REPORT TO THE CITY COUNCIL January 7, 2016 FROM: THOMAS C. ESQUEDA, Director Department of Public Utilities SUBJECT ..Title RESOLUTION - Authorizing an application, in cooperation with the Clovis Unified School District, the Fresno Unified School District, and the Central Unified School District, to the Department of the Interior, Bureau of Reclamation for a FY2016 WaterSMART: Water and Energy Efficiency Grant in the amount of $700,000 to upgrade and enhance the water efficiency of the indoor plumbing systems and outdoor irrigation systems at elementary, middle, and high schools in the City of Fresno public water supply service area ..Body RECOMMENDATION Staff Recommends that the City Council: 1. Adopt Resolution authorizing an application to the Department of Interior, Bureau of Reclamation for a WaterSMART: Water and Energy Efficiency Grant in the amount of $700,000 to upgrade and enhance the water efficiency of the irrigation systems at elementary, middle, and high schools in the City of Fresno public water supply service area; 2. Authorize the Director of Public Utilities or designee(s) to execute all application documents on behalf of the City and the Clovis Unified School District, the Fresno Unified School District, and the Central Unified School District. EXECUTIVE SUMMARY The City of Fresno provides potable water supply service to residents, businesses, industries, and institutions within a geographic area that extends across approximately 110 square miles. Within the City's water supply service area, the City provides water service to the Clovis Unified School District, the Fresno Unified School District, and the Central Unified School District. During calendar year 2014, the water use for the Clovis, Fresno, and Central unified school districts was 230 million gallons, 880 million gallons, and 550 million gallons, respectively. As drought conditions have continued to worsen in California, the City of Fresno has been actively engaged in water supply planning and coordination efforts with the Clovis, Fresno, and Central unified school districts. The planning and coordination has focused on opportunities to reduce water use through the installation of more water efficient indoor plumbing fixtures; upgrade of irrigation systems from spray to micro-spray and drip; installation of smart controllers; installation of soil moisture sensors; and installation of rainfall sensors - all intended to reduce potable water consumption at existing public schools. The total estimated cost of the retrofit projects for all three school districts is estimated at $1,400,000. With this level of investment it is estimated that the public school systems will reduce their total annual water consumption by approximately 15 percent (~250 million gallons), which is the equivalent volume of water used by approximately 1,500 homes annually in the City of Fresno public water service area. Fortunately, the Department of Interior, United State Bureau of Reclamation provides 50/50 cost-share grants for water saving projects such as the indoor plumbing fixture upgrade and irrigation system upgrade projects planned by the Clovis, Fresno, and Central unified school districts. The total estimated cost of the retrofit projects for all three school districts is estimated at $1,400,000, and the entire project cost will be funded through the WaterSMART grant ($700,000) and the three school districts ($700,000). The City of Fresno's responsibility will be to serve as the primary applicant for the WaterSMART grant, and provide oversight inspections when the upgrade and enhancement projects are complete. Staff recommends that Council adopt the attached Resolution authorizing the City of Fresno to submit an application to the Department of Interior, Bureau of Reclamation for a WaterSMART: Water and Energy Efficiency Grant in the amount of $700,000. The proceeds from the WaterSMART grant will be used to upgrade indoor plumbing fixtures and outdoor irrigation systems at public schools in the City's water supply service area to reduce water demands on the City's public water system. BACKGROUND Governor's Executive Order On April 1, 2015, the Governor of the State of California issued an unprecedented Executive Order mandating substantial water reductions across the State. The objectives of the Executive Order are to increase water conservation, increase enforcement to prevent wasteful water use, streamline the state's drought response and invest in new technologies that will make California more drought-resilient in the future. The Executive Order expresses concerns that the current drought could extend to a fifth year, and that the drought presents urgent challenges including: drinking water shortages in communities across the state, diminished water for agricultural production, degraded habitat for many fish and wildlife species, increased wildfire risk, and the threat of saltwater contamination to fresh water supplies in the Sacramento-San Joaquin Bay Delta. City of Fresno Water Conservation Efforts The City currently uses a four-stage Water Shortage Contingency Plan that escalates water conservation measures based on supply, demand and emergency conditions. The original Drought Contingency Plan was adopted in 1989 and the City's Water Shortage Contingency Plan was adopted in 1994. The City of Fresno has been operating under year around Stage 1 water conservation measures since 1993, and from 2008 to 2015, community water conservation efforts have resulted in a drop in average daily water usage from about 310 gallons per person per day to less than 200 gallons per person per day. In August 2014, the City adopted Stage 2 water conservation measures, and the City's water consumption has dropped to approximately 195 gallons per person day during calendar 2015. While Fresno has made substantial accomplishments in accordance with the Governor's April 1, 2015 Executive Order, the City is committed to working closely with residents, businesses, industries, and institutions in the City's service area to adopt, enact and enforce additional water conservation measures and practices to further reduce water use in 2016 and beyond. During the City's evaluation of water use by customer class, it has been determined that public schools provide a unique opportunity to implement new technologies that will contribute significantly to enhancing the drought-resiliency of the City's public water supply system into the future. Water Conservation Partnership Opportunities with Public Schools The City of Fresno Department of Public Utilities provides potable water supply service to residents, businesses, industries, and institutions within a geographic area that extends across approximately 110 square miles. Within the City's water supply service area, the City provides water service to the Clovis Unified School District, the Fresno Unified School District, and the Central Unified School District. During calendar year 2014, the water use for the Clovis, Fresno, and Central unified school districts was 230 million gallons, 880 million gallons, and 550 million gallons, respectively. As drought conditions have continued to worsen in California, the City of Fresno has been actively engaged in water supply planning and coordination efforts with the Clovis, Fresno, and Central unified school districts. The planning and coordination has focused on opportunities to reduce water use through the installation of more water efficiency indoor plumbing fixtures; upgrade of irrigation systems from spray to micro-spray and drip; installation of smart controllers; installation of soil moisture sensors; and installation of rainfall sensors - all intended to reduce potable water consumption at existing public schools. It is estimated that the upgrade of public school indoor plumbing fixtures and outdoor irrigation systems will save an additional 15 percent of potable water annually (~250 million gallons), which is the equivalent volume of water used by approximately 1,500 homes annually in the City of Fresno water service area. WaterSMART Grant Application Fortunately, the Department of Interior, United State Bureau of Reclamation provides 50/50 cost-share grants for water saving projects such as the indoor plumbing fixture upgrades and irrigation system upgrades planned by the Clovis, Fresno, and Central unified school districts. Given that the WaterSMART grants are only offered to public water supply agencies and entities with water rights, the Clovis, Fresno, and Central unified school districts cannot apply for the WaterSMART grant directly, and the City has offered to serve as the primary applicant on behalf of three school districts. The total estimated cost of the retrofit projects for all three school districts is estimated at $1,400,000, and the entire project cost will be funded through the WaterSMART grant and three school districts. The City of Fresno's responsibility will be to serve as the primary applicant for the WaterSMART grant, and provide oversight inspections when the upgrade and enhancement projects are complete. Staff recommends that Council adopt the attached Resolution authorizing the City of Fresno to submit an application to the Department of Interior, Bureau of Reclamation for a WaterSMART: Water and Energy Efficiency Grant in the amount of $700,000. The proceeds from the WaterSMART grant will be used to upgrade indoor plumbing fixtures and outdoor irrigation systems at public schools in the City's water supply service area to reduce water demands on the City's public water system. ENVIRONMENTAL FINDINGS The submission of grant application is not a project for the purposes of the California Environmental Quality Act. LOCAL PREFERENCE Local Preference was not considered because this action does not include a bid or an award of a City construction contract. FISCAL IMPACT Approving this resolution will not impact the General Fund. Project construction costs will be funded through the USBR WaterSMART Grant and the Clovis, Fresno, and Central unified school districts. With the implementation of this project, the Water Division will receive reduced revenues from the three school districts as a result of reduced water use. However, the reduction in water use will result in energy savings and chemical savings from reduced groundwater pumping to public schools in the service area. Attachments: Resolution Letter of Support