EXHIBIT 1-A

MONTEREY PENINSULA WATER MANAGEMENT DISTRICT

MEMORANDUM

DATE: June 24, 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: This task was completed in mid-May 2010.

3. Field Surveys Goal: July 15, 2010

a. Visit all sites that appear may have potential.

Status: To be done.

4. Meet with Agencies and Property Owners Goal: July 15, 2010

a. Meetings held:

1. City of Sand City

2. National Marine Sanctuary

b. Likely additional meeting:

2. City of Santa Cruz/Soquel Creek Water District

c. Possible meetings:

1. Diana Brooks, DRA

2. Cities of Seaside, Monterey, and Pacific Grove

3. Monterey County

4. Pebble Beach Company

5. Naval Post-Graduate School

Status: I reviewed the environmental and technical documents on the Sand City Desalination Project in the District’s files. On May 7, 2010 I met 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. Mr. Simonich provided information on the City of Sand City’s intake facilities but did not believe there are additional feasible intake sites in adjacent areas to the north. He did not have information on areas to the south.

I plan to meet with representatives of the City of Santa Cruz and Soquel Creek Water District to get an update on their desalination project, in particular what they have learned regarding the potential for subsurface intake facilities. As suggested by Director Markey, I have attempted to contact Diana Brooks of the CPUC Division of Ratepayer Advocates to get information regarding advanced technology for intake facilities used in Australia. To date I have been unable to engage with Ms. Brooks, due to her involvement in the Coastal Water Project proceeding.

6. Analyze Information Collected and Prepare Report on Findings August 2, 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.

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