ITEM:		PUBLIC HEARING
19.	CONSIDER FIRST READING OF ORDINANCE NO. 168 -- AMENDING RULE 11, AND ADDING RULE 23.9 TO ESTABLISH A WATER ENTITLEMENT FOR THE CITY OF PACIFIC GROVE
Meeting Date:			December 14, 2015	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			David J. Stoldt	Cost Estimate:	N/A
General Counsel Review: Yes
Committee Recommendation:
CEQA Compliance: District is a Responsible Agency relying on an EIR and Supplemental EIR certified by the City of Pacific Grove

SUMMARY: Ordinance No. 168 (Exhibit 19-A) establishes a Water Entitlement for the City of Pacific Grove (the City) of 66 Acre-Feet Annually (AFA) to be used for new water uses by properties located within the California American Water service area.

A Water Entitlement is a discrete quantity of water designated by a District ordinance to a specified Water Entitlement Holder for new or Intensified Water Use. Water Entitlement Holders established by previous MPWMD ordinances include the Pebble Beach Company and the other fiscal sponsors of the CAWD/PBCSD Wastewater Reclamation Project, the City of Sand City, Cypress Pacific Investors LLC, Malpaso Water LLC, and DBO Development No.30. For the City of Pacific Grove Water Entitlement, the Water Entitlement Holder assigns 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 permit new water use up to the amount specified.

The development of existing legal lots of record in California American Water’s service area is currently constrained by a lack of available MPWMD Allocations and Water Credits, and State Water Board Order WR 2009-0060, which prohibits California American Water from diverting water from the Carmel River for new service Connections or increased uses of water at existing service addresses resulting from changes in zoning or use. The City’s project (Project) is intended to create non-potable recycled water supply of up to 125 acre-feet annually (AFA) to meet irrigation needs on the City-owned Pacific Grove Golf Links and El Carmelo Cemetery and will thereby reduce potable water metered demand on the California American Water Company (Cal-Am) water system. The Project includes a new Satellite Reclaimed Water Treatment Plant facility with a design flow capacity of 0.25 million gallons per day, and will recycle a portion of the City’s municipal wastewater at the Point Pinos Wastewater Treatment Plant. Potable water freed by reason of Project operations shall be available for re-use. The Ordinance establishes 66 AFA for the Entitlement, 9 AFA (10%) reserved by the District for its exclusive use for allocation to other jurisdictions, and a 13 AFA remainder (15%) will be conserved and permanently suspended from use for the benefit of the Carmel River system.

Because the Entitlement is derived from conserved water, under District rules the conserved water would normally be made available for new uses immediately, because such use would not be an increase in existing demand at the time of the creation of the Entitlement. However, in the funding of a low-cost State Revolving Fund loan for the Project, the State Water Resources Control Board has added a condition to the loan which states:

“The City shall apply recycled water produced by the Project to service of existing uses and shall use the ensuing demand reductions to offset deliveries from Cal-Am until such time as the City receives consent from the State Water Board’s Executive Director to apply the Project’s recycled water to new service connections to increased uses at existing service addresses resulting from a change in zoning or use”

The City will have to address this condition in its subscription process.

CEQA: The MPWMD is a responsible agency under the California Environmental Quality Act (CEQA). As a CEQA responsible agency, the MPWMD may rely on the City’s CEQA compliance for the Ordinance.

The City certified an Environmental Impact Report (EIR) for the Project on November 19, 2014, in accord with the California Environmental Quality Act (CEQA). In certifying this EIR, the City made specific findings which, by this reference, are made an integral part of this ordinance, as if set forth in full. The City thereafter prepared and certified a Supplemental EIR (SEIR) on modification to the PG Local Water Project (SCH# 2014021058) which examined impacts that might result from implementation of this ordinance. The Project will not have a significant effect on the environment, based on information contained in the SEIR. Mitigation measures are not made as conditions of approval by MPWMD for this action.

RECOMMENDATION: The Board should approve the first reading of Ordinance No. 168, establishing a Water Entitlement for the City of Pacific Grove, and direct staff to bring it back for a second reading at the January Board meeting.

EXHIBIT

19-A Draft Ordinance No. 168

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