PURPOSE

Staff will brief the City Council on the current status of the Region�s and Burbank�s Water Supply outlook.  The ongoing drought in the Colorado River Basin and the record low rainfall this year in Southern California has been compounded by an August 31, 2007  Federal Court opinion that will limit future State Water Project deliveries beginning in late December, 2007.  The impacts of a reduced imported water supply and proposed actions to mitigate the impacts will be presented.

BACKGROUND

Potential water shortages in Southern California have been aggravated by the record low rainfall of the past year.  The dry local conditions have only intensified regional reliance on imported water.  The Metropolitan Water District (MWD) imports water into Southern California from both the Colorado River (Colorado River Aqueduct [CRA]) and Northern California (State Water Project [SWP]).  Although MWD identifies its function as providing a supplemental water supply for the region, the imported water is essential to sustaining the life and economy of the area. 

MWD is importing its full allocation of Colorado River water and is taking as much water from the SWP as the State Department of Water Resources will deliver.  Deliveries from the SWP have been at 60 % of capacity of the system for a number of years due to environmental issues in the San Joaquin/Sacramento River Delta.  SWP water from the Oroville Dam must flow south across the Delta to reach the SWP pumps.  This delta cross-flow has reversed the flow of the river at times and is attributed to the decline of native fish species in the Delta, particularly the Delta Smelt.

Court actions this Spring and Summer have reduced SWP pumping capacity at times to near zero or a very low volume not able to meet all demands.  The pumps are currently running near capacity but they are just meeting demand and not providing water for storage south of the Delta.  The current shortages are the result of judicial intervention in response to long festering environmental lawsuits.  The existing Federal Biological Opinion which guided water operations in the Delta was voided in an earlier decision by the Court.  A hearing in Federal Court was conducted in August to determine guidelines for interim operation before a new Biological Opinion can be developed and adopted in the next 12-18 months.  The new Biological Opinion may be more restrictive than any interim operational guidelines issued by the Court.

The hearing in Federal Court began on August 21^st to hear testimony from the three principal interest groups: Plaintiffs (Natural Resources Defense Council, et al), State and Federal Agencies, and the SWP Contractors.  The Plaintiffs were seeking a 30�50% cut in the current pumping capacity.  The Agencies felt that a 20-30% reduction would be sufficient while the SWP Contractors proposed 10-15%.  Any reduction would be applied against the 60% SWP capacity limit of the past few years.  An oral indication of the judge�s opinion was released on Friday, August 31, 2007.  It appears that exports of water from the Delta will be reduced by 30% from current levels.  This sets the boundaries on the range of MWD�s response, up to and including, rationing.  A written opinion is due on October 25, 2007.  Analysis on the full impact of the ruling is ongoing and appeals are possible. The pumping reductions would take effect in late December and continue through June.  We are not going to be critically short of water immediately or in the next few months.  The problem is political and long term and so are the solutions.

IMPACTS

MWD began openly discussing and planning for shortages and/or rationing in June.  Draft allocation plans for each member agency utilizing a common formula have been distributed for review and comment.  Allocations are calculated for shortages of supply in increments of 5% from no shortage up to 30%.  The allocation plan is structured to spread the shortage evenly to all member agencies.  The formula utilizes an average of data from 2004, 2005 and 2006.  It takes into account known annual demand, MWD purchases and local supplies of both groundwater and recycled to determine an �equitable� MWD allocation so that all member agencies would experience the same shortage.  The formula did add back in credits for past documented conservation and for recycled water projects in order to reward those agencies which have been responsibly addressing sustainability. 

Basic enforcement of the allocation would be economic to the end users and applies an approach that was in draft format but not adopted during the 1992-1993 drought.  Water purchases above the allocation would be surcharged about 35% for the first 2% of volume above the allocation.  Any other purchase above 102% of the allocated volume would be 300% of the base rate.  The discussion on allocation and enforcement is ongoing.  The initial proposal was to fine tune the allocation formula/enforcement rates and then go to the MWD Board for approval in November.  Subsequent discussion and debate with the member agencies has likely pushed back action by the MWD Board until December or January. 

Analysis of the Court opinion will surely impact the pace of MWD Board action.  Thorough analysis of the Court opinion is necessary to understand the full impact on water supplies in the near term, interim and the long term.  Many strategies may be possible in the interim to supplement supplies and partially mitigate shortages.  The long term solution is a water conveyance around the Delta.  This is the peripheral canal that was planned as part of the SWP but was later eliminated in a statewide referendum.  Political will needs to be mobilized in Sacramento to move the solution forward.  Execution of the solution is a ten year project.  In the interim, other actions are necessary. 

MWD launched its water conservation campaign on August 6^th calling for 10% voluntary conservation or reduction of water use.  This public relations effort will continue for a year.  MWD is also aggressively buying water in the Central Valley through transfers and exercising other prearranged agreements as well as using water stored in various projects and programs executed since the 1991/1992 drought.  The overall strategy is to meet demand with conservation as well as supplemental supplies in order to ramp into reduced deliveries in the long run. 

All of these actions will have upward impacts on water rates for both MWD and Burbank.  Water from storage can be relatively inexpensive while additional purchases add immediate additional cost.  Even conservation in-lieu of rationing will raise the cost of water as the loss of sales means that fixed costs such as debt service, Operations and Maintenance, etc. are carried by fewer units sold.  This will raise water rates.  It is typically counterintuitive to the public that using significantly less water will cost more.

RECOMMENDED LOCAL ACTIONS

Actions to be taken in response to the projected water shortage should be phased, address the current situation and be sustainable whether voluntary or, if need be, compulsory. As stated earlier in this report, California�s water supply problem is long term and so must be the solutions.  BWP staff has already mobilized communications efforts in order to further emphasize water conservation as a way of life for Burbank�s residents and businesses.  Our efforts to reduce the use of potable water in the City of Burbank will be a marathon, not a sprint, and generally fall into three time categories. 

1.      Current Actions

First, the City has called for a 10% voluntary reduction of water use through the �20 Gallon Challenge.�  This challenge asks every Burbank resident to reduce their daily water usage by 20 gallons.  While this amount of water reduction may seem onerous at first glance, there are many ways to not just hit, but exceed, the target painlessly!  Staff has already provided the community with a number of communications that include conservation tips, including:

• A newsletter devoted to the water crisis delivered at the beginning of September to every address in Burbank;

• An insert included in the September municipal services bill, as well as a two-sided insert which will be delivered with the October municipal services bill;

• Information placed on the BWP website;

• 20 Gallon Challenge posters placed at City locations;

• Information running on Channel 6;

• A conservation message shared by Mayor Ramos at the July 10th Council meeting; and

• BWP�s on-hold message.

Staff has developed a water conservation communications plan and is currently working on the implementation of several other water conservation efforts.  Staff will provide Council with ongoing updates on these additional efforts.  Our goal is to ensure that the water conservation message remains at the forefront of our communications.

Second, the use of potable water can be directly reduced on a one-for-one basis by increasing the use of recycled water for irrigation purposes.  Burbank has had a recycled water system since 1993 and planning for further expansion has been underway.  On October 9, 2007, staff will present a Recycled Water Master Plan to the City Council.  This proposed plan would increase the use of recycled water by 1,000 acre feet annually.  The Plan that will be presented is both comprehensive and cost-effective. Construction or build out of the plan would be accelerated by bond financing and would be accomplished within five years.  As proposed, the Recycled Water Plan could offset annual potable water use by about 5%. 

Finally, construction of the water spreading connection in Pacoima is underway.  Project completion is scheduled by May 2008.  This project will allow Burbank to utilize its unlimited right to store water in the San Fernando Basin.  The spreading connection will support Burbank�s ongoing groundwater production and allow storage for dry years.  In years when water is plentiful � for instance, when the Sierra snow pack levels are higher than normal � Burbank could have the option of purchasing water at competitive rates and placing it in storage in the San Fernando Basin.  This would serve as �insurance� water that we could bank on during times of limited water supply. 

2.      Interim Actions

Staff will soon be coming back to the City Council recommending the approval of the following ordinances related to potable water:

• Retrofit Upon Resale Ordinance: The best way to ensure durable potable water savings is through the installation of water-saving devices.  BWP offers rebates to residential and commercial customers who install high-efficiency toilets, irrigation devices, clothes washers, dishwashers, and other water-using items.  While a well-subscribed rebate program can offer significant water savings, it is not sufficient.  We must make the installation of these devices mandatory, not discretionary.  A Retrofit Upon Resale Ordinance would require the installation of high-efficiency toilets, urinals, showerheads, and aerators upon the sale of a real property. 

• Commercial, Industrial, Institutional Irrigation Ordinance: This Ordinance would require that business properties with a specified threshold of landscape separately meter their landscape and domestic water usages.  This would provide both the customer and BWP with data allowing for preferred management of water for irrigation uses.  Additionally, this separation of domestic and irrigation uses would provide for an easier transition to recycled water if and when recycled water is available to the customer.

• Water Allocation Ordinance: Staff intends to provide Council with a proposed water allocation program that moves from restricted water uses adhered to on a strictly voluntary basis up to mandatory water use reductions of 30%.  Each phase will include a drought surcharge intended to recover revenue lost to reduced usage but needed to cover the fixed costs of Burbank�s water service.  This means increased water rates.  Penalties for water usage above proscribed limits will also be included.   

3.      Long-Term Actions

Underlying all other actions that the City takes related to the water supply situation will be two parallel activities. 

First, an environmentally healthy Delta solution is a must.  A conveyance canal as originally envisioned around the Delta is the most plausible solution.  Ideally, this solution will restore and preserve the Delta in a healthy and sustainable fashion while providing the ability to reliably move water to the 75% of the state�s population that relies on the SWP.  The City must mobilize its political will and muscle in concert with other impacted cities and Water Agencies to ensure the necessary action in the State Legislature.  Staff, including Ron Davis (BWP General Manager), Bill Mace (Assistant General Manager � Water Services), and Lianne McGinley (BWP Legislative Analyst), will be working closely with legislators, including Assemblymember Paul Krekorian.  Mr. Krekorian was recently appointed to Assembly Speaker Fabian N��ez�s working group on water.  This group is focused on current water supply challenges in the Delta and crafting a water bond for the February 5, 2008, ballot.  It cannot be emphasized enough that this is a political problem that requires a political solution.  No physical actions on a conveyance canal can be taken until the politics have been resolved.  Recognize, also, that construction of such a canal is a ten-year effort.  

The second parallel activity that needs to occur and be sustained on a long-term basis is a new way of thinking about the use and value of water.  Californians need to adopt a lifestyle that supports a sustainable model for water.  What this means is that we can no longer take water for granted. 

In that light, it is important to note that 90% of the State�s water resources are used for agriculture.  The reality is that agriculture wastes more water than all other uses combined.  Political will and muscle must be mobilized to redefine State policy for the highest and best use of water, one that provides for a sustainable future that doesn�t subsidize wasteful agricultural practices.  Such a policy would allow for a more equitable distribution of water and the associated costs of providing it.

Concurrent with efforts on the agricultural front, we must continue to work toward the most efficient use of domestic water.  We must acknowledge that we live in a semi-arid climate that cannot support our demand for water.  We import at least half of all the water we use into our region and, in times when supplies are limited, there simply may not be enough water available to meet our thirst.  A paradigm shift is necessary in our collective orientation to water.  Today, we largely undervalue water, perhaps because it has been so accessible and inexpensive. 

RECOMMENDATION

Note and file.

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