ITEM:		PUBLIC HEARINGS
8.	CONSIDER SECOND READING AND ADOPTION OF ORDINANCE NO. 122 –REVISING MPWMD RULES AND REGULATIONS TO CREATE IMPACT-BASED PERMIT SYSTEM FOR WATER DISTRIBUTION SYSTEMS
Meeting Date:			August 15, 2005	Budgeted:	N/A
From:			David A. Berger,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Henrietta Stern	Cost Estimate:	N/A
General Counsel Approval: Concurs with Version 5 text.
Committee Recommendation: N/A. Board approved first reading on July 18, 2005 (Version 4A). Version 5 has not been reviewed.
CEQA Compliance: Negative Declaration adopted for Version 4A on July 18, 2005.

SUMMARY: The Board will consider the second reading and adoption of Ordinance No. 122. Ordinance No. 122 would amend the water distribution system (WDS) permit process to an “impact-based” system, where the permit approval process is proportionate to the anticipated impacts. The ordinance includes a matrix table used to determine the level of permit review, which is referred to as “Table 22-A” (referring to Rule 22) in the Ordinance.

At its July 18, 2005 meeting, the Board adopted a Negative Declaration for Ordinance No. 122 (Version 4A), and adopted Resolution 2005-06, which amends WDS fees to match the multi-level permit review system described in the ordinance. Resolution 2005-06 becomes effective concurrent with Ordinance No. 122, anticipated on September 14, 2005.

Exhibit 8-A is Version 5 of Ordinance 122. Exhibit 8-B is Table 22-A referenced in the ordinance. The two recommended changes from Version 4A are shown as shaded text in Version 5; in both cases, staff realized after July 18, 2005 that changes are needed for increased accuracy and clarity. The two minor changes are not substantive, and do not change the Initial Study conclusion that a Negative Declaration should be adopted. These changes are described in detail in the “Discussion” section below, and relate to two issues:

1. Clarify that the Permit Rule Noncompliance procedures described in Rule 20.4 apply to a WDS operating without a permit as well as a WDS in violation of its permit conditions;

2. Change the language used in Rule 21-A-9 to refer to a “licensed professional geologist” instead of a “registered geologist” to be consistent with the terms now used by the State of California.

RECOMMENDATIONS: Staff recommends that the Board take the following actions:

Ø Approve the second reading and adopt Ordinance No. 122, Version 5, including Table 22-A, as shown in Exhibits 8-A and 8-B.

Ø Direct staff to transmit a Notice of Determination to the Monterey County Clerk.

Ø Direct staff to complete the revised WDS Permit Implementation Guidelines by September 14, 2005. Staff also plans to meet with the Monterey County Health Department to discuss WDS permit changes and Ordinance No. 122 prior to mid-September.

DISCUSSION: Please refer to the July 18, 2005 board packet (Item 15) for detailed background information and discussion of the major components of the first reading version of Ordinance No. 122 (Version 4A). The following subsections summarize the final elements of Ordinance No. 122 and describe the two minor text changes recommended by staff:

Highlights of Ordinance No. 122

The following is a brief summary of the primary elements of Ordinance No. 122, and how it would change current MPWMD Rules and Regulations that govern WDS:

Ø Rule 11 would be amended to add several new definitions of terms used in the revised WDS review process; also, several existing terms would be modified and refined.

Ø Most of Rule 20-C-2 would be deleted and replaced with text stating that applications that meet all of four specific criteria would be exempt from the requirement to obtain a WDS permit. This rule also introduces the concept of Sensitive Environmental Receptors (SER), which include the Carmel Valley Alluvial Aquifer, certain named tributaries to the Carmel River, the Seaside Groundwater Basin, and the Pacific Ocean at the mean high-tide line.

Ø The current Rule 20-C-4 (which would become Rule 20-C-5) would be amended to add a sentence that the “reactivate, refurbish, or replace” exemption does not apply to abandoned wells or wells that have been inactive for more than 10 years.

Ø Rule 21-A-1 would revise the process to add a new first “pre-application” step to enable District staff to determine whether the proposed system is Exempt, or will be processed under one of four “permit review levels” (i.e., Level 1, Level 2, Level 3 or Level 4).

Ø Rule 22 describes the specific protocol on how to determine the permit review level and process the permit for each. The four levels reflect increasing potential to impact the water resources system due to size, complexity, potential water use, location within the Cal-Am service area, or proximity to SER and/or other existing wells.

In brief, the five possible outcomes for a system application are:

Ø Exempt - Meets criteria to not need an MPWMD WDS permit. MPWMD ministerial action exempt from CEQA review pursuant to CEQA Guidelines Section 15268.

Ø Level 1 Permit - Minimal potential impact; MPWMD discretionary permit is issued, but no system limits are set. A Level 1 process is based on required compliance with several specific criteria, including staff review to assess whether the application meets the criteria for a CEQA categorical exemption (Guidelines Section 15300 et seq.).

Ø Level 2 Permit - Modest potential impact; full compliance with existing rules, but no public hearing. MPWMD discretionary action subject to CEQA review at staff level.

Ø Level 3 Permit - Moderate potential impact; public hearing conducted by Staff Hearing Officer. MPWMD discretionary action subject to CEQA review.

Ø Level 4 Permit - Highest potential impact; public hearing conducted by MPWMD Board. MPWMD discretionary action subject to CEQA review.

Proposed Text Changes in Version 5 of Ordinance No. 122

Version 5 of Ordinance No. 122 is provided as Exhibit 8-A. Two areas of shaded text within the exhibit indicate text that has changed from Version 4A. These non-substantive text changes would improve clarity and consistency with State of California terminology, and were inadvertently overlooked in previous versions. The following bullets highlight the suggested changes (page numbers refer to Exhibit 8-A):

Ø Rule 20.4, Permit Rule Noncompliance. The first sentence of Section A, Notification, is changed to add General Manager awareness of a violation of the current permit conditions for a WDS along with awareness of an unpermitted system. MPWMD Rules and Regulations already provide for revocation of a permit due to failure to comply with the permit conditions. The suggested change lays out an orderly process to notify the system owner of non-compliance along with subsequent action that could lead to revocation. See pages 8 and 9 of ordinance.

Ø Rule 21-A, Application for Permit to Create/Establish a Water Distribution System. The third sentence of subsection 9 is changed to use the proper terms for a geologist. The text should refer to a “licensed professional geologist” instead of a “registered geologist” to be consistent with the terms now used by the State of California. See pages 9 and 10 of ordinance.

IMPACT ON RESOURCES: Implementation of Ordinances No. 96 and 105 has significantly increased District staff workload because a full public hearing process is needed for nearly all new well applications. Each week, District staff consistently receives many requests for assistance regarding WDS regulations from property owners, real estate agents and agency staff. Each permit application processed to completion to date has taken roughly 25-35 hours minimum of total staff time, much more if complex hydrologic issues are involved. A consultant has assisted District staff on a regular basis since April 2003 in order to ensure that the tight timelines associated with the State Permit Streamlining Act are met. To date, the staff members most affected by the water distribution system regulations are the Water Resources Division Manager (registered hydrogeologist reviews technical data) and Project Manager within the Planning and Engineering Division (permit processing and CEQA review).

The fee structure associated with Ordinances No. 106 and 118 has helped improve the fiscal viability of the WDS permit program; the fee structure described in Resolution 2005-06 will further the District Board’s goal that the WDS program be self-funding. Adoption of Ordinance No. 122 would not change current WDS funding in the FY 2005-2006 budget.

Adoption of Ordinance No. 122 would help focus staff and Board time on applications that demand more rigorous review due to potential environmental effects, and reduce staff time to evaluate systems with less potential for adverse impacts. Staff time would still be needed to address environmental, hydrologic and water rights questions, but staff time would not be needed for public hearing notices, logistics, holding the hearing, and follow-up for Level 1 and Level 2 applications.

Implementation of Ordinance No. 122 will take more staff time initially to revise and write Implementation Guidelines, train District staff, communicate with affected local agencies, and educate the public. However, once in place, the multi-level, impact-based system should result in a more efficient use of staff time. Staff is currently revising the Implementation Guidelines in anticipation of the approval of Ordinance No. 122. Staff is nearing completion of a new technical procedures manual aimed at applicant hydrogeologic consultants. Revised application forms, worksheets and other information for applicants are also nearing completion. Once these materials are completed, information will be posted on the District website; staff training and coordination with other agencies will also occur.

EXHIBITS

8-A Text of proposed Version 5 of Ordinance No. 122

8-B Table 22-A of Ordinance No. 122

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