Governance Committee

for the

Monterey Peninsula Water Supply Project

California American Water / Monterey County Board of Supervisors

Monterey Peninsula Regional Water Authority / Monterey Peninsula Water Management District




Regular Meeting

Governance Committee

for the

Monterey Peninsula Water Supply Project

July 16, 2014


Call to Order:

The meeting was called to order at 3:35 pm in the conference room of the Monterey Peninsula Water Management District offices.



Members Present:

Jason Burnett, Chair, representing Monterey Peninsula Regional Water Authority (JPA)

David Potter, representing Monterey County Board of Supervisors

Richard Svindland, Vice President of Engineering, California American Water (Alternate for Robert MacLean)



Members Absent:

Robert S. Brower, Sr., Vice Chair, representative for Monterey Peninsula Water Management District

Robert MacLean, representative for California American Water



Pledge of Allegiance:

The assembly recited the Pledge of Allegiance.



Public Comments:

Michael Warburton, representing the Public Trust Alliance, stated that desalination technology is not the only water supply option for the Monterey Peninsula, and that there is time to develop another solution.  He hopes that Monterey County can solve the water problem in a reasonable way.



Agenda Items


The Chair received public comment on each agenda item.


Action Items


Approve Request for Proposal for Test Slant Well Construction Consisting of Three separate Packages



Slant Well Construction



Monitoring Wells



Civil Construction (pipeline, electrical, instrumentation, vault)


Ian Crooks, Engineering Manager for California American Water’s Coastal Division, provided an estimate of test slant well construction costs; schedules for construction of the desalination project and CEMEX test well; schedule for EIR completion; and schedule to obtain a Coastal Development Permit and Local Coastal Plan approval. A copy of Mr. Crooks’ presentation is available for review on the Governance Committee website.


Richard Svindland and Mr. Crooks responded to questions from the committee.  A summary of comments made by Crooks and Svindland follows.  (a) Cal-Am has been advised that the State of California has accepted its application for $1 million in Proposition 50 funds for test well construction. Cal-Am is first on the short list of applicants who may be awarded the grant; however there has been no confirmation from the State Water Resources Control Board that Cal-Am will receive the grant.  (b) Contractors can bid on just the slant well or just the monitoring wells or both. The number of contractors qualified to drill slant wells is limited so it is advantageous to separate the contracts.   A separate bid document is presented for civil work which consists of connections to the Monterey Regional Water Pollution Control Agency (PCA) outfall, electrical conduit from the wellhead to the CEMEX site and a portion of wellhead construction – all above ground facilities.  The RFP for civil work will not be released immediately as all preliminary work has not been completed.  Cal-Am could combine the documents into one RFP if that was preferred by the Governance Committee. It may be that if one contractor bids on all three projects, the risk to Cal-Am could be reduced.  If the project design is changed, the contract for civil work may be affected.  However, the civil contract will be awarded in September, so there will be time to modify the RFP if necessary.


Public Comment:  Michael Warburton, representing the Public Trust Alliance, stated that the public will pay more for desalinated water than it currently does for water.  The California Coastal Commission will likely determine if the high cost of desalination technology is reasonable.  Awarding contracts prior to receipt of California Coastal Commission approval is a risk to the ratepayers.


Additional comments from Crooks and Svindland.  (c) Work cannot proceed until the contractor receives a notice to proceed from Cal-Am.  If the Coastal Commission required modifications to the project, they would be negotiated with the contractor.  Cal-Am must purchase a pump, pump columns, casing, and screen in advance of contractor selection, due to the amount of time needed to order and manufacture these items.  However, they would not be installed until a notice to proceed is issued.  Cal-Am could authorize $50,000 or $100,000 for planning efforts, but a contractor could not exceed that amount until a notice-to-proceed is issued. 


On a motion by Potter and second of Burnett, the Governance Committee voted to support distribution of the RFPs as presented by Cal-Am, and recommended incorporation of the following items 1 through 3, that are based on the May 28, 2013 recommendations from the Governance Committee to Cal-Am on the RFP for Design and Construction of Desalination Infrastructure.  The motion was adopted unanimously on a vote of 2 – 0 by Potter and Burnett.  Brower was absent for the vote.  Svindland expressed agreement with the motion.






Recommendations of the Committee




The Governance Committee Supports inclusion of a goal for local hiring.  California American Water (Cal-Am) shall review the County of Monterey ordinance that specifies local hires and consider inclusion of that or similar language in the monitoring well and civil construction work RFPs.  The bidder’s local utilization plan should be a factor in the 40% technical evaluation criteria.  Should non-local contractors be selected, Cal-Am should provide an explanation for its hiring decision.




Bidders should be advised that the rate of corrosion is high in the local coastal marine environment.  Good quality materials are required so that Cal-Am and the rate payers will not be responsible to pay for replacement of components that have developed rust after a short period of time




The Governance Committee agrees that the risk to local rate payers should be limited: (a) a contract could be awarded prior to issuance of all permits, but no work will begin until a notice-to-proceed is granted, and (b) Cal-Am should place a limit on the amount of money to be spent by a contractor for planning purposes prior to issuance of a notice to proceed.



Reports to Committee


Progress Report from California-American Water on Development of Monterey Peninsula Water Supply Project Desalination Plant


Crooks reviewed the desalination plant project schedule with the attendees.  He noted that project design is on schedule, and the Value Engineering Study should be complete by the end of July 2014.  In response to questions from the committee he stated that:  (a) the project EIR should be completed by the end of September 2014.  (b) The bore hole technical memo was released, and the results will be incorporated into the computer groundwater model runs.  (c) Slant well test data will not be incorporated into the EIR.  The consultant believes that information gained from groundwater modeling will be sufficient for incorporation into the EIR.  (d) An application for test wells at the Potrero Road site is complete and should be submitted soon to the County of Monterey. 


Comments from the public.  (a) David Stoldt, General Manager, Monterey Peninsula Water Management District, asked for clarification as to the time needed to obtain pumps for the test wells.  Svindland advised that the time period is 20 weeks. (b) George Riley asked what are Phase 2 and Phase 3 in relation to a two year baseline requirement.  Svindland responded that those phases represent construction periods scheduled when there is no danger to the Snowy Plover.  (c) Michael Warburton disagreed with the assumption that test well data that will not be available until after completion of the project EIR is irrelevant to the EIR process.  Svindland responded that Cal-Am plans to operate test wells for two years.  The hydro working group believes that a two-year period is not needed.  The California Coastal Commission will specify the actual test well period.  Cal-Am’s application to the California Public Utilities Commission suggests that from 8 to 15 production wells will be needed; however, that number will not be known until final design is completed.






Update on Development of Landfill Gas Term Sheet


Crooks reported that Cal-Am met with representatives from the Monterey Regional Waste Management District (Waste Management) regarding a power purchase agreement.  Waste Management’s current agreements for sale of power expire prior to expected operation of the desalination project.  It was agreed that Waste Management will contract for sale of power with another party for a 3 to 4 year period.   At the appropriate time, Cal-Am will contact Waste Management about negotiating a new agreement to supply power to the desalination project.  Cal-Am may purchase power from PG&E for a short time, until power comes available from Waste Management.


Comments from the public.  Michael Warburton stated that the green power to be generated by Waste Management should be allocated to offset existing uses of power, not for a new desalination project.  According to Mr. Warburton, use of the additional power should be an issue for public debate.



Discussion Items


Suggest Items to be Placed on Future Agendas


Suggestions were pipeline issues, a recommendation on the Value Engineering Study, and an update on the test well request for proposals.



The meeting was adjourned at 4:25 pm.