REPORT TO THE CITY COUNCIL October 22, 2015 FROM: THOMAS C. ESQUEDA, Director Department of Public Utilities SUBJECT ..Title Approve the Memorandum of Understanding (MOU) for Planning and Coordination Related to the Sustainable Groundwater Management Act (SGMA) among, and between, public water supply agencies and local governments located in the North Kings Sub-Basin of the San Joaquin Valley Basin. ..Body RECOMMENDATION The Administration recommends that City Council approve the SGMA MOU. EXECUTIVE SUMMARY The Sustainable Groundwater Management Act (SGMA), passed September 14, 2014, requires that water users within high-priority groundwater subbasins create State-approved plans to bring groundwater aquifers into sustainable balance by 2020. The City of Fresno's municipal corporate limits and sphere-of-influence are located within the boundaries of the State-designated Kings Sub-Basin (Sub-Basin Number 5-22.08) of the San Joaquin Valley Basin (Basin Number 5-22). See Attachment 1 for the boundaries of sub-basins within the San Joaquin Valley Basin. Within each Subbasin, local agencies and stakeholders must create a Groundwater Sustainability Agency or Agencies (GSA) by June 30, 2017, and submit a Groundwater Sustainability Plan or coordinated Plans (GSP) by 2020. Within a portion of the Kings Sub-Basin (informally called the "North Kings Sub-Basin" by the entities within it), a group of water supply agencies and local governments desire to enter into a non-binding MOU to plan and coordinate the compliance requirements for SGMA.. The boundary of the North Kings Sub-Basin generally follows the water service area boundary of the Fresno Irrigation District. Water supply agencies and local governments located within the North Kings Sub-Basin are parties to the proposed MOU, including the City of Fresno, City of Clovis, City of Kerman, Malaga County Water District, Pinedale County Water District, Biola, Fresno Irrigation District, Garfield Irrigation District, International Irrigation District, Bakman Water Company, Fresno Metropolitan Flood Control District, and Fresno County. The MOU is non-binding, and is intended to allow the City of Fresno to enter into discussions with other public water supply agencies and local governments in the North Kings Sub-Basin to review, evaluate, plan and coordinate compliance requirements. BACKGROUND On September 14, 2014, the Governor of California signed into law three bills that are collectively referred to as the Sustainable Groundwater Management Act (SGMA). The SGMA recognizes that excessive groundwater extraction causes overdraft, failed wells, deteriorated water quality, environmental damage, and irreversible land subsidence; all of which exist in the City of Fresno. In January 2015, the State Department of Water Resources (DWR) ranked the San Joaquin Valley Groundwater Basin and the Kings Sub-Basin, over which the City of Fresno is located, as one of the 21 most over-drafted groundwater basins in California out of 515 groundwater basins. Accordingly, the San Joaquin Valley Groundwater Basin is a high-priority groundwater basin for corrective action under the SGMA. The SGMA explicitly states that groundwater resources are most effectively managed at the local or regional level and that local and regional agencies require the necessary support and authority to effectively and sustainably manage groundwater basins and sub-basins. Pursuant to the SGMA, any local agency (or group of local agencies) may serve as the Groundwater Sustainability Agency (GSA) for all, or a portion of, the groundwater basin in which it is located. To become a GSA, a local agency files a Notice of Intent, and follows specified procedural steps specified in the SGMA. Once the GSA is designated for all, or a portion of, a groundwater basin, the GSA is responsible for preparing a Groundwater Sustainability Plan (GSP). A GSP may be any one of the following: 1. A single plan covering the entire basin developed and implemented by one groundwater sustainability agency. 2. A single plan covering the entire basin developed and implemented by multiple groundwater sustainability agencies. 3. Multiple plans implemented by multiple GSAs and coordinated pursuant to a single coordination agreement that covers the entire basin. The Administration has yet to prepare a recommendation as to whether the City of Fresno should serve as the GSA for the City of Fresno's municipal corporate limits and sphere of influence, or whether the City should enter into a Joint Powers Agency (JPA) that would include other public water supply agencies and local governments over a larger geographic area of the Kings Sub-Basin. Within a portion of the Kings Sub-Basin, informally called the North Kings Sub-Basin, a group of water supply agencies and local governments desire to desire to enter into an MOU to plan and coordinate the compliance requirements for the SGMA. The proposed boundary of the North Kings Sub-Basin generally follows the water service area boundary of the Fresno Irrigation District. The water supply agencies and local governments that are located within the North Kings Sub-Basin, and would be party to the MOU, include the City of Fresno, City of Clovis, City of Kerman, Malaga County Water District, Pinedale County Water District, Biola, Fresno Irrigation District, Garfield Irrigation District, International Irrigation District, Bakman Water Company, and Fresno Metropolitan Flood Control District, and Fresno County. Pursuant to the SGMA, the City of Fresno and other public agencies must comply with the following schedule of events: 1. By January 1, 2017, the City - if it so desires - shall submit an alternative GSP pursuant to the SGMA; 2. By June 30, 2017, a GSA must be designated for the City of Fresno service area; and 3. By January 31, 2020, all basins designated as high- or medium-priority basins by the State shall be managed under a GSP. The MOU presented in this Agenda Item is intended to allow the City of Fresno to enter into discussions with other public water supply agencies and local governments in North Kings Sub-Basin to review and evaluate the features, benefits, advantages and disadvantages of (1) collaborating with other agencies, or (2) proceeding independently to comply with the requirements of the SGMA. Key criteria in evaluating the range of options available to the City will include, but not be limited to, capital and operating costs; water supply reliability and resiliency; institutional coordination requirements; regulatory compliance and reporting requirements; and degree of effectiveness in correcting groundwater contamination and groundwater overdraft conditions in the City of Fresno. While the MOU is non-binding upon the City and other participants, it provides the best opportunity to fully understand and evaluate the range of options available, and to make the most informed decision possible for the City's ratepayers. The Administration recommends that Council approve the SGMA MOU. ENVIRONMENTAL FINDINGS This is not a "project" for the purposes of CEQA pursuant to CEQA Guidelines � 15378(b)(5), as it is an administrative action that will not result in direct or indirect physical changes to the environment. LOCAL PREFERENCE Local preference was not considered because approving the SGMA MOU does not include a bid or award of a construction or services contract. FISCAL IMPACT As this is an enterprise operation, there is no impact to the General Fund. Attachments: Map of San Joaquin Valley Basin and Kings Sub-Basin North Kings Sub-Basin SGMA MOU