EXHIBIT 1-A MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District June 21, 2004

The meeting was called to order at 7:05 PM in the Monterey City Council Chambers. Directors present: Alvin Edwards, Chair – Division 1 Larry Foy, Vice Chair – Division 2 Judi Lehman – Division 2 Kristi Markey – Division 3 Michelle Knight – Division 4 David Pendergrass – Mayoral Representative David Potter – Monterey County Board of Supervisors (arrived at 7:25 PM) General Manager present: Fran Farina District Counsel present: David C. Laredo The assembly recited the Pledge of Allegiance. The following comments were directed to the Board during Oral Communications. (1) Patricia Bernardi, a resident of Carmel Valley, cautioned the Board that if the Tehama and Monterra Subdivisions were allowed to detach from the District, no local agency would have oversight of the water distribution systems that serve those subdivisions. (2) Charley Kemp, Operations Manager for California American Water (Cal-Am), reported that water consumption in the Cal-Am system had slowed down over the previous four days, but production has exceeded the limit for June. Mr. Kemp submitted a letter dated June 6, 2004, from Colonel Jeffrey S. Cairns, Commanding Office of the Presidio of Monterey (on file at the District office), stating that the Presidio of Monterey and the Ord Military Community will comply with conservation requirements of the Expanded Water Conservation and Standby Rationing Plan. (3) Susan Kippling, a resident of Felton, CA, stated that if a local desalination plant is constructed it should not be owned by Cal-Am, but instead should be publicly owned. In addition, the District should not be disbanded as proposed by pending legislation. Instead, the District should continue to regulate Cal-Am and residents should retain their right to vote on a local water supply project. (4) Robert Scott, a resident of Pebble Beach, submitted a letter dated May 17, 2004 (on file at the District office), requesting water use credit for a bidet. He urged the Board to review the letter and resolve the situation. (5) Molly Erickson submitted copies of a list of projects approved by the City of Monterey that have not yet been built. She warned the Board that once the projects are built and water is provided to them, water production will exceed the annual limit established in State Water Resources Control Board Order 95-10. She urged the Board to address this situation. Ms. Erickson advised the Board that within the Monterra Ranch area, only 55 of the 155 houses planned for the area have been built, but 64 percent of the water allotted to the project is being used. She urged the Board to “put the brakes on this until you figure out exactly where they are headed.” (6) David Dilworth warned the Board that California may be facing a serious drought. He noted that Cal-Am may request that a moratorium on new connections be established in the District. He stated that 8,000 new water connections have been approved within the District since the 1997 water moratorium. He asked the Board to consider those facts carefully during their deliberations that evening. (7) Patricia Bernardi, speaking on behalf of Robert Greenwood, read a letter from the Carmel Valley Association expressing opposition to the detachment of the Monterra and Tehama Subdivisions from the District boundaries. (8) John Fischer, resident of Pacific Grove, thanked Fran Farina for the time she spent with the District as General Manager. On a motion by Director Pendergrass and second by Director Foy, the Consent Calendar was approved, except for items 2, 5 and 6 that would be considered separately. The motion was approved unanimously on a vote of 7 to 0. Approved. By motion of Director Markey and second by Director Potter, this item was continued to a future Board meeting on a vote of 4 to 3. Directors Edwards, Lehman, Markey and Potter voted in favor of the motion. Directors Foy, Knight and Pendergrass were opposed. Approved. Approved. On a motion by Director Foy and seconded by Director Knight, David A. Berger was appointed to the position of General Manager and Secretary to the Board on a vote of 5 – 2. Directors Edwards, Foy, Knight, Pendergrass and Potter voted in favor of the motion. Directors Lehman and Markey were opposed. Mr. Berger stated that he was honored to be appointed and looked forward to working with the Board. A motion was made by Director Markey to extend Ms. Farina’s employment until July 12, 2004 to help with the transition. Ms. Farina declined the offer to continue employment with the District. On a motion by Director Foy and second by Director Potter, Rick Dickhaut was unanimously appointed to the position of Acting General Manager and Acting Secretary on a vote of 7 to 0. Approved. Approved. Approved. Approved. Approved. Approved. Approved. Approved. Darby Fuerst, Senior Hydrologist reported that Cal-Am production target from the Carmel River basin through June 30 was 10,005 acre-feet. To date, production was 10,115 acre-feet. General Manager Farina announced that Stage 3 of the Water Conservation and Standby Rationing Plan would go into effect on June 22, 2004. She noted that District staff would work with Cal-Am to reduce its unaccounted for water use. Ms. Farina thanked the current Board and the prior Board for giving her the opportunity to serve the District. She thanked Division Managers Joe Oliver, Andy Bell, Stephanie Pintar, and Rick Dickhaut. She thanked District Counsel, David Laredo. She also expressed appreciation for Inder Osahan, Chief Technology Officer; Eric Sandoval, Global Information Systems/Graphics Technician; and Arlene Tavani, Executive Assistant. Director Potter acknowledged Ms. Farina’s excellent managerial skills and ability to work well with District staff. Chair Edwards thanked Ms. Farina for her numerous accomplishments at the District. District Counsel Laredo reported that the Board met in Closed Session on May 27, 2004, to discuss the General Manager’s appointment, participate in labor negotiations, and review the status of adjudication involving Cal-Am and the City of Seaside. Direction was provided to District Counsel , but no reportable action was taken. On June 21, 2004, the Board met in closed session with labor negotiators; discussed adjudication involving Cal-Am and the City of Seaside; and reviewed Cal-Am’s application to the Public Utilities Commission for emergency rate relief. No reportable action was taken. Director Lehman requested that at the July 29, 2004 Board Workshop, presentations be given on all desalination plants under consideration such as Cal-Am’s Coastal Water Project, the desalination project proposed by Pajaro/Sunny Mesa Community Services District, and the District’s Sand City desalination project. Director Markey expressed agreement with the request. Director Potter proposed a motion to approve the budget as submitted in the staff report. Director Foy seconded the motion. Director Edwards proposed a friendly amendment to the motion, He suggested that $140,000 be included in the budget to prepare an EIR on a long-term Aquifer Storage and Recovery Project. There was no second to the amendment. Director Edwards moved that $140,000 be allocated in the budget for preparation of an EIR on a long-term Aquifer Storage and Recovery Project. The motion was seconded by Director Markey. The motion was approved on a vote of 4 to 3. Directors Edwards, Knight, Lehman, and Markey voted in favor of the motion. Directors Foy, Pendergrass and Potter were opposed. Director Lehman proposed a motion that was seconded by Director Markey to allocate $160,000 in the budget for completion of the EIR on the District’s proposed Sand City Desalination Project. The motion failed on a vote of 2 - 5. Directors Markey and Lehman voted in favor of the motion. Directors Edwards, Foy, Knight, Pendergrass and Potter were opposed. On a vote of 5 – 2, the Board approved the budget with the inclusion of $140,000 for preparation of an EIR on a long-term Aquifer Storage and Recovery Project. Directors Edwards, Foy, Knight, Pendergrass and Potter voted in favor of the amended budget. Directors Lehman and Markey were opposed. The following comments were directed to the Board during the public hearing on this item. (1) John Fischer recommended that the Board develop a 5 to 15-year budget projection in order to plan for sufficient future revenues. (2) Tex Irwin proposed that funds be transferred from Mitigation Program reserves to the Capital Projects Fund for completion of the District’s primary goal, development of a water supply project. A copy of his entire statement is on file at the District office. (3) Molly Erickson recommended that the Board modify the budget to include $160,000 for completion of an EIR on the Sand City desalination project. She also asked that the Board address the future revenue shortage. (4) David Dilworth urged the Board to include $160,000 in the budget for completion of an EIR on the Sand City desalination project. In addition he proposed that the District fund an enforcement program to prosecute persons who take water from fire hydrants for use on construction sites. Director Pendergrass offered a motion to adopt the July through September 2004 Quarterly Water Supply Strategy and Budget as presented in the staff note. Director Foy seconded the motion. Director Lehman offered an amendment that Cal-Am’s Scarlett Well no longer be utilized as a production well. Director Markey seconded the motion. The motion failed on a vote of 2 to 5. Directors Lehman and Markey voted in favor of the motion. Directors Edwards, Foy, Knight, Pendergrass and Potter were opposed. On a vote of 5 to 2 the Water Supply Strategy and Budget was adopted as presented in the staff note. Directors Edwards, Foy, Knight, Pendergrass and Potter voted in favor of adoption. Directors Lehman and Markey were opposed. The following comments were directed to the Board during the public hearing on this item. (1) Patricia Bernardi, a resident of Carmel Valley, suggested that the Scarlett Well not be used because it is in an area that is also protected fish habitat. She urged Cal-Am to repair the lower Carmel Valley wells before water is taken from wells above Robinson Canyon. She asked if the proposed Water Supply Strategy was developed to meet water needs during Stage 3 of the Water Conservation and Standby Rationing Plan. (2) David Dilworth, representing Helping Our Peninsula’s Environment (HOPE), agreed that the Scarlett Well should not be utilized. He asked why water from the Russell Wells was being used to supply water needs in Carmel Valley Village. He suggested that it would be better to allow that water to flow downstream and then pump it back up to the Village. He asked if wildlife protection agencies had commented on the water supply strategy and budget. (3) Charley Kemp, Cal-Am, stated that the Manor Well was being refurbished, and the possibility of treating water from the San Carlos well is being investigated. He noted that SWRCB Order 95-10 specifies that Scarlett 8 Well can only be operated as a last resort. He stated that Cal-Am would take all measures necessary to avoid the need to utilize Scarlett 8 well. No action taken. This item was continued to a future Board meeting. No action taken. This item was continued to a future Board meeting. Ex Parte Communication -- Director Foy stated that he has been working with staff and the applicant to resolve this issue. Mr. Foy distributed copies of a letter to the Board that he received from the applicant’s attorney dated June 17, 2004. The letter is on file at the District office. (Prior to the meeting, each Director received a copy of the letter from the applicant’s attorney.) Director Markey offered a motion to adopt the staff recommendation to retain all 27 Conditions of Approval authorized on July 21, 2003 and refine two of the existing conditions. Director Lehman seconded the motion. No action was taken on the motion. Director Foy offered a substitute motion to continue agenda item Nos. 21 and 23 to a future meeting date, and authorize he and District staff to meet with the applicant to reach a mutual understanding and resolve the issues. Director Potter seconded the motion. The motion was approved on a vote of 4 – 3. Directors Foy, Knight, Pendergrass and Potter voted in support of the motion. Directors Edwards, Lehman and Markey were opposed. Later in the evening, Chair Edwards announced that during the recess, Director Markey agreed to participate in meetings with Director Foy, District staff and the applicant to resolve the issues related to this agenda item. Also, the item would be brought back for consideration at the August16, 2004 Board meeting. The following comments were directed to the Board during the public hearing on this item. (1) Alan Williams, representing Cañada Woods Water Company, stated that he attempted to file a completed application as requested by the District. However, he could not adequately answer all questions on the application because there was no precedent set for establishment of a non-potable system. He expressed support for Director Foy’s suggestion that the applicant meet with District staff in order to reach a resolution on this issue. Mr. Williams asserted that the District was attempting to permit his project based on rules established for private wells in the Carmel River Basin. According to Mr. Williams, the wells in question are not in the Carmel Valley alluvium and the water right is not subject to District regulation. He stated that he would like to see Condition 19 eliminated from the Conditions of Approval for the Cañada Woods Water Distribution System. (2) Patricia Bernardi, speaking on behalf of Robert Greenwood, read a letter dated June 21, 2004, from the Carmel Valley Association, expressing opposition to the elimination of Condition No. 19. The letter is on file at the District office. (3) Patricia Bernardi, resident of Carmel Valley, stated that Condition No. 19 should not be removed from the Conditions of Approval. (4) David Dilworth, representing HOPE, spoke in support of the staff recommendation that all 27 Conditions of Approval be retained, and that two existing conditions be refined. (5) John Fischer, a resident of Pacific Grove, stated that the District does need information from the applicant regarding how the water distribution system operates. He supported the suggestion that the applicant and District staff meet to develop a solution to the impasse on this application. The meeting was recessed at 10:40 PM and reconvened at 10:50 PM. No action was taken. This item was continued to a future Board meeting. No action was taken. This item was continued to a future Board meeting. No action was taken. This item was continued to a future Board meeting. Ex Parte Communications – Director Pendergrass stated that Assemblymember John Laird contacted him to discuss AB1300. He also participated in a conference call with Senator Bruce McPherson regarding SB1529 On a motion by Director Potter and second by Markey, the resolution was adopted on a vote of 4 to 3. Directors Edwards, Lehman, Markey and Potter voted in support of the motion. Directors Foy, Knight and Pendergrass were opposed. The following comments were directed to the Board during the public comment period on this item. (1) Patricia Bernardi, a resident of Carmel Valley, urged the Board to oppose SB1529 and to continue funding for a lobbyist. (2) Ron Chesshire stated that AB 1300 proposed by Assemblymember Laird would require that a water project be built in six years that provides 750 acre-feet of water for affordable housing. He urged the Board to “create solutions.” (3) John Fischer stated that dissolving the District, as proposed in SB1529, would not solve the water supply problem. He indicated support for continuance of the District. (4) David Dilworth stated that the public would only support a water supply project that does not provide water for growth. He urged the Board to oppose SB1529. There was no discussion of these items. The meeting was adjourned at 11:10 PM.

CALL TO ORDER/ROLL CALL PLEDGE OF ALLEGIANCE ORAL COMMUNICATIONS CONSENT CALENDAR 1. Consider Adoption of Minutes of the Regular Board Meeting of May 17, 2004 and Special Board Meetings of May 3 and May 27, 2004 2. Receive Annual Monterra Ranch Hydrologic Monitoring Report for Water Year 2004 3. Consider Authorization of Contract for Legal Services 4. Consider Authorization to Extend Vehicle Maintenance Agreement with the City of Monterey for Fiscal Year 2004-2005 5. Consider Appointment of District General Manager and Secretary to the Board, and Approval of the Agreement for Employment of General Manager 6. Consider Appointment of Acting General Manager and Acting Secretary beginning July 1, 2004 7. Consider Adoption of a Memorandum of Understanding Between the Monterey Peninsula Water Management District and the General Staff Bargaining Unit 8. Consider Adoption of a Memorandum of Understanding Between the Monterey Peninsula Water Management District and the Management Staff Bargaining Unit 9. Consider Authorization of Mitigation Funds to Contract for Two Fish Rescue Worker Positions 10. Consider Authorization of Mitigation Funds to Contract for Two Field Biology Assistant Positions 11. Consider Authorization of Mitigation Funds to Contract for One Water Resources Assistant Position 12. Consider Authorization of Funds for ALERT Gage Maintenance Agreement with Monterey County Water Resources Agency for Fiscal Year 2003-2004 13. Consider Adoption of Article XIII(B) 2004-2005 Fiscal Year Appropriations Limit 14. Adopt Treasurer’s Report for the Month of April 2004 GENERAL MANAGER’S REPORT ATTORNEY’S REPORT 15. Report on 5:30 PM Closed Session of May 27 and June 21, 2004 DIRECTORS’ REPORTS 16. Board Comments and Referrals PUBLIC HEARINGS 17. Adopt Fiscal Year 2004-2005 MPWMD Budget 18. Consider Adoption of July through September 2004 Quarterly Water Supply Strategy and Budget 19. Consider Second Reading of Ordinance No. 116 – Amending Rule 120 to Modify Terms of Office for the Carmel River Advisory Committee PUBLIC HEARING 20. Consider First Reading of Ordinance No. 117 – Amending Rule 28-B Clarifying the Ministerial Review of Water Use Credit Transfer Applications, Setting Standard Conditions of Approval, and Setting Fees for Transfers and Review of New Technology 21. Consider Applicant’s Request to Reconsider Conditions of Approval for Cañada Woods Water Distribution System (Potable) – Application #20021031CAN ACTION ITEMS 21. Provide Direction on Water Supply Project EIR a. Completion of Draft EIR b. Cost Overrun for Engineering Component c. Report on Moss Landing Desalination Opportunities 22. Consider Adoption of Resolution Opposing Petition for Detachment of the Tehama and Monterra Subdivisions from MPWMD 23. Provide Direction on Modifications to Rule 25.5, Water Use Credits, Pertaining to Redevelopment Projects 24X. Consider Resolution Opposing Senate Bill 1529 to Change Law Governing Water Management District INFORMATIONAL ITEMS/STAFF REPORTS 24. Letters Received 25. Committee Reports 26. Strategic Planning Initiatives Progress Report 27. Carmel River Fishery Report 28. Water Conservation Program Report 29. Monthly Allocation Report 30. Monthly California-American Water Company Production Report 31. Production Report – CAWD/PBCSD Wastewater Reclamation Project 32. Monthly Water Supply Status Report 33. Report on Third Quarter Financial Activity for Fiscal Year 2003-2004 ADJOURNMENT ________________________________ David A. Berger, Secretary to the Board

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