DRAFT MINUTES MONTEREY PENINSULA REGIONAL WATER AUTHORITY Thursday, August 9, 2012 1.

CALL TO ORDER The MPRWA regular meeting of Thursday, August 9, 2012 was called to order at 6:07 p.m. by President Chuck Della Sala, at the Seaside City Council Chambers. 2. ROLL CALL AND INTRODUCTIONS Roll call was taken and a quorum established with the following members in attendance: PRESENT: President Chuck Della Sala; Vice President Felix Bachofner; Directors Jason Burnett; Jerry Edelen; Carmelita Garcia; David Pendergrass. Others: Interim Executive Director, John Dunn; Interim Agency Attorney, Don Freeman; TAC Representative, George Riley; Acting Agency Clerk, Samantha Sakhrani 3. PLEDGE OF ALLEGIANCE Vice President Bachofner led the attendees in the Pledge of Allegiance. 4. REPORTS FROM MEMBERS OF THE AUTHORITY BOARD AND STAFF Director Edelen: The Authority has $14, 505.88 in the bank. Vice-President Bachofner: Area events. President Della Sala: The Ad Hoc Committee, composed of President Della Sala and Director Burnett, met with Supervisor Potter and reviewed the letter that was sent and signed by the Authority, asking that Supervisor Potter address the matter of the MPRWA and County participation; spoke to 34% of water usage within the district is used by residents in the unincorporated area; Supervisor Potter agreed to have the item added to the next regularly scheduled meeting of the Supervisors, to be held on August 28, 2012. President Della Sala: Director Burnett and President Della Sala attended a meeting with CalAm representatives where discussions included: possibility of roles the Water Authority could play in regard to a future Governance Committee; in regard to groundwater recharge, the possibility of the Authority being part of the decision making process in regard to the project being a cooperative effort or not, and; the possibility of the Authority weighing in on the decision regarding the procurement of the contractor to construct the Desal Project. More discussions will follow.

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Director Burnett: He and President Della Sala attended the Cal Am meeting and Mr. Rob MacLean was willing to engage on one of the high priorities of the Authority, the question of governance; surmise CalAm recognizes the value that a public agency can provide through a level of transparency and accountability. 5. RECEIVE REPORT FROM TAC AND PROVIDE DIRECTION AS NEEDED In Mr. David Stoldts absence, Mr. George Riley presented the report on his behalf and reported that TAC is operating with two (2) vacancies and looking forward to finding replacements; Risk Assessment Plan still being discussed. 6. PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA President Della Sala opened the floor for public comment at 6:14 p.m. Doug Willham Asked Mayors to appoint a financial consultant to review upcoming reports and information; asked Authority to continue conversations with other potential water providers. Nelson Vega Asked Mayors to look at similarities and differences of various projects for analysis. John Narigi The Risk Grid will serve the MPRWA and public; advised TAC had requested updates from each of proposals and received subsequent updates. George Riley Encouraged Mayors as individuals to write to Cal Am in regard to funding resources for San Clemente Dam.

No further comments, public comment closed. 7. APPROVAL OF MINUTES None. President Della Sala stated he anticipates that there will be minutes to approve at the next regular scheduled meeting. A discussion ensued regarding the staffing required for minutes for the MPRWA and the requirements regarding the recording of the Ad Hoc TAC Committees. City Attorney Don Freeman advised no legal requirement for recording Ad Hoc Committee meetings and as a norm, Ad Hoc Committees are not recorded. Director Garcia asked to be informed of the next Ad Hoc TAC Committee meeting and requested that Ad Hoc Committee Meetings be recorded. Chairman Della Sala opened the floor for public comment.

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Nelson Vega supports formal structure including permanent Executive Director and in the absence, meetings be recorded.

No further comment, public comment closed. Attorney Don Freeman reminded the MPRWA Directors that the purpose of the Ad Hoc was to bring information back to MPRWA and no more than half the directors should be in attendance. A discussion ensued regarding the TAC Ad Hoc Committee. The TAC Ad Hoc Committee will be a part of the next MPRWA agenda. 8. BUSINESS ITEMS A. REPORTS BY CITIES ON CONTRIBUTIONS TO MPRWA BUDGET REPORT: EACH CITY REPRESENTATIVE Director Burnett: Carmel City Council allocated $15,000 into their budget in June; has asked the City Manager to add additional sum of $5,000 -10,000 to be placed on the agenda at next regular scheduled meeting. Director Garcia: Pacific Grove City Council will be discussing at August 15, 2012 meeting. Vice President Bachofner: Seaside City Council will be discussing at the next scheduled City Council meeting. Director Pendergrass: Sand City approved allocated funds and requested an invoice or statement for the amount due, in order to remit payment. Director Edelen: Del Rey Oaks approved allocated funds. President Della Sala: City of Monterey approved allocated funds. President Della Sala opened the floor for public comment. Nelson Vega spoke on the topic of a Seaside City Council meeting and asked that more water be allocated for development in Seaside. Safwat Malek - Concerned that cities paying to fund the MPRWA; asked that the Directors consider having each proposal be treated similar to development projects in their cities and have the individuals bringing forward water project proposals, pay fees to the MPRWA.

No further comments, public comment closed. The Directors commented on the public comment.

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B. PROVISION OF ADMINISTRATIVE AND LEGAL SERVICES (1) Independent Legal Services President Della Sala introduced Monterey City Attorney, Christine Davi. Ms. Davi presented the draft Request for Qualification for Legal Services for the Monterey Peninsula Regional Water Authority and responded to questions/comments by the Directors. A discussion ensued regarding legal services, need for legal counsel at ad hoc committee meetings and billing oversight. President Della Sala opened the floor for public comment. Sue McCloud - Requested that TAC Ad Hoc Meeting be recorded for transparency and in case the meeting would need review by legal counsel.

No further comments, public comment closed. M/S/C (BURNETT/BACHOFNER) APPROVE THE ISSUE OF AN RFQ AND HAVE THE AD HOC COMMITTEE REVIEW THE PROPOSALS. THE MOTION CARRIED UNANIMOUSLY WITH SIX (6) AFFIRMATIVE VOTES (6-0-0-0) President Della Sala introduced the next item and recused himself in the interest of public perception since the proposal was being submitted by the City of Monterey. (2) Clerical Services Discussion/Action Vice President Bachofner introduced Bonnie Gawf, Monterey City Clerk/Information Resources Director Ms. Gawf shared a Memorandum that outlined the proposal to provide clerk of the board services to MPRWA. Vice President Bachofner opened the meeting to public comment. Helen Rucker: Requested that if approved, the District Clerk provide e-mail list to City of Monterey for continuity of receiving agendas. Sue McCloud: Reminded the Authority total of at least four (4) meetings and not two (2) are scheduled per month.

No further comments, public comment closed. M/S/C (BURNETT/PENDERGRASS) TO APPROVE AND ACCEPT THE CITY OF MONTEREYS PROPOSAL OF CLERICAL SERVICES AS DESCRIBED ON THEIR PROPOSAL. MOTION CARRIED 5-0-1 (DELLA SALA) -0.

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(3) Administrative Services Discussion/Action President Chuck Della Sala introduced Interim Executive Director John Dunn. Interim Executive Director Dunn presented the Memorandum on MPRWA Executive Director/Administration. President Della Sala opened the floor to public comment. Bill Hood Has submitted proposal for services; asked Directors to consider compensating this position versus a volunteer position. Nelson Vega Asked for a range of compensation for an independent candidate; supports someone who has not been affiliated with any city in the past. Sue McCloud Asked for clarification on differences between the Executive Director and Clerk positions; supports the establishment of an Ad Hoc Finance Committee that the Executive Director should attend.

No further comment, public comment closed. Staff responded to questions from the public. M/S/C (DELLA SALA/BURNETT) APPROVE MR. DUNN TO SEND OUT THE RFP AND AGREE TO HAVE THE CITY OF MONTEREY CONDUCT THE INTERVIEWS; APPOINT AN AD HOC COMMITTEE THAT DOES NOT INVOLVE PRESIDENT DELLA SALA OR DIRECTOR BURNETT TO MAKE A RECOMMENDATION. MOTION CARRIED (6-0-0-0). President Della Sala adjourned the meeting for a ten (10) minute break at 7:48 pm. President Della Sala reconvened the meeting at 7:58 p.m. C. PREPARATION FOR NEXT STEPS IN CPUC PROCESS Seaside City Attorney, Don Freeman presented the report. President Della Sala opened the floor to public comment. Nelson Vega Questioned the payment of tax-payers dollars; asked the Authority to consider collaborating with other agencies protecting tax-payers for an analysis of best course of action.

No further comment, public comment closed.

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D. AWARD OF CONTRACT FOR DESALINAZATION PROJECTS

EVALUATION

OF

THREE

(3)

Technical Advisory Committee (TAC) representative, Mr. George Riley, presented the report. Other TAC members were present to answer questions. Clarifying questions were asked and responded to. President Della Sala opened the floor to public comment. Keith Israel Concerned that finance and environmental issues left out of the proposal. Tom Rowley, Monterey Peninsula Taxpayers Association Concerned that report is not complete and does not allow for further analysis; asked that future agenda items have higher importance items at the beginning of meetings. Nelson Vega Concerned with the process and priorities. Rick Riedl, TAC member Offered clarification on selection made.

No further comment, public comment closed. M/S/C (BURNETT/DELLA SALA) AUTHORIZE TAC TO HIRE A SEPARATION PROCESSES, INC. (SPI) OF CARLSBAD, CALIFORNIA, AND APPROVE CONTRACT. DIRECT TAC TO ADDRESS SPI IN REGARD TO THE FINANCIAL QUESTIONS THAT WERE NOT ANSWERED AND REPORT THE FINDINGS TO THE AUTHORITY AT A FUTURE MEETING TO DETERMINE WHETHER IT IS NECESSARY TO HIRE SUB-CONTRACTOR(S). MOTION CARRIED 5-1 (GARCIA) -0-0. E. CONSIDERATION OF NEED FOR FURTHER POLICY CLARIFICATION Interim Executive Director, John Dunn, explained that the item was added to the agenda in preparation of the CPUC presentation, to address policy issues and present the opportunity for the Authority to refine the discussion on Governance, Finance, and Ownership. The Directors made comments on the item and asked that a standing item added to the agenda and that key governance issues be identified by individual Directors. President Della Sala opened the meeting to public comment. Nelson Vega Asked Directors to stand behind the City of Seasides water needs as a policy question; asked that water by inexpensive whether public or private; that as much water be available as the public is willing to pay for. President Della Sala closed the meeting to public comment.

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9. INFORMATION ITEMS A. APPOINTMENT BY CHAIR OF AD HOC COMMITTEE President Della Sala advised two (2) Ad Hoc Committees were going to be appointed following the meeting; one to review Legal Services and another to review the Administrative Services proposal that are submitted. President Della Sala opened and the floor for public comment. There was none and public comment closed. 10. SUGGESTED ITEMS FOR NEXT OR FUTURE AGENDA The suggested items recommended for future agendas included: prioritizing the agenda; discussion on whether or not to record Ad Hoc Committee meetings; and a discussion on Governance, Finance, and Ownership. 11. DETERMINE TIME AND PLACE OF NEXT MEETING The next scheduled regular meeting of the Monterey Peninsula Regional Water Authority will be held at 6:00 p.m. at the Seaside City Hall Council Chambers on Thursday, August 23, 2012. 12. ADJOURNMENT The meeting was adjourned at 8:50 p.m. Respectfully submitted, _______________________________ Samantha Sakhrani Acting Agency Clerk ATTEST: _____________________________ Chuck Della Sala President