AGENDA SPECIAL MEETING MONTEREY PENINSULA REGIONAL WATER AUTHORITY

6:00 p.m. Monday, August 27, 2012 Seaside Council Chambers 440 Harcourt Avenue, Seaside, CA 93955

1. Call to Order 2. Roll Call 3. Pledge of Allegiance 4. Public Comment for Items Not on the Agenda 5. Business Items (Discussion/Action) A. Authorize Retention of Kris Helm to evaluate Permit Requirements and Environmental Assessment as a component of the Analysis of the Three (3) Proposed Desalination Projects. 6. Adjournment

In compliance with the Americans with Disabilities Act (ADA), the City of Seaside does not discriminate against persons with disabilities and is an accessible facility. Any person with a disability who requires a modification or accommodation to be able to participate in this meeting is asked to contact the office of the City Clerk at thubbard@ci.seaside.ca.usor831.899.6707, no fewer than two (2) business days prior to the meeting to allow for reasonable arrangements. The City of Seaside Council Chambers is equipped with a portable microphone for anyone unable to come to the podium. Assisted listening devices are also available upon request. Agenda related writings or documents provided to the MPRWA are available for public inspection during the meeting or may be requested from the office of the City Clerk. This agenda is posted in compliance with California Government Code Section 54954.2(a) or Section 54956.

Kris Helm Consulting

(818) 653-4999

4218 Ben Avenue Studio City, California 91604 e-mail krishelm1@aol.com August 23, 2012

David J. Stoldt, General Manager Monterey Peninsula Water Management District 5 Harris Court Bldg G Monterey, CA 93940 Dear Mr. Stoldt: Consulting Services- Monterey Peninsula Regional Water Authority I am writing to offer consulting services to the Monterey Peninsula Regional Water Authority (Authority). This letter describes my understanding of the services to be provided, my capabilities to provide services and proposed fee structure. The Authority is interested in ensuring that the development of replacement water supplies for the region is done in a manner which best protects the publics interests. Toward this end the Authority is preparing expert analyses to assist the California Public Utilities Commission (CPUC)s evaluation of California American Waters proposed program to replace historic water diversions of water from the Carmel River with new water supplies. This program includes the development of new water supplies from an ocean desalination plant and other elements. The Authority is conducting due diligence on three alternative projects to deliver desalinated seawater to California American Water which may be considered by the CPUC as alternatives or variations to a desalination project previously analyzed and approved by the CPUC . The Authority has contracted with expert consultants to analyze the engineering aspects of the alternative projects so that technical considerations, capital and operating costs of the alternatives compared with one another on a consistent basis. However, the Authority seeks additional consulting services to help define the administrative processes for evaluation and approval of the alternative projects including compliance with environmental laws, obtaining required permits, and approval of project elements by the CPUC. Importantly, environmental review of the alternative projects has not been completed. The path forward for each of the projects is dependent upon the path to complete environmental review and this is potentially different with each of the alternative projects. Not only is the final project description for each alternative dependent upon additional environmental review, but the schedule for completion of each alternative

project may differ based upon the timeframe to complete review and obtain all required permits to achieve environmental compliance. Indeed, some or all of the projects may not be achievable within the timeframe required to replace existing diversions of water from the Carmel River. The CPUC will also determine how the California American Water will pay project costs and recover those costs from its customers. The Authority wants to ensure that the publics interest is best served in these deliberations. These interests include ensuring that the most cost effective alternative is developed and that the financing and translation of costs to rates and charges is efficient and fair. I propose to assist the Authority toward these two aims. I would analyze the path forward for development of the three alternative project elements and how that process relates to the CPUCs review and approval of California Americans participation in the project elements. As a first step I would analyze the path for the three alternative projects to review and achieve compliance with environmental laws encompassing both the review and compliance phases including obtaining required permits. This will likely affect how the Authority may view cost differences between the competing proposals and the schedule for completion. I would put my findings into a report and present my findings to the Authority Board. If required I would assist the Authority in presenting this information to the CPUC. My initial review suggests that the proposals to take water from the marine environment and discharge waste brine into the marine environment are fundamentally different between the three proposals and that environmental review and permit compliance with these elements of each project may dictate project schedule. Moreover, mitigation of the environmental impacts of these approaches significantly affects project costs. Thus evaluation of how the CPUC will comply with CEQA and how the projects will achieve full environmental and permit compliance is fundamental to the Authoritys review of the different projects. The CPUC will also consider how California American Water may recover ongoing costs of development of its program to develop adequate water supplies including the desalination element of this program. The Authority staff has conducted extensive evaluations of the costs of project development, financing costs and the rate surcharges necessary to recover development and project costs. I understand that I would assist the Authority in analyses and preparation of exhibits and or testimony related to the structure that the CPUC would create and the extent to which project costs should be recoverable from the ratepayers. But this work is not fully defined. I have extensive experience in the development of complex water resources projects. I believe that I can offer expert analyses of the path for development of each of these projects, including likely schedule and project risks. I have evaluated development of an ocean desalination project for the Los Angeles Department of Water and Power which included review the permitting and compliance program for most of the ocean desalination projects proposed in California. Thus I have expertise in what I consider to

be the most significant element of this analysis. My relevant experience is more fully described in the attached Statement of Qualifications and CV. I would propose to work on a time and material basis and I am available to work up to 90 hours per month on this assignment. I estimate that review of the environmental and permit compliance approach and schedule for the three project alternatives will take approximately 40- 50 hours and that an appropriate budget for my assistance through the CPUCs deliberation would be based upon approximately 65 hours. My billing rate is $200/hour. Perhaps an initial budget of $13,000 plus travel expenses is appropriate. I hope that this letter of interest meets your needs. I am available to discuss this further and could begin work immediately.

Very Truly Yours,

Kris Helm, Principal

Monterey Peninsula Ocean Desalination Project Statement of Qualifications Kris Helm Consulting has assisted both private and municipal clients in complex water resource development projects. Kris Helm has unique experience in the negotiation of development and water service agreements between public agencies and between private parties and public agencies. His practice has been largely devoted to assistance in business and permitting matters for large-scale water resource projects. Mr. Helms experience in project development affords an expert understanding of the path for development, including environmental review and compliance. The conceptualization, review and comparison of alternative projects to achieve a water supply objective is a normal part of development. He has experience with parallel-path development of project alternatives managing projectdevelopment risks while optimizing costs. Thus, Mr. Helm can afford comparison of different approaches to project development comprising differing costs, differing schedules and differing levels of risk. From 2004 2008, Kris Helm provided program management services to the City of Los Angeles Department of Water and Power in the early stages of development for a potential 25- 50 MGD ocean desalination plant at the Citys Scattergood Generating Station. This role included evaluation of strategies for development of the project, including assistance to obtain funding subventions, permits, public support and approval of oversight authorities. This work built upon experience in permitting power plants through the California Energy Commission and experience in the development of other types of desalination projects. Mr. Helm has an expert understanding of the complex regulations concerning water intake and discharge facilities for an ocean desalination plant. The fact that the alternatives under consideration have not completed environmental review complicates comparison of the projects on an apples-to-apples basis. Mr. Helm has performed due diligence for the acquisition or participation in complex projects in various states of development. He has assisted in successful purchase and sale of equity in projects. This has included assessments of the adequacy of project agreements and permits to successfully develop the projects and also an evaluation of the financial performance of the project based upon agreements and regulations applicable to the development. This has given him invaluable experience in the analyses of continuing development of projects started by others and the incorporation of new alternatives into projects in which the environmental review has previously be conducted but now requires additional review. Mr. Helm is an expert in water pricing and the evaluation of rate structures. He has reviewed rate structures of private utilities and assisted in the preparation of comments by cities on regulated utility rate structures. He has more extensive experience on the design of rate structures for public agencies including wholesale, retail and disaggregated rate structures.

KRIS HELM
4218 Ben Avenue Studio City, CA 91604 (818) 653-4999 krishelm1@aol.com

SUMMARY: Mr. Helm is a senior Water Resources Consultant with more than 30 years experience. Mr. Helms consulting practice is been built upon extensive management experience in water operations, water recycling and desalination, and a proven record in policy development, economic and financial analyses, and strategic planning. Mr. Helms recent practice included providing program management services to municipal clients and developing water resources solutions for large-scale power generation projects. He has unique experience in the negotiation of water service contracts between public agencies and between public agencies and private entities. Mr. Helm worked ten years for the Metropolitan Water District of Southern California, ultimately serving as a Branch Manager within the Water Resources Division as Groundwater Resources Specialist. Mr. Helm was the Manager of Planning and Operations at the West Basin Municipal Water District from 1992-1997. Mr. Helm has been a private consultant since 1997. RELEVANT EXPERIENCE:

From 2009 through the present, Mr. Helm has provided strategic planning assistance to the LADWP related to local water development. In that capacity Mr. Helm has assisted in the negotiation of recycled water service agreements with four large industrial customers. Mr. Helm assisted in the negotiation of a service agreement with West Basin MWD. Mr. Helm has coordinated efforts with the Water Replenishment District of Southern California and The Metropolitan Water District of Southern California to develop groundwater supplies resulting from the delivery of recycled water for replenishment and to industrial customers in lieu of the production of groundwater. From 2007 through 2009, Mr. Helm managed environmental review and served as lead negotiator for the development of recycled water supplies and imported water supplies for the Competitive Power Venture Sentinel Power Plant. From 2009 through the present, Mr. Helm assessed the potential delivery of recycled water to multiple industrial users as part of a consulting team conducting the LADWP Recycled Water Master Plan. In 2009-10, Mr. Helm represented Praxair in the sale of groundwater pumping rights to the City of Ontario and evaluated terms for potential delivery of recycled water. From 2004 through 2008, Mr. Helm provided program management services for the evaluation of the potential to develop an ocean desalination facility at the LADWP Scattergood Generating Station.

In 2010, Mr. Helm provided policy analyses for the U.S. Bureau of Land Management related to the potential use of BLM water assets for the development of large scale thermal-solar energy generation projects. In 2007, on behalf of Pacific Gas and Electric, Mr. Helm evaluated potential water supply strategies for large scale thermal-solar projects at multiple sites throughout California. In 2005-06, Mr. Helm provided imported water policy analyses to the Municipal Water District of Orange County, and acted as a staff representative on a temporary basis while a staff position was vacant. In 2001, Mr. Helm led a team providing comprehensive management services to the Water Replenishment District of Southern California. His services included provision of capital and O&M budget systems, development of a Financial Action Plan, and preparation of an independent engineers report for WRDs first issuance of bonded debt. On Behalf of Calpine Corporation, Mr. Helm served as the lead for the preparation and defense of an Application for Certification for the Russell City Energy Center (Hayward, CA, 2002), East Altamont Energy Center (Byron, CA, 2003) and Inland Empire Energy Center (Menifee, CA 2003). On Behalf of Calpine Corporation, Mr. Helm served as the lead negotiator for the acquisition of water supply for the Metcalf Energy Center (San Jose, CA, 2001), Russell City Energy Center (Hayward, CA, 2002), Central Valley Energy Center, (San Joaquin, CA 2002) Inland Empire Energy Center (Menifee, CA 2003) and East Altamont Energy Center (Byron, CA, 2003). On behalf of the Turlock Irrigation District, Mr. Helm led the preparation and defense of the Application for Certification of the Walnut Energy Center. In addition Mr. Helm served as the lead negotiator for the acquisition of recycled water supply, permit acquisition and compliance. (Turlock, CA 2004-2005). Mr. Helm has negotiated numerous water exchange and water wheeling agreements between public agencies including agreements between the Metropolitan Water District of Southern California and the Castaic Lake Water Agency..(Los Angeles, CA 1992)

EDUCATION: UNIVERSITY OF CALIFORNIA, Berkeley, California, August, 1980 Bachelor of Arts, Economics

CONTRACT FOR PROFESSIONAL SERVICES Agreement for Comparison of Desalination Project Costs, Evaluation of Project Schedule, and Analysis of Alternative Financing Options

THIS AGREEMENT is executed this 27th day of August 2012, by and between the Monterey Peninsula Regional Water Authority, a California Joint Powers Agency, hereinafter called "MPRWA", and Kris Helm Consulting, hereinafter called "Consultant". IT IS HEREBY MUTUALLY AGREED AS FOLLOWS: 1. Scope. Consultant hereby agrees to provide to the MPRWA , as the scope of services under this Agreement, all labor and materials necessary to conduct an evaluation of permitting, environmental assessment, and financing issues with respect to a comparison of desalination project costs and evaluation of project schedule presently being undertaken by the firm Separation Processes Inc. (SPI) as further described in the scope of services attached hereto as Exhibit A, especially as related to items 5.1, 5.4, 5.5, and 5.6. The scope of Consultants work may be expanded at the direction of MPRWA. Consultant will coordinate work tasks and work product with SPI and combine final product into a common final report. 2. Timely Work. Consultant shall perform all tasks in a timely fashion, as set forth more specifically in paragraph 3 below. Failure to so perform is hereby deemed a material breach of this Agreement, and MPRWA may terminate this Agreement with no further liability hereunder, or may agree in writing with Consultant to an extension of time. 3. Term. The work under this Agreement shall commence August 27, 2012 and shall be completed by October 31, 2012 unless MPRWA grants a written extension of time as forth in paragraph 2 above. 4. Compensation. MPRWA agrees to pay and Consultant agrees to accept as full and fair consideration for the performance of this Agreement, compensation as set forth in Consultants Proposal (Exhibit B), in a total amount not to exceed Thirteen Thousand Dollars ($13,000), plus travel expenses up to $1,000. This amount may be increased at the direction of MPRWA if the scope of work is expanded. Compensation under this Agreement shall become due and payable 30 days after MPRWAs approval of Consultants submission of monthly written invoices to the Chairman of the MPRWA Technical Advisory Committee. Written invoices shall clearly itemize each charge and shall include a copy of timesheets or invoices from subconsultants or other appropriate documentation to substantiate itemized charges. The payment of any compensation to Consultant hereunder shall be contingent upon performance of the terms and conditions of this Agreement to the satisfaction of the MPRWA Contract Administrator. If MPRWA determines that the work set forth in the written invoice has not been performed in accordance with the terms of this Agreement, MPRWA shall not be responsible for payment until such time as the work has been satisfactorily performed. 5. Additional Services. In the event that MPRWA should request additional services not covered by the terms of this Agreement, said services will be provided by Consultant and paid for by MPRWA only after a fee for said services has been agreed upon between Consultant and MPRWA Contract Administrator and the Contract Administrator provides written authorization for the additional work.

6. Meet and Confer. Consultant agrees to meet and confer with MPRWA or its agents or employees with regard to services as set forth herein as may be required by MPRWA Contract Administrator to insure timely and adequate performance of this Agreement. 7. clause: To the fullest extent permitted by law (including, without limitation, California Civil Code Sections 2782 and 2782.6), Consultant shall defend (with legal counsel reasonably acceptable to the MPRWA), indemnify and hold harmless the MPRWA and its officers, designated agents, departments, officials, representatives and employees (collectively "Indemnitees") from and against claims, loss, cost, damage, injury expense and liability (including incidental and consequential damages, court costs, reasonable attorneys' fees, litigation expenses and fees of expert consultants or expert witnesses incurred in connection therewith and costs of investigation) to the extent they arise out of, pertain to, or relate to, the negligence, recklessness, or willful misconduct of Consultant, any Subconsultant, anyone directly or indirectly employed by them, or anyone that they control (collectively "Liabilities"). Such obligations to defend, hold harmless and indemnify any Indemnitee shall not apply to the extent that such Liabilities are caused in part by the negligence, or willful misconduct of such Indemnitee. Notwithstanding the provisions of the above paragraph, Consultant agrees to indemnify and hold harmless the MPRWA from and against any and all claims, demands, defense costs, liability, expense, or damages arising out of or in connection with damage to or loss of any property belonging to Consultant or Consultant's employees, contractors, representatives, patrons, guests or invitees. Consultant further agrees to indemnify MPRWA for damage to or loss of MPRWA of Monterey property to the proportionate extent they arise out of Consultant's negligent performance of the work associated with this agreement or to the proportionate extent they arise out of any negligent act or omission of Consultant or any of Consultant's employees, agents, contractors, representatives, patrons, guests or invitees; excepting such damage or loss arising out of the negligence of the MPRWA. 8. Insurance. Consultant shall submit and maintain in full force all insurance as described herein. Without altering or limiting Consultant's duty to indemnify, Consultant shall maintain in effect throughout the term of this Agreement a policy or policies of insurance with the following minimum limits of liability: Commercial general liability insurance including but not limited to premises, personal injuries, bodily injuries, products, and completed operations, with a combined single limit of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate. Professional Liability Insurance. Consultant shall maintain in effect throughout the term of this Agreement professional liability insurance with limits of not less than $1,000,000 per claim and $2,000,000 in the aggregate. Consultant will either maintain or cause to be maintained professional liability coverage in full force or obtain extended reporting (tail) coverage (with the same liability limits) for at least three years following MPRWA's acceptance of the work. Indemnification. Consultant hereby agrees to the following indemnification

Commercial automobile liability insurance covering all automobiles, including owned, leased, non-owned, and hired automobiles, used in providing services under this Agreement, with a combined single limit of not less than $1,000,000 per occurrence. Other Insurance Requirements A. All insurance required under this Agreement must be written by an insurance company either: admitted to do business in California with a current A.M. Best rating of no less than A:VI; or an insurance company with a current A.M. Best rating of no less than A:VII.

Exception may be made for the State Compensation Insurance Fund when not specifically rated. B. Each insurance policy required by this agreement shall be endorsed to state that MPRWA shall be given notice in writing at least thirty days in advance of any cancellation thereof, except 10-day notice for nonpayment of the premium. The general liability and auto policies shall: Provide an endorsement naming the MPRWA, its officers, officials, and employees as additional insureds under an ISO CG 20 10 07 04 or ISO 20 37 07 04 or their equivalent. Provide that such insurance is primary and non-contributing insurance to any insurance or self-insurance maintained by the MPRWA. Contain a "Separation of Insureds" provision substantially equivalent to that used in the ISO form CG 00 01 10 01 or their equivalent. Provide for a waiver of any subrogation rights against the MPRWA via an ISO CG 24 01 10 93 or its equivalent. Prior to the start of work under this Agreement, Consultant shall file certificates of insurance and endorsements evidencing the coverage required by this agreement with the Contract Administrator. Consultant shall file a new or amended certificate of insurance promptly after any change is made in any insurance policy which would alter the information on the certificate then on file. Neither the insurance requirements hereunder, nor acceptance or approval of Consultants insurance, nor whether any claims are covered under any insurance, shall in any way modify or change Consultants obligations under the indemnification clause in this Agreement, which shall continue in full force and effect. Notwithstanding the insurance requirements contained herein,
3

C.

D.

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Consultant is financially liable for its indemnity obligations under this Agreement. F. Any deductibles or self-insured retentions must be declared to and approved by the MPRWA. At the option of the MPRWA, either: the insured shall reduce or eliminate such deductibles or self-insured retentions as respects the MPRWA, its officers, officials, employees and volunteers; or Consultant shall provide a financial guarantee satisfactory to the MPRWA guaranteeing payment of losses and related investigations, claim administration, and defense expenses.

9. Ownership of Work. Upon completion of the work under this Agreement, ownership and title to all materials and deliverables produced as part of this Agreement will automatically be vested in the MPRWA and no further agreement will be necessary to transfer ownership to MPRWA. 10. Licensing. Consultant represents that it is properly licensed to perform the work specified under this Agreement, including but not limited to possession of a current MPRWA business license. 11. Termination. This agreement may be terminated by either party upon fifteen [15] days written notice to the other party. In the event of such termination, MPRWA shall pay Consultant for all services performed to the satisfaction of MPRWA to the date of receipt of notice of termination. An itemized statement of the work performed to the date of termination shall be submitted to the MPRWA. In ascertaining the services actually rendered hereunder up to the date of termination of this agreement, consideration shall be given to both completed work and work in process of completion and to complete and incomplete drawings and other documents whether delivered to the MPRWA or in the possession of the Consultant. 12. Agency. In performing the services specified under this Agreement, Consultant is hereby deemed to be an independent Consultant and not an agent or employee of MPRWA. 13. Authority of the Contract Administrator. The Consultant shall perform all necessary services provided under the contract and outlined in the proposal and shall do, perform, and carry out said work in a satisfactory and proper manner as determined by and to the satisfaction of the Contract Administrator. The Contract Administrator reserves the right to make changes, additions or deletions, of the scope of work as deemed to be necessary or advisable to implement and carry out the purposes of the contract. The Contract Administrator is authorized to execute the change orders. 14. Responsibility of Consultant. By executing this agreement, Consultant represents and states to MPRWA that he possesses or will arrange to secure from others all necessary professional capabilities, experience, resources and facilities necessary to provide to MPRWA the services contemplated under this agreement. Consultant further warrants that he will follow the current generally accepted practices of the profession to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding the project for which services are rendered under this agreement. 15. Materials and Equipment. Consultant shall furnish at his own expense all materials and equipment necessary to carry out the terms of this agreement.

16. Digital Files. Consultant shall furnish copies of all deliverables on compact disks (for example, final report) in digital format. Files shall be compatible with the current versions used by PC computers. 17. Audit Authority. Consultant shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this agreement; the accounting and control systems shall be satisfactory to the MPRWA. The MPRWA and the MPRWAs auditor shall be afforded access to the Consultants records, books, correspondence and other data relating to this agreement. The Consultant shall preserve these records, books, correspondence and other data relating to this agreement for a period of four (4) years after final payment, or for such longer period as may be required by law. In addition, Consultant agrees to make said records, books correspondence and other data relating to this agreement available to MPRWA at MPRWAs principal place of business upon seventy-two (72) hours written notice. The Contract Administrator, or his or her designee, shall at all times have the right to inspect the work, services, or materials. Consultant shall furnish all reasonable aid and assistance required by MPRWA for the proper examination of the work or services and all parts thereof. Such inspection shall not relieve Consultant from any obligation to perform said work or services strictly in accordance with the specifications or any modifications thereof and in compliance with the law. 18. Notices. All notices herein provided to be given, or which may be given by either party to the other, shall be considered fully received when made in writing and deposited in the United States mail, certified and postage prepaid, and addressed to the respective parties as follows: Monterey Peninsula Regional Water Authority Chuck Della Sala, President Contract Administrator c/o Monterey City Clerk Monterey City Hall Monterey, CA 93940 (831) 646-3935 Invoices to: David Stoldt General Manager Monterey Peninsula Water Management District PO Box 85 Monterey, CA 93942 (831) 658-5650 Kris Helm Consulting 4218 Ben Avenue Studio City, CA 91604 (818) 653-4999 19. Entire Agreement. This Agreement constitutes the entire Agreement between the parties hereto and supersedes any and all prior agreements, whether oral or written, relating to the subject matter thereof. Any modification of this Agreement will be effective only if it is in writing signed by both parties hereto.

20. Validity. If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions will continue in full force without being impaired or invalidated in any way. 21. Assignment of Interest. The duties under this Agreement shall not be assignable, delegable, or transferable without the prior written consent of MPRWA. Any such purported assignment, delegation, or transfer shall constitute a material breach of this Agreement upon which MPRWA may terminate this Agreement and be entitled to damages. 22. Conflict of Interest. Consultant hereby certifies that it does not now have, nor shall it acquire any financial or business interest that would conflict with the performance of services under this Agreement. 23. Counterparts. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts. 24. Laws. Consultant agrees that in the performance of this Agreement it will reasonably comply with all applicable State, Federal and local laws and regulations. This Agreement shall be governed by and construed in accordance with the laws of the State of California and the MPRWA. 25. Venue. Should either party to this Agreement bring legal action against the other (formal judicial proceeding, mediation, or arbitration,) the venue for the matter shall be Monterey County, California. IN WITNESS WHEREOF, this Agreement is entered into by the parties hereto on the day and year first above written in Monterey, California.

MPRWA

CONSULTANT

__________________________ Chuck Della Sala, President

Approved as to form: _______________________ Attorneys Office

__________________________ Kris Helm

EXHIBIT A SCOPE OF SERVICES Each of the proponents of the three desalination projects was asked by the Authority to respond to a specific set of questions, including cost-related inquiries. Each proponents response is included as an attachment to this solicitation. The responses have supporting documentation in various stages of development. Respondents will need to address the variations in data quality. For example, project proponents were asked to examine two plant sizes: 9,000 acre-feet or 5,400 acre-feet however, the proponents did not each provide such data. Responding Contractors may also review information from a proponents website or contact the project proponent directly. Proponent information is as follows: California American Water Company Richard Svindland DeepWater Desal, LLC Brent Constantz Peoples Moss Landing Desal George Schroeder www.watersupplyproject.org Richard.Svindland@amwater.com www.deepwaterdesal.com brent@dwdesal.com

916-568-4296

831-632-0616

www.thepeoplesmosslandingdesal.com ddgeo@sbcglobal.net 831-601-4878

The Contractor will be retained to provide an independent, unbiased, third-party assessment of the three proposed desalination projects. The selected contractor will provide a report and attend at least one presentation to the MPRWA board. There are six specific items as to project scope, as described below. 5.1 Initial Scoping and Constraints Analysis In order to reduce overall cost and scope of work, the Contractor is asked to first evaluate each project at a high level and ascertain if there are any key constraints that would render a project unlikely to be implemented by January 1, 2017. The criteria shall be determined by the Contractor, but might include technical feasibility, reliability, permitting, litigation risk, environmental factors, regulatory, schedule, or cost. 5.2 Comparison of Cost Estimates for the Three Desalination Projects For projects that were not eliminated under 5.1 above, Contractor shall review the following as presented by the project proponents: Capital costs Operating costs Unit costs (especially $ per acre foot) Energy consumption/efficiency/cost Quality of cost estimate (conceptual, preliminary, bid, etc.) Age of cost estimate

Compare the proposed projects based on total capital cost, annual operating plus capital cost, and annual unit cost based on water delivered to the Peninsula. The Contractor will identify differences in each proponents cost methodology and attempt to normalize or adjust for differences in order to provide more directly comparable results. The goal is an apples-toapples comparison. It is desired to have cost comparisons for projects of two sizes: (a) one that

delivers 5,500 acre-feet per year to the Peninsula, and (b) one that delivers 9,000 acre-feet per year. In the analysis, identify key differences in each proponents methodology and attempt to adjust therefor across all projects in order to compare on a common basis. Attention should be paid to use of contingencies, implementation costs, adjustments for high- or low-end of cost range, and so on. If a projects costs are based on a portion of a larger project, please identify the risks associated with a larger project and the potential impact on cost if built as a stand-alone facility. Discuss the primary drivers for differences in cost between the projects. Identify assumptions or conclusions of any proponent that are questionable or inconsistent with other proponents; inconsistent assumptions should be adjusted where possible and cost figures modified accordingly. 5.3 Identify and Isolate Project Differences Contractors are asked to identify major differences in project features that are not the core desalination components that is, if all desalination facilities are assumed to all be the same for each of the projects, what are the key differences between the projects in the areas of intake, pretreatment, outfall, and transmission pipeline? Have the proponents used consistent cost assumptions on things like pipe, right-of-way, and other items? Can the projects be compared on the non-desalination aspects? 5.4 Evaluation of Schedule Please review each projects timeline and provide an opinion as to the reasonableness of each. 5.5 Evaluation of Financing Options Examine each proponents financing assumptions and comment where applicable. Are there assumptions or conclusions in the proponents materials with which you disagree? Why? How would cost estimates for each project be affected? 5.6 Workshop/Presentation/Final Report In addition to a written report, the Contractor is expected to present its findings to the MPRWA at a meeting to be scheduled.

EXHIBIT B

Kris Helm Consulting

(818) 653-4999

4218 Ben Avenue Studio City, California 91604 e-mail krishelm1@aol.com August 23, 2012

David J. Stoldt, General Manager Monterey Peninsula Water Management District 5 Harris Court Bldg G Monterey, CA 93940 Dear Mr. Stoldt: Consulting Services- Monterey Peninsula Regional Water Authority I am writing to offer consulting services to the Monterey Peninsula Regional Water Authority (Authority). This letter describes my understanding of the services to be provided, my capabilities to provide services and proposed fee structure. The Authority is interested in ensuring that the development of replacement water supplies for the region is done in a manner which best protects the publics interests. Toward this end the Authority is preparing expert analyses to assist the California Public Utilities Commission (CPUC)s evaluation of California American Waters proposed program to replace historic water diversions of water from the Carmel River with new water supplies. This program includes the development of new water supplies from an ocean desalination plant and other elements. The Authority is conducting due diligence on three alternative projects to deliver desalinated seawater to California American Water which may be considered by the CPUC as alternatives or variations to a desalination project previously analyzed and approved by the CPUC . The Authority has contracted with expert consultants to analyze the engineering aspects of the alternative projects so that technical considerations, capital and operating costs of the alternatives compared with one another on a consistent basis. However, the Authority seeks additional consulting services to help define the administrative processes for evaluation and approval of the alternative projects including compliance with environmental laws, obtaining required permits, and approval of project elements by the CPUC. Importantly, environmental review of the alternative projects has not been completed. The path forward for each of the projects is dependent upon the path to complete environmental review and this is potentially different with each of the alternative projects. Not only is the final project description for each alternative dependent upon additional environmental review, but the schedule for completion of each alternative project may differ based upon the timeframe to

complete review and obtain all required permits to achieve environmental compliance. Indeed, some or all of the projects may not be achievable within the timeframe required to replace existing diversions of water from the Carmel River. The CPUC will also determine how the California American Water will pay project costs and recover those costs from its customers. The Authority wants to ensure that the publics interest is best served in these deliberations. These interests include ensuring that the most cost effective alternative is developed and that the financing and translation of costs to rates and charges is efficient and fair. I propose to assist the Authority toward these two aims. I would analyze the path forward for development of the three alternative project elements and how that process relates to the CPUCs review and approval of California Americans participation in the project elements. As a first step I would analyze the path for the three alternative projects to review and achieve compliance with environmental laws encompassing both the review and compliance phases including obtaining required permits. This will likely affect how the Authority may view cost differences between the competing proposals and the schedule for completion. I would put my findings into a report and present my findings to the Authority Board. If required I would assist the Authority in presenting this information to the CPUC. My initial review suggests that the proposals to take water from the marine environment and discharge waste brine into the marine environment are fundamentally different between the three proposals and that environmental review and permit compliance with these elements of each project may dictate project schedule. Moreover, mitigation of the environmental impacts of these approaches significantly affects project costs. Thus evaluation of how the CPUC will comply with CEQA and how the projects will achieve full environmental and permit compliance is fundamental to the Authoritys review of the different projects. The CPUC will also consider how California American Water may recover ongoing costs of development of its program to develop adequate water supplies including the desalination element of this program. The Authority staff has conducted extensive evaluations of the costs of project development, financing costs and the rate surcharges necessary to recover development and project costs. I understand that I would assist the Authority in analyses and preparation of exhibits and or testimony related to the structure that the CPUC would create and the extent to which project costs should be recoverable from the ratepayers. But this work is not fully defined. I have extensive experience in the development of complex water resources projects. I believe that I can offer expert analyses of the path for development of each of these projects, including likely schedule and project risks. I have evaluated development of an ocean desalination project for the Los Angeles Department of Water and Power which included review the permitting and compliance program for most of the ocean desalination projects proposed in California. Thus I have expertise in what I consider to be the most significant element of this analysis. My relevant experience is more fully described in the attached Statement of Qualifications and CV.

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I would propose to work on a time and material basis and I am available to work up to 90 hours per month on this assignment. I estimate that review of the environmental and permit compliance approach and schedule for the three project alternatives will take approximately 4050 hours and that an appropriate budget for my assistance through the CPUCs deliberation would be based upon approximately 65 hours. My billing rate is $200/hour. Perhaps an initial budget of $13,000 plus travel expenses is appropriate. I hope that this letter of interest meets your needs. I am available to discuss this further and could begin work immediately.

Very Truly Yours,

Kris Helm, Principal

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