Honorable Mayor and Members of the City Council through City Manager. Dan St. John, F. ASCE Director, Public Works and Utilities

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1 TIM, ED j85` u' DATE: July 16, 2018 TO: Honorable Mayor and Members of the City Council through City Manager FROM: Dan St. John, F. ASCE Director, Public Works and Utilities Leah Walker, P. E. Environmental Services Manager SUBJECT: Resolution Authorizing the City Manager to File an Application for Modification of the California Department of Water Resources Bulletin 118 Defined Petaluma Valley Groundwater Basin Boundary Based on Jurisdiction of the City of Petaluma RECOMMENDATION It is recommended that the City Council adopt the Resolution Authorizing the City Manager to File an Application for Modification of the California Department of Water Resources Bulletin 118 Defined Petaluma Valley Groundwater Basin Boundary Based on Jurisdiction of the City of Petaluma. BACKGROUND The proposed action addresses changes being implemented by the California Department of Water Resources ( DWR) this year relating to the Sustainable Groundwater Management Act SGMA) to change the priority of a number of groundwater basins ( GWBs) in the State, potentially requiring additional groundwater sustainability agencies ( GSAs) to be formed in Sonoma County. In May, DWR released a draft 2018 SGMA Basin Prioritization to Bulletin 118 that categorizes the State GWBs and proposed elevation of the Wilson Grove Highland Formation ( Wilson Grove) GWB, which includes a portion of the City' s northwest limits, from a low to a medium priority. Prior to releasing the 2018 Basin Prioritization document, in January 2018 DWR opened a six- month window for GWBs to modify boundaries. Originally, the deadline for basin boundary modifications was June 30, 2018 but was subsequently extended to July 31, Petaluma is already a participant in the Petaluma Valley GSA ( PV GSA). If adopted as anticipated, the elevation of the Wilson Grove GWB priority could trigger the requirement to form another GSA that includes a portion of the City. The map in Exhibit A to the Resolution shows these current GWB boundaries. Unless the subject PV GSA boundary modification is approved, the City may be required to become a participant in a second GSA with its related costs and staff resource demands, including Councilmember time spent serving on two different GSA governing boards. The purpose of the subject action is to seek public input and Council

2 approval to petition DWR on behalf of the City to grant a " jurisdictional" boundary modification of the PV GSA to take in a small portion of the Wilson Grove GWB that is currently within the City limits. This would allow the City to focus its resources on groundwater management of the entire City within a single GSA in the future. In September 2014 Governor Brown signed historic SGMA legislation requiring California' s critical groundwater resources to be sustainably managed by local agencies by giving local agencies authority to sustainably manage groundwater over the long-term. SGMA required the formation by June 30, 2017 of new GSAs for each medium and high-priority groundwater basin as designated in DWR' s Bulletin 118. In Sonoma County, only three of the county' s 14 GWBs, Santa Rosa Plain, Sonoma Valley and Petaluma Valley, were originally designated as medium priority and none as high or critical; and all three GSAs were formed by the June 30, 2017 deadline date. With the new Draft 2018 SGMA Basin Prioritizations, all three of the existing Sonoma County GSA' s GWBs were elevated from medium to high priority and Alexander Valley, Healdsburg, and Wilson Grove GWBs were reprioritized from very low to medium priority. While changing from medium to high priority carries no additional requirements for the GSAs, moving from low or very low priority to medium or high requires compliance with SGMA through either the formation of a GSA or submittal of an Alternative Plan within two years of the new prioritizations becoming final. The City Council held workshops on November 2, 2015 and November 14, 2016 to explore options for GSA formation and management and on May 1, 2017 approved the City' s joining in the formation of a Joint Exercise of Powers Agreement (JPA) for the PV GSA joining with Sonoma County, Sonoma County Water Agency ( SCWA), Sonoma Resource Conservation District ( SRCD), and the North Bay Water District ( NBWD) as managing agencies, with elected members serving on the GSA Board. The JPA held its first meeting and public workshop in June 2017, filed its Notice of Intent to form the PV GSA with DWR by June 30, 2017, and held its first official meeting as an authorized GSA in August The PV GSA Board considered the merits of requesting a GSA boundary modification to address the proposed elevation of priority of the Wilson Grove GWB at its recent June 21, 2018 meeting. The Board voted to support a request for a jurisdictional basin boundary modification to incorporate the portion of the Wilson Grove GWB within Petaluma City limits into the PV GWB. DISCUSSION Regulations promulgated by DWR in Section 340 and following of Title 23 of the California Code of Regulations prescribe the processes by which local agencies may request modification of GWB boundaries ( Boundary Modification Regulations) as described in DWR Bulletin 118. There are two parallel paths that can be taken to avoid the City having to serve in two GSAs. The first path is to provide documentation to DWR that could result in Wilson Grove GWB dropping back down to low priority and the second path is to modify the boundaries of the existing PV GSA basin to include the western portion of the City that is currently mapped within the Wilson Grove GWB. PV GSA staff is taking the lead in pursuing the first path and the City would need to take the lead in the second path based on its jurisdiction within the City limits. Both approaches are described below. 2

3 Draft 2018 Basin Prioritization: DWR' s basin prioritization involves classifying basins and sub - basins based on a variety of factors identified in the law, including: ( 1) growth; ( 3) number of public water - supply population; ( 2) projected wells; ( 4) total number of water wells; ( 5) amount of irrigated acreage; ( 6) reliance on groundwater; ( 7) documented impacts; and ( 8) other relevant information, including adverse impacts on local habitat and local stream -flows. Staff from PV GSA and DWR have met to discuss data and submittal comments addressing these factors. At this point, it is unclear as to whether the comments will result in the Wilson Grove GWB dropping back to low priority. Basin Boundary Modification: The 2018 draft prioritization of the Wilson Grove GWB triggered the need for Petaluma to consider requesting a jurisdictional modification of the PV GSA boundaries to include the western portion of the City. The City of Sebastopol is also affected by the DWR action. SGMA authorized local agencies to ask DWR to revise the boundaries of existing groundwater basins and directed DWR to adopt regulations governing modifications. Under the Boundary Modification Regulations, there are two types of boundary modifications, jurisdictional and scientific. A scientific modification considers geologic or hydrologic conditions that define a groundwater basin. A jurisdictional modification involves the revision of a basin boundary that is not scientific but promotes sustainable groundwater management, such as by aligning boundaries with city, county or district boundaries. Unfortunately, the DWR did not provide much time after releasing the draft 2018 Basin Prioritization for GSAs and other affected jurisdictions to engage in a deliberative process and to prepare adequate documentation to request boundary modifications. While DWR has extended the deadline for basin modification from June 30th to July 31St, this extension provides a very small window of time for staff to prepare documentation for a jurisdictional modification. There is insufficient time prior to the July 31 deadline to submit a scientific modification request because such a request must include a hydrogeological justification. The jurisdictional boundary modification involves the least amount of technical justification based on DWR guidelines, and begins with a public meeting and resolution from the affected member agency, in this case the City. Other PV GSA members and potentially affected agencies are being asked to offer letters of support. Based on the nearly completed USGS Groundwater Study which has defined the technical study area for Petaluma Valley differently than DWR' s Bulletin 118, and includes those portions of the Wilson Grove GWB within the City, a minor adjustment of the PV GSA boundary within the City Limits is not expected to provoke significant technical opposition by DWR. As of this writing, there is no known opposition to the proposal from affected agencies. Attachment 2 shows the minor aerial extent of the recommended modification while Attachment 3 shows all the GWB' s of Sonoma, albeit with their old priorities as a point of reference. Integrating the entire Petaluma jurisdiction within the existing PV GSA would avoid the potential for inconsistent or conflicting ground water management approaches that may result from dividing a single municipality with local regulatory authority over land and water use within its entire boundaries into separate groundwater basins and GSAs. Staff is aware of no hydrologic or sustainable groundwater management reason why the portion of Petaluma within the proposed Wilson Grove GWB should be located in a separate GWB and GSA from the rest of the City. 3

4 It is recommended that the Council adopt the proposed resolution and direct staff to work with PV GSA staff to prepare the DWR application for the subject modification. If the Council adopts the proposed resolution staff will notify DWR of the City' s and PV GSA' s intention to submit the boundary modification request within 15 days of the Council' s action in accordance with Section of the Boundary Modification Regulations. The City will solicit letters of support for the boundary modification from the other agencies including PV GSA members. In anticipation of the public meeting to discuss the subject, the City published a notice of the public meeting in the Petalzinw Argus on July 12, 2018 to invite public comment on the matter. FINANCIAL IMPACTS No significant financial impacts are expected as a result of the proposed action other than staff time necessary to compile the PV GSA Boundary Modification application. The cost saving to the City by avoiding inclusion into a second GSA has not been estimated, but as a point of reference, the City has committed to contribute $ 286, 666 to the PV GSA during FY 17/ 18 and FY 18/ 19, although that amount is expected to be reduced to less than $ 30, 000 per year for the three succeeding fiscal years. ATTACHMENTS 1. Resolution 2. Exhibit A to Resolution: Map of PV GSA Proposed Jurisdictional Boundary Modification 3. Sonoma County Groundwater Basins and Sub -Basins ( prior to 2018 Draft SGMA Basin Prioritization) 4

5 RESOLUTION AUTHORIZING CITY MANAGER TO FILE APPLICATION FOR MODIFICATION OF THE CALIFORNIA DEPARTMENT OF WATER RESOURCES BULLETIN 118 DEFINED PETALUMA VALLEY GROUNDWATER BASIN BOUNDARY BASED ON JURISDICTION OF THE CITY OF PETALUMA WHEREAS, Governor Brown signed into law Senate Bills 1168 and 1319 and Assembly Bill 1739, collectively comprising the Sustainable Groundwater Management Act ( SGMA), which took effect on January 1, 2015; and WHEREAS, the SGMA requires all high and medium priority basins as designated by the California Department of Water Resources ( DWR) to undergo a process leading to sustainable management through formation and operation of Groundwater Sustainability Agencies ( GSRs); and WHEREAS, the City of Petaluma, on May 1, 2017 authorized the City to become party to a Joint Exercise of Powers Agreement forming the Petaluma Valley Groundwater Sustainability Agency ( PV GSA) joining with Sonoma County, Sonoma County Water Agency, Sonoma Resource Conservation District, and the North Bay Water District as managing agencies, and the GSA is in the process of preparing a Groundwater Sustainability Plan ( GSP) for the Petaluma Valley Groundwater Basin; and WHEREAS, Section of the California Water Code, part of SGMA, provides that local agencies may request that the DWR revise the boundaries of a groundwater basin, and requires that DWR adopt regulations specifying the criteria to be used to evaluate proposed groundwater basin boundary revisions; and WHEREAS, DWR has promulgated regulations in California Code of Regulations Title 23, Division 2., Chapter 1. 5, Subchapter 1, entitled Groundwater Basin Boundaries, Section 340 and following ( Boundary Modification Regulations) that specify the processes by which a local agency may request a modification of groundwater basin boundaries as described in DWR Bulletin 118; and WHEREAS, in accordance with Section of the Boundary Modification Regulations, a request for a boundary modification may be initiated by a local agency whose jurisdictional area lies within or borders an existing or proposed basin or sub basin for which boundary modification is sought; and WHEREAS, the City of Petaluma is a local agency whose jurisdictional area lies primarily within the Petaluma Valley Basin with a portion of its jurisdictional area within the Wilson Grove Formation Highlands Basin, and accordingly, the City of Petaluma is authorized to request a boundary modification in accordance with SGMA and Section of the Boundary Modification Regulations; and

6 WHEREAS, the City of Petaluma is a California municipal corporation and charter city, incorporated in 1858, with the power to regulate land and water use throughout the City' s corporate boundaries, including the entire area proposed for incorporation into the Petaluma Valley Groundwater Basin, pursuant to the City' s police powers under Article 11, Sections 5 and 7 of the California Constitution, the City Charter, the Petaluma Municipal Code, the Petaluma General Plan 2025 and Implementing Zoning Ordinance, Ordinance No N. C. S., and other applicable laws and regulations; and WHEREAS, pursuant to its constitutional and statutory powers, the City of Petaluma regulates land and water use throughout the entire City, including domestic and commercial water supply relying on wholesale water purchases from the Sonoma County Water Agency and production from the City' s own wells, and connections to and operation of the City water system, as well as operation of wells within the City; and WHEREAS, the Petaluma Valley Groundwater Basin, basin number 2-01 in DWR Bulletin No. 118, is currently designated by DWR as medium priority and is proposed to be redesignated as high priority; and WHEREAS, the Wilson Grove Formation Highlands Groundwater Basin, basin number 1-59 in DWR Bulletin No. 118, is currently designated by DWR as very low priority and is proposed to be re -designated as medium priority; and WHEREAS, modification of the Petaluma Valley Groundwater Basin boundary as described in the map attached to and made a part of this resolution as Exhibit A would incorporate the jurisdictional area of the City of Petaluma that is currently in the Wilson Grove Formation Highlands Groundwater Basin into the Petaluma Valley Groundwater Basin; and WHEREAS, modification of the Petaluma Valley Groundwater Basin boundary as described in Exhibit A would promote sustainable groundwater management within the Petaluma Valley Groundwater Basin and bordering Wilson Grove Formation Highlands Groundwater Basin in accordance with the purposes of SGMA by avoiding the potential for inconsistent or conflicting groundwater management approaches that may result from dividing a single municipality, with local regulatory authority over land and water use within its entire boundaries, into separate groundwater basins and GSAs; and WHEREAS, the nearly -completed USGS Groundwater Study concerning the PV GWB has defined the technical study area for the Petaluma Valley differently than DWR' s Bulletin 118, and includes in the study area the entire City, including those portions of the Wilson Grove GWB within the City; and WHEREAS, City staff are aware of no hydrologic or sustainable groundwater management reason why the portion of Petaluma within the proposed Wilson Grove GWB should be located in a separate basin and GSA from the rest of the City; and WHEREAS, Section of the Boundary Modification Regulations requires the requesting agency to satisfy requirements of the California Environmental Quality Act ( CEQA), lei

7 including, if necessary, information to enable the DWR to satisfy the requirements of a responsible agency; and WHEREAS, the proposed modification of the PV GWB boundary is not a Project as defined by CEQA in accordance with Section 15378( b)( 5) of the CEQA Guidelines because the proposed boundary modification consists of organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma as follows: 1. The above recitals are hereby declared to be true and correct and to be findings of the City Council. 2. The proposed modification of the Petaluma Valley Groundwater Basin boundary is not a CEQA project in accordance with Section 15378( b)( 5) of the CEQA Guidelines because the proposed boundary modification consists of organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment. 3. The City Manager is hereby authorized and directed to file as the City' s Request Manager as defined in Section 341( w) of the Boundary Modification Regulations application for a modification of the California Department of Water Resources Bulletin 118 defined Petaluma Valley Groundwater Basin boundary based on the jurisdiction of the City of Petaluma in accordance with all applicable requirements of the Boundary Modification Regulations and other applicable laws and regulations. an

8 Petaluma Valley GSA Boundary Proposed Jurisdictional Boundary Modification Attachment 2 Exhibit A to Resolution Petaluma Valley GSA Wilson Grove Formation Highlands Groundwater Basin City of Petaluma within Petaluma Valley GSA City of Petaluma to be transferred from Wilson Grove Basin to Petaluma Valley GSA City of Petaluma Outside of Existing Boundaries Petaluma River Watershed 7 City Limits Within Petaluma Valley GSA City Limits to be Transfered City Limits Outside Either Boundary Miles Sources: Esri, USGS, NOAA, Sources: Esri, Garmin, USGS, NPS

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