WATER DEMAND COMMITTEE

 

3.

CONSIDER RECOMMENDATION TO THE BOARD REGARDING ORDINANCE NO. 146, AN ORDINANCE TOLLING THE EXPIRATION DATE OF AFFECTED WATER USE CREDITS FOR THE DURATION OF ANY MORATORIUM PRECLUDING THEIR USE

 

Meeting Date:

March 9, 2011

Budgeted: 

N/A

 

From:

Darby Fuerst,

Program/

N/A

 

General Manager

Line Item No.:

 

Prepared By:

Stephanie Pintar

Cost Estimate:

N/A

 

General Counsel Review:  Counsel has been consulted regarding this item

Committee Recommendation:  N/A

CEQA Compliance:  N/A

 

SUMMARY:  Ordinance No. 146, revised to reduce possible environmental impacts associated with tolling (or suspending) the expiration date of Water Use Credits affected by a California Public Utilities Commission (CPUC) moratorium, as well as a draft Initial Study on the revised ordinance, were presented to the Board on February 24, 2011 (Exhibit 3-A).  Following discussion, the Board requested that action on Ordinance No. 146 be deferred for one month to provide time for the Board to consider comments received from the Technical Advisory Committee (TAC) and the Water Demand Committee.  The questions and comments raised at the Board meeting are summarized below.  

 

1.        Letter from David Sweigert (Fenton & Keller) received February 24, 2011 (Exhibit 3-A).  Mr. Sweigert’s letter encourages the Board to proceed with the ordinance based on a mitigated negative declaration or on a Class 1 categorical exemption under the California Environmental Quality Act (CEQA).

 

2.        Craig Anthony, General Manager, California American Water.  Mr. Anthony commented at the Board meeting regarding the potential hardship on the holders of Water Use Credits if a moratorium is imposed by the CPUC that is short term.  The Water Use Credit tolling initiated by Ordinance No. 146 would continue until California American Water was in compliance with the Cease and Desist Order and the Monterey County Superior Court's Seaside Basin Adjudication Decision (as amended), and after additional water supply has been developed and released in a quantity sufficient to offset all documented Water Use Credits.  Once initiated, the tolling could potentially continue for years.

 

3.        Paul Bruno commented on the loss of value of a Water Use Credit under the terms of Ordinance No. 146.  As a new water supply would be available when the tolling is lifted, the value of a Water Use Credit is the reduction in Connection Charge assessed for a Water Permit.  Currently, a Water Use Credit allows the reuse of saved water on a Site for up to ten years.

 

4.        Jason Retterer (Lombardo & Gilles), as an initiator of the request to toll Water Use Credits during a CPUC ordered moratorium, recommended the Board go back to the original version of the ordinance.  Mr. Retterer disagreed that tolling would result in potentially significant environmental impacts.  The original ordinance did not toll Water Use Credits beyond the conclusion of a CPUC ordered moratorium and did not sunset Water Use Credits when a fixture is mandated.  At the November 15, 2010, meeting, the Board delayed a scheduled first reading of draft Ordinance No. 146 until after a thorough California Environmental Quality Act (CEQA) review had been conducted.  After reviewing the District’s documented Water Use Credits (i.e., those Water Use Credits documented by written correspondence), and after considering current rules, expert opinion, and other substantial evidence as required by CEQA, staff determined that an Environmental Impact Report (EIR) would be required to implement Water Use Credit as proposed in the draft ordinance scheduled for Board consideration on November 15, 2010.

 

5.        Christine Kemp (Noland, Hamerly, Etienne & Hoss) commented that the proposed ordinance significantly jeopardizes investments made by clients that result in reductions in use and not increases.  Ms. Kemp agreed with Mr. Sweigert that the CEQA baseline should include Water Use Credits.  Ms. Kemp also commented that the Board should consider the effect of a CPUC ordered moratorium on Water Permits that may expire.

 

6.        John Narigi, Co-Chair of the Monterey County Hospitality Association’s (MCHA) Water Taskforce Committee, indicated that MCHA is strongly opposed to any moratorium on the use of Water Use Credits and opposes continuing tolling until a new water supply is available for Expansions in Use.   Staff is scheduled to meet with Mr. Narigi and another representative of MCHA to further discuss this matter on March 8, 2011.

 

The TAC discussed the Initial Study and Ordinance No. 146 on March 1, 2011.  The TAC unanimously recommended that the Board proceed with filing the Initial Study and a Notice of Intent to Adopt a Mitigated Negative Declaration. 

 

RECOMMENDATION:  The Water Demand Committee should consider a recommendation to the Board.

 

IMPACT ON STAFF/RESOURCES:  Staff believes the revised ordinance has been adequately reviewed under CEQA.  Amendments to the ordinance may indicate aneed for higher levels of CEQA evaluation, including an Environmental Impact Report (EIR).  Funds are presently not available in the Fiscal Year 2010-2011 budget for an EIR. 

 

EXHIBITS

3-A      Staff Report and Attachments from February 24, 2011

3-B      February 24, 2011, Letter from David Sweigert