3.
CONSIDER
ADOPTION OF SECOND READING OF ORDINANCE NO. 109
Program/Line Item No.: N/A
Staff
Contact: David Laredo Cost Estimate: N/A
General Counsel Approval: Yes
Committee Recommendation: None
SUMMARY
OF PRIOR ACTION:
Ordinance
No. 109 is an ordinance to enable upgrades to the Carmel Area Wastewater District
(CAWD)/Pebble Beach Community Services District (PBCSD) Recycled Water
Project. This ordinance would enable
water entitlements presently held by the Pebble Beach Company to be made
available to properties throughout Del Monte Forest, rather than only to
properties owned by the Pebble Beach Company (PBC) in order to finance the
Project Expansion.
The
original financing plan to facilitate construction of the Wastewater
Reclamation Project was approved by the MPWMD Board in 1989 by Ordinance No. 39. This financing plan was followed by
agreements among MPWMD, CAWD, PBCSD, PBC, and other recycled water users to
finance, construct and operate, and sell recycled water. Problems have arisen relating to the quality
of recycled water available for its intended use and inadequate quantities of
recycled water. As a consequence, a
significant amount of potable water has been needed each year to supplement or
replace recycled water. Plans to
physically improve the existing project have been developed. The purpose of proposed Ordinance 109 is to facilitate the financing of the contemplated
improvements to the existing project.
To fund project improvements, the
Pebble Beach Company has proposed a financing plan whereby water entitlements
held by the PBC, in accordance with MPWMD Ordinance No. 39, would be made
available to residential properties throughout Del Monte Forest, rather than
only to properties owned by the PBC.
Ordinance No. 109, as approved on first reading, would modify MPWMD Rule 23.5 to re-define benefited
properties and provide a framework for the ancillary agreements for financing,
construction and operation, and sale of recycled water.
The
Board has considered several different versions of draft Ordinance No.
109. The
evolution of this measure, and Board action on it, is partially summarized
below:
October 20, 2003 - The Board passed Ordinance No. 109 on
October 20, 2003 on First Reading by the unanimous vote of 7 – 0 (Motion by
Henson, Second by Edwards).
November 24, 2003 - The Board adopted Ordinance No. 109 on
second reading by the unanimous vote of 7– 0 (Motion by Henson, Second by
Lindstrom). This motion followed
adoption of a motion that Ordinance No. 109 “does not involve any new or
different environmental circumstances that would trigger a need for further
environmental review under Public Resources Code section 21166.”
The Motion by Henson,
Second by Erickson, was adopted on a vote of 5 - 2.
December 15, 2003
– In accord with District Rule No. 23, Director Edwards requested
reconsideration of the November 24, 2003 action of the Board to adopt Ordinance
No. 109 on second reading. The Motion
by Edwards, Second by Potter, was adopted on a vote of 7 - 0.
April 22, 2004 – On April 22, 2004, the Board reviewed and
approved CEQA Findings in support of its determination that the criteria of
CEQA Guideline Section 15162 enable the Board to rely on the prior EIR
certified for the original recycled wastewater project. CEQA findings in support of the first
reading of Ordinance No. 109 passed on a vote of 4 – 2 (Directors Lehman and
Markey opposed, Director Potter was absent).
Ordinance No. 109 was also approved on first reading at the meeting of April 22, 2004, by a vote of 4 – 2 (Directors Lehman and Markey opposed, Director Potter was absent). Ordinance No. 109, as approved by Board, differed from the earlier November 24, 2003 version in the following aspects: (i) revised provisions describe the Project Expansion financing, (ii) a provision referenced the SWRCB position on measurement of Entitlement Water use, (iii) detail was added concerning the procedure for parties to challenge MPWMD determinations, (iv) implementation dates were clarified, and (v) duplicative findings were removed.
May 27, 2004 – Ordinance No. 109 (Exhibit 3-A) is presented for consideration on second reading. This version has been modified in accord with the Board’s direction at the meeting of April 22, 2004 meeting. The Board directed various revisions, at times providing specific language and at times characterizing desired revisions in more general terms. One of the more significant revisions in the latter category was to add in the concept of calculating water use by the District’s fixture unit methodology as authorized by SWRCB staff. Another significant revision was to add an “escape clause” (New Section Eight) voiding the agreements and Ordinance No. 109 if either (1) there was no Supplemental Financial Commitment within eighteen (18) months after the effective date of the ordinance, or (2) construction of the Project Expansion has not begun within twelve (12) months thereafter. Additional clean-up modifications have been made to the version of Ordinance No. 109 at second reading; these include: (1) limiting the amount of PBC’s Water Entitlement that can be sold to 175 acre feet, (2) eliminating references to completing one component of the Project Expansion only, (3) adding language to Section Nine to confirm that voiding the agreement “undoes” the Ordinance, and (4) various conforming revisions to avoid potential conflicts with other revisions described above.
Also presented for consideration for the second reading of Ordinance No. 109 is a set of revised and conformed CEQA Findings (Exhibit 3-B). This set of CEQA Findings reflect limits on reassignment of PBC’s existing Entitlement, and that the conveyed Entitlement cannot be used unless and until completion of the Project Expansion is guaranteed. Several minor number errors were corrected to accurately characterize the current state of Del Monte Forest development. A full description of these modifications is set forth below in this staff note under the heading, “CEQA REVIEW”
RECOMMENDATION: Staff
recommends that the Board take the following actions:
1.
The Board
previously approved the revised CEQA Findings (Exhibit
3-B) to support the second reading and
enactment of Ordinance No. 109. The
Board should accept and approve the CEQA Findings in support of action to adopt
Ordinance No. 109 on Second Reading.
2.
Following
the public hearing, the Board should consider whether or not to approve
Ordinance No. 109, as presented (Exhibit 3-A), on second reading.
3.
Direct
staff and counsel to continue efforts to finalize the Supplemental Financing
Agreement,
Supplemental Construction and Operation Agreement, and Agreements for Sale of Recycled
Water in order to implement Ordinance No. 109.
Staff should be directed to return these revised documents to the Board
for review and approval.
BACKGROUND: The
CAWD/PBCSD Wastewater Reclamation Project began operation in August 1994. Since operation began, the recycled water
users have experienced apparent stress-related symptoms in some of their turf
areas, primarily the greens, due to the combination of high levels of sodium in
the recycled water with low-salt-tolerant grass species used in those portions
of the golf courses. As a result,
significant quantities of potable water have been needed to meet the recycled
water users’ water quality needs. In
addition, potable water has been required to provide sufficient quantity of
irrigation water during periods when demand for irrigation water exceeded the
available supply of recycled water.
To
address the problems of recycled water quantity and quality, all parties
involved in the project have been working since 1995 to develop solutions. The parties now all agree that the best,
most cost-effective solution is to (1) retrofit Forest Lake Reservoir in Del
Monte Forest, formerly owned by California-American Water Co. but taken out of
service several years ago, to provide the additional recycled water storage
capacity needed to meet the water quantity requirements, and (2) add additional
treatment facilities at the CAWD treatment plant to produce final treated water
quality that meets the recycled water users’ needs.
In
order to fund these improvements, the Pebble Beach Company has proposed a
financing plan whereby water entitlements held by the Pebble Beach Company in
accordance with MPWMD Ordinance No. 39 and current project agreements would be
made available to residential properties throughout Del Monte Forest, rather
than only to properties owned by the Pebble Beach Company. Ordinance No. 109 would change MPWMD Rule 23.5 to re-define benefited
properties and provide a framework for the ancillary agreements for financing,
construction and operation, and sale of recycled water.
As noted above, the
Board reviewed earlier versions of Ordinance No. 109. The Board passed Ordinance No. 109 on October 20, 2003 on First
Reading by the unanimous vote of 7– 0 (Motion by Henson, Second by
Edwards). On November, 24, 2003, the
Board adopted Ordinance No. 109 on second reading by the unanimous vote of 7– 0
(Motion by Henson, Second by Lindstrom).
On December 15, 2003, acting pursuant to District Rule No. 23, Director
Edwards requested reconsideration of the November 24, 2003 action of the Board
to adopt Ordinance No. 109 on second reading.
The Motion by Edwards, Second by Potter, was adopted on a vote of 7 -
0. Ordinance No. 109 was again approved
on first reading (upon reconsideration) at the meeting of April 22, 2004, by a vote of 4 – 2
(Directors Lehman and Markey opposed, Director Potter was absent). CEQA Findings in support of this action were
also approved.
Ordinance
No. 109 proposes to change MPWMD Rule 23.5 to re-define benefited properties
and provide a framework for the ancillary agreements for financing,
construction and operation, and sale of recycled water.
As
characterized below, a series of additional documents is needed to complete the
proposed Financing Plan, including:
(a) the Supplemental Financing Agreement, (b) the Supplemental
Construction and Operation Agreement, and (c) the Agreement for Sale of
Recycled Water. Preliminary draft
versions of these documents were provided to the Board in the October 20, 2003
meeting packet. (Reference Exhibits
1-C, 1-D, and 1E to the April 22, 2004 meeting packet.) These draft agreements remain subject to
negotiation, review and modification, and shall be modified to conform to
Ordinance No. 109 as enacted.
The
most recent State Water Resources Control Board (SWRCB) letter of May 10, 2004 (Exhibit 3-C) clarifies earlier comments submitted on
the 2004 Draft EIR for the Pebble Beach Company’s Del Monte Forest Preservation
and Development Plan, and also confirms that the Division of Water Rights “has
no objection to continued use of the fixture method” as the means to account
for entitlement water use.
CEQA REVIEW:
The following documents have been prepared pursuant to the California Environmental Quality Act (CEQA) relating to the CAWD/PBCSD Project:
· MPWMD Resolution No. 89-21 adopted on October 3, 1989, certifying MPWMD’s reliance, as responsible agency, on the Final EIR for CSD/PBCSD Waste Water Reclamation Project certified September 21, 1989 by CAWD.
· Final Expanded Initial Study, Phase II – CAWD/PBCSD Wastewater Reclamation Project, dated February 23, 1996 and Negative Declaration adopted in PBCSD Resolution No. 96-04 adopted February 23, 1996.
Guideline
15162 provides a logic tree under which the Board is authorized to determine
whether or not the present action (a) would cause a substantial change in the
project which will involve new significant environmental effects or a
substantial increase in the severity of identified significant effects, or (b)
would involve changed circumstances or new information relating to significant new
effects of the project or as to the severity of impacts of the project.
On
April 22, 2004, the Board reviewed and approved CEQA Findings in support of the
first reading of Ordinance No. 109. A
revised and conformed set of CEQA Findings (Exhibit
3-B) supports the determination that CEQA
Guideline Section 15162 enables the Board to rely on the prior EIR certified
for the original recycled wastewater project.
The
CEQA Findings presented in this packet update the prior version as
follows: A sentence was added to
Finding #4 to state, “The remainder of the potable water freed up by the
Original Project has not been allocated by MPWMD for reuse of any kind.” Finding #8 was modified to parallel the text
of the CEQA Guidelines. Finding #11 was
modified to reflect the 175 AF limit
on reassignment of PBC’s existing Entitlement, and also to state that the
conveyed Entitlement cannot be used unless and until completion of the Project
Expansion is guaranteed. Finding #21 was corrected to accurately
conform to the map attached as
Exhibit B to Ordinance No. 109. Findings #21 and #36 were added to state
the Supplemental Financing Plan will not increase diversions from the Carmel
River system because an average of 275 AF of potable water is now used for golf
course irrigation, the Project Expansion will eliminate this use, and the total
amount of Entitlement water available for reassignment is 175 AF.
IMPACT
ON STAFF/RESOURCES: MPWMD’s legal and other expenses
associated with development of this ordinance and subsequent agreements for
implementation of the project improvements are eligible for reimbursement from
the current CAWD/PBCSD Wastewater Reclamation Project.
3-A Ordinance
No. 109 As Proposed for Second Reading
3-B CEQA
Findings Related to Enactment of Ordinance No. 109
3-C May
10, 2004 Letter from Victoria A. Whitney, SWRCB
Reclamation Staff Note
5-27-04 (revised)
U:\staff\word\boardpacket\2004\2004boardpacket\20040527\PublicHrgs\03\item3.doc