EXHIBIT 1-A

DRAFT

Minutes

Regular Meeting

Board of Directors

Monterey Peninsula Water Management District

January 29, 2004

The meeting was called to order at 7:05 PM, in the District Conference room.

Board members present:

Alvin Edwards – Chair, Division 1

Larry Foy – Vice Chair, Division 5

Judi Lehman – Division 2

Kristi Markey – Division 3

Michelle Knight – Division 4

David Pendergrass – Mayoral Representative

David Potter – Monterey County Board of Supervisors

Board members absent: None

General Manager present: Fran Farina

District Counsel present: David C. Laredo

The assembly observed a moment of silence in honor of deceased Monterey City Councilmember, Ruth Vreeland.

The assembly recited the Pledge of Allegiance.

The following comments were directed to the Board during Oral Communications. (1) Fred King submitted a letter dated January 29, 2004 that is on file at the District office. He requested that a water permit be issued to him immediately and that rules be waived that require him to obtain a water distribution system permit. (2) Sheryl McKenzie, Government Affairs Director for the Monterey County Association of Realtors (MCAR), thanked the Board for reinstating the Policy and Technical Advisory Committees. (3) John Fischer, resident of Pacific Grove, congratulated Director Edwards on his election to the position of Board Chair. In regards to Consent Calendar Item 5, he stated that the District could have conducted an in-house analysis of water credit transfers within the City of Pacific Grove in order to determine if water credit transfers resulted in conservation savings. (4) Michael Waxer, resident of Carmel Valley, referred to minutes of the October 30, 2003 Carmel River Advisory Committee (CRAC) on page 256 of the Board packet. He remarked that it was inappropriate for CRAC to request water production records for the top water users inside and outside of the California-American Water Distribution System. (5) David Dilworth, Helping Our Peninsula’s Environment (HOPE), explained that CRAC requested the production records due to water conservation concerns and to determine what pumpers use the most water. He requested that Consent Calendar Items 3 and 4 be pulled for separate consideration because they proposed to diminish pubic participation in the District’s policy decisions. (6) Nancy Isakson stated that the Board should protect the privacy of private pumpers’ water production records. She asked that the District consider amending its rules in order to maintain the confidentiality of the water production data. (7) Patricia Bernardi, a resident of Carmel Valley, stated that the water production records of private pumpers is public information. Regarding Consent Calendar Item 6, she advised the Board that the Seaside Basin Injection Project would not provide a reliable source of water because it could not be operated during periods of low flow in the Carmel River.

Director Knight moved that items 2, 3, 4 and 5 be pulled from the Consent Calendar, and proposed approval of items 1, 6, 7 and 8. Director Pendergrass seconded the motion. The Board approved the motion unanimously on a vote of 7 – 0.

Adopted unanimously.

On a motion by Director Markey and second by Director Potter, the Board voted to approve appointments to the Administrative and Water Demand committees, and to conduct a discussion on the responsibilities and need for additional committees at the February 19, 2004 Board meeting. The motion was approved unanimously on a vote of 7 – 0.

On a motion by Director Lehman and second by Director Markey, this item was continued to the February 2, 2004 Board workshop so that a preliminary discussion could occur then. The motion was approved unanimously on a vote of 7 – 0.

The following comments were received during the public comment period on this item. (1) David Dilworth, HOPE, stated that a committee should not have a set of alternate members that includes more than a majority of Directors. He noted that if two alternates are appointed to a committee, five Directors could participate in consideration of an issue over the course of two committee meetings. According to Mr. Dilworth, that could be considered a serial meeting, which is prohibited under the Brown Act. (2) Patricia Bernardi urged the Board to require noticing of all committee meetings so that the public is able to participate.

Director Pendergrass offered a motion that was seconded by Director Potter to require that all committees be identified as legislative bodies as defined under the Brown Act and noticed accordingly. No action was taken on the motion.

Director Pendergrass offered an amendment to the motion that was seconded by Director Potter to clarify that the Administrative, Carmel River Advisory, Policy and Technical Advisory committees are legislative bodies as described in the Brown Act. All other ad hoc committees of the Board are not legislative bodies; they shall be noticed in a manner similar to that of legislative bodies, but the Chair will have authority to modify the agenda at the meeting if necessary. The motion was approved unanimously on a vote of 7 – 0.

During the public comment period on this item, David Dilworth urged the Board to make no change to the District’s policy on noticing ad hoc committee meetings.

Director Markey made a motion to adopt the proposed text of MPWMD Meeting Rule Nos. 18 and 19. In addition, the Board should reject the proposed change to Meeting Rule No. 15. Director Knight seconded the motion. The Board approved the motion unanimously on a vote of 7 – 0.

The following comments were directed to the Board during the public comment period on this item. (1) David Dilworth requested that the Order of Business list in MPWMD Meeting Rule No. 18 include the entry “Deferred Consent Calendar Items.” (2) John Fischer, a resident of Pacific Grove, urged the Board to ensure that contentious agenda items are not placed on the Consent Calendar.

On a motion by Director Foy and second by Director Knight, the Board directed the General Manager to contract with PM Connect for a not-to-exceed amount of $38,000. The motion was adopted unanimously on a vote of 7 – 0.

Adopted unanimously.

Eric Sandoval, Engineering Technician, presented an overview of the District’s Geographic Information System Program. An outline of his presentation is on file at the District office.

The General Manager did not present a report.

District Counsel Laredo reported that the Board met in closed session to discuss both items listed on the agenda. The Board received a report from its labor negotiator relating to the MPWMD General Staff Memorandum of Understanding. Following discussion, the Board took the following action upon the motion of Director Potter and the second of Director Foy. The Board authorized the General Manager to enter into a contract with Delta Dental to provide participant dental insurance for staff members and directed that the General Staff Unit Memorandum of Understanding be amended by side-letter to allow dental plan participants to change to the Delta Premier 100 1.5k Plan. The motion was passed on a vote of 6 – 0. Directors Potter, Edwards, Lehman, Markey, Foy and Knight voted in favor. No Directors voted in opposition. Director Pendergrass was absent and did not vote. In regards to the issue of California-American Water Company vs. City of Seaside et al, the Board received a report but no action was taken.

Chair Edwards commended the Water Demand Committee for the work they accomplished at the January 20, 2004 committee meeting. He also congratulated District staff on the report prepared for the January 28, 2004 joint meeting of the Policy and Technical Advisory Committees.

On a motion by Director Foy and second by Director Lehman the Mid-Year 2003-2004 Budget adjustment was unanimously approved on a vote of 7 – 0.

No comments were directed to the Board during the public hearing on this item.

On a motion by Director Lehman and second by Director Markey, the Board agreed that a Water Supply Emergency persists and directed that Ordinance No. 92 should remain in effect. The motion was adopted unanimously on a vote of 7 – 0.

The following comments were directed to the Board during the public hearing on this item. (1) Robert Greenwood, representing the Carmel Valley Association, expressed support for the staff recommendation that Ordinance No. 92 should remain in effect. He urged the Board to investigate the Cal-Am Water Distribution System leak rate. (2) Michael Waxer requested that Ordinance No. 92 be amended to delete provisions that infringe upon personal privacy. He expressed concern about penalties that could be levied against a water customer during a physical drought whose census form was outdated or contained errors. (3) Patricia Bernardi, a resident of Carmel Valley, stated that Ordinance No. 92 would only penalize water customers that willfully provide false information on census forms in order to increase their water allotment. (4) David Dilworth, HOPE, recommended the Board take action that evening to determine that a Water Supply Emergency persists. The Board should also continue the discussion on Ordinance No. 92 rationing program regulations to a future date. He advocated for more discussion in order to “balance out the inequities” between rules for residential properties and golf courses during periods of water rationing. Mr. Dilworth also expressed concern about the high rate of system losses in the Cal-Am Water Distribution System. (5) Sheryl McKenzie expressed agreement with comments made by Michael Waxer and Pat Bernardi. She recommended that Ordinance No. 92 be amended to establish penalties for filing false census forms during Stages 5 or 6 of the Standby Rationing Plan, instead of Stage 4. Ms. McKenzie echoed Mr. Dilworth’s concern about the high rate of Cal-Am Water Distribution System losses. (6) Nancy Isakson proposed that Ordinance No. 92 be amended to state that the rules would sunset “upon implementation of a project.” (7) In response to a question from the Board, Steve Leonard, General Manager of Cal-Am, explained that system losses represent water that is metered but could be attributed to many uses such as flushing mains, fire protection or leaks. He noted that water is also lost when pumps are turned on and off, in compliance with production regimens established by the SWRCB. According to Mr. Leonard, the water industry standard for system losses is between 5% and 15%. The 7% loss standard set by Ordinance No. 92 is very aggressive.

Director Markey moved adoption of the Negative Declaration for Ordinance No. 111. The motion was seconded by Director Pendergrass and adopted unanimously on a vote of 7 – 0.

Director Markey proposed a motion that Ordinance No. 111 be adopted in accordance with the staff recommendation. In addition, the language shown as amending Section Four, C.1.d, shall be corrected to amend Section Four, C.1.b. Director Potter seconded the motion. The motion was approved on a vote of 6 – 1. Directors Edwards, Foy, Knight, Markey, Pendergrass and Potter voted in favor of the motion. Director Lehman voted against the motion.

Director Potter offered an amending motion, that was seconded by Director Knight, to add the following language to the end of Section Four, C.1.b, “The General Manager may waive the limitations set by this paragraph upon credible evidence that the fixture had been legally installed. The General Manager’s determination shall be subject to appeal under Rule 70.” The motion was approved on a vote of 5 – 2. Directors Edwards, Foy, Knight, Pendergrass and Potter voted in favor of the motion. Directors Lehman and Markey voted in opposition to the motion.

Director Lehman made a motion to amend Section Four, C.1.b., by specifying that credible evidence must be provided for all fixtures installed prior 1985. There was no second to the motion.

On a motion by Director Foy and second by Director Edwards, the amended second reading version of Ordinance No. 111 was adopted on a vote of 6 – 1. Directors Edwards, Foy, Knight, Markey, Pendergrass and Potter voted in favor of the motion. Director Lehman voted in opposition to the motion.

The following comments were directed to the Board during the public hearing on this item. (1) Patricia Bernardi expressed support for adoption of Ordinance No. 111. (2) Judy MacClelland, representing the Pacific Grove Community Development Department, stated that it was unfair to persons who installed fixtures prior to March 1985, to only allow water credit upon evidence of a water permit showing a debit to a jurisdiction’s allocation and payment of District connection charges. She requested that the factor for assessing outdoor water use be revisited because it does not address the difference between a lot with no landscaping and one with extensive landscaping. (3) Nancy Isakson expressed agreement with Ms. MacClelland’s statement regarding the requirement to produce evidence of a water permit prior to receiving water credit. She requested that water credit for laundry sinks be granted on a case-by-case basis. Ms. Isakson supported the rule that would charge one fixture-unit for the installation of ½ gallon flush toilets. (4) David Dilworth, HOPE, urged the Board to defer taking action on this ordinance. He requested that Ordinance No 111 be amended to include rules related to the transfer of water credits to contiguous lots. Mr. Dilworth urged the Board to abandon the fixture-unit methodology and replace it with actual water use. (5) Tex Irwin noted that water credit is granted when a fixture is removed from a residence. He asked if water credit is granted when landscaping is permanently removed. He urged the Board to abandon the fixture unit methodology and replace it with actual water use. (6) Michael Waxer cautioned the Board against adopting a plan for issuance of water permits based on actual water use. He described the fixture-unit model as a conservative methodology that is useful in planning for future water use.

Director Foy made a motion to rescind Ordinance No. 99 and adopt Ordinance No. 112 on first reading. Director Edwards seconded the motion. It was adopted on a vote of 4 – 3. Directors Edwards, Foy, Knight and Pendergrass voted in support of the motion. Directors Lehman, Markey and Potter were opposed.

During the public hearing on this item, the following comments were directed to the Board. (1) Robert Greenwood, Carmel Valley Association, recommended against rescission of Ordinance No. 99. In addition, he requested that all ex parte communications be listed in the monthly Board packet under Communications Received, and that they be announced at the monthly Board meetings. (2) David Dilworth (HOPE) spoke in opposition to Ordinance No. 112. He requested that prior to a public hearing on any quasi-judicial matter, all Disclosure Statements related to that matter should be read aloud. (3) John Fischer, a resident of Pacific Grove, spoke in opposition to Ordinance No. 112. (4) Tex Irwin, Monterey Peninsula Airport District Board of Directors, spoke in support of Ordinance No. 112. (5) Sheryl McKenzie, speaking as a citizen, disagreed with a previous speaker who described proposed Ordinance No. 112 as undemocratic. (6) Patricia Bernardi, a resident of Carmel Valley, advised the Board that according to ex parte communication rules, the Directors must distinguish between conversations about quasi-judicial matters that must be reported, and contacts with the public regarding general issues that are not subject to reporting requirements. She requested that any Director who has received or participated in ex parte communications should make a verbal report at a Board meeting.

Director Lehman proposed a motion to approve the staff recommendation that beginning in March 2004, Board meetings shall be conducted in the Monterey City Council Chambers for a six-month trial period. 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) Patricia Bernardi expressed concern about the $625 per meeting cost to utilize the Monterey City Council Chambers. She preferred that the meetings be conducted in a location that involved little or no cost. (2) Sheryl McKenzie expressed concern about the cost to conduct meetings in the Monterey City Council Chambers. She supported the six-month trial period. (3) David Dilworth, HOPE, expressed support for the staff recommendation. (4) Tex Irwin suggested that if the Board were to meet in the District’s conference room, the Board of Directors’ table should be placed on a raised platform.

Director Pendergrass made a motion to adopt the staff recommendation to: (A) Consider the PAC/TAC request for a 30+ day continuance to the March 15, 2004 meeting. (B) Direct staff to retain consultant to update commercial water use factors (sole-source rather than RFP would be faster). (C) Authorize Counsel to review TAC/PAC recommended ordinance as it relates to CEQA compliance and enforcement. Director Knight seconded the motion.

Director Potter proposed amendments to the motion: (A) Consider the PAC/TAC request for a minimum 30 day continuance to March 15, 2004 meeting; and (B) Direct staff to explore the cost to retain a consultant to update commercial water use factors (sole source rather than RFP would be faster). (C) Unchanged from original motion. Directors Pendergrass and Knight accepted the amendment. The Board adopted the motion on a vote of 6 – 1. Directors Edwards, Foy, Knight, Lehman, Pendergrass and Potter voted in favor of the motion. Director Markey voted against the motion.

The following comments were directed to the Board during the public comment period on this item. (1) Robert Greenwood, Carmel Valley Association, urged the Board to initiate preparation of an EIR, without delay, in parallel with any new water supply project. (2) Patricia Bernardi, a resident of Carmel Valley, stated that it will be necessary to prepare a new Allocation Program EIR; however, much discussion is needed before the task is begun. (3) Tex Irwin stated that the current Allocation Program must not be changed. He suggested that it would be best to limit Cal-Am pumping from the Seaside Groundwater Basin to cover the amount of water that was allocated to the jurisdictions before SWRCB Order 95-10 was established. (4) David Dilworth, HOPE, stated that endangered species are dying due to over-pumping of the Carmel River. He noted that the Pebble Beach Company also has a right to use 380 acre-feet of water from Carmel River. He expressed a concern that during periods of drought, golf courses “get a free ride” but residential users must reduce water consumption. (5) Mark Stilwell, Executive Vice President of the Pebble Beach Company (Company), explained that the State Water Resources Control Board recognized the Company’s 380 acre-foot water right because the CAWD/PBCSD Wastewater Reclamation Project would reduce water production from the Carmel River.

On a motion by Director Foy and second by Director Knight, the item was continued to the February 19, 2004 Board meeting on a vote of 6 – 0. Directors Edwards, Foy, Knight, Lehman, Markey, Pendergrass voted in favor of the motion. Director Potter was not present for the vote.

There was no discussion of these items.

CALL TO ORDER/ROLL CALL

MOMENT OF SILENCE

PLEDGE OF ALLEGIANCE

ORAL COMMUNICATIONS

CONSENT CALENDAR

1. Consider Adoption of Minutes of the Regular Board Meeting of December 15, 2003

2. Ratify Committee Assignments for Calendar Year 2004

3. Consider Change to Policy on Noticing Ad Hoc Advisory Committee Meetings

4. Ratify Change to Board Meeting Rules Regarding Pulled Consent Calendar Items

5. Consider Expenditure of Funds to Retain Project Management Services for Water Demand Division Database Project

6. Receive Draft Water Year 2003 Report of Seaside Basin Injection Testing Program

7. Annual Update on Investment Policy

8. Consider Adoption of Treasurer’s Report for November 2003

PRESENTATIONS

9. Geographic Information System Program Update

GENERAL MANAGER’S REPORT

ATTORNEY’S REPORT

10. Report on Closed Session

DIRECTORS’ REPORTS

11. Board Comments and Referrals

PUBLIC HEARINGS

12. Consider Adoption of Mid-Year FY 2003-2004 Budget Adjustment

13. Review Provisions of Ordinance No. 92, Expanded Conservation and Standby Rationing Plan

14. Consider Second Reading and Adoption of Ordinance No. 111 – Amending District Rule 11 (Definitions) and Rule 24 (Connection Charges) and Adoption of Negative Declaration

15. First Reading of Ordinance No. 112 – Rescinding Rules Requiring Disclosure of Ex Parte Communications and Repealing Penalties and Remedies for Non-Disclosure

15. First Reading of Ordinance No. 112 – Rescinding Rules Requiring Disclosure of Ex Parte Communications and Repealing Penalties and Remedies for Non-Disclosure

ACTION ITEMS

16. Consider New Board Meeting Location

17. Discussion of Current Water Supply Issues, Including Water Credit Transfers and Status of Jurisdiction Allocations

18. Discussion of Near Term Water Supply Concepts, Including Reclamation

19. Letters Received

20. Committee Reports

21. Strategic Planning Initiatives Progress Report

22. Quarterly Geographic Information Systems Update

23. Quarterly Public Information Program Report

24. Quarterly Water Supply Project Status Report

25. Carmel River Fishery Report

26. Quarterly Irrigation Program and Riparian Projects Report

27. Quarterly Carmel River Erosion Protection and Restoration Projects Report

28. Water Conservation Program Report

29. Water Use Credit Transfer Status Report

30. Monthly Allocation Report

31. Monthly Cal-Am Sales Report

32. Monthly Cal-Am Production Report

33. Production Report – CAWD/PBCSD Wastewater Reclamation Project

34. Monthly Water Supply Status Report

ADJOURNMENT

______________________________

Fran Farina, Secretary to the Board

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