• PLEDGE OF ALLEGIANCE

The following comments were directed to the Board during the Oral Communications period. (1) Edwin Lee, resident of Carmel and member of the Executive Committee of Water for Us, stated that the plan to "reject the proposed Carmel River dam without an election or a certified EIR is a flagrant abuse of your constituents." Her urged the Board to not proceed with the effort to reject the dam without a vote of the people and a certified EIR. (2) John Fischer , a resident of Pacific Grove, was displeased that the Board did not give greater consideration to views expressed by representatives of U.S. military installations located on the Monterey Peninsula during the February 28, 2002 public hearing on adoption of Ordinance No. 102. (3) Susan Goldbeck, a resident of Pacific Grove, thanked the Board for making the difficult decision to adopt Ordinance No. 102 on February 28, 2002. (4) Barbara Bass Evans expressed support for the Board's decision to adopt Ordinance No. 102. She urged the Board to establish a policy for investigating the growth impacts of all privately developed desalination plants within the District. (5) Darryl Kenyon, a Monterey Peninsula resident and business owner for 18 years, member of the Board of Directors of the Monterey Commercial Property Owners Association, and a founding member of Land Watch Monterey County. He noted that he did not have a pending application for a water credit transfer. Mr. Kenyon informed the Board that a petition effort was underway that would either force the recission of Ordinance 102 or bring the issue to a public vote on November 5, 2002. He requested that the Board reconsider their February 28, 2002 action to adopt Ordinance No. 102. Mr. Kenyon also requested that the Board conduct a public forum to hear from their constituents. (6) Ed Leeper, resident of New Monterey, thanked the Board for doing a good job. He urged the Board to "keep up the good work." (7) David Dilworth, thanked the Board for "doing the right thing" by adopting Ordinance No. 102 and halting water credit transfers.

Director Erickson offered a motion that was seconded by Director Henson to approve the Consent Calendar items except for item D, Receive Status Report on Monterra Ranch Annual Report, which was deferred to the April 2002 Board meeting. The motion was approved on a vote of 7 - 0.

Approved

Approved

Approved

Deferred to April 18, 2002 Board meeting.

Approved

IV. CONSENT CALENDAR

V. PRESENTATIONS

A. General Manager's Report

1. Report on March 12, 2002 Meeting Regarding Las Garzas Creek

District Counsel Laredo reported that at the February 28, 2002 Closed Session, no action was taken on the General Manager's Performance Appraisal. There was discussion with legal counsel on the significant threat of litigation. No specific action was taken by the Board. District Counsel did not report on the March 18, 2002 Closed Session as it was set to convene following the open session of March 18.

B. Attorney's Report

1. Report on Closed Sessions of February 28 and March 18, 2002

Director Edwards thanked the Monterey County Herald for a recent editorial on the District's Injection/Recovery Project.

C. Directors' Reports

1. Board Comments

This item was deferred to the April 15, 2002 Board meeting at the request of the appellant.

VI. PUBLIC HEARINGS

A. Consider Appeal of Staff Decision Regarding Documentation of Water Fixtures at 3105 Seventeen Mile Drive, Pebble Beach - Ken and Sharene Virnig

A motion was offered by Director Pendergrass and seconded by Director Edwards to approve the staff recommendation and evaluate this issue as part of the Water Permit Process Revision Strategic Initiative. The motion was approved unanimously on a vote of 7 - 0.

A motion was offered by Director Erickson and seconded by Director Lindstrom to defer the long-term revised fixture-unit methodology proposal to the strategic planning initiative. At the April 15, 2002 Board meeting, District staff should implement and present to the Board for review and approval, strict guidelines (at staff level) to prevent abuses of the water credit system and bring any related policy issues to the Board for direction on an ongoing basis. Director Erickson amended the motion to state that the issues brought forward at the April 15, 2002 meeting would be considered for discussion only, no action would be taken by the Board that evening. The motion was approved on a vote of 7 - 0.

The following comments were directed to the Board during the public hearing on this item. (1) Roy Kaminske agreed that the commercial water use factors should be discussed. He cited the example of a commercial building with an estimated water use capacity of 104 units based on the District's water use factors, but actual use on the site was 76 units. Later, tenant improvements were made to that office building with a projected water use of 523 units, but the actual water use was 12 units. Another commercial property had a projected use of 366 units and the actual use was 82 units. He urged the Board to grant the property owner a vested right to the projected water use credit in order to "keep you honest." (2) Diana Ingersoll, Director of Public Works for the City of Seaside, advised the Board that if commercial water-use credit were based on historic water use, property owners that had conserved water would be penalized. Ms. Ingersoll warned that any moratorium on the use of water use credit would be considered a takings issue. (3) Nancy Isakson, spoke on behalf of the Mid-Valley Shopping Center and requested that a letter submitted by the Center be included in the record of this meeting. She requested that this issue be forwarded to the Policy and Technical Advisory Committees for their consideration. In addition, a committee comprised of various segments of the community could work with the Policy and Technical Advisory Committees to develop a recommendation for the Board. She stated that the use of historical water use to estimate water use credit would discourage water conservation. (4) Thomas Jamison, an attorney representing several clients, stated that the District's definition of a water use credit (permanent abandonment of water use) is not appropriate for changes in use to a commercial building with multiple tenants. He urged that a change in use for a commercial building with multiple tenants should be described as a reuse of space. (5) Brian Finegan, representing Woodside Hotels and Resorts developer of the IMAX Theater Project in Monterey. He advised that a water-use credit was granted to the IMAX project by the District in 2000. He urged the Board to acknowledge that water-use credits that have already been authorized by the District will remain in effect. (6) David Dilworth suggested that water use be calculated solely on the basis of "water" instead of fixtures, and that gallons should be the standard of measurement instead of units or acre-feet. Mr. Dilworth stated that if the District owned the California-American water distribution system, historic water-use records would be considered a public record. (7) Judy McClelland, representing the Pacific Grove Community Development Department, encouraged the Board to discontinue the piecemeal approach to adjustment of water use credit regulations. She urged the Board to continue its commitment to refine the water permit process through completion of the Water Permit Process Revision Strategic Initiative. (8) Kathy Eckerson, Chairman of the Board of the Monterey Peninsula Chamber of Commerce, Chairman of the Board of the Monterey Coastal Chambers Business Alliance, and a member of Save Our Water. Ms. Eckerson spoke in opposition to the Water Demand Committee recommendation outlined in the staff report on this item. (9) Don Edgren, member of the Monterey City Council, read a letter dated March 14, 2002 (on file at the District office) signed by Monterey City Mayor Dan Albert. The letter expressed support for the staff recommendation to evaluate the water use credit methodology as part of the Water Permit Process Revision Strategic Initiative. (10) Sheri L. Damon, an attorney with Lombardo and Gilles, referred to a letter dated March 18, 2002 on file at the District office. The letter stated that if the District stopped the use of all on-site credits or altered the calculation of water credits, it would subject the agency for claims for inverse condemnation, taking, and a breach of express and implied contract until the moratorium is lifted. (11) Don Hubbard, an attorney representing the Cannery Row Company, Foursome Development Company, the Sardine Factory and Delfino's. He spoke in opposition to the proposed water use credit methodology and stated that the proposed rules could constitute a regulatory taking. Mr. Hubbard urged the Board to submit this proposal to a committee for further consideration. (12) Michael Waxer, a resident of Carmel Valley, suggested that if the Board did decide to base water-use credit on historical use, it should reconsider Ordinance No. 92.

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

VI. PUBLIC HEARINGS

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

VI. PUBLIC HEARINGS

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

On a motion by Director Erickson and second by Director Lehman, the item was continued to the April 15, 2002 Board meeting. The motion was approved on a vote of 5 - 0. Directors Lehman, Erickson, Lindstrom, Pendergrass and Henson voted in favor of the motion. Directors Edwards and Potter were absent.

C. Consideration of Appeal Fees

Director Edwards offered a motion that was seconded by Director Pendergrass to approve the budget amendments. The motion was approved on a vote of 7 - 0.

The following comments were directed to the Board during the public hearing on this item. (1) Fran Farina, legal representative for Save Our Carmel River (SOCR), noted that funds are not set aside in the budget for an update to the Water Allocation Program EIR. Ms. Farina warned that SOCR would file a protest against the District's application to the State Water Resources Control Board for additional water rights and as part of the protest will request that the Water Allocation EIR be updated. (2) Edwin Lee protested the District's move to discontinue work on the Carmel River Dam EIR/EIS. According to Mr. Lee, funds should be appropriated to complete the EIR and distribute it for public comment. (3) David Dilworth, representing Helping Our Peninsula's Environment (HOPE), expressed support for comments made by Fran Farina. He proposed that the scope of an Allocation EIR update be broadened to allow development of a "general plan" for all water use within the District. He also expressed in interest in the District developing a new financing structure that does not include water permit connection fees. Mr. Dilworth stated that it is inappropriate for the District to be funded by connection fees when the District is "in such a fragile water state."

D. Consider Approval of Amendment to Fiscal Year 2001-2002 MPWMD Budget

VI. PUBLIC HEARINGS

D. Consider Approval of Amendment to Fiscal Year 2001-2002 MPWMD Budget

Director Edwards offered a motion that was seconded by Director Pendergrass to approve the April through June 2002 Water Supply Strategy and Budget. The motion was approved on a vote of 7 - 0. No public comment was directed to the Board during the public hearing on this item.

E. Consider Adoption of April through June 2002 Quarterly Water Supply Strategy and Budget

Director Erickson offered a motion that was seconded by Director Henson to direct District staff to finalize the text and proceed with production and distribution of the final report. The motion was approved unanimously. No public comment was directed to the Board during the public hearing on this item.

At 9:00 PM the meeting was recessed and reconvened at 9:15 PM.

F. Receive Public Comment on Draft 2001 MPWMD Annual Report

Director Henson offered a motion that was seconded by Director Potter to approve the staff recommendation as outlined in the staff note and to contract with Jones & Stokes for an amount not to exceed $723,775. The motion was approved on a vote of 7 - 0.

The following comments were directed to the Board during the public comment period on this item. (1) Ed Lee, representing Water for Us, stated that he was incorrect in his assumption that the Board had rejected the Carmel River Dam proposal. He asked if Jones & Stokes was ready to submit the draft EIR to the public and what it would charge the District to evaluate public comments received on the document. (2) Judy Almond, California-American Water Company, announced that Fred Curry of the Public Utilities Commission advised her that the Final Plan B report would be released to the public the week of March 25, 2002. She asked the Board for a status report on a previously approved plan to integrate Plan B and the Carmel River Dam proposal into one EIR. Ms. Almond said that Cal-Am will share in the cost of Plan B projects, but the Company must first review the final Plan B report and find out how the dam fits into the overall solution. (3) Robert Greenwood, representing the Carmel Valley Property Owners Association, read a letter dated March 18, 2002 on file at the District office. The letter expressed opposition to the staff recommendation to approve the contract with Jones & Stokes. (4) Fran Farina, representing SOCR, expressed opposition to the proposal outlined in the staff report. She urged the Board to pursue previous plans to develop an EIR that offered an "apples to apples" comparison of the Carmel River Dam and Reservoir Project and Plan B. (5) Jim Hughes, representing Water for Us, recommended that the Board continue with the previous plan to develop an EIR that compares the Carmel River Dam and Reservoir Project and Plan B. (6) John Fischer thanked staff for preparing the time line outlining the water supply project EIR process. He requested that the time line include critical path deadlines. (7) Pat Bernardi, a resident of Carmel Valley and member of SOCR, stated that the Carmel River Dam and Reservoir Project and Plan B should be given full review and studied at the same level of detail. (8) David Dilworth, representing HOPE, urged the Board to defer any decision on this matter until the Plan B report is completed. He objected to the 12,000 acre-foot project yield for all alternatives because it would allow water for growth.

VII. ACTION ITEMS

A. Consider Approval of Contract Amendment with Jones & Stokes for EIR/EIS on MPWMD Water Supply Project

VII. ACTION ITEMS

A. Consider Approval of Contract Amendment with Jones & Stokes for EIR/EIS on MPWMD Water Supply Project

Director Henson offered a motion to approve the staff recommendation as outlined in the staff note: (1) execute an agreement for legal support services; (2) secure and review all existing engineering and assessment reports related to the project; (3) execute an agreement for engineering services to determine probable cause for poor project performance; (4) execute an agreement for engineering services to determine the minimum cost to address performance failure of existing facilities; (5) review results of efforts noted above; and (6) defer further action until the work noted above has been completed. The motion was seconded by Director Erickson who also offered an amendment that would: (a) establish monthly progress reports to the Administrative Committee; (b) require that the Administrative Committee meet to approve selection of the attorney and the budget for legal services referred to in item1; and (c) that item 1 also include a legal review of the assumption regarding the need for additional environmental review of the water entitlement transfer as outlined in page 47 of the Board packet. The amendment was approved by Director Henson.

An amendment was offered by Director Edwards to place a 90-day deadline on completion of the studies identified in the staff recommendation. The amendment was approved by Directors Henson and Erickson. The motion was approved on a vote of 7 - 0.

The following comments were directed to the Board during the public comment period on this item. (1) Mark Stilwell, Executive Vice President of the Pebble Beach Company, reviewed the history of development of the Carmel Area Wastewater District (CAWD)/Pebble Beach Community Services District (PBCSD) Wastewater Reclamation Project. Presently, high salinity levels in water produced by the CAWD/PBCSD project is detrimental to golf course greens. The current proposal is to retrofit Forest Lake Reservoir to improve its storage capabilities and construct a small desalination plant at CAWD that will reduce salinity levels in reclaimed water. At issue now is how to fund the $20 million cost to construct project improvements. The Pebble Beach Company financing proposal is outlined in a letter to the Board dated December 6, 2001 that is on file at the District office. The Pebble Beach Company is prepared to begin the sale of reclaimed water to property owners in the Del Monte Forest in order to raise funds to begin construction of project improvements. In response to questions from the Directors, Mr. Stilwell made the following statements. The annual expected average use of the project was 800 acre-feet of reclaimed water per year. The average amount of water applied to the participating properties over the past seven-year period is approximately 925 acre-feet of water per year. Approximately 650 acre-feet of that total was reclaimed water. About 75 acre-feet of potable water per year is needed to flush excess salt from the golf course greens. The proposed project improvements will eliminate the need for flushing the greens. CEQA documentation has been completed on construction of the Forest Lake Reservoir, but not on construction of the desalination facility. CEQA documentation has been completed on the Del Monte Forest Lot Plan that covers approximately 900 properties. The Pebble Beach Company proposal would provide water to about 130 vacant lots of record in the Del Monte Forest and allow for some remodeling. The Forest Lake Reservoir should be completed by the winter of 2003 so it can be utilized during the 2004 irrigation season. In regards to the staff recommendation outlined before the Board, Mr. Stilwell stated that no additional studies are necessary. The Pebble Beach Company is ready to move ahead with its plans. That should not prevent the District from taking whatever time is necessary to plan for distribution of water that might be used on properties outside of the Del Monte Forest. According to Mr. Stilwell, desalination project contractors that have been contacted by the Pebble Beach Company will guarantee the quality of water produced at their facilities. (2) Edward Keith, President of the Monterey Peninsula Country Club, speaking for the Independent Reclaimed Water Users Group that consists of the Cypress Point Club, Poppy Hills Golf Course and the Monterey Peninsula County Club. He stated that golf courses in the Group use approximately 250 acre-feet of potable water each year for flushing the greens and making up for reclaimed water shortages during the summer months. He stated that proposed project improvements would produce salt-free water and meet reclaimed water delivery requirements throughout the year. He recommended approval of the proposal. (3) Joyce Stevens, President of the Carmel Area Wastewater District, spoke in support of the project and urged the Board to consider approval. (4) Paul Woudenberg, President of the Del Monte Forest Property Owners Association, spoke in support of the project. He stated that the project would reduce the amount of water that is pumped from the Carmel River and improve environmental quality on the river. (5) Richard Andrews, General Manager of the Pebble Beach Community Services District, spoke in support of the proposed financing plan and the project improvements. He stated that the PBCSD would accept all recommendations outlined in the staff note if they were adopted by the Board. However, he urged the Board not to adopt recommendations 3 and 4. He expressed concern over the cost to conduct the additional studies proposed. (6) Alan Jenson, owner of a legal lot of record and number 160 on Monterey County's water waiting list. He spoke in support of the reclamation project improvements and asked the Board to move ahead with the process to obtain water for people like himself who are waiting to build on a legal lot of record. (7) David Dilworth urged the Board to approve the staff recommendation and proceed with additional studies on the proposal for improvements to the reclamation project. He stated that the project will adversely affect endangered species such as the Carmel River Steelhead and the California red-legged frog because it will increase pumping from the Carmel River.

• Pebble Beach Company Proposal Dated December 6, 2001 for Financing Phase II Improvements to CAWD/PBCSD Wastewater Reclamation Project

VII. ACTION ITEMS

• Pebble Beach Company Proposal Dated December 6, 2001 for Financing Phase II Improvements to CAWD/PBCSD Wastewater Reclamation Project

There was no discussion of these items.

VIII. INFORMATIONAL ITEMS/STAFF REPORTS

A. Letters Received

B. Committee Reports

C. Strategic Plan Update

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

K. Production Report - CAWD/PBCSD Wastewater Reclamation Project

L. Monthly Water Supply Status Report

On a motion by Director Henson, the meeting was adjourned to Closed Session at 11:05 PM.

IX. ADJOURN TO CLOSED SESSION

A. 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

B. Conference with Legal Counsel - Anticipated Litigation

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

C. Public Employees Performance Evaluation (Gov. Code § 54957)

Conduct General Manager Quarterly Performance Appraisal

The meeting was adjourned at approximately 11:30 PM.

X. ADJOURNMENT

_________________________________ Ernesto A. Avila, Secretary to the Board

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