A. PUBLIC HEARING

CONSIDER FIRST READING OF ORDINANCE NO. 96 -- AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE MONTEREY PENINSULA WATER MANAGEMENT DISTRICT REVISING THE DEFINITION AND REGULATION OF WATER DISTRIBUTION SYSTEMS

MEETING DATE: AUGUST 21, 2000

SUMMARY: The Board will consider approval of the first reading of Ordinance No. 96, which makes changes to existing rules and regulations that define and govern creation and expansion of water distribution systems, including mobile water distribution systems. A revised version of Ordinance No. 96 is provided as Exhibit 1, with text in bold italic showing changes from the existing Rules and Regulations. This ordinance was first considered at the April 27 and May 15, 2000 meetings, and continued until CEQA review could be completed as well as an assessment of the impacts of Ordinance No. 96 on applicants and MPWMD staff. The revised ordinance (Exhibit 1, labeled "Draft 3") reflects recommended changes described in the May 15, 2000 Board information package.

In general, Ordinance No. 96 expands the scope of the District's regulation to include all water distribution systems and mobile water distribution systems (rather than excluding small systems); expands the definition of a water distribution system to include single-source projects and distribution systems which derive a source of supply from alternative sources such as imported water or desalination plants; expands the information that must be provided by permit applicants, including water rights information; sets a two-track process for potable systems and subpotable systems; sets additional minimum standards for approval, and requires additional findings that must be made by the Board. These elements are described in more detail in the "Background" section below, as are changes from the April and May 2000 initial versions of the ordinance.

For a more detailed background, please refer to the materials on this item in the April 27 and May 15, 2000 Board information packages. They address legal questions posed about Ordinance No. 96 and provide information about trends in new well permits and non-Cal-Am water use.

This public hearing has three components, which are addressed in more detail below:

1. Consider Initial Study and Adoption of Negative Declaration;
2. Consider Cost Impacts to the Public and the District; and
3. Consider Approval of First Reading of Ordinance No. 96.
 

1. Adopt the Negative Declaration for approval of Ordinance No, 96, based on the Initial Study (Exhibit 2);
2. Consider the cost and resource impacts of the Ordinance on the applicants as well as District staff (Exhibits 3-7);
3. Approve Ordinance No. 96 ("Draft 3" version) with the following changes:

 
• Change text throughout the ordinance to reflect that the proposed requirements for a water distribution system permit for one connection on one parcel (or more than one connection on adjoining parcels with the same ownership) should apply only to parcels served by a water distribution system that obtains its source of supply from the Carmel Valley alluvial aquifer and/or the Southern Coastal Subarea, the Northern Coastal Subarea, and the Fort Ord Subarea of the Seaside Groundwater Basin (collectively referred to as the "Seaside coastal subareas"). A map showing the Carmel Valley alluvial aquifer and Seaside coastal subareas is provided as Attachment 2 of the Initial Study (Exhibit 2, last page).
 
Staff believes the requirement for a water distribution system permit for a single connection (and multiple connections with same ownership) outside the Carmel Valley alluvial aquifer and Seaside coastal subareas should be deleted, as the protection to community water resources is minimal compared to the cost to applicants and the District. The Carmel Valley alluvial aquifer is defined as the mapped jurisdiction of the State Water Resources Control Board (SWRCB). For applications located near the SWRCB jurisdiction boundary, the General Manager will determine whether the application is in the alluvial aquifer based on well drilling logs and other hydrologic data. Similarly, the Seaside coastal subareas have been mapped based on previous hydrogeologic studies, and could be refined in the future based on future studies. These recommended changes would not affect the adequacy of the Initial Study.
 
• Section Three, Definitions, on Page 3 of the ordinance should be expanded to include the definition of CONNECTION to state, "A connection is the point of intersection where a user gains access to the water distribution system, as defined in District Rule 11."
 
• Section Four, Rule 20, Permits Required, on Page 3 of the ordinance should include new text to clarify that an MPWMD permit is not needed to refurbish, replace or reactivate an existing well, with the understanding that the property owner still has the separate obligation to comply with SWRCB water rights regulations. Also, the text should clarify that the MPWMD permit is required to use a water well (and other distribution system components), not simply to construct the well.
 
• Section Five, Rule 21-B, Paragraph (2) on page 6 of the ordinance should be deleted in order to be consistent with existing water permit regulations.
 
• Section Five, Rule 21-B, Paragraph (2) on page 6 of the ordinance should be revised to be consistent with existing water permit regulations. The first two lines should read:
 
"For those potable system applications for which a building permit is pending, compete architectural contract drawings that reflect water use .....
 
• Section Five, Rule 21-B, Paragraph (4) on page 7 of the ordinance should be revised to remove the word "all" before the word "exterior" in Line 1, and the following text should be added after the words "water use" in Line 2:
 
...water use in the form of a landscape budget or other alternative water demand estimate as approved by the General Manager.

• Section Five, Rule 21-B, paragraph (5) on page 7 of the ordinance should be revised to delete the word "contract" in Line 1.

• Section Six, Rule 22-D (Minimum Standards), element (1) on overdrafts on page 11 should add the words, "...overdraft, except if a valid superior right is proven." This change is intended to avoid the situation where an applicant expends considerable resources proving the superiority of his/her water right, only to be denied due to overdraft concerns. If the applicant's rights are superior, action by other entities with inferior rights may be needed to address the overdraft issue.

 
• Section Six, Rule 22-E (Amendments to Permit), paragraph at bottom of page 11 of the ordinance should be revised to state "his/her" instead of "his" in Line 1.

• Section Seven, Rule 173-A (Mobile Water Distribution Systems), on page 12 of the ordinance should be revised in line 3 to state, "In accordance with Monterey County Code (e.g., Title 15.04), no applications ...."

 
• Section Seven, Rule 173-B (Mobile Water Distribution Systems), on page 12 of the ordinance should refer to "Rule 21" in line 4 rather than "Rule 22".

 
• Section Eleven, (Effective Date and Sunset), on page 13 of the ordinance should add a new sentence that states, "This ordinance shall be reviewed in five-year increments, or earlier if deemed necessary by the MPWMD Board of Directors."
1. Direct staff to develop an ordinance for Board consideration that changes District Rule 60, Permit Fees, to reflect actual current costs. This change should be made whether or not Ordinance No. 96 is approved as the current fee structure is outdated and, in some cases, does not provide adequate funding for the extensive staff time needed for complex or controversial applications.

CEQA Review

Beginning on July 6, 2000, a Notice of Intent to Adopt a Negative Declaration, along with an Initial Study and Proposed Negative Declaration (Exhibit 2), was circulated pursuant to the California Environmental Quality Act (CEQA). The Negative Declaration determined that adoption of Ordinance No. 96 would not have an adverse impact on the environment. The Initial Study and Proposed Negative Declaration was circulated through the AMBAG regional clearinghouse and was noticed in AMBAG's July 2000 Supplemental Newsletter. A Notice of Completion was filed with the State Clearinghouse on July 12, 2000 (SCH# 2000071048). The Clearinghouse comment period was set from July 12 through August 10, 2000; the District voluntarily extended the comment period through August 15, 2000. Staff informally consulted about the ordinance with other agency staff such as California Department of Fish & Game, Regional Water Quality Control Board, Monterey County Health Department, and SWRCB.

As of August 15, 2000, comment letters on the Initial Study/Negative Declaration were received from the Monterey Peninsula Airport District, AMBAG and the State Clearinghouse (Exhibit 8). The Airport District expressed concern that the Initial Study did not address the purpose and need for Ordinance No. 96, and that no cost/benefit analysis is reflected in the environmental documents. These assessments are not required by CEQA. The Airport District acknowledged SWRCB Order 95-10, and recommended that the ordinance scope be narrowed to the Carmel Valley alluvial aquifer and Seaside coastal areas. It is notable that District staff came to the same conclusion independently. Both AMBAG and the State Clearinghouse had no comment.

Impacts to Applicants

Exhibits 3-5 address the fiscal impacts of Ordinance No. 96 to applicants for a water distribution system. Exhibit 3 briefly summarizes how the ordinance would affect various application scenarios. Simply stated, the ordinance would not have much of an effect for applications with two or more connections on two or more separately owned parcels. The greatest effect of the ordinance would be on single-family residential users who plan to provide their own drinking water. The most rigorous scrutiny occurs for applications within the Monterey Peninsula Water Resources System (Carmel Valley alluvium and Seaside coastal areas).

Exhibit 4 provides a more detailed review of the water distribution system application process and notes how Ordinance No. 96 would change the process. The ordinance has more rigorous requirements for water quality, well capacity and water rights information.

Exhibit 5 reviews the fiscal impacts to applicants if Ordinance No. 96 is approved. It concludes that the fiscal impacts on multiple connection applicants would be similar to the existing situation. Single-connection applicants would have significantly greater costs and would have to expend much more effort than currently required. In addition to a $750 application fee (under current rates), Ordinance No. 96 could add another roughly $1,700 to $4,750 or more in permit processing costs for most applications. Applicants in the Carmel River alluvial aquifer would have to expend the most time, money and effort, and could potentially incur significantly higher legal costs associated with water rights, depending on the complexity of the situation. District Counsel will provide additional information on legal costs at the August 21, 2000 meeting.

Impacts to MPWMD Staff and Board

The last page of Exhibit 4 (Item 14, MPWMD Tasks) and the permit process milestone list (Exhibit 6) describes the staff tasks needed to process an application to create or amend a water distribution system. Board action at a public hearing would be required for all potable water distribution system applications and all mobile water distribution systems (only subpotable permanent mobile systems are allowed). To date, the District has processed three to four water distribution system applications of varying complexity per year. With Ordinance No. 96, the workload would increase by more than 10-fold, based on the number of well permits within the District issued by the Monterey County Health Department (Exhibit 7). Most of these well permits are for single-connection situations that would be considered a water distribution system only if Ordinance No. 96 is approved as written. Since the simplest of water distribution system applications takes at least 20 hours to process, staff has concluded that a half-time staff position would be needed if Ordinance No. 96 is approved.

A review of Exhibit 7 indicates that about 24% of well permits are within the Carmel Valley alluvial aquifer and a small handful are from the Seaside coastal areas, ranging from two to 20 applications per year. Staff believes this is a reasonable number to manage, and that Ordinance No. 96 should focus on the Carmel Valley alluvial and Seaside coastal areas, where the greatest resource impacts occur. Over half of the well permits are in the Carmel Valley upland area, ranging from 15 to 50 applications per year since 1995. Given the significant impact to MPWMD staff and Board workload to process these permits, and the relatively low impact on public trust resources from upland well extractions (and from other areas), staff believes single connection wells in these areas should be excluded from the ordinance. In short, the marginal benefit to community and public trust water resources to regulate these non-alluvial/non-Seaside single connections through the water distribution system application process does not justify the significant increase in MPWMD workload or cost to applicants.

Changes to Text of Ordinance No. 96

The current version of Ordinance No. 96 (Exhibit 1, labeled "Draft 3") incorporates suggestions made by staff and others in May 2000. The substantive changes from the April-May 2000 version of the ordinance include:
 

• Page 1-- Findings #2 and #3 are new.
• Page 2-- Finding #6, line 4 replaced the word "proliferation" with the word "increase".
• Page 2-- Finding #8, line 1 replaced the word "proliferation" with the word "increase".
• Page 2-- Finding #12 is new.

 
• Pages 3 and 4-- Section Three amending Rule 11 (Definitions) now clarifies that the definition of a "mobile water distribution system" does not refer to deliveries of water by commercial companies in volumes of less than 55 gallons per container. Also, the definition of "water gathering facility" was changed to exclude on-site cisterns that capture rainwater for on-site landscape irrigation use.

 
• Page 4-- Section Four amending Rule 20-A (second paragraph) was changed to replace the words "prior to that date" with specific dates where single connection well permits would be recognized water distribution systems. This gives individuals in process the opportunity to drill and complete their wells in a reasonable time period for which permits have been issued by the Health Department prior to October 1, 2000.

 
• Page 5- Section Five amending Rule 21-A-3 adds text about consistency with state and local regulations that require proof of available water supply.

 
• Page 6- Section Five amending Rule 21-B-2 adds text about consistency with state and local regulations that require demonstration of adequate water supply.

 
• Page 7- Section Five amending Rule 21-B-3 adds text about consistency with state and local regulations that require demonstration of adequate water supply.

 
• Page 7-- Section Six amending Rule 22-A-1 adds text in a new subsection (b) to enable the General Manager to act as the hearing officer (similar to the process described for non-potable systems in Rule 22-A-2) for potable systems that are outside of the Monterey Peninsula Water Resources System and are comprised of no more than two connections. This is reflected in line 3 of paragraph 22-A-2-a later on the same page.

 
• Page 12-- Section 7 amending Rule 173-A now clarifies that a long-term (non-emergency) mobile water distribution system may be used only for subpotable irrigation use; Monterey County Code prohibits bulk hauled water for permanent potable use. If a mobile water distribution system is approved for irrigation use within the California-American Water Company (Cal-Am) service area, a condition of approval shall require that Cal-Am be notified in order to install a back-flow protection device pursuant to Monterey County Code Title 17. It is notable that the Monterey County Health Department strongly opposes use of bulk hauled water for permanent potable use, yet recognizes the need for flexibility in an emergency.

Comment letters received on this item by August 15, 2000 are provided in Exhibit 9. This exhibit includes a memorandum describing action by the Carmel River Advisory Committee (CRAC) at its August 9, 2000 meeting. The CRAC opposes passage of Ordinance No. 96 for the reasons listed. It is notable that some of the CRAC's concerns are addressed by the ordinance text changes recommended by staff. Also, staff anticipates that implementation guidelines and an information package to guide staff and applicants will be developed if Ordinance No. 96 is adopted. This information will spell out the specific process to be followed and information needed, depending on the location of the water distribution system and whether the intended use is potable or subpotable, or a mobile water distribution system.

Exhibit 9 also includes a letter from the City of Sand City and an e-mail from John Diesel opposing the ordinance. The Sand City letter expresses concerns about undue complication to applicants, regulatory redundancy, "micro-management" by MPWMD that is the purview of member jurisdictions, and the need for MPWMD to focus its efforts on water supply solutions.

Letters received after August 15 have been forwarded to the Board, and are available for review at the District office.

The increasing importance of water rights information is exemplified by a recent notice from the SWRCB (Exhibit 10) that was mailed to county supervisors and other officials throughout California. The memorandum states the need to notify applicants about adequate water rights and environmental information, specifically for "any grading permit application for ponds and reservoirs, or with any building permit application that includes a private water supply" [italics added]. This notice could potentially trigger greater expense for applicants to demonstrate water rights, regardless of the outcome of Ordinance No. 96.

Recommended Permit Fee Changes

Whether or not Ordinance No. 96 is approved, staff recommends that Rule 60, Permit Fees, be changed to reflect actual, current permit application processing costs. Current fees reflect staff rates of $30 per hour, which is less than half of the rate charged by other entities, such as the Monterey County Health Department ($85/hr and more), for similar field inspections, CEQA processing and other technical data evaluations. Staff recommends that the Board consider a comprehensive review of Rule 60 at a future meeting.

IMPACT TO RESOURCES: As described above and in Exhibits 4, 6 and 7, passage of Ordinance No. 96 as written could have a significant effect on existing MPWMD staff and Board workload, and would require out-sourcing, hiring new staff, or reduced efforts for other programs. It is notable that the FY 2000-2001 budget does not include funds to implement Ordinance No. 96. Staff believes the modified version of Ordinance No. 96 recommended by staff is achievable within the existing workload and budget.