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PUBLIC HEARINGS AND OTHER MATTERS 12. Update on Stage 3 Water Shortages and Local Emergency Declaration Director of Operations Services Smith presented the Stage 3 Water Shortage Update, including a recommendation that the City Council suspend Emergency Drought Surcharges for up to 90 days. Mr. Smith review conservation efforts for 2014, which citywide totaled over 1 billion gallons (27.8%). City facilities were responsible for about 137 million gallons saved which equates to a 45% reduction over 2013 and nearly double the level of conservation that was asked of the community. 37 customers across 95 locations availed themselves of the city's Controller Assistance Program, saving 59 million gallons over the last 2 years. He encouraged anyone who has not yet taken advantage of the free program to contact the city. At the residential level, only 3.1% of users failed to meet their reduction targets for 2014. Due to strong precipitation levels in December 2014, the local region graduated from Exceptional to Extreme Drought conditions this month. He reviewed a year to year comparison of precipitation levels and conditions at Lake Oroville, acknowledging that January has been a bit dry but noting that February and March may still bring some much needed rain and snow to the Sierras. On January 15, 2015 the Department of Water Resources increased the 2015 allocation from the 10% it announced the previous month to 15% (approximately 12,000 acre feet of water). Zone 7 continues to work on a Yuba County transfer of 300 acre feet and a one-time exchange with Contra Costa Water of 2,500 acre feet. Both applications have been submitted to the state and are pending approval. The city's Recycled Water Program continues to move forward and is conservatively estimated to yield another 200 acre feet. Zone 7 also anticipates being able to access carryover water not made available last year due to the shutdown of the Delta, which adds another 10,300 acre feet of resources. Based on these current estimates the city expects to have 25,393 acre feet available in the 2015 year. This equals about 50% of the total demand, versus estimates of 20% from last month, fulfilling the entire indoor demand and meeting a bit of the outdoor or irrigation needs. Mr. Smith explained that while there is no doubt that California is going into its fourth year of drought, conditions are such that staff feels it is warranted to suspend the current drought penalties, though not the prohibitions, for a period of 90 days. This recommendation reflects both improved conditions this year and an acknowledgement that January 2013 was a very wet month, resulting in very low consumption and ultimately reduction targets that would be very difficult for the community to meet. As of this morning, year to date water use is up 1% over 2013 but down 53% from the same period last year. Mr. Smith stressed that this is a temporary suspension only, meaning that the public should continue with its conservation efforts. Staff will continue to monitor the situation closely and, if warranted, may ask to reinstate the mandate requirements. Staff will also continue to monitor precipitation levels and information from Zone 7 and make recommendations to the Council as is appropriate. Assuming there are no changes, the 90 day suspension would remain in effect until April 2015 when the Department of Water Resources releases its final numbers. Until that time, all of the state's mandatory restrictions as well as the city's Stage 3 prohibitions will remain in effect and enforceable via administrative citation as opposed to rate penalties. Mr. Smith stated that the local retailers liaison committee continues to work with Zone 7 to diversify the Tri Valley's water portfolio and that the latter will present its water plan at the Operations Service Center on February 1. Councilmember Olson asked if Zone 7 is in a position to purchase water contracts and if so, from whom. City Council Minutes Page 3 of 12 January 20,2015