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ITEM: |
PUBLIC
HEARING |
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14. |
CONSIDER APPROVAL OF
APPLICATION #WDS-20150715MAL TO CREATE MALPASO WATER DISTRIBUTION SYSTEM
(WDS) AND AMEND CALIFORNIA-AMERICAN
WATER COMPANY WDS PURSUANT TO SWRCB LICENSE #13868A, CALIFORNIA-AMERICAN
WATER COMPANY AND MALPASO WATER COMPANY, LLC, CO-APPLICANTS |
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Meeting
Date: |
August 17, 2015
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Budgeted:
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N/A
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From: |
David J. Stoldt
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Program/ |
N/A |
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General
Manager |
Line Item No.: N/A |
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Prepared
By: |
Henrietta
Stern |
Cost Estimate: |
N/A |
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General Counsel Review: Concurred Aug. 12, 2015
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Committee Recommendation: N/A
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CEQA Compliance: MPWMD is a Responsible Agency relying on an
EIR certified by SWRCB on July 3, 2015. |
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A. APPROVE
APPLICATION TO CREATE MALPASO WDS, PARCEL APN 015-162-038 (Well Lot)
B. APPROVE
APPLICATION TO AMEND CALIFORNIA-AMERICAN WATER COMPANY WDS TO RECEIVE MALPASO
SOURCE OF SUPPLY (CAW/MALPASO AMENDMENT)
SUMMARY: The Board will consider Water Distribution System (WDS) Application #WDS-20150715MAL (Exhibit 14-A, without attachments) by Co-Applicants Malpaso Water Company, LLC (“Malpaso”), and California-American Water Company (CAW), which entails two requests for consideration by the MPWMD Board:
1. Create the Malpaso WDS, and
2. Amend the CAW WDS to receive Malpaso water as a new source of supply, referred to herein as the “CAW/Malpaso Amendment.”
Based on water rights issued to Malpaso by the State Water Resources Control Board (SWRCB) on July 3, 2015 (License 13868A), Malpaso will construct and own a well and short pipeline on the 0.21-acre Parcel APN 015-162-038 at 5258 Carmel Valley Road, and deliver up to 85.6 acre-feet per year (AFY) of water into the CAW delivery system on the same CAW-owned parcel. The Malpaso-owned well, which has yet to be constructed, is called the “Eastwood/Cañada Well” herein, as requested by CAW. Exhibit 14-B provides the Parcel location.
Malpaso and CAW have entered into formal agreements whereby CAW will operate the Eastwood/Cañada Well and use CAW facilities to treat and convey water to Malpaso subscribers, who will pay Malpaso for a specific quantity of reserved water. SWRCB License 13868A limits delivery of Malpaso water to parcels located within the CAW service area, which must also be within the 16,595-acre Carmel River watershed and/or the 526-acre City of Carmel-by-the-Sea boundary (map provided as Exhibit 14-C). MPWMD Ordinance No, 165, which was approved at first reading on July 20, 2015, specifies how Malpaso subscribers (“Benefitted Properties”) obtain a portion of the Malpaso Water Entitlement and related MPWMD permits for new and expanded water use, up to a maximum of 80.0 AFY metered sales. This amount is lower than the 85.6 AFY water rights amount to account for conveyance losses of approximately seven percent (7%). The second reading and adoption of Ordinance No. 165 is also on the August 17, 2015 agenda; if approved, it would be effective in 30 days.
If Malpaso subscribers have not yet reserved the full 80.0 AFY, the unsubscribed amount will go to CAW to serve its customers, thereby reducing unauthorized pumping from CAW-owned wells in the Carmel Valley Alluvial Aquifer (CVAA). This will help CAW comply with the SWRCB Order 95-10 and Cease and Desist Order (CDO) on an interim basis until CAW ceases unauthorized diversions. As described below, SWRCB License 13868A requires CAW to use Malpaso water rights to make specific offsets in 2015, 2016 and 2017. License 13868A allows Malpaso water rights to be used via pumping three specified CAW wells in the first year until the new Eastwood/Cañada Well is completed, and under other specified situations.
The MPWMD serves as a Responsible Agency in this matter in compliance with the California Environmental Quality Act (CEQA). The District relies on the Environmental Impact Report (EIR) for the Eastwood/Odello Water Right Change Petition certified by the SWRCB on July 3, 2015 for its Decision 2015-0001 to issue License 13868A and 13868B.
Additional information is provided in the “Background” and “Discussion” sections below. Malpaso water rights, environmental review and agreements between Malpaso and CAW were previously provided in agenda packet materials for the first reading of Ordinance No. 165 (see Item 12 on July 20, 2015 MPWMD Board meeting agenda). All files associated with the application by Malpaso and CAW are available for review at the District office. The SWRCB also has copies of its environmental review documents and related materials on its website. This public hearing has been properly noticed as described below.
RECOMMENDATIONS: District staff recommends that the Board take the following actions:
1. Adopt the MPWMD Findings of Approval for Application #WDS-20150715MAL to create the Malpaso WDS and amend the CAW WDS (CAW/Malpaso Amendment), shown as Exhibit 14-D, with specific reference to Findings #21, #22 and #23 regarding District compliance with CEQA as a Responsible Agency. In adopting the Findings, the Board confirms that it has reviewed the EIR on the Eastwood/Odello Water Right Change Petition certified by the SWRCB on July 3, 2015 (Notice of Determination dated July 7, 2015).
2. Approve Application #WDS-20150715MAL and authorize issuance of MPWMD Permit #M15-04-L3 to create the Malpaso WDS with the 33 Conditions of Approval specified in Exhibit 14-E; and direct staff to file a Notice of Determination with the Monterey County Clerk as a CEQA Responsible Agency. The conditions include the Mandatory
3. Conditions of Approval specified in MPWMD Rule 22-D as well as special conditions related to SWRCB License 13868 and MPWMD Ordinance No. 165.
4. Approve Application #WDS-20150715MAL and authorize issuance of MPWMD Permit #M15-05-L3 for the CAW/Malpaso Amendment with the 32 Conditions of Approval specified in Exhibit 14-F; and direct staff to file a Notice of Determination with the Monterey County Clerk as a CEQA Responsible Agency. The conditions include the Mandatory Conditions of Approval specified in MPWMD Rule 22-D as well as special conditions related to SWRCB License 13868 and MPWMD Ordinance No. 165.
The District Board action must comply with CEQA as well as MPWMD regulations. As a Responsible Agency, MPWMD relies on the environmental documentation previously certified by the SWRCB, the CEQA Lead Agency, as described in the “Background” section below. In the review of this WDS application, MPWMD has followed those guidelines adopted by the State of California and published in the California Administrative Code, Title 14, Sections 15000, et seq. Specifically, the MPWMD, as a Responsible Agency, has complied with Guidelines section 15096. The MPWMD has independently reviewed and considered the applicable Eastwood/Odello Water Right Change Petition EIR sections prepared by the SWRCB that relate to water resources and water supply. The EIR documents were provided to each Board member via email in early July 2015 in relation to the first reading of Ordinance No. 165. The Draft and Final EIR are available at the District office for public review.
BACKGROUND: The following paragraphs provide background relevant to the WDS applications. Cited documents are available for review at the District office; some are attached herein as exhibits.
Application Package
Exhibit 14-A provides only the cover letter and application form. Supporting materials that were submitted for Application #WDS-20150715MAL include:
A. Assessor’s map showing Parcel APN 015-162-038;
B. Map of CAW service area within the Carmel River Watershed and Carmel-by-the-Sea, and location of proposed Malpaso and existing CAW facilities;
C. MCEHB Well Construction Permit #15-12547;
D. Grant Deed for Parcel APN 015-162-038 (formerly APN A09-162-34 and A09-162-36) along with easement to the Parcel;
E. October 2014 Draft and June 2015 Final EIR on the Eastwood/Odello Water Right Change Petition prepared for the SWRCB;
F. CEQA Notice of Determination by SWRCB for Eastwood/Odello Water Right Change Petition and issuance of Malpaso water right Licenses 13868A and 13868B;
G. SWRCB, Division of Water Rights, Division Decision 2015-001 dated July 3, 2015;
H. SWRCB License 13868A dated July 3, 2015;
I. Water Conveyance and Temporary Use Agreement between CAW and Malpaso dated April 27, 2015
J. License Agreement between CAW and Malpaso for the Eastwood/Cañada well dated June 1, 2015
K. Suggested text for Findings and Conditions of Approval; evidence citations
These materials are available for public review at the District office; copies are available upon request (standard fees apply).
Malpaso Well and Pipeline
The Eastwood/Cañada Well will be located in the CVAA on CAW property (well lot APN 015-162-038, Exhibit 14-B) near the current CAW Cañada Well (referred to as the “Rancho Cañada Well” in SWRCB documents), with a planned diversion capacity not to exceed approximately 72 gallons per minute (0.16 cubic feet per second) and with an annual production limit no greater than 85.6 AFY. The Monterey County Environmental Health Bureau is currently processing Well Construction Permit #15-12547 and the well has yet to be drilled. Once completed, raw water will then be conveyed through a short pipeline, where it will connect to a CAW pipeline on the same parcel (Exhibit 14-C). Water would then be treated and distributed through the CAW network to consumers.
Malpaso Water Rights (License 13868A)
In 2001, Clint Eastwood and the Margaret Eastwood Trust (Eastwood) were issued revised water rights by the SWRCB for 131.8 AFY for irrigation on the historic Odello East agricultural property; this became License 13868 in November 2012. Eastwood plans to donate the Odello East property to the Big Sur Land Trust to facilitate restoration of native vegetation on this property. Once native habitat is established, the Odello East water rights will not be needed for agricultural irrigation. Thus, in June 2013, Eastwood filed a Petition for Change to the SWRCB requesting that License 13868 be split into two new licenses; this request was approved on July 3, 2015. SWRCB, Division of Water Rights Decision 2015-0001 resulted in the following two licenses issued to the Malpaso Water Company, LLC:
A. License 13868A designates 85.6 AFY for municipal delivery from the proposed new Eastwood/ Cañada Well to existing lots of record within the CAW service area that are also within the Carmel River watershed and/or the City of Carmel-by-the-Sea. Condition #14 of the License allows three existing CAW wells (Rancho Cañada Well 2, Cypress Well 2, and Pearce Well) to serve as back-up wells for the new Eastwood/ Cañada Well before it is constructed or in emergency situations such as an outage. On an interim basis, until municipal subscribers use up the Malpaso water rights, the License allows CAW to offset a portion of its unauthorized pumping from the alluvial aquifer by using Malpaso water to help comply with the Cease and Desist Order. Condition #6 of the License directs CAW to deliver specific amounts of water to its municipal customers in calendar year 2015, 2016 and 2017.
B. License 13868B designates 46.2 AFY solely for Carmel River instream beneficial use.
This license split is structured to provide water supply to the community for municipal use while dedicating a portion to instream use. Importantly, SWRCB Decision 2015-0001 (Sections 8.0, 9.0 and 10.0) determined that these licenses do not violate any provision of the SWRCB’s 2009 Cease and Desist Order, or the one-for-one offset in the original Order WR 95-10.
CAW-Malpaso Agreements
CAW and Malpaso have entered into two agreements that specify their respective rights and responsibilities:
Ø License Agreement for the Eastwood/Cañada Well (June 1, 2015) addresses CAW access to and operation of the Eastwood/Cañada Well on behalf of Malpaso; and
Ø Water Conveyance and Temporary Use Agreement (April 27, 2015) is Exhibit A to the License Agreement. It spells out when the Eastwood/Cañada Well will be constructed, the process to deliver Malpaso water to its subscribers within the CAW service area, and use of surplus Malpaso water by CAW to serve CAW customers.
CEQA Compliance by SRWCB
The SWRCB is the CEQA Lead Agency for the
environmental review of the Eastwood/Odello Water Right Change Petition. A Notice of Preparation (NOP) of an EIR was
circulated from March 4 through April 2, 2014, and a scoping meeting was held
on April 2, 2014 to receive oral and written comments on the NOP. A Notice of
Completion for the Draft EIR was filed with the State Clearinghouse on October
30, 2014. The public review period was
October 31 through December 15, 2014.
The District submitted a comment letter dated December 15, 2014,
primarily with technical corrections and a request to consider recipient parcels
outside of the Carmel River watershed.
On May 29, 2015, the SWRCB provided proposed written responses to all
public agencies that commented on the Draft EIR; they explained why the
District’s request was denied and confirmed the recipient parcels would only be
within the CAW service area that is located within the Carmel River Watershed
and City of Carmel-by-the-Sea.
As disclosed in the Final EIR, construction
of the new Eastwood/Cañada Well and pipeline has the potential to
result in significant effects due to erosion and release of hazardous
substances into the environment during the construction period. With
implementation of best management practices, impacts will be minimized to a
less-than significant level. Condition 18 to License 13868A requires that,
prior to commencement of construction, Malpaso will submit a construction plan including best
management practices to minimize erosion and to prevent the accidental release
of a potentially hazardous material from entering the environment. Upon
completion of construction, Malpaso must report on
implementation of the measures, and on any breaches. Changes or alterations
have been incorporated into the project which mitigate or avoid the significant
effects on the environment of erosion and hazardous materials during
construction.
On July 3, 2015, the SWRCB certified the
Final EIR, and found that, on the basis of the whole record, there was no
substantial evidence that its approval of the Petition for Change would have a
significant effect on the environment. A Notice of Determination was filed with
the State Clearinghouse on July 7, 2015.
Copies
of the full EIR, Decision 2015-0001, and License 13868A for the Eastwood/Odello
Water Right Change Petition Project are available
for public review at the District office. The EIR and related
documents can be found at:
http://www.waterboards.ca.gov/waterrights/water_issues/programs/ceqa.
MPWMD Ordinance No. 165 Regarding Water Entitlements
Ordinance No. 165 focuses on the Malpaso situation and also streamlines the process for
future Water Entitlements. Each Water
Entitlement is a discrete quantity of water designated by a District ordinance
to a specified Water Entitlement Holder (in this case, Malpaso
Water Company, LLC) for new or Intensified Water Use. For the Malpaso
Water Company Water Entitlement, Malpaso will assign
water to its subscribers via Assignment Documents that the subscribers then use
to obtain Water Use Permits from the District. The Water Use Permit can then be
used to obtain one or more Water Permits for new or intensified water use
(construction projects) up to the amount specified in the Assignment
Document. Ordinance No. 165 is provided
in the July 20, 2015 agenda package (Item 12) as well as the August 17, 2015 agenda
(Item 13). If adopted on second reading,
the ordinance will be effective on September 16, 2015.
DISCUSSION: The following paragraphs address the Findings and Conditions of Approval for the Malpaso WDS and CAW/Malpaso Amendment WDS, respectively:
Create Malpaso WDS
The Findings of Approval (Exhibit 14-D) supporting creation of the Malpaso WDS are based on evidence provided in the application materials, including supporting documents on file at the District office. Staff believes the application meets the criteria and minimum standards for approval set by District Rules 22-B (Findings) and 22-C (Minimum Standards for Granting a Permit). Pertinent information includes certified environmental documents, technical studies and reports, technical memoranda and maps, correspondence between MPWMD staff and the Co-Applicants, and previous approvals by other governmental entities. Based on the certified EIR for the Eastwood/Odello Water Right Change Petition, MPWMD approval of the application is not anticipated to result in a significant adverse effect to the Carmel River or Seaside Groundwater Basins. Near-term beneficial effects are anticipated due to availability of a new water source that entails permanent dedication of water for instream uses and interim assistance to help CAW comply with Order 95-10.
The Conditions of Approval (Exhibit 14-E) proposed for Permit #M15-04-L3 for the Malpaso WDS are consistent with MPWMD Rule 22-D (Mandatory Conditions of Approval) governing water distribution systems. Conditions #1 through #4 define the Permitted System, including a System Capacity (production) limit of 85.6 AFY (which becomes 80.0 AFY metered sales to customers when conveyance losses are considered), and an Expansion Capacity Limit of one master Connection to the CAW system on Parcel APN 015-162-038. The “municipal unit allocation” in Condition #4 refers to quantities of water associated with a jurisdiction’s defined CAW water allocation, which would not change from current amounts in MPWMD records.
Mandatory Conditions #5 through #24 address a variety of subjects such as water quality, well metering, annual reporting, conservation, fee payments, timely notice of system changes, staff access for inspections, interties with other systems, future permits, and required Indemnification Agreement, Acceptance Form and Deed Restriction. Condition #24 states that the WDS Permit is subject to revocation if the Permittee does not fully comply with each and every Condition of Approval. Conditions #25 and #26 address basic water rights and recognition of the federal Endangered Species Act; these conditions are not required by District rules, but are included in all MPSWMD WDS Permits.
For Permit #M15-04-L3 (Malpaso), there are also six Special Conditions, as follows:
Ø Special Condition #27 requires Malpaso to provide a copy of the County Well Construction Permit, State Well Completion Report and related test results to the District once the Eastwood/Cañada Well is drilled.
Ø Special Condition #28 requires Malpaso to provide a listing of parcels or a database of potential subscribers within the CAW service area, consistent with License 13868A.
Ø Special Condition #29 requires the Co-Applicants to provide copies of any report submitted to the SWRCB regarding water extractions and deliveries (note: SWRCB uses a calendar year).
Ø Special Condition #30 requires the Co-Applicants to track and provide monthly well production data to the District.
Ø Special Condition #31 requires the Co-Applicants to track and provide monthly water level data from wells to the District.
Ø Special Condition #32 advises the Co-Applicants that all owners of Benefitted Properties must sign a Deed Restriction to allow MPWMD access to water use data in order to receive a Water Permit.
CAW/Malpaso
Amendment WDS
The Findings of Approval (Exhibit 14-D) also support the CAW/Malpaso Amendment, and are based on evidence provided in the application materials, including supporting documents on file at the District office. Staff believes the application meets the criteria and minimum standards for Approval set by District Rules 22-B and C. The CAW/Malpaso Amendment application also relies on the information supplied for the Malpaso WDS, as described above.
The Conditions of Approval (Exhibit 14-F) proposed for Permit #M15-05-L3 are consistent with MPWMD Rule 22-D governing approval of water distribution systems as well as Ordinance No. 165 to facilitate water entitlements to parcels within the CAW service area within the Carmel River watershed and/or the City of Carmel-by-the-Sea. Notably, the existing limitations placed on CAW by the SWRCB in the CVAA would not change, except that the SWRCB recognizes the Malpaso WDS as a new source of supply that is not subject to the one-for-one replacement requirement in Order 95-10 (see Decision 2015-0001, Section 8.0). The Special Conditions are the same as for the Malpaso WDS Permit described above, except Malpaso Special Condition #27 is deleted because CAW does not own the Eastwood/Cañada Well.
The cost to CAW ratepayers associated with the CAW/Malpaso Amendment is not addressed in the application as such information is not required by MPWMD Rule 22. Effects to CAW ratepayers would be addressed via a future CAW rate case hearing before the California Public Utilities Commission (CPUC).
The draft
Conditions of Approval were provided to the Co-Applicants, and some conditions
were revised based on comments by Malpaso
representatives, who concur with the changes.
No comments were received by CAW as of August 12, 2015.
Public notice has been provided
no later than 10 days prior to this public hearing in several ways, including:
(1) mailed notices to property owners within 300 feet of Parcel APN
015-162-038; (2) posted notices on public roads closest to the subject Parcel; (3)
posted notices at the District office, CAW office and Carmel City Hall; (4)
notice of the public hearing to recipients of District agendas for the August
17, 2015 meeting; and (5) posting of the hearing notice and August 17, 2015 agenda
materials on the District website.
EXHIBITS
14-A Cover
letter and Application #WDS-20150715MAL (without attachments) to Create Malpaso WDS and Amend CAW WDS.
14-B Map
of Parcel APN 015-162-038.
14-C Map
of CAW service area within Carmel River watershed and Carmel-by-the-Sea with
schematic of CAW and Malpaso facilities.
14-D Draft Findings of Approval for Permit
#M15-04-L3, Create Malpaso WDS, and #M15-05-L3, CAW/Malpaso Amendment WDS.
14-E Draft Conditions of Approval for Permit #M15-04-L3,
Create Malpaso WDS.
14-F Draft
Conditions of Approval for Permit #M15-05-L3, CAW/Malpaso
Amendment.
Provided to MPWMD Board under Separate Cover:
·
Draft
EIR for Eastwood/Odello Water Right Change
Petition dated October 2014;
·
Final
EIR for Eastwood/Odello Water Right Change
Petition dated June 2015.
·
SWRCB,
Division of Water Rights Decision 2015-0001
·
SWRCB
License 13868A
U:\staff\Boardpacket\2015\20150817\PubHrngs\14\Item14.docx