EXHIBIT 1-B
DRAFT MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District November 17, 2008
The meeting was called to order at 7:05 PM in the District Conference Room.	CALL TO ORDER/ROLL CALL
Directors Present: Alvin Edwards – Division 1 Judi Lehman, Chair – Division 2 Kristi Markey, Vice Chair -- Division 3 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
No public comment was directed to the Board during Oral Communications.	ORAL COMMUNICATIONS
On a motion by Director Markey and second by Director Edwards, the Consent Calendar items were approved unanimously, on a unanimous vote of 7 to 0.	CONSENT CALENDAR
Approved.	1.	Consider Adoption of Minutes of the October 20, 2008 Regular Board Meeting and the October 29, 2008 Special Joint Meeting of the MPWMD and Monterey Regional Water Pollution Control Agency Boards of Directors
Approved.	2.	Consider Expenditure of Funds for Emergency Winterization of the Sleepy Hollow Steelhead Rearing Facility to Withstand Winter Storm Sediment Load from the Basin Complex Fire
Approved.	3.	Consider Expenditure of Budgeted Funds to Amend Contract with Pueblo Water Resources for 2008-09 Phase 1 Aquifer Storage and Recovery Project Technical Support

Approved.	4.	Consider Approval of Water Resources Engineer Reclassification and Change to the District’s Organization Chart
	PRESENTATIONS
General Manager Fuerst read the names of employees that had completed 5, 10, 15 and 20 years of service with the District in 2006, 2007 and 2008. The Directors expressed appreciation to the employees and extended a round of applause to them.	5.	Recognize MPWMD Employees for Length of Service to the District
Henrietta Stern, Project Manager, presented the report. An outline of Ms. Stern’s presentation is on file at the District office and can be viewed at the District’s website. In response to a question from Director Doyle, District Counsel Laredo estimated that the State Water Resources Control Board might be ready to conduct a public hearing on its forthcoming decision on the Draft Cease and Desist Order against California American Water (CAW) by February or March 2009.	6.	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, 2008 through November 12, 2008, CAW production from the Carmel River was 24 acre-feet under the production limit of 1,157 acre-feet established as a result of State Water Resources Control Board (SWRCB) Order 95-10. During the same time period, production from the Seaside Basin was 90 acre-feet under the production limit of 653 acre-feet established in the Seaside Groundwater Basin Adjudication decision. Director Edwards requested that in future reports, production from the Inland and Coastal Subareas of the Seaside Basin be listed separately.	7.	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 he provided an update to the Board on items A through E, and status reports on items F, G and H. The Board voted to appoint Darby Fuerst as lead negotiator for labor negotiations as listed under item 4. Directors Brower, Doyle, Edwards, Lehman, Markey and Pendergrass voted in favor, and Director Potter was absent. In addition, the Board conferred on labor negotiations as listed under item 5, and discussed the General Manager’s performance under item 6.	8.	Report on 5:30 PM Closed Session of the Board
		3.	Conference with Legal Counsel – Existing Litigation (Gov. Code 54945.9 (a))

			B.		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
			C.		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
			D.		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
			E.		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).
			F.		State Water Resources Control Board Draft Cease and Desist Order WR 2008-00XX-DWR
			G.		MPWMD v. Nick Marotta, Jr., Gerda Marotta, and Does 1-100 -- Monterey County Superior Court Case No. M83498
			H.		MPWMD v. Roy Woods, Woods 1995 Trust, and Does 1-100 -- Monterey County Superior Court Case No. M83499
			4.	Appoint General Manager, Darby Fuerst, as Labor Negotiator (Gov. Code §54957.6)
			5.		Conference with Labor Negotiators (Gov. Code §54957.6)
			A.		Agency Designated Representatives: Rick Dickhaut, Cynthia Schmidlin, Darby Fuerst
					Employee Organization: General Staff and Management Bargaining Units Represented by United Public Employees of California/LIUNA, Local 792
					Unrepresented Employees: Confidential Unit
			6.		Public Employees Performance Evaluation (Gov. Code 54957) – General Manager
	DIRECTORS’ REPORTS (INCLUDING AB 1234 REPORTS ON TRIPS, CONFERENCE ATTENDANCE AND MEETINGS)
Director Brower reported that he and Director Doyle attended the November 10 through 12, 2008 California Water Association conference in Monterey. Director Lehman reported that she participated in a tour of the CAW Coastal Water Project pilot desalination plant in Moss Landing that was attended by other members of the public. Director Pendergrass also participated on the tour as a representative of Sand City. Director Lehman also noted that she attended the October 13, 2008 meeting at the District office that was held to respond to questions from the public on draft Ordinance No. 137.	9.	Oral Report on Activities of County, Cities, Other Agencies/Committees/ Associations
	PUBLIC HEARINGS
On a motion by Director Markey and second of Director Edwards, the first reading of Ordinance No. 137 was approved on a vote of 6 – 1. Directors Doyle, Edwards, Lehman, Markey, Pendergrass and Potter voted in favor of the motion. Director Brower was opposed. The following comments were received during the public hearing on this item. (1) Dave Stephenson, Director of Rates Regulation for CAW, responded to an inquiry from the Board. He stated that development of Ordinance No. 137 was a cooperative effort to ensure that implementation of conservation and rationing programs would be a coordinated effort between the District and CAW. He recommended that the Board approve the first reading of Ordinance No. 137. (2) Lloyd Lowrey, representing the Hidden Hills Sub Unit Ratepayers Association. He presented a list of questions and requested a response prior to Board action that evening. The list of questions is on file at the District office and can be viewed on the District’s website. (3) Sheri Damon, representing the Pasadera Homeowners Association, expressed agreement with comments made by Lloyd Lowrey. She cited a concern that water production records from the Seaside Inland Subarea, would not account for water distributed to areas outside the District. (4) Nelson Vega asked the Board to be aware that landlords of multi-family dwellings which are not separately metered could be responsible for water waste fines during stages 4 through 7 of the proposed conservation and rationing regulations. He asked the Board to consider how those costs could be passed on to the tenants. (5) Glen Stransky, President of the Los Laureles Homeowners Association, asked if the Seaside Groundwater Adjudication Decision, or the Draft Cease and Desist Order water production reductions were to be enforced, would that result in implementation of a higher stage of the conservation and rationing program, and increased water rates. (6) Dave Stephenson, Director of Rates Regulation for CAW, explained that water rates would only be increased if water consumption exceeded triggers specified by the Public Utilities Commission rate program.	10.	Consider First Reading of Ordinance No. 137 -- Amend Regulation XV, Expanded Water Conservation and Standby Rationing Plan
A motion was offered by Director Markey and seconded by Director Potter, to continue this item to the January 29, 2008 Board meeting so that the public would have additional time to research the issues. An amendment was offered by Director Brower and accepted by Directors Markey and Potter, that the applicant must provide written proof from the County of Monterey acknowledging its approval of the water conservation technologies proposed to be incorporated into the Ecoresort. The amended motion was approved on a unanimous vote of 7 – 0. The following comments were directed to the Board during the public hearing on this item. (1) Ed Ghandour of Security National Guaranty, Inc, stated that the water conservation technologies proposed for the project will limit water use at the site to 63 acre-feet per year. He noted that the EIR on the project has been distributed to regulatory agencies and was made available to the public beyond what is required by law, in an effort to increase public awareness of the project’s benefits. (2) Paul Kephart of Rana Creek Restoration Ecology, representing Security National Guaranty, Inc., described the Ecoresort project to the Board. A summary of his comments is on file at the District office and can be viewed on the District’s website. He stated that 70 percent of stormwater from green roofs on the site will be captured, treated, stored and reused at the resort. Wastewater from the resort will also be treated and reused on site. (3) Todd Norgard, representing the Carmel Valley Association, expressed concern that historic periodic industrial water use at the site was to be allocated to a year-round use with associated water quality and public health requirements. (4) Steve Shimek, representing Monterey Coastkeeper, urged the Board to deny the amendment to the CAW water distribution system, or to continue the item to the January 29, 2008 Board meeting. He also requested that Director Pendergrass excuse himself from voting on the issue due to a conflict of interest. (5) George Riley, representing Citizens for Public Water, requested that Director Pendergrass excuse himself from voting on the issue due to a perceived conflict of interest. (6) Allison Ford, representing the Sea Otter Project, requested that the Board deny the amendment to the CAW water distribution system, or continue the item to the January 29, 2008 Board meeting. (7) Ken Holbrook, representing the Pasadera Homeowners Association, asked how 90 acre-feet of water could be allocated to the project, when water reductions have been mandated in the Seaside Groundwater Basin. (8) Kathy Anderson spoke in support of the Ecoresort project and urged the Board to cooperate with the developers.	11.	Consider Application to Amend California American Water Distribution System to Serve Monterey Bay Shores Ecoresort in Sand City; California American Water and Security National Guaranty, Co-Applicants; MPWMD Application #20080915MBS-L4; APN# 011-501-014
Director Markey offered a motion which was seconded by Director Edwards, that the Board acknowledge that a majority protest to reauthorize the water use fee was not received. The motion was adopted on a unanimous vote of 7 – 0. No comments were directed to the Board during the public hearing on this item.	12.	Public Hearing for Proposed Re-Authorization of Water Use Fee to Fund Aquifer Storage and Recovery Facilities and Related Water Supply Projects
On a motion by Director Brower, and second of Director Pendergrass, the first reading of Ordinance No. 138 was approved by a unanimous roll-call vote of 7 – 0. Craig Anthony, General Manager of CAW’s Monterey Division, addressed the Board during the public hearing on this item. He spoke in support of the ordinance and stated that if ASR is not developed, overall water consumption goals will not be met.	13.	Consider First Reading of Ordinance No. 138 to Re-Authorize a Water User Fee to Fund Aquifer Storage and Recovery Facilities and Related Water Supply Projects
	ACTION ITEMS
This item was continued to a future, unspecified Board meeting date.	14.	Investigation into Development of Alternative Water Sources
		A.		Consider Approval of Proposed Strategy for Investigation into Development of Regulations Allowing Alternative Water Sources: Recycling and Reuse of Greywater; Rainwater Harvesting and Storage; and Stormwater Storage and Reuse
		B.		Presentation from Terry Black of BRAC Systems Regarding Greywater Technology for Flushing Toilets and Underground Irrigation

Director Lehman offered a motion that was seconded by Director Potter, to appoint Directors Brower, Doyle and Edwards to the committee, and designate Director Markey as an alternate. In addition, the committee should report back to the Board of Directors at the January 29, 2009 meeting. The motion was adopted on a unanimous vote of 7 – 0. No comments were directed to the Board during the public comment period on this item.	15.	Consider Formation of an Ad Hoc Committee to Develop a Memorandum of Understanding Between the MPWMD and Monterey Regional Water Pollution Control Agency (MRWPCA) Regarding Roles and Responsibilities Related to Water Supply Planning in the Monterey Peninsula Area
There was no discussion of the Informational Items/Staff Reports.	INFORMATIONAL ITEMS/STAFF REPORTS
	16.	Letters Received
	17.	Committee Reports
	18.	Strategic Plan Update
	19.	Carmel River Fishery Report for September 2008
	20.	Water Conservation Program Report
	21.	Monthly Allocation Report
	22.	Monthly California American Water Production Report
	23.	Monthly Water Supply Status Report
The meeting was adjourned at 9:55 PM.	ADJOURNMENT

___________________________________

Darby Fuerst, Secretary to the Board

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