Santa Ana River Conservation and Conjunctive Use Program- Prop 84 Grant Funding Contract Kelley Gage March 9, 2017

Background Santa Ana River Conservation and Conjunctive Use Program (SARCCUP): SARCCUP is the watershed-scale program that will bank imported water to enhance water supply reliability and increase available dry year supplies in the Santa Ana River Watershed SARCCUP is a $100 million program developed by the five regional water agencies in a collaborative effort with support from Proposition 84 funding SARCCUP successfully secured over $55 million in grant funding in the last round of Proposition 84 funding

Background EMWD IEUA OCWD SBVMWD WMWD SARCCUP Agencies

Background SARCCUP includes the following elements: Water Use Efficiency: Assistance for agencies to develop conservation-based rates Habitat Creation: for the Santa Ana Sucker fish and Arundo Removal along the Santa Ana River Watershed-Scale Cooperative Water Banking Program: includes water banking to store water in wet years and provides a new supply during droughts and emergencies resulting in new Dry Year Yield (DYY) for the watershed

EMWD’s SARCCUP Phase 1 Facilities San Jacinto Basin Mountain Ave West Recharge Facilities 3 Production Wells (sites being investigated) Est. Construction Cost: $22,280,000 Grant Funds Awarded: $12,786,000 EMWD’s Contribution: $9,300,000

Previous Board Actions on SARCCUP In 2014: Board approved a Memorandum of Understanding that authorized the five SAWPA member agencies to collaborate and secure Prop 84 IRWM funding for a watershed-scale conjunctive use program In 2015: the Board approved Amendment 1 to the 2014 MOU, which added references to the more formalized Santa Ana River Conjunctive Use Program, along with “Foundational Principles” to maximize local resources and avoid competition between the SAWPA member agencies for the Prop 84 IRWM funding In 2016: the Board approved a new MOU between all SARCCUP parties agreeing to equally pay one-fifth cost of local match for program

SARCCUP Program Agreement Framework Program Funding Program Operations Grant & Construction Coordinated Operating, Storage, Exchange and Management Agreement SARCCUP Agencies EMWD IEUA OCWD SBVMWD WMWD Operating Committee Funding Agreement SARCCUP Agencies PA-23 Agreement (Grant Administration & Construction Management) SARCCUP Agencies SAWPA Other Agreements MWD Demonstration Project Agreement HSJ Watermaster Storage Agreement

SARCCUP Grant Administration DWR provides oversight on grant performance and project implementation Department of Water Resources (DWR) (granting agency) Grant administration and oversight of project performance Santa Ana Watershed Project Authority (SAWPA) (grantee) Responsible for management of the SARCCUP program and will provide necessary documentation to SAWPA Project Agreement 23 (PA23) (Sub-Grantee) Responsible for project component construction/ implementation of Facilities #1 Agency 1 Agency 2 Agency 3 Agency 4 Agency 5 (Sub-Grantee) Responsible for project component construction/ implementation of Facilities #2 (Sub-Grantee) Responsible for project component construction/ implementation of Facilities #3 (Sub-Grantee) Responsible for project component construction/ implementation of Facilities #4 (Sub-Grantee) Responsible for project component construction/ implementation of Facilities #5

SAWPA-EMWD Sub-Grantee Agreement Covers EMWD’s Phase 1 SARCCUP facility costs and other Prop 84 2015 Round grant and program administration costs * EMWD’s local match share will be $9.3 million, in accordance with the 2016 MOU where all agencies agreed to equally pay one-fifth cost of local match for program. Contract term is five years, with a ten year performance reporting requirement Description Total Total Contract Amount - Includes Phase 1 Facility and Grant Administration Costs $22,906,118 Grant-Reimbursed Costs $12,786,153 Local Match $10,119,965*

SARCCUP Program – Previously Authorized Development Phase Costs Description – Summary through Final Design EMWD’s Share ERRP CEQA, Prelim. Design & Prop. Evals. $ 1,757,183 Cost Sharing Activities – Agreements, Master Plan & DS Model 272,062 SAWPA Led Activities – Program Manager, PA-23 & PA-22 395,305 Preliminary & Final Design – Phase 1 Facilities, Prop. Acquisition 2,361,000 Contingencies 214,450 Total Costs through Final Design June 30, 2017 $ 5,000,000 Cost Sharing includes: Program CEQA for SARCCUP, support for the Overall Operating and Financial Agreements, Watershed Master Plan, and Decision Support Model SAWPA staff labor to support PA-23 & PA-22 (WUE Phase 2) meetings, Program Manager (RMC), and contract between SAWPA & RMC Phase 1 Facilities include Final Design for Mountain Avenue West Recharge Site, Preliminary & Final Design for three production wells, property acquisition (two sites) and development of a Storage Agreement with the H-SJ Watermaster

Next Steps Individual SARCCUP Agencies enter into Sub-Grantee Agreements with SAWPA SARCCUP Agencies develop agreements that facilitate construction, implementation, funding, and overall operations of the facilities and water purchases EMWD completes CEQA and preliminary and final design for the Phase 1 facilities, acquires the necessary property, and develops a Storage Agreement with the HSJ Watermaster Future implementation costs to be authorized by Board prior to expenditures

Recommendation Approve and authorize the General Manager, or his designee, to execute the Proposition 84 Integrated Regional Water Management 2015 Round Implementation Grant Funding Contract between the Santa Ana Watershed Project Authority and Eastern Municipal Water District in support of the SARCCUP Program.

Contact Information Kelley Gage Senior Director of Water Resources Planning (951) 928-3777 Ext. 4561 Email: gagek@emwd.org