##### ITEM:PUBLIC HEARING

18.       CONSIDER REQUEST FOR CONSIDERATION OF SPECIAL CIRCUMSTANCES, RULE 24-G, COMMUNITY HOSPITAL OF THE MONTEREY PENINSULA

### Meeting Date:           July 21, 2003                          Budgeted: N/A

Program/Line Item No.:  N/A

Staff Contact: Stephanie Pintar                     Cost Estimate: N/A

General Counsel Approval: Counsel reviewed the Conditions of Approval.

Committee Recommendation: The Water Demand Committee reviewed this item at its June 19, 2003 meeting.  The Committee supports the staff recommendation.

### CEQA Compliance: N/A

SUMMARY:  At the May 29, 2003 meeting, the Board reviewed Ordinance No. 87, an ordinance of the District that established an 18.28 acre-foot water allocation for CHOMP (Community Hospital of the Monterey Peninsula) from the District’s water conservation savings.  In affirming the continuation of the ordinance, the Board unanimously took the following actions:

1.      Ordinance No. 87 remains in place as adopted;

2.      The community reserve allocation created by Ordinance No. 87  (originally 18.28 AF) remains available for acute care uses on APN 008-132-011;

3.      Water Use Credits documented on the site may be used to offset new uses;

4.      Future Water Use Credit applications will be reviewed by staff;

5.      Review monitoring conditions related to a water consumption cap that have been imposed on other projects in the past;

6.      Incorporate monitoring conditions on the CHOMP project that allow for regular review by the Board.

CHOMP must obtain a water permit for two large projects that are scheduled for construction during Summer 2003, the South Pavilion and the Forest Pavilion (hereafter referred to as the Pavilions Project).  The District does not have a water use factor for hospital uses and has been working with CHOMP to determine the best method to estimate CHOMP’s future water needs so that a water permit can be issued for the project.  District Rule 23 requires CHOMP to obtain a water permit for the Pavilions Project prior to the commencement of construction.

At the May 16, 2003 Water Demand Committee meeting, the committee discussed a number of alternatives to estimate water demand for the Pavilions Project.  As a number of unknown factors enter into the establishment of any factor, no single alternative considered offered a definitive mechanism to estimate CHOMP’s future water demand.  The question of how to calculate CHOMP’s potential water use was again discussed at the June 19, 2003 Water Demand Committee meeting.  The outcome of that meeting is a new approach that is recommended for the CHOMP Pavilions Project.

The new approach to resolve CHOMP’s water issues takes into consideration the action by the Board at its May 29, 2003 meeting.  As CHOMP is clearly a unique water user in the community, and as there is substantial uncertainty regarding the future water use at CHOMP following completion of the Pavilions Project, staff is recommending that Special Circumstances (District Rule 24-G) apply to this project.  In keeping with the action by the Board on May 29 the following method is proposed to permit the Pavilions Project:

1.      CHOMP may access the community benefit reserve allocation created by Ordinance No. 87 (e.g. 18.28 AF).

2.      CHOMP’s existing water use capacity is 101 AF based on the single highest water consumption year in the past ten years (1995).  Water consumption data provided by Cal-Am is attached as Exhibit 18-A.

3.      The combination of the community benefit reserve for CHOMP (18.28 AF) and the historic water use capacity (101 AF) results in a total hospital water use limit for CHOMP (e.g. the “water consumption cap” referred to in the Board action taken on May 29, 2003) of 119.28 AF.

4.      The hospital water use limit will be the maximum allowed water use for CHOMP.

5.      CHOMP must maintain its water use within the hospital water use limit.

6.      CHOMP must agree to a deed restriction listing the conditions of the hospital water use limit.  During the Board action of May 29, 2003, staff was directed to review monitoring conditions required by previous Board approvals.  Staff used the Final Conditions for Forest Hill Manor and notes from the June 19, 2003 Water Demand Committee discussion as the basis to draft the Conditions of Approval attached as Exhibit 18-B.

7.      CHOMP must commit to an annual monitoring program by the District.  The Water Demand Committee recommended that the monitoring occur for a period of thirty years from the date of Board action.

8.      Any water use above the hospital water use limit requires immediate action.  The actions to be taken are spelled out in the proposed Conditions of Approval.

9.      The hospital water use limit is restricted to hospital-related uses on Assessor’s Parcel Number: 008-132-011.  Hospital-related uses include the hospital cafeteria and food service, offices, gift shop, etc.  The term “hospital-related uses” is broader than the term “acute care uses” that was used during the May 29, 2003 Board meeting.  This change in terms is in response to concerns expressed by CHOMP at the June 19, 2003 Water Demand Committee meeting that “acute care” was overly limiting.

10.  Any project that does not fall into the parameters discussed above will require further consideration and approval of the District’s Board of Directors.

The recommendation to proceed with the permitting of the Pavilions Project using the methodology described above is an attempt to resolve the many questions related to CHOMP in a fair, timely and prudent manner.  Permitting the Pavilions Project using the proposed method (as allowed by Rule 24-G) satisfies the following issues:

1.      The District does not have a water use factor for hospital uses and a review of potential factors has not resulted in an acceptable factor.

2.      Staff does not have the expertise with the technology used in a hospital to be able to assess water savings associated with retrofits, and the proposed methodology will eliminate the District’s need to quantify the water savings: The water savings achieved by CHOMP will contribute to its ability to remain within its hospital water use limit.

3.      The water use associated with the former CDF fire station is included in the hospital water use limit, eliminating the need to assess what current CHOMP uses are served by the former CDF water meter.

4.      CHOMP’s projected maximum water needs are 118.93 AF (Axiom Engineers, October 14, 2002).  The proposed hospital water use limit is 119.28 AF.

RECOMMENDATION:  Staff recommends the Board of Directors finds (a) that special circumstances exist for CHOMP, and (b) that substantial uncertainty exists regarding the projected water use proposed by CHOMP.  By agreeing to these findings, District Rule 24-G allows the Board to approve a permit subject to conditions.  The text of Rule 24-G is attached as Exhibit 18-C.  Staff has proposed the draft Conditions of Approval (Exhibit 18-B) to address the conditions of Rule 24-G and to address the administration of the hospital water use limit.   The Water Demand Committee supports the proposed process to establish a hospital water use limit for CHOMP.

Staff also recommends that CHOMP be required to record two deed restrictions on the property, one for public access to water use records and the other to recognize the Conditions of Approval.  Both deed restrictions are standard formats used by the District.  The prepared draft deed restrictions are attached as Exhibit 18-D.  CHOMP expressed concern about recording deed restrictions on the property to the Water Demand Committee at the June 19, 2003 meeting (Exhibit 18-E).  However, staff and the Water Demand Committee recommend the deed restrictions as the best method to ensure compliance with the hospital water use limit for the 30-year reporting period specified in the Conditions of Approval.

Staff further recommends that the Board authorize staff to refund previously paid connection charges in the amount of $54,487.44 for 3.414 acre-feet of water that was debited from the community reserve allocation for CHOMP in July 1997 for the Cancer Center. The proposed hospital water use limit uses the single highest water use year in the past ten years as the basis for historic water use capacity. As that base year is 1995, and the water use reflected in that year does not take into account the Cancer Center’s water use, it stands to reason that the entire community benefit reserve allocation established by Ordinance No. 87 should be added to the 1995 water use. This makes the Cancer Center use a component of the overall hospital water use limit and supports staff’s recommendation to refund the previously paid connection charge. IMPACT ON RESOURCES: As a condition of approval, CHOMP will be required to deposit processing fees in the amount of$4,200 for up to sixty (60) hours of time and resources to review the water consumption and other conditions of the approval for a period of thirty years.  Staff time in excess of two hours per year to review the conditions and water use will result in charges to CHOMP of \$70 per hour or at the rate allowed by District Rule 60.

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