FINAL MINUTES

Special Board Meeting and Strategic Planning Session

Board of Directors

Monterey Peninsula Water Management District

July 31, 2002

The meeting was called to order at 7:00 PM in the District Conference Room. Board members present: Kris Lindstrom, Chair – Division 4 Zan Henson, Vice Chair – Division 5 Alvin Edwards – 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 Staff members present: Ernesto A. Avila, General Manager Rick Dickhaut, Chief Financial Officer Andy Bell, Engineering Manager Henrietta Stern, Project Manager/Public Information Rep. Joe Oliver, Water Resources Manager Darby Fuerst, Senior Hydrologist Cynthia Schmidlin, Human Resources Analyst Stephanie Pintar, Water Demand Manager Arlene Tavani, Executive Assistant District Counsel present: David C. Laredo The assembly recited the Pledge of Allegiance. The following comments were directed to the Board during the Oral Communications period. (1) Edwin Lee, representing Water for Us, proposed that under agenda item No. 6 the Board authorize the placement of an advisory vote on the ballot as to the construction of Plan A or Plan B. (2) Holly Price, Resource Protection Coordinator for the Monterey Bay Marine Sanctuary, expressed concerns about the proposals for construction of seven desalination projects in the Marine Sanctuary. She recommended a coordinated, regional desalination plant at the Duke Energy facility in Moss Landing where the concentrated brine discharge could be mixed with the discharge from an existing outfall. She acknowledged that the Duke Energy plant is outside of the District boundary, but encouraged the Board to analyze this alternative as a way to avoid the proliferation of multiple desalination facilities along the coastline. A motion was offered by Director Edwards to authorize the agreement with Arbitrage Compliance Specialists, Inc. The motion was seconded by Director Erickson. The motion was approved on a vote of 7 to 0. No comments from the public were directed to the Board during the public comment period on this item. A motion was proposed by Director Henson and seconded by Director Lehman that the Board oppose the ballot measure. An amendment was proposed by Director Erickson and seconded by Director Henson to authorize any Director to sign statements consistent with the Board’s position. The amended motion was approved on a vote of 4 to 3. Directors Erickson, Henson, Lehman and Lindstrom voted in favor of the motion. Directors Edwards, Pendergrass and Potter voted in opposition to the motion. During the public comment period on this item Dan Albert, Mayor of the City of Monterey, addressed the Board. He stated that the ballot initiative proposed by the City of Monterey asks the public to vote yes or no as to whether the Monterey Peninsula Water Management District should be dissolved. Mr. Albert noted that five cities within the District and the Monterey Peninsula Airport District support the advisory initiative. He explained that after 24 years voters within the District will have an opportunity to decide if they want the District to continue, or if the situation should be resolved in another way. In order to keep the ballot measure language simple, the question of alternative governance will not be addressed on the ballot. In response to a question from the Board, Mayor Albert stated that if the voters decided that the District should be dissolved there are alternatives under consideration. He stated that it is important that the alternative form of governance maintain local control in a manner similar to the Monterey Regional Water Pollution Control Agency. There were no other comments presented by the public. A motion was proposed by Director Henson that the Board approve the following ballot measure language. “Shall the Monterey Peninsula Water Management District seek to augment the community’s water supply by alternatives to the New Los Padres Dam such as desalination, groundwater injection/recovery or other means.” Director Lehman suggested that the list of alternatives proposed in the ballot measure include water reclamation and the establishment of conservation incentives for commercial and residential projects. No action was taken on the motion. A motion was offered by Director Henson and seconded by Director Lehman to continue this agenda item for further consideration at a special Board meeting on Wednesday, August 7, 2002 at 7:00 PM. The motion was clarified to state that Directors would have the opportunity to bring forward issues of concern and suggested language for discussion at that meeting which would be considered for possible incorporation into the ballot measure. The motion was amended by motion of Chair Lindstrom to request that Directors submit recommended ballot measure language to the General Manager by 5 PM on Thursday, August 1, 2002. The amended motion was approved on a vote of 6 to 1. Directors Lehman, Potter, Lindstrom, Henson, Erickson and Edwards voted in favor of the motion. Director Pendergrass voted against the motion. During the public comment period on this item the following persons addressed the Board. (1) Edwin Lee proposed that the Board conduct an advisory vote on whether a dam or various components of Plan B should be constructed. (2) Ron Chesshire stated that most of the Directors have been in support of providing information to the public prior to Board discussion of an item. However, in this case the Board has asked for public comment on proposed ballot language that was not written in advance of the meeting. (3) Nancy Isakson asked how the public could comment on ballot measure language that has not been written in advance of the public hearing. She stated that it would be an inappropriate expenditure of public funds to place a measure on the ballot that has not been subject to public review and comment. In response to a question from the Board, Ms. Isakson affirmed that upon review of the July 31, 2002 agenda, she believed the item under discussion was whether or not to place an advisory measure on the ballot that dealt with a particular topic. She was not aware that specific ballot language would be presented for approval. She was surprised that there was no staff report on item Nos. 5 and 6. Ms. Isakson described this item as “inappropriate.” She asked if the public would participate in development of ballot measure language, and if there would be an opportunity to comment that evening on any ballot measure that was developed. (4) John Fischer asked how this item became an “emergency” when it was posted in advance of the meeting. He characterized the agenda as “bad” because it was not specific about the Board’s intended action. He suggested that the Board conduct a special meeting or an emergency meeting to allow for public discussion on the proposals. The meeting recessed at 9 PM and reconvened at 9:10 PM. The Board received a report from District staff member Henrietta Stern and Mike Rushton of Jones and Stokes Associates. A summary of the presentation is on file at the District office. During the Board discussion it was agreed that a letter should be sent to Assemblymember Fred Keeley asking him to attend a future Board meeting to address the assembly on the Plan B project. During the discussion the Board members expressed their viewpoints on the following eight issues related to preparation of the Draft Scope of Work for consideration at the August 29, 2002 Board meeting. (Please refer to referenced slides from staff presentation, included as Attachment 1) Issue 1 – CEQA Process: Some Board members indicated that staff and consultants should continue to move forward. Issue 3 – Water Supply Goals: Rationing Standards: Some Directors indicated the District should proceed as described in the Notice of Preparation on the Water Supply Project EIR. Issue 4 – No Project/Baseline: Some Directors stated that the District should resolve how to reconcile the legal definition of baseline and the State Water Resources Control Board definition of baseline in Order 95-10. Issue 5 – Level of Detail of Study of Alternatives: Some Directors stated that the District should proceed with goals shown in the Notice of Preparation. Some directors stated that the consultant should summarize information presented in previous EIRs and incorporate that into current EIR. Issue 6 – New Alternatives: Some Directors indicated that each alternative should not be studied at the same level of detail. One Director requested that the EIR explain that the 3,500 AF of Army water rights currently slated for FORA will not be available for use within the District. Refer to slide No. 17. Issue 8 – Technical Requests: The General Manager noted that staff will address technical requests as part of the Scope of Work to be considered on August 29, 2002. One Director requested that project cost estimates include the mitigation costs. Next Steps to Remain on Schedule – Some Directors indicated that staff should proceed on schedule as shown on slide No. 39. The following comments were directed to the Board during the public comment period on this item. (1) John Fischer stated that he was confused about what direction the consultant required of the Board. The staff report for this item mentioned that the Phase 2 Scope of Work would be presented to the Board on August 29, 2002, but Mr. Rushton had mentioned preparing the Scope for mailing to the Administrative Committee on August 7, 2002. According to Mr. Fischer, if the Board was meeting that evening to receive information and discuss the issues, there was no need for the Board to provide direction to Mr. Rushton. He stated that if direction was provided either by inference or consensus, the Board would be taking a vote. (2) Nancy Isakson asked the question that if Plan B were not included in the EIR, what would happen to Plan B and is the District required by law to include the Plan B alternative in the EIR? She asked what would happen to the dam project if it were not included in the EIR? She encouraged the Board to take the time needed to prepare a complete EIR. (3) Edwin Lee stated that the October deadline for completion of the EIR was not necessary, and that it was not fair to the public to require that the EIR be completed before the Directors terms of office are complete. He suggested that the dam project be placed on a ballot measure. (4) Fran Farina asked why the District, in its capacity as lead agency on Plan B, was not in direct communication with the Public Utilities Commission and EDAW to obtain information on Plan B that could be provided to Jones & Stokes for preparation of the Water Supply Project EIR. She asked that the District obtain answers about the Plan B proposal and provide that information to the public. (5) Darryl Kenyon, a party to the application by Thames Water to purchase the California-American Water Company. Mr. Kenyon stated that the CPUC intends to find a solution to the water supply problem because no solution had been reached on a local level. The CPUC will present one alternative that the District can accept as a solution or that will be proposed to the District as a solution. Following Board discussion the Chair agreed to receive further comments from the public. The following comments were directed to the Board. (1) Unidentified Speaker, requested that the EIR expand the pipeline analysis on the aquifer storage and recovery project (ASR) to review additional routes, and that the EIR also analyze additional alternatives for diversion from the Carmel River related to the ASR project such as Raney collectors. (2) Haywood Norton, representing the City of Monterey, stated that he only heard three production goals mentioned at the meeting. He asked the Board to clarify if the consultant would present three or four production goals for Board consideration at the August 29, 2002 meeting. (3) John Fischer noted that the Board acted by consensus, which he described as a vote. He was concerned that although the Board would make a decision on the Scope of Work on August 29, 2002, they did vote that evening. The District’s Water Resources Manager Joe Oliver presented an update on the study. A summary of the presentation is on file at the District office. This item was continued to the August 29, 2002 Board meeting. The Chair did not invite public comment. The meeting was adjourned to Closed Session at approximately 10:20 PM. The meeting was adjourned at approximately 11:00 PM.

1. Call to Order/Roll Call 2. Pledge of Allegiance 3. Oral Communications 4. Consider Authorization of an Agreement with Arbitrage Compliance Specialists, Inc. to Provide Arbitrage Calculation Services for the $33,900,000 Variable Rate Certificates of Participation Issued in 1992 to Finance the Carmel Area Wastewater District/Pebble Beach Community Services District (CAWD/PBCSD) Wastewater Reclamation Project 5. Consider Position on November 5, 2002 Advisory Vote 6. Consider Advisory Measure 7. Receive Update on Water Supply Strategic Initiative 8. Receive Update on Laguna Seca Phase III Study 9. Discuss Proposals for New Stakeholder and/or Advisory Groups 10. Public Comment ADJOURN TO CLOSED SESSION 11. Conference with Labor Negotiators (Gov. Code Section 54957) A. Agency Designated Representatives: Ernesto A. Avila, Rick Dickhaut, Cynthia Schmidlin Employee Organization: Laborers’ International Union of North American, AFL-CIO, (LIUNA/UPEC) Local 270 ADJOURNMENT

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Ernesto A. Avila, Secretary to the Board

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