ITEM:		PUBLIC HEARING
8.	CONSIDER APPLICATION TO CREATE SEPTEMBER RANCH Water Distribution System; September Ranch Partners, LLC, Applicant; MPWMD Application #20110316SEP; APN 015-071-010 and -012; 015-361-013 and -014; CARMEL VALLEY
Meeting Date:			November 19, 2012	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Henrietta Stern	Cost Estimate:	N/A
General Counsel Review: Counsel has reviewed and concurs
Committee Recommendation: N/A
CEQA Compliance: MPWMD, a Responsible Agency, relies on the Recirculated EIR portions for the September Ranch Subdivision (SCH #1995083033, PC95062/PLN050001) certified by Monterey County on November 9, 2010, as directed by the Superior Court in December 2008.

SUMMARY: Application #20110316SEP by September Ranch Partners, LLC (Applicant) for the September Ranch Water Distribution System (SRWDS) was received on March 16, 2011, and included an application form (Exhibit 8-A) and a set of exhibits, listed in Exhibit 8-B. In addition, the Applicant provided copies of Environmental Impact Reports (EIR) and Monterey County project approval documents. Some technical exhibits will only be referenced, but are available for review at the Monterey Peninsula Water Management District (MPWMD or District) office. A figure of the project area is provided as Exhibit 8-C.

The SRWDS application requests District approval for a water system to serve the proposed September Ranch Subdivision at 676 Carmel Valley Road in mid-Carmel Valley. The subdivision would consist of 73 new market-rate residential lots, 22 new affordable housing lots, and one existing farm house/caretaker unit; a 20.2-acre existing Equestrian Facility with accessory structures; sales office/guard house; 536.4 acres of Common Open Space, 273.6 acres of Private Open Space and 6.9 acres of Open Space Reserved for future public facilities. The subject parcels (APNs 015-171-010 and -012; 015-361-013 and -014) approximate 891 acres. Total water production will not exceed 57.21 acre-feet per year (AFY), consistent with limitations imposed by Monterey County. A total of 99 connections are associated with the residential, equestrian, non-residential and open space components noted above.

The proposed water source is the September Ranch Aquifer (SRA), described in the project EIR as adjacent to the Carmel Valley Alluvial Aquifer (CVAA), and characterized as having a semi-isolated barrier between the two aquifers. The relationship between the two aquifers is described in the “Background” section below. Water will be provided by an existing well (called “Well SR-1”) and at least one new well as a back-up supply. Three existing wells (“A, B and C”) will serve as monitor wells or be recommended for destruction. Wells serving the project will be located outside the CVAA. Although the project is located within the California American Water (Cal-Am) service area, residential Cal-Am Meter #6258 (caretaker unit) and commercial Cal-Am meter #6276 (horse-watering trough) that serve existing uses will be disconnected, as required by the County conditions of approval. The proposed SRWDS will not connect with any other water distribution system. Storage tanks and well water will provide fire protection.

The MPWMD is a Responsible Agency under the California Environmental Quality Act (CEQA), and in reaching its decision, relies on environmental documents adopted by the Monterey County Board of Supervisors (MCBOS) on November 9, 2010. The September Ranch Subdivision approval process has a lengthy history, including multiple EIR documents and legal challenges described in the “Background” section below. Over the years, MPWMD staff has reviewed and commented on several technical reports as well as the environmental review documents.

All MPWMD files associated with this Application are available for review at the District office.

Environmental documents for the September Ranch Subdivision are available at the following website maintained by Monterey County:

http://www.co.monterey.ca.us/planning/docs/eirs/september/September_Ranch.htm

This information is also available on a CD, which may be purchased at the MPWMD office. A hard copy of recent water-related sections is available for review at the District office. Selected portions are also posted on the District website at: http://www.mpwmd.dst.ca.us/ceqa/ceqa.htm.

MPWMD directors should review the water-related sections of the revised EIR documents (2006, 2009 and 2010), and were each provided a CD with the full environmental documentation record since 2004.

STAFF RECOMMENDATION: After holding a public hearing, the Board has the option to:

1) approve the application with Conditions of Approval recommended by staff;

2) approve the application but amend or add Conditions of Approval to address specific concerns identified by the Board or public;

3) deny the application based on evidence in the record; or

4) continue the public hearing to gather specific information needed to make an informed decision.

Based on District Rule 22, the requirements for obtaining a WDS Permit, and the record prepared by Monterey County regarding the September Ranch Subdivision, District staff recommends the District Board choose Option 1 and take the following actions:

1. Adopt the MPWMD Findings of Approval for Application #20110316SEP to create the SRWDS (Exhibit 8-D) with specific reference to Findings associated with District compliance with CEQA as a Responsible Agency.

2. Approve Application #20110316SEP; authorize issuance of MPWMD Permit #M12-06-L4 with the 30 Conditions of Approval specified in Exhibit 8-E. The Conditions of Approval include required conditions specified in MPWMD Rule 22-D as well as four special conditions for this project, as described in the “Discussion” section below. The production limit would be 57.21 AFY, and 99 connections would be allowed, consistent with approvals in Monterey County Resolution #10-312.

3. Direct staff to file a Notice of Determination (NOD) with the Monterey County Clerk, in compliance with CEQA Guidelines Section 15096(i).

This staff recommendation is based on:

a) The application’s compliance with District Rule 22, including Required Findings, Minimum Standards for Approval, and Mandatory Conditions of Approval;

b) The environmental record prepared by Monterey County, including unchallenged certification of the Final EIR and approval by Monterey County on November 9, 2010;

c) The ruling of the Superior Court on the adequacy of the 2006 EIR, with the exception of the water demand estimate section (Peremptory Writ of Mandate issued December 23, 2008 by Judge Dauphine);

d) The adequacy of recirculated water demand section as reviewed by MPWMD staff in 2009 and 2010, as well as lack of challenge to the final document;

e) New explanatory information about hydrogeology of the September Ranch Aquifer submitted in July 2011 as part of the WDS application process; and

f) Water-related special conditions imposed by Monterey County as part of its approval of the project (County Resolution 10-312, November 9, 2010).

These elements are described in the “Background” and “Discussion” sections below.

For the reasons enumerated above, the General Manager recommends the Board select Option 1 to approve the MPWMD WDS permit as recommended by staff. Standard conditions are required by Rule 22-D, and the proposed special conditions are similar to those imposed by the Board for other WDS Permits for subdivisions of this size (e.g., Canada Woods Water Company in 2005; Long Ridge/Rancho San Carlos in 2009). Also, at the request of the District and others, the Monterey County conditions of approval include many special conditions related to water use and conservation.

Concerning Option 2 (additional conditions), the Board can amend or add Conditions of Approval to address specific concerns identified by the Board or members of the Public.

Concerning Option 3 (denial of the application), staff is not aware of substantive evidence to support findings of denial based on the existing record. Should the Board choose this option, it should identify evidence in the record to support denial, and direct staff to develop findings based on that evidence.

Concerning Option 4 (continuation of the public hearing), staff believes adequate information is available for the District Board to make an informed decision as a Responsible Agency in compliance with CEQA. Should the Board choose to continue the public hearing, it should identify specific information it believes is needed to support an informed decision.

BACKGROUND: The September Ranch Subdivision approval process before the County Board of Supervisors has a lengthy history, including multiple EIR documents and court challenges that resulted in recirculated documents and recertification of the Final EIR. These actions are summarized in the application “Response to Supplemental Questionnaire” dated March 2, 2011 (Exhibit 8-F). Since the County’s 1995 Notice of Preparation of an EIR, MPWMD staff has commented on each environmental review document, including extensive technical comments on hydrogeologic reports and assessments as well as water demand estimates. The most pertinent environmental documents are those prepared in 2006, 2009 and 2010, which focus on water-related issues.

The initial County Conditions of Approval for the project included 11 special conditions as well as five required mitigation measures related to water. An additional three conditions were added as part of the August 2010 Final Revised Water Demand Analysis (Resolution 10-312, November 9, 2010). These are compiled in Exhibit 8-G.

District staff has held pre-application discussions with September Ranch representatives since 2007. A formal WDS application was submitted on March 16, 2011, after County approval of the project in November 2010 and lack of legal challenge following that approval. District staff requested and was provided additional clarifying information and documentation in 2011 and 2012. On October 24, 2011, the Applicant formally requested the application be placed on hold indefinitely. A letter requesting reinstatement of the application was received on July 31, 2012. The application was deemed to be “complete” on August 31, 2012.

A key issue in this matter is the characterization of the September Ranch Aquifer (SRA) as having a “semi-isolated” barrier between the SRA and the Carmel Valley Alluvial Aquifer. Put simply, the SRA is akin to a bathtub filled with sand and gravel adjacent to, but not part of the CVAA. Excess water from the SRA can spill into the CVAA, and contribute to CVAA water storage. But evidence shows this amount has a less than significant effect on CVAA storage compared to the effects of the Carmel River, tributary inflow, and extractions by the many wells along the Carmel River that greatly affect the storage volume in the CVAA. This hydrology is explained in Section 4.3.4 of the 2006 Recirculated Revised Draft EIR.

The SRA does not fit easily into the categories typically used by the District for wells in Carmel Valley. It is not part of the CVAA, but it is also not fractured bedrock (“Carmel Valley Upland”). A July 22, 2011 letter report (Exhibit 8-H) reviews the SRA “Depositional Environment” and interprets how the SRA was formed and became semi-isolated from a geologic perspective. This explanation has been reviewed by the District Water Resources Manager, who concludes it is plausible. The July 22, 2011 letter is important in that previous comments on environmental documents by District staff described a lack of this type of explanatory report. The March 2011 application Supplemental Questionnaire (March 9, 2011 letter report) also provided more detailed information on the hydrogeology of the SRWDS wells.

This semi-isolated character of this aquifer may have important water rights ramifications. The State Water Resources Control Board (SWRCB) has exercised jurisdiction over water flowing in the adjacent CVAA. Because the SRA is outside of the CVAA, it is not currently subject to SWRCB permit requirements. Chapter 4.3 in the 2006 EIR for the project states, “There has been no definitive classification as to whether the September Ranch Aquifer (SRA) adjacent to the CVA[A] is properly classified as ‘percolating groundwater’ or as a subterranean stream which is part of the CVA[A].” However, the EIR asserts that water in the SRA is percolating groundwater, over which the SWRCB has no jurisdiction, even though the SRA is physically alluvial in nature. In its December 23, 2008 Peremptory Writ of Mandate (Exhibit 8-I), the Superior Court determined the water rights discussion in Chapter 4.3 was legally sufficient. Hence, the SRA is described in the application as “Groundwater-Alluvial.” Exhibit 8-J is an excerpt from the 2006 EIR that discusses the water rights associated with the September Ranch Aquifer.

Another key issue in this matter is the anticipated water demand. The 2006 Recirculated Draft RDEIR analyzed the effects of 57.21 AFY total production. Monterey County circulated a revised water demand analysis in August 2009 with an estimated production of 55.798 AFY, based on an estimated metered consumption of 47.691 AFY. This estimate used District worksheets and calculation formulas, along with losses due to water treatment and transmission (Exhibit 8-K). The estimated use by September Ranch residences was also compared to actual use by homes in similar developments. In September 2009, MPWMD submitted several pages of comments, primarily technical corrections and clarifications, as well as requested permit conditions. The County prepared the Final Revised Water Demand Analysis on August 2010, incorporating MPWMD’s 2009 comments. The total production estimate was amended to 56.978 AFY based on District methods to calculate system losses. In a letter dated September 3, 2010, MPWMD staff found the County response to be acceptable and concurred with the final water demand estimates. The 57.21 AFY amount was used in the Monterey County approval documents. Thus, MPWMD will use the same 57.21 AFY number for the WDS Permit production limit.

DISCUSSION: The following paragraphs describe elements proposed for the Findings and Conditions of Approval, required by Rule 22, as well as required for CEQA compliance.

Findings of Approval

The Findings of Approval (Exhibit 8-D) comply with District Rule 22-B and C, and are based on evidence provided in the application materials, including supporting documents received through November 13, 2012 (printing deadline), on file at the District office. The primary documents are Draft and Final EIRs as well as Monterey County approval documents such as Resolution #10-312.

Conditions of Approval

Conditions of Approval (Exhibit 8-E) proposed for Permit #M12-06-L4 are consistent with MPWMD Rule 22-D, governing approval of Water Distribution Systems. Conditions #1 through #4 define the Permitted System, and allow up to 57.21 AFY of production to serve the September Ranch Subdivision, with a total of 99 connections. Production sources include existing and future wells in the September Ranch Aquifer. Extractions from the Carmel Valley Alluvial Aquifer or other components of the Monterey Peninsula Water Resource System are prohibited.

Conditions #5 through #24 reflect standard MPWMD mandatory conditions, including water quality standards, metering and annual reporting, conservation, required Indemnification Agreement, fee payments, timely notice of pending or actual changes to the system, MPWMD staff access for inspections, and other required elements. Conditions #25 and #26 relate to basic water rights and the Endangered Species Act; these conditions are not required by District rules, but are included in all MPWMD WDS permits.

Special Condition #27 requires the Permittee to provide detailed annual reports to MPWMD relating to metered water use, metered production from the well(s) and new connections added to the water system. It also requires the Applicant to pay for District staff time to perform the technical review of the annual reports.

Special Condition #28 requires the Permittee to provide to MPWMD, at no charge, copies of all future hydrologic, water production and water quality reports submitted to local, state and federal regulators, pursuant to agency permit conditions (as applicable), with emphasis on the requirements in the Monterey County conditions of approval (Exhibit 8-G).

Special Condition #29 requires that any new well drilled to supplement current Well SR-1 must be approved by MPWMD, and be determined by MPWMD to not be in the CVAA. This condition also prohibits existing Well B from serving the subdivision as this well is located within the mapped boundary of the CVAA. Existing Wells A, B and C are planned to remain as monitor wells or destroyed, but this condition does not prohibit use of Well A or C.

Special Condition #30 requires the caretaker unit and a horse-watering trough currently served by Cal-Am to be permanently disconnected from the Cal-Am system and replaced by water service from the Permitted System when construction of the new system is completed.

It is noted that Condition #24, required by District Rule 22-D-1-p, states the WDS Permit is subject to revocation if the Permittee does not fully comply with each and every Condition of Approval for Permit #M12-06-L4.

CEQA Compliance

As a CEQA Responsible Agency, the District’s authority is focused on the required Findings, minimum standards for approval of a WDS Permit and required Conditions of Approval as specified in Rule 22-B, C and D, respectively. The District Board action must comply with CEQA as well as MPWMD regulations. In 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 District Board has relied on previous action by the County of Monterey, the Lead Agency under CEQA. On November 9, 2010, the County adopted Resolution #10-312 certifying the Final EIR (SCH#1995033033) for the September Ranch Subdivision. The County’s Notice of Determination for the FEIR was filed with the County Clerk on November 10, 2010, and was not challenged. There are no mitigation measures or alternatives that meet the specific criteria of CEQA Guidelines 15162(a)(3)(C) and (D). The County-certified EIR and Superior Court action will suffice for purposes of the District as a Responsible Agency, thus fulfilling the requirements of CEQA.

As required by CEQA Sections 15091, 15092 and 15093, if the District Board adopts Findings (and cited evidence) #21, #22 and #23 (Exhibit 8-D), the Board determines, in relation to hydrology and water supply, that: (a) the project will not have a significant effect on the environment, (b) mitigation measures are not required as part of the District’s action on this WDS Permit, and (c) a Statement of Overriding Considerations is not required to be adopted by the District Board for this action. If the application is approved by the Board, the District will file its own Notice of Determination in compliance with CEQA Section 15096(i).

The District also acknowledges the adequacy of the Final Revised EIR (except for water demand section, which was recirculated for review in 2009 and 2010) as directed by the Monterey County Superior Court in its December 23, 2008 Peremptory Writ of Mandate.

With the MPWMD Conditions of Approval (Exhibit 8-E), approval of the application would be consistent with SWRCB Order 95-10, as use of Cal-Am water will be discontinued and future use is not allowed, with one exception related to fire emergency -- District Rule 23-A-1-b allows setting of a standby Cal-Am water meter for fire sprinklers in each residence ceiling because the project is within the Cal-Am service area. This District Rule does not compel Cal-Am to provide this service as the SRWDS has requirements imposed by the County regarding emergency fire protection.

Noticing and Public Comment

Public notice was properly provided for the November 19, 2012 hearing in multiple ways, including onsite posting on Carmel Valley Road, mailing to property owners within 300 feet of the project boundary, posting at the District office and via agenda notices mailed to several dozen interested parties. These notices indicated the hearing may be continued without separate notice. This hearing is posted on the “CEQA Notices” section of the District website at:

http://www.mpwmd.dst.ca.us/ceqa/ceqa.htm. This hearing is also noticed as part of the November 19, 2012 agenda at: http://www.mpwmd.dst.ca.us/asd/board/meetings/meeting.htm.

As of the November 14, 2012 printing date, the District has received no comments from the public. Other comments may be received on or before the hearing date.

EXHIBITS

8-A Application #20110316SEP for the September Ranch WDS (basic form)

8-B List of attachments to application

8-C Figure of project area

8-D MPWMD Draft Findings of Approval, dated November 2012

8-E MPWMD Draft Conditions of Approval, dated November 2012

8-F Response to Supplemental Questionnaire dated March 2, 2011 (project history)

8-G Compilation of Monterey County conditions of approval

8-H July 22, 2011 letter report reviewing the SRA “Depositional Environment”

8-I Superior Court Peremptory Writ of Mandate issued December 23, 2008

8-J Excerpt from 2006 EIR chapter 4.3 that discusses SRA water rights

8-K Summary of estimated water consumption (2009)

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