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SR-07-14-2015-3NT ` • City of Santa Monica' City Council Regular Meeting: July 14, 2015 Agenda Item: To: Mayor and City Council From: Martin Pastucha, Director, Public Works, Water Resources Subject: Application for U.S. Bureau of Reclamation WaterSMART: Drought Resiliency Project Grants Program for Fiscal Year 2015 Staff recommends that the City Council: 1. Adopt the attached resolution authorizing the application for grant funds in the amount of $300,000 from the United States Bureau of Reclamation WaterSMART: Drought Resiliency Project Grants for Fiscal Year 2015 Grants Program for the Santa Monica Drought Resiliency Infrastructure Project. 2. Authorize the City Manager to execute all necessary documents to apply for the grant, accept the grant, if awarded, and accept all grant renewals, if awarded. 3. Authorize budget changes as outlined in the Financial Impacts and Budget Actions section of this report in the event that the grant is awarded. Executive Summary The attached resolution would authorize an application for the U.S. Bureau of Reclamation WaterSMART: Drought Resiliency Project Grants Program. The proposed Drought Resiliency Infrastructure Project improves drought resiliency, increases water supply for reuse, and enhances flexibility in the management of the City's water resources by installing a containerized reverse osmosis unit at the Santa Monica Urban Runoff Recycling Facility (SMURRF). This project would also help the City meet the goals of the Sustainable Water Master Plan and the Governor's Water Action Plan. The proposed project cost is approximately $967,740, consisting of a maximum allowable grant request of $300,000, and a City matching cost of approximately $667,740 to be funded by the Water Fund. Background The U.S. Bureau of Reclamation is the nation's largest wholesale water supplier. Accordingly, the Bureau is committed to assisting its stakeholders build resiliency to drought and climate change. Similarly, the City has established among its sustainability 1 of 4 goals the objective of reaching water self- sufficiency by the year 2020, concurrent with addressing the water conservation requirements made necessary by the current drought. The City's proposed Drought Resiliency Infrastructure Project would align with these objectives, while simultaneously helping to improve drought resiliency, increase water supply for reuse, and enhance flexibility in the management of the City's water resources by installing a containerized reverse osmosis unit at the SMURRF that would improve water quality from the SMURRF and increase the types of users whom could utilize this water. Discussion The U.S. Bureau of Reclamation WaterSMART: Drought Resiliency Project Grants Program was promulgated in response to the unprecedented drought conditions currently afflicting the western United States. The Bureau of Reclamation Drought Response Program has allocated $3 million in grant funding for fiscal year 2015 for drought resiliency projects. A minimum 50% local match is required. The maximum allowable grant amount is $300,000. City of Santa Monica Drought Resiliency Infrastructure Project— Grant Application To improve drought resiliency, increase water supply and enhance flexibility in the management of the City's water resources, the City proposes to install a containerized, off- the -shelf reverse osmosis unit at the SMURRF. The reverse osmosis unit would be utilized to advance treat non - potable water resources such as urban and wet weather runoff harvested by the recently grant funded Clean Beaches Initiative Project storage tanks to be constructed at the Deauville Parking Lot. These tanks will capture runoff from the 90 -acre Pier Drainage Area that would normally be discharged to the ocean at the Pier Outfall. The advance treated water generated by the proposed project would allow for expanded reuse options including, when properly permitted, indirect reuse via aquifer reinjection and for the maintenance of planned future salt water intrusion barriers. Once completed, the project would generate an estimated 30 year lifetime water savings of up to 5.5 billion gallons (approximately 560 acre -feet per year), thereby reducing the City's reliance on imported water. Assuming this volume of water was 2of4 comprised entirely of imported water, and utilizing today's cost of $923 per acre -foot with a 5% annual escalation, the total cost of this water over 30 years would be approximately $36.2M. Other selected project elements include monitoring and reporting and associated piping, pumps, and equipment. The total estimated project cost is $967,740. The requested grant funding is $300,000. The estimated City local match is $667,740 (69 %). City local match commitments would be met by funds appropriated from the Water Fund. Grant awards are currently scheduled for July 2015. Environmental Analysis A California Environmental Quality Act (CEQA) evaluation conducted by the City's Planning and Community Development Department has determined that the proposed project meets the requirements for CEQA exemption. A Notice of Exemption (NOE) will be filed with the State Clearinghouse pursuant to the grant program requirements. A National Environmental Policy Act (NEPA) evaluation by the U.S. Bureau of Reclamation is pending. A preliminary analysis conducted by the City's Planning and Community Development Department has indicated that the project will likely be determined to be Categorically Exempt (CE) from NEPA requirements. Financial Impacts & Budget Actions The total amount of grant funds requested from the U.S. Bureau of Reclamation WaterSMART: Drought Resiliency Project Grants Program is $300,000. If awarded, the grant requires an estimated 69% local match, requiring an additional appropriation. If awarded, staff would establish revenue and expenditure budgets in division 25671 for FY 2015 -16 for the awarded grant amount; and appropriate $656,225 to fund the local match in division 25671 (expenditures will be budgeted in the capital budget). Grant award is anticipated in FY 2015 -16, but if funding awards are delayed, budgets would be appropriated in FY 2016 -17. Maintenance of the project equipment would be funded by existing operating budgets in the Water Fund (estimated 30 year project lifetime), contingent on Council budget adoption. 3 of 4 Prepared By: Thomas Watson, Water Resources Protection Programs Coordinator Approved , W- &L Martin Pastucha, Director 7/2/2015 Attachments: Elaine M Polachek, Asst. City Manager 7/6/2015 A. Resolution - Drought Resiliency Projects Grant Program B. SMURRF Reverse Osmosis Location (PDF) (DOCX) 4 of 4 C a V —1 � , r 0. L- CL • • • • r. • co .. ., • • Reference: Resolution No. 10894 (CCS)