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HomeMy WebLinkAboutItem 11i - Purchase of Cyclic Storage WaterCyclic Water Purchase from the Main San Gabriel Basin Watermaster October 5, 2021 Page 1 of 3 DATE: October 5, 2021 TO: Honorable Mayor and City Council FROM: Tom Tait, Public Works Services Director By: John Corona Utilities Superintendent SUBJECT: PURCHASE 5,400 ACRE-FEET OF IMPORTED CYCLIC STORAGE WATER FROM THE MAIN SAN GABRIEL BASIN WATERMASTER IN THE AMOUNT OF $4,752,000 Recommendation: Approve SUMMARY The City of Arcadia gets a major portion of its drinking water supply from the Main San Gabriel Groundwater Basin (“Main Basin”). The remaining demand is met from City wells that pump a fixed amount of groundwater from the Raymond Basin. The City of Arcadia has a Cyclic Storage account with the Main Basin that can be used to store supplemental Replacement Water in the Main Basin for later use. The City has the opportunity to pre- purchase imported water that has been made available through Upper San Gabriel Valley Municipal Water District (“Upper District”) for $880 an acre-foot. This rate is $100 an acre- foot less than normally purchased Replacement Water. Some or all of this water will be used to satisfy demands for Fiscal Year 2021-22, with any remaining water to be used at a later date. By pre-purchasing at a lower rate, the City and its customers will save at least $540,000 in water costs. It is recommended that City Council approve the purchase of 5,400 acre-feet of Imported Replacement Water from the Main San Gabriel Basin Watermaster for a total cost of $4,752,000. BACKGROUND In 1973, as a result of overproduction of water from the Main Basin, a stipulated judgment was entered into that created the Main San Gabriel Basin Watermaster. The Main San Gabriel Basin Watermaster is a nine-person board appointed by the Los Angeles County Superior Court that administers and enforces the provisions of the Main San Gabriel Basin Judgment, which established water rights and responsibility for efficient management of the quantity and quality of the Main Basin. Cyclic Water Purchase from the Main San Gabriel Basin Watermaster October 5, 2021 Page 2 of 3 This is accomplished in part by the Main San Gabriel Basin Watermaster determining the total amount of water that can be pumped from the Main Basin each year, free from a Replacement Water assessment, which is referred to as the Operating Safe Yield. The Operating Safe Yield for Fiscal Year 2021-22 was set at 150,000 acre-feet. The City of Arcadia’s annual share of the Operating Safe Yield is 4.23%, or 6,346 acre-feet. Pumping more water than the amount established for a given year is allowed; however, the City must then purchase of Replacement Water to recharge the groundwater basin. On July 8, 2021, Governor Newsom declared a drought emergency in 50 counties and asked for Californians to voluntarily reduce water use by 15%. The drought has already impacted local groundwater levels, with the Main Basin Key Well level currently sitting just 18 feet above the historic low level experienced in the prior drought. Also, pumping rights in the Raymond Basin remain at reduced levels, which has put a greater demand on water pumped from the Main Basin, resulting in greater demands for replacement water. Under current conditions, it is anticipated that the City will need to pump approximately 12,000 acre-feet of water from the Main Basin to meet projected water demands this year; meaning that that City will need to purchase about 5,400 acre-feet of replacement water. DISCUSSION The Main San Gabriel Basin Watermaster has set the cost for replacement water at $980 per acre-foot for Fiscal Year 2021-22. However, in an effort to encourage water agencies to purchase available water from the State Water Project, they are offering a reduced rate of $880 per acre-foot if purchased before January 1, 2022. Pre-purchasing 5,400 acre- feet of imported supplemental water will save the City approximately $540,000. The advantages of pre-purchasing imported supplemental water and storing it in the City’s Cyclic Storage Account are two-fold. First, it ensures that “wet” water is delivered to the Main Basin this year, which helps maintain higher groundwater levels than if the water was purchased as Replacement Water. Second, the water is purchased at a lower rate and can be stored in the City’s Cyclic Storage Account for up to five years. With Replacement Water costs increasing annually, the savings will grow over time. ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”) under Section 15061(b)(3) of the CEQA Guidelines, and it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA. Cyclic Water Purchase from the Main San Gabriel Basin Watermaster October 5, 2021 Page 3 of 3 FISCAL IMPACT Sufficient funds have been budgeted in Fiscal Year 2021-22 Water Operations Budget for the purchase of supplemental Replacement Water. Pre-purchasing imported Replacement Water at the reduced rate will save the City approximately $540,000. RECOMMENDATION It is recommended that the City Council determine that this action does not constitute a project and is, therefore, exempt under the California Environmental Quality Act (“CEQA”); and approve the purchase of 5,400 acre-feet of Imported Replacement Water from the Main San Gabriel Basin Watermaster in the amount of $4,752,000.