EXHIBIT 2
10/20/00 Exhibit 2

ELEMENTS OF DRAFT-4 OF ORDINANCE NO. 96
Assumes Text Variations A and C are Selected
October 26, 2000

1. Limited Area for Regulation of Single-Connection Systems (assumes Variation C)

Section Four, Rule 20-C (page 7 of ordinance) states that a water distribution system permit is not needed for single-connection systems unless the system 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 called the "Seaside coastal subareas"). This text would be changed to include the Carmel Valley upland area (including the Cachagua area within the District) if Variation D is selected.

The Implementation Guidelines will define the Carmel Valley and Seaside areas, describe available large-scale maps and other databases at the District office showing these areas, and advise applicants how they can determine whether or not they are within the subject area. The District currently coordinates closely with the Monterey County Health Department regarding which well construction permittees must also apply for a District water distribution system permit.

Note that single-connection systems are defined differently than in previous versions (see Section Three of ordinance). A single-connection system refers to one or more buildings or other structures on a single parcel with one Assessors Parcel Number. Examples include a caretaker's unit or barn on the property in addition to the primary home. The single-connection definition no longer includes the situation with two or more connections on two or more adjacent parcels if the parcels were under common ownership.

2. Create and Refer to Implementation Guidelines for Water Distribution Systems

Text throughout the ordinance refers to Implementation Guidelines for Water Distribution Systems, which will be available as a separate document that will function in tandem with the ordinance. The Implementation Guidelines will be finalized upon enactment of the ordinance and will be approved by the Board at a future meeting. Reference to the Implementation Guidelines replaces previous text that vaguely described procedures or relied solely on the discretion of the General Manager. A Conceptual Outline of Implementation Guidelines is provided as Exhibit 3. The final Implementation Guidelines would serve as a detailed "road map" for the permit process, and include worksheets, application forms, etc.

3. Provide Justification and Rationale

An additional Finding is added to explain why the ordinance is justified, with emphasis on the need to protect the Carmel River public trust resources while respecting the historic agricultural nature of the Carmel Valley.

4. Expand Definitions Section

Section Three (pages 3-6 of ordinance) now includes several new definitions. The final ordinance text may underline terms that are defined in Section Three.

5. Create New Exemption Section

New text in Section Four, Rule 20-A and Rule 20-C (pages 6 and 7 of ordinance) describe exemptions to the requirement for a permit. These include:

6. Clarify Replacement Well Exemption

As noted above, Section Four, Rule 20-C (page 7) states that an MPWMD water distribution system permit is not needed to refurbish, replace or reactivate an existing registered well, with the understanding that the property owner still has the separate obligation to comply with other laws such as SWRCB water rights regulations. The terms "refurbish, replace and reactivate" are defined in Section Three. Also, the text clarifies that the MPWMD permit is required to use a water well (and other distribution system components), not simply to construct the well.

7. Clarify Cut-off Dates for Projects in Progress

Section Four, Rule 20-A (page 6 of ordinance) clarifies cut-off dates for systems in progress to be "grandfathered" under the ordinance. December 1, 2000 is the recommended date before which single connection systems served by a well must have with a valid well construction permit from the Monterey County Health Department. June 1, 2001 is the recommended date before which a well must be made active (i.e., constructed, metered, inspected by MPWMD and approved). The term "active well" is defined in Section Three. The previous reference to reporting water use was deleted because all registered wells in the July 2000-June 2001 period will receive well reporting forms in July 2001.
 

8. Avoid Catch 22 for Applicants

Text in Section Five, Rule 21-A(3) (page 8 of ordinance) was amended to avoid a "Catch 22" situation for applicants who cannot provide proof of land use approvals because some agencies, such as Monterey County and the California Coastal Commission, require proof of adequate water before accepting an application. Note that Rule 22-D-3 on page 16 sets a mandatory condition on the District permit, where the applicant must show jurisdiction or other agency approval prior to use or enjoyment of the District permit. Note that text in Rule 22-B on page 9 was amended to be consistent with existing water permit regulations, as described on August 21, 2000.
 

9. Proof of Water Rights Required in Application (assumes Variation A)

The text in Section Five, Rule 21-A(4) on page 8 of the ordinance describes how all applicants must describe the type of water right claimed, and provide verification to support the claim as part of the application. The choices will include: riparian, pre-1914, SWRCB appropriative permit, SWRCB domestic registration, overlying use, or other. A claim of riparian rights will not be accepted for systems that serve two or more connections across property lines as that is an appropriative use. This rule is reflected in the conceptual Implementation Guidelines worksheets in Exhibit 3. Notably, applications for single-connection systems that overlie percolating groundwater (e.g., non-alluvial areas such as the Carmel Valley upland and Seaside coastal areas) need only provide a deed showing ownership of the property because California law recognizes that water rights run with the land for reasonable and beneficial uses. This section would be changed to exempt single-connection, residential situations if Variation B is selected by the Board.
 

As described in Section Six, Rule 22-A (pages 10 and 11 of ordinance), additional information may be required by the Board or hearing officer if a controversy is determined to exist at the public hearing. In that case, the Board or hearing officer would define what information is needed and continue the hearing until the required information is provided by the applicant. Hearing officer determinations can be appealed to the Board pursuant to existing rules (Rule 70).
 

10. Reorganize and Clarify Application Approval Criteria and Process

Section Six, Rule 22 describing action on applications (pages 10-16 of ordinance) was reorganized to clarify the approval process. Previous Rules 22-B and 22-D were combined to form a new Rule 22-C that defines "Minimum Standards for Approval." The Required Findings was moved as the new Rule 22-B. A new section on "Mandatory Conditions of Approval" was added as the new Rule 22-D (pages 14 and 15); these reflect standard conditions already imposed on water distribution system permits. Rule 22-E on amendments to the permit remains as before.
 

The minimum standard relating to causing or increasing an existing overdraft (Rule 22-C(4) on page 14) adds the words, "...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.
 

11. Board Hears Only Multiple-Connection Systems

Text in Section Six, Rule 22-A (pages 10-12 of ordinance) was changed to describe how the General Manager (or a staff designee), not the Board, will serve as the hearing officer for all single-connection permits. This change is recommended to reduce Board workload and enable the Board to focus on larger systems. The applicant has the right to appeal the hearing officer's decision to the full Board pursuant to existing rules.
 

12. Change Rules 54 and 57 Language on Well Metering and Reporting

Section Eight is expanded to include changes to Rules 54 and 57 (pages 17 and 18 of ordinance). The intent of these changes is to clarify that any new well as of December 1, 2000, regardless of parcel size, location and annual production, must be metered and report to the District. A confusing reference to a variance is deleted for new wells.
 

13. Change Fee Structure for Permit and Appeals

Section Nine contains new text that amends Rules 60 and 63 to change the current fee structure to reflect current costs. Rule 60-1 (page 18 of ordinance) provides simplified structure for new water distribution system permits. Staff recommends an application fee of $1,400, plus $70 per hour for any staff time over 20 hours. This recommendation is based on the fact that an application takes at least 20 hours to process and the actual average cost of staff time is $70 per hour, as described on August 21, 2000. This recommendation is consistent with other agencies, such as the Monterey County Health Department, which charges $85 per hour and higher for services similar to those performed by District staff in administering the ordinance. A two-tiered fee structure of $750 and $1,400 is recommended amendments to single and multiple-connection systems, respectively. There would also be a $70 per hour charge for more than 20 hours of staff time.
 

The relatively low fees in Rule 63, Appeals (page 19 of ordinance), would not be changed except for the additional costs for complex appeals. These would change from $30 per hour for staff time over 20 hours to $70 per hour for staff time over 10 hours. This structure is suggested to facilitate low-cost appeal fees on simple projects.
 

14. Add Review Dates

Text is added to Section Eleven, Effective Date and Sunset (page 19 of ordinance) to state, "This ordinance shall be reviewed on or before December 31, 2005, and each five years thereafter."
 

15. Minor Corrections and Clarifications

Minor text changes are made throughout the ordinance to correct errors and clarify text.
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