EXHIBIT 1-A
DRAFT MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District May 19, 2008
The meeting was called to order at 7:05 PM in the District Conference Room.	CALL TO ORDER/ROLL CALL
Directors Present: Judi Lehman, Chair – Division 2 Kristi Markey, Vice Chair -- Division 3 Alvin Edwards – Division 1 Regina Doyle – Division 4 Bob Brower – Division 5 David Pendergrass – Mayoral Representative David Potter – Monterey County Board of Supervisors Directors Absent: None General Manager present: Darby Fuerst District Counsel present: David C. Laredo
The assembly recited the Pledge of Allegiance.	PLEDGE OF ALLEGIANCE
The following comments were directed to the Board. (1) Dr. Douglas Green, a resident in the Highway 68 corridor, stated that the District had not provided adequate notice to property owners about the first reading of Ordinance No. 134. He alleged that the District had intentionally planned to discourage public comment on the ordinance. (2) Roy Thomas, Carmel River Steelhead Association, reported that CAW was operating the Garzas Creek Well in violation of an agreement mandating that operation cease under certain circumstances. He also urged the District to take measures to eliminate wasteful outdoor water use. (3) Hershel Herod began to address the Board regarding the first reading of Ordinance No. 134, but cut-short his comments so that he could speak during the public hearing on the ordinance.	ORAL COMMUNICATIONS
On a motion by Director Pendergrass and second by Director Edwards, the Consent Calendar was adopted unanimously on a vote of 7 – 0.	CONSENT CALENDAR
Approved.	1.	Consider Approval of Minutes from March 27, 2008 Special Meeting/Board Workshop and April 21, 2008 Regular Board Meeting
Approved.	2.	Consider Adoption of Resolution of Intention to Approve an Amendment to the District’s Public Employees Retirement System Contract Providing One-Year Final Compensation
Approved.	3.	Consider Authorization of Funds to Purchase Orthophotography Within the District Boundary
Approved.	4.	Consider Expenditure of Budgeted Funds to Paint Exterior of 5 Harris Court, Building G
Approved.	5.	Consider Approval of 3rd Quarter FY 2007-08 Investment Report
Approved.	6.	Consider Adoption of Treasurer's Report for March 2008
	PRESENTATIONS
Chair Lehman announced the names of the Community Advisory Committee Members and presented certificates to those who were present: Paul Bruno, Robert Greenwood, and Roy Thomas.	7.	Present Certificates of Appreciation to Community Advisory Committee Members
Henrietta Stern, Project Manager, presented the report. An outline of the presentation is on file at the District office and can be viewed at the District’s website. Director Potter reported that within two weeks time, a Memorandum of Understanding (MOU) should be introduced as a simple and less complicated replacement for the Monterey Bay Regional Water Solutions Leadership Task Force MOU.	8.	Water Supply Project Alternatives Update
	GENERAL MANAGER’S REPORT
Darby Fuerst, General Manager, presented the report. An outline of the presentation is on file at the District office and can be viewed at the District’s website. Mr. Fuerst reported that for the period of October 1, 2007 through May 15, 2008, CAW production from the Carmel River was 104 acre-feet under the production limit established as a result of SWRCB Order 95-10. During the same time period, production from the Coastal Subareas of the Seaside Basin was 293 acre-feet under the production limit established as a result of the Seaside Groundwater Basin Adjudication. Production from the Laguna Seca Subarea through April 30 was 97 acre-feet over the production limit. The adjudication decision allows CAW to combine its production from all subareas within the Seaside Groundwater Basin. Consequently, CAW’s production from all subareas within the Seaside Groundwater Basin through April 30 was 16 acre-feet under the adjudication limit. In response to questions from the Board, General Manager Fuerst stated that the District would investigate the report that CAW was operating the Garzas Creek Well. He noted that CAW had previously advised the District that pumping from that well had ceased. During the public comment period on this item, Dr. Douglas Green addressed the Board. Dr. Green asked why the production limit for the Laguna Seca Subarea had been set so low. Mr. Fuerst explained that CAW’s limit from the Laguna Seca Subarea was set by the court as part of the Seaside Basin adjudication.	9.	Status Report on California American Water Compliance with State Water Resources Control Board Order 95-10 and Seaside Groundwater Basin Adjudication Decision
	ATTORNEY’S REPORT
District Counsel Laredo reported that during the closed session he provided status reports on all items and received general direction. No reportable action was taken.	10.	Report on 5:30 PM Closed Session of the Board
		3.	Conference with Legal Counsel – Existing Litigation (Gov. Code 54945.9 (a))
		A.	Application of California American Water Company to the Public Utilities Commission Application No. 04-09-019 – Coastal Water Project
		B.	Application of California American Water Company to the California Public Utilities Commission -- Application No. 07-02-023 -- Allowance for Funds Used During Construction (AFUDC) for its San Clemente Dam Memorandum Account
		C.	Application of California-American Water Company to California Public Utilities Commission for a Special Conservation Program and Design Modifications Rate in its Monterey District (Application No. 07-12-010) – Conservation Program Application
		D.	Application of California -American Water Company to California Public Utilities Commission for Authorization to Increase Revenues for Water Service in its Monterey District in the years 2009; 2010; and 2011 (Application No. 08-01-027) – General Rate Case
		E.	Application of California-American Water Company to Authorize Support Services for its Monterey District to the California Public Utilities Commission (Application No. 08-01-024 ) – General Office Case
		F.	Application of California American Water to the California Public Utilities Commission to Authorize Costs for the Long-Term Water Supply to be Transferred to a Balancing Account and a Requirement for Annual Review of that Account (Application No. 08-04-019).
		G.	Application of California-American Water Company to the California Public utilities Commission for an Authorized Cost of Capital for Utility Operations for 2009 (Application No. 08-05-003)
		H.	State Water Resources Control Board Draft Cease and Desist Order WR 2008-00XX-DWR
		I.	MPWMD v. Nick Marotta, Jr., Gerda Marotta, and Does 1-100 -- Monterey County Superior Court Case No. M83498
		J.	MPWMD v. Roy Woods, Woods 1995 Trust, and Does 1-100 -- Monterey County Superior Court Case No. M83499
		4.	Conference with Legal Counsel – Threatened Litigation (Gov. Code 54956.9(b)) Sierra Club v California American Water (16 U.S.C §1538)
	DIRECTORS’ REPORTS (INCLUDING AB 1234 REPORTS ON TRIPS, CONFERENCE ATTENDANCE AND MEETINGS)
Director Brower reported that he participated in several sessions at the May 6 through May 9, 2008 conference of the Association of California Water Agencies (ACWA). He noted that there are 19 seawater desalination projects under consideration along the California coast. Mr. Brower reported that he appeared on the Mark Carbonero and Our Town television programs and spoke about water conservation. Regina Doyle reported that she also attended the May ACWA Conference. She hoped that the District would share with other agencies knowledge gained about water conservation.	11.	Oral Report on Activities of County, Cities, Other Agencies/Committees/ Associations
	PUBLIC HEARINGS
Director Markey offered a motion that was seconded by Director Potter to continue the first reading of Ordinance No. 134. The ordinance could be bifurcated so that in June the Board would address amendments to the Expanded Water Conservation and Standby Rationing Plan; and at a future meeting the Board could consider another ordinance that would address the issue of California American Water’s unaccounted for water use. Director Markey offered an amended motion, requesting that Ordinance No. 134 be bifurcated and the two new ordinances brought forward for Board consideration in July or August 2008. One ordinance would address amendments to the Expanded Water Conservation and Standby Rationing Plan. The second ordinance would address the issue of incorporating the Inland Area of the Seaside Basin into the Monterey Peninsula Water Resource System. The unaccounted for water use goal would remain unchanged, until the Board conducts a separate discussion on whether or not it should be adjusted. The amended motion was accepted by Director Potter, and adopted unanimously on a vote of 7 – 0.	12.	Consider First Reading of Ordinance No. 134 -- Amend Regulation XV, Expanded Water Conservation and Standby Rationing Plan and Subject the Inland Area of the Seaside Basin to the Conservation and Rationing Regulations
No comments were directed to the Board on this item.		A.		Consider Setting New Goal for California American Water (CAW) Unaccounted For System Losses
The following comments were received during the Public Hearing on this item: (1) Geoffrey de Sibert, President of the York Hills Homeowners Association, stated that the proposal to expand the Monterey Peninsula Water Resource System (MPWRS) is egregious and unjustified, and that homeowners in the affected area were not given adequate advance notice about the first reading of Ordinance No. 134. (2) Mark Trevallio member of the Board of Directors of the Bay Ridge Homeowners Association and resident of Hidden Hills, said the Association had reduced water use over time. They had been advised in the past that if water use remained below 229 acre-feet each year, rationing would be avoided. He requested that the District work with Hidden Hills residents to find a way to avoid the need to adopt Ordinance No. 134. (3) Ken Holbrook, president of Pasadera Homeowners Association, stated that news of this proposed ordinance was very disturbing. He chided the District for not providing homeowners with sufficient, advance notice of the hearing on Ordinance No. 134. (4) Russ Hatch addressed the Board. He represented a number of homeowner associations that were served by Carmel Valley Mutual Water Company before it was purchased by CAW. He stated that at the time of purchase, CAW agreed that Carmel Valley Mutual customers would be considered a separate entity from CAW’s main system that received water from the MPWRS. He asked why that agreement was not being followed. He requested that the first reading be deferred to a future date, to allow time to study the issues. (5) Hershel Herod, former President of the Laguna Seca Ranch Estates No. 2 Homeowners Association before CAW purchased the Bishop Water Company. He noted that at the time of purchase, the Board had approved the sale agreement. He requested that the Board take the sale agreement into consideration when deliberating Ordinance No. 134. (6) Hans Pfeifer, President of Halcyon Hills Homeowners Association in Hidden Hills, said that when he purchased property in that area in 2002, he was assured that a special agreement existed that exempted the region from water restrictions. He requested that the Board refer this issue to a committee and work with Hidden Hills homeowners to analyze the reason and justification for including the area into the MPWRS. (7) Rebecca Tagg, representing Halcyon Heights Homeowners Association, requested that the first reading of Ordinance No. 134 be delayed until the cause for the proposed action could be investigated further. (8) Steven Block, President of Hidden Hills Homeowners Association, requested that action on Ordinance No. 134 be delayed until homeowners could analyze the justification for proposing that Hidden Hills be incorporated into the MPWRS. (9) Jerry Grady, President of Mesa Hills West Mutual Homeowners Association, stated that he advised CAW that his water meter was operating incorrectly but the problem has not been addressed. He requested a continuance of Ordinance No. 134 to allow time for property owners, CAW and the District to resolve the disagreement on this proposal. (10) Paul Bruno a resident of the Highway 68 corridor, agreed with previous speakers about the lack of notice regarding the proposed ordinance. He said that the Seaside Groundwater Basin Adjudication allows an exemption to water reductions, if the coastal level of the aquifer rises above sea level. He agreed that additional time is needed to study the issues before the Board takes action on Ordinance No. 134. (11) Carl Outzen, who lives on York Road and is a former Monterey City Councilmember, surmised that CAW provided its Ryan Ranch Unit with water from its Bishop Unit wells, which misrepresents the actual water use within the former Bishop Ranch service area. (12) Lloyd Lowrey, of Noland, Hamerly Etienne and Hoss, representing many property owners within the Laguna Seca Subarea addressed the Board. He requested a continuance of the first reading of Ordinance No. 134 in order to give property owners in affected areas time to understand the implications of the proposed ordinance, and to explain their concerns to the District.		B.		First Reading of Ordinance No. 134
At 9 PM the meeting was recessed and then reconvened at 9:10 PM.
	13.	Consider Second Reading and Adoption of Ordinance No. 133 -- Amend the Process for the Administrative Enforcement of District Rules and Regulations
On a motion by Director Edwards and second of Director Markey, Ordinance No. 133 was adopted unanimously on a roll-call vote of 7 – 0 with the following amendment: (1) the words “Any hearing officer who is skipped shall serve at the next earliest opportunity” shall be added at the end of Rule 112.5 A.		A.		Adopt Second Reading of Ordinance No. 133
On a motion by Director Markey and second of Director Doyle, Resolution 2008-06 was adopted unanimously on a vote of 7 – 0. No public comment was directed to the Board on this item.		B.		Adopt Resolution 2008-06 – Establishing Rule 113.1, Schedule of Fines
	ACTION ITEMS
On a motion by Director Brower and second of Director Pendergrass, the Water Supply Forecast was received and confirmed unanimously on a vote of 7 – 0. No comments were directed to the Board during the public comment period on this item.	14.	Receive and Confirm Water Supply Forecast for Period of May 1, 2008 -- September 30, 2009
On a motion by Director Pendergrass and second of Director Edwards, the Annual Memorandum of Agreement was adopted unanimously on a vote of 7- 0. No comments were directed to the Board during the public comment period on this item.	15.	Consider Approval of Annual Memorandum of Agreement for Releases and Diversions from San Clemente Reservoir between California American Water (CAW), California Department of Fish and Game (CDFG), and MPWMD
Prior to the discussion of Item 16, Director Potter excused himself from the meeting.
Director Pendergrass offered a motion to adopt the resolution with the following changes: (1) the third Whereas should be amended to read “District’s programs have successfully reduced water use (conservation), and adverse environmental consequences”; and (2) the fourth Whereas should be amended to read “Desist Order need to be realistic, and not jeopardize public health…” The motion was adopted on a vote of 6 – 0. Directors Brower, Doyle, Edwards, Lehman, Markey and Pendergrass voted in favor of the motion. Director Potter was absent for the vote. No comments were directed to the Board during the public comment period on this item.	16.	Consider Adoption of Position Statement on the January 15, 2008 Draft Cease and Desist Order Issued by the State Water Resources Control Board, Division of Water Rights
Director Brower made a motion that staff should proceed to gather information from a minimum of three banks regarding a $2 Million Line of Credit. The motion was seconded by Director Edwards and adopted on a vote of 6 – 0. Directors Brower, Doyle, Edwards, Lehman, Markey and Pendergrass voted in favor of the motion. Director Potter was absent for the vote. No comments were directed to the Board during the public comment period on this item.	17.	Consider Request of Director Brower to Secure a $2 Million Line of Credit to Fund Development of Water Supply Projects
There was no discussion of the Informational Items/Staff Reports.	INFORMATIONAL ITEMS/STAFF REPORTS
	27.	Letters Received
	28.	Committee Reports
	29.	Strategic Plan Update
	30.	Carmel River Fishery Report
	31.	Water Conservation Program Report
	32.	Monthly Allocation Report
	33.	Monthly California American Water Production Report
	34.	Monthly Water Supply Status Report
The meeting was adjourned at 9:50 PM.	ADJOURNMENT

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Darby Fuerst, Secretary to the Board

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