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

The meeting was called to order at 7 PM in the Boardroom of the Monterey Regional Water Pollution Control Agency offices. 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 David Potter – Monterey County Board of Supervisors (Arrived at 7:10 PM) Directors absent: None General Manager present: David A. Berger District Counsel present: Fran Farina The assembly recited the Pledge of Allegiance. No comments were directed to the Board during Oral Communications. On a motion by Director Pendergrass and second by Director Edwards, the Consent Calendar was adopted on a vote of 6 – 0. Directors Edwards, Foy, Knight, Lehman, Markey and Pendergrass voted in favor of the motion. Director Potter was absent for the vote. Approved. Approved. Approved Approved. Approved. Hank Smith of the Carmel River Steelhead Association presented a framed certificate of appreciation to Larry Hampson, Water Resources Engineer, in recognition of his work on development of a Large Woody Debris Project for the Carmel River Lagoon that has greatly improved habitat for the Carmel River steelhead. Mr. Smith praised Mr. Hampson for his dedication to the development of the project despite encountering many setbacks in the process. Henrietta Stern, Project Manager, provided a report to the Board. A summary is on file at the District office and can be viewed on the District’s website. In response to a question from the Board, Ms. Stern explained that some of the concerns about the proposed Phase 1 Aquifer Storage and Recovery Project (ASR) raised by the California Department of Fish and Game and NOAA Fisheries were responded to by development of measures to ensure that Carmel River water injected into the Seaside Basin would be used only to reduce the need for pumping from the Carmel River basin in the summer months. Staff members from the District and California American Water (Cal Am) discussed the issues and were able to develop procedures that will assure the agencies that the injected water would not be used to solve over-pumping in the Seaside Basin. Joe Oliver, Water Resources Division Manager, presented the report. A summary of the report is on file at the District office and can be viewed at the District’s website. Mr. Oliver reported that between October 1, 2005 and July 12, 2006 Cal Am production from the Carmel River was 493 acre-feet below the year-to-date production target established as a result of SWRCB Order 95-10. In response to a question from the Board, Mr. Oliver explained that injection of Carmel River excess winter flows into the Seaside Basin does not increase the operating yield for the Cal Am system. All users in the basin are assigned an allocation from the Seaside Basin that takes into account natural recharge rates. The artificial recharge represented by the ASR project does not effect Cal-Am’s allocation from the basin. The Watermaster should discuss this issue in the future. David Berger, General Manager, reported that on June 29, 2006, the Board conducted a Closed Session with labor negotiators regarding labor contracts with the General and Management bargaining units. The Board provided direction to the negotiator. No reportable action was taken. Mr. Berger reported that at the July 17, 2006 Closed Session the Board discussed the same labor contracts under item 3. Direction was given to the negotiators and no reportable action was taken. District Counsel, Fran Farina, reported that at the July 17, 2006 Closed Session, there was no discussion of item 4.A. A report was provided to the Board on items 4.B and 4.C, but no reportable action was taken. Action was taken on item 4.D as the Board directed that the District will not appeal the appellate court decision. The Board also deferred to District Counsel’s determination regarding pursuit of a matter relate to item 4.D. Chair Knight reported that the California Public Utilities Commission is conducting a public hearing on July 18, 2006 at 7 PM at the Monterey Marriott in the San Carlos Ballroom. The topic is Cal Am’s request to the CPUC to recover costs for Coastal Water Project pre-construction expenses and to begin collecting contributions from the ratepayers for the project. Director Foy announced that he attended the formal change of command ceremony when Colonel Pamela Martis was given command of the Defense Language Institute. Mr. Foy stated that he was pleased to know that Colonel Martis planned to work closely with the community, just as her predecessor Colonel Jeffrey Cairns had. On a motion by Director Pendergrass and second by Director Edwards, the staff recommendation to adopt Ordinance No. 124 and transmit a Notice of Determination to the Monterey County Clerk was approved unanimously on a roll-call vote of 7 – 0. No comments were directed to the Board during the public hearing on this item. Director Edwards offered a motion to adopt the first reading version of Ordinance No. 126 and schedule the ordinance for second reading on August 21, 2006. The motion was seconded by Director Foy and adopted on a roll-call vote of 5 – 2. Directors Edwards, Foy, Knight, Markey and Pendergrass voted in favor of the motion. Directors Lehman and Potter were opposed. No comments were directed to the Board during the public hearing on this item. Chair Knight made a motion to defer action on amending the contract with Bookman Edmonston/GEI until the September 25, 2006 Board Strategic Planning Workshop. Staff was directed to compile comments and additional information received by project proponents after the report was released, and attach them to the report as an addendum to be presented to the Board prior to the September 25, 2006 Strategic Planning Workshop. In addition, the Board will review the updated Water Supply Alternatives Matrix at the September 18, 2006 Board meeting. Review of this supplemental information will prepare the Board to identify what issues should be addressed in an amended report. The motion was seconded by Director Edwards and adopted unanimously on a vote of 7 – 0. No comments were directed to the Board during the pubic comment period on this item. There was no Board discussion of the Informational Items/Staff Reports. The meeting was adjourned at 8:45 PM.

CALL TO ORDER/ROLL CALL PLEDGE OF ALLEGIANCE ORAL COMMUNICATIONS CONSENT CALENDAR 1. Consider Adoption of Minutes of the June 22, 2006 Regular Board Meeting and June 29, 2006 Special Meeting/Board Workshop 2. Consider Extension of United States Geological Survey Cooperative Agreement for Water Year 2007 3. Consider Approval of Annual Memorandum of Agreement between the MPWMD and the California Department of Fish and Game – Sleepy Hollow Steelhead Rearing Facility Operations 4. Consider Approval of Renewed Memorandum of Agreement between the MPWMD and the Carmel River Steelhead Association – Sleepy Hollow Steelhead Rearing Facility Operations 5. Consider Adoption of Treasurer’s Report for May 2006 PRESENTATIONS 6. Presentation of Certificate of Appreciation to Larry Hampson, Water Resources Engineer, by Representative of the Carmel River Steelhead Association for Work on the Large Woody Debris Project 7. Water Supply Project Alternatives Update GENERAL MANAGER’S REPORT 8. Status Report on California-American Water Company Compliance with State Water Resources Control Board Order 95-10 ATTORNEY’S REPORT 9. Reports on June 29, 2006 and July 17, 2006 Closed Sessions of the Board July 17, 2006 Closed Session Agenda 1. Public Comment 2. Adjourn to Closed Session 3. Conference with Labor Negotiators (Gov. Code 54957.6) Agency Designated Representatives: Ellen Aldridge, Rick Dickhaut, Cynthia Schmidlin, David A. Berger Employee Organization: General and Management Bargaining Units represented by Laborer’s International Union of North America, AFL-CIO, (LIUNA/UPEC) Local 270 4. Conference with Legal Counsel – Existing Litigation (Gov. Code 54956.9 (a)) A. Save Our Carmel River; Patricia Bernardi; and The Open Monterey Project v. MPWMD; MPWMD Board; and the City of Seaside; Monterey County Superior Court Case No. M72877 B. Application of California American Water Company to the Public Utilities Commission Application No. 04-09-019 – Coastal Water Project C. Application of California American Water Company to the Public Utilities Commission Application No. 05-02-012 – General Rate Case D. Save Our Carmel River; Patricia Bernardi; and The Open Monterey Project v. MPWMD; MPWMD Board; and the City of Monterey: Monterey County Superior Court Case No. M72061 DIRECTORS’ REPORTS 10. Oral Reports on Activities of County, Cities, Other Agencies/Committees/ Associations PUBLIC HEARINGS 11. Consider Second Reading and Adoption of Ordinance No. 124 – Water Distribution System Regulation Amendment Ordinance (Rule 20-C) 12. Consider First Reading of Ordinance No. 126 – Setting Compensation for Board Members ACTION ITEMS 13. Consider Amendment to Agreement with Bookman-Edmonston/GEI Consultants to Revise Final Report on Seawater Desalination Project Alternatives INFORMATIONAL ITEMS/STAFF REPORTS 14. Letters Received 15. Committee Reports 16. Strategic Planning Initiatives Progress Report 17. Carmel River Fishery Report 18. Water Conservation Program Report 19. Monthly Allocation Report 20. Monthly California American Water Production Report 21. Monthly Water Supply Status Report 22. Quarterly Water Supply Project Status Report 23. Quarterly Irrigation Program and Riparian Projects Report 24. Quarterly Carmel River Erosion Protection and Restoration Projects Report 25. Quarterly Water Use Credit Transfer Status Report ADJOURNMENT

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David A. Berger, Secretary to the Board

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A Tavani/5 pages/8-9-06/7-17-06 Board Meeting Minutes