ITEM:		ACTION ITEMS
18.	AMEND CONTRACTS WITH JONES & STOKES ASSOCIATES AND PADRE ASSOCIATES TO PREPARE CEQA DOCUMENTS FOR MPWMD LONG-TERM AQUIFER STORAGE AND RECOVERY (ASR) PROJECT
Meeting Date:			October 18, 2004	Budgeted:	$140,000 in FY 2004-05
From:			David A. Berger,	Program/
			General Manager	Line Item No.:	1.2-B
Prepared By:			Henrietta Stern	Cost Estimate:	$165,096-$175,096
Administrative Services Manager/Chief Financial Officer Review: Yes
General Counsel Approval: Counsel guided program/project level EIR concept
Committee Recommendation: No review by Committee
CEQA Compliance: N/A, item refers to preparing CEQA documents

SUMMARY: The Board will consider authorizing the General Manager to amend two existing consultant contracts to facilitate preparation of an Environmental Impact Report (EIR) for the District’s long-term aquifer storage and recovery (ASR) project. The not-to-exceed value for the two contract amendments would total $165,096. An additional $10,000 contingency amount is recommended by one consultant, as described below. If approved and completely used, the total not-to-exceed amount would be $175,096. The consultant contracts include:

Jones & Stokes Associates (JSA)

Current Contract: Prepare technical documents (with subcontractor) and Draft EIR on long-term Water Supply Project (desalination project in Sand City area). An administrative draft EIR was prepared in December 2003. Completion of the formal Draft EIR is currently on hold at the Board’s direction.

Proposed Amended Contract: Prepare Draft and Final EIR in support of District’s long-term water rights application for its ASR project. An overview of tasks and proposed scope of work are provided as Exhibits 18-A and 18-B. The estimated cost is $135,686 (Exhibit 18-C); the estimated timeframe to certification of the Final EIR is late August 2005 (Exhibit 18-D).

Padre Associates (PA)

Current Contract: Provide engineering services, conduct hydrogeologic tests and prepare reports for full-scale injection/recovery activities at the MPWMD Santa Margarita Test Well. Work with District staff and Cal-Am to facilitate emergency replacement of Cal-Am’s Paralta Well.

Proposed Amended Contract: Prepare engineering information to support MPWMD submittal of draft and final project description for project-level environmental review by JSA. In coordination with MPWMD staff, prepare analysis of impact of ASR project on water levels and quality of the Seaside Basin. Assist with responses to comments as needed. The PA scope of work is provided as Exhibit 18-E; the estimated cost is $29,410 (Exhibit 18-F). PA suggests that an additional $10,000 contingency amount be budgeted, which would result in a potential total of $39,410.

RECOMMENDATIONS: District staff recommends that the Board should take the following actions:

Ø Concur with the mixed project level/program level EIR concept recommended by staff and Counsel (see “Discussion” below).

Ø Confirm that funding would be derived from the Mitigation Program (account 4-7860.04) as currently budgeted. This is based on the fact that the “small” ASR project is geared toward efficient use of existing resources and reduction of current impacts to the Carmel River and Seaside Basins. The roughly 1,300-1,800 acre-foot per year (AFY) firm yield anticipated from the project is significantly lower than the 10,730 AFY estimated shortfall described in State Water Resources Control Board (SWRCB) Order WR 95-10. Due to the one-for-one offset requirement in SWRCB Order 95-10, ASR cannot provide “new” water supply for additional Cal-Am system connections and/or intensified use at existing connections until full compliance with Order 95-10 is achieved.

Ø Authorize the General Manager to amend the existing contract with Jones & Stokes Associates to add the tasks described in the Scope of Work (Exhibit 18-B) for a not-to-exceed limit of $135,700 (rounded). It is notable that this scope does not include subcontractors as a cost-saving measure (see “Discussion” below).

Ø Authorize the General Manager to negotiate a final scope of services and amend the existing contract with Padre Associates to add the tasks described in Exhibit 18-E for a not-to-exceed limit of $39,400 (rounded). This includes a “baseline” amount of $29,410 as described in Exhibit 18-B and a $10,000 contingency amount that would only be used if authorized in writing by the MPWMD General Manager, based on a written justification of need. The contingency amount was included due to very recent communications with PA and printing deadlines, which did not allow time for a detailed review of costs. In addition, the effort to determine the actual facilities needed to implement the ASR project is complex due to the evolving nature of the project.

As described at the September 29, 2004 strategic planning session, time constraints did not allow Administrative Committee review of this item. On September 29, the Board indicated concurrence that the full Board should address this issue on October 18, 2004, if possible.

DISCUSSION: Aquifer storage and recovery entails diverting excess Carmel River flows during high-flow periods through existing Cal-Am facilities, and injecting the water into the Seaside Groundwater Basin for later recovery in dry periods. ASR can provide environment benefits to both the Carmel and Seaside Basins as well as improve drought protection. Since 1996, the District has performed a number of activities at increasing greater levels of detail to evaluate the feasibility of ASR, including obtaining a series of temporary water rights permits from the SWRCB to divert Carmel River water for injection into the Seaside Basin. Since 1998, the District has injected 1,100 AF of excess winter flow from the Carmel River into the Seaside Basin. In water years 2003 and 2004, about 960 AF have been recovered at the MPWMD test well and delivered to the community via the Cal-Am system as part of the test program.

As part of the budget approved for Fiscal Year (FY) 2004-2005, $140,000 was earmarked for preparation of an EIR on the District’s ASR project. An EIR is needed to support issuance of a long-term SWRCB water rights permit. At an August 30, 2004 meeting with MPWMD staff, the SWRCB staff indicated they would notice the MPWMD’s September 2003 (revised) Petition for Change for a long-term ASR project assuming that the District would issue a Notice of Preparation (NOP) of an EIR on the project by the end of year 2004. The current timeline calls for issuance of an NOP in mid-December 2004.

Cost-Cutting Measures to Achieve Budget Goals

In order to prepare the EIR in the most cost-effective manner and minimize consultant expense, District staff proposes to streamline the scope of the EIR, perform as much of the required technical work as possible, and directly coordinate work of the environmental and engineering firms. The changes in the staff approach include:

Ø The EIR should entail quantitative project-level elements and more qualitative program-level review. Project-level elements include: (1) adding a second well at the existing Santa Margarita Test Well site, along with ancillary facilities needed to conduct full-scale testing of well couplet interactions and/or full-time operations; and (2) diversion impacts to the Carmel River assuming the full water right described in the water rights application is used.  Program-level elements include potential additional well sites (up to four wells at two additional sites in the Fort Ord area) to maximize use of the water rights described in the District’s water rights application.  Initial location concepts have been identified, but are not presently confirmed.

Ø MPWMD staff refines project yield estimates. Yield estimates have ranged from 700 AFY to 1,800 AFY, depending on modeling assumptions used. District staff will refine yield estimates based on the most recent bypass rules recommended by NOAA Fisheries and results of recent testing of the District’s full-scale ASR well.

Ø MPWMD staff prepares project description, with limited engineering assistance. This will focus on refining facilities described in previous reports based on the most recent experience in a full-scale testing scenario.

Ø MPWMD staff prepares analysis of environmental impacts to the Seaside Groundwater Basin, with assistance on water level and quality issues. Staff will draw on the current ASR recovery testing program, which includes geochemical analysis and coordination with Health authorities. (Note: JSA already assumed that MPWMD is responsible for assessing impacts to the Carmel River hydrology and fisheries.)

The JSA and PA scopes and cost estimates provided in Exhibits 18-A through 18-F reflect these changes. The consultants worked diligently with District staff to reduce costs as much as possible without jeopardizing the adequacy of the EIR. Use of JSA as the environmental consultant maximizes use of data, environmental analysis and graphics from JSA’s recent EIR

effort for the MPWMD desalination project. The program–level review of alternatives in the desalination EIR included a “small ASR” project.

MPWMD staff believes that limited assistance from a specialized consultant is needed for the ASR project description (e.g., identify specific facilities and provide engineering graphics), Seaside Basin water level and quality impacts analysis, as well as other miscellaneous tasks. The firm of Padre Associates was viewed as the most cost-efficient choice because PA currently works closely with District Water Resources Division staff “on the ground” to construct and operate the current ASR facilities, carry out hydrogeologic testing (including water quality studies), and write several recent technical reports on the testing program results. The PA scope and cost estimate are provided in Exhibit 18-E and 18-F. The PA cost estimate is $29,410 based on a limited opportunity to discuss the EIR project with District staff. A $10,000 contingency amount is included to address the fact that the project description is not finalized, and the work needed to confirm all project facilities cannot be known with certainty at this time.

IMPACT TO RESOURCES: The total EIR cost (excluding contingency) is estimated at $165,096. The budgeted amount for FY 2004-05 is $140,000. A careful review of the JSA cost by task (Exhibit 18-C) and schedule by task (Exhibit 18-D) indicates that an estimated $107,000 should be expended through June 30, 2005 (end of fiscal year). Additional work by JSA is scheduled from July 1 through August 31, 2005. As shown in Exhibits 18-E and 18-F, nearly all of the $29,410 slated for Padre Associates could be expended by June 30, 2005. Thus, a total of roughly $136,400 could be used through June 30, 2005, which is below the $140,000 budget amount.

If more than $3,600 of the contingency is approved and used in FY 2004-05, then the $140,000 budget would be exceeded. If this situation occurs, it would be reasonable to draw from the $57,700 Mitigation Fund contingency budgeted for FY 2004-05 for the extra amount needed (no more than $6,400). It is difficult to predict the volume and complexity of comments on a Draft EIR. Thus, it is possible that higher costs than budgeted in FY 2004-05 could occur if comments are unusually voluminous, complex or adverse. The Mitigation Fund contingency amount could also be used if this situation arises.

To complete and certify the Final EIR in late August 2005, an additional $28,696 will need to be included in the FY 2005-06 budget. This amount could be as high as $38,696 if the full $10,000 contingency amount is required and is used in FY 2005-06.

Water Resources Division staff have played the primary role in ASR testing to date; they will also be the primary technical contributors to the EIR, in coordination with Padre Associates. In addition, the Project Manager from the Planning & Engineering Division will be responsible to manage the environmental consultants and ensure compliance with CEQA.

EXHIBITS

18-A Jones & Stokes Associates cover letter

18-B Jones & Stokes Associates scope of work

18-C Jones & Stokes Associates cost estimate

18-D Jones & Stokes Associates schedule and timeline

18-E Padre Associates scope of work

18-F Padre Associates cost estimate

U:\staff\word\boardpacket\2004\2004boardpacket\20041018\ActionItems\18\item18.doc