EXHIBIT 18-B

 

Carmel River Basin:  

Proposal for Watershed-Wide Comprehensive Steelhead Recovery Actions

for Settlement Agreement Fund Application

 

 January 2010

 

Introduction

 

In March 2009 a Settlement Agreement was completed between California American Water (CAW), the U.S. Department of Commerce, National Oceanic and Atmospheric Administration (NOAA Fisheries), and the California Department of Fish and Game (CDFG) with regards to impacts resulting from well pumping and water withdrawals by CAW from the Carmel River.

 

The Settlement Agreement identifies a payment schedule to fund mitigation activities that address impacts resulting from water withdrawals. These payments began on July 1, 2009 and will continue until July 2016 or until CAW terminates unlawful diversions from the Carmel River Basin (as described in ordering paragraph two in the State Water Resources Control Board Order No. WR 95-10).  CAW made the initial payment of $3.5 million in July 2009 to CDFG, which is the organization charged with administering these funds to projects that accomplish the following in Section II B. of the Settlement Agreement:

 

All payments made under this agreement shall be used to fund projects to improve habitat conditions for, and production of, SCCC steelhead, and/or otherwise aid in the recovery of SCCC steelhead in the Carmel River Watershed. The funds shall be expended only for mitigation of those impacts from well-pumping and water withdrawals by Cal Am Water that were originally intended to be addressed by Phase II of Tier I of the Conservation Agreement.

 

CDFG is allowed to use up to 13% of each mitigation payment as adjusted for inflation, on an ongoing basis throughout the term of the Agreement for reimbursement of any costs it incurs to administer, manage, and monitor the funds and projects funded. CDFG is also expected to seek to maximize the value of the funds by seeking cash or in-kind matching contributions from fund recipients or non-State, third party project partners whenever possible.

 

Carmel River Basin Steelhead Population Status and Recovery Objectives

 

The South-Central California Coast (SCCC) steelhead is “currently not endangered but likely to become so in the foreseeable future…” according to NOAA Recovery Priority Guidelines[1] and as stated in the “2007 Federal Recovery Outline for the Distinct Population Segment of South-Central Coast prepared by the National Marine Fisheries Service, Southwest Regional Office, September 2007.” The South-Central California Coast DPS consists of 36 watersheds with steelhead runs that have declined from an estimate of 25,000 adults annually to less than 500 returning adult fish. The Carmel River Basin has experienced a decline in its run size of 90% or more.

 

According to the Recovery Outline, the principal threats to the viability of the SCCC Steelhead DPS include:

 

  • Water developments altering natural stream flows and impeding or blocking passage
  • Alteration of floodplain and estuarine habitats and associated riparian corridor
  • Increased development and associated road construction
  • Degradation of remaining estuarine habitat from point and non-point sources
  • Artificial breaching of sand bars

 

The Recovery Outline for the SCCS DPS includes the following Strategic Recovery Actions and Priority Conservation Actions pertinent to the Carmel River Basin.

 

Strategic Recovery Actions

 

  1. Identify and commit to a core set of population(s) on which to focus recovery efforts
  2. Secure the extant part of the inland populations
  3. Identify and maintain sustainable refugia against severe droughts and heat waves
  4. Begin collecting population data
  5. Secure and improve estuarine/lagoon habitat and plan for inundation and displacement of habitats due to climate change
  6. Establish programs for ecosystem-based management of sediment regimes and hydrographic regimes

 

Priority Conservation Actions

 

Spatial Distribution:       - Remove fish passage impediments to upper habitats and refugia

 

Survival of Juveniles:     - Ensure/maintain flows to juvenile rearing areas

                                    - Enhance protection of natural in-channel and riparian habitat

                                    - Restore estuarine habitats

                                    - Control artificial breaching/draining of lagoons/estuaries

- Transportation corridors: eliminate existing approach-fill and maximize clear spanning of active channels, floodways, floodplains to accommodate natural and estuarine fluvial processes

- Reduce water pollutants

 

Comprehensive Approach to Maintaining Carmel River Steelhead

 

Several agencies and organizations have a common interest in protecting Carmel River steelhead and have come together to discuss complementary actions that could be taken with the existing Settlement Agreement funds.  These actions are intended to maintain the existing tenuous population of Carmel River steelhead while making progress toward the completion of a set of water supply projects for the Monterey Peninsula and for portions of northern Monterey County. The water supply projects are not a part of the actions contained in the NOAA-CAW Settlement Agreement, but when completed will result in reduced diversions from the Carmel River Basin.

 

Collectively, the projects and actions proposed for funding through the Settlement Agreement involve increasing flow or maintaining adequate water levels to the Carmel River lagoon, reducing diversions from the basin, and direct mitigation actions to address limiting factors which result from water withdrawals and well pumping. These limiting factors include:

 

  • Reduction of flows and drying of mainstem and tributaries;
  • Passage impediments to juveniles and adults;
  • Stranding of adults and juveniles;
  • Reduction of suitable rearing habitat in the main stem, tributaries, and at the lagoon;
  • Compromised quality of rearing habitat in the main stem, tributaries, and at the lagoon;
  • Increased chance of predation resulting from compromised rearing habitat and reduced depth;

 

The comprehensive approach proposed by agency and organization partners focuses on addressing the following set of actions that together provide a more sustainable and functioning ecosystem for the Carmel River steelhead. These actions reflect current findings of research conducted by NOAA Fisheries Southwest Science Center on the lagoons of the Central Coast (Hayes, et al)

 

  • Provision of increased flows via direct flows and contribution of water storage on alluvial floodplain to the lower river and especially to the lagoon during rearing periods;
  • Provision of enhanced habitat (deeper, colder, geomorphically diverse) for the lagoon and lower river for sustaining adequate water quality conditions to maximize rearing and health of juveniles and adults utilizing the lagoon;
  • Maintain or increase the viability of young of the year and juveniles released to the river from the Sleepy Hollow Steelhead Rearing Facility;
  • Create opportunities for maintaining higher lagoon levels and reduce the need for mechanical breaching of the barrier beach;
  • Demonstrations of water conservation by model projects in the watershed with cooperative landowners

 

These actions should be collectively pursued throughout the watershed in order to provide sustained improvement in habitat condition, juvenile viability, passage, and rearing conditions. This is the preferred approach rather than implementing individual projects without a collective watershed-based approach to sustaining habitat and geophysical functions of the river. Additionally, cost savings in design and environmental review may be realized by comprehensively reviewing the projects for common technical studies and information needed.

 

Project Descriptions and Types of Anticipated Habitat Improvements

 

I. Lower River and Lagoon Habitat Projects

 

Projects Goals:           1. Sustain and Create Viable Lagoon and Lower River Habitats

2. Improve and Sustain Adequate Water Quality Conditions

3. Increase Rearing Viability

Projects:                    

 

PROJECT #1: Carmel River Large Woody Debris Project – Phase II

Main Project Focus: Enhanced habitat including provision of scour objects, deeper water areas and cover against predation

Estimated Cost: $340,000

                                   

PROJECT #2: Supplemental Water Inflows for Lower River – Water Augmentation from Existing Wells and Treated Effluent from Carmel Area Wastewater District Plant

Main Project Focus: Provide source of freshwater inflows during rearing and low flow periods either through direct discharge or discharge in receiving wetlands or channel

Estimated Costs for all Project components: $3,500,000

 

PROJECT #3: Carmel River Lagoon Ecosystem Protection Barrier for Sustaining Higher Lagoon Levels

Main Project Focus: Maintain lagoon levels at higher elevation thus providing more habitat area and deeper water column; negate need for artificial breaching of lagoon during tidal and storm events that threaten nearby structures

Estimated Cost: $1,283,000

 

PROJECT #4: Lower Carmel River Floodplain and Riparian Restoration Project

Main Project Focus: Restore hydrologic connectivity between east side of floodplain to west side of floodplain including lagoon; provide up to 85 acres of restored riparian and wetland habitat; reduce or potentially eliminate  use of private well for agricultural operations thus providing reduction in well pumping in lower river.

Estimated Cost: Seeking only support for design and engineering - $800,000

 

The total project cost of these improvements is estimated at $5.8 million based on project descriptions from project partners but cost savings could be experienced by combining projects reducing the costs to $5.0 to $5.6 million possibly.

 

Synergies and Benefits of Projects Proposed at the Carmel River Lagoon

 

The value of the Carmel River Lagoon and Carmel River State Beach has long been recognized, but action to protect and enhance steelhead habitat at the lagoon has lagged this recognition.  Key problems at the lagoon are maintaining adequate quantity and quality of water.  Upstream diversions and mechanical breaching of the barrier beach to prevent flooding of low-lying properties and infrastructure cause reductions in both quality and quantity of water at the lagoon.  In addition, construction of Highway 1 has erected a barrier to flow that disconnects the floodplain up and downstream of Highway 1 and has reduced habitat complexity in the lower river and natural scour capabilities of flood events.

 

Project 1 will provide refugia for migrating adults and juveniles.  This is especially important during low flow periods when the lagoon is open to the ocean and diversions upstream have the most effect on inflows to and through the lagoon.  In addition, during summer periods when the river is dewatered and the lagoon is not connected to the river, large wood can provide habitat for juveniles that cannot migrate upstream to find higher quality habitat.

 

Use of treated water from the CAWD plant proposed in Project 2 can provide water to the lagoon at a time when the lagoon water quality and quantity is at its lowest.  While the lagoon can hold nearly 500 acre-feet (AF) before flooding occurs, annually the lagoon shrinks to as little as 10 AF in the dry season.  To compound the problem of a shrinking volume of fresh water during the dry season, wave overwash from the ocean typically begins filling the lagoon with saltwater and organic matter shortly after the lagoon reaches its annual low.  This often results in warm, brackish water that is low in dissolved oxygen.  The CAWD treatment plant could process up to nearly one AF/day for use at the lagoon.  Over a period of several months, this could result in a significant overall “freshening” of the lagoon and, more importantly, provide much needed refugia in the dry season for juvenile steelhead.  

 

The protective barrier proposed with Project 3 can be combined with treated water from Project 2 to increase the quality and quantity of fresh water at the lagoon.  Annually in the spring, State Parks closes the barrier beach to outflow in order to raise the lagoon level prior to the cessation of river inflow.  The maximum targeted level due to a closure is 10 feet, but in practice it is difficult to attain this level.  This 10-foot level is a compromise to allow an increase in the lagoon level without flooding surrounding properties.  Installation of a barrier would eliminate the constraint due to the potential for flooding and it is possible that the lagoon could be managed to a level of between 11 and 12 feet.  This could nearly double the volume of the lagoon at the start of the dry season and result in increased groundwater recharge in the lagoon vicinity. Feasibility assessment is the first phase needed for this project and would include geotechnical investigation of lagoon soils, preliminary drainage analysis of local inflow, and landowner access and permission negotiations.

 

Floodplain restoration described in Project 4 can restore frequent flood flows to portions of the lagoon in the south arm that currently are flooded only when there is a backwater created at the Carmel River State Beach.  Previous to construction of Highway 1, the south arm would receive scouring flows when the river occupied the floodplain on the south side of the river.  After construction of Highway 1, overland flow has occurred only at the highest of flows (i.e., greater than the 10-year event) and usually for just a few hours each event.  Frequent flows into the south arm would increase channel complexity through scour and the transport of woody material.  In addition, providing a connection from the south arm upstream during frequent flows would provide off-stream areas for anglers to fish during periods of high velocity.  Properly designed seasonal floodplain wetlands can provide enhanced rearing habitat for steelhead rearing as demonstrated in the Yolo Bypass off the Sacramento River.  Reducing or eliminating the use of a well on site would reduce diversions from the lower river during the dry season. This project is ready for final design and engineering to complete 100% plans and specifications.

 

Shared Costs and Projected Savings for Lower River and Lagoon Habitat Projects

 

Project #

Shared Costs for Design, Engineering, Feasibility Studies

Shared Costs for Environmental Review & Permitting

Shared Costs for Project Construction

Estimated Cost Savings

1: LWD

No

No – environmental analysis already  completed

No

$0

2: Water Augmentation

Yes with Project #4 for groundwater studies and wetland design

Yes with Project #4 for CEQA and permitting possibly; may be able to do Neg Dec. or include in EIR for both

Yes with Project #4 if receiving wetland is on BSLT site or project timed together for bidding and construction

$200,000 - $800,000

3. Barrier

Possibly with #4 for hydrologic/hydraulic calculations

Possible with # 2 & #  4 savings on permits

No

$8,000 - $25,000

4. Floodplain

Yes with #2 above

possible with # 2, #3

Yes with #2

Same as #2

Totals

 

 

 

$233,000-$833,000

 

II. Maintain and Support Steelhead Population Numbers

 

Projects Goals:           1. Maintain viability of facility through retrofits

2. Utilize rearing facility through winter storm period

 

Project #5: Sleepy Hollow Rearing Facility Retrofit

Main Project Focus: Retrofit of facility to avoid future issues with sedimentation damage to intakes and thus provide longer holding time for fish before release

Estimated Cost: $1,072,000

 

III. Provide Demonstration Project for Water Conservation

 

Project Goals:                        1. Demonstrate water conservation actions in watershed

                                    2. Provide site for demonstration and public outreach

 

Project #6: St Dunstan’s Rainwater Harvesting Project

Main Project Focus: Off set on-site irrigation use with rainwater storage system.

Estimated Cost: $225,500

 

These two projects document an additional $1.3 million in projects with targeted goals of sustaining population by providing private water conservation options and through enhancing the success and utility of an existing steelhead rearing facility for fish rescued from drying portions of the river.

 

Conclusion and Proposal for Project Funding

 

Funding Proposal:

 

Assumptions:

  • First $3.5 million is distributed via block grant from State Coastal Conservancy
  • Assume no administrative overhead charged for this $3.5 million through SCC (savings of $455,000 to remain with projects)
  • Assume $1.1 million to be disbursed on July 1, 2010 for next payment
  • Total for projects for round one of FRGP grant in Spring 2010 is $957,000 assuming payment of $1.1 million on July 1, 2010 and deduction of DFG administrative fee of $143,000. This funding would go towards construction of CAWD or Lagoon Barrier project as determined with remaining payments focused on completing these two projects

 

Proposed Project Breakdown for Funding for Block Grant

 

Project Number

Proposed SCC Block Grant Totals

Match Amount

Remaining Need

FRGP 2010 Priority and Beyond

#1 - LWD

$330,000

$61,476 in kind

$0

#2 - Water Augmentation

$665,000

 

$2,835,000

#3 -  Lagoon Barrier

$360,000

$15,000 in kind

$923,000

#4 – Floodplain Restoration

$800,000

$200,000 cash

$0

#5 – Sleepy Hollow

$1,072,000

$15,000 in kind

$0

#6 – Rain Harvesting

$225,000

 

$0

TOTALS

$3,452,000

$276,476 (8.5%)

$3,758,000

 

This expenditure plan provides for the full construction of three major projects geared towards steelhead improvement in the river or water conservation demonstration. It provides final design and engineering for an additional project and feasibility analysis for two other projects. These last three projects together will provide comprehensive habitat improvements to the lower lagoon over several years.

 

The remaining funds to be distributed are $48,000 from the $3.5 million currently available if SCC does not charge administrative cost allowed by Settlement Agreement. It is proposed that this funding be provided for a comprehensive project accounting and reporting consultant to be available for all projects under a collective accounting agreement thus saving project administrative costs for each project. A private accountant could be hired for this purpose.

 

Another alternative suggested for remaining funds was to complete review of diversions throughout the Carmel system for potential illegal diversions and develop an action plan to address.

 

 

 

 

 

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