ADMINISTRATIVE COMMITTEE
4.	CONSIDER MPWMD PAYMENT OF VOLUNTARY ASSESSMENT FOR SEASIDE BASIN WATERMASTER ADMINISTRATIVE COST
Meeting Date:		December 3, 2007	Budgeted:	No
From:		David A. Berger,	Program/	N/A
		General Manager	Line Item No.:
Prepared By:		Same	Cost Estimate:	$13,384
General Counsel Reviewed: Yes
Committee Recommendation: On November 8, 2007, the Administrative Committee reviewed this item and recommended that its consideration by the Board be deferred until the tax liability issue raised in recent Watermaster meetings had been clarified. Staff subsequently contacted Dewey Evans who advised that he has reported to the Federal and State governments all income received as the Watermaster CEO, and paid all required taxes.
CEQA Compliance: N/A

SUMMARY: The purpose of this item is for the MPWMD Board of Directors to consider making a voluntary payment toward Seaside Basin Watermaster administrative fund costs in 2008, as the result of a recent decision by the Watermaster Board. This payment differs from the administrative assessment formula set out in the Superior Court 2006 final basin adjudication Decision, which assesses three entities, California American Water, the cities of Sand City and Seaside, for Watermaster administrative costs. To the extent any voluntary contributions are made, the amounts to be paid by those three entities pursuant to the court Decision formula, would be reduced on a pro rata basis. General Counsel Laredo has identified some questions and concerns regarding the legality of this voluntary assessment, which the Board should address if this voluntary payment is to be approved (Exhibit 4-A).

RECOMMENDATION: It is recommended that the Board consider approval of this Voluntary Assessment contribution toward a share of the Seaside Basin Watermaster 2008 proposed administrative fund assessment, provided a legally sufficient basis for its approval is determined.

IMPACTS TO STAFF/RESOURCES: As described in the October 17, 2007 report from the Watermaster Chief Executive Officer, Dewey Evans, the payment formula in the Voluntary Financial Assessment Policy is based on the number of weighted votes of each entity comprising the Watermaster Board (Exhibit 4-B). Since the MPWMD has two votes on the Watermaster Board, the requested voluntary payment amount would be $13,384, which equals 2/13 of the $87,000 proposed administrative fund assessment for calendar 2008 approved by the Watermaster on October 17, 2007 (Exhibits 4-C and 4-D). (The Watermaster staff report does not address if this amount would be adjusted depending on its actual administrative cost incurred during 2008.) Since this Watermaster Voluntary Financial Assessment Policy was only recently proposed, there is no line item in the District’s fiscal year 2007-8 adopted budget to cover its cost. This $13,384 expense represents only .16% of the District’s total expenditure budget, and is an amount that would not significantly reduce the District’s general reserves or adversely affect its overall financial condition. If approved, this payment to the Watermaster would be reflected in the Board’s mid-year budget adjustment action anticipated for February or March 2008. Finally, for information, to date the District has executed $71,172 in technical service contracts with the Watermaster to provide hydro geological and other technical services; and a proposed $83,800 MPWMD technical service contract for 2008 will be considered at the next Watermaster meeting. If approved, it can be anticipated that the payment formula in the Voluntary Financial Assessment Policy could be used as a precedent to fund future administrative assessments.

BACKGROUND: This proposal was initially considered by the Watermaster board at its September 5, 2007 meeting, and was referred to the Watermaster finance/budget advisory committee for review. Minutes of that Watermaster meeting describe the policy rationale and intended purpose of the proposed Voluntary Financial Assessment, as expressed by Seaside City Manager Ray Corpuz, who chairs that committee (Exhibit 4-E). At its October 17 meeting, following objection stated by the Laguna Seca landowner representative, the Watermaster board approved the Voluntary Financial Assessment Policy.

EXHIBITS

4-A General Counsel Laredo memo dated November 1, 2007

4-B Watermaster CEO Evans staff report dated October 17, 2007

4-C Watermaster CEO Evans memo dated October 22, 2007

4-D Watermaster 2008 Proposed Administrative Fund Budget

4-E Excerpt from Watermaster Board September 5, 2007 meeting minutes

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