ITEM:		PUBLIC HEARING
17.	CONSIDER DISTRIBUTION OF LOCAL PROJECT GRANT FUNDS TO CITY OF PACIFIC GROVE
Meeting Date:			February 18, 2015	Budgeted:	Yes
From:			David J. Stoldt	Program/	Local Water Projects
			General Manager	Line Item No.: 1-10-1
Prepared By:			David J. Stoldt	Cost Estimate:	Not to exceed $100,000
General Counsel Approval: N/A
Committee Recommendation: At its February 10, 2015 meeting the Water Supply Planning Committee recommended approval of the grant to Pacific Grove by a vote of 3 to 0
CEQA Compliance: N/A

SUMMARY: At its June meeting the District Board adopted a budget that included expenditure of up to $200,000 of the Water Supply Charge for development expenses for local water projects. The program requires matching by the local project sponsor. Each jurisdiction and other interested parties (potential Project Sponsors) were solicited to submit an application.

At its July meeting the Board authorized distribution of the grant/loan application for FY2014-15. Applications were due by October 1. Two applications were received. The application from the City of Pacific Grove was initially rejected because Directors expressed concern that the Pure Water Monterey groundwater replenishment project negotiations for a definitive agreement are at a critical stage and it would not be appropriate at this time to financially support a potential reduction in wastewater flows from Pacific Grove to the Regional Treatment Plant.

The Committee did, however, restate its support for local projects like Pacific Grove’s that free-up potable water supply and directed staff and the City to revisit its proposal to focus on the stormwater components. The City has done so with a revised application that is attached as Exhibit 17-A. At its February 10, 2015 meeting the Water Supply Planning Committee recommended approval of this revised request.

RECOMMENDATION: The Water Supply Planning Committee recommends approval of the grant to the City of Pacific Grove.

DISCUSSION: Project eligibility, requirements that staff and Water Supply Planning Committee will consider are as follows:

Project Purpose: Direct water supply benefit includes the development of a new water supply that may be used to offset the existing unlawful diversions of the California American Water Company from the Carmel River, as affected by the 2009 Cease and Desist Order imposed by the State Water Resources Control Board (“SWRCB”), or may result in a new additional supply of water that may serve future needs of the Monterey Peninsula.

Ancillary benefits may include, but are not limited to, the following:

· Water supply reliability, conservation, and efficiency of use;

· Water quality improvement – river, ocean, groundwater;

· Recycling or reuse of wastewater consistent with SWRCB Recycled Water Policy;

· Reduction of non-point source pollution, or point source discharge consistent with SWRCB Ocean Plan;

· Reduction of carbon-based emissions consistent with California AB32 goals;

· Storm Water capture and reuse consistent with California ASBS policy goals;

· Groundwater recharge;

· Flood management and protection of property; and

· Environmental mitigation, fisheries protection, or habitat restoration;

District Goals: Does the proposed project provide water to meet additional District goals? District goals include the following four goals:

· Can the Project provide water supply to the District for drought/rationing reserve (i.e. water that is not supplied to a beneficial use immediately upon project completion) and if so, how much?

· Can the Project provide water supply to the District for potential future reallocation to the jurisdictions (i.e. water that is not supplied to a beneficial use immediately upon project completion) and if so, how much?

· Can the project be run in a manner that would provide surplus production that could be “banked” into the Seaside Groundwater Basin utilizing the District’s Aquifer Storage and Recovery project?

· Are there multiple benefits to the region or the State as described above?

Evaluation: Projects are evaluated by staff and recommendations made to the Committee based upon the following “Merit Factors.”

· Application contains basic information requested

· Project produces new water supply

· Amount of new supply

· Ancillary benefits demonstrated and determined to be of value to community

· District goals identified above, are met by project.

· Feasibility of Project has been demonstrated.

· Project Schedule is well defined and feasible.

· Project Financing is well defined and contingencies examined and identified.

· Annual Cost of Water is well defined and determined by the District to be consistent with alternate water supply projects, with consideration for ancillary benefits.

· Project status with respect to permits, consultants, and land appear to be consistent with successful project completion.

EXHIBIT

17-A City of Pacific Grove REVISED Local Water Project Grant/Loan Application

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