DELTA CONVEYANCE UPDATE: Valley Water board ponders their participation level, discusses an Delta conveyance environmental stakeholder committee

At the August meeting of the Board of Directors of Valley Water (formerly the Santa Clara Valley Water District), staff updated the board of directors on the status of the Delta conveyance project and the negotiations for the State Water Project contract amendment.  Board members also discussed their participation level in the Delta conveyance project and the importance of public engagement.  But first, the Board heard from Kathryn Mellon, the Executive Director of the Delta Conveyance, Design, and Construction Authority.

UPDATE ON THE DELTA CONVEYANCE DESIGN AND CONSTRUCTION AUTHORITY

The agenda item began with a brief presentation by Kathryn Mallon, the Executive Director of the Delta Conveyance Design and Construction Authority (or DCA), who spoke briefly about her experience and background and gave a brief update on the activities of the Authority.

Ms. Mallon began her engineering career in California in 1991, working in water treatment study and design work.  She next began managing projects, and as she gained experience, the size of the projects she managed grew.  For the past 13 years, she has worked on large programs and enjoys the wide breadth of perspective that managing large programs entail as well as typically the high stakes and public optics on success.  Some of these projects include the Williamette Water Plant outside of Portland, Oregon; the Delaware Aqueduct Bypass Project in New York; and the Emergency Housing Recovery Program after Hurricane Sandy.

This program is the ultimate in program management,” she said.  “It’s incredibly important project for the State of California and it has a significant set of stakeholders and permitting challenges that reflect its complexity and its scale.”

The core mission of the Authority will be to deliver engineering and public engagement support to the DWR planning team in the immediate future.  The DCA recently received approval for close to $100 million in the upcoming year for engineering and field investigation work.  Ms. Mallon noted that this is more money than has been spent on the engineering work in the past ten years of the project, and that reflects a commitment by the participating state water contractors to ensure a thorough engineering analysis of each of the alternatives that evolve from the new environmental planning process.

They anticipate that a Notice of Preparation will be issued before the end of the year, followed by scoping, with the alternatives and concept engineering expected to begin in the spring of next year.  There could be a draft EIR possibly by the spring of 2021.

The organizational structure for the Authority has been finalized and most of the positions for both interim and permanent staff have been selected.  There’s a significant amount of foundational work to do for the alternatives analysis and they are launching that work right now.

Ms. Mallon closed by saying that they will be focused on safety, meeting budget and schedule commitments, tracking all expenditures, and respecting the Delta and the people who live there.

DELTA CONVEYANCE UPDATE

Cindy Kao, Imported Water Manager, then gave an update on the Delta Conveyance project and the negotiations to amend the State Water Project contracts to include a Delta conveyance facility proposed by the Governor.

It’s important to note that Valley Water District finds itself in an interesting and unique position, being both a State Water Project contractor and a Central Valley Project contractor; there’s even a portion of their service area that receives supplies from the Hetch Hetchy project.

BACKGROUND AND HISTORY

In October of 2017, the Board held a special work study session on the California Water Fix in which the Board adopted guiding principles for participation and expressed conditional support for the project.  In May of 2018, the Board held two special workshops on the California Water Fix where the Board approved participation in the project at our standard participation level on the state’s side of 2.5% as well as participating as a Central Valley Project contractor by purchasing up to 200 cfs of capacity on the Central Valley Project side.

This year, Governor Newsom in his State of the State address said his administration would be supporting a single tunnel instead of twin tunnels as part of a new proposed Delta conveyance project, and he directed state resource agencies to prepare a water resilience portfolio that will assess current planning to modernize conveyance through the Delta with a new single tunnel project.  DWR responded in early May be rescinding all permits, permit applications, bond authorizations, and CEQA determinations related to Water Fix and announcing that its working with public water agencies to begin a new review and planning process.

During numerous meetings leading up to this Board’s decision on the California Water Fix last year, staff and invited guests presented information showing how Valley Water’s imported supplies are projected to decline over time if no action was taken and how climate change, sea level rise, and seismicity further threaten the reliability of our supplies,” Ms. Kao said.  “Now these concerns are still valid today, and they are reinforced by recent reports such as the report from the Ocean Protection Council from 2018 on sea level rise and the 2016 USGS report on seismic risk in the Bay Area.  The state continues to recognize these risks as key drivers for a new proposed Delta conveyance project and a single tunnel project is recognized as a key component of the Governor’s water resilience portfolio.”

DELTA CONVEYANCE PROJECT SCHEDULE

The state and water agencies are currently in public negotiations to develop a methodology for cost allocation and administrative accounting procedures for possible operations and an Agreement In Principle probably by the end of this summer.  At that time, a Notice of Preparation for an EIR will then be developed and the environmental review process will kick off in the fall and is expected to take two and a half years, complete by 2022.  The EIR will look at Delta conveyance alternatives, possible sizes, operations, and water supply deliveries and potential impacts.  In parallel, the DCA will lead the engineering design effort as well as communication and outreach efforts.

STATE WATER CONTRACT NEGOTIATIONS AND VALLEY WATER’S PARTICIPATION LEVEL

The State Water Project contract amendment negotiations have been going on for the past few years.  Last year, negotiations to amend the State Water Project contract to include the Water Fix were completed in the first half of the year, but since the state rescinded the Water Fix project, there was a subsequent negotiation in May to remove the Water Fix from the Agreement In Principles.  So the contract amendment that was negotiated last year is now focused on water management flexibility only; it does not include reference to the Water Fix or new Delta conveyance, Ms. Kao said.

Instead, a new and separate contract amendment negotiation effort to include the Governor’s proposed Delta conveyance project was kicked off last month.  Water agencies have proposed an opt-in approach where water agencies can choose whether or not they want to participate in the proposed Delta conveyance project.  The hope is that through these negotiations, a conceptual approach for cost accounting and administrative procedures for possible operations can be developed, as well as a robust dispute resolution process.

The water agencies included in their first offer to DWR an empty table of participation levels for each water agency, but the expectation is that by the end of the negotiations, the table will be populated with preliminary levels of participation from each agency that will be incorporated into the Agreements in Principle.

Valley Water staff has been considering possible preliminary participation levels in the proposed project.  Ms. Kao noted that there currently is no available Central Valley Project participation approach and very little interest has been shown by other Central Valley Project contractors.  Valley Water staff anticipates that there could be some improvement of reliability of Central Valley Project supplies by participating in the state project.

Our State Water Project contract does allow for wheeling of non-state supplies through state facilities; so as a State Water Project contractor, we would be able to wheel our CVP supplies through a Delta conveyance project,” she said.  “However, whether or not we can receive a Central Valley Project water supply increment to offset any declines over the future remains to be seen.  There’s a lot of uncertainty associated with that.  So staff has therefore looked at the feasibility of participating at a higher level on the State Water Project side to offset the projected declines in both State Water Project and Central Valley Project supplies over time.”

Staff analysis has been challenging as the project doesn’t even have a size identified, so staff looked at the 2018 evaluation of Water Fix and what other information is available, and staff is estimating that if Valley Water participates at 340 cfs and if operations are similar to what has been projected in the past, that investment could potentially offset both State Water Project and CVP declines in water supply over time.  Ms. Kao reiterated that it’s a hypothetical estimate and will need to be confirmed with available information in the future.

There would be little in the way to prevent Valley Water from decreasing its participation level after CEQA is completed,” she said.  “However, if we go in low, it could be difficult to increase our participation level if the project is fully subscribed.”

Staff is asking that the Board approve a preliminary participation level at up to 340 cfs to help guide staff in contract amendment negotiations; the Board then discussed participation levels.  Director Tony Estremera pointed out that the water supplies from the State Water Project and the Central Valley Project are their lowest cost water supplies, so it’s important for maintaining reasonable rates for their customers.  Director Gary Kremen agreed, noting that there’s a social justice issue; water rates have been increasing at twice the rate of electricity and that’s a challenge for disadvantaged communities.  Chair Linda LeZotte noted the consensus among board members for 340 cfs participation level.

The Board members then took public comment; there were five speakers representing water retailers and business interests, all expressing support for participation in the Delta conveyance project.

GARAMENDI’S PROPOSAL

Chair LeZotte then notes that the staff report states that the engineering team is investigating the feasibility of an alternative proposal by Congressman Garamendi.  What’s being looked at?

Delta Conveyance Authority Executive Director explains that Congressman Garamendi sent a letter to the Governor which then made its way down to the DCA.  “Whether it turns up as an alternative in the assessment or not, we don’t know, but we can certainly collect existing information related to that alternative so should it turn up, we’re a step ahead,” she said.  “That’s what we’re doing right now.  It revolves around intakes along the ship channel, rather than along the Sacramento River where the proposed intakes were in the previous process.”

AN ENVIRONMENTAL COMMITTEE FOR THE PROJECT

Chair LeZotte said that it was her understanding that there would be an environmental committee to ensure that mitigation and the coequal goals are achieved.  “The worst entity in the world to look at environmental mitigation and to make sure that it’s ongoing is the government,” she said.  “There needs to be, in my mind, a committee of scientists and environmentalists and some elected.”

Ms. Mallon acknowledged that Director Tony Estremera (who is also the President of the Delta Conveyance Design and Construction Authority (DCA)) did bring up the formation of an environmental subcommittee.  “Because the DCA has a board and we hold monthly meetings and this subcommittee had predated this transition, there was an idea that this would be a great forum for this range of stakeholders with a variety of interests and expertise to create a formal practice for documenting input on the program,” she said.  “We are hoping at the next DCA board meeting, we can provide some structure around what that might look like.”

Director Tony Estremera said they hope to have the process laid out by September or October.  The public would apply for the positions and the DCA board will make appointments.  They are considering how many people would be seated, probably 12 to 15 members.

Director Gary Kremen then presented a draft discussion document for the Board which was some changes to the previous board resolution on the California Water Fix.  He pointed out that the Governor took Valley Water’s suggestion for a smaller one-tunnel project.  “We were actually able to move the Governor to see it our way,” he said.  “And we’re only 2.7% of the Central Valley Project and the State Water Project, but we were able to get leadership as we talked about before, with Director Estremera and Director Keegan, and in fact Director Estremera is the Chair of the Construction Authority, we were able to get some governance done there.”

Director Kremen then discussed his draft resolution, which he worked on with Director Estremera and Director Keegan.  The resolution adopted for California Water Fix project in 2018 had seven guiding principles; they have added an eighth principle that focuses on the importance of engagement and are suggesting other changes.

Notable changes include specifying that those agencies that pay less for the project cannot have the same benefits as those who pay the full price; specifying support for only a single tunnel project, and that since there isn’t a way for Central Valley Project users to participate, Valley Water should take any additional water or capacity that might come available.

The new, eighth principle says that it’s mandatory to have public engagement and to work with Delta communities.  Director Keegan said the public process is so important, they felt it deserved its own guiding principle.

In the Bay Area, we’re not that far from the Delta,” she said.  “I think that most of us that live in this community have connections with the Delta.  They’ve been there for the recreational opportunities or they may have family members there, so any impacts to the Delta itself doesn’t just affect that particular area, it affects people all throughout northern California.  That’s why it’s so critical to really be engaging the public because any impacts there are going to have ripple effects that will come all the way down to our county and affect us.  It’s not just the right thing to do, but it’s also something that’s a direct benefit to our constituents in our community, so thank you Director Kremen for explicitly calling that out.”

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