EXHIBIT 20-B

Final

MINUTES

MONTEREY PENINSULA WATER MANAGEMENT DISTRICT

REGULAR MEETING OF THE CARMEL RIVER ADVISORY COMMITTEE

October 30, 2003, 10:00 A.M. Mid-Carmel Valley Fire Station

1. CALL TO ORDER/ROLL CALL

MEMBERS PRESENT: Susan Rogers, Rod Mills, Chuck McKay, Tom House, John Dalessio, Richard Rosenthal, David Dilworth

MEMBERS ABSENT: None

PUBLIC PRESENT: Charley Kemp (representing Cal-Am), Al Mulholland (representing the Monterey County Water Resources Agency), Clive Sanders (representing the Carmel River Watershed Council), Pat Bernardi, Bob Costa (representing Rancho Cañada)

STAFF PRESENT: Fran Farina, Andy Bell, Thomas Christensen, Larry Hampson

2. PUBLIC COMMENT – Mr. Dalessio expressed a concern that legislation introduced by California State Senator Bruce McPherson Senate Bill 149 may be reintroduced at the next legislative session and could contain a provision that would sunset the District’s Mitigation Program. Mr. Dalessio urged the Committee to hold a special meeting as soon as possible after the Nov. 4, 2003 MPWMD Board of Directors election to consider making a recommendation to the Board to continue the Mitigation Program.

Mr. Sanders stated that he shares Mr. Dalessio’s concern regarding the Mitigation Program.

Ms. Rogers suggested a field visit to proposed seawater desalination project sites.

Mr. Mills reported that Rancho Cañada proposes to develop a portion of the golf course into a project that includes mixed-use housing.

3. CONSENT CALENDAR – Mr. Dalessio made a motion to approve the minutes of the August 21, 2003 regular meeting. Seconded by Mr. Mills. Approval was unanimous.

4. UPDATE ON SAN CLEMENTE DAM AND RESERVOIR

Mr. Kemp, Senior Operations Manager with Cal-Am, described a recent order from the California Division of Safety of Dams (DSOD) that Cal-Am maintain the reservoir pool at approximately 10 feet below the spillway year round. Mr. Kemp stated that Cal-Am could not comply with the order with the existing release capability at the dam. One of the options proposed by DSOD to meet this requirement was to place a nine-foot deep notch in the dam to increase its stability and to remove approximately 900 acre-feet of sediment from the reservoir to prevent the material from being washed downstream during winter flows. Mr. Kemp stated that all interim options could have potential impacts to steelhead, California red-legged frogs, and water supply operations.

Mr. Kemp stated that the order also required that Cal-Am complete work to lower the reservoir elevation to a “dam safe” level by November 2004. Cal-Am is considering three alternatives for the dam including: 1) buttressing the existing dam at a cost of $28 million to $30 million; 2) complete removal of the dam and reservoir sediments at a cost of at least $70 million; 3) removal of the top 19 feet of the dam and removal of 900 acre-feet (AF) of sediment at a cost of $28 to $30 million. The latter alternative could have fish migration problems.

Mr. Dilworth stated that one potential solution to the dam problem, which was suggested by John Brennan, is to sluice sediment out at high flows. Mr. Kemp said this sounded like a short-term solution and that Cal-Am is looking for a long-term solution.

Mr. Mulholland stated that Monterey County and the Federal Emergency Management Agency have concerns that have not been addressed about potential flood impacts from sediment releases.

Mr. Hampson asked if Cal-Am had projected its capital needs for the next 10 to 20 years. Mr. Kemp said Cal-Am has done this, but that funding will depend on what the parent company is willing to take on. He said there are a number of issues coming up in the future that could affect Cal-Am’s operation and that he was concerned about escalating operating costs. He estimated that it will take five to seven years for a water supply project to be completed and that during that time, water supply from the Seaside Basin could be reduced by 1,500 to 1,700 AF as a result of the Seaside Basin adjudication. Mr. Kemp also stated that coliform counts have increased at wells near mid-Valley. Mr. Kemp stated that it is possible that water delivery may be restricted in the future in order to protect the system and the supply. He urged additional conservation and with the possibility of San Clemente Dam being removed, recommended expanding the capacity of the Russell Wells (located just downstream of San Clemente Dam).

Mr. Rosenthal commented that the constraints Cal-Am faces in delivering water should be assessed by Cal-Am and the results sent to city and county government agencies in Monterey County that are updating General Plans. He stated that growth should not get ahead of water supply.

Mr. Kemp agreed that local government agencies should be kept informed and stressed that the Peninsula needs an expanded water supply.

Mr. Rosenthal made a motion to request that Cal-Am prepare a report within 60 to 75 days on the quality and quantity of the current water supply and water production facilities and the anticipated conditions over the next five to seven years. The report is to be sent to appropriate public agencies including Monterey Peninsula cities, Monterey County, the Association of Monterey Bay Area Governments, Monterey County Planning and Building Inspection Department, and the Transportation Agency of Monterey County. Seconded by Mr. Dilworth.

Ms. Farina stated that this item is agendized as a report, not an action item, and that taking action would be inappropriate. She further stated that Cal-Am should report directly to other agencies rather than submitting a report to the Committee for distribution to those agencies.

The motion was approved unanimously.

5. UPDATE ON CARMEL RIVER WATERSHED COUNCIL (CRWC) ACTIVITIES

Mr. Sanders reported on a pending contract with MPWMD and a signed contract with California State University Monterey Bay (CSUMB) to perform an assessment of the Carmel River Watershed. The assessment will include hydrologic studies and mapping with a Geographic Information System (GIS) by CSUMB, historical information from CRWC, an assessment of the health of the riparian corridor in the main stem by MPWMD, and riparian assessments in tributaries by volunteers. MPWMD’s contract is for $52,400 and CSUMB’s contract is for $29,500. The assessment is scheduled to be completed by January 2005 and is funded with a $197,800 grant from the State.

Mr. Sanders also said that CRWC is raising funds with a golf tournament in December 2003 and the Steinbeck Century Ride in April 2003 (a bicycle event with 25-, 40- and 100-mile rides). Mr. Rosenthal asked what MPWMD’s contract would cover. Mr. Hampson gave an overview of contract tasks that include an assessment of riparian areas and a biological assessment of steelhead and California red-legged frogs in the main stem. Mr. Christensen described the Proper Functioning Condition (PFC) method that will be used to assess riparian areas. Mr. Dilworth suggested that it sounded superficial. Mr. Christensen explained that the method, which was developed by the Bureau of Land Management, is qualitative, but is based on quantitative analysis.

Mr. Dilworth asked if the assessment would include all the changes since main stem dams were built or if the assessment will focus on short-term changes. Mr. Hampson replied that the major changes in the main stem due to dam installation (such as degradation and armoring of the channel bottom) most likely took place within a few decades of construction, but that changes in the tributaries due to effects in the main stem may be ongoing. Mr. Christensen noted that the PFC assessment method includes an evaluation of incision and channel stability, which dams can influence.

Mr. Sanders reported that the next training session on use of the PFC method was scheduled for November 22, 2003 at the Carmel Middle School. Mr. Sanders stated that the CRWC would like to see that the lagoon restoration project sponsored by California Department of Parks and Recreation and the Coastal Conservancy include a long-term management plan for the lagoon. Mr. Sanders noted that the Carmel River Steelhead Association was continuing to operate aerators at the lagoon. Ms. Bernardi asked how long the aerators would continue to be operated, to which Mr. Sanders replied, “Until the rains come.”

6. REVIEW LIST OF THE TOP 250 PUMPERS IN CARMELVALLEY

Staff handed out information on water production from registered wells within the boundaries of MPWMD for Water Year 2002 to those who did not already have a copy from the August 21, 2003 meeting. The list included the 250 wells with the highest use during the period October 1, 2001 through September 30, 2002.

Mr. Kemp stated that Cal-Am plans to install a back-up generator at the Pearce Well (located near Meadows Road/Prado del Sol) and that the San Carlos Well has been taken out of production due to water quality concerns.

Mr. Dilworth thanked MPWMD for presenting the information on the top 250 pumpers. Ms. Farina urged discretion in using the information. Mr. Dilworth replied that the information is public and can be used however one pleases and suggested that the information be sent to the media. Mr. Hampson noted that MPWMD sends copies of all meeting agendas to local television stations and newspapers, in addition to several local government agencies and other interested parties.

Mr. Dilworth noted that the top users included Cal-Am, golf courses, developments, and vintners. He expressed an interest in the largest water users within the MPWMD boundary and suggested that there are users that are not conserving very well. He stated that it is appropriate for the Committee and the public to know where additional conservation can be achieved.

Mr. Rosenthal stated that detailed information would be helpful in assessing water use. Mr. Kemp stated that progressive water rates discourage high use.

Mr. Costa stated that Rancho Cañada upgraded their irrigation system in the early 1990’s and reduced consumption by 200 to 300 acre-feet per year as a result.

Mr. Dilworth made a motion to request that MPWMD obtain a legal opinion on how to obtain information on the top 200 users in the Cal-Am system. Mr. Mills seconded. Mr. Dalessio stated that such information would be useful. Mr. McKay asked how the Committee would use the information. The vote on the motion was four to three, with Dilworth, Dalessio, Mills, and Rosenthal voting in favor and McKay, House, and Rogers voting against the motion.

Mr. Dalessio stated that he is a director of the Monterey Peninsula Regional Park District and will make an inquiry as to why so much water is being pumped by that agency.

Committee Action Taken: To request that the MPWMD Board consider obtaining a legal opinion on how to acquire information on the top 200 water users in the Cal-Am system.

7. REVIEW FISCAL YEAR 2003-2004 MITIGATION PROGRAM BUDGET

Mr. Hampson gave a brief description of the budget components, including revenues, project expenses, and program outlays. Mr. Dilworth asked about line item 2-6-1-c. “Review water development proposals.” Staff present did not know what the line item was for, but offered to report back to the Committee with a response. [Note: No funds are budgeted for this item].

8. STAFF REPORTS

Mr. Christensen reported on clean-up of the river, pumping at Cal-Am wells in the lower river, irrigation of the north riverbank adjacent to Hacienda Carmel, operation of nine District-sponsored irrigation systems, and modifications of downed cottonwoods in the channel. Mr. Hampson reported that Federal agencies are close to completing biological opinions on threatened species in the Carmel River in connection with MPWMD’s application for a Regional General Permit from the U.S. Army Corps of Engineers for maintenance and restoration of the riparian area. Mr. Hampson also reported that CSUMB had begun a complete inventory of large wood in the bottom of the Carmel River between the lagoon and San Clemente Dam.

9. ITEMS TO BE PLACED ON FUTURE AGENDAS – The Committee requested that the following items be placed on future meeting agendas:

- review of the Committee’s Mission Statement;

- review request that MPWMD seek a legal opinion concerning requesting information from Cal-Am about the top 200 water users within the MPWMD boundaries;

- consider making a freedom of information request to Cal-Am about water quality and quantity for the Monterey Peninsula;

- discuss the 1990 MPWMD Water Allocation Program Environmental Impact Report;

- update on Carmel River Watershed Council activities;

- discuss flood preparation along the Carmel River;

- conduct a special meeting on November 13, 2003 to visit Los Padres Dam and Reservoir;

- at the November 13, 2003 meeting, consider making a recommendation to the Board to continue Mitigation Program activities.

10. ADJOURNMENT – The next regular meeting was scheduled for December 18, 2003 at 10 a.m. (place to be determined). The meeting was adjourned at 12:44 p.m.

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