BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Receive Information on Consultant Study Regarding Santa Clara Valley Water District’s Water Use Projections, Water Demand Elasticity, and Customer Affordability Study; and Provide Feedback to Staff.
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RECOMMENDATION: Recommendation
Receive information on consultant study regarding Santa Clara Valley Water District’s water use projections, water demand elasticity, and customer affordability, including study scope, objectives, and status update; provide feedback to staff.
Body
SUMMARY:
Santa Clara Valley Water District (Valley Water) has engaged two consultants to perform a study to validate or suggest refinements to Valley Water’s current water use projections for Valley Water-managed water use, analyze water demand elasticity, and determine or address the affordability of water to residents and businesses within Santa Clara County (the Study). The majority of County residents and businesses receive water service from a retailer, while Valley Water acts as the water wholesaler. Study results may impact future Valley Water groundwater charges.
Background:
The Financial Planning and Revenue Collection office manages long-term forecast models and the annual rate setting process for the Water Utility. Water charges are adopted annually. Based upon feedback received from the Board during previous long-term forecasting cycles, staff decided to pursue a study to inform future rate setting cycles.
The consultants - Raftelis Financial Consultants, Inc. and Hazen and Sawyer - have been tasked to provide analyses for the following Study scope and objectives:
1. Analyze water use projections in Santa Clara County, for retailers, their direct customers, and private well owners to better determine Valley Water-managed water use projections. Valley Water-managed water use translates to revenue for the Water Utility.
2. Prepare a water demand elasticity analysis to better understand how rates impact water demand.
3. Determine the affordability of water provided by Valley Water to Santa Clara County residents and businesses now and based on future rate projections.
Valley Water staff and Valley Water’s consultants both recognize that the scope of this Study presents unique challenges, one of which is obtaining detailed water usage data from non-Valley Water sources.
Staff anticipates technical memorandums for each of the three (3) analyses to be completed, followed by a final report documenting the study.
Study Updates:
The consultants have largely completed the first task. A technical memorandum has been drafted and will be included as part of the final Study report. The key takeaways are:
• Valley Water’s approach to projecting water use is consistent with peers
• Forecast-to-actual water use has been largely accurate, with reduced variance in recent years
• High level statistical analyses demonstrate that the current approach yields reasonable ranges for near-term demand
• Water use overall continues to trend downward
• Tools exist to refine the forecasting method, if desired
Work on the second and third Study tasks are underway.
Staff recently shared this first task update with the Water Supply and Demand Management Committee (Committee); the Committee encouraged Staff to bring this update to the full Board. Staff plans to continue to bring periodic Study updates to the Committee and to the Board as appropriate.
Staff seeks feedback from the Board.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
Further analysis is necessary to determine the environmental justice and equity impacts associated with results of the Study. Updated environmental justice and equity determinations will be included in future Study updates.
FINANCIAL IMPACT:
There is no financial impact associated with this item at this time. Future changes to District-managed water use projections could impact future groundwater production and other water charges.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have a potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: PowerPoint
UNCLASSIFIED MANAGER: Manager
Darin Taylor, 408-630-3041