Protecting Our Local Watersheds

Regional Planning
and Water
Reliability Strategy

The District is recognized statewide for its regional planning efforts and proven track record of ensuring water reliability in the most cost-effective manner. During the recent historic drought in California, we earned a reputation as “an agency that thrived during the drought.” Our goal in planning for water reliability is to identify projects and opportunities that provide the greatest value for our customers. We make smart investments, based on available data, on efforts that offer reliability but are not high-risk, high-cost or are unproven. The District developed a Long Range Water Reliability Plan in 2014 that outlined an adaptive strategy for evaluating projects to continue improving water reliability for its customers without overinvesting. This approach has enabled the District to provide the lowest average bill in South Orange County, while substantially increasing reliability.

Given that Southern California receives most of its water supply from Metropolitan Water District of Southern California (MWD), we have and will continue to support significant investments to promote the conveyance of water from the Bay-Delta and the Colorado River. We all pay for the costs that MWD expends to import water from Northern California, whether or not we receive a single drop. Therefore, our goal in reliability planning should not focus on being independent of imported water since we are already obligated to pay for it, but focus on what are the best investments to complement imported water and support water reliability policies. For that reason, once the California WaterFix project is approved, all water agencies in the region will be asking their customers to pay for the construction of the project.

Although we value our investments with MWD to keep importing low-cost, quality water, MNWD also takes local actions to diversify its water source portfolio. Our local actions help ensure overall system reliability and generate supplemental water supplies in drought conditions. We prefer to invest in local solutions that offer proven and near-term results.

New Water Supply
and Reliability
Projects

The District has invested over $70 million in water system reliability projects since 2008, which has improved the ability of the District to provide service in times of emergency. Together, these projects have increased water supply availability during emergency periods from 1.5 days to 24 days. The District’s Board adopted a policy to reach 31 days of reliability and is also engaged in evaluating and implementing a variety of future local water supply initiatives that are cost-effective:

  • Expansion of the District’s Recycled Water System. The District recently completed a Recycled Water Masterplan identifying upwards of 1,300 AF of existing irrigation accounts that could be cost-effectively converted to reliable recycled water accounts. The final analysis with specified customer accounts, and their corresponding connections, that can be converted is scheduled to be released in Fall 2018. MNWD is a leader in recycled water development, with 50 years of proven experience. The City of San Juan Capistrano currently does not treat any of its wastewater to recycle for irrigation use. MNWD’s leadership in recycled water development would be a key asset to the City’s customers in further expanding recycled water use in the City of San Juan Capistrano as MNWD currently provides approximately 20% of the recycled water imported to the City.
  • Partnership with Orange County Water District. MNWD has been actively working with the Orange County Water District to better understand available capacity in its groundwater basin and pilot a program for emergency supplies that could ultimately benefit a variety of Orange County agencies. The Orange County Water District is planning to update its Orange County Groundwater Basin Storage and Operational Strategy this year, as well as address water storage program requests being made by MNWD.
  • Support of Ocean Water Desalination Projects. As part of MNWD’s 2014 Long Range Water Reliability Plan, MNWD evaluated new desalination projects which were in various stages of planning at the time. A conceptual desalination project was evaluated and assumed to be developed at either the Huntington Beach and/or Dana Point facility, which would provide MNWD with up to 14,000 AFY. The supply would be delivered directly or “in-lieu” into MNWD’s service area, providing both water supply and system reliability benefits.
  • Use of Local Groundwater in the Aliso Creek Watershed. The District is in the process of developing test wells to evaluate the groundwater yield in the Aliso Watershed and potential for use as a local water supply. The District is in the conceptual stage and is expecting preliminary results in mid-2019. MNWD is eager to collaborate with the City of San Juan Capistrano based on the City’s existing expertise in groundwater pumping and using groundwater as a non-potable water supply which would provide mutual benefits.
  • Urban Run-off and Stormwater Diversions to Treatment Plants. Local cities and the County of Orange are faced with upwards of $1 billion in new regulatory compliance costs associated with keeping unnatural flows away from local creeks and the ocean in South Orange County. The District is currently studying the potential to divert urban and storm flows into the excess wastewater treatment capacity owned by the District. These diversions would reduce compliance costs as well as provide a local new water supply source. In the Aliso Watershed, the District is estimating that approximately 1,200 AF/Year in new water supplies can be produced.
  • Exploring Direct Potable Reuse Water Supply. The State of California recently released a framework to develop standards for direct potable reuse by 2023. The District has historically aggressively pursued the expansion of its recycled water system. However, after the remaining 1,300 AF of irrigation water demand is converted, the most cost-effective utilization of the District’s remaining wastewater would be through direct potable reuse. MNWD is committed to working with the State and local agencies to explore the feasibility and cost-effectiveness of direct potable reuse, and implement it when possible. Successful implementation would provide approximately 3,000 AF/Year of new, local potable water. MNWD is currently on the WateReuse leadership team in California and active in potable reuse research through both WateReuse and the Water Research Foundation.

Past and Future
Involvement in the
San Juan
Watershed

About a third of the District’s geographical territory is within the San Juan Watershed. Although MNWD is not currently a partner in the “San Juan Watershed Project,” many of the services and programs that MNWD offers do benefit residents, businesses, and the environment in the San Juan Watershed. If MNWD were to acquire the San Juan Capistrano water utilities, the District would expand its interest in that watershed and re-evaluate opportunities to become partners in the San Juan Watershed Project and other projects that the City of San Juan Capistrano might recommend.

MNWD also recognizes the importance of the Groundwater Reclamation Plant to the City of San Juan Capistrano. Given the City’s investments and assets, it deserves to receive the full benefit, both operationally and financially, of the Groundwater Reclamation Plant.

Innovative
Partnerships and
Applications
Benefit Local
Watersheds

MNWD has developed applications and partnerships that have direct benefit to local watersheds. The District is looking to target its outreach and water efficiency programs to help encourage the adoption of efficient watering practices to reduce overwatering, which will result in less urban runoff and improved water reliability. Additionally, staff has organized a working group across local cities, the County of Orange, and non-governmental environmental organizations to disseminate lessons learned and evaluate the impact of different strategies to reduce irrigation over-watering.

The watershed programs and collaborations MNWD supports have applicability and benefits for all watersheds in South Orange County, including San Juan Creek, Aliso Creek and Salt Creek.

Helping to Deploy a
Real-Time
Watershed Smart
Network

MNWD is working collaboratively to deploy a real-time watershed smart network with 15-minute interval flow data in the Aliso Watershed, with sensors in creeks and storm drain channels. This network, which would serve as a scalable pilot program could better inform decisions relating to investments for the San Juan Watershed. Most of the flow monitoring in South Orange County for watershed planning was done many years ago. Better real-time data enables adaptive decision-making to right size infrastructure to meet changing demands. Currently, South Orange County watershed flows in both the Aliso and San Juan Watersheds are dominated by urban runoff caused by over-irrigation during most of the year, with very little intermittent precipitation. Streams in South Orange County would only naturally flow a month or two in an average year without urban runoff, but presently flow year-round.

Security of Property
Tax Revenue and
Financial Capacity

MNWD, like many public agencies, receives property tax revenue. Fortunately, in 2004 California voters passed Prop 1A to protect local governments, including water districts, from the State taking that revenue. As a result, Article XIII Section 25.5 of the California State Constitution prohibits the State from permanently taking local government property taxes.

For additional protection, MNWD also established a rate stabilization reserve to mitigate the potential borrowing by the State of local property tax revenue. Under Prop 1A, the State can borrow property tax from local governments, but it is required to pay back the loans within 3 years, plus interest.

Unlike others, the District does not rely on issuing future general obligation bonds, which assess charges on the property tax roll above the 1 percent ad valorem.

Given its strong financial position and management, the District is the only AAA (Fitch) rated agency of the three potential successor agencies.

A strong financial rating provides MNWD the capacity to access credit and invest in infrastructure improvements at low cost, without the need to rely on grants and state or federally-subsidized financing. In large part, the District’s financial stability is due to its rate structure and sophisticated financial modeling.

Our District stands ready to extend its stellar financial and service performance to serve the people of San Juan Capistrano as demonstrated through the District’s advantages:

  • Lowest Average Bill. MNWD provides the lowest average bill in South Orange County, even after accounting for its property tax and other revenue sources. In the attached supplemental chart, MNWD is shown as the lowest average cost to its customers after all rates and charges are considered.
  • Responsible and Transparent Financial Planning. MNWD has a tradition of adopting balanced budgets with prudent reserves that invest in infrastructure. Our Board adopts 10-year financial forecasts on an annual basis as part of the budget. This planning helps us ensure smooth and cost-effective operations, provides accountability to the public and transparent information to our customers, as well as financial stability.
  • Award-Winning Service. MNWD maintains low rates without compromising quality. In-person, online and over the phone, our customer service support empowers customers to manage their water use in real-time. The Association of California Cities – Orange County, SustainOC, and WaterNow Alliance have recognized our District customer service programs for efficiency, conservation, and innovation. Most recently, Amazon honored Moulton Niguel Water District for our effective web platform – the only water district in the world recognized for innovative best practices.
  • Regional and Local Leadership. MNWD is proud of its partnerships in the region. Whether it’s our youth education partnerships with local environmental organizations or our regional efforts to mitigate stormwater runoff, our District is working collaboratively to tackle Orange County’s greatest water policy challenges.
  • Active Community Engagement. MNWD has unparalleled relationships with its local cities and fully engages with the community as active members of numerous civic, education, youth, and non-profit organizations.