Draft First Reading




An Ordinance of the Board of Directors

of the

Monterey Peninsula Water Management District

Tolling Water Use Credits Affected by

State Water Resources Control Board Order WR 2009-0060





1.                  The Monterey Peninsula Water Management District (MPWMD) is charged under the Monterey Peninsula Water Management District Law with the integrated management of the ground and surface water resources in the Monterey Peninsula area.


2.                  On May 24, 2010, California American Water (CAW) filed an Application for an Order Authorizing and Imposing a Moratorium on Certain New or Expanded Water Service Connections in its Monterey District (A1005020) with the California Public Utilities Commission (CPUC).


3.                  California State Water Resources Control Board (SWRCB) Order No. WR 95-10, issued on July 6, 1995, ruled that California American Water did not have a legal right to take approximately 69 percent of the water supplied to California American Water users at that time. 


4.                  SWRCB Order No. 95-10 directed California American Water to reduce its average historical diversions by 15 percent in Water Year 1996 and 20 percent in each subsequent year until its unlawful diversions were terminated.


5.                  A Cease and Desist Order (CDO) (SWRCB Order WR 2009-0060) was issued on October 20, 2009, by the SWRCB against California American Water (Cal-Am).  The CDO prescribes a series of significant cutbacks to Cal-Am’s pumping from the Carmel River from 2010 through December 2016. Cal-Am customers may be subject to water rationing, a moratorium on Water Permits for new construction and remodels, and fines if pumping limits are exceeded.  The CDO is expected to remain in place until unlawful diversion of Carmel River water ceases.

6.                  The first ordering paragraph of the 2009 CDO requires that Cal-Am "shall terminate all unlawful diversions from the [Carmel River] no later than December 31, 2016."  


7.                  The second ordering paragraph, Condition 2, states:  “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.”


8.                  California Public Utilities Commission (Decision 1103048 rendered March 24, 2011) authorized a water moratorium on certain customers of California American Water. 


9.                  After the 2009 CDO was issued, legal actions were brought separately by Cal-Am and MPWMD, and later by three Carmel River resorts, seeking to invalidate that CDO. These actions were later transferred and consolidated under Case No. 1-10-CV163328 in the Santa Clara County Superior Court.  The City Of Seaside, City Of Monterey, City Of Carmel-By-The-Sea, City Of Sand City (collectively “Cities”), Sierra Club, and Carmel River Steelhead Association each intervened in these legal actions.


10.              All Parties completed multiple days of settlement negotiations, including mediation by the Hon. Richard M. Silver (Ret.), during which the Parties made substantial progress on key issues.  All Parties agreed to terminate the consolidated cases without prejudice and toll applicable statute(s) of limitations to collectively focus their attention on development of alternative water supplies for the Monterey region to the benefit of Cal-Am’s customers and the South Central California Coast Steelhead and to comply with the CDO.


11.              The Parties agreement to dismiss the Cases without prejudice was based on the express representation and agreement by all Parties (including Real Party-in-Interest and Intervenors) that any and all statutes of limitations related to any future civil action(s) for judicial review of the CDO, as to any claims alleged in the MPWMD and Cal-Am Cases, have been and will be tolled during the Tolling Period for the benefit of Petitioners and the Intervenor Cities.


12.              This ordinance is in accord with the Stipulation Staying Case and Tolling Statute of Limitations served on June 4, 2012, between Quail Lodge, Inc., CVR HSGE, LLC, and Bay Laurel, LLC, and the SWRCB and Does 1-30, inclusive, staying Case No. 110CV183439. 

13.              This ordinance is subject to the California Environmental Quality Act (CEQA) and is processed under a Negative Declaration (ND).  This measure shall incorporate the Board’s adoption and approval of the ND.  The Board considered the ND, together with any comments received during the public review process.  Adoption of the ND is based upon the determination, on the basis of the whole record before it (including the Initial Study and any comments received), that there is no substantial evidence that the project will have a significant effect on the environment.   The ND reflects the Board’s independent judgment and analysis. 

NOW THEREFORE be it ordained as follows:



Section One:         Short Title


This ordinance shall be known as the 2012 Water Use Credit Tolling Ordinance of the Monterey Peninsula Water Management District.


Section Two:        Statement of Purpose


This ordinance shall reinstate Water Use Credits affected by the State Water Resource Control Board’s (SWRCB) Order WR 2009-0060 when the CDO no longer has any force or effect.


Section Three:     Reinstatement of Water Use Credits Following Cease and Desist Order


Water Use Credits affected by State Water Resources Control Board Order WR 2009-0060 (Cease and Desist Order or CDO) against California American Water shall be reinstated upon the date the 2009 CDO no longer has any force or effect, with the same value and with a term equal to the length of time the Water Use Credit was affected by the CDO. 


Section Four:       Publication and Application


The provisions of this ordinance shall be distributed together with the permanent Rules and Regulations of the Monterey Peninsula Water Management District. 


Section Five:        Effective Date


This ordinance shall be given effect at 12:01 a.m. thirty days following adoption after second reading. 


Section Six:          Sunset


This ordinance shall not have a sunset date. 


Section Seven:      Severability


If any subdivision, sentence, clause, or phrase of this ordinance is, for any reason, held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the remaining portions of this ordinance, or of any other provisions of the Monterey Peninsula Water Management District Rules and Regulations.  It is the District’s express intent that each remaining portion would have been adopted irrespective of the fact that one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared invalid or unenforceable.


On motion of Director __________, and second by Director __________, the foregoing ordinance is adopted upon this ____ day of _________, 2012, by the following vote:








I, David J. Stoldt, Secretary to the Board of Directors of the Monterey Peninsula Water Management District, hereby certify the foregoing is a full, true, and correct copy of an ordinance duly adopted on the ____ day of _____________, 2012.


Witness my hand and seal of the Board of Directors this ________ day of ________, 2012.



                                                                                    David J. Stoldt, Secretary to the Board