EXHIBIT 1-A
DRAFT MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District September 20, 2004
The meeting was called to order at 7:02 PM in the Monterey City Council Chambers. Directors 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 Directors absent: David Potter – Monterey County Board of Supervisors General Manager present: David A. Berger District Counsel present: David C. Laredo The assembly recited the Pledge of Allegiance. The following comments were received during Oral Communications. (1) Seth Carter asked for direction from the Board on how to proceed with obtaining a water permit for a house on an existing vacant lot. District staff had advised him there was water available for the house he plans to construct but not for landscaping. (2) Jim Lindgren asked the Board to provide a solution to his need for additional water credit on a site. The amount of water available for use at the site is insufficient because no water credit was given for previous outdoor irrigation that occurred there. (3) Susan Kipping, a resident of Felton, California, urged residents of the Monterey area to be aware of hearings the Public Utilities Commission (PUC) has set regarding California-American Water’s (Cal-Am) application to consolidate the Felton and Monterey divisions. She announced that Friends of Locally Owned Water (FLOW) would sponsor a showing of the documentary Thirst on September 23, 2004, at the Rio Theatre in Santa Cruz. (4) David Dilworth, representing Helping Our Peninsula’s Environment (HOPE), proposed that the District take over Cal-Am’s facilities. He announced that HOPE would conduct a forum in October to describe how the citizens in Montara established public ownership of their water facilities. Representatives from the group FLOW would also speak at the forum. On a motion by Director Pendergrass and second by Director Foy, the Consent Calendar was adopted except for item 2 that was pulled for separate consideration, and item 3 that was deferred to the October 20, 2004 Board meeting. The motion was approved unanimously on a vote of 6 – 0. Director Potter was absent. Approved. On a motion by Director Foy and second by Director Knight, the Board accepted the Monterra Ranch Mutual Water Company Annual Water Monitoring Program Report for Water Year 2003 as fulfilling the requirements of the water distribution system’s permit conditions. The motion was adopted on a vote of 4 – 2. Directors Edwards, Foy, Knight and Pendergrass voted in favor of the motion. Directors Lehman and Markey were opposed. Deferred to the October 20, 2004 Board meeting. Approved. Approved. Darby Fuerst, Senior Hydrologist, reported that through September 19, 2004, Cal-Am’s year-to-date production from the Carmel River totaled 10,929 acre-feet which is 179 acre-feet under the limit set by the State Water Resources Control Board (SWRCB). Cal-Am should be in compliance with SWRCB Order 95-10 for Water Year 2004 (October 1, 2003 through September 30, 2004). The new water year will begin on October 1, 2004. Monthly water production targets are low for the months of October through December so the community must redouble its efforts to conserve water in order to keep production below the monthly targets. District Counsel Laredo reported that the Board did not meet in Closed Session on August 16, 2004. He reported that at the September 20 Closed Session the Board reviewed three items pending before the SWRCB that were related to the District’s plans and applications for an aquifer storage and recovery project. In addition, two matters pending before the PUC were discussed regarding Cal-Am’s proposed Coastal Water Project and its application for a rate consolidation between the Felton and Monterey divisions. Mr. Laredo announced that the PUC has tentatively set a November 17, 2004 hearing date in Monterey on the rate consolidation issue. The PUC will provide public notice of the final hearing date. At the closed session, the Board also reviewed pending litigation between Cal-Am and the City of Seaside. In addition, two items of anticipated or threatened litigation were also discussed. The Board also provided direction to its negotiator re the General Manager’s employment agreement. No other action was taken. Director Markey congratulated the community for keeping water use below the limit set by SWRCB Order 95-10. She asked how money received by Cal-Am for fines levied on large water users was allocated. Director Markey encouraged the public to view the documentary Thirst. Director Knight announced that the local number for Cal-Am customers to call to report system leaks is 646-3268. Director Foy thanked the community for its water conservation efforts. He also acknowledged that the District and Cal-Am cooperated closely to ensure that the District’s Aquifer Storage and Recovery Project (ASR) well was able to supplement Cal-Am’s water supply when the Paralta Well was not in service. He noted that greater cooperation is needed between the District and Cal-Am. Director Edwards thanked Cal-Am for withdrawing its request to the PUC for implementation of a water connection moratorium. He asked Cal-Am to produce a timeline for repair and operation of the Paralta Well. He expressed hope that Cal-Am would support the District’s request to the SWRCB for operation of the 1995 ASR project. Director Knight offered a motion to adopt the October through December 2004 Quarterly Water Supply Strategy and Budget. The motion was seconded by Director Foy and adopted unanimously on a vote of 6 – 0. Director Potter was absent. The following comments were received during the public hearing on this item. (1) Steven Leonard, Cal Am Water, thanked water users for their conservation efforts. He proposed that the system of production targets be modified, possibly by establishing 30 or 90-day periods that could trigger stricter conservation measures, instead of monthly triggers. In response to Director Markey’s question about how money recovered by Cal-Am from fines for excessive water use are allocated, he stated that any funds received in excess of the regular rates are placed in an WRAM account, and then distributed to Cal-Am customers that complied with conservation program requirements. He noted that Cal-Am could request that the PUC distribute that money to other programs. Mr. Leonard announced that the both the Paralta and Santa Margarita wells were not operational. He stated that the Paralta Well might be operational again sometime during the week of September 27, 2004. (2) John Fischer, a resident of Pacific Grove, asked Mr. Fuerst if the monthly targets are based on sliding five-year averages. Mr. Fuerst responded that the monthly distribution is based on the most recent fixed10-year period and is distributed by month. (3) David Dilworth, representing HOPE, stated that the District has approved 8,000 new water connections in the past 20 years which is the cause of the present water situation. He stated that HOPE supports a moratorium on new water connections so that water customers who practice conservation will be protected. Director Pendergrass made a motion to accept the Technical Advisory Committee recommendation and direct staff to utilize each jurisdiction's general plan as the standard for estimating future water needs. The motion was seconded by Director Foy. Director Markey offered a substitute motion to continue this item to a future meeting after the Board has reviewed the jurisdictions’ general plan numbers, and more information is available on funding a future water supply project. The motion was seconded by Director Lehman and failed on a vote of 2 – 4. Directors Lehman and Markey voted in favor of the motion. Directors Edwards, Foy, Knight and Pendergrass were opposed. Director Potter was absent. The original motion was adopted on a vote of 5 – 1. Directors Edwards, Foy, Knight, Lehman and Pendergrass voted in favor of the motion. Director Markey was opposed. Director Potter was absent. The following comments were directed to the Board during the public hearing on this item. (1) Robert Greenwood, representing the Carmel Valley Association, stated that the estimate of water needs could represent many hours of staff time for a project that may never be approved. (2) David Dilworth, representing HOPE, read a statement dated September 20, 2004, that is on file at the District office. He proposed that the jurisdictions pay for their proportional share of the water that they are requesting. (3) Charley Kemp, Operations Manager for Cal-Am, suggested that the District utilize the Equivalent Consumption Unit methodology as an alternative to the fixture-unit method for determining residential water use capacity. (4) Steven Leonard, Vice President and General Manager for Cal-Am, spoke in support of the Technical Advisory Committee recommendation. He pointed out that the proposed Coastal Water Project will be designed to meet the water requirements of the jurisdictions Cal-Am serves. He noted that Cal-Am relies on data provided by the District that is based on input from the jurisdictions. Director Knight offered a motion to accept the staff recommendation to reject draft Ordinance No. 117 and that Rule 28.5 should remain unchanged. The motion was seconded by Director Pendergrass and adopted unanimously on a vote of 6 – 0. Director Potter was absent. The following comments were received during the public comment period on this item. (1) Robert Greenwood, representing the Carmel Valley Association, recommended that the Board support draft Ordinance No. 117 as an improved policy for water credit transfers. (2) David Dilworth, representing HOPE, expressed support for the staff recommendation to reject draft Ordinance No. 117. (3) John Mason, a resident of Monterey, stated that the District should give the jurisdictions some latitude in transferring water credits for use by private citizens. Mr. Mason said that he does not support big developments but would like a small amount of water to build a home for his son so he can live and work locally. On a motion by Director Foy and second by Director Lehman, the Board approved the re-appropriation of funds from Fiscal Year 2003-2004 to Fiscal Year 2004-2005 in the amount of $31,000 to complete the Policies and Procedures Manual contract with Land Systems Group. The motion was approved unanimously on a vote of 6 – 0. Director Potter was absent. During the public comment period on this item, John Fischer, a resident of Pacific Grove, expressed support for funding completion of the Policies and Procedures Manual. There was no discussion of the Informational Items/Staff Reports. The meeting was adjourned at 8:55 PM.	CALL TO ORDER/ROLL CALL PLEDGE OF ALLEGIANCE ORAL COMMUNICATIONS CONSENT CALENDAR 1. Consider Adoption of Minutes of the Regular Board Meeting of August 16, 2004 and the Special August 26, 2004 Joint Meeting of the Board and the Technical and Policy Advisory Committees 2. Receive Annual Monterra Ranch Hydrologic Monitoring Report for Water Year 2003 3. Consider Adoption of Resolutions of Appreciation to Chuck McKay and Rod Mills for Service on the Carmel River Advisory Committee 4. Authorize Expenditure of Budgeted Funds for Strategic Planning and Goal Setting Facilitation Services by Apex Strategies 5. Authorize Expenditure of Budgeted Funds for Sleepy Hollow Steelhead Rearing Facility Standing Generator Maintenance Agreement with Quinn Engine Systems for Fiscal Year 2004-2005 GENERAL MANAGER’S REPORT 6. Status Report on California-American Water Compliance with State Water Resources Control Board Order 95-10 ATTORNEY’S REPORT 7. Report on August 16 and September 20, 2004 Closed Sessions DIRECTORS’ REPORTS 8. Board Comments and Referrals PUBLIC HEARINGS 9. Consider Adoption of October through December 2004 Quarterly Water Supply Strategy and Budget PUBLIC HEARINGS 9. Consider Adoption of October through December 2004 Quarterly Water Supply Strategy and Budget ACTION ITEMS 10. Receive Technical Advisory Committee Recommendation on Common Methodology for Calculating Long-Term Water Needs and Provide Direction to Staff ACTION ITEMS 10. Receive Technical Advisory Committee Recommendation on Common Methodology for Calculating Long-Term Water Needs and Provide Direction to Staff 11. Consider Recommendation of Policy Advisory Committee (PAC) and Technical Advisory Committee (TAC) Regarding Modification to the Water Credit Transfer Policy (Draft Ordinance No. 117) 12. Approve Re-Appropriation of Funds for Policies and Procedures Manual Consultant Services INFORMATIONAL ITEMS/STAFF REPORTS 13. Letters Received 14. Committee Reports 15. Strategic Planning Initiatives Progress Report 16. Carmel River Fishery Report 17. Water Conservation Program Report 18. Monthly Allocation Report 19. Monthly California-American Water Company Production Report 20. Production Report – CAWD/PBCSD Wastewater Reclamation Project 21. Monthly Water Supply Status Report ADJOURNMENT

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David A. Berger, Clerk to the Board

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