Operating and CIP Budget Fiscal Year 2015-16

Purpose of Report

The City of Morgan Hill, along with the State of California, is entering the fourth year of drought conditions. 2014 has been recorded as the warmest and driest year on record for California. The City Council, at its goal-setting retreat in January 2015, adopted a drought response position that included the following goal and strategy: Goal The Morgan Hill Community will continue to be leaders in the state responding to the drought conditions and will support water rate increases to ensure system reliability. Strategy By March 2015, the Council will receive a comprehensive report that identifies short and long term strategies to address the environmental and financial impacts of drought conditions which may include new rate structure, Proposition 218 water rate election, public investment in recycled water, and other measures as necessary.

The purpose of the report will describe:

Current Conditions

Water Sources Water System

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California Snow Pack at 19%

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 Level of Service and Maintenance Standards  Rate Structure  Consumption  Water Conservation  Recycled Water  Drought Response Activities  Expanding, Preserving, and Conserving for Future Water Supplies  Report Conclusions and Next Steps

Imported Water Supplies Severely Constrained

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Groundwater Levels Falling Throughout California

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Introduction

Water District Unable to Fully Recharge Morgan Hill Aquifer

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While there is no question that California is currently experiencing a drought that is causing significant challenges, there is also considerable concern that California's water system is built on unsustainable

parameters. Historical records indicate that the State experienced a relatively wet period throughout the 20th Century and built a water system based on rainfall amounts that are not likely to be consistently experienced in the future. As the State's economy and population continue to grow, the unsustainability of California's water system will be exposed with increasing frequency. This new reality will ultimately increase the cost of producing water. Morgan Hill's water system is no exception. While the Santa Clara Valley Water District (District) actively recharges Morgan Hill's aquifers with imported water, their ability to do so is limited by the amount of imported water made available to the District.

In addition, the water infrastructure serving our State and the community of Morgan Hill

City of Morgan Hill Comprehensive Water Report

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