MPWMD BOARD MEETING--JUNE 20, 2005--ITEM 18-ADOPTION OF RESOLUTION 2005-04 IN SUPPORT OF FILING PROPOSITION 50 IMPLEMENTATION GRANT APPLICATION

ITEM:		ACTION ITEMS

18.	ADOPTION OF RESOLUTION 2005-04 IN SUPPORT OF FILING PROPOSITION 50 IMPLEMENTATION GRANT APPLICATION

Meeting Date:			June 20, 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: The Administrative Committee reviewed this item on June 9, 2005 and recommended approval.
CEQA Compliance: N/A

SUMMARY: State Proposition 50 (Prop 50), the Water Security, Clean Drinking Water, Coastal and Beach Protection Act of 2002, authorizes approximately $380 million in grant funds throughout California over the next several years for water-related planning and projects. The funds are being awarded by the State Water Resources Control Board (SWRCB) and the Department of Water Resources (DWR) through a competitive grant process. Staff believes that the MPWMD-sponsored Phase 1 Seaside Groundwater Basin Aquifer Storage and Recovery (ASR) Project would be an ideal candidate to receive grant funding, as this project incorporates multiple water management strategies of the kind favored by Prop 50. However, as this staff note details, there are several critical steps that must be completed before the project can qualify for Prop 50 funds.

The next step in obtaining Prop 50 grant funds for the ASR Project is to submit an Implementation Grant application to SWRCB/DWR. For the first Implementation Grant funding cycle, the State has set aside approximately $148 million to fund eligible projects. MPWMD is the lead agency and applicant for an Implementation Grant for a planning Region consisting of the watersheds of Carmel Bay, the Monterey Peninsula, the south Monterey Bay area, and the Seaside Groundwater Basin. MPWMD is also coordinating the development of project proposals from other agencies and non-profit groups to be included in an application that is due July 14, 2005.

A resolution by the governing board of the applicant is required to apply for and to enter into a contract with the State for Implementation Grant funds (see Exhibit 18-A, Resolution 2005-04).

RECOMMENDATION: If this item is approved as part of the Consent Calendar, the Board will adopt Resolution 2005-04 to apply for grant funding under Proposition 50 and will authorize the General Manager to enter into a contract with the State of California to receive grant funds.

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. The grant program is highly competitive with the highest ratings going to those projects that that incorporate multiple management strategies and are consistent with an adopted IRWM Plan (IRWMP).

At the March 31, 2005 meeting, the Board directed staff to work with other local agencies around the Monterey Bay to develop an integrated plan that would include virtually all of the area and watersheds draining to the Monterey Bay. This “umbrella” plan would incorporate the IRWMP developed for each subarea around the Monterey Bay. MPWMD is continuing to work with other local agencies to refine a Memorandum of Understanding for developing such a plan.

MPWMD has begun the development of an IRWMP for a planning Region consisting of the watersheds of Carmel Bay, the Monterey Peninsula, the south Monterey Bay area, and the Seaside Groundwater Basin. MPWMD staff members recently worked with many local agencies and non-profit groups within this Region to draft a work plan to develop an IRWMP, which is called the “Monterey Peninsula, Carmel Bay, and South Monterey Bay Integrated Regional Water Management Plan and Integrated Coastal Watershed Management Plan.” Agencies and groups that are participating in plan development or are included in this plan are:

The next step in obtaining Prop 50 grant funds for implementing projects is to submit an Implementation Grant application to SWRCB/DWR. One of the suite of projects to be included in an application is the MPWMD-sponsored Phase 1 Seaside Groundwater Basin Aquifer Storage and Recovery Project. As reported at the May 26, 2005 Board meeting, costs to be incurred in fiscal year 2006-07 and 2007-08 are estimated at $2,460,000 and $198,000, respectively, for a total cost for construction of $2,658,000 to complete Phase I, not including District staff time (see May 26, 2006 Special Meeting/Board Workshop, Item 2: Review Proposed MPWMD Budget for 2005-2006).

The ASR project will be scored on the adequacy of the IRWMP, the quality of the project proposal, and the state of readiness the project is in (i.e., projects that are ready to go to construction are more likely to be funded). In addition, an adopted groundwater management plan for the Seaside Basin will be required in order for the project to be considered for funding. Should the State award a grant for this project, MPWMD will be required to contribute 10% of the total cost of the project. District staff time for contract administration, public outreach, and monitoring will likely be more than 10% of the construction costs, which should meet the requirements for in-kind services. The State’s tentative date for making a final selection for the first cycle of grant awards is December 2005. Only costs incurred after a grant contract is signed are eligible for reimbursement.

In addition to MPWMD-sponsored projects, the Implementation Grant application may contain several projects sponsored by other public agencies and non-profit groups. Should the State award grant funding for any of these projects, the sponsoring agency(ies) will contract directly with the State for grant funds.

Attached as Exhibit 18-B is a schedule for completing the Implementation Grant application.

IMPACTS ON STAFF/RESOURCES: Application for a Prop 50 Implementation Grant will be completed by the District’s Planning and Engineering Division staff with assistance from the Water Resources Division. Applications are due July 14, 2005. Larry Hampson, Water Resources Engineer, is the District’s grant application coordinator. Some direct costs may be incurred to obtain relevant documents from other agencies and to copy and mail the application. If the District receives an Implementation Grant, staff time will be required to prepare the Integrated Regional Water Management Plan (IRWMP), to coordinate with other agencies, and to administer the grant.

As discussed in the “Background” section, staff anticipates that up to 6,000 hours of staff time would be required to complete an IRWMP. Half of this time is associated with planning for the Seaside Basin ASR Project, the Seaside Basin Groundwater Management Plan, and evaluation of water conservation efforts. Another one-third of this time is associated with developing strategies to protect the environment. The remainder would be used to integrate information from other agencies and to complete a draft IRWMP.

EXHIBITS

18-A MPWMD Board Resolution 2005-04

18-B Proposition 50 Implementation Grant Application Schedule

U:\staff\word\boardpacket\2005\2005boardpackets\20050620\ActionItems\18\item18.doc

June 20, 2005

Budgeted:

N/A