M I N U TE S MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA) Regular Meeting 7:00 PM, Thursday, January 9, 2014 COUNCIL CHAMBER

580 PACIFIC STREET MONTEREY, CALIFORNIA Directors Present: Directors Absent: Staff Present: ROLL CALL President Della Sala Called the meeting was called to order at 7:00 p.m. PLEDGE OF ALLEGIANCE REPORTS FROM BOARD DIRECTORS AND STAFF Vice President Burnett spoke to the Special Meeting on December 9th to give direction regarding the contract award to CDM design build firm prior to the Governance Committee meeting. He then reported that Cal Am has agreed to all the recommendations provided by the Governance Committee for the contract. Finally he reported that the contract estimate came in at $25 million lower than the estimate presented by SPI, which is a benefit for the ratepayers. Legal Counsel Freeman spoke to the change of any board action, that there is a need to identify for the record any dissentions to the vote. Executive Cullem spoke to the test well permitting level and is exploring ways to expedite the process. He also reported regarding the work plan for Outreach Contractor Environmental Solutions and the interns preparing reports on storm water utilization and water supply and brine disposal. Finally, he informed the Board he will be requesting the member cities to provide some level of support for the securitization issue to leverage in our favor future legislation. PUBLIC COMMENTS Mayor Della Sala invited public comment for items not on the agenda. Tom Rowley spoke representing the Tax Payers Association requesting an update from the County of Monterey participation and requested the Authority to respond to the initiative from Public Water Now. Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala None Executive Director, Legal Counsel, Clerk

Nelson Vega spoke to Mr. Rowley's comments about Public Water Nows recent Initiative citing it as a distraction and expressed concern this will hinder finding a solution. Requested agendizing this item as a concern on member city council meetings.

APPROVAL OF MINUTES 1. December 9, 2013 Special Meeting Action: Approved On motion by Director Pendergrass, seconded by Director Kampe and approved by the following vote the Authority approved the minutes of December 9, 2013 as presented. AYES: NOES: ABSENT: ABSTAIN: RECUSED: 5 0 1 0 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Kampe, Pendergrass, Rubio, Della Sala None Edelen None None

AGENDA ITEMS 2. Approve Certificate of Appreciation to Deanna Allen of the City of Carmel for Financial Services to the Authority Action: Approved Executive Director Cullem spoke to the item and the efforts on behalf of Deanna Allen, Finance Specialist for the City of Carmel who had provided financial support to the Authority. He indicated that through the Financial Audit it was recommended there be more control and oversight of the finances and at this time, the City of Seaside has agreed to take over providing the services. Vice President Burnett spoke to the efforts of Ms. Allan and that the City of Carmel funded that effort and spoke to the services contributed by each member city for this agency. Director Edelen arrived at 7:24 p.m. On motion by Director _____ and Seconded by Director ___ and passed by the Following vote the Authority approved the Certificate of Appreciation to Ms. Deanna Allen of the City of Carmel for her efforts to provide Financial Services to the Monterey Peninsula Regional Water Authority. AYES: NOES: ABSENT: ABSTAIN: RECUSED: 3. 5 0 0 1 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Kampe, Pendergrass, Rubio, Della Sala None None Edelen None

Authorize Contract Extension for Brownstein, Hyatt, Farber and Schreck for Legal Services Action: Authorized Extension and Budget Adjustment Executive Director Cullem spoke to the item and requested that the Board extend the current contract to Dec 21 2014, incorporating the included costs in the contract. He noted that at a future meeting staff will prepare and present a resolution to distinguish the roles of McLaughlin and Mr. Freemen. He noted that staff is also requesting to approve an additional $86,000 in the FY 2013-2014 budget for Attorney of Record services. Vice President Burnett spoke to the services that Mr. McGlothlin has been providing including participating with the CPUC process and testimony, coordinating meeting with the State Water Resources Control Board regarding ways to petition for a modification of the CDO, and finally

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Thursday, January 9, 2014

monitoring the decisions with the settlement agreement and hosting meetings with the settlement parties to build on and monitor progress toward what was agreed. Legal Counsel Freeman clarified the rate discrepancy because of the intent to bring on an associate attorney at a lower rate to offset his costs so an average rate will be billed. President Della Sala invited public comment and had no requests to speak. On motion by Director Rubio, seconded by Director Burnett and approved by the following vote the Authority authorized the contract extension for Brownstein, Hyatt, Farber and Schreck for legal services and to increase the budget line item for legal expenses to 186,000 for Fiscal Year 2013-14. Director Rubio, speaking on the second in support of the motion, he spoke to the value that Legal Counsel Russ McGlothlin brings to this Board and the quality of his work. AYES: NOES: ABSENT: ABSTAIN: RECUSED: 4. 6 0 0 0 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala None None None

Receive Update, Discuss and Provide Direction on the Pro-Rated Cost Share Requests from the County of Monterey Action: Update Received Executive Director Cullem spoke to the item, and responded to Mr. Rowley's public question regarding Monterey County representation. He reported that the Board of Supervisors approved $83,300 as a fair share contribution for the Authority activities at this time, but was not billed due to the legality of the JPA Agreement. The review of the Attorney General's office is still outstanding. Mr. Cullem reported that two letters have been sent to the County. The letter dated December 2, 2013 is requesting $12,000 in reimbursement for Costs incurred for Governance Committee Axctivites to contract with SPI Consultants. The second letter dated January 6, 2014, requests new funding for the Authority totaling $306,000 of which $83,300 had already been approved by (but not yet invoiced to) the Board of Supervisors on September 11, 2012.

5.

Approve and File Checks Through December 31, 2013 Action: Approved Clerk Milton spoke to item noting that this is a new practice requested by the Directors. Director Rubio requested this be brought before the Directors monthly and that it includes a budget to actual report to keep the Board informed of fiscal spending. Staff agreed. There were no requests to speak from the public. On motion by Director Rubio, seconded by Director Burnett and approved by the following vote the Authority accepted and filed the provided checks through December 31, 2013. AYES: NOES: ABSENT: 6 0 0 DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala None

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MPRWA Minutes ABSTAIN: RECUSED: 6. 0 0 DIRECTORS: DIRECTORS: None None

Thursday, January 9, 2014

Receive Update on The 2012-2013 Financial Audit Report Action: Update Received Executive Director Cullem spoke to the item indicating the schedule for receiving the 2012-13 Financial Audit. President Della Sala invited public comments on the item. Nelson Vega requested a brief history of the efforts and the expenses the Authority has spent on obtaining a water supply solution noting that its important to know how much money has been spent and is at risk of the distraction by the efforts to buy-out Cal Am.

The Board deemed the report received, no action was taken. 7. Receive, Discuss and Provide Direction on Year End Budget Review for Calendar Year 2013 Action: Report Received Executive Director Cullem spoke to the item, and that staff has been working with the Auditor to verify all financial transactions of the authority from inception through the end of Fiscal year 2013. He noted that the audit has been competed with no deficiencies or irregularities. The finance subcommittee will meet to receive the final audit on January 23, 2014 and the final version will be released to the Directors and the member cities at the next meeting February 13, 2014. President Della Sala opened the item to public comment. Tom Rowley thanked the Board for how far they have come collectively.

Director Rubio spoke to the desire to have more directors to participate in the Financial Review process. Report was accepted by the Directors. ADJOURNMENT The meeting was adjourned at ATTEST:

Lesley Milton, Clerk of the Authority

Chuck Della Sala, President

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