Meeting Date:

April 19, 2010





Darby Fuerst




General Manager

Line Item No.:     N/A


Prepared By:

Henrietta Stern

Cost Estimate:



General Counsel Review:   Counsel has not reviewed the staff analysis.

Committee Recommendation:  N/A

CEQA Compliance:  The MPWMD, as a Responsible Agency for this project, has considered the Ocean View Plaza Project Environmental Impact Reports and related approval documents prepared by the City of Monterey.


SUMMARY:  The Board will consider Application #20091209OCE (Exhibit 14-A) to create the Ocean View Community Services District (OVCSD) Water Distribution System (WDS), referred to herein as “OVWDS.”  This Multiple-Parcel Connection System would serve  residential, commercial and industrial uses for the proposed 3.5 acre Ocean View Plaza Project (OVPP) to be located at 457, 465, 470, 484, 565 and 570 Cannery Row in the City of Monterey.  Approval of the application would allow operation of an onsite, reverse osmosis seawater desalination plant and related water production facilities to supply potable and landscape irrigation needs for approximately 126,000 square feet (sq. ft.) of commercial buildings, 38 market condominiums, 13 inclusionary housing units, 377 parking spaces, rehabilitation/reconstruction of historical fish processing buildings, a new community park, and landscaping along the City’s recreation trail. Exhibit 14-B provides a set of drawings that include the OVPP plan view, the desalination facility plan view, a parcel map, and a list of the 26 parcels associated with the project.  The proposed water production limit is 27.89 acre-feet per year (AFY) and up to 155 connections are envisioned for separate residences and businesses within the OVPP complex, as well as irrigation meters.  MPWMD Water Demand Division staff have reviewed and concurred with the OVPP water demand and connection estimates, provided in two tables shown as Exhibit 14-C.


The applicant is Cannery Row Marketplace, LLC, which is the property owner.  In compliance with Monterey County Health Department (MCHD) regulations governing operation of desalination projects, the OVCSD was formed by the City of Monterey in 2005 for the purpose of providing water to the OVPP. Once construction of the OVWDS facilities is completed, Cannery Row Marketplace, LLC, shall dedicate the OVWDS facilities to the OVCSD.


The OVPP is within the California American Water (CAW) service area, but does not have access to CAW water as a supply source due to restrictions imposed on CAW resource agencies and the Court.  The OVWDS application materials state that all water for the OVPP would come from the desalination plant except for fire suppression and construction.  It is noted that there is an existing CAW connection in the Stohan Building at 484 Cannery Row. A water credit application submitted in 2000 requested credit for 3,400 square feet, which is equivalent to 0.238 AFY (Group 1).  A September 7, 2000 letter from the District to the applicant explained that water credits are not issued until there is a permanent reduction in use (i.e., demolish building).  The exact relationship of this CAW connection (or possible credit) to the desalination plant is not clear at this writing.  More information will be provided at the April 19, 2010 Board meeting.  


Notably, a December 2005 Agreement between the City of Monterey, CAW and Cannery Row Marketplace, which was incorporated into the December 2005 conditions of approval for the OVCSD by the Local Agency Formation Commission of Monterey County (LAFCO), requires the OVCSD to dissolve and the OVWDS to be dismantled within 90 days after CAW formally notifies Cannery Row Marketplace that CAW is able to commence full water service to the OVPP.  MPWMD staff assumes that CAW would not notify the applicant of its ability to serve OVPP until Phase 2 of the Regional Project is operational (i.e., when water is available for uses above and beyond existing needs and compliance with State Water Resources Control Board [SWRCB] Order 95-10 and the Seaside Basin Adjudication), and an allotment of water is made available to the OVPP by the City of Monterey.  MPWMD Condition of Approval #28 addresses this issue, as described below.


The project has an extensive regulatory history, including several iterations of Environmental Impact Reports (EIR), litigation and court determinations.  In June 2004, the City of Monterey issued a series of approvals for the OVPP and issued a Notice of Final Determination associated with Use Permit #00-019.  Several revisions to the City’s Conditions of Approval occurred over the years, with the most recent action on October 13, 2009.  Notably, the City requires the applicant to obtain desalination/water system permits from a variety of agencies, including MPWMD.  If the permits are not obtained, the project will be placed on the City Water Waiting List.  The City permit states that the “applicant shall proceed at his own risk that water may not be available at the time he submits building plans to the Permit and Inspection Services Division,” and that “no [City] approvals will be given if water is not available to this project.”


Several other agencies, including the California Coastal Commission (January 2009), have issued permits and approvals for the OVPP, which has resulted in refinements to system components over time.  Exhibits 14-D and 14-E, provided by the applicant, is a summary of the CEQA documentation and agency permits/approvals, respectively, through late 2009.  Additional information is provided in the “Background” and “Discussion” sections below.


The MPWMD serves as a Responsible Agency in this matter in compliance with the California Environmental Quality Act (CEQA), and relies on the certified EIR and related documents adopted by the City of Monterey.  These documents have been reviewed by District staff and excerpts have been provided to the Board, as described below.  The District Engineer has reviewed the engineering and technical documents submitted with the application, and no further documentation is needed for this MPWMD action.  The OVWDS draws from the Pacific Ocean, and would not affect the Carmel River Watershed or Seaside Groundwater Basin.  Pursuant to MPWMD Rule 22-A, Board approval for this Level 4 permit is needed because it is a commercial project that would use more than 1.0 AFY. 

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


1.      Adopt the MPWMD Findings of Approval for Application #20091209OCE shown as Exhibit 14-F with specific reference to Findings #21 and #22, District compliance with CEQA as a Responsible Agency.


2.      Approve Application #20091209OCE; authorize issuance of MPWMD Permit #M10-05-L4 with the 28 Conditions of Approval specified in Exhibit 14-G, and direct staff to file a Notice of Determination with the Monterey County Clerk.  The Conditions of Approval include required conditions as specified in MPWMD Rule 22-D as well as two Special Conditions associated with reporting and use of CAW water.


BACKGROUND:  The Application package (as well as the Pre-Application package) included extensive attachments, and the key documents submittals are noted below.  Cited documents are available for review at the District office; some are attached as exhibits herein.  They include:


Ø      Permit Application Form and Supplemental Questionnaire for the OVWDS, including 11 sets of attachments, which are listed on page 5 of the Application Form (Exhibit 14-A);

Ø      Explanatory tables and figures, including parcel list, proposed buildings and facilities, summary of desalination operation, and water demand calculations (Exhibit 14-C);

Ø      Summary of CEQA actions related to OVPP as of November 2009 (Exhibit 14-D);

Ø      Summary of OVPP permit approvals as of November 2009 (Exhibit 14-E);

Ø      Seawater Desalination System for Ocean View Plaza, prepared by Kennedy/Jenks Consultants, dated July 24, 2006;  Seawater Desalination Pilot Program, prepared by Kennedy/Jenks Consultants for Marin Municipal Water District, dated January 26, 2007;

Ø      Technical Memorandum – Evaluation of Alternatives to an Open Ocean Intake, prepared by Parsons Brinckerhoff, dated June 2007; letter to California Coastal Commission dated April 21, 2008; revised drawings and summary of intake and discharge dated June 2008;

Ø      List of additional desalination-related technical reports prepared for OVPP, and copies of each technical report, with topics including: desalination plant construction and operation, intake and discharge facilities, effluent dilution and ocean mixing, wave impacts on OVPP, sea level rise and beach erosion, sand cover and marine habitat, water well feasibility evaluation, horizontal directional drilling pipeline installation, and geotechnical investigations; 

Ø      Summary of water supply alternatives for OVPP;

Ø      CEQA documents prepared by the City of Monterey include:  Draft EIR for OVPP dated April 2001, State Clearinghouse #2000041035; Final EIR for OVPP dated August 2001, including responses to comments and text amendments; Draft Supplemental EIR (SEIR) dated December 2001, and Final SEIR dated March 2002 (addressed traffic issues only); Draft SEIR dated March 2004, and Final SEIR dated May 2004 (addressed OVPP design alternatives);

Ø      City of Monterey Notice of Final Determination for OVPP dated June 2, 2004; City Council Statement of Overriding Considerations approved June 1, 2004; City Council Findings approved June 1, 2004; OVPP Mitigation Monitoring Table approved June 1, 2004; City of Monterey “Use Permit 00-019 and Vesting Tentative Map” notice dated August 24, 2004, attaching City Council Conditions of Approval adopted on June 1, 2004; City of Monterey Resolution No. 04-116 of the “Ratifying Statement of Overriding Considerations, Findings and Mitigation Monitoring Table for Ocean View Plaza, Mixed Use Project at 470, 565 and 580 Cannery Row,” adopted July 20, 2004; City of Monterey “Application 09-144 to Re-Open Use Permit 00-019” notice dated August 24, 2004, attaching City Council Conditions of Approval adopted on October 13, 2009;

Ø      Agreement between City on Monterey, CAW and Cannery Row Marketplace dated December 1, 2005 regarding relationship of OVCSD and CAW, water service to OVPP;

Ø      LAFCO documents certifying formation of OVCSD, adopted December 27, 2005;

Ø      CAW Resolution dated April 21, 2006 agreeing to OVCSD, and waives rights re: duplication of service;

Ø      Letter from MCHD to applicant dated Oct 18, 2006 concurring with desalination project 75% engineering design, and requesting refinements to desalination plans;

Ø      Regional Water Quality Control Board (RWQCB) Order R3-2007-0040, NPDES Permit #CA0050016, adopted July 6, 2007 (expires August 25, 2012);

Ø      Grant Deed recorded at the Monterey County Recorder on June 17, 1996 (Reel 3384, Page 752) naming owner of subject parcels as Cannery Row Marketplace, LLC, a California Limited Liability Company.


            CEQA Review:  MPWMD staff commented on the Draft EIR in June 2001.  MPWMD noted the need for a WDS permit, asked for clarification on certain water demand estimates, and expressed concern about CAW as the owner-operator of the desalination plant (at that time), or the provider of emergency supply, in light of the one-for-one offset required in SWRCB Order 95-10.  The changes to the project description, creation of the OVCSD as the water purveyor, and agreements between CAW, the City and the applicant have addressed MPWMD’s concerns. 


Desalination Project Description:  The following paragraphs, provided by the applicant, provide a more detailed description of the proposed desalination project.  This description is based on the most recent permit conditions imposed by various agencies to date:


The proposed OVWDS is comprised of onshore pumps, desalination equipment, water storage reservoirs, and offshore seawater intake and brine disposal pipelines and structures.  With the exception of the seawater intake and brine disposal elements, all other components of the project desalination facility will be located on the project site in the lower level of bayside Building B (APNs 001-021-016 through 020).


The reverse osmosis system will be manufactured as a complete, skid-mounted unit equipped with all necessary piping, instruments, housing, and pumps.  Potable water produced by the system will be pumped into two 75,000-gallon reservoirs located onsite adjacent to the desalination system, which will be capable of storing a three-day supply at maximum daily demand of 50,000 gallons per day (gpd) (or six days at average daily demand of 25,000 gallons gpd, 12 days at the demand expected during any emergency requiring water conservation).  The reservoirs will consist of rectangular poured-in-place concrete basins.  From the reservoirs, water will be pumped to a 1,000-gallon hydro-pneumatic tank, located adjacent to the desalination facility, which will deliver pressurized water to the project’s potable water delivery system.  The proposed desalination facility will be designed to meet the average demand of 25,000 gpd, which is equivalent to a project demand of approximately 27.89 AFY.  

The seawater intake and discharge design will include two six-inch diameter intake pipes, to which one emergency intake line will be connected, and one six-inch diameter discharge pipe.  These pipelines will be installed by first directionally drilling a 20-inch bore hole from the inland side of the site to a location roughly 350 feet offshore where the bore will exit the underlying granite formation adjacent to a submarine sand channel on the ocean floor in about 25 feet of water.  The one discharge pipe and the two intake pipes will then be bundled together and pulled into the bore hole.  At the exit point of the bore, permanent collar anchors will be installed around the pipes and six-inch diameter pipe extensions extending further seaward will be attached to each of the three pipes.  These pipe extensions will be jetted two to three feet into the surficial sediment of the sandy bottom (by divers using air hoses) where they will be anchored in place using concrete weights, and they will be re-covered (buried) with sandy bottom sediments.  


The one discharge pipe will be extended in this manner approximately 850 additional feet to a point roughly 1,200 feet offshore in about 50 feet of water, where it will daylight about one to two feet above the ocean floor and into the water column.  The two intake pipelines will also be extended in this manner approximately 450 beyond the bore exit point to a point roughly 800 feet offshore where they will extend into a concrete vault at a water depth of about 40 feet.  The concrete vault (approximately 15 feet in length, 6 feet wide, and 6 feet high and consisting of two chambers) will be assembled onshore, and jetted into the seabed floor and re-covered (buried) with sandy bottom sediments in a similar manner as the pipes.  The larger chamber of the vault will be filled with sand, and the smaller chamber will be open; the sand-filled chamber will be where seawater is pulled through the sand filter, and the smaller chamber will be fitted with a cover to allow for diver access to the vault and to allow for removal of pipeline inspection gauges (“pigs”) sent through the intake pipes for cleaning and maintenance purposes.


The pipes will be reburied under two to three feet of sediment at the bore hole exit, and up to six to seven feet where the pipes enter the vault, and that the vault itself will be reburied under six inches to two feet of sediment.


A six-inch emergency intake pipe riser will be attached to the two intake pipes through a Y-valve near the concrete vault, and it will be extended so that it will daylight about one to two feet above the ocean floor and into the water column.  This intake pipe will be fitted with a velocity cap to limit maximum intake to no more than 0.2 feet per second, and it will be perforated with 1-inch diameter, screened ports through which seawater will be drawn.


DISCUSSION:  The staff recommendations are based on the following information: 


Adequacy of Sustainable Supply:  The applicant’s technical documentation was reviewed by MPWMD staff, who concur that the desalination project is capable of reliably producing the 27.89 AFY needed for the OVPP.  It is noted that the project includes redundancy of major components and 6-12 days of storage in case of short-term system failures.  A standard condition of approval is that the MPWMD shall not approve a new or intensified connection to the CAW system if a private WDS fails to deliver adequate water quantity or quality, until full compliance with SWRCB Order 95-10 has been achieved, and an allocation of CAW water is available to the project.  


Potential Impacts to Other Water Systems:  The District requires the applicant to show that the proposed WDS would not adversely affect existing WDS.   There are no other WDS within 1,000 feet of the OVWDS, and permit conditions imposed by MPWMD and other agencies protect the CAW system.  The desalination plant used by the Monterey Bay Aquarium would not be adversely affected.


Potential Impacts to Sensitive Environmental Receptors (SER):  The District requires the applicant to show that the proposed WDS would not adversely affect SER as defined by Rule 11, which includes the Pacific Ocean.   The technical and environmental documentation submitted with the application demonstrate to MPWMD staff’s satisfaction that no significant adverse impacts to the marine water resource environment are anticipated.  The OVPP EIR (April 2001 Draft EIR, page 226) describes screening and intake flow control to avoid entrainment or passage of marine life into the desalination plant.  The EIR also describes means to rapidly disperse discharged brine so that ambient seawater salinity is reached within about eight feet. Various alternatives to direct intake and discharge are also described. 


As initially approved by the City of Monterey in 2004, the intake for the desalination facility was an open ocean intake.  However, pursuant to the California Coastal Commission’s request, the intake was redesigned in 2008 to be a subsurface intake.  Parsons Brinckerhoff evaluated the feasibility and designed the subsurface intake, and these documents were submitted to MPWMD as part of the OVWDS application. According to the applicant, the brine discharge remains the same as approved in 2004.


Water Quality:  The technical and environmental documentation submitted with the application demonstrate to MPWMD staff’s satisfaction that the desalination project is able to reliably produce adequate water quality to meet Title 22 health standards.  The MCHD and State Department of Public Health are the two entities that will take the lead on monitoring and enforcing water quality standards. 


            Water Rights:   It is noted that a May 25, 1999 letter from the SWRCB Chief, Division of Water Rights, indicated that the one-for-one offset in Carmel River pumping would be imposed unless the OVPP water supply is independent from the CAW system (primary or emergency supply).  The OVWDS project as presently described meets those criteria, with the OVCSD as owner-operator, redundant production facilities, six-to-12 days of water storage, and non-CAW trucked-in water as the emergency supply source.


            Other Agency Approvals:  Exhibit 14-E, prepared by the applicant, summarizes permits and approvals to date.  Notable agency approvals include:  City of Monterey, LAFCO, Regional Water Quality Control Board (RWQCB), California Coastal Commission, U.S. Army Corps of Engineers (conditional), Monterey Regional Water Pollution Control Agency (contingent approval), and Monterey County Health Department (contingent approval).  The applicant describes the Monterey Bay National Marine Sanctuary (MBNMS) as “reviewing the project application.”  Based on earlier research by District consultants, each Sanctuary is managed according to a specific management plan in accordance with the National Marine Sanctuaries Act.  The MBNMS provides approval for RWQCB and other permits.  Specifically, each applicant submits a Request for National Marine Sanctuary Authorization for the proposed activities in the Sanctuary. 


Approval of OVWDS Application #20091209OCE

The Findings of Approval (Exhibit 14-F) are based on evidence provided in the application materials, as reviewed by District staff.  Staff believes the application meets the criteria and minimum standards for Approval set by District Rules 22-B and C.  Pertinent information includes an approved environmental document, technical studies and reports, technical memoranda and maps, correspondence between MPWMD staff and the applicant, and previous approvals by other governmental entities.  MPWMD approval of the application is not anticipated to result in a significant adverse effect to the Carmel River, the Carmel Valley Alluvial Aquifer, the Seaside Groundwater Basin, or other wells.  


The Conditions of Approval (Exhibit 14-G) proposed for Permit #S10-05-L4 for the OVWDS are consistent with MPWMD Rule 22-D governing approval of water distribution systems.  Conditions #1 through 4 define the Permitted System, including a System Capacity (production limit) of 27.89 AFY, and an Expansion Capacity Limit of up to 155 Connections for the residential, commercial, industrial and landscape irrigation components of the OVPP.  There is no (City of Monterey) water allocation associated with this permit at this time.  However, Special Condition #28 requires 27.89 AFY to be debited from the City of Monterey’s allocation when CAW takes over as the service provider for the OVPP.


It is noted that the OVWDS application estimates the maximum number of separately metered tenant spaces (Exhibit 14-C), as the actual number of tenants that may inhabit the building after construction is unknown at this time.  A maximum number of 155 Connections was selected based on the number of anticipated residences, the total square footage of the commercial space (roughly 126,000 Sq. ft.), likely types and sizes or businesses, and other factors. 


Conditions #5 through #23 reflect standard mandatory conditions of the MPWMD, including permits by other agencies, metering and annual reporting, conservation, water quality, required Indemnification Agreement and deed restriction, no CAW bailout, fee payments, etc.  Other Conditions of Approval (Conditions #24 through #26) address water rights, compliance with the Endangered Species Act, and access by MPWMD staff to the property for monitoring and measurement purposes. 


Special Condition #27 refers to copies of hydrologic, water production and water quality reports.  Special Condition #28 refers to the situation associated with existing permit conditions imposed by LAFCO, which require the OVCSD to be dissolved, and the OVWDS to be permanently dismantled when CAW provides formal notice that a permanent supply is available.  The MPWMD condition states that MPWMD shall not approve CAW supply for OVPP until full compliance with SWRCB Order 95-10 has occurred, and an allotment of water is available to the project from the City of Monterey (i.e., adequate supply is available from the City’s water allocation for OVPP, and the City actually debits the 27.89 AFY amount).   It is noted that as of February 2010, the City has 6.991 AF available in its allocation.  Thus, an additional source of supply will need to be made available from the Phase 2 Regional Project, or some other change would need to be made to the MPWMD Water Allocation Program.  As a reminder, the Phase 1 Regional Project under discussion at present does not include any new water supplies for vacant or underserved legal lots of record or “growth.”  The Phase 1 purpose is solely to legalize the existing supply.


MPWMD CEQA Compliance

The District Board action must comply with CEQA as well as MPWMD regulations.  In the review of this application, MPWMD has followed those guidelines adopted by the State of California and published in the California Administrative Code, Title 14, Section 15000, et seq.  Specifically, the MPWMD, as a Responsible Agency under CEQA for this action, has complied with Guidelines section 15096.  The MPWMD, as a Responsible Agency for this project, has considered the applicable OVPP EIR and SEIR sections prepared by the City of Monterey that relate to hydrology, water quality and water supply.  A package of these excerpts has been provided to each Board member under separate cover.  The City of Monterey Notice of Final Determination for OVPP dated June 2, 2004 is attached as Exhibit 14-H.   


Copies of the full EIR and SEIR documents associated with the OVPP are available for public review at the District office in hard copy or CD.  The package of water-related excerpts from the environmental documents is also available in hard copy, CD and has been placed on the District website under “CEQA Notices” at:



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 subject parcel; (2) posted notice at the District office; (3) on-site posting as certified by the applicant; (4) notice of the public hearing to recipients of District agendas for the April 19, 2010 meeting, including local print media; and (5) agenda and staff note materials on the District website.  All files associated with the application are available for review at the District office.  Detailed project plans are at the City of Monterey Community Development Department.  The applicant has also filed the proper MPWMD Ex Parte Communication forms with the District.



14-A    Application #20091209OCE and Supplemental Questionnaire Forms for OVWDS (without attachments)

14-B    Figures of OVWDS, including OVPP Plan View, desalination plant components, parcel map and APN list

14-C    Tables of water demand and connection estimates

14-D    Summary of CEQA documentation for OVPP, prepared by applicant

14-E    Summary of permits and approvals for OVPP, prepared by applicant

14-F     Draft Findings of Approval for Application #20091209OCE

14-G    Draft Conditions of Approval for Permit #M10-05-L4

14-H    City of Monterey Notice of Final Determination for OVPP dated June 2, 2004 along with Resolution of Approval