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.
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:
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.
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.
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.
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: