EXHIBIT 1-B

DRAFT MINUTES

Special Meeting/Board Workshop

Board of Directors

Monterey Peninsula Water Management District

June 29, 2006

CALL TO ORDER/ROLL CALL

The meeting was called to order at 7:15 PM in the Boardroom of the Monterey Regional Water Pollution Control Agency offices.

Directors present:

Michelle Knight, Chair – Division 4

Judi Lehman, Vice Chair – Division 2

Alvin Edwards – Division 1

Kristi Markey – Division 3

Larry Foy – Division 5

David Pendergrass – Mayoral Representative

David Potter – Monterey County Board of Supervisors (arrived at 7:18 PM)

Directors absent: None

General Manager present: David Berger

District Counsel present: David C. Laredo

PLEDGE OF ALLEGIANCE

The assembly recited the Pledge of Allegiance.

ORAL COMMUNICATIONS

No comments were directed to the Board during Oral Communications.

WORKSHOP/DISCUSSION

1. Receive Report on Evaluation of Seawater Desalination Projects by Bookman-Edmonston/GEI Consultants

The presentation was given by Mark Williamson of Bookman-Edmonston/GEI Consultants (B-E/GEI). He is the Principal-in-Charge for preparation of the desalination project evaluation. A summary of his presentation is on file at the District office and on the District’s website. Also representing B-E/GEI, was Marc Rozman the Team Leader for preparation of the evaluation. The Board asked questions of the consultants and discussed the study. Chair Knight stated that the Board could at a future date discuss preparing an addendum to the report, once it is determined if funds remain within the contracted amount to amend the report.

The following comments were made by Mr. Williamson and Mr. Rozman in response to questions from the Board. (1) Seasonal storage might be needed for the Sand City Desalination Project if it is projected that during a high flow period the amount of flow would exceed the outfall. (2) A conceptual design report on the Monterey Bay Regional Seawater Desalination Project (MBRSDP) stated that pesticides were not detected in the intake water. Poseiden Resources will provide the detailed information supporting that assertion to B-E/GEI. (3) The most accurate way to compare project costs is to review the unit-cost factors provided in the report. The following comments were also made in response to questions from the Board. (4) Paul Finley, representing RBF Consulting, project managers for the Coastal Water Project, stated that water quality information provided for the Coastal Water Project was obtained from intakes in Moss Landing Harbor for testing required for a National Pollution Discharge Elimination System (NPDES) Permit. (5) Peter MacLaggen, representing Poseiden Resources, project manager for the MBRSDP stated that the NPDES permit for the intake and outfall at the National Refractories site expired in May 2006. A renewal application is in process. Consideration of renewal of the permit for the full-scale plant should occur following permitting of the pilot project. He noted that the pilot project includes an innovative measure to reduce the rate at which water flows to the intake, so that when fish hit the screens they can swim away. Also planned, is the installation of a series of screens at the intake that will capture organisms and flush them back into the ocean. (6) David Laredo stated that California American Water (Cal Am) does have a limited right to acquire property through a process established by the Public Utilities Commission. The MPWMD or Pajaro/Sunny Mesa Community Services District could utilize the power of eminent domain.

The meeting was recessed at 9 PM and reconvened at 9:10 PM.

The following comments were directed to the Board during the public comment period. (1) David Dilworth, representing Helping Our Peninsula’s Environment, cautioned that high concentrations of DDT have been detected in Moss Landing Harbor. He also noted that approximately 300 million larvae are killed every day at the Duke Energy intake facility. According to Mr. Dilworth, there is no indication that the intake will be re-certified, which would affect plans to use it as an intake site for a desalination project. (2) Manuel Fierro asked several questions about the information presented by Mr. Williams. (1) Will the 8,400 acre-feet per year Sand City Desalination Project meet the requirements of SWRCB Order 95-10? (2) Why is information on financing the Coastal Water Project not available? (3) What is the current cost per acre-foot for water produced by Cal Am? (3) John Kline, Senior Operations Engineer for Cal Am and Technical Project Manager for the Coastal Water Project, thanked the Board for commissioning the study. He stated that water quality issues raised during Board discussion will be addressed in the Watershed Sanitary Survey to be conducted with the Department of Health Services during desalination pilot plant testing. He advised the Board that success of the Coastal Water Project is dependant on the aquifer storage and recovery (ASR) project component to meet peak summer production demands, so removing ASR costs from the cost summary does not result in an equal comparison of the projects.

ADJOURNMENT

The meeting was adjourned at 9:30 PM.

___________________________________

David A. Berger, Secretary to the Board

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