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Home My WebLink AboutSS4 - San Joaquin Reservoir Conversion & Transfer of Ownership• ITEM SS4 TO: Members of the Newport Beach City Council FROM: Bob Burnham, City Attorney Dave Kiff, Deputy City Manager SUBJECT: San Joaquin Reservoir (SJR) Conversion and Transfer of Ownership RECOMMENDED ACTION: Direct staff to negotiate an agreement with IRWD regarding SIR improvements and operating protocols that will protect the interests of adjacent residential communities and submit the agreement to the City Council for review and approval in conjunction with the transfer of ownership. EXECUTIVE SUMMARY The City owns 1.18% of the now empty SIR just east of the city limits (within the • Newport Coast unincorporated area). The Irvine Ranch Water District (IRWD), the agency with the greatest ownership interest in SIR, has proposed to convert SIR to a reclaimed water reservoir (Project) and has received approval to do so from all owners except Newport Beach. On December 18, 2000, IRWD, acting as the Lead Agency pursuant to the California Environmental Quality Act (CEQA), adopted a Mitigated Negative Declaration (MND) for the Project. Newport Beach is a Responsible Agency and, since IRWD consulted with the City regarding the MND, can comply with its CEQA obligations by accepting the MND or litigating its adequacy. A decision not to accept, or not litigate the adequacy of, the MND does not affect the City Council's rights or authority relative to the terms and conditions of a transfer of its ownership interest in SIR. On October 24, 2000, the City Council discussed the Project and adopted the following action: • Support, in concept, the conversion of the SIR to a reclaimed water storage facility provided that the SIR is operated in a manner that reduces or eliminates any potential adverse odor or aesthetic impact from the operation of the facility on adjacent residential communities; • Authorize the City Manager and City Attorney to execute all documents necessary to consummate the sale of the City's ownership interests in the SIR to IRWD when the environmental document for the project has been certified and the City has complied with its obligations as a responsible agency pursuant to CEQA; • Direct Council Members Debay and Ridgeway to meet with representatives from IRWD to address and resolve any remaining issues regarding the long -term no- discharge scenario referenced in BIRPA and report back to the City Council; • • Direct the City Manager to use the proceeds of the sale of the SJR to implement BIRPA or to address issues relating to reclaimed water discharges; and • Confirm that EQAC's comments on the MND represent the City's official comments. Newport Beach City Council SIR Conversion Staff Report January 23, 2001 Page 2 The Environmental Quality Affairs Citizens' Advisory Committee (EQAC) had • raised several concerns with the Draft MND. IRWD addressed some of these issues in their Final MND, but did not - in EQAC's eyes - appropriately address the potential growth inducing impacts of the Project. (EQAC's follow -up comments are in Attachment B). Defend the Bay has raised similar concerns and has asked the Council to consider imposing conditions on the proposed sale of the City's interests in SJR (see Attachment C). Staff has reviewed EQAC's comments and the request sent by Defend the Bay. We agree with EQAC and Defend the Bay that the MND did not clearly identify all of the measures that IRWD has indicated would be implemented to protect residential communities around SJR from potential odor and related problems. Staff intends to review the Mitigation Monitoring Plan and related documents with Pacific Advanced Civil Engineering, who conducted a prior study of the Project, to determine precisely what IRWD can and should do to protect nearby residents. We are recommending that the Council authorize staff to negotiate an agreement with IRWD that would clearly state IRWD's obligations regarding SJR improvements and operating protocol and we will work with PACE to ensure that the terms and conditions of the agreement will protect nearby residents. Staff does not agree with the request of Defend the Bay and EQAC that SJR be operated in a way to handle any possible discharge from Sand Canyon Reservoir. As you know, IRWD is authorized by permit (94 -22) to (1) store no more than 200 acre feet of reclaimed water in San Canyon Reservoir as of October 1 of each year; and (2) discharge water from Sand Canyon within a specific period after major rain event. The conversion of SJR will significantly reduce the incentive • for IRWD to reconsider direct reclaimed water discharges into San Diego by creating capacity to store excess reclaimed water that can and will be sold during the dry season. Any reduction in SJR capacity - including retention of capacity to accommodate an unknown quantity of San Canyon discharge - will increase IRWD's incentive to reconsider wet season reclaimed water discharges. Staff does agree with Defend the Bay and EQAC that SARWQCB should strictly enforce 94-22 and we are certain the Council is in agreement. Staff has consulted with Shute Mihaly and Weinberger (SMW) - a nationally recognized environmental and land use law firm that specializes in representing environmental organizations - regarding the growth inducing impacts of the Project and the benefits to the City of litigating the adequacy of the MND. SMW concluded that litigation - even litigation that forced preparation of an EIR for the Project- would not help the City achieve any of its objectives. They agreed with staff's position that litigation would potentially delay conversion of SJR and potentially increase the potential for reclaimed water discharges. At the Council's January 9, 2001 meeting, members of the Council asked that the SJR conversion issue be placed on a Study Session agenda so that representatives of the community, EQAC, or Defend the Bay could speak to the Council regarding their position on the SJR conversion. The remainder of this Staff Report provides additional background to the issues raised above. • SIR Conversion Staff Report January 23, 2001 Page 3 • BACKGROUND: The San Joaquin Reservoir stands empty today in the hills just east of Newport Beach's city limits. When it was last in operation in the early 1990s, it held about 3,050 acre feet of potable water (an acre foot is the amount of water needed to cover an acre of land with one foot of water). The Reservoir is owned by eight parties, including: Owner Percentage Ownership Irvine Ranch Water District 47.90% Mesa Consolidated Water District 19.11% City of Huntington Beach 13.11 % Metropolitan Water District 9.84% Laguna Beach County Water District 5.12% The Irvine Company 2.10% South Coast Water District 1.64% City of Newport Beach 1.18% 7I • t San Joaquin Reservoir- 1993 In 1994, a series of operational problems - including infestations of midge flies and African clawed frogs followed by a massive landslide and new regulations at the State level requiring reservoir covers on potable reservoirs - caused the owners to re- evaluate the use of the Reservoir. Because improvements to the Reservoir's ability to store potable water would exceed $32 MN, IRWD proposed using the facility to store tertiary- treated reclaimed water (RW). IRWD and Reclaimed Water. IRWD is one of the States leaders in the production and use of RW. Residents, government agencies, and businesses throughout the District's boundaries - including all of Irvine and portions of Lake Forest, Tustin, Santa Ana Heights, and Newport Coast use RW for landscape irrigation, cooling systems, and several other non - potable uses. Reclaimed water typically sells for less than potable water, with IRWD selling RW at $250 /acre foot, while the price for potable water is about $279/ acre foot- The District produces the RW at its Michelson Water Reclamation Plant (MWRP) adjacent to San Diego Creek near Michelson and Harvard in Irvine (see Attachment A for a graphic of IRWD's RW system). Tertiary- treated RW goes • through four separate treatment operations: (1) Removal of settle -able solids, SIR Conversion Staff Report January 23, 2001 Page 4 • (2) Removal of soluble organics, (3) Filtration, and (4) Disinfection. IRWD can produce about 15 million gallons per day ( "mgd ") of RW from the Michelson Plant. RW Demand exceeds 26 mgd in the summer months, but it reaches only about 5 mgd in winter months. Wetlands Water Supply Project. In 1995 -96, IRWD applied to the Santa Ana Regional Water Quality Control Board (Regional Board) for a permit (pursuant to the Clean Water Act) to construct and operate the Wetlands Water Supply Project (WWSP). WWSP contemplated the construction of duck ponds irrigated with excess reclaimed water during the wet season (October 1 through March 31). The pond effluent (reclaimed water held in the ponds for no more than 14 days) was to be discharged into San Diego Creek and Upper Newport Bay at a rate not to exceed 5,000,000 gallons per day ( "5 MGD "). The Project also included the dry season (April 1 through September 30) diversion and de- nitrification of water from San Diego Creek and the use of reclaimed water to irrigate Marsh Mitigation Areas ( "Marsh ") located west of the Michelson Plant. According to IRWD and their consultants, the pond effluent would contain less nutrients than the water in San Diego Creek and would slightly improve water quality by reducing the concentration of nutrients in the water flowing into Newport Bay. Others disagreed -often vehemently. The City and Defend the Bay (a local organization headed by Mr. Bob Caustin) appeared before the SARWQCB • and opposed issuance of the permit. The permit was issued notwithstanding our opposition. Defend the Bay filed an appeal with the State Water Resources Board, lost the appeal and filed a legal challenge that was ultimately successful. The Basic Integrated Re-Use Project Agreement (BIRPA). After the permit was issued for the Project and before Defend the Bay filed their legal challenge to the permit, the City, IRWD and the Orange County Water District (OCWD) entered into the Basic Integrated Reuse Project Agreement (BIRPA). The concept behind BIRPA was to achieve the objectives of the Project (irrigation of duck ponds, nutrient reduction, obtain water quality data) without reclaimed water discharges. To achieve Project objectives in the short term without the discharge of reclaimed water pursuant to the Project permit, BIRPA provided for (see Attachment A for a graphic of a portion of the BIRPA system): (a) Construction of two pipelines - Green Acres Phase 2 (GAP 2) and the Intertie - that allow the'wet season' transmission of up to 7.8 MGD of reclaimed water from the Michelson Plant to OCWD facilities in Huntington Beach, (b) IRW D's commitment to supply and OCW D's commitment to accept up to 7.8 MGD of reclaimed water during the period from October 1 through March 31 for a term of fifteen (15) years (through 2011) with these and related commitments memorialized in a separate agreement; (c) CITY's commitment to obtain "end -user" agreements from property owners with large areas of open space that can be irrigated with reclaimed water and a $500,000 contribution to OCWD to help fund end -user retrofits (necessary to make GAP 2 financially feasible). (d) City commitments not to appeal or file a legal challenge to the decision of the • SARW QCB to issue a permit for the Project and to support amendment of IRWD's NPDFS permit to authorize use of reclaimed water to irrigate the marsh. SJR Conversion Staff Report January 23, 2001 Page 5 (e) IRWD's commitment to not discharge reclaimed water for a three year period • (assuming no City default in the interim) and, assuming SARW QCB approval, to instead conduct a demonstration praject that irrigated the ponds with reclaimed water, measured nutrient reductions, and retreated pond effluent The City was able to secure end -user agreements and to comply with its obligations under BIRPA. OCWD and IRWD were able to construct facilities under budget and on time, and IRWD did secure, with City assistance, all approvals necessary to proceed with the demonstration project. During the latter stages of the demonstration project, a court invalidated the permit for the Project and, as a result, no reclaimed water was ever discharged into San Diego Creek. BIRPA's Section Six and Order 94-22. BIRPA also obligated the CITY and IRWD to use their best efforts to ensure that W WSP's objectives are achieved in throughout the term of BIRPA and, in Section 6, identified the prerequisites to a "long -term no discharge scenario." We believe that they prerequisites to a "long -term no discharge scenario" have been fully satisfied. As such, we believe that the only conditions under which IRWD can discharge RW into the Creek or Bay are those specified in the existing National Pollutant Discharge Elimination System (NPDES) Permit (Order 94 -22). Order 94-22 allows discharges from the Sand Canyon Reservoir during the wet season when more than a specific amount of rain falls over seven days (equal to the amount of rain that would fall during a 25 -year storm event- that's about 5 inches). Conversion of the SJR. As noted above, IRWD wants to use SJR as a reclaimed water reservoir. SJR has the capacity to store approximately 2,500 acre feet of • reclaimed water. IRWD currently operates two reclaimed water reservoirs - Sand Canyon Reservoir with a capacity of approximately 900 acre -feet and Rattlesnake Canyon Reservoir with a capacity of approximately 700 acre -feet. IRWD cannot store more than 200 acre feet of reclaimed water in Sand Canyon from October 1 to March 1 so that Sand Canyon can accommodate storm water inflow from its watershed. SJR has no watershed and is not subject to any significant storm water inflow. During the past 18 months, IRWD has obtained commitments to sell ownership interests from all trustees except Newport Beach. The City Council formally supported the conversion of SJR on October 24, 2000 (see approved actions in the Executive Summary of this document). However, the Council has also recommended that IRWD should prepare an EIR for the Reservoir's conversion and should ensure that SJR is operated in a manner that fully protects nearby residents against odor and aesthetic impacts. The SJR's conversion has significant support from residents around SJR (Harbor Ridge Crest HOA, Harbor Ridge Master HOA, Spyglass HOA, and Newport Coast's Rivage) - they believe its conversion will improve the aesthetics of the area and it will allow the Harbor Ridge Community to save money by using reclaimed water to irrigate their common area. Transfer Documents and Sale Price. As noted, on October 24, 2000, the City Council authorized (with conditions) the City Manager and City Attorney to execute documents associated with the transfer of the City's approximate T.18% • ownership right in the San Joaquin Reservoir to IRWD for $360 /acre feet of SIR Conversion Staff Report January 23, 2001 Page 6 • ownership (about $13,000). Any transfer of ownership rights also includes a transfer of any liability obligation on the City's part for the future use of the Reservoir. IRWD staff has told us that transfer documentation includes language which would negate the transfer and return the City's ownership share to the City should IRWD choose at a later date NOT to convert the Reservoir to a reclaimed water storage facility. Conversion Schedule. IRWD's conversion schedule is as follows: Circulation of MND September 2000 - October 2000 Adopt Final MND December 2000 Finalize Construction Plans July 2001 Authorize Construction Bid July 2001 Commence Construction August 2001 Complete Construction, begin Fill April 2003 Complete Fill June 2003 Current Status of the Discussion. On December 18, 2000, IRWD approved a Final Mitigated Negative Declaration notwithstanding EQAC's October 2000 comments. EQAC commented again on IRWD's adoption of the Final MND. (comments included in Attachment B). EQAC's comments center primarily around: • • the conversion's potential to induce growth by freeing up potable water supplies that might otherwise limit growth. • vagueness in the operating protocols that IRWD would implement to combat vector and odor problems with the SJR. The 30 -day period for contesting IRWD's approval expired on January 18, 2001. The City received a letter dated January 9, 2001 from Mr. Kevin K. Johnson (Attachment C) representing Defend the Bay requesting that the City: • take no affirmative steps to support IRWD's contention that the SJR's environmental documentation is adequate. • not approve or implement the sale of its interest in the SJR without substantial guarantees from IRWD, including the adoption of operating protocol that balances RW at Sand Canyon and the SJR so as to "expeditiously as possible more towards a complete no-discharge policy" from IRWD. • Abandon any "joint statement of objectives" as the City once considered, given that such a statement might cause the city to "indefinitely support discharge standards under Order 94 -22." On January 11, 2001, the City also received a letter from IRWD offering a "collective defense" of any litigation by Defend the Bay over the MND (see Attachment D) and asking that the "all the owners (of the SJR) ... process the sale documents" notwithstanding Defend the Bay's potential challenge. ATTACHMENTS: Attachment A - 1RWD's Reclaimed Water System Graphic Attachment B - EQAC's Comments on the Mitigated Negative Declaration • Attachment C - Letter to the City from Defend the Bay - Jan 9, 2001 Attachment D - Letter to the City from IRWD - Jan 11, 2001 Ll 9 0 Attachment A RATTLESNAKE CANYON RESERVOIR I Capadry= 700 am fast (about 1.5 MGD) 11 Stakes = In use Ia Reoseirred Water Storage Loco50n = Norb of Irvine. east d Tustin0range MICHELSON WATER RECLAMATION PLANT (MWRP) RW ProEUCM1On Capacity = la MGD (malign gabnslday) RW Capeclly at BuiNaut= 27 b 00 MGD Dung wintertime. IRND here more RN Than it can sell. so It — Produces only about 15 MGD — Sells up b 5 MGD N me users — Puts 4.8 MDG to 7.8 MGD into GAP I9lnterte (see BIRP) —Storrs up N 0.5 MGD in Sand Canyon and Radearake Cyn. THSleavemexcessdf 4- MGDb1.9MGDtoday. The San Joawrn Reservdr wn herd from 7 -10 MGD Or 5,000 of Lipper Newpor, BASIC INTEGRATED REAISE PROJECT AGREEMENT (BRPA) Term = INS to 2011 Parties are City. IRWD, and OCWO. — GAP II. Cmnectr OCWO N City of NS with a 7.0 MGD pipe — Inserts. Comeols"AP b GAP II Mb a 7.0 MGD pipe. — OCWO agreea to incept 4A -7.0 MGD kom 10/1 b 3151 of each year hough 2011 If • GAP II and NteNe mnpseled: • OCSD accepb d least 4,2 MGD fran 10 11 to 391: —Ciry mrsnits b o e.in'anduser a,"Oran s- (Bg Cr CC, NBCC) plus oonNbutes $WW b IneartalGAP II pees. — Lmg-Term NODbdlatge StanedO IRWO all City agree b use 'bed etma' N agree on ways b actions, DIRP mjM was wibout any dsgarge Of M. 46� y�'C �9�� aRR �.._ BONITA CYN BAN JOAQUIN RESERVOIR Capacity =2.500 at uleatla. 5.000 dukmate capadry SIaM = Empty — No watershed (Unlike Sand Canyon). Merebre no OVedbw end. reed b dns& age. —Ciry wens 1.18% of Me Reservdr abng man seven other Mners (IRWD, MW D, City of Huntington Beach, Laguna 9 Eason County water D'atria Soul, Coast Weser DstAg. and The Mrne Company) — WouN come man Nple IRWO'e M Wbterfins strxw7e capadry (Ire -90) aJ, b 0A00 al. if SJ Ree.ir m4.). SAN SIR Conversion Staff Report January 23, 2001 Page 7 SAND CANYON RESERVOIR Capacity =800 eve teeL Set d 200 at at end Of dry season ( 4- MGD whet tell) Stall =:n use for Regained Water Storage (miswhainfat) — He, a watershed bet ceueea it N went. In tmain uto. ewnb. — Reseaeae eerees water i10 Sand Carryon Wash (wNctr eaters San Dis, Creek) acomding b MM,iMa* of Order 9422 — Located near Micadson and University, at Strawberry Fare Got Course. _ ORUER94 -22 Issued by me Regional Bond as a part of IRND's National Pollutant D'bctrage ElimmMdd Pmmit(NPDES). Appteab IRND's RW system —A9ays discharge Out of Sand Canyon ceding 25-year dorm went (5' of ran) war a 74ay period. —Order has expired. but IRWO Neer to ren. It Regional Board needs b update Been Plan Maims Regbrel Board WN consider a nomad. �EX. P. W P � e ®® PROP. RW PD•E �v+lw�ier�=�w turn Attachment B SIR conversion Staff Report January 23, 2001 Page 8 o��WPOR CITY OF NEWPORT BEACH MEMORANDUM TO: Mayor Gary Adams Members of the Newport Beach City Council FROM: The Environmental Quality Affairs Citizens' Advisory Committee DATE: January 2, 2000 RE: The Irvine Ranch Water District's (IRWD) Final Mitigated Negative Declaration (FMND) for the Conversion of the San Joaquin Reservoir Thank you for the opportunity to provide further comments (the "Further Comments ") on the Draft Mitigated Negative Declaration ( "DMND ") for the San Joaquin Reservoir (the "Reservoir" or "SJR ") Project (the "Project "). These comments supplement our earlier comments on the DMND and focus on the Irvine Ranch Water District's (the "District ") Responses to Comments including Responses isto our earlier comments. At the outset, as with our earlier comments, we wish to thank you, the Members of the City Council, and members of the City's staff including Mr. David Kiff, Deputy City Manager, for their invaluable assistance in understanding the Project and in developing these Further Comments on the District's Responses. Of course, these Further Comments are those of the Committee and do not reflect the views of City staff or anyone other than the Committee. Further, we wish to thank Mr. Houlihan and the Irvine Ranch Water District ( "IRWD" or the "District") for providing us with a copy of the Responses. Unfortunately, we received these Responses on December 15, 2000, three (3) calendar days prior to the District's hearing on this matter. I. A Brief Summary of Our Continued Concerns. We remain convinced that IRWD still should have completed a full Environmental Impact Report (EIR) for the Project for several reasons: First and most importantly, although the District's Master Plan acknowledges the Project's growth- inducing impacts, the FMND fails to • recognize and mitigate such impacts even though the Project more than doubles the District's reclaimed water storage capacity. The District's Master Plan recognizes that the Project will free up invaluable SJR Conversion Staff Report January 23, 2001 Page 9 groundwater supplies. One possible mitigation measure for these • growth- inducing impacts is the re- operation of Sand Canyon Reservoir at a lower pre -rain level. Second, the District and the FMND should provide a more detailed account of how it will rehabilitate and operate the Reservoir. Two crucial documents relied on by the District for the FMND- the FMND's Mitigation Monitoring Plan (MMP) and the "Non- Potable Water Storage Study " - were both unavailable for our timely review. These documents merely catalogue a menu of measures that the District may use to mitigate odor, algae, seepage and vectors. However, neither document specifies which measure the District will use or under which circumstances the District will use them. Third, the Project' s cumulative impacts may also be significant. The FMND failed to provide a complete analysis or mitigation for such impacts. Fourth, we have other continued concerns as set forth below over various aspects of the Project and the FMND. II. Introduction: The "Fair Argument" Standard • that CEQA Guidelines section 15070(b) requires that a mitigated negative declaration show "project plans or proposals ... would avoid the effects or mitigate the effects to a point where clearly no significant effects would occur." Id. (Emphasis added.) Further, environmental documents such as the DMND are reviewed using the "fair argument" standard: "Under this test, the agency must prepare an EIR whenever substantial evidence in the record supports a fair argument that a proposed project may have a significant effect on the environment. [Citations.] If such evidence is found, it cannot be overcome by substantial evidence to the contrary." Gen v. City of Murrieta (1995) 36 Cal. App. 4th 1359,1399 -1400 (Emphasis added.). As noted above and discussed below, the FMND and the Responses to Comments fail to • satisfy this "fair argument" standard: indeed, rather than establishing that no fair argument shows that SIR Conversion Staff Report January 23, 2001 Page 10 • the Project will have significant impacts, as discussed below, the FMND including District's own documentation incorporated in FMND, itself, establishes that the record contains substantial evidence that the Project will have a significant impact on the environment. Moreover, the District concludes that the Project has no significant impacts, see, e.g. Response to Comment No. 23 -3, and requires "no new mitigation measures," see, e.g., Response to Comment No. 23 -2. However, the FMND have added new studies, e.g. the "San Joaquin Reservoir Non - Potable Water Storage Study," December 2000 (after the Comment period), and added new mitigation measures, e.g. 23 -13 including a deferred approval of the construction drawings for the Project's Chlorination Facility. III. Factual Introduction On October 16, 2000, the Subcommittee approved submitting its Comments to the City Council. On October 24, 2000, the City Council endorsed the Subcommittee's comments for submission to the District. In December 2000, Dudek & Associates ( "Dudek ") submitted a draft Mitigation Monitoring Program ( "MMP") to the District. On December 15, 2000, Dudek submitted a draft "San Joaquin Reservoir Non - Potable Water Storage Study (the "Study "). On December 18, 2000, the District approved the Final Mitigated Negative Declaration ( "FMND "). The District filed the Notice of • Determination ( "NOD ") on December 19, 2000; any actions challenging the FMND or the Project under CEQA must be filed within thirty (30) days of the filing of the NOD. See Public Resources Code section 21167(b), (c), and (e); CEQA Guidelines sections 15075(e), 15094(d) and 15112(c)(1). In addition, at our December 19, 2000 meeting, EQAC authorized the preparation and presentation of these Further Comments. IV. Response to Comment 23-3; "Growth Inducing Impacts." The most conspicuous impact for which substantial evidence exists is the Project's "Growth Inducing Impacts." The thrust of our "Growth Inducing" Comment is: "The Project more than doubles the District's storage capacity for reclaimed water. This substantial increase in capacity will doubtless effect and increase the utilization of reclaimed and potable water. The increase in reclaimed water is obvious: the increase in storage will increase the capacity of the entire system. However, this increase in reclaimed capacity will free up substantial quantities of potable water. These newly available potable supplies will be available for other growth- inducing uses. The final environmental document including an • EIR must discuss these capacity issues and their effect on growth." SIR Conversion Staff Report January 23, 2001 Page II EQAC Comments, Page 7, IRWD Comment No. 23 -36. The District' s Response No. 23-3 and 23 -36 which • incorporates Response to Comment No. 23-3 wholly misunderstand the point of our Comment and concludes: "For this reason IRWD has determined San Joaquin Reservoir would have no growth inducing impacts on areas outside IRWD's service area." This conclusion addresses only a part of our concerns: what is the Project' s impact on growth within the District's service area? Further, does the Project affect other areas pursuant to the Cortese -Knox- Hertzberg Local Government Reorganization Act of 2000, which, among other things, this amendment allows the District to serve areas outside of its service area and may modify the factors for LAFCO action including those affecting water service? More importantly, this conclusion conflicts with the District's own Master Plan which the FMND incorporates. The District' s Master Plan notes that the District currently uses groundwater in its Non - Potable Water Supply and may have to continue such use. See, e.g., IRWD Water Resources Master Plan, Chapter 4, Pages 4-4 thought 4 -9. However, the District concludes: "It is generally more cost - effective to use high quality groundwater resources in the potable water system than in the non - potable water system. Thus, an expansion of MWRP treatment capacity and the inclusion of SJR as a reclaimed water seasonal storage reservoir are the • preferred reclaimed water supply solutions to increased system demands rather than using high quality groundwater resources in the reclaimed water system." IRWD Water Resources Master Plan, Chapter 4, Page 4-12 (Emphasis added.). This plan and recognition raises several points. First, the District itself recognizes in its Master Plan, but not in the DMND or Responses, that the Project will serve to increase the District's use of its own high quality groundwater supplies, not its imported water supplies, for its potable water supplies. Such an increase will have the growth inducing impacts of increasing potable water supplies by freeing up groundwater supplies. Incredibly, the District totally misunderstands our Comments and completely ignores or forgets its own conclusion in its Master Plan. The thrust of our Comments on "Growth Inducing Impacts" is that the Project will free up potable water supplies. The District' s Master Plan supports this point and specifies the source of the water: the Project will free up groundwater supplies to augment potable supplies. Second and more importantly for the long term, the Project together with the expansion of the Michelson Water Reclamation Plant ( "MWRP ") represent the District's long term buildout of its Non - Potable Water Supply System. By processing the Project before the expansion of MWRP, the District is making capacity available for the increased production of MWRP. Simultaneously, the FMND ignores the long term and cumulative impacts of the Project on the District's Non - Potable Water Supply System. If the District chooses to ignore these system improvements now and thereby creates available storage for • the MWRP expansion, then when that expansion occurs, the District may again ignore the system impacts SIR Conversion Staff Report January 23, 2001 Page 12 • because those impacts are already part of the District's Non - Potable Water Supply System. The time to address the Project's long term impacts is with this Project. As to the District's Response to our Comment Nos. 23-3 and 23-36, the FMND and the Response state that the Project " ... is not considered to be growth inducing for several reasons :' In abbreviated form, these reasons (and our responses) are: (1) The Project which relates to storage will not increase reclaimed water production (This Response misunderstands our Comment and conflicts with the District's Master Plan); (2) The Project which concerns storage of reclaimed water does not increase total water storage, because, if SJR were on line as a potable water reservoir, it would not increase water availability (Again, this Response misunderstands our Comment and ignores the point of the Master Plan: storing additional reclaimed supplies frees up potable groundwater supplies, see IRWD Water Resources Master Plan); (3) The Project seeks to meet reclaimed water demands and "...would not induce or serve as a catalyst to growth" (As before, this Response ignores the thrust of our Comments and the Master Plan: the Project will have a significant impact on potable water supplies); is (4) Growth is controlled by the cities in which the District serves water and reclaimed water in these areas can be served currently by groundwater or under the Project by reclaimed water (This Response is misplaced: water availability affects land use decisions, see Water Code section 10910 et seq.; Stanislaus Natural Heritage Project v. County of Stanislaus (1996) 48 Cal. App. 4th 182); and (5) The Project is not growth inducing because imported water supplies are limited by the wholesaler, the Metropolitan Water District of Southern California (This Response is beside the point: the Project will affect the use of high quality groundwater; in addition, if reclaimed supplies replace any potable water supplies whether imported or local, those reclaimed water supplies will free up potable water supplies and will affect growth in the area). Interestingly, the District's Master Plan states: "A study is in process to access the feasibility of converting the [San Joaquin] reservoir to a reclaimed water storage facility operated by IRWD with stored water being sold to other local agencies currently owning capacity in the reservoir." • SIR Conversion Staff Report January 23, 2001 Page 13 IRWD Water Resources Master Plan, Page 4 -7. Perhaps, the City should participate in the sale, rather • than the ultimate purchase, of the stored water supplies in its reservoir. Moreover, as Response to Comment No. 23 -3 states that the District anticipates no growth in areas outside its service area, it is unclear that water users' purchase of such supplies may not also affect growth in those areas for the same reasons discussed above. Finally, given the Project's significant growth inducing impacts, we recommend that an acceptable mitigation measure is for District to operate Sand Canyon Reservoir at a lower pre -rain level. III. Response to Comment No. 23-15; "Resident Complaints." Comment No. 23-15 states our general concern: "[Section 2.51 is confusing in that the exact extent of the impacts remains unstated and the nature of the mitigation and /or its effectiveness is not explained" The Response to this Comment refers to the new Mitigation Monitoring Plan and the December 15, 2000 "San Joaquin Reservoir Non - Potable Water Storage Study' (the "Non- Potable Water Storage Study "). Neither the MMP nor the Non - Potable Water Storage Study were available for comment during the Comment period. These documents are inadequate for several reasons. First, these documents do not address each of the impacts noted. Second, each of documents fails to provide specifics as to the nature and extent of the mitigation. However, even assuming the documents were sufficient, CEQA requires that the public should have the ability to review and comment on these • documents. Public Resources Code section 21080; CEQA Guidelines section 15070(b)(1); Quail Botanical Gardens Foundation, Inc. v. City of Encinitas (1994) 29 Cal.App.4th 1597,1605 n. 5 ( "the City cannot rely on post approval mitigation measures adopted during the subsequent design review process ") Moreover, the Non - Potable Water Storage Study is inconsistent with the Master Plan. This Study erroneously states the source of water supply for the Reservoir: "The sole purpose of the San Joaquin Reservoir is to store reclaimed effluent for distribution with the IRWD service area" However, the Master Plan states that the non - potable system includes groundwater supplies. IV. Response to Comment No. 23-43; "Seepage." Comment No. 23113 addresses the Project' s potential seepage and associated impacts on water quality. Neither the FMND nor the Non - Potable Water Storage Study address or alleviate this concern. Indeed, the Non - Potable Water Storage Study suggests: SIR Conversion Staff Report January 23, 2001 Page 14 • "It is conceivable that the best answer to the perceived problem would be to collect the seepage from the underdrain system in a tank and pump it back into the reservoir" is Notwithstanding the "conceivability" of this mitigation measure, CEQA requires that the District specify the impact and associated mitigation. This proposal falls far short of this obligation. V. Response to Comments Nos. 46 and 23-50; "The Reclaimed System Growth Inducing Impacts, Cumulative Impacts and Mitigation." This Comment addresses the growth inducing impacts of the Project and proposes mitigation measures for the identified impacts. The Response states: "The subject project does not affect Sand Canyon Reservoir discharges, which are regulated by permit." However, this Response ignores the District's Master Plan. In addition to the above, the FMND and Table 9 -4 of the Master Plan states that the San Joaquin Reservoir is also governed by a National Pollutant Discharge Elimination System ( "NPDES ") Permit. Indeed, the Master Plan explains the nature of NPDES No. CA 0105953: "The nonpotable system monitoring program is driven by regulatory, process, and operational control and customer requirements. Regulation monitoring requirements are defined in RWQCB Order No. 94 -22, NPDES No. CA 0105953, which contains consolidated waste discharge requirements for the discharge of tertiary MWRP treated wastewater to reclamation reservoirs, emergency overflows from Sand Canyon Reservoir dewatering wastes from the MWRP, and other minor discharges. Reporting provisions are also included in this permit." IRWD Water Resources Master Plan, Chapter 9, Page 9-5 through 9 -6 (Emphasis added.). That is, the Permit concerns system -wide discharges. Further, as indicated above, the Project is one -half of the ultimate expansion of the District's non - potable water system. As the Master Plan provides: "Thus, an expansion of MWRP treatment capacity and the inclusion of SJR as a reclaimed water seasonal storage reservoir are the preferred reclaimed water supply solutions to increased system demands rather than using high quality groundwater resources in the reclaimed water system" • SIR Conversion S1affReporf January 23, 2001 Page 15 IRWD Water Resources Master Plan, Chapter 4, Page 4-12. Hence, the Project is part of the District's • Non - Potable Water System expansion. As indicated above, the Project threatens to have growth inducing impacts. The most effective mitigation of such impacts is mitigation of the system expansion: operate the Sand Canyon Reservoir at lower levels than permitted by the NPDES Permit. Comment No. 23-50 addresses the Project' s cumulative impacts. As indicated above, the FMND incorporates the District's Master Plan. As stated above, the Project and the expansion of MWRP constitute the ultimate expansion of the District's Non - Potable System. The cumulative impacts of the Project will include the full expansion of the District's Non - Potable Water System: the Project is a necessary condition for the expansion of MWRP. The additional storage is necessary for the MWRP expansion. Hence, the final environmental document must address the Project's cumulative impacts. VI. Response to Comment No. 23 -26; "Chlorination Alternatives." As indicated above, CEQA requires that the environmental document, e.g. the FMND, contain all mitigation measures so that the public can comment on the entire project including the mitigation measures. Here, Response to Comment No. 23 -26 states that: "IRWD will look at the benefits of different disinfection systems before • completing the final design. In either case, IRWD will insure that whatever system is used will pose no significant impact on the environment." Without specification and without the ability to review and comment on this measure, this Response and the MMP violates the level of specificity and analysis required by CEQA, the CEQA Guidelines and the relevant case law. Response to Comment No. 23 -38 states that night time lighting of equipment will be discouraged but " ... if required will be shielded from all local residences ...." The Response fails to state who will require such lighting. VII. Other Comments and Responses. As indicated in our Comments including Comments Nos. 23 -8 through 23 -14, the DMND failed to provide a clear Project Description. As indicated above, the FMND and Responses to Comment No. 23 -9 provide some support for the water demand projections used in the DMND: As indicated above, • the District's Master Plan contains additional and important information which conflicts with the FMND. SIR Conversion Staff Report January 23, 2001 Page 16 • Moreover, the focus of many of these "Project Description Comments," e.g. Comments Nos. 23 -5 through 23-14 address the FMND's failure to recognize the Project's relation to the City of Newport Beach and its sphere of influence. Nothing in the FMND clarifies this problem. However, both the District's Master Plan and the NOD address this issue: the Project itself - the SJR conversion - is within the Cities of Newport Beach and Irvine. Response to Comment No. 23 -12 is likewise inadequate: Neither the DMND nor the Responses provide the design and dimensions of the Pump Stations. Further, the Response allows that "adjacent Homeowners Associations and the City of Irvine ...[have] been granted as a part of the MND the right to review the final design plans of these facilities" Pursuant to our Comments, the City of Newport Beach should have the right to review the design plans. Response to Comment No. 23 -14 fails to analyze, discuss and explain the Non - Potable Water Supply projections and the reduced demand figures for the long term. In order to assess the long term impacts of the Projects, such analysis is essential. Response to Comment No. 23 -15 again provides no discussion or analysis which would link specific mitigation measures to specific impacts. Without such discussion, neither the public nor any finder of fact can determine which impacts are mitigated and which are not. Responses to Comment Nos. 23 -21 and 23 -31 fail to discuss or explain the unique is concerns and setting of the SJR and the Project. A general discussion cannot address unique site characteristics or terrain. Moreover, Response to Comment No. 23 -21 which incorporates Response to Comment No. 23 -15 and the Non - Potable Water Storage Study fails to discuss our concerns about the implementation of the Best Management Practices. Moreover, as indicated above, neither the MMP nor the Non - Potable Water Storage Study were available for public comment and review. Finally, many of the Responses lack the specificity and sufficient analysis. These include: Responses to Comments Nos. 23 -17 and 23-19 fail to provide performance benchmarks and time frames; Response to Comment No. 23 -24 fails to define or discuss the meaning of the term "periodically" in the context; Responses to Comments Nos. 23-25 and 23-44 fails to provide the necessary specifics. Other Responses suffer similar problems. • A MA!"a.ml wnm Robert Burnham, City Attomey City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658 -8915 January 9, 2001 Mayor Gary A. Adams and City Council Members City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663 Date Copies Sent To: Mayor Council Member Manager /❑ Attorney Re: San Joaquin Reservoir Project ❑ Ladies and Gentlemen: The purpose of this letter is to briefly state Defend the Bay's request to the City regarding how it should proceed in light of the Irvine Ranch Water District's recent approval of a Mitigated Negative Declaration ( "MND ") for the San Joaquin Reservoir project. First, Defend the Bay is requesting that the City take no affirmative steps to support the Water District's contention that the environmental documentation is adequate. Second, we urge the City not to approve and/or implement the sale of its 1.8% capacity interest in the reservoir without substantial additional guarantees from IRWD. In this regard, Defend the Bay is very concerned that the reservoir project review has not included a careful consideration of how San Joaquin Reservoir can be operated in a way to reduce, long -term, pressures for live stream discharges into San Diego creek. Historical discharge data was previously submitted to the City counsel in October 2000, reflecting the very high frequency of discharges into the creek even under purported compliance with the applicable NPDS Permit (Order 94 -22). One logical protective measure would be to require IItWD to operate the San Joaquin Reservoir facility with enough excess capacity to receive transfers from Sand Canyon that would otherwise become discharges in the event of the qualifying 25 year storm event. The amount of necessary "insurance" capacity for San Joaquin Reservoir should be relatively easily quantifiable and should be a part of a mandatory operating protocol. In essence, the goal is to proceed as expeditiously as possible towards a complete no discharge policy from the ever- expanding reclaimed water system of the Irvine Ranch Water District. Defend the Bay further suggests that any operating protocol designated include a specific requirement that, in the event there is a future live stream discharge, the excess capacity at San Joaquin would be increased by at least the amount of the most recent, unavoidable discharge. • • Attachment C SIR Comwrsion Staff Report January 23, 2001 f Page 77 JOHNSON & EDWARDS EiVED KEVIN K. JOHNSON' A REGISTERED LIMITED LIABILITY PARTNERSHIP SACRAMHNTOOFFICE JOHN E. EDWARDS INCLUDING A PROFESSIONAL LAW CORPORATION 1o064TH SiRFFiT, 6IH FLOOR DAVID D. CROSS ATTORNEYS AT LAW '0 t11�1 SCRp�Nrl). CA 95814 �8 HEIDI E. BROWN 402 WEST BROADWAY. SUITE 1140 y� SHY •1 V JEANNE L. MUcKINNON SAN DIEGO, CALIFORNIA 92101.8513 TELEPHONE (916) 492-0635 JARED P. HANSON 1 FAX (916) 4920530 LFAX(619)696- 75116 OFFICE OF THE .. Y CLERIS •Anari« "W NEVYPOD T @EACH A MA!"a.ml wnm Robert Burnham, City Attomey City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658 -8915 January 9, 2001 Mayor Gary A. Adams and City Council Members City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663 Date Copies Sent To: Mayor Council Member Manager /❑ Attorney Re: San Joaquin Reservoir Project ❑ Ladies and Gentlemen: The purpose of this letter is to briefly state Defend the Bay's request to the City regarding how it should proceed in light of the Irvine Ranch Water District's recent approval of a Mitigated Negative Declaration ( "MND ") for the San Joaquin Reservoir project. First, Defend the Bay is requesting that the City take no affirmative steps to support the Water District's contention that the environmental documentation is adequate. Second, we urge the City not to approve and/or implement the sale of its 1.8% capacity interest in the reservoir without substantial additional guarantees from IRWD. In this regard, Defend the Bay is very concerned that the reservoir project review has not included a careful consideration of how San Joaquin Reservoir can be operated in a way to reduce, long -term, pressures for live stream discharges into San Diego creek. Historical discharge data was previously submitted to the City counsel in October 2000, reflecting the very high frequency of discharges into the creek even under purported compliance with the applicable NPDS Permit (Order 94 -22). One logical protective measure would be to require IItWD to operate the San Joaquin Reservoir facility with enough excess capacity to receive transfers from Sand Canyon that would otherwise become discharges in the event of the qualifying 25 year storm event. The amount of necessary "insurance" capacity for San Joaquin Reservoir should be relatively easily quantifiable and should be a part of a mandatory operating protocol. In essence, the goal is to proceed as expeditiously as possible towards a complete no discharge policy from the ever- expanding reclaimed water system of the Irvine Ranch Water District. Defend the Bay further suggests that any operating protocol designated include a specific requirement that, in the event there is a future live stream discharge, the excess capacity at San Joaquin would be increased by at least the amount of the most recent, unavoidable discharge. • • Robert Burnham, City Attorney • Mayor Gary A. Adams City Council Members January 9, 2001 Page 2 Finally, the proposed Joint Statement of Objectives as between the City and the Water District unnecessarily ties the hands ofthe City by committing it indefinitely to supporting discharge standards under Order 94 -22. This document in its current form should not be adopted. Defend the Bay cannot over - emphasize the fact that any release of reclaimed water into Newport Bay has multiple adverse environmental impacts. The City of Newport Beach now has a unique window of opportunity to exercise control over IRWD policies and practices on live stream discharge. We urge you to not adopt the Joint Statement of Objectives as written and to advise IRWD that there will be no ownership conveyance until both short and long -term environmental impacts are adequately dealt with. Thank you for your careful consideration of these matters. is I; ART-M cc: Defend the Bay • Very truly yours, f_ uON�& EDW S P K.7ohnson Attachment D 11 �s imwr � Wgjpl a17kP7 11Yit1EROM WATER DISYRU 15607Sand (%nyonAwnw,P.O.Bw57000,kVm, CaffarA 791619-7000,(VV)453&300•w ..Gwd,mn January 11, 2001 Mr. Mike Sinaeori City of Newport Beach 3300 Newport Beach Newport Beach, CA 92658 -8915 Re: CEQA Litigation — San Joaquin Reservoir Conversion to Reclaimed Water Storage Dear Mr. Si ori: (/Z11,1A -e_ As some of you are aware, Defend the Bay, an environmental group, has given notice under the California Environmental Quality Act (CEQA) of its commencement of an action to challenge the mitigated negative declaration adopted by Irvine Ranch Water District's (IRWD) Board of Directors on December 18, 2000, for the acquisition and conversion of the San Joaquin Reservoir. Although disappointing, this action was not unexpected. IRWD believes its environmental analysis and mitigation are thorough and more than adequate, but Defend the Bay has concerns with the conversion project as well as long- standing differences with IRWD. IRWD appreciates the patience and effort of all the owners to consummate the sale transaction. and remains committed to the project. We don't yet know if the sale transaction itself will be challenged, or what parties will be named, but I want to assure you that IRWD intends to be fully responsible for providing the defense of the action. We are looking at the possibility of using a collective defense agreement if appropriate and necessary, and will contact you shortly in that regard. The collective defense agreement would provide that IRWD would defend the action on behalf of itself and any other owners who have signed the sale documents, if they are named in the action. IRWD would like the sale transaction to proceed (unless enjoined by the court) at our risk, pending the final determination of the action and additional CEQA review proceedings if any should be required. Under Section 21167.3 of CEQA, responsible agencies are to assume that the negative declaration complies with CEQA and take their actions unconditionally (if no injunction or stay is granted) or conditionally (if an injuction or stay is granted). Conditional approval constitutes permission to proceed when there is a determination that the environmental document complies with CEQA, and unconditional approval constitutes permission to proceed at the applicant's risk pending the determination. We will continue to process the sale documents and ask that all the owners do the same until further notice. We will keep the owners advised of further developments. ru urs, P9ul D. Jones I1 General Manager 986 -3 100 /100 d BEE-i 8ZZ1 E517 6176 L� • %- f OM81 -wad wd10:80 1002 -11-10