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HomeMy WebLinkAboutReso - CC - 009-2011RESOLUTION NO. 9-2011 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME APPROVING TIER 2 DROUGHT IMPLEMENTATION PLAN PURSUANT TO SECTION 3.11.0 OF THE WATER SUPPLY AGREEMENT WITH THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION WHEREAS, The City of Burlingame is one of 26 agencies in San Mateo, Santa Clara and Alameda Counties which purchase water from the City and County of San Francisco (San Francisco) pursuant to a Water Supply Agreement entered into in 2009 (Agreement); collectively these 26 agencies are referred to in the Agreement as Wholesale Customers; and WHEREAS, Section 3.11 of the Agreement addresses times when insufficient water is available in the San Francisco Regional Water System to meet the full demands of all users; Section 3.1 LC provides that during periods of water shortage caused by drought, the San Francisco Public Utilities Commission (SFPUC) will allocate available water between its retail customers and the Wholesale Customers collectively, in accordance with a schedule contained in the Water Shortage Allocation Plan set forth in Attachment H to the Agreement (Tier 1 Plan); and WHEREAS, Section 3.1 LC authorizes the Wholesale Customers to adopt a Drought Allocation Plan, including a methodology for allocating the water which is collectively available to the 26 Wholesale Customers among each individual Wholesale Customer (Tier 2 Plan) and section 3.1 LC also commits the SFPUC to honor allocations of water unanimously agreed to by all Wholesale Customers or, if unanimous agreement cannot be achieved, water allocations that have been adopted by the Board of Directors of the Bay Area Water Supply and Conservation Agency (BAWSCA); additionally, the Agreement provides that the SFPUC can allocate water supplies as necessary during a water shortage emergency if no agreed upon plan for water allocation has been adopted by the 26 Wholesale Customers or the BAWSCA Board of Directors; and WHEREAS, commencing in October 2009, representatives appointed by the managers of each of the Wholesale Customers have been meeting to develop a set of principles to serve as guidelines for an equitable allocation methodology, as well as formulas and procedures, to implement those principles; these discussions, and supporting technical analyses, have been conducted with the assistance of BAWSCA staff; and WHEREAS, the Tier 2 Plan, attached to this resolution as Exhibit A, has been endorsed by all of the Wholesale Customer representatives who participated in the formulation process and they have committed to recommend that it be formally adopted by the governing body of their respective agencies; and WHEREAS, the Tier 2 Plan allocates the collective Wholesale Customer share among each of the 26 wholesale customers through December 31, 2018 to coincide with San Francisco's deferral of decisions about additional water supply until at least 2018; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Burlingame as follows: 1. All of the above -stated facts and those contained in the staff report are true and correct. 2. The Tier 2 Drought Implementation Plan, a copy of which is attached hereto as Exhibit A, is approved. 3. This approval is conditioned upon all of the other 25 Wholesale Customers approving the Plan, such approvals being evidenced through adoption of similar resolutions or, in the case of private -sector organizations, by other equivalently binding written commitments signed by an executive officer acting within the scope of delegated authority, and all such approvals occurring on or before June 30, 2011. 4. If the other 25 Wholesale Customers do not adopt resolutions or binding commitments by June 30, 2011, this resolution will automatically expire and be of no further effect after June 30, 2011, unless it has been extended prior thereto by further action of this Council. Terry Nagef, Mayor I, Mary Ellen Kearney, City Clerk of the City of Burlingame do hereby certify that the foregoing Resolution was introduced at a regular meeting of the City Council on the 7th day of February, 2011, and was adopted thereafter by the following vote: AYES: Councilmembers:BAYLOCK,BROWNRIGG, DEAL, KEIGHRAN, NAGEL NOES: Councilmembers: NONE ABSENT: Councilmembers:NONE Y)pq G Mary Ellen Kearney, City Clerk EXHIBIT A TIER 2 DROUGHT IMPLEMENTATION PLAN AMONG WHOLESALE CUSTOMERS This Tier 2 Drought Implementation (Plan) describes the method for allocating the water made available by the San Francisco Public Utilities Commission (SFPUC) among the Wholesale Customers during shortages caused by drought. This Plan is adopted pursuant to Section 3.11.0 of the July 2009 Water Supply Agreement between the City and County of San Francisco and the Wholesale Customers (Agreement). SECTION 1. APPLICABILITY AND INTEGRATION Section 1.1 Applicability. This Plan applies when, and only when, the SFPUC determines that a system -wide water shortage of 20 percent or less exists, as set forth in a declaration of water shortage emergency adopted by the SFPUC pursuant to California Water Code Sections 350 et seq. This Plan applies only to water acquired and distributed by the SFPUC to the Wholesale Customers and has no effect on water obtained by a Wholesale Customer from any source other than the SFPUC. Section 1.2 Integration with Tier 1 Water Shortage Allocation Plan. The Agreement contains, in Attachment H, a Water Shortage Allocation Plan which, among other things, (a) provides for the allocation by the SFPUC of water between Direct City Water Users (e.g., retail water customers within the City and County of San Francisco) and the Wholesale Customers collectively during system -wide water shortages of 20 percent or less, (b) contemplates the adoption by the Wholesale Customers of this Plan for allocation of the water made available to Wholesale Customers collectively among the 26 individual Wholesale Customers, (c) commits the SFPUC to implement this Plan, and (d) provides for the transfer of both banked water and shortage allocations between and among the Wholesale Customers and commits the SFPUC to implement such transfers. That plan is referred to as the Tier 1 Plan. The Tier 1 Plan also provides the methodology for determining the Overall Average Wholesale Customer Reduction, expressed as a percentage cutback from prior yea's normal SFPUC purchases, and Overall Wholesale Customer Allocation, in million gallons per day, both of which are used in determining the Final Allocation Factor for each Wholesale Customer. The Overall Average Wholesale Customer Reduction is determined by dividing the volume of water available to the Wholesale Customers (the Overall Wholesale Customer Allocation), shown as a share of available water in Section 2 of the Tier 1 Plan, by the prior year's normal total Wholesale Customers SFPUC purchases and subtracting that value from one. This Plan is referred to in the Agreement as the Tier 2 Plan. It is intended to be integrated with the Tier 1 Plan described in the preceding paragraph. Terms used in this Plan are intended to have the same meaning as such terms have in the Tier 1 Plan. SECTION 2. ALLOCATION OF WATER AMONG WHOLESALE CUSTOMERS Section 2.1 Annual Allocations Among the Wholesale Customers. The annual water supply allocated by the SFPUC to the Wholesale Customers collectively during system- wide shortages of 20 percent or less shall be apportioned among them based on the methodology described in this Section. Section 2.2 Methodology for Allocating Water Among Wholesale Customers. The water made available to the Wholesale Customers collectively will be allocated among them in proportion to each Wholesale Customer's Allocation Factor, adjusted as described in the following subsections below. The Wholesale Customer Allocation Factors will only be calculated at the onset of a drought and will remain the same until such time as the SFPUC declares the shortage condition over. The Wholesale Customer Allocation Factors will be recalculated during subsequent shortage periods for use during those specific periods. Section 2.2.1 Step One: Determination of Base/Seasonal Purchase Cutback For Each Wholesale Customer. The first step requires calculating the Wholesale Customer's Base/Seasonal Purchase Cutback. This calculation has seven parts. An example of Steps 1b -1f is presented in Table 2. Step 1g is shown in columns 3-6 in Table 3. For steps 1b -1g, the calculation uses average monthly production values for the three years preceding the drought for all potable supply sources, expressed as a monthly value in hundred cubic feet Step 1a: Each agency's total annual purchases from the SFPUC will be compared to its Individual Supply Guarantee (ISG), with any annual purchases above its ISG subtracted from that agency's total annual SFPUC purchases by subtracting the amount on a monthly basis in proportion to the agency's monthly SFPUC purchase pattern, - Step 1b: Calculate Average Monthly and Total Production for the three fiscal years immediately preceding the drought, excluding years during which shortage allocations were in effect, based on monthly production data from the SFPUC and Wholesale Customers, - Step 1c: Calculate Base Component which is equal to the Average Monthly Production during the base months of December, January, February and March, multiplied by 12, - Step 1d: Calculate Seasonal Component as the difference between Total Production and Base Component, - Step 1e: Calculate an agency's Base/Seasonal Allocation, expressed in hundred cubic feet, by multiplying the Base Component by one minus the Base Reduction Percentage, or 90%, and the Seasonal Component by the percentage needed (Seasonal Reduction Percentage) to achieve the required Overall Average Wholesale Customer Reduction, which is expressed as a percentage, -2- 25600441 Step 1f: Calculate the Base/Seasonal Allocation Cutback Percentage for each agency by dividing its Base/Seasonal Allocation by the agency's Total Production, and Step 1g: Calculate the Base/Seasonal Purchase Cutback Percentage by multiplying the Base/Seasonal Allocation Cutback percentage times the lesser of: (a) the immediately preceding SFPUC purchases or (b) ISG, adjusting the Seasonal percentage above until the total reduction equals the Overall Average Wholesale Customer Reduction. Additionally, adjustments to the Base Component for Stanford University will be made to remove that two week time period that the University is completely closed during the winter break per policy set by the University President as long as that policy remains in place. This adjustment will be removed at such time as the seasonal closure policy is terminated by Stanford University. Section 2.2.2 Step Two: First Adjustment for San Tose and Santa Clara. The resulting Base/Seasonal Purchase Cutback Percentage in Section 2.2.1 for San Jose and Santa Clara will be compared to the highest Base/Seasonal Purchase Cutback percentage of the other Wholesale Customers. If both San Jose's and Santa Clara s percentage reductions are larger than the highest percentage reduction among any other Wholesale Customers, the Base/Seasonal Purchase Cutback percentage established under Section 2.2.1 will remain unchanged. If either San Jose's percentage cutback or Santa Clara's percentage cutback, or both, is smaller than the highest Base/Seasonal Purchase Cutback percentage of other Wholesale Customers, the Base/Seasonal Allocation (in mgd) of San Jose or Santa Clara, or both, will be reduced so that the percentage cutback of each is no smaller than that of the Wholesale Customers' otherwise highest percentage cutback. The amount of shortage allocation (in mgd) removed from San Jose and/or Santa Clara will be reallocated among the remaining Wholesale Customers in proportion to the Base/Seasonal Allocation of each. Section 2.2.3 Step Three: Determination of Weighted Purchase Cutback For Each Wholesale Customer. Each agency's weighted allocation is calculated by multiplying its Adjusted Base/Seasonal Allocation in Section 2.2.2 by 66.66% and its Fixed Component by 33.33%. The Fixed Component is (i) the Wholesale Customer's ISG provided for in the Agreement, or (ii) in the case of Hayward, 25.11 mgd, or (iii) in the case of San Jose and Santa Clara, consistent with the limit on purchases from SFPUC set forth in Section 4.05 of the Agreement, e. g., 4.5 mgd each. The amount of the Fixed Component for each Wholesale Customer is shown on Table 1. Section 2.2.4 Stey Four Second Adjusfinent for San Tose and Santa Clara. The resulting Weighted Allocations for San Jose and Santa Clara will be compared to the highest Weighted Purchase Cutback, shown as a percentage, of the other Wholesale Customers. If both San Jose's and Santa Clara s percentage cutback is larger than the highest percentage cutback among other Wholesale Customers, the Weighted Purchase Cutbacks established under Section 2.2.3 will remain unchanged. If either San Jose's -3- 2560014.1 percentage cutback or Santa Clara s percentage cutback, or both, is smaller than the highest percentage cutback of any other Wholesale Customers, the Weighted Shortage Allocation (in mgd) of San Jose or Santa Clara, or both, will be reduced so that the percentage reduction of each is no smaller than that of the Wholesale Customers' otherwise highest Weighted Percentage Cutback. The amount of allocation (in mgd) removed from San Jose and/or Santa Clara will be reallocated among the remaining Wholesale Customers in proportion to the Weighted Shortage Allocation of each. Section 2.2.5 Step Five: Adjustment for Minimum and Maximum Cutbacks. Using the Adjusted Weighted Purchase Cutbacks, either a 10% minimum cutback or maximum cutback, as defined below, is applied to any agency whose Adjusted Weighted Purchase Cutback falls outside this range: A minimum 10% cutback is applied to the individual agency Adjusted Weighted Allocation, with the reapportioned water being placed in the hardship bank for allocation to East Palo Alto. A maximum cutback of the average cutback plus 20% (e,g. 15% average cutback results in a maximum cutback of 15% + 20% = 35%) is applied to the individual agency Adjusted Weighted Allocation, with the water necessary to meet that level being subtracted in proportion to each Wholesale Customer's Adjusted Weighted Allocation from all remaining agencies, except those at agencies subject to the minimum cutback above. The result is the Adjusted Minimum/Maximum Purchase Cutback, expressed as a percentage. Section 2.2.6 Step Six: Adjustment to Provide Sufficient Supply for East Palo Alto. In order to provide for sufficient water supply for water customers served by the City of East Palo Alto (EPA), the maximum Final Purchase Cutback applied at any given time to EPA will be equal to 50% of the Overall Average Wholesale Customer Reduction. The water needed to accommodate the guaranteed maximum cutback to EPA will be provided in two ways: First, water from the hardship bank provided by the 10% minimum cutback will be first added to the EPA Adjusted Weighted Purchase Allocation, and - Second, the balance of water needed for EPA will be deducted on a prorated basis from those agencies with a pre -drought residential per capita water use greater than 55 gallons per capita per day (as documented in the most recent BAWSCA Annual Survey) in proportion to each agency's Min./Max. Adjusted Allocation and who are not subject to the minimum and maximum reductions already applied per Section 2.2.5 The result is the Allocation with EPA Adjustment, expressed as an mgd. -4- 2560014.1 Section 2.2.7 Step Seven. Determination of Final Allocation Factor. Each Wholesale Customer's Final Allocation Factor is the fraction expressed as a percentage, the numerator of which is the particular Wholesale Customer's "Final Allocation with EPA Adjustment" (in mgd) as calculated in Steps One through Six and the denominator of which is the Overall Wholesale Customer Allocation (in mgd), a number provided by the SFPUC during the drought period as determined by the SFPUC in the Tier 1 Plan. Section 2.2.8 Example Calculation. Table 2 presents a sample of the calculations involved in Steps 1b -1f, Table 3 presents a sample of the calculations involved in Step 1g and Steps Two through Seven, using the values from Tables 1 and 2 and recent water use data for the other values. Tables 2 and 3 are presented for illustrative purposes only and do not supersede the foregoing provisions of this Section 2.2. In the event of any inconsistency between this Section 2.2 and Tables 2 and 3, the text of this section will govern. Section 2.3 Calculation of Individual Wholesale Customer Allocation Factors Directions to SFPUC. The Tier 1 Plan contemplates that in any year in which the methodology described above must be applied, the Bay Area Water Supply and Conversation Agency (BAWSCA) will calculate each Wholesale Customer's individual percentage share of the amount of water made available to the Wholesale Customers collectively, following the methodology described above and defined above as Wholesale Customer Allocation Factors. The Tier 1 Plan requires SFPUC to allocate water to each Wholesale Customer in accordance with calculations delivered to it by BAWSCA. Each Wholesale Customer authorizes BAWSCA to perform the calculations required, using water sales data furnished to it by the SFPUC, and to deliver to SFPUC a list of individual Wholesale Customer Allocation Factors so calculated as contemplated by the Tier 1 Plan Neither BAWSCA nor any officer or employee of BAWSCA shall be liable to any Wholesale Customer for any such calculations made in good faith, even if incorrect SECTION 3. GENERAL PROVISIONS Section 3.1 No Third -Party Beneficiaries. This Plan is for the sole benefit of the Wholesale Customers and shall not be construed as granting rights to any person other than another Wholesale Customer. Section 3.2 Governing Law. This Plan is made under and shall be governed by the laws of the State of California. Section 3.3 Effect on Water Supply Agreement. This Plan describes the method for allocating water from the SFPUC among the Wholesale Customers during system -wide water shortages of 20 percent or less declared by the SFPUC. The provisions of this Plan, and the Tier 1 Plan contained in Attachment H to the Agreement with which it is integrated, are intended to implement Section 3.11 of the Agreement. The Plans do not -5- 2560044.1 affect, change or modify any other section, term or condition of the Agreement or of the individual Water Sales Contracts between each Wholesale Customer and San Francisco. Section 3.4 Amendment. This Plan may be amended only by the written agreement of all Wholesale Customers. Section 3.5 Termination. This Plan shall expire on December 31, 2018. It may be terminated prior to that date only by the written agreement of all Wholesale Customers. -6- 25.1