On a motion by Director Edwards and second by Director Pendergrass, the Consent Calendar was unanimously approved by the Board with the exception of item H, Consider Approval of Fourth Quarter Investment Report, that was pulled for separate consideration.

IV ORAL COMMUNICATIONS

V. PRESENTATIONS

A. General Manager's Report

• Improving Communication Using the District's Web Site and Electronic Media

In response to a question by Director Erickson, Mr. Avila explained that the agenda and Board packet for the August 20, 2001 meeting were not distributed in a timely manner due to delays in production an in additional time required to complete the deed restrictions item. He apologized for any inconvenience experienced by members of the public. Mr. Avila announced that District staff would participate in the August 28, 2001 field tour of the Carmel Valley watershed organized by the State Water Resources Control Board (SWRCB). In addition, the District would participate in a hearings on SWRCB Order 2001-04 on September 17 and 18, 2001.

District Counsel Laredo advised the assembly that the Closed Session scheduled for July 10, 2001 was not conducted. He had nothing further to report.

B. Attorney's Report

Director Edwards announced that he visited the Sleepy Hollow Steelhead Rearing Facility and found it to be in full operation. Director Lindstrom asked for a report on the evaluation of noise levels at the Sleepy Hollow facility. Director Chesshire reported that he and Judi Lehman had filed for candidacy in Voter Division 2. Director Erickson requested an update on allegations by Clifford Bagwell that Cal-Am is illegally providing water to properties outside of its service area and the District boundary. Director Erickson also asked for an update on plans to revise the commercial water use factors.

C. Directors' Reports

1. Board Comments and Referrals

V. PRESENTATIONS

C. Directors' Reports

1 Board Comments and Referrals

A motion was made by Director Henson to deny without prejudice the applicant's request for an appeal, and to adopt the Findings of Denial. Director Lindstrom seconded the motion. The motion was approved unanimously on a vote of 7 to 0.

The following comments were presented to the Board during the public hearing on this item. (1) John Mandurrago, the applicant, stated that he was not present at the house inspection conducted by the District in 1997. After he bought the house in 1998, he called the District to say that the original inspection report did not include fixtures for a kitchen downstairs. According to Mr. Mandurrago, District staff took no action to correct the situation. Later, Mr. Mandurrago removed all the fixtures and plastered over the area where they had once stood. He noted that a cast-iron drain from the kitchen is still exposed. Mr. Mandurrago maintained that he should receive water credit for removal of the kitchen. He told the Board that someone did inspect the house and at that time observed the cast-iron drain pipe. Mr. Mandurrago asked how the District's rules could be changed to reflect the fact that water is not saved when a washing machine is removed from a home because laundry must be cleaned at a local laundromat. (2) Ronald Kabat stated that he viewed the house before it was purchased by Mr. Mandurrago. At that time there was no fish pond in the house, neither was there a kitchen downstairs.

VI. PUBLIC HEARINGS

A. Consider Appeal of "Decision of the General Manager of the Monterey Peninsula Water Management District" Regarding Denial of Water Use Credits for 3481 Oliver Road, Carmel - Mandurrago

A motion was made by Director Henson and seconded by Director Potter to present the ordinance for first reading within 60 days with the following modification: all ex parte communications shall be reported, the reference to a qualifying "economic interest" in Section Six C. 1 shall be deleted. In addition, the Board requested that research be done to determine the legality of enforcing Section Five of the draft ordinance that requires "disclosure of all persons who will be communicating with the District on the applicant's behalf...." The Board limited the time allotted for legal counsel to research this issue to five hours. The motion was approved on a vote of 6 - 1. Director Chesshire voted against the motion.

The following comments were directed to the Board during the public hearing on this item. (1) Fran Farina recommended that if an ex parte communications policy is adopted, clear direction must be provided to the applicant about the requirements. In addition, the words "for compensation" should be removed from the policy, as should the $1,000 threshold. (2) David Dilworth, representing HOPE, urged the Board to delete the $1,000 threshold and recommended that any interested person with an economic interest in the project be subject to ex parte reporting requirements. (3) Michael Waxer stated that if the Board's goal is to ensure that the policy is fair, the applicant should not be required to know at the beginning of the process the names of all persons who might be involved with the application. Mr. Waxer recommended that ex parte communications that occur between an applicant or any person regarding a quasi-judicial matter should be reported by the Directors.

B. Consider First Reading of Ordinance No. 99 - An Ordinance of the Board of Directors of the Monterey Peninsula Water Management District Requiring Disclosure of Ex Parte Communications and Establishing Disclosure of Ex Parte Communications and Establishing Penalties and Remedies for Non-Disclosure

VI. PUBLIC HEARINGS

B. Consider First Reading of Ordinance No. 99 - An Ordinance of the Board of Directors of the Monterey Peninsula Water Management District Requiring Disclosure of Ex Parte Communications and Establishing Disclosure of Ex Parte Communications and Establishing Penalties and Remedies for Non-Disclosure

The meeting was adjourned at 8:45 PM and reconvened at 9 PM.

A motion was made by Director Henson to suspend receipt of applications for water credit transfers. Director Edwards offered a second. The motion was approved unanimously on a vote of 7 - 0. The Directors discussed modifications to the water credit transfer rules that could be incorporated into a new ordinance which could be presented for first reading at the next meeting. A summary of the Board's discussion is included with the minutes as Attachment 1.

The following comments were directed to the Board during the public comment period on this item. (1) Robert Greenwood, representing the Carmel Valley Property Owners Association, read a letter on file at the District office dated August 20, 2001. The letter outlined specific recommendations regarding water credit transfer rules. (2) Don Edgren, representing the City of Monterey, expressed agreement with recommendations made by the Policy and Technical Advisory committees that were outlined in the staff report to the Board. He urged the Board to allow the jurisdictions to decide how water credits can be reused. (3) Nancy Isakson asked District staff for a description of "conservation savings" and asked staff to explain the purpose of the proposed allocation of water credits to conservation savings. (4) Sheryl McKenzie, Governmental Affairs Director for the Monterey County Association of Realtors, urged the Board to continue the water credit transfer program. She expressed agreement with comments made by Don Edgren. (5) Fran Farina, representing Save Our Carmel River (SOCR), advised the Board to complete an update of the Allocation Program EIR before taking up the issue of continuing the water credit transfer program. Ms. Farina stated that if the Board did take action to continue the water credit transfer program, she supported many of the recommendations expressed earlier by the MCPOA. She urged the Board to retain 69% of any documented water credit. (6) David Dilworth, representing HOPE, expressed support for suspension of receipt of water credit transfer applications. Mr. Dilworth expressed opposition to commercial-to-jurisdiction transfers and commercial-to-residential transfers. He stated that only water credit transfers from one commercial use to an identical commercial use should be allowed. In addition, the water credit calculation should be based on ten years of actual water use. Mr. Dilworth recommended that 69 percent of the water credit be set aside to comply with SWRCB Order 95-10 and 25 percent should be set aside as conservation savings for the benefit of the environment. He requested that the District mandate that a water waiting list be established.

VII. ACTION ITEMS

A. Discussion and Information Regarding Modifications to District Rule 28, Transfer, and Continuation of Water Credit Transfer Application Suspension

VII. ACTION ITEMS

A. Discussion and Information Regarding Modifications to District Rule 28, Transfer, and Continuation of Water Credit Transfer Application Suspension

A motion was made by Director Erickson and seconded by Director Lindstrom to: (1) endorse the deed restrictions as presented; (2) direct staff to meet with interested persons such as Realtors to receive comment on the deed restrictions; (3) present revised versions of the deed restrictions for adoption; and (4) that District Counsel approve all deed restrictions before filing. Director Erickson later withdrew her motion.

A motion was made by Director Erickson and seconded by Director Lindstrom to: (1) adopt the deed restrictions and implementation guidelines as presented with minor modifications proposed by staff; (2) direct District Counsel to review all category 1 (Notice and Covenant Regarding Limitation of Use of Water on a Property) and category 2 (Notice & Covenant to Provide Public Access to Water Use Data) deed restrictions before they are filed; (3) present the deed restrictions to the Policy and Technical Advisory committees for review and comment; and (4) bring any suggested revisions back to the Board for consideration. Ms. Erickson later withdrew her motion.

A motion was made by Director Erickson and seconded by Director Potter to: (1) refer the deed restrictions to the Policy and Technical Advisory committees for review and comment; (2) meet with local Realtors and title company representatives and receive comment on the deed restrictions; and (3) present revised deed restrictions and implementation guidelines to the Board for consideration. The motion was approved unanimously.

The following comments were presented to the Board during the public comment period on this item. (1) Marc Béïque suggested that all deed restrictions filed by the District be prefaced with the following phrase, "This restriction is in place because of the inability of the MPWMD to provide a permanent and adequate long-term water supply to this community." In addition, deed restrictions should be in effect for a limited amount of time, such as 25 to 30 years. (2) David Dilworth requested that the District provide a monthly report on "which deed restrictions get how many applications and successes." He urged the Board to allow additional public review and comment on this issue. (3) Sheryl McKenzie, Government Affairs Director for the Monterey County Association of Realtors, requested that District staff meet with Realtors and title company representatives to review the proposed deed restriction templates. She urged the Board to defer any decision on this issue until the community has had more time to review the proposed deed restrictions. (4) Fran Farina stated that any changes to the deed restrictions that might occur after the Board has adopted them should come back to the full Board for approval. She agreed that Realtors and title company representatives should have an opportunity to review the proposed deed restrictions.

B. Consider Approval of Standard Format and Implementation Guidelines for Deed Restrictions

VII. ACTION ITEMS

B. Consider Approval of Standard Format and Implementation Guidelines for Deed Restrictions

Director Chesshire made a motion to approve the agreement with De Lay & Laredo for a not-to-exceed amount of $130,000. The motion was seconded by Director Edwards. The Board approved the motion on a vote of 4 to 3. Directors Henson, Lindstrom and Erickson voted against the motion.

C. Consider Authorization of Funds for a Legal Services Agreement with De Lay & Laredo for Fiscal Year 2001-2002