Mprwa Revised Agenda Packet 06-09-16

Agenda
Monterey Peninsula Regional Water Authority (MPRWA)

Director's Meeting
*REVISED AGENDA*
7:00 PM, Thursday, June 9, 2016
Council Chambers
580 Pacific Street
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.
APPROVAL OF MINUTES
1.
Minutes from April 14, April 26, and May 12, 2016 - Romero
CONSENT ITEMS
CONSENT AGENDA consists of those items which are routine and for which a staff
recommendation has been prepared. A member of the public or a Councilmember may request
that an item be placed on the regular agenda for further discussion.
2.
Approve and File Authority Checks Through June 9, 2016 - Milton
3.
Receive Report on the CPUC Resolution to Advise the SWRCB of the One Year Delay in
the MPWSP EIR/EIS - Cullem
4.
Receive Report on the SWRCB Hearing on the Amended Application for Modification of
CDO 2009-0060 - Cullem
5.
Receive Report on the Submission of a Brine Disposal Agreement and a Return Water
Agreement to the CPUC - Cullem
6.
Approve Scheduling of Presentations by Deep Water Desal (DWD) and People's Desal at
Joint Board/TAC Meetings on July 14 and Aug 11, 2016 - Cullem
7.
Receive Summary Report of Phone Meetings Attended as a Representative of the

MPRWA - Kampe
Thursday, June 9, 2016
AGENDA ITEMS
8.
Receive Report on May 26, 2016 CPUC Hearings on the MPWSP Phase 2 (GWR)
Including a Presentation by Cal Am on the Inclusion of the Monterey Transfer Pipeline and
Water Tank - Cal Am
9.
Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP) and the Status of Test Slant Well Operations - Crooks
10.
Discuss and Set Priorities on the Major Tasks Ahead for the MPRWA - Kampe
11.
Consider Budget Options, and Adopt the Budget for FY 2016-2017 - Cullem
ADJOURNMENT
The City of Monterey is committed to including the disabled in all of its services, programs and
activities. In compliance with the Americans with Disabilities Act, if you need special assistance
to participate in this meeting, please contact the City Clerks Office at (831) 646-3935.
Notification 30 hours prior to the meeting will enable the City to make reasonable arrangements
to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II]. Later requests will
be accommodated to the extent feasible. For communication-related assistance, dial 711 to use
the California Relay Service (CRS) to speak to City offices. CRS offers free text-to-speech, speechto-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 the City Clerk's Office at
(831) 646-3935 to coordinate use of a device.
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 Clerks 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.
M I N U TE S
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Director's Meeting
7:00 PM, Thursday, April 14, 2016
COUNCIL CHAMBERS
580 PACIFIC STREET
MONTEREY, CALIFORNIA
ROLL CALL
Directors Present:
Directors Absent:
Staff Present:
Director Edelen, Director Kampe, Director Pendergrass, Director Rubio,

President Burnett
Director Downey
Councilmember Timothy Barrett, Executive Director Cullem, Legal Counsel
Freeman, Carmel Mayor Elect Steve Dallas, City of Monterey Engineer
Steve Wittry, Authority Clerk Romero
President Burnett called the meeting to order at 5:03pm.

President Burnett introduced Councilmember Timothy Barrett, who was present as a non-voting
representative of the City of Monterey in the absence of Director Downey. He also announced
that the Workshop item on the agenda will begin no earlier than 6:30pm, and that item #12 will
be continued to a future meeting.
Executive Director Cullem said it's been a very busy couple of months regarding the California
Public Utilities Commission (CPUC) process. He announced that Mayors Burnett and Kampe
and he will be going to San Francisco tomorrow to the CPUC with testimony, and said he
believes progress is being made. President Burnett said he will represent the Monterey
Peninsula Regional Water Authority (Authority) at the CPUC for testimony, and will introduce
Mayor Kampe in the transition as he takes over as Chair of the Authority.
President Burnett reported that legal counsel Russ McGlothlin has been at CPUC all week
representing the Authority and that there was a prehearing conference on Monday to talk about
the CPUC schedule. Commissioner Sandoval was present at the hearing and stated she
recognizes that the delay in the CPUC schedule is on the State and Federal level and not the
fault of the community. President Burnett added that there will be a motion submitted with a
proposed schedule for the CPUC making a decision on the purchase agreement for Pure Water
Monterey (PWM), the pipeline, and likely the pump station, which is an important step forward.
PUBLIC COMMENTS
President Burnett opened public comments and receiving no requests to speak closed public
comments.
MPRWA Minutes
Thursday, April 14, 2016
APPROVAL OF MINUTES
On a motion by Director Pendergrass, seconded by Director Kampe, and carried by the
following vote, the Monterey Peninsula Regional Water Authority approved the Minutes for
January 14 and March 10, 2016:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
1.
5
0
1
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
Edelen, Kampe, Pendergrass, Rubio, Burnett

None
Downey
None
None
January 14, 2016 and March 10, 2016 Romero

Action: Approved
CONSENT ITEMS
Executive Director Cullem requested that Items #7 and #5 be removed from Consent and
discussed separately.
On a motion by Director Rubio, seconded by Director Kampe, and carried by the following vote,
the Monterey Peninsula Regional Water Authority Approved Consent Items #2, #3, #4 & #6:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
5
0
1
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:

None
Downey
None
None
2.
Approve and File Authority Checks Through April 14, 2016 - Romero
Action: Approved
3.
Receive and Approve Disclosure on Potential Conflict of Interest for Brownstein Hyatt Farber
Schreck, Authority Special Legal Counsel - Cullem
Action: Approved
4.
Receive Report, Authorize a Letter to NOAA, and Provide Staff Direction in Support of a
Proposed Five (5) Year Extension of the NOAA Carmel River Mitigation Agreement - Cullem
Action: Approved Letter to NOAA
5.
Receive Report on Draft Settlement and Draft Water Purchase Agreements for Return Water
from the Cal Am Desal Facility, and Authorize Sending a Letter of Support to the CPUC for the
Draft Settlement Agreement and Water Purchase Agreements (WPAs) Including Support for
Funding Assistance Subject to Reimbursement, for the Return Water Pipeline - Cullem
Action: Authorized President Burnett and Legal Counsel to finalize and sign a Draft
Settlement Agreement and Water Purchase Agreements (WPAs) Including Support for
Funding Assistance Subject to Reimbursement, for the Return Water Pipeline
Monterey Peninsula Regional Water Authority
Director's Meeting Minutes - Thursday, April 14, 2016
2
MPRWA Minutes
President Burnett briefly described the Agency Act which prohibits export of ground water, and
any water that is pumped in the test wells from Salinas Valley must be returned to Salinas
Valley, which is about 5% of the source water for the Monterey Peninsula Water Supply Project
(MPWSP). He reported that Castroville has offered to pay for the return water from the test
wells in Salinas Valley, and any leftover water would go to the Castroville Seawater Intrusion
Project (CSIP). The draft term sheet would turn into a water purchase settlement agreement if
this is approved. He added there has been concern about cost of the pipeline to deliver the
water to Castroville, and the solution is to have the same pipeline for both Castroville and CSIP,
saving a substantial amount of money.
Rich Svindland from California American Water (Cal Am) gave background on this item and
said that they received bids to build a pipeline much lower than expected, Castroville had
money set aside for a water supply project already, and Cal Am had 1.3 million invested in a
pipeline. He continued that Castroville will buy the water from Cal Am that they need, and the
excess water would go into the CSIP system. He also said that Castroville would pay for the
cost of treating the water from the test wells if it has 100% salinity.
Councilmember Barrett asked for clarification on who is paying for the desalination of the slant
well water. Rich responded saying Castroville will pay Cal Am the same price for the slant well
water in lieu of paying to pump their own groundwater, and CSIP will pay for the excess water,
because they are saving on not pumping from wells. He added that in the agreement
Castroville will pay for the cost of the desalination of the water. Mr. Barrett asked what the cost
differential is between the price of the water and what it is being sold to Castroville for.
President Burnett responded that although the cost of desalinating water is very high, the
Agency Act prohibits the export of ground water, so the choices are very limited and thus
making some money back is better than having the water go to waste.
President Burnett opened public comments on this item:
Michael Bear, Monterey resident, voiced concern about the current progress Cal Ams
desal project.
Receiving no further requests to speak, President Burnett closed public comments.

President Burnett suggested that the action for this item would be to let legal counsel continue
to draft a settlement agreement and water purchase agreements (WPAs) including support for
funding assistance subject to reimbursement, for the return water pipeline.
On a motion by Director Kampe, seconded by Director Edelen, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Authorized President Burnett and Legal
Counsel to finalize and sign a Draft Settlement Agreement and Water Purchase Agreements
(WPAs) Including Support for Funding Assistance Subject to Reimbursement, for the Return
Water Pipeline:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
5
0
1
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:

None
Downey
None
None

3
MPRWA Minutes
6.
Receive a Budget Update, and Approve a Transfer of $70,000 from the Reserve Fund for
Preparation of the Amicus Briefing and Additional Legal and Expert Witness Expenses Related
to CPUC Proceedings - Cullem
Action: Approved
7.
Supply Project (MPWSP) and the Status of Test Slant Well Operations - Crooks
Action: Received update
Ian Crooks from Cal Am gave a brief presentation on the status of the test slant well operation
and MPWSP schedule. He stated the as soon as its approved the broken pipe will be fixed and
up and running soon thereafter.
President Burnett opened public comments:
Michael Bear, resident, voiced his concerns about erosion and the King tides. He said
the beach needs to be built back up, and the test wells should run for 190 days instead
of 170 days.
Tom Rowley, representing Monterey Peninsula Taxpayers Association (MPTA), voiced

concern about the pipeline being replaced for the future desal plant.

President Burnett said Ed Thornton recently provided advice to the MPRWA on coastal erosion.
Executive Director Cullem referenced the MPWSP Schedule currently shows an 8 month time
period for EIR to be approved by the CPUC.
PRESENTATIONS
8.
Certificate for Departing Water Authority President Jason Burnett - Kampe

Action: Presented Certificate of Appreciation to President Burnett
Director Kampe presented award of appreciation for outstanding service to President Burnett
from the Monterey Peninsula Regional Water Authority. President Burnett gave thanks to the
Board and said it has been an honor to serve on the Board and the opportunity to play a role in
helping the community.
AGENDA ITEMS
9.
Receive Report from the Technical Advisory Committee (TAC), and Questions Raised by the
CPUC on April 8, 2016, and Support the Expedited Approval and Construction of the 36-inch
Transfer Pipeline to Accommodate Ground Water Replenishment (GWR) Water Should the
PWM/GWR Project Come on Line Before Cal Am's Desal Facility - Cullem
Action: Received report; Approved the Expedited Approval and Construction of the 36inch Transfer Pipeline to Accommodate GWR Including Participation in a Joint Motion to
the CPUC
Ian Crooks from Cal Am gave a presentation on the proposed 36 inch transfer pipeline. He
4
MPRWA Minutes
explained that Cal Am's current pipeline system cannot distribute any significant amount of
water, including GWR water, in a north-south direction due to a "hydraulic trough" along Del
Monte Ave in the vicinity of Lake El Estero. A dedicated 36 inch transfer pipeline that is
currently scheduled to be built as part of the desal project would have addressed this problem.
Its cost of approximately $41 million is not a new or additional project cost. It is already included
as a part Cal Am's contracts for conveyance facilities which were awarded earlier this year
following Governance Committee approval.
The Board questioned if the construction of the pipeline will cause the City of Monterey to tear
up the streets twice. Executive Director Cullem responded saying he's spoken to Montereys
Assistant City Manager who is coordinating the installation of the pipeline with other street
paving projects.
The Board discussed Cal Am not signing on with GWR even though they are building the
conveyance for GWR and questioned who will own the pipeline. It was clarified that GWR and
pipeline would move forward together, and the proposal is that the CPUC approve GWR and
the expedited construction of the transfer pipeline.
Director Kampe reported that there were bids for 7 sections of the pipeline and several bidders
won the project, resulting in significant savings. Executive Director Cullem added that the
Technical Advisory Committee (TAC) discussed this issue at its meeting of April 4, and
recommends that the Authority support a request to the CPUC to authorize the expedited
construction of the transfer pipeline, with a construction start date no later than this summer.
This action is possible because the transfer pipeline was included in the GWR EIR which has
already been certified.
President Burnett opened public comments.
Tom Rowley, representing MPTA, said his organization supports a large desal plant with
GWR as backup, and is concerned about the impact to the ratepayers for the cost of this
pipeline.
Micheal Bear requested information on the path of the proposed pipeline through the
City of Monterey.

Ian Crooks from Cal Am responded to Mr. Bear that he will get detailed pipeline route posted
online for the public. President Burnett responded to Mr. Rowley saying that the cost of the
pipeline will be divided over a period of time. A scheduled future Surcharge II on ratepayer
water bills is intended to help finance the transfer pipeline as well a means to reduce the overall
cost of financing the desal project. The CPUC has delayed Surcharge II pending issuance of
the CPCN, since it has directed that the surcharge funds be limited to construction activities.
Should the CPUC approve expedited construction of the transfer pipeline, staff agrees with
most of the other settling parties that an earlier implementation of Surcharge II would be the
least costly way to pay for it. A major advantage to the ratepayer of an early start to Surcharge
II is that, by collecting it over a longer period of time, it could be kept lower (perhaps at the 25%
level) than the 40% currently projected if it starts after the CPCN is issued.
Following discussion, the Board voiced support of the TACs recommendation to expedite the
5
MPRWA Minutes
construction of the 36 inch pipeline.

On a motion by Director Pendergrass, seconded by Director Kampe, and carried by the
following vote, the Monterey Peninsula Regional Water Authority Supports the Expedited
Approval and Construction of the 36-inch Transfer Pipeline, Including Filing of a Joint Motion to
the CPUC, to Accommodate Ground Water Replenishment (GWR) Water Should the
PWM/GWR Project Come on Line Before Cal Am's Desal Facility:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
5
0
1
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:

None
Downey
None
None
President Burnett requested that item #10 be moved after the workshop and the Board agreed.
The meeting adjourned at 6:33pm for a 10 minute break.
10.
Receive, Discuss, and Provide Direction on a "To-Do" List including Possible Additions and
Modifications to the Water Authority Policy Position Statement Currently Under Review by the
Technical Advisory Committee (TAC) - Cullem
Action: Continued Item to a future meeting
Director Rubio requested that this item be moved to a future meeting so that there is time to
discuss it, and the Board agreed.
See item #11
11.
Conduct a Workshop with Staff of the California Public Utilities Commission (CPUC) on the
Proposed Delay in the Monterey Peninsula Water Supply Project (MPWSP) EIR/EIS Schedule Cullem
Action: No action taken; held workshop with CPUC Staff
President Burnett called the meeting back to order at 6:44pm for the Workshop item. He
introduced the members of the CPUC staff present and thanked them for coming: Rami Kahlon,
Director of Water & Audit Division, Jason Reiger, Assistant General Counsel, and Mary Jo
Borak, Supervisor, CEQA Section.
President Burnett said for background, on or about March 11, 2016, the CPUC Energy Division
sent out a "Notice to All Parties" that the schedule for completion the EIR/EIS would be delayed
until November 2017. The MPRWA believes this is unacceptable for reasons discussed at the
March 24 Special Meeting of the Water Authority, and joined other settling parties in filing a
Motion for an All Parties Meeting. The Authority invited CPUC Staff to participate in a workshop
to explain the reasons for the proposed delay and to explore whatever assistance the
community might be provide to restore the EIR/EIR schedule.
President Burnett addressed the CPUC Staff saying that the primary request of the Authority is
to tighten up the CPUC schedule and lessen delays. The portion of the EIR already had a peer
review and passed, and the Authority questions why 18 more months is needed for the CPUC
to re-review it. He asked what can be done to put the EIR back on track, and expressed
concern about getting the cease and desist order (CDO) extended for the sake of the
6
MPRWA Minutes
community.
Rami Kahlon, Director of Water and Audit Division CPUC, said that he wanted to hear from the
community and address concerns. He added that he understands the frustration in the CPUC
process causing a delay. He reported that a lot of time has been spent trying to compress the
schedule, and the draft EIR will be available in 2017. He reported that the CPUC will be
supporting the application to extend the CDO deadline.
The Board thanked the CPUC Staff for coming in person to answer questions. They voiced
collective frustration at the continuous roadblocks and requested that simultaneous actions be
done concurrently to help shorten the timeline between milestones. The Board also asked that
the CPUC acknowledge that the delays are out of the publics control and not the fault of the
community.
Jason Reiger, Assistant General Counsel, stated on behalf of the CPUC, that the delay in the
EIR is not the fault of the community in any way, and he will say this to the water control board.
He said the delay is due to the CPUC schedule. He added that the way the community has
come together on this issue is impressive.
President Burnett opened public comment with a firm 3 minute rule:
Tom Rowley, representing MPTA, said Monterey County has a small amount of
customers. In the past the water district was unsuccessful so the Authority was formed
to advocate for the community.
Rene Bosco, Marriott, said the community has been trying to solve the drought issue for
years. She stated that hotels have reduced water consumption. She requested that the
CPUC expedite the EIR and to tell the State Water Board it's not the communities fault.
Paul Bruno, Seaside Groundwater Basin, he said he is disappointed that the EIR
approval schedule cannot been tightened. He moved here in 1977 during a drought and
30 years later there is still no resolution in sight.
John Narigi, representing the Peninsula Coalition of Businesses, referenced a letter he

gave to the CPUC. He expressed the Coalitions disappointment in the delays, and
stated that ratepayers have paid millions for the EIR review.
Doug, on behalf of the Monterey Chamber of Commerce, thanked the MPRWA for its
perseverance. He said Monterey is a model for water conservation and questioned why
the community is being penalized. He added that it does note give incentive to others to
conserve water.
Rick Aldigner, from the Big Sur Inn, said the community has made many sacrifices for
years in order to conserve water. He expressed disappointment in the CPUCs delays.
Tom McMann, a Monterey Bay Laundry business owner, says his business has been
affected by water conversation, and it is hurting the community.
Theo Balesteri, Monterey resident, said the Monterey Peninsula Hospitality industry has
led the community in water conservation. He asked that the Authority and CPUC do
7
MPRWA Minutes
whatever is needed to expedite this permitting process.
Gary Cursio, representing Government Affairs, expressed concern about the community
and the threat of the CDO.
Frank Emerson, said that Steelhead in the Carmel River have been affected, and if an
alternate water supply was available this wouldnt have happened.
Michael Bear, requested that the CPUC help encourage extension of CDO.
George Riley, TAC Member, said that part of the reason for the EIR delays is due to Cal
Am. He added that slant well data analysis is still to come, and the MPRWA should look
at alternative projects in Moss Landing.
Dan Lamstand, from Community Hospital, said that the CDO is affecting the Hospitals
patient services. He requested that the CPUC repackage and reprioritize the schedule
and help get the extension on the CDO.
A member of the public said that a 1 year delay on the EIR schedule is unacceptable.
She requested that the CPUC outsource to get the process done faster.

Rami Kahlon, CPUC, addressed the public saying that he understands the frustrations of the
community. He will go back to his staff to try to expedite the EIR schedule.
Mary Jo, CPUC, said that they will continue to look for ways to shorten the time frame for the
EIR. She said the CPUC has asked for more resources and staff to work on this. Jason Reiger
said CPUC attorneys are already working with the State Water Board on getting the 5 year
extension on the CDO.
The Board asked the CPUC questions about the draft EIR:
Why does it take 1.5 yrs to address the EIR? Jason Reiger responded that water
modeling is very extensive to address the public comments, and the National
Environmental Policy Act (NEPA) has a process as well. He said the CPUC trying to
coordinate with Federal Government agencies on this.
Shouldnt there be a melding between the NEPA and the CEQA? Jason Reiger
responded that there is a consultant working on melding the two. Mary Jo said it will be
one combined document not two separate. PUC does a lot of combined documents.
Why are there 8 months in between the draft EIR and the final EIR? Jason Reiger
responded that the timeframe is driven by the public asking questions and having to
provide answers. He said there is a team working on several aspects of the questions,
and they want to make sure they are answered correctly.
What can the Authority do to help expedite the CPUCs schedule? GWR already has
broad support, a pipeline, and an EIR. Jason Reiger responded that they will have an
open dialogue and communication with the Authority and will request assistance
whenever it is needed.

8
MPRWA Minutes
The Directors of the Authority voiced concerns about the schedule model and asked the CPUC
what can be done to speed up the process. The Board also questioned whether there is a
funding or staff shortage on the CPUC level. Mary Jo responded that the modeling requires a lot
of computer power to run the models and there are few people who have the expertise to
analyze the data, and they've hired all the experts. She stated that the CPUC is working on
getting more staff.
The Board expressed their thanks to the CPUC to come to the workshop and listen to the
concerns of the community and give hope. The Board collectively told the CPUC that they are
willing to help in any way possible to expedite the process and requested updates on the
progress and EIR schedule whenever possible. Mr. Reiger said he would give the Authority
frequent updates.
12.
Receive Report, Discuss, Provide Staff Direction, and Authorize Preparation of a Letter to the
State Water Resources Control Board (SWRCB) on Proposed Modifications to the Previously
Submitted CDO Extension Application so as to Incorporate the CPUC EIR/EIS Schedule Delay
- Cullem
Action: Continued to a future meeting
The Board agreed to continue this item to a future meeting.
ADJOURNMENT
The meeting was adjourned at 9:00pm.
ATTEST:
Nova Romero, Clerk of the Authority
MPRWA President

9
M I N U TE S
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Director's Meeting
7:00 PM, Thursday, May 12, 2016
COUNCIL CHAMBERS
580 PACIFIC STREET
MONTEREY, CALIFORNIA
ROLL CALL
Directors Present:
Director Downey, Director Edelen, Director Pendergrass, Director Rubio,

Director Dallas, Interim President Kampe
Directors Absent:
None
Staff Present:
Executive Director Cullem, Clerk Romero
Staff Absent:
Legal Counsel Don Freeman
President Kampe called the meeting to order at 7:02pm.

President Kampe announced that there is a transition in the Board, with Jason Burnett stepping
down as the Authority President, and thanked everyone for their patience during this time. He
also welcomed Carmel Mayor Steve Dallas as an interim Director for the Authority.
President Kampe reported that he went to Sacramento to meet with the California Department
of Fish and Wildlife to discuss the Cease and Desist Order (CDO) and the concerns of the
Carmel River Steelhead Association about the health of the steelhead population. The outcome
of the meeting was positive and the agencies are working together on the steelhead issue.
Executive Director Cullem reported that he, Director Kampe and previous President Burnett
recently met with the California Public Utilities Commission (CPUC) regarding the rebuttal
process. He also reported that letters were sent to the National Oceanic and Atmospheric
Administration (NOAA) and the Defense Base Closure and Realignment Commission (BRAC),
in effort to gain support from these agencies on the Water Supply Project. A letter was sent to
the County requesting they contribute their fair share to the Authority. He added that All settling
parties are on board with extending the CDO deadline.
Director Edelen questioned why the Steelhead Association hasnt given support for the
Authority. Executive Director Cullem responded that although the Steelhead Association has
remained neutral on supporting the Authoritys mission, in the end they will likely be supportive.
President Kampe said the Steelhead Association is afraid of losing the fish population, but
realizes that the Authority wants to help save water and the fish population in the Carmel River.
President Kampe noted that an article in the newspaper was published reporting that the
CPUC admitted responsibility for the delay in the Environmental Impact Report (EIR). He also
announced that he has spoken to Jason Burnett who has offered to make himself available on
an on-call basis as a liaison to help with the Authority.
Director Downey made a request that the Mayors go after the County for their fair share of the
contribution to the Authority. She also said that Ground Water Replenishment (GWR) has been
MPRWA Minutes
Thursday, May 12, 2016
successful in producing potable water. She requested more frequent updates in the future
regarding public water and deep water. Director Dallas recommended that a letter be sent to all
of the County Supervisors requesting the County pay their fair share.
PUBLIC COMMENTS
None
APPROVAL OF MINUTES
1.
March 24, 2016 and April 14, 2016

Action: Approved Minutes from March 24, 2016, continued Minutes from April 14, 2016
PUBLIC COMMENTS
None
DISCUSSION
Executive Director Cullem requested that the Minutes from April 14 be pulled because they
were not ready. Director Downey and Director Dallas both abstained from voting because they
were not present at the March 24th meeting.
On a motion by Director Pendergrass, seconded by Director Edelen, and carried by the
following vote, the Monterey Peninsula Regional Water Authority Approved Minutes from March
24, 2016, and continued the Minutes from April 14, 2016:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
4
0
0
2
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
Edelen, Pendergrass, Rubio, Kampe

None
None
Dallas, Downey
None
CONSENT ITEMS
The Board requested that Item #3 be removed from consent.
PUBLIC COMMENTS
None
On a motion by Director Downey, seconded by Director Edelen, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Approved the Consent Agenda, except
for Item #3:
AYES:
DIRECTORS:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
0
0
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
Dallas, Downey, Edelen, Pendergrass, Rubio,

Kampe
None
None
None
None

Director's Meeting Minutes - Thursday, May 12, 2016
2
MPRWA Minutes
2.
Approve and File Authority Checks Through May 12, 2016

Action: Approved Checks
3.
Receive a Copy of the Final Amended Application for Order Modifying State Water Board
Order SWB 2009-0060 (Cease and Desist Order)
Action: Removed from Consent; Discussed; Received Amended Application
Executive Director Cullem clarified that the amendment in the Final Amended Application for
Order Modifying State Water Board Order SWB 2009-0060, reflects the change in the number
of acre feet that California American Water can take from the Carmel Valley River to 8,310. All
settling parties have agreed to this amendment in the application, which was submitted in time.
The Board did not take any action on this item, the Amended Application was received.
PUBLIC COMMENTS
None
AGENDA ITEMS
4.
Consider and Decide Board Officer Assignments Following the Departure of Board President
Jason Burnett
Action: Approved the Assignment of Vice President Kampe as the President of the
Authority until the Election in July
Executive Director Cullem said that since Jason Burnett is no longer the Authority President, it
is recommended that Vice President Kampe be assigned the role of Acting President until the
Board has an election in July.
PUBLIC COMMENTS
None
DISCUSSION
The Board agreed that the recommendation is appropriate and covered by the Authoritys
bylaws.
On a motion by Director Downey, seconded by Director Edelen, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Approved the Assignment of Director
Kampe as Board President until the Election in July:
AYES:
DIRECTORS:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
0
0
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:

Kampe
None
None
None
None

3
MPRWA Minutes
5.
Review the Brine Discharge Agreement and Authorize Authority Executive Director,
President/Vice President, and/or Special Counsel to Negotiate Final Terms and Sign the
Agreement
Action: Approved the Brine Discharge Agreement with the Condition that the Monterey
Peninsula Water Pollution Control Agency Accept Mitigation and Authorized Authority
Executive Director, President/Vice President, and/or Special Counsel to Negotiate Final
Terms and Sign the Agreement
President Kampe gave a brief explanation of the Brine Discharge Agreement. He stated that
discussions between representatives of Cal Am, the Monterey Peninsula Water Management
District (MPWMD), the Monterey Peninsula Water Pollution Control Agency (MPWPCA), the
Surfriders Association, and the MPRWA, were conducted to address brine disposal, monitoring,
and permits. The Authority President, Special Counsel, and other interested parties have
sought to develop an acceptable brine discharge monitoring solution.
President Kampe requested Legal Counsels input on this item, and Russ McGlothlin was
called and put on speakerphone during the meeting. Mr. McGlothlin agreed with President
Kampes explanation added that the issue of monitoring brine discharge in two locations will be
resolved. Mr. McGlothlin continued that the recommendation is that the Board authorize the
Executive Director, President/Vice President, and/or Special Counsel to negotiate the minor
remaining issues and sign the agreement.
Director Rubio voiced concerns about any mitigations of the diffuser, and questioned if this was
brought up at the last MPWPCA meeting. Mr. McGlothlin responded that if this item is approved
tonight, the Board should add a condition in the motion that MPWPCA is comfortable with the
mitigation.
PUBLIC COMMENTS
None
DISCUSSION
Director Rubio suggested that the Authority approve the Brine Discharge Agreement and add
the condition regarding MPWPCA acceptance of mitigation.
On a motion by Director Rubio, seconded by Director Downey, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Approved the Brine Discharge
Agreement with the Condition that the Monterey Peninsula Water Pollution Control Agency
Accept Mitigation and Authorize Authority Executive Director, President/Vice President, and/or
Special Counsel to Negotiate Final Terms and Sign the Agreement:
AYES:
DIRECTORS:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
0
0
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:

Kampe
None
None
None
None

4
MPRWA Minutes
6.
Receive Report, Discuss, and Approve an Increase in the FY 2015-2016 Budget to Provide for
Additional Special Counsel Services and Authorize Utilization of $50,000 from the Reserve
Account
Action: Approved moving $50,000 from Reserve Account for Special Counsel Services
Executive Director Cullem said that $25,000 is required for special counsel expenditures,
including bills from last year that need to be paid. He requests that the board approve an extra
$50,000 for legal counsel. This request $50,000 to be reallocated for special counsel is based
on the projections from last year, and the bills from last year that need to brought up to date.
PUBLIC COMMENTS
None
DISCUSSION
The Board expressed that the expenditures on legal counsel are an important investment at this
critical stage. The Board recognized that legal counsel has been vital throughout the process
with the CPUC.
On a motion by Director Edelen, seconded by Director Rubio, and carried by the following vote,
the Monterey Peninsula Regional Water Authority Approved an Increase in the FY 2015-2016
Budget to Provide for Additional Special Counsel Services and Authorize Utilization of $50,000
from the Reserve Account:
7.
AYES:
DIRECTORS:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
0
0
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:

Kampe
None
None
None
None
Receive a Report on the Preliminary Budget for FY 2016-2017 and Provide Staff Direction
Action: Received Report
Executive Director Cullem reported that he has kept this years budget relatively the same, with
the addition of the projected cost of extra legal counsel. The proposed budget amounts to
$350,000 for fiscal year 2016-2017.
PUBLIC COMMENTS
George Riley, MPRWA Technical Advisory Committee Member, said that instead of
funding a full year of legal services, a higher priority should be on political input from the
Authority. He questioned if the benefits of legal counsel are worth the cost and
suggested that political pressure at this stage is more valuable.
A resident commented that the legal issues facing the Authority have been interesting to
him.

5
MPRWA Minutes
John Narigi, representing the Coalition of Peninsula Businesses, said that now is not the
time to cut back on the budget. He added that the Authority has tremendous credibility
and requested that the Authority no pull back. He said that the County needs to pay
their fair share, and it's wrong that they havent contributed.
Receiving no further requests to speak, public comments was closed.

DISCUSSION
President Kampe inquired if the Cities could make quarterly payments, instead of one lump
sum. Director Rubio questioned what the increased cost would be per each City. Director
Cullem responded that he will provide an updated contribution summary for each City, stating
what the contribution amount will be if the County does pay or doesnt pay their fair share.
Director Edelen said he agreed with Director Downey's suggestion to meet with the County and
apply pressure for them to make their fair fair contribution. President Kampe reported that 6
weeks ago the Authority received pushback from the County about contributing. Director
Downey suggested putting pressure on the County through the media.
Executive Director Cullem suggested that the Mayors make public comment during the next
Board of Supervisors meeting, when the press is present. The Board agreed with this
suggestion.
President Kampe voiced support of the $350,000 budget. Director Dallas said that letters
should be sent to the County and that press should be notified, and then again at the meeting.
Director Pendergrass observed that the representative of the County stopped attending the
MPRWA meetings, and stated that the County Board of Supervisors have been irresponsible by
not contributing.
Director Downey made a motion to approve budget, to write a letter to the County, and go to
the next County Board of Supervisors meeting. Director Edelen amended motion to include that
the letter be sent to the County in advance and state that the Authority will be attending the
County meeting. President Kampe recommended that the letter come from the Authority Chair,
and not mention the Authority attending the meeting. Director Edelen withdrew his amendment
to the motion.
On a motion by Director Downey, seconded by Director Dallas, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Approved the Preliminary Budget for FY
2016-2017, and Authorized the Chair to Write a Letter to the County, and Attend the next Board
of Supervisors Meeting:
AYES:
DIRECTORS:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
0
0
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:

Kampe
None
None
None
None
Director Dallas recommended that a press release be made regarding the County not making
their fair share contribution, and make a point that water is a high priority.
Executive Director Cullem suggested that the press release be addressed after giving the
County another chance to make their contribution. The Board discussed ideas regarding an
6
MPRWA Minutes
editorial in the paper, and getting media coverage on this topic.

8.
Supply Project (MPWSP) and the Status of Test Slant Well Operations
Action: Received Update; Discussed
Ian Crooks with Cal am presented an update on the MPWSP schedule, including the projected
schedule for GWR being available for use in 2018. He reported that pipeline construction will
begin in 2017.
Executive Director Cullem stated in regard to the MPWSP schedule, once the Certificate of
Public Convenience and Necessity (CPCN) is obtained, approval from the City of Marina for
coastal development permits could be a lengthy process, especially if Marina appeals to
Coastal Commission for resolution and ends up in litigation. Mr. Crooks said that there is a 6
month schedule for this process.
Director Rubio inquired if the permit application for the wells is ready. Mr. Crooks responded
that Marina could start preparing the permit application now, or ideally as soon as the EIR is
completed.
PUBLIC COMMENTS
Mr. Caruthers said that he would like to see a website that gives information to the
public on the water supply project.
Receiving no further requests to speak, public comments was closed.

President Kampe responded to Mr. Caruthers that the MPRWA does have a website,
mprwa.org, that is simple but good information is available there.
ADJOURNMENT
Meeting adjourned at 8:42pm.
ATTEST:
Nova Romero, Clerk of the Authority
MPRWA President

7

Agenda Report
FROM:
Date: June 09, 2016

Item No: 2.
Authority Finance Clerk Milton
SUBJECT: Approval and File Authority Checks through June 9, 2016

RECOMMENDATION:
It is recommended that the Authority approve and file the accounts payable payments
made during the period May 12, 2016 through June 9, 206 with total payments for the
above referenced period of $44,917.45 from the general fund account and authorize the
Directors to sign for such checks.
DISCUSSION:
At its meeting on September 12, 2013, the Authority Board approved a staff
recommendation to provide the Directors a listing of financial obligations since the last
report for inspection and confirmation. Each invoiced expense has been reviewed and
approved by the Executive Director and Finance personnel prior to payment to insure that
it conforms to the approved budget.
The following checks are hereby submitted to the Authority for inspection and
confirmation.
$42,022.92 to Brownstein Hyatt Farber and Schreck for Special Legal Counsel
Services For April and February, 2016
$2,500 to Perry & Freeman for Legal Counsel Services for June 2016
$160.93 to Access Monterey Peninsula for Meeting Video Services
$ 230.60 to Bill Kampe for reimbursement expenses for the CPUC Hearings in
San Francisco May 2016
The bank balance as of May 31, 2016, is sufficient cover the above check therefore,
staff is recommending approval.
ATTACHMENTS:
Budget to Actual Report through May 31, 2016
12:28 PM
05/10/16
Accrual Basis
Profit & Loss Budget vs. Actual

July 1, 2015 through May 10, 2016
Jul 1, '15 - May 10, 16
Budget
$ Over Budget
Ordinary Income/Expense
Income
47200 Program Income
47230 Membership Dues
137,000.00
137,000.00
0.00
47240 Membership Dues FY 14-15
153,000.00
153,000.00
0.00
80,000.00
80,000.00
0.00
47250 Transfer from Reserves

47260 Reimburesment VE Contract
0.00
0.00
0.00
47200 Program Income - Other
8.50
0.00
8.50
Total 47200 Program Income
370,008.50
370,000.00
8.50
49900 Uncategorized Income
0.00
0.00
0.00
370,008.50
370,000.00
8.50
60901 Clerk of the Board
2,000.00
24,000.00
-22,000.00
60902 Executive Director
51,894.85
85,000.00
-33,105.15
Total Income
Expense
60900 Administration and Clerical
60903 Principal Offc of the Authority
2,000.00
5,000.00
-3,000.00
60904 Financial Services
3,500.00
6,000.00
-2,500.00
374.47
500.00
-125.53
60905 Misc Admin Expenses

60900 Administration and Clerical - Other
Total 60900 Administration and Clerical
0.00
0.00
0.00
59,769.32
120,500.00
-60,730.68
32,500.00
36,000.00
-3,500.00
121,290.42
160,000.00
-38,709.58
62100 Legal Fees

62110 Board Counsel
62140 Special Counsel
62100 Legal Fees - Other
0.00
0.00
0.00
153,790.42
196,000.00
-42,209.58
50.00
0.00
50.00
0.00
0.00
0.00
62802 Audit Services
6,442.00
6,000.00
442.00
62803 Televised Meeting
2,922.50
5,000.00
-2,077.50
Total 62100 Legal Fees
62800 Contract Services

60801 Public Outreach
60806 Contract VE
0.00
0.00
0.00
62805 Contract SPI
62804 Contract Services & Studies
25,656.76
0.00
25,656.76
62800 Contract Services - Other
28,419.80
20,000.00
8,419.80
63,491.06
31,000.00
32,491.06
6,438.48
7,500.00
-1,061.52
Total 62800 Contract Services
65000 Insurance
65100 Travel Expenses
961.65
5,000.00
-4,038.35
66000 Payroll Expenses
0.00
0.00
0.00
68300 Contingency
0.00
10,000.00
-10,000.00
284,450.93
370,000.00
-85,549.07
Total Expense
Page 1 of 4
12:28 PM
05/10/16
Accrual Basis

Jul 1, '15 - May 10, 16
Net Ordinary Income
Budget
$ Over Budget
85,557.57
0.00
85,557.57
1.02
0.00
1.02
1.02
0.00
1.02
Other Income/Expense
Other Income
47220 Interest Earned
Total Other Income
Other Expense
80000
Total Other Expense
Net Other Income
Net Income
0.00
0.00
0.00
0.00
0.00
0.00
1.02
0.00
1.02
85,558.59
0.00
85,558.59
Page 2 of 4
12:28 PM
05/10/16
Accrual Basis

% of Budget
Ordinary Income/Expense
Income
47200 Program Income
47230 Membership Dues
100.0%
47240 Membership Dues FY 14-15
100.0%
47250 Transfer from Reserves
100.0%
47260 Reimburesment VE Contract

47200 Program Income - Other
0.0%
100.0%
Total 47200 Program Income
100.0%
49900 Uncategorized Income
0.0%
Total Income
100.0%
Expense
60900 Administration and Clerical
60901 Clerk of the Board
8.33%
60902 Executive Director
61.05%
60903 Principal Offc of the Authority
40.0%
60904 Financial Services
58.33%
60905 Misc Admin Expenses
74.89%
60900 Administration and Clerical - Other

Total 60900 Administration and Clerical
0.0%
49.6%
62100 Legal Fees

62110 Board Counsel
90.28%
62140 Special Counsel
75.81%
62100 Legal Fees - Other

Total 62100 Legal Fees
0.0%
78.47%
62800 Contract Services

60801 Public Outreach
60806 Contract VE
62802 Audit Services
62803 Televised Meeting
62804 Contract Services & Studies
100.0%
0.0%
107.37%
58.45%
0.0%
62805 Contract SPI
100.0%
62800 Contract Services - Other
142.1%
Total 62800 Contract Services
204.81%
65000 Insurance
85.85%
65100 Travel Expenses
19.23%
66000 Payroll Expenses
0.0%
68300 Contingency
0.0%
Total Expense
76.88%
Page 3 of 4
12:28 PM
05/10/16
Accrual Basis

% of Budget
Net Ordinary Income
100.0%
Other Income/Expense
Other Income
47220 Interest Earned
Total Other Income
100.0%
100.0%
Other Expense
80000
Total Other Expense
Net Other Income
Net Income
0.0%
0.0%
100.0%
100.0%
Page 4 of 4

Agenda Report
FROM:
Date: June 09, 2016

Item No: 3.
Executive Director Cullem
SUBJECT: Receive Report on the CPUC Resolution to Advise the SWRCB of the
One Year Delay in the MPWSP EIR/EIS
RECOMMENDATION:
It is recommended that the Monterey Peninsula Regional Water Authority (MPRWA)
receive a report on a CPUC Resolution to address the proposed delay in the MPWSP
EIR/EIS schedule with the State Water Resources Control Board.
DISCUSSION:
On or about March 11, 2016, the CPUC Energy Division sent out a "Notice to All
Parties" that the schedule for completion of the EIR/EIS would be delayed until
November 2017. Since this situation was unacceptable for reasons discussed at the
March 24 Special Meeting of the Water Authority, the Authority joined other settling
parties in filing a Motion for an All Parties Meeting (APM) with ALJ Weatherford and
Commissioner Sandoval. That APM took place on April 11 at the CPUC.
In the APM, Commissioner Sandoval committed to seeking a Resolution from the CPUC
explaining the role of the CPUC in extending completion of the MPWSP EIR/EIS
resulting in a one-year delay in the project. The resolution was to be sent to the SWRCB
prior to its July 19 consideration of the amended application for the CDO extension.
To date, the Resolution has not been considered by the CPUC.
ATTACHMENTS:
None
06/12

Agenda Report
FROM:
Date: June 09, 2016

Item No: 4.
SUBJECT: Receive Report on the SWRCB Hearing on the Amended Application for
Modification of CDO 2009-0060
RECOMMENDATION:
Staff recommends that the Water Authority Receive a report on the SWRCB hearing on
the Amended Application for Order Modifying State Water Board Order SWB 2009-0060
(Cease and Desist Order- CDO)
DISCUSSION:
As approved by the Water Authority Board on April 26, the MPRWA, along with Cal Am
and the MPWMD, proposed an amendment to the previously submitted CDO extension
application. The complete Amended Application can be found on the Authority web site
at www.mprwa.org.
The primary reason for the late submission of the amendment (April 29, 2016) was the
CPUC EIR/EIS delay that needed to be factored into the application. It was also noted
at that time that a "forbearance" agreement between Cal Am and likely purchasers of
the Lombardo golf courses in Carmel Valley was important enough to other interveners
that they have agreed to support the amended application.
Of concern at the time was that the SWRCB would materially delay its consideration of
the CDO Extension due to the amendments being submitted in April. However, the
SWRCB staff has advised that the Board will consider the amended application at its
meeting of July 19, 2016.
Three MPRWA Board members can attend the SWRCB meeting on July 19 in
conformance with the Brown Act.
ATTACHMENTS:
None
06/12

Agenda Report
Date: June 09, 2016

Item No: 5.
FROM:
SUBJECT:
Receive Report on the Submission of a Brine Disposal Agreement and a

Return Water Agreement to the CPUC
RECOMMENDATION:
It is recommended that the Water Authority Board receive an update on the Brine
Disposal Agreement and an update on the Return Water Agreement.
DISCUSSION:
BRINE DISPOSALSupplemental testimony on the issue of "brine disposal" was presented to the CPUC
Administrative Law Judge (ALJ) on January 22, 2016. At that time a draft term sheet on
brine disposal was submitted by representatives of Cal Am, the MPWMD, the
MPWPCA, the Surfriders Association, and the MPRWA. Its purpose was to reduce the
likelihood of extensive rebuttal or litigation over brine disposal monitoring, resolve one of
the outstanding issues in the "large" supplemental agreement of 2013, and incur the
least possible cost to the ratepayers.
Rebuttal testimony on brine disposal was submitted to the ALJ on March 22, 2016
following two months of settlement discussions, during which the Authority had the
assistance of expert Al Preston, Ph.D., P.E., of Geosyntec (SPI sub-consultant).
A proposed final brine term sheet was presented to the ALJ at the CPUC hearings the
week of April 11, 2016. Since that time, negotiations led to a draft Brine Disposal
Agreement that was presented to the Water Authority Board at its meeting of May 12,
2016. At that meeting the Board authorized the Board President and/or Special Counsel
to finalize negotiations, sign the agreement on behalf of the MPRWA, and submit it to
the CPUC ALJ by the due date of June 14, 2016. The most recent draft is at Attachment
A.
RETURN WATEROn January 14, 2016, the Authority voted to support a draft term sheet submitted to the
CPUC as supplemental testimony on January 22 in which Cal Am would sell "return
water" to the CCSD. In addition any additional "excess return water" is to be sold to the
Castroville Seawater Intrusion Project (CSIP). Though return water and excess return
water will be sold at different rates, both are below that charged for water delivery to
ratepayers. In the case of "return water" to the CCSD, the price is based on their
06/12
"avoided costs of pumping" and for "excess water" it is the "marginal cost of production"
at the desal facility.
This situation is less than desirable from a ratepayer perspective, but the MPSWP is
required to return that portion of the water to the Salinas River Basin, and if it cannot be
sold at some price to an eligible buyer, it would have to be returned for free.
Since January, the involved parties, including MPRWA legal support and staff, have
negotiated a draft settlement agreement, and draft water purchase agreements (WPAs)
with the CCSD and CSIP. A complicating issue was how to assist the CCSD bridge the
gap between the funding available to build a pipeline for the return water (or construct a
new well) versus the estimated cost of construction. This issue will be addressed in the
WPAs. These draft documents and pipeline funding issue were considered by the
Authority Board at its meeting of April 14, 2016.
At that meeting, the Board authorized the Authority President and/or the Special
Counsel to sign the Return Water Settlement Agreement, support the WPAs, and
support a grant or a reasonable loan arrangement to enable the CCSD to build the
return water pipeline. The signed agreement is to be submitted to the CPUC by June
14, 2016. The most recent draft is at Attachment B.
ATTACHMENTS:
A- Draft Brine Disposal Agreement dated 5/28/16
B- Draft Return Water Settlement Agreement dated 4/12/16
May 28, 2016

Surfrider Draft
BRINE DISCHARGE SETTLEMENT AGREEMENT (A.12-04-019)
1.
GENERAL
1.1
Pursuant to Article 12 of the Rules of Practice and Procedure of the
California Public Utilities Commission (Commission), California-American Water
Company (California American Water), Monterey Peninsula Regional Water
Authority (MPRWA), Monterey Regional Water Pollution Control Agency
(MRWPCA), and Surfrider Foundation (Surfrider) [OTHER PARTIES]
(collectively, the Parties), to avoid the expense and uncertainty of litigation of
some of the matters in dispute between them before the Commission, agree on the
terms of this Agreement, which they now submit for review, consideration, and
approval by the Commission.
On April 23, 2012, California American Water initiated Commission
1.2
proceeding A.12.04.019 (the Proceeding) by filing an application for a Certificate
of Public Convenience and Necessity (CPCN) for the Monterey Peninsula Water
Supply Project (Project) and Authorization to Recover All Present and Future
Costs in Rates (Application). The purpose of the Project is to replace a significant
portion of the existing water supply from the Carmel River, as directed by the State
Water Resources Control Board (SWRCB). (SWRCB Order Nos. WR 95-10 (July 6,
1995) and; WR 2009-0060 (Oct. 20, 2009).) The Project requires, inter alia, a
desalination plant and related facilities including slant intake wells, brackish water
pipelines, the desalination plant, product water pipelines, brine disposal facilities,
and related appurtenant facilities.
1.3
The proposed brine disposal facilities would consist of a 3 million
gallon brine storage basin and a brine discharge pipeline, which would connect to a
new brine mixing structure that will connect in turn to the existing MRWPCA outfall.
The outfall rests on the ocean floor and terminates in a diffuser with 171 2-inch
ports 129 of which are open, spaced 8 feet apart. During the non-irrigation season
(November through March), Project brine would be diluted prior to discharge with
treated wastewater from the MRWPCA Regional Wastewater Treatment Plant.
During the irrigation season (April through October), that wastewater is diverted
for irrigation and undiluted Project brine would be discharged into Monterey Bay.
1.4
The Draft Environmental Impact Report (DEIR) for the Project
determined that the Projects environmental impact related to brine discharge
would be less than significant. The DEIR is presently under revision and will be
recirculated as a combined revised draft environmental impact
report/environmental impact statement (RDEIR/DEIS) pursuant to the California
Environmental Quality Act (Public Resources Code sections 21000 et seq.) (CEQA)
and the National Environmental Policy Act (42 U.S.C. sections 4321 et seq.), with the
1
CONFIDENTIAL SETTLEMENT COMMUNICATION
(Rule of Practice and Procedure 12.6)
May 28, 2016

Surfrider Draft
Commission and the Monterey Bay National Marine Sanctuary (the Sanctuary) as
lead agencies. It is the Parties understanding that the analysis of brine-related
impacts may be revised as well
1.5
Surfrider [OTHER PARTIES?] submitted comments on the DEIR
challenging the assumptions and methodology supporting the DEIRs conclusions
concerning the impacts of brine discharge on benthic communities and the
Sanctuary ecosystem as a whole.
This proposed Agreement, if adopted by the Commission, would
1.6
provide a compromise resolution of Surfriders concerns about marine impacts
related to brine discharge. This Agreement would avoid the uncertainty of a
continued challenge, based upon those marine impacts, to the adequacy of
environmental review and to Commission issuance of a CPCN for the Project,
without excessive costs to ratepayers.
1.7
The Effective Date of this Agreement shall be the date on which the
last Party executes the Agreement. Subsequent to the Effective Date, the Parties
contemplate obtaining the Commissions approval of this Agreement, and if such
approval is not obtained, any Party may withdraw from the Agreement in
accordance with Section 6.6. Nevertheless, as of the Effective Date and continuing
during the period until the Commission approves, approves with modifications, or
rejects the Agreement, the Monitoring Program obligations set forth in Section 3.1.c
shall be in force, and as of the Effective Date and during the period until the
Commission grants or denies the CPCN, the Parties shall abide by the procedures set
out in Sections 2 and Paragraphs 3.2(a) and 3.2(d).
2.
AGREEMENT TO NOT OPPOSE BRINE DISCHARGE
Surfrider will not oppose in the Proceeding the use of the MRWPCA outfall to
discharge brine from the Project desalination facility, as currently proposed in the
Proceeding. Surfrider reserves the right to support or oppose other potential Project
brine discharge locations and methods, including locations that have been identified
as contingencies or alternatives in the Proceeding. Notwithstanding the foregoing, if
any Party requests that the Commission not impose any mitigation measure
identified by a revised and recirculated DEIR to reduce or avoid the Projects
environmental impacts related to brine, Surfrider may advocate for the imposition
of such mitigation. Additionally, if a revised and recirculated DEIR identifies
significant and unavoidable environmental impacts related to the Projects brine
discharge, Surfrider may advocate for mitigation measures to reduce such impacts
to less-than-significant levels.
3.
MONITORING PROGRAM
California American Water shall implement a brine monitoring program (the

Agreed Monitoring Program) as follows:
2
May 28, 2016

Surfrider Draft
3.1
Monitoring and Data Collection.
a.
At least one year prior to the first discharge of the Projects
brine into the Sanctuary, California American Water shall install equipment
required to monitor the salinity levels in the seawater at intervals of no more
than 15 minutes or to perform any equivalent protocol required pursuant to
either an Alternative Monitoring Program (as defined in Paragraph 3.2
below) or a standard imposed pursuant to Paragraph 4.1(a)(B) below (the
Monitoring Equipment). California American Water shall install the
Monitoring Equipment in at least four locations (the Monitoring Locations).
Unless modified pursuant to Paragraph 3.2 below, the Monitoring Locations
shall be within ten feet of the ocean floor in each of the following locations,
which are depicted for illustrative purposes only on Exhibit A:
i.
The Zone of Initial Dilution Location: 10 meters
downslope of the outfall;
ii.
The Compliance Point Location: 100 meters downslope
of the outfall;
iii.
The Far Field Location: 1000 meters downslope of the
outfall, intended to measure far-field effects;
iv.
The Reference Location: 1000 meters north of the
outfall, and along the same elevation contour as the outfall, which is
intended to measure conditions without the influence of the outfall.
Commencing at installation of the monitoring equipment and
b.
continuing throughout the life of the Project, California American shall
operate and maintain the Monitoring Equipment in good working order,
ensuring that it is collecting and recording data at intervals of no more than
15 minutes. California American Water shall replace and maintain the
Monitoring Equipment as necessary to ensure such data collection.
c.
Beginning on the Effective Date and continuing until the date
that the Project begins to regularly provide customers with water from the
desalination component of the Project (the Project Commencement Date),
California American Water shall collect data on the Salinity, and any other
brine constituent for which a standard is imposed pursuant to Paragraph
4.1(a)(B) below, from each Monitoring Location no less than once each
calendar month. Prior to the time the Monitoring Equipment is installed, data
shall be collected from at least the following four approximate locationson
the outfall, 500 meters north of the outfall, 500 meters south of the outfall,
and 1000 meters downslope of the outfall. After the Monitoring Equipment
is installed, data shall be collected from each Monitoring Location. Each data
collection shall include the following protocol:
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i.
Collect all data recorded since the last collection, or,
during the period of monthly monitoring, take sufficient samples to
analyze Salinity, and any other brine constituent for which a standard
is imposed pursuant to Paragraph 4.1(a)(B) below .
ii.
After the installation of the Monitoring Equipment,
check and re-calibrate the Monitoring Equipments salinity probe
using standard commercial practices.
iii.
Record the amount of re-calibration required.
iv.
Measure and record a vertical salinity profile, taking
measurements at depth intervals of less than one meter.
d.
Beginning at Project Commencement Date, California American
Water shall collect data at each Monitoring Location no less than once very
sixty (60) days, using the protocol described in Paragraph 3.1(c). .
Following each data collection, California American Water shall
e.
analyze the collected data and post the analyzed data on the Project website
and/or the California American Water website. Upon posting the data,
California American shall notify the Parties and the Commission of such
posting and shall inform them of how to obtain the raw data, which it shall
make freely available to any Party and the Commission. If at the later of two
years after the Project Commencement Date and the close of the period of
Watershed Sanitary Survey mandated by the State Water Resources Control
Boards Division of Drinking Water pursuant to the California Surface Water
Treatment Rule (California Code of Regulations Title 22, Division 4, Chapter
17, Article 7 - Sanitary Surveys), the 24-hour average salinity measured at
the Compliance Point Location is less than 75% of the salinity standard
specified in section 4.1 below, for 45 days without interruption, California
American Water may reduce the frequency of data collection to not less than
once every three months.
f.
California American Water shall use commercially reasonable
efforts to obtain any regulatory approvals required for the installation of the
Monitoring Equipment or operation of the Agreed Monitoring Program or
Alternative Monitoring Program (as defined below). The other Parties shall
use commercially reasonable efforts to support California American Waters
efforts. If California American Water fails to obtain any required approval,
the Parties will meet and confer to consider how to implement a monitoring
program that achieves the purposes of this Agreement, given preference to
programs that include in situ monitoring rather than intermittent sampling
by boat. Prior to the implementation of any such revised monitoring
program, and if California American Water is unable to obtain all necessary
approvals for such revised monitoring program, California American Water
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shall undertake the following monitoring program (the Monthly Monitoring
Program), which shall in those circumstances suffice to meet the
requirements of this Agreement (1) measure the salinity, including the
vertical salinity profile, at each of the Monitoring Location not less than once
per calendar month and (2) share such data pursuant to Paragraph 3.1(e)
above. .
3.2
Alternative Monitoring Programs
a.
Consideration of Proposed Alternative Monitoring
Program. If a public agency with jurisdiction over the Project requires a
monitoring program that differs from the program set out in Paragraph 3.1
above California American Water shall promptly provide written notice of
such requirement to the other Parties, including a proposal to implement
such program or a combination of such and some portion of the Agreed
Monitoring Program (a Proposed Alternative Monitoring Program). The
Parties shall consider, and upon the request of any Party, meet to discuss,
whether the Proposed Alternative Monitoring Program, is equally or more
protective of the Sanctuary than the Agreed Monitoring Program or
otherwise a suitable substitute for the Agreed Monitoring Program, with
consideration given to the frequency or accuracy of monitoring and data
collection of the Proposed Alternative Monitoring Program. Within thirty
(30) days of receipt of California American Waters notice of the Proposed
Alternative Monitoring Program each Party may provide California American
written notice of whether or not it approves the Proposed Alternative
Monitoring Program. If every Party that responds to such notice informs
California American Water that it approves the Proposed Alternative
Monitoring Program, , then shall be deemed an Alternative Monitoring
Program that California American Water shall implement in lieu of the
Agreed Monitoring Program. A Party that does not respond to California
American Waters notice within the time set out above shall be deemed to
have approved the Proposed Alternative Monitoring Program.
b.
Disputes regarding the adequacy of a Proposed Alternative
Monitoring Program shall be resolved as follows.
i.
If one or more Parties inform California American
Water by their written notice that they do not approve the Proposed
Alternative Monitoring Program, then California American Water shall
either continue to implement the Agreed Monitoring Program or
initiate dispute resolution by designating a scientist or engineer with
expertise in brine discharge and diffusion into marine environments
(a Brine Expert). The Party(s) disputing the adequacy of the
Proposed Alternative Monitoring Program shall also designate a Brine
Expert and those two Brine Experts shall promptly select a third Brine
Expert. The third Brine Expert shall determine whether the Proposed
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Alternative Monitoring Program will be deemed an Alternative
Monitoring Program, with consideration given to the frequency or
accuracy of monitoring and data collection of the Proposed
Alternative Monitoring Program. Each Party shall have the
opportunity to present its position and supporting arguments to the
third Brine Expert in writing; the Parties and the third Brine Expert
shall agree on a schedule for such briefing. The reasonable costs of the
retention of all three Brine Experts shall be paid or reimbursed by
California American Water.
ii.
If the third Brine Expert determines that the Proposed
Alternative Monitoring Program should be deemed an Alternative
Monitoring Program, then California American Water shall implement
the Alternative Monitoring Program in lieu of the Agreed Monitoring
Program. If the third Brine Expert determines that the Proposed
Alternative Monitoring Program should not be deemed an Alternative
Monitoring Program, or if California American Water has chosen not
to initiate dispute resolution, then California American Water shall
continue to undertake the Agreed Monitoring Program in addition to
any monitoring program required by any public agency with
jurisdiction over the Project.
c.
California American Water agrees to make commercially
reasonable efforts to obtain any Commission approval required for the
implementation of an Alternative Monitoring Program. The other Parties
agree to support such efforts.
d.
The Parties acknowledge that pending revisions to the DEIR
may include analysis demonstrating that one or more of the Monitoring
Locations or another aspect of the Agreed Monitoring Program should be
revised. The Parties shall meet and confer promptly following the release of a
revised and recirculated DEIR to determine whether its analysis warrants
modification to the Agreed Monitoring Program. If the Parties agree to such
modification, they will inform the Commission by joint motion. If the Parties
do not agree to such modification, any Party may individually move the
Commission for a modification of the Agreed Monitoring Program.
4.
COMPLIANCE, ENFORCEMENT, AND MITIGATION

4.1
Salinity Standard.
a.
The Project shall, from the Project Commencement Date and
continuing through the life of the Project, comply with the salinity standard
of this Agreement. The Project shall be in compliance with the salinity
standard if the 24-hour average of measured salinity (or, under the Monthly
Monitoring Program, each monthly salinity measurement) is no greater than
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(A) 2 parts per thousand greater than the salinity at the Reference Location,
or (B) any other salinity or other brine constituent standard established by a
public agency with jurisdiction over the Project, including a standard of
significance applied to the Project pursuant to either CEQA or NEPA. The
standard set out in clause (A) of this paragraph shall be applied to, salinity at
the Compliance Point Location and the Far Field Location.
b.
If a public agency with jurisdiction over the Project imposes a
salinity standard on the Project that differs from that set out in clause (A) of
Paragraph 4.1(a) above, California American Water shall promptly notify the
other Parties. The Parties shall meet and confer to determine whether that
standard shall be incorporated into this Agreement. If the Parties fail to reach
consensus, they shall use the dispute resolution mechanism set out in Section
5 below.
4.2
Exceedances.
In the event that data collected from the Monitoring Program

a.
shows an exceedance of the standard described in Paragraph 4.1, California
American Water shall provide notice of such exceedance to all Parties and the
Commission no more than ten (10) days following the collection of the data
showing the exceedance. California American Water shall then perform a
thorough review to determine if the exceedance was caused by a factor or
factors that would excuse the exceedance, such as erroneous measurement
or temporary or unusual circumstance related to plant operations or the
marine environment. This review shall consider all relevant data, including
without limitation brine discharge operational data, salinity data from all
four Monitoring Locations, the vertical profile data from all four Monitoring
Locations, any re-calibration of the salinity probes, and the duration of the
exceedance. California American Water may, at its sole discretion, take
additional measurements of Salinity or other brine constituents as a part of
its review.
b.
Not more than forty (40) days after the collection of the data
showing the exceedance, California American Water shall provide a report of
its review to the other Parties and the Commission. The report shall include a
conclusion as to whether the exceedance should be excused. If the report
determines that the exceedance should be excused, then each Party and the
Commission may determine, in its sole discretion, whether it concurs with
that conclusions, and convey its determination to California American Water
in writing. Any Party or the Commission that does not respond to the report
in writing within twenty-one (21) days of its receipt of the report shall be
deemed to have concurred with the reports conclusion.
4.3
Non-Compliance. California American Water shall be out of
compliance with the Agreement if an exceedance of the salinity standard described
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in Paragraph 4.1 is not excused, either because (a) the report described in
Paragraph 4.2 determines that an exceedance should not be excused or (b) any
Party declines to concur with a report determining that an exceedance should be
excused.
4.4
Mitigation.
Upon a determination that the Project is out of compliance

a.
with this Agreement, California American Water shall promptly identify and
report to the Parties mitigation measures that can further dilute the Projects
brine to comply with the standard set out in Paragraph 4.1. Such measures
may include, without limitation:
i.
Retrofitting the existing outfall to increase pressure at
the diffuser ports or to make other modifications;
Constructing a new pressurized diffuser structure
ii.
designed solely for the discharge of brine. This would likely have
ports inclined vertically upwards and other design considerations
(e.g., increased discharge velocity) to maximize dilution;
iii.
Operating the desalination plant at a lower permeateto-brine ratio in order to produce brine effluent at reduced
concentration; or
Achieving rapid dilution of brine through another
iv.
discharge method or design that the Parties determine is mutually
agreeable.
b.
Following receipt of California American Waters list of
potential mitigation measures, the parties shall meet and confer to select a
mutually agreeable measure or set of measures that will allow the Projects
discharge to comply with the standard set out in Paragraph 4.1. They shall
give preference to measures that are cost effective, capable of timely
implementation, and otherwise reasonable. The Parties shall not select any
measure that would materially interfere with MRWPCAs ability to comply
with any permits regulating the outfall pursuant to the National Pollutant
Discharge Elimination System. If after sixty (60) days from the date of the
collection of the data showing the exceedance, the Parties have not
designated a mutually agreeable mitigation option, California American
Water shall undertake either 4.4(i) 4.4(ii), or 4.4(iii) above.
c.
California American Water shall use all commercially
reasonable efforts to commence implementation of the selected mitigation
option within four months of its selection.
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d.
The Parties agree to explore, immediately upon the execution
of this Agreement, the best mechanisms to expedite the time required for
Commission approval of the selected mitigation. In particular, the Parties
agree to investigate cost recovery mechanisms for the mitigation measures,
including the filing of a Tier 2 advice letter, which the Commission may
approve, as part of the CPCN under consideration in this proceeding. The
Parties may request modification of this Agreement to include such
ratemaking provisions.
4.5
Breach. If a Party breaches any of its obligations under this
Agreement, the Party to whom the obligation was owed may notify the breaching
Party of such breach. The Parties shall then promptly engage in the dispute
resolution mechanism described in Section 5 below, concerning the appropriate
means to remedy such alleged breach. If the alleged breach is not waived by all
Parties or cured, in either event no later than thirty (30) days of the delivery of the
mediators decision rendered pursuant to Paragraph 5.2, (which period may be
extended by the consensus of the other Parties, each in their sole discretion), the
Party or Parties claiming the breach may initiate proceedings in a court of
competent jurisdiction seeking injunctive relief or specific performance to the
extent permitted by law. For avoidance of doubt, non-compliance as defined in
Paragraph 4.3 is not in itself a breach of an obligation under the Agreement.
4.6
Remedies. The Parties have determined that (1) monetary damages
are generally inappropriate as remedy for breach of this Agreement, (2) it would be
extremely difficult and impractical to fix or determine the actual damages suffered
by any Party as a result of a breach, and (3) equitable damages and remedies at law
not including damages are the appropriate remedies for enforcement of this
Agreement. No Party would have entered into this Agreement if it were to be liable
in damages under this Agreement. Consequently, the Parties agree that equitable
damages and remedies at law not including damages shall be the sole remedies
available to each Party for breach of this Agreement.
5.
DISPUTE RESOLUTION.
5.1
If a dispute arises concerning any controversy or claim arising out of
or relating to this Agreement or the breach thereof or relating to its application or
interpretation, including without limitation those types of disputes expressly
directed to this mechanism in the Agreement, the aggrieved Party will notify the
other Party of the dispute in writing within twenty (20) days after such dispute
arises. If the Parties fail to resolve the dispute within fifteen (15) days after delivery
of such notice, each Party will promptly nominate a senior officer or agent of its
organization to meet at any mutually-agreed time and location to resolve the
dispute. The Parties shall use their best efforts to reach a just and equitable solution
satisfactory to both Parties. If the Parties are unable to resolve the dispute to their
mutual satisfaction within thirty (30) days after the initial notice of alleged breach,
the dispute will be subject to mediation, pursuant to Paragraph 5.2. The time
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periods set forth in this Paragraph 5.1 are subject to extension as agreed to by the
Parties.
5.2
If a dispute is not resolved pursuant to Paragraph 5.1 the Parties
agree to first endeavor to settle the dispute in an amicable manner, using mandatory
non-binding mediation initiated and conducted under the applicable rules of the
American Arbitration Association in effect as of the Effective Date or other rules
agreed to in writing by the Parties, before having recourse in a court of law. The
Parties shall select a mediator and initiate meditation no more than fifteen (15) days
following the running of the thirty-day deadline set out in Paragraph 5.1. Each Party
shall bear its own legal expenses, and the expenses of witnesses for either side shall
be paid by the Party producing such witnesses. All expenses of the mediator,
including required travel, and the cost of any proofs or expert advice produced at
the direct request of the mediator, shall be paid or reimbursed by California
American Water. Any resultant agreements from mediation shall be documented in
writing. All mediation proceedings, results, and documentation, including without
limitation any materials prepared or submitted or any positions taken by or on
behalf of either Party, shall be confidential and inadmissible for any purpose in any
legal proceeding (pursuant to California Evidence Codes sections 1115 through
1128), unless such admission is otherwise agreed upon in writing by the Parties.
Mediators shall not be subject to any subpoena or liability, and their actions shall
not be subject to discovery. The mediation shall be completed within thirty (30)
days after selection of the mediator, unless the Parties, each their sole discretion,
agree to extend the mediation period.
6.
GENERAL
This Agreement reflects a settlement and compromise of putative

6.1
claims and remedies of the Parties. The Parties have therefore entered into each
stipulation contained in the Agreement on the basis that its approval by the
Commission not be construed as an admission or concession by any Party regarding
any fact or matter of law in dispute in this proceeding.
6.2
The Parties agree that no signatory to this Agreement assumes any
personal liability as a result of the Agreement.
6.3
Each of the Parties hereto and their respective counsel and advocates
have contributed to the preparation of this Agreement. Accordingly, the Parties
agree that no provision of this Agreement shall be construed against any Party
because that Party or its counsel drafted the provision.
6.4
This Agreement supersedes any prior representations by the Parties
regarding each stipulation contained herein.
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6.5
The Parties agree to use their best efforts to obtain Commission
approval of this Agreement. The Parties shall request that the Commission approve
the Agreement without change and find the Agreement to be reasonable, consistent
with the law, and in the public interest.
6.6
The Parties agree that this Agreement is an integrated agreement
such that if the Commission rejects or modifies any portion of this Agreement, each
Party must consent to the Agreement as modified, or any Party may withdraw from
the Agreement. Such consent may not be unreasonably withheld. As between the
Parties, this Agreement may be amended or changed only by a written agreement
signed by all of the Parties. If Surfrider withdraws from the Agreement pursuant to
this Paragraph 6.6, the Agreement shall be null and void.
6.7
If the Commission approves this Agreement with modifications, the
Parties request the Commission to provide a reasonable period for the Parties to
consider and respond to such modification. In that event, each Party shall determine
no later than two business days before the deadline imposed by the Commission for
acceptance of the modification whether it will accept the modification and shall
notify the other Parties of its determination. If any Party declines to accept the
Commissions modification, the other Parties may still accept the modification and
request the Commission to approve the revised Agreement in the absence of the
agreement of the Party or Parties who decline to accept the Commissions
modification; provided, however, that if the applicant California American Water is
among the Parties who decline to accept the Commission's modification, the
Agreement shall be void and the Parties will request that the Commission establish
a procedural schedule to address the disputed issues.
6.8
If the Commission does not approve this Agreement , Surfrider [insert
other Parties] reserves its rights to challenge the Project on any ground available,
including the impacts of brine discharged from the Project, in any appropriate
forum, Paragraph 1 and any other provision of the Agreement notwithstanding.
6.9
Among other things, this Agreement helps to define a stable and finite
project description that will facilitate the Commissions completion of CEQA review
for the Project. The legal effectiveness of this Agreement is contingent on the
completion of CEQA review and does not irretrievably commit the Parties to
carrying out any physical activities that would be required for California American
Water to meet its obligations under this Agreement. The Commission, as the lead
agency, and all responsible agencies will retain full discretion with respect to
deciding whether to approve or disapprove any commitments necessary or
convenient for California American Water to address matters relating to the
discharge of brine from the Project, including full discretion to consider, approve or
disapprove alternatives, and also including full discretion to modify commitments
and/or adopt other mitigation measures relating to brine discharge to avoid or
reduce any significant adverse physical environmental effects from the activities
that are within their jurisdiction.
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6.10 Surfrider has made a substantial contribution to this Agreement and
to the resolution of other issues in the Proceeding.
6.11 This Agreement does not impact the terms of sections 3.1(a) of the
document known as the Large Settlement Agreement.
6.12 This Agreement may be executed in any number of counterparts.
779230.13
12
4/12/16 DRAFT version 2

BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF CALIFORNIA
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
Application No. 12-04-019

(Filed April 23, 2012)
SETTLEMENT AGREEMENT ON
MPWSP DESALINATION PLANT RETURN WATER
Robert G. MacLean
President
California American Water
1033 B Street, Suite 200
Coronado, CA 92118
For: California-American Water Company
robert.maclean@amwater.com
(619) 522-6361
Nancy Isakson
President
Salinas Valley Water Coalition
3203 Playa Court
Marina, CA 93933
For: Salinas Valley Water Coalition
nisakson@mbay.net
(831) 224-2879
Chris Fitz
LandWatch Monterey County
P.O. Box 1876
Salinas, CA 93902-1876
For: LandWatch Monterey County
landwatch@mclw.org
(831) 759-2824 [75-WATCH]
Norman C. Groot
Monterey County Farm Bureau
P.O. Box 1449
1140 Abbott Street, Suite C
For: Monterey County Farm Bureau
norm@montereycfb.com
(831) 751-3100
[ADDITIONAL PARTIES LISTED BELOW]

Dated: May __, 2016
4/12/16 DRAFT version 2

David Chardavoyne
Monterey County Water Resources Agency
893 Blanco Circle
Salinas, CA 93901
For: Monterey County Water Resources
Agency
chardavoyneDE@co.monterey.ca.us
(831) 755-4860
Jason Burnett
President
580 Pacific Street, Room 6
Monterey, CA 93940
For: Monterey Peninsula Regional Water
Authority

Authorization to Recover All Present and Future
Costs in Rates
Application No. 12-04-019

SETTLEMENT AGREEMENT ON
MPWSP DESALINATION PLANT RETURN WATER
Pursuant to Article 12 of the Rules of Practice and Procedure of the California Public Utilities
Commission (CPUC), California-American Water Company (Cal Am), Landwatch
Monterey County (Landwatch), the Monterey County Farm Bureau (MCFB), the Monterey
County Water Resources Agency (Agency), the Monterey Peninsula Regional Water Authority
(Authority), and the Salinas Valley Water Coalition (SVWC) (collectively, the Parties)
agree on the terms of this Settlement Agreement, which they now submit for review,
consideration, and approval by the CPUC.
RECITALS
A.
Cal Am is seeking permits and approvals for the Monterey Peninsula Water Supply Project
(Project), including a certificate of public convenience and necessity from the CPUC.
B.
The Project includes a desalination plant that will provide a potable water supply for Cal
Ams Monterey Peninsula service area. Rather than using an open-ocean intake that would
produce only seawater as source water for the desalination plant, the Project desalination
plant will produce its source water from subterranean slant wells drilled adjacent to the
ocean, which will draw water from strata underlying the ocean. The location of the wells
overlies the western portion of the Salinas River Groundwater Basin (SRGB).
C.
Cal Am characterizes its Project as proposing to develop seawater and brackish

groundwater originating from the SRGB to produce source water that would be desalinated
to provide a potable water supply for Cal Ams Monterey Peninsula service area.
D.
The SVWC, MCFB and Landwatch contend thatrather than proposing to use an openocean intake that would produce only seawaterCal Ams Project proposes to use wells
developed in the SRGB to produce source water for desalination to provide Cal Ams
Monterey Peninsula service area with a new source of water supply.
E.
The ratio of seawater to brackish SRGB groundwater in the Project source water is
anticipated to change over time, with more seawater and less SRGB groundwater
1
anticipated later in the Projects life.

F.
Cal Am contends that source water production by the Project is unlikely to cause
significant adverse environmental effects with respect to SRGB groundwater resources and
is unlikely to cause injury to prior groundwater rights in the SRGB but submits that the
Monterey County Water Resources Agency Act (Agency Act) authorizes the Monterey
County Water Resources Agency (Agency) to obtain an injunction prohibiting the export
and use of SRGB groundwater outside of the SRGB and certain areas of Fort Ord.
G.
The Agency, SVWC, MCFB and Landwatch submit that the Agency Act directly prohibits
the export and use of SRGB groundwater outside of the SRGB and certain areas of Fort
Ord without the need for the Agency to obtain an injunction.
H.
The Projects slant intake wells are designed to produce source water for treatment by the
selected desalination plant (Project Source Water Production). To meet applicable
requirements of the Agency Act, Cal Am has proposed as part of the Project to make
available for delivery to groundwater users overlying the SRGB a volume of water
(Return Water) equal to the percentage of SRGB groundwater in the total Project Source
Water Production, as calculated on a water year basis and determined by the Agency.
I.
The SVWC, MCFB and Landwatch contend there is no surplus SRGB groundwater
available for Cal Ams use in providing public water service within or outside of the SRGB
and that the law of California groundwater rights requires that any production and use of
SRGB groundwater by the Project must be returned for use within the SRGB in lieu of
existing groundwater pumping.
J.
For Project planning and engineering purposes, Cal Am submits that the Project source
water wells have been designed so that approximately 4% of the source water produced by
the Project will originate as brackish groundwater from the SRGB.
K.
For planning purposes, Cal Am has assumed that the Return Water volume for the large
desalination plant will be 1,080 acre feet annually (afa) and, for the small desalination
plant, 690 afa.
L.
The CPUC is conducting environmental review of the Project under the California
Environmental Quality Act (CEQA), and the Monterey Bay National Marine Sanctuary
is conducting environmental review of the Project under the National Environmental Policy
Act (NEPA).
M.
The modeling used in the CPUCs April 2015 CalAm Monterey Peninsula Water Supply
Project Draft Environmental Impact Report (DEIR) estimates that the volume of SRGB
groundwater produced as source water for the large-scale (9.6 million gallons per day)
Project would be approximately 7 percent, or 1,889 afa, under existing land-use conditions
and would be approximately 4 percent, or 1,080 afa, under projected future 2060 land-use
conditions, and would average approximately 5.5 percent, or 1,485 afa, over the life of the
Project. (DEIR at 4.4-67.)
N.
Note C to the CPUCs DEIR Table 2-5 states that groundwater modeling indicates that as
2
much as 1,080 afa may need to be returned to the Salinas Valley Groundwater Basin (based
on 4 percent of total source water intake being drawn from the Salinas Valley Groundwater
Basin) and states that Project supply would be sufficient to provide this larger quantity of
return water.
O.
The CPUC is preparing a revised DEIR/Environmental Impact Statement (RDEIR/DEIS)

for the Project that will assess the significance of effects to SRGB groundwater resources,
and the modeling in the revised RDEIR/DEIS will be updated and calibrated to include test
well production data obtained to date (over 100 days of pumping). Cal Am also is working
to gather additional (up to two years) test well production data to inform analysis of those
effects. The full data set is not expected to be available before the CPUCs completion of
CEQA/NEPA review and its decision whether to approve a certificate of convenience and
necessity for the Project.
P.
The Parties and the State Water Resources Control Board are in agreement, and the DEIR
concludes, that delivering Return Water by injecting desalinated water from the Project into
the SRGB is less desirable than delivering Return Water for beneficial use in in the SRGB.
Q.
Castroville Seawater Intrusion Project (CSIP) is an Agency project that provides

recycled water and diverted Salinas River water for use in lieu of groundwater pumping for
irrigated agricultural use in the Castroville area of the SRGB.
R.
It has been proposed that Cal Am Return Water obligations be fulfilled, in part, by delivery
of Return Water to CSIP. Prior environmental analyses reveal that there may be limitations
in the capacity of CSIP to accommodate all of the Project Return Water under some
conditions. (DEIR, p. 2-45, 6-4, 6-114; Pure Water Monterey, GWR DEIR, Appendix Q,
Table B-3).
S.
The SVWC, MCFB and Landwatch contend that the Projects well production may cause
injury to the SRGB and senior groundwater rights holders in the SRGB under California
groundwater law, even if the RDEIR/DEIS concludes that the well production would not
cause a significant adverse effect under CEQA.
T.
MCFB, SVWC and Landwatch oppose any scenario where Return Water would be used
outside the SRGB, rather than for use in lieu of existing groundwater pumping in the
SRGB.
U.
In the July 31, 2013 Settlement Agreement among 16 parties to Proceeding A.12-04-019,
MCFB, SVWC, Landwatch, the Agency, and Citizens for Public Water reserved all rights
to challenge production of water from the SRGB by Cal Am in any appropriate forum
based on their concerns for potential harm to the SRGB and users thereof.
V.
MCFB and SVWC have stated they may litigate these issues if they are not resolved
through agreement.
W.
Cal Am and the Authority maintain that any obligation to return SRGB groundwater to the
SRGB arises only as a requirement of the Agency Act, except to the extent that Return
Water is necessary as part of a physical solution to avoid harm to the SRGB and senior
3
groundwater rights holders in the SRGB under California groundwater law or to mitigate
significant adverse effects to the SRGB or particular groundwater users pursuant to CEQA.
X.
Cal Am, with the encouragement of the Authority, also desires to maximize revenue for
Return Water to offset water costs and water rates for Cal Am customers on the Monterey
Peninsula.
Y.
Cal Am must obtain CPUC approval to deliver or sell any Return Water for use outside of
Cal Ams service area.
Z.
A controversy has now arisen as to Cal Ams obligation to deliver Return Water to the
SRGB, and as to the responsibility for the costs of producing the Return Water, and the
Parties to this Settlement Agreement resolve these issues through this Settlement
Agreement.
AA. Pursuant to the terms of this Settlement Agreement, the Parties propose that Cal Am deliver
Return Water to the Castroville Community Services District (CCSD) and to the CSIP to
satisfy Return Water requirements that may arise out of the Agency Act, CEQA, or
California groundwater law, in accordance with terms and conditions and general
principles contained in this Settlement Agreement and separate Return Water Purchase
Agreements between Cal Am as seller and CCSD and the Agency, respectively, as
purchasers of Return Water.
BB. To facilitate planning and review, the Parties and CCSD executed a Return Water Planning
Term Sheet (Planning Term Sheet) on January 22, 2016 (Appendix A). At a regular
meeting called and held on January 19, 2016, the Board of Directors of CCSD adopted
Resolution No. 16-2 (Appendix B) approving execution of the Planning Term Sheet. The
form of the Planning Term Sheet approved by Resolution 16-2 is consistent with the
Planning Term Sheet executed by the Parties and CCSD on January 22, 2016. CCSD and
the Parties have met and conferred since January 22, 2016 concerning the terms for a
Return Water Purchase Agreement between CCSD and Cal Am (CCSD RWPA)
consistent with the Planning Term Sheet. The Board of Directors of CCSD is scheduled to
review the draft CCSD RWPA at a regular meeting on April 19, 2016 and consider
approving submission of the CCSD RWPA to the CPUC for planning purposes and review.
CCSD submits that CCSD would sign a CCSD RWPA after expiration of the statute of
limitations for challenging a decision by the CPUC certifying the Project environmental
impact report and approving this Settlement Agreement.
CC. In the Planning Term Sheet, CCSD submits that it provides municipal and domestic water
service to the Town of Castroville, which overlies the SRGB in an area north of the City of
Marina and west of the City of Salinas.
DD. In the Planning Term Sheet, CCSD submits that it currently relies on groundwater from the
SRGB to meet Castrovilles water demands, which use averages approximately 780 afa.
EE. In the Planning Term Sheet, CCSD submits that it increasingly has experienced water
supply challenges due to water quality degradation of its water supplies, primarily from
increased salinity.
4
FF. In the Planning Term Sheet, CCSD submits that poor water quality, including elevated
sodium levels in CCSDs groundwater supplies, can contribute to health risks of
individuals susceptible to high sodium.
GG. In the Planning Term Sheet, CCSD submits that it has been identified as a disadvantaged
community (Greater Monterey County IRWM Regional Water Management Group
Disadvantaged Community Outreach Plan, Prepared for the Environmental Justice
Coalition for Water by Nilsen & Associates, Approved April 18, 2012), and was an active
participant in the Regional Plenary Oversight Group process established by the Office of
Ratepayer Advocates to determine whether the Regional Desalination Project, a
predecessor project to the Project, would be a source of supply for Castroville.
HH. In the Planning Term Sheet, CCSD submits that many of CCSDs customers contribute
significantly to agricultural and hospitality industries in the Salinas Valley and on the
Monterey Peninsula.
II.
In the Planning Term Sheet, CCSD submits that it is actively pursuing alterative water
supplies and has applied to the State for funding to develop deeper groundwater wells and
other projects to serve its customer demands.
JJ.
In the Planning Term Sheet, CCSD submits that it is interested in taking delivery of a
Return Water supply from the Project to replace or supplement CCSDs current reliance on
groundwater from the SRGB.
KK. Cal Am contemplated two separate pipelines delivering Return Water from the Project
desalination plant, one to CSIP ponds and one to CCSDs wellsite #3 (CCSD Wellsite).
Through negotiations and discussions, the Parties have found a way to decrease the cost of
new infrastructure by tapping into existing CSIP infrastructure. The result is one pipeline
from the desalination plant to the CCSD Wellsite that will intersect with, and connect into,
an existing CSIP pipeline (CSIP Connection). There would no longer be a need for a
separate pipeline to the CSIP ponds which results in an estimated cost savings to Cal Am of
approximately $[___] in avoided pipeline and pump station costs. The CCSD engineers
preliminary cost estimate for a pipeline and ancillary facilities necessary to convey water
from the Project desalination plant to the CCSD Wellsite (Delivery Pipeline) is
approximately $6,500,000. Cal Am believes that if the Delivery Pipeline is constructed by
Cal Am there will economies of scale achieved which may reduce the cost of the Delivery
Pipeline to approximately $4,400,000, assuming that Cal Am will secure contracts for
construction of the pipeline and that environmental review and permitting will be
performed in conjunction with the Project. CCSD estimates its cost to construct a new
deep well with treatment facilities would cost approximately $2,800,000. Thus, CCSD
submits that it may not be able to prudently fund the Delivery Pipeline for more than
$2,800,000, and that capital obligations for the Delivery Pipeline would necessitate longterm commitments by CCSD and certainty of source water supply for CCSD.
LL. The SVWC, MCFB, and Landwatch support Cal Ams delivering Return Water to CCSD
and to CSIP for use in lieu of existing groundwater pumping in the SRGB.
MM. The Parties submit that Cal Ams delivery of Return Water to CCSD and CSIP pursuant to
the terms of this Settlement Agreement is a fair and equitable resolution of the disputed
matters described above, and is consistent with the law and policy controlling the CPUCs
approval of the Project, and therefore desire to settle the differences between and among
them discussed in the preceding Recitals by entry into this Settlement Agreement.
AGREEMENT
NOW, THEREFORE, as a COMPROMISE and SETTLEMENT of the above-stated dispute, and
to provide for an efficient and effective resolution of this dispute, the Parties do hereby AGREE
to the following terms:
1. The recitals are hereby incorporated in this Settlement Agreement as if fully set forth herein.
2. Cal Am will deliver Return Water to the SRGB for use in lieu of existing groundwater
production as follows:
a. Subject to Cal Ams Return Water obligations under this Settlement Agreement, Cal
Am anticipates delivering Return Water pursuant to two Return Water Purchase
Agreements, attached hereto in draft form as Appendix C, and Cal Am, CCSD and
the Agency intend to enter into the Return Water Purchase Agreements.1
b. In order to ensure Cal Ams compliance with the Agency Act, the Parties agree that
upon start-up of the Project, the first 175 acre-feet of Return Water delivered by Cal
Am pursuant to this Settlement Agreement (Reserve Water) shall be delivered to
CSIP.
c. Cal Am shall have annual Return Water requirements (Annual Return Water
Obligation) that shall be calculated based on the percentage of SRGB groundwater
in the total Project Source Water Production. Cal Ams Annual Return Water
Obligation under this Settlement Agreement shall not begin until the day after the full
amount of Reserve Water has been delivered to CSIP (the Obligation Start Date).
i. During the first three months after the Obligation Start Date, the Annual
Return Water Obligation shall be 7% of total Project Source Water Production
1
Cal Am is in discussions with the Monterey Regional Waste Management District (MRWMD) regarding the
potential for potable water supply delivery by Cal Am to MRWMDs landfill site that is contiguous to the
desalination plant facilities in an amount not to exceed MRWMDs historical average pumping amount estimated at
6 afa. The landfill site cannot use its existing wells for human consumption due to nitrate contamination and,
currently, potable water is trucked-in to provide service. In addition, Cal Am is also in discussions with Monterey
Regional Water Pollution Control Agency (MRWPCA) regarding the potential for potable water supply delivery
by Cal Am to MRWPCAs site located near the desalination plant facilities in an amount not to exceed MRWPCAs
historical averaging pumping amount estimated at 11.9 afa. MRWPCA is currently pumping SRGB groundwater
for use at its site and any such potable water supply provided by Cal Am would directly reduce the corresponding
amount of groundwater pumping by MRWPCA. The Parties agree that if Cal Am delivers potable water supply to
MRWMDs landfill site and/or MRWPCAs site, such water (a) will be counted toward Cal Am satisfying its return
water obligations under the Agency Act, and (b) will be subject to Cal Ams applicable commercial customer tariff
for its Monterey District.
during that period. For the remainder of the water year after the first three
months have passed, the Annual Return Water Obligation shall be the
percentage of SRGB groundwater in the total Project Source Water
Production calculated during the first three months after the Obligation Start
Date.
ii. Beginning in the first full water year after the time period set forth in
subsection i. above expires, the Annual Return Water Obligation in any given
year shall be the sum of (a) the Base Return Water Obligation for that year, as
determined pursuant to subsection iii. below, plus (b) any Return Water
Shortfall for the prior year, as determined pursuant to subsection iv. below,
minus (c) any Return Water Surplus for the prior year, as determined pursuant
to subsection v. below.
iii. The volume of the Base Return Water Obligation shall be initially calculated
each year by Cal Am based on the methodology set forth in Appendix D and
Cal Am shall notify the other Parties, in writing, of the result of such
calculation by December 1 of each year. Such notification shall include all
calculations leading to such result. Within 14 days following receipt of such
notification, the Agency shall notify the other Parties, in writing, of its
determination regarding the accuracy of Cal Ams calculation of the volume
of the Base Return Water Obligation. If the Agency determines the result is
not accurate, its notification shall explain the reason for such determination.
Within 21 days after any written notification by the Agency that it has
determined that Cal Ams calculation is not accurate, the Parties shall meet to
seek to reach agreement regarding the volume of the Base Return Water
Obligation for that year. If the Parties do not reach agreement within 30 days
after the initial meeting, any Party may on or after the 31st day, but no later
than the 91st day, invoke the provisions of Section 9.
iv. The volume of any Return Water Shortfall for a given year shall be
determined by subtracting the amount of Return Water made available by Cal
Am in that year from the amount of the Annual Return Water Obligation for
that year. If the amount of Return Water made available by Cal Am in that
year equals or exceeds the Annual Return Water Obligation, the Return Water
Shortfall for that year shall be equal to zero.
v. The volume of any Return Water Surplus for a given year shall be determined
by subtracting the amount of the Annual Return Water Obligation for that
year from the amount of Return Water provided by Cal Am to CCSD and the
Agency in that year. If the amount of Annual Return Water Obligation in that
year equals or exceeds the amount of Return Water provided by Cal Am to
CCSD and the Agency, the Return Water Surplus for that year shall be equal
to zero.
d. Subject to Section 8, Cal Ams obligation to make Return Water available for use in
lieu of existing groundwater pumping in the SRGB to meet its Annual Return Water
7
Obligation shall survive for a period of 30 years following start-up of the Project even
if the Return Water Purchase Agreements are not executed, do not become effective,
or are otherwise amended or terminated.
e. Cal Am shall make available for delivery to CCSD 690 afa of Return Water (CCSD
Delivery Volume).
f. If the Annual Return Water Obligation is less than the CCSD Delivery Volume, Cal
Am shall make available for delivery potable water in an amount equal to the
difference between the Annual Return Water Obligation for that year and the CCSD
Delivery Volume (Excess Water).
g. Cal Am shall make available for delivery to CSIP any Annual Return Water
Obligation in excess of the CCSD Delivery Volume, according to procedures agreed
to in the Return Water Purchase Agreement by and between the Agency and Cal Am.
h. Cal Am will report to the Parties on a quarterly basis the quantity of Return Water
delivered under this Settlement Agreement. Such reports shall be issued by Cal Am
on or about December 1 (for the quarter July 1 to September 30), March 1 (for the
quarter October 1 to December 31), June 1 (for the quarter January 1 to March 31),
and September 1 (for the quarter April 1 to June 30) of each year.
i. All references in this Settlement Agreement to a year shall mean a water year,
and all references to a water year shall mean the 12-month period beginning on
October 1 of a given year and ending on September 30 of the following year. All
calculations herein based on the period of a year shall be prorated to account for any
time frame that is less than a 12-month period.
3. Cal Am shall comply with the Agency Act. Notwithstanding any other provisions of this
Settlement Agreement, the Agency will retain all rights, discretion and authority conferred on
the Agency under the Agency Act to ensure that the pumping, production, desalination, and
distribution of project source water from the SRGB for the selected desalination plant
complies with the Agency Act, and to protect the long-term viability of the SRGB as a water
supply for water for agricultural, domestic and municipal use. Neither this Section 3 nor any
other provision of this Settlement Agreement shall be interpreted: (a) to affect, diminish, or
enhance the Agencys regulatory authority under the Agency Act; (b) to affect, diminish,
excuse, or forgive Cal Ams obligation to comply with the Agency Act; or (c) to preclude
any argument by any Party to this Settlement Agreement that there is no violation of the
Agency Act.
4. The Parties acknowledge that Cal Am could be legally required by a regulatory agency,
including the CPUC in this proceeding, or by a court, to make water deliveries to other
locations in the SRGB to the extent necessary to mitigate any groundwater impacts from the
Project that were demonstrated in relation to a specific location overlying the SRGB (Other
Return Water Obligation). Such Other Return Water Obligation could also serve to satisfy
Cal Ams obligations to return water to the SRGB under the Act, CEQA, or common-law
8
water law principles. Under such circumstances, the Parties agree that it would be
inequitable to Cal Am and its ratepayers to fund both the Other Return Water Obligation and
the Return Water obligations specified herein as this would result in a duplicative liability to
Cal Am and its ratepayers. Cal Ams obligation to make available the CCSD Delivery
Volume shall be reduced in the event and to the extent that a regulatory agency or court has
required Cal Am to deliver Return Water in a manner or to a location different than as
specified in the Settlement Agreement. CCSD shall not be obliged to purchase Return Water
if it determines that the reduced amount of Return Water would not be sufficient to justify a
Water Purchase Agreement as contemplated herein. In the event that CCSD determines that
its water purchase is not justified due to an Other Return Water Obligation, the Parties to this
Settlement Agreement will meet and confer in good faith to effect other arrangements to
make the remaining Return Water, net of the Other Return Water Obligation, available for
use in lieu of existing groundwater pumping in the SRGB in order to ensure that Cal Am will
meet its Annual Return Water Obligation under this Settlement Agreement.
The Parties further acknowledge that the CCSD must be assured of a specific volume of
Return Water to justify investment in the capital facilities necessary to convey the Return
Water from the Project to the CCSD (the CCSD Facilities), and therefore Cal Ams
obligation to the CCSD Delivery Volume specified herein cannot be terminated during the
term of the anticipated Return Water Purchase Agreements after such time as CCSD has
obligated itself to finance such capital facilities. To afford the best foresight in relation to
potentially competing Return Water obligations, while also facilitating the certainty
relating to Return Water deliveries required by CCSD, Cal Ams obligation to make
available the CCSD Delivery Volume under the terms of the CCSD Return Water Purchase
Agreement shall become unconditional on the date that is the latest of the following dates:
a. the date on which the CPUC has issued a CPCN for the Project and the period to
challenge the legality of the CPUCs issuance of the CPCN (based on CEQA
compliance or otherwise) has expired and no challenge has been brought;
b. the date on which any challenge against the CPUCs issuance of the CPCN is
resolved with finality following all available appeals and petitions; or
c. 60 days following the date on which the CCSD provides notification to Cal Am that it
has secured financing, acceptable to CCSD, to construct the CCSD Facilities.
In the event of any challenge against the CPUC's issuance of the CPCN, the Parties to this
Settlement Agreement shall meet and confer in good faith to effect other arrangements to
make the total amount of the Return Water, as adjusted by any Other Return Water
Obligation, available for use in lieu of existing groundwater pumping in the SRGB in order
to ensure that Cal Am will meet its Annual Return Water Obligation under this Settlement
Agreement during the pendency of that litigation.
After the above dates, Cal Am may not terminate its obligation to deliver the CCSD
Delivery Volume in the event Cal Am is subsequently required to meet Other Return Water
9
Obligations. Cal Am and CCSD shall meet and confer as necessary within a reasonable
amount of time before or after any of the above dates if it appears that Cal Ams obligation
to make available the CCSD Delivery Volume may not become unconditional. Due to the
urgent nature of the Project and other regulatory pressures to implement the Project, Cal
Am and CCSD may mutually agree at any time to amend and move forward with the
CCSD Water Purchase Agreement, notwithstanding Other Return Water Obligations,
provided all other required approvals have been attained and provided that Cal Am will
meet its Annual Return Water Obligation under this Settlement Agreement through some
combination of some or all of the CCSD Water Purchase Agreement, the CSIP Water
Purchase Agreement, Other Return Water Obligations, or arrangements made pursuant to
Section 7 of the Settlement Agreement.
5.
Return Water and Excess Water pricing shall be as follows:

a. CCSD: For each acre-foot of Return Water or Excess Water made available for
delivery to CCSD:
i. CCSD shall pay its avoided cost to produce groundwater to meet customer
demand, currently estimated to be $110 per acre-foot, for Return Water made
available for delivery to meet the Annual Return Water Obligation. CCSD
plans to continue operation of its existing wells so they may be available in
emergency circumstances. This continuing operation will enable CCSD to
provide future updates to the avoided cost of pumping. If CCSD is unable to
provide such updated avoided costs of pumping, then the percentage increase
of PG&E's A-6 tariff for off-peak summer distribution rate (with a base of
$0.07311 / kWh as of the tariff existing on March 24, 2016) will be used as
the escalation factor for the increase in avoided cost of pumping in the future.
ii. CCSD shall pay the marginal operation and maintenance costs for the Project
to produce one acre-foot of potable water, currently estimated to be $580 per
acre-foot, for any Excess Water calculated as set forth in Appendix F.
b. CSIP: Subject to rights to terminate established in Section 10 of the Return Water
Purchase Agreement between the Agency and Cal Am, for each acre-foot of Return
Water delivered by Cal Am, the Agency shall pay the CSIP customers marginal
avoided cost for groundwater produced for use by the CSIP customers, currently
estimated to be $102 per acre-foot.
6.
The Parties support Cal Am negotiating and entering into Return Water Purchase
Agreements substantially in the form attached in Appendix C to this Settlement Agreement.
To the extent any conflict is noted or alleged to exist between the terms of this Settlement
Agreement and the terms of either Return Water Purchase Agreement, the Parties agree to
meet and confer to seek to arrive at a mutually-agreeable reconciliation of the terms of the
three agreements.
a. The Return Water Purchase Agreements shall have an initial term of at least 30 years.
10
b. Prior to the expiration of the Return Water Purchase Agreements contemplated

herein, CCSD and CSIP shall have a right of first refusal to enter into new water
purchase agreements on terms to be negotiated at the time.
7.
If the Return Water Purchase Agreements are not executed, do not become effective, or are
otherwise amended or terminated, the Parties to this Settlement Agreement shall meet and
confer in good faith to effect other arrangements to make the total amount of the Return
Water reduced by any Other Return Water Obligation available for use in lieu of existing
groundwater pumping in the SRGB in order to ensure that Cal-Am will meet its Annual
Return Water Obligation under this Settlement Agreement
8.
Upon termination, expiration or non-renewal of the Return Water Purchase Agreements,

Cal Am shall continue to make Return Water available for delivery to the SRGB for use in
lieu of existing groundwater production, unless Cal Am demonstrates that Return Water is
not needed to prevent legal injury to prior groundwater rights holders in the SRGB or to
avoid significant adverse effects to SRGB groundwater resources. If Cal Am desires to
make such a showing, it shall initially do so by providing a demonstration in writing to all
Parties to this Settlement Agreement using the notice provisions of Section 21. Within 21
days thereafter, the Parties shall meet to seek to reach agreement regarding whether Cal
Am has made the requisite demonstration. If the Parties do not reach agreement within 30
days after the initial meeting, any Party may on or after the 31st day, but no later than the
91st day, invoke the provisions of Section 9. For the avoidance of doubt, nothing in this
section 8 in any way affects the provisions, scope and application of Section 3.
9.
If a dispute arises concerning any controversy or claim arising out of or relating to this
Settlement Agreement or the breach thereof, or relating to its application or interpretation,
such dispute shall be resolved as follows:
a. Disputes. The aggrieved Party will notify the other Parties of the dispute in writing
within twenty (20) days after such dispute arises. If the Parties fail to resolve the
dispute within sixty (60) days after delivery of such notice, each Party will promptly
nominate a senior officer of its organization to meet at any mutually-agreed time and
location to resolve the dispute. The Parties shall use their best efforts to reach a just
and equitable solution satisfactory to all Parties. If the Parties are unable to resolve
the dispute to their satisfaction within sixty (60) days thereafter, the dispute will be
subject to mediation, as described below in Section 9.b. The time periods set forth in
this section are subject to extension if agreed to by the Parties.
b. Mandatory Non-binding Mediation. If a dispute is not resolved pursuant to Section
9.a., the Parties agree to first endeavor to settle the dispute in an amicable manner,
using mandatory non-binding mediation initiated and conducted under the applicable
rules of the American Arbitration Association in effect as of the Effective Date or
other rules agreed to in writing by the Parties, before having recourse in a court of
law or equity. Each Party shall bear its own legal expenses, and the expenses of
witnesses for either side shall be paid by the Party producing such witnesses. All
expenses of the mediator, including required travel, and the cost of any proofs or
expert advice produced at the direct request of the mediator, shall be borne equally by
11
the Parties, unless they agree otherwise. Any resultant agreements from mediation
shall be documented in writing. All mediation proceedings, results, and
documentation, including without limitation any materials prepared or submitted or
any positions taken by or on behalf of any Party, shall be confidential and
inadmissible for any purpose in any legal proceeding (pursuant to California
Evidence Codes sections 1115 through 1128), unless such admission is otherwise
agreed upon in writing by the Parties. Mediators shall not be subject to any subpoena
or liability, and their actions shall not be subject to discovery. The mediation shall be
completed within sixty (60) days after selection of the mediator, unless the Parties
agree to extend the mediation period.
c. Judicial Relief. If mediation pursuant to Section 9.b. does not resolve a dispute, any
Party may seek relief in a court of competent jurisdiction.
d. Limitations on Damages. No Party shall be entitled to consequential damages,
incidental damages, or punitive or exemplary damages from any other Party in any
action or proceeding in connection with this Settlement Agreement.
e. Attorneys Fees and Costs. In any action or proceeding to enforce a term or condition
of this Settlement Agreement, in any disputes relating to this Settlement Agreement,
and in any actions for breaches, defaults, or misrepresentations in connection with the
Settlement Agreement, a prevailing Party (as determined by a court of competent
jurisdiction) shall be entitled to recover its reasonable costs and expenses, including
without limitation reasonable attorneys fees and costs.
10.
The Parties agree that Cal Ams certificated service area for the Monterey County District
shall be extended to include: (1) a delivery point near the intersection of Nashua Road and
Monte Road (located between Cal Ams desalination plant facilities and the CCSD service
area) that is necessary for Cal Am to serve CCSD and the Agency at the delivery point set
forth in the anticipated Return Water Purchase Agreements; (2) the territory contiguous to
the desalination plant facilities that is necessary for Cal Am to deliver water to Monterey
Regional Waste Management District (MRWMD), and (3) to the Monterey Regional
Water Pollution Control Agencys wastewater treatment plant site which is located next to
the MRWMD site, and that Cal Am shall update its service area map accordingly through a
Tier 2 advice letter filing to describe the territory served on the utilitys tariffs. The Parties
also agree that the proposed tariffs set forth in Appendix E, which may be adjusted from
time to time to reflect adjustments to the terms of service as set forth herein, shall govern
the rates and service for the provision of service to CCSD and the Agency, subject,
however, to rights to terminate established in Section 10 of the Return Water Purchase
Agreement between the Agency and Cal Am. The Parties further agree to support Cal
Ams ability to implement and update its tariffs accordingly through a Tier 2 advice letter.
11.
Pursuant to the Return Water Purchase Agreements, Cal Am would collect revenue from
CCSD and the Agency. All revenue collected under the Return Water Purchase
Agreements would be through an approved tariff with the CPUC and would be used to
offset the operations and maintenance costs of the Project to customers in the Monterey
District in accordance with Section 8.3 of the document known as the Large Settlement
12
Agreement. Revenues collected from MRWMD would be under an existing General

Metered Non-Residential tariff that is subject to regulation by the CPUC.
12.
This Settlement Agreement reflects a settlement and compromise of putative claims and
remedies of the Parties hereto.
13.
If the Return Water settlement described in this Settlement Agreement is not approved by
the CPUC and implemented by Cal Am, the Agency, SVWC, MCFB and Landwatch
reserve their rights to challenge Cal Ams production of water from the SRGB in any
appropriate forum.
14.
The Parties agree to expeditiously, substantively and in good faith support this Settlement
Agreement and cooperate with Cal Am in any administrative or judicial proceeding
challenging this Settlement Agreement and/or Cal Ams obligations and responsibilities
with respect to Return Water.
15.
Among other things, this Settlement Agreement helps to define a stable and finite project
description that will facilitate the CPUCs completion of CEQA review for the Project.
The legal effectiveness of this Settlement Agreement is contingent on the completion of
CEQA review and this Settlement Agreement does not irretrievably commit the Parties to
carrying out any physical activities that would be required for Cal Am to meet the Annual
Return Water Obligation or would otherwise be required for the Parties to comply with the
terms of this Settlement Agreement, including through the anticipated Return Water
Purchase Agreements whose future approval will be conditioned upon the completion of
CEQA review by the CPUC as lead agency for the Project and by those Parties playing the
role of a responsible agency with respect to the anticipated Water Supply Agreements. The
Parties acknowledge and intend that the lead agency and responsible agencies will retain
full discretion with respect to deciding whether to approve the Return Water Supply
Agreements or any other commitments necessary or convenient for Cal Am to meet the
Annual Return Water Obligation, including discretion to modify commitments to avoid or
reduce any significant adverse physical environmental effects (i) from Return Water
activities that are within their jurisdiction, and (ii) from the Parties compliance with other
terms of this Settlement Agreement.
16.
If the CPUC approves the Settlement Agreement with modifications, the Parties request the
CPUC to provide a reasonable period for the Parties to consider and respond to such
modification.
17.
If the CPUC approves the Settlement Agreement with modifications, each Party shall
determine no later than two business days before the deadline imposed by the CPUC for
acceptance of the modification whether it will accept the modification and shall notify the
other Parties of its determination.
18.
If any Party declines to accept the CPUCs modification, the other Parties may still accept
the modification and request the CPUC to approve the revised Settlement Agreement in the
absence of the agreement of the Party or Parties who decline to accept the CPUCs
modification; provided, however, that Parties who accept the modification and request
13
approval of a revised Settlement Agreement may not accept the modification and request
the CPUC to approve the revised Settlement Agreement if the applicant Cal Am is among
the Parties who decline to accept the CPUCs modification. If the CPUCs proposed
modification of this Settlement Agreement is not consented to by Cal Am, the Settlement
Agreement shall be void and the CPUC will establish a procedural schedule to address the
disputed issues.
19.
This Settlement Agreement does not currently impact the terms of sections 3.1(b) of the
document known as the Large Settlement Agreement. To the extent later binding
agreements may specifically do so, they will not impact the Agencys authority and
responsibilities under or Cal Ams obligation to comply with the Agency Act.
20.
This Agreement shall be binding upon, and shall inure to the benefit of and be enforceable
by, the Parties hereto and their respective successors and assigns permitted hereunder.
21.
All notifications, notices, demands, requests and other communications herein provided for
or made pursuant hereto shall be in writing and shall be sent by: (i) registered or certified
mail, return receipt requested, and the giving of such communication shall be deemed
complete on the third (3rd) business day after the same is deposited in a United States Post
Office with postage charges prepaid; or (ii) reputable overnight delivery service, and the
giving of such communication shall be deemed complete on the immediately succeeding
business day after the same is deposited with such delivery service; and (iii) so long as a
Party has notified the other Party by means of a method described in clauses (i) or (ii)
above of such Party's email address for notification purposes, email transmission of notices
to such Party are also permitted provided an original is also sent via one of the other
permitted means and the giving of such communication shall be complete when such email
is received if such email is received on a business day before 3:00 pm Pacific Time;
otherwise, such communication shall be deemed complete the next business day. The date
on which notifications, notices, demands, requests and other communications are deemed
complete shall be the earliest date arising under subsections (i), (ii) or (iii) of this Section
21. All notifications, notices, demands, requests and other communications shall be sent to
the Parties as follows:
To Agency:
David E. Chardavoyne
General Manager
893 Blanco Circle
Salinas, CA 93901
To Authority:
Jason Burnett
President
580 Pacific Street, Room 6
14
Monterey, CA 93940
To Cal Am:
Eric J. Sabolsice
Director, Operations
Coastal Division
California-American Water Company
511 Forest Lodge Road, Suite 100
Pacific Grove, CA 93950
To Landwatch:
Chris Fitz
LandWatch Monterey County
P.O. Box 1876
To MCFB:
Norman C. Groot
P.O. Box 1449
To SVWC:
Nancy Isakson
President
3203 Playa Court
Marina, CA 93933
A Party may change the person and/or address for provision of notice by delivering
written notice to the other Parties.
22.
This Settlement Agreement may be executed in any number of counterparts, each of which
shall be an original, and such counterparts together shall constitute but one and the same
instrument.
Respectfully submitted,
15
Dated:
CALIFORNIA-AMERICAN WATER COMPANY
By _________________________
Robert MacLean,
President
Dated:
LANDWATCH MONTEREY COUNTY
By _________________________
Chris Fitz,
Dated:
MONTEREY COUNTY FARM BUREAU
By _________________________
Norman C. Groot,
Executive Director
Dated:
MONTEREY COUNTY WATER RESOURCES AGENCY
By _________________________
David Chardavoyne,
General Manager
Dated:
MONTEREY PENINSULA REGIONAL WATER AUTHORITY
By _________________________
Jason Burnett,
President
16
Dated:
SALINAS VALLEY WATER COALITION
By _________________________
Nancy Isakson,
President
17
APPENDIX A
PLANNING TERM SHEET
18
APPENDIX B
CCSD RESOLUTION No. 16-2
19
APPENDIX C
RETURN WATER PURCHASE AGREEMENTS
20
APPENDIX D
BASE RETURN WATER OBLIGATION METHODOLOGY
Example of Calculation of Percentage of Salinas Basin Water in Brackish Water using
current Monterey Bay salinity levels (33,500 mg/L) and current and projected test well
results (~31,076 mg/L 31,950 mg/L)

+

=

EXAMPLE #1
Assumed Data for Example #1 Purposes Only:
33,500 mg/L = Measured seawater TDS (seawater salinity)1
500 mg/L = Measured Salinas Basin water TDS (inland water salinity)1
31,076 mg/L = Measured Brackish Source Water TDS (brackish water salinity)1 (Test
Well)
Unknowns:
Percentage of seawater = x
Percentage of Salinas Basin Water (inland water) = y
The sum of the percentage must equal 100% or 1. Therefore: x+y=1 or y=1-x
33,500 + 500 = 31,076
33,500 + 5001 = 31,076
33,500 + 500 500 = 31,076
33,000 + 500 = 31,076
33,000 = 30,576
30,576
=
33,000
= 0.926 or 92.6%
Thus,
= 1
= 1 0.926
= 0.074 or 7.4%
Therefore,
Percentage of seawater = 92.6% and Percentage of Salinas Basin water (inland water)
= 7.4%
1
TDS values for the seawater, Basin water, and Brackish Source water will be
determined by analysis by an accredited laboratory, using appropriate methodology
SM 2540C
21
22
EXAMPLE #2
33,500 mg/L = Measured seawater TDS (seawater salinity)1
500 mg/L = Measured Salinas Basin water TDS (inland water salinity)1
31,950 mg/L = Measured Brackish Source Water TDS (brackish water salinity)1
Unknowns:
Percentage of seawater = x
Percentage of Salinas Basin Water (inland water) = y
The sum of the percentage must equal 100% or 1. Therefore: x+y=1 or y=1-x
33,500 + 500 = 31,950
33,500 + 5001 = 31,950
33,500 + 500 500 = 31,950
33,000 + 500 = 31,950
33,000 = 31,450
31,450
=
33,000
= 0.953 or 95.3%
Thus,
= 1
= 1 0.953
= 0.047 or 4.7%
Therefore,
Percentage of seawater = 95.3% and Percentage of Salinas Basin water (inland water)
= 4.7%
1
TDS values for the seawater, Basin water, and Brackish Source water will be
determined by analysis by an accredited laboratory, using appropriate methodology
SM 2540C
23
Example of Calculation of Return to Basin Allocation:

,-
.

=

/ .- - 0 1-

EXAMPLE #1
26,992 AFY = Total Actual Source Water Quantity (i.e. 24.1 MGD)
92.6% = Percentage of Seawater = x
7.4% = Percentage of Salinas Basin water = y
Unknowns:
Return to Basin Allocation = z
So, substituting the equation with the assumed data for example#1:
2 = 26,992
2 = 0.074 26,992 = 1,997 AFY
EXAMPLE #2
26,992 AFY = Total Actual Source Water Quantity
95.3% = Percentage of Seawater = x
4.7% = Percentage of Salinas Basin water = y
Unknowns:
Return to Basin Allocation = z
So, substituting the equation with the assumed data for example#2:
2 = 26,992
2 = 0.047 26,992 = 1,268 AFY
24
APPENDIX E
PROPOSED TARIFFS
[ LEEPER TO PROVIDE ]
25
APPENDIX F
Project MARGINAL OPERATION AND MAINTENANCE COSTS CALCULATION
Calculation of the marginal cost of water at either the 6.4 MGD or 9.6 MGD desalination plant
proposed as part of the Project. Items that are part of the cost computation include:
1. Power Costs (PC): related to the slant intake wells and the desalination plant. The costs
shall be computed annually based on the sum of the power bills for the intake wells and
the desalination plant including the high service pump station.
2. Chemical Costs (CC): related to the production the potable water. The costs shall be
computed annually based on the sum of the chemical bills for the desalination plant.
3. Membrane and Media Replacement Costs (MMRC): related to production the
potable water. The costs shall be computed annually based on the sum of the invoices for
replacement membranes and media.
4. Production Volume (AF): related to the total amount of water produced from the
desalination plant.
5. Marginal Cost of Water: Cost per acre-foot of water.
The formula for the marginal cost of water shall be:
7 + 77 + 88,7
$
=
= 8
7 0
.9
.9
EXAMPLE #1 First Years Cost - $580 / AF
26

Agenda Report
Date: June 09, 2016

Item No: 6.
FROM:
SUBJECT:
Approve Scheduling of Presentations by Deep Water Desal

(DWD) and People's Desal at Joint Board/TAC Meetings on
July 14 and Aug 11, 2016
RECOMMENDATION:
It is recommended that the Water Authority (MPRWA) approve a joint
meeting with the Authority TAC in July and August to receive an update on
the progress of the Deep Water Desal (DWD) Project and the People's
Desal Project.
DISCUSSION:
To provide the public and the MPRWA information on the progress of the
DWD and People's Desal projects, the Executive Director recommends that
proponents be invited to make a presentation to the Water Authority. Staff
suggests inviting DWD to the July 14 Authority meeting and Peoples to the
August 11 meeting.
Staff further recommends making those meetings joint with the TAC. The
joint meetings would be in lieu of the regular TAC meetings for July and
August.
Last year, the Authority requested the proponents to answer the following
questions as part of their presentation, or in response to questions from the
Board or the public.
06/12
- How do you plan to get support/approval for your project source water
prior to exhausting all alternatives for sub surface intake as required by
the CCC, SWRCB and CPUC?
-What are the overall project features (land, data center, water facilities,
Salinas- related features, etc.)?
- What is the desalination configuration and facilities layout?
- Who are potential product water purchasers?
- What is your Intake/Outfall strategy?
- What is the CEQA/NEPA status and timeline?
- What hurdles do you see and what are the contingencies?
- What is status of discussions with state permitting agencies?
- What is current financial status and total investment required?
- What is the overall schedule for delivery of water to end user?
The Board is requested to approve the joint meeting schedule and to make
modifications, if necessary, with respect to the above questions.
ATTACHMENTS:
None

Agenda Report
FROM:
Date: June 09, 2016

Item No: 7.
Vice President Bill Kampe
SUBJECT: Summary Report of Phone Meetings attended as a representative of the

MPRWA.
RECOMMENDATION:
Receive the report.
DISCUSSION:
Since the last meeting of the MPRWA board, I have attended the following meetings as
one of the representatives of the MPRWA:
Brine Settlement Agreement: May 18; June 1, 3
Final details have been worked out. Much effort went into the monitoring requirements.
Future action by federal or state may require different monitoring requirements from the
settling agreement, causing extra expense to ratepayers. Surfriders, CalAm and other
parties worked out a resolution process. There are also terms about mitigation if the
currently agreed diffuser design proves inadequate. Approval by settling parties is
pending.
Transfer Pipeline Filing Motion to the CPUC: May 25, 31
Several settling parties have worked to finalize the motion to the CPUC re the transfer
pipeline, construction funding, and water purchase agreement to support Pure Water
Monterey. Final edits are being made on the weekend of June 4 and 5. This motion is
vital in many ways to Pure Water Monterey and to the participating cities. A special
challenge has been to make the case why current piping is inadequate.
Fish Rescue: June 2
At a prior meeting on May 9 in Sacramento with CDFW Director Chuck Bonham,
several parties described the case for competent fish rescue on the Carmel River.
Director Bonham committed that CDFW would develop an approach to overcome some
of the current dilemmas in state permitting process and law. The June 2 meeting of
several parties supporting the efforts of the CRSA reviewed status and how to obtain
timely action by the CDFW. In follow up, the CDFW committed to issue the
recommendation during the week of June 6.
ATTACHMENTS:
None
06/12

Agenda Report
FROM:
Date: June 09, 2016

Item No: 8.
SUBJECT: Receive Report on May 26, 2016 CPUC Hearings on the MPWSP
Phase 2 (GWR) Including a Presentation by Cal Am on the Inclusion
of the Monterey Transfer Pipeline and Water Tank
RECOMMENDATION:
It is recommended that the Water Authority Board receive a report and discuss the
CPUC's May 26, 2016 Hearing on Phase 2 (GWR) of the Monterey Peninsula Water
Supply Project (MPWSP), including a Cal Am presentation on the need for the 36 inch
Monterey Transfer Pipeline to utilize GWR water.
DISCUSSION:
Due to a "hydraulic barrier (trough)" at Lake El Estero in Monterey the current Cal Am
system is not capable of receiving and utilizing Ground Water Replenishment (GWR)
water if, as it now seems likely, the PWM/GWR project come on line before Cal Am's
desal facility. The GWR EIR included the need for a Monterey transfer pipeline but it
had anticipated that Cal Am's desal facility, inclusive of the transfer pipeline, would be in
place before GWR was available. With the CPUC's recent one-year delay in the desal
EIR/EIS process, the situation is now reversed.
The approval of the transfer pipeline as a part of Phase 2 is important because:
- the amended application for CDO extension allows progress on GWR to count as a
qualifying milestone
- without it, water produced by GWR will be unavailable to much of Cal Am's
customers south
- the pipeline will be required to allow transfer ASR water north of the barrier
- the pipeline will be required for any alternative to the desal plant built north of the
barrier
In response to a joint motion approved by the Authority on April 14, 2016, (attachment
A) the CPUC ALJ conducted evidentiary hearings on May 26 on the transfer pipeline
issue and several other Phase 2 issues. He is expected to render a proposed decision
in July with a final CPUC decision by August 18, 2016.
At the Water Authority meeting Cal Am has been requested to provide a visual
presentation on the hydraulic barrier problem and the need for the transfer pipeline.
06/12
FISCAL IMPACT:
Cal Am already has contracts for approximately $100 million in pipelines, tanks, etc.
inclusive of the $41 million transfer pipeline. What is needed now is CPUC approval to
build the transfer pipeline earlier and to establish a mechanism to pay for it as a part of
the Phase 2 Certificate of Public Convenience and Necessity (CPCN) expected later
this year. After the Phase 1(Desal) CPCN is issued in 2018, Cal Am can request
funding the remaining $60 million in pipelines, pumps, and tanks in the CPUC rate
structure eventually approved for the project.
ATTACHMENTS:
A-Joint Motion for CPUC Application 12-04-019


Authorization to Recover All Present and
Future Costs in Rates.
Application 12-04-019
JOINT MOTION FOR A SEPARATE PHASE 2 DECISION
Sarah E. Leeper
Nicholas A. Subias
California American Water
555 Montgomery Street, Suite 816
San Francisco, CA 94111
sarah.leeper@amwater.com
(415) 863-2960
Bob McKenzie
Water Issues Consultant
Coalition of Peninsula Businesses
P.O. Box 223542
Carmel, CA 93922
For: Coalition of Peninsula Businesses
jrbobmck@gmail.com
(831) 596-4206
Dan L. Carroll
Attorney at Law
Downey Brand, LLP
621 Capitol Mall, 18th Floor
Sacramento, CA 95814
For: Both County of Monterey &
dcarroll@downeybrand.com
(916) 444-1000
John H. Farrow
M.R. Wolfe & Associates, P.C.
1 Sutter Street, Suite 300
For: LandWatch Monterey County
jfarrow@mrwolfeassociates.com
(415) 369-9405
[ADDITIONAL COUNSEL LISTED BELOW]
Dated: April 18, 2016
Mark Fogelman
Friedman & Springwater LLP
350 Sansome Street, Suite 210
For: Marina Coast Water District
mfogelman@friedmanspring.com
(415) 834-3800
Norman C. Groot
P.O. Box 1449
For: Monterey County Farm Bureau
norm@montereycfb.com
(831) 751-3100
Russell M. McGlothlin
Brownstein Hyatt Farber Schreck, LLP
21 East Carrillo Street
Santa Barbara, CA 93101
For: Monterey Peninsula Regional Water
Authority
rmcglothlin@bhfs.com
(805) 963-7000
David C. Laredo
De Lay & Laredo
606 Forest Avenue
Pacific Grove, CA 93950-4221
For: Both Monterey Peninsula Water
Management District & City of Pacific Grove
dave@laredolaw.net
(831) 646-1502
Robert Wellington
Wellington Law Offices
857 Cass Street, Suite D
Monterey, CA 93940
For: Monterey Regional Water Pollution
Control Agency
attys@wellingtonlaw.com
(831) 373-8733
Marcelo Poirier
California Public Utilities Commission
505 Van Ness Avenue
For: Office of Ratepayer Advocates
mpo@cpuc.ca.gov
(415) 703-2913
Roger B. Moore
Rossmann and Moore, LLP
2014 Shattuck Avenue
Berkeley, CA 94704
rbm@landwater.com
For: Planning and Conservation League
Foundation
rbm@landwater.com
(510) 548-1401
Michael Warburton
The Public Trust Alliance
187 East Blithedale Avenue
Mill Valley, CA 94941
For: Public Trust Alliance
warburton@sonic.net
michael@rri.org
(510) 610-0868
George Riley
1198 Castro Road
Monterey, CA 93940
For: Public Water Now
georgetriley@gmail.com
(831) 645-9914
Nancy Isakson
President
3203 Playa Court
Marina, CA 93933
For: Salinas Valley Water Coalition
nisakson@mbay.net
(831) 224-2879
Laurens H. Silver
Attorney
California Environment Law Project
P.O. Box 667
Mill Valley, CA 94942
For: Sierra Club
larrysilver@earthlink.net
(415) 515-5688
Gabriel M.B. Ross

Attorney
Shute, Mihaly & Weinberger LLP
396 Hayes Street
For: Surfrider Foundation
ross@smwlaw.com
(415) 552-7272


Authorization to Recover All Present and
Future Costs in Rates.
Application 12-04-019
JOINT MOTION FOR A SEPARATE PHASE 2 DECISION
I.
INTRODUCTION
Pursuant to Article 11 of the Rules of Practice and Procedure of the California Public
Utilities Commission (Commission) and the November 17, 2015, Administrative Law
Judges Ruling Setting Evidentiary Issues and Schedule to Complete the Record for Phases 1
and 2 (ALJ Ruling), California-American Water Company (California American Water),
City of Pacific Grove, Coalition of Peninsula Businesses, County of Monterey, LandWatch
Monterey County, Marina Coast Water District, Monterey County Farm Bureau, Monterey
County Water Resources Agency, Monterey Peninsula Regional Water Authority, Monterey
Peninsula Water Management District (MPWMD), Monterey Regional Water Pollution
Control Agency (MRWPCA), Office of Ratepayer Advocates, Planning and Conservation
League Foundation, Public Trust Alliance, Public Water Now, Salinas Valley Water Coalition,
Sierra Club, and Surfrider Foundation (collectively Joint Parties) hereby submit this motion
for a separate Phase 2 decision. 1 Specifically, the Joint Parties request that the Commission
address the following issues in a separate Phase 2 decision: (1) the Water Purchase Agreement
between California American Water, MPWMD and MRWPCA, (2) California American
1
Pursuant to Commission Rule 1.8(d), the Joint Parties have authorized California American
Water to sign this motion on their behalf.
1
Waters construction of the Monterey pipeline and pump station in advance of a decision on the
Certificate of Public Convenience and Necessity (CPCN) for the Monterey Peninsula Water
Supply Project (MPWSP), and (3) financing and ratemaking related to the Monterey pipeline
and pump station facilities.
II.
NEED FOR A SEPARATE PHASE 2 DECISION

It is undisputed that the Monterey Peninsula faces substantial water supply shortages in
light of the impending deadline in the 2009 Cease and Desist Order (CDO) issued by the
State Water Resources Control Board that would greatly reduce California American Waters
ability to withdraw water from the Carmel River. The Commissions recent announcement that
the Final Environmental Impact Report/Environmental Impact Statement (EIR/EIS) for the
MPWSP will not be available until late 2017 has caused further significant delay in the
Commissions consideration of California American Waters request for a CPCN for the
MPWSP.
In light of this delay and the need for alternative sources of water for California
American Water customers, the Commission should issue a separate decision in Phase 2 on the
issues identified above, which could allow California American Water to take full advantage of
two alternative water sources: (1) the MPWMD/MRWPCA Pure Water Monterey Groundwater
Replenishment Project (GWR Project) and (2) Aquifer Storage and Recovery (ASR).
The GWR Project could supply up to 3,500 acre feet to the community as early as 2018.
MRWPCA certified the GWR Projects Environmental Impact Report (EIR) on October 8,
2015 and no litigation was filed challenging the GWR Projects EIR within the statute of
limitations. As MPWMD and MRWPCA have noted, however, the GWR Project cannot go
forward without a Water Purchase Agreement with California American Water. Thus, prompt
authorization for California American Water to enter into the Water Purchase Agreement is
essential. Similarly, an expeditious decision on the GWR Project Water Purchase Agreement is
critical to take advantage of the 1% interest rate available through the Clean Water State
2
Revolving Find (CWSRF), which would result in savings for California American Waters
ratepayers.
Additionally, California American Water asserts that the Monterey pipeline is necessary
for full deliverability of GWR Project water to California American Waters customers from
the GWR Project. California American Water also asserts that the Monterey pipeline would
also be used to transport water for ASR and the Monterey pump station would allow California
American Water to maximize its existing ASR facilities.2 Assuming a normal-to-wet rainy
season, California American Water asserts the Monterey pipeline and pump station facilities
would allow it to get the most out of its current ASR operating permits and potentially enable it
to inject an additional 1,000 acre feet of winter water from ASR in the winter of 2017-2018.
If the Commission issues a timely decision in Phase 2, California American Water
would be able to complete construction of the Monterey pipeline and pump station by
December 2017. Before California American may proceed with the Monterey pipeline and
pump station, however, the Joint Parties request that the Commission address the associated
financing and ratemaking.
Although Commissioner Sandoval pledged at the recent prehearing conference to
introduce a resolution to address CDO milestones, that is no reason to delay a decision on these
three issues identified by the Joint Parties. As discussed in more detail below, it is possible to
treat the Phase 1 and Phase 2 issues reasonably and fairly in separate decisions. Moreover, the
public interest is served by acting quickly and efficiently to reach a decision on these issues.
III.
PHASE 1 AND PHASE 2 ISSUES CAN BE TREATED REASONABLYAND

FAIRLY IN SEPARATE DECISIONS
The ALJ Ruling directs any party seeking a separate Phase 2 decision to explain how
the Phase 1 and Phase 2 issues, which the Ruling characterizes as substantially if not
inextricably intertwined, could be reasonably and fairly treated in separate decisions. 3
2
The Monterey pump station would not be used in connection with the GWR Project.
3 ALJ Ruling, p. 11.
3
Moving forward with a decision in Phase 2, however, would not pre-judge California American
Waters request for a CPCN for the MPWSP.
The GWR Project is a stand-alone project with independent utility from the MPWSP.
The GWR Project is pertinent to the MPWSP in this proceeding only because the availability of
the GWR Projects product water means that California American Water could build smaller
desalination facilities than would be needed if the GWR Project did not exist. Similarly, the
ASR wells have already been constructed and are in use, and thus they already exist completely
independent of the MPWSP.
Authorizing the construction and use of the Monterey pipeline for the GWR Project and
ASR and the Monterey pump station for ASR does not commit the Commission to a position
on the MPWSP. The Monterey pipeline and pump station can be used independently of the
MPWSP. As new facilities within California American Waters existing service territory, the
pipeline and pump station do not require a separate CPCN application. 4 The Commissions
approval can be limited to the construction of these facilities and their use for the GWR Project
and ASR only.
Additionally, the potential environmental impact of the Monterey pipeline was analyzed
in the GWR Projects EIR. 5 Issuing a decision including the Monterey Pipeline and pump
station as part of Phase 2 does not commit the CPUC to the MPWSP, and does not foreclose
This article shall not be construed to require any such corporation to secure such certificate
for an extension within any city or city and county within which it has theretofore lawfully
commenced operations. Pub. Util. Code 1001.
5 The potential environmental impacts of the Monterey pipeline were analyzed in the
Consolidated Final Environmental Impact Report for the Pure Water Monterey Groundwater
Replenishment Project (GWR Project EIR), available at
http://purewatermonterey.org/reports-docs/cfeir/. See 2.11 (discussion of CalAm Distribution
System component of GWR Project including Monterey Pipeline); 6.3.2.4 (discussion of
alternative alignments for CalAm Distribution Pipeline, including Alternative Monterey
Pipeline) and 2.3.2.6 (comparison of GWR Project to MPWSP, noting that The Proposed
Project could provide this quantity of replacement water even if the CPUC denies CalAms
application to construct and operate a desalination plant. (Id. at p. 2-12.) ). MPWMD and
MRWPCA as necessary will prepare an EIR addendum to address the Monterey pump station.
4
analysis of the MPWSP projects environmental impacts or of alternatives or mitigation

measure that may reduce or avoid those impacts.
Finally, addressing limited cost recovery issues related to the Monterey pipeline and
pump station in Phase 2 does not pre-approve the MPWSP or the cost recovery proposals
associated with the MPWSP as a whole.
IV.
THE COMMISSION SHOULD ACT QUICKLY AND EFFICIENTLY TO

RESOLVE THE PHASE 2 ISSUES
While the ALJ Ruling did not commit to a separate Phase 2 decision, it did provide a
target of July 2016 for a proposed decision and August 2016 for a final decision if separate
decisions were issued. 6 Considering that a separate Phase 2 decision is now necessary, the
Joint Parties urge the assigned Commissioner and Administrative Law Judge to retain these
target dates.
Although there is already information in the record regarding the Water Purchase
Agreement, the Monterey pipeline and related cost recovery, the Joint Parties recognize that it
may be necessary to provide supplemental testimony to ensure a full and complete record.
Additionally, to the extent that there are disputed issues of fact, a one-day hearing on the
supplemental testimony may be helpful. Thus, the Joint Parties propose the following
schedule:
May 9, 2016
Supplemental Testimony
May 19, 2016
Rebuttal Testimony
Week of May 23, 2016
Limited Evidentiary Hearing (if needed) and/or Possible

Settlement
June 1, 2016
Opening Briefs and/or Comments on Settlement
June 8, 2016
Reply Briefs and/or Reply Comments on Settlement
July 2016
Proposed Decision
August 18, 2016
Final Decision
ALJ Ruling, p. 12.

5
V.
CONCLUSION
For the reasons discussed above, the Joint Parties request that upon a showing the
Commission issue a separate Phase 2 decision on the following issues: (1) authorizing the
Water Purchase Agreement for the GWR Project, (2) moving up the construction of the
Monterey pipeline and pump station, and (3) addressing limited financing and cost recovery for
the Monterey pipeline and pump station facilities.
Dated: April 18, 2016
By:
/s/ Sarah E. Leeper

Sarah E. Leeper, Attorney
California-American Water Company
555 Montgomery Street, Suite 816

Agenda Report
FROM:
Date: June 09, 2016

Item No: 9.
SUBJECT: Receive an Update on the Summary Project Schedule for the Monterey
Peninsula Water Supply Project (MPWSP) and the Status of Test Slant
Well Operations
RECOMMENDATION:
It is recommended that the Water Authority Board receive a report from Cal Am on the
latest "Summary" MPWSP schedule and on the status of test well operations and
results.
DISCUSSION:
Cal Am will provide the most recent Summary MPWSP schedule, including an update of
the "dashboard", and the current status of test slant well operations and results.
ATTACHMENTS:
None
06/12

Agenda Report
FROM:
Date: June 09, 2016

Item No: 10.
Interim President Bill Kampe
SUBJECT: Discuss and Set Priorities on the Major Tasks Ahead for the
MPRWA
RECOMMENDATION:
Edit and update the draft priority table for the MPRWA Work Plan List.
DISCUSSION:
At its meeting of Dec 10, 2015, the Water Authority Board reviewed the adopted Work
Plan as part of its consideration of "sunseting" of the Authority. As part of setting our
final budget, we now need a clear sense of priorities for MPRWA work plan. In
particular, the technical and legal efforts should focus primarily on the top priorities.
We also have requests from the Board of Supervisors for a clearer understanding of our
activities. And in our six cities, we have members of the public and councils who are
also interested in a picture of what they get for the budget we request.
The attached table may be useful for these purposes, or there may be a better way to
report back to our sponsors. This item will give us a chance to discuss a preferred way
to communicate our actions and goals.
ATTACHMENTS:
A-Draft Table of Work Plan Priorities
06/12
MPRWA Workplan Priority Ranking - Draft

June 6, 2016
Main Organizations
Situation
Priority
MPRWA Open Action Tasks

1 Extend Cease and Desist Order
CalAm; MPRWA; WPWMD
2 Finalize WPA with Castroville
CCSD; MRWPCA
Extend NOAA mitigation agreement for Carmel

River
Amendment filed; hearing set for July 19
1
3
CalAm; NMS; NOAA
Discussions in progress; NOAA delay
4 Complete EIR/EIS for Desal
CPUC; CalAm
Working to new schedule
5 Advance GWR/Pure Water Mry
MRWPCA; CalAm; MPWMD; MPRWA
6 Legal Challenges from MCWD / Ag Trust
CalAm; MPRWA
7 CPCN
CPUC; CalAm; MPWMD; MPRWA
Will be considered after EIR/EIS
8 Obtain various city / county permits after CPCN
CalAm; Cities; MPRWA
Will be required for pipelines after CPCN
9 Post MPWSP water allocation plan
MPWMD; MPRWA
Likely to require an EIR, therefore a long lead task
MPRWA; MPWMD; MRWPCA; NOAA
Contain costs; monitor water usage; focus on water supply;

adapt to events
1 Finalize brine discharge agreement
Surfrider; CalAm; MPRWA
Imminent completion
2 Finalize Return Water agreement
CalAm; CSIP
Imminent completion
3 Restart Test Well
CCC; CalAm; MPRWA
Restarted
10 Ongoing public agency collaboration
GWR is more ready to proceed. Needs transfer pipeline,

NEPA for grant funding
Provide amicus support with selected "objective 3rd party"
assessment as needed.
1
2
MPRWA Completed Action Tasks
Priority classes
Direct support of mission; MPRWA brings core community perspective
Vital to success of project; other parties bring primarily expertise. MPRWA adds community values perspective
Of interest as part of the overall project; other parties bring higher engagement and expertise
1
2
3

Agenda Report
FROM:
Date: June 09, 2016

Item No: 11.
SUBJECT: Consider Budget Options, and Adopt the Budget for FY 2016-2017
RECOMMENDATION:
It is recommended that the MPRWA Board consider a variety of budget options and
adopt a budget for FY 2016-2017.
DISCUSSION:
Due to a bare-bones budget of $290,000 for FY 2015-2016 and substantial additional
expenditures for Special Counsel and Technical Support services required during the
year, staff has had to utilize most of the reserve fund. Accordingly, it seems prudent to
request a higher budget in FY 2016-2017. However, the Executive Director does not
believe our expenditures will be as high as for the current year, so at the Water
Authority meeting of May 12, 2016 a preliminary budget proposal of $350,000 was
presented.
On May 17, Directors Kampe, Edelen, and Downey made verbal presentations by at the
Monterey County Board of Supervisors. Additional justification for County fair-share
(Attachment A) was submitted by President Kampe. Subsequently, County staff advised
that on June 14 it will request the Board to make its $88,160 contribution for FY 20152016 and approve a contribution of $106,400 for FY 2016-2017.
FISCAL IMPACT:
Unfortunately, with the use of most of the reserve funds, it is unlikely that we will have a
sizable year-end surplus that can be credited against future contributions as we were
able to do last year. Accordingly, a number of member jurisdictions have since voiced
concern with their requested contributions. Thus, staff has prepared a number of budget
options for Board consideration (Attachment B). Requested member contributions,
inclusive of the County, are at Attachment C.
ATTACHMENTS:
A- May 23, 2016 Letter- Information to Support MPRWA Funding Request
B- Budget Alternatives for FY 2016-2017
C- Estimated Contributions foe FY 2016-2017
06/12
Directors:
Bill Kampe, Vice President
David Pendergrass, Secretary
Jerry Edelen, Treasurer
Ralph Rubio, Director
Libby Downey, Director
May 23, 2016
Executive Director:
Jim Cullem, P.E.
RE: Information to support the MPRWA Funding Request
Dear Chair Parker:
As I committed to the Board of Supervisors last week at public comment, I'm providing to you
the information you requested about the Monterey Peninsula Regional Water Authority. The
questions you asked are very relevant, and it is a healthy exercise for the Water Authority to
take a deep breath and answer them.
Attached is a summary of the accomplishments, budget, work plan, goals, and mission of the
MPRWA. Also attached are the funding requests, more formally stated based on the budget.
A copy of this letter and the attachments will also go directly to Mr. Nick Chiulos.
Sincerely,
13
Bill Kampe
Vice President and Acting Chair, MPRWA
Cc: Monterey County Board of Supervisors

MPRWA Board Members
Lew Bauman, CAO
Charles McKee, County Counsel
Nick Chiulos, Assistant CAO
Attachments:
Budget Request for 2015-16
Budget Request for 2016-17
MPRWA Mission, Accomplishments, Goals, Work Plan
580 PACIFIC ST, ROOM 6- MONTEREY CALIFORNIA 93940 www.mprwa.org .
BUDGET for FY 2015-2016

OPERATING REVENUES
Member Contrib. (6 Cities + Cnty)
Overpay Credit for FY14-15 (6 Cities)
EST. TOTAL OPERATING REVENUES
137,000
153,000
$ 290,000
EST. OPERATING EXPENSES

Administration and Clerical Services
Principal Office of MPRWA (Monterey)
Clerk of Board (Seaside)
Financial Services (Seaside)
Executive Director (Monterey)
Misc. Admin Expenses
Legal Services
Board Counsel (Freeman)
Special Counsel (Brownstein)
Contract Services
Audit Services (Kaufman)
Televised Meetings (AMP)
Insurance
Travel Expenses
Contingency
TOTAL OPERATING EXPENSES
Jurisdiction Contribution Requests
Member Jurisdiction
Carmel by the Sea
Sand City
City of Pacific Grove
City of Seaside
City of Monterey
City of Del Rey Oaks
County of Monterey
Total
5,000
24,000
6,000
85,000
500
36,000
100,000
6,000
5,000
7,500
5,000
10,000
$ 290,000
Water Use
6.5%
0.8%
13.1%
14.8%
33.0%
1.4%
30.4%
Contrib.
18,850
2,320
37,990
42,920
95,700
4,060
88,160
Cred fm 14-15
14,229
1,989
28,764
33,660
71,145
3,213
-
Adj Contrib
4,621
331
9,226
9,260
4,555
847
88,160
100.0%
$ 290,000
$ 153,000
$ 137,000
580 PACIFIC ST, ROOM 6 MONTEREY CALIFORNIA 93940 www.mprwa.org
BUDGET for FY 2016-2017

OPERATING REVENUES
Membership Contributions (6 Cities + County)
EST. TOTAL OPERATING REVENUES
Principal Office of Authority (Monterey)
Clerk of Board (Monterey)
Financial Services (Monterey)
Misc. Admin Expenses
Legal Services
Contract Services
Public Outreach
Contract Services and Studies
Insurance
Travel Expenses
Contingency
TOTAL OPERATING EXPENSES
$
$
350,000
350,000
$
$
$
$
$
5,000
24,000
6,000
85,000
500
$
$
36,000
150,000
$
$
$
$
$
$
$
$
8,000
3,000
10,000
7,500
5,000
10,000
350,000
Jurisdiction Contribution Requests

Member Jurisdiction
Carmel by the Sea
Sand City
City of Seaside
City of Monterey
County of Monterey
Total
Water Usage
6.5%
0.8%
13.1%
14.8%
33.0%
1.4%
30.4%
100.0%
$
$
$
$
$
$
$
$
Contribution
22,750
2,800
45,850
51,800
115,500
4,900
106,400
350,000
Directors:
Bill Kampe, Vice President
David Pendergrass, Secretary
Jerry Edelen, Treasurer
Ralph Rubio, Director
Libby Downey, Director
May 23, 2016
Executive Director:
Jim Cullem, P.E.
About the Monterey Peninsula Regional Water Authority

Purpose/Mission of the MPRWA
The purpose of the Monterey Peninsula Regional Water Authority is stated in the Joint Powers
Agreement:
2.2 Purpose of the Authority. Each Member has in common the power to study, plan, develop,
finance, acquire, construct, maintain, repair, manage, operate, control, and govern Water
Projects either alone or in cooperation with other public or private non-member entities. The
purpose of this Agreement is to restate the creation of a public entity separate from its Members
to jointly exercise some or all of the foregoing common powers, as deemed necessary by the
Authority, to: (1) ensure the timely development, financing, construction, operation, repair, and
maintenance of one or more Water Projects; and (2) ensure that the governance of such Water
Projects includes representation that is directly accountable to the water users within the
incorporated Cities and unincorporated portions of the County.
Other clauses expand the Purpose to include ancillary tasks such as rights, permits, and
authorizations. Much effort is applied in this area.
In practical terms, the work of the MPRWA remains focused on:
Obtaining alternate water supply for city and county residents and businesses who use
water from the Carmel River and Seaside Basin.
Representing community interests of the affected jurisdictions.
Advocating for governance to obtain the most cost effective solution.
Supporting the process of the settling parties to find critical common ground.
Supporting the steps necessary to ensure progress against the timeline of the Cease
and Desist Order.
In our board dialog, we have explicitly foregone any role in ownership or operation, which might
otherwise be permitted under the JPA. We also expect to sunset the Authority when water
flows from a Desal plant to our communities.
MPRWA Policy Position Statement

The MPRWA has engaged in support of alternate water sources according to a policy statement
originally adopted in February of 2013. The statement was adopted as guidance to staff and
consultants in preparation for CPUC testimony.
The statement includes a commitment to a portfolio approach for water supply and includes
GWR, ASR, Desal, and the PG Local Water Project. The authority supports efforts for each
element of the portfolio to move forward on its own to the greatest possible extent
Any project must meet four basic criteria:
1. Project economics must be competitive.
2. Project must have suitable public governance, public accountability and public
transparency.
3. Project must have clear path to permitting and constructing the facility as near to the
CDO deadline as feasible.
4. Project must have contingency plans to address significant technical, permitting and
legal risks.
We note that none of the projects in the portfolio meet all criteria. Based on early evaluations
the Water Authority has chosen to support the CalAm project. We will continue to monitor
alternatives and their status compared to MPWSP progress and timeline.
Accomplishments of the MPRWA

Every achievement in creating new water supplies involves multiple parties. The
accomplishments below have been achieved in collaboration with those parties. Those listed
represent accomplishments where the MPRWA brought significant influence on the outcomes.
The MPRWA has an active Technical Advisory Committee (TAC) that provides analysis and
recommendations on many aspects of the Peninsula Water Supply programs. The MPRWA
has also obtained independent consultant analysis where necessary to gain an informed
perspective.
Early Accomplishments
Major participant in the creation of the large and the small settlement agreements for
the MPWSP.
Obtained comprehensive assessment of competing desal projects as one factor in
decision to support the CalAm project
Advocated effectively for the public contribution to CalAm desal project financing. This
public contribution will lower financing costs significantly.
Advocated and created a governance committee to provide oversight and
transparency for major cost elements of the Water Supply Project.
Obtained a value engineering study of the project to identify potential cost savings.
Recent Accomplishments
Advocated successfully for both the initial startup of the test well at Cemex, and for the
restart after test interruption.
Obtained an Independent technical review of brine discharge and hydrological
model as critical aspects of the EIR. The report proved a useful confirmation of findings
when a conflict of interest arose on these topics. While there was some delay, the
conflict did not derail the project.
Participated strongly with CalAm and MPWMD in advocacy for an extension of the
CDO. The extension hearing is scheduled for July 19, and is critical for the Peninsula
Effective voice for community values on behalf of GWR as part of the water solution
portfolio at the CPUC. The CPUC might otherwise prefer a single large desal plant and
no GWR. GWR adds several key benefits, including less environmental impact and
greater resilience of the water supply. It especially offers faster project time to operation,
which is critically important under the CDO.
Goals and Work Plan

The activities of the MPRWA are driven primarily by the phases of the projects. Every effort
requires collaboration with other parties, and some of the main linkages are noted in the work
plan. Top goals for the MPRWA may be summarized as:
A. Obtain an extension of the CDO, based on a commitment to meet project milestones.
B. Maintain the support of core settling parties to facilitate progress.
C. Support progress through the key review points such as EIR/EIS, CPCN
The following items were received in the transition on the departure of President Jason Burnett
and reflect the short and long term issues expected during the period completion of all needed
water projects.
Work Plan Items:
1. SWRCB Cease and Desist Order (CDO) needs to be modified
SWRCB Hearing set for July 19, 2016
Main Parties: CalAm, MPWMD, MPRWA, PCL, Sierra Club, CRSA
Rancho Canada forbearance agreement aids prospects
CPUC will provide resolution in support.
2. NOAA mitigation agreement for Carmel River needs to be modified
Currently runs through early 2017
Needs to be extended by four years
$1.1 million per year for river mitigation
Main Parties: CalAm, NOAA/NMS, Dr. Sullivan, Rep Farr
3. California Coastal Commission authorization to restart test well (granted)
Longer term data desired by farming community
We are told more data is not necessary for EIR; continue to monitor salinity.
Main parties: CalAm, MPRWA, Marina Coast Water District, Marina
4. CPUC EIR/EIS needs to be proposed and finalized
Proposed delay through end of 2017
CPUC Representatives at MPRWA committed to support at SWRCB re CDO
All settling parties are engaged.
5. Finalize Water Purchase Agreement with Castroville
6. Ongoing legal challenges from Marina Coast / Ag Land Trust
Provide technical info or amicus briefs when necessary
7. Interaction with Pure Water Monterey
Need NEPA for grant money
Need CPUC authorization to enter into WPA (potential cost premium vs other benefits)
Open question whether we need CalAm pipelines to maximize use of Pure Water
Monterey
4
Additional source water / water rights
8. Finalize brine discharge and monitoring plan with Surfrider

Ensure minimal impact to ocean environment.
Agreement is very close to final
9. CPUC CPCN
Hopefully will follow settlements and subsequent decisions
10. City of Marina / CCC Coastal Development Permit
Required following CPCN from CPUC
11. Permits from county and other cities
Engage as needed
MPRWA adds an important community voice for these activities on the Peninsula
12. Public Agency Coordination and Cooperation
Support to the District re securitization and ensure debt equivalency is not triggered
13. Water Management District and cities need water allocation plan
Likely will require an EIR
Preference for projects that reduce housing / jobs imbalance?
Main parties: MPWMD, MPRWA, CalAm
14. Monitor consumption if the drought ends. Continue community focus / avoid distractions
15. Define funding and future of Water Authority
BUDGET Alternatives & Contributions for FY 2016-2017 (Rev 1)
$ 350,000
$290,000
$250,000
$200,000

Principal Office of Authority (Monterey)
5,000
5,000
5,000
5,000
24,000
24,000
24,000
20,000
Financial Services (Monterey)
6,000
6,000
6,000
6,000
85,000
85,000
75,000
60,000
500
500
500
500
Clerk of Board (Monterey)
Miscel Admin Expenses

Legal Services
36,000
26,000
18,000
12,000
150,000
100,000
90,000
70,000
8,000
8,000
8,000
8,000
3,000
3,000
2,000
1,000
10,000
10,000
5,000
3,000
Insurance
7,500
7,500
7,500
7,500
Travel Expenses
5,000
5,000
3,000
2,000
Contingency
10,000
10,000
6,000
5,000
MEETING FREQUENCY
Month
Month
Bi-Month
Qtrly
.829
.714
.572

Contract Services
Public Outreach
Contract Services and Studies
CONTRIBUTION FACTOR
1.0
ATTACHMENT C
REV 1
Estimated Jurisdiction Contributions
FY 2016-17
Member Jurisdiction
County of Monterey
Carmel By the Sea
Sand City
City of Seaside
City of Monterey
New FY 16-17
Distribution
with County *
30.40%
6.50%
0.80%
13.10%
14.80%
33.00%
1.40%
Total Income/Budget
100%
$350,000
$106,400
$22,750
$2,800
$45,850
$51,800
$115,500
$4,900
$350,000
$290,000
$88,160
$18,850
$2,320
$37,990
$42,920
$95,700
$4,060
$290,000
$250,000
$76,000
$16,250
$2,000
$32,750
$37,000
$82,500
$3,500
$200,000
$60,800
$13,000
$1,600
$26,200
$29,600
$66,000
$2,800
250,000.00
200,000.00
* Computed from water years 2012-2014

** No year-end surplus expected from FY15-16 which cohave reduced contributions for FY 16-17

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Agenda

Monterey Peninsula Regional Water Authority (MPRWA)

Approve and File Authority Checks Through June 9, 2016 - Milton

Receive Summary Report of Phone Meetings Attended as a Representative of the

Thursday, June 9, 2016

Director Edelen, Director Kampe, Director Pendergrass, Director Rubio,

President Burnett called the meeting to order at 5:03pm.

Thursday, April 14, 2016

Edelen, Kampe, Pendergrass, Rubio, Burnett

January 14, 2016 and March 10, 2016 Romero

Edelen, Kampe, Pendergrass, Rubio, Burnett

Thursday, April 14, 2016

Receiving no further requests to speak, President Burnett closed public comments.

Edelen, Kampe, Pendergrass, Rubio, Burnett

Monterey Peninsula Regional Water Authority

Thursday, April 14, 2016

Tom Rowley, representing Monterey Peninsula Taxpayers Association (MPTA), voiced

Receiving no further requests to speak, President Burnett closed public comments.

Certificate for Departing Water Authority President Jason Burnett - Kampe

Thursday, April 14, 2016

Receiving no further requests to speak, President Burnett closed public comments.

Thursday, April 14, 2016

construction of the 36 inch pipeline.

Edelen, Kampe, Pendergrass, Rubio, Burnett

Thursday, April 14, 2016

John Narigi, representing the Peninsula Coalition of Businesses, referenced a letter he

Thursday, April 14, 2016

whatever is needed to expedite this permitting process.

Receiving no further requests to speak, President Burnett closed public comments.

Monterey Peninsula Regional Water Authority

Thursday, April 14, 2016

Nova Romero, Clerk of the Authority

Monterey Peninsula Regional Water Authority

Director Downey, Director Edelen, Director Pendergrass, Director Rubio,

Executive Director Cullem, Clerk Romero

Legal Counsel Don Freeman

President Kampe called the meeting to order at 7:02pm.

Thursday, May 12, 2016

March 24, 2016 and April 14, 2016

Edelen, Pendergrass, Rubio, Kampe

Dallas, Downey, Edelen, Pendergrass, Rubio,

Monterey Peninsula Regional Water Authority

Thursday, May 12, 2016

Approve and File Authority Checks Through May 12, 2016

Dallas, Downey, Edelen, Pendergrass, Rubio,

Monterey Peninsula Regional Water Authority

Thursday, May 12, 2016

Dallas, Downey, Edelen, Pendergrass, Rubio,

Monterey Peninsula Regional Water Authority

Thursday, May 12, 2016

Dallas, Downey, Edelen, Pendergrass, Rubio,

Monterey Peninsula Regional Water Authority

Thursday, May 12, 2016

Receiving no further requests to speak, public comments was closed.

Dallas, Downey, Edelen, Pendergrass, Rubio,

Thursday, May 12, 2016

editorial in the paper, and getting media coverage on this topic.

Receiving no further requests to speak, public comments was closed.

Nova Romero, Clerk of the Authority

Monterey Peninsula Regional Water Authority

Monterey Peninsula Regional Water Authority

Date: June 09, 2016

Authority Finance Clerk Milton

SUBJECT: Approval and File Authority Checks through June 9, 2016