ITEM:		GENERAL MANAGER’S REPORT
8.	UPDATE ON DEVELOPMENT OF WATER SUPPLY PROJECTS
Meeting Date:			August 19, 2013	Budgeted:	N/A
From:			David J. Stoldt	Program/	N/A
			General Manager	Line Item No.: N/A
Prepared By:			David J. Stoldt	Cost Estimate:	N/A
General Counsel Approval: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

DISCUSSION:

SWRCB: On July 2^nd Stephanie Pintar and the General Manager met with John O’Hagan and James Kassel of the SWRCB in Sacramento to discuss resolving the mixed-use metering issue. The District proposed that the SWRCB allow the water use factor methodology to be used to determine whether a proposed use would intensify use of water.  Further, in the case of determining whether a new meter should be set, no discount or factor of safety should be applied, so that we would be consistent with existing uses. We believe that the interpretation of the CDO can be honored, but the April 2012 interpretative guidelines significantly simplified. The goal is to let an existing parcel split, subdivide, add a new address, change the type of business, go to mixed-use, and so forth, so long as the water used at that site will not be increased based on assumed factors.  No one can presume that the factors will precisely predict use, but since the advent of all of the Peninsula’s conservation practices and improvements in devices, the factors now tend to overstate water use and actual use will likely be lower – a factor of safety is built in.  We have urged the SWRCB to allow the District to use its methodology to determine whether a building applicant or a business owner has a plan that will not intensify water use and then direct Cal-Am to set the meter.

Desalination Facility (A.12-04-019): Settlement agreements were signed July 31, 2013. This item appears under “DISCUSSION ITEMS” of this agenda packet.

Groundwater Replenishment (GWR): District staff has been meeting with MRWPCA staff and consultants every other Friday, tracking project progress. CEQA work and source water feasibility studies continue to proceed.

With respect to GWR, in coming months the burden is upon the District to:

• develop a form of water purchase agreement that minimizes costs to ratepayers
• build a long term financing plan
• find a qualified economist to evaluate the "social return on investment", or the cost benefits of diverse sources of supply, reduced carbon footprint, eliminating discharges to the Bay, etc.
• work with the Seaside Watermaster on storage and recovery agreements
• work with MRWPCA on source water rights issues
• work with MRWPCA to keep expenditures on CEQA, planning, and feasibility occurring on a timely basis.

Aquifer Storage and Recovery (ASR): The District has bid the building contract for Water Project 2 (Seaside Middle School) which is expected to be completed during the school summer vacation.

Alternative Desalination Project: District staff met with DeepWater Desal representatives to develop a draft cost sharing agreement for the project, including a list of deliverable milestones that would affect the District’s financial commitments. This appears under “ACTION ITEMS” of this agenda packet.

Local Water Projects: The project grant/loan applications were distributed to the 6 cities, the county, the Airport District, and the Pebble Beach Company the first week of August. Applications are due back to the District September 1.

MPWSP Governance Committee: The MPWSP Governance Committee met August 1^st and covered the final presentations by the Cal-Poly design teams for the desalination facilities. The session was recorded and is available for viewing on the Governance Committee website found within the District’s webpage.

Ordinance 152 Citizen’s Panel: The panel met August 1^st at the District offices. Keith Israel of MRWPCA gave a thorough presentation on the Groundwater Replenishment Project. The panel also briefly discussed the adopted FY2013-14 capital improvement plan, as well as recent expenditures of the Water Supply Charge.

U:\staff\Boardpacket\2013\20130819\GMreport\08\item8.docx