ITEM:		PUBLIC HEARING
15.	CONSIDER ADOPTION OF APRIL THROUGH JUNE 2012 QUARTERLY WATER SUPPLY STRATEGY AND BUDGET
Meeting Date:			March 19, 2012	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Kevan Urquhart	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: Notice of Exemption, CEQA, Article 19, Section 15301 (Class 1)
ESA Compliance: Consistent with the 2001 Conservation Agreement, 2009 Settlement Agreement between the National Marine Fisheries Service and California American Water to minimize take of listed steelhead in the Carmel River, and SWRCB WR Order Nos. 95-10, 98-04, 2002-0002, and 2009-0060.

SUMMARY: The Board will accept public comment and take action on the April through June 2012 Quarterly Water Supply Strategy and Budget for California American Water’s (Cal-Am) Main and Laguna Seca Subarea Water Distribution Systems (WDS). The proposed budgets, which are included as Exhibit 15-A and 15-B, show monthly production by source of supply that is required to meet projected customer demand in CalAm’s Main and Laguna Seca Subarea systems, i.e., Ryan Ranch, Bishop, and Hidden Hills, during the April through June 2012 period. The proposed strategy and budgets are designed to maximize the long-term production potential and protect the environmental quality of the Seaside Groundwater and Carmel River Basins.

Exhibit 15-A shows the anticipated production by Cal-Am’s Main system for each production source and the actual production values for the Water Year (WY) 2012 to date through the end of February 2012. The anticipated production values assume that Cal-Am’s annual main system production for customer service will not exceed 13,009 acre-feet (AF), including 2,701 AF from Cal-Am’s wells in the Coastal Subareas of the Seaside Groundwater Basin, 300 AF from Sand City Desalination Plant, 1,117 AF from Water Project 1 (formerly Phase 1 ASR), and 8,831 AF from the Carmel River Basin. The total from the Carmel River Basin is consistent with State Water Resources Control Board (SWRCB) Order No. 95-10 and 2009-0060. The total from the Seaside Groundwater Basin is consistent with the Seaside Basin Adjudication Decision, and includes 32 AF of “Carryover Credit” from WY 2011 that Cal-Am was allowed to produce, but did not produce that year due to physical constraints within its existing delivery system. For the purpose of this budget, it is conservatively assumed that Critically Dry inflow conditions will occur for the rest of WY 2012.

Exhibit 15-B shows the anticipated production by Cal-Am’s Laguna Seca Subarea system for each production source and the actual production values for WY 2012 to date through the end of February 2012. Please note that the budgeted production values assume that Cal-Am’s annual production for WY 2012 will not exceed 147 AF from the Laguna Seca Subarea of the Seaside Groundwater Basin, whereas actual demand will exceed that amount. This total is consistent with the Seaside Basin adjudication decision.

If stream flow in the Carmel River exceeds the instream flow requirements specified by National Marine Fisheries Service (NMFS), a portion of the “excess” water may be diverted by Cal-Am for injection into the Seaside Groundwater Basin as part of Water Projects 1 and 2. The amount of water diverted from the Carmel River that is treated and delivered for injection will also depend on competing customer demand and the condition of Cal-Am’s wells in the Carmel Valley at that time.

RECOMMENDATION: The Board should receive public input, close the Public Hearing, and discuss the proposed quarterly water supply budget. District staff recommends adoption of the proposed budget. The budgets are described in greater detail in Exhibit 15-C, Quarterly Water Supply Strategy Report: April – June 2012.

BACKGROUND: The Quarterly Water Supply Strategy and Budget pertains to production within Cal-Am’s Main and Laguna Seca Subarea systems for the three-month period of April, May, and June 2012. Staff from the District, Cal-Am, California Department of Fish and Game (CDFG), National Marine Fisheries Service (NMFS), and the U. S. Fish and Wildlife Service (USFWS) cooperatively developed this strategy on March 8, 2012. Based on current reservoir and Carmel Alluvial Aquifer storage conditions, river flows in October 2011 through February 2012, it was agreed that “Critically Dry” year inflows would be used to conservatively assess Cal-Am’s operations and set monthly production targets for Cal-Am’s systems.

To meet customer demand in its main system, Cal-Am intends to try to avoid producing any groundwater from its wells in the Upper Carmel Valley during April through June 2012, and will focus instead on producing approximately 694, 799, and 868 AF of groundwater from its wells in the Lower Carmel Valley during April, May, and June 2012, respectively. Of this production, it is assumed that 150 AF would be diverted from the Carmel River and injected for storage into the Seaside Groundwater Basin during April and May 2012.

It was also agreed that, subject to rainfall and runoff conditions in the Carmel River Basin, Cal-Am would produce 363, 450, and 450 AF of water in April, May and June 2012, respectively, from the Coastal Subareas of the Seaside Basin, in addition to 25 AF per month from the Sand City Desalination Plant during this period. It was also agreed that Cal-Am would budget to produce 10, 14, and 16 AF of groundwater from its wells in the Laguna Seca Subarea for its customers in the Ryan Ranch, Bishop, and Hidden Hills systems during this period. Lastly, it was agreed that Cal-Am would not divert any water from San Clemente Reservoir through the Carmel Valley Filter Plant during this quarter. Cal-Am will operate its wells in the Lower Carmel Valley in a downstream-to-upstream order. If actual inflows are more or less than projected for the budget period, the group will reconvene and adjust the diversion and release rates accordingly.

Rule 101, Section B of the District Rules and Regulations requires that a Public Hearing be held at the time of determination of the District water supply management strategy. Notice of this Public Hearing has been published in The Herald. Adoption of the quarterly water supply strategy and budget is categorically exempt from the California Environmental Quality Act (CEQA) requirements as per Article 19, Section 15301 (Class 1). A Notice of Exemption will be filed with the Monterey County Clerk's office, pending Board action on this item.

EXHIBITS

15-A Quarterly Water Supply Strategy and Budget for CAW Main System: April - June 2012

15-B Quarterly Water Supply Strategy and Budget for CAW Laguna Seca Subarea: April - June 2012

15-C Quarterly Water Supply Strategy and Budget Report: April - June 2012

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