ITEM:		PUBLIC HEARING
1.	CONTINUED 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:			May 20, 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 (“District”) previously convened an administrative hearing pursuant to District Rule 40 as to 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. That hearing is closed. This session enables the Board to review evidence and argument in this proceeding, to reach a tentative decision, and to provide direction as to preparation of formal findings of fact and conclusions of law to support this decision

RECOMMENDATION: The Chair, as presiding officer, should rule on the parties request that each be allowed a brief oral opportunity to recap their positions.

The Board should then consider and discuss the evidence in the record, as well as arguments made by the parties, before it reaches a decision 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 in accord with Rule 40.

The Board’s decision reached at this meeting will be a preliminary one. The Chair may direct District Counsel or others to prepare the draft final decision, with findings and conclusions, to support the decision. These will then be returned to Board for review and adoption at a later meeting either on the consent calendar or as an action item. After adoption, the Board’s final determination and a Notice of Decision shall be served upon all Parties. The decision of the Board shall be final.

BACKGROUND: The District previously held an administrative hearing on the sufficiency of Ryan Ranch WDS water supplies pursuant to District Rule 40. Parties to that hearing included the District staff prosecution team, California American Water, Wilson Street Investors, LLC, Ryan Court Investors, LLC, and Community Hospital of the Monterey Peninsula.

That hearing is closed and the parties have submitted written arguments to support their positions. Opening and closing briefs are available for review. This meeting provides the Board an opportunity to review and discuss the matter, in light of the record and taking into consideration the arguments of the parties.

Under the District’s Rules, a permit is issued to each water system to set its System Capacity and Expansion Capacity. These terms are defined by ordinance, as found 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 pursuant to Rule 40 that set forth his determination that the physical water supplies that serve CAW’s Ryan Ranch WDS did not appear sufficient to support the System Capacity specified in the Ryan Ranch WDS permit. This letter triggered the requirement, under District Rule 40 (b), for the District Board of Directors to hold the hearing to determine as to whether, and to what extent, modifications should be made to the WDS System Capacity and/or Expansion Capacity Limits.

Based upon the record and the arguments of the parties in this proceeding, Rule 40 requires the Board of Directors to determine the sufficiency of physical supplies available to serve the Ryan Ranch WDS. If the Board determines physical water supplies are insufficient to serve the System, it may then modify the permitted System Capacity or Expansion Capacity Limits.

Modification of the System Capacity or Expansion Capacity Limits, or both, is required to be supported by substantial evidence, including credible expert analysis that establish physical water supplies available to the WDS are not sufficient to meet permitted System Capacity or Expansion Capacity limits. (District Rule 40(B)(3).) 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 District staff, and its counsel Ms. Fran Farina, have 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.

The Board is required to render a written decision, with findings.

The decision of the board may 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.)

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