EXHIBIT 4-I-1

Marina Coast Regional Urban Water Augmentation Project

Purpose and Project Description

Prepared by MCWD, August 15, 2005

The Regional Urban Water Augmentation Project involves two major water augmentation supply projects: seawater desalination and recycled water. The project was designed to meet redevelopment requirements of the former Fort Ord as anticipated by the Fort Ord Reuse Plan (FORP) and its accompanying Final EIR. The Project’s key objective, or goal, is to provide 2,400 acre-feet per year (AFY) of water to the former Fort Ord area. In addition to this 2,400 AFY quantity, 300 AFY of water is being considered to supply the Monterey Peninsula (defined as California-American Water Company’s Monterey Division service area) and 300 AFY of water is being considered to supply MCWD’s other service areas.

The certified EIR identified evaluated several alternatives, including the “Hybrid Alternative” which was recently endorsed by the MCWD and FORA boards of directors.

The “Seawater Desalination Alternative” is described as a new 3,000 AFY desalination facility in the area currently occupied by the MCWD’s existing desalination plant. The proposed replacement desalination project meets the project objective of 2,400 AFY, replaces the District’s existing 300 AFY desalination plant, and also provides 300 AFY for use within or outside of the District service areas, e.g., on the Monterey Peninsula.

The “Recycled Water Alternative” provides 3,000 AFY of recycled water, which meets the project objective of 2,400 AFY, but would also provide 300 AFY of recycled water to

the Monterey Peninsula and an additional 300 AFY for use within or outside District service areas.

The “Hybrid Alternative” includes a water supply of up to 1,500 AFY from an expansion of MCWD’s seawater desalination plant (including replacement of the existing 300 AFY capacity plant) and the production and distribution of up to 1,500 AFY of recycled water for landscape irrigation. The EIR concluded that depending upon the recycled water needs at the former Fort Ord, the remainder would be used for MCWD’s other service areas and potentially, the Monterey Peninsula, via a new recycled water distribution system.

Scoping for the “Hybrid Alternative” project and its two components (desalination and recycled water) will begin August 2005. The ultimate size and design of the desalination component project and the recycled water component project will depend on the many factors. Scoping will help determine how much potable and nonpotable water from these two projects may be designated to the Monterey Peninsula.

Submitted by M. Armstrong, MCWD, 08/15/05 via e-mail