Report: Tehachapi-Cummings County Water District

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The Board of TCCWD should replace the Ad Hoc Water Priority Committee with a permanent Standing Water Committee, and include representatives of Stallion Springs CSD, the City of Tehachapi, Golden Hills CSD, Bear Valley Springs CSD, as well as representatives of agricultural interests and other customers, to create future Water Ordinances by November 1, 2023. (Finding 1)

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TCCWD should form a permanent standing committee for Operations and Budget/Financials respectively by November 1, 2023. (Finding 2)

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Board members of TCCWD should receive training and briefings regarding agenda items being considered for action and/or voting by January 1, 2024. (Finding 4) 169 NOTES: • The TCCWD and the City of Tehachapi should post a copy of this report where it will be available for public review. • Persons wishing to receive an email notification of newly released reports may sign up at: www.kerncounty.com/grandjury • Present and past Kern County Grand Jury Final Reports and Responses can be accessed on the Kern County Grand Jury website: www.kerncounty.com/grandjury RESPONSE DEADLINES: • REQUIRED WITHIN 90 DAYS FROM: TEHACHAPI-CUMMINGS COUNTY WATER DISTRICT O • REQUESTED WITHIN 90 DAYS FROM: THE CITY OF TEHACHAPI O • REQUESTED WITHIN 90 DAYS FROM: GOLDEN HILLS COMMUNITY SERVICE DISTRICT O RESPONSES ARE REQUIRED PURSUANT TO PENAL CODE §§933(c) AND 933.05 WITHIN 90 DAYS TO: PRESIDING JUDGE • KERN COUNTY SUPERIOR COURT 1415 TRUXTUN AVENUE, SUITE 212 BAKERSFIELD, CA 93301 FOREPERSON • TRUXTUN AVENUE, SUITE 600 BAKERSFIELD, CA 93301 Reports issued by the Grand Jury do not identify individuals interviewed. Penal Code §929 requires that reports of the Grand Jury not contain the name of any person or facts leading to the identity of any person who provides information to the Grand Jury. GLOSSARY: Ad Hoc: Defined as temporary. An Ad Hoc committee is usually formed to do one task one time only. Brown Act: The Ralph M. Brown Act is a California law that guarantees the public’s right to attend and participate in meetings of local legislative bodies. Per California Government Code §54950 et seq., it is an act of the California State Legislation authored by Assembly member Ralph M. Brown and passed in 1952. Community Service District (CSD): A Community Service District is a form of independent local government used to provide services in unincorporated areas of a county. A CSD is authorized to provide a wide variety of services including water, garbage collection, waste-water management, security, fire protection, public recreation, street lighting, mosquito abatement, conversion of utilities to underground, library services, ambulance service, and graffiti abatement. Lead Auditor Partner: An audit partner is a full partner at an accounting firm with a financial stake in the company. Local Agency Formation Commission (LAFCo): LAFCo is in all 58 California Counties. LAFCo is responsible for reviewing and approving proposed jurisdictional boundary changes, including annexations and detachments of territory to and/or from cities and special districts, incorporation of new cities; formation of new special districts; and consolidations, mergers, and dissolution of existing entities. Additionally, they also promote orderly growth, discourage urban sprawl, preserve agriculture and open spaces, encourage efficient, sustainable public services, and consider regional housing needs, adequate water and other services. Memorandum of Understanding (MOU): A Memorandum of Understanding is a type of agreement between two or more parties. It expresses a convergence of will between the parties, indicating an intended common line of action in good faith. Ordinance: An ordinance is a law or decree by a municipality, i.e., a local law. Standing Committee: A committee formed to do a job and meet regularly, like financials, logistics, operations, maintenance, creating rules, laws, policies, ordinances, ethics, human resources, etc. State Water Project (SWP): The State Water Project is the nation’s largest state-built water and power development conveyance system. The primary purpose of the SWP is to provide a water supply and delivery system to State Water Project Contractors that in turn distribute water across California. Tertiary Quality Water: Reclaimed water undergoes tertiary treatment, which involves a variety of processes to purify the water. After tertiary water treatment, the water can be pure enough to drink; it is potable quality water. Note: Prior to tertiary water treatment, wastewater typically goes through primary then secondary treatment processes: • In primary treatment, all that is done is to put the water in large tanks or ponds to let the solid material, called sludge, either float to the surface or settle to the bottom. The water is then usually chlorinated, and the sludge is treated and disposed of in various ways. • Most wastewater undergoes secondary treatment as well as primary treatment. The most common method is to sprinkle or trickle the water over a bed of sand or gravel. As the water filters downward, it is put into contact with oxygen and microorganisms, which work together to break down the organic matter in the water. The water is then usually chlorinated before it is released into the environment. Watermaster: The Watermaster Program ensures that water is allocated according to established water rights as determined by court adjudication or agreement by an unbiased, qualified person, thereby reducing water rights court litigation, civil lawsuits, and law enforcement workloads. GOLDEN HILLS 0T E H.A C HA P I COMMUNITY SERVICES DISTRICT J uly 27, 2023 Sent Via U.S . Mail and E- mail Presid ing Judge Kem County Superior Court 141 5 Truxtun Aven ue, Suite 212 Bakersfield , CA 93301 5 Truxtun Aven ue, Suite 600 Bakersfield , CA 93301 Re: Response to Tehachapi-Cumm ings CWD Grand Jury Report On June I , 2023, the Kem County Grand Jury published a report (Report) regarding the Tehachapi -Cumm ings County Water District (TCCWD). The Report req uested responses from the city of Tehachapi (City) and Golden Hills Com munity Services District (Golden Hills). Th is is the joint response of the City and Golden H i lls. General Comments The City and Golden Hills each provide water service for mun icipal and industrial (M&I) purposes to residents and property owners with in their respecti ve boundaries. Some of that water is ground water. The balance is imported State Water Project (SWP) water suppl ied by TCCW D. The City and Golden H ills each hold a substantially similar M&I contract with TCCWD for SWP water. Because the volume of groundwater the City and Golden Hills may extract each year is lim ited under the Judgment governing the adjudicated Tehachapi Basin . the City and Golden Hi lls m ust increasingly tum to imported SWP water to serve the demands of their residents and property owners. SWP water is a finite supply with h ighly variable availabi l ity. For exam ple, in 2022 the SW P made available only 5 percent of contracted amounts due to the then ongoing extreme drought. However, just one year later in 2023, the SWP is mak ing avai l able 100 percent of contracted amou nts due to the extreme wet hydrology . Th is means, of course, in some years there Response to TCCWO Grand J ury Report J uly 27, 2023 should be enough SWP water for TCCWD to satisfy all of the demands of its customers and, i n other years, TCCWD m ust allocate the available SWP water supply among those customers. TCCW D's partici pation in the SWP is funded partl y by an ad valorem tax and partly by sales of the available SWP water . TCCW D's ad valorem tax reven ue in 2021 was $8.9 m i llion. Of that amount, City property owners paid 16 percent and Golden Hills property owners paid 1 5 percent. Agricultural property owners paid I percent. But the allocation of available SWP water by TCCWD does not track with that funding. TCCWD' draft 2020 Regional Urban Water Management Plan projects an allocation of SWP water of on ly 4 percent each to the City and Golden Hills, which is less than our req uests. And projects an allocation of 66 percent to agricultural water users. TCCW D's allocation of the available im ported SWP water is skewed significantly toward agricultural uses and away from M&I uses. There should be no m isunderstand ing: TCCWD is an agricultural water district supported i n large part by M&l taxpayers. M&I water in the Tehachapi Basin supports not on l y state policy promoting additional housing but also the economic base of the entire Tehachapi region. With the available groundwater rightly l im ited by the J udgment and the need to plan for their futures, the City and Golden Hills began looking more closely at the practices of TCCWD in its allocation of available SWP water. What we found was a disturbing process lacking transparency and geared toward ensuring that one sector (and within that sector, one private farm ing enterprise) will recei ve the l ion 's share of avai lable SWP water at the expense, in part, of City and Golden Hills residents and property owners. The City and Golden Hills began question ing TCCWD regard ing its practices over two years ago. Since that time, we have been ignored, publicly rebuked and rid iculed. and even sued (in the case of the City) by TCCW D's Board of Directors. But we have been tasked by our constituents to protect their interests and futures, and that is what we will do. With that background in mi nd we wil l now respond to the facts. find ings, and recommendations of the Report. Discussion of Facts D. "Due to the length of the drought, SWP had previousl y reduced their yearly water allocations for 2021 and 2022 to 5% of their contracted amount. At the time of this report, and because of the recent tremendous increase in rainfall, SWP has raised their water allotment to I 00% (as of Apri l 2023) for all the Cal i forn ia Water Districts. Due to the length of the drought, TCCW D had to red uce agricul ture water allotment by approximately 40% from previous years. This reduction does not apply to m u n icipal and ind ustrial customers." Response to TCCWD Grand J ury Report J ul y 27, 2023 Response: During the drought, TCCWD did not prov ide the City and Golden Hi lls with all of the SWP water we req uested. I n fact, the City and Golden Hills received very little of our req uested SWP water. Therefore, it is not accurate to state that "Thi reduction does not apply to m u nici pal and ind ustrial customers:· M&l customers saw m uch of our requests go unfu l filled so that TCCW D could provide thousands of acre-feet of SWP water to agricu lture-and one private farm ing enterprise in particular. TCCW D used its water priority Ordinance to promote agricu ltural land uses over current year M&I demands. J . "Interviews with TCCWD Board mem bers revealed they are consideri ng a five-year plan for water allotment management, rather than a yearl y review." Response: This has not been pu bl icly stated at any TCCWD Board of Directors meeti ng. Whi le the City and Golden Hil ls have repeated ly asked the TCCWD Board to adopt a longer-term strategy for its SWP water supply, a majority of the Board of Directors has consistently held firm to the annual approach of allocating TCCWD's SWP water. I f the TCCW D Board is, in fact, considering a "five-year plan,., then those considerations m ust be occurring improperl y in closed session because no such representation has been made in open session with an ability for publ ic input. These Board members m ight be referring to the 2020 Regional Urban Water Management Plan (RUWMP) and con fusing that document with the water priority Ord inance. But the 2020 R U WMP is three years del inquent which has adversely impacted the abil ity of M&l customers to plan -a result some mem bers of the TCCWD Board no doubt encourage as part of their effort to sti fle development of needed housing. K. "In order to manage water distri but ion in these insecure drought times, TCC WD issues Ordinances entitled: "Establishi ng District Water Sale Priorities i n the Event of a Shortage." The Ordinance is written by an Ad Hoc comm ittee, consisting of board mem bers and staff, when drought conditions are anticipated. The Water Ordinance Ad Hoc Comm ittee explains how they plan to meet any en visioned emergency/drought caused by a red uction in the SWP water allotment. However, they do not incl ude in thei r planni ng or meeti ngs the water recipients invol ved/affected. They create each Ordinance without comments from reci pients, although this year. due to pu blic pressure, they had several round table discussions prior to vot ing on this year's Ord inance." Response: Before conducting a roundtable discussion regard ing this year's Ordinance, the President of the TCCWD Board of Directors i n itially attem pted to dispense with even TCCwo·s customary practice of conducting a noticed hearing for the Ord inance and, instead , pushed the Board to adopt the Ordinance without conducting a hearing (and the customary published notice). Representati ves of the City and Golden H i l ls voci ferously Response to TCCWD Grand J ury Report J ul y 27, 2023 objected and the Board rightly voted against the President 's intended approach . Only after that occurred did TCCWD hold a roundtable discussion with stakeholders. L. "TCCW D and the City of Tehachapi entered into a Memorandu m of Understandi ng (MOU) to recharge the City's wastewater. The City would l ike to upgrade its treatment process to add tertiary filtration and disin fection to their own wastewater , then pipe it into the flood control basin called Blackburn Dam , owned by TCCW D. Signed by both parties in May 2020, the MOU agreement allowed the City to claim 94% of the recharged water delivered to the basin (6% reduction is due to evapotranspiration loss factor), but later TCCWD attem pted to unilaterally alter the MOU terms by lowering the amount to half of the recharged/reclaimed water. TCCWD publ icly stated that they were collaborati ng with the City, but the City does not agree with this assessment." Response: The City does not bel ieve TCCWD is collaborating with the City to achieve a solution for TCCWD's concern-which was raised for the first time before the figurative ink was dry on the MOU. Section 3.02 of the MO , in relevant part, provides : "3.02. Recharge Credits. The initial recharge rate is set at 0.94 A F for each 1 .00 A F of Recharge Water del ivered by City to the Point of Delivery based on an estimated six percent (6%) evapotranspi ration loss factor. The recharge rate may be adjusted up or down during the Term, based on sound scientific evidence to ensure that City receives a credit for the actual amount of water augmenting the Basin groundwater. less the Leave-Behind . If, after considering that scientific evidence, District and City cannot agree on the appropriate adjusted loss factor, the Parties shall attempt to resol ve the d ispute pu rsuant to Section 9.01 of this MOU . . " The purpose of any adjustment , up or down, to the recharge rate is to reflect. based on sound scienti fie evidence, any different physical percolation of recharged effiuent than that agreed to i n the MOU. The City only wants to receive cred it for "the actual amount of water augmenting the Basin." TCCWD has instead attem pted to use th is provision to uni l aterally adjust the recharge rate based on its legal conclusion (arrived at after signing the MOU) that the treated effluent, once returned to the aquifer even for storage, does not belong to the City. A drastic change like the one bei ng pursued by TCCWD should have been addressed in the MOU because it likely may lead to the end of the entire project. The City, together with Golden Hi lls, bel ieves th is project is a benefit to the entire Tehachapi Basin. Our hope is that TCCW D wi ll reengage with the City with the same attention and effort TCCW D has shown in defense of its skewed allocation of the available SWP water supply for one pri vate farming enterprise-which is owned by an out-of-state Response to TCCWD Grand J ury Report J ul y 27, 2023 investment finn. The City·s project could be a win-win for all local water users. U nfortunatel y, TCCWD's Board of Directors has instead chosen to thwart this renewable supply of potable water as part of its ongoing effort to improperly engage in land use planning and sti fle development of needed housing . P. "Legal counsel for the State Water Resource Board recommended that the MOU parties fol low the guidel ines stated i n the MOU and proceed to arbitration .'· Response : We have one point of correction regarding th is factual statement. Section 9.01 of the MOU provides : ·'9.01. Dispute Resolution. In the event of a dispute regarding interpretation , implementation or en forcement of this MOU, the Parties shall first attempt to resolve the dispute before a mutually acceptable med iator or other independent third party intermediary , as appropriate, prior to commencement of any Superior Court act ion or proceed ing. The fees and expenses of the intermed iary shall be shared equally by the Parties." The MOU calls for mediation rather than arbitration . Otherwise , we have no disagreement with the reported statement by an attorney with the State Water Resources Control Board. Q. "TCCWD has a contract with the City to provide SWP surface water yearl y with a provi ion that enough imported water is available.'· Response: The City and Golden Hills each hold a substantial ly similar "Term M& I Agreement" with TCCWD. Those agreements contain man y provisions, some of which are disputed bet\veen the City and Golden Hi ll on the one hand , and TCCWD on the other hand . The obligation of TCCWD to provide imported SWP water under its Term M&I Agreements is certai nly subject to the availabi l ity of SWP water from the Department of Water Resources . The City and Golden Hi lls disagree that, when SWP water is available to TCCWD, it then has un fettered discretion regard ing allocation of that avai lable SWP water among its customers.

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By November 1, 2023, the TCCWD Board should adhere to rules and policies entered into by signed MOUs. (Finding 7)