Title
Consider recommendation from the Permits/Enforcement Committee to approve amended leases of permitted Edwards groundwater rights with Thomas Persyn and Oblate School of Theology, a Texas Non-Profit Corporation for the Aquifer Storage and Recovery Project of the San Antonio Water System, in support of the Edwards Aquifer Habitat Conservation Plan, in the total amount of $220,043.57.
Body
RECOMMENDED MOTION:
Move the board adopt Resolution and Order No. 02-16-835 of the Edwards Aquifer Authority Board of Directors to approve amended leases of permitted Edwards groundwater rights from the permit holders as listed therein to the EAA for the Aquifer Storage and Recovery Project of the San Antonio Water System in support of the Edwards Aquifer Habitat Conservation Plan, and authorizing the General Manager to execute the amended leases.
SUMMARY:
The purpose of this agenda item is for the board to consider a Permits/Enforcement Committee recommendation to approve amended leases of permitted Edwards groundwater rights for the Aquifer Storage and Recovery (ASR) Project of the San Antonio Water System in support of the Edwards Aquifer Habitat Conservation Plan (EAHCP). The EAHCP includes several measures intended to minimize and mitigate the impact of the use of Edwards groundwater on federally-listed threatened and endangered species associated with the Edwards Aquifer. A significant component of the EAHCP as a conservation and springflow protection measure is the use of the SAWS ASR project as a long-term conservation measure to replace SAWS pumping from the Edwards Aquifer and maintain a minimum spring flow at Comal and San Marcos Springs. Through this effort, the EAA has been tasked with acquiring 50,000 acre-feet of permitted Edwards Aquifer groundwater rights through leases and lease options to be stored in the ASR project.
At the May 28, 2014 meeting, the EAHCP Stakeholder Committee formed an ASR Work Group to brainstorm ideas to achieve ASR goals and to make recommendations on methods to secure additional ASR leases to reach needed storage levels and implement the ASR as contemplated in the EAHCP. As reported to the committee at the February 24, 2015 meeting, the most effective way to increase participation in the ASR program was to increase the prices the EAA pays permit holders to lease their groundwater rights. As a result, lease terms and payments were restructured and presented to the board at the March 10, 2015 meeting. Under the new leasing program, EAA now offers 1-year (auto renewing), 5-year and 10-year leasing programs paying $120, $140, and $160 per acre-foot, respectively. Staff began entering into these new leases in April 2015.
Additionally, to maintain a positive relationship with existing ASR lease holders, EAA staff offered them the opportunity to amend their existing leases to take advantage of these new leasing rates. To this end, the EAA has secured amended leases of groundwater rights from the permit holders listed below. EAA staff completed its technical review of the transfer documents and confirmed the accuracy of these amended leases, as summarized below.
The following leases were originally a 7-year, and 10-year lease, and were paid at a rate of $120 and $135 per acre-foot, respectively. If approved, the permit holders would be allowed to take advantage of the new lease rate by entering into new 10-year leases at the effective lease rate of $160.00, with the lease terms beginning in 2015. The permit holders were paid in January 2015, and in January 2016 for the leases at the old rates, and the “2016 Additional Cost” shows the amount of payment due for 2015 and 2016 at the new lease rates. The “Remaining Lease Cost” shows the total payments through the remaining eight years of the new lease terms.
Permit: P103-619
Permit Holder: Hugo and Eva Sanchez
Transfer Amount: 99.630 acre-feet
Term: 10 year (began 2015)
2016 Additional Cost: $7,970.40
Remaining Lease Cost: $127,526.40
Permit: P100-173
Permit Holder: Oblate School of Theology, a Texas Non-Profit Corporation
Transfer Amount: 63.569 acre-feet
Term: 10 year (began 2015)
2016 Additional Cost: $3,178.45
Remaining Lease Cost: $81,368.32
Attached is the ASR template lease agreement and Resolution and Order No. 02-16-835 that were reviewed by legal counsel. The lease agreements listed above were signed and returned by the applicants, and if these leases are approved, the total amount of groundwater rights secured by the EAA in ASR leases remains unchanged, as these amounts were in existing leases effective in 2015 and 2016.
At the January 26 meeting, the Permits/Enforcement Committee voted to recommend the board adopt a resolution and order of the Edwards Aquifer Authority Board of Directors to approve amended leases of permitted Edwards groundwater rights from the permit holders as listed therein to the EAA for the Aquifer Storage and Recovery Project of the San Antonio Water System in support of the Edwards Aquifer Habitat Conservation Plan, and authorizing the General Manager to execute the amended leases.
M/WBE PARTICIPATION:
This agenda item does not involve the procurement of goods or services by the EAA and, therefore, this section is not applicable.
STRATEGIC PLAN REFERENCE:
This agenda item supports the EAA’s policy direction as set forth in the EAA 2016-20 Strategic Plan: Goal A, Sustain Federally Protected Aquifer-Dependent Species.
Acquisition of 50,000 acre-feet of water for the ASR program is required of the Edwards Aquifer Authority to maintain compliance with the Incidental Take Permit issued by USFWS on March 18, 2013. Specifically, this item is related to the obligations of Section 5.5.1 of the Edwards Aquifer Habitat Conservation Plan.
FISCAL IMPACT:
The lease holders of these amended leases were paid in January 2015 and January 2016 based on the old lease rate. The additional costs based on the new rate for these two years are in the amount of $11,148.85, and is available in the 2016 EAHCP budget. The total remaining cost of these leases over the total lease term is $208,894.72.