ITEM:		CONSENT AGENDA
5.	AUTHORIZE DISTRICT STAF TO FILE FOR EXTENSION OF WATER RIGHTS PERMITS 202808 A AND C
Meeting Date:			September 21, 2020	Budgeted:	N/A
From:			David J. Stoldt	Program/	Water Supply Projects
			General Manager	Line Item:
Prepared By:			Jonathan Lear	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines section 15378.

SUMMARY: On 3/4/20, the District received a letter from the State Water Resources Control Board (SWRCB) asking the District a number of questions regarding Water Rights 20808 held by the District. The letter provides a history of the 20808 Water Right(s) and describes the process in which the water right was split into 3 water rights. The letter asks two specific questions regarding Water Right 20808B and outlines a few important dates for Water Rights 20808 A and C.

In response to the State Board’s letter, on 3/24/20 District staff and SWRCB staff had a conference call to chart a path forward for the Water Rights. SWRCB staff explained when the period to demonstrate beneficial use fora water right comes to a close, the water right holder has three choices; 1) keep diverting water under the right capped at the maximum calendar year diversion of record, 2) file a petition for an extension of time to demonstrate maximum beneficial use, or 3) file to license the water right. When a water right is licensed, a finding is made as to the maximum diversion rate and the maximum annual diversion volume. The findings often do not set the rate and volume of the right above what has been demonstrated, however the District can work with SWRCB Staff to provide information and analysis that may allow the State Board to make a finding that would set the Water Right at an annual volume larger than the largest volume diverted in the last 10 years.

In April, staff met internally with District Counsel in order to understand the relationship between the Water Rights and Water Code Sections 844 and 1700 before developing a recommendation for moving forward with a Petition for Extension of Time and Licensing. On April 6th, the MPWMD Water Supply Committee considered this item and recommended the item be considered by the full Board. MPWMD Board considered this item on April 20th and provided the following direction. For 20808 A and C, MPWMD Board directed District Staff to initiate the licensing process and provide an analysis that could allow SWRCB Staff to make a finding for more water than the highest annual volume based on a streamflow analysis and CPUC testimony. At the time that the draft license volumes are available, bring them to the Board for further direction.

Because 20808 A and C are jointly held by the District and Cal-Am, District staff reached out to Cal-Am staff to communicate the direction District Staff had been given related to these water rights. In August, Cal-Am’s water rights legal counsel began to express concern regarding moving into licensing of the water rights without demonstrating higher use on the water rights. The concern is related to past experiences with water rights licensing process and the practice of the State Water Board at capping the water right at the highest demonstrated value. If this were to occur, the water rights would be licensed at a lower value than their current face value. Cal-Am pointed out that because there are planned improvements in the next General Rate Case to increase the capacity of the Carmel Valley well field, there are planned infrastructure changes that will allow Cal-Am and the District to demonstrate higher use of the water rights. Cal-Am expressed that because of these planned infrastructure improvements a more conservative approach of filing a petition for extension of time to take advantage of the infrastructure upgrades and demonstrate a higher water use was a more conservative approach and would be preferred.

On August 20, District and Cal-Am staff had a conference call with State Board staff to discuss the two paths forward; moving into licensing or filing a petition for extension of time. State Board staff did indicate that both of those paths were available for these water rights. State Board staff pointed out that just because a petition for extension of time is filed before the closing of a license period for a water right does not mean the extension had or would be granted. The current time frame for processing a petition at the State Board is 3 to 4 years. Following the call, Cal-Am indicated that because of past experience with licensing water rights at the State Board, the more conservative approach of filing a petition for extension of time before the licensing period expires would be preferred. District staff spoke internally with District Council and verified that filing a petition for extension of time and then demonstrating higher water use was the more conservative approach.

RECOMMENDATION: Direct District staff to work with Cal-Am to file petitions for extension of time to demonstrate higher use of water rights 20808 A and C before the licensing period ends on December 1, 2020.

BACKGROUND: On December 1, 2020 the period to demonstrate beneficial use of water diverted under these permits expires. At that point, even if the face value of the Water Rights are larger than the maximum volume diverted in a calendar year, the Water Rights are capped at the maximum demonstrated volume according to the SWRCB. In addition, these water rights have a maximum rate of diversion also capped at the demonstrated rate. The District has demonstrated maximum diversion rates for each of these Water Rights, but has not been able to demonstrate maximum face value of the Rights. Face value of these water rights was calculated at the time the petition for change of the original 20808 was submitted by multiplying the number of days within the diversion window (December 1 to May 31) by the maximum diversion rate for each permit. The face values for 20808 A and 20808 C are 2,476 and 2,900 Acre Feet per calendar year. However, these Water Rights are subject to in stream flow requirements that must be met prior to diverting water. The District has daily streamflow records dating back to the 1950’s and there has never been a year where all days between December 1 and May 31 have been above the instream flow requirements.

When the period for demonstrating beneficial use for a water right comes to a close, the water right holder has three choices; 1) keep diverting water under the right capped at the maximum calendar year diversion of record, 2) file a petition for extension of time to extend the time to demonstrate maximum beneficial use, or 3) file for a licensing of the water right. When a water right is licensed, a finding is made as to the maximum diversion rate and the maximum annual diversion volume. The findings do not often set the rate and volume of the right above what has been demonstrated, however the water right is considered perfected and can never be revoked.

Currently, the District has shown it can divert under each of these water rights at the maximum daily diversions, but the maximum annual volume diverted for the water rights are 1,117 AF and 1,428 AF for 20808 A and C respectively.

EXHIBITS

None

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