ITEM:

ACTION  ITEMS

 

1.

PROVIDE POLICY DIRECTION REGARDING PROPOSITION 50 GRANT APPLICATIONS

 

Meeting Date:
March 31, 2005

Budgeted: 

N/A

 

From:

David A. Berger,

Program/

N/A

 

General Manager

Line Item No.:

 

Prepared By:

Larry Hampson

Cost Estimate:

N/A

 

General Counsel Approval:  N/A

Committee Recommendation:  N/A

CEQA Compliance:  N/A

 

SUMMARY:  The State is encouraging the development and implementation of Integrated Regional Water Management Plans (IRWMP) and projects through a competitive grant program authorized by Proposition 50 (Prop 50), which is a bond act passed by California voters in 2002.  Approximately $380 million is available through competitive grants.  Some of the projects and activities undertaken by MPWMD may be eligible for funds from this grant program.  However, an adopted IRWMP is required in order to be eligible to compete for funds to implement projects.  MPWMD staff members are exploring the potential for developing an IRWMP in cooperation with the Monterey County Water Resources Agency (MCWRA), the Pajaro Valley Water Management Agency (PVWMA), and the Association of Monterey Bay Area Governments (AMBAG). Other agencies and organizations, including Carmel Area Wastewater District, Monterey Regional Water Pollution Control Agency, Big Sur Land Trust, and Carmel River Watershed Conservancy, may also participate in developing the portion of the IRWMP that includes the Carmel River Watershed and the Seaside Groundwater Basin.  An IRWMP must address, at a minimum, water supply, groundwater management, ecosystem restoration, and water quality. 

 

At this meeting, staff is seeking policy direction with applying for grant funding under Prop 50.  Applications for planning grants are due May 5, 2005, and applications for implementation grants will be due in early June 2005.  Based on the Board’s direction, staff will submit a resolution in support of proposed grant applications for Board consideration at its April 18, 2005 meeting.  A resolution by the governing board of the applicant is a required part of each application for a Prop 50 grant.

 

RECOMMENDATION:  Staff recommends that the Board direct staff as follows:

 

1.     Define a geographic planning area or region for purposes of developing the IRWMP that would include areas under the jurisdictions of MCWRA, PVWMA, and MPWMD.

2.     Participate with AMBAG, MCWRA, PVWMA, and others in developing an IRWMP and a Prop 50 planning grant.

3.     Pursue alternatives to forming a three-agency regional planning area, as described below.

4.     Apply for one or more Prop 50 implementation grants for the ASR Phase I project and other projects, as described below.

 

BACKGROUND:  Proposition 50, the Water Security, Clean Drinking Water, Coastal and Beach Protection Act of 2002, was passed by California voters in November 2002.  It amended the California Water Code (CWC) to add, among other articles, Section 79560 et seq., authorizing the Legislature to appropriate $500 million for Integrated Regional Water Management (IRWM) projects. 

The intent of the IRWM Grant Program is to encourage integrated regional strategies for management of water resources and to provide funding, through competitive grants, for projects that protect communities from drought, protect and improve water quality, and improve local water security by reducing dependence on imported water.  The IRWM Grant Program is administered jointly by DWR and SWRCB and is intended to promote a new model for water management.  One of the goals of the IRWM Grant Program is to encourage communities to work on synergistic approaches to solving regional water supply and environmental quality problems.

 

Approximately $380 million is anticipated to be available for IRWM grants during two funding cycles, one in 2005 and one in 2006.  Approximately $160 million will be available in the first funding cycle with the balance ($220 million) to be awarded in a second cycle.  The funds are to be split equally between Southern California, which is defined as the counties of San Diego, Imperial, Riverside, Orange, Los Angeles, San Bernardino, Santa Barbara, and Ventura, and Northern California, which is defined as those counties not in Southern California.

In the first grant funding cycle, approximately $12 million will be available for the development of IRWM Plans (IRWMP), with a maximum grant amount being $500,000.  The required minimum local funding match for a planning grant is 25% of the total proposal cost.  The deadline for a planning grant application is May 5, 2005.  Table A-1 below, which is reproduced from “Integrated Regional Water Management Grant Program Guidelines, November 2004, Department of Water Resources and State Water Resources Control Board, Proposition 50, Chapter 8,” shows the strategies that must be considered in an IRWMP.

 

Table A-1 – Water Management Strategies

 

˛       Ecosystem Restoration*

˛       Environmental and habitat protection and improvement*

˛       Water Supply Reliability*

˛       Flood management*

˛       Groundwater management*

˛       Recreation and public access*

˛       Storm water capture and management*

˛       Water conservation*

˛       Water quality protection and improvement*

˛       Wetlands enhancement and creation*

˛       Conjunctive use

˛       Desalination

˛       Imported water

˛       Land use planning

˛       NPS pollution control

˛       Surface storage

˛       Watershed planning

˛       Water and wastewater treatment

˛       Water transfers

˛       Water recycling*

 

*    Pursuant to CWC §§ 79562.5 and 79564, these water management strategies must be considered to meet the minimum IRWM Plan Standards.

 

Approximately $148 million is available in the first funding cycle for implementation projects, with the maximum grant amount being $50 million. The required minimum local match for an implementation grant is 10% of the total proposal cost.   The deadline for an implementation grant is early June 2005.  An applicant for an implementation grant must demonstrate that a project is consistent with an adopted IRWMP.  But the Prop 50 Guidelines also state:  “This requirement may be waived if the applicant can show that it is engaged in the development of an IRWM Plan and that the IRWM Plan will be adopted before January 1, 2007.”

 

1.  Defining the Geographic Area

 

MPWMD staff members have held discussions with the Monterey County Water Resources Agency (MCWRA) and the Pajaro Valley Water Management Agency (PVWMA) to establish a planning region and to develop an IRWMP.    MCWRA has proposed an “umbrella” agreement between public agencies that would foster the development of an IRWMP.  Attached as Exhibit 1-A is a Draft Memorandum of Understanding sent by MPWMD to MCWRA and PVWMA for their review. Currently, the planning region would consist of the coastal watersheds and underlying groundwater basins from the Pajaro River on the north to San Jose Creek on the south (see Exhibit 1-B, Proposed Region for Integrated Regional Water Management).  However, MCWRA has also discussed the potential for portions of Santa Cruz County to be included within the planning region.  Results of those discussions are not yet available.  If Santa Cruz County is included, they would be an additional signatory to the Memorandum of Understanding (Exhibit 1-A).

 

2.  Participation with MCWRA, PVWMA, AMBAG, and Others

 

MCWRA has begun discussions with the Association of Monterey Bay Area Governments (AMBAG) about being the applicant for a Prop 50 planning grant to develop an IRWMP for the region.   General Managers of MCRWA, PVWMA, AMBAG, and MPWMD have scheduled a meeting to discuss the planning grant and the approach for developing a regional IRWMP.   Results of those discussions will be reported at the March 31, 2005 Board meeting.  The deadline for grant application is May 5, 2005.  If AMBAG were awarded a grant, MPWMD would likely be expected to provide a portion of the local required funding match of 25%.  MPWMD staff proposes to meet this requirement by providing technical advice and assistance with developing an IRWMP.

 

MPWMD would need to bring together and review all available planning documents within the MPWMD boundaries and the Carmel River Watershed.  The amount of staff time required is not yet known.  However, staff believes that the local contribution should be divided among the four agencies involved.  Staff time spent in excess of the local contribution could be reimbursed through grant funding.

Currently, no IRWM Plans exist in the Monterey Bay region, although several areas, including the Salinas Valley, Santa Cruz County, and the Pajaro Valley, are actively pursuing the development of IRWM Plans.  Within the MPWMD boundaries, many management plans have been completed by MPWMD and other local agencies (special districts, cities, Monterey County, Carmel River Watershed Conservancy) concerning their particular responsibilities for water.   Local plans included under an “umbrella” document describing the regions plans could form the basis of a "functionally equivalent" IRWM Plan.  What is needed is to examine the local plans, fill in the missing parts, and describe how they fit together to form an integrated plan.  It is likely that an IRWMP for a large region would offer significant opportunities for the type of synergies envisioned by the State Legislature under the Prop 50 grant program.  This would benefit MPWMD directly by improving the chances of receiving an implementation grant under this program.

 

MPWMD staff have also met with representatives of the Carmel Area Wastewater District, the Monterey Regional Water Pollution Control Agency, the Big Sur Land Trust, and the Carmel River Watershed Conservancy in regard to developing the Carmel River and Seaside Groundwater Basin portions of the IRWMP.

 

3.  Alternatives to forming a three-agency regional planning area.

 

Each of the three regional water management agencies (MCWRA, MPWMD, and PVWMA) must develop integrated plans for the watersheds within their respective jurisdictions in order to be eligible to apply for implementation grant funding for projects in those watersheds.  Therefore, it may be possible to define smaller “regions” for planning purposes, if a larger regional effort is not supported by the three agencies.  Alternative potential planning regions involving MPWMD include:

 

Alternative A.  A geographic region consisting of all groundwater basins within the MPWMD boundary and surface watersheds flowing into or through the MPWMD boundaries.  Because of the Prop 50 requirement that an IRWMP be adopted by at least two public agencies with statutory authority over water, MPWMD would need to seek a partner in developing an IRWMP.  The Carmel Area Wastewater District and the Monterey Regional Water Pollution Control Agency have both expressed an interest in seeing that an IRWMP is developed.  But neither agency is prepared at this time to actively move forward with developing such a plan.  Other potential parties include the Big Sur Land Trust and the Carmel River Watershed Conservancy.  MPWMD could apply for a planning grant to develop an IRWMP for this area.  The level of effort is not yet well defined, but the minimum local match is 25% of the cost of developing a plan.  It is possible that MPWMD could be reimbursed for staff costs above the minimum contribution.  MPWMD would likely be in competition with other local and regional agencies from around the State for grant funding.

 

Alternative B.  A geographic region consisting of all groundwater basins within the MPWMD and MCWRA boundaries and surface watersheds flowing into or through the MPWMD and MCWRA boundaries.  This region would have many of the advantages of a larger Monterey Bay planning region and would meet the requirement for two public agencies with statutory authority over water.  MCWRA is currently developing an integrated plan for the Salinas River watershed and does not intend to apply for a planning grant for this basin.  Under this alternative geographic description, MPWMD could apply for a planning grant to complete the portion of an IRWMP under MPWMD jurisdiction.  The conditions of a grant application and award would be similar to Alternative A.

 

4.  Applying for one or more Prop 50 implementation grants.

 

The Seaside Basin Aquifer Storage and Recovery (ASR) Project may be eligible to receive grant funding through the Prop 50 program.   If awarded a grant, the minimum local match is 10% of the proposed project costs.  At this time, the first phase of the ASR project is estimated to cost approximately $4 million.  In order to be eligible for grant consideration, an adopted IRWMP must be in place by January 1, 2007.  If MPWMD goes forward with a Prop 50 implementation grant application for this project, staff resources would need to be committed for the application and for completing an IRWMP.  Also, a groundwater basin management plan would need to be completed within one year of application for grant funding.  The MPWMD Board previously adopted Resolution 2004-02, which declared its intent to complete a groundwater management plan for this basin.  The deadline for implementation grant applications is early June 2005 (a firm date is not yet available).

 

Staff may prepare additional Prop 50 implementation grant applications for environmental protection and enhancement, water conservation, and water quality projects.

 

TIMELINE

 

Applications for planning grants are due May 5, 2005, and applications for implementation grants will be due in early June 2005.  Based on the Board’s direction at the March 31, 2005 meeting, staff will submit a resolution in support of proposed grant applications for Board consideration at the April 18, 2005 meeting.  A resolution by the governing board of the applicant is a required part of each application for a Prop 50 grant.

 

EXHIBITS

1-A      Draft Memorandum of Understanding for Integrated Regional Water Management in the Central and Southern Monterey Bay Area

1-B      Map of Proposed Region for Integrated Regional Water Management

 

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