 2.
Alternative 1: Exchange the maximum amount of 1,145 afy distributed proportionally
among all requesting agencies. To offset the reduction in the City's safe
annual yield, the agencies would have to provide the City with 2,025 afy of
State water. The agencies would only receive 54% of the requested
amount of state water but would still be required to purchase 96% of the
state water which they have requested. A major problem with this
alternative is that the City could not currently utilize 5,025 afy (3,000 +
2,025) at a constant rate. This amount of water exceeds our daily demand
for most of the year. This alternative is not recommended
Alternative 2: Agree to exchange water with all the agencies, except Morro Bay. The
total exchange amount would be 806 afy which would need to be offset
with approximately 1,355 afy of state water. The agencies would either
have to increase their allocation request or reduce the amount of water
requested to be exchanged from Whale Rock. Each agency would receive
approximately 60% of the state water exchanged with the City.
����►��►�N►�IIIIIIIIIII i��plN city of San ' 'I S OBISPO
Hii% COUNCIL AGENDA REPORT
State Water Project - Whale Rock Exchange
Page 5
Alternative 3: Agree to exchange water with only Cuesta College and the Cayucos Water
agencies (ie. County Waterworks District #8, Morro Rock Mutual Water
Co. and Paso Robles Beach Water Assoc.). If you assume that Morro Bay
will not participate in the exchange but will still receive state water, a
pipeline would be built to provide water to Morro Bay and would pass
right by the California Men's Colony. The County Operations Center
could therefore be served through an existing connection to CMC's system
and would be able to utilize existing wells to provide for their peaking
needs (unlike Cuesta College). The total exchange amount would be 381 i
afy which would require approximately 530 afy (ie. 149 afy reduction to
City + 381 afy exchange) of state water to offset the reduction in the
City's yield. Each agency would receive approximately 72% of the state
water exchanged with the City.
It should be noted that Cuesta College already receives water from the
City of San Luis Obispo. Any amount of State Water exchanged with
Cuesta will have a positive impact on the City's water supply situation by
offsetting the current demand on Whale Rock Reservoir.
Alternative 4: Only exchange water with the Cayucos Area Water Organizations. The
total amount of the exchange would be 181 afy which would require
approximately 210 afy of state water. The agency would receive
approximately 86% of the state water exchanged with the City. The
County Board of Supervisors have approved state water for County
Waterworks District No. 8 in Cayucos contingent on an exchange. If an
exchange can not be agreed upon, there is a serious question as to whether
the other two Cayucos agencies could afford to construct the pipeline from
Morro Bay to Cayucos. If this alternative were implemented, Cuesta
College would need to negotiate with CMC to provide for peaking
capability.
Alternative 5: No exchange of Whale Rock water for state water. This would effectively
eliminate the Cayucos Area Water Agencies from participation in the state
water project.
IiIIli11�IIII�IIIIIIIII�I�ilu�llll city Of San t OBISPO
COUNCIL AGENDA REPORT
State Water Project - Whale Rock Exchange
Page 6
Table II: Summary of Alternatives
Agencies SWP Amount Exchange Amount % of SWP Amount Exchanged
1. All 2,025 19145 54%
2. All, except 1,355 806 60%
Morro Bay
3. Cayucos & 530 381 72%
Cuesta College
4. Cayucos 210 181 86%
FISCAL IMPACT:
There would be a financial benefit to the City of San Luis Obispo depending on the amount of '
water exchanged. Savings would result from decreased pumping required from Salinas or
Whale Rock Reservoir. The City could also benefit from increased deliveries of State Water if
the proposed hydroelectric facility were constructed by the City at the first City turnout from
the pipeline at Reservoir No. 1. The increased flows, if delivered to this location, would result
in increased energy production. The exact extent of the benefits to the City have not been
estimated at this time due to the large number of alternatives.
There would also be a savings to the agencies that participate in the exchange resulting from
not having to construct the pipeline up the Chorro Valley. The agencies would have to provide
for treatment of the surface water from Whale Rock which would reduce their potential
savings.
I
RECOMMENDATION:
Staff recommends the Council direct staff to proceed with Alternative 3 or 4, staff would work
with Cuesta and CMC to negotiate an agreement to provide for Cuesta's peaking needs. Also,
recommend that CMC accept state water directly if a pipeline is constructed to their facilities.
These alternatives would have the least impact on the City's water supply resources while still
accommodating the needs of Cuesta College and Cayucos Water agencies.
Attachment: 1. Map of Proposed Chorro Valley Pipeline
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