ITEM:		CONSENT CALENDAR
2.	RECEIVE FISCAL YEAR 2011-2012 MITIGATION PROGRAM ANNUAL REPORT
Meeting Date:			May 20, 2013	Budgeted:	N/A
From:			David J. Stoldt	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Jonathan Lear	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A for report

SUMMARY AND RECOMMENDATION: The Board should receive the 2011-2012 Mitigation Program Annual Report, and direct staff to distribute copies (paper or CD) to resource agencies, local libraries, and advise the public of its availability. The Executive Summary provides an overview of the major accomplishments, conclusions and/or recommendations. The Executive Summary for the 2011-2012 Mitigation Program Annual Report is attached as Exhibit 2-A.

The annual report primarily reviews Monterey Peninsula Water Management District (MPWMD or District) activities that address the effects of community water use on the Carmel River environment in Fiscal Year (FY) 2011-2012, defined as the 12-month period from July 1, 2011 through June 30, 2012. Please note that hydrologic data and well production reporting data are described for Water Year 2012 (October 1, 2011 through September 30, 2012). Use of the Water Year format for these data is consistent with reporting required by the State Water Resources Control Board (SWRCB).

This report is the 21^st annual report since the Mitigation Program Plan was adopted by the District Board in November 1990, as part of the certification of the MPWMD Water Allocation Environmental Impact Report (Water Allocation EIR), in compliance with the California Environmental Quality Act (CEQA). Copies of the full annual report will be provided to the Board members upon request, and will be provided to the required resource agencies and other interested parties as needed.

BACKGROUND: On November 5, 1990, the Water Allocation EIR was certified by the MPWMD Board. The Board also adopted findings, and passed a resolution that set Option V as the new water allocation limit. Option V resulted in a production limit of 16,744 acre-feet per year (AFY) for the California American Water (Cal-Am) system. Subsequently, this amount was increased to 17,641 AFY based on new supply provided by the completion of the Paralta Well in Seaside in 1993, and other changes since 1993. On October 20, 2009, the SWRCB issued Order 2009-0060, the “Cease and Desist Order” (CDO) against Cal-Am. The CDO refers to the 1995 SWRCB Order 95-10, noting that compliance with Order 95-10 had not yet been achieved. The CDO institutes a series of cutbacks to Cal-Am production from the Carmel River and prohibits new or intensified connections in the Cal-Am main system. The District filed a suit to challenge this ruling, and the Monterey County Superior Court issued a stay on November 3, 2009. In response to a challenge by SWRCB, the court ruled on November 23, 2009 that the

stay will remain in effect until the hearing that was held in Santa Clara in April 22, 2010. At that hearing, the Court lifted the stay and the CDO was reinstated. The CDO reduced the upper limit of diversion from the Carmel River previously set by Order 95-10 at 11,285 AFY to 10,429 AFY.

The Water Allocation EIR determined that even though Option V is the least damaging alternative of the five options analyzed, production at this level still may result in significant, adverse, environmental impacts that must be mitigated. Thus, the CEQA Findings adopted by the Board in 1990 included a "Five-Year Mitigation Program for Option V" and several general mitigation measures. The Five-Year Mitigation Program formally began in July 1991 with the new fiscal year and was slated to run until June 30, 1996. Following public hearings in May 1996 and District Board review of draft reports through September 1996, the Five-Year Evaluation Report for the 1991-1996 comprehensive program, as well as an Implementation Plan for FY 1997 through FY 2001, were finalized in October 1996. In its July 1995 Order WR 95-10, the SWRCB ordered Cal-Am to carry out any aspect of the “Five-Year Mitigation Program for Option V” that the District does not continue after June 1996. To date, as part of its annual budget approval process, the District Board has authorized continuation of the program. The Mitigation Program presently accounts for a significant portion of the District budget in terms of revenue (formerly derived primarily from the MPWMD user fee on the Cal-Am bill) and expenditures.

For projects or programs that entail significant adverse impacts, CEQA requires that an annual report be prepared documenting: (1) the actual mitigation activities that were carried out by the lead agency, and (2) the effectiveness of the mitigation activities, as measured via a monitoring program. The 2011-2012 Water Allocation Mitigation Report responds to these requirements.

The 2011-2012 report reviews District activities relating to water supply and demand, followed by mitigation measures for specific environmental impacts. It also provides a summary of costs for the Mitigation Program as well as references. For each topic, the mitigation measure adopted as part of the certified Allocation EIR is briefly described, followed by a summary of activities carried out in FY 2011-2012 that relate to the topic. Monitoring results, where applicable, are then presented. Finally, a summary of conclusions, and/or recommendations are provided, where pertinent. The annual report format was been modified last year to aid the efficiency of preparing and reviewing the document.

IMPACT ON STAFF/RESOURCES: Mitigation Program costs for FY 2011-2012 totaled approximately $4.59 million including direct personnel expenses, operating costs, project expenditures, capital equipment, and fixed asset purchases.  The annual cost of mitigation efforts varies because several mitigation measures are weather dependent.  Expenditures in FY 2011-2012 were $1.25 million less than the prior fiscal year largely due to less capital expenditures for ASR.  However, the overall costs have remained fairly constant (average of $3 million per year) for last five years.  In several prior years, expenditures had trended upward due to expenditures for the Aquifer Storage and Recovery Project.  FY 2009-2010 expenditures were $3.27 million; and FY 2010-2011 expenditures were $5.84 million.

During FY 2011-2012, revenues totaled $3.31 million including mitigation program revenues, tax revenues, reimbursements, interest and miscellaneous revenues.  The Mitigation Program Fund as of June 30, 2012 had a deficit balance of ($488,632).

EXHIBITS

2-A Executive Summary for 2010-2011 Annual Mitigation Report

U:\staff\Boardpacket\2013\20130520\ConsentCalendar\02\item2.docx