ITEM:		ACTION ITEMS
23.	RECEIVE REPORT ON MPWMD 95-10 DESALINATION PROJECT
Meeting Date:			December 14, 2009	Budgeted:	Yes
From:			Darby Fuerst,	Program/
			General Manager	Line Item No.: 1-3-1
Prepared By:			Andrew Bell	Cost Estimate:	$195,000 in FY 2009-10 Budget
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: At the January 29, 2009 meeting, the Board authorized the General Manager to enter into a contract with Martin Feeney, Consulting Hydrogeologist, to conduct hydrogeologic investigations for a seawater desalination project with intake facilities located in the southern portion of Fort Ord Dunes State Park. Earlier review of some aspects of the project, known as the MPWMD 95-10 Desalination Project, had been conducted by District consultants Camp Dresser & McKee Inc. (CDM) and ICF Jones & Stokes Associates (JSA) in 2008. The report by Mr. Feeney, titled “Monterey Peninsula Water Management District 95-10 Desalination Project Hydrostratigraphic Investigation” and dated November 2009, contains findings and conclusions that bear on the feasibility of the 95-10 Desalination Project as currently envisioned.

Copies of the report have been provided to Board members under separate cover and are available for public review at the District office.

RECOMMENDATION: The Board should receive a presentation by staff and Martin Feeney, followed by public comment. Staff and the consultant will be available to answer questions. Staff recommends that the Board formally receive the November 2009 report by Martin B. Feeney, with assistance from Pueblo Water Resources, Inc., titled “Monterey Peninsula Water Management District 95-10 Desalination Project Hydrostratigraphic Investigation.”

BACKGROUND: At the January 24, 2008 Board meeting, the Board endorsed Director Brower’s request to direct staff to prepare a report on requirements to update the MPWMD 95-10 Project, a seawater desalination project proposed to be located in Sand City that was most recently studied by MPWMD in 2004. At the April 21, 2008 Board meeting, the Board authorized Phase 1 studies of the project, termed a “constraints analysis,” to be conducted by CDM and JSA. Representatives of these two firms presented their report at the August 18, 2008 Board meeting. At that meeting, the Board directed that the consultants be authorized to address additional policy issues related to the feasibility of the project. The report on the consultants’ findings and conclusions regarding these issues was received by the Board at the October 20, 2008 meeting. At that meeting, the Board directed staff to bring a scope of work, costs, and schedule for the next phase of studies for the project.

CDM and JSA prepared a proposed scope of work for Phase 2 studies with input by District staff and with information obtained at a meeting with Mat Fuzie and Ken Gray of the California Department of Parks and Recreation in Monterey. CDM and JSA’s proposed scope of work included field hydrogeologic investigations of seawater extraction sites in the coastal area of the Fort Ord Dunes State Park west of Highway 1. The proposed scope also included installation and testing of a production well, groundwater modeling, and a study of the use of the regional treatment plant outfall for disposal of brine from the desalination plant. The Phase 2 work would also have included development of a detailed project description suitable for analysis in accordance with the California Environmental Quality Act, as well as planning-level capital and annual operation and maintenance costs of the project.

At the November 24, 2008 Administrative Committee meeting, members of the committee did not make a formal recommendation to the Board, but rather directed that the item be presented to the full Board for consideration. The committee members requested that staff describe alternative approaches to investigation of the project, including proceeding with the hydrogeologic investigation but not the engineering portion of the project (detailed project description and cost estimates) until more is known regarding the potential for obtaining a supply of seawater from coastal wells without adversely affecting the Salinas Valley or Seaside Groundwater Basins. Committee members also suggested that the hydrogeologic investigation could be contracted to a firm or individual other than CDM and that environmental review and permitting could be conducted by JSA, another firm, or MPWMD staff. Depending on the outcome of those investigations, engineering and environmental review could follow.

At the December 8, 2008 Board meeting, the full Board supported this more focused and limited approach. Following the Board meeting, staff met with Martin Feeney, Consulting Hydrogeologist, to discuss tasks required to complete the only the hydrogeologic investigations. Based on these discussions, Mr. Feeney submitted a proposal for a more limited, step-wise approach. This approach was approved by the Board at their January 29, 2009 meeting at a cost not to exceed $291,800.

The first step of the investigation was to collect, map, and analyze existing hydrogeologic information. Mr. Feeney presented the results of this phase to District staff in a July 16, 2009 Technical Memorandum. This document included proposals for the field program, to consist of a number of soil borings to determine the nature of the shallow dune sands and whether there is a continuous, low-permeability layer that would allow the project to avoid impacts to the Seaside Groundwater Basin or the Salinas Groundwater Basin. The field work portion of Mr. Feeney’s studies was significantly delayed by the need to obtain approval from the California Coastal Commission. Denise Duffy & Associates, subcontractors to Martin Feeney, prepared a February 2009 report titled “MPWMD 95-10 Desalination Project, Hydrostratigraphic Field Program, Project Information and Environmental Checklist,” containing information required by the Coastal Commission. The Coastal Commission approval of the field program was in the form of a Coastal Development Permit waiver, which became effective July 9, 2009. The field work was conducted in September 2009. Soil samples collected during the soil borings were sent to a testing lab for grain-size analysis to provide an indication of the yield that could be expected from wells located in the shallow dune sands. Mr. Feeney’s November 2009 report describes the data collection and field testing completed by him and his subcontractors, and provides findings, conclusions, and recommendations regarding the MPWMD 95-10 Project.

Report Findings, Conclusions and Recommendations

Findings are presented on pages 8 through 19 of Mr. Feeney’s November 2009 report. Conclusions and recommendations are presented on pages 20 and 21. The basic conclusion is that the project as envisioned is not feasible. The Conclusions section ends as follows:

“In summary, the data do not support the feasibility of developing a source of subsurface feedwater on coastal Fort Ord. The development of a well-field to extract seawater from the shallow aquifer would cause migration of seawater inland. Due to the lack of an areally extensive low-permeability layer in the project area, this seawater could migrate down contaminating the underlying fresh water aquifer system. This is considered a fatal flaw from an environmental and permitting perspective.

“Even if there were evidence for an extensive low-permeability layer, or the potential environmental impacts considered acceptable, the siting constraints of both the Coastal Commission and the State Parks, combined with the relatively low-permeability sands limit the potential amount of feedwater that could be developed and thusly limit project size to a maximum of about 2,000 acre-feet per year.” [This potential yield is based on the use of slant well technology for the intake of feedwater.]

MPWMD Staff Hypothetical, Reconnaissance-Level Estimate of Project Costs

Even though the project is deemed to be infeasible, staff was asked to provide an estimate of costs. The target yield of earlier investigations of the project was 8,400 acre-feet per year. Mr. Feeney’s report concludes that land-use constraints in Fort Ord Dunes State Park limiting the number of feedwater intake wells, combined with well yields projected based on the grain-size analyses, result in a total project yield of approximately 1,050 acre-feet per year assuming conventional vertical wells are used to produce the feedwater. Due to the low anticipated yield of a project, even if it were possible to develop without impacting the Seaside and/or Salinas Valley Groundwater Basins, the cost of water produced would be high.

District Engineer Andrew Bell made a very rough estimate of what the costs would be, based on cost estimates by CDM in earlier studies of the 95-10 Desalination Project and on cost estimates prepared by RMC Water and Environment, consultant to Marina Coast Water District, for the Regional Water Supply Project and by Cal-Am consultants for the Coastal Water Project. A summary of the costs estimated by Mr. Bell for a project utilizing vertical wells and yielding 1,050 acre-feet per year (see page 21, first paragraph in Mr. Feeney’s November 2009 report for background on this yield amount) are as follows:

Total Capital Costs $42,000,000

Annualized Capital Costs 3,400,000 per year

(7% for 30 years)

Total Annual O&M Costs 1,200,000 per year

Total Annual Costs $ 4,600,000 per year

Unit Cost $ 4,400 per acre-foot

The estimated unit cost of water is high due to a combination of low project yield and extensive facilities that would be needed for a desalination project regardless of size, including plant controls, electrical transmission facilities, and the trenching, installation, and backfill for pipelines to convey water from intake wells to a plant, for treated water delivery, and for brine discharge. This results in a reverse “economy of scale” effect. Also, the costs shown above do not include some potentially significant additional costs, including rights-of-way, transmission and storage facilities within the Cal-Am system, and a fee for the use of the MRWPCA outfall for brine discharge.

IMPACT TO DISTRICT STAFF/RESOURCES: On January 29, 2009, the Board authorized professional services by Mr. Feeney at a cost not to exceed $291,800. Costs for services provided by Mr. Feeney and his subcontractors billed and paid through September 30, 2009 total approximately $67,140, including approximately $27,610 in Fiscal Year (FY) 2008-09. For work in FY 2009-10, the budgeted amount is $195,000. Because tasks included in the scope of work in Mr. Feeney’s professional services agreement will not proceed, costs in FY 2009-10 will be significantly less than budgeted.

District Engineer Andrew Bell is administering the professional services agreement with Mr. Feeney. Mr. Bell and Water Resources Manager Joe Oliver have performed various tasks related to the project, including assisting in development of the detailed field investigation plan, coordinating meetings with permitting agencies, obtaining needed permissions from State Parks and the Coastal Commission, and developing and providing project-related information to the consulting team.

Exhibits

None

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