REPORT TO THE CITY COUNCIL
FROM: PAUL AMICO, PE, Director
Department of Public Utilities
BY: DEJAN PAVIC, PE, Licensed Engineer Manager
Department of Public Utilities - Administration
SUBJECT
Title
Actions pertaining to receiving Unreleased Restoration Flows from Millerton Lake:
1. Adopt a finding of statutory exemption pursuant to the California Environmental Quality Act Guidelines Section 15282(u).
2. ***RESOLUTION - Authorizing the Director of Public Utilities to Execute a Sales Agreement for the future Sale of Unreleased Restoration Flows with the United States Department of the Interior, Bureau of Reclamation, and to Purchase Unreleased Restoration Flows from Millerton Lake through February 29, 2028, at Prices to be Determined by the Bureau of Reclamation in Accordance with the Sales Agreement. (Citywide) (Subject to Mayor’s Veto)
Body
RECOMMENDATION
The Administration and the Department of Public Utilities (DPU) recommend that Council adopt a finding of a statutory exemption pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15282(u), and adopt a resolution authorizing the Director of Public Utilities to execute a Sales Agreement for the Sale of Unreleased Restoration Flows (URFs) with the United States Department of the Interior, Bureau of Reclamation (Bureau), and to purchase URFs from Millerton Lake through February 29, 2028, at prices to be determined by the Bureau of Reclamation in accordance with the Sales Agreement.
EXECUTIVE SUMMARY
Depending upon precipitation and hydrology, the Bureau’s San Joaquin River Restoration Program (SJRRP) Administrator may announce the availability of additional water supply from Millerton Lake through URFs. Each year the SJRRP Administrator determines the water supply required to accommodate SJRRP demands; and if all of the water allocated to the SJRRP is not required to meet the demands, then the SJRRP Administrator may issue a declaration announcing that URFs may be released to Friant Division Contractors from Millerton Lake. The URF program is authorized through February 29, 2028. The City has requested URFs in past Water Years and each year will request URFs if they are needed and would be beneficial to the City. The ability to purchase any URFs is dependent upon execution of this agreement.
This authority granted in the Resolution is required by the Bureau for the City to accept URFs. The Administration recommends that the City Council adopt the attached Resolution to authorize the Director of Public Utilities to execute a Sales Agreement for the Sale of Unreleased Restoration Flows (URFs) with the United States Department of the Interior, Bureau of Reclamation (Bureau), and to purchase URFs from Millerton Lake through February 29, 2028, at prices to be determined by the Bureau of Reclamation in accordance with the Sales Agreement. For the current Water Year, the City will purchase URFs at the prices identified in Exhibit C of the attached Sales Agreement. URFs are a type of water supply incorporated into the City’s 9D contract which has been approved previously by the City Council.
BACKGROUND
On December 22, 2010, the City entered into a contract (9D Contract) with the Bureau providing for a Class 1 allocation of Central Valley Project (CVP) Water (Project Water) from Millerton Lake. In accordance with the 9D Contract, on an annual basis the USBR shall make available for delivery to the City 60,000 acre-feet of Class 1 water for municipal and industrial purposes, subject to the terms and conditions of the 9D Contract and regional hydrologic conditions. The Bureau’s water year for Millerton Lake operations runs from March 1 to February 28 each year.
On or about February 20 of each year, the 9D Contract requires the Bureau to announce an initial declaration of Project Water to be made available to the City and other Friant Division Contractors. The annual declaration can be adjusted during the year depending upon CVP operational conditions and regional hydrologic conditions. Once the annual declaration is made, the 9D Contract requires the City to submit to the Bureau a written schedule defining when the City will take delivery of surface water from Millerton Lake. The 9D Contract requires the City to submit its delivery schedule by March 1 of each year.
One of the features of the City’s 9D Contract is the ability for the City to purchase additional types of water supply from Millerton Lake when such additional types of water supply are available. Additional types of water supply referenced in the City’s 9D contract include: 215 Releases (non-storable flood flows), Uncontrolled Season Releases (i.e. preemptive flood-releases), Recirculated Water Flows, Recovered Water Flows (RWF), and Unreleased Restoration Flows (the URFs at issue). While all of these types of water supply are incorporated into the City’s 9D contract that has been approved by the City Council, the Bureau requests that Council adopt a resolution of intent to make payment for these additional types of water supply from Millerton Lake when they are available and if the City elects to purchase them.
The Administration recommends that Council approve the attached Resolution to authorize the Director of Public Utilities to execute a Sales Agreement for the Sale of URFs, and to purchase URFs from Millerton Lake through February 29, 2028, at prices to be determined by the Bureau in accordance with the Sales Agreement. The URF Agreement has been reviewed and approved as to form by the City Attorney’s Office.
ENVIRONMENTAL FINDINGS
Staff has performed a preliminary environmental assessment of this project and has determined that it falls within the Statutory Exemption set forth in CEQA Guideline Section 15282(u), which exempts temporary changes in the point of diversion, place of use, or purpose of use due to a transfer or exchange of water or water rights as set forth in Section 1729 of the Water Code.
The City’s acquisition of Unreleased Restoration Flows (URFs) qualifies for this exemption because the transaction involves a temporary change in the delivery and use of water originating from Millerton Lake, consistent with federal and state water-transfer regulations. URFs are made available only when the San Joaquin River Restoration Program Administrator determines that Restoration Flow obligations have been met and that additional water remains available for release to the Friant Division Contractors. Therefore, these flows represent surplus water beyond that needed to meet environmental restoration requirements. The proposed action consists solely of authorizing the City to purchase and take delivery of these temporary water supplies through its existing 9D Contract and does not involve any physical construction or modification of facilities.
Although the Project is statutorily exempt under CEQA Guidelines 15282(u), staff reviewed the potential environmental considerations related to the source area, conveyance system, and receiving area. URFS are only released when surplus water exists beyond the needs of the San Joaquin River Restoration Program. Water is conveyed through existing infrastructure and delivered to existing municipals systems without construction, land disturbance, or additional environmental impacts. The City already treats and distributes Central Valley Project (CVP) Class 1 water under its 9D Contract. Receiving URFs does not alter treatment process, does not require new facilities, and does not expand service areas.
LOCAL PREFERENCE
Local preference was not implemented because this action does not include a bid or award of a construction or services contract.
FISCAL IMPACT
There is no impact to the General Fund or other City debt service obligations for this surface water purchase. The funding source for this surface water purchase will be the DPU Water Division Enterprise Fund. For Fiscal Year 2026, the Water Division allocated $3,681,600 in the appropriated budget for water supply purchases from USBR, including the purchase of 215, URF, Uncontrolled Season, and Recirculated Water, if those water supplies become available. For subsequent fiscal years, the Water Division will allocate funds for URFs and other water supplies if they become available.
Attachments:
Resolution & Agreement No. 24-WC-20-6209
Environmental Assessment