ITEM:		PUBLIC HEARINGS
14.	CONSIDER ADOPTION OF JANUARY THROUGH MARCH 2007 QUARTERLY WATER SUPPLY STRATEGY AND BUDGET
Meeting Date:			December 11, 2006	Budgeted:	N/A
From:			David A. Berger,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Darby Fuerst	Cost Estimate:	N/A
General Counsel Approval: N/A
Committee Recommendation: N/A
CEQA Compliance: Notice of Exemption, CEQA, Article 19, Section 15301 (Class 1)
ESA Compliance: Consistent with the September 2001 and June 2006 Conservation Agreements between the National Marine Fisheries Service and California American Water to minimize take of listed steelhead in the Carmel River, Consistent with SWRCB WR Order Nos. 95-10, 98-04, and 2002-0002.

SUMMARY: The Board will accept public comment and take action on the January through March 2007 Quarterly Water Supply Strategy and Budget for the California American Water (Cal-Am) Water Distribution System (WDS). The proposed budget, Exhibit 14-A, is based on “normal year” inflow conditions for the second quarter of the Water Year 2007 (WY 2007). Specifically, the budget utilizes monthly median inflows that are expected to be equaled or exceeded 50% percent of the time at the San Clemente Dam site. The proposed strategy and budget is designed to maximize the long-term production potential and protect the environmental quality of the Seaside Groundwater and Carmel River Basins.

Exhibit 14-A shows the anticipated production by Cal-Am for each production source. Exhibit 14-A also shows actual production values for the water year to date. Please note that the anticipated production values assume that Cal-Am annual system production will not exceed 14,789 acre-feet (AF), including 3,504 AF from the Seaside Groundwater Basin (SGB) and 11,285 AF from the Carmel River Basin. The total from the Carmel River Basin is consistent with SWRCB Order No. 95-10 and the total from the Seaside Groundwater Basin is consistent with the Seaside Basin adjudication decision. It should be noted, however, that Cal-Am’s annual production limit from the coastal subareas of the Seaside Basin (3,504 AF) is currently being tracked on a calendar year basis, but will be switched to a water year basis, if approved by the presiding judge in the SGB adjudication proceedings.

For the first three months of Water Year 2007, Cal-Am’s production from Carmel River sources is below the SWRCB-based production target by approximately 85 AF or 2.4 %. In addition, for the first 11 months of Calendar Year 2006, Cal-Am’s production from the coastal subareas of the SGB is 567 AF below the annual production target set by the court in the Seaside Basin adjudication (Case No. M66343, Monterey County Superior Court). For the purpose of this budget, it is assumed that a

maximum of 521 AF of water from the Carmel River Basin will be diverted and injected into the Seaside Groundwater Basin during the January through March 2007 period.

RECOMMENDATION: The Board should receive public input, close the Public Hearing, and discuss the proposed water supply budget. District staff recommends adoption of the proposed budget. The budget is described in greater detail in Exhibit 14-B, Quarterly Water Supply Strategy Report: January – March 2007.

BACKGROUND: The Quarterly Water Supply Strategy and Budget pertains to production within the Cal-Am WDS for the three-month period of January, February, and March 2007. This strategy was developed cooperatively by staff from the District, Cal-Am, the National Marine Fisheries Service (NMFS), and the California Department of Fish and Game (CDFG) on December 7, 2006. Based primarily on the assumption that “normal year” inflows will occur during the January through March 2007 period and, as a result, that the “low-flow” restrictions on Cal-Am’s operations in the Upper Carmel Valley (UCV) will not be in effect, it was agreed that Cal-Am would divert approximately 60, 80 and 100 AF in January, February, and March, respectively, from its wells in the UCV and cease extractions from the coastal subareas of the SGB during this period. The projected diversions from the UCV are based on Cal-Am’s average monthly production from the UCV in January, February, and March for the past five years (WY 2002 – 2006).

The projected zero AF diversions from the coastal subareas of the SGB during the January through March 2007 period are consistent with SWRCB Order 98-04 that requires Cal-Am to reduce its diversions from the coastal subareas of the SGB when flow in the Carmel River at the Highway 1 Bridge exceeds 40 cfs between November 1 and April 30. It was also agreed that Cal-Am would not divert any water from San Clemente Reservoir through the Carmel Valley Filter Plant during this quarter. The remainder of the water needed to meet customer demand and injection requirements in the SGB would be provided by Cal-Am’s wells in the Lower Carmel Valley (LCV). Specifically, it was agreed that Cal-Am would produce approximately 1,020, 970, and 1,110 AF from its LCV wells in January, February, and March, respectively. Cal-Am will operate its wells in the LCV in a downstream-to-upstream order. The projected amounts of diversions from the LCV for injection into the SGB were based on the assumptions that 1,000 gpm (2.2 cfs or 4.4 AF per day) could be injected throughout January and that 1,500 gpm (3.3 cfs or 6.6 AF per day) could be injected throughout February and March. If actual inflows are more or less than projected for the budget period, the group will reconvene and adjust the diversion and release rates accordingly.

Rule 101, Section B of the District Rules and Regulations requires that a Public Hearing be held at the time of determination of the District water supply management strategy. Notice of this Public Hearing has been published in The Herald. Adoption of the quarterly water supply strategy and budget is categorically exempt from the California Environmental Quality Act (CEQA) requirements as per Article 19, Section 15301 (Class 1). A Notice of Exemption will be filed with the Monterey County Clerk's office, pending Board action on this item.

EXHIBITS

14-A Quarterly Water Supply Strategy and Budget: January - March 2007

14-B Quarterly Water Supply Strategy and Budget Report

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