ITEM:		GENERAL MANAGER’S REPORT
10.	UPDATE ON DEVELOPMENT OF WATER SUPPLY PROJECTS
Meeting Date:			December 12, 2011	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			David J. Stoldt	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: The District has adopted a leadership position in the community with respect to water supply planning. Specifically, it has adopted five water supply projects that it believes are sufficient to meet the impending Supply Gap beginning in 2017 as a result of legally imposed reductions in water production from the Carmel River and Seaside Basin. Furthermore, the District has previously endorsed the Regional Desalination Project which remains a potential solution to the Peninsula’s water needs, but is presently in mediation among the project proponents. Finally, the District continues to weigh and consider additional water supply concepts, in addition to its adopted projects and the Regional project, as they arise.

This report identifies activities related to water supply projects in the past month.

DISCUSSION:

The Water Supply Planning Committee met on November 22^nd and recommended to the Board a Letter of Introduction to Naval Support Activity, Monterey which is included in this packet as Item 7.

Regional Desalination Project O&M Committee

Two meetings were held to discuss governance of the Regional Desalination Project should it move forward, both on November 29^th. One was attended primarily by the cities, Cal Am, and the County, and the other was attended primarily by the District, MRWPCA, FORA, Hospitality representatives, Cal Am, and the County. The series of meetings to discuss formation of an Operations and Maintenance Committee (“OMC”) for the Regional Project were temporarily suspended in favor of the Regional Project proponents further clarifying their proposal for a governance and oversight committee.

District staff will continue to participate in this discussion and report to the Board.

District Water Projects 1-5

Implementation timelines and work requirements for Water Projects 2-5 were discussed at the November 22, 2011 Water Supply Planning Committee meeting and appear as Exhibit 10-A in this packet. This portfolio of District projects will continue to be developed as an alternative should the Regional Project not move forward, as well as to be available if and when needed for future supply needs beyond the Regional Project. Due to the User Fee situation and budget constraints, implementation items that can be performed internally will be pursued, but major tasks that require expenditure of funds will be discussed and prioritized during District budget discussions in the Spring.

New Form of Governance for Alternative Water Supply Projects

At its November 28, 2011 Board meeting, the MRWPCA discussed alternate governance structures, including a JPA, for delivery of alternate water supply projects to the Regional Project, or as a substitute governance structure for a revised form of the Regional Project, should it move forward.

The discussion was initiated at the MRWPCA October 11, 2011 meeting and was fostered by a November 7, 2011 letter from the Mayors Association to the MRWPCA requesting further investigation. At the November 28, 2011 meeting, the MRWPCA Board directed a letter of response be sent to the Mayors Association. All such correspondence and MRWPCA Board materials are attached as Exhibit 10-B.

The District and its General Manager have not formally been requested to engage in such discussions with the Mayors Association or the MRWPCA. However, the GM has had informal discussion with both entities.

The Mayors Association met to discuss this matter on Friday, December 2, 2011 in a meeting the District did not attend. However, just prior to that meeting, the GM did address the Mayors and several of the City managers, stating, (a) the District should be included in their discussion, (b) the District has been discussing governance informally with the MRWPCA GM, the city managers, and the CPUC DRA, and (c) if needed, the District would exert its rights over any potable water supply developed within its boundaries.

As of the writing of this staff note there is nothing to report on the outcome of that meeting. The GM will provide an oral update, if available.

Other

Chairman Brower and the General Manager met with Rob MacLean of Cal Am on November 22^nd and discussed (a) the in-holding for Sleepy Hollow in conjunction with the San Clemente Dam decommissioning, (b) Los Padres Dam transition and study needs, (c) data sharing, (d) the regional Desalination Project, and (e) User Fee proceedings at the CPUC.

A report was made to the Water Supply Planning Committee on properties relating to pipeline right-of-way through the Monterra Ranch subdivision. The Committee directed the General Manager to continue with further evaluation of this project.

EXHIBITS

10-A Implementation Plans for Water Projects 2-5.

10-B MRWPCA Board meeting materials from the November 28, 2011 MRWPCA Board Meeting

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