ADMINISTRATIVE COMMITTEE
3.	CONSIDER ADOPTION OF RESOLUTION 2014-01 IN SUPPORT OF ENTERING INTO AN AGREEMENT WITH THE CALIFORNIA STATE COASTAL CONSERVANCY TO UPGRADE THE INTAKE FOR THE SLEEPY HOLLOW STEELHEAD REARING FACILITY
Meeting Date:		January 21, 2014	Budgeted:	Yes
From:		David J. Stoldt, General Manager	Program/	Protect Environmental Quality
			Line Item No.:	2-3-1-F and G
Prepared By:		Larry Hampson	Cost Estimate:	$450,000 (100% Reimbursed)
General Counsel Review: N/A
Committee Recommendation: The Administrative Committee reviewed this item on January 21, 2014 and recommended ____________.
CEQA Compliance: N/A

SUMMARY: The California State Coast Conservancy (SCC) is proposing to disburse up to $450,000 as a grant from California American Water (Cal-Am) Settlement Agreement funds to the District to prepare engineering, permitting, and environmental review documents to improve the intake structure at the Sleepy Hollow Steelhead Rearing Facility located on the Carmel River. The intake is subject to catastrophic failure when fine sediment begins to move through the river after San Clemente Dam is removed.

At its December 5, 2013 meeting, the SCC Board of Directors approved entering into a funding agreement with the District for the project, subject to meeting requirements for the work. Exhibit 3-A is a Resolution to enter into an agreement with the SCC for funds to complete the work. SCC has requested that the District seek proposals for services, rather than pre-selecting consultants. Therefore, the actual costs associated with this effort will be developed as part of the solicitation of proposals. The SCC is reserving up to $450,000 for this project, which is approximately $80,000 more than previous estimates received by MPWMD for this work. Project work is expected to take approximately one year to complete.

RECOMMENDATION: If this item is approved as part of the Consent Calendar, the Board will adopt Resolution 2014-02, which authorizes the General Manager to enter into an agreement with the California State Coastal Conservancy (SCC) to receive up to $450,000 in grant funds to improve the Sleepy Hollow Steelhead Rearing Facility intake. Authorization to enter into a grant agreement is contingent upon a modification of the Settlement Agreement between Cal-Am, the National Marine Fisheries Service, and California Department of Fish and Wildlife (CDFW) and execution of an agreement between CDFW and SCC that would allow a transfer of funds from CDFW to SCC for subsequent reimbursement to MPWMD of costs associated with this project.

BACKGROUND:

Existing Facilities Description: One of the projects proposed in the 1990 Allocation EIR Mitigation Program was to construct a facility to raise steelhead rescued each year from the dewatered portions of the river. In 1996, the District built and began operating the Sleepy Hollow Steelhead Rearing Facility (SHSRF) to raise juvenile steelhead rescued from the Carmel River. MPWMD rescues an average of about 16,000 fish each year, with just over 84,000 rescued in 2008 (note: high numbers of fish rescues correlate with low water conditions and vice-versa). A portion of the rescued fish are placed into the SHSRF, where approximately 50% survive the dry season and are then released to the river in the fall or early winter, normally after wet season rains begin.

The SHSRF, which is located about 0.6 miles downstream of San Clemente Dam, consists of an instream river diversion, a pump station, two large circular holding tanks, eight rearing troughs, an 800-foot long simulated natural rearing channel, and miscellaneous support systems. The facility was upgraded in 2000 with a cooling system and pump improvements to handle river water that is heated as it passes through Los Padres and San Clemente Reservoirs.

The original design of the project was based on three key assumptions: 1) clear water (i.e., free of sediment and debris) would be available during the rearing season; and 2) the facility would be operated only during the dry season when river diversions reduce the amount of rearing habitat in the main stem; and 3) a design flow-through rate of one cubic foot per second (cfs). Currently, the intake is not filtered and pumps are not designed to handle gritty material. Another weakness with the current design is that organic material (mostly leaves in the late summer and fall) can clog the drum screen in the bottom of the river channel at low flows. Even with frequent cleaning, reduced flow through the screen can cause pump cavitation and lead to failure. Subsequent to the initial construction, the flow-through rate was doubled to 2 cfs in order to improve water quality; however, when releases from storage at Los Padres Reservoir are cut back to a minimum (as happened this past year), the pump system is subject to failure from cavitation. Flow through the facility is by gravity, so an interruption in flow of more than a few hours can result in fish stress and/or mortality.

Changed Conditions: California Department of Fish and Wildlife (CDFW) and the National Marine Fisheries Service (NMFS) have requested that MPWMD rear fish at the SHSRF later into the year, in order to allow the re-watered Carmel River to more fully recover, and provide a more restored food chain, prior to the reintroduction of the rescued native fish to their previously dewatered habitat. Doing so requires the SHSRF to operate through the fall at very low river flows and into initial winter storms of the year, which cover the existing intake screen and pump gallery, denying access for maintenance and repairs. Winter flows can also deliver suspended and bedload sediment that is likely to cause the intake pumps to fail suddenly and catastrophically.

When the San Clemente Dam Removal and Carmel River Re-Route Project is completed, which is scheduled for fall 2015, fine material consisting of sands and silts will no longer be retained in the reservoir and the material will flow downstream past the intake to the SHSRF. In addition, it is likely that the volume of suspended sediment and large debris will increase. Along with the removal of San Clemente Dam and the Old Carmel River Dam just downstream of SC Dam, a new bridge will be constructed across the Sleepy Hollow Ford. A new bridge across the ford will provide year-round access to the SHSRF, even during very wet periods when the ford and the road down to the facility from San Clemente Dam are impassable.

Need for Project: The water intake for the SHSRF must be modified to ensure an uninterruptable supply of water to the facility during future adverse Carmel River conditions that include increased sediment flow, organic loading, and both very low and very high river flows.

The SHSRF will likely stay in full operation as a mitigation for Cal-Am’s Carmel River diversions until replacement water supply projects are completed and fully operational (tentatively scheduled for late 2018). After replacement water supplies are completed, operation of SHSRF may still be required in order to mitigate for Carmel River diversions that are likely to continue to impact aquatic habitat in the dry season. In addition, there may be a long-term need for the facility, as it does not appear that the Carmel River steelhead population will be recovered in the foreseeable future to the self-sustaining population level proposed in the NMFS South-Central California Coast Steelhead Recovery Plan.

Project Funding and SCC Agreement: In 2009, the California Department of Fish and Game (now CDFW) entered into a Settlement Agreement with the U.S. Department of Commerce, National Oceanic and Atmospheric Administration (NOAA), and California American Water (Cal-Am) for the purpose of disbursing funds paid by Cal-Am to mitigate for impacts to steelhead from unauthorized water diversions along the Carmel River. Cal-Am conveyed $3.5 million to CDFG in July 2009 and annual installments of an additional $1.1 million are paid each July 1 through 2016 for a total of $11.2 million.

NMFS, the agent for NOAA, Cal-Am and CDFW are proposing to execute an amended Settlement Agreement to allow the transfer of funds from CDFW to SCC. CDFW would advance funds to a special deposit account under an Interagency Agreement between the two state agencies, which would allow SCC to reimburse MPWMD for expenses associated with the Sleepy Hollow Intake upgrade. MPWMD will need to execute an agreement with SCC in order to receive the funds.

An initial agreement between MPWMD and SCC would include design and environmental review. After certification of a CEQA document (likely to be a Mitigated Negative Declaration), a second agreement with SCC would be required for construction funds.

Project Design goals:

· Prevent silt, sand, and organic material from entering the rearing channel.

· Improve the District’s ability to maintain the river water pumps.

· Reduce wear damage to pumps.

· Allow the SHSRF to operate for longer periods.

· Improve water quality and increase flows in the rearing channel.

In recent years, MPWMD evaluated several alternatives to improve the intake and pump design. Recently, staff from NMFS, SCC, and MPWMD met at the facility to discuss improvements that would allow operation during extreme low flow periods, such as the current period. It was concluded that a re-circulation element would likely be required in order to meet this requirement. It was agreed that MPWMD should solicit proposals to design such a system as part of the re-evaluation of alternatives.

Work Plan, Schedule, and Budget: MPWMD will work with SCC on a Work Plan that will include development of Request for Proposals for the following tasks: 1) evaluation of design alternatives and development of design plans; 2) documents and activities for compliance with the California Environmental Quality Act and the National Environmental Protection Act (if required); 3) permit applications; 4) design and facility process review by an aquaculture specialist; 5) administrative services associated with grant invoicing, reporting, and coordination among entities. MPWMD will provide project review and be responsible for overall grant administration.

It is anticipated that design and environmental review will take approximately 12 months from the time a funding agreement is executed. A detailed schedule will be developed for inclusion in an agreement with SCC.

A general budget will be developed for inclusion in an agreement with SCC. A more detailed budget will be available after MPWMD receives proposals for services. At a future meeting, the MPWMD Board of Directors will be requested to review proposals for services and approve entering into agreements for services from consultants. Grant funding for these services is capped at $450,000.

IMPACT ON FISCAL AND STAFF RESOURCES: The 2013-14 budget included a total of $610,000 in line item 2-3-1 F “Design and Permitting for new intake system” and line item 2-3-1-G “Raw water intake retrofit – phase 1,” both of which were to be reimbursed through grants from CDFG (now CDFW). Only a portion of these funds are likely to be disbursed this fiscal year (estimated at less than $100,000) after an agreement with SCC is executed. No funds are proposed to be used by MPWMD as a local match for this project. However, several District staff would be involved in managing the project and reviewing documents. Staff time spent on this project will be eligible for reimbursement.

EXHIBIT

3-A MPWMD Board Resolution 2014-01

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