Meeting Date:

February 24, 2005





David A. Berger,




General Manager

Line Item No.:


Prepared By:

Henrietta Stern

Cost Estimate



General Counsel Approval:  Yes

Committee Recommendation:  AdHoc Committee supports approval

CEQA Compliance:  EIRs certified by Monterey County in 1994, 1995, and 1996


SUMMARY:  The Board will consider whether or not to approve Application #20041001CWW (Exhibit 13-A without attachments) submitted by the Cañada Woods Water Company to consolidate two existing Water Distribution Systems (WDS) as follows: 


Ø     Cañada Woods WDS, most recently amended on July 21, 2003 (Board approval date) via MPWMD Permit #M03-01 (signed July 9, 2004); and


Ø     Monterra Ranch Mutual Water Company WDS, last revised on March 20, 2000 (no permit number).


For consolidating the existing permits, this new entity will be known as the Cañada Woods Water Company Water Distribution System (CWWCWDS) and will be addressed by MPWMD Permit #M05-01.   It would serve the Tehama Subdivision (the combined area formerly known as Cañada Woods, Cañada Woods East and Cañada Woods North) and the Monterra Subdivision (map shown as Exhibit 13-B).   The consolidated CWWCWDS would be consistent with the service areas previously approved by the California Public Utilities Commission (CPUC) and Monterey County Health Department (MCHD) for these developments.  For non-potable and reclaimed water facilities and uses not explicitly addressed in the existing permits, a new entity will be known as Cañada Woods Water Company Non-Potable and Reclaimed Water Distribution System (CWWCNPRWDS) for the purposes of MPWMD Permit #M05-02.   


The consolidation of the two systems is an outgrowth of Board direction on June 21, 2004, responding to a request by the applicant to reconsider Condition #19 of Permit #M03-01.  The Board formed a subcommittee (Directors Foy and Markey) to work with MPWMD staff, General Counsel, the applicant and their legal counsel to develop a mutually acceptable solution to differing viewpoints about the applicability of District regulations pertaining to the potable and non-potable/reclaimed components of the existing water systems.  Application #20041001CWW, submitted September 30, 2004, emphasizes the Cañada Woods system based on wells in the Carmel Valley Alluvial Aquifer (CVAA or alluvium), and questions whether a permit is needed for the non-alluvial and reclaimed components, based on the applicant’s assertion that changes to MPWMD Rule 20 enacted in year 2001 did not apply to pre-existing (“grandfathered”) components of the non-potable and reclaimed systems.  After several Ad Hoc Committee meetings and applicant-to-staff information exchanges in October 2004 through early February 2005, District staff suggested the following plan of action, with which the applicant concurs and the Ad Hoc Committee supports:


Ø     Two permits would be issued for the systems serving the Tehama/Monterra area: Permit #M05-01 for the CWWCWDS would primarily address alluvial wells in Carmel Valley along with domestic wells drawing from the Monterey Peninsula Upland area.  Permit #M05-02 for the CWWCNPRWDS would address the non-potable (non-alluvial) wells in the Carmel Valley Upland area along with the reclaimed wastewater system, including tabulation of pre-existing system components.


Ø     Each permit would come with its own set of Findings of Approval and Conditions of Approval. The conditions for Permits #M05-01 and #M05-02 would consolidate and update all previous applicable permit conditions.  The District would clarify the reporting requirements to ensure adequate annual reports by the applicant.  Permit #M05-01 would specify the previously approved water production and connection limits associated with the Cañada Woods and Monterra Ranch Mutual WDS.


Ø     An MPWMD determination that the non-potable “High Well-2” is exempt from the current WDS permitting process is contingent on the applicant taking two immediate actions: (1) apply to Monterey County for a permit to destroy High Well-1 no later than March 25, 2004; and (2) complete the well destruction process within 90 days of receiving a Monterey County well destruction permit.  A memorandum from the applicant’s engineer dated January 6, 2005 states their intent to destroy High Well-1 because the casing has failed.  Proper abandonment of High Well-1 will allow High Well-2 to be considered a “replacement well” in compliance with District Rule 11.    Permit #M05-02 includes the above requirements.


Ø     MPWMD will comply with the California Environmental Quality Act (CEQA) as a responsible agency, and will rely on the environmental documentation previously prepared by Monterey County on the Cañada Woods (Tehama) and Monterra Subdivisions.  Exhibit 13-C is a February 3, 2005 cover sheet for environmental documents provided to the Board for review prior to this February 24, 2005 hearing.  The documents are available at the District office for public review. 


This application involves extensive documentation and correspondence, and is related to previous actions by the MPWMD Board and other regulatory entities.  All files associated with the current application as well as previous MPWMD action on the Cañada Woods and Monterra WDS (notably the Board’s June 21, 2004 and July 21, 2003 actions), are available for review at the District office.  Additional information is provided in the “Background” and “Discussion” sections below.


RECOMMENDATIONS:  District staff recommends that the Board take the following actions:


Ø     Adopt the MPWMD Findings of Approval for Application #20041001CWW for Permits #M05-01 and #M05-02 shown as Exhibits 13-D and 13-E with specific reference to Finding #19, District compliance with CEQA as a Responsible Agency.  In adopting the Findings, the Board confirms that it has reviewed the environmental documents listed in Exhibit 13-C.  


Ø     Approve Application #20041001CWW and authorize issuance of MPWMD Permits #M05-01 and #M05-02 with the Conditions of Approval specified in Exhibits 13-F and 13-G, respectively.  These include required conditions as specified in MPWMD Rule 22-D as well as several special conditions for each permit.  For example, Permit #M05-01 has extensive reporting requirements; Permit #M05-02 requires the applicant to apply to Monterey County for a permit to destroy High Well-1 no later than March 25, 2004 and complete the well abandonment process within 90 days of receiving the Monterey County well destruction permit. 


BACKGROUND:  The following paragraphs provide background relevant to the application.  Cited documents are available for review at the District office.


Cañada Woods WDS

The Cañada Woods WDS permit was first approved by the MPWMD Board on May 15, 1995.  The permit conditions did not specify the type of water source.  At that time, the wells drawing from the alluvial aquifer were permitted, though future delivery of potable, non-potable and reclaimed water was anticipated.  Since then, additional wells were drilled in the Carmel Valley Upland area for various uses.  On July 21, 2003, the District Board approved Application #20021031CAN for a service area expansion, and authorized Permit #M03-01 along with 27 Conditions of Approval.  Condition #19 required submittal of a future permit application for the non-alluvial, non-potable and reclaimed components of the system. 


In May 2004, the applicant requested a reconsideration of Condition #19, which the Board addressed on June 21, 2004.  As noted above, the Board formed an Ad Hoc Committee, and directed that it work with staff and the applicant to resolve concerns.  Permit #M03-01 was finalized on July 9, 2004 with the written understanding (“Acceptance of Permit Conditions”) signed by the applicant on July 12, 2004, that a consolidated application for the Cañada Woods and Monterra systems would be submitted by September 30, 2004, based on the physical realities of the interconnected distribution systems and consistent with permits issued by State and County regulators.


Application #20041001CWW was submitted on September 30, 2004, and included Cañada Woods WDS alluvial wells combined with Monterra WDS non-alluvial wells (excluding wells in the Cañada Woods North area; see map shown as Exhibit 13-B).   The applicant formally noted their understanding that Cañada Woods non-alluvial wells and the reclaimed water system do not need a WDS permit because they were completed prior to the Rule 20 amendment effective date, a view that was not shared by District staff and General Counsel after detailed analysis.  Factual information subsequently provided by the applicant on the dates of system facility installation and a review of District ordinances led staff to the conclusion that many parts of the non-potable system may be considered pre-existing (“grandfathered”).  An exception is a reclaimed water storage pond that will be subject to Permit #M05-02.  


Water rights have been established by the applicant for up to 118.44 acre-feet per year (AFY) of alluvial diversions from the Carmel River pursuant to amendments to permits issued by the State Water Resources Control Board (SWRCB).  MPWMD Permit #M03-01 allows up to 150 connections.  The Carmel Valley alluvium provides water supply to the Tehama subdivision area, and the net production from this source must remain within the Carmel River watershed.  The potable system includes a water treatment plant, fire service mains, and various water transmission, metering and storage facilities.  Detailed maps are on file at the District office.  The potable system also includes a “two-way dual metering” system connected to storage facilities located in the upper Tehama Subdivision area (formerly called Cañada Woods North) to be shared with the Monterra Ranch potable system.  The “two-way dual metering” system is intended to ensure that the quantity of water extractions from the alluvial aquifer approved by the SWRCB remains within the Carmel Valley watershed.   The Cañada Woods WDS is not served by California American Water (Cal-Am), except for two pre-existing residential and commercial connections. 


Untreated alluvial water is used for irrigation of organic vegetables and flowers on 37 acres in Carmel Valley.  Non-potable supply from Carmel Valley Upland groundwater is extracted by various hillside wells.  Non-potable supply is used for irrigation of native plants, common area landscapes, roadways and construction activities.  Non-potable supply is also used for irrigation of the Tehama golf course located in the Monterra Ranch WDS service area.  It is intended that the non-potable well supply will be reduced over time as more homes are built, and the volume of the reclaimed wastewater from the Tehama/Monterra homes increases to be used for irrigation.  Reclaimed supply is currently about 15 AFY, with an estimated total of 112 AFY at build out. 


Reclaimed supply is derived from treated wastewater generated within the Tehama (Cañada Woods) and Monterra Ranch developments.  Wastewater is collected, treated and pumped to storage ponds. Conditions imposed by Monterey County require that there be storage capacity adequate to store up to 120 days of reclaimed water during periods of wet weather.  To meet this requirement, two storage ponds – one constructed in 1999 with a capacity of 5 million gallons, and a second constructed in 2004 with a storage capacity of 3.3 million gallons – are in place.  The first pond is no longer used to meet the Monterey County requirement, but instead is used to store reclaimed and non-potable well water for golf course irrigation, and is a prominent water feature of the golf course.


Currently, most of the service area is undeveloped, except for agricultural uses, some existing residential and commercial connections served by Cal-Am, and infrastructure for proposed residential development and the potable water system.   Permits have been issued by the SWRCB and California Public Utilities Commission (CPUC); a final MCHD permit is pending.   Future planned uses include estate homes, caretaker or senior citizen units, employee apartment units, and a limited number of recreational and commercial uses.  At build out, a total of 88 homes are planned for the Tehama Subdivision area. 


In the most recent reporting year 2004, total water production reported for the Cañada Woods WDS was 220 AF, including 136 AF alluvial production, 84 AF non-alluvial production and 0 AF of reported reclaimed water production.  No potable use or active connections were in place as all necessary permits have yet to be issued. 


Monterra Ranch Mutual Water Company WDS

The Monterra Ranch WDS permit was first approved by the MPWMD Board in February 1990 and was finalized in February 1991 with 14 conditions of approval.  This permit was amended in January 1996, and most recently on March 20, 2000 to include a production limit of 203.10 AFY and a limit of 286 connections.  The permit conditions include submittal of detailed annual reports, which are received by the Board each year. The Monterra Ranch WDS supply source is percolating groundwater in the Monterey Peninsula Upland area, comprised of non-alluvial “hard rock” formations.  Similar to the Cañada Woods system described above, the Monterra system includes water production, treatment, transmission and storage facilities for potable, non-potable and reclaimed water use. Detailed maps are on file at the District office.  Inter-connections with the Cañada Woods system exist as described above, and also with the main Cal-Am system as described in the Monterra Ranch WDS permit.  The Cal-Am interconnection has not been used to date.


The Monterra Subdivision includes 42 units of moderate-income housing as well as 18 market-rate housing connections to date.  At build out, a total of 213 residential connections are planned, including the 42 inclusionary housing connections, along with 11 associated accessory connections. 


In the most recent reporting year 2004, total water production in the Monterra Ranch WDS was 146 AF, including 41 AF for potable uses.  Most use was for non-potable irrigation or construction. 


Request to LAFCO for Detachment of Tehama/Monterra Area

Members of the Ad Hoc Committee requested an update on the March 2004 application to the Monterey County Local Agency Formation Commission (LAFCO) requesting that the Tehama/Monterra area be detached from the MPWMD boundary.  On July 1, 2004, the applicants wrote LAFCO requesting that consideration of the detachment be delayed to enable resolution of issues of concern.  The applicant has indicated that they will write a letter in February 2005 formally requesting that the detachment request be withdrawn.


DISCUSSION:  The following paragraphs address several aspects of the staff recommendation to approve the application.


Findings of Approval

The Findings of Approval (Exhibits 13-D and 13-E) are based on evidence provided in the application materials, particularly the extensive supporting documents on file at the District office.  Staff believes the application meets the criteria and minimum standards set by District Rule 22.  Pertinent information includes certified environmental documents, technical studies and reports, technical memoranda and maps, correspondence between MPWMD staff and the applicant, water rights approvals, public utility approvals, as well as conditions to be imposed on the approved application (Exhibits 13-F and 13-G).  Based on the certified EIRs for the Cañada Woods, Cañada Woods East, Cañada Woods North and Monterra Ranch projects, the supporting documents in the hearing record, and CEQA compliance for the SWRCB water rights approvals for the Cañada Woods project, MPWMD approval of the application to consolidate previous permits and create the

CWWCWDS and CWWCNPRWDS is not anticipated to result in a significant adverse effect on the Carmel River or other water resource.


Conditions of Approval -- Production and Connection Limits

The annual water production limit (known formally as the “system capacity”) and the connection limit (known formally as the “expansion capacity limit”) for the consolidated CWWCWDS (Permit #M05-01) are based on current approvals for the Cañada Woods and Monterra Ranch WDS.  No additional production or connections are contemplated.  No water production or connection limit is proposed for the CWWCNPRWDS (Permit #M05-02) as described below. 


Permit #M05-01:  As described in Conditions #3 proposed for Permit #M05-01 (Exhibit 13-F), the combined CWWCWDS would entail a maximum production of 321.54 AFY and a maximum of 436 connections.    The production limit is based on the following components:


Ø     Cañada Woods WDS alluvial source: 118.44 AFY maximum (pursuant to SWRCB permit);

Ø     Monterra Ranch WDS upland source: 203.10 AFY maximum (pursuant to existing Monterra Ranch WDS permit from MPWMD).


The Cañada Woods limit on use of water from the Carmel River Alluvial Aquifer is based on previous action by SWRCB, most recently on May 2, 2003.  The SWRCB amended Permits 20831 and 20832 issued to the applicant to expand the place of use and points of diversion as well as to allow a maximum diversion amount of 118.44 AFY from the alluvial aquifer.  This limit can be increased up to 160 AFY in accordance with a condition requiring certification by the Chief of the Division of Water Rights that an acceptable water supply project has been constructed which produces water to offset the Cal-Am deficit identified in SWRCB Order WR 95-10.    Under the amended SWRCB permits, water from the Carmel Valley alluvium is allowed to be used only on Tehama lots or portions of Tehama lots within the Carmel River watershed.  The SWRCB does not address non-alluvial water sources.


The consolidated CWWCWDS connection limit of 436 connections is based on the following components that are part of existing permits:


Ø     Cañada Woods WDS: 150 connections maximum;

Ø     Monterra Ranch WDS: 286 connections maximum.


Permit #M05-02:  The Conditions of Approval proposed for Permit #M05-02 (Exhibit 13-G) for the CWWCNPRWDS do not include production or connection limits for wells that have been determined to be pre-existing or were previously permitted without specific limits.  Although District General Counsel determined these wells and other pre-existing components may be considered as exempt from District regulations, these facilities have been inventoried and included in the permit to create a factual baseline of information for later use.  Should any of these exempt components of the CWWCNPRWDS be changed in the future, an amendment to the District permit would be needed.  These exemptions do not apply to annual well production reporting requirements (MPWMD Rule 56), which remain in effect.  Attachment 3 of the Conditions of Approval provides a list of the pre-existing facilities (Exhibit 13-G).   The 3.3-million-gallon reclaimed water storage pond is covered by this MPWMD permit because it was completed after Rule 20 was amended in 2001 and is therefore not exempt.  


A January 2005 analysis conducted by the applicant estimates that total non-potable water demand is expected to vary from 234 to 368 AFY, which is well within the calculated sustainable recharge of the upland areas in which the wells are located (385 to 495 AFY).  As more homes are built, thereby producing wastewater available for treatment and reuse, the reclaimed water supply will reach its estimated maximum of 112 AFY.  Thus, non-potable well production is expected to be reduced over time, eventually producing between 122 and 256 AFY. 

Other Conditions of Approval

For Permit #M05-01 (Exhibit 13-F), Conditions #6 through #22 are included consistent with MPWMD Rule 22-D governing approval of water distribution systems.  Similarly, Conditions #6 through #11 comply with Rule 22 for Permit #M05-02 (Exhibit 13-G).  Special conditions for both permits are included that incorporate and/or update previous conditions that have been imposed for the Cañada Woods and Monterra WDS, so all are in one current permit.  A notable special condition for Permit #M05-01 is Condition #23, which specifies extensive monitoring and reporting requirements for the CWWCWDS which expand on current requirements for the Monterra Ranch WDS.  A notable special condition for Permit #M05-02 is Condition #13, which requires timely destruction of High Well-1 in order for High Well-2 to be considered a pre-existing facility.



Public notice has been provided no later than 10 days prior to this public hearing in several ways, including: (1) mailed notices to property owners within 300 feet of the Cañada Woods and Monterra Subdivision boundaries; (2) posted notices within and along the perimeter of the Cañada Woods and Monterra Subdivision boundaries; (3) posted notice at the District office; (4) notice of the public hearing to recipients of District agendas for the February 24, 2005 meeting; (5) notice of February 24, 2005 public hearings in The Herald; and (6) posting of the February 24, 2005 agenda and staff note materials on the District website.




13-A    Application #20041001CWW logged on October 1, 2004 (without attachments)

13-B    Location map showing Cañada Woods and Monterra Ranch service areas

13-C    Environmental documents dated February 3, 2005 transmitted to MPWMD Board

13-D    Draft Findings of Approval for Application #20041001CWW, Permit #M05-01

Attachment 1      List of Assessor’s Parcel Numbers in service area

                  Attachment 2      Map of CWWCWDS Service Area

                  Attachment 3      List of environmental documents dated February 3, 2005

13-E    Draft Findings of Approval for Application #20041001CWW, Permit #M05-02

Attachment 1      List of Assessor’s Parcel Numbers in service area

Attachment 2      Map of CWWCNPRWDS Service Area

Attachment 3      List of pre-existing facilities for CWWCNPRWDS

            Attachment 4      List of environmental documents dated February 3, 2005

13-F    Draft Conditions of Approval for Application #20041001CWW, Permit #M05-01

Attachment 1      List of Assessor’s Parcel Numbers in service area

Attachment 2      Map of CWWCWDS Service Area

Attachment 3      Map of wells in Carmel River Alluvial Aquifer           

13-G   Draft Conditions of Approval for Application #20041001CWW, Permit #M05-02

                  Attachment 1      List of Assessor’s Parcel Numbers in service area

                  Attachment 2      Map of CWWCNPRWDS Service Area

                  Attachment 3      List of pre-existing facilities for CWWCNPRWDS