The meeting was called to order at 7:00 PM in the Monterey City Council Chambers.

Board members present:

Kris Lindstrom, Chair - Division 4

Alexander "Zan" Henson, Vice Chair - Division 5

Alvin Edwards, Vice Chair - Division 1

Judi Lehman - Division 2

Molly Erickson - Division 3

David Pendergrass - Mayoral Representative

David Potter - Monterey County Board of Supervisors

Board members absent:

None

District staff present:

Ernesto A. Avila, General Manager

Stephanie Pintar, Water Demand Manager

Rick Dickhaut, Chief Financial Officer

Joe Oliver, Water Resources Manager

Andy Bell, Planning & Engineering Manager

Henrietta Stern, Project Manager

Darby Fuerst, Senior Hydrologist

Arlene Tavani, Executive Assistant

District Counsel present: David C. Laredo

I. CALL TO ORDER/ROLL CALL

The assembly recited the Pledge of Allegiance.

II. PLEDGE OF ALLEGIANCE

The following comments were directed to the Board during the Oral Communications period. (1) Nancy Isakson disagreed with the District's assertion that the Water Demand Committee is not subject to the Brown Act. She requested that all Board committees be handled as if they were subject to Brown Act open meeting laws. (2) John Fischer read a paragraph from a December 10, 2001 letter written by Darby Fuerst to the City of Pacific Grove which stated that water use at the Pacific Grove Municipal Golf Course was within the limit of the water use credit issued to the city in 1996. (3) Michelle Pollock read a letter dated January 31, 2002 that was signed by Gillian Taylor of the Ventana Chapter of the Sierra Club (on file at the District office). She requested that the Board direct staff to take action related to allegations that low flow at Garzas Creek was a result of water production at Rancho San Carlos. (4) David Dilworth representing Helping Our Peninsula's Environment (HOPE), requested that the District prepare a general plan for water use on the Monterey Peninsula. He noted that preparation of a water allocation plan would be insufficient and it would not cover water credit transfers. (5) Geoff Malloway, a member of the Carmel River Steelhead Association (CRSA), read a letter on file at the District office that expressed concern about low-flow conditions at Las Garzas Creek. He requested that the Board wage an aggressive campaign to help eliminate those activities that endanger our aquatic resources. (6) Robert Zampatti, representing the CRSA, submitted a letter (on file at the District office) dated January 31, 2002 requesting that the District investigate low-flow conditions at Las Garzas Creek. (7) Clive Saunders a member of the CRSA and the Carmel River Watershed Council submitted a letter from the CRSA dated December 13, 1995 (on file at the District office) regarding the EIR on the Santa Lucia Preserve Project. He urged the Board to investigate the situation at Garzas Creek. (8) Dan Albert, Mayor of the City of Monterey and Chair of the Monterey County Mayors Association, requested that the Board report on a quarterly bases progress that has been made on development of a solution to the water supply problem.

III. ORAL COMMUNICATIONS

III. ORAL COMMUNICATIONS

A motion was offered by Director Henson and seconded by Director Erickson to elect Director Lindstrom to the position of Board Chairperson. The motion was adopted on a vote of 7 to 0.

A motion was offered by Director Edwards and seconded by Director Pendergrass to elect Director Henson to the position of Vice Chairperson. The motion was adopted on a vote of 7 to 0.

A motion was offered by Director Edwards and seconded by Director Henson to elect Ernesto A. Avila to the position of Secretary and Rick Dickhaut to the position of Treasurer. The motion was adopted on a vote of 7 to 0.

IV. ELECTION OF BOARD OFFICERS

A. Accept Nominations from the Board and Elect Chairperson

B. Accept Nominations from the Board and Elect Vice Chairperson

C. Accept Nominations from the Board and Elect Secretary

D. Accept Nominations from the Board and Elect Treasurer

Director Erickson offered a motion that was seconded by Director Henson to adopt the Consent Calendar. The motion was approved on a vote of 7 to 0.

Approved.

Approved.

Approved.

Approved.

Approved.

Approved.

Approved.

V. CONSENT CALENDAR

A. Consider Approval of Minutes from the Regular Board Meeting of December 17, 2001 and Strategic Planning Session of January 16, 2002

V. CONSENT CALENDAR

B. Ratify Appointments to Carmel River Advisory Committee

C. Consider Authorization of Funds for Replacement Liner for Sleepy Hollow Steelhead Rearing Facility Tank

D. Approve Amendment to Contract with Special Legal Counsel - Shute, Mihaley and Weinberger - for Security National Guarantee I and II

E. Consider Approval of Funds for Production of 2001 MPWMD Annual Report

F. Consider Approval of Second Quarter Investment Report

G. Consider Adoption of Treasurer's Report for November and December 2001

General Manager Avila announced that a letter dated January 31, 2002 was submitted by John Williams requesting deferral of item VIII.A. -- Receive Report on and Discuss Pebble Beach Company Proposal Dated December 6, 2001 for Financing Phase II Improvements to CAWD/PBCSD Wastewater Reclamation Project. On a motion by Director Erickson and second by Director Edwards, the Board voted unanimously to receive public comment on the item that evening, but to defer consideration until February 28, 2002. In addition, the item should be brought before the Water Demand Committee. The agenda for that meeting should be noticed, and the staff note should include a more comprehensive evaluation of the financing proposal.

General Manager Avila recommended that no further action be taken on the current customer service study, and that a scope be developed for a more comprehensive analysis of how to meet customers needs by conducting a randomized or telephone survey. Benchmarks should also be established before the survey is begun. Staff could present a contract to the Board in the summer of 2002. Director Lindstrom requested that a placeholder be set aside in the FY 2002-2003 budget for funding the survey.

VI. PRESENTATIONS

A. General Manager's Report

1. Report on Expected Completion Date for Water Demand Division Customer Service Study

District Counsel Laredo reported that four items were discussed at the December 17, 2002 Closed Session. The first was a status report on the lawsuit filed by Monterey Bay Shores, no action was taken by the Board. The second issue were two petitions for change before the State Water Resources Control Board (SWRCB) regarding the Cañada Woods Project filed by Roy Kauffman and the Leonard and Emily Williams Trust. The Board authorized the filing of a protest with the SWRCB. The protest has since been filed. The Board also reviewed the District's petition for change under permit 7130B and 21080.

VI. PRESENTATIONS

B. Attorney's Report

1. Report on Closed Session of December 17, 2001

Mr. Laredo explained that according to CEQA guidelines, the term "administrative record" is expansive and any document that has arguable relevance can be incorporated into the record. However, when the District receives a letter that makes reference to another matter that is not attached, the attachment must not always be considered part of the record. According to Mr. Laredo, if the document is "identifiable and common knowledge" such as the District's Rules and Regulations, it can be considered part of the record. If the document is not easily obtainable for review by the Board or the courts, such as all of the evidence placed before the SWRCB regarding Order 95-10, it must be presented before or during the proceeding for the Board to review in order to be considered part of the administrative record. The record in question must be available for review to be considered part of the administrative record.

2. Clarification of the Term "Administrative Record"

The Board agreed by consensus that Director Henson's proposal would remain under consideration during future consideration of alternatives to the present fixture-unit and water-factor methodologies. Chair Lindstrom noted that the District should continue to work with Cal-Am to obtain access to water use information, as that would be critical to implementation of a proposal such as Director Henson's.

The following comments were received from the public on this proposal. (1) David Dilworth agreed that it was necessary to change water management methods and enforcement. He requested that water use be calculated in gallons instead of fixture units. (2) Patricia Bernardi, a resident of Carmel Valley, asked the Board to consider how this proposal would be applied to the situation in which a house with 1 or 2 occupants was sold to a family of six.

C. Directors' Reports

1. Discussion and Information Regarding Proposal by Director Henson to Discontinue the Use of Fixture Unit Methodology for On-Site Credits

In response to concerns raised by the public regarding the draw down of water levels in Garzas Creek, the Board directed District staff to: (1) obtain monitoring data that has been collected by Rancho San Carlos; (2) contact the County of Monterey to ensure that Rancho San Carlos is in compliance with the water related conditions of its permit; (3) the General Manager and District Counsel meet with representatives from the Carmel River Steelhead Association, Ventana Chapter of the Sierra Club, California Department of Fish and Game and the National Marine Fisheries Service to determine if Rancho San Carlos wells are impacting Garzas Creek and to discuss options such as filing a joint complaint with the State; and (4) report back to the Board in February and at that time conduct a public hearing and propose recommended action.

VI. PRESENTATIONS

D. Board Comments and Referrals

A motion was offered by Director Edwards and seconded by Director Pendergrass to approve the staff recommendation to amend the Chugach Well No. 2 water distribution system permit, including adoption of the findings and conditions of approval as presented. No further action was taken on the motion.

A substitute motion was offered by Director Potter and seconded by Director Henson to continue the item until District staff could present hydrologic evidence indicating whether or not the well is separate and independent from influence on Garzas Creek. The motion was adopted on a vote of 5 - 2. Directors Edwards and Pendergrass voted against the motion. It was noted during Board discussion that while processing this application, staff was not expected to formulate an answer to the question of what has caused draw-down at Garzas Creek.

The following comments were presented during the public hearing on this item. (1) Tim Condon, the applicant, stated that the property proposed for subdivision is what remains of an 800 acre parcel purchased by his grandfather in 1929. Mr. Condon's plan is to amend the water distribution system to serve a future subdivision of three homes that his daughters could build for their own use. In addition, a fourth parcel would contain an existing rental house. There are three wells on the property. Mr. Condon would prefer not to incur the expense of drilling a fourth well, if water for the subdivision could be supplied by one of the existing wells. (2) John Williams, representing the Ventana Chapter of the Sierra Club, stated that water production has had a cumulative effect on streamflow in Garzas Creek. He suggested that this item be deferred until District staff has analyzed the Garzas Creek issues. (3) Robert Greenwood, representing the Carmel Valley Property Owners Association (CVPOA), asked for clarification of the location of Well No. 2 in relation to the Carmel River Alluvial Aquifer, as described in Ordinance No. 96. Ms. Stern responded that the well is within 425 of the alluvial aquifer boundary. (4) David Dilworth asserted that the 72 hour test of Well No. 2 is insufficient to determine the potential for long-term water production. He stated that a negative declaration was not appropriate for this application. Mr. Dilworth recommended that the Board deny the application and develop policies that would prevent this type of application from occurring. (5) Tex Irwin asked the applicant to clarify the location of the septic systems and leach fields on the property. Mr. Irwin asked Joe Oliver for an estimate of how much water pumped from a well in Carmel Valley would seep back into the ground. (6) Patricia Bernardi, a resident of Carmel Valley, agreed that water use should be limited to 7 acre-feet since Mr. Condon's intent is for the water distribution system to serve only four residences. (7) Mark Beique, a resident of Monterey, spoke in support of the applicant's request to amend the water distribution system.

VII. PUBLIC HEARINGS

A. Consider Application by Chugach & Company to Amend Chugach Well No. 2 Water Distribution System - APN 189-111-024

VII. PUBLIC HEARINGS

A. Consider Application by Chugach & Company to Amend Chugach Well No. 2 Water Distribution System - APN 189-111-024

A motion was offered by Director Henson and seconded by Director Erickson to adopt the first reading version of Ordinance No. 102 as presented.

Director Henson offered to amend the motion with the addition of language proposed by District staff that would change the definition of "site" in the ordinance so that properties owned by the military would be considered to have contiguous boundaries. There was no second.

A motion was made by Director Edwards that the Board should vote separately on how the six water-use-credit applications pending before the District should be processed. There was no second to that motion.

A motion was offered by Director Potter and seconded by Director Edwards to process the six water-use credit applications pending before the District according to Rule 28.B. The motion was approved unanimously.

The original motion by Director Henson to adopt the first reading version of Ordinance No. 102 was adopted on a vote of 4 - 3. Directors Edwards, Pendergrass and Potter voted against the motion.

There was discussion on the Navy's request for a military exemption. Directors asked questions and determined on Counsel's advice that the matter be considered at second reading.

The following comments were presented to the Board during the public hearing on this item. (1) Robert Greenwood, representing the CVPOA, read a letter dated January 31, 2002 that is on file at the District office. The letter expressed support for Ordinance No. 102. (2) Tom Rowley, Chair of the of the Monterey County Association of Realtors Local Governmental Relations Committee, read a letter dated January 31, 2002 that is on file at the District office. The letter expressed opposition to Ordinance No. 102 and urged the Board to continue to allow the transfer of commercial water use credits. (3) Ralph Rubio, Seaside City Council Member and alternate to the Policy Advisory Committee, read a letter dated January 31, 2002, from Seaside Council Member Darryl Choates. The letter expressed opposition to Ordinance No. 102, and proposed that the ordinance be modified to allow property-to-jurisdiction water use credit transfers. (4) David Dilworth representing HOPE and Responsible Consumers of the Monterey Peninsula urged the Board to adopt Ordinance No. 102. (5) Patricia Bernardi, resident of Carmel Valley, spoke in support of Ordinance No. 102 and urged the Board to adopt the ordinance. She stated that a community should be able to change its commercial uses, but the current system is being abused and encourages the sale of water credits for a profit. (6) Daniel Davis, a resident of Pacific Grove, urged the Board to adopt Ordinance No. 102 and then develop an ordinance that would address the needs of the business owner who plans to relocate a business. (7) Tex Irwin, representing the Monterey Peninsula Airport District read a letter dated January 31, 2002 that is on file at the District office. The letter expressed his concern that adoption of Ordinance No. 102 would hamper commercial and industrial businesses on the Monterey Peninsula and could be responsible for a "business drought" in the future. (8) Bob McKenzie, Governmental Affairs Director for the Monterey County Hospitality Association, stated that the findings presented for adoption of Ordinance No. 102 are artificial because the District has no credible evidence that water credit transfers increase water use. He noted that over the past 14 years, water use in the District has decreased despite an increase in population. (9) Thomas Jamison, representing Robert Louis Steven School, requested that the Board recognize the applicant's vested rite to have its pending application for a water credit transfer be considered by the full Board. He referenced a letter dated January 31, 2002 that is on file at the District office. (10) Diane Ingersoll, Director of Public Works for the City of Seaside and member of the Technical Advisory Committee, reminded the Board that Ordinance No. 101 represented a compromise that increased the amount of water that would be saved by water credit transfers and changed the methodology for determining the amount of water use credit available. She asked why the Board was considering another ordinance that negated all the compromises reached with Ordinance No. 101. (11) Roy Kaminski, a resident of Carmel Valley, advised the Board that if water available in the District was allocated "fairly and squarely" there would be enough water for everybody. (12) Terry Ryan, Chair of the Monterey County Chamber of Commerce Government Affairs Committee, expressed opposition to Ordinance No. 102. He requested that if the ordinance were to be adopted, that it be amended to allow commercial-to-jurisdiction and commercial-to-commercial water use credit transfers. In addition, the definition of "site" should be modified for the benefit of all governmental agencies, not just military installations. (13) Don Hubbard, representing the Cannery Row Company, urged the Board to refrain from adopting Ordinance No. 102. He advised that if commercial water credits cannot be transferred, some commercial sites will be vacant for such a long time that the on-site credits will expire. According to Mr. Hubbard, Ordinance No. 102 will cause property values to decline and eventually reduce the tax base. It will also discourage investment in commercial properties. (14) John Fischer asked the Board to look at modifying the definition of "site" to benefit federal and state agencies that may have plans to relocate or change their operations. (15) Helmut Hirsch recognized the need to restrict the sale of water credits for profit, but asked the Board to reconsider the move to stop all transfers of water use credits that would benefit commercial and residential users.

B. Consider First Reading of Ordinance No. 102 - Eliminating Rule 28, Water Use Credit Transfers

VII. PUBLIC HEARINGS

B. Consider First Reading of Ordinance No. 102 - Eliminating Rule 28, Water Use Credit Transfers

VII. PUBLIC HEARINGS

B. Consider First Reading of Ordinance No. 102 - Eliminating Rule 28, Water Use Credit Transfers

A motion was offered by Director Erickson and seconded by Director Henson to adopt a resolution of support for Plan 4. The motion was approved on a vote of 7 to 0.

The following comments were received during the public hearing on this item. (1) Jim Hughes, a former member of the Board of Directors, expressed support for Plan 4 because it addressed communities of interest. He urged the Board to adopt Plan 4. (2) John Fischer, resident of Pacific Grove and member of the Redistricting Committee, stated that the Minority Report was developed because the City of Carmel desired to be aligned with the Del Monte Forest. Some of the committee members supported the Minority Report. Mr. Fischer opined that Plan 4 was preferable because it addressed the issues of ethnic balance and communities of interest. (3) Tom Rowley, a representative on the Redistricting Committee from the City of Monterey, expressed appreciation for the support provided to the committee by the demographer and District staff. He stated that Plan 4 is the most logical plan for dividing the District into voter divisions.

VII. PUBLIC HEARINGS

C. Consider Selection of an MPWMD Voter Division Boundary Map and Adopt a Resolution of Support for the Chosen Map

Director Henson offered a motion that was seconded by Director Edwards to continue items VII D, E and F and item VIII. A to the February 28, 2002 Board meeting. The motion was approved on a vote of 7 - 0. The Board requested that the continued items be considered at the beginning of the February Board meeting.

Continued by motion to the February 28, 2002 Board meeting.

D. Consider Adoption of First Reading Version of Ordinance No 103 - Amending Rule 33C, Water West Service Area

Continued by motion to the February 28, 2002 Board meeting.

E. Consider Continued Use of Commercial Water Factors and Residential Fixture Credit Methodology for On-Site Credits

Continued by motion to the February 28, 2002 Board meeting.

F. Consideration of Appeal Fees

Continued by motion to the February 28, 2002 Board meeting.

VIII. ACTION ITEMS

A. Receive Report on and Discuss Pebble Beach Company Proposal Dated December 6, 2001 for Financing Phase II Improvements to CAWD/PBCSD Wastewater Reclamation Project

There was no discussion of the Informational Items/Staff Reports.

IX. INFORMATIONAL ITEMS/STAFF REPORTS

A. Letters Received

B. Committee Reports

C. Strategic Plan Update

D. Quarterly Report on Water Supply Projects

E. Carmel River Fishery Report

F. Carmel River Erosion Protection and Restoration Report

G. Irrigation Program and Riparian Projects Report

H. Water Conservation Program Report

I. Water Use Credit Transfer Status Report

J. Quarterly Public Information Program Report

K. Monthly Cal-Am Sales Report

L. Monthly Cal-Am Production Report

M. Monthly Allocation Report

N. Financial Report - CAWD/PBCSD Wastewater Reclamation Project

O. Production Report - CAWD/PBCSD Wastewater Reclamation Report

P. Monthly Water Supply Status Report

Q. Report on Second Quarter Financial Activity

At 10:20 PM the meeting was adjourned to Closed Session.

X. AT 9:30 PM ADJOURN TO CLOSED SESSION

I. CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code 54957.1 and 54957.6)

Agency Designated Representative: Ernesto A. Avila

Employee Organization: Laborers' International Union of North America, AFL-CIO, (LIUNA/UPEC) Local 270

II. CONFERENCE WITH LEGAL COUNSEL (Gov. Code 56956.9)

A. Protest to Petition Requesting Changes to SWRCB Water Rights Application No. 30067-Roy Kaufman (Cañada Woods, Cañada Woods North and Cañada Woods East)

B. Protest to Petition Requesting Changes to SWRCB Water Rights Application No. 30068-Leonard and Emily Williams Trust (Cañada Woods, Cañada Woods North and Cañada Woods East)

C. Monterey Peninsula Water Management District Petition Requesting Changes to SWRCB Water Rights Application Nos. 7130B and 20280-Monterey Peninsula Water Management District

III. DISCUSS AND CONDUCT GENERAL MANAGER'S PERFORMANCE APPRAISAL

IV. ADJOURN TO OPEN SESSION

District Counsel reported that during the Closed Session, the Board discussed the items listed on the agenda but no action was taken.

On a motion by Director Henson and second by Director Edwards, the Board adopted the Employee-Employer resolution with bargaining unit option D comprised of a General Staff Unit, Management Staff Unit and a Confidential Staff Unit. The motion was approved on a vote of 6 - 0. Director Potter was absent.

During the public comment period on this item, Larry Hampson, the District's Water Resources Engineer, stated that since the District's inception, staff had always acted unanimously in making compensation requests. He noted that the proposed bargaining units described in Addendum "A" to the resolution represented a significant departure from the District's past practice.

XI. CONSIDER ADOPTION OF A RESOLUTION IMPLEMENTING AN EMPLOYER-EMPLOYEE RELATIONS RESOLUTION FOR THE ADMINISTRATION OF ORDERLY LABOR RELATIONS BETWEEN THE MONTEREY PENINSULA WATER MANAGEMENT DISTRICT AND ITS EMPLOYEE ORGANIZATIONS

The meeting was adjourned at 11:10 PM.

XII. ADJOURNMENT