Land Development: The Next Target in the Crosshairs of the Drought?

Since California Governor Jerry Brown issued an Executive Order mandating water reductions amid the state’s relentless drought, two things have interested me. First, the finger-pointing between water interests began almost immediately. Former Hewlett Packard CEO and Senate Candidate Carly Fiorina called the current situation “The Man-Made Water Shortage in California.” Other articles such as a piece in the LA Times argue that Governor Brown’s Executive Order went too easy on agricultural interests. (In my opinion, however, this argument does not hold water. Governor Brown ordered a 25% mandatory water reduction aimed mostly at municipal users. The order does not specifically order reductions in agricultural water use. In most cases however, the drought conditions are curtailing agricultural water use far beyond 25%. As I wrote in a post in March, the State Water Contractors are only getting 20% of State Water Project deliveries. The State Water Project Draft Reliability Report  assumes a long-term average delivery rate of 58%, so this year’s allocation is significantly lower than average.  For the second year in a row, the Central Valley Project will deliver no water to most agricultural users for a 100% reduction in supplies.)

The second response that I found interesting was the focus on land development as a culprit of the drought. A New York Times Piece published on April 4th really showed the sentiment that is stemming from the discussion surrounding land development and the drought. As you can see from the link, the article uses the Palm Springs area as the “poster child” for urban sprawl. The main picture shows the desert sands completely surrounding a subdivision and a single lot with a green lawn. Now that California is in the midst of a four-year drought, the pundits are questioning whether land development is sustainable considering the current water situation our state faces. In this piece I will explain how water and land development are so closely linked, and what development-related policy changes may get implemented as a result of the lingering drought conditions in the state.

Water: A Critical Component of Land Development

Water and land development must go hand in hand. It is a critical piece of infrastructure that needs to be reliable for the long-term sustainability of a community. But today more than ever, the sustainability of our water supplies related to development is facing more and more scrutiny. It is important to explain how local water agencies determine whether they will have enough water to provide service to new development within their jurisdiction. The mechanism that jurisdictions use to determine supply reliability is called an Urban Water Management Plan (UWMP).

Every urban water supplier that either provides more than 3,000 acre-feet of water annually or has more than 3,000 connections must create an Urban Water Management Plan. While parts of the UWMP can be very technical, the document is basically an accounting and demand projection exercise. The demand projections must look out at least 20 years into the future, and this plan provides a determination of how much development an area can accommodate in a sustainable manner. These plans must be updated every five years, and 2015 marks the year where every water district that meet these criteria will have to update its UWMP.

So how do the water districts update these plans? First, the district looks at the water supplies it has at its disposal. The water supplies can come from a variety of sources – surface water, groundwater, storage supplies, imported water, or any water source that the district can use for water supplies. Some of these water sources are more reliable than others, so the UWMP should take into consideration these factors. For example, many urban users rely on water supplies from the State Water Project. As we have discussed this year on Hydrowonk, the SWP supplies can vary significantly from year to year. If a water district uses SWP water as a supply source, the district will use information from the State Water Project Draft Reliability Report last published in 2013. At that time, the Department of Water Resources determined that the long-term average delivery rate for the SWP was 58%. Districts will use this long-term average to project how much water they will get from the SWP, and will project water supplies from any other source they have at their disposal.

Second, the water district must look at current and projected demand going out at least 20 years into the planning horizon. Current demands are relatively simple to calculate – the districts will look at delivery or pumping records for the major users in the bounds of the water district. They may also make estimates of water consumption if not all users have meters or a direct way to measure consumption. Then the district will determine future demand. This exercise is a bit more challenging because the district will have to make a series of assumptions on growth projections and the amount of water that new users will demand. Once the district creates this model, the report creates a projected supply and demand curve just like in Economics 101. The hope is that demand will not exceed supply before the 20 year projection period ends. However, the current drought conditions may test the assumptions that many water districts have made in relation to water supplies.

The assumptions embedded in the UWMPs have very real implications. The Urban Water Management Plan provides the foundation for cities to issue building permits. Without an adequate water supply, cities cannot issue building permits. Further, the drought conditions may change the water supply assumptions in these plans, and not for the better. For example, the long-term average in the SWP Reliability Report is 58%. The SWP delivered just 5% of supplies last year, and this year, DWR projects it will deliver 20% of supplies this year. As such, the long-term supply assumption likely will go down as a result of the continued drought conditions in this state.

Many areas of California will still face building pressures. When building activity occurs, the new citizens and businesses that move in require water. In the last market cycle, many areas of Southern California issued record numbers of building permits. For example, in fast-growing San Bernardino County alone, cities in the County issued 15,238 single family building permits at the peak of the market in 2005 according to the Construction Industry Research Board. Estimates vary, but planners assume that an average single family home uses between .6 and 1 acre-foot of water each year. Even at the lower end of that assumption, the houses built in that year alone will require 9,143 acre-feet of water each year. Considering the drought conditions, it is understandable that the construction industry is getting more attention in the water circles.

The bottom line is that the Urban Water Management Plans will likely face more scrutiny in this update cycle, and it is more important than ever that the supply and demand projections are as realistic as possible. Although construction is an important part of the state’s economy, it cannot occur without a safe and reliable water supply. Will the planning documents that we use provide an accurate assessment of how much development we can accommodate sustainably considering the dwindling water supplies we have in the state? Only time will tell.

This entry was posted in Supply Reliability and tagged , , on by .

About Jeff Simonetti

Jeff Simonetti is the Vice President of Public Affairs at the Capitol Core Group and provides project management, business development, and policy/lobbying expertise to a variety of federal, state and local clients. During his tenure at Capitol Core, Jeff has among other projects helped a renewable energy company to secure authorizing resolutions in cities across Southern California. Prior to joining Capitol Core Group, Jeff was a Vice President at the Kosmont Companies, a real estate and economic development consulting firm. At Kosmont, Jeff was the project lead for cities looking to implement financing strategies such as Enhanced Infrastructure Financing Districts (EIFDs) and other post-redevelopment funding mechanisms. He also was the project manager for the Economic Development element of the Fontana General Plan Update. Jeff gained significant state and local government affairs experience as the Government Affairs Director at the Building Industry Association (BIA) of Southern California’s Baldy View Chapter. During his tenure at the BIA, he helped to found the annual San Bernardino County Water Conference, an event that gathers over 400 elected officials and business leaders in the region to discuss the pressing water policy issues that affect the community.