ITEM:		GENERAL MANAGER’S REPORT
11.	UPDATE ON DEVELOPMENT OF WATER SUPPLY PROJECTS
Meeting Date:			January 23, 2012	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			David J. Stoldt	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: The District has adopted a leadership position in the community with respect to water supply planning. Specifically, it has adopted five water supply projects that it believes are important to meeting the impending Supply Gap beginning in 2017 as a result of legally imposed reductions in water production from the Carmel River and Seaside Basin. The District continues to weigh and consider additional water supply concepts, in addition to its adopted projects and the Regional project, as they arise.

This report identifies activities related to water supply projects in the past month.

DISCUSSION:

Regional Desalination Project

District staff met with representatives of the County, Marina Coast Water District (“MCWD”), and Cal-Am December 16^th, 20^th, 21^st and January 4^th and 11^th to discuss governance of the Regional Desalination Project should it move forward.

However, on January 17^th Cal-Am announced that it was withdrawing support for the Regional Desalination Project, effectively terminating that project. That announcement is attached as Exhibit 11-A. The announcement came on the heels of Judge Villareal’s December 22^nd ruling that MCWD should have been the lead agency on the project EIR – a decision that could have potentially delayed the project another 12 to 18 months.

District Water Projects 1-5

The Water Supply Planning Committee met on December 20^th.

Water Project #2: The District has scheduled a meeting January 25^th with Cal-Am engineers to discuss parameters and constraints to expanded ASR, beyond the planned Phase 2.

Water Project #5: A letter from the National Oceanic and Atmospheric Administration Nation Marine Fisheries Service (“NOAA Fisheries”) was reviewed. The letter is in response to the District’s inquiry in October 2011 regarding either a new dam on the Carmel River or increased capacity to the exiting Los Padres Dam and Reservoir. NOAA Fisheries is not supportive of either proposal. The letter is included under Item 15, Letters Received, in this packet.

Implementation timelines and work requirements for Water Projects 2-5 were summarized in matrix form and appear as Exhibit 11-B in this packet. This portfolio of District projects will continue to be developed and modified as alternatives to the Regional Project are discussed in greater detail with Cal-Am and other agencies. Due to the User Fee situation and budget constraints, implementation items that can be performed internally will be pursued, but major tasks that require expenditure of funds will be discussed and prioritized during District budget discussions in the Spring.

Cities Joint Exercise of Powers Agreement

In early January, a Joint Exercise of Powers Agreement to create the “Monterey Peninsula Regional Water Authority” by and between the six Peninsula cities was released as the cities began the process of ratification by their city councils. The City of Carmel approved it on January 10^th at its regular meeting; The City of Pacific Grove was unable to reach consensus at a special meeting January 12^th and has continued it to its January 18^th regular meeting; The City of Monterey and Sand City considered it at their January 17^th regular meetings; The City of Seaside met on January 19^th; and Del Rey Oaks on January 24^th.

The Agreement and the City of Carmel staff note are attached as Exhibit 11-C.

EXHIBITS

11-A Regional Desalination Project Press Release

11-B Water Supply Implementation Summary Matrix

11-C Mayors’ JPA Agreement and Staff Note

U:\staff\Boardpacket\2012\20120123\GMreport\11\item11.docx