SR-10-28-2014-8CCity Council Meeting: October 28, 2014
_1 o
To: Mayor and City Council
From: Martin Pastucha, Director of Public Works
Subject: Sustainable Water Master Plan Status Update, Presentation of Rate
Analyses, and Discussion of Proposed Rate Options
Recommended Action
Staff recommends that the City Council:
1. Review and comment on the proposed rates studies and recommendation.
2. Direct staff to proceed with rate structure Option 3 which provides full funding for
proposed capital and conservation programs in support of the Sustainable Water
Master Plan.
3. Direct staff to outreach to the community and proceed with steps necessary for
rate consideration and adoption.
4. Adopt the Sustainable Water Master Plan pursuant to the categorical exemption
at CEQA Guideline sections 15307 and 15308.
Executive Summary
This report presents an update on the City's effort to achieve water self- sufficiency
through the Sustainable Water Master Plan (SWMP), recent drought response
measures, and the findings and analyses of recently conducted financial and rate
studies prepared for the Water and Wastewater funds. The report addresses current
water and wastewater rates and describes factors which lead to near -term revenue
shortfalls in the water fund, and presents five -year rate adjustment options that will
generate sufficient revenues to pay for projected operating and capital costs. The
options presented include consideration of the impacts for Stage 2 water restrictions
recently approved by Council. The cost impacts of the proposed rate adjustments and
rate restructuring on various types of customers within each customer group are
presented, as is a comparison of the proposed Santa Monica rates with various other
comparison cities in the region. Staff recommends rate structure Option 3 which
represents an increase in the unit price of water of 9% in year 1 and 13% in years 2
through 5. This increase would be applied at completion of successful rate approval
process estimated to be in January 2015.
Background
In a study session at the March 8, 2011 Council meeting, staff presented the concepts
and principles involved in achieving the goal of water self- sufficiency by the year
2020. Following the study session, staff embarked on the development of a Sustainable
Water Master Plan (SWMP) in order to achieve this goal. In support of this effort at its
March 2 22012 meeting, Council authorized Kennedy /Jenks Consultants (KJC) to
prepare the Sustainable Water Master Plan. In an information item to Council dated
November 5, 2012, staff presented an update on the status of the development of a
Sustainable Water Master Plan (SWMP).
At the May 1 22013 Council meeting, staff presented Council with options for
proceeding with the SWMP as indicated in Figure 1 below.
Figure 1
Potential Portfolios for Meeting the City's Sustainability Goals
(6,500 AF)
Proposed Regional Recycled
OAF 1,280 AF 1,440 AF System($22,000 /AF)
160 A
111111 F Policy Considerations,
F �����j', -; 270AF Enhanced Regulations
1,440 AF 80AF
essesc
160 AF
80 AF
Existing and Proposed Conservation
Programs
Rain harvesting and City -wide
Stormwater capture
AF 3,540 AF = 4,550 AF SMURRF Recycled water
Option 1: Proposed
Conservation
Programs
Option 2 Option 3
Long Range Regional Recycled
Water System
K
ffmwm Groundwater, Average Annual
Council directed staff to proceed with Option1, which would yield 1440 acre feet through
conservation programs as indicated in Table 1 below.
Also at the May 14, 2013 meeting Council directed staff to proceed with the water and
wastewater rate study. The current water and wastewater rates, which are based on
commodity -only rate structures (so named to indicate the absence of a fixed service
charge component), were adopted by Council on May 13, 2008. The commodity -only
rate structures were approved by Council to promote water efficiency and conservation.
On the demand management side of achieving self- sufficiency, the Council- approved
water conservation programs as identified in Table 1 below are proceeding. As
indicated in Table 1, the enhancement of existing water conservation programs and the
development and implementation of new programs will save 1,443 acre feet of water
per year as part of the Sustainable Water Master Plan (SWMP) in order to achieve
water self- sufficiency.
3
Table 1
Sample Water Conservation Program for the City of Santa Monica -April 2, 2013
Residental HE Clothes Washer Rebate
Single Family
880
30
$24,100
$216,600
Residential HET Rebate
Single Family
3568
77
$14,400
$129,700
Residential WBIC Rebate
Single Family
1920
79
$29,300
$263,800
City's Cash (or Grass Rebate Program
Single Family
1,100,000 square feet
51
$209,900
$1,889,100
City's Drip Irrigation Rebate program.
Single Family
1,100,000 square feet
24
$139,900
$1,259,400
City's HE Nozzle Rebate Program
Single Family
550,000 square feet
7
$52,500
$472,300
Water Smart Software- 5% Reduction in Water Use(NEVY)
Single Family
3,040 customers
8
$26,600
$239,300
08 gpf Toilets (Direct Installation) (NF W)
Multi Finally
5,496
73.
$174,800
$1,573,300
Residential HE Clothes Washer Rebate
Multi Family
544
19
$91800
$88,600
Residential HET Rebate
Multi Family
4,000
13
$16,200
$145,400
Laminar Flow Reslrictors for 51. John's Medical Center(td6W)
Commercial
664
6
$1,500
$13,600
Commercial Dry Vacuum Pump Rebate
Commercial
40
3
$1,400
$12,600
Commercial Conneclionless Food Steamer Rebate
Commercial
2
1
$100
$500
Commercial Zero Water Urinal Rebate
Commercial
4
0.1
$25
$200
Commercial Ultra-Low Volume Urinal Rebate
Commercial
544
8
$3,500
$31,100
Commercial Conductivity Controller Rebate
Commercial
2
4
$0
$0
Commercial HET Rebate
Commercial
200
5
$2,500
$22,900
CHI Cooling Tower Treatment - Zero Blowdown fNE: W)
Commercial
2
1
$200
$1,400
Coln - Operated laundry Machine Retrofit (NEW)
Commercial
45
360
$3,500
$31,800
HETs for St John's Medical Center (NEW)
Commercial
10
0.1
$100
$1,100
0.125 gpf Urinals for St. Johns Medical Center (NEW)
Commercial
7
0.1
$40
$400
15 Spur Faucet Aerators for St. John's Medical Center (NEW)
Commercial
158
0.3
$800
$6,900
SMMUSD Audits &Retrof its - Assumes 5% Reduction in Total
Institutional
Maintained through
5
$94,400
$849,400
H2O Use (NFVJI
ono.
HE: High Efficiency; HET: High Efficiency Toilet; WBIC: Weather Based Irrigation Controller
On January 17, 2014 California Governor Jerry Brown proclaimed a Drought State of
Emergency, finding under the provisions of section 8558(b) of the California
Government Code that conditions of extreme peril to the safety of persons and property
exist in California due to water shortage and drought conditions. Among other
stipulations in the Governor's proclamation, all citizens of California were asked to
achieve a 20 percent reduction in water consumption. In an information item to Council
dated January 29, 2014, staff presented an update to the Water Shortage Advisory in
effect since 2009, as well as enhanced conservation efforts aimed at achieving the
Governor's call for a 20 percent reduction in water use.
On July 15, 2014, the State Water Resources Control Board (SWRCB) adopted an
Emergency Regulation for Statewide Urban Water Conservation which requires urban
6!
retail water agencies, like Santa Monica, to implement all requirements and actions of
their water shortage contingency plans that impose mandatory outdoor irrigation
restrictions. On August 12 2014, Council adopted a resolution declaring a Stage 2
Water Supply Shortage requiring mandatory water conservation to achieve a 20%
reduction in water use compared to 2013.
This staff report presents water and wastewater rate studies in support of achieving the
objectives of the SWMP, and updated information about the status of the Sustainable
Water Master Plan and recent drought response activities.
Pursuant to the City's Water Shortage Response Plan Stage 2 adopted by Council in
August 2014, single - family, multi - family, and non - residential water customers will be
given a water allowance, also called a water budget, for each billing cycle. Customers
that exceed their allowance will be subject to surcharges for each hundred cubic feet of
excess water used in a billing period. This sends a strong message to conserve water.
Because of the recent adoption of the 20% reduction, staff has estimated a cost of
$862,000 in the first year and $592,000 in the second year for implementation and
management of drought response efforts. Variances and relief from compliance from
water allowances may be granted under certain conditions. Detailed implementation
plans for the Stage 2 response of mandatory 20% conservation measures and
associated costs will be presented to Council on October 28, 2014.
Discussion
The City provides water service to three customer types: single - family, multi - family and
non - residential. The current water rate structure was adopted in July 2008 to provide
equity between customer types and among customers within a class. The rate structure
adopted in 2008 eliminated the bi- monthly fixed service charge so that the water bill
became entirely based on actual water usage, thereby improving the water conservation
incentive at all levels. For residential customers, the previously existing three tier
structure was replaced with a four tier structure. For non - residential customers, a
5
uniform commodity rate was established, applicable to nearly all water use. A second
tier for non - residential customers applied at the high end of consumption, in order to
provide a strong disincentive for excessive water use. In 1999, a resolution to annually
increase rates by the actual Consumer Price Index (CPI) increase was adopted and has
been implemented with each annual budget.
A water rate study was initiated for the city by Kennedy Jenks Consultants as part of its
contract with the City to prepare the SWMP. The objectives of the analysis include
development of a strategy for meeting the utility's financial obligations for the five year
planning period (FY 2014 -15 through FY 2019 -20) and to assess changes to the rate
structure in keeping with the city's self- sufficiency goals to encourage water
conservation and sustainability.
Water Rate Analysis
The analysis indicates that the cost to operate the system, replace and upgrade existing
facilities, and fund the SWMP conservation and supply augmentation programs will
exceed current and projected revenues. Infrastructure rehabilitation, replacement, and
upgrade requirements are necessary to maintain an aging water distribution system
wherein certain parts are approaching 100 years in age. Ongoing funding of water main
replacements at the level necessary to ensure reliability and long term performance are
essential to system sustainability. In addition, demands placed on the Water Fund by the
need to fund capital programs to accomplish the City's water self - sufficiency goals, and the
reduction in water sales that reduces annual revenues are major components driving the
need for a rate adjustment.
Capital projects located in the Olympic sub - basin, including the proposed Olympic basin
treatment facility and any new wells proposed in the Olympic sub - basin, would be funded
from the Gillette/ Boeing Settlement agreements and are therefore not included in the
funding requirements to be supported by water rate revenue.
C
Prior to implementation of the Stage 2 water restrictions, 9% annual rate increases over
a five year planning period were envisioned as necessary to meet the goal of
maintaining financial reserves at minimally acceptable levels throughout the planning
period, meeting the capital and operational needs as required to meet the City's self -
sufficiency goals, and funding the appropriate level of infrastructure replacement and
rehabilitation. This included new debt issuance (bonding) in FY 2018 -19 in the financial
plan to maintain water fund solvency throughout the planning period. These initial
revenue projections assumed a 10% reduction in water sales at that time.
With the implementation of the Stage 2 water restrictions and the projects required to
implement the SWMP, however, a 20% reduction in water use is expected to occur,
requiring a rate increase to cover the fixed and increased costs of producing,
distributing, and conserving this reduced volume of water. The decrease in water use
translates to an increase in the recommended rate increase to 13 %. The financial
forecast over the five year planning period includes a cash infusion in FY 2018 -19.
Financial Strategy Options
As an enterprise fund, the City's water utility is expected to be financially self- sufficient;
revenues must match annual expenditures. Three options are presented in Table 1 and
further discussed below in consideration of addressing alternate rate scenarios.
Table 1 — Rate Adjustment Options
i�um. riupwcu auiusunenis appoea in January or eacn year
The Fund Balance trends corresponding to the three options are presented in Figure 2
below.
7
2015
2016
2017
2018
2019
Option 1
2.5%
2.5%
2.5%
2 .5%
2.5%
Option 2
9%
9%
9%
9%
9%
Option 3
9%
13%
13%
13%
13%
i�um. riupwcu auiusunenis appoea in January or eacn year
The Fund Balance trends corresponding to the three options are presented in Figure 2
below.
7
Figure 2 —Water Fund Revenue Requirements, Fund balance trends
$50M
MM
— Cisllncease
No Change to Capital & No Cash Infusion
—IM Incnne
$30M
......
No Change to Capital &$1M Cash Infusion
•,...
- - - - - -9 %Incase
Decrease In Capital & $IOM Cash Infusion
Item........
$IOM
T
FY202.14
FY 201415 FY2015-26 FY2016. FY201748
�e
M018.19 FY 201920
410M
--
420M
.$30M
-$"M
Option 1 — Status Quo
Without an adjustment in the current rates, applying an inflation -only (Consumer Price
Index, CPI) rate increase annually over the next five years would result in a negative
cash balance (fund balance) in FY 2016 -17. Even complete elimination of capital
expenditure programs would not prevent the negative fund balance from occurring in a
few years. This trend is displayed graphically in Figure 2.
Option 2, 9% annual increases years 1 -5 modified capital program
In Option 2, 9% increases are applied to the unit prices in the present tiers of the pricing
structure. These increases would occur in January in each year of the five year planning
period (2015 — 2019). As this does not represent the full cost recovery for the reduced
projected revenue generated as a result of the Stage 2 Water Shortage Response Plan,
some reduction in expenditures from capital improvements and conservation programs
will be necessary. Applying a reduction of approximately $1 million per year in
expenditures, the Water Fund cash balance trend is included in Figure 2. Among the
reductions included in the expenditure reductions would be a reduced main replacement
0
program and cutbacks in the ability to fund certain conservation programs. It is also
possible that some capital projects envisioned to support the 2020 self - sufficiency goal
may be reduced or delayed, resulting in a delay in reaching the self- sufficiency goal by
2020.
Option 3 — 9% year 1, 13% rate increases annually years 2 -5;
Option 3 comprises a 9% increase in January 2015 and 13% increases each January
thereafter through 2019. These percentage increases are applied to the unit prices in
the present tiers of the pricing structure. A 13% increase represents the full recovery of
the revenue decreases projected to result from the decreased water sales inherent in the
mandatory conservation plan. Current capital and conservation programs remain intact.
The 2020 self- sufficiency goal remains on target, and infrastructure investment
continues in a manner which supports the continued reliability of the water system.
Rate Comparison
It is worth noting that Santa Monica has experienced the same pressure for increased
water efficiency and conservation over recent years due to drought and climate effects as
other regional water agencies. Nevertheless, Santa Monica single family residential rates
remain in the lower third of neighboring comparison agencies. Figure 3 provides a
comparison of proposed Santa Monica Single family Residential (SFR) water rates,
including a 13% increase over current rates, with neighboring agency SFR water rates.
This 13% increase represents the proposed year 2 increase, following the 9% increase in
year 1, as in option 3. The bill comparison is based on a %" water meter and 24 HCF of
bi- monthly water usage. This represents the water allowance in the Stage 2 Water
shortage plan for single family residences. The proposed bi- monthly average charge of
$89.30 for Option 3 (13% increase) in year 2 reflects a monetary increase of $16.80 (bi-
monthly) over the existing charge of $72.50. Even with the proposed 13% increase,
residential water bills in Santa Monica will compare favorably with the current average
rate of the other communities surveyed. Table 3 provides a summary of average water
bills under the presented options for average water use.
7
Figure 3 — Proposed Water Rate Comparison with Neighboring Agencies
$200
$180
LL $160
U
I
C) $140
$120
v
M
ro
3 $100
r
M
C $80
E
M
$60
u
.Q
H $40
$20
$0
Pasadena Santa Monica Long Beach Burbank Glendale (1) Los Angeles Beverly Hills Culver City (2)
(1)
2013 -14 `;;2014 -15
(1.) Increases proposed for FY 2014 -15
(2.) Culver City serviced by Golden State Water Company, a CPUC regulated utility
A summary of potential bi- monthly water bill impacts for select customer classes at
average consumption rates is presented in Tables 3, 4, and 5.
10
Table 3
Example of Proposed Bi- Monthly Bill - No Surcharge Included
Single Family Residential, % -inch meter, 30 HCF current average use
(1.) CPI Increase only in all years, effective January 1
(2.) 9% increase effective January 1 each year
(3.) 13% increase effective years 2 through 5, 9% increase year 1
Table 4
Example of Proposed Bi- Monthly Bill - No Surcharge Included
Multi - Family Residential, 1 '/2 - inch meter, 77 HCF current average use
Year 1
Year 2
Year 3
Year 4
Year 5
Current Bill,
$90.63
without conservation
Option 1
Current Rates, with 20% conservation 24HCF
$72.50
$74.31
$76.17
$78.07
$80.03
Option 2
$79,03
$86.14
$93.90
$102.35
$111.56
o o
9 /o increase in unit prices, with 20 % conservation
$298.49
$325.35
$354.64
$386.55
$421.34
Option 3
o a
13/o increase in unit prices, with 20 % conservation
$79,03
$89.30
$100.91
$114.03
$128.86
(1.) CPI Increase only in all years, effective January 1
(2.) 9% increase effective January 1 each year
(3.) 13% increase effective years 2 through 5, 9% increase year 1
Table 4
Example of Proposed Bi- Monthly Bill - No Surcharge Included
Multi - Family Residential, 1 '/2 - inch meter, 77 HCF current average use
(1.) CPI Increase only in all years, effective January 1
(2.) 9% increase effective January 1 each year
(3.) 13% increase effective years 2 through 5, 9% increase year 1
Table 5
Example of Proposed Bi- Monthly Bill - No Surcharge Included
Non- Residential, 2- inch meter, 192 HCF current average use
Year 1
Year 2
Year 3
Year 4
Year 5
Current Bill,
$342.30
without conservation
Option 1
$273.84
$280.69
$287.70
$294.90
$302.27
Current Rates, with 20% conservation 62HCF
Option 2 ,
$298.49
$325.35
$354.64
$386.55
$421.34
9% increase in unit prices, with 20%
conservation
option 313),
$298.49
$337.29
$381.14
$430.69
$486.68
13% increase in unit prices, with 20%
conservation
(1.) CPI Increase only in all years, effective January 1
(2.) 9% increase effective January 1 each year
(3.) 13% increase effective years 2 through 5, 9% increase year 1
Table 5
Example of Proposed Bi- Monthly Bill - No Surcharge Included
Non- Residential, 2- inch meter, 192 HCF current average use
(1.) CPI Increase only in all years, effective January 1
(2.) 9% increase effective January 1 each year
(3.) 13% increase effective years 2 through 5, 9% increase year 1
11
Year 1
Year 2
Year 3
Year 4
Year 5
Current Bill,
$687.23
without conservation
Option 1
$549.78
$563.52
$577.61
$592.05
$606.85
Current Rates, with 20% conservation 154 HCF
Option 2 ,
$599.26
$653.19
$711.98
$776.07
$845.90
9% increase in unit prices, with 20%
conservation
Option V),
$599.26
$677.16
$765.20
$864.67
$977.08
13% increase in unit prices, with 20%
conservation
(1.) CPI Increase only in all years, effective January 1
(2.) 9% increase effective January 1 each year
(3.) 13% increase effective years 2 through 5, 9% increase year 1
11
Summary and Recommended Option
Prior to the mandatory water reductions in the Stage 2 water restrictions, the rate analyses
initially suggested a water rate increase of approximately 9% per year for each year of the
five year planning period based on projected water sales reflective of the water self -
sufficiency and Urban Water Management Plan targets. This 9% increase includes the
annual CPI adjustment. When taking into account the added water conservation resulting
from the Stage 2 restrictions and the SWMP, and the added loss of revenue, a revenue
increase of 13% would be required in order to keep the Water Fund balance positive
throughout the five year planning period and fund necessary capital improvements and
conservation programs. Rate increases are driven equally by the need to fund capital
programs to accomplish the City's water self- sufficiency goals, the need to invest in
infrastructure rehabilitation and replacement, and the reduction in water sales that reduces
annual revenues.
Option 1 is presented as an indication of the status quo, or the result of non - action relative
to rates, other than an annual CPI increase. This option is unsustainable, as continuing on
this course would result in a negative fund balance by FY 2016 -17
Option 2 includes an across - the -board 9% increase on all tiers of the existing unit prices.
This option is included to indicate the effect of utilizing a single digit rate increase. As
might be expected, a lower percentage rate increase results in lower revenue generation.
Accordingly, expenditure reductions are required to accommodate the lower rate increase.
This may be achieved through modifications in capital programs such as main
replacements, valve rehabilitation, automatic meter infrastructure development, or some
conservation programs. The consequence of cuts to these programs may result in a
delay in reaching the self- sufficiency goal by 2020.
Staff recommends Option 3, which fully funds the projected capital programs,
infrastructure investments, and conservation programs over the five year planning period.
Because the first rate increase in the five year planning period is proposed to take effect in
12
January 2015 only a 9% increase is required for the first year (i.e., half of FY 2014/2015
would be subject to the rate increase). In subsequent fiscal years, a 13% increase would
take effect July 1. This approach keeps progress on track toward achieving the City's
2020 self - sufficiency goal. Due to the conservation effect of the water budget rate
structure inherent in the Stage 2 water shortage plan, water bill increases are somewhat
offset by the reduction in water use which is anticipated from each customer. As indicated
in Figure 3, residential water bills remain competitive with comparison cities after a 13%
rate increase.
Proposition 218 Compliance
Proposition 218 requires a public notice of proposed changes to rates be made to all
property owners in the affected area. A 45 day notice/ response period will be in effect
from the date of approval of new rates (with a few days allowance for mailing). The
notices to be mailed to all property owners will include a description of the need for a
rate adjustment, and explain the protest process for the public to follow if they wish to
oppose the proposed rates. Absent a majority protest, City Council may then approve
the final adoption of the rates at a public hearing.
As indicated in Council staff report item 8B on the October 28, 2014 Council agenda, a
drought surcharge is proposed for customers that exceed their bi- monthly Water Use
Allowance. The proposed drought surcharge is intended to recover the cost of service
associated with the implementation of measures to address the Stage 2 Water Supply
Shortage, including but not limited to costs of water conservation rebates, enforcement
of water conservation ordinances, and outreach. These proposed measures are not
recovered through the City's existing and proposed water rate structure. These drought
surcharges are subject to Prop 218 requirements and would be noticed in conjunction
with the appropriate notice given for the rate adjustments.
Community Outreach
Pending the direction provided by Council regarding the information provided in this
report, outreach efforts will commence to engage the community in discussions relative
13
to proposed rate adjustments, the Sustainable Water Master Plan (SWMP), and the
Water Shortage Response Plan (item 8B on this agenda). Staff from Public Works and
the Office of Sustainability and the Environment (OSE) will schedule and at least 2
community forums, in addition to meetings with the Chamber of Commerce, apartment
owners, hotel management staff, and school district and SMC staff. This would
commence in November following the direction provided by Council relative to this
report and continue through formal adoption of rates in January. Staff will provide at that
time a summary of comments received during these sessions as well as a summary of
correspondence received from the Proposition 218 notices.
Wastewater Rate Analysis
Present day wastewater rates were established in 2008, concurrent with the last water
rate adjustments. Consistent with the adopted water rates at the time, wastewater rates
were also established as a commodity -only rate structure, based upon estimated
wastewater flows during the bi- monthly billing period. A discharge factor is applied to
the metered water consumption to represent the portion of water usage returned to the
wastewater system. The discharge factors range from 51 % for single family residential
accounts, to 95% for multi - family residential accounts with more than 4 units. All non-
residential customers are assigned a discharge factor of 89 %. Commodity charges for
non - residential customers vary depending on sewage strength (as represented by
biochemical oxygen demand and suspended solids) for each class.
On May 13 2014, Council approved redemption of all outstanding Wastewater
Enterprise Revenue Bonds. This action will save the Wastewater Fund approximately
$600,000 over the next four years (bond maturity was January 1, 2018). Coupled with a
remaining healthy fund balance, an increase in wastewater rates, other than an annual
CPI adjustment, will not be required over the five year planning period considered in this
analysis.
14
Reserve Fund Levels
A review of the reserve fund policies for both water and wastewater, adopted in 2008,
conducted in conjunction with the Finance Department indicates an adjustment is
appropriate to reflect more modest funding of these reserves and reduce pressure on
rates. Council approved the revised reserve levels as part of the FY 2014 -15 operating
budget.
Water Fund (Fund 25)
The revised reserve levels include the following:
• An Operating reserve equivalent to 50% of the MWD purchases (3 year running
average) budget, with a minimum level of $3 million.
• A Capital reserve of 50% of annual capital program expenditure, with a minimum
level of $3 million.
• A Rate Stabilization reserve of $1 million (unchanged).
Wastewater Fund (Fund 31)
As with the Water Fund, a change in the Wastewater Fund reserve policy is
recommended as below:
• An Operating reserve equivalent to 50% of the Hyperion treatment expenses (3
year running average) budget, with a minimum level of $3 million.
• A Capital reserve of 50% of annual capital program expenditures except
Hyperion Capital Payment, with a minimum of $3 million.
• A Rate Stabilization reserve of $1 million (unchanged).
Sustainable Water Master Plan
The Sustainable Water Master Plan has been defined as to its content and objectives to
meet water self- sufficiency by the year 2020. The executive summary of the report is
attached herewith. Staff recommends Council approve the SWMP.
Based on the approach approved by Council on May 14, 2013, conservation and supply
augmentation programs are underway. Furthermore, given the drought response
required to meet the State's call for a mandatory 20% conservation level, some
15
programs described in Table 1 of this report are being accelerated in order to meet the
mandate. These include the high- efficiency toilet direct install program, Laundromat
retrofit rebate, landscape rebate, SMMUSD water audit and retrofit program, adding
funds to Metropolitan Water District's rebate program, St. John's retrofit program. On
the supply side, testing to determine the operating parameters and design criteria for
the new Olympic Basin Treatment Facility has begun, and planning for a new well in the
Olympic basin has been initiated. As a longer term approach to augmenting supplies,
staff is investigating grant funding opportunities for a potential Santa Monica Urban
Runoff Recycling Facility (SMURRF) rehabilitation /expansion for the addition of reverse
osmosis treatment capability. This would potentially allow for the treatment of other
sources of water, such as captured stormwater, and increase supply to the plant.
Staff continues to work in partnership with the SWMP Advisory Committee to further
develop and implement these programs. Communications with the committee have
occurred over the last year via group meetings, emails and conference calls. The
advisory committee comprises Mark Gold, Chair of the City's Environmental Task
Force, Associate Director UCLA Institute of the Environment and Sustainability; Andy
Lipkis, Tree People Founder and President; Conner Everts, Southern California
Watershed Alliance Executive Director; Ed Osann, Natural Resources Defense Council
Senior Policy Analyst, Water Program; Judy Abdo, Santa Monica representative on the
MWD Board of Directors, former Santa Monica Mayor and Councilmember; Caryn
Mandelbaum, Environment Now Freshwater Program Director, Staff Attorney; and
Tracy Quinn, Natural Resources Defense Council Policy Analyst, Water Program. The
committee members have provided valuable input and counsel during the course of
developing the SWMP.
CEQA Compliance
The Sustainable Water Master Plan qualifies for a categorical exemption from the
provisions of the California Environmental Quality Act pursuant to CEQA Guideline
Sections 15307 (Actions by Regulatory Agencies for Protection of Natural Resources)
and 15308 (Actions by Regulatory Agencies for Protection of the Environment). To the
16
extent specific demand management, water supply augmentation or other projects
identified in the SWMP are pursued in the future, additional CEQA review will occur in
compliance with CEQA
Next Steps
Following direction from Council regarding a preferred rate alternative, staff will continue
with community outreach to discuss drought actions and financial planning efforts. Staff
will return to Council with a recommendation of formal approval of rate adjustments in
November 2014, after which the Proposition 218 public notices will be mailed to every
property owner in the City. Following the required 45 day notice period, staff will return
to Council with a summary of community responses and a formal recommendation to
adopt new rates. Final adoption of rates can be made at a meeting in January 2015. It
should be noted that delaying action on rates beyond this time frame will result in
adverse impacts on the financial forecasts and rates.
Financial Impacts & Budget Actions
Future budget and financial impact will be contingent upon Council direction. Impacts
will be reflected in a future rates adoption staff report.
Prepared by: Gil Borboa, P.E., Water Resources Manager
Approved: Forwarded to Council:
Martin Pastucha Rod Gould
Director of Public Works City Manager
Attachment:
A — Sustainable Water Master Plan Executive Summary
17
ATTACHMENT A
Sustainable Water Master Plan Executive Summary
Executive Summary
The City of Santa Monica (City) supplies imported and local water to approximately
91,000 residents covering an area of approximately 8 square miles. Looking to its
future, the City hopes to eliminate its reliability on imported water by addressing the
challenge of existing groundwater quality, identifying new sources of local water supply,
and more effectively reduce and manage its water demands.
With an adopted goal of water self- sufficiency achieved by eliminating reliance on MWD
supply by 2020, the City of Santa Monica retained Kennedy /Jenks Consultants to
develop an integrated Sustainable Water Master Plan. This Master Plan combines
relevant components of existing plans with an evaluation of a broad range of water
supply and demand management options to assist the City in meeting its goals. This
plan has been prepared with the objective of developing a comprehensive document to
define supply and demand management options to cost effectively reduce future water
demands and enhance local water supply production capabilities.
Goals and Purpose
The purpose of this planning effort is to provide an up -to -date, comprehensive look at
the City's water system using recent planning information and the newly - developed
distribution system hydraulic model to assess the City's water system infrastructure
needs. In a March 2011 study session with the City Council, staff presented concepts
and principles that would be involved in achieving water self- sufficiency goal by the year
2020. Since that time, the City has embarked on the development of a sustainable and
proactive plan to accomplish this goal.
This Sustainable Water Master Plan (SWMP) includes an evaluation of expanded
demand management measures and a variety of water supply alternatives including
recycled water, storm water collection and treatment, rainwater harvesting, gray -water
applications, and other water rights, supply and exchange opportunities to align with the
above goal. A decision modeling approach was used to package these programs and
projects into Supply- Demand Portfolios, where criteria were developed to provide
portfolio ranking, economic analysis and ultimately, strategic direction. This plan
illustrates projected water supply and demand scenarios, and characterizes the
approximate magnitude of supply deficits or unpredictability that needs to be addressed
to meet the City's self- sufficiency objectives by 2020. The recommendations resulting
from this SWMP are designed to provide a roadmap of phased projects and programs
to guide the City's water utility towards self- sufficiency.
Implementation of the SWMP is further supported through the conduct of financial
planning services. These services, prepared and documented under a separate cover,
included an evaluation of water and wastewater rates, rate structures for conservation
support and financial stability, and an update to the City's water and wastewater facility
capacity charges.
Santa Monica — Draft Sustainable Water Master Plan Page ES -1
As discussed above, the development of a Sustainable Water Master Plan (SWMP)
entails a multi- faceted approach to address the City's goal of achieving water self -
sufficiency by the year 2020. With the City's current capability to meet approximately
70% of its water demand from local groundwater sources, the objective is to develop
strategies to close the "gap" represented by the current purchase of imported
water. Through a combination of demand management approaches and water supply
augmentation tactics, various portfolios were developed to represent permutations and
combinations of options that best meet the program objectives and continue to support
the City's Sustainability Plan. The SWMP documents the mix of strategies that could be
undertaken to achieve water self- sufficiency by 2020, and recommends a portfolio of
conservation /supply programs and capital projects to meet these self- sufficiency goals.
A summary of the primary goals of this project include:
Perform a water demand analysis and generate water demand projections, which
incorporate the most current information regarding population, land use and
LUCE information for the City's service area projected to the year 2035. The
water demand projections consider the effects of weather and economic
conditions on future water demand in order to increase defensibility in a time of
increased pressure to reduce potable water demands in response to State
legislation,
Conduct a rigorous evaluation of the City's current and future Supply Alternatives
and Demand Management Options to be able to build strategic Portfolios of for
future,
® Develop a comprehensive potable water system hydraulic model development,
including calibration, and perform a hydraulic analysis under various system
conditions,
Perform an evaluation of infrastructure improvements to accommodate existing
requirements and meet future needs, including an evaluation of system
infrastructure fire flow (FF) requirements, and an updated capital improvement
program to support the City's short and long -range capital improvement
requirements,
® Perform a comprehensive financial evaluation of the City's water and wastewater
utilities and associated rates and rate structures, and
Prepare and submit two separate reports documenting the findings and
recommendations of the Sustainable Water Master Plan and the Water and
Wastewater Rate and Revenue Study.
Santa Monica is a beachfront city in western Los Angeles County. It is situated on the
Santa Monica Bay, and is surrounded by the city of Los Angeles on the Northeast, the
Pacific Ocean on the west, Mar Vista on the east and Venice on the southeast. The
Santa Monica — Draft Sustainable Water Master Plan Page ES -2
City's service area consists entirely of the City of Santa Monica with limited service in
the City of Los Angeles. The City occupies 8.3 square miles (5,312 acres) of land.
Figure ES -1 shows the Santa Monica City boundary and the vicinity areas.
Figure ES -1 Santa Monica Boundary and Vicinity Map
Santa Monica — Draft Sustainable Water Master Plan Page ES -3
W EST I,QS
aiGELES (SAM'TELLE VA)
LOSAAGELES
i
f
1 itk
i
t
It
i
•t.. V'
V
Yak
flap
rs{
\
o
,\
i
�VAI � Ilv°
N
41 1.
s
wts it,lo[Lt�wdn
S
^ Je
w
x�\ V xLY III,-
�
wsmeym�
u �(x lw oof-
`o
� rpus N s
yi
flit �t
Y
u
m
Santa Monica
--
d
�
�� Uft fl¢Y t A If{
I LAN
�I CL 9[O
1
5
a
fIA 1
PLAPA VIRT.
Santa Monica — Draft Sustainable Water Master Plan Page ES -3
The City of Santa Monica (City) provides water service to approximately 91,000
residents through a combination of local and imported water supplies. In recent years
the City has relied heavily upon Metropolitan Water District (MWD) water (referred as
imported water in this report) due to the presence of contamination in its groundwater
supply, necessitating additional local groundwater treatment. Due to recent studies and
efforts to mitigate this contamination, the City has started bringing wells back online and
pumping more groundwater, which is helping create a more robust, reliable supply of
water. The City has also continued to collect and recycle dry- weather urban runoff for
use as a treated non - potable water source.
In terms of land use classification, single family and multi - family residential are the
City's predominant user type. In addition to the residential land -use, the City also has
centralized business, a commercial district, and institutional and industrial areas. Figure
ES -2 below shows the current land -use map of the City. It is expected that future
changes in growth and land -use type will result from re- development of the existing
parcels since almost all of the City's area is at near built -out conditions.
Santa Monica — Draft Sustainable Water Master Plan Page ES -4
Given the near build -out condition, population growth in the City's service area is
projected to be minimal, less than 1 percent per year. As a major commercial center for
the region, the City experiences daytime populations of up to 200,000 due, in large part,
to the number of businesses and attractions located within the City. This increase in
population along with general non - residential growth rate will increase the City's water
demands for indoor and outdoor use in future years. Table ES -1 below shows the
City's projected population through the 2035 planning period.
Table ES -1 Projected Population
Year 2015 2020 2025 2030 2035
Projected 91,243 91,487 91,716 91,926 92,124
Population
Source: 2010 Urban Water Management Plan
Since 2005, water demands within the City have ranged from 13,000 AF to 15,000 AF
with an average annual demand of approximately 13, 930 AF (Table ES -2). The
decrease in demands that began in 2008 corresponds with statewide drought conditions
promoting the need to conserve water resources and depressed economic conditions..
Overall, the City's water use has been steadily declining since the early 1990's as a
result of its successful water conservation programs.
Table ES -2 Historic Water Use
Year
Demand (AF)(')
2005
14,917
2006
15,061
2007
15,112
2008
14,491
2009
13,855
2010
13,065
2011
13,142
2012
13,874
2013
14.020
Average 13,934
(a) Source of data for years 2005 -2009: City's 2010 UWMP. Source of data for years 2010 -2013: City's Department
of Water Resources Public Water System Statistics report.
Santa Monica — Draft Sustainable Water Master Plan Page ES -5
The City provides water service through over 18,000 metered service connections to a
variety of customer types. These include: residential, commercial, institutional, and
landscape customers. Approximately 80 percent of the City's total service connections
are used to serve the City's residential customers. Commercial and institutional
accounts account for approximately 12 percent of the service connections. Landscape
irrigation, fire line services and various "other" accounts make up the remaining 8
percent of the City's water customers. Among the "other" accounts is a very small set of
customers receiving recycled water from the Santa Monica Urban Runoff Recycling
Facility (SMURRF). A graphical summary of the water usage by customer type is
shown in Figure ES -3.
Figure ES -3 Service Connections by Customer Type
Source: City utility billing data; calendar year 2013
® Single Family Residential
® Multi Family Residential
M Commercial /Institutional
® Industrial
® Landscape /Irrigation
® Agriculture
Other Services
As expected, the majority of the City's water use occurs within the residential sector
(Table ES -3). As shown, residential usage accounts for approximately 61 percent of
the City's total consumption.
Santa Monica — Draft Sustainable Water Master Plan Page ES -6
Table ES -3 Historic Water Demand by Customer Type (AF)
Customer Type 2005 2006 2007 2008
2009 2010 2011
2012
2013
Single Family 3,322 3,645 3,752 3,529
3,195 2,862 2,798
3,113
3,143
Residential
Multi - Family Residential 5,843 5,866 5,784 5,575
5,408 5,100 5,517
5,503
5,431
Commercial /Institutional 3,325 3,774 3,745 3,549
3,374 3,003 3,512
3,544
3,718
Landscape Irrigation a 573 626 728 698
652 538 606
604
606
Unaccounted for 1,854 1,150 1,103 1,140
1,226 1,562 709
1,110
1,122
Water (b)
Total Water Use(c) 14,917 15,061 15,112 14,491
13,855 13,065 13,142 13,874 14,020
(a) Includes recycled water produced by the SMURRF.
(b) Unaccounted water for 2012 and 2013 based on average of unaccounted
water from 2005 to 2011
(c) Source of data for years 2005 -2009: City's 2010 UWMP. Source of data for years 2010 and 2011:
City's
Department of Water Resources Public Water System Statistics report ( "Total water into the system,'
including
recycled water).
To achieve water self- sufficiency by the year 2020, the City must have a clear
understanding of its future water needs, or demands. The total amount of local water
supplies needed to meet the City's sustainability goal includes water supplied to
customers as well as an allowance for system water loss, and water lost through the
water treatment process referred to as brine or production loss.
The City's initial estimate of the volume of water needed to meet the sustainability goal
was approximately 3,700 acre -feet (AF); however, that estimate was based on the
assumption that water demand would not increase in the future beyond current levels
and did not consider the effects that economic activity and weather may have on
historical and future water demands. While the extent of these effects may vary based
on local conditions, there is a general increase in demands with increased economic
activity and hotter, drier weather conditions. These effects were not incorporated in the
demand projections available in current planning documents, including the 2010 Land
Use and Circulation Element (LUCE).
To plan for future water supply needs, a comprehensive demand analysis was
performed that reconciled prior demand projections with actual water usage in the last
several years, and were adjusted for the potential effects of weather and economic
activity applicable to Santa Monica. First, a new baseline demand projection was
developed. This baseline demand projection begins with current actual demands of
approximately 13,500 AF in 2012 and grows at the same rate as the water demand
projection found in the LUCE. LUCE annual growth rates were used since it was
developed based on the City's best estimates of demographic and development
projections used in the City's General Plan and other planning documents. Figure ES -4
compares the water demand projection found in the LUCE with the new baseline
demand projection.
Santa Monica - Draft Sustainable Water Master Plan Page ES -7
Figure ES -4 LUCE and Baseline Water Demand Projections
Next, the effects of weather and economic conditions on the City's water demand were
explored. Regression analyses were performed to evaluate the correlation between
water use for various customer categories (single family, multi - family, commercial,
institutional and landscape irrigation) and weather and economic (unemployment rate)
factors. Data from the regression analyses indicated that there was no significant
correlation observed with weather related parameters for the City. However, a better
correlation was found between the City's unemployment rate and the water use of
single family, multi - family and landscape irrigation customer classes. A decrease in the
unemployment rate resulted in an increase in water use among these customers. The
analysis suggests that an element of the City's reduction in water usage was due to the
recent recession and higher unemployment rate.
Accordingly, the baseline water demand was adjusted to project future water demands
under good economic conditions, as shown in Figure ES -5. The "good economy"
demand projection is approximately 10 percent higher than the baseline water demand
projection. Given that the City's existing local water supply capacity is approximately
9,000 AF, the demand analysis suggests that the gap between available local water
supply from the Arcadia Water Treatment Plant, and the volume of water required to
meet the City's sustainability goal in 2020 is actually closer to 6,500 AFY, rather than
3,700 AFY.
Santa Monica — Draft Sustainable Water Master Plan Page ES -8
Figure ES -5 Comparison of Alternative Demand Projections
Water Demand
ls000 15,900
_ -
15,i110- _....- __.��- a_ -__ -_ 15,490
14,800
14000 _- _— - 14,100
13000
13,600 ppproxlmaTely §,400 AF
needed to meet City's
Q NOW - - - - - --
Iloao
1 WO
9000 ------
8WO
Year
- - LUCE Demand Projection - - Baseline Demand Projection
- -- "Good Economy" Demand Projection —Existing Local Supply Capacity
Water conservation modeling and analysis was performed to better define the City's
opportunities to reduce the projected water demands described above through the
implementation of water conservation programs. Following the completion of a detailed
billing and historical conservation program and policy analysis, a comprehensive list of
water conservation programs was developed and modeled using the Alliance for Water
Efficiency's Water Conservation Tracking Tool. This model allows users to analyze the
water savings potential and implementation costs of a collection of water conservation
programs. The model also uses local demographic and housing characteristics to
estimate water savings that could be attributable to enhanced efficiency requirements in
State plumbing codes and water fixture usage standards, and predict reductions in
demand from other applicable programs.
The suite of programs selected for analysis address each of the City's water customer
sectors (single - family, multi - family, commercial, institutional, and landscape) with an
emphasis on water users that shows opportunity for additional conservation. Since
1988, the City has invested millions of dollars in resources to retrofit nearly every indoor
plumbing fixture in commercial, single - family and multi - family buildings with water
saving products. As a result, water usage in the City has declined even though the
City's population and non - residential development have increased.
Santa Monica — Draft Sustainable Water Master Plan Page ES -9
Results of the billing analysis indicated that the greatest remaining potential for water
conservation exists among the City's commercial and institutional customers, as well as
in landscape water use. Two specific large water users, St. John's Medical Center, the
Santa Monica - Malibu Unified School District, and laundry facilities, were identified by
City staff as customers with a high potential for additional water savings and programs
were developed to target those potential water saving opportunities.
Implementation levels for each water conservation program modeled were based on
analyses of saturation rate of existing water saving plumbing fixtures and landscapes,
customer surveys, staff knowledge of the City's customers and their willingness to
implement these programs, and products that will have long -term water savings that are
not dependent on significant changes in the customer's behavior. The goal was to
develop a diverse selection of programs that aggressively pursued demand reduction
through retrofitting existing indoor plumbing with plumbing fixtures that save about
twenty percent more water in addition to retrofitting landscape customers' with plants
and irrigation approaches that can save up to eighty percent more water, compared to
existing landscapes.
The resulting suite of conservation programs, shown in Table ES -4, is projected to save
approximately 775 AFY of water in the year 2020. An additional 418 AFY of savings is
expected in 2020 as a result of State plumbing and building code standards that require
higher water saving fixtures. In addition, a reduction in system -wide leaks and non -
revenue water through capital investment in the system is projected to save another 250
AFY of water for a total demand reduction of approximately 1,443 AFY in 2020.
Table ES -4 Water Conservation Programs
:Itlenllal HET Rebate
Single Family
3568
]]
$39,900
: identlal WBlC Rebate
Single Family
1920
79
$29,300
/s Cash for Grass Rebate Program
Single Family
1,100,000 square fee[
51
$209,900
/s Ddp lrtlgation Rebate Program
Single Family
1,300,000 Square (eel
24
$139,900
1's HE NOarle Rebate Program
Single Family
550,000 Square feet
]
$52,500
ler5mart Software -5 %Reduction in Water Use (6tHA!)
Single Family
3,0,10 customers,
6
$26,600
upf Tailets(Direct lnsta8allon (NEW)
Multi Family
5,496
73
$174,800
identlal HE Clothes Washer Rebate
Multi Family
544
19
$91800
identlal MET Rebate
Multi Family
4,000
13
$16,200
nlnar Flow Resitictors far5[.lohn's Medical Center (NFW}
Commercial
664
6
$1,500
nmertialDry Vacuum Pump Rebate
Commercial
40
3
$1,400
nmertial COnnedionless Food Steamer Rebate
Commercial
2
3
$100
nmerclal2ero Water Urinai Rebate
Commercial
4
011
$26
Commercial Ultra-LOW Volume Urinal Rebate
Commercial
544
8
$31500
$31,300
CommerHal Conductivity Controller Rebate
Commercial
2
4
$0
$0
Commertial HET Rebate
Commercial
200
5
$2,500
$22,900
LII Cooling Tower Treatment Tem Slowdown (fdeW)
Commertial
2
1
$200
$1 ,400
Coimtlpera[ed laundry Machine Retrofit lNewl
Commercial
45
360
$3,50,4
$331800
HETS for SL John's Medical Center (NEW)
Commercial
10
0.3
$100
$1,300
0.125 IRA Urinals for St. John's Medical Center (NEW)
Commercial
]
0.3
$40
$400
1.5 Lima Faucet Aerators for St. John's Medical Cmitc,R6WI
Commercial
158
0.3
$800
$6,900
_._. __.
SMMUSD AVdils &Aetrolits - Assumes 5% Reduction in Total
Institutional
Maintain¢d through
5
$94,400
$849,400
Santa Monica — Draft Sustainable Water Master Plan Page ES -10
Figure ES -6 shows the potential effect of implementing the recommended water
conservation programs on the City's projected water demand assuming the "good
economy" water demand projection previously described. Implementation of the
recommended water conservation programs reduces the volume of additional water the
City must produce to meet its self- sufficiency goals from approximately 6,500 AF to
approximately 5,000 AF. While water conservation alone will not enable the City to meet
its water self- sufficiency goal, it can significantly reduce the volume of additional water
supply required.
Figure ES -6 Demand Reduction from Recommended Conservation Programs
While conservation programs are often less expensive than physically constructing and
operating new water supply or treatment facilities, the noted reductions in projected
water demand are not without a cost. For the City of Santa Monica, these costs include
the cost of the actual conservation program, increased staff and public outreach costs
associated with new program implementation and management, and the associated
loss in water sales revenues (this latter component is partially offset by reduced water
supply production costs). Based on the City's current demands and water revenues, it
is estimated that the total cost for the recommended water conservation program
reflected in Table ES -6 is approximately $7.2 million through 2020.
Santa Monica — Draft Sustainable Water Master Plan Page ES -11
Water Demand
16,000
15,490AF
14,045 AF
12.000
N
101000
LL
'�-
9,000 AF
Projected additional supply needed
6,000 - - - - - -- - - - --
- -- ------- - - - - --
for 2020 demand is approximately
— — --- - - - - --
5,000AF.
4,000
2,000
1p�� 1pl9
1p% 1k, 20+ 2p��
10% 11110
Year
—Projected Demand
° ° Demand After Conservation —Existing Local
Supply Capacity
While conservation programs are often less expensive than physically constructing and
operating new water supply or treatment facilities, the noted reductions in projected
water demand are not without a cost. For the City of Santa Monica, these costs include
the cost of the actual conservation program, increased staff and public outreach costs
associated with new program implementation and management, and the associated
loss in water sales revenues (this latter component is partially offset by reduced water
supply production costs). Based on the City's current demands and water revenues, it
is estimated that the total cost for the recommended water conservation program
reflected in Table ES -6 is approximately $7.2 million through 2020.
Santa Monica — Draft Sustainable Water Master Plan Page ES -11
Given the City's projected water supply demand conditions, a multi- faceted water supply
portfolio is needed to meet the City's water self- sufficiency goal. This portfolio is
projected to include both demand reduction measures through the implementation of
water conservation programs, as well as new supply and water treatment options. New
water supply options may include additional groundwater capacity, rainwater harvesting
and stormwater capture, and additional recycled water sources. These current and
future supply options are explored in greater detail herein.
The City's existing water supply consists of groundwater, purchased imported water,
and a small amount of recycled dry weather urban runoff. Historically, groundwater
made up the majority of the City's water supply portfolio; however, in 1995 when methyl
tertiary butyl ether (MTBE) contamination was discovered in the Charnock Sub - basin, a
sub -basin of the Santa Monica Basin, the City was forced to shut down five groundwater
wells and purchase the majority of its water supply from MWD. In addition to local
groundwater and purchased imported water, the City treats a small volume of dry
weather urban runoff, yielding a source of recycled water that can be used for
landscape irrigation and other approved uses, such as toilet flushing.
=,ZMRYFT
In recent years the main source of potable water supply for the City has been imported
water purchased from MWD. MWD receives a negotiated allotment of water from the
Colorado River and the San Joaquin River Delta. These allotments are then distributed
among its 26 member agencies — a cooperative of municipalities and water agencies
located throughout southern California.
The City has a current Tier 1 rate allocation of 11,515 AFY of water through MWD. Tier
1 water corresponds to the amount of water the City is entitled to purchase at the Tier 1
rate. MWD Tier 2 water is also normally available to the City; however, the cost
per acre -foot is higher and there is less availability and reliability of Tier 2 water in
periods of drought. The City has routinely exceeded its Tier 1 entitlement in recent
years due to inactivity of many of its wells. Prior to the recent reactivation of its
groundwater production, imported water represented approximately 85 percent of the
City's total water supply. Table ES -5 shows the City's imported water purchases since
2005.
Santa Monica — Draft Sustainable Water Master Plan Page ES -12
Table ES -5 Historical Imported Water Supply
Year Purchases (AF)
2005 12.671
2006
13,216
2007
13,017
2008
12,323
2009
11,685
2010
9,812
2011
6,388
2012
6,550
2013 5,833
Source: City of Santa Monica Water Resources
The City maintains two separate connections with MWD for its supply of imported water.
These two connections are shown in Table ES -6.
Table ES -6 City of Santa Monica's MWD Connection Capacities
Total Description SM -1 SM -2 rte,.
Capacity (AFY) 21,720 18,100 39,820
Local groundwater represents both an existing source of potable water as well as a
potential source of future potable water supply. Local groundwater has, until recently,
been underutilized due to the shutdown of five Charnock wells that reported MTBE
contamination in 1995. Due to the completion of MTBE remediation efforts in February
of 2011, the City has been able to bring the five Charnock wells back online.
The City obtains its groundwater supply from the Santa Monica Basin (Basin). The
Basin is located in western Los Angeles County and overlies the entire City of Santa
Monica, Culver City, Beverly Hills, and portions of western Los Angeles. The Basin has
a surface area of 50.2 square miles and consists mostly of flat to mildly hilly terrain. The
basin is bounded by impermeable rocks of the Santa Monica Mountains to the north, the
Ballona Escarpment (Bluffs) to the south, the Newport- Inglewood fault to the East, and
the Pacific Ocean to the West. Extensive faulting within the Basin separates it into five
subbasins as shown in Figure ES -7 below.
Santa Monica — Draft Sustainable Water Master Plan Page ES -13
Figure ES -7 Local Groundwater Basins and Subbasins
Groundwater in the Basin is replenished by percolation from precipitation, receiving an
average annual precipitation of about 14 inches, and by surface runoff from the Santa
Monica Mountains. Since the basin is mostly urbanized and soil surfaces have been
paved to construct roads, buildings, and flood channels, only a small portion of basin
soils are capable of transmitting water to the water - bearing formations below.
The City has historically pumped annual volumes of groundwater ranging between 11
and 10,038 AF, with a long -term average volume of 4,277 AFY. The combined capacity
of the City's five wells located in the Charnock Sub -basin is 9,000 GPM. An additional
five wells, two in the Arcadia Sub -basin and 3 in the Olympic Sub - basin, remained
online when the Charnock wells were shut down, and have the ability to produce 3,300
GPM. These five wells have been responsible for approximately 1,950 AFY, or 13
percent of the City's water supply. In total, the City currently has the ability to pump
groundwater at a rate of approximately 10,600 GPM. Table ES -7 shows the capacity of
each of the City's groundwater wells.
Santa Monica — Draft Sustainable Water Master Plan Page ES -14
Table ES -7 Groundwater Well Capacities
Well Name /No. Subbasin Capacity (gpm)
Charnock 13 Charnock 1,800
Charnock 16 Charnock 1,675
Charnock 18 Charnock 1,675
Charnock 20 Charnock 1,330
Arcadia 4 Arcadia 250
Arcadia 5 Arcadia 180
Santa Monica i Arcadia 25u
Santa Monica 3 Olympic 820
Santa Monica 4 Olympic 800
Total Capacitv 10,632
are average values and vary over
To protect the Santa Monica Bay from contamination caused by pollutants found in dry
weather urban runoff the City built the Santa Monica Urban Runoff Recycling Facility
(SMURRF). The SMURRF project produces a small volume of high - quality recycled
water that is used to offset potable water demands for landscape irrigation and indoor
plumbing. Designed to routinely treat 0.5 MGD, with a peak treatment capacity of 0.75
MGD, the SMURRF removes urban contaminants and treats the influent water to Title
22 state standards for tertiary water. The water is then pumped through a separate
water distribution system to serve a number of parks, medians, Woodlawn Cemetery
and some dual - plumbed buildings.
The SMURRF has allowed the City to slightly reduce its reliance upon MWD water at a
time when the City relied heavily upon imported water due to the lack of production from
groundwater wells. However, since dry weather urban runoff is an unstable supply, the
focus of this facility has been predominantly water quality improvements to Santa
Monica Bay. Historically, SMURRF has had an average production of 154 AFY, with a
high of 354 AF and a low of 94 AF.
r - 1
In addition to implementing the water conservation programs previously described, the
City is also desirous of expanding use of its local groundwater resources. Currently, the
City obtains local groundwater from the Arcadia Olympic Sub - basins via five wells.
These wells can produce approximately 3,000 acre feet per year (AFY). Additionally,
there are five wells located outside of the City limits in the Charnock Sub -basin with a
combined average production capacity of approximately 6,000 AFY. From 1995 to
2010, the City purchased most of its annual water supply needs from the Metropolitan
Water District (MWD) as the Charnock well field was shut down due to methyl tertiary
butyl ether (MTBE) contamination. The total average groundwater production capacity
Santa Monica — Draft Sustainable Water Master Plan Page ES -15
from these sub - basins for local treatment at the Arcadia Water Treatment Plant is
approximately 9,000 AFY.
Another study of the groundwater basin was recently performed by Richard C. Slade
and Associates, LLC (RCS). The study suggests the City may have additional local
groundwater opportunities within the Olympic, Charnock and Coastal Sub - basins. The
Coastal sub -basin has not been utilized as a groundwater source to date due to salt
water intrusion; additional treatment would be required to utilize water from this basin.
Additional efforts are needed to assess potential sites and derive the potential quality
and quantity of additional well production for the City's supply portfolio. Incorporating
the RCS study with the SWMP's evaluations and discussions, has led to the following
preliminary recommendations for additional local groundwater production and treatment
facilities. These preliminary recommendations are:
• Expansion of the existing Arcadia Water Treatment Plant
• Design and construct the new Olympic Water Treatment Plant (Gillette /Boeing
Settlement Project)
• Rehabilitate old wells and drill additional new wells in the Olympic, Charnock and
Coastal Sub - basins
• Develop and implement improvements in treatment efficiency to reduce the
amount of water lost to brine disposal during treatment (reduction of brine water
losses from 18% to 9 %)
While additional engineering and hydrogeologic studies will be required to determine a
realistic production capacity for these wells, it is believed that the City could attain as
much as an additional 6,000 AFY of local water if all of these strategies were
implemented. Of course, an equivalent increase in local water treatment capacity is
required to deliver this water to the City's customers, requiring an increase in the
capacity of the Arcadia Water Treatment Plant and /or using settlement funds and other
sources to construct a new water treatment plant (currently referred to as the Olympic
Water Treatment Plant as it is designed to focus on treating water from the Olympic
sub - basin). The current approach for siting some of these future water supplies is
reflected graphically on Figure ES -8.
Santa Monica — Draft Sustainable Water Master Plan Page ES -16
Figure ES -8 Groundwater Basins and Facilities
.emend
ale Monica Wells
4 Egsling Salta Monica Well$
III Existing Water Treatment Facilities
E Proposed Water Treatment county
City of Santa Monica Boundary
Santa Monica Bash
Beyond the additional local groundwater opportunities described above, potential exists
for joint - development of nearby under - utilized groundwater basins, including the
Hollywood and Central Basins. These are multi - jurisdictional opportunities that will
require coordination between the City and the Los Angeles Department of Water and
Power and /or the City of Beverly Hills. Given the nature of institutional - related projects,
these opportunities are considered as more long -term water supply options and are not
included in the list of potential new groundwater opportunities available to the City to
meet its self- sufficiency goal by 2020.
Given Santa Monica's Mediterranean climate, rainwater harvesting (the capture and
onsite use of rainwater for landscape irrigation purposes) offers limited opportunity as a
significant additional water supply within the City. However, to quantify the potential
benefit of this resource, an analysis was performed to compare the potential for
rainwater harvesting based on average monthly precipitation data and monthly
landscape water demand for residential and commercial customers.
Santa Monica — Draft Sustainable Water Master Plan Page ES -17
Results of the above analysis indicate that the potential for rainwater harvesting as a
supply option in Santa Monica is limited by the large size of individual property owner
cisterns required, and customers' motivation to install them. Historically, residential
cistern installation, even with a rebate of $1,000 per cistern, has been minimally
accepted by the City's customers. Accordingly, it is estimated that the rainwater
harvesting incentive program may provide only 1 -2 AF per year.
Similarly, a City -wide stormwater capture program offers a seasonal, unreliable
additional water supply option for the City. A scenario was developed in which
stormwater captured through the City's storm drain system would be routed to the Santa
Monica Urban Runoff Recycling Facility (SMURRF) for distribution to landscape
irrigation customers. It is estimated that a City -wide stormwater capture program may
be able to generate an additional 160 AF of supply per year.
Currently, the City distributes approximately 85 AFY of recycled urban runoff to
customers for landscape irrigation and indoor commercial use through the SMURRF
and associated distribution system. The City does not operate a wastewater treatment
plant and thus does not have a local source for additional recycled water supplies.
However, the City could partner with adjacent agencies that currently produce recycled
water in order to bring additional recycled water supplies to its customers. The West
Basin Municipal Water District (WBMWD) operates a recycled water system that
terminates near Marina Del Rey, which may provide the City with a potentially feasible
source for recycled water. The Los Angeles Department of Water and Power (LADWP)
also looked into utilizing this source and has prepared a master plan that suggests a
potential for connection at this same location.
A recycled water market study was performed to estimate the potential for recycled
water use within the City. Results of this study indicate that 350 AF of recycled water
could be used by the City's dedicated landscape irrigation customers that reside along
some key corridors into the City. Figure ES -9 provides a potential recycled water
distribution system that focuses on delivering year -round recycled water to the City and
serves a number of customers along the corridor of pipeline facilities.
Santa Monica — Draft Sustainable Water Master Plan Page ES -18
Figure ES -9 Potential Local Recycled Water Supply System
Existing Dedicated Landscape MCity Boundary
Irrigation Demand (AFYI
Existing Recycled Water Customers
i 0 -5 Residential
0.5 Non - Residential
5.1 -0 Nan - Residential
9.1 -34 Non - Residential
A SMURRF Plant
City of Los Angeles
Potential System Westside
SMURRF Distribution System Main
Proposed Branch Lines
Proposed Connection from
°® West Basin Line to SMURF
Demand Areas
A - Main Line to Smurf
81 - South Airport Branch
B2 - Norm Airport Branch
C - Neilson Way Branches
D -Virginia Ave Park Branch
E - Colorado Ave Branch
F - Broadway Ave Branch
In this potential system, the City may be able to partner with LADWP to jointly fund a
new transmission and pumping system that connects to the WBMWD pipeline and bring
recycled water to the southeast side of Santa Monica. The project would require
approximately 5 miles of pipeline from its current point of termination. Establishing the
partnerships and agreements necessary to make this type of inter - agency program a
Santa Monica — Draft Sustainable Water Master Plan Page ES -19
reality will require time, and this option should be considered a long -range strategy for
the City. It is unlikely that the City could deliver additional recycled water to its
customers before 2020.
i - ., .,
As shown in Figure ES -10, implementation of the strategies described herein suggest
that the City can meet its self - sufficiency goal through a combination of water
conservation programs, additional local groundwater production and additional supplies
from rainwater harvesting and City -wide stormwater capture. In the future, the City may
also be able to establish additional recycled water supplies through inter - agency
partnerships with adjacent water agencies and municipalities.
Figure ES -10 Water Supply and Demand Comparison Including New Supply
Opportunities
Water Demand ----- Water Demand After Conservation
18,000
16,000 __ - ----- -- - - - -_ —___ - -_ -. -. -.- 15,490 AF
14,000 ------ — — ° — mm_ - .., ____ __ _— — _ _ 1443 AF -
n ®_ ®__ __a
0
d
® 5,000 AF
9,000 Acre Feet
Projected additional supply
6,000 - - - -- - - - -- - -- - needed for 2020 demand is
approximately 5,000 AF
4,000
Total Gap, 6,500 AF
2,000
dOf� 204 7�JS d��G dol 1% 1% X010
Year
Existing5upply - ® - - - -- Supply After Augmentation
Figure ES -11 presents three different options for obtaining water self- sufficiency. These
three portfolios were developed and presented to the City Council on May 14, 2013. At
that meeting, Council directed staff to proceed with the Sustainable Water Master Plan
and further develop the demand management approaches and water supply
augmentation tactics associated with Option 1 to support the City's sustainable plan
goals and objectives. The primary elements of this plan include:
Santa Monica - Draft Sustainable Water Master Plan Page ES -20
® Implement the identified demand management measures to promote additional
water use efficiency,
® Expand groundwater extraction capacity to produce more local groundwater,
® Expand the existing Arcadia Water Treatment Plant capacity and construct the
new Olympic Water Treatment Plant to treat the additional supply of local
groundwater, and
® Augment these core supply demand programs with other non - potable reuse
opportunities to reduce potable water usage.
Figure ES -11 Potential Supply /Demand Management Portfolios
Hydraulic System Analysis
To evaluate the potable water system, a computerized hydraulic model was developed
using the City's Geographic Information System (GIS) data, facility information,
operational controls, system demand curves, and water utility customer billing data.
Following completion of the importing of all of the elements of the City's water
distribution system into the hydraulic model databases, calibration of the hydraulic
model was performed.
Santa Monica — Draft Sustainable Water Master Plan Page ES -21
AW
-
G
�
Hydraulic System Analysis
To evaluate the potable water system, a computerized hydraulic model was developed
using the City's Geographic Information System (GIS) data, facility information,
operational controls, system demand curves, and water utility customer billing data.
Following completion of the importing of all of the elements of the City's water
distribution system into the hydraulic model databases, calibration of the hydraulic
model was performed.
Santa Monica — Draft Sustainable Water Master Plan Page ES -21
The goal of calibration was to develop a hydraulic model which reasonably represents
actual conditions in the distribution system. Two phases of calibration were conducted:
Steady State and Extended Period Simulation. Steady state simulation calibration
involved the process of simulating fire hydrant flow tests with the model so that it
provides a reasonable match with the field generated findings. Extended period
simulation modeling is associated with modifying the model until it simulates the
operations of a specific day or multiple days with relative accuracy.
Upon completion of this task, the City's model was populated with projections of future
water demands throughout the system, and used to reliably evaluate the performance of
the City's water system under both current and future demand conditions. This
modeling tool is now available to be used by the City to perform additional "what if' as-
needed water system analysis activities.
The following pressure zone and system configuration was used to represent the City's
hydraulic model. The City's system is divided into three pressure zones to regulate
pressures in the water system. These pressure zones include: the 500, 350 and 250
foot zones. Each zone has its own primary sources of supply and facilities and is also
hydraulically connected to the zone below it. A description of these zones and facilities
follows.
The 500 foot pressure zone lies at the northern most edge of the City and is the City's
smallest zone. The 500 zone serves primarily single family, low density residential land
uses. Since the 500 zone is both the smallest and lowest density zone in the system, it
also serves the smallest demand of three zones.
The 500 foot zone is entirely developed, and due to the prohibitively high cost of
acquiring land, storage was never built to serve this zone. To compensate for this
condition, the 500 zone is served by both a direct connection to MWD which directly
feeds the 500 zone and the San Vicente Booster Station which provides additional flow
and pressure when conditions warrant.
The supply from MWD that serves the 500 zone typically exceeds the demands present
in this zone. This excess supply is normally relieved to the 350 foot zone where it
serves as supply or goes into storage. The City normally uses the MWD connection to
meet the storage needs of the 350 zone that are not satisfied by the output of the
Arcadia Booster Station.
The 350 foot pressure zone is the largest of the three zones in the City and spans from
the eastern most point in the City to the western most point. This zone serves low and
high density single - family dwellings, commercial, industrial, and educational customers,
and the Santa Monica Airport. It encompasses 57% of the City's land area and is
supplied its water primarily from the Arcadia Water Treatment Plant (Arcadia WTP).
Finished produced water from the Arcadia WTP is delivered to the Arcadia Booster
Pump Station for final distribution to the customers in this zone.
Santa Monica — Draft Sustainable Water Master Plan Page ES -22
The 350 foot zone has four storage reservoirs which provide 40 MG of storage capacity.
In order of descending size, the 350 zone is served by the Riviera, San Vicente, Mt.
Olivette, and Arcadia reservoirs, which have 25.0, 5.0, 5.0 and 5.0 MG capacities,
respectively.
250 Foot Pressure Zone
The 250 foot pressure zone spans the length of the coastline within the City boundary
and occupies the majority of the southwest corner of the City. It, like the 350 zone,
contains a variety of land uses, most notably the Santa Monica downtown area and pier.
Given the characteristics of the customers in this zone, this zone exhibits the largest
ratio of water consumption per acre of land in the City.
The 250 foot zone is served primarily by a direct connection to the Arcadia WTP. The
250 zone is also served by two pressure relief /sustaining valves from the 350 zone, one
each at the north and south ends of the zone. These valves supply the 250 zone if
pressure in the 350 zone becomes too high and are used to sustain the pressure in the
250 zone should it drop too low.
Similar to the 500 foot zone, the 250 zone also contains no direct storage. It does
however, have indirect access to the storage in the 350 zone by way of the two
pressure sustaining valves which connect the two zones.
Summary of Water System Improvements
As discussed herein, the City's water system was evaluated under both current and
future conditions with an overall focus of developing those programs and facilities
needed to meet the City's water self- sufficiency and water use efficiency goals and
objectives. To this end, a comprehensive demand analysis was performed to better
understand the implications of the economy and weather on water demands over the
last decade and incorporate this finding in a robust demand projection. This projection
formed a basis of planning for the City's water use efficiency targets and the water
supply and infrastructure needs related to a self- sufficient supply. To achieve both of
these goals by 2020, a diverse set of water supply augmentation projects and demand
management measures were derived and approved by City Council for further
development and potential implementation.
In addition to these programs and projects, the Sustainable Water Master Plan also
evaluated and developed programs and projects related to storing and distributing water
to the City's customers. These identified improvements are typically prioritized into a
capital improvement program (CIP) based on the assessment of a wide variety of
factors. These factors include: capacity considerations under current and future
demand conditions, system reliability and performance, and support for the City's
sustainability and self- sufficiency goals and objectives. A summary discussion of the
City's water system storage and piping recommendations follows.
Santa Monica — Draft Sustainable Water Master Plan Page ES -23
As discussed, dedicated water system storage is generally isolated to only one of the
City's three pressure zones, zone 350. This finding suggests a general need to
increase the volume of available storage in various areas of the City to meet emergency
and outage conditions and improve the resiliency of the City's water system. To this
end, the City has performed various studies over the years to assess the potential siting
of additional storage to mitigate this condition. At this time, it is believed that additional
storage associated with the new Olympic Water Treatment Plant may be the most
viable location for improving water storage and system resiliency.
Y .
Water system pipeline improvements generally fall into two categories — Improvements
related to increased capacity or increased reliability.
® Capacity- related improvements were identified through the use of the newly
developed water system hydraulic model. With the model, pipelines that did not
meet a set of system performance or design criteria under either existing or
future demand conditions were identified for replacement with larger diameter
facilities.
Reliability - related improvements were derived in this study based primarily on
pipeline age and other asset condition and management related factors. Age
information was attained through the City's water system GIS platform, while
other condition and reliability information was attained through the City's water
asset management system. To simplify the process and discussion in this
Executive Summary, pipeline age is used herein to represent the potential
reliability and vulnerability to condition - related service outages.
Figure ES -12 is developed to show the age distribution of the pipelines in the City's
water distribution network. As shown, approximately forty five percent of the City's total
pipeline network was installed prior to 1970, and approximately 25% of the system is
over 65 years old. With a planning -level useful life of 50 to 70 years, the City should
plan for the repair /replacement of many of the pipelines in the next 10 to 20 years.
Santa Monica — Draft Sustainable Water Master Plan Page ES -24
Figure ES -12: Age Distribution of City Water System Pipelines
It should be noted that the City has developed an asset management system of its
underground water pipelines and has budgeted for the methodical replacement of
underground infrastructure for many years. Unfortunately, since underground pipelines
are "out of sight and out of mind" improvements, this line item has historically been
underfunded, increasing the risk of significant water main breaks and system losses
similar to the ones experienced by the City of Los Angeles in recent months. To fully
fund the replacement of all of these facilities would require an investment of
approximately $80 -$90 Million, or $445 Million per year for a 20 -year replacement plan.
The current level of annual funding for this line item is approximately $2 Million, down
from the original annual budget level of $3.8 Million to minimize the impacts on water
rates at this time.
The work with the City to conduct this Sustainable Water Master Plan (SWMP) has
supported the development and use of the City's current water system five -year Capital
Improvement Plan. These programs and projects address the full range of capacity,
reliability, sustainability, and self- sufficiency improvements. They are phased for
implementation to support the methodical implementation of the SWMP to meet the
needs of the City's needs while minimizing the financial impacts on its customers.
Santa Monica — Draft Sustainable Water Master Plan Page ES -25