The legal challenges continue as the District, joining forces with Peninsula cities, is seeking relief from the recently approved change of venue order to Santa Clara County.

Dates have not yet been determined as to when the venue appeal will be considered or, depending on the success of the venue appeal, when the court would consider action on the stay of the SWRCB CDO currently in place. Stay tuned as this issue will certainly evolve over the next few days and weeks.

Well Permit Moratorium Averted!

The District voted NOT to adopt the rushed-through urgency ordinance that would enact a moratorium on processing of applications for water distribution systems (WDS) supplied by a well drilled in “fractured rock.” The proposed ordinance was thrown together by district staff over the past couple of weeks in an attempt to freeze well application processing for 120 days - allowing district staff the time needed to study potential adverse impacts associated with wells drilled in fractured rock.

MCAR provided testimony opposing the urgency ordinance and recommended that the District continue processing WDS applications while pursuing a fractured rock well study.

The proposed urgency ordinance lacked the super majority vote needed for passage and the issue was sent back to committee for further vetting and discussion.

Property owners within the MPWMD district boundary who have NOT begun the WDS application process and require a well drilled in fractured rock, may want to consider moving forward with the application process as this issue (and possible revised ordinance) will most likely return at some point in the future.

The State Water Resources Control Board (SWRCB) released their updated draft Cease and Desist Order (CDO) this week. Hopes for sympathy or some level of practical understanding of impacts associated with its implementation, have disappeared into the vast netherworld of bureaucratic machinations.

The amended document stays the course on previous demands and further defines compliance thresholds and requirements. The draft establishes a 5% reduction (549 ac-ft) starting in October 2009 and cumulatively increases by 121 acre feet each year until 2014, at which point the annual reduction doubles to 242 acre feet annually (afa). This formula assumes that a new water supply will be online sometime in the year 2016, the deadline for by which Cal-Am “shall terminate all unlawful diversions from the river”. The total cumulative reduction in water diverted from the Carmel River will be around 25% by the year 2016.

The modified draft puts the onus of responsibility on Cal-Am, it’s users (us) and local leadership to bring a new water supply online - ideally prior to 2014 when the annual reductions double. The California Public Utilities Commission is set to make a determination sometime early next year as to what project they deem to be most appropriate for the region. At this point, the Regional Project seems to make the most sense, both fiscally and environmentally with the least amount of potential legal challenges associated with it.

Interestingly enough, the revised draft CDO acknowledges and applauds Pebble Beach Company for its use of recycled water, and then goes on to say that no exceptions should be made for the Pebble Beach Company, nor should they (this being property owners in PB) be exempt from MPWMD conservation requirements. Essentially, the CDO is underscoring the state Board’s desire to see a moratorium on any new water connection (or change of use resulting in a water demand increase) prior to a new water supply coming online.

In Summary:

Should the SWRCB adopt the draft revised CDO in October, the amount of water Cal-Am can pull from the Carmel River will be reduced by 5% - starting sometime in October or November 2009 (cumulatively increasing to 25% by 2016). The Monterey Peninsula Water Management District (MPWMD) will then most likely set their water rationing level to stage 5, resulting in a moratorium on all new connections along with additional mandatory water conservation measures. Per the MPWMD, there will be a window of approximately 60-90 days before the new conservation requirements will be in place. The timing of all of this is not exact. Should litigation follow ratification of the CDO, a delay in any type of MPWMD water rationing/moratorium plan is almost certain, pending a court decision…this could be decided in weeks, months or years. We will need to modify the County Disclosure based on the outcome of October’s SWRCB meeting - should the CDO be adopted. Proper communication with clients is imperative, and we will continue to disseminate information as it becomes available.

While the number of closed sales (361) is down from previous months this year, it is an increase from the August 2008 figure of 320. Inventory is down substantially from this time last year; 1548 single family residential units compared to more than 2700 in August of 2008, a 42 percent decrease. Fewer available units on the market combined with the decrease in new listings coming available, produce an environment conducive to housing value appreciation which is what we are experiencing in various micro markets throughout Monterey County.

Median sale price [on average] went from $335,000 in August 2008 to $428,540 in August 2009 (based on average median price of all cities within Monterey County), an increase of nearly 28 percent. Average days on the market (county-wide) is hovering below 100, good news for homeowners listing their property for sale - especially considering the increases in median sale price throughout the county.

The data suggests a recovery in various aspects of the local housing economy. While it’s impossible to determine exactly where the market is going, dissemination of information on where we’ve been is critical for the informed buyer. Contact a local REALTOR® today to find out more on current housing opportunities you may be able to take advantage of.

(Data courtesy of MLSListings, Inc.)

Supervisor Dave Potter was the first to comment after Cal-Am’s legal team challenged the validity and authority of the Board to impose the order. The Supervisor requested more time be allowed before issuance of the CDO, given the unique circumstances of our area and the timeline of upcoming water projects suited to address the needs of our communities.

The health and safety concerns relating to any additional cutbacks were the common theme amongst most of those who opposed ratification of the order. The California Public Utilities Commission (CPUC) representative requested that more time be granted in light of the water projects currently being evaluated by their board and echoed the potential health and safety challenges associated with the water cutbacks.

Upon conclusion of comments, the Board deliberated briefly on appropriate legal procedures and offered little insight as to the direction they would be taking. Nothing was shared with the attending audience that would indicate a specific course, though Board Member Tam D. Doduc did reveal a desire to see the Order adopted as drafted, at a bare minimum (indicating a desire to see stronger language incorporated within the order). Ms. Doduc was the only Member who spoke to that effect.

The Draft CDO will now go back to the Board for review and potential modification. We were told yesterday that a revised CDO should be out within the next couple of weeks and that a two week comment period would then follow, setting up an October Board meeting in which final consideration would be given.

We will update the membership upon review of the revised CDO as soon as it’s released to the public - sometime within the next couple of weeks. Stay tuned…

As was reported in my last Water Update, the proposed CDO would require immediate reductions in the amount of water diverted from the Carmel River. The CDO would require a reduction of 670 Acre Feet Annually (AFA) (~5%) beginning on October 1, 2009 which would gradually escalate to around 21% by 2015. To borrow the CA Public Utility Commission’s (CPUC) analogy; “each acre foot of water in the Monterey region serves about four households for one year. A 21% annual reduction, with no replacement water, would be equivalent to no water for about 6500 families”. To reiterate our documented position and that of other local stakeholders: the proposed CDO simply is not realistic, feasible, equitable or reasonable on any level.

A piece of good news was reported last week in the Herald regarding the CA Public Utilities Commission request that the SWRCB apply some level of common sense in respect to the proposed CDO. The very fact that the PUC would submit a letter urging consideration for more time to be given demonstrates not only the magnitude of the situation but offers a sense of hope that a California regulatory entity would actually understand and defend taxpayers who are being held responsible for the states punitive charge against Cal-Am.

Current water use on the Monterey Peninsula averages 70 gallons per capita per day, (GPCD) the lowest in the entire state. The statewide average is in the ball park of 192 GPCD. If the proposed CDO were ratified as it is drafted today, the Monterey Region would be reduced to the lowest levels actually experienced in the industrialized world {CPUC Comment Letter}.

This issue represents much more than just another restrictive policy or burden to business. It exemplifies an evolving and ongoing struggle for fairness or merit on harmful exactions impacting economic or even physical viability from a regulatory body.

I will be providing testimony on behalf of MCAR and its membership at tomorrow’s workshop in Sacramento during public comment. The workshop will be streamed online and should begin around 1:00 pm. You can access the feed by clicking here. I have also included the link to MCAR’s comment letter which can be accessed by clicking here.

Upon conclusion of tomorrow’s workshop, we should have a much stronger understanding of how this issue could evolve in regards to mandatory reductions. I will provide an update on Thursday of this week to summarize the day’s events and let you know what is (or could be) in store for all of us.

]]> http://mcarforum.com/2009/09/water-update-part-2/feed/ http://mcarforum.com/2009/08/water-update-part-1/ http://mcarforum.com/2009/08/water-update-part-1/#comments Sat, 29 Aug 2009 22:25:24 +0000 kevin http://mcarforum.com/?p=190 It was feared (and anticipated) by many that Monterey Peninsula residents and business owners would be facing 50 percent cutbacks in available water pumped from the Carmel River through the State Water Resources Control Board (SWRCB) Cease and Desist Order decision. Fortunately, (at least at this point) State Water Board staff has backed off of the original recommendation and has suggested the Board consider imposing smaller cutbacks, starting in the range of 5 percent and cumulatively increasing through a phased-in process over the coarse of many years.

The proposed order will be considered by the State Water Resources Control Board on September 2, 2009 and will most likely be adopted before October 1, 2009. There is still much confusion relating to the limits of water made available to many Monterey Peninsula communities, and the timeline associated with water commitments for new service connections.

One point is made very clear throughout the proposed order; Cal Am is violating state water law and must be put in a position to appropriately comply with the order. The true impacts of this order are yet to be fully understood by Monterey Peninsula residents, businesses and elected leadership, and the future of “committed water” to projects in the pipeline is very much in question.

Now, probably more than ever, the need for a new water supply in this region will be realized. Conservation, cutbacks and restrictions on available water may satisfy a legal order, but at what cost? The potential economic impacts are daunting to say the least.

While the news isn’t good, it certainly isn’t as bad as it could be. A publicly owned Regional Water Project coming online prior to mandatory reductions would have been ideal, but at this point, unrealistic. Fortunately, regional water solution efforts continue with a sense of urgency understood by the public, elected officials and the agency in charge of oversight, the California Public Utilities Commission.

We will continue to monitor this issue closely and will update the membership on specific impacts to water availability and entitlement post SWRCB decision on September 2nd. Stay tuned.

First-time homebuyers—those who have not owned a home for at least three years—may be eligible for the

$8,000 federal tax credit, but the window of opportunity is closing rapidly. To qualify for the credit, the buyer

must close escrow by midnight on Nov. 30, when the tax credit expires. Buyers hoping to take advantage of

this benefit are advised to start house-hunting early, as the buying and lending processes takes time.

KEEP THIS IN MIND

• Finding the right house can take some time, so REALTORS® recommend home buyers start

looking for a home as soon as they are able and ready to purchase. Buyers also should build in

extra time to accommodate the lending process, which is taking approximately two weeks longer to

process this year compared with last year.

• The tax credit is equal to 10 percent of the purchase price, up to $8,000, subject to income limits.

Single taxpayers are eligible if their modified adjusted gross income is $75,000 or less, while

married taxpayers filing jointly must have a modified adjusted gross income of $150,000 or less.

• Only primary residences are eligible for the federal tax credit, including new or existing single-family

homes, townhouses, condominiums, manufactured homes, custom homes, and houseboats.

Vacation homes and investment properties do not qualify.

• Purchases must be arm’s-length transactions, meaning the seller cannot be the buyer’s parent,

grandparent, child, grandchild or spouse.

• Married people filing as such cannot claim the credit if either spouse has owned a primary

residence within the last three years. However, unmarried joint purchasers may allocate the credit

in any way they see fit, as long as it does not exceed the $8,000 maximum.

• The government will allow those who finance their purchases with a federally insured loan to apply

their anticipated credit immediately toward closing costs or as additional down payment, rather than

waiting until they file their 2009 taxes to receive the refund.

Contact a local REALTOR® today for more information on the first time homebuyers tax credit and other housing opportunities that might be available to you.

The proposed order will be considered by the State Water Resources Control Board on September 2, 2009 and will most likely be adopted before October 1, 2009. There is still much confusion relating to the limits of water made available to many Monterey Peninsula communities, and the timeline associated with water commitments for new service connections.

One point is made very clear throughout the proposed order; Cal Am is violating state water law and must be put in a position to appropriately comply with the order. The true impacts of this order are yet to be fully understood by Monterey Peninsula residents, businesses and elected leadership, and the future of “committed water” to projects in the pipeline is very much in question.

Now, probably more than ever, the need for a new water supply in this region will be realized. Conservation, cutbacks and restrictions on available water may satisfy a legal order, but at what cost? The potential economic impacts are daunting to say the least.

While the news isn’t good, it certainly isn’t as bad as it could be. A publicly owned Regional Water Project coming online prior to mandatory reductions would have been ideal, but at this point, unrealistic. Fortunately, regional water solution efforts continue with a sense of urgency understood by the public, elected officials and the agency in charge of oversight, the California Public Utilities Commission.

We will continue to monitor this issue closely and will update the membership on specific impacts to water availability and entitlement post SWRCB decision on September 2nd. Stay tuned.

Leslie Appleton-Young is Vice President and Chief Economist for the California Association of REALTORS® (C.A.R.), a statewide trade organization with almost 175,000 members dedicated to the advancement of professionalism in real estate.

Mrs. Appleton-Young directs the activities of the Association’s Member Information Group.  She oversees the analysis of housing market and brokerage industry trends, member communications, and membership development activities.  She is also closely involved in the Association’s strategic planning efforts and is a well-known speaker in California’s real estate community.

Before joining C.A.R. in 1984, Leslie Appleton-Young was a consultant with Telesis Inc. in Rhode Island.  She also spent several years working as a research associate at the Federal Reserve Bank of Philadelphia and as an instructor at the University of Pennsylvania.

Mrs. Appleton-Young earned a Bachelor of Arts degree in economics from the University of California, Berkeley, and her Masters from the University of Pennsylvania.