1. DISCUSS ACTION TO BE TAKEN ON WATER SUPPLY PROJECT INITIATIVE
C. CONSIDER PHASE 2 SCOPE OF WORK FOR WATER SUPPLY PROJECT EIR AND AMENDMENT TO CONTRACT WITH JONES & STOKES ASSOCIATES
Meeting
Date: March 27, 2003 Budgeted: $714,000 total for FY 02-03
Program/Line
Item No.: 1-5-2
Staff
Contact: Henrietta
Stern Cost
Estimate: $662,500-$1,361,204
General Counsel Approval:
Staff note not reviewed
Committee Recommendation:
Staff note not reviewed by committee
CEQA Compliance:
EIR in progress
SUMMARY: The Board will consider whether or not to authorize the General Manager to execute a contract amendment with Jones & Stokes Associates (JSA) and its primary subcontractor, Camp Dresser McKee (CDM), to carry out Phase 2 tasks associated with preparation of a Draft Environmental Impact Report (DEIR) for a long-term water supply project for the Monterey Peninsula in compliance with the California Environmental Quality Act (CEQA). The scope of work, schedule and cost estimates are provided as Exhibits 1-C, D and E, respectively. Six core tasks and five optional tasks are included in the Phase 2 scope of work.
Depending on which alternatives and options are selected for project level evaluation, the cost could range from $662,500 to $1,361,204 for Phase 2 work, and the time frame could range from seven to 13 months to complete the Draft EIR. In the future, the Board will consider Phase 3, preparation of the Final EIR, based on the volume and content of comments received on the Draft EIR. The total time frame to complete the Final EIR is estimated at 12 to 18 months, depending on the optional tasks selected, and assuming a reasonable volume of comments received on the Draft EIR.
Consistent with the policy guidance provided in Item 1B, the Board will provide direction on the following questions and issues:
Regarding Question #1, the Board will determine which one of the following alternatives will be evaluated at a project level of detail:
Alternative 1: Large desalination project at Sand City combined with a small ASR Project.
Alternative 2: Large ASR combined with medium desalination plant at Sand City.
Alternative 3: Desalination project at Sand City sized to produce up to 8,400 AFY.
Alternative 4: Carmel River Dam and Reservoir Project as proposed by Cal-Am in 1996-97.
Alternative 5: Coastal Water Project as proposed by Cal-Am in February 2003.
Please see the “Discussion” section for a more detailed description of these alternatives.
The scope of work also includes evaluation of two potential outcomes of the “No Project” alternative. These include: (1) Cal-Am production of 15,285 AFY, the situation that existed when the Notice of Preparation (NOP) was issued in June 2002; and (2) the scenario where Cal-Am production from the Carmel River is constrained to its legal rights (3,376 AFY) and no new project is built to replace unlawful diversions.
Alternatives that are not evaluated at the project level will be evaluated at the program level; wastewater reclamation, off-stream storage and storm water detention would also be evaluated. Other alternatives will be summarized in the EIR alternatives chapter.
The EIR will discuss water supply facilities needed to provide the three increments of water production previously directed by the Board to be assessed (see the “Discussion” section below). The level of detail of this assessment is based on policy direction from Item 1B. For example, there could be project level evaluation of all three options, which is the assumption in the base scope of work shown in Exhibit 1-C. Alternatively, the project level evaluation could focus on only the first production increment while other production increments could be evaluated at the program level of detail.
The Board should carefully review the assumptions outlined in JSA Task 2-2 (Exhibit 1-C, pages 3-5 of JSA March 17, 2003 scope). These describe the various analyses that will or will not be performed, including pipeline routes, biology surveys, brine dispersion modeling, Seaside Basin impacts, computer modeling, fisheries assessment, construction effects, growth, etc. Please refer to the “Background” and “Discussion” sections below for more detailed information.
RECOMMENDED ACTION: District staff recommends that the Board take the following actions:
Ø Action
#1: Direct staff and consultants as to which one alternative below should be
evaluated at a project level of detail, as described in the JSA scope of work,
and consistent with policy direction on production goals from Item 1B. The others would be evaluated at a program
level of detail along with the No Project alternative. See the “Discussion” section for more
information on:
Alternative 1: Large desalination project at Sand City combined with a small ASR Project.
Alternative 2: Large ASR combined with medium desalination plant at Sand City.
Alternative 3: Desalination project at Sand City sized to produce up to 8,400 AFY.
Alternative 4: Carmel River Dam and Reservoir Project as proposed by Cal-Am in 1996-97.
Alternative 5: Coastal Water Project as proposed by Cal-Am in February 2003.
Ø Action #2: Provide direction on whether optional tasks should be performed in addition to the base tasks. The optional tasks include:
Optional Task 2-A: Project level evaluation of Carmel River Dam and Reservoir Project
Optional Task 2-B: Project level evaluation of Moss Landing desalination plant
Optional Task 2-C: Project level evaluation of Sand City desalination plant only
Optional Task 2-D: Detailed hydrogeologic investigations of horizontal directional drilling (HDD) wells (“slant drilling”) in Sand City to confirm technical feasibility (CDM lead)
Optional Task 2-E: More detailed cost estimates for Carmel River Dam and Moss Landing desalination project as described in Final Plan B report (CDM lead).
Optional Task 2-A should not be selected given Cal-Am’s recent action on the Coastal Water Project as the project proposal to replace the Carmel River Dam. This task would add 4-6 months to the EIR schedule and would cost about $268,000 (excluding fee on subcontractors).
Optional Task 2-B should reflect the policy direction on lead agency issues provided earlier in Item 1-B. Optional Task 2-B should be selected if the Board wishes to be lead agency on the CWP and wishes to have the CWP evaluated in one comprehensive EIR document. This task would add 4-6 months to the EIR schedule and would cost about $210,000 (excluding fee on subcontractors).
Optional Task 2-C should be selected if Alternative #3 above is selected as the proposed project for detailed analysis in the EIR. It would replace the desalination/ASR combination project shown in the JSA base scope of work, and be roughly $131,000 less expensive.
Optional Task 2-D is described in the CDM scope (Exhibit 1-C) and entails detailed field work, test wells and hydrogeologic analysis for HDD wells at the Sand City desalination site. These types of wells are needed because standard radial wells facilitate a project size of only 6,000 AFY. This option would add up to $400,000 to $500,000 to the Phase 2 cost and would take about one year to complete. The EIR will evaluate environmental impacts assuming this technology is feasible and will be carried out. The HDD is work is not required to be completed prior to the EIR, and could run as a concurrent engineering evaluation. The main value of this work is that project feasibility or lack of feasibility would be confirmed prior to an election on the local desalination project. This information would increase reliability of cost estimates used in the MPWMD Engineer’s Report, which is required for a bond measure. If the cost and feasibility of a project is uncertain going into an election, much higher contingency amounts would be needed in the bond measure to ensure adequate capital is raised; doubts about the project could also be raised if feasibility is not confirmed prior to an election.
Optional Task 2-E should be approved if a detailed “apples-to-apples” comparison of a local desalination project as compared to a Moss Landing plant or the Carmel River Dam and Reservoir Project is desired. The JSA base scope of work already includes some updating of cost information for these two projects. This cost information is not required by CEQA but is of public interest. JSA costs would be about $20,000 and CDM costs have yet to be developed. The CDM cost would greatly depend on the types of engineering analysis desired.
Ø Action
#3: Clarify whether the JSA scope should
include a more detailed assessment of the feasibility of brine discharge using
the Monterey Regional Water Pollution Control Agency (MRWPCA) outfall.
The current scope includes investigating brine disposal at the MRWPCA outfall based on existing information. Consultation is ongoing with MRWPCA, which has expressed concerns about this concept, and may require extensive testing and analysis in order to approve use of its outfall. Costs are not certain, pending feedback from MRWPCA. Staff suggests that this particular issue be deferred until April or May 2003, to allow the basic EIR tasks to proceed.
Ø Action #4: Based on the guidance above and from Item 1B, authorize staff to amend JSA contract to perform the tasks necessary to evaluate the selected alternatives and optional tasks, if any, based on the tasks, cost and time line information provided in Exhibits 1-C through E. Consider retaining other consultants for specialized work to assist staff to meet deadlines.
BACKGROUND: At its March 18, 2002 meeting, the District Board authorized retention of JSA and its primary subcontractor CDM to carry out Phase 1 tasks associated with preparation of a long-term water project EIR for a not-to-exceed amount of $723,775. The primary Phase 1 goal is to define the water supply alternatives and scope of study of the Draft EIR. To this end, JSA met with representatives from the U.S. Army at Fort Ord regarding a possible joint EIR/EIS, participated in several Board workshops and meetings to obtain guidance on the proposed EIR scope, prepared the Notice of Preparation (NOP) for the EIR in June 2002, led public scoping hearings along with District staff, reviewed all comments received, prepared a Scoping Report, and interacted with Board members at strategic planning sessions and regular Board meetings regarding policy issues raised by the comments received.
At its August 29, 2002 meeting, the Board chose not to approve the Phase 2 scope of work that was proposed at that time. Instead, the Board concurred that time was needed to obtain the CPUC Plan B engineering data that had been withheld (and was subsequently provided), complete the Phase 1 engineering report, review and assess the Plan B Final Report released in August 2002, confirm the U.S. Army role, resolve important questions about Cal-Am’s plans for the dam versus Plan B, and discuss lead agency status with the CPUC. In addition, the Board directed that Task 2.0, preparation of a Carmel River Flow Threshold Report, be carried out with available Phase 1 funds. The Board approved a scope of work for the Threshold Report at the September 16, 2002 meeting. An update on the above activities was provided to the Board at its November 14, 2002 strategic planning session.
In Fall 2002 through January 2003, meetings were been held with the U.S. Army, the CPUC and many local jurisdictions about the EIR process and water supply facility locations. At its January 30, 2003 meeting, the MPWMD Board indicated its desire to pursue a local desalination project producing of up to 11,000 AFY combined with a small (less than 1,000 AFY) ASR project.
In December 2002 and February 2003, CDM submitted interim drafts of the Phase 1 Engineering Report for internal staff detailed review; a formal draft was prepared for presentation on March 27, 2003 (see Item 1A). Two versions of the Carmel River Flow Threshold Report were received at the January 30 and February 27, 2003 Board meetings; a March 2003 version with minor corrections is currently undergoing 60-day review, with comments due on May 19, 2003.
At its January 30, 2003 meeting, the Board directed that a Phase 2 DEIR scope of work should focus on project-level evaluation of a large desalination project in the Sand City area, producing up to 11,000 acre-feet per year (AFY), combined with a small Seaside Basin aquifer storage and recovery (ASR) project, producing less than 1,000 AFY. It is staff’s recent understanding, to be confirmed on March 27, 2003, that the Board may wish to narrow its focus to project-level evaluation of only a Sand City area desalination plant that would produce 8,409 AF per year to lawfully meet the existing 15,285 AFY current Cal-Am production, assuming 3,500 AFY from the Seaside Basin and 3,376 AFY recognized rights from the Carmel River.
On February 11, 2003, Cal-Am announced its plans to construct a 9,400 AFY Moss Landing desalination plant combined with a small (1,300 AFY) Seaside Basin ASR project. Cal-Am calls this proposal the Coastal Water Project (CWP), formerly known as “Plan B”. Cal-Am requested that its application to the CPUC be amended to replace the proposed Carmel River Dam with the Coastal Water Project and that the CPUC be lead agency on the EIR for the project. A similar request to the MPWMD has not been made to date; the pending water distribution system application to MPWMD for the Carmel River Dam and Reservoir Project is still active. A March 12, 2003 ruling by the CPUC directs Cal-Am by April 1, 2003 to identify agencies with a regulatory interest in the CWP, address rate-making issues associated with the dam proposal and describe how the dam application and extensive EIR information prepared by MPWMD will “wind down” yet not be lost. Agencies have until April 11, 2003 to respond to these issues.
In February 2003, the MPWMD Chairperson directed that revised scope information be delayed until late March to allow consultation with Cal-Am regarding its plans and the potential for a coordinated effort for a water supply project. Given Cal-Am’s commitment to the CWP and increasing interest by Board leadership in a local desalination alternative, staff was directed to provide as much information as possible about a local desalination option given the limited remaining funds in the Phase 1 budget.
DISCUSSION: As shown in the proposed scope of work and cost
estimate dated March 17, 2003 (Exhibit 1-C),
the Phase 2 work effort is comprised of a core
group of six tasks, which include:
Task 2-1: Finalize project alternatives
Task 2-2: Prepare Administrative Draft EIR
Task 2-3: Prepare Draft EIR
Task 2-4: Conduct hearings on Draft EIR
Task 2-5: Attend Board meetings and workshops
Task 2-6: Attend quarterly update meetings
The five alternatives for Board consideration of project level of detail include:
Alternative 1: Large desalination project at Sand City combined with a small ASR Project as described in CDM Phase 1 Engineering Report. Desalination capacity is sized to produce up to 11,000 AFY. ASR capacity is sized to produce an estimated 700 AFY, or more, depending on confirmation of production using existing Cal-Am facilities. Three levels of total Cal-Am production up to 18,941 AFY will be studied. Supply to be made lawful is up to 12,065 AFY, which includes an increment of growth up to 1,300 AF. Components such as reclamation and storm water reuse would also be included.
Alternative 2: Large ASR combined with medium desalination plant at Sand City as described in CDM Phase 1 Engineering Report. Desalination capacity is sized to produce up to 8,500 AFY. ASR capacity is sized to produce up to 3,200 AFY. Three levels of total Cal-Am production up to 18,941 AFY will be studied. Supply to be made lawful is up to 12,065 AFY, which includes an increment of growth up to 1,300 AF. Components such as reclamation and storm water reuse would also be included.
Alternative 3: Desalination project at Sand City sized to produce up to 8,409 AFY in order to legalize 8,409 AFY supply associated with existing total Cal-Am production of 15,285 AFY. This evaluation includes the environmental effects of various means to collect seawater and dispose of brine (radial wells, directional wells and existing outfalls).
Alternative 4: Carmel River Dam and Reservoir Project as proposed by Cal-Am in 1996, as refined in the completed application to MPWMD and CPUC dated March 1997. Total Cal-Am production goal was defined as 17,641 AFY (current MPWMD Water Allocation EIR limit); supply to be made lawful is estimated at 10,750 AFY (rounded).
Alternative 5: Coastal Water Project as proposed by Cal-Am in amended application to CPUC dated February 2003. Project would provide 10,730 AFY (10,750 AFY rounded), thereby supporting a total Cal-Am production goal of 17,641 AFY.
The production values noted above assume 3,376 AFY Cal-Am recognized legal rights from the Carmel River, and a conservatively low estimate of 3,500 AFY long-term production from the Seaside Basin coastal subareas. The Phase 2 scope of work includes evaluation of water facilities needed to meet three increments of total Cal-Am system production approved by the Board in 2002 and described in the June 2002 EIR Notice of Preparation. Previously, these three increments were referred to as “Steps 1, 2 and 3.” The three increments include:
(1) existing demand constrained by SWRCB Order 95-10 to 15,285 AFY Cal-Am production;
(2) full use of existing MPWMD Allocation Program EIR limit of 17,641 AFY Cal-Am production; and
(3) an additional 1,300 AF increment of growth totaling 18,941 AFY Cal-Am production.
The March 17, 2003 cost estimate for the six core tasks, assuming evaluation of local desalination plus a small ASR project at a project level of detail totals $793,600, including JSA’s fees on subcontractors (see Table 1 of Exhibit 1-E). Up to another $567,600 is associated with the optional tasks. This does not include Optional Task 2-C, which would reduce costs by about $131,000 (See Table 2 of Exhibit 1-E).
The anticipated schedule envisions completion of the Draft EIR in early October 2003 and certification of a Final EIR in March 2004, assuming the many assumptions itemized in the scope of work (Exhibit 1-C) are met. In order to have an election in early November 2004, the Final EIR should be certified by April 2004 so there is room for some “slippage.”
Meeting the election deadline would likely not be feasible if Optional Tasks 2-A, B and D are assumed to be completed prior to completion of the EIR. Optional Task 2-D, HDD Drilling Investigation, can be performed concurrently (on a parallel track) to the EIR.
Assumptions: The Board should carefully review the content and schedule assumptions provided in Exhibit 1-C (especially JSA Tasks 2-1 through 2-4) as successful completion of the DEIR in a timely manner depends on these assumptions holding true. The Board may need to schedule special meetings in order to facilitate the schedule. Due to very tight MPWMD review deadlines, other staff activities may need to be deferred.
The scope of work also assumes significant MPWMD staff effort such as CVSIM computer modeling and the fisheries assessment, which could affect performance of other staff tasks in a timely manner. Additional specialists (such as a fishery biologist) may be needed to help staff perform the detailed fisheries analysis in time to meet the assumed deadlines. If these actions, deliverables and other components of the assumptions do not occur, District staff will advise the Board at the earliest possible opportunity to discuss ramifications and options for action. It is important to note that completion of the Final EIR is highly dependent on the volume and substance of agency and public comments on the Draft EIR.
What the JSA Scope Does Not Include: The JSA scope is focused on providing a legally defensible EIR in the time frame needed to facilitate an MPWMD authorizing election in November 2004. As highlighted in the March 17, 2003 JSA cover letter and scope of work (Exhibit 1-C), it is important to recognize that the March 17, 2003 Phase 2 base scope of work does not include the following:
Ø federal NEPA compliance; this is an EIR only, though many components of an EIS are included;
Ø assessment of water rights in support of current District Petitions for Change before the SWRCB;
Ø detailed field-based feasibility analysis of HDD (“slant drilling”); a literature review and an assessment based on existing information are already included in the scope;
Ø analysis of right-of-way costs and related cost information needed for an MPWMD Engineer’s Report prior to setting an election;
Ø assessment of project impacts on Cal-Am rates (assumes MPWMD staff or other consultant)
Ø CVSIM computer modeling (assumes MPWMD staff);
Ø fisheries analysis (assumes MPWMD staff or other consultant).
The right-of-way costs and project impact to rate payers is not required in an EIR, but is of great interest to the community and expected to be included in project election financial materials. The Board may wish to retain separate consultants to address these issues either immediately or once the Administrative Draft or public Draft EIR is completed and comments from agencies are received. The latter choice is suggested as there will be a better information base for the consultants to use.
IMPACT ON RESOURCES: Depending on the options selected, approval of the Phase 2 scope by the Board would increase the current contract limit of $723,775 by another $662,500 up to $1,361,204. The Phase 1 budget is nearly used up, and the Phase 2 work would be reflected primarily in the Fiscal Year 2003-2004 budget, which is being prepared. Funds are available in current reserves for the EIR effort, but could use up money that might be available for other future projects and strategic initiatives. The current amount of uncommitted funds in the MPWMD capital projects reserve is about $1.7 million.
An EIR for a District-sponsored project that is not associated with an application by Cal-Am would not require reimbursement by Cal-Am. The level of reimbursement by Cal-Am for the Phase 2 scope depends on near-term decisions to be made by Cal-Am on its current application before the District. Currently, reimbursement by Cal-Am ranges from 40% to 75%, depending on the specific line item (see Project Expenditures, Goal 1, Program 1-5-2 in the FY 2002-2003 adopted budget). If the District serves as lead agency for the CWP, Cal-Am would be required to reimburse 100% of the costs associated with analyzing the CWP and alternatives to it. This issue is yet to be resolved.
As noted above, the EIR relies on staff input and could have a significant effect on staff resources during certain periods of time.
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