Exhibit A-1

Policy Statement Regarding Future Allocation of Water

Previously Set Aside for Drought Protection from the Paralta Well

The mission of the Monterey Peninsula Water Management District is to manage, augment and protect the area’s water resources for the benefit of the community and environment. To protect water users within the District during extended drought periods, the District Board has adopted a policy that set a drought protection standard of mandatory 20% water rationing no more than two percent of the time or two out of 100 years, on average. To ensure this level of protection, the District strives to maintain the necessary balance between available water supplies and approved water demands. The District maintains this balance through conservation and developing new sources of supply and setting limits on water production through its water allocation program.

To achieve its drought protection goal, the District set aside 385 acre-feet of the estimated 1,000 acre-foot annual yield of the Paralta well in the Seaside Coastal Basin. The Paralta well was developed by a joint effort of the District and the California-American Water Company. By setting this water aside and not allocating it to new or expanded uses, potential water demand was reduced and carryover storage has been increased.

The purpose of this policy is to state the District Board’s intent to retain the 385 acre-feet that was previously set aside for drought reserve from the Paralta well in June 1993. This water should not be considered for future allocation until all unlawful diversions from the Carmel River are ended and it is demonstrated that the District’s drought protection requirements remain satisfied.

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