Watermaster Transcript August 2, 2017

Beaumont Basin Watermaster Meeting August 2, 2017: http://documents.yvwd.dst.ca.u...

4:00 Item B. Consideration of Resolution No. 2017-02 Approving the Transfer of

Overlying Water Rights to Specific Parcels - Oak Valley Partners.

Joe Zoba: I did prep this Item based on Correspondence sent to me by Mr. Fraser. I think it may be appropriate for me to pass it off to my legal counsel to provide an overview of this Item as well as an update on the Resolution.

Counsel Keith McCullough As I understand it, Oak Valley Partners requested that the Overlying Water assigned to it in the Judgement of 2004 be designated to particular parcels making up the Summerwind Specific Plan Parcels. So approximately 5,300 acres originally, identified in the Judgement and those would then be transferred to particular APNs within the Summerwind Project totaling approximately 2,400 acres, roughly.

5:00 Counsel McCullough: As I went through those APNs yesterday afternoon in the Judgement Designations. Of the original Overlying Designations was approximately 1,800 acre feet based upon a Safe Yield that was present in the 2004 Judgement. As you know we’ve had a redetermined Safe Yield that’s somewhat less than what’s in the 2004 Judgement. There is in your packets an Allocation of the Overlying Rights; it’s pro-rated to that new Safe Yield designating Oak Valley Partners at approximately 1,400 acre/feet, roughly. As I understand it; it’s the Proposal to designate Water Rights Overlying those original parcels to particular APNs contained within the Summerwind Project. The corollary is that once water service has been committed to those Parcels then the Overlying Rights would transfer to the Yucaipa Valley Water District, which is contemplated by the Judgement.

6:00 Counsel McCullough: So it seems that the Proposal is in accord with the Judgement. The transfer of water rights subsequently once water service is provided to those parcels is consistent with the Judgement. My only remaining question is; are the APNs designated within the Basin, the designated geographical boundaries of the Basin? I’ve not done that analysis and I’m not sure that’s I’m competent to do that analysis because I’m not a surveyor or ..ha ha I play surveyor once in a while, but in this instance I have no done that finite identification. Whether the APNs designated for Summerwind are fully within the Beaumont Basin Geographic Boundaries. That’s one thing remaining. Just as a comment; there was a Resolution purposed in the Public Packet. I did a red-line of that yesterday afternoon to be consistent with my comments just made now, so I’m happy to answer any questions based on what I’ve done thus far?

7:00 Board Member: I suggest that if there are any discrepancies in the APNs provided our Engineer would be able to identify those Parcels and certainly say if a Parcel exists that’s outside of the Watermaster boundary it would not apply.

Board: What’s the accounting mechanics of when water is provided to those parcels; what’s the accounting part happen, or does Watermaster’s involved in knowing these water rights have now been transferred to Yucaipa?

Counsel McCullough: The methodology I suggest is that when there’s a polygone that’s assigned a certain amount of overlying rights they transition into a program of cumulative rights that every year is part of the annual report.

8:00 Counsel McCullough: The Appropriator, whoever it may be, would tabulate the water consumption on those parcels that would be afforded to it under this type of action. And that becomes part of the annual report. A subset of an overlyer that transitions over that’s an annual update that’s on the report of the appropriator to show that it was within and not exceeding that amount or they have to make up water. I suggest that continues on. Another important point is the redetermination of Safe Yield. Have we redetermined the Safe Yield if Safe Yield has dropped. That will take place every ten years, theoretically, and that may go up and down as well. I do think there’s a lot of sub-accounting, but we’ll get to that level on a sub-polygon type of basis of it.

9:00 Board: I heard legal Counsel talk about the new Safe Yield number, but I didn’t see it in the Resolution. What I see is the 1806. but I don’t see the other number in there, so what number are we using?

Correct me if I’m wrong Keith, in the revised Resolution we should leave the number as completely taken out and we just referred to the Safe Yield, is that correct?

McCullough: That’s right, I didn’t state the current designated revised Safe Yield amount. Based upon Mr. Zoba’s comments, we expect over time that this may fluctuate to those designating Overlying Rights, which would then become Appropriator Rights.

But aren’t we asking for a blanket transition right now of all of the Overlying Rights and if we are we need to know what that number is? We’re asking for a transfer of the Overlying Rights from one Overlyer to a Successor, so how is that going to change in the future if the Safe Yield changes, is that going to change also?

10:00: I would suggest that to be consistent with the Adjudication of the Judgement that the entire quantity of Overlying Rights, even though we’ve redetermined the Safe Yield; the quantity that’s referenced in the Judgement continues forward. The Amendment then shows up immediately as not only this transaction and is part of the memorandum, but also future annual reports saying that while the original number was transferred the redetermination of Basin Safe Yield in 2015 has reduced it to 1,500 and therefore that quantity is proportionally spread to those parcels.

And then the transfer from the Development to your Agency, is that going to take on a parcel by parcel basis rather than all at once?

I think it will be more of a polygon so they’ll be a planning area for the development purposes. So it would be a subset of the total as a planning area where you would have a developer come in and actually develop out a portion of that development.

11:00 So there would be foreseen that there would be one transaction between an overlyer and an appropriator that may result in several transactions depending on how that development is to proceed. Our concept is that before we approve entering into a developers’ agreement that transactions has in fact taken place and we communicate that back to the water master.

Tony Lara: Okay. Just looking over past Resolutions where these transfers took place there was an allocation of overlying rights per parcel. There was a number there and I don’t see that also, so I’m just trying to understand it. Unless there’s some other comments; I move to defer this to the Next Watermaster Meeting so I can get a better understanding of it and be clear on it. And also the map; I’d like to see that map be more clearly defined because it does appear that some of those parcels are outside those boundaries. I would make a motion to defer it until the next meeting so we can get a better understanding on our end.

Hannabel; have you ran through the exercise of checking to see if the parcels are in the geographical boundaries of the Basin? I’d assume that if we were to defer it, that would give you enough time prior to the next meeting to go through that exercise?

We do also have the Applicant in the audience as well.

At this time we open it up to public comments for those in the audience that would like to comment on this matter.

12:30 John Ohanian from Oak Valley Partners 10410 Roberts Road in Calimesa. We have been working on this, it’s what the Adjudication contemplated that when the large land owners develop their property they would exchange their overlyers’ rights to their Appropriators for certain surface.

13:00 Ohanan: We’re in a place where we’re ready to finally get moving in Calimesa on residential that has been delayed for, well I bought the property in 1986, so I’ve been trying to build ‘a house’ in Calimesa since 1986. This will be the first Project that finally gets underway. Another delay on this will put us into October before we can get a response from you guys and puts us in a difficult position contracts that we have from builders to be able to develop the property. They need to know that they have water available. They need to know that what we have told them about the Adjudication and how it operates is what the real world is. Although I understand Tony’s position of being brought in here a couple days ago and having to try to assimilate all of this, it’s certainly not an easy thing. But it is consistent with what precepts of the Adjudication were and it’s important to us to try to get this moving forward. We would appreciate a decision today if possible so that we can finalize the contacts with the builders and get this project started finally. I think it’s really important to the City of Calimesa as well.

14:00 Can you speak to the current status of your projects?

Ohanan: The Summerwind Ranch is an Approved Specific Plan. It was Approved in 2005 as an Adjudicated EIR. There’s an Adjudicated EIR and there’s an Approved tentative Tract Map for all of the residential components of the Project. There are 633 ‘blue-top’ lots that are the subject of a first development component that’s going to take place. There’s an additional 260 acres that are commercial. There’s a shopping center on a piece of Cherry Valley Boulevard and I-10 that is getting ready to being plans into the City for Plot Plan Approval.

15:00 Ohanan: That is a legally created parcel, different parcels for commercial development. But certainly the shopping center is going to be the first thing that goes in and then there’s an additional commercial development on the opposite corner, on the west corner of Cherry Valley Blvd and I-10 that’s doing plot plans currently. That’s the current status of the project. There’s a development agreement with the city of Calimesa that’s being revised for the residential component. We have a Lift Station we have to put in provide service, but there’s a lot of Infrastructure already in the ground; jack and bore under the freeway, [something] for water and sewer already accomplished. The new tank has been built that services this area. The Zone 12 Tank was built by the Yucaipa Valley Water District so that we can provide pressure and service to the area, so that’s all done. Most of the piping is in place, I think there’s probably a small breach of pipe that’s not completed. That is part of what we’re doing in the ongoing months we’d like to deliver to our builders.

16:25 Mike Turner, I represent the Developer Summerwind Ranch Residential portion, San Gorgonio land. I echo all john’s comments and further state that we are in contracts right now with builders for the 633 lots, okay, which hasn’t happened in a long time. The 633 lots, the infrastructure was constructed prior to the Recession. All the grey lots were completed, if you’ve seen the Summerwind Ranch Project.

17:00 Turner: There’s six planning areas. All the water, sewer, all the facilities are in the ground, below the ground. The only thing left for that first phase is paving and landscaping. You can even see the walls are up. We signed a MOI with the builder, they’re doing their diligence, but they’ve got substantial money down on the project, which is non-refundable. We anticipate that within 60 to 90 days that we would have finalized contracts for all 633 units to the homebuilders to build the lots. We are currently out under contracts finishing the Infrastructure on the projects, which is regrading the lots to certify the lots, and grazing down getting ready to do the paving.

18:00 Taylor: There’s a couple questions in here that talk about the Safe Yield in the Basin at 1,806. That was the initial Adjudication, okay, and then your latest study talks about 1,400 - 1,390, whatever it is. There is language if you read in the Resolution that says it’s 1,806, but as amended and further refined if you read the Resolution, so it is included. The 2nd thing is on Exhibit 1 that’s part of the Resolution and the red-line in there is the Adjudicated Boundary.

19:00 Taylor: John and myself, we had our Engineer Overlay the CAD information from the Adjudication the boundary of the Basin. He has that all overlaid in there so you’ll notice on that Exhibit 1 when you look at the westerly part that’s not in the Basin; it’s very small, okay, minimal. We have 3,700, almost 3,700 lots that are allowed in this development through a 20 year period. The part that’s outside the Basin is minuscule. In fact that was the area where Joe was going to put his Packaged Treatment Plant. We were going to do a package treatment plant before he did his expansion of his plant up there. Right now that’s identified in the SP as a Treatment Plant Specific Plan. As a Treatment Plant, which .. What I’m getting at is that it’s a minimal amount of lots - it may be 50 or 100 lots when we finally get there out of the 3,700. I ask for your consideration and Approval of this Item.

20:00 Taylor: As far as the parcels, our Engineer went through all parcels. They’re different because as you know the Assessor’s parcels change all the time. All the old AP is actually under the original Adjudication boundary. Then the new AP with all the transfers of land that have occurred and ownership, they’ve taken that into account and prepared this Exhibit. That has a bunch of numbers on it to show exactly what’s in the Basin and what’s out of the Basin. You’ll find that when someone looks as a surveyor they’ll agree with these guys or feel free to meet with them.

21:00 Dan Jaggers, Director of Engineering BCVWD: Regarding the transfer of water rights in the Adjudication, I’m not going to comment on that necessarily. On a quick review of Exhibit 1 the Adjudicated Boundary does not seem to wholly encompass the defined Summerwind Specific Plan. It shows that there’s lots outside.

22:00 Jaggers: Those should be excluded from the Exhibit as an opportunity for transfer from the way I understand the Adjudication. Secondly, one of the concerns from our District, from my perspective, is the lack of Resolution of assignment of water rights. The Resolution in its current form provides an opportunity for those to be assigned moving down the road. I think the historic resolutions passed by the Watermaster have included, as Tony Lara indicated, a parcel, an amount of water. I would suggest that this be further refined to do that. We know what the development is out there, we know what the parcel layout is.

23:00 Jaggers: Just because we’ve been working on it since 1986 does not mean we should not do this piece correctly to refine how the water’s provided to each parcel so then everybody can understand it and plan their water needs moving into the future. I think the lack of Resolution will hinder us from accurately understanding in how our reduction in our Overlyer Appropriation might change over time and we can better monitor that knowing that this piece could disappear by watching the development.

Dave: I notice about seven of them being outside of the Beaumont Basin. I agree with cleaning up the APNs and the map to get them all matched, so I agree with Tony on pushing this thing back for a month or so to have them clean it all up and bring it back to us.

Motion to Defer the Item until next month BCVWD and a 2nd South Mesa, is there any other comments on this Item.

Kyle Warsinski: Yea, I have a couple of comments. The way I understand the Exhibit it simply shows the entire Summerwind Ranch Development, the entirety of all the APNs, and it Overlays the Beaumont Basin Boundary on top of that. I don’t believe the Exhibit was intended to simply show the parcels that are contained within the Resolution provided today. The Resolution actually identifies the different APN numbers that are included within the transfer of the Overlyer Rights, not the Exhibit. The Exhibit was just a simple map that showed the entirety of the project.

25:00 Warsinski: It also was done intently to identify the parcels that were contained in Summerwind Ranch that are not contained within this Resolution. So you can look at it two ways; you can say the Exhibit should be solely focused on what’s in the Resolution, but then we’d all be asking ‘okay, then what parcels are part of the project that aren’t on this Exhibit’, ya know what I mean? So it could go both ways, it’s either ballistic or it’s defined. We can argue pros and cons to each of those different areas. I’m comfortable with the Resolution as it’s presented. I’m comfortable with ‘Pro-Active’ doing their job to identify the APNs that are within the project that are within the Basin Boundary. And when it comes down to subdividing these APNs into actual numbered or lettered lots for development, I think that’s really where it’s going to happen.

26:00 Warsinski: As Joe talked about in terms of the planning areas; one of those subdivisions are actually going to be built, they’re going to show up at Yucaipa’s door and say ‘I have these Overlyers Rights that were assigned by Watermaster to this parcel, we need a Will-Serve Letter for 50, 60, whatever amount of lots. And it’s going to be Joe’s duty to review that request and make sure those Overlyer Rights are appropriate for that development on those parcels and issue a Will-Serve Letter if he wants to and if they can. I would be in favor of approving it as it sits today.

27:00 Warsinski: If Joe’s not comfortable, since his Agency is going to be the one that will ultimately reviews the request of the development, issues the will-serve letters, and retains the Overlyer Right at the Appropriator level. If he has concerns with how the Resolution’s done I’ll defer to him, but from the initial discussion it sounds like Yucaipa Valley is comfortable with this scenario and how the methodology has been put into place as well as how it’s going to be implemented now and into the future, but if he has reservations I’ll defer to him.

A couple points we should keep in mind is that when the Watermaster Approved a prior Overlying Water Rights Transfer where an Overlyer or property owner desires to move their puzzle pieces within their property.

28:00 I think that’s entirely within the Overlyers’ rights. As we’re administering the Adjudication on behalf of the Court that we don’t necessarily interfere with how an Overlying property owner and their specific rights are actually moved from one parcel to the other. I think when we did this back in 2006 what was approved by this Watermaster, Resolution 2006-4 and others, one thing we didn’t foresee at that time is that we did get really specific on the quantity of water that was assigned to a parcel. What we omitted is the fact that there was going to be a redetermination of Safe Yield. So now we have a bit of a conflict in those prior overlying designations where we said 20 acre feet go to this parcel here and it’s not silent as to what happens in the redetermination. So when SunnyCal transferred 20 acre feet to a parcel and retained the rest. If we’re going to administer the redetermination of Safe Yield; does that 20 acre feet get reduced by the same amount, or does that 20 acre feet solid and the balance gets reduced?

That’s an issue we probably should take on sooner rather than later. I think that comment and that concept has been addressed in this proposed Resolution 2017-02 where we identify the quantity that’s in the Adjudication with the understanding that there’s a constant annual review and update of what that redetermination of Safe Yield is and how it applies to any parcels that it’s subsequently assigned to. I think the Resolution’s good in terms of the amount and I think it works procedurally, giving us change to monitor and track that quantity year over year.

With respect to the boundary issue; I think one thing we’ve come across in a number of different actions by the Watermaster is that we do have boundary issues. The boundary issue is not perfect, it doesn’t follow parcels, we split the Morongo Tribe’s boundary and we’ve had to wrestle with that in terms of storage accounts. There’s portions of BCV service area that extends out and beyond.

One of the things that always comes back when we have this boundary issue discussion is that the Watermaster rules don’t apply outside of the boundary. So why would we take the water rights that are designated in the Adjudication, while we have the right to use it in other places, we can also have the right to drill a well right outside of that boundary and not be subject to the Watermaster and provide water that we can import from San Timoteo Basin into the Watermaster. So there’s a whole other mechanism that affords itself to give me comfort to say that there’s a boundary that’s outside of the boundary of the Watermaster, I’m not so sure it’s pertinent for an Overlyers’ Rights, but obviously the overlying right doesn’t apply there because overlying designation was never made. Now it’s a question of the Appropriator; is it right to use overlying appropriative right outside of the Basin?

31:00 What gives me security in that is why would you? It’s a lot easier to drill a well and take care of that in some other way.

Zoba: I appreciate the comments. Tony, it’s good to have you back on the Committee. From Yucaipa’s perspective we are comfortable with the provisions of Resolutions 2017-02. Again I just want to emphasize that I really do appreciate the comments and insight as well.

Thank you Joe. This is the first time the Board has seen this Resolution. Keith provided us with soem red-line that we just received. In my opinion I think there is a little bit of room for improving the Resolution and it might give you, Keith, a little bit more time to review that, might give Hannibal some time to review the physical boundaries to make sure we’re not missing anything. I do appreciate the time sensitively of this Item and how it effects the development project, but I think it is worth taking another look at this.

So with that; again, we have a Motion to Defer this Item with a 2nd. If there are no additional comments we’ll go ahead and vote.

Motion Passes 3/2

32:00 Counsel McCullough : Just for clarification; the fundamental principal for designating these water rights originally identified in the 2004 Adjudication two particular parcels is consistent with the Judgement. I want everyone to understand that. Secondly; the other principal is that the Judgment contemplates that the Safe Yield may fluctuate with a redetermination and therefore even though particular amounts were designated to particular overlying parties in the original; those would fluctuate with the safe yield designation. So we would see that even though Oak Valley Partners had 1,806 originally identified, we would expect that it would fluctuate somewhat with the redetermination of the safe yield. That would hold true with all over overlyers as well.

33:00 Counsel McCullough: The question before was in reference to SunnyCal Egg, we would expect their numbers likewise not to stay solid, but rather to fluctuate as the Safe Yield is redetermined.

Would those Resolutions be replaced with new Resolutions stating the new number?

Counsel McCullough: I guess that’s a question; does Watermaster want to go back to those prior Resolutions where particular amounts of water were designated to particular parcels.

Would those Resolutions be rescinded and replaced by another Resolution?

Counsel McCullough: I guess that’s a question to me as a matter of legal order. And I’ll take that on and look at it.

Ohanan: For clarification: the Motion that I heard was to Defer for one month and have a decision about this, but you don’t mean to get..?

34:00 Yea, you’re absolutely right, this is Deferred to the next meeting.

Ohanan: Can we ask that you have a Special Meeting in September to consider this? Every month that you delay us puts us in a position of not being able to finalize these contracts with builders and not be able to not be able to deliver and it’s a fluid market, I don’t want to lose people that are willing to buy, so would you consider that?

Taylor: The purpose of Exhibit 1 is to identify the Summerwind Ranch Parcels, okay? And because we put the boundary of the Basin in and we put it in there for a purpose; just to show what’s in the boundary and what’s outside of the boundary - that’s why we did it, okay? I think people are misreading the intent of Exhibit 1.

Taylor: Exhibit 1 is whatever is on the Basin boundary side is obviously included in the area that you serve if it’s outside. To me and my Engineer, that’s why we did it that way. Otherwise you wouldn’t know the SP boundaries for Summerwind Ranch, okay? So I’d ask you to Approve it with a caveat to amend the Resolution however you wish. I think you can simply add the words that these parcels supply the Summerwind Ranch Specific Plan as shown and are included in the Beaumont Basin Boundary, okay, period. If you approved it with that; that’s what you’re going to come back with anyway.

How does the Board feel about a Special Meeting to review this Item next month?

I would not be opposed to keep the discussion going.

Special Meeting August 30, 2017 at 11:00 am.