EXHIBIT 2-A

Special Meeting for

MRWPCA Board and

Ad Hoc Water Committee

March 23, 2009

Seaside Community Center

MRWPCA Board Members Present:

Lou Calcagno, Chair Monterey County

Gloria De La Rosa, Vice Chair Salinas

Ramiro Cortez Boronda County Sanitation District

Ron Stefani Castroville Community Services District

Joseph Russell Del Rey Oaks

Kenneth Nishi MCWD Board Member

Libby Downey Monterey

Chris Orman Moss Landing County Sanitation District

Dan -Cort Pacific Grove

Dave Pendergrass Sand City

Ralph Rubio Seaside

U.S. Army Vacant

MRWPCA Staff:

Keith Israel General Manager

Brad Hagemann Assistant General Manager

Public Officials

Dave Potter Supervisor, Monterey County

Dan Burns Director, MCWD Board

Dave Hart Director, MCWRA Board

Steve Collins Director, MCWRA Board

Staff:

Lew Bauman Administrative Officer, Monterey County

Curtis Weeks General Manager, MCWRA

Jim Heitzman General Manager, MCWD

Fred Meurer City Manager, Monterey

Ray Corpuz City Manager, Seaside

Carl Niizawa Deputy City Engineer, Salinas

Members Absent:

Bruce Delgado Mayor, Marina

Transcript of Meeting:

Lou Calcagno - This is a special meeting of the MRWPCA Board of Directors and the Ad Hoc Water Committee. You might ask how this meeting got so big. At the last meeting of the MRWPCA Board of Directors, we took action approved by the Board that the Mayors of Monterey Peninsula and an Ad Hoc Committee of the Regional Board would go ahead and have a meeting to discuss an ongoing mitigation problem that was being handled between Marina Coast and the MRWPCA Board. We wanted to make sure that it can come to a conclusion and the only way we felt comfortable doing that was bringing everyone together. Well, we found out that the majority of the Mayors basically either had representatives or were alternates and sat on the MRWPCA Board. All of a sudden, we had a quorum problem, and when we had a quorum problem then we decided well how are we going to get around this. We’ve taken Board action and it got approved by the Board to go ahead and have this meeting. So then we finally decided that everyone is principally involved, so let’s bring the whole Board together with the Ad Hoc Water Committee. We’ll basically discuss it and we’ll go through the procedures. So we set up the format to do that.

Before we get on I will say this and then we will start the meeting officially. In putting this together, we’re talking about water. Basically we’re talking about reclaimed water from the CSIP [Castroville Seawater Intrusion Project] for the Monterey Peninsula and when we talk of Monterey Peninsula we’re talking Marina, Fort Ord, Seaside, Del Rey Oaks, Sand City, Pacific Grove, Monterey, and etc. With that being said, we have plenty of reclaimed water. The farmers have been using approximately 7,000-8,000 acres [acre feet] of reclaimed water a year for the summer water. All the winter water goes in the ocean. With that being said, there is plenty of winter water that we can either find places to store, or we can either go a step further and inject it into aquifer, or we can take care of a lot of the needs of the Monterey Peninsula with golf courses, parks, the universities, cemeteries, the fair grounds, you name it, with reclaimed water. The present time we’re using reclaimed water to grow 12,000 acres of crops and there hasn’t been a problem. We’ve been doing that for 10 years. I’m sure we can irrigate a few golf courses and we wouldn’t create any major problems, or a cemetery, or fair grounds, or Window on the Bay. Whatever it might be it would free up potable water. With that, you need to get some people together and what we have here today is the Water Agency of Monterey County which has been very instrumental in putting together projects in which basically is a custodian of the reclaimed water, although the regional agency [MRWPCA] is the processing agency that’s been processing that water. And of course, Marina Coast [Water District] fits in the picture because they are the purveyor of the former Fort Ord. All that will come out in tonight’s meeting.

At this time I’m going to turn it over to our Chief Executive Officer for the County of Monterey, Lew Bauman. Lew is here representing the County and, of course, Dave Potter and I both sit on the Board. We have to some extent dual purposes here tonight; but a lot of us have dual purposes here tonight, so we’ll try to work within our capacity. In the end when we leave here tonight, we’re going to leave here with a conclusion. A conclusion that’s been long in coming, and I don’t think we’re going to want to leave here tonight without that conclusion. We’ve had a lot of hard work to put together some programs and some projects that are going to be presented to you here today. A lot of people have given a lot and I think we’ve got compromise. Now it’s only going to take time to make sure that we do. I think the people that have been working on putting this together feel that within 30 days it should all be complete and done and whatever agreements we come to should go back to our respective bodies and be approved. We should be not discussing these issues anymore and put our efforts into doing other things that are probably more important to our constituents.

Lou Calcagno - Are there any public comments before we get started?

Jan Shriner - Thank you for this opportunity. I’m Jan Shriner. I’m part of the Marina Public Works Commission. I’m sorry that more of the Marina representations couldn’t be here this evening. The City of Marina also scheduled a budget meeting for this evening and without the Major having 100% control over the city’s schedule, he wasn’t able to make it. But if I understand correctly from the last week’s Public Commission meeting, the Black Horse & Bayonet private golf courses will be supplied with reclaimed water in Phase 1 of this new backbone pipeline. I wonder why no laterals would be supplied for any regions in Marina. One possible reason that I was given is that if everyone asks for every possible project to be supplied reclaimed water in Phase 1, the entire project would go from $27 million to $92 million and be stopped. Again to quote “a boulder and sawdust in a driveway.” I’d like to hear if we can get any of that cleared up this evening, and I want to hear more about the outcome of the March 19 meeting with only three Marina Coast Water District Directors in attendance to discuss the MOU with CalAm for only 12 minutes with only 30 hours notification to the public. That meeting was filmed. And lastly with that in mind with as much weight and importance as is going on with regional water planning right now, as is helpful and as inexpensive as access Monterey Peninsula Public Television is, I suggest that all future special and regularly scheduled meetings like this be taped and be made accessible to all citizens in the future.

Lew Bauman - It’s a pleasure, Board members and Ad Hoc Water Committee members, to have the opportunity to address you this evening. Supervisors Potter and Calcagno offered me relief from our tedious budget meetings and this was what they offered me this evening.

Honestly, for me this is a great pleasure. My background is in water resources and it is a pleasure to have a few moments to address you this evening. For the members of the public to clarify and I believe your chair clarified the purpose of the meeting, but specifically the intent of tonight’s meeting is to hear presentations from your staff and to initiate a dialog that would lead to development of several integrated water supply projects for Northern Monterey County and ultimately to agreements to implement those projects between MRWPCA, MCWD, as well as the MCWRA. In preparing for this evening I was reflecting that in Monterey County we really have a long and rich history of self reliance, ingenuity and water independence. We’ve relied on our own engineering expertise to build our local water supplies. It goes back to the early 1900’s when Morris built the dams up in upper Carmel Valley. Back to the 60’s when the Monterey County Water authority at the time built the Naciamento and the San Antonio dams. They provide irrigation water, flood control, and recreation. They’ve converted the Salinas Valley into the most beautiful, sustainable, agricultural resources in the state, if not the nation. Later it was the recycled water project in northern Monterey County, and most recently under construction the Rubber Dam Project. We don’t rely on State water. We don’t rely on Federal water. Our water independence and our destiny have always been our own.

As most of you know, Cal Am has submitted an application back in 2004 to the California Public Utilities Commission to implement the Coastal Water Project. Of course that project would supply 12,500 AFY for urban users on the Peninsula as well as injection in the sea water basin. Of course that project is based on law, Water Resources Order 95-10 which requires Cal Am to secure that water supply to basically replace diversions above their legal limit of approximately 3,300 AFY. The draft EIR for that report has been distributed and it’s available for public review until April 1, which is a few days away. Of course for those familiar with those projects, it includes their desal facilities in Moss Landing, the North Marina project facilities, and a larger regional project that will serve as an alternative. This is a critical time as that EIR project comes to a close. It’s critical that as Monterey County we reach consensus on a series of these water supply projects so that we mitigate the overdraft in the Carmel Basin as well as the seawater intrusion along our coast. Most importantly it will provide for a sustainable water supply for the quality of life that we’re all come to rely on and enjoy upon. If we do not meet consensus and send a clear message of the State of our preferred projects, I think we should fear that the State PUC and Cal Am by order of law will have no choice but to make a decision on our behalf. To that end your chairman and the representative leadership we have here tonight of our elected officials join to provide staff focus and most importantly direction to develop a strategy for an integrated water resources plan that meets our collective Monterey County vision and therefore continue our long tradition of charting our very own course for our own water supply future.

Curtis Weeks - One of the challenges that I think we’ve had here in the last 2-3 years is really getting our brains around what this integrated regional project entails. It’s been kind of squishy. Tonight my intent here is to put a little bit more focus on the elements, to be able to talk about them, to talk about some of the institutional issues that we need to resolve. Some of those institutional elements are managed and then with hope that we can all agree to get these agreements in place and moving forward with the projects.

We’ve got a regional project that consists of a number of pieces. It will have a North Marina brackish desal element that has some water supply wells that I want to talk about. It requires an ocean outfall to get rid of the reject, and it maximizes our existing infrastructure by use of the MCWD’s distribution system to move the water into the Monterey Peninsula. I also want to talk about some recycled water projects, specifically teed up today, an irrigation project; and we should be able to move forward in short order. Ultimately I want to talk about those institutional agreements. We need to make it happen. If I push the buttons in the right direction we move forward [referring to power point presentation].

The California American Water has got three elements in their current EIR. I recall a meeting with Supervisor Potter and one of the commissioners when we first started looking at the desal plant. We had a great discussion with Ms. Kennedy about Kurt Showing and it was a pretty good discussion. Out of that the PUC helped us develop a regional flavor to the projects that Cal Am was developing and so what we’ve got now is a two-pronged approach from California American Water that’s an ocean desal at Moss Landing and then North Maria brackish water desal plant primarily aimed at bringing water back to the Monterey Peninsula. The third element that has been identified is the regional project. In the EIR it covers impacts. So our comments and that process is ruling out ultimately with an EIR to be finalized sometime later this year. In addition there is a PUC process, a decision that would give CalAm the opportunity and frankly through this Notice of Public Conveyance more less a license to build a project. Well, we want to be in position to initiate all the local agreements and the local control to develop a regional project together.

Today there are a couple of elements that are already in place in terms of integrated projects. Over the last several years the MPWMD has been developing an ASR project to bring excess river water from the Carmel watershed and put it into the Seaside Groundwater Basin. Sand City has moved forward with their desal plant and those two elements are some where north of 1,200 AFY. Those are ready to be implemented and are in the early stages of implementation and moving forward. The urban recycled water element is about a 15,000 AFY project for irrigation and somewhere north of 3,000 AFY for either winter or groundwater replenishment, and there is a brackish water desal plant that will have about 10,000 AFY for us to look at in terms of integrating those projects. So the brackish water desal requires wells that are located on the ocean right here [referring to slide]. This is well south of any agricultural areas, which is a key element for the Water Resources Agency. The pipeline comes over to a treatment plant that will be located adjacent to the existing wastewater treatment plant. Those wells will then be along the ocean. They’re going to pull a combination of ocean water and ground water. And for the Water Resources Agency the key element is a groundwater component. With Marina Coast as essentially the treater and developer of the project, we already have an existing annexation agreement. There’s already an institutional piece in place for them to take whatever element of water that is to be attributed to the groundwater basin and keep it on the Fort Ord or Marina Coast footprint, thereby not transporting any groundwater out of the groundwater basin. So it would be our proposal perhaps that the Water Resources Agency own the wells. We work with Marina to build the plant for them to use the element of the groundwater basin component, some 15,000 AF on their footprint, and the rest of the ocean water to be moved onto the Peninsula for distribution of use.

So by pumping the small amount of intruded groundwater, it should improve the groundwater quality. There are a number of models that have been done; it provides the opportunity for that groundwater to be managed by MCWRA. Our Board of Directors has given us the direction to move forward with that institutional work to get that moving. The desalted water can then be delivered to MCWD in areas that they currently serve and again it meets the requirements that we have for keeping our groundwater basin [water] in the Salinas Valley. Then you’ve got the treatment plant for the desal. It could run inconjuction, or the pipelines that serve and connect to the existing infrastructure in Marina Coast, parallel with the pipeline alignments. There are a couple of alignments to be able to look at. Ultimately we’ll need to be able to also address this issue of reject when we run water through some sort of membrane technology, some sort of filter, we get a product water that is less salty and a reject water that is saltier. It just so happens that this blend of groundwater, this brackish water, once we desalt it, the reject that is left over is pretty close to the density of ocean water and that plays into the ocean plan and allows us to use potentially the outfall that already exists. When we’re in the middle of the summer months, that outfall is pretty empty because all the water that is being available for treatment is irrigating all kinds of crops – 12,000 acres out in the Castroville area. For a factoid, we’re using about 13,000 AFY of recycled water and about 6,000-7,000 AFY of well water, for about 20,000 AF total. The idea here is then that we’ll need to develop an agreement between MRWPCA and MCWD to be able to use the outfall.

What’s ahead of us? Well we’ve got this draft EIR that’s out today. It’s actually due in terms of comments on the 15^th of April. Then in the same time period there will be a final EIR sometime this year and this PUC decision. Our intents here tonight is to get us all here together so that we can be ahead of this PUC decision, bring a package for our regional project, an integrated package to the PUC, and essentially keep control of our water resources under our auspices.

Some of those institutional issues we’ve talked a little bit about. I think one of the key things for us to consider tonight is that Cal Am has continued to march in this process from the time they started to look at an ocean water desal out at Moss Landing to today. They have been focused on getting a water supply, and they have repeatedly told us and others that they are looking for water. They don’t care if they build a project or if somebody else builds a project, they need a water supply. So we’re going to take them at that face value. We’ve got a project that fits their needs, and we need to move forward with getting that institutional piece in place. We do need to be cognizant in the fact that they’re marching because of Order 95-10, and the fact that Seaside Groundwater Basin is an overdraft and we need a water supply.

We’ve talked a little bit about the definition of the project. We need to draft some sort of agreement between Cal Am and MCWD in terms of development of the project. That can either come via some sort of reimbursement agreement to do the soft work, that’s the engineering up front, but ultimately some sort of water purchase agreement. We need an agreement between MRWPCA and MCWD for reject disposal. Then finally in terms of the supply wells for the project, MCWD and MCWRA need to come together and figure out a way in which to monitor the groundwater basin and develop the wells, and then ultimately we’ve got some permitting pieces to be able to finish. Frankly the permitting stuff is the easy stuff; it’s getting all these agreements amongst ourselves. The idea is let’s get some direction tonight and go get those agreements done. I think those are the agreements that Supervisor Calcagno referred to earlier tonight.

The other part of this integrated project tonight is recycled water. Just to summarize where we are—we’ve got a couple of elements in place. We’ve got the desal plant out of Sand City. We’ve got the aquifer storage and recovery project from MPWMD. The third element in this project from what we’ve been talking about is a brackish water desal plant located in north Marina that has water moving through MCWD’s system into the Peninsula. The next element that I want to talk about is a recycled water project piece. We’ve got a certain amount of water that is available to the urban areas for use during the irrigation season. When we first developed a partnership with MRWPCA and MCWRA frankly it was a project to develop water for our agricultural folks, folks in Salinas Valley paid for it all. As we get into this element here, we’ve crafted an agreement that sets aside some water, enough to do about a 15,000 AF project provided that we got some improvements in our filtration throughput capacity and we did get the letter from the Regional Board last Wednesday so we can now treat upwards of 30 million gallons a day through the plant. Provided that we have the input to the plant as a key element, we have enough water for all. So that’s good news. So we have enough water both institutionally and as well as contractually to move forward. We also have the ability to use an awful lot of water in the non-irrigation season for either a replenishment project or additional storage for an expansion of that irrigation project.

We’ve either got something north of 3,000 AF of winter water and some 1,500 AF for irrigation available to move from the treatment plant into our urban areas. You’ve got a pipeline that begins at the treatment plant, runs down through the former Fort Ord, and in any recycled water plan you need to have customers. Some of the key customers that certainly are available are the golf courses, Black Horse & Bayonet, also the CSUMB fields. You need to have some anchor customers to be able to make it really work with what you’ve got a fair amount of utilization. Those will be key on the former Fort Ord. Certainly laterals can be built to cover a number of different opportunities, but you need to make them cost effective.

In addition we should be able to develop a project where we can work again with Cal Am. Somewhere at the terminus down here of the former Fort Ord at the recycled water line, we can develop a project to bring water into the Seaside Groundwater Basin and pick up Bishop Ranch, Pasadera golf course and Laguna Seca, and well as perhaps the Laguna Seca Park. So in terms of our recycled water project for irrigation, these customers are ready and looking. We need to think about some of the incentives for moving recycled water especially in those areas outside of the former Fort Ord like Pasadera and Laguna Seca, but there are a number of opportunities for us to work on with Cal Am. We could look at some of the replenishment assessment room that we have in the existing seaside groundwater basin fees. We could also talk about moving some of that groundwater around, and there are ways in which to provide incentives via changing the type of pumping whether you are an over lyer or an appropriator. So there are some opportunities and incentives to make that a real possibility to expand the use of recycled water. Ultimately, we need to be able to improve the availability of potable water throughout the Seaside Groundwater Basin.

Just to kind of summarize on the Third Amendment piece. We do have this Amendment in place with MRWPCA and ourselves. The idea, of course, I’ve talked about the 12,000 acres out in Castroville that’s why the project was developed. Here you’ve got this, no pun intended, a target-rich environment where you need to have water and we’ve got some very courageous, focused farmers out there that have taken that water on for the last 10 years and have been putting it to use. And the good news is that crops still goes to market and that’s how we’ve always measured success. We do have the availability of about 15,000 AF of water for irrigation. The offset that I’ve talked about a little bit is in hand now, and then we also have significant quantities of winter water. Frankly we’re not putting it to use out in the fields during winter months, so there is somewhere north of 3,000 AF that can either go to storage or go to replenishment. I don’t think we have all those details worked out, but it is available for additional use. We’ve also got in that Third Amendment cost formula that even goes so far as to develop the pro-rata debt service element as well as the operation and maintenance piece. That’s a key for our agricultural community to make sure and know that if additional water gets developed, their costs go down. So that’s an important element for them to consider. Ultimately the amendment intended for MRWPCA and MCWD to work together. I believe we are at that point and are ready to do that. So this regional integrated project requires collaboration and requires a collective effort.

We’ve talked about the elements tonight in terms of the regional project - it’s a brackish desal in North Marina. So you’ve got the groundwater that’s being developed out of that project staying in the Salinas Valley, and the ocean water that’s desalted moving to the Peninsula. You got a recycled water element for irrigation and for groundwater replenishment. Certainly a couple projects that we can look at in building upon those. Ultimately you’ve got an op[tion] for storage and recovery project that’s been already developed by the MPWMD [that] could also be augmented from the groundwater replenishment. So what we need to do tonight is focus and get direction from you all on the agreement[s], the institutional pieces. The brackish source water needs to be developed by MCWD and the MPWRA. We’re already working towards that amendment, working towards that agreement. The Agency’s Board of Directors gave me that direction last Monday. We’ve got some meetings set up and we plan to get that thing done. I’m going to do my level best to get it done in 30 days - no guarantees, but I got the message fast.

We need to develop a reject disposal agreement for the outfall between MCWD and MRWPCA. That’s a key element in the ability for us to treat brackish water. We need to develop a water purchase agreement or reimbursement agreement with Cal Am and MCWD, and then finally the three organizations—MCWD, ourselves, and MRWPCA need to sort out some of the details on recycled water. Those are the key pieces. This is the pretty stuff about all the elements [referring to slide], what needs to happen, and then, Jim, we get the pretty pictures at the end, and we’re done. Thank you!

Keith Israel -Thank you, Supervisors, Mayors, and all the other officials, and the public who are here. Actually Curtis did such a great job and went through everything; I don’t really have anything to do except to thank Curtis for putting it all together. I think the critical message that I got from everything was the importance that we all come together on this local regional water program and really get that consensus. I think that is so important for us to have control over all our water supply; and I think we have the outline that’s put together here for us to do that. For my perspective it is one thing to work on water projects, but really to me it’s more fun to build something. We’ve been using so much time talking with agreements going back and forth, I’d like to see projects ready for construction. So that’s where we might go.

I want to see a new water supply, and I think we’ve got a good plan that’s been outlined here as far as the regional program. I work with other elements that are going to need this; this is the first part of it. We’ve identified a lot of other needs that need to go for the future. Basically in summary, I think the one suggestion that I would have is maybe we need to have a meeting like this perhaps annually or some period of time to talk about what we need to do for the other projects that are out there for the future, so that we can be sure to meet all of the needs and doing it in a way so that the whole community supports the effort. Basically that’s what I suggest and again thank you very much. It’s the first time I’ve seen anything quite like this, and I think it’s going to be very successful. I’m looking forward to implementing the suggestions.

Jim Heitzman - Thank you for having us here tonight. Marina Coast is happy to participate in all of this. I think one of the things that is important is we’re going to look regionally on how to solve problems and not look individually on how to solve problems. I’ve been working hard, long hours with Curtis already on this deal. We’ve already been starting communication with Cal Am on it. We’ve worked for hours with MRWPCA so I think 30 days is probably an appropriate amount of time. We just get up and move it forward. I’m available almost every day except for Saturdays and Sundays, and Monday nights. Thank you very much.

Lou Calcagno - Now the procedure is we’re going to have comments from the Board members and the Ad Hoc members. When we’re through with our comments, we’ll open it to the public and then their telling me I’m not following procedure. We’ll go ahead and let Public come up at this time. It’s proper time to do it according to what I’ve been signaled. If not, I’ll close with the Public but I guarantee we’ll bring it back to you after comments from this body.

Ralph Rubio - This is described as one of the most important water moments in the recent history, aside from the fact that a dam was turned down. That was a pretty significant water moment in our history. But to have all the policy makers in one place talking about the same issue with all the facts presented at the same time, I think is a guarantee for success. That way there can be no mistake about what was presented, no different versions; it’s all the same information for everybody at the same time. I think the idea that we get together behind the regional project as our own solution to the issues that they saw, rather than having an overlaid solution for us, is a primary focus. The four agreements that are necessary to accomplish this are critical to the success of this project and those are the source water, the brackish and intrusion water. The agreement between MCWD and MCRWA, then Cal Am and MCWD purchase agreement, and then MCWD and MRWPCA agreement on the outfall, and then the 3-way agreement between the three agencies on the recycled water taking care of the basins and the needs of the recycled water throughout the community not just Marina and Seaside but on further into Del Rey Oaks, the County east in the Highway 68 corridor and well as Monterey and as far as we can get that water out there to meet the needs and free up potable water for the things that we really want to do.

So I’m just really hardened to see everybody here working towards the same thing, and I look forward to walking out of here today with a substantial agreement and direction to our staffs to hammer an agreement out - a contract that we can all live with - within 30 days. So we can go to the PUC and say “hey we’ve got the package, all you gotta do now is move us forward.”

Lou Calcagno - (talking to MCWRA) - We’ve got two of you here and would one of you want to give your comments? I know that water is important to the Salinas Valley and MCWRA has worked years to develop a water supply, a long-term water supply. It’s obvious that when we start talking about water and moving water that when it comes to Salinas Valley water we’re moving, we become very protective of it in the Salinas Valley because we’ve got the cities in the Salinas Valley, we’ve got the agricultural holding that has been paying since 1956 for that water supply and they’ve been paying dearly and since then they’ve put together three votes, three different projects that have come along way in establishing a long-term water supply.

Steve Collins - Thank you. That’s a good lead in and I’m pleased to be here tonight and I’m very heartened to see us working collaboratively. I have felt for an awfully long time that there are solutions out there to the water issues and that if we work together on a regional basis as a community we can solve those problems. The Salinas Valley has built a number of projects as you know starting with the reservoirs. We just completed the work down at the reservoir; we’re about to complete the rubber dam project; we built the CSIP and the SVRP. We’ve done a good job and those assets are in place and can be utilized at times when they are currently not being utilized. I have always felt there is a conjunctive use feature to these assets. I could go on about how I think the rubber dam may some day play into things. There are a lot of things that are available if we think collaboratively. From my perspective as a Board Member at MCWRA, the agreements are pretty much in place. Years ago Marina Coast bought in, Fort Ord bought in, there’s a water allocation there as long as that’s not exceeded. We don’t have any groundwater transfer issues that I know of. I see a few attorneys in the audience and I tend to get corrected from time to time, but I don’t see a problem with that. A collaborative regional approach is the way to solve issues, and I think it is a cost-effective way to go forward. You have my pledge that our Board will work very aggressively with MCWD and the other Board to put these agreements in place and to get these done. Again from my perspective, I can’t see a reason this should not go forward; and I appreciate the opportunity to work collaboratively on this. The farmers are protected; the citizens of Salinas Valley are going to be reimbursed for their pro-rata share of expense. I see it as a win-win. It’s a symbiotic relationship. The Peninsula gets the water they need; it’s water that the farmers are not using to irrigate their crop. There’s additional capacity being built in the system. The water that is being taken from a groundwater standpoint is within the capacity that has been assigned. The pro-rata cost share has already been worked out. I don’t know every issue that we’re going to have to cross, but I would think from my perspective as far as us working with the other two agencies, I see us as your easiest hurtle to clear. I know you, Jim, think I can be tough sometimes, but that’s because I like to pound on you, it’s not everybody else. Unless you want me to answer any questions, Mr. Chair, that’s it.

Lou Calcagno - I think that was an overview and everyone around this table has to understand that any time we’re talking about Salinas Valley water; it is a very sensitive issue. We tried to put together a package that answers the Salinas Valley needs and takes care of the Peninsula needs with the package that’s being proposed at the present time. Now we’ve been talking of phasing and different phasing and we’re basically talking and giving consensus to what we have on the table. We’re not talking about phases down the line that are not here for us to talk about because that’s not what we’re here to discuss and that could create some problems where we couldn’t come to an agreement. But what we’re talking about now, we have pretty much a consensus of agreement. Marina Coast, you’re a big player in this. Does any Board Member want to make any comments on this? Nishi?

Kenneth Nishi – Yes, agree with Mr. Collins about working together in this area. It’s a regional problem. I think Marina Coast has been a good neighbor. I think a lot of people don’t know that in the CSIP project there were two components, the potable water and the recycled. Basically Marina Coast subordinated out of the potable water because of the cost, and MCWRA came back and said ‘hey, we’ll study the xxxxx-cycle cone’ and that cost was too prohibited. So we’ve just sat on the sideline, supported Ag with all our recycled water since 1989, giving all that water to our friends and neighbors in the Salinas Valley; and I think the reason all this didn’t happen was because this project that is on the table now is much better and I think us waiting is going to benefit the rate payers with a product that is going to be more cost effective in the long run. So again, I think Marina Coast has always been a good neighbor to the farmers, and we want to be good neighbors to everybody including the Peninsula. Thank you.

Lou Calcagno - Joe Russell, representing the Agency (MRWPCA) and working on this project now for I don’t know how long.

Joe Russell - Thank you very much, Supervisor. I’ll just be very brief. I think one of the things that strike me the most here is, I think, the cooperation that I think the MCWRA is coming forth with and that is to provide additional water to MRWCPA which, of course, would enable the RUWAP to go forward and also the Groundwater Replenishment Program. Without the County’s cooperation here, we’re up the creek, so to speak, and I think that’s what I want to emphasize. I appreciate the cooperation being shown here by Monterey County.

Gloria De La Rosa - It’s a regional problem; we all want water, but I think what we’re hearing . . . . I’m so glad that all of us are here and the collaboration and it’s coming forward and we need to have this regional agreement. I thank you, Supervisor Calcagno, for bringing this forward and just all of us coming together tonight to move forward.

Lou Calcagno - Ron goes all the way back to the beginning of the project and when the CSIP project . . .

Ron Stefani -Yes, and being a life-long member of Castroville of course, lots to grow up around me. Being on this Board, MRWPCA, and really getting intently into what the issues are, we all have to remember that we all represent the tax payer and the rate payer. I think decisions sometimes seem to be tough and agreements, but we’re always going to have to make the most cost-effective, economical decision; and that’s why, I think, there’s a new spirit here because we’re starting to realize that that’s the direction we’ve got to go. We’ve got to utilize the cheapest water we can to its fullest and then the desal water is a little bit more expensive, but we’re going to need it. I think that’s said. I also don’t want to forget about the North County problems up in the Granite Ridge area and I think this will set the framework to move into Phase 2 and get into that.

Chuck Della Sala - Well it’s a pleasure to be here this evening and to hear everybody speak in such unison. I feel like we should all hold hands and sing ‘kumbahya’ because it looks like we’re going in the right direction. Two comments and then a question. I appreciate the comments regarding reclaimed water/recycled water, that is critical to the Monterey Peninsula receiving water and it is an important element of all three of the regional projects that have been proposed. Secondly, and has been mentioned by Curtis, the coastal wells, an important aspect of all three projects and the fact that MCWRA should own them and control them in order to make that a neutral situation. And now the question - what are the key negative points between MRWPCA and MCWD on the outfall line, if any? Any negative points? Any negative points regarding the negotiation of water and that outfall line? I see Jim shaking his head, no; Keith, no?

Dave Pendergrass - One thing in Curtis’ presentation, he had everyone on a level playing field and that’s not been seen. We’ve all gone different ways talking different solutions, being involved over the years, and it’s good for the Supervisor and Chair of our Board. The time is of essence and it’s a matter of if we’re all on a level playing field here. That’s what I’ve seen tonight and I think that’s a good start. With that frame of mind and everyone involved here, we can get it done. And there’s so much at stake here for the County. The downturn of the economy and all of these things happening, the funding for all that we’re talking about and the cost of the rate payers and everyone concerned, we can do it if we pull together. I think the County has all the water resources and avenues that we can use, if we just pull together. And tonight, again, Curtis’ presentation looked like a level playing field and if we keep it that way, we’ll get it done.

Libby Downey - To put it concisely, amen! I think we’re all on the same page and I think we want to make our decisions instead of somebody making them for us like the PUC. So I felt excitement when I walked in this room tonight. I felt like people were excited and ready to move and ready to do something; and we’ve been a long, long time at getting here. So, I appreciate all the efforts and all the attitudes that have come tonight, and we’ll just say amen and hope this works together - soon!

Dan Cort - Well I feel, as does Libby, that this is a great opportunity to work together and we are doing that locally, and we’re working with Monterey. We’re working with Peninsula cities, we’re working with the County and this is a good opportunity over the next 30 days to get these problems solved. We’re very excited about the possibility of recycled water for Pacific Grove and Monterey. We’re going to need that type of resource for our golf courses and for our green areas and that sort of stuff. And also resolution to the MCWD/MRWPCA issue. That’s something we’ve all been looking for. Let’s put this behind us; let’s get together as an organization, this regional group, and solve these problems and, Lou, if we can do this in 30 days, go for it.

Chris Orman – There is a lot of wisdom here tonight. We’re getting to the point where we’re going to watch another 3,000 AF of water going into the ocean this winter. And while we debate how to desalinate it and put it back into the pipes to be using it and I think you’re the one who said that at our last meeting, Mr. Supervisor. So what is going on here is important.

Lou Calcagno - Well, let’s hope we can all get that feeling that cooperation is the only way we’re going to win this battle.

Dan Burns - Well, let me just say this. In 1973 we were talking about a Regional Treatment Plant. We didn’t start operating until 1990, so I hope this doesn’t take that long. I actually worked there for 28 years so I know how it operates. I’m just excited. We keep saying 30 days, but I know what happens when you leave these meetings, nobody knows who is supposed to call who. I’d like to see some sort of timeline set up that is some sort of chart or whatever. We’re ready to talk to anybody, anytime so we can get these things done.

Lou Calcagno - I think we’re ready to do that. With that I’m going to Supervisor Potter. Have a few words?

Dave Potter - I’d be saying the same thing, but I will say that I think last time I checked, Mayor Pendergrass might be the most senior elected official these days in local government. We certainly sat around a long, long time hoping we could all get together and find a solution. I’m extremely pleased to be here tonight; and hopefully during the balance of my 10 years in local government, we’ll actually see something happen in the world of water. That would be very refreshing.

Lou Calcagno - With that, I’m going to be honest with you. We worked this afternoon and we did come up with some language for a motion, unless someone . . . . We’re going to put the motion on the table before we have Public Comment. This way we’re discussing, and everything is on the table when we discuss it.

Ralph Rubio - Through the Chair, I’d like to propose a motion. I drafted this thing earlier today, but as discussion went on, I’ve been over here furiously writing trying to capture everything that we can possibly get into one motion. So I’m going to go really slow so we try to get it all.

I want to make a motion to select the Regional Water Project as our solution and recommend implementation of the institutional agreements identified in the presentation. The source water between MCWD and MCRWA, the purchase agreement between Cal Am and MCWD, the outfall agreement with MCWD and MRWPCA, and the important one, the three way agreement covering recycled water, winter water, and groundwater replenishment between MCWRA, MRWPCA, and MCWD, and the formation of a Negotiating Committee consisting of the Executive Director, the Board Chair, and a Board Member from each of the respected agencies, and a neutral counsel, an attorney to construct the agreement so that we don’t run into any road blocks.

Libby Downey - Before I second that motion, I’m just wondering if you want to put a timeline or anything to try to make this happen in the near future.

Ralph Rubio - Okay, a neutral counsel to construct the agreement within. . . .

Lou Calcagno -They should start constructing and working within the next 10 days. The group should be working. Now making up this group, just so we know it would probably be Keith Israel representing the Agency. I would think that Ralph Rubio and myself would be the two sitting on that body with him. Curtis Weeks would probably have the two gentlemen who are here along side him tonight putting that together, and MCWD I would imagine would have two members with them. They would meet with a neutral counsel, and they would sit and start drafting within the next 10 days. That’s what we’re looking at. So the nine people would put it together, and I would say that if everything is fine, we’d probably be back here within 30 days from now to approve it. Then from that point, each respective body would have to bring it back. But we’re looking at the people it affects from Monterey Peninsula. When you support it, you’re sitting on this body representing Monterey. Libby, you would really be casting the vote for Monterey. Marina Coast has Nishi; he would be voting for supporting it and, of course, Ralph and I are sitting on this body, so when our vote came, we would be going to support it. So we pretty well got everyone involved so that we’re not going to go three separate ways. We’re not going to let the three managers out of the room unless they come to an agreement. They’re not going to go back and talk with their attorneys or whatever to get this thing changed around because we’ll have one neutral attorney who represents us all for the betterment of the area, not for the betterment of one district.

Ralph Rubio - I will include that timeline in the motion for the initial meeting with an expectation of a completed agreement in 30 days.

Libby Downey - I’ll second the motion.

Lou Calcagno - With that we’ll leave the motion on the floor, and we’ll open it up to the public.

Janet Brennan - I’ve been attending the regional meetings for over a year and this is certainly an important event. I do have a question. This is the first time the Groundwater Replenishment Program has been included in Phase 1. It’s not part of Phase 1 in the DEIR; and if the Groundwater Replenishment Program is agreed upon and is successful, it’s my understanding that that will reduce the size of the desal plan. So if someone could respond to that, I would appreciate it. Thank you.

Curtis Weeks - I think that the groundwater replenishment piece is certainly an issue that we need to work out and resolve. And if it does indeed work into this integrated approach, then it could result in a smaller desal plan. But both of the technologies that we’re talking about essentially removing salts, whether that is from recycled water or from brackish water supply. So those pieces I think are interchangeable. The supply water is the issue.

George Riley - Citizen Republic Water. I have two points to make. One is that the agreements that might be developed are already dealing with some infrastructure that’s been paid for by the public, and I know that each agency that manages and is responsible for the infrastructure will want to be reimbursed for some fashion. My point is that the ultimate buyer of the water is going to be the customers and the rates that are designed in this process for water including Cal Am are going to fall on the rate payers. I hope that you can surely see the value of water wheeling which is using existing infrastructure and the outfall and so on that have already been paid for that the allocation of cost and so on are fair. Fair to the rate payer but also fair between the agencies because one agency shouldn’t hold up the next agency who wants to use the infrastructure it’s already been paid for. Public is responsible for it, and I hope you can honor that.

The other point I want to make is that there are a couple of agencies, at least in my mind, there are agencies that ought to be involved with some of the negotiations, not that they have the direct responsibility or jurisdiction but, I would like to see the Water Management District and also the Seaside Basin Adjudication Group in some way involved in some technical discussions that you may have among staff because the fallout of all of this plan on REPOG number one is the Monterey Peninsula. You have a number of cities around here who are already represented, but they don’t represent the water agency that is dominantly responsible for that. So if there is a technical dialog group or whatever that might be formed over the long haul, not necessarily in the 30 days but in the long haul, that all the agencies are at the table and that they can bring their interest and so on to be resolved. Otherwise you’re still talking about a kind of left hand, right hand issue that won’t get resolved unless you’re all at the same table talking about the same playing field, and I hope I encourage you to do that too. Thank you.

Jan Shriner - I wonder if we might add to the motion that we could have these filmed so that we could as a public see them on maybe the Monterey County Government channel.

Jim Smith - I’m the District Manager for the California Water Service, and I’m here just to kind of set the record straight. I keep hearing from a lot of people that why isn’t Cal Water participating in this or the City of Salinas; and I’m here to kind of set the record straight. I’ve been in Salinas since 1992. That’s when the Resources Agency was formed. It used to be the Flood Control District. Cal Water has been a major supporter of everything that MCWRA has done through the CSIP and in everything, we participated. We’re in Zone 2C and we pay for everything, well our share of everything. Before this process even started, we took a proactive approach and we hired a company, CDM, to do a long-term study of our future water supply through the year 2030. We really did take an unbiased view of a lot of projects, and we ranked and rated those projects with some interesting criteria. Just to name a few was environmental concerns, costs, permeability, litigation, and all that. I have to say the desal was at the bottom of the list, I’m sorry to say. I think it’s great that everybody is working together and we certainly want to stay involved. I’m involved in the REPOG committee and I can’t tell you how many committees I’ve been involved in; but we have to look out for our rate payers and that’s 28,000 connections, over 100,000 people in Salinas that we supply. I hate to say we’re going to do our own thing because we’re open to a lot of things, but we have to look out for our rate payers in Salinas, and that means stay in Salinas and drill. Sometimes you have to treat the water, but continue to work with the MCWRA and maybe some day have an urban project, not just for Salinas but for every city in the Salinas Valley.

Lou Calcagno - We’re going to take two votes, one of the Board members and then we’ll come back and take one of the Ad Hoc Committee. So we got a total vote here tonight. Are there any more comments from anyone before we take the vote? Does everyone understand the motion? When we mean 10 days we mean we’re going to meet within that 10 days, so staff be prepared. We’re going to set the date out and we’ll meet. It could even be possible that we’ll set the ground rules and meet sometime this week, before the end. Today’s Monday, there are still four days left. So it could be possible. The first time we meet, we don’t have to have legal counsel with us; we can just draw up sort of the basic rules and regulations that we’re going to meet with and how we’re going to proceed. Then we’ll determine who our legal counsel will be at that meeting and proceed from there. Are there any other comments?

Motion passed.

Lou Calcagno - I feel comfortable that we’re going to move forward and we’re going to put this thing together. I know that I’m going to do everything in my power to make it happen, and I’m sure everyone else is committed. There’s no reason for it not to happen. Now as far as working with the other agencies on the Monterey Peninsula, as soon as we go to a Public Hearing and we approve this in 30 days when we come back in this room and take a vote and approve the document, at that time we’ll start opening up to the public and we’ll have a lot of public input.

Libby Downey - Did that motion include the wells?

Lou Calcagno - I think it pretty well included all the agreements that had to be made and in those agreements were the wells agreements.

Meeting adjourned at 8:15 pm.

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