Cyclic Storage Agreement with Metropolitan Water District and Rancho California Water District Kelley Gage October 12, 2017

Background On April 11, 2017, MWD approved and authorized its GM to enter into Cyclic Storage Agreements with MWD member agencies Cyclic Agreements enhance MWD’s operational flexibility during wet and dry periods to store water Wet Years: Cyclic accounts allow MWD to store its water in member agency, or sub-agency, groundwater basins Dry years: Cyclic accounts would be operated as part of MWD’s storage reserves to help meet the water needs within its service area Water deliveries into the account are at MWD’s discretion Member agencies have the discretion to accept the water from MWD in any given year Stored water produced from the cyclic account is sold at MWD’s prevailing full service water rate in effect at the time when the water is produced: Not subject to Capacity Charge Is subject to Readiness-to-Serve Charge

Background Benefits of Cyclic Agreements: Improve reliability during dry years Available to assist in an emergency, other than drought Raises groundwater levels, reducing pumping costs to local producers

Cyclic Storage Agreement – MWD-EMWD-RCWD Terms: RCWD will store up to 10,000 acre-feet of MWD water in a cyclic storage account over a 10-year period EMWD will facilitate delivery of MWD water into a cyclic storage account as the MWD member agency Deliveries made through MWD EM-21 connection No cost to EMWD, pass-through cost RCWD agrees to include the projected cost of cyclic water deliveries in its annual budget Any inability of RCWD to extract delivered water does not affect RCWD’s obligation to pay EMWD for water deliveries When MWD determines water is available for delivery in any year, and EMWD and RCWD agree to accept the delivery, and a separate Purchase Agreement letter will be executed Defines the delivery amount, timing, and payment schedule

Purchase Agreement – MWD-EMWD-RCWD Terms (cont’d.) MWD agrees to deliver 3,000 acre-feet into cyclic storage account via RCWD’s storage rights in groundwater basin in 2017 Maximum delivery rate of 830 acre-feet per month All parties agree to a three-year payment schedule for MWD water deliveries in 2017 1,000 acre-feet to be billed once every year beginning July 31, 2018, and each subsequent July 31 thereafter MWD will bill EMWD, and EMWD will bill RCWD, for the cost of the water

Recommendation Approve and authorize execution by the General Manager, or his designee, a Cyclic Storage Agreement and a separate Purchase Agreement with Metropolitan Water District of Southern California and Rancho California Water District.

Contact Information Kelley Gage Senior Director of Water Resources Planning (951) 928-3777 Ext. 4561 Email: gagek@emwd.org