ITEM:		ACTION ITEM
22.	Consider Approval of Sales Agreement with Brant Family Trust Re:  Purchase of MPWMD Schulte South Well, APN 416-028-027
Meeting Date:			April 20, 2015	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Larry Hampson	Cost Estimate:	$3,454
General Counsel Review: Yes
Committee Recommendation: The Administrative Committee reviewed this item on April 13, 2015 and recommended approval.
CEQA Compliance: Categorical Exemption, Section 15301

SUMMARY: The Schulte South Irrigation Well is located at 8720 River Meadows Road (“Property”) in Carmel Valley, California (APN 416-028-027). This well and its appurtenances are owned by the District and began operation in 1988. In 1997 District and the Brant Family Trust (Brant) entered into a Well Use Agreement (Use Agreement) for a replacement well on the property, which gave the District the right to “drill, install, test, operate and maintain an irrigation well” (Well Site) on a portion of Brant’s Property near the Carmel River. In exchange for those rights, the Use Agreement gave Brant a connection to the well to use water on the Property and gave Brant the option of purchasing the well.

In 2006, at the request of Brant, the District processed a Water Distribution System (WDS) Exemption for the Well. As a condition precedent to issuing the Exemption, the District required Brant to purchase the Well and to execute an amended Use Agreement to facilitate continued District irrigation of the riparian corridor. The Well Site improvements to be transferred to Brant include a concrete pad, well casing, pump, pressure tank, electrical service and panel, and two connections to the well. Brant and the District have agreed to a Sales Price of $3,454 derived as shown in Exhibit 22-C.

After execution of each agreement, the District will retain ownership of some of the well appurtenances and have the right to use the well for up to 30 years to continue to irrigate the riparian corridor during dry periods. Coincident with the execution of this Sales Agreement (Exhibit 22-A), Brant and the District will execute the amended Well Use Agreement (Exhibit 22-B). The well currently has no production limit. The Well Use Agreement would establish a production limit of 2.10 acre-feet per year for this well, which MPWMD has determined is no greater than historical use.

STAFF RECOMMENDATION: The General Manager recommends the Board approve the Sales Agreement to transfer the Schulte South Well to the Brant Family Trust, contingent upon the simultaneous execution of an Amended Well Use Agreement to allow the District continued access to and use of this well.

BACKGROUND: The District established a well on the Brant Property in approximately 1987, to facilitate Carmel River restoration work at the Schulte Project. The well supplies water from the Carmel Valley Alluvial Aquifer for irrigation of riparian vegetation on the Brant Property and several parcels nearby on the south side of the river. A small portion of the south side of the Schulte Restoration Project near Schulte Road Bridge is supplied from the Cal-Am system. MPWMD also owns a well on a nearby parcel owned by Gunnar Reimers, which is used to irrigate the north side of the project. However, these latter two systems do not supply enough pressure to reach all of the south side of the Schulte Restoration Project. Therefore, a well on the south side of the river has been required to irrigate the project.

The Schulte South Well (aka “Pryor Well”) began operating in 1988. Initially, relatively large volumes of water were required to irrigate plantings in material composed of loose, unconsolidated sands and gravels with very little silt. In addition, a four-year drought from 1987 through 1991 and Cal-Am diversions created extremely dry conditions that increased irrigation needs. MPWMD used a maximum of 5.52 acre-feet per year during this start-up period. For unknown reasons after the 1987-1991 drought, the Pryor Well yield dropped to less than 20 gallons per minute (gpm). The District irrigation system requires about 100 gpm and the decision was made to construct a replacement well (the Schulte South well), which has been in operation since 1998. Since the initial start-up phase of the Schulte Restoration Project, riparian vegetation has become established and no longer needs as much water during dry periods.

In February 2006, Gary Brant informed MPWMD that he would like to purchase the well and submitted a Pre-Application to MPWMD for a proposed Water Distribution System (WDS) on the Brant property using the MPWMD Schulte South well as the source of water. In March 2006, MPWMD staff determined that such a WDS would be exempt from District Rules requiring a permit to form a WDS, because the well was placed into operation prior to the enactment of Ordinance 96 (to regulate small water distribution systems). However, the exemption also required that Brant purchase the well. Between February 2006 and March 2015, MPWMD and Brant intermittently negotiated a purchase price for the well. Negotiations were suspended for several years until Mr. Brant reactivated the negotiations in 2013.

The District intends to use the South Schulte Well in the future during dry years like 2007 and 2013 when the Carmel River goes dry in this reach. In dry years, it is not uncommon to have the water table drawn down to a level where trees experience moisture stress or mortality. This well allows irrigation of streamside vegetation along the Carmel River to prevent loss in the riparian corridor and mitigates for municipal groundwater extraction.

EXHIBITS

22-A Agreement for the Monterey Peninsula Water Management District to Sell and the Brant Family Trust to Purchase the Schulte South Well

22-B Amended Well Use Agreement Between Gary M. and Ingrid B. Brant Trustees of the Brant Family Trust And Monterey Peninsula Water Management District

22-C Derivation of Sale Price

U:\staff\Boardpacket\2015\20150420\ActionItems\22\Item 22.docx