Water Shortage in the Pass Area
Distorting statistics will only make the Pass Area’s water shortage worse. Build the Recycled Water Facilities.
The Pass Area has a water shortage. The Cities of Yucaipa, Beaumont, and Banning were required by State and Federal Laws to build Title 22 Recycled Water Facilities.
All three Cities acquired Bond Debt, but only Yucaipa used the money for its intended purpose and constructed a Recycled Water Facility. Banning and Beaumont Embezzled/Misused their money and have no Recycled Water Facilities.
At the January 24, 2018, San Gorgonio Pass Water Alliance Meeting Dan Jaggers, Manager of the Beaumont-Cherry Valley Water District gave a presentation titled: “A Strategy to Secure and Fund Water Supply to Ensure Regional Sustainability to the Year 2050”.
Jaggers listed Imported Water Supplies as the Constants (non-variables), but water is the Variable – the unknown.
Identify the Problem: Amount of Water needed to sustain additional Housing Developments.
Constant: Population/Water Demand
Variables: Water Supply/Price and Rainfall
Jaggers listed Four Imported Water Sources:
State Table A Water at 60% Reliability: Table A Water does not have a 60% Reliability. The 85% allocation in 2017 was the most received, but the ten-year average is 30% and the 2018 allocation is projected to be 15%.
Sites Reservoir Project: This Project was officially closed down by the State in 2011. Whatever glimmer of hope there might have been to resurrect this Project two years ago; the Orville Dam disaster, now projected to cost $840 Million to repair, assured beyond any doubt that another Dam will not be constructed in the near future.
Cali Water Fix/Tunnel Project: This also isn’t going anywhere any time soon, and what’s the point? The problem is no longer that the pumps aren’t allowed to operate at full force. The problem now is that there’s no water to send to So Cal.
Other Water Purchases: Nickel Water at $55 Million for 1,700 acre/ft/year for 20 years, City of Ventura might have water to sell, but at what cost per year per customer?
Calculating Usage at .5 acre-feet/year per Dwelling Unit: .5 is recklessly low and setting up the Water Districts and Developers to lose in Court. It was discussed at the October 12, 2016 Beaumont-Cherry Valley Water District that the dwelling unit needed to be set at 1 acre-foot/year per dwelling unit.
Recycled Water Facilities: Both Beaumont and Banning are still required by State and Federal Laws to construct Recycled Water Facilities and produce Title 22 Compliant Recycled Water.
The Pass Area needs to focus on what they can control, which is Beaumont and Banning constructing their Recycled Water Facilities. Beaumont and Banning sit on the Board of both Watermaster and the San Gorgonio Pass Water Alliance, but they are never held accountable by the other Members of the Boards.
Both Beaumont and Banning are currently attempting to Increase Sewer Fees, but neither plan to build Recycled Water Facilities.
Pardee Homes’ Butterfield Project specifically requires Recycled Water. Regardless of Imported Water Secured; there is no replacement on a CEQA EIR for Title 22 Compliance Recycled Water.
Government Corruption has caught up with the Pass Area. Distorting statistics and violating State and Federal Laws will only make the Pass Area’s water shortage worse. It’s far past time for the Pass Area’s Elected and Appointed Officials to take responsibility for the past’s poor choices and start following State and Federal Laws – even if it means telling Developers the truth, which is there is no water to supply the housing developments planned.
BCVWD Transcript October 12, 2016
13:00 Item 4. Review of Water Acquisition Options presentation by Jeff Davis of the San Gorgonio Pass Water Agency
“…. made some phone calls to the general managers of the agencies that look like they may have water and got the real story as to maybe they want to utilize that water themselves or had future needs for that water or if it may be available.”
14:00 It got down to a little more detail in terms of what the reality of acquiring future water supplies is and as we’ve discussed it; this Board, for the last several years, how important that is to us. Of course our urban water management plan already recognizes that the existing water supplies that are available to us through the Pass Water Agency are essentially fully subscribed and that we need additional water supply for every new dwelling unit that comes into the Region. The ability of the Pass Agency to be able to do that is paramount to this District to meet the water supply needs going forward with any new development within our service area.
15:45 Jeff Davis: Table three that’s on page 41 of the Agenda Package.
16:00 Davis: This Table summarizes what our marginal cost is to bring water into Southern California. There’s two columns of numbers; the first is the Fixes Costs of water to those entities and the next column is the Variable Costs, the cost to bring the water here, to pump it here. State Water Project is free, the water is free, but you have to pay for the infrastructure that’s been built over a period of years and you have to pay to pump it here.
40:00 Board Member Hoffman: We don’t know what timeframe that is? Is it next month that you can have a Board Meeting that we can attend, or what?
Davis: I don’t know if it’s going to be next month or not. We have to finish putting the package together, there’s some more information that I need to be able to have to take to my Board in order to give them enough information to make a decision.
Board Member: Just to put a new pipe in, huh? It seems like a lot of rigamarole just to increase the size of the existing connection.
41:00 Board Member: Mr. President may I ask, what are you waiting – what’s it going to take to solidify this and move it forward or what are you waiting on?
Davis: So,We have some money. We need a Form that has some information on it that our Board needs to have. And then I need to do some research on where we are on CEQA and what kind of documents would be needed to comply with CEQA and maybe it’s an Exemption, maybe it’s not – I don’t know what it is, so there’s some work there. So those are the main pieces of information that we still need.
Board Member: Those are more administrative issues ..
Davis: I think they’re administrative, yea.
Cottrell: You shared with me that you do have a Report back from your Engineer, could you maybe enlighten my Board as to what some of the basic concepts were? What the finds were?
Davis: Findings? I think the request was to increase the size, the capacity to 34 CFS.
42:00 Davis: The Report looks at various different alternatives to enlarge the connection to get the 34 CFS. There’s different pipe sizes, different valve sizes, different meters, that sort of thing. We’re Engineers, so there’s always more than one way to solve the problem.
Board Member: So there wasn’t any one recommendation?
Davis: No, I think we would do whatever you guys want to do. I would assume that you might want to go with the least expensive, but there might be other reasons why you might want to go with something that costs a little bit more.
Board Member: Is there any way that can be provided to our General Manager?
Davis: Yea, once we get the Application Form, sure.
Board Member: You want the Application Form first?
Davis: Yea, that’s kind of the rules. It’s kind of what the Board wants to have, yea.
Board Member: I would have thought our letter was sufficient.
Davis: Again, you have to read the Ordinance. Ordinance 8 says we need some certain information from you. It’s on the Form.
43:00 Board Member: I’ve read Ordinance 8 at Eric’s request several times. It’s a Service Application. It’s for people entering into a new Service Agreement with the Pass Agency. I’ve probably done 100 or 200 Joint Public Agency Projects just to upgrade Infrastructure that’s already used to provide service and I don’t understand why a new service application would be required just to complete this physical process.
Davis: It’s a three-page form. It’s not a big deal.
Board Member: I’m not saying that it’s a big deal, I’m just trying..
Davis: it has information on it. It has information. For one thing, one of the things on that Form says that you’ll follow all of our rules and regulations. I think that our Board should know that you say that you’re going to follow our rules and regulations. For another thing it says that you’ll cover all the costs associated with the construction of the new connection. It’s got a bunch of information on there. For another thing it says that you’ll comply with CEQA for where the water’s going. It says that you’re going to use the water within our service area and you’re not going to use it outside of our service area. This is all information that’s useful to our Board in making a final decision.
Board Member: Jeff, is that information needed because what we’re asking for is an upgrade to our existing..
44:00 Davis: That’s new service. It changes out your existing service and provides, yea. There’s going to be a new valve, a new piping, there’s going to be all kinds of stuff.
Board Member: Going back to this report Jeff. When you’re looking at securing short-term water supplies. Is there a CEQA process that have to followed through that or is that …
Davis: California Environmental Quality Act must be followed. Now in certain cases it may be an Exemption. In the case of let’s say we got water for one year. We’ve done some exchanges where we’ve exchanged water one year. We filed a Notice of Exemption. It’s still a CEQA document that has to be filed. It’s not a big deal. For a permanent transfer, obviously, it’s a much bigger deal.
Board Member: Permanent sure, but you’re saying for a short term.
Davis: If it’s something like for 5 years or for 10 years then, and I’ll talk to our lawyers to find out what kind of document that is.
45:00 Board Member Cottrell: Jeff, could you provide an overview of what you think our permanent water supply opportunities that are out there and what those quantities of water are available to you based on this Report. I saw that there’s water potentially available, but talking to the general manager he said
“no, there really wasn’t”. You’ve bounced around a little bit, so just for clarity so I have it and the audience and everyone else understands; what do you think the real numbers are in terms of permanent water supply that would be available for your acquisition in terms of acre feet of water.
Davis: You’re taking today?
Water District: Based on the Report that you have here; which opportunities do you think are out there and is the associated acre feet if water that you think could be acquired in terms of a permanent supply.
46:00 Our Board is considering a number of Will-Serve Letters and our ability to meet those obligations under the Will-Serve Letters really depends on your ability to get that water, so how many acre feet do you think you’re looking at, based upon the discussions you’ve had with that consultant, would be available for permanent supply, not just interim, but permanent supply?
Davis: Right. Permanent, Today; probably 2,000 acre/feet or less. I think that over time…
Water District: At what reliability is that?
Davis: That would either be State Water Project, which would be 60% or 100%. The Nickel waters’ 100%, the rest of it is 60%.
Water District So realistically the Nickel water at 513 acre/feet at 100% and about 1,500 acre/feet potentially available at a 60% reliability.
47:00 Davis: That’s probably good round numbers.
Board Member: I think those are the numbers.
Water District: It’s like we discussed with our Board on the Capacity Fee. We have serious reservations about the Capacity Fee as it exists right now because you’re assuming about a $3,000 per dwelling unit in new water supply costs but the deal that you are currently undergoing with the Tulare properties is $5,100 per acre foot of water, but at 60% reliability. If you know that you have 60% reliability you basically need to buy an acre foot of water for each new dwelling unit, so that would make the effective costs that you should be collecting under your Capacity Fee of about $5,100/acre foot per dwelling unit just for the water component alone.
48:00 Water District: That’s why we have reservations of just signing on to, or at least I have reservations recommending to my Board that we just sign on to the Capacity Fee as adopted by your Agency because it really doesn’t account for the variability of reliability of water and the costs that are associated with that.
Davis: And I will say, Eric, that I think that we’re going to have to look at increasing that Fee.
Water District: And that would be my issue, that if we do move forward that we have some sort of structure that looks at the short term cost of water and the cost of water and that all of those costs are rolled into an Agreement that allows for 100% recovery of those costs without burdening the existing Ratepayers and the existing Customers in the service area to acquire that water moving forward.
Davis: That’s a big deal with my Board as well; to not burden people who live here today with procurements of additional water that would only be needed for growth. Now there is some benefits to the people that live here today of acquiring additional water supplies to make it more reliable that where we’re at today. But the majority of the costs are going to be paid by ..
49:00 Cottrell: Right. And we think that component is already built in essentially to your existing rate structure to ensure additional costs that you’ve already built into your rate structure to acquire additional supply and increase the reliability of supply, so just for the community’s edification and for our Board. That’s why we haven’t jumped on board, or at least I haven’t jumped on board with this Capacity Fee and brought it back to you as a Board because we think there’s some fundamental flaws as adopted because it makes an assumption of 100% reliability with only 1/2 acre foot per dwelling unit. We know from our experience that we’re about 6/10’s of an acre foot per dwelling unit and so to be able to have that at 100% reliability you need about a full acre foot of table A at 60% reliability to meet those demands moving forward.
50:00 Cottrell: That would be something that we have to have as a firm deal point for our Agency or if I was going to recommend to our Board moving forward on something like that. And than also that short-term thing. As we introduced that Resolution back in June and had some discussion about that and acquiring new water supply prior to issuing any new service connections. The key elements were having that water in hand. We understand that there needs to be a long-term supply procured, and there might be an interim period where you get short-term whether it’s short term deals that are outlined on here, or water from San Bernardino Municipal Water District, or other similar entities in the short term, but I think those costs should also be recovered as a part of that Capacity Fee that you would collect from a potential land owner that wants to move forward, so all of those costs are totally recovered.
51:00 Cottrell: So maybe you need to get some short-term while your finalizing the deal for the permanent water supply, but that should be rolled into that Capacity Fee as well.
Davis: That’s something we’re looking at.
Board Member: So about 2,000 acre feet is really what’s out there at the moment.
Board Member: I would suggest two things be undertaken by staff and/or Mr. Fraser. And that would be open up discussions on the Capacity Fee with the San Gorgonio Pass Water Agency and for Counsel to talk to Counsel on the Ordinance 8 issue on the expansion of the connection.
52:00 Item 5: Continuation of Consideration of Request for a Second Extension of “Will Serve Letter” for 1,851 Houses in Ongoing Development within Pardee Homes-Sundance Master Planned Community
52:25 MIchael Titus, Pardee Homes Attorney: I think you got our letter yesterday, right? So we’re good there. It’s similar to a letter we wrote before. Our problems are Conditions 5 and 6. I’m not going to reiterate all the arguments in there. You’ve seem them. I’m sure Counsel’s talked to you about them. But here’s a couple points I want to raise that have come up rather recently. For example, the Pass Agency in their September discussion of where they get water concede that with a proper fee – there is enough water.
53:00 Titus: And as you heard them today; you’re not including Ventura who always has water because they passed the Soar Initiative a decade ago which crushed development in the County. So all that water that they were planning for can’t be developed in the Soar Initiative doesn’t allow you to develop anything outside the Cities in the unincorporated areas of the County. As for SLO, I happen to know a lot about SLO. They have 25,000 acre feet of water. They’ve only allocated 7,000, but it’s a little misleading, because really it’s about like 4,000 and the rest of it’s a buffer. They have plenty of State Water and the reason why is because a couple Supervisors, Gibson and Brown, don’t want any development in the County. In fact Carpeteria, which has 5,000 acre feet, tried to actually sell it to the Santa Maria Water District. They put up a Bond Issue, it got defeated, so Carpeteria can’t sell that water.
54:00 Titus: They want to get rid of it and there’s this huge No Growth. Oceanio, which is right in that area, has 500 acre feet which we almost bought, one of my Clients. They wanted to sell it, they couldn’t use it, but then all the neighbors get up and said: ‘Wait a minute. We may one day develop it even though Oceanio clearly could never use that water. So there is water out there, it’s a question of just the cost. Getting back now to this particular issue. Pardee has put millions of dollars, tens of millions of dollars into infrastructure and into fees. Capacity Fees, other fees, with the expectation that those at the water plant and the Urban Water Master Plan that we would be able to pull our Building Permits and build our homes. The fact that the Water District has collected the money and if you look at the memo that was supplied today in Item No. 4, because some of the Agencies waited too long, the cost to acquire went up.
55:00 Titus: We, that is Pardee, incurred a significant amount of expense and the fact that people wait a long time is going to cost more money; we’re willing to help, but we’ve already helped a lot and nobody’s done anything. On the one hand we’re more than willing assist the Districts. We’ve even talked to your General Manager about advancing some of the Fees that we owe on the remainder of our Project so that the money is there to do what we need to do to get water. But putting Conditions 5 and 6 on really turned the tables. And I want to point out; when the City tried to sell some water to the Indian Tribe the District complains that they can’t do it. “We’re the Retail Water Purveyor”. Well, your Condition 5 and 6 make us do your job. That’s not fair.
56:00 Titus: What we want to do is basically have those Conditions eliminated. Give us our Will Serve Letter. In a year from now; the City’s doing work on the Recycled Water Plant, obviously the Pass Agency is starting to do things, we’ll see what happens. But in the interim either basically give us our Will Serve Letter or carve us out permanently like your Resolution 2014, which we believe did carve us out permanently. I’d be happy to answer any questions. We do want to work with you, we have been working with you. As you’re probably aware; we’ve met with the City and we’ve talked to the City about advancing some of the Fees to help pay for their upgrade. But at some point in time we need some assurance that we can continue to build. Any questions?
57:00 Jeff Chambers, Pardee Homes: As Mr. Titus said; we’re here because we’re looking for an extension of our Will Serve Letter. I wanted to make you all aware of the conversation we had with Mr. Fraser, Mike Taylor and I, yesterday in talking about different options. The two Conditions we asked not be included in our Will Serve Letter are Conditions we can not directly fulfill. We assured him that we would continue to work with the City, that we would do everything possible to get water flowing into the Purple Pipes which helps. It does’t alleviate the problem, but it definitely helps. We have money. There’s about $8.7 Million in remaining Fees associated with Sewer that we could advance to the City to help them get water flowing into the Purple Pipes.
58:00 Chambers: We’ve told Mr. Fraser and we told the City that we’d be willing to advance that and I’m here to just ask you to please grant us our Extension. We understand that we’re in a drought. The drought may not be permanent. I’ve lived here for 62 years and we’ve had periods of rain and periods of drought. I don’t think that the drought is necessarily going to be permanent. There will be more water. I don’t hear any discussion about in the event we get 36 inches of rain; how much water that does and how that changes the overall supply. We’re talking about water that is specifically tied to the State Water Project and being put into the Basin. But I’m hopeful, and this is a question to Mr. Fraser. We’ve had a good working relationship for the better part of 15 plus years.
58:00 Chambers: We’ve paid our Fees, we’ve always been able to move forward. We have some part that we were going to start construction on tomorrow. There’s an Agreement pending, which is; we’ve paid all of our fees, we’ve provided the insurance, and we were for the first time asked not to proceed because of a pending Agreement needing a final signature. I’m just hopeful that has nothing to do with this Hearing tonight.
Board: I don’t know what that Agreement is. Do you know what Agreement that is?
60:00 Judy Bingham: It’s a new day in Beaumont and the days of trading Bond Debt for Mitigation Fees is over – ask Pardee Homes. It’s coming out of their pockets now. There have been no new Bonds since Kapanicas left in June, 2015. This Board will be held responsible for destroying the Pass Area for its current Residents.
61:00 Bingham: I personally don’t care of Pardee Homes is stopped from making their big profits. I disapprove of those Will Serve Letters. The City of Beaumont has overcharge Mello Roos Taxpayers $11.6 Million 2017 Tax Rolls. It is illegal for a city to make a profit on these taxes. This information has been sent to the Securities and Exchange Commission. The people living in the Developments are being robbed by the City of Beaumont and the Developers.
62:00 Fraser: The basis for those Conditions are, as we had stated before, it’s basically to put everyone on notice. One of the things we learned this evening from Mr. Davis is that realistically there’s maybe a couple thousand acre feet of permanent water supply that could be acquired in the near future. And I know Mr. Titus touched some other opportunities there, but I listened very carefully and you can correct me if I’m wrong, but what I heard was that it’s just a matter of costs, but you also said there were multiple attempts by those entities to try to sell their water but they were told they couldn’t or they decided they couldn’t or there were issues that precluded the sale. So you can’t essentially force somebody to sell something that they don’t want to sell for whatever reason.
talking off mic
63:00 Fraser: Sure, and we would welcome that opportunity to acquire those supplies, but the issue with these Conditions of Approval being in there was basically to put everybody on notice that hey, just as a reminder, our water supply assessments that were conducted for these projects, our Urban Water Management Plan, has always relied on those two sources of supply moving forward. Whether it’s the Recycled Water Component or if it’s permanent State Water Project or other similar rights that can be obtained by the District to bring in imported water supply into the Region. It’s really to put everyone on notice that our ability to move ahead and serve those particular projects is dependent, whether it’s an individual house or a large tract such as what’s being proposed right now, is dependent upon those imported water supplies.
64:00 Fraser: The local water supplies have been fully exhausted – a long time ago. About 2/3’s of our water supply is dependent upon imported water right now. We serve about 13,000+ acre feet and out of that about 8,000 or 9,000 acre feet come out of the Beaumont Basin right now. That”s how our portfolio is defined and moving forward it’s going to be that same way. The opportunity for Recycled Water is definitely there and we look forward to the City of Beaumont making a decision as to which direction they’re going to go. We hope that we’ll end up with a Recycled Water Component in the very near future and that will help offset those needs. But those are not really considered new supplies that aren’t already considered as part of the Urban Water Management Plan. Those were always components of the Urban Water Management Plan and the Water Supply Assessments, so its just a matter of getting them to come to fruition; just like having the Pass Agency acquire those water supplies that we need as imported water supplies.
65:00 Fraser: That’s the purpose of having those in there. I don’t want the Board or the Public or whoever coming a year from now or five years from now saying “What were you thinking?” Why did you propose those things?” “Why did you recommend those Will Serve Letters?” now that we learn that we can’t get those water supplies. I’m not one of those ‘told you so’ kind of guys, but it’s going to be an ‘I told you so’. I’m telling you now that those water supplies are critical to be able to move forward and that’s why we included them as Conditions of Approvals. So everyone’s on notice and everyone’s out there and hopefully we can work together to resolve those issues, but you just need to be aware that they are necessary to be able to move forward and that’s why they were included.
66:00 Cottrell: I think if there’s any good that’s come out of the drought or the corruption at City Hall or anything like that, or even the potential problems this Board had in years’ past is that it’s brought us all aware of the fact that the City and the Water Board need to work together before Approving the development or the buildout of this City to make sure that we have the right resources. We got caught with our pants down on this one. So I think what we want to do is, moving forward; there’s different players now. I think we have to move forward not only with the Pass Agency but with the Council. The City Council and this Board to move forward to make sure that this doesn’t happen again. But that’s the benefit of the drought, it brought it to the attention of the Public, the attention of this Board, and hopefully the attention of the other Agencies.
67:00 Covington: As I’m reading the Staff Report with regards to Pardee Development, which I was not present last month, so I’m kind of playing catch-up on this this. I’ve also read the two letters that Mr. Titus delivered to the Water District. I understand Pardee’s position. As President Cottrell has just articulated, the drought has really brought a lot of things to the forefront that have been lagging for years. I am humbled to hear that Pardee is willing to put up some money, shift those funds for improvements. If I wrote this down correctly; to help with some of the needed upgrades at the City of Beaumont’s Wastewater Treatment Plant, so that really shows a commitment, I think, from the development community. I’ve read last months’ report. I’ve read tonight’s. I think that is encouraging information that Mr. Titus has brought forward.
68:00 Titus: The General Manager, the way he described the conditions, basically advising everybody warning what happening. If that’s all it was; okay, we’ve all been warned. That would be fine, but that’s not what it says. Our concern is language. “The Applicant Shall secure entitlement said non-potable water supply from the City of Beaumont that shall be conveyed to the District what is necessary to support the project in the development including non-potable water use requirements to offset potable water demand created by this project.” It goes on to talk about the cost. That’s not a warning, that’s a command.
69:00 Titus: That’s what we don’t want. We don’t think 5 and 6 are appropriate. In the strongest language; we don’t want to be your opponent in court. We’d rather spend our money not fighting your in litigation, but assisting you in getting the water. And just so you know; that language – I’ve read it. It’s not advisory, it’s a command and it’s making us do what is essentially the job of the retail agency. We’re willing to help, but the company can not do that and can not allow that language to stand.
69:40 Board: Mr. President; is there a way we can Approve the Will Serve Letter without having these Conditions number 5 and 6? Maybe suspend it?
70:00 I’ll make a Motion Mr. President, if I may. Motion to suspend Conditions 5 and 6 as stated in the Staff Report provided tonight. Furthermore; direct Staff to negotiate an Agreement with the San Gorgonio Pass Water Agency for the purpose of securing permanent water supplies. If an Agreement can not reached we will direct Staff to move forward to Adopt Water Shortage Emergency Conditions as stated in Water Code Section 350.
71:00 Cottrell: Modify the Motion to go for a year and suspend Conditions 5 and 6 for no more than 12 months.
Cottrell: The Motion as it stands is to issue a Will Serve Letter with the suspension of 5 and 6 Conditions for one year and suggest that Staff work with the San Gorgonio Pass Water Agency to secure permanent water supplies. If that Agreement can not be reached then this Agency will move forward with Water Code Section 350. And that’s outside the year. So for the first year we suspend Conditions 5 and 6 and that’s been Seconded. Any discussion?
72:00 Fraser: Is there a timeline in negotiating that Agreement with the Pass Agency? 60, 90 days?
Cottrell: The Motion had we’d negotiate long term for permanent water.
Board Member: I would give that 90 days maximum.
Fraser: So Staff has 90 days to put together the Agreement with the Pass Agency to develop a plan to securing long-term water supplies.
Cottrell: And at the end of the 90 days if that doesn’t happen then we proceed on a ..
Fraser: A process under Section 350 of the Water Code.