ITEM:		INFORMATIONAL ITEMS/STAFF REPORTS
31.	QUARTERLY WATER SUPPLY PROJECT STATUS REPORT
Meeting Date:			January 28, 2010	Budgeted:	N/A
From:			Darby Fuerst,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Henrietta Stern	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

This is a quarterly report on Monterey Peninsula Water Management District water supply augmentation projects for the October through December 2009 period. The next quarterly report will be written in April 2010. Detailed quarterly updates have been prepared for the January, April, July and October regular Board meetings through October 2009. Starting with the January 2010 report, limited background information is provided. The reader should refer to previous reports through October 2009 for a detailed historical overview of previous action. A brief monthly report on Strategic Plan objectives is provided at each regular Board meeting. This information can be found by clicking on the pertinent agenda item on the District website at:

http://www.mpwmd.dst.ca.us/asd/board/meetings/meeting.htm.

Updated weekly information is also available in the General Manager’s letter to the Board at:

http://www.mpwmd.dst.ca.us/gmletters/gmletters.htm.

An MPWMD Board Special Workshop on water supply alternatives was held on March 27, 2008, which provided good background information. Please refer to the District website at:

http://www.mpwmd.dst.ca.us/asd/board/boardpacket/2008/20080327/0327agenda_rev.htm

For the past several years, the MPWMD Board has identified water supply goals and objectives at Strategic Planning Workshops. The most recent workshop was held on November 10, 2009, and resulted in 90-day, 3-year and 5-year goals, which were adopted at the Board’s December 14, 2009 meeting (Exhibit 31-A).

Action on 90-Day Goals

The following paragraphs describe action on the adopted 90-day water supply goals in the October –December 2009 period; the identified completion date is February 28, 2010. The goals are numbered for reference only, and do not reflect priority.

Goal 1: Actively join with Marina Coast Water District (MCWD), California American Water (CAW), Monterey County Water Resources Agency (MCWRA), Monterey Regional Water Pollution Control Agency (MRWPCA), and Jurisdictions to provide input on the regional water supply planning process. Have meaningful influence over the type, management and financing of the selected regional project.

The Final EIR for CAW’s proposed Coastal Water Project (CWP) was received on October 30, 2009 and certified by the California Public Utilities Commission (CPUC) on December 17, 2009. A combination of projects, known as the Regional Project, was identified as the preferred alternative. The Regional Project features a 10 million gallon per day (MGD) desalination project to be constructed by MCWD in north Marina, in concert with CAW and MCWRA, along with aquifer storage and recovery and recycled wastewater components. MPWMD and other parties have not been included in the discussions on how the Regional Project would be constructed, operated, managed and financed. Thus, MPWMD formally requested that the CPUC include MPWMD in the settlement discussions. This request was granted, and the first all-party meeting was held on November 17, 2009.

Throughout November and December 2009, MPWMD continued to participate in the CPUC-sponsored “alternative dispute resolution” meetings on the Regional Project, with emphasis on costs, management, oversight and accountability to the community. This effort included MPWMD counsel and staff legal analysis, technical and financial testimony, and several meetings. The CPUC held a status conference on January 4, 2010.

MPWMD continues to meet with CAW and local agencies regarding water supply planning in various settings with the intent of full participation in such meetings.

Goal 2: For the Aquifer Storage and Recovery Phase 1 Project, (a) inject at least 500 acre-feet of water in the 2010 season (assuming adequate streamflow), with infrastructure in place to enable 100% efficiency, and (b) determine the full project completion date.

Aquifer storage and recovery (ASR) entails diverting excess water flows, if available, in the winter season (December 1 through May 31) from the Carmel Valley Alluvial Aquifer through existing CAW facilities and injecting the water into the Seaside Groundwater Basin for later recovery in dry periods. District staff met with CAW consultants and staff in October and November 2009 to coordinate roles, responsibilities and tasks needed to enable operation of the Phase 1 ASR Project at full capacity by December 1, 2009 (if streamflow is adequate). These tasks were completed on time. A key issue is potential disruption to the Phase 1 activities during the planned realignment of General Jim Moore Blvd. near the ASR site in early 2010, a crucial injection period. District staff is coordinating with FORA regarding this issue, but this question was not fully resolved at year’s end.

Adequate river flow and Phase 1 start-up operations began on Sunday, December 13, 2009. Mean daily river flow was 179 cubic feet per second (cfs) at the District’s Highway 1 gage on December 14, 2009, which enabled diversion of a maximum of 6.7 cfs of Carmel River water in accordance with the bypass flows allowed in the joint MPMWD/CAW Phase 1 ASR water rights permit. The two ASR-1 wells were carefully ramped up to full capacity this first week, with extra care taken to address turbidity issues. There were some initial set-backs due to a broken meter that resulted in brief periods of injection greater than the rated capacity of the project for a few days. Flows fell below the permitted bypass criteria on December 30, 2009. A total of 129.5 AF were diverted and injected in this first injection period.

A secondary task was obtaining the City of Seaside building permit for the Chemical/Electrical building at ASR Phase 1 site. This entailed architectural review as well as response to technical questions. The District continued to coordinate with City staff on several remaining technical issues in December 2009. A request for bids for the building construction was let with a deadline of January 27, 2010.

Goal 3: For the Aquifer Storage and Recovery Project Phase 2, determine the timetable for project development/completion.

The project timeline is dependent on a variety of factors, especially selection of an adequate ASR Phase 2 site. MPWMD obtained permission from the Monterey Peninsula Unified School District (MPUSD) and a permit from the City of Seaside to drill a test/monitor well at the Fitch Middle School site. The test well was drilled during the week of October 12-16, 2009, while the school was not in session. The hydrogeology appears to be promising for additional wells in this area, and discussions have commenced with MPUSD regarding construction of two permanent wells near Fitch School. An exemption from a City of Seaside use permit might be possible for these wells.

A second major issue affecting project development is water rights. CAW dropped two water rights protests it had previously filed against District’s applications, and focused on functioning as partners in this effort. The District held separate Phase 2 water rights settlement meetings with protestants National Marine Fisheries Services (NMFS) and the Carmel River Steelhead Association (CRSA). Settlement with NMFS appears to be feasible in the near-term, but more work is needed to address CRSA concerns.

A third issue is the capacity of the CAW system to deliver injection water to the Phase 2 project. This matter is the subject of ongoing ASR coordination meetings.

Goal 4: For the MPWMD “95-10 Desalination Project,” determine if the Board should continue pursuit of project development.

District consultants completed hydrogeologic field work along the Fort Ord coastline on September 22, 2009. Laboratory analyses were conducted in October and a technical report on desalination project feasibility was prepared for consideration by the Board at its December 14, 2009 meeting.

At a presentation to the Board on December 14, the consultant confirmed the technical report’s conclusion that the coastal Fort Ord hydrogeology does not support its use as the source of subsurface feedwater for a desalination project, and the District should not pursue the project. This is primarily due to the fact that there is not a clay barrier to protect the lower Paso Robles and Santa Margarita aquifers from contamination by seawater extracted for the desalination project. The Board directed staff to provide a description of desalination projects investigated by MPWMD in the past in order to assess whether there are any remaining viable local desalination options within the District.

Goal 5: For the MRWPCA Groundwater Replenishment Project (2,000+ AFY), schedule a presentation from MRWPCA to the MPWMD Board on cost, legal issues, timeline and next steps.

The Board directed staff to assess current status of MRWPCA Groundwater Replenishment Project (GRP). Possibilities include purified wastewater for irrigation only, and/or as potable supply through groundwater injection. District staff continues to assist MRWPCA staff, as requested. A briefing is planned for January 28, 2010.

Action on 3-year and 5-Year Goals

3-Year Goal: Resolve Fate of San Clemente and Los Padres Dams

Since mid-2009, District staff has participated in workshops and discussions regarding the removal of San Clemente Dam. These efforts culminated in a January 11, 2009 signing ceremony, hosted by U.S. Rep. Sam Farr, wherein numerous entities, including the District, pledged cooperation on dam removal and re-routing of the Carmel River.

At the direction of the Board, District staff pursued options for increasing storage at Los Padres Dam and Reservoir, owned by CAW. This effort stalled when CAW responded to District inquiries in an October 5, 2009 letter, which stated that CAW has “no interest” in making modifications to the dam. A written report is provided as Agenda Item 3 in the January 28, 2010 Board packet.

5-Year Goal: Operate Within Safe Yield of Seaside Basin

A Court adjudication of the Seaside Groundwater Basin was completed in March 2006 and amended in February 2007. The Court determined that the Seaside Basin is in overdraft; set a reduced “natural safe yield” and a near-term “operating yield” allowed to be produced by the parties as they work toward a “physical solution” (including ASR and wastewater reclamation) to eliminate the overdraft. A nine-member Watermaster Board was created to implement the Decision with continued oversight by the Court. The MPWMD holds one seat on the Watermaster with two out of 13 votes, and regularly participates at the monthly meetings. The District and its consultants have also been retained by the Watermaster to carry out certain technical tasks to help implement the Seaside Basin Monitoring and Management Program (SBMMP). District staff also contributes by serving as a Technical Committee member.

Other Relevant Action Affecting Water Supply

SWRCB Cease and Desist Order: On January 15, 2008, the SWRCB issued a draft Cease and Desist Order (CDO) against CAW. The Draft CDO refers to the 1995 SWRCB Order 95-10, and notes that compliance with Order 95-10 (i.e., find a replacement water supply to offset unlawful diversions from the Carmel River Basin) had not been achieved after 12 years. CAW protested the Draft CDO and was granted a formal hearing before the SWRCB in Summer 2008. The District and several other parties were allowed to be parties in this proceeding.

Several revisions to the Draft CDO were promulgated by the SWRCB, culminating in a final determination by the SWRCB Board on October 20, 2009. The District immediately filed suit to challenge this ruling and the Monterey County Superior Court issued a stay on November 3, 2009. The SWRCB on November 13, 2009 asked the Court to dissolve the stay. The court ruled on November 23, 2009 that the stay will remain in effect. The SWRCB also requested a change in venue for technical reasons and their concerns about the ability to receive an impartial trial in the Monterey area. The Court set a January 8, 2010 hearing on the change in venue, for which District counsel and staff prepared briefs and other required paperwork in late December 2009. District counsel and staff, at the direction of the Board, will continue to actively participate in litigation on the CDO in 2010. The first major hearing on the stay itself is set for January 27, 2010. In related action, the District Board and staff began addressing changes in District conservation rules that may be needed if the CDO becomes effective.

EXHIBITS

31-A Strategic Plan-Short and Long-Term Goals, 90 Days to 5-Years

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