Item 21 - Public Hearing - Resolutions Approving the 2025 Urban Water Management Plan and the 2025 Water Shortage Contingency Plan

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202S WATER SHORTAGE CONTINGENCY PLAN MAY 2026/FINAL DRAFT/CAROLLO Per Water Code Section 10632 (a)(7)(C), the City shall coordinate with any agency or county within which it provides water supply services for the possible proclamation of a local emergency under California Government Code, California Emergency Services Act (Article 2, Section 8558).Table 2 identifies the contacts for all cities or counties for which the Supplier provides service in the WSCP, along with developed coordination protocols, can facilitate compliance with this section of the Water Code in the event of a local emergency as defined in subpart (c) of Government Code Section 8558. Table 2 Agency Contacts and Coordination Protocols Contact lAgency Coordination Protocols Executive Director of Public Works City of Santa Ana Public Works Agency Call/email/ Water Resource Manager City of Santa Ana Public Works Agency Call/email Water Manager City of Orange Public Works Department Call/email Director of Public Works City of Garden Grove Call/email Director of Public Works Orange County Public Works Department Call/email 3.8 Financial Consequences of WSCP Per Water Code Section 10632 (a)(8), Suppliers must include a description of the overall anticipated financial consequences to the Supplier of implementing the WSCP.This description must include potential reductions in revenue and increased expenses associated with implementation of the shortage response actions. This should be coupled with an identification of the anticipated mitigation actions needed to address these financial impacts. During a catastrophic interruption of water supplies, prolonged drought, or water shortage of any kind, the City will experience a reduction in revenue due to reduced water sales.Throughout this period of time, expenditures may increase or decrease with varying circumstances. Expenditures may increase in the event of significant damage to the water system, resulting in emergency repairs. Expenditures may also decrease as less water is pumped through the system, resulting in lower power costs.Water shortage mitigation actions will also impact revenues and require additional costs for drought response activities such as increased staff costs for tracking, reporting, and communications. The City receives water revenue from a service charge and a commodity charge based on consumption. The service charge recovers costs associated with providing water to the serviced property.The service charge does not vary with consumption, and the commodity charge is based on water usage. Rates have been designed to recover the full cost of water service in the charges. Therefore, the total cost of purchasing water would decrease as the usage or sale of water decreases. In the event of a drought emergency, the City will impose excessive water use penalties on its customers,which may include additional costs associated with reduced water revenue, staff time taken for penalty enforcement, and advertising the excessive use penalties. The excessive water use penalties are further described in the City's Municipal Code Chapter 39 Article VI (Appendix B). However, there are significant fixed costs associated with maintaining a minimal level of service. The City will monitor projected revenues and expenditures should an extreme shortage and a large reduction in water sales occur for an extended period of time.To overcome these potential revenue losses and/or expenditure impacts, the City may use reserves. If necessary,the City may reduce expenditures by delaying implementation of its Capital Improvement Program and equipment purchases to reallocate CITY OF SANTA ANA