EXHIBIT 2-A

MPWMD Board Sets New Strategic Vision for 2004-05

In September 2004, the Monterey Peninsula Water Management District (MPWMD) Board of Directors set a new strategic vision for the District that emphasizes collaboration with other agencies toward water supply solutions that are fiscally and environmentally responsible. The Board also identified a series of actions to support objectives that address water supply and community and fiscal issues. 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 Expand and continue to improve successful conservation program;

Ø Continue successful environmental programs to protect Carmel River resources;

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 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 above and beyond his/her normal duties. Pictured below are the 2004 recipients:

[Photo of 2004 recipients to be inserted]

(Pictured from left to right are Greg James, Sara Ramos, Henrietta Stern, Larry Hampson, Tom Lindberg, Dave Dettman, Arlene Tavani, Thomas Christensen, Cynthia Schmidlin, Gabby Ayala, Rob Cline, and Debbie Martin)

Year 2004 Accomplishments and Milestones

The District’s Board and staff achieved the following accomplishments in calendar year 2004:

Conservation/Permitting

• Approved 206 rebate applications for a total of $25,985 resulting in annual water savings of 5.188 acre-feet.

• Issued 1,217 water permits and performed 1,587 inspections resulting in annual water savings of 14.122 acre-feet.

• Conducted water conservation seminars for local homeowners, college students and realtors.

• Installed different types of advanced technology water saving toilets at District office for testing and demonstration.

• Installed and tested advanced technology irrigation controller at District office resulting in an immediate reduction of 37.5% water use.

• Guided Cal-Am during Stage 3 Conservation to implement urgent water conservation campaign to stay within state imposed production limits.

Environmental Protection

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

• Rescued over 17,000 young steelhead from drying reaches of the Carmel River and transported them to the District’s Sleepy Hollow Rearing Facility for later release.

• Counted 388 adult steelhead at the San Clemente Dam fish ladder to assess the health of the population.

• Maintained Carmel River by removing trash/debris and irrigating trees/shrubs to enhance riverbank stability.

Water Supply

• Presented a 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.

• Initiated Environmental Impact Report (EIR) on long-term MPWMD Phase 1 ASR project. The ASR project will reduce pumping impacts to the Carmel River and help restore the depleted Seaside Basin coastal subareas.

• Obtained temporary water rights to divert Carmel River excess winter flow and inject it into the Seaside Basin via the District’s ASR test project. Successfully injected 160 acre-feet of water, conducted water quality studies and provided approximately 700 acre-feet of emergency supply to the Cal-Am system.

• Initiated Seaside Basin Groundwater Management Plan in compliance with protocols set by the State of California.

2004 Board of Directors

Alvin Edwards, Chair	Division 1
Judi Lehman	Division 2
Kristi Markey	Division 3
Michelle Knight	Division 4
Larry Foy, Vice Chair	Division 5
David Pendergrass	Mayors’ Representative
David Potter	Monterey County Board of Supervisors Representative

Staff Contact Information

General Information	658-5600
Water Permit Office	658-5601
David A. Berger	General Manager/Board Secretary	658-5650
Andrew Bell	Planning & Engineering Manager/District Engineer	658-5620
Rick Dickhaut	Administrative Services Manager/CFO/Treasurer	658-5614
David Laredo	General Counsel	658-5650
Joseph Oliver	Water Resources Manager	658-5640
Stephanie Pintar	Water Demand Manager	658-5630
Henrietta Stern	Project Manger	658-5621

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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