EXHIBIT 15-A

MPWMD Board Sets New Strategic Vision for 2004-05

At a special workshop in September 2004, the Monterey Peninsula Water Management District (MPWMD) Board of Directors set a new strategic vision for the District that emphases collaboration with other agencies toward water supply solutions that are fiscally and environmentally responsible. The Board also identified a series of actions to support a objectives that address water supply, community and fiscal issues, as well as the four District Divisions: water resources, water demand, planning and engineering, and administrative services. The overall goal is to be more effective and responsive to the public. Examples of objectives include:

Ø Increase community partnerships and collaboration;

Ø Improve public understanding of MPWMD role and responsibilities;

Ø Identify and assess long-term water supply options such as desalination, and MPWMD’s role in implementation;

Ø Move forward on near-term aquifer storage and recovery (ASR) project;

Ø Develop Seaside Basin Groundwater Management Plan;

Ø Streamline water distribution system permit process;

Ø Simplify water connection permit procedures and ensure policies are consistent;

Ø Communicate and educate local jurisdictions and the public about permits;

Ø Continue to implement successful conservation program;

Ø Make budget more user-friendly to Board and public;

Ø Assess how to make internal procedures more efficient and cost-effective.

The District strives to achieve these objectives through Board approval of new policies, procedures, and funding of priority projects, as well as diligent effort by staff to carry out Board direction.

VISION STATEMENT

The MPWMD:

1. Will strive to serve as a catalyst in collaboration with public and private entities for environmentally responsible solutions that result in a reliable and legal water supply; and
2. Shall be a fiscally responsible, professionally and publicly respected leader in managing water resources.

MISSION STATEMENT

The mission of the MPWMD is to manage, augment and protect water resources for the benefit of the community and the environment.

Financial Update

Total revenues received in FY 2003-04 was $3,919,727 while expenditures totaled $4,843,346. The difference of $913,239 was funded from general operating reserves set aside in previous years to fund projects such as those the District is currently pursuing. As of June 30, 2004, a balance of $2,609,779 remained in the general operating reserves account.

The adopted Budget for FY 2004-05 anticipates revenues of $3,669,000 and expenditures of $4,726,300 combined with the use of an additional $1,057,300 in general operating reserves. As a part of its budget-balancing plan, the State will receive approximately $190,000 of the District’s property tax revenues in each of the next two years. The FY 2004-05 budget factors in the reduction for the first year’s shifting of these revenues to the State.

In late 2004, the District opted to expand to the budget to a program and performance based budget for FY 2005-06. A series of strategies for balancing that budget with a diminished use of general operating reserves was developed by staff and adopted by the Board. The strategies include replenishing the general operating reserves in future years.

Staff Members Recognized for Outstanding Performance

The “Distinguished Dowser Award” recognizes a staff member’s outstanding effort and performance in his/her duties. This honor is awarded periodically, and the Distinguished Dowser trophy is passed from recipient to recipient. The Dowser Awards for 2004 were: Greg James for surface water monitoring reporting, Sara Ramos for overseeing successful placement of the Board packet on the District web page, Henrietta Stern for work on the Desalination Project Draft EIR, Larry Hampson for work on the District web page update, Tom Lindberg and Dave Dettman for their work on the Santa Margarita ASR well, Henrietta Stern and Arlene Tavani for their work on the Strategic Planning Meeting, Shawn Novack and Thomas Christensen for representing the District in a booth at the National Marine Sanctuary Day, Cynthia Schmidlin for project management on developing a new employee appraisal process, and Gabby Ayala, Rob Cline, Debbie Martin, and Candice Pfitzer for maintaining Water Demand Division responsiveness to the public during a difficult period of special projects and understaffing.

Year 2004 Accomplishments And Milestones

Consistent with its mission to “manage, augment, and protect water resources for the benefit of the community and environment,” the District achieved the following accomplishments in calendar year 2004.

• Invited representatives from public agencies and private companies to make presentations about their water supply project proposals.

• Presented comprehensive matrix on water project concepts to facilitate comparison and discussion of next steps. Projects included three seawater desalination plants, aquifer storage and recovery (ASR) in the Seaside Basin, and two types of reclaimed water projects. Criteria such as technical and regulatory issues, cost, yield, site control, and partnership opportunities were addressed.

• Obtained temporary water rights to divert Carmel River excess winter flow and inject it into the Seaside Basin via the MPWMD ASR test project. Successfully injected water and conducted water quality studies.

• Provided water to the Cal-Am system for customer use due to a pump failure at a key Cal-Am well. The MPWMD mobilized its Santa Margarita Test Well into full-scale production mode, which accounted for about 15 percent of total Cal-Am daily production in Summer/Fall 2004.

• Initiated Environmental Impact Report (EIR) on long-term MPWMD Phase 1 ASR project with a goal of 1,300 acre-feet per year production. The ASR project will reduce pumping impacts to the Carmel River and help restore the depleted Seaside Basin coastal subareas.

• Completed geotechnical (test wells) and geophysical (sonic) studies that significantly improved scientific understanding of the coastal hydrogeology and production capacity along Sand City and Fort Ord. This information is useful to any entity planning wells or desalination facilities along the coast.

• Initiated Seaside Basin Groundwater Management Plan in compliance with protocols set by the State of California. District staff met with an Advisory Committee comprised of major pumpers, agency officials, and stakeholders. The MWPMD Board approved a formal public outreach program that will commence in 2005.

• Adopted ordinance and signed six agreements with public and private partners to facilitate a Phase 2 wastewater reclamation project in Del Monte Forest through the year 2075. Improvements are needed to solve water quantity and quality problems, boost reclaimed water production, and reduce use of drinking water on Pebble Beach golf courses. Surplus water will help fill the Carmel River Lagoon to benefit steelhead.

• Coordinated with managers of local water agencies and Cal-Am to discuss cooperative solutions to regional water problems.

• Obtained key federal permit for comprehensive Carmel River management activities focusing on protection of steelhead and riparian (streamside vegetation) corridor.

• Maintained Carmel River channel by removing trash and debris and by trimming encroaching vegetation posing hazard to riverbank stability.

• Monitored Carmel River and lagoon to protect riparian vegetation and fish and wildlife habitat.

• Irrigated native trees and shrubs along the Carmel River to enhance bank stability.

• Assisted local, state, and federal agencies in maintaining water quality for steelhead in the Carmel River lagoon.

§ District’s program for mitigating impacts of Carmel Valley diversions focuses on maintaining a healthy environment for steelhead spawning and rearing and rescuing juvenile steelhead that are at risk of stranding. The 2004 run of 388 adults at San Clemente Dam was below average and about one-half of the recent peak runs and the juvenile population was at similar low levels. While the number of adults and juveniles may not have recovered to historical levels, the trend of increasing numbers over the last thirteen years indicates that the steelhead population continues to recover from the impacts of the 1987-1991 drought. Despite this overall increasing trend on the Carmel River in the last 13 years, steelhead continue to be listed as a threatened species on the Carmel River and areas throughout central and south-central California under the federal Endangered Species Act.

§ In 2004, District staff conducted 46 rescues operations from May 10 through September 8, 2004, yielding a total of 17,131 fish, and including two adults, 67 smolts, 725 juveniles, 16,123 young-of-the-year, and 214 mortalities. Of the total rescued, 16,137 fish were stocked at Sleepy Hollow including 15,481 young-of-the –year and 656 yearlings, yielding a release of 6,894 fish for an overall survival of 42%.

• During Water Year 2004, California American Water produced 15,012 acre-feet from its sources in the Carmel River and Seaside Groundwater Basins for customer use in its main system.

• Rainfall and runoff in Water Year 2004 were below normal with 18.1 inches of rainfall and 36,300 acre-feet of runoff measured at San Clemente Dam in the Upper Carmel River Basin.

• During 2004, 388 adult steelhead were counted at the San Clemente Dam fish ladder and juvenile steelhead averaged 0.7 fish per foot of stream in the Carmel River.

• During the low-flow season, staff rescued over 17,000 steelhead from drying reaches of the Carmel River and transported them to the District’s Sleepy Hollow Rearing Facility.

• During Water Year 2004, the District injected 160 acre-feet of water into the Seaside Groundwater Basin.

• The District’s test injection/recovery well was put into service as an emergency supply and produced almost 770 acre-feet of water for Cal-Am’s customers water in Water Year 2004.

Toilet Replacement Refund Program

• 206 Applications Approved
• 5.188 Acre-Feet Water Saved
• $25,985.01 Rebated

Inspections & Permit Activity

• 1,587 inspections performed
• 14.122 Acre-Feet of water saved by retrofits verified
• 1,317 water permit issued
• Spearheaded a major database conversion project to streamline Division processes, improve customer services & permit processing time, and increase over-all system efficiency for all permits and conservation related programs

Conservation Education/Activities

• Conducted conservation seminar to Hidden Hills area residents
• Dual-flush toilets installed and tested at District office
• One gallon toilets installed and tested at District office
• First Annual Open House
• Installed and tested WeatherTRACK- ET controller, resulting in an immediate reduction of 37.5% of monthly irrigation water use on the test site (preliminary results)
• New copier/printer/fax/scanner purchased?
• Expanded rebate program went into affect
• New APN filing system
• Partnered with Cal Am during Stage 3 Conservation Rationing to implement an urgent conservation campaign, notify and audit properties in the highest water use category, and influenced overall water use/Cal Am production to enable staying within the production limits set by the PUC
• Conducted a presentation on District permitting and conservation related information in a real estate course at Monterey Peninsula College

Interagency Coordination

• Coordinated and hosted Ground water seminar with WAC

2004 Board of Directors

Alvin Edwards, Chair	Division 1	831-394-1309
Larry Foy, Vice Chair	Division 5	831-625-1589
Judi Lehman	Division 2	831-375-2294
Kristi Markey	Division 3	kmarkey65@earthlink.net
Michelle Knight	Division 4	831-646-9324
David Pendergrass	Mayoral Representative	831-394-3054
David Potter	Monterey County Board of Supervisors	831-647-7755

„Board Officers for 2005 are: Larry Foy, Chair

Kristi Markey, Vice Chair

Staff Contact Information

General Information	658-5600
Water Permit Office	658-5601
David A. Berger	General Manager	Overall Agency Management	658-5650
Rick Dickhaut	Chief Financial Officer	Financial/Administrative	658-5614
Andy Bell	Planning & Engineering Manager	Water Supply Project Planning/ Environmental Restoration	658-5620
Henrietta Stern	Public Information Officer	Public Information Program	658-5621
Joe Oliver	Water Resources Manager	Ground & Surface Water Monitoring/Aquifer Storage & Recovery/Fisheries Enhancement	658-5640
Stephanie Pintar	Water Demand Manager	Water Permits and Conservation	658-5630

Monterey Peninsula

Water Management District

5 Harris Court, Bldg. G, P.O. Box 85, Monterey, CA 93942-0085

(831) 658-5600, Fax (831) 644-9560, http://www.mpwmd.dst.ca.us

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