TO: LINDA REICH, CITY MANAGER
FROM: HYE JIN LEE, PE, DIRECTOR OF PUBLIC WORKS
SUBJECT
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Sale of Stored Groundwater Reserves to Niagara Bottling Company.
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RECOMMENDATION
Approve sale of 2,000 acre-feet from the City’s excess carryover stored groundwater reserves to Niagara Bottling Company; and authorize the City Manager or their designee to complete all documents to complete the transaction.
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FISCAL IMPACT
Increase the Water Fund (520) revenue by $1,550,400. Revenue is based on the sale of 2,000 acre-feet of excess carryover stored groundwater sold at a market rate unit price of $777.20 per acre-foot.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above further the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Superior Customer Service
• Financial Stability
• Responsible Long-Range Planning
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Revenue: 5207300 - 52020 |
Expenditure: |
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Transfer In: Click or tap here to enter text. |
Transfer Out: Click or tap here to enter text. |
BACKGROUND
In 1978, the Chino Basin judgment adjudicated the Chino Groundwater Basin, granting water retailers, including the City of Chino, annual groundwater production rights. The Judgment also allows water retailers to accumulate underutilized groundwater production rights in the form of stored groundwater reserves if they do not fully use their annual production allocation.
Further, the judgment authorizes the purchase and sale of groundwater production rights between retailers, subject to approval by the Chino Basin Watermaster, the administrative body with continuing jurisdiction over the basin.
Over the past 20 years, the City of Chino has sold approximately 93,900 acre-feet from its stored reserves while continuing to build and maintain reserves sufficient to meet anticipated future needs.
ISSUES/ANALYSIS
For Fiscal Year 2025-26, the City’s annual groundwater production right is 17,842 acre-feet. After meeting the City’s groundwater production needs, an unproduced balance of 11,468 acre-feet was added to the City’s excess carryover stored groundwater account.
As of today, the City’s total stored groundwater reserves total approximately 124,100 acre-feet. The City utilizes these excess carryover reserves for:
• Groundwater production to meet local demand (averaging approximately 5,000 acre-feet per year),
• Desalter replenishment obligations (averaging approximately 1,000 acre-feet per year), and
• Potential sales to other Chino Basin water retailers.
Earlier this year, Niagara Bottling Company expressed interest in purchasing a portion of the City’s stored reserves. After evaluating the City’s projected water needs, anticipated future groundwater entitlements, and ongoing obligations, staff determined that a sale of 2,000 acre-feet at this time would not adversely impact the City’s ability to meet its own demands. Furthermore, the Chino Basin Watermaster board has reviewed and approved the proposed transaction on September 25, 2025.
Attachment: Exhibit A - Water Transfer Forms