HomeMy WebLinkAbout10/03/1995, 4 - WATER SUPPLY STUDY SESSION MEETING DATE:
���n�ib►►i�ulllflll�li�N°►ql��i� City Of SAn LUIS OBISPO October 3, 1995
COUNCIL AGENDA REPORT ITEM N ER:
FROM: John E. Moss, Utilities DirectoIr
Prepared by: Gary Henderson, Water Division Manager Liv a
Dan Gilmore, Utilities Engineer
Dave Pierce, Water Projects Manager
SUBJECT: Water Supply Study Session.
CAO RECOMMENDATION:
1. Receive the staff report concerning the City's water supply alternatives and reaffirm the
current direction.
2. Provide any added direction to staff, as appropriate.
REPORT IN BRIEF:
Based on the General Plan and policies contained within various Elements to the General Plan,
the City of San Luis Obispo needs to develop 3,861 acre-feet per year of additional water
supplies. The additional water will meet the water needs for full buildout within the Urban
Reserve (56,000 population) as identified in the General Plan. The City is currently pursuing
three water supply projects to meet the current and future water demands of the City: Water
Reuse, Salinas Reservoir Expansion and Nacimiento Water Supply. There are also several
projects which are currently not being pursued by the City which have the possibility of
supplying additional water to meet the City's needs. These projects include: Cloud Seeding,
State Water, Salinas to Whale Rock Transfer and Desalination.
All of the potential water supply projects have numerous impacts and obstacles which must be
mitigated or overcome prior to actual construction or implementation of the project. There are
environmental concerns, political opposition, water rights issues, regulatory approvals and the
ultimate cost to the customer which will impact the future decisions made relative to pursuing
any of these water supply projects. Based solely on current cost estimates for the water supply
projects currently being pursued, the Water Reuse Project is the most cost effective alternative
($600 per acre foot), followed by the Salinas Reservoir Expansion Project($450- $670 per acre-
foot) and the Nacimiento Water Supply Project ($900 - 1,100 per acre-foot). The issues,
impacts, feasibility, reliability/yield, timing and cost for. each of these projects, as well as the
projects not currently being pursued, are discussed in further detail in the body of this report.
Staff is requesting that the City Council reaffirm the current direction being pursued to acquire
additional water supplies for the City of San Luis Obispo.
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"'�n�ul�ill!IIIIIP1QIIIIIII City Of San LUIS OBISPO
COUNCIL AGENDA REPORT
Water Supply Study Session
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DISCUSSION:
Background
The City of San Luis Obispo currently has limited water supplies to meet our current and future
water demands. Based on the planning figures contained in the City's Urban Water Management
Plan, adopted by Council in 1994, water supplies available for new development are severely
restricted and are only available through retrofit off-set. The limited water which is available
has only become available as a result of reduced consumption through the conservation efforts
of our citizens. The City of San Luis Obispo now has one of the lowest per capita planning use
rates (145 gallons per person per day) of any City of comparable size and climate in the State.
This per capita planning use rate is used to estimate total water supplies required to meet'the
needs of the existing population, satisfy the goals of the General Plan and serves as a target use
rate for our conservation programs. The per capita planning use rate does not necessarily
represent actual use rates at any one-point in time but represents a level of water use which can
not be exceeded during the planning period.
While our conservation programs should be recognized for their effectiveness and recognizing
that groundwater has been used by the City in the past, the City has developed no new water
supplies since before the 1987-91 drought. Use of groundwater was reactivated during the
drought but has been significantly reduced due to nitrate contamination. Whale Rock Reservoir
was the last additional water supply developed by the City and was completed in 1961. Without
additional supplies the effects of the next drought will be hard-felt as the City continues
incremental development based on the success of our water conservation programs. In order for
the City to satisfy the goals of the General Plan it is critical that we obtain additional water
supplies. The reliability of our water supplies for even our existing residents is constantly being
threatened by issues such as water rights, contamination, and environmental/public trust needs.
Overview
In recognition of the need to provide adequate supplies and services to satisfy the goals of the
General Plan and in recognition of the need to develop a secure and reliable water supply for
existing as well as future residents, the City is currently pursuing the development of three water
supply projects: the Salinas Reservoir Expansion Project, the Nacimiento Pipeline Project, and,
the Water Reuse Project. The Coastal Branch of the State Water Project, currently being
constructed adjacent to San Luis Obispo, is not being considered at this time, as participation
in the project was not supported by a vote of the public.
The City is relying on the success of these remaining viable water supply projects to meet our
General Plan goals including the establishment of a reliability reserve and, therefore, are the
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COUNCIL AGENDA REPORT
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subject of this study session. These projects are not exclusive of each other. All three projects
should be developed to their maximum potential in order to ensure the citizens of San Luis
Obispo a secure and cost effective water supply. One need only look to the cities of Morro Bay
and Cambria to see the effects of inadequate water supplies on the community's planning goals
and on the cost of water. It is easy to see that limited or restricted water supplies are far more
costly to the residents than the development,of adequate supplies.
As staff has proceeded with the development of each of these projects, each project has
developed its own issues, support, opposition and mythology. It has become obvious that
development of any of these water supply projects will be difficult technically and politically.
It is with this recognition that staff is requesting council reaffirm its commitment to each of the
supply projects being pursued. It is also with this recognition that staff provides.this study
session and proposes, at a minimum, annual water supply study sessions in the future.
The remainder of this report will discuss in detail each of the three previously mentioned water
supply projects and discuss each project's impacts, feasibility, reliability and potential yield,
schedule, and projected cost. The report also provides a similar analysis of the State Water
Project and other projects not currently being pursued, for comparison purposes and full
consideration of all possible water supply options. While politically sensitive, the State Water
Project may still, in some form, be a technically viable option. This detailed comparison should
provide Council with the information required to properly evaluate the City's overall water
situation and provide appropriate direction to staff.
Water Supply Status and Policy
The City currently uses 145 gallons per person per day (gppd) as a planning use figure (UWMP
2.3.2) to determine water demand (present and projected) and availability. The City's present
water demand is calculated by multiplying the planning per capita use rate by the present
population (UWMP 2.3.4). Projected water demand is calculated by multiplying the population
at full build-out (56,000) by 145 gppd for a total of 9,096 acre-feet per year (afy).
Safe annual yield is determined by modeling the water supply system operations under conditions
of the most severe drought of record. The City's current safe annual yield is 7,735 afy (UWMP
2.1). As stated earlier, the projected demand at build-out is 9,096 afy,leaving the City with a
need to develop 1,361 afy additional safe annual yield. In addition, the City has adopted a
policy requiring the development of a reliability reserve (UWMP 2.4) in the amount of 2,000
afy safe annual yield and an additional 500 afy to offset reductions in storage at the reservoirs
due to siltation. The reliability reserve is to be used only for emergency purposes such as the
catastrophic loss of a water supply due to contamination, a future worst-case drought, etc. Thus
our total water supply deficit, including the reliability reserve and siltation offset, is 3,861 afy.
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Table I: New Water Supply Requirements
(in acre-feet)
Required Safe Annual Yield 9,096
Current Safe Annual Yield 7,735
Additional Sq{fe Annual Yield Required 1,361
Additional Safe Annual Yield Required 1,361
Reliability Reserve 2,000
Siltation Reserve 500
Total Water Supply Requirement 3,861
L EXISTING WATER SUPPLY SOURCES
The City currently utilizes water from three separate sources: Salinas Reservoir, Whale Rock
Reservoir, and groundwater. Whale Rock and Salinas Reservoirs are operated in a
"coordinated" manner which increases the safe annual yield available from the two reservoirs.
The safe annual yield of an individual source of water supply is defined as the quantity of water
which can be withdrawn every year, under critical drought conditions. Safe annual yield
analyses of water supply sources are based on rainfall, evaporation and stream flow experienced
during an historic period. The City of San Luis Obispo uses a period beginning in 1943, which
covers drought periods in 1946-51, 1959-61, 1976-77, and 1986-91. Although future conditions
are not likely to occur in the precise sequence and magnitudes as have occurred in the past, this
technique provides a reliable estimate of existing water resources and their ability to meet future
water supply needs.
Prior to 1991, the "controlling drought period" for determining safe annual yield was 1946 to
1951. The adopted safe annual yield estimate of 7,235 acre-feet (from surface water sources)
uses the controlling drought period 1986 to 1991. This safe annual yield estimate was adopted
by Council as part of the 1992-93 Water Operational Plan. The adopted safe annual yield from
Salinas and Whale Rock Reservoirs and 500 acre-feet of groundwater is 7,735 acre-feet per year.
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Groundwater production during the past Table H: Groundwater Production
several years has been drastically reduced
which resulted from the loss of the two
largest production wells due to nitrate YEAR PRODUCTION (A.F.)
contamination. Table H shows the
groundwater production since 1990. The 1990 1,955
City currently relies on four domestic 1991 1,953
water supply wells: Pacific Beach #1 &
#2 on Los Osos Valley Road, Fire Station 1992 1,543
No. 4 and the Mitchell Park. While the 1993 540
City's adopted safe annual -yield figure
assumes 500 acre-feet per year, the 1994 267
current situation limits groundwater
production to approximately 300 acre- 1995 300*
feet. While staff is evaluating options for
increasing groundwater production, * Estimated to End of Year
revision of the adopted safe annual yield
figures may be necessary if reliable
production increases are not achieved.
In addition to surface water and groundwater supplies described above, the City has adopted
another supply option: water demand management. Water demand management, or water
conservation, practices and technology have advanced significantly in the last several years in
reaction to the drought of 1986-1991. Historically, water demand management was viewed as
an emergency response to extreme water shortage situations. As demand for water resources
increase due to growing population and agricultural needs, the importance of using our water
wisely and efficiently is a continuing imperative to assure adequate, reliable water supplies in
the future.
In 1990, the City endorsed a multi-source water supply policy in an attempt to solve both short-
term water shortages and establish long-term solutions to the City's water needs. Because of
the difficulty in developing new water supply projects, there has been a philosophical shift in
perception of water demand management from a crisis management vehicle in 1985 to a water
supply alternative for the future.
With this philosophical change, the City Council adopted the "Urban Water Management Plan"
on November 15, 1994 which identifies water demand management as a critical component of
the City's multi-source water policy. The City is committed to an ongoing water conservation
program to maintain per capita water use below 145 gallons per person per day.
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II. WATER SUPPLY PROJECTS CURRENTLY BEING PURSUED
The following water supply projects are currently being pursued by the City to meet current and
future water demands.
A. WATER REUSE PROJECT
jed
The City's Water Reclamation Facility aflm�oRousePro - 1.7drs0sdr6
(WRF)treats 4,000 acre-feet per year (afy) =a
of municipal wastewater. The effluent so
from the WRF is a disinfected tertiaryL::
treated reclaimed water that is suitable forR
reuse. As currently proposed, the WaterReuse Project will discharge a minimum of 1.7 cfs (1,230 afy) to the creek for the 7°0
maintenance of instream uses and will ,ao `
distribute approximately 1,233 afy of the MinNarnolachwploCrosk
reclaimed water for irrigation and Q0 1290 M/yr
industrial use. An additional 1,537 afy o
that is excess to irrigation demand will also Jm ti a` #4r "' Ja w ~ to 'a ww o.e
be discharged to the creek.
The goals of the Water Reuse Project are:
a) to provide a drought tolerant non-potable water supply,
b) to efficiently manage the water resources of the City,
C) to increase the quality of the water in San Luis Obispo Creek by reducing the amount of
contaminants discharged, and
d) to avoid the addition of expensive nutrient removal processes at the Water Reclamation
Facility.
The City Council adopted a policy setting priorities for the use of the limited supply of
reclaimed water. Two categories of uses were established. The first category includes those
uses that will replace potable water, or will serve to maintain the instream uses of San Luis
Obispo Creek. The second category includes uses outside the City that would enhance
agriculture or open space.
Existing users have been identified for approximately 775 acre-feet of the reclaimed water. The
remaining 400+ acre-feet is needed to support the growth projected in the General Plan.
I
Construction necessary to implement this project will include: expansion of the effluent ponds
for storage, refurbishment of the abandoned reservoir on Fox Hollow Road for storage, a pump
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i COUNCIL AGENDA REPORT
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station with chlorination and filtration at the south end of the WRF, two booster pump stations
to maintain pressure throughout the City, and approximately 11 miles of pipeline.
Impacts
The use of reclaimed water will reduce the amount of water discharged to San Luis Obispo
Creek. Until the 1960s, during the summer, most or all of the effluent was used for irrigation
of City owned land. Through the early 1980s, during summer months, effluent was used to
irrigate pastures adjacent to the WRF. For days or weeks, most or all of the effluent was used
to flood irrigate the pastures rather than being discharged to the creek. The planned reduction
in effluent raises several water rights and ecological concerns. To address water rights, the City
filed a petition for the Change in Place of Use of Treated Wastewater Effluent with the State
Water Resources Control Board (SWRCB). Several parties protested the petition based on water
rights, environmental, and public trust issues. All protests based on prior water rights have been
dismissed by the-SWRCB. The protests based on other issues are pending the completion of the
Environmental Impact Report.
As part of the environmental evaluation, the City contracted for an Instream Flow Study, a
Hydrology and Ground-Water Model of the Lower San Luis Obispo Creek, and a Biological
Resource Assessment and Impact Analysis of San Luis Obispo Creek. Modeling of creek flows
was made with the assumption that the downstream users obtained all the water they need from
diversions or from wells. These studies provided the following information:
■ Downstream agriculture requires 1,000 acre-feet per year.
■ Other than during successive drought years, the basin produces enough natural water for
agriculture.
■ Reclaimed water discharged during the winter will recharge the aquifer during
successive dry years.
■ All of the City's reclaimed water is not sufficient to drought proof the creek. During
the recent drought, there was one month when water did not flow over the fish
ladders of the Marre Dam.
■ A 1.7 cfs discharge provides a minimum flow of 1.0 cfs during the average year. During
the driest years approximately half of the creek will have no flow for one or more
months.
■ A flow of 1 cfs will maintain 90% of the wetted surface area providing production of food
for fish. ,/ n
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■ Mitigation measures can reduce the impacts of a 1.7 cfs project on steelhead and turtles to
less than significant.
■ The Tidewater Goby, a federally listed endangered species, lives in marginal habitat
immediately downstream of the Marre Dam located just upstream of the San Luis Bay
Golf Course. A continued flow of fresh water through this reach is needed to maintain
adequate habitat. This appears to be the most significant obstacle to project
implementation.
Staff is optimistic that a project with a proposed minimum discharge of 1.7 cubic feet per second
can be adequately mitigated so that the State Water Resources Control Board will issue the
necessary permits to allow a change in the use of the reclaimed water. Failure to adequately
mitigate the impacts of reduced flows on the habitat does not necessarily halt the project. If the
State Water Resource Control Board determines that more water is required to maintain the
habitat, other users may have an equal or greater burden to supply all or part of the additional
water. To pursue these options the City could file complaints with the SWRCB about
appropriative extractions within the creek or could press for the adjudication of the basin. The
City's reclaimed water originates outside the San Luis Obispo Creek basin and no downstream
user has any right to use that water. Adjudication of the downstream basin (surface and
underflow of the creek) could result in a project that would provide more water for reuse than
the proposed 1.7 cfs project. It is likely that the adjudication process would require the City to
release water to support at least some of the public trust (fauna & flora), but it is not likely that
the City would be required to release water to replace that used downstream. Pursuing the
City's water rights is likely to generate considerable opposition from downstream property
owners and developers. Not pursuing the project does not assure that there will be water in the
creek. Many of the downstream users can increase their water consumption with little or no
governmental oversight. Riparian rights are regulated on the basis of complaints from other
parties whose water rights have been impacted.
Feasibility
The primary demand for reclaimed water is irrigation of large facilities such as City parks,
schools, Cal Poly, and CalTrans (Highway 101 landscaping). These users are interested in the
cheapest water available. The City has several options:
1. State law makes use of potable water for irrigation a waste of water, if reclaimed
water is economically available. The City can adopt an ordinance invoking that
provision of the state law and then price the reclaimed water so that it is
economical to use. i
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COUNCIL AGENDA REPORT
Water Supply Study Session
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2. A better option may be to negotiate a swap of reclaimed water for the present
water being used for irrigation.
Completion of the proposed project will require ten separate discretionary approvals on the part
of four decision malting bodies and agencies (listed below). There will be opposition at each
of these decision points. Opposition will be based on environmental/public trust issues and on
the impact on downstream water users..
Cly Council San Luis Obispo
• Certification of Final EIR
• Approval of Plans and Specifications for Project
• Approval of Funding Mechanism and Rate Structure
• Approval of Rules & Regulations for Non-Potable Service
State of California DgWrtment of Health Services
• Engineering Report Recommendation
Central Coast Regional Water Quality Control Board
• Approval of Report of Waste Discharge
• Issuance of Water Reclamation Requirements
• Engineering Report Recommendation
State Water Resource Control Board
• Approval of Change in Place of Use of Treated Wastewater Effluent Petition
• Approval of Water Reclamation loan or Clean Water Act SRF Loan
Reliability\Yield
A reuse project that releases a minimum of 1.7 cfs for maintenance of instream uses is expected
to produce 1233 acre-feet per year for irrigation. Drought conditions have little impact on this
flow. Industrial uses for reclaimed water could increase the amount of water available from the 9
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COUNCIL AGENDA REPORT
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project by using water during the winter when excess water is discharged. As the population
of the City grows to the 56,000 people projected in the General Plan, the amount of reclaimed
water available for irrigation will increase to approximately 1600 afy.
Augmenting the reclaimed water with water from wells that are high in nitrates could increase
the amount of water available from the project. If well water is added during months where
there is no excess being discharged to the creek, enough irrigation customers could be served
to use the excess water during other months. For example the use of 110 acre-feet of well water
during June, July, and August would increase the amount of reclaimed water that could be used
for irrigation from 1,233 acre-feet to 1,432 acre-feet meeting an irrigation demand of 1,542
acre-feet.
Failure to pursue this project at this time could result in greater difficulty in claiming rights to
the water at a future date. There are no approved appropriations of the discharged effluent
downstream and it is not likely that any will be approved in the future. However, it is likely
that the environmental/public trust needs will become more dependent upon reclaimed water a`s .
development takes place in the Avila Valley and is allowed to use the natural water which will
result in the environmental/public trust needs becoming dependent on the City's reclaimed water.
Legislation and case law is providing more rights to public trust issues at the expense of
traditional water rights. There is no way of predicting how this might play on the City's future
right to use the reclaimed water if we delay development of the project.
Timing
WATER REUSE PROJECT
Milestone Optimistic Realistic
Issue Draft EIR November 1995 December 1995
State Board Hearing July 1996 December 1996
Certification of EIR July 1996 February 1997
Begin Design September 1996 March 1997
Begin Construction Phase I June 1997 April 1998
Complete Construction Phase.1 May 1998 April 1999
Begin Construction Phase lI August 1999 April 2000
Complete Construction Phase H June 2000 December 2000
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COUNCIL AGENDA REPORT
Water Supply Study Session
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Cost
Phased construction of the reclaimed water distribution system is estimated to cost$9.3 million.
The FY 1995-96 CIP includes funding for design and the FY 1996-97 CIP includes funding for
the first phase of construction. The Reclaimed Water Project may be funded through a variety
of mechanisms. Funding is possible through either state low interest loans or conventional debt
financing. Debt service will be recovered through water rates. The total project cost would
result in a cost per acre foot approximately $600.
B. SAUNAS RESERVOIR EXPANSION PROJECT
The Salinas Reservoir Expansion Project involves the installation of a spillway gate which was
originally planned for the dam when it was built in 1941. The gate would increase the
maximum water surface .level by approximately 19 feet. This would increase the maximum
storage capacity at the lake from 23,843 acre-feet (af) to 41,792 af, which results in an
additional 1,650 of of safe annual yield from the reservoir.
The U.S Army Corps of Engineers (Corps) owns the Salinas Dam, related facilities and the
surrounding 4,400 acres of land. The Corps has indicated that the expansion of the dam can not
proceed until ownership of the facilities is transferred to a local agency. In November 1992,
the City Council supported the idea of transferring ownership to the County Flood Control and
Water Conservation District which is the agency that currently operates the facilities to deliver
the water to the City of San Luis Obispo.
The draft EIR for the Salinas Reservoir Expansion Project was released for comments in
November 1993 and the comment period closed on January 3, 1994. Numerous comments were
received and draft responses have been prepared for inclusion in the final EIR. Due to concerns
raised during and following the comment period for the draft EIR, the Council has directed staff
to proceed with a phased approach toward implementation of the expansion project. The current
phase of work (Phase III) involves consultations with the regulatory agencies to develop
strategies for potential mitigations involving loss of oak trees and impacts to wetlands. During
this phase of work, the City Council will be meeting with North County elected officials and San
Luis Obispo city staff will meet with North County staff to determine whether there are
additional studies or mitigations which will minimize or eliminate the opposition. The main area
of concern relates to reductions in downstream flows and the perceived impacts on groundwater
recharge. The outcome of this phase of work will identify the additional studies and analysis
necessary to prepare the detailed mitigation plans and mitigation monitoring plans.
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Impacts
The draft environmental impact report for the expansion project has identified a number of
impacts. The two main areas of potential impacts or concern are related to the inundation of
additional areas at the lake and potential reductions in downstream flows in the Salinas River.
Inundation-Related Impacts
Increasing the reservoir's maximum storage capacity from 23,843 acre-feet to 41,792 acre-feet
would result in periodically raising the maximum water surface level as much as 19 feet and
flooding of an additional 400 surface acres around the lake. This could affect sensitive bird and
aquatic species habitat, including relocation of existing lake-edge wetlands, and would probably
result in the loss of up to 4,000 oak trees and 930 gray pine trees along the reservoir perimeter.
There are two sensitive aquatic species that have been found in the impacted area and are of
particular concern. They are the red-legged frog and the western pond turtle. The red-legged
frog is proposed for endangered species listing which may require additional mitigation measures
or strategies. It has also been determined that the habitat in areas around the lake is suitable for
the arroyo toad and the southwestern willow fly catcher which are both listed as federally
endangered. The surveys which have been done did not locate the .toad or fly-catcher but
additional surveys may be required to verify their non-existence. Mitigation of these impacts
could occur through a combination of the following actions:
■ Establishment of an on-site ecological habitat preserve
■ Replanting of oak and pine trees on-site or nearby
■ Acquisition and preservation of sensitive off-site oak woodland, wetlands or other
habitat elsewhere in the County
■ Replacement of wetlands on-site in appropriate areas
■ Working with local groups for enhanced oak habitat or wetland
protection/enhancement
Depending on the nature and extent of,mitigation implementation, some residual impacts could
remain after mitigation is complete from inundation effects. These residual impacts may require
the Council to make statements of overriding consideration when the EIR is certified to allow
the project to proceed.
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Downstream Flow Reduction Impacts.
Downstream property owners and public agencies rely on groundwater to meet their water
demands. As such, numerous individuals and agencies have expressed concerns relative to
potential downstream flow reductions and the potential impacts to groundwater recharge and
other water rights along the river.
Based on hydrologic studies, computer models, and historic riverflow data, the draft EIR
concluded that the impact to downstream users will be insignificant. This finding of
insignificance is based on two main factors. First, is that the "live stream" agreement must be
adhered to and was established by the State Water Resources Control Board as a condition to
the City's water rights permit at Salinas Reservoir to protect the downstream vested water rights.
The second, is that only about 20 percent of the Salinas River flows at Paso Robles come from
the watershed area upstream of the Salinas Dam. The majority of the flows come from
tributaries downstream of the dam. It is also estimated that 98 percent of the Paso Robles
Groundwater Basin lies outside and upgradient from the Salinas River floodplain, therefore ont'y
a small portion of the total groundwater recharge is provided by river flows.
The existing terms of the "live stream" agreement will continue with no change if the reservoir
is expanded. The agreement requires the release of all water flowing into the reservoir until a
visible flow is observed between the dam and the confluence with the Nacimiento River. This
requirement limits the months during which water can be diverted to storage and protects the
water supplies of downstream users and aquatic resources along the river.
Downstream flow reductions that would be attributable to the expansion project are relatively
small, less than one percent on average, when compared to the amount of water that is diverted
by downstream users and groundwater wells. As part of the draft EIR, a computer modeling
simulation based on historical flows from 1944 to 1991 was used to evaluate the downstream
impacts of the reservoir expansion. The model used historical hydrologic information and
available reservoir storage capacity (assuming the expanded reservoir storage was in place) to
estimate flow reductions at the downstream monitoring stations at Paso Robles, Bradley, and
Spreckles. These are the only three locations where gage stations were available to provide
historic information. The model assumed a City demand of 10,000 acre-feet per year, which
is a "worse case" scenario since total City demand at build-out is projected to be 9,096 acre-feet
per year.
Based on the results of the computer model, the avera a flow reduction at the Paso gaging
station, using a scenario of 10,000 acre-feet per year demand, is calculated to be less than one
(.088) percent, with a residual flow past Paso Robles of 54,751 acre-feet. Even in the absolute
worse case year, the maximum flow reduction was estimated to be 10.68 percent. Even with
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this reduction in flow, the flows past Paso Robles would have been in excess of 165,000 acre-
feet.
The analysis and issues discussed above led to the conclusion that potential impacts due to
reduction in downstream flows would be insignificant, but there are still concerns raised by
agencies and individuals in the north county relative to potential impacts to groundwater or
surface water supplies. Additional analysis and discussions with concerned agencies and
individuals may be warranted as part of the update of the draft EIR. Staff has been working
with downstream agencies to gather additional information on the groundwater basin to facilitate
this analysis.
Feasibility
The three major issues which must be addressed prior to implementation of the project are:
certification of the environmental impact report, transfer of ownership from the U.S. Army
Corps of Engineers to a local agency, and resolution of the City's water right permit by the State'
Water Resources Control Board. Each of these issues could potentially prevent the project from
being completed.
As stated earlier, the draft EIR was distributed for comments and many concerns have been
raised relative to impacts to wetlands, oak trees and downstream water users. Additional work
in these areas is necessary and development of detailed mitigation plans will be completed prior
to certification of the EIR. Consultation with regulatory agencies (Fish and Game, Fish and
Wildlife, and the Corps) has been ongoing for the past several months to determine what
mitigation strategies will be acceptable. Mitigation measures could have various levels of
replacement for oaks and wetlands (ie. 1 to 1 replacement, 4 to I replacement, etc.) which will
result in significant differences in costs. The range of costs are outlined later in this report.
The mitigation costs could escalate to the point that the project is not financially feasible. The
EIR could also be litigated by agencies or individuals that are opposed to the expansion project.
It is staff's belief that the City would prevail is such litigation, however it should be avoided if
possible.
The transfer of ownership has a number of hurdles to cross prior to the actual property transfer.
The most difficult obstacle appears to be the approval of the agreement between the City and
the County for property transfer. Language within the agreement to assure that the County does
not "oppose or obstruct" the expansion project has been met with protest from individuals and
agencies who oppose the project. This opposition will make approval by the Board of
Supervisors difficult and will probably extend the timeline.
i
The final major issue involves the City's water right permit for the Salinas Reservoir. The
City's current permit for Salinas Reservoir expired in 1981 and the City requested an extension
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of time to allow for the implementation of the expansion project. A protest was received by the
state to this request during the official protest period (CalSpa protest) and numerous protests
have been filed by north county agencies and individuals following the close of the protest
period. The State Water Resources Control Board will schedule a Board Hearing following
certification of the EIR for the expansion project. The Board will decide whether to grant a time
extension and allow the City to develop the rights to storage of up to 45,000 acre-feet as
currently allowed in our permit or to reduce our permit to the maximum storage that has
occurred in the past (23,843 af). If the City does not diligently pursue the expansion project,
the Board may likely reduce our permitted storage capacity, thereby eliminating the option for
expansion of the reservoir. Even if the City aggressively pursues the expansion project, the
State Board could decide to reduce the City's storage rights to 23,843 acre-feet.
Reliability/Yield
Based on computer analysis using hydrologic information since 1941, it is estimated that the
expanded storage capacity will increase the safe annual yield by 1,650 acre-feet. This is the' .
additional amount of water that can be withdrawn annually even during the worst drought period
since 1941. There is the potential to have a "new" worst case drought which could impact the
safe annual yield figure. Also, changes'in water rights or rulings by the State Board could result
in modifications to our permit conditions which could reduce the yield from the reservoir. This
could happen whether or not the reservoir is expanded. The recent decisions concerning Mono
Lake are an example of changes that can drastically alter water rights.
Timin
An optimistic and conservatively realistic schedule for the major milestones for project
implementation are presented below. It should be noted that schedules developed for this project
in 1990 indicated that construction would have been completed by now.
SALINAS RESERVOIR EXPANSION PROJECT
Milestone Optimistic Realistic
Certification of EIR December 1997 December 1998
State Board Hearing July 1998 June 2000
Ownership Transfer July 1998 June 2000
Begin Construction October 1998 June 2001
Complete Construction January 2000 June 2003
4z
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Cost
The most recent estimates prepared in February 1995 indicate that the range of costs for the
additional studies, regulatory permitting, ownership transfer, implementation of mitigation plans
and final design are between $1.4 and $2.4 million. The actual construction costs are estimated
to range between $6.0 and $8.7 million. The costs for an on-going long-term mitigation
program are currently not included in the above estimates. These costs will be developed
following the development of the detailed mitigation plans. The total estimated cost, excluding
on-going mitigation program is estimated to be $7.4 to $11.1 million. This total cost would
result in a cost per acre foot between $450 to $670. This price range does not include operation
and maintenance costs for delivery or treatment of water.
C. NACIMIENTO WATER SUPPLY PROJECT
The San Luis Obispo County Flood Control and Water Conservation District (FCWCD) has an
entitlement to 17,500 acre-feet (af) of water from Lake Nacimiento. An amount of 1,300 of has
been designated for use around the lake, leaving 16,200 of for the Nacimiento Water Supply
Project. The Nacimiento Water Supply Project involves the construction of an intake structure,
regional water treatment plant, pumping stations, storage facilities, and over fifty miles of
transmission pipelines to deliver Nacimiento water to various agencies in San Luis Obispo
County.
The Nacimiento project will benefit several jurisdictions in San Luis Obispo County. Eighteen
agencies from Paso Robles to Cayucos and south of San Luis Obispo are currently participating
in the Nacimiento project. Once constructed, the project will be operated and maintained by
either the County or an agency formed under a Joint Powers Authority for that specific purpose.
The Nacimiento Participants Advisory Committee (NPAC) has been formed to provide input to
the County and to assist in guiding the work of the consultants. The NPAC is made up of
representatives from each of the participating agencies.
Several preliminary studies have been completed on the Nacimiento project. These studies are
discussed later in this report. The current phase of work involves the preparation of the
Environmental Impact Report (EIR). The EIR consultant is expected to begin work in
September of 1995. Preliminary engineering work will be performed by a separate consultant
to support the preparation of the EIR and to refine project cost estimates. Project management
and coordination between all of the purveyors, agencies, and consultants is being handled for
the County under a separate contract with Boyle Engineering.
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Impacts
There are several significant issues associated with the Nacimiento Water Supply Project. The
Nacimiento project will cause concern over the environment, impacts to downstream entities,
recreational impacts, reliability, water quality, and the question of whether or not multiple
agencies can work together to construct, operate, and maintain the project. The extent and
severity of these impacts will not be fully known until the EIR is completed. These impacts
were identified in early studies and were all determined to be mitigable.
Most of the issues will be addressed in the environmental impact report. Although it is not
expected to be a legitimate water quality issue, public perception of the existence of mercury in
the reservoir may cause concern. Other environmental concerns are likely to surface, including
the export of water from one drainage basin to another and the impacts of constructing a
pipeline, treatment plant, storage tanks, and pump stations.
Property owners and water agencies downstream of Nacimiento will continue to be concerned
about the diversion of historic flows. Residents and businesses around Lake Nacimiento will
continue to be concerned about possible impacts to the recreational aspects of the lake.
These perceptions and concerns will escalate as the project proceeds.
Feasibility
In June of 1992, the FCWCD retained Boyle Engineering Corporation to perform a reliability
assessment, preliminary engineering study, geotechnical evaluation, and environmental
assessment. The final report was published in May of 1994.
The geotechnical evaluation, prepared by Fugro-McClelland (West), revealed no immitigable
barriers that would prevent successful completion of the project. A preliminary environmental
assessment was performed for the 56 mile pipeline corridor by Woodward-Clyde Consultants.
Again, no unmitigable probable impacts were found along the proposed pipeline route.
Large players withdrawing or reducing their allocation request could alter the project
substantially. It is possible that changes in agency participation could even be significant enough
to stall or stop the project from moving forward.
Reliability/Yield
Boyle Engineering's reliability assessment, published in November of 1992, concluded that the
full amount of the.County's entitlement could have been delivered each year (from 1950 to
1990), including the most critical year of the recent drought.
CIt' osan tins oBispo
COUNCIL AGENDA REPORT
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The Preliminary Engineering Evaluation and Environmental Assessment, by Boyle Engineering,
indicated that the Nacimiento project is a viable water supply project. The document lays the
groundwork for the next phase, which includes preliminary design and the environmental impact
report (EIR).
As previously stated, the total yield of the entire Nacimiento project is 17,500 af. With 1,300
of dedicated to uses around the lake, 16,200 of would be available for deliveries to the
subscribers. The City's current allocation request is 3,380 af. This is the amount that has been
determined to meet the needs of the City through General Plan build-out. The figure includes
the 2,000 of Reliability Reserve and assumes no other water supply project will be completed.
The City's allocation request can be adjusted either up or down until such time as final
participation agreements are executed with the County.
Timing
Once the EIR is certified, the project will move to final design, followed by construction.
Preparation of the EIR has just begun. Writing the EIR and responding to comments should take
just over a year. Any additional studies or controversy could extend the process six months to
a year. The EIR is expected to be certified by April of 1997. Final design of the facilities
should take twelve to fourteen months to complete. Construction of the full project is likely to
take twelve to eighteen months. Realistically, water deliveries from the Nacimiento project are
not expected before the year 2000. The current schedule estimates for the completion of the
Nacimiento Project are shown below.
NACIMIENTO WATER SUPPLY PROJECT
Milestone Optimistic Realistic:
Issue Draft EIR November 1996 December 1996
Certification of EIR March 1997 June 1998
Complete Project Design . June 1998 September 1999
Begin Construction September 1998 December 1999
Complete Construction December 1999 June 2001
Cost
The City's participation in the EIR and preliminary design is expected to cost around $265,000.
The City's capital cost for 3,380 afy of Nacimiento is likely to be in the $20,000,000 to
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$25,000,000 range. In addition to the capital costs, the cost to treat Nacimiento water should
also be included. Nacimiento water will be treated at a regional water treatment plant.
Treatment plant operations, maintenance, overhead, and expenses will be distributed
proportionally to all participants. Boyle Engineering has estimated the annual operations and
maintenance costs to be around $325/af. This would bring the total cost of Nacimiento water
to between $900 and $1100 per acre-foot.
III. ALTERNATIVE PROJECTS NOT CURRENTLY BEING PURSUED
The following projects are not currently being pursued by the City but may be viable alternatives .
for Council's consideration.
A. CLOUD SEEDING
The City of San Luis Obispo activated a three year cloud seeding program in January 1991 in
response to the continuing drought and limited surface water supplies at Salinas Reservoir. The
program "targeted" the Salinas and Lopez Reservoir watersheds, and the County of San Luis
Obispo paid their prorata share of the total cost for the cloud seeding program. The City's
participation in the program ended in January 1993, when the Salinas Reservoir filled to capacity
and began spilling.
Evaluations of each year's cloud seeding program were completed following each winter season.
Estimates of increased precipitation ranged from I I% to 14% for Salinas and Lopez Reservoir
watersheds. These were substantial increases and proved to be a cost-effective means of
enhancing runoff during periods when Salinas Reservoir and Lopez Lake water levels are low.
Salinas Reservoir's watershed runoff characteristics are favorable for producing significant runoff
during normal rain seasons. Therefore, cloud seeding is not viewed as an annual program but
as a program that the Council may approve following below normal rainfall years and/or periods
when significant storage volume is available in Salinas Reservoir to capture additional runoff.
Cost
The cost for a full season of cloud seeding (November 1 through April 1) was approximately
$150,000. This was for both Salinas and Lopez watersheds.
R. STATE WATER PROJECT
i
The Coastal Branch, Phase H, of the State Water Project is currently under construction to
provide water deliveries to San Luis Obispo and Santa Barbara Counties. The City of San Luis
cit' of San tuts OBISPO
COUNCIL AGENDA REPORT
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Obispo is not a participant in the State.Water Project. The Coastal Branch, Phase H, will be
a regional water treatment plant and a buried pipeline approximately 102 miles long. It will
transport water from the California Aqueduct from the Phase I terminus near Devil's Den in
Kern County, continue through San Luis Obispo County, and terminate at the Tank 5 site on
Vandenberg Air Force Base in Santa Barbara County. Local water transport facilities, such as
the Chorro Valley Pipeline, will connect to the Coastal Branch pipeline to deliver the water to
the service areas of local water agencies. Water deliveries to San Luis Obispo County are
estimated to be available in November 1996.
The information presented below is for comparison purposes and Council consideration as
potential alternatives to minimize future water rate impacts. If the Council chose to pursue State
Water as an option, although not required, the issue could be presented to the residents as a
ballot measure, perhaps in conjunction with the City Charter amendment restricting the 2,000
of reliability reserve for emergency purposes (not new development).
Background
The County of San Luis Obispo Flood Control and Water Conservation District(District)entered
into a contract in 1963 with the Department of Water Resources for an allocation of 25,000 acre-
feet of water per year from the State Water Project. Since that time the District has been
making payments under the terms of the agreement. Under the terms of the agreement,
payments increased over time since 1963 which recovered the,4ebt service relative to the
District's prorata share of the construction of the conveyance facilities from the Delta to the
point of connection of the Coastal Branch of the California Aqueduct.
For many years prior to 1992, numerous cities, water districts, agricultural interests, and
individuals expressed interest in participating in the project to deliver State Water to the Counties
of San Luis Obispo and Santa Barbara. The City of San Luis Obispo continued to express an
interest in the State Water Project and had requested an entitlement of 3,000 acre-feet per year.
Prior to the City Council's decision to participate in the State Water Project, the Council
requested a special election and placed an advisory ballot measure to receive public input
concerning the City's participation in the State Water Project. The special election had a 30
percent voter turnout. The advisory vote recommended against participation in the project with
3,670 opposed to 2,927 supportive (55.6% to 44.4%). Following the advisory vote, the City
Council approved execution of the agreements for participation in the State Water Project on
April 21, 1992 on a 3-2 vote.
Following this action by the City Council, a petition was circulated and sufficient signatures
obtained for a referendum to overturn the Council's decision to execute the agreements. The
referendum was placed on the November 3, 1992 ballot. The November election had an 81
y�
��!V�II►i►i�Illlli�P° II�IU City of San LUIS OBISp0
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percent voter turnout. The referendum to overturn the Council's decision passed with 11,411
in favor and 9,423 opposed (54.8% to 45.2%).
There were many concerns raised relative to the State Water Project which led to the City
resident's decision not to participate in the project. The issues included reliability concerns,
environmental impacts to the delta, environmental impacts due to pipeline construction, growth
inducement, high costs and water quality concerns and a preference for local supply projects
(Salinas Dam, Water Reuse, and Nacimiento) as lower cost, environmentally superior projects.
The pipeline is currently being constructed and many of these issues are now more clearly
defined or may no longer be valid issues as discussed below:
■ Mitigation strategies for protection of the delta are currently being negotiated
which will ultimately be approved by the State Water Resources Control Board.
These negotiated agreements are being developed with representatives from
agricultural, environmental and urban interests. These agreements will place new
operational constraints on the project. Although the operational constraints will `
impact project deliveries, it will also provide urban interests with a greater degree
of certainty relative to future water planning.
■ The impacts associated with the pipeline construction have been addressed in the
final environmental impact report and subsequent supplements to the document.
■ The potential for significant cost overruns on a project of this magnitude are
always a possibility. In 1992, the costs per acre foot for water delivered to the
City were estimated to range between $500 - $700. Current cost estimates if the
City were a participant would be at the high end of this price range at
approximately $700 per acre foot.
■ The issue of water quality is more of an emotional issue than a technical issue.
The water will be treated at a regional water treatment to meet all state and
federal water quality standards. This level of treatment is not an option but an
solute requirement.
■ The costs and impacts of local water supply projects are now more clearly defined
as identified earlier in this report.
Numerous agencies and individuals decided in 1992 not to participate in the State Water Project.
Although the District had an entitlement of 25,000 acre-feet, only 4,830 acre-feet were actually
contracted for within San Luis Obispo County. There are currently discussions between the
County and several agencies who have contracted for State Water to purchase an additional
1,713 acre-feet of the unallocated water for reliability purposes. This leaves 18,457 acre-feet
city of San LUIS OBISp0
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of unallocated state water which the District is currently negotiating for sale to agencies outside
the County.
The pipeline and water treatment plant are currently under construction and have been designed
based on the contracted water entitlements within San Luis Obispo and Santa Barbara Counties.
Therefore, there is no available capacity in either the delivery system or treatment plant for
additional participants within the two counties; however, as noted above, additional participants
could be accommodated through re-allocations of existing entitlements.
Alternatives
If Council were interested in pursuing options relative to using state water, they may wish W
consider its potential for use as a reliability reserve. The "reliability reserve" or other water
needs, could be presented to a vote of the residents of San Luis Obispo. Although there was
opposition to the project in the past, there are several alternatives which may be supported by
the residents based on the goal of minimizing future water rates. Based on the fact that a large
percentage of the additional water supply needs of the City are for a "reliability reserve" (2,000
acre-feet) which will not be needed except in emergencies, there could be opportunities to
deliver water from other sources through the State's conveyance system.("wheel water") during
these periods. The expense to rate payers for securing the reliability reserve through the
projects currently being pursued could exceed $2,000,000 per year. The alternatives are
conceptual in nature and have not been thoroughly evaluated to determine feasibility, reliability
or actual costs. The following list may not include all of the potential combination of
alternatives.
1. The least costly alternative would likely be to request that the City be allowed to
construct a turnout on the State Water Pipeline for emergency use in the future.
In the event of an emergency, the City would have no water allocation or
treatment/delivery capacity and would have to negotiate a deal with another
downstream State Water contractor for capacity and allocation. This option
would likely not provide the level of reliability that the City desires to adequately
protect our residents.
2. The City could request a connection to the pipeline and immediately negotiate an
agreement with another contractor for use of their allocation and
treatment/delivery capacity during an emergency situation. The allocation could
be from an agency within San Luis Obispo or Santa Barbara County or could be
negotiated with an agency that has other water supplies which could be "wheeled"
through the system. Other water sources could come from agencies or individuals
with large groundwater basins, surface water sources separate from the Delta or
desalination facilities.
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3. The City could request an allocation from the unallocated water which the District
is currently negotiating for sale. This would provide the City with a right to a
certain amount of water but would not provide the City with any right to the
delivery/treatment capacity. An agreement could then be negotiated with a
downstream water agency to utilize their treatment/delivery capacity during an
emergency period. The County is interested in recovering the costs which have
been paid by County residents since 1963 for the remaining unallocated water
supplies. Therefore, the County may require a one time lump sum payment to
purchase an entitlement. It is estimated that this charge would be on the order
of$1,000 - $1,500 per acre foot of entitlement. There would also be an annual
payment of approximately $125 per acre foot until the year 2035. If the City
requested 2,000 acre-feet, the one time lump sum payment would likely be
between $2 and $3 million. The lump sum payment could be debt financed, in
which case the annual debt service cost would be about $200,000 to $300,000.
Under this circumstance, the cost per acre foot would be between $225 and $275.
4. The City could negotiate with a downstream contractor to buy a portion of their
entitlement in the State Water Project. This is likely the most costly alternative
and the negotiating agency would likely try to recoup the full costs which they are
required to pay. Since charges to contractors are based on their prorata share of
the capital costs for the delivery and treatment facilities to their point of
connection to the pipeline, the contractors in Santa Barbara County pay more than
contractors in San Luis Obispo County.
Reliability
Reliability of the State Water Project is a major concern to all participants in the State Water
Project. Some agencies have decided to increase their allocation amount by 100 percent which
would allow the agencies to receive the original contracted amount even if deliveries are cut by
50 percent due to drought or other operational limitations. These agencies are not increasing
their capacity in the Coastal Branch delivery or treatment facilities which are the major ongoing
cost for participants. It should also be noted that during the recent drought when State Water
Project deliveries were drastically reduced, agencies were able to purchase water from a "water
bank" which the state created through negotiations with water contractors that had other sources
of water or who were able to cut back their water needs. While agencies during the drought did
not receive their full allocation from the State Water Project, agencies could purchase additional
water from the drought water bank for between $75 and $150 per acre foot. The drought bank
had more water available than agencies needed. The State Water Project does provide many
opportunities to negotiate water trades or purchases from other areas. Purchased or negotiated
water can then be "wheeled" through the system. While state water is not a guaranteed source
of supply, neither are any other source of water supplies which can be loss due to issues such
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COUNCIL AGENDA REPORT
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as: groundwater contamination, water rights, public trust, legal actions, etc. This ability to
negotiate water trades and "wheel" water may hold significant potential to provide the City the
reliability that we are seeking through the 2,000 acre-feet per year reliability reserve at a much
lower cost.
Timin¢
The Coastal Branch of the State Water Project is currently under construction with deliveries to
San Luis Obispo County expected to begin in November 1996.
Cost
The estimated costs in 1992 for the City of San Luis Obispo were estimated between $500 and
$700 per acre foot. The staff report presented to the City Council on April 21, 1992 estimated
that the cost was approximately $608 per acre foot. The most recent cost estimates are shown
in Figure 1 on the next page. In the vicinity of San Luis Obispo, the total cost per acre foot'
(including operations, maintenance, etc.) is estimated to be $694 per acre foot. If the City were
to pursue one of the alternatives discussed previously, the cost could be less than this amount
or significantly higher depending on which alternative is pursued and the outcome of the
negotiations with other agencies.
C. SALINAS TO WHALE ROCK TRANSFER
The idea of transferring water from Salinas Reservoir to Whale Rock Reservoir was evaluated
by City staff and presented to Council in 1993. The analysis revealed numerous obstacles and
limitations as discussed below. The Council directed staff not to proceed at that time with
further studies relative to the project.
Background
The idea of transferring water, which would otherwise spill downstream, from Salinas Reservoir
to Whale Rock Reservoir has been proposed as a project in the past to meet future City water
demands. Salinas Reservoir spills frequently due to the large drainage area and favorable runoff
characteristics of the surrounding area. In contrast, Whale Rock Reservoir has only spilled six
times since it was constructed and may be able to store water in excess of the natural inflow to
the lake.
Based on an evaluation of historical hydrologic'information, there is the potential to transfer
significant quantities of water which would otherwise overtop the Salinas Dam spillway and flow
downstream. The actual quantity of water that could potentially be transferred annually would
be limited by two major interrelated factors: the conveyance system capacity and the City's
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water demand. As the City's demand.for water increases in the future, the potential water
transfers will be significantly reduced. This will be due to the pipeline from Salinas to the
City's Water Treatment Plant being at maximum capacity. Only the amount of excess capacity
above the City's water demand could be transferred to Whale Rock, assuming no other operating
or system constraints. To avoid this problem would require the installation of a new, dedicated
pipeline and pumping plant(s) from Salinas Dam to Whale Rock Reservoir.
A number of potential obstacles to the implementation of the project have been identified. The
major area of concern relate to a reduction in water quality as a result of water transfers,
specifically as it may impact both the California Men's Colony (CMC) and the Department of
Fish and Game. The potential degradation of water quality would increase the costs to CMC
associated with treatment and may affect their ability to meet Federal and State drinking water
standards. Fish and Game staff have indicated concerns for impacts to the fishery at Whale
Rock due to water quality degradation. Additionally, the project would result in additional
export of Salinas River Basin water to San Luis Obispo and would likely be contested by the
North County.
Additional costly studies would be necessary in order to fully evaluate the feasibility of this
project prior to implementation. Since a number of the obstacles to this project have the
potential to be insurmountable and the City is currently actively pursuing additional water supply
projects (ie. Salinas Reservoir Expansion and Nacimiento), Council directed staff not to proceed
with further studies. Despite the identified difficulties with this project, if other more feasible
projects are not completed, this project may warrant additional investigation.
cost
The costs for delivering water from Salinas to Whale Rock Reservoir have not been determined.
Further feasibility studies and preliminary design would be necessary to fully evaluate the cost
impacts.
D. DESALINATION
Background
In May 1990, the City was faced with the prospect of reaching minimum pool in both of its
surface water supply sources within an 18 to 20 month period. In response to the crisis, the
City embarked on a short term desalination feasibility investigation. The consulting firm of
James Montgomery Engineers was hired to prepare a study which evaluated the various
desalination methods, site options, joint venture opportunities, and financing. The preliminary i
analysis concluded that 3,000 acre-feet per year of desalted water could be provided by using
reverse osmosis technology which was considered the most cost effective technology at that time
y
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to meet the City's needs. The project.capital cost was estimated to be $19.5 million. The
recommendation was based on capital costs, operation and maintenance costs, decommissioning
costs, aesthetics and environmental concerns. Due to the limited time available to site the
facility and build the necessary infrastructure, a tentative agreement with PG&E was reached
to locate the short term facility at the Morro Bay power plant utilizing their seawater intake and
outfall facilities.
The "Miracle March" rains of 1991 provided adequate runoff and subsequently increased water
storage in the City's reservoirs to allow termination of the desalination project. The City
Council officially directed staff to discontinue the project on April 16, 1991.
Future Desalination Project
Using desalted water as a future water supply source will have to be investigated independent
of the past research and study projects. Because the previously discussed desalination endeavor
was planned to be a short term water supply to meet a crisis situation, the cost analysis,`
location, environmental review, and technological information would have to be reevaluated for
a long term project.
Desalination is a viable technology which is not rainfall dependent. This would provide a high
level of reliability for the City. The major disadvantages of desalination are the cost, potential
environmental impacts, and high energy demand. When compared to existing water supplies and
other future water supply options under consideration, desalted water is significantly more
expensive at this point in time. Desalination may be a water supply consideration in the future
if other water supply projects currently under review are not accomplished. Also, advances in
desalination technology in the future may reduce the costs to a more acceptable level when
compared to the cost of other water supply sources.
cost
The cost to construct and operate a desalination facility will vary greatly depending on the
technology used, the site limitations, the availability of intake and outfall facilities, the cost of
energy, etc. In the 1990 feasibility studies the costs were estimated to be between $1,800 and
$2,200 an acre foot. The cost for water from the City of Santa Barbara's desalination plant is
on the order of$1,900 acre foot until the capital costs are paid off.
IV. SUMMARY
The City of San Luis Obispo is currently pursuing three separate water supply projects to meet
current and future water demand: Water Reuse, Salinas Reservoir Expansion, and Nacimiento
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Pipeline. All of these projects have issues and concerns which must be overcome prior to
implementation. Some of the issues which need further analysis include environmental impacts,
water rights issues, regulatory agencies approval, and refined cost estimates.
Staff requests that the City Council reaffirm the current direction being pursued to acquire
additional water supplies for the City of San Luis Obispo. A summary of costs for the water
supply projects currently being pursued, as well as those which the City is not pursuing, are
shown below in Table III.
TABLE III
WATER SUPPLY PROJECTS
October 1995
Potential Total Estimated Per Estimate
Water Supply Project Acre-Foot of Fust
Project in Acre-Feet Cost Cost Water
Per Year Delivery
A. Water Reuse Project 1,233 $9.3 million $6002/. 2000
B. Salinas Reservoir 1,650 $7.4 - 11.1 million $450-670 2003
Expansion Project
(exclusive of
ongoing mitigation)
C. Nacimiento Water 3.380 3/ . $20-25 million $900- 1,100 total .2001
Supply Project (design&construction)1/
(City of SLO)
D. State Water 3,861 3/ n.a. $700 19%
Project
E. Desalination 3,86I 3/ n.a. $1,800-.2,200 2005
i
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1/ The Nacimiento Water Supply and Water Reuse Projects have operating, maintenance and additional treatment costs
that are included in the total cost per acre foot. The Water Reuse and Salinas Reservoir Expansion projects as
currently
proposed can be supported by the current treatment,distribution systems. The capital costs for Nacimiento are only
.the City's share.
2/ Assumes a low interest rate, twenty-year loan through the State Revolving Loan Fund.
3/ Could meet total water supply requirements.
I
I
•r IU AGE"A
DQ ra -? ITEM #
Mayor Allen Settle and Councdmembers Bill Roalman,
David Romero, Kathy Smith, and Dodie Williams October e, 1995
Dear Mayor and Councilmembers:
I am alternately pleased and alarmed by the reports I hear and read regarding the development of
future water resources for our city- specifically,the negotiations being carried on with north
county officials regarding the expansion of Salinas Reservoir and/or tapping Nacimiento.
This letter breaks the cardinal rule of keeping communications short, but please allow me to offer
several suggestions based on the rather long experience I have had and continue to have with
water affairs.
i TheCounMaster Plan for Water
What is missing in the reports I have read is any reference to the County's Master Plan for Water.
I would hope that Mayor Settle and Councilman Romero(and the entire council for that matter)
would develop some familiarity with both the original Master Plan as well as the 1986 update.
Those Plans describe the various water projects in the county, State Water,Nacimiento, Jack
Creek, Santa Rita Creek, Santa Rosa Creek and others. I would urge you to look at the maps
contained in the original master plan as they make it easy to visualize how the water contractors
throughout the county might tie into the various projects in the most economical manner.
Then understand the order in which the various projects were ranked in the Master Plan. It is
also of interest to note the dates when the various new projects were expected to come on lime
based on projected population growth in the county. One of the major changes made between the
original plan and the 1986 update is the ranking of the Nacimiento and State Projects. The
original had Nacimiento first and State Water second;the 1986 update reversed these ranking's
placing State first and Nacimiento second.
It would also be well to know that in 1972 (or thereabouts)a district was proposed to finance the
building of a Nacimiento Project. The proposed district included the north county, Morro Bay,
Los Osos-Baywood Park. San Luis Obispo declined to join believing that the State Water Project
was the most advantageous;the south county also declined to join. The popular vote required to
form the district failed due to a lack of a plurality in Los Osos-Baywood Park.
County engineering staff designed another Nacimiento distribution system which would have
brought a different set of contractors together,but that design essentially died for lack of interest.
2. Ground Water Basins
I also urge you to become familiar with the locations and sizes of the various underground water
Page 2
basins in the county, particularly those in the north county. The so-called Paso Robles basin
covers 640 square miles and underlies Paso Robles,the majority of Templeton and a goodly part
ofAtascadero. These communities rely solely on well water. This basin's capacity is enormous,
yet the best estimates of its replacement flow is somewhere around 47,00 acre feet per year.
Interestingly, 88,000 afy is currently being extracted. Even so the water table is only dropping
one foot per year.
You need to appreciate that the capacity of this basin and the low cost of well water are
considerable forces that shape the bargaining position of the north county communities in their
deliberations with SLO. No north county community receives water impounded by a dam and
transported by an aqueduct system If the Nacimiento project is to move ahead, the Paso Robles
City Council, Community Service Districts and Mutual Water Company Boards of Directors who
elect to contract for an allocation may have an very tough time "selling" the project to their
customers in light of the cost differences between well water and Nacimiento water. Should a
bond election fail in the north county, what then will be SLO's options?
San Luis Obispo, as we long suspected and the recent drought proved out, does not sit on a
ground water basin worth talking about- I seem to recall,that the final figures on sustained yield
of our basin was 500 afy. That's a far cry from 47,000 afy enjoyed by our northern neighbors.
There are some serious water issues in some parts of the south county. Conceivably, some south
county contractors might wish to tie in with Nacimiento albeit the price will be very,very high.
For San Luis Obispo, surface water sources are critical. That we have allowed our population to
out-run our supply(based on a seven year drought)has serious implications on our need to
resolve this supply issue fairly quickly.
3. Water Contractors
It would also be well to understand who furnishes water to water users. In SLO and Paso Robles
water is a municipal utility service. There are other systems. In Templeton, water is firrnished by
a Community Service District, in Atascadero, its a mutual water company. Each water supplier
has its own agenda Municipal water systems are normally run as nonprofit utilities and
community growth management issues are all tied together by one controlling entity- the city
council. Not so with, say, private water companies.
Private water companies are in the business ofselling_waterfor proms They are controlled by
private parties who often times can be at odds with the authority making land use decisions- be it
a city council or the Board of Supervisors. Because private water companies are just that,
private,their pumping records are tightly held and the impact of their pumping on a ground water
Page 3
basin is not of public record.
Just how much water is being extracted by private land owners and by private water companiesmi
the Salinas River basin is not known. As more is pumped, are the operators of the Salinas
Reservoir obligated to release ever increasing amounts of water to fill the basin? If so, the safe
annual yield of the reservoir will steadily diminish forcing SLO to look for still another source.
I add this as an interesting side note. Until just a year or so ago, little Cayucos had three entities
providing water;now it has only two. And Los Osos- Baywood is equally crazy, it has a County
Services District and a private water company. A for profit water company usually doesn't care
beans about how much water it extracts even when it knows the supply is limited or, as in
Baywood,the supply is subject to salt water intrusion. (Water conservation is usually not
practiced,witness the excessive use of water in the Country Club Estates during SLO's recent
drought.)
But Los Osos- Baywood is not north county. The point is that our "negotiators"need to arm
themselves with knowledge about supply, supply capacity, system of delivery and what the
differing agendas may be ofthe water suppliers.
4 The 'Live Stream' Concept and Operational Implications
For many years after San Luis Obispo began receiving Salinas Reservoir water,water releases
from the dam were managed by the county(who "operates" the reservoir)to maximize water
storage in the reservoir. That is to say,water was not released downstream until the reservoir
was full. In rain short years that meant that no water might be released. The north county
riparian users understandably objected and applied to the State Water Resources Board for a
change in this operating policy. This occurred in the early 1970's.
The "live stream" operation concept was ordered by the WRB. Simply stated, no water could be
impounded in the reservoir until a live stream could be observed from the face of the dam to the
Monterey County line. The quantity of water entering the reservoir had to be released to the
river. Now the situation is reversed. In rain short years, conceivably,no water could be
impounded and SLO would be dependent on water reserves within the reservoir collected in prior
"wet"years.
The implications of this WRB order were/are several-fold. The early concern was that records of
flow into the reservoir spanned such a short period of time statistically that SLO was unable to
accurately predict its safe annual yield. (Time has now improved predictions.) Another
implication was that this order should apply to all tributaries to the Salinas River from the face of
Page 4
the dam to the Monterey County line because any obstruction(e.g. dam) on any tributary
diminished water flow that would contribute to establishing the live stream at the earliest possible
moment and allow closing of the reservoir's release gates for SLO to collect water.
It now fell to SLO to contest the construction of g dam which would retain water that might
contribute to the flow to create a "live stream" in the Salinas river. (I believe SLO still does this
today.) But at that time, we discovered that there existed numerous illegal stock ponds on these
tributary streams. The owners of these stock ponds had never applied for or received a WRB
permit. It was to SLO's advantage to have these removed, or at best brought before the WRB to
order to have them properly regulated/operated. Before we could have our day in court, so to
speak,then State Assemblyman Robert Nimmo introduced a bill into the State Legislature to
"grandfather" these existing stock ponds. The bill passed resulting in a diminution in stream
contibutions to the live stream The result of this bill and the continued contesting of new
applications has not made for the best of relations on either side of the grade.
5. Agricultural Water Supplies
I now chair the SLO County Planning Commission. We have just concluded the sixth public
hearing on a comprehensive update of the county's Open Space Plan now to be known as the
"Agriculture & Oaen Space Element." This is a very interesting document initially written by the
County's Agricultural Liaison Board as directed by the then Board of Supervisors. Of special
interest is proposed Agriculture Policy 12. It reads, in part:
* "Maintain groundwater resources in the county for irrigated cropland uses; expanding urban
development should rely primarily on reservoir and imported water sources where available.
* Do not approve proposed general plan amendments that result in increased density or urban
expansion if subsequent development would adversely affect groundwater supplies or
recharge areas needed for existing or expanded agricultural uses on land designated
agriculture."
It seems to me that this proposed policy, if recommended by the Planning Commission and
adopted by the Board of Supervisors,will have serious consequences no all cities/uban areas in
SLO County.
In addition,the SLO County Water Resources Advisory Committee in 1990 made some
recommendations to the Board of Supervisors on how to accomplish specific groundwater basin
objectives. These recommendations are contained in the attached report titled: "Summary and
General Recommendations/ Groundwater Basin"
I would hope that our negotiators will develop some understanding of the implications of the
Page 6
politics of these polices and they continue their work with north county representatives. The
influence of the agricultural community is considerable and their concerns are very real. No cheap
water sources,no significant agriculture.
In my view,the time has come for ground water ajudication. The implications are profound.
inc ,
Kenneth E. Schwartz
201 Buena Vista
an Luis Obispo, CA 93405
Related Bio:
During my 1969-79 tenure as mayor I represented our city on the County Water Resources
Advisory Board and chaired the Whale Rock Commission. I was a member ofthe 1981-82 Grand
Jury who took on as a major task a study of the County's Master Plan for Water and made the
recommendations that resulted in a comprehensive revision of that plan in 1986. I have served on
the County Planning Commission since January 1989 during which time the Planning Commission
held hearings and made recommendations which led to the adoption of a Resources Management
System of which water is a key component. Water use is an important component on most every
development plan issue before the PC.
qMM MO Mill 'IMe;0 00F 0M_ WA fpr
Summary and General Recommendations / Groundwater Basins
The current drought has come at a time when extraction of
groundwater in San Luis Obispo County was approaching or
exceeding the basins' dependable yield. Where surface water is
available, most communities are using 100% of their allotments
and are supplementing their supplies with groundwater. When the
rains finally come again, it will be tempting to proclaim the end
of the drought and to return to consumption-as-usual. However,
to do that is to ignore the fact that San Luis Obispo County has
passed into an era in which water conservation and reclamation
must become the norm and allocation decisions may have unpleasant
consequences for some groups of consumers.
A serious committment to intensify the discussion of a
comprehensive, county-wide water resources management system
would seem to be in order at this time. The goals of such a
system would be to allocate the available supplies of
groundwater, surface water and imported water among agricultural,
municipal and industrial consumers throughout the county, in
rural areas as well as in communities, and to monitor
consumption, ensuring that allocated amounts are not exceeded.
Where groundwater basins underlie adjacent counties,
intergovernmental agreements of some sort would be necessary.
Some specific objectives might include:
1. Rational Allocation. Work toward the achievement of an
allocation system in which, under normal conditions, agricultural
use has priority for groundwater, with expanded urban uses
typically being supplied by surface water.
2 . Balance Acrricultural Consumption and Groundwater Supply. Work
toward reducing agricultural consumption to no more than
the dependable supply from groundwater sources. This can be
accomplished through a combination of appropriate crop selection,
employment of conservation methods and phased retirement of some
marginal agricultural land from production.
3 . Supplemental Water. Encourage communities to develop
supplemental surface water supplies (desalination and Lake
Nacimiento water, for example) , and to stabilize or reduce their
use of groundwater as alternative supplies become available.
4. Private Wells. Address the issue of the drilling and
monitoring of new private wells, particularly in groundwater
basins where demand already equals or is greater than dependable
supply.
5. Environmental Impacts. Consider the impacts of groundwater
extraction on riparian underflow and on the environmental
characteristics of coastal streams and other natural
watercourses.
6. Regional Cooperation. The groundwater management effort
should include incorporated cities, community services districts,
private water companies and all others who extract water from the
county's groundwater basins. (This report focuses on water use
for the unincorporated portions of the county, since the cities
have not yet been formally included in the Resource Management
System. The Board of Supervisors has authorized the expansion of
the RMS Task Force to include the cities and special districts.
This expanded committee will participate in the production of the
next Annual Resource Summary Report. )
7. Implementation. Direct the Water Resources Advisory Committee
to make recommendations as to how these objectives might be
accomplished. The Committee must consider ways of
dealing with the legal obstacles to regional water management.
The current status of state water law is such that the county as
a political jurisdiction does not possess the legal authority to
implement measures which would achieve the desired objectives.
For example, the county cannot enact or enforce a mandatory
allocation formula or modify the rights of property owners whose
land overlies an aquifer. The legal situation probably means
that the first efforts toward comprehensive water management will
be voluntary.
These are not new ideas. For example, the 1986 San Luis Obispo
Master Water Plan Update included, among others, the following
conclusions and recommendations:
"The ground water resources of the county usually offer the
most economical option among alternative supplies. They
should be protected and used. "
"overdrafting of the basins needs to be managed and
controlled by local agencies in such a way that the economic
value of the resources is not impaired. "
"Develop specific ground water management plans for the Paso
Robles, Edna Valley, Los Osos, Arroyo Grande, San Simeon and
Santa Rosa groundwater basins. "
"Overdraft in (the Paso Robles) basin does not pose critical
problems at this time. However, future management plans
must recognize and address the overdrafting. "
"Create a Water Management Advisory committee. . .to assist
in the implementation and periodic updating of the Master
Water Plan. "
Additionally, the county's Water Conservation Policy, adopted by
the Board of Supervisors in March, 1990 contains the following
recommendation:
"It is recommended that the County pursue groundwater
allocation and management agreements within each impacted
basin, as an alternative either to adjudication or to the
'business as usual ' practices that result in overdrafting
and continued, one-sided competition between urban, rural
residential, and agricultural users. "
I TING " �� AGENDA _x -
DA t E.���ITEM # f ff�OACD D IR
ARE CHIEFTO: San Luis ObispoCity Council P PWDIRJohn Moss, Utilities Director POUCECHIP❑ EIEC DfRGary Henderson, Water Division Manager pUTILDIRRon Munds, Water Conservation ' PERSDIR
FROM: Pat Veesart
DATE: 2 October, 1995
SUBJECT: Water Supply Study Session/Urban Water Management Plan
I hate to keep beating a dead horse, but if staff can re-open the discussion on State Water,
I can re-open the discussion on the planning use rate the city has adopted. Staff indicates
that we need 3861 acre feet (of) of additional water to meet our build-out needs based on
a planning figure of 145 gallons per person per day (gppd). If we were to adopt a planning
rate based on reality instead of conjecture, we could significantly reduce our need for
additional water. These are actual use figures for some Central Coast cities for 1993:
San Luis Obispo - 103 gppd
Morro Bay - 125 gppd
Monterey - 117 gppd
Santa Cruz - 105 gppd
Santa Barbara - 104 gppd
I understand that San Luis Obispo's use for 1994 was around 103 or 104 gppd.
If the council instead chose to use 115 gppd as a planning figure, the city's need to service
the water needs of the population at build-out would be as follows:
115 gppd x 365 days x 56,000 pop _ 325,829 gal/af = 7,214 of
Projected Water Demand 7,214 of
Reliability Reserve 2,000 of
Total Water Requirement (at build-out) 9,214 of
Safe Annual Yield 7,735 of
Siltation Reserve -500 of
Safe Annual Yield (at build-out) 7,235 of
Potential Water Through Reclamation 1 ,000 of
New Water Supply Requirements 979 of
2
979 of is a lot different than 3861 of and still includes a reliability reserve for safety. 115
gppd is not an unreasonable or unreachable number. It is significantly more than what our
current per capita usage is and reflects the conservation habits learned during the drought.
Conservation is by far the cheapest way to address our water needs and has the least
environmental impacts. I urge you to take another look at the 145 gppd planning figure and
lower it to a more reasonable level. The environmental and fiscal benefits to city residents
should be obvious.
As I mentioned earlier, staff has re-opened the discussion on State Water by including it in
the October 3rd Council Report as an " alternative project not currently being pursued"
(italics mine). Simply stated, State Water is not an option. Not now. Not in the future. I'm not
sure exactly what it takes to get that through some people's thick skulls. City voters have
rejected State Water twice. It is insulting that State Water is included in this discussion and
that city revenues are being spent to pursue something so clearly rejected. The people of
San Luis Obispo want local control of their water sources and they do not trust the State to
follow through on, what have been in the past, hollow promises.
There is much interest from the North County in our water supply these days. Suddenly every
"rancher", "farmer", and developer in the North County is an environmentalist. They do a
credible job of singing the song when it suits their interests, but just what are those interests?
As usual, the "bottom line" is really money and not birds and trees. The good people from the
North County are worried that if San Luis Obispo develops additional water from the Salinas
Dam expansion, our participation in the Nacimiento Project will be greatly reduced or, maybe
(shudder), even cancelled. This will leave North County residents footing the entire bill for a
project that will mostly benefit development interests.
And speaking of development interests, it's obvious that having a regional treatment facility
near Lake Nacimiento and shipping treated water will benefit every developer, large and
small, between there and San Luis Obispo. Why not get the ratepayers from the entire region
to foot the bill for treatment so that every yahoo with 40 acres to develop has to do nothing
more than turn, on the tap? Talk about encouraging urban sprawl... And of course San Luis
Obispo residents can subsidize rural growth in the North County on top of paying for their
own treatment plant that already has the capacity (because we planned for it) to treat
Nacimiento water. Regional cooperation indeed. San Luis Obispo should insist that each
agency participating in the project be responsible for treating their own water. This will cut
out some of the "paper water companies", encourage growth to occur in a planned fashion,
and cut costs for city residents.
If the Council is really going to move ahead with its extravagant plan for new water sources
instead of pursuing conservation, then care should be taken to insure that new water is
3
procured in the least environmentally damaging way. At this time, and without having a
completed EIR for Nacimiento, it appears that Nacimiento would be the least damaging way
for the city to meet its future water needs. Really, you should be waiting to see the EIR for
Nacimiento before any final decisions are made and great care should be taken by all the
participating agencies to design the most environmentally sound project possible. The way to
make this project sail through with the least friction would be to address the concerns of the
environmental community from the outset.
I am worried about the trees and birds. The wetland/willow habitat that will be flooded by
the Salinas Dam expansion is a jewel that needs to be preserved. The diversity of wildlife that
depends on that habitat is amazing. I don't know if any councilmembers have actually hiked
the back way into Margarita Lake and seen this county park, but they should before they
make any decisions concerning it. It can be argued that this wetland is man-made and that a
new one will be created when the water rises, but how long will that take and where will all
the wildlife go in the interim? Since the Salinas Dam was built in the forties, we have seen
tremendous loss of natural wetland habitat in this state. We can ill afford to lose more, man-
made or not. If, as seems likely, San Luis Obispo is going to participate in the Nacimiento
project, let's get all the water we need from that project and not destroy mature oaks and
Digger Pines or wetlands.
Just a final comment on this North vs South "water war" that the press and North County
developers seem intent on creating. Everybody in the county comes to San Luis Obispo to
work, shop, for entertainment, for business, or for government services. Our daytime
population is almost double our nighttime population. All those people use water when they
are here and the city supplies that water from whatever source it can. If the North County
truly wants to claim that all the water north of the grade is theirs, then I suggest that they
bring drinking water the next time they come to town and that they wait to pee until they get
home.
Thank you for your time,
P t Veesart
1446 Morro Street
San Luis Obispo, 93,401
cc: Geof Land, ECOSLO
MNG AGENDA At
� r N�� DATE ' ' ITEM #_1--
WATER RESOURCES .�
SOUP B. SWANK TERRIE BARLOW
619/360.5286 619/346-0696
619M 5-0121 909/204287?
October 3 , 1995_
pUNCIL ❑ CD!ulR
p ❑ FIN DIA
VRERKJOnIc
AD ❑ FIRE CHIEF[IHon. Alan K. Settle, Mayor pANEY PWDIR
City of San Luis Obispo [3 POLICE CHF
990 Palm Street ❑ MGMT;EAM ❑ C DIR
San Luis Obispo, Ca . 93401 [3CR F;x �dUTILD!R
Re: Water ResoUrCeFz_L� f "Resources" ) Proposal
Dear Mayor Settle:
we are pleased to advise you that Resources is now
prepared to open conceptual negotiations to supply potable water to
the City of San Luis Obispo (the "City") on the fallowing terms and
conditions:
1 . Parties to Agreement -
( a) Purchaser - the City.
i
(b) Seller - Resources .
2 . Term of Agreement - in perpetuity.
3 . Subject of Agreement - potable water.
4 . Quantity - initially 51000 acre feet per annum with the
capacity to increase volume over time to 20,000 acre feet per
annum.
5. Price - between $600 and $800 per acre foot (together
with cost of living index increases) subject to the volume of water
purchased and the location of the delivery point or points .
6. Payment Terms - monthly on an "as delivered" basis
(measured gallonage times gallonage rate) subject to quarterly
adjustment and settlement.
7 . Delivery - through the Chevron and other rights of way tO
a mutually agreeable delivery point or points with Resources
bearing all costs to the point or points of. delivery.
8 . Quality - no leas than state Health Department Standards .
P.O. Br)x 11379 0 PA(M p;Sf RT, CA • 9?255
9. Source engineering - Resource will provide to the City
the geological information and legal opinion supporting Rosource's
approprative rights and ability to sustain deliverability of a
minimum of 5 ,000 acre feet per annum of potable water without
negative effect on surrounding or adjacent landowners or negative
environmental impact.
lo. Commencement of Delivery - within 180 days following
receipt by Resources of all permits, easements and rights of way
and the execution of a definitive agreement with the City upon the
terms and conditions set forth above or such other terms and
conditions as shall be acceptable to both the City and Resources .
we look forward to meeting with your staff at their
earliest convenience to pursue the implementation of the within
proposal .
It would be our intention to leave the meeting with a
letter from the City indicating the City's interest in, support for
and intention to go forward with the project. This letter would be
a non-binding letter of interest and would enable Resources to
proceed with the finalization of information needed by the City in
order to enter into good faith negotiations with Resources for a
definitive sales agreement.
If you have any questions with respect to this matter,
please communicate with the undersigned at your earliest
convenience.
Very truly yours,
John .B. Swank
JBS:tt