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

Directors Present:

Kris Lindstrom, Chair - Division 4

Alexander "Zan" Henson, Vice Chair - Division 5

Alvin Edwards - Division 1

Judi Lehman - Division 2

Molly Erickson - Division 3

David Pendergrass - Mayoral Representative

Directors Absent:

David Potter - Monterey County Board of Supervisors

District Staff Present:

Ernesto A. Avila - General Manager

Rick Dickhaut - Chief Financial Officer

Stephanie Pintar - Water Demand Manager

Joseph Oliver - Water Resources Manager

Andy Bell - Planning and Engineering Manager

Darby Fuerst - Hydrologist

Arlene Tavani - Executive Assistant

District Counsel Present: David C. Laredo

A motion was proposed by Director Henson and seconded by Director Erickson to modify the Closed Session agenda with the addition of item C (see agenda). The motion was approved on a vote of 6 - 0. Director Potter was absent.

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. (1) Ron Chesshire, resident of Monterey County, commended Director Pendergrass for his twelve years of service on the Board of Directors and stated that he should serve for another twelve years. (2) Robert Greenwood, representing the Carmel Valley Property Owners Association (CVPOA), read a letter dated February 28, 2002 that is on file at the District office. He asked when the Board took action to cease consideration of the Carmel River Dam Project. (3) David Dilworth, representing Helping Our Peninsula's Environment (HOPE), requested that the minutes of the January 31, 2002 Board meeting be amended by replacing the word "inappropriate" with the word "insufficient" in paragraph 1 on page 3. In addition, he read a statement dated February 28, 2002 on file at the District office regarding the Pebble Beach Company proposal for financing improvements to the CAWD/PBCSD Wastewater Reclamation Project. (4) Jim Hughes, a resident of Pacific Grove, spoke on the proposed committee assignments for 2002. He stated that it was inappropriate for one Director to sit on every committee, and that each committee should include one Director that is not associated with the Board majority. (5) Sheryl McKenzie, Government Affairs Director for the Monterey County Association of Realtors, asked for clarification of a policy that required property owners to appeal within 30 days a determination of the number of fixtures counted during a home inspection. (6) Sydney Woodrow, a resident of Carmel, requested that the Board immediately halt the issuance of special circumstances water permits.

III. ORAL COMMUNICATIONS

III. ORAL COMMUNICATIONS

On a motion by Director Henson and second by Director Lehman, the Board voted to approve all Consent Calendar items except for item A that was pulled for separate consideration, and item F which was removed from consideration that evening because the report from Monterra Ranch was not received by the District in advance of Board packet production. The motion was approved on a vote of 6 - 0. Director Potter was absent.

IV. CONSENT CALENDAR

On a motion by Director Erickson and second by Director Henson, the Board voted to approve the minutes with the following amendment: delete paragraph 2 on page 8 of the Board packet and replace it with the following language: "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 motion was approved on a vote of 6 - 0. Director Potter was absent.

On a motion by Director Erickson and second by Director Edwards, the Board approved a change to the minutes of January 31, 2002 proposed by staff, to include a statement made by Larry Hampson during the public comment period on item XI, Consider Adoption of a Resolution Implementing an Employer-Employee Resolution for the Administration of Orderly Labor Relations Between the Monterey Peninsula Water Management District and its Employee Organizations. The motion was approved on a vote of 6 - 0. Director Potter was absent.

Approved.

Approved.

Approved.

Approved.

Removed from consideration by motion of the Board.

Approved.

A. Consider Approval of Minutes from the Regular Meeting of January 31, 2002

B. Consider Ratification of Committee Appointments for Calendar Year 2002

IV. CONSENT CALENDAR

C. Receive Semi-Annual Groundwater Quality Monitoring Report

D. Receive District-Wide Annual Water Distribution System Production Summary

E. Receive District-Wide Annual Water Production Summary Report

F. Review Monterra Ranch Annual Report

G. Consider Adoption of Treasurer's Report for January 2002

General Manager Avila reported that a meeting has been scheduled for March 12, 2002 at 11:00 AM. He will report on the outcome of the meeting at the March 18, 2002 Board meeting.

V. PRESENTATIONS

A. General Manager's Report

1. Progress Report from General Manager on Investigation into the Source of Draw Down at Las Garzas Creek

General Manager Avila suggested to the Board that the public outreach component of the Strategic Planning Initiative titled Time Line and Scope for Evaluation of Water Supply Projects could address this request. The Chair referred this issue to the Public Outreach/Communications Committee.

2. Report from General Manager on Request from Monterey County Mayors Association that the District Provide Semi-Annual Progress Reports

The Chair directed that the Board packet be made available to the public on a compact disk for a trial period of four months, after which the success of the new procedure could be evaluated.

3. Report on Administrative Committee Discussion on Timely Production of Board Packets and Availability of the Packet on the Web Site

General Manager Avila referred the Board to a proposed meeting schedule that included two meetings per month. The Board had discussed modifying the meeting schedule at the February 21, 2002 Strategic Planning Session. The Chair requested that the Directors contact District staff about their availability for a second meeting in March, April and May 2002. It was suggested that a workshop format would be followed so that issues could be discussed and the Board could provide direction to staff, but no action would be taken. If it was necessary for the Board to take action, the second meeting could be noticed appropriately. The General Manager offered to provide an analysis of the impacts on District staff and resources.

General Manager Avila reported that the Seaside Basin Full-Scale Test Project was in operation. He commended Joe Oliver and his staff for their hard work on this project.

4. Discussion Regarding Board Request to Conduct Two Meetings Per Month

V. PRESENTATIONS

A. General Manager's Report

4. Discussion Regarding Board Request to Conduct Two Meetings Per Month

District Counsel Laredo reported that the Board discussed three items but no action was taken. The items discussed were a conference with labor negotiators with respect to District employees; a conference with Counsel regarding two matters pending before the State Water Resources Control Board; and the General Manager's performance appraisal. A report on the Closed Session was also contained in the minutes of the January 31, 2002 Board meeting.

B. Attorney's Report

1. Report on Board Action Taken at January 31, 2002 Closed Session

Director Edwards thanked Joe Oliver and his staff for successful completion of the full-scale injection well project.

Director Pendergrass announced that the Board received a letter from Director David Potter dated February 20, 2002 requesting that items VI.A, Consider Second Reading of Ordinance No. 102, and VI.C, Consider Continued Use of Commercial Water Use Factors and Residential Fixture Credit Methodology for On-Site Credits, be continued to the March 18, 2002 Board meeting. In addition, a letter was received from Mayor Dan Albert dated February 20, 2002 requesting that item VI.A be continued. Mr. Pendergrass also referred to another letter received that evening regarding item VI.A that was dated February 28, 2002 and signed by Scott Slater and Russell McGlothlin who represented the City of Seaside. Director Pendergrass offered a motion that was seconded by Director Edwards to continue consideration of items VI.A and VI.C to the March 18, 2002 Board meeting. Chair Lindstrom determined that such a motion should be made at the time the Board considered items VI.A and VI.C. No action was taken on the motion.

C. Directors' Reports

1. Board Comments and Referrals

During Board discussion, Patricia Bernardi addressed the Board. She questioned whether it would be legal for the Board to take action on Director Pendergrass' motion during Directors' Reports, and suggested that such a motion would be appropriate during Board consideration of item VI.A and VI.C.

A motion was offered by Director Edwards and seconded by Director Pendergrass to continue items VI.A and VI.C to the March 18, 2002 Board meeting. On the advice of District Counsel, the Chair determined that a separate motion should be made for each item. No action was taken on the motion.

A motion was offered by Director Edwards and seconded by Director Pendergrass to continue the item to the March 18, 2002 Board meeting. The motion failed on a vote of 3 to 3. Directors Lindstrom, Erickson and Henson voted against the motion. Directors Edwards, Lehman and Pendergrass voted in favor of the motion. Director Potter was absent.

A motion was offered by Director Henson and seconded by Director Lindstrom to adopt the second reading version of Ordinance No. 102.

Director Henson restated the motion by expanding the definition of site to include any branch of the Department of Defense including the Coast Guard. There was no second to the restated motion.

A motion was offered by Director Henson and seconded by Director Erickson to adopt the second reading version of Ordinance No. 102 without any reference to the military in the definition of "site."

Director Erickson offered an amendment to the motion that was seconded by Director Henson, to insert the following language in Section 5, at the end of paragraph 2, "provided that each such application shall be completed on or before December 31, 2002." The amended motion was approved on a vote of 4 to 2. Directors Erickson, Henson, Lehman and Lindstrom voted in favor of the motion. Directors Edwards and Pendergrass voted against the motion. Director Potter was absent.

During the public hearing on this item, the following comments were directed to the Board. (1) Helmut Hirsch, resident of Carmel, requested that the Directors speak into their microphones. (2) David Dilworth, representing HOPE, expressed support for the cessation of water credit transfers. He recommended that the Board adopt Ordinance No. 102 without an exemption for properties owned by the military. He requested that the Board put a hold on any exemptions to Ordinance No. 102 until District staff develops an analysis of the impact that allowing exemptions would have on the District's water supply. (3) Russell McGlothlin, an attorney with Hatch and Parent, representing the City of Seaside, spoke in opposition to Ordinance No. 102. He refered to a letter dated February 28, 2002 that is on file at the District office which outlined the City of Seaside's rationale for opposing the ordinance. He alleged that the District Board was using Ordinance No. 102 to gain control over land use, and that an initial study should be prepared on the ordinance in accordance with CEQA. Mr. McGlothlin requested that the Board abandon Ordinance No. 102 or exempt the City of Seaside from the ordinance. (4) Robert Greenwood, CVPOA, expressed support for Ordinance No. 102 with the amendment to the definition of "site" that would exempt properties owned by the military. (5) Captain Frank Petho, Chief of Staff of the Naval Postgraduate School, referred to a letter he submitted to the District dated February 26, 2002, requesting that Ordinance No. 102 be amended to exempt properties owned by the Department of Defense. He described a plan for future development under consideration by the Department of Defense that would be "profoundly" affected by adoption of Ordinance No. 102. (6) Judy McClelland, representing the City of Pacific Grove, read a letter dated February 28, 2002 from Mayor Sandy Koffman that is on file with the District office. The letter expressed opposition to Ordinance No. 102 because it would prevent businesses from moving from one location to another. (7) Moe Ammar, President of the Pacific Grove Chamber of Commerce, urged the Board to develop an alternative before adopting Ordinance No. 102. He noted that water use credit transfers would help facilitate the relocation of two underperforming Pacific Grove restaurants to more lucrative, downtown locations. (8) Lou Haddad, a resident of Monterey County, expressed support for statements made by Captain Frank Petho regarding establishment of an exemption to Ordinance No. 102 for the Department of Defense. (9) Daniel Barducci, President of the Carmel Valley Chamber of Commerce, expressed support for statements made in opposition to Ordinance No. 102 by Judy McClelland on behalf of the Mayor of Pacific Grove. (10) Alan Samuels spoke in support of adoption of Ordinance No. 102. He also suggested that the Board take up the issue of special circumstances permits. (11) Elizabeth Bush, representing the Monterey Commercial Property Owners Association, read a letter dated February 28, 2002 that is on file at the District office. The letter expressed strong opposition to any modification to the existing water credit system. (12) Kathy Eckerson, Chair of the Monterey Peninsula Chamber of Commerce, and Chair of the Monterey Coastal Chamber Business Alliance, voiced opposition to Ordinance No. 102. Ms. Eckerson stated that Ordinance No. 102 would impose an unprecedented hardships on businesses, residents and the local economy. (13) Terry Ryan, Chair of the Government Affairs Committee of the Monterey Peninsula Chamber of Commerce, expressed opposition to Ordinance No. 102. He requested that the Board consider adoption of rules such as those contained in Ordinance No. 101 that was adopted by the Board in November 2001. (14) Matt Lopez, Chief Executive Officer for the Monterey Peninsula Chamber of Commerce, spoke in opposition to Ordinance No. 102. He submitted 22 letters of opposition to Ordinance No 102 that were transmitted to him by members of the Chamber. (15) Jacquelyn Lambert, Executive Director for the Chamber of Commerce of Seaside and Sand City. Ms. Lambert advised that the Chamber Board of Directors voted to oppose Ordinance No. 102 because it would cause "irreparable damage" to the economic development of the cities of Seaside and Sand City. (16) Patricia Bernardi, a resident of Carmel Valley, spoke in support of Ordinance No. 102. She reminded the Board that the water use credit transfer program was implemented prior to the public vote on construction of a dam on the Carmel River, with the idea that a water supply project would be constructed. (17) Thomas Jamison, representing Robert Louis Stevenson School, expressed support for the second reading version of Ordinance No. 102 that would allow six pending water use credit applications to be processed under Rule 28.B. (18) John Fischer, a resident of Pacific Grove, spoke in support of the amendment to the definition of "site" in Ordinance No. 102 that would exempt property owned by the military. He suggested that the District and the military develop an agreement specifying that development projects which utilize water use credits must be completed by a specific date, and that all those projects must be approved by the Board. (19) Jim Hughes, a resident of Pacific Grove, spoke in opposition to Ordinance No. 102. He expressed support for the proposed change in the definition of "site" that would exempt property owned by the military. (20) Darryl Kenyon asked the Board to vote against adoption of Ordinance No. 102 until an analysis is completed on how it would affect business and employment in the area, and until more is known about whether or not water credit transfers increase water use. (21) Helmut Hirsch, a resident of Carmel-by-Sea, suggested that a temporary moratorium on the transfer of water use credits be implemented until the current water supply crisis has been remedied. (22) Dan Albert, Mayor of the City of Monterey, noted that six other cities within the District supported his request that Ordinance No. 102 be continued to the March 18, 2002 Board meeting. Mayor Albert confirmed the City of Monterey's opposition to Ordinance No. 102. He expressed support for the amendment to the definition of "site" that would exclude properties owned by the military because they are critical to national interests. (23) Bob McKenzie, Director of Government Affairs for the Monterey County Hospitality Association, asked the Board to respond to questions raised in the letter read by Judy McClelland, and to respond to Darryl Kenyon's request for an analysis of whether or not water transfers increase water use. Mr. McKenzie requested that the Board not adopt Ordinance No. 102. (24) Eileen Angelos, representing the Monterey Bay Aquarium, read a letter signed by Julie Packard that was dated February 28, 2002 and is on file at the District office. The letter expressed opposition to Ordinance No. 102. (25) Bill Wojtkowski, representing the City of Monterey, stated that if Ordinance No. 102 were to be adopted, it would eliminate the one method that jurisdictions can utilize to provide water for affordable housing.

VI. PUBLIC HEARINGS

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

VI. PUBLIC HEARINGS

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

VI. PUBLIC HEARINGS

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

VI. PUBLIC HEARINGS

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

A motion was offered by Director Henson to deny the adoption of Ordinance No. 103 and make no change to Rule 33(C). There was no second to the motion.

Director Edwards offered a motion that was seconded by Director Pendergrass to approve the ordinance as presented and allow properties within the former Water West service area that were subdivided before the effective date of this ordinance to receive water from the Water West special reserve. The motion failed on a vote of 4 to 2. Directors Erickson, Henson, Lehman and Lindstrom voted against the motion. Directors Edwards and Pendergrass voted in favor of the motion. Director Potter was absent.

During the public hearing on this item, the following comments were directed to the Board. (1) Nancy Isakson, representing Chris and Mary Currier, expressed support for the adoption of Ordinance No. 103. Ms. Isakson read sections of a letter she wrote dated February 28, 2002 that is on file at the District office. Ms. Isakson maintained that the allocation requested by the Curriers is a pre-existing allocation. She noted that the .44 acre-feet of water that could be appointed to each connection in the former Water West area reflects the amount of water that the original reserve allocation was based on. (2) Fran Farina, a resident of Carmel Valley, stated that the Water West reserve is based on actual water savings, so it cannot be considered "paper water." She urged the Board to utilize the residential water use factors when calculating the water use capacity of these projects. (3) David Dilworth stated that if water use figures shown on page 84 of the Board packet are averaged, the use is .33 acre-feet of water per residence. Mr. Dilworth said that Rule 33(C) was developed prior to listing of the California red-legged frog and the Carmel River steelhead as endangered species. (4) Patricia Bernardi, a resident of Carmel Valley, spoke in favor of amending Rule 33(C). She pointed out that Quail Meadows also has a 12.268 acre-foot water reserve obtained by retrofitting an outdated golf course irrigation system. She asked if other reserve allocations within the District would be in question, just as the Water West allocation seemed to be.

B. Consider First Reading of Ordinance No. 103 - Amending Rule 33(C), Water West Service Area

VI. PUBLIC HEARINGS

B. Consider First Reading of Ordinance No. 103 - Amending Rule 33(C), Water West Service Area

Director Henson offered a motion that was seconded by Director Erickson to continue this item for discussion at a Board workshop on March 18, 2002. The motion was approved on a vote of 6 - 0. Director Potter was absent.

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

A motion was offered by Director Erickson and seconded by Director Henson to continue the item to the March 18, 2002 Board meeting. The motion was approved on a vote of 6 - 0. Director Potter was absent.

D. Consideration of Appeal Fees

A motion was offered by Director Henson and seconded by Director Erickson to continue the item to the March 18, 2002 Board meeting. The motion was approved on a vote of 6 - 0. Director Potter was absent.

E. Consider Amendments to Fiscal Year 2001-2002 MPWMD Annual Budget

There were no Action items presented for Board consideration.

VII. ACTION ITEMS

The Board did not discuss the Informational Items/Staff Reports.

VIII INFORMATIONAL ITEMS/STAFF REPORTS

A. Letters Received

B. Committee Reports

C. Strategic Planning Initiatives Progress Report

D. Monthly Water Supply Project Report

E. Carmel River Fishery Report

F. Water Conservation Program Report

G. Water Use Credit Transfer Status Report

H. Monthly Cal-Am Sales Report

I. Monthly Cal-Am Production Report

J. Monthly Allocation Report

VIII INFORMATIONAL ITEMS/STAFF REPORTS

K. Production Report - CAWD/PBCSD Wastewater Reclamation Project

L. Monthly Water Supply Status Report

Prior to adjournment to Closed Session, David Dilworth addressed the Board. He asked for clarification of the word "significant" in the description of Closed Session item B. District Counsel Laredo explained that the wording is prescribed by the Brown Act Open Meeting Rules, in Government Code Section 54956.9.

The meeting was adjourned to Closed Session.

IX. ADJOURN TO CLOSED SESSION

A. Discuss and Conduct General Manager's Performance Appraisal (Gov. Code § 54957)

B. Conference with Legal Counsel - Anticipated Litigation

Significant Exposure to Litigation Exists Pursuant to Subdivision (b) (3) (D) of Gov. Code Section 54956.9 (One Case)

C. The following matter shall be added to the agenda upon a determination by two-thirds of the members present at the meeting that there is a need to take immediate action in accord with Government Code Section 54954.2 (b) (2).

Conference with Legal Counsel - Existing Litigation (Gov. Code § 54956.9)

The Matter of Order 2001-04 (Order 95-10 as Modified by Order 98-04) before the State Water Resources Control Board

The meeting was adjourned at approximately 11:30 PM.

X. ADJOURNMENT