ITEM:		PUBLIC HEARING
7.	CONSIDER ADOPTION OF JULY THROUGH SEPTEMBER 2012 QUARTERLY WATER SUPPLY STRATEGY AND BUDGET
Meeting Date:			June 12, 2012	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Kevan Urquhart & Jonathan Lear	Cost Estimate:	N/A
General Counsel Review: 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 February 2009 Conservation Agreements between the National Marine Fisheries Service and California American Water to minimize take of listed steelhead in the Carmel River and Consistent with SWRCB WR Order Nos. 95-10, 98-04, 2002-0002, and 2009-0060.

SUMMARY: The Board will accept public comment and take action on the July through September 2012 Quarterly Water Supply Strategy and Budget for the California American Water (Cal-Am) Main and Laguna Seca Subarea Water Distribution Systems (WDS). The proposed budgets, which are included as Exhibits 7-A and 7-B, show monthly production by source of supply that is required to meet projected customer demand in Cal-Am’s Main and Laguna Seca Subarea systems, i.e., Ryan Ranch, Bishop, and Hidden Hills, during the July through September 2012 period. 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 7-A shows the anticipated production by Cal-Am’s Main system for each production source and the actual production values for the Water Year (WY) 2012 to date through the end of May 2012. The anticipated production values assume that Cal-Am’s annual main system production will not exceed 13,009 acre-feet (AF), including 2,701 AF from Cal-Am’s wells in the Coastal Subareas of the Seaside Groundwater Basin, 300 AF from Sand City Desalination Plant, 1,117 AF from Water Project 1 (formerly Phase 1 ASR), and 8,891 AF from the Carmel River Basin. The total from the Carmel River Basin is consistent with State Water Resources Control Board (SWRCB) Water Rights Order Nos. 95-10 and 2009-0060. The total from the Seaside Groundwater Basin is consistent with the Seaside Basin Adjudication Decision, and includes 32 AF of “Carryover Credit” from WY 2011 that Cal-Am was allowed to produce, but did not produce that year due to physical constraints within its existing delivery system. For the purpose of this budget, it is assumed that Dry WY inflow conditions, similar to the same months in 1991, will occur for the last quarter of WY 2012.

Exhibit 7-B shows the anticipated production by Cal-Am’s Laguna Seca Subarea system for each production source, and the actual production values for WY 2012 to date through the end of May 2012. Please note that the anticipated production values assume that Cal-Am’s annual Laguna Seca Subarea systems’ production will not exceed 147 AF from the Laguna Seca Subarea of the Seaside Groundwater Basin, whereas actual demand will exceed that amount. This total is consistent with the Seaside Basin adjudication decision.

RECOMMENDATION: The Board should receive public input, close the Public Hearing, and discuss the proposed Quarterly Water Supply Strategy and Budget. District staff recommends adoption of the proposed budget. The budgets are described in greater detail in Exhibit 7-C, Quarterly Water Supply Strategy Report: July – September 2012.

BACKGROUND: The Quarterly Water Supply Strategy and Budget pertains to production within Cal-Am’s Main and Laguna Seca Subarea systems for the three-month period of July, August, and September 2012. Staff from the District, the California Department of Fish and Game (CDFG), Cal-Am, NMFS, and the United States Fish & Wildlife Service (USFWS) met to cooperatively develop this strategy on June 7, 2012. Based on current reservoir and Carmel Valley Alluvial Aquifer storage conditions, river flows in October 2011 through May 2012, and the rainfall that has occurred to date, it was agreed that “Dry” WY inflows would be used to assess Cal-Am’s operations and set monthly production targets for Cal-Am’s systems for the next quarter.

To meet customer demand in its main system, Cal-Am intends to try to avoid producing any groundwater from its wells in the Upper Carmel Valley during July through September 2012, and will focus instead on producing approximately 850, 826, and 752 AF of groundwater from its wells in the Lower Carmel Valley during July, August, and September 2012, respectively. The permitted diversion season for ASR ended May 31, and does not begin again until December 1 of this year, which is during the next Water Year, 2012. Recovery of the 132 AF of ASR water diverted to storage in WY 2012 will likely be delayed until the next Quarterly Water Supply Strategy and Budget (i.e., first quarter of WY 2013).

It was also agreed that, subject to rainfall and runoff conditions in the Carmel River Basin, Cal-Am would produce 520, 525, and 500 AF of water in July, August, and September 2012, respectively, from the Coastal Subareas of the Seaside Basin, in addition to 25 AF per month from the Sand City Desalination Plant during this period. It was also agreed that Cal-Am would budget to produce 18, 18, and 17 AF of groundwater from its wells in the Laguna Seca Subarea for its customers in the Ryan Ranch, Bishop, and Hidden Hills systems during this period.

Lastly, it was agreed that Cal-Am will not divert any water from San Clemente Reservoir through the Carmel Valley Filter Plant during this quarter, based on past practice and their September 2001 and February 2009 Conservation Agreements with NMFS. Cal-Am will operate its wells in the Lower Carmel Valley in a downstream-to-upstream order. If actual natural river inflows are less than projected for the budget period, the group may reconvene and adjust the Los Padres Dam 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

7-A Quarterly Water Supply Strategy and Budget for Cal-Am Main System: July - September

2012

7-B Quarterly Water Supply Strategy and Budget for Cal-Am Subsystems: July - September 2012

7-C Quarterly Water Supply Strategy and Budget Report: July - September 2012

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