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ITEM: |
ACTION
ITEM |
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2. |
PROVIDE DIRECTION ON PURE
WATER MONTEREY EXTERNALITIES STUDY |
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Meeting
Date: |
October 8, 2014 |
Budgeted: |
Partially |
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From: |
David J.
Stoldt, General
Manager |
Program/ |
Groundwater Replenishment |
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Line Item No.: |
Program 1-5-1 |
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Prepared
By: |
David J.
Stoldt |
Cost
Estimate: |
$220,000 |
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General Counsel Review: |
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Committee Recommendations: |
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CEQA Compliance: |
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SUMMARY: In
September 2013, the District authorized the General Manager to circulate a
Request for Qualifications and hire a consultant to analyze externalites of the
Pure Water Monterey groundwater replenishment project in an amount not to
exceed $80,000. The statements of
qualifications received on May 1, 2014 indicate a fee structure for all three
respondents on the order of $200,000. It
is recommended to proceed with the study, but at a higher authorized cost.
RECOMMENDATION: The General Manager recommends that the Board of Directors authorize contracting for consulting services related to externalities for GWR and the expenditure of up to $220,000. It is expected that this will become a budgeted item under the GWR project budget, subject to 75% reimbursement by the District. Such authorization would also be subject to demonstrated agreement on terms and conditions for source water.
DISCUSSION: With
respect to the Externalities Study, the District has stated that it believes
that the role of Groundwater Replenishment (GWR) in the water supply solution
needs to be evaluated in terms of benefits that extend beyond simply cost to
the ratepayer, but also include other factors that affect environmental and
social policy goals, regionally and state-wide.
Such benefits are often referred to as “externalities” and are often
difficult to quantify. The concept of
“social ROI” (return on investment) has been introduced in the past decade and
is becoming a more important decision-making criterion. It is often difficult for the California
Public Utilities Commission in to incorporate factors beyond cost and
reliability in their proceedings and the concept of valuing externalities is
challenging, despite being specifically called upon by other state agencies to
support water recycling. The parties to
the July 31, 2013 Settlement Agreements have agreed that these externalities
should be quantified and considered in the decision to include or exclude GWR
from the water supply mix.
Areas to be examined by the consultant include:
EXHIBITS
None
U:\staff\Boardpacket\2014\20141008\ActionItems\02\item2.docx