ITEM:            PUBLIC HEARINGS

 

2.                  CONSIDER FIRST READING OF ORDINANCE NO. 109—REVISING RULE 23.5 AND ADOPTING ADDITIONAL PROVISIONS TO FACILITATE THE FINANCING AND EXPANSION OF THE CARMEL AREA WASTEWATER DISTRICT (CAWD)/PEBBLE BEACH COMMUNITY SERVICES DISTRICT (PBCSD) RECYCLED WATER PROJECT

A.                 REVIEW CEQA FINDINGS

B.                 REVIEW SUPPLEMENTAL FINANCING AGREEMENT

C.                 REVIEW AGREEMENT FOR SALE OF RECYCLED WATER

D.                REVIEW SUPPLEMENTAL CONSTRUCTION AND OPERATION AGREEMENT

 

Meeting Date:           October 20, 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 and October 14, 2003, but made no formal recommendation. 

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 2-A (1), would change MPWMD Rule 23.5 to re-define benefited properties and provide a framework for the ancillary agreements for financing, construction and operation,  and sale of recycled water.  A red-lined version of this ordinance, attached as Exhibit 2-A (2), shows changes to the proposed ordinance  as compared to a prior draft version dated July 23, 2003.

 

A series of other documents will also be needed to complete the proposed Financing Plan.  These documents are presented in draft form only to enable the Board to understand the context in which Ordinance No. 109 is proposed.  These draft documents include the Supplemental Financing Agreement (Exhibit 2-B (1) and (2)), Supplemental Construction and Operation Agreement (Exhibit 2-C (1) and (2)), and Agreement for Sale of Recycled Water (Exhibit 2-D (1) and (2)).

 

Each agreement is provided in its most current version and in a red-lined verson from July 23, 2003. Each of these agreements is subject to negotiation, review and modification, and are not presented for Board approval at this time.

 

Draft Findings, attached as Exhibit 2-E, support the Board’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.   These findings are presented in draft form, and are also subject to review and modification.  The Board shall review and approve the final set of CEQA findings after it closes the hearing on the second reading of Ordinance No. 109.

 

The State Water Resources Control Board has stated in letters dated March 27, 1998 (Exhibit 2-F), and October 18, 2001 (Exhibit 2-G) that it is acceptable to transfer a maximum of 380 acre-feet per annum of potable water supplies freed up through use of treated wastewater on the Del Monte Forest property for new purposes, provided that diversions from the Carmel River do not exceed 11,285 acre-feet per year plus the quantity of potable water provided to Pebble Beach Company and other sponsors under this entitlement for use on the Del Monte Forest properties. Attached as Exhibit 2-H is a letter dated April 17, 1998 from the District to the Del Monte Forest Property Owners stating that adequate water is available from Pebble Beach Company’s unused water entitlement to serve 316 lots proposed in the Residential Lot and Golf Club Program in the Del Monte Forest.

 

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

 

1.               Direct staff and counsel to refine the draft CEQA findings (Exhibit 2-E) and return the revised set of findings to the Board for approval after the hearing on the second reading of Ordinance No. 109 has been closed. 

 

2.               Consider approval of the first reading of Ordinance No. 109 shown in Exhibit 2-A (1).  If the first reading is approved, the second reading should occur at the November 17, 2003 Board meeting.  If adopted at that meeting, the ordinance would become effective on December 17, 2003.

 

3.               Direct staff and counsel to modify the draft agreements (Exhibits 2-B (1), 2-C (1) , and 2-D (1)) and return revised documents to the Board for review and approval.

 

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, construction and operation, and sale of recycled water.

 

The Board reviewed an earlier version of Ordinance No. 109 at its meeting of September 15, 2003.  Since that date, District General Counsel David Laredo, Special Counsel Carl Nelson, and representatives of CAWD, PBCSD, the Pebble Beach Company, and the recycled water users have collaborated to redraft Ordinance No. 109.  Carl P. Nelson prepared the draft ordinance, attached as Exhibit 2-A (1).  The Administrative Committee reviewed the draft of this ordinance at its meeting of October 14, 2003.  No formal recommendation was made. 

 

CEQA REVIEW: 

 

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

 

 

·        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.

 

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 Draft Findings, attached as Exhibit 2-E.   The Board shall review and approve the final set of CEQA findings after it closes the hearing on the second reading of Ordinance No. 109.

 

 

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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