SUMMARY PAPER –
April 2010
Funding of Carmel
River Habitat
Improvements from
2009 Settlement Agreement between California American Water, NOAA Fisheries,
and the California Department of Fish and Game
Summary: Beginning July 1,
2009, California American Water (CAW) paid $3.5 million to the California
Department of Fish and Game to establish a fund for projects to improve habitat
along the Carmel River for threatened steelhead. CAW ratepayers on the Monterey
Peninsula and in Carmel
Valley will pay $1.1 million each July
1 up to $11.2 million (or until CAW stops illegal Carmel River
diversions). CDFG is charged with
managing and monitoring the funds. In
early 2010, CDFG announced that funds will be disbursed through its annual
Fisheries Restoration Grant Program (FRGP).
For the 2010 FRGP, CDFG consulted
with the National Marine Fisheries Service (NMFS) office in Santa
Rosa, California concerning the Carmel River
focus. Within the special focus category
for the Carmel River Settlement Agreement funds, only project designs to
improve fish passage at stream crossings and instream barriers in the mainstem
of the Carmel River downstream of the Los Padres Dam
and water conservation measures in the Carmel River Lagoon were eligible for funds. Local project sponsors and Carmel River
watershed stakeholders were not involved in identifying the 2010-11 FRGP focus.
It should be noted that several local agencies and non-profit organizations
have been working for more than 25 years to restore and protect the Carmel River
largely with their own funds or donated labor and materials. Whereas, CDFG has focused on being a
regulator of activities along the river under its Lake
and Streambed Alteration program.
As a result of the limited focus
for the 2010-11 FRGP, several projects
previously identified as having a high priority were not eligible to apply for
Settlement Agreement funds.
Advantages of disbursing funds through the FRGP:
· CDFG
is the lead agency under CEQA and projects receive a Mitigated Negative Declaration.
· CDFG
authorizes projects under its Stream Alteration program as part of the FRGP
review and approval process.
Disadvantages of disbursing
funds through the FRGP:
· The
FRGP limits project types to those found in the CDFG California Salmonid
Stream Habitat Restoration Manual (Flosi et al., 1998, 2003, 2006 and 2009). In addition, restoration project priorities
for the Carmel River
appear to be guided by the Steelhead Restoration and Management Plan for California (DFG
1996). The latter document does not
reflect new information for the Carmel
River concerning main
stem dams, lagoon habitat and watershed priorities developed through
collaborative stakeholder processes.
· Funding
and construction of complex projects through the FRGP can take four years to
complete and requires two grant applications, two full review /approval processes,
and two separate grant agreements.
· FRGP
grant applications are time-consuming and are designed for a statewide
competitive process. Whereas, Settlement
Agreement funds are to be used exclusively for Carmel River
projects.
Projects that were not eligible for the 2010-11 FRGP special focus for
the Carmel River
Sleepy Hollow Steelhead
Rearing Facility (SHSRF) Upgrade:
MPWMD operates the SHSRF seasonally to raise steelhead in a simulated
stream environment adjacent to the Carmel River after the steelhead are rescued
from the drying portions of the Carmel River.
This upgrade project would improve intake facilities to deal with water
quality degradation in the Carmel
River in the summer due to
the releases of fine sediment and suspended solids from San Clemente Reservoir. The reservoir is virtually silted in and when
the level is drawn down to comply with an order from the Division of Safety of Dams,
fine material passes downstream that causes problems with the pumps at SHSRF
and contributes to turbidity in the simulated stream. Improvements to the SHSRF were identified in
2005 as the second-highest priority for steelhead in the Carmel River. The estimated project cost ranges from about
$700,000 to $1.3 million.
Installation of an ecosystem
protective barrier at the Carmel River lagoon:
The County of Monterey, which is responsible for responding to
flood emergencies, breaches the barrier beach across the Carmel River
mouth when the lagoon level rises and threatens to flood low-lying
structures. Generally, this condition occurs
at least once per year and can occur several times during the rainy
season. CDFG, NMFS, the Coastal
Commission and non-profit groups concerned about the effects of mechanical breaching
on steelhead have repeatedly protested the breaching activity. There have been warnings from time to time
from some of these organizations concerning the potential for legal actions to either
stop the activity or require the County to obtain authorizations from
regulatory agencies for its actions (the County operates under its emergency
powers when flooding is imminent). The
Carmel River Watershed Conservancy has proposed a project to install vinyl
sheet piling around the perimeter of the lagoon to prevent flooding of
low-lying areas. The project would
involve a pump system to deal with local inflow when the lagoon is high. If implemented, the project could significantly
reduce the frequency of mechanical breaching of the beach. The estimated cost of installation is about $1.3 million.
Lower Carmel
River Floodplain
and Riparian Restoration Project:
The main focus of this project is to restore hydrologic connectivity
between the floodplain on the east and the lagoon to the west of Highway 1 by
raising a portion of Highway 1. Up to 85
acres adjacent to the Carmel
River would be restored to
riparian and wetland habitat and use of a private well for agricultural
operations would be reduced or potentially eliminated. The Big Sur Land Trust (BSLT) is seeking
$800,000 to continue design and engineering of this project. The total cost of the project may range
between $10 million and $11 million. At
present, about $3.5 million in grant funding has been committed. The River
Parkways/Urban Streams Restoration grant program may also commit an additional
$3 million to the project (this is under review). BSLT will donate the land, which is valued at
about $1million to a public agency.
Local Actions: In response
to concerns about delays and restrictions on project types, local project
sponsors including MPWMD, the Carmel Area Wastewater District, the Big Sur Land
Trust, the Carmel River Steelhead Association (CRSA), the Carmel River
Watershed Conservancy, and the Resource Conservation District of Monterey
County engaged in discussions with CDFG officials (specifically, the local FRGP
coordinator, Margaret Paul and the Central Coast Region’s Regional Manager, Dr.
Jeff Single) about alternative funding arrangements. Dr. Single indicated a willingness to explore
options such as individual agreements with project sponsors and making a block
grant to a sister agency (such as the State Wildlife Conservation Board) for
dispersal of funds to eligible project sponsors.
Background: A Settlement
Agreement was executed in early 2009 by California American Water (Cal-Am or
CAW), the U.S. Department of Commerce/National Oceanic and Atmospheric
Administration/National Marine Fisheries Service (NMFS), and the California
Department of Fish and Game (CDFG) with regards to impacts resulting from water
withdrawals by Cal-Am from the Carmel
River system. The agreement stemmed from negotiations
between NMFS and CAW over a potential violation of the federal Endangered
Species Act (ESA) as it applies to Carmel
River steelhead, which are a part of
the steelhead population of the Central
Coast that is listed as a
threatened species. The first negotiated
agreement over CAW Carmel River
diversions was executed in 2001 after NMFS informed CAW that NOAA would impose
fines as high as $330 million or more per year for claimed violations of the
ESA caused by its Monterey District operations on the Carmel River. In 2006, CAW and NMFS executed another
agreement to further reduce impacts from water diversions. However, this agreement was not implemented
after the parties to the agreement learned that funds would go to the U.S
Treasury general fund and not necessarily be spent on Carmel River
projects.
In order to insure that funds
would be directed to Carmel
River projects, the
California Department of Fish and Game (CDFG) was requested to be a party to a
new Settlement Agreement to administrate the funds. CDFG agreed, although local CDFG officials
describe that there was some reluctance to be an administrator due to staffing
concerns. After execution of the
agreement by all three parties in early 2009, CAW began making payments on July
1, 2009 with a $3.5 million deposit to CDFG and will continue making annual
payments of $1.1 million until July 1, 2016, unless the agreement is terminated
by complying with a State of California order to reduce Carmel River diversions
or CAW obtains an incidental take statement from NMFS for its diversion.
CDFG, which is the administrator
for the Settlement Agreement funds, is allowed to use up to 13% of each
mitigation payment as adjusted for inflation, on an ongoing basis throughout
the term of the Agreement for reimbursement of any costs it incurs to
administer, manage, and monitor the funds and projects funded. In February
2010, CDFG announced that Settlement Agreement funds would be distributed
through their annual Fisheries Restoration Grant Program.
By utilizing the existing FRGP,
the time and cost of permitting a limited set of projects should be
reduced. However, because the FRGP uses
a lengthy process to review, approve, and fund proposed projects, it is clear
that most projects will take several years to complete if this program is the
only funding source for projects. In
addition, restrictions imposed by the
FRGP on project types make it unclear whether several projects previously
identified by MPWMD, CRSA and NMFS as having a high priority, including
improvements to the MPWMD Sleepy Hollow Steelhead Rearing Facility, could be
funded and permitted through the FRGP.
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