Item 28 - Urban Water Management Plan and Water Shortage Contingency Plan

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2007 Local Resources Program In 2006, a task force comprised of member agency representatives was formed to identify and recommend program improvements to the LRP. As a result of the task force process, the 2007 LRP was established with a goal of 174,000 acre-feet per year of additional local water resource development. The new program allowed for an open application process and eliminated the previous competitive process. This program offered sliding scale incentives of up to $250 per acre-foot, calculated annually based on a member agency’s actual local resource project costs exceeding Metropolitan’s prevailing water rate. 2014 Local Resources Program A series of workgroup meetings with member agencies was held to identify the reasons why there was a lack of new LRP applications coming into the program. The main constraint identified by the member agencies was that the $250 per acre-foot was not providing enough of an incentive for developing new projects due to higher construction costs to meet water quality requirements and to develop the infrastructure to reach end-use consumers located further from treatment plants. As a result, in 2014, the Board authorized an increase in the maximum incentive amount, provided alternative payment structures, included onsite retrofit costs and reimbursable services as part of the LRP, and added eligibility for seawater desalination projects. The current LRP incentive payment options are structured as follows: Option 1 – Sliding scale incentive up to $340/AF for a 25-year agreement term Option 2 – Sliding scale incentive up to $475/AF for a 15-year agreement term Option 3 – Fixed incentive up to $305/AF for a 25-year agreement term On-site Retrofit Programs In 2014, Metropolitan’s Board also approved the On-site Retrofit Pilot Program which provided financial incentives to public or private entities toward the cost of small-scale improvements to their existing irrigation and industrial systems to allow connection to existing recycled water pipelines. The On-site Retrofit Pilot Program helped reduce recycled water retrofit costs to the end-use consumer which is a key constraint that limited recycled water LRP projects from reaching full production capacity. The program incentive was equal to the actual eligible costs of the on-site retrofit, or $975 per acre-foot of up-front cost, which equates to $195 per acre-foot for an estimated five years of water savings ($195/AF x 5 years) multiplied by the average annual water use in previous three years, whichever is less. The Pilot Program lasted two years and was successful in meeting its goal of accelerating the use of recycled water. In 2016, Metropolitan’s Board authorized the On-site Retrofit Program (ORP), with an additional budget of $10 million. This program encompassed lessons learned from the Pilot Program and feedback from member agencies to make the program more streamlined and improve its efficiency. As of fiscal year 2019/20, the ORP has successfully converted 440 sites, increasing the use of recycled water by 12,691 acre-feet per year. Stormwater Pilot Programs In 2019, Metropolitan’s Board authorized both the Stormwater for Direct Use Pilot Program and a Stormwater for Recharge Pilot Program to study the feasibility of reusing stormwater to help meet regional demands in Southern California. These pilot programs are intended to encourage the development, monitoring, and study of new and existing stormwater projects by providing financial incentives for their construction/retrofit and monitoring/reporting costs. These pilot programs will help evaluate the potential benefits delivered by stormwater capture projects and provide a basis for potential future funding approaches. Metropolitan’s Board authorized a total of $12.5 million for the stormwater pilot programs ($5 million for the District Use Pilot and $7.5 million for the Recharge Pilot). Current Status and Results of Metropolitan’s Local Resource Programs Today, nearly one-half of the total recycled water and groundwater recovery production in the region has been developed with an incentive from one or more of Metropolitan’s local resource programs. During fiscal year 2020, Metropolitan provided about $13 million for production of 71,000 acre-feet of recycled water for non-potable and indirect potable uses. Metropolitan provided about $4 million to support projects that produced about 50,000 acre-