FINAL MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District January 26, 2006

The meeting was called to order at 7:00 PM in the Boardroom of the Monterey Regional Water Pollution Control Agency. Directors present; Michelle Knight, Chair – Division 4 Judi Lehman, Vice Chair – Division 2 Alvin Edwards – Division 1 Kristi Markey – Division 3 Larry Foy – Division 5 David Pendergrass – Mayoral Representative Directors absent: David Potter – Monterey County Board of Supervisors The assembly recited the Pledge of Allegiance. The following persons addressed the Board during Oral Communications. (1) John Fischer, resident of Pacific Grove, asked if the Seaside Groundwater Basin Management Plan is still a viable document. District Counsel Laredo responded that the Plan has not been abandoned. (2) Paul Bruno, resident of Monterey, and Vice President of the Carmel River Watershed Conservancy congratulated the Board on receipt of a $497,000 grant from the State of California under Proposition 50. (3) Doug Cadie, resident of Pebble Beach, urged the District to educate Monterey County Planning and Building Department staff about the process and timeline to obtain a water permit. County Planning staff have advised applicants that a water permit can be processed in one day. (4) Madeleine Clark, Director of the Elkhorn Slough Coalition, submitted a letter dated January 26, 2006 commenting on the tentative decision issued by Monterey County Superior Court in the Cal Am Water v. City of Seaside lawsuit. The letter is on file at the District office. She urged the Board to appeal the decision. (5) David Dilworth, Executive Director of Helping Our Peninsula’s Environment (HOPE), requested that the Board refuse to ask the Technical Advisory Committee to consider the City of Monterey’s April 20, 2005 request for a transfer of water credits from open space to the City’s allocation. On a motion by Director Edwards and second by Director Foy, the Consent Calendar items were approved except for items 2 and 3 that were pulled for separate consideration. The motion was adopted on a vote of 6 – 0. Adopted. Director Markey made a motion to adopt the committee assignments as presented, but change the composition of the Administrative Committee to include Director Edwards as Chair with Directors Markey and Lehman as regular committee members and Director Potter as the alternate. The motion was adopted unanimously on a vote of 6 – 0. Director Pendergrass made a motion to refer the two requests for consideration to the Technical Advisory Committee. The motion was seconded by Director Edwards and adopted on a vote of 4 – 2. Directors Edwards, Foy, Knight and Pendergrass voted in favor of the motion. Directors Lehman and Markey were opposed. Approved. Adopted. Ray von Dohren introduced himself and offered to answer questions about the project. There were no questions posed to Mr. von Dohren. Mike Niccum narrated a slide show that documented the re-construction and infrastructure improvements at the Lake Forest Reservoir. The presentation is on file at the District office. In response to questions from the Board, he stated that the Pebble Beach Community Services District implemented a plan to inform persons who lived near the project area about construction impacts. The plan included signage around the construction area and limiting work hours to 8 AM to 5 PM Monday through Friday. After the project has been operational for a few years a determination can be made as to the quantity of excess water that may be available. Mark Stilwell stated that the Expansion Project will cost about $30 million. The Pebble Beach Company has collected $22 million from the sale of approximately 108 acre-feet of entitlement water to fund design and construction of the project. Only a small percentage of that water is being used. Construction of the advanced treatment facilities is 6 to 9 months behind schedule, but the project should be complete by 2007. The Pebble Beach Company spends $1 million to $1.5 million dollars per year subsidizing operation of the CAWD/PBCSD Wastewater Reclamation Project. The Company also has a commitment to fund any shortfall that results from the project expansion. During the public comment period on this item, Robert Greenwood, representing the Carmel Valley Association, asked if the Pebble Beach Company had considered planting salt-tolerant grasses as an alternative to construction of the advanced treatment facilities. Mr. Stilwell replied that local golf courses have experimented with several types of salt-tolerant grasses, but they did not grow well on the Monterey Peninsula. Henrietta Stern, Project Manager, presented the report. A summary of the report is on file at the District office. A copy of the report presented by Darby Fuerst, Senior Hydrologist, is on file at the District office. Mr. Fuerst advised the Board that Cal Am production from the Carmel River between October 1, 2005 and January 23, 2006 was 2,707 acre-feet, which is 53 acre-feet under the 2,760 limit established as a result of SWRCB Order 95-10. During the public comment period on this item, David Dilworth, representing HOPE, asked for clarification of the safe yield in the Seaside Groundwater Basin. Mr. Fuerst replied that based on studies conducted in preparation for adjudication of the Seaside Groundwater Basin, the safe yield is 3,000 acre-feet. That includes pumping from the coastal and inland areas of the basin. Presently, the Quarterly Water Supply Strategy and Budget is based on a safe yield of 3,600 acre-feet. The District will be working with Cal Am to reconcile the Quarterly Budget goals with the safe yield established in the adjudication tentative decision. Cal Am will need to reduce Seaside Basin production from 5,600 acre-feet to 3,000 acre-feet. District Counsel Laredo reported that the Board met in a noticed Closed Session on January 25, 2006 to discuss the items listed on the January 26, 2006 Closed Session agenda. The Board did not meet on January 26. At the January 25, 2006 meeting he provided the Board with an update on the five items of existing litigation, no reportable action was taken. However, the Board did direct District Counsel and the General Manager to convene a meeting with litigants in the Cal Am v. City of Seaside et al adjudication lawsuit in order to move ahead on formation of the watermaster board as required by the Superior Court’s tentative decision in that matter. The Board also discussed renewal of an employment agreement with the General Manager. They requested that the item be placed on the February 23, 2006 regular Board meeting agenda for discussion in open session. Director Edwards reported that he observed operations at the Aquifer Storage and Recovery test well site. He noted that 94 acre-feet of Carmel River water were injected into the well in 2006. Chair Knight announced that the item was deferred to a future meeting at the request of the applicant. Director Markey offered a motion that was seconded by Director Pendergrass to defer this item to the February 23, 2006 Regular Board meeting. The motion was approved on a vote of 5 – 1. Directors Edwards, Lehman, Knight, Markey and Pendergrass voted in favor of the motion. Director Foy was opposed. Director Potter was absent. The following persons addressed the Board during the public hearing on this item. (1) David Dilworth, representing HOPE, opined that the study could be conducted without the assistance of an engineering consulting team. However, the study should be subject to an independent review. He urged the Board to specify that all information submitted by the project proponents will be disclosable to the public. None of the information should be protected from disclosure under the category of “trade secrets.” (2) Robert Greenwood, Carmel Valley Association, stated that it would be more appropriate for the Regional Urban Water Supply Project governing board to commission this type of engineering study. (3) John Fischer, resident of Pacific Grove, advised that the most important factors in developing an environmentally benign desalination project are the site and engineering criteria. (4) Brenda Agerback, Citizens for Public Water, inquired about the scope of work for the study. Director Edwards made a motion that was seconded by Director Lehman to create the Community Advisory Committee. Director Edwards later rescinded the motion. The Board discussed this item and directed staff to send a letter to community groups inviting them to participate on the Community Advisory Committee. Results of the inquiry could be provided to the Board in 60 days. The charge to the committee will be considered a draft that could be refined after the Board reviews the results of the inquiry letter. During the discussion of this item, the Board members suggested ideas for the committee charge and membership. (1) The charge could be similar to the Policy and Technical Advisory committees but with the added phrase “other tasks as directed by the Board.” (2) The charge could also include asking the committee to provide input on water supply project decisions. (3) Suggest seven-member committee. (4) Suggest 13-member committee with 6 appointed by the Board from public interest groups, the other 7 could also be appointed by the Board. Term of appointment could be 2 years. Term would end when the appointing director leaves office. (5) Membership should be from environmental, business, real estate, visitor serving and military sectors of the community. (6) Determine public interest in serving on this committee by sending out a card or letter to local groups soliciting their participation. (7) Only persons who live in the District should participate on the committee. (8) One Director could be designated as a liaison to the committee available to answer any questions the committee members might have. (9) The solicitation letter should include the committee charge. (10) Community groups could participate on a rotating basis so membership is not dominated by a few groups. The following comments were directed to the Board during the public comment period on this item. (1) David Dilworth, representing HOPE, expressed support for creation of the Community Advisory Committee. (2) Madeleine Clark, representing the Elkhorn Slough Coalition, asked how many persons would sit on the committee. (3) Manuel Fiero, a resident of Monterey, advised the Board that creation of the committee would improve the District’s reputation in the community by encouraging public participation in the decision making process. Director Markey proposed a motion to pull this item from the agenda. The motion was seconded by Director Knight. Director Edwards clarified the motion to state that the item be withdrawn from consideration and that all water supply issues would not be considered by a committee but would be brought forward for consideration by the full Board. The District’s Strategic Plan will be updated to reflect this decision. The motion was approved unanimously on a vote of 6 – 0. Directors Edwards, Foy, Knight, Lehman, Markey and Pendergrass voted in favor of the motion. Director Potter was absent. The following comments were directed to the Board during the public comment period on this item. (1) Madeleine Clark, representing the Elkhorn Slough Coalition, asked if a committee member’s term would be terminated should he/she move out of the District. Chair Knight advised that the committee was proposed to be comprised of three Directors. It would not include members of the public. Chair Knight offered a motion that was seconded by Director Markey to authorize the Water Demand Committee to jointly meet with the MRWPCA Committee assigned to oversee development of the GRP and report back to the Board. The motion was adopted unanimously on a vote of 6 – 0. Directors Edwards, Foy, Knight, Lehman, Markey and Pendergrass voted in favor of the motion. Director Potter was absent. The following comments were directed to the Board during the public comment period on this item. (1) John Fischer, resident of Pacific Grove, expressed support for the joint effort to coordinate the Groundwater Replenishment Project. (2) Madeleine Clark, Elkhorn Slough Coalition, asked if a member of the committee would be required to resign, should the member move out of the District. District Counsel Laredo confirmed that if a Director moved out of the District, that Director must resign. (3) David Dilworth, HOPE, expressed concern that Board members were busy with other responsibilities and would not have time to serve on the Joint Board Leadership Committee. According to Mr. Dilworth, the Groundwater Replenishment Project could be discussed by an existing Board committee. On a motion by Director Edwards and second by Director Foy, the Board authorized the General Manager to send a letter to California State Assembly members expressing opposition to AB 737. The motion was adopted unanimously on a vote of 6 – 0. Directors Edwards, Foy, Knight, Lehman, Markey and Pendergrass voted in support of the motion. Director Potter was absent. The following comments were directed to the Board during the public comment period on this item. (1) David Dilworth expressed opposition to AB 737. (2) Robert Greenwood urged the Board to strongly oppose AB 737. There was no Board discussion of these items. The meeting was adjourned at 10 PM.

CALL TO ORDER/ROLL CALL PLEDGE OF ALLEGIANCE ORAL COMMUNICATIONS CONSENT CALENDAR 1. Consider Adoption of Minutes of the December 12, 2005 Regular Board Meeting 2. Ratify Board Committee Assignments for Calendar Year 2006 3. Refer Items to Technical Advisory Committee (TAC) 4. Consider Approval of Annual Update on Investment Policy 5. Consider Adoption of Treasurer’s Report for November 2005 PRESENTATIONS 6. Update on Carmel Area Wastewater District/Pebble Beach Community Services District Expanded Recycled Water Project a. Ray von Dohren, General Manager – Carmel Area Wastewater District b. Richard Andrews, General Manager and Mike Niccum, District Engineer – Pebble Beach Community Services District c. Mark Stilwell, Pebble Beach Company 7. Water Supply Project Alternatives Update GENERAL MANAGER’S REPORT 8. Status Report on California-American Water Compliance with State Water Resources Control Board Order 95-10 ATTORNEY’S REPORT 9. Report on 5:30 PM Closed Session of the Board DIRECTORS’ REPORTS 10. Oral Reports on Activities of County, Cities, Other Agencies/Committees/ Associations PUBLIC HEARINGS 11. Consider Appeal of Staff Decision Regarding Classification of Dormitory Water Use – Robert Louis Stevenson School (APN 008-022-003, 008-022-012, 008-022-020, 008-022-021, 088-022-023, 088-022-033, 008-031-002, 008-031-013, 008-532-008, 008-532-009, 008-532-010) ACTION ITEMS 12. Consider Supplemental Appropriation and Authorization to Contract with Bookman-Edmonston/GEI Consultants to Prepare Comparison of Desalination Project Costs and Timelines 13. Consider Creation of a Community Advisory Committee and Charge 14. Consider Creation of a Water Supply Committee and Charge 15. Consider Request of Monterey Regional Water Pollution Control Agency (MRWPCA) to Form Joint Board Leadership Committee to Coordinate the Groundwater Replenishment Project (GRP) 16. Review and Potentially Determine District Board Policy Position Regarding AB 737 INFORMATIONAL ITEMS/STAFF REPORTS 17. Letters Received 18. Committee Reports 19. Strategic Planning Initiatives Progress Report 20. Carmel River Fishery Report 21. Water Conservation Program Report 22. Monthly Allocation Report 23. November and December 2005 California-American Water Company Production Reports 24. Monthly Water Supply Status Report 25. Quarterly Water Supply Project Status Report 26. Quarterly Irrigation Program and Riparian Projects Report 27. Quarterly Carmel River Erosion Protection and Restoration Projects Report 28. Quarterly Water use Credit Transfer Status Report ADJOURNMENT

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David A. Berger, Secretary to the Board

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A. Tavana/1/26-06 Board Minutes/7 pages/2-11-06