ITEM:		ACTION ITEMS
18.	consider CONCEPT ORDINANCE THAT CHANGES district rule 20-C TO exempt that portion of former fort ord within the Mpwmd boundary from water distribution system permit requirEments, AND CONSIDER NEED FOR EMERGENCY INTERTIE BETWEEN CAL-AM AND OTHER SYSTEMS
Meeting Date:			February 23, 2006
From:			David A. Berger,
			General Manager
Prepared by:			Henrietta Stern
General Counsel Review:				Yes
CEQA Review: Ordinance will require CEQA Initial Study
Committee Review: Water Demand Committee concurred with Concept Ordinance AA on January 23, 2006; and also supported the concept of an emergency intertie

SUMMARY: Current MPWMD Rules & Regulations require a Water Distribution System (WDS) permit for any new or amended WDS within the District, unless specific criteria for an exemption are met. The Board will consider Concept Ordinance No. AA (Exhibit 18-A), which creates a new exemption for areas of the Former Fort Ord within MPWMD boundaries that are not served by water sources from the Seaside Groundwater Basin or the Carmel River Basin, including the Alluvial Aquifer. The ordinance is proposed to eliminate the apparent regulatory conflict that exists between District Rule 20 and certain provisions of a 1992 Amended Memorandum of Agreement (Amended MOA) signed in May 1993 between MPWMD, Monterey County Water Resources Agency (MCWRA), and the Pajaro Valley Water Management Agency (PVWMA).

Specifically, the Amended MOA addressed the issue of overlapping jurisdictional boundaries of MPWMD and MCWRA on former Fort Ord by determining that MCWRA would be the sole regulator of water delivery systems to the former Fort Ord. At the same time, the MOA also stated that MPWMD shall have exclusive authority to regulate the management of the Seaside Groundwater Basin within Fort Ord boundaries. The practical ramification of the proposed Ordinance is that new construction served by the Marina Coast Water District (MCWD) from Salinas Groundwater Basin water sources would not be regulated by MPWMD. A schematic map of the Former Fort Ord, MPWMD and Seaside Basin boundaries is provided as Exhibit 18-B for general reference. Please see the “Discussion” section below for more information.

A second related topic of consideration is whether District staff should initiate discussions to facilitate an emergency intertie between the California American Water (Cal-Am), Seaside Municipal Water Company (SMWC) and MCWD supply systems. It is assumed that such an emergency intertie would be governed by a formal agreement or other instrument that is yet to be determined. The discussion would focus on shared supply to preserve public health and safety during emergencies such as an earthquake, terrorist attack, temporary water system failure, or severe drought. The discussion would not view the shared water supply as available for everyday situations or augmentation purposes. Anticipated participants in the discussion include: MPWMD, MCWRA, MCWD, Cal-Am and SMWC.

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

1. Direct staff to perform California Environmental Quality Act (CEQA) review on Concept Ordinance No. AA (Exhibit 18-A), and return the ordinance for a first reading before the Board at a future date. The ordinance would add exemption #11 to Rule 20-C to exempt that portion of District territory lying within the former Fort Ord from the WDS permit requirements described in Rule 20, if the source of supply is not derived from the Seaside or Carmel River Basins. Concept Ordinance No. AA is the same ordinance reviewed by the Water Demand Committee with the exemption of a few non-substantive typographic and format refinements.

2. Direct staff to initiate discussions with MCWD, MCWRA, SMWC, and Cal-Am regarding an emergency intertie between the Cal Am, MCWD and SMWC systems. The product of these discussions would come back to the District for formal review and concurrence.

At its January 23, 206 meeting, the Water Demand Committee unanimously approved the concept Ordinance, as well as the concept of an emergency intertie. The ordinance and intertie concepts were also verbally supported in a subsequent conference call with MCWD and MCWRA. MCWD and SMWC have already initiated informal discussions about an emergency intertie between their respective systems. Cal-Am’s General Manager indicated no objection to the intertie concept in an informal conversation with the MPWMD General Manager.

It is noted that the Concept Ordinance refers to the Carmel River Basin and Carmel Valley Alluvial Aquifer. Though highly unlikely to be used as sources of water for the Former Fort Ord, these sources of supply were added for completeness and to ensure the District’s ability to regulate use of water from the Carmel River watershed.

BACKGROUND and DISCUSSION: On December 16, 1991 the MPWMD Board authorized the execution of a Memorandum of Understanding (MOU) between the MCWRA, PVWMA, and MPWMD. The proposed MOU was negotiated among the three entities in response to 1990 State legislation (SB 285 Mello), which eliminated the Monterey County Flood Control and Water Conservation District and replaced it with a newly created Monterey County Water Resources Agency (Stats. 1990, c. 1159). The provisions of SB 285 that are pertinent to this policy issue are as follows:

Sec. 85. (a) The Pajaro Valley Water Management Agency and the Monterey

Peninsula Water Management District shall work with the agency and shall use

their best efforts to cooperate with each other.

(b) The Agency, the Monterey Peninsula Water Management District, and the

Pajaro Valley Water Management Agency shall, on or before February 1, 1992,

make a good faith effort to enter into a memorandum of agreement as to the

manner in which the agency shall exercise powers in any area of overlapping

jurisdiction among the three local water entities.

Sec. 86. This act does not alter the authority of the Monterey Peninsula

Water Management District or the Pajaro Valley Management Agency.

Prior to its approval by all three entities, the original MOU was changed to resolve overlapping jurisdictional authority resulting from the federal government’s decision to close Fort Ord, and to address the Seawater Intrusion Program being implemented by the MCWRA using recycled wastewater produced by the Monterey Regional Pollution Control Agency. For clarity, the MOU was renamed a Memorandum of Agreement (MOA) and it included an addendum that gives MCWRA exclusive authority to regulate water delivery systems serving the Fort Ord area, including within MPWMD boundaries. The Amended MOA also provides that MPWMD is to exercise exclusive authority to regulate management of the Seaside Groundwater Basin within the Fort Ord boundary. The Amended MOA (Exhibit 18-C) was approved and executed by the three entities in May 1993, though September 28, 1992 is designated as the date of the MOA for reference purposes.

The pertinent text of the MOA is Sections 3(a) and 3(b) as follows:

The MCWRA shall have exclusive authority to regulate water delivery systems that deliver water to the area that is both within the present Fort Ord boundaries and within the MPWMD boundaries in existence at the time of the regulation, and the MPWMD will comply with any such ordinance enacted by MCWRA.

The MPWMD shall have exclusive authority to regulate the management of the Seaside groundwater basin within the present Fort Ord boundaries, and the MCWRA will comply with any such ordinance enacted by the MPWMD.

In relation to regulation of Water Distribution Systems, MPWMD General Counsel’s interpretation of the MOA is that WDS facilities operated by the MCWD within the Fort Ord area would not be regulated within District boundaries as long as the source of supply is not from the Seaside Basin. If Seaside Basin sources are contemplated by MCWD or any other user, the current WDS regulations would apply. To date, MPWMD Rules & Regulations (specifically Rule 20) have not been revised to comport with the Amended MOA by “carving out” the portion of former Fort Ord within the District boundary from its permitting requirements, nor making it clear that waters derived from the Seaside Basin would be regulated by MPWMD.

It is noted that MPWMD regulation of the Seaside Basin would be consistent with the Superior Court’s January 2006 Tentative Decision regarding the Seaside Basin adjudication. Specifically, the Tentative Decision (page 57) states that it “does not purport to forbid any regulation of the Basin which may be required by a public agency [such as MPWMD or MCWRA] possessing the power to impose such regulation.”

The Marina Coast Water District produces and distributes water from the Salinas Valley Groundwater Basin to serve potable demands within the existing city of Marina, and is the designated water service provider on the Former Fort Ord. MCWD will continue to amend, expand and extend its water distribution system to serve existing and new housing, commercial retail and office buildings, educational facilities and other redeveloping properties within the County unincorporated area and cities that comprise portions of Former Fort Ord. MCWD does not plan to tap Seaside Basin resources, according to Marc Lucca, MCWD Interim General Manager. MCWD and MCWRA management staff have asserted that MPWMD agreed to withdraw from regulating that portion of the former Fort Ord water distribution system lying within the MPWMD territory, under terms of the Amended MOA.

The MPWMD General Manager initiated a June 30, 2005 discussion with the general managers of MCWD and MCWRA on the subject of how best to resolve this apparent conflict. Both general managers asserted their belief that the intent of the Amended MOA was to avoid duplication of regulatory authority, and that the Amended MOA made it unnecessary for MCWD to obtain permits under Rule 20 for its planned extension/expansion of the water distribution system serving former Fort Ord within MPWMD boundary. The managers were advised of MPWMD General Counsel Laredo’s opinion that the Amended MOA does not supersede MPWMD Rules and Regulations, and that the only way to eliminate the conflict would be to amend the applicable rule(s). In order to resolve this matter, in the June 30, 2005 meeting, the MPWMD General Manager expressed a willingness to propose the Rule 20-C text change described in the concept Ordinance (Exhibit 18-A).

In September 2005, Mr. Laredo met with MCWD’s general counsel, Lloyd Lowery. The two attorneys differed on their interpretations of the effect of the 1990 State law and the Amended MOA as it relates to pre-existing MPWMD Rules and Regulations.

The proposed the emergency inter-tie concept is suggested as being in the public interest of all effected entities due to the ability to provide assistance in the event of an emergency. As noted above, subsequent telephone conferences (most recently on February 8, 2006) confirmed the support of Cal-Am, MCWD and MRWRA of the intertie concept. The managers agreed that amending the 1993 MOA was not the preferred means to achieve an intertie. Rather a separate agreement or other instrument is recommended. Also, a February 8, 2006 telephone call to the California Department of Health Services confirmed that agency’s support for an emergency intertie to maintain public health and safety in an emergency.

EXHIBITS

18-A Concept Ordinance No. AA with proposed change to Rule 20-C

18-B Schematic map of Fort Ord, MPWMD and Seaside Basin boundaries

18-C 1992 Amended MOA

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