CALIFORNIA COASTAL COMMISSION NOVEMBER 2014 AGENDA: Appeal No. A-3-MRA-14-0050 (California-American Water Company, Marina) Appeal by California-American Water Co. of City of Marina decision denying permit for construction, operation, and decommissioning of slant test well, up to 4 monitoring well clusters, and related infrastructure at CEMEX sand mining plant, Lapis Road, Marina, Monterey County, November 12, 2014

UPDATE: Cal Am, Cemex reach deal on desalination test well
$350K pact includes option for production wells
By Jim Johnson, The Monterey County Herald, 11/06/14

RELATED NEWS ARTICLE:
Coastal Commission staff backs Cal Am test well appeal

Marina denial not justified, staff finds

By Jim Johnson, The Monterey County Herald, 11/03/2014

ABSTRACT:  On the CALIFORNIA COASTAL COMMISSION NOVEMBER 2014 AGENDA, the CALIFORNIA COASTAL COMMISSION is scheduled to consider Appeal No. A-3-MRA-14-0050 (California-American Water Company, Marina) Appeal by California-American Water Co. of City of Marina decision denying permit for construction, operation, and decommissioning of slant test well, up to 4 monitoring well clusters, and related infrastructure at CEMEX sand mining plant, Lapis Road, Marina, Monterey County. (TL-SF) on Wednesday, November 12, 2014 at Oceano Hotel & Spa, 280 Capistrano Road, Half Moon Bay, CA 94019.  The STAFF REPORT: RECOMMENDATION ON APPEAL SUBSTANTIAL ISSUE & DE NOVO HEARING and COASTAL DEVELOPMENT PERMIT document, including exhibits, correspondence and Audio Transcript Marina City Council meeting 9/3/14, is embedded.  And the SUMMARY OF STAFF RECOMMENDATION section is reproduced.  Staff Recommendation: Substantial Issue Exists; Approval of De Novo Permit with Conditions; Approval of Regular Permit with Conditions.  “…staff recommends that the Commission find that the project may be approved, despite its inconsistency with the LCP’s habitat protection policy.”

Staff Report Recommendation on Appeal Substantial Issue, De Novo Hearing And cdp Cal-Am Test Well 11-2014

STAFF REPORT: RECOMMENDATION ON APPEAL

SUBSTANTIAL ISSUE& DE NOVO HEARING and COASTAL DEVELOPMENT PERMIT

Appeal No: A-3-MRA-14-0050

Local Government: City of Marina

Decision: Denial

Application No.: 9-14-1735

Applicant/Appellant: California American Water Company

Project Location: At the site of the CEMEX, Incorporated sand mining facility, Lapis Road, City of Marina, Monterey County. (APN #203-011-001 and #203-011-019)

Project Description: Construct and operate a test slant well and associated monitoring wells to develop data necessary to assess the feasibility of the project site as a potential long-term water source for a desalination facility.

Staff Recommendation: Substantial Issue Exists; Approval of De Novo Permit with Conditions; Approval of Regular Permit with Conditions

SUMMARY OF STAFF RECOMMENDATION

Project Description

California-American Water Company (“Cal-Am”) proposes to construct, operate, and decommission a temporary test slant well, including up to four monitoring well clusters and related infrastructure, at the CEMEX sand mining facility along Monterey Bay within an extensive coastal dune complex in the City of Marina. The project would be completed during a twenty-four to twenty-eight month period. The test wellhead would be located approximately 450 feet inland of mean sea level at an elevation of about 25 feet. No development would occur directly on the beach or seafloor or in ocean waters. The main project activities include staging and site preparation, well drilling and placement of monitoring wells and electrical cables, ongoing monitoring during the test period, and well decommissioning.

Project Purpose

The project would allow Cal-Am to gather technical data related to the potential hydrogeologic and water quality effects that would result from using similar wells at or near this site to provide water for the proposed Monterey Peninsula Water Supply Project. If the data collected from this proposed test well demonstrates that this well design and location would provide the necessary amount of water and not cause unacceptable adverse effects, Cal-Am may choose to apply for additional coastal development permits to convert the test well to a production well and/or construct additional similar wells, subject to certification of an Environmental Impact Report (“EIR”) by the California Public Utilities Commission, which is preparing the document for the above-referenced water supply project.

The Commission’s approval of this proposed test well would not authorize any additional activities that may be associated with a larger or more permanent facility. Any such proposal will require additional review for conformity to the Coastal Act, which review and analysis will be conducted independently of the current decision, with the current decision exerting no influence over or causing any prejudice to the outcome of that separate decision.

Jurisdiction

The proposed project would be partially within the coastal development permit jurisdiction of the City of Marina and partially within the Commission’s retained permit jurisdiction. Development within the City’s jurisdiction includes all the project’s land-based activities, which represent almost all of the project-related development. The only part of the project within the Commission’s permit jurisdiction is the portion of the slant well that is below grade and extends

beneath the beach and seafloor.

On September 4, 2014, the City denied Cal-Am’s CDP application for development of the subject temporary test slant well. Cal-Am then filed a timely appeal of the City’s decision.

Recommendation

Staff’s recommended Findings include several key procedural and substantive issues:

Appeal: The City’s action is appealable to the Commission pursuant to Coastal Act Section 30603(a)(5), which allows appeals of any development that constitutes a major public works facility. Staff recommends the Commission determine that the appeal raises a substantial issue with the consistency of the local government’s action with the certified Local Coastal Program (“LCP”) and that the Commission hold a de novo hearing.

De Novo Review and CEQA: Staff recommends the Commission conditionally approve coastal development permits A-3-MRA-14-0050 and 9-14-0050 for the proposed project. The key concern here is the project’s unavoidable effects on environmentally sensitive habitat areas (“ESHA”).

The project would be built on the site of a sand mining facility located within an extensive area of coastal dune habitat. Although the project footprint would be within dune habitat that has been extensively disturbed by mining activities, the area retains sufficient habitat characteristics to be considered sensitive habitat. Project activities would further disturb the sensitive habitat areas in a manner not consistent with provisions of the LCP. However, because the project is a coastal-dependent industrial facility and the LCP allows such facilities in this location, consistent with Coastal Act Section 30260, the Commission may approve a permit for this project if 1) alternative locations are infeasible or more environmentally damaging; 2) denial of the permit would not be in the public interest; and, 3) the project is mitigated to the maximum extent feasible.

1) Alternative locations are infeasible or more environmentally damaging: In recognition of the state’s preference for subsurface intakes, Cal-Am has focused its efforts on identifying sites where those types of intakes are feasible. Several sites previously considered for water supply projects are either no longer available or have been subject to regulatory or legal changes that limit their feasibility. Several others are more distant from Cal-Am’s service area and would result in greater environmental impacts due to an overall larger area of disturbance. Regarding on-site alternatives, the proposed test well is sited within an already disturbed area of the dune habitat that has been affected by mining activities for the past several decades. The current on-site location was selected after consultation by resource agency representatives showed that previously proposed locations on the north end of the CEMEX site would have greater adverse effects on sensitive species and coastal resources.

2) To deny the project would not be in the public interest: Since 1995, Cal-Am and other entities in the Monterey Peninsula area have been seeking a water supply to replace that obtained from the Carmel River. Cal-Am is under an Order from the State Water Resources Control Board to significantly reduce its withdrawals from the Carmel River within the next two years. Although significant public effort has gone into previous proposed water supply options, such as a proposed dam, desalination facilities, and others, those projects have either not been completed or are no longer under consideration. The currently proposed test well is meant to provide data for a possible desalination facility that is the subject of extensive environmental and public interest review by the California Public Utilities Commission and is the subject of a Settlement Agreement among more than a dozen local governments and public interest groups. Other potential water supply projects under consideration are not as far along in design, environmental review, or permitting, so are not likely to provide the necessary replacement water supply as quickly as Cal-Am’s currently proposed facility, should the test well be successful.

3) The project is mitigated to the maximum extent feasible: Staff’s recommended Findings include several Special Conditions meant to avoid and minimize effects to ESHA. Mitigation measures required by Special Conditions 12 through 16 include biological survey requirements, training of project personnel, avoidance measures to be implemented, and restoration requirements. Additionally, Special Condition 17 requires Cal-Am to post a bond that will provide for removal of project structures and for restoration should Cal-Am not implement those requirements. Other Special Conditions require Cal-Am to implement Best Management Practices during construction, prepare a spill prevention plan, avoid coastal hazard areas, and others, all of which will result in further avoidance and minimization of potential project impacts.

Based on the analysis of these three tests in the Findings below, staff recommends that the Commission find that the project may be approved, despite its inconsistency with the LCP’s habitat protection policy.