RULES AND REGULATIONS REVIEW COMMITTEE
ITEM:		ACTION ITEM
2.	Consider First Reading of Ordinance 121 of the Monterey Peninsula Water Management District Modifying On-Site Water Credit Rules Applicable To Redevelopment Projects
Meeting Date:			January 11, 2005	Budgeted:	N/A
From:			David A. Berger, General Manager	Program/ Line Item No.:	N/A
Prepared by:			Stephanie Pintar	Cost Estimate:	N/A
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General Counsel Approval: Yes
CEQA Compliance: Pending

SUMMARY: Ordinance No. 121 (attached as Exhibit 2-A) responds to the Board’s December 2004 direction to extend the time for which a credit can be reused on redevelopment project sites. This subject was discussed at the January 11, 2005 Water Demand Committee meeting. The Water Demand Committee recommended extending Water Use Credits on Redevelopment Project sites for two five-year increments.

Ordinance No. 121 facilitates governmental planning and operations for Redevelopment Project Sites pursuant to the Community Redevelopment Law, found at California Health and Safety Code, section 33000, et seq. The ordinance would allow the ten (10) year limit to reuse water credits for such projects to be extended twice, in five (5) year increments, to afford a maximum period of twenty (20) years to use on-site water credits in connection with a Redevelopment Project, as that term is defined by Health and Safety Code, section 33010. The ordinance also revises the definition of a “site” as recommended by the Rules and Regulations Committee on April 5, 2005.

Attached (Exhibit 2-B) is the Notice of Intent to Adopt a Negative Declaration and the Proposed Negative Declaration that were filed with the County Clerk on June 20, 2005. The comment period ends July 11, 2005.

RECOMMENDATION: The Rules and Regulations Review Committee should recommend that the Board at its July 18, 2005 meeting: 1) Adopt a proposed Negative Declaration related to adoption of Ordinance 121; and 2) approve first reading of Ordinance 121.

BACKGROUND: At its December 14, 2004 meeting, the Board considered a request for a water credit transfer from a redevelopment site in Seaside. The Board’s action included a referral to the Water Demand Committee to discuss modifying District Rule 25.5 (Water Use Credits) to allow a Water Use Credit for redevelopment projects to remain valid longer than the current maximum of 120 months (10 years) as allowed by District Rule 25.5. Redevelopment projects often take many years to come to fruition, and an extended Water Use Credit for these projects would assist the Redevelopment Agency in obtaining developers and completing the project.

District Rule 25.5 currently allows reuse of a documented Water Use Credit for up to a maximum of ten years when the credit is established prior to abandonment of use. In the recent public hearing regarding the water transfer in Seaside, the redevelopment site has been vacant for ten years and the Water Use Credit was scheduled to expire before the permits for the redevelopment project were issued. The City of Seaside has been actively pursuing a developer for the site for the past decade and needed additional time to secure a developer before the permits are issued. Transferring the credit from the site was one of the only options to maintain the water credit for the project.

Over 400 cities and counties in the state have used the authority in California Community Redevelopment Law (CRL) to establish a redevelopment agency to pursue the elimination of blight in designated Redevelopment Project Areas. A project area is the specific geographic location within which blight removal, revitalization of private properties, and public infrastructure improvements are intended to take place. Under CRL a proposed Redevelopment Project Area Plan must first go to public hearing, giving citizens a chance to learn more about redevelopment and to express their views. Thereafter, the Redevelopment Agency and the City Council may act to adopt the project area plan, take necessary actions to implement it, and monitor and report on its results. Directly relevant to the subject of this report, and recognizing the long-term nature of redevelopment activities, CRL authorizes project area plans created prior to 1993 to be effective for up to 41 years from initial adoption (and 31 years for plans adopted after 1993).

A redevelopment project area plan describes where and how specific redevelopment activities and public infrastructure improvements are expected to be undertaken, but it does not approve any specific project.  The plan authorizes the Redevelopment Agency to undertake certain actions to achieve its goals, such as: to assemble and re-sell land in order to attract private investment required to revitalize or replace vacant commercial buildings in a project area; create affordable housing opportunities; and to use tax increment financing to repay debt issued to fund street repairs, replace utilities, add public parking facilities and other public infrastructure improvements required to induce private sector redevelopment investment in the project area. 

Exhibits

2-A Draft Ordinance No. 121 – An Ordinance of the Board of Directors of the Monterey Peninsula Water Management District Modifying On-Site Water Credit Rules Applicable to Redevelopment Projects

2-B Notice of Intent to Adopt a Negative Declaration and Proposed Negative Declaration

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