WATER SUPPLY PLANNING COMMITTEE
ITEM:		ACTION ITEM
2.	DISCUSS AND RECOMMEND DISTRICT POSITION ON CAL-AM APPLICATION RE: GOVERNANCE, OWNERSHIP, AND FINANCE
Meeting Date:			August 15, 2012	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			David J. Stoldt	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: Intervenor testimony for Cal-Am Application 12-04-019 was originally scheduled for September 18^th. On Friday August 3^rd ALJ Weatherford notified the Parties that date would be extended, but a new date has not been set. The District must formulate its principle arguments, especially as they relate to governance, ownership, and finance.

RECOMMENDATION: The Committee should discuss and recommend a position to the Board on each of the following items. The Committee may also wish to develop recommendations on additional items it may identify.

DISCUSSION:

A. What are the key areas that governance should address? (e.g. transparency, budget and rate impacts, operation planning, integrated management of ground and surface water, regulating future supply, etc)

B. What are the differences between an Operating Committee, an Advisory Committee, and an Oversight Committee such as the Water Quality and Operations Committee of the Salinas Valley Reclamation Plant?

C. Is there a governance structure that might be acceptable to Cal-Am and the Cities that the District wants to pursue?

D. Shall the District demand public ownership or simply offer to be the public owner should a public owner be desired by all parties?

E. Should the District offer to be the Public “Partner” for financial issues?

F. If State Revolving Funds require a public partner, will the District serve in that role?

G. Would the District offer to substitute its public credit as a backstop to Cal-AM’s creditworthiness in order to reduce the cost of Cal-Am’s debt? This might require the use of a “stand-by water purchase agreement,” a “rate covenant,” and other standing commitments.

H. Would the District consider a debt issuance of its own, secured by Prop 218 water supply charges, to make a “contribution” to the project in order to reduce Cal-Am equity and rate base?

I. Would the District consider a debt issuance of its own, secured by a surcharge on Cal-Am bills, to make a “contribution” to the project in order to reduce Cal-Am equity and rate base?

J. Does the District have an opinion on Surcharge 2 “pay-as-you-go” financing for a portion of the project?

K. Does the District have an opinion on the sizing of the Project? (Overall projected sizing of proposed Monterey Peninsula Water Supply Project is 15,250 acre-feet)

L. Does the District have an opinion on stranded costs for the Regional Desalination Project?

M. Does the District have on opinion on the future capital costs of source well replacement?

N. What, if anything, does the District wish to say about the capacity of grey water or cisterns by 12/31/16 – an issue raised during the workshops?

O. What, if anything, does the District wish to say about the capacity of additional conservation by 12/31/16 – an issue raised during the workshops?

EXHIBITS

2-A Summary of Cal-Am Financing Plans

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