CITY OF GROVER BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 11
Placement: Business
Meeting Date: August 24, 2026
TO: Honorable Mayor and City Council
FROM: Matthew Bronson, City Manager
PREPARED BY: Kristin Eriksson, Assistant City Manager
Jeff Lee, Public Works Director/City Engineer
SUBJECT: Long-Term Water Supply Study Draft Report
RECOMMENDATION
Receive a draft report of the long-term water supply study and provide input and direction to staff.
BACKGROUND
Overview of Study
On September 8, 2025, the Council provided direction to proceed with a long-term water supply study as part of the FY 2025-26 budget to provide information about the City’s long-term water supply needs and options for obtaining additional water supply, in support of the Council Priority of water and sewer infrastructure. On October 15, 2025, the City issued a Request for Proposals seeking consultant services to conduct this study. The City requested services to conduct a complete assessment of the City’s existing water supply and water demand forecast; provide a comprehensive analysis of additional water supply alternatives and a long-term sustainable water supply strategy; provide an analysis of water supply project funding opportunities; and to provide full-service communications, public engagement and stakeholder coordination services in development of the study. After a review of proposals by a selection committee, Confluence Engineering Solutions (Consultant) was selected as the expert third-party consultant to conduct the study and the Council approved an agreement for this study on January 26, 2026.
The Consultant will present a draft report of this study shown in Attachment 1 at tonight’s meeting for Council input and direction in developing a final report by the end of the calendar year. The study provides an outside, objective assessment of the City’s current water supply sources, including the Santa Maria Valley River Groundwater Basin (Groundwater Basin) and Lopez Lake.
The study also provides a 30-year water demand forecast for the City and modeling of water supply scenarios predicting the impacts of various vulnerabilities of the City’s water supply. Finally, the study provides an evaluation of alternative water supply options, including the costs, reliability, resiliency and feasibility of each alternative and identification of the most viable alternatives.
Analysis of Current Water Supply Sources
The City currently has a total water entitlement of 2,207 acre feet per year (AFY) between Lopez Lake (800 AFY) and the Groundwater Basin (1,407 AFY). The study notes that both of the City’s water supply sources are vulnerable to operational considerations, drought conditions and legal constraints as the City has conveyed in past reports to the Council. Further, the Groundwater Staff Report: Long-Term Water Supply Study Draft Report Page 2 August 24, 2026
Basin has long been at risk for seawater intrusion if its levels drop below a certain point during drought years, which would encroach into the freshwater in the basin. Therefore, the City and other agencies with entitlements in the basin have voluntarily reduced pumping in the Groundwater Basin for over a decade to maintain its long-term sustainability. As a result, the City only pumps approximately 500 AFY of water of its entitlement from the basin with a five-year actual average of 450 AFY pumped.
In addition to vulnerabilities within the Groundwater Basin, Lopez Lake is currently subject to litigation which seeks to, among other things, require significant increases in downstream releases of water from the reservoir which could significantly reduce the supply for all member agencies. Additionally, the County of San Luis Obispo, which manages the reservoir, has developed a Habitat Conservation Plan (HCP) to protect the connected Arroyo Grande Creek habitat to the National Marine Fisheries Service for approval. Pending approval by the federal government, the HCP will require an additional level of downstream releases which would also reduce supply, particularly in times of drought.
Demand Forecast
The study also provides a 30-year water demand forecast for the City and modeling of water supply scenarios predicting the impacts of various vulnerabilities of the City’s water supply. The models assume current demand plus demand from planned development projects within the City from 2025-2035 reflecting State housing production requirements for the City to achieve. The study includes modeling of the vulnerabilities and potential impacts to the City’s water supply’s ability to meet anticipated demand in future years, with anticipated drought years, as is typical in this environment. Using various scenarios based on current and potential future vulnerabilities, the City would see an initial gap of 15 AFY occurring in Year 3 of the forecast which would increase to a potential gap of up to 471 AFY over the 30-year period. This model affirms the need to secure additional water supply over a 30-year period to meet current demands and projected growth.
Evaluation of Water Supply Alternatives
Additionally, the draft study provides an evaluation of alternative water supply options, including the costs, reliability, resiliency and feasibility of each alternative. These options include conservation efforts, desalination, local regional water purchase, purchase of state water project, recycled water for indirect or direct potable reuse and stormwater retention. These alternatives were evaluated using eight criteria: resilience, reliability, life cycle costs, quantity of additional supply, feasibility, timeline, environmental considerations and environmental equity.
The draft report identifies the three most viable alternatives for further study and consideration when the final report is presented to the Council later this year. Some alternatives were not ranked as viable as they would not produce sufficient supply to meet the City’s projected needs. After eliminating those alternatives, the top three scored were local regional water purchase, purchase of state water and a recycled water project for indirect potable reuse.
Public Outreach
The City worked with the Consultant community outreach team to conduct a comprehensive public input process throughout the study process consistent with the Council Priority of community engagement. The team conducted initial focus group input sessions with residents, businesses, and members of the development community. Generally, the focus groups indicated that members of the groups saw a need for additional water supply for the community; that they value transparency and communication of this process, as well as recommendations of options, Staff Report: Long-Term Water Supply Study Draft Report Page 3 August 24, 2026
including costs and potential risks; and that they felt the public needs additional education on the city’s water supply needs and alternative to obtain water supply.
A centerpiece of the public outreach effort was two Community Forums led by the Consultant to provide information and an opportunity to ask questions of the Consultant and City staff. The first forum on May 13 focused on providing information on the City’s current water supply portfolio and the key vulnerabilities impacting those supplies. The second forum on June 16 focused on alternatives for additional water supply long-term for the City. These forums were recorded and posted on the City’s website: https://groverbeach.org/764/Water-Supply-Study.
The City also conducted an online survey from April through June and received 114 total responses. Generally, the survey results indicate that respondents agree (67%) that the City’s water supply is somewhat to very unreliable. Respondents also indicated that their top concerns about the City’s water supply are sustainability of the supply (65%), cost of securing additional water supply (52%) and the ability of the City’s water supply to support future development (52%).
Finally, 82% of respondents agree that the City may or must obtain additional water supply to ensure sustainability of the existing community’s water supply and to provide for estimated growth.
A full summary of community outreach and input may be found in Appendix A of the draft report.
Council Direction
The Council is asked to provide overall input on the draft report to assist the Consultant in developing a final report to submit at the end of the calendar year. The Council is also asked to provide specific direction on the three most viable alternatives identified by the Consultant and input into any additional information that would assist the Council in evaluating these alternatives.
The final report will also explore and analyze grants and funding opportunities that may be available for future consideration.
FISCAL IMPACT
There are no funding impacts from this agenda item as financial impacts of various water supply alternatives will be determined after future Council determinations on whether to implement such alternatives. The cost of conducting the Long-Term Water Supply Study was included in the Water Fund budget.
ALTERNATIVES
The Council has the following alternatives to consider:
1. Receive a draft report of the long-term water supply study and provide input and direction to staff; or
2. Provide alternative direction to staff.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
Staff Report: Long-Term Water Supply Study Draft Report Page 4 August 24, 2026
ATTACHMENTS
1. Long-Term Water Supply Study Draft Report
Multi-Year Goals
☐ Public Safety and Community Services ☐ Economic Development and Housing ☐ Community Infrastructure ☐ Financial and Organization Sustainability Council Priorities
☒ Water & Wastewater Infrastructure ☒ Community Engagement ☐ Street Improvements and Maintenance
Draft Long-Term Water Supply Study
City ofGrover Beach
August 20, 2026
DRAFT
Attachment 1
Draft Long-Term Water Supply Study August 2026
City of Grover Beach
Confluence Engineering Solutions, Inc.
Table of Contents
Executive Summary.......................................................................................................................................1 Chapter 1. Introduction/Background......................................................................................................1
1.1 Study Area.....................................................................................................................................1
1.2 Water Supply Portfolio..................................................................................................................2
1.2.1 Lopez Reservoir.....................................................................................................................2
1.2.2 Santa Maria River Valley Groundwater Basin.......................................................................3
1.3 Study Approach and Methodology ...............................................................................................4
1.4 Community Outreach and Engagement .......................................................................................4 Chapter 2. Water Demand Assessment..................................................................................................6
2.1 Existing Demand ...........................................................................................................................6
2.2 30-Year Water Demand Projections.............................................................................................6
2.2.1 Planned Projects Demand.....................................................................................................6
2.2.2 Demand Projection Sensitivity Analysis................................................................................8
2.3 Water Supply Buffer....................................................................................................................10 Chapter 3. Existing Water Supply Evaluation .......................................................................................11
3.1 Reliability Assessment of Current Water Supply Sources...........................................................11
3.1.1 Lopez Reservoir...................................................................................................................11
3.1.2 Groundwater.......................................................................................................................15
3.1.3 Climate Change Effects .......................................................................................................15
3.2 Water Supply Evaluation Model and Potential Water Supply Reductions.................................16
3.2.1 Model Description...............................................................................................................16
3.2.2 Model Scenarios..................................................................................................................17
3.2.3 Primary Scenario Model Results.........................................................................................17
3.2.4 Sensitivity Analysis Scenario Results...................................................................................19
3.2.5 Overall Model Conclusions .................................................................................................21
3.3 Recommended Supplemental Water Supply Quantity Threshold..............................................22 Chapter 4. Supplemental Water Supply Alternatives Evaluation.........................................................23
4.1 Overview of Supplemental Water Supply Alternatives ..............................................................23
4.1.1 Conservation .......................................................................................................................23
4.1.2 Desalination ........................................................................................................................25
4.1.3 Local/Regional Water Purchase ..........................................................................................26
4.1.4 Purchase of State Water Project Water Contract...............................................................26 DRAFT Draft Long-Term Water Supply Study August 2026
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4.1.5 Recycled Water...................................................................................................................29
4.1.6 Stormwater Capture ...........................................................................................................31
4.2 Scoring & Ranking of Supplemental Water Supply Alternatives ................................................32
4.2.1 Evaluation Criteria...............................................................................................................33
4.2.2 Scoring Method...................................................................................................................34
4.2.3 Alternatives Evaluation .......................................................................................................40
4.2.4 Alternatives Scoring Summary and Ranking .......................................................................48
4.3 Recommended Alternatives Supplemental Water Supply Evaluation .......................................52
4.3.1 Current Vulnerabilities Supplemental Water Supply Evaluation Modeling........................52
4.3.2 Future Vulnerabilities Supplemental Water Supply Evaluation Modeling .........................55
4.3.3 Summary of Supplemental Water Supply Evaluation Modeling Results............................59
4.3.4 Preliminary Cost Analyses and Schedules...........................................................................59 Chapter 5. Water Supply Project Funding Opportunities Assessment.................................................60
5.1 Assessment of Funding Sources for Purchase of State Water Project Contract.........................60
5.1.1 Currently Available Funding Sources..................................................................................60
5.1.2 Potentially Available Funding Sources................................................................................61
5.2 Local/Regional Water Purchase..................................................................................................62
5.2.1 Currently Available Funding Sources..................................................................................63
5.2.2 Potentially Available Funding Sources................................................................................63
5.3 Indirect Potable Reuse Recycled Water......................................................................................64
5.3.1 Currently Available Funding Sources..................................................................................64
5.3.2 Potentially Available Funding Sources................................................................................66 Chapter 6. Summary of Conclusions and Recommendations ..............................................................69
6.1 Current Water Supply Reliability.................................................................................................69
6.2 Water Demand............................................................................................................................69
6.3 Water Supply Evaluation Model Conclusions.............................................................................69
6.4 Supplemental Water Supply Alternatives Evaluation Conclusions.............................................70
6.5 Recommended Alternatives Conclusions ...................................................................................70
6.6 Funding Conclusions ...................................................................................................................71
6.7 Recommendations......................................................................................................................71 References ..................................................................................................................................................73 DRAFT Draft Long-Term Water Supply Study August 2026
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Appendices
Appendix A. City of Grover Beach Long-Term Water Supply Study Community Engagement DRAFT
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Executive Summary
The City of Grover Beach (City) commissioned this Long-Term Water Supply Study (Study) to evaluate the reliability of the City's current water supply portfolio, assess current and future water demand, and identify supplemental water supply alternatives capable of supporting the City's long-term water needs through a 30-year planning horizon. The Study was developed through a comprehensive public engagement process including two community workshops, an online survey, and stakeholder focus groups. A summary of the community engagement program and its outcomes is provided in Appendix A of the Study.
The City currently relies on two primary water supplies: (1) up to 800 acre-feet per year (AFY) of treated surface water from Lopez Reservoir through the San Luis Obispo County Flood Control and Water Conservation District (SLOCFCWCD) Zone 3 water delivery system, and (2) a groundwater entitlement of up to 1,407 AFY from the Santa Maria River Valley Groundwater Basin (SMRVGB) through the Northern Cities Management Area (NCMA). Together, these entitlements total 2,207 AFY, which exceeds the City's current average annual demand of approximately 1,220 AFY. However, this apparent surplus does not account for significant and growing vulnerabilities in the reliability of and constraints upon both supply sources.
Current Supply Vulnerabilities and Constraints
The Lopez Reservoir supply for the City and other Zone 3 water agencies is subject to ongoing federal litigation concerning downstream environmental flow requirements for Arroyo Grande Creek.
Additionally, the SLOCFCWCD, as the operator of Lopez Dam, has prepared a draft Habitat Conservation Plan (HCP) that is pending federal review and includes a Lopez Downstream Release Plan (LDRP). The City's Lopez supply is also governed by the Low Reservoir Response Plan (LRRP), which establishes tiered reductions in municipal diversions at decreasing reservoir storage levels to protect long-term reservoir viability. Ten percent reductions under the LRRP occurred in both 2016 and 2022. The draft HCP and LDRP, if adopted, could increase mandatory downstream releases in addition to LRRP reductions, further constraining the City's available Lopez supply, particularly during dry years.
Groundwater from the NCMA is similarly constrained. The NCMA operates under a court-established management framework that monitors and limits production to protect long-term basin health. Of particular concern is seawater intrusion, a documented historical threat in the NCMA. The City, in coordination with neighboring agencies, has determined that approximately 500 AFY of groundwater production can be safely relied upon without inducing seawater intrusion under current conditions and has been extracting an average of 450 AFY of groundwater over much of the recent historical period.
Regional hydrogeologic modeling suggests the City's long-term sustainable groundwater production could be further constrained to approximately 351 AFY to further protect against seawater intrusion.
Water Demand Assessment
The City's current 5-year average demand (2021 through 2025) is approximately 1,220 AFY, reflecting a sustained, long-term reduction driven by a combination of local and state water use efficiency programs, tiered water rate structures, and state-mandated efficiency standards under Senate Bill 606 and Assembly Bill 1668. The most pronounced reductions occurred during the 2012 to 2016 drought, with demand declining approximately 32 percent and remaining near that level due to demand hardening. For the last reporting year in 2024-25, the City's actual water use was approximately 17 percent below its Urban DRAFT Draft Long-Term Water Supply Study August 2026
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Water Use Objective (UWUO), leaving a compliance margin of 16.28 gallons per capita per day (GPCD), reflecting the significant conservation already achieved by the community.
The Study's primary demand projection, referred to as the Planned Projects demand, reflects current average demand plus projected demand from planned City development projects expected to be completed through approximately 2035, using a gross per-capita demand assumption of 85 GPCD. This demand estimate reflects State housing production requirements for the City to achieve. Based on this projection, the City’s water demand would increase from 1,220 AFY to approximately 1,247 AFY in Year 1 and approximately 1,421 AFY by Year 11, and then reach approximately 1,463 AFY by Year 30 based on San Luis Obispo Council of Governments population projections.
Water Supply Evaluation Modeling Results
A water supply evaluation model was developed to simulate the City's annual supply and demand balance under various scenarios spanning a 30-year planning horizon using a historical hydrologic record from 1996 through 2025. Supply deficits, defined as the annual shortfall between available supply and projected demand, are recorded in years when aggregate supply is insufficient to meet demand. The model evaluates two primary scenarios, Current Vulnerabilities and Future Vulnerabilities, as the basis for supplemental supply planning. Two additional sensitivity analysis scenarios bracket the range of possible supply and demand conditions. Estimated supply deficits across all scenarios are summarized in Table ES1 below.
Table ES-1. Estimated Supply Deficits across Water Supply Evaluation Model Scenarios (AFY) Current
Vulnerabilities
Scenario
Future
Vulnerabilities
Scenario
Future
Vulnerabilities &
High Demand
Scenario
Future
Vulnerabilities &
No Growth
Scenario
Year 5 Deficit 55 204 313 69
Year 10 Deficit 122 271 399 69
Year 20 Deficit 149 298 572 69
Year 30 Deficit 164 313 586 69
Maximum Deficit 241 (Year 27) 471 (Year 28) 745 (Year 28) 229 (Year 27) Under the Current Vulnerabilities scenario, reflecting historically achievable groundwater production of 500 AFY and LRRP-based Lopez reductions, the model projects annual supply deficits beginning in Year 3, ranging from 15 AFY to a maximum of 241 AFY in Year 27 occurring during an extended drought, and ending at 164 AFY in Year 30. This scenario most closely reflects the supply conditions the City has recently experienced and is the primary basis for near-term supplemental supply planning.
Under the Future Vulnerabilities scenario, incorporating HCP LDRP-based Lopez reductions and a groundwater production constraint of approximately 351 AFY based on regional hydrogeologic modeling, projected annual deficits range from approximately 143 AFY to a maximum of 471 AFY in Year 28 occurring during an extended drought. This scenario reflects conditions that are potentially realistic if the HCP process advances and regional groundwater constraints tighten and is the primary basis for mid-to-longterm supplemental supply planning. DRAFT Draft Long-Term Water Supply Study August 2026
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The sensitivity scenarios further illustrate the range of possible outcomes. The Future Vulnerabilities and High Demand scenario, which applies Future Vulnerabilities supply constraints to the higher demand projection from the City's 2020 Urban Water Management Plan (UWMP), which assumes 117 GPCD, projects deficits ranging from approximately 242 AFY in Year 1 to a maximum of 745 AFY in Year 28.
Because the City's actual 5-year average demand of 85 GPCD is significantly below the 2020 UWMP projection, this scenario represents an upper-bound condition that is unlikely to materialize given recent water use trends but illustrates the magnitude of supply need that could emerge if both demand growth and supply restrictions exceed the primary projections. The Future Vulnerabilities and No Growth scenario projects deficits of approximately 69 to 229 AFY even without any new development, indicating that the City's supplemental supply need is driven primarily by existing supply constraints, not growth alone. This scenario is unlikely given State housing production requirements that the City must achieve.
Taken together, the modeling results demonstrate that the City's current water supply portfolio is insufficient to reliably meet projected future demand, and that the need for supplemental supply is not dependent on any single worst-case assumption. Based on these results, the Study establishes a minimum supplemental water supply quantity threshold of 241 AFY (the maximum projected deficit under the Current Vulnerabilities scenario) against which each of the eight evaluated supplemental water supply alternatives is assessed.
Supplemental Water Supply Alternatives
The Study conducted a conceptual evaluation of eight supplemental water supply alternatives. These alternatives include, in alphabetical order: Conservation, Desalination, Local/Regional Water Purchase, Direct Potable Reuse (DPR) Recycled Water, Indirect Potable Reuse (IPR) Recycled Water, Non-Potable Recycled Water, Purchase of State Water Project (SWP) Contract, and Stormwater Capture. The following evaluation criteria were used to score and rank the alternatives: Reliability, Resiliency, Life-Cycle Cost, Quantity of Supply, General Feasibility, Timing, Environmental Impacts, and Environmental Justice.
Following the conceptual scoring and ranking, a Quantity of Supply Threshold Analysis was applied as a filter. Alternatives that cannot realistically provide a minimum of 241 AFY of supplemental supply were not advanced as viable alternatives. Conservation, Non-Potable Recycled Water, and Stormwater Capture did not meet this threshold. Conservation is an important and long-standing component of the City's existing water management program and should continue as an ongoing policy and practice. However, the City has already achieved substantial conservation, reducing demand by approximately 31 percent since 2010, and demand hardening limits the potential for additional firm supply from further conservation efforts.
Of the five alternatives that met the quantity threshold, the following three were identified as the most viable for in-depth technical evaluation and modeling based on their overall weighted scores, feasibility, and implementation timeline:
• Local/Regional Water Purchase: Water may be acquired from neighboring agencies or agricultural water users through temporary or permanent contractual arrangements. This alternative offers relatively fast access to supplemental supply and can leverage existing regional infrastructure.
• Purchase of SWP Contract: The SLOCFCWCD holds a SWP Table A entitlement that the City, as a Zone 3 subcontractor, may pursue access to through its existing institutional DRAFT Draft Long-Term Water Supply Study August 2026
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relationship and infrastructure. SWP deliveries are variable year to year, and modeling incorporates a Drought Buffer allocation to provide storage during low-allocation years. The concept of a Drought Buffer will be brought to the City Council as a policy item as part of the final report.
• IPR Recycled Water: Advanced treatment of municipal wastewater for indirect potable reuse offers a highly resilient supply that is largely independent of hydrology and tracks wastewater generation. The City creates approximately 1,000 AFY of wastewater annually, providing a meaningful local resource base. Implementation would require coordination with the South San Luis Obispo County Sanitation District (SSLOCSD) and significant infrastructure investment.
Supply Reliability Modeling for Recommended Alternatives For each recommended alternative, supply reliability modeling was conducted under both the Current Vulnerabilities and Future Vulnerabilities scenarios to establish a range of supplemental supply quantities.
The Current Vulnerabilities scenario determines the minimum supplemental supply needed to eliminate deficits under near-term, realistic conditions. The Future Vulnerabilities scenario determines the maximum supplemental supply that may ultimately be needed if anticipated future constraints materialize. Table ES-2 summarizes the estimated supplemental water supply quantity ranges for each recommended alternative.
Table ES-2. Summary of Estimated Supplemental Water Supply Quantity Ranges Alternative Current Vulnerabilities
(Minimum)
Future Vulnerabilities
(Maximum)
Local/Regional Water Purchase 200 AFY (firm) 350 AFY (firm) Purchase of SWP Contract
400 AFY Table A (200 AFY Water
Service Amount + 200 AFY
Drought Buffer)
700 AFY Table A (350 AFY Water
Service Amount + 350 AFY
Drought Buffer)
IPR Recycled Water 200 AFY (firm) 350 AFY (firm)
Under the Current Vulnerabilities scenario, a minimum supplemental supply of 200 AFY (firm) for the Local/Regional Water Purchase and IPR Recycled Water alternatives and a 400 AFY SWP Table A entitlement for the Purchase of SWP Contract alternative is projected to eliminate all modeled deficits across the 30-year planning horizon. The larger SWP Table A entitlement reflects the additional allocation needed to build SWP storage that can cover demand during low-allocation drought years when direct SWP deliveries may be as low as 5 percent of entitlement. Under the more constrained Future Vulnerabilities scenario, these quantities increase to 350 AFY firm supply and 700 AFY SWP Table A entitlement, respectively. The range between scenarios reflects the uncertainty in future supply conditions and establishes the planning envelope within which the City should evaluate for a supplemental supply program.
Funding Opportunities
The Study assessed currently and potentially available funding sources for each of the three recommended alternatives. The Purchase of SWP Contract and Local/Regional Water Purchase DRAFT Draft Long-Term Water Supply Study August 2026
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alternatives are primarily contractual in nature, and funding is most practically drawn from the City's existing enterprise funds and rate-setting mechanisms, with development impact fees (capacity charges under Government Code Section 66013) potentially applicable to the cost of funding any associated capital infrastructure improvements or securing a defined entitlement. The IPR Recycled Water alternative, as a defined capital construction project, is eligible for a broader range of state and federal funding sources, including the Water Recycling Funding Program, Clean Water State Revolving Fund, WaterSMART Title XVI, and the Water Infrastructure Finance and Innovation Act (WIFIA). Potentially available future sources include the developing Watershed Resilience Program under Proposition 4.
Further details on estimated costs for supplemental water supply alternatives will be included in the final report based on direction from City Council regarding which alternatives to explore further.
Key Conclusions
The Long-Term Water Supply Study is a planning tool that provides the City with objective analysis and conclusions over a 30-year planning period based on the best information available. Based on this information, the Study confirms the City faces a water supply challenge that requires action and identifies potential actions for the City to consider. The time required to plan, permit, design, and construct major water supply infrastructure in California's coastal zone ranges from approximately 2 to 15 or more years depending on the alternative, and securing additional water from another agency can similarly take years to achieve. Taking these planning steps now for the City's preferred water supply alternative(s) will help build a reliable and resilient water supply portfolio that supports Grover Beach's long-term growth, economic vitality, and quality of life.
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Chapter 1. Introduction/Background
The City of Grover Beach (City) is located on the Central Coast of California in San Luis Obispo County, approximately midway between San Francisco and Los Angeles. The City has a population of approximately 12,500 residents and operates its own water distribution system, sourcing surface water from Lopez Reservoir and groundwater from the Santa Maria River Valley Groundwater Basin (SMRVGB).
The City commissioned this Long-Term Water Supply Study (Study) to respond to a convergence of factors placing increasing pressure on its water supply reliability. This Study represents the City's first comprehensive, independent evaluation of its water supply needs and options beyond previous and more limited analysis carried out by City staff. It is intended to provide the City Council, City staff, and the Grover Beach community with a technically rigorous, defensible, and accessible foundation for informed decision-making regarding the City's long-term water future. The Study was developed through a transparent public engagement process that included two community workshops held in May and June 2026 and an online survey.
The Study addresses the following objectives:
• Assessment of current water supply sources, their entitlements, and their reliability under existing and anticipated future conditions
• Projection of water demand over a 30-year planning horizon, accounting for planned development, conservation trends, and climate change
• Quantification of the City's supplemental supply need through water supply evaluation modeling
• Conceptual evaluation of supplemental water supply alternatives and identification of the most viable alternatives for in-depth analysis
• Preliminary cost and schedule analysis for recommended alternatives • Assessment of available grant and loan funding opportunities
1.1 Study Area
The Study area is the incorporated limits of the City. The City's water service area encompasses all land within City boundaries, which is served exclusively by the City's municipal water system. The City's two current water supply sources, Lopez Reservoir and the SMRVGB, are shared with other agencies.
Lopez Reservoir is located outside the City boundaries and is owned and operated by the San Luis Obispo County Flood Control and Water Conservation District (SLOCFCWCD). Lopez Reservoir water is delivered to Zone 3 municipal water contractors, including the cities of Pismo Beach, Arroyo Grande, and Grover Beach, the Oceano Community Services District (CSD), and the County of San Luis Obispo Public Works Department, County Service Area 12 (CSA 12). CSA 12 supplies Lopez Reservoir water to its subcontractors serving the Avila Beach area, including Avila Beach CSD, Port San Luis Harbor District, Avila Valley Mutual Water Company, and residential property owners in the Avila Beach area.
The SMRVGB underlies a broad area of southern San Luis Obispo and northern Santa Barbara counties.
Groundwater rights within the basin are managed through a court-adjudicated framework that established separate management areas, including the Northern Cities Management Area (NCMA), which is the portion of the basin underlying the Five Cities area of southern San Luis Obispo County. Within the NCMA, groundwater rights are shared among four of the Zone 3 municipal agencies (the cities of Grover DRAFT Draft Long-Term Water Supply Study August 2026
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Beach, Arroyo Grande, and Pismo Beach, and Oceano CSD), as well as agricultural water users in the broader basin, including irrigated farming operations in the Nipomo Mesa area.
1.2 Water Supply Portfolio
1.2.1 Lopez Reservoir
Lopez Reservoir, located at the confluence of Arroyo Grande and Lopez Creeks, is a significant surface water supply source for the Zone 3 agencies, including the City. Lopez Dam was constructed in 1967– 1968 by the SLOCFCWCD. The reservoir has a current estimated storage capacity of approximately 49,476 acre-feet (AF). The operational safe yield of Lopez Reservoir is determined to be 8,730 acre-feet per year (AFY), of which 4,530 AFY is apportioned to Zone 3 contract agencies and the remaining 4,200 AFY is reserved for downstream releases to maintain flows in Arroyo Grande Creek, support groundwater recharge for irrigated crop production, and meet the water needs of agricultural users in the watershed (SLOCFCWCD, 2025a). The Zone 3 Contractor Allocations are shown in Table 1 below.
Table 1. Lopez Reservoir (SLOCFCWCD Zone 3 Contractors) Water Allocations Contractor
Normal Water
Allocation (AFY)
City of Arroyo Grande 2,290
City of Pismo Beach 892
City of Grover Beach 800
Oceano CSD 303
CSA 12 (not in NCMA) 245
Total 4,530
Downstream Releases 4,200
Safe Yield of Lopez Reservoir 8,730
The City holds an annual water allocation of 800 AFY from Lopez Reservoir, delivered via the Lopez Water Treatment Plant. Historic droughts have periodically significantly reduced the amount of water available in Lopez Reservoir and forced the implementation of the Low Reservoir Response Plan (LRRP) in 2014. The LRRP is a plan to reduce allocations and downstream releases from Lopez Reservoir when storage levels drop to preserve water in the reservoir for potential subsequent drought years (SLOCFCWCD Zone 3, 2014). When storage in Lopez Reservoir drops below 20,000 AF and a water supply emergency is declared by the San Luis Obispo County Board of Supervisors, the LRRP is enacted.
Once enacted, there are a series of prescribed reductions for the Zone 3 agency allocations and downstream releases that are implemented based on storage levels, which will be described in further detail in Chapter 3. LRRP reductions have been triggered during the 2016 and 2022 drought years. DRAFT Draft Long-Term Water Supply Study August 2026
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Looking forward, the SLOCFCWCD has prepared a draft Habitat Conservation Plan (HCP) in response to ongoing federal litigation concerning minimum flows required for threatened steelhead and other species in Arroyo Grande Creek downstream of Lopez Dam. The draft HCP includes a Lopez Downstream Release Plan (LDRP) that would establish mandatory minimum downstream flow requirements in addition to existing LRRP reductions that would further reduce water available for municipal diversion, particularly during dry years when reservoir storage is reduced by the mandatory releases themselves.
The HCP and LDRP, if adopted by the federal government, would represent a significant new constraint on the City's Lopez supply reliability.
1.2.2 Santa Maria River Valley Groundwater Basin
The SMRVGB is a large alluvial groundwater basin underlying portions of San Luis Obispo and Santa Barbara counties, encompassing approximately 288 square miles (184,000 acres). The rights to pump groundwater in the SMRVGB have been subject to adjudication since the late 1990s. The June 30, 2005 Stipulation and January 25, 2008 Judgment After Trial established three separate management areas within the basin, including the NCMA, which encompasses the cities of Pismo Beach, Arroyo Grande, and Grover Beach, as well as the Oceano Community Services District, referred to as the NCMA Agencies (Santa Maria Valley Water Conservation District v. City of Santa Maria, 2008). The NCMA is governed by a court-approved management agreement, which was originally established in 1983 as the “Gentlemen’s Agreement” and was later affirmed as the 2002 Groundwater Management Agreement (Management Agreement) among the NCMA agencies. The Management Agreement outlined the pumping limits shown in Table 2 to limit extraction within the NCMA to the estimated safe yield of 9,500 AFY. The cities of Grover Beach and Arroyo Grande also hold agricultural conversion credits of 209 AFY and 121 AFY, respectively. Agricultural conversion credits represent water rights derived from the conversion of former agricultural lands to urban use, bringing the total NCMA entitlements for Grover Beach and Arroyo Grande to 1,407 AFY and 1,323 AFY, respectively.
Table 2. NCMA Groundwater Allocations under the 2002 Management Agreement (GSI Water Solutions, 2025).
Type of Use Allocation (AFY)
Basin Water Balance Components
Agricultural Irrigation 5,300
Subsurface outflow to ocean 200
Urban Agency Allocations
City of Arroyo Grande 1,202
City of Grover Beach 1,198
City of Pismo Beach 700
Oceano CSD 900
Total Safe Yield 9,500
Seawater intrusion risk in the NCMA is monitored through the Deep Well Index (DWI), which includes the average groundwater elevation of three deep sentry wells located near the coast. A DWI value above 7.5 feet relative to the North American Vertical Datum of 1988 generally indicates sufficient freshwater flow to prevent seawater migration. In 2008–2009, the DWI dropped below this threshold and remained there for nearly two years, coinciding with an observed incipient seawater intrusion event in which chloride concentrations in monitoring well 30N02 increased from a historical average of DRAFT Draft Long-Term Water Supply Study August 2026
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approximately 50 mg/L to nearly 700 mg/L. In response, the NCMA agencies implemented significant conservation measures and voluntarily reduced groundwater pumping, with combined Agency municipal pumping remaining below 1,000 AFY for most years from 2015 through 2023. Although the agencies have successfully prevented seawater intrusion recurrence to date, the risk remains and is actively managed by NCMA agencies.
1.3 Study Approach and Methodology
The Study was conducted in two primary phases:
• Phase 1: Existing Water Supply Evaluation: This phase focused on data collection and analysis of the City’s existing supply and demand conditions and development of the water supply evaluation model tailored to the City's water supply portfolio and existing and anticipated future vulnerabilities.
The water supply evaluation model simulates the City's annual supply and demand balance over a 30- year planning horizon (Year 1 through Year 30) using a historical hydrologic record spanning 1996 through 2025. This approach captures the range of wet, dry, and drought conditions that Grover Beach has historically experienced, including the significant 2012–2016 and 2020–2022 drought periods.
Supplies are allocated in operational priority order with deficits recorded when aggregate supply is insufficient to meet demand.
• Phase 2: Supplemental Water Supply Alternatives Evaluation: The second phase of the Study encompassed a conceptual evaluation of eight supplemental water supply alternatives: Conservation, Desalination, Local/Regional Water Purchase, Purchase of State Water Project (SWP) Contract, Recycled Water (Direct Potable Reuse (DPR), Indirect Potable Reuse (IPR), and Non-Potable), and Stormwater Capture. The three most viable alternatives for in-depth technical analysis were identified as Local/Regional Water Purchase, Purchase of State Water Project (SWP) Contract, and IPR Recycled Water. For these most viable alternatives, the Study developed supply reliability models and an assessment of available grant and loan funding opportunities. Preliminary cost analyses and implementation schedules for the three most viable alternatives will be presented in the final report.
The Study assessed currently and potentially available funding sources for each of the three most viable supplemental water supply alternatives. The assessment considered existing City funding and ratesetting mechanisms, development impact fees, and state and federal grant and loan programs, evaluating which mechanisms may realistically apply given each alternative's specific structure. The Purchase of SWP Contract and Local/Regional Water Purchase alternatives are primarily contractual in nature, which limits the applicability of traditional capital grant and loan programs but does not preclude the use of City enterprise funds, rate adjustments under Proposition 218, and certain development impact fee mechanisms. The IPR Recycled Water alternative, as a defined capital construction project, is eligible for a broader range of funding sources.
1.4 Community Outreach and Engagement
The Study was developed with inclusion of a robust public engagement process consistent with the Council priority of community engagement. Public outreach activities included a dedicated project webpage where study materials, workshop presentations, video recordings of both workshops, and a Frequently Asked Questions document were made publicly available; a citywide project postcard mailed to all households and businesses; email announcements; an online community survey distributed by the City; City newsletter articles; and social media outreach through the City's Facebook and Instagram DRAFT Draft Long-Term Water Supply Study August 2026
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accounts. Two early stakeholder learning sessions were conducted in March 2026 with resident representatives and business and development community representatives. Two community workshops were also held: Community Workshop #1 on May 13, 2026, which presented the existing supply and demand conditions and modeling results; and Community Workshop #2 on June 16, 2026, which presented the supplemental water supply alternatives evaluation. Community input received throughout the engagement process was considered in the development of Study recommendations prior to presentation to the City Council.
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Chapter 2. Water Demand Assessment
The water demand assessment establishes the City's current and projected water needs over a 30-year planning horizon, accounting for existing consumption, planned development, and long-term growth.
These demand projections form the foundation of the water supply evaluation in Chapter 3, where they are tested against the City's existing supply sources across a range of hydrologic conditions to quantify projected supply deficits and inform the supplemental supply recommendations presented later in this report.
2.1 Existing Demand
The City's existing average annual water demand, based on the five-year average of production (i.e. source water needed to meet City demands including system losses) from 2021 through 2025, is approximately 1,220 AFY. This figure reflects recent reduced usage trends over time and represents the most current and operationally relevant baseline for planning purposes. Over the same period, the City's residential per-capita demand has averaged approximately 85 gallons per capita per day (GPCD) gross demand, which is notably lower than the 117-GPCD assumption used in the City's 2020 Urban Water Management Plan (UWMP) (City of Grover Beach, 2021). Using updated California Department of Finance E-5 population estimates (California Department of Finance, 2026) and 2025 production data, the most recent calculated per capita demand is approximately 86 GPCD; however, this Study uses 85 GPCD as the primary demand basis for consistency with the per-capita demand estimates previously used in the City's planning and reporting efforts.
Historical demand trends show a sustained, long-term reduction in the City's water use, as shown in Figure 1. Annual production has trended downward over the historical record, driven by a combination of local and state water use efficiency programs including tiered water rate structures that incentivize conservation and state-mandated water use efficiency standards for water suppliers under Senate Bill 606 and Assembly Bill 1668. The most pronounced reductions occurred during the 2012–2016 drought, when statewide conservation mandates and local drought response measures reduced demand by approximately 32 percent relative to pre-drought levels. Notably, demand has not rebounded to predrought levels following the return of normal hydrology, a phenomenon known as demand hardening, in which customers who have adopted water-efficient practices and fixtures tend to maintain those behaviors even after drought restrictions are lifted. Demand declined further, though more modestly, during the 2020–2022 drought before stabilizing near its current level. The City's current 5-year average demand of approximately 1,220 AFY reflects this trajectory towards a reduction in long-term usage.
The City's existing water demand is served by a combination of Lopez Reservoir surface water and SMRVGB groundwater. The City fully utilizes its 800 AFY Lopez allocation in most years, with the balance of demand met through groundwater extraction.
2.2 30-Year Water Demand Projections
2.2.1 Planned Projects Demand
The Study analyzed the water demand attributable to planned development projects (including projects recently completed, under construction, approved but not yet under construction, and in the permitting process) from 2025-2035, using project-specific data provided by City staff, including unit counts, commercial square footage, and estimated completion schedules. This demand projection, referred to as the Planned Projects demand, reflects current average demand plus projected demand from planned DRAFT Draft Long-Term Water Supply Study August 2026
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City development projects expected to be completed during the planned project period, using a gross per-capita demand assumption of 85 GPCD. It was selected as the primary demand basis for this Study as it represents the most current and project-specific growth projection available and reflects State housing production requirements that the City must achieve. It should be noted that this projection assumes full completion of all identified planned development projects, which may not occur given the numerous variables and uncertainties involved with development projects.
Based on this projection, the City’s water demand would start at approximately 1,247 AFY in Year 1 and increase to approximately 1,421 AFY by Year 11 as planned projects come online. The demand would then increase to approximately 1,463 AFY by Year 30 based on population projections in the 2060 Regional Growth Forecast prepared by the San Luis Obispo Council of Governments (SLOCOG) combined with the 85-GPCD demand assumption, reflecting modest long-term growth beyond the planned project horizon. Key components of the Planned Projects demand are summarized in Table 3.
Table 3. Planned Projects Demand Projection Key Components Category
Demand/Demand
Increase (AFY) Notes
Projected
Timeframe
Existing 5-Year Average Demand ~1,220
Baseline demand
(2021–2025 average)
NA
Projects Completed Late 2025 ~27
Excluded from 5-year
average pending
accumulation of
production data
Year 1
Projects Under Construction ~48
Residential, hotel,
and commercial
projects
Years 2 and 3
Approved Projects (not yet under
construction) ~59
Entitlements granted
or building permits
issued
Years 4 through 11
In-Process Projects ~41
Land use entitlement
applications under
review
Years 6 through 11
Concept & Opportunity Sites ~26
Pre-application and
housing element
opportunity sites
(subject to change)
Years 6 through 11
Total Planned Projects Demand by
Year 11
~1,421 AFY
Forecasted Planned Projects Demand
by Year 30 ~1,463 AFY DRAFT
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2.2.2 Demand Projection Sensitivity Analysis
For sensitivity analysis, the Study also evaluated demand based on the City's 2020 UWMP projections, which assumes 117 GPCD and results in higher projected demands than the Planned Projects demand estimate, ranging from approximately 1,393 to 1,737 AFY. For the sensitivity analysis, 2060 Regional Growth Forecast population projections (SLOCOG, 2025) were used to extend the UWMP demand curve beyond the UWMP's planning horizon. Additionally, a no-growth scenario using the current 5-year average demand (1,220 AFY) was developed for comparison purposes. These scenarios bracket the likely range of future demand and provide a comprehensive picture of the City's potential water supply planning needs under varying growth assumptions, as shown in Figure 1.
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Figure 1. Historical and Projected Demands for City of Grover Beach Water Supply Evaluation Modeling DRAFT Draft Long-Term Water Supply Study August 2026
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2.3 Water Supply Buffer
A water supply buffer, also referred to as a reliability reserve, is the quantity of supply in excess of projected demand that a water agency maintains to protect against unexpected supply disruptions, demand spikes, or model uncertainty. Water supply buffer policies are not uniformly mandated in California but are recognized as sound planning practice for agencies facing supply uncertainty.
Given the documented vulnerabilities in both of Grover Beach's existing supply sources (the ongoing Lopez litigation and associated LDRP reductions, and the seawater intrusion risk constraining groundwater production), a reliability reserve at the higher end of that range, equal to 15-20 percent of projected build-out demand, is a reasonable benchmark for the City to consider. This concept will be presented in further detail with the final report of the Study.
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Chapter 3. Existing Water Supply Evaluation
The existing water supply evaluation component of the Study examines whether the City's current supply portfolio, consisting of Lopez Reservoir and groundwater from the Santa Maria River Valley Groundwater Basin, can reliably meet projected demand given the environmental, regulatory, and legal constraints that limit the dependable yield of each source. These constraints are incorporated into a water supply evaluation model that simulates the City's annual supply and demand balance across a range of scenarios over a 30-year historical hydrologic record. The modeling results quantify the City's projected supply deficits and inform the recommended supplemental water supply quantity threshold presented in this chapter.
3.1 Reliability Assessment of Current Water Supply Sources Reliability, for the purposes of this Study, refers to the consistency and adequacy of water supply delivery under the range of anticipated hydrologic conditions, including normal years, dry years, and drought years. A water supply portfolio is considered reliable if it can consistently meet demand across the range of anticipated hydrologic conditions the City may experience over the 30-year planning horizon. This Study evaluates the City's current water supply portfolio against this standard, examining the factors that limit each source's ability to deliver its full entitlement, particularly during drought conditions. The following sections describe the different water supply reliability constraints associated with the City’s existing water supply sources.
3.1.1 Lopez Reservoir
Lopez Reservoir is the City's primary surface water supply and historically the most reliable component of its supply portfolio. However, the resiliency of Lopez supply is substantially limited by two factors:
drought-related reservoir storage drawdown, and the regulatory downstream release requirements that are the subject of ongoing litigation.
3.1.1.1 Current Vulnerabilities
The LRRP currently establishes tiered municipal diversion reductions at decreasing reservoir storage levels. Hydrologic conditions triggered a 10% Lopez Reservoir municipal diversion reduction in both 2016 and 2022. The water supply evaluation model applies LRRP-based reductions during the corresponding historical drought years. The impacts to the City’s annual Lopez Reservoir entitlement are quantified in Tables 4 and 5 below.
Table 4. Initial Prescribed Municipal Diversion Reduction Strategy Amount of Water in Storage (AF) Municipal Diversion
Reduction (%)
Municipal Diversion (AFY)
20,000 0% 4,530
15,000 10% 4,077
10,000 20% 3,624
5,000 35% 2,941
4,000 100% 0
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Table 5. Initial Prescribed Downstream Release Reduction Strategy Amount of Water in Storage (AF) Downstream
Release Reduction (%)
Downstream Release (AFY)
20,000 9.5% 3,800
15,000 9.5% 3,800
10,000 75.6% 1,026
5,000 92.9% 300
4,000 100% 0
3.1.1.2 Potential Future Vulnerabilities
The SLOCFCWCD has prepared a draft HCP in response to federal litigation concerning Arroyo Grande Creek environmental flows. The draft HCP includes an LDRP that would establish minimum stream flow requirements for Arroyo Grande Creek below Lopez Dam, shown in Table 6. These proposed new downstream release requirements would increase the amount of water that is required to be released to Arroyo Grande Creek from Lopez Reservoir compared to current requirements under the Interim Downstream Release Schedule (IDRS). These additional releases would reduce the amount of water that can be kept in storage in the reservoir and is predicted to increase the frequency and duration that the reservoir would need to be operated under the LRRP and would consequently reduce available municipal entitlements.
Table 6. LDRP Base Flow Requirements at Lopez Dam (SLOCFCWCD, 2025a) Date
Release from Lopez Dam in Cubic
Feet per Second (Storage > 20,000
AF)
Release from Lopez Dam in Cubic
Feet per Second (Storage < 20,000
AF)
Oct 1 – Dec 1 3 3
Dec 2 – Jan 1 5 4.5
Jan 2 – Mar 15 8 7.2
Mar 16 – Apr 1 7 6.3
Apr 2 – May 1 5 4.5
May 2 – Jun 1 4 3.6
Jun 2 – Sep 30 3 3
Figure 2 compares historical Lopez Reservoir storage hydrograph with HCP-modeled storage (Western Hydrologics, personal communication, 2026) over the 1996–2024 period, illustrating the additional drawdown attributable to the LDRP releases during the 2012–2016 and 2020–2022 droughts. The DRAFT Draft Long-Term Water Supply Study August 2026
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maximum storage discrepancy between the two hydrographs is related to the 2003 bathymetry study that changed the elevation/storage rating curve for the reservoir.
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DRAFT Figure 2. Historical vs. HCP-Modeled Lopez Reservoir Storage Draft Long-Term Water Supply Study August 2026
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It should be noted that the draft HCP has not been finalized or approved by the federal government as of the date of this Study. The assumed LDRP reductions represent the Study team's interpretation of the draft HCP provisions and are subject to change as the HCP process advances. The City should continue to monitor the HCP process and update its supply planning assumptions accordingly.
3.1.2 Groundwater
The City's maximum allocation of 1,407 AFY of groundwater from the SMRVGB has historically not been fully utilized as production has been constrained by the capacity of the City's well infrastructure, seawater intrusion prevention constraints, and the operational practice of prioritizing Lopez surface water deliveries. The NCMA management framework allocates groundwater rights across multiple municipal and agricultural users, and the City along with other NCMA parties have intentionally limited their groundwater production to protect against seawater intrusion.
3.1.2.1 Current Vulnerabilities
Historically, the City has pumped approximately 450 AFY on average from 2021 to 2025. For the purposes of representing current groundwater supply availability, the City, in coordination with neighboring agencies and private pumpers (i.e. agriculture and rural domestic wells), has determined that the City’s operational groundwater pumping volume of around 500 AFY can be safely relied up without inducing seawater intrusion in the basin. This Study therefore utilizes the 500 AFY groundwater supply availability assumption for the Current Vulnerabilities water supply evaluation, with the acknowledgment that this amount may need to be reduced if NCMA management constraints are tightened in response to seawater intrusion pressure or regional groundwater production increases.
3.1.2.2 NCMA Seawater Intrusion Prevention Modeling
In 2019, GEOSCIENCE Support Services prepared a regional hydrogeologic modeling analysis, entitled the “Phase 1B Hydrologic Evaluation” (GEOSCIENCE Support Services, 2019a). The Study includes an evaluation of the amount of NCMA groundwater pumping that could occur without inducing seawater intrusion. The Baseline scenario of that evaluation modeled a 5-year municipal pumping average of 1,080 AFY across all NCMA agencies, under historical hydrology (1977–2016).
Applying the City's approximately 32.5 percent NCMA entitlement share1to this Baseline total yields an estimated City share of approximately 351 AFY, significantly below the City's paper allocation and the current operational groundwater pumping volume identified in Section 3.1.2.1. While this has not been implemented, this Baseline-derived estimate is incorporated into the Future Vulnerabilities scenario of the water supply evaluation model and represents a potentially materially different basis for long-term groundwater supply availability for the City.
3.1.3 Climate Change Effects
Climate change is expected to affect both supply and demand over the 30-year planning horizon.
Projections for the Central Coast indicate increased frequency and severity of drought and greater interannual variability in precipitation, which would reduce the reliability of Lopez Reservoir deliveries 1 Based on the City's 1,407 AFY entitlement (1,198 AFY under the 1983 Gentlemen's Agreement/2002 Groundwater Management Agreement, plus 209 AFY in agricultural conversion credits) relative to the 4,330 AFY municipal portion of the NCMA's court-established 9,500 AFY safe yield. [2025 NCMA Annual Report.] DRAFT Draft Long-Term Water Supply Study August 2026
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and groundwater availability. On the demand side, hotter and drier summers are likely to increase outdoor water use, partially offsetting conservation gains. The water supply evaluation model used in this Study is based on a 30-year historical hydrologic record (1996–2025) that includes the significant 2012–2016 and 2020–2022 drought periods. This historical record provides a reasonable stress test of supply adequacy under conditions broadly representative of what the City may face in coming decades.
The supplemental supply recommendations in Chapter 4 are sized to address deficits under drought conditions and are therefore implicitly designed to provide climate resiliency.
3.2 Water Supply Evaluation Model and Potential Water Supply Reductions
3.2.1 Model Description
The water supply evaluation model developed for this Study is an annual accounting model that simulates the City's water supply and demand balance over a 30-year planning horizon. The model uses a 30-year historical hydrologic record spanning 1996 through 2025 as the basis for simulating supply availability, mapping each hydrologic year onto a scenario year (Year 1 through Year 30). The model structure for the existing water supply evaluation is as follows:
• Demand: Projected annual demand is applied for each scenario year based on the demand projection corresponding to the selected scenario.
• Lopez supply: The 800 AFY allocation is applied, subject to LRRP or LDRP reductions based on reservoir storage levels in the corresponding historical hydrologic year. • Groundwater supply: Groundwater is applied to meet remaining demand after Lopez allocation, up to the maximum available groundwater supply under each scenario. • Deficit: Any remaining unmet demand after all available supplies are applied is recorded as the annual deficit.
The model structure described above applies to the evaluation of the City's existing water supply portfolio. For the supplemental alternatives evaluation presented in Chapter 4, the model uses a modified supply priority structure in which groundwater is dispatched first, followed by the supplemental water supply, and then Lopez Reservoir water. This modified structure reflects the operational strategy of preserving Lopez Reservoir allocations during years when groundwater and supplemental supply are sufficient to meet demand, maximizing the reliability of the City’s water supply portfolio by allowing unused Lopez water to be carried over in storage for use in subsequent dry or drought yearsDRAFT .
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3.2.2 Model Scenarios
The Water Supply Evaluation modelling includes four scenarios. The two primary scenarios, Current Vulnerabilities and Future Vulnerabilities, form the basis of the City’s existing water supply portfolio reliability evaluation and the development of recommendations for supplemental supply needs for the City. Two additional sensitivity analysis scenarios are included to bracket the range of possible supply and demand conditions; these scenarios are not considered the primary basis for supplemental supply planning but provide useful context for understanding the full range of the City's potential supply needs.
Table 7. Primary Model Scenarios
Scenario Demand Basis Lopez Supply Groundwater Supply
Current Vulnerabilities Planned Projects
Demand 800 AFY with LRRP reductions Historical average (500 AFY) Future Vulnerabilities Planned Projects
Demand
800 AFY with HCP LDRP
reductions
NCMA modeling baseline
entitlement (~351 AFY)
Table 8. Sensitivity Analysis Modeling Scenarios
Scenario Demand Basis Lopez Supply Groundwater Supply
Future Vulnerabilities &
High Demand
UWMP Demand (117
GPCD)
800 AFY with HCP LDRP
reductions
NCMA modeling baseline
entitlement (~351 AFY)
Future Vulnerabilities &
No Growth
5-Year Average Demand
(1,220 AFY)
800 AFY with HCP LDRP
reductions
NCMA modeling baseline
entitlement (~351 AFY)
3.2.3 Primary Scenario Model Results
The following summarizes the model results under the two primary scenarios. Figures 3 and 4 show the annual supply and demand balance for each primary scenario over the 30-year planning horizon.
3.2.3.1 Current Vulnerabilities Scenario
The Current Vulnerabilities scenario assumes historically achievable groundwater production of 500 AFY and current Lopez Lake allocation of 800 AFY along with LRRP-based reductions. Annual supply deficits are projected in the model beginning in Year 3 of the planning period though the deficits are relatively small over the first few years. Projected deficits range from approximately 15 AFY in Year 3 to 241 AFY during drought years over the 30-year study period, with a projected deficit of 164 AFY at the end of the study period. This scenario most closely reflects the supply conditions that the City has experienced in recent years and is considered the primary basis for near DRAFT-term supplemental water supply planning.
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Figure 3. Water Supply Evaluation Model Current Vulnerabilities Scenario DRAFT
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3.2.3.2 Future Vulnerabilities Scenario
The Future Vulnerabilities scenario incorporates both HCP LDRP-based Lopez reductions and the NCMA regional groundwater modeling baseline constraint (~351 AFY), resulting in substantially larger deficits beginning in Year 1 of the planning period. Modeled annual deficits range from approximately 143 to 471 AFY, with the largest deficits occurring during extended drought periods. This scenario reflects a potentially realistic projection of future water supply conditions depending on the status of the HCP process and regional groundwater management constraints tighten over time and is considered the primary basis for mid-to-long-term supplemental supply planning.
Figure 4. Water Supply Evaluation Model Future Vulnerabilities Scenario
3.2.4 Sensitivity Analysis Scenario Results
Two additional scenarios, shown in Figures 5 and 6, were modeled to test the sensitivity of the results to assumptions at the upper and lower bounds of the range of plausible supply and demand conditions.
These scenarios are not considered the primary basis for supplemental supply planning but provide useful context for understanding the robustness of the Study's conclusions.
3.2.4.1 Future Vulnerabilities & High Demand Scenario
The Future Vulnerabilities & High Demand scenario applies the Future Vulnerabilities supply constraints (HCP LDRP-based Lopez reductions and the NCMA groundwater modeling baseline entitlement) to the higher demand projection from the City's 2020 UWMP (117 GPCD). The City's actual 5-year average demand from 2021 through 2025 has been approximately 85 GPCD, significantly below the 2020 UWMP projection, attributed to continued conservation progress since the UWMP was prepared. As a result, the DRAFT Draft Long-Term Water Supply Study August 2026
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117-GPCD assumption is considered an upper-bound condition that is unlikely to materialize given recent water use trends. Under this scenario, deficits occur in every year of the planning horizon, beginning at approximately 242 AFY in Year 1. Because demand grows steadily under the UWMP projection, deficits increase throughout the planning period, reaching a maximum of approximately 745 AFY in Year 28 corresponding to the 2022–2023 drought period, when LDRP-based Lopez reductions compound the effect of elevated demand. This scenario illustrates the magnitude of supply need that could emerge if both demand growth and supply restrictions exceed the primary projections.
Figure 5. Water Supply Evaluation Model Future Vulnerabilities & High Demand Scenario DRAFT Draft Long-Term Water Supply Study August 2026
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3.2.4.2 Future Vulnerabilities & No Growth Scenario
The Future Vulnerabilities & No Growth scenario applies the Future Vulnerabilities supply constraints (HCP LDRP-based Lopez reductions and the NCMA groundwater modeling baseline entitlement) to current average demand (1,220 AFY) with no additional development. Even with no growth in demand, the model projects supply deficits in every year of the planning horizon. In non-drought years, deficits are relatively consistent at approximately 69 AFY, reflecting the gap between the NCMA modeling baseline groundwater supply and the City's historical production when combined with full Lopez deliveries. Deficits increase to approximately 229 AFY during drought years, corresponding to the 2022–2023 hydrologic period when LDRP-based Lopez reductions are applied. This result confirms that the City's supplemental supply need could be driven by reliability constraints of its existing sources, not by growth, and that supplemental supply could be necessary to protect existing customers regardless of future development assumptions.
Figure 6. Water Supply Evaluation Model Future Vulnerabilities & No Growth Scenario
3.2.5 Overall Model Conclusions
The water supply evaluation model results collectively demonstrate the following:
• The City's current water supply portfolio, while nominally sufficient on paper, is projected to be operationally insufficient to reliably meet projected future demand. • Supply deficits are projected under both current and anticipated future supply conditions.
The Current Vulnerabilities scenario reflects conditions the City has already experienced, DRAFT Draft Long-Term Water Supply Study August 2026
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while the Future Vulnerabilities scenario reflects conditions that are reasonably foreseeable if the HCP process advances and/or regional groundwater constraints tighten. • The magnitude and frequency of projected deficits increase materially as HCP-related Lopez constraints and regional groundwater constraints are incorporated. • The No Growth sensitivity scenario indicates that the need for supplemental supply is not purely a function of growth, but also a function of supply vulnerability. • A supplemental supply is needed to address modeled deficits under the primary planning scenarios and to provide meaningful protection against drought-year shortfalls.
3.3 Recommended Supplemental Water Supply Quantity Threshold Over the course of the 30-year evaluation period, the water supply evaluation model projects maximum annual supply deficits of approximately 241 AFY under the Current Vulnerabilities scenario. On that basis, this Study establishes a minimum supplemental water supply quantity threshold of 241 AFY for the City to plan for near-term, realistic supply constraints. Chapter 4 applies this threshold to assess whether each of the eight supplemental water supply alternatives evaluated can realistically provide sufficient supply to address the City's needs. Alternatives that cannot meet this minimum quantity are not advanced as primary recommended supplemental supply alternatives and are therefore excluded from the in-depth reliability modeling and funding opportunities analysis.
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Chapter 4. Supplemental Water Supply Alternatives Evaluation This chapter defines potential supplemental water supply alternatives evaluated for the City and describes the evaluation process that was utilized to identify the recommended alternatives. The alternatives evaluated as part of this project, listed in alphabetical order, include:
• Conservation
• Desalination
• Local/Regional Water Purchase
• Purchase of State Water Project (SWP) Contract
• Recycled Water:
o Direct Potable Reuse (DPR)
o Indirect Potable Reuse (IPR)
o Non-Potable
• Stormwater Capture
Following an evaluation of the eight supplemental water supply alternatives, three of the alternatives were identified as the most viable for in-depth technical evaluation and modeling.
4.1 Overview of Supplemental Water Supply Alternatives
4.1.1 Conservation
Conservation, water-use efficiency improvements or demand management reduce potable water demand through improvements in how water is used by residential, commercial, institutional, and municipal customers. Measures may include replacement of inefficient fixtures and appliances, landscape conversion, improved irrigation practices and equipment, leak detection and repair, customer incentives, education, and other demand-management programs.
Unlike alternatives that develop a new source of water, conservation (or demand management) reduces the amount of supply needed to meet existing and future demands. Conservation programs can range from relatively low-cost behavioral and operational measures (e.g. managing sprinkler operations to eliminate overwatering) to more substantial investments in customer-side infrastructure (e.g. transition to more water efficient appliances). The amount of water that can be conserved depends on existing water-use patterns, prior conservation efforts, customer participation, and the extent to which additional reductions can be sustained over time.
California's legislative water conservation requirements have driven statewide conservation. The approach has shifted from broad voluntary goals to strict long-term mandates. Driven by severe multiyear droughts and climate change, the State evolved its policies from a 2010 target of cutting urban use by 20% (completed in the City by 2020). In 2016, Executive Order B-37-16 transitioned temporary emergency savings into permanent improvements, directing agencies to establish long-term water-use efficiency standards for indoor use, outdoor landscaping, and commercial losses. This direction was codified in the California Water Code in 2018 through Assembly Bill 1668 and Senate Bill 606 (Making Water Conservation a California Way of Life), requiring each urban retail water supplier to calculate an annual urban water use objective (UWUO) and to report its actual water use against that objective to the State Water Resources Control Board each year (California State Legislature, 2018). The UWUO is supplier-specific and is calculated as the sum of efficiency budgets for residential indoor use, residential outdoor irrigation, commercial, industrial, and institutional (CII) landscapes served by dedicated DRAFT Draft Long-Term Water Supply Study August 2026
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irrigation meters, and real water loss, plus any approved variances and provisions. Because the residential indoor standard steps down over time, from 55 GPCD through 2024 to 47 GPCD in 2025 and 42 GPCD in 2030, each supplier's objective declines over time. More than 400 suppliers statewide, including the City, are subject to these gradually declining budgets, with enforcement beginning in 2027 to protect long-term supplies through 2040.
Throughout this period the City has implemented numerous water conservation measures and reduced demand by approximately 31 percent since 2010, as was shown in the historical demand graph in Figure
1. Those reductions have placed the City well below its regulatory efficiency requirement. For Reporting Year 2024-25 (July 1, 2024 through June 30, 2025), the City reported actual water use approximately 17 percent below its UWUO, leaving a compliance margin of 16 GPCD, as shown in Table 9 (City of Grover Beach, 2026).
Table 9. 2024-25 Actual Water Use Comparison to UWUO
2024-25 Actual
Water Use
2024-25 Urban
Water Use
Objective
(UWUO)
Gallons 362,196,518.49 437,652,488.13
Gallons per
Capita per Day
(GPCD) 78.13 94.41
2024-25 Actual Water Use GPCD
below the UWUO: 16.28
2024-25 Actual Water Use %
below the UWUO: 17%
The concept of demand hardening is an important consideration when evaluating conservation as a supplemental supply strategy. As consumers adopt the least costly and least inconvenient conservation measures first, each additional increment of reduction becomes progressively more difficult and costly to achieve. The City’s customers have already reduced demand significantly, meaning that substantial further reductions through conservation alone are unlikely to be achievable at reasonable cost or without significant customer inconvenience. This constraint on additional conservation potential is reflected in the Study's supplemental water supply evaluation.
As noted in Section 2.1, the city is averaging 85-GPCD which is notably lower than the 117-GPCD used in the City’s planning documents which reflects the community-wide efforts at conservation. Additionally, Table 9 reflects the 2024-25 Actual Water Use and further identifies the successful conservation efforts achieved by the community. Therefore, the benefits of conservation have largely already been realized and additional conservation is a less-viable alternative in the overall water supply demand conversation because significant additional quantities of water are not expected to be generated from further conservation efforts. DRAFT
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4.1.2 Desalination
Desalination involves treating saline or brackish water to produce water suitable for potable use. For Grover Beach, desalination could potentially involve seawater desalination, participation in a regional desalination facility, or acquisition of water produced by a desalination project developed by another entity.
Desalination typically uses reverse osmosis membrane treatment (reverse osmosis) to remove salts and other constituents from the source water. A desalination project would generally require source-water intake or wells, treatment facilities, concentrate or brine management, conveyance facilities, and connections to the City's existing water system. Depending on the project configuration, desalination can provide a supply that is substantially independent of precipitation and conventional surface-water availability.
There is currently no operational desalination facility serving urban supply in San Luis Obispo County. In 2015, the SLOCFCWCD developed the San Luis Obispo County Desalination Opportunities Summary Report which identified the opportunities and challenges of desalination as a water supply for the County (SLOCFCWCD, 2015). Since that time, the SLOCFCWCD has continued to investigate the feasibility of desalination as a new coastal water supply.
The SLOCFCWCD is currently leading a regional effort to identify and, if feasible and regionally supported, implement a local ocean desalination project. All seven cities including Grover Beach along with numerous other local agencies are regional partners involved in this study. The project is investigating the feasibility of developing an ocean desalination treatment facility to supplement and offset existing potable water supplies in the region through a 5-phase effort called the Desalination Executable Solution and Logistics (DESAL) Plan. The 5 phases of the DESAL Plan are described below:
• Phase 1 - DESAL Plan Agreement Phase (Completed): SLOCFCWCD worked with local agencies to confirm their interest, develop an initial planning scope, launch stakeholder outreach, and pursue funding opportunities. In addition to the District, sixteen agencies, including Grover Beach, agreed to become DESAL Plan partners to be considered in the DESAL Plan. This phase has been completed.
• Phase 2 - DESAL Plan Development Phase: Focuses on preparing a United States Bureau of Reclamation (USBR) feasibility study to identify, evaluate and compare desalination project alternatives. This is the current phase of the project. • Phase 3 - Project Development Agreement Phase: Identify and confirm commitment from project partners to pay for and proceed with project development. The agreement would cover all activities needed to get to construction phase.
• Phase 4 - Project Development Phase: Detailed design, environmental and construction permits, operation and distribution plans, right of way negotiations, water supply and governance agreement negotiations and financial plan.
• Phase 5 - Project Governance Agreement and Construction: Execute governance agreement for construction and ongoing operation and construct the project.
As part of the Phase 2 feasibility study, DESAL Plan partners were surveyed to identify the volume of desalinated water each agency would seek to receive. Three of the five project alternatives evaluated in the draft feasibility study include the City as an end user: the Morro Bay Area alternative, the South San DRAFT Draft Long-Term Water Supply Study August 2026
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Luis Obispo County Wastewater Treatment Plant Area alternative, and the Nipomo Mesa Refinery Area alternative. In each case, the desalinated supply is characterized as an offset of existing supply rather than as a wholly new supply.
Under the Morro Bay Area alternative, desalinated water for South San Luis Obispo County end users would be conveyed through the City of San Luis Obispo and wheeled down the SWP Coastal Branch pipeline to the Lopez system. Under the South San Luis Obispo County Wastewater Treatment Plant Area alternative, by contrast, desalinated water would reach South San Luis Obispo County end users through a dedicated pipeline connecting directly to the Lopez pipeline. In both cases, the delivered supply would offset a reduction in Lopez Reservoir availability. The volume ultimately available to Grover Beach would depend on which alternative, if any, advances through the remaining DESAL Plan phases.
If feasible and supported, the DESAL project has a tentative design and permitting schedule from 2031 to 2041 and a construction schedule of 2041 to 2045 to become operational in 2045.
4.1.3 Local/Regional Water Purchase
Water purchases involve contractual arrangements through which water available to one agency or water user is made available to another. For the City, potential opportunities could include purchases from neighboring municipalities, water districts, agricultural water users, groundwater users, or other regional entities with available supplies or complementary water-management needs. These arrangements could be short-term and used primarily during droughts or other supply shortages, or they could form part of a longer-term water supply portfolio. Implementation would depend on the availability and legal characteristics of the water, willing counterparties, conveyance and storage capacity, regulatory requirements, and the terms of individual agreements.
For the City, potential arrangements could include short-term purchases from neighboring agencies with surplus supplies or regional long-term agreements under which the City receives water during dry-years or other water shortage years. Water supplies that the City could potentially be served under a purchase agreement include Lopez Reservoir water, SWP water, groundwater, or other supplies included in the seller’s portfolio.
There are multiple examples of local water purchases and several are listed below. • SLOCFCWCD SWP Transfers: The SLOCFCWCD has participated in SWP transfers in past years, recovering costs for subcontractors and preventing losses due to spills. Most recently, the SLOCFCWCD sold SWP water to the Westside Districts in 2024 and 2025. • Oceano CSD/Arroyo Grande Water Supply Agreement: Oceano Community Services District (CSD) provided the City of Arroyo Grande up to 100 AFY of supplemental water through a fiveyear temporary water supply agreement (2009–2014). • Nipomo Supplemental Water Project: The City of Santa Maria provides up to 2,500 AFY of supplemental water to Nipomo Community Services District, Woodlands Mutual Water Company, and Golden State Water Company.
4.1.4 Purchase of State Water Project Water Contract
This alternative would involve entering into a contractual agreement to purchase SWP water from an existing SWP contractor, such as the SLOCFCWCD, on a year-to-year basis, and obtaining the infrastructure necessary to deliver SWP water to Grover Beach. DRAFT Draft Long-Term Water Supply Study August 2026
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4.1.4.1 State Water Project Overview
The SWP is the largest state-owned water storage and delivery system in the United States. It is a system of aqueducts, pipelines, and pump stations that spans over 705 miles; moving water from Northern California to the San Francisco Bay Area, Central Valley, Central Coast, and Southern California (DWR, 2026). Immediately south of Kettleman City along the eastern edge of the San Joaquin Valley, the California Aqueduct Coastal Branch diverges from the main California Aqueduct. It is a 102-mile-long extension of the SWP to deliver water to Kern, Santa Barbara and San Luis Obispo counties (Carollo Engineers, 2012).
The California Department of Water Resources (DWR) owns and operates the SWP and administers long-term water supply contracts to 29 water agencies (SWP Contractors) for water service from the SWP. These contractors operate under water supply contracts created in the 1960s and amended since that provide access to the State’s water right, in return for all associated SWP capital and operating costs. The SLOCFCWCD and the Central Coast Water Authority (CCWA) are two SWP Contractors with the potential to serve water to the City. Being a SWP Contractor or having an agreement with a SWP Contractor is the only way to gain access to water in the SWP system (DWR, 2026). As a point of reference, the City declined participation in the SWP after a study session on April 8, 1991 and Council action on April 15, 1991.
4.1.4.2 State Water Project Allocation
The SWP does not deliver its contracted amount every year, the amount available to SWP Contractors varies each year based on several factors. In December of each year, DWR typically announces approximately how much water the project is likely to be capable of delivering in the coming year.
Following the initial announcement, DWR assesses the water supply for allocation and often updates the initial allocation if conditions warrant. The allocation is expressed as a percentage of the SWP Contractors total maximum water supply contract, such as 15 percent or 75 percent. DWR announces the final allocation in May or June, then makes deliveries to contractors based on the final allocation and subsequent contractor demands. The allocation is determined each year based on hydrologic classification, as well as reservoir storage, regulatory requirements, Sacramento – San Joaquin Delta conditions, operational constraints, and other factors can also affect annual allocation (DWR, 2025).
Figure 7 shows the SWP allocation from 1980 – 2026 (DWR, 2026). DRAFT Draft Long-Term Water Supply Study August 2026
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Figure 7. State Water Project Allocation 1980-2026
As shown in Figure 7, the historical record demonstrates that SWP water is a variable supply. Full or near-full allocations have been common during wet years, but allocations can decline substantially during prolonged drought and critical hydrologic conditions. Since 2000, allocations have ranged from 5% to 100%, including allocations of 5% in 2014, 2021, and 2022. The Final 2023 DWR Delivery Capability Report (DCR) estimates long-term average of SWP deliveries under existing conditions at roughly 2.2 million AFY, or approximately 53–54% of the maximum SWP total amount of about 4.13 million acrefeet per year (DWR, 2024).
4.1.4.3 State Water Project Contract Considerations
Obtaining a SWP contract would depend on identifying an available supply, negotiating appropriate contractual terms, securing the necessary approvals from DWR and other California regulatory agencies, and establishing a physical and contractual means of conveying and delivering the water to the City's water system. The amount of water available to the City each year under a SWP contract could vary depending on the underlying SWP entitlement, hydrologic conditions, regulatory requirements, conveyance capacity, and specific contractual agreement terms. Importantly, the conditions that drive reductions in SWP allocations, especially prolonged drought and critical hydrologic conditions, are the same conditions that reduce the reliability of the City's existing Lopez Reservoir and groundwater supplies, as described in Chapter 3. The years in which the City would receive the least water under a SWP contract would therefore tend to coincide with the years in which the City would be in greatest need of supplemental supply. However, the ability to store unused SWP water during higher allocation years could provide the City with a reserve of water that it could utilize during these extended drought periods.DRAFT
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The SLOCFCWCD has the potential to serve SWP water to the City. In July 2025, the SLOCFCWCD Board of Supervisors adopted updated State Water Project Water Transfer Policies that supersede the 2003 Excess Entitlement Policies and establish a formal framework for maximizing use of its SWP allocation through water transfers and exchanges among Subcontractors and eligible third parties. The policies establish a priority system under which Subcontractors retain first rights to all SWP water before surplus water may be made available to third parties. After Subcontractor needs are met, priority is given to local public water agencies using water for domestic purposes. The policies also establish a 5,000 AF reliability reserve within the SLOCFCWCD's 14,423 AF reserve amount that is available for short-term use to meet Subcontractor obligations and support countywide water resiliency needs. Notably, the policies acknowledge that existing SWP Subcontracts do not currently provide for a formal water transfer program and that amendments will be needed before long-term new contracts for surplus water can be established. These policies provide an emerging institutional framework that supports the City's pursuit of expanded SWP water access through the SLOCFCWCD and should be monitored closely as Subcontract amendments are developed (SLOCFCWCD, 2025b).
4.1.5 Recycled Water
Recycled water is municipal wastewater that has been treated to allow for its beneficial reuse rather than being discharged for disposal following treatment. The level of treatment and the manner in which the recycled water is used distinguish the three recycled water alternatives considered in this evaluation: Indirect Potable Reuse (IPR) recycled water, Direct Potable Reuse (DPR) recycled water, and Non-Potable recycled water. Non-Potable recycled water is used for approved non-potable purposes, such as landscape irrigation, thereby offsetting potable water demand. IPR uses advanced treatment to produce highly purified water that is introduced into an environmental buffer, such as a groundwater basin or reservoir, before ultimately becoming part of the potable water supply. DPR also uses advanced treatment but introduces purified recycled water into the potable water supply system without first passing through an environmental buffer. In general, the progression from non-potable reuse to IPR and DPR expands the potential uses of recycled water and the portion of wastewater that may contribute to potable supply, while also requiring increasingly sophisticated treatment, monitoring, operational controls, and regulatory compliance. From a regulatory standpoint, the California Coastal Commission (Commission) has indicated that development of a recycled water facility is likely necessary before the Commission will consider permitting for a desalination project.
4.1.5.1 Direct Potable Reuse
DPR involves advanced treatment of municipal wastewater to produce purified water that is introduced into a potable water supply system without first passing through an environmental buffer such as a groundwater basin or reservoir. The purified water undergoes multiple treatment barriers, extensive monitoring, and additional safeguards before entering the potable water system.
A DPR project serving the City could provide a locally generated potable supply derived from wastewater that is produced relatively consistently throughout the year. Implementation would require advanced treatment facilities, appropriate integration with the potable water system, monitoring and operational safeguards, regulatory approval, and potential coordination with regional wastewater treatment providers. As with other recycled-water alternatives, the ultimate quantity of supply would be influenced by wastewater flows and the portion of those flows that can be captured and treated for reuse. DRAFT
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4.1.5.2 Indirect Potable Reuse
IPR involves advanced treatment of municipal wastewater followed by introduction of the purified water into an environmental buffer before it is ultimately recovered for potable use. The environmental buffer is typically a groundwater basin or surface-water reservoir and provides storage, additional treatment, and separation between the recycled-water treatment process and the potable water supply system.
For the City, an IPR project could potentially involve advanced treatment of wastewater followed by groundwater recharge, with the water subsequently recovered through groundwater production wells.
A project would require advanced treatment facilities, recharge or injection facilities, appropriate groundwater conditions, monitoring, permitting, and integration with the City's existing water supply and treatment system. The quantity of water available would be related primarily to wastewater flows, treatment capacity, recharge and recovery capabilities, and applicable regulatory requirements.
IPR as the recycled water alternative could bolster the City's existing groundwater supply by increasing recharge to the basin, protecting against seawater intrusion and making use of wastewater that is currently discharged to the ocean for disposal.
4.1.5.3 Non-Potable Recycled Water
Non-Potable recycled water involves treating municipal wastewater to a level appropriate for uses that do not require potable-quality water. Potential applications include landscape irrigation, parks, schools, and commercial landscaping, certain industrial uses, and other approved non-potable uses.
For the City, Non-Potable recycled water could offset existing potable water use by replacing potable supplies currently used for appropriate non-potable purposes. Implementation could require additional wastewater treatment facilities, storage, pumping facilities, and a separate distribution or "purple pipe" system to deliver recycled water to customers. The amount of potable water displaced would depend on the volume and seasonal pattern of suitable non-potable demands, the quantity of wastewater available for recycling, and the ability to economically connect potential recycled-water users.
Non-Potable recycled water is technically the simplest recycled water option but is constrained by the available non-potable demand and distribution costs, as it would require a separate water distribution system.
4.1.5.4 Local Recycled Water Efforts
The City does not operate its own wastewater treatment plant. Wastewater collected by the City is conveyed to the South San Luis Obispo County Sanitation District (SSLOCSD) treatment plant in Oceano.
The City creates approximately 1,000 acre-feet a year in wastewater annually. This wastewater stream is useful as an indication of the upper physical scale of the resource, but it should not be treated as 1,000 AFY of recoverable supply; treatment losses, minimum process flows, seasonal conditions, ownership/allocation among SSLOCSD participants, and project configuration could reduce the usable amount to approximately 700 AFY. This can be used as a guideline, but there are ways to change this limitation. For example, regionalization can allow wastewater generated in one jurisdiction to become a regional supply benefiting the shared groundwater basin. DRAFT Draft Long-Term Water Supply Study August 2026
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Several recycled water projects have been developed within San Luis Obispo County that could have applicable lessons learned for the City. These are listed below in Table 10, with treatment and distribution capacities expressed in million gallons per day (MGD).
Table 10. Recycled Water Projects in San Luis Obispo County Project Reuse Type Capacity Current Status
San Luis Obispo
Treatment Plant
Tertiary nonpotable reuse
5.0 MGD average
treatment; recycled-water
distribution capacity up to
2.5 MGD
Operating
Los Osos Water
Recycling Facility
Tertiary nonpotable reuse 1.2 MGD design capacity Operating Paso Robles
Wastewater
Treatment Plant
Tertiary nonpotable reuse
4.9 MGD treatment /
planned recycled-water
supply capacity
Treatment operating;
distribution system
expanding
Morro Bay Water
Reclamation Facility IPR
0.97 MGD permitted
treatment capacity
Treatment operating; IPR
implementation underway
Pismo Beach Central
Coast Blue project
IPR TBD Under design
4.1.6 Stormwater Capture
Stormwater capture involves collecting runoff generated during rainfall events and retaining or diverting that water for beneficial use rather than allowing it to immediately discharge to receiving waters.
Captured stormwater can potentially be stored in surface facilities, infiltrated into the groundwater basin, or conveyed to dedicated groundwater recharge facilities.
For the City, this alternative could include local infiltration projects, detention or retention basins, modifications to existing drainage infrastructure, or participation in larger regional stormwater capture and groundwater recharge projects. When used for groundwater recharge, captured water could increase groundwater storage and potentially provide water that can later be recovered through existing or new production wells. The amount of water available would vary considerably from year to year because stormwater generation depends on precipitation, runoff conditions, available capture capacity, and the ability of the groundwater basin to accept and store recharge.
The effectiveness of stormwater capture as a groundwater recharge strategy for the City is constrained by the hydrogeologic characteristics of the NCMA. According to DWR's Bulletin 63-3 (DWR, 1970), the deep aquifers underlying the City of Grover Beach are recharged primarily from subsurface groundwater inflow from the east, where overlying confining layers are thin to nonexistent, rather than from direct surface infiltration. The deep aquifer system is recharged to a lesser extent by percolation of direct precipitation and agricultural return flow (GSI Water Solutions, 2024). This is corroborated by groundwater modeling conducted for a proposed infiltration pond in the area, which found that simulated groundwater mounding from infiltration primarily affects the shallow aquifer and has DRAFT Draft Long-Term Water Supply Study August 2026
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negligible to no impact on the deep aquifer due to confinement between the shallow and deeper aquifer systems (GEOSCIENCE Support Services, 2019b).
Stormwater infiltration in the City would therefore be most effective at increasing water storage in the shallow aquifer, with only limited and gradual benefit to the deeper aquifer where the City's municipal production wells are completed. Stormwater capture projects in the area could nonetheless provide some benefit to the regional groundwater system, and existing stormwater retention ponds within the City already provide a degree of shallow aquifer recharge. Any future stormwater capture project would warrant site-specific hydrogeologic investigation to assess recharge potential and potential shallow aquifer water quality implications before implementation.
Numerous local stormwater projects have been planned and completed that capture and infiltrate stormwater; however, no large-scale stormwater capture project with water supply as its primary purpose and a defined recovery component currently exists in the region. This limits the near-term potential of stormwater capture as a standalone supplemental supply alternative for the City, though it may have value as a component of a broader conjunctive use strategy.
4.2 Scoring & Ranking of Supplemental Water Supply Alternatives The water supply sources described in the preceding sections represent a range of potential alternatives for improving the long-term reliability, resiliency, and sustainability of the City's water supply portfolio.
The alternatives can differ in the type of water they may provide, their performance under varying hydrologic conditions, cost, implementation requirements, environmental effects, and potential impacts and benefits to the community. To provide a consistent basis for comparison, each alternative was evaluated using a common set of criteria and scoring methodology.
The evaluation is intended as a planning-level comparison of the relative strengths and limitations of each alternative; this is not a detailed feasibility analysis or selection of a specific project. Several of the alternatives could be implemented in different configurations, at different scales, or through regional partnerships that would affect their ultimate cost, yield, reliability, and feasibility. Accordingly, the evaluation relies on currently available information and reasonable planning-level assumptions regarding how each alternative could be implemented for the City.
Each alternative is evaluated against the following criteria addressing:
• Reliability
• Resiliency
• Life-cycle Cost
• Quantity of Supply
• General Feasibility
• Timing
• Environmental Impacts
• Environmental Justice
A numerical scoring system is used to characterize the relative performance of the alternatives under each criterion allowing development of an overall comparative score and ranking for each water supply alternative. The resulting scores and rankings should be considered a decision-support tool rather than a definitive determination of the preferred water supply strategy. Individual alternatives may provide DRAFT Draft Long-Term Water Supply Study August 2026
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benefits that are not fully reflected by a single composite score, and some alternatives may provide greater value when implemented in combination with other supplies.
4.2.1 Evaluation Criteria
The water supply alternatives were evaluated using a common set of criteria intended to reflect the primary considerations affecting the value and suitability of a potential water supply for the City. The criteria consider not only the amount of water that an alternative may provide, but also the dependability of that supply, its long-term cost, implementation considerations, and potential environmental and community effects. Applying the same criteria to each alternative provides a consistent and transparent framework for comparing substantially different types of water supply alternatives.
The evaluation criteria are summarized below in Table 11. Each criterion is defined to address a distinct aspect of water supply performance and is subsequently assigned a numerical score to support the comparative evaluation of the alternatives.
Table 11. Evaluation Criteria Definitions and Example Considerations Criterion Definition Example Considerations
Reliability
Consistency and predictability of
supply delivery under normal
operating conditions year over
year.
Dependence on precipitation, imported
supplies, wastewater generation,
groundwater conditions, long-term yield.
Resiliency
Ability of the supply source to
perform during emergencies or
disruptions to other supplies.
Redundancy, emergency operation, local
control, recovery time, vulnerability to
single-point failures.
Life-Cycle Cost
Total cost to develop, operate,
maintain, rehabilitate, and
eventually replace facilities over
the planning horizon.
Capital cost, financing, energy, staffing,
O&M, replacement, asset life.
Quantity of
Supply
Amount of water that can
reasonably be produced and the
flexibility to expand production
over time.
Average annual yield, scalability, hydrologic
limits, wastewater availability.
General
Feasibility
Likelihood the alternative can be
implemented, considering
regulatory, institutional, political,
and community acceptance
hurdles.
Permitting pathway and regulatory
precedent, partner agency agreements,
land and site availability, public
acceptance, adjudication or water right
constraints, grant and funding eligibility.
Timing
Time required from the decision to
proceed until the supply is
available for use.
Timeline for planning, California
Environmental Quality Act (CEQA) filings,
discretionary permitting, design and
procurement, construction, startup and
commissioning; ability to phase increments
or accelerate delivery. DRAFT
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Environmental
Impacts
Overall environmental effects
associated with development and
operation of the alternative.
Habitat impacts, groundwater conditions,
marine impacts, energy consumption,
greenhouse gas emissions, water quality
improvements.
Environmental
Justice
Distribution of project burdens
and benefits across the
community, with attention to
disadvantaged and lower-income
neighborhoods.
Facility siting and host neighborhood,
construction traffic, noise and air quality,
rate and affordability impacts, access to
benefits, meaningful community
engagement.
4.2.2 Scoring Method
Each water supply alternative was assigned a score for each evaluation criterion using a consistent fivepoint scoring scale. Scores range from 1 (least favorable) to 5 (most favorable) and are intended to represent each alternative’s relative performance for the City. Where practical, quantitative thresholds or other measurable indicators were used to define the scoring categories. For criteria that are inherently more qualitative, scores were based on available technical information, experience from comparable projects, local and regional examples, and professional judgment.
The scoring framework is intended to provide sufficient differentiation among the alternatives while recognizing the planning-level nature of the evaluation and the uncertainty associated with projects that have not yet been fully defined. The scores should therefore be interpreted as comparative indicators rather than precise measures of project performance. A common scoring framework was applied to all alternatives to provide a transparent and consistent basis for comparison. The criterion-specific scoring frameworks used in the evaluation is summarized below in Table 12.
Table 12. Evaluation Criteria Scoring Frameworks
Supply Alternative Scoring
Criteria Scoring Framework
Reliability
5- Excellent reliability
4- Good reliability
3- Moderate reliability
2- Limited reliability
1- Poor reliability
Resiliency
5- Excellent resiliency
4- Good resiliency
3- Moderate resiliency
2- Limited resiliency
1- Poor resiliency
Life-Cycle Cost
5- <$3M in total cost over 30 years for 500 AF
4- $3M-$6M in total cost over 30 years for 500 AF
3- $6M-$9M in total cost over 30 years for 500 AF
2- $9M-$12M in total cost over 30 years for 500 AF
1- >$12M in total cost over 30 years for 500 AF DRAFT
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Quantity of Supply
5- >=1,000 AFY
4- 500-999 AFY
3- 300-499 AFY
2- 100-299 AFY
1- <100 AFY
General Feasibility
5- Little to no challenges
4- Limited challenges
3- Moderate challenges
2- Major challenges
1- Severe challenges
Timing
5- <3 years for supply to be available
4- 3-7 years for supply to be available
3- 7-10 years for supply to be available
2- 10-14 years for supply to be available
1- >14 years for supply to be available
Environmental Impacts
5- Little to no adverse impacts
4- Minor adverse impacts
3- Moderate adverse impacts
2- Major adverse impacts
1- Severe adverse impacts
Environmental Justice
5- Little to no uneven siting burden
4- Minor uneven siting burden
3- Moderate uneven siting burden
2- Major uneven siting burden
1- Severe uneven siting burden
The general five-point scoring scale was further defined, see below, for each evaluation criterion to provide a consistent basis for assigning scores. Where sufficient information is available, the scoring definitions incorporate quantitative or readily identifiable performance characteristics. Other criteria require a more qualitative assessment based on the characteristics of the alternative, available technical information, local and regional experience and application, and professional judgment. In all cases, a higher score represents more favorable performance anticipated for each water supply alternative from the perspective of the City.
4.2.2.1 Reliability
Reliability evaluates the ability of an alternative to provide water or reduce potable water demand during droughts when additional supply is most needed. Alternatives that are largely unaffected by local and statewide hydrologic conditions receive higher scores. Table 13 defines each reliability score. DRAFT Draft Long-Term Water Supply Study August 2026
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Table 13. Reliability Score Definitions
Score Definition
5 – Excellent Reliability
Supply or demand reduction is highly dependable during drought; availability is largely independent of hydrologic conditions and existing water supplies.
4 – Good Reliability Supply remains substantially available during drought, although some reduction or limitation may occur under severe conditions. 3 – Moderate Reliability Supply remains moderately available drought. 2 – Limited Reliability Supply availability is substantially reduced during drought when additional water is most needed.
1 – Poor Reliability Supply is generally unavailable, severely reduced, or dependent on the same conditions affecting existing supplies during drought.
4.2.2.2 Resiliency
Resiliency evaluates the ability of a water supply alternative to avoid or respond to natural disasters, infrastructure failures or other potential acute supply interruptions. It is distinguished from reliability in that reliability emphasizes performance during droughts, while resiliency addresses the ability for a supply alternatives ability to absorb, adapt to, and recover from disruptive or unanticipated events.
Table 14 defines each resiliency score.
Table 14. Resiliency Score Definitions
Score Definition
5 – Excellent
Resiliency
Supply significantly diversifies the City's supply portfolio and substantially improves its ability to withstand and recover from disruptive or unanticipated events.
4 – Good Resiliency
Supply adds meaningful diversification and improves the City's ability to withstand most disruptive or unanticipated events, with some remaining overlap in risk exposure with existing supplies.
3 – Moderate
Resiliency
Supply offers some diversification benefit and modestly improves the City's ability to withstand disruption, but shares meaningful risk exposure with existing supplies.
2 – Limited
Resiliency
Supply largely duplicates existing supply vulnerabilities, providing minimal improvement to the City's ability to withstand disruptive or unanticipated events.
1 – Poor Resiliency Supply adds negligible diversification and does not improve the City's ability to withstand or recover from disruptive or unanticipated events.
4.2.2.3 Life-Cycle Cost
Life-cycle cost considers the long-term financial requirements associated with developing, operating, maintaining, and ultimately replacing or renewing the infrastructure or programs necessary to implement an alternative. The evaluation considers capital costs, operations and maintenance costs, energy requirements, replacement costs, and other significant long-term financial obligations. Higher DRAFT Draft Long-Term Water Supply Study August 2026
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scores represent alternatives expected to have lower overall life-cycle costs to the City. Table 15 defines each life-cycle cost score and quantitative measure.
Table 15. Life-Cycle Cost Score Definitions
Score Definition Quantitative Measure
5 – Excellent Life
Cycle Cost
Very low capital requirements and/or
operating costs; primarily uses existing
infrastructure or programs and requires
limited long-term financial commitment.
<$3M in total cost over 30
years for 500 AF
4 – Good Life Cycle
Cost
Relatively low to moderate capital and
operating costs; limited new infrastructure or
substantial opportunities to share costs
regionally.
$3M-$6M in total cost over
30 years for 500 AF
3 – Moderate Life
Cycle Cost
Moderate capital investment and ongoing
operating costs relative to the quantity and
benefits of supply provided.
$6M-$9M in total cost over
30 years for 500 AF
2 – Limited Life
Cycle Cost
High capital and/or operating costs requiring
substantial new infrastructure or long-term
financial commitments.
$9M-$12M in total cost over
30 years for 500 AF
1 – Poor Life Cycle
Cost
Very high capital and operating costs,
significant energy or replacement costs, or
financial requirements that are particularly
high relative to the supply provided.
>$12M in total cost over 30
years for 500 AF
4.2.2.4 Quantity of Supply
Quantity of supply evaluates the amount of potable water supply or potable demand reduction that could reasonably be provided to the City. The evaluation considers both the potential magnitude of the resource and practical limitations on the quantity that could be developed or used by the City. Some supplies may be built to suit the quantity of need, while others may be insufficient to provide the quantities of supply that the City is projected to need from a supplemental water supply. Table 16 defines each quantity of supply score and quantitative measure.
Table 16. Quantity of Supply Score Definitions
Score Definition Quantitative
Measure
5 – Excellent Quantity
of Supply
Could provide a substantial portion of the City's
existing and projected water demand and materially
change the City's overall supply portfolio.
>=1,000 AFY
4 – Good Quantity of
Supply
Could provide a significant supplemental supply or
demand reduction representing a meaningful
portion of City demand.
500-999 AFY DRAFT
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3 – Moderate
Quantity of Supply
Could provide a moderate supplemental
contribution to the City's water supply portfolio. 300-499 AFY 2 – Limited Quantity
of Supply
Expected to provide a relatively small contribution
to overall City demand. 100-299 AFY
1 – Poor Quantity of
Supply
Expected supply or demand reduction is minimal,
highly constrained, or insufficient to materially
affect the City's water supply portfolio.
<100 AFY
4.2.2.5 General Feasibility
General feasibility evaluates the technical, institutional, legal, regulatory, and implementation requirements associated with developing an alternative. Consideration is also given to the extent to which implementation depends on agreements, approvals, infrastructure, or actions outside the City's direct control. Table 17 defines each general feasibility score.
Table 17. General Feasibility Score Definitions
Score Definition
5 – Excellent Feasibility
Proven and readily implementable using existing or readily available infrastructure and authorities; limited permitting or institutional barriers; benefits could be realized relatively quickly.
4 – Good Feasibility
Technically and institutionally feasible with manageable permitting, infrastructure, or contractual requirements; implementation can occur within a reasonable planning horizon.
3 – Moderate Feasibility Feasible but requires significant planning, permitting, infrastructure, agreements, or coordination before implementation.
2 – Limited Feasibility
Substantial technical, regulatory, institutional, infrastructure, or contractual challenges; implementation would likely require an extended period.
1 – Poor Feasibility
Major unresolved technical, legal, regulatory, institutional, or infrastructure constraints create substantial uncertainty regarding DRAFT whether or when the alternative could be implemented.
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4.2.2.6 Timing
Timing evaluates the approximate time required for the alternative to begin providing meaningful water supply benefits. Table 18 defines each timing score.
Table 18. Timing Score Definitions
Score Definition
5 – Excellent Timing <3 years for supply to be available 4 – Good Timing 3-7 years for supply to be available
3 – Moderate Timing 7-10 years for supply to be available 2 – Limited Timing 10-14 years for supply to be available 1 – Poor Timing >14 years for supply to be available
4.2.2.7 Environmental Impacts
Environmental impacts evaluate the potential beneficial and adverse effects associated with development and operation of an alternative. Considerations include effects on aquatic and terrestrial ecosystems, groundwater and surface-water resources, water quality, energy use and greenhouse gas emissions, construction impacts, waste streams, and opportunities to provide broader environmental benefits. Higher scores represent alternatives with comparatively lower adverse impacts and/or greater environmental benefits. Table 19 defines each environmental impacts score.
Table 19. Environmental Impacts Score Definitions
Score Definition
5 – Excellent - Little to
No Adverse Impacts
Minimal adverse environmental effects and/or substantial environmental benefits, such as reduced extraction from stressed supplies, improved groundwater conditions, water-quality benefits, or reduced discharge. 4 – Good - Minor
Adverse Impacts
Relatively limited and manageable environmental impacts with some environmental benefits.
3 – Moderate –
Moderate Adverse
Impacts
Mix of environmental benefits and adverse impacts, or impacts that are generally manageable through conventional mitigation.
2 – Limited - Major
Adverse Impacts
Significant environmental impacts associated with construction or operation, substantial energy use, ecosystem effects, waste streams, or other environmental concerns requiring substantial mitigation. 1 – Poor - Severe
Adverse Impacts
Potential for major or difficult-to-mitigate environmental impacts, substantial resource or energy requirements, or significant effects on sensitive environmental resources. DRAFT
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4.2.2.8 Environmental Justice
Environmental Justice evaluates how the costs, benefits, environmental effects, and implementation consequences of an alternative would be distributed among Grover Beach residents and communities, with particular consideration of disadvantaged, lower-income, and other potentially vulnerable populations. The criterion incorporates environmental equity by considering whether environmental burdens and benefits are distributed fairly, while also considering affordability, access to water-supply benefits, rate impacts, community disruption, and proximity to project-related impacts. Table 20 defines each environmental justice score.
Table 20. Environmental Justice Score Definitions
Score Definition
5 – Excellent - Little
to no uneven siting
burden
Little to no uneven siting burden - Benefits are broadly and equitably distributed; affordability impacts are minimal or beneficial; the alternative reduces existing environmental or economic burdens and does not disproportionately affect vulnerable populations.
4 – Good - Minor
uneven siting burden
- Benefits are broadly distributed and adverse rate, construction, or environmental impacts are relatively minor, manageable, and unlikely to disproportionately affect vulnerable populations.
3 – Moderate -
Moderate uneven
siting burden
Moderate uneven siting burden - Both benefits and burdens are present; rate or localized impacts may affect some populations more than others but can reasonably be addressed through project design, mitigation, or affordability measures.
2 – Limited - Major
uneven siting burden
Major uneven siting burden - Significant affordability, rate, construction, siting, or environmental burdens are likely, with potential for disproportionate effects on lower-income or otherwise vulnerable populations.
1 – Poor - Severe
uneven siting burden
Severe uneven siting burden - Substantial costs or environmental burdens would be disproportionately borne by vulnerable populations, access to benefits is substantially unequal, or significant environmental justice concerns would be difficult to avoid or mitigate.
4.2.3 Alternatives Evaluation
The following presents the evaluation of each water supply alternative using the criteria and scoring methodology described above. Each alternative was assigned a score for reliability, resiliency, life-cycle cost, quantity of supply, general feasibility, timing, environmental impacts, and environmental justice based on available information, local and regional experience, and planning-level assumptions regarding potential implementation for the City. The tables summarize the score assigned to each alternative and the principal considerations supporting that score. These evaluations are intended to provide a consistent and transparent basis for comparing alternatives while recognizing that actual performance may vary depending on the ultimate project configuration, scale, contractual arrangements, and implementation conditions. DRAFT
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4.2.3.1 Conservation
Conservation and water-use efficiency provide a relatively low-cost and readily implementable means of reducing potable water demand and improving the performance of the City's existing water supplies.
Conservation is highly reliable because demand reductions can continue during drought and other supply shortages and implemented efficiency measures generally provide sustained reductions in water use. The alternative also performs favorably with respect to feasibility, timing, environmental impacts, and environmental justice because it requires limited new infrastructure and can provide benefits broadly throughout the community. That said, the principal limitation of conservation is the limited quantity of additional water savings that can reasonably be achieved. Grover Beach has already achieved significant reductions in per-capita water use, as described in Sections 2.1 and 4.1.1.
Conservation is therefore best considered an important component of the City's existing water supply portfolio and a means of reducing the quantity required from other sources, rather than a complete augmentation to address the need for additional water supply. The Conservation supplemental water supply evaluation scoring is shown in Table 21.
Table 21. Conservation Evaluation Scoring
Evaluation
Criterion Score Basis for Score
Reliability 5
Demand reductions remain available during drought and
supply disruptions, although additional conservation
potential may diminish as efficiency measures are
implemented.
Resiliency 5
Implemented efficiency measures generally provide
consistent and sustained demand reductions that reduce
demand and all times, including in emergencies and
disruptions.
Life-Cycle Cost 5
Generally requires substantially less capital investment and ongoing cost than development of new physical
water supplies.
Quantity of Supply 1
Can provide meaningful demand reduction, but total
savings are constrained by existing water use and the
practical limits of additional conservation.
General Feasibility 5
Well-established implementation framework with
minimal permitting, land, water-right, or interagency
requirements.
Timing 3
Additional programs and efficiency measures can begin
producing meaningful demand reductions within three
years.
Environmental
Impacts 5
Requires little to no new infrastructure and can reduce groundwater pumping, treatment, energy use, and
demands on other water supplies.
Environmental
Justice 5
Creates few concentrated physical impacts and can
provide benefits broadly across customers and
neighborhoods when programs are designed for
equitable participation. DRAFT
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4.2.3.2 Desalination
Desalination could provide the City with a substantial, locally controlled water supply (can build to suit) that is largely independent of local or statewide hydrologic conditions. A facility could be designed around the quantity of supply needed by the City, providing consistency and drought reliability. These characteristics make desalination particularly strong from a water-supply reliability and resiliency perspective.
The principal disadvantages are cost, implementation complexity, environmental effects, and development time. A desalination project would require substantial treatment and conveyance infrastructure, significant energy consumption, management of concentrate, and extensive environmental review and permitting. Coastal siting and intake requirements could present additional challenges. A City-only project could also have relatively high unit costs because of its small scale, making regional participation potentially important to project feasibility. The Desalination supplemental water supply evaluation scoring is shown in Table 22.
Table 22. Desalination Evaluation Scoring
Evaluation
Criterion Score Basis for Score
Reliability 5
Source-water availability is largely independent of
drought and annual hydrologic conditions.
Resiliency 4
Production can remain relatively consistent from year to year, not susceptible to regional or state-wide
emergency, although it is subject to facility operations, maintenance, electrical outages.
Life-Cycle Cost 1
Requires substantial capital investment and continuing
energy, treatment, maintenance, and replacement
expenditures.
Quantity of Supply 5
Facility capacity can generally be designed around the
desired supply quantity.
General Feasibility 1
Requires complex coastal, environmental, intake,
concentrate-disposal, siting, and other regulatory
approvals.
Timing 1
Planning, permitting, design, financing, and construction would likely require over 10 years.
Environmental
Impacts 1
Potential impacts include substantial energy use,
greenhouse gas emissions, intake effects, concentrate
disposal, and coastal development.
Environmental
Justice 1
Benefits would be distributed broadly, but new treatment and conveyance infrastructure could create localized
impacts depending on project siting; as well as high rates disproportionately impacting lower income residents.
4.2.3.3 Local/Regional Water Purchase
Local/Regional Water Purchases provide a flexible means of supplementing Grover Beach's water supply without necessarily requiring development of a new physical water source. Transactions could include short-term purchases, dry/shortage-year purchase arrangements, or longer-term agreements with DRAFT Draft Long-Term Water Supply Study August 2026
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neighboring or regional water agencies. Long-term agreements would likely provide the greatest reliability. Existing transactions in San Luis Obispo and Santa Barbara counties demonstrate that these mechanisms are already used to manage variable water supplies and available conveyance capacity.
The principal limitation is uncertainty regarding when and how much water would be available.
Purchases depend on willing counterparties, available surplus supplies, hydrology, conveyance capacity, contractual terms, and market conditions. They may therefore be valuable as a flexible or supplemental portfolio component rather than as the City's sole source of additional long-term supply. The Local/Regional Water Purchase supplemental water supply evaluation scoring is shown in Table 23.
Table 23. Local/Regional Water Purchase Evaluation Scoring Evaluation
Criterion Score Basis for Score
Reliability 3
Can provide drought-period supply, but availability
depends on counterparties and whether their supplies are affected by the same conditions.
Resiliency 4
Provides local supplies and only subject to facility
operations, maintenance, electrical outages.
Life-Cycle Cost 1
Generally requires limited new infrastructure where
existing conveyance and treatment facilities can be used, although future acquisition costs are uncertain.
Quantity of
Supply 3
Transactions can potentially be structured around City
needs, but actual quantities depend on available supplies and conveyance capacity.
General
Feasibility 5
Strong regional precedent exists and transactions can
generally use existing infrastructure, although agreements and applicable approvals are required.
Timing 5
Purchase agreements could potentially be implemented
within three years where willing counterparties and
conveyance capacity are available.
Environmental
Impacts 3
Limited new infrastructure is generally required, although source-area effects depend on the origin of transferred water.
Environmental
Justice 5
Existing infrastructure minimizes localized physical
burdens while supplemental potable supply benefits
customers throughout the City.
4.2.3.4 Purchase of State Water Project Contract
Purchase of a SWP Contract could provide a substantial additional supply while making use of existing regional conveyance and treatment infrastructure. The quantity acquired could potentially be structured around the City's needs, and recent transfers and exchanges involving Central Coast SWP contractors demonstrate institutional precedent for transactions involving agencies outside their existing participant structures. The alternative could therefore potentially be implemented more quickly and with substantially less new infrastructure than development of a major new local supply.
The primary limitation is the variability of the underlying SWP supply. Annual SWP allocations vary considerably in response to hydrology, storage, regulatory requirements, and conveyance and DRAFT Draft Long-Term Water Supply Study August 2026
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treatment infrastructure operations. Consequently, the reliability and resiliency of this alternative would depend significantly on the structure of the purchase agreement. A contractual arrangement involving carryover, storage, exchanges, or a defined minimum delivery could perform considerably better than simply acquiring a proportional share of annual SWP allocations. The Purchase of SWP Contract supplemental water supply evaluation scoring is shown in Table 24.
Table 24. Purchase of State Water Project Contract Evaluation Scoring Evaluation
Criterion Score Basis for Score
Reliability 3
SWP supplies can be substantially reduced during drought and other periods when additional supply is most needed.
Resiliency 3
The State-wide footprint is open to greater risk,
emergencies, and potential disruption. This includes
energy, environmental, and subsidence issues.
Life-Cycle Cost 3
Limited new infrastructure may be required, but recurring water acquisition, SWP, treatment, and conveyance costs can be substantial over 30 years.
Quantity of Supply 4
Purchase agreements could potentially be structured
around the quantity needed by Grover Beach, subject to
seller and system capacity.
General Feasibility 3
Existing infrastructure and transfer precedent are
favorable, but implementation requires a willing SWP
contractor and appropriate contractual and regulatory
approvals.
Timing 4
Could potentially be implemented within approximately
2–7 years if supply and existing conveyance capacity are available.
Environmental
Impacts 3
Limited new local construction may be required, but SWP supplies have energy and environmental effects
associated with statewide system operations.
Environmental
Justice 5
Existing infrastructure minimizes localized construction burdens, while the potable supply would benefit
customers throughout the City.
4.2.3.5 Direct Potable Reuse Recycled Water
DPR could provide a substantial and reliable potable supply by introducing advanced-treated recycled water directly into the City’s potable water supply system without an intervening environmental buffer.
Like IPR, the source is relatively independent of hydrology and is constrained primarily by wastewater availability and treatment capacity. DPR also avoids some of the recharge, injection, and recovery infrastructure required for IPR.
However, DPR requires sophisticated advanced treatment, redundancy, monitoring, operator capability, and integration with the potable water system. California now has a regulatory framework for DPR, but implementation experience remains more limited than for conventional recycled water or IPR. For a community the size of Grover Beach, regional implementation may be important to achieving appropriate project scale and operational efficiency. The DPR Recycled Water supplemental water supply evaluation scoring is shown in Table 25.
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Table 25. DPR Recycled Water Evaluation Scoring
Evaluation
Criterion Score Basis for Score
Reliability 5
Wastewater provides a highly dependable source largely
independent of hydrologic conditions.
Resiliency 4
Continuous wastewater generation and production can
remain relatively consistent from year to year, not
susceptible to regional or state-wide emergency, although it is subject to facility operations, maintenance, and
electrical outages.
Life-Cycle Cost 1
Advanced treatment, redundancy, monitoring, energy,
and specialized operations create high life-cycle costs.
Quantity of Supply 3
Can provide substantial potable supply but is ultimately constrained by available wastewater and treatment
recovery.
General Feasibility 1
Regulatory pathway exists, but implementation precedent remains limited and substantial technical, institutional, and public-acceptance requirements remain.
Timing 1
Project development is expected to require approximately 10–14 years.
Environmental
Impacts 4
Advanced treatment requires energy and residuals
management, but the project could reduce wastewater
discharge, and avoid some infrastructure associated with other alternatives.
Environmental
Justice 1
Significant costs can disproportionately impact lower
income and disadvantaged population.
4.2.3.6 Indirect Potable Reuse Recycled Water
IPR could provide the City with a substantial and relatively dependable local water supply by treating wastewater to advanced standards and introducing purified water into the groundwater basin before subsequent recovery for potable use. Wastewater generation provides a relatively consistent source independent of annual hydrology, while groundwater storage can further buffer differences between water production and demand. IPR could also provide broader groundwater-management benefits depending on the location and configuration of recharge or injection facilities, which can also add feasibility uncertainty.
The primary limitations are cost and implementation requirements. IPR requires advanced treatment, conveyance, recharge or injection infrastructure, extensive monitoring, regulatory approvals, and coordination among wastewater, groundwater, and water-supply agencies. Previous planning associated with other local IPR projects provides valuable local technical and institutional precedent, but significant project development would still be necessary. The IPR Recycled Water supplemental water supply evaluation scoring is shown in Table 26.
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Table 26. Indirect Potable Reuse Recycled Water Evaluation Scoring Evaluation
Criterion Score Basis for Score
Reliability 5
Wastewater provides a dependable source that is largely independent of drought and annual hydrology.
Resiliency 5
Production can remain relatively consistent from year to year, not susceptible to regional or state-wide emergency, although it is subject to facility operations, maintenance, electrical outages.
Life-Cycle Cost 1
Advanced treatment, recharge/injection, conveyance,
monitoring, and ongoing operations result in substantial life-cycle costs.
Quantity of Supply 3
Can provide substantial supply but is ultimately
constrained by available wastewater, treatment recovery, and recharge capacity.
General Feasibility 3
Established regulatory pathway and prior local planning exist, but implementation requires substantial
infrastructure, permitting, and interagency coordination.
Timing 2
Planning, permitting, design, and construction are
expected to require approximately 7–10 years.
Environmental
Impacts 4
Advanced treatment requires energy and residuals
management, but the project could reduce wastewater
discharge and provide groundwater benefits.
Environmental
Justice 1
Significant costs can disproportionately impact lower
income and disadvantaged population.
4.2.3.7 Non-Potable Recycled Water
Non-Potable recycled water could reduce the City’s potable water demand by substituting recycled water for irrigation and other suitable non-potable uses. The technology and regulatory pathways are well established, including operating projects within San Luis Obispo County. Wastewater generation is also relatively consistent, providing a predictable source of water that is largely independent of annual hydrology.
The principal limitation is that Non-Potable recycled water requires a separate distribution system and sufficient customers with separatable non-potable demands. Irrigation demand is seasonal, and the total potable-water offset is constrained by the location and magnitude of suitable uses. Consequently, substantial infrastructure investment may be required to produce a limited potable-water savings. The Non-Potable recycled water supplemental water supply evaluation scoring is shown in Table 27. There is the potential that Non-Potable recycled water could be utilized to offset the demand for groundwater in the neighboring Cienega Valley which would provide the potential to a much higher potential use for this resource. However, additional analysis would need to be done to determine the potential benefit to the City’s groundwater supplies and if it would be sufficient to meet the minimum supplemental water supply quantity threshold. DRAFT
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Table 27. Non-Potable Recycled Water Evaluation Scoring Evaluation
Criterion Score Basis for Score
Reliability 5
Wastewater is generated consistently, although the
potable offset depends on availability of non-potable
demand.
Resiliency 5
Production can remain relatively consistent from year to year, not susceptible to regional or state-wide emergency, although it is subject to facility operations, maintenance, electrical outages.
Life-Cycle Cost 3
Treatment is relatively established, but a separate
recycled-water distribution system can create significant capital costs.
Quantity of Supply 1
Limited by available wastewater and the quantity and
location of suitable non-potable demands.
General Feasibility 3
Established regulatory pathway and substantial local and statewide implementation precedent.
Timing 3
Could potentially be developed within approximately 3–7 years using established treatment and permitting
approaches.
Environmental
Impacts 5
Generally limited impacts with potential benefits from
reduced potable demand and wastewater discharge.
Environmental
Justice 1
Significant costs can disproportionately impact lower
income and disadvantaged population.
4.2.3.8 Stormwater Capture
Stormwater capture and groundwater recharge could provide a local water supply while also providing benefits related to drainage, flood management, water quality, and groundwater conditions. Projects can range from distributed infiltration improvements incorporated into streets, parks, and drainage facilities to larger regional capture and recharge projects. Water captured during wet periods could potentially be stored in the groundwater basin for later use.
The principal limitations of stormwater are typically hydrologic variability and groundwater recharge potential. Stormwater is inherently episodic, and annual capture may range from substantial quantities during wet years to little or no supply during dry years. Regional hydrogeologic data indicate that the deep aquifers underlying Grover Beach are recharged primarily from subsurface inflow from the east rather than from direct surface infiltration, meaning that stormwater infiltration projects in the City would primarily benefit the shallow aquifer rather than the deeper aquifer where municipal production wells are completed. This limits the recoverable yield of stormwater capture as a standalone supplemental water supply alternative, contributing to its lower score on the Quantity of Supply criterion. The alternative therefore performs relatively poorly as a predictable stand-alone annual supply but may have considerably greater value as part of a portfolio that uses groundwater storage to retain wet-year supplies for future use. DRAFT
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The Stormwater Capture supplemental water supply evaluation scoring is shown in Table 28.
Table 28. Stormwater Capture Evaluation Scoring
Evaluation
Criterion Score Basis for Score
Reliability 2
Availability declines substantially during drought, when supplemental supply is generally most needed.
Resiliency 2
Water recharged is limited by the resilience of
groundwater well operations; risk of mechanical
breakdown and energy supply.
Life-Cycle Cost 4
Costs vary considerably with project configuration and the extent to which existing drainage and public infrastructure can be used.
Quantity of
Supply 1
Long-term average supply is constrained by local
hydrology, runoff availability, and recharge capacity.
General
Feasibility 3
Implementation is feasible but meaningful supply may
require suitable land, recharge facilities, water-right analysis, and groundwater accounting.
Timing 4
Distributed projects could begin providing benefits within 3–7 years; larger regional facilities could require longer.
Environmental
Impacts 5
Generally limited adverse impacts with potential benefits for water quality, groundwater recharge, drainage, and
flood management.
Environmental
Justice 4
Projects can be distributed throughout the community and may provide drainage and water-quality benefits in
underserved areas.
4.2.4 Alternatives Scoring Summary and Ranking
While the scoring in Section 4.2.3 provides a useful relative comparison of alternatives across multiple criteria, a critical threshold consideration separate from the scoring is needed to determine whether each alternative can realistically provide sufficient water to address the City's supplemental water supply needs. As described in Chapter 3, the water supply evaluation model projects a maximum annual supply deficit of approximately 241 AFY under the Current Vulnerabilities scenario, which is the condition most reflective of near-term, realistic supply constraints. This establishes a minimum supplemental water supply quantity threshold of 241 AFY against which each alternative should be assessed.
A Quantity of Supply Threshold Analysis was therefore applied as a filter to the eight evaluated supplemental water supply alternatives following the preliminary scoring. Alternatives that cannot realistically provide a volume of supply of at least 241 AFY were screened out from the final determination of the three leading alternatives for prioritized consideration by the City. This two-step approach of scoring first then filtering by quantity ensures that the overall evaluation reflects both the qualitative characteristics of each alternative and its practical ability to close the City's supply gap. The results of the quantity of supply threshold analysis are shown in Table 29 below. DRAFT Draft Long-Term Water Supply Study August 2026
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Table 29. Quantity of Supply Threshold Analysis
Alternative Supply Score
Expected Quantity of
Supply (AFY)
Meets Minimum Supply
Quantity Target (241 AFY)?
Conservation 1 <100 No
Desalination 5 >=1,000 Yes
Local/Regional Water Purchase 3 300-499 Yes
Purchase of State Water Project
(SWP) Contract 4 500-999 Yes
Direct Potable Reuse (DPR)
Recycled Water 3 300-499 Yes
Indirect Potable Reuse (IPR)
Recycled Water 3 300-499 Yes
Non-Potable Recycled Water 1 <100 No
Stormwater Capture 1 <100 No
The following alternatives were determined to not have the ability to meet the quantity of supply threshold:
• Conservation: The City's water use has already declined by approximately 31 percent since 2010, and the City is currently meeting the State's 2040 water use efficiency budget. The achievable volume of additional conservation is therefore constrained by demand hardening — as the easiest and most cost-effective measures have already been implemented, each additional increment of reduction becomes progressively more difficult and costly to achieve. While conservation programs should continue, conservation alone cannot realistically provide the 241 AFY minimum of new firm supply needed to close the projected deficit.
• Non-Potable Recycled Water: Non-potable reuse is constrained by the volume of suitable non-potable demand within the City and the cost of constructing a separate distribution system. Given the City's size and land use mix, the quantity of water that could be produced and beneficially used through a tertiary irrigation reuse program is estimated to be well below the minimum 241 AFY threshold.
• Stormwater Capture: The volume of stormwater available for capture is highly variable year to year, limited by precipitation, drainage infrastructure, and the capacity of the groundwater basin to accept recharge. No large-scale stormwater capture project with a defined recovery component currently exists in the region. Stormwater is unlikely to provide a reliable volume at the 241 AFY threshold.
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Figure 8 presents the scoring results for all eight supplemental water supply alternatives across the evaluation criteria described in Section 4.2.3.
Alternatives that would not address the City’s supplemental water supply needs are shown below the Minimum Supply Quantity Threshold line in the chart.
Figure 8. Supplemental Water Supply Alternatives Evaluation Scoring
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Table 30 presents the final ranking of all eight alternatives, organized to distinguish between those that meet the Minimum Supply Quantity threshold and are recommended for in-depth analysis (above the line) and those that do not meet the threshold (below the line). Within each group, alternatives are ranked by score.
Table 30. Water Supply Alternatives Evaluation Ranking
Supplies that Meet Minimum Supply Quantity Threshold
Alternative Supply Ranking
Local/Regional Water Purchase 1
Purchase of State Water Project
(SWP) Contract
2 Indirect Potable Reuse (IPR)
Recycled Water
3 Direct Potable Reuse (DPR) Recycled
Water
4 Desalination 5
Supplies that do not Meet Minimum Supply Quantity Threshold Conservation 1
Non-Potable Recycled Water 2
Stormwater Capture 3
The three leading alternatives based on the ranking are Local/Regional Water Purchase, Purchase of SWP Contract, and IPR Recycled Water, followed by DPR Recycled water and Desalination. While desalination is technically capable of producing water at the required minimum supplemental supply quantity identified in this Study, its Feasibility and Timing scores reflect significant constraints and contributed to its placement below the three leading alternatives. The feasibility and timeline constraints for desalination on the Central Coast include California Coastal Act permitting, CEQA, and marine intake requirements that create a regulatory pathway of 10 or more years to first water delivery, and substantially high capital and operating costs compared to the other alternatives. DPR is also technically capable of producing the estimated minimum water supply quantity target, but California's DPR regulatory framework, while finalized in 2023, remains relatively new and untested at the local implementation level. DPR's lower Feasibility and Timing scores reflect the additional permitting complexity and longer anticipated implementation timeline compared to IPR.
Local/Regional Water Purchase, Purchase of SWP Contract, and IPR Recycled Water represent a complementary set of the three most viable supplemental water supply options that span a range of timelines, cost profiles, and supply reliability characteristics. Together they would provide the City with near-term, mid-term, and long-term pathways to closing its projected supply gap. Section 4.3 presents the in-depth technical analysis for each, including supply reliability modeling and preliminary cost and implementation schedule analysis. DRAFT
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4.3 Recommended Alternatives Supplemental Water Supply Evaluation This section presents the reliability modeling of the three recommended most viable water supply alternatives: Local/Regional Water Purchase, Purchase of SWP Contract, and IPR Recycled Water. To assess the contribution of each recommended supplemental water supply alternative to the City's supply reliability, a supplemental water supply evaluation model was developed for each alternative.
The priority of use reflected in the models is as follows: groundwater is utilized first, followed by the supplemental supply, and then Lopez Reservoir water. This order preserves Lopez Reservoir allocations for storage during years of surplus.
For each alternative, this section presents modeling results across a range of supplemental supply quantities bounded by the Study’s two primary modeling scenarios: Current Vulnerabilities and Future Vulnerabilities. The Current Vulnerabilities scenario is used to determine the minimum supplemental supply quantity needed to eliminate deficits over the 30-year planning horizon, that is, the smallest volume at which each alternative closes the projected supply gap under near-term, realistic supply conditions. The Future Vulnerabilities scenario is used to determine the maximum supplemental supply quantity that may ultimately be needed if anticipated future supply constraints materialize. Together, these two scenarios establish a supplemental supply quantity range for each alternative that reflects both near-term needs and longer-term planning prudence.
4.3.1 Current Vulnerabilities Supplemental Water Supply Evaluation Modeling The Current Vulnerabilities scenario pairs the Planned Projects Demand projection with the City's existing supplies under current constraints: an 800 AFY Lopez Reservoir allocation subject to LRRP drought-year reductions and groundwater production at 500 AFY. The modeling results and key assumptions for each of the three recommended water supply alternatives under the Current Vulnerabilities scenario are presented in the following sections.
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4.3.1.1 Local/Regional Water Purchase
Under the Current Vulnerabilities scenario, a 200 AFY Local/Regional Water Purchase supply is estimated to address projected supply deficits across the full 30-year planning horizon and consistently reduces the demand on the City’s Lopez Reservoir supplies, allowing unused Lopez allocations to accumulate in storage during normal years. The Local/Regional Water Purchase alternative is modeled as a firm supply of 200 AFY; a consistent, guaranteed volume delivered each year regardless of hydrologic conditions, reflecting the supply characteristics of an advanced water treatment facility producing purified water for groundwater recharge. This stored Lopez water reaches a maximum of approximately 593 AF in Year 9 of the model and is drawn upon during the 2016 and 2022 LRRP drought years (when Lopez deliveries are reduced to 720 AFY) to cover the remaining demand without deficit. The Local/Regional Water Purchase supply effectively converts what would otherwise be drought-year deficits into manageable shortfalls that stored Lopez water can bridge. The results are shown in Figure 9 below.
Figure 9. Supplemental Water Supply Evaluation Model - Current Vulnerabilities and Local/Regional Water Purchase Supply Scenario
It should be noted that the assumption of a firm 200 AFY supply is most appropriate for purchase arrangements involving a source that is independent of local hydrology, such as a groundwater-based supply or a recycled water source. Purchase arrangements that are dependent on surface water availability, SWP deliveries, or another hydrologically variable source may be subject to year-to-year variability in available supply, similar to the variability modeled for the Purchase of SWP Contract alternative described in Section 4.3.1.2. The actual reliability of a Local/Regional Water Purchase arrangement would depend on the specific source, seller, and contract terms ultimately negotiated.
4.3.1.2 Purchase of State Water Project Contract
Under the Current Vulnerabilities scenario, a 400 AFY SWP Table A entitlement comprised of a 200 AFY Water Service Amount and 200 AFY Drought Buffer is estimated to address projected supply deficits across DRAFT Draft Long-Term Water Supply Study August 2026
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the full 30-year planning horizon. This supplemental supply quantity consistently reduces the demand on the City’s Lopez Reservoir supplies, allowing unused Lopez allocations to accumulate in storage during normal years in addition to the hypothetical SWP storage accumulation modeled under this scenario.
Unlike the Local/Regional Water Purchase and IPR Recycled Water alternatives, which are modeled as firm supplies, SWP deliveries are subject to year-to-year variability based on the DWR annual allocation percentage, which has ranged from 5 percent to 100 percent of contractor entitlements over the historical hydrologic record.
The Purchase of SWP Contract alternative is therefore modeled as historical SWP annual allocation percentages from the 30-year hydrologic record (1996 through 2025), applied to the assumed SWP entitlement volume. The SWP allocation percentages used in the model are drawn from CalSim II output from the 2019 SWP Delivery Capability Report for the 1922 through 2003 period, which simulates SWP operations and Table A allocations under current levels of watershed development and regulatory operating constraints (DWR, 2019). CalSim II output was extended through 2019 using actual historical allocations as a starting point, with adjustments for years in which historical operating constraints differed materially from current conditions. Actual historical allocations were used for the 2020 through 2025 period. The results are shown in Figure 10 below.
Figure 10. Supplemental Water Supply Evaluation Model - Current Vulnerabilities and State Water Project Water Supply Scenario
The modeled 400 AFY Table A entitlement is comprised of a 200 AFY Water Service Amount, which represents the maximum volume the City could contractually deliver to its water system in any given year, and a 200 AFY Drought Buffer, which represents additional Table A allocation above the Water Service Amount that is available to the City each year but cannot be directly delivered, only stored. Modeling the Drought Buffer at 100 percent of the 200 AFY Water Service Amount is based generally on prevailing practice among SLOCFCWCD SWP Subcontractors, most of which hold a Drought Buffer equal to their Water Service Amount. Any unused Table A allocation, including the Drought Buffer, is carried over into DRAFT Draft Long-Term Water Supply Study August 2026
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SWP storage. This stored water can then be drawn upon in subsequent years when direct SWP deliveries fall short of the Water Service Amount due to low annual allocation percentages.
4.3.1.3 IPR Recycled Water
Under the Current Vulnerabilities scenario, a 200 AFY IPR Recycled Water supply is estimated to address projected supply deficits across the full 30-year planning horizon. Consistent with the approach used for the Local/Regional Water Purchase alternative, the IPR Recycled Water alternative is modeled as a firm supply for the purposes of the reliability analysis. Because the IPR Recycled Water alternative is modeled under the same firm supply assumption and priority of use structure as the Local/Regional Water Purchase alternative, the storage accumulation and utilization pattern is identical, with unused Lopez water building in storage over the planning horizon and being drawn upon in the 2016 and 2022 drought years to cover demand without deficit. The results are shown in Figure 11 below.
Figure 11. Supplemental Water Supply Evaluation Model - Current Vulnerabilities and IPR Recycled Water Supply Scenario
4.3.2 Future Vulnerabilities Supplemental Water Supply Evaluation Modeling The Future Vulnerabilities scenario pairs the Planned Projects Demand projection with more constrained supply assumptions: an 800 AFY Lopez Reservoir allocation subject to HCP LDRP-based reductions and groundwater production at the NCMA regional modeling baseline of approximately 351 AFY. The modeling results and key assumptions for each of the three recommended water supply alternatives under the Future Vulnerabilities scenario are presented in the following sections. DRAFT Draft Long-Term Water Supply Study August 2026
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4.3.2.1 Local/Regional Water Purchase
Under the Future Vulnerabilities scenario, a 350 AFY Local/Regional Water Purchase supply is estimated to address projected supply deficits across the full 30-year planning horizon. As with the Current Vulnerabilities scenario, the Local/Regional Water Purchase supply consistently reduces demand on Lopez Reservoir, allowing unused Lopez allocations to accumulate in storage during normal years.
However, because groundwater production is constrained to approximately 351 AFY under this scenario, Lopez Reservoir is drawn upon more heavily in non-drought years, and the stored Lopez water buffer that builds during surplus years is smaller than under the Current Vulnerabilities scenario. Despite this, the 350 AFY Local/Regional Water Purchase supply provides sufficient firm supply to cover the combined effect of reduced groundwater availability and LDRP-based Lopez reductions during drought years without deficit across the planning horizon. The results are shown in Figure 12. As noted in Section
4.3.1.1, the assumption of a firm supply is most appropriate for purchase arrangements involving a source that is independent of local hydrology. The reliability of a Local/Regional Water Purchase arrangement under Future Vulnerabilities conditions would depend on the specific source, seller, and contract terms negotiated, and should be evaluated in detail during the next phase of study.
Figure 12. Supplemental Water Supply Evaluation Model - Future Vulnerabilities and Local/Regional DRAFT Water Purchase Supply Scenario Draft Long-Term Water Supply Study August 2026
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4.3.2.2 Purchase of State Water Project Contract
Under the Future Vulnerabilities scenario, a SWP Table A entitlement of 700 AFY, comprised of a 350 AFY Water Service Amount and a 350 AFY Drought Buffer, is estimated to address projected supply deficits across the full 30-year planning horizon. The larger entitlement relative to the Current Vulnerabilities scenario reflects the increased supplemental supply needed to offset the combined effect of reduced groundwater production under the NCMA regional modeling baseline and more frequent and severe LDRP-based Lopez reductions. The larger Table A entitlement allows more SWP water to accumulate in SWP storage during high-allocation years, and combined with the Lopez storage buffer, eliminates deficits across the 30-year planning horizon. The results are shown in Figure 13.
Figure 13. Supplemental Water Supply Evaluation Model - Future Vulnerabilities and State Water Project (SWP) Water Supply Scenario DRAFT
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4.3.2.3 Indirect Potable Reuse (IPR) Recycled Water
Under the Future Vulnerabilities scenario, a 350 AFY IPR Recycled Water supply is estimated to address projected supply deficits across the full 30-year planning horizon under the Future Vulnerabilities scenario, consistent with the approach used for the Local/Regional Water Purchase supply alternative.
Because both alternatives are modeled under the same firm supply assumption and priority of use structure, the storage accumulation and utilization pattern is identical: unused Lopez water builds in storage during non-drought years and is drawn upon during LDRP drought years to cover demand without deficit. The results are shown in Figure 14.
Figure 14. Supplemental Water Supply Evaluation Model - Future Vulnerabilities and Indirect Potable Reuse (IPR) Recycled Water Supply Scenario DRAFT
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4.3.3 Summary of Supplemental Water Supply Evaluation Modeling Results Under the Current Vulnerabilities scenario, the minimum supplemental supply volume needed to eliminate deficits over the 30-year planning horizon is estimated to be 200 AFY for the Local/Regional Water Purchase and IPR Recycled Water alternatives, and a Table A entitlement of 400 AFY for the Purchase of SWP Contract alternative (comprised of a 200 AFY Water Service Amount and a 200 AFY Drought Buffer). Under the Future Vulnerabilities scenario, the minimum supplemental supply volume needed to eliminate deficits over the 30-year planning horizon is 350 AFY for the IPR Recycled Water and Local/Regional Water Purchase alternatives, and a Table A entitlement of 700 AFY for the Purchase of SWP Contract alternative (comprised of a 350 AFY Water Service Amount and a 350 AFY Drought Buffer).
Table 31 summarizes these estimated supplemental water supply quantity ranges.
Table 31. Summary of Estimated Supplemental Water Supply Quantity Ranges Alternative Current Vulnerabilities
(Minimum)
Future Vulnerabilities
(Maximum)
Local/Regional Water Purchase 200 AFY (firm) 350 AFY (firm) Purchase of SWP Contract
400 AFY Table A (200 AFY Water
Service Amount + 200 AFY
Drought Buffer)
700 AFY Table A (350 AFY Water
Service Amount + 350 AFY
Drought Buffer)
IPR Recycled Water 200 AFY (firm) 350 AFY (firm)
The range between the Current Vulnerabilities and Future Vulnerabilities scenarios for all three alternatives reflects the uncertainty in future supply conditions and establishes the planning envelope within which the City should evaluate its supplemental supply program. The larger SWP Table A entitlement in both scenariosreflects the additional allocation needed to build SWP storage that can cover demand during low-allocation drought years when direct SWP deliveries may be as low as 5 percent of entitlement. The City's ultimate supplemental supply target for each alternative will depend on how current and future vulnerabilities evolve, including potential advancement of the HCP process and changes in NCMA groundwater management constraints.
4.3.4 Preliminary Cost Analyses and Schedules
The detailed preliminary cost analyses and schedules for the recommended alternatives will be included in the final report. DRAFT
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Chapter 5. Water Supply Project Funding Opportunities Assessment This chapter assesses currently and potentially available funding sources for the three supplemental water supply alternatives recommended by this Study: Purchase of SWP Contract, Local/Regional Water Purchase, and IPR Recycled Water. For each alternative, this assessment considers existing City funding and rate-setting mechanisms, development impact fees, and state and federal grant and loan programs, evaluating which of these mechanisms may realistically apply given the alternative's specific structure.
Funding mechanisms often include stipulations about the eligible use of funds, which feeds directly into the analysis of options available for each alternative. The Purchase of SWP Contract and Local/Regional Water Purchase alternatives are, at their core, negotiated arrangements to secure a water supply, though each may also involve a capital infrastructure component depending on system conditions. This limits the applicability of some funding mechanisms discussed in this chapter and expands the relevance of others. The IPR Recycled Water alternative, by contrast, involves construction of an advanced treatment facility as its primary component, broadening the range of mechanisms that may apply. Each of the following sections addresses one alternative, organized by currently available and potentially available funding sources for each.
5.1 Assessment of Funding Sources for Purchase of State Water Project Contract The Purchase of SWP Contract alternative involves the acquisition of a contractual water entitlement, either through a permanent or long-term reassignment of a share of SLOCFCWCD's existing Table A allocation, or through the purchase of a separate entitlement from another State Water Contractor. This alternative also encompasses short-term to long-term agreements for a portion of another State Water Contractor's entitlement, which involve a similar contractual arrangement rather than a permanent purchase. However, hydraulic limitations at the City's Lopez Pipeline turnout may constrain delivery of an increased SWP entitlement and could require capital infrastructure improvements to address. The following sections address the funding landscape for both the negotiated purchase itself, including any associated buy-in cost, and any capital infrastructure needed to address these hydraulic limitations, considering both currently available and potentially available funding sources.
5.1.1 Currently Available Funding Sources
This section addresses currently available funding sources for the Purchase of SWP Contract alternative, specifically the negotiated purchase of an SWP entitlement and any associated buy-in cost. Currently, funding for both may be available through the City's existing City funding and rate-setting mechanisms, discussed below. The potential capital cost of infrastructure needed to address hydraulic limitations at the City's Lopez Pipeline turnout is a separate cost and is addressed only under Potentially Available Funding Sources in Section 5.1.2. This is because grant and loan programs for water supply projects are typically, with few exceptions, structured to fund capital construction or defined management and conservation actions: physical infrastructure that is planned, designed, permitted, and built, or specific programmatic activities such as water use efficiency or leak detection. The negotiated purchase and buy-in cost do not fit either category; this is fundamentally a transaction to secure a contractual right to water, not a facility to be constructed or a management practice to be implemented. Most state and federal funding programs explicitly limit eligible uses to capital costs (planning, design, and construction) or, in some cases, operations and maintenance of an already funded facility, and neither the negotiated purchase price of a water right nor a buy-in cost to access shared system capacity is typically an eligible use under these programs. Development impact fees and grant or loan funding may also apply to this DRAFT Draft Long-Term Water Supply Study August 2026
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alternative, discussed as potentially available mechanisms in Section 5.1.2. A narrow category of state and federal grants does provide funding for water acquisition, hauling, or emergency interties for small or disadvantaged communities facing a declared drought emergency or water system failure; however, the City's size as an Urban Water Supplier and the routine, non-emergency nature of this alternative likely make these programs inapplicable in this case.
5.1.1.1 Existing City Funding
Because neither the negotiated purchase price of a SWP entitlement nor a potential buy-in cost to formalize additional access to existing conveyance capacity is typically an eligible use under state or federal grant and loan programs, funding for this alternative is more practically drawn from the City's own internal funds rather than external grant or loan sources. These may include water enterprise fund reserves or ongoing water rate revenue collected from customers. The specific mix of internal funding the City would use is a topic for further discussion outside the scope of this assessment.
5.1.1.2 Rate Analysis Under Prop 218
If existing water enterprise fund reserves or current rate revenue are not sufficient to fund the purchase of an SWP contract or an associated buy-in cost, an updated rate analysis would be necessary, to generate sufficient revenue for these purposes. This funding source could also support capital needs associated with this alternative, such as infrastructure to address hydraulic limitations, though such needs may be cost prohibitive and create too high a burden on current ratepayers. Any resulting rate adjustment would be subject to Proposition 218 – likely involving a cost-of-service study, providing written notice to property owners and customers at least 45 days before a public hearing, and allowing the proposed rate change to be blocked if a majority of affected property owners and customers submit written protests. Because this rate-setting authority is available to the City at any time, it is addressed here as a currently available funding mechanism.
5.1.2 Potentially Available Funding Sources
This section addresses potentially available funding for two distinct costs: the negotiated purchase and any associated buy-in cost discussed in Section 5.1.1, which are contractual rather than capital in nature, and a potential capital component involving infrastructure needed to address hydraulic limitations at the City's Lopez Pipeline turnout. As discussed in Section 5.1.2.1, development impact fees, specifically a capacity charge under Government Code Section 66013, may potentially fund both the contractual cost of securing the entitlement and the capital cost of necessary infrastructure. Grant and loan programs, discussed in Section 5.1.2.2, are not expected to fund the contractual cost, since they generally require a capital project, but may be available for the infrastructure component.
5.1.2.1 Development Impact Fees
Development impact fees are one-time charges imposed on new development to fund the cost of public facilities and infrastructure needed to accommodate growth. This funding mechanism is governed by the Mitigation Fee Act, codified in California Government Code Section 66000 et seq. The Act requires that a local agency establish a reasonable relationship, commonly referred to as a nexus, between the amount of the fee, the type of development paying it, and the specific facilities the fee revenue will fund. Consistent with this nexus requirement, fee revenue may only be used for purposes attributable to new development. Revenue cannot be used to remedy existing system deficiencies, fund routine operations and maintenance, or cover general administrative costs. Eligible uses generally include the construction of new capital facilities, the expansion of existing capital facilities, and the securing of DRAFT Draft Long-Term Water Supply Study August 2026
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water rights or supply entitlements. However, eligible uses generally do not include the purchase of water itself as a commodity.
For the purchase of SWP contract alternative, Government Code Section 66013 is the most directly applicable provision, as it establishes a specific category of fee, known as a “capacity charge,” for water and sewer systems. This charge is defined to include “supply or capacity contracts for rights or entitlements….and other rights of the local agency involving capital expenses relating to its use of existing or new public facilities.” This Section goes on to clarify that a capacity charge does not include a “commodity charge.” Read together, this suggests that a capacity charge could potentially fund two distinct things: (1) the City’s cost of securing a larger contractual entitlement or capacity right within the Zone 3 system, including any associated buy-in cost, and (2) the capital cost of physical infrastructure improvements needed to address any hydraulic limitations (such as those at the Lopez Pipeline turnout).
Given the specificity required under Section 66013, consultation with legal counsel is recommended to confirm how this funding mechanism would apply to this alternative’s particular structure.
Implementing a development impact fee generally requires the City to prepare a nexus study demonstrating the relationship between new development and the need for relevant facilities or capacity, identify eligible facilities with a capital improvement plan, establish proportional fee rates, and adopt by ordinance following a public hearing. Because a specific scope has not been defined for this alternative in terms of capital improvements or additional entitlement, and because fee revenue would only become available incrementally as new development occurs, this funding mechanism is addressed here as potentially available rather than currently available.
5.1.2.2 Grant and Loan Opportunities for Capital Scope Elements Hydraulic or conveyance limitations within the system delivering SWP water to the City may constrain delivery of an increased SWP entitlement and could require capital infrastructure improvements to address. Such improvements would represent a capital project distinct from the underlying contractual transaction and would be evaluated as such for funding purposes. Depending on the scope of infrastructure required, this component could be eligible for debt funding through the Clean Water State Revolving Fund (CWSRF), the Drinking Water State Revolving Fund (DWSRF), or an Infrastructure State Revolving Fund (ISRF) loan through the California Infrastructure and Economic Development Bank (IBank). Grant funding may also be available depending on the nature of the improvement; Proposition 4 (California State Legislature, 2024), under Public Resources Code Section 91018, includes a $75 million funding category specifically for regional conveyance projects or repairs to existing conveyance infrastructure, which such an improvement may qualify for depending on its scope. As is typical of most grant and loan programs, pursuit of this funding would require the City to identify a local funding source to satisfy any required cost match, consistent with the existing City funding discussion in Section 5.1.1.1.
Because the scope of any conveyance improvement has not yet been defined, a detailed review of specific program requirements, funding caps, and solicitation timing, comparable to the review provided for Indirect Potable Reuse in Section 5.3, would be appropriate once a specific capital scope is identified.
5.2 Local/Regional Water Purchase
The Local/Regional Water Purchase alternative involves negotiated agreements to acquire water from neighboring agencies or water rights holders, rather than the construction of new supply infrastructure.
The following sections address the funding landscape for this alternative, distinguishing between the DRAFT Draft Long-Term Water Supply Study August 2026
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The following sections address the funding landscape for this alternative, distinguishing between the negotiated transaction itself and any associated capital infrastructure needs, and considering both currently available and potentially available funding sources.
5.2.1 Currently Available Funding Sources
This section addresses currently available funding sources for the Local/Regional Water Purchase alternative, specifically the negotiated purchase of water from a neighboring agency or water rights holder. Currently, funding for this purchase may be available through the City's existing City funding and rate-setting mechanisms, discussed below. As discussed in Section 5.1.1, grant and loan programs generally do not treat a negotiated purchase price as an eligible use, and the same principle applies here. Chapter 4 characterizes this alternative as involving low capital investment given the City's existing physical connection to regional water supply infrastructure, including Lopez Reservoir deliveries through the SLOCFCWCD Zone 3 system; however, as discussed in Section 5.1, hydraulic or conveyance limitations within this shared system may constrain delivery, and it is not yet clear whether such limitations would also affect this alternative. Development impact fees and grant or loan funding may also apply to this alternative, discussed as potentially available mechanisms in Section 5.2.2. As discussed in Section 5.1.1, a narrow category of state and federal grants exists for water acquisition, hauling, or emergency interties for small or disadvantaged communities facing a declared drought emergency, which similarly does not apply here given the City's size and this alternative's routine, nonemergency nature. A narrow exception exists where additional pipeline or pump station infrastructure/capacity could improve the City's ability to execute purchases; this potential capital component is discussed in Section 5.2.2.2, Grant and Loan Opportunities for Capital Scope Elements.
5.2.1.1 Existing City Funding
Because the negotiated or market cost of a purchase arrangement is not typically an eligible use under state or federal grant and loan programs, funding for this component of the alternative is more practically drawn from the City's own internal funds rather than external grant or loan sources. These may include water enterprise fund reserves or ongoing water rate revenue collected from customers.
The specific mix of internal funding the City would use for purchase costs is a topic for further discussion outside the scope of this assessment.
5.2.1.2 Rate Analysis Under Proposition 218
If existing water enterprise fund reserves or current rate revenue are not sufficient to fund purchase costs, an updated rate analysis may be advantageous, or in some cases necessary, to demonstrate sufficient revenue for these purposes. This funding source could also support capital needs associated with this alternative, such as additional pipeline or pump station infrastructure, though such needs may be cost prohibitive and create too high a burden on current ratepayers. Any resulting rate adjustment would be subject to Proposition 218 – likely involving a cost-of-service study, providing written notice to property owners and customers at least 45 days before a public hearing, and allowing the proposed rate change to be blocked if a majority of affected property owners and customers submit written protests.
Because this rate-setting authority is available to the City at any time, it is addressed here as a currently available funding mechanism rather than one contingent on a future funding cycle.
5.2.2 Potentially Available Funding Sources
This section addresses potentially available funding for two distinct costs: the negotiated purchase discussed in Section 5.2.1, which is contractual rather than capital in nature, and a potential capital DRAFT Draft Long-Term Water Supply Study August 2026
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component involving additional pipeline or pump station infrastructure that could improve the City's ability to execute a purchase. As discussed in Section 5.1.2.1, development impact fees, specifically a capacity charge under Government Code Section 66013, may potentially fund both the contractual cost of the purchase and the capital cost of any necessary infrastructure. Grant and loan programs, discussed in Section 5.2.2.2, are not expected to fund the contractual cost, since they generally require a capital project, but may be available for the infrastructure component.
5.2.2.1 Development Impact Fees
As discussed in Section 5.1.2.1, development impact fees, and specifically a capacity charge under Government Code Section 66013, are subject to the Mitigation Fee Act's nexus requirement and may fund the securing of a water right or supply entitlement, as well as associated capital infrastructure, but generally cannot fund the ongoing purchase of water itself as a commodity. For the Local/Regional Water Purchase alternative, this same framework could potentially apply to the City's cost of securing a negotiated purchase arrangement with a neighboring agency or water rights holder, as well as to the capital cost of any additional pipeline or pump station infrastructure needed to facilitate the purchase, discussed in Section 5.2.2.2. As with the SWP alternative, a nexus study would be required to establish the relationship between new development and the need for this capacity, and fee revenue would only become available incrementally as new development occurs. Because a specific capital scope has not yet been defined for this alternative, and because the application of this fee mechanism to a negotiated purchase arrangement of this kind has not been tested, consultation with legal counsel is recommended before this funding source is relied upon.
5.2.2.2 Grant and Loan Opportunities for Capital Scope Elements If any additional pipeline or pump station infrastructure or capacity is required to improve the City's ability to execute water purchases, it would represent a capital project distinct from the underlying purchase transaction, and would be evaluated as such for funding purposes. As discussed in Section
5.1.2.2, this type of infrastructure could be eligible for debt funding through the CWSRF, DWSRF, or an ISRF loan, as well as grant funding through Proposition 4's regional conveyance category under Public Resources Code Section 91018, depending on the scope of infrastructure required. As is typical of most grant and loan programs, pursuit of this funding would require the City to identify a local funding source to satisfy any required cost match, consistent with the existing City funding discussion in Section 5.2.1.1.
Because the scope of any pipeline or pump station improvement has not yet been defined, a detailed review of program-specific requirements would be appropriate once a specific capital scope is identified.
5.3 Indirect Potable Reuse Recycled Water
The IPR Recycled Water alternative involves construction of an advanced water treatment facility to purify municipal wastewater for reuse, most likely coupled with groundwater injection to the SMRVGB.
Unlike the Purchase of SWP Contract and Local/Regional Water Purchase alternatives, this alternative is a defined capital construction project and accordingly is well suited to a broad range of state and federal grant and loan programs. The following sections assess currently and potentially available funding sources for this alternative in detail, given the number of applicable programs and the capital-intensive nature of the project.
5.3.1 Currently Available Funding Sources
The following four programs represent the most relevant currently available grant and loan sources for a recycled water treatment and reuse facility of this type. Each is discussed individually below, including DRAFT Draft Long-Term Water Supply Study August 2026
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its general purpose, cost-share or match requirements, funding caps where applicable, and current solicitation status as of this assessment. Future grant solicitations and development impact fees, which may fund a substantial portion of this facility's cost, are addressed separately as a potentially available mechanism in Section 5.3.2.
5.3.1.1 Water Recycling Funding Program
The Water Recycling Funding Program (WRFP), administered by the State Water Resources Control Board (SWRCB) Division of Financial Assistance, provides both planning and construction funding for water recycling projects, and explicitly lists indirect potable reuse among its eligible project types. The WRFP Planning Grant generally covers 50 percent of eligible planning costs, and a community qualifying as disadvantaged or severely disadvantaged may receive 100 percent of eligible planning costs as a grant, with no local match required. The WRFP Construction Grant is established at 35 percent of the reasonable, estimated construction cost, up to a maximum set annually by SWRCB in the CWSRF Intended Use Plan. The WRFP Guidelines note that a construction project may be eligible to receive any combination of grant and loan financing available through SWRCB, potentially reaching up to 100 percent of eligible project costs; a CWSRF loan, discussed in Section 5.3.1.2, is the most likely such loan given SWRCB's role in administering that program, though pairing the grant with a loan is not a requirement of the WRFP itself. Whether the City's service area qualifies for disadvantaged community treatment, which may affect the local match otherwise required, should be confirmed directly with SWRCB. Notably, SWRCB's funding priority system for the CWSRF Fundable List places potable reuse projects that increase drinking water supply in the second-highest priority tier, immediately behind projects serving severely disadvantaged communities or supporting the human right to water. Both grants are administered by the Division of Financial Assistance, and water recycling construction projects must also comply with the applicable requirements of the Policy for Implementing the CWSRF, discussed further in Section 5.3.1.2. Both grants are accepted on a continuous, rolling basis through SWRCB's Financial Assistance Application Submittal Tool (FAAST); for the Construction Grant specifically, applications received by December 31 of a given year are scored and considered for placement on the following fiscal year's fundable list, which runs from July 1 to June 30.
5.3.1.2 Clean Water State Revolving Fund
The CWSRF, administered by SWRCB's Division of Financial Assistance, provides low-interest loan financing for a wide range of water quality infrastructure projects, including water recycling and potable reuse facilities, with no maximum funding limit. The standard CWSRF interest rate is set at one-half of the most recent California General Obligation Bond rate at the time funding is approved, with a financing term of up to 30 years or the useful life of the project, whichever is less, and repayment beginning one year after construction is completed. Certain CWSRF funding tiers offer a substantially different structure for communities meeting specific disadvantaged and, in some cases, smallcommunity criteria, potentially including a substantial portion of project costs as a grant or principal forgiveness rather than as a repayable loan. Given the specificity and variation of these criteria across funding categories, whether the City would qualify for any such treatment, and under which specific CWSRF funding tier, should be confirmed directly with SWRCB rather than assumed based on general program descriptions. DRAFT
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5.3.1.3 WaterSMART Title XVI Water Reclamation and Reuse The Bureau of Reclamation administers the Title XVI Water Reclamation and Reuse Program, which provides cost-shared federal funding for the planning, design, and construction of water reclamation and reuse projects. The federal cost share for most Title XVI projects is generally limited to the lesser of $40 million or 25 percent of total project costs, meaning the City would likely need to identify a nonfederal cost share of at least 75 percent of total project costs. A current solicitation is open with $40 million in total program funding across an expected 10 awards nationally, and accepts applications from two categories of sponsors: those managing one of a defined list of congressionally authorized Title XVI projects, and, more relevantly for the City, sponsors of water reclamation and reuse projects eligible under Section 4009(c) of the Water Infrastructure Improvements for the Nation (WIIN) Act, which does not require prior congressional authorization of the specific project. This solicitation has two application windows: the first closing August 26, 2026, and a second and final window closing August 26, 2027. With only $40 million in total program funding and approximately 10 expected awards nationally, this program is likely to be highly competitive and likely outside the working window of this report.
5.3.1.4 Water Infrastructure Finance and Innovation Act The Water Infrastructure Finance and Innovation Act (WIFIA) program, administered by the U.S.
Environmental Protection Agency (EPA), provides long-term, low-cost loans for water infrastructure projects, including water recycling and reuse. WIFIA loans are generally limited to 49 percent of eligible project costs; however, small communities with a population of 25,000 or fewer, a category that includes the City, may be eligible for loans of up to 80 percent of eligible project costs if they can demonstrate significant water infrastructure challenges and economic or administrative hardship in accessing funding. This is evaluated case-by-case rather than guaranteed based on population alone.
The minimum project size for small communities is $5 million, compared to $20 million for larger communities. The EPA is also waiving the WIFIA application fee and credit processing fee, which together typically total nearly $200,000, for small communities applying in federal fiscal years 2026 and 2027. WIFIA does not operate on a fixed solicitation schedule; the program accepts letters of interest from prospective applicants on a rolling basis. The subsequent application and underwriting process is lengthy, making this a tool best suited to financing later in the project's development once design and cost estimates are more firm.
5.3.2 Potentially Available Funding Sources
This section addresses potentially available funding for the IPR Recycled Water facility. Unlike the Purchase of SWP Contract and Local/Regional Water Purchase alternatives discussed in Sections 5.1 and
5.2, this alternative is a capital facility in its entirety, rather than a cost split between a contractual transaction and a limited capital component. As a result, the funding mechanisms discussed below, development impact fees in Section 5.3.2.1, and several state and federal programs in Sections 5.3.2.2 through 5.3.2.4, may apply to a substantially larger share of this alternative's overall cost than was the case for the other two alternatives.
5.3.2.1 Development Impact Fees
As discussed in Section 5.2.2.1, development impact fees are governed by California's Mitigation Fee Act and require a local agency to establish a nexus between the fee charged, the development paying it, and the specific facilities the fee revenue will fund. Revenue may only be used for capital improvements or facility expansions attributable to new development, not existing deficiencies, operations, or general DRAFT Draft Long-Term Water Supply Study August 2026
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administrative costs. For the IPR Recycled Water alternative, this is a more straightforward application of development impact fees than for the other alternatives discussed in this chapter, since a recycled water treatment facility is itself the kind of capital facility this funding mechanism is traditionally used to fund (rather than the more specific capacity charge provision under Government Code Section 66013 discussed for those alternatives).
The portion of the facility's cost eligible for development impact fee funding would depend on how much of its capacity is attributable to growth in the City's service area. Distinguishing this new need for capacity from the capacity needed to serve existing customers would be a key element of this approach.
If the facility is sized to accommodate future development, whether to meet increased demand, to address groundwater basin capacity needed to serve new water users, or both, the proportional share of construction cost attributable to that growth-related capacity could potentially be funded through this mechanism. The share attributable to serving existing customers, and any costs related to addressing existing supply reliability needs rather than growth, would not be eligible.
As with the other alternatives, a nexus study demonstrating this proportional relationship cannot be completed until the facility's capacity, cost, and design are more fully defined, and fee revenue would only become available incrementally as new development occurs and pays the fee, rather than as a lump sum available at the outset of construction. Given the scale of this alternative and the significance of correctly allocating growth-related versus existing-customer costs, consultation with legal counsel and a qualified nexus study consultant is recommended before this funding source is relied upon.
5.3.2.2 Integrated Regional Water Management / Watershed Resilience Program The San Luis Obispo County Integrated Regional Water Management (IRWM) program, which the City participates in, has historically received state implementation grant funding. The region's current Proposition 1, Round 2 IRWM implementation funding is understood to already be committed to other projects and would not be available to a separate City-led IPR effort. Looking forward, DWR is developing the Watershed Resilience Program, described by DWR as an evolution of the IRWM Program, which combines two Proposition 4 funding sections, Section 91019 (Conservation) and Section 91031 (Climate Resilience), to offer approximately $152 million statewide in implementation grants. As of this assessment, DWR has not yet finalized program guidelines or opened a solicitation; DWR held a public workshop on April 30, 2026, to gather early input on program design, and as recently as June 2026 indicated that guideline development was still ongoing. The City should monitor this program's development, as it represents a promising future avenue for regional grant support of this alternative, though its timeline and eligibility criteria remain undefined.
5.3.2.3 Remaining Proposition 4 Water Recycling Allocation Proposition 4 authorizes a total of $386.25 million, under Public Resources Code Section 91014, for SWRCB grants and projects related to water reuse and recycling, of which $150 million was appropriated through Senate Bill 105 for state fiscal year 2025-26 and is already flowing through the WRFP as discussed in Section 5.3.1.1. The Governor's 2026-27 budget proposed an additional $78 million for water recycling; however, the state budget signed on June 29, 2026, deferred specific Proposition 4 program allocations, including this figure, to separate legislation expected later in 2026, and it is unclear as of this assessment whether that proposed amount has since been enacted. Assuming this additional amount remains unallocated, approximately $236 million of the total $386.25 million authorization remains awaiting appropriation, subject to future state budget decisions with no defined timeline for DRAFT Draft Long-Term Water Supply Study August 2026
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when or whether it will become available. Given the number of Proposition 4-funded programs discussed throughout this section, the City should continue to track the allocation of Proposition 4 funding across these programs to ensure any emerging opportunities are identified as guidelines and appropriations are finalized.
5.3.2.4 Proposition 4 Regional Conveyance Funding
Separate from the water recycling allocation discussed in Section 5.3.2.3, Proposition 4 authorizes $75 million, under Public Resources Code Section 91018, for regional conveyance projects or repairs to existing conveyance infrastructure, administered by DWR. The Governor's 2026-27 budget proposed $69 million of this total for the current fiscal year; however, as with the water recycling allocation, this figure was part of the Proposition 4 program allocations deferred from the state budget signed on June 29, 2026, to separate legislation expected later in 2026, and it is unclear as of this assessment whether it has since been enacted. This funding source would only be relevant to the IPR alternative if the final project design includes a conveyance component, such as a pipeline to transport purified water to a groundwater injection site, of sufficient scope to qualify; whether such a component is warranted has not yet been determined for this alternative.
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Chapter 6. Summary of Conclusions and Recommendations
This chapter summarizes the key findings and conclusions of the City’s Long-Term Water Supply Study and identifies recommended next steps for the City to advance toward securing a supplemental water supply.
6.1 Current Water Supply Reliability
The City's existing water supply portfolio, consisting of surface water from Lopez Reservoir and groundwater from SMRVGB, is sufficient to meet current demand on paper but is operationally constrained in ways that create meaningful and growing supply risk:
• Lopez Reservoir deliveries are subject to LRRP-based reductions during drought years, which have been triggered in both 2016 and 2022, reducing the City's annual Lopez allocation from 800 AFY to 720 AFY. Looking forward, the draft HCP and LDRP, if adopted, could increase mandatory downstream release requirements in addition to LRRP reductions. This combination of increased releases and reduced deliveries would constrain the City's available Lopez supply, particularly during dry years.
• NCMA groundwater is constrained by seawater intrusion risk. The City's operationally sustainable groundwater production under current conditions is estimated at approximately 500 AFY, far below its paper allocation of 1,407 AFY. Regional hydrogeologic modeling suggests the City's long-term sustainable groundwater production could be further constrained to approximately 351 AFY to better protect against seawater intrusion. • Both supply constraints are specifically exacerbated during drought conditions, meaning the years in which supply reductions are most likely to occur are the same years in which demand for supplemental supply is greatest.
6.2 Water Demand
The City's current 5-year average demand of approximately 1,220 AFY represents a sustained, long-term reduction from historical levels. The City has already achieved significant conservation, reducing demand by approximately 31 percent since 2010, and is currently meeting the State's 2040 UWUO, with actual water use 16.28 GPCD below its regulatory efficiency budget for Reporting Year 2024-25. Demand hardening is expected to limit the potential for meaningful additional supply from further conservation efforts alone. The City’s demand, when accounting for current demand plus projected demand from planned development using an 85 GPCD assumption, is expected to grow from approximately 1,247 AFY in Year 1 to approximately 1,463 AFY by Year 30.
6.3 Water Supply Evaluation Model Conclusions
The water supply evaluation model results collectively demonstrate the following:
• The City's current water supply portfolio is operationally insufficient to reliably meet projected future demand under realistic supply assumptions. • Supply deficits are projected under both current and anticipated future supply conditions. o The Current Vulnerabilities scenario reflects conditions the City has already experienced, such as LRRP restrictions, with modeled maximum annual deficits reaching approximately 241 AFY. DRAFT
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o The Future Vulnerabilities scenario, reflecting foreseeable HCP-LDRP and groundwater constraints, projects maximum annual deficits of approximately 471 AFY.
• The Future Vulnerabilities and No Growth sensitivity scenario indicates that the supplemental supply need is driven primarily by supply vulnerability, not growth; deficits of approximately 69 to 229 AFY are projected even with no new development. • A minimum supplemental supply of approximately 241 AFY is expected to address deficits under near-term, realistic supply conditions impacted by drought. The necessary supplemental supply quantity could be substantially higher if Future Vulnerabilities constraints materialize.
6.4 Supplemental Water Supply Alternatives Evaluation Conclusions The Study evaluated eight supplemental water supply alternatives using eight weighted criteria and a Quantity of Supply Threshold Analysis. Key conclusions are as follows:
• Local/Regional Water Purchase, Purchase of SWP Contract, and IPR Recycled Water are the three most viable supplemental water supply alternatives identified in this Study for the City. They represent a complementary set of options spanning near-, mid-, and longer-term implementation pathways and a range of cost, reliability, and feasibility characteristics. • Desalination and DPR Recycled Water meet the quantity threshold but rank below the three leading alternatives due to high costs, long implementation timelines, and significant permitting complexity. These alternatives may merit further consideration in the future, particularly Desalination through the regional DESAL Plan process currently being led by the SLOCFCWCD.
• Conservation, Non-Potable Recycled Water, and Stormwater Capture do not meet the minimum supplemental supply quantity threshold of 241 AFY and are not advanced as primary supplemental supply alternatives. Nonetheless, conservation and stormwater capture should continue as an important component of the City's water management program.
6.5 Recommended Alternatives Conclusions
Supply reliability modeling shows that each of the three recommended alternatives can eliminate deficits across the full 30-year planning horizon under the Current Vulnerabilities scenario at the following supplemental supply volumes:
• Local/Regional Water Purchase: 200 AFY firm supply
• Purchase of SWP Contract: 400 AFY Table A entitlement (200 AFY Water Service Amount + 200 AFY Drought Buffer)
• IPR Recycled Water: 200 AFY firm supply
Under the Future Vulnerabilities scenario, these estimated volumes of supplemental supply needed to eliminate deficits increase to 350 AFY firm supply for Local/Regional Water Purchase and IPR Recycled Water, and a 700 AFY Table A entitlement for the Purchase of SWP Contract. The City's ultimate DRAFT Draft Long-Term Water Supply Study August 2026
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supplemental supply target will depend on how current and future vulnerabilities evolve, including potential advancement of the HCP process and changes in NCMA groundwater constraints.
The range between the Current and Future Vulnerabilities volumes establishes the planning envelope for the City's supplemental supply program. Regardless of where within this range the City ultimately targets, initiating planning and feasibility work now is critical given the multi-year timelines required to implement each alternative.
6.6 Funding Conclusions
There are a range of funding mechanisms for the recommended alternatives, with the applicability of each mechanism dependent on the alternative's specific structure:
1. Local/Regional Water Purchase and Purchase of SWP Contract are contractual alternatives potentially funded through existing enterprise funds and rate-setting mechanisms, with development impact fees potentially applicable to the cost of securing an entitlement or funding associated capital infrastructure. Grant and loan programs generally do not fund the contractual cost of a water right or purchase arrangement, but may fund associated capital infrastructure improvements.
2. IPR Recycled Water, as a capital construction project, is eligible for the broadest range of state and federal funding sources, including the Water Recycling Funding Program, Clean Water State Revolving Fund, WaterSMART Title XVI, and WIFIA, among others. The developing Watershed Resilience Program under Proposition 4 represents a promising emerging funding avenue that the City should monitor.
6.7 Recommendations
Based on the findings and conclusions of this Study, the following recommendations are offered for the City's consideration:
1. Further evaluate the recommended supplemental water supply alternatives and advance feasibility and planning for the alternative(s) the City elects to pursue. Given that Local/Regional Water Purchase and Purchase of SWP Contract can potentially be implemented within 2 to 7 years, and IPR Recycled Water will require 7 to 10 or more years, near-term action is warranted for all three. The City should determine whether to pursue one or more alternatives in parallel.
2. Explore local and regional water purchase opportunities. The City should assess opportunities with neighboring agencies and agricultural water users to identify willing counterparties and evaluate terms for a near-term water purchase arrangement.
3. Engage the SLOCFCWCD regarding the SWP transfer program and Subcontract amendments.
The 2025 SWP Water Transfer Policies provide an emerging institutional framework for the City to pursue expanded SWP water access. The City should engage proactively as Subcontract amendments are developed, and monitor the program's evolution.
4. Engage the SSLOCSD regarding wastewater treatment and IPR feasibility. Any IPR Recycled Water program will require coordination with SSLOCSD on treatment upgrades, water rights, and cost-sharing. Early engagement is recommended to assess feasibility and institutional interest.DRAFT
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5. Pursue grant and loan funding for the preferred alternative(s). The City should identify and pursue available state and federal funding sources, beginning with the WRFP Planning Grant and CWSRF for IPR, and exploring development impact fee opportunities for all three alternatives.
6. Monitor the HCP process and update supply planning assumptions as the LDRP is finalized. The City should continue to track the HCP process and update the water supply evaluation model as LDRP provisions are confirmed, since finalization of the HCP could materially change the supplemental supply quantity needed.
7. Continue community engagement as the City advances toward a decision on its preferred supplemental supply alternative(s). Building on the transparent and collaborative process established through this Study described in Appendix A, the City should continue to communicate with residents and the business community as planning and decision-making progress.
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References
California Department of Finance, 2026. E-5 Population and Housing Estimates for Cities, Counties, and the State. Sacramento, CA.
California Department of Water Resources (DWR), 1970. Sea-Water Intrusion: Pismo-Guadalupe Area.
Bulletin No. 63-3. Sacramento, CA.
California Department of Water Resources (DWR), 2019. State Water Project Delivery Capability Report 2019. Sacramento, CA.
California Department of Water Resources (DWR), 2024. Final State Water Project Delivery Capability Report 2023. Sacramento, CA.
California Department of Water Resources (DWR), 2025. Get the Facts About the State Water Project Allocation. Sacramento, CA. Accessed August 2026.
California Department of Water Resources (DWR), 2026. State Water Project. Sacramento, CA. Accessed August 2026.
California State Legislature, 2018. Assembly Bill 1668 and Senate Bill 606 (Making Water Conservation a California Way of Life). California Water Code Sections 10609 et seq.
California State Legislature, 2024. Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024 (Proposition 4). Public Resources Code Division 22.5.
Carollo Engineers, 2012. San Luis Obispo County Master Water Report. Prepared for the County of San Luis Obispo Department of Public Works.
City of Grover Beach, 2021. 2020 Urban Water Management Plan. Prepared by MKN & Associates, Inc.
City of Grover Beach, 2026. Annual Urban Water Use Objective and Water Use Report, Reporting Year 2024-25. Prepared by Confluence Engineering Solutions, Inc. for submittal to the California State Water Resources Control Board.
GEOSCIENCE Support Services, Inc., 2019a. City of Pismo Beach and South San Luis Obispo County Sanitation District Central Coast Blue Phase 1B Hydrogeologic Evaluation – Executive Summary.
Prepared for Water Systems Consulting, Inc.
GEOSCIENCE Support Services, Inc., 2019b. Appendix 1-D. Preliminary Enhanced Stormwater Capture and Infiltration Assessment of 2 Watershed Group 4 Projects. Technical memorandum dated February 28, 2019. Prepared for Water Systems Consulting, Inc.
GSI Water Solutions, Inc., 2024. Northern Cities Management Area 2023 Annual Monitoring Report.
Prepared for the Northern Cities Management Area Technical Group.
GSI Water Solutions, Inc., 2025. Northern Cities Management Area 2025 Annual Monitoring Report.
Prepared for the Northern Cities Management Area Technical Group.
San Luis Obispo Council of Governments (SLOCOG), 2025. 2060 Regional Growth Forecast. San Luis Obispo, CA. DRAFT
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San Luis Obispo County Flood Control and Water Conservation District (SLOCFCWCD) Zone 3, 2014. Low Reservoir Response Plan.
San Luis Obispo County Flood Control and Water Conservation District (SLOCFCWCD), 2015. San Luis Obispo County Desalination Opportunities Summary Report and Desalination Executable Solution and Logistics Plan (DESAL Plan).
San Luis Obispo County Flood Control and Water Conservation District (SLOCFCWCD), 2025a. Draft Habitat Conservation Plan, Lopez Dam Operations. Including Appendix B, Lopez Dam Operations Hydrologic Modeling Documentation.
San Luis Obispo County Flood Control and Water Conservation District (SLOCFCWCD), 2025b. State Water Project Water Transfer Policies. Approved by the San Luis Obispo County Board of Supervisors, July 15, 2025.
San Luis Obispo County Flood Control and Water Conservation District (SLOCFCWCD), 2026. Desalination Executable Solution and Logistics (DESAL) Plan, USBR Title XVI Feasibility Study. Public Draft.
Prepared by Carollo Engineers, Inc., July 2026.
Santa Maria Valley Water Conservation District v. City of Santa Maria, et al., 2008. Judgment After Trial, Santa Maria Groundwater Litigation, Lead Case No. 1-97-CV-770214, Superior Court of California, County of Santa Clara, filed January 25, 2008. Incorporating the Stipulation dated June 30, 2005 (Exhibit 1).
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Appendix A. City of Grover Beach Long-Term Water Supply Study Community Engagement
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APPENDIX A
City of Grover Beach Long-Term Water Supply Study
Community Engagement
Presented by CEA Strategies and Koble Collaborative
Draft: Aug. 20, 2026
Contents
1. Community Engagement Executive Summary Page 1
2. Community Engagement Approach Page 2
• Community Engagement Activities
3. Project Communications Page 2
• Communications Tools
4. Online Community Survey Page 3
5. Early Stakeholder Learning Sessions Page 4
6. Community Workshops Page 5
7. How Community Input Informed the Technical Study Page 7
8. Key Community Engagement Outcomes Page 8
9. Considerations DRAFT for Future Community Engagement Page 8 Appendix A – Water Supply Study Community Engagement
1 1. COMMUNITY ENGAGEMENT EXECUTIVE SUMMARY
Community engagement was an integral component of the City of Grover Beach's LongTerm Water Supply Study. It was designed to inform the technical evaluation of the City's long-term water needs. Guided by the Community Engagement Plan, the program provided residents, businesses, community leaders, and other stakeholders with meaningful opportunities to learn about the study, ask questions, share perspectives, and provide input to help inform the evaluation of future water supply portfolio options. The process emphasized early listening, transparent communication, independent technical expertise, and meaningful public participation throughout the study.
Between March and June 2026, the independent community engagement team of CEA Strategies and Koble Collaborative, working in partnership with the study’s technical team – Confluence Engineering Solutions and Santiago Water Strategies, along with City staff, implemented a comprehensive community engagement program that supported the LongTerm Water Supply Study. The program included two stakeholder learning sessions, an online survey, two public workshops, and an ongoing public information campaign. To ensure broad public access to study information, the engagement team developed a dedicated project webpage supported by a citywide project postcard, email notifications, newsletter articles, social media content, and workshop materials. Together, these efforts provided multiple opportunities for residents, businesses, community leaders, and other stakeholders to learn about the goals of the supply study, gain an understanding of the City’s current water supply and alternative portfolio options, and provide input to help inform the technical evaluation.
Across every engagement activity, several consistent themes emerged. Residents expressed strong support for proactive long-term water planning while emphasizing the importance of reliability, affordability, transparency, and public trust. Community members sought clear explanations of the costs, benefits, tradeoffs, and long-term implications of each alternative.
Participants also encouraged the City to maintain an objective and transparent planning process supported by independent technical expertise. Community members requested side-by-side evaluations of feasible water supply alternatives, clear explanations of costs, benefits, and trade-offs, and assurance that no preferred solution had been selected before the study's completion. These perspectives reinforced the importance of transparency, education, and objective technical analysis throughout the project.
The community engagement program achieved its intended purpose by increasing public understanding of Grover Beach's water system while providing valuable community input that informed project communications, public education, and the evaluation of long-term water supply alternatives. Together with the independent engineering analysis presented in the Long-Term Water Supply Study, the engagement process provides City staff and the City Council with a documented understanding of community priorities, questions, and DRAFT Appendix A – Water Supply Study Community Engagement
2 concerns to support future policy discussions and informed decision-making regarding the City's long-term water reliability and resilience. Perhaps the most significant outcome of the engagement process was a more informed community, better equipped to understand the City's long-term water challenges and participate in future water planning discussions.
2. COMMUNITY ENGAGEMENT APPROACH
The community engagement team developed and implemented a Community Engagement Plan to support the Long-Term Water Supply Study. The engagement strategy was designed to ensure community perspectives were considered throughout the eight-month technical evaluation process.
Rather than relying on just one or two public meetings, the engagement approach intentionally progressed from early listening and learning to public education and community dialogue, and finally to formal Council presentations. Community engagement began during the early stages of the study so community questions, priorities, and concerns could help inform broader public education efforts and the evaluation process before technical recommendations were analyzed and future supply recommendations were finalized.
Recognizing that residents engage in different ways, the community engagement team implemented a multi-faceted outreach program that combined small-group stakeholder interviews, an online community survey, public workshops and formal Council presentations, all supported by coordinated digital and print communications. This approach expanded access to project information while creating multiple opportunities for participation.
Community Engagement Activities
• Dedicated Long-Term Water Supply Study webpage
• Citywide project postcard introducing the study and participation opportunities • Integrated communications about the study through newsletters, email notifications, the City's website, and social media
• Online community survey
• Two early stakeholder learning sessions
• Two community workshops
• Preliminary and final presentations to the City Council
3. PROJECT COMMUNICATIONS
A multifaceted communications program was essential to engage residents and stakeholders. The community engagement team developed content for the City’s dedicated Long-Term Water Supply Study webpage, which served as the primary source of project information and engagement opportunities. Residents could access project DRAFT Appendix A – Water Supply Study Community Engagement
3 updates, workshop presentations and recordings, stakeholder summaries, frequently asked questions, and the online survey from a single location.
Communications Tools
• Dedicated project webpage: https://www.groverbeach.org/764/Water-Supply-Study • Citywide project postcard mailed to all households and businesses (6,329) • Email announcements and reminders (12)
• Newsletter articles (4)
• Social media posts (6 posts on all platforms)
• Workshop presentations and meeting materials
• Workshop recordings
• Frequently Asked Questions
4. ONLINE COMMUNITY SURVEY
To broaden participation beyond public meetings, the City conducted an online community survey to gather perspectives on long-term water planning, community priorities, and future water supply options. The survey was open from March 26 through June 17 and remained open throughout the community engagement process. A total of 114 survey responses were received.
Survey responses closely aligned with themes identified during the stakeholder learning sessions and community workshops, reinforcing several consistent community priorities.
Respondents emphasized the importance of maintaining a reliable long-term water supply while balancing affordability, environmental stewardship, and community character. Many also expressed a desire for additional information on the City's current water supplies, future reliability challenges, supplemental water supply alternatives, and the costs and benefits of potential investments.
Key Survey Findings
Residents recognize that Grover Beach faces long-term water supply challenges.
Approximately 67% of respondents rated the City's long-term water supply as "somewhat reliable," "unreliable," or "very unreliable," while about 33% rated it as "reliable" or "very reliable." This indicates that many residents have concerns about the City's ability to meet future water needs.
Long-term water reliability was the community's greatest concern. Nearly 65% of respondents identified long-term sustainability of the City's water supply as a primary concern. More than half also expressed concern about the cost of securing additional water supplies (52%) and whether additional water will be needed to support future development (52%). More than one-third (37%) identified emergency preparedness, including wildfire resilience, as an important consideration. DRAFT Appendix A – Water Supply Study Community Engagement
4 Most respondents believe additional water supplies may be needed. More than 82% of respondents agreed that the City may need to, or must, secure additional water supplies to ensure the community's long-term sustainability and accommodate future growth. Only 18% believed additional water supplies are unnecessary.
Residents want more information before future decisions are made. Open-ended survey responses consistently requested additional information on the City's current water supplies, projected future demand, water supply alternatives, project costs, environmental impacts, and funding for future investments. Many respondents also asked questions about housing growth, State housing requirements, and how those assumptions influence long-term water planning.
Survey findings reinforced the importance of evaluating multiple water supply portfolio options, clearly communicating the costs, benefits, and tradeoffs associated with each alternative; and addressing community questions related to long-term water reliability, growth, affordability, and future water planning.
5. EARLY STAKEHOLDER LEARNING SESSIONS
The community engagement process began with two facilitated stakeholder learning sessions in March 2026. One session included resident and community representatives, while the second included business leaders and members of the development community.
The purpose of these discussions was to understand community perspectives better, identify communication needs, and gather recommendations on the engagement approach before launching broader public outreach.
Although participants represented different interests, both groups identified remarkably consistent priorities. Participants emphasized the importance of long-term planning, objective technical information, and transparent public communication throughout the study.
Common Themes
• Long-term water reliability and resilience are community priorities. • Residents want a better understanding of the City's current water system before evaluating future options.
• To be credible, the study must include and evaluate multiple supply options, not just one.
• Transparency and objective technical information are essential to building public confidence.
• Water supply alternatives should be evaluated side-by-side using consistent criteria. • Community questions regarding growth, water rates, conservation, and future water supplies should be addressed early.
• Independent technical experts are trusted sources of information. DRAFT Appendix A – Water Supply Study Community Engagement
5 These early discussions helped shape the remainder of the community engagement program by identifying: 1) information residents wanted to receive, and 2) the approach that would be most effective during subsequent engagement activities.
6. COMMUNITY WORKSHOPS
The two public workshops were intentionally aligned with key milestones in the technical study, allowing community input to inform the early phases of evaluating long-term water supply alternatives before recommendations were developed. • Community Workshop 1 - Understanding Our Water Supply Today Date: May 13, 2026
Attendance: Approximately 25 participants
The first workshop established a shared understanding of the City's existing water system and projected water demands, laying the foundation for informed discussion in subsequent phases of the study. An independent regional water expert from Confluence Engineering Solutions discussed the following.
o Purpose and goals for the City’s first-ever long-term water supply study o Current water supply sources
o Projected water demand and supply gaps
o Water reliability and resilience
o Groundwater conditions
o Housing growth
o Water affordability
o Potential long-term water supply portfolio options (8 in total) Participants provided input on what three water supply options they most wanted to learn more about. Participants showed an interest in learning more about all eight alternative supply options; they were especially interested in the viability of more conservation, desalination, local transfers and exchanges, and State water purchases. • Community Workshop 2 - Exploring Long-Term Water Supply Options Date: June 16, 2026
Attendance: Approximately 25 participants
Building on the foundation set in Workshop 1, the second workshop focused on how potential supplemental water supply portfolio options were evaluated using consistent engineering criteria.
The independent engineering experts from Confluence Engineering Solutions and Santiago Water Solutions explained the evaluation process, technical feasibility, implementation considerations, and opportunities and constraints associated with each alternative. The primary discussion topics were: DRAFT
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6 o Eight potential water supply alternatives and implementation considerations o Evaluation methodology of water supply alternatives
o Review process and study timeline
Workshop attendees participated in breakout groups to provide input on the following questions.
1. As the City plans for its future water supply, what issues are most important to you?
2. After hearing tonight's presentation, what concerns or risks are most on your mind? The following topline themes emerged from resident input during the workshop's breakout discussions.
• Reliability and drought preparedness. Participants emphasized the importance of a dependable long-term water supply, particularly during extended droughts or periods when multiple regional water sources may be affected simultaneously. • Future water demand. Participants had questions and concerns about the City’s projected growth and whether future development could increase water demand beyond available supplies. They also wanted a clear and consistent explanation of how growth assumptions are incorporated into long-term water planning. • Cost and affordability. The cost of developing additional water supplies was a significant concern, including the potential cost to existing customers and how costs associated with future growth and development would be shared.
• Regional water supply and partnerships. Participants expressed interest in regional approaches, including potential water transfers, exchanges, or partnerships with neighboring agencies. They also raised questions about how regional water demands and drought conditions could affect the availability of these supplies. • Conservation and responsible water use. Participants supported continued conservation, but raised questions about additional opportunities to reduce demand, including conservation associated with new development and higher-density housing. • Water quality and environmental considerations. Participants raised concerns about protecting water quality as new supplies are considered, including groundwater conditions, seawater intrusion, recycled water, desalination, and potential impacts associated with agricultural and other water uses.
Workshop 1 established a common understanding of the City’s existing water supply and future challenges. Workshop 2 advanced the conversation to potential water supply options, costs, tradeoffs, and implementation considerations. Together, the workshops provided residents with information and opportunities for input as the technical study progressed. In addition, the Workshop 2 breakout discussions also reinforced many of the themes identified during the March stakeholder learning sessions, while adding greater specificity around reliability, growth, affordability, regional partnerships, conservation, and the tradeoffs associated with future water supply options. DRAFT Appendix A – Water Supply Study Community Engagement
7 7. HOW COMMUNITY INPUT INFORMED THE TECHNICAL STUDY
The community engagement program achieved the objectives established in the Community Engagement Plan by providing meaningful opportunities for residents and stakeholders to participate throughout the Long-Term Water Supply Study. The process increased public understanding of the City’s water system and documented community priorities, questions, and concerns that can help inform future water planning discussions.
Community engagement was not intended to direct the study’s engineering recommendations. Rather, it helped identify the questions and issues most important to residents, inform public education, and highlight areas where additional explanation or technical analysis was needed. The input gathered also provides valuable context for future discussions between City leaders and the community. The following considerations emerged consistently throughout the engagement process.
Evaluate a range of water supply alternatives. Community members consistently encouraged the City to evaluate multiple water supply options objectively rather than focus on a single preferred solution. This reinforced the study's portfolio approach and the sideby-side evaluation of feasible alternatives using consistent technical criteria.
Emphasize long-term reliability and resilience. Participants consistently distinguished between meeting today's water demands and preparing for future drought, regulatory uncertainty, climate variability, and long-term community needs. This reinforced the importance of evaluating alternatives based not only on supply capacity, but also on longterm reliability and system resilience.
Clear communication about costs, tradeoffs, and implementation considerations.
Residents expressed a strong desire to understand the costs, benefits, risks, and timing associated with each water supply alternative. This input reinforced the importance of presenting technical findings transparently to support informed public discussion and future decision-making.
Address community questions related to growth and future demand. Questions regarding housing growth, State housing requirements, and future water demand emerged consistently throughout the engagement process. While these topics extend beyond the scope of the water supply study itself, the frequency of these questions reinforced the importance of clearly explaining the assumptions underlying future demand projections and of distinguishing water supply planning from land-use policy and related State mandates. Residents wanted a clearer understanding of how future growth projections will influence long-term water planning.
Present technical information in clear, accessible language. In every engagement, community members consistently expressed a desire to understand better the City's water system, future water supply challenges, and how potential alternatives were evaluated. DRAFT Appendix A – Water Supply Study Community Engagement
8 This feedback reinforced the importance of translating complex engineering concepts into clear, accessible language through workshop presentations, graphics, Frequently Asked Questions, and other public communications. Improving public understanding became a key objective of both the engagement process and the technical study.
While engineering recommendations remain grounded in independent technical analysis, regulatory requirements, affordability, and long-term water reliability, community input provided valuable context that helped shape communications, inform public education, and reinforce the issues most important to the community.
8. KEY COMMUNITY ENGAGEMENT OUTCOMES
The community engagement program successfully achieved the objectives established in the Community Engagement Plan by providing meaningful opportunities for residents and stakeholders to participate throughout the Long-Term Water Supply Study. Community input informed project communications, public education efforts, and evaluation of longterm water supply portfolio options while reinforcing the importance of transparency and objective technical analysis.
The Long-Term Water Supply Study demonstrated that meaningful community engagement and independent technical analysis are complementary components of effective longterm planning for a community’s future. Through this process, the City established a strong foundation for future water supply decisions after this study is completed. Combined with the engineering analysis, the engagement process provides City staff and the City Council with a documented understanding of initial community priorities and values to support future policy discussions and informed decision-making.
9. CONSIDERATIONS FOR FUTURE COMMUNITY ENGAGEMENT
Community engagement should be viewed as an ongoing component of long-term water planning rather than a single phase of the study. Throughout the stakeholder learning sessions, online community survey, and public workshops, residents consistently emphasized the importance of transparency, early communication, objective technical information, and meaningful opportunities for public involvement. Based on our observations and the community input gathered during this engagement, we offer the following recommendations for future engagement.
Continue community engagement throughout future planning and implementation.
Community engagement should extend beyond completion of the Long-Term Water Supply Study. As the City considers recommended water supply portfolio alternatives, implementation strategies, capital investments, and future water rate decisions, residents should continue to have meaningful opportunities to learn about proposed actions, ask questions, and provide input. At key milestones, the City should clearly communicate how DRAFT Appendix A – Water Supply Study Community Engagement
9 and when decisions will be made, opportunities for public participation, and how community input will be considered. Building on the transparent and collaborative approach established during this study will help maintain community understanding and confidence as future decisions are made.
As resources allow, the City should also consider bringing future water conversations directly into the community by participating in existing events and gatherings where residents, families, business owners, and other stakeholders already come together.
Supplementing formal workshops and City Council meetings with these more accessible opportunities can broaden participation, reduce barriers to engagement, and bring additional community voices into future water planning discussions.
Maintain transparent, consistent, and educational communications.
Community members consistently expressed a desire for objective, timely, and easy-tounderstand information. Future communications should continue to explain why action is being considered, how decisions are made, and the costs, benefits, trade-offs, and longterm implications associated with proposed investments. Communications should also continue translating complex engineering concepts into clear, accessible information that supports informed public discussion and decision-making.
Clearly explain the relationship between water planning, growth, and affordability.
Questions regarding housing growth, State housing requirements, project funding, and future water rates were among the most common throughout the engagement process.
Future communications should continue to distinguish long-term water planning from land-use decisions while clearly explaining how future water needs are projected, how infrastructure investments are funded, how affordability will be considered, and the decision-making process.
Continue grounding future decisions in independent technical analysis.
Participants consistently expressed confidence in information presented by the independent engineering team and appreciated the objective evaluation of multiple water supply alternatives. As future decisions are considered, the City should continue to communicate the technical basis for its recommendations, including costs, benefits, risks, trade-offs, and implementation considerations. This will help reinforce the goal of transparency, maintain public confidence, and support informed decision-making.
Build on the engagement tools established through this study.
The project webpage, Frequently Asked Questions, community workshops, newsletters, email updates, and social media proved to be effective tools for informing and engaging the community throughout the study. We recommend maintaining and regularly updating these resources as future decisions are considered while periodically seeking additional community feedback to identify emerging questions, measure public understanding, and ensure communication remains responsive to community needs. DRAFT