FINAL MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District December 11, 2006

The meeting was called to order at 7 PM in the District’s conference room. 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) David Pendergrass – Mayoral Representative David Potter – Monterey County Board of Supervisors (Arrived at 8:30 PM) Board members absent: None General Manager present: David A. Berger District Counsel present: David Laredo The assembly recited the Pledge of Allegiance. The following comments were directed to the Board during Oral Communications. (1) David Dilworth, representing Helping Our Peninsula’s Environment (HOPE), requested that the Board task District Counsel Laredo to present a legal opinion as to whether or not Director Foy is eligible to serve on the Board. Mr. Dilworth alleged that Director Foy might not meet residency requirements because he has a second home in Arizona, and a District document states that “if mail is sent first-class via USPS it will automatically be forwarded to the AZ address.” He also urged the Board to proceed with completion of studies on the District’s proposed 8.400 acre-feet per year Sand City Desalination Project. (2) Robert Greenwood, representing the Carmel Valley Association, stated that throughout 2006 the Board took no action to advance development of a water supply project, other than ensuring progress on the Aquifer Storage and Recovery Project. He also noted that the proposed Monterey Bay Regional Water Authority (MBRWA) has been inactive and remains unfunded. He stated that the District’s first priority should be to work with Monterey County to activate the MBRWA. Director Pendergrass made a motion that was seconded by Director Edwards to adopt the Consent Calendar items, except for Item 3 that would be pulled for separate consideration. The motion was approved on a vote of 6 – 0. Director Potter was absent for the vote. Adopted. Adopted. Director Markey made a motion that was seconded by Director Lehman, to approve the conflict of interest code as presented, with a provision that the Board will review campaign finance reform rules adopted by the City of Pacific Grove that mandate reporting of campaign contributions, and consider adoption of similar rules at a future meeting. Director Markey subsequently withdrew the motion. Director Markey made a motion that was seconded by Director Lehman, to adopt the conflict of interest code as presented. The motion was adopted on a vote of 6 – 0. Director Potter was absent for the vote. Director Markey offered a motion that was seconded by Director Lehman, to direct the Administrative Committee to consider development of campaign finance reporting rules for the District. The motion was adopted on a vote of 4 – 2. Directors Knight, Lehman, Markey and Edwards voted in favor of the motion. Directors Pendergrass and Foy were opposed. Director Potter was absent for the vote. During the public comment period on this item, David Dilworth, representing HOPE, spoke in support of the proposed conflict of interest code. Mr. Dilworth noted that he interpreted the proposed code to mandate reporting of campaign contributions received by directors, but he did not find that specifically stated in the code. He asked that the code be amended to state that reporting of campaign contributions is required. Adopted. Adopted. Adopted. Adopted. A summary of General Manager Berger’s report is on file at the District office and can be viewed on the District’s website. During the public comment period on this item, David Dilworth, representing HOPE, suggested that two modifications be made to the Strategic Plan: (1) page 2, item 3 be expanded to include the public, the rate payers and the voters; (2) the language of the fifth Three-Year Goal be amended to delete the words “the environment” and replace them with the words “our environment.” He also suggested that a list of scheduled future agenda items be provided each month with the Strategic Plan. A summary of Henrietta Stern’s report is on file at the District office and can be viewed on the District’s website. A summary of Darby Fuerst’s report is on file at the District office and can be viewed on the District’s website. Compliance with State Water Resources Control Board (SWRCB) Order 95-10 -- He reported that California-American Water (Cal-Am) production from the Carmel River between October 1 and December 6, 2006 was 1,626 acre-feet (AF), which was 36 AF under the SWRCB-based production limit for that time period. Compliance with Seaside Groundwater Basin Adjudication Decision -- Between January and November 2006, Cal-Am production from the Coastal Subareas of the Seaside Basin was 2,937, which is below the limit of 3,504 AF per calendar year. During the same time period, production from the Laguna Seca Subarea was 411 AF, which exceeds the limit of 345 AF per calendar year. The Seaside Groundwater Basin Watermaster will levy replenishment assessment fees on Cal Am for exceeding the production limit. The following comments were directed to the Board during the public comment period on this item. (1) Robert Greenwood asked for a description of the Watermaster. Chair Knight explained that the Watermaster is a court appointed board that is chaired by Ralph Rubio. The Watermaster usually meets on the first Wednesday of each month at 1:30 PM in the Seaside Community Center. (2) David Dilworth, representing HOPE, requested that the monthly report also provide information on the amount of water produced by non-Cal-Am pumpers in the Laguna Seca Subarea. Mr. Dilworth reminded the group that although the SWRCB has allowed Cal Am to produce 11,285 AF of water from the Carmel River Basin, the actual water right is 3,376 AF. District Counsel Laredo reported that during the Closed Session he provided status reports on items 3A through 3E. No action was taken on those items. Regarding Item 4, direction was given to the labor negotiator but no reportable action was taken. Director Edwards asked if District staff will work at the Aquifer Storage and Recovery Well #2 site during the 12/24/06 through 1/1/06 holiday furlough. General Manager Berger reported that District staff members were authorized to participate in the drilling effort if necessary. Staff members were also authorized to participate in fish rescue operations if an emergency situation arose. Director Edwards announced that Director Pendergrass and Senior Hydrologist, Darby Fuerst, would celebrate their birthdays the following day on December 12, 2006. In addition, District Counsel Laredo’s wife and two of his sons would celebrate their birthdays on December 12, 13 and 14. Director Lehman asked if staff could present monthly reports on non-Cal-Am production within the District. Mr. Fuerst responded that the District does not have access to that information on a monthly basis. Non-Cal-Am production is reported to the District annually, with a few exceptions. Director Knight reported that the Watermaster is in the process of reviewing contracts for monitoring of the Seaside Groundwater Basin as required in the adjudication decision. She also reported that she attended the November meeting of the Monterey Regional Water Pollution Control Agency Board of Directors and presented Resolution 2006-05 that the MPWMD Board adopted expressing support for the proposed Seaside Basin Groundwater Replenishment Projects. Director Pendergrass thanked Chair Knight for presenting the resolution to the MRWPCA Board. He stated that the gesture highlighted the goodwill and cooperation between the two agencies. Director Pendergrass offered a motion to approve the first reading of Ordinance No. 127. The motion was adopted unanimously on a vote of 6 – 0. Director Potter was absent for the vote. During the public hearing on this item, David Dilworth, representing HOPE, expressed support for the ordinance. He asked if studies have been done to document reports that the high efficiency toilets must be flushed twice after each use, thereby increasing water use. District Water Demand Manager, Stephanie Pintar, responded that performance of the toilets has improved over the past 10 years. The District does have information on performance standards that is available to the public. Director Edwards made a motion that was seconded by Director Lehman, to adopt the January through March 2007 Quarterly Water Supply and Budget. The motion was approved unanimously on a vote of 6 – 0. Director Potter was absent for the vote. Director Potter joined the meeting at approximately 8:30 PM, during the discussion of Action Item 15. On a motion by Director Edwards and second by Director Potter, the Water Resources Division reclassification and change to the District’s Organization Chart were unanimously approved on a vote of 7 – 0. During the public comment period on this item, David Dilworth, representing HOPE, stated that he considers Joe Oliver to be one of the highest caliber of public agency employees he has encountered. Mr. Dilworth expressed support for the staff recommendation. Director Lehman offered a motion that was seconded by Director Markey, to approve formation of the CAC and adopt the committee charge as presented. The motion was approved unanimously on a vote of 7 – 0. The following comments were directed to the Board during the public comment period on this item. (1) Bruce Crist, representing the New Monterey Neighborhood Association, expressed support for establishment of the Community Advisory Committee (CAC). He encouraged the Board to maximize the number of persons on the committee who were “residents”, not affiliated with special interest groups. (2) Dewey Baird, representing Pamela Martis, Garrison Commander for the Presidio of Monterey, stated that Commander Martis supports formation of the CAC. He asked that the Presidio of Monterey be considered for membership on the CAC. He noted that the Presidio has implemented some very costly water conservation programs, including installation of water free urinals. A motion was made by Director Foy with a second by Director Edwards, to nominate Director Pendergrass for the position of Board Chair. A motion was made by Director Markey with a second by Director ________, to nominate Director Lehman to the position of Board Chair. Director Foy made a motion that was seconded by Director Edwards to close the nominations. The motion was approved unanimously on a vote of 7 – 0. On a vote of 4 - 3, Director Pendergrass was elected to the position of Board Chair. Director Markey made a motion that was seconded by Director _______, to nominate Director Lehman to the position of Vice Chair. Director Lehman subsequently withdrew her name from consideration. Director Potter made a motion that was seconded by Director ________ ,to nominate Director Edwards to the position of Vice Chair. The motion was approved unanimously on a vote of 7 – 0. Director Markey offered a motion that was seconded by Director Potter, to elect David Berger to the position of Board Secretary and Rick Dickhaut to the position of Board Treasurer. The motion was approved unanimously. Directors Markey and Potter suggested that the Administrative Committee consider development of language that would amend the District Meeting Rules to establish rotation of Directors into the position of Chair. There was consensus among the Directors for the Administrative Committee to consider the issue. On a motion by Director Edwards and second by Director Lehman, the Board authorized the General Manager to negotiate and enter into a service agreement to provide technical support services to the Watermaster. The motion was adopted unanimously on a vote of 7 – 0. During the public comment period on this item, David Dilworth, representing HOPE, expressed support for the proposal. According to Mr. Dilworth the District bid less than private consultants for completion of many tasks listed in the proposal. General Manager Berger explained that the District’s bids reflect management of the project, so they were low compared to the consulting firms whose bids reflect time and materials for completion of specific tasks. The meeting was adjourned at 9:25 PM.

CALL TO ORDER/ROLL CALL PLEDGE OF ALLEGIANCE ORAL COMMUNICATIONS CONSENT CALENDAR 1 Consider Adoption of Minutes of the Regular Board Meeting of November 20, 2006 2 Authorize Expenditure of Budgeted Funds for Contract with Golden State Planning and Environmental Consulting to Provide Water Distribution System Permit Processing Assistance for FY 2005-2006 3 Approve Amendments to Conflict of Interest Code for Monterey Peninsula Water Management District 4 Review and Accept Independent Auditor’s Report for Fiscal Year 2005-2006 5 Receive and File First Quarter Financial Activity Report for Fiscal Year 2006-2007 6 Consider Approval of First Quarter 2006-2007 Investment Report 7 Consider Adoption of Treasurer’s Report for September 2006 PRESENTATIONS 8 Strategic Plan Update 9 Water Supply Project Alternatives Update GENERAL MANAGER’S REPORT 10 Status Report on California-American Water Compliance with State Water Resources Control Board Order 95-10 and Seaside Groundwater Basin Adjudication Decision ATTORNEY’S REPORT 11 Report on 5:30 PM Closed Session of the Board 3. Conference with Legal Counsel – Existing Litigation (Gov. Code 54956.9 (a)) A. Application of California American Water Company to the Public Utilities Commission Application No. 04-09-019 – Coastal Water Project B. Application of California American Water Company to the Public Utilities Commission Application No. 05-02-012 – General Rate Case C. Save Our Carmel River; Patricia Bernardi; The Open Monterey Project v. MPWMD; MPWMD Board; and the City of Seaside; Monterey County Superior Court Case No. M72877 D. State Water Resources Control Board Permit No. 7130B E. State Water Resources Control Board Permit No. 20808 4. Conference with Labor Negotiator (Gov. Code 45957.6) Agency Designated Representative: Board Chairwoman Michelle Knight Unrepresented Employee: General Manager DIRECTORS’ REPORTS (INCLUDING AB 1234 REPORTS ON TRIPS, CONFERENCE ATTENDANCE AND MEETINGS) 12 Oral Reports on Activities of County, Cities, Other Agencies/Committees/ Associations PUBLIC HEARINGS 13 Consider First Reading of Ordinance No. 127, Expanding the Rebate Program to Include Rebates for High Efficiency Toilets 14 Consider Adoption of January through March 2007 Quarterly Water Supply Strategy and Budget ACTION ITEMS 15 Approve Water Resources Division Reclassification and Change to the District’s Organization Chart 16 Consider Adoption of Board Public Outreach Committee’s Recommendation Regarding Formation of Ad Hoc Community Advisory Committee (Continued from October 16, 2006 Board Meeting) 17 Consider Nominations for Board Chair and Vice-Chair for 2007 and Conduct Elections for Board Officers INFORMATIONAL ITEMS/STAFF REPORTS 18 Letters Received 19 Committee Reports 20 Carmel River Fishery Report 21 Water Conservation Program Report 22 Monthly Allocation Report 23 Monthly California American Water Production Report 24 Monthly Water Supply Status Report SUPPLEMENTAL ACTION ITEM 25 Consider Authorizing the General Manager to Negotiate and Execute an Agreement with the Seaside Groundwater Basin Watermaster to Provide Program Management Services for the Seaside Basin Monitoring and Management Program ADJOURNMENT

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David A. Berger, Secretary to the Board

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