From the General Manager
Summary Report as the District Moves into Fiscal Year 2017/18
Fiscal Year 2017/18 Adopted Budget
The District adopted its fiscal year 2017/18 budget on June 28, 2017. Some of the notable points are as follows:
- Above average rainfall in Santa Barbara County and across the State this past winter improved local water supplies. The District’s current water supplies can support a 28% increase over last year’s water use (3,127 acre feet per year in FY2016/17 to 4,000 acre feet per year this fiscal year). Based on the District’s current available water supplies and projected demands (in compliance with State law,) the District projects having sufficient water supplies through 2020.
- The District will not implement a 7.4% rate increase for fiscal year 2017/18 at this time. In 2013, the District developed a Cost of Service Study and adopted Resolution 2107, providing for annual rate increases from fiscal year 2013/14 through 2017/18, to cover the District’s projected operating costs and capital replacement needs. The anticipated increase in revenue from increased water sales is projected to be sufficient to cover the District’s operating expenses, including capital improvement programs, without implementing the annual rate increase.
- In response to exceptional drought conditions and a limited water supply, the District declared a Water Shortage Emergency and adopted drought ordinances in 2014 establishing monthly water allocations and penalties for consumption in excess of allocations. Because of the improvement in the District’s overall water supply condition, the District will continue its suspension of penalties for water use in excess of monthly customer allocations.
- With improved local water supply conditions and less of a need to acquire supplemental water than in recent years, the District is ramping up its Capital Improvement Program. Among other capital expenditures, the District plans to replace over two miles of 1920’s distribution pipelines to improve the reliability of water deliveries to customers.
- In March, 2015, the District established a Water Shortage Emergency (WSE) surcharge. The purpose of the surcharge is to recover lost revenue resulting from a substantial decrease in water consumption following the establishment of monthly water allocations and penalties. As water sales increase, the surcharge will be reduced. With our projected increase in water sales this fiscal year, the District anticipates a reduction in the surcharge mid-year if water sales trend around 4,000 acre feet.
- A significant portion of the District’s annual expenses are fixed, such as those associated with capital debt repayment, the State Water Project and Joint Powers Authorities. The 2017/18 Budget forecasts the District keeping tight control of variable expenses, with a minimal increase of approximately 1%.
- Improving water supply reliability remains a top priority for the District. To improve the reliability of the State Water Project, the District will be investing in the purchase of regional groundwater storage within the Semitropic Groundwater Storage District, located in California’s central valley. Storing water in a groundwater bank ensures water availability when supplies are needed most such as during drought periods. This banked water will be delivered through the State Water Project when State water deliveries are reduced, increasing the reliability of the State Water Project from 60% to nearly 100%.
The District began a rate study more than a year ago, but it has been on hold as new long term local and reliable water supply options such as desalination and recycled water are being evaluated. With the current 5-year financial plan in its final year, the District will likely be completing this rate study in early 2018, with or without acquisition of a new water supply. It is anticipated that with completion of this rate study, the Water Shortage Emergency surcharge will be eliminated.
2015 Urban Water Management Plan Update (UWMP)
The District filed its UWMP with the Department of Water Resources in May, 2017. In accordance with State Law, its purpose is to inform customers of the District’s long-term water resource planning to ensure adequate water supplies for existing and future demands. It sets a path towards meeting the State’s goal of reducing water consumption by 20% in 2020. The District is currently in compliance with State Law and on track to being in compliance in 2020. Targeted sales for 2020 are approximately 4,300 acre feet. Sales above this would violate State law. Therefore, the District is trending towards sales of 4,000 acre feet in fiscal year 2017/18, in order to gradually approach, without overshooting, the 4,300 acre feet limit in 2020.
2016 Consumer Confidence Report (CCR)
The District’s water quality once again meets and exceeds all State and Federal water quality standards. To ensure that our water is safe to drink, we comply with the United States Environmental Protection Agency and the State Water Resource Control Board limits for various contaminants in drinking water. In addition, the District’s state certified water treatment facility and staff monitor your water quality continuously. Results of this monitoring are summarized in the 2016 Consumer Confidence Report which can be found on the District’s website.
Water Supply Update
While the District’s water supplies have improved significantly from this time last year and the drought is seemingly over for most of the State, unfortunately it continues here in Santa Barbara County. The following is an update on our current water supply:
Local Surface and Groundwater Supplies
Winter rainfall only partially restored Lake Cachuma and Jameson Lake to approximately 50% and 60% of capacity, respectively. Therefore, Lake Cachuma is expected to yield only a 40% allocation (1,060 acre feet) for the second consecutive year, as determined by the United States Bureau of Reclamation. Jameson Lake currently holds approx. 3,000 acre feet. Our yield from Jameson Lake will increase over last year, but will be limited to 500 acre feet per year to conserve this supply in the event of ongoing drought.
Groundwater supplies remain depleted after five consecutive years of record drought. The District’s spring 2017 Groundwater Monitoring Program indicates that the Montecito Groundwater Basin is not yet showing signs of recovery. According to local hydrogeologists, it may take several years of above average rainfall before the groundwater basin recovers. In response, the District has reduced its groundwater production by approximately 50% to allow for additional recharge of the groundwater basin. This is possible due to an improvement in available surface water supplies. Under normal conditions, groundwater constitutes up to 15% of the District’s annual water supply. Proper management of our local groundwater supplies in accordance with the Sustainable Groundwater Management Act (SGMA) is a priority for the District.
State Water Project (SWP) and Supplemental Water Supplies
This past winter’s significant rains and historic snowpack have elevated the 2017 State Water Project allocation to 85% in 2017, which equates to 2,805 acre feet. In addition, the District has approx. 3,000 acre feet of supplemental water purchased from various suppliers around the State. These supplies are stored in San Luis Reservoir until delivered to Lake Cachuma. While delivery capacity is limited, we are taking the maximum available, and have transferred and accumulated approx. 1,300 acre feet of imported water in Lake Cachuma.
There are risks associated with storing water in San Luis Reservoir, specifically loss of water due to spill as experienced in early 2017. In an effort to reduce this risk and increase the reliability of the State Water Project, the District approved the purchase of regional groundwater banking capacity within the Semitropic Groundwater Storage Program. This will ensure the delivery of up to 1,500 acre feet per year, and possibly more, of the District’s banked water for use during periods of below average rainfall or future droughts.
The abundance of water across the State has created opportunities to purchase water at much lower costs than was available in prior years. During the drought, the District purchased supplemental water, of which 5,000 acre feet must be returned to the supplier in accordance with Department of Water Resources requirements. The District recently purchased 2,000 acre feet of supplemental water, which is being used to reduce our water debt by 40%. In addition, the District will be considering the use of other stored water to reduce the debt even further later this year.
The District’s customers continue to achieve extraordinary levels of conservation. The District’s current annual average conservation is 55% of 2013 usage, and 41% for the month of June, 2017. When comparing current water use to that during the drought, it’s clear that conservation is key to achieving compliance with State law. Our target conservation for compliance is approximately 35%. Recognizing that Santa Barbara County remains in moderate drought and that water supply conditions have improved, the District encourages the use of a little more water by customers, provided that the water is used efficiently and wisely. Common wasteful practices, such as overwatering landscapes, must be avoided. To help monitor your water use and avoid unintended water loss, the District continues to encourage weekly meter readings.
Water Supply Reliability
The District continues to focus on developing permanent, local, reliable water supplies. Several opportunities continue to be explored:
The District filed an application with the State Water Resources Control Board for grant funding for the preparation of the Recycled Water Feasibility Study. The purpose of the Study is to evaluate the feasibility of developing a water supply project for the District that produces highly treated recycled water for use in various applications including groundwater recharge. All recycled water opportunities will be studied to develop a proposed implementation plan and schedule, providing the District with the basis for making a decision on how to proceed with recycled water. Acceptance of the grant application by the State Water Resources Control Board is anticipated to take 2 to 3 months. Work on the plan will begin thereafter.
Negotiations with the City of Santa Barbara are temporarily on hold following months of staff negotiations and reaching draft terms on a long-term water supply agreement. The District’s Board of Directors voiced opposition to several key terms and directed District Staff to research and present alternatives prior to their making a decision. District Staff is currently evaluating alternatives, including the feasibility of the District’s own desalination facility and recycled water, and anticipates bringing a report to the Board in late summer or early fall with recommendations on how the District should proceed with securing new long-term local and reliable water supplies for the District’s customers.
Copies of all documents referred to here: 17/18 Budget, 2016 CCR, 2015 UWMP Update, and the Quarterly Water Supply Update are all available on our web site. For easy reference please visit: http://www.montecitowater.com/public.htm or call 805-969-2271.
Montecito Water District’s mission is to provide an adequate and reliable supply of high quality water to the residents of Montecito and Summerland, at the most reasonable cost. In carrying out this mission, the District places particular emphasis on providing outstanding customer service, conducting its operations in an environmentally sensitive manner, and working cooperatively with other agencies. For additional information visit www.montecitowater.com, like Montecito Water District on Facebook, and follow on twitter @MontecitoWater.