ITEM:		ACTION ITEM
13.	CONSIDER AUTHORIZATION OF $600,000 FOR ACQUISITION OF MONTEREY WATER SYSTEM PHASE IV ACTIVITIES
Meeting Date:			November 13, 2023	Budgeted:	No
From:			David J. Stoldt	Program/
			General Manager	Line Item No.:	N/A
Prepared By:			David J. Stoldt	Cost Estimate:	N/A
General Counsel Approval: N/A
Committee Recommendation: N/A
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines section 15378.

SUMMARY: At its October 10, 2023 meeting the Board adopted Resolution 2023-13 “A Resolution of the Board of Directors of the Monterey Peninsula Water Management District Determining the Public Interest and Necessity and Related Matters Supporting Acquisition of the Monterey Water System Owned by California American Water Company in Monterey County, California,” or the Resolution of Necessity.

Adoption of the Resolution of Necessity leads to the filing of an eminent domain proceeding in the Superior Court. In addition to the legal expenses, the proceeding will open the door to discovery, depositions, site visits and condition assessment, expert testimony, and other needs as yet not fully defined. These activities, up through and including the bench trial regarding the District’s “right to take” are being referred to internally as “Phase IV”. As such, it is necessary to authorize funds and bring the team back together to prepare for and execute the Phase IV activities.

The team of professionals expected to participate in the Phase IV activities are:

· Rutan and Tucker – Special Counsel

· Close & Associates – Operations & Condition Assessment

· Jacobs Engineers – Operations & Condition Assessment

· Raftelis Financial Consultants – Appraisal, Finance, and Rates

· Barclays – Investment Banking

At this time, we will seek to determine what documents (discovery) the District team should seek, what discovery will the District likely be subject to, define roles, how to schedule and handle site inspection, determine who will provide expert testimony, and so forth.

All of the professionals and consultants have worked with the District on earlier phases of the acquisition. At this time, the General Manager is asking for a total authorization of $600,000 without specific allocation to each firm. The Finance and Administration Committee met November 6, 2023 and initially approved $400,000 but suggested that staff review its needs and bring a modified budget to the full Board in hopes to avoid repeated additional increases in authorization.

RECOMMENDATION: The General Manager recommends the Board authorize up to $600,000 for Phase IV activities related to the acquisition of the Monterey Water System, to be expended only on the 5 firms identified above as directed by the District.

EXHIBITS

None

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