EXHIBIT 1-A

DRAFT MINUTES

Special Meeting

Board of Directors

Monterey Peninsula Water Management District

February 18, 2009

CALL TO ORDER/ROLL CALL

The meeting was called to order at 8:30 AM in the MPWMD Conference Room.

Directors Present:

Kristi Markey, Chair -- Division 3

Regina Doyle, Vice Chair – Division 4

Alvin Edwards – Division 1

Judi Lehman – Division 2

Bob Brower – Division 5

David Pendergrass – Mayoral Representative

Directors Absent: None

General Manager present: Darby Fuerst

District Counsel present: David C. Laredo

District Special Counsel present: Fran Farina

Parties to the Proceeding that were Present:

1. Fran Farina, MPWMD Prosecution Team Leader

2. Tim Miller, California American Water, Primary Spokesperson for California American Water (CAW). Assisting Mr. Miller was Lori Girard, Corporate Counsel

3. Sheri Damon, representing Wilson Street Investors and Ryan Court Investors

4. David Sweigert, representing Community Hospital of the Monterey Peninsula

PLEDGE OF ALLEGIANCE

The assembly recited the Pledge of Allegiance.

ORAL COMMUNICATIONS

No comments from the public.

PUBLIC HEARING

1. Continued Hearing on Apparent Insufficient Physical Supplies to Serve Ryan Ranch Water Distribution System and Determination as to Whether, and to What Extent, System Capacity and/or Expansion Capacity Limits Should be Modified

The Directors reported ex parte communications as follows. Brower – spoke with Sheri Damon. Markey – spoke with Sheri Damon. Pendergrass – spoke with Sheri Damon.

District Counsel Laredo advised the Board that the parties to the proceeding had met per direction of the Board at the 1/21/09 hearing, but had not been successful in reaching a settlement. Mr. Laredo referred to a letter dated February 16, 2009 from Jan Driscoll, representing Muller-Ryan LLC stating that Stephanie Mathis would appear as a party to the hearing on behalf of Muller/Ryan LLC and make a statement. Mr. Laredo advised the Board that they must determine if the letter would be received as a policy statement, or an exhibit, and also determine if Muller/Ryan LLC would be considered a party to the hearing. Mr. Laredo explained that there have been requests that the parties be allowed to submit post-hearing briefs on legal issues raised during the proceedings. It that were allowed, there has been a request that simultaneous opening briefs, and subsequent reply briefs be filed. He noted that no deliberations would occur at the February 18, 2009 hearing; instead, the Board would deliberate after the briefing schedule is complete. Mr. Laredo announced that Tim Miller, representing California American Water, would continue cross-examination of witnesses. In addition, District staff was prepared to respond to questions that were posed by the Board at the January 21, 2009 hearing. Mr. Laredo asked the Board to decide which item should be heard first, the cross examination or responses to questions from District staff.

On the request of Chair Markey, Stephanie Mathis spoke on behalf of Muller/Ryan LLC. She requested that Muller/Ryan LLC be considered a party to the proceeding, and that the February 16, 2009 letter be included in the record of the hearing. She stated that Muller/Ryan LLC would neither cross examine, nor call any witnesses. Chair Markey directed that the February 16, 2009 letter be submitted into the record as a policy statement. There was no objection from Ms. Farina, Ms. Damon, Mr. Miller or Mr. Sweigert.

Mr. Miller requested that he cross examine witnesses after District staff had responded to questions asked by the Board of Directors at the January 21, 2009 hearing.

Darby Fuerst, General Manager of the MPWMD made a statement that responded to questions asked by the Board of Directors at the January 21, 2009 hearing.

Mr. Miller cross examined Mr. Fuerst. The other parties had no questions for Mr. Fuerst.

Ms. Farina asked questions of Mr. Oliver. Mr. Miller also cross examined Mr. Oliver. The parties chose to move several documents into the record as evidence.

The meeting was recessed at 9:55 AM and reconvened at 10:05 AM.

Chuck Della Sala, Mayor of the City of Monterey, read a letter dated February 18, 2009 that was submitted as a policy statement into the record of the meeting.

Mr. Miller cross examined Craig Anthony, General Manager of California American Water.

Dr. Steven Packer, Chief Executive Officer of Community Hospital of the Monterey Peninsula (CHOMP) requested to address the Board. There were no objections from the parties. Dr. Packer read a statement and responded to questions from Mr. Sweigert, Mr. Miller, Ms. Farina and Ms. Damon and members of the Board of Directors.

Stephanie Pintar, MPWMD Water Demand Manager, responded to a question from the Board of Directors. The other parties had no questions for Ms. Pintar.

Mr. Miller continued cross examination of Mr. Anthony. The Board of Directors also asked additional questions of Mr. Anthony, as did Ms. Farina and Ms. Damon.

The meeting was recessed at 12:30 PM and reconvened at 1:35 PM.

Mr. Miller continued to question Mr. Anthony, as did the Directors and Ms. Damon. Several documents were moved into evidence and incorporated into the record.

Ms. Farina called John T. Kilpatrick, P.E. as a witness. Mr. Miller objected because there was no valid, written order requiring Mr. Kilpatrick to appear, therefore CAW would not produce him as a witness. Mr. Kilpatrick was present at the hearing; he advised the Board that he would not testify. Mr. Miller requested that the record reflect that Mr. Kilpatrick would not testify on advice of counsel.

Mr. Farina requested that Allen Stroh, Assistant Director of the Monterey County Health Department, and Director of Environmental Health, issue a policy statement. No objections were raised by the parties to the hearing.

Mr. Stroh addressed the Board. He recalled that since 2002 when he became Director of Environmental Health, there have been discussions regarding the overdrafting of the Laguna Seca Subbasin and issues regarding the Ryan Ranch and Bishop water distribution systems. He stated that in 2006, his office issued a compliance order to CAW. A response letter was received from CAW with a study prepared by Martin Feeney, which indicated that CAW would take measures to address the compliance order. Therefore the Health Department put their enforcement efforts in abeyance. He expressed concern about comments made by Craig Anthony at the February 18, 2009 meeting, that there was no need for CAW to drill new wells or take other actions mentioned in the Feeney report because no problem existed in the Ryan Ranch system, and they could continue to provide water to Ryan Ranch from other sources when necessary. Mr. Stroh stated that in his opinion, the long-term water supply in the Ryan Ranch area is not secure. His office does have the authority to declare a public health emergency and take actions that would prevent any activity that would further erode the water situation in the Ryan Ranch system. Mr. Stroh noted that his office would like to see a long-term solution to the water supply situation at Ryan Ranch. He said that after hearing testimony from CAW, he was prepared to move ahead with enforcement action against the water company.

Members of the Board of Directors asked questions of Mr. Stroh.

Chair Markey asked the Board if the hearing should be continued to a future date, so that Mr. Kilpatrick could be subpoenaed to appear and respond to questions. Following comments by Mr. Miller and Mr. Laredo, Ms. Farina opined that it was not necessary to hear from Mr. Kilpatrick.

Chair Markey closed the hearing. She announced that opening briefs were due from all parties by 5 PM on March 18, 2009 and reply briefs must be submitted by April 1, 2009. The parties should comment on process, the substance of the decision, and submit findings that support their position. Chair Markey requested that opening briefs be limited to 25 pages and reply briefs be limited to 15 pages. Findings submitted as attachments would not be counted against the page limit. Parties that need to submit additional pages should contact Mr. Laredo, who would contact all parties if the request were granted. The Board will set a special meeting in April 2009 for final deliberations. The date should be set at a Board meeting in March.

Director Potter requested that two questions be responded to at the next meeting. (1) Clarify the section from the Ryan Ranch annexation agreement which states that the CAW’s water allocation cannot be modified. (2) There was mention of an allocation that exists on Fort Ord. Could that water be used in the Ryan Ranch area?

The meeting was adjourned at 2:50 PM.

_______________________________

Darby Fuerst, Secretary to the Board

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