Regular Board Meeting
Board of Directors
Monterey Peninsula Water Management District
September 15, 2003
The meeting was called to order at 7:00 PM in the Seaside City Council Chambers.
Board members present:
Zan Henson, Chair – Division 5
Judi Lehman, Vice Chair – Division 2
Alvin Edwards – Division 1
Molly Erickson – Division 3
Kris Lindstrom – Division 4
David Pendergrass – Mayoral Representative
Dave Potter – Monterey County Board of Supervisors
Board members absent: None
General Manager present: Fran Farina
District Counsel present: David C. Laredo
The assembly recited the Pledge of Allegiance.
The following comments were presented to the Board during the Oral Communications period. (1) Walter Clark read a statement dated September 10, 2003 written by Debra Gramespacher (on file at the District office). Mr. Clark requested that Ms. Gramespacher’s water permit be amended to allow installation of a Turbo Capizzi or similar one-gallon flush toilet. Mr. Clark threatened to file a legal action against the District if his request was not approved. (2) Wally Smith explained that he has owned his split-level home since 1968, and there is no bathroom on the first floor. He requested that the Board allow the installation of a half-bath in homes that were designed like his. (3) Tom Trainer lives next door to Mr. Smith. He noted that Mr. Smith was exposed to agent orange during military service and has difficulty climbing stairs to the bathroom on the second floor of his home. Mr. Trainer expressed support for installation of a half-bath in Mr. Smith’s home. (4) Steve Leonard, California-American Water Company (Cal-Am), reported that 17.8 acre-feet of water from the Carmel Valley aquifer have been delivered to the Ryan Ranch water distribution system. A replacement well that will produce water from the Ryan Ranch areas should be in production by the week of September 22, 2003. Installation of the replacement well will alleviate the need to provide water to that area from the Carmel Valley aquifer.
On a motion by Director Erickson and second by Director Potter, the Board approved adoption of items 1, 3 and 4 and pulled item 2 for separate consideration on a vote of 7 – 0
Approved. Director Potter abstained from voting on the minutes of the August 28, 2003 meeting because he was not present at that meeting.
On a motion by Director Erickson and second by Director Lehman the Board authorized a contract with Don Alley and Associates for an amount not to exceed $21,250. The motion was approved on a vote of 4 – 3. Directors Erickson, Henson, Lehman and Lindstrom voted in support. Directors Edwards, Pendergrass and Potter were opposed.
General Manager Farina reported that a pump at the Sleepy Hollow Steelhead Rearing Facility failed on September 14, 2003. The pump will be repaired and a back-up unit has been ordered. Ms. Farina announced that candidates for Board seats in Divisions 3, 4 and 5 were invited to participate in a tour of San Clemente Dam and the Sleepy Hollow facility on September 19, 2003. She thanked Cal-Am for granting the tour participants access to San Clemente Dam property. Ms. Farina advised the Board that Eric Sandoval, the District’s new Engineering Technician, began work with the District that day. She also reported that the California State Legislature adjourned the 2003-2004 session without adopting SB149. The bill remained in the Suspense File of the Assembly Appropriations Committee. General Manager Farina apologized for the delay in production of the September Board packet. She announced that after the October Board packet is published, it would be posted on the District’s web site.
District Counsel Laredo reported that at the August 28, 2003 Closed Session, the Board was given an update on the noticed agenda items. The Board provided general direction to Counsel and staff. No other reportable action was taken. At the September 15, 2003, 5:30 PM Closed Session, the Board appointed Fran Farina to the position of General Manager for a term ending June 30, 2004. The action was taken on a vote of 6 – 1. Directors Erickson, Henson, Lehman, Lindstrom, Potter and Pendergrass voted in favor. Director Edwards was opposed. Mr. Laredo noted that as a result of that decision, item 9 on the September 15, 2003 agenda would be continued to a future meeting date.
Director Edwards thanked District staff for the good work accomplished at the Sleepy Hollow Steelhead Rearing Facility. Director Henson expressed agreement with Mr. Edwards comment.
On a motion by Director Erickson and second by Director Edwards, the Board continued this item to the October 20, 2003 meeting so that the proposed CEQA Findings, Financing Agreement, Recycled Water Sales Agreement, and the Construction and Operations Agreement could be considered along with the ordinance. The motion was approved on a vote of 6 – 1. Directors Edwards, Erickson, Henson, Lehman, Lindstrom and Potter voted in favor of the motion. Director Pendergrass voted in opposition to the motion.
Director Henson requested that a memorandum be prepared for Board review that outlines the District’s options in regards to the Independent Reclaimed Water Users Group concern about the definition of “emergency.” The memo should describe how the District could address those concerns.
The following comments were directed to the Board during the public hearing on this item. (1) Mark Stilwell, Executive Vice President and General Counsel to the Pebble Beach Company (PBCo), thanked District staff and special counsel for working to develop Ordinance No. 109. He explained that PBCo, as fiscal sponsor of the wastewater reclamation project, has expended over $2 million to fund operating shortfalls, design Phase II improvements, and pay off Certificates of Participation for project construction. The Phase II improvements include retrofit and utilization of the Forest Lake Reservoir, and construction of an advanced treatment facility at the CAWD facility to reduce the salt content of the reclaimed water. The result of these improvements is that 100 percent of irrigation needs of the golf courses in the Del Monte Forest will be met with reclaimed water. He expressed support for adoption of Ordinance No. 109 with two modifications. He requested that the words “sudden and unexpected” be removed from the definition of “emergency” in Ordinance No. 109. And that the last sentence of the definition, which refers to the duration of an emergency, be deleted. Mr. Stilwell reasoned that if the CAWD plant were unable to produce reclaimed water due to a true emergency that was outside the control of the golf course users, they should not be denied use of potable water. It could take many months to repair damage to the CAWD facility due to an earthquake. During that time, the golf course users would need irrigation water. Therefore, establishment of a time limit on use of back-up potable water in an emergency situation is not reasonable. (2) Thomas Jamison, representing PBCo, noted that his interpretation of Section 3.F of Ordinance No. 109 is that PBCo could transfer a portion of its entitlement to residential lots in the Del Monte Forest not owned by PBCo at the time of this ordinance, and that payment would be made into the escrow account. He stated that the intent of the ordinance is that PBCo could sell a benefited property along with a portion of entitlement water, without paying into the escrow account. (3) Lloyd Lowrey, representing the Independent Reclaimed Water Users Group (IRWUG) whose members will contract for use of reclaimed water from the updated facility. Mr. Lowrey stated that the IRWUG has spent approximately $2 million on development a of solution to concerns about the reclaimed water quality. He voiced concern about the definition of emergency in Ordinance No. 109. He requested that the words “sudden and unexpected” be removed from the last sentence of the definition. According to Mr. Lowrey, an emergency is any situation in which service is interrupted. That could be the result of a planned or unexpected government action, or it could be a natural disaster such as an earthquake. The reclaimed water users should not be left without a back-up water source should a planned or unanticipated interruption in service occur that is outside of their control. He noted that the phrase “sudden and unexpected” has often been a subject of litigation in insurance law. (4) Marc Beique, a candidate for election to the Board from Division 3, remarked that the $15 million cost of the project would result in water that costs $1,000,000 per acre-foot. He asked why the right to use the reclaimed water is not revocable if construction of the project is delayed. (5) Leo Laska, President of the Board of Directors of the PBCSD, urged the Board to adopt Ordinance No. 109. He stated that to delay the first reading of this item for another month would not affect the schedule for construction of improvements at the PBCSD facility. (6) Robert Wellington, legal counsel to CAWD and PBCSD, the public agencies responsible for production and distribution of reclaimed water in the Del Monte Forest. Mr. Wellington expressed concern with the definition of emergency in the ordinance. He requested that the words “sudden and unexpected” be removed from the definition. In addition, he asked that the last sentence of the definition be deleted from the ordinance. Mr. Wellington explained that Ordinance No. 109 would transfer the responsibility and liability for water quantity and quality from the District to CAWD and PBCSD. He stated that the agencies couldn’t guarantee water quality and quantity, unless there is a back-up potable water source. (7) Ray von Dohren, General Manager of CAWD, explained that the reclaimed water project provides the reclaimed water users with two sources of supply. If there is an emergency situation, or the production facilities need repair, they must have access to a back-up supply. He noted that if water were withheld from the golf courses for 10 days, losses to the local industry could total billions of dollars. (8) Jim Nero, President of the Del Monte Forest Property Owners Association, confirmed the Association’s support for the wastewater reclamation expansion project.
Director Potter offered a motion that was seconded by Director Erickson, to approve the first reading version of Ordinance No. 110. The motion was approved unanimously on a vote of 7 – 0
The following comments were directed to the Board during the public hearing on this item. (1) Marc Beique, a resident of Monterey, suggested that the Board establish a “humanitarian” account. He proposed that as part of the Toilet Retrofit Rebate program, applicants who retrofit could receive a cash rebate or bank water credit in the humanitarian account. A portion of the water credit that is currently set aside as conservation savings would be placed in the humanitarian account. Those banked water credits could be utilized by persons who need to install additional fixtures, such as Wally Smith who spoke during Oral Communications. (2) Sheryl McKenzie, Government Affairs Director for the Monterey County Association of Realtors, asked staff for clarification of the time limit on expiration of water credits. She also asked why a time limit was necessary.
On a motion by Director Pendergrass and second by Director Lindstrom, the Quarterly Water Supply Strategy and Budget was approved unanimously on a vote of 7 – 0.
No comments were directed to the Board during the public comment period on this item.
Director Henson announced that this item would be continued to a future Board due to the decision made in Closed Session that evening to appoint Fran Farina to the position of General Manager through June 30, 2004.
On a motion by Director Edwards and a second by Director Lehman, the Board adopted the staff recommendation to authorize the Administrative Committee to develop notice and agenda requirements for the four ad-hoc advisory committees identified as not subject to the Brown Act, then submit the requirements to the Board for ratification. The motion was approved unanimously on a vote of 7 – 0.
No comments were directed to the Board during the public comment period on this item.
Director Erickson offered a motion that was seconded by Director Lindstrom, to conduct a hearing to determine whether or not to revoke the Surf ‘n Suds water credit transfer. The hearing date will be set on either October 23 or 24, 2003 based on availability of the Directors. The motion was approved on a vote of 4 – 3. Directors Erickson, Henson, Lehman and Lindstrom voted in favor of the motion. Directors Edwards, Pendergrass and Potter were opposed.
The following remarks were directed to the Board during the public comment period on this item. (1) Sean Absher, representing Skyline Crest Enterprises, urged the Board to refrain from scheduling a revocation hearing because there was no basis on which to conduct the hearing. He remarked that the Board’s allegations question the reputations of his client and Mr. Fred Flatley. He explained that the Skyline Crest project, a 115 unit senior assisted living facility, has received all discretionary approvals from the City of Monterey. According to Mr. Absher, the public’s right to appeal has expired, and the only way to halt construction of this project is for the Board to conduct the revocation hearing. He stated that a competitor of Skyline Crest probably brought the allegations of profiteering forward. Mr. Absher explained that language in Ordinance No. 97 adopted after January 2001 required water credit transfer applicants to attest under penalty of perjury that “no money or other valuable consideration has been given or received” for the water credits. The application for this project was submitted in January 2001, and the declaration signed by Mr. Flatley did not contain the language adopted after January 2001. In addition, the City of Monterey had approved the water release form prior to adoption of the language. Mr. Absher stated that the District’s ordinance was not violated. He surmised that the fault in this situation rested with District staff. (2) Marc Beique, a resident of Monterey, described the $400,000 purchase price for the Surf ‘n Suds business as “cheap.” He remarked that it will be difficult for the Board to define how much of the purchase price was payment for the business and how much was payment for the water credits. He urged the Board to refrain from conducting a revocation hearing because payment of the resultant legal fees would be a waste of money. (3) Tex Irwin stated that based on his experience, when a commercial enterprise is sold, part of the purchase price is based on the value of the business that had been established. When a laundry is sold, the purchase price would not be strictly for the water use established there. Mr. Irwin stated that the buyer of a business has a right to do what he wants with that business. He remarked that if Mr. Flatley sold a business, there is “a lot of room for discussion.”
Director Edwards proposed a motion to continue this item to a future meeting date as requested by speakers during the public comment period. The motion was seconded by Director Pendergrass
Director Erickson offered an amending motion requesting that at the October 20, 2003 meeting, the Board provide direction on preventing desalination plants that do not operate for the benefit of the public as a whole until Order 95-10 is resolved, based on all information provided in Exhibits 12-A through 12-D presented in the staff report. Director Potter seconded the motion.
Director Erickson advised the Board that her amending motion was to request that District staff present an ordinance at the October 20, 2003 meeting that would prevent desalination plants that do not operate for the benefit of the public as a whole until Order 95-10 is resolved. Director Potter withdrew his second. Director Lindstrom then seconded the motion. The motion was approved on a vote of 4 to 3. Directors Erickson, Henson, Lehman and Lindstrom voted in favor of the motion. Directors Edwards, Pendergrass and Potter were opposed.
The following remarks were presented to the Board during the public comment period on this item. (1) John Fischer, resident of Pacific Grove, urged the Board to defer action on this item until other permitting agencies have formulated policies and determined what role the District should have in development of desalination projects. (2) Marc Beique expressed agreement with comments made by Mr. Fischer. (3) Tex Irwin expressed agreement with comments made by Mr. Fischer. He referenced a report recently prepared by the California Coastal Commission on seawater desalination.
There was no discussion of these items.
The meeting was adjourned at approximately 10:40 PM.
CALL TO ORDER/ROLL CALL
PLEDGE OF ALLEGIANCE
1. Consider Approval of Minutes from the Regular Board Meeting of August 18, 2003 and Special Board Meeting of August 28, 2003
2. Consider Contract with Don Alley and Associates to Assist with Fishery Evaluation for Water Supply Project EIR
3. Consider Approval of Recommendation for Election of Officers to the Association of California Water Agencies’ Governing Board
4. Consider Adoption of Treasurer’s Report for June 2003
GENERAL MANAGER’S REPORT
5. Report on Closed Session of August 28, 2003
12. Consider Adoption of October through December 2003 Quarterly Water Supply Strategy and Budget
13. Consider Approval of Schedule, Brochure and Advertisement for Recruitment of General Manager
14. Review Status of Board Committees and Provide Direction on Noticing Non-Brown Act Subcommittee Meetings
15. Determine Whether or Not to Convene a Hearing on the Possible Revocation of the Surf ‘n Suds Water Credit Transfer, 1101 Del Monte Avenue, Monterey, APN 001-810-022
11. Determine Whether or Not to Convene a Hearing on the Possible Revocation of the Surf ‘n Suds Water Credit Transfer, 1101 Del Monte Avenue, Monterey, APN 001-810-022
12. Discuss Private Desalination Plants
INFORMATIONAL ITEMS/ STAFF REPORTS
16. Letters Received
17. Committee Reports
18. Strategic Planning Initiatives Progress Report
19. Monthly Water Supply Project Status Report
20. Quarterly Public Information Program Report
21. Carmel River Fishery Report
22. Water Conservation Program Report
23. Water Use Credit Transfer Status Report
24. Monthly Allocation Report
25. Monthly Cal-Am Sales Report
26. Monthly Cal-Am Production Report
27. Production Report – CAWD/PBCSD Wastewater Reclamation Project
28. Monthly Water Supply Status Report
Fran Farina, Secretary to the Board
A Tavani, 11-6-03, Minutes, 7 pages