ITEM:	PUBLIC HEARING
18.	CONSIDER ADOPTION OF JULY THROUGH SEPTEMBER 2004 QUARTERLY WATER SUPPLY STRATEGY AND BUDGET
Meeting Date:		June 21, 2004	Budgeted: N/A
Staff Contact:		Darby Fuerst/Joe Oliver	Program/Line Item No.: N/A
			Cost Estimate: N/A
General Counsel Approval: N/A
Committee Recommendation: N/A
CEQA Compliance: Notice of Exemption, CEQA, Article 19, Section 15301 (Class 1) ESA Compliance: Consistent with the September 2001 Conservation Agreement between the National Marine Fisheries Service and California-American Water to minimize take of listed steelhead in the Carmel River, Consistent with SWRCB WR Order Nos. 95-10, 98-04, 2002-0002

SUMMARY: The Board will accept public comment and take action on the July through September 2004 Water Supply Strategy and Budget for the California American Water (Cal-Am) Water Distribution System (WDS). The proposed budget, Exhibit 18-A, is based on below normal inflow conditions for the remainder of the Water Year 2004 (WY 2004). Specifically, the budget utilizes monthly inflows that are exceeded about 68 percent of the time at San Clemente Dam. The proposed strategy and budget is designed to maximize the long-term production potential and protect the environmental quality of the Seaside and Carmel Valley basins.

Exhibit 18-A shows the anticipated production by Cal-Am for each production source. Exhibit 18-A also shows actual production values for the water year to date. Please note that the anticipated production values shown assume an annual Cal-Am production not exceeding 15,285 AF, including 4,000 AF from the Seaside Basin and 11,285 AF from the Carmel River Basin. The total from the Carmel River Basin is consistent with SWRCB Order Nos. 95-10 and 98-04.

For the first eight months of WY 2004 (i.e., October 2003 through May 2004), Cal-Am’s production is above the SWRCB-based overall production target by 98 acre-feet or 1.1 %.

For the purpose of this budget it is assumed that no water from the Carmel River Basin will be injected into the Seaside Basin during the July through September 2004 period. The proposed budget is consistent with the Memorandum of Agreement with Cal-Am and California Department of Fish and Game (CDFG) that was approved in May 2004.

RECOMMENDATION: The Board should receive public input, close the Public Hearing, and discuss the proposed water supply budget. District staff recommends adoption of the proposed budget. The budget is described in greater detail in Exhibit 18-B, Quarterly Water Supply Strategy Report: July – September 2004.

BACKGROUND: The Quarterly Water Supply Strategy and Budget pertains to production within the Cal-Am Water Distribution System for the three-month period of July, August and September 2004. This strategy was developed cooperatively on June 8 by the budget group, comprised of staff from the District, Cal-Am, National Marine Fisheries Service (NOAA Fisheries), and CDFG. Based on the fact that San Clemente and Los Padres Reservoirs are not full and streamflow at the Don Juan gaging station in Garland Park is expected to remain below 20 cubic feet per second (cfs) throughout the July-September period, it was agreed that for the remainder of June, July, August, and September 2004, Cal-Am would not divert any water from San Clemente Dam through the Carmel Valley Filter Plant, except in the case of emergency conditions. This limitation is consistent with the 4d rules adopted by the NOAA Fisheries to protect aquatic habitat and with the Conservation Agreement (CA) between NOAA Fisheries and Cal-Am, which governs diversions during low-flow periods.^[1] For purposes of the CA, the low-flow periods are defined as times when streamflow in the Carmel River at the MPWMD gage at Don Juan Bridge in Garland Park is less than 20 cfs for five consecutive days. This year, streamflow receded below 20 cfs at this location during the first week of June, and is expected to remain below the 20 cfs threshold for the remainder of WY 2004. If actual inflows are more or less than projected for the budget period, the group will reconvene and adjust the diversion and release rates accordingly. These adjustments will take into account flows needed for rearing juvenile steelhead.

The proposed budget allows Cal-Am to divert a maximum of 0.5 cfs/day (31 AF/month) from its sources upstream of, and including, the Scarlett No. 8 Well. This operation takes into account limitations imposed by Cal-Am’s Interim Drawdown Project at San Clemente Dam and the 2001 Conservation Agreement with NOAA Fisheries. Due to higher than expected water demands and the reduced production or loss of several Cal-Am production wells over the past few years, there is a risk that Cal-Am would need to declare a water supply emergency this summer and begin pumping the Scarlett No. 8 Well to meet the daily demands. This is most likely to occur if a major production well fails in Carmel Valley or Seaside during the specific periods when Cal-Am is supplying potable water to Golf Courses in Del Monte Forest. The budget group discussed 12 options for mitigating this risk and minimizing damage to aquatic resources if the scenario occurs. The options included:

1. Reduce Demand throughout the Cal-Am system

2. Use the San Carlos Well, once the river dries up, above the well site

3. Refurbish the Manor Well

4. Refurbish the Berwick No. 7 Well

5. Run Seaside at Full Capacity (19.1 AF/Day) through 6/16/04, then throttle back to 17.5 AF/day for remainder of month

6. Modify piping at the Seaside Ozone Treatment Plant to include some production from the Santa Margarita Injection Well

7. Increase releases from Los Padres Dam during peak demand periods

8. Hire additional fish rescue crews to supplemental District program

9. Run Scarlett No. 8 Well at reduced capacity of ~1.5 cfs, only during peak demand periods, e.g., golf course greens flushing or days exceeding 90^th percentile temperature conditions

10.^[2] During peak demand periods, use the Russell Wells in combination with Item 7 (increased releases from Los Padres Dam)

11. Request that golf courses and public authorities reduce their use of potable water during key periods, and

12. Request that other large, private water systems in Carmel Valley reduce pumping during key periods.

Rule 101, Section B of the District Rules and Regulations requires that a Public Hearing be held at the time of determination of the District water supply management strategy. Notice of this Public Hearing has been published in The Monterey County Herald. Adoption of the quarterly water supply strategy and budget is categorically exempt from the California Environmental Quality Act (CEQA) requirements as per Article 19, Section 15301 (Class 1). A Notice of Exemption will be filed with the Monterey County Clerk's office, pending Board action on this item.

U:\staff\word\boardpacket\2004\2004boardpacket\20040621\PublicHearings\18\item18.doc

Revised 6/11/2004

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^[1] Under the 4d rules adopted by the National Marine Fisheries Service on July 10, 2000, the Take Guidance Section, Item E. (page 42472 of the FR Vol. 65, No 132) prohibits removing water or altering streamflow when it significantly impairs spawning, migration, feeding or other essential behavioral patterns.

^[2] Items 10, 11, and 12 were added during the June 8, 2004 Quarterly Water Supply Strategy and Budget meeting discussions.