Agenda

Monterey Peninsula Regional Water Authority (MPRWA)

Special Meeting

6:00 PM, Wednesday, September 12, 2012
Few Memorial Hall
580 Pacific Street
Monterey, California

ROLL CALL

PLEDGE OF ALLEGIANCE

PUBLIC COMMENTS
PUBLIC COMMENTS allows you, the public, to speak for a maximum of three minutes on any
subject which is within the jurisdiction of the MPRWA and which is not on the agenda. Any person
or group desiring to bring an item to the attention of the Board may do so by addressing the Board
during Public Comments or by addressing a letter of explanation to: City Clerk, City Hall,
Monterey, CA 93940. The appropriate staff person will contact the sender concerning the details.

REPORTS FROM BOARD DIRECTORS AND STAFF

1. Receive Report from Technical Advisory Committee (TAC) - Stoldt

a. Receive Preliminary Scoping and Constraints Evaluation Memorandum from SPI
Consultants (Discussion)

b. Consider Qualitative Risk Evaluation (Discussion)

2. Consider Public Governance, Finance and Ownership of California American Water
(CalAm) Project (Discussion/Action/Direction)

APPROVAL OF MINUTES

3. August 23, 2012

ADJOURNMENT



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Agenda related writings or documents provided to the MPRWA are available for public
inspection during the meeting or may be requested from the Monterey City Clerks Office at 580
Pacific St, Room 6, Monterey, CA 93940. This agenda is posted in compliance with California
Government Code Section 54954.2(a) or Section 54956.


Date: September 12, 2012
Item No: 1 a.
Monterey Peninsula Regional Water Authority
ITEM: RECEIVE REPORT FROM TAC
1(a). Preliminary Scoping and Constraints Evaluation Memorandum from SPI
Meeting Date: September 12, 2012
From: David J. Stoldt,
Chairman, Technical Advisory Committee
SUMMARY: One of the first items in the scope of services for the consulting engineering firm
SPI was:
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.
The attached report represents SPI's initial evaluation related to the scope of services.
RECOMMENDATION: The Board should accept the report and discuss.
DISCUSSION: At this time, SPI has concluded that "each candidate project has attendant risk,
with none considered to be disqualifying at this juncture. The project proponents at this stage
have completed varying degrees of design and cost development. It is our opinion that the
MPRWA Board deserves a full examination of each; and that only a balanced evaluation on a
uniform set of criteria can provide the necessary information. We therefore recommend the
inclusion of each proponent project in the full evaluation."
EXHIBIT: The SPI memorandum is attached.
MPRWA Meeting, 9/12/2012 , tem No. a., tem Page 1, Packet Page 1
The Membrane Technology Consultants Separation Processes Inc.
3156 Lionshead Ave.,Suite 2
Carlsbad, CA 92010
Tel: 760-400-3660
Fax: 760-400-3661
www.spi-engineering.corn
Date: August 30, 2012
To: Dave Stoldt
From: Alex Wesner
Subject: Monterey Desalination Study Initial Scoping and Constraints Analysis
SUMMARY
Consistent with the Scope of Services, we have completed an initial review of proponent projects
from California American Water (Cal-Am), the DeepWater Desal group (DWD), and the
People's Moss Landing project (PML). This review included the proponent proposals and
responses to questions submitted to Monterey Peninsula Regional Water Authority (MPRWA)
Technical Advisory Committee (TAC) as well as in-person interviews and site investigations
conducted with members of each proponent team. Each team also provided supplemental
information and materials which are described in the individual proponent discussions below.
The scoping and constraint evaluation focused on several discrete categories of evaluation,
including technical feasibility, reliability, schedule and cost. The evaluation was preliminary in
nature, examining each project on a screening basis to determine if any proponent project should
be excluded from the more detailed evaluation to follow. The evaluation was conducted based
on the information available at this time, which was somewhat limited in nature. The subsequent
evaluation will seek to obtain additional information to inform the analysis.
In summary, each candidate project has attendant risk, with none considered to be disqualifying
at this juncture. The project proponents at this stage have completed varying degrees of design
and cost development. It is our opinion that the MPRWA Board deserves a full examination of
each; and that only a balanced evaluation on a uniform set of criteria can provide the necessary
information. We therefore recommend the inclusion of each proponent project in the full
evaluation. As criteria for the full evaluation, we will look to establish the following:
Uniformity in plant design capacity for the two non-regional approaches; equivalent
capacity allocation for the proposed DWD regional project.
Equivalency in treatment to achieve: a common reverse osmosis (RO) feed water quality
following pretreatment; a common treated water quality goal; and pathogen removal
credits required for the applicable supply source.
Uniformity in equipment redundancy.
Uniformity in unit cost criteria for common items.
Uniformity in cost factors applied to aggregated costs (e.g., contingencies; electrical and
I&C costs; etc.).
Uniformity in unit costs for chemicals and other consumables for treatment evaluations.
A discussion of the individual elements of our evaluation across the three candidate projects is
presented below.
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SPI MEMORANDUM
Subject: Initial Scoping and Constraints Analysis
DISCUSSION
The three proponent proposals to MPRWA were evaluated at this initial phase along with
supplemental documentation from each team for the purposes of this initial investigation. This
supplemental information included the following:
For Cal-Am:
Presentation: Technical Workshops on Monterey Peninsula Water Supply Project A.12-
04-019; July 26 & 27, 2012
Presentation: Monterey Peninsula Water Supply Project Presentation to Monterey Co.
Water Resources Agency, June 25, 2012
Presentation: Monterey Peninsula Water Supply Project, April 23, 2012
Application of California-American Water Company (U210W) for Approval of the
Monterey Peninsula Water Supply Project and Authorization to Recover All Present and
Future Costs in Rates, Filed April 23, 2012 before the Public Utilities Commission of the
State of California
Memorandum (CEQA Project Description), dated April 20, 2012 To: Richard Svindland,
California American Water; From: Paul Findley/Kevin Thomas/Sarp Sekeroglu, RBF
Consulting; Subject: Monterey Peninsula Water Supply Project (MPWSP) Project
Description
Application of California-American Water Company (U210W) for Approval of the
Monterey Peninsula Water Supply Project and Authorization to Recover All Present and
Future Costs in Rates, Direct Testimony of Keith Israel Filed April 23, 2012 before the
Public Utilities Commission of the State of California
Application of California-American Water Company (U210W) for Approval of the
Monterey Peninsula Water Supply Project and Authorization to Recover All Present and
Future Costs in Rates, Direct Testimony of Eric J. Sabolsice Filed April 23, 2012 before
the Public Utilities Commission of the State of California
Application of California-American Water Company (U210W) for Approval of the
Monterey Peninsula Water Supply Project and Authorization to Recover All Present and
Future Costs in Rates, Direct Testimony of F. Mark Schubert, P.E. Filed April 23, 2012
before the Public Utilities Commission of the State of California
Application of California-American Water Company (U210W) for Approval of the
Monterey Peninsula Water Supply Project and Authorization to Recover All Present and
Future Costs in Rates, Direct Testimony of Richard C. Svinland Filed April 23, 2012
before the Public Utilities Commission of the State of California
Presentation: Monterey Water Supply Analysis, October 26, 2011
Technical Memorandum: Implementation Schedule Risk Analysis of Water Supply
Alternatives, Paul Findley, RBF Consulting, October 24, 2011
Technical Memorandum: Cost Analysis of Water Supply Alternatives, Paul Findley, RBF
Consulting, October 19, 2011
MPRWA Meeting, 9/12/2012 , tem No. a., tem Page 3, Packet Page 3
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SPI MEMORANDUM
Subject: Initial Scoping and Constraints Analysis
For DWD:
Presentation: An Oceanographic Solution to Produce Fresh Water, Corporate
Presentation, August 2012
For PML:
The People's Moss Landing Water Desal Project Fresh Water for All Important New
Updates, July 2012 (Includes the Replacement Cost Appraisal Summary Report produced
by Landmark Realty Analysts, Inc., October 3, 2011)
Structural Evaluation, Intake and Outfall Pipelines, Intake Pump Station, and Water
Storage Reservoirs, The People's Moss Landing Water Desalination Project, Moss
Landing Green Commercial Park, Moss Landing, CA by JAMSE Engineering Inc.
August 14, 2012
Environmental Technical Services Inc. Report on results of Asbestos Cleaning Materials
and Lead Based Paint, April 25, 2005.
In addition, we made site specific visits and met with representatives of each project on August
20, 2012. The materials were used in our initial evaluation of each project in the areas of
Technical Feasibility, Reliability, Schedule and Cost. Our findings regarding each category with
respect the individual candidates are included below.
Technical Feasibility
All of the candidate projects appear to have or the ability to acquire land for their proposed
facilities. Remaining issues related to supply, treatment, and brine disposal are discussed
individually below.
Cal-Am
The Cal-Am approach proposes a seawater supply system from new slant wells constructed on
the coast. Water would be treated with single stage, dual media filtration in either gravity beds
or pressure filters. The pretreated water would be stored and fed to the RO desalination process
units, consisting of first and second pass RO trains. The second pass trains would treat 40 50
percent of the product water produced by the first pass trains, resulting in a final treated product
with a 40 50 percent blend of second pass product to first pass product. The blended RO
product supply would be stabilized through calcite contact beds and supplemental carbon
dioxide. Disinfection would be through sodium hypochlorite addition; although there is
discussion of potentially using UV disinfection in series on a temporary basis. Solids from the
pretreatment system would be sent to a settling basin with decant sent along with RO brine to the
Monterey Regional Water Pollution Control Authority's outfall.
Two facility designs are proposedone producing 5.4 mgd and a second producing 9.0 mgd;
targeted at producing an annual supply of 5,500 AFY and 9,000 AFY, respectively.
MPRWA Meeting, 9/12/2012 , tem No. a., tem Page 4, Packet Page 4
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SPI MEMORANDUM
Subject: Initial Scoping and Constraints Analysis
The overall approach is considered acceptable. The quality of water produced by the slant wells
is likely to be low in solids and particulate, making the use of additional filtration ahead of the
RO process membranes conservative. There is a chance the wells could take up iron and
manganese laden water, in which case removal could be accomplished across the filters with
supplemental oxidant addition (as proposed by Cal-Am). The concentrate disposal strategy
appears feasible and the capacity of the outfall should be adequate under most operating
scenarios. Cal-Am has also proposed up to 3.0 million gallons of additional brine storage on site
to provide operational flexibility.
DWD
DWD proposes to draw seawater through a new open ocean intake installed at approximately 65-
ft depth in the Monterey Bay across from Moss Landing, beneath the photic zone. The intake
would be screened, which, in concert with the intake's depth, is intended to limit the
impingement and entrainment of marine organisms. For the new intake line there is an existing
intake line and easement owned and maintained by the Moss Landing Power Plant (MLPP). It is
proposed to use the existing easement and install a new, larger diameter intake line in place of
the existing pipeline. It is noted that the existing 24-in pipeline has a constricted access vault
crossing Highway 1 that may be too constrained to pass the proposed 48-in intake pipeline. In
this case, it may be necessary to provide two parallel lines and a new easement for that portion of
the alignment.
The supply would be drawn through an existing, abandoned wet well and pump station at the
Moss Landing Power Plant (MLPP) site. The raw water would be pumped through a proprietary
warming system located in an existing structure at the MLPP to increase its temperature from 8
C up to 29 35 C. The heated supply would be piped to the proposed treatment plant site and
treated with single stage, dual media filters. Facilities for pre-oxidation and coagulant addition
ahead of the filters are considered. The pretreated supply would be stored and pumped to the
RO membrane process, proposed as a single pass system. The RO product supply would be
stabilized through calcite contact beds and supplemental carbon dioxide. Disinfection would be
through sodium hypochlorite addition. Solids from the pretreatment system Would be sent with
other process residuals to an equalization basin, with supernatant drawn off to a proposed
concentrate basin for subsequent disposal. The preferred location for concentrate disposal is the
mixing vault at MLPP for the existing cooling water outfall. It is unclear at the this time whether
or not DWD will be granted access to the existing outfall, in which case they would need to
provide a new, stand-alone outfall.
Two facilities designs are proposed, broken into two phases. The first phase envisions
construction of 9.1 mgd treatment system to supply the Monterey Peninsula. The second phase
would expand the plant to 22.3 mgd to supply water to northern customers.
The overall approach appears feasible. While the quality of water produced by a deep water
intake is unproven, conventional media filtration could be effective and further assured through a
second stage of filtration if needed. The proprietary warming equipment is a poorly detailed
"black box" and hence an area of concern. However, with sufficient redundancy and/or bypass
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SPI MEMORANDUM
Subject: Initial Scoping and Constraints Analysis
capabilities it could be acceptable. Lastly, while DWD does not explain in their existing project
documentation how they would service a 5,500 AFY demand condition for the Monterey
Peninsula it is not considered an insurmountable barrier at this time.
PML
PML is considering two alternative intake approaches currentlyone to use an existing open
intake pumping system in the Moss Landing Harbor and existing supply pipelines; and a second
to modify an existing outfall and use it as supply line drawing water from the bay, similar to the
DWD intake. With either intake alternative, they propose to treat the incoming supply with
single stage, granular media filters and store the filtrate in a clear well ahead of the RO
membrane process units. There is no reference within the documents as to whether the proposed
RO process is a single pass system or includes a partial or full second pass. Post-treatment
facilities are referenced but not specified in any detail. Similarly, a proposed "solids handling
system" is referenced but not detailed in terms of approach or equipment. It is proposed that
brine and other process residuals be discharged through an existing 51-in (internal diameter)
concrete outfall with discharge to the bay.
PML has proposed two facility design capacities-4.8 mgd and 9.4 mgd. These capacities are
targeted at providing 5,500 AFY and 10,700 AFY, respectively.
The lack of specificity in the PML treatment approach is a concern, but not considered
disqualifying. With the right treatment approach, a facility could be constructed on the proposed
site; and available existing infrastructure could be a benefit. The use of the existing outfall as an
intake supply conduit seems likely, based on our site visit; but details on the proposed
configuration remain to be specified, particularly in the context of brine disposal. The proposed
use of single stage granular media filtration as pretreatment is a concern, but could be modified
as part of a subsequent proposal or cost assessment.
Reliability
Our initial evaluation of reliability considered both potential issues with treatment approach as
well as equipment reliability/redundancy considerations. A discussion of each candidate facility
is presented below.
Cal-Am
From an approach perspective, concerns with the Cal-Am proposal center on the use of slant
wells , for the intake supply. Slant wells have associated benefits in terms of the water quality
produced over open intakes. The technology is, however, new, and the long term capacity of
slant wells is not assured. Should loss of capacity occur the facility could lose production and
fail to meet established delivery targets.
The slant wells are also projected to draw a small amount (3 percent) of groundwater from local
aquifers in addition to seawater. That amount of capture is factored into the Cal-Am treatment
approach, which seeks to treat and return an equivalent amount of water to the aquifer system
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SPI MEMORANDUM
Subject: Initial Scoping and Constraints Analysis
through the desalination treatment facility (replenish with facility product water). The risk in
this case is if the proportion of groundwater extracted with the supply is higher than projected,
forcing a higher requirement for the replenishment supply and decreasing the amount of water
available for delivery to the distribution system.
While the above issues are a concern the risks can be mitigated. Cal-Am has proposed to install
a test slant well that will assist in collecting data necessary to verify hydraulic modeling of the
proposed well field. This should assist in determining the amount of groundwater captured and
allow adjustment to the treatment facility capacity if needed. In terms of the well capacity issue,
the test well should help collect initial data and allow assessment of transmissivity. If it is found
to be too low, an alternate subsurface intake approach could be considered (e.g. Ranney-style
collector). If initial data are positive, then uncertainties in later years can be offset by
conservative planning for well maintenance and/or replacement or installation of new wells.
In terms of equipment reliability and redundancy, the Cal-Am approach seems sufficient. Major
rotating equipment items and process units are proposed with N+1 redundancy, including the
first and second pass RO trains. The proposal also includes a backup engine generator to supply
the product water distribution pumps in the event of a power outage.
DWD
The primary process-related concern for the DWD approach is the single-stage media filtration
pretreatment. While particulate entrainment of the proposed intake may be low, it likely cannot
be assured. Without pilot verification, we feel a two-stage filtration approach would be
appropriate.
Secondarily, an unspecified heat exchange system at the front-end of the treatment process
introduces additional uncertainty. With no track record of successful operation it could prove
unreliable and affect performance of the entire treatment system. While it could be bypassed, the
colder water would impact permeability of the RO process membranes and increase operating
pressure or reduce capacity, depending on capabilities of the process pumps.
Each of the above issues could be mitigated through a revised treatment approach.
In terms of equipment redundancy, there is insufficient information in the proponent documents
to make an assessment at this time.
PML
For PML it is difficult to make an assessment of treatment process risk without a defined intake
strategy. A harbor intake would likely require coagulation in association with
clarification/dissolved air flotation followed by membrane based microfiltration/ultrafiltration
pretreatment at a minimum; while the bay intake could suffice with dual-stage media filtration.
There is a defined concern with the condition of the existing outfall, which may be used for an
intake, outfall, or both. While the above referenced JAMSE Engineering Inc. Structural
Evaluation indicates only minor damage to the outfall, its scope and level of examination is ill
defined. Photographic evidence is referenced but not provided; and there is no description of the
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SPI MEMORANDUM
Subject: Initial Scoping and Constraints Analysis
extent or method of inspection. Other documents, including a previous evaluation of regional
projects on the Monterey Peninsula conducted by SPI and Bookman-Edmonston in 2004,
reference damage to the outfall. The 2004 report included photographs showing a section of the
line decoupled along with significant fouling of the line terminus.
The pretreatment issue can be mitigated through application of revised treatment approach once
the intake scheme is finalized. Additional information on the condition of the outfall is required
to make a final determination, but at the outside could be ameliorated through installation of a
new outfall within the existing easement.
Schedule
Our initial evaluation of schedule focused exclusively on the design and construction portions of
the proposed work. Permit and CEQA issues as they relate to schedule will be addressed in our
final report. Major milestone completion dates from each candidate proposal are summarized in
the table below.
Summary of Proponent Estimated Schedules'
Cal-Am DWD PML
CPUC Approval: 12/13 Permits Complete: 8/13 Permits Complete: 9/14
Test Slant Well: 4/14 JPA Formed: 8/13 Financing Obtained: 9/14
DB Selection: 12/13 Project Funded: 8/13 Const./Startup: 1/16
DBB Design: 8/14 Design Complete: 4/13
Pipeline Comp.: 6/16 Const./Startup: 9/15
Const./Startup: 12/16
Dates provided by project proponents have not been verified and are subject to further analysis.
Cal-Am is proposing a design-build (DB) delivery approach for the treatment plant and has set a
36-month schedule for project design, delivery and startup. Wells and pipelines would be
constructed via conventional design-bid-build (DBB). The schedule for design and construction
of the plant appears conservative; but could effectively be modified in April 2014 when the
planted testing of the slant well is complete. This could reduce the overall design and
construction schedule from 36 to 32 months. It is likely that the overall project could be
delivered from a design and construction perspective according to the proposed schedule, and
possibly accelerated from 4 to 6 months.
The DWD proposes common construction schedule for the plant and project pipelines of roughly
29 months. This is gauged to be achievable. We do question the design completion date of April
2013 which predates the formation of the planned facility joint powers authority (JPA) and
project funding. Providing enough funding can be arranged prior to that date, or design activities
are performed at-risk, the schedule could stand.
The PML proposal does not propose a milestone for design completion so it is left to conjecture.
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SPI MEMORANDUM
Subject: Initial Scoping and Constraints Analysis
But if the design does not commence prior to project funding in September 2014, the schedule
leaves only 16 months for design and construction. This is considered very aggressive for a
project of this magnitude, which must include a long product water distribution pipeline.
Though some existing infrastructure at the site could be used, this is likely to offset at most 3 to 4
months of work at the site. A schedule allowing 26 months for design and construction would be
recommended at this stage of project development.
It appears that any of the candidate projects could be completed by January 1, 2017 from a
design and construction perspective.
Cost
Capital and annual operating and maintenance costs for each project were extracted from the
available documents and are summarized in the table below. For capital costs, all identified
contingencies and other like factors (e.g., accuracy estimates) were removed from the base
capital costs to alleviate substantive differences among the three proponents. No adjustments
were made to listed operating costs. All of the cost data presented represent the "9,000 AFY"
project scenario from each proponent.
Summary of Estimated Proponent Costs'
Cal-Am DWD PML
Capital: $166.8M Capital: $147.0M Capital: $128.7M+
Annual O&M: $12.76M2 + Annual O&M: $6.8M Annual O&M: $9.35M
Cost estimates provided by proponents have not been verified and are subject to further analysis.
2 Includes cost associated the Begonia Iron Removal Plant (BIRP), Segunda Pump Station, and Aquifer Storage and
Recovery (ASR) pump station.
From a capital cost perspective, the highest and lowest cost projects are separated by roughly 30
percent at this stage. Given the disparity in treatment approach and level of equipment
specificity the differential is not considered unreasonable. It is our opinion that the level of
facility information developed by each proponent is sufficient to develop at most a Class 5 cost
estimate as defined by the Association for the Advancement of Cost Engineering, having an
accuracy range of -30 to +50 percent. Cal-Am's costs appear high, but their level of project
definition is comparably greater, and includes large additional cost factors associated with
implementation, right-of-way, and mitigation that the others lack. Also, Cal-Am has proposed a
partial 2-pass RO system along with significant levels of equipment redundancy that the other
proposals don't appear to match. Going forward, our analysis will seek to correct for such
differences.
No proponent has provided much detail on what cost assumptions have been made in developing
the listed O&M cost estimates at this stage (e.g., cost electricity, cost of chemicals, cost of
equipment replacement, etc.). While Cal-Am has provided chemical use quantities and pump
operating assumptions, the others have not. Without that information, a detailed examination of
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Subject: Initial Scoping and Constraints Analysis
operating costs cannot be made at this time.
Given the absence of "apples to apples" cost information currently available, it is not
recommended to disqualify any proponent on a cost basis at this time. We have made additional
data requests of each proponent, which, if fulfilled, will provide additional information on which
to base our subsequent evaluation and comparative analysis.
Cc: Gerry Filteau
MPRWA Meeting, 9/12/2012 , tem No. a., tem Page 10, Packet Page 10
Date: September 12, 2012
Item No: lb.
Monterey Peninsula Regional Water Authority
ITEM: RECEIVE REPORT FROM TAC
1(b). Qualitative Risk Evaluation
Meeting Date: September 12, 2012
From: David J. Stoldt,
Chairman, Technical Advisory Committee
DISCUSSION: In its March 22, 2012 Scope and Focus document, the Authority determined it
"should immediately utilize a Technical Advisory Committee to analyze the three proposed
desalination projects to determine if any will meet the December 31, 2016 timeline, be cost
effective, and provide the necessary volume of water supply." The projects are the proposed
Cal-Am desalination project, the Peoples Moss Landing Desal Project, and the Deep Water Desal
Project also located at Moss Landing.
In April 2012, the TAC initiated a questionnaire with 56 specific questions for the project
proponents. All three project proponents responded within the requested deadline. From the
responses, presentations, and other documents, TAC narrowed its focus and identified four areas
of greatest concern: cost, technical issues, schedule, and community concerns.
With respect to cost, on June 28, 2012 MPRWA issued a request for proposals ("I{FP") to
consulting engineering firms to provide an independent, unbiased, third-party cost assessment of
the three proposed desalination projects, as well as an evaluation of schedule and financing.
That assessment is now underway by the team of Separation Processes Inc., and Kris Helm
Consulting.
The other three areas of concern technical, schedule, and community issues were subjected to
a qualitative evaluation process by TAC members. A total of 13 separate sub-items were
determined by the TAC to be of potentially high risk of causing delay, hence were examined
more fully as each relates to the three proposals.
A numerical scale was developed to help TAC members form relative distinctions of perceived
risk among the categories. The assessment format intended to capture TAC member perceptions
of available facts, and to represent the informed opinions of the TAC members. During
subsequent meetings, the assessment document prepared by the TAC members was further
refined to better indicate the subjective and collective opinion of six TAC members.
In the evaluation scale, a "1" denoted very high risk and a "5" indicated relatively low or normal
risk. The scale did not indicate any one project was better than another, nor was it a precise
measure. In fact, numerical evaluations were not intended to be statistically valid, rather to
indicate some relative measure of risk for each subject area and for each project. In general, the
MPRWA Meeting, 9/12/2012 , tem No. b., tem Page 1, Packet Page 11
evaluations by TAC members were limited to the information provided by the project proponents
in their response to the questionnaire and other publicly available information. Some
information provided by the project proponents was insufficient for TAC members to make
informed opinions about statements made by the proponents, without additional inquiries.
Hence, the numerical evaluations are a qualitative assessment of risks to each of the projects and
are not definitive of the projects feasibility and therefore are not reported in this summary.
The table below summarizes the areas of greatest concern to the TAC. That is, those areas which
might have the greatest risk of delaying or undermining successful implementation of each of the
projects:
Cal-Am Deep Water Peoples' Desal
Water Rights Schedule Risk Schedule Risk
Litigation Risk CPUC Process CEQA/NEPA
Lack of Public CEQA/NEPA Requirements (EIR)
Ownership Requirements (EIR)
Schedule Risk
Slant-Well Technology
Governance
Of the six TAC members, there was agreement on several areas of concern, as shown below:
Cal-Am DeepWater Peoples' Desal
Six Members Agree Water rights CPUC process
Five Members Agree Litigation
Four Members Agree Public ownership EIR requirements Pre-treatment
Governance EIR requirements
This summary is a compilation of TAG member opinions on the possible risks to a project
progressing favorably. Each project's perceived risk may change as the environmental scoping,
project design, and implementation move forward. Also, evolving state regulations for
desalination facilities may also introduce new risks for specific projects.
This summary should be evaluated in conjunction with the third-party consultant's report on the
three proposed desalination projects relating to costs, schedule risk, and financing.
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Monterey Peninsula Regional Water Authority
Agenda Report

Date: September 12, 2012
Item No: 2.


06/12
FROM: Monterey City Clerks Office

SUBJECT: Consider Public Governance, Finance and Ownership of California American
Water (CalAm) Project (Discussion/Action/Direction)

DISCUSSION:
There is no report for this item. An oral discussion will take place at the meeting.

MPRWA Meeting, 9/12/2012 , tem No. 2., tem Page 1, Packet Page 13



DRAFT REGULAR MEETING MINUTES
MONTEREY PENINSULA REGIONAL WATER AUTHORITY
(MPRWA)
Thursday, August 23, 2012


1. CALL TO ORDER

The MPRWA regular meeting of Thursday, August 23, 2012 was held at the
Seaside City Council Chambers and was called to order at 6:05 p.m. by
President Chuck Della Sala.

2. ROLL CALL AND INTRODUCTIONS

Roll call was taken and a quorum established with the following members
in attendance:

PRESENT: President Chuck Della Sala, Monterey; Vice President Felix
Bachofner, Seaside; Directors Jerry Edelen, Del Rey Oaks; Carmelita
Garcia, Pacific Grove; David Pendergrass, Sand City; Vice Mayor Kenneth
Talmage, served as the alternate in place of Director Jason Burnett,
Carmel.

Others: Interim Executive Director, John Dunn; Interim Agency Attorney,
Don Freeman; TAC Representative, Dave Stoldt; Acting Agency Clerk,
Samantha Sakhrani.

3. PLEDGE OF ALLEGIANCE

Director Edelen led the attendees in the Pledge of Allegiance.

4. REPORTS FROM MEMBERS OF THE AUTHORITY BOARD AND STAFF

Director Garcia Nothing to report; anticipated report in regards to
special elections and related estimated costs.

President Della Sala Along with Director Burnett met with the SPI
consulting team on August 16, 2012. Topics covered included formation
purpose; composition of the Joint Powers of Authority; scope of services
that SPI will provide; use of sub-consultants, in particular the Environmental
and Permitting Consultants that might be necessary; the schedule of a 4-6
weeks period of time that it may take for SPI to return to the Board with an
evaluation of the three (3) desalination projects being proposed.

There were no reports from staff.

5. RECEIVE REPORT FROM TAC

A. Consider Qualitative Risk Assessment

Date: September 12, 2012
Item No: 3.

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MPRWA TAC Committee Chair, David Stoldt, stated there was no
transmittal to report but that he did have a discussion on how to best
summarize the data and create a transmittal to the Authorities at the
last TAC meeting. Mr. Riley working on new draft for TAC review and
distribution to the Board.

Directors discussed transparency of the TAC; benefits of waiting for
SPI analysis and potential missing components of financing,
permitting and environmental risk assessment.

Mr. Stoldt responded to the members.

B. Working with SPI Consultants

MPRWA TAC Committee Chair, Dave Stoldt, presented the report.
Members of TAC Committee visited all sites and re-examined the
data; invited SPI consultants to meeting and discussed: Qualitative
Risk Assessment; Scope of services and related costs; Identified lack
of resources in the areas of Financing, Permitting and Environmental
Risk Assessment.

Mr. Stoldt asked the Board to authorize the hiring of Kris Helm, to
evaluate Permit Requirements and Environmental Assessment as a
component of the Analysis of the three proposed Desalination
Projects.

President Della Sala opened the floor for public comment.

Rudy Fisher Suggested Authority explore the option of solar power
plants for cost efficiency.

No further comments, public comment closed.

M/S/C (GARCIA/BACHOFNER) to hold a special meeting for Monday,
August 27
th
at the Seaside City Council Chambers at 6:00 p.m. for one item
for the approval of Kris Helm Consulting. MOTION CARRIED (6-0-0-0)


6. PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA

President Della Sala opened the meeting to public comment.

Tom Rowley Asked Authority to clarify regarding the filling of
vacancy on the Board; urged the Board to hire consultant quickly.
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No further comments, President Della Sala closed public comment.

7. APPROVAL OF MINUTES

M/S/C (PENDERGRASS/BACHOFNER) motion to approve August 9
th
minutes
and ask staff to listen to the tape of the August 1
st
meeting and incorporate
some of the comments that Director Bachofner had regarding Base
Consulting. MOTION CARRIED 5-0-1 (ABSTAIN, TALMAGE) -0.

Vice-President Bachofner concerned that significant comments he made
were not captured in the August 1
st
minutes in reference to discussion item
Base Consulting.

8. BUSINESS ITEMS

A. Reports by Cities on Contributions to MPRWA Budget.

Interim Executive Director, John Dunn, explained that the Board was
requested to take the adopted budget and allocated amount to
their agency and if invoices are needed, such as the City of Sand
City, the City of Seaside will provide invoices upon request.

Director Edelen - Requested an invoice for the City of Del Rey Oaks.

Vice-President Bachofner - City of Seaside approved the budget.

Director Garcia - City of Pacific Grove approved the additional funds
at meeting of August 15; requested an invoice be sent.

President Della Sala opened the floor for public comments; there
were none, public comment closed.

B. Request of the City of Seaside to Make Statement on Citys Position.

Vice President Bachofner reported the City of Seaside had
extensive discussions related to water and the MPRWA. The Seaside
Council requested Mayor Bachofner clarify position in regard to
water issues. That is, Seasides interest is not only to replace water but
to have water sufficient for growth for future and current
development plans. Vice-President Bachofner clarified not urging the
Authority to change the stance of Seaside immediately, but wants all
other cities on the Monterey Peninsula to understand the City of
Seaside advocates strongly for not just replacement water in the
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future but for growth water as well.

President Della Sala thanked Vice-President Bachofner for his
statement. He stated the Authority took action in its policy to limit the
water supply to replacement and replenishment, not water for
growth. In order to provide water for growth, the Authority will have
to hold an extensive discussion to change its direction.

President Della Sala opened the floor for public comment.

Nelson Vega Addressed his concern of the lack of
support the Directors have in issuing Seaside additional
water for growth; Seaside does not have a built-up
community and asked neighboring cities to support
Seaside in becoming self-sufficient.

Tom Rowley Asked the Authority to seek assistance in
providing information to the community and
organizations in order to obtain involvement and
awareness.

George Riley Stated the hybrid plan is more
acceptable than the Directors portfolio approach.

No further comments, public comment closed.

The Directors commented on the public comments and questions.

Director Garcia commented on item 7 of the March 8, 2012 staff
report; concerned report addresses replacement water only;
requested copy of staff report be distributed and asked that it be a
future agenda item for discussion.

Vice - President Bachofner clarified the Seaside Council has not
asked for the Authority to take a different direction, they want the
Authority to be aware that the City of Seaside is looking for water for
growth in the future.

C. Request of the City of Pacific Grove Regarding Recording of Ad Hoc
Committee Meetings

Director Garcia presented her statement in requesting the Ad Hoc
meetings, in particular meetings on governance, be recorded and
retained for 60 days so that it is available for any member of the
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public.

Seaside City Attorney Freeman stated not legally required to record
the meetings. If the Authority is appointing an Ad Hoc Committee as
a Board or Authority, it will be subject to the Brown-Act and open to
the public. He suggested minutes be taken at all Ad Hoc
Committees and clarified Board as a whole can not appoint a
committee. The difference of an Ad Hoc Committee is to report
information and does not make any decisions. A Standing
Committee is appointed by the Board as a whole and is governed by
the Brown Act.

President Della Sala stated he will invite Director Garcia in every Ad
Hoc meeting regarding the topic on governance.

President Della Sala opened the floor to public comment.

George Riley Stated opinion that the Mayors of Carmel and
Monterey have isolated their role in the Ad Hoc Committee
and there is a lesser role in governance than the public was
expecting.

Bill Lude - Suggested to the Authority that an Ad Hoc
Committee be created at a public meeting.

Nelson Vega Addressed the Authority in reminding them their
purpose was for transparency.

Helm Stated concerns to the Authority to give the public an
equal opportunity to understand what discussions are taking
place.

No further comments, public comment closed.

9. INFORMATION ITEMS

A. Solicitation for Legal Counsel

Seaside City Attorney Don Freeman reported five (5) proposals have
been submitted. Monterey City Attorney Christine Davi will prepare
the proposals in a binder once the recruitment is closed and will
forward to the Ad Hoc Committee.

B. Monterey Assuming Clerical Duties
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Interim Executive Director, John Dunn presented the staff report and
informed the Authority that City Clerks of Seaside and Monterey are
holding a transitional meeting next week to transfer clerical duties.

C. Solicitation for Executive Director

Interim Executive Director, John Dunn, reported that the City of
Monterey Human Resources Division is handling the recruitment and
a total of ten (10) applications have been received with the closing
deadline being August 24. All applications received will be
transmitted to Ad Hoc Committee for review with objective to
present Ad Hocs recommendation to the Authority at the September
13, 2012, meeting.

President Della Sala opened the floor for public comment; being
none, public comment closed.

10. SUGGESTED ITEMS FOR NEXT OR FUTURE AGENDA

No suggestions were made.

11. DETERMINE TIME AND PLACE OF NEXT MEETING

The special meeting of the Monterey Peninsula Regional Water Authority
will be held at 6:00 p.m., at the Seaside City Hall Council Chambers on
Monday, August 27, 2012.

12. ADJOURNMENT

The meeting was adjourned at 7:45 p.m.

Respectfully submitted,


_______________________________
Samantha Sakhrani
Acting Agency Clerk
ATTEST:


_____________________________
Chuck Della Sala
President
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