MPRWA Agenda Packet 05-14-15

Agenda Monterey Peninsula Regional Water Authority (MPRWA)

Regular Meeting

7:00 PM, Thursday, May 14, 2015 Council Chamber 580 Pacific Street

Monterey, California

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

PUBLIC COMMENTS PUBLIC COMMENTS allows you, the public, to speak for a maximum of three minutes on any subject which is within the jurisdiction of the MPRWA and which is not on the agenda. Any person or group desiring to bring an item to the attention of the Authority may do so by addressing the Authority during Public Comments or by addressing a letter of explanation to: MPRWA, Attn: Monterey City Clerk, 580 Pacific St, Monterey, CA 93940. The appropriate staff person will contact the sender concerning the details.

CONSENT AGENDA

1. Approve Minutes from April 9, 2015 - Milton

2. Approve and File Checks through May 14, 2015 - Milton

3. Receive a report on a Possible Visit on May 29, 2015 by State Water Resources Control

Board Member Tam Doduc. P.E., and possibly others. - Cullem

AGENDA ITEMS

4. Receive Report, Discuss, and Provide Staff Direction on the California State Mandatory

Conservation Requirements - Stoldt

5. Consider A Downward Revision To The Adopted Fiscal Year 15-16 Budget (From

$390,000 To $290,000), Including Changes/Deletions To Contract Services In Response To Fiscal Concerns Of The County Supervisors, And Approval Of Related Budget Resolution. - Cullem

6. Reconsider No Or Low Cost Options To Conduct A Focused Review Of Intake System &

Brine Disposal Sections Of The Monterey Peninsula Water Supply Project Draft Environmental Impact Report As Requested By The Technical Advisory Committee And Members Of The Public. - Cullem

7. Receive An Update On The Summary Project Schedule For The Monterey Peninsula

Water Supply Project (MPWSP) Including Status Of Slant Test Well Operations And

Thursday, May 14, 2015

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Results. - Crooks

8. Receive Report And Discuss The Cease And Desist Order Extension Request Proposed

By Cal Am. - Cullem

ADJOURNMENT

The City of Monterey is committed to including the disabled in all of its services, programs and activities. In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (831) 646-3935. Notification 30 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II]. Later requests will be accommodated to the extent feasible. For communication-related assistance, dial 711 to use the California Relay Service (CRS) to speak to City offices. CRS offers free text-to-speech, speech-to-speech, and Spanish-language services 24 hours a day, 7 days a week. If you require a hearing amplification device to attend a meeting, dial 711 to use CRS to talk to the City Clerk's Office at (831) 646-3935 to coordinate use of a device. Agenda related writings or documents provided to the MPRWA are available for public inspection during the meeting or may be requested from the Monterey City Clerk’s Office at 580 Pacific St, Room 6, Monterey, CA 93940. This agenda is posted in compliance with California Government Code Section 54954.2(a) or Section 54956.

MINUTES

MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA) Regular Meeting

7:00 PM, Thursday, April 9, 2015 COUNCIL CHAMBER 580 PACIFIC STREET

MONTEREY, CALIFORNIA Directors Present: Edelen, Kampe, Pendergrass, Roberson , Rubio

Directors Absent: Burnett Staff Present: Executive Director, Legal Counsel, Clerk ROLL CALL Vice President Kampe called the meeting to order at 7:00 PM.

PLEDGE OF ALLEGIANCE REPORTS FROM BOARD DIRECTORS AND STAFF Executive Director Cullem reported that he needed to add an urgency item that arose after the 72 hour posting deadline regarding a draft letter of support for the State Water Resources Control Board water cuts and requested the Board approval of adding it to the agenda on an emergency basis as Agenda Item 9.

On a motion by Director Edelen, seconded by Director Pendergrass, and carried by the following vote, the Monterey Peninsula Regional Water Authority agreed to add Agenda Item 9 to Receive Report, Discuss and Provide Direction on Comments to the State Water Resources Control Board (SWRCB) with Regard to Pending Regulations on Mandatory Reductions in Water Usage.

AYES: 5 DIRECTORS: Edelen, Kampe, Pendergrass, Roberson , Rubio

NOES: 0 DIRECTORS: None ABSENT: 1 DIRECTORS: Burnett ABSTAIN: 0 DIRECTORS: None RECUSED: 0 DIRECTORS: None PUBLIC COMMENTS Vice President Kampe invited public comments for items not on the agenda.

• Tom Rowley expressed disappointment that the Monterey Peninsula Water Management District did not provided any media regarding the filing made by Monterey Peninsula Tax Payers Association’s 39 objections and request for a rehearing. He found objectionable the comments he made by the General Manager that it was a frivolous law suit.

• Nelson Vega spoke to a 60 minutes production about water in California and to the lack of participation with the agricultural industry to solve the water problem. He suggested working with the Salinas Valley Farmers to economize and share the water with all.

• Daryl Kenyon spoke to the cost effectiveness of desal and the cost proposals of the desal facilities which would provide water at an unaffordable cost to the rate payers. He

MPRWA Minutes Thursday, April 9, 2015

Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, April 9, 2015

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proposed a county wide sustainable provision and management plan indicating he was working with Monterey County Administrative Officer Bauman.

CONSENT AGENDA Vice President Kampe requested to pull Item 4 for discussion. He then invited public comment and had no requests to speak.

On motion by Director Edelen and seconded by Director Rubio and passed by the following vote the Authority Board approved Consent Items 1 through 3 as presented.

AYES: 4 DIRECTORS: Edelen, Kampe, Pendergrass, Rubio

NOES: 0 DIRECTORS: None ABSENT: 1 DIRECTORS: Burnett ABSTAIN: 1 DIRECTORS: Roberson RECUSED: 0 DIRECTORS: None

1. Approve Minutes of March 12, 2015 Regular Meeting Action: Approved

2. Approval and File Authority Checks through April 6, 2015 Action: Accepted and Filed

3. Receive Report on Monthly Reports to the Authority Board on the Activities of the Public Outreach Consultant and Discussions of Priorities Action: Received

4. Authorize the President/Executive Director to Send a Declaratory Letter to the Santa Cruz County Superior Court in the Matter of the Marina Coast Water District (MCWD) Effort to Obtain a Stop Work/Operation Order on the Test Slant Well Executive Director Cullem reported on the item and explained the purpose of the letter to to provide a fact based declaration to the Court in support of Cal Am proceeding with the pumping of the test slant well and spoke to the benefits that it could afford the process.

Vice President Kampe invited comments from the public.

• Anthony Lombardo reported on the injunction request by the Marina Coast Water District that has been filed to try to stop the test slant wells. He noted that the Judge moved the case to Santa Cruz County for fairness purposes.

• George Riley requested to know what the legal nature of the document will be to which Mr. Freeman noted that it would either be rejected or accepted.

Director Rubio questioned if this creates liability to the Authority to which Freeman indicate that since the document is just a statement of facts it should not create liability for the Authority.

On motion by Director Pendergrass and Seconded by Director Edelen and passed by the following vote the Directors authorized President Burnett to execute the declaration on behalf of the water authority and submit to the Santa Cruz Court in the Matter of the Marina Coast Water District (MCWD) Effort to Obtain a Stop Work/Operation Order on the Test Slant Well



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NOES: 0 DIRECTORS: None ABSENT: 1 DIRECTORS: Burnett ABSTAIN: 0 DIRECTORS: None RECUSED: 0 DIRECTORS: None AGENDA ITEMS

5. Receive Report, Discuss, and Provide Direction with Respect to the Proposed Extension of the State Water Resources Control Board Cease and Desist Order WR 2009-0060 (CDO) Deadline of 31 December 2016 Submitted March 10, 2015 Executive Director Cullem spoke to the return of this item to provide additional opportunity to receive public comment on the draft extension request. The final version will come back to the Authority for final approval prior to submission. He requested that the Authority consider the provided list of concerns from the Coalition of Peninsula businesses, which he detailed. The Board briefly discussed the details of the key princi8ples under discussion and the potential impacts of the Governor’s recent Executive Order.

Director Kampe invited public comment on the item.

• Tom Rowley spoke against the proposal because mandatory water rationing will be difficult with the current structure.

• George Riley spoke in support of possible credits for conservation efforts that the community has already made.

Director Rubio spoke to the concerns of the Coalition speaking in support of their position on items 4 and 6 and requested that Legal Counsel incorporate those points into the draft letter. Director Roberson spoke in support of their position on item 2 regarding who should pay any fines. The Board Discussed the Water Management Districts drafted rationing schedule and the uncertainty of the Governor’s Executive Order impacts. This item was for discussion only and collection of public input.

6. Receive Report, Discuss, and Take Action on the Draft Water Authority Budget for FY 2015-2016 Executive Director Cullem presented the proposed Fiscal Year 2015-16 budget and detailed the financial operations of the last two budget cycles, and anticipated events that will impact expenditures during FY 2015-16. He reported that he anticipates the County of Monterey to be participating financially this year and that a budget request has also been made for next year according to the proposed weighted average distribution provided in the packet. Mr. Cullem answered questions from the Directors.



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Vice President Kampe invited public comment on the item.

• Tom Rowley spoke to the cost effective operations of the Authority, the successes that they have achieved thus far and he believes that the Monterey County needs to participate with the Authority more than just on the Governance Committee.

• George Riley expressed frustration with persistent negative comments made about the Water Management District and indicated their efforts have been invaluable toward ASR, GWR, evaluation of technical support for this agency, and efforts toward securitization.

Director Rubio spoke in support of staff efforts to conserve funding and moved approval of the budget as presented. Vice President Kampe clarified that the budget it is contingent upon the participation by the County of Monterey.

On a motion by Director Rubio, seconded by Director Edelen, and carried by the following vote, the Monterey Peninsula Regional Water Authority approved Water Authority Budget for Fiscal Year 2015-2016 and the associated member contribution rates as presented:

AYES: 4 DIRECTORS: Edelen, Kampe, Pendergrass, Roberson , Rubio NOES: 0 DIRECTORS: None ABSENT: 1 DIRECTORS: Burnett ABSTAIN: 1 DIRECTORS: Roberson RECUSED: 0 DIRECTORS: None

7. Receive Report, Discuss, and Provide Staff Direction on the Status of the Test Slant Well Operation and the Current "Summary" Monterey Peninsula Water Supply Project (MPWSP) Schedule, Approve a "Dashboard" with Five variables and Confirm Slant Well Feasibility Determination By the Authority Will Be Consistent With the Criteria Used By State Regulators (CCC). This item was taken up as the first business item. Rich Svinland, President of Engineering for Cal Am provided a status of the test well operation. He reported that the 5 day pump test is complete and that staff is pleased with the test results and is looking forward to starting the long term testing. He then reported on the dashboard visual to explain the different important factors regarding production, salinity and drawdown and how they are trending over time. From a water quality perspective, they are looking at iron and manganese as they affect the treatment process and how all the factors trend over time.

Mr. Svinland they spoke to the change to the anticipated schedule and indicated that the draft EIR will be released in the coming weeks, followed by public comment review period and finalization. He reported that the cost of the pipelines is still not finalized but will be forthcoming and that no further permits can be obtained until the DEIR is released.



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Vice president Kampe opened the item for public comment

• Nelson Vega questioned the dashboard salinity asking how to know if it is drafting from the Salinas basin to which Mr. Svinland responded explaining the mathematics to determine the barometer. Mr. Vega then asked if the test slant well will be the same size as the production wells. Mr. Svinland reported yes, they need 6 wells of the same size for production and have 2 to 4 standby wells to achieve the sufficient production levels.

Mr. Svinland answered questions from the Directors regarding the dashboard and the preliminary results.

On a motion by Director Rubio seconded by Director Edelen and carried by the following vote, the Monterey Peninsula Regional Water Authority approved the "Dashboard" with Five variables to be tracked as metrics to include a trend line with explanations.

AYES: 5 DIRECTORS: Edelen, Kampe, Pendergrass, Roberson , Rubio NOES: 0 DIRECTORS: None ABSENT: 1 DIRECTORS: Burnett ABSTAIN: 0 DIRECTORS: None RECUSED: 0 DIRECTORS: None

8. Receive Report, Discuss, and Take Action on a Contract to Review the Monterey Peninsula Water Supply Project Draft Environmental Impact Report. Executive Director Cullem reported on the TAC recommendation that an outside consultant be contracted with to conduct an independent review of the Draft EIR with a focus on the legal review. Mr. Cullem indicated he had identified a consultant that can conduct two technical review’s for less than $10,000. Mr. Cullem requested the Director’s discuss the merits of the request since the competitive review process will take too long, if the Authority wishes to pursue it, it must be acted upon expeditiously.

Vice President Kampe invited public comment on the item.

• Nelson Vega spoke in support of expending funds to review the document on an independent basis.

• Tom Rowley spoke in support of an independent review. Thinks that it could prevent further failed desal projects.

The Director’s discussed which organizations would be conducting reviews of the two EIR documents and to the difference between a legal and a technical review of the document. They discussed the public’s perception and debated the need for an independent analysis

Director Roberson indicated that all of the participating agencies should be reviewing the document and suggested assigning different sections to the different agencies that could be used collaboratively. To which the Board agreed the different agencies will look at it from different perspectives as they all have different needs.



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Legal Counsel Freeman spoke to the settling parties that will be conducting a review and will submit comments and he believes the technical portions will be covered appropriately.

Mayor Edelen moved that the Authority not take action to hire a consultant.

The Directors spoke to the efforts of the settling parties and the need and ability to get a truly independent review. There was not a strong sentiment to take action and the Directors agreed to revisit if more definitive request is made for specific expertise and a specific consultant is identified that can assist.

9. Receive Report, Discuss, and Take Action on authorizing a letter of support to be drafted and sent to the State Water Resources Control Board regarding new water conservation requirements Executive Director Cull spoke to the emergency item with the need to provide comments to the State Water Resources Control Board responding to pending regulations to implement mandatory water use reductions. He outlined 6 different points with related to items that would be helpful to bring up in the letter Comments are due to the SWRCB by April 13, 2015, which is why it had to be an urgency item. Mr. Cullem answered questions from the Directors. Vice President Kampe invited comments from the public. George Riley and Tom Rowley spoke in support of the points made and in support of sending the letter.

Director Rubio requested to be specific in point 1A that it is 55 gallons per day per person, so that it is not mistaken as per household. Director Roberson spoke in support of the points outlined in the staff report.

On motion by Director Kampe and seconded by Director Roberson and passed by the following vote the Authority authorized President Burnett to write and submit a letter to the State Water Resources Control board, Based on the outlined 6 points provided in the Staff Report.


NOES: 0 DIRECTORS: None ABSENT: 1 DIRECTORS: Burnett ABSTAIN: 0 DIRECTORS: None RECUSED: 0 DIRECTORS: None

ADJOURNMENT

Having no further business, the meeting was adjourned at 9:09 PM

ATTEST:

Lesley Milton-Rerig, Clerk of the Authority Bill Kampe, MPRWA Vice President

Monterey Peninsula Regional Water Authority Agenda Report

Date: May 14, 2015

Item No: 2.

FROM: Authority Clerk Milton

SUBJECT: Approval and File Authority Checks through May 14, 2015

RECOMMENDATION:

It is recommended that the Authority approve and file the accounts payable payments made during the period April 7, 2015 through May 8, 2015 with total payments for the above referenced period of $7,672.00 from the general fund account and authorize the Directors to sign for such checks.

DISCUSSION:

At its meeting on September 12, 2013, the Authority Board approved a staff recommendation to provide the Directors a listing of financial obligations since the last report for inspection and confirmation. Each invoiced expense has been reviewed and approved by the Executive Director and Finance personnel prior to payment to insure that it conforms to the approved budget.

The following checks are hereby submitted to the Authority for inspection and confirmation.

• $6,672.00 to Brownstein Hyatt Farber and Schreck for Special Legal Counsel Services.

• $ 550.00 to Environmental Relations for Public Outreach services

• $ 450.00 to Access Monterey Peninsula

The bank balance as of May 8, 2015 is sufficient cover the above check therefore, staff is recommending approval.

ATTACHMENTS:

• Budget to Actual Report through May 8, 2015

MPRWA Meeting, 5/14/2015 , Item No. 2., Item Page 1, Packet Page 1


Date: May 14, 2015

Item No: 3.

№06/12

FROM: Executive Director Cullem SUBJECT: Receive Staff Report on a Possible Visit on May 29, 2015 by State Water Resources Control Board Member Tam Doduc, P.E., and Possibly Others

RECOMMENDATION: It is recommended that the Water Authority Board receive a written report on a possible visit by State Water Resources Board (SWRCB) member Tam Doduc,P.E, and possibly others, to the Monterey Peninsula on May 29, 2015. DISCUSSION: Attached is a letter from Jason Burnett, on behalf of the Water Authority as well as the Water Management District and the County, inviting one or more of the SWRCB members to visit Monterey and receive briefings and tours of the efforts and accomplishments of our community in meeting the objectives of CDO 2009-0060. Board Director Tam Doduc, P.E. can visit on May 29 and that date is tentatively set as of now. Unfortunately, both Jason Burnett and Jim Cullem will be out of town on the 29th. Authority Vice-President Kampe will serve as the Authority representative but any Authority member interested is welcome to participate to the extent allowed by the Brown Act. Our Public Outreach Consultant, Ashley Beleny, Environmental Relations, Inc., is available to assist VP Kampe with preparations and/or conduct of the visit. FISCAL IMPACTS: Sufficient funds remain in our Public Outreach budget to support this effort if requested. ATTACHMENTS: A- Burnett letter to Felicia Marcus dated May 5, 2015.


580 PACIFIC ST, ROOM 6 ∙ MONTEREY ∙ CALIFORNIA ∙ 93940 ∙ www.mprwa.org∙

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

May 5, 2015

Chair Felicia Marcus

State Water Resources Control Board

P.O. Box 100

1001 I Street, Suite 25-60

Sacramento, CA. 95812

Directors:

Jason Burnett, President

Bill Kampe, Vice President

David Pendergrass, Secretary

Jerry Edelen, Treasurer

Ralph Rubio, Director

Clyde Roberson, Director

Executive Director:

Jim Cullem, P.E.

RE: Invitation for a site visit to the Monterey Peninsula Water Supply Project and conservation activities

Dear Chair Marcus:

To follow up on our earlier conversation, the Monterey Peninsula Regional Water Authority (MPRWA)

the Monterey Peninsula Water Management District (MPWMD) and the County of Monterey, the three

public agencies that comprise the Governance Committee of the Monterey Peninsula Water Supply

Project (MPWSP) project, would like to invite you and, if possible, the full State Water Resources Control

Board (SWRCB) to a site visit of the Monterey Peninsula to see and discuss the progress we have been

making on a new sustainable portfolio of water supplies and eliminating the illegal pumping from the

Carmel River.

We believe we are pursing desalination in the proper context and consistent with the draft SWRCB Ocean

Plan. Specifically, we have focused on water conservation first, reducing per capita water consumption to

less than 55 gallons per person per day or approximately one third of the state average. Our overall

portfolio of water projects is sized primarily to enable California American Water (CalAm) to eliminate

its illegal pumping from the Carmel River, comply with the adjudicated reductions in pumping from the

overdrafted Seaside aquifer. The MPWSP only provides additional water for lots of record, not full

general plan build out. We may be able to reduce the size of the desalination component of the portfolio

still further by including our proposed groundwater recycling plant (GWR) and other smaller projects. We

are working to reduce or eliminate the environmental impacts of this smaller desalination plant in several

ways. First, we are pursuing subsurface intake. Second, we have sited the plant next to a landfill to allow

for the purchase of “green” landfill gas electricity. Finally, we are prepared to take the necessary steps to

ensure brine disposal is handled properly. As the drought causes many other communities to consider

desalination, we would encourage you to look to our project as an example of how desalination can be

pursued in a responsible manner.

The SWRCB issued the Cease and Desist Order (CDO) 2009-0060 in order to focus the community and

CalAm on bringing online a new sustainable portfolio of water supplies and eliminating the illegal

pumping from the Carmel River. The CDO is serving its purpose. Working with the company, the

community is now making substantial progress towards bringing online a portfolio of new water supplies.


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In particular:

While water debates on the Monterey Peninsula have historically been fraught with acrimony,

discord and inaction, in the past several years we have worked hard to bring a sustained focus to

solving the problem informed by good data and science. The six cities of the Monterey Peninsula

comprising the MPRWA, the MPWMD, and the County of Monterey are all supporting efforts to

advance the MPWSP. The three public agencies and CalAm formed a “Governance Committee”

to formalize community input concerning essential aspects of the MPWSP.

We further achieved broad consensus in the form of a comprehensive settlement agreement

concerning CalAm’s California Public Utility Commission application for the MPWSP, which

was signed by sixteen (16) diverse parties including environmental groups, marine groups,

farming groups, the business community, community groups, ratepayer groups, and CalAm.1

The settlement agreement allowed for a novel financing mechanism that will save ratepayer

money. This required special legislation that was signed into law last fall.

The settlement agreement also called for the creation of a Hydrogeologist Working Group

(HWG) that would, among other things, help plan a test slant well and assess the results of the

tests. The HWG requested and the Monterey Peninsula community supported the permitting of

boreholes to inform the design of the test slant well. CalAm completed that design with input

from the HWG and the community supported the permitting of the test slant well. The California

Coastal Commission issued a permit for the test slant well and we appreciate the SWRCB’s

submission of a letter to the Coastal Commission noting the importance of moving this project

forward and subsequent submission of declarations to the courts reviewing the Coastal

Commission’s decision.

Construction of the test slant well was completed earlier this year and the well underwent initial

commissioning followed by a 5-day short-term test. The initial results and an assessment can be

found online at http://www.watersupplyproject.org/testwellmonitoring. The HWG has reviewed

and approved this assessment and authorized the long-term pump testing. This longer-term test

started April 22nd and is underway. CalAm reports the initial test well results are encouraging.

On April 22nd the Pure Water Monterey Groundwater Replenishment Project consortium issued

the draft Environmental Impact Report (DEIR) for the GWR project, which advances various

state policy goals. The project would provide 3,500 acre feet per year (afy) of treated recycled

water for groundwater storage in the Seaside Basin and recovery for indirect potable reuse while

improving water quality problems in the Salinas Valley. The GWR project would allow for a

comparable reduction in the size of the desalination project with associated reductions in

environmental impacts. However, the project may not be cost-competitive without grant funds or

other financial assistance and we have engaged with the SWRCB and others to help fill this

funding gap.

On April 30th the California Public Utility Commission (CPUC) issued the DEIR for the full

MPWSP.

Pipeline procurement for the overall project is underway, and the public Governance Committee

expects to authorize the release of a Request for Proposal (RFP) for this important project

element this summer.

San Clemente Dam removal will re-commence this month. This project is impressive enough in

its own right that a field trip to the dam site is also recommended.

1 See http://www.mprwa.org/wp-content/uploads/2012/03/2013_07_31-A12-04-019-Large-Settlement-PDFA.pdf


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A visit would allow us to demonstrate to you and your board the community's continued progress on our

portfolio of water supply projects. Monterey County officials have also indicated that they would

appreciate an opportunity to outline their progress on various water management activities during a

SWRCB visit.

I hope that you and some or all of your colleagues are able to accept our invitation for a visit to the

Monterey Peninsula. The ideal timing for a visit would be June, July or August but we would of course

welcome you anytime your schedule permits. Should you have any questions or wish to discuss

arrangements for a visit, please feel free to contact me at [email protected], or by phone

831.238.0009 (cell).

Sincerely,

Jason Burnett, President

Monterey Peninsula Regional Water Authority

CC:

Frances Spivy-Weber, Vice Chair SWRCB

Dorene D’Adamo, Board Member SRWCB

Steven Moore, Board Member, SWRCB

Tam Dudoc, Board Member, SWRCB

Barbara Evoy, Deputy Director, SWRCB

David Stoldt, General Manager - Monterey Peninsula Water Management District

David Potter, Supervisor, County of Monterey

Simon Salinas, Supervisor, County of Monterey

Lew Buaman, County Administrative Officer, County of Monterey

Ralph Rubio, Authority Director/Mayor, City of Seaside

Jerry Edelen, Authority Director/Mayor of City of Del Rey Oaks

David Pendergrass, Authority Director/Mayor of City of Sand City

Bill Kampe, Authority Director/Mayor of City of Pacific Grove

Jim Cullem, Executive Director, Monterey Peninsula Regional Water Authority

Rob MacLean, President, California American Water



Date: May 14, 2015

Item No: 4.

№06/12

FROM: Executive Director Cullem SUBJECT: Receive Report, Discuss, and Provide Staff Direction on the California State Mandatory Conservation Requirements RECOMMENDATION: It is recommended that the Water Authority receive a briefing from MPWMD General Manager Dave Stoldt on the status of the California State Mandatory Conservation Regulations and its impact on Peninsula water users, discuss, and provide direction to staff as appropriate. DISCUSSION: In accordance with Governor Brown's Executive Order mandating cuts in residential water use statewide, the State Water Resources Control Board (SWRCB) staff prepared regulations implementing the Order. Input from water management districts, including the Monterey Peninsula Water Management District (MPWMD), was solicited in April 2015 and the MPWMD position was supported by a letter from the Water Authority (see attachment A). At its meeting of May 5 2015, the SWRCB adopted the regulations, and Dave Stoldt can provide information as to how these regulations will affect Peninsula water users. ATTACHMENT: A- MPRWA Letter to the SWRCB dated April 13, 2015.


580 PACIFIC ST, ROOM 6 · MONTEREY · CALIFORNIA · 93940 · www.mprwa.org·

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

April 13, 2015 Jessica Bean California State Water Resources Board 1001 I Street Sacramento, CA 95814-2828

Directors:

Jason Burnett, President Bill Kampe, Vice President

David Pendergrass, Secretary Jerry Edelen, Treasurer Ralph Rubio, Director

Clyde Roberson, Director

Executive Director: Jim Cullem, P.E.

RE: Mandatory Conservation Proposed Regulatory Framework Dear Ms. Bean: The Monterey Peninsula Regional Water Authority (MPRWA) urges you to make several modifications to the statewide mandatory conservation proposed regulatory framework (framework) before it is finalized. Our proposed modifications to the framework will strengthen the approach by building off of and extending the current structure. The MPRWA includes the six cities on the Monterey Peninsula: Carmel-by-the-Sea, Del Rey Oaks, Monterey, Pacific Grove, Sand City and Seaside and offers these comments based on the extensive experience that our six communities have with water conservation over many years. The Monterey Peninsula has been focused on water conservation for many years and has greatly reduced potable water use. This reduction took place, in part, because State Water Resources Control Board (SWRCB) Cease and Desist Order 2009-0060 (CDO) mandated that our water provider, California American Water (Cal Am), reduce pumping from our primary water source, the Carmel River. In addition, Cal Am is subject to adjudicated reductions in extractions from the Seaside Basin. As a result of years of sustained conservation efforts, the community now has one of the lowest rates of residential per-capita water use in California.

Accordingly, the MPRWA requests that the SWRCB recognize the water conservation accomplishments of the Monterey Peninsula as the Board implements the State's new mandatory water use reductions, and the Authority strongly supports the "Comments/Ideas on the Draft Regulatory Framework" as articulated by the Monterey Peninsula Water Management District in its letter dated April 13, 2015. The Monterey Peninsula has a steeply tiered residential rate structure in order to promote conservation. The price per gallon of water in our highest tier is fifteen (15) times greater than the price per gallon of water in our lowest tier. Although this steeply graduated pricing system has created some issues with excessively large water bills, it has achieved its goal of causing many of our largest water users to cut back. In five years the consumption in the highest pricing tier has fallen by more than half and continues to decline as our residents respond to the strong price signals. Based on our


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research, we believe our tiered structure is among the most aggressive of any in the state and we would encourage the SWRCB to study the strong performance of our approach as other communities adopt conservation pricing systems. We have found that pricing systems avoid issues of incomplete compliance and enforcement challenges often found with prohibitions of certain activities such as outdoor watering. We support the April 1, 2015 Executive Order’s direction that water suppliers with service areas that experience relatively larger per capita consumption of water should be required to conserve more than 25% and those communities that have already made substantial gains in water conservation should be required to conserve less than 25%. We do, however, believe the schedule apportioning water supplier reductions should be modified in several ways:

- The current schedule offers four categories of suppliers for residential per capita water use (R-GPCD) of under 55, 55-110, 110-165, and over 165. Having only four categories means that each category is very large and does not adequately differentiate between communities' conservation performance within a category. For example, in the second category (55-110), a community with 55 R-GPCD is treated the same as a community with double the per capita consumption of 110 R-GPCD even though a community with 55 G-GPCD has already achieved much more water conservation. This does not appear to meet the Governor’s direction to have areas with higher consumption achieve proportionally greater reductions. One simple fix to this problem is to have more than four categories. Having a dozen or so categories of R-GPCD would give the SWRCB a much greater ability to comply with the Executive Order and to recognize and reward those communities which have already engaged in substantial water conservation.

- The schedule does not fully recognize the limits of water conservation and the diminishing returns to investments in water conservation. The 10% reduction for communities with under 55 R-GPCD is a lower numeric reduction but, because of diminishing returns in communities where all of the easy water conservation investments are already in place, may in fact require a greater investment and/or greater sacrifice than the larger percent reduction for communities with greater September 2014 R-GPCD. The Monterey Peninsula’s experience with water conservation suggest that the notion of diminishing returns to water conservation is very real after all of the “low hanging fruit” has been picked. The 20% reduction in the “55-110” R-GPCD category may actually be easier to achieve for certain communities (those close to the high end of the range) than the 10% reduction required of the “under 55” R-GPCD. Such a scenario should be avoided because it is unfair and inconsistent with the notion of asking more of those communities that have done less to date. One solution to this problem would be to allocate 55 gallons per day per resident as the minimum indoor allotment and then have a schedule of reductions required for any consumption over this 55 R-GPCD allotment. Such a system would recognize the need for some indoor water use and would explicitly focus reductions on unnecessary indoor use and all outdoor use.

- Finally, we note the inequity in allowing communities that have historically used more water to continue to do so simply because they have established a large historic baseline. Using historic water consumption to establish a baseline against which reductions will be measured implicitly rewards greater historic water use. For example, a community that used 200 R-GPCD in 2014 will now be allowed 130 R-GPCD in 2015 or a full two and a half times what the Monterey Peninsula will be allowed under the proposed framework. We are willing to ask our communities to do our part but it is hard to explain why others are allowed 2.5 times as much as we are.

Finally, we would note that the reasons for the Monterey Peninsula is so focused on water conservation are somewhat different than those of other parts of the state. For us, the need to engage in water conservation will not end with the first above average rainy season. Our focus will remain at least until we have new, sustainable water supply projects online. We are not connected in any way to the State’s water system and our rationing triggers are based on actual water demand relative to water levels in the Carmel River, not elsewhere in the state. Fortunately those triggers have not been reached. We therefore believe it most appropriate for the Monterey Peninsula to remain focused on


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multi-year water conservation efforts consistent with the unique water situation we have rather than be asked to seek shorter-term water conservation efforts.

In summary, the position of the MPRWA is that any mandated cuts to the Monterey Peninsula, in light of past conservation efforts and our current low residential per-capita water use, should result in mandatory cuts well below 10 percent. Thank you for consideration of our comments, and should the Board or staff have any questions, please do not hesitate to contact me at [email protected] or 831-238-0009, or our Executive Director, Jim Cullem, at [email protected] or 831-241-8503. Sincerely,

Jason Burnett, President Monterey Peninsula Regional Water Authority C: David Stoldt, General Manager Monterey Peninsula Water Management District



Date: May 14, 2015

Item No: 5.

№06/12

FROM: Executive Director Cullem

SUBJECT: Consider a Downward Revision to the Adopted Fiscal Year 15-16 Budget (from $390,000 to $290,000), Including Changes/Deletions to Contract Services in Response to Fiscal Concerns of the County Supervisors, and Approval of Related Budget Resolution 2015-XX.

RECOMMENDATION:

It is recommended that the Authority Board consider a downward revision to the adopted FY 15-16 Budget (from $390,000 to $290,000), including changes/deletions to contract services, in response to the fiscal concerns of the County Supervisors, and consider approval of related budget Resolution 2015-XX.

DISCUSSION:

At a meeting on May 4, the County committed to paying the balance of its $153,000 FY 14-15 fair-share which will allow us to reimburse the cities for contributions they made to cover the County's fair-share earlier this year. These overpayments will be returned as credit towards FY 15-16 contributions.

As discussed at previous meetings, the slowdown in the CPUC Environmental and approval process and reduction in anticipated expenses in working with the CPUC and the SWRCB, as well as efforts to limit general expenses to the maximum extent possible, should result in a year-end budget savings in the order of $100,000 out of a total FY 14-15 budget of $458,680. All jurisdictions will receive a fair-share credit of this savings to be determined following the annual audit.

This represents the second year in a row that we have finished with a budget surplus of $100,000 or more. Accordingly, and in anticipation of savings continuing into the new year, the Authority approved a reduced budget of $390,000 for FY 15-16 at its meeting of April 9, 2015.

However, County representatives have requested the new budget be further reduced, especially for expenses related to contract services, and have suggested Authority members utilize in-house staff to provide those services where possible.


By eliminating the Public Outreach Contract ($10,000) and Contract Services & Studies ($30,000), reducing the Contingency by $10,000, and reducing Legal Services by $50,000, the FY 15-16 budget could be reduced to $ 290,000.

Since the amended budget for FY 15-16 is bare bones with little room for unanticipated expenses, the Authority staff may have to request supplemental contributions throughout the year if required services cannot be provided by City or County in-house staffs.

The County also questioned if a sunset date for the Authority has been set as of yet. Possibilities range from a reduction of effort/elimination shortly after issuance of the CPCN to as long as it takes for the MPWSP to provide its first drop of water. Since this issue is of interest to the Cities as well as the County, staff will return the issue to the Board for full discussion later this year.

FISCAL IMPACT:

At attachment A is a draft Amended Budget for FY 15-16 reflecting a reduction to $290,000. At attachment B are estimated fair-share member contributions under the amended budget, including the return of overpayments from FY 14-15.

ATTACHMENTS:

A- Draft Amended Budget for FY 2015-2016 B- FY 2015-2016 Estimated Fair-Share Contributions


ATTACHMENT A- DRAFT AMENDED BUDGET for FY 2015-2016

EST. OPERATING REVENUES

Membership Contributions ( 6 Cities + County) 137,000

Overpayment credit for FY 14-15 (6 Cities) 153,000

EST. TOTAL OPERATING REVENUES $ 290,000

EST. OPERATING EXPENSES

Administration and Clerical Services

Principal Office of Authority (Monterey) 5,000

Clerk of Board (Seaside) 24,000

Financial Services (Seaside) 6,000

Executive Director (Monterey) 85,000

Miscel Admin Expenses 500

Legal Services

Board Counsel (Freeman) 36,000

Special Counsel (Brownstein) 100,000

Contract Services

Public Outreach 0

Audit Services (Kaufman) 6,000

Televised Meetings (AMP) 5,000

Contract Services and Studies 0

Insurance 7,500

Travel Expenses 5,000

Contingency 10,000

EST. TOTAL OPERATING EXPENSES $ 290,000


ATTACHMENT B

Estimated Jurisdiction Contribution Assuming County ParticipationContributions With County Participation FY 2015-2016

Member Jurisdiction

New FY 15-16 Percent Distribution *

Estimated Contributions before credits

Credit for Over-payment from FY 14-15

Est Adjusted Contributions Request **

County of Monterey 30.40% $88,160 $0 $88,160Carmel By the Sea 6.50% $18,850 $14,229 $4,621Sand City 0.80% $2,320 $1,989 $331City of Pacific Grove 13.10% $37,990 $28,764 $9,226City of Seaside 14.80% $42,920 $33,660 $9,260City of Monterey 33.00% $95,700 $71,145 $24,555City of Del Rey Oaks 1.40% $4,060 $3,213 $847

Total Income/Budget 100% $290,000 $153,000 $137,000

* Computed from water years 2012-2014** Year-end budget surplus (to be determined) would further reduce contributions in FY 15-16

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Date: May 14, 2015

Item No: 6.

№06/12

FROM: Executive Director Cullem SUBJECT: Reconsider No-cost or Low Cost Options to Conduct a Focused Review of the MPWSP DEIR. RECOMMENDATION: It is recommended that the Water Authority reconsider the TAC's specific and detailed recommendations to the Water Authority for a qualified professional review of key elements of the CPUC Draft Environmental Impact Report (DEIR) for Cal Am's Monterey Peninsula Water Supply Project (MPWSP). DISCUSSION: On May 4, 2015, the TAC voted to recommend to the Water Authority that it approve a focused review of the MPWSP DEIR, conducted by contract or by member agency in-house staff, since the Authority Board had voted not to fund a complete review of the DEIR at its meeting of April 9, 2015. Accordingly, the TAC requested a focus on technical issues that might be vulnerable to legal challenge. Staff suggests that since intake technologies and brine discharge are identified in the DEIR, section ES.8, as issues to be resolved and areas of controversy, they might be ideal candidates for a focused review. Given that the Authority would like to avoid spending on a review that duplicates the efforts of others, as well as offers by member agencies to perform as much analysis as possible by in-house staff resources, the Executive Director has asked the County for assistance on the two issues identified above.


Staff has also contacted several firms capable of performing a focused DEIR review and can update the Authority on capabilities, costs, and availability in the event member agency in-house resources are unable to perform the work. FISCAL IMPACT: There is approximately $40,000 available in the FY 14-15 budget for contract services, including a focused review of the DEIR.



Date: May 14, 2015

Item No: 7.

№06/12

FROM: Executive Director Cullem SUBJECT: Receive Report, Discuss, and Provide Staff Direction on The "Summary"

Monterey Peninsula Water Supply Project Schedule and of Slant Test Well operations and Results.

RECOMMENDATION: It is recommended that the Water Authority Board receive a report from Cal Am on the latest update on the summary MPWSP schedule, including an update of the "Dashboard", and a report on the performance of and data from the test slant well. DISCUSSION: Cal Am will provide an update at the Water Authority meeting. ATTACHMENTS: A-Current Cal Am "Summary" Schedule for Permits and Approvals



Date: May 14, 2015

Item No: 8.

№06/12

FROM: Executive Director Cullem SUBJECT: Receive Report, Discuss, and Provide Direction with Respect to

the Proposed Extension of the State Water Resources Control Board Cease and Desist Order WR 2009-0060 (CDO) Deadline of 31 December 2016.

RECOMMENDATION: It is recommended that the Water Authority Board receive an update on efforts by the settling parties, including California American Water Co. (Cal Am), the Monterey Peninsula Water Management District (MPWMD), and the Monterey Peninsula Regional Water Authority (MPRWA) to obtain an extension of the CDO 2009-60 deadline date of December 31, 2016. DISCUSSION: The Cal Am Mar 10, 2015 version of a Preliminary Draft Proposal for a CDO extension is available at the Authority web site www.mprwa.org. As of May 1, 2015, neither Cal Am nor other members of the settling parties have received a response to that proposal. Key principles included in the March 10 proposal include:

• A four-year extension of the CDO deadline from December 31, 2016 to December 31, 2020.

• A new reduction schedule in regular increments during the extension, but suspension of the prescribed reductions if MPWSP milestones are satisfied.


• Authority for the SWRCB staff to suspend a reduction corresponding to a missed milestone if staff determines that the milestone was missed due to circumstances beyond the control of Cal-Am, MPWMD, and the Water Authority.

• Suspension of the reduction would be triggered by a joint written statement from Cal Am, the MPWMD, and the MPRWA that the milestone was missed for reasons outside our control. It is our position that such a statement is to be assumed to be correct, and if the SWRCB staff disagrees, the issue would be referred to the State Board for a decision. In any case, the community retains its rights to litigate the issue if necessary.

The Authority will continue to report regularly on progress in helping Cal Am obtain the extension, and to gather public input before the Authority takes a formal position on a final draft proposal. ATTACHMENTS: None


MPRWA Agenda Packet 05-14-15

Documents