ITEM:		DISCUSSION ITEM
12.	UPDATE ON WATER ALLOCATION PROCESS
Meeting Date:			October 21, 2024	Budgeted:	N/A
From:			David J. Stoldt	Program/	N/A
			General Manager	Line Item:	N/A
Prepared By:			David J. Stoldt	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: The District convened a meeting of the jurisdictions until September 12, 2024 to provide a detailed overview of the District’s methodology and process for allocation of the new supplies. The meeting reviewed the following, including but not limited to:

• Existing water demand by jurisdiction;
• The methodology of forecast for water demand by jurisdiction;
• The alternate methodology for determining demands for the Airport District and the Navy, Presidio, and Coast Guard;
• Impact, if any, of the Regional Housing Needs Allocation (RHNA);
• How much shall be allocated and how much retained in District Reserve; and
• How to incorporate existing unused jurisdictional allocations;

The District will make a presentation to the County Supervisors, City Councils, and Airport Board in the coming weeks similar to the presentation to be made to the District Board at this meeting. The General Manager will report back to the Board at its December meeting.

RECOMMENDATION: It is recommended that the Board (a) Receive the presentation by the General Manager on the 2024-2025 Water Allocation Process; and (b) Provide direction to staff on any alternative recommendations or proposals.

DISCUSSION: The Amended and Restated Water Purchase Agreement for the Pure Water Monterey (PWM) Expansion project was signed in March 2023. Construction of the PWM Expansion is expected to be complete in the fourth quarter of 2025. The Monterey Peninsula Water Management District (District) believes the PWM Expansion is expected to bring the permanent replacement water supply that will enable the lifting of the cease and desist order (CDO) and the moratorium on the setting of new meters, if Cal-Am, the District, and the State Water Board all cooperate.

A portion of the new supply over and above existing demand will be allocated to local jurisdictions through a process led by the District, involving first the staff of the affected jurisdictions, and then the District’s recommendations will be brought to the jurisdictions’ boards/city councils. This item represents the presentation of the District’s proposed 2024-25 Water Allocation Process.

In May 2023, the District authorized an environmental consultant to perform a literature review of Environmental Impact Reports (EIRs), Supplemental EIRs, general plans, etc for water projects and future growth and then advise the District through a technical memorandum on the appropriate environmental action for the Allocation Process. The Technical Memorandum concluded (a) that the proposed water allocation qualifies as a project under CEQA because it is being undertaken by a public agency (the District) and has the potential for reasonably foreseeable indirect physical changes in the environment, such as facilitating land development through the provision of increased water supplies. In other words, the additional water that would be available to jurisdictions in the District’s service area could facilitate development that would have otherwise been impossible due to lack of water availability; and (b) The document review determined that the Pure Water Monterey 2021 Supplemental EIR (SEIR) had already analyzed the growth-inducing and secondary environmental effects associated with the proposed water allocation, which is, in practice, a continuation of the District’s existing water allocation program. Based on those findings, the District undertook preparation of an Addendum to the SEIR.

The District prepared the EIR Addendum which supported the District’s determination that the additional water allocation is within the scope of the 2021 SEIR, did not require subsequent action under CEQA Guidelines Section 15162 and, in conjunction with the 2021 SEIR, adequately analyzes potential environmental impacts. The Addendum was adopted by the District Board in February 2024.

At its August 2023 meeting the District Board reviewed a schedule of activities leading to the allocation of water to the jurisdictions. However, due to delay in the County process of adopting a 2023-2031 Draft Housing Element to send to the State, and revisions to the City of Monterey’s Draft Housing Element in July, the District did not convene a meeting of the jurisdictions until September 12, 2024 to provide a detailed overview of the District’s methodology and process for allocation of the new supplies.

Staff representing each of the cities, including five city managers, the Airport, the military service branches, and several County departments attended the September 12^th workshop at District offices.

The September 12^th meeting reviewed the following, including but not limited to:

• Existing water demand by jurisdiction;
• The methodology of forecast for water demand by jurisdiction;
• The alternate methodology for determining demands for the Airport District and the Navy, Presidio, and Coast Guard;
• Impact, if any, of the Regional Housing Needs Allocation (RHNA);
• How much shall be allocated and how much retained in District Reserve; and
• How to incorporate existing unused jurisdictional allocations;

The presentation to be provided to the Board at its October 21^st meeting will summarize the allocation process and proposed allocations.

EXHIBITS

None

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