mprwa agenda packet 04-09-15

8/9/2019 MPRWA Agenda Packet 04-09-15

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AgendaMonterey Peninsula Regional Water Authority (MPRWA)

Regular Meeting

7:00 PM, Thursday, April 9, 2015

Council Chamber580 Pacific Street

Monterey, California

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

PUBLIC COMMENTSPUBLIC COMMENTS allows you, the public, to speak for a maximum of three minutes on anysubject which is within the jurisdiction of the MPRWA and which is not on the agenda. Any personor group desiring to bring an item to the attention of the Authority may do so by addressing theAuthority during Public Comments or by addressing a letter of explanation to: MPRWA, Attn:Monterey City Clerk, 580 Pacific St, Monterey, CA 93940. The appropriate staff person will contactthe sender concerning the details.

CONSENT AGENDA

1. Approve Minutes of March 12, 2015 Regular Meeting - Milton

2. Approval and File Authority Checks through April 6, 2015 - Milton

3. Receive Report on Monthly Reports to the Authority Board on the Activities of the Public Outreach Consultant and Discussions of Priorities - Beleny

4. Authorize the President/Executive Director to Send a Declaratory Letter to the Santa CruzCounty Superior Court in the Matter of the Marina Coast Water District (MCWD) Effort toObtain a Stop Work/Operation Order on the Test Slant Well - Cullem/Freeman

AGENDA ITEMS

5. Receive Report, Discuss, and Provide Direction with Respect to the Proposed Extension of the State Water Resources Control Board Cease and Desist Order WR 2009-0060 (CDO) Deadline of 31 December 2016 Submitted March 10, 2015 - Cullem

6. Receive Report, Discuss, and Take Action on the Draft Water Authority Budget for FY 2015-2016 - Cullem

7. Receive Report, Discuss, and Provide Staff Direction on the Status of the Test Slant Well

Operation and the Current "Summary" Monterey Peninsula Water Supply Project (MPWSP) Schedule, Approve a "Dashboard" with Five variables and Confirm Slant Well Feasibility Determination By the Authority Will Be Consistent With the Criteria Used By

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Thursday, April 9, 2015

2

State Regulators (CCC). - Crooks

8. Receive Report, Discuss, and Take Action on a Contract to Review the Monterey

Peninsula Water Supply Project Draft Environmental Impact Report. - Cullem

ADJOURNMENT

The City of Monterey is committed to including the disabled in all of its services, programs andactivities. In compliance with the Americans with Disabilities Act, if you need special assistanceto participate in this meeting, please contact the City Clerk’s Office at (831) 646-3935.Notification 30 hours prior to the meeting will enable the City to make reasonable arrangementsto ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II]. Later requests willbe accommodated to the extent feasible. For communication-related assistance, dial 711 to usethe California Relay Service (CRS) to speak to City offices. CRS offers free text-to-speech, speech-to-speech, and Spanish-language services 24 hours a day, 7 days a week. If you require a hearingamplification device to attend a meeting, dial 711 to use CRS to talk to the City Clerk's Office at(831) 646-3935 to coordinate use of a device.

Agenda related writings or documents provided to the MPRWA are available for publicinspection during the meeting or may be requested from the Monterey City Clerk’s Office at 580Pacific St, Room 6, Monterey, CA 93940. This agenda is posted in compliance with CaliforniaGovernment Code Section 54954.2(a) or Section 54956.

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MINUTES

MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)Regular Meeting

7:00 PM, Thursday, March 12, 2015COUNCIL CHAMBER580 PACIFIC STREET

MONTEREY, CALIFORNIA

Directors Present: Burnett, Edelen, Kampe, Pendergrass, Roberson, Rubio

Directors Absent: None

Staff Present: Executive Director, Legal Counsel, Clerk

ROLL CALL

Vice President Kampe called the meeting to order at 7:02 PM and announced that PresidentBurnett would be late and requested to postpone items 5 and 6 until he arrived. The Boardagreed.

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

Vice President Kampe invited reports from Directors and staff. Executive Director Cullemannounced that the TAC voted to invite a representative from the Marina Coast Water District toserve as a member of the TAC and that the invitation will be formally extended this week.

PUBLIC COMMENTS

Vice President Kampe invited comments from the public.

• George Riley expressed concern regarding threatened litigation to the desal project andany delay as a result could put the entire community at risk of lower water production.He questioned if contingency plans also stop if a lawsuit is filed.

• Michael Warburton, Public Trust Alliance spoke to the reasonableness standard and tothe reality and the restrictions it poses on you. He expressed concern that practicalpeople trying to get things done in a public and transparent manner will be challenging.

• Tom Rowley spoke to the lawsuit filed against the MPWMD regarding non-action takenin 2012 regarding rescinding the water supply charge. He expressed concern that theWater Management District has been spending money on projects without the public’sauthority.

• A verbal comment was read into the record from Bill Hood.

CONSENT AGENDA

Director Rubio requested to pull Item 5 and make it a business item. Vice President Kampeinvited comments on the consent agenda and had no requests to speak.

On a motion by Director Edelen, seconded by Director Rubio, and carried by the following vote,the Monterey Peninsula Regional Water Authority approved the Consent Agenda items 1through 4. Director Roberson Abstained from Items 1 and 2.


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MPRWA Minutes Thursday, March 12, 2015

Monterey Peninsula Regional Water Authority

Regular Meeting Minutes - Thursday, March 12, 20152

AYES: 4 DIRECTORS: Edelen, Kampe, Pendergrass, RubioNOES: 0 DIRECTORS: NoneABSENT: 1 DIRECTORS: BurnettABSTAIN: 1 DIRECTORS: Roberson, from Items 1 and 2RECUSED: 0 DIRECTORS: None

1. Approval of Minutes from February 12, 2015 Regular MeetingAction: Approved

2. Approve and File Checks from February 13, 2015 through March 11, 2015.Action: Approved

3. Receive Report On Monthly Reports To The Authority Board On Activities Of The PublicOutreach Consultant And Discussion Of Priorities.Action: Received

4. Receive Report and Staff Recommendation On An Earlier Start Time For Future MeetingsAction: Received

5. Authorize the Executive Director to Send a Letter to the Fort Ord Reuse Authority BoardRequesting Staff Coordination on Marina Coast water District's Proposed Regional UrbanWater Augmentation Project (Desal) and Cal Am's Monterey Peninsula Water Supply Project.Action: Moved to a Business Item

AGENDA ITEMS

6. Receive Report, Discuss, and Provide Direction with Respect to the Proposed Extension of theState Water Resources Control Board Cease and Desist Order WR 2009-0060 (CDO)Deadline of 31 December 2016

This item was taken up after Mr. Burnett arrived at the meeting.

President Burnett introduced the item explaining the purpose was to revisit the revised draftproposal to modify the Cease and Desist Order with the incorporation of public comment takenat the February 12, 2014 meeting. He reported that he briefed the State Water ResourcesControl Board (SWRCB) regarding the proposal and invited the full SWRCB to come to thepeninsula, after the results of the test well are received to be able to walk them throughprogress that is being made. He spoke to next steps to continue to refine the document throughthe public process then submit after the preliminary results of the test wells are received, inapproximately one month. He anticipates having an answer to the request between mid-summer or fall.

Legal Counsel Freeman spoke to Mr. Riley's public comment regarding the implications of alawsuit. He responded that paragraph 7 speaks to that concern that if everything is outside ofour control, the CDO could be suspended. He noted that this is a Draft Working Document butbecause of the transparency promise of the Authority, we are releasing.

Director Rubio clarified that this will be taken up by the TAC to which President Burnettconfirmed it would. Roberson requested clarification that this document does not give up theirright to litigate by taking action to which Legal Counsel Freeman confirmed that it would not.


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Director Rubio then requested clarity that Cal Am is the responsible party to CDO, but theproposal includes amended language citing Cal Am, The District and The Authority and howdoes that encumber this board for liability and possible action to which Legal Counsel Freemanresponded that there has been no decision made about who is going to file and that we may

just file letters of support, which would give us rights, but no obligations.President Burnett invited public comment on this item.

• Tom Rowley indicated that the Authority represents the real parties of interest, theresidents. He spoke in support of the transparency of the Authority and expressedconcern that the WMD meeting requested the discussion be conducted confidentially.

• John Narigi spoke to a distributed list of 18 concerns drafted against the first draft of thepetition. He reiterated concerns that GWR should not be part of the amended proposal,concerns about moratoriums on meters that will prohibit growth and that there is noconsideration of wet years or conservation efforts.

• Nelson Vega concurred with Mr. Narigi. He thanked President Burnett for his trips toSacramento. He expressed concern of planning a sunset of the Authority citing nocontinued the pressure to find new water supplies will result in a financial crisis. Heencouraged the Authority to say the course and hold the The District accountable.

• Michael Warburton spoke to the complexity of political optics on the Montereypeninsula.

• George Riley spoke to previous concerns regarding the extension request delays andrequested clarification as to what happens in the event litigation stops the project. Healso requested and updated cost estimate for the MPWSP project.

President Burnett responded to public comments made. Not looking for a decision but forgeneral direction.

Mr. Kampe questioned the legal exposure of the Authority, expressing concern regardingsetting too many or too stringent milestones and asked if the Authority could be culpable if notenough effort is put forth on behalf of the Authority. Mr. Kampe thanked the Business Coalitionfor a plain language concern list and questioned if the SWRCB could do more to help.President Burnett responded to Director Kampe’s comments indicating there needed to be abalance between what the Community needs and what the State is demanding. He spoke tothe question of if the State Board can do more to help citing examples when the Authority hasasked in the past, there has been responsive support.

Director Roberson requested that the Business Coalition's comments be vetted andincorporated as necessary and the Board discussed the comments mentioned.

7. Receive Report, Discuss, and Provide Staff Direction on the "Summary" Monterey PeninsulaWater Supply Project ScheduleAction: Report Received

Executive Director Cullem spoke to the item and referenced a report from Cal Am on the statusof the construction of the test slant well and on the summary MPWSP schedule. He provided anupdate on the status of the slant test well production including an update of the "SummaryPermits and Approvals" schedule. Vice President Kampe invited comments from the public andhad no requests to speak.

Vice President Kampe requested clarification regarding the pipelines, tanks and pump stationsand assured the Board that it is not on the critical path. Executive Director Cullem spoke toissues and potential set-backs with the pumping schedule and agreed to report back regardingany delay of data that may impact the release of the DEIR.


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8. Designation of Alternate To Serve As A Representative of The Authority On The GovernanceCommittee.

Executive Director Cullem spoke to the vacancy created when President Della Sala steppeddown from the Authority. President Burnett arrived at 7:29 PM

Director Rubio nominated Vice President Kampe to serve as the Authority’s AlternateRepresentative, seconded by Director Roberson. Vice President Kampe invited public commenton the item and had no requests to speak.

On a motion by Director Rubio, seconded by Director Roberson, and carried by the followingvote, the Monterey Peninsula Regional Water Authority approved the Designation of VicePresident Kampe as the Alternate Director to serve as a representative of the Authority on theGovernance Committee.

AYES: 6 DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Roberson,Rubio

NOES: 0 DIRECTORS: NoneABSENT: 0 DIRECTORS: NoneABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

9. Receive Report, Discuss, and Provide Direction on Water Authority Legal Expenses.

Action: Report Received This item was taken up after item 6.

Executive Director Cullem spoke to questions posed by Director Roberson regarding theSpecial Legal Counsel expenses incurred to date. He outlined the inclusion of a task list withinthe contract extension as a way to track tasks and costs and provide budget projections. He

spoke to the variable nature of the services provided by the Special Legal Counsel then Mr.Cullem answered questions of the Board.

President Burnett invited public comment on the item.

• Tom Rowley spoke in support of Authority efforts to contain legal expenses andexpressed appreciation of the progress that the Authority has made since inception.

• Nelson Vega indicated that a financial analysis of the impacts of water rationing wouldbe revealing to rate payers and that the legal expenses incurred are worth the costs.Michael Warburton spoke to the increase in legal expenses when you are trying not tobe transparent. The water belongs to the public and the CDO was to protect publicresources.

• George Riley encouraged the Authority going forward to use political leadership insteadof legal authority which is a less expensive role.

President Burnett responded to public comments and explained what Special Legal Counselservices are being incurred and why they were needed. He specifically informed the Board thatLegal Counsel McGlothlin is reaching out to all 16 settling parties so that the Authority does notduplicate efforts for payment of review of the DEIR once released.


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Director Roberson declined to lead the conversation. Director Edelen spoke in support of Mr.Riley's comments, but cited the Authority did encourage actions be taken to reduce legalexpenditures to which the Directors agreed that staff has been budgeting and reducingappropriately.

Director Kampe spoke to the fact that political charm is not the only arena in which we shouldbe working. He spoke to the necessary engagements with regulatory bodies and that theAuthority should economize the use of retained expertise, but not hesitate to use it to effectivelybe heard. Director Rubio agreed with Director Kampe and spoke in support of Mr. McLaughlin’sexpertise and efforts.

No action was taken and the report was deemed received.

10. Receive a Report on Expected Credits to City Contributions for FY 2014-2015 Subject toReceipt of Monterey County Fair Share and Initial Budget Estimate for FY 2015-2016.

Executive Director Cullem spoke to the item. He identified that the preliminary draft budget forFiscal Year 2015/16 is $390,000 and that he anticipates a year end credit to each contributingMember Agency from FY 14/15. He indicated that after discussion with the Board, it will besubmitted for approval at the next meeting.

Mr. Cullem then spoke to the Board ad hoc budget committee that met with Monterey CountyRepresentatives regarding fair share contributions. He spoke to the Member contributions paidfor the current fiscal year and the impacts associated if Monterey County does pay their fairshare contribution. He spoke to projections for each Member Agency for the FY 15-16. Mr.Cullem answered questions from the Board.

Director Roberson questioned the history of the funding from the County of Monterey to whichPresident Burnett and Executive Director Cullem responded providing a history of budgetaryrequests, payments and authorizations needed for current and prior fiscal year contributions.

President Burnett invited public comments on the item.

• Tom Rowley spoke in support of Monterey County participating as a member of theAuthority.

• Nelson Vega spoke to his discussions with Supervisor Potter who reported he does notbelieve that the Authority is making progress. He spoke to the conflict of interestpreventing Monterey County from participating as a member of the Authority and thattheir non-participation is a political issue.

• Michael Warburton spoke to the disconnect between the County of Monterey and theCities and that a discussion of reasonable alternatives would put some of this to rest.

•

George Riley spoke to the County of Monterey sitting as a member of the GovernanceCommittee and as such is represented on a key governing body and therefore shouldbe paying their share

Director Edelen encouraged powerful and passionate individuals to go to the Board ofSupervisors meeting when the item comes before the Board and speak in support of theAuthority.

Report was deemed received.


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11. Authorize the Executive Director to Send a Letter to the Fort Ord Reuse Authority BoardRequesting Staff Coordination on Marina Coast water District's Proposed Regional UrbanWater Augmentation Project (Desal) and Cal Am's Monterey Peninsula Water Supply Project.

Chair Burnett introduced the item requesting that the Board approve sending a letter to the FortOrd Reuse Authority regarding the Marina Coast Water District’s proposed Regional Urban

Water Augmentation Project. He spoke to MCWD’s current efforts that seem in opposition toregional efforts to solve the water problem and requested FORA to direct MCWD staff to workin coordination with the MPRWA as well as the MPWMD. He believes that MCWD is creatingconflict and hopes that if FORA can work with them to develop a project that is not in conflictwith other regional efforts.

Mayor Rubio expressed disagreement with the draft letter citing the RUWAP project was notaccurately described, outlined the past and current performance of MCWD and requested that ifa letter is sent to FORA it must be in the spirit of cooperation.

President Burnett invited public comment on the item

• Anthony Lombardo indicated that the FORA Board packet does not include informationon what that design of the project would be. He spoke to the evidence provided at theMarina City Council meeting and respectfully suggested requesting coordination butalso request that the design of MWCD’s facilty does not conflict with the underwayMPWSP. There are plenty of alternatives and the proposal at the city of marina was anattempt to interfere with the MPWSP..

• Tom Rolwey spoke to the proposed MCWD desal project and expressed confusion withthe conflicting statements made by MCWD staff members at other public meetings andto the contradictory efforts he witnessed. He spoke in support for the need forcoordination.

• Nelson Vega spoke in support of Director Rubio's collaboration comments and thatcitizen suffer when organizations cannot agree and waste unnecessary money.

• Michael Warburton spoke to the possibility of MCWD being and ally not an enemy.

The Directors discussed modifications to the draft letter provided at the meeting. Mayor Kamperequested vertical wells at the beach and at the Cemex property and urged that FORA removereferences to the locations as they seem to be inserted as potential conflict. He also requestedthat the MCWD and MPSWP be conducted in ways that do not interfere with the objectives ofthe other.

Executive Director Cullem read the proposed letter to be submitted to the FORA Board for theirmeeting on March 13, 2015.The Board agreed to the modifications as read into the record.

Director Rubio requested President Burnett to develop talking points regarding well placement

to which President Burnett agreed.

On a motion by Director Kampe, seconded by Director Edelen, and carried by the followingvote, the Monterey Peninsula Regional Water Authority Authorized the Executive Director tosend a letter to the Fort Ord Reuse Authority Board requesting staff coordination on MarinaCoast Water District's proposed Regional Urban Water Augmentation Project (Desal) and CalAm's Monterey Peninsula Water Supply Project as amended at the meeting.

AYES: 6 DIRECTORS: Burnett, Edelen, Kamp, Pendergrass, Roberson,Rubio


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NOES: 0 DIRECTORS: NoneABSENT: 0 DIRECTORS: NoneABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

ADJOURNMENT

Director Rubio requested that in the spirit of inclusion, he's been reading that the DWD andPeople's have made progress and requested that they be agendized to provide updates so thatthe Board can be conversed on those projects. Executive Director Cullem indicated they havebeen invited to make presentations on the topic sometime in the Spring.

On motion, the meeting was adjourned at 9:45 PM

ATTEST:

Lesley E. Milton-Rerig, Clerk of the Authority Jason Burnett, President


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Monterey Peninsula Regional Water AuthorityAgenda Report

Date: April 09, 2015

Item No: 2.

FROM: Authority Clerk Milton

SUBJECT: Approval and File Authority Checks through April 6, 2015

RECOMMENDATION:

It is recommended that the Authority approve and file the accounts payable paymentsmade during the period march 11, 2015 through April 6, 2015 with total payments forthe above referenced period of $30,393.43 from the general fund account and authorizethe Directors to sign for such checks.

DISCUSSION:

At its meeting on September 12, 2013, the Authority Board approved a staffrecommendation to provide the Directors a listing of financial obligations since the lastreport for inspection and confirmation. Each invoiced expense has been reviewed andapproved by the Executive Director and Finance personnel prior to payment to insure thatit conforms to the approved budget.

The following checks are hereby submitted to the Authority for inspection andconfirmation.

• $4,550.67 to Brownstein Hyatt Farber and Schreck for Special Legal CounselServices.

• $ 600.00To Environmental Relations for Public Outreach services

The bank balance as of April 6, 2015 is sufficient cover the above check therefore, staffis recommending approval.

ATTACHMENTS:

• Budget to Actual Report through March 1, 2015


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2:42 PM

03/30/15

Accrual Basis


Profit & Loss Budget vs. Actual July 1, 2014 through March 30, 2015

Budget

Jul 1, '14 -

Mar 30, 15 Balance % of Budget

Ordinary Income/Expense

Income

47200 · Program Income

47230 · Membership Dues 458,680.00 634,147.00 -175,467.00 138.26%

47240 · Program Service Fees 0.00 0.00 0.00 0.0%

47250 · Reimbursement SPI Contract 0.00 18,562.14 -18,562.14 100.0%

47260 · Reimburesment VE Contract 0.00 0.00 0.00 0.0%

47200 · Program Income - Other 0.00 0.00 0.00 0.0%

Total 47200 · Program Income 458,680.00 652,709.14 -194,029.14 142.3%

47220 · Interest Earned 0.00 2.61 2.61 100.0%

Total Income 458,680.00 652,711.75 -194,031.75 142.3%

Expense

60900 · Administration and Clerical

60901 · Clerk of the Board 24,000.00 24,000.00 0.00 100.0%

60902 · Executive Director 94,680.00 35,260.24 59,419.76 37.24%

60903 · Principal Offc of the Authority 5,000.00 0.00 5,000.00 0.0%

60904 · Financial Services 6,000.00 6,000.00 0.00 100.0%

60905 · Misc Admin Expenses 500.00 0.00 500.00 0.0%

60900 · Administration and Clerical - Other 0.00 0.00 0.00 0.0%

Total 60900 · Administration and Clerical 130,180.00 65,260.24 64,919.76 50.13%

62100 · Legal Fees

62110 · Board Counsel 63,000.00 25,000.00 38,000.00 39.68%

62140 · Special Counsel 152,000.00 31,796.85 120,203.15 20.92%

62100 · Legal Fees - Other 0.00 0.00 0.00 0.0%

Total 62100 · Legal Fees 215,000.00 56,796.85 158,203.15 26.42%

62800 · Contract Services

60801 · Public Outreach 35,000.00 4,933.33 30,066.67 14.1%

60806 · Contract VE 200,000.00 104,988.64 95,011.36 52.49%

62802 · Audit Services 6,000.00 6,805.00 -805.00 113.42%

62803 · Televised Meeting 10,000.00 3,662.50 6,337.50 36.63%

62804 · Contract Services & Studies 30,000.00 0.00 30,000.00 0.0%

62800 · Contract Services - Other 0.00 0.00 0.00 0.0%

Total 62800 · Contract Services 281,000.00 120,389.47 160,610.53 42.84%

65000 · Insurance 7,500.00 6,673.44 826.56 88.98%

65100 · Travel Expenses 5,000.00 325.00 4,675.00 6.5%

68300 · Contingency 20,000.00 0.00 20,000.00 0.0%

Total Expense 658,680.00 249,445.00 -409,235.00 37.87%

Net Income 403,266.75

Page 1 of 1


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Item No: 3.

№06/12

FROM: Executive Director Cullem

SUBJECT: Receive Report on Monthly Reports to the AuthorityBoard on the Activities of the Public OutreachConsultant and Discussions of Priorities

RECOMMENDATION:

Staff recommends the Water Authority receive the first of monthly reports

on the activities of Environmental Relations PR, the Water Authority Public

Outreach consultant.

DISCUSSION:

At its meeting on April 25, 2013, the Water Authority approved a Public

Outreach budget of $49,000 of which $20,000 was budgeted for Speaker’sBureau Support. Following an RFP process in September 2013, the Water

Authority awarded a contract to Environmental Relations PR for Public

Outreach Services for the FY 2013-2014 at a price not-to-exceed $15,000.

At its meeting of December 11, the Water Authority approved a extension

of the contract for FY 2014-2015 at a price not-to-exceed $10,000. A copy

of the current Scope of Work is at Exhibit A.

As a condition of contract approval this year, staff and the consultant were

directed to meet with Vice President Kampe to establish clearer objectives

and to document accomplishments. At a meeting on Jan 16, 2015, it was

agreed that the Authority should receive a monthly report on outreach

activities and priorities.


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Ashley Beleny from Environmental Relations PR has focused on

accomplishing the following activities during March 2015:

1. Updated website2. Posted to Facebook page and news page of website3. Researched potential opportunity and cost of hosting booth at Pacific

Grove Good Old Days in April

The Executive Director has directed Ashley to continue prioritizing theupdates of the web page and social media sites, and preparation ofperiodic newspaper articles to fill in the information void not covered byreporters and other contributors such as Cal Am, the MRWPCA, and theMPWMD.

FISCAL IMPACT:

At fiscal year end, the Authority had expended quite a bit less than $49,000

in FY 2013-2014 for Public Outreach, and actual contract expenditures for

the Public Outreach Services contract were substantially less than $15,000

as well. Staff expects to further reduce expenditures under the current not-

to-exceed $10,000 consultant contract.

ATTACHMENTS:

A - Public Outreach Scope of Work for FY 14-15


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Item No: 5.

№06/12

FROM: Executive Director Cullem

SUBJECT:Receive Report, Discuss, and Provide Direction with Respect tothe Proposed Extension of the State Water Resources ControlBoard Cease and Desist Order WR 2009-0060 (CDO)Deadline of 31 December 2016 Submitted March 10, 2015.

RECOMMENDATION:

It is recommended that the Water Authority Board continue to receiveadditional public input on efforts by the settling parties, including CaliforniaAmerican Water Co. (Cal Am), the Monterey Peninsula Water ManagementDistrict (MPWMD), and the Monterey Peninsula Regional Water Authority(MPRWA) to obtain an extension of the CDO 2009-60 deadline date ofDecember 31, 2016.

DISCUSSION:

Since the Monterey Peninsula Water Supply Project (MPWSP) has beendelayed to the point where it is virtually impossible for Cal Am to meet theCDO 2009-60 deadline of December 31, 2016, representatives of thesettling parties have been in discussion with the SWRCB staff in an effort todevelop proposals for a CDO extension that would be acceptable to the

public and have a reasonable expectation of obtaining State Boardapproval.

Mayor Burnett represents the MPRWA in those discussions.


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Key principles under discussion include the following:

•

A four-year extension of the CDO deadline from December 31, 2016to December 31, 2020.

• A new reduction schedule in regular increments during the extension,but suspension of the prescribed reductions if MPWSP milestonesare satisfied.

• Authority for the SWRCB staff to suspend a reduction correspondingto a missed milestone if staff determines that the milestone wasmissed due to circumstances beyond the control of Cal-Am,MPWMD, and the Water Authority.

• Suspension of the reduction would be triggered by a joint written

statement from Cal Am, the MPWMD, and the MPRWA that themilestone was missed for reasons outside our control. It is ourposition that such a statement is to be assumed to be correct, and ifthe SWRCB staff disagrees, the issue would be referred to the StateBoard for a decision. In any case, the community retains its rights tolitigate the issue if necessary.

The Mar 10, 2015 version of the Preliminary Draft Proposal is available atthe Authority web site www.mprwa.org and is attached herewith.

The Authority will continue to report regularly on progress in helping CalAm obtain the extension, and to gather public input before the Authoritytakes a formal position on a final draft proposal.

ATTACHMENTS:

A- March 10, 2015 DRAFT Proposal to Amend SWRCB Order 2009-0060.B- Redline version of the March 10 DRAFT


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STAFF PRELIMINARY WORKING DRAFT FOR INTERNAL USE ONLY

PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 6254(a)

DRAFT 3/10/2015 10:40 AM

Proposal to Amend

SWRCB Order WR 2009-0060 (Carmel River CDO) A.

Good Cause Exists to Modify WRO 2009-0060: California American Water (“CAW”) and other

Parties have diligently and aggressively implemented measures to comply with WRO 2009-0060

(“CDO”). CAW and other Parties have: (1) implemented efficiency and conservation measures

to control and reduce customer demand and system losses within CAW’s Monterey district, such

that the community is currently outperforming targets for production of Carmel River water set

in the CDO; (2) diligently pursued the Monterey Peninsula Water Supply Project (“MPWSP”),

which will supply the replacement water supply necessary to eliminate all unauthorized

diversions from the Carmel River; (3) developed, permitted and implemented projects to replace

and supplement Carmel River diversions subject to the CDO1; and (4) permitted and

implemented measures to enhance and improve conditions for fish and wildlife resources in the

Carmel River watershed, and to minimize or avoid impacts to fish and wildlife that could result

from extension of WRO 2009-0060 timelines. In consideration of these activities and the further

commitments described below, CAW and other Parties support the State Water Resources

Control Board’s (“SWRCB’s”) finding of good cause to modify the CDO as requested.

B.

Modifications to WRO 2009-0060: CAW is currently meeting or has met all of the conditions of

the CDO, but factors beyond CAW’s control make it unlikely that several future conditions can

be met. Therefore, in coordination with other Parties, CAW will submit a request for the

following modifications to the CDO:

1.

A four-year extension of the deadline set forth in ordering Condition no. 1, from December

31, 2016 to December 31, 2020.

2.

Add a process to Condition no. 1 delegating to the Executive Director authority to

administratively extend the time for compliance with Condition no. 1, for good cause

shown.

3.

Amend Condition no 3.a.(2) to state that, effective Water Year 2015-2016, CAW shall further

reduce unlawful diversions from the river by an additional 1,000 acre feet annually (“afa”)

from the existing cumulative reduction level in place for Water Year 2013-2014 under Table

1 of the CDO. See Attachment 1. For good cause shown, the Executive Director may exercise

discretion to relax this diversion reduction to address circumstances that may arise in future

years. A showing of good cause to justify a modification of this diversion reduction shallinclude, but shall not be limited to, circumstances in which CAW, MPWMD, and/or MPRWA

submit credible evidence that: (1) the existing demand or projected demand within the CAW

system is likely to exceed the cumulative reduction levels in effect, or projected cumulative

1These projects include: Seaside Middle School Aquifer Storage and Recovery (“ASR”) Well #3 (completed up to an

additional 500 acre feet per annum); Acquisition of additional rights to legally appropriate Carmel River water via

Permit 21330 (up to 1488 acre feet per annum); Seaside Middle School ASR Well #4 (in process, up to 500 acre feet

per annum).

1


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DRAFT 3/10/2015 10:40 AM

reduction levels to take effect, as set forth in Table 1 of the CDO; and (2) CAW has exercised

all reasonable care, and the MPRWA and MPWMD have provided all reasonable

cooperation and support, to meet the milestones set forth in Condition no. 3.a.(2)(i). CAW,MPRWA and/or MPWMD shall have the right to request the full SWRCB to reconsider any

determination by the Executive Director under this Condition no 3.a.(2).

4.

Replace Attachment 1 to the CDO with Attachment 1 to this Proposal to Amend.

5.

Add a Condition no. 3.a.(2)(i) stating that the reduced diversion level set forth in amended

Condition no 3.a.(2) will be maintained, i.e., no additional annual reduction in diversions will

be required under the CDO, if CAW meets the following milestones as they accrue:

Milestone Deadline

a. Substantial completion of downstream fish passage facilities at the

Los Padres Dam2, meaning facilities are sufficiently complete andappropriately permitted to allow for their operation as intended

September

30, 2016

b. Start of construction for any of the CAW Components3 of the

MPWSP, meaning commencement of physical work after issuance

of required regulatory permits and authorizations to begin work4

September

30, 2017

c. (1) Drilling activity for at least one MPWSP source water

production well5 complete; (2) foundation and structural framing

complete for MPWSP pretreatment, seawater reverse osmosis,

and administration buildings at desalination plant; (3) excavation

complete for MPWSP brine and backwash storage basins; and (4)

25% of MPWSP transmission pipelines installed based on total

length

6

September

30, 2018

d. (1) 50% of drilling activity complete for MPWSP source water

production wells based on total number of wells required; (2)

mechanical systems for MPWSP brine and backwash storage

September

30, 2019

2CAW owns and operates Los Padres Dam at approximately River Mile 24.8 on the Carmel River. CAW has made

various improvements to accommodate upstream fish passage over Los Padres Dam. Currently, when the lake

elevation falls below the dam’s spillway crest, no downstream fish passage corridor exists. To improve

downstream fish passage opportunity, CAW and various stakeholders have agreed that the following downstream

fish passage facilities should be constructed: behavioral guidance system; floating weir surface collector; fish

bypass conduit; bypass access portals; and bypass outfall. 3For purposes of this proposal the CAW Components of the MPWSP include: source water production wells;

desalination plant; brine disposal system; and transmission pipelines.4Such work may include, among other things, any of the following: desalination plant site grading and preparation;

electric utility installation; yard piping; subsurface excavation for structural foundations; transmission pipeline

installation; and/or presence of source water well drilling equipment on-site.5Not including the MPWSP Test Well completed in 2015.

6For transmission pipeline installation CAW will prioritize installation of the “Monterey Pipeline and other ASR

related improvements,” which will facilitate increased ASR diversion during high flows and other improved

operations that will increase the amount of water in the Carmel River during dry months. See Paragraph C.1.,

below.

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DRAFT 3/10/2015 10:40 AM

basins complete; (3) Construction of MPWSP filtered water tanks

and finished water tanks complete; (4) 50% of MPWSP

transmission pipelines installed based on total length, including100% installation of the “Monterey Pipeline and other ASR related

improvements” described in Footnote 6 and Paragraph C.1., below

e. Substantial completion of the CAW Components of the MPWSP,

meaning the CAW Components are sufficiently complete and

appropriately permitted to allow delivery of MPWSP produced,

potable water to CAW’s Monterey Main system, no further CAW

diversions of Carmel River water without valid basis of right

December

31, 2020

6.

Add a Condition no. 3.a.(2)(ii) stating that, should CAW fail to meet any milestone described

in new Condition no. 3.a.(2)(i) by its corresponding deadline, the reduced diversion level set

forth in amended Condition no 3.a.(2) shall be further reduced by 1,000 afa. Any further

reduction(s) required under this new Condition no. 3.a.(2)(ii) shall remain in force until the

corresponding milestone is achieved. If a milestone is not achieved by its original deadline,

but is subsequently achieved, the further reduction required in the water year in which the

milestone is achieved shall be prorated and assessed at the end of that water year, and shall

no longer be required for subsequent water years.7

7.

Add a Condition no. 3.a.(2)(iii) stating that, if CAW fails to meet any milestone described in

Condition no. 3.a.(2)(i), the corresponding further reduction described in new Condition no.

3.a.(2)(ii) shall be suspended if CAW, the Monterey Peninsula Regional Water Authority

(“MPRWA”) and the Monterey Peninsula Water Management District (“MPWMD”):

a.

Make a written joint notice to the Executive Director, with copies to counsel for theSierra Club and the Carmel River Steelhead Association, no later than 60 days after the

associated milestone deadline; and

i.

The notice includes credible information demonstrating that CAW has exercised

all reasonable care, and the MPRWA and MPWMD have provided all reasonable

cooperation and support to meet the milestone, and the milestone deadline

was missed due to circumstances beyond the control of CAW, MPRWA and/or

MPWMD;

ii.

If CAW, MPRWA, and MPWMD cannot agree on a joint notice, then any of these

entities may submit an individual notice or notices following the procedure and

form described in this Paragraph B.7. If such individual notice(s) are submitted,

or the Executive Director does not agree with a joint notice submitted under

this Paragraph B.7, the SWRCB shall determine whether to suspend the

7For example, if CAW failed to complete construction of downstream fish passage facilities at the Los Padres Dam

by September 30, 2016, but completed these facilities by June, 2017, 75% (9/12ths

) of the corresponding 1,000 afa

reduction (i.e., 750 afa) would be required as a reduction for water year 2016-2017. No reduction based on missing

this milestone would be required for water year 2017-2018 or any future water years.

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DRAFT 3/10/2015 10:40 AM

reduction that corresponds to the missed milestone. If any notice(s) are

submitted following the form and process described in this Paragraph B.7,

further reductions described in Condition no. 3.a.(2)(i) shall be tolled pendingdetermination by the SWRCB or the Executive Director.

8.

Amend Condition 3.a.(5) to state: “Water produced from new sources developed pursuant

to Condition 5 of this order shall be subtracted from the base” (currently includes incorrect

cross –reference to Condition no. 4 rather than Condition no. 5).

9.

Amend the last sentence of Condition no. 3.a.(6) to state as follows: “After December 31,

2020, CAW shall divert water from the river to supply the holders of PBC’s water

entitlement only from CAW’s legal water rights.”

10.

Add a Condition 3.a.(7) stating that, should CAW be able to identify suitable and willing

transacting parties, CAW will use reasonable additional efforts to acquire supplementalwater rights at acceptable costs, and/or will pursue other water acquisition and water right

changes in order to increase flows in the Carmel River, and/or to decrease CAW’s

unauthorized diversions. Such acquisitions or water right changes may include leases and

purchases of water rights along the Carmel River on a temporary or permanent basis,

and/or water right change approvals or permits (permanent or temporary) from the SWRCB

to increase opportunities to increase lawful diversions in order to reduce unauthorized

diversions during periods of lower flow on the Carmel River. CAW shall quantify

supplemental water supplies and increased flows developed pursuant to this Condition and

such supplemental water and/or increased flows will be credited towards any further

reduction required under new Condition no. 3.a.(2)(ii) (excepting supplies developed to

satisfy Conditions 5 and 3.a.(5)).

11.

Amend Condition no. 3.c. to add the following sentence after the last sentence: “Any ASR

water stored in and recovered from the Seaside Groundwater Basin in excess of the (a)

Estimated ASR Project Operational Yield and (b) the Estimated Small Project Output, as set

forth in Table 1, shall be credited towards any further reduction required under new

Condition no. 3.a.(2)(ii).” In addition, Condition no. 3.c. should be modified to extend the

deadline for written submissions to recover ASR water to “not later than May 31 of each

year”, to allow CAW and the fisheries agencies appropriate time to consider information

made available at agency meetings that occur after May 1 of each year.

C.

Requests for Assistance by SWRCB. Additionally, CAW and other Parties request that the

SWRCB commit to use reasonable efforts to assist with the following items:

1.

Upon issuances of a Certificate of Public Convenience and Necessity (“CPCN”) from the

CPUC, provision of support for CAW’s request(s) to the California Coastal Commission and

other agencies with permitting jurisdiction for expedited permit issuance for the “Monterey

Pipeline and other ASR related improvements,” which will facilitate increased ASR diversion

during high flows and other improved operations that will increase the amount of water in

the Carmel River during dry months;

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DRAFT 3/10/2015 10:40 AM

2.

Provision of support in connection with an application by the MPWMD and the Monterey

Regional Water Pollution Control Authority (“MRWPCA”) to place the groundwaterreplenishment (“GWR”) component of the MPWSP on the State Revolving Fund financing

priority list;

3.

Provision of support in connection with a request that the SWRCB Division of Financial

Assistance award one percent (1.000%), thirty-year loan proceeds from the program

announced March 19, 2014 for water recycling projects for the MPWMD/MRWPCA

groundwater replenishment project, provided an application is submitted by December 2,

2015;

4.

Provision of support and prioritization in connection with the MPWMD/MRWPCA GWR

receipt of grant funds pursuant to Chapter 9 of AB 1471 (2014 Proposition 1); and

5.

Provision of support , including expedited review, in connection with water rights

Application 32263 of Monterey County Water Resources Agency, and any amendments

thereto, in order to facilitate the MPWMD/MRWPCA groundwater replenishment project

D.

In consideration of the foregoing, CAW and other Parties commit to implement, or have

implemented, the following measures –

1. Efficiency and Conservation Measures - CAW and other Parties have implemented the

following measures to control and reduce water demand and system losses within CAW’s

service area:

a.

CAW has implemented, and will continue during the CDO period, the current

moratorium on new service connections within its Monterey district (see Revised

C.P.U.C. SHEET NO.6509-W);

b.

CAW and the MPWMD will continue customer water conservation and efficiency

programs, including:

i.

programs targeting high use commercial customers such as laundries, hotels and car

washes;

ii.

programs targeting reductions in outdoor irrigation including replacement of

irrigated turf with drought tolerant landscaping or artificial turf, incentives for

installation of weather-based irrigation controllers, and mandatory installation of

rain sensors on irrigation systems8; and

8MPWMD Regulation XIV.

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DRAFT 3/10/2015 10:40 AM

iii.

mandatory water efficiency requirements for all non-residential customers and

certain residential customers.9

c.

CAW will continue programs to detect and reduce non-revenue system losses, including:

i.

replacement of older water mains and service lines in areas shown to be more leak

prone;

ii.

water meter replacement;

iii.

active leak detection;

iv.

technological solutions to manage lost water; and

v.

operational fixes such as pressure reduction.

d. CAW will submit an application to modify revised Rule No. 14.1.1, Water Conservation

and Rationing Plan for the Monterey District to the California Public Utilities Commission

(“CPUC”) for approval10.

2. Alternative and Supplemental Water Supplies – CAW and other Parties have developed

and/or are implementing projects to provide replacement and supplemental water supplies

to CAW’s Carmel River water supplies subject to the CDO:

a.

CAW has submitted an application to the CPUC for approval of the MPWSP, which will

allow CAW to eliminate all unauthorized diversions from the Carmel River in fullcompliance with the CDO. In September 2014 Governor Jerry Brown signed SB 936,

authored by Senators Bill Monning and Anthony Cannella, with Assemblymen Mark

Stone and Luis Alejo. This legislation will allow the MPWSP to utilize partial public

financing if it is available at a lower rate than conventional, private project financing.

The MPWSP includes the following components:

i.

Desalination Plant and associated source wells and conveyance system, which will

produce up to 9,752 acre feet per annum for system demand;

ii.

ASR of water lawfully diverted from the Carmel River and stored in the Seaside

Groundwater Basin, which may allow for an annual average storage of 1,300 acre

feet; and

9MPWMD Regulation XIV.

10Rule 14.1.1 was reviewed by the CPUC in its “Decision Authorizing Modifications to the Rationing Plan in Rule

14.1 (D.09-07-023)” of 2007. Rule 14.1.1 has been implemented by CAW in coordination with MPWMD, though its

Ordinance 137. CAW and MPWMD are developing further refinements to this plan.

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DRAFT 3/10/2015 10:40 AM

iii. GWR, which is a project that could produce up to 3,500 acre feet per annum.

CAW is pursuing GWR as an option in conjunction with, and with significant effort

on funding and other aspects of the project by, MPWMD and MRWPCA.

b. CAW has also pursued various smaller projects to make use of lawful diversions from

the Carmel River, including pursuing a permit for diversion under Table 13 of SWRCB D.

1632 (July 6, 1995), and supporting and facilitating changes to other water rights to

permit beneficial uses within CAW’s service area; and

c. CAW and other Parties have supported additional water development projects within

the CAW service area, including:

i. Efforts by Pacific Grove to recycle and reuse municipal wastewater on city-owned

golf course and cemetery; and

ii.

Efforts by Pacific Grove to capture and use storm water for non-potable uses.

3. Fish and Wildlife Protection and Enhancement Measures – CAW and other Parties have

developed and implemented measures to protect and enhance fish and wildlife resources in

the Carmel River watershed, and to avoid or minimize effects to fish and wildlife associated

with extension of the CDO deadline:

a. Pursuant to a 2009 agreement between CAW, the National Oceanic and Atmospheric

Administration (“NOAA”) and the California Department of Fish and Wildlife (“CDFW”),

as amended in 2014, CAW made a one-time payment of $3.5MM in 2009, annual

payments of $1.1MM per year for 2010 through 2013, and has committed to makeannual payments of $1.1MM per year through 2016 to the California Coastal

Conservancy (“CCC”) for environmental protection and enhancement projects in the

Carmel River watershed;

b. Provided that NOAA and CAW mutually agree to terms for extending the 2009

agreement described in Paragraph 3.a., above, CAW is committed to making additional

annual payments of $1.1MM, to be pro-rated for any partial years until unpermitted

diversions of water from the Carmel River are replaced by legal sources of water, for use

on projects during the period of the requested extension of the CDO deadline;

i. Funding and administrative efforts will focus, with the support of CAW and other

Parties, on projects that can be implemented during the extension period to

mitigate potential effects of the extension;

ii. To the extent MPWMD receives funding to carry out or implement mitigation

measures that arise out of the 2009 agreement described in 3.a. above, MPWMD

will use best efforts, including by fully cooperating with NOAA, CDFW, CCC, and

the Carmel River Steelhead Association, to identify, develop, then implement

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projects that will convey mitigation benefits for the Carmel River before

December 31, 2020.

c. CAW has permitted, initiated construction and is currently over half way done with

construction activities to reroute the Carmel River and remove the San Clemente Dam.

Status of the various construction activities include complete excavation of the reroute

cut, nearly complete installation of the diversion dike and the moving of over one

million cubic yards of rock and sediment;

d. Subject to final approval from CDFW, NOAA, and any other agencies with permitting

jurisdiction, CAW is committed to implementing up to $2.5MM in other projects on the

Carmel River to improve fish passage and habitat. These include, in order of priority and

estimated costs: additional spawning gravel injections below San Clemente Dam using

excess gravel from the San Clemente Dam removal project or from Los Padres reservoir

should there be an insufficient quantity or type at San Clemente ($0.2MM);improvements to the existing upstream fish passage ladder and trap at Los Padres Dam

($0.2MM); installation of a fish screen at the lower outlet pipe on Los Padres Dam

($0.8MM); a pit tagging program ($0.8MM); and a through-reservoir survival study for

Los Padres Reservoir ($0.5MM). Should the higher priority projects exceed the

estimated amounts, funding will be pulled from the lower priority projects until the

entire $2.5MM is utilized. Additionally, the estimated cost from the above projects may

be used to supplement other related projects occurring on the Carmel River (i.e., pit

tagging work being contemplated by MPWMD).

e. In July 2013 CAW requested the CPUC’s approval to fund a study to determine the

ultimate disposition of the Los Padres Dam and Carmel River;

1. If the CPUC approves expenditure of these funds before the close of the second

quarter of 2015, CAW expects to:

2. Fund MPWMD to continue independently studying the fate of the Los Padres

Dam. CAW will contribute up to $1.0MM minus CAW staff time of $24K per

year to assist MPWMD. Studies will include evaluating upstream steelhead

passage at Los Padres Dam, whether the public trust resources of the Carmel

River will be adversely affected or enhanced by removal or alteration of Los

Padres Dam, what options exist to maintain physical existing surface storage in

Los Padres Reservoir, and analysis of the potential geomorphic effects of a

resumption or increase of the natural flow of sediment;

3. Work with MPWMD to Develop the scope of work and award the feasibility

study to a qualified environmental consultant by the close of the third quarter

of 2015; and

4. Complete the study during 2018.

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f.

CAW will continue to fund mitigation measures pursuant to MPWMD’s current

mitigation program through December 31, 2020.

9


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Water Year

(Oct - Sep)

Base

Amount

Mandatory

Cumulative

Annual

Reduction

Potential

Additional

Rampdown

if Condition

3 a.(2)(i)

Estimated

ASR Project

Operational

Yield

Estimated

Sand City

Desal

Plant

Estimated

Small

Project

Output

Estimated

Water

Supply

Project

Output

Total to

Base

Amount

Total

Estimated

Amount

Diverted

from

Carmel

River

Estimated

Amount

Diverted

w/o Valid

Basis of

Right

2009-2010 10,978 549 0 145 75 0 0 769 10,209 6,833

2010-2011 10,978 549 0 145 290 0 0 984 9,994 6,618

2011-2012 10,978 670 0 145 280 0 0 1,095 9,883 6,507

2012-2013 10,978 791 0 145 270 0 0 1,206 9,772 6,396

2013-2014 10,978 912 0 145 260 0 0 1,317 9,661 6,285

2014-2015 10,978 1,912 0 145 250 0 0 2,307 8,671 5,295

2015-2016 10,978 1,912 0 145 240 0 0 2,297 8,671 5,295

2016-2017 10,978 1,912 1,000 145 230 0 0 2,287 8,671 5,295

2017-2018 10,978 1,912 1,000 145 230 0 0 2,287 8,671 5,295

2018-2019 10,978 1,912 1,000 145 230 0 0 2,287 8,671 5,295

2019-2020 10,978 1,912 1,000 145 230 0 0 2,287 8,671 5,295

2020-2021 10,978 1,912 1,000 145 230 0 2,688 2,287 4,705 1,329

2021-2022 10,978 n/a n/a 145 230 0 10,753 2,287 3,376 0

PROJECTED REDUCTIONS IN ILLEGAL DIVERSIONS FROM THE CARMEL RIVER (AF)

ATTACHMENT 1

TABLE 1


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DRAFT 3/10/2015 1110:2440 AM

1

Proposal to Amend

SWRCB Order WR 2009-0060 (Carmel River CDO)A. Good Cause Exists to Modify WRO 2009-0060: California American Water (“CAW”) and other

Parties have diligently and aggressively implemented measures to comply with WRO 2009-0060

(“CDO”). CAW and other Parties have: (1) implemented efficiency and conservation measures

to control and reduce customer demand and system losses within CAW’s Monterey district, such

that the community is currently outperforming targets for production of Carmel River water set

in the CDO; (2) diligently pursued the Monterey Peninsula Water Supply Project (“MPWSP”),

which will supply the replacement water supply necessary to eliminate all unauthorized

diversions from the Carmel River; (3) developed, permitted and implemented projects to replace

and supplement Carmel River diversions subject to the CDO1; and (4) permitted and

implemented measures to enhance and improve conditions for fish and wildlife resources in the

Carmel River watershed, and to minimize or avoid impacts to fish and wildlife that could result

from extension of WRO 2009-0060 timelines. In consideration of these activities and the further

commitments described below, CAW and other Parties support the State Water Resources

Control Board’s (“SWRCB’s”) finding of good cause to modify the CDO as requested.

B. Modifications to WRO 2009-0060: CAW is currently meeting or has met all of the conditions of

the CDO, but factors beyond CAW’s control make it unlikely that several future conditions can

be met. Therefore, in coordination with other Parties, CAW will submit a request for the

following modifications to the CDO:

1. A four-year extension of the deadline set forth in ordering Condition no. 1, from December

31, 2016 to December 31, 2020.

2. Add a process to Condition no. 1 delegating to the Executive Director, the Chief Deputy

Director and the Deputy Director of the Division of Water Rights, authority to

administratively extend the time for compliance with Condition no. 1, for good cause

shown.

3. Amend Condition no 3.a.(2) to state that, effective Water Year 2015-2016, CAW shall further

reduce unlawful diversions from the river by an additional 1,000 acre feet annually (“afa”)

from the existing cumulative reduction level in place for Water Year 2013-2014 under Table

1 of the CDO. See Attachment 1. For good cause shown, the Executive Director may exercise

discretion to relax this diversion reduction to address circumstances that may arise in futureyears. A showing of good cause to justify a modification of this diversion reduction shall

include, but shall not be limited to, circumstances in which CAW, MPWMD, and/or MPRWA

submit credible evidence that: (1) the existing demand or projected demand within the CAW

1These projects include: Seaside Middle School ASRAquifer Storage and Recovery (“ASR”) Well #3 (completed up to

an additional 500 acre feet per annum); Acquisition of additional rights to legally appropriate Carmel River water

via Permit 21330 (up to 1488 acre feet per annum); Seaside Middle School ASR Well #4 (in process, up to 500 acre

feet per annum).


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DRAFT 3/10/2015 1110:2440 AM

2

system is likely to exceed the cumulative reduction levels in effect, or projected cumulative

reduction levels to take effect, as set forth in Table 1 of the CDO; and (2) CAW has exercised

all reasonable care, and the MPRWA and MPWMD have provided all reasonablecooperation and support, to meet the milestones set forth in Condition no. 3.a.(2)(i). CAW,

MPRWA and/or MPWMD shall have the right to request the full SWRCB to reconsider any

determination by the Executive Director under this Condition no 3.a.(2).

4. Replace Attachment 1 to the CDO with Attachment 1 to this Proposal to Amend.

5. Add a Condition no. 3.a.(2)(i) stating that the reduced diversion level set forth in amended

Condition no 3.a.(2) will be maintained, i.e., no additional annual reduction in diversions will

be required under the CDO, if CAW meets the following milestones as they accrue:

Milestone Deadline

a. ConstructionSubstantial completion of downstream fish passagefacilities at the Los Padres Dam2, meaning facilities are sufficiently

complete and appropriately permitted to allow for their operation

as intended

September30, 2016

b. CommencementStart of construction activity for any of the CAW

desalination componentsComponents3

of the MPWSP, meaning

commencement of physical work after issuance of required

regulatory permits and authorizations to begin work4

September

30, 2017

c. Construction activity for the CAW desalination components of

the(1) Drilling activity for at least one MPWSP source water

production well5

complete; (2) foundation and structural framing

complete for MPWSP pretreatment, seawater reverse osmosis,and administration buildings at desalination plant; (3) excavation

complete for MPWSP brine and backwash storage basins; and (4)

25% of MPWSP is substantiallytransmission pipelines installed

based on scheduletotal length6

September

30, 2018

2CAW owns and operates Los Padres Dam at approximately River Mile 24.8 on the Carmel River. CAW has made

various improvements to accommodate upstream fish passage over Los Padres Dam. Currently, when the lake

elevation falls below the dam’s spillway crest, no downstream fish passage corridor exists. To improve

downstream fish passage opportunity, CAW and various stakeholders have agreed that the following downstream

fish passage facilities should be constructed: behavioral guidance system; floating weir surface collector; fish

bypass conduit; bypass access portals; and bypass outfall.3

The CAW desalination componentsFor purposes of this proposal the CAW Components of the MPWSP include:

source water production wells, the; desalination plant and a; brine disposal system; and transmission pipelines.4Such work may include, among other things, any of the following: desalination plant site grading and preparation;

electric utility installation; yard piping; subsurface excavation for structural foundations; transmission pipeline

installation; and/or presence of source water well drilling equipment on-site.5Not including the MPWSP Test Well completed in 2015.

6For transmission pipeline installation CAW will prioritize installation of the “Monterey Pipeline and other ASR

related improvements,” which will facilitate increased ASR diversion during high flows and other improved


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3

d. Construction(1) 50% of drilling activity complete for the CAW

desalination components of the MPWSP is substantiallyMPWSP

source water production wells based on total number of wellsrequired; (2) mechanical systems for MPWSP brine and backwash

storage basins complete; (3) Construction of MPWSP filtered

water tanks and finished water tanks complete; (4) 50% of MPWSP

transmission pipelines installed based on scheduletotal length,

including 100% installation of the “Monterey Pipeline and other

ASR related improvements” described in Footnote 6 and

Paragraph C.1., below

September

30, 2019

e. Substantial completion of the CAW desalination

componentsComponents of the MPWSP, meaning the CAW

Components are sufficiently complete and appropriately

permitted to allow delivery of MPWSP produced, potable water to

CAW’s Monterey Main system, no further CAW diversions of

Carmel River water without valid basis of right

September

30,Decembe

r 31, 2020

6. Add a Condition no. 3.a.(2)(ii) stating that, should CAW fail to meet any milestone described

in new Condition no. 3.a.(2)(i) by its corresponding deadline, the reduced diversion level set

forth in amended Condition no 3.a.(2) shall be further reduced by 1,000 afa. Any further

reduction(s) required under this new Condition no. 3.a.(2)(ii) shall remain in force until the

corresponding milestone is achieved. If a milestone is not achieved by its original deadline,

but is subsequently achieved, the further reduction required in the water year in which the

milestone is achieved shall be prorated and assessed at the end of that water year, and shall

no longer be required for subsequent water years.47

7. Add a Condition no. 3.a.(2)(iii) stating that, if CAW fails to meet any milestone described in

Condition no. 3.a.(2)(i), the Executive Director, the Chief Deputy Director and/or the Deputy

Director of the Division of Water Rights may suspend the corresponding further reduction

described in new Condition no. 3.a.(2)(ii) shall be suspended if CAW, the Monterey

Peninsula Regional Water Authority (“MPRWA”) and the Monterey Peninsula Water

Management District (“MPWMD”):

a. Make a written joint requestnotice to the Executive Director, with copies to counsel for

the Sierra Club and the Carmel River Steelhead Association, no later than 60 days after

the associated milestone deadline; and

operations that will increase the amount of water in the Carmel River during dry months. See Paragraph C.1.,

below.4 7

For example, if CAW failed to complete construction of downstream fish passage facilities at the Los Padres Dam

by September 30, 2016, but completed these facilities by June, 2017, 75% (9/12ths

) of the corresponding 1,000 afa

reduction (i.e., 750 afa) would be required as a reduction for water year 2016-2017. No reduction based on missing

this milestone would be required for water year 2017-2018 or any future water years.


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i. b. ProvideThe notice includes credible information to the Executive Director

demonstrating that CAW has exercised all reasonable care, and the MPRWA and

MPWMD have provided all reasonable cooperation and support, to meet themilestone, and the milestone deadline was missed due to circumstances beyond

the control of CAW, MPRWA and/or MPWMD.;

ii. The Executive Director, the Chief Deputy Director and/or the Deputy Director of

the Division of Water Rights shall make a determination on any request

submitted under this new Condition 3.a.(2)(iii) no later than 60 days after

receiving a written joint request as described above. CAW, MPRWA and/or

MPWMD shall have the right to request the full SWRCB to reconsider any

determination by the Executive Director, the Chief Deputy Director and/or the

Deputy Director of the Division of Water Rights pursuant to this new Condition

3.a.(2)(iii).If CAW, MPRWA, and MPWMD cannot agree on a joint notice, then

any of these entities may submit an individual notice or notices following the

procedure and form described in this Paragraph B.7. If such individual notice(s)

are submitted, or the Executive Director does not agree with a joint notice

submitted under this Paragraph B.7, the SWRCB shall determine whether to

suspend the reduction that corresponds to the missed milestone. If any

notice(s) are submitted following the form and process described in this

Paragraph B.7, further reductions described in Condition no. 3.a.(2)(i) shall be

tolled pending determination by the SWRCB or the Executive Director.

8. Amend Condition 3.a.(5) to state: “Water produced from new sources developed pursuant

to Condition 5 of this order shall be subtracted from the base” (currently includes incorrect

cross –reference to Condition no. 4 rather than Condition no. 5).

9. Amend the last sentence of Condition no. 3.a.(6) to state as follows: “After December 31,

2020, CAW shall divert water from the river to supply the holders of PBC’s water

entitlement only from CAW’s legal water rights.”

10. Add a Condition 3.a.(7) stating that, should CAW be able to identify suitable and willing

transacting parties, CAW will use reasonable additional efforts to acquire supplemental

water rights at acceptable costs, and/or will pursue other water acquisition and water right

changes in order to increase flows in the Carmel River, and/or to decrease CAW’s

unauthorized diversions. Such acquisitions or water right changes may include leases and

purchases of water rights along the Carmel River on a temporary or permanent basis,

and/or water right change approvals or permits (permanent or temporary) from the SWRCB

to increase opportunities to increase lawful diversions in order to reduce unauthorized

diversions during periods of lower flow on the Carmel River. CAW shall quantify

supplemental water supplies and increased flows developed pursuant to this Condition and

such supplemental water and/or increased flows will be credited towards any further

reduction required under new Condition no. 3.a.(2)(ii) (excepting supplies developed to

satisfy Conditions 5 and 3.a.(5)).


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11. Amend Condition no. 3.c. to add the following sentence after the last sentence: “Any ASR

water stored in and recovered from the Seaside Groundwater Basin in excess of the (a)

Estimated ASR Project Operational Yield and (b) the Estimated Small Project Output, as setforth in Table 1, shall be credited towards any further reduction required under new

Condition no. 3.a.(2)(ii).” In addition, Condition no. 3.c. should be modified to extend the

deadline for written submissions to recover ASR water to “not later than May 31 of each

year”, to allow CAW and the fisheries agencies appropriate time to consider information

made available at agency meetings that occur after May 1 of each year.

C. Requests for Assistance by SWRCB. Additionally, CAW and other Parties request that the

SWRCB commit to use reasonable efforts to assist with the following items:

1. Upon issuances of a Certificate of Public Convenience and Necessity (“CPCN”) from the

CPUC, provision of support for CAW’s request(s) to the California Coastal Commission and

other agencies with permitting jurisdiction for expedited permit issuance for the “Monterey

Pipeline and other ASR related improvements,” which will facilitate increased ASR diversion

during high flows and other improved operations that will increase the amount of water in

the Carmel River during dry months;

2. Provision of support in connection with an application by the MPWMD and the Monterey

Regional Water Pollution Control Authority (“MRWPCA”) to place the groundwater

replenishment (“GWR”) component of the MPWSP on the State Revolving Fund financing

priority list;

3. Provision of support in connection with a request that the SWRCB Division of Financial

Assistance award one percent (1.000%), thirty-year loan proceeds from the programannounced March 19, 2014 for water recycling projects for the MPWMD/MRWPCA

groundwater replenishment project, provided an application is submitted by December 2,

2015;

4. Provision of support and prioritization in connection with the MPWMD/MRWPCA GWR

receipt of grant funds pursuant to Chapter 9 of AB 1471 (2014 Proposition 1); and

5. Provision of support , including expedited review, in connection with water rights

Application 32263 of Monterey County Water Resources Agency, and any amendments

thereto, in order to facilitate the MPWMD/MRWPCA groundwater replenishment project

D. In consideration of the foregoing, CAW and other Parties commit to implement, or have

implemented, the following measures –

1. Efficiency and Conservation Measures - CAW and other Parties have implemented the

following measures to control and reduce water demand and system losses within CAW’s

service area:


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a. CAW has implemented, and will continue during the CDO period, the current

moratorium on new service connections within its Monterey district (see Revised

C.P.U.C. SHEET NO.6509-W);

b. CAW and the MPWMD will continue customer water conservation and efficiency

programs, including:

i. programs targeting high use commercial customers such as laundries, hotels and car

washes;

ii. programs targeting reductions in outdoor irrigation including replacement of

irrigated turf with drought tolerant landscaping or artificial turf, incentives for

installation of weather-based irrigation controllers, and mandatory installation of

rain sensors on irrigation systems58

; and

iii. mandatory water efficiency requirements for all non-residential customers and

certain residential customers.69

c. CAW will continue programs to detect and reduce non-revenue system losses, including:

i. replacement of older water mains and service lines in areas shown to be more leak

prone;

ii. water meter replacement;

iii. active leak detection;

iv. technological solutions to manage lost water; and

v. operational fixes such as pressure reduction.

d. CAW will submit an application to modify revised Rule No. 14.1.1, Water Conservation

and Rationing Plan for the Monterey District to the California Public Utilities Commission

(“CPUC”) for approval710.

2. Alternative and Supplemental Water Supplies – CAW and other Parties have developed

and/or are implementing projects to provide replacement and supplemental water suppliesto CAW’s Carmel River water supplies subject to the CDO:

5 8

MPWMD Regulation XIV.6 9

MPWMD Regulation XIV.7 10

Rule 14.1.1 was reviewed by the CPUC in its “Decision Authorizing Modifications to the Rationing Plan in Rule

14.1 (D.09-07-023)” of 2007. Rule 14.1.1 has been implemented by CAW in coordination with MPWMD, though its

Ordinance 137. CAW and MPWMD are developing further refinements to this plan.


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a. CAW has submitted an application to the CPUC for approval of the MPWSP, which will

allow CAW to eliminate all unauthorized diversions from the Carmel River in fullcompliance with the CDO. In September 2014 Governor Jerry Brown signed SB 936,

authored by Senators Bill Monning and Anthony Cannella, with Assemblymen Mark

Stone and Luis Alejo. This legislation will allow the MPWSP to utilize partial public

financing if it is available at a lower rate than conventional, private project financing.

The MPWSP includes the following components:

i. Desalination Plant and associated source wells and conveyance system, which will

produce up to 9,752 acre feet per annum for system demand;

ii. ASR of water lawfully diverted from the Carmel River and stored in the Seaside

Groundwater Basin, which may allow for an annual average storage of 1,300 acre

feet; and

iii. GWR, which is a project that could produce up to 3,500 acre feet per annum.

CAW is pursuing GWR as an option in conjunction with, and with significant effort

on funding and other aspects of the project by, MPWMD and MRWPCA.

b. CAW has also pursued various smaller projects to make use of lawful diversions from

the Carmel River, including pursuing a permit for diversion under Table 13 of SWRCB D.

1632 (July 6, 1995), and supporting and facilitating changes to other water rights to

permit beneficial uses within CAW’s service area; and

c. CAW and other Parties have supported additional water development projects withinthe CAW service area, including:

i. Efforts by Pacific Grove to recycle and reuse municipal wastewater on city-owned

golf course and cemetery; and

ii. Efforts by Pacific Grove to capture and use storm water for non-potable uses.

3. Fish and Wildlife Protection and Enhancement Measures – CAW and other Parties have

developed and implemented measures to protect and enhance fish and wildlife resources in

the Carmel River watershed, and to avoid or minimize effects to fish and wildlife associated

with extension of the CDO deadline:

a. Pursuant to a 2009 agreement between CAW, the National Oceanic and Atmospheric

Administration (“NOAA”) and the California Department of Fish and Wildlife (“CDFW”),

as amended in 2014, CAW made a one-time payment of $3.5MM in 2009, annual

payments of $1.1MM per year for 2010 through 2013, and has committed to make

annual payments of $1.1MM per year through 2016 to the California Coastal

Conservancy (“CCC”) for environmental protection and enhancement projects in the

Carmel River watershed;


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b. Provided that NOAA and CAW mutually agree to terms for extending the 2009

agreement described in Paragraph 3.a., above, CAW is committed to making additionalannual payments of $1.1MM, to be pro-rated for any partial years until unpermitted

diversions of water from the Carmel River are replaced by legal sources of water, for use

on projects during the period of the requested extension of the CDO deadline;

i. Funding and administrative efforts will focus, with the support of CAW and other

Parties, on projects that can be implemented during the extension period to

mitigate potential effects of the extension;

ii. To the extent MPWMD receives funding to carry out or implement mitigation

measures that arise out of the 2009 agreement described in 3.a. above, MPWMD

will use best efforts, including by fully cooperating with NOAA, CDFW, CCC, and

the Carmel River Steelhead Association, to identify, develop, then implementprojects that will convey mitigation benefits for the Carmel River before

December 31, 2020.

c. CAW has permitted, initiated construction and is currently over half way done with

construction activities to reroute the Carmel River and remove the San Clemente Dam.

Status of the various construction activities include complete excavation of the reroute

cut, nearly complete installation of the diversion dike and the moving of over one

million cubic yards of rock and sediment;

d. Subject to final approval from CDFW, NOAA, and any other agencies with permitting

jurisdiction, CAW is committed to implementing up to $2.5MM in other projects on theCarmel River to improve fish passage and habitat. These include, in order of priority and

estimated costs: additional spawning gravel injections below San Clemente Dam using

excess gravel from the San Clemente Dam removal project or from Los Padres reservoir

should there be an insufficient quantity or type at San Clemente ($0.2MM);

improvements to the existing upstream fish passage ladder and trap at Los Padres Dam

($0.2MM); installation of a fish screen at the lower outlet pipe on Los Padres Dam

($0.8MM); a pit tagging program ($0.8MM); and a through-reservoir survival study for

Los Padres Reservoir ($0.5MM). Should the higher priority projects exceed the

estimated amounts, funding will be pulled from the lower priority projects until the

entire $2.5MM is utilized. Additionally, the estimated cost from the above p

mprwa agenda packet 04-09-15

Documents