HomeMy WebLinkAbout01/19/1993, 5 - NACIMIENTO PROJECT RESERVATION AGREEMENTIIIN�Iyoj��� n'�nl�n MEEnNG DATE
C17CY O f san ,k ^IS OBISPO January 19, 1993
MEM NUMBER:
COUNCL AGENDA REPORT
FROM: John Moss Prepared By: Gary W. Henderson Gnu
Acting Util- es birector Water Division Manager
SUBJECT: Nacimiento Project Reservation Agreement
CAO RECOMMENDATION
By Motion:
1. Direct Staff to Request a Tentative Subscription of 5,065 Acre -Feet per Year of Water
from the Nacimiento Project
2. Authorize the Mayor to Execute the Agreement with the San Luis Obispo County Flood
Control and Water Conservation District for the Participation in the "Feasibility Study
and Preliminary Evaluation" of the Nacimiento Project at a maximum cost of
$68,377.50.
DISCUSSION
Background:
The San Luis Obispo County Flood Control and Water Conservation District ( "District ") has an
entitlement of 17,500 acre -feet per year (afy) of water from Nacimiento Lake through a contract
with Monterey County. Approximately 1,300 afy have been contracted for use around the lake,
leaving 16,200 afy for allocation to other areas within the County of San Luis Obispo. The
Nacimiento Project has been evaluated a number of times in the past and due to recent requests
from several agencies (including the City of San Luis Obispo) the District entered into a contract
with Boyle Engineering to provide engineering services for the an updated evaluation of the
Nacimiento Project.
The District has requested that agencies that are interested in future participation in the
Nacimiento Project share in the costs associated with the evaluation of the project. This
requirement is intended to limit unrealistic requests from agencies for future water needs by
requiring the agencies pay for up front costs based on their proportional share of the total costs.
From past experience with the State Water Project (SWP), a number of agencies requested large
tentative allocations from the project, but when it was time to execute contracts decided to not
participate in the SWP. Large amounts of money were expended to include these agencies in
the studies and the County hopes to minimize this type of problem with the Nacimiento Project.
Scope of Study:
The contract with Boyle Engineering was approved by the District in June of 1992. The study
is separated into three phases. The District must approve proceeding with subsequent phases
following completion of the previous phase.
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COUNCIL AGENDA REPORT
Nacimiento Reservation Agreement
Page 2
Phase I of the study involved an evaluation of the reliability of the Nacimiento Project to deliver
water at a maximum amount of 17,500 afy. Phase I was completed and presented to the Board
of Supervisors in December of 1992. At the December meeting, the Board also approved
proceeding with Phase II of the study. The results of the reliability assessment concluded that
the Nacimiento Project can deliver 17,500 afy based on historic hydrologic data. The analysis
did indicate a number of months during the most recent drought were deliveries would have to
be reduced, but subsequent months deliveries could be increased to make up for the reductions
and therefore deliver the full 17,500 of for the year.
Phase II of the study will provide a preliminary engineering evaluation and environmental
assessment. The purpose of Phase II is to determine and recommend equitable apportionment
of the District's water entitlement to interested agencies, analyze and determine the apparent best
routings for water delivery, determine facility requirements, estimate costs, and determine
probable environmental impacts and possible mitigation measures. As noted above, this portion
of the study is currently being prepared. This portion of the study is scheduled to be completed
by October, 1993.
The final phase of the Boyle contract will involve the preparation of a final report identifying
the recommended overall project and presentation of the information to the Board of Supervisors
and other public agencies. The final report and presentations are anticipated to be completed
by February of 1994.
Key Components of Agreement:
The draft agreement (see attachment 1) between the City and the District is for participation in
the feasibility study for the Nacimiento Project and does not insure or require the City's
participation in the future project. The agreement requires that the City pay our proportionate
share of the costs of the studies based on the amount of water requested. There is a maximum
cost to the City for participation in this study as outlined in the fiscal impact section of this
report.
The agreement requires that the City's request "shall be equitable and consistent with the
General Plans applicable to agencies and to the County of San Luis Obispo and that the amount
of water for which the Agency (City) may participate under this Agreement shall not exceed the
amount of water required to implement the provisions of the said General Plans over a period
of the next twenty-five years. Therefore, in the following section outlining the future water
needs of the City and the amount to be requested, the currently adopted Water and Wastewater
Element of the General Plan were used for planning purposes. It should be noted that in section
4a. of the agreement, the agency will be allowed to participate in the project in an amount up
to, but not more than, the amount requested by the agency. This is a very important element
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Mli% COUNCIL AGENDA REPORT
Nacimiento Reservation Agreement
Page 3
of the contract and could be very serious if other future water supply projects prove infeasible
or environmentally unacceptable.
The agreement does not guarantee the City the right to participate in any future Nacimiento
Project but only reserves the option at the District's discretion. The District has full authority
in defining the project and agency participation. The agreement does provide for reimbursement
of costs to the City if the District decides not to allow the City's participation or reduces the
level of participation in the future project. But if the District decides not to proceed with the
project at all, the City will not be entitled to any reimbursement of moneys paid to the extent
that the District has expended or committed to be expended said funds.
Requested Entitlement:
On September 3, 1990, the City Council directed staff to request a tentative subscription of
4,390 afy of water from the Nacimiento Project. This request was developed prior to the
adoption of the reduction of the safe annual yield from Salinas and Whale Rock Reservoirs based
on the recent drought. The request also assumed that the Salinas Reservoir Expansion. Project
would provide 1,650 afy and that groundwater could supply 1,000 afy on a sustainable basis.
As stated previously, the requested amount of water from the Nacimiento Project must be tied
to the City's adopted general
plan. The current "Water and
Wastewater Management
Element" identifies the need for
about 12,000 afy by the year
2015 (Attachment 2). The plan
also identifies the loss of
approximately 800 afy due to
siltation at the Salinas and Whale
1' ock Reservoirs during this time
period.
The City of San Luis Obispo is
currently pursuing a number of
Salinas & Whale Rock
7,235 Siltation Deficit
F; ski 1 800
Groundwater
Soo
Urban Reserve Deficit
5.065
projects that may increase water Figure 1 Required Safe Annual Yield for 2015
supplies or decrease demand (ie.
Salinas Reservoir Expansion,
Wastewater Reclamation, and Water Conservation). All of these identified projects are
questionable at this time and may or may not prove feasible or reliable in the future. Since the
requested entitlement only pertains to the study currently being prepared and does not commit
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i COUNCIL AGENDA REPORT
Nacimiento Reservation Agreement
Page 4
the City to the future project, staff recommends that the City's request be based on the
assumption that the other projects will not be available in the future.
On April 7, 1992, the City Council adopted a reduction of the City's safe annual yield from
7,860 afy to 7,735 afy due to the most recent drought of record. This safe annual yield includes
the coordinated operation of the two reservoirs and 500 afy of groundwater. Based on the
information presented above, staff recommends that the Council request a total of 5,065 afy from
the Nacimiento Project (see Figure 1).
FISCAL EMPACT
The agreement requires the participating agencies to pay their prorata share of the costs of the
studies based on the amount of water requested. The agreement places limits on the amount
which the agencies are responsible to pay per Phase of the study as outlined below.
* Based on a request of 5,065 afy
The 1991 -93 Financial Plan did not identify funding for this project. Based on the estimate
above, the funding required will need to be appropriated from available fund balance. As of
December 31, 1992, the projected end of the year balance in the Water Fund will be $1.0
million.
.�c OM _
The Council could choose to request a different amount of water from the Nacimiento Project
than recommended by staff.
Attachments: 1. Draft Reservation Agreement
2. Page 12 of the Water & Wastewater Management Element
j:XWOIX,V.Scueq.
Maximum Cost
Maximum City Cost*.
Phase I
$1.00 /A.F.
$5,065.00
Phase R
$10.45 /A.F.
$529929.25
Phase III
$2.05 /A.F.
$10.383.25
TOTAL
$13.50 /A.F.
$689377.50
* Based on a request of 5,065 afy
The 1991 -93 Financial Plan did not identify funding for this project. Based on the estimate
above, the funding required will need to be appropriated from available fund balance. As of
December 31, 1992, the projected end of the year balance in the Water Fund will be $1.0
million.
.�c OM _
The Council could choose to request a different amount of water from the Nacimiento Project
than recommended by staff.
Attachments: 1. Draft Reservation Agreement
2. Page 12 of the Water & Wastewater Management Element
j:XWOIX,V.Scueq.
Attachment 1
DRAFT
NACIMIENTO PROJECT
RESERVATION AGREEMENT
This Agreement between the San Luis Obispo County Flood
Control and Water Conservation District ( "District "), and
( "Agency "), is based upon the
following facts:
1. The District, and the Monterey County Flood Control and
Water Conservation District (now the Monterey County Water
Resources Agency) on October 19, 1959, made and entered into an
agreement which agreement assures the District a- perpetual supply
of 17,500 acre -feet per year of water from the Nacimiento
Reservoir; and
2. Of the said 17,500 acre -feet per year of District's water
supply from the Nacimiento Reservoir, the District has reserved for
use in the vicinity of the Nacimiento Reservoir 1300 acre -feet per
year; and
3. Of the said 17,500 acre -feet per year of District's water
supply from the Nacimiento Reservoir, the District proposes to
study the reliability and the feasibility of a project to deliver
16,200 acre -feet per year to communities and other users within the
County of San Luis Obispo in the form of a Feasibility Study and
Preliminary Evaluation ( "Preliminary.Evaluation"); and
4. If, after the District completes and considers the
results of the Preliminary Evaluation, the District, in the
District's sole discretion, may determine to proceed with all other
necessary feasibility, environmental, and engineering reviews and
studies to define, design, finance, construct and operate the
DRAFT
District's Nacimiento Project ( "District's Nacimiento Project ");
and
5. The Agency desires to have the right to elect to
participate in the District's Nacimiento Project if the District,
in the District's sole discretion, determines to design, finance,
construct and operate the District's Nacimiento Project, and if the
District, in the District's sole discretion, determines that the
participation of the Agency is consistent with the economic,
environmental, operational, legal and other goals and standards of
the District's Nacimiento Project as it is ultimately defined in
the Preliminary Evaluation and approved by the District.
6. The Agency and District intend that the allocation of
Nacimiento Project water to all participating agencies shall be
equitable and consistent with: the General Plans applicable to
agencies and to the County of San Luis Obispo and that the amount
of water for which the Agency may participate under this Agreement
shall not exceed the amount of water required. to implement the
provisions of the said General Plans over a period of the next
twenty -five years.
NOW, THEREFORE, IT IS MUTUALLY AGREED by and between District
and Agency as follows:
1. The Agency and District agree that the District intends,
and shall have the right, to enter into agreements, substantially
similar to this Agreement, with other persons and agencies.
2. The Agency hereby requests that the District, in
preparing the Preliminary Evaluation, describe the Agency's
participation in the District's Nacimiento Project to be in the
DRAB' -1�
DRAFT
amount of acre -feet per year of water from the District's
Nacimiento Project ( "Agency Amount "), subject to the following:
a. In the event that the total of the Agency Amount
under this Agreement, when added to all of the Agency Amounts of
all other persons or agencies who enter into similar agreements
with the District, exceeds 16,200 acre -feet of water per year, then
the Agency Amount under this Agreement shall be reduced in
proportion to the amount by which all such Agency Amounts exceed
16,200 acre -feet of water per year.
b. In making this request, the Agency acknowledges that
the District is not bound by this request or by this Agreement to
deliver or reserve for the Agency any water whatsoever from
District's rights to water from the Nacimiento Reservoir in the
event that the District, in the District's sole discretion,
determines to not proceed with the District's Nacimiento Project.
C. In making this request, the Agency acknowledges that
the District has the complete right to define the District's
Nacimiento Project such that the Project is constituted in a manner
that the District determines to be the optimum project when the
environmental, economic, engineering, operating, legal and other
significant factors of the Project are considered. In this
context, the Agency- acknowledges that it is possible that the
District will define the District's Nacimiento Project such that
the Agency will not be allowed by the District to participate in
the Agency Amount or, at all, and in that event, the District shall
reimburse the Agency, from the moneys that District has collected
from other agencies, for the amounts that the Agency has paid to
-3- DRAFT -'- T
DRAFT
the District under this Agreement in proportion to the Agency's
reduced participation.
d. The Agency also acknowledges and agrees that in the
event that the District, in the District's sole discretion,
determines not to proceed with the District's Nacimiento Project
that the Agency will not be entitled to any reimbursement of any
moneys paid by the Agency to the District under this Agreement, to
the extent that the District has expended or committed to spend
those moneys under the terms of this Agreement, it being further
understood that if there are any said moneys paid by the Agency to
the District under this Agreement which are unexpended and which
are not committed to be spent at the time the District determines
not to proceed with the-District's Nacimiento Project, then said
unexpended and uncommitted moneys shall be returned to the Agency
by the District.
3. District has begun the Preliminary Evaluation for the
District's Nacimiento Project in accordance with that certain
"Agreement for Professional Engineering Services for Preliminary
Evaluation for a Water Distribution System for the San Luis Obispo
County Flood Control and Water Conservation District ", dated June
9, 1992, by and between District and Boyle Engineering Corporation.
4. If, after the District completes and considers the
results of the Preliminary Evaluation and all other reviews and
studies that the District deems necessary, the District, in the
District's sole discretion, determines-to define, design, finance,
construct and operate the District's Nacimiento Project, and if the
District, in the District's sole discretion, determines that the
participation of the Agency is consistent with the economic,
_4_ DRAFT - .-SW
DRAFT
environmental, legal, operational and other goals and standards of
the District and of the District's Nacimiento Project, as the
District's Nacimiento Project is ultimately defined by the
District, the Agency shall have the right to elect to participate
in the District's Nacimiento Project subject to all of the
following terms and conditions:
a. That the Agency shall participate in the District's
Nacimiento Project in an amount, specified by the Agency, up to,
but not more than, the Agency Amount as defined in paragraph 2 of
this Agreement.
b. That the Agency is not in default as to any term or
condition of this Agreement.
C. That the Agency and the District enter into an
agreement, which shall supersede this Agreement, for the Agency's
participation in the District's Nacimiento Project, which agreement
shall be substantially similar to all other agreements entered into
by the District with other agencies and persons who are
participating in the District's Nacimiento Project, and by which
agreement the Agency agrees to pay its proportionate -share of the
costs and expenses of the District's Nacimiento Project.
S. The Agency agrees to pay to District the Agency's share
of all reasonable costs and expenses incurred by the District under
this Agreement, including County staff time and overhead, for the
District's Preliminary Evaluation. The amount that the Agency
shall pay to District (the Agency's share) shall be the sum of:
a. The Agency's proportional share of Phase I of the
Preliminary Evaluation cost; $16,176 divided by 16,200, multiplied
-5- . DRAFT si
DRAFT
by the Agency amount, not to exceed $1.00 per acre -foot per year of
water requested, and as shown in Exhibit A attached hereto, plus
b. The Agency's proportional share of Phase II of the
Preliminary Evaluation cost; $156,600 divided by the sum of all
Agency amounts participating in the District's Nacimiento Project
multiplied by the Agency amount not to exceed $10.45 per acre -foot
per year of water requested; as shown in Exhibit A attached hereto,
plus
C. The Agency's proportional share of Phase III of the
Preliminary Evaluation cost; $30,360 divided by the sum of all
Agency amounts participating in the District's Nacimiento Project
multiplied by the Agency amount, not to exceed $2.05 per acre -foot
per year of water requested; as shown in Exhibit A attached hereto.
6. The District shall establish a reserve account from which
the District shall make payments for the District's Preliminary
Evaluation for the District's Nacimiento Project. The Agency
shall, within 30 days of the execution of this Agreement by
District, pay to District an initial sum representing 25% of the
Agency's total share of the costs as provided for under 5a, b, and
c above, which District shall place into the said reserve account.
The District shall notice the Agency in accordance with
Article 5, Billing and Payment, schedule as defined in that certain
Preliminary Evaluation Agreement referenced in paragraph 3_ of this
Agreement attached hereto for reference. The District shall so
notify the Agency and Agency shall within 30 days of receipt of
said notice pay to District said amounts required by District. The
District shall, on a quarterly basis, provide to Agency an
accounting of the transactions and status of the reserve account.
-6-
eRe;-r cr-10
DRAFT
7. The term of this Agreement shall be five years from the
date of execution hereof, except that:
a. The Agency shall have the right to earlier terminate
this Agreement by giving the District ninety days advance written
notice of the Agency's election to so terminate, and provided that
the Agency has paid all amounts due to District under this
Agreement up to and including the effective date of termination;
and except,
b. In the event that the District determines that the
District will not proceed with the District's Nacimiento Project,
the District may terminate this Agreement by giving ninety days
advance written notice to Agency.
C. In the event that this agreement is superseded by an
agreement to implement the. District's Nacimiento Project, this
agreement shall terminate the day the new agreement is executed
provided the Agency has paid all amounts due to the District under
this agreement.
8. The District and the Agency shall provide written notice
via first class mail to:
DISTRICT
Attn County Engineer
San Luis Obispo County Flood Control
and Water Conservation District
Engineering Department, Room 207
San Luis Obispo, CA 93408
AGENCY
DRAFT
DRAFT
Executed this day of , 1993, at San Luis
Obispo, California.
AGENCY:
ATTEST:
SAN LUIS OBISPO COUNTY FLOOD CONTROL
AND WATER CONSERVATION DISTRICT
COUNTY OF SAN LUIS OBISPO
By:
Chairman of the Board of Supervisors
ATTEST:
Clerk of the Board of Supervisors
APPROVED AS TO FORM AND LEGAL EFFECT:
JAMES B. LINDHOLM, JR.
County Counsel
By:
Deputy County Counsel
Dated:
c: \docs \lgg \nacimien.agr.ds
nPAFT
DRAFT
EXHIBIT A
NACIMIENTO PROJECT
RESERVATION AGREEMENT
COST SPREAD
Requested Agency Phase I Phase II
A°encv Amount' Amount2 Share3 Share
A.
B.
C.
D.
E.
F.
SLO FCWCD
Total 16,200 AF $16,176 $156,600
'Specific Request of Participating Agency
Phase III Total
Shares Cost"
$30,360 $203,136
2Requested Amount Adjusted for Possible Over Subscription:
Request amount times 16,200 divided by summation of Item 1, not to
exceed requested amount
3Agency Amount times $16,176 divided by the lesser of Total #1
or 12, not to exceed $1.00 per A.F.
4Agency Amount times $156,600 divided by the lesser of total
#1 or #2 minus: the Agency Request of those Agencies not
participating in the delivery aspects of this study, not to exceed
$10.45 /A.F.
'Agency Amount times $30,360 divided by the lesser of total #1
or 12 minus the Agency Request of those Agencies not participating
in the delivery aspects of this study, not to exceed $2.05/A.F.
6Total Preliminary Evaluation costs including the Boyle S-13 Engineering contract plus 20% District Overhead.
!\!% A CT
Attachment 2
Silt is slowly filling both reservoirs. Engineers have estimated that this
siltation reduces the combined safe annual yield of the reservoirs by roughly 25
acre -feet per year each year, so that by the year 2015 the yield will have been
reduced by nearly 800 acre -feet.
The quality of water from the reservoirs is very good in comparison with many other
municipal sources throughout the state.
In addition to the city water system, a few private wells and stream withdrawals are
used for landscape irrigation. Also a water - bottling company uses a hillside spring
and an ice company uses well water. During the 1940's and 1950'5, the city stopped
using creek supplies near Cuesta Grade and wells in and near the city, due to their
small and less reliable yields and relatively poor water quality, in comparison with
the reservoirs. The city is considering reactivating some of these sources.
Proiected Water Reouirements
Water demand is expressed as the number of acre -feet per year which the city should
be prepared to deliver for all desired uses. Based on recent water -use
measurements, the city assumes that water use will be 0.2 acre -foot per person per
Year. In other words, one acre -foot of water will meet the needs of five city
residents plus all nonresidential uses (businesses, parks, and schools) if the
relationship between resident population and other uses remains about the same as in
recent years. Using these assumptions, and population projections derived from the
Land Use Element, Figure 6 shows city water needs to the year 2015. This figure
includes an allowance of up to 150 acre -feet per year for Cuesta College. It also
reflects the additional water needed to compensate for gradually reduced yield of
existing reservoirs due to siltation.
If San Luis Obispo grows as outlined in the Land Use Element, the city will need
about 9,700 acre -feet per year (an increase of 2,000 acre -feet) by the mid 1990's.
By the year 2015, it would need about 12,000 acre -fcet per year (an increase of
about 4,300 acre - feet). As Figure 6 shows, during the late 1980's the city's safe
yield of supplies does not equal projected demands. At other times the city may
have more than enough water. The actual dates when supplemental water will be
available and the total quantities to be available cannot be predicted with
certainty. If supplemental water is not available or if droughts occur, the city
will have to manage demand so requirements do not reach the level projected in the
graph.
Treatment. Storage. nom¢ Distribution
The existing reservoirs generally provide good quality water, though it must be
treated. to meet health and esthetic standards. The City's water treatment plant in
Stenner Canyon purifies the water to meet these drinking -water standards. Compounds
are added to help remove sediment and kill bacteria. To further remove impurities,
the water flows through carbon filters.
From the treatment plant, water is pumped to tanks on hillsides around the city.
From the tanks, it flows through pipes to customers and to fire hydrants. The
existing network of pumps, pipes, and tanks determines water pressures (pounds per
square inch) and delivery rates (gallons per hour) which can be provided to various
areas of the city. The pressures and rates in turn determine how far up the
hillsides and how far out development can be served while still meeting city
standards for customer convenience and fire safety.
12