July 11, 2011

Project No. 06-0027

Monterey Peninsula Water Management District
Post Office Box 85
Monterey, California 93942-0085

Attention: Mr. Joe Oliver

Subject: Task and Budget Recommendations for the Completion of Interim Facilities at the ASR-3 / Seaside Middle School ASR Facility

Dear Joe:

As you know, the District and California American Water Company (CAW) are pursuing the activation of the ASR-3 well at Seaside Middle School (aka Fitch School) by October 20^th 2011 to both comply with the recent Cease and Desist order issued to CAW, and to ensure the facility is operable as soon as the State Water Resources Control Board permit to divert and store Carmel River waters is enabled ( potentially as early as December 1, 2011).

Several task items for this project have already been accomplished, or have already been authorized and are in progress. These items include the following:

1. CAW acquisition of property from MPUSD (Completed June 2011)

2. Construction of ASR-3 well (Completed October 2010)

3. Design and construction of intertie piping to CAW distribution system (Construction by CAW expected in mid-July)

4. Installation of 600 Hp well pump and well head piping ( Work already authorized and under existing contracts by MPWMD; scheduled for August - September).

There are, however, several items that still require budget authorization and acquisition now to ensure completion of the work in time for the upcoming injection season. These items and their associated costs are as follows:

1. Installation of PG&E service equipment and intertie to PG&E grid ($50,000 est.)

2. Purchase of electrical metering, switchgear, and cabling for well pump ($72,400 firm quotes)

3. Installation of purchased electrical equipment and site security fencing at the site ($50,000 est.)

Subtotal of above items: $172,400.

In addition to the above-totaled estimate of $172,400, we recommend a budget contingency of 15% or $25,860 be added for unanticipated issues, resulting in a total budget request of $198,260.00.

It should be noted that although these costs are higher than planned for temporary facilities, the equipment and design are for permanent facilities, thus minimizing one-time or wasted expenses. The “disposable” portion of this work represents less than 5% of the total costs.

Time will be of the essence to complete these items before the injection season begins. We recommend that your Board authorize the recommended budget, and authorize District Staff to contract for the purchase of these materials and services with the stipulation that bids received fall within the above-estimated costs for the work, and are based on competitive bids from qualified and responsible contractors and vendors.

We hope this letter adequately details the final work items necessary to activate the ASR-3 facility. If you require additional information regarding this or other matters, please contact us.

Sincerely,

Pueblo Water Resources, Inc.

Stephen P. Tanner, P.E.

Principal Engineer

RCM:SPT