Water Supply Projections & Update on Desalination

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WATER SUPPLY UPDATE: Drought Reduces Local Water Supplies to Lowest Levels Ever. Locally, the lack of rainfall has severely reduced the amount of water available from the District’s two largest supplies, Lake Cachuma and Jameson Lake. Due to diminishing lake levels, Jameson Lake will provide only twenty percent of its average yield in 2016 and if dry conditions continue into 2017, will provide no water for the first time in its 86-year history. For the first time in its 60-year operating history, water deliveries from Lake Cachuma, considered and planned as a 7-year drought water supply, currently consist only of remaining carryover water from previous years, with no annual water allocation in 2016.

UPDATE ON DESALINATION. The June 10, Special meeting of the Board of Directors included a presentation given by the District's consultant, Michael Baker International, which analyzed different quantities of desalinated water and their impact on the District's water supply.

The Special Board Meeting also included updates about the negotiations with the City on Desalination. District staff and the Board's Ad Hoc Supplemental Water Supply Committee have been working with City staff on the terms and conditions that would define the long-term commitment of the District to receiving desalination water on an annual basis. This new water supply arrangement would make desalination water a primary component of the District’s water supply portfolio, improving water supply reliability and security.

District and City staff have had many meetings to discuss the proposed Water Supply Agreement terms and conditions that revolve not only around quantity and costs for desalinated water, but just as important on a delivery schedule and the conveyance mechanism.

In order for the District and the City to move forward with the regional use of the City’s desalination facility, actual costs need to be determined for increasing the desalination facility water production to meet the District’s needs. The City has been clear that all efforts by City staff and its consultants that are of benefit to the District are to be fully paid for by the District. The City has forwarded a draft Funding Agreement itemizing costs for developing a Water Supply Agreement utilizing City staff and City legal counsel. Also itemized are estimated costs between the City, its consultants and contractor, IDE Americas, to negotiate the addition of 1,250 AFY of capacity that would be delivered to the District. The existing IDE and City contract includes the construction of 3,125 AFY capacity plant under Bid Schedule 1. The City has indicated that due to ongoing drought conditions, the City will need the full capacity of the desalination plant under Bid Schedule 1.

The City is in receipt of a Bid Schedule 2 increasing the desalination plant to 7,500 AFY on an annual basis but the City has elected not to commit to this higher capacity at this time. With funding of negotiations by MWD, the City will negotiate an amendment to the IDE contract that will establish the fixed and variable cost for the 4,375 AFY plant capacity (3125 AFY + 1250 AFY for Montecito Water District). The cost difference between Bid Schedule I at 3,125 AFY and the 4,375 AFY will be used as one measure to define the cost to MWD for the regional use of the City’s desalination facility. With the District and City staff recognizing the need to better define the terms and conditions of a Water Supply Agreement (WSA), the City has asked its consultant Carollo Engineers for an amendment to their professional services agreement to continue refining a Water Supply Agreement that will define the long term commitment of MWD to the use of the City’s desalination facility.

The full Board of Directors voted in favor of developing a funding agreement to pay for this work and appropriated about $193,000 to cover costs associated with developing a water supply agreement in which both parties are in full alignment on the terms and conditions.