ITEM:		ACTION ITEM
24.	CONSIDER DISTRIBUTION OF FUNDS FOR LOCAL PROJECT GRANT FUNDING
Meeting Date:			November 16, 2015	Budgeted:	Yes; Insufficient
From:			David J. Stoldt	Program/	1-10-1
			General Manager	Line Item No.:	N/A
Prepared By:			Larry Hampson	Cost Estimate:	Not to exceed $85,000
General Counsel Approval: N/A
Committee Recommendation: The Water Supply Planning Committee approved the recommendation 3-0 on November 2, 2015. The Administrative Committee reviewed this item on November 9, 2015 and recommended approval.
CEQA Compliance: N/A

SUMMARY: At its June 2015 meeting the District Board adopted a budget that included an expenditure of up to $295,000 from the Water Supply Charge for development expenses for local water projects. At its October 2015 meeting, the Board approved an additional $89,600 to fund project requests from the City of Seaside and the Pebble Beach Company. At its November 2, 2015 meeting, the Water Supply Planning Committee recommended approval of a revised application for $85,000 by the City of Monterey.

Monterey’s proposal is to evaluate at a regional level the feasibility of capturing, storing and recycling dry and wet weather stormwater system flows. This work would be consistent with recently passed state legislation (Senate Bill 985) that requires regions to develop a Stormwater Resource Plan (SRP) that focuses on capture of storm water for beneficial uses. District staff have been working with the Monterey Regional Storm Water Management Program (MRSWMP) group, which is considering applying to the State Water Resources Control Board (SWRCB) for a Prop. 1 grant of approximately $200,000 to $250,000 for development of a region-wide SRP. If the District approves a grant of $85,000 to the City of Monterey and the City matches the funds with $85,000, the combined amount of $170,000 could be used as part of the 50% local match requirement for a State grant to develop an SRP.

In order to recommend a grant award to the City of Monterey, the Board must decide whether to increase the budget for the program, as all funds budgeted for this program in FY 2015-16 have already been awarded.

The staff recommendation follows.

RECOMMENDATION: The Board should consider a recommendation for a mid-year budget increase and grant approval of $85,000 to the City of Monterey. This would require an increase in the Local Water Project budget at mid-year equal to $85,000. Further, the grant should be conditioned to shift funds from Task D and apply them to Task E in order to expedite environmental review.

DISCUSSION: The amount in the adopted FY2015-2016 budget for Local Project Grants of $295,000 includes funds from prior years that were approved but unexpended. As a result, money available for new projects under the current budget is limited to $100,000. At its October 19, 2015 meeting, the Board authorized a mid-year budget increase of $86,900 in order to fund the Pebble Beach Company and City of Seaside proposals. If the Board approves an additional $85,000 to the City of Monterey, the mid-year budget increase would total $171,900 and the total for Local Project grants would increase to $466,900 for FY 2015-16.

Recently, Senate Bill 985 was passed, which requires that any stormwater capture and reuse project funded with Prop. 1 bond funds must be included in a Stormwater Resource Plan developed for the region. One of the requirements of a SRP is to:

“Identify and prioritize stormwater and dry weather runoff capture projects for implementation in a quantitative manner, using a metrics-based and integrated evaluation and analysis of multiple benefits to maximize water supply, water quality, flood management, environmental, and other community benefits within the watershed.”

The State, with Proposition 1 bond funds, will assist regions with the development of an SRP through the Storm Water Grant Program, which will provide up to $500,000 in planning grants with a 50% local match (of the total project cost). An SRP is required for any stormwater capture or reuse projects funded by Prop. 1, such as the City of Monterey’s proposal to divert stormwater away from Areas of Special Biological Significance. The MRSWMP group is in favor of applying to the SWRCB for a planning grant for development of a SRP with the same boundary as the Monterey Peninsula Integrated Regional Water Management region, which includes the six Peninsula cities, the Carmel River watershed and unincorporated areas in Pebble Beach and along the Highway 68 corridor. District staff have been working closely with staff of the MRSWP group to coordinate such an application. Expenses associated with the City of Monterey project are proposed to be used as part of a local match for requesting Prop. 1 grant funds from the SWRCB. Grant applications will be due in early January 2016.

Previously, the City of Monterey had proposed evaluating the concept of installing small sewage reclamation stations within the City. The Water Supply Planning Committee requested that the City consider removing this task and the City subsequently changed its proposal to comply with this request. Additional elements of the Monterey proposal include:

· Project work would result in useful information that would be incorporated into a SRP.

· The City is providing a dollar-to-dollar match.

· Further, the City states it “lacks funding to complete the CEQA process.” Staff believes that the water rights application will depend on a completed CEQA. Therefore we believe that funding for Task D (obtaining water rights) should be applied to Task E (preparation of environmental documents) and recommend making this change as a condition of a grant.

EXHIBIT

24-A Revised City of Monterey Local Water Project Grant Application

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