ITEM:            ACTION ITEMS                  

                                   

18.       RECEIVE DRAFT EIR ON MPWMD WATER SUPPLY PROJECT / SCHEDULE PUBLIC HEARING

           

Meeting Date:           December 15, 2003                Budgeted:  $876,500 total for FY 03-04

                                                                                    Program/Line Item No.:  1-3-2

Staff Contact:             Henrietta Stern                      Cost Estimate:  $50,000-$215,000

                         

General Counsel Approval:  Staff note not reviewed

Committee Recommendation:  Staff note not reviewed 

CEQA Compliance:  EIR in progress


SUMMARY:   The Board will consider whether or not to receive the “Board Review Draft” Environmental Impact Report (BRDEIR) for the MPWMD Water Supply Project, and whether to circulate the BRDEIR (with minor revisions) as a formal Draft EIR (DEIR) for public comment.  Exhibit 18-A provides five action options for Board consideration.  If the Board decides to move forward at this time, the Board will decide on dates for workshops, public hearings and the length of the written comment period. 

 

Due to uncertainty about the Board’s receipt of the EIR, the term “Board Review Draft” is used to differentiate the current document from a formal Draft EIR to be circulated to the public in compliance with the California Environmental Quality Act (CEQA).  Depending on the Board’s action on December 15, 2003, the BRDEIR could be significantly different than the DEIR.

 

The MPWMD project proposal is a desalination project in the Sand City area sized to produce 8,409 acre-feet annually (AFA) of drinking water.  The BRDEIR evaluates in detail the environmental effects of several component configurations such as the specific location of the desalination plant, pipeline alignments, and technology used for seawater intake and brine discharge.  Each impact chapter includes tables comparing the different component options.  Other types of water supply alternatives are evaluated at the program-level of detail in the “Alternatives” chapter.  Extensive comparison tables compare the proposed project with four major alternatives: (1) “No Project” (two variations); (2) a smaller Sand City desalination plant combined with larger-scale aquifer storage and recovery (ASR) in the Seaside Basin; (3) Carmel River Dam and Reservoir; and (4) Moss Landing desalination plant.  The EIR reviewed facilities associated with production targets higher than the 8,409 AFA as well as additional alternatives such as small-scale ASR, wastewater reclamation, offstream storage, and others. 

 

A presentation on the BRDEIR contents and conclusions will be made on December 15, 2003.    Exhibit 18-B is the Executive Summary for the BRDEIR.  Due to new information received after the BRDEIR was sent to print, there are refinements to text associated with brine discharge using horizontal directionally drilled (HDD) wells.  Replacement pages or an errata sheet will be provided at the December 15 Board meeting.  These refinements do not change the conclusions of the BRDEIR.

 

The BRDEIR was prepared by Jones & Stokes Associates (JSA) and its primary subcontractor, Camp Dresser & McKee (CDM), with assistance by District staff.   The scope of study for the EIR was defined by the District Board in March-May 2003.  Please see the “Background” section below for more information on previous Board direction, work accomplished to date, and the Phase 1 and Phase 2 contracts with JSA.

 

Staff’s understanding is that the Board may wish to consider other options besides proceeding toward a Final EIR at this time.  Five options for Board consideration are:

 

Option 1:          Receive BRDEIR on 12/15/03; immediately make final refinements and circulate formal Draft EIR for public comment, including public workshops and hearings; complete existing Phase 2 consultant contract, including engineering and hydrogeologic reports.

 

Option 2:          Do not receive BRDEIR on 12/15/03; delay any action on circulating a DEIR until hydrogeologic reports on aquifer are finalized in March 2004. 

 

Option 3:          Do not receive BRDEIR on 12/15/03; develop new information on an 11,000 AFA Sand City desalination plant, then circulate Draft EIR to the public in 2004; complete Phase 2 engineering and hydrogeologic reports.

 

Option 4:          Receive BRDEIR on 12/15/03 and circulate DEIR to public as described in Option #1.  In addition, develop information on aquifer hydrogeology and an 11,000 AFA desalination plant, and re-circulate a revised DEIR in 2004.

 

Option 5:          Receive BRDEIR on 12/15/03, but do not circulate for public comment.  Direct consultants to finalize Phase 2 engineering report, and prepare draft and final hydrogeologic reports based on recently completed field work.  Do not intend to complete a Final EIR.

 

Exhibit 18-A is a matrix describing the five options, what action is associated with each, and the pros and cons of each option.  Please see the “Discussion” section below for more information.

 

If Options 1 or 4 are selected, JSA will immediately make final refinements to the BRDEIR, which will become the official “Draft EIR” to be placed on the MPWMD website and circulated to the public, interested agencies and the State Clearinghouse for review and formal written comment.  If Options 1 or 4 are selected, the Board must decide on the length of the comment period, and set appropriate dates for public workshops (optional), and a public hearing to receive oral comment from the public.

 

RECOMMENDED ACTION:  District staff recommends that the Board:

 

Action #1:  Determine which one of the five options listed above and in Exhibit 18-A should be pursued by staff and consultants (or provide alternative direction);

 

Action #2:  If Option #1 or #4 is selected, determine whether a 45-day (minimum), 60-day, or other comment period is desired.  The following table describes suggested dates for public workshops and public hearings.  The workshops are optional, and are focused on educating the public about the DEIR so that they can comment effectively.  One public hearing is required by CEQA for decision-makers to receive oral comments on the DEIR.  The environmental consultant is available on the dates listed.  The meeting location would be the District conference room.

 

COMMENT PERIOD

WORKSHOP DATES

PUBLIC HEARING DATES

45 days

Begins Dec 19, 2003

Ends February 2, 2004

 

Jan 21 or 22, 2004

Early evening suggested

January 29, 2003 Board meeting or

Feb 4 or 5, 2004

(Afternoon and/or evening session)

60 days

Begins Dec 19, 2003

Ends February 17, 2004

Jan 21 or 22, 2004

Early evening suggested

February 26, 2004 Board meeting or

Feb 18 or 19, 2004

(Afternoon and/or evening session)

 

 

BACKGROUND: In early 2002, the Board determined that the Water Supply Project EIR contract should be performed in three phases: (1) develop project descriptions for proposed project and alternatives, and issue Notice of Preparation (NOP) for an EIR; (2) prepare Draft EIR and circulate for public review; and (3) prepare and certify Final EIR, approve project.  The Board set an ambitious goal of certifying an EIR by October 2003.

 

Phase 1 Efforts.  At its March 18, 2002 meeting, the Board authorized the Phase 1 contract scope of work to be performed by JSA and CDM for a not-so-exceed amount of about $724,000.  The Phase 1 engineering work focused on developing project descriptions for non-dam alternatives with more detailed and updated information than was found in the California Public Utilities Commission (CPUC) “Plan B” non-dam alternative draft reports available at that time.   The Phase 1 environmental work included issuance of an EIR Notice of Preparation in June 2002, public hearings and receipt of written comments in July 2002, and Board review of policy issues elicited by the comments in July and August 2002.  The original intent was to prepare a joint EIR and federal Environmental Impact Statement (EIS) document, because ASR entails use of federal land for injection wells.  The EIS component is not being pursued because of subsequent focus on desalination in Sand City.

 

At its August 29, 2002 meeting, the Board voted to not approve the Phase 2 scope of work to prepare a Draft EIR/EIS at that time.  Instead, the Board believed that key Phase 1 engineering tasks must first be completed, and more information must be obtained about pertinent topics before moving forward.  The needed information included:  detailed review of the CPUC Plan B Final Report released in August 2002; determine Cal-Am plans for a dam or Plan B; confirm lead agency status with the CPUC; and confirm U.S. Army plans regarding role as federal lead agency.  Progress on the Phase 1 engineering report was hindered by lack of access to Cal-Am or CPUC data (which was eventually provided in February 2003).  An update on the EIR-related activities was provided to the Board at its November 14, 2002 strategic planning session.  In Fall 2002 through January 2003, meetings were held with the U.S. Army, Cal-Am, CPUC and many local jurisdictions about the EIR process and water supply facility locations. 

 

Carmel River Flow Threshold Report.  At its August 29 and September 16, 2002 meetings, the Board directed staff to add a new “Task 2-0” to define the streamflow regime that would sustain the Carmel River habitat and dependent species, and prepare a “Carmel River Flow Threshold Report”.  The Board acknowledged that the original goal of certifying an EIR by October 2003 would not be achieved due to the extra time needed for Task 2.0 as well as the engineering data delays noted above.  Several versions of the Carmel River Flow Threshold Report were received by the Board in early 2003, and circulated to agencies and the public for comment.  Due to concerns about consistency with federal flow recommendations, the Board voted in July 2003 to not use the flow threshold report in the EIR. 

 

Phase 1 Engineering Report.  In December 2002 and February 2003, CDM submitted interim drafts of the Phase 1 Engineering Report for internal detailed review; the completed report was presented to the Board on March 27, 2003.  The report evaluated a variety of water supply alternatives based on available technical and economic information, and identified (a) the maximum feasible size for each major type of alternative, and (b) recommended combinations of alternatives needed to achieve three water production goals.  The goals represented existing Cal-Am water production as well as potential future water needs focused primarily on existing legal lots of record.  A significant report conclusion was that the maximum drinking water production of a Sand City desalination plant using standard radial wells is estimated at 6,000 AFA.  However, if horizontal directional drilling (HDD or “slant”) wells were used, the maximum production at Sand City would be increased to about 11,000 AFA.  The report recommended that field tests be conducted to confirm these production estimates as well as the feasibility of the HDD technology in the local hydrogeologic setting.

 

Cal-Am Project Proposals.  On February 11, 2003, Cal-Am announced its plans to construct a 9,400 AFA Moss Landing desalination plant combined with a small (1,300 AFA) Seaside Basin ASR project, known as the Coastal Water Project (CWP), which is identical to the Plan B Final Report recommendation.  Cal-Am requested that its application to the CPUC be amended to replace the proposed Carmel River Dam with the CWP and that the CPUC be lead agency on the EIR for the CWP.  The water distribution system application to MPWMD for the Carmel River Dam and Reservoir Project was kept active by Cal-Am.  In March 2003, the CPUC directed Cal-Am by April 1, 2003 to identify agencies with a regulatory interest in the CWP, address rate-making issues associated with the dam proposal, and describe how the dam application and extensive EIR information prepared by MPWMD will  “wind down” yet not be lost.  The CPUC set an April 11 deadline for agency input on these issues.  The CPUC held hearings on May 14, and issued a Proposed Decision on July 16, which was later ratified by the full Commission on September 4, 2003.  The CPUC Decision: (a) dismisses without prejudice Cal-Am’s application for the Carmel River Dam; (b) directs Cal-Am to submit a formal application for the CWP, including an Environmental Assessment (EA) and exploration of regional partnerships, and (c) asserts that the CPUC should be the lead agency for the CWP.  Cal-Am and CPUC representatives estimate that Cal-Am will take about 18 months to prepare the EA and then submit a new application for the CWP.

 

Phase 2 Scope for Draft EIR.  At its January 30, 2003 meeting, the MPWMD Board indicated its interest in a local desalination project producing up to 11,000 AFA combined with a small (less than 1,000 AFA) ASR project.  Staff was subsequently asked to develop work plans and cost estimates for several options, including project-level evaluation of only a Sand City area desalination plant that would produce 8,409 AFA to lawfully meet the existing 15,285 AFA Cal-Am production, assuming 3,500 AFA from the Seaside Basin and 3,376 AFA recognized rights for diversions from the Carmel River. 

 

In February 2003, the MPWMD Chairperson directed that revised scope information be delayed until late March to allow consultation with Cal-Am regarding its plans for the CWP and the potential for a coordinated water supply effort.   Given Cal-Am’s commitment to the CWP and increasing interest by Board leadership in a local desalination alternative, District staff was directed to provide as much information as possible about a local desalination option given the limited remaining funds in the Phase 1 budget.

 

On March 27, April 2 and May 2, 2003, the MPWMD Board evaluated a variety of options, and provided specific direction on the scope of work for Phase 2, which focuses on preparation of a Draft EIR on water supply options as well as testing to determine feasibility of alternative means to collect seawater and dispose of brine.  In a series of motions, the Board took the following actions:

 

Ø      Proposed construction of a local desalination project in the Sand City area.  The goal is to complete the Final EIR in Spring 2004 and hold an authorizing vote on financing the project in November 2004. The project yield goal is 8,409 AFA to make lawful the current level of Cal-Am water demand in the community (15,285 AFA total) as well as enable a 500 AFA reduction in Cal-Am pumping from the Seaside Basin. 

 

Ø      Determined that the Sand City desalination project will be studied at the “project-level” of detail in the EIR.  Other alternatives, such as Moss Landing desalination, ASR, reclamation, storm water reuse, off-stream storage, and the Carmel River Dam and Reservoir Project, will be reviewed at a lesser level of detail (“program level”).

 

Ø      Approved the Phase 2 scope of work for engineering and environmental work associated with preparation of a Draft EIR on the water supply project with a completion goal of October 2003.  The total not-to-exceed amount is $946,750, including: (a) $662,500 to prepare the Draft EIR; (b) $222,700 to conduct geotechnical (well drilling and aquifer tests) and geophysical (sonic) evaluations to characterize the shallow coastal dune aquifer (Aromas Formation) as it relates to the feasibility of installing HDD wells for the Sand City desalination project; and (c) $61,550 to obtain permits for the aquifer testing program (four test wells located in former Fort Ord, Sand City and Seaside).

 

Ø      Indicated its desire to serve as the lead agency for preparation of a separate EIR on the Cal-Am CWP proposal.  Because other agencies have also indicated interest in serving as the lead agency for the Cal-Am project, a formal determination has yet to be made.

 

Ø      Directed MPWMD staff to formally request Cal-Am to rescind its application for the Carmel River Dam and Reservoir Project, consistent with February 2003 announcements about the Coastal Water Project.  MPWMD staff was directed to schedule a public hearing on whether or not the application for the dam should be denied if an affirmative response was not received within 90 days.  (Note: Cal-Am subsequently indicated it did not plan to rescind its application until the CPUC made determinations on the CWP.  The District Board denied Cal-Am’s application for the dam at a public hearing on August 18, 2003.)

 

For a detailed overview, please refer to the October 20, 2003 Quarterly Water Supply Project Status Report, which includes a sequential listing of actions by various entities over the past several years, as well as the Board packets for March 27, April 2, and May 2, 2003.  All are available for review at the District office.

 

Status of Work Effort.  The Phase 1 work effort was completed on April 4, 2003.  A significant portion of Phase 2 work tasks have been completed as of December 15, 2003, including:

 

Ø      Prepare limited copies of  “Board Review Draft” EIR for receipt by MWPMD Board;

Ø      Obtain permits from seven agencies to enable geophysical and geotechnical investigations of shallow coastal dune aquifer (Aromas Formation); this was an extensive effort that took longer than anticipated due to delayed action by the U.S. Fish and Wildlife Service;

Ø      Drill and install casings at four boring sites, including two on the former Fort Ord, one in Seaside, and one in Sand City;

Ø      Conduct “slug tests” and other hydrogeologic measurements in the cased borings;

Ø      Conduct offshore and onshore geophysical (sonic) investigations, including peer review by UCSC professor Dr. Gary Greene, an expert in this field;

Ø      Conduct modeling to evaluate the effect of radial and HDD wells on coastal aquifer, and prepare a draft technical memorandum, including peer review by an independent hydrogeologist with local expertise (Martin Feeney) and the District hydrogeologist;

Ø      Conduct detailed modeling to evaluate radial and HDD well capacities based on results of field investigations;

Ø      Prepare a draft Phase 2 engineering report.

 

Remaining consultant tasks (and time lines) to be performed in accordance with the Phase 2 contract include:

 

Ø      Prepare formal Draft EIR; make numerous copies and CDs; circulate to public, agencies and State Clearinghouse, assuming approval by the Board (week of December 15, 2003);

Ø      Participate in public workshops and public hearings for the Draft EIR, assuming approval by the Board (January-February 2004);

Ø      Prepare final computer modeling technical memorandum as well as final Phase 2 Engineering Report (December 2003-January 2004);

Ø      Prepare draft and final reports on geotechnical and geophysical test results and detailed modeling (February-March 2004).

 

Overview of Consultant Costs.  The Board approved retaining JSA/CDM in March 2002; the Phase 1 contract was signed on April 17, 2002 with a not-to-exceed limit of $723,775. JSA/CDM invoices for the period April 2002 through April 4, 2003 totaled $638,267 or 88% of the contract limit for Phase 1. 

 

The Board approved of the Phase 2 contract with JSA/CDM on April 2 and an amendment for permit activities on May 2, 2003 with a not-to-exceed amount of $946,750 for Phase 2 (contract signed May 19, 2003).  JSA invoices from April 5, 2003 through November 23, 2003 total  $522,848.  This amount does not include substantial CDM costs for November and mid-December, nor JSA costs for December, estimated at roughly $190,000.  Estimated Phase 2 costs through mid-December 2003 total about $713,000.  Thus, the combined total cost for Phase 1 and Phase 2 desalination EIR studies incurred from April 2002 through mid-December 2003 is estimated at $1.35 million.  Exhibit 18-C summarizes the above cost information.

 

A rough estimate of near-term invoices for the remaining Phase 2 tasks to be performed from mid-December 2003 through early March 2004 is (a) $50,000 for CDM to complete the hydrogeologic reports on aquifer characteristics and Phase 2 engineering, and (b) $30,000 to circulate a Draft EIR and hold workshops and hearings, assuming Board direction to move forward. 

 

DISCUSSION:  The Board Review Draft EIR is the culmination of work that began in March 2003.  It is based primarily on engineering evaluations conducted by CDM, sediment transport modeling conducted by Mussetter Engineering, extensive field study by JSA staff, CVSIM computer modeling and technical assessments by District staff (hydrology and Carmel River fishery sections), and comprehensive review by JSA and District staff.

 

The EIR provides project level evaluation of a desalination project that would produce 8,409 AFA (rounded to 8,400 AFA in the EIR discussion).  A common question asked is why 8,409 AFA was selected as the project goal rather than the 10,730 AFA estimated in the 1995 SWRCB Order 95-10 if the stated project purpose is to comply with Order 95-10 and enable a lawful water supply.  The 8,409 AFA amount represents the amount of production needed to make current community water use lawful (total of 15, 285 AFA Cal-Am production) and accounts for the possibility that Cal-Am may need to reduce production from the Seaside Basin by 500 AFA to reduce impacts, as follows:

 

Ø      Since 1996, Cal-Am production is limited to 15,285 AFA, comprised of 11,285 AFA limit on Carmel River diversions imposed by Order 95-10 and 4,000 AFA limit on Seaside Basin extractions imposed by MWMD;

Ø      Subtract 3,376 AFA recognized by SWRCB as Cal-Am’s legal right to divert water from the Carmel River;

Ø      Subtract 3,500 AFA estimated to be taken by Cal-Am from the Seaside Basin in the future (this is 500 AFA less than current limit of 4,000 AFA);

Ø      Thus, the quantity needed to replace unlawful diversions and provide a lawful supply for current community water use is 8,409 AFA.

 

In contrast, the 10,730 AFA unlawful diversions estimated in Order 95-10 was based on historical Carmel River diversions in the 1979-1988 period, with the average defined as 14,106 AFA.  The 10,730 AFA represents 14,106 AFA (historical Carmel River diversions) minus 3,376 AFA (recognized diversion right).  Since water year 1997, SWRCB Order 95-10 has prohibited Cal-Am from taking more than 11,285 AFA from the river, which is roughly 2,800 AF less than the historical 14,106 AF.  Thus, the 10,730 AFA estimate of unlawful diversions in Order 95-10 does not reflect current conditions.

 

Action Options.  Exhibit 18-A summarizes five action options for Board consideration at this time, including pros and cons.  The options are crafted to reflect Board policy decisions such as:

 

Ø      Should the District maximize the number of water supply options available for potential pursuit, or narrow its choices?

 

Ø      Should the District move forward on its own water supply proposal or wait to see what action is taken by Cal-Am and other entities regarding the Coastal Water Project?

 

Ø      If a District proposal is desired, should it be a different project description than the 8,400 AFA project currently described in the EIR (e.g., a larger desalination plant at Sand City or a project other than Sand City desalination)?

 

Ø      Should the District circulate a Draft EIR on a project before relevant technical information is available that could affect the feasibility of some of the project components or the total production capacity of the project?

 

Ø      Does the District desire near-term formal comment from agencies and the public on the Sand City desalination concept?

 

Options #1 and #4 are geared toward moving forward and receiving early feedback on the Sand City project concept.  Option #4 adds information on a larger desalination project in addition to the 8,400 AFA project described in the current BRDEIR. 

 

Option #2 adopts a “wait and see” policy and reflects a choice to not move forward on the Draft EIR until the Phase 2 aquifer testing and engineering reports are completed.  If the test results are promising, the Board could choose to move forward in Spring 2004.  If the results are not promising, the choice is whether to evaluate a smaller desalination project at Sand City (6,000-7,000 AFA range) with standard radial well technology in combination with some other project(s) to meet community needs. 

 

Option #3 reflects a desire to evaluate a Sand City desalination project larger than 8,400 AFA.  The estimated maximum size of 11,000 AFA is suggested. 

 

Option #4 is a combination of Option #1 and #3 – move forward to get early agency and public feedback, but also obtain new information on a larger plant, which will require re-circulation of a revised Draft EIR.

 

Option #5 reflects a choice to not further evaluate the Sand City desalination concept in an EIR.  The contracted Phase 2 reports on the coastal dune aquifer would be completed for future technical reference.

 

Costs of Options.  All options assume that CDM will prepare draft and final reports in February-March 2004 on the hydrogeologic data collected in November-December 2003 to better characterize the coastal dune aquifer.  This basic scientific data will useful to the District and several local agencies for a variety of purposes.  About six months and $230,000 have been expended in June-December 2003 obtaining permits, drilling wells, carrying out tests, collecting data, and conducting offshore and onshore investigations.  Regardless of the option selected, staff strongly recommends spending the roughly $50,000 needed for CDM to analyze the field data and prepare a scientific report in February-March 2004.  This effort is part of the current Phase 2 contract and is budgeted for FY 2003-2004.

 

As shown in Exhibit 18-A, Options #2 and #5 entail only completing the contracted hydrogeologic investigations at a cost of roughly $50,000.  Option #1 would cost $80,000, including $50,000 for the hydrogeologic report and $30,000 to circulate the Draft EIR, hold workshops and public hearings.  These efforts are included in the current Phase 2 contract and are budgeted. Option #3 would entail another $105,000 and additional four months (through June 2004) to analyze an 11,000 AFA desalination project at Sand City, for a total of $185,000.  The $105,000 for the 11,000 AF project is not part of the Phase 2 contract and is not budgeted for FY 2003-2004.  Option #4 adds another $30,000 ($215,000 total) and two months to re-circulate a revised Draft EIR for public comment, and would entail $135,000 that is not part of the Phase 2 contract and is not budgeted for FY 2003-2004.  

 

IMPACT ON RESOURCES:  The FY 2003-2004 budget includes $876,500 for environmental review and related engineering work for the period July 1, 2003 through June 30, 2004.  Much of these funds have been spent for the Phase 2 work completed to date, and nearly all will be spent by March 2004.  Funds are currently budgeted only for Phase 2 work included in the current consultant contracts.  As noted above, FY 2003-2004 budget amendments and additional funds will be needed to analyze an 11,000 AFA desalination project at Sand City in the current fiscal year.  The funding source is the Capital Projects Fund, which obtains revenue primarily from MPWMD water connection fees on permits for new construction or remodels.  Previous Board direction has been to use the Capital Projects Fund reserve when water augmentation project expenditures have exceeded revenues; thus, limited reserve funds will be available by the end of FY 2003-2004. 

 

Phase 3 Future Tasks.  Importantly, in order to complete the CEQA process, a future Phase 3 contract is needed to (a) consolidate and evaluate public comment on the Draft EIR, and prepare a Responses to Comments document; and (b) prepare a Final EIR, including a comprehensive Mitigation and Monitoring Plan, for certification by the Board.   The time to complete the Final EIR is highly dependent on the volume and substance of agency and public comments on the Draft EIR.  The cost is difficult to predict until the comments are received, but could be at least $100,000.

 

If the results of the current hydrogeologic tests on the coastal dune aquifer are promising, the Board could choose to drill a demonstration HDD well for enhanced confirmation of the feasibility of this technique in the local setting.  Such action would require: selection of a test well location; determine design methods/criteria, based on results from the current test program; obtain cost estimate from HDD drilling contractors; obtain permits from affected agencies; drill well and restore site.  District consultants indicate that the total time could take about one year, and the cost would be an estimated $500,000 to $600,000.

 

U:\staff\word\boardpacket\2003\2003boardpacket\20031215\ActionItems\18\item18.doc

Henri 12/10/03  Final 10pp