GWD*

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. This recommendation will not be implemented because it is impractical and unnecessary. The United States Bureau of Reclamation (USBR), the entity that built and owns the Cachuma Project pursuant to United States Congressional authorization, dictates the terms in its water supply agreements for various water supply projects throughout the West. The Cachuma Project Master Contract is fundamentally a water supply agreement, whereby USBR makes Cachuma Project water available to the Member Units. It is USBR's stated preference and practice to renew existing federal water supply contracts, rather than draft new contracts for the same project, and the Goleta Water District is unaware of any existing USBR water supply agreement that has been superseded and replaced by an entirely new contract. Member Units and the Santa Barbara County Water Agency (SBCWA) also do not possess the authority to dictate to USBR the format of a federal water supply contract, which is mostly standardized and guided by USBR directive and policy. Specifically, United States Congressional authorization to USBR to extend long-term water supply contracts and the express terms of the existing Master Contract are provided for in section 2(a):"[...]this contract and each renewal thereof shall be renewed pursuant to the Act of July 2, 1956 (70 Stat 483) and the Act of June 21, 1963 (77 Stat 68); provided, that the request for renewal is given no later than two (2) years prior to the date on which the then-existing contract expires." Finally, as discussed in response to Recommendations 4 and 5 below, the Goleta Water District believes that the current Master Contract serves its purpose well: to allow for long-term planning for the continued delivery to the Cachuma Member Units of Cachuma Project water consistent with federal Reclamation law and state water rights. Should water management problems from changed conditions arise in the future, they would be best addressed in individual agencies' water supply and demand planning documents such as the Urban Water Management Plans that all Member Units prepare under state law. The Urban Water Management Plans require that agencies analyze their supply and demand in five-year periods through at least 2035, looking to normal, wet, and dry hydrologic scenarios. The Urban Water Management Plans also include discussion of future water management challenges, projections, and require discussion of the potential impacts of climate change. The Goleta Water District utilizes the most conservative estimate of the impacts of climate change on its future water supply reliability analysis for State Water Project water in its Water Supply Management Plan and Urban Water Management Plan.

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. The recommendation will not be implemented. Key terms will be defined clearly and used in a consistent manner, but within the constraints of the federal contract negotiation process. Most, if not all, of the key terms in the definitions section of the Master Contract are standardized USBR terms that USBR utilizes to manage its water supply projects throughout California and beyond. USBR policy dictates the standard terms included in water supply contracts, most of which are included in the Reclamation Manual Directives and Standards, promulgated by the Reclamation Law Administration Division (See PEC 06-01). Under federal directive, water supply contracts and their terms are largely shaped by the Bases of Negotiation, or BON. A BON is a pre-decisional, deliberative document used to make and justify a recommendation to the USBR Commissioner that a proposed contract action be authorized. BONs, which are not available for public release, detail the material terms of the proposed contract, the negotiable terms, the parties' respective negotiating positions, and pertinent legal and practical boundaries (e.g., applicable legal and policy limits). Since most of the key terms and definitions are determined beforehand in the BON before negotiation of a contract, there is little to no opportunity for the Santa Barbara County Board of Supervisors or the Member Units to require how key terms are defined or used.

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. This recommendation will not be implemented. As discussed in finding 3, the roles and responsibilities associated with the Cachuma Project are clearly defined in the existing Master Contract and sub-contracts held between the Member Units and SBCWA. Furthermore, as a water supply agreement with the USBR, the Master Contract is an improper vehicle to define the roles and responsibilities of SBCWA and each of the separate governmental entities comprising the Member Units, many of which have different functions. Such roles and responsibilities are described in governmental agencies' respective founding legislations and codes, ordinances and regulations.

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 a similar period, to allow diversion requests to be made soon after the usual winter rain period. This recommendation has been implemented. In discussing contract renewal with USBR staff, the Member Units and SBCWA requested that USBR consider altering the Water Year to run from May 1 to April 30 to allow for more certainty regarding what available supply may be in Cachuma when making requests for allocations for the coming water year. USBR informed the Member Units and SBCWA that it would consider such request, and will present proposed options on the Water Year dates when presenting its BON and subsequent draft contract language for the Master Contract renewal.

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. This recommendation will not be implemented. As discussed in response to findings 1 and 2, the Santa Barbara County Board of Supervisors and the Member Units do not have the authority to dictate to the USBR non-standard schedules on contract renewal. Goleta Water District understands that it is USBR policy to avoid short-term contracts for water supply and interim contract renewals, and most contracts are renewed between 25-50 years. In so doing, Member Units are provided with more certainty in their water supply planning and are afforded the ability to plan for long-term capital investments and appropriate levels of demand management. The existing Master Contract provides necessary flexibility for USBR to respond to supply fluctuations between wet, normal and dry years, since USBR makes water allocations each year based upon its determination of how much supply is available within the defined contract project yield amount. For example, at the height of the drought in 2016, the Member Units received zero allocation as a response to dwindling water supplies and were subsequently faced with operational challenges. Consequently, the Member Units worked collaboratively with SBCWA and USBR to develop protocols that allowed for the importation and storage of State Water Project water in a manner that precluded unwarranted and punitive evaporative loss reductions. To the extent that operational modifications need to be made regarding how the Cachuma Project is physically managed in matters of evaporation, siltation, spill operations and critical drought operational modes, such decision-making can and already does occur in a collaborative manner outside of the purview of the Master Contract. During the drought, the Cachuma Member Units and SBCWA met frequently to address these types of issues. Indeed, the substantive terms have not changed since 1949, and the Cachuma Project has been successfully operated and the contract administered through three periods of significant drought as well as during multiple wet periods.

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. This recommendation will not be implemented. The Goleta Water District fully incorporates its

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. This recommendation will not be implemented because a format already exists for quantitative decision-making under conditions of uncertainty through Member Unit monthly meetings as well as meetings between the Member Units and SBCWA. As an example, during the height of the drought, the traditional formula used by USBR, Cachuma Operation & Maintenance Board (COMB), SBCWA and the Member Units to apply evaporative losses on the water stored in the Lake broke down when water levels dropped below elevation 660, and the previous formula began resulting in negative losses (an absurd result). Consequently, a disincentive was created for agencies to import State Water Project water into the Lake, since large evaporative losses would be disproportionately charged to such water. Recognizing that the Master Contract did not directly address this uncertainty, the Member Units and SBCWA proposed a revised methodology whereby evaporative losses would be proportionately allocated to unallocated water remaining in the Cachuma Project. USBR approved this proposal, known as "Scenario B- 3" in December of 2015, and it continued to be used until lake levels increased in 2017 and evaporative losses could be applied using the traditional formula. This compromise and creative solution was developed directly through SBCWA and Member Unit managers' monthly meetings and discussions, which is indicative of the successful existing format for quantitative decision-making.

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 staff to discuss Cachuma Project operations, including upcoming diversions, and to report major points of potential agreement or disagreement to their Boards. This recommendation will not be implemented because a schedule of meetings already exists. Member Unit managers and staff meet monthly and ongoing monthly invitations are extended to SBCWA to discuss operational matters, contractual matters and related contractual roles and responsibilities of all agencies.

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. This recommendation will not be implemented because the Goleta Water District has already updated its website to include detailed information on the Cachuma Project's history, structure, governance and operations, with links to a variety of websites that contain historical documents, rainfall and water storage records, exhibits and testimony related to the Cachuma Project, and other relevant materials.