CITY OF
CARMEL-BY-THE-SEA
CITY COUNCIL
AGENDA
CITY COUNCIL
SPECIAL MEETING
Monday, December
2, 2019
4:30 PM
Wednesday, November 27, 2019
FIFTEEN NOTEWORTHY CITY COUNCIL REGULAR MEETING AGENDA ITEMS, December 3, 2019
ABSTRACT: Fifteen Noteworthy City Council Regular Meeting Agenda Items, December 2,
2019, including PUBLIC
APPEARANCES, ANNOUNCEMENTS;
CONSENT AGENDA including Approve October 28, 2019 Special Meeting Minutes,
November 4, 2019 Special Meeting Minutes, November 5, 2019 Meeting Minutes and
November 19, 2019 Special Meeting Minutes as presented, Monthly Reports for
October: 1). City Administrator Contract Log; 2.) Community Planning and
Building Department Reports; 3.) Police, Fire, and Ambulance Reports; 4.)
Public Records Act Requests, and 5.) Public Works Department Report, October
2019 Check Register Summary, Adopt Resolution 2019-083, authorizing the City
Administrator to execute Amendment #1 to the Master Program Funding Agreement
between the Transportation Agency for Monterey County and the City of
Carmel-by-the-Sea, Adopt Resolution 2019-086 authorizing the City Administrator
to execute Change Order No. 2 to the On-Call, As-Needed Tree Services Contract
with West Coast Arborists for a total not-to-exceed fee increase of $25,000, Adopt
Resolution 2019-087 approving the Memorandum of Understanding (MOU) between the
City of Carmel-by-the Sea General Employees Union – an affiliate of the Laborers’
International Union of North America, United Public Employees of California,
LIUNA/UPEC, Local 792, AFL-CIO; and the City of Carmel-by-the-Sea Management
Employees Union - an affiliate of the Laborers’ International Union of North
America, United Public Employees of California, LIUNA/UPEC, Local 792, AFL-CIO
for the period July 1, 2019 through June 30, 2022 and authorize the City Administrator
to make technical corrections as necessary and execute the Memorandum of
Understanding, Adopt Resolution 2019-088 authorizing the City Administrator to
execute a Professional Services Agreement with Nichols Consulting Engineers,
for a not-to-exceed fee, including contingency, of $132,899, for the Scenic
Pathway Renovation Project, Adopt Resolution 2019-089, authorizing the City Administrator
to Execute a 3-year Professional Services Agreement with Applied Marine Sciences
for Microbial and Copper Source Tracking to meet State Requirements for Areas
of Special Biological Significance, Adopt Resolution 2019-090 authorizing the
City Administrator to execute an agreement for the purchase of six emergency radios for the fire
department as identified in the FY 2019/20 budget as a Capital Improvement, Adopt
Resolution 2019-091, authorizing the City Administrator to execute Amendment No.
1 to the Professional Services Agreement with Surveillance Grid Integration, in
the amount of $20,589, to install video processors and wall monitors for the
Security Pole Camera Project and Adopt Resolution 2019-092 approving the
Memorandum of Understanding (MOU) between the City and Carmel-by-the-Sea Police
Officers Association for the period July 1, 2019 through June 30, 2022 and
authorize the City Administrator to make technical corrections as necessary and
execute the Memorandum of Understanding and adopt the Police Officers Association
classifications salary plan in accordance with Municipal Code 2.52.520; PUBLIC
HEARINGS including Ordinance
2019-002 amending Carmel Municipal Code (CMC) Title 15 (Buildings and
Construction) by adopting the 2019 editions of the California Building (CBC), Residential
(CRC), Energy (CEnC), Fire (CFC), Mechanical (CMC), Plumbing (CPC), Electrical
(CEC), Green Building Standards (CGBSC), Historic Building (HBC), and Existing Building
Codes (EBC) with local amendments; and adopt Resolution 2019-077 approving
Standard Operating Guidance Procedures (SOG 17-07) for private stormwater
drainage systems and Introduce Ordinance 2019-003 amending Carmel Municipal Code
(CMC) Chapters 17.08, 17.14, 17.28, 17.68 and 17.70 to establish regulations
for transient rentals in the Commercial and Multi-Family Zoning Districts and
to prohibit the advertising of unpermitted transient rentals within all Zoning
Districts. The CITY
OF CARMEL-BY-THE-SEA CITY COUNCIL AGENDA CITY COUNCIL SPECIAL MEETING Tuesday,
December 3, 2019 and Staff
Report document copies are embedded.
Adopt Resolution
2019-089, authorizing the City Administrator to Execute a 3-year Professional
Services Agreement with Applied Marine Sciences for Microbial and Copper Source
Tracking to meet State Requirements for Areas of Special Biological Significance.
CITY OF
CARMEL-BY-THE-SEA
CITY COUNCIL
AGENDA
REGULAR MEETING
Tuesday,
December 3, 2019
OPEN SESSION 4:30
PM
CALL TO ORDER
AND ROLL CALL
Mayor Dave
Potter, Council Members Jeff Baron, Jan Reimers, Bobby Richards, and Carrie
Theis
OPEN SESSION
PUBLIC
APPEARANCES
Members of the
Public are invited to speak on any item that does not appear on the Agenda and
that is within the subject matter jurisdiction of the City Council. The
exception is a Closed Session agenda, where speakers may address the Council on
those items before the Closed Session begins. Speakers are usually given three
(3) minutes to speak on any item; the time limit is in the discretion of the
Chair of the meeting and may be limited when appropriate. Applicants and
appellants in land use matters are usually given more time to speak. If an
individual wishes to submit written information, he or she may give it to the
City Clerk. Speakers and any other members of the public will not approach the
dais at any time without prior consent from the Chair of the meeting.
ANNOUNCEMENTS
A. City
Administrator Announcements
B. City Attorney
Announcements
C. Councilmember
Announcements
CONSENT AGENDA
Items on the
consent agenda are routine in nature and do not require discussion or
independent action. Members of the Council, Board or Commission or the public
may ask that any items be considered individually for purposes of Council,
Board or Commission discussion and/ or for public comment. Unless that is done,
one motion may be used to adopt all recommended actions.
1. Approve October
28, 2019 Special Meeting Minutes, November 4, 2019 Special Meeting Minutes,
November 5, 2019 Meeting Minutes and November 19, 2019 Special Meeting Minutes
as presented.
Approve October
28, 2019 Special Meeting Minutes, November 4, 2019 Special Meeting Minutes,
November 5, 2019 Meeting Minutes and November 19, 2019 Special Meeting Minutes
as presented.
2. Monthly Reports
for October: 1). City Administrator Contract Log; 2.) Community Planning and
Building Department Reports; 3.) Police, Fire, and Ambulance Reports; 4.)
Public Records Act Requests, and 5.) Public Works Department Report
Monthly Reports
for October: 1). City Administrator Contract Log; 2.) Community Planning and
Building Department Reports; 3.) Police, Fire, and Ambulance Reports; 4.)
Public Records Act Requests, and 5.) Public Works Department Report
3. October 2019
Check Register Summary
October 2019
Check Register Summary
4. Adopt Resolution
2019-083, authorizing the City Administrator to execute Amendment #1
to the Master Program Funding Agreement between the Transportation Agency for
Monterey County and the City of Carmel-by-the-Sea
Adopt Resolution
2019-083, authorizing the City Administrator to execute Amendment #1
to the Master Program Funding Agreement between the Transportation Agency for
Monterey County and the City of Carmel-by-the-Sea
7. Adopt Resolution
2019-086 authorizing the City Administrator to execute Change Order No. 2 to
the On-Call, As-Needed Tree Services Contract with West Coast Arborists for a
total not-to-exceed fee increase of $25,000.
Adopt Resolution
2019-086 authorizing the City Administrator to execute Change Order No. 2 to
the On-Call, As-Needed Tree Services Contract with West Coast Arborists for a
total not-to-exceed fee increase of $25,000.
8. Adopt Resolution
2019-087 approving the Memorandum of Understanding (MOU) between the City of
Carmel-by-the Sea General Employees Union – an affiliate of the Laborers’
International Union of North America, United Public Employees of California,
LIUNA/UPEC, Local 792, AFL-CIO; and the City of Carmel-by-the-Sea Management
Employees Union - an affiliate of the Laborers’ International Union of North
America, United Public Employees of California, LIUNA/UPEC, Local 792, AFL-CIO
for the period July 1, 2019 through June 30, 2022 and authorize the City Administrator
to make technical corrections as necessary and execute the Memorandum of Understanding.
Adopt Resolution
2019-087 approving the Memorandum of Understanding (MOU) between the City of
Carmel-by-the Sea General Employees Union – an affiliate of the Laborers’
International Union of North America, United Public Employees of California,
LIUNA/UPEC, Local 792, AFL-CIO; and the City of Carmel-by-the-Sea Management
Employees Union - an affiliate of the Laborers’ International Union of North
America, United Public Employees of California, LIUNA/UPEC, Local 792, AFL-CIO
for the period July 1, 2019 through June 30, 2022 and authorize the City Administrator
to make technical corrections as necessary and execute the Memorandum of
Understanding.
9. Adopt Resolution
2019-088 authorizing the City Administrator to execute a Professional Services
Agreement with Nichols Consulting Engineers, for a not-to-exceed fee, including
contingency, of $132,899, for the Scenic Pathway Renovation Project
Adopt Resolution
2019-088 authorizing the City Administrator to execute a Professional Services
Agreement with Nichols Consulting Engineers, for a not-to-exceed fee, including
contingency, of $132,899, for the Scenic Pathway Renovation Project
10. Adopt Resolution
2019-089, authorizing the City Administrator to Execute a 3-year Professional
Services Agreement with Applied Marine Sciences for Microbial and Copper Source
Tracking to meet State Requirements for Areas of Special Biological Significance.
11. Adopt Resolution
2019-090 authorizing the City Administrator to execute an agreement for the
purchase of six emergency radios for the fire department as identified in the
FY 2019/20 budget as a Capital Improvement.
Adopt Resolution
2019-090 authorizing the City Administrator to execute an agreement for the
purchase of six emergency radios for the fire department as identified in the
FY 2019/20 budget as a Capital Improvement.
12. Adopt Resolution
2019-091, authorizing the City Administrator to execute Amendment No. 1 to the
Professional Services Agreement with Surveillance Grid Integration, in the
amount of $20,589, to install video processors and wall monitors for the
Security Pole Camera Project.
Adopt Resolution
2019-091, authorizing the City Administrator to execute Amendment No. 1 to the
Professional Services Agreement with Surveillance Grid Integration, in the
amount of $20,589, to install video processors and wall monitors for the
Security Pole Camera Project.
13. Adopt Resolution
2019-092 approving the Memorandum of Understanding (MOU) between the City and
Carmel-by-the-Sea Police Officers Association for the period July 1, 2019
through June 30, 2022 and authorize the City Administrator to make technical
corrections as necessary and execute the Memorandum of Understanding and adopt
the Police Officers Association classifications salary plan in accordance with Municipal
Code 2.52.520.
Adopt Resolution
2019-092 approving the Memorandum of Understanding (MOU) between the City and
Carmel-by-the-Sea Police Officers Association for the period July 1, 2019
through June 30, 2022 and authorize the City Administrator to make technical
corrections as necessary and execute the Memorandum of Understanding and adopt
the Police Officers Association classifications salary plan in accordance with Municipal
Code 2.52.520.
PUBLIC HEARINGS
14. Ordinance
2019-002 amending Carmel Municipal Code (CMC) Title 15 (Buildings and
Construction) by adopting the 2019 editions of the California Building (CBC), Residential
(CRC), Energy (CEnC), Fire (CFC), Mechanical (CMC), Plumbing (CPC), Electrical
(CEC), Green Building Standards (CGBSC), Historic Building (HBC), and Existing Building
Codes (EBC) with local amendments; and adopt Resolution 2019-077 approving
Standard Operating Guidance Procedures (SOG 17-07) for private stormwater
drainage systems.
Ordinance
2019-002 amending Carmel Municipal Code (CMC) Title 15 (Buildings and
Construction) by adopting the 2019 editions of the California Building (CBC), Residential
(CRC), Energy (CEnC), Fire (CFC), Mechanical (CMC), Plumbing (CPC), Electrical
(CEC), Green Building Standards (CGBSC), Historic Building (HBC), and Existing Building
Codes (EBC) with local amendments; and adopt Resolution 2019-077 approving
Standard Operating Guidance Procedures (SOG 17-07) for private stormwater
drainage systems.
15. Introduce
Ordinance 2019-003 amending Carmel Municipal Code (CMC) Chapters 17.08, 17.14,
17.28, 17.68 and 17.70 to establish regulations for transient rentals in the
Commercial and Multi-Family Zoning Districts and to prohibit the advertising of
unpermitted transient rentals within all Zoning Districts.
Introduce
Ordinance 2019-003 amending Carmel Municipal Code (CMC) Chapters 17.08, 17.14,
17.28, 17.68 and 17.70 to establish regulations for transient rentals in the
Commercial and Multi-Family Zoning Districts and to prohibit the advertising of
unpermitted transient rentals within all Zoning Districts.
ADJOURNMENT
Thursday, November 14, 2019
CALIFORNIA COASTAL COMMISSION UPDATE ON CAL AM ITEMS Th8a & 9a (November 14, 2019)
UPDATE:
UPDATE ON CAL AM ITEMS Th8a & 9a
(as of November 6, 2019)
The Coastal Commission will be holding a public hearing on the proposed Cal-Am water project on Thursday, November 14, 2019, but it will not take a final vote to approve or deny the project. Instead, this item will be continued to a later date. The reason for the change is that Coastal Commission staff met with CPUC staff to discuss the posted staff recommendation on the Cal-Am project. The CPUC staff raised a range of new technical questions regarding water supply and demand, potential ground water impacts, and the Pure Water expansion alternative – all of which require further investigation. The Coastal Commission staff believes that it is essential to hear applicant, agency, and public comments in a public hearing and to explore the key remaining technical questions before the Commission considers voting on the project proposal. The Commission will hold the public hearing in Half Moon Bay (Oceano Hotel & Spa, 280 Capistrano Road, Half Moon Bay), as planned and accept testimony at the Marina offsite location (City of Marina Council Chambers, 211 Hillcrest Ave., Marina), as planned, consistent with the posted hearing procedures. A second hearing will be scheduled, possibly in Scotts Valley in March 2020, where the public will again have ample opportunity to give testimony on the project before a final decision.
Thank you.
- 8 New Appeals
- November 2019 Appeal No. A-3-MRA-19-0034 (California American Water Company, et al., Monterey Co.)Appeal by California American Water Company, Brian LeNeve, Castroville Community Services District, and Commissioners Howell and Uranga of City of Marina decision denying permit for construction and operation of well field, pipelines, and associated infrastructure at the CEMEX sand mining facility, Lapis Road, Marina, Monterey County, to be used to provide source water for a desalination facility that would be located outside the coastal zone in Monterey County. (TL-SF) Submit CommentSUBSTANTIAL ISSUE FOUND, de Novo Hearing CONTINUED
- 9 Coastal Permit Applications
- November 2019 Application No. 9-19-0918 (California American Water Co., Seaside, Monterey Co.)Application of California American Water Company for consolidated permit to construct and operate water delivery pipelines and associated infrastructure within the City of Seaside, County of Monterey, and Commission’s retained jurisdiction to support a desalination facility that would be located outside the coastal zone in Monterey County. (TL-SF) Submit CommentCONTINUED
UPDATE ON CAL AM ITEMS Th8a & 9a
(as of November 6, 2019)
The Coastal Commission will be holding a public hearing on the proposed Cal-Am water project on Thursday, November 14, 2019, but it will not take a final vote to approve or deny the project. Instead, this item will be continued to a later date. The reason for the change is that Coastal Commission staff met with CPUC staff to discuss the posted staff recommendation on the Cal-Am project. The CPUC staff raised a range of new technical questions regarding water supply and demand, potential ground water impacts, and the Pure Water expansion alternative – all of which require further investigation. The Coastal Commission staff believes that it is essential to hear applicant, agency, and public comments in a public hearing and to explore the key remaining technical questions before the Commission considers voting on the project proposal. The Commission will hold the public hearing in Half Moon Bay (Oceano Hotel & Spa, 280 Capistrano Road, Half Moon Bay), as planned and accept testimony at the Marina offsite location (City of Marina Council Chambers, 211 Hillcrest Ave., Marina), as planned, consistent with the posted hearing procedures. A second hearing will be scheduled, possibly in Scotts Valley in March 2020, where the public will again have ample opportunity to give testimony on the project before a final decision.
Thank you.
Friday, November 08, 2019
CALIFORNIA COASTAL COMMISSION Hearing Procedures & FAQ Agenda Item Th8a & 9a – California-American Water Company Desalination Facility
California Coastal Commission Hearing Procedures
Agenda Item Th8a & 9a – California-American Water Company Desalination Facility
9:00am - Thursday, November 14, 2019
Oceano Hotel & Spa
280 Capistrano Rd., Half Moon Bay
Remote Testimony Available at City of Marina Council Chambers
211 Hillcrest Ave., Marina
Hearing Procedures as of November 6, 2019
FAQ
Agenda Item Th8a & 9a – California-American Water Company
Desalination Facility
NOTEWORTHY EXCERPTS:
4. Why aren’t the Commissioners taking a final vote on this proposal?
It is not unusual for the Commissioners to need more than one hearing to make a final decision on items as complex as the Cal-Am desalination proposal. In this case, Coastal Commission staff met with California Public Utilities Commission (CPUC) staff to discuss the posted staff recommendation on the Cal-Am project. The CPUC staff raised new technical questions about water supply and demand, potential ground water impacts, and the Pure Water expansion alternative – all of which require further investigation. Commission staff therefore decided it was important to hear applicant, agency, and public comments in a public hearing and to explore key remaining technical questions before the Commission considers voting on the project proposal.
5. Will there be any voting on this item?
There will not be a Commission vote on whether to approve or deny the Cal-Am project at the November hearing. However, because item 8a is an appeal of a local permit decision, the Commission may vote on whether the appeal raises a “substantial issue.” If the Commission finds that it does, that will allow the hearing on the appeal to move forward. Then the Commission will open the public hearing and take public comment on whether to approve or deny Cal-Am’s project. The hearing will address all aspects of the project proposed in the coastal zone including the portion in the City of Marina that is on appeal (item 8a) and those portions in the County and Seaside and in the Commission’s own permitting jurisdiction (item 9a). The next hearing on this item will likely be scheduled for March in Santa Cruz.
Monterey Peninsula Water Management District, Preliminary Valuation and Cost of Service Analysis Report, October 29, 2019
ABSTRACT: The Board of Directors, Monterey Peninsula Water Management District, Special Meeting/Board Workshop, November 12, 2019, agenda packet, including AGENDA, Preliminary Valuation and Cost
of Service Analysis Report, October 29, 2019, by Raftelis Financial
Consultants, Inc. (“Raftelis”) (EXHIBIT 2-A) and Barclay’s
Letter of Confidence (EXHIBIT 2-B) document copy is embedded. The Executive Summary and Findings and Conclusions of the Preliminary Valuation and Cost of Service Analysis Report
are reproduced.
AGENDA
Special Meeting/Board Workshop
Board of Directors
Monterey Peninsula Water Management DistrictTuesday, November 12, 2019, 6 pm
REFERENCE:
District Releases Measure J Feasibility Study for Public Takeover of Cal Am
AGENDA
Special Meeting/Board Workshop
Board of Directors
Monterey Peninsula Water Management DistrictTuesday, November 12, 2019, 6 pm
Monterey
Peninsula Water Management District
Preliminary Valuation and Cost of Service Analysis Report
October
29, 2019
Raftelis
Financial Consultants, Inc. (“Raftelis”)
John
M. Mastracchio, CFA Vice President
William
Stannard, P.E. Chairman of the Board
2-B Barclay’s
Letter of Confidence
Monterey Peninsula Water Management District
Preliminary Valuation and Cost of Service Analysis Report
October 29, 2019
Executive
Summary
The purpose of this
report is to document the findings of a preliminary valuation assessment and
cost of service evaluation completed to support the Monterey Peninsula Water
Management District (“MPWMD” or “District”) in evaluating the feasibility of
securing and maintaining public ownership of the Monterey Water System. The
preliminary valuation assessment consisted of completion of a preliminary
desktop valuation assessment of the Monterey Water System to estimate the cost
required to be incurred to acquire the Monterey Water System. The cost of
service analysis was completed to compare the cost of public ownership,
operation, and maintenance of the Monterey Water System (i.e. the public
ownership scenario) with a status quo scenario, which is the anticipated cost
of continued ownership, operation, and maintenance of the system by California
American Water (“CAW”). The cost of service analysis was compared in terms of
the annual Monterey Water System revenue requirements and typical residential
customer bill impacts associated with the various scenarios that were developed.
CAW currently
provides water service to approximately 41,000 customer connections and a
population of approximately 99,794 in its Monterey County District. The “Main”
system within the Monterey County District serves approximately 38,325
customers and includes customers within the incorporated cities of
Carmel-by-the-Sea, Del Rey Oaks, Monterey, Pacific Grove, Sand City, Seaside,
and the unincorporated areas of Carmel Highlands, Carmel Valley and Pebble
Beach. The Main system is generally located within the MPWMD boundaries. The
Monterey County District also includes the areas of Bishop, serving
approximately 385 customers, Hidden Hills, serving approximately 454 customers,
and Ryan Ranch, serving approximately 212 customers, which are areas that are
also within the MPWMD boundaries.1 The Central Satellite areas include the
areas of Ambler, Ralph Lane, Chualar, Toro, and Garrapata, which are located
outside of MPWMD boundaries and serve a total of approximately 1,086 customers.
The subject of the preliminary valuation and cost of service analysis is the
portion of the water system located within the boundaries of the District.
Preliminary
Valuation Assessment
The valuation of the
Monterey Water System was prepared for acquisition feasibility purposes
considering three
methods of valuation: the Income Approach, the Sales Comparison Approach, and
the Cost Approach. The definition of value used in the valuation assessment was
fair market value as the term is defined in California’s Eminent Domain Law (Code
of Civil procedure Section 1263.320), and the date of the valuation estimate
was January 1, 2020.
The income approach is based on
the premise that the value of a property is the present value of the future
economic benefits of owning the property. The underlying principle in this
approach is that buyers invest in assets with the expectation of receiving the
anticipated future net benefits. This approach is relevant when the property
being valued generates or is anticipated to generate net income, profits, or
free cash flows. The value estimate of the Monterey Water System calculated
using the income approach ranged $222 million to $255 million. An 80% weighting
was placed on the results of this valuation method.
The Market Approach is a general
way of determining an indication of value of an enterprise by comparing the
subject to similar businesses that have been sold. The valuation estimate under
the market approach was prepared using the Guideline Transactions Method, which
is a method whereby pricing multiples are derived from transactions involving
companies engaged in the same or similar lines of business. Certain factors,
such as the location, date of sale, physical characteristics, and technical and
economic factors relating to sales transactions were analyzed for their
comparability to CAW’s Monterey Water System. Based on this analysis, the
average value of the Monterey Water System under the market approach was
estimated to be approximately $272 million. A 20% weighting was placed on the
results of this valuation method.
Under the Cost Approach, the
value of the assets is typically derived by subtracting the amount of depreciation
from the replacement or reproduction cost of the assets. The value under this
approach is estimated by the sum of the parts of the system, i.e. physical
asset components, land, water rights, etc. Depreciation in this context
represents the loss in value caused by physical deterioration, functional obsolescence,
and economic obsolescence. The reproduction cost new less depreciation
(“RCNLD”) amount was calculated and estimated to be approximately $464 million.
No weighting was placed on the results of this valuation approach because it
tends to place an absolute ceiling on the market price, which most frequently
is not approached in actual market negotiations associated with regulated
public utilities.
Combining these three valuation
methods with their weightings, the base estimated value of the Monterey Water
System (portion located within MPWMD jurisdictional boundaries) as of the valuation
date (January 1, 2020) was estimated to be approximately $245 million. This
estimate is a preliminary estimate of value that was prepared based on a
desktop analysis described above for feasibility purposes and information
available as of the date of this report. This value estimate may be higher or
lower than the conclusion of value that may result from the completion of a
formal appraisal.
This base estimate excludes the
value of asset additions, such as construction-work-in-progress, 30% of the
Monterey Pipeline and Pump Station value deemed by the California Public
Utilities Commission (“CPUC”) not to be “used and useful” in conjunction with
CAW’s Monterey Water System, the value of the desalination plant currently
under development, and the value of non “used and useful” land parcels. The
value of the Monterey Water System, including the base value and the identified
asset additions, was estimated to be approximately $359 million.
CAW has incurred other expenses
that CPUC has approved for recovery through Monterey District water rates over
time. It is possible that MPWMD may be required to compensate CAW for these unrecouped
expenses as part of a potential taking of the Monterey Water System. These
expense items and their potential amounts include unrecouped portions of tank
painting expenses, San Clemente Dam removal costs, the portion of the
“acquisition premium” allocable to the Monterey Water System that was approved
by the CPUC in 2001 in connection with CAW’s acquisition of the California
assets of Citizens Water Company, the portion of the “acquisition premiums”
allocable to the Monterey Water System associated with the acquisition of the
Bellflower Municipal Water System, the Rio Plaza Water Company, Fruitridge
Vista Water Company, and Hillview Water Company that are proposed under CAW’s
Special Request No. 11 in its 2019 General Rate Case Application to the CPUC,
plus the unrecovered portions of various balancing accounts. These net expenses
were estimated to total approximately $155 million as of the valuation date,
and adding these net expenses to the value estimate of the “base” water system
results in a total value estimate, plus adjustments, of approximately $513 million.
A summary of the valuation and adjustments is provided in Table ES-1.
This value estimate,
with adjustments, does not include the potential value of other assets that are
not currently included in CAW’s rate base, except for the value of land which
has been considered. These assets either have not been deemed to be “used and
useful” for the provision of water service or were developer contributed and
are not allowed by CPUC to be included in rate base. It is possible that some of
the non “used and useful” assets may become “used and useful,” and recoverable
in water rates in the future. However, the value of these assets is not likely
to be substantial. CAW reports a value of $20.2 million of “contributions-in-aid-of
construction” and “advances-in-aid-of-construction”, which are contributions of
money or property contributed by developers pertaining to the expansion,
improvement, or replacement of water system assets. However, since CAW is not
allowed to include the value of these assets in rate base, they have been
excluded from consideration in the value of the Monterey Water System.
MPWMD may also be
required to pay severance damages to CAW for acquiring the Monterey Water System.
These damages may relate to not taking the satellite water systems owned and operated
by CAW within their Monterey District, but outside of MPWMD’s jurisdictional boundaries.
Severance damages in this instance would consist of increased inefficiencies in
CAW’s provision of service to these smaller pockets of customers and
potentially higher costs per customer to do so. It is somewhat difficult to
evaluate and quantify such severance damages, which would involve better
understanding CAW’s current service model, how CAW could most effectively
modify its service model in the post-District acquisition scenario, and how
much of the work formerly performed by local CAW staff could effectively be
transferred to other nearby CAW field offices or centralized locations. In
addition, given that CAW would likely be entitled to include reasonable
increased marginal operating costs in its next rate filing(s) to the CPUC with
respect to the “remainder” of its Monterey District, it is questionable whether
CAW would suffer any net profitability losses at all. Given these
uncertainties, and the likelihood that CAW could mitigate some or all of its
severance damages through the CPUC ratemaking process, our tentative conclusion
is that CAW is likely to suffer minimal, if any, severance damages, and any
severance damages it does suffer would not be so significant as to materially
affect the conclusions of the District’s feasibility analysis. If the District
does proceed to prepare a formal appraisal of just compensation for the acquisition
of the Monterey Water system, however, it is recommended that the severance
damages issue be further reviewed at that time.
Cost
of Service Evaluation
The cost of service
evaluation consisted of preparing a 20-year financial projection of CAW continuing
to own and operate the Monterey Water System (status quo), analyzing and
identifying the incremental cost differences associated with MPWMD owning and
operating the Monterey Water System in comparison to the status quo, preparing
an annual cash flow projection of two district ownership scenarios, and estimating
customer bills under both the CAW status quo and District ownership scenarios.
The following cost of service scenarios were prepared:
A. Status Quo – CAW
ownership
B. MPWMD Ownership
with District staff operations
C. MPWMD Ownership
with contract operations
The cost of service modeling
results indicate that significant annual reductions in revenue requirements
Water System. The estimated revenue requirement in 2022 under the MPWMD
ownership scenario with District operations (Scenario B) was projected to be
approximately $13.6 million or 11.9% lower than the status quo CAW ownership
scenario (Scenario A). Scenario B is estimated to have a net present value
savings from 2021 to 2040 of approximately $267 million. The estimated revenue
requirement in 2022 under MPWMD ownership and contract operations (Scenario C)
was projected to be approximately $10.2 million or 8.9% lower than the status
quo CAW ownership scenario (Scenario A). Scenario C is estimated to have a net
present value of savings from 2021 to 2040 of approximately $213 million. These
net present value savings estimates include the debt service costs associated
with the District paying fair market value for CAW’s Monterey Water System.
These cost of service modeling results are summarized in Table ES-2.
The projected reductions in
revenue requirements are a result of the following differences between CAW and
MPWMD ownership and operation:
1. Lower corporate and
administrative overhead costs. An estimated $7.2 million in CAW corporate
administrative overhead would be avoided under MPWMD and replaced with approximately
$1.8 million in District operations and administrative costs.
2. Operating cost differences.
The District’s ability to utilize existing administrative staff and eliminate
redundant positions, net of higher pension and benefit costs under public
ownership.
3. Cost of public financing (4.0%
interest rate) vs. rate of return and CAW profit (7.61%). The tax exempt annual
debt interest rate for MPMWD is lower than taxable corporate debt and CAW’s allowable
rate of return. The public financing interest rate was reviewed by Barclays and
was deemed to be reasonable.
4. Reduction in revenue
requirements of an estimated $10.1 million per year (2021 estimate) under public
ownership due to avoidance of property and income taxes.
5. Elimination of rate regulatory
expenses estimated at $330,000 per year (2021 estimate).
Based on the information and
estimates summarized in this report, which are reasonable considering the currently
available information, the acquisition of the Monterey Water System by MPWMD
appears to be economically feasible. Economic feasibility was assessed by
comparing the estimated revenue requirements of the water system under MPWMD
ownership versus CAW ownership and indicated that significant revenue
requirement savings could be achieved under the MPWMD ownership scenarios that were
evaluated
6. Findings and Conclusions
Set forth below is a
summary of the findings and conclusions which Raftelis has reached regarding
its preliminary valuation and cost of service feasibility study. For a complete
understanding of the estimates and assumptions upon which these opinions are
based, this report should be read in its entirety.
1. The
base estimated value of the Monterey Water System (portion located within MPWMD
jurisdictional
boundaries) as of the valuation date (January 1, 2020) is estimated to be approximately
$245 million. This estimate is a preliminary estimate of value that was
prepared based on a desktop analysis described above for feasibility purposes
and information available as
of the date of this
report. This value estimate may be higher or lower than the conclusion of
value that may result
from the completion of a formal appraisal.
2. This
base estimate excludes the value of asset additions, such as
construction-work-in-progress, 30% of the Monterey Pipeline and Pump Station
value deemed by CPUC not to be used and useful, the value of the desalination
plant, and land estimated to be non “used and useful.” The potential value of
these additional items was estimated separately and total approximately $114 million.
In addition, it was assumed that MPWMD would assume the anticipated SRF loan
and any public agency financing associated with the desalination plant (estimated
at approximately $181 million), therefore, these amounts were excluded from the
valuation estimate but were considered as part of the cost of service
evaluation. The value of the Monterey Water System, including the base value
estimate and the identified asset additions, was estimated to be approximately
$359 million.
3. CAW
has incurred other expenses that CPUC has approved for recovery through
Monterey District over time.
It is possible that MPWMD may be required to compensate CAW for these unrecouped expenses
as part of a potential taking of the Monterey Water System. These expense items and their
potential amounts include unrecouped portions of tank painting expenses, San Clemente Dam removal
costs, the portion of the “acquisition premium” allocable to the Monterey Water System
that was approved by the CPUC in 2001 in connection with CAW’s acquisition of the
California assets of Citizens Water Company, the portion of the “acquisition premiums” allocable
to the Monterey Water System associated with the acquisition of the Bellflower Municipal
Water System, the Rio Plaza Water Company, Fruitridge Vista Water Company, and Hillview
Water Company that are proposed under CAW’s Special Request No. 11 in its 2019
General Rate Case Application to the CPUC, plus the unrecovered portions of various balancing
accounts. These net expenses were estimated to total approximately $155 million as of the
valuation date, and adding these net expenses to the “base” water system value estimate, results in
a total value estimate plus adjustments of approximately $513 million.
4. Non-Regulated
Assets of CAW’s Monterey Water System. Other non-regulated assets of CAW’s Monterey Water System may include other assets that are not currently included
in its rate base, except for
the value of land which has been considered. These assets either have not been deemed to be
“used and useful” for the provision of water service or were contributed by developers and are
not allowed by CPUC to be included in rate base. It is possible that some of these non “used and useful” assets may become “used and useful”
and could become recoverable in rate base in the
future. However, the value of these assets is not likely to be substantial. CAW reports a value of
$20.2 million of “contributions-in-aid-of-construction” and
“advances-in-aid-ofconstruction.” However, since CAW is not allowed to include
the value of these assets in rate base, they have been excluded from
consideration in the value of the Monterey Water System.
5. Severance
Damages. MPWMD may be required to pay severance damages to CAW for acquiring the Monterey Water System. These damages may relate to not taking the satellite
water systems owned and operated by CAW within their Monterey District, but
outside of MPWMD’s jurisdictional boundaries. California Code of Civil
Procedures Section 1263.420 states that where the public entity is taking less
than an entire piece of property, the possibility of severance damages to the
remainder should be considered. These damages may relate to not taking the
satellite water systems owned and operated by CAW within their Monterey
District, but outside of MPWMD’s jurisdictional boundaries. Our tentative
conclusion is that CAW is likely to suffer minimal, if any severance damages
and any severance damages it does suffer would not be so significant as to
materially affect the conclusions of the District’s feasibility analysis. If
the District does proceed to prepare a formal appraisal of just compensation
for the acquisition of the Monterey Water system, however, it is recommended
that the severance damages issue be further reviewed at that time.
6. The
cost of service modeling results indicate that significant annual reductions in
revenue requirements and projected monthly water bills can be realized by MPWMD
acquiring and operating the
Monterey Water System. The estimated revenue requirement in 2022 under the MPWMD ownership scenario with District operations (Scenario B) was projected to be approximately
$13.6 million or 11.9% lower than the status quo CAW ownership scenario (Scenario
A). Scenario B is estimated to have a net present value savings from 2021 to
2040 of approximately $267
million. The estimated revenue requirement in 2022 under MPWMD ownership and
contract operations (Scenario C) was projected to be approximately $10.2
million or 8.9% lower than
the status quo CAW ownership scenario (Scenario A). Scenario C is estimated to
have a net present value of savings from 2021 to 2040 of approximately $213 million. These net
present value savings estimates include the debt service costs associated with the
District paying fair market value for CAW’s Monterey Water System.
7. Based
on the information and estimates summarized in this report, which are reasonable considering the currently available information, the acquisition of the
Monterey Water System by MPWMD appears to be economically feasible. Economic
feasibility was assessed by comparing the estimated revenue requirements of the
water system under MPWMD ownership versus CAW ownership, which indicate
significant revenue requirement savings could be achieved under the MPWMD
ownership scenarios that were evaluated.
REFERENCE:
Monday, November 04, 2019
CALIFORNIA COASTAL COMMISSION: Independent Hydrogeological Review of Recent Data and Studies Related to California American Water’s Proposed Monterey Regional Water Supply Project Weiss Job No. 466-2148, November 1, 2019 (EXHIBIT 7) & Addendum
ABSTRACT: EXHIBIT 7, the draft report, dated November 1, 2019, to Tom Luster, California Coastal Commission, from William A. McIlvride, PG, CEG, CHG, Senior Project Hydrogeologist, “documents Weiss Associates (Weiss’s) independent hydrogeological review of data and studies related to California American Water’s (Cal-Am) proposed Monterey Regional Water Supply Project (MRWSP).” Selected excerpts, as follows:
The specific study questions the Commission requested technical opinions from Weiss to address are:
1. What were the effects of potential and actual changes in hydraulic gradient since January 2017, and what is the potential for these changes to affect potential seawater intrusion to, and capture of fresh water from, aquifers tapped by the well field?
2. What is the potential for the well field to adversely affect or capture previously unidentified volumes of fresh water? and
3. What are the possible project modifications to avoid or reduce the potential effects?
Weiss Associates
The specific study questions the Commission requested technical opinions from Weiss to address are:
1. What were the effects of potential and actual changes in hydraulic gradient since January 2017, and what is the potential for these changes to affect potential seawater intrusion to, and capture of fresh water from, aquifers tapped by the well field?
2. What is the potential for the well field to adversely affect or capture previously unidentified volumes of fresh water? and
3. What are the possible project modifications to avoid or reduce the potential effects?
SUMMARY
OF FINDINGS
Weiss’s findings with respect to the Commission’s study questions are addressed in detail in this report and summarized as follows:
1. A
steepening of the hydraulic gradient seaward in the Dune Sand Aquifer in 2017 will
likely result in a limited to negligible effect on seawater intrusion, and
likely result in an increase in the fresh water percentage (FWP) of the well
field flow due to capture of fresh water from the aquifers tapped by the well
field. The gradient change appears to result from local and regional aquifer
recharge due to increased rainfall in the 2016-2017 and 2018-2019 rain years.
This is significant to the evaluation of the FWP percentages resulting from the
MRWSP since there are significant data gaps with respect to groundwater flow
paths in the Dune Sand Aquifer and the transfer of fresh water (total dissolved
solids [TDS] < 3,000 milligrams per liter [mg/L]) from the Sand Dune Aquifer to the 180-foot Aquifer. Therefore,
to be able to rely on Cal-Am’s model results to accurately predict FWP, Weiss
recommends additional data collection to address these data gaps, development
of a consensus conceptual site model (CSM) and modifications of the model assumptions
based on the CSM, and then calibration of the model to match the effects of
these recent rainfall events.
2. The well field capture analysis presented in the project’s Final EIR/EIS appears to be flawed as it does not account for potential freshwater capture beyond the identified capture zone of the well field due to seaward gradients. If such capture is greater than what is already accounted for, it will decrease the ocean water percentage (OWP) in water extracted by the well field. The uncertainty in the range of OWP depends on how the hydrogeology of the Dune Sand Aquifer and underlying Fort Ord Salinas Valley Aquitard (FO-SVA) is interpreted and modeled. It could be reduced through adjustments to the groundwater model and applying it in non-superposition mode to more accurately reflect the site hydrogeology and implications of the TSW pumping results.
3.
RECOMMENDATION
To
obtain a more accurate and definitive groundwater capture zone and OWP estimates
due to proposed pumping from the MRWSP well field, it is recommended that
additional hydrogeologic data be obtained from the 2 square-mile area east of
MW-7S so that a single CSM can be accepted to represent that area. In addition,
the area west of MW-7, between MW-4 and MW-7, should be investigated to
determine potential aquitards contiguous with those at MW-7, and vertical groundwater
gradients between the Dune Sand Aquifer and 180-Foot Aquifer. The new data
should be incorporated into NMGWM, 2016
which should be modified as follows:
•
Change the thickness of the FO-SVA (Layer 3) inland from MW-7, and configure so
that the top and bottom of Layer 3 approximates the configuration depicted in the
geologic cross-section, such that the top resembles a “stair-step” surface;
•
Potentially divide Layer 2 into two or more layers;
•
Increase the HK of the Dune Sand Aquifer (Layer 2) in parameter Zones 16 and 20,
currently modeled with HK of 2 and 4 ft/day, respectively, to values in the range
of 50 to 200 ft/day, more akin to the actual HK for dune sand, and in the middle
of the range in values from other sources (Figure 27); and
•
Modify HK and VK as appropriate in Layers 2, 3, and 4 of the model in the vicinity
of the well field, such that drawdowns in more distant wells, particularly MW-4
and MW-7, are in accord with those estimated from a conservative extrapolation
of the TSW drawdown data.
Along
with these changes, the model should be run in non-superposition mode in a
range of scenarios, and flow lines plotted to illustrate the revised capture pattern.
Mass balance information should be obtained for those portions of the model affected
by groundwater flow to the well field, and from the Dune Sand Aquifer to the
180-Foot Aquifer, and used to calculate new fresh water capture and OWP
estimates.
CLOSING
Weiss
Associates’ work at the California-American Water test slant well site and
vicinity was conducted
under my supervision. To the best of my knowledge, the data contained herein
are true and accurate, based on what can be reasonably understood as a result of
this project while satisfying the scope of work prescribed by the client for
this project. The data, findings, recommendations, specifications, and/or
professional opinions were prepared solely for the use of the California Marine Sanctuary Foundation and the California Coastal Commission in accordance with
generally accepted professional engineering and geologic practice. Weiss makes
no other warranty, either expressed or implied, and is not responsible for the
interpretation by others of the contents herein
EXHIBIT
7 document copy is embedded.
Weiss Associates
November 1, 2019
Addendum to Staff Report for CDP Application 9-19-0918 and Appeal A-3-MRA-19-0034 (California American Water Company
Addendum to Staff Report for CDP Application 9-19-0918 and Appeal A-3-MRA-19-0034 (California American Water Company
Friday, November 01, 2019
Carmel Art Association Presents ‘EXPLORING SPACE’ GROUP SCULPTURE EXHIBIT & NORO PARTIDO AND HEIDI HYBL NOVEMBER GALLERY SHOWCASE – ORANGE HAS ITS PLACE
Mission Statement:
The Association exists to provide its members with a permanent art gallery, to advance knowledge of, and interest in the arts, and to create a spirit of cooperation and fellowship among artists and the community.
A Proud Heritage:
The Association exists to provide its members with a permanent art gallery, to advance knowledge of, and interest in the arts, and to create a spirit of cooperation and fellowship among artists and the community.
A Proud Heritage:
The legendary Carmel Art Association was formed
on August 8, 1927 by a small group of artists who gathered at “Gray Gables,”
the modest home/studio of Josephine Culbertson and Ida Johnson at the corner of
Seventh and Lincoln in Carmel-by-the-Sea. These nineteen “pioneers”—who grew up
in the 19th century and individually found their respective paths to Carmel
from all corners of the world—each desired a greater sense of community, a
spirit of collaboration, and a place to show their work. Before the meeting
concluded, they had established an association with a mission “to advance art
and cooperation among artists, secure a permanent exhibition space, and promote
greater fellowship between artists and the public.”
W/s
Dolores St. between 5th Av. & 6th Av.
10:00 A.M. – 5:00 P.M., Daily
Open to the Public at No Charge
10:00 A.M. – 5:00 P.M., Daily
Open to the Public at No Charge
For more information, Online or (831) 624-6176.
Thursday,
November 7 - Tuesday, December 3, 2019
Eight sculptors,
namely Eleen Auvil, Blaine Black, Kathleen Crocetti, Laurent Davidson, Douglas Downs, Yves Goyatton, Peter Hiers and Chris Sawyer, exhibit their latest
work, featuring diverse visions, forms, and materials, each exploring space in
their own way.
KATHLEEN CROCETTILAURENT DAVIDSON
YVES GOVATTON SCULPTOR
PETER HIERS
Christopher Sawyer SCULPTURE
NORO PARTIDO & HEIDI HYBL NOVEMBER GALLERY SHOWCASE –ORANGE HAS ITS PLACE
“Aside from their mutual admiration of each other’s art, Heidi Hybl (a painter) and Noro Partido (primarily a printmaker) produce abstract images using bold color combinations and a playful use of their chosen materials. Both artists develop personal imagery that relies on chance occurrences, tapping into the ethereal nature of the world.”
Opening Reception: Saturday, November 9, 2019, 5:00 P.M. – 7:00 P.M.
CARMEL ART
ASSOCIATION: PAST, PRESENT & FUTURE
Our Big Idea: Support our 92-year history by helping repair a
leaky roof and planning for our March 2022 Historic Show which
will celebrate our 95th year representing the finest local professional
artists.
Go To: www.mcgives.com to donate to the CAAMonterey County Gives prefers donations through their website, but if you would rather write a check, please make it out to Community Foundation for Monterey County (CFMC) and mail it directly to CFMC, Attn: Monterey County Gives, 2354 Garden Rd, Monterey CA 93940. Or drop it by the CAA.
MEET THE ARTISTS
NOVEMBER 10, 2019
Join abstract artists Heidi Hybl and Noro Partido for an informal talk about their
art on Sunday, November 10 from 2:00 to 3:00 pm. (In conjunction with their
Gallery Showcase exhibit).
NOVEMBER 16, 2019
Kathleen Crocetti is the creator of numerous community public art
installations. Join her for a talk & slide show, “Exploring Public Spaces”
on Saturday, November 16 at 2:00 pm. She
will give special emphasis to her new monumental community art project in
Watsonville.
ADDENDUM:
Carmel Art Association on facebookCarmel Art Association YouTube
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