Purpose

This staff report requests authorization for the General Manager of Burbank Water and Power (BWP) or his designee to sign and file an application for a Groundwater Storage Project Construction Grant with the State Department of Water Resources.

Background

California voters approved the Safe Drinking Water, Clean Water, Watershed Protection and Flood Protection Act (Proposition 13 , or the Bond Law) on March 7, 2003.  The Bond Law now codified at Section 79000 et seq. of the California Water Code, was enacted to promote the conjunctive management of surface water and groundwater to improve the reliability of water supply for all sectors in California.  The Groundwater Storage program of the Bond Law authorizes the California Department of Water Resources to provide grants to local agencies for projects that enhance conjunctive management of surface water and groundwater.  A total of $76,840,000 from Proposition 13 has been allocated for the Groundwater Storage Program for the 2003 funding cycle.  Applications are due in Sacramento on June 5, 2003.

The City of Burbank has a long term projected need of 23,000 Acre-Feet (AF) of water per year.  Burbank's right to locally occurring water or groundwater were defined by the JUDGEMENT in Superior Court Case No. 650079 on January 26, 1979.  Burbank has no right to any "naturally" occurring groundwater, which is owned exclusively by Los Angeles, due to their Pueblo water right.  Burbank does have a "Return" right granted in the JUDGEMENT that recognized the percolation of some of the imported water that Burbank must buy from the Metropolitan Water District (MWD). The Return right is 20% of system production or 4,600 AF from the 23,000 AF total.  The balance must ultimately be made up by purchases of groundwater (Los Angeles) or surface water (MWD).  The most common form of surface water purchased is treated water from MWD, which is also the most expensive.

Burbank also has a long term commitment under a Consent Decree with Environmental Protection Agency to operate and maintain a groundwater treatment plant as part of the cleanup of the Upper Los Angeles River Basin Area (ULARA).  The treatment plant was constructed by Lockheed Martin Corporation.  The plant is owned and operated by the City Of Burbank, but the operational expenses are paid by Lockheed Martin Corporation under the same Consent Decree.  The plant is required to produce 11,000 AF per year under the terms of the Consent Decree.  This is water the City must provide.

The cost of this water has a direct impact on water rates that must be met by BWP customers.  The two most obvious sources of water MWD(treated) or City of Los Angeles (groundwater) are the most expensive.  The adjudication of the ULARA basin allows later  extraction of water placed in groundwater storage and in fact has a Watermaster that keeps track of the groundwater bank.

The City Of Burbank is proposing to apply for a grant from the Department of Water Resources to construct a connection to the MWD East Valley Tunnel. This connection would allow the purchase of untreated seasonal surplus water from MWD and the diversion of this water into the Los Angeles County Spreading Grounds for direct deposit into Burbank's groundwater bank.

Analysis

The proposed project would cost between $1.5 to $2 million to construct.  The after construction operational costs are minimal because the water will flow by gravity from the MWD connection.  The seasonal surplus water is conservatively estimated to be $70/AF less than the next most economical source of water.  The volume of purchased water will vary from 6,400 to 10,000 AF/year.  The savings in the cost of purchased water at these volumes would  be from $448,000 to $700,000/year. A $2 million project would pay for itself in three to five years. 

The grant program has typically selected successful applicants who pledge 50% of the construction cost of the project.  Project payback for Burbank is twice as attractive under these terms.  The City of Los Angeles Department of Water and Power (LADWP) has also agreed to share costs with Burbank if a grant is awarded because they also desire the flexibility of adding to their ground water bank when surplus water is available and reasonably priced.  Their participation would reduce Burbank's outlay to 25% of the project cost yet gain 100% of the benefit. 

This project would help stabilize the long term water supply and water rate projections for Burbank for a comparatively small investment that would be returned in a very short time.

Fiscal Impact Statement

The application has no immediate cost with the exception of staff time to prepare the application and approximately $40,000 in outside engineering costs in finalizing a preliminary design.  LADWP is sharing the outside engineering costs and will reimburse Burbank when the application is complete. The City Of Burbank will have no other financial obligation unless a grant is awarded and then accepted.

Recommendation

Staff recommends the City Council adopt the proposed resolution entitled:

A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK AUTHORIZING AN APPLICATION FOR A GROUNDWATER STORAGE PROJECT CONSTRUCTION GRANT FROM THE CALIFORNIA DEPARTMENT OF WATER RESOURCES.

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