City of Santa Maria and State Water

INTRODUCTION

The Grand Jury was concerned about the costs to Santa Maria for state water, and how the city would pay for its commitment. One area of concern is the drought buffer,1 which increased the city's entitlement by 10%, or 1620 acre feet per year (AFY), over and above the 16,200 AFY already determined to be needed by the city. As the city's water purveyor, Santa Maria has contracted with the Central Coast Water Authority (CCWA) for a total of 17,820 AFY of state water. This makes the city the holder of the most entitlement of any water contractor in Santa Barbara County. See Attachment 1.

Since the city has the largest proportionate share of the water entitlement (43.19%), it also has the largest share of the expenses. Payments by the city for state water project components in Fiscal Year (FY) 1995-96 for the pipeline, treatment plant and local facilities were $5.1 million. The 1996-97 projection is $10.4 million. The city Water Fund faces deficits of $2 million to $7 million each year for the next 5 years.2 The Water/Wastewater Fund is an enterprise fund, supported by user fees and charges for goods and services provided.

OBJECTIVE

The Grand Jury's objective is to determine how the city manages its responsibilities as the major contractor in the Coastal Branch of the State Water Project.

APPROACH

Members of the Grand Jury interviewed the City Administrator, City Finance Director, City Attorney, City Public Works Director, and two Council Members; County Counsel; and Central Coast Water Authority (CCWA) Director. Documents researched were:
1. Water Supply Agreement (dated August 1, 1991) whereby Santa Maria assigned its "contractual rights to receive water from the State Water Project" to the CCWA. In exchange, the CCWA is to "provide for the construction, operation and financing of the Project, for the sale by the Authority to the Contractor of the Contractor's Project Allotment...."3
2. Joint Powers Agreement (dated September 3, 1991) whereby the city joined other water contractors to form an authority to act in behalf of its members to "finance, develop, operate and maintain a water supply and treatment project...." Through this Agreement, each member was given a "Voting Percentage" based on that member's Project Allotment (the amount of state water entitlement).4
3. Transfer of Responsibility Agreement (dated November 12, 1991) between the newly created CCWA and the county's Flood Control and Water Conservation District (the District), whereby the county transferred its entitlement to state water to the CCWA in exchange for assurances that "the District will be fully and completely reimbursed by the CCWA for all of its
costs, liabilities and obligations in connection with the implementation of the State Water Project contract as to the CCWA contractors." However, this Agreement specifies that the District is not relieved of "any of its obligations to Department of Water Resources (DWR) under the water supply contract."5

The Grand Jury also reviewed city council minutes, staff reports, resolutions, and financial documents; county invoices from the State Department of Water Resources to the District; CCWA staff reports, budgets, and minutes from committee and board meetings.

BACKGROUND

The city of Santa Maria's current source of water is from wells that draw water from the ground water basin, which lies beneath the valley. The city pumps about 12,000 AFY. The quality of this water is poor due to the high level of total dissolved solids (TDS), ranging from 540-861 milligrams per liter (parts per million). The state standard allows a maximum level of 1000 PPM; the federal standard is 500 PPM. Due to the "deteriorating quality of the groundwater, the city has been unable to meet secondary water quality standards."6 When the decision was made to obtain State Water, the goals were not only to increase the quantity of water, but also to improve the quality of water delivered to city rate payers.

For a time line of State Water Project events, please see the Appendix, pages 19-20.

Santa Maria's Fixed Costs for State Water

There are two construction projects for which Santa Maria is obligated to pay its proportionate share with the other members of CCWA. The DWR and the CCWA are each building a portion of the pipeline, and CCWA is building the water treatment plant. The cost of each Reach (section of pipeline) is shared with those water purveyors who will utilize that Reach. The cost of the construction of the water treatment plant at Polonio Pass will also be shared among the CCWA members. (See diagram Attachment 2).

The third construction project is the city's own local facilities which are entirely the city's responsibility.

The State Department of Water Resources (DWR) portion has a senior lien: by participating in the SWP, the city took on a share of the obligation to pay back the bonds which were issued to build the project. (See Attachment 3)

Project 1. The DWR is building the Coastal Branch pipeline, which extends from Kettleman City in Kern County through San Luis Obispo County to Santa Maria.
The city's share of this project is estimated at $106.4 million for the city's original allotment of
11,300 AFY. The city's additional allotment of 4900 AFY cost is now estimated to be $33.6 million7; the estimate in Dec. 1991 was $6,238,000.

Project 2. By joining CCWA, the city's estimated proportionate share (of the cost of the
treatment plant and portion of the pipeline) is $19.2 million. The CCWA is responsible for building the water treatment plant at Polonio Pass, and the southern reaches of the pipeline. The estimated cost of the treatment plant is $15,350,000, but an additional 25% was required by CCWA as a contingency amount. After construction is completed, any money remaining will be paid back to the city Water Fund, plus interest.

Project 3. The city's own projects are local facilities which are needed to bring in State Water from the Coastal Aqueduct turnout at Black and Betteravia Roads, and to connect to the city's local distribution system. The city borrowed $19,397,262.79 8 for these local projects; the estimate in Dec. of 1991 was $8,794,500.9 Local projects and estimated costs are:10

Component Description Estimated cost

Payments under the Water Supply Agreement $7,500,000
Transmission Line from State Water Project Facilities
for State Water Project entitlement 1,470,000
Well Manifold System Interconnection 2,864,000
Disinfection Station 1,047,000
Water Wells 800,000
Telemetry System 505,000
Contingency 814,000
Total $15,000,000

City Funding Sources

Project 1. To pay for State Water Project facilities, the city initiated a 5.5% surcharge on monthly water usage bills in December 1985. There have been periodic increases in water rates.
(See Attachment 4) The actual amount generated from water rate payers in fiscal year (FY) 1993-94 was $7,475,162. In FY 94-95 it was $6,899,319. In FY 1995-96 revenue was $8,797,200, and projections for FY 1996-97 are for $10,636,720.

Project 2. Rather than participate in the bonds issued by CCWA, the city's CCWA portion was paid for out of Water Fund reserves, the Water Fund, and borrowed from other city funds:
Water Fund reserves $265,546
Water Fund 5,621,708
Borrowed:11
Mobile Equipment Fund 3,000,000
Workers Comp Fund 2,500,000
Fire Insurance Fund 500,000
Wastewater Fund 7,300,00 Total borrowed $13,300,000

Total $19,187,254
The interest has been paid on these borrowed funds quarterly since October of 1992, at a rate of from 4.3750% to 5.5175%. The loans are amortized over fifteen years and will be paid back by the Water Fund.12

The Water and Wastewater Funds were combined in Fiscal Year (FY) 95-96. Repayment of those funds began in July 1995, and interest has been paid quarterly through Sept. 30, 1996 at a rate of 5.6975% to 5.5700 %.13

Project 3. To pay for the local projects, the city sold Certificates of Participation (COPs) in the amount of $23,134,848.40. The local projects received $19,397,262.79; refinance of existing projects required $3,737,585.61.14

Part of the proceeds of the sale of these COPs was used to pay CCWA $1,470,000 for the city's additional 4900 AFY of entitlement to state water.

Interest payments on the COPs , which began in 1993, will be $909,919 annually until 2006.

They will then decrease until 2023 when the COPs will be paid off. These payments are offset by
earnings on the proceeds of the COPs. No principal is due until August 1, 1999, at which time the payments will increase to $1,402,388 until 2005, then will be approximately $1,405,000 depending on the coupon rate. The total debt service for the COPs will be $35,466,667.15

Revenue Sources

1. Development fees: Assembly Bill AB 1600 requires that public agencies meet certain criteria
when establishing a fee imposed on new development. The purpose and use of the fee must be identified. The use of the fee and the need for the public improvement must be related to the development. The city's AB 1600 fees are "growth mitigation fees,"16 and are to pay for the local water projects and costs related to the additional 4900 AFY. Since this entitlement was acquired to supply water to new development in areas annexed to the city, these fees will pay for
capital and fixed costs of the local transmission line, blending, and disinfection facilities; treatment plant costs; and for initial buy-in to acquire the rights to the 4900 AFY. The connection fee is based on the size of water meter needed for a single family dwelling unit, or equivalent. The connection fee will be required in all areas of the city, not just the annexation areas. The city anticipates revenue based on a growth rate of 2.5% a year.

2. Reimbursement fees are to reimburse the city 's Water Fund for "payments made on behalf of future users for construction of the State Water Aqueduct Phase II." This pays for capital and fixed costs billed by DWR and CCWA for the expenses of the 4900 AFY.17

3. Water rates are being paid by the city's residents for the city's costs for the original allotment of 11,300 AFY of State Water and the facilities to deliver the water to Santa Maria.

4. Sales of water to outside agencies is a line item in the budget which anticipates selling $2.5 to $4 million of water to some other water purveyor.

The Drought Buffer

When some water contractors in Santa Barbara County gave up their entitlements to state water, 3716 AFY of state water became available. CCWA staff brought this to the attention of the CCWA Board of Directors. The size of the Coastal Branch facilities had to be determined based on the flow of water. The capacity had been 59 cfs (cubic feet per second), which was rejected by DWR as being unacceptable because it did not include a 7.5% "outage factor," or additional capacity, for maintenance and downtime. If any of this newly available entitlement was going to be purchased by any of the remaining participants, a ten mile section of the pipeline had to be increased in diameter from forty-five inches to forty-eight inches to accommodate a capacity of 63 cfs. The cost was estimated at $2 million, plus an undetermined cost for pumping and treatment.June 30, 1993 was the deadline for notifying DWR of CCWA's required capacity, as well as the date the water entitlement sale offers would expire.18

According to a letter to CCWA from its attorney19, the drought buffer would serve two
purposes:

"(1) In years of drought, the additional entitlement would enable CCWA to secure deliveries of higher proportion of its full needs than would be the case without additional entitlement.
(2) In years of full SWP deliveries, the additional entitlement could be placed in a `water bank' for delivery in future years when supplies are reduced due to drought."

The CCWA participants would have the option to take any water "in excess of the amount stated in their Water Supply Agreements." The letter states that "Since the `drought buffer proposal'
results in no change in the contractual rights and obligations of the CCWA contractors, there is no legal requirement that a decision on the drought buffer must be presented to and approved by each of those participants."20

The purpose of this additional allotment was to increase the total entitlement overall. In times of drought, the State Water Project could not deliver the full entitlement. With the drought buffer, the reduced amount of water would at least be ten percent more than originally reserved. For example, if 75% of the original entitlement could be delivered, the drought buffer would provide an additional ten percent, or 7.5% more water, for a total of 82.5% of the original entitlement. The drought buffer would occur when there was no drought, and 110 % of the original entitlement would be available to be banked, or stored in reservoirs or in underground basins.

The cost of the drought buffer has been an issue of disagreement. There are two components associated with additional capital costs to the Coastal Branch. One involves increasing the diameter of the DWR portion of the pipeline from forty-five inches to forty-eight inches on a ten-mile section in the Cuesta Tunnel area. This resulted in an increase in the DWR project cost, with Santa Maria's annual assessment (based on fixed cost figures for 1997 and 1998) about $182,000 higher.21 The other has to do with pump sizing, with costs ranging from zero to $2 million. The additional 10% entitlement did not increase the CCWA fixed costs of the water treatment plant at Polonio Pass.

OBSERVATIONS

Santa Maria has increased its water entitlement in increments. The original entitlement was for 11,300 acre feet per year. With areas annexed into the city, it was determined that an additional 4900 AFY was needed. The drought buffer of 1620 AFY brought the city's total to 17,800 AFY.

When San Luis Obispo County, on March 25, 1993 reduced its share of State Water entitlement from 25,000 AFY to 4830 AFY, the costs of the project for the remaining participants went up accordingly.

Santa Maria's Position on the CCWA Board

Each member of CCWA is required to have a representative on the board of directors. The representative need not be an elected official. Since Santa Maria has 43.19% of the total water allotment, the city also has 43.19% of the voting power, and 43.19% of the financial obligations of CCWA's operating and maintenance costs. Administration costs budgeted for CCWA for Fiscal year (FY) 1996-97 are $1,226,204; operation and maintenance (O&M) costs are budgeted at $2,910,870, for a total of $4,137,074. Santa Maria must pay 43.19% of these costs.

Other members of the CCWA board can, and do, out-vote Santa Maria. For example, when the
city did not give its own city employees a raise, the CCWA board approved a 4% increase in pay for CCWA employees.

Currently there is discussion about purchasing the building in Buellton where CCWA now has its offices. The cost of leasing this building is approximately $70,000 a year. The Santa Maria City Council has discussed the possibility of having CCWA locate in Santa Maria where there are vacant buildings available. No matter where the CCWA board decides to locate the office, Santa Maria is obligated to pay 43.19% whether or not they vote to approve a new location.

Santa Maria's Contractual Obligations and Restrictions

The Water Supply Agreement between the city and CCWA:
· States that "such supply of water is interruptible".22
· CCWA has the right to fix charges to each contractor to produce revenue "equal to the amounts anticipated to be needed by the Authority (CCWA) to meet the costs" to deliver water.23
· The city is obligated to make payments to CCWA "whether or not water is furnished ...at all times or at all. "24
· If the project cannot be completed from proceeds of CCWA bonds (in which the city did not participate), "the contractor shall be obligated to advance...its pro rata share of the costs to
complete the project..." even though the city would be able to receive water through the
completed portion of the project. The CCWA would remain owner of the facilities.25
· If there is a shortage of water from the State Water Project, the delivery of water will be reduced to each contractor. Fixed operation and maintenance (O&M) costs must be paid by the city regardless of the amount of water actually delivered, plus variable O&M costs depending on the amount of water actually delivered. To secure the bonds sold by CCWA, the city is obligated to pay for fixed project costs, whether or not any water is delivered. Section 5(d)26 states that "such payments are not subject to any reduction...."
· Another part of the Water Supply Agreement, Section 20 (c) 27 states that the city cannot permit any competing water system within the city's boundaries.

The terms of this agreement obligate the city for 43.19% of the fixed costs and administration costs. There is no guarantee that water will be delivered, but the payments must be made.

City Council Attention to State Water Issues


Decisions by the city council regarding Santa Maria and State Water have been made at adjourned (postponed to another time or place) meetings, or have been delayed for several meetings. In other instances no action was taken by the city council on CCWA matters.

The decision to initiate the construction of the Coastal Branch of the State Water Project was made by the Santa Maria City Council at an adjourned meeting on April 10, 1991.28 No election was held in Santa Maria regarding whether or not to bring in state water, while thirteen water districts and cities in Santa Barbara County did hold elections in June of 1991.

When the drought buffer was being discussed by the CCWA board, the city council was presented with information about additional water being available. This was on the Consent Calendar of the March 16, 1993 agenda. This item was pulled for discussion on April 6, 1993. Due to the late hour after a long meeting, the item was continued to May 4, 1993. Meanwhile, on April 22, 1993 the CCWA board approved Resolution 93-09, requesting a total of 42,486 AFY (10% more) water entitlement from DWR.

At the city council meeting of May 4, 1993, the Director of Public Works gave a status report on the Coastal Branch and CCWA projects. Council Member Miyoshi questioned the CCWA board's authority to approve the increased entitlement without city council approval. Council Member Tunnell, the city's representative on the CCWA board at the time, reminded the council that the CCWA board had been making major decisions regarding expenditures of public funds and contractual obligations. Mr. Miyoshi stated that he did not like to see an agency that is not subject to veto powers by the city council obligate city residents to more financial responsibility. Mr. Miyoshi requested a legal opinion on CCWA's right to approve the 10% increase drought buffer. After discussion, a motion was passed to order the status report filed. 29

On May 21, 1993, the city staff mailed to council members a legal opinion from CCWA's attorney (May 10, 1993 letter quoted above) that stated the CCWA board had the authority to reserve the additional entitlement. In the same mailing, the staff asked for direction from the council members regarding any further questions or additional follow-up. No direction was given to staff at that time.30

At the CCWA board meeting of May 27, 1993, Resolution 93-11 was passed, which set the final entitlement at 42,486 AFY, and the pipeline capacity at 63 cfs. At this CCWA meeting, the city 's commitment and obligation for the additional 10% was made.

The decision on the drought buffer was made in 1993 by the CCWA board, with the city's representative voting to approve. A payment of $355,734.40 was made by the city on June 22, 1993 for their share of the entitlement.

Then on May 31, 1995, the City Attorney obtained an opinion from outside legal counsel regarding the legality of CCWA board action to purchase additional entitlement. In the attorney's opinion, the CCWA's authority was questionable, but the city and other CCWA members were obligated to pay for the additional costs for the drought buffer, since their payments were the only source of income to CCWA. However, the attorney advised that ownership of the entitlement should go to the member agencies.31

The ownership of the drought buffer entitlement was resolved when Resolution 96-07 was passed by the CCWA board on April 25, 1996, which states that "...the additional entitlement designated as the `drought buffer' will be allocated pro-rata among the CCWA contractors based on their respective contract entitlements."

In the March 7, 1995 update of the State Water Project prepared by city staff, the discussion and explanation of the SWP progress did not mention the city's 1620 AFY drought buffer entitlement or obligation.

The matter of State Water, CCWA and the drought buffer was brought up again late in 1996.32
A semi-annual payment of $5.4 million to CCWA for the city's share of DWR and CCWA fixed and variable costs was due in January, 1997.

Again, there was considerable delay by the city council in addressing this major financial obligation. Items to be considered were the CCWA's proposed purchase of the Buellton office building, and possible cancellation of the drought buffer. This was to be discussed on Oct. 22, 1996, then was deferred to Nov. 19. A comprehensive staff report was prepared. The length of the November 19 meeting caused the item to be continued to December 17, but at the Dec. 3 meeting, the city's CCWA representative asked that the item be continued to a January meeting when all council members would be present.33 The item was discussed at the January 7 meeting, questioning whether or not the city should pay its share of the drought buffer.

The city council meets every two weeks. City council members receive staff reports to keep them informed about the events regarding state water. When the CCWA board was deliberating the drought buffer in 1993, the Santa Maria City Council discussion on the drought buffer was delayed from one council meeting to another, with the final decision to file the report34 on the drought buffer, with no action having been taken. While the city council took no action, the CCWA board approved the drought buffer.

The review and challenge of the drought buffer in 1996 coincided with the realization of the higher financial impact on the city to pay for State Water.

Santa Maria's methods to pay for State Water

1. Developer fees
The city is depending on a growth rate of 2.5% a year to reimburse the city for expenses of the additional 4900 AFY acquired for the annexation area. However, the growth rate has been approximately 1.8% per year.35 The city's developer fees currently listed are lower than fees charged by other cities and districts attempting to pay for State Water. (See bar graph, Attachment 5) For example, a inch water meter fee is $218.39, typical for a single family residence (sfr). City connection fee for the same meter is $1,070.00. In Carpinteria, the "capital cost recovery" fee is $1841.58, plus meter hook-up fee. In Santa Barbara, the "buy-in" fee is $900 per sfr, plus $1442 for the meter. In the Goleta Valley Water District, the fee recommended by consultants is $7,145.

2. City Water Rates
Santa Maria rate payers have had annual increases in rates, which total approximately 15.5% per year: (See Rate Chart, Attachment 4)
· A 5.5% surcharge was added to monthly water bills at the December 3, 1985 city council meeting, to begin in Jan. 1986.36
· In December 1991 Resolution 91-198 was approved, to begin in February of 1992, to
continue for six years. A split rate system was initiated, with two tiers of rates.
Users of more water would be paying a higher rate, calculated to be a 5% increase.
· In February 1993, a third rate increase was approved, Resolution 93-20, with an additional 5% annual increase to continue for four years. The split billing resulted in four tiers, with rates from $.697 per 100 cubic feet of water, to $1.138. Tier increases began in July, 1993. The rates increase as amounts of water usage increases.

Historically, as rates increase, use of water typically decreases, and revenues will be lower. The city chose water usage in January as an example of a typical water bill. In July when water is used for outdoor purposes, the bills may be considerably higher.

3. Water Sales
The line item in the city budget called "Outside Agency Water Sales" is anticipated to generate $2.5 million in 1996-97, and $4 million in each of the next four years. Outside sales have been mentioned in regard to proposed development in Nipomo and in Orcutt, but as of this writing, no specific agreement has been reached. If outside sales do not materialize, the city must find other methods to generate needed revenue.

FINDINGS AND RECOMMENDATIONS

FINDING 1: In 1993, the Santa Maria City Council was presented with information when the drought buffer was proposed. The city council delayed and continued discussion or attention for several meetings, yet took no action. The decision on the drought buffer was made by default.

RECOMMENDATION 1: Given the magnitude of the city's obligations, city council members should place a higher priority on matters regarding CCWA and State Water.

AFFECTED AGENCY:

City Council of Santa Maria Response

FINDING 2: The Santa Maria City Council does not have a written policy which would provide guidelines to any city representative who serves on a board or commission which has the ability to make decisions having an impact on city finances

 

RECOMMENDATION 2: The Santa Maria City Council should adopt a written policy which provides guidelines for city representatives regarding financial impacts on the city.

AFFECTED AGENCY :

City Council of Santa Maria Response

FINDING 3: City developer fees are lower than developer fees charged by other State Water contractors in Santa Barbara County.

RECOMMENDATION 3: The Santa Maria City Council should review developer fees, and make adjustments so that new development pays for required costs as stated in the Water Management Report adopted by the city.

AFFECTED AGENCY:

City Council of Santa Maria Response

FINDING 4: The city has a line item in the budget that requires and anticipates the sale of $2.5 million to $4 million of water to outside agencies.

RECOMMENDATION 4: The Santa Maria City Council should actively pursue outside sales, or seek additional means of generating revenue for the Water Fund.

AFFECTED AGENCY:
City Council of Santa Maria Response

FINDING 5: The terms of the Water Supply Agreement between the City of Santa Maria and the Central Coast Water Authority have obligated the city to pay CCWA "whether or not water is furnishedat all times or at all."

RECOMMENDATION 5: The city should analyse the impact of reduced delivery of water, or of low water consumption, on water costs.

AFFECTED AGENCY:
City Council of Santa Maria Response


AFFECTED AGENCIES California Penal Code Section 933(c) requires that comments to Grand Jury Findings and Recommendations be made in writing to the presiding judge of the superior court within 60 days by all affected agencies except governing bodies, which are allowed 90 days. In accordance with Section 933.05, the responding person or entity shall indicate the following:

1. The respondent agrees with the finding.

2. The respondent disagrees wholly or partially with the finding, in which case the respondent shall specify the portion that is disputed, and include an explanation.

3 The recommendation has been implemented, with a summary of the implemented action.

4. The recommendation has not been implemented, but will be in the future, with a time frame.

5. The recommendation requires further analysis, with an explanation and a time frame. This time frame shall not exceed six months from the date of publication of the grand jury report.

6. The recommendation will not be implemented because it is not warranted or is not reasonable , with an explanation.

The Grand Jury requests that all responses be submitted on a 3 1/2 inch computer disk along with the printed response.

ATTACHMENT 1


CCWA Members and Organization

Members and voting percentages are as follows:
City of Buellton.....................................................2.21%
Carpinteria County Water District.......7.64%
Goleta Water District...........................................17.20%
City of Guadalupe..................................................1.15%
Montecito Water District...........................................9.50%
City of Santa Barbara...............................................11.47%
City of Santa Maria..................................................43.19%
Santa Ynez River Water Conservation District
Improvement District 1...................................7.64%




Source: CCWA Resolution 93-11, Exhibit "C" page 7, Council Agenda Report, November 19, 1996

ATTACHMENT 2

ATTACHMENT 3

Comparison of expense projections between 1993 and 1996

ATTACHMENT 5






ATTACHMENT 4

CITY OF SANTA MARIA

AVERAGE MONTHLY BILLS FOR 1500 CUBIC FEET37

RATE INCREASE PROPOSED FOR 2/16/93 & 7/1/93

WITH NO INCREASE IN METER CHARGE

MONTHLY WATER BILL BASED ON

DATE PERCENTAGE 1500 CUBIC FEET

$ 20.50

02/01/93 20.86

07/01/93 21.22

01/01/94 10.08% 23.36

07/01/94 5.00% 24.53

01/01/95 10.08% 27.00

07/01/95 5.00% 28.35

01/01/96 10.08% 31.21

07/01/06 5.00% 32.77

01/01/97 10.08% 36.07


APPENDIX

Time line of State Water Project events:

· 1947 -- California State Legislature directed a study and evaluation of water resources in the state, and a plan for "orderly development of these resources to meet the State's ultimate water requirements for beneficial purposes."38
· 1959 -- The Legislature adopted The California Water Plan.
· 1960 -- California voters approved statewide sale of $1.75 billion in bonds (the Burns-Porter Act), to pay for the construction of the State Water Facilities, which included the Coastal Branch.
· 1963 -- San Luis Obispo and Santa Barbara Counties' Flood Control and Water Conservation Districts signed Water Supply Contracts with the State DWR for entitlement to 25,000 and 57,700 AFY respectively. Both counties began to pay to hold their options to take state water.
· 1978 -- The City of Santa Maria initiated a five percent surcharge on utility bills for operation and maintenance expenses.
· 1983 -1986 --- Santa Barbara County (the District) "assigned its water rights under the State Water Project Contract" via the Water Supply Agreements that formalized the allotments of various water purveyors (cities and water districts).39
· April 1985 -- A study by DWR and the District found that Santa Barbara County was exceeding its dependable supply by about 65,000 AFY. This was revised to 53,000 AFY. The study concluded, "the most cost effective, best quality supplemental water supply for North Santa Barbara County was the State Water Project."40
· December 1985 -- Santa Maria City Council approved a resolution initiating a 5.5% annual surcharge on monthly water bills to begin financing the city's costs of the SWP facilities.41 This was the first of three annual increases in water rates. Subsequent increases of 5% in 1991 and 5% in 1993 resulted in annual increases of 15.5%. Each year the water rates are 15.5% higher than the previous year.
· 1989 -- Santa Barbara County's (the District's) entitlement rights and contractual rights were transferred to water purveyors (cities and water districts).
· February 1990 -- The city established a Water Advisory Committee to prepare a long-term water management plan, and to advise the city on water resource management. The committee report in March 1991 had these recommendations: (quote)
1. That the city obtain and use its SWP allotment of 11,300 AFY.
2. Obtain additional State Water if available to supply all of the city's needs by 1997-98, about 5,000 AFY.
3. If additional SW allotments become available, city should obtain more water for future growth.
4. Cost of State Water beyond 1991 should be paid for
by future water users via development fees or other appropriate funding.42
· April 10, 1991 -- City Council adopted Resolution 91-55 at an adjourned (postponed to another time or place) meeting, which gave notice of intent to request construction of the State Water Project, with 11,300 AFY entitlement. Deadline for determining participation in the project and sizing of the pipeline was Dec. 31, 1991.
· June 4, 1991 -- Advisory elections were held by 13 cities and water districts. Santa Maria did not hold an election.
· August 1, 1991 -- Central Coast Water Authority (CCWA) was formed. Members are public entities with taxing authority. Each member has a seat on the board of directors.
· August 6, 1991 -- City of Santa Maria joined CCWA. The city`s "voting percentage", as determined by water allotment share, is 43.19%. The city's percent of costs is also based on water allotment share.
· September 1991 -- City acquired additional 4900 AFY entitlement of State Water to serve areas annexed into the city. This entitlement and additional construction costs were estimated at that time to be $6,238,000.43
· March 25, 1993 -- San Luis Obispo County notified State DWR and CCWA that their water entitlement would be a total of 4830 AFY, instead of the 25,000 AFY that they had been reserving.44
· June 24, 1993 CCWA Board approved the drought buffer, an additional 3908 AFY, or 10%, of State Water entitlement.4