EXHIBIT 2-A

MONTEREY PENINSULA WATER MANAGEMENT DISTRICT

MEMORANDUM

DATE: April 28, 2010

TO: Darby Fuerst, General Manager

FROM: Andrew M. Bell, District Engineer

SUBJECT: Progress Report on Identifying Potential Desalination Project Sites Located within the MPWMD Boundary

SUMMARY

This memorandum reports progress to date on identifying potential desalination projects within the MPWMD boundary. This effort was directed by the Water Supply Planning Committee at their February 2 and March 8, 2010 meetings.

TASKS AND ESTIMATED SCHEDULE

1. Develop Feasibility Criteria Goal: March 31, 2010

a. In consultation with the Water Supply Planning Committee, establish water supply goals and feasibility criteria for desal projects within the District.

Status: This task was completed at March 8, 2010 Committee meeting. Project locations were limited to between Cypress Point and the northern extent of the District boundary. The minimum water supply production was set at 2,000 acre-feet per year.

2. Literature Search Goal: April 16, 2010

a. Review MPWMD reports to determine what sites have been identified and investigated (completed - see Jan. 25, 2010 memo, Bell to Fuerst).

b. Assemble geologic maps of MPWMD coastline to allow identification of potential locations of feedwater intake.

Status: With assistance from Joe Oliver, I assembled maps and reports in possession of the District containing information on coastal geology and subsurface conditions. As an example of investigations that have been done in the past, the September 1990 report prepared for the District by Staal, Gardner & Dunne, Inc. titled “Hydrologic Investigation, Monterey Coastal Basin, Monterey County, California” evaluated the potential for producing source water for a desalination facility to be located at the site of the abandoned MRWPCA wastewater treatment plant located across Del Monte Avenue from the Naval Post-Graduate School. In this report, the yields of beach wells in this area is estimated to be approximately 100 gallons per minute per well. Based on this estimate and assuming that 50% of the feed water would be recovered as product water from the desalination plant, it would require about 30 beach wells in this area to produce 2,000 acre-feet per year of potable water.

3. Field Surveys Goal: May 28, 2010

a. Visit all sites that appear may have potential.

Status: To be done.

4. Meet with Agencies and Property Owners Goal: May 28, 2010

a. Likely meetings:

1. Cities of Sand City and Monterey

2. Monterey County

3. National Marine Sanctuary

b. Possible meetings:

1. Cities of Seaside, Pacific Grove, and Carmel-by-the-Sea

2. Monterey County

3. Pebble Beach Company

Status: On April 5, I met with Brad Damitz of the Monterey Bay National Marine Sanctuary to discuss the Sanctuary’s rules and practices for desalination projects. Damitz sent me a document titled “Guidelines for Desalination Plants in the Monterey Bay National Marine Sanctuary” that is marked “Draft Document: Do Not Cite or Distribute,” but that should be made public soon. These guidelines provide information intended for use by other regulatory agencies. Damitz said that the Sanctuary provides input to the Regional Water Quality Control Boards and the California Coastal Commission during those agencies’ review of desalination projects. Damitz informed me that although open ocean intakes and brine discharges are not preferred, they are not prohibited under Sanctuary rules. According to Damitz, the only absolute prohibitions within the Sanctuary are drilling or other exploration for oil, discharge of sewage, and disposal of dredged materials. I will provide copies of the Guidelines to Committee members when they become public, but in the meantime, they may review the copy I have.

I reviewed information on the Ocean View Plaza desalination project provided by the project proponent and the City of Monterey. During my conversation with Brad Damitz, I had asked about this project’s proposed pipelines in the Sanctuary and was informed of the Sanctuary’s policy in this regard. Damitz told me that although the Sanctuary staff had deemed the application for the Ocean View Plaza project complete, they had apparently not given final approval.

I reviewed the environmental and technical documents on the Sand City Desalination Project in the District’s files. I spoke with the City of Sand City’s engineer, Richard Simonich of Creegan & D’Angelo, to arrange a meeting to review additional information about the project and to learn if there is potential for installing feedwater intake facilities along the coast in Sand City and in adjacent areas. That meeting is scheduled for Friday May 7.

5. Analyze Information Collected and Prepare Report on Findings July 15, 2010

a. Review information collected.

b. Prepare conceptual project designs and cost estimates for each site identified.

c. Prepare report of findings, including assessment of feasibility of each site.

Status: To be done.

U:\staff\word\committees\WaterSupply\2010\20100503\02\item2_exh2a.doc