SGMA * Planning Update #4 *Sustainable Groundwater Management Act

1. SGMA* Planning Update #4*Sustainable Groundwater Management Act Aromas Water District Board of Directors Meeting December 21, 2016

2. SUMMARY - UPDATE #4 • At the November AWD Board meeting, staff first presented seven draft Options regarding GSA formation. • In December staff researched the pros/cons of each of the seven options and hosted a meeting with all three neighboring water agencies • As a result, 4 of the 7 options can be eliminated at this time • Of the remaining 3 options, Option A (PVWMA’s submittal of their “Alternative plan”) appears to be pivotal. State approval could eliminate the need for AWD and the counties to form GSAs to cover the PUMA • If the State denies the Alternative plan, AWD would still have 180 days to reevaluate the options and consider forming a GSA. This is a realistic timeframe.

3. SUMMARY (Cont’d) • THIS PRESENTATION: • Reviews and analyzes each the seven draft Options • Explains why 4 of the 7 draft options are no longer recommended at this time • Describes the benefits of Option A (PVWMA’s Alternative plan) and explains why AWD may wish to support PVWMA • Explains how AWD would still be able to form a GSA if the State denies PVWMA’s Alternative plan

6. SEVEN DRAFT OPTIONS: • In November staff introduced seven draft options (below) • In December staff researched the pros/cons of each of the seven options and hosted a meeting with all three neighboring water agencies to discuss • The next several slides explain each Option • Option A has several positive benefits • If Option A is denied, then other options can still be revisited at a future date

7. OPTION A: PVWMA’s Alternative Plan DESCRIPTION: AWD takes no action at this time PVWMA submits their alternative plan to State AWD waits for up to two years for the State to either approve or deny the alternative plan If approved, no further action would be needed by AWD If denied we would (re)consider our viable options at that time.

8. OPTION A: (Cont’d) BACKGROUND and ANALYSIS: If an agency (i.e., PVWMA) believes an "alternative plan" satisfies the same objectives as a Groundwater Sustainability Plan, the agency can submit that plan to the State for approval PVWMA's Board is authorizing staff to submit such a plan The BMP covers the basin and the PUMA The BMP is supported by: (1) highly sophisticated groundwater modeling; (2) established and stable funding (3) it is already actively being implemented with major infrastructure in place

10. OPTION A(Cont’d) • PVWMA will submit the Plan by December 31 • The timeline to receive approval or denial from State is at least 6 months ►►►up to 2 years • While the State considers the alternative plan, the June 30, 2017 deadline is not applicable. • KEY: If the plan is approved it appears that the need for AWD or the Counties to form GSAs would be moot • KEY:Ifdenied, AWD will still have 180 days to reconsider the viable Options and form a GSA • Sec 10735.2(a)(1)(C) states: “If the department disapproves an alternative…the Board shall not act until at least 180 days after the department disapproved the alternative.” • Staff is currently drafting a letter of support to be transmitted to the State with PVWMA’s submittal.

11. OPTION B: “Do Nothing” DESCRIPTION: AWD takes no action and does not form a GSA before June 30, 2017 AWD continues to report pumping and pay augmentation fees Local agencies would react to State/County “intervention” (enforcement actions) ANALYSIS: Because PVWMA will be submitting their Alternative plan regardless of AWD's actions, this "Do Nothing" option is essentially frozen for six months up to two years. KEY: If PVWMA's alternative plan is denied, this option may be reconsidered at that time.

12. OPTION C1: Form GSA for annexed area DESCRIPTION: AWD would form a GSA before June 30, 2017 to cover only our annexed areas AWD would develop and sign a voluntary MOA with PVWMA to describe our shared responsibilities The state or counties would be responsible for the areas in our Sphere and the Islands. BACKGROUND: “Critically overdrafted" Pajaro groundwater basin must be covered by a GSA by June 30, 2017 or the basin may be placed in a "probationary" status. This would be expected to trigger intervention by the State Water Resources Control Board (SWRCB) including state fees. PVWMA’s boundaries do not include the entire groundwater basin it leaves a Potentially Unmanaged Area (PUMA - See Exhibit A). Having a PUMA within the critically over-drafted Pajaro basin may cause the State Board to place the entire Pajaro basin into a "probationary" status and trigger State intervention. This is a key reason why AWD was encouraged to form a GSA.

13. OPTION C1: (cont’d) ANALYSIS: Because PVWMA will be submitting their Alternative plan regardless of AWD's actions, this Option can essentially be frozen for six months up to two years. KEY: If PVWMA's alternative plan is denied, this option could be reconsidered at that time. Of the GSA formation options, Option C1 appears to be the most viable and legally defendable

14. OPTION C2: Form GSA for annexed and Sphere of Influence areas DESCRIPTION: AWD would form a GSA before June 30, 2017 to cover both our annexed and Sphere areas AWD would develop and sign a voluntary MOA with PVWMA to describe our shared responsibilities The state or counties would be responsible for the Islands ANALYSIS: Trying to form a GSA that covers our Sphere may be complicated by legal questions regarding whether agencies have the needed legal authority to manage water use and collect fees in their Spheres. Therefore Option C2 is not recommended

15. OPTION D1: Form GSA for annexed area DESCRIPTION: AWD would form a GSA before June 30, 2017 to cover only our annexed areas Both Counties would form separate GSAs to cover the Sphere and the Islands AWD and the Counties would sign MOAs with PVWMA ANALYSIS: KEY: Because PVWMA will be submitting their Alternative plan regardless of AWD's actions, this Option can essentially be frozen for six months up to two years. Preliminary conversations with the Counties indicate they are not prepared to immediately form GSAs to cover our sphere and Islands. Instead they may prefer to await action on the Alternative Plan If PVWMA's alternative plan is denied, this option could be reconsidered at that time

16. OPTION D2: Form GSA for annexed area and Sphere of Influence DESCRIPTION: AWD would form a GSA before June 30, 2017 to cover only our annexed areas Both Counties would form separate GSAs to cover the Sphere and the Islands AWD and the Counties would sign MOAs with PVWMA ANALYSIS: Trying to form a GSA that covers our Sphere may be complicated by legal questions regarding whether agencies have the needed legal authority to manage water use and collect fees in their Spheres. Therefore Option D2 is not recommended

17. OPTION E: Formation of Joint Powers Authority (JPA) DESCRIPTION: Four water agencies (AWD, PVWMA, Monterey County and San Benito County) could form a new legal entity to regulate water as a GSA. The entire basin and PUMA would be covered. ANALYSIS: The staff of all four water agencies concur that that the formation of a JPA: (1) is legally unnecessary (there are other less expensive and more direct options); and (2) is overly burdensome to establish a new legal entity with a new board and staff. Therefore Option E is not recommended for further consideration.

18. UPCOMING STEPS: Staff is drafting a letter of support for submittal to State with PVWMA’s Alternative plan Consider other ways to support PVWMA’s alternative plan and await state review of same.

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