water vision sb demands tm draft 2020-07-08 clean

DRAFT Technical Memorandum

DATE: 7/8/2020

TO: Dakota Corey

City of Santa Barbara

CC: Joshua Haggmark, PE, Cathy Taylor, PE, Dana Hoffenberg

PREPARED BY: Spencer Waterman, Rob Morrow, PE, Heather Freed, PE

REVIEWED BY: Jeff Szytel, PE

PROJECT: Water Vision Santa Barbara

SUBJECT: DEMANDS PROJECTIONS BASIS

1. Introduction

PurposeThe purpose of this Technical Memorandum (TM) is to summarize the baseline demand projection for Water Vision Santa Barbara and present contingency factors to be incorporated into a demand projection envelope. The TM also updates land use demand factors for the General Plan and recommends methods to determine a minimum water demand to meet health and safety needs.

This TM is organized into the following sections:

1. Introduction2. Conservation Plan Demand Projections3. WVSB Demand Projections

Background For over 25 years, the City of Santa Barbara’s (City) primary water supply management tool has been its Long-Term Water Supply Plan (LTWSP). The City has relied on its LTWSP, last updated in 2011, to evaluate and prioritize water resource decisions and ultimately set City water resources policy. Starting in 2012, the City began experiencing an unprecedented drought (in duration and severity) that exceeded the “design drought” considered in the 2011 LTWSP.

Water Vision Santa Barbara will update the 2011 LTWSP by reassessing the adequacy, reliability, resiliency, and sustainability of the City’s water resources portfolio including evaluation of both available supply and anticipated demand. This effort will consider cost and reliability, as well as economic, environmental, and social measures, and will evaluate risks and uncertainties. Water Vision Santa Barbara will include an open and transparent process for stakeholder and public involvement. The project will culminate in a preferred long-term water supply portfolio for the City and recommend an implementation plan to City Council.

The evaluation will be incorporated into the City’s 2020 Urban Water Management Plan (UWMP) update. The UWMP must meet State reporting requirements and support updated water resources evaluations. The combined

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Water Vision Santa Barbara Demands Projections Basis

7/8/2020 Water Vision SB_Demands TM_DRAFT_2020-07-08_Clean

document - an Enhanced UWMP - will become the City’s consolidated water supply planning reference going forward.

Project Objectives and Vision Statement The following project objectives were developed for Water Vision Santa Barbara to set the expectations for planning the City’s future water supply:

1. Define a diverse, reliable, and resilient water supply portfolio that provides safe drinking water for the entire community, even during an extended water supply shortage.

2. Provide an adaptable roadmap for the City’s current and future supply needs. 3. Conduct an open and transparent stakeholder process. 4. Prepare a robust analysis of current and future supplies, considering resilience and adaptability to climate

change, natural disasters, and other changing conditions. 5. Manage costs and affordability. 6. Elevate the community’s awareness of the importance of water supply diversity and resiliency through

effective outreach, engagement, and education. 7. Deliver a comprehensive Enhanced UWMP on-schedule.

The following vision statement was developed to concisely capture the desired outcome of Water Vision Santa Barbara:

Provide long-term water security for the City of Santa Barbara by preparing a water supply plan that is

equitable, fiscally and environmentally responsible, adaptable to future conditions, and builds on the City’s

legacy of effective water management.

2. ConservationPlanDemandProjections

Background The City’s 2015 UWMP reflected the analyses completed for the 2011 LTWSP, the 2010 UWMP, and a conservation program developed in 2010 from Maddaus Water Management’s (MWM) Least Cost Planning Decision Support System Model (DSS Model). As noted previously, the LTWSP guides the City’s water resources policy and needs to be updated because:

1. The City is emerging from an unprecedented drought (in duration and severity) that exceeded the “design drought” considered in the 2011 LTWSP.

2. There are imminent impacts of new State water use efficiency requirements, which stem from the recent drought.

As shown in Figure 1 and Figure 2, the City’s water use decreased due to impacts of the unprecedented combination of the 2008-2011 recession and the historic multi-year drought that followed which affected the City from 2012-2019.

Considering the unprecedented drought, California Legislature established a framework centered on “Making Water Conservation a California Way of Life” to help the State better prepare for droughts and climate change by establishing statewide water efficiency standards and incentivizing recycled water. The resulting legislation of

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Senate Bill (SB) 606 and Assembly Bill (AB) 1668 (signed on May 31, 2018), along with future regulations, will have impacts on water providers over the coming years, requiring indoor, outdoor, and commercial industrial and institutional (CII) water use goals, water loss standards, annual water budgets, and documented preparation for long-term water shortages.

2020 Water Conservation Strategic Plan The City developed a future baseline demand estimate and conservation programs considering the aforementioned factors as part of the DRAFT Water Conservation Strategic Plan (Conservation Plan) prepared in March 2020 by MWM (1). The Conservation Plan is being prepared to accomplish the following:

1. Incorporate updated historical and projected population and commercial growth rates 2. Evaluate current and future conservation measures using a set of applicable criteria 3. Quantify the costs and water savings of the conservation measures 4. Combine the measures into increasingly aggressive programs that could be evaluated as a group

Figure 1. City of Santa Barbara Population, Water Production, and Rainfall, 1897-2019 (1)

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Figure 2. City of Santa Barbara Historical Production – 12-Month Running Average

The Conservation Plan is intended to serve as a guide for the City regarding future water use efficiency and conservation investments and activities. A functional implementation plan is included to establish and administer cost-effective conservation measures. The Conservation Plan documents the City meeting 20% reduction goals required by SB X7-7 legislation and will start the City on a path for compliance with SB 606 and AB 1668 by documenting a description of water demand management measures.

The Conservation Plan estimates of future water demand include assumptions that account for multiple variables. The most significant assumptions for factors impacting future demands include the following:

1. Population growth projections from the Regional Growth Forecast 2050 Santa Barbara County (2). 2. Employment projections from California Employment Development Department (EDD) for the Santa

Maria-Santa Barbara Metropolitan Statistical Area. 3. Post-drought demands will rebound to 90% of 2008-2013 average demands. The rebound is assumed to

take 7 years. 4. Includes estimated water savings from the plumbing code. 5. Incorporates the City’s existing water conservation program with some additional measures.

Figure 3 shows the Conservation Plan’s water demand estimates. The demand projection with the recommended savings program (referred to as Program B in the Conservation Plan) will be incorporated as the baseline demand projection for Water Vision Santa Barbara. Program B includes a reduction from the baseline demand in 2050 by 11% due to plumbing codes and an additional 6% due to Program B’s water use efficiency measures..

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Figure 3. Potable Water Baseline Demand Projections (1)

The following is a summary of the water conservation analysis findings from the Conservation Plan (1):

Conservation is the least expensive means of meeting future water supply needs for the area. The implementation of these conservation measures should reduce per capita water use and have the potential to defer the need for further infrastructure expansion. While the conservation actions identified can have a significant cost, the cost of not doing conservation and having to address increased demands through engineering solutions are even higher. Furthermore, with climate change, long-term drought, and environmental restrictions on the delivery of imported water, additional water supplies may not be available to meet future increases in demands without conservation.

The Governor signed SB 606 and AB 1668 into state law to create a more permanent conservation standard as part of implementing “Making Water Conservation a California Way of Life” legislation. The City should track development of the DWR framework into new state mandates for what is planned for 2021 and beyond and update this Plan as necessary to comply with those new mandates.

Through the DSS Model analysis, the City identified fixture costs, applicable customer classes, time period of implementation, measure life, administrative costs, end uses, end-use savings per replacement, and a target number or percentage of accounts per program year. This thorough analysis is planned to be used in the 2020 City of Santa Barbara Urban Water Management Plan and additional Santa Barbara planning documents.

Creating expanded water conservation efforts appears to be a feasible and cost-effective means of: o Meeting 20x2020 (SB X7-7) conservation/water use reduction targets; o Being more sustainable within existing water supplies; o Meeting the water use objectives outlined in SB 606 and AB 1668; o Maintaining a program in line with the former California Urban Water Conservation Council’s

(CUWCC’s) Best Management Practices; o Measuring, tracking, and reducing Non-Revenue Water Losses as outlined in SB 555;

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o Addressing reduction in water use as previously required by the statewide drought emergency declaration recently lifted; and

o Implementing the mandated statewide prohibitions in the Governor’s Executive Orders going forward (e.g., only serving water upon request, no watering for 48 hours after a rain event, etc.).

Based on the analysis, the City has selected to implement Program B, with 17 measures, a utility benefit-cost ratio of 1.09 and a cost of water saved of $821 per AF versus the estimated avoided cost of water of $865 per AF.

WVSB Baseline Demand Projections The baseline demand projections for Water Vision Santa Barbara also include two components that were not included in the Conservation Plan baseline demand estimate:

Non-potable reuse met with recycled water and blend of approximately 1,000 AFY.

City’s Water Supply Agreement with Montecito Water District for 1,430 AFY.

Figure 4. Water Vision Santa Bara Baseline Demand Projection (2019-2050)

3. WVSBDemandEnvelope

Demand Projection Risks and Uncertainties The following items are risks or uncertainties to the baseline demand projections that are proposed to be incorporated into a demand projection “envelope”, which captures a range of potential demand scenarios that account for uncertainties with the largest potential impact to the projections:

Population Projections / General Plan Updates: The residential component of the baseline projection is based on population projections from the Regional Growth Forecast 2050 Santa Barbara County (2). The

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forecast project 5,760 new housing units between 2017-2050 for an average of approximately 175 units per year. Based on the historic trends and available site within the City, the following unit mix was assumed:

o 8 single family units/year (based on average single-family development in city between 2010-2019) o 109 multi-family units/year (65% of residential units that are not single family) o 58 accessory dwelling units/year (35% of residential units that are not single family)

Land uses and growth are not expected to vary substantially since the growth rate is relatively low and there is limited space remaining for substantial growth within the City’s service area.

The State has proposed to update the state’s long-term housing goals, known as Regional Housing Needs Allocation. Through this effort, California Department of Housing and Community Development will establish new, higher short-term statewide housing goals for jurisdictions, including the City. The City is currently evaluating the potential impacts of these requirements on land use and population projections. The City will not be completed with this analysis before demand projections are set for Water Vision Santa Barbara. Therefore, we have assumed a growth rate 30% higher than the baseline, equivalent to 227 unit/year and the following unit mix:

o 8 single family units/year o 142 multi-family units/year o 77 accessory dwelling units/year

Employment Projections: The non-residential component of the baseline projection is based on employment projections from the California Employment Development Department1. Job growth that is slower or faster than the baseline projections would reduce or increase demand projections, respectively. To account for the uncertainty in the employment projections, a range of +20% and -20% growth compared with the baseline is proposed.

Drought Rebound: The baseline projection assumes that demand will return (or “rebound”) to 90% of levels prior to drought restrictions (2008-2013 average) by 2027 based on reviews of several demand scenarios with City staff and considering City’s customers response to previous droughts. After accounting for population and employment growth combined with savings from conservation measures implemented since 2013, planned conservation measures (City’s conservation program), and passive conservation (plumbing code enforcement), the rebound is equivalent to approximately 83% of levels prior to drought restrictions (2008-2013 average).

There are two variables to consider for the drought rebound – the target value and the timing:

o Target Value: Permanent conservation measures, such as turf removal, may result in a lower rebound than experienced after previous droughts. Therefore, the baseline projection could be lower, but empirical data is not available to estimate this potential impact at this time. The “envelope” could consider that demand will return to 80% of levels prior to drought restrictions rather than 90%.

o Timing: The timing of the rebound will likely be slower due to the developing COVID-19 recession since economic activity has slowed and the recovery period is uncertain. Delaying the projected

1 EDD April 2019 report for 2016 – 2016 jobs growth of 12.5% (1.2% annual growth) for the Santa Maria-Santa Barbara Metropolitan Statistical Area applied to demand projections starting in 2019.

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year for rebound would reduce near-term demands but would have minimal impact on long-term demands (in 2050). Therefore, rebound timing is not included in the demand envelope.

Uncertain New Conservation Program Response: The baseline projection assumes implementation of a conservation program that results in over 800 AFY of demand reduction by 2035 or roughly a 6% decrease beyond passive conservation savings from plumbing code changes. Though not experienced to date, there is a chance that the community may not embrace additional conservations measures, which would result in demand that is 6% higher than baseline projections.

The following item is a risk to the baseline demand projections that is expected to have temporary impacts the demand projection. Therefore, it is included as a Resilience Scenario but not included in the demand “envelope”:

Economic Recession: The reduced demands from an economic recession are assumed to be temporary and are not considered as part of the baseline projection for long-term supply planning purposes. However, they will be included as a Resilience Scenario.

The following items are risks or uncertainties to the baseline demand projections that are not expected to substantially impact the demand projection and, therefore, are not included in an “envelope”:

Response to Rate Changes / Rate Sensitivity: The City has volumetric tiered rates and water budgets for irrigation accounts. While there is a known demand response elasticity to increased rates, it is assumed that the City’s historical and projected rate structure will result in a stable response to standard rate changes over time as needed to accommodate the City’s costs for treatment and distribution.

New State Water Use Efficiency Requirements: The Conservation Plan accounts for existing requirements set by SB X7-7 and sets up the City to comply with SB 606 and AB 1668 as described in Section 2. SB 606 and AB 1668 water use efficiency standards and compliance are not fully developed at this time and will be reviewed in the 2024 UWMP Supplement and 2025 UWMP.

Demand Projection Envelope Variables Based on the rationale described above, demand projections that include the following variables were combined to form a demand envelope for portfolio evaluation:2

Population Projections: Assumes population growth at a 30% higher rate than current regional growth projections

Employment Projections: Assumes employment projections are 20% higher and 20% lower than the baseline projection

Lower Drought Rebound: Assume a rebound to 80% of pre-drought dement rather than the baseline assumption of 90% of pre-drought demand

Lower and Slower Drought Rebound: Assumes lower drought rebound (80%) and 10-year recovery period instead of the baseline 7-year recovery period.

As shown in Figure 5, population projections have minimal impact on demand in 2050, employment projections have moderate impact, and drought rebound assumptions have a large impact. The low impact from population growth assumptions is due to almost all new residents are assumed to housed in multi-family units or accessory dwelling units, which have a relatively low per capita water use. Employment projections have a moderate impact

2 As noted in Section 3.1, the “economic recession” risk was not included in the demand envelope since it is a temporary condition over the 30-year projections but will be included as a Resilience Scenario for future portfolio evaluation.

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(roughly 6% change to baseline) since it translates to increased commercial and industrial activity, such as hotels and restaurants, and its associated water use. The variable with the largest demand projection impact (roughly 13% decrease) is the water use of existing customers and the extent to which their use increases as the area emerges from drought conditions and the strong conservation messaging from media, peers, and others subsides. The assumption represents a difference of roughly 1,700 AFY by 2030 and 1,900 AFY by 2050. Note that a slower rebound would result in a slightly lower demand in the near-term but has little impact in the long-term.

Figure 5. Water Vision Santa Bara Demand Projection Envelope (2019-2050)

Based on the clear impact of the drought rebound variable, the City plans to continue to proactively track customer water use and WVSB recommendations will ultimately include an adaptive management strategy that will adjust based on the extent of the demand rebound.

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4. References1. Maddaus Water Management. City of Santa Barbara DRAFT Water Conservation Strategic Plan. March 31, 2020.

2. Santa Barbara Couny Association of Governments. Regional Growth Forecast 2050 Santa Barbara County. 2019.

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water vision sb demands tm draft 2020-07-08 clean

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