FINAL MINUTES

Regular Meeting

Board of Directors

Monterey Peninsula Water Management District

June 20, 2005

The meeting was called to order at 7 PM in the Board Room of the Monterey Regional Water Pollution Control Agency office.

Board members present:

Larry Foy, Chair – Division 5

Kristi Markey, Vice Chair – Division 3

Alvin Edwards – Division 1

Judi Lehman – Division 2

Michelle Knight – Division 4

David Pendergrass – Mayoral Representative

David Potter – Monterey County Board of Supervisors

General Manager present: David A. Berger

District Counsel present: David C. Laredo

The assembly recited the Pledge of Allegiance.

No comments were directed to the Board during Oral Communications.

On a motion by Director Knight and second by Director Pendergrass, the Board adopted the Consent Calendar with the exception of items 3 and 6 that were pulled for separate consideration, and item 4 that was continued to the July 18, 2005 Board meeting. Items 2, 5 and 8 were approved contingent upon adoption of the FY 2005-2006 Budget under Item 15. The motion to approve was adopted unanimously on a vote of 7 – 0.

Approved.

This item was approved on a vote of 6 – 1. Directors Edwards, Lehman, Markey, Knight, Pendergrass and Potter voted in favor of the item. Director Foy was opposed.

Chair Foy announced that this item was continued to the July 18, 2005 Board meeting.

Approved.

Director Knight announced that her appointee to the committee was Marge Ingram-Viales. On a motion by Director Knight and second by Director Pendergrass, the appointments to the Carmel River Advisory Committee were unanimously approved on a vote of 7 – 0.

Approved.

Henrietta Stern, Project Manager, provided an update on the status of preparation of an EIR on a near-term Aquifer Storage and Recovery project, and the progress on other water supply augmentation activities. An outline of Ms. Stern’s report is on file at the District office.

Joe Oliver, Water Resources Division Manager, reported that between October 1, 2004 and June 16, 2005, California American Water (Cal-Am) production from the Carmel River was 392 acre-feet below the year-to-date goal, which is based on the SWRCB annual limit of 11,285 acre-feet. A summary of Mr. Oliver’s report is on file at the District office.

District Counsel Laredo reported that he provided an update to the Board on the status of all items listed on the Closed Session agenda, but no reportable action was taken. He noted that a hearing for continuance in the Seaside Basin adjudication matter, Case No. M66343, has been set for July 12, 2005. He reported that the two Cal Am applications before the California Public Utilities Commission, the Felton Consolidation (App No. 04-08-012) and the General Rate Case (App No. 05-02-012), are set for administrative hearing in late July and early August. Also, Monterey County Superior Court has ruled in favor of the District in Case No. M72061 filed by Save Our Carmel River (SOCR) against the District and the City of Monterey. However, there is still time for SOCR to file an appeal.

Director Edwards thanked Susan Rogers for her service to the Carmel River Advisory Committee and announced that she has been appointed to serve another term on the committee.

Director Knight offered a motion to: (1) adopt Resolution 2005-05 adopting the FY 2005-06 Budget; and (2) direct staff and District Counsel to begin the process of developing an ordinance to implement a user fee increase of 1.2% with the intent that it will fully fund the Phase 1 ASR Project through participation in a financing pool, and that excess money raised from the user fee could be allocated towards rebuilding the District’s reserve funds. Director Edwards seconded the motion. It 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) David Dilworth representing Helping Our Peninsula’s Environment (HOPE), urged the Board to insert into the proposed budget funding for completion of an EIR on the MPWMD 8,400 AFY Desalination Project. (2) Pat Bernardi expressed support for a 1.33% increase in the user fee to complete the ASR project.

Chair Foy announced that item 17 would be considered in advance of item 16.

On a motion by Director Pendergrass and second by Director Knight, the July through September 2005 Quarterly Water Supply Strategy and Budget was adopted on a unanimous vote of 7 – 0.

The following comments were directed to the Board during the public hearing on this item. (1) John Fischer, a resident of Pacific Grove, asked District staff to clarify the Seaside Basin production for the year. Mr. Oliver stated that by the end of the year, production from the Seaside Basin should be 3,300 acre-feet. (2) Patricia Bernardi, a resident of Carmel Valley, asked how the Board would respond if there was a requirement to reduce pumping from the Seaside Basin. Mr. Berger stated that the District is working with Seaside Basin pumpers to alleviate the Seaside Basin overdraft through development of the Seaside Basin Management Plan. (3) David Dilworth, HOPE, acknowledged the many agencies working in this area to protect endangered and threatened species. He asked that the Directors refrain from making negative comments about any of those agencies.

Director Edwards offered a motion to adopt Option 1 that calls for an election to determine if the voters would support an investigation into the cost and process to publicly acquire the Monterey District of Cal Am, and recover costs of the investigation as a surcharge on the Cal Am water bill. Director Edwards’ motion also proposed that the surcharge sunset when the investigation is complete. Director Potter seconded the motion. It was approved on a vote of 5 – 2. Directors Edwards, Knight, Lehman, Markey and Potter voted in favor of the motion. Directors Foy and Pendergrass were opposed.

Director Potter proposed a motion that the Cal Am system be defined as the entire Monterey District. Director Edwards seconded the motion. It was approved unanimously on a vote of 7 – 0.

The Board agreed on a vote of 5 – 2 that rebuttal arguments should be included in the election materials. Directors Edwards, Knight, Lehman, Markey and Potter voted in favor of the motion. Directors Foy and Pendergrass were opposed.

The following comments were directed to the Board during the public comment period on this item. (1) Bob Davis, a resident of Pacific Grove, expressed support for a ballot measure calling for an investigation into public acquisition of Cal Am, and implementation of a surcharge to pay for the proposed investigation. (2) Manuel Fiero, a resident of Monterey, spoke in support of a ballot measure calling for an investigation into public acquisition of Cal Am. (3) Darby Worth submitted a brochure to the Directors titled “Why do Corporations Have More Rights than People?” She urged the Board to work towards the abolishment of corporate personhood. (4) Janet Lenihan, a resident of Monterey, expressed support for a ballot measure calling for an investigation into public acquisition of Cal Am, and implementation of a surcharge to pay for the proposed investigation. (5) John Fasolas, a resident of Felton and member of Friends of Locally Owned Water (FLOW), urged residents in the District to manage their own water supply. (6) Susan Kipping, Felton resident and member of FLOW, spoke in support of a ballot measure calling for an investigation into public acquisition of Cal Am. (7) Jim Van Vorhis, a resident of Monterey County, advocated for a ballot measure calling for an investigation into public acquisition of Cal Am, and implementation of a surcharge to pay for the proposed investigation. He urged the Board to consider that November may be too soon for the voters to make a decision on this, more time may be needed. (8) Joyce Stevens, a resident of Carmel, spoke in support of a ballot measure calling for an investigation into public acquisition of Cal Am. (9) John Fischer, a resident of Pacific Grove, urged the Board to move forward on placement of a measure on the November 8, 2005 ballot calling for an investigation into public acquisition of Cal Am, and implementation of a surcharge to pay for the proposed investigation. He proposed that the surcharge sunset once the investigation is paid for. (10) Alexis Krostue, a resident of Felton and member of FLOW, urged the Board to approve placement of a measure on the November 8, 2005 ballot calling for an investigation into public acquisition of Cal Am. (11) Darryl Kenyon, a member of the Monterey Commercial Property Owners Association, Water Affairs Committee, stated that the public should be given the choice of who will be their water provider. (12) Paul Bruno, a member of Water for Us, spoke in opposition to the proposed ballot measure. He stated that an investigation into the cost of privatization will be very expensive, and will not produce new water for the District. (13) Patricia Bernardi, a resident of Carmel Valley, expressed support for placement of a measure on the November 8, 2005 ballot calling for an investigation into the cost of public acquisition of Cal Am. She could support either Option 1 or Option 2. (14) Steven Leonard, Vice President and Manager of Cal Am’s Monterey Division, stated that a ballot measure would cause division in the community. He spoke to progress on development of a long-term water supply that has been made by Cal Am. He urged the Board to refrain from adoption of the resolution calling for an election. He encouraged the Board to work with Cal Am on a water supply solution. (15) David Dilworth stated that the Board of Directors should not be afraid to allow the public to vote on the future of this community. (16) Nadar Agha advised the Board that an advocacy group has pledged $50,000 towards conducting an election on an investigation into public ownership of Cal Am. He expressed support for placing a measure on the November 8, 2005 ballot calling for an investigation into public ownership of Cal Am.

The meeting was recessed at the conclusion of the Board’s discussion of Item 17 from 9:30 PM to 9:35 PM.

On a motion by Director Lehman and second by Director Potter, Resolution 2005-04 was adopted on a unanimous vote of 7 – 0.

The following comments were directed to the Board during the public comment period on this item. (1) John Fischer asked if anyone knew how the State would choose Proposition 50 Grant Fund recipients. He noted that it could be difficult for the State to select a few projects from the many that have been submitted from Monterey County. (2) Curtis Weeks stated that the Department of Water Resources would look for opportunities to combine elements of different projects that could be supported by grant opportunities. He explained that the goal of the Integrated Regional Water Management Plan effort is to work on large picture planning as well as finding opportunities to be mutually supportive of agencies’ individual projects. Mr. Weeks noted that continued collaboration between local agencies is important in order to be successful in obtaining grant funding from the State. (3) Monica Hunter, Planning and Conservation League Foundation and a member of the Carmel River Watershed Conservancy, stated that Proposition 50 grant funds provide an opportunity for collaboration between small non-profit groups to work proactively with larger agencies in order to fund local stewardship programs. She encouraged the Board to move ahead on the Proposition 50 effort. (4) Paul Bruno, member of the Carmel River Watershed Conservancy, advised the Board that a volunteer water-monitoring project in Carmel Valley coordinated by the Conservancy is included on the list of projects for Proposition 50 funding. He said that the Conservancy looks forward to continuing its relationship with the District. (5) Patricia Bernardi, a resident of Carmel Valley and member of the Carmel River Watershed Conservancy, expressed agreement with Mr. Bruno’s remarks.

No discussion or action taken. The item was continued to the July 18, 2005 Board meeting.

General Manager Berger reported that Assemblymember Laird’s staff continues to work with various parties to develop an amended version of AB1421. An amended version of the legislation is not yet available. The Board of Directors took no action on this item.

There was no discussion of these items.

The meeting was adjourned at 10:10 PM.

CALL TO ORDER/ROLL CALL

PLEDGE OF ALLEGIANCE

ORAL COMMUNICATIONS

CONSENT CALENDAR

1. Consider Adoption of Minutes of the May 3, 2005 Special Meeting/Board Workshop; May 16, 2005 Regular Board Meeting and Special Meeting/Board Workshop of May 26, 2005

2. Consider Adoption of Resolution 2005-03 Calling for Board Member Elections on November 8, 2005 within Voter Divisions 1 and 2, and Authorize Expenditure of funds to Conduct the Election

3. Consider Approval of Memorandum of Agreement between the Monterey Peninsula Water Management District and the California Department of Fish and Game for Operation of the Sleepy Hollow Steelhead Rearing Facility

4. Consider Approval of Memorandum of Agreement between the Monterey Peninsula Water Management District and the Carmel River Steelhead Association

5. Consider Authorization of Funds to Contract for Limited-Term Field Positions

6. Consider Ratification of Appointments to the Carmel River Advisory Committee

7. Receive and Determine Process for Hearing Appeal of Grievance decision Regarding Interpretation of General Staff Bargaining Unit Memorandum of Understanding

8. Consider Adoption of Article XIII(B) 2005-2006 Fiscal Year Appropriations Limit

9. Adopt Treasurer’s Report for the Month of March 2005

10. Adopt Treasurer’s Report for the Month of April 2005

PRESENTATIONS

11. Water Supply Project Alternatives Update

GENERAL MANAGER’S REPORT

12. Status Report on California-American Water Compliance with State Water Resources Control Board Order 95-10

ATTORNEY’S REPORT

13. Report on 5:30 PM Closed Session

DIRECTORS’ REPORTS

14. Oral Reports on Activities of County, Cities, Other Agencies/Committees/ Associations

PUBLIC HEARINGS

15. Consider Adoption of Proposed FY 2005-2006 MPWMD Budget

16. Consider Adoption of July through September 2005 Quarterly Water Supply Strategy and Budget

ACTION ITEMS

17. Consider a Request to Place a Measure on the November 8, 2005 Ballot Regarding Public Acquisition of the California American Water Distribution System, Coastal Division, Monterey District

18. Consider Adoption of Resolution 2005-04 in Support of Filing Proposition 50 Implementation Grant Application

19. Consider Proposed Agreement with California American Water Regarding Management and Operation of Seaside Basin Aquifer Storage and Recovery Facilities