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MPRWA Updated Regular Meeting Agenda Packet 06-11-13

MPRWA Updated Regular Meeting Agenda Packet 06-11-13

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Agenda

Monterey Peninsula Regional Water Authority (MPRWA)
Regular Meeting
7:00 PM, Thursday, June 13, 2013
Council Chamber
Few Memorial Hall
Monterey, California

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

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 Authority may do so by addressing the
Authority during Public Comments or by addressing a letter of explanation to: MPRWA, Attn:
Monterey City Clerk, 580 Pacific St, Monterey, CA 93940. The appropriate staff person will contact
the sender concerning the details.

CONSENT ITEMS

1. Approve Future Meeting Dates and Agenda Items - Cullem

2. Receive Financial Update and Authorize Staff to Contract for Financial Services Audit for
Fiscal Year 2012-13 - Cullem

3. Review Final Recommendations for Draft Request for Proposal for The Monterey
Peninsula Water Supply Project - Burnett

END OF CONSENT AGENDA

APPROVAL OF MINUTES

4. May 23, 2013

AGENDA ITEMS

5. Receive Report on California Public Utilities Hosted Ground Water Replenishment
Workshop on June 12, 2013 - Burnett

6. Receive Update and Provide Direction Regarding Draft Power Purchase Agreement Term
Sheet - Cullem

7. Receive Report and Provide Guidance Regarding Reproduction of Water Article And Other
Outreach Opportunities - Cullem

8. Receive, Update, and Discuss MPRWA’s Position on Issues for MPRWA’s Participation
and Decision-Making with Respect to California Public Utilities Commission Settlement
Proceedings in A.12.04.019 - Burnett

ADJOURN TO CLOSED SESSION
Thursday, June 13, 2013
2


9. Conference with Legal Counsel – Existing Litigation, Gov. Code, section 54956.9 –
California Public Utilities Commission, In the Matter of 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, A.12.04.019, Filed
April 23, 2012 - Burnett

ADJOURN TO OPEN SESSION

10. Receive, Update, and Discuss MPRWA’s Position on Issues Identified During Closed
Session for MPRWA’s Participation and Decision-Making with Respect to California Public
Utilities Commission Settlement Proceedings in A.12.04.019 - Burnett

ADJOURNMENT





The Monterey Peninsula Regional Water Authority is committed to include the disabled in all of
its services, programs and activities. For disabled access, dial 711 to use the California Relay
Service (CRS) to speak to staff at the Monterey City Clerk’s Office, the Principal Office of the
Authority. CRS offers free text-to-speech, speech-to-speech, and Spanish-language services
24 hours a day, 7 days a week. If you require a hearing amplification device to attend a
meeting, dial 711 to use CRS to talk to staff at the Monterey City Clerk’s Office at
(831) 646-3935 to coordinate use of a device or for information on an agenda.

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 Clerk’s 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.

Monterey Peninsula Regional Water Authority
Agenda Report

Date: June 13, 2013
Item No: 1.


№08/12


FROM: Prepared By: Clerk to the Authority


SUBJECT: Approval of Meeting Dates and Agenda Items through December 31, 2013

RECOMMENDATION:

It is recommended that the Authority approve the below meeting dates through December 31,
2013

DISCUSSION:

The MPRWA Directors have been meeting the Second and Third Thursday of every month for
the last year. Staff suggests a reduction of the meeting frequency, consistent with the projected
needs following a CPUC decision on the settlement agreement. Below is a proposed list of
meeting dates for the Directors through December 31, 2013, assuming two meetings per month
through the summer season, and suggesting one regularly scheduled meeting and one optional
second meeting if necessary beginning in September. Staff will be suggesting a similar
schedule change for the TAC as well.

The following dates are recommended for future meetings through December 31, 2013.

Regular: July 11, 2013
Regular: July 25, 2013

Regular: August 08, 2013
Regular: August 22, 2013

Regular: September 12, 2013
Optional: September 26, 2013

Regular: October 10, 2013
Optional: October 24, 2013

Regular: November 07, 2013
Optional: November 28, 2013 (*4
th
Thursday Due to Thanksgiving Holiday)

Regular: December 12, 2013
Optional: TBD (*Due to Christmas Holiday)



MPRWA Meeting, 6/13/2013 , Ìtem No. 1., Ìtem Page 1, Packet Page 1

Monterey Peninsula Regional Water Authority
Agenda Report

Date: June 13, 2013
Item No: 2.


№08/12


FROM: Executive Director Cullem
Prepared by Clerk Milton


SUBJECT: Receive Financial Update and Authorize Staff to Contract for Financial Services
Audit for Fiscal Year 2012-13 - Cullem
RECOMMENDATION:

Staff requests approval to allow the Annual Audit and the Financial Report to be completed
concurrently with that of the Member City conducting the Authority Audit.

DISCUSSION:

On April 25, 2013 the Authority adopted its operating budget for Fiscal year 2013-14. To date,
most of the 6 member cities have approved their individual appropriation for the Authority’s
budget. Exhibit A is the current projected accounting for the Authority through June 30, 2013 to
close out the first full fiscal year.

The budget for the Executive Director Services remains robust for three reasons. First, the
position was not filled until mid year. Second, since the position was budgeted based on a
calendar year, but is more appropriately accounted for on a fiscal year. Last, the hours
expended by the Executive Director through May, 2013 was an average of only 22.5 hours, less
than the budgeted 30 hours. The remaining balance of funds from Fiscal year 2012-13 has been
incorporated into the Fiscal year13-14 budget approved by the Authority on April 25, 2013.

Aside from that, the Authority budget has been able to maintain cost controls and operate within
the approved operational budget as demonstrated below.

As the end of the 2012-13 Fiscal year closes, Article 6.3 of the adopted bylaws states:

The accounts of the Authority shall be reviewed as of the close of business on
June 30
th
by a certified public accountant. A full Opinion Audit will be provided to
the Board by the reviewing certified public accountant. The statement shall at all
times be available to members of the organization within the offices of the
Authority.

As of June 30, 2013 the Authority will still have some outstanding invoices for services that will
have been incurred up to June 30, 2013 and may not be able to be captured by full opinion by a
Certified Public Accountant. Staff is recommending delaying the review until all invoices for
services have been received for the Fiscal year.

MPRWA Meeting, 6/13/2013 , Ìtem No. 2., Ìtem Page 1, Packet Page 3



Staff requests approval to allow the Annual Audit and the Financial Report to be completed
concurrently with that of the Member City conducting the Authority Audit. This will be completed
no later than November 30, 2013.


Exhibit A:

Adopted Budget 2012-13



Professional Services
Adopted
Budget

Expended

Remaining

Encumbered
by 6/30/13

Remaining


Legal Counsel

$20,000

$14,750

$5,250

$0.00

$5,250.00

Attorney Of Record

$149,412

$119,238

$30,174

$30,173.74

$0.00

Clerk Services

$35,000

$35,000

$0

$0.00

$0.00

Financial Advisor

$12,500

$12,500

$0

$0.00

$0.00

Executive Director

$131,868

$18,068

$113,800

$8,967.50

$104,832.40 *
Studies $10,000

$0

$10,000

$0.00

$10,000.00

Project Evaluation $102,090

$94,198

$7,892

$0.00

$7,891.52

Insurance $7,000

$5,746

$1,254

$0.00

$1,254.11

Audit $5,000

$0

$5,000

$5,000.00

$0.00

Contingency $3,855

$2,164

$1,691

$500.00

$1,191.09

$476,725

$301,665

$175,060

$44,641.24

$130,419.12





MPRWA Meeting, 6/13/2013 , Ìtem No. 2., Ìtem Page 2, Packet Page 4
Monterey Peninsula Regional Water Authority
Agenda Report

Date: June 13, 2013
Item No: 3.



№06/12
FROM: Executive Director Cullem

SUBJECT: Review Final Recommendations for Draft Request for Proposal for The Monterey
Peninsula Water Supply Project

RECCOMENDATION:
This item is for information only purposes. These are the final recommendations, approved by
both the TAC and the Authority and forwarded to the Governance Committee and passed on to
Cal Am for incorporation into the Draft RFP Design Build schedule for release on June 17, 2013.

ATTACHMENTS:

Recommendations from Monterey Peninsula Water Supply Project Governance
Committee to California American Water re Request for Proposals for Design and
Construction of Desalination Infrastructure - May 28, 2013

MPRWA Meeting, 6/13/2013 , Ìtem No. 3., Ìtem Page 1, Packet Page 5



Governance Committee  C/O Monterey Peninsula Water Management District  P.O. Box 85  Monterey, CA 93942
GOVERNANCE COMMITTEE
FOR THE
MONTEREY PENINSULA WATER SUPPLY PROJECT

California American Water  Monterey County Board of Supervisors
Monterey Peninsula Regional Water Authority  Monterey Peninsula Water Management District

Recommendations from
Monterey Peninsula Water Supply Project Governance Committee to
California American Water re Request for Proposals for
Design and Construction of Desalination Infrastructure
May 28, 2013

1. The request for proposals (RFP) continue to require detailed bids for the base-case design
in order to facilitate the comparison of bids but should do more to encourage creativity in
development of alternative designs that may save money and/or increase value. Alternative
designs should require same level of detail as the base-case design and meet or exceed same
performance standards.
2. The RFP should state that all workers will be paid, at least, the prevailing wage.
3. The Governance Committee supports inclusion of a goal for local hiring. California American
Water (Cal-Am) shall review the County of Monterey ordinance that specifies local hires and
consider inclusion of that or similar language in the RFP. The bidder’s local utilization plan
should be a factor in the 40% technical evaluation criteria.
4. Establish a 30-year net present value cost comparison, instead of (or in addition to) a 20-
year term.
5. Bidders should be advised that the rate of corrosion is high in the local coastal marine
environment. Good quality materials are required so that Cal-Am and the rate payers will not
be responsible to pay for replacement of components that have developed rust after a short
period of time.
6. The Governance Committee agrees with the approach to apply penalties for late delivery, but
understands and agrees with the approach to not provide for a bonus for early project
completion.
7. The Governance Committee understands that Cal-Am is proposing to ask for an estimated
schedule for both permitting and construction and that the date for completion (and associated
penalties for late delivery) would be set relative to the signing of the Design-Build contract. The
Governance Committee requests that Cal-Am consider ways to bifurcate the permit schedule
from the construction schedule, recognizing certain parts of the permitting process will be
outside the control of the Design-Build firm/team.
Note: A number of other items were discussed by the Governance Committee and offered to Cal-Am
for consideration. It is the Governance Committee’s understanding that Cal-Am will incorporate many
of those items into the RFP.


U:\Arlene\word\2013\GovernanceCommittee\Minutes\20130528recommendationsFinal.docx
MPRWA Meeting, 6/13/2013 , Ìtem No. 3., Ìtem Page 2, Packet Page 6


MI NUTES
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Regular Meeting
7:00 PM, Thursday, May 23, 2013
COUNCIL CHAMBER
FEW MEMORIAL HALL
MONTEREY, CALIFORNIA

Directors Present: Burnett, Edelen, Pendergrass, Alternate Member Lucius, Della Sala

Directors Absent:

Kampe

Staff Present: Executive Director, Legal Counsel, Clerk

ROLL CALL

President Della Sala called the meeting to order at 7:05 p.m. All members were present with
the exception of Mayor Kampe, and Alternate Casey Lucius attended in his absence.
PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

President Della Sala invited reports from Directors and Staff. Director Burnett reported on the
possible change of location of the Monterey Peninsula Water Supply Project (MPWSP) test well
to an alternate location on the Semex property. Conversations are continuing and are
progressing positivity. He indicated that Congressman Farr submitted a letter to the U.S. Fish
and Wildlife Service requesting assistance in identification of an alternate, less controversial
site.
President Della Sala reported regarding the Governance Committee special meeting on May
17, 2013 which adopted draft criteria for the Ground Water Replenishment (GWR) project to be
recommended for the June 12, 2013 California Public Utilities Commission (CPUC) GWR
workshop. The Committee adopted the guidelines recommended by the Authority. He then
reported that the Cal Poly design teams made outstanding presentations to the Governance
Committee and went above and beyond in their level of detail and engineering. Many
efficiencies were designed into the facility, including a net zero energy design consumption.
Design was to be LEED-like without the cost for certification for Leadership in Energy Efficiency
and Design (LEED). Both plans were designed for future expansion. The two teams were then
requested to break out the most expensive part of the development to determine if the
risk/reward benefit was there and to determine how expensive it would be to maintain the
energy efficient building.
Executive Director Reichmuth reported that all previously video recorded meetings are now
linked on the website www.mprwa.org. He also reminded the Directors that May 31, 2013 would
be his last day working as the Executive Director for the Authority and that Jim Cullem will
become the new Executive Director. Mr. Reichmuth then requested continuing item three to the
next regular meeting as there was no representative from Cal Am to provide an update on the
MPWSP.

On a motion by Director Edelen, seconded by Director Lucius, and carried by the following vote, the
Monterey Peninsula Regional Water Authority approved continuing agenda Item three to the next
meeting.
AYES: 6 DIRECTORS: Burnett, Edelen, Lucius, Pendergrass, Rubio, Della Sala
MPRWA Meeting, 6/13/2013 , Ìtem No. 4., Ìtem Page 1, Packet Page 7
MPRWA Minutes Thursday, May 23, 2013


Monterey Peninsula Regional Water Authority
Regular Meeting Minutes - Thursday, May 23, 2013
2
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

PUBLIC COMMENTS

President Della Sala invited comments from the public for items not on the agenda. Nelson
Vega questioned what the process would be if the Cal Am project was not successful and
questioned if the Authority’s position is to support general plan build out for the Environmental
Impact Report (EIR) process. With no additional requests to speak President Della Sala closed
public comment and responded to Mr. Vega’s question by saying the Authority requested the
CPUC to mandate a full EIR based on a full general plan build out.

APPROVAL OF MINUTES

1. May 9, 2013
Action: Approved

On a motion by Director Pendergrass, seconded by Director Rubio, and carried by the following vote,
the Monterey Peninsula Regional Water Authority approved the minutes of May 9, 2013:
AYES: 6 DIRECTORS: Burnett, Edelen, Lucius, Pendergrass, Rubio, Della Sala
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

AGENDA ITEMS

2. Receive Report and Provide Guidance Regarding Settlement Discussions and Preparation for
June 12, 2013 California Public Utilities Commission Settlement Conference (Burnett)
Action: Received Report and Discussed

Director Burnett reported on this item and indicated that because of the adopted position
statement, many of the things that will take place in the confidential settlement discussions will
be less challenging. The goal of the Authority has been to maintain transparency. He noted that
if issues due arise that need further clarification, they will be returned to the Authority for
clarification or to refine elements of the position statement. Director Burnett reported the
timeline for the final settlement hearings as listed below:
• June 14, 2013 - Final settlement agreements submitted
• June 12, 2013 - GWR workshop
• June 28, 2013 - GWR Settlement agreements submitted
Director Burnett then reported that the criteria approved by the Authority, Governance
Committee and the Monterey Peninsula Water Management District for the June 12, 2013
workshop was rejected by the CPUC and returned requesting revisions to be more objective in
order to satisfy the CPUC rules under the Tier 2 letter. Director Burnett expressed concern that
more objective criteria will mean less discretion and judgment that can be exercised on behalf
of the community. He then answered questions of the board.
MPRWA Meeting, 6/13/2013 , Ìtem No. 4., Ìtem Page 2, Packet Page 8
MPRWA Minutes Thursday, May 23, 2013


Monterey Peninsula Regional Water Authority
Regular Meeting Minutes - Thursday, May 23, 2013
3
President Della Sala opened the item to public comment. Nelson Vega questioned why every
document is based on the 6.4 MGD facility size, and not the 9.6 MGD capacity. His assumption
is that proposal should be vying for a larger plant and if the GWR is successful, cost effective,
and efficient, then opt for the smaller plant plus GWR. He also questioned the settlement
conference process. Having no more requests to speak, President Della Sala closed public
comment and responded that the Authority is in support of a portfolio approach, and Cal Am is
progressing as a portfolio, but going forward with a study for the 9.6 MGD in the event GWR is
not successful.

3. Receive Status Update for Compliance with Authority Adopted Conditions for the Monterey
Peninsula Water Supply Project (Bowie)
Action: Continued to the Next Regular Meeting

4. Receive Report and Provide Direction Regarding Term Sheet for Power Purchase Agreement
by Cal Am from Monterey Regional Waste Management District (Reichmuth)
Action: Received Report and Discussed

Executive Director Reichmuth reported that he has been facilitating the development of a power
purchase agreement between the Monterey Regional Waste Management District and the
MPWSP. He indicated that a committee has been formed and is in process of developing a
draft term sheet. He anticipates that for every .01 per KWH saved would equate to
approximately $480 in cost savings per day, but the real cost savings would be with the
elimination of the transmission costs. Another issue requiring discussion would be the
renewable energy credit ownership, or RECs as they hold monetary as well as public
relationship benefits. Mr. Reichmuth then answered questions of the Directors.
Director Rubio questioned if there was an issue of a public board selling energy to a public
agency. Director Edelen reminded the Directors that the priorities are to produce the water at
the lowest possible rate.
President Della Sala opened the item to public comment and had no requests to speak.
5. Receive Report and Provide Direction on Draft Request for Proposals for Design-Build Services
for Monterey Peninsula Water Supply Project
Action: Received Report and Provided Direction for Recommended Changes

Director Burnett introduced the item and facilitated discussion regarding the Draft Request for
Proposal. He noted that within the Governance Committee agreement, any contracts over $1
million are required to go before the Governance Committee for review and recommendations.
The turnaround time is 10 days to avoid delay of the process. This agenda item is to allow the
Authority to make recommendations for Director Burnett to report to the Governance
Committee. The RFP will be released to the public on June 17
,
2013 and responses are due in
September 2013.
Director Burnett then discussed the items the governance committee and the TAC discussed
and he reviewed the report prepared by SPI consultants. The Directors discussed the merits
of the below recommendations.
MPRWA Meeting, 6/13/2013 , Ìtem No. 4., Ìtem Page 3, Packet Page 9
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Monterey Peninsula Regional Water Authority
Regular Meeting Minutes - Thursday, May 23, 2013
4
1) Balance of Risk: Risk is shouldered more for design build firms over traditional bids.
However, if too much risk is assigned to the Design-Build firm, the results will be more
costly bids.
2) Responses should be evaluated for both smaller and larger size facilities, should be
weighted equally, and should be evaluated on both construction and operations. The
TAC recommends costs be evaluated over a 30 year life review.
3) Approach to evaluation criteria - 40% based on technical merits and 60% on the
business terms of the proposal. Basic thinking, less weight given to technical and teams,
all teams have been prequalified so any team should be able to deliver the project.
4) Concern that the RFP is too detailed, rather than leaving it to creative design. The TAC
believes we should encourage more innovation and creativity on behalf of the Design.
would expect all to bid on base design, for apples/apples comparison, given how to
factor in scoring
5) Provisions for penalties if projects are not completed on time, but no bonus for
completing on time or early. TAC feels a positive encouragement is important.
6) Binding arbitration vs. a court process - unless we want to take a position, the lawyers
will negotiate this and bring back a recommendation.
7) Due to higher than normal inversion levels in our local environment designs must be
robust against corrosion.
Director Rubio spoke to the concept of penalties saying it was common business practices of
non performance. He then spoke to the idea of creativity and that it comes down to a value
judgment and could be difficult to evaluate. He suggested holding the bid price for over a year
is unusual and somewhat unreasonable. Executive Director Reichmuth indicated that municipal
contracts are usually 90 days for bid price but to the bid value and the time for the project, one
year is not unreasonable.
President Della Sala opened the item to public comment. Nelson Vega questioned if there was
any value with requesting a specific plan RFP rather than a creative design, as creativity and
unknown equals risk. Having no more requests to speak, President Closed public comment.
Mr. Reichmuth agreed with Mr. Vega's comments and went on to discuss the risk burden
differences with a design build project and that it is appropriate in this environment to take
advantage of the latest technologies and proprietary equipment that can be brought and
delivered at a lower price. Equally important, with a design-build contract, if there is a design
error that leads to a contract change, the design-build firm would be responsible to remedy.

President Della Sala questioned the Director’s consensus with the recommendations provided
by the TAC and the Directors agreed to all recommendations.

6. Discuss and Provide Policy Direction Regarding Support of New Water Service Connection Fees
(Burnett, Stoldt)
Action: Discussed and Approved Consideration of a Connection Charge for New Users

Director Burnett discussed the fact that ratepayers will be billed for the costs incurred to bring a new
MPWSP facility operational, paying thorough surcharge two. However, if a new water customer
begins service after the project is completed, there would be no obligation to pay any of the fees
current users are paying. A fairness argument can be made that there should be a mechanism that
new rate payers share the development cost. Director Burnett suggested that a connection fee be put
in place to account for this issue and is asking if the Authority is in support of such a connection fee.
Director Burnett then answered questions from the Directors.
MPRWA Meeting, 6/13/2013 , Ìtem No. 4., Ìtem Page 4, Packet Page 10
MPRWA Minutes Thursday, May 23, 2013


Monterey Peninsula Regional Water Authority
Regular Meeting Minutes - Thursday, May 23, 2013
5
Director Pendergrass expressed concern and indicated this process is a balancing act and that he
prefers to see Cal Am’s rate proposal to the CPUC prior to deciding. Director Edelen spoke to the
process to determine equal contributions, but indicated he is in favor of the idea of a connection
charge. Director Rubio expressed concern that too many fees will stifle the economic vitality of the
community by discouraging development. He supports the idea with caution. Alternate Lucius
questioned the duplication of fees from multiple agencies to which President Della Sala explained the
nomenclature of "connection fee" from other regional water projects.

President Della Sala opened the item to public comment. City Manager John Dunn expressed
understanding for the logic of the fee, but communicated that Seaside customers are currently
charged a connection fee to Cal Am as well as a water allocation fee imposed by the MPWMD. He
urged reconsideration for the potential of three fees to Seaside customers and urged finding an
integrated approach. The then urged extra consideration for affordability, indicating if the fees are too
high it defeats the purpose of this project. Doug Wilhelm spoke to the comment that some cities have
more lots of record for general plan build out than others and reminded the Directors that there is a
surcharge already in place for current rate payers. Mr. Wilhelm then questioned how the money
would be returned to the ratepayers. With no more requests to speak, President Della Sala closed
public comment. Director Burnett agreed with Mr. Wilhelm and indicated it would be used to lower the
rate for all water users. The magnitude of that reduction would depend on the number of connection
fees.
President Della Sala identified that this policy is a way to reduce the cost of the project to the
ratepayers and the fee is still to be determined. In principle, he asked if the Authority supported this
position. Director Rubio expressed resistance to agree without more details, but supported the idea
that a connection charge for new users as a way to charge a pro-rated share.
On a motion by Director Rubio seconded by Director Lucius and carried by the following vote, the
Monterey Peninsula Regional Water Authority approve the concept of a new water service
connection fee with the reservation of seeing further information and study to refund the connection
fee costs for possible integration
AYES: 6 DIRECTORS: Burnett, Edelen, Lucius, Pendergrass, Rubio, Della Sala
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: Kampe
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

7. Provide Further Direction and Refinement Regarding Authority Policy Position with Respect to the
Significant Contribution of Public Funds
Action: Discussed and Provided Direction

Director Burnett reported on the item and requested clarification for the Authority position of
what "significant" contribution of funds would qualify as. He clarified that a couple of variables
need to be accounted for. First, the size of the facility and second, most of the cost numbers we
focus on are the high end cost numbers. Director Burnett answered questions from the
Directors.
MPRWA Meeting, 6/13/2013 , Ìtem No. 4., Ìtem Page 5, Packet Page 11
MPRWA Minutes Thursday, May 23, 2013


Monterey Peninsula Regional Water Authority
Regular Meeting Minutes - Thursday, May 23, 2013
6
Director Rubio suggested using the guideline of 25%of the total cost for the public contribution.
Director Pendergrass spoke to issues of public ownership and Alternate Director Lucius
questioned what the direct impact would be to rate payers. Director Burnett responded that cost
to the individual rate payer would depend on interest rates years from now. If the Monterey
Peninsula Water Management District’s interest rate savings calculations associated with
securitization and rate reduction bond are accurate, total savings on $100 million over a 30 year
period is $224 million dollars. Over a 30 year period it's about a $1,000 per household.
President Della Sala opened the item for public comment. Doug Wilhelm spoke indicating that
Cal Am has over 42,000 hook ups and based on his own calculations of surcharge two, it would
cost an average homeowner $2,000 for the start up of the plant. Pacific Grove City Manager
Tom Frutchey spoke indicating that for every $1,000 savings per person, assuming $100 per
month, it's a 1% savings. Having no more requests to speak, President Della Sala closed public
comment and brought the discussion back to the board.

Director Burnett summed up the two basic ways of reducing Cal Am's equity: 1) rate reduction
securitization and 2) Surcharge two. With respect to Surcharge 2, if we are successful with the first,
the revenue requirement will be less because we will be saving interest charges and if you set
surcharge two equal to the revenue requirement, so you don't have rate shock but a gradual
increase. Director Pendergrass expressed concern that Cal Am is not in support of this strategy as
they have expressed opposition before. President Della Sala indicated that earmarking a
percentage is not perfect but a range could cover all bases.
On a motion by Director Rubio seconded by Director Edelen and carried by the following vote, the
Monterey Peninsula Regional Water Authority approved the refinement of the previously adopted
position regarding the item “significant contribution of public funds” to add the definition that Cal Am
must accept the contribution of public funds of approximately 50% of the cost of the project to
include both surcharge two and the rate reduction bonds to count toward the public contribution of
50%.
AYES: 6 DIRECTORS: Burnett, Edelen, Lucius, Pendergrass, Rubio, Della Sala
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: Kampe
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

ADJOURNMENT
With no further business to come before the Authority, President Della Sala adjourned the
meeting.

ATTEST:




Lesley Milton, Authority Clerk Chuck Della Sala, Authority President

MPRWA Meeting, 6/13/2013 , Ìtem No. 4., Ìtem Page 6, Packet Page 12
Monterey Peninsula Regional Water Authority
Agenda Report

Date: June 13, 2013
Item No: 5.



№06/12
FROM: Executive Director Cullem

SUBJECT: Receive Report on California Public Utilities Hosted Ground Water
Replenishment Workshop on June 12, 2013

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

ATTACHMENTS:

MPRWA Meeting, 6/13/2013 , Ìtem No. 5., Ìtem Page 1, Packet Page 13

Monterey Peninsula Regional Water Authority
Agenda Report

Date: June 13, 2013
Item No: 6.



№06/12
FROM: Executive Director Cullem

SUBJECT: Receive Update and Provide Direction Regarding Draft Power Purchase
Agreement Term Sheet

RECCOMENDATION:
Staff is requesting the Authority to review the minutes of the power purchase agreement
meeting of June 6, 2013 and provide direction.
A copy of the minutes will be provided at or before the meeting.

ATTACHMENTS:
Minutes of the June 6, 2013 Power Purchase Agreement Meeting

MPRWA Meeting, 6/13/2013 , Ìtem No. 6., Ìtem Page 1, Packet Page 15
DRAFT
June 5,2013
TERM SHEET
for
Primary Terms for New Power Sales Agreement (PSA) between
Monterey Regional Waste Management District (MRWMD) and
California American Water Company (CalAm)
Commercial Terms:
Project Definition - The project will be that the MRWMD (District) will generate electrical power and provide that
power to the proposed desalination plant owned and operated by CalAm, a regulated utility, operating within the
Monterey Peninsula Water Management District.
Unit Contingent: The existing Power Purchase Agreements (PPA) with PG&E and 3Phases Renewables are unit
contingent agreements, that is the District is only obligated to supply power when power is produced.
Installed Capacity: The current actual installed capacity 5 MW. The future planned 3 additional MW. Capacity of the
transformer 5 MW plus a second 5 MW backup.
Contract Amount (annual quantity): The proposed annual MWH to be delivered for planning purposes not contractual.
- Current Power output: 5 MW, minus District usage (0.5 MW)
- Projected Power output; 7 MW by xx/vd2Oxx , minus District usage
Excluding the existing commitments described above, MRWMD will be able to divert as much power as needed to
neighboring adjacent parcels. Power Demand by CalAm
- Xx MW Average
Xx MW Peak
- Xx MW Seasonal
Minimum or Guaranteed Amount: Amount of MWH that will be a contractual obligation to supply and to purchase.
Product Definition (energy, capacity, green attributes, voltage stabilization): The Product has to be defined; Energy vs.
RECs, Capacity, and other attributes.
- Product is the electricity and Renewable Energy Credits (RECs) from all engine/generators from the existing
MRWMD power plant less District usage.
- Ownership of Renewable Energy Credits (RECs) to be discussed.
Availability: Hours that facility is operating; a level of 85% is a normal quality operational level.
Term of Agreement:
- Ten year agreement; longer term?.
Security: Financial assurances for performance.
Delivery Point: This will have to be defined. The normal delivery point is close to the outlet of the transformer (the
high side) physically and contractually at the meter used to measure the power.
Delivery Voltage: The current voltage at the high side of the transformer is 21,000 volts. Generators produce at 4,160
volts.
Metering: Real time metering at the delivery point for purposes of calculating payments; revenue grade meter.
t
MPRWA Meeting, 6/13/2013 , Ìtem No. 6., Ìtem Page 2, Packet Page 16
Interconnection Issues:
A normal utility contract will have a separate interconnection agreement, an engineering study
on the impact to the system, the load on the existing lines, the metering, the safety issues, shut downs, etc. T
Cost of Studies: Who performs, pays, etc.
Project Start Date: Contingent on construction, etc.
- Effective date is January 1, 20_ or as soon as possible thereafter.
Existing Contractual Obligations to Sell Power
Price: Separate pricing for each attribute; escalation; tied to an index?
- Baseload price of $0.xxxx dollars/kWh
- Annual Cost of Living Price Adjustments of xxx
Backup Power: Stand by power. Responsibility of CalAm.
- Interruption of Power
o By CalAm
o By District
Excess Power in the Future:
- Additional Power Output generated by additional landfill gas engine/generators installed by the District may/may
not become subject to the terms of the PSA
End of Term Options:
At the end of the contract, MRWMD will discuss future contact options for this, and any
additional power developed, with CalAm before committing to selling the power to another buyer. Options for
extension?
- Use the Standard Form for Power Sales
June 5, 2013

o:\wmmmprwa\ps draft calammrwmd_revised 6513.docx
MPRWA Meeting, 6/13/2013 , Ìtem No. 6., Ìtem Page 3, Packet Page 17
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Monterey Peninsula Regional Water Authority
Agenda Report

Date: June 13, 2013
Item No: 7.



№06/12
FROM: Executive Director Cullem

SUBJECT: Receive Report and Provide Guidance Regarding Reproduction of Water Article
And Other Outreach Opportunities

RECCOMENDATION:
As an initial effort to expedite public outreach the Executive Director contacted The Monterey
County Herald to obtain permission to publish and reprint the article “The Path to Your Tap”
originally published on June 2, 2013. The publisher has provided permission and a copy is
included in the agenda packet. Staff if requesting guidance concerning printing and distributing
this file for public use.
Staff will return at a later meeting with more details for the proposed public outreach efforts for
the Fiscal year of 2013-14.
ATTACHMENTS:
Water Article Produced by the Monterey Herald and published on June 2, 2013.

MPRWA Meeting, 6/13/2013 , Ìtem No. 7., Ìtem Page 1, Packet Page 19
MONTEREY’S BEST
SELECTION OF
EYEWEAR
Insurances Welcome
Cathy Shue ABOC
187 El Dorado St., Monterey
831.373.4400
M-F 9-6 & Sat 10-4
www.insighteyewear.com
SERVING THE MONTEREY PENINSULA AND SALINAS VALLEY $1.50 SUNDAY
Sunday, June 2, 2013
www.montereyherald.com
Classified ads . . . . . . . . . . . . .B7
Editorials . . . . . . . . . . . . . . . . .A8
Health . . . . . . . . . . . . . . . . . . .AA1
Leisure . . . . . . . . . . . . . . . . . . .B1
Local news . . . . . . . . . . . . . . . .A2
Nation . . . . . . . . . . . . . . . . . . . .A3
Obituaries . . . . . . . . . . . . . . . .A5
Sports . . . . . . . . . . . . . . . . . . .C1
Weather . . . . . . . . . . . . . . . . .B10
Inside
Monterey marks
243rd birthday
Commodore
Sloat
(Hersch
Loomis)
attends
Saturday’s
La Merienda
celebration.
Page A2
Jean Stapleton, who
portrayed a traditional
homemaker
on the front
lines of social
change as
Archie
Bunker’s wife
on the 1970s
show “All in the Family,”
has died. Page A3
Farewell, Edith
n the Web n the Web
montereyheral d. com
Breaking News
For the latest
7 1 39918 00150
SPANISH ROOTS
Former mayor featured in documentary
Story on page B1
TWIN BLOWOUTS
Giants aces roughed up in St. Louis
Story on page C1
By SEAN MURPHY
Associated Press
OKLAHOMA CITY — It’s a warning as
familiar as a daily prayer for Tornado Alley
residents: When a twister approaches, take
shelter in a basement or low-level interior
room or closet, away from windows and exte-
rior walls.
But with the powerful devastation from the
May 20 twister that killed 24 and pummeled
the Oklahoma City suburb of Moore still
etched in their minds, many Oklahomans
instead opted to flee Friday night when a vio-
lent tornado developed and headed toward the
state’s capital city.
It was a dangerous decision to make.
Interstates and roadways already packed
with rush-hour traffic quickly became parking
lots as people tried to escape the oncoming
storm. Motorists were trapped in their vehi-
cles — a place emergency officials say is one
of the worst to be in a tornado.
‘‘It was chaos. People were going south-
bound in the northbound lanes. Everybody
was running for their lives,’’ said Terri Black,
51, a teacher’s assistant in Moore.
Outrunning
tornado a
bad move
for many
OKLAHOMA STORMS
Jammed roadways
trapped motorists as
twister bore down
Please see Tornadoes page A9
By PAUL ELIAS
Associated Press
SAN FRANCISCO — At the height of the
financial crisis, bargain hunters would gather
each week on county courthouse steps to bid
on foreclosed properties throughout Northern
and Central California. The inventory lists
were long, especially in hard-hit areas such as
Sacramento and Stockton. But the auctions
were generally short affairs — often because
real estate speculators were illegally fixing the
bidding process.
In the past three years, federal prosecutors
have charged 54 people and two companies in
three states for bid-rigging during courthouse
auctions of foreclosed properties. Most cases
originated in California, the state with the
highest foreclosure rate during the financial
crisis. Nearly identical rings were broken up
in Raleigh, N.C., and Mobile, Ala.
Working in concert, would-be buyers would
appoint one person to bid on each property on
Please see Scams page A9
Foreclosure
scams under
fire from feds
Bid-rigging heavy
in California
The path
to your
tap
VERN FISHER/The Herald
What you need to know
about the water supply project
By JIM JOHNSON
Herald Staff Writer
After nearly two decades of
living under the threat of losing
a major portion of their water
supply, and after watching a
series of possible solutions fail,
many Monterey Peninsula resi-
dents can be forgiven for tuning
out when a new water project
comes around.
That may be why the latest
proposal, the Monterey Penin-
sula Water Supply Project, still
is something of a mystery to
many in the area more than a
year after it was unveiled in the
aftermath of the failed regional
desalination project.
Add to that the difficulty of
keeping track of all the agen-
cies and organizations involved
in the debate over a new water
supply, as well as the many
technical, legal and political
issues involved, and it can be
confusing even for the most
engaged resident to follow.
That’s why The Herald is pre-
senting the basics of the three-
pronged project in what we
hope is an easy-to-understand
format. In these pages and
online, we lay out why such a
project is needed, what the cur-
rent proposal includes, who’s
backing it and what it is
expected to accomplish. We
also examine other key ques-
tions such as how much it is
expected to cost and who will
pay for it.
While new developments will
occur regularly as the project
works its way through the regu-
latory process, including the
recent ruling that extended the
project’s environmental review
by several more months, this is
a snapshot of the proposal and
its importance to the Peninsula.
Why is this project needed?
In 1995, the state Water
Resources Control Board
decided California American
Water had been taking too
much water from the Carmel
River for years, and was only
entitled to about 30 percent of
what it had been pumping.
In 2003, a court order
Editor’s note: Our water
supply is a critical issue, so
it’s critical we understand
what’s being done to
secure it. As the Monterey
Peninsula Water Supply
Project enters an important
phase in the review
process, The Herald is
taking readers back to the
basics: What exactly is this
project, and what does it
mean for you? Our goal is
to give you a foundation so
you are prepared for the
crucial decisions that lie
ahead.
See
montereyherald.com/
desal for related stories,
videos and resources on
the Monterey Peninsula’s
quest for a viable water
source.
Overview
Scan this code
for a video
overview of the
project, or see
http://bit.ly/
wsp_over
Please see Water page A6
MONTEREY PENINSULA A QUEST FOR WATER
High-speed rail
project facing
federal hurdle
Supporters argue delays would be harmful
By MICHAEL DOYLE
McClatchy Washington Bureau
WASHINGTON — The
California high-speed rail
project is rapidly approach-
ing an intersection con-
trolled by a powerful but
usually low-profile federal
board.
Behind the scenes, high-
level advocates and skeptics
alike have been lobbying
the three-member Surface
Transportation Board. The
board already disappointed
high-speed rail supporters
by concluding it has legal
jurisdiction over the in-state
project.
Now, wading through an
unusually high volume of
comments, the board is
being asked to decide by
June 17 whether to exempt
the first phase of the Califor-
nia project from federal
approval requirements. The
crucial first phase spans 65
miles, from Fresno to
Merced, and has attracted
Please see Rail page A9
MPRWA Meeting, 6/13/2013 , Ìtem No. 7., Ìtem Page 2, Packet Page 20
A6 THE MONTEREY COUNTY HERALD, SUNDAY, JUNE 2, 2013 WWW.MONTEREYHERALD.COM
Intake wells
Desalination
facility
ASR wells
Connection
to existing
system
GWR wells
ASR pipeline
Seaside
pipeline
S
a
l
i
n
a
s

R
i
v
e
r
M O N T E R E Y
B A Y
Terminal reservoir
and ASR pump station
Outfall
connection
Recycled
water
treatment
plant
Recycled water
distribution
pipeline
Monterey
pipeline
Monterey Peninsula
Water Supply Project
Connection to
approved Cal Am
facilities
Connection to
approved Cal Am
facilities
Intake wells
1
1
68
218
MO N T E R E Y
PA C I F I C
G R O V E
D E L R E Y
O A K S
S
E
A
S
I
D
E
C S U MB
MA R I N A
S
A
N
D

C
I
T
Y
Intake wells
discharge
Intake wells
discharge
Transfer
pipeline
Transfer
pipeline
Flow control station
Source: California American Water JAMES HERRERA/The Herald

* Map shows major elements of Monterey Peninsula Water Supply Project
and is not intended to be an exact representation of the location of those elements.
Desalination
Groundwater replenishment
(GWR)
Aquifer storage and recovery
(ASR)
Sand City Desal
Carmel River
Seaside Basin
41%
23%
8%
1%
22%
5%
41%
23%
8%
1%
22%
5%
The project will draw from
a variety of water sources
A three-pronged proposal
The Monterey Peninsula Water Supply Project involves three main elements.
Scan the QR codes or go to the links provided to watch video presentations
on each of them.
AQUIFER STORAGE AND RECOVERY GROUNDWATER REPLENISHMENT
To supplement the desal
plant’s supply, excess
winter water from the
Carmel River would be
injected into the Seaside
groundwater basin for use
in the summer.
http://bit.ly/asr_over
The groundwater
replenishment project
involves treating
wastewater at a plant
north of Marina and
injecting the highly treated
water into the Seaside
groundwater basin for later use.
http://bit.ly/gwr_over
California American Water’s proposed desalination plant will
use reverse osmosis, an energy-intensive process that
removes salt and contaminants from seawater to produce
drinking water.
1
2
3
1
1
2 3
2
3
Source: Poseidon Resources Graphic: Los Angeles Times © 2013 MCT
Seawater is filtered through
sand columns to remove
material that could clog
reverse osmosis membranes
Salt water forced at high
pressure through multi-
layered rolls of material
Salt left behind as water
reaches collection tube
Fresh water goes from
collection tube to drinking
supply
Membranes screen out salt,
producing potable water
Seawater is
forced into
sand filter
Sand filter
removes silt
and organic
material
Filtered
seawater is
pumped to
reverse
osmosis
membranes
Fresh water from the sea
Basic desalination process
Pretreatment system Reverse osmosis filtration
Distribution
Concentrate discharge
Salt water
Salt water
Salt water
Pump
Collection
tube
To drinking
supply
Pretreatment
(filtration)
Reverse
osmosis
membrane
filtration
0 5
MI L E S
The Peninsula currently has
two primary sources of water:
The Carmel River supplies
about 70 percent, while the
Seaside groundwater basin
supplies about 30 percent.
California American Water is
under state order to cut back
its use of each of them,
prompting the need for a new
water supply.
P
in
e
C
r
e
e
S
a
n

C
l
e
m
e
n
t
e

C
r
e
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Hitchcock Canyon
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C
a
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o
n
P
o
t
r
e
r
o

C
a
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o
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Garzas Creek
T
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o
C
h
u
p
in
e
s
C
r
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a
q
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i
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MO N T E R E Y
B AY
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R
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218
1
1
68
Seaside Seaside
Del Rey
Oaks
Del Rey
Oaks
Monterey Monterey
Pebble
Beach
Pebble
Beach
Carmel Carmel
Carmel
Valley
Carmel
Valley
Sand City Sand City
G16
Carmel Valley
Alluvial Aquifer
Seaside
Groundwater
Basin
Peninsula water sources
68
Pacific
Grove
Pacific
Grove
G20
G17
Marina Marina
Source: Monterey Peninsula
Water Management District
JAMES HERRERA/The Herald

MONTEREY PENINSULA A QUEST FOR WATER
DESALINATION PLANT
The desalination plant
north of Marina will supply
the bulk of the Peninsula’s
water when the project is
completed. Its size and the
amount of water it will
produce will depend on
how extensive the groundwater
replenishment component is.
http://bit.ly/desaloverview
Clear, odorless wastewater is
further treated to make it
drinkable
Low-
pressure
process of
micro-
filtration
removes
small
particles,
bacteria
© 2007 MCT
Source: Orange County Water District,
Orange County Sanitation District
Graphic: The Orange County Register (Calif.)
Groundwater replenishment systems can
convert wastewater to drinking water using a
series of filters. The system produces
ultra-clean water that, after
percolation/injection into a deep
aquifer, can become part
of a community’s
water supply.
Treated
wastewater
Pressurized
wastewater
is pumped
through
membranes
Impurities are trapped in
membranes
Purified water is
squeezed out
through pipe
Membranes
Reverse osmosis, a high-
pressure process, removes
minerals and contaminants, such
as salts, viruses and pesticides
Treated water is piped
to holding pools where it will
seep into groundwater and
to injection wells
on the coast, helping
to fortify barrier to seawater
Discharged
to the ocean
Holding
pool
Water is exposed
to ultraviolet light, hydrogen
peroxide to eliminate
remaining compounds
Flipping the switch
Injection
well
W
ater table
How reverse
osmosis works
1
2
3
4
1
2
3
Taste test
Scan this code
for a video from
Orange County’s
wastewater
treatment plant,
or see
http://bit.ly/
OCtour
The Peninsula currently has two
primary sources of water: The
Carmel River supplies about
70 percent, while the Seaside
groundwater basin supplies
about 30 percent. California
American Water is under state
order to cut back its use of
each of them, prompting the
need for a new water supply.
This map shows the major facilities and pipelines to be used for the
project. For the desalination portion, water will be drawn through
the intake wells, treated in the plant and delivered by a new
pipeline to customers.
required Cal Am to reduce
its take from the under-
ground Seaside basin as well.
That left Cal Am seeking a
new water supply capable of
meeting demand for resi-
dents and businesses —
about 38,000 connections —
in its Monterey district.
Cal Am pursued desalina-
tion, conservation and
smaller water projects, and in
late 2010 its regional desal
project was approved by the
state Public Utilities Com-
mission. But after that
project fell apart amid legal
setbacks and conflict of inter-
est allegations, the company
turned its attention to the
current proposal.
Adding pressure to the
process, the state water
board had issued a cease and
desist order in 2009 that
required Cal Am to cut its
pumping from the Carmel
River to its legal limit by the
end of 2016.
While production from the
river has been reduced by
nearly half since the initial
state orders, largely because
of tiered water rates and con-
servation, and though it is
scheduled to be cut further
over the next few years, the
Peninsula still faces a major
drop in available water sup-
ply after the deadline.
What are the
project’s elements?
The project includes two
main elements: a Cal Am-
owned desal plant north of
Marina and an aquifer stor-
age and recovery (ASR)
project backed by the
Monterey Peninsula Water
Management District.
A third element, a ground-
water replenishment (GWR)
project backed by the
Monterey Regional Water
Pollution Control Agency,
could be included if it is
deemed ready to go by the
fall of 2015.
What are the project’s
water production goals
and how does it meet demand?
The desal plant and aqui-
fer storage and recovery
project are designed to pro-
duce 11,052 acre-feet of
water per year. If the ground-
water replenishment project
is ready to go on time, it
would allow Cal Am to build
a smaller desal plant.
When added to water sup-
plies from the Carmel River,
the Seaside basin and the
Sand City desal plant, the
Peninsula will have 15,296
acre-feet per year available
for use. That’s supposed to
be enough to meet the Penin-
sula’s five-year average
demand of 13,290 acre-feet
per year, along with water for
legal lots of record, economic
recovery and Pebble Beach
build-out.
But the projected new sup-
ply is still significantly short
of the Peninsula’s pre-1995
demand of 18,100 acre-feet
per year.
An acre-foot of water is
equal to about 326,000 gal-
lons, enough to serve four to
five average-use homes per
year.
Will the plan allow
for growth?
The water project as it
stands will not allow for
future growth, including
build-out under the county
general plan. It does allow for
development on existing lots
of record — lots that cur-
rently do not have available
water — and Pebble Beach’s
proposed Del Monte Forest
development project.
Who pays for the project?
Customers in Cal Am’s
main Monterey district sys-
tem will pay for the $400
million project over 40 years,
including up to $277.8million
for the desal plant,
$107million for pipelines and
other necessary infrastruc-
ture and $13million for the
aquifer storage and recovery
project.
If groundwater replenish-
ment is ready to go, the
smaller desal plant would
cost an estimated
$223.5million. The cost of
the groundwater replenish-
ment project — between
$56million and $87 million
— would be covered through
a water purchase agreement
paid for by Cal Am
customers.
In addition, Cal Am cus-
tomers will pay annual
maintenance and operations
costs.
In all, customers will pay
an estimated $1.9billion over
the 40-year life of the project,
including interest on a loan
and the company’s rate of
return, or profit margin,
according to Cal Am. About
Water
From page A1
Please see Water page A7
MPRWA Meeting, 6/13/2013 , Ìtem No. 7., Ìtem Page 3, Packet Page 21
Timeline
Key dates in the past
and future:
1995: State water board issues
order requiring California
American Water to cut pumping
from the Carmel River.
2003: Adjudication of the Seaside
basin reduces available supply
from that source.
2004: Cal Am submits application
for the Coastal Water Project,
which results in the regional
desalination project.
2009: State water board issues
order requiring Cal Am to cut
pumping from the river by the
end of 2016.
January 2012: Cal Am withdraws
from regional desalination
project.
April 2012: Cal Am files application
for the Monterey Peninsula
Water Supply Project with the
state Public Utilities
Commission.
April 2013: Evidentiary hearings
begin on the project at the PUC
with more than a dozen
participants.
May 2013: Confidential settlement
discussions aimed at resolving a
range of issues begin among
participants.
June 2013: Settlement agreement
deadlines.
Fall 2013: Test wells scheduled to
be constructed (with operation
targeted to begin in spring
2014).
December 2013: Aquifer storage
recovery project phases 1 and 2
finished.
February 2014: Release of draft
environmental impact report
scheduled.
June 2014: Final EIR scheduled to
be published.
July 2014: Proposed decision by
PUC judge expected.
August 2014: Final PUC decision on
project permit.
January 2015: All project permits
acquired, including state Coastal
Commission approval.
Spring 2015: Target for
construction to begin on
groundwater replenishment
project.
Fall 2015: Final deadline for
deciding if groundwater
replenishment project is ready.
December 2016: Groundwater
replenishment project
construction finished.
End of 2016: Deadline for cutback in
pumping from the Carmel River
and Seaside basin.
TBA: Dates for start and finish of
desalination plant construction.
VERN FISHER/The Herald
WWW.MONTEREYHERALD.COM THE MONTEREY COUNTY HERALD, SUNDAY, JUNE 2, 2013 A7
Key players
The organizations at the center
of the Monterey Peninsula
Water Supply Project:
California American Water: Private
water utility that serves most of
the Peninsula. This project is the
company’s proposal.
Monterey Peninsula Water
Management District: Public
water agency working in
partnership with Cal Am on the
aquifer storage and recovery
element.
Monterey Regional Water Pollution
Control Agency: Public agency
that treats wastewater in the
region. It is working
independently on the
groundwater replenishment
component in collaboration with
the water management district.
Monterey Peninsula Regional Water
Authority: Often referred to as
the mayors water authority, it is
a power-sharing agency of six
Peninsula cities, represented by
their mayors — Carmel, Del Rey
Oaks, Monterey, Pacific Grove,
Sand City and Seaside. Carmel
Mayor Jason Burnett, the
authority’s vice president, has
become its spokesman. It was
formed to offer public
representation during project
hearings.
California Public Utilities
Commission: State agency that is
considering Cal Am’s project
permit. The PUC ultimately will
decide the rate structure for Cal
Am customers. Hearings on the
project are being overseen by
Administrative Law Judge Gary
Weatherford.
Division of Ratepayer Advocates:
Part of the PUC, it acts as a
voice for Cal Am customers.
Salinas Valley Water Coalition: A
group of agricultural interests
concerned about the impact of
the project on efforts to halt
seawater intrusion in the Salinas
Valley groundwater basin.
State Water Resources Control
Board: Often referred to as the
state water board. Its order to
cut back on pumping from the
Carmel River led to the need for
a new water supply.
Other players: Planning and
Conservation League, Public
Trust Alliance, Citizens for Public
Water, Surfrider Foundation,
WaterPlus, Marina Coast Water
District, Coalition of Peninsula
Businesses, LandWatch
Monterey County, Ag Land
Trust.
half of that would go to pay
for the actual desal plant.
Ratepayer advocates
working for the state Public
Utilities Commission (PUC)
have argued that Cal Am’s
cost estimates are inflated.
They have called for cost
caps, but company officials
suggest that could result in
higher costs.
Cal Am says it would keep
customers’ costs down
somewhat by placing a sur-
charge on their bills before
the project is built. That
means the company could
not collect its normal profit
margin on about
$100million of the project
costs. The company will also
seek a low-interest state
loan.
A group made up of the
Peninsula’s mayors is pro-
posing a public contribution
of up to $100 million more,
which they say could save
customers an estimated
$124 million over the life of
the loan.
When will my water bill
increase? By how much?
According to Cal Am’s
projections, customers’
water bills are expected to
double — and could nearly
triple — by 2017 from a 2012
baseline, though less than
half of that increase will be
directly attributable to the
project.
Bills could begin to
increase as soon as next
summer if Cal Am’s request
for a surcharge is granted by
the PUC.
According to the compa-
ny’s projections as recently
as last year, residential cus-
tomers who use relatively lit-
tle water could see their
monthly bills increase from
about $21 now to between
$40 and $56 by 2017, with
about $17 to $24 of the
increase due to the project.
Higher-use customers
could see a monthly
increase from about $146 to
between $308 and $496. Of
that increase, about $119 to
$198 would be a result of the
water project.
An average commercial
customer could see an
increase from about $350
per month to between $709
and $752, with about $298 to
$317 attributable to the
project.
Also causing bills to go up
are the San Clemente Dam
removal and general rate
increases, among other
things, including costs
related to the failed desal
project.
Cal Am’s projections are
subject to fluctuation result-
ing from other surcharges
that could come off water
bills in the next several
years. Actual rates will be set
by the PUC.
If there is no project, what
will the economic impact be?
Devastating, according to
testimony by two experts
from Berkeley Economic
Consulting.
Mark Berkman and David
Sunding, who testified dur-
ing the PUC’s review of the
previous desal project, esti-
mated the Peninsula would
say goodbye to more than $1
billion a year if it loses just
half of its current water sup-
ply, which they suggested
was the “minimum” reduc-
tion under the state cutback
order. That includes an esti-
mated $742 million annual
loss in commercial sales
from hotels, restaurants,
grocery stores and the like;
$261 million per year in lost
industrial production, such
as food production; and the
loss of 6,000 jobs.
What is the general nature
of opposition to the project?
Some believe the pro-
posed project is too expen-
sive and a privately owned
desal plant will unfairly bene-
fit Cal Am at the expense of
Peninsula customers.
Others believe the project
could end up promoting
growth on the Peninsula,
and prefer mixing additional
conservation with other
measures, such as the
increased use of graywater.
There are also concerns
about potential environmen-
tal impacts on everything
from the Monterey Bay
National Marine Sanctuary
to the Seaside basin, where
several sources of treated
water will collect.
And there are those who
specifically oppose the plan
to draw desal feeder water
from the Salinas Valley
groundwater basin because
it could exacerbate seawater
intrusion.
What are the potential
environmental impacts?
Those are being studied
in the project’s environmen-
tal impact report, which is
being conducted by San
Francisco-based Environ-
mental Science Associates
on behalf of the PUC. The
report is due in February.
Among the issues to be
considered:
® The impact of brackish
water wells on seawater
intrusion in the Salinas Val-
ley groundwater basin.
® The project’s energy
needs and carbon footprint.
® The impact of discharg-
ing a mixture of desal brine
and wastewater into the
Monterey Bay National
Marine Sanctuary.
® The effect of increasing
or decreasing the size of the
project.
® How the Seaside
basin’s water quality will be
affected by mixing desal,
aquifer storage and recovery
and groundwater replenish-
ment sources.
® The cumulative
impacts of multiple desal
plants in the region.
What happens if the project
is delayed? Will there be water
rationing or penalties?
Cal Am has already
acknowledged the project
won’t be finished by the end
of 2016, the deadline to meet
the state water board’s cease
and desist order, and isn’t
expecting the desal plant to
be online until the end of the
following year.
Company officials say
they plan to argue for a
relaxation of the deadline by
showing the state water
board that significant
progress has been made on
the project and that a new
water supply is imminent.
If the board decides to
uphold the deadline, it could
result in mandatory ration-
ing or a legal injunction to
prevent Cal Am from pump-
ing over the limit from the
river. In addition, daily pen-
alties of up to $500 for tres-
passing and $1,000 for violat-
ing the order have been
discussed.
What is the project’s
current status and
what comes next?
The project is in the mid-
dle of the PUC review pro-
cess and will hit several cru-
cial milestones in the next
few weeks.
The state water board is
scheduled to hold a public
workshop on the Peninsula
on Tuesday to consider a
key water rights report and
receive a progress report on
the proposal.
Settlement talks aimed at
an agreement over key ele-
ments of the project among
more than a dozen partici-
pants in the review process
are set to conclude in June.
A PUC workshop on the
groundwater replenishment
project that could prove criti-
cal in the eventual decision
about whether recycled
water will be part of the Pen-
insula water supply is set for
June 12.
Meanwhile, Cal Am is
seeking permission from the
state Coastal Commission
for test wells to determine if
it can pump an adequate —
and legal — amount of
feeder water from the Sali-
nas Valley groundwater
basin.
A draft environmental
impact report, recently
delayed to include more
hydrological data, is set to
be released in February next
year, with a final EIR to fol-
low in June 2014.
A proposed decision by a
PUC judge on Cal Am’s
project application is
expected in July next year,
and a final decision by the
commission is slated for
August 2014.
Jim Johnson can be
reached at 753-6753 or
jjohnson@montereyherald
.com.
Water
From page A6
MO N T E R E Y
B AY
PA C I F I C
O C E A N
C
a
r
m
e
l

R
i
v
e
r
S
a
l
i
n
a
s

R
i
v
e
r
C
a
r
m
e
l

R
i
v
e
r
S
a
l
i
n
a
s

R
i
v
e
r
218
1
1
68
101
G20
156
183
Moss
Landing
California American Water service area
Salinas
Chualar
Marina
Seaside
Del Rey
Oaks
Ryan Ranch
Bishop
Toro
Ambler
Ralph
Lane
Monterey
Presidio of
Monterey
Pacific
Grove
Pebble
Beach
Carmel
Carmel
Valley
Hidden
Hills
Carmel
Highlands
Castroville
Moss
Landing
Salinas
Marina
Castroville
Sand City
Chualar
Seaside
Del Rey
Oaks
Ryan Ranch
Bishop
Toro
Ambler
Ralph
Lane
Monterey
Presidio of
Monterey
Pacific
Grove
Pebble
Beach
Carmel
Carmel
Valley
Hidden
Hills
Carmel
Highlands
Sand City
Source: California American Water Source: California American Water JAMES HERRERA/The Herald
G16
G17
68

MONTEREY PENINSULA A QUEST FOR WATER
How much is
an acre-foot?
The desalination plant
will deliver between 6,252
and 9,752 acre-feet of
water per year, depending
on its size. So
what is an
acre-foot?
1 acre-foot of
water can
serve four to
five average-
use homes
per year.
Most customers in this area will see their bills about double to help pay for the project.
Cal Am serves about 100,000 customers.
VERN FISHER/The Herald
Fresh water movement
Clay
Water-bearing gravels
Seawater
Seawater intrusion
MO N T E R E Y
B AY
Castroville
Salinas
Chualar
End of
percolation
area
180-foot aquifer
Dunes sand aquifer
400-foot aquifer
Deep aquifer
Gonzales
Aquifer cross-section
Source: Monterey County Water Resources Agency JAMES HERRERA/The Herald
An underground view of the northwestern end of the Salinas Valley groundwater basin
where Cal Am is planning to draw feeder water for its proposed desalination plant.
David Stoldt,
general
manager of
the
Monterey
Peninsula
Water
Management
District,
talks about
the project
at the
aquifer
storage and
recovery
facility in
Seaside.
Desal
neighbor
Scan this code
for a video
from the
Sand City
desalination plant, or see
http://bit.ly/SCdesal
MPRWA Meeting, 6/13/2013 , Ìtem No. 7., Ìtem Page 4, Packet Page 22
Monterey Peninsula Regional Water Authority
Agenda Report

Date: June 13, 2013
Item No: 8.



№06/12
FROM: Authority Clerk

SUBJECT: Receive, Update, and Discuss MPRWA’s Position on Issues for MPRWA’s
Participation and Decision-Making with Respect to California Public Utilities
Commission Settlement Proceedings in A.12.04.019

RECCOMENDATION:
There is no report for this item. An oral report will take place at the meeting.
MPRWA Meeting, 6/13/2013 , Ìtem No. 8., Ìtem Page 1, Packet Page 23

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