Cachuma Division 1 Project Contract and Management*

R1

That the Directors of the Member Units and the Santa Barbara County Board of Supervisors, acting as Directors of the SBCWA, pursue the upcoming 2020 contract negotiations as an opportunity to create a completely new contract. ID No.1 Response to Recommendation 1: This recommendation is unlikely to be implementable. The United States Bureau of Reclamation specifies the type of standardized contract then determines the terms and conditions-based contract language established by Federal law and Department of Interior policy. This language is then utilized as its' Basis of Negotiation (BON). There is an opportunity for the contracting parties to negotiate limited and certain terms and conditions within the USBR structured contracts. However, the Member Units and SBCWA P.O. BOX 157 • 3622 SAGUNTO STREET, SANTA YNEZ, CA 93460 (805) 688-6015 • FAX: (805) 688-3078 • WWW.SYRWD.ORG September 25, 2019 lack the authority to change the type of contract or create a completely new contract. That is dictated by Federal law and policy.

R2

That the Directors of the Member Units and the Santa Barbara County Board of Supervisors, acting as Directors of the SBCWA, require that key terms in the new Contract are defined clearly and used in a consistent manner. ID No.1 Response to Recommendation 2: Respectfully, this recommendation cannot be implemented. Neither the Member Units nor SBCWA have the authority to "require" the key terms of a renewal or new contract, as determined by USBR, be defined in any manner. As in past Cachuma Project contracts as well as USBR contracts executed west wide, the key terms, conditions, standardized articles, and contract document language are pre-determined and established by Federal law and USBR policy. However, certain language in the non-public Basis of Negotiation (BON) that is not pre-decisional may be subject to limited opportunity of negotiation by the contracting parties.

R3

That the Directors of the Member Units and the Santa Barbara County Board of Supervisors, acting as Directors of the SBCWA, ensure their roles and responsibilities are clearly defined in the new Contract. September 25, 2019 ID No.1 Response to Recommendation 3: This recommendation will be implemented. As indicated in the response to Finding 3, this recommendation is unnecessary because the roles, responsibilities, obligations and authority associated with the Cachuma Project contracts are clearly defined and it is the expectation similar standardized language will be applicable in the Master Contract. Moreover, renewal or new contract language will be defined by USBR pursuant to Federal law and Reclamation Policy.

R4

That the Directors of the Member Units and the Santa Barbara County Board of Supervisors, acting as Directors of the SBCWA, strongly urge in negotiations for the new Cachuma Project Contract that the Water Year should run from May 1 to April 30, or similar period, to allow diversion requests to be made soon after the usual winter rain period. ID No.1 Response to Recommendation 4: The recommendation to strongly urge a change to the Contract Year will be implemented. Prior to the Renewal Master Contract in 1995, the original Master Contract Water Year was May 15 to May 14 reflecting the hydrologic year for the Santa Ynez River Basin. USBR changed the Water Year to a Federal Fiscal Year which made the predictability of the water supplies uncertain because there was no correlation with rainfall, runoff and storage at the end of the rain season. USBR has considered this change for the 2020 contract.

R5

That the Directors of the Member Units and the Santa Barbara County Board of Supervisors, acting as Directors of the SBCWA, propose to the Bureau of Reclamation that the new Cachuma Project Contract require a meeting between them and the Bureau every five years. with a public agenda, to consider changes to Contract provisions which have become outdated. September 25, 2019 ID No.1 Response to Recommendation 5: This recommendation will not be implemented. ID No.1 cannot support re-opening a Master Contract on a five-year basis nor does the SBCWA or the Member Units have an ability to demand USBR provide non-standardized terms. Furthermore, it is unlikely that USBR would re-open and re-negotiate a long-term contract given the cost and Federal contract processing requirements. However, USBR must operate and maintain the Cachuma Project subject to the continuing jurisdiction and pursuant to Water Right Orders issued by the State Water Resources Control Board and Biological Opinion conditions of the National Marine Fisheries Service.

R6

That the Directors of the Member Units and the Santa Barbara County Board of Supervisors, acting as Directors of the SBCWA, propose to the Bureau of Reclamation that the required five- year meetings allow changes to the operations of the new Contract, including increased diversions, provided they are consistent with Federal law, State law, and Project Water Rights, and do not negatively affect the environment or the groundwater quality downstream of Bradbury Dam. ID No.1 Response to Recommendation 6: This recommendation will not be implemented such that SBCWA and the Member Units do not have the authority to demand changes inconsistent with Federal and State law and water rights orders under the continuing jurisdiction of the State Water Resources Control Board. -

R7

That the Directors of the Member Units and the Santa Barbara County Board of Supervisors, acting as Directors of the SBCWA, establish a format for quantitative decision-making under uncertainty; and seek to narrow their differences on such components as probabilities of future rainfall patterns and criteria for desirable outcomes. September 25, 2019 ID No.1 Response to Recommendation 7: This recommendation will not be implemented because a management level meeting format already exists among the Member Units as well as between the Member Units and SBCWA. Although the SBCWA does not participate in many meeting opportunities between the Member Units, the Member Units consistently confer on many topics including drought, water supply modeling, environmental, water efficiency and water management. These forums create solution and compromise-based opportunities and collaboration as well as respectful understanding of differences and positions.

R8

That each year the Directors of the Member Units and the Santa Barbara County Board of Supervisors, acting as Directors of the SBCWA, determine a schedule of multiple meetings of key technical staffs to discuss Cachuma Project operations, including upcoming diversions, and to report major points of potential agreement or disagreement to their Boards. ID No.1 Response to Recommendation 8: This recommendation will not be implemented because management level meetings between SBCWA and Member Units are scheduled on a monthly and as-needed basis. The elected Board officials should not be scheduling technical staff level discussions or managing technical staff. This undermines the underlying premise of delegation of responsibility by the agency management to staff.

R9

That the Directors of the Member Units and the Santa Barbara County Board of Supervisors, acting as Directors of the SBCWA, set up and maintain a specific website for detailed information on the Cachuma Project's history, structure, governance, and operations, with links to additional historical documents and records. ID No.1 Response to Recommendation 9: The recommendation has already been implemented with links to a variety of sources and websites. ID No.1 does not use its website as a depository of all documents and records, but additional information is available upon request. September 25, 2019 The ID No.1 Board of Trustees and Management again sincerely thank those individuals serving on the Grand Jury for volunteering their time, trying to gain an understanding of the very complicated and complex issue of the Cachuma Project, and preparing this report in a short amount of time. By incorporating the submitted comments, this report will then accurately reflect these complex water matters and provide the community an informative document. Thank you for the opportunity to respond to the Grand Jury Report. Please let us know if there is anything further that you require. Sincerely, 2000 Chris Dahlstrom General Manager <b>Board of Trustees</b> CC: