AgdaPkt 2016-06-27 Closed and Joint SA PFA

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Water Utility Finances & Rates 6 Water & Sewer Financial Plans & Rate Studies 2.3 City Response to Drought California has been experiencing one of the most serious droughts on record. On January 17, 2014, the Governor declared a State of Emergency due to severe drought conditions and called on Californians to reduce water consumption by 20%. On January 31, 2014 the SFPUC requested that wholesale customers voluntarily reduce water demand by 10%. Prior to the drought, the City and BAWSCA had already implemented a number of conservation and rebate programs. Additionally, the City had completed the first phase of its recycled water system and initiated service in the summer of 2007. In response to the recent drought and new state regulations, the City implemented additional conservation measures which included mandatory restrictions on outdoor water consumption. On April 1, 2015 the Governor issued an Executive Order directing the State Water Resources Control Board (SWRCB) to implement mandatory water conservation regulations to reduce water usage by 25% statewide. To achieve these savings, the SWRCB adopted emergency regulations to set water conservation targets for communities around the State. Agencies that fail to achieve the required reductions could be subject to penalties of up to $10,000 per day. Based on the SWRCB’s regulations, Redwood City is required to reduce water consumption per capita by 8% from usage in calendar year 2013. Additionally, the Water Conservation Act of 2009, adopted via Senate Bill X7‐7, required all urban water suppliers – defined as water agencies that serve at least 3,000 urban connections or supply at least 3,000 acre‐feet of water per year – to reduce per capita urban water use from an established baseline by 10% by 2015 and by 20% by 2020. Conservation efforts on behalf of the City and its customer base coupled with the transition to recycled water have been successful in substantially reducing the City’s potable water demands. From fiscal year 2007/08 to 2014/15, the City’s potable water purchases from SFPUC decreased by roughly 34% (with the transition to recycled water accounting for roughly 7% of the 34% decline, or 20% of the net decrease). To date, water use in the first half of 2015/16, which included the higher‐use summer months, was more than 10% lower than the same period in 2014/15. Due to these substantial reductions in potable water demands, the City is already in compliance with its 2015 SWRCB drought cutback requirements and the 20% by 2020 conservation targets established by the 2009 Water Conservation Act. 6.4.A. - Page 33