CCMIN05152018 - Laserfiche WebLink

City Manager Fialho asked for clarification of what happened during the drought in terms of State Project water allocations and it was noted 2014 saw the lowest allocation ever, from the State Water Project and there were restrictions in terms of delivery. It was noted there can be seasonal restrictions, but it is very unusual and other sources of supply were listed. Sikes Reservoir would provide additional water and Los Vaqueros would be a storage option. Brief discussion followed regarding Lake Del Valle and collection of local water. Director of Operations and Water Utilities Yurchak addressed the Community Survey including hiring a consultant, survey objectives, November 2015 survey key findings, January 2018 survey key findings, majority support for the recycled water proposal and reported supporters cite the need to shore up supplies and there was majority of support for $5 per month or 5% increase in rates. Additionally, the survey indicated a drought-focused message, around the environment, was the most persuasive, and presented recommendations. Councilmember Olson asked for clarification of Pleasanton taking the lead on institutional matters and Director of Operations and Water Utilities Yurchak reported they will come further down in the process and includes decision-making, ownership, operation, facilities and the possibility of establishing a Joint Powers Agreement (JPA). Councilmember Narum asked about sharing costs and asked about the existence of a formula. Director of Operations and Water Utilities Yurchak reported that would be part of the institutional discussion and the framework that needs to be developed. In terms of next steps, City Manager Fialho reported the Technical Advisory Committee would work on a set of recommendations and they would be considered by each Board and Commission based on potential benefits. City Manager Fialho reported if the City initiates recommendations 1 through 3, there is a series of discussions that occur at a technical level, which will be shared with the Roundtable and brought back to each governing board to evaluate. Council's decision tonight is not final and there will be opportunities to exit. Councilmember Brown noted costs are nowhere near what the survey shows residents will tolerate and this is significant debt the City would have to undergo for increased water reliability in the winter. She wondered how the City would finance that much debt. City Manager Fialho reported it would depend on the option chosen by the City. Part of the next steps is for staff to continue to narrow the list of six to something feasible based on policy considerations, capital costs and operating costs. It is a combination of shared debt between all participating agencies, or cash that may be on hand to fund the project and will depend on each agency's ability to pay. Councilmember Narum felt the idea, in terms of financing, would be to float bonds and the unit cost has financing built into it. Staff reported it is not a reflection of how it will be financed, but rather staffs attempt at getting an apples-to-apples comparison. Ms. Prior reported the assumptions for translating that into an annual cost per acre foot, is assuming what the debt service will be; a thirty-year bond, at 5%. She noted that is somewhat conservative and noted there are other funding mechanisms considered. She added that each portion of the portfolio would have a different cost and customers would pay a blended rate supporting the differences in the portfolio. Mayor Thorne noted there were no speakers to address this item. City Council Minutes Page 10 of 11 May 15, 2018