ADMINISTRATIVE COMMITTEE
3.	CONSIDER EXPENDITURE OF FUNDS TO RETAIN CONSULTANT TO PREPARE SUBSEQUENT EIR ON APPLICATION BY CALIFORNIA AMERICAN WATER TO SERVE MONTEREY BAY SHORES ECOSRESORT
Meeting Date:		April 14, 2009	Budgeted:	No
From:		Darby Fuerst,	Program:	WDS Permitting
		General Manager	Line Item No.:	N/A
Prepared By:		Henrietta Stern	Cost Estimate:	$180,869
General Counsel Approval: N/A
Committee Recommendation: The Administrative Committee reviewed this item on April 14, 2009 and recommended ____________________.
CEQA Compliance: N/A

SUMMARY: The Board will consider authorizing staff to retain David J. Powers and Associates (DJP) for a not-to-exceed amount of $180,869 to prepare a Subsequent Environmental Impact Report (SEIR) on the water-related impacts of California American Water (CAW) production of up to 90 acre-feet per year (AFY) to serve the proposed Monterey Bay Shores Ecoresort (MBSE) in Sand City. The scope of work, cost estimate and schedule is provided as Exhibit 3-A. Preparation of the SEIR stems from action by the District Board regarding Application #20080915MBS submitted by co-applicants CAW and Security National Guaranty, Inc. (SNG). At its February 26, 2009 meeting, the District Board took the following action:

1. Denied Application #20080915MBS without prejudice;

2. Directed staff to prepare Findings of Denial for consideration on March 26, 2009; and

3. Determined that if the applicant wishes to proceed with the application, MPWMD shall prepare a SEIR focused on water issues prior to consideration.

Regarding Item #2, the Board adopted the Findings of Denial at its March 26, 2009 meeting. The primary issues identified in the Findings include: (a) inadequate documentation of the environmental effects of exercising SNG’s water rights through service by CAW, (b) need to evaluate alternative means of supplying the MBSE parcel from Seaside Basin sources, and (c) the desire for the public to have an opportunity to comment on a recent environmental document for the project.

Regarding Item #3 above, at this writing on April 7, 2009, co-applicant SNG has verbally confirmed that it wishes to move forward on the application and is prepared to fund the preparation of an SEIR. However, the co-applicants have not seen the scope, cost and schedule provided in Exhibit 3-A. Written confirmation from both co-applicants will be required prior to execution of a contract with DJP.

As shown in Exhibit 3-A, the key components of the scope are to prepare a Draft and Final SEIR in compliance with the California Environmental Quality Act (CEQA). This includes circulation of a Notice of Preparation, technical report preparation and review, Draft SEIR preparation, meetings and public hearings, and response to public comments. A major work task is evaluation of hydrologic impacts, to be performed by Todd Engineers. Other impact assessments relate to: aquatic resources on the Carmel River due to potential use of Carmel River water as a source of supply; water supply for CAW customers; cumulative impacts; and alternative means of supplying water to the project site via SNG’s water rights in the Seaside Basin. It is noted that the Seaside Basin Adjudication assigned 149 AFY to the MBSE parcel, and 90 AFY of that amount are slated for the MBSE project.

The estimated cost would be $180,869. This includes a base amount of $164,426 plus a 10% contingency of $16,443 given that unforeseen factors could affect the effort needed to address pertinent SEIR issues. The total estimated timeline is 43 weeks from when the consultant receives details of water supply timing and volume from CAW (i.e., water supply description).

RECOMMENDATION: District staff recommends that the Board should:

1. Authorize staff to contract with DJP for the scope of work provided in Exhibit 3-A, at a cost not to exceed $180,869. This includes a 10% contingency ($16,443) that would not be released unless authorized by the General Manager in response to a written request by the consultant.

2. Direct staff to execute a contract with DJP upon receipt of: (a) applicant payment of District permit processing expenses through March 31, 2009 ($18,035); and (b) executed Reimbursement Agreement for the SEIR between MPWMD and the two co-applicants. The applicants were advised of these recommendations by e-mail in early April 2009.

DJP is recommended as a sole-source contractor in order to maximize efficiency and minimize delay. The firm prepared the December 2008 Addendum to the original 1998 EIR on the project, and thus is familiar with the project and setting. DJP would subcontract with Todd Engineers for hydrology tasks, as Todd has ongoing experience in the Seaside Basin including coordination with MPWMD staff. Aquatic issues will be addressed by H. T. Harvey and Associates.

At its April 14, 2009 meeting, the Administrative Committee recommended that the Board ___________.

BACKGROUND AND DISCUSSION: Public hearings on the CAW/MBSE application were held on November 17, 2008; and on January 29, February 26, and March 26, 2009. Extensive background information is provided in the materials prepared for previous meetings.

The November 17, 2008 materials are available on the District website at:

http://www.mpwmd.dst.ca.us/asd/board/boardpacket/2008/20081117/1117agenda.htm (Item 11).

The January 29, 2009 staff report and presentation materials are available on the website at:

http://www.mpwmd.dst.ca.us/asd/board/boardpacket/2009/20090129/0129agenda.htm (Item 18).

The February 26, 2009 staff report and presentation materials are available on the website at:

http://www.mpwmd.dst.ca.us/asd/board/boardpacket/2009/20090226/0226agenda.htm (Item 15).

The March 26, 2009 staff report and presentation materials are available on the website at:

http://www.mpwmd.dst.ca.us/asd/board/boardpacket/2009/20090326/0326agenda.htm (Item 14).

The Addendum to the Final Environmental Impact Report, Monterey Bay Shores Resort, SCH #97091005 (printed Dec. 2008) considered by the City of Sand City on January 20, 2009 is on the District website at: http://www.mpwmd.dst.ca.us/ceqa/ceqa.htm (water-related text only).

The Seaside Basin adjudication decision and related information are available on the Watermaster’s website at: www.seasidebasinwatermaster.org.

On February 26, 2009, the District Board, as Responsible Agency under the California Environmental Quality Act (CEQA), exercised its independent judgment, and determined that an SEIR is necessary to make an informed decision, consistent with the criteria in CEQA Guidelines Section 15162. The criteria are described in the March 26, 2009 agenda package.

The Findings of Denial adopted on March 26, 2009 explain the specific rationale for why an SEIR is needed. Part of the reason for this determination was new information submitted by CAW at the February 26, 2009 public hearing that raised questions about CAW’s ability to serve MBSE from Seaside Basin wells year-round. This issue has ramifications for community water supply and hydrologic effects to the Carmel River. For reference, some of the key water supply/hydrology issues are:

• Co-mingling of CAW supply sources (i.e., Seaside Basin and Carmel River), including State Water Resources Control Board (SWRCB) clarification of whether or not the one-for-one replacement requirement would apply if Carmel River sources are used to serve MBSE at any time, and whether monthly tracking and reporting of water sources would be acceptable.

• Operational information, including which wells would most likely be used to serve MBSE and how would they be operated? Is there the possibility of facilitating delivery to MBSE with a CAW well that produces less than 250 gallons per minute, such as CAW’s Darwin or Military Wells?

• Cumulative effects of CAW delivery of water to MBSE, in light of the pending SWRCB Cease and Desist Order, pending action by the Watermaster to reduce CAW’s allowed extractions from the Seaside Basin, and additional Alternative Producers requesting CAW service instead of their own wells.

• Alternative means of supplying water to MBSE other than use of CAW supply, especially during the winter when Carmel River sources might be used by CAW. Could a combination of sources be used, either concurrently or temporally within a year, or perhaps sequentially over several years as new long-term sources of supply become available to CAW?

IMPACT TO DISTRICT STAFF/RESOURCES: This expenditure is not included in the FY 2008-2009 budget, but is 100% reimbursable by the co-applicants (CAW and SNG). A rough estimate of costs will also be added for the FY 2009-2010 budget for work anticipated after July 1, 2009, and will be designated as 100% reimbursable. District staff time will be needed to manage the consultant contract and provide guidance and information. Affected personnel most likely will include the Project Manager and Water Resources Division Manager.

EXHIBIT

3-A DWP Scope of Work and Cost Estimate dated April 6, 2009

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