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HomeMy WebLinkAbout17 - Response to Grand Jury regarding Paper WaterCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 17 September 8, 2009 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Utilities Department George Murdoch, Utilities Director 644 -3011 gm urdoch @newportbeach ca.gov SUBJECT: RESPONSE TO GRAND JURY ON "PAPER WATER - DOES ORANGE COUNTY HAVE A RELIABLE FUTURE ?" RECOMMENDATION: Approve the response letter to the Grand Jury report on "Paper Water - Does Orange County Have a Reliable Future ?" and authorize the Mayor to submit the report to the Presiding Judge of the Superior Court pursuant to Penal Code 933.05 (a) and (b). DISCUSSION: Background: On June 15, 2009, the Orange County Grand Jury released a report entitled "Paper Water - Does Orange County Have a Reliable Future ?" (Attachment "A ") The purpose of the report by the Grand Jury was to investigate how cities and water agencies are planning for and responding to a profound redistribution of water supplies away from Orange County, with the potential to affect the quality of life here for generations. The Grand Jury states in their summary: "Paper water is an illusion. It is a term used in the water industry that represents entitlement, existing only on paper, which agencies can expect to receive from state and federal water projects based on projections and expectations." The Grand Jury has learned that Orange County's water supply is vulnerable to extended outages as a result of catastrophic disruptions and long term system failures. The infrastructure that conveys water to Southern California is in a state of disrepair and neglect. The issues that affect water supply go beyond the lack of rainfall or drought. The Grand Jury investigated how cities, water districts, businesses and the public are - or are not - planning for an extended lack of water supply. Response to Grand Jury Report on "Paper Water - Does Orange County Have a Reliable Future ?" September 8, 2009 Page 2 The Grand Jury conducted their investigation by reviewing documents from expert sources and interviewed representatives from numerous agencies. They produced thirteen findings and four recommendations, to which the City is required to respond by September 18, 2009. In summary, the following are some of the conclusions from the report: • State Water Project infrastructure is extremely vulnerable to failures. • Scientists project the inevitable end to the Delta as fresh water supply due to high salinity. • Recent court rulings in environmental habitat protection have cut supplies from Northern California. • Water rights allocations may impose permanent cuts from Colorado River. • Orange County's water supply infrastructure has not received the proper attention. • Interaction between land planners and water planners needs to improve. • Water pricing to pay for costly supply sources will rise to levels never before seen. • Public awareness of supply issues is unacceptable and must be improved. • Although innovative projects are underway to create "new' sources of water, the adequacy of contributions is uncertain. • If Orange County water agencies work together and residents become more involved a positive outcome is more likely. • Orange County is praised for protecting and managing the ground water sources. • Differences in ground water availability by north and south Orange County causes south Orange County to be dependent on imported supplies. • Restructuring the County's water resources management could affect working relationships between agencies. Grand Jury Findings and Recommendations: F.1: Inadequate coordination between local land -use planning agencies and local water supply agencies, resulting in a process that fails to fully engage the issues. FA(a): Water agencies have tended to avoid interfering with or participating in growth - management decisions. FA(b): Cities and the County have tended to not critically evaluate the limitations of the water agencies supply projections. F.2: California's looming water supply crisis receives very little, if any expressed concern from the public in comparison to the numerous other environmental issues presented during development project reviews. Response to Grand Jury Report on "Paper Water - Does Orange County Have a Reliable Future ?" September 8, 2009 Page 3 F.2(a): Orange County's citizens and interest groups do not appear to grasp the seriousness of the water supply situation of the complexity and urgency of the necessary solutions. F.2(b): Several recent, substantial water supply awareness efforts are underway (e.g. the O.C. Water Summit) that show promise but appear targeted to audiences that are already informed. F.3: LAFCo is the agency charged with facilitating constructive changes in governmental structure to promote efficient delivery of services. To this end, LAFCo is conducting a governance study of MWDOC which is the designated representative for nearly all the Orange County retail water agencies, acting on their behalf with their surface water supplier Metropolitan. F.3(a): There are a number of points of governance disagreement between MWDOC and several member agencies. This is creating an impediment to the on -going effectiveness of these agencies in critical areas of Orange County's water supply management. F.3(b): The current disagreement is a distraction from the greater good of the agencies working toward Orange County's water future. F.3(c): The stakeholders in LAFCo's study failed to meet their March 11, 2009 deadline for LAFCo's public hearing in this matter. Continued delays are unacceptable. FA: Orange County is uniquely fortunate to have a vast, high - quality, well- managed groundwater basin serving its north geographical area. However, in its south reaches, it has an equally large, high - growth area with virtually no available groundwater resources. FA(a): The difference in groundwater availability creates a "haves versus have -nots" situation that is conducive to inherent conflicts. FA(b): The difference in groundwater availability provides opportunities for responsible participants to develop and construct long -term solutions which will benefit the entire County. RA: Each Orange County municipal planning agency, in cooperation with its respective water supply agency, should prepare for adoption by its city council, a dedicated Water Element to its General Plan in conjunction with a future update, not to exceed June 30, 2010. This document should include detailed implementation measures based on objective -based policies that match realistic projections of the County's future water supplies. These objectives, policies and implementation measures should address imported supply constraints, including catastrophic outages and incorporate the realistic Response to Grand Jury Report on "Paper Water - Does Orange County Have a Reliable Future ?" September 8, 2009 Page 4 availability and timing of "new" water sources such as desalination, contaminated groundwater reclamation and surface water recycling. (Findings F.1, F.1(a), F.1(b), F.2, F.2(a) and F.2(b)) R.2: Each Orange County retail and wholesale water agency should affirm its responsibility to develop new, additional, innovative public outreach programs, beyond water conservation and rationing programs, to expose the larger issues surrounding water supply constraints facing Orange County. The objective should be to connect the public with the problem. The outreach effort should entail a water emergency exercise that simulates a complete, sudden break in imported water deliveries. The exercise should be aimed directly at the public and enlist widespread public participation on a recurring basis beginning June 30, 2010. This recommendation may be satisfied by a multi- agency exercise but the inability to coordinate such an event should not preclude the individual agency's responsibility. (Finding F.2, F.2(a) and F.2(b)) R.3: Each MWDOC member agency should reaffirm to L:AFCo that it will assign the resources necessary to expediently resolve regional governance issues. While the subject study is being facilitated by LAFCo, the options are with the agencies to decide what is best for all. Once conclusions are reached, the parties need to agree quickly and, hopefully, unanimously to adopt a course of action. (Finding F.3, F.3(a), F.3(b) and F.3 (c)) R.4: Each Orange County agency should affirm its commitment to a fair -share financial responsibility in completing the emergency water supply network for the entire County. The entire County should be prepared together for any conditions of drought, natural or human - caused disaster, or any other catastrophic disruption. WEROC should commence meetings of all parties, to facilitate consensus on an equitable funding /financing agreement. (Finding F.4, FA(a) and FA(b)) Allowable Responses to the Grand Jury Report: The following are the only proscribed responses that will satisfy the Grand Jury: For Findings: (1) The respondent agrees with the finding. (2) The respondent disagrees wholly or partially with the finding, in which case the response shall specify the portion of the finding that is disputed and shall include an explanation of the reasons therefore. For Recommendations: (1) The recommendation has been implemented, with a summary regarding the implemented action. Response to Grand Jury Report on "Paper Water - Does Orange County Have a Reliable Future ?" September 8, 2009 Page 5 (2) The recommendation has not yet been implemented, but will be implemented in the future, with a timeframe for implementation. (3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This timeframe shall not exceed six months from the date of publication of the grand jury report. (4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation therefore. Proposed Newport Beach Responses: Staff considered the Grand Jury's findings and recommendations in light of Newport Beach's water supply situation, water conservation efforts and planning practices. Utilities Director George Murdoch attended joint meetings at the Municipal Water District of Orange County (MWDOC) along with Water District and City representatives to discuss the report and suggest recommended responses. In regards to the planning element, Assistant City Manager Sharon Wood met with Orange County Planning Directors to address responses to the findings and recommendations related to land use planning. The draft response prepared by staff (Attachment "B ") is attached for review and comment. Staff is recommending that Newport Beach agree with nine of the findings, disagree with two of the findings, and partially disagree with two of the findings. We disagree that there is inadequate coordination between the City's planning agency and Newport Beach's water supply agencies; disagree that the water agencies that serve Newport Beach have avoided participating in growth management decisions; and partially disagree that the difference in groundwater availability in north and south Orange County provides opportunities for long -term solutions. Newport Beach staff, and the other water agencies with whom we work, believe that this finding is not clear. Our concern is that it may be implying that the groundwater supply developed at the expense of north county agencies be used to supply south county, when the basin is not even sufficient to meet all of north county's needs. Finally, we do not think it is appropriate for the City Council to agree with the comment that citizens and interest groups do not appear to grasp the seriousness of the water supply situation. With regard to the recommendations, staff does not recommend that a Water Element be added to our General Plan, as water issues are already addressed in the Natural Resources Element. Staff notes that Newport Beach is already developing public outreach programs participating in emergency response planning. However, we do not believe that the recommendation with regard to a water emergency exercise with widespread public participation should be implemented. Newport Beach conducts Response to Grand Jury Report on "Paper Water - Does Orange County Have a Reliable Future ?" September 8, 2009 Page 6 regular emergency exercises on a variety of scenarios, and it would be impractical to have a water emergency mandated when other scenarios are not. Staff recommends that the City continue to work with LAFCO on governance issues, and continue our work with WEROC on emergency planning and infrastructure improvements. Environmental Review: Staff recommends the City Council find that the City's response to the Grand Jury's report is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Prepared and Submitted by: 4%AII nl� Sharon Wood, Assistant City Manager i _ eorg Mu doch, Utilities Director /_[[tl7rTiTMMI "A" — Grand Jury Report titled "Paper Water" — Does Orange County Have a Reliable Future? "B" — Draft Response Letter Water'" — Does Orange County Have A Reliable Future? Summary "Paper water" is an illusion. It is a term used in the water industry that represents an entitlement, exist- ing only on paper, which agencies can expect to receive from state and federal water projects based on pro- jections and expectations. The gap between allocated "paper water" and available "real water" can be dramatic. This term may succinctly define Orange County's water future as judicial rulings systemati- cally continue to remove available supplies from the reach of Orange County's consumers. The Grand Jury has learned from multiple, expert sources that Orange County's water supply is very vulnerable to extended outages from catastrophic disruptions and other long -tens system failures. These are issues above and beyond concerns of drought. Critical parts of the water supply infrastructure upon which much of California and Orange County relies is in a deplor- able state of disrepair and neglect. The Grand Jury investigated how Orange County's cities, water districts, residents and businesses are --or are not — planning for and responding to a profound redistri- bution of water supplies away from Orange County, with the potential of affecting its residents' quality of life for generations. The following excerpts from this report highlight some signiicant issues that led the Grand Jury to reach conclusions from which it has posed a series of key findings and recommendations: On the State Water Project... "Predictions are for a 67% chance of drastic levee failures sometime during the next 25 years. In a seismic failure, sci- entific models predict massive areas ofthe Delta inundated with a reverse flow of seawater from the San Francisco Bay. Fresh water in the Delta will be rendered useless for agri- cultural irrigation. Moreover, the drinking water supply to southern California would be destroyed for two to four years, or longer." On water from northern Califor- nia... "...for the first time in Metro- politan's 80 year history, the agency is projecting a sig- nificant drawdown in its water reserves.... Metropolitan's water reserves are being rap- idly depleted and the ability to refill its reservoirs has become increasingly problematic." On water from the Colorado River... "The assumption that ... we will continue to find new sources of water ... is wrong. Those days are over.... Every source of water coming into southern California from afar ... is increasingly unreliable." On coordination of land -use planning with water resources plan- ning... "... land planning and wa- ter resources planning have distinctly different, highly complex parameters that drive their technical analyses and decision - making processes. Attachment "A" The unique complexities of these professions tend to deter either side from interacting effectively." On public awareness... "...the residents of Orange County do not seem to under- stand the perilous conditions within which they live. Orange County water consumers have not, to any significant degree, experienced long - duration water supply outages. The public's consideration for water supply typically starts and stops at the faucet handle as they expect, with every turn, dependable delivery of high - quality, safe, clean water." On water reliability for south Orange County... "Approximately 95 percent of south Orange County's water is imported from northern California and the Colorado River and ... sent 35 miles to south County via two, aging pipelines, traversing active seismic faults." On emergency water supply planning... "The current emergency relief through Orange County water reliability planning is approxi- mately ... 10 percent of what is needed [The remainder] will arrive when aplanned array of pump, pipeline, treatment and reservoir projects is built ... as well as [having] available brackish and seawater puri- fication systems ... for south Orange County. " 2008 -2009 Orange County Grand Jury Page 1 "Paper Water" — Does Orange County Have a Reliable Future? On Orange County's groundwa- ter resources... "Water experts ... univer- sally praise the innovative and effective methods by which Orange County has protected and managed its innate water resources. In particular, its groundwater aquifer is an in- credibly rich natural resource that is the envy of many areas in the country challenged by depleted and damaged water tables." On the governance of Orange County's fragmented, autonomous water resources agencies... "The MWDOC member agencies need to resolve their differences and dedicate themselves to a unified vision, whether it be continuing with MWDOC under a modified agreement or creating a new, unified, County-wide water authority." This report offers several ways to strengthen government processes whereby the residents and decision makers of Orange County will be knowledgeable about the County's water supplies. It also pinpoints areas needing attention by water agencies to become as prepared as possible for any potential adverse water supply event. These issues are discussed more fully in this report. It is important to recognize that the Grand Jury found all the agencies it contacted to be performing their duties profession- ally and with due diligence. This is reassuring but it neither solves the underlying problems nor absolves the officials. More needs to be done. Reason for Investigation News reports and alarming warnings from knowledgeable wa- ter officials throughout California have raised serious concerns: (1) Supply deficiencies are becoming critical due to a prolonged drought. (2) Court rulings intended to pro- tect environmental impacts in the Sacramento -San Joaquin Delta and redistribute water rights from the Colorado River have forced drastic supply cutbacks. (3) Water delivery infrastructure is in a precarious and deteriorating condition and subject to severe damage in the event of seismic and other natural forces. The current, unusually severe economic contraction affecting the home - building market has slowed population growth statewide. If conditions were different, a more controversial public policy debate would likely be occurring over the accuracy of adequate water supply projections to serve these develop- ments. This situation is in dramatic contrast to major projects receiving environmental approval even as re- cently as within the past five years. The Grand Jury reviewed environmental and planning docu- ments that were approved in 2004, for 14,000 homes in southern Orange County. Water supply for this extensive, planned community received virtually no overt concern aside from a brief discussion to ad- dress growth- inducement and emer- gency outages within the supplying water district's system.' No com- ments on water supply were found from any environmental agency, in contrast to the project's extensive debate over traffic /transportation and flora/fauna impacts. Accurate water supply projec- tions are elusive at best and are the reason we are in our current situation. A "water emergency" is a result of a complex interrelated series of actions and conditions. Conservation - and then rationing - are the first steps in controlling the situation. However, increased demand is inherent in population growth. Legislation was enacted within the past eight years to in- crease the responsible coordination between approval of projects that induce growth in population and identification of water supplies to support increased demand. Cali- fornia Government Code Sections 66455.3 and 66473.7 requires iden- tification of adequate potable water supplies to serve a planned devel- opment project based on at least 20 years of historical data. California Water Code Sections 10631, 10656, 10910, 10911, 10912, 10915 and 10657 require Water Supply As- sessments (WSA's.) These laws, commonly referred to respectively as SB 221 and SB 610, are viewed by some as environmentalist - driven mechanisms for curtailing growth.' Other water experts involved with the crafting of these bills have indicated that the legislation does not go far enough since only projects over 500 dwelling units are required to comply with these laws. Regardless, these measures have helped to place a greater im- portance on responsible planning, identifying dependable, long -term water supplies preceding major development approvals. This seems not only reasonable but responsible. The Grand Jury desired to assess the following: • whether and to what extent the County's water supplies are vulnerable to major dis- ruption to what extent the residents and decision makers are aware of the County's water supply conditions how the development project Page 2 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? approval process is conducted in Orange County with re- spect to water supplies what measures are being taken by water managers to ensure the integrity of the County's water delivery systems how public awareness, the project review process and the County's water system integ- rity may be strengthened Method of Investigation As part of this investigation, the Grand Jury researched numerous documents obtained from expert sources and interviewed representa- tives of numerous agencies. Agen- cies and their staff consulted during this study included the following: • Major water retailers (water districts and cities) both in Orange County and adjacent counties • Water wholesalers such as the Municipal Water District of Orange County ( MWDOC) • Groundwater purveyors both inside Orange County and in adjacent counties • Local agency planning depart- ments Renowned academic authori- ties who have studied Califor- nia's unique water resources issues for decades. The Grand Jury visited a number of local facilities that have demonstrated innovative means of producing "new" water such as Or- ange County Water District's (OC- WD's) Groundwater Replenishment System and Irvine Ranch Water District's Deep Aquifer Treatment System. It observed the state of southern California's water supply on a three -day inspection of the immense State Water Project. This system, along with the Colorado River Aqueduct, conveys at least 50 percent of the water consumed by Orange County. The study included review of authoritative textbooks and documentaries that provided an overview of cur- rent conditions as they affect Orange County, the region and the nation. From these inter- views and investiga- tions, a repetitive pattern of concern emerged over many key issues. They were seen to threaten the avail- ability of adequate water supply to support California's growth. reached reduced levels that are worrisome. Diamond Valley Lake, Metropolitan's newest reservoir built to provide emergency stor- age, is today less than one -half full. Exhibit A Orange County Water Supply Sources in FY 07 -08 State Water MWater ebropdDistitan Pmiect� rict 14 Colorado River 258,000 AF Regular 0 AF 0 AF In -Lieu Replan ante Ana River San Gabriel Basin 213,000 AF 10,000 AF MET water to f Santiago Ck. Berner 5,000 AF 6,000 AF (est.) GcWD Basin Groundwater . ` small Local 360,000 AF used ` Basins 4,000 AF Incidental Recharge 46,000 AF lest) Background and Facts Organizational Structure Delivering Orange County's Water Supply Orange County relies heavily on imported water for its on -going supply as well as much of its groundwater storage replenishment needs. Exhibit A depicts the sources of supply and flow volumes. Im- ported water from Metropolitan Water District of Southern Cali- fornia (Metropolitan) constitutes over one half of Orange County's supply. Metropolitan pumps its supply through aqueducts from the State Water Project in northern Califor- nia and through pipelines from the Colorado River along California's easterly border with Nevada and Arizona. Persistent drought condi- tions have compromised the State Water Project's as well as the Colorado River's supplies. Res- ervoirs and dammed storage have ter: yuw ..a,e 36,000 AF Irrigation, etc- .000 AF imo GW Basin Most of the immediate impact of this has been seen in cutbacks for agricultural uses and groundwater replenishment. Added concerns have arisen most recently over the December 14, 2007 ruling by U.S. District Court Judge Oliver W. Wanger in what has become known as the " Wanger Decision" (Case No. 1:05-ev- 1207 OWW GSA) which adversely affects the State Water Project. The Colorado River water allocations have also suffered significant court decisions adverse to southern California. Exhibit B depicts how water is distributed within Orange County. MWDOC is the predominant intermediary that buys imported water from Metropolitan and sells it to Orange County's retail water agencies (cities and special dis- tricts). Note that OCWD is a major provider of groundwater only, generally limited to the cities in the north Orange County area. Exhibit C demonstrates how widespread MWDOC's influence is 2008 -2009 Orange County Grand Jury Page 3 "Paper Water" — Does Orange County Have a Reliable Future? XM'DOC Exhibit B in Orange County. MWDOC repre- sents nearly every water agency in Orange County on the Metropolitan Board of Directors. However, three cities (Anaheim, Fullerton and San- ta Ana) are direct member agencies to Metropolitan. MWDOC's role as the wholesaler to every corner of the County is an important facet of this investigation. Exhibit D (on the follow- ing page) depicts the general boundaries of the Orange County groundwater basin administered by OCWD. This water is accessible, by law, only to cities and special districts overlying the 350- square- mile service area that serves 75 percent of the County's three million residents. Typically, the agencies with groundwater rights draw approximately two- thirds of their supplies from the groundwater basin and purchase their remain- ing demand from Metropolitan via MWDOC. Three cities (Anaheim, Fullerton and Santa Ana) purchase their water from Metropolitan directly. Page 4 Orange County's Precarious Water Systems Orange County's water supplies, from all imported sources, are in great peril. Metropolitan has de- veloped an extensive infrastructure backbone to bring water to southern California. It is the predominant supplier of imported water to every area within Orange County. These supplies are completely dependent on two primary, man-made convey- ances: (1) the State Water Project which taps the Sierra Nevada mountain range snow melt in north - em California and (2) the Colorado River Aqueduct which intercepts Exhibit C ..IIM•MNOJCSaM.f 4N t �.::: j ..ma woac ew ao« roN wam.ym%m.m•, Rpn+olFmeryaiWry • �. e MWDOC Service Area and Member Agencies 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? runoff from the west slopes of the Rocky Mountains, as far north as Wyoming, via the Colorado River. The current water supply situa- tion in Metropolitan's service area and throughout the state of Califor- nia is critically tenuous and signals 2007 -2009 as one of California's most severely -dry three -year periods in over 100 years. In ad- dition to the lack of precipitation in early 2008, the following warm spring season resulted in early depletion of the mountain snow- pack. This is considered the largest "reservoir" for California's water supply to see the state through the ensuing seasons. Without a substantial snowpack leading into spring, California must rely on its man -made reservoirs and stored groundwater to survive the dry seasons. Even though 2009 snow pack achieved 80 percent of normal volume, it cannot overcome the depletion caused by the two, previ- ous, record -low years, especially when hobbled by the court- enacted pumping restrictions. Until now, consumers' conservation efforts, combined with water manag- ers' programs to install low -flow fixtures, agricultural usage cutbacks and other restrictions, have been effective in substantially reducing consumer demand. Unfortunately, this has finally fallen short and local water agencies are predicting a 50% likelihood of embarking on water rationing as summer 2009 approaches. In fact, several agen- cies have already instituted the first stages of rationing as a result of Metropolitan's adopted Water Supply Allocation Plan which takes effect July 1, 2009. The 2008 -2009 Grand Jury is extremely concerned that residents, planners and decision makers in Orange County are not doing enough to recognize and publicize the perilous condition of our water supplies. They are not giving this issue adequate consideration in the process of approving plans for the growth of Orange County. The State Water Project Metropolitan, on average, does not have sufficient water supplies to meet demands. Watersheds are currently providing 650 thousand acre -feet (about 212 billion gallons) lower than normal runoff due to reduced rainfall and snowpack. The Wanger Decision ordered the State Water Project to reduce pumping from the Sacramento -San Joa- quin River Delta due to identified, adverse environmental impacts on a threatened fish species, the Delta smelt. In April, 2008, Judge Wanger issued a second ruling, further cutting water exports to protect the declining populations of Chinook salmon' Judge Wanger's rulings resulted in Metropolitan curtailing delivery of 500 thousand acre -feet (about 163 billion gallons) of water from northern California in 2008. These lost resources would have pro- vided water for over seven million Californians for a year. As a result, for the first time in Metropolitan's 80 -year history, the agency is projecting a significant drawdown in its water reserves. Before the Wanger Decision, projections were for surplus conditions 70 percent of the time and reserve drawdowns re- quired 30 percent of the time. Now, this projection is reversed with surplus conditions expected 30 per- cent of the time and drawdowns 70 percent of the time. Metropolitan's water reserves are being rapidly depleted and the ability to refill its reservoirs has become increasingly problematic. 2008 -2009 Orange County Grand Jury Page 5 "Paper Water" — Does Orange County Have a Reliable Future? Located in California's Butte County, Lake Oroville is the farthest upper reach of the State Water Project. Exhibits E -I and E -2 provide a startling contrast of the drastic changes that had occurred in fewer than three years. In Febru- ary 2009, Oroville Dam's storage was at 30 percent of its capacity. Because of near- average precipi- tation this year, the reservoir has recovered to nearly 60 percent of its capacity. But even with some gains in rainfall and snowpack in 2009, conditions are still below normal and the drought continues to stifle the buildup of reserves. No State Water Project water delivered to southern California and Orange County arrives with- out traversing the Sacramento -San Exhibit E -1 Joaquin Delta (Exhibit F, on the following page). The Delta is a convergence of five major rivers in the Central Valley which have been tamed by mining and agricul- tural operations dating back to the mid -19th century. This was accom- plished by building what is now an 1,100 -mile "spider web" of pre- dominantly privately owned, non - engineered, earthen levees. From its accumulated data, Metropolitan has asserted the following with regard to the Delta: • There have been at least 166 documented levee failures over the last 109 years, caus- ing geotechnical experts to describe the situation in a rather cynical manner: There are two types of levees in the Delta. There are those Exhibit E -2 that have failed and there are those that will fail. • Predictions are for a 67% chance of drastic levee failures sometime during the next 25 years. Most likely, the failures will be associated with either a 6.7 or greater magnitude seismic event, severe earth subsidence or a 100 -year intensity flood. • In a seismic failure, scientific models predict massive areas of the Delta inundated with a reverse flow of seawater from the San Francisco Bay. Fresh water in the Delta will be rendered useless for agricul- tural irrigation. Moreover, the drinking water supply to southern California would be destroyed for two to four years, or longer. • The potential for calamity has been recognized by recent Legislature budget discus- sions. It also has received a high priority with the Gover- nor when he created the "Blue Ribbon Task Force" that led to the 2007 Delta Prsion report. However, action for urgent, preemptive levee res- torations has not materialized. Even without a catastrophic incident, experts are forewarning of major, long -range degradation of the Delta ecosystem. California needs to prepare for the inevitable end of the Delta's role as a massive drinking water conveyance as its salinity increases to non - potable, brackish levels' The Colorado River Aqueduct The original allocations of Colorado River water to the south- western states and Mexico were sealed by the 1922 Colorado River Compact and the Boulder Canyon Page 6 2008 -2009 Orange County Grand Jury Exhibit F "Paper Water" — Does Orange County Have a Reliable Future? Map of the Sacramento -San Joaquin Delta and Suisun Marsh r 1 ,e Project Act of 1928. In retrospect, water planners today recognize that those allocations were based on overly optimistic assumptions. The historical hydrographic data of that time was unusually wet. Also, the population projections for all the now clearly- identified high - growth areas of the southwestern states, and southern California in particu- lar, were notoriously short sighted Two critical forces have created major problems for the viability of the Colorado River: (1) The Colora- do River Basin at Lake Powell has been suffering from severe drought conditions since October 1999. (2) The 2003 Colorado River Quan- tification Settlement Agreement, involving Metropolitan, San Diego County Water Authority, Coachella Valley Water District, Imperial Irrigation District and numerous other federal, state and regional agencies and interest groups have redistributed the available water within southern California. Deliver- ies to Metropolitan are down some 400,000 acre -feet (130 billion gal- lons) as a result. Considering the plight of our Colorado River allocation, Dr. Peter Gleick, President of the Pacific Institute, in 2008, observed the following: "The assumption that southern California can grow as much as it wants and that we will continue to find new sources of water ... is wrong. Those days are over.... Every source of water coming into southern California from afar ... is increasingly unreli- able."' Researchers have posed the con- cern whether the Colorado River, which provides up to three - fourths of Metropolitan's supply, will cease to be a viable water source within the next 20 years. Recently, U.S. Secretary of the Interior Ken Salazar of Colorado, when he was a Senate member of the Energy & Natural Resources Commission, asserted that water in the United States has always been taken for granted. As a result, as might be expected, the only time people understand the importance of water is when they don't have it. In sum - mary, experts have sent this warn- ing: "The water crisis is much more significant to the world than is the energy crisis... Try living without water... it doesn't work . 114 The following is a synopsis of comments uncovered by the Grand Jury in the context of the future of the Colorado River: • Mark Pisano, past Executive Director of the Southern Cali- forn ia Association ofGovern- ments, in the context of water supplies, predicted the fol- lowing: "We're going to grow differently in this century than we did in the past century.... [L]arge regions are going to 2008 -2009 Orange County Grand Jury Page 7 "Paper Water" — Does Orange County Have a Reliable Future? have to be much more sensi- tive to what supports them en- vironmentally so that they're sustainable ... and if they're not sensitive to [this] they're going to have real difficulty."' • Secretary Salazar stated that, in communities where there is not a dependable, long- term source of water, there will be "... an explosion of controversy because land -use planners have not done what they should have done."' • Scripps Institution of Ocean- ography researchers Tim Bar- nett and David Pierce, wrote a paper, When will Lake Mead go dry ?, that was accepted for publication in the journal Water Resources Research, by the American Geophysical Union. They concluded that, because of allocation de- mand, aggravated by climate changes, the reservoirs on the Colorado River system will never fill again. They further predicted that there is a 50- percent probability Lake Mead will be dry by 2021. Barnett stated that they "... were stunned at the magnitude of the problem and how fast it was coming at us.... Make no mistake, this water problem is not a scientific abstraction, but rather one that will impact each and every one of us that live in the Southwest. "s Environmental Consequences One internationally acclaimed water resources expert has experi- enced and analyzed the effects of severe water shortages worldwide. He offered what he considers to be one of the earliest signs and one of the most tragic long -term, dam- aging outcomes that occur when regions are faced with water crises. Specifically, where water supplies are chronically unable to meet demand in spite of all conserva- tion, rationing and similar cutbacks, essential surface flows begin to drain from environmentally sensi- tive habitats. Wetlands areas begin to desiccate and degrade. Ground- water basin overdrafting creates irreversible geological subsidence, permanently damaging the basin's ability to recover. If water supply desperation reaches those levels, fundamental changes in that aspect of the ecosystem could occur. Land -Use Planning and a Crisis - Oriented Public How do California's statewide water supply issues directly affect Orange County? The Grand Jury found that there are two, equally important points. First, long -range water resources planning takes a major degree of innovation and creativity to establish dependable sources of diversified supply. This includes bringing "new" water to serve new homeowners in the growth areas, and the industry and commerce that sustains them. It also requires a degree of good data analysis to accurately project hydrologic and climatologic data decades into the future. Second, the water resource agencies, the land -use planning agencies and the consumers all need to be equally focused on the possibility of major supply outages to which the County is vulner- able. The Grand Jury found that the water agencies and, in fact, the water industry as a whole, are keenly aware of the inadequacies and potentially disastrous circum- stances California faces. The sense of urgency could not be higher. But it seems that gaining the attention of a crisis - oriented public is a dif- ferent story. The Grand Jury found that planning agencies dealt with these concerns very differently. In fact, water issues seem to be of no more consequence than a noise impact study or a traffic impact analysis. Water resource issues in Orange County demand more than a check box on the environmental review form. Based on what was observed in this investigation, this has not been the case. Johnson and Loux described this issue as a "black box" phenom- enons wherein the professions of land planning and water resources planning have distinctly differ- ent, highly complex parameters that drive their technical analyses and decision - making processes. The unique complexities of these professions tend to deter either side from interacting effectively. Adding to the professionals' difficulties, the residents of Orange County do not seem to understand the perilous conditions within which they live. Orange County water consumers have not, to any significant degree, experienced long- duration water supply out- ages. The public's consideration for water supply typically starts and stops at the faucet handle as they expect, with every turn, dependable delivery of high - quality, safe, clean water. The perception that water sup- plies are taken for granted is an understatement. Water agencies' conservation messages are suc- cessfully making consumers more aware of their responsibility to conserve water resources. But, this is merely a fraction of the larger, more compelling issue. Conserva- tion happens after the problem has been identified. Consumers need to be cognizant of the impacts of Page 8 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? development and the need for deci- sions before land -use decisions are made. Case Studies The Grand Jury interviewed key staff and studied voluminous public records of land -use applications and environmental reviews pertaining to several, recent, major develop- ment proposals in various areas of the County. In each case, the entire land -use decision - making process as it relates to water resources, one of the County's most precious and precarious commodities, was found to be very disappointing. When analyses were required, land -use and development decision makers deferred to the water agencies to solve the water issues. Typically, the input came via a WSA, after which it quickly disappeared from the public dialogue. Public input to express any shred of concern for — or to even question —the long -term viability of potable water resources was conspicuous by its absence. If not relegated to a separate volume of appendices, the water supply reports were found buried hundreds of pages behind other, more "vis- ible," issues raised by vocal constit- uents, never to be heard from again in the public process. In these case studies, the Grand Jury could find little, if an)', ex- pressed concern from any person or responsible agency. This begged the question as to whether the public process is flawed in light of the gravity of our water resources predicament. It also substantiated the inference that, aside from the caveats involved, "...the duty to serve is often viewed as the first, foremost, and perhaps only mission of a water - purveying agency. "� Case Study #1: County of Orange - Rancho Mission Viejo (The Ranch Plan) Development The Rancho Mission Viejo development (known as "The Ranch Plan") is in south Orange County. The County of Orange processed this development over a several -year period, culminat- ing in its adoption by the Board of Supervisors in 2004. This master planned 22,000 acres of land with 7,700 acres designated for 14,000 dwelling units. Other significant elements were established with 130 acres for urban activity centers, 258 acres for business parks, 39 acres for neighborhood retail centers, five golf courses and a 1,079 -acre regional park. The Ranch Plan Program Envi- ronmental Impact Report (EIR) and General Plan Amendment, prepared in 2003, presented exhaustingly detailed analyses of, among other particulars, watershed runoff water quality, traffic circulation impacts and endangered flora and fauna protection. Mention of emergency water storage and concern for temporary water disruption via the imported water connections were limited to a single paragraph. Aside from that outdated discussion, no mention was found of how reliable water supplies would be ensured. Indeed, there was a WSA prepared by Santa Margarita Water District which also fully complied with SB 221 and SB 610 but the Grand Jury found no substantive discussion from its review of the following EIR sections: • Executive Summary: Refer- ences were made to "areas of controversy" voiced during public comments at seeping meetings. No water supply concerns were considered worthy of any mention. • Growth Inducing Impacts: Over a dozen, nearby, devel- opment - related, potentially growth- inducing projects were discussed, each making no mention of water supply concerns. • Water Resources: This per- tained primarily to surface water quality and runoff hydrology, with absolutely no discussion of potable water resources. There was seemingly no con- cern for water supply scenarios that could leave 14,000 homes without water. Indeed, the following EIR excerpt clearly established the priorities: "Due to the nature of the project, potential impacts to bio- logical resources, hydrologic condi- tions and [runoff) water quality are of primary concern." The EIR process solicited com- ments not only from the public but also via the State Clearinghouse from every agency and environ- mental group in the state. There were records of interminable (albeit important) discussions and debates over such issues as traffic and en- dangered species but potable water supply was a non - issue. It was not even deemed to be of enough rel- evance to be mentioned in the 2004 staff report when the project was presented to the Board of Supervi- sors. The aforementioned 2003 WSA was appended to The Ranch Plan. It was a comprehensively written document that assessed California's water future. The WSA provided the required numerical justification for 25 years of water to this area, based on a series of assumptions that have long since been supersed- ed by changed conditions. The nu- merous, crucial effects over just the past few years have great potential to derail many of the critical deci- sions made in the recently adopted 2006 -2009 Orange County Grand Jury Page 9 "Paper Water" — Does Orange County Have a Reliable Future? plan. The Grand Jury's view on the state of affairs is that a six-year- old water planning document, with a 25 -year projection upon which permanent development is hinged, leaves much to be desired. It makes no sense to have so little attention paid to a natural resource with such a profound impact. Despite all this, the 2003 WSA was apparently enough for the deci- sion makers and the public. Despite the fact that this development will take place in a water - deficient area of the County that relies virtually entirely on imported supplies from Metropolitan, the Grand Jury could find not one comment at all from the general public, let alone any expression of concern during the public review period. The agencies have argued that the absence of comment is not necessarily indica- tive of a lack of concern but rather a recognition that all issues were addressed. The Grand Jury, for all the reasons cited in this report, has found otherwise and that there should be concern. Clearly, the agencies process- ing The Ranch Plan followed the mandatory processes to determine adequate water supplies, using es- tablished procedures and their best efforts to provide professional data to decision makers. Nonetheless, the glaring point of this investiga- tion is that there is a serious discon- nect in the process where critical data are presented seemingly as footnotes and decisions are made in a manner that masks the situa- tion from public awareness. This was certainly not found to have been done intentionally but rather was the inevitable byproduct of the sheer volume and complexity of the documents. Typically, it is safe to presume that anyone lacking an engineer- ing degree is challenged in com- prehending the complex technical analyses of water supply issues and the concomitant impacts of various adverse scenarios. The tendency is to accept WSAs on face value and not challenge the caveats and quali- fying statements that render these assessments tentative at best. W SAs providing 20 to 25 -year projections on land uses that can be expected to be in place for at least 100 years can encounter dramatic changes. The 2003 WSA for The Ranch Plan was prepared long before several major changes were made that af- fect the dependability of water sup- plies to southern California. There should be, at least, a mitigation and monitoring reporting requirement in the Plan. Optimally, the question about an update to the WSA should be raised now, not later when specific project development permit applications are submitted. At that point, developers, in the heat o£fi- nancing time constraints, will be in no mood to deal with the obstacles of additional engineering analyses; rather, they will do whatever it takes to demand that their project approvals be granted. Case Study #2: City of Orange — Santiago Hills II and East Orange Areas Planned Community Development In a very similar fashion to south Orange County, the central Orange County city of Orange, is facilitating aggressive expansion within its Sphere of Influence east and south of the Peters Canyon region of the Irvine Ranch. The development agreement for this area provided vested rights to development to the Irvine Com- pany in 2005 for approximately 4,000 dwelling units. Irvine Ranch Water District (the designated water purveyor for this area) provided a series of "Water Supply Verifica- tions" subsequent to this agreement to carry the project for 20 years. While the water supply veri- fications conclude that sufficient supplies are available pursuant to state law, it is interesting to as- sess the methodologies, caveats and disclaimers accompanying the certification sheet. In particular, the water supplier affirms that it "... does not allocate particular supplies to any project, but identifies total supplies for its service area." It would be safe to conclude that both the land planners and the water providers were satisfied that their requirements had been met and, in fact, Irvine Ranch Water District officials have subsequently empha- sized that this is the case and that sufficient supplies are available. Although no documents were found to evidence their discussions, the officials have also emphasized that the agencies have had a dialog re- garding the conditions under which the water supplies would be of- fered and District staff testified on pertinent issues at the City Council public hearings. As with the The Ranch Plan, the decisions on this major project establish commitments far beyond the planning horizon. It is unclear how a developer's vested rights may prevail over any changes in the WSA over time. Case Study #3: City of Brea - Canyon Crest Development In north Orange County, the city of Brea, in 2009, approved (subject to appeal) the development of 165 homes on 367 acres of hillside pas- ture and open space surrounded by Chino Hills State Park, near Carbon Canyon Road. As would be expected, the project environmental review Page 10 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? extensively evaluated the woodland habitat and wildlife corridors. An elaborate and extensive monitoring and mitigation program was devel- oped for the oak - walnut woodland habitat. Because the size of this project fell short of the trigger points for SB 221 and SB 610, no WSA was required. In fact, the BIR concludes specifically that "[n]o impact will result from the Project involving the acquisition of new or expansion of existing water supply entitlements or resources." This was the only mention found con- cerning water supply by either the environmental consultant or by any person, agency or group concerned with the impacts of this project. Admittedly, this single proj- ect would have a nominal annual demand of perhaps 100 acre -feet (about 33 million gallons), on the County's water supply, which would add about one percent to Brea's annual demand. But, it is indicative of how the cumulative impacts of such projects can incre- mentally affect the overall supply. Steps Toward Understanding A better interface between land - use planners and water planners has evolved over the years with the assistance of the State Legislature. Since the 1983 adoption of the Urban Water Management Plan - ning Act (California Water Code Section 10610 et seq), California has required each water purveyor to prepare and submit, every five years, an Urban Water Management Plan (UWMP). This is a founda- tional document and a source of information for long -range water planning. Cities and counties are required to use these documents when preparing their General Plans. The UWMP, while important, is a fairly general planning docu- ment. It was not until 2001 (after most of Orange County already had been developed) that the State seriously acknowledged that water supply and local land -use devel- opment planning are inextricably intertwined. The California Legis- lature's SB 221 and SB 610 exem- plify this need for an administrative record in the environmental docu- ments. These laws only apply to large projects and, according to one expert in the water environmental field, do "... little more than raise awareness." Also in 2001, the Legislature passed the Integrated Regional Water Management Planning ( IRWMP) Act, which allows a re- gional water management group to prepare and adopt an IRWMP that encourages local agencies to work cooperatively in managing their entire array of water resources for beneficial use. Innovative Solutions to Long - Term Supply Shortages and the State of Orange County's Water Resources Some experts in the academic and industrial communities con- sider that California's water crises can be avoided by a concerted effort on four fronts: (1) improving water use efficiencies through con- servation, water - saving appliances and technological advances (e.g. "smart" irrigation timers); (2) ad- vancing innovative water recycling and reuse strategies; (3) improving storm water runoff capture, storage and groundwater recharge; and (4) securing water transfer agreements between agencies to effectively balance supply and demand. The Grand Jury found that Orange County water agencies are, in many cases, setting the example of best practices through sophisticated ap- plications on each of these fronts. In addition, concerted public /pri- vate efforts are underway to build at least two major seawater desali- nation plants in Orange County. Combined with a third desalina- tion plant near Camp Pendleton, planned jointly with the San Diego County Water Authority, coastal desalination projects will supply up to 140,000 acre-feet (45.6 billion gallons) per year of new water. Orange County water agencies are pursuing long -term water trans- fers outside the County boundar- ies. An agreement with the South Feather Water and Power Agency in northern California was being negotiated to bring up to 10,000 acre -feet (about 3.3 billion gallons) per year to Orange County.' While this project now appears unlikely to be consummated, there are other, similar efforts underway that are considered to be more viable. Santa Margarita Water District's transfer agreement with Cucamon- ga Valley Water District also rep- resents individual agency attempts to secure firm water contracts. In this case, 4,250 acre -feet (about 1.4 billion gallons) per year would be allocated to Orange County from surplus water in an entirely separate groundwater basin. This basin re- sides within Metropolitan's service area, which helps to facilitate the actual water transfer. Irvine Ranch Water District is developing a water banking pro- gram in partnership with the central valley Rosedale -Rio Bravo Water Storage District near Bakersfield in Kern County. This arrangement will provide up to 17,500 acre -feet (5.7 billion gallons) per year from groundwater recharge and recovery facilities, along with expanding the Cross Valley Canal to transfer 2008 -2009 Orange County Grand Jury Page 11 "Paper Water" — Does Orange County Have a Reliable Future? stored water to the Irvine Ranch facilities The Grand Jury was particu- larly impressed with the OCWD's Ground Water Replenishment System (GWRS) established in conjunction with its adjacent waste- water treatment agency, the Orange County Sanitation District. The Grand Jury witnessed the GWRS while in operation, delivering 72,000 acre -feet (about 23.5 billion gallons) per year of ultra -pure water for direct, potable reuse via 1,600 acres of percolation basins in north Orange County. This is about 10 to 14% of total basin demand and production is expected to expand to 100,000 acre -feet (32.6 billion gal- lons) per year within the next three years. The 2003 -2004 Orange County Grand Jury also recognized the GWRS while it was still in its implementation stages. This unique project is the largest of its kind in the world. It exemplifies how technology is providing innovative solutions to environmental prob- lems and insight to our future. The capital cost of the GWRS system was approximately $500 million. While immensely expen- sive to build and operate, federal and state grants and subsidies have reduced the unit cost of the product water to approximately $650 per acre -foot. Since imported Metro- politan water is anticipated to pass $700 per acre -foot this summer, the break -even point may be imminent. As water becomes increasingly scarce and prices rise accordingly, recycled wastewater systems, even those meeting stringent human consumption requirements, are anticipated to become more com- petitively cost effective. All these innovative programs are admirable but they do not solve the problem. Shortfalls from the State Water Project and the Colora- do River of the magnitudes cited by Metropolitan and others cannot be made up by these relatively limited efforts. Response to Catastrophic Supply Interruptions Regional shortages: The most serious water supply concerns af- fecting Orange County lie outside its boundaries. Metropolitan has elaborate response plans and infra- structure in place to deal with sup- ply curtailments; the most recent notable example is its Diamond Valley Lake near Hemet. This is an 800 - thousand acre-foot (260 billion gallons) reservoir, of which about one -half is reserved for catastrophic emergencies. Completed in 1999, Diamond Valley took four years to fill with a six -month emergency water supply and is considered the most important achievement in pro- tecting southern California against a State Water Project system out- age. County -wide shortages: If circumstances dictate that Orange County is forced into being self - sufficient for an extended period, how will it survive? Orange County water managers have been diligent in preparing to overcome worst - case water delivery interruption scenarios. In times of dire need, be- ing able to instantly re -route water from the north County groundwater basin, to the south County supply lines, through pre - established pipe- line routes, is crucial. Beginning in 1983, the Orange County water agencies developed a Water Supply Emergence Pre- paredness Plan, jointly funded by MWDOC and OCWD, and supported by the Orange County Water Association. This eventually resulted in the formation of the Wa- ter Emergency Response Organiza- tion of Orange County (WEROC), a single point of coordination for every conceivable type of acute, water - related disaster in Orange County. Approximately 95 percent of south Orange County's water is imported from northern California and the Colorado River and de- livered to Metropolitan filtration plants in north Orange County before it is sent 35 miles to south County via two aging pipelines traversing active seismic faults. The Orange County Water System Reliability Study, along with the South Orange County Water Reli- ability Study established an array of project remedies to address specific threats to water transmission and distribution infrastructure through- out Orange County and, in particu- lar, south Orange County, in times of long -term crisis. On August I5, 2001, and again on April 23, 2003, MWDOC and OCWD adopted a Memorandum of Understanding to accomplish among other objec- tives, an on -going implementation monitoring effort to help facilitate the various agencies involved in completing these projects. The current emergency relief through Orange County water reliability planning is approxi- mately 3,000 acre -feet (about I billion gallons) from an emergency connection to Irvine Ranch Water District's Dyer Road well field in Santa Ana. This provides only about 10 percent of what is needed. The other 27,000 acre -feet (about 9 billion gallons) will arrive when a planned array of pump, pipeline, treatment and reservoir projects is built. These projects will be able to transfer and store emergency potable water as well as have avail- Page 12 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? Sx,WaRegu.'W WfPNtm�ahrape GW «e�q SeMrci1 Coulal pVtlmI50LWA Exhibit G X11 „k ,�Fru able brackish and seawater purifica- tion systems to create "new" water for south Orange County. These projects are depicted in Exhibit G. These projects vary signifi- cantly in their planning, design and construction complexities as well as in their funding requirements. Completion of the entire system is not expected until at least 2015. Once completed, the projects will serve daily needs while being ready to deliver emergency reserves if the supply network becomes disrupted at any point. , Recommended Pim Emerging self - sufficiency management strategies: Several efforts have commenced to maxi- mize the ability of Orange County to be self - sustaining, especially in times of crisis. The most compre- hensive planning underway was begun in 2000, headed by the OC Watersheds Division of OC Public Works. It consolidates efforts in ur- ban runoff watershed management and regional water resources plan- ning strategies. A comprehensive approach is underway, addressing the County's 13 watersheds with several objectives: • Protect communities from drought • Enhance local water supply and system reliability • Ensure continued water security • Optimize watershed and coastal resources • Improve watershed water quality • Safeguard endangered species habitat Nearly 100 projects have been identified that encompass, among other facets, the following: • Water supply reliability, water conservation and water use efficiency • Storm water capture, storage, treatment and management • Creation and enhancement of wetlands and acquisition, protection, and restoration of open space and watershed lands • Non -point source pollution reduction, management and monitoring • Groundwater recharge and management • Water banking, water ex- change, water reclamation, desalting, and other treatment technologies Disaster Planning: In Novem- ber, 2008, the entire County of Orange participated in an exercise dubbed "Golden Guardian," based on a Richter Scale magnitude 7.8 . seismic event. Part of this exercise was to include dealing with the ex- pected effects of disrupted local and County-wide water transmission and distribution systems. WEROC volunteers participated in this event to test the water agencies' ability to respond effectively during emer- gency events. The lessons learned 2008 -2009 Orange County Grand Jury Page 13 0 0 W tel N 2oAm Emerging self - sufficiency management strategies: Several efforts have commenced to maxi- mize the ability of Orange County to be self - sustaining, especially in times of crisis. The most compre- hensive planning underway was begun in 2000, headed by the OC Watersheds Division of OC Public Works. It consolidates efforts in ur- ban runoff watershed management and regional water resources plan- ning strategies. A comprehensive approach is underway, addressing the County's 13 watersheds with several objectives: • Protect communities from drought • Enhance local water supply and system reliability • Ensure continued water security • Optimize watershed and coastal resources • Improve watershed water quality • Safeguard endangered species habitat Nearly 100 projects have been identified that encompass, among other facets, the following: • Water supply reliability, water conservation and water use efficiency • Storm water capture, storage, treatment and management • Creation and enhancement of wetlands and acquisition, protection, and restoration of open space and watershed lands • Non -point source pollution reduction, management and monitoring • Groundwater recharge and management • Water banking, water ex- change, water reclamation, desalting, and other treatment technologies Disaster Planning: In Novem- ber, 2008, the entire County of Orange participated in an exercise dubbed "Golden Guardian," based on a Richter Scale magnitude 7.8 . seismic event. Part of this exercise was to include dealing with the ex- pected effects of disrupted local and County-wide water transmission and distribution systems. WEROC volunteers participated in this event to test the water agencies' ability to respond effectively during emer- gency events. The lessons learned 2008 -2009 Orange County Grand Jury Page 13 "Paper Water" — Does Orange County Have a Reliable Future? from this exercise were valuable in identifying the need for better inte- gration of the individual agencies' responses through WEROC and on to the Orange County Operational Area Emergency Operations Center (EOC). The issues appear to be those requiring improved com- munication rather than inadequate resources. MWDOC and Its Member Agency Conflicts As introduced earlier. MW- DOC, with some exceptions, is the predominant water wholesaler that arranges for Orange County water retailers' imported delivery of Metropolitan water for their customers. MWDOC is solely an administrative agency in that it operates no infrastructure facili- ties that physically deliver water to any of its member agencies, comprised of cities, special dis- tricts and quasi- public companies. Because of its unique connection with nearly every water agency in Orange County, by default it has become the coordinator of many re- gional programs that are generally suited for a centralized, coordinated response. This applies to consistent water conservation plans; compat- ible Urban Water Management Plans; universal customer education outreach; centralized legislative ad- vocacy; and coordinated emergency preparedness. MWDOC also is allocated four seats on Metropolitan's 37 member board of directors. These four mem- bers (not all of them are necessarily MWDOC board members), repre- sent the interests of MWDOC's 28 member agencies. MWDOC was formed in 1951, when Orange County demographics were quite different. Today, it finds its role challenged, primarily by several major, south Orange County member agencies, over some key differences in representation and governance. In June, 2006, MWDOC was anticipating a scheduled Municipal Services Review (MSR) by the Or- ange County Local Agency Forma- tion Commission (LAFCo). LAF- Co's Mission Statement emphasizes that it "... serves the citizens of Orange County by facilitating con- structive changes in governmental structure and boundaries through special studies, programs, and ac- tions that resolve intergovernmental issues, by fostering orderly devel- opment and governance, and by promoting the efficient delivery of services." The MSR process, which is basically a performance audit, is one of the most effective means to accomplish this goal. MWDOC had commenced stakeholder meetings with its mem- ber agency colleagues to resolve key issues of disagreement: • Representation on Metropoli- tan's board of directors • Budget process and fairness of rate structures • Lack of inclusiveness of south County agencies in setting rates • MWDOC's financial involve- ment in local projects (e.g. desalination) • Duplicative services (e.g. leg- islative and public outreach) • Financial reserve policies LAFCo discovered, when it embarked on its MSR process in February, 2007, that there were still major, unresolved issues. It facilitated several meetings to attempt resolution. In November, 2007, after limited success, LAFCo decided to convene a "governance study" with a definite timetable for reaching consensus on conclusions and specific recommendations. The final approval for that effort was given in January, 2008, commenced in June, 2008, and continues to the present time. All 28 member agencies have participated in the governance study. After nearly a year of effort, the feasible revamping options have been narrowed to three: 1. Continuing with MWDOC's current structure, subject to sev- eral administrative adjustments to eliminate the current points of disagreement 2. Dissolving MWDOC and form- ing a new, County -wide water authority 3. Creating a separate south County water authority to, basi- cally, provide similar services now provided by MWDOC but being more responsive and accountable to the unique needs expressed by the south County agencies, particularly for more equitable representation with Metropolitan. The particulars of the gover- nance study discussions are beyond the scope of this investigation so they were not reviewed in detail. From the Grand Jury's perspective of the issues, however, Option 3 seems short sighted. Bifurcating the County into two, basically compet- ing agencies would be counterpro- ductive as Orange County moves into a future with increasingly dif- ficult and contentious water issues. LAFCo has been consolidat- ing agencies where jurisdictional effectiveness would be improved. Splitting a major overseer of the County's water supplies into two jurisdictions would seem to con- tradict LAFCo's previous efforts. LAFCo has a unique role in this discussion as a facilitator. Even though it has hired professional Page 14 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? support consultants and should be as a fresh water conveyance agreements are underway lauded for its initiative, one noted due to uncontrollable salin- to create sources of "new" professor in the field has observed ity increases. This adds more water for Orange County. The that LAFCo may be operating be- apprehension about Orange adequacy of contributions yond its technical abilities to effec- County's water future. from these new sources is tively facilitate the varied, complex Recent court rulings on uncertain. technical issues. environmental habitat protec- Orange County is a unique The M WDOC member agencies tion and water rights alloca- territory with many inher- need to resolve their differences tions have raised the level of ent advantages to endure the and dedicate themselves to a uni- urgency by imposing possibly impending water crises. If Or- fied vision, whether it be continuing permanent cuts to southern ange County's water agencies with M WDOC under a modified California's formerly reliable, work together seamlessly and agreement or creating a new, uni- traditional water supplies the County's resident consum- fied, County-wide water authority. from northern California and ers become more involved As rate increases mount and water the Colorado River. While stakeholders, a positive out - supplies diminish, the need for uni- the California Department come is much more likely. fication will become increasingly of Water Resources recently Orange County's ground - essential. If a catastrophic event adjusted 2009 State Water water storage resources are occurs, the need for unification will Project deliveries upward to world class, both in innova- become urgent. 30 percent of normal alloca- tive technical superiority and tions, they had, at one point, in their management. Water Conclusions fallen to 10 to 15 percent of experts in both industry and The following conclusions normal. academic institutions univer- raise important concerns over the Orange County's water sup- sally praise the innovative and precarious condition of Orange ply infrastructure and supply effective methods by which County's water resources. More constraints have received Orange County has protected public awareness and process im- minimal attention in the over- and managed its innate water provement regarding water issues all discussion of developing resources. In particular, its must be made as the development Orange County. groundwater aquifer is an in- of Orange County continues. The • Interaction of land planners credibly rich natural resource numerous water agencies in Orange and water planners in the that is the envy of many areas County need to strengthen their development process must be in the country challenged by unified approach in preparing for a improved. depleted and damaged water difficult future. Some of the specific ' Water pricing to pay for the tables. points are as follows: various, necessary, costly sup- Orange County natural water • State Water Project infrastruc- ply sources, under even the storage differs dramatically lure is extremely vulnerable best -case scenarios, will rise between its north and south to catastrophic failures from to levels never before seen. reaches. South Orange Coun- natural events in the Sacra- In this water - scarce region, ty has no groundwater basin, mento -San Joaquin Delta consumers are facing dire making it almost wholly de- and seismic events affecting circumstances regardless of pendent on imported supplies other major water transmis- population growth and hous- from Metropolitan. sion infrastructure. Having ing construction. The County's resources have a two - out -of -three chance of • Public awareness of water allowed water managers to drastic levee failures within supply issues is far below institute protocols to deal 25 years which could disable acceptable levels and must be with emergencies. Examples the state's water supply for at improved. of effective working rela- least two years is alarming. • A number of innovative infra- tionships have been demon- • Scientists have projected the structure projects and transfer strated in associations such as inevitable end to the Delta WEROC. It would be a shame 2008 -2009 Orange County Grand Jury Page 15 "Paper Water" — Does Orange County Have a Reliable Future? to politically sever the County very little, if any, expressed F.3(b) The current dis- water resources management concern from the public in agreement is a distraction structure and make a unified comparison to the numerous from the greater good working relationship all the other environmental issues of the agencies working more difficult. presented during develop- toward Orange County's In closing, the announcement ment project reviews. water future. for the May 15, 2009, O.0 Water Summit in Anaheim succinctly F.2(a): Orange County's F.3(c) The stakeholders raises the level of urgency: "Most citizens and interest in LAFCo's study failed business leaders and residents of groups do not appear to to meet their March 11, Orange County have no idea that grasp the seriousness of 2009 deadline for LAFCo's the water crisis is this serious and the water supply situa- public hearing on this mat - escalating." Specific actions are ur- tion or the complexity and ter. Continued delays are gent. This investigation is intended urgency of the necessary unacceptable. to offer several of them that will solutions. F,4: Orange County is strengthen the County's condition. F.2(b): Several recent, uniquely fortunate to have Findings substantial water sup- a vast, high - quality, well - ply awareness efforts are managed groundwater basin In accordance with Califor- underway (e.g. the O.C. serving its north geographi- nia Penal Code Sections 933 Water Summit) that show cal area. However, in its and 933.05, each finding will be promise but appear target- south reaches, it has an responded to by the government ed to audiences that are equally large, high - growth entity to which it is addressed. The already informed. area with virtually no avail - responses are to be submitted to able groundwater resources. the Presiding Judge of the Supe- F.3: LAFCo is the agency rior Court. The 2008 -2009 Orange charged with facilitating FA(a): The difference in County Grand Jury has arrived at constructive changes in groundwater availability the following findings: governmental structure to creates a "haves versus F.1: There is inadequate promote efficient delivery of have -nots" situation that coordination between local services. To this end, LAFCo is conducive to inherent land -use planning agencies is conducting a governance conflicts. and local water supply agen- study of MWDOC which is ties, resulting in a process the designated representa- F.4(b): The difference in that fails to fully engage the tive for nearly all the Orange groundwater availability issues. County retail water agen- provides opportunities for ties, acting on their behalf responsible participants F.1(a): Water agencies with their surface water sup- to develop and construct have tended to avoid inter- plier Metropolitan. long -term solutions which fering with or participating will benefit the entire in growth- management F.3(a) There are a number County. decisions. of points of governance disagreement between Responses to Findings F.1, F.1(b): Cities and the MWDOC and several of its EI(a), EI(b), and E2, E2(a) and County have tended to not member agencies. This is F.2(b) are required from the Board critically evaluate the limi- creating an impediment to oLupervisors of County of Orange.' the city councils of all cit- tations of the water agen- the on -going effectiveness cies' supply projections. of these agencies in critical ies responsible for land-use plan - aj=. Aliso Viejo, Anaheim, Brea, California's looming areas of Orange County's water er supply crisis receives water supply management. Buena Park, Costa Mesa, Cypress, Page 16 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? Dana Point, Fountain Malley, Fullerton, Garden Grove, Hun- tington Beach, Irvine, La Habra, La Palma, Laguna Beach, Laguna Hills, Laguna Niguel, Laguna Woods, Lake Forest, Los Alamitos, Mission Viejo, Newport Beach, Orange, Placentia, Rancho Santa Margarita, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Stanton, 7Wstin, KIla Park, Westminster and Yorba Linda; the city councils and boards of direc- tors of all retail water suopliere: cities ofAnaheim, Brea, Buena Park, Fountain Malley, Fullerton, Garden Grove, Huntington Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Tustin and Westmin- ster; East Orange County Water District, El Toro Water District, Irvine Ranch Water District, La- guna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water District, South Coast Water District, Trabuco Canyon Water District and Yorba Linda Water District; the Board Qf Directors of the Municipal Water District of Orange County. the Board of Directors of the Orange County Water District, and the eity councils of the cities served by Golden State Water Company: cities of Cypress, Los Alamitos, Placentia and Stanton. Responses to Finding F.3, F.3(a), F.3(b) and F.3(c) are re- quired from the Board of Directors of the Municipal Water District of Orange County: the city councils and boards of directors of all Mu- nieinal Water District of Orange County member agencies: cities of Brea, Buena Park, Fountain Malley, Garden Grove, Hunting- ton Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San Juan Capistrano, Seal Beach, Tustin and Westmin- ster, East Orange County Water District, El Toro Water District, Irvine Ranch Water District, La- guna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water District, South Coast Water District, Trabuco Canyon Water District and Yorba Linda Water District; the Orange County LocalAgena Formation Commission: the Clty Council of the cities ofAnaheim. Fullerton and Santa Ana: and theme coun- cils of the cities served by Golden State Water Comoany: cities of Cypress, LosAlamilos, Placentia and Stanton. Responses to Finding E4, F.4(a) and F.4(b) are required from the Board of-Directors of the Municipal Water District ofOr- ange County: the Board of Direc- tors pfthe Orange County Water District" the city councils and boards of directors of all Orange County retail water suppliers: cities ofAnaheim, Brea, Buena Park, Fountain Malley, Fullerton, Garden Grove, Huntington Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Tustin and Westmin- ster; East Orange County Water District, El Toro Water District, Irvine Ranch Water District, La- guna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water District, South Coast Water District, Trabuco Canyon Water District and Yorba Linda Water District; and the city councils of the cities served by Golden State Water Company cities of Cypress, Los Alamitos, Placentia, and Stanton. Recommendations In accordance with Califor- nia Penal Code Sections 933 and 933.05, each recommendation will be responded to by the government entity to which it is addressed. The responses are to be submitted to the Presiding Judge of the Superior Court. Based on the findings, the 2008 -2009 Orange County Grand Jury makes the following recom- mendations: R.1: Each Orange County municipal planning agency, in cooperation with its respective water supply agency, should prepare for adoption by its city council, a dedicated Water Element to its General Plan in conjunc- tion with a future update, not to exceed June 30, 2010. This document should include detailed implemen- tation measures based on objective -based policies that match realistic projections of the County's future water supplies. These objectives, policies and implementation measures should address imported supply constraints, including catastrophic out- ages and incorporate the re- alistic availability and timing of "new" water sources such as desalination, contaminat- ed groundwater reclamation and surface water recycling. (Findings F.1, F.1(a), F.1(b), F2. F.2(a) and F.2(b)) R.2: Each Orange County retail and wholesale water 2008 -2009 Orange County Grand Jury Page 17 "Paper Water" — Does Orange County Have a Reliable Future? agency should affirm its re- sponsibility to develop new, additional, innovative public outreach programs, be- yond water conservation and rationing programs, to expose the larger issues surrounding water supply constraints facing Orange County. The objective should be to connect the public with the problem. The outreach effort should entail a water emergency exercise that simulates a complete, sud- den break in imported water deliveries. The exercise should be aimed directly at the public and enlist wide- spread public participation on a recurring basis begin- ning by June 30, 2010. This recommendation may be satisfied by a multi- agency exercise but the inability to coordinate such an event should not preclude the individual agency's responsi- bility. (Finding F.2, F.2(a) and F.2(b)) R.3: Each MWDOC mem- ber agency should reaffirm to LAFCo that it will assign the resources necessary to expediently resolve regional governance issues. While the subject study is being facilitated by LAFCo, the options are with the agen- cies to decide what is best for all. Once conclusions are reached, the parties need to agree quickly and, hope- fully, unanimously to adopt a course of action. (Finding F.3, F3(a), F3(b) and F.3(c)) RA: Each Orange County retail and wholesale water agency should affirm its commitment to a fair -share financial responsibility in completing the emergency water supply network for the entire County. The entire County should be prepared together for any conditions of drought, natural or hu- man- caused disaster, or any other catastrophic disruption. WEROC should commence meetings of all parties, to facilitate consensus on an equitable fundingifinancing agreement. (Finding FA, FA(a) and FA(b)) Responses to Recommendation R.I are required from the Board of Supervisors efthe County of Oranee: the city councils of all cit- ies responsible for land! use Lrlan- nlnr: Aliso Viejo, Anaheim, Brea, Buena Park, Costa Mesa, Cypress, Dana Point, Fountain Valley, Fullerton, Garden Grove, Hun- tington Beach, Irvine, La Habra, La Palma, Laguna Beach, Laguna Hills, Laguna Niguel, Laguna Woods, Lake Forest, Los Alamitos, Mission Viejo, Newport Beach, Orange, Placentia, Rancho Santa Margarita, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Stanton, Tustin, Vila Park, Westminster and Yorba Linda; the city councils and boards of direc- tors of all retail water suppliers: cities ofAnaheim, Brea, Buena Park, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San .fuan Capistrano, Santa Ana, Seal Beach, Tustin and Westmin- ster; East Orange County Water District, El Toro Water District, Irvine Ranch Water District, La- guna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water District, South Coast Waterbistrict, 7}abueo Canyon Water District and Yorba Linda Water District; the Board Qf Directors of the Municipal Water District of Orange Coun r Board of Directors of the Orange Coun& Water District and the ci(y coun- cils of the cities served by Golden State Water Company: cities of Cypress, Los Alamitos, Placentia and Stanton. Responses to Recommenda- tion R.2 are required from the city councils and boards of direc- tors of all retail water suppliers: cities ofAnaheim, Brea, Buena Park, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Tustin and Westmin- ster, East Orange County Water District, El Toro Water District, Irvine Ranch Water District, La- guna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water District, South Coast Water District, Trabuco Canyon Water District and Yorba Linda Water District; the Bold ofof Directors of the Municipal Water District of Orange County the Board of Directors of the Orange County Water District: and the city councils of the cities served Qy Golden State Water Company_ cities of Cypress, Los Alamitos, Placentia and Stanton. Responses to Recommendation R.3 are required from the Board of Directors of the Municipal Water District QfOrange County: the c _ councils and boards of directors Page 18 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? gall Municipal Water District gfOrange County member agen- ci : cities of Brea, Buena Park, Fountain Valley, Garden Grove, Huntington Beach, La Habra, La Palma, Newport Beach, Or- ange, San Clemente, San Juan Capistrano, Seal Beach, Tustin and Westminster; East Orange County Water District, El Toro Water District, Irvine Ranch Water District, Laguna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water Dis- trict, South Coast Water District, Trabuco Canyon Water District and Yorba Linda Water District; the Orange Cou&D! Local Agency Formation Commission: the gly- councils efthe cities served by Golden State Water ComQanv: cities of Cypress, Los Alamitos, Placentia, and Stanton. Responses to Recommendation R.4 are required from the Board of Directors of the Municipal Wa- ter District of Orange County: the Board of Directors of the Orange County Water District: the ci councils and boards ofdirectars of all Orange County retail water suonliers: cities ofAnaheim, Brea, Buena Park, Fountain Valley, Ful- lerton, Garden Grove, Hunting- ton Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Tustin and Westminster; East Orange County Water District, El Toro Water District, Irvine Ranch Water District, Laguna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water Dis- trict, South Coast Water District, Tiabuco Canyon Water District 2008 -2009 Orange County Grand Jury and Yorba Linda Water District: and the city councils Qfthe cit- ies served by Golden State Water Cq=anv: cities of Cypress, Los Alamitos, Placentia and Stanton. Required Responses The California Penal Code specifies the required permis- sible responses to the findings and recommendations contained in the report. The specific sections are as follows: §933.05 1. For purposes of Subdivision (b) of Section 933, as to each grand jury finding, the respond- ing person or entity shall indi- cate one of the following: (1) The respondent agrees with the finding. (2) The respondent disagrees wholly or partially with the finding, in which case the response shall specify the portion of the finding that is disputed and shall include an explanation of the reasons therefore. 2. For purposes of subdivision (b) of Section 933, as to each grand jury recommendation, the responding person or entity shall report one of the follow- ing actions: (1) The recommendation has been implemented, with a summary regarding the implemented action. (2) The recommendation has not yet been implemented, but will be implemented in the future, with a timeframe for implementation. (3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or de- partment being investigated or reviewed, including the governing body of the public agency when applicable. This timeframe shall not exceed six months from the date of publication of the grand jury report. (4) The recommendation will not be implemented because it is not wan-anted or is not reasonable, with an explanation therefore. Page 19 "Paper Water" — Does Orange County Have a Reliable Future? Table 1: Findings and Recommendations Matrix CityffiManization/ Agency Aliso Vie'o F 1 • F 2 IMIMME • F 3 F 4 R 1 • R 2 R 3 R 4 Ci /O anization/A enc Anaheim F 1 now F F 2 3 F 4 R 1 R 2 MINIM R R 3 4 Anaheim • • • Brea Brea • • • Buena Park $1010 0 Buena Park • • • Fountain Valle • • • • • • Costa Mesa I Fullerton • • • • • • ' Cytiress • • • Garden Grope 0101010 0 Dana Point • • • Huntington Beach 6161-10 0 Fountain Valley • • • La Habra Fullerton • • • La Palma • • • • • • • Garden Grove • • • Ne t Beach Huntington Beach • • • Orange Irvine • • • San Clemente La Habra • • • San Juan Capistrano La Palma • • • Santa Ana La una Beach • • • Seal Beach Laguna Hills • • • Tustin • • • • • • • Laguna Niguel • • • Westminster Laguna Woods • • • Fast Orange Coun Water District fake Forest • • • f7 Toro Water District Los Alamitos • • • trine Ranch Water District Nlission Viejo • • • Laguna Beach County Water District Newport Beach • • • Nlesa Consolidated Water District Orange • • • Moulton Niguel Water District Placentia • • • Santa Mar arita Water District Rancho Santa Margarita • • • Serrano Water District • • • • ' San Clemente • • • South Coast Water District San Juan Capistrano • • • Trabuco Canyon Water District Santa Ana • • • Yorba Linda Water District Seal Beacb Stanton • • • Municipal Water District of Orange County Tustin • • • Orange Coun Water District Villa Park Westminster • • • City ofCypress Yorba Linda • • • -ji7ty of Los Alamitos County of Orange . • • City of Placentia Aof Stanton OC Local Agency Formation Commission Page 20 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? Glossary of Terms • Acre -foot: The amount of water that would fill a one -acre area to a depth of one foot (equivalent to 325,851 gallons) • EIR: Environmental Impact Report • LAFCo: Orange County Local Agency Formation Commission • Metropolitan: Metropolitan Water District of Southern California • MSR: Municipal Services Review • MWDOC: Municipal Water District of Orange County • New Water: (1) A new source of potable water with or without a new pipeline delivering water from outside the area; (2) Purified brackish or recycled water within the area that has been treated to drinking water standards that would otherwise be discharged to waste • Non -Point Source Pollution: Contaminated surface drainage water (runoff) of which the sources of the pollution are so numerous that individual responsibility cannot be determined • OCWD: Orange County Water District • Paper Water: A term used to describe allocated water which an individual or agency is entitled to receive, presuming that the water exists. Paper water differs from "wet water" in that paper water is based on projections and expected deliveries. • SB 221: California Government Code Sections 66455.3 and 66473.7. Requires identification of adequate potable water supplies to serve most development projects over 500 dwelling units, using a historical water record of at least 20 years. • SB 610: California Water Code Sections 10631, 10656, 10910, 10911, 10912, 10915 and 10657. Re- quires a WSA for most development projects over 500 dwelling units UWMP: Urban Water Management Plan • Vested rights: A property owner's right to proceed with his development in substantial compliance with the ordinances, policies and standards in effect at the time of agency approval. A vested project is generally immune from any new conditions that might otherwise have resulted between the date of ap- proval and issuance of building permits had the project not received vesting status. • WEROC: Water Emergency Response Organization of Orange County • WSA: Water Supply Assessment 2008 -2009 Orange County Grand Jury Page 21 "Paper Water" — Does Orange County Have a Reliable Future? References 1. The Ranch Plan NCCP/MSAA/HCP Joint Programmatic EIR/EIS Growth Induc- ing and Cumulative Impacts, Section 6, page 12 2. Beyond Chinatown, Steven P. Erie, Stanford University Press, 2006, page 230 3. Comparing Futures for the Sacramento — San Joaquin Delta, Jay Lund, et al, 2008, pages 3 and 53 4. TheAmerican Southwest: Are We Running Dry?, video documentary, The Chroni- cles Group, 2008 5. Scripps News, Scripps Institution of Oceanography, February 12, 2008 6. Water and Land Use, Planning Wisely for California's Future, Karen E. Johnson and Jeff Loux, Solana Press Books, 2004, pages 16 and 66 7. 2005 Urban Water Management Plan, Municipal Water District of Orange County, adopted December 21, 2005, pages 105 and 178 Exhibits A, B, C, E -1, E -2 and G are used with permission of the Municipal Water Dis- trict of Orange County, Exhibit D is used with permission of the Orange County Water District. Exhibit F is used with permission of the Delta Vision Foundation. Page 22 2008 -2009 Orange County Grand Jury CITY OF NEWPORT BEACH Attachment "B" September 9, 2009 The Honorable Kim Dunning Presiding Judge of the Superior Court 700 Civic Center Drive West Santa Ana, California 92701 RE: Response to the Grand Jury Report on "'Paper Water' — Does Orange County Have A Reliable Future ?" Honorable Judge Dunning: This letter is submitted in response to the June 15, 2009 Grand Jury report entitled "'Paper Water' — Does Orange County Have A Reliable Future ?" As mandated by Penal Code Sections 933.05 (a) and (b), the following responses address the findings and recommendations of the Grand Jury. In accordance with the report, the City of Newport Beach was requested to respond to Findings F.1, F.1 (a), F.1 (b), F.2, F.2 (a), F.2 (b), F.3, F.3 (a), F.3 (b), F.3(c), FA, FA (a) and FA (b) and Recommendations R.1, R.2, R.3 and RA. Our responses are provided below: GRAND JURY FINDINGS: Finding F.1: There is inadequate coordination between local land -use planning agencies and local water supply agencies, resulting in a process that fails to fully engage the issues. Disagree. The City of Newport Beach is a retail water supplier, with that function managed by the City's Utilities Department. There is regular coordination between the Planning Department and the Utilities Department with regard to long range planning such as the General Plan as well as with regard to specific development projects. The City's Urban Water Management Plan was used as a resource in preparation of a comprehensive update to the General Plan and the EIR on that project in 2006. The City's Utilities Department, as well as Mesa Consolidated Water District and Irvine Ranch Water District, which serve parts of Newport Beach, were consulted during preparation of the General Plan EIR. Likewise, the appropriate water supplier is asked to prepare a water supply assessment for each proposed development project with more than 500 dwelling units, as required by SB 221 and SB 610. The Planning Department and the City's environmental consultants review these reports and, if necessary, ask questions of the water suppliers before the information is used in the project EIRs. It is important to note that the responsibilities of cities include providing for the development of new housing for a growing population, This is clear in the State's Housing Element requirements and Regional Housing Needs Assessment numbers that must be included as goals in Housing Elements. Newport Beach has provided the water agencies that serve our community with our adopted Housing Element to assist them with planning, as required by State law. While the California Water Code provides that housing for lower income households should be given priority in water supply, the reality is that few affordable housing projects are developed without some kind of connection to the development of market rate housing. Water agencies generally view their jobs as using water resources more efficiently to accommodate growth, and this assists in meeting the State's and cities' housing goals. Nonetheless, the water conservation ordinance currently under consideration by the Newport Beach City Council includes a provision that no new connections will be permitted when water shortages reach Water Shortage Crisis (Mandatory >40% reduction) This is regardless of whether land use approvals have been granted for development. Finding 17.1(a): Water agencies have tended to avoid interfering with or participating in growth- management decisions. Disagree. The City of Newport Beach wouldn't characterize the participation of water agencies in long -range planning or growth- management decisions as "interference." As described in the response to Finding 1, water agencies that supply Newport Beach do participate in local planning analyses and decisions. Finding FA(b): Cities and the County have tended to not critically evaluate the limitations of the water agencies' supply projections. Agree. The City's Planning Department, Planning Commission and City Council rely on water agencies as experts on water supply and delivery, just as they rely on archaeologists, biologists, geologists, hydrologists, traffic engineers and others as experts in their fields. The California Environmental Quality Act (CEQA) speaks to the weight of information and testimony presented by qualified experts as opposed to opinions of non - experts. The adequacy of an EIR could be challenged if the document differed from information presented by the recognized expert, the water agency, without evidence from other qualified parties. The City of Newport Beach is aware of short-term water supply problems. Conservation efforts in Newport Beach, as a result of mitigation measures on development projects and voluntary actions by residents and businesses, have resulted in reductions in water use of 8% over the last fiscal year. The City will continue to require water conservation measures in new development projects. However, the Planning Department is not qualified to "second guess" the water agencies that serve our City with regard to long -term analysis and the water agencies' progress in developing new sources of water and securing water transfers. Likewise, the Utilities Department and Newport Beach's other water supply agencies are constrained to use supply projections provided to them by regional suppliers. Finding F.2: California's looming water supply crisis receives very little, if any, expressed concern from the public in comparison to the numerous other environmental issues presented during development project reviews. Agree. CEQA charges planning agencies with presenting information on all potentially significant environmental impacts of proposed projects. It is true that EIRs and other analyses of development projects in Newport Beach include more detailed discussion on issues such as traffic and noise than on water supply. The reason is that these are the issues that are most often raised by our citizens in response to notices of preparation (NOPs) of EIRs and in comments on Draft EIRs. CEQA requires that lead agencies in the environmental review process address issues raised during the NOP process in EIRs, and respond to all written comments received on Draft EIRs. Therefore, the issues of concern to our citizens are those that receive the most discussion. This is not to say that water supply is ignored. Potential impacts in this area are analyzed and discussed, and mitigation measures (such as water conservation) are often imposed. If there are no public comments on this impact area, the analysis and mitigations are considered adequate. Perhaps water supply will become a greater concern in the future, in which case Newport Beach will expand our discussion of this issue in development project reviews. Until that occurs, it would not be appropriate or responsible for the City to suggest that significant environmental impacts would occur when information from reliable sources (i.e., water agencies) shows no evidence of such impacts. Finding F.2(a): Orange County's citizens and interest groups do not appear to grasp the seriousness of the water supply situation or the complexity and urgency of the solutions. Disagree partially. The Newport Beach City Council has no information on which to comment or base a more detailed response. It would be presumptuous to comment on what our citizens and interest groups "grasp." Water consumption has reduced over the past year within the City of Newport Beach, providing evidence that citizens have taken notice of the water supply situation. The City used nearly one thousand acre feet less water in fiscal year 08 -09 than the previous year. Finding F.2(b): Several recent, substantial water supply awareness efforts are underway (e.g., the O.C. Water Summit) that show promise but appear targeted to audiences that are already well informed. Agree. Large regional efforts such as the O.C. Water Summit do target audiences that work in the industry; however, these efforts seem to focus on keeping officials up to date and retaining a consistent message. The City utilizes various means of keeping Newport Beach customers informed about the state of water supply in the City, such as website, bill stuffers, local and regional classes related to conservation issues such as the children's education festival and public and committee forums to discuss the proposed water conservation ordinance. All of the local efforts show promise as well, and are targeting audiences that are not informed. Finding F.3: LAFCO is the agency charged with facilitating constructive changes in governmental structure to promote efficient delivery of services. To this end, LAFCO is conducting a governance study of MWDOC which is the designated representative for nearly all of the Orange County retail water agencies, acting on their behalf with their surface water supplier Metropolitan. Agree. The City agrees that LAFCO is the appropriate agency to conduct the study. Finding F.3(a): There are a number of points of governance disagreement between MWDOC and several of its member agencies. This is creating an impediment to the on- going effectiveness of these agencies in critical areas of Orange County's water supply management. Agree. The City agrees that this issue needs to be resolved expediently. Finding F.3(b): The current disagreement is a distraction from the greater good of the agencies working toward Orange County's water future. Agree. The City agrees that this issue needs to be resolved expediently. Finding F.3(c): The stakeholders in LAFCO's study failed to meet their March 11, 2009 deadline for LAFCO's public hearing on this matter. Continued delays are unacceptable. Agree. Finding F.4: Orange County is uniquely fortunate to have a vast, high - quality, well - managed groundwater basin serving its north geographical area. However, in its south reaches, it has an equally large, high - growth area with virtually no available groundwater resources. Agree. The City recognizes that we are fortunate to have access to the groundwater basin and the south areas have virtually no ground water source. Finding FA(a): The difference in groundwater availability creates a "haves versus have - nots" situation that is conducive to inherent conflicts. Agree. Finding FA(b): The difference in groundwater availability provides opportunities for responsible participants to develop and construct long -term solutions which will benefit the entire County. Disagree partially The finding is not clearly stated, but appears to include two implications that Newport Beach believes require expanded information. The first implication is that local resources are not being fully developed in south Orange County. This is not correct. Critical groundwater, recycled water and ocean water supplies are all being developed in south Orange County. The second implication is that there is sufficient water supply in the OCWD Groundwater Basin to supply south as well as north Orange County. The groundwater basin is managed to provide water supplies to its overlying landowners. The OCWD Act that formed OCWD governs how it manages the basin. Currently the basin meets 62% of each member agency's supply. The capacity of the basin was developed at a significant cost and it will never be able to supply 100% of the existing member agencies' demands. GRAND JURY RECOMMENDATIONS: Recommendation R.1: Each Orange County municipal planning agency, in cooperation with its respective water supply agency, should prepare for adoption by its city council, a dedicated Water Element to its General Plan in conjunction with a future update, not to exceed June 30, 2010. This document should include detailed implementation measures based on objective -based policies that match realistic projections of the County's future water supplies. These objectives, policies and implementation measures should address imported supply constraints, including catastrophic outages and incorporate the realistic availability and timing of "new" water sources such as desalination, contaminated groundwater reclamation and surface water recycling. (Findings F.1(a) & (b), and F.2(a) and (b)) This recommendation will not be implemented. Implementing this recommendation would create a redundant, and possibly conflicting, planning process to the existing Urban Water Management Plan (UWMP) requirement of the State Water Code. UWMPs already serve a long -range planning function for water supply issues. They are required to include the very topics listed in this recommendation, and are required be updated more frequently (5 years) than General Plans are suggested to be updated (10 years). Water planning is more appropriately and effectively done by water agencies than by municipal government. If cities were to prepare Water Elements, they would have to rely on the same projections of water supply as the water agencies do, and it is unclear what additional benefit would be gained from Water Elements. The preparation of Water Elements would be complicated, confusing and problematic. Newport Beach is served by three water agencies: the City, Mesa Consolidated Water District and Irvine Ranch Water District, and we would have to work with all three of these water agencies in preparing a Water Element. If policies are not consistent among the three water agencies, Newport Beach could be faced with writing a Water Element with conflicting policies, while State law requires that General Plans be internally consistent. Likewise, Mesa Consolidated Water District and Irvine Ranch Water District would have to work with multiple cities as they prepare their own Water Elements. The water agencies, too, might be faced with trying to implement policies that vary from city to city — assuming that cities' Water Elements would even have any mandatory impact on water agencies. Water agencies are special districts under State law, and cities do not have jurisdiction to set policy for them. Only the State Legislature has the authority to establish General Plan requirements for cities and counties. The Government Code establishes the seven mandatory elements of General Plans: land use, circulation, housing, conservation, open space, noise, and safety. The conservation element is required to address the conservation, development and utilization of natural resources including water, and the portion of the element dealing with water must be developed in coordination with all agencies that have developed, served, controlled or conserved water for the city. Newport Beach has satisfied this requirement with the Natural Resources Element of our General Plan, which includes discussion of both water supply and water quality. The City Council has adopted two goals with respect to water supply, each with a set of policies and implementation measures. The goals are as follows: NR 1 Minimized water consumption through conservation methods and other techniques. NR 2 Expanded use of alternative water sources to provide adequate water supplies for present uses and future growth. Requiring another General Plan element would constitute an unfunded government mandate, at a time when cities and counties are struggling to meet other State requirements while the State depletes city and county resources. Recommendation R.2: Each Orange County retail and wholesale water agency should affirm its responsibility to develop new, additional, innovative public outreach programs, beyond water conservation and rationing programs, to expose the larger issues surrounding water supply constraints facing Orange County. The objective should be to connect the public with the problem. The outreach effort should entail a water emergency exercise that simulates a complete, sudden break in imported water deliveries. The exercise should be aimed directly at the public and enlist wide- spread public participation on a recurring basis beginning by June 30, 2010. This recommendation may be satisfied by a multi- agency exercise but the inability to coordinate such an event should not preclude the individual agency's responsibility. (Findings F.2(a) and (b)) This recommendation will not be implemented. Current efforts are underway locally and working with MWDOC to educate the public about water supply issues not confined to just import supplies. The City of Newport Beach receives its water supply from both import and local groundwater supplies. The proposed water conservation and supply level regulation ordinance addresses water supply shortages from a multitude of circumstances that could reduce water supply. Supply shortage levels are built into the ordinance to address all supply issues not just import supplies. The City participates in emergency planning and exercises with WEROC, as well as emergency drills organized by the City and other government agencies that prepare us for a variety of possible emergencies. These drills require a significant amount of staff time and inter - agency organization, and it would not be practical to conduct County wide exercise on water emergencies involving 80 -100 thousand residents. Recommendation R.3: Each MWDOC member agency should reaffirm to LAFCO that it will assign the resources necessary to expediently resolve regional governance issues. While the subject study is being facilitated by LAFCO, the options are with the agencies to decide what is best for all. Once conclusions are reached, the parties need to agree quickly and, hopefully, unanimously to adopt a course of action. (Findings F.3(a), (b) and (c)) This recommendation will be implemented. The City agrees that this issue needs to be resolved expediently. The City of Newport Beach will assign the resources necessary. Upon completion of the study by LAFCO, where conclusions are reached, the City will respond in the required time frame set by LAFCO or agreed timeframe by member agencies. Recommendation RA Each Orange County retail and wholesale water agency should affirm its commitment to a fair -share financial responsibility in completing the emergency water supply network for the entire County. The entire County should be prepared together for any conditions of drought, natural or human - caused disaster, or any other catastrophic disruption. WEROC should commence meetings of all parties, to facilitate consensus on an equitable funding/financing agreement. (Findings FA(a) and (b)) This recommendation is being implemented. The City already participates with WEROC to annually plan and run emergency scenarios to better prepare staff for emergency response on all levels. We have already spent our fair share and we will continue to do so as appropriate for the activities and events and how they relate to the City's functions and operations The City is currently working with local agencies to study the emergency intertie water connections and ability to assist each other in an emergency. The study will address hydrology, water quality issues, and resources needed. If you have any questions regarding this response please contact George Murdoch, Utilities Director, at (949) 644 -3011 or gmurdoch(cDnewportbeachca.gov, or Sharon Wood, Assistant City Manager at (949) 644 -3222 or swood _newportbeachca.gov. Sincerely, Edward Selich, Mayor cc: Orange County Grand Jury Water" — Does Orange County Have A Reliable Future? Summary "Paper water" is an illusion. It is a term used in the water industry that represents an entitlement, exist- ing only on paper, which agencies can expect to receive from state and federal water projects based on pro- jections and expectations. The gap between allocated "paper water" and available "real water" can be dramatic. This term may succinctly define Orange County's water future as judicial rulings systemati- cally continue to remove available supplies from the reach of Orange County's consumers. The Grand Jury has learned from multiple, expert sources that Orange County's water supply is very vulnerable to extended outages from catastrophic disruptions and other long -term system failures. These are issues above and beyond concerns of drought. Critical parts of the water supply infrastructure upon which much of California and Orange County relies is in a deplor- able state of disrepair and neglect. The Grand Jury investigated how Orange County's cities, water districts, residents and businesses are—or are not — planning for and responding to a profound redistri- bution of water supplies away from Orange County, with the potential of affecting its residents' quality of life for generations. The following excerpts from this report highlight some significant issues that led the Grand Jury to reach conclusions from which it has posed a series of key findings and recommendations: On the State Water Project... "Predictions are for a 67% chance of drastic levee failures sometime during the next 25 years. In a seismic failure, sci- entific models predict massive areas of the Delta inundated with a reverse flow of seawater from the San Francisco Bay. Fresh water in the Delta will be rendered useless for agri- cultural irrigation. Moreover, the drinking water supply to southern California would be destroyed far two to four years, or longer. " On water from northern Califor- ma.... "...for the first time in Metro- politan's 80 year history, the agency is projecting a sig- nificant drawdown in its water reserves.... Metropolitan's water reserves are being rap- idly depleted and the ability to refill its reservoirs has become increasingly problematic." On water from the Colorado River... "The assumption that ... we will continue to find new sources of water ... is wrong. Those days are over.... Every source of water coming into southern California from afar ... is increasingly unreliable." On coordination of land -use planning with water resources plan- ning... "... land planning and wa- ter resources planning have distinctly different, highly complex parameters that drive their technical analyses and decision- making processes. Attachment "A" The unique complexities of these professions tend to deter either side from interacting effectively." On public awareness... "...the residents of Orange County do not seem to under- stand the perilous conditions within which they live. Orange County water consumers have not, to any significant degree, experienced long- duration water supply outages. The public's consideration for water supply typically starts and stops at the faucet handle as they expect, with every turn, dependable delivery of high - quality, safe, clean water." On water reliability for south Orange County... "Approximately 95 percent of south Orange County's water is imported from northern California and the Colorado River and ... sent 35 miles to south County via two, aging pipelines, traversing active seismic faults." On emergency water supply planning... "The current emergency relief through Orange County water reliability planning is approxi- mately ... 10 percent of what is needed. /The remainder] will arrive when a planned arrap of pump, pipeline, treatment and reservoir projects is built ... as well as (having] available brackish and seawater puri- fication systems ... for south Orange County." 2008 -2009 Orange County Grand Jury page 1 "Paper Water" — Does Orange County Have a Reliable Future? On Orange County's groundwa- ter resources... "Water experts ... univer- sally praise the innovative and effective methods by which Orange County has protected and managed its innate water resources. In particular, its groundwater aquifer is an in- credibly rich natural resource that is the envy of many areas in the country challenged by depleted and damaged water tables. " On the governance of Orange County's fragmented, autonomous water resources agencies... "The MWDOC member agencies need to resolve their differences and dedicate themselves to a unified vision, whether it be continuing with MWDOC under a modified agreement or creating a new, untied, County -wide water authority." This report offers several ways to strengthen government processes whereby the residents and decision makers of Orange County will be knowledgeable about the County's water supplies. It also pinpoints areas needing attention by water agencies to become as prepared as possible for any potential adverse water supply event. These issues are discussed more fully in this report. It is important to recognize that the Grand Jury found all the agencies it contacted to be performing their duties profession- ally and with due diligence. This is reassuring but it neither solves the underlying problems nor absolves the officials. More needs to be done. Reason for Investigation News reports and alarming warnings from knowledgeable wa- ter officials throughout California have raised serious concerns: (1) Supply deficiencies are becoming critical due to a prolonged drought. (2) Court rulings intended to pro- tect environmental impacts in the Sacramento -San Joaquin Delta and redistribute water rights from the Colorado River have forced drastic supply cutbacks. (3) Water delivery infrastructure is in a precarious and deteriorating condition and subject to severe damage in the event of seismic and other natural forces. The current, unusually severe economic contraction affecting the home - building market has slowed population growth statewide. If conditions were different, a more controversial public policy debate would likely be occurring over the accuracy of adequate water supply projections to serve these develop- ments. This situation is in dramatic contrast to major projects receiving environmental approval even as re- cently as within the past five years. The Grand Jury reviewed environmental and planning docu- ments that were approved in 2004, for 14,000 homes in southern Orange County. Water supply for this extensive, planned community received virtually no overt concern aside from a brief discussion to ad- dress growth- inducement and emer- gency outages within the supplying water district's system.' No com- ments on water supply were found from any environmental agency, in contrast to the project's extensive debate over traffic /transportation and flora/fauna impacts. Accurate water supply projec- tions are elusive at best and are the reason we are in our current situation. A "water emergency" is a result of a complex interrelated series of actions and conditions. Conservation - and then rationing - are the first steps in controlling the situation. However, increased demand is inherent in population growth. Legislation was enacted within the past eight years to in- crease the responsible coordination between approval of projects that induce growth in population and identification of water supplies to support increased demand. Cali- fornia Government Code Sections 66455.3 and 66473.7 requires iden- tification of adequate potable water supplies to serve a planned devel- opment project based on at least 20 years of historical data. California Water Code Sections 10631, 10656, 10910, 10911, 10912, 10915 and 10657 require Water Supply As- sessments (WSA's.) These laws, commonly referred to respectively as SB 221 and SB 610, are viewed by some as environmentalist - driven mechanisms for curtailing growth.' Other water experts involved with the crafting of these bills have indicated that the legislation does not go far enough since only projects over 500 dwelling units are required to comply with these laws. Regardless, these measures have helped to place a greater im- portance on responsible planning, identifying dependable, long -term water supplies preceding major development approvals. This seems not only reasonable but responsible. The Grand Jury desired to assess the following: • whether and to what extent the County's water supplies are vulnerable to major dis- ruption • to what extent the residents and decision makers are aware of the County's water supply conditions • how the development project Page 2 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? approval process is conducted in Orange County with re- spect to water supplies what measures are being taken by water managers to ensure the integrity of the County's water delivery systems how public awareness, the project review process and the County's water system integ- rity may be strengthened Method of Investigation As part of this investigation, the Grand Jury researched numerous documents obtained from expert sources and interviewed representa- tives of numerous agencies. Agen- cies and their staff consulted during this study included the following: • Major water retailers (water districts and cities) both in Orange County and adjacent counties • Water wholesalers such as the Municipal Water District of Orange County ( MWDOC) • Groundwater purveyors both inside Orange County and in adjacent counties • Local agency planning depart- menu • Renowned academic authori- ties who have studied Califor- nia's unique water resources issues for decades. The Grand Jury visited a number of local facilities that have demonstrated innovative means of producing "new" water such as Or- ange County Water District's (OC- WD's) Groundwater Replenishment System and Irvine Ranch Water District's Deep Aquifer Treatment System. It observed the state of southern California's water supply on a three -day inspection of the immense State Water Project. This system, along with the Colorado River Aqueduct, conveys at least 50 percent of the water consumed by Orange County. The study included review of authoritative textbooks and documentaries that provided an overview of cur- rent conditions as they affect Orange County, the region and the nation. From these inter- views and investiga- tions, a repetitive pattern of concern emerged over many key issues. They were seen to threaten the avail- ability of adequate water supply to support California's growth. reached reduced levels that are worrisome. Diamond Valley Lake, Metropolitan's newest reservoir built to provide emergency stor- age, is today less than one -half full. Exhibit A Orange County Water Supply Sources in FY 07 -0 8 State Water Metropolitan Cotendo Rhrer Proiect Witter District 258,000 AF 0 AF In -Lieu San Gabriel Basin 10.000 AF MET Water to Banner 5,000 AF OCWD aasln GrourMwater . 360.000 AF used Incidental Recharge 46,000 AF (est.) Background and Facts Organizational Structure Delivering Orange County 's Water Supply Orange County relies heavily on imported water for its on -going supply as well as much of its groundwater storage replenishment needs. Exhibit A depicts the sources of supply and flow volumes. Im- ported water from Metropolitan Water District of Southern Cali- fornia (Metropolitan) constitutes over one half of Orange County's supply. Metropolitan pumps its supply through aqueducts from the State Water Project in northern Califor- nia and through pipelines from the Colorado River along California's easterly border with Nevada and Arizona. Persistent drought condi- tions have compromised the State Water Project's as well as the Colorado River's supplies. Res- ervoirs and dammed storage have —IVAna River 00 AF Ck. (eat ) all Lxal ins 4 000 AF d Witter 36,000 36.000 AF Irrigation. etc. 18,000 AF into GW Beam Most of the immediate impact of this has been seen in cutbacks for agricultural uses and groundwater replenishment. Added concerns have arisen most recently over the December 14, 2007 ruling by U.S. District Court Judge Oliver W. Wanger in what has become known as the "Wanger Decision" (Case No. 1:05 -cv -1207 OW W GSA) which adversely affects the State Water Project. The Colorado River water allocations have also suffered significant court decisions adverse to southern California. Exhibit B depicts how water is distributed within Orange County. MWDOC is the predominant intermediary that buys imported water from Metropolitan and sells it to Orange County's retail water agencies (cities and special dis- tricts). Note that OCWD is a major provider of groundwater only, generally limited to the cities in the north Orange County area. Exhibit C demonstrates how widespread MWDOC's influence is 200 8-2009 Orange County Grand Jury Page 3 "Paper Water" — Does Orange County Have a Reliable Future? nncooC 1opw,M l \'wtw Exhibit B in Orange County. MWDOC repre- sents nearly every water agency in Orange County on the Metropolitan Board of Directors. However, three cities (Anaheim, Fullerton and San- ta Ana) are direct member agencies to Metropolitan. MWDOC's role as the wholesaler to every comer of the County is an important facet of this investigation. Exhibit D (on the follow- ing page) depicts the general boundaries of the Orange County groundwater basin administered by OCWD. This water is accessible, by law, only to cities and special districts overlying the 350- square- mile service area that serves 75 percent of the County's three million residents. Typically, the agencies with groundwater rights draw approximately two-thirds of their supplies from the groundwater basin and purchase their remain- ing demand from Metropolitan via MWDOC. Three cities (Anaheim, Fullerton and Santa Ana) purchase their water from Metropolitan directly. ,ource in Orange County's SerVice Precarious Water Systems • Orange County's water supplies, tilulr \\ilW rt ujM from all imported sources, are in aetl u�l0� {lull great peril. Metropolitan has de- veloped an extensive infrastructure backbone to bring water to southern California. It is the predominant supplier of imported water to every area within Orange County. These supplies are completely dependent on two primary, man-made convey- ances: (1) the State Water Project which taps the Sierra Nevada mountain range snow melt in north- em California and (2) the Colorado River Aqueduct which intercepts Exhibit C IINIXYIMiw CpnaY .w. wnttr..wix xaa vw. aw.r %+.d.y e� e MWDOC Service Area and Member Agencies Page 4 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? fmOi,M,Y.• '3 t ; A 5 Exhibit D runoff from the west slopes of the Rocky Mountains, as far north as Wyoming, via the Colorado River. The current water supply situa- tion in Metropolitan's service area and throughout the state of Califor- nia is critically tenuous and signals 2007 -2009 as one of California's most severely -dry three -year periods in over 100 years. In ad- dition to the lack of precipitation in early 2008, the following warm spring season resulted in early depletion of the mountain snow- pack. This is considered the largest "reservoir" for California's water supply to see the state through the ensuing seasons. Without a substantial snowpack leading into spring, California must rely on its man-made reservoirs and stored groundwater to survive the dry seasons. Even though 2009 snow pack achieved 80 percent of normal volume, it cannot overcome the depletion caused by the two, previ- ous, record -low years, especially when hobbled by the court- enacted pumping restrictions. Until now, consumers' conservation efforts, combined with water manag- ers' programs to install low -flow fixtures, agricultural usage cutbacks and other restrictions, have been effective in substantially reducing consumer demand. Unfortunately, this has finally fallen short and local water agencies are predicting a 50% likelihood of embarking on water rationing as summer 2009 approaches. In fact, several agen- cies have already instituted the first stages of rationing as a result of Metropolitan's adopted Water Supply Allocation Plan which takes effect July 1, 2009. The 2008 -2009 Grand Jury is extremely concerned that residents, planners and decision makers in Orange County are not doing enough to recognize and publicize the perilous condition of our water supplies. They are not giving this issue adequate consideration in the process of approving plans for the growth of Orange County. The State Water Project Metropolitan, on average, does not have sufficient water supplies to meet demands. Watersheds are currently providing 650 thousand acre -feet (about 212 billion gallons) lower than normal runoff due to reduced rainfall and snowpack. The Wanger Decision ordered the State Water Project to reduce pumping from the Sacramento -San Joa- quin River Delta due to identified, adverse environmental impacts on a threatened fish species, the Delta smelt. In April, 2008, Judge Wanger issued a second ruling, further cutting water exports to protect the declining populations of Chinook salmon' Judge Wanger's rulings resulted in Metropolitan curtailing delivery of 500 thousand acre-feet (about 163 billion gallons) of water from northern California in 2008. These lost resources would have pro- vided water for over seven million Californians for a year. As a result, for the first time in Metropolitan's 80 -year history, the agency is projecting a significant drawdown in its water reserves. Before the Wanger Decision, projections were for surplus conditions 70 percent of the time and reserve drawdowns re- quired 30 percent of the time. Now, this projection is reversed with surplus conditions expected 30 per- cent of the time and drawdowns 70 percent of the time. Metropolitan's water reserves are being rapidly depleted and the ability to refill its reservoirs has become increasingly problematic. 200 8-2009 Orange County Grand Jury Page 5 "Paper Water" — Does Orange County Have a Reliable Future? Located in California's Butte County, Lake Oroville is the farthest upper reach of the State Water Project. Exhibits E -I and E -2 provide a startling contrast of the drastic changes that had occurred in fewer than three years. In Febru- ary 2009, Oroville Dam's storage was at 30 percent of its capacity. Because of near- average precipi- tation this year, the reservoir has recovered to nearly 60 percent of its capacity. But even with some gains in rainfall and snowpack in 2009, conditions are still below normal and the drought continues to stifle the buildup of reserves. No State Water Project water delivered to southern California and Orange County arrives with- out traversing the Sacramento-San Exhibit E -1 Joaquin Delta (Exhibit F, on the following page). The Delta is a convergence of five major rivers in the Central Valley which have been tamed by mining and agricul- tural operations dating back to the mid -19th century. This was accom- plished by building what is now an 1,100 -mile "spider web" of pre- dominantly privately owned, non - engineered, earthen levees. From its accumulated data, Metropolitan has asserted the following with regard to the Delta: • There have been at least 166 documented levee failures over the last 109 years, caus- ing geotechnical experts to describe the situation in a rather cynical manner: There are two types of levees in the Delta. There are those Exhibit E -2 hY..rr + +W •,1.M M�fY�a, ,�,i.OL Y.••w, that have failed and there are those that will fail. • Predictions are for a 67% chance of drastic levee failures sometime during the next 25 years. Most likely, the failures will be associated with either a 6.7 or greater magnitude seismic event, severe earth subsidence or a 100 -year intensity flood. • In a seismic failure, scientific models predict massive areas of the Delta inundated with a reverse flow of seawater from the San Francisco Bay. Fresh water in the Delta will be rendered useless for agricul- tural irrigation. Moreover, the drinking water supply to southern California would be destroyed for two to four years, or longer. • The potential for calamity has been recognized by recent Legislature budget discus- sions. It also has received a high priority with the Gover- nor when he created the "Blue Ribbon Task Force" that led to the 2007 Delta Vision report. However, action for urgent, preemptive levee res- torations has not materialized. Even without a catastrophic incident, experts are forewarning of major, long -range degradation of the Delta ecosystem. California needs to prepare for the inevitable end of the Delta's role as a massive drinking water conveyance as its salinity increases to non - potable, brackish levels? The Colorado River Aqueduct The original allocations of Colorado River water to the south- western states and Mexico were sealed by the 1922 Colorado River Compact and the Boulder Canyon Page 6 2008 -2009 Orange County Grand Jury Exhibit F "Paper Water" — Does Orange County Have a Reliable Future? Map of the Sacramento-San Joaquin Delta and Suisun Marsh Project Act of 1928. In retrospect, water planners today recognize that those allocations were based on overly optimistic assumptions. The historical hydrographic data of that time was unusually wet. Also, the population projections for all the now clearly- identified high - growth areas of the southwestern states, and southern California in particu- lar, were notoriously short Sighted.' Two critical forces have created major problems for the viability of the Colorado River: (1) The Colora- do River Basin at Lake Powell has been suffering from severe drought conditions since October 1999. (2) The 2003 Colorado River Quan- tification Settlement Agreement, involving Metropolitan, San Diego County Water Authority, Coachella Valley Water District, Imperial Irrigation District and numerous other federal, state and regional agencies and interest groups have redistributed the available water within southern California. Deliver- ies to Metropolitan are down some 400,000 acre -feet (130 billion gal- lons) as a result. Considering the plight of our Colorado River allocation, Dr. Peter Gleick, President of the Pacific Institute, in 2008, observed the following: "The assumption that southern California can grow as much as it wants and that we will continue to find new sources of water ... is wrong. Those days are over.... Every source of water coming into southern California from afar ... is increasingly unreli- able."' Researchers have posed the con- cern whether the Colorado River, which provides up to three- fourths of Metropolitan's supply, will cease to be a viable water source within the next 20 years. Recently, U.S. Secretary of the Interior Ken Salazar of Colorado, when he was a Senate member of the Energy & Natural Resources Commission, asserted that water in the United States has always been taken for granted. As a result, as might be expected, the only time people understand the importance of water is when they don't have it. In sum- mary, experts have sent this warn- ing: "The water crisis is much more significant to the world than is the energy crisis... Try living without water ... it doesn't work. "4 The following is a synopsis of comments uncovered by the Grand Jury in the context of the future of the Colorado River: Mark Pisano, past Executive Director of the Southern Cali- fornia Association of Govern- ments, in the context of water supplies, predicted the fol- lowing: "We're going to grow differently in this century than we did in the past century.... [L]arge regions are going to 200 8-2009 Orange County Grand Jury Page 7 "Paper Water" —Does Orange County Have a Reliable Future? have to be much more sensi- tive to what supports them en- vironmentally so that they're sustainable ... and if they're not sensitive to [this] they're going to have real difficulty. "4 Secretary Salazar stated that, in communities where there is not a dependable, long- term source of water, there will be "... an explosion of controversy because land -use planners have not done what they should have done. "4 Scripps Institution of Ocean- ography researchers Tim Bar- nett and David Pierce, wrote a paper, When wiff Lake Mead go dry?, that was accepted for publication in the journal Water Resources Research, by the American Geophysical Union. They concluded that, because of allocation de- mand, aggravated by climate changes, the reservoirs on the Colorado River system will never fill again. They further predicted that there is a 50- percent probability Lake Mead will be dry by 2021. Barnett stated that they "... were stunned at the magnitude of the problem and how fast it was coming at us.... Make no mistake, this water problem is not a scientific abstraction, but rather one that will impact each and every one of us that live in the Southwest 115 Environmental Consequences One internationally acclaimed water resources expert has experi- enced and analyzed the effects of severe water shortages worldwide. He offered what he considers to be one of the earliest signs and one of the most tragic long -term, dam- aging outcomes that occur when regions are faced with water crises. Specifically, where water supplies are chronically unable to meet demand in spite of all conserva- tion, rationing and similar cutbacks, essential surface flows begin to drain from environmentally sensi- tive habitats. Wetlands areas begin to desiccate and degrade. Ground- water basin overdrafting creates irreversible geological subsidence, permanently damaging the basin's ability to recover. If water supply desperation reaches those levels, fundamental changes in that aspect of the ecosystem could occur. Land -Use Planning and a Crisis - Oriented Public How do California's statewide water supply issues directly affect Orange County? The Grand Jury found that there are two, equally important points. First, long -range water resources planning takes a major degree of innovation and creativity to establish dependable sources of diversified supply. This includes bringing "new" water to serve new homeowners in the growth areas, and the industry and commerce that sustains them. It also requires a degree of good data analysis to accurately project hydrologic and climatologic data decades into the future. Second, the water resource agencies, the land -use planning agencies and the consumers all need to be equally focused on the possibility of major supply outages to which the County is vulner- able. The Grand Jury found that the water agencies and, in fact, the water industry as a whole, are keenly aware of the inadequacies and potentially disastrous circum- stances California faces. The sense of urgency could not be higher. But, it seems that gaining the attention of a crisis - oriented public is a dif- ferent story. The Grand Jury found that planning agencies dealt with these concerns very differently. In fact, water issues seem to be of no more consequence than a noise impact study or a traffic impact analysis. Water resource issues in Orange County demand more than a check box on the environmental review form. Based on what was observed in this investigation, this has not been the case. Johnson and Loux described this issue as a "black box" phenom- enon6 wherein the professions of land planning and water resources planning have distinctly differ- ent, highly complex parameters that drive their technical analyses and decision - making processes. The unique complexities of these professions tend to deter either side from interacting effectively. Adding to the professionals' difficulties, the residents of Orange County do not seem to understand the perilous conditions within which they live. Orange County water consumers have not, to any significant degree, experienced long- duration water supply out- ages. The public's consideration for water supply typically starts and stops at the faucet handle as they expect, with every turn, dependable delivery of high - quality, safe, clean water. The perception that water sup- plies are taken for granted is an understatement. Water agencies' conservation messages are suc- cessfully making consumers more aware of their responsibility to conserve water resources. But, this is merely a fraction of the larger, more compelling issue. Conserva- tion happens after the problem has been identified. Consumers need to be cognizant of the impacts of Page 8 200 8-2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? development and the need for deci- sions before land -use decisions are made. Case Studies The Grand Jury interviewed key staff and studied voluminous public records of land -use applications and environmental reviews pertaining to several, recent, major develop- ment proposals in various areas of the County. In each case, the entire land -use decision - making process as it relates to water resources, one of the County's most precious and precarious commodities, was found to be very disappointing. When analyses were required, land -use and development decision makers deferred to the water agencies to solve the water issues. Typically, the input came via a WSA, after which it quickly disappeared from the public dialogue. Public input to express any shred of concern for — or to even question-4he long -term viability of potable water resources was conspicuous by its absence. If not relegated to a separate volume of appendices, the water supply reports were found buried hundreds of pages behind other, more "vis- ible," issues raised by vocal constit- uents, never to be heard from again in the public process. In these case studies, the Grand Jury could find little, if any, ex- pressed concern from any person or responsible agency. This begged the question as to whether the public process is flawed in light of the gravity of our water resources predicament. It also substantiated the inference that, aside from the caveats involved, "...the duty to serve is often viewed as the first, foremost, and perhaps only mission of a water - purveying agency.` Case Study #I: County of Orange - Rancho Mission Viejo (The Ranch Plan) Development The Rancho Mission Viejo development (known as "The Ranch Plan") is in south Orange County. The County of Orange processed this development over a several -year period, culminat- ing in its adoption by the Board of Supervisors in 2004. This master planned 22,000 acres of land with 7,700 acres designated for 14,000 dwelling units. Other significant elements were established with 130 acres for urban activity centers, 258 acres for business parks, 39 acres for neighborhood retail centers, five golf courses and a 1,079 -acre regional park. The Ranch Plan Program Envi- ronmental Impact Report (EIR) and General Plan Amendment, prepared in 2003, presented exhaustingly detailed analyses of, among other particulars, watershed runoff water quality, traffic circulation impacts and endangered flora and fauna protection. Mention of emergency water storage and concern for temporary water disruption via the imported water connections were limited to a single paragraph. Aside from that outdated discussion, no mention was found of how reliable water supplies would be ensured. Indeed, there was a WSA prepared by Santa Margarita Water District which also fully complied with SB 221 and SB 610 but the Grand Jury found no substantive discussion from its review of the following EIR sections: • Executive Summary: Refer- ences were made to "areas of controversy" voiced during public comments at scoping meetings. No water supply concerns were considered worthy of any mention. • Growth Inducing Impacts: Over a dozen, nearby, devel- opment - related, potentially growth- inducing projects were discussed, each making no mention of water supply concerns. • Water Resources: This per- tained primarily to surface water quality and runoff hydrology, with absolutely no discussion of potable water resources. There was seemingly no con- cern for water supply scenarios that could leave 14,000 homes without water. Indeed, the following EIR excerpt clearly established the priorities: "Due to the nature of the project, potential impacts to bio- logical resources, hydrologic condi- tions and [runoff] water quality are of primary concern." The EIR process solicited com- ments not only from the public but also via the State Clearinghouse from every agency and environ- mental group in the state. There were records of interminable (albeit important) discussions and debates over such issues as traffic and en- dangered species but potable water supply was a non- issue. It was not even deemed to be of enough rel- evance to be mentioned in the 2004 staff report when the project was presented to the Board of Supervi- sors. The aforementioned 2003 WSA was appended to The Ranch Plan. It was a comprehensively written document that assessed California's water future. The WSA provided the required numerical justification for 25 years of water to this area, based on a series of assumptions that have long since been supersed- ed by changed conditions. The nu- merous, crucial effects over just the past few years have great potential to derail many of the critical deci- sions made in the recently adopted 2008 -2009 Orange County Grand Jury Page 9 "Paper Water" — Does Orange County Have a Reliable Future? plan. The Grand Jury's view on the state of affairs is that a six -year- old water planning document, with a 25 -year projection upon which permanent development is hinged, leaves much to be desired. It makes no sense to have so little attention paid to a natural resource with such a profound impact. Despite all this, the 2003 WSA was apparently enough for the deci- sion makers and the public. Despite the fact that this development will take place in a water - deficient area of the County that relies virtually entirely on imported supplies from Metropolitan, the Grand Jury could find not one comment at all from the general public, let alone any expression of concern during the public review period. The agencies have argued that the absence of comment is not necessarily indica- tive of a lack of concern but rather a recognition that all issues were addressed. The Grand Jury, for all the reasons cited in this report, has found otherwise and that there should be concern. Clearly, the agencies process- ing The Ranch Plan followed the mandatory processes to determine adequate water supplies, using es- tablished procedures and their best efforts to provide professional data to decision makers. Nonetheless, the glaring point of this investiga- tion is that there is a serious discon- nect in the process where critical data are presented seemingly as footnotes and decisions are made in a manner that masks the situa- tion from public awareness. This was certainly not found to have been done intentionally but rather was the inevitable byproduct of the sheer volume and complexity of the documents. Typically, it is safe to presume that anyone lacking an engineer- ing degree is challenged in com- prehending the complex technical analyses of water supply issues and the concomitant impacts of various adverse scenarios. The tendency is to accept WSAs on face value and not challenge the caveats and quali- fying statements that render these assessments tentative at best. WSAs providing 20 to 25 -year projections on land uses that can be expected to be in place for at least 100 years can encounter dramatic changes. The 2003 WSA for The Ranch Plan was prepared long before several major changes were made that af- fect the dependability of water sup- plies to southern California. There should be, at least, a mitigation and monitoring reporting requirement in the Plan. Optimally, the question about an update to the WSA should be raised now, not later when specific project development permit applications are submitted. At that point, developers, in the heat of fi- nancing time constraints, will be in no mood to deal with the obstacles of additional engineering analyses; rather, they will do whatever it takes to demand that their project approvals be granted. Case Study #2: City of Orange – Santiago Hills II and East Orange Areas Planned Community Development In a very similar fashion to south Orange County, the central Orange County city of Orange, is facilitating aggressive expansion within its Sphere of Influence east and south of the Peters Canyon region of the Irvine Ranch. The development agreement for this area provided vested rights to development to the Irvine Com- pany in 2005 for approximately 4,000 dwelling units. Irvine Ranch Water District (the designated water purveyor for this area) provided a series of "Water Supply Verifica- tions" subsequent to this agreement to carry the project for 20 years. While the water supply veri- fications conclude that sufficient supplies are available pursuant to state law, it is interesting to as- sess the methodologies, caveats and disclaimers accompanying the certification sheet. In particular, the water supplier affirms that it "... does not allocate particular supplies to any project, but identifies total supplies for its service area." It would be safe to conclude that both the land planners and the water providers were satisfied that their requirements had been met and, in fact, Irvine Ranch Water District officials have subsequently empha- sized that this is the case and that sufficient supplies are available. Although no documents were found to evidence their discussions, the officials have also emphasized that the agencies have had a dialog re- garding the conditions under which the water supplies would be of- fered and District staff testified on pertinent issues at the City Council public hearings. As with the The Ranch Plan, the decisions on this major project establish commitments far beyond the planning horizon. It is unclear how a developer's vested rights may prevail over any changes in the WSA over time. Case Study #3: City of Brea - Canyon Crest Development In north Orange County, the city of Brea, in 2009, approved (subject to appeal) the development of 165 homes on 367 acres of hillside pas- ture and open space surrounded by Chino Hills State Park, near Carbon Canyon Road. As would be expected, the project environmental review Page 10 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? extensively evaluated the woodland habitat and wildlife corridors. An elaborate and extensive monitoring and mitigation program was devel- oped for the oak - walnut woodland habitat. Because the size of this project fell short of the trigger points for SB 221 and SB 610, no WSA was required. In fact, the EIR concludes specifically that "[n]o impact will result from the Project involving the acquisition of new or expansion of existing water supply entitlements or resources." This was the only mention found con- cerning water supply by either the environmental consultant or by any person, agency or group concerned with the impacts of this project. Admittedly, this single proj- ect would have a nominal annual demand of perhaps 100 acre -feet (about 33 million gallons), on the County's water supply, which would add about one percent to Brea's annual demand. But, it is indicative of how the cumulative impacts of such projects can incre- mentally affect the overall supply. Steps Toward Understanding A better interface between land - use planners and water planners has evolved over the years with the assistance of the State Legislature. Since the 1983 adoption of the Urban Water Management Plan - ning Act (California Water Code Section 10610 et seq), California has required each water purveyor to prepare and submit, every five years, an Urban Water Management Plan (UWMP). This is a founda- tional document and a source of information for long -range water planning. Cities and counties are required to use these documents when preparing their General Plans. The UWMP, while important, is a fairly general planning docu- ment. It was not until 2001 (after most of Orange County already had been developed) that the State seriously acknowledged that water supply and local land -use devel- opment planning are inextricably intertwined. The California Legis- lature's SB 221 and SB 610 exem- plify this need for an administrative record in the environmental docu- ments. These laws only apply to large projects and, according to one expert in the water environmental field, do "... little more than raise awareness." Also in 2001, the Legislature passed the Integrated Regional Water Management Planning (IRWMP) Act, which allows a re- gional water management group to prepare and adopt an IRWMP that encourages local agencies to work cooperatively in managing their entire array of water resources for beneficial use. Innovative Solutions to Long - Term Supply Shortages and the State of Orange County's Water Resources Some experts in the academic and industrial communities con- sider that California's water crises can be avoided by a concerted effort on four fronts: (1) improving water use efficiencies through con- servation, water- saving appliances and technological advances (e.g. "smart" irrigation timers); (2) ad- vancing innovative water recycling and reuse strategies; (3) improving storm water runoff capture, storage and groundwater recharge; and (4) securing water transfer agreements between agencies to effectively balance supply and demand. The Grand Jury found that Orange County water agencies are, in many cases, setting the example of best practices through sophisticated ap- plications on each of these fronts. In addition, concerted public /pri- vate efforts are underway to build at least two major seawater desali- nation plants in Orange County. Combined with a third desalina- tion plant near Camp Pendleton, planned jointly with the San Diego County Water Authority, coastal desalination projects will supply up to 140,000 acre -feet (45.6 billion gallons) per year of new water. Orange County water agencies are pursuing long -term water trans- fers outside the County boundar- ies. An agreement with the South Feather Water and Power Agency in northern California was being negotiated to bring up to 10,000 acre -feet (about 3.3 billion gallons) per year to Orange County.' While this project now appears unlikely to be consummated, there are other, similar efforts underway that are considered to be more viable. Santa Margarita Water District's transfer agreement with Cucamon- ga Valley Water District also rep- resents individual agency attempts to secure firm water contracts. In this case, 4,250 acre -feet (about 1.4 billion gallons) per year would be allocated to Orange County from surplus water in an entirely separate groundwater basin. This basin re- sides within Metropolitan's service area, which helps to facilitate the actual water transfer. Irvine Ranch Water District is 1 developing a water banking pro- gram in partnership with the central valley Rosedale -Rio Bravo Water Storage District near Bakersfield in Kern County. This arrangement will provide up to 17,500 acre -feet (5.7 billion gallons) per year from groundwater recharge and recovery facilities, along with expanding the Cross Valley Canal to transfer 2008 -2009 Orange County Grand Jury page 11 "Paper Water" — Does Orange County Have a Reliable Future? stored water to the Irvine Ranch facilities The Grand Jury was particu- larly impressed with the OCWD's Ground Water Replenishment System (GWRS) established in conjunction with its adjacent waste- water treatment agency, the Orange County Sanitation District. The Grand Jury witnessed the GWRS while in operation, delivering 72,000 acre -feet (about 23.5 billion gallons) per year of ultra -pure water for direct, potable reuse via 1,600 acres of percolation basins in north Orange County. This is about 10 to 14% of total basin demand and production is expected to expand to 100,000 acre-feet (32.6 billion gal- lons) per year within the next three years. The 2003 -2004 Orange County Grand Jury also recognized the GWRS while it was still in its implementation stages. This unique project is the largest of its kind in the world. It exemplifies how technology is providing innovative solutions to environmental prob- lems and insight to our future. The capital cost of the GWRS system was approximately $500 million. While immensely expen- sive to build and operate, federal and state grants and subsidies have reduced the unit cost of the product water to approximately $650 per acre-foot. Since imported Metro- politan water is anticipated to pass $700 per acre -foot this summer, the break -even point may be imminent. As water becomes increasingly scarce and prices rise accordingly, recycled wastewater systems, even those meeting stringent human consumption requirements, are anticipated to become more com- petitively cost effective. All these innovative programs are admirable but they do not solve the problem. Shortfalls from the State Water Project and the Colora- do River of the magnitudes cited by Metropolitan and others cannot be made up by these relatively limited efforts. Response to Catastrophic Supply Interruptions Regional shortages: The most serious water supply concerns af- fecting Orange County lie outside its boundaries. Metropolitan has elaborate response plans and infra- structure in place to deal with sup- ply curtailments; the most recent notable example is its Diamond Valley Lake near Hemet. This is an 800 - thousand acre-foot (260 billion gallons) reservoir, of which about one -half is reserved for catastrophic emergencies. Completed in 1999, Diamond Valley took four years to fill with a six -month emergency water supply and is considered the most important achievement in pro- tecting southern California against a State Water Project system out- age. County-wide shortages: If circumstances dictate that Orange County is forced into being self - sufficient for an extended period, how will it survive? Orange County water managers have been diligent in preparing to overcome worst - case water delivery interruption scenarios. In times of dire need, be- ing able to instantly re -route water from the north County groundwater basin, to the south County supply lines, through pre - established pipe- line routes, is crucial. Beginning in 1983, the Orange County water agencies developed a Water Supply Emergenev Pre- paredness Plan, jointly funded by MWDOC and OCWD, and supported by the Orange County Water Association. This eventually resulted in the formation of the Wa- ter Emergency Response Organiza- tion of Orange County (WEROC), a single point of coordination for every conceivable type of acute, water - related disaster in Orange County. Approximately 95 percent of south Orange County's water is imported from northern California and the Colorado River and de- livered to Metropolitan filtration plants in north Orange County before it is sent 35 miles to south County via two aging pipelines traversing active seismic faults. The Orange County Water System Reliability Study, along with the South Orange County Water Relt- ability Study established an array of project remedies to address specific threats to water transmission and distribution infrastructure through- out Orange County and, in particu- lar, south Orange County, in times of long -term crisis. On August 15, 2001, and again on April 23, 2003, MWDOC and OCWD adopted a Memorandum of Understanding to accomplish among other objec- tives, an on -going implementation monitoring effort to help facilitate the various agencies involved in completing these projects. The current emergency relief through Orange County water reliability planning is approxi- mately 3,000 acre-feet (about 1 billion gallons) from an emergency connection to Irvine Ranch Water District's Dyer Road well field in Santa Ana. This provides only about 10 percent of what is needed. The other 27,000 acre -feet (about 9 billion gallons) will arrive when a planned array of pump, pipeline, treatment and reservoir projects is built. These projects will be able to transfer and store emergency potable water as well as have avail- Page 12 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? lMma ^FP ��. Fl m ;��3 bmw LeaMSWage NIP OM(: <•1•nY,lbb I-� �S FS&IIN ALN, SLf -EWF01 hbM1e t� Y emparc„m,a u.uai aammmmi,enm,erna. Anl a�.l•:, aN CEW aaaem�m S.§,p R, WTP kasm,b� ape GW Ernpmry Smeu�eµmmE, oaan 0.,N [m,W pp9ne15JCWA Exhibit G able brackish and seawater purifica- tion systems to create "new" water for south Orange County. These projects are depicted in Exhibit G. These projects vary signifi- cantly in their planning, design and construction complexities as well as in their funding requirements. Completion of the entire system is not expected until at least 2015. Once completed, the projects will serve daily needs while being ready to deliver emergency reserves if the supply network becomes disrupted at any point. rA Dm, cam a<m N- 1In,um 0 o � mmo i u�waww uc na.arvnb C,mp RnEiam hiM MNDOG5DCW1 Q<m Cea,Lnean Glnl •SCE SOMGS Emerging self - sufficiency management strategies: Several efforts have commenced to maxi- mize the ability of Orange County to be self - sustaining, especially in times of crisis. The most compre- hensive planning underway was begun in 2000, headed by the OC Watersheds Division of OC Public Works. It consolidates efforts in ur- ban runoff watershed management and regional water resources plan- ning strategies. A comprehensive approach is underway, addressing the County's 13 watersheds with several objectives: • Protect communities from drought • Enhance local water supply and system reliability • Ensure continued water security • Optimize watershed and coastal resources • Improve watershed water quality • Safeguard endangered species habitat Nearly 100 projects have been identified that encompass, among other facets, the following: • Water supply reliability, water conservation and water use efficiency • Storm water capture, storage, treatment and management • Creation and enhancement of wetlands and acquisition, protection, and restoration of open space and watershed lands • Non -point source pollution reduction, management and monitoring • Groundwater recharge and management • Water banking, water ex- change, water reclamation, desalting, and other treatment technologies Disaster Planning: In Novem- ber, 2008, the entire County of Orange participated in an exercise dubbed "Golden Guardian," based on a Richter Scale magnitude 7.8 seismic event. Part of this exercise was to include dealing with the ex- pected effects of disrupted local and County-wide water transmission and distribution systems. WEROC volunteers participated in this event to test the water agencies' ability to respond effectively during emer- gency events. The lessons learned 2008-2009 Orange County Grand Jury Page 13 "Paper Water" — Does Orange County Have a Reliable Future? from this exercise were valuable in identifying the need for better inte- gration of the individual agencies' responses through WEROC and on to the Orange County Operational Area Emergency Operations Center (EOC). The issues appear to be those requiring improved com- munication rather than inadequate resources. MWDOC and Its Member Agency Conflicts As introduced earlier, MW- DOC, with some exceptions, is the predominant water wholesaler that arranges for Orange County water retailers' imported delivery of Metropolitan water for their customers. MWDOC is solely an administrative agency in that it operates no infrastructure facili- ties that physically deliver water to any of its member agencies, comprised of cities, special dis- tricts and quasi- public companies. Because of its unique connection with nearly every water agency in Orange County, by default it has become the coordinator of many re- gional programs that are generally suited for a centralized, coordinated response. This applies to consistent water conservation plans; compat- ible Urban Water Management Plans; universal customer education outreach; centralized legislative ad- vocacy; and coordinated emergency preparedness. MWDOC also is allocated four seats on Metropolitan's 37 member board of directors. These four mem- bers (not all of them are necessarily MWDOC board members), repre- sent the interests of MWDOC's 28 member agencies. MWDOC was formed in 1951, when Orange County demographics were quite different. Today, it finds its role challenged, primarily by several major, south Orange County member agencies, over some key differences in representation and governance. In June, 2006, MWDOC was anticipating a scheduled Municipal Services Review (MSR) by the Or- ange County Local Agency Forma- tion Commission (LAFCo). LAF- Co's Mission Statement emphasizes that it "... serves the citizens of Orange County by facilitating con- structive changes in governmental structure and boundaries through special studies, programs, and ac- tions that resolve intergovernmental issues, by fostering orderly devel- opment and governance, and by promoting the efficient delivery of services." The MSR process, which is basically a performance audit, is one of the most effective means to accomplish this goal. MWDOC had commenced stakeholder meetings with its mem- ber agency colleagues to resolve key issues of disagreement: • Representation on Metropoli- tan's board of directors • Budget process and fairness of rate structures • Lack of inclusiveness of south County agencies in setting rates • MWDOC's financial involve- ment in local projects (e.g. desalination) • Duplicative services (e.g. leg- islative and public outreach) • Financial reserve policies LAFCo discovered, when it embarked on its MSR process in February, 2007, that there were still major, unresolved issues. It facilitated several meetings to attempt resolution. In November, 2007, after limited success, LAFCo decided to convene a "governance study" with a definite timetable for reaching consensus on conclusions and specific recommendations. The final approval for that effort was given in January, 2008, commenced in June, 2008, and continues to the present time. All 28 member agencies have participated in the governance study. After nearly a year of effort, the feasible revamping options have been narrowed to three: 1. Continuing with MWDOC's current structure, subject to sev- eral administrative adjustments to eliminate the current points of disagreement 2. Dissolving MWDOC and form- ing a new, County-wide water authority 3. Creating a separate south County water authority to, basi- cally, provide similar services now provided by MWDOC but being more responsive and accountable to the unique needs expressed by the south County agencies, particularly for more equitable representation with Metropolitan. The particulars of the gover- nance study discussions are beyond the scope of this investigation so they were not reviewed in detail. From the Grand Jury's perspective of the issues, however, Option 3 seems short sighted. Bifurcating the County into two, basically compet- ing agencies would he counterpro- ductive as Orange County moves into a future with increasingly dif- ficult and contentious water issues. LAFCo has been consolidat- ing agencies where jurisdictional effectiveness would be improved. Splitting a major overseer of the County's water supplies into two jurisdictions would seem to con- tradict LAFCo's previous efforts. LAFCo has a unique role in this discussion as a facilitator. Even though it has hired professional Page 14 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? support consultants and should be as a fresh water conveyance agreements are underway lauded for its initiative, one noted due to uncontrollable salin- to create sources of "new" professor in the field has observed ity increases. This adds more water for Orange County. The that LAFCo may be operating be- apprehension about Orange adequacy of contributions yond its technical abilities to effec- County's water future. from these new sources is tively facilitate the varied, complex Recent court rulings on uncertain. technical issues. environmental habitat protec- Orange County is a unique The M WDOC member agencies tion and water rights alloca- territory with many inher- need to resolve their differences tions have raised the level of ent advantages to endure the and dedicate themselves to a uni- urgency by imposing possibly impending water crises. If Or- fied vision, whether it be continuing permanent cuts to southern ange County's water agencies with M WDOC under a modified California's formerly reliable, work together seamlessly and agreement or creating a new, uni- traditional water supplies the County's resident consum- fied, County-wide water authority. from northern California and ers become more involved As rate increases mount and water the Colorado River. While stakeholders, a positive out - supplies diminish, the need for uni- the California Department come is much more likely. fication will become increasingly of Water Resources recently Orange County's ground - essential. If a catastrophic event adjusted 2009 State Water water storage resources are occurs, the need for unification will Project deliveries upward to world class, both in innova- become urgent. 30 percent of normal alloca- tive technical superiority and tions, they had, at one point, in their management. Water Conclusions fallen to 10 to 15 percent of experts in both industry and The following conclusions normal. academic institutions univer- raise important concerns over the Orange County's water sup- sally praise the innovative and precarious condition of Orange ply infrastructure and supply effective methods by which County's water resources. More constraints have received Orange County has protected public awareness and process im- minimal attention in the over- and managed its innate water provement regarding water issues all discussion of developing resources. In particular, its must be made as the development Orange County. groundwater aquifer is an in- of Orange County continues. The • Interaction of land planners credibly rich natural resource numerous water agencies in Orange and water planners in the that is the envy of many areas County need to strengthen their development process must be in the country challenged by unified approach in preparing for a improved. depleted and damaged water difficult future. Some of the specific • Water pricing to pay for the tables. points are as follows: various, necessary, costly sup- Orange County natural water • State Water Project infrastruc- ply sources, under even the storage differs dramatically ture is extremely vulnerable best -case scenarios, will rise between its north and south to catastrophic failures from to levels never before seen. reaches. South Orange Coun- natural events in the Sacra- In this water - scarce region, ty has no groundwater basin, mento -San Joaquin Delta consumers are facing dire making it almost wholly de- and seismic events affecting circumstances regardless of pendent on imported supplies other major water transmis- population growth and hous- from Metropolitan. sion infrastructure. Having ing construction. The County's resources have a two - out -of -three chance of • Public awareness of water allowed water managers to drastic levee failures within supply issues is far below institute protocols to deal 25 years which could disable acceptable levels and must be with emergencies. Examples the state's water supply for at improved. of effective working rela- least two years is alarming. • A number of innovative infra- tionships have been demon- • Scientists have projected the structure projects and transfer strated in associations such as inevitable end to the Delta WEROC. It would be a shame 2008 -2009 Orange County Grand Jury Page 15 "Paper Water" — Does Orange County Have a Reliable Future? to politically sever the County very little, if any, expressed F.3(b) The current dis- water resources management concern from the public in agreement is a distraction structure and make a unified comparison to the numerous from the greater good working relationship all the other environmental issues of the agencies working more difficult. presented during develop- toward Orange County's In closing, the announcement ment project reviews. water future. for the May 15, 2009, 0. C. Water Summit in Anaheim succinctly F.2(a): Orange County's F.3(c) The stakeholders raises the level of urgency: "Most citizens and interest in LAFCo's study failed business leaders and residents of groups do not appear to to meet their March 11, Orange County have no idea that grasp the seriousness of 2009 deadline for LAFCo's the water crisis is this serious and the water supply situa- public hearing on this mat - escalating." Specific actions are ur- tion or the complexity and ter. Continued delays are gent. This investigation is intended urgency of the necessary unacceptable. to offer several of them that will solutions. F.4: Orange County is strengthen the County's condition. F.2(b): Several recent, uniquely fortunate to have Findings substantial water sup- a vast, high - quality, well - ply awareness efforts are managed groundwater basin In accordance with Califor- underway (e.g. the O.C. serving its north geographi- nia Penal Code Sections 933 Water Summit) that show cal area. However, in its and 933.05, each finding will be promise but appear target- south reaches, it has an responded to by the government ed to audiences that are equally large, high - growth entity to which it is addressed. The already informed. area with virtually no avail - responses are to be submitted to able groundwater resources. the Presiding Judge of the Supe- F.3: LAFCo is the agency rior Court. The 2008 -2009 Orange charged with facilitating F.4(a): The difference in County Grand Jury has arrived at constructive changes in groundwater availability the following findings: governmental structure to creates a "haves versus F.1: There is inadequate promote efficient delivery of have -nots" situation that coordination between local services. To this end. LAFCo is conducive to inherent land -use planning agencies is conducting a governance conflicts. and local water supply agen- study of MWDOC which is ties, resulting in a process the designated representa- F.4(b): The difference in that fails to fully engage the tive for nearly all the Orange groundwater availability issues. County retail water agen- provides opportunities for ties, acting on their behalf responsible participants F.1(a): Water agencies with their surface water sup- to develop and construct have tended to avoid inter- plier Metropolitan. long -term solutions which fering with or participating will benefit the entire in growth- management F.3(a) There are a number County. decisions. of points of governance disagreement between Responses to Findings F.1, F.1(b): Cities and the MWDOC and several of its F.1(a), F.1(b), and F2, F2(a) and County have tended to not member agencies. This is F.2(b) are required from the Board critically evaluate the limi- creating an impediment to of Supervisors of the Countr of tations of the water agen- the on -going effectiveness Orange: the city, councils afall cit- cies' supply projections. of these agencies in critical ies rea ann Bible for land -use plan - F.2: California's looming areas of Orange County's aft. Aliso Viejo, Anaheim, Brea, water supply management. Buena Park, Costa Mesa, Cypress, water supply crisis receives Page 16 2008-2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? Dana Point, Fountain Valley, Fullerton, Garden Grove, Hun- tington Beach, Irvine, La Habra, La Palma, Laguna Beach, Laguna Hills, Laguna Niguel, Laguna Woods, Lake Forest, Los Alamitos, Mission 11ejo, Newport Beach, Orange, Placentia, Rancho Santa Margarita, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Stanton, Tustin, Vdla Park, Westminster and Yorba Linda; the city councils and boards of direc- tors - tors ofall retail water suppliers: cities ofAnaheim, Brea, Buena Park, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Tustin and Westmin- ster; East Orange County Water District, El Toro Water District, Irvine Ranch Water District, La- guna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water District, South Coast Water District, Trabuco Canyon Water District and Yorba Linda Water District, the Board Directors of the Municipal Water District of Orange County. the Board of Directors of the Orange County Water District, and the city councils of lire cities served by Golden State Water Company: cities of Cypress, Los Alamitos, Placentia and Stanton. Responses to Finding E3, F.3(a), F.3(b) and F.3(e) are re- quired from the Board of Directors of the Municipal Water District of Orange County; the city councils and boards of directors of all Mu- nicipal Water District ofOranee Counn, member agencies: cities of Brea, Buena Park, Fountain Valley, Garden Grove, Hunting- ton Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San Juan Capistrano, Seal Beach, Tusthr and Westmin- ster, East Orange County Water District, El Toro Water District, Irvine Ranch Water District, La- guna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water District, South Coast Water District, Trabuco Canyon Water District and Yorba Linda Water District; the Orange Conn& Local Agency Formation Commission: the City Council of the cities ofAnaheim. Fullerton and Santa Ana. and the cijl coun- cils of the cities served by Golden State Water Company: cities of Cypress, Los Alamitos, Placentia and Stanton. Responses to Finding F.4, F.4(a) and F.4(b) are required from the Board of Directors of the Municipal Water District of Or- anve Counn; the Board ofDirec- tors of the Orange County Water District• the citi, councils and boards of directors of all Orange Coun{v retail water suppliers: cities ofAnaheim, Brea, Buena Park, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Tustin and Westmin- ster, East Orange County Water District, El Toro Water District, Irvine Ranch Water District, La- guna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water District, South Coast Water District, Trabuco Canyon Water District and Yorba Linda Water District, and the dXL councils of the cities served by Golden State Water Compamr: cities ofQpress, Los Alamitos, Placentia, and Stanton. Recommendations In accordance with Califor- nia Penal Code Sections 933 and 933.05, each recommendation will be responded to by the government entity to which it is addressed. The responses are to be submitted to the Presiding Judge of the Superior Court. Based on the findings, the 2008 -2009 Orange County Grand Jury makes the following recom- mendations: R.1: Each Orange County municipal planning agency, in cooperation with its respective water supply agency, should prepare for adoption by its city council, a dedicated Water Element to its General Plan in conjunc- tion with a future update, not to exceed June 30, 2010. This document should include detailed implemen- tation measures based on objective -based policies that match realistic projections of the County's future water supplies. These objectives, policies and implementation measures should address imported supply constraints, including catastrophic out- ages and incorporate the re- alistic availability and timing of "new" water sources such as desalination, contaminat- ed groundwater reclamation and surface water recycling. (Findings F.1, F.1(a), F1(b), F.2. F.2(a) and F.2(b)) R.2: Each Orange County retail and wholesale water 2008 -2009 Orange County Grand Jury Page 17 "Paper Water" — Does Orange County Have a Reliable Future? agency should affirm its re- sponsibility to develop new, additional, innovative public outreach programs, be- yond water conservation and rationing programs, to expose the larger issues surrounding water supply constraints facing Orange County. The objective should be to connect the public with the problem. The outreach effort should entail a water emergency exercise that simulates a complete, sud- den break in imported water deliveries. The exercise should be aimed directly at the public and enlist wide- spread public participation on a recurring basis begin- ning by June 30, 2010. This recommendation may be satisfied by a mufti- agency exercise but the inability to coordinate such an event should not preclude the individual agency's responsi- bility. (Finding F.2, F.2(a) and F.2(b)) R.3: Each MWDOC mem- ber agency should reaffirm to LAFCo that it will assign the resources necessary to expediently resolve regional governance issues. While the subject study is being facilitated by LAFCo, the options are with the agen- cies to decide what is best for all. Once conclusions are reached, the parties need to agree quickly and, hope- fully, unanimously to adopt a course of action. (Finding F3, F.3(a), F.3(b) and F.3(c)) R.4: Each Orange County retail and wholesale water agency should affirm its commitment to a fair -share financial responsibility in completing the emergency water supply network for the entire County. The entire County should be prepared together for any conditions of drought, natural or hu- man- caused disaster, or any other catastrophic disruption. WEROC should commence meetings of all parties, to facilitate consensus on an equitable funding/financing agreement. (Finding F.4, F.4(a) and F.4(b)) Responses to Recommendation R.l are required from the Board ofSupervisors of the County, of Orange: the citr councils of all cit- ies LMonsible for land -use plan- ni�g: Aliso Viejo, Anaheim, Brea, Buena Park, Costa Mesa, Cypress, Dana Point, Fountain galley, Fullerton, Garden Grove, Hun- tington Beach, Irvine, La Habra, La Palma, Laguna Beach, Laguna Hills, Laguna Niguel, Laguna Woods, Lake Forest, Los Alamitos, Mission Kejo, Newport Beach, Orange, Placentia, Rancho Santa Margarita, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Stanton, Tustin, f rlla Park, Westminster and Yorba Linda, I&L c& councils and boards of direc- tors ofall retail water suppliers: cities ofAnaheim, Brea, Buena Park, Fountain galley, Fullerton, Garden Grove, Huntington Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Tustin and Westmin- ster; East Orange County Water District, El Toro Water District, Irvine Ranch Water District, La- guna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water District, South Coast Water District, Trabuco Canyon Water District and Yorba Linda Water District, the Board of Directors of the Municipal Water District of Orange Countr Board of Directors of the Orange County, Water District and the city coun- cils of the cities served by Golden State Water Company: cities of Cypress, Los Alamitos, Placentia and Stanton. Responses to Recommenda- tion R.2 are required from the cin, councils and boards ofdirec- tors of all retail water suppliers: cities ofAnaheim, Brea, Buena Park, Fountain galley, Fullerton, Garden Grove, Huntington Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Tustin and Westmin- ster; East Orange County Water District, El Toro Water District, Irvine Ranch Water District, La- guna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water District, South Coast Water District, Trabuco Canyon Water District and Yorba Linda Water District, the Board of Directors of the Municipal Water District of Orange Coupq. the Board of Directors of the Ortinee Counn, Water District: and the c& councils oftlre cities served AK Golden State Water Co=anv: cities of Cypress, Los Alamitos, Placentia and Stanton. Responses to Recommendation R.3 are required from the Board of Directors of the Municipal Water District of Orange Coun4v the cilL councils and boards of directors Page 18 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? of all Municipal Water District of Orange County member agen- do: cities of Brea, Buena Park, Fountain Valley, Garden Grove, Huntington Beach, La Habra, La Palma, Newport Beach, Or- ange, San Clemente, San Juan Capistrano, Seal Beach, Tustin and Westminster, East Orange County Water District, El Toro Water District, Irvine Ranch Water District, Laguna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water Dis- trict, South Coast Water District, T rabuco Canyon Water District and Yorba Linda Water District, the Orange County Local A=cv Formation Commission: the CiiL' councils of the cities served br Golden State Water Cornpanv: cities of Cypress, Los Alamitos, Placentia, and Stanton. Responses to Recommendation R.4 are required from the Board of Directors of the Municipal Wa- ter District of Orange County: the Board of Directors of the Orange County Water District: the c&L councils and boards of directors gfall Orange County retail water suppliers: cities ofAnaheim, Brea, Buena Park, Fountain Valley, Ful- lerton, Garden Grove, Hunting- ton Beach, La Habra, La Palma, Newport Beach, Orange, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Tustin and Westminster, East Orange County Water District, El Toro Water District, Irvine Ranch Water District, Laguna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, Santa Margarita Water District, Serrano Water Dis- trict, South Coast Water District, T rabuco Canyon Water District and Yorba Linda Water District: and the ci(r, councils of the cit- ies served by Golden State Water m an : cities of Cypress, Los Alamitos, Placentia and Stanton. Required Responses The California Penal Code specifies the required permis- sible responses to the findings and recommendations contained in the report. The specific sections are as follows: §933.05 1. For purposes of Subdivision (b) of Section 933, as to each grand jury finding, the respond- ing person or entity shall indi- cate one of the following: (1) The respondent agrees with the finding. (2) The respondent disagrees wholly or partially with the finding, in which case the response shall specify the portion of the finding that is disputed and shall include an explanation of the reasons therefore. 2. For purposes of subdivision (b) of Section 933, as to each grand jury recommendation, the responding person or entity shall report one of the follow- ing actions: (1) The recommendation has been implemented, with a summary regarding the implemented action. (2) The recommendation has not yet been implemented, but will be implemented in the future, with a timeframe for implementation. (3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or de- partment being investigated or reviewed, including the governing body of the public agency when applicable. This timeframe shall not exceed six months from the date of publication of the grand jury report. (4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation therefore. 200 8-2009 Orange County Grand Jury Page 19 "Paper Water" — Does Orange County Have a Reliable Future? Table 1: Findings and Recommendations Matrix City /Organization/ Agency Aliso Vie'o F 1 • F 2 • F 3 F 4 R 1 • R 2 R 3 R 4 City/Organization/Agency Anaheim F F 1 2 F F 3 4 R 1 R 2 R 3 R 4 Anaheim • • • Brea Brea • • • 1 Buena Park Buena Park • • • Fountain Valle Costa Mesa • • • Fullerton C ess • • • Carden Croce Dana Point • • • Huntington Beach Fountain Valley La Habra Fullerton • • • La Palma Garden Grow • • • Newport Beach Huntington Beach • • • Orange Irvine • • • San Clemente La Habra • • • San Juan Capistrano La Palma • • • Santa Ana Laguna Beach • • • Seal Beach Laguna Hills • • • Tustin Laguna Niguel • • • Westminster la una Woods • • • Fast Orange County Water District Lake Forest • • • 11 Toro Water District Los Alamitos • • • mine Ranch Water District Mission Viejo • • • Laguna Beach County Water District Ney4wrt Beach • • • Mesa Consolidated Water District Orange • • • Moulton Niguel Water District Placentia • • • Santa Margarita Water District Rancho Santa Margarita • • • Serrano Water District San Clemente • • • South Coast Water District San Juan Capistrano • • • Trabuco Canyon Water District Santa Ana • • • Vorba Linda Water District Seal Beach Stanton • • • • • • �' - - - - _ Municipal Water District of Orange County — Tustin • • • Orange Coun Water District Villa Park Westminster • • • City of Cypr,ss Vorba Linda • • • City of Los Alamitos Counh of 01'nnLe * . City of Placentia * Includes sulsets of findings i(a), (b), (c), etc.l Citv of Stanton OC Local Agency Formation Commission Page 20 2008 -2009 Orange County Grand Jury "Paper Water" — Does Orange County Have a Reliable Future? Glossary of Terms Acre -foot: The amount of water that would fill a one -acre area to a depth of one foot (equivalent to 325,851 gallons) • EIR: Environmental Impact Report • LAFCo: Orange County Local Agency Formation Commission • Metropolitan: Metropolitan Water District of Southern California • MSR: Municipal Services Review • MWDOC: Municipal Water District of Orange County • New Water: (1) A new source of potable water with or without a new pipeline delivering water from outside the area; (2) Purified brackish or recycled water within the area that has been treated to drinking water standards that would otherwise be discharged to waste • Non -Point Source Pollution: Contaminated surface drainage water (runoff) of which the sources of the pollution are so numerous that individual responsibility cannot be determined • OCWD: Orange County Water District • Paper Water: A term used to describe allocated water which an individual or agency is entitled to receive, presuming that the water exists. Paper water differs from "wet water" in that paper water is based on projections and expected deliveries. • SB 221: California Government Code Sections 66455.3 and 66473.7. Requires identification of adequate potable water supplies to serve most development projects over 500 dwelling units, using a historical water record of at least 20 years. • SB 610: California Water Code Sections 10631, 10656, 10910, 10911, 10912, 10915 and 10657. Re- quires a WSA for most development projects over 500 dwelling units • UWMP: Urban Water Management Plan • Vested rights: A property owner's right to proceed with his development in substantial compliance with the ordinances, policies and standards in effect at the time of agency approval. A vested project is generally immune from any new conditions that might otherwise have resulted between the date of ap- proval and issuance of building permits had the project not received vesting status. • WEROC: Water Emergency Response Organization of Orange County • WSA: Water Supply Assessment 2008 -2009 Orange County Grand Jury Page 21 "Paper Water" — Does Orange County Have a Reliable Future? References 1. The Ranch Plan NCCP1MSAA1HCPJo1nt Programmatic EIR/EIS Growth Induc- ing and Cumulative Impacts, Section 6, page 12 2. Beyond Chinatown, Steven P. Erie, Stanford University Press, 2006, page 230 3. Comparing Futuresfor the Sacramento —San Joaquin Delta, Jay Lund, et al, 2008, pages 3 and 53 4. TheAmerican Southwest. Are We Running Dry?, video documentary, The Chroni- cles Group, 2008 5. Scripps News, Scripps Institution of Oceanography, February 12, 2008 6. Water and Land Use; Planning Wisely for California Is Future, Karen E. Johnson and Jeff Loux, Solano Press Books, 2004, pages 16 and 66 7. 2005 Urban Water Management Plan, Municipal Water District of Orange County, adopted December 21, 2005, pages 105 and 178 Exhibits A, B, C, E -1, E -2 and G are used with permission of the Municipal Water Dis- trict of Orange County. Exhibit D is used with permission of the Orange County Water District. Exhibit F is used with permission of the Delta Vision Foundation. Page 22 2008 -2009 Orange County Grand Jury III CITY OF NEWPORT BEACH September 9, 2009 The Honorable Kim Dunning Presiding Judge of the Superior Court 700 Civic Center Drive West Santa Ana, California 92701 RE: Response to the Grand Jury Report on "'Paper Water' — Does Orange County Have A Reliable Future ?" Honorable Judge Dunning: This letter is submitted in response to the June 15, 2009 Grand Jury report entitled "'Paper Water' — Does Orange County Have A Reliable Future ?" As mandated by Penal Code Sections 933.05 (a) and (b), the following responses address the findings and recommendations of the Grand Jury. In accordance with the report, the City of Newport Beach was requested to respond to Findings F.1, F.1 (a), F.1 (b), F.2, F.2 (a), F.2 (b), F.3, F.3 (a), F.3 (b), F.3(c), FA, FA (a) and FA (b) and Recommendations R.1, R.2, R.3 and RA. Our responses are provided below: GRAND JURY FINDINGS: Finding F.1: There is inadequate coordination between local land -use planning agencies and local water supply agencies, resulting in a process that fails to fully engage the issues. Disagree. The City of Newport Beach is a retail water supplier, with that function managed by the City's Utilities Department. There is regular coordination between the Planning Department and the Utilities Department with regard to long range planning such as the General Plan as well as with regard to specific development projects. The City's Urban Water Management Plan was used as a resource in preparation of a comprehensive update to the General Plan and the EIR on that project in 2006. The City's Utilities Department, as well as Mesa Consolidated Water District and Irvine Ranch Water District, which serve parts of Newport Beach, were consulted during preparation of the General Plan EIR. Likewise, the appropriate water supplier is asked to prepare a water supply assessment for each proposed development project with more than 500 dwelling units, as required by SB 221 and SB 610. The Planning Department and the City's environmental consultants review these reports and, if necessary, ask questions of the water suppliers before the information is used in the project EIRs. It is important to note that the responsibilities of cities include providing for the development of new housing for a growing population. This is clear in the State's Housing Element requirements and Regional Housing Needs Assessment numbers that must be included as goals in Housing Elements. Newport Beach has provided the water agencies that serve our community with our adopted Housing Element to assist them with planning, as required by State law. While the California Water Code provides that housing for lower income households should be given priority in water supply, the reality is that few affordable housing projects are developed without some kind of connection to the development of market rate housing. Water agencies generally view their jobs as using water resources more efficiently to accommodate growth, and this assists in meeting the State's and cities' housing goals. Nonetheless, the water conservation ordinance currently under consideration by the Newport Beach City Council includes a provision that no new connections will be permitted when water shortages reach Water Shortage Crisis (Mandatory >40% reduction) This is regardless of whether land use approvals have been granted for development. Finding F.1(a): Water agencies have tended to avoid interfering with or participating in growth- management decisions. Disagree. The City of Newport Beach wouldn't characterize the participation of water agencies in long -range planning or growth- management decisions as "interference." As described in the response to Finding 1, water agencies that supply Newport Beach do participate in local planning analyses and decisions. Finding FA(b): Cities and the County have tended to not critically evaluate the limitations of the water agencies' supply projections. Agree. The City's Planning Department, Planning Commission and City Council rely on water agencies as experts on water supply and delivery, just as they rely on archaeologists, biologists, geologists, hydrologists, traffic engineers and others as experts in their fields. The California Environmental Quality Act (CEQA) speaks to the weight of information and testimony presented by qualified experts as opposed to opinions of non - experts. The adequacy of an EIR could be challenged if the document differed from information presented by the recognized expert, the water agency, without evidence from other qualified parties. The City of Newport Beach is aware of short-term water supply problems. Conservation efforts in Newport Beach, as a result of mitigation measures on development projects and voluntary actions by residents and businesses, have resulted in reductions in water use of 8% over the last fiscal year. The City will continue to require water conservation measures in new development projects. However, the Planning Department is not qualified to "second guess" the water agencies that serve our City with regard to long -term analysis and the water agencies' progress in developing new sources of water and securing water transfers. Likewise, the Utilities Department and Newport Beach's other water supply agencies are constrained to use supply projections provided to them by regional suppliers. Finding F.2: California's looming water supply crisis receives very little, if any, expressed concern from the public in comparison to the numerous other environmental issues presented during development project reviews. Agree. CEQA charges planning agencies with presenting information on all potentially significant environmental impacts of proposed projects. It is true that EIRs and other analyses of development projects in Newport Beach include more detailed discussion on issues such as traffic and noise than on water supply. The reason is that these are the issues that are most often raised by our citizens in response to notices of preparation (NOPs) of EIRs and in comments on Draft EIRs. CEQA requires that lead agencies in the environmental review process address issues raised during the NOP process in EIRs, and respond to all written comments received on Draft EIRs. Therefore, the issues of concern to our citizens are those that receive the most discussion. This is not to say that water supply is ignored. Potential impacts in this area are analyzed and discussed, and mitigation measures (such as water conservation) are often imposed. If there are no public comments on this impact area, the analysis and mitigations are considered adequate. Perhaps water supply will become a greater concern in the future, in which case Newport Beach will expand our discussion of this issue in development project reviews. Until that occurs, it would not be appropriate or responsible for the City to suggest that significant environmental impacts would occur when information from reliable sources (i.e., water agencies) shows no evidence of such impacts. Finding F.2(a): Orange County's citizens and interest groups do not appear to grasp the seriousness of the water supply situation or the complexity and urgency of the solutions. Disagree partially. The Newport Beach City Council has no information on which to comment or base a more detailed response. It would be presumptuous to comment on what our citizens and interest groups "grasp." Water consumption has reduced over the past year within the City of Newport Beach, providing evidence that citizens have taken notice of the water supply situation. The City used nearly one thousand acre feet less water in fiscal year 08 -09 than the previous year. Finding F.2(b): Several recent, substantial water supply awareness efforts are underway (e.g., the O.C. Water Summit) that show promise but appear targeted to audiences that are already well informed. Agree. Large regional efforts such as the O.C. Water Summit do target audiences that work in the industry; however, these efforts seem to focus on keeping officials up to date and retaining a consistent message. The City utilizes various means of keeping Newport Beach customers informed about the state of water supply in the City, such as website, bill stuffers, local and regional classes related to conservation issues such as the children's education festival and public and committee forums to discuss the proposed water conservation ordinance. All of the local efforts show promise as well, and are targeting audiences that are not informed. Finding F.3: LAFCO is the agency charged with facilitating constructive changes in governmental structure to promote efficient delivery of services. To this end, LAFCO is conducting a governance study of MWDOC which is the designated representative for nearly all of the Orange County retail water agencies, acting on their behalf with their surface water supplier Metropolitan. Agree. The City agrees that LAFCO is the appropriate agency to conduct the study. Finding F.3(a): There are a number of points of governance disagreement between MWDOC and several of its member agencies. This is creating an impediment to the on- going effectiveness of these agencies in critical areas of Orange County's water supply management. Agree. The City agrees that this issue needs to be resolved expediently. Finding F.3(b): The current disagreement is a distraction from the greater good of the agencies working toward Orange County's water future. Agree. The City agrees that this issue needs to be resolved expediently Finding F.3(c): The stakeholders in LAFCO's study failed to meet their March 11, 2009 deadline for LAFCO's public hearing on this matter. Continued delays are unacceptable. Agree. Finding FA: Orange County is uniquely fortunate to have a vast, high - quality, well - managed groundwater basin serving its north geographical area. However, in its south reaches, it has an equally large, high - growth area with virtually no available groundwater resources. Agree. The City recognizes that we are fortunate to have access to the groundwater basin and the south areas have virtually no ground water source. Finding FA(a): The difference in groundwater availability creates a "haves versus have - nots" situation that is conducive to inherent conflicts. Agree. Finding FA(b): The difference in groundwater availability provides opportunities for responsible participants to develop and construct long -term solutions which will benefit the entire County. Disagree partially The finding is not clearly stated, but appears to include two implications that Newport Beach believes require expanded information. The first implication is that local resources are not being fully developed in south Orange County. This is not correct. Critical groundwater, recycled water and ocean water supplies are all being developed in south Orange County. The second implication is that there is sufficient water supply in the OCWD Groundwater Basin to supply south as well as north Orange County. The groundwater basin is managed to provide water supplies to its overlying landowners. The OCWD Act that formed OCWD governs how it manages the basin. Currently the basin meets 62% of each member agency's supply. The capacity of the basin was developed at a significant cost and it will never be able to supply 100% of the existing member agencies' demands. GRAND JURY RECOMMENDATIONS: Recommendation RA: Each Orange County municipal planning agency, in cooperation with its respective water supply agency, should prepare for adoption by its city council, a dedicated Water Element to its General Plan in conjunction with a future update, not to exceed June 30, 2010. This document should include detailed implementation measures based on objective -based policies that match realistic projections of the County's future water supplies. These objectives, policies and implementation measures should address imported supply constraints, including catastrophic outages and incorporate the realistic availability and timing of "new" water sources such as desalination, contaminated groundwater reclamation and surface water recycling. (Findings F.1(a) & (b), and F.2(a) and (b)) This recommendation will not be implemented. Implementing this recommendation would create a redundant, and possibly conflicting, planning process to the existing Urban Water Management Plan (UWMP) requirement of the State Water Code. UWMPs already serve a long -range planning function for water supply issues. They are required to include the very topics listed in this recommendation, and are required be updated more frequently (5 years) than General Plans are suggested to be updated (10 years). Water planning is more appropriately and effectively done by water agencies than by municipal government. If cities were to prepare Water Elements, they would have to rely on the same projections of water supply as the water agencies do, and it is unclear what additional benefit would be gained from Water Elements. The preparation of Water Elements would be complicated, confusing and problematic. Newport Beach is served by three water agencies: the City, Mesa Consolidated Water District and Irvine Ranch Water District, and we would have to work with all three of these water agencies in preparing a Water Element. If policies are not consistent among the three water agencies, Newport Beach could be faced with writing a Water Element with conflicting policies, while State law requires that General Plans be internally consistent. Likewise, Mesa Consolidated Water District and Irvine Ranch Water District would have to work with multiple cities as they prepare their own Water Elements. The water agencies, too, might be faced with trying to implement policies that vary from city to city — assuming that cities' Water Elements would even have any mandatory impact on water agencies. Water agencies are special districts under State law, and cities do not have jurisdiction to set policy for them. Only the State Legislature has the authority to establish General Plan requirements for cities and counties. The Government Code establishes the seven mandatory elements of General Plans: land use, circulation, housing, conservation, open space, noise, and safety. The conservation element is required to address the conservation, development and utilization of natural resources including water, and the portion of the element dealing with water must be developed in coordination with all agencies that have developed, served, controlled or conserved water for the city. Newport Beach has satisfied this requirement with the Natural Resources Element of our General Plan, which includes discussion of both water supply and water quality. The City Council has adopted two goals with respect to water supply, each with a set of policies and implementation measures. The goals are as follows: NR 1 Minimized water consumption through conservation methods and other techniques. NR 2 Expanded use of alternative water sources to provide adequate water supplies for present uses and future growth. Requiring another General Plan element would constitute an unfunded government mandate, at a time when cities and counties are struggling to meet other State requirements while the State depletes city and county resources. Recommendation R.2: Each Orange County retail and wholesale water agency should affirm its responsibility to develop new, additional, innovative public outreach programs, beyond water conservation and rationing programs, to expose the larger issues surrounding water supply constraints facing Orange County. The objective should be to connect the public with the problem. The outreach effort should entail a water emergency exercise that simulates a complete, sudden break in imported water deliveries. The exercise should be aimed directly at the public and enlist wide - spread public participation on a recurring basis beginning by June 30, 2010. This recommendation may be satisfied by a multi- agency exercise but the inability to coordinate such an event should not preclude the individual agency's responsibility. (Findings F.2(a) and (b)) This recommendation will not be implemented. Current efforts are underway locally and working with MWDOC to educate the public about water supply issues not confined to just import supplies. The City of Newport Beach receives its water supply from both import and local groundwater supplies. The proposed water conservation and supply level regulation ordinance addresses water supply shortages from a multitude of circumstances that could reduce water supply. Supply shortage levels are built into the ordinance to address all supply issues not just import supplies. The City participates in emergency planning and exercises with WEROC, as well as emergency drills organized by the City and other government agencies that prepare us for a variety of possible emergencies. These drills require a significant amount of staff time and inter - agency organization, and it would not be practical to conduct County wide exercise on water emergencies involving 80 -100 thousand residents. Recommendation R.3: Each MWDOC member agency should reaffirm to LAFCO that it will assign the resources necessary to expediently resolve regional governance issues. While the subject study is being facilitated by LAFCO, the options are with the agencies to decide what is best for all. Once conclusions are reached, the parties need to agree quickly and, hopefully, unanimously to adopt a course of action. (Findings F.3(a), (b) and (c)) This recommendation will be implemented. The City agrees that this issue needs to be resolved expediently. The City of Newport Beach will assign the resources necessary. Upon completion of the study by LAFCO, where conclusions are reached, the City will respond in the required time frame set by LAFCO or agreed timeframe by member agencies. Recommendation R.4: Each Orange County retail and wholesale water agency should affirm its commitment to a fair -share financial responsibility in completing the emergency water supply network for the entire County. The entire County should be prepared together for any conditions of drought, natural or human - caused disaster, or any other catastrophic disruption. WEROC should commence meetings of all parties, to facilitate consensus on an equitable funding/financing agreement. (Findings FA(a) and (b)) This recommendation is being implemented. The City already participates with WEROC to annually plan and run emergency scenarios to better prepare staff for emergency response on all levels. We have already spent our fair share and we will continue to do so as appropriate for the activities and events and how they relate to the City's functions and operations The City is currently working with local agencies to study the emergency intertie water connections and ability to assist each other in an emergency. The study will address hydrology, water quality issues, and resources needed. If you have any questions regarding this response please contact George Murdoch, Utilities Director, at (949) 644 -3011 or gmurdoch(a)newoortbeachca.gov, or Sharon Wood, Assistant City Manager at (949) 644 -3222 or swoodCa newoortbeachca.gov. Sincerely, Edward Selich, Mayor cc: Orange County Grand Jury