ITEM: VII ACTION ITEMS

MEETING DATE: JANUARY 23, 1997

C. DIRECT STAFF ON PREPARATION OF AN ORDINANCE TO ALLOCATE WATER FOR THE PLANNED EXPANSION OF THE COMMUNITY HOSPITAL OF THE MONTEREY PENINSULA

SUMMARY: The City of Monterey and the Community Hospital of the Monterey Peninsula have asked that the Board consider allocating 16 acre-feet of water for the planned expansion and upgrading of the Community Hospital (Exhibits C-1 and C-2, respectively). Both the City and the Community Hospital have asked that the water allocation come from a "special community reserve". At present, no special community reserve exists to serve this request. The District Reserve Allocation, which was created in June 1993 to provide water for "special projects of regional benefit" was abolished in February 1995 at the request of the Technical Advisory Committee (TAC). At that time, the remainder of the District Reserve Allocation (34.7 acre-feet) was distributed equally among the eight jurisdictions by the adoption of Ordinance No. 73.

In order to consider the allocation requested by the City of Monterey and the Community Hospital, the Board must create a new allocation. This allocation must be authorized by District Ordinance and in compliance with the California Environmental Quality Act (CEQA) guidelines.

The Community Hospital expansion project has been approved by the Monterey City Planning Commission and is scheduled to be heard by the Monterey City Council on January 21, 1997. At that time, the City Council will consider certifying the Environmental Impact Report (EIR) that was prepared for the expansion project.

RECOMMENDATION: Following introductory remarks by District staff and representatives from the City of Monterey and Community Hospital, the Board should receive public comment, close the Public Hearing, and discuss the requested allocation and actions required. Specifically, the Board should decide whether or not to direct staff to prepare an ordinance authorizing the creation of a specific allocation for the Community Hospital or a District reserve allocation for regional projects from which the Community Hospital could be served. If the Board decides to create the allocation, staff should also be directed to conduct the necessary Initial Study to comply with CEQA quidelines.

The Initial Study is required to analyze the environmental impacts associated with creating the allocation and should be circulated for public comment for 30 days. Once the comment period is closed, District staff will review the comments, prepare responses, and present the Initial Study to the Board for their approval. If the Initial Study determines that creation of the requested allocation will not have a significant effect on the environment, then a negative declaration or a mitigated negative declaration will be prepared and the first reading of the ordinance could occur at the March 17, 1997 Board meeting. The second reading and adoption of the ordinance would occur at the April 21, 1997 meeting.

If the Initial Study determines that creation of the requested allocation may have a significant effect on the environment, then an environmental impact report is required which would delay the first reading of the ordinance. In either case, a Public Hearing would be scheduled for the February 27, 1997 Board meeting to receive public comment on the Initial Study.

The Board should also discuss and decide which source of water will be used to serve the Community Hospital. The selection of a water source for the allocation is important because it will determine how the environmental effects in the Initial Study are analyzed. In the letter from the City of Monterey, it is suggested that the allocation could come from the "Pebble Beach Reclamation Project or some other source". Other sources of water that could be considered include water previously set aside by the District for drought protection and water conservation. These sources are described in Action Item VIID.

It should be noted that, if the "POWR" initiative (Measure A) is approved by District voters on March 4, 1997, then the District would be prohibited from allocating any water until the declared water shortage is ended. This prohibition would prevent the District from creating a community reserve allocation to serve the Community Hospital at this time. In this regard, the Board may choose to delay action on conducting the Initial Study and preparing the ordinance until after the vote on Measure A is known.

BACKGROUND: The planned expansion and upgrade of the Community Hospital will increase annual demand at the existing facility by approximately 18 acre-feet of water. The project will expand services in the areas of cancer, heart, and stroke patient care and upgrade facilities to current standards and technologies in terms of intensive care, emergency services, and surgery. As proposed, the expansion project will consist of two phases. The first phase involves construction of a Community Cancer Center which is scheduled to begin in summer 1997 and end in November 1998. The projected water demand for the first phase is 3.4 acre-feet per year. The second phase involves construction of an Acute Care Pavilion which is scheduled to begin in January 1998 and end in January 2001. The projected water demand for the second phase is 14.9 acre-feet per year.

The City of Monterey has indicated that it would provide the additional two acre-feet of water needed for the expansion. The projected demand may be reduced by various water-saving projects currently being undertaken at the Community Hospital. District staff is in the process of quantifying the water credits that may be available to the Community Hospital from various retrofit projects, i.e., California Department of Forestry (CDF) Fire Station Demolition, Koi Pond Upgrade, Walk-in Cooler Retrofit, and Cooling Tower Retrofit.

It should be noted that a special community reserve allocation of 16 acre-feet of water had been set aside exclusively for the Community Hospital expansion project in August 1996 when the District Board adopted Ordinance No. 84. As proposed, Ordinance No. 84 would have allocated 16.75 acre-feet to each of the eight jurisdictions within the District and 16 acre-feet for the Community Hospital expansion project. The source of the proposed allocation was a portion of the District's share of the water saved by operation of the CAWD/PBCSD Wastewater Reclamation Project. Creation of this special community reserve allocation was supported by all member jurisdictions within the District. Ordinance No. 84 was, however, rescinded by the District Board in December 1996 due to the need for a comprehensive review of the District's Water Allocation Program assumptions, performance of the CAWD/PBCSD Wastewater Reclamation Project, and pending litigation on the ordinance.

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