ITEM:            PUBLIC HEARING

 

6.         CONSIDER FIRST READING OF ORDINANCE NO. 109—REVISING RULE 23.5 AND ADOPTING ADDITIONAL PROVISIONS TO FACILITATE THE FINANCING AND EXPANSION OF THE CAWD/PBCSD RECYCLED WATER RECLAMATION PROJECT

 

Meeting Date:           September 15, 2003               Budgeted: N/A

Program/Line Item No.: N/A

Staff Contact: David Laredo                         Cost Estimate: N/A

 

General Counsel Approval: Yes      

Committee Recommendation:  The Administrative Committee reviewed this item on September 10, 2003. 

CEQA Compliance: Reliance on Prior Certified EIR and CEQA Materials- Guideline § 15162

 

SUMMARY:  A Financing Plan to facilitate construction of the Carmel Area Wastewater District (CAWD)/Pebble Beach Community Services District (PBCSD) Wastewater Reclamation Project was originally approved by the MPWMD Board in 1989 by Ordinance No. 39.  This financing plan was followed by agreements among MPWMD, CAWD, PBCSD, the Pebble Beach Company, and other recycled water users to finance, construct and operate, and sell recycled water.  Problems have arisen relating to the quality of recycled water available for its intended use and inadequate quantities of recycled water.  As a consequence, a significant amount of potable water has been needed each year to supplement or replace recycled water.  Plans to make physical improvements to the existing project have been developed.  The purpose of the proposed ordinance is to facilitate the financing of the contemplated improvements to the existing project. 

 

To fund project improvements, the Pebble Beach Company has proposed a financing plan whereby water entitlements held by the Pebble Beach Company in accordance with MPWMD Ordinance No. 39 would be made available to residential properties throughout Del Monte Forest, rather than only to properties owned by the Pebble Beach Company.  Ordinance No. 109, attached as Exhibit 6-A, would change MPWMD Rule 23.5 to re-define benefited properties and provide a framework for the ancillary agreements for financing, operation and maintenance, and sale of recycled water.

 

Attached as Exhibit 6-B is a letter dated September 9, 2003 that was submitted by the Independent Reclaimed Water Users Group (IRWUG) regarding implementation of improvements to the water reclamation project.  Attached as Exhibit 6-C is a letter from Lloyd Lowrey, Jr, written on behalf of the IRWUG, commenting on Draft Ordinance No. 109.

 

RECOMMENDATION:      Staff recommends that the Board take the following actions:

 

1.                  Direct staff and counsel to prepare findings in support of General Counsel’s determination that the criteria of CEQA Guideline Section 15162 enable the Board to rely on the prior EIR certified for the original recycled wastewater project, and other documents as listed in the discussion below.  The Board shall review and approve those findings prior to second reading of Ordinance No. 109.

 

 

2.               Consider approval of the first reading of Ordinance No. 109 shown in Exhibit 6-A.  If the first reading is approved, the second reading should occur at the October 20, 2003 Board meeting.  If adopted at that meeting, the ordinance would become effective on November 19, 2003.

 

BACKGROUND:  The CAWD/PBCSD Wastewater Reclamation Project began operation in August 1994.  Since operation began, the recycled water users have experienced apparent stress-related symptoms in some of their turf areas, primarily the greens, due to the combination of high levels of sodium in the recycled water with low-salt-tolerant grass species used in those portions of the golf courses.  As a result, significant quantities of potable water have been needed to meet the recycled water users’ water quality needs.  In addition, potable water has been required to provide sufficient quantity of irrigation water during periods when demand for irrigation water exceeded the available supply of recycled water.

 

To address the problems of recycled water quantity and quality, all parties involved in the project have been working since 1995 to develop solutions.  The parties now all agree that the best, most cost-effective solution is to (1) retrofit Forest Lake Reservoir in Del Monte Forest, formerly owned by California-American Water Co. but taken out of service several years ago, to provide the additional recycled water storage capacity needed to meet the water quantity requirements, and (2) add additional treatment facilities at the CAWD treatment plant to produce final treated water quality that meets the recycled water users’ needs.

 

In order to fund these improvements, the Pebble Beach Company has proposed a financing plan whereby water entitlements held by the Pebble Beach Company in accordance with MPWMD Ordinance No. 39 and current project agreements would be made available to residential properties throughout Del Monte Forest, rather than only to properties owned by the Pebble Beach Company.  Ordinance No. 109 would change MPWMD Rule 23.5 to re-define benefited properties and provide a framework for the ancillary agreements for financing, operation and maintenance, and sale of recycled water.

 

District General Counsel David Laredo, Special Counsel Carl Nelson, and representatives of CAWD, PBCSD, the Pebble Beach Company, and the recycled water users have been in communication during the drafting of Ordinance No. 109.  Carl P. Nelson prepared the draft ordinance, attached as Exhibit 6-A.  The Administrative Committee reviewed an earlier draft of this ordinance at its meeting of September 10, 2003.  The Committee focused its attention on the District’s role as fiscal intermediary for the project, and as the issuer of Certificates of Participation (COPs) to facilitate construction of the original project.  The Committee took no action and has not made any recommendation on the proposed ordinance. 

 

CEQA REVIEW: 

 

The following documents have been prepared pursuant to the California Environmental Quality Act (CEQA) relating to the CAWD/PBCSD Project:

 

• Final EIR for CSD/PBCSD Waste Water Reclamation Project certified September 21, 1989 by CAWD (lead agency), including the CSD/PBCSD Waste Water Reclamation Project Draft EIR dated March 1989, the CSD/PBCSD Waste Water Reclamation Project Final EIR dated June 1989, and attached supplemental materials.

·        MPWMD Resolution No. 89-21 adopted on October 3, 1989, certifying MPWMD’s reliance, as responsible agency, on the Final EIR for CSD/PBCSD Waste Water Reclamation Project certified September 21, 1989 by CAWD.

 

·        Final Expanded Initial Study, Phase II – CAWD/PBCSD Wastewater Reclamation Project, dated February 23, 1996 and Negative Declaration adopted in PBCSD Resolution No. 96-04 adopted February 23, 1996.

 

General Counsel has determined that CEQA Guideline 15162 applies to this ordinance, and enables the Board to rely on the prior EIR certified for the original recycled wastewater project and on the other documents listed above. 

 

Guideline 15162 provides a logic tree under which the Board is authorized to determine whether or not the present action (a) would cause a substantial change in the project which will involve new significant environmental effects or a substantial increase in the severity of identified significant effects, or (b) would involve changed circumstances or new information relating to significant new effects of the project or as to the severity of impacts of the project.  The proposed ordinance will support findings under this Guideline, enabling the adoption of Ordinance No. 109 upon existing CEQA documents, as supplemented by the findings to be presented at the second reading. 

 

An advantage of the process set forth in Guideline 15162 is that the board is authorized to rely on the prior EIR without re-circulation, and the standard to review this determination is favorable to the District.  A less favorable standard of review would apply to adoption of a negative declaration.  Use of a negative declaration can occur for later approval of a project that has previously been the subject of a certified EIR, but such a declaration is not well suited to findings the Board will be required to make pursuant to Public Resource Code section 21166.  The current volume of CEB CEQA Practice, 2003 favors reliance on Guideline 15162 as opposed to use of a negative declaration.  Notice shall be provided in accordance with law, and findings supporting this determination shall be reviewed and approved by the Board prior to second reading of the ordinance.

 

The 1989 Final EIR for the CSD/PBCSD Waste Water Reclamation Project, referenced above, examined the project that now exists.  That project consisted of tertiary treatment facilities at the CAWD wastewater treatment plant designed to produce a minimum of 800 AF annually of recycled water suitable for golf course irrigation, a distribution system and storage tank to distribute and store the recycled water to and in Del Monte Forest, irrigation systems on the golf courses and other recycled water users in Del Monte Forest, and financing of the costs of the project through dedication of 380 AF of potable water for development of specific lands in Del Monte Forest in return for the guarantee of the Fiscal Sponsor of all costs of the original project.

 

The 1989 Final EIR analyzed the growth inducing effects, and the resulting environmental effects from such induced growth, from the granting of the water entitlement and associated new development in Del Monte Forest, and were evaluated on the basis of building up to 1000 (plus or minus) new residential units in Del Monte Forest and an incremental amount of commercial development.  Although Ordinance No. 109 would allow a change in the financing plan so that a portion of the residential development can take place at different locations in Del Monte Forest, the maximum of 1000 units previously analyzed will not be exceeded, and the environmental effects evaluated in the Final EIR will not be new, or different, or severely exceed those impacts already identified in the Final EIR. 

MPWMD Resolution No. 89-21, certified reliance on the 1989 Final EIR as to matters within MPWMD’s responsibility and jurisdiction.  The matters within the responsibility and jurisdiction of MPWMD were the consistency of the original project with the goals and objectives of MPWMD for the management and conservation of the water resources of the Monterey Peninsula, and approval and implementation of the financing plan for the original project.

 

The proposal to change the original project is to add components to meet the objectives of the original project.  Proposed facilities will (1) provide advanced treatment at the CAWD tertiary treatment plant; (2) provide additional storage of recycled water at the Forest Lake Reservoir in Del Monte Forest; and (3) provide a plan to finance these facilities.  These changes require discretionary approval under CEQA, but the only responsibility and jurisdiction of MPWMD relates to the changed financing plan.  MPWMD is not the lead agency for the physical improvements to the CAWD plant and the Forest Lake Reservoir.  PBCSD has already approved  a Negative Declaration under CEQA for the Forest Lake Reservoir component (Final Expanded Initial Study, Phase II – CAWD/PBCSD Wastewater Reclamation Project, dated February 23, 1996 and Negative Declaration adopted in PBCSD Resolution No. 96-04 adopted February 23, 1996).  This initial study confirmed that the project as expanded would have no significant growth-inducing or cumulative impacts not already considered.

 

Although circumstances have changed and new information has become available with respect to the Carmel River and its environs, these circumstances and information have no effect on the proposed improvements to the CAWD/PBCSD Wastewater Reclamation Project and do not indicate that the project will have new or different significant environmental effects.  The State Water Resources Control Board has already approved a Water Entitlement of 380 AF (SWRCB Order WR 95-10, footnote 2, and other documentation), and this will not be exceeded.  The change in the financing plan will further lessen the need for potable water for irrigation, thereby reducing demand on the Carmel River System.

 

IMPACT ON STAFF/RESOURCES:  MPWMD’s legal and other expenses associated with development of this ordinance and subsequent agreements for implementation of the project improvements are eligible for reimbursement from the current CAWD/PBCSD Wastewater Reclamation Project.      

 

 

 

 

 

 

 

 

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