ITEM:		PUBLIC HEARING
17.	CONSIDER DECLARING Monterey County Zoning Ordinance Inapplicable to the Sleepy Hollow Steelhead Rearing Facility Upgrade (CEQA: Does not constitute a “Project” per California Environmental Quality Act (CEQA) Guidelines 15378 (b).)
Meeting Date:			July 16, 2018	Budgeted:	N/A
From:			David A. Stoldt,	Program/	2-3-1-F
			General Manager	Acct. No.:	24-04-785812
Staff Contact:			Larry Hampson	Cost Estimate:	N/A
General Counsel Approval: Yes.
Committee Recommendation: N/A
CEQA Compliance: Does not constitute a project per CEQA guidelines 15378(b) as it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment.

SUMMARY: The Board will consider whether to exempt construction activities proposed to upgrade the Sleepy Hollow Steelhead Rearing Facility (SHSRF) from complying with Monterey County zoning ordinances under Government Code Section 53096, which provides for such an exemption for facilities related to the storage and transmission of water. Operation of the SHSRF is a required mitigation for diversion of Carmel River flows for municipal use.

The District submitted an initial application for permits to upgrade the SHSRF to the Monterey County Resource Management Agency (RMA) in March 2017. RMA staff have indicated that the earliest a hearing can be scheduled to consider the project is July 26, 2018, after which there would be a one to three-month period to clear permit conditions before construction could commence.

Construction of the facility upgrade must begin in early August 2018 in order to complete certain construction activities in the channel of the Carmel River prior to October 1, 2018, which is the deadline that the Regional Water Quality Control Board has set to complete work in the channel of the Carmel River. Issuance of permits by Monterey County in late August or September (or later) would not allow the District to complete construction of necessary facilities by the October 1 deadline.

In order to exempt the facility upgrade under Government Code Section 53096, the Board must find that there is no feasible alternative and must vote to do so by four-fifths of its members. For a seven-member Board, six votes would be necessary to approve this action.

RECOMMENDATION: Staff recommends that the Board adopt Resolution 2018-18 (Exhibit 17-A) declaring Monterey County Zoning Ordinance inapplicable to the Sleepy Hollow Steelhead Rearing Facility Upgrade.

DISCUSSION: The Board certified the Allocation Program Environmental Impact Report (EIR) in November 1990 and set limits on how much water the community may use from the Carmel River. A Mitigation Program was adopted to mitigate for impacts associated with the diversion and use of Carmel River flows to meet municipal demand. The Mitigation Program included the construction and operation of the Sleepy Hollow Steelhead Rearing Facility (SHSRF), which is located along the Carmel River about one mile downstream of the former San Clemente Dam site. An 800-foot long channel that simulates natural river conditions is the centerpiece of the facility and has been operated since 1996 to mitigate for the impacts to steelhead due to Carmel River diversions by California American Water and other diverters along the river that dry up the stream in the lower nine miles of the river almost annually. The facility is designed to rear steelhead rescued from reaches of the river before it goes dry. Steelhead are reared for several months at the SHSRF and are returned to the river when it reconnects to the lagoon, usually in late fall or early winter.

With the removal of San Clemente Dam and an increase in debris and sediment load at the facility’s water intake, an upgrade is required to replace the intake and make the facility plumbing and filtration capabilities more robust to withstand changing conditions in water quality and quantity. In addition, the National Marine Fisheries Service and the California Department of Fish and Wildlife are requiring the District to operate the facility for longer periods in order to hold fish in the facility until habitat conditions in the river are the best possible for steelhead survival. Because river flows can remain very low during drought periods, the facility may also need to operate year-round, which it is not designed to do currently. In addition to required operation under the Allocation Program EIR, the State Water Resources Control Board has also required that the facility continue to operate as a condition of Order 95-10 and subsequent Cease-and-Desist Orders, which require Cal-Am to reduce unlawful Carmel River diversions and find replacement supplies.

The Facility Upgrade Project includes: 1) temporarily diverting flow in the Carmel River in order to remove the existing intake and install a new intake with erosion protection that will be capable of providing flow to the rearing facility under a variety of adverse conditions; and 2) installing new pumps, plumbing, filters, a building to house facilities, and other upgrades to allow recirculation of a portion of rearing channel flow. The Project includes mitigation measures to reduce potential impacts from the work to a less than significant level.

District staff submitted an initial application to Monterey County in March 2017 for an Amended Use Permit to construct the proposed facility upgrade (original construction of the facility was completed under a 1996 Use Permit issued by the County). There were long delays in processing the facility upgrade application through Monterey County and there were delays in obtaining information and making design changes in response to RMA and Monterey County Water Resources Agency comments on the design. Eventually, in April 2018, the project application was considered complete; however, a hearing on the application is not scheduled until July 26, 2018. After approval of an Amended Use Permit, the County requires an applicant to obtain a grading permit and building permit. In addition, several conditions attached to the draft Amended Use Permit require further County review and approval of several documents and plans before construction can begin. The additional review and approval process by the County was estimated by the County planner to take 30 to 60 days if there are no complications during review. With this schedule, the soonest the project could start would be late August and more likely late September or later if there are complications in meeting permit conditions.

The facility upgrade has been designed to meet the 2016 California Building Code adopted by the County as well as Monterey County’s requirements for facilities built adjacent to the Carmel River. District staff and third-party inspection services will carry out inspections and monitor construction activities to ensure that the project is built according to the design and in compliance with permits issued by the U.S. Army Corps of Engineers, the Regional Water Quality Control Board, and the California Department of Fish and Wildlife.

Work in the channel of the Carmel River requires dewatering of a portion of the bottom of the river. There is a limited time during the year when this can occur – usually between July and October when Carmel River flows are at their lowest. At other times of the year, steelhead are migrating through the river and would be impacted by in-channel work or river flows are too high to work in.

It is important to note that the California Department of Fish and Wildlife and the National Marine Fisheries Service have allowed the District to forego operation of the Sleepy Hollow Steelhead Rearing Facility in 2018 to accommodate construction of the upgrade in 2018 in a single phase. This was an unusual action by these agencies, as the alternative to placing fish at SHSRF that are rescued from drying reaches of the river SHSRF is to place them in river reaches with perennial flow, which can result in overcrowding and higher loss of steelhead.

If the facility is required to be operation while an upgrade is carried out, completing the upgrade would require several phases of construction. This would increase costs and the complexity of completing construction and commissioning the project. In addition, staff believe that it may not be possible to run the SHSRF without completion of the upgrade. This is due to the large volume of sand that was introduced to the river at the SHSRF site after the removal of San Clemente Dam. Occasional use of the SHSRF pumps to provide water for routine maintenance in 2017 (a year that the facility was not required to be operated due to year-round flow in the river) resulted in large volumes of sand passing through the system intake in just a few hours. The intake and pumps are not designed for this type of condition.

Staff estimate that construction in the channel bottom could take eight weeks to complete. If construction of the facility upgrade is approved by the MPWMD Board at the July 16, 2018 meeting, it is anticipated that construction would start in early August and would be finished by the October 1 deadline. A later start would compromise the feasibility of completing work in the channel in 2018 and would trigger phasing and additional costs for the project. Completion of the facility upgrade and commissioning operations of the new facilities would likely be delayed into 2020, which would be an undesirable outcome for steelhead.

Staff have concluded that it is not feasible to complete construction activities in the Carmel River channel in 2018, if the project start must wait for the issuance of all Monterey County permits for this project. It is District staff’s understanding that RMA staff and MCWRA staff would not object to the District taking an action under Government Code 53096. MCWRA staff stated that the re-design of the facility has satisfied their concern about a potential increase in the 100-year flood elevation. In addition, the project was re-designed to meet more stringent seismic safety standards recommended in a building-specific geotechnical investigation requested by the County RMA.

CEQA and Government Code Action Required

Under Government Code 53096, the governing board of a local agency may declare city or county zoning ordinance inapplicable to a proposed use of property for facilities related to storage or transmission of water. The Board certified the Allocation Program EIR in November 1990 that set a limit on how much water Cal-Am can divert to its system and at the same time adopted a Mitigation Program to mitigate for impacts associated with the diversion and use of Carmel River flow by Cal-Am and others. The Mitigation Program included construction and operation of the SHSRF. Thus, the SHSRF meets the test of being a facility related to transmission of water. The proposed facility upgrade was previously approved by the Board at their November 14, 2016 meeting under a Mitigated Negative Declaration. The Board subsequently amended the Project on January 25, 2017 and July 16, 2018 (see related item in this packet under Public Hearings) and the State Coastal Conservancy amended the Project on November 30, 2017.

It is staff’s opinion that it is not feasible to obtain Monterey County permits and complete the project in a timely manner. Completion of the upgrade is necessary to ensure that the facility can operate with changed conditions in the Carmel River due to the removal of San Clemente Dam. A delay in completing the facility upgrade would likely result in harm to steelhead present in drying reaches of the river due to the risk that those steelhead would not be allowed to be placed into perennial flow reaches and create an overcrowding condition.

IMPACT TO DISTRICT RESOURCES: There would be reduced costs to the District by not having to pay additional Monterey County fees associated with obtaining permits.

EXHIBIT

17-A Resolution 2018-18 Rendering Monterey County Zoning Ordinance Inapplicable to the Sleepy Hollow Steelhead Rearing Facility Upgrade

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