EXHIBIT 1-A
DRAFT MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District July 20, 2009
The meeting was called to order at 7:05 PM in the District Conference Room.	CALL TO ORDER/ROLL CALL
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 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 received during Oral Communications. (1) George Riley requested that the District undertake a recalculation of the future water needs estimates submitted by the jurisdictions and cited in the Draft EIR on the Coastal Water Project. (2) Gary Koifman suggested that an alternative to constructing one desalination plant in Moss Landing would be to dock refurbished, antique ships in Monterey Harbor that would serve as floating desalination plants. They could also house health resorts that offer saltwater therapy. Revenue from the resorts would fund construction of the desalination facilities.	ORAL COMMUNICATIONS
On a motion by Director Pendergrass and second by Director Lehman, the Consent Calendar was approved unanimously on a vote of 7 – 0.	CONSENT CALENDAR
Approved.	1.	Consider Adoption of Minutes of the June 15, 2009 Regular Board Meeting
Approved.	2.	Consider Adoption of Memorandums of Understanding Between the Monterey Peninsula Water Management District and the General and Management Staff Bargaining Units

Approved.	3.	Consider Adoption of Revised Charge to the Ad Hoc Legislative Advocacy Committee and Confirm the Appointment of Alternates to the Committee
Approved.	4.	Consider Authorization of Staff to Proceed with Filing an Application for a Department of Water Resources Construction Loan to Fund the Aquifer Storage and Recovery Project Expansion
Approved.	5.	Consider Expenditure of Budgeted Funds to Contract with DHDettman to Provide Advice on Emergency Repairs for the Sleepy Hollow Steelhead Rearing Facility, and Other Facility Support Tasks
Approved.	6.	Consider Expenditure of Budgeted Funds for Amendment to Database Programming Contract to Accommodate Changes for Ordinance No. 139 Implementation and Functionality Improvements
Approved.	7.	Authorize Expenditure of Budgeted Funds to Contract with Spot Water Management to Conduct Certified Landscape Irrigation Auditor Training
Approved.	8.	Consider Expenditure of Funds to Contract with RMC to Fund Continuation of the Ongoing Water for Monterey County Coalition Meetings
Approved.	9.	Consider Adoption of Treasurer's Report for May 2009
	PRESENTATIONS
Mr. Anthony reported the following. (1) Well No. 2 in the Bishop Water Distribution System was recently refurbished. By combining production from active wells in both the Bishop and Ryan Ranch systems, sufficient water could be produced to meet firm capacity at Ryan Ranch. In order to achieve this production level, Cal-Am still needs authorization from the District to connect a new distribution line to the Bishop system. (2) Cal-Am installed 4,000 acoustic listening devices on water meters; however, approximately 20 percent of them malfunctioned. In response, the 4,000 devices will be replaced beginning in August. (3) Mr. Anthony will be meeting with David Goff to review results of the study he prepared on Cal-Am’s unaccounted for system losses, and discuss the efforts Cal-Am has made to replace faulty water meters. (4) Cal-Am has replaced three Carmel Valley wells, which has increased pumping capacity from the lower Carmel Valley by 3,000 gallons per minute. Presently, wells in the mid and upper Carmel Valley have been shut down, which is in keeping with Cal-Am’s ultimate goal to cease all pumping from the Carmel River. (5) Test production at the Sand City desalination plant has begun, with a goal of producing 300 acre-feet per year. (6) Cal-Am has not completed construction of infrastructure needed to achieve 3,000 gallons per minute of production from the Aquifer Storage and Recovery Project. Progress has been delayed due to a disagreement with the City of Del Rey Oaks over the need to install a one-quarter mile length of new transmission pipe beneath a street in Del Rey Oaks.	10.	Monthly Report from California American Water General Manager, Craig Anthony
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.	11.	Water Supply Project Alternatives Update
Stephanie Pintar, Water Demand Manager, presented the report. An outline of Ms. Pintar’s report is on file at the District office and can be viewed at the District’s website.	12.	Water Conservation Program Report
	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 July 15, 2009, Cal-Am production from the Carmel River Basin was 552 acre-feet under the production target of 8,335 acre-feet established as a result of State Water Resources Control Board (SWRCB) Order 95-10. Production from the Coastal Subareas of the Seaside Basin was 587 acre-feet under the production target of 2,357 acre-feet established by the Seaside Groundwater Basin Adjudication. Production from the Laguna Seca Subarea was 175 acre-feet over the production target of 190 acre-feet established by the Seaside Groundwater Basin Adjudication. Therefore, total Cal-Am production from the Seaside Basin was 412 AF under the adjudication target of 2,547 AF.	13.	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
Mr. Laredo stated that he provided a status report on items 3.A through 3.G, no reportable action was taken. The Board also discussed item 4, no reportable action was taken.	14.	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 for an Order Authorizing a Special Conservation Program and Modifications to its Rate Design in its Monterey District, and Authorization to Increase its Rates for Water Service in its Monterey District – Conservation Program (Applications No. 07-12-010, 08-02-018)
		C.	Application of California –American Water Company for Authorization to Increase its Revenues for Water Service in its Monterey District in years 2009; 2010; and 2011 General Rate Case (Application No. 08-01-027)
		D.	SWRCB Cease and Desist Order WR 2008-00XX-DWR
		E.	Seaside v. California American Water (MBSE/Cal-Am Motion) (Appellate Court #HO34335; Superior Court Case No. M 66343)
		F.	Sierra Club, Carmel River Steelhead Association v. California American Water, Gary Locke, Department Of Commerce, Dr. Jane Lubchenko (NOAA), and Rodney McInnis (NMFS), (U.S. District Court, Northern District. Case No. 09 2870)
		G.	California American Water v. MPWMD (SWRCB/SNG) (Superior Court Case No. M 99622)
		4.	Conference with Labor Negotiators (Gov. Code §54957.6)
			Agency Designated Representative: Darby Fuerst
			Unrepresented Employees: Confidential Unit
	DIRECTORS’ REPORTS (INCLUDING AB 1234 REPORTS ON TRIPS, CONFERENCE ATTENDANCE AND MEETINGS)
Director Brower reported that he and Director Markey participated in the July 9, 2009 joint meeting of the Monterey Regional Water Pollution Control Agency Board of Directors and the Ad Hoc Water Committee regarding development of agreements associated with planning a regional water supply project. Director Brower noted that he attended the July 13, 2009 Public Participation Hearings conducted by the California Public Utilities Commission on the Coastal Water Project. Director Lehman reported that she attended all four sessions conducted on July 13 and 14. Ms. Lehman expressed support for revising estimates of the jurisdictions’ future water needs. Director Doyle agreed. She asked if District staff could develop a theory on why water consumption in the District has been reduced. Is it attributed to the economic turndown? And if so, will water use increase again as the economy improves?	15.	Oral Report on Activities of County, Cities, Other Agencies/Committees/ Associations
	PUBLIC HEARINGS
Motion 1 -- Director Brower offered a motion, that was seconded by Director Potter, to receive water permit applications for projects within the Hidden Hills area served by Cal-Am that were submitted to Monterey County for processing or have been assigned a PLN number on or before March 20, 2009. Only applications for projects that require a water permit, or setting a new meter for that project, will be accepted. Applications for lot-line adjustments and subdivisions would not be received by the District. In addition, the General Manager’s decision that California-American Water is in violation of Rule 40-D will remain in effect until the General Manager has determined, with credible expert analysis, that the system can and will remain in compliance. Motion 2 -- Director Pendergrass offered a substitute motion that District staff should receive water permit applications for projects within the Hidden Hills area served by Cal-Am through August 1, 2009. In addition, the District should negotiate with Cal-Am on resolving the alleged violation. There was no second to the motion. Motion 1 was adopted unanimously on a vote of 7 – 0. Chair Markey requested that the Water Demand Committee discuss the possibility of future action regarding modifications to Rule 40-D.	16.	Consider Appeals of General Manager’s March 20, 2009 Decision Regarding Hidden Hills Unit of California American Water Distribution System – Notice of Violation of District Rule 40-D and Suspension of Receipt of Applications For New or Intensified Water Use
Appeal denied with additional direction that if the project had been submitted to Monterey County on or before March 20, 2009, the water permit application will be processed. Refer to Motion 1. During the public hearing on this item, Gary Wiegand expressed disagreement with implementation of a water permit moratorium in the Hidden Hills area. He proposed that the Pro Rata Expansion Capacity (PREC) in the Hidden Hills area should be raised, and a corresponding reduction be made to the Bishop Water Company PREC. He requested that the option to adjust the PREC be incorporated into the Hidden Hills PREC Solutions Matrix.		A.		Gary E. Wiegand
Appeal denied with additional direction that if the project had been submitted to Monterey County on or before March 20, 2009, the water permit will be processed. Refer to Motion 1. During the public hearing on this item, Doug Meador addressed the Board. He agreed with comments made by previous speakers. He requested that the Board allow his project to move forward. He suggested that if the water permit moratorium were to continue, District staffing levels should be decreased due to a reduction in workload.		B.		James Douglas Meador and LuAnn Meador
Appeal denied with additional direction. Refer to Motion 1. The request to accept applications for projects that were in process with Monterey County was approved. The General Manager’s decision that California-American Water is in violation of Rule 40-D will remain in effect until the General Manager has determined, with credible expert analysis, that the system can and will remain in compliance. The following comments were directed to the Board during the public hearing on this item. (1) Craig Anthony referred to Exhibit 16-C of the staff report, a letter from Cal-Am dated July 14, 2009. He also submitted three charts for Board review: Monterey Main System Production January 2008 through December 2009; Monterey Main System Consumption January 2008 through June 2009; Hidden Hills 1818 Consumption January 2008 through June 2009; and Hidden Hills Production January 2008 through June 2009. The charts are on file at the District office and can be viewed on the District’s website. He recommended that all pending water permit applications be approved; and that the District accept quarterly reports from Cal-Am on efforts to bring the Hidden Hills water distribution system into compliance. (2) Gary Koifman, resident of Bay Ridge, submitted a letter dated July 20, 2009, requesting that the District accept his application for an appeal of the policy suspending receipt of applications for new or intensified water use. (3) Paul Bruno, resident of Monterey, urged the Board to rescind the moratorium on receipt of water permit applications, or allow processing of applications for projects that are considered in process. (4) Roger Williams, resident of Hidden Hills, requested that the Board lift the water permit moratorium in Hidden Hills and adjust the PREC. He recommended that the adjustment be accomplished by reducing the amount of water available to the Bishop system and increasing supply to the Hidden Hills area. (5) Russ Hatch, former manager of the Carmel Valley Mutual Water Company, agreed with the concept of equalizing the PREC between the Hidden Hills area and the Bishop Water Company that serves Pasadera. He stated that the District should have increased production for the Hidden Hills area as new subdivisions were being approved.		C.		California American Water
At 9:30 PM the meeting recessed and reconvened at 9:40 PM
	ACTION ITEMS
Staff was directed to submit the proposed rules to the Policy and Technical Advisory Committees for review before the Board conducts first reading. No comments were directed to the Board during the public comment period on this item.	17.	Provide Direction to Staff Regarding Water Credits Associated with Mandatory District Conservation Requirements Resulting from Proposed Updates to Regulation XIV, Water Conservation
Director Markey offered a motion that was seconded by Director Brower to: (1) approve Resolution No. 2009-10 amending Table 4 of Rule 25.5; (2) applicants that have obtained a permit to install half-gallon per flush toilets may replace them with high-efficiency toilets, or modify their water permits to install high-efficiency toilets; (3) replacement of the half-gallon per flush toilets, or modification of a water permit will trigger a deed restriction amendment, and the applicant must pay the fees associated with that change; and (4) the applicant will not be required to undertake additional conservation savings to off-set the change in water use capacity. Director Lehman offered an amendment that was approved by Directors Markey and Brower, that District staff be encouraged to review the efficiency of other approved low-water use technologies, and determine if any evidence exists that would prompt reconsideration of their use within the District. The amended motion was approved on a vote of 6 – 1. Directors Markey, Brower, Lehman, Doyle, Pendergrass and Potter voted in favor of the motion. Director Edwards was opposed. Don Goodhugh addressed the Board during the public comment period. He asked the Board to modify the rules so that his water permit could be finalized, and construction of his new home could commence.	18.	Provide Policy Direction to Staff on Water Permits Utilizing Half-Gallon Per Flush Toilets
Approved. Refer to motion shown above.		A.		Approve Resolution No. 2009-10 Amending Table 4 of Rule 25.5:  Ultra-Low Consumption Appliance Credits
Refer to direction provided in the motion shown above.		B.		Provide Direction Regarding Compliance with Water Permit Conditions Requiring Half-Gallon Per Flush Toilets
There was no discussion of the Informational Items/Staff Reports.	INFORMATIONAL ITEMS/STAFF REPORTS
	19.	Letters Received
	20.	Committee Reports
	21.	Carmel River Fishery Report for May 2009
	22.	Water Conservation Program Report
	23.	Monthly Allocation Report
	24.	Monthly California American Water Production Report
	25.	Monthly Water Supply Status Report
	26.	Quarterly Water Supply Project Status Report
	27.	Quarterly Irrigation Program and Riparian Projects Report
	28.	Quarterly Carmel River Erosion Protection and Restoration Projects Report
	29.	Quarterly Water Use Credit Transfer Status Report
The meeting was adjourned at 10:15 PM.	ADJOURNMENT

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Darby Fuerst, Secretary to the Board

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