WATER MANAGEMENT & LONG RANGE PLANNING COMMITTEE AGENDA LETTER Secretary of the Board of Directors 4699 Hollister Avenue, Department Name: Water Supply & Goleta, CA 93110 Conservation (805) 879-4621 For Agenda Of: February 18, 2016 Estimated Time 15 minutes Continued Item: No If Yes, Date From: TO: Committee Members FROM: Department: Water Supply & Conservation Contact Info: Ryan Drake, Water Supply & Conservation Manager SUBJECT: Update on the Upper Santa Ynez River Operating Agreement (USYROA) and USBR Warren Act Contract Legal Concurrence: As to form: N/A Recommended Action: Receive an update on activities related to the Upper Santa Ynez River Operating Agreement (USYROA) and ongoing negotiations between the City of Santa Barbara and the United States Bureau of Reclamation (USBR), and provide direction to staff as appropriate. Summary Text: Historical Background on USYROA On August 1, 1989, the City of Santa Barbara (City) entered into the USYROA with the Downstream Purveyors1 on the Santa Ynez River, including Goleta Water District. The USBR signed an associated Consent and Acknowledgment document attesting that the USYROA was consistent with agreements related to the Cachuma Project, and would not adversely affect the financial obligations of the Cachuma Member Units with respect to the Cachuma Project. USYROA, which is also known as the “Pass Through Agreement,” was developed as a compromise solution to resolve concerns related to City plan to raise Gibraltar Dam in the mid-1980s for expansion of the diminishing capacity of Gibraltar Reservoir as a result of ongoing siltation. The Cachuma Member Units and downstream water rights holders raised concerns that enlarging Gibraltar would have 1 The Downstream Water Purveyors include Goleta Water District, Carpinteria Valley Water District, Montecito Water District, Summerland County Water District (since consolidated with the Montecito Water District), the Santa Ynez River Water Conservation District, and the Santa Ynez River Water Conservation District Improvement District No. 1. ITEM 6 PAGE 1 WMLRP Committee February 18, 2016 Agenda Page 2 of 4 an adverse impact on downstream users and diminish the natural flow of the Santa Ynez River, along with additional environmental concerns. USYROA enacted a compromise solution that recognizes the Gibraltar water rights of the City while deferring a dam enlargement project. For background purposes, USYROA specifically: • Identifies the City right to divert a maximum of 7,278 acre feet per year (AFY) of Gibraltar Reservoir Water. This is made up of 4,189 AFY from ordinary flow and 3,089 AFY from flood flows. The Agreement considers this the “Base Operation” scenario.2 • Recognizes that without enlarging Gibraltar Dam, the City is unlikely to divert its full entitlement through Mission Tunnel on a regular basis, due to siltation. Therefore, the USYROA establishes two operating modes for the City to use its Gibraltar Reservoir supplies: 1) Mitigation Operations, and 2) Pass-Through Operations. 1) Mitigation Operations enables the City to divert up to 8,000 AFY through Mission Tunnel, but the City is required to mitigate the effects of this diversion on Cachuma by giving up a portion of its Cachuma Project entitlement when diversions exceed 4,550 acre-feet in a given year. The City is currently operating under the Mitigation Operations scenario and has been required to “mitigate” 67 AFY from 1991-2008. Since 2008, mitigating actions have not been necessary as diversions through Mission Tunnel have remained below the 4,550 AFY threshold. 2) Pass-Through Operations allow the City to divert water through Mission Tunnel and pass- through water for storage in Lake Cachuma. The water is held in a Lake Cachuma Pass-Through Account for future City use, in addition to the City Cachuma Project entitlement water. Under this mode of operations, the City is required to forego a portion of its Cachuma Project entitlement when diversions through the Mission Tunnel and water accrued in the Lake Cachuma Pass Through Account exceed Base Operations diversions, or 7,278 AFY. USYROA enables the City to implement Pass-Through Operations when a significant event, such as extreme siltation, reduces the storage capacity of Gibraltar by at least 1,000 acre-feet. Since such extreme siltation has occurred, as discussed below, the City will be implementing Pass-Through Operations. • Establishes a Technical Committee for USYROA administration. The Technical Committee is tasked with resolving USYROA implementation issues and reviewing operational data. The Technical Committee is comprised of the City, USBR, the Santa Ynez River Water Conservation District (SYRWCD), and one representative selected jointly by Goleta, Montecito, and Carpinteria Water Districts. Montecito Water District General Manager Tom Mosby currently holds this seat on the Committee. Warren Act Contract Requirement and Current Status of Environmental Review The siltation of Gibraltar following the 2007 Zaca Fire resulted in loss of approximately 1,500 acre feet of capacity in the reservoir, and Gibraltar ended the 2013-14 year at 8 percent of capacity. Accordingly, the City initiated the transition from Mitigation to Pass-Through Operations under the parameters of USYROA and began the process for establishing a Warren Act Contract with USBR. Under federal 2 The “Gin Chow” Judgment, which resulted from litigation that followed the construction of Gibraltar, quantified the City’s water rights by identifying normal flows and spill flows that the City is entitled to use. Gin Chow also requires the City to release water from Gibraltar for downstream riparian users. ITEM 6 PAGE 2 WMLRP Committee February 18, 2016 Agenda Page 3 of 4 law, a Warren Act Contract is required for the conveyance and storage of non-project water in a federal facility. Initiation of a Warren Act Contract is an action that triggers environmental review under both the National Environmental Policy Act (NEPA) and the California Environmental Quality Act (CEQA). As part of the environmental review preparation, the City finalized the Hydrologic Analysis of the Pass Through Operations at Gibraltar Reservoir Report in August 2013. The Report analyzed the hydrologic effects of implementing Pass Through Operations using the Santa Ynez River Riverware Model (SYRRM) and the Santa Ynez River Hydrology Model (SYRHM). The City worked cooperatively with the USBR to prepare the environmental assessment (EA) on the proposed Warren Act Contract needed to store Pass Through water in Lake Cachuma, pursuant to NEPA requirements. USBR previously indicated a draft EA would be available for review by the USYROA Technical Committee in early October 2013; however, USBR and the City hoped to have a draft water rights order for the Cachuma Project released by the State Water Resources Control Board (State Water Board) prior to release of the draft EA. While the water rights order from the State Water Board has been delayed until at least April of 2016, USBR decided to release a Draft Finding of No Significant Impact to the Storage and Conveyance of the City of Santa Barbara’s Gibraltar Reservoir Pass Through Water in and Through Cachuma Project Facilities (FONSI 12-086) on January 12, 2016. The City of Santa Barbara distributed a letter update on the status of the City’s efforts to implement Pass Through Operations on January 13, 2016. In that letter, the City stated that it believed the requirements of CEQA have already been met as to the execution and implementation of the Pass Through Agreement, including Warren Act contract execution, since the City filed a Notice of Exemption in July of 1989, when the agreement was executed. The City also stated its intent to coordinate an “interim arrangement” by which water would be transferred in Lake Cachuma from the various parties to the agreement to the City in the event the necessary Warren Act contract is not yet in place by the time a Pass Through condition occurs. In response, the District sent a letter (Attachment 1) reiterating concerns with the Draft EA, and noting the requirement for the parties to meet and negotiate in good faith before any operational changes are made prior to a Warren Act Contract being in place. After review of the Draft EA and as reported in previous updates to the Committee, there are several outstanding issues of interest to the District that remain unaddressed, including: • Financial arrangements related to storage and delivery of non-federal City water in Lake Cachuma and through the Tecolote Tunnel, South Coast Conduit, and related facilities. • Impacts of the storage and delivery of the non-federal City water on the regional infrastructure capacity and how those impacts are accounted for. • Impacts related to critical drought operations for Lake Cachuma and other cumulative impacts. Many of these concerns have been raised in prior comments before the USYROA Technical Committee, including at the meeting of May 29, 2015, and via a formal comment letter from the District to the City of Santa Barbara Public Works Department dated January 24, 2012 (Attachment 2). The District has made these concerns clear via a comment letter submitted ahead of the February 11, 2016 deadline for comments on the Draft EA (Attachment 3). Critically, the District believes the issue ITEM 6 PAGE 3 WMLRP Committee February 18, 2016 Agenda Page 4 of 4 of cost contribution by the City for use of Cachuma Project infrastructure for transmittal of non-Project water from Gibraltar must be resolved prior to the City finalizing Pass Through Operations. The District will continue to work with the City, USBR, and the other Cachuma Member Units to develop the procedures and policies needed to address these issues prior to implementation of Pass Through operations. Background: Gibraltar Dam and Reservoir, located in the Santa Ynez River watershed upstream from Lake Cachuma, was built by the City in 1920 expanded in 1949. Water supplies from the Reservoir make up approximately one-third of the City water supply portfolio.