ITEM:		GENERAL MANAGER’S REPORT
13.	UPDATE ON DEVELOPMENT OF WATER SUPPLY PROJECTS
Meeting Date:			July 16, 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 a key role in two of the proposed three water supply projects in the current Cal-Am application in front of the CPUC that 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.

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

DISCUSSION:

Groundwater Replenishment Project

On July 6^th, a conference call was held between MPWMD, MRWPCA, and Cal-Am to discuss criteria consistent with the “Good Faith Commitment” section of the Memorandum of Understanding which states:

“In order to explore the potential public and private benefits of this project, and to ensure that each Party’s efforts in furtherance of realizing such a project are well spent, the Parties hereby make a good faith commitment to pursue development of such a GWR, in compliance with all applicable laws. The Parties shall meet with the goal of reaching agreement by June 30, 2012, on the criteria for determining the viability of a GWR Project, which criteria shall include but not be limited to (1) providing for a schedule and for adjustments of same for the timeframe within which the GWR Project will be operational, and (2) a process and timeframe for verifying that the range of estimated costs for GWR Project water are consistent with the MRWPCA current cost estimates of $2500-$3000 per acre foot.”

It is expected that such draft criteria will become part of the testimony in the CPUC application process.

Aquifer Storage and Recovery

On June 21^st, District staff and Cal-Am met to discuss the potential for a long-term capital and operating lease for the District’s Santa Margarita ASR facility. Such a lease would be modeled on the Sand City Desalination facility lease. The reason for such a lease would be to ensure recovery of some prior capital investment and creation of additional capital in order to complete the project, as well as to better define the operating relationship. This is a back-up measure to the District’s new annual water supply charge, which remains the best opportunity to fund project completion and maintaining stronger District control over the asset.

The District is prepared to move forward on developing well #4 at Water Project #2 (Seaside Middle School ASR site’s second well) and awaits a new reimbursement agreement as discussed under Item 10 of the Consent Calendar.

Cal-Am Application 12-04-019

On June 4^th the District filed its pre-hearing conference statement regarding Cal-Am’s application. It is attached as Exhibit 13-A.

The CPUC also issued two key rulings. The first was Commissioner Peevey’s Scoping Memo and Ruling, which set out the schedule attached as Exhibit 13-B. The second was the Administrative Law Judge’s agenda for the July 26^th & 27^th workshops attached as Exhibit 13-C.

District staff and General Counsel will be attending the workshops.

Mayors’ JPA (MPRWA)

On June 28^th, the JPA issued a request for proposals for consultant services. The Contractor will be retained to provide an independent, unbiased, third-party cost assessment of the three proposed desalination projects, as well as an evaluation of schedule and financing. District staff prepared the draft RFP on behalf of the JPA’s Technical Advisory Committee. City of Pacific Grove staff should be commended for distributing the RFP with short notice and City of Seaside staff for posting material to the JPA’s website and developing contract language. Proposals are due July 16^th. The RFP’s scope of services is attached as Exhibit 13-D.

The District General Manager was elected to chairman of the Technical Advisory Committee at its July 2^nd meeting.

The JPA Board met July 12^th to consider an annual budget. The meeting agenda and preliminary budget dated June 27, 2012 is attached as Exhibit 13-E. An updated set of materials from the July 12^th meeting will be provided at the District’s July 16^th board meeting.

EXHIBITS

13-A MPWMD Pre-Hearing Conference Statement in A.12-04-019

13-B CPUC Schedule for A.12-04-019

13-C Agenda for July 26^th & 27^th CPUC Workshop

13-D Excerpts from MPRWA Request for Proposals

13-E MPRWA Agenda and Preliminary Budget

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