M I N U TE S MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA) Regular Meeting 7:00 PM, Thursday, September 12, 2013 COUNCIL

CHAMBER 580 PACIFIC STREET MONTEREY, CALIFORNIA Directors Present: Directors Absent: Staff Present: ROLL CALL President Della Sala called the meeting to order at 7:05 p.m. PLEDGE OF ALLEGIANCE REPORTS FROM BOARD DIRECTORS AND STAFF Vice President Burnett reported on the upcoming pre-hearing conference for the new administrative law judge from the California Public Utilities Commission. He noted that he and Legal Counsel McGlothlin will be in attendance. He then reported that he is meeting with staff from the State Water Board to continue conversations about the Cease and Desist Order and noted that the time is still not ripe to request a modification to the CDO. Executive Director Cullem reported that the Public Outreach Request for Proposal deadline is on September 13, 2013 and that he wills agendize approval at a future meeting. He then informed the Directors of a student volunteer from Monterey Institute of International Studies that will be conducting research for the Authority. 1. Receive Update on Local Efforts for Storm Water Mitigation (Information Only) Action: Received Update Executive Director Cullem presented the update on local efforts for storm water mitigation. He informed the Authority that there is a water management group working on the staff level to determine if storm water could be a possible supply option once the Monterey Peninsula Water Supply Project is complete. No action was taken on this item and will be revisited at a future meeting. 2. Receive Update Regarding Administrative Services Contract Renewal (Information Only) Action: Received Update Executive Director Cullem reported that the Administrative Services Contract was extended for an additional year per the original contract provisions. There is no increase in costs for this extension. 3. Receive Update on Member City Contributions (Information Only) Action: Received Update Executive Director Cullem reminded the Directors that invoices will be submitted for approved member contributions for the Fiscal Year 2013-14 and encouraged the Directors to have their Burnett, Kampe, Pendergrass, Rubio, Della Sala Edelen Executive Director, Legal Counsel, TAC Members Stoldt & Israel, Narigi, Clerk

MPRWA Minutes cities process their payment expeditiously. 4.

Thursday, September 12, 2013

Receive Opinion Editorial Dated August 17, 2013 (Information Only) Action: Received This is for information only. The Opinion Editorial dated August 17, 2013 was submitted and published by the Monterey Herald. PUBLIC COMMENTS President Della Sala invited public comments for items not on the agenda. Nelson Vega expressed concerns with recent local meetings encouraging a buy-out of the Cal Am project. He thinks the timing is causing a major distraction requested it be agendized for discussion. David Lifland complimented Vice President Burnett on the editorial but indicated the public may have misinterpreted the benefit. He then questioned if the public has 78% equity in the desal facility, why is the public not a majority partner. Lastly, he requested more information about storage capacity and locations. Having no further requests to speak, public comment was closed. APPROVAL OF MINUTES Action: Approved

5.

August 8, 2013 On Motion by Director Pendergrass and Seconded by Director Rubio, and passed by the following vote, the Monterey Peninsula Regional Water Authority approved the Minutes of August 8, 2013 as presented: 6-0-0-0 AGENDA ITEMS

6.

Approve Payment for Legal Counsel Services, Authorize the Authority to Extend Contract for Services with Brownstein, Hyatt and Farber, Receive Update on Budget through June 30, 2013 Action: Approved and Authorized Extension Executive Director Cullem reported that the funds projected for legal services in the 2012-13 budget were inadequate and he requested the Board to approve the unspent funding of 201213 to be applied to the invoice for legal services incurred by Brownstein, Hyatt, Farber and Schreck. He noted that this will result in a needed modification for the adopted 2013-14 adopted budget which could be addressed at the mid-year budget review. Mr. Cullem also recommended extending the contract for services with the legal service firm until December 31, 2013. Mr. Cullem answered question of the Directors.

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Director Burnett explained the higher than expected cost of legal services indicating that engaging in the settlement process allowed a substantial number of issues to be resolved without the need to engage in legal briefings. These costs were incurred at the beginning of the process instead of throughout and for a prolonged period of time. Director Kampe requested staff to provide projected numbers of budget increase as soon as possible to allow the cities to prepare financially. President Della Sala opened the item for public comment. Nelson Vega expressed appreciation for the progress made over the last two years and indicated that the costs were necessary and that it saves money in the long run. He indicated that the Directors have proven they are working in the best interest of the Citizens. He then requested if there has been any response from the Attorney General regarding the participation of the County of Monterey as a member of the Authority. David Lifland requested an update on the test well project. Having no further requests to speak, public comment was closed. Vice President Burnett spoke to the timeline that was reported to him from Cal Am Representative Rich Svinland. He expressed concerned about the schedule due to the potential slippage for the test well installation. Legal Counsel Freeman indicated there was no update regarding the Attorney General response. On Motion by Director Rubio and Seconded by Directors Kampe and Burnett, and passed by the following vote, the Monterey Peninsula Regional Water Authority approved payment for legal counsel services and authorized extending the contract for legal services to Brownstein, Hyatt, Farber and Schreck until December 31, 2013: 6-0-0-0 7. Discuss Policy Direction on Approving All Checks Paid by the Authority Quarterly Action: Discussed and Provided Direction Executive Director Cullem reported that this is an administrative policy to ensure transparency with Authority processes. President Della Sala opened the item to public comment and had no requests to speak. On Motion by Director Rubio and Seconded by Director Kampe , and passed by the following vote, the Monterey Peninsula Regional Water Authority approved agendizing quarterly reports for expenditures to ensure transparency: 6-0-0-0 8. Receive Update, Discuss and Make Recommendations Regarding Public Funding Opportunities Action: Discussed and Provided Direction TAC Member Stoldt presented the report noting this was an informational item discussed at the previous TAC meeting. He walked the Directors through handouts included in the packet which detailed public funding opportunities for water projects. Opportunities included State Revolving Loans, Safe Drinking Water Revolving Fund and Proposition13 planning grants and loans. He indicated the projects that would be most beneficial would be the bi-annual state water bond, as well as Propositions 50 and 84 monies, some of which is awarded based on geographic region. The recommendation is to 1) demand the grant program be changed or 2) provide better grant applications and reach out to public officials to advocate for the needs of our region, including validating the cost of projected water. Mr. Stoldt then answered questions from the Board. Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, September 12, 2013 3

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President Della Sala requested and update on the CEQA process for the GWR project and TAC Member Israel indicated it will be released next Fall. The item was opened to public commend and there were no requests to speak. 9. Receive Update, Discuss and Make Recommendations Regarding Progress of the Ground Water Replenishment Project Action: Received Update and Discussed Keith Israel, General Manager of the Monterey Regional Water Pollution Control Agency and Member of the TAC provided an update on the Ground Water Replenishment project proposed by the MRWPCA. He spoke to the progress of the project in terms of technical activities, CEQA feasibility studies, outreach activities including source water tours, policy activities and other upcoming activities. He listed and spoke to three potential sources of water and a potential collaborative effort with the Marina Coast Water District. He reported that the feasibility study is being finalized for release in the near future. Public outreach document that will provide details and answer all questions. Lastly, Mr. Israel said the proposed GWR schedule is on track but that he is concerned the CPUC schedule will slip. The goal is to have an operation facility within 1.5 years after proposal is accepted. President Della Sala opened the item for public comment. Rudy Fisher spoke to Mr. Israel's project and to his experience on the tour to the Orange County Waste Water District. He responded to a comment from Director Burnett regarding the State Water Bond and the delays it has had in the past encouraging the Authority to contact local representatives to ensure funding will be available. Nelson Vega expressed concern with Mr. Israels comments that the City of Salinas is partnering with the GWR project because of contradictory comments he heard from Salinas Council members. He questioned if the legal right to take the ground water from the Salinas Basin for use on the Peninsula as been addressed. He then questioned what the cost mark up would be if water is transferred between multiple different agencies before it is delivered to the ratepayer. Mr. Israel responded to Mr. Vega's concerns assuring him there will be enough water with all the projects combined and that conversations are occurring which are flushing out all his concerns. He noted there are many needs to balance, but the need for water is the most important. He closed by saying at this point, water is still cheaper through GWR than Desal. 10. Receive Update, Discuss and Provide Recommendation on Authority Work Plan Action: Discussed and Provided Direction Executive Director Cullem spoke to the proposed work plan and requested guidance on the work plan so staff can begin working in the right direction. President Della Sala opened the item to pubic comment. John Narigi, speaking as a TAC member, requested that the TAC be directed to do a proper evaluation of the GWR project similar to the analysis done for Desal. He expressed concern over the cost of the project to the end user. Nelson Vega supported Mr. Narigi's request. Public comment was closed and discussion was brought back to the Directors. Director Burnett spoke to the projects being on two tracks and indicated that the Authority should be focusing on three things:

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1. Working through details of the GWR Project at the TAC and Board level 2. Following through with direction previously agreed, and 3. Continuing conversations with State Water Board regarding the Cease and Desist Order. Mr. Burnett indicated that the TAC will begin to engage in substantive items that are identified in this work plan as well as begin conducting an analysis of the GWR project. He clarified that they will not be able to do a full evaluation due to lack of complete information. The Directors did not request any additional changes to the proposed work program items and requested the item to be brought back for approval at the next meeting. ADJOURNMENT Having no further business to conduct, the meeting was adjourned at 8:49 p.m. ATTEST:

Lesley Milton, Clerk of the Authority

Chuck Della Sala, President

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