So realistically the Nickel water at 513 acre/feet at 100% and about 1,500 acre/feet potentially available at a 60% reliability.
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 Fixed 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 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%.
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. 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 a 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 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 need to have as a Board from a firm deal point for our Agency if I was going to recommend to our Board moving forward on something like this. And also that short-term thing. As we introduced that Resolution back in June and had some discussion about acquiring new water supply problems 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 like the short term deals that are outlined on here, 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 permanent water supply, but that should be rolled into that Capacity Fee as well.
Davis: That’s something we’re looking at.
Board Member: I would suggest two things be undertaken by staff 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.