The proposed project would extend the term of each of the Water Supply Contracts to December 31, 2085 and amend and add financial provisions to the Contracts based on the negotiated Agreement in Principle (AIP) between DWR and the Contractors. The proposed project would not create new water management measures, alter the existing authority to build new or modify existing facilities, or change water allocation provisions of the Contracts. The changes to the SWP contracts by the proposed project are composed of the following five project elements.
1. Extended Contract Term. Revise Article 2 to extend the term of the 29 Contracts to December 31, 2085 (subject to the provisions of Article 4).
2. Increased Operating Reserves. Provide for increased SWP financial operating reserves.
3. New Billing Provisions. Implement a comprehensive pay-as-you-go repayment methodology with a corresponding billing system that more closely matches the timing of future SWP revenues to future expenditures. The pay-as-you-go repayment methodology generally means to recover capital, operating and maintenance costs within the year incurred and/or expended.
4. Enhanced Funding Mechanisms and New Accounts. Provide enhanced funding mechanisms and create additional accounts to address SWP financial needs and purposes.
5. Enhanced Coordination Regarding SWP Finances. Provide for a finance committee and provide other means to increase coordination between DWR and the Contractors regarding SWP financial matters.
An activity is a project subject to CEQA only if it has the potential to result in either a direct physical change to the environment or a reasonably foreseeable indirect change in the environment (15378). The extension has no potential to cause any direct or reasonably foreseeable indirect change in the environment. But even if the extension is deemed to be a project within CEQA's meaning, the extension is exempt under the categorical exemption for existing facilities (15301) and the catch-all common sense exemption (15061b3).
Substantial evidence in the record of proceedings supports the conclusion that the extension is not a project, and that even if it is a project, it is exempt.
Such evidence includes, but is not limited to, the following:
a) the extension will not create new water management measures; alter the existing authority to build new or modify existing facilities; or change water allocation provisions of the contracts;
b) the extension proposes financial changes that do not modify any existing physical conditions;
c) the extension does not change hydrology, regulations, or change the SWP water supply; and
d) although a benefit of the extension could be the ability to continue to finance repair and maintenance projects, such as future projects (if any) are too speculative to allow for meaningful analysis at this time and if and when any such project is actually proposed by one or more agencies in the future, they would be subject to CEQA review as required by law.