ITEM:		GENERAL MANAGER’S REPORT
13.	UPDATE ON DEVELOPMENT OF WATER SUPPLY PROJECTS
Meeting Date:			November 18, 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 November 12, 2013 the District General Manager and General Counsel met with representatives of the State Water Resources Control Board (SWRCB), the Attorney General’s office, California American Water (Cal-Am), the Regional Water Authority, Sierra Club, attorney for water rights holders, and the Pebble Beach Company (Parties to the lawsuit over the Cease and Desist Order (CDO)) and held initial discussions about the process for petitioning for a modification of the CDO under section 1832 of the California Water Code. The parties agreed to work with SWRCB enforcement staff in 2014 and consider formal action for modification in 2015. The Parties also agreed to meet regularly and open up the group to additional interests in mid- to late-2014.

On October 16, 2013 the General Manager, General Counsel, and Stephanie Pintar met with Barbara Evoy, John O’Hagan, and James Kassel of the SWRCB enforcement staff in Lathrop 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. SWRCB staff indicated last week that a draft letter proposal is being circulated within the SWRCB. The General Manager spoke to the SWRCB General Counsel, the SWRCB Chair Felicia Marcus, on this issue last week and has meetings set with two other board members on the topic in the next week.

Desalination Facility (A.12-04-019): The District finalized the draft legislation and one-page summary sheet for the Water Rate Relief Bonds and forwarded to Senator Monning’s staff for them to begin working with the Legislative Counsel’s office to convert into a Senate Bill. The General Manager has made 8 public presentations on the status of the water supply projects and the use of the Water Rate Relief Bond financing and its benefits to ratepayers. He will continue to make 4 to 8 more presentations in coming weeks.

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, the District has been developing a form of water purchase agreement that minimizes costs to ratepayers and will provide a secure financing source. Working with MRWPCA the District will build a long term financing plan that will be used to secure low cost State Revolving Fund loans and other grant monies. The District also is negotiating a consulting contract with Schaff and Wheeler work with the District and MRWPCA on source water rights issues.

Aquifer Storage and Recovery (ASR): The District has reached agreement with the City of Seaside for the size and shape of the easement for the Santa Margarita site and will enter into a reimbursement agreement for an appraisal. Staff will be directing General Counsel to modify proposed agreements for the City of Seaside which will enable FORA to approve final plans. This could lead to completion of the backflush pond, undergrounding of pipes, paving, and landscaping in 2014.

Alternative Desalination Project: An oral report was provided at the October 21^st Board meeting. General Manager Stoldt has a meeting set with DeepWater representatives this week.

On November 4^th, the District was formally served with a summons advising the District that it is being sued by Water Plus over its cost-sharing agreement with DeepWater Desal and its participation in the project environmental and permitting work.

Local Water Projects: The District General Counsel has drafted a grant agreement that is being finalized by staff. This should enable actual award of monies to the Airport District and the City of Pacific Grove before the end of the calendar year. District staff met with the Airport and its Army Corp contractor to discuss their project.

MPWSP Governance Committee: Please see agenda item 2 on the Consent Calendar.

Ordinance 152 Citizen’s Panel: The panel will meet November 19^th and discuss progress on the adopted FY2013-14 capital improvement plan and expenditures of the Water Supply Charge.

EXHIBIT

None

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