ITEM:            PUBLIC HEARING

17.          CONSIDER VARIANCE FROM MPWMD RULE 20-C-3 BY KINGMEN, INC (FRED KING): APN 103-121-002

Meeting Date:           March 15, 2004                      Budgeted:  N/A

Program/Line Item No.:  N/A

Staff Contact:             Henrietta Stern                      Cost Estimate:  N/A

General Counsel Approval: Staff note provided for review

Committee Recommendation: N/A

CEQA Compliance: N/A

SUMMARY:  The Board will consider whether or not to grant a variance to MPWMD Rule 20-C-3 to Kingmen, Inc. (represented by Fred King).  Rule 20-C lists exemptions to the requirement to obtain a permit to create a water distribution system (WDS).  Rule 20-C-3 sets deadline dates in 2003 by which: (a) a Monterey County well construction permit must be obtained; and (b) a well must be made active, registered, metered and inspected by District staff.   The text of Rule 20-C-3 is shown in the “Discussion” section.

Rule 90, Variance, states that the Board may grant a variance from any provision of the standards incorporated into District Rules and regulations whenever it finds:

(a)        that special circumstances exist in a particular case; and

(b)        that practical difficulties or unnecessary hardship would result from the strict interpretation and enforcement of any such standard; and

(c)        granting of a variance would not tend to defeat the purposes of the Rules and Regulations.

The Board may place conditions upon a variance that it approves.  The Board has the discretion in unusual matters to reduce and rebate in full or in part the fee for the variance request otherwise set by Rule 63-B.

In brief, the applicant asserts that he could have fully met the requirements of Rule 20-C-3 were it not for a series of lawsuits, injunctions, temporary restraining orders, and other legal matters that stymied his progress.   He eventually prevailed in all cases, but the time it took to resolve these issues resulted in exceeding the time limits in Rule 20-C-3.  He asserts that unusual and special circumstances are involved in his case; that it would be an extreme financial hardship to pay the $2,450 fee to create a WDS and wait another 2-4 months to process that application due to daily fees he must pay on a loan; and that MPWMD rules governing WDS would not be compromised by a favorable ruling. The variance application and related communications from the applicant are provided as Exhibit 17-A. Extensive supporting documentation has been provided to the Board under separate cover, and is available for public review at the District office. RECOMMENDATION: Staff recommends that the Board take the following actions: Ø Approve the variance request based on evidence that shows the applicant could have met the requirements of Rule 20-C-3 were it not for a series of legal proceedings that stymied his progress, as described in the Findings of Approval (Exhibit 17-B). As a condition of the variance, require that the well be properly registered, metered and inspected by District staff by October 2, 2004, the date the current Monterey County well construction permit expires. Ø Direct staff to issue a Confirmation of Exemption letter for Mr. King to provide to the Monterey County Health Department to show compliance with Condition #17 on the October 2003 County well construction permit. Ø Direct staff to refund a portion of the$2,450 fee the applicant paid to MPWMD for the water distribution system application.  The District should retain an amount for staff time spent assisting the applicant, evaluating the information submitted, developing public hearing materials, and implementing the formal variance process.  (See the “Discussion” section for more details.)

DISCUSSION:  Ordinance No. 105 was adopted on December 16, 2002 and became effective on January 15, 2003.  An important aspect of Ordinance No. 105 was the requirement for a WDS permit for any well constructed on a single parcel within the Carmel River Basin (within District boundaries) rather than wells located in the Carmel River Alluvial Aquifer or 1,000 feet from the aquifer.  Ordinance No. 105 amended Rule 20-C, Exemptions, to create Rule 20-C-3, among other changes.  The intent of Rule 20-C-3 was to give a reasonable period of time for property owners “in progress” with well construction in late 2002, who previously did not need a WDS permit, but now do.  Rule 20-C-3 states:

C.    EXEMPTIONS FOR WATER DISTRIBUTION SYSTEM PERMIT

An MPWMD water distribution system permit is not required for the following situations: [text for #1 and #2 is omitted here]:

3.  For a single-parcel connection system located within the Carmel River Basin that meets all of the following three criteria: (a) the well location lies outside of the mapped area 1,000 feet from the Carmel Valley alluvial aquifer or 1,000 feet from Tularcitos, Hitchcock Canyon, Garzas, Robinson Canyon or Potrero Creeks; (b) a valid well construction permit by the Monterey County Health Department was issued prior to January 15, 2003; and (3) the applicant makes the well active, registers the well with MPWMD, meters the well, has the well inspected by MPWMD, and receives an approved MPWMD Water Meter Installation Inspection form issued on or before June 30, 2003.

The following paragraphs address the three criteria in Rule 20-C-3:

Criterion A; Well Location:  The subject parcel meets Criterion (a) as it is outside of the alluvial aquifer/1,000-foot regulatory area and is within the Carmel River Basin.

Criterion B; Receive Monterey County Well Permit before January 15, 2003:  The applicant meets Criterion (b) because his first well construction permit (#02-080) from the Monterey County Health Department was issued on May 20, 2002.

Criterion C; Complete, Register, Meter and Inspect Well by June 15, 2003:  The applicant does not meet Criterion (c) as a result of extensive delays due to a series of legal proceedings and related action described in the applicant’s “Chronology of Events” (Exhibit 17-C).  Extensive documentation supporting this chronology was provided by the applicant and reviewed by District staff.  This documentation is too voluminous to reproduce in full herein.  It includes copies of Monterey County permit applications and approved permits, certified copies of legal documents, photographs of well drilling activities on the property, and correspondence with the Monterey County Planning Department regarding permits for construction of a home on the property.  Complete packages have been submitted under separate cover to the Board and a copy is available for public inspection at the District office. The District is not involved with the merits of the legal actions that took place.  It is notable, however, that the Superior Court dismissed all actions against the applicant in a 25-page document dated October 17, 2003 (Case No. M61991, Consolidated Master Case, Statement of Decision).  By that time, the June 30, 2003 deadline in Rule 20-C-3 had passed, and the original May 2002 County well construction permit had expired.

The following paragraphs address the three criteria in Rule 90, Variance:

Criterion A; Special Circumstances Exist:  The applicant obtained a County well construction permit in May 2002, and began well construction in November 2002.    District staff believes that, in a normal situation, there would have easily been enough time to complete, register, meter and inspect the well by June 30, 2003.  The Board should make the policy determination regarding Criterion (a) as it relates to the series of legal actions against the applicant that had a substantive effect on his ability to comply with the June 30, 2003 timeline in Rule 20-C-3.

Based on the documentation provided to the District by the applicant, there does not appear to be another reason besides the series of litigation to account for the delay in drilling the well, and constructing a planned home on the subject property.  The applicant appears to have pursued various County permits to build a home in a diligent manner.  Consideration by the County Planning Department was tabled in May 2003 due to lack of a well, pumping test results and inspection of the well by the Health Department. The remaining “road block” is compliance with the County well construction permit, which in turn, requires a WDS permit from the District.

Criterion B; Unnecessary Hardship Would Result:  The application materials and related correspondence (Exhibit 17-A) assert that the applicant has already suffered significant financial hardship from the expensive litigation (in which he prevailed), combined with the delay in his ability to build a home on the property, for which a construction loan has already been approved, and for which he is making monthly payments.  The applicant asserts that if the variance is not granted, the additional 2-4 months to obtain a WDS permit, as well as the $2,450 fee, could jeopardize his ability to keep the property. District staff cannot independently verify this statement, and it is beyond the purview of staff to conduct some type of financial assessment. The applicant, Kingmen Inc., is a registered California corporation. The Board should make the policy determination regarding Criterion (b), unnecessary hardship. Criterion C; No Adverse Effect on Rules and Regulations: District staff believes that granting this variance would not tend to defeat the purposes of the Rules and Regulations. The variance is associated with a very restricted “window in time” that already passed nine months ago. The timelines associated with Rule 20-C-3 applied to a very limited number of property owners who were in progress with wells in late 2002, when Ordinance No. 105 was being considered. District staff is not aware of any other potential applicant who would take advantage of a precedent if this variance were approved. # Rebate of Fees The Board has the discretion in unusual matters to reduce and rebate in full or in part the fee for the variance request otherwise set by Rule 63-B. The applicant was required to pay a total of$2,700 to MPWMD for two fees:

Ø      $2,450 for water distribution system permit application. Ø$250 for variance request to Rule 20-C-3

Based on time expended through March 10, 2004, anticipated time at the March 15, 2004 hearing, and follow-up action if the variance is approved, an estimated total of 15+ staff hours is expected to be used.  This totals an estimated $1,050 at a rate of$70/hr.  Staff recommends that the $250 variance fee not be waived, and that the actual amount expended for staff time should be deducted from the$2,450 water distribution system fees that was paid, leaving a refund of approximately \$1,400.  The actual refund should be based on the actual number of staff hours expended.

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Revised March 9, 2004 at 11:45 PM