ITEM:	PUBLIC HEARINGS
14.	CONSIDER RESCISSION OF WATER CREDIT TRANSFERRED FROM 784 FOAM STREET (APN 001-016-015) TO THE CITY OF MONTEREY
Meeting Date:		November 20, 2006	Budgeted:	N/A
From:		David C. Laredo,	Program/	N/A
		General Counsel	Line Item No.:
Reviewed By:		Stephanie Pintar	Cost Estimate:	N/A
General Counsel Approval: Prepared by Counsel
Committee Recommendation: N/A
CEQA Compliance: Action on Writ from Superior Court – Case No. 72061

SUMMARY: This action rescinds all approvals and vacates the water credit transfer previously authorized from Assessor’s Parcel Number 001-016-015 on Foam Street to the City of Monterey. The action is compelled by the Writ of Mandate After Appeal issued on October 16, 2006 by Judge Robert O’Farrell in Save Our Carmel River (SOCR) v. MPWMD and the City of Monterey.

RECOMMENDATION: The Board should rescind its prior approvals and vacate the water credit transfer previously authorized from Assessor’s Parcel number 001-016-015 on Foam Street to the City of Monterey. The effect of this rescission shall be the extinction of the original 0.789 AF Water Use Credit.

BACKGROUND: On October 18, 2004 the District approved the application of Foursome Development Company for a Property-To-Jurisdiction Water Use Credit Transfer under District Rule 28-B. (The action to approve the transfer was adopted on a vote of 4 – 2. Directors Edwards, Knight, Pendergrass and Potter voted in favor of the motion. Directors Lehman and Markey were opposed. Director Foy was absent.)

The transfer allowed 0.671 AF (acre-feet) of Water Use Credits from 784 Foam Street (a.k.a. 738, 765, 790 Foam Street) in Monterey to the City of Monterey, and also provided as a part of the transfer that the District retain 15 percent (0.118 AF) of the original 0.789 AF Water Use Credit. Accordingly the amount transferred was 0.671 AF.

The 0.789 AF Water Use Credit originated from demolition of 11,474 square-feet of commercial space at 784 Foam Street (a.k.a. 738, 765, 790 Foam Street). That demolition occurred in November, 2004. The application to transfer the water was brought before the District board less than a month before the water credit would have otherwise expired – November 1, 2004 – under operation of District Rules. The District Board approved the requested transfer to the City of Monterey. The City proposed that the transferred water later be returned to the same site for use.

Before the Board acted on the requested transfer in 2004, the City of Monterey had acted as Lead Agency under CEQA. The City reviewed the water credit transfer and determined that the proposed water credit transfer could not have a significant effect on the environment and is exempt from the provisions of CEQA (the California Environmental Quality Act). The District acted as a Responsible Agency and followed the recommendation of the City. This determination was made in reliance of the Categorical Exemption under CEQA Guidelines Section 15302 (Class 2). The City of Monterey reasoned that water credit to be released to the originating site in the future would allow construction of a structure in similar size to the one that was demolished, and that Section 15302 allows an exemption for replacement or reconstruction of existing structures on the same site when the new structure will have substantially the same purpose and capacity as the structure replaced.

Approvals granted to the project by both the City of Monterey and MPWMD were challenged by three parties in a single action by Writ of Mandate: Save Our Carmel River, Patricia Bernardi and The Open Monterey Project. The original matter was heard by Judge Robert O’Farrell’s who denied the petition on June 27, 2005, affirming the water credit transfer decisions of both the City and the District. The Petitioners appealed this ruling and the Sixth District Court of Appeal reversed Judge O’Farrell’s earlier ruling and instead directed that an order granting the writ of mandate be issued from the Superior Court. Judge O’Farrell issued the Writ of Mandate After Appeal on October 16, 2006.

The effect of the order after appeal is that the District has been ordered to vacate all approvals of the water use credit transfer from Assessor’s Parcel number 001-016-015 on Foam Street to the City of Monterey.

The Writ of Mandate After Appeal also provides:

The Board of Directors is ordered not to take any further action to approve the water use credit transfer without the consideration of adverse impacts and “the cumulative impacts of other transfers” (MPWMD Rule 28-B.1), including consideration of the relevant evidence from which to make an informed decision, in accordance with the decision of the Court of Appeal in this matter. The Class 2 CEQA exemption (Guidelines § 15302) is not to be used for this transfer project. The Board of Directors is ordered not to take any further action to approve the project without (1) the preparation, circulation, and consideration under CEQA of a legally adequate environmental determination with regard to the impacts, including cumulative impacts, of the project, and (2) compliance with regard to the District’s rules, especially rule 28-B.1, which requires the Board of Directors to consider “the impacts of the [transfer] application under consideration, as well as the cumulative impacts of other transfers, on the water supply.”

Insofar as the water credit originating at 784 Foam Street (a.k.a. 738, 765, 790 Foam Street) in Monterey would otherwise have expired on November 1, 2004, no further action is required or timely respecting this water credit. The effect of this rescission shall be the extinction of the original 0.789 AF Water Use Credit.

EXHIBITS

14-A Peremptory Writ of Mandate After Appeal

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