FEW MEMORIAL HALL OF RECORDS COUNCIL CHAMBER MONTEREY, CALIFORNIA Members Present: Members Absent: Staff Present: CALL TO ORDER ROLL CALL Chair Burnett called the meeting to order at 2:00 p.m. noting that all members are present except Members Stoldt and Huss. PLEDGE OF ALLEGIANCE REPORTS FROM TAC MEMBERS Member Siegfried questioned the MPRWA procedural rules of order and the process of discussion and amendments to original motions. Legal Counsel Freeman responded that the Authority follows Robert’s Rules of Order, even though the bi-laws indicate Rosenberg’s Rules of Order and said the Bi-Laws are in process of being updated. Member Riley requested to agendize a discussion about the Monterey Regional Water Pollution Control Agency (MRWPCA) Ground Water Recharge project and what the Authority can do to support it rather than having a portfolio approach. He also requested to agendize a formal discussion about advantages and disadvantages of public versus private ownership of desalination facilities and last he requested to discuss the Authority position of support of a contingency project. Chair Burnett greed that all three items can be agendized for future meetings. PUBLIC COMMENTS Chair Burnett invited public comment for items not on the agenda, having no requests to speak, closed public comment. APPROVAL OF MINUTES Burnett, Riedl, Siegfried, Israel, Narigi, Riley Huss, Stoldt Executive Director, Legal Counsel, Clerk


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January 24, 2013 Special Meeting Action: Approved On a motion by Member Narigi, seconded by Member Siegfried, and carried by the following vote, the Monterey Peninsula Regional Water Authority TAC approved the minutes of the Special Meeting on January 24, 2013. AYES: NOES: ABSENT: ABSTAIN: 7 0 2 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Riedl, Siegfried, Israel, Narigi, Riley None Huss, Stoldt None

AGENDA ITEMS 2. Receive Presentation from California American Water Monterey Peninsula Water Supply Project Status of Project Test Wells and Discuss Water Rights in the Salinas Valley Aquifer and Provide Direction to Staff Action: Received Presentation and Answered Questions Richard Svindland, Director of Engineering for California American Water gave a presentation regarding the status of the test wells, permitting and other processes. He indicated that the largest hurdle with the schedule is still the snowy plover nesting area and Cal Am has revised the project description to try to avoid disrupting their habitat. He also indicated that the City of Marina application is not yet complete due to one last pending agreement from the Semex operation who operates a sand mining plant, and is concerned that construction will impact the amount of sand that they can harvest. Additionally, the costs for the project increased due to modifications of the intake design. Mr. Svindland spoke to the benefits of the four primary locations under advisement, the current contingency plans and the different technical strategies that are being employed. Mr. Svindland answered questions of the TAC. Chair Burnett questioned the reasons to not put forward a slant well outside of the zone 2 c of the Salinas basin, given the concerns of the growers as well as the possibility of the sand dunes off of Highway 1. Mr. Svindland responded that it was a geology issue where some beach wells could work, but a large number would be needed that it would not be cost effective. The Semex site is too far away and in Moss Landing there is a clay plug. For the Sand Dunes, the geology is inadequate and is not likely to draw the necessary volume of water. Executive Director Reichmuth questioned how Cal Am is facilitating the request for a contingency plan done in parallel to the current plan rather than following. Mr. Svindland responded that the current proposal has 23 different mutations of alternatives. The Rainey wells at Semex is the priority plan, the second level contingency is slant well at the Semex site, third priority is Rainey wells at Semex and the fourth level option would be slant wells at Protrero Road site. He spoke to the request to facilitate a contingency in parallel and responded that it would pit different permitting agencies against each application and would actually take longer. He presented the example of having an open ocean intake permit out at the same time as a subsurface permit would be conflicting. However he indicated he was open to discuss how to expedite the 2

MPRWA TAC Minutes permitting.

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Chair Burnett recapped the language that the Directors adopted at the January 31, 2013 meeting as conditions for support of the project and said the Authority is trying to prevent having the this same conversion in the future, when it could be prevented. Items that must be addressed include issues of sea level rise, coastal erosion and other potential issues. Mr. Svindland responded that the Tim Durbin memo was submitted as part of the testimony and CEQA staff is working to address the issues cited. Chair Burnett opened the item for public comment. Libby Downey questioned the state revolving funds indicating she has not seen anything in writing. Nelson Vega questioned the legal rights of water if wells that will be slanted into the ocean are out of the footprint of the Salinas Valley if it still belongs to the Salinas Valley. He also spoke to the idea of constructing alternatives in parallel will increase costs, but reduce the total time and questioned the importance of overall cost reduction compared to time until water production. Nancy Isakson of the Salinas Valley Water Coalition thanked Cal Am for the presentation, explaining their project intentions and expressed appreciation to them for looking into utilizing the shallow aquifer even though it is limited in capacity. Bill Hood thanked Mr. Svindland for the presentation to clarify if the intent was to utilize the 180 aquifer. With no further requests to speak, Chair Burnett closed public comment. Mr. Svindland responded to public comments and questions. 3. Receive Oral Report From Executive Director Regarding The Department of Water Resources Funding Consideration, Discuss and Provide Direction to Staff Action: Received Report and Provided Direction to Staff Executive Director Reichmuth reported there has been a seat change in the Department of Water Resources for utilization for State and Federal funding, especially State Resources Funded projects investor funded utilities. He recently attended a workshop and collected extensive materials for the benefit of the Authority and said the State appears to be considering this more seriously. Staff will need to continue to work with Cal Am to see if they are eligible for SRF funding, which he thinks they are. He then indicated that the largest cost factor is the cost of money, and the key issue will be how to reduce the blended rate for borrowed capital. Chair Burnett indicated that the seventh condition adopted by the Authority is that Cal Am has to provide written proof for access to SRF fund and the Authority will work with the Monterey Peninsula Water Management District to secure SRF financing and Cal am must accept a public agency partnership if necessary. Chair Burnett opened the item to public comment. Libby Downey questioned the $99 million surcharge and how it will impact current residents. She also encouraged Cal Am to look at the cost of energy with the Monterey Regional Waste Management District. Nelson Vega spoke to Ms. Downey’s comment about the cost of water. Tom Rowley spoke to recent ads published in the Monterey Herald about other organizations claiming to represent the ratepayers and that The Monterey Peninsula Tax Payers association has been actively pursuing the option of a water project for the Peninsula since 1993 and expressed that the propaganda pieces in the newspaper are inaccurate. He then applauded efforts to try to find a lowest cost, but urged the TAC to request an update from Cal Am at every future meeting. Doug Wilhelm expressed concern that the savings from using public funds for the surcharge would not benefit many of 3


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the current ratepayers because they will not live that long, some will be impacted more than others and should be given consideration in all proposals. With no further requests to speak, Chair Burnett closed public comment and proceeded to the fourth agenda item.


Receive, Discuss and Provide Direction To Staff Regarding Update from California American Water On Compliance With MPRWA Conditions That Must Be Met Prior to Receiving MPRWA Support for Desal Project Action: Received Report and Discussed Chair Burnett indicated that this item will be incorporated as a regular agenda item for future TAC meetings. He reported to the TAC that the attached position statement was adopted on January 31, 2013 by the Authority Directors and since adoption Cal Am is not expected to have dramatic compliance changes at this time. He then requested that a Cal Am Representative speak to the document. Mr. Svindland summarized the current status of the below applicable points: • Contribution of Public Funds-Cal Am is waiting for the proposal from the Authority and until they see it and are able to have an internal review and approval of the conditions, cannot make a decision. Governance Agreement – Acknowledged staff is working on finalizing the agreement and are working with definitions and final legal modifications. Pursuing Lower Electricity Rates: The application explains electricity costs but the processes and costs reported was based on information available at the time, which was overestimated and has been updated. MPWSP will connect to PG&E regardless of other available options due to the need for a reliable powers source. The facility will be operating at 99% capacity at all times, therefore must build reliability into the project. Staff is considering various forms of power. Their motivation is for reliability as well as to get lowest cost for customers. State Resources Funding – Until the project has a certified EIR are not able to secure anything in writing regarding the eligibility for SRF funds. Cal Am has been put on the list of projects to be notified.

Chair Burnett opened the item for public comment. Bill hood spoke to the deliberation memo asking if it could be amended and changed and indicated it is hard to quantify the impact of public comment on the deliberations. He urged the Authority to consider the public comments into the governance memo. Nelson Vega requested that the TAC keep eyes on the mission given by the State Water Resources Control Board and indicated that if too many conditions are placed upon Cal Am it will be unable to deliver the water needed. Doug Wilhelm indicated that Deep Water Desal is anticipating purchasing electricity directly from Dynagy and recalled Cal Am stating it was a possibility for their project also. Dennis Ing spoke to the fact Dynagy cannot sell power directly but can sell wholesale to whole sale purchasers. DWD has memorandum of understanding with City of Salinas to enter into a municipal energy system agreement. Libby Downey questioned why Cal Am did not try to get help with the energy issue and why the Authority did not assist. With no further requests to speak Chair Burnett closed public comment



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ADJOURNMENT With no more business to come before the TAC, Chair Burnett adjourned the meeting at 3:30 p.m. Respectfully Submitted, Approved,

Lesley Milton, Clerk to the Authority

Jason Burnett, TAC Chair


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