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Item 4e Information renort on the Montere_v At, reement - principles for water allocation .n. mqns, State Water Pro_iect Contractors, (SR95:372) Randall Lure presented the staff report. Jim Dixon, Zone 7, complimented Mr. Lum on his staff report. He then showed charts and talked about the negative effects of the Monterey Agreement on Zone 7. The draft EIR shows the transfer's plus/minuses. If the Monterey principles are agreed to and them are no transfers of water (130,000 acre feet of water); if you add the blocks on the chart it doesn't add up to 130,000 A.F. because the chart shows the avenge yield of the project as it now stands, which is only 75%. So if you take 75% of 130,000, it will add up to the two blocks indicated on the chart. There are three scenarios shown: first, when there are deliveries of up to 3 million acre feet per year; the next level is 3.5 million acre feet per year; and the ultimate delivery is 4.25 million acre feet per year. This was shown in that manner because once the State agrees to make allocations on the basis of entitlement, as opposed to what is being used, MEt will not need most of its water supply, or only need a small portion for the next ten years, so we will be receiving close to 100% of our deliveries. MEt will increase demands on water as build-out occurs and by the year 2020 or 2025, it will reach the 4.2 level of demand. At the lower demand level, which is where we are now, we will gain 178 acre feet of water on the avenge. The reason that is gained, is because of agriculture. Zone 7 is one of the few agencies that have both an agricultural and M & I demand. Since our agricultural allotment is not going to be cut at all, for the next ten years we will have an additional 178 acre feet of water to the 38,000 that we said last April that we had. Ten years from now, when there is a higher demand, we then will begin to lose water equal to about 388 acre feet on the avenge. At the higher demand rates in the year 2020 or 2025, Zone 7's losses would be 622 acre feet of entitlement. The reason the losses are less is because our agricultural entitlement would not be cut back. These are the effects if the Monterey principles are approved. He continued, MET signed this agreement and the Kern County Board should sign tonight. Since those two agencies represent 75% of the total 4.2 million acre feet of water enti~ements, what they do is what we do. If the State signs the agreement, it will become in effect a "done deal". If that occurs and Zone 7 does not sign it, our total losses wffi be in the magnitude of 2% or 928 acre feet per year at the 1.2 level of demand. If everyone signs the agreement and Zone 7 does not, the agreement goes into effect and Zone 7's agricultural entitlement will be reduced and the loss is greater to Zone 7 if it doesn't sign and everyone else does. Some reasons for signing the agreement are: (1) the agreement wffi be based on enfi~ement, not use (current use is 65 % of enti~ement and payments are made on the basis of entitlement not the mount of water it gets); (2) removing Kern County's objection to the transfer of entitlements (this allows a balancing of effects due to transfers because agricultural water will not be cuO; (3) it avoids a lawsuit (agricultural users are paying a lot of fixed costs and are not getting any water for it); and (4) there is a reduction in the State charges. By the 11/14/95 -5-