ITEM:		CONSENT CALENDAR
9.	PROPOSITION 84 PLANNING AND IMPLEMENTATION GRANT APPLICATIONS (A) CONSIDER APPROVAL OF RESOLUTION 2010-11 IN SUPPORT OF FILING A PROPOSITION 84 PLANNING GRANT APPLICATION (B) Authorize the General Manager to ENTER INTO GRANT AGREEMENTS (C) CONSIDER EXPENDITURE OF BUDGETED FUNDS to retain consultants for professional services TO PREPARE A GRANT APPLICATION
Meeting Date:			July 19, 2010	Budgeted:	$25,000
From:			Darby Fuerst, General Manager	Program/	Protect Environmental Quality
				Line Item No:	2-6 IRWMP and Grant Applications
Prepared By:			Larry Hampson	Cost Estimate:	$25,000
General Counsel Review: N/A
Committee Recommendation: The Administrative Committee reviewed this item on July 13, 2010 and recommended approval.
CEQA Compliance: N/A

SUMMARY: The California Department of Water Resources (DWR) is proposing to award approximately $120 million statewide in Fiscal Year 2010-11 under two separate grant programs funded through Proposition 84 (The Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coast Protection Bond Act of 2006). Expected grant amounts for which the Monterey Peninsula, Carmel Bay and Southern Monterey Bay planning region is eligible to apply for are: 1) Up to $1 million in Round 1 Planning Grant funds to update the existing Integrated Regional Water Management Plan (IRWM Plan). The local cost match for this type of grant is expected to be between 25% to 50% of the total cost to update the IRWM Plan; and 2) A portion of Round 1 Implementation Grant funds that are anticipated to be between $5.78 and $11.56 million for the Central Coast funding area. The local cost match for this type of grant is expected to be a minimum of 25% of the total cost for implementing projects. Both grant programs are competitive, so there are no guarantees that this region will receive grant funding from either program.

At this time, District staff is requesting authorization to move forward with a Planning Grant application only. When more details are known about the Implementation Grant application requirements and costs associated with preparing an application, District staff may seek Board approval to prepare an Implementation Grant application. It is likely that the deadline for submitting an Implementation Grant application will be in late 2010, after the application period for submittal of a Planning Grant application closes.

RECOMMENDATION: If this item is approved, the Board will:

A) Adopt Resolution 2010-11 to apply for Planning Grant funding under Proposition 84;

B) Authorize the General Manager to enter into a contract with the State of California to receive Planning Grant funds to update the Monterey Peninsula, Carmel Bay and Southern Monterey Bay Integrated Regional Water Management Plan. The General Manager will also be authorized to negotiate sub-grantee agreements with local agencies, non-profits, and consultants to carry out the scope of work described in the State of California grant contract;

C) Authorize the General Manager to enter into agreements with consultants for professional services associated with completing a grant application to DWR at a cost not-to-exceed $25,000.

District staff recommends approval of the above actions.

BACKGROUND: The District is currently the designated lead agency for making a Planning Grant application to DWR. It is anticipated that DWR will release the final Proposition 84 IRWM guidelines and announce a Planning Grant round in late July or early August 2010 with a grant application deadline anticipated to be late September 2010. Planning grants can be used to update the existing IRWM Plan to Prop. 84 standards, to complete salt and nutrient management plans for recognized groundwater basins (a future requirement for the Seaside and Carmel River basins), and to update an existing planning element in the IRWM Plan.

District staff recommends that the Board approve Resolution 2010-11, which will authorize the work necessary to prepare a grant application and authorize the General Manager to enter into an agreement with the DWR to receive grant funds (Item 9A). District staff is also recommending authorization for the General Manager to enter into sub-grantee agreements to disburse funds for completing an IRWM plan update (Item 9B). In addition, District staff is recommending approval to expend up to $25,000 in District funds to retain consultants to assist staff in preparing the necessary information and filing applications with DWR (Item 9C).

If this region is awarded grant funds, the District would be responsible for grant administration. For a planning grant, the District would provide grant administration part of a local cost match (in-kind services). The level of service would be similar to that carried out in 2006-07 with a $497,000 Planning Grant from DWR.

Staff is proposing to apply to DWR for a Planning Grant of up to $1 million. At a minimum, the scope of work would include an update of the existing Integrated Regional Water Management Plan to Prop. 84 standards. An update is a requirement for receiving Prop. 84 Implementation Grant funds to carry out individual projects. In addition, the scope of work may include an update of the Canyon Del Rey watershed drainage study, tasks to develop a comprehensive flood control plan for the lower four miles of the Carmel River, development of salt and nutrient management plans for the Carmel River and Seaside Groundwater Basins, and work to select an alternative to dry weather stormwater discharges into the Pacific Grove Area of Special Biological Significance. MPWMD is coordinating with several stakeholders on a scope of work for these tasks. These include the Big Sur Land Trust, Monterey County Water Resources Agency, Marina Coast Water District, Monterey County Public Works Department, City of Monterey, City of Seaside, Pebble Beach Company, Carmel Area Wastewater District, and the Monterey Regional Water Pollution Control Agency.

The scope of work to be completed with a Planning Grant is currently under development and will depend on the ability of MPWMD and its partners to identify a local match, which will likely be between 25% to 50% (minimum). Expenses to update an IRWM Plan that are incurred after September 30, 2008 and before the award of a grant can be considered as a local match (e.g., expenses to obtain data in the Seaside Groundwater Basin may be used as a local match for developing a salt and nutrient management plan).

An application for a Planning Grant will likely be due in late September 2010. In order to complete a grant application on time and to be competitive at the statewide level, District staff is proposing to retain a qualified consultant to assist in developing and reviewing a scope of work and task list. If there are unexpended funds after a Planning Grant application is submitted to DWR, staff proposes to use the funds to prepare information for MPWMD-sponsored projects to be included in an Implementation Grant application later this year (i.e., Phase 2 of the Seaside Groundwater Basin Aquifer Storage and Recovery Project, work at the Lower Carmel River Restoration and Floodplain Enhancement Project, and an expansion of the District’s Water Conservation Retrofit Program).

DWR has revised the IRWM program and published draft guidelines for providing grants to be funded by Prop. 84 and 1E. Draft solicitation packages for Planning, Implementation, and Stormwater grants have also been published. DWR is expected to publish final documents beginning in late July or early August 2010. Initially, DWR proposed to conduct Planning and Implementation Grant rounds simultaneously with applications being due six to eight weeks after the final Proposal Solicitation Package (PSP) announcements. Based on comments from around the State, it appears that DWR will stagger each grant round, but hold to relatively short application periods. It is District staff’s understanding that DWR will begin with a Planning Grant PSP, and follow in sequence with Implementation Grant and Stormwater Grant PSPs.

MPWMD is eligible to apply to all three grant programs and is currently the only local agency that can apply for a Round 1 Implementation Grant. Several local stakeholders have expressed interest in applying for Planning and Implementation Grant funds. However, no organization within the region has come forward with a request for Prop. 1E funds, which require a minimum of a 50% local cost match.

MPWMD has recently facilitated meetings among stakeholders and the Regional Water Management Group formed to guide and implement the IRWM Plan. As a result of those meetings, staff has begun developing a scope of work for a Planning Grant application. A suite of projects to be included in an Implementation Grant application has also been tentatively identified.

In addition, MPWMD continues to work with DWR and planning agencies in the Central Coast funding region to develop a fair and equitable method for allocating IRWM funds from Prop. 84 to the Central Coast. The Central Coast was allocated $52 million in Prop. 84. DWR has proposed that Planning Grants be funded with a 50/50 mix of allocated and non-allocated (inter-regional) Prop. 84 funds. For example, a $1 million Planning Grant from DWR would reduce the allocated portion by $500,000. Currently, five of the six planning regions in the Central Coast have expressed interest in applying for Planning Grant funds. Only San Luis Obispo County does not anticipate applying for these funds.

IMPACT ON STAFF/RESOURCES: The length of time to prepare a grant application after a final Proposal Solicitation Package is announced is expected to be relatively short (six to 10 weeks). MPWMD anticipates that one or more consultants will be required to complete a grant application.

Application for a Prop 84 Planning Grant will be completed by the District’s Planning and Engineering Division staff with assistance from the Water Resources Division and a consultant to be retained. Larry Hampson, Senior Water Resources Engineer, is the District’s Prop. 84 grant application coordinator. Minimal direct costs may be incurred to obtain relevant documents from other agencies and to copy and mail the application. If the District receives a planning grant, staff time will be required to update the Integrated Regional Water Management Plan, to coordinate with other agencies, and to administer the grant. The local contributing match is anticipated to be a combination of in-kind services from stakeholders (including MPWMD), such as staff labor and cash contributions.

EXHIBITS

9-A Resolution No. 2010-11

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