Laguna Beac H County Water Board of Directors: General Manager:*

R1

Each Orange County municipal planning agency, in cooperation with its respective water supply agency, should prepare for adoption by its city council, a dedicated Water Element to its General Plan in conjunction with a future update, not to exceed June 30, 2010. This document should include detailed implementation measures based on objective-based policies that match realistic projections of the County's future water supplies. These objectives, policies, and implementation measures should address imported supply constraints, including catastrophic outages and incorporate the realistic availability and timing of "new" water sources such as desalination, contaminated groundwater reclamation and surface recycling. District Response: As indicated above in F-1, there is very little additional growth planned in the District's service area. The City's General Plan reflects all of the mandated elements as required by the State. While the concept of a water element may be important to growing communities in Orange County, we do not believe it is essential or necessary in Laguna Beach given the close cooperation between the District and the City. The District prepares an Urban Water Management Plan every 5 years, which documents new water supplies being developed. The unknown factor is the imported water delivered by Metropolitan Water District, which can vary year-to-year. Our Agency, which is 100 percent dependent on imported water, is at the mercy of Metropolitan Water District for our water supply. Each Orange County retail and wholesale water agency should affirm its responsibility to develop

R2

new, innovative public outreach programs, beyond water conservation and rationing programs, to expose the larger issues surrounding water supply constraints facing Orange County. The objective should be to connect the public with the problem. The outreach effort should entail a water emergency exercise that stimulates a complete, sudden break in imported water deliveries. The exercise should be aimed directly at the public and enlist widespread public participation on a recurring basis beginning June 30, 2010. This recommendation may be satisfied by a multi- agency exercise but the inability to coordinate such an event should not preclude the individual agency's responsibility. District Response: This recommendation has already been implemented. The District has a public outreach program in place that provides sufficient opportunities for our customers to stay informed, including a web site and bi-monthly newsletters that inform our customers of statewide water issues. We utilize door hangers, reverse 911, public speakers, educational booths at local events and participate in community events. We are always looking at innovative types of communications to reach our customers. With regards to the water emergency exercise, the District was one of 20 agencies that participated in the statewide "Golden Guardian" exercise in 2008 that simulated a sudden break in imported water supplies. As a member of WEROC (Water Emergency Response Organization of Orange County) the District practices emergency procedures and communications systems in preparation of any disaster.

R3

Each MWDOC member agency should reaffirm to LAFCO that it will assign the resources necessary to expediently resolve regional governance issues. While the subject study is being facilitated by LAFCO, the options are with the agencies to decide what is best for all. Once conclusions are reached, the parties need to agree quickly and hopefully unanimously to adopt a course of action. District Response: The recommendation has been implemented. The District has participated in the LAFCO process to actively resolve regional governance issues. Our agency's first priority is act in the best interest of our ratepayers.

R4

Each Orange County retail and wholesale water agency should affirm its commitment to a fair- share financial responsibility in completing the emergency water supply network for the entire County. The entire County should be prepared together for any conditions of drought, natural or human-caused disaster, or any other catastrophic disruption. WEROC should commence meetings of all parties, to facilitate consensus on an equitable funding/financing agreement. District Response: The recommendation has been implemented. The Water Emergency Response Organization of Orange County (WEROC) has been established to conduct emergency planning and preparedness at the regional level and response to disaster type events that impact the water and wastewater agencies within the County. WEROC participates with regional and statewide forums as well. Our agency also has emergency plans and conducts tabletop activities to be prepared for emergencies. WEROC's focus is emergency planning to improve system reliability and meet demands when portions of the water system have outages. This is different from "supply" reliability, which entails "adequate supplies" being available to deliver through the system. Our agency works cooperatively with other Orange County agencies for delivery of emergency water in the event of disruption due to natural or human-caused disaster. We have a network of emergency interties that allow water to be sent back and forth during emergency situations. Our District produces an Urban Water Management Plan every five years that provides water supply analysis for normal, dry, and multiple dry years. The Plan includes drought response measures up to a 50 percent level of shortage. This Plan addresses many of the issues raised by the Grand Jury. The supply reliability issue for a long-term supply in Southern California is a problem that the Governor, the Legislature, the Department of Water Resources, and Federal Regulatory agencies need to work together to resolve. There has been an impasse among competing interests to solve the water supply problem. This inability to find compromise for a long-term resolution to fix the Bay Delta, and the pumping limitations imposed by court decisions relating to the Endangered Species Act, have let to a broken Bay-Delta. Without a Bay-Delta fix, water shortages will continue. This impasse among stakeholders has continued since the early 1980's, with no end in sight. Because our District is in Southern Orange County, we are one of five participating agencies involved in a potential ocean desalination project in Dana Point. Due to the regulatory and permitting process, it will more than likely take 8 to 10 years to get this desalination plant in operation. We need to find ways to shorten this regulatory process or water shortages will worsen. If you have questions or need further information on any of the District's responses, please do not hesitate to call me at 949-494-1041. Sincerely, Renae M. Hinchey General Manager . •