Loading...
HomeMy WebLinkAboutCC AG PKT 2007-05-14 #R e AGENDA REPORT DATE: May 14, 2007 TO: Honorable Mayor and City Council TIffiU: Greg Beaubien, Interim City Manager FROM: Mark K. Vukojevic, P .E., Director of Public Works/City Engineer SUBffiCT: APPROVAL OF CITY COMMENT LETTER RE: PROPOSED ORANGE COUNTY WATER DISTRICT ANNEXATIONS SUMMARY OF REQUEST: The proposed City Council Action wilI authorize the Mayor to sign the proposed letter to the Orange County Water District concerning future District annexations. BACKGROUND: e Orange County Water District was forme4 in 1933 by a special act of the California Legislature which included the City of Seal Beach in the original District Act. At that time, and for the 70 ensuing years, the District's primary purposes has been to 1) manage Orange County's groundwater basin to the benefit of its users; and 2) protect the groundwater basin users' water rights. Orange County Water District's present service area is nearly 350 square miles including the North Orange County area. Member agencies are: the Cities of Anaheim, Buena Park, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, La Palma, Newport Beach, Orange, Santa Ana, Seal Beach, Tustin and Westminster as well as the East Orange County Water District, Irvine Company, Irvine Ranch Water District, Mesa Consolidated Water District, Santiago County Water District, Serrano Irrigation District, Southem California Water Company, and the Yorba Linda Water District. However, only portions of the Anaheim, Irvine Ranch Water District, Santiago County Water District and Yorba Linda Water District are within OCWO's present boundaries. Several Orange County agencies have recently petitioned OCWO to annex into the District. As part of the annexation, these agencies would receive substantial amounts of water rights over the next 20 years. This would result in a decrease of water well pumping production available to existing groundwater producers such as the City of Seal Beach. (The amount of water in the Basin can figuratively be referred to as a pie. The more agencies at the table, the less water availabl~ to each agency.) e - I - Agenda Itcm~ e e e The historical precedent is that member agencies pump up to a maximum of 75% of their respective needs per year from the groundwater basin (referred to as the Basin Production Percentage, BPP). Over the last several years the BPP has been reduced to as low as 62%. Currently the BPP is 69% and members presently pump a total of 491,000 acre-feet per year of water from the basin. By 2025, production levels wiII grow to place a demand of 568,000 acre- feet of water per year without annexation and 614,000 acre-feet of water per year with the proposed annexations. OCWD suggests that the increased basin demand (resulting from boundary expansion and intemal build-out) could be met by: 1) reducing the BPP (which wiII result in increased water rates for Fountain Valley consumers); 2) increased percolation of Santa Ana River water flows and Metropolitan Water District (MWD) water into the groundwater basin; 3) in-lieu water purchases whereby agencies decrease groundwater production by purchasing more MWD water; 4) by construction of specific projects that have been identified as beneficially cost effective in the LTFP; and,S) developing the Groundwater Replenishment System which will result in an additional 72,000 AF per year of treated OC Sanitation District water pumped to the percolation ponds in the Santa Ana River, which would then be percolated back into the underground basin. For the immediate future, however, it is questionable whether or not there is sufficient basin water to meet I) the existing demand of present member agencies, including intemal build-out; and, 2) accelerated demands resulting from boundary expansion. Over the years, OCWD has separately processed many annexations with the goal of bringing all land that overlies or drains into the groundwater basin into their boundaries. The City also recognizes that this issue has been studied and analyzed by environmental documents and that negotiations are underway for proposed annexations. However, the projected water demands of the future seem to indicate that all future annexations should be required to provide cost mitigation to existing basin producers. If the City Council is in agreement with this position, the Council may direct the Mayor to sign the comment letter supporting approval of proposed annexations with fuII cost mitigations. FISCAL IMPACT: Currently OCWD has estimated that the net cost of the annexations would be approximately $2 million to all other Groundwater Producers. Without full cost mitigations, water rate increases to all consumers, including Seal Beach ratepayers would be required. RECOMMENDATION: It is recommended that the City Council authorize the Mayor to sign the proposed letter to the Orange County Water District concerning future District annexations. -2- Agenda ltem_ e e e Prepared By: Mar~lftp.E. ~ Director of Public Works/City Engineer NOTED AND APPROVED: ~~O~ 0.. " Greg B ien Interim City Manager Attachments: Proposed Letter Regarding OCWD Annexations -3- Agenda Item_ e e e May 14, 2007 Mr. Philip L. Anthony, President Board of Directors Orange County Water District 10500 Ellis Avenue, P.O. Box 8300 Fountain Valley, CA 92728-8300 Subject: Proposed OCWD Annexations Dear President Anthony: The City of Seal Beach respectfully requests that any new annexations to the Orange County Water District be approved with full cost (financial) mitigations for the existing Basin producers. These mitigations should be structured in such a way that existing Cities and Districts in the Basin are not paying higher costs with additional annexations. The City is concerned with increased water replenishment assessment costs for the City as would be the result of adding new service areas to the Basin. Without financial mitigations, approval of additional annexations will amount to a cost shift from imported water users to existing water ratepayers throughout the Basin. It is understood that many annexations have occurred in the past and that negotiations and term sheets are being discussed. However, with the projected Basin demand increases in the future, it is clear that full cost mitigation is needed as part of any new annexation. Thank you for your consideration. Sincerely, John Larson Mayor City of Seal Beach