EXHIBIT 1-A
DRAFT MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District August 16, 2004
The meeting was called to order at 7:05 PM in the Monterey City Council Chambers. 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 (Arrived at 7:40 PM) Board members absent: None General Manager present: David A. Berger 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) Robert Greenwood, representing the Carmel Valley Association, requested a correction to minutes of the July 19, 2004 Board meeting. Page 9 of the Board packet should be corrected to state that he spoke in support of a temporary water permit moratorium. (2) Tex Irwin requested a correction to minutes of the July 19, 2004 Board meeting. Page 9 of the Board packet should be corrected to state that he did not support a permanent moratorium. (3) Roy Kaminske, a resident of Carmel Valley, stated that to deny a person water is to deny that person a human right. He spoke against no-growth policies. (4) Susan Kipping, resident of Felton in Santa Cruz County, spoke to what she described as the “misinformation” campaign that California-American Water (Cal-Am) has waged in Felton. She stated that residents of Felton have been working to gain local control of their water system since Cal-Am purchased the water company and implemented rate hikes of 54 to 80 percent. According to Ms. Kipping, two schools in the Felton area were forced to close due to the rate hikes. (5) Lou Haddad, a resident of Monterey, spoke to item 11, Accepting Methodology for Estimating Future Water Needs. He reminded the Board that the jurisdictions presented to the District a water-needs assessment several years ago that estimated their water requirements to be 3,500 acre-feet. He suggested that the Board compare the previous water-needs assessment to the results of the proposed water-needs estimate. (6) David Dilworth, representing Helping Our Peninsula’s Environment, expressed support for implementation of a moratorium. He also suggested that an environmental review should be conducted on the proposed methodology for estimating future water needs that is presented in agenda item 11. (7) Nadar Agha urged the Board to be cautious about entering into a partnership with Cal-Am for development of a water supply project. He alleged that Cal-Am might misrepresent the cost of a project to the ratepayers. Director Pendergrass made a motion to approve the Consent Calendar items, except for items 3, 9 and 11 that were pulled for separate consideration. Director Knight seconded the motion. Items 1, 4, 5, 6, 7, 8 and 10 were adopted on a vote of 6 – 0. Director Potter was absent. Item 2 was adopted on a vote of 5 – 1. Director Lehman voted in opposition to the item. Director Potter was absent. Approved on a vote of 5 – 1. Directors Edwards, Markey, Knight, Foy and Pendergrass voted in favor of the item. Director Lehman was opposed. Director Potter was absent. No action taken on this item. Information for Board review was not prepared in time for inclusion in the Board packet. The item was deferred to the September 20, 2004 Board meeting. Approved. Approved. Approved. Approved. Approved. Director Lehman offered a motion to: (a) table this item to a future meeting; (b) allow the General Manager to utilize a District Vehicle for a 30-day trial period; and (c) refer this item to the Rules and Regulations Review Committee. Director Foy seconded the motion. No action was taken on the motion. Chair Edwards directed that the item be placed on the September 2004 Administrative Committee agenda for further discussion. Adopted. Chair Edwards deferred this item to the September 20, 2004 agenda for consideration as an Action item. Darby Fuerst, Senior Hydrologist, reported that Cal-Am's water year-to-date production from the Carmel River as of August 15, 2004, is 151 acre-feet under the limit set by the District, based on the annual limit specified in State Water Resources Control Board (SWRCB) Order 95-10. In response to a question from the Board, Mr. Fuerst suggested that the District's Expanded Water Conservation and Standby Rationing Plan, which was established in 1998 by Ordinance No. 92, be modified to reflect current regulatory requirements .  Specifically, Ordinance No. 92 was originally developed to allow 17,641 acre-feet of production per year by Cal-Am. In practice, Cal-Am's system is managed to insure that Cal-Am water production is kept below 15,285 acre-feet per year to be in compliance with Order 95-10. Accordingly, the carryover storage values that are used each May to determine whether or not mandatory water rationing is necessary should be changed to reflect the 15,285 acre-foot production limit, rather than the 17,641 acre-foot limit. In addition, the monthly and year-to-date production targets should be adjusted to reflect the actual operation of the Cal-Am system based on regulatory constraints adopted after 1998.  Specifically, SWRCB Order 98-04 has caused Cal-Am to modify their seasonal operations and resulted in less production from the Seaside Basin during the November through April period. Presently, alternate monthly production goals for the Seaside Basin and Carmel River are developed jointly by the District, Cal-Am, California Department of Fish and Game and NOAA Fisheries as part of the Quarterly Water Strategy and Budget process. Director Potter joined the meeting at 7:40 PM. District Counsel Laredo reported that the Closed Session was not conducted. No comments. Director Pendergrass offered a motion to: (a) Adopt the Findings and Conditions of Approval for Application No. 20040518FLA; (b) amend the fourth sentence of Finding No. 15 to state “The Health Department has reviewed and approved the subject system, including specification of the treatment process that will be required”; and (c) approve creation of the Flagg Hill Water Distribution System. The motion was adopted on a vote of 7 – 0. During the discussion of this item, the applicant, Nashwan Hamza stated that he concurred with the permit conditions. No other public comment was directed to the Board. Director Foy made a motion that staff should proceed with development of two ordinances for Board consideration as described in the staff note, and according to the proposed time-line The first ordinance would address housekeeping/consistency issues that are needed regardless of changes to the permit process. The second ordinance would reflect and codify the proposed multi-level, impact based regulatory concepts. The motion was seconded by Director Knight and adopted unanimously on a vote of 7 – 0. The following comments were directed to the Board during the public comment period on this item. (1) Diana Ingersoll, Public Works Director for the City of Seaside, referred to a letter dated August 16, 2004 from City Attorney Russell McGlothlin, (on file at the District office). The letter expressed support for the District’s efforts to streamline administrative processes, and also outlined concerns re issues related to the Seaside Basin adjudication lawsuit (California-American Water Company v. City of Seaside et al, Monterey County Superior Court Case No. M66343). Ms. Ingersoll requested that the Board refrain from adoption of any ordinance that would interfere with the Seaside Basin adjudication lawsuit. (2) Lou Haddad, a resident of Monterey, began to speak on item 17. He completed his comments during the discussion on item 17. It was announced that at the 6:30 PM session of the Administrative Committee, the committee voted 2 – 1 to adopt the MOU with P/SMCSD. Following that announcement, the Board discussed the MOU. Questions were raised about the justification for entering into an MOU with P/SMCSD. Not all Directors supported adoption of the agreement. It was suggested that staff be directed to work with P/SMCSD and focus on information sharing without entering into an MOU. Or, it might be best to request information from P/SMCSD, MCWRA and Cal-Am to avoid the appearance of favoring one project over another. Another suggestion was that five identical MOU’s could be developed and sent to each of the desalination project proponents for consideration. There was also discussion about deferring this item to a future Board workshop where the interested parties could participate and issues such as time-lines, financing and environmental concerns related to the projects could be discussed. Director Potter offered a motion to continue this item to the September 29, 2004 strategic planning session of the Board. In the interim, the Policy and Technical Advisory committees could be convened to identify items that should be on the September 29, 2004 agenda related to the desalination projects. Interested parties such as Cal-Am, P/SMCSD, Monterey County Water Resources Agency (MCWRA), and public resource agencies could be invited to the PAC/TAC meeting to allow for a preliminary discussion. Director Pendergrass seconded the motion. After much discussion on the motion, Director Potter clarified his motion to state that the morning session of the September 29, 2004 strategic planning session could be devoted to a discussion of the MOU process and description of the desalination projects. At the August 26, 2004 joint meeting between the Board and the PAC and TAC, there would be an opportunity for the committee members to comment on the MOU and desalination projects. The motion was adopted on a vote of 4 – 3. Directors Foy, Knight, Pendergrass and Potter voted in favor of the motion. Directors Edwards, Lehman and Markey were opposed. In response to questions from the Board, Curtis Weeks, General Manager of the MCWRA, stated that he is working with Cal-Am on development of a joint project, a 21,000 acre-foot desalination project in Moss Landing. An agreement has been developed that begins to establish parameters for the pubic/private partnership. The Monterey County Board of Supervisors was scheduled to discuss adoption of the agreement on August 17, 2004. Mr. Weeks said that he would like to see more information from P/SMCSD on their proposed project before entering into an agreement with that agency. During the public comment period on this item, the following comments were directed to the Board. (1) Marc Del Piero, representing P/SMCSD, stated that it is his understanding that discussions between Cal-Am and the MCWRA have been limited to providing water to the Monterey Peninsula, not North Monterey County. The District is free to choose not to enter into an agreement with P/SMCSD. No matter what the outcome, P/SMCSD will pursue development of a project. (2) Robert Greenwood, representing the Carmel Valley Association, spoke in support of the MOU with P/SMCSD and development of a publicly owned desalination project. (3) John Fischer, resident of Pacific Grove, urged the District, Cal-Am, MCWRA and P/SMCSD to work together to reach agreement on the key concepts and issues surrounding development of a desalination project in Moss Landing. He reasoned that cooperation between the agencies will save time and taxpayer funds. (4) Curtis Weeks, representing the MCWRA, described the Coastal Water Project as designed to provide 10,730 acre-feet of water to alleviate over-pumping of the Carmel River; 1,000 acre-feet of water for the Seaside Groundwater Basin; 2,400 acre-feet of water for the Fort Ord Base Reuse Plan; 3,500 acre-feet to meet 20-year growth projections on the Monterey Peninsula; 1,500 acre-feet for the MCWRA’s integrated water management plan for the Prunedale area; 1,000 acre-feet for Castroville; and 70 AF for Moss Landing. His plan is to develop engineering studies and environmental review at a project level. (5) Peggy Sherril, a resident of Moss Landing and a Commissioner for the Moss Landing Harbor District, spoke in support of public ownership of a desalination project because it would be more cost effective for all water users than a privately owned project. She advised the Board that the Moss Landing Harbor District is one of the agencies that will issue a permit for a desalination project built in that area, and asked that the agency be advised of all meetings associated with a desalination project. (6) Lou Haddad, resident of Monterey, stated that a desalination project could be constructed in Sand City to provide 5,030 acre-feet of water. That amount would be sufficient to meet the District’s needs if the City of Monterey asserted its pueblo water rights. He also proposed that a desalination plant constructed at Moss Landing as proposed under Plan B, along with pueblo water rights is another alternative that should be considered. He requested that both these alternatives be studied in an EIR. There was no discussion of these items. The Closed Session was not conducted. The meeting was adjourned at 9:50 PM.		CALL TO ORDER/ROLL CALL PLEDGE OF ALLEGIANCE ORAL COMMUNICATIONS ORAL COMMUNCATIONS CONSENT CALENDAR 1. Consider Adoption of Minutes of the Regular Board Meeting of July 19, 2004 and Special Board Meeting and Workshop on Water Supply Projects of July 29, 2004 2. Ratify Director Appointments to Carmel River Advisory Committee 3. Receive Annual Monterra Ranch Hydrologic Monitoring Report for Water Year 2003 4. Consider Authorization to Purchase a Server for the Water Demand Division 5. Consider Authorization of Expenditure of Funds to Extend the Contract of a Temporary Employee for the Water Demand Division 6. Consider Extension of United States Geological Survey Cooperative Agreement for Water Year 2005 7. Consider Approval of Fourth Quarter Investment Report 8. Approve Appointment of Board Representative and Alternate to the Monterey County Special Districts Association CONSENT CALENDAR 9. Authorization of General Manager to use District Vehicle in Accordance with Section III C of Employment Agreement 10. Receive Semi-Annual Ground Water Quality Monitoring Report 11. Accept Methodology for Estimating Future Water Needs GENERAL MANAGER’S REPORT 12. Status Report on California American Water Compliance with State Water Resources Control Board Order 95-10 ATTORNEY’S REPORT 13. Report on Closed Session of August 16, 2004 DIRECTORS’ REPORTS 14. Board Comments and Referrals PUBLIC HEARINGS 15. Consider Approval of Application to Create Flagg Hill Water Distribution System ACTION ITEMS 16. Consider Conceptual Changes to MPWMD Rules and Regulations Governing Water Distribution Systems (Ordinance Nos. 96 and 105) 17. Provide Direction on a Proposed Memorandum of Understanding (MOU) with the Pajaro/Sunny Mesa Community Services District (P/SMCSD) for Investigations into Development of a Desalination Project in Moss Landing ACTION ITEMS 17. Provide Direction on a Proposed Memorandum of Understanding (MOU) with the Pajaro/Sunny Mesa Community Services District (P/SMCSD) for Investigations into Development of a Desalination Project in Moss Landing ACTION ITEMS 17. Provide Direction on a Proposed Memorandum of Understanding (MOU) with the Pajaro/Sunny Mesa Community Services District (P/SMCSD) for Investigations into Development of a Desalination Project in Moss Landing INFORMATIONAL ITEMS/STAFF REPORTS 18. Letters Received 19. Committee Reports 20. Strategic Planning Initiatives Progress Report 21. Carmel River Fishery Report 22. Water Conservation Program Report 23. Monthly Allocation Report 24. Monthly California-American Water Company Production Report 25. Quarterly Cal-Am Sales Report 26. Production Report-CAWD/PBCSD Wastewater Reclamation Project 27. Semi-Annual Financial Report on CAWD/PBCSD Wastewater Reclamation Project 28. Monthly Water Supply Status Report ADJOURN TO CLOSED SESSION 1. Conference with Legal Counsel – Existing Litigation (Gov. Code 56956.9 (a)) A. California State Water Resources Control Board Application (SWRCB) T031449; Temporary Permit 21163 B. Petition for Change to SWRCB Permit 11764B C. Petition for Change to SWRCB Permit 20808 D. California-American Water Company v. City of Seaside et al., Monterey County Superior Court Case No. M66343 2. Conference with Legal Counsel – Anticipated Litigation – Significant Exposure to Litigation Pursuant to Subdivision (b) of Section 54946.9: Two Cases ADJOURNMENT
	David A. Berger, Secretary to the Board

U:\staff\word\boardpacket\2004\2004boardpacket\20040920\ConsentCalendar\01\item1_exh1a.doc