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5 Harris Court, Bldg. D, Monterey, California 93940-5756 (831) 372-3367 or (831) 422-1001 FAX: (831) 372-6178

SPECIAL MEETING NOTICE AND AGENDA for Monday, February 11, 2013, 7:00 p.m.
BOARD OF DIRECTORS Ron Stefani, Chair Dennis Allion, Vice Chair VACANT Lou Calcagno Tom Moore Libby Downey Chris Orman Rudy Fischer Gloria De La Rosa Dave Pendergrass Ralph Rubio VACANT
[Note: MRWPCA Board Members are appointed from their respective Joint Powers Authority (JPA) jurisdictions.]

Castroville Community Services District Del Rey Oaks Boronda County Sanitation District County of Monterey Marina Coast Water District Monterey Moss Landing County Sanitation District Pacific Grove Salinas Sand City Seaside United States Army - Ex-Officio

You are invited to visit our Website @ to access a description of MRWPCA and its Mission Statement.

NOTE: All enclosures and staff materials regarding the following agenda items are available for public review on Thursday, February 7, 2013 through Monday, February 11, 2013, at the MRWPCAs Administrative Office in Monterey at Ryan Ranch, and at the public libraries located in Castroville, Marina, Monterey, Pacific Grove, Salinas, and Seaside.

MRWPCA Special Meeting Notice and Agenda February 11, 2013, 7:00 p.m.

1. 2. 3. 4.


Anyone wishing to address the Board on matters not appearing on the Agenda may do so now for not more than three (3) minutes. Comments on any other matter listed on the Agenda are welcome at the time the matter is being considered by the Board.


A. Update on Groundwater Replenishment Project Discussions Keith Israel



Action items consist of business which requires a vote by the Board. These items are acted upon in the following sequence: (1) Staff Report; (2) Board Questions to Staff; (3) Public Comments; and (4) Board Discussion and Action.


Consider FY 2012/13 Urban Reclamation Fund Budgets That the Board Approve FY 2012/13 Budgets for Regional Urban Water Augmentation Project (RUWAP UR 501) for $25,000, Monterey Peninsula Groundwater Replenishment Project (GWR UR 502) for $750,000, Brine and Ocean Outfall (UR 504) for $25,000, and Urban Reclamation Public Outreach (UR 505) for $25,000.


A. Letter to MCWRA to propose development of a plan to secure water sources for the growers, February 1, 2013



Board Members may ask a question for clarification, make a brief announcement or make a brief comment or report on his or her own activities within the jurisdiction of the Agency. No discussion or action is appropriate other than referral to staff for consideration or setting a matter as a future agenda item.

Set next meeting(s)/location(s)/date(s)/time(s): Regular and/or Special Meeting(s): A.

Location: MRWPCA Board Room - Ryan Ranch Date(s)/Time(s):

REGULARLY SCHEDULED BOARD MEETING Monday, February 25, 2013 at 7:00 pm 2

MRWPCA Special Meeting Notice and Agenda February 11, 2013, 7:00 p.m.


This Meeting Notice and Agenda was posted at the Administrative Offices of the MRWPCA, 5 Harris Court, Building D, Monterey, California, action may be taken on any of the items agendized above. POSTED: BY: Thursday, February 7, 2013
[Posted 72 hours in advance per requirements of the Brown Act]



Executive Assistant










Total Estimated Cost: Amt Expended to Date: Amt Budgeted FY 12/13: New Funding Required: New Revenue: Revenue Impact: New Personnel? Change in Board Policy?

$ 825,000 $ 350,000 $0 $ 50,000 $ 375,000 $ 400,000 NO NO

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PRIOR BOARD ACTIONS: Approved MOU with MPWMD regarding Prop 218 fees for GWR support; approve resolutions to accept matching grant funds for support of GWR; approve staff discussions with stakeholders to consider water needs of the regional area. If budget funding is not approved, funding support for urban water recycling project will be denied; studies to remedy the Salinas Industrial Ponds issues will be delayed; the CEQA work for the GWR project will be delayed; and the project will likely not be complete d by December 2016. RWC has monitored and considered the GWR project progress and the project costs, and has approved moving forward in collaboration with the City of Salinas to address their water issues; BPC has also reviewed the GWR expenditures. Both committees have encouraged continuing support to the SVRP and CSIP while balancing the need for consideration of recycling water projects for other entities. Approve the Recommended Motion. 1. Staff Report on Urban Reclamation Fund Budget 2. MCWRA Proposal 3. Groundwater Replenishment Interim Budgets 4. Groundwater Replenishment Project Timeline 5. Financial Summary of Reserves, December 2013 That the Board approve FY 2012/13 budgets for Regional Urban Water Augmentation Project (RUWAP UR 501) for $25,000, Monterey Peninsula Groundwater Replenishment Project (GWR UR 502) for $750,000, Brine and Ocean Outfall (UR 504) for $25,000, and Urban Reclamation Public Outreach (UR 505) for $25,000.





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MRWPCA Board of Directors Special Board Meeting February 11, 2013

BACKGROUND AND INFORMATION: The Urban Reclamation part of the budget was not considered by the Board last June 2012. Initially the primary reason for this delay was a question as to the ability of the MPWMD to fund their portion of the planning effort due to possible challenges to their June 2012 user fee. Later last fall when the Urban Reclamation Budget was proposed to the Board, there were not enough votes to approve it. Concerns were raised by Growers/MCWRA regarding the water rights for the Groundwater Replenishment Project. Over the last six months, staff has conducted a series of meetings with the Growers/MCWRA which were later expanded to include the Marina Coast Water District and the City of Salinas. The Growers/MCWRA suggested that it would be helpful if MRWPCA adopted a resolution confirming that the Growers had a firm 19,500 AFY of recycled water rights. Various attempts were suggested between the parties regarding such a resolution, but there was not a consensus on the language. The MCWRA has requested that the attached resolution (Attachment A) be considered by the Board. MRWPCA staff has not recommended it for approval for several reasons: 1. Due to current and projected conservation, it is extremely unlikely that 19,500 AFY will ever be available in the future. 2. It is very difficult to take a series of agreements between multiple agencies and arrive at one number for all situations 3. The MRWPCAs own water rights analysis as filed with the CPUC in July 2012 does not match the 19,500 AFY figure. Instead, MRWPCA staff has proposed that by all parties (MCWRA, MRWPCA, MCWD and City of Salinas) working together to combine available waters, it is possible to meet all current and projected water needs at costs that are affordable. Staff strongly suggests that the best way to resolve the water rights questions are to confirm that we can jointly combine water sources at a price all can afford. Once this is confirmed we propose that a new amendment number 4 with the MCWRA be

SPECIAL MRWPCA BOARD MEETING February 11, 2013 Urban Reclamation Fund Budgets developed. Additionally, MOUs with MCWD and the City of Salinas may also be appropriate. To accomplish the above, MRWPCA needs to start technical feasibility studies to confirm the feasibility and cost of water projects for each of the parties sharing water. We expect that a preliminary report can be completed by June 2013. We also need to begin critical path work at this time for the design of the GWR Project as outlined in the budget breakdown. As noted below, we have available MRWPCA reserves to complete the work through the end of the fiscal year. In addition, the MPWMD will provide matching funds for the planning efforts. And, finally, we have grant funds that can cover part of the cost.

EXPENDITURES TO DATE: The Recycled Water Committee recommended and the Board approved a fiscal year 2011-2012 budget of $789,000 excluding internal labor costs. $253,957 of that money was not expended last year mostly due to the delay in constructing the monitoring well. The accumulated expenses to date and current expenses are shown below: Out-of-Pocket Expenditures
Expense Technical/Consultants Legal Environmental Public Outreach Watermaster (reimbursement) MPWMD (reimbursement) SRF Feasibility Grant (reimbursement) BOR Title 16 WaterSMART Grant (reimbursement) Total Without Internal Labor FY 05/06 through FY 10/11 $740,939 $78,745 $61,345 $672,994 ($100,000) $0 $0 $0 $1,454,023 FY 11/12 $354,928 $147,388 $32,168 $557 $0 $0 $0 $0 $535,041 FY 12/13 $26,470 $88,652 $41,998 $0 $0 $0 $0 $0 $157,120 Total To Date $1,122,337 $314,785 $135,511 $673,551 ($100,000) $0 $0 $0 $2,146,184

Total Expenditures
Total With Internal Labor $2,090,913 $796,880 $326,241 $3,214,034
Updated 2/1/13

CURRENT RESERVE AND PROJECT FUNDING As shown on the attached pages from the January Board packet, we have $7,541,491 in reserves as of December 31, 2012. Prior reserve balances include $6,692,117 at the 2

SPECIAL MRWPCA BOARD MEETING February 11, 2013 Urban Reclamation Fund Budgets

end of November; $7,806,355 at the end of October; and, $6,803,662 at the end of September. As noted on the attached GWR Interim Budget (Attachment B) funds for GWR Planning and Preliminary Design would be a loan from the Unrestricted General Fund Reserves that will be paid back once a project is approved. The opportunity to complete GWR by December 2016 is likely to close this month; staff now comes back to the Board to request approval of the Urban Reclamation Budget as proposed below:

BUDGET RECOMMENDATIONS: A. Approve FY 2012/13 UR-501 Budget UR-501 covers the expenses related to the Regional Urban Water Augmentation Project (RUWAP) and winter storage of recycled water. Expected expenditures include: Consultant Legal Internal Labor Total $8,000 $3,000 $14,000 $25,000

Expenditures are for review of options and discussions with MCWD

B. Approve FY 2012/13 UR-502 Budget UR-502 covers the expenses related to the Monterey Peninsula Groundwater Replenishment Project (GWR). The Board approved $789,000 excluding internal labor for FY 2011/12. Mostly due to delays in the Monitoring Well installation, $253,957 was not expended that year. Limited expenditures during FY 20012/13 were based on this carry-over. Following is detailed description of expenditures shown on the attached GWR Interim Budget (Attachment B): CEQA a key expenditure for GWR on the critical path that includes various consultants helping to establish the project description and then working on the Project Scoping. Legal another key item to assist in establishing the CEQA legal footing and for negotiations with various parties. 3

SPECIAL MRWPCA BOARD MEETING February 11, 2013 Urban Reclamation Fund Budgets

Feasibility Study This work is not on the critical path, but it is very important to complete at this time. The first phase of this study is to look at various options like using the Salinas Industrial Treatment Plant, Blanco Drain, stormwater, and Reclamation Ditch waters as the source water for the GWR. The study will also develop costs for various options discussed with MCWRA, the growers, the City of Salinas, and MCWD. The two grants were issued to support this study including a second phase that will look at pilot treatment of the various waters. Without starting this study, MRWPCA might not be able to retain the grants. Monitoring Well includes $24,999 encumbered by FORA for permit review. FORA required that amount although FORA staff suggested that the cost may be closer to $12,000. Reimbursement from the two grants may not be received until FY14. Reimbursement from MPWMD is expected in both FY13 and FY14 for the above expenses associated with the GWR Project.

C. Approve FY 2012/13 UR-504 Budget UR-504 covers the expenses related to the Brine and the Ocean Outfall. Expected expenditures include: Consultant Legal Internal Labor Total $1,500 $15,000 $8,500 $25,000

Expenditures are for discussions/negotiations with Cal Am related to their brine disposal. These costs are expected to be reimbursed when a desalination plant begins operation.

D. Approve FY 2012/13 UR-505 Budget UR-505 covers the expenses related to Urban Reclamation Public Outreach. Expected expenditures include: Consultant Internal Labor Total $15,000 $10,000 $25,000

SPECIAL MRWPCA BOARD MEETING February 11, 2013 Urban Reclamation Fund Budgets

Expenditures are for public outreach mainly for the Monterey Peninsula Groundwater Replenishment Project. Much of the public outreach is performed and spearheaded by MRWPCA staff.

RECOMMENDATION: That the Board approve FY 2012/13 budgets for Regional Urban Water Augmentation Project (RUWAP UR 501) for $25,000, Monterey Peninsula Groundwater Replenishment Project (GWR UR 502) for $750,000, Brine and Ocean Outfall (UR 504) for $25,000, and Urban Reclamation Public Outreach (UR 505) for $25,000.
Attachment A: Attachment B: Attachment C: Attachment D: Proposed Resolution from MCWRA Budget for Groundwater Replenishment Project Groundwater Replenishment Project Timeline Financial Summary of Reserve Funds, December 31, 2012

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I. Monterey Regional Water Pollution Control Agency ("MRWPCA") entered into an Annexation Agreement, dated April 25. 1989, with Marina Coast Water District ("MCWD") providing. among other things. annexation of MCWD and to become a member entity of MRWPCA.
2. MRWPCA entered into an Agreement with Monterey County Water Resources Agency ("MCWRA"). dated June 16. 1992. tor construction and operation of a tertiary treatment system (the "1992 Agreement"). with subsequent amendments thereto, as follows: Amendment No. I on May 30, 1994. Amendment No.2 on February 16. 1998, and Amendment No.3 on May 28,2002. a. Section 3.04 of the 1992 Agreement reads as follows: Warranties. WPCA warrants that all water committed to the project shall be transferred to the project free and clear of all claims by any person or entity, ex,ept as .\pecified herein, and that all water produced by the project, up to the project's initial capacity of 29.6 MGD 1, shall be distributed in conformity with the terms of this contract. b. Section 3.03 ofthe 1992 Agreement reads as follows: Dedication o[ in,oming flows. WPCA will commit all of its incoming wastewater flows to the project, up to the project capacity of29.6 MGD, except for (a) flows taken by Marina County Water District (MCWD) pursuant to the Annexation Agreement between MCWD and WPCA dated April 25, 2989, (b) such flows as are lost or as must be diverted in the ordinary course of operating and maintaining the treatment plant and ocean outfall, and (c) such .flows as are not needed to meet WRA 's anticipated demand under Article IV. c. Exhibit "C" of the 1992 Agreement states, in part, "the ultimate goal of the Wastewater Reclamation System is to produce at least 19,500 acre-feet of tertiary treated water for use each year in the Castroville Irrigation System ("CSIP"). d. Section 6.0 I of the 1992 Agreement causes MCWRA to make payments to MR WPCA as consideration for water provided and obligations performed by MR WPCA.

33,154 acre-ftlyear

Attachment A Page 1 of 3

J. Section IV. Paragraph 4.02 of Amendment No.3 to the 1992 Agreement limits MCWRA's recycled water right entitlement to 19,500 acre-ft/year during the "initial h:rm".

4. Section IV. Paragraph 4.03, of Amendment No.3 to the 1992 Agreement provides MCWRA a recycled water right entitlement equal to an amount of water equal to the amount of wastewater originating in the Salinas Valley water that was delivered to the WPCA during the year preceding the year for which the water deliveries are requested during the "extended term".
5. MCWRA, as a minimum, intends to expand its CSIP operation and territory no later than 2022 to further halt seawater intrusion. Annual actual usage will increase 5,500 acre-ftlyear to the basic demand amount of S19,500 acre-ftlyear.

6. MRWPCA desires to utilize 4,300 acre-ftlyear of recycled water for its proposed Groundwater Replenishment Project, commencing in 2017. 7. MRWPCA requires a firm, uninterruptible, supply of recycled water in order to obtain financing for its Groundwater Replenishment Project.

Attachment A Page 2 of 3

I. MR WPCA reaffirms MCWD's recycled water right entitlement granted to MCWD pursuant to Paragraph 12 of the April 25, 1989 Annexation Agreement between MRWPCA and MCWD. Said water rights equal. as a minimum. the "volume ofMCWD treated by MRWPCA." which volume approximates 2,240 acre-ftlyear in 2012. 2. MRWPCA reatlinns MCWRA's recycled water right entitlement of 19.500 acretllyear during the "initial term". as defined in the 1992 Agreement. 3. In lieu of future inground storage of 5,500 acre-ftlyear of recycled water during winter months, commencing no later than 2022, MCWRA would be willing to commit to exchange 5,500 acre-ftlyear recycled water right entitlements for MRWPCA's supplying 5.500 acre-ftlyear of tertiary treated water water rights from new sources during summer months. 4. MR WPCA and MCWD will enter into an agreement whereby MCWD will longterm lease or sell its recycled water right entitlement to MR WPCA. 5. MRWPCA and MCWRA will enter into an agreement leasing MWRA's 2,300 acre-ftlyear of recycled water right entitlements to MRWPCA. Said water right entitlements to be utilized during November- February time frame for a period ending December 31,2021. 6. MR WPCA in its use of recycled water for the Groundwater Replenishment Project, will comply with all applicable requirements set for the in Contract No. 5-07-20W1283, between the Bureau of Reclamation and MCWRA including, but not limited to, those contained in Paragraphs lOb and tOe, all at MRWPCA's sole cost and expense. 7. MRWPCA agrees to amend Section IV, Paragraph 4.03 of Amendment No.3 to the 1992 Agreement to include a minimum recycled water right entitlement of 19,500 acre-ftlyear during the "extended term".

Attachment A Page 3 of 3

Groundwater Replenishment Project Interim Budget

Technical Consultants-Planning Technical Consultants-CEQA Project Description Technical Consultants-Feasibility Legal Environmental-CEQA Lobbyist Misc. CPUC & other mtgs. Monitoring Well [biological survey and FORA permits

FY 2012/13 to Date

Remainder of FY
37,095 43,991

Total FY 2012/13
8,376 37,095 43,991 143,652 104,948 19,973 1,986 53,583 50,000 463,605 286,395 750,000

88,652 19,948 13,573 986 25,584

55,000 85,000 6,400 1,000 27,999 50,000

Contingency Total Expenditures without Labor Internal Labor Total Expenditures with Labor 157,120 169,121 326,241

306,485 117,274 423,759

SRF Feasibility Grant (in FY14) BOR WaterSMART Grant (in FY14) MPWMD (additional in FY14) MRWPCA (loan from reserves) Total Reimbursements Expenditures Less Reimbursements NOTE: $253,957 was unspent for FY 2011/12
Attachment B Page 1 of 1

25,000 50,000 300,000 326,241 326,241 48,759 423,759

25,000 50,000 300,000 375,000 750,000 0

Groundwater Replenishment Schedule

1Q 2Q 3Q 4Q 1Q

2Q 3Q

1Q 2Q 3Q 4Q 1Q

2Q 3Q 4Q

CEQA+ Monitoring Well Feasibility Study Pilot Treatment Treatment Design Construction Outreach
Critical Path Regular Red Border - Cal Am Anticipated Decision Point
Updated: 2/7/13

Attachment C Page 1 of 1


PAR VALUE 467,663.58 3,919,782.36 877,169.23 3,116,731.52 10,850.49 37,794.74 ____________ 8,429,991.92 NOTE: The General Fund Investment Account balance includes: 2012 Bond reserve LWH - Certificate of Deposits General Fund Restricted Restricted Unrestricted GENERAL FUND TOTAL CAPITALIZED EQUIPMENT FUND SBB&T Savings 913,587.31 _________ 913,587.31 CAPITAL IMPROVEMENT FUND SB&T SB&T SB&T Cash Savings Capacity Fees 93,692.83 2,219,124.75 30,236.08 ___________ 2,343,053.66 MRWPCA TOTAL RESTRICTED 2012 Bond reserve LWH - Certificate of Deposits Capitalized Equipment Fund Capital Improvement Fund UNRESTRICTED General Fund Restricted Restricted Restricted Restricted $ Unrestricted MRWPCA TOTAL $ 885,500.00 3,000.00 913,587.31 2,343,053.66 4,145,140.97 7,541,491.92 0.050 0.600 0.050 93,692.83 2,219,124.75 30,236.08 ___________ 2,343,053.66 93,692.83 2,219,124.75 30,236.08 ___________ 2,343,053.66 $ 11,686,632.89 0.500 913,587.31 _________ 913,587.31 913,587.31 _________ 913,587.31 $ 885,500.00 3,000.00 7,541,491.92 ____________ 8,429,991.92 0.500 0.320 YIELD TO MATURITY 0.050 0.600 BOOK VALUE 467,663.58 3,919,782.36 877,169.23 3,116,731.52 10,850.49 37,794.74 ___________ 8,429,991.92 MARKET VALUE 467,663.58 3,919,782.36 877,169.23 3,116,731.52 10,850.49 37,794.74 ___________ 8,429,991.92


TYPE Cash MMF Lien Savings Savings


$ 11,686,632.89

Per government code requirements, this schedule of investments is in compliance with MRWPCA's Investment policy

Attachment D
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RECLAMATION/SRDF * SVRP & CSIP O&M SRDF O&M SVRP SAVINGS CSIP SAVINGS SVRP BUREAU OF RECL RESERVE CSIP BUREAU OF RECL RESERVE SVRP SWRCB RESERVE SVRP EQUIP REPL RESERVE CSIP EQUIP REPL RESERVE SRDF EQUIP REPL RESERVE 0.050 0.050 0.600 0.600 0.600 0.600 0.600 0.600 0.600 0.600 RECLAMATION FUNDS TOTAL $ 1,818,073.92 686,070.39 185,192.58 132,038.83 157,877.15 303,620.69 503,659.27 323,604.24 203,620.51 50,111.99 4,363,869.57 *

TOTAL OF ALL FUNDS * MCWRA funds are held and invested by MRWPCA ** All funds include MCWRA funds as noted above

$ 16,050,502.46 **

Per government code requirements, this schedule of investments is in compliance with MRWPCA's Investment policy

Attachment D
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Monterey Regional Water Pollution Control Agency

"Dedicated to meeting the wastewater and reclamation needs of our member agencies, while protecting the environment."

Administration Office: 5 Harris Court, Bldg. 0, Monterey, CA 93940-5756 (831) 372-3367 or 422-1001, FAX: (831) 372-6178 Website:

February 1, 2013

Mr. David Chardavoyne Interim General Manager Monterey County Water Resources Agency P.O. Box 930 Salinas, CA 93902 Dear Dave, Per our discussion last Monday (January 28), I wanted to follow up and better outline and summarize the results of our dialogue to date. In particular and as pointed out via graphical charts, we believe we can address the MCWRA and grower concerns over our proposed Groundwater Replenishment (GWR) Project by bringing in new sources of water. In addition, we think it is also possible to blend in low salt reverse osmosis water from the GWR plant to make sure that the overall recycled water to CSIP will have a low enough salt content and SAR to assure continued agricultural production well into the future. We also believe that there will be enough new water to allow for future expansion of the CSIP. To reconfirm our proposed next steps, on February 11 we plan on holding a Special Board Meeting to go over the results of our discussions over the last six months and outline a plan for addressing your concerns regarding GWR implementation. One key component is development of a comprehensive plan which would outline the details and likely costs of the water sources needed by GWR as well as assure suitable water for current and future CSIP operations. To help accomplish tliis, we will also ask our Board to approve an updated recycled water budget through the end of this fiscal year (June 2013). We believe that we will need some external engineering assistance to help define costs and options related to these water sources. In particular, it would be helpful if you could confirm in some detail your future CSIP priorities so that we

Joint Powers Authority Member Entities: Boronda County Sanitation District, Castroville Community Services District, County of Monterey, Del Rey Oaks, Fort Ord, Marina Coast Water District, Monterey, Moss Landing County Sanitation District, Pacific Grove, Salinas, Sand City, and Seaside.

Dave Chardavoyne, MCWRA February 1, 2013 Page 2 of2

can develop a specific enough plan to meet future needs. It would be helpful if you could provide such information by February 22.

Again, thanks for your ongoing participation and we look for your support so that we can develop a mutually beneficial plan for the future. Sincerely,

Keith Israel General Manager

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