1. Consider Request to Transfer Water Use Credits from Robles Del Rio Lodge, LLC to Monterey County
ACTION: This item is continued from the December 11, 2000 Board meeting. Public comment will be received on this item.

SUMMARY: Robles del Rio Lodge, LLC, successor in interest to Ron Gurries Family partnership in the ownership of a motel in Carmel Valley, has applied under District Rule 28-B to transfer 7.827 acre-feet of water use credits from the property to the County of Monterey. In addition to the water use credits that are proposed for transfer, the District will retain 1.381 acre-feet of the annual water use capacity that was calculated for the site to meet its long-term water conservation goals. The water use credit was established in June 1998, following a permanent disconnection from the California-American Water Company system. The reduction in use occurred on May 22, 1998, and is valid until May 22, 2003, unless extended for an additional 60 months at that time. The motel and related facilities continue to operate on the site utilizing a private water system.

RECOMMENDATION: The application meets the specific requirements of Rule 28-B to qualify for a property-to-jurisdiction transfer. The Monterey County Board of Supervisors took action to approve this transfer request by adoption of Resolution No. 00.373 on October 3, 2000.

Staff recommends that if the transfer is approved, it be conditioned upon the property owner's consent to allow the District to record a deed restriction (Exhibit 1) confirming that the transfer of water credit is irrevocable. The deed restriction will also acknowledge that any intensification of water use through a water distribution system on the subject property, as defined by District Rule 11, will require prior written authorization from the County of Monterey and prior written authorization and permits from the Monterey Peninsula Water Management District, in accord with then applicable provisions of law.

Staff further recommends that the following condition be attached to the approval of the Robles del Rio water credit transfer request: As a condition of the issuance of a water permit from the District to a recipient of water credit originating from the Robles del Rio Water Use Credit transfer, said recipient shall by legal declaration or sworn affidavit disclose the consideration paid for the portion of the Robles del Rio water credit they receive from Monterey County's reallocation of the Robles del Rio water credit. This condition shall be binding on all successors in interest to recipient property.

This condition was provided by the applicant's attorney in response to the Board's request for information about the purchase price of the water, and the condition is acceptable to the applicant. The applicant has also agreed to record a notice of the condition on all properties identified in Exhibit B of the County's Resolution No. 00.373 accepting the water credit transfer from Robles del Rio. By recording notice on the title, current and future property owners will be advised of the condition.

BACKGROUND: The District Board considered the proposed Robles del Rio Lodge water credit transfer request at its June 29, 2000 meeting. At that time, the Board received public comment of the proposed transfer, closed the public hearing, and continued its consideration of the transfer request until after the Monterey County Board of Supervisors had granted final approval of the transfer from Robles del Rio Lodge to Monterey County. The Board denied the transfer request on October 26, 2000. At the November 20, 2000 meeting, the Board, following approval of a motion to reconsider its action on October 26, 2000, voted to nullify its previous decision to deny the water use credit transfer request. The public hearing was reopened and continued to December 11, 2000 and subsequently to January 25, 2001.

DISCUSSION/ANALYSIS: At the November 20, 2000 meeting, a number of questions were addressed to the applicant's attorney, John Bridges, regarding disclosure of the purchase price of the transferred water. At that time, Mr. Bridges indicated that he could not disclose the price because it would be a breach of contract. Mr. Bridges indicated that he would consult with his client and potential buyers of the water use credits to see if an acceptable procedure for disclosure could be developed. Subsequent to the November 20, 2000 meeting, Mr. Bridges contacted Director Lindstrom regarding his answer to one of the questions Director Lindstrom had posed. A record of this ex parte communication was provided by Director Lindstrom on November 21, 2000. On January 10, 2001, Mr. Bridges submitted condition language that is responsive to the Board's request for disclosure of the consideration paid for water credits.

PRIOR BOARD ACTION: The Board considered the Robles del Rio Lodge water use credit transfer request at its meetings on June 29, October 26, and November 20, 2000. This item was continued from the December 15, 2000 Board meeting.