EXHIBIT 1-B DRAFT MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District September 19, 2005

The meeting was called to order at 7:05 PM in the Boardroom of the Monterey Regional Water Pollution Control Agency office. Directors present: Vice Chair, Kristi Markey – Division 3 (participated by telephone from Oakland, CA) Alvin Edwards -- Division 1 Judi Lehman -- Division 2 Michelle Knight -- Division 4 David Pendergrass -- Mayoral Representative David Potter -- Monterey County Board of Supervisors Directors absent: Chair, Larry Foy -- Division 5 The assembly recited the Pledge of Allegiance. David Dilworth, Executive Director of Helping Our Peninsula’s Environment (HOPE), spoke to the Board during Oral Communications. He stated that approval of Measure W would save money on future water bills, it would prevent California-American Water (Cal-Am) from interfering in the local election process, and end Cal-Am’s secrecy. On a motion by Director Pendergrass and second by Director Edwards, the Consent Calendar was approved unanimously on a vote of 6 – 0. Director Foy was absent. Approved. Approved. Approved. Henrietta Stern, Project Manager, presented the report. A summary is on file at the District office. In response to questions from the Board, Joe Oliver, Water Resources Manager, stated that the Seaside Basin Management Plan Committee would meet again in October. He also noted that injection of Carmel River water into the Seaside Basin as part of the Aquifer Storage and Recovery Project (ASR) should begin once a permit is issued by the State Water Resources Control Board (SWRCB). David Dilworth, representing HOPE, asked for clarification of the process for filing a protest to the District’s application to divert water from the Carmel River for the ASR project. Mr. Laredo explained that protests to the application must be filed within the noticed protest period. Once received, the protests must be responded to. If the protest cannot be resolved, the issue must go to a hearing. He noted that the two protests that have been filed would likely be dismissed. There should be no need for a hearing. Darby Fuerst presented the report. A summary is on file at the District office. Mr. Fuerst announced that Cal-Am’s year-to date production from the Carmel River during the past 12-month period was 593 acre-feet under the limit established as a result of SWRCB Order 95-10. He noted that all production was from groundwater sources. No surface water was diverted for distribution. Cal-Am production from the Seaside Basin was 961 acre-feet below the target production during the same time period. The new water year will begin in October 2005. Cal-Am must limit production from the Carmel River to 11,285 acre-feet between October 1, 2005 and September 30, 2006. Target production from the Seaside Groundwater Basin for that time period is 3,792 AF. In response to questions from the Board, Mr. Berger agreed that staff would distribute a press release congratulating the community on their conservation efforts. Mr. Fuerst advised the Board that water used by Cal-Am customers who were found not to have been billed for that use, is reflected in the Cal-Am production figures. District Counsel Laredo reported that the Board met in Closed Session at 5:30 PM. The Board received status reports on the six items listed on the agenda. No action was taken. Director Lehman reported that she viewed the movie “Thirst.” She encouraged everyone to see the film. On a motion by Director Knight and second by Director Markey, the October through December 2005 Quarterly Water Supply Strategy and Budget was approved by the Board on a unanimous vote of 6 – 0. Director Foy was absent. No public comment was directed to the Board during the public hearing on this item. Director Edwards made a motion to continue this item to the next meeting when all Directors would be present. There was no second to the motion. Director Markey made a motion that was seconded by Director Edwards, to continue this item to the October 17, 2005 Board meeting and request that both parties submit briefs outlining their positions. The motion was further clarified to state that a closed session would also be conducted with the District’s labor negotiators to determine if there is a basis to negotiate a settlement on this grievance. The motion was approved on a unanimous vote of 6 – 0. Director Foy was absent. The following comments were received during the public comment period on this item. (1) Tim McCormick, representative for Laborers’ International Union of North America Local 270, identified himself as the person who filed the grievance on behalf of affected employees. Mr. McCormick related the series of events that preceded this item coming before the Board of Directors. According to Mr. McCormick, the union honored a request by the District that it refrain from consulting with legal counsel on this grievance. Mr. McCormick asserted that it was unfair for the District to submit a legal opinion, since the union was not given the same opportunity. He urged the Board to consider only the hearing officer’s decision, and to discount the legal opinion that was submitted by the District. He requested a continuance of this item so that the union could consult with legal counsel and present a legal brief for Board consideration. (2) Tom Lindberg representing himself, David Dettman and Rob Cline, the District staff persons named in the grievance. Mr. Lindberg read a letter dated September 17, 2005 that is on file at the District office. The letter took issue with the opinion submitted by special counsel, Eileen Aldrich. He noted that, to his knowledge, the union had not been invited to submit a legal opinion for Board consideration. He requested that the Board be apprised of the total cost to the District of providing insurance benefits, should the affected employees decide to rejoin the health insurance program. He requested that the Board implement the hearing officer’s recommendation. (3) David Dettman, one of the employees named in the grievance, stated that the expense to the District represented in the request was not excessive. He pointed out that employees who filed the grievance represent over 40 years of accumulated service time. He requested that the general employees bargaining unit be treated the same way that the management employees bargaining unit was treated in regards to the health insurance issue. (4) Rick Dickhaut, MPWMD Chief Financial Officer, and member of the team that negotiated the employee contract in question. He stated that during negotiations, there had been no discussion of the proposal brought forth by Local 270 in the grievance. He expressed a concern that if the union’s request were granted, the result could be inequity in pay. For example, if two persons held the same job title, the person who had opted out of the District’s insurance program could be paid $250 more than the other employee. (5) Ellen Aldrich, special counsel representing the General Manager, stated that based on legal principles applicable to contract interpretation, there are grounds to not follow the recommendation of the hearing officer. She recommended that the Board reject the hearing officer’s findings as appropriate and sustain the General Manager’s recommendation.

CALL TO ORDER/ROLL CALL PLEDGE OF ALLEGIANCE ORAL COMMUNICATIONS CONSENT CALENDAR 1. Consider Adoption of Minutes of the Regular Board Meeting of August 15, 2005 2. Consider Expenditure of Budgeted Funds for Purchase of Digital Visual Presenter 3. Consider Approval of Fourth Quarter 2004-05 Investment Report PRESENTATIONS 4. Water Supply Project Alternatives Update GENERAL MANAGER’S REPORT 5. Status Report on California-American Water Compliance with State Water Resources Control Board Order 95-10 ATTORNEY’S REPORT 6. Report from District Counsel on 5:30 PM Closed Session of the Board DIRECTORS’ REPORTS 7. Oral Reports on Activities of County, Cities, Other Agencies/Committees/ Associations PUBLIC HEARINGS 8. Consider Adoption of October through December 2005 Quarterly Water Supply Strategy and Budget ACTION ITEMS 9. Consider Hearing Officer’s Findings and Recommendations on Grievance Appeal of Laborers’ International Union of North America Local 270 INFORMATIONAL ITEMS/STAFF REPORTS 10. Letters Received 11. Committee Reports 12. Strategic Planning Initiatives Progress Report 13. Carmel River Fishery Report 14. Water Conservation Program Report 15. Monthly Allocation Report 16. Monthly California-American Water Company Production Report 17. Monthly Water Supply Status Report 18. Semi-Annual Financial Report on the CAWD/PBCSD Wastewater Reclamation Project ADJOURNMENT

____________________________________

David Berger, Secretary to the Board

U:\staff\word\boardpacket\2005\2005boardpackets\20051017\ConsentCal\01\item1_exh1b.doc