Loading...
12-06-01SOUTH TAHOE PUBLIC UTILITY DISTRICT "Basic Services for a Complex World" Duane Wallace, President BOARD MEMBER James R. Jones, Vice President REGULAR MEETING OF THE BOARD OF DIRECTORS SOUTH TAHOE PUBLIC UTILITY DISTRICT DECEMBER 6, 2001 MINUTES The Board of Directors of the South Tahoe Public Utility District met in a regular session, December 6, 2001, 2:00 P.M., City Council Chambers, 1900 Lake Tahoe Boulevard, South Lake Tahoe, California. BOARD OF DIRECTORS: President Wallace, Directors Schafer, Jones, Strohm, Mosbacher ROLL CALL STAFF: Baer, Sharp, McFarlane, Coyner, Bird, Henderson, Brown, Tomey, Hussmann, Donovan, Hoggatt, Cailian, R. Johnson, Thiel, Cocking, Hydrick, Garcia, S. Gray, Swain, Attorney Kvistad GUESTS: Matt Setty/Kennedy Jenks, David Robertson and Kirk Johnson/Robertson & Benevento, Judy Brown/CSLT Liaison, Lynn Nolan/Grant Coordinator, Cathie Becker, Shirley Taylor, Joyce Blackstone, Diane Noble The presentation by Grant Thornton was rescheduled to be heard at the January 17 Regular Board Meeting. CORRECTIONS TO THE AGENDA OR CONSENT CALENDAR REGULAR BOARD MEETING MINUTES - DECEMBER 6, 2001 PAGE - 2 Moved Mosbacher / Second Strohm / Passed Unanimously.. CONSENT CALENDAR Io approve the Consent Calendar as submitted: a. Authorized implementation of the two-week disconnection procedures for delinquent sewer and/or water accounts; Tallac Pump Station Force Main Repair - (1) Approved Project Closeout Agreement and Release of Claims for ARB, Inc.; and (2) Authorized staff to file a Notice of Completion with the El Dorado County Clerk; c. Approved Regular Board Meeting Minutes: October 18, 2001; d. Approved Special Board Meeting Minutes: October 19, 2001. ITEMS FOR BOARD ACTION Robert Baer read aloud the resolution honoring Director Strohm for his eight years of service to the District. Strohm was presented with an engraving of the resolution. Moved Jones / Second Wallace / Passed Unanimously to adopt Resolution No. 2728-01. RESOLUTION NO. 2728-01: HONORING CHRISTOPHER H. STROHM FOR EIGHT YEARS OF OUTSTANDING SERVICE TO THE SOUTH TAHOE PUBLIC UTILITY DISTRICT Director Strohm read a farewell statement to the Board and staff. Moved Strohm / Second Mosbacher I Passed Unanimously to: (1) Approve renewal of Aggregate Stop Loss Insurance with Canada Life Insurance Company, with Specific Insurance deductible of $60,000; and (2) Approved 2002 Plan year funding at $690 per employee per month. Moved Strohm / Second Mosbacher / Passed Unanimously to approve the 2002 COBRA rates at $511.22 for single medical, $876.72 for family medical, $49.97 for single dental, and $110.38 for family dental. Moved Jones / Second Strohm / Passed Unanimously to approve payment in the amount of $2,563,826.84. Rhonda McFarlane reported the District's grant work is presently being done in-house by Kay Taylor, who will retire in January. Staff recommended hiring a local EMPLOYEE SELF-INSURED BENEFIT PLAN RENEWAL FOR 2002 2002 COBRA RATES FOR SELF- INSURED EMPLOYEE BENEFIT PLAN PAYMENT OF CLAIMS GRANT COORDINATION SERVICES REGULAR BOARD MEETING MINUTES - DECEMBER 6, 2001 PAGE - 3 provider of grant coordination services, Lynn Nolan, to serve the District's grant requirements for the upcoming year. A contract would be entered into instead of hiring an employee to fill the presently budgeted position of Grant Administrator. At the end of the contract, the District can assess continuing with the contract, or consider refilling the employee position. Moved Schafer / Second Jones I Passed Unanimously to authorize the Board President to execute a contract with Lynn Nolan in the amount of $27,000 for grant coordination services through December 21,2002. PUBLIC HEARING Director Strohm disqualified himself from participation in this item due to a potential conflict of interest. A Notice of Public Hearing was published in the November 26, 2001 Legal Notices section of the Tahoe Daily Tribune. President Wallace opened the Public Hearing at 2:30 p.m. He stated the purpose of the hearing is to receive public comments and testimony, and to gather information for the Board to consider in their decision making process. Attorney Kvistad stated the Public Hearing is being held to consider acquisition of property by eminent domain. The draft Resolution of Necessity can be modified or changed depending on the comments/information re- ceived during the hearing and then must be approved, if at all, by the four remaining Board members. Staff believes that there is sufficient evidence and facts to support the requested action. The Board is required to consider the primary findings, which is that the public interest and necessity require the acquisition of this pro- perty; that the property is necessary and is planned or located in a manner that will be most compatible with the greatest public good and least private injury. Kvistad reviewed the steps leading up to the action being requested of the Board: The District made an offer for just compensation to the property owner on October 1, 2001, which was not accepted. At that same time, District staff and consultants prepared an environmental review GRANT COORDINATION SERVICES (con't.) RESOLUTION OF NECESSITY FOR ACQUISITION OF 1,442.92 ACRES OF REAL PROPERTY OWNED BY HEISE LAND & LIVESTOCK COM- PANY, INC. BY EMINENT DOMAIN FOR USE IN CONNECTION WITH RECYCLED WATER FACILITIES REGULAR BOARD MEETING MINUTES - DECEMBER 6, 2001 PAGE - 4 and a Negative Declaration which was approved by the Board on November 1, 2001. On November 16, 2001, a Notice of Intention was sent out to adopt this resolution as required by law. While negotiations to acquire the pro- petty have been unsuccessful to date, they will continue regardless of the outcome of the decision that will be made on the Resolution of Necessity. The property owners legal representative, David Robertson, is in the process of obtaining an appraisal, which may help to reach an agree- ment on the price. PUBLIC HEARING: RESOLUTION OF NECESSITY FOR REAL PROPERTY ACQUISITION (con't.) Hal Bird, District Land Application Manager, and Matt Setty, Kennedy / Jenks Consultants, gave an overhead slide presentation that covered the following: overview of District operations and history, existing conditions in Alpine County, recycled water facilities, fresh water facilities, agreements, regulatory agencies, recycled water applica- tion, Diamond Ditch, On-Farm emergency disposal site, Indian Creek Reservoir, District actions, Master Plan development, reasons for Master Planning, purpose of Master Plan, Master Planning process, goals of the Master Plan, timing and status of the Master Plan, District needs, need for land, property Evaluation Criteria, Gansberg property, Ace Hereford property, District pro- perty (Schwake), On-Farm, Heise property, evaluation of properties listed above property evaluation conclusion, Heise property features, Heise property location/ proximity, Heise property topography, Heise property soils, usability of Heise property, Heise property summary, and the conclusion - the Heise property is the only property that meets all of the District's requirements for slope, location, soils and water rights. Shirley Taylor urged the Board not to forget the ranchers who have supported the District for thirty years and referenced the letter sent by Mr. Hubert Bruns. She reported the ranchers are willing to extend their contract another twenty years. There is a lot of work to be done regarding the management and distribution of water. Taylor conveyed the ranchers hopes that the District would not charge them for the recycled water - such a charge could put them out of business. PAGE-$ REGULAR BOARD MEETING MINUTES - DECEMBER 6, 2001 David Robertson / Robertson & Benevento (attorney representine property owner: F. Heise Land and Live- stock Company, and leasees Weaver, Schnieder and. Integrated Farms, LLC, spoke to the Board regarding the history of property negotiations to date, and division of the property into the "bottom land" and the "jungle" segments. He listed several reasons why he felt the property should not be condemned and why the Board should not adopt the resolution. 4:50 - 5:25 p.m. PUBLIC HEARING: RESOLUTION OF NECESSITY FOR REAL PROPERTY ACQUISITION (con't.) MEETING BREAK Attorney Kvistad, Hal Bird, and Matt Setty responded to the issues raised by Mr. Roberson and clarified the need for the Heise property. President Wallace closed the Public Hearing at 6:05 p.m. The issues raised were discussed. It was the consensus of the Board that the acquisition and need for land for future disposal of effluent is critical. The amount of land available is quickly diminishing. After reviewing the evaluations of existing properties, Board members agreed the Heise property is best suited. Attorney Kvistad recommended the resolution be amended as follows: Page 2, after line 15, insert: "Whereas, on October 1, 2001, the District offered to purchase the property from the owner pursuant to Government Code Section 7267.2 for just com- pensation as determined by an appraisal prepared on behalf of the District.' Page 3, line 7, should reflect that the owner and lessee did file a written timely request to appear and be heard. Moved Mosbacher / Second Jones / Strohm Abstained / Passed to adopt the Resolution of Necessity for acquisition of 1,442.92 acres of real property owned by F. Heise Land & Livestock Company, Inc. by eminent domain for use in connection with recycled water facilities, including the amendments recommended by Legal Counsel. Water and Wastewater Operations Committee:. The committee met December 3. Minutes of the meeting are available upon request. BOARD MEMBER STANDING COMMITTEE REPORTS REGULAR BOARD MEETING MINUTES - DECEMBER 6~ 200t PAGE - 6 President Wallace stated newly-elected Board member, Cathie Becket, will take the place of Director Strohm on the Operations Committee, effective December 7. Plannin,q Committee: The committee met with Alpine County Ranchers on December 5. Minutes of the meeting will be available soon. The committee will meet soon regarding the procedures for delinquent accounts. Lakeside Park Ad Hoc Committee: President Wallace stated newly-elected Board member, Cathie Becket, will take the place of Director Strohm on this committee, effective December 7. President Wallace reported on his attendance at the Federal Advisory Committee meeting held December 5. TRPA wants to tie future building allocations to move- ment on the EIP projects, which is asking local jurisdic- tions to take control of things they have no control over. Director Jones reported on his attendance at the recent ACWA conference in San Diego. He has information pertaining to water quality he will pass along to staff. General Mana.qer: Robert Baer reported ex- Board Director, Robert Mason, passed away. 6:30 P.M. 6:55 P.M. BOARD MEMBER STANDING COMMITTEE REPORTS (con't.) BOARD MEMBER AD HOC COMMITTEE REPORTS BOARD MEMBER REPORTS GENERAL MANAGER / STAFF REPORTS ADJOURNMENT TO CLOSED SESSION RECONVENE TO REGULAR SESSION ACTION I REPORT ON ITEMS DISCUSSED DURING CLOSED SESSION No reportable Board action. Pursuant to Government Code Section 54956.9(a)/Conference with Legal Counsel - Existing Litigation: STPUD vs. ARCO, et. al., San Francisco County Superior Court Case No. 999128 REGULAR BOARD MEETING MINUTES - DECEMBER 6, 2001 PAGE - 7 No reportable Board action. No reportable Board action. No reportable Board action. 6:55 P.M. Pursuant to Government code Section 54956.9(c)/Conference with Legal Counsel - Anticipated Litiaation {one case) Pursuant to Government Code Section 54956.8/Conference with Real Property Negotiators - Negotiating Parties: Board of Directors, Robert BaerlGeneral Manager. Under Negotiation: Consideration of Property Purchase; Property Identification: APN 1-080-80, APN 1-080-81, APN 1-080-82, APN 1-080-56, APN 1-080-60, APN 1-200-01, APN 1-200-10, APN 1-200-11 Pursuant to Government Code Section 54956.9(a)/Conference with Legal Counsel - Existing Litigation: STPUD vs. Lakeside Park Associa- tion, et al, County of El Dorado, Superior Court Case No. SC20010165 ADJOURNMENT ~ident ,{~oXuth Tahoe P_utSlic Utility District ATTEST: ~,~ ¥~-~~/?~ ':,'~ K~thy Sl~arp(~)erk of the Board South Tahoe-Public Utility District December 6, 2001 Regular Board Meeting Transcript of 2:30 P.M. Public Hearing Action Item 7b Resolution of Necessity for Acquisition of 1,442.92 Acres of Real Property Owned by F. Heise Land & Livestock Company, Inc., by Eminent Domain for Use in Connection with Recycled Water Facilities 331 335 345 359 TAPE ONE, SIDE A [Wallace] At this time I am going to open a Public Hearing scheduled for 2:30 p.m., and I thought it would be good for me to go through - at the staff's suggestion to go through and make sure that everyone knows what is going to happen here so that they can plan their time and remarks. [Wallace] First of all, this is going to be a long hearing, and the reason why, is that we need to make sure that we get all the public input required, and the other reason is because we are going to be making a decision based upon what we are going to hear today, and that necessitates a long meeting. We don't want to leave anything out. So, I'll open the Public Hearing, we'll have our staff presentation, and just so you'll know - it's not a filibuster, it's necessary. It will go about 1 to 1% hours at least. [Wallace] Then we are going to take public comments and testimony and we'll have some Board Member questions to the public. Those who have spoken will ask them what - if we have any questions of those who have spoken. And I would like us to hold our questions until after each person has spoken, so please write them down. Then, because I think it will be needed, for a lot of reasons, we'll take a break, then we'll come back and have our staff follow up with any responses that they have to any questions or concerns that have been raised. And then we'll close the Public Hearing and we'll do some Board deliberations, because the - what we're asked today to do, is to take action regarding acquiring some property, and we haven't made a decision on this matter, so we have to pay attention today and listen to what's before us. [Wallace] We need to listen to all the evidence and testimony presented from the public and from our staff so that we can make this decision. And we need to fully consider and deliberate on all the evidence and testimony that we receive today. This hearing is not about compensation for the property, it's about the staff's requested action. The general rules that I hope to follow is that, I intend to conduct an orderly hearing, unlike the previous part of the meeting, I would like to allow each person, no matter what they have to say, to finish their presentation Page 1 of 52 372 377 377 377 381 382 384 387 400 and not interrupt. This isn't a debate or a forum for arguments, it's an information gathering hearing. And questions can be asked by Board Members, as I said, after each person concludes their presentation. [Wallace] And the public comments and questions should be directed to the Board, and please speak loudly into the mike so that we can make sure we have a good record of this. State your name, address etc. With that I'd like to ask our staff to begin the presentation. [Strohm] If I may Mr. President. [Wallace] Yes. [Strohm] As I have done before on this subject, I am going to conflict out this hearing today for conflict or a perceived conflict of interest. As I have done in the past, I'm conflicting out. [Wallace] Okay, somebody wake him up at the end, please. Okay, who would like to begin? [Kvistad] The first thing you need to do is just declare that it's opened. [Wallace] Okay. I thought I did that before, but I'll make it clear-- this Public Hearing is now opened. [Kvistad] I am going to start with just a couple of quick remarks, and then I'll turn it over to District staff and consultant to make the presentation to the Board. The purpose of this hearing is to consider acquisition of property by eminent domain. There is a draft resolution attached to the Board's - or to the staff's request on this item, that one can be modified or changed depending on what happens in this hearing today, so it's not - but that's the proposed resolution at this time. The resolution must be approved, if at all, by the Board by a two-thirds vote. Which requires, in this case, the remaining Board members to all vote yes on it. [Kvistad] The staff believes that there is sufficient evidence and facts to support the requested action. The primary findings, which the Board is required to consider and - when making a decision on this matter, is to - that the public interest in necessity require the acquisition of this property. That the property is planned or located in a manner that will be most compatible with greatest public good, and least private injury. And the property is necessary. I think what you'll - you'll have a good opportunity to hear everything, the evidence staff has put together I think, a very complete presentation for you. The owners of the property, his representative, Mr. Robertson, has requested to be heard. There is Page 2 of 51 424 444 463 476 also one other person i understand that has requested to be heard, but even anyone else that is here at this Public Hearing who wants to provide any comment or testimony, we should be open and allow those people to speak fully and make sure everything that they want to say is heard. [Kvistad] Anything clarified for their benefit so there's no question as to we've got all the information before you, before making any sort of decision. As far as the steps leading up to this action that's being requested of you, on October 1st there was an offer made to the property owner to - by the District to acquire the property for just compensation. There was that - that offer was not accepted. After that - we had been also - or at the same time we were also preparing an environmental review that was completed and a Negative Declaration was approved by you on November 1st of this year. On November 16th we sent out a Notice of the Intention to adopt this resolution as required by law. That was sent to the property owner and also to the lessee. Although we were not required to send it to the lessee, given that they did have lease on the property, we thought that was fair. We also provided a courtesy copy to the owner's attorney, Mr. Robertson. [Kvistad] We have been, as you know, for a long time, involved in negotiations to try to acquire the property. Those to date have been unsuccessful, but we're continuing to try to negotiate, and we will do so regardless of your outcome of a decision today on this resolution. Right now we are waiting for an appraisal from Mr. Robertson, who is having it prepared on behalf of the owner, and hope that would lead to some sort of resolution as to how we can reach an agreement on price. But, be that as it may, we'll continue to pursue those up until we decide whether or not - if you do approve this resolution, in whatever form, and then - before even implementing any sort of action to actually take the property through legal means, we would also continue to try to negotiate, so that's obviously, I think, in everyone's best interest and easier than going through any sort of litigation. [Kvistad] I guess at this point what I would like do is turn this over to the staff. There will be two presenters on behalf of the District. One will be Hal Bird - will give you some background information on - a little bit of history about the - Alpine County operations, the recycled water operations in Alpine County. Also he'll talk a little about existing conditions, so it will provide you with a good base knowledge. I know you have heard a lot of this before, through the Master Plan and other issues, but it's important that we put all this information before you, at this hearing, so I would ask your indulgence and patience in listening through all this. [Kvistad] Afterwards Matt Setty will take over. He's the representative from Kennedy/Jenks, the consultant the District, s retained to prepare the Master Plan. Page 3 of 51 492 5OO 5O7 515 538 He'll discuss some issues out of the Master Plan that pertain to acquisition of property, needs, and criteria, and how we got to the point of deciding to recommend acquisition of this property. That will - then he'll make - he's got the recommendation, and then that will be the end of as far as the District's presentation. Then we'll proceed along the lines that Mr. Wallace laid out as far as the rest of the order of the hearing. Thank you. [Bird] Good afternoon. Just for the record, my name is Hal Bird, I'm the Land Application Manager in Alpine County for the District. What we're doing this afternoon is we're going to do an evaluation of real property needs for the District's operations in Alpine County. [Bird] This presentation, as was stated, is going to be broken into two parts. Myself, I will be doing the overview of the District operations, existing conditions, and then Mr. Setty, from Kennedy/Jenks Consultants will, be doing the Master Plan, existing and future needs, property criteria and evaluation of the Heise property and the conclusion. [Bird] The overview of the District's operations: We are going to speak about the Porter Cologne Act, the history of the District's operations, as they relate to Alpine County. Recycled water facilities, fresh water facilities, the agreements we have, regulatory agencies that we have to conform with, and the conditions in Alpine County. [Bird] The Porter Cologne Act: In 1964 they started discussing the Porter Cologne Act, and the basis of this is water - the wastewater in the Tahoe basin needed to be exported out of the Tahoe basin per state law. And it - as the Porter Cologne Act stated that there must be a sewer system to treat the facilities sufficient to handle and treat any waste and transport facilities sufficient to transport any effluent outside the Tahoe watershed. And this is why we were required, back in the 60's, to come up with a plan to enact taking the wastewater out of the Tahoe basin. So, in 1967, we constructed Indian Creek Reservoir. This was to hold tertiary treated recycled water. The District was the first treat- ment plant in the country to treat wastewater to tertiary standards. [Bird] In Alpine County they looked for a dry watershed to build a reservoir and they were looking for an area that could hold the treated recycled water and not be impacted greatly by runoff. So they constructed Indian Creek Reservoir in a dry canyon. In April Ist of 1968, April Fool's Day of all things, tertiary water first entered Indian Creek Reservoir. Again in 1968, original contract irrigators were Heise, Schwake, Smith, and Springmeyer. And all the users were in the Indian Creek watershed. In 1968, when we started irrigating, the water was released from Indian Creek Reservoir into Indian Creek and went down to the Smith and Springmeyer ranches. Prior to the reservoir, both the Schwake families and the Heise families took water from the C-Line. Page 4 of 51 56O 576 593 617 [Bird] From 1968 to 1983, the Alpine County Water Agency was responsible for the controlled releases from Indian Creek Reservoir. This is something a little different than operating today, but we maintained the physical features of reservoir, but Alpine County Water Agency was responsible for the releases of the water. In 1972, construction of the campground at Indian Creek Reservoir and fish stocking program were enacted, and this was to prove how great tertiary treatment was, and we're very proud of that in the early 70's. [Bird] In 1972, the Diamond Ditch Association ranchers constructed the Diamond Ditch. The Diamond Ditch was a ditch system that would allow water from Indian Creek Reservoir to go over to West Fork watershed users. There were four ranches that make up the Diamond Ditch Association. That's the Ace Hereford Ranch, the Bruns Ranch, Gansberg and Neddenriep. In 1973, recycled water irrigators were changed to include Heise, Schwake, Smith, Springmeyer, Ace Hereford, Bruns, Gansberg, and Neddenriep. This was because part of the water was going down Indian Creek and part of the water was going through the Diamond Ditch system. [Bird] In 1985, Lahontan Regional Water Quality Control Board issued an order prohibiting recycled water from entering Indian Creek. So - then we had to change the irrigators, so in 1985 recycled water, at that time, only went to Ace Hereford Ranch, Bruns, Gansberg, and Neddenriep ranches. In 1988, Harvey Place Reservoir and our On-Farm was constructed. In what - this was when we decided to change to a secondary treated water. So in January of 1989, secondary treated water enters Harvey Place Reservoir, and part of changing to secondary treated water was Indian Creek Reservoir could not handle the capacity for future flows. It was cheaper to change to a secondary treatment system and it benefitted the ranchers in providing nitrogen and phosphorus to their ranches verses stripping it out of the water. [Bird] In 1989, Indian Creek Reservoir was drained and refilled with fresh water and became a fresh water fishery. This was a difficult thing to do because Indian Creek Reservoir was constructed in a dry canyon so it didn't have a stream that fed it. So we feed Indian Creek Reservoir and make it a fresh water fishery through irrigation ditches. In 1989, Indian Creek Reservoir winter flushing flows were secured by contract. And this was to help improve the water quality and turn over the reservoir. In 1989 recycled water irrigators changed to Ace Hereford Ranch, Bruns, Gansberg, Neddenriep, and we added Dressier and Cello. Dressier being the emergency disposal site or the On-Farm, and Cello being a small ranch in between the Ace Hereford Ranch area and the Dressier On-Farm. Page 5 of 51 639 673 685 7O5 [Bird] In 2000, Lahontan Regional Water Quality Control Board proposed a draft TMDL for Indian Creek Reservoir. And a TMDL is a Total Maximum Daily Load. It's the amount of pollutants that can enter a water body. And part of that TMDL process is - we were put on the 303(d) list for an impaired water body. Our recycled water facilities include the C-Line export pipeline. Our export pipeline is broken into three phases as you are aware. The A-line, which is from the treatment plant to the Luther Pass Pump Station at the end of Christmas Valley. The B-Line that is from Luther Pass Pump Station to the top of Luther Pass, which starts Alpine County, and the C-Line is part of our recycled water facilities in Alpine County, which is from the top of Luther Pass to Harvey Place Reservoir. It also includes Harvey Place Reservoir, which is a 3,800 acre-feet reservoir, that has storage capacity of 3,800 feet. Conveyance ditches, which include both conveyance ditches releasing from Harvey Place Reservoir, which is the Diamond Ditch, the Fredericksberg Ditch systems and various other. [Bird] We have the On-Farm emergency disposal site. This a 380-acre site, located - use to be on the Dressier property, now it's located on a multitude of owner's properties, and it's a site that was designed to take up our recycled water in the event of an emergency. We also have contract irrigation application areas with the various ranches. [Bird] Our Recycled Water Facility. Down here we have Harvey Place Reservoir, we have the C-Line coming from the top of Luther Pass down into Harvey Place Reservoir. We have the Diamond Ditch where we can release water from Harvey Place Reservoir down to the various ranches. This being the Ace Hereford Ranch. This is the Celio Ranch. The On-Farm, and if we continue on we transport the water across in a pipeline across the West Fork of the Carson River to three other ranches on the west side of the West Fork of the Carson River, and thats the Bruns, Neddenriep, and Gansberg ranches. [Bird] Our fresh water facilities. Again, this is Indian Creek Reservoir. It was used for recycled water, now is our fresh water facility. It has capacity of 2,800 acre-feet. To transport water to the reservoir, we use Snowshoe Thompson No. 1 Ditch and the Upper Dressier Ditch. We move water from the West Fork of the Carson River, Scott Creek, and Indian Creek, and releasing from the reservoir the fresh water is released into Indian Creek. So the facilities here are a diversion from the West Fork of the Carson River and travels in Snowshoe Thompson No. 1 Ditch, comes down onto the District's property, changes to a ditch named Upper Dressier and can travel to Indian Creek Reservoir. In this area we have Indian Creek which will enter the Upper Dressier Ditch. Scott Creek that can enter Upper Dressier Ditch and come to Indian Creek Reservoir. Page 6 of 51 -'~ 732 740 TAPE 001 OO7 019 [Bird] From Indian Creek Reservoir it leaves that reservoir in a pipeline underneath Harvey Place Reservoir, and is released into Indian Creek. And Indian Creek travels downstream into the East Fork of the Carson River. [Bird] Agreements. We have multiple agreements. We have private agreements with our land applicators, this is our ranches. We have the Diamond Ditch Agreement. The Diamond Ditch is, as we said, owned by various ranchers, and we have an agreement to use that. Flushing flows for Indian Creek Reservoir. We use the winter water rights from a private individual for flushing of Indian Creek Reservoir. We have agreements with the County on recycled water operations. There is a multitude of agreements within that. Indian Creek Reservoir minimum pool elevations. We have agreements on what that... END, TAPE ONE, SIDE A ONE, SIDE B [Bird] ... we have one with the Davis Grunski Act, which controls the Indian Creek Reservoir campground. We also have Lahontan Water Quality Control Board agreements on our application. Federal, we have the U.S. District Court Water Master. The Alpine Decree that regulates all our fresh water agreements with BLM on the land, campground, and various items. [Bird] Regulatory Agencies: We have a multitude of regulatory agencies that control what we do. Alpine County Board of Supervisors. We've broken this down into three. There is County, State, and Federal. So we have the Alpine County Board of Supervisors, the Alpine County Contract Commission, the Alpine County Fish and Game, Alpine County Health Department, Alpine County Planning Department. In State, we're governed by Lahontan Regional Water Quality Control Board, California Department of Health Services, California Department of Fish and Game, California Division of Safety of Dams, and the Nevada Department of Environmental Protection. What we deal with Nevada Department of Environmental Protection is in any tail water that may cross the stateline. Federal we deal with the U.S. District Court Water Master. [Bird] Conditions in Alpine County: Recycled water application. Presently recycled water is reaching or exceeding the maximum application rate for lands under contract. We're pushing the limits of what we can do at this time. We're dealing with, as I said before, with Nevada because of tail water issues. We're really pushing the limit. We have difficulty meeting regulatory requirements. This is both - this is mainly where we have contracts with our ranchers as our appliers. They're having difficulty meeting these requirements. Ranch irrigation contracts may expire in 2008. And we have a threat of groundwater contamination. And the threat of groundwater contamination is the fact that we're having difficulty meeting these requirements. Page 7 of 51 031 042 061 O75 [Bird] The District and the ranchers need flexibility in the delivery of recycled water, both in timing, location, and quantity. As we spoke before on the Diamond Ditch, this is some of our controlling factor on delivery to the ranchers. It has capacity issues and what we can do - with where it is and the location, so we're working through those issues. The ranch lands are being subdivided. We're very concerned as we look - as many lands throughout the area, they're coming out of ranch areas and becoming homes, and this does not fit into our plans as a recycled water applier. [Bird] Ranches are being split between multiple family owners or multiple owners. And what I'm saying is, if we take the On-Farm for instance, the On-Farm was originally - we signed on with Mr. Dressier. And he was a huge landowner in that area. We now- the On-Farm is now owned by Mr. Brooke. The Ace Hereford Ranch, which is the Bently Corporation. And there is approximately seven other individual ranchettes. Ranchettes are small five to twenty acre parcels that own part of that On-Farm as our emergency disposal site. We're also noticing as ranches are sold, sometimes they are being sold to more than one owner since they are very expensive. Ranches are being handed down to multiple family members. We take for example, the Neddenriep Ranch. The Neddenriep Ranch, we originally had a contract with Wilton Neddenriep, when he passed away it went to four family members, a couple of daughters, a couple of sons. One of the daughters has passed away since then, so now a son-in-law owns it. So that ranch that was an application area of say 470 acres, is now broken into-some have a 180, some have a 100, so that ranch has been broken up and we have to deal with individual family members. [Bird] The Diamond Ditch. It's owned by the Diamond Ditch Association, and as I stated before, there are four members to the Diamond Ditch Association, and that is the Ace Hereford Ranch, Gansberg, Neddenriep, and Bruns. We have an agreement to operate and maintain their ditch, but it belongs to that group. The District has, as I said, contact to use and maintain the ditch. The Diamond Ditch flows at maximum capacity. When we start that ditch up for the irrigation season, we run at maximum capacity of that ditch throughout the season. It gives us no flexibility in case of- if we have damage, if it's raining, we really are pressed. So as I said before, the Diamond Ditch is a large controlling factor of what we're - why we have capacity issues on discharging for Harvey Place Reservoir. [Bird] The District currently cannot - cannot currently meet the contractual stipulations. There are issues on delivery. The contract we have with the ranchers currently, is that they can demand twenty-five cubic feet per second at any time, and right now the ditch has a capacity of twenty cubic feet per second, so we cannot meet those contractual obligations. The capacity of the ditch controls the operations as I said. It leaves no room for flexibility in the operation of the reservoir. Diamond Ditch provides the only outlet for Harvey Place Reservoir. The only - what I would say here is the only permitted outlet. Anything - where we outlet - we have another outlet would be a spill. Page 8 of 51 O87 100 111 122 [Bird] This is our photos of the Diamond Ditch. This is our concrete sections. We have good capacity in those. This is a typical dirt section. This is a diversion point that goes to the On-Farm and another typical dirt section. And here I want to show you, we have in the past experienced where we have lost sections of this ditch. And as I was saying before, when we're operating at maximum capacity we're operating with that ditch full, to be able to drain our reservoir, drain Harvey Place Reservoir by our deadline of October 15th . When we have down time, then all we have left to do is push the ditch into a much higher limit into our safety margin, which creates more of this problem. [Bird] Conditions in Alpine County regarding the On-Farm emergency disposal site. Emergency disposal area does not meet our needs. To explain the On- Farm system, it's 2 ~ miles of concrete ditch going out to two turnouts of this concrete ditch that are located approximately 200 feet apart, and that goes into 11 */~ miles of dirt ditch. The idea of that was to transport water to this emergency disposal site~ fill up these dirt ditches, and they would percolate into the ground or evaporate, and we would have sub-irrigation, and it would take care of our water in emergencies. [Bird] What we're finding is that it has limited capacity as an emergency disposal area. If we take it when we don't have an emergency in the best conditions, let's take August, we fill the emergency disposal sites, 11~ miles of ditches full of water, and we find the soils out there perk very slowly. It's clay and caliche. So it's not taking care of our water. So we're basically getting mostly evaporation now, say in August. The problem is that our emergencies don't happen in August. Our emergencies happen usually in the winter in a flood event. In a flood event, the 11~ mile ditches are already full of water. They've sheeted off the ground because they are two hundred feet apart and filled full of water, leaving us no room to put water during an emergency. [Bird] The District does not own the land and may lose the land in 2008. As I said, we originally signed on with one owner, it is now a multitude of owners. And that contract may expire in 2008, so we're renegotiating for our emergency disposal area. This emergency disposal area is a contractual obligation, and we have to have an emergency disposal area to meet Lahontan's requirements in case we have a problem. During past emergencies, the On-Farm was not able to be used and also became a part of the emergency. In the floods of '95 and '97 we needed to utilize our emergency disposal site. And in both times not only did it - wasn't able to be used, but it became part of the emergency. It was things we needed to repair after the emergency was over. And as I said, it's usually flooded at that time. The On-Farm is located in an area that is not conducive to emergency disposal. It's 6~ miles downstream from our reservoir. It's 6~ miles downstream ditch miles from our C-Line. We cannot bypass the reservoir to meet this. Page 9 of 51 141 148 160 169 184 192 [Bird] If our emergency happened to be Harvey Place Reservoir, the On-Farm does not help us. If our emergency happens to be the Diamond Ditch, the On- Farm does not help us. As you saw when we had the blow-out earlier in the Diamond Ditch, the On-Farm is on the other side of that blow-out, so we're just holding water in the reservoir, and we must operate to fix that ditch in a rapid period of time, and then maximize into our safety zones. [Bird] These are pictures of the On-Farm. This is the -a typical example of the 2- ¼ miles of concrete ditch. They come down and make a turnout structure and come into these dirt ditches. During - these are photos from the '97 flood area, this is the ditch that comes from the Diamond Ditch out to the On-Farm This is at the Celio property, the ditch is - the On-Farm is probably another half a mile down stream. As you can see, we've had blow-outs to this ditch. This road is the access to that blow-out. This is all clay soil. If you drive in there, you're truck's only going to make it about five feet and sink in. So it is really extremely hard to even get to the On-Farm to deal with the emergencies. [Bird] When we go out after the storm event, we take a look at the dirt ditches that are supposedly set up to take the water, and you can see that they've sheeted off the land and taken sediment and filled those small dirt ditches. This is a culvert, and you can see how it plugs. This is just a typical example, we have photos of multitudes of this. So it's makes our On-Farm not only not usable during an emergency, but not useable for a period of time until we fix that. [Bird] The On-Farm Emergency Disposal Site: Again, here we have Harvey Place Reservoir, and our C-Line. The we have Diamond Ditch which is 6% miles out here until it reaches the On-Farm. Here's where we divert it out. These blue lines here are the 2% miles of concrete ditch, and then a series of ditches in between. So, as you can see from this map, that if we have a dam failure or have to repair a valve or something that we need to move water out of this reservoir, that On-Farm in located in the wrong spot. If we have an emergency that happens to be a break in anywhere of this ditch system, it doesn't help us in the location that it's at. If we needed to bypass the reservoir because the emergency happened to be at the reservoir, we can't get it from the C-Line to the On-Farm at this point. [Bird] So the On-Farm, again, is 6% ditch miles from the C-Line. The Harvey Place Reservoir and the Diamond Ditch must be intact to convey emergency flows to the On-Farm. Emergency Disposal Methods: Disposal method is by infiltration ditches. As I explained, they're made to infiltrate and because of the soil types, they don't. Local run-off fills the infiltration ditches during storm events. That's again, like I said, during a flood event, it's already full of water. It allows us to do nothing with it. [Bird] Adjacent drainage areas fill the disposal ditches as I showed with the photos, you can see how it sheets off the ground and fills those ditches. And the Page 10 of 51 201 211 227 238 topography is not conducive to infiltration. It's got a sloped ground. What happens when those ditches fill full of water and they over top and creates erosion. Erosion goes down to the next lateral ditches, blows that ditch out and it continues the process. So we have quite a bit of erosion that we constantly have to fix out there. [Bird] The soil by the Soil Conservation Service classifies this a B1 and C2, consolidated clay and rock. Underneath this clay soil is a hard caliche - hard mineralized caliche, which allows no percolation or very limited percolation. The soil is poor soil for infiltration, and average of 0.24 feet per day. The existing emergency disposal system and site is inadequate. It has never helped us during an emergency. [Bird] Now we'll talk about Indian Creek Reservoir. It was listed as an impaired body, impaired water body on the 303(d) list of the State Water Quality Control Board's list, as a polluted water body. So in 2000, Lahontan Water Quality Control Board staff has proposed a TMDL, a Total Maximum Daily Load on Indian Creek Reservoir. They're basically at this time waiting for a quorum to impose that TMDL. They're telling us that we must reduce the reservoir phosphorus levels. We must increase the concentration of dissolved oxygen and improve the water clarity. We need to minimize the external phosphorus loading so that once we clean up the phosphorus in the reservoir we're not compounding the situation again. And we have to support the beneficial uses, and one of those beneficial uses is the cold water fishery. [Bird] And the District cannot reliably meet the current minimum contract water elevations. We have minimum pools that were set by contract that say that we can in a normal year we have to be at a certain level, and in a drought year we have to be at another certain level. Well the problem we're having is during a drought we can't transport our water rights to the reservoir, there's just not the water to move it. We have enough water to make up for our normal evaporation and seepage, but when we've lost, we don't have water to make up what we've lost. So we need additional water to solve that problem. [Bird] The current flushing water flows for the reservoir are inadequate to sustain water quality. And what I mean by that is we have contractual right to flush Indian Creek Reservoir with waters from Indian Creek. I can legally move water October after the irrigation - the contractual irrigation season, and winter starts - winter water rights start. But the Indian Creek is an ephemeral stream. Water is not-- there is no water in the creek. If you have no water in the creek it's tough to flush the reservoir. So we really don't get the water, if you look at the water balance in the area, it's more of a spring run off. So we do get some water to flush the reservoir, but not enough to improve the water quality to meet our obligations. Once they impose the TMDL we won't have a chance. Page 11 ¢ 51 253 269 285 295 301 3O8 [Bird] The flushing flow water contract, again, may expire in 2008. That's a contact we have with an individual. Right now it's owned by the Bently Corporation, it was originally contracted with Dressier. The flushing prompts concerns of downstream water quality. If we have a pollutant, as Lahontan says, phosphorus, in the reservoir, and they have imposed this as a pollutant. They're allowing us to flush that out of the reservoir, that's how you get it out. Then are you going to be transferring that pollutant downstream? So we need some way to treat that water coming out the reservoir to not impact downstream users. And you can do that through either land application, which phosphorus is taken up by the plants. You can do it by wetlands. There is various means that we can do and improve things, but right now that is a concern of the District. [Bird] So here's some of our facilities again. We have the C-Line coming in from Luther Pass to the reservoir. Here's Indian Creek Reservoir which is right behind Harvey Place Reservoir. And as I said, there is a pipe that goes underneath Harvey Place and comes out at Indian Creek. We have the Diamond Ditch, and then the various land application sites. Here's a view of Indian Creek Reservoir. Again, as we've talked, we must meet the beneficial uses of TMDL of this reservoir. And as you can see, it's not a large reservoir, it's 2,800 acre-feet, but we're under an obligation. The reason that obligation needs to be met is this has been dedicated as a water of the state, and we can't pollute a water of the state. [Bird] District Actions: The District retained Kennedy/Jenks Consultants to develop a Master Plan for the District's operations in Alpine County. And we also retained the Parson's group for an environmental analysis of the Master Plan components. So now I'll turn this over to Kennedy/Jenks consultant, Mr. Matt Setty, and he'll give you some more details on what's going on. [Setty] I'm not quite so tall as Hal. I'm Matthew Setty with Kennedy/Jenks Consultants. I've been functioning as the Project Manager for the Master Plan activities, and my group has done quite a bit of work since we've been contracted last December. And I'd like - first to give kind of an overview of what we've been doing with respect to the Master Plan, and really how that ties to some of the land issues that we have identified with respect to the Master Plan. [Setty] First I'd like to briefly go over both the reasons why you as a District sought us out in order to develop a Master Plan. Sort of a purpose statement that we have come up with or a Mission Statement you might say. The process that we have been involved in for the past year and what we anticipate in - between now and the completion of the Master Plan, and some of the goals of the Master Plan, and of course the timing and status of where we currently stand with this. [Setty] When we initially started the Master Plan, we weren't really sure what all of the facilities were and to the extent that the District used them. We didn't really know what the potential liabilities, potential benefits of these facilities were. So when we started to look at this, we've identified several things that jumped out Page 12 of 51 320 329 336 342 right away. One is that we did a flow projection analysis about what the flows coming out of South Tahoe are going to be in twenty years. And what that told us is that we're not going to have reservoir capacity suitable to maintain - to store all of the water during winter time for land application in the summer time. So in other words, Harvey Place Reservoir, although can currently store all the water, will be too small for storage needs in year 2021. [Setty] This was compounded by the fact that the emergency disposal facilities that we currently have are inadequate, and if we don't have enough storage in the reservoir, we don't have an emergency storage facility. At some point in the future the District is going to find themselves in a bind for places to put their water during the winter time. And with the overall operations and the increasing regulatory environment that we're seeing in Alpine County and across the western United States with respect to the use of recycled water, we have some health and safety concerns that the District needed to make sure to address prior to potential problems arising from them. [Setty] And we're doing all this in an area that is fairly rapidly changing. We have - we are losing land application sites as Hal mentioned, due to fragmentation of some of the ranches. Due to the development of several of the ranches, and that's a trend we currently see occurring and we anticipate to continue to occur. [Setty] We also have this year, you'll see this 2008, and that's when all the contracts or the bulk of the contracts that the District currently is involved in come up for renewal, so they may be an expiration of many of the contracts in year 2008, and it's imperative that the District has a plan as to where to go when that - when those expiration dates come due. [Setty] When we look at what the purpose or our Mission Statement of the Master Plan, I'd like to read this for you, and we came up kind of jointly with District staff in developing this, it was to work cooperatively to develop to a plan that provides the maximum flexibility and reliability to meet the future operational, environmental, and regulatory requirements for recycled water management at optimal costs to the District's customers. In essence, we are saying we want to do the right thing in Alpine County. We want to do the right thing both for the citizens of Alpine County and for the ratepayers of the District. 351 [Setty] So the process that we've been involved in, really we got underway about the beginning of January of last year with the development of - I sent out my team to - each component of my team analyzed a different part of the system. We did an analysis of the existing contracts, the easements, the legal agreements that we're involved in. We looked at the hydrology, the flow characteristics of the conveyance systems, the stability of the ditches, the potential liabilities associated with the conveyance of recycled water. We've Page 13 of 51 363 372 392 40O 4O8 looked at the groundwater monitoring system and the adequacy of that system, and how that ties into meeting compliance with Lahontan Regional Water Quality Control Board. [Setty] We've also looked at - we've undertaken a fairly large mapping effort for the District's planning, and this has been incorporated into a geographical information system for the management of the resources in Alpine County. We also took a look at water rights, and with respect to how water rights might be applied to address the TMDL that is being imposed on Indian Creek Reservoir. So we've done sort of a tertiary survey of all the water rights out there, as well as water rights the District's owns, and where they're best used. [Setty] Upon kind of assembling all of these into technical memorandums, it - we were able to determine both the current and the future needs of the District with respect to the overall operations in Alpine County. From this we sought the input from citizens in Alpine County and Tahoe, the Board, the staff, pretty much anybody that wanted to give us input in generating what we called our system or our project components. Those project components were really any type of implementable action that we could do to further our operations with respect to our goals in Alpine County. So from that we have developed fifty-five project components in which we reviewed - for their applicability to operations, as well as whether or not the District's interested in some of these types of components. ' Upon looking at all these fifty-five components, we kind of gleaned out the ones that weren't very practical or that were not implementable, and with the remainder, we've generated several different alternatives. [Setty] What we've done with these alternatives is kind of gone on under review with this alternatives and handed those all to Parsons Group. Parsons has performed environmental analysis to make sure that we can stay within the California Environmental Quality Control Act, and meet the National Environmental Policy Act, with respect to anything that we're going to do with these alternatives. [Setty] From that we'd like - we're hoping to develop a consensus as to what the selected alternatives should be, and from there the Board would then select an alternative. We're currently in negotiations and discussions about what that alternative really should look like. So some time in the future, between now and probably some time in mid-winter, we will bring to you another presentation outlining some of these alternatives. [Setty] So - and the final portion of that is upon your adoption of a given alternative, Kennedy/Jenks is still under contract to provide an implementation plan for the overall Master Plan, which would give you essentially the road map of how to go about implementing the Master Plan. Page 14 of 51 413 425 431 45O 467 [Setty] Some of our goals that we've outlined - outlined as part of the Master Plan, or as to why we need the Master Plan, is really that we want to make sure that we have some planning, some hard solid planning for the next twenty years of recycled water activities in Alpine County. To make sure that we don't find ourselves back in the position that we are in now, approaching a deadline of contracts without a very good idea of where we want to go after that point. It's important for us in planning these, to comply with the local, state, and federal regulations that are imposed, and which you can see from Hal's presentation there's quite a few that we need to make sure we comply with. [Setty] And most importantly, whatever we're doing out here, we need to make sure that we have some flexibility in how we do it, and that it's both reliable in getting rid or applying the recycled water in Alpine County as well as being reliable in meeting our regulatory obligations. [Setty] When we look at what we have been doing over here, as ~ mentioned, we analyzed the system and that took about January to roughly sometime in April. We're still looking at actually some small components of that that have come out, but the bulk of the work was done from January to April. We've done some projections of future needs which also involved a flow projection analysis on the C-Line, and what the plant production was going to look like in twenty years. The evaluation of the system components that I mentioned. We formulated the alternatives and that's still going on. Parsons is going to be submitting their draft of their Environmental Impact Statement to the Board, coming up fairly shortly I believe. Excuse me, that would be an Environmental Review rather than Environmental Impact Statement. The District as i mentioned is to consider the adoption of the program, Environmental Impact Review, and then the Master Plan completion schedule is for April of 2002. [Setty] When we've looked at the District's needs, as mentioned, we want to meet our regulatory obligations, in the confines of our Master Plan. Make sure that we can set out a path to do that. We have a lot of contractual obligations that we want to maintain and make sure that we can meet all those and implement a system that will assure that we can meet those. Lahontan Regional Water Quality Control Board requires emergency storage. We'd like to look at having at least 120 days of emergency storage just for those type of events you saw the photos of, ditch blow-outs, changing valves in the dam, catastrophic failure of a dam, any of these types of things that might require the need for emergency impoundment. District staff feels that 120 days is adequate time to address most of these types of concerns. As well as there is a volume portion of that, that roughly equates to about 1,800 acre-feet. [Setty] And we'd like to have, excuse me, we have - we have recognized the need for more land for both current and future recycled water application. Page 15 of 51 485 497 512 525 There's a rate that we've talked about, I know I've talked about it with you before, of 3.25 acre-foot per acre, that's roughly termed a duty, it's the amount of water you can put on the land - a piece of land in the irrigation season. We currently have under contract approximately 1,580 acres of recycled water that can legally accept a little bit over 5,100 acre-feet of water a year. Our current production numbers run right around 5,200 acre-feet per year. So as you can see, we currently have a need for more land for land application. In the future we are going to be producing about 6,400 acre-feet per year, so you'll see that we're going to be about a couple hundred acres short of what we need for land application if we are going to do that we all our recycled water resource. [Setty] So in order to do this, we need to be able - we need to be sure that we can maintain long-term application sites. It's not economical for the District to build infrastructure and to invest money into directions that might disappear in a short period of time. So we don't want to be building pipelines to lands that are only going to be capable of receiving water for a short period of time. So in that, we want to make sure that when we look at new contracts they are for fairly long- term periods of time. Gives us the reliability and security that we need for a 20 year Master Plan. [Setty] We need greater reliability and flexibility in the conveyance systems, that's both as Hal mentioned in the timing of the delivery and the volume of delivery, in order to best support the historic irrigation practices that have gone on in Alpine County. And I think that what we are looking at is that we need some flexibility for alternative applications. Not only should we be looking at recycled water land application for irrigated crops, but the possibility of using it for infiltration basins, or wetland resources, or emergency impoundment, support of vegetation within your emergency impoundment facilities. Other types of uses that might more effectively utilize the recycled water resource. [Setty] Flexibility for - excuse me I just covered that one. And it's important that when we start looking at these, that we can't just get hung up on the recycled water aspect of this and forget the fact we have some responsibilities associated with Indian Creek Reservoir. And these are not only the TMDL but also the need for water to support the minimal pools. So a couple of the things that the planning efforts up to this point have highlighted was really the identified need for more land. And that's what sort of started us on looking at different pieces of property. [Setty] In looking at these, we needed to define the characteristics that are suitable for the District's needs. In other words, what kind of land are we looking for? So we went out and kind of did a tertiary search of what lands are even applicable to our needs. So what I am going to go through with the rest of this, is essentially an evaluation of several different parcels of land that we've looked at. Page 16 of 51 535 564 59O [Setty] So from that we've selected several properties for evaluation and application and then we've applied this criteria to these properties. So our property evaluation criteria comes down to the size. It's important that if we're looking for a piece of land that it's of suitable size to meet all the District's requirements that we currently have. The proximity of the piece of land to both the conveyance system, meaning largely the C-Line and then in turn the Diamond Ditch, but also to our storage facilities. Both so that the land can work as an application site and as a emergency impoundment site. It's more desirable to have land with water rights on it. The District needs water rights for the support of Indian Creek Reservoir. So that's one of the criteria we've used in evaluation some of the land. It's important that we have the correct land form structures that would be conducive to construction of an emergency impoundment facility. And Ill give a little more depth on what I'm talking about when we say emergency impoundment facilities. We want to make sure that it is suitable to all different types of uses that are potential future uses that the District has in mind. [Setty] A lot of these come down to the topography and the slope, soil characteristics that the land has and whether or not those are suitable for both application of recycled water or impoundment of recycled water. When we are looking at our property size, we needed to make sure that it is large enough to handle the current projected flows. As we've mentioned earlier, we're losing land to development in Alpine County, and we'd like to make sure that we have land that could compensate for the loss of contracted irrigation application sites. And looking at the emergency impoundment, we need something approximately of minimum size of 340 acres. What that allows us to do is take 120 days of recycled water directly from the C-Line and impound it at an elevation or a depth of impoundment that would be under the Safety of Dams issues, which is 6 feet - this -we could have a 120 days which would account for 5.3 feet deep in 340 acres. S° that's why that number is important in terms of our size, is that we're, we're not, we don't desire to build another dam or desire to build an emergency facility that could have multiple uses. [Setty] The property location is paramount in this whole decision here because we need something that is close enough to the C-Line that we could put water directly from the C,-Line on to this property without having to construct huge infrastructure. We also need to make sure that it is close enough to Harvey Place Reservoir so that we can take water directly from the reservoir or in the event that our reservoir is fixed and our emergency impoundment is full, it would be nice to be able to take water from an emergency impoundment and put it back into the reservoir. It's the locations that we will see here later on, you'll notice that several of them are almost perfect and one of them is really good, and others are not so good. So it's important to understand that the proximity to all of our existing infrastructures is a very important criteria. Page 17 of 51 6O8 646 660 675 [Setty] The water rights that we've looked at on here is - we've preferred West Fork water rights because as Hal mentioned, Indian Creek, Scott Creek, Randall Creek, some of these that also have water rights on them, are essential ephemeral streams, meaning that they only flow a portion of the year. The West Fork water rights have much greater security that you'll be able to divert your allocatable portions in any given year. The diversion point under the Alpine Decree, which is the Federal Decree that governs water on - in the Carson system, the diversion point is important because it takes a court action to change diversion points. So you could use a water right from the same diversion point with much greater ease than you could by having to buy water rights somewhere else and transfer it. That's also important with respect to both location and the segment or something like that of the water right. You can't - there's a limitation to how far you can take an Alpine Decree water right from it's decreed area to the new area of use. And that plays an important role when it comes to your priority date. If you cross a segment boundary, which would be the state line in this case, you would lose your priority and become the junior appropriator in the segment, and so therefore, it would not make sense for the District to buy a water right in Nevada and try to move it up river. It would not be allowable or if it could be allowed, it - the likelihood that you'd be able to get water from that water right would be very slim since you would be the junior appropriator in that segment. [Setty] The land form slope that we've looked at we're really classified it based on Alpine County planning standard. Looking at 0 - 5% slope, 5 - 15% slope, and greater than 15% slope. For our purposes, 0 - 5% slopes really are only the lands that are going to do us any good. They are of Iow enough angle that we can land applied recycled water and they are of flat enough terrain that we can construct emergency impoundment facilities without huge amounts of earth moving. [Setty] So we'll have quite a bit of talk later on regarding the soils and with respect to the soils, we have a couple of things going on. Hal mentioned the soils on the On-Farm being underlaid by caliche and mineralization. We don't really have a very good idea what's in some of these other areas, what the soils are underneath the surface soils. So we've used the Soil Conservation Service mapping that is pretty much the industry standard for determining soils in these areas. And with respect to the soils, we're talking about both voracity and the infiltration capacity of the soils, meaning, how well can water move through these soils and to what depth they can move into the soils. [Setty] When we start looking at the properties that we have evaluated in this, you'll notice on the top of the screen is the On-Farm with approximately 380 acres. The On-Farm is not currently irrigated as a normal practice. It is in native vegetation. The soils have not been agriculturally modified over time. The Ace Hereford Ranch, which is fairly large ranch as you can see, however, it has a Page 18 of 51 7O3 714 732 746 762 fairly small portion that's actually usable land. The Heise Ranch. which is the large section here in the center here in red, approximately 1,400 acres, of which most of it is fairly usable. The District owns - the District - have it there, the District's Schwake property, 210 acres adjacent to the south side of the Heise property, and also two other lands the District already owns, which are also up on the hill around Indian Creek, not applicable to land application for recycled water. The Gansberg property is located on both sides of Highway 88, the problem with the Gansberg property we'll get into a little bit - but it was one of the other large pieces of land that we evaluated for potential application sites. [Setty] When looking at Gansberg property, and this is important not to be confused with Gansberg's also one of the irrigators, and that property is located on the very north end of the West Fork of the Carson, near the Nevada border. So these are separate property from Chris Gansberg's property that he actually irrigates with South Tahoe's water. [Setty] The location of the Highway 88 Gansberg's property would require pumping to utilize property for emergency storage, application from Harvey Place Reservoir-- we're several hundred vertical feet above that, so it would take a fairly substantial pumping effort to get the water back up to the property. And as we know, generally when we have a big, major event in Alpine County, like the flood of 1997, too much water is not the only problem. Usually the lack of electricity is also a problem, pumps run on electricity so that's probably not the best mechanism for an emergency disposal site or emergency impoundment site. [Setty] The District's - or this property is greater than a 1,000 feet away from the C-Line, so you can see that we would have - we're looking at building some substantial infrastructure in order to utilize this property. And the useable portions of this are really too small for our needs, although it is large enough for an emergency impoundment facility at 340 acres, it is not large enough to have that as welt as have area for land application in the event that we lose other contract ranches to development. [Setty] If we were to take Indian Creek water, which is high in phosphorous, and want to land apply it to ensure that we' re not transferring phosphorous down Indian Creek, we would have to also pump Indian Creek water up to the Gansberg property. Therefore, it would be a very costly way of land applying fresh water. And the overall topography, because it's a fairly steep property, and slants pretty precipitously down towards Indian Creek throughout most of it, it's not very conducive to the overall uses that we foresee for the District. [Setty] The Ace Hereford property located in Wade Valley, which is also a little - it's hydrographically isolated.. Page 19 of 51 TAPE 001 O07 010 015 025 033 END, TAPE ONE, SIDE B TWO, SIDE A [Setty] ...a ways away from the C-Line and Harvey Place Reservoir. Much -- actually much greater than a 1,000 feet away. Their located to the north of the property if you remember back to that map. The property is too small for the District's needs, it again is a property that - you know - it's large enough for our 340 acre emergency impoundment facilities, however, it would require major earth moving in order to find a place flat enough with that much land. [Setty] The West Fork's water rights associated with this property would require a change in point of diversion, and there's not very many water rights associated with it. There's really only about 170 acres of water righted land on that entire property. The property roughly a 1,000 acres. [Setty] The Indian Creek fresh water, again, this would require new infrastructure to try to reapply Indian Creek water - Indian Creek Reservoir water to the Ace Hereford Ranch because, as you remember, the Diamond Ditch is a recycled water conveyance and we cannot use it to convey fresh water. The topography again with this one limits the land use potential. [Setty] The Schwake property located - that was purchased by the District several years ago is only 210 acres. This is too small for any of the District's needs. The West Fork's rights that were attached to the property are already being exercised by the District in support of Indian Creek Reservoir. The fresh water- reapplication of fresh water on this property again would require pumping back up, because it's above hydrologically - hydrologically above Indian Creek Reservoir. The topography, this is again limiting because this is another property that slopes directly down towards Indian Creek, the only usable portion of the land does. And the remainder of the property is essentially upon the hillside in the Pinon, Juniper trees. [Setty] This site for several reasons is not very suitable to emergency storage, the least of which it's the closest property we've evaluated to Alpine County School. Location for this - the location is just - although close enough to the C-Line and Harvey Place Reservoir that you could pump out of Harvey Place Reservoir, you could not gravity feed this - you cannot gravity feed from Harvey Place Reservoir to the Schwake property, therefore, requiring fairly substantial infrastructure in developing an emergency impoundment facility. [Setty] We looked at the On-Farm, and the On-Farm is an interesting thing from an engineering perspective. My staff of engineers got out there and started scratching Page 20 of 51 -' 046 O52 062 O72 their heads and wondered - because one of the initial charges we were with, is how do we make this work? Around our office, we sat around for a long time trying to figure out, how do we make this work as an infiltration gallery, and we finally came - I finally came back to Baer and Hal and said "We don't make this work as an infiltration gallery." There's head-cuts in the On-Farm that show that the caliche layer is greater than 10 feet deep. The voracity in the infiltration capacity is very very slow. If we're to fill this, we're looking at better than a year of - before the water actually makes into ground. So, so the applicability as an emergency impoundment facility is very limited. As an overall site for District needs, the land is not conducive - it's a high sloped - highly sloped land, slopes directly towards the West Fork of the Carson River. It's - so it has very limited usability - usable land you might say. [Setty] It also has no water rights attached to it, the small portion of water rights that were on one portion of it were stripped off in the early '90s. And as Hal had mentioned, this is 6~/~ ditch miles downstream from the area that you are going to need downstream from the C-Line outlet or Harvey Place Reservoir. So this again would require that Diamond Ditch be intact for this to be usable. [Setty] The Heise property was - when we looked at the Heise property it seemed to meet almost all of our needs. I have a matrix coming up that demonstrates that it does meet most of the needs. It is close to the C-Line and Harvey Place Reservoir. It's adequate size for an emergency impoundment facility, as well as future growth or the need for land application sites as we lose them to development. It has fairly substantial West Fork water rights that are currently attached and in place upon the property. The soils have been agriculturally modified soils for approximately the last - little over a hundred years. The soils are conducive to their type - what they call hydro Class A and B soils, which are conducive to recycled water application. [Setty] Also one of the benefits of the Heise property is that has a lower net nitrogen balance in the property because it has not received recycled water in the past, or at least in the past fifteen years. The topography of this land is very flat. It's very suitable to almost all the District's needs. Looking at this matrix, and there's - I think I supplied the Board - one that you could read a little bit better, but it was hard to get everything out here. These are really the criteria that we've used for the - for the analysis of this, and Ill read them quickly. And as you can see, on the right hand side are the different ranches and the X in the box means this is a simple yes/no matrix. Yes they satisfy these, or no they do not. [Setty] So the emergency impoundment of 340 acres, the Heise Ranch is the only - the one the that's satisfies that the best, largely due to size and slope. We have the capacity of handling 5,200 hundred acre-feet. That's today's flows. The Page 21 of 51 O86 093 103 1 O4 105 106 107 capacity of handling 6,400 acre-feet, that would be the year 2021 flows. Capable of handling 20% additional capacity, that was the desire by the Board in the Master Plan in order to make sure that we are in a good position in 20 years, that we're not built out to the maximum at that time. That we have 20% buffer in our operations and capable of handling all the District's needs beyond the year 2021. And none of these properties could insure that they can handle all of our planning requirements beyond the 20 year horizon. However, my feeling is that looking at our flow projections, is that the Heise property could handle many of the needs to some point beyond 20 years, we just don't know how far. [Setty] Under land form slope, it's basically is the majority of that property - that usable portion of that property, 0 to 5%. Over less than 5%. The soils are conducive to infiltration, and the soils are conducive to recycled water application. Those are two very different things. One, the recycled water application, we have to take into account the nutrient budget of the soils and the crops type themselves versus infiltration whereby we could have a higher quality water treated with the wetland system or something, and get rid of the water by just letting it infiltrate into the ground. [Setty] Under the water rights criteria, we've looked at the West Fork water right as I mentioned. The point of diversion, whether or not it would require a court order to change it. The Decree, Segment 4 - which is the segment of that segment of the Alpine Decree. Fresh water ditches are compatible with delivery from Indian Creek Reservoir, meaning do we have existing infrastructure out there that would make it conducive to use this property for reapplication of Indian Creek water. Multiple use of diverted fresh water, and that's essentially can we take the water rights from these pieces of property, use them in support of Indian Creek Reservoir, and reapply them onto the property in order to minimize the potential downstream phos- phorous issues. [Setty] Hot air? [Mosbacher] Not yours. Is anyone else in this room cooking or is it just ... [Setty] The location of the property... [Mosbacher] i'm not sleepy. You aren't boring me, but it's just really cooking. [Setty] The location of the property - the criteria that we've looked at was the 1,000 feet to the C-Line, 1,000 feet to Harvey Place Reservoir. An important one that really only comes up - under the District's own Schwake property and the Heise property is - is this contiguous with existing District facilities? From a management standpoint, it's desirable to have your - to have your infrastructure and areas that you are responsible for contiguous. We have employees out there driving tractors around, and you don't want to have them 20 miles from away from each other. Page 22 of 51 115 123 134 152 [Setty] So looking at that, we have - all of these kind of come down to, is this capable of - is this property suitable to allow us to bypass Harvey Place Reservoir in the event of an emergency? And or will it require large pumping infrastructure? Basically, I think what we can say is that any of these properties could satisfy most of our needs if we wanted to build enough infrastructure to pump the water there and pump the water away from there, and build new dams. But we're not down there to build a new system, we're down there to optimize the one we have. [Setty] So looking at the conclusions of the evaluations is that the Heise property meets most of the needs. In fact, it meets all the needs except for planning beyond 20 years, and that's just because we really don't know what the state of affairs is going to be beyond 20 years. We've shown where the rest of the properties are really too small to handle both emergency facilities and land application sites or to compensate for the loss other land application sites. Other properties are not nearly as ideally located as the Heise property. The Heise property is located directly to the north of Harvey Place Reservoir. You can step off District land onto the Heise property. No other properties offer the water rights that are available for the continued support of Indian Creek Reservoir fishery. [Setty] So looking at the Heise property, 1,440-something acres of which, approximately little over 900 of it has water rights, has been historically in agricultural production. You'll notice to the south - this is Harvey Place Reservoir right here. This photo wes taken last April. The Millich Ditch is a decreed conveyance from the same point of diversion as Snowshoe Thompson No. 1. It currently conveys water to the Heise Ranch and to the lower Dutch Valley or the Indian Creek below the Heise Ranch. Snowshoe Thompson is located here, and then turns to upper Dressier. Snowshoe Thompson conveys the Heise Ranch water rights or from the point of diversion of the Heise Ranch water rights. And you can see where it is fairly close to the - fairly close to the C-Line. The benefit of that is that this piece of land right here is the Schwake property. Therefore, water could be conveyed from the C-Line to the Heise Ranch without having easements across other people's properties, The District would own all the land under the convey- ances of the recycled water. [Setty] So looking at- ! have several slides just kind of discussing some of the features of this, and it's capable of handling all our flows in year 2021.6,400 acre- feet plus our 20%, which is 1,280 additional acre-feet. And we can do that through various means, but we can demonstrate where we can utilize 100% of the District's recycled water production in the year 2021 on this single piece of property. It provides the District a long-term application site. Currently we - the District does not own any of its application sites. They're all by contract on private land. This would provide the District an opportunity to have a long-term application site that would have secure ownership. Page 23 of 51 162 180 193 205 213 [Setty] It contains water rights for the continued support of Indian Creek Reservoir. It also has some natural landforms that offers some buffers between private entities and recycled water application areas. The other benefit of that is that it's largely bounded by lands that are governmental lands, largely BML lands, which would be non-developable in the future. It has very suitable soils and topography for all of the needs that the District is looking at. And it's really as ideally suited for an emergency disposal site as one could hope. It's within rock throwing distance of the C-Line, the Harvey Place Reservoir, and the Diamond Ditch. It's capable of receiving water as I mentioned, directly from C-Line and Harvey Place Reservoir. It has large - it has 340 acres that are located - perfectly located to be able to be fed by gravity from Harvey Place Reservoir. The slopes and the soils are suitable for both irrigation in terms of flood irrigation or sprinkler irrigation, so it would allow for a multitude of application technologies to be employed. [Setty] And as I mentioned earlier, it has the water rights associated with the continued support of Indian Creek Reservoir. The location of the Heise Ranch being adjacent to Harvey Place Reservoir, so that - excuse me - it allows for the consolidation of District infrastructure. I think it's an important aspect to realize that the District operates the recycled water facilities in Alpine County with fairly limited staff, and had we had infrastructure spread all over the County it would be very difficult for a limited staff to do that. So the consolidation of these potential infrastructure components is an important aspect. [Setty] C-Line export line, as we've mentioned, is directly upstream. _It can be gravitied down to it. Existing conveyances - because it exists on the Heise Ranch and that's largely because it has been irrigated for so long, there are conveyance ditches out there that are opened ditches. There are also structures - many of them constructed by the District for the movement and the diversion of water on the ranch itself. And this can provide emergency storage during interrupted operations in the Diamond Ditch. Meaning that we can - we can handle our water- we don't have to shut down the C-Line if we had a problem with the Diamond Ditch or Harvey Place Reservoir, as where that may not be true today. [Setty] Looking at the overall topography of it, we have approximately 87% of the 1,400 acres would be usable to the District. The remainder would be used in buffer areas again - buffering public from recycled water activities. The flat slopes are conducive to the constructed wetlands and infiltration basins that we've been investigating as portions of the Master Plan. All of the area could, receive water directly from the C-Line. We can even do that under pressure if- which would be a great advantage if we were to go to a sprinkler application system. [Setty] Most of the property can receive water, as I mentioned, by gravity-- meaning we have one ditch there that has a Iow enough slope that we can Page 24 of 51 220 228 236 247 261 essentially could reverse the head in the ditch if we need to, or we could put a pipeline in and deliver- use the head in the reservoir to deliver water without having to pump it. Therefore, we could get water to an emergency disposal facility even if we had no electricity at the site. [Setty] This property is also up gradient of the other properties that currently receive recycled water. Therefore, water that could be temporarily impounded on this, could be then transferred back to the Diamond Ditch and moved on to downstream users. This also allows us the opportunity to potentially use wetlands or something to treat the water to a higher - to an essentially to a lower nitrogen content prior to the land application on other sites for the continued protection of the groundwater. [Setty] This is a slope map generated from a geographical information system. And what we're looking at here is that I've taken a topographically map and I've classed it into a 0 - 5% slopes, 5 - 15%, and greater than 15%. The very dark point here, being the greater than 15%, this color here being the 5 - 15%. So as you can see the large hill is really the only piece of land that is not very useable to the District. That and there is some small pieces of land along the perimeters of parcel. [Setty] The soils on the Heise property are A and B type loamy soils. There's a kind of a mixture of soils down in the area that's termed the "jungle," which is the northwestern portion of it, which are much - some of them are type C - C soils, more of a gdtty than consolidated alluvium, very highly porous, conducive to infiltration. The soils on the agriculturally modified portion of the ranch in Diamond Valley itself, have fairly good infiltration rates, 0.3 to 0.6 feet per day. Over the majority of the soils information that we have out there, shows that our infiltration on these parcels of land are on the upper end of that range, closer to 0.6 than to 0.3. [Setty] As I mentioned, we have alluvium and decomposed granite in the western portions of the ranch, which are desirable for infiltration basins or emergency disposals, depending on what the regulatory allowance would be for those type facilities. The historic nitrogen loading on this property is lower than on some of the others. The Ace Hereford Ranch has received recycled water for quite some time, therefore, we have an ambient nitrogen loading in the soils which is higher. What - why that is important, is that because these are essentially fairly clean soils, from the standpoint of nutrients, it allows the District to undertake operations in there that will provide very strong assurances that groundwater will not be contaminated, because we can have a crop type and soil type and an application rate that are all commensurate with groundwater protection. [Setty] This is a - this is the same photo that we've been looking at with the SCS soil map laid over the top of it, and you can see our A and B type soils. This small Page 25 of 51 270 282 289 sliver over here is type C - I think it is a type C4 soil, but - all the same, what this is demonstrating that we have large - large areas of fairly uniformed soil types, which are conducive to the needs of the District. [Setty] Potential uses that we've looked at in the Master Plan might look something like this. The bottom portion termed emergency impoundment is that area or represents 340 acres on the ground. This would not be a - we're not talking about a puddle, this could be irrigated pasture land with an impoundment around it. With a crop type selection that would be conducive periodic inundation. The remainder of the land could be left as is in the normal production-it's historic production until such time that development on other contract lands require the use or application of water on this land. So it allows for that future flexibility that the District desires in its Master Planning. [Setty] Areas over in the northwestern, this is was is termed the "jungle". Over here its an area of the alluvium and granitic soils, it's actually about 80 feet below the rest of the ranch, down in the lower portion and it's not in Diamond Valley's watershed, it is in the West Fork watershed. But the soils down there are very conducive to rapid infiltration basin-type recycled water disposal. [Setty] So looking at -just to kind of sum up what we've been talking about here, that this property really ... Note: At this point, the rest of tape 2 a. was taped over when the taping error occurred. When taping on side b. the tape switched over and began taping over side a. Since a portion of discussion is gone, the next part of the discussion can be found in notes taken during the meeting from the Board Clerk and the Customer Service Manager (included as Attachment A and B). After attachments are read, read transcript pages 37-44 (sections 0341-366) here. Note: The following section 290 - 764 was supposed to be on tape 2 b., but when the tape switched to 2 a., this portion taped over the missing sections as described above. 290 [Wallace] I was requested to, by Mr. Robertson, to allow him another question or comment, and I consented to that because - as of- as I said earlier we want all the information on the record so that we can deliberate and make our decision. 295 [Robertson] Fair enough. Thank you Mr. President. The question I have is - it's unclear both from the documents and the presentation so far, what would occur to the lease that's on the property that still has a couple of years left to run. I haven't seen anything that would indicate whether the District intends to terminate that lease if that property is condemned or not. And so - I don't know the answer to that, Page 26 of 51 301 308 308 309 310 310 310 311 312 313 313 313 316 316 317 318 319 32O 320 [Robertson] but if the Distdct does intend to terminate that lease rather than honor the lease, I just want to add to. my list that we would object on behalf of both Heise and the tenant on the basis that Government Code Section 7267.8 has not been followed and also the other Government Code Sections that discuss compen- station to displaced persons. [Mosbacher] May I ask a question? [Wallace] Certainly. [Mosbacher] Mr. Robertson, have you given this District that lease? [Robertson] Yes. [Mosbacher] I haven't seen it. [Robertson] It was given to the appraiser and was in the appraisal. [Mosbacher] Oh--- it was given to the appraiser, but not to the District. [Robertson] Well, the District has a copy of the appraisal. And we provided the lease to Mr. Kvistad. Yes. [Mosbacher] Do you have it? [Kvistad] Yes. [Mosbacher] Okay. Because I don't know what's in it, so how can we say anything in reference to the lease, when we haven't seen it? [Robertson] Well, I don't know. That's why I raised the point - because nobody ... [Mosbacher] I don't know what it says. [Robertson] ... because nobody has mentioned it so far and I just wanted to bring that up. Thank you. [Jones] I just have one more question. When you introduced yourself, you said you were representing Weaver, Schnieder? [Robertson] Yes. Those - Weaver, Schnieder are the lessees. [Jones] Okay. I'm - that's it. [Wallace] Okay. Yeah, I understand a little bit lease law and what condemnation Page 27 of 51 324 325 327 329 333 333 336 336 337 337 can or cannot due depending on the clauses that are in the lease. Okay, in order to keep things moving along. Did you have anything else? [Robertson] No thank you. Not at this time. [Wallace] Then I would ask our staff to - I would like some follow up and some responses from our staff on this issue. Would any of you like to speak? [Kvistad] You might check first to see if there's any other members of the public who would like to speak. [Wallace] Okay. I would - are they any other members of the public who would like to speak? Seeing none, then I will move to the next item as I had set out before, and that would be the staff follow-up and responses. I assume that there are some. [Mosbacher] We don't have that lease in any of this legal description? [Kvistad] No we don't. That was provided us, as Mr. Robertson said, by him, and it was considered by the appraiser in the appraisal. [Wallace] And I remember seeing it in the .... [Kvistad] It is included as - in the addendum to the appraisal. [Mosbacher] Okay. [Wallace] Go ahead. 338 345 346 348 348 351 [Kvistad] In regard to Mr. Robertson's comments, we have been working diligently, and I think everybody in good faith, trying to reach an agreement for acquiring this property. We've had a number of meetings. Exchanged documents. We're still waiting on one appraisal that he, Mr. Robertson, is having prepared. That one... [Mosbacher] When did we get our appraisal? Can -- do you even remember? [Kvistad] It's been done for several months now. And that was provided to Mr. Robertson after it was completed. [Mosbacher] So, two or three months we've had ours? [Kvistad] More than that. I forget the exact date. Does anyone remember? [Mosbacher] How long did ours take? Do you... Page 28 of 51 351 362 [Kvistad] It took several- a few months, so like I'm going to say four months -- three or four months. We had always approached, at your direction, to acquire the entire property. You are not required to look at it segment by segment. What you are required to do, is any property that the District desires to acquire, must - must be a public need for that. A public purpose. And when the District looked at this property, with the use of its consultants, it identified a use and a need for the entire property. [Kvistad] Mr. Robertson, during negotiations - we initially started with discussions about the entire property. He then tried to segregate the property between what he - two terms he uses, the bottom land and the jungle. And attached different values to that, and was trying to, as he said split - what he wanted to do was to sell one part to us first then see if we could negotiate and reach agreement on the other. We always made it very clear to him during those negotiations, that we wanted and needed the entire property. We had a real need for the entire property. 375 [Kvistad] Mr. Robertson has also alluded to that the necessity for that public use has to be now, immediate. In the common sense of that word, that is not true. It has to be within a reasonable period of time. It doesn't mean that as soon as we require property, we have to go out there and start applying water to it. It has to be put to a public purpose within a reasonable amount of time. And- we're using the Master Plan for that process, to develop the uses and how that property would be used. However, there are uses that we - the District had identified prior to starting the Master Plan. There were some - and Matt Setty will discuss those in a little bit. 389 397 [Kvistad] But there were some uses identified for that property before the Master Plan, and regardless of whether the Master Plan goes forward or not, or if it's tied up in litigation as was suggested by Mr. Robertson, there is a need for that property, and Matt Setty will address what those are. [Kvistad] So while the property is a component of the Master Plan and the intent of staff as far as recommending to the Board, that the Master Plan - any component- arrangement be - include the Heise property, that it still is necessary apart from that. Mr. Robertson indicated that he has filed a lawsuit in Alpine County on your action - challenging your adoption of the Negative Declaration for the environmental review that was done on the Heise property.. If that is true, and I believe it is, I - we believe that he has filed in the wrong county. And if that - and if we are correct, the Statute of Limitations would bar him from refiling that here. So we think that is a non-issue. Even if he is correct, you can still make the finding - that lawsuit is challenging your action at the November 1st meeting. That doesn't mean that action is invalid, it could be invalid if he goes through and is able to prove that it - and gets a court ruling that your action was inappropriate and violated CEQA. A/)sent that, you have the right to proceed with this acquisition because you did follow OEQA. Until that is shown to be incorrect, you are allowed to proceed with that. If he is correct, and you did violate CEQA, then you would Page 29 of 51 431 455 474 488 498 have to go back and redo everything. [Kvistad] The appraisal that was prepared and presented to you by Johnson-Perkins, is done by a recognized, licensed appraiser that is an expert in the field of appraisal. As a Board you are entitled to rely on that appraiser's expertise. You're not - you don't have to go out and second guess and check to see what everyone else might have thought the property is worth. You're entitle to rely on that appraisal. Although I think they are irrelevant for this proceeding, the comments about the appraisal being incomplete, not considering a number of different things, is I think entirely inaccurate and misleading. We have had discussions with Mr. Robertson on some of these items in the past, and pointed out to him where these items were considered. And based on the staff's discussions with the appraiser, this appraisal is complete, and if you recall, the appraiser came here and gave a presentation to this Board on the appraisal. [Kvistad] Obviously, Mr. Robertson has a difference in opinion as to the value of the property, but again, that is not a subject of this hearing. He can make his record, which is fine, but it's not - we're not talking about value here. That - the value will be determined, if we can't reach an agreement through negotiation, and if the District - if the District adopts this resolution and then later on, if we can't reach a negotiated price, authorizes commencement of an Eminent Domain action. It would be determined at that point through a legal proceedings. All we're doing here is making the basic findings for us to proceed with implementation of a lawsuit if the Board later on decides to that. [Kvistad] I find it - I guess I mean - Mr. Robertson can say what he wants about me and whether I'm dishonest or is deceiving to him, but the fact is, we had discussions regarding price all over the board. We had discussions about the one firm offer we made, on the $4.85, and when that wasn't acceptable to him we discussed a number of ways trying to figure out we could reach agreement. One of the discussions we had was some additional compensation. But that compensation was not for the property, that additional compensation was to avoid the cost [Kvistad] of proceeding with any other litigation or anything else, so we would not have to go through that - this process. And if we could - and the Board is entitled to pay for other things that if it's a negotiated price and it makes sense as far as not having to avoid litigation, you can offer - you can pay more than that. But the fact remains, and it's always been told to Mr. Robertson, the price of the property, the appraised value, is $4.85 million, and that's the fair market value. [Kvistad] The fact that we discussed additional numbers, we never said that the property is worth that, it was to avoid having to get involved in a fight, proceeding and doing the things that we are right now that cost the District money. And to do a - we had to hire a consultants, do environmental review, and it looks like if this Page 30 of 51 thing goes forward, he'll fight this in court too. And you're entitled to offer money to avoid - having to avoid that. But it was - we never said the property was worth more. 513 [Kvistad] I guess the bottom line is we didn't do anything illegal. Mr. Robertson indicated that there were multiple procedural violations. I don't see that here. The appraiser took into account Mr. Strohm's offer for a small portion of what is termed "the jungle". Again, this whole discussion is really irrelevant to this proceeding, but given that it was brought up, I just want to make the record clear that Mr. Strohm made that entirely on his own, independent of any action from the Board. In fact, no one even knew he was making it. I think everyone here and staff was surprised, and I think Mr. Strohm, as I understand it, was surprised that it was even the property we were considering acquiring. 534 556 [Kvistad] I'm not going to go into all the issues that Mr. Robertson raised, points he made about the value of the jungle and what it's worth and not worth, but to say he didn't sell it. He hasn't sold one parcel yet for what he wants, on behalf of Mr. Heise - Mr. Burr. And the fact that some citizen, although be it someone who is maybe married to real estate person, is a contractor, has nothing - it's not relevant to value. You would not be entitled to rely on that type of person setting the value of the property. You have a fiduciary duty to this District to rely on experts in arriving at the value. And those experts, in this case, is Johnson-.Perkins, who is more than qualified and prepared a very very complete appraisal. [Kvistad] Mr. Robertson also indicated that we have not established any use for the jungle property, what he terms approximately 250 acres. That is not correct. And Matt Setty will address that also. Mr. Robertson also indicated that we reached agreement, that is in fact not true. We never reached an agreement because we could never agree on any way to acquire the entire property. When he split the property up into the negotiations, we thought that might be some way to get a partial agreement - if we can get some agreement on portion of it, then we can 572 [Kvistad] maybe focus and reach an agreement on the other half. it was not done by us. We didn't select that. We were always trying to buy the entire property. He is the one that divided the property up and tried to sell only a portion of it to us. 578 [Kvistad] We - and we're always very clear of that way - all of our correspondence references that we want the entire property. But we were doing this - we threw out several different alternatives trying to reach an arrangement where we could agree on the price even, through an appraisal method. We were close to value on the bottom land, and we said if we - if we can get some method, not even saying what the price would be for that, but if we can agree on some method and the solutions, some of the solutions we threw out was using independent appraisers, both sides hiring one appraiser, hiring a third; come up with appraisal process that's independent, that can't be controlled by either party, and use that to set the value. Page 31 of 51 593 [Kvistad] We tried a number of those arrangements and nothing worked. They would not agree to anything along that line, and that's when they fell apart. We never tried to strong-arm them. 6O6 [Kvistad] The last issue that Mr. Robertson brought up concerning the lease, that - the determination on how that would be handled, will be done after this. At - if we're unable to reach agreement that will be addressed in a compliant that would be filed in court commencing an Eminent Domain action to acquire the property. So that's not - not a relevant issue at this hearing. 619 [Kvistad] I think those are all the points I wanted to respond to. Now I'll turn it over to Matt and then to - I don't know which one of you guys want to go first. 624 [Setty] I've been asked to clarify a couple issues specifically regarding the land use of the Heise property. The first issue I think I want to clarify is that we were aware of needs prior to the inception of the Master Plan. And in no way does the Master Plan dictate what the needs are. We know we have certain needs and we'd get in our attempt-- at least Kennedy/Jenks' attempt here, has been to fold those needs into a Master Plan. But the Master Plan does not predicate the needs. We have, now granted some of those needs were prior and some of them - the other needs were developed as a result of planning during the Master Plan phase. 640 [Setty] We have -we've demonstrated we when we're looking lands out there, there is reference made to that we're swapping land that we are currently putting on recycled water on for Heise property, and that's not the intention at all. The issue is that we are - we have in the past, and we are going to continue in the future, to lose recycled water application sites to development in Alpine County. And that's a simple fact. We have had land that once received recycled water that 651 [Setty] became developed as part of the ranchettes, it no longer is capable of receiving recycled water. And that trend is going to continue, especially in light of current regulations. We also show the need that yes we do need water - need water rights for support of Indian Creek-- the Indian Creek fishery, and the obligations the District has in addressing the TMDL on Indian Creek. 660 [Setty] It is true that the Heise property is ideally suited for the emergency impoundment facilities. However, the portion of the property that I showed in my slide is not the only portion of the property that could be used in that, there's portions of the jungle that are very well topographically suited to impoundment. There's also - one of the reasons that makes that portion of the Heise Ranch so attractive is that it does have very deep alluvium, very high infiltration capacities. And in the future when we need a higher use rate in a particular piece of land, that's the type of technology that the District's going to be forced to turn to in order to dispose of a greater amount of water in a smaller amount land. So the - it's the soil characteristics and topographical landforms that make the jungle portion of the Page 32 of 51 687 700 722 744 745 759 76O 761 761 762 Heise property desirable for use by the District. [Setty] You know I don't think I have really any more other than to say that we can adequately show that we uses for all the land associated with the Heise property, and it's not an issue that we're going to need it tomorrow, but we will be needing it here, and we can plan for those needs today, because we know those needs are coming. [Bird] My comments are a little different just because I operate the Alpine County facilities. I guess my comments are, there are uses of the property regardless of the Master Plan - Master Plan or not, I still have problems. We have to have an emergency disposal facility that operates and is sufficient. We need water rights for Indian Creek Reservoir. We need additional lands for recycled water application. We're not making it now. We need a place to treat the Indian Creek water outflow. We can't flush that down Indian Creek without treating it or we're just moving our problem into the next water body, because we have to treat that water prior to it entering Indian Creek. [Bird] And on a separate issue, I look at what Mr. Robertson talked about the Heise property, and he has had multiple offers. He's got gifting to the tribe and this and that. One of the big issues we've been looking at in Alpine County is all these large ranches are getting split up. We're losing that ranch land. And if Mr. Robertson's right, he's doing exactly what we're fearing with - in the whole system, is, if we don't acquire the 1,449 acres now, there won't be 1,449 acres to acquire later. It's the compounding the problem that we're facing throughout. So, that was just my general comment. [Wallace] If all the staff's done then... [Mosbacher] I can ask - Hal don't leave yet. In our meeting yesterday, and Bob help me remember this that I've got it right, because I'm not always good with these numbers. But, don't we right now with the land the ranchers allow to be irrigated, not have enough - we needed - that was something like 4,300 we needed or 4,900 and we needed 5,200 acres. Those might be the wrong numbers - but we need... [Bird] We do need - we do initial... [Mosbacher] ... more acres now, not 20 years from now... [Bird] Correct... [Mosbacher] ... to put the irrigation water on. [Bird] Correct. Page 33 of 51 763 764 TAPE 001 001 001 OO2 003 O03 004 004 006 015 [Bird] To meet - to meet our ... [Mosbacher] I mean, even if we continue contracting... END, TAPE TVVO, SIDE A TWO, SIDE B [Mosbacher] ... there won't be enough rancher land that we now contract with... [Bird] Correct. [Mosbacher] ... to put it on. [Kvistad] Actually that was a very good question, and I was just talking to Matt, there was something else we had discussed... [Mosbacher] Matt will know the numbers... [Kvistad] He was going to make a present - he was going to make one other point, following when Hal was done. That'll actually will directly address what you are saying. [Mosbached Okay. [Mosbacher] Luckily I paid attention in the meeting because I picked up on that. I didn't know if Bob picked it up but there is ... [Setty] Well Mary, we've had this conversation quite a few times in different formats. Our situation right now is that we don't have enough land for all the water we're producing. To put it on the- to put on the land that's under contract at a rate that's commensurate with groundwater protection as defined in the Clean Water Act. So, our own - we've come up with these -- our operating rules to say that we also need 20% capacity for fluctuations, for hydrological events, for increased production in the land - in here for- I mean you might have a wet winter up here and have greater I & I on your own system, and therefore, have greater production of export to Alpine County. [Setty] So what we're currently sitting at, is that our peak numbers today run about 5,200 acre-feet. We have about 5,135 acre-feet of land that can possibly put - be put on contracted ranch land. Okay. So we're right at the skinny margin of being able to stay with in regulatory control today. And that skinny margin kind of comes out with the fact that we're losing some water to evaporation in the reservoir over the winter. Page 34 of 51 020 [Setty] Our production numbers in the 20 -year 2021 are going to be 6,400 acre- feet. Now the rate of growth, we could- we could essentially be over - we could essentially produce too much water for the amount of land that we have, you know theoretically next year. It might be two years. But we're still way under what we have for our 20%, we don't have 20%, we hardly even have percentage of any land as an emergency or as flexibility in application practices out there. So we are right at the limits of what we can do from a regulatory standpoint today. 028 [Mosbacher] We're not counting emergency. Just ... 029 [Setty] rm not -- No I'm not counting ... 029 [Mosbacher]... just day to day ... 029 029 [Setty] ... that's not counting - day to day. [Mosbacher] ... we really don't have the land for the water that we need to disperse? 030 [Setty] That's absolutely correct. Today we currently have a need for ... Note: Beginning at this point, pages 36-44 (tape numbers 004-326) should be inserted at Page 27, after attachment A & B. ~ sections of tape. This is the conversation that took place after the 031 O45 054 [Robertson] Back in January of 2001, Mr. Strohm and his wife actually made a written offer to purchase a portion of the Heise property. We value the jungle area at between $8,000 to $10,000 per acre for those approximately 250 acres. Mr. Strohm apparently agreed, because Mr. Strohm and his wife offered to pay us $8,000 an acre to purchase 40 acres of the property. And that was their initial offer. We then countered, I believe at $9,000 per acre, and also told Mr. Strohm and his wife that the 40 acres they wanted to acquire was not in a configuration that was acceptable to us. We wanted a different configuration for the property. But that we were wiling to sell property to Mr. Strohm and his wife for $9,000 an acre if we could reach an agreement on the configuration of the property. [Robertson] At that point, the negotiations broke down, apparently Mr. Strohm and/or his wife did not like the configuration we had created or perhaps were not willing to pay $9,000 per acre instead of $8,000 per acre. But for whatever reason, this transaction went by the wayside. Our counter offer was not accepted. Shortly thereafter, the District identified this property as property that it was interested in purchasing. [Robertson] What is most troubling about that, besides some, what we would hope would be coincidences of timing, is that when the District turned around to make an Page 35 of 51 O62 072 O80 09O 098 offer to us, the District offered us less than half of what its Board Member thought the property was worth. In other words, the District indicates that they believe, or that you folks believe, that the jungle is worth $4,000 per acre. Yet only a few months ago, one of your own Board Members was willing to pay us $8,000 per acre. That's strikes me as quite troubling. [Robertson] We have specifically asked that the appraiser look at the values of the property not on a large scale but on a small scale. And so your own appraiser came up with a value for the parcel that effectively Mr. Strohm would have been purchasing. And your appraiser determined, for whatever reason, that the property was worth $4,000 per acre. Now we've had other offers on that property in the same range as Mr. Strohm's offer, and I suggest to you that it is pretty obvious, isn't it, that there's a problem with your appraisal. You've got you own Board Member whose wife's a realtor, offering twice what your appraiser is saying the property is worth. [Robertson] Now if you folks really believe in what I heard Hal saying, and Mr. Setty saying, that you're here to be fair to the people in Alpine County, then you'll continue this hearing today and ask Mr. Kvistad to explain, or the appraiser to explain, and perhaps it's best that it occur after you receive our copy of the appraisal, explain how it is that your own Board Member whose wife is a realtor could think the property is worth twice as much as the appraisal. Something is not right here. [Robertson] And I suggest to you that there are multiple reasons why the appraisal is erroneous and I have indicated some of those. Another point that needs to be made is that the jungle property has no water rights, and so although we were willing to sell you the property that has the water rights, and the property which Mr. Setty indicated would be needed for the emergency disposal, and the effluent irrigation, we were not interested in selling you the property that is up above that. And which Mr. Setty indicated might be used for some sort of containment area or a settling pond or something. [Robertson] The real problem you have here is that you're trying to condemn multiple parcels under one Resolution of Necessity instead of considering the parcel by parcel. And what I'm suggesting to you is that's improper legally and improper factually here, because the jungle is a much different piece of property than the bottom land. The jungle is zoned one acre residential and five acre residential. It is a residential area. It's a highland made of ridges and it is not - you've probably seen the property - it's not like the lower land, where you would have a good basis for effluent application. [Robertson] So, it's important for you today to ask that question. Have we established necessity for the jungle apart from the bottom land? Because that will be a critical issue in the future. And if you have not established a necessity for the jungle, because it has no water rights and is really not appropriate for effluent Page 36 of 51 109 118 122 134 147 application. If you have not established a necessity for the jungle, you need to direct our staff to go back and indicate to you why you cannot just acquire the bottom land without the jungle. Because, as I previously indicated, we at one point in time had reached an agreement on the bottom land. Now obviously we're not prepared to honor that agreement today because Mr. Kvistad reneged on the agreement - I11 get to that in a minute. [Robertson] And that agreement was to sell the bottom land for $3.97 million. Our appraisers now say that bottom land is worth about $6 million, so we actually appreciate Mr. Kvistad reneging on that. But, the point is, the jungle should be considered separately from the bottom land. The jungle is where the problem is with Mr. Strohm. The jungle is where all the property value is for residential development. The jungle is buying property you don't need at a price that is much higher than you need to pay, roughly double the bottom land, for an area that you don't need for effluent application. [Robertson] Most troubling and difficult thing I have to say is - is this. At the time we reached the tentative agreement for the sale of the bottom land for $3.97 million, Mr. Kvistad said that he had to confirm that with the Board. We had subsequent meeting about a week and half later. He indicated that the Board [Robertson] had agreed to pay that much for the bottom land, but that the Board was not willing to purchase the bottom land without also purchasing the jungle. I inquired as to why. If we can reach a deal on the bottom land, why aren't you buying the bottom land and then we'll deal with the jungle. Mr. Kvistad said that the Board will not do that. I said why? And I pressed him and pressed him, and finally Mr. Kvistad, with Mr. Johnson present in the room, made the following statement: "The Board does not wish to purchase that land from Mr. Burr because the Board is concerned that if Mr. Burr then has $4 million dollars from the sale of that property, he will use that money to fight us on the jungle." [Robertson] Now, I don't know if that was the Board's reasoning, that's just what was told to me, but I want to suggest to you that that's a very, very, serious accusation. It is a violation of California law to take any action, coercive in nature in order to compel an agreement on the price to be paid for the property. When the Board and Mr. Burr reached an accommodation as to the value for a portion of the property, it was illegal for this I~ard to then say we're not going to pay that much because we want to stranglehold Mr. Burr so he cannot fight us legally. Because the Board, as I'm sure the Board is aware, and is Mr. Kvistad made clear, Mr Heise, although he is very land dch, is cash poor, and does not have a lot of money to engage in a multi-year, half-million or million dollar, legal battle. [Robertson] Now, we believe that through our arrangements with the Indians and other arrangements, we have now remedied that situation, so that - so that there are resources available to engage in a lengthy legal battle. That's not our desire, never has been. We just wanted you folks to agree to pay the same price that your Page 37 of 51 Board Member thought was fair. But - but nonetheless, we believe it was a violation of Mr. Burr's civil rights and a violation of the Constitution to try to stranglehold - to hold one portion of the agreement open in order to try to coerce a lower price for the jungle. 159 [Robertson] I think the most compelling argument I've heard here today for necessity relates to water rights. It sounds like you have an immediate need for water rights, although your Negative Declaration a month ago indicated that there would be no change in the use of those water rights until the Master Plan is completed. But, even if you can get - even if we can establish, as I believe we can that there is no necessity to acquire the Heise property at this time for effluent application. I do think you have a need for water rights, and one thing perhaps we do share in common is our love for Lahontan, who I deal with quite frequently as well on multiple other issues, and I understand how difficult they can be. The water rights, however, are all in the bottom land. So again, there is no evidence of necessity for the jungle because there is no water rights there. So in summary, I'd like to say that if you choose to adopt the Resolution of Necessity today, which I 181 [Robertson] fully expect you to do, I have made my record. I believe your Resolution of Necessity will ultimately be overturned by a court of law for the reasons I have set forth. And then we will start the process over. In the meantime, we will abide by our words and provide Mr. Kvistad a copy of the appraisal that we are preparing, and we will be in a much better position to be flexible in our negotiations with you folks. If you can wait until April to bring this Resolution of Necessity so that we've had time to get our appraisal in front of you folks, and to discuss it some more. We personally take a little bit of affront at being sued for condemnation here before we have even had a chance to prepare our appraisal. Thank you. 193 [Wallace] We'll see if we have Board Member questions of Mr. Robertson. I have two or three, and I'm going to leave most of our - our follow up to the members of our staff who more familiar with some of the tenants of the law and things that you have brought forth. But I had a couple of questions. Who are the appraisers you selected? You have two appraisals being done or one? 200 [Robertson] We have one appraisal being done by two different appraisers. The reason we've hired two is because we wanted to hire appraisers, unlike the District, we wanted to hired appraisers who have worked regularly in Alpine County and in that area, and so we have retained two appraisers because we think those two appraisers give us a little better, stronger appraisal, because they each bring different things to the table. It was hard to one find appraiser who has a tremendous amount of background in the Diamond Valley area who we felt alone had enough credentials, so we've hired two. 2O8 2O9 [Wallace] And the question was who were they? [Robertson] We're - we'll provide a copy of the appraisal. Page 38 of 51 210 211 211 212 213 216 220 221 227 235 24O 241 [Wallace] And I was wondering who the water rights experts were? [Robertson] That will be included in the appraisal. [Wallace] So, they don't come readily to mind? [Robertson] rd just prefer not to say at this point until they've completed their process. [Wallace] And- and please excuse me, I'm a layman, and if I were to make an offer on property I'd do it as a layman. How do you know the price that you're going to arrive at if the appraisal is only 70% done so far? [Robertson] Through approximately two months worth of work, we have already identified areas that were undervalued, and we know that they were undervalued by at least $2 % million, and perhaps as high as $4 ~,~ million. But until we complete the process we won't know. [Wallace] The appraisers had told you that? [Robertson] No. The appraisers have said they do not have an opinion of valuation until it is completed. What I have gathered from their comparables that they have prepared and obtained and looked at, which were not relied upon by Mr. Johnson is that those comparables are approximately 50% or more higher. And that's just my guesstimate. [Wallace] You were right, sometimes there's things when someone builds a record, when an attorney has to build a record, and use all the words like outrageous and things like that, that there are things Boards like and don't like. And one of them was the idea that a private party, unbeknownst to us, whether they were a Board Member or not, had made an offer that I can assure you that none of us were aware of, or party to, or thought of as something that would be of use to the District. I mean, are you aware that private parties sometimes pay more or don't use appraisals? [Robertson] I'm aware that we have multiple offers in the range of what Mr. Strohm offered. And I am aware that the District is trying to acquire this property, I think through heavy-handed force at half the value for the property as to the jungle. [Wallace] Are you aware of the law that keeps us from gifting public money and paying over and above what we find in appraised value to be? [Robertson] I'm aware of that. And that why I appreciate that you folks are going to - and I appreciate and assume that you folks will take a close look at our appraisal as well as your appraisal in reaching any conclusions. Page 39 of 51 245 253 264 27O 272 278 278 280 280 284 [Wallace] I just had one more. This is really as a Board Member, because you know, as we were going through we felt like things were going forward in good faith, but it was actually one of the comments that you made that - that at our last meeting that I know from my part made me feel like there might be a necessity to move forward this way. And I don't know if you recall the comment, but the last thing you said was "We will never agree". Then you turned and walked away. And to me, that was 'we will never agree'. [Robertson] What I was saying is that we would never agree to the appraisal that has been made at $4.85 million. We will never agree to that because it's wrong, and we think there's very, very, substantial evidence that's its wrong. And I think the fact - you can try to gloss over the fact that one of your own members believes this property is worth twice the value that you've placed on it. You can try to gloss over that in this room, but I can assure that you court will not. I believe it's a very serious situation that has arisen, and I believe that Mr. Strohm's wife's a realtor, he is a reasonable person, you commended him for his years of service, he would not go out there and make an offer on the property that was not a reasonable offer. [Robertson] And I have seen or heard nothing, not in your appraisal, not in this presentation today, that attempts in any way to indicate why Mr. Strohm's offer and other offers that have been received in that range are wrong. The appraisal, even though we provided those offers to your appraiser, he refused to consider them or acknowledge them. He did not give any credence to those offers. [Wallace] Okay. Yes, go ahead. [Jones] I'm not sure he didn't give credence to those issues, I think a lot of those things were - were considered. But, a question back on the 40 acres that Mr. Strohm apparently made a proposal on, and ! want you to know that I have not discussed this with him and I did not know the particulars that you brought forward. How big is the jungle area? [Robertson] About 250 acres. [Jones] Okay, so he was only looking at 40 acres, specific configuration that you apparently didn't like? [Robertson] That's correct. [Jones] So, I mean, he was handing picking a portion that he was willing to pay more for or other areas maybe not worth as much? Or are you saying that every acre of that 250 is worth $9,000, or you think it is worth $9,000, or that's what you want? [Robertson] You know I think that we should wait, as I have encouraged you to do, until we receive our appraisal. But what I would suggest to you is ... Page 40 of 51 285 288 289 290 291 294 310 313 321 [Jones] But you brought these figures up - and you - this is like last time. I am a little confused, because you tried to intentionally mislead us at the last meeting you were at - are you trying to do it again this time or is that the way the lawyers... [Robertson] How did I try to intentionally mislead... [Jones] Well, at one point you were trying to tell us that the school property was landlocked, and we found that it wasn't. [Robertson] What I suggested to you is that I did not know for a fact that it was landlocked... [Jones] Well, okay, but let's - there were several other issues, but - but anyway I just wondered if every acre you thought was worth 8,000 acres or is that? [Robertson] I believe the evidence at the prior hearing show the school is, to a great extent, landlocked for available property and I stand - standby that statement. I want to make sure that is clear on the record because we are challenging that in court right now. But the next issue in response to your question - Mr. Jones, is that the appraisal that was performed for the District, valued land that was smaller, and typically smaller parcels gain a little - gain in value over larger, which I think is perhaps part of your point, that the District's purchasing a larger part - larger amount, District should get a District - should get a discount. But my point is that your appraiser determined that a smaller parcel, that was equally as valuable and immediately adjacent to the parcel that Mr. Strohm offered, your appraiser valued that at substantially below what Mr. Strohm's offer was without any statement in the appraisal as to why this property that is immediately adjacent, and a smaller parcel, would be worth less than Mr. Strohm's offer. [Jones] But this may have been a parcel that he was cherry picking, and trying to pick the best parcel and there are other acres - other acreage - other areas that may not be worth as much. [Robertson] I actually think to be candid with you that the jungle is pretty much of equal value throughout, with the exception of a small strip that borders the County yard, which might be worth a little less because it does border the County yard. But I don't think that the parcel Mr. Strobm made an offer on is - in my view it's - is of lower valuation than a substantial other portion of the property because it is right next to the road, and I think that a lot of people out there - some people want to be right next to a highway. Some people don't, they want to be a little bit back off the highway. [Wallace] We can - this was mainly for us to ask questions, and we don't need to get into a debate. And I'm sure that you didn't mean to either. It's just-- and you said you were say things that might - might anger us, just as your client is angered and going off doing something with the Indians to go around the process. So Page 41 of 51 326 [Wallace] we understand that. But we can assure you that we - that one Board Member acting on their own, in a private setting, does not constitute a meeting nor a majority of this Board. So, are there any other questions? Then what I would like to do is take a break, a well deserved break on all parts, and we'll come back and will have our staff answer any - if they have any comments or questions. So, thank you. [Meeting break from 4:50 p.m. - 5:25 p.m.] 334 to end of this tape is blank Note: It was after this break where the taping problems began. When break was announced, the tape was on 2 b. i pressed the pause button, which is normal operating procedure. After break I pushed pause again to resume taping. After a few minutes, I looked down and noticed the record light wasn't lite. Fearing that the proceedings were not being recorded, I pushed stop, and play and record. The record light lite, and the tape continued taping. What actually happened, unbeknownst to me, is when I pushed play and record, the tape automatically switched sides and began taping over the last half of tape 2. a. When the tape quit, I wondered how it filled up side 2. b so quickly (it should have ran another half hour or so) not realizing it had taped the over last part on 2 a. I figured there was a serious problem, so removed the tape, put a fresh one in (tape 3) and began taping again. TAPE 001 002 002 003 011 013 THREE, SIDE A [Setty] ... and that need is only to increase in the future. [Mosbacher] Now, can I ask one more question Mr. President? [Wallace] Yes. [Mosbacher] Thank you. While you're there Matt, you said something that I've always thought about, but I don't know if we've discussed it, I've forgotten and I am old so maybe I've forgotten. But you said something in your presentation about these lands being a buffer for what the District has and does, and isn't that jungle part - would the so-called jungle piece be part of the buffer that keeps us from impacting odor wise, or some -- perhaps groundwater-wise, or someway on development that exists now? [Setty] Yes, it's possible that portions of the - the bottom - the jungle portions of the property could function as a - as a buffer. However, there's probably a greater need to use those as rapid infiltration basins or something like ... [Mosbacher] Well I understood that that was ... Page 42 of 51 014 014 015 O22 O24 026 029 031 039 039 [Setty] My reference ... [Mosbacher] ... a type soil that you could ... [Setty] Sure. But my reference in the discussion, what I was really alluding to there, is that if you if you look at the irrigated lands on the Heise property. The Heise property is largely bounded by native vegetation. About couple of hundred yards, not a lot, but far well within the regulatory requirements for buffers around stuff. And it's really - it's a security issue, a mental perception issue for Alpine County people to know that they have some buffer. We're not required to have any buffer on land application provided that we're not spray irrigating. So, ails I was [Setty] making my point there is that the landform and the vegetation communities on the Heise Ranch are very conducive to natural buffers whereby we wouldn't have to go out and construct or fence or something like that. [Mosbacher] Am I right that there's development now north - I hope I'm right - north of the jungle portion? Isn't that part of the Indian colony? [Setty] Correct. There is a BA parcel to the northwest - to the west of the jungle portion. Correct. [Mosbacher] Thank you Matt. [Bird] While you were speaking I - one of the things that's going on right now is we're running at- we need every square inch that we've got with these contact ranchers. And these ranchers are having a hard time meeting their permit obligations. If for whatever reason, and Mr. Robertson alluded to - he doesn't have any great feeling for Lahontan, so he understands that Lahontan gives cease and desists to the smallest parcel we have - we don't have a place to go. We need something now. We don't need something ... O42 [Mosbacher] 20 years from ... [Bird] ... in the future. We don't have a back up plan right this second. And that is as an operational point, bothers me. And so I was just ... [Schafer] I am recalling that there was a timing issue too. If we have wet spring and they don't need the water when we want to release it, then we're causing a problem by having to release ... O43 O43 [Bird] Correct. [Schafer] ... when they don't need it, but we have to release otherwise we don't get rid of it in the right time frame. Is that not correct? Page 43 of 51 044 O5O 05O 051 051 052 057 066 067 067 068 068 069 069 069 [Bird] We've had - Yes, we've had to go to Lahontan and basically the ranchers were nice enough to let us force water upon them in the winter. People don't like irrigating in the middle of February. We've had that concern that the ranchers are saying we are forcing water upon them in times that they do not want that water. [Schafer] Right. [Bird] As I said, we are pushing the envelope real hard. [Wallace] Okay, any other questions of the staff? [Mosbacher] Thank you. [Wallace] I didn't have it on the agenda for Mr. Robertson to do a rebuttal but I saw him taking copious notes, so I'm assuming you want to get up and say something. If you don't, that's okay, you've certainly covered a lot of it - but if there's something else that you want to say, then please do. [Robertson] I think there's just one issue I want to bring up, and I appreciate the opportunity just because I think it's an important issue for everybody here, and I guess really I am requesting clarification more than providing you information. At the last hearing on the Negative Dec., with respect to the Schwake property, it was repeatedly stated, both in writing and orally, that there would be no use of the Schwake property that is different from the existing use of the Schwake property until the Master Plan's approved, and that was part of your decision making process that you didn't have look at any alternative uses, you were able to just say we're going to continue to use the ranch exactly how it's been used. We won't change the water rights, we won't change anything. [Robertson] Now what I heard here today is that there are other uses for the property outside of the Master Plan. Now, my question is ... [Wallace] Are you talking Heise or Schwake? [Robertson] Did I say Schwake? [Wallace] Uh-huh. [Schafer] Three times. [Robertson] Okay, I apologize. [Mosbacher] You mean Heise? [Robertson] I meant the Heise. Page 44 of 51 O69 070 070 071 071 074 076 076 O87 O95 O96 097 [Wallace] Okay, we're not talking about the property we purchased from Schwake in the past? And I can understand why ... [Robertson] I apologize. I represent both... [Wallace] ... we've got a little Schwake on the mind ourselves sometimes. [Robertson] Okay. [Wallace] But - but you're talking about - you're talking about the proposed purchase property that we're talking about, and whether or not we would - we have any intentions to change the use as it's currently used? [Robertson] Right. I apologize - i meant at the hearing on, I believe it was November 1st, where you adopted the Negative Dec with respect to acquisition of the Heise property. [Wallace] Okay. [Robertson] There was a finding made by this body that there would be no change in use of that property whatsoever, between now and the time that the Master Plan was adopted, and therefore, there didn't need to be any consideration of that issue, of any environmental consequences of change of use. So as I understand it, that's the situation. Until the Master Plan is adopted, the property can only be used in its current fashion, not for any additional uses that the District may have for the property. So, my point is simply to reiterate that until the Master Plan is approved, if it is, if the Master Plan's approved, that's when the need or the necessity is created. To condemn property before you have a plan that's been approved for the property, I think is putting the cart before the horse, and I just wanted to make that point. [Robertson] You can't use this property for anything until the Master Plan is approved. So why not wait till April, if the Master Plan is approved, then you have a CEQA approval for use of the property. And at that time it would be appropriate to condemn it. If you condemn the property now and the Master Plan is not approved for use of the Schwake - rm sorry the Heise land, then it seems to me that you have purchased property that you don't need. Then you'll have to turn around and try to get rid of this property, I guess, to try and use the other property that's actually approved in the Master Plan, if there is other property. So that's just my point. [Wallace] Mr. Heise does want to sell the property, right? [Robertson] Mr. Heise ... [Kvistad] That's irrelevant. Page 45 of 51 098 100 128 [Wallace] It's irrelevant. Okay. [Robertson] Mr. Burr. Mr. Burr does not - I think it's irrelevant - that's the best way to put it although... 100 [Wallace] I withdraw my question. 101 [Robertson] ...I think obviously Mr. - Mr. Burr feels pressured, I would say is fair, to do something with the property or be forced to give it up in condemnation. 105 [Wallace] Any further response from the ... 105 [Mosbacher] Can I ask a question? 105 [Wallace] Yes, go ahead please. You may have to come back... 105 [Mosbacher] May I ask Gary a question? Is that in order? 106 [Kvistad] Sure. 106 [Mosbacher] If the Plan is adopted and challenged by someone, but we as a Board have adopted that Plan, then a big flood comes and we have to release some water, can we do that to that property? In other words, if we purchase the property under whichever method, and we've adopted a Plan, but somebody challenges that Plan, but in our minds it's adopted and what we're going to do, and we have some emergency, can we use that land to help us through the emergency? 116 [Kvistad] You... 116 [Mosbacher] Is that a trick question? 116 [Kvistad] Well, let me answer it this way. Any use of the property until a specific project is identified for it, whether or not through the Master Plan, and with appropriate environmental review for that use on the property; any use of that property for anything other than it's being used for now, would - you'd probably - you would have - you wouldn't have the right to use it for that purpose, because you haven't gone through, for an example I'll use, since everyone loves Lahontan, I'll use that as an example-- but we do not have a permit to apply recycled on that. Before we can get a permit to apply, we have to identify the project, we have to get - do an environmental review on that project, and only after all that happens, and construction of the project can we put, legally put, recycled water on the property. [Kvistad] Now in the event of an emergency, this is probably not relevant to this discussion here, but just for your information, I mean the District would probably weight its options as to where are you going to put the water if you had to. Where would be the best place to put it with the least amount of injury - that would cause Page 46 of 51 136 138 138 147 147 152 152 153 the least amount of injury, not only to the District but to anyone else, including - and it could range from putting it in Indian Creek to dumping it in the river to putting in on the Heise property or any of the ranchers property that would be willing take it, if we could get it there. [Kvistad] So, I guess,. ! think the question is, you would be - we would not have the legal right to be using that property for that purpose until ... [Mosbacher] If it were challenged? [Kvistad] Right. Regardless of which, regardless of its challenge, until we actually - even if you adopt the Master Plan, you still can't put in on until you identify the specific project. The Master Plan only lays out what you can - the potential uses on how you might want to use that property. After - if and after you adopt the Master Plan, you'll then go through a process of implementing the Master Plan and doing specific projects as identified on the Master Plan. And you will do additional, supplemental environmental review for those specific projects. So I hope that answers the question, so ... [Wallace] There's a process that still has to be done... [Kvistad] ... Right. And so nothing is going to happen to that property, as far as legally being able to use it, until you go through that process. And I don't think anything has changed since our last - since the discussion on the Negative Declaration, as far as, there is no, no proposal to change the use at this particular time. We have to go through the appropriate process to do that. [Wallace] Okay. 156 [Mosbacher] Thank you. [Wallace] AnY other questions or comments before I bring-- before I close the Public Heating and bring this back for Board Member deliberations? Speak now or hold your peace. Of course, we're not getting married here, so ... [Mosbacher] Well, I don't know, you ask Chris Gansberg, this is all about weddings. Spelled with d's not t's. 158 162 [Wallace] So I'm going to close the Public Hearing and bring this back to the Board for your deliberations. [Note: Hearing was closed at 6:05 p.m.] Would any of you like to express your opinions on this before I ask for a motion, if there is one. [Mosbacher] Well, since - since I've chaired the committee that has been so deeply involved, it seems to me that for several reasons we need to move forward on this whole situation. We have seen development of ranch lands, and not even Page 47 of 51 because the ranchers want it, but their tax obligation sometimes forced them into these sort of things. And as that land diminishes, we need to have somewhere that in the future where we will be able to put that effluent, spelled with an 'e'. 173 [Mosbacher] And in looking and listening to everything that our consultants have told us, this seems the most appropriate place that we could be engaged in putting that effluent. And as we said a few minutes ago, we're already a little less land than we need right now, and as growth occurs, we will need to look at more land. And if this were to be developed, where would we look for it. So in order to protect a place for that, and do the best we can by the people of South Lake Tahoe and Alpine County, I feel that we need to adopt this resolution. And I would be proud to make a motion to do so. 185 [Wallace] We can do it that way or we can have your comments and then come back and if the motion's to be made, maybe will consider, or I'll tell you what, I will consider turning to you first on that. 188 [Mosbacher] Thank you. 188 [Wallace] Any other... 189 [Jones] I agree. I mean, when you look at the evaluation that's made of all the properties in this maxtrix, the Heise property is the only one that even comes close to meeting our requirements. We really don't have a choice. It's the only piece of property that can be used for what we need. I see no reason why we shouldn't go ahead with this. I think it's a good piece of property. It fits everything, and I think we're paying or offering to pay a reasonable price based upon an appraisal done by licensed appraiser, an MIA or - that's the term I believe. Somebody who is a real professional. So I think that, you know, we that we've got a good price, and we've got a piece of property that we need to move ahead on. 202 [Schafer] Yes. I share both your sentiments and I also go back to yesterday's meeting with the ranchers, and it seems to me that over the 34 years we've been dealing with them, they've had a number of concerns and a number of areas where they feel they have been able to help us out, not the least of which was taking the water when they didn't want to. 205 [Schafer] And it seems to me, if nothing else, that we haven't had an ability before to be able to do anything about the timing of helping them out and really avoiding that particular problem for them, taking that out of being a concern, being a problem, and being something that sticks in their craw, Hubert Bruns primarily, I think. But - and so, I would throw that into the mix, is that we just plain need more flexibility with what we're doing, and we don't have it right now. If we have issues we have to deal with then we'll move forward and deal with them. Page 48 of 51 - 215 221 233 243 255 267 [Wallace] Okay. Well I agree we most of your Board Member comments and I wanted to tell Mr. Robertson and your partner there that we appreciate you coming forward and raising the issues that you've raised. And we appreciate that our staff from the past and from other objections and things you brought forward have done a good job of addressing those concerns. [Wallace] My reasons are this. The first is emergency storage, and that has multiple reasons. One is timing, as Eric said, so I don't need to go into that. The other is these Lahontan TMDL's, and not that the TMDL's may be an issue, but the fact that MtBE and TMDL's and every other acronym you can think of, come out of the blue to a District. And - and so it would be nice to have the ability to react through flexibility and owning property that might in the future fit those needs. The proximity to Harvey Place Reservoir would save our ratepayers money, if indeed in some future time, we needed put the effluent or anything there. [Wallace] The ability to divert to that property perhaps someday, once a Master Plan has been adopted, prior to it entering the reservoir, and prior to it entering the Diamond Ditch, would protect, perhaps protect the ranchers of that area in case flooding were happening, in case there was something in our water that got into our water, that could get downstream. The water rights for Indian Creek Reservoir are . almost reason enough alone, and those are tied to the TMDL's and our desire to be a good neighbor to Alpine County, and to help create and maintain a fresh water fishery. [Wallace] The additional land application, including the jungle, which actually seems to be better suited according to what I've heard here than some of the other bottom land. Because the ranchers can't handle it all. Looking to the future, we would be accused of poor planning if we waited a year or two, given the way things take, the way-- it's just natural that people object. So if we didn't start now for 2008, in putting pieces of a puzzle together to protect our future and Alpine County's future, and fulfilling our obligations to be good neighbors and to - to not force things on their - on the ranchers, water at the wrong time or anything else. Then we would be remiss, so, it does pay to go forward. [Wallace] The other properties just don't fit our needs. If we're looking to the future we can't ignore the future. Master Plan or not, we can't ignore the future, we can't ignore that we have needs that are sitting out there waiting to be met. And even though we don't have a specific Master Plan adopted, most of the - most of the people who have sat in and looked at our Master Plan or potential Master Plan have recognized that the things we've looked at, and the possible' ideas, are reasonable. So it's reasonable to assume that we'll need property in the future. And the other properties simply don't fit what we and others have seen might need to be fit. [Wallace] Absent - absent a Master Plan, completely absent a Master Plan, I'm in favor of going forward with this purchase. I think a clear need has been Page 49 of 51 279 283 284 284 285 286 289 290 290 292 292 299 299 308 demonstrated for the future, and I'm satisfied that that has been demonstrated by our staff and our consultants. And so, taking into consideration all objections and reasons, I still believe that the preponderance of the testimony and information that I've received as a Board Member makes it clear that we need to proceed with this action. Wallace] So with that, if we were to make a motion, my question is whether the Resolution of Necessity has to be read into the record if that were to happen, and do we need to read the APN numbers? [Kvistad] You can simply refer to the attachment as the one you want to adopt. [Wallace] And that's been provided to the public? [Kvistad] Yes. It's attached to the agenda. [Wallace] Okay. [Kvistad] The only thing I would suggest, there's one - two changes we need to make to it. And I've noticed that it doesn't reference in the "Whereas" the offer for... [Mosbacher] Can you tell us what line that is? [Wallace] I can't hear you. [Kvistad] I'm - ! am have - on page - go to page 2, I want to insert it between lines 15 and 16. [Wallace] And put what? [Kvistad] I'll read the following: Whereas, on October 1, 2001 the District offered to purchase the property from the owner pursuant to Government Code Section 7267.2 for just compensation as determined by an appraisal prepared on behalf of the District. [Wallace] Professional appraisal? [Kvistad] No. Just an appraisal. The only other change I have is on page 3, line 7, and I believe it's the last sentence, starts with the owner. We had did/did not, we didn't know what this - when we prepared this who was going to file request, and in the case, as I understand, both Mr. Robertson has filed a written Request to Appear on behalf of both owner and the lessee. [Wallace] Right. Page 50 of 51 3O8 3O9 310 312 314 320 321 326 [Kvistad] Is that right? Or did you just say it for the one? [Robertson] No, I sent two separate ... [Kvistad] Yeah, I thought so. Okay. So it should read "the owner and lessee did. file a written timely Request to Appear" etcetera. [Wallace] Okay. Mary Lou did you have - I told you that I would look back to you, since you tried to do something. [Mosbacher] Well, I wanted to let you know how I felt, and therefore, I would make a motion that we - this Board, adopt Resolution No. 2729-01, for the acquisition of property by eminent domain for use in connection with recycled water facilities. [Jones] I'll second that motion. [Wallace] So we have a motion and a second. Any further discussion from members of the Board, the public, or our staff regarding this motion? Seeing none, then Ill ask you to vote. [Wallace] Okay. Thank you everyone for sitting through a long hearing process. Page 51 of 51