ITEM:		ACTION ITEMS
25.	CONSIDER APPROVAL OF Memorandum of Understanding to form the Monterey Bay Regional Water Solutions LEADERSHIP Task Force
Meeting Date:			June 18, 2007	Budgeted:	N/A
From:			David A. Berger,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Same	Cost Estimate:	N/A
General Counsel Approval: N/A
Committee Recommendation: The Administrative Committee reviewed this item on June 7, 2007 and recommended approval of the $5000 minimum contribution for technical analysis work required by the Task Force. Approval of the MOU was referred to the full Board without any recommendation.
CEQA Compliance: N/A

SUMMARY: On March 19, 2007 the MPWMD Board reviewed, expressed general support for, and provided comments on the current draft Memorandum of Understanding (MOU) to form the Monterey Bay Regional Water Solutions Leadership Task Force (Task Force). The derivation and intent of the MOU, as well as the proposed function of the Task Force, are described below. MPWMD Board member comments received on March 19 are reflected in the “redline” version of the current draft MOU (Exhibit 25-A). Included in the current Strategic Plan the Board adopted last month is an objective to present the Task Force MOU for Board consideration by not later than June 30. District staff has been advised that many, but not all, of the effected local agency governing boards have reviewed or approved the current draft MOU (Exhibit 25-B). Thus, in order to facilitate further progress on forming the Task Force, staff believes that limited authority should be delegated for executing a final MOU that reflects the District Board’s March 19 comments, and possible changes requested by other jurisdictions, including the suggested $5,000 minimum contribution from each entity for technical analysis work required by the Task Force, as described below.

RECOMMENDATION: It is recommended that the District Board: 1) consider approval of the Monterey Bay Regional Water Solutions Leadership Task Force MOU that reflects the changes requested by the Board on March 19, 2007, including a $5,000 contribution for technical engineering analysis required by the Task Force (Exhibit 25-A); and 2) authorize the General Manager to execute the final version of the Task Force MOU, which may include minor or non-substantive changes requested by other jurisdictions, following review as to acceptable form and legality by the General Counsel.

BACKGROUND: The most recent inter-governmental discussion related to creation of this proposed Task Force occurred in a February 21, 2007 meeting of chairpersons (or their designees) of water agency governing boards and city councils. They met to discuss the current draft Task Force MOU that was prepared by a working group of senior managers from those entities. The draft MOU proposes an inter-agency committee structure, comprised of a governing board representative from each signatory entity, which would be charged with developing a regional strategy for resolving water supply and water quality problems on the Monterey Peninsula and North County, including the northern Salinas Valley. Nearly all of the effected entities were represented in the February 21 meeting by a governing board chair or member, including Directors Pendergrass and Potter who co-convened and led the meeting in their capacity as chairs of the MPWMD Board and County Board of Supervisors, respectively.  The February 21 meeting outcome was as follows:

1) A broad consensus among board and council representatives was apparent to consider forming a Regional Water Solutions Task Force comprised of local policy-makers, for the reasons described in the draft MOU.

2) The draft MOU was requested to be agendized for presentation and discussion by all effected councils and boards.

3) Members of the managers working group were requested to solicit feedback from their respective governing board on the draft MOU.  This feedback should include a response to the suggestion made by several participants in the February 21 meeting that a $5,000 requested (but not required) contribution be made by each signatory entity, in order to defray the cost of analytical expertise the Task Force may need to develop a regional water supply strategy.  This amount would cover any potential technical resource needs, in addition to the Task Force facilitation service and economic analysis offered by the Division of Ratepayer Advocates (DRA) of the California Public Utilities Commission, plus in-kind assistance provided by participating agencies.  At the present time, such resource needs have not been identified, but the managers group intends to consult with DRA on the question.

4) The council/board leadership group indicated its intent to meet again to review feedback on the draft MOU, preferably around April 15, but not later than May 30.  The meeting purpose would be to finalize the proposed MOU that would be submitted to the governing boards of all interested entities for formal consideration.

The following paragraphs summarize prior activities related to the derivation and development of the Task Force concept.

On April 19, 2005 the County Board of Supervisors received a report from General Manager, Curtis Weeks of its Water Resources Agency regarding efforts over the previous 16 months to collaborate with cities and water agencies on a regional approach to solving water supply and water quality needs in the coastal area of North County. The Board directed that Mr. Weeks continue to work with the senior managers of those entities to develop a proposed regional governance structure to achieve that objective. On February 22, 2006 the MPWMD Board held a workshop to review and discuss the regional water governance proposal. (The following is a link to the staff report for that workshop on the District’s website: http://www.mpwmd.dst.ca.us/asd/board/boardpacket/2006/20060222/022206agenda.htm.)

Elected and appointed leaders of effected city councils and water agency governing boards met on April 10, 2006 to review various governance proposals drafted by the mangers working group. Each of these proposals was intended to create a comprehensive, coordinated regional strategy for addressing: 1) the Monterey Peninsula’s long-standing water resource deficiency, and 2) water supply and water quality problems impacting North County and the northern Salinas Valley, including the city of Salinas. The governance concepts developed by the managers group were discussed in that April 10 meeting, including a proposal that the county, each of the cities, water and wastewater agencies from these two coastal areas of Monterey County, and other interested public entities, consider creating an inter-agency water supply planning committee. The committee would be comprised of policy makers from these entities, supported by their management and technical staffs, and have the charge described above. Policy leaders in the April 10 meeting expressed a consensus that solving the water supply/quality dilemma remains a high priority, and warrants a regional approach. The managers group was asked to further refine a draft Memorandum of Understanding (MOU) that could be considered by interested local agencies to form such an inter-agency policy advisory committee; identify the funding resources this committee would need to conduct technical analyses of various augmentation projects that have been proposed to address the water supply and water quality problems within the region; and re-convene the leadership group to review the final draft MOU.

Since last April 10, the senior managers working group has met several times to obtain further information on various water supply projects proposed within the region, in order to help gauge the level of analytical work and strategy facilitation support that the inter-agency policy advisory committee would require, and how to secure resources for that support. In the course of that effort, a team of officials and consultants from the California Public Utilities Commission (CPUC) engaged the managers group on the status of efforts within the county to address the water supply problem on a regional level. This CPUC team is charged with preparing an environmental impact report (EIR) in order for the CPUC to consider the Coastal Water Project (Project) submitted by California American Water (CAW), as well as alternatives state law requires be studied in the EIR. The Project application consists of a desalination facility co-located on the Moss Landing energy plant site, with a proposed maximum yield basically only intended to satisfy the state’s 1995 order to replace 70% of the water the company pumps from the Carmel River.

Late last year, a separate and independent arm of the CPUC, the Division of Ratepayers Advocates (DRA), approached the managers group regarding its proposal to engage Monterey Peninsula and north Monterey County water districts, municipalities and other effected local agencies in a series of meetings, the purpose of which would be to assist DRA in its analysis of a possible regional alternative to CAW’s proposed Project. DRA anticipates that the outcome of its proposed meetings would be a regional strategy that integrates water supply and water management program alternatives, which potentially would have greater benefit to CAW ratepayers and other entities outside the Monterey Peninsula, than would the proposed Coastal Water Project. (Further information on the DRA proposal can be found on the web at the following link: www.mpwmd.dst.ca.us/asd/board/boardpacket/2007/20070125/item17.htm).

The managers concluded that DRA’s proposal appeared to be fully consistent with the April 10, 2006 leadership group consensus that water supply and water quality problems facing the Monterey Peninsula and north County are best addressed regionally. Because it proposes to facilitate this major regional planning effort, the DRA proposal offers an opportunity to leverage limited local agency staff and resources available for technical analysis of various Project alternatives. DRA is seeking a commitment from all local agencies and others with a direct interest in water supply/quality needs in the region to participate in this year-long effort. The DRA has held its first two meetings on January 31 and February 28, 2007 to review organizational matters, water supply needs and initial discussion of opportunities and issues associated with the CWP and other project solutions that have been proposed. In light of the DRA’s proposal, the managers group has revised the draft MOU that proposes to form a Regional Water Supply Solutions Task Force. The draft MOU contemplates that this Task Force, comprised of a governing board member from local districts/agencies and cities that approve it, would be directly involved in the DRA regional water supply alternative analysis described above. The draft MOU also presumes that each participating entity would provide management and technical support needed for the DRA-led alternatives analysis. The senior managers believe that the draft MOU should be considered by water district/agency governing boards and city councils as soon as possible, given that the DRA process already has begun.

IMPACT TO DISTRICT STAFF/RESOURCES: The anticipated, direct financial impact of approving this Task Force MOU is the $5,000 contribution to technical analysis described above. This amount is not included as a line item in the District’s 2007-08 proposed budget. However, staff could either charge it to the contingency account included in the proposed budget; or the Board could appropriate this amount from the general operating reserve amount shown in the proposed budget. Because of its anticipated parallel connection to the DRA regional water supply dialogue activities that are already well underway, in which District staff is fully engaged, no significant increase in workload is anticipated as the result of Task Force MOU approval.

EXHIBITS

25-A Monterey Bay Regional Water Solutions Leadership Task Force Memorandum of Understanding (draft version 4, with MPWMD Board redline comments)

25-B Summary Table of Status of Task Force MOU Consideration by other Local Agencies

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