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HomeMy WebLinkAboutNB 1 WATER RATIONING 03-04-91DATE: FEBRUARY 26, 1991 TO: WILLIAM HUSTON, CITY MANAGER FROM: PUBLIC WORKS DEPARTMENT/WATER DIVISION SUB,IECTYROPOSED WATER RATIONING PLAN NEW BUSINESS NO. 1 3-4-91 Inter - Com RECOMMENDATION: That the City Council provide direction to staff as to whether they desire to proceed with a water rationing plan and which alternative relating to consumer reduction they desire to initially implement. BACKGROUND: As a follow-up to proposed Ordinance No. 1060 Adopting a Water Management Program, staff on March 18, 1991 will be presenting an additional ordinance for introduction.and adoption pertaining to a City of Tustin Water Rationing Plan. It is anticipated that this ordinance will be presented as an emergency ordinance. This draft ordinance will be forwarded to the City Council during the week of March 4, 1991 for their advance information and comment. DISCUSSION: It is proposed that the Water Rationing Plan would contain, but not be limited to, the following general components: 1. Designated percentage of required reduction as referenced to a base year. 2. A tiered rate structure for excessive usage. 3. Appeal procedure. 4. Provisions for a termination clause. Staff is suggesting two alternatives with respect to a mandatory reduction percentage. These initial reductions are based upon the following information: • Total Average Annual System Consumption . . . . . . . . . . . 13,500 AC -FT • Annual Production Pumped from Basin (70%) . . . . . . . . . . 9,450 AC -FT * Annual Production Purchased from MWD (30%) . . . . . . . . . 4,050 AC -FT * Average Well Production (Based on 9 Active Wells) . . . . . . 1,050 AC -FT * Stage 5 Metropolitan Water District of Southern California (MWD) Reduction of 20% is equal to a required 6% reduction of the system's annual consumption * Anticipated Stage 6 MWD Reduction of 25% is equal to a 7.5% reduction of the system's annual consumption. The anticipated Stage 6 MWD reduction or any other future stages could exceed the 25% reduction amount. The attached sheet marked Exhibit "A" summarizes the MWD Staging Plan and is shown in more detail on Exhibit "B". Alternative 1 A 10% consumer reduction would provide a system -wide surplus of 4% over the required Stage 5 MWD Reduction of twenty percent, and a surplus of 2.5% over the anticipated Stage 6 MWD Reduction of twenty-five percent. These surpluses would no- provide adequate coverage in the event a well was removed from service due to mechanical or water quality failure. The 4% surplus provides 540 AC -FT and the 2.5% surplus provides for 338 AC -FT, while the average well produces 1,050 AC -FT per year. Alternative 2 A 15% consumer reduction would provide a system -wide surplus of 9% over the required Stage 5 MWD Reduction of twenty percent, and a surplus of 7.5% over the anticipated Stage 6 MWD Reduction of twenty-five percent. These surpluses would provide adequate coverage in the event a well was removed from service due to mechanical ; r water quality failure. The 9% surplus provides 1,215 AC -FT and the 7.5% surplus provides for 1,013 AC -FT, compared to the average annual well production of 1,050 AC -FT. In addition to the MWD Reduction requirements, the Governor is telling local agencies/Water retailers to conserve water usage or face State mandated rationing which could result in greater reductions to the consumer. An example may be mandated reduction on underground basin usage. It is proposed that the reduction of customer consumption would apply to all service types: residential, commercial, and industrial. The appeal procedure would initially commence at staff level with the City Council or their designee being the final body of appeal. It is anticipated that the proposed water rationing ordinance would be presented to the City Council at their next meeting as an emergency ordinance per the following schedule: 3/7/91 Publish Notice in Tustin News 3/18/91 Hold Public Hearing Introduce Ordinance with First Reading by Title Only Have Second Reading by Title Only and Adoption 3/28/91 City Clerk Publishes Ordinance in Tustin News 4/1/91 Implementation date of Ordinance 6/1/91 Implementation of Penalties as required through routine billing procedures. As a part of the Staff Report for the March 18, 1991 City Council meeting, staff will be providing additional information as requested on any proposed/existing Municipal Water District of Orange County or Irvine Ranch Water District plans that would affect the residents and business of Tustin. Bob Ledendecker Director of Public Works/City Engineer BL:lmh:ration Incremental Interruption & Conservation Program An Overview The program currently is structured with four mandatory conservation stages. Stage III will become effective February 1, 1991. Allocation Reductions Firm Non-firm Stage II 5% 20% Stage III 10% 30% Stage IV 15% 40% Stage V 20% 50% Firm water is used mostly for residential and commercial customers. Non-firm water includes agricultural customers and water used for replenishment of groundwater basins. The effect of the allocation reductions on individual customers will vary depending on how retail agencies manage their systems. "C-r%i A/ / ';4 " 8-1 Revised • &F71R0P0VTAN DATER 0/STRie1 Of SOUT HER; � November 20, 1990 TO Board of Directors (Engineering & Operations Committee --Info (Water Problems Committee --Action) rmation) General Manager fio�• subjvcr.• Incremental Interruption and Conservation Plan mmar The water supply situation for 1991 is uncertain at best. The State project reservoirs will be critically low starting the year, and although we are working on several supply augmentation plans, we could have less than a full Colorado River Aqueduct. Because of this, it is appropriate that Metropolitan put a plan in place that will allow us to respond to a continuation of the drought in a measured way. Staff, in conjunction with the member agencies, has developed a consensual "Incremental Interruption and Conservation Plan" which begins using water in the interruptible program, in concert with conservation, to meet needs during the remainder of the drought. The plan assigns each member public agency a monthly conservation target of water from Metropolitan. Agencies using less than the target quantity would receive an incentive payment based on the extent their water use falls below their target quantity. Stage I is a voluntary program to encourage consumer conservation and should be put into effect iramedi_ately. Stages iI through V couple conservation objectives with reductions in non-firm service (Interruptible Service and Seasonal Storage Service for long -terra storage). These later stages may be necessary in future months should the drought continue. In Stages II through V, agencies exceeding the target quantity would face -a disincentive charge on the amount of Metropolitan water used over their target. It is recommended that the disincentive charge be twice the noninterruptible rate (currently $394 per acre-foot) and the conservation incentive payment be one --half the noninterruptible rate rounded to the nearest dollar (currently $99 per acre-foot). Adjustments would be made to the target quantities to reflect growth and development, changes in local water supplies, and significant conservation .1 „,o-1 Board of Directors -2- November 20, 1990 programs All adjustments would be reported to your Board. An appeal process would be provided whereby member public agencies could request your Board to review the agency's assigned monthly conservation target. The Interruptible Program was originally conceived to deal with an acute shortage of imported supplies occurring at a time when the longer term water supply for Metropolitan would be more favorable. However, the present situation is different than was contemplated at the time the interruptible program was created. The past four years of drought have already caused a substantial draft of the groundwater and surface storage reserves in our service area, and should 1991 prove dry the prospective shortages for later years only increase. These circumstances are believed to be exceptional within the meaning of Section 4603(b) of the Administrative Code, requiring both that service interruptions be shared equally among all interruptible water users and that conservation by retail consumers must accompany service interruptions to preserve interruptible reserves for possible use in a continuing drought. A resolution of the Board which determines that such exceptional circumstances indeed exist is included as part of the recommended action for the Board to adopt the Incremental Interruption and Conservation Plan. The discussions that have taken place with the managers of the member agencies regarding the possible adoption of the Incremental Interruption and Conservation Plan has led to considerable interest in participation by the member agencies in a review of the Interruptible and Seasonal Storage Service programs and possible revisionz to the Administrative Code to clarify Metropolitans Drought Contingency Program. I intend to create a task force consisting of invited member agency managers and selected Metropolitdn staff to develop and recommend revisions that the task force may consider desirable in the current Interruptible Service and Seasonal Storage Service programs, and in the Incremental Interruption and Conservation Plan. After review of those recommendations, I would -then propose that the Board adopt appropriate amendments to the Administrative Code. This action is believed to be exempt from the California Environmental Quality Act. Recommendations I. That the Board adopt the attached form of resolution stating its determination that exceptional Board of Directors 003- November 20, 1990 circumstances exist that make application of Administrative Code Section 4603(a) unreasonable; 2. That the Board adopt the Incremental Interruption and Conservation Plan as outlined in this letter; and 3. That the Board declare Stage I of that plan calling for voluntary conservation providing incentive payments for conservation to be in effect December 1., 1990. Detailed Rep_ Background On a statewide basis the water situation is serious. Carryover storage in Oroville and San Luis Reservoirs on October 31, 1990 is now projected to be 1.2 million acre-feet lower than last year and only 200,000 .acre-feet above minimum operating storage for these reservoirs. Another dry year in California would i have serous consequences. The Department of Water Resources estimates that there may be a 60 to 70 percent reduction of agricultural deliveries and a 10 to 20 percent reduction of municipal and industrial deliveries next year. On the Colorado River, the Bureau of Reclamation's (Bureau) Annual Operating Plan projects 9400000 acre-feet Of Colorado River water available for Metropolitan in 1991. Through several efforts which have been reported to your Board, we expect to have more Colorado River water than the Bureau now projects. However, for planning purposes, we must take note of the Bureau's projections. Because of the uncertain water supply picture, it is necessary to make plans for another year of drought and prepare ourselves for future shortfalls. This letter presents a recommended water management plan along with a description of some possible alternatives. The philosophy behind the presented plan, which is called the "Incremental Interruption and Conservation Plan", is to begin using waters in the interruptible program, in concert with conservation, to meet needs during shortfalls such as the present drought. It is structured so it can be staged or phased, always holding as much water in reserve as possible for the eventuality of an even longer drought. The recommended plan is consensual in nature. It has been developed in conjunction with our member agency Tanagers ca,. --id represents a mutually agreed upon plan designed to respond Board of Directors _4_ November 20, 1990 to a continuation of the drought. Nothing in the plan is meant to the r4ghts of a member public ageny or the provisions of the Metropolitan Water District Act. The Tncrenental Interruption and Conservation Plan The Incremental Interruption and Conservation Plan establishes*for each member public agency a monthly target quantity of water available from Metropolitan. The target quantity would be calculated for each member g based on a percentage of the total amount of water taken agency' from Metropolitan during the same month in the basetaear of 1989-90. Target quantities of agencies who receivedy non-firm water (Interru tible Service and hd Seasonal Storage Service for long-term storage) in the base year would be further reduced in proportion to the amount of non-firm water -they received. It is envisioned that the program would be implemented in stages by further rec: target quantities for each rae, ucing the Board, based on expected aqueduct flow, demands, Your Conditions, would determine in the future, byspecificnd action, the appropriate stage. P g All interruptible classes of water (agricultural, groundwater replenishment, seawater barrier and reservoir storage) would be reduced uniformly. Similarly, water that is delivered under the Seasonal Storage Program and used for long-term storage would be reduced. Adjustments would be made to the target ties to reflect growth and development, changes in local water supplies, and significant conservation programs. The Plan provides that all adjustments would be subject to your Board's approval. . In Stages II through v, agencies exceeding the - target quantity wduld face a disincentive charge for the water used over their target quantity, plus the applicable water rate, while agencies using less than their target quantity would receive an incentive payment. It is recommended that the disincentive charge be twice the non interruptible rat.. (currently $394/AF) and the conservation incentive payment be one-half the noninterruptible rate rounded to the nearest dollar (currently $99/AF). In all cases the conservationa yment and charges would only apply to deliveries from Metropolitan - and not to total water usage. Stage I of the Incremental. Interruption and Conservation Plan would be voluntary. Member public agencies who reduce their use of water from Metropolitan Board of Directors -5- November 20, 1990 below 95_ percent of the base year and certify that the did not increase the use of local water to do so, would be eligible to receive the incentive payment. In Stage I there would be no disincentive charge. Based on water supply conditions and continuing high demands, this letter recommends the Board determine Stage I to be in effect December 1, 1990. The program is illustrated in the following table and example: As an example, if a member public agency, in a certain month in the base year, received 100 acre-feet of water from Metropolitan of which 10 acre-feet were in non--fi= service, then the agency's target quantity under Stage II would be 100 acre-feet minus 2 acre-feet minus 4.5 acre-- feet or 93.5 acre-feet. If the agency took less than 93.5 acre-feet, the agency would not only avoid purchase of this water but in addition Metropolitan would provide an incentive payment of $99 per acre --foot. On the other hand, if the agency took more than 93.5 acre-feet, a disincentive charge of $394 per acre-foot would be applied to the amount taken over the target quantity in addition to the applicable water rate. Accounting and Reconciliation At the end of each "water year' (September 30) in which Stages II through V were in effect, or following the Boards determination that Stages II through V are no longer in effect, whichever is earlier, there will REDUCTIONS FROM BASE YEAR PLUS REDUCTION CONSERVATION IN NON-FIRM' OF FIRM EXPECTED STAGE DELIVERIES DELIVERIES SAVINGS AFY . I II Voluntary Goal 10% 100,000 20% 30% S% 2608000 IV40% 10% 430,000 V soy 15% 600,000 20% 770,000 As an example, if a member public agency, in a certain month in the base year, received 100 acre-feet of water from Metropolitan of which 10 acre-feet were in non--fi= service, then the agency's target quantity under Stage II would be 100 acre-feet minus 2 acre-feet minus 4.5 acre-- feet or 93.5 acre-feet. If the agency took less than 93.5 acre-feet, the agency would not only avoid purchase of this water but in addition Metropolitan would provide an incentive payment of $99 per acre --foot. On the other hand, if the agency took more than 93.5 acre-feet, a disincentive charge of $394 per acre-foot would be applied to the amount taken over the target quantity in addition to the applicable water rate. Accounting and Reconciliation At the end of each "water year' (September 30) in which Stages II through V were in effect, or following the Boards determination that Stages II through V are no longer in effect, whichever is earlier, there will Board of Directors _6_ November 20, 1990 be reconciliations of the disin..,,,.�+ '��"�' ; Ve charges and the incentive payments for delivery during thatyear or years. At this reconciliation, agencies mayuse conserved water for which they received incentive t d overages on which the paY�'1er.,.s to offset such offsets, Metropolitandwoue disincentive charge. For credit difference between the disincentive charthe agency tre ge and the payment. Therefore, if, at the end of the reconciliation Period, a particular member agency overused in some month and underused in other months in such s quantities that the over and under use equaled each other on an acre-foot basis that member agency will have evened out its account. The end result in this case would be an adjustment of previous billings for delivery in that period so there would be no disincentive charge and no incentive payment. Adjustments Regarding the target quantity adjustments to account for changes in local water supplies, growth and development, and significant conservation programs; staff has developed guidelines to be used in the adjustment process. Because of the wide variety of circumstances, discussions will be necessary with a number of agencies in order to complete the adjustments. In all cases adjustments to target quantities will be reported toour Board. Any member public agency could re est Y � your Board the agency's assigned monthly conservation target. The following are the use in making -adjustments, guidelines we propose to (A) Local water Supply - adjustments to target �- quantities will be recommended if: 1. A well, reclamation plant, aqueduct, reservoir, pipelines fails. 2. There is less surface water because of drought. 3. Court order, regulatory order, or negotiated agreement limits the use of local supplies_ 4. No adjustments would be made to account for routine or elective maintenance. Board of Directors -7- November 20, 1990 (B) _Conservation - adjustments will be recommended if an agency uses less water because of a significant conservation effort in the base year consisting of: 1. A mandatory water conservation program. 2. A major water management program with demonstrated results. (C) Growth and Development - agencies' target quantities will be adjusted for growth based on: 1. The number of new service connections. 2. A demonstrated change in the mix of service connections toward larger sized connections. 3. The establishment -or expansion of a major industrial water user after the base year. Stages II through V constitute an implementation of service interruptions in conjunction with a requirement for increasing conservation by the member public agencies. In Stage II for example, conservation at 5 percent noninterruptible service would be mandated in conjunction with a 15 percent interruption in interruptible service thereby reducing future interruptible obligations by 15 percent. Th::: reduction in future interruptible obligations would be controlled solely by the amounts by which target quantities were reduced owing to past purchases of interruptible service. Agencies that did not meet their interruptible obligations to Metropolitan would pay the applicable water date plus the disincentive charge thug - amounting to payment of the emergency rate for an inability to sustain a service interruption. Conversely, agencies that reduced their use of interruptible service by amounts greater than the call of an interruption by Metropolitan would receive the $99 incentive payment but would not reduce future interruptible obligations. By requiring increased conservation as interruptions are implemented, we ensure that depletion of Metropolitan's interruptible storage reserves is accompanied by austerity in water use. This balanced use of conservation and interruptions recognizes the potential for continued shortages. Although the prospects for shortages in 1991 are a matter of concern, there is still a need to maintain regional storage reserves under the long-term Board of Directors -a- November 20, 1990 seasonal_ storage and interruptible water service o to protect against more serious supply deficiencies inathe future. Not only would demands likely increase in later years of a continuing drought, but dry conditions in 1991 that could cause a potential shortfall in supplies would substantially worsen prospective water supplies for later years. On the State Water Project for example, the Potential serious shortages to Metropolitan in 1991 are lessened by the ability to impose deficiencies to agricultural contractorsof up to 50 percent prior to imposing deficiencies on municipal and industrial contractors. However, if such a deficiency were i^lposed on agricultural contractors in 1991, municipal and industrial contractors collectively would be on equal footing with agricultural contractors to share in anv deficiencies in 1992 through 1996. This is because the combined 1990 and 1991 deficiencies to agricultural users would have reached one year's entitlement which is the maxir►ua, for an seven p Thus, preserving Y year period. regional storage reserves under the interruptible and seasonal storage service programs for potential use in 1992 and later years is a primary consideration in developing mitigation plans for 1991. Alternatives At the October 8, 1990 meeting of the Water Problems Committee, Mr. Donald Harriger, General Manager, Western Municipa? Water District discussed the Zncrenental Interruption and Conservation Plan (I1c) and presented an alternative plan. This alternative is modeled after the plan contained -in this letter, but differs in that it eases the penalty for failure to meet the conservation target and interrupts different classes of interruptible service by different amounts. The alternative reduces the disincentive charged from $394/AF to $200/AF and provides for overuse above the allocation of 5 percent before the penalty is applied. The alternative play-:. also increases the incentive for conservation to $200/AF. In staff's opinion, the easing of the disincentives for overuse will likely result in an easing of agencies, conservation efforts. Because of this the expected savings projected in the Harriger alternative are too high and should be reduced by 40 to 50 percent. Board of Directors November 20, 1990 .A note is appropriate regarding the $394/AF disincentive charge proposed in the IIC. This charge is not designed to collect revenue. Its purpose is to send a strong signal encouraging conservation. The IIC provides flexible use of conservation to cover overages that may inadvertently occur. The disincentive charge is designed to encourage those who Might not otherwise participate in water conservation to join in and do their share. The disincentive charge has the advantage of matching the District's emergency rate and avoids the potential problem of charging different rates for the same class of service. Another feature"of the alternative plan is that it interrupts different classes of interruptible service by different amounts; direct replenishment would suffer the greatest cutback, agricultural the lightest, and seawater barrier none -at -all: Staff examined a similar approach and concluded that it was best to cut all classes of interruptible service equally, for the following reasons: 1• 'Four years of drought have depleted local groundwater basins. It is important that as much water as possible be maintained in these basins in case of a longer drought; 2. To maintain as much water in reserve as possible, equal sharing of the shortage through equal interruption is the best management approach; 3. Equal interruptions offers flexibility to member agencies; each can choose how the cut is distributed within the agency. Cutting by class of service Would require an audit by Metropolitan' to see that each class is cut as specified. Calling for a cut in all interruptible service does not require such an audit; and 4. Equal interruptions provides fair, flexible, and simple administrative measures. In a time of shortage, simple, understandable rules are each agency greatest assurance of consistent, equitable application. A straight interruption in service without any penalties or incentives for conservation was also considered as an z-:lternative. It was determined that this approach would led to the use of our reserves too early. Staff felt that depleting groundwater and storage surface Board of Directors -10- November 20, 1990 water reserves; crippling the agricultural corzunity, and perhaps collapsing the seawater barrier, without calling for general conservation was not a measured approach to extending our supplies through a drought of uncertain length. Exeentional Circumstances The continuing drought has caused an exceptional need to maintain local storage reserves for possible future use. This is in contrast to the objectives for drought mitigation that were proposed at the tire the interruptible program was implemented. The interruptible prograr. was designed on the premise that local storage reserves could be utilized without specific regard to the need for retail conservation and that storage reser-.res could be relied upon more substantially than other types of interrupzible service to offset an acute shortage of imported water. in this context then,_the need to share interruptions equally between all classes of interruptible service and the need to moderate the current use of service interruptions in order to preserve the ability to impose service interruptions in a future year constitutes exceptional circumstances. The proposed resolution of the Board which adopts the Incremental. interruption and Conservation Plan takes note of these exceptional circumstances to offer some clarity as '_o why alternative means of implementing a service interruption, which may in the past have seemed appropriate, would not be prudent as -a current mitigation schema. Member Agencv Task Force There is considerable interest on the part of the member agencies in participating in a review of the interruptible and seasonal storage service programs and Possible revisions to the administrative code to clarify Metropolitan's drought contingency program. I intend to create a task force on which member agency managers will be invited to participate join-ly with Metropolitan staff to develop and recommend desirable revisions to the interruptible service and seasonal storage service programs and to the Incremental Interruption and Conservation Plan. cif-orn_ia Environmental Quality Act (CEOA) This drought is of unknown duration which, if it continues, presents a clear and imminent danger to grater Board of Directors -11- November 20, 1990 service if steps are not taken to mitigate its impacts. Consequently, while not free from doubt, it is believed that this action is exempted from CEQA both by Public Resources Code Section 21080 (b)(4) as necessary to prevent or mitigate an emergency as well as under Section 15301 of the Secretary for Resources Guidelines implementing CEQA since this action simply provides for the continued operation of existing facilities with no expansion of use beyond that previously existing. rte/ lop i DLA/ KRH:ai Attachment