II. PLEDGE OF ALLEGIANCE

The following comments were presented to the Board during the Oral Communications period. (1) Sue McCloud, Mayor of Carmel-by-the-Sea, representing the Monterey County Mayors' Association. Mayor McCloud urged the Board to stay focused on providing water for low-income housing projects. She requested that the Board report to the Mayors' Association every six months on the progress the District is making towards that goal. She asked that the next report occur in July 2002. Ms. McCloud also asked that the Board notify the Mayors' Association as to whether or not they agree to provide the requested report. (2) John Fischer referred to a letter from the Pebble Beach Company dated October 19, 2001, that was published on page 45 of the supplemental packet of information prepared in advance of the Board meeting. Mr. Fischer asked that if 45 acre-feet of potable water were made available to the District from the expansion of the Carmel Area Wastewater District/Pebble Beach Community District Wastewater Reclamation Project, and the District issued permits for that water, "will you be participants if all money goes to Pebble Beach and the resources are used to do all permitting.?" Mr. Fischer expressed concern about page 45 of the packet that contained names of Cal-Am customers. Mr. Fischer requested that the District send a letter to the City of Pacific Grove advising whether or not the City has exceeded the water allocation it received when the Pacific Grove Golf Course was retrofitted. (3) David Dilworth stated that in the coming year, he expects that the Board of Directors will "embrace public participation." (4) Keith Mackie stated that persons who do not profit from the "manipulation" of the water supply are being taken advantage of. According to Mr. Mackie there has not been much effort made to solve the situation. He chided the Board for "sustaining this sham." (5) Lou Haddad read a statement dated November 19, 2001 that is on file at the District office. He thanked the Board for adopting a resolution urging the City of Monterey to explore the potential of asserting its historical water right. He apologized for his inability to convince the City Council of Monterey to pursue a Pueblo water rights claim. (6) Jim Hughes, representing Water for Us, thanked Ron Chesshire for his service on the Board of Directors.

III. ORAL COMMUNICATIONS

III. ORAL COMMUNICATIONS

On a motion by Director Pendergrass and second by Director Edwards, the Consent Calendar was approved except for items B, C and D that were deferred for separate consideration. The motion was adopted unanimously on a vote of 7 - 0.

Approved

A motion was offered by Director Erickson and seconded by Director Lindstrom to submit this item for Administrative Committee review and then bring it back to the Board for consideration. The motion failed on a vote of 4 to 3. Directors Erickson, Lindstrom and Henson voted in favor of the motion.

A motion was offered by Director Chesshire and seconded by Director Edwards to ratify the agreement. The motion was later withdrawn by the maker and seconder.

A motion was offered by Director Chesshire and seconded by Director Henson to refer this item to the Administrative Committee. The motion was approved unanimously on a vote of 7 - 0.

During the public comment period on this item, David Dilworth stated that it was unbelievable that District staff would not provide a document to a Director upon request.

A motion was offered by Director Pendergrass and seconded by Director Edwards to adopt the resolution of appreciation. The motion was approved on a vote of 4 to 3. Directors Henson, Lindstrom and Erickson abstained.

Approved.

A motion was offered by Director Henson and seconded by Director Lindstrom to approve an expenditure of $6,000 for laboratory analysis and supplies for bio-assessment samples. The motion was approved unanimously on a vote of 7 - 0.

During the public comment period on this item, David Dilworth described the proposed effort as "a small step in the right direction." He asked the Board to undertake CALEX testing of the Carmel River to ascertain levels of pesticides that could be present as a result of runoff from golf courses that are adjacent to the river.

Approved.

Approved.

Approved.

IV. CONSENT CALENDAR

A. Consider Approval of Minutes from the Regular Board Meeting of October 15, 2001

B. Consider Ratification of Agreements

IV. CONSENT CALENDAR

B. Consider Ratification of Agreements

C. Consider Adoption of Resolution of Appreciation for Ron Chesshire

D. Consider Election of Rick Dickhaut to the Office of Treasurer to the Board of Directors

E. Consider Expenditure of Funds for Laboratory Analysis and Supplies for Bio-Assessment Samples

F. Consider Approval of First Quarter Investment Report

G. Consider Reception of Independent Auditors' Report for Fiscal Year 2000-2001

H. Consider Adoption of Treasurer's Report for September 2001

General Manager Avila introduced Stephanie Pintar, who presented a report on California American Water Company (Cal-Am) production levels. She reported that the production goal set for Cal-Am in the month of October 2001 was 44.5 acre-feet per day, however; actual production was 46.1 acre-feet. The month-end production total for October was 48.7 acre-feet above the target. In November 2001, the daily goal was 37.1 acre-feet, however; the daily average between November 1 and November 18 was 39.5 acre-feet. The District will likely move into Stage 2 of the Expanded Water Conservation and Rationing Plan at the end of November. If water use continues to exceed daily goals in December 2001, the community will be subject to Stage 3 regulations. She advised the Board that District staff met with Cal-Am on November 15, 2001 to discuss future compliance with conservation rules in order to maintain production levels below the limits established in response to SWRCB Ordinance No. 95-10. Cal-Am will apply to the Public Utilities Commission to re-establish conservation rates in effect during Stage 2 in 2000, and undertake an extensive public education program to advise the public about the conservation rates. In addition, Cal-Am submitted to the District a plan outlining steps it will take to reduce unaccounted for water use in the system to 7 percent. General Manager Avila announced that the Consulting Engineers and Land Surveyors of California has recognized List Engineering with an Award of Excellence for construction of the Cooling Tower Project at the Sleepy Hollow Steelhead Rearing Facility.

The following comments were received during the public comment period on this item. (1) David Dilworth of Helping Our Peninsula's Environment (HOPE) addressed the Board. He asked that the top 100 water users within the District boundaries be identified and that the list be made available to the public. (2) Patricia Bernardi, a resident of Carmel Valley, advised that only 64 percent of the water used on benefitted properties within the Del Monte Forest was supplied by the CAWD/PBCSD Wastewater Reclamation Project. According to Ms. Bernardi, Cal-Am production would be under the target if the use of potable water on benefitted properties was reduced. (3) Wayne Morgan, Cal-Am, stated that conservation rates will be reflected on water bills beginning in January 1, 2002. The conservation rates will not roll-back automatically. He promised to provide copies of Cal-Am's advertising campaign on the conservation rates to the District's Board of Directors.

V. PRESENTATIONS

A. General Manager's Report

1. Update on California-American Water Company Compliance with Water Production Limits Set by Order 95-10

V. PRESENTATIONS

A. General Manager's Report

1. Update on California-American Water Company Compliance with Water Production Limits Set by Order 95-10

No report was presented by District Counsel.

B. Attorney's Report

Director Henson announced that he attended a conference sponsored by the Environmental Law Committee of the State Bar. The main issue discussed at the conference was the lack of coordination between land-use agencies and water-delivery agencies, and the need to increase integration between them. Director Lindstrom requested that District staff present a report at the next Board meeting on how the District will move forward to complete the Legal Lot Study. He asked that staff report on why the District has been unable to obtain aerial photos from Monterey County that are required for completion of the report. Director Edwards thanked Director Chesshire for his work on the Board of Directors. He noted that the City of Seaside would adopt a resolution of appreciation acknowledging Director Chesshire. Director Pendergrass expressed appreciation for Director Chesshire's accomplishments on the Board. Director Erickson requested that the Administrative Committee look into the issue of timely production of the monthly Board packet. She also requested that since the December 10, 2001 Strategic Planning Session has been canceled, that it be rescheduled as soon-as-possible. Chair Potter stated that the Strategic Planning session will be conducted in January 2002, after Judi Lehman has taken the oath of office in December 2001.

C. Directors' Reports

1. Board Comments and Referrals

V. PRESENTATIONS

C. Directors' Reports

1. Board Comments and Referrals

Chair Potter presented the Resolution of Appreciation to Ron Chesshire.

D. Present Resolution of Appreciation to Ron Cheshire

A motion was offered by Director Henson and seconded by Director Lindstrom to refer this item to the Water Demand Committee. The motion failed on a vote of 3 to 4. Directors Lindstrom, Henson and Erickson voted in favor of the motion.

A motion was offered by Director Henson and seconded by Director Erickson to refer Ordinance No. 101 to the Water Demand Committee to direct preparation of a negative declaration. The motion failed on a vote of 3 to 4. Directors Lindstrom, Henson and Erickson voted in favor of the motion.

A motion was offered by Director Edwards and seconded by Director Chesshire to adopt the second reading version of Ordinance No. 101 on the basis of a categoric exemption, and to include the amendment proposed by Director Pendergrass that would delete the word "District" and replace it with the word "General Manager" in section 28 B paragraph Nos. 7, 8, 12 and 13. The motion was approved on a vote of 5 to 2. Directors Erickson and Lindstrom voted against the motion. During discussion by the Board, Director Erickson requested that the letter from Frances M. Farina dated November 8, 2001 and all attachments be incorporated into the record of the November 19, 2001 public hearing. There was no motion offered by the Board on this request.

The following comments were directed to the Board during the public hearing on this item. (1) James Davi, a commercial property owner, asked the Board to consider his situation. He explained that he would like to enlarge a commercial building to meet the needs of one of his tenants, however; water credits are not available to facilitate an expansion of the commercial space. (2) David Dilworth, representing HOPE, stated that the proposed ordinance would probably cause an increase in water use. He requested that two reports be incorporated into the administrative record: (a) the District's report stating that water transfers do increase water use; and (b) the Water Use Credit Transfer Report. Mr. Dilworth suggested that the 35 percent of water proposed by the ordinance to be retained by the District be increased to 70 percent. (3) Robert Greenwood, representing the Carmel Valley Property Owners Association, read a letter dated November 19, 2001 that is on file at the District office. Mr. Greenwood expressed opposition to Ordinance No. 101 and recommended that the ordinance be referred to the Water Demand Committee. (4) Patricia Bernardi, a resident of Carmel Valley and member of Save Our Carmel River (SOCR), objected to the ordinance for several reasons including lack of CEQA compliance and the original intent of the transfer rules.

VI. PUBLIC HEARINGS

A. 1. Consider Second Reading and Adoption of Ordinance No. 101 - An Ordinance of the Board of Directors of the Monterey Peninsula Water Management District Amending Water Use Credit Transfer Rules

VI. PUBLIC HEARINGS

A. 1. Consider Second Reading and Adoption of Ordinance No. 101 - An Ordinance of the Board of Directors of the Monterey Peninsula Water Management District Amending Water Use Credit Transfer Rules

A motion was offered by Director Henson and seconded by Director Pendergrass to authorize an extension of the water credit transfer application suspension until Ordinance No. 101 is in effect. The motion was approved unanimously on a vote of 7 - 0.

A. 2. Consider Extension of Water Credit Transfer Application Suspension Until Ordinance No. 101 is in Effect

At 9:00 PM the meeting was adjourned for a short recess and reconvened at approximately 9:10 PM.

A motion was offered by Director Erickson and seconded by Director Henson to approve the Implementation Guidelines as presented. The motion was approved on a vote of 4 - 3. Directors Chesshire, Pendergrass and Edwards voted against the motion.

A motion was offered by Director Erickson and seconded by Director Henson to adopt the second reading version of Ordinance No. 99 with the following amendment to Rule 141, C.2.: delete the words "non-substantive issues" and replace them with the words "solely with procedural matters." The motion was approved on a vote of 5 - 2. Directors Chesshire and Edwards voted against the motion.

The following comments were directed to the Board during the public hearing on this item. (1) David Dilworth, representing HOPE, spoke in support of the ordinance and the associated implementation guidelines. He requested that District staff explain the difference between "quasi-judicial" and "legislative" decisions. He expressed concern over the phrase "non-substantive issues" contained in proposed Rule 141, C.2. (2) Sheryl McKenzie asked if the intent of the proposed ordinance was to prevent communications between an applicant and a Director, or to ensure that communications are reported to the Board of Directors. District Counsel Laredo clarified that the ordinance does not forbid communication between the Directors and an applicant, however; it does establish a reporting requirement. He explained that "quasi-judicial" refers to the Board's action on applications and hearings related to appeals and variances. A "quasi-judicial" act determines rights and obligations of named individuals or specific properties. Notice is given and a decision is noted on the record. A quasi-legislative matter refers to the Board adopting matters of general policy such as an ordinance.

B. Consider Second Reading of Ordinance No. 99 - An Ordinance of the Board of Directors of the MPWMD Requiring Disclosure of Ex Parte Communications and Establishing Penalties and Remedies for Non-Disclosure

VI. PUBLIC HEARINGS

B. Consider Second Reading of Ordinance No. 99 - An Ordinance of the Board of Directors of the MPWMD Requiring Disclosure of Ex Parte Communications and Establishing Penalties and Remedies for Non-Disclosure

A motion was offered by Director Henson and seconded by Director Edwards to approve the request for consideration of special circumstances with the following amendments: (1) Condition No. 2, add to the end of the sentence the words "consistent with CEQA compliance for the approved project;" (2) Condition 11, add to the end of sentence two the words "and the applicant shall commence the implementation of measures to reduce such overuse;" and (3) Condition No. 11, sentence three, delete the words "if water use exceeds the quantity permitted for the project" and replace them with "if average annual water use exceeds the quantity permitted for the project during the five-year period." The motion was approved unanimously on a vote of 7 - 0.

The following comments were directed to the Board during the public hearing on this item. (1) Paul Davis, representing the applicant, explained that this project does not require a transfer or additional allocation of water. It involves retrofitting current fixtures and extensive remodeling to create a new facility that includes assisted and independent living facilities and intensive care facilities for seniors. When all conservation measures are in place, the result will be an additional 2.2 acre-feet of water savings beyond what is needed for the project. Water use will be monitored regularly to ensure that water use remains within the amount allotted to the project. During Board discussion of this item, Mr. Davis agreed to the amended conditions proposed by motion that evening.

C. Consider Request for Consideration of Special Circumstances, District Rule 24-G - Forest Hill Manor - California Nevada Methodist Homes - 551 Gibson Avenue, Pacific Grove

A motion was offered by Director Henson and seconded by Director Edwards to reimburse Cal-Am for costs associated with the distribution system modifications in an amount not-to-exceed $116,555. In addition, sometime in the future the Board should address the issue of how to deal with Cal-Am concerning the District's water rights on the Carmel River. The motion was approved unanimously.

During the public comment period on this item, Wayne Morgan, Cal-Am, explained that Cal-Am would be willing to enter into a partnership with the District to complete this project. The system improvements could be funded by Cal-Am, which would then seek approval from the Public Utilities Commission to recover its investment.

VII. ACTION ITEMS

A. Consider Authorization of Funds to Reimburse California-American Water Company for Distribution System Modifications for Water Year 2002 Injection Testing

On a motion by Director Erickson and second by Director Edwards, the item was deferred for consideration at the next regular meeting of the Board of Directors. The motion was approved unanimously on a vote of 7 - 0.

B. Discussion and Information Regarding Appropriate Action to be Taken in Response to Request by Chris and Mary Currier for Service Within Former Water West Service Area - AP# 187-241-017, Country Club Drive, Carmel Valley

There was no discussion of these items.

VIII. INFORMATIONAL ITEMS/STAFF REPORTS

A. Letters Received

B. Committee Reports

C. Strategic Plan Update

D. Water Supply Projects

E. Carmel River Fishery Report

F. Carmel River Erosion Protection and Restoration Project

G. Irrigation Program and Riparian Projects Report

H. Water Conservation program Report

I. Water use Credit Transfer Status Report

J. Public Information Program

K. Redistricting Committee Progress Report

L Monthly Cal-Am Sales Report

M. Monthly Cal-Am Production Report

N. Monthly Allocation Report

O. Financial Report - CAWD/PBCSD Wastewater Reclamation Project

P. Production Report - CAWD;/PBCSD Wastewater Reclamation Project

Q. Report on First Quarter Financial Activity

R. November 2001 Water Supply Status Report

The meeting was adjourned to Closed Session at 10:15 PM.

IX. ADJOURN TO CLOSED SESSION

A. Conduct General Manager's Performance Appraisal

At 10:35 PM, Chair Potter reconvened the Board meeting and reported in open session that the Chair would discuss observations and comments made by the Board regarding the performance appraisal with General Manager Avila prior to the next Board meeting. Director Avila will be given the opportunity to respond at the next Closed Session. The Closed Session has been tentatively set for December 17, 2001 at 6:30 PM. The meeting was adjourned at 10:40 PM.

X. ADJOURNMENT