Exhibit 18-E

FINAL MINUTES

Monterey Peninsula Water Management District

Water Demand Committee

May 22, 2002

I. Call to Order

The meeting was called to order at 8:00 AM in the District=s conference room.

Committee members present: Molly Erickson, Chair

Judi Lehman

Zan Henson

Committee members absent: None

Staff members present: Ernesto A. Avila, General Manager

Henrietta Stern, Project Manager/Public Information Rep.

Arlene Tavani, Executive Assistant

District Counsel present: David C. Laredo

II. Concur with Approach Regarding Proposed Changes to Ordinance No. 96

The committee discussed several of the issues enumerated in the staff report, and recommended changes that should be made to Ordinance No. 96. The committee developed specific recommendations on the issues listed below.

Issue 6 – Replace the terms “single-connection system” and “multiple-connections system” -- The committee agreed to add the terms “single-parcel connection system” and “multiple-parcel connection system” to the definitions listed in the ordinance and to utilize those terms throughout the ordinance. In addition, the definition of “single-parcel connection system” will be amended to more accurately describe the term.

Issue 11 – Rule 22-C(5), Valid Superior Water Rights – District Counsel Laredo answered questions from the committee regarding water rights law, and explained that each applicant must provide evidence of a valid water right. When installation of a well could affect another water user, the applicant must provide evidence of a superior water right. In many cases, a water user will have a right that is co-equal with another user. In those instances, the applicant must broker agreements with other water users that share the co-equal right, before a permit for a water distribution would be issued. The committee agreed that language should be added to clarify that a property with a valid superior water right can affect a user who has a junior right.

Issue 12 – Rule 40-A – The Committee agreed to replace outdated language in Rule 40-A of the MPWMD Rules and Regulations regarding methodology used to set annual system capacity (production) limit for systems, with language describing current methodology.

Issue 14, Rule 20-A, delete phrase referring to old definition of single-connection – The Committee took no action on this item. Committee members acknowledged the need to delete text from Rule 20-A, but agreed that they were not prepared to make a decision on how to handle the long-standing single-connection systems that were “grandparented” in under Ordinance No. 96. District Counsel was directed to develop language to address this issue, and to present that language for consideration at a future Water Demand Committee meeting.

During further discussion of the issues related to Ordinance No. 96, the Committee agreed to discuss the following items at a future Water Demand Committee meeting: (a) assess the staffing needs associated with changes to Ordinance No. 96; and (b) language that would allow a change to Rule 22 A.1.a and A.2.a that refers to the timeline for setting a public hearing following environmental review of a water distribution system permit application.

Public Comment – Fran Farina requested that the District coordinate with the Monterey County Environmental Health Department on the number of wells that are drilled because an applicant can submit several well permit applications before a well is actually drilled. She also expressed concern about the proliferation of wells being drilled in the Carmel Valley Upland area. Ms. Farina suggested that the District could enlarge the scope of Ordinance No. 96 to include the Carmel Valley Upland areas. However, she did not recommend that the District take the issue up at that time. As an alternative, she requested that the District monitor the number of wells being drilled in the Upland area and the amount of water that is being withdrawn by those wells.

Staff member Henrietta Stern stated that enlarging the scope of Ordinance No. 96 had been discussed previously, but it was determined that staffing levels were not sufficient to process the significant increase in applications that would result from the change. General Manager Avila noted that the District is planning to provide more detailed reports on water production in the Laguna Seca and Carmel Valley areas.

III. Other Items

There was no further discussion of additional topics.

IV. Set Future Meeting Date

The Committee agreed to meet at 8:00 AM on July 9 and August 6, 2002.

V. Adjourn

The meeting was adjourned at approximately 9:30 AM.

U:\staff\word\boardpacket\2003\2003boardpacket\20030421\InfoItems_Reports\18\item18_exh18e.doc

A. Tavani, Water Demand, Minutes, 2 pages