ITEM:		GENERAL MANAGERS REPORT
9.	SIX MONTH UPDATE ON STRATEGIC PLAN IMPLEMENTATION
Meeting Date:			October 21, 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

SUMMARY: At its April 1, 2013 strategic planning workshop, the Board reviewed and discussed the District’s Mission Statement, Vision Statement, Core Values, and several potential 1-Year and 3-Year Strategic Planning Goals. Staff was directed to revise the Mission and Vision Statements, to “retire” the use of Core Values, and to organize several of the suggested goals into 1-Year and 3-Year goals. Many potential goals that were identified as being related to the normal course of District business and budget were removed from the proposed list of adopted goals. At its April 15, 2013 regular meeting the Board adopted five one-year strategic goals and three three-year strategic goals, as follows:

One-Year Strategic Goals:

1) Continue to Advance Water Supply Projects

2) Work With Community to Protect Investment in Water Credits and “Smart” Development

3) Revise Rationing Program in Advance of “Regulatory Drought”

4) Streamline Essential Services and Organization

5) Continued Progress in Public Outreach Efforts

Three-Year Strategic Goals:

6) Develop Comprehensive Strategy for Permit 20808-B

7) Prepare for Allocation of “New Water”

8) Establish a Long-Term Strategy for Los Padres Dam

This report summarizes progress made to date.

DISCUSSION:

Discussion of One-Year Goals

1. Continue to Advance Water Supply Projects

The goal is to make continued progress over the past year to secure funding for planning

and advancement of water supply projects. Since April, the District has done the following:

· Achieved agreement with Cal-Am and other settling parties to incorporate “Water Rate Relief Bond” financing for public contribution, to reduce cost of desalination facility; Developed calendar for introduction and adoption of legislation; hired implementation team; Continuing to advance.

· Entered into cost-sharing agreement for Groundwater Replenishment (GWR) in May; Become participant on CEQA and feasibility team; Issued RFP for water rights analysis for reclamation ditch source water; Achieved agreement with Cal-Am and other settling parties on GWR implementation steps; Authorized expenditure of funds and have begun work on water purchase agreement, evaluation of cost/benefit of project externalities, and debt quivalence.

· Completed final concept for enhanced backflush pond and roadway on Santa Margarita ASR site; Reached agreement with City of Seaside for configuration and appraisal; Completed replacement of pump on ASR Well #1; progressing towards completion of Seaside Middle School ASR Facility.

· Local Projects – Created new program providing seed-level matching funding to advance local planning of water supply projects, approving feasibility work for Pacific Grove’s Local Water Supply project and the Airport District’s remediation wells. Work involved developing application criteria and evaluation process, as well as grant agreement document.

· Entered into cost-sharing agreement with DeepWater Desal in order to advance the approval and permitting of an open-water intake alternative. Continue to monitor status and progress.

· Met 3 times with Odello property ownership team to provide oversight to owners’ proposal to de-link water right and transfer property into open space public land.

· Evaluated surface water right project concepts

2. Work With Community to Protect Investment in Water Credits and “Smart” Development

Use of water savings for expansion of homes or businesses has been adversely affected by the economy, the CDO, and the demise of redevelopment agencies. The District began a year ago to assess ways it could help the community utilize its investment in water savings and foster “smart” development, such as mixed-use development in the downtown areas as promoted by general plans. Since April, the District has done the following:

· Working with SWRCB to modify language in April 2012 interpretive letter in order to allow meters to be set for mixed use projects and to allow multiple meters for new projects on sites that had a meter to supply water when the CDO was enacted. Have had 7 meetings with SWRCB representatives (staff and board), met 3 times with city planning staff and local architects, and two meetings with Cal-Am included. Focus has been on clarifying change of use and coming to agreement over what constitutes a reasonable baseline for determining whether a new meter might result in an intensification of water use.

· Adoption of Ordinance 156 extends water credits for high efficiency toilets, indefinitely for now.

· Have begun examination of basis for and need to continue or sunset the bathroom remodel/addition policy.

· Met with the Presidio and learned of their development of cisterns and double-plumbing installations. Have agreed to examined development of water credits for the cisterns.

Since late last year, the District has also adopted the following in support of this goal:

· Ordinance 151 extended implementation dates for non-residential retrofit requirements;

· Ordinance 154 “tolling” or extension of remaining life of water credits to reflect suspension during CDO period; and

· Ordinance 155 redefining redevelopment agency projects in order to maintain existing credits in former redevelopment agency sites; and

· Working with business owners where possible to allow projects to proceed while CDO is in effect (examples: Robert Louis Stevenson School, E Miller Architects, Regency Theater, City of Monterey, etc)

3. Revise Rationing Program in Advance of “Regulatory Drought”

The existing rationing program which was developed by the District and is the same as Cal-Am’s program does not appear sufficiently robust to address the required reductions in water supply due to the CDO and the Seaside Basin Adjudication. Stated simply, allocating a baseline 35 gallons per person per day for health and safety purposes leaves zero legally available water for commercial and institutional use. Since April, the District has done the following:

· Worked with SWRCB to help them better understand limitations of rationing as regulatory tool

· Made presentations to local business groups on the inadequacy of the present rationing plan

· Advanced the concept of creating a drought reserve utilizing the Seaside Basin through augmentation of ASR from local water projects and/or Odello water

· Beginning planning for revisions to rationing program, including community participation

4. Streamline Essential Services and Organization

This goal area was to focus on the Water Distribution System (WDS) permit process, the Water Permit Process, and the District’s Organizational structure and benefits. Since April, the District has done the following:

· WDS Permitting: A staff-level Team WDS has been meeting regularly and will introduce at the Board Committee level concepts for the revision of the WDS permit process as soon as next month. The goals are reduced burden on well applicants, savings in internal staff time and cost, and simplification of the regulatory oversight.

· Streamline Water Permit Process: The Water Demand Department has already developed a plan to streamline the deed restriction process, reducing the cost to the customer, reducing the number of restrictions, and speeding up the process which will go to the Rules and Regulations Review Committee at its October meeting.

· Reorganization, Benefits, and Bargaining: The Board directed staff to review its essential services and staffing levels, as well as succession plans. This process remains ongoing, but to date it was decided to not refill the public outreach position, rather contract for outside services, saving the District over $50,000 per year; All employee bargaining units have agreed to 30year contracts creating near-term stability and predictability; Existing employees have agreed to begin payment of the employee portion of PERS contributions ahead of the 2018 deadline, offsetting salary increases, keeping costs to the District neutral; The District has shifted employees healthcare provider, creating permanent annual savings to the District; A two-tier benefits program was created such that new employees receive a reduced vacation and sick leave program, and begin immediate contributions to PERS, creating future savings to the District; The General Manager hosted a District-wide team-building outing in June.

· Implemented the Tyler Technologies InCode financial software which is improving timeliness of reporting, depth of information availability, and streamlined the process for purchasing and time tracking.

5. Continued Progress in Public Outreach Efforts

The District has made great strides in it community profile in the past year. However, additional work needs to be done. Since April, the District has done the following:

· Hired outside consultant to assist with media relations, messaging, and integrated social media outreach, rather than re-hiring in-house staff

· Improved electronic distribution lists

· Continued outreach to Community and Business Groups, and increased visibility and attendance in functions throughout the District by the GM, Water Demand Manager, and other staff

· Entered into a joint application to the Regional Park District with Carmel River Watershed Conservancy to install interpretive signs at locations in the Carmel River basin

· Co-sponsored the Carmel River Festival, with strong attendance by staff

· An increased focus on non-visitor serving commercial sector for conservation retrofits and rebates, including multiple meetings and presentations, as well as District-initiated mailers.

· Worked with all sectors of the business community in adopting new non-residential rate methodology, including participation in local meetings, CPUC settlement discussions, and ex parte visits to CPUC Commissioners.

· Have started meeting with MRWPC and Mayor’s Authority to develop cohesive public outreach plan for GWR.

· Produced the summer “WaterMatters” newsletter.

· Presented and participated in SWRCB and CPUC business meetings held on the Peninsula this summer.

Discussion of Three-Year Goals

6. Develop Comprehensive Strategy for Permit 20808-B

The District has successfully reassigned portions of the original New Los Padres Reservoir permit 20808 to Phases 1 and 2 of ASR (20808-A and 20808-C.) However, permit conditions for each are different. The remainder permit is 20808-B and, without an approved extension, could be revoked by the SWRCB if water is not put to authorized use by the year 2020. This goal is to develop and implement a strategy for the remainder. Since April, the District has done the following:

· Identified two potential new injection and recovery sites in the Seaside Basin and authorized the first phase of a consulting study of ASR opportunities in the Carmel Valley

· Advanced the scope and authorized the initial expenditure of funds for the GS-Flow model requirements to perform water availability analysis and for an IFIM study to develop new permit conditions.

7. Prepare for Allocation of “New Water”

The 1990 Allocation EIR resulted in the District developing a process for the allocation of water to the jurisdictions. The process was very interactive with jurisdiction participation. The District will need to be proactive to develop fair and equitable mechanisms for allocation of such water to the jurisdictions. Since April, the District has done the following:

· Achieved agreement with Cal-Am and other settling parties to incorporate almost 1,200 acre-feet of water supply for legal lots of record in the sizing of the Water Supply Project. As part of that agreement, the District has committed to engage the jurisdictions in the water allocation process. The District also agreed to coordinate an update and evaluation of the jurisdiction’s future general plan water needs.

· Held discussion with the District’s Technical Advisory Committee on the alternate approaches under CEQA. Also had Eric Zigas of ESA speak to TAC on treatment of water for legal lots of record in the environmental impact report currently being executed by the CPUC for the Monterey Peninsula Water Supply Project.

8. Establish a Long-Term Strategy for Los Padres Dam

In 2011 the District proposed increasing water supply capacity at Los Padres Dam through either a rubber dam on the existing spillway, or dredging. Cal-Am however has expressed little or no interest in these projects in the past. Cal-Am has undertaken studies of replacing or enhancing fish transport through the dam and recently performed a dredging feasibility study. The National Marine Fisheries Service has indicated that permanent removal of Los Padres Dam is a priority for restoration of the Steelhead in the Central Coast. However, many fisheries experts believe that a regulated river would be a better long-term solution for the Steelhead. Further, an unregulated river might radically affect the water rights and businesses of property owners along the river. So long as the threat of dam removal exists, it is unlikely that significant long-term investment will be made in Los Padres Dam. This goal area is for the District, in its role as a resource management agency for the watershed as an integrated whole, to take a leadership position in determining the long-term fate of Los Padres Dam. Since April, the District has done the following: 

· Advanced the scope and authorized the initial expenditure of funds for the GS-Flow model requirements to perform water availability analysis and for an IFIM study to develop new permit conditions.

· Authorized expenditure of funds for an initial consulting study that can help define a blueprint for how the Los Padres Dame alternatives should be viewed in the future (see consent Item 4 on this agenda.)

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