ITEM:		CONSENT CALENDAR
7.	CONSIDER SENDING A LETTER OF INTRODUCTION AND REQUESTING A meetING with local Navy officials to discuss DEVELOPMENT OF A SEAWATER DESALINATION PROJECT AT THE ABANDONED CITY OF MONTEREY WASTEWATER TREATMENT PLANT
Meeting Date:			December 12, 2011	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Larry Hampson	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: On November 22, 2011, the Water Supply Planning Committee recommended sending a letter of introduction to the Commanding Officer of the Naval Support Activity, Monterey and that the Board of Directors should review the letter prior to conveyance to the Navy.
CEQA Compliance: N/A

SUMMARY: MPWMD staff have met twice with representatives of the Public Works Department at the Naval Support Activity Monterey (NSAM) to discuss the feasibility of building a desalination plant capable of producing two millions gallons per day of fresh water at the abandoned City of Monterey wastewater treatment plant, which is located just west of Del Monte Boulevard across from the Naval Postgraduate School (see Figure 1 in Exhibit 7-B – Implementation Plan). The site is currently owned by the U.S. Department of the Navy.

Local Navy officials have expressed support for this project and are willing to assist in negotiating with the Navy for a long term lease of the site and with an agreement to supply power to the site. In exchange, the Navy would like MPWMD to consider a commitment to supply water to the Navy. In order to begin negotiations with the Navy, the Public Works Department asked that MPWMD send a letter of introduction to the Commanding Officer, Captain Gerral David, at NSAM requesting the Navy’s support in moving this project forward. A draft letter of introduction for conveyance to Captain David is attached as Exhibit 7-A.

On November 22, 2011, the Water Supply Planning Committee reviewed a draft letter of introduction to the Commanding Officer of the Naval Support Activity, Monterey and requested that the Board of Directors review the letter prior to conveyance to the Navy. The Water Supply Planning Committee recommended that the General Manager meet with local Navy officials.

STAFF RECOMMENDATION:

The Board should review Exhibit 7-A, which is a draft letter of introduction proposed to be sent to Captain Gerral David, the Commanding Officer of Naval Support Activity, Monterey and Exhibit 7-B – Implementation Plan. If adopted with the Consent Calendar, the General Manager would be authorized to send a letter of introduction and to meet with Navy officials to discuss the development of a desalination plant on Navy property.

BACKGROUND: The City of Monterey abandoned its wastewater treatment plant site and conveyed the property to the Navy after completion of the Monterey Regional Water Pollution Control Agency Regional Treatment Plant. Most of the infrastructure built for the Monterey treatment plant remains on the site.

In early 1982, the installation of a regional sewer interceptor from the wastewater treatment plant through the Del Monte Beach Local Coastal Program area required excavation of sand dunes in a 220-foot-wide construction easement. At the Navy site, a dune restoration program within the sewer excavation area was required as a condition of the coastal development permit granted by the State in April 1982. The U.S. Navy restored the dune habitat on the Navy property between the Recreational Trail and the beach by replanting the area with dune habitat plant species. The Navy also constructed a boardwalk on the western end of the area, between the Trail and the beach, in order to limit pedestrian foot traffic through the dunes. The Navy has an ongoing program to restore native dune plants.

As shown in Figure 1 in Exhibit 7-B – Implementation Plan, the Navy has indicated that dune restoration areas at the site must be preserved as well as some of the abandoned wastewater treatment plant facilities. Currently, the Navy has laboratory facilities in use and stores stormwater runoff for use with outdoor irrigation on Navy property. However, there are two areas that appear to be suitable for locating desalination facilities (open-air storage tank areas 1 and 2). Local Navy officials have indicated that the Navy could consider granting a long-term lease of the areas. However, such a lease requires a formal process involving review by legal, real estate, and environmental support groups within the Navy. Local Navy officials have estimate that this process could take up to 18 months to finalize.

In addition to leasing a portion of the site for desalination facilities, the Public Works Department has indicated that the Navy may have the capacity to supply electrical power to the site. District staff estimates that the amount of power required may be in the range of 28,000 kilowatt hours per day. Annual costs for this power are estimated to be about $1 million (2014 dollars), but may increase significantly as a result of the Cap and Trade Program for Greenhouse Gas emissions set up under AB 32.

The Navy has requested that MPMWD consider entering into a long-term agreement that would allow the Navy to provide some in-kind services in exchange for a supply of water at a fixed or reduced rate. The Navy indicated that it may be possible to supply a portion of the plant's power needs from its own generating capacity on Navy property. It should be noted that power costs are likely to exceed the value of water supplied to the Navy. Therefore, it is anticipated that if the Navy would agree to provide power, only a portion of the plant’s power needs would be supplied by the Navy, with the balance obtained from the PG&E grid. District staff have informed Navy officials that if an in-kind agreement is developed, the Navy would still be subject to the same limitations as the general community during a water shortage (e.g., as a result of legal restrictions or a physical shortage).

The Navy site has several advantages that could result in reduced construction, operation, and maintenance costs when compared with other potential sites within the District boundary. These advantages include: 1) proximity to Cal-Am facilities, which would likely result in a minimal amount of pipeline and other appurtenances for connecting to the Cal-Am system; 2) potential for local reliable power; 3) a potentially lower property acquisition cost; and 4) some of the existing facilities could be used (with modifications) in the treatment process.

Exhibit 7-A is a draft letter of introduction that describes the site, some of the facilities required and constraints to locating a desalination plant, and requests that the Navy meet with District officials to move this project forward. Exhibit 7-B – Implementation Plan is an attachment to Exhibit 7-A and describes proposed activities, a timeline, and preliminary cost estimate for completing this project.

EXHIBITS

7-A Letter of Introduction

7-B Implementation Plan for Water Project 3: Local Desalination

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