EXHIBIT 20-G

MONTEREY PENINSULA WATER MANAGEMENT DISTRICT

DRAFT -- 10/9/07

FINDINGS of APPROVAL

CONSIDER APPLICATION TO AMEND

CALIFORNIA AMERICAN WATER DISTRIBUTION SYSTEM AND ANNEX PARCEL APN 011-501-014

Application #20070829CAW, Permit #M07-03-L4

Adopted by MPWMD Board on October __, 2007

Unless noted otherwise, all cited documents and materials are available for review at the MPWMD Office, 5 Harris Court, Building G, Monterey (Ryan Ranch).

It is hereby found and determined as follows:

1. FINDING: California American Water (CAW), an investor-owned public utility regulated by the California Public Utilities Commission (CPUC) is the primary water purveyor for the Monterey Peninsula, including all parcels within the City of Sand City except for parcel APN 011-501-014. CAW owns and operates independent water distribution units known as the Bishop, Hidden Hills and Ryan Ranch systems, which are independent of and do not benefit from this application. CAW’s “main system” serves nearly 40,000 customers and derives its source of supply from the Carmel River and Seaside Groundwater Basins. As described in MPWMD Application #20070803SAN, the City of Sand City (City) proposes to create the Sand City Water Supply Project Water Distribution System (SCWDS) to provide CAW with 300 acre-feet per year (AFY) of treated potable water from a reverse osmosis desalination plant. Fresh water from the desalination plant will be conveyed through an 8-inch pipeline and directly enter the CAW system at a 14-inch main at Roberts and Olympia Avenues in Seaside. A 15-year Lease Agreement between the City and CAW is nearing approval by the parties. Environmental review in compliance with California Environmental Quality Act (CEQA) has been performed by the City for this project proposal.

All of the 300 AFY produced by the desalination plant will eventually be used within the City boundary to facilitate new construction and redevelopment projects in compliance with the City’s approved General Plan. A separate MPWMD Water Entitlement Ordinance is the anticipated vehicle to ensure 206 AFY for new or intensified CAW service to parcels within Sand City; the 206 AFY represents the difference between the 300 AFY desalination plant production and 94 AF of CAW water consumption in the City in Water Year 2006. Until the full 300 AFY production is used within the City, CAW has access to potable water to help reduce water extractions from the Carmel River and Seaside Basins to meet existing community water needs. The Sand City Water Supply Project is also referred to herein as the “Desalination Project” or “Project.”

EVIDENCE: Application #20070829CAW; Application #20070803SAN, including all technical attachments, including environmental and engineering documents. Draft Environmental Impact Report (EIR) for Sand City Water Supply Project, SCH #2004041133 dated June 2004; Final EIR for Sand City Water Supply Project dated December 2004; Addendum to Final EIR/Cal-Am Interconnection dated September 2007. Draft CAW-City Lease Agreement (undated) provided on October 9, 2007. All Sand City documents are also available at the Sand City offices.

2. FINDING: The CAW application entails annexation of parcel APN 011-501-014 into the CAW system as it is the only parcel within the City that is not within the CAW system. Permit conditions for the CAW application and SCWDS prohibit CAW service to this parcel until the desalination project is fully operational.

EVIDENCE: Permit applications as specified in Finding #1; map of CAW service area; MPWMD Permit #M07-02-L4, Conditions of Approval #3, 28 and 29; MPWMD Permit #M07-03-L4, Conditions of Approval #3, 28 and 29.

3. FINDING: No new CAW facilities will be constructed as the result of service by the SCWDS and its single master connection to the CAW system.

EVIDENCE: Permit application information specified in Finding #1.

4. FINDING: Applicant has applied to MPWMD for a permit to amend the CAW Water Distribution System (WDS) as described in Finding #1.

EVIDENCE: Permit application information specified in Finding #1.

5. FINDING: Based on District staff analysis of the engineering, hydrogeologic and environmental data prepared by the City, CAW is permitted to receive an additional 300 AFY from the SCWDS. Until the Desalination Project is fully operational, there shall be no change to current production limits affecting the CAW system or water allocations from that system. Once the Project is completed, an additional 206 AFY of water entitlements to parcels within the City will be allowed, pursuant to MPWMD WDS Permit #M07-02-L4.

EVIDENCE: Permit materials specified in Finding #1; MPWMD Permit #M07-02-L4 and M07-03-L4, Conditions of Approval.

6. FINDING: The application to amend the CAW WDS, along with supporting materials, is in accordance with District Rules 21 and 22.

EVIDENCE: Permit applications as specified in Finding #1.

Required Findings (MPWMD Rule 22-B)

7. FINDING: The approval of the permit would not cause unnecessary duplication of water service with any existing system. The applicant is CAW, the primary water purveyor on the Monterey Peninsula, which serves 95% of customers. Water from the SCWDS would function as an additional source of supply to be integrated into the CAW system, and is exempt from the one-for-one requirement imposed by State Water Resources Control Board (SWRCB) Order WR 95-10. The SCWDS would help reduce CAW diversions from the Carmel River and Seaside Groundwater Basins in the near-term as CAW develops a replacement source of supply. [Rule 22-B-1]

EVIDENCE: Map of CAW service area; SWRCB Order 95-10; letter from SWRCB to City dated January 31, 2006.

8. FINDING: The approval of the permit would not result in water importation or exportation to or from the District, respectively. [Rule 22-B-2]

EVIDENCE: The referenced service area is located wholly within the MPWMD as shown on District boundary location maps.

9. FINDING: Approval of the application would not result in significant adverse impacts to “Sensitive Environmental Receptors (SER)” as defined by MPWMD Rule 11, including the Seaside Groundwater Basin. Site-specific hydrogeologic evaluations have demonstrated that proposed pumping of extraction wells and use of discharge injection wells associated with the Desalination Project are not expected to have significant impacts on SERs or neighboring wells. [Rule 22-B-3]

EVIDENCE: Hydrogeologic Assessment and environmental review documents specified in Finding #1.

10. FINDING: The City has demonstrated the right to deliver potable water to customers from its Desalination Project; this source of supply is also exempt from the one-for-one replacement rule imposed on CAW by SWRCB Order 95-10. [Rule 22-B-4]

EVIDENCE: Permit Application materials specified in Finding #1, including Superior Court Final Decision on Seaside Basin Adjudication, Case M66343, March 27, 2006. SWRCB Order 95-10; letter from SWRCB to City dated January 31, 2006.

11. FINDING: The application demonstrates existence of a long-term reliable source of water supply for the proposed use of up to 300 AFY for delivery into the CAW system; the Desalination Plant includes redundant facilities to ensure reliability. [Rule 22-B-5]

EVIDENCE: Hydrogeologic assessment and engineering analyses included in permit application materials specified in Finding #1.

12. FINDING: The source of supply for CAW is treated fresh water from the City’s Desalination Project. The Project’s source of supply is brackish water in the ancient sand dunes comprising the Aromas Sands Formation. The cumulative effects of issuance of SCWDS and CAW WDS permits would not be expected to result in significant adverse impacts to the source of supply or the species and habitats dependent on the source of supply. [Rule 22-B-6]

EVIDENCE: Hydrogeologic Assessment and environmental review documents specified in Finding #1.

13. FINDING: The source of supply to CAW (i.e., the City’s Desalination Project) is not derived from the Carmel Valley Alluvial Aquifer or the Monterey Peninsula Water Resource System. The source of supply is not within the jurisdiction of the SWRCB, and has not been determined to be tributary to the source of supply for any other system. The City has been granted water rights to the source of supply (brackish water) for its Desalination Project by the Superior Court. [Rule 22-B-7]

EVIDENCE: MPWMD map showing boundaries of project site and jurisdiction of SWRCB superimposed on Monterey County parcels; Hydrogeologic Assessment and environmental review documents specified in Finding #1; Superior Court Final Decision on Seaside Basin Adjudication, Case M66343, March 27, 2006.

14. FINDING: MPWMD Permits #M07-02-L4 and #M07-03-L4 allow a permanent intertie to the CAW system from the SCWDS. Intensification of use of CAW water facilitated by the SCWDS for new connections and remodels will be limited to parcels within the City as specified by the permit Conditions of Approval and a separate Water Entitlement Ordinance creating MPWMD Rule 23.6 and amending Rules 11, 21 and 23.1. Parcels within the City already have access to CAW service pursuant to existing MPWMD Rules and Regulations. Fire-flow is already provided by CAW to properties within its service area. [Rule 22-B-8]

EVIDENCE: Map of CAW service area available at District office; MPWMD Permits # M07-02-L4 and #M07-03-L4, Conditions of Approval #3, 13, 28 and 29; MPWMD Rules and Regulations.

15. FINDING: The City and CAW have developed engineering and water quality requirements to prevent contamination of the CAW system, which must be in place for the City to deliver water to CAW. [Rule 22-B-9]

EVIDENCE: Map of CAW service area; MPWMD Permit # M07-02-L4, Condition of Approval #14; project description in FEIR Addendum, September 2007.

Minimum Standards for Granting a Permit (MPWMD Rule 22-C)

16. FINDING: The application adequately identifies the responsible parties as the owner listed in Finding #1. This application does not require recordation of notices on the title of the property due to the unique application and integrated water system. [Rule 22-C-1]

EVIDENCE: Permit application as specified in Finding #1. MPWMD Permit #M07-03-L4, Condition of Approval #22.

17. FINDING: The SCWDS and CAW will meet the water quality requirements to comply with California Title 22 water quality standards as administered by County and State health authorities. [Rule 22-C-2]

EVIDENCE: Permit application materials as specified in Finding #1. MPWMD Permit #M07-02-L4, Conditions of Approval #6, 15 and 17; California Administrative Code, Title 22.

18. FINDING: The application identifies the location of the source of supply for the water distribution system as a pipeline from the SCWDS. [Rule 22-C-3]

EVIDENCE: Permit application as specified in Finding #1, including location map. MPWMD Permit #M07-02-L4, Conditions of Approval #4 and 5.

19. FINDING: The approval of the application would not create an overdraft or increase an existing overdraft of a groundwater basin unless a valid superior right is proven. No overdraft has been declared for the brackish Aromas Sands Formation. The Superior Court determined that the City shall have the right to produce brackish water from this Formation to operate its proposed desalination project “so long as such Production does not cause a Material Injury.” [Rule 22-C-4]

EVIDENCE: Final Decision of Monterey County Superior Court on Seaside Basin Adjudication, Case M66343, March 27, 2006.

20. FINDING: The approval of the application would not adversely affect the ability of existing systems to provide water to users due to conditions of approval by MPWMD and other entities, based on certified environmental review documents. The Superior Court determined that the City shall have the right to produce brackish water from the Aromas Sands Formation to operate its proposed desalination project “so long as such Production does not cause a Material Injury.” Proof of such an injury is the responsibility of the complaining Party [Rule 22-C-5]

EVIDENCE: Environmental review materials in application as specified in Finding #1; Final Decision of Monterey County Superior Court on Seaside Basin Adjudication, Case M66343, March 27, 2006.

Compliance with California Environmental Quality Act (CEQA)

21. FINDING: In the review of this application, MPWMD has followed those guidelines adopted by the State of California and published in the California Administrative Code, Title 14, Section 15000 et seq. Specifically, the MPWMD, as a Responsible Agency under CEQA for this action, has complied with Guidelines Section 15096. The MPWMD, as a Responsible Agency for this project, has considered the Notice of Determination filed by the City of Sand City on September 19, 2007, City Resolution SC 07-84 adopting the Addendum to the Final EIR for the Project, and all environmental documents associated with the project. Copies of the Draft and Final EIR and the Addendum to the Final EIR have been provided to MPWMD Board members for review prior to the public hearing on this matter. The MPWMD Board has reviewed the environmental information and relied on the information as part of its decision-making on this matter.

EVIDENCE: CEQA and CEQA Guidelines, Section 15096. MPWMD Notice of Determination for Approval of Applications to Create SCWDS and Amend CAW WDS, dated October ___, 2007. [pending Board action]

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Prepared by H. Stern, 10/9/07