ITEM:		ACTION ITEMS
16.	PROVIDE POLICY DIRECTION FOR EIR ON MPWMD AQUIFER STORAGE AND RECOVERY PROJECT
Meeting Date:			March 21, 2005	Budgeted:	N/A
From:			David A. Berger,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Henrietta Stern	Cost Estimate:	N/A
General Counsel Approval: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: After receiving an update on the MPWMD Seaside Basin Aquifer Storage and Recovery (ASR) Project, the Board will provide policy direction on the scope of study for the ASR Environmental Impact Report (EIR), based on comments received on a Notice of Preparation (NOP) circulated in December 2004. At its February 24, 2005 meeting, the Board received the Scoping Report that summarized written and oral comments on the NOP. The Board was advised that: (1) staff/consultant follow-up was needed on some comments, including meetings with key agencies; and (2) some comments raise policy issues about the potential need to amend the EIR scope of study, preparation timeline, and consultant contract limits. This item will focus on new information received since February 24, uncertainties that impact the EIR process, recommended action by staff, and potential impacts to the EIR timeline. The Board will consider consultant contract changes on April 18, 2005. Please see the “Background” and “Discussion” sections for more detailed information.

At the recommendation of the U.S. Army, Environmental Management Division, District staff and consultants met with representatives from the Army, City of Seaside, City of Del Rey Oaks, and California American Water (Cal-Am) on February 25, 2005 to (1) clarify infrastructure plans to avoid conflicts, with emphasis on pipeline alignments and well locations; and (2) better understand the federal and local permitting process for the Phase 1 ASR project. As a follow-up, District staff and consultants met with the Cal-Am engineering consultant (RBF Consulting) on March 2, 2005 to: (1) discuss the technical details of the respective ASR concepts, including similarities and differences; (2) share the results of recent technical studies which may improve project design; and (3) identify ways to avoid duplicated study efforts and enhance information sharing. At this writing, a meeting with the City of Seaside, RBF and MPWMD is planned to further address permitting needs for both the Phase 1 ASR project.

The Phase 1 ASR concept envisions a maximum diversion of 2,022 AFY from the Carmel River and a maximum extraction from the Seaside Basin of 1,690 AFY in a wet year. Average values would be lower and depend on long-term weather conditions. The Phase 1 values were based on 2004 or previous information, and are subject to change in the EIR based on recent technical studies and planned computer modeling.

Approval from the State Water Resources Control Board (SWRCB) is needed for a long-term ASR project that diverts excess winter flow from the Carmel River. The District’s water rights Petitions for Change submitted to the SWRCB identifies 7,300 AFY maximum diversion from the river in a wet year (i.e., 20cfs diverted every day in the December 1 through May 31 period). This amount is larger than the Phase 1 project. A future EIR and Petition would be needed to build a larger project (i.e., Phase 3 ASR) to divert the full 7,300 AFY amount.

RECOMMENDATIONS: The Board should confirm or amend staff’s recommendations for the following six policy issues, which are based on the NOP comments described at the February 24, 2005 Board meeting, information gleaned at the February 25 interagency and March 2 MPWMD/Cal-Am/RBF meetings, and follow-up conversations and e-mails:

Issue 1:	Should the District’s EIR be amended to focus only on Phase 1 ASR (one additional well at existing test site within the next 1-2 years) and not discuss potential future Phases 2 and 3 at this time?
Staff Suggests:	Yes. Based on meetings with federal and local agencies, consultation with the State Water Resources Control Board (SWRCB), and several uncertainties about the future location of General Jim Moore Blvd., staff believes the District EIR should focus only on Phase 1 at this time. Once more concrete information is known about the land use setting in the area of potential ASR facilities, future ASR phases can be defined and addressed at the project level in a future EIR. The Phase 1 project description should be changed based on new information that was not available when the NOP was issued in December 2004 (see Issue #6 and the “Discussion” section below). Also, to avoid duplication of effort and reduce costs, the District EIR should, as much as possible, use information developed by Cal-Am/RBF for their Proponent’s Environmental Assessment (PEA). The PEA is scheduled for completion and submittal to the California Public Utilities Commission (CPUC) in June 2005.
Issue 2:	Should consultant contracts be amended to include National Environmental Policy Act (NEPA) compliance concurrent with the CEQA document, rather than subsequent to the completion of the EIR?
Staff Suggests:	Yes. Discussions with the U.S. Army indicate this would be the most efficient way to obtain federal permits needed for the Phase 1 ASR project. NEPA public notice and an Environmental Assessment would be the first steps. If the ASR project is limited to Phase 1, an Environmental Impact Statement (EIS) potentially may not be required. The contracts with Jones & Stokes Associates (JSA) and Padre Associates (Padre) should be considered on April 18, 2005.
Issue 3:	Should the ASR project purpose be amended to include water augmentation, which also entails an expanded alternatives analysis?
Staff Suggests:	No. The immediate need for ASR as an essential tool to manage and protect the Seaside Basin and help reduce pumping impacts to the Carmel River should not be jeopardized by linking ASR to large, long-term, complex project combinations that will take extensive time to analyze. The EIR should be focused to facilitate timely approval and construction of Phase 1. It is notable that even the proposed Phase 3 ASR is too small to fully comply with SWRCB Order 95-10; thus, water for new connections and remodels would not be available.
Issue 4:	Should the MPWMD alter its ASR project description to meld with the ASR component of Cal-Am’s Coastal Water Project (CWP), including a variety of changes to the project description and technical analysis?
Staff Suggests:	No (with caveat). The MPWMD should focus on rapid implementation of the Phase 1 ASR project given that potential approval and construction of the CWP is many years away. However, to reduce costs to ratepayers, the District’s ASR project should be compatible with the Cal-Am system, including the proposed CWP facilities, whenever possible. Currently, the MPWMD and Cal-Am ASR proposals differ somewhat. However, recent meetings and technical information exchanges between MPWMD and Cal-Am consultants are resulting in changes to both the MPWMD and Cal-Am ASR concepts, based on recent engineering studies performed by RBF and water quality studies performed by MPWMD. The exchange of the best available scientific information is improving our mutual understanding of the system, and resulting in more similar and/or compatible project descriptions.
Issue 5:	Should the EIR include detailed technical studies required for state and federal permits?
Staff Suggests:	No. Detailed studies (such as a Source Water Assessment required by the Department of Health Services) are beyond the scope of an EIR, and should occur after the EIR as part of the permitting process. Some of the recommended studies were relevant to Phase 2 and 3, and may not be needed if only Phase 1 is considered. Work on these studies could begin concurrently with the EIR, but are not required to be part of the EIR. The EIR will include all required studies under CEQA.
Issue 6:	Should the District change its project description (i.e., pipeline alignments and well facilities) due to road widening plans by the Fort Ord Reuse Authority (FORA)?
Staff Suggests:	Yes and no. New information and detailed drawings of potential new road alignments for General Jim Moore Boulevard (GJM) in the vicinity of the ASR project recently became available; an EIS is scheduled for release by FORA in Spring 2005 that will contain more comprehensive information. District staff and consultants concur that the Phase 1 ASR pipeline should be an above-ground pipeline on the west side of GJM for near-term use until the final road alignment is selected by FORA. This is the same pipeline Cal-Am plans to construct in year 2005. Once the road alignment is set, a compatible long-term, below-ground pipeline can be designed and subjected to environmental review. The District should not change the Phase 1 well location from that described in the NOP. However, alternative sites will be discussed in the EIR, as required by CEQA and NEPA. It is notable that current FORA drawings of the proposed GJM expansion show the 4-lane road running through the District’s Santa Margarita test well site despite a 50-year easement to MPWMD from the U.S. Army and a Use Permit from the City of Seaside that runs with the land with no termination date. District staff believes changes to the GJM road alignment can be made and should be considered by FORA. This is a complex matter that is addressed further in the “Discussion” section.

Rationale for Staff Recommendations

The overriding consideration by staff is the need to continue the District’s successful ASR Test Program with long-term water rights and initiate the Phase 1 ASR project as soon as possible, due to its critical role in water resources management to: (1) protect both the Carmel River and Seaside Basin; and (2) help ensure adequate water supply for existing water customers while complying with Carmel River diversion limits set by SWRCB Order 95-10. Obtaining long-term water rights (rather than the current annual temporary SWRCB permits) is essential, and requires an EIR. The SWRCB staff confirmed that the current MPWMD Petitions for Change can be applied to a smaller Phase 1 ASR project. (It is notable that expansion to Phase 2 or 3 would require new Petitions for Change if the EIR is limited to Phase 1).

It is staff’s understanding that Cal-Am supports these goals based on our mutual experience in Summer 2004, when the District’s Santa Margarita Test Injection Well served a vital role as a “an emergency back-up” well for Cal-Am after the loss of the Paralta Well. The existence of the test well reduced the need to pump additional Carmel River wells and enabled compliance with Order 95-10 diversion limits. In addition, Cal-Am consultants have advised the District that the size of a regional desalination project could be reduced (i.e., built at less cost) if an ASR project is operational prior to construction of a desalination project.

The staff desire to not jeopardize progress on the District’s successful ASR program is the driving force behind the recommendations to: (1) focus on Phase 1 only in the EIR at this time; (2) move forward with NEPA compliance for Phase 1 ASR; (3) “de-link” the clearly defined, near-term, Phase 1 ASR project from future concepts, including the CWP, that include significant uncertainty due to evolving regional land use planning and water supply issues; and; (4) retain the identified ASR goal of “basin management,” rather than “water augmentation.”

The District budget situation and a desire for efficient use of public funds were also considered by staff. Staff believes that a loss of time to prepare the Draft EIR (e.g., waiting for CWP environmental information in the PEA to be available in June 2005) would be offset by the ability to use studies performed by Cal-Am consultants, rather than duplicate (and pay for) those same efforts using District consultants. The impact of retroactively incorporating NEPA into the project schedule could also result in delay, but the specific impact cannot be assessed at this writing. It is envisioned that initial noticing under NEPA can begin in early May 2005, and that there would be some opportunity to “catch up” to the CEQA process while waiting for the PEA information in June 2005. Staff will provide revised schedule estimates as feasible at the March 21, March 31 and April 18, 2005 Board meetings.

The focus on Phase 1 for the EIR does not mean that staff efforts on future MPWMD ASR project phases will cease. Staff will continue to share technical information with Cal-Am/RBF and others, and explore a variety of future long-term water supply options as directed by the Board.

BACKGROUND: At its October 2004 meeting, the Board authorized preparation of an EIR on the District’s ASR Project and a contract with JSA to assist the District in this effort. The NOP was released for public comment on December 13, 2004 with a deadline of January 17, 2005 (extended to January 18 due to Martin Luther King Holiday). Two public hearings to receive oral scoping comments were held on January 12, 2005. A total of 13 letters (including one e-mail) were received; a total of 11 (non-District) people attended the public hearings. At its February 24, 2005 meeting, the Board received the Scoping Report prepared by JSA that summarizes written and oral comments received on the NOP. The Board was advised that policy issues raised by the comments would be addressed at the March 21, 2005 meeting. Please refer to the February 24, 2005 Board packet for more detailed information on the NOP comments.

On February 25, 2005, there was a meeting between District staff and consultants and the U.S. Army, FORA (absent, but made pre-meeting contributions via phone and e-mail), City of Seaside, City of Del Rey Oaks, and Cal-Am staff and consultants. The meeting focus was to respond to NOP scoping comments by the U.S. Army, which encouraged interagency communication to better understand respective agency infrastructure plans and avoid conflicts. An associated topic was the immediate need for approvals of an above-ground, near-term Cal-Am pipeline to the District's Santa Margarita test well site to ensure a secure water supply in Summer 2005. A variety of issues were raised, including: (1) ongoing federal activities that affect the temporary pipeline and long-term ASR projects; (2) NEPA compliance needed for the District's long-term ASR project; (3) pipeline siting in light of planned GJM road re-alignment; (4) land use constraints to injection well locations; and (5) approvals needed from the City of Seaside, FORA and the U.S. Army. 

On March 2, 2005 technical follow-up meeting occurred between District staff and consultants and RBF. The group: (1) reviewed detailed engineering information recently conducted by RBF on the Cal-Am system that could affect the MPWMD ASR project design; (2) described MPWMD hydrogeology and water quality assessments conducted by Padre that could potentially affect assumptions used by RBF for the Cal-Am ASR proposal; (3) gained a better understanding on the similarities and differences between the MPWMD and Cal-Am ASR project descriptions; and (4) discussed ways to avoid duplicated effort by MPWMD and RBF, and facilitate timely exchange of technical information.  

DISCUSSION: A mutual understanding of the following facts and issues resulted from the February 25 and March 2, 2005 meetings, and led to the staff recommendations described above:

Ø Cal-Am must immediately coordinate with the U.S. Army and City of Seaside to enable construction of an above-ground pipeline to facilitate Cal-Am’s emergency use of the MPWMD Santa Margarita Test Injection Well in Summer 2005 to ensure a secure water supply for the community.

Ø Significant changes to the GJM road alignment from McClure to South Boundary Road are planned in the 2007-2009 timeframe, according to the FORA Capital Improvement Plan. The alignment is based on negotiations between several agencies that did not include MPWMD. FORA is currently preparing a Draft EIS on the McClure-South Boundary Road alignment. The final selected roadway alignment cannot be known at present. If not changed, the currently drawn road alignments could significantly affect the MPWMD and Cal-Am ASR pipeline alignments and ASR injection well locations. For example, current drawings show the new GJM roadway alignment going directly through the Santa Margarita Test Injection Well.

Ø The current Santa Margarita Test Injection Well is approved under a City of Seaside Use Permit that runs with the land with no expiration date. District staff envisions the ASR EIR as a means to address all pertinent environmental issues to facilitate an amended Use Permit for the Phase 1 ASR project that will be consistent with planned uses. The current injection well property is secured by a 50-year easement issued to MPWMD by the U.S. Army.

Ø The ability or willingness of the U.S. Army to issue federal permits for ASR facilities is affected by: (1) completion of studies by the U.S. Fish & Wildlife Service pursuant to the Endangered Species Act (ESA), and (2) by written approval by the City of Seaside as the designated recipient of affected federal lands. The Army is willing to facilitate the Summer 2005 emergency pipeline assuming concurrence by the City of Seaside. The Army strongly recommends initiating the NEPA process now for timely approval of the District’s Phase 1 ASR.

Ø RBF has completed detailed engineering studies that provide a significantly greater level of detail on the hydraulic limitations of the Cal-Am system than was known in the past. This information could potentially affect the MPWMD project design. RBF provided custom hydraulic modeling to MPWMD on March 11, 2005 (to be reviewed further on March 15, 2005) to help assess whether MPWMD project design changes are needed. In exchange, MPWMD will conduct a CVSIM computer run in the future for RBF and provide results of Padre’s water quality assessment to RBF; these results could affect the Cal-Am ASR project design and supporting assumptions.

Ø The fate of the Coastal Water Project, including specific infrastructure components, is uncertain.

Based on the above information, District staff and consultants concurred on the following plan of action:

Ø The proposed above-ground Cal-Am pipeline to the Santa Margarita Test Injection Well should be built in Summer 2005 along the west side of GJM.

Ø The Phase 1 ASR project should also receive water from the same above-ground pipeline in the near-term, not a permanent below-ground pipeline as described in the NOP, due to the significant uncertainty of where GJM will be located in the future. Staff envisions Phase 1 as a means to address immediate basin management issues while allowing detailed operational testing of the two-well couplet in a full-scale production setting. District staff strongly believes that all efforts should be made to preserve the current injection well site based on the expense to install, test and maintain it (over $1 million expended by MPWMD to date), and the vital contribution it makes to the community by helping to restore the depleted Seaside Basin and reduce pumping impacts to the Carmel River (thereby reducing SWRCB fines to the community, the threat of moratoria, etc.).

Ø Once the final location of the new GJM road alignments, the fate of the CWP, and more detailed land use proposals are known, a meaningful plan for Phase 2 and 3 ASR can be formulated.

Ø RBF has performed detailed biological and other studies that should not be duplicated by separate MPWMD efforts. The PEA should be completed in June 2005 and will be a valuable source of information for MPWMD due to similarities between the MPWMD and Cal-Am ASR projects. The PEA will also address alternative pipeline, injection well and infrastructure locations that could be used in the MPWMD EIR.

IMPACT ON RESOURCES: A more focused EIR limited to Phase 1 ASR will help reduce certain consultant expenses, especially for Jones & Stokes Associates (JSA). But, the addition of the NEPA component is a new task that will add roughly $10,000 to the JSA budget (subject to refinement). The NEPA review could also add roughly two months to the schedule to complete the Final EIR.

The Padre budget is not expected to substantially change by the deletion of Phases 2 and 3 from the EIR because their tasks already focus on engineering details and water quality assessments for Phase 1 ASR. Custom hydraulic modeling performed by RBF for MPWMD the week of March 7, 2005 may result in the need for Padre to develop new or alternative engineering designs, which are not in the existing contract. The goal is a project description that reflects the best available information so that analysis in the EIR itself goes more smoothly. The Board will consider amendments to consultant contracts on April 18, 2005.

The staff suggested plan of action (i.e., incorporate NEPA, revise project description, and use information from the CWP PEA) may result in a cumulative delay in completion of the Final EIR by roughly three to four months (subject to refinement), but will ultimately save money and facilitate more rapid project approval by federal, state and local authorities. The key challenge is defining the project in light of a changing technical and land use setting.

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