Meeting Date:

September 20, 2004





David A. Berger,




General Manager

Line Item No.:




Prepared By:


Stephanie Pintar

Cost Estimate:


General Counsel Approval:  N/A

Committee Recommendation:  The Water Demand Committee reviewed this item on August 10, 2004 and recommended approval by a 2-1 vote.

CEQA Compliance:  N/A


SUMMARY:  On August 16, 2004, the Board deferred consideration of the Technical Advisory Committee’s recommendation on a common methodology for projecting long-term water needs.  The item was continued to the September meeting to allow staff time to provide more information about staffing impacts and to prepare a timeline for Board consideration, as well as to allow input on this subject from the Board and public.


The Technical Advisory Committee’s recommendation on the methodology to determine long-term water needs is to use the jurisdiction’s current General Plan build-out numbers and apply the District’s factors to determine the maximum future water needs.  There was discussion by the TAC about including a trend analysis in the calculation to more accurately account for permit activity, but the TAC (with direction from the PAC) did not choose to include that methodology.  A joint TAC/PAC meeting was held on June 1, 2004 to share the proposed recommendation with the PAC, and the governing bodies of the jurisdictions then reviewed the issue.  On August 3, 2004, the TAC met for a final time, after having received feedback from their respective governing bodies.  The final recommendation is the result of that meeting.  Detailed information about the TAC and PAC discussions is provided in the background information.


The District’s Water Demand Committee (WDC) reviewed the TAC’s recommendation at its August 10, 2004 meeting and supported the recommendation 2-1 (Minutes attached as Exhibit 10-A).  The committee asked District staff to try to prepare the water needs analysis for submission at the September 29, 2004 strategic planning session.  In addition, the committee recommended that the jurisdictions should organize their general plan projections into three or five-year increments.  Director Markey suggested that a trend analysis be prepared that would depict historic and future water needs.  She was concerned that by adopting the TAC recommended methodology, the District could be committed to fulfilling the water needs of the jurisdictions’ general plans, which may be more water than can realistically be provided to them.



RECOMMENDATION:  The Board should consider the TAC recommendation and provide direction to staff.  If the TAC recommendation is accepted as the standard for estimating future water needs, staff should be directed to contact the jurisdictions to provide the necessary figures. 


It is also recommended that the WDC be charged with recommending appropriate factors to calculate the long-term water needs.  The District currently uses fixture units converted to acre-feet for residential uses (District Rule 24, Table 1), and non-residential uses are estimated by applying grouped water use factors (District Rule 24, Table 2).  Once the committee has determined a recommendation on the factors, the TAC and PAC should be consulted.  Both their consensus and the Board’s consensus should be sought before proceeding with the calculations.  It is anticipated that this process will take no less than six months.


IMPACT ON STAFF AND RESOURCES:  The level of staff effort required to complete the calculations on the long-term water needs can be accomplished within existing resources.  However, considerable staff time will be involved with reaching consensus on the appropriate water calculation factors with the WDC, the jurisdictions and the Board.


In preparing this staff report, staff polled the TAC members as to their timing for submitting the build-out numbers.  According to the jurisdictions that responded, usable figures should be available within 60 days from the date the District makes the request.  Faster response times may be possible.


BACKGROUND:  On February 2, 2004, the Board held a workshop to consider long-term water needs.  As a result of the February 2, 2004 Board workshop (minutes attached as Exhibit 10-B), staff was directed to place a Consent Calendar item on the February 19, 2004 Board meeting agenda to request that the Technical Advisory Committee provide a recommendation on a methodology for projecting future water needs.  At the February 19, 2004 Board meeting (minutes attached as Exhibit 10-C), the recommendation was approved, and the TAC was given 90 days (until the May 27, 2004 Board meeting) to submit its recommendation.  As part of the background provided to the TAC, the following alternatives were suggested for consideration:


  1. Historical average actual use by type of use based on Cal-Am consumption reports;
  2. Use reasonable estimates based on “average” land use densities;
  3. Use maximum potential density;
  4. Limit future demand estimates to existing legal lots of records as of January 1, 1997 (the date used in the previous legal lot studies);
  5. Estimate future needs based on potential development as allowed by the current General Plans;
  6. Other alternative methods.


On March 15, 2004 as part of its discussion on near-term water supply projects, the Board again requested the Technical Advisory Committee (TAC) and Policy Advisory Committee (PAC) to make recommendations to the Board on the formula to use to determine each jurisdiction’s share of any new allocation (Minutes attached at Exhibit 10-D).  The Board also asked if there should be an MPWMD Community Reserve, and if the Federal Government should be added as a new jurisdiction.  The latter questions remain unanswered.

The TAC began reviewing alternatives for projecting long-term water needs at its April 6, 2004 meeting.  The consensus was to use each jurisdiction’s general plan as the basis for establishing water needs, with the District applying its factors to the general plan totals to calculate the water requirements.   Contemplation of actual needs versus build-out needs was also discussed, including an oral presentation by the City of Monterey staff representative on its recommendation to combine a trend analysis with the general plan build-out projections to estimate the long-term water needs.


On May 4, 2004, the TAC continued its discussion on a common methodology.  At this meeting, the TAC heard a proposal from Michael Waxer, a member of the public who had contacted several TAC members.  Mr. Waxer’s proposal suggested viewing long-term water needs from the “bottom up” versus the normal “top down.” Using the proposed Moss Landing desalination plant as the example, Mr. Waxer’s process would move away from “allocation” thinking and would develop a methodology that would be looked at like a utility, with CEQA impacts being reviewed in the General Plans of the Jurisdictions. Mr. Waxer proposed that a Project EIR and a Program EIR could be completed with this concept in mind.  Jurisdictions would determine land use needs and the District would provide the water needed to reasonably accommodate the land uses. The Project EIR would reference the total water needed for the long term, based on build-out, and the Program EIR would address an incremental process that would eventually get to build out. Two-year planning windows were suggested, with the actual production being adjusted to correspond to actual need. 


The TAC members agreed that any project should be submitted for environmental review only once. Members questioned the ability to determine what the long-term demand would be and how to present it to policy makers.  The TAC agreed that the PAC should be consulted to provide policy direction on establishing the method for determining potential long-term needs. 


A joint TAC/PAC meeting was held on June 1, 2004 to discuss the development of a common methodology to estimate future water needs.  The PAC was asked to respond to the following questions:


1.                  Does the PAC agree that the General Plan Build-Out should be the basis for long-term water needs projections?

2.                  Should this number be adjusted with a trend analysis of past permits issued?

3.                  Do the PAC and TAC want to establish a set of assumptions that will be applied to every jurisdiction’s water needs estimates (i.e. should we use only 30 percent of underdeveloped lots versus 100 percent at build-out)?

4.                  Should the TAC provide intervals (of 2-3 years) of water toward the projected build-out?


Consensus among the PAC members was that the methodology should be based on general plan build-out projections and the District’s water use factors.  The PAC members agreed to submit this recommendation to their governing bodies for consideration and then to provide direction to the TAC members. 


The following summarized remarks were made by respective jurisdictions representatives in response to the questions shown above: 


  • Pacific Grove – Supports #1 and #4.  Do not support #2 or #3. 
  • Del Rey Oaks – Supports #1 and #4.  Do not support #2 or #3.  Must take this issue to city counsel. 
  • Seaside – Supports #1 and #4.  Do not support #2 or #3. 
  • MPAD – Supports #1 and #4. MPAD provided those numbers to the District previously.
  • Carmel-by-the-Sea – It would be helpful if all PAC members present option #1 to their city counsels. 
  • Monterey – Suggested #4 at last meeting.  Chances are that the 20-year build-out growth projections will not occur.  The growth projections are not realistic.  Must take this issue to city counsel.
  • Sand CityWhat will methodology be based on for jurisdictions like Monterey County if they cannot complete their general plan?  Suggest submit your reasonable calculations to the EIR consultant and the desalination plant will be sized accordingly. Would the District be willing to take the production calculations from each agency and add another 20 to 30 percent just to be safe? 
  • Monterey County – You need to make a decision on the amount of water needed from the desalination project quickly.  The biggest argument against the project will be growth inducement.  If the water needs estimate is based on general plans, then it is based on the needs of the public and not the private sector.


On August 3, 2004, the TAC reconvened with the recommendations from the PAC and their City Councils. Monterey County, Carmel-by-the-Sea, Del Rey Oaks and the MPAD were not represented at the meeting, although Carmel had submitted its position prior to the meeting.  On a motion by Pacific Grove and second by Sand City, the TAC voted to recommend to the Board of Directors that the methodology for estimating future water needs be based on the each jurisdiction’s general plan build-out numbers, and that District staff would apply the District’s water use factors to those general plan numbers.  The City of Monterey continued to raise its concern that if the needs assessment is very high, based on general plan build-out, any water supply project sized to meet that need would be targeted for controversy in the community. 

The motion was adopted on a vote of 4 – 0.


Past Methodologies to Project Long-Term Water Needs

Different methodologies have been used by the eight jurisdictions in the District to estimate future water needs in the past.  Most recently (between 1999 and 2003), the District undertook two studies to identify water needs on (1) vacant legal buildable lots of record and (2) vacant buildable lots of record on improved parcels.  The legal lot studies used standard factors to estimate water needs for each of the jurisdictions based on vacant lots identified using aerial photos.  The planning departments of each of the jurisdictions participated in both of the studies, but the second study was not concluded due to lack of adequate orthophotography for the unincorporated areas of Monterey County. 


Prior to the legal lot study, there were at least three occasions where the District attempted to secure long-term water needs estimates from the jurisdictions.  The first occurred in February 1994, when District General Manager Jim Cofer asked the jurisdictions to provide the District with their “best estimate” of water needs (Exhibit 10-E).  The second effort, in 1992, involved EIP Associates preparation of population and housing projects for the New Los Padres Project EIR/EIS.  EIP’s estimated long-term water needs were derived from Master Plan build-out numbers and AMBAG population projections.  Finally, in January 1999, District General Manager Darby Fuerst requested current and long-term water needs from the jurisdictions (Exhibit 10-F).  No specific guidelines were provided with these requests for water estimates.


Water Allocation Program

Put simply, the MPWMD Water Allocation Program sets the maximum Cal-Am annual production limit (size of the “water pie”).  From 1980 to early 1993, the program set jurisdiction water allocations from the Cal-Am total (“slices of the pie” shared by member jurisdictions).  Since 1993, specific allocations are issued to each jurisdiction when a new source of supply is developed.  Approval of new construction and remodels by jurisdictions entails approval of an associated MPWMD water connection permit that estimates potential future water use.  The estimated water use is deducted from the jurisdiction’s water allocation by MPWMD, similar to a bank checking account.  Water connection permits are issued until there is no water left in the account.  A connection fee based on the projected water use is assessed; the majority of the fee goes to development of water supply projects to ensure a reliable supply as the community grows.  Once a permit is issued, there is usually no monitoring of actual use for individual properties.  However, the District works with Cal-Am to track residential, commercial and other water uses by jurisdiction or by area; in some cases, the District tracks individual water use. 


The Water Allocation Program is focused on the Cal-Am water system that derives its supply from the Carmel River and Seaside Basin Coastal Subareas (known as the Monterey Peninsula Water Resources System or MPWRS).  Jurisdictions within the MPWRS include the cities of Carmel-by-the-Sea, Del Rey Oaks, Monterey, Pacific Grove, Sand City, Seaside; Monterey Peninsula Airport District; and portions of unincorporated Monterey County within the District, primarily Pebble Beach, Carmel Highlands, Carmel Valley and portions of the Highway 68 corridor.


Water Allocation Program History

MPWMD Ordinance No. 1 was adopted in September 1980 to establish interim municipal water allocations based on existing water use by the jurisdictions.  Resolution 81-7 was adopted in April 1981 to modify the interim allocations and incorporate projected water demands through the year 2000.  Under the 1981 allocation, Cal-Am’s annual production limit was set at 20,000 acre-feet (AF), based on average hydrologic conditions; no evaluation under the California Environmental Quality Act (CEQA) was performed at that time.


In 1987, the city of Carmel-by-the-Sea sued the District over the Water Allocation Program.  A court-ordered settlement required preparation of an Environmental Impact Report (EIR) on the program.  On November 5, 1990, the MPWMD Board certified the Water Allocation Program Final EIR, adopted CEQA Findings, and passed a resolution that set Option V as the new water allocation limit.  Option V resulted in an annual Cal-Am production limit of 16,744 AF, based on dry-year conditions.  The Water Allocation Program EIR determined that, even though Option V is the least damaging alternative of the five options analyzed, production at this level may result in significant, adverse, environmental impacts that must be mitigated.  Thus, the Board adopted a "Five-Year Mitigation Program for Option V" and several general mitigation measures.  The Five-Year Mitigation Program formally began in July 1991 with the new fiscal year. To date, as part of the annual budget approval process, the District Board has voted to continue the program because of continued pumping impacts to the environment.


Ordinance No. 52 was adopted in December 1990 to implement the District’s Water Allocation Program, modify the resource system supply limit, and to temporarily limit new uses of water until a new water supply source was developed.  The ordinance stemmed directly from the certification of the EIR the previous month.  As a result of Ordinance No. 52, a moratorium on the issuance of most water connection permits within the District was established for a 28-month period.  Adoption of Ordinance No. 52 formally reduced Cal-Am’s annual production limit to 16,744 AF.


Ordinance No. 70 was adopted in June 1993 to modify the resource system supply limit, establish a water allocation for each of the jurisdictions within the District, and end the moratorium on the issuance of water connection permits.  Adoption of Ordinance No. 70 was based primarily on development of the Paralta well in the Seaside Groundwater Basin and increased Cal-Am’s annual production limit to 17,619 AF.  More specifically, Ordinance No. 70 allocated 308 AF metered sales of water to the jurisdictions and 50 AF to a District Reserve for regional non-profit projects with public benefit.  Paralta well production capacity of 385 AF was set aside as a community drought reserve in addition to 230 AF to address the deficit that was calculated at that time.   (The deficit referred to the 230 AFA needed to serve the connections that were permitted in the 1987-1990 period while the Allocation Program EIR was being prepared.) A significant ramification of Ordinance No. 70 was that tracking of water use within a jurisdiction focused solely on the jurisdiction’s share of the 308 AF from the Paralta well rather than the jurisdiction’s original total water allocation amount.


Ordinance No. 73 was adopted in February 1995 to eliminate the District Reserve and allocate the remaining water equally among the eight jurisdictions.  Of the original 50 AF that was allocated to the District Reserve, 34.72 AF remained and were distributed equally (4.34 AF each) among the jurisdictions.


Ordinance No. 74 was adopted in March 1995 to allow the reinvestment of toilet retrofit water savings on single-family residential properties.  The reinvested retrofit credits must be repaid by the jurisdiction from the next available water allocation and were limited to a maximum of 10 AF.  This ordinance sunset in July 1998, but was immediately reinstated via Ordinance No. 90 (see below).  The following jurisdictions borrowed 12.43 AF through this program:


Jurisdiction                             AF Used                       


                                    Monterey                                 0.622 AF

                                    Pacific Grove                            3.587 AF

                                    Seaside                                    0.091 AF

County of Monterey                 8.130 AF


Ordinance No. 75 was adopted in March 1995 to allow the reinvestment of water saved through toilet retrofits and other permanent water savings methods at publicly owned and operated facilities.  Fifteen percent of the savings were set aside to meet the District’s long-term water conservation goal and the remainder of the savings was credited to the jurisdictions allocations.  This ordinance sunset in July 1998, but was immediately reinstated via Ordinance No. 91 (see below).


Ordinance No. 83 was adopted in April 1996 and conditionally set Cal-Am’s annual production limit at 17,621 AF and the non-Cal-Am annual production limit at 3,046 AF.  The modification to the production limit was made based on an agreement by a non-Cal-Am water user to permanently reduce annual water production from the Carmel Valley Alluvial Aquifer in exchange for water service from Cal-Am.  As part of the agreement, 15% of the historical non-Cal-Am production was set aside to meet the District’s long-term water conservation goal.


Ordinance No. 87 was adopted in February 1997 as an urgency ordinance establishing a community benefit allocation for the planned expansion of the Community Hospital of the Monterey Peninsula (CHOMP).  Specifically, a special reserve allocation of 19.60 AF production was created exclusively for the benefit of CHOMP.  With this new allocation, Cal-Am’s annual production limit was increased to 17,641 AF and the non-Cal-Am annual production limit remained at 3,046 AF.


Ordinance No. 90 was adopted in June 1998 to continue the program allowing the reinvestment of toilet retrofit water savings on single-family residential properties for 90 days following the expiration of Ordinance No. 74.  This ordinance sunset in September 1998.


Ordinance No. 91 was adopted in June 1998 to continue the program allowing the reinvestment of water saved through toilet retrofits and other permanent water savings methods at publicly owned and operated facilities.


Ordinances No. 90 and No. 91 were challenged for non-compliance with CEQA and nullified by the Monterey County Superior Court in December 1998.


As explained below, it is notable that limits on Carmel River diversions imposed by SWRCB Order WR 95-10 in 1995 and Seaside Basin production targets identified by MPWMD have limited actual allowable Cal-Am annual production to 15,285 AF.  This quantity effectively supercedes all allocation amounts described above. 


Current Water Allocation Status

Each month, the MPWMD Board packet contains an information report of the amount of water available to member jurisdictions and other specific recipients. The most recent report through August 2004 (Exhibit 10-G) indicates that there are over 150 AF available to jurisdictions.  The “Paralta Allocation” refers to Ordinance No. 70 described above.  The “Pre-Paralta” figures refer to water permits that were cancelled after Ordinance No. 70 was adopted in 1993.  In addition, there are quantities earmarked for specific projects or areas, based on previous contracts, ordinances or litigation.  The largest involves water associated with the Carmel Area Wastewater District/Pebble Beach Community Services District Wastewater Reclamation Project, which is commonly referred to as the “Pebble Beach Reclamation Project” (see below). 


It is notable that many jurisdictions have determined they have no water to allocate, while District records indicate an available supply.  The difference is due to different stages within the planning process at which the jurisdiction and the District debit the jurisdiction’s allocation “account” for a specific project.  A jurisdiction may also choose to hold water aside for specific projects, such as a major redevelopment project.  The jurisdiction debits its water account early in the planning process, when an application is received.  The District debits water from a jurisdiction’s account when a water connection permit is issued, which is one of the last approvals before a building permit is issued.  Many months (or years) can pass for a project to move through the planning process.  Using a banking analogy, the jurisdiction writes a “check” for a project based on its in-house allocation balance, and the District (serving as the “bank”) debits the jurisdiction account only when the “check is cashed.”  Each jurisdiction manages its water allocation, and therefore the jurisdiction may be “out of water” while the District’s information shows that water is still available.


A total of 380 AF metered sales is guaranteed under contract for designated properties within Del Monte Forest due to the Pebble Beach Reclamation Project.  This water is referred to as “water entitlements” and is recognized as a special class of supply by the SWRCB.  To date, about 23 AF have been used, leaving about 357 AF. 



10-A    August 10, 2004 Water Demand Committee Minutes

10-B    February 2, 2004 Board Workshop Meeting Minutes

10-C    February 19, 2004 Regular Board Meeting Minutes

10-D    March 15, 2004 Regular Board Meeting Minutes

10-E    February 23, 1994 Letter from Jim Cofer, Regarding Ten-Year Water Needs Estimate

10-F     January 25, 1999 Letter from Darby Fuerst, Regarding Current and Future Jurisdictional Water Needs

10-G    Monthly Allocation Report, August 31, 2004