Governance Committee for the Monterey Peninsula Water Supply Project
California American Water Ÿ Monterey County Board of Supervisors Monterey Peninsula Regional Water Authority Ÿ Monterey Peninsula Water Management District EXHIBIT 23-B
FINAL MINUTES Regular Meeting Governance Committee for the Monterey Peninsula Water Supply Project March 31, 2014
Call to Order:		The meeting was called to order at 1:30 pm in the conference room of the Monterey Peninsula Water Management District offices.
Members Present:		Jeanne Byrne, representing Monterey Peninsula Water Management District (alternate to Robert S. Brower, Sr.) Jason Burnett, Chair, representing Monterey Peninsula Regional Water Authority (JPA) David Potter, representing Monterey County Board of Supervisors Robert MacLean, representing California American Water (Cal Am)
Members Absent:		Robert S. Brower, Sr., Vice Chair, representing Monterey Peninsula Water Management District
Pledge of Allegiance:		The assembly recited the Pledge of Allegiance.
Public Comments:		No comments were directed to the committee.
Agenda Items
The Chair received public comment on each agenda item.
Presentations
1.	Report from California-American Water on Bore Hole Investigations, Test Well Schedule and Overall Project Schedule
	The report was given by Ian Crooks, Engineering Manager/Coastal Division for Cal-Am. A summary of his presentation can be viewed on the Governance Committee website. Crooks reported that Cal-Am drilled eleven boreholes, one is under construction at the Cemex site, and the last is still to be drilled is at a parking lot on Monterey Dunes Way owned by California State Parks. A total of 13 bore holes will have been constructed in seven months. Results are that the Cemex site would provide good production and water quality. The Potrero Road site also produced favorable results. The Moss Landing sites would be unfavorable. A test slant well could be installed at the Cemex site; however, Cal-Am will request that the permit be modified so that the well site could be moved behind the 60/40 erosion line. Crooks reviewed
	the project schedule which anticipates that test well construction will begin in November 2014. He advised that the California Coastal Commission has not made a commitment to conduct the test well permit hearing on the Monterey Peninsula. According the project schedule, desalination plant construction could begin in 2016, and should be completed by 2018. Public Comment: (1) Michael Warburton representing the Public Trust Alliance, stated that the Monterey Bay Marine Sanctuary may be concerned about brine disposal from the project. MacLean responded that test well water will not be desalinated, so brine is not an issue. Warburton asked if the project time-line included planning for another water supply alternative, and if a formal determination had been made that no other alternatives should be considered. MacLean stated that 17 settling parties have agreed to the proposed project, and Cal-Am is moving ahead with the assumption that the California Public Utilities Commission (CPUC) will issue a permit for the project. Warburton also asked if sharing of water between agricultural interests and Peninsula water users had been considered. (2) David Lithland noted that the life of beach wells is 20 to 30 years, and the term for bond financing is 30 years. He asked if geologic information collected on the bore holes would be placed on water supply project website. He also asked if the test well would be sealed after testing is done. Crooks responded that geologic data will be placed on the project website, and that if the test well proves to be successful, it will be used for the water supply project. Lithland asked why Cal-Am does not advise the CPUC that open water intake is an acceptable option. (3) Tom Rowley, representing the Monterey Peninsula Taxpayers Association, noted that the time-line presented by Crooks listed 2014 as the date for a decision on Groundwater Replenishment, but it is shown under the 2015 heading. Burnett confirmed that the will be corrected to reflect the 2015 date. Rowley also stated that the project Environmental Impact Report (EIR) may be challenged if test well data is not available to show that slant wells would be a successful option for the project. (4) Larry Hampson, Engineer, Monterey Peninsula Water Management District, asked for clarification as to why the project time-line lists approval of the EIR and CPUC issuance of a project permit are concurrent with collection of test well data. Burnett responded that the EIR team judged that preliminary data and modeling results are sufficient for the EIR, and that actual test data will not be included in the EIR. Crooks stated that Cal-Am will use the test will data to verify the groundwater model and designs prior to construction of the desal project. (5) Jim Cullum, Executive Director of the JPA, opined that the project schedule is overly optimistic. He suggested that the schedule be identified as an “optimistic” plan, and that Cal-Am should specify on the schedule impacts of any delay that could be caused by the EIR process or the CPUC.
Action Items
2.	Develop Process for Procurement of Consultant to Conduct Value Engineering Analysis of CDM Desalination Project Design The committee members discussed the issue and then received public comment.
	Michael Warburton addressed the committee on this item during the public comment period. He stated that the key value engineering decision is whether the preferred technology is desalination or another water production technology. There is an obligation to make sharing of agricultural and urban water resources a reality. If the decision is made after design is 60% complete, it will be too late to make a decision on the best use of fresh water sources. Burnett offered a motion that was seconded by Potter, to request that the Water Authority and or the Water Management District lead on procurement of the value engineer. The process would be: the two agencies would develop a draft RFP or RFQ; bring that to the Governance Committee for consideration; receive input on that RFP or RFQ; distribute the final document; and bring back a recommendation on the preferred value engineer. The Governance Committee would be authorized to make that final selection. The Water Authority or the Water Management District would enter into a contract with the value engineer for running the value engineering process and would also seek and be provided reimbursement from California American Water. The motion was adopted unanimously on a vote of Byrne, Potter and Burnett. MacLean also expressed support for the motion.
3.	Receive Report from Cal-Am on Contingency Source Water Intake Locations and Develop Recommendation on Future Action regarding Source Water Intakes
	Crooks’ presentation can be viewed on the Governance Committee website. He provided information on development of a contingency intake well at Potrero Road. He requested that the committee consider authorizing Cal-Am to spend additional funds to apply for a permit to drill a test contingency intake well, in case the test well at the Cemex site prove not to be the best location. Cal-Am could develop an updated time-line and cost estimates for committee review at its next meeting. The committee discussed the item and received public comment. Public Comment: (1) Tom Rowley spoke in support of open water intake as a contingency should slant wells prove to be infeasible. He stated that slant wells must be proven feasible before the EIR is complete. (2) Jim Cullum offered the influence of JPA members to assist with obtaining rights of way and permits. (3) David Lithland asked for clarification as to criteria for a decision on the best intake site, and when a decision must be made on whether to utilize Ranney wells or open water intake. (4) Michael Warburton stated that consideration must be given as to the best use of water resources in Monterey County, and that selection of the desalination alternative has not been settled. Byrne offered a motion that was seconded by Potter, to continue this item to the next committee meeting when Cal-Am staff will present additional information regarding development of a contingency intake well. The motion was approved unanimously on a vote of 3 – 0 by Byrne, Potter and Burnett.
4.	Update on Development of Landfill Gas Term Sheet Cullum reported that representatives from the Monterey Regional Waste Management District and Cal-Am are working closely together on development of a plan for supplying power to the desalination plant. It is estimated that the desalination plant will require 4.5 to 5 megawatts of power. The Waste Management District could produce up to 7 megawatts of power to meet the needs of the desalination plant and other customers on the grid. Cullum stated that the debt equivalency question will be dealt with.
5.	Discussion of Items to be Placed on Future Agendas No discussion.
Adjournment
The meeting was adjourned at 3:15 pm. U:\staff\Boardpacket\2014\20140915\InfoItems\23\item23_exh23b.docx