FINAL MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District April 17, 2006

The meeting was called to order at 7:05 PM in the Boardroom of the Monterey Regional Water Pollution Control Agency offices. Board members present: Michelle Knight, Chair – Division 4 Judi Lehman, Vice Chair – Division 2 Alvin Edwards – Division 1 Kristi Markey – Division 3 Larry Foy – Division 5 (Participated by telephone from Surprise, Arizona) David Pendergrass – Mayoral Representative David Potter – Monterey County Board of Supervisors Board members absent: None General Manager present: David A. Berger District Counsel present: David C. Laredo The assembly recited the Pledge of Allegiance. George Riley addressed the Board. He urged the Board to support SB1630 because it would allow public agencies to participate in a cooperative environment when negotiating for purchase of a private utility. He proposed that adoption of SB1630 would be advantageous to any public entity that bid for purchase of the local California American Water System. On a motion by Director Pendergrass and second by Director Edwards, the Consent Calendar items were approved unanimously on a vote of 7 – 0. Approved. Approved. Approved. Approved. Henrietta Stern, Project Manager, presented the report. A summary is on file at the District office. General Manager Berger advised the Board that Poseidon Resources, the consultant working with Pajaro/Sunny Mesa Community Services District on development of a desalination plant at Moss Landing, has not submitted project cost information requested by the District. Director Potter suggested that the Board should decide if the comparison of desalination project costs and timelines study could be completed without the requested information. Dave Dettman, Senior Fisheries Biologist, presented the report. A summary is on file at the District office. He reported that 24,336 fish were rescued and reared at the Sleepy Hollow Steelhead Rearing Facility, and 13,911 survived and were released into favorable habitat on the Carmel River. That equates to a 57% survival rate, which is higher than the summer survival rate of 10% to 40% under natural conditions. During the question and answer period on this item, Director Potter proposed that regulatory agencies, public-interest groups, and the District should work together to improve the survival rate of Carmel River Steelhead. He suggested that within six months such a group should develop a plan for managing the Carmel River Lagoon, and moving the steelhead upstream without capturing and trucking them. General Manager Berger announced that David Dettman will retire from the District in July 2006. Joseph Oliver, Water Resources Division Manager, presented the report. A summary is on file at the District office. He stated that as of April 11, 2006, Cal-Am production from the Carmel River was 323 acre-feet under the annual limit established as a result of SWRCB Order 95-10. In response to questions from the Board, he stated that Seaside Basin coastal wells were not in production at that time. He also reported that aquifer storage and recovery activities were continuing at the Santa Margarita test injection well site. He estimated that if Carmel River flow continued at a study rate, approximately 500 acre-feet of Carmel River water could be injected into the Seaside Basin by the end of May 2006. Larry Hampson, Water Resources Engineer, presented the report which is on file at the District office. He explained that the District initiated a temporary Declaration of Emergency Status for the Carmel River between Via Mallorca Bridge and Rancho San Carlos Road Bridge. Since then the District and affected property owners have agreed to share the cost of long-term streambank stabilization work in the area. During the question and answer period, Director Potter stated that it might be possible for the District to take a partial leadership role in organizing a group larger than the Carmel Watershed Conservancy to address river management issues such as fish, river flow, and property preservation issues. He also expressed a desire for a flood management plan to be developed for the Carmel River. Mr. Hampson noted that the District hopes to update the Carmel River Management Plan with Proposition 50 planning grant funds. An updated plan could address some of the concerns expressed by Director Potter. He also stated that the District is focused on erosion control and habitat protection, and that the Monterey County Water Resources Agency is responsible for flood control. Directors Knight and Potter suggested that entities with various missions could collaborate on comprehensive river management. District Counsel, David Laredo, reported that he provided status reports to the Board on closed session items 3 A through E and no action was taken. The Board did take action on two items. (1) On a motion by Director Knight and second by Director Foy, the Board voted to not appeal Superior Court Judge Randall’s final decision in California-American Water v. City of Seaside et. al., Monterey County Superior Court Case No. M663443. The motion was adopted on a vote of 4 to 1. Directors Foy, Knight, Markey and Lehman voted in favor of the motion. Director Edwards was opposed. Director Potter was absent and Director Pendergrass excused himself from the discussion and vote due to a conflict of interest. (2) The Board voted to engage Ellen Aldrich for labor relations consulting services relating to District labor organizations. The Board approved a pay rate of $210 per hour for a not-to-exceed amount of $17,000. Voting in favor of the motion were Directors Foy, Pendergrass, Knight, Edwards and Markey. Voting in opposition was Director Lehman. Director Potter was absent for the vote. The Board also discussed a case of significant exposure to litigation listed as item 4 on the agenda. No action was taken on that item. Director Lehman commented on a letter, from Hebard Olson suggesting changes to the format of PowerPoint presentations so they would be easier to view by the television audience. She suggested that graphs prepared by staff use various patterns, instead of colors to differentiate between fields. Director Markey reminded the Board and viewers that all PowerPoint presentations are available for view at the District’s website on the day following the Board meeting. She suggested that the televised broadcast would be improved if the bottom of the viewing screen included text identifying the topic of discussion. General Manager Berger advised the Board that the quality of the broadcast will improve when the Board meetings are broadcast for the District conference room, because an updated method of broadcasting the presentations will be implemented. Director Potter spoke on the May 10, 2006 meeting regarding formation of the Monterey Bay Regional Water Authority. He stated that there was consensus among the meeting participants that a new regional entity should review regional water needs and solutions. Director Pendergrass noted that the concern among the participants was how to pay for the work of the Monterey Regional Water Authority and how to pay for a new water supply project. Chair Knight reported that the first meeting of the Seaside Groundwater Basin Watermaster was conducted on April 5, 2006. Mr. Berger reported that the Watermaster Technical Committee also met and developed a timeline and assigned tasks for completion of the Seaside Basin monitoring and management plan mandated by the adjudication lawsuit. He noted that Joe Oliver is the lead staff person from the District on preparation of the monitoring and management plan. District Counsel Laredo described the bill. Director Edwards stated that he added this item to the agenda so that the public would be aware of the proposed legislation. The Directors commented on the legislation. District Counsel Laredo reminded the Board that Meeting Rule 6 requires Directors to clarify that they are speaking as individuals and not on behalf of the Board when making oral or written comments. The meeting was recessed from 8:40 PM to 8:45 PM. At the onset of the recess, Director Foy chose to end his participation in the meeting. No action was taken by the Board. Chair Knight noted that written comments on the Draft EIR/EA will be received through May 8, 2006. The following oral comments on the Draft EIR/EA were received. (1) Robert Greenwood read a letter on file at the District office. He requested that the Final EIR address the cost of installing a permanent pipeline connection to the Cal-Am system, large enough to serve Phase 2 of the project. (2) John Fischer, a resident of Pacific Grove and a participant in the Sanctuary/Coastal Commission review of the coastline for coastal erosion. At a recent committee meeting, a question was raised about the old Monterey Bay oil storage plant, and whether that could be a problem. He was later advised by Joe Oliver that it would not affect the aquifer. Mr. Fischer thanked Mr. Oliver for taking the time to respond to his question. Stephanie Pintar, Water Demand Manager reviewed Rules 11 through 24 of the proposed conceptual ordinance. During the presentation, Director Potter left the meeting at 9:20 PM and Director Edwards exited the meeting at 9:30 PM. Staff was directed to continue the review of proposed Rules 25 through 30 at the May 15, 2006 discussion of the conceptual ordinance. No public comment was received on this item. Director Markey made a motion to adopt the proposed Board expense reimbursement policy, modify Meeting Rules 9 and 10, and require that specific staff members attend ethics training in accordance with AB1234. In addition, the Administrative Committee was directed to develop a procedure for reporting reimbursable expenses and to review the rules that allow annual cost-of-living increases on the $100 per day stipend received for attendance at meetings. The motion was seconded by Director Pendergrass and approved on a vote of 4 – 0. Directors Knight, Lehman, Markey and Pendergrass voted in favor of the motion. Directors Edwards, Foy and Potter were absent for the vote on this item. There was no Board discussion of the Informational Items/Staff Reports. The meeting was adjourned at 10:15 PM.

CALL TO ORDER/ROLL CALL PLEDGE OF ALLEGIANCE ORAL COMMUNICATIONS CONSENT CALENDAR 1. Receive and File District-Wide Annual Water Distribution System Production Summary Report for Water Year 2005 2. Receive and File District-Wide Annual Water Production Summary Report for Water Year 2005 3. Consider Approval of Revised Text for Draft 2005 MPWMD Annual Report 4. Consider Adoption of Treasurer’s Report for February 2006 PRESENTATIONS 5. Water Supply Project Alternatives Update 6. 2005-06 Steelhead Rescue/Rearing Season Report GENERAL MANAGER’S REPORT 7. Status Report on California-American Water Compliance with State Water Resources Control Board Order 95-10 8. Report on Carmel River Erosion Protection Work 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 11. Report from Director Edwards on SB1630 (Maldanado) re Investor Owned Utility First Right Buyout PUBLIC HEARINGS 12. Receive Oral Comment on Draft EIR/EA on Phase 1 Aquifer Storage and Recovery Project ACTION ITEMS 13. Discuss Conceptual Ordinance Clarifying Rules Related to Water Permits and Credits 14. Consider Adoption of Board Expense Reimbursement Policy and Modification of the Meeting Rules to Comply with AB1234 and Designate Employees Required to Attend Ethics Training INFORMATIONAL ITEMS/STAFF REPORTS 15. Letters Received 16. Committee Reports 17. Strategic Planning Initiatives Progress Report 18. Carmel River Fishery Report 19. Water Conservation Program Report 20. Monthly Allocation Report 21. Monthly California American Water Production Report 22. Monthly Water Supply Status Report 23. Quarterly Water Supply Project Status Report 24. Quarterly Irrigation Program and Riparian Projects Report 25. Quarterly Carmel River Erosion Protection and Restoration Projects Report 26. Quarterly Water Use Credit Transfer Status Report ADJOURNMENT

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David A. Berger, Secretary to the Board

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