Board of Directors Frank Ury Saundra F.jacobs*

Future water supplies are impacted by climate change and current supplies will not meet future demands. Response: Partially agree with the finding. Demands on potable water will decrease in the future, as outdoor water use transitions to our recycled water. Imported water will always be needed, to some degree, by most water agencies in Orange County. However, most Orange County agencies are reducing their demand for imported water. SMWD, in particular, plans to develop 30% local supply by 2030. SMWD also plans to recycle 100% of the District's wastewater, compared to the 56% it currently is recycling. Finally, the District seeks to build six months of drinking water storage locally compared to the current storage capacity of two months. Regarding imported water, South Orange County and SMWD recognize that additional storage facilities are needed throughout the state, particularly in Northern California. In addition, improvements to Delta conveyance are urgently needed. In Southern California, groundwater storage through the Cadiz project and the San Juan Basin are paramount. Without regulatory, institutional, and political changes, water storage and transfer projects will not be timely built. For example, Cadiz Valley Water Conservation, Recovery and Storage Project would capture and conserve billions of gallons of renewable native groundwater flowing beneath California's Mojave Desert that is currently being lost to evaporation and salt contamination at nearby dry lakes. Through the active management of the aquifer system and employing a state-of-the- art groundwater protection program, the Project will reduce the loss of groundwater to evaporation from the dry lakes and put this water to beneficial use, creating a reliable water supply for Southern California. Under the Imported Water Storage Component, water from the Colorado River or the State Water Project could be conveyed to recharge basins in wet years to percolate into the aquifer system, where it would be held in storage. In dry years, stored water would be returned to the Colorado River Aqueduct (CRA) via the conveyance pipeline. Continuing political and regulatory barriers have slowed the development of this project for more than a decade.

Climatologists predict future extended periods of low moisture with occasional wet years. Response: Agree with the finding.

Climate change is inevitable and is exacerbated by human behavior. Agree with the finding. Response:

South Orange County relies primarily on the importation of water. Agree with the finding. Current imported potable water availability will increase for Response: future demands, as outdoor water use transitions to our recycled water projects. South Orange County and SMWD recognize that groundwater storage through the Cadiz Project and the San Juan Basin are paramount.

Local water suppliers recognize that enhanced stormwater capture and storage, wastewater recycling, and infrastructure improvements will not be sufficient to address the long-term forecast of drought and its effects on supply. Response: Partially disagree with the finding. SMWD recognizes that local/regional stormwater capture and storage as well as wastewater recycling and infrastructure improvements will address a portion of the long-term supplies. SMWD currently captures and treats storm flows at our Gobernadora and Oso barrier projects. These flows are recycled for outdoor water use. Larger stormwater capture and storage projects, as proposed in the San Juan Basin, require decades of permit approvals and mitigation, making the cost of the project and water treatment to our ratepayers exorbitant. SMWD balances the need for future resiliency with the threat of potential stranded assets as the state mandate continues to require less water use per person, per day.

There is significant water infrastructure planning, but inadequate implementation. Agree with the finding. Water districts, no matter their location throughout Response: California, are required to comply with State mandates, and permit requirements from a variety of both State, County, and Federal agencies on a district-by-district basis. These requirements can come in the form of Executive Orders from the Governor, laws passed by the Legislature, regulations adopted by the State Water Resources Control Board, and policies adopted by Metropolitan Water District and regulations by Cities, Counties, State, and Federal authorities. Implementation on how to comply may vary by district and does not necessarily represent inadequate implementation. In addition, implementation of large projects requires significant financial and other investments by the participants. Our ratepayers demand assurances that their funds are spent wisely and with close oversight.

The review and approval process for major water capital projects is cumbersome and overly restrictive. Agree with the finding. The regulatory process needs to be overhauled to streamline Response: the construction of meaningful water infrastructure.

Failing to find solutions to water shortages will have a significant impact on the Orange County economy. Agree with the finding. Water is essential for society to survive much less thrive. Response: Water shortages will have a significant impact on all aspects of life in Orange County, including the economy.

Continued development in Orange County creates additional water supply needs. Response: Agree with the finding. Smart development practices have greatly reduced water demands as new development is required to incorporate the newest water efficient building standards, reducing indoor and outdoor water use, and increasing the use of recycled water. Water use, per capita, has declined since the 1990's creating the opportunity for extending the use of existing supplies. This has allowed the District to expand its number of customers by 25% with no corresponding increase in water demand. Conservation and efficient use of water is essential.

Partially agree with the finding. SMWD believes the focus should also be on future Response: water supplies and not continued restrictions on both potable and recycled waters.

Increased outreach and public education are necessary. Agree with the finding. Regional, consistent messaging focusing on short and long- Response: term solutions are required to improve the public's awareness and implement real demand management and supply solutions.

Desalination has proven to be technologically and environmentally feasible and is slowly being embraced as a drought-resistant source of water. Partially agree with the finding. Local desalination project proponents can Response: strengthen coordination with other adjoining districts by recognizing the essential connection between water distribution, storage and treatment facilities that are required to make desalination practical and more affordable.