ITEM: INFORMATIONAL ITEMS/STAFF REPORTS

28. QUARTERLY WATER SUPPLY PROJECT STATUS REPORT

Meeting Date: July 19, 2004 Budgeted: N/A

Program/Line Item No.: N/A

Staff Contact: Henrietta Stern Cost Estimate: N/A

General Counsel Approval: N/A

Committee Recommendation: N/A

CEQA Compliance: N/A

This is a quarterly report on District water supply augmentation projects for the April through June 2004 period. The next quarterly report will be written in October 2004. Unlike previous reports, this report will not include a detailed historical overview of previous action. Staff plans to expand the “Background” information as a separate reference document to be prepared annually. Currently, the two priority water augmentation efforts are:

Ø proceed with Seaside Basin aquifer storage and recovery (ASR) test project (also known as “injection/recovery”) while simultaneously evaluating long-term water supply options;

Ø prepare Seaside Basin Groundwater Management Plan.

Please refer to Board packet materials and minutes for more detailed information. Information is also available as part of the weekly General Manager’s letter to the Board. Materials are provided on the District website at www.mpwmd.dst.ca.us.

EIR on Long-Term Water Supply Project

In Spring 2003, the District Board directed staff and consultants to prepare an Environmental Impact Report (EIR) that evaluates an 8,400 acre-foot per year (AFY) desalination project in Sand City at the project level of detail. Four other alternatives were also evaluated at a lesser level of detail. An interim “Board Review Draft” EIR was prepared for receipt by the Board at its December 15, 2003 meeting.

For the interim draft EIR, engineering consultants conducted computer modeling and prepared draft technical memorandum on radial and horizontal directionally drilled (HDD) “slant well” capacities, based on information known in 2003. In December 2003, the Board voted to not complete a formal Draft EIR pending the evaluation of new geotechnical and geophysical field data in early 2004. This data could affect the estimate of maximum potable water yield at the Sand City desalination site using the HDD well technology.

District consultants analyzed geotechnical (test wells) and geophysical (sonic) field data, and prepared a draft Phase 2 report on the hydrogeologic study results in February 2004. The results indicated that the aquifer characteristics were different than previously known; that construction of “offshore HDD” wells for seawater intake (drilled perpendicular to the coastline using the blind hole method) may not be feasible; and that construction of intakes using “onshore HDD” wells (drilled parallel to the beach using the pull through method) appears to be feasible. In March 2004, District consultants prepared a draft Phase 2 technical memorandum on computer modeling of the Sand City desalination project. Depending on the method used for seawater intake and brine discharge, practical potable water production yields were estimated to range from 3,900 to 8,400 AFY.

A March 31, 2004 special workshop was held to review the results of the engineering and hydrogeologic studies. The Board indicated its preference to delay completion of a formal Draft EIR until more information is obtained about two competing Moss Landing desalination concepts pursued by (1) Cal-Am/Monterey County (“Coastal Water Project”), and (2) Pajaro/Sunny Mesa Community Services District.

At the June 21, 2004 meeting, the Board significantly reduced the budget for the MPWMD desalination project EIR for fiscal year 2004-2005. The Board did not provide direction on several EIR options due to the lateness of the hour.

Notable activities by District consultants and staff in April through June 2004 included:

Ø In April 2004, consultants completed the final Sand City Desalination Feasibility Report. In subsequent months, extensive background technical memoranda and supporting computer files were prepared.

Ø In April-May 2004, staff attended a desalination conference in Santa Barbara focusing on California projects; and helped organize and moderate an AMBAG educational forum on local desalination projects.

Ø Staff held several meetings, provided technical data, and conducted a field tour of District ASR facilities to Cal-Am consultants retained to prepare a Proponent’s Environmental Assessment (PEA) for Cal-Am’s Coastal Water Project. The PEA is required by the California Public Utilities Commission (CPUC).

Ø Staff attended a June 14, 2004 town meeting hosted by Cal-Am on its proposed Coastal Water Project.

ASR Testing and Related Water Rights

ASR entails diverting excess winter flows from the Carmel River through existing Cal-Am facilities and injecting the water into the Seaside Basin Coastal Subareas for later recovery. Since 1996, the District has evaluated the feasibility of ASR at greater levels of detail, including obtaining water rights to divert Carmel River water and inject it into the Seaside Basin. District staff received a temporary permit from the SWRCB for continued testing of the MPWMD full-scale injection/recovery test well in the Seaside Basin through May 2004. Approximately 160 AF were diverted for injection into the Seaside Basin at the District’s full-scale test well site. Injection quantities were lower in 2004 than in previous years due to a 12-day pump failure in the Cal-Am system in March as well as below-normal streamflow amounts. Action in the April-June 2004 period for ASR included:

Ø District staff and consultants continued technical studies focused on recovery of injected water, including water sampling from different points in the Cal-Am system and associated water chemistry analysis.

Ø District staff met with Cal-Am, Monterey Regional Water Pollution Control Agency and Monterey County Water Resources Agency regarding ASR activities and potential partnerships in the future.

Ø District staff continued coordination with SWRCB staff regarding pending MPWMD water rights applications and related technical information.

Seaside Basin Groundwater Management Plan

Based on Board direction in 2002, staff began work on a long-term Seaside Basin Groundwater Management Plan. The Board indicated that the Plan elements should include: consolidate known information, confirm existing estimates of reliable yield, consider yield estimates for smaller subunits of the basin, assess condition of the basin (or sub-basins), develop best management schemes, and assess potential for basin recharge. District staff members are working to develop the Management Plan in compliance with protocols set by the State of California (AB 3030 as amended by SB 1938). District staff have met with major pumpers and agency officials, invited stakeholders to participate in the process, and held public informational meetings.

Complicating this task is litigation filed by Cal-Am on August 14, 2003. The suit asserts Cal-Am’s water rights and requests a Court adjudication of the Seaside Basin. The Cal-Am lawsuit involves issues of public concern such as: prioritization and quantification of water rights within the basin; rights to aquifer storage within the basin; rights to artificially introduce non-native water into the basin through direct injection or spreading grounds; a judicial determination that the basin is in overdraft; and the appointment of a water master to manage the basin water rights and resources.

Subsequent to the adjudication filing, the District Board directed staff to advise all interested parties that District efforts on an EIR on the two conceptual ordinances associated with the Management Plan are terminated. District efforts will focus on technical information useful for basin management regardless of the litigation outcome. At its March 15, 2004 meeting, the Board adopted a resolution declaring its intent to move forward with the Seaside Basin Groundwater Management Plan, and adopted a statement of public participation in the development of the plan. Members of agencies and interested parties were notified of the Board’s action.

District staff continue to help Cal-Am develop management strategies to reduce extractions from the coastal basin during the wet season and determine which wells would be best to use as production from Seaside increases in the dry season. SWRCB Order WR 98-04 requires Cal-Am reductions in pumping from the Seaside Basin when Carmel River flow at the Highway 1 bridge is greater than 40 cubic feet per second (cfs) from November 1 through April 30.

Notable activities in the April – June 2004 period included:

Ø The District continued to participate in legal processes related to a lawsuit filed by Cal-Am on August 14, 2003 to adjudicate the Seaside Basin. On June 16, 2004, the parties met with the assigned judge, Roger Randall (Ret.) in Monterey to discuss case management issues. The judge set a series of interim court dates for this matter with a trial date scheduled for September 12, 2005.

Ø District staff and counsel attended a Water Law Seminar focused on groundwater; issues associated with the Seaside Basin were addressed in a presentation by a notable attorney.

Ø The District’s (District’s) Senior Hydrologist made a presentation on Seaside Basin management issues at a national groundwater conference in Chicago.

Related Water Augmentation Activities

The following table briefly summarizes relevant action on related water augmentation efforts:

ACTIVITY	ACTION
Provide leadership to ensure compliance with SWRCB Order 95-10.	As of July 8, 2004, community water use was 48 acre-feet more than the year-to-date production goal from the Carmel River and Seaside Basins for water year 2004. District staff continues coordination with Cal-Am to encourage conservation, and assess the amount of unaccounted-for water in the Cal-Am system. The District voiced its support for a Cal-Am rate increase for large water users so long as Cal-Am continues efforts to reduce its unaccounted for water to 7% system loss. The CPUC approved the rate increase and directed Cal-Am to submit an application for a moratorium on new water connections. A formal application is currently being prepared by Cal-Am. The District is scheduled to take a position on this issue at its July 19, 2004 meeting.
Continue evaluation of feasibility of sediment removal from San Clemente and Los Padres Reservoirs.	Potential removal of sediment from San Clemente Dam continues to be explored by Cal-Am and the California Department of Water Resources (DWR). District staff participates in meetings and provides technical expertise. Cal-Am lowered the water level of San Clemente Reservoir from elevation 525 feet to 515 feet, pursuant to direction from DWR’s Division of Safety of Dams. No action has been taken on Los Padres Dam.
Continue pursuit of storm water reuse opportunities in cooperation with ongoing regional efforts.	District encourages jurisdictions to incorporate innovative use of storm water and recycled water in planning process. Storm water reuse is considered in the water supply project EIR.

Water Distribution System Permits

Staff implements District Rules and Regulations that govern water distribution systems (WDS) within the District, as most recently amended by Ordinances No. 96, 105 and 106 (see District website). District staff receives many calls each month from people who are planning to submit applications or have other questions about ordinances governing water distribution systems. District staff also responds to written requests for information.

In February 2004, the Board heard a staff presentation on current ordinances and ideas for refinement. Due to other pressing priorities, the Board deferred action on this topic until mid-2004. The Board’s Rules & Regulations Review Committee is currently considering suggested changes to the rules proposed by staff. Conceptual ordinance revisions are scheduled for review by the full Board in August 2004.

In the April-June 2004 period, staff effort focused on the Cañada Woods WDS, a large system in Carmel Valley. The applicant requested reconsideration of Condition #19 of the permit authorized by the Board in July 2003. At its June 21, 2004 meeting, the Board directed that a Board subcommittee (Foy, Markey) work with staff and the applicant to resolve concerns in a mutually acceptable manner. Two meetings have been held with productive results. All parties concurred that a revised permit for an integrated Cañada Woods/Monterra water system made the most sense. The applicants also requested that LAFCO temporarily suspend consideration of the applicant’s petition to detach from MPWMD.

CEQA Documents

The District logs incoming notices and comments on selected CEQA documents prepared by other agencies for projects within the District boundary that could potentially affect water supply, water quality or environmental resources managed by the District. In April-June 2004, the District commented on the Potrero Subdivision and Rippling River housing project in Carmel Valley as well as proposed LAFCO action related to a Petition requesting that the Tehama/Monterra Subdivision be detached from the District. The District also transmitted a Notices of Determination for Ordinance Nos. 109, 114 and 115.

U:\staff\word\boardpacket\2004\2004boardpacket\20040719\InfoItems_Reports\28\item28.doc