ITEM:		PUBLIC HEARING
7.	CONSIDER ADOPTION OF JULY THROUGH SEPTEMBER 2012 QUARTERLY WATER SUPPLY STRATEGY AND BUDGET
Meeting Date:			June 12, 2012	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Kevan Urquhart/	Cost Estimate:	N/A
			Jonathan Lear
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 September 2001 and February 2009 Conservation Agreements between the National Marine Fisheries Service and California American Water to minimize take of listed steelhead in the Carmel River and Consistent with 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 July through September 2012 Quarterly Water Supply Strategy and Budget for the California American Water (Cal-Am) Main and Laguna Seca Subarea Water Distribution Systems (WDS). The proposed budget, which will be presented at the meeting as Exhibits 7-A and 7-B, will show monthly production by source of supply that is required to meet projected customer demand in Cal-Am’s Main and Laguna Seca Subarea systems, i.e., Ryan Ranch, Bishop, and Hidden Hills, during the July through September 2012 period. The proposed strategy and budget is designed to maximize the long-term production potential and protect the environmental quality of the Seaside Groundwater and Carmel River Basins. The exhibits for this item are not available in advance due to the early timing of this month’s Board meeting.

Exhibit 7-A will show 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 May 2012. The anticipated production values assume that Cal-Am’s annual main system production 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 8,891 AF from the Carmel River Basin. The total from the Carmel River Basin is consistent with State Water Resources Control Board (SWRCB) Water Rights Order Nos. 95-10, 98-04, 2002-0002, 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 assumed that Dry inflow conditions, similar to the same months in WY 1991, will occur for the last quarter of WY 2012.

Exhibit 7-B will show the anticipated production by Cal-Am’s Laguna Seca Subarea systems for each production source and the actual production values for WY 2012 to date through the end of May 2012. Please note that the anticipated production values assume that Cal-Am’s annual Laguna Seca Subarea systems’ production 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.

RECOMMENDATION: The Board should receive public input, close the Public Hearing, and discuss the proposed quarterly water supply budget. District staff will recommend adoption of the proposed budget. The budget will be described in greater detail in Exhibit 7-C, Quarterly Water Supply Strategy Report: July – September 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 July, August, and September 2012. Staff from the District, the California Department of Fish and Game (CDFG), Cal-Am, and National Marine Fisheries Service (NMFS) will meet to cooperatively develop this strategy on June 7, 2012. Based on current reservoir and Carmel Valley Alluvial Aquifer storage conditions, and the rainfall that has occurred to date, it was determined that “dry” year inflows would be used to assess Cal-Am’s operations and set monthly production targets for Cal-Am’s systems for the next quarter. Once the parties have agreed to the water supply strategy for the coming quarter, Exhibits 7-A, 7-B, and 7-C will be prepared, posted as quickly as possible on the District’s web page, and provided at the Board Meeting on June 12, 2012.

The permitted diversion season for ASR ended May 31, and does not begin again until December 1 of this year, which is during the next WY 2013.

Recovery of the 132 AF of ASR water diverted to storage in WY 2012 will likely be delayed until the next Quarterly Water Supply Strategy and Budget (i.e., first quarter of WY 2013). We expect that Cal-Am will not divert any water from San Clemente Reservoir through the Carmel Valley Filter Plant during this quarter, based on past practice and their September 2001 and February 2009 Conservation Agreements with the NMFS. Cal-Am will operate its wells in the Lower Carmel Valley in a downstream-to-upstream order. If actual natural river inflows are less than projected for the budget period, the group will reconvene and adjust the Los Padres Dam 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.

PLANNED EXHIBITS – To Be Finalized on June 7, and Presented at the June 12, 2012 Board Meeting

7-A Quarterly Water Supply Strategy and Budget for Cal-Am Main System: July - September

2012

7-B Quarterly Water Supply Strategy and Budget for Cal-Am Subsystems: July - September 2012

7-C Quarterly Water Supply Strategy and Budget Report: July - September 2012

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