M I N U TE S

MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)

Director's Meeting
7:00 PM, Thursday, January 12, 2017
MONTEREY

MONTEREY, CALIFORNIA

Directors Present: Director Dallas, Director Edelen, Director Pendergrass, Director Roberson,
Director Rubio, President Kampe
Directors Absent: None

Staff Present: Legal Counsel Damon, Executive Director Cullem, Clerk Romero

CALL TO ORDER

President Kampe called the meeting to order at 7:00 pm.

ROLL CALL

All directors were present.

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

1. 1. Status of the MPWSP EIR/EIS Release and postponement of TAC review

2. Status of Authority contract with SPI (Geosyntec) for focused analysis of EIR/EIS
3. Status of MCWD and County applications to serve as Groundwater Sustainability Agency
(GSA) for the portions of the Salinas Valley Groundwater Basin
4. Status of Public Records Act request relative to the MPRWA
5. CPUC approved the Citizens for Just Water (CJW), incl. Rosemary Knight from Stanford
University, as an additional intervener in the MPWSP application
6. Status of the proposed amendment to the Large Settlement Agreement (LSA)
7. Status of Public Water Now's motion to withdraw from the LSA

President Kampe asked the board if there are any reports from Directors and Staff. Executive
Director Cullem reported the following:

o The Monterey Peninsula Water Supply Project (MPWSP) Environmental Impact Report
(EIR) has been released for public review and there is a 45-60 day comment period.

o Geosyntec will be conducting a focused analysis of the EIR/EIS per the Authority's
request.

o The Marina Coast Water District (MCWD) and County have applications to serve as a
GSA for portions of the Salinas Valley Groundwater Basin which could have some
impact on California American Water (Cal Am).

o The large Public Records Act Request (PRA) received by the Authority re: MPWSP is
being compiled and Don Freeman is facilitating the request.
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o There is a new intervener "Citizens for Just Water" in the large settlement agreement
and a Judge has allowed them to participate in the agreement.

o Public Water Now has made a motion to withdraw from the settlement agreement.

PUBLIC COMMENTS

None

CONSENT AGENDA

On a motion by Director Pendergrass, seconded by Director Edelen, and carried by the

following vote, the Monterey Peninsula Regional Water Authority Approved the consent
agenda, with Director Rubio abstaining from the November 10, 2016 Minutes:

AYES: 6 DIRECTORS: Dallas, Edelen, Pendergrass, Roberson, Rubio,

Kampe
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

2. Approve Minutes of Director's Meeting of November 10, and December 8, 2016 - Romero
Action: November 10, 2016, Minutes Approved (5-0-1; Rubio abstained), December 8,
2016, Minutes Approved (6-0)

3. Approve and File Authority Checks Through December 31, 2016 - Romero
Action: Approved

***End of Consent Agenda***

AGENDA ITEMS

4. Receive and Approve Annual Financial Report and a Full Opinion Audit for FY 2015-2016 from
McGilloway, Ray, Brown and Kaufman CPA (Kaufman), and Provide Staff Direction - Kaufman

Patricia Kauffman, CPA, McGilloway, Ray, Brown and Kaufman, gave a presentation on the
financial audit for FY 2015-2016. She gave an overview of the audited financial statements and
audit opinions. She gave a report on the operating revenues and expenses and stated that
contract expenses are lower and legal expenses are higher which was expected. She explained
the communication with management accounting policies and said there were no
disagreements with management and reported that no material weaknesses were found. She
announced the recommendations for FY 15-16 is a general journal entry process and cash
disbursement check sequencing. She also recommended QuickBooks security password,
control accurate dating of checks and deposits, cutoff controls, and backup of QuickBooks.

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PUBLIC COMMENT

None

Mayor Rubio reported that the finance committee went over audit in detail and recommends
approval.

Executive Director Cullem thanked the Ms. Kaufman and the City of Monterey finance staff for
assisting in the audit.

On a motion by Director Rubio, seconded by Director Edelen, and carried by the following vote,
the Monterey Peninsula Regional Water Authority Approved the Annual Financial Report and
Opinion Audit for FY 2015-2016 from McGilloway, Ray, Brown and Kaufman CPA:

AYES: 6 DIRECTORS: Dallas, Edelen, Pendergrass, Roberson, Rubio,

Kampe
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

5. Receive Update, Discuss, and Provide Staff Direction on the Deep Water Desal Project and the
People's Moss Landing Desal Project - Project Representatives
Action: Received Update

Kim Adamson from Deep Water Desal (DWD) distributed a list of DWD questions and
responses to the Authority and verbally went over the responses to the questions:

o The status of DWD public ownership - moving forward as a public-private partnership.

This model allows project to move forward more quickly, and private equity is being put
to work freeing up off takers bonding capacity.
o The status of the support/approval for project source water - approval will not take place
until all alternatives for subsurface intake have been ruled infeasible. Determination by
SWRCB should be made by the end of the year.
o The CEQA/NEPA status - DWD has requested to include the subsurface feasibility
study and associated timelines be included in the EIR/EIS
o Status of state/local permitting agencies - DWD entered into an agreement with the
California Marine Sanctuary foundation to provide funds as a third party for the
California Coastal Commission for their review of all marine related permit material as
part of the EIR process.
o Overall schedule for delivery of water to end user - late 2021.
o New info/development pertinent to the project - DWD has initiated power agreement
efforts with Salinas and the City will be forming a municipal power agency to supply
wholesale power for the project. DWD has estimated a price of $2000-2500 per acre
foot. Design level is at 10-20%.

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Director Edelen asked Ms. Adamson if the bureaucratic process for this project in California is
more extensive and costly than other areas. Ms. Adamson responded that she didnt know but
said that the process may be streamlined better. President Kampe asked about the
geographical feasibility of subsurface intake, and at what capacity. Ms. Adamson responded
that they are looking at two areas: the mouth of the old Salinas River and the Pajaro River
mouth, and the capacity is 25,000 acre feet per year.

Director Roberson asked about slant wells. Ms. Adamson responded that due to the angles and
restrictions of the slant wells they would have to be put on the beach. She added they have
asked the California State Parks for access to the beach but arent sure how they will respond.
Director Roberson asked who the DWD customers would be and what the cost would be from
the customer to the public including delivery. Ms. Adamson said that Soquel Creek Water
District, Santa Cruz, the Peninsula, Salinas, and Castroville are potential customers. She
responded that she doesn't have an answer for the consumer cost because she doesnt know
what the rate structures for deciding cost with delivery are.

Director Rubio asked if there is a unit price for cost of water related to the cost of the project.
Ms. Adamson responded that for every $10 million dollars spent adds approximately $10 to the
cost of water.

PUBLIC COMMENT

Tom Rowley, Monterey Peninsula Tax Association (MPTA), thanked the Authority for
the presentation from DWD. He stated that MPTA thinks diversified projects are the
best.

The Board thanks Ms. Adamson for her presentation and update on Deep Water Desal

6. Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP) and Status of Test Well Operation and Pipeline Construction - Crooks
Action: Received update

Catherine Stedman, Cal Am, gave a presentation on MPWSP schedule, pipeline, and test well
updates:

o The MPWSP EIR came out January 12, 2017.

o The consultant on the EIR will be holding public meetings to explain the document.

o The remainder of the permitting schedule has stayed the same because the Public
Utilities Commission (PUC) has not released new dates.

o The desal water start up window is still the end of 2019 or early 2020.

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MPRWA Minutes Thursday, January 12, 2017

o The current Aquifer Storage Recovery (ASR) program has benefited from recent rains to
store water.

o The Monterey Pipeline construction main relocates will be completed by February.

o The test wells are at 92-93% salinity and the data has been posted online.

Director Edelen asked if Authority involvement with the MPWSP will be needed once
constructions begins in 2018. Ms. Stedman replied that the Authority has been helpful in the
permitting process but once construction begins all the necessary permits will have been
acquired. She added that perhaps Ian Crooks would have more input to give on the Authoritys
involvement during the construction phase.

Director Roberson asked for clarification on main relocates. Ms. Stedman responded that
there are certain areas where the pipeline has to be relocated to accommodate the larger
pipeline.

PUBLIC COMMENT

None

President Kampe thanked Ms. Stedman for the Cal Am progress update.

ADJOURNMENT

President Kampe adjourned the meeting at 8:14pm.

ATTEST:

Nova Romero, Authority Clerk MPRWA President

Monterey Peninsula Regional Water Authority

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