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HomeMy WebLinkAbout05/14/2002, 2 - WATER SUPPLY RELIABILITY RESERVE I i council j aGEnaa RepoRt 2 CITY O F SAN LUIS O B I S P O FROM: John Moss, Utilities Director Prepared By: Gary W. Henderson; Water Division Manager SUBJECT: WATER SUPPLY RELIABILITY RESERVE CAO RECOMMENDATION Consider the modification or elimination of Policy 4.0 of the Water Management Element relative to the reliability reserve. REPORT IN BRIEF The cost implications associated with the policy to develop a 2,000 acre foot (af) reliability reserve were recently discussed during Council's adoption of revised water impact fees on March 12 and April 2, 2002. In addition; the per capita use (145 gallons per person per day) figure was also discussed since the figure directly impacts the amount of water that the City needs to develop to meet General Plan build-out. These two related issues drive the amount of water that the City needs to develop, and have potentially significant fiscal and other related impacts. The reliability reserve was first proposed in 1990, prior to the end of the most significant drought period experienced by the City during the historical record from 1944 to present. At the time of Council adoption of the policy, there was no analysis of the value of.the reserve (level of protection provided) or the long-term fiscal impacts. The recent analysis undertaken to answer these questions revealed the following key points: 1. The estimated_ cost for developing additional water supply projects has increased by almost 3 times, which would result in an annual cost of $3.1 million for the 2,000 of reliability reserve. (Page 3 of the report) 2. The issues associated with developing one or more water supply projects to provide for the reserve include environmental impacts as well as fiscal impacts. (Page 3) 3. Since approximately 80% of the reserve would be for existing water customers, it is estimated that a 21% rate increase (or higher if project costs increase in future) would be necessary in the future to fund the reserve. (Page 3) 4. The reliability reserve would at best provide 12 months of additional water supply during drought conditions. To achieve the additional 12 months would also require the City to use the 2,000 of from the new water supply source each year and "bank" water (i.e. reduce amount taken from) in Salinas and Whale Rock Reservoirs. (Page 4) Council Agenda Report—Water Supply Reliability Reserve Page 2 5. Other than the 1986-91 drought, there is no other drought period since 1944 that would have required use of the reliability reserve. (Page 4) 6. The City's adopted Water Shortage Contingency Plan and the difference between actual water use and the water use factor of 145 gpcd provide a level of protection for future water shortage periods which is roughly equivalent to that provided by the reserve. (Page 5) With the significant cost implications, relatively low level of protection and limited number of times when the reserve would have been necessary, staff recommends that the Council consider elimination of the policy for developing a 2,000 of reliability reserve. Staff would recommend maintaining the 145 gpcd planning figure to provide the buffer for water planning purposes. The actual water use has remained well below the 145 figure and has been accomplished by the water conservation awareness and water efficient hardware retrofits that the community has accomplished. This buffer has already been achieved by our customers and would not require any rate increases associated with the reliability reserve, which were noted above. DISCUSSION On March 12 and April 2 of 2002, the Council discussed and adopted revised water impact fees based on the improvements identified in the Water System Master Plan and updated costs associated with new water supply projects. As discussed at these Council meetings, two factors that have a significant impact on the amount of water that the City needs to develop are the "reliability reserve" and the adopted "water use" figure of 145 gallons per person per day (gpcd). This report will discuss these two interrelated issues and potential modifications that Council may consider. Since these policies are included in the Water Management Element of the General Plan, any modifications will require public hearings before the Planning Commission prior to hearings before the City Council for adoption. Reliability Reserve Why was the reliability reserve originally established? To address the problems associated with determining safe annual yield and unexpected conditions affecting the safe annual yield. The idea of establishing a water supply reserve first came forward during the drought period which began in 1986 and ended in March of 1991. At the Council's request on April 2, 2002, staff researched information from this earlier time period to determine the reasons and justification for the 2,000 acre foot reserve figure. The first reference to the reserve was identified in a November 27, 1990 staff report titled "Water Supply Status and Development". This report covered numerous water supply projects being pursued at the time in light of the severe drought that the City was experiencing. One paragraph in the report discusses the reserve (which was originally referred to as a "planning reserve") and the full text is shown below: "The City has experienced problems with safe annual yield determinations in the past. Changes may occur in the future due to "live stream" requirements, new hydrological data based on the current drought, and changes in water rights law, etc. For these 2-2 Council Agenda Report—Water Supply Reliability Reserve Page 3 reasons, it is prudent to have a planning reserve of additional water supplies to account for future unexpected conditions. Staff recommends the City develop an additional 25% increase, or about 2,000 of of its safe annual yield as a planning reserve." As far as staff can determine, there was no technical basis (i.e. it would provide an additional X years of water supply through the worst drought) for the 2,000 acre foot figure. It should be noted that this goal was identified prior to the end of the drought. Following the end of the drought, staff updated the City's safe annual yield computer model to include this new drought period which resulted in a reduction of the projected safe annual yield that is available through the coordinated operation of Salinas and Whale Rock Reservoirs. The City's current water availability is based on this revised safe annual yield analysis and also includes estimated reductions due to siltation at both reservoirs. Following numerous public hearings, the City Council adopted the City's Urban Water Management Plan (UWMP) on November 15, 1994. Policy 2.4 which identified the desire to develop a reliability reserve is shown below: "In seeking and accounting for new water supplies, the City will strive for a "reliability reserve" of 2,000 acre-feet safe annual yield(about 20 percent of projected future water demand at full build-out)." At the time that Policy 2.4 was adopted, the Salinas Reservoir Expansion Project costs were estimated to provide additional water supplies in the range of$500 to $600 per acre foot. These costs are approximately one-third the current cost estimates for additional water from the Nacimiento Project. The cost for the 2,000 of reliability reserve has increased from $1 million per year to$3.1 million. What issues have changed since the policy for a reserve was originally envisioned by the City Council? The City has revised (lowered) the safe annual yield estimates for Salinas and Whale Rock Reservoirs based on the 1986-91 drought period. In addition, the estimated cost for additional water supply projects has nearly tripled (and may be higher in the future). The policy for the reserve was made without an analysis of the value of the reserve (level of protection provided) or the cost impacts (currently projected at $3.1 million per year for the reserve). What are the implications associated with developing the reliability reserve? The issues include environmental considerations, multiple projects being pursued, and fiscal impacts. The 2,000 acre foot reliability reserve represents approximately 53% of the additional water supplies currently being pursued to meet the policy and build-out water demands of the City. The development of additional water supplies, depending on the source, will have,some level of environmental impact associated with the project. With the large amount of additional water supplies currently being pursued, multiple projects may be necessary to develop the projected amounts. In addition, as discussed in detail at the March 12, 2002 Council meeting, the reliability reserve will have significant cost implications to both existing water customers as well 3 Council Agenda Report—Water Supply Reliability Reserve Page 4 as new development. Since approximately 80% of the reserve is to serve existing customers, it is currently estimated that a rate increase of approximately 21% would be necessary to pay for existing customers portion of the reliability reserve. The other 20% of the costs for the reliability reserve are included in the revised water impact fees for new development which were adopted on April 2, 2002 (new fees take affect on July 1, 2002). If the Council chooses to reduce or eliminate the reliability reserve, the projected 21% water rate increase for existing customers would be reduced or eliminated. In addition, the water impact fees for new development would be reduced slightly associated with the elimination of their share (20%) of the reliability reserve. What level of protection does the 2,000 acre foot reliability reserve provide to the community if it were obtained? The reserve could provide up to an additional 12 months of water supply during water shortage period as discussed in more detail below. The level of protection that the reliability reserve would provide has never been clearly analyzed or evaluated. Opinions throughout the community relative to what the reserve should provide would likely range from "it would never require the community to enter mandatory rationing again" to"it will provide a buffer for a non-rainy day". In an attempt to answer this question, staff used the computer model that was developed to analyze the safe annual yield available from Salinas and Whale Rock Reservoirs to run various scenarios if the 2,000 acre foot (af) supply had been available to the City for the past 56 years. The computer model uses historical data from 1944 to 2000 and various assumptions to estimate what level of protection the reserve could have provided over this time period. The analysis revealed that if 2,000 acre foot had been available each year during the recent drought (1986-91) and assuming the City demand was equal to the current safe annual yield from the two lakes, the City would have approximately 10 to 12 months of additional water supplies at the end of the critical drought period. Attachment 1 and 2 graphically show the model projections of water supplies in the reservoirs with and without the reserve (Scenario 1 is without use of reserve). This assumes that the 2,000 of would be used every year during the drought period. Since no one can be sure when the beginning of the next critical drought would occur, the City would need to utilize the 2,000 of every year (under this scenario) which reduces the amount that is taken from Whale Rock and Salinas Reservoirs. This essentially "banks" some water in the two existing lakes. Staff also analyzed other Table 1: Reliability Reserve Levels of Protection scenarios to determine the level of protection Reserve Used During Extension of Available Water Supplies provided if the 2,000 acre Last 3 Years 6-7 months foot reserve were used Last 2 Years 5-6 months during the last 3 years of Last Year 4-5 months the drought, 2 years of the drought, etc. as shown in Table 1. I 1 Council Agenda Report-Water Supply Reliability Reserve Page 5 Would the City have needed to use the reserve other than during the 1986-91 drought? The short answer is,NO. Staff simulated using the 2,000 of in the computer model only during the controlling drought period from 1986 through March of 1991. The analysis indicates that at the end of this drought period,the City would have had approximately 7,500 of in Whale Rock Reservoir(approximately 10-12 months supply). Since the computer model goes back to 1944, the results were evaluated to determine whether there was another drought period when there would have been less than 7,500 of without the use of the 2,000 af. The results indicate that there would have been one other drought period that approached this amount without the use of the reserve. This indicates that the drought period of 1986-91 was a very significant, critical drought period surpassing any other drought period during the last 56 years as it affects the City's water supply sources. In summary,the analysis would indicate that the City would not have needed to use the reliability reserve for any period except the controlling drought in the last 56 years. At today's estimated cost, this equates to an annual $3.1 million insurance policy that may be needed infrequently and only buys an additional year's worth of water, at best. If the reserve is reduced or eliminated, what other measures are available which can provide protection to the City in future droughts? The City's adopted Water Shortage Contingency Plan and the difference between the actual water use and the 145 gpcd planning figure. The adopted Water Shortage Contingency Plan was not included in the analysis of the scenarios discussed above. The Water Shortage Contingency Plan has three action levels that are triggered when water supplies are projected to last 3 years or less. Implementation and achievement of the identified water reductions during these events will extend available supplies from 9 to 12 months, depending on the City's water demand in the future. More importantly, the second safety factor (discussed in more detail in the following sections of this report) is the difference between the water use factor used for planning purposes of 145 gpcd versus the actual water use. The goal is to continue to keep the overall community per capita use rate well below the 145 figure. If the figure over the long-term can be maintained around 125 to 130 gpcd,this would represent a buffer of approximately 10 to 15%. An additional area for consideration which may provide a certain level of protection would be working with other agencies in the. County to develop "mutual aid" type agreements to share water resources during emergency periods. Cooperative use of the City of Morro Bay's desalination facility (or expanded facility) could be an example of one such alternative. If the Council decided to eliminate the reliability reserve, would the City Charter need to be amended? The short answer is, Yes, for consistency purposes but not to adopt the change in policy. In the November 1996 election, Measure P was placed on the ballot relative to the reliability reserve. The voters approved the Charter amendment which added Section 909 as shown below: "As identified in the Water Management Element of the General Plan, the City shall strive to acquire additional water supplies as a "reliability reserve" to protect the City �-5 Council Agenda Report—Water Supply Reliability Reserve Page 6 from future water shortages. Once the City has acquired a portion or all of the reliability reserve, the additional water supply shall only be used to meet City needs during unpredictable changes such as a new worst case drought, loss of one of the City's sources, contamination of a source, or failure of a new source to provide projected yield, and not to allow additional development." ' The language above notes that the Water Management Element (WME) policy indicates that the City shall strive to acquire a reliability reserve. This does not mandate that the City develop the reserve, or how the City develops or achieves the equivalence of the reserve, but the reason the City Council placed the language on the ballot was to insure that if additional supplies were developed, it would not be used in the future for additional growth. The concern was that a future Council, on a 3 to 2 vote, could change the policy. If the Council decides to eliminate the reliability reserve policy, a Charter amendment should be undertaken to delete Section 909. Staff does not believe that a Charter amendment is required for the Council to eliminate the reserve policy in the WME but rather, to ensure consistency between the WME of the General Plan and the City Charter. 145 gpcd Water Use Figure The "water use" figure adopted Graph 1: Per Capita Use in the WME received significant 200 CO r °N° "' r r discussion during the A �, development of the UWMP. 0 150 °r° w r r °r° Graph 1 shows the historic per ; 100 m CD r T capita water use since 1985. The a drastic reduction in the per capita o 50 water use during the drought was achieved through public 0 0 education and awareness, C) CO rn rn M M 0) CD c monetary penalties and related T T '- Year measures. Following the drought, it was acknowledged that these extremely low rates could not be maintained over the long-term and that there is a certain level of water needed to provide a reasonable quality of life for residents, which includes water for landscaping and gardens. It was also acknowledged that conservation .is likely the least expensive source of additional water when compared to developing new water supply sources, which it has proven to be. While per capita use increased following the end of the drought up to 1997, the use appears to have stabilized over the past several years. A number of factors can impact the per capita use rate including, timing of yearly rainfall and the amount, population figure estimates from the State which can fluctuate, and retrofitting that has been an ongoing requirement for new development since 1989. It should be acknowledged that new development has been required to retrofit to not only offset their expected use but at twice the estimated use (i.e. 2 to 1). The . mandatory retrofit requirement was eliminated as of January 1, 2002 based on the fact that the majority of existing toilets have been retrofit. Using information from 1995 through 2001, staff 2 -� Council Agenda.Report—Water Supply Reliability Reserve Page 7 estimates that retrofitting existing facilities served by the City saves approximately 550 of per year. If these retrofits had not been completed, the per capita use rate for 2001 would increase from the 118 gpcd figure shown above to 129 gpcd. With the elimination of the retrofit requirement, the overall per capita use figure may tend to increase as new development occurs. Maintaining per capita use rates in the 130 gpcd range may be achievable but additional time is be needed to insure use will remain at these lower levels. There have been discussions of lowering the "water use" figure below the 145 level. Adopting a lower per capita use figure, based on other policies in the WME, would immediately create additional water for new development. If the figure were lowered to 140 gpcd, there would be an additional 250 of available for new development at this time. As noted earlier, maintaining the current 145 gpcd figure provides a buffer between actual use and the planning figure of approximately 10-15%. Staff recommends maintaining the planning per capita use rate at the current 145 gpcd as a buffer until such time as supply project options, feasibility, and costs are evaluated and reviewed by Council in light of eliminating the reserve requirement. Summary Based on the above discussions and the information presented in the March 12, 2002 Council report relative to the cost implications associated with developing a reliability reserve and the level of protection provided by the reserve, Council is being asked to reconsider the policy for developing the reliability reserve. If the reserve is eliminated, staff would recommend that the "water use" figure remain at 145 gpcd. The elimination of the reliability reserve will negate the need for a rate increase for existing customers associated with the reserve. The difference between the actual use rate and the 145 figure, that has been achieved through increased conservation, would serve as the buffer. The water that has been conserved by the community would serve as part of the insurance policy without any additional costs or rate increases. In addition, the adopted Water Shortage Contingency Plan will be implemented when supplies are estimated to last 3 years or less which will extend available water supplies. If Council wishes to revise the policies as noted above, the issues would be referred to the Planning Commission and the brought back to the City Council for adoption as a revision to the Water Management Element of the General Plan. The modification or elimination of the reliability reserve will have a dramatic impact on the amount of water that the City will need to develop from new sources of supply. Following Council direction tonight, staff will return with a thorough discussion of the water supply projects that should be pursued as part of the 2002 Water Resources Status Report on June 11, 2002. ` � -7 1 Council Agenda Report—Water Supply Reliability Reserve Page S FISCAL IMPACT Depending on the modifications made to the policies discussed above, there could be long range cost impacts (increases or reductions) to both water rates and development impact fees. No impacts are associated with this staff report since no formal action can be taken to modify the policies without the full General Plan process. ALTERNATIVES 1. Modify the 145 Water Use Figure and Maintain the 2,000 of Reliability Reserve. Reducing the water use figure to 140 gpcd, for example, would immediately provide approximately 250 of for new development based on existing Water Management Element policies. This option would utilize part of the buffer already developed through conservation measures and necessitate development of additional water supplies to provide a reserve. This additional reserve (speculative) would require future water rate increases. With the significant annual cost associated with the reliability reserve, the relatively low level of "insurance" protection, and the projected rate increases for existing residents to fund this protection level, staff would not recommend this alternative. 2. Do not.modify either of the policies. This will require the City to continue to pursue an additional 2,000 of of water supplies to provide for the reliability reserve. Assuming the reserve is acquired from the Nacimiento Project at an estimated cost of$1,550 per af, this will result in an annual cost to the City of $3.1 million. Based on the level of protection provided by a 2,000 of reliability reserve, staff does not recommend this alternative. 3. Reduce the amount of the reliability reserve. The level of protection provided by a 2,000 of reliability reserve is relatively low. Any reduction in the amount of the reserve will only reduce the level of protection provide. Staff does not recommend this alternative: ATTACHMENTS 1. Graph of projected water supplies during drought period without reliability reserve. 2. Graph of projected water supplies during drought period with reliability reserve. 3. Ballot Measure and analysis relative to the reliability reserve (November 1996) Council Reading File: 1. "Water Supply Status and Development" Council Agenda Report dated November 27, 1990. 2. Minutes from November 27, 1990 City Council meeting. 2_g, AT��.IC41M�T L 'o Z CD w m o L m ccU N 0 m LL 9 m m m c0 07 to r a O O O II m 7 cf) O D N c `o o a m It C m 'm' — m E CL Q o m ;o, c a m 3a v Y m fmA I` m L w C 0 V It tt m m V Wy m �• m C M •• ' m m m E m C I s u N m m o u o m 3 w o z 0 ' rn � rn T T O • L o W N C O vo� d : O Go L L a a a Go 0) obod d 7 I` m rn l000 O T rn O T i ca o 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0 0 cn LO a -q Cl) C07 N N O 116 (3aa{-alae)aBe�ou �-9 0 v � `o CD to m m L N 7 O `p L _ T` co U v « c O. W N C11 *0 p « m O N N c d co M ccY Z G O O n ci W Ap aO N c z. O .o U p c m ° m E a a oof O O ` N — a n W m w E E IE0 m Fm U rc m Sm c E CL c c - o 0 0 N VN r fN M O O Dan r dog co s 3 c � o aN m a : CL cn '- ca d •- OD ea O p C n .. c 0 N O i c C � V 0) 00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Ld � 'C V f7 Cl) N N I O (1001-one)eaelo3S FULL TEXT OF MEASURE FULL OF MEAS PROPOSED CHANGES PROPOSED CHAN( (Showing Changes to Charter) (Showing Changes to l........ Section 909. Use of Water Supply Reliability Reserve. SECTION 406. Vacancies. As identified in the Water Management Element of the Genesi Plan. An elective office becomes vacant when the incumbent thereof dies, the City shall strive to acquire additional water supplies as a"reliability resigns, is removed from office under recall proceedings, is adjudged reserve' to protect the Cit' from future water shortages. Once the insane, convicted of a felony, or of an offense involving a violation City has acquired a portion or all of the reliability reserve,the additional of the Mayor or Councilmember's official duties, or ceases to be a water supply shall only be used to.meel City needs during unpredictable resident of the City, or has been absent from the State without leave changes in water supply status such as a new worst case drought granted by the City Council for more than sixty(60)consecutive days, loss of one of the City's water sources, contamination of a source, or fails to attend the meetings of the Council for a like period without or failure of a new source to provide Proiected yield, and not to allow being excused therefrom by said body. additional development. A vacancy in the Council shall be filled for the remainder of the unexpired term, if any, at the next regular municipal election following not less than seventy-two (72) days upon the occurrence of the va- cancy, but the Council by a majority vote of its remaining members shall appoint a qualified person to fill the vacancy until the person elected to serve the remainder of the unexpired term or new term takes office. If the term still has two (2) years until expiration at the time of the next regular municipal election, the election to that seat shall be separated from the election for the other Council candidates. If the Council fails to fill the vacancy within (30) days following its occurrence,it shall call a special municipal election to fill the vacancy, to be held not sooner than ninety (90) days or not later than one hundred and !went., (129) fifty 150 days following the occurrence of the vacancy. The election shall be governed by the provisions of Article 111. A person elected to fill a council vacancy for an unexpired term shall take office on the first Tuesday following his election. Notwith- standing any other provisions of this Charter,a minority of the members of the Council may fill vacancies on the Council by appointment in the event that a majority of the Council seats becomes vacant.. IMPARTIAL ANALYSIS BY CITY ATTORNEY IMPARTIAL ANALYSIS BY CITY ATTORNEY CITY CHARTER PROPOSITION CITY CHARTER PROPOSITION MEASURE P MEASURE 0 In 1993 the City Council amended the Water Management Element Existing Charter Section 406 provides that the Council must fill a of the City's General Plan to establish the objective of acquiring a Council vacancy within 30 days by appointment,and if an appointment 'water supply reliability reserve'to protect the City from future water is not made within that time period, to hold an election to fill the shortages. In order to make it clear that such a reliability reserve vacancy not sooner than 90 days nor loner than 120 days from the shall not be used to allow additional development, and to require occurrence of the vacancy. However, it is not possible to hold an voter approval of any change of use of the reliability reserve once election within 120 days and still comply with State Election Code it is obtained, the City Council directed that this Charter amendment requirements concerning nomination periods and publication of the be submitted to the voters. If approved, this'amendment would add Notice of Election.This Charter amendment would extend the period a new Charter Section 909 which limits the use of any water supply of time in which an election must by held for an additional 30 days, reliability reserve which may be acquired only to maintain an adequate for a total of 150 days, so that the Election Code requirements can City water supply during unpredictable changes in water supply status be met. such as a new worst case drought, loss of one of the City's water sources, contamination of a source, or failure of a new source to s/Jeffrey G. Jorgensen provide projected yield, and not to.allow additional development. If City Attorney approved, this Charter provision concerning the use of the water supply reliability reserve may only be amended by a subsequent vote of the people. sl Jeffrey G. Jorgensen City Attorney NO ARGUMENT IN FAVOR OF OR AGAINST NO ARGUMENT IN FAVOR OF OR AGAINST THIS MEASURE WAS SUBMITTED THIS MEASURE WAS SUBMITTED 40-518 iIIIIIIIIIIIIIIIII�IIIIII �. �FILC liltI��ii�ii�Illllllii'i1Q' 9lll MEETI G;f�y o ZAGENDA 2 council McMOR� ITEM #_ May 10, 2002 FROM: Ken Hampian, City Administrative Officer ouNCll ED CDD DIP �0 ❑ FIN DIP Bill Statler, Director of Finance —�0 ❑ FIRE CHIEF John Moss, Utilities Director ['ATTORNEY ❑ PW DIR ❑ CLERIVORID ❑ POLICE CHF SUBJECT: RELIABILITY RESERVE ❑ DEPT HEADS [I PEC DIP ❑�� UTIL DIP ❑ Ln� HF1 61R In the May 14 Council agenda report recommending that the Council consider modifying the reliability reserve, we note that eliminating it altogether would result in no need for a future general-purpose rate increase for supply purposes. It would also result in a reduced water impact fee. The following summary compares the assumptions used in impact fee analysis presented to the Council on March 12, and the resulting fee per"equivalent dwelling unit" (EDU) adopted by the Council on April 2,with, for example,the assumption of eliminating the reliability reserve. As reflected in this summary, the need for future general-purpose rate increases is essentially eliminated; and the water impact fee per EDU (which is based on single family residences) is reduced by$3,191 (from $11,256 to $8,065) with this changed assumption. Water SUDDly Assumptions,Costs and Availability At 3-12-021 Revised ASSUMPTIONS ■ Demand: Gallons per capita per day 145 145 ■ Reliability reserve (acre feet) 2,000 0 ■ Current population * 44,613 44,426 ■ Safe annual yield (SAY): Unadjusted for siltation ** 7,735 7,790 ■ Next supply cost after water reuse 1,550 1,550 IM PACT ■ Water impact fee (supply, treatment & distribution) $ 11,256 $ 8,065 ■ General purpose rate increase 21.5% 1.1% ■ New supplies needed 3,861 1,806 s Current availability: Adjusted for siltation 273 304 * We just received our official State population estimate for January 1,2002. ** 'The Mirch 12 analysis incorrectly used the safe annual yield from the 1994 Urban Water Management Plan;it has since been adjusted by 55 acre feet. As suggested by Council Member Ewan, we have developed the above spreadsheet for presentation at the meeting to show the impact of changes in key assumptions (such as the per capita use rate and amount of the reliability reserve) on water impact fees, general-purpose rate increases, new supplies need and current supply availability. (These key variables are shown above in bold italics.) This will facilitate `what if' discussions at the meeting. In the interim, please call Bill Statler at x125 if you have any questions on the ' e reliability reserve. Mg �nn� G:Water and Sewer Impact Fees/Adoption of Revised Fees/Council Memorandum—Reliability Reserve I SLO CITY COUNCIL