Draft 8

August 19, 2003

ADDENDUM NO. 2 TO

MEMORANDUM OF AGREEMENT BETWEEN

MONTEREY COUNTY WATER RESOURCES AGENCY,

MONTEREY PENINSULA WATER MANAGEMENT DISTRICT AND

PAJARO VALLEY WATER MANAGEMENT AGENCY

(known as Monterey County Agreement No. A-06181)

This is Addendum No. 2 to the original Memorandum of Agreement (“MOA”) between and among the Monterey County Water Resources Agency (“MCWRA”), the Monterey Peninsula Water Management District (“MPWMD”) and the Pajaro Valley Water Management Agency (“PVWMA”), dated December 15, 1991. It updates Addendum No. 1 dated September 28, 1992. The date of this Addendum No. 2 for reference purposes is ____________ 2003.

RECITALS

This second addendum to the MOA is entered into in light of the following facts:

A. MCWRA has constructed the Castroville Seawater Intrusion Program (“CSIP”) to mitigate the effects of seawater intrusion into the groundwater basin along the coast under the former Fort Ord, Marina, and the Castroville area. Closure of the former Fort Ord occurred in 1994 and the Fort Ord Reuse Authority (“Authority”) was established to implement the redevelopment of the closed installation. The Authority developed the Fort Ord Base Reuse Plan, which was adopted in June 1997, approving program level development that would use a portion of the MCWRA water resources described in the MOA. The Authority entered an agreement with the United States Army (“Army”) in June of 2000 that sets forth terms of transfer of water rights from the Army to the Authority, which were transferred in October, 2001. The Authority has also entered into agreement with Marina Coast Water District (“MCWD”), formerly known as Marina County Water District. In October 2001, the Authority conveyed rights to 4,909 acre-feet per year (“afy”) of water and the wastewater facilities and related easements on the former Fort Ord, except those reserved by the Army for the Ord Military Community, to the MCWD. These water rights, conveyed to MCWD from the US Army through the Authority, are drawn from the Salinas Groundwater Basin. MCWRA has an interest to ensure that the MCWD continues to have sufficient and sustainable water supplies to adequately support the Authority’s Base Reuse Plan throughout the former Fort Ord. In addition, rights to the Army’s golf course wells in the Seaside Groundwater Basin (“Seaside Basin”) were transferred to the City of Seaside under a separate transaction between the Army and Seaside pertaining to the acquisition of the Golf Course property.

B. MPWMD has an interest in the aforementioned activities in that part of the former Fort Ord and Ord Military Community are within MPWMD's boundaries, and overlie the Seaside Basin. MPWMD does not wish to impede the implementation of the CSIP or the Fort Ord Base Reuse Plan. However, MPWMD does wish to ensure that its efforts to protect and manage the Seaside Basin, including recent initiation of a comprehensive Seaside Basin Groundwater Management Plan and associated ordinances, are not adversely affected by actions of other parties. The MPWMD is concerned about existing and potential increased pumping from the Seaside Basin in light of clear trends showing declining water levels over time with incomplete recovery even in wet years, water levels remaining below sea level, and the threat of seawater intrusion.

C. The parties agree that there is a need to further clarify agency areas of responsibility in light of the aforementioned developments.

D. The Board of Directors and/or Board of Supervisors of the MCWRA and the MPWMD concur that changes to the original MOA are needed to reflect current conditions. The PVWMA has indicated that it need not participate in this Addendum, but will execute this Addendum, as the MOA remains a three-party agreement.

AGREEMENTS

1. Consent to project within territory of Ft Ord. The parties hereto agree that there shall be no change to agreement paragraph 1 in the 1993 Addendum No. 1.

2. Consent to project within territory of Ft Ord. The parties hereto agree that there shall be no change to agreement paragraph 2 in the 1993 Addendum No. 1.

3. Coordination of programs and activities in connection with the former Fort Ord. The parties hereto agree that the following paragraphs shall supersede paragraph 3 in the 1993 Addendum No. 1.

The MCWRA and MPWMD will coordinate programs related to the planned reuse of Fort Ord. The MCWRA will cooperate in the development of water supply projects and programs to support future developments within the former Fort Ord. The MPWMD will cooperate in the public review of future developments within the former Fort Ord. In recognition that a portion of the current and future MCWD water delivery system for the former Fort Ord is located within the MPWMD boundary, and that the water supply for that system is developed from within the MCWRA boundary from supplies derived outside of the Seaside Basin, the MPWMD and the MCWRA will comply with one another's ordinances as follows:

(a) The MCWRA shall have exclusive authority to regulate the groundwater sources outside of the MPWMD and PVWMA boundaries. The MCWRA shall regulate water delivery systems (such as MCWD) that deliver both potable and non-potable water to the area that is both within the former Fort Ord boundaries and within the MPWMD boundaries in existence at the time of this Addendum if the system water source does not emanate from the Seaside Basin and will not cause a substantive physical effect on the Seaside Basin. The MPWMD will comply with any such rules and regulations enacted by the MCWRA under these circumstances. A schematic map of the MPWMD, Seaside Basin and former Fort Ord boundaries is provided as Attachment A for general reference. For purposes of this Addendum, the parties agree that the use of potable and non-potable water from sources outside the Seaside Basin for landscape irrigation would not cause a substantive physical effect on the Seaside Basin. If there is a question as to the location of the boundary of the Seaside Basin, a mutually acceptable and timely determination shall be made by MPWMD and MCWRA based on large-scale maps provided in available hydrogeologic reports, inspection of the area in question and best professional judgment by one or more Certified Hydrogeologists.

(b) The MPWMD shall have exclusive authority to regulate the management of the Seaside Basin within the MPWMD boundaries, including areas within the former Fort Ord. The MCWRA will comply with any such rules and regulations enacted by the MPWMD.

IN WITNESS WHEREOF, the parties execute this Addendum No. 2 of the Memorandum of Agreement dated December 15, 1991 as follows:

MONTEREY COUNTY WATER RESOURCES AGENCY