ITEM:		PUBLIC HEARING
1.	HEARING ON APPARENT INSUFFICIENT PHYSICAL SUPPLIES TO SERVE RYAN RANCH WATER DISTRIBUTION SYSTEM AND DETERMINATION AS TO WHETHER, AND TO WHAT EXTENT, SYSTEM CAPACITY AND/OR EXPANSION CAPACITY LIMITS SHOULD BE MODIFIED
Meeting Date:			January 21, 2009	Budgeted:	N/A
From:			David C. Laredo,	Program/	N/A
			General Counsel	Line Item No.:
				Cost Estimate:	N/A
General Counsel Approval: Yes
Committee Recommendation: N/A
CEQA Compliance: Class 21 Exemption – Enforcement Action, Guideline section 15321

SUMMARY: The Board of Directors for the Monterey Peninsula Water Management District (“MPWMD” or “District”) shall convene an administrative hearing pursuant to District Rule 40 to determine whether the Ryan Ranch Water Distribution System (“WDS” or “System”) has sufficient physical supplies of water to meet demand, and whether modifications to System Capacity and/or Expansion Capacity Limits should be made.

RECOMMENDATION: The District should conduct the hearing on the Ryan Ranch WDS and allow any Party to address the issue as to whether or not physical water supplies for that WDS are sufficient, and what modifications to System Capacity or Expansion Capacity Limits, if any, should be made. After the hearing, the Board should determine whether to uphold or modify the System Capacity or Expansion Capacity limits, or both. If modifications are made, the decision should quantify new System Capacity and/or Expansion Capacity Limits and may set forth relevant conditions. The Chair may direct District Counsel to prepare a tentative decision for Board review and adoption at a later meeting. Adoption of the decision may then be on the consent calendar, or may be set as an action item.

BACKGROUND: The District enacted a comprehensive scheme, dating back to 1980, to review and regulate creation and expansion of water systems. For each WDS, a District permit sets a System Capacity and an Expansion Capacity. The District defines those terms by ordinance, as codified by its Rules and Regulations (District Rules) in District Rule 11.

District Rule 11 defines “System Capacity” as the amount of water in gallons, cubic feet or Acre-Feet that can be produced for annual delivery to a WDS based on the cumulative Sustained Yield of Wells adjusted for periodic lowering of the water table and the projected yield of other Sources of Supply; “Expansion Capacity Limit” as the maximum number of connections beyond which a Water Distribution System is not authorized to Expand.

California American Water (CAW) owns and operates the Ryan Ranch WDS pursuant to the 1989 Ryan Ranch WDS Permit. This WDS permit specifies that the Ryan Ranch WDS System Capacity is 175 acre-feet per year (“AFY”). On September 19, 2008, General Manager Darby Fuerst forwarded a letter (“Notification”) pursuant to Rule 40 that sets forth his determination that the physical water supplies that serve CAW’s Ryan Ranch WDS do not appear sufficient to support the System Capacity specified in the Ryan Ranch WDS permit. (September 19, 2008 letter from D. Fuerst to C. Anthony, attached as Exhibit 1-A.)

Pursuant to District Rule 40 (b), when Notification is issued by the General Manager, the District Board of Directors shall hold a hearing to determine whether, and to what extent, modifications should be made to the WDS System Capacity and/or Expansion Capacity Limits. (District Rule 40(B) (2) (b).) This hearing allows the Board of Directors to determine the sufficiency of physical supplies available to serve the Ryan Ranch WDS. (Rule 40, attached as Exhibit 1-B).

The hearing is a civil proceeding and should provide an opportunity for all Parties to address the District’s determination that physical water supplies are insufficient to serve the System, as well as any proposed modifications to permitted System Capacity or Expansion Capacity Limits. Parties may include the District, CAW as the owner of the owner or operator of the WDS, other owners or occupants of parcels within the WDS, and other persons potentially affected by modification of these limits. Notice to property owners in the Ryan Ranch WDS service area has was sent to advise of this hearing. (January 9, 2009 Hearing Notice attached as Exhibit 1-C.) By letter dated January 7, 2009, Craig E. Anthony presented information and the position of CAW with respect to this matter. (January 7, 2009, letter from C. Anthony to D. Fuerst, attached as Exhibit 1-D.)

The hearing should be conducted in substantially the manner as set forth in the December 23, 2008, memorandum from District General Counsel, “Hearing Guidelines re: Ryan Ranch Water Distribution System,” attached as Exhibit 1-E.

Modification of the System Capacity or Expansion Capacity Limits, or both, is required to be supported by substantial evidence, including credible expert analysis, that establishes physical water supplies available to the WDS are not sufficient to meet permitted System Capacity or Expansion Capacity limits. (District Rule 40(B)(3).) The Board is required to render a written decision, with findings, which may thereafter be subject to judicial review within ninety (90) days pursuant to the provisions of the Code of Civil Procedure, section 1094.6. (District Rule 16.)

Courts have held that “substantial evidence” is evidence of “ponderable legal significance which is reasonable in nature, credible and of solid value.” Substantial evidence is not synonymous with “any” evidence. Generally, substantial evidence is defined as “relevant evidence that a reasonable mind might accept as adequate to support a conclusion.

The Chair of the Board shall preside over the hearing. Only facts presented during the hearing may be taken into account as forming a basis for the decision of the Board. The Board has the authority to administer oaths or affirmations (through the Chair), hear testimony, receive and weigh evidence, and issue a final order which includes findings of fact and conclusions of law.

District General Counsel shall not act as prosecutor or as defense counsel at this hearing, but shall instead provide general advice and consultation to the Chair and Board. District General Counsel, upon request of the Chair, may prepare a draft tentative decision, including proposed findings and order. The Board shall have sole authority to accept, reject or modify any tentative decision, findings or order.

The District has retained Fran Farina to assist staff for the purposes of this hearing. Ms. Farina has performed as an independent attorney for this purpose, and has had no contact or direction from District General Counsel. This action has been taken to avoid any possibility of bias or potential due process violation. Ms. Farina and staff shall present evidence and/or testimony in support of the General Manager’s determination regarding sufficiency of physical water supplies to the Ryan Ranch WDS.

At the hearing, Ms. Farina and staff bear the burden of proof to establish whether, and to what extent, modifications should be made to the System Capacity or Expansion Capacity Limits, or both, presently specified for the WDS. The burden of proof shall be substantial evidence that establishes physical water supplies available to the WDS are not sufficient to meet permitted limits, and if so, what new System Capacity or Expansion Capacity Limits should be adopted. Any report submitted by District staff shall constitute prima facie evidence of the respective facts contained in those documents. This means that the report may be enough evidence by itself to support the District’s determination.

After the Chair closes the hearing, the Board shall take the matter under submission. The Board may discuss the matter and reach a decision that determines whether to uphold or modify the System Capacity or Expansion Capacity limits, or both. If modifications are made, the decision should quantify the new System Capacity or Expansion Capacity Limits and set forth conditions as may be relevant. The Decision should list findings of the Board to support the decision, stating the reasons therefore. The Chair may direct District Counsel to prepare a tentative decision, for Board review and adoption at a later meeting. Adoption of the decision may then be on the consent calendar, or may be set as an action item. The Board’s written determination and Notice of Decision shall be served upon all Parties. The decision of the Board shall be final.

If any Party disagrees with the Board’s final written determination, that matter may be reviewed in the Superior Court by petition for writ of mandate in accord Rule 16 of the District Rules, which incorporates by reference section 1094.6 of the California Code of Civil Procedure.

EXHIBITS

1-A September 19, 2008 letter from D. Fuerst to C. Anthony

1-B District Rule 40

1-C January 9, 2009 Hearing Notice

1-D January 7, 2009 letter from C. Anthony to D. Fuerst

1-E December 23, 2008, memo from District General Counsel

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