In December 2016, Pacific Grove officials struck the ground with ceremonial gold shovels to mark the beginning of the city’s water recycling plant on Point Pinos. Even since, the promise of bringing water to town has been a constant goal.
Actually, the hope goes back several years when the plan to build the recycling plant was first proposed. It took planning and lots of negotiation with the California State Water Resources Board and the Monterey Peninsula Water Management District. The city used $2.5 million in state grants and $5.2 million in state loans to build the plant, which opened in December 2017.
While the execution may have been complicated, the idea was relatively simple. First, P.G.’s Local Water Project, as it’s called, would recycle wastewater; the cleaned (but non-potable) water would then be used to keep the Pacific Grove Municipal Golf Course and El Carmelo Cemetery green.
For the next step, the idea was to use count the reductions in water consumption thanks to new irrigation sources, and count that water toward the city’s water yearly water allowance. After that, the city would make those excess water credits available for sale to the residents and businesses that had languished on the city’s water waiting list, sometimes for years.
In 2017, the MPWMD gave the city the go-ahead to follow that plan. But last year, state water board staff said not so fast. The Peninsula is under a 2009 cease-and-desist order to stop using water from the Carmel River. Those credits P.G. wanted to use should instead go back to the river, state water officials reasoned. If P.G. went ahead and sold them, water board officials threatened to take back the loans to the city.
P.G. City Attorney David Laredo and City Manager Ben Harvey, with help from MPWMD General Manager Dave Stoldt, began negotiations, arguing with the state that the city should have the right to sell the credits.
Their perseverance paid off on April 19, when two state water officials, the deputy director of the Division of Water Rights and the deputy director of the Division of Financial Assistance issued a letter telling Harvey and Laredo the city could sell the water—with certain restrictions.
The restrictions include a requirement that property owners must already have a water meter or a determination from the local water district that a meter can be installed.
Laredo estimates the city could earn approximately $6.36 million by selling the water entitlements.
Just a month after receiving the state’s letter, the Pacific Grove City Council voted unanimously, 6-0 (with Councilmember Cynthia Garfield absent) on Tuesday, May 15, to approve the sale of 47.88 acre-feet per year of water at a one-time sale price of $250,000 per acre-foot.
Laredo and Mayor Bill Peake explained to residents at the meeting that the value of the water entitlements was set using comparable sales of entitlements elsewhere on the Monterey Peninsula. However, the council also approved a 30-percent discount for the first residents and businesses who apply and for structures built by Dec. 31, 2020.
According to Laredo, the average home requires between a quarter of an acre-foot up to a third of an acre-foot per year. That could mean that for those building a new home in the next year and a half, a water entitlement could cost between $43,750 and $57,750; full price would be between $62,500 and $82,500. (A homeowner waiting to add one bathroom, say, would need just a fraction of that amount.)
The city will also charge a “processing fee,” Laredo said, but he did not specify what it would cost. He did say the processing the paperwork involved would be “complicated.”
The council also approved reserving 11.5 acre-feet for affordable housing units. Currently on the waitlist there is a demand for 21.434 acre-feet.
All told, that means the city has just shy of 15 acre-feet to sell on a first-come, first-serve basis.
As for the state's restrictions, Laredo plans on fighting them. “That is on an ongoing battle,” he told the council, noting that he was about to head out on vacation. “I come back on the 29th of May. On the 30th, I’ll be back in Sacramento. I will continue to get clarification so we can remove those constraints.”