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M I N U TE S MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA) Regular Meeting 7:00 PM, Thursday, July 25, 2013 COUNCIL

CHAMBER 580 PACIFIC STREET MONTEREY, CALIFORNIA Directors Present: Directors Absent: Staff Present: ROLL CALL Vice President Burnett led the meeting in President Della Salas absence. PLEDGE OF ALLEGIANCE REPORTS FROM BOARD DIRECTORS AND STAFF Vice President Burnett reported that the deadline for the settlement documents is unchanged and is still scheduled for on August 31, 2013 at 5:00 p.m. He explained that the pre-hearing conference has always been scheduled to be after the settlement concludes and if intervening parties are to resolve a substantial number of issues through the settlement process, the prehearing conference will be less intense. Executive Director Jim Cullem reported on a scheduled trip for August 7, 2013 to visit the Ground Water Replenishment and Desalination Facilities in Southern California. They will bring back any information and lessons learned to the Authority. PUBLIC COMMENTS Vice President Burnett opened the floor to public comment. Tom Rowley spoke representing The Monterey Peninsula Taxpayers Association regarding an article in the Carmel Pine Cone stating that the adopted position statement was a final document, but recalled statements made by Directors that it was a working document. He then spoke to the public confusion due to inaccurate information in local news publications and that he is disappointed that Monterey County is not represented on the Authority. He then requested that the Policy Position Statement more clearly specify the EIR to be a project level review of the alternative desal projects. Lastly, he spoke to the quoted baseline increase to ratepayers bills of $44 dollars and wished the Authority luck with their proposed outreach plan. Having no further requests to speak, public comment was closed. Vice President Burnett requested to agendize discussion at a future meeting of ways the Authority can assist the County to become a member of the Authority. He then spoke to Mr. Rowleys comments about the baseline bill increase of $44 and requested to get clarification from Cal Am representation. APPROVAL OF MINUTES Burnett, Edelen, Kampe, Pendergrass, Rubio Della Sala Legal Counsel, Executive Director, Clerk

MPRWA Minutes 1. July 11, 2013 Action: Approved

Thursday, July 25, 2013

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 July 11, 2013: AYES: NOES: ABSENT: ABSTAIN: RECUSED: 5 0 1 0 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio None Della Sala None None

AGENDA ITEMS 2. Receive Presentation, Discuss and Provide Direction on Adopted Position Statement Action: Discussed, Direction Provided and Approved Changes

Executive Director Cullem gave a presentation on the adopted policy position statement with the purpose to break down the elements of the currently adopted policy position statement in such a manner that the public could understand the details. He then answered questions from the Directors. Legal Counsel Freeman indicated that the presentation was for informational
purposes only and was a general overview of the policy position statement adopted at a previous meeting. Director Rubio spoke to the adopted criteria for support of the Cal Am project and requested the development of more generic criteria that could be applied to other projects as a more comparable approach. Vice President Burnett opened the item to public comment. Tom Rowley suggested changes to the presentation to clarify to the public who the Authority is, provide the status of Surcharge 2, questioned how many wells were needed for testing purposes for accurate results and lastly, questioned if the Authority had considered contracting with SPI Consultants to update their analysis to reflect relative costs. Nelson Vega spoke to the portfolio of water projects, and questioned that they be listed in terms of the priority. He questioned the term competitive economics" and suggested it be measured in dollars to the ratepayer. Lastly, he questioned why there was still discussion of other projects, as they are not demonstrating they can be successful at delivering water. Having no more requests to speak, Vice President Burnett closed public comment, responded to questions and brought the item back to the Directors for discussion. The Director's received the report and acknowledged that it is important that the public is informed of this document due to the Settlement Agreement deadline. They agreed to a few minimal word changes so the presentation could be used as an outreach document and a reference between the settlement agreement and the position statement. On a motion by Director Pendergrass, seconded by Director Rubio, and carried by the following vote, the Monterey Peninsula Regional Water Authority approved changes to the received presentation regarding the adopted position statement: AYES: NOES: ABSENT: 5 0 1 DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio DIRECTORS: None DIRECTORS: Della Sala Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, July 25, 2013 2

MPRWA Minutes ABSTAIN: RECUSED: 3. 0 0 DIRECTORS: DIRECTORS: None None

Thursday, July 25, 2013

Receive Report, Discuss and Provide Direction on Draft Scope of Services for Public Outreach Consultant Action: Discussed and Approved Scope of Services Executive Director Cullem spoke to the item and discussed the different options for public outreach without duplicating efforts of other public agencies, while keeping costs minimum. He requested direction on the draft scope of services and permission to move forward securing consultant services then answered questions from the Directors. Director Pendergrass expressed concern about the cost and spoke to opportunities for outreach via editorials in the local newspaper. Director Rubio requested that a meeting synopsis be provided to report at member city council meetings. Vice President Burnett opened the item to public comment. Nelson Vega suggested the Authority communicate why they are different from the Monterey Peninsula Water Management District and other water agencies and why this agency can deliver a successful project. Having no additional requests to speak, public comment was closed. Director Edelen indicated it was not cost effective for a consultant to attend Authority meetings. The Authority Clerk agreed to have an action summary prepared in a timely manner after the meetings to distribute to the member cities. On a motion by Director Kampe, seconded by Director Rubio, and carried by the following vote, the Monterey Peninsula Regional Water Authority approved the presented draft scope of services, eliminating the need for the consultant to attend Authority meetings, and authorized the Executive Director to solicit for Public Outreach consultant services: AYES: NOES: ABSENT: ABSTAIN: RECUSED: 5 0 1 0 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio None Della Sala None None

4.

Review, Discuss and Provide Direction on Draft Opinion Editorials for Future Publication Action: Discussed and Provided Direction Director Burnett spoke to the item and to the intent of providing opinion editorials to the Monterey Herald for publication as a method of public outreach. Executive Director Cullem spoke to the four proposed opinion editorial topics and indicated additional future articles could address items such as the cost of water, contingencies and risks. Director Burnett then spoke to the timing of the release of the articles and requested that they coincide with the release of the pending settlement agreement. The Directors discussed timing, distributions that would be acceptable under the California Brown Act, as well as the names that should be listed as endorsing the article. The Directors agreed to have the Authority President endorse the message First.

Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, July 25, 2013 3

MPRWA Minutes

Thursday, July 25, 2013

Director Burnett opened the item to public comment. Tom Rowley spoke to the importance of helping the public understand the true impact the water shortage. Nelson Vega repeated earlier comments that the Authority should not waste their political position and good reputation. He encouraged the Authority to produce water, allow growth, but keep your eye on the game. Having no further requests to speak, public comment was closed. Executive Director Cullem recapped the discussion that the Directors agreed to produce two articles prior to the next meeting. The first would address the purpose of the Authority and it is to be signed by President Della Sala. The second article is to address the settlement agreement and will be signed by both President Della Sala and Vice President Burnett. Additionally, a news release will be completed and distributed if settlement agreement is signed, as it will be a significant event and the public should be made aware. Director Burnett explained three reasons the settlement agreement is significant: 1) If there is a substantial number of intervening parties agreeing to sign, it is more than has been seen in a long time. 2) If Cal Am agrees to the settlement agreement, the savings to the public is in hundreds of millions of dollars 3) The ability to facilitate the plant being built, the various contingencies included, it substantially increases the prospective that it will cross the finish line. Executive Director Cullem then explained that after the first two editorials are released, future editorials could rotate responsibility between the different Directors and allow them to speak on their different topics of interest. Director Rubio indicated that due to Brown Act requirements only minimal Directors will not be able to review the document prior to release. Therefore, he requested a copy be sent to each Director, prior to or same time as it is sent to print. The Directors agreed and directed staff to facilitate this request. ADJOURN TO CLOSED SESSION Vice President Burnett invited public comments on the closed session item and having no requests to speak, adjourned to closed session at 8:55 p.m. 5. 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 Action: Discussed and Provided Direction to Negotiating Team Legal Counsel Freeman announced that the Directors met with the negotiating team pursuant to 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 where they discussed and gave direction to the negotiating team. If the final documents are consistent with the direction provided, the Authority authorized the President to sign the settlement negotiation documents. ADJOURNMENT Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, July 25, 2013 4

MPRWA Minutes Having no further business to conduct, the meeting was adjourned.

Thursday, July 25, 2013

ATTEST:

Lesley Milton, Clerk of the Authority

Chuck Della Sala MPRWA President

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