AB 565 Page 1 Date of Hearing: April 4, 2011 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Wesley Chesbro, Chair AB 565 (Monning) – As Introduced: February 16, 2011 SUBJECT: Conservation: State Coastal Conservancy SUMMARY: Authorizes the State Coastal Conservancy (Conservancy) to award a grant to a for-profit entity to accomplish removal or alteration of a dam. EXISTING LAW: Authorizes the Conservancy to undertake or award grants for projects related to coastal watershed and coastal and marine habitat water quality, sediment management, and living marine resources protection and restoration. THIS BILL: Authorizes the Conservancy to award a grant to a for-profit entity to accomplish removal or alteration of a dam if the Conservancy finds that the project is of regional or statewide significance and that a grant to a public agency or nonprofit organization would not achieve removal or alteration of the dam. FISCAL EFFECT: Unknown COMMENTS: 1) San Clemente Dam Problem. According to documents on the Conservancy's website, the San Clemente Dam is a 90 year old, 106-foot high concrete dam located approximately 18.5 miles from the Pacific Ocean on the Carmel River. California American Water (CAW), a for-profit company, owns and operates the dam. Currently, the reservoir is over 90 percent filled with sediment and is no longer useful for supplying water to the Monterey Peninsula's population. In the early 1990s, the Division of the Safety of Dams in the Department of Water Resources issued a safety order determining that the San Clemente Dam structure could potentially fail in the event of either the maximum credible earthquake or probable maximum flood. The public safety risk posed by the dam currently threatens 1,500 homes and other buildings. If the dam were to fail, 2.1 million cubic yards of sediment and over 40 million gallons of water would rush downstream, giving residents little time to evacuate. According to the Planning and Conservation League, the San Clemente Dam is also a barrier to threatened steelhead trout, which have significant natural spawning habitat and natural rearing habitat located above the dam. A steep 85-foot fish ladder prevents many of the fish from accessing these critical upstream areas and steelhead numbers have suffered as a result. 2) River Reroute and Dam Removal Project. CAW's least costly option to address the safety issues with the San Clemente Dam is to buttress the dam—a cost of approximately $49 million. A draft Environmental Impact Report highlighted four alternatives to buttressing, including the rerouting of the Carmel River and removal of the dam. This alternative would provide a solution to the dam safety issues while also benefiting the environment by, for example, providing unimpaired access for steelhead trout to over 25 miles of spawning and AB 565 Page 2 rearing habitat. The Conservancy, CAW, and the National Marine Fisheries Service (NMFS) have outlined key elements of the implementation strategy for the river reroute and dam removal project. Under this strategy, the Conservancy and CAW would manage project planning and design; the Conservancy, with assistance of NMFS, would coordinate with the regulatory agencies to secure all permits and expeditious approval of the project; CAW would manage the project construction; and upon completion of the project, CAW would transfer the project area lands, approximately 928 acres, to a public entity or non-profit organization for watershed conservation and compatible public access. The total project cost is currently estimated at $83 million, which factors in a 25% contingency and other costs. The implementation agreement would have CAW pay $49 million, which is the amount equivalent of buttressing the dam. The Conservancy, with assistance from NMFS, is working to secure the additional $34 million from federal, state, and private foundation sources. 3) Grant Authority. The Conservancy has the authority under existing law to make grants to public agencies and nonprofit organizations for projects that restore and protect fish and wildlife habitat within coastal watersheds. A grant for the rerouting of the Carmel River and removal of the San Clemente Dam would be an ideal project for the Conservancy's grant program because of the significance it would have on the protection and restoration of steelhead trout habitat. However, since existing law only authorizes the Conservancy to make grants to public agencies and nonprofit organizations, and since CAW, a for-profit corporation, will be managing the construction of the project, the Conservancy cannot award grant funds to CAW. Without a Conservancy grant, the project would likely not happen-- the dam would remain in place, the steelhead trout protection and restoration project plans would not be implemented, and the public would not receive the 928 acres of project land for conservation and public access. The bill authorizes the Conservancy to award a grant to a for-profit entity to accomplish removal or alteration of a dam. With this authorization, the Conservancy can grant funds to CAW and ultimately improve the coastal watershed in the Monterey region 4) Suggested Amendments. The bill's legislative intent is to allow the Conservancy to grant money to CAW for the San Clemente Dam project. The bill, however, is not specific to the San Clemente project—it will allow grants to any project that removes or alters a dam in the coastal zone or coastal watershed. The author and committee may wish to consider amending the bill so it specifically applies to the San Clemente Dam project. AB 565 Page 3 REGISTERED SUPPORT / OPPOSITION: Support Carmel River Watershed Conservancy Monterey County Board of Supervisors Planning and Conservation League Opposition None on file Analysis Prepared by: Mario DeBernardo / NAT. RES. / (916) 319-2092