Subject: BAWSCA and RFA IGR Report for Calendar Year 2023 From: Gustav Larsson, Sunnyvale Appointee to the BAWSCA and RFA Boards Date: December 8, 2023
Honorable Mayor Klein, Vice Mayor Din, and Councilmembers, Thank you again for the opportunity to complete a final year on the BAWSCA and RFA Board of Directors, which has allowed me to serve a third term as Board Chair. I will be stepping down from the Board next month aŌer the BAWSCA Board meeƟng on January 18th, at the end of my term as Board Chair.
This report summarizes the acƟviƟes of BAWSCA/RFA and their Boards for 2023. The BAWSCA Board held six bi-monthly meeƟng in 2023 and the RFA Board met once in January.
BAWSCA’s three-part goal remains “a reliable supply of high-quality water at a fair price” (underlining added) for its three-county region. This report is organized around those three topics with addiƟonal secƟons for long-term planning and the RFA. But first there are two special anniversaries to recognize.
BAWSCA’s 20th Anniversary
BAWSCA celebrated its 20th anniversary this year. Thank you to Councilmember Mehlinger for aƩending the recogniƟon event in November, which featured speakers from the California Legislature, the SFPUC, and BAWSCA’s founding and current CEOs.
A copy of BAWSCA’s 20th anniversary brochure is aƩached to the end of this report.
BAWSCA has benefiƩed from conƟnuity and longevity among its Board and staff: five of BAWSCA’s 26 current Board members and two employees (including the current CEO) have been with BAWSCA since its founding 20 years ago. One of my prioriƟes this year as Board Chair has been working with the Board and CEO on ensuring BAWSCA’s conƟnued success over the next 20 years and beyond even as the Board and staff inevitably turn over.
100th Anniversary of O’Shaughnessy Dam and Hetch Hetchy Reservoir This year also marked the 100th anniversary of the compleƟon of the O’Shaughnessy Dam, which forms the Hetch Hetchy Reservoir . An anniversary celebraƟon atop the dam was held in May, and as BAWSCA Chair I was honored to be one of the invited speakers alongside San Francisco Mayor London Breed, SFPUC Commission President Newsha Ajami, SFPUC General Manager Dennis Herrera, and a representaƟve from the late Sen. Dianne Feinstein’s office. hƩps://www.kqed.org/science/1982551/celebraƟon-and-concern-hetch-hetchy-reservoir-turns- 100-but-climate-change-complicates-its-future
Reliable Supply
Having a reliable water supply means that water is available when needed, even during a drought. A predictable and reliable water supply is essenƟal for the immediate health of the community, for the ongoing operaƟon of the local economy, and for planning future housing and economic development in Attachment 5
the region. Reliability topics includes water rights, supply management, system maintenance, capital improvements, water conservaƟon programs, and more.
Two reliability topics of great interest to the Board this year were the Bay-Delta Plan and Tier 2 negoƟaƟons.
Bay-Delta Plan, Voluntary Agreement, and LiƟgaƟon
The Bay-Delta Plan is a large, complex, and controversial plan for managing major waters in the heart of California, namely the Delta, the Sacramento and San Joaquin Rivers, and their tributaries. One such tributary is the Tuolumne River, which supplies Hetch Hetchy and provides 85% of SFPUC’s water. Bay- Delta Plan goals include limiƟng saltwater intrusion into the Delta, protecƟng ecosystems, providing water for agriculture and urban areas, and recreaƟonal use.
The State Water Resources Control Board (State Water Board) last updated the Bay-Delta Plan in 2018, but the Plan is not yet in effect while implemenƟng regulaƟons are pending. As part of the moƟon to adopt the Bay-Delta Plan, the State Water Board invited Voluntary Agreements (VAs), recognizing that VAs could be implemented faster and could include measures like habitat restoraƟon that were beyond the State Water Board’s authority to mandate. This was a carrot-and-sƟck approach: the carrot was VAs; the sƟck was the Bay-Delta Plan.
BAWSCA has great concern about the adopted Bay-Delta Plan. SFPUC’s calculaƟons show that, under the Bay-Delta Plan, the BAWSCA region could experience severe water raƟoning (36-54% reducƟon) starƟng the second year of a drought. For reference, most BAWSCA agencies achieved a 25-30% water reducƟon during the 2014-2017 drought, and much of those savings are now baked into our normal year water use through landscape replacement, installing water efficient appliances, etc. Achieving a further 36-54% water reducƟon would be extremely difficult and would greatly impact our communiƟes, our residents, and our local economy. Housing growth and economic development plans could also be limited if there is insufficient water supply.
To address these concerns, BAWSCA has proceeded on three fronts:
1. AlternaƟve Water Supply Planning
At BAWSCA’s urging, SFPUC has embarked on a mulƟ-year planning effort to explore opƟons for replacing the water supply that would be lost to the Bay-Delta Plan. The SFPUC released a draŌ plan in June, which idenƟfies projects that replace only half of the lost water supply at a capital cost of $10B+ in today’s dollars (not including ongoing operaƟonal expenses) and would not be fully online unƟl 2040 at the earliest. No feasible projects have yet been idenƟfied to replace the other half of the lost water supply, and the costs would surely be higher. These results begin to quanƟfy the steep economic cost of the Bay-Delta Plan to the BAWSCA region. To put these costs into perspecƟve, Sunnyvale’s share of the capital costs alone could be another two WPCPs or six Civic Centers.
2. Bay-Delta Plan LiƟgaƟon
BAWSCA has joined (“intervened”) in liƟgaƟon iniƟated by other parƟes against the Bay-Delta Plan. As an intervenor, BAWSCA has represented the unique water supply interests of this urban region before the court and will have a seat at the table should seƩ lement negoƟaƟons begin.
Attachment 5
The liƟgaƟon is sprawling and slow-moving: a dozen related cases have been filed by around 25 parƟes, and just the index of supporƟng documents filed in these cases is over 6,000 pages long.
During oral arguments in September and October, BAWSCA was the only party to discuss the connecƟon between water supply and the State’s housing goals, and BAWSCA’s aƩ orneys answered the court’s quesƟons about RHNA, which the court was not familiar with. BAWSCA brings a unique and important perspecƟve to these legal proceedings.
3. Tuolumne River Voluntary Agreement (TRVA)
Last year, BAWSCA led an effort to encourage Governor Newsom and State natural resource agencies to support environmental review of a TRVA as an alternaƟve to the adopted Bay-Delta Plan. And this year, the State Water Board agreed to perform environmental review on an aggressive schedule. A draŌ environmental analysis is expected in mid 2024.
Drought AllocaƟon Planning—Tier 2 NegoƟaƟons
When SFPUC’s water supply is reduced during a drought, a two-Ɵer calculaƟon governs how the available water is allocated between San Francisco and BAWSCA’s 26 member agencies. Tier 1 of the calculaƟon allocates water between San Francisco vs the BAWSCA region, then the Tier 2 calculaƟon further subdivides the BAWSCA region’s allocaƟon among the 26 member agencies.
The exisƟng Tier 2 agreement has been used only once, during the most recent drought, and several deficiencies became apparent. Staff-level negoƟaƟons to update the Tier 2 agreement have been in progress for a couple years and are nearing a conclusion. The final agreement will go to the governing boards of all 26 member agencies for approval, including Sunnyvale City Council, and must be raƟfied by all agencies to take effect.
BAWSCA’s role in these negoƟaƟons is as a convener and facilitator. BAWSCA is not a party to the Tier 2 agreement and the BAWSCA Board does not provide direcƟon or review of proposals. The BAWSCA Board strongly supports the negoƟaƟons and has provided BAWSCA staff with the necessary Ɵme and resources to facilitate the process. This is a good example of how BAWSCA works regionally to foster collaboraƟon between its 26 member agencies to benefit the enƟre region, even when BAWSCA does not have direct authority.
High-Quality Water
Water quality is a highly regulated and technical subject that BAWSCA and its member agencies address at the staff level. As is typical, no water quality issues rose to the Board level this year.
SFPUC’s main water source, the Hetch Hetchy watershed on the Tuolumne River, remains one of the cleanest and best-protected water sources anywhere.
Fair Price
Bond Refinancing
In January, BAWSCA completed refinancing of $134M of bonds originally issued in 2013 to cover capital costs incurred by the SFPUC. The new, lower interest rate of 2.06% (down from an average of 4.75% previously) was locked in over a year earlier in November 2021, just weeks before interest rates rose.
Sunnyvale’s share of the savings from this refinancing is approximately $195,000 per year through 2034.
Attachment 5
Water Rates
As Council is no doubt aware, SFPUC’s wholesale water rates increased around 25% over the last two years aŌ er several years of 0% increases. While BAWSCA is not directly involved in SFPUC’s rate seƫ ng process, which is largely formulaic, BAWSCA carefully evaluates SFPUC’s capital projects and other major expenses that ulƟmately affect wholesale water rates to ensure that expenditures are prudent and cost- effecƟve. BAWSCA staff also reviews SFPUC’s water charges every year to verify that cost allocaƟon agreements are followed.
Long-Term Planning
Long-Term Reliable Water Supply Strategy 2045 (Strategy 2045) This year BAWSCA began a mulƟ-year effort to update its Long-Term Reliable Water Supply Strategy. This long-term framework is of great interest to the Board and was discussed at several meeƟngs. The previous Strategy, release in 2015, was very helpful in focusing BAWSCA’s efforts where it could make the biggest difference regionally. Many of those earlier goals have been accomplished, and the regulatory environment and the region’s needs have evolved, so updaƟng the Strategy is Ɵmely.
The draŌ objecƟves for Strategy 2045 are to:
Provide a comprehensive picture of the region's supply needs and opƟons. Establish a framework for collecƟvely maintaining and improving regional water supply reliability and resilience.
Elevate awareness of new and emerging regulaƟons that impact water supply management. Expand regional dialogue and collaboraƟon to collecƟvely address common needs. Close the gap on funding needed for water supply resilience and reliability. Support availability of affordable water supplies to all customers. 2021-2023 Drought Report
BAWSCA is beginning to prepare a report on drought response efforts, impacts, and lessons learned for the 2021-2023 drought. A similar report prepared aŌ er the 2014-2017 drought captured key efforts and insights from that period and proved to be a useful reference during the most recent drought.
RFA
The San Francisco Bay Regional Water System Financing Authority (RFA) was established by State legislaƟon to give BAWSCA member agencies the authority to finance regional water projects independent of the SFPUC. This authority has not been exercised to date but remains an valuable tool should it be needed in the future.
The RFA meets once a year each January for about 5 minutes to approve the minutes from last year’s meeƟng and elect a Chair and Vice Chair for next year’s meeƟng. There was no other RFA acƟvity this year.
Closing Remarks
I would like to pass along a word of graƟtude for Sunnyvale from a fellow BAWSCA Board member whose water agency, which is not near Sunnyvale, experienced a water main break late on a recent Friday. They Attachment 5
discovered that they did not have the right size of valve or fiƫ ng, so they reached out to the BAWSCA CEO who personally contacted water managers throughout the enƟre BAWSCA region. Sunnyvale had the needed part on hand, and the other water agency promptly sent a driver to pick up the part so that repairs could be completed quickly to restore service to customers. Regional collaboraƟon takes many forms, and a big thank you to Sunnyvale staff for pitching in to help another Bay Area agency on short noƟce.
Please reach out to me if you have any quesƟons about this report or would like more informaƟon about BAWSCA’s work. It has been an honor and a privilege to serve the region as a BAWSCA Board Member and as Board Chair.
Attachment 5
On May 19, 2023, BAWSCA
completed its first 20 years
since it was formed by
member agencies following
authorization by the California
Legislature with the passsage
of AB 2058 in 2002.
“A multicounty agency authorized to
plan for and acquire supplemental
water supplies, encourage water
conservation and use of recycled
water on a regional basis.”
[BAWSCA Act, AB2058 (Papan - 2002)]
BAWSCA Delivers Valuable Results
for the Region’s Water Users
• Ensuring a reliable supply of high-quality water at a fair price for BAWSCA’s 1.8 million water users in Alameda, San Mateo, and Santa Clara counties, including more than 40,000 businesses and hundreds of communities.
• Saving BAWSCA’s water users $47 million through oversight of the water supply agreement with San Francisco.
• Making valuable investments in water conservation
resulting in a 27% reduction in total water use since
2003, including educating water customers about the importance of using water wisely .
• Helping residential water customers in the three counties r espond aggressively and responsibly to recent droughts, and to Governor Gavin Newsom’ s request for a reduction in water use, achieving a low per capita use of 60 gallons per person per day . • Providing close oversight and making specific
r ecommendations for the State mandated $4.8 billion
r ebuilding of San Francisco’s 100-year-old,165-mile long, ear thquake-vulnerable Regional Water System , which is 99 percent complete, to protect all water users who depend on it.
Attachment 5
Border shows BAWSCA Service Area (Google Maps)
San
Francisco
Bay
Hayward
San Jose
San Mateo
BAWSCA has the authority to coordinate water conservation, supply and recycling activities for its member agencies; acquire water and make it available to other agencies on a wholesale basis; finance projects, including improvements to the Regional Water System; and build facilities jointly with other local public agencies or on its own to carry out the agency’s purposes.
Alameda County Water District
Brisbane
Burlingame
California Water Service Company
Coastside County Water District
Daly City
East Palo Alto
Foster City/Estero MID
Guadalupe Valley MID
Hayward
Hillsborough
Menlo Park
Mid-Peninsula Water District
Millbrae
Milpitas
Mountain View
North Coast County Water District
Palo Alto
Purissima Hills Water District
Redwood City
San Bruno
San Jose
Santa Clara
Stanford University
Sunnyvale
Westborough Water District
BAWSCA AGENCIES
BAWSCA SERVICE AREA
Nicole Sandkulla, CEO/General Manager
155 Bovet Road, Suite #650, San Mateo, CA 94402
650.349.3000 | www.bawsca.org
Attachment 5