Item Coversheet

STAFF REPORT - CITY COUNCIL/SUCCESSOR AGENCY/PUBLIC FINANCE AUTHORITY

Subject:Approval of Resolution No. 3892 Authorizing an Agreement with the USBR to Purchase Discounted Water Supply
Meeting Date:March 21, 2019
From:Marissa Trejo, City Manager
Prepared by:Pete Preciado, Public Works & Utilities Director


I.    RECOMMENDATION:

City Council is hereby recommended to authorize the City Manager to execute an agreement with the USBR to purchase discounted water supply.




II.    BACKGROUND:

The wet winter has resulted in discounted water being available from the USBR in lieu of long-term contracted water.  This water is called “Section 215” water.  The following is the explanation of Section 215 water from the USBR.

 

Section 215 of the Reclamation Reform Act, Public Law 97-293 authorizes the Bureau of Reclamation (Reclamation) to provide temporary water service contracts (215 contracts) for unstorable flood flows (Section 215 water) as a result of (1) an unusually large water supply not otherwise storable for Project purposes; or (2) infrequent and otherwise unmanaged flood flows of short duration.




III.   DISCUSSION:

This is a relatively short-term opportunity with no downside to the City, except that a contract must be signed with USBR.  The single issue is that the Section 215 rate payments do not include a deficit component included in the purchase of standard water; however the deficit component is included in the cost comparison.  This water can also be used for sale to Harris Feed Lot and to the Pleasant Valley Water Conveyance Partners.




IV.   ALTERNATIVES:

The alternative is to continue purchases under the standard rates on the existing USBR interim agreement.




V.    FISCAL IMPACT:

Based on an analysis of total costs for standard contract water versus total costs for Section 215 water, the cost reduction for Section 215 water is approximately $43 per acre foot (AF).   Assuming projected purchases are 500 acre-feet during availability of the water, the cost savings to the city would be $21,500, making the effort to execute worthwhile.  Additional margin will be achieved to the extent this water is purchased by our wholesale customers, Harris Feeding Company and Pleasant Valley Water Conveyance Partners.


ATTACHMENTS:
File NameDescription
215_SOD_Section_215_2-19-19_Draft_Template.pdf215 SOD Section 215-2-19-19 Draft Template
RESO#3892_USBR_Agr_for_Discounted_Water_(215_Water)_032119.pdfResolution No. 3892