ITEM:		PUBLIC HEARING
9.	CONSIDER ADOPTION OF OCTOBER THROUGH DECEMBER 2004 QUARTERLY WATER SUPPLY STRATEGY AND BUDGET
Meeting Date:			September 20, 2004	Budgeted:	N/A
From:			David A. Berger,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			David Dettman	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 Company to minimize take of listed steelhead in the Carmel River
SWRCB Compliance: Consistent with SWRCB WR Order Nos. 95-10, 98-04, 2002-0002

SUMMARY: The Board will accept public comment and take action on the October through December 2004 Water Supply Strategy and Budget for the California American Water (Cal-Am) Water Distribution System (WDS). The proposed budget, Exhibit 9-A, is based on below normal year inflow conditions for the remainder of Calendar Year 2004 (CY 2004), which is the first three months of Water Year 2005 (WY 2005). Specifically, the budget utilizes inflows that are expected to be exceeded about 66% 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 9-A shows the anticipated production by Cal-Am for each production source. Exhibit 9-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 totaling 15,285 AF, including 4,000 AF from the Seaside Ground Water 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.

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 9-B, Quarterly Water Supply Strategy Report: October – December 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 October, November, and December 2004. This strategy was developed cooperatively with staff from the District, Cal-Am, California Department of Fish and Game (CDFG), and the National Marine Fisheries Service (NOAA Fisheries). With continued below normal flows, the proposed budget does not allow Cal-Am to divert any water, via direct diversion from San Clemente Dam to the Carmel Valley Filter Plant, except in the case of emergency conditions. This limitation is consistent with the 4d rules adopted by NOAA Fisheries to protect steelhead rearing habitats and with the Conservation Agreement (Agreement) between NOAA Fisheries and Cal-Am, which governs diversions during low-flow periods.^[1] For purposes of the Agreement, 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 cubic feet per second (cfs) for five consecutive days. This year, streamflow receded below 20 cfs at this location during the last week of May, and is projected to remain below the 20 cfs threshold for the remainder of CY 2004.

Agency representatives met with Cal-Am to discuss the October-December 2004 budget on September 7, 2004. Previously, representatives from the District, Cal-Am, CDF&G and the NOAA Fisheries met on May 3, 2004, to negotiate the 2004 Memorandum of Agreement (2004 MOA) that governs the releases and diversions from Los Padres and San Clemente Reservoirs during the May-December 2004 period. The District Board approved the 2004 MOA at the May 17, 2004 meeting and it now governs the minimum streamflow releases below San Clemente Dam.

During the September 7, 2004 meeting, the group discussed the status of Cal-Am’s wells in the lower Carmel Valley and noted that in addition to the San Carlos Well that had been taken out of service due to the federal Surface Water Treatment Rule; the Manor Well production capacity has declined from 2.4 to 0.6 cfs due to air entrainment at higher production rates, and the Pearce Well production capacity has temporarily declined from 4.8 to 2.7 cfs, while it is repaired. The net effect of these changes may constrain Cal-Am’s ability to meet system demands during peak periods and increase the extent of drying river channel and associated risk of stranding juvenile steelhead in the lower Carmel River.

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 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.

LIST OF EXHIBITS:

9-A Proposed October-December 2004 Quarterly Water Supply Budget

9-B Quarterly Water Supply Strategy Report: October-December 2004, September 20, 2004

9/16/2004

U:\staff\word\boardpacket\2004\2004boardpacket\20040920\PublicHrg\09\item9.doc

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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.