Save Our Carmel Neighborhoods Coalition (SOCNC) Attorney Molly Erickson: ‘Because the project would likely violate the State's Cease and Desist Order, the project would have significant unevaluated and unmitigated impacts with regard to water...The Commission should deny the project based on the lack of a legal water supply’

ABSTRACT: Based on a 10 August 2011 State Water Resources Control Board letter in response to Save Our Carmel Neighborhoods Coalition (SOCNC) attorney Molly Erickson’s 8 July 2011 letter requesting “an opinion from the State Water Board as to whether or not a proposed development project, namely the Villas de Carmelo, may be served by California American Water (Cal-Am),” attorney Molly Erickson wrote a letter dated 16 August 2011 to the Monterey County Planning Commissioners stating, in part, as follows: "The State Water Resources Control Board reviewed the proposed Villas de Carmelo project. The State's August 10, 2011 letter states in key part as follows:
[T]his site is upzoning to a high density residential. There will undoubtedly be an increase in water use at the site since 2005 when the hospital closed. Although the Monterey County Planning Department concluded that the baseline water use for the property could be based on historic use in 1988, the effective date of its Ordinance 3310, the State Water Board's Cease and Desist Order was issued in 2009 and is not restricted by the 1988 Ordinance. Therefore, if Cal-Am were to serve the new 46-unit residential condominiums with water from the Carmel River. Cal-Am would likely violate Condition 2 of the [Cease and Desist] order.
This is significant new information that was not evaluated in the environmental impact report. Because the project would likely violate the State's Cease and Desist Order, the project would have significant unevaluated and unmitigated impacts with regard to water.
The Commission should deny the project based on the lack of a legal water supply, in addition to the other significant reasons identified by the public and by public agencies." HIGHLIGHTS and the aforementioned letters et cetera, and the State’s Cease and Desist Order are embedded.

HIGHLIGHTS of SOCNC attorney Molly Erickson’s August 16, 2011 letter to Paul Getzelman, Chair, and Members of the Planning Commission:

Subject: SWRCB Position on Proposed Villas de Carmelo Subdivision Project

The State Water Resources Control Board reviewed the proposed Villas de Carmelo project. The State's August 10, 2011 letter states in key part as follows:

[T]his site is upzoning to a high density residential. There will undoubtedly be an increase in water use at the site since 2005 when the hospital closed. Although the Monterey County Planning Department concluded that the baseline water use for the property could be based on historic use in 1988, the effective date of its Ordinance 3310, the State Water Board's Cease and Desist Order was issued in 2009 and is not restricted by the 1988 Ordinance. Therefore, if Cal-Am were to serve the new 46-unit residential condominiums with water from the Carmel River. Cal-Am would likely violate Condition 2 of the [Cease and Desist] order.

This is significant new information that was not evaluated in the environmental impact report. Because the project would likely violate the State's Cease and Desist Order, the project would have significant unevaluated and unmitigated impacts with regard to water.

The State's position is that Cal Am cannot legally provide Carmel River water to the project. Without a legal water supply, the project cannot be approved.

The Commission should deny the project based on the lack of a legal water supply, in addition to the other significant reasons identified by the public and by public agencies.

HIGHLIGHTS of State Water Resources Control Board 10 August 2011 response to SOCNC attorney Molly Erickson’s July 8, 2011 letter regarding State Water Resources Control Board (State Water Board) Cease and Desist Order (Order) WR 2009-0060 as it pertains to Villas de Carmelo:

VILLAS DE CARMELO: A PROPOSED 46-CONDOMINIUM PROJECT WITHIN THE CAL-AM SERVICE AREA SUBJECT TO ORDER WR 2009-0060 IN MONTEREY COUNTY.

...this site is upzoning to a.high density residential. There will undoubtedly be an increase in water use at the site since 2005 when the hospital closed. Although the Monterey County Planning Department concluded that the baseline water use for the property could be based on historic use in 1988, the effective date of its Ordinance 3310, the State Water Board's Cease and Desist Order was issued in 2009 and is not restricted by the 1988 Ordinance. Therefore, if Cal-Am were to serve the new 46-unit residential condominiums with water from the Carmel River, Cal-Am would likely violate Condition 2 of the order.

ORDER
NOW, THEREFORE, IT IS ORDERED THAT Cal-Am shall cease and desist from the unauthorized diversion of water from the Carmel River in accordance with the following schedule and conditions.

2. Cal-Am shall not divert water from the Carmel River for new service connections or for any increased use of water at existing service addresses resulting from a change in zoning or use. Cal-Am may supply water from the river for new service connections or for any increased use at existing service addresses resulting from a change in zoning or use after October 20, 2009, provided that any such service had obtained all necessary written approvals required for project construction and connection to Cal-Am's water system prior to that date.

SOCNC ltr to PC 11 08 16 re SWRCB position

SOCNC attorney Molly Erickson’s & State Water Resources Control Board Correspondence & Order Condition 2

HIGHLIGHTS of CEASE AND DESIST ORDER (INTRODUCTION, CONCLUSIONS & ORDER):

INTRODUCTION

The California American Water Company (Cal-Am or CAW) diverts water from the Carmel River in Monterey County. The water is used to supply the residential, municipal, and commercial needs of the Monterey Peninsula area (peninsula) communities. In 1995 the State Water Resources Control Board (State Water Board) adopted Order WR 95-10 (WR 95-10 ). Among other matters, the order found that Cal-Am was diverting about 10,730 acre feet per annum (afa) of water from the Carmel River without a valid basis of right and directed that Cal-Am should diligently implement actions to terminate its unlawful diversion. Alleging that 13 years after the adoption of Order 95-10 Cal-Am continues to divert about 7,150 afa from the river without a valid basis of right, the Prosecution Team (Prosecution Team or PT) seeks issuance of a cease and desist order under Water Code section 1831, subdivision (d). Cal-Am requested a hearing. This order (1) finds that Cal-Am: (a) failed to comply with the requirements of Order 95-10, and (b) is in violation of Water Code section 1052; and (2) issues a cease and desist order (CDO).

CONCLUSIONS

Order 95-10 does not authorize Cal-Am to divert water from the Carmel River in excess of its water rights, and Cal-Am is illegally diverting water from the Carmel River in violation of Order 95-10 and Water Code section 1052. The doctrines of res judicata and collateral estoppel are not a bar to the State Water Board’s adoption of a CDO.

Condition 2 of the Order 95-10 requires Cal-Am to diligently implement actions to terminate its unlawful diversions. Cal-Am has diverted an average of 7,602 afa from the river without a basis of right for the past 14 years, and in the roughly 10-year period since it achieved the 20 percent reduction required by Condition 3 of Order 95-10, Cal-Am has not made any meaningful progress toward reducing the amount of its unlawful diversions. Further, Cal-Am has not diligently implemented smaller water supply projects that could have enabled Cal-Am to reduce its illegal diversion from the river and to alleviate the serious condition affecting the survival of steelhead.

Thus, Cal-Am has not diligently implemented actions to terminate its unlawful diversions under Condition 2. Cal-Am’s only action reducing its illegal diversions has been the work done on two projects yielding small amounts of water: the ASR project and the Sand City Desalinization Plant. Significantly, these projects are in place due largely to the efforts made by other agencies, i.e., MPWMD and the City of Sand City.

The lower 6.5 miles of the riverbed are dry for five to six months of each year, due primarily to Cal-Am’s diversions.44 Cal-Am’s diversions from the river continue to have an adverse effect on the fish, wildlife and riparian habitat of the river, including the threatened steelhead. Since the adoption of Order 95-10, the California Central Coast steelhead has been declared as threatened under the Endangered Species Act, and the Carmel River has been declared as critical habitat for the survival of the steelhead.

The adjudication of the Seaside groundwater basin will decrease the supply of water available to supply Cal-Am’s customers by 417 af in 2009, or by about 2.8 percent of the available supply. Other projects or regulatory actions can make additional water available to Cal-Am, including: (1) the Phase I and II ASR project; (2) the City of Sand City Desalinization Project; (3) the development of temporary small water supply projects (4) the reduction of system losses within the Cal-Am distribution system; (5) the retrofit program; (6) reducing the use of potable water for outdoor irrigation; and (7) other measures to reduce consumer demand for potable water.

MPWMD's water allocation program sets aside water for growth within the limits of the supply of water available within its jurisdiction. MPWMD views water illegally diverted from the river by Cal-Am as available water supply for growth. Because water has been available for growth, the peninsula cities and their residents have had little incentive to support or pay for a project or projects to obtain a legal supply of water that can be substituted for the illegal diversions from the river.

In consideration of the foregoing, we conclude that Cal-Am should be prohibited from further degrading conditions in the river by diverting water from the river for new service connections, and that Cal-Am should be required to reduce the amount of water being diverted from the river to serve existing service connections.45 In reaching this conclusion, we are particularly mindful that (a) the lower 6.5 miles of the Carmel River bed are dry for 5 to 6 months of each year, (b) the steelhead is a threatened species, (c) the river has been declared to be critical habitat for the steelhead, and (d) the earliest date which Cal-Am’s illegal diversions may be brought to an end is 2016, some 21 years after the adoption of Order 95-10.

ORDER

NOW, THEREFORE, IT IS ORDERED THAT Cal-Am shall cease and desist from the unauthorized diversion of water from the Carmel River in accordance with the following schedule and conditions.

1. Cal-Am shall diligently implement actions to terminate its unlawful diversions from the Carmel River and shall terminate all unlawful diversions from the river no later than December 31, 2016.

2. Cal-Am shall not divert water from the Carmel River for new service connections or for any increased use of water at existing service addresses resulting from a change in zoning or use. Cal-Am may supply water from the river for new service connections or for any increased use at existing service addresses resulting from a change in zoning or use after October 20, 2009, provided that any such service had obtained all necessary written approvals required for project construction and connection to Cal-Am’s water system prior to that date.

3. At a minimum, Cal-Am shall adjust its diversions from the Carmel River in accordance with the following:

a. Commencing on October 1, 2009,48 Cal-Am shall not divert more water from the river than the base of 10,978 afa,49 as adjusted by the following:

(1) Immediate Reduction: Commencing on October 1, 2009, Cal-Am shall reduce diversions from the river by 5 percent, or 549 afa.

(2) Annual Reductions: Commencing on October 1, 2011, the base shall be further reduced by 121 afa per year through savings that will accrue from reduced system losses, the retrofit program, the reduction of potable water used for outdoor irrigation, demand reduction and similar measures. The 121 af reduction shall be cumulative. For example, 121 af shall be reduced in the first year and 242 af shall be reduced in the second year. Commencing on October 1, 2015, annual reductions shall increase to 242 af per year. The 242 af per year reduction shall also be cumulative. Annual reductions shall continue until all unlawful Cal-Am diversions from the river have been terminated.

(3) ASR Project: The amount of water diverted to underground storage under Permit 20808A (Application 27614A) as of May 31 of each year and which will be supplied to Cal-Am customers after that date shall be subtracted from the base.50 On June 1 of each year, Cal-Am shall submit an operating plan to the Deputy Director for Water Rights specifying the quantity of water it intends to supply from ASR Project for its customers after May 1 of each year. Water pumped from the project for delivery to customers should be consistent with the requirements of paragraph “c” below.

(4) Sand City Desalination Plant: Once the Sand City Desalinization Plant becomes operational, 94 af shall be subtracted from the base. In addition, based on actual production from the plant, any other water that is produced and not served to persons residing within the City of Sand City shall be subtracted from the base amount for each water year.

(5) Small Projects: Water produced from new sources developed pursuant to Condition 4 of this order shall be subtracted from the base.

(6) Pebble Beach: Within 90 days following adoption of the order, the Pebble Beach Company shall certify, under penalty of perjury, the total quantity of water annually used under its water entitlement from MPWMD (for the funding assurances provided for the construction and expansion of the CAWD-PBCSD wastewater reclamation project).51 Ten percent (10%) of the amount reported shall be added to the adjusted base to allow Cal-Am to divert water from the river to supply water for PBC water entitlements initiated in the following 12 months. Thereafter, the PBC shall annually submit, on September 30, a report to the Deputy Director for Water Rights accounting for any additional water that is diverted from the Carmel River as the result of an increased use of its MPWMD water entitlement. Increased diversions from the river by Cal-Am to satisfy PBC entitlements from MPWMD shall be added to the adjusted base, and are not subject to section 2 of this order. Water Diverted from the river by Cal-Am for PBC entitlements can only be served to properties that have received a PBC entitlement from MPWMD and which are located in the Cal-Am’s service area. Cal-Am shall not divert water from the Carmel River after December 31, 2016, to supply PBC’s water entitlement from MPWMD.

b. Either Cal-Am or the MPWMD may petition the State Water Board Deputy Director for Water Rights for relief from annual reductions imposed under condition 3., a (2). No relief shall be granted unless all of the following conditions are met: (a) Within 18 months of the adoption of this order, Cal-Am has imposed a moratorium on new service connections pursuant to Water Code section 350 or has obtained an order prohibiting new connections from the PUC pursuant to Public Utility Code section 2708 or MPWMD has imposed a moratorium on new service connections under its authority; (b) the demand for potable water by Cal-Am customers has been reduced by 13 percent;52 and (c) a showing is made that public health and safety will be threatened if relief is not granted. Any relief granted shall remain in effect only as long as (a) a prohibition on new service connections remains in effect, and (b) the 13 percent conservation requirement remains in effect.

c. ASR project water stored in the Seaside groundwater basin under Permit 20808A (Application 27614A) should be used to mitigate the effect of Cal-Am’s illegal diversions from the river. ASR water should be supplied to Cal-Am customers only during months when water is most needed in the river to preserve steelhead

Commencing no later than June 1 of each year, Cal-Am should use stored groundwater to supply the needs of its customers and reduce diversions from the river. Consistent with Cal-Am’s operating plan, water should be pumped from the groundwater basin at the maximum practicable rate for as long as possible. This condition shall apply to both Phase I and Phase II of the ASR project. The river’s habitat and fish may receive greater benefits from a substitution regime that differs from that called for by this condition, a regime requiring that substitution commence at a different date, at a different rate or be coordinated with the level of flow in the river. In addition, it may be desirable to hold stored water from one year to the next to assure that more water is available for the steelhead and its habitat in years when the potential for steelhead survival may be greater. Several substitution trials may be necessary to determine which regime will have the greatest benefit. The National Marine Fisheries Service and the California Department of Fish and Game are encouraged to negotiate different substitution regimes with Cal-Am. The State Water Board will honor such agreements, provided Cal-Am submits the written agreement to the Deputy Director for Water Rights no later than May 1 of each year and the written agreement is approved by the Deputy Director.

4.Cal-Am shall reduce its illegal diversions from the river at the same rate ASR Project water is pumped from the groundwater basin as long as stored water is available under the operating plan.

5.Cal-Am shall implement one or more small projects that, when taken together, total not less than 500 afa to reduce unlawful diversions from the river. Within 90 days of entry of this order, Cal-Am shall identify to the Deputy Director for Water Rights the projects that it will implement and shall implement the projects within 24 months of entry of this order. Cal-Am may petition the Deputy Director for additional time in which to implement the projects. However, no time extension shall be considered unless the petition is accompanied by detailed plans and time schedules for each project. Detailed justification shall be provided for additional time. Detailed justification shall be provided for any request for an extension to allow Cal-Am time to obtain prior approval from the PUC. To the maximum practicable extent, small projects shall be operated to reduce illegal diversions from the river during the months when surface flow in the river begins to go dry and through the months when surface flow in the river disappears below river mile 6.5.

6. Starting three months following adoption of this order, Cal-Am shall post quarterly reports on its website and file the quarterly reports with the Deputy Director for Water Rights. The quarterly reports shall include the following:

(a) Monthly summaries of the quantity of water it diverts from the river.

(b) Monthly summaries of the quantity of ASR project water diverted from the river under Permit 20808A and stored in the Seaside ground water basin. The monthly reporting shall also state the quantity of water beneficially used under Permit 20808A and the current balance of water in storage.

(c) Monthly summaries of the quantity of water being produced by the Sand City desalinization plant. The reporting shall identify new service connections within Sand City and thereafter report the quantity of water being delivered to the new connections. The monthly reports shall specify the quantity of water used to reduce diversions from the river during the reporting period.

(d) Monthly summaries of the quantity of water saved by reducing system losses.

(e) Monthly summaries of reductions in demand for potable water due to conservation actions such as increased water rates, MPWMD’s retrofit program, efforts to reduce potable water for outdoor water use and demand reduction initiatives.

(f) Monthly summaries identifying all new service connections. The report shall include the Cal-Am account number, the service address, the name of each authority granting any approval required for connecting to Cal-Am’s system and the name of each authority granting any approval required before commencing construction; the issuer of the each approval and the date of each approval shall be separately listed for each service address.

(g) Monthly summaries identifying existing service addresses that receive an increased supply of water due to a change in zoning or use. The report shall include Cal-Am account number, the service address and the name of each authority authorizing a change of use or of zoning and the date of such change.

(h) Each quarterly report submitted by Cal-Am shall be certified under penalty of perjury and shall include the following declaration: “I declare under penalty of perjury, under the laws of the State of California, that all statements contained in this report and any accompanying documents are true and correct, with full knowledge that all statements make in this report are subject to investigation and that any false or dishonest statement may be grounds for prosecution.”

7.Starting six months after adoption of this order, Cal-Am shall file quarterly reports of its progress toward implementing Condition 3 (small project implementation) and note specifically any problems with its schedule of implementation.

8. The Deputy Director for Water Rights is authorized to modify the timing and the content of the reporting required by all of the provisions of this order to more effectively carry out the intent of this order.

9. Cal-Am shall comply with all requirements of Order 95-10, except as follows:

(a) Condition 1 of Order 95-10 is superseded by Condition 2 of this order.

(b) Condition 3(b) of Order 95-10 is superseded by Condition 2 of this order.

(c) The last sentence of Condition 4 is deleted because the Seaside groundwater basin watermaster will determine the manner in which water may be withdrawn from the groundwater basin.

(d) All other conditions of Order 95-10 shall remain in full force and effect until fully implemented.

10. The Deputy Director for Water Rights is directed to closely monitor Cal-Am’s compliance with Order 95-10 and this order. Appropriate action shall be taken to insure compliance with these orders including the issuance of additional cease and desist orders under Water Code section 1831, the imposition of administrative civil liability under Water Code section 1055, and referral to the Attorney General under Water Code section 1845 for injunctive relief and for civil liability. If additional enforcement action becomes necessary, the Deputy Director is directed to consider including in such actions all Cal-Am’s violations of Water Code section 1052 since the adoption of Order 95-10.

11. The conditions of this order and order 95-10 shall remain in effect until (a) Cal-Am certifies, with supporting documentation, that it has obtained a permanent supply of water that has been substituted for the water illegally diverted from the Carmel River and (b) the Deputy Director for Water Rights concurs, in writing, with the certification.

SWRCB CEASE AND DESIST ORDER 2009

STATE OF CALIFORNIA
STATE WATER RESOURCES CONTROL BOARD

ORDER WR 2009-0060

In the Matter of the Unauthorized Diversion and Use of Water by the California American Water Company

Parties

Water Rights Prosecution Team1
California American Water Company

Interested Parties

Monterey Peninsula Water Management District, City of Carmel by the Sea,
City of Seaside, Seaside Basin Watermaster, Pebble Beach Company,
Monterey County Hospitality Association, City of Monterey, City of Sand City, Division of Ratepayers Advocates of the California Public Utilities Commission, Public Trust Alliance, Carmel River Steelhead Association, Ventana Chapter of the Sierra Club, California Sportfishing Protection Alliance, Planning and Conservation League, California Salmon and Steelhead Association, National Marine Fisheries Service
SOURCE: Carmel River

COUNTY: Monterey

CEASE AND DESIST ORDER