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ITEM: |
ACTION ITEM |
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Meeting Date: |
July 18, 2022 |
Budgeted: |
N/A |
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From: |
David J. Stoldt, |
Program/ |
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General Manager |
Line Item No.: N/A |
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Prepared By: |
David J. Stoldt |
Cost Estimate: |
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General Counsel Review: N/A |
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Committee Recommendation: At its July 7, 2022 meeting the Water Demand Committee voted unanimously to recommend the preferred option discussed below. |
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CEQA Compliance: This
action does not constitute a project as defined by the California
Environmental Quality Act Guidelines section 15378 |
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SUMMARY: Montage Health has proposed another building to be added to its Ryan Ranch campus, an approximately 50,000 square-foot (SF) cancer treatment building. This will be the fifth building in the complex on Upper Ragsdale near the District’s building (see Exhibit 15-A), and does not include Montage Health Ohana Center, a 55,600 SF child and adolescent behavioral health center currently under construction on Lower Ragsdale at a separate site.
A 50,000 SF building water need computed using the District’s Rule 24 Table 2 factor for a Group I use, as has previously been applied to the other buildings on the Montage Ryan Ranch campus, results in 3.5 acre-feet (AF) per year. However, District staff are presently working with Montage to determine the types of use which will inhabit the site and whether a higher water use capacity needs to be assigned, as allowed under Rule 24: “Any Non-Residential water use which cannot be characterized by one of the use categories set forth in Table 2 shall be designated as “other” and assigned a factor which has a positive correlation to the anticipated Water use Capacity for that Site.” For the sake of this discussion, assume 4.0 AF of annual need.
Recently, Ryan Ranch water availability has been limited by a moratorium on new uses in Ryan Ranch and Cal-Am well capacity constraints. Recent building projects have been required to acquire an allocation from Seaside Basin pumpers who have access to water and a wheeling agreement to have such water delivered to the end user in Ryan Ranch. For example, in order to build its Building A and the Carole Hatton Breast Care Center in Ryan Ranch Montage acquired 7.17 AF in three separate transactions with private entities with Seaside Basin pumping rights. Such transactions are both costly and increasingly difficult to do as availability becomes scarce.
However, recently California American Water Company (Cal-Am) interconnected the Ryan Ranch system with its Monterey Main System and is now able to regularly receive water from the Seaside Basin, Pure Water Monterey, or the Sand City desalination facility. The Cal-Am application in July 2020 for an amendment to its Water Distribution System permit to allow the pipeline states: “The Ryan Ranch Unit and Bishop Unit will be served solely from groundwater originating from the Seaside Groundwater Basin”, hence, in the District’s opinion, is not subject to the cease and desist order or the moratorium.
This calls into question whether the proposed Montage project will require acquisition of an entitlement of water from a Seaside Basin pumping rights holder or if there are other options available to Montage. At its July 7, 2022 meeting the Water Demand Committee reviewed three potentially less costly and possibly more timely and straightforward options to ensure water availability to the project: (i) Utilize existing unused CHOMP Allotment via adjustment in the definition of “Site”; (ii) Utilize Existing Unused CHOMP Allotment via Transfer; and (iii) Utilize the District Reserve. The Committee unanimously recommends the first option as the preferred approach.
RECOMMENDATION: Water Demand Committee recommends the Board approve utilization of existing unused CHOMP Allotment via adjustment in the definition of “Site” to make water available for the proposed Montage Health Cancer Center building.
DISCUSSION: Previously, Montage acquired 7.17 AF in three separate transactions with private entities with Seaside Basin pumping rights. Such transactions are both costly and increasingly difficult to do as availability becomes scarce. They are also complex transactions that require the District writing a wheeling or front-loading agreement and the District Board amending the Cal-Am Water Distribution System permit.
Preferred Option: Utilize Existing Unused CHOMP Allotment via Adjustment in ‘Site’ Definition: No. 87 which was adopted in 1997 established an allocation of water specifically for CHOMP build-out at the Highway 1 and Route 68-West location, but to date has gone under-utilized. The Ordinance created a special community reserve allocation of 18.28 acre-feet ("AF") of water that was created exclusively for the benefit of CHOMP. This allocation was debited from the amount of water conserved to date at that time under the District's 1989 Conservation Plan.
However, two later actions were taken by the District: (i) at the May 29, 2003 District Board meeting Ordinance No. 87 was unanimously affirmed to remain in place, and (ii) at the July 21, 2003 meeting the District Board established an overall “water consumption cap” of 119.28 AF at the CHOMP hospital campus and specified Assessor’s Parcel Number (APN) 008-132-011. The Conditions of Approval (Exhibit 15-B attached hereto) were recorded as a deed restriction.
District staff has examined the most recent 8 years and 5 months of actual consumption records for the CHOMP hospital parcel and average use has been 82.606 AF per year. This means that Montage has “unused” capacity under its “water consumption cap” equal to 36.674 AF. Bringing both campuses under the existing cap would add the Ryan Ranch usage to the historical CHOMP usage. The Ryan Ranch campus usage is estimated to be approximately 13.5 AF based on permits or 14.5 AF based on limited recent billing data. That would still leave at least 22.2 AF available to Montage Health across their whole newly defined “Hospital Site” as discussed below.
This Preferred Option would simply add to the existing definition of “Site” under District Rule 11 (Exhibit 15-C attached hereto) and a new definition of “Hospital Site” as shown in the exhibit.
Water Demand Committee considered Option 2: Utilize Existing Unused CHOMP Allotment via Transfer: Under District Rule 28 Water Use Credits for existing water use may be transferred from one property to another for commercial connections. However, the following condition shall apply:
“Each Jurisdiction shall act as the lead agency under the California Environmental Quality Act and shall consider the impacts of the Water Use Credit transfer application under consideration, as well as the cumulative impacts of other transfers, on the water supply. The District shall deem complete only those Water Use Credit transfer applications forwarded by the Jurisdiction which incorporates therein a finding that the project and the cumulative impacts of other transfers do not adversely affect the environment. The Water Use Credit Transfer application may be denied by the General Manager if the California Environmental Quality Act review by the Jurisdiction does not adequately analyze the project's impacts relating to the proposed Water Use Credit transfer.”
It would be the District’s suggestion under this Option 2 that Montage Health take 5.33 AF from its under-utilized “water consumption cap” at the hospital (APN 008-132-011) and retire 1.33 AF to the benefit of the environment and to also account for any, but incalculable, ‘cumulative impacts’ of such transfers and issue a mitigated negative declaration for the CEQA findings in such a transfer. This will take coordination with the City of Monterey.
This option was not recommended because it was most vulnerable to a CEQA challenge.
Water Demand Committee also considered Option 3: Utilize the District Reserve: The District Reserve was re-established by Ordinance 182 adopted by the Board at its May 20, 2019 meeting. That Ordinance restored a definition to Rule 11, which had been removed when the District Reserve Allocation was eliminated in 1995:
“District Reserve Allocation" shall mean a quantity of water held/or use at the discretion of the District.
It also re-established Rule 33-B: “The District Reserve Allocation shall refer to a quantity of water available for use at the District's discretion. The District Reserve Allocation can be augmented by dedications of water from a Water Entitlement, Water Use Credit, Water Credit, or a new Source of Supply.”
Use of the word “discretion” was intentional and derived from direction provided to staff by the Water Supply Planning Committee at its February 21, 2018 meeting. At that meeting under the agenda item “Discuss Reinstatement of District Reserve and Policy for Use,” The committee discussed establishment of a District reserve, and if it should be restricted to projects that provide a public benefit or if it could be allocated for jurisdictional use. During the discussion committee members opined that: (a) only for public benefit projects; (b) Board should determine if a project provides a public benefit; (c) each request should be determined on its merit by the Board – not according to a list of qualifying projects; and (d) project should not be growth inducing. The Board subsequently agreed to maintain its discretion.
The District Reserve stands at 9 AF. The Board could simply choose to allot 4 AF[1] to Montage Health for this project, and later ‘refill’ the District Reserve when Pure Water Monterey expansion comes online.
This option was not recommended because it was most vulnerable to a challenge under Condition 2 of the Cease and Desist Order.
EXHIBITS:
15-A Location Map
15-B 2003 Conditions of Approval
15-C Potential Changes to District Definitions
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