FINAL MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District February 24, 2005

The meeting was called to order at 7:00 PM in the Boardroom in the offices of the Monterey Regional Water Pollution Control Agency. Directors present: Larry Foy, Chair – Division 5 Alvin Edwards – Division 1 Judi Lehman – Division 2 Michelle Knight – Division 4 David Pendergrass – Mayoral Representative David Potter – Monterey County Board of Supervisors (Arrived at 7:30 PM) Directors absent: Kristi Markey, Vice Chair – Division 3 General Manager present: Joe Oliver, Water Resources Manager attended in place of General Manager David Berger who was on vacation. District Counsel present: David C. Laredo The assembly recited the Pledge of Allegiance. No comments. On a motion by Director Pendergrass and second by Director Edwards, the Consent Calendar was unanimously approved on a vote of 5 – 0. Directors Markey and Potter were absent. Approved. Approved. Approved. Approved. Approved. A summary of Henrietta Stern’s presentation is on file at the District office. In response to a question from the Board, Joe Oliver stated that a report on the preliminary results of the water year 2005 aquifer storage and recovery project testing period might be available in April or May 2005. A summary of Darby Fuerst’s presentation is on file at the District office. In response to questions from the Board, Mr. Fuerst stated that to date, Carmel River runoff to the ocean was estimated at approximately 40,000 acre-feet. Normal year runoff is approximately 20,000 acre-feet. In addition, Cal-Am production was 600 acre-feet below the projected year-to-date target. That represented total production from the Seaside Basin at 400 acre-feet below target, and production from the Carmel River at 200 acre-feet below the target. District Counsel, David Laredo, reported that he provided an update to the Board on the five agenda items, but no specific action was taken. Mr. Laredo also reported that the Board voted unanimously to add an additional item to the closed session agenda under Existing Litigation. The item was titled California-American Water Company’s General Rate Case to the Public Utilities Commission, Application Number 05-02-012. No specific action was taken on that item. The Board also conducted District Counsel’s performance evaluation Director Edwards asked when the MPWMD conference room would be upgraded and available for monthly Board meetings. Rick Dickhaut responded that the room might be available for Board meetings by April or May 2005. Director Knight thanked District staff for production of the nametags that were distributed to each Director. Director Edwards made a motion to approve the staff recommendation to accept Counsel’s interpretation of “site”, deny the appeal, and adopt the Findings of Denial. In addition the Rules and Regulations Review Committee was directed to clarify the term “unity of ownership” in District Rule 11. The motion was seconded by Director Lehman and approved unanimously on a vote of 5 – 0. Directors Edwards, Foy, Knight, Lehman and Pendergrass voted in favor of the motion. Directors Markey and Potter were absent. Eric Marsh, Secretary/Treasurer of Las Villas Nogales Home Owners Association, addressed the Board during the public comment period on this item. He maintained that the homeowners association did meet the unity of ownership requirement. He suggested that the District’s rules be changed to add the term “identical ownership.” Director Potter arrived at approximately 7:30 PM, during the staff presentation on item 11. Director Potter proposed a motion to adopt the staff recommendation to deny the appeal and adopt the Findings of Denial. Director Edwards seconded the motion. It was adopted on a vote of 6 – 0. Directors Edwards, Foy, Knight, Lehman, Pendergrass and Potter voted in favor of the motion. Director Markey was absent. Adam Serrano, the applicant, addressed the Board during the public hearing on this item. He disagreed with the District’s denial of his application to add a bathroom under District Rule 24-C. According to Mr. Serrano, the addition of a bathroom and a half-bath would not increase water use because the number of people living in the house would not change. Director Edwards made a motion to approve the staff recommendation to deny the appeal and adopt the Findings of Denial. In addition, the Rules and Regulations Review Committee was charged to review Rule 24-C and determine if it should be modified. The motion was approved unanimously on a vote of 6 – 0. Director Markey was absent. Suzan Kelly, the applicant, addressed the Board during the public hearing on this item. She asked the Board to be flexible in administration of their rules and approve the appeal. According to Ms Kelly, if the appeal were to be denied she would be forced to downsize her project. On a motion by Director Edwards and second by Director Knight, the Board voted to approve the staff recommendation to adopt the Findings of Approval for Application No. 20041001CWW for Permits M05-01 (potable system) and M5-02 (non-potable system); and approve Application No. 20041001 CWW and authorize issuance of MPWMD Permits M05-01 (potable system) and M05-02 (non-potable system) with the Conditions of Approval. In addition Finding No. 2 of the Findings of Approval for Permits M05-01 and M05-02 will be amended as follows: delete the words “on the same Final EIR” from the last sentence of Finding 2 and replace with the words “a Negative Declaration.” Also, the Draft Conditions of Approval for Permit M05-01 shall be amended as follows: page 7, item k, sentences 1 and 2, the references to a specific fee or hourly rate of payment shall be deleted and replaced with a reference to “the prevailing rate.” The motion was approved on a vote of 5 – 1. Directors Edwards, Foy, Knight, Pendergrass and Potter voted in favor of the motion. Director Lehman was opposed. Director Markey was absent. The following comments were directed to the Board during the public hearing on this item. (1) Derinda Messenger, representing the applicant, agreed with the suggestion to amend the Conditions of Approval for Permit M05-01 by adding language referring to the “prevailing rate.” She suggested that Finding No. 2 in the Findings of Approval for Permits M05-01 and M05-02 should be amended by removing the words “on the same Final EIR’ and replacing them with the words “a Negative Declaration.” (2) Alan Williams thanked the Board and staff for their work on bringing this application forward. He noted that many of the reporting requirements established by the District as a condition of these permits, are also required by the Public Utilities Commission. (3) Robert Greenwood, representing the Carmel Valley Association, spoke in support of the concept of combining the CaZada Woods and Monterra Ranch systems. He urged the Board to investigate the adequacy of the two-way metering system. He stated that District staff should be checking the meter. (4) Alan Williams stated that the State Water Resources Control Board approved the concept of the two-way metering system. In addition, he would have no objections to District staff checking the meter. Director Pendergrass offered a motion to approve the staff recommendation to: (1) adopt the Negative Declaration, (2) adopt the first reading of Ordinance No. 119, and (3) incorporate into Ordinance No. 119 language under Rule 165 related to the use of water on areas served by the CAWD/PBCSD Wastewater Reclamation Project that was submitted by District Counsel at the meeting. The motion was approved unanimously on a vote of 6 – 0. Director Markey was absent. The following comments were directed to the Board during the public hearing on this item. (1) John Fisher, resident of Pacific Grove, expressed support for the ordinance. (2) Steven Leonard, General Manager of Cal-Am, spoke to the issue of unaccounted for water use. He stated that Cal-Am and the District planned to cooperatively develop a method for estimating unaccounted for water use that does not penalize Cal-Am or its customers when they conserve water. (3) Robert Greenwood, Carmel Valley Association, expressed support for the measures in Ordinance No. 119 that would trigger Phase 3 more effectively. On a motion by Director Lehman and second by Director Potter, the first reading of Ordinance No. 120 was unanimously approved by the Board on a vote of 6 – 0. Director Markey was absent. No comments were directed to the Board during the public hearing on this item. On a motion by Director Pendergrass and second by Director Knight, the mid-year budget adjustment for Fiscal Year 2004-05 was unanimously approved by the Board on a vote of 6 – 0. Director Markey was absent. No comments were directed to the Board during the public hearing on this item. No discussion. The meeting was adjourned at 9:40 PM.

CALL TO ORDER/ROLL CALL PLEDGE OF ALLEGIANCE ORAL COMMUNICATIONS CONSENT CALENDAR 1. Consider Adoption of Minutes of the January 19, 2005 Board Workshop on 2005-2006 Fiscal Year Budget Planning and the January 27, 2005 Regular Meeting of the Board 2. Approve Amendment to Agreement for Sale of Recycled Water between MPWMD and Robert Louis Stevenson School 3. Approve Deed Restriction Template 3.7, Notice of Removal of Deed Restrictions 4. Approve Revisions to Deed Restriction Implementation Guidelines 5. Receive Scoping Report Summarizing Comments on Notice of Preparation for EIR on MPWMD Aquifer Storage and Recovery Project PRESENTATIONS 6. Water Supply Project Alternatives Update GENERAL MANAGER’S REPORT 7. Status Report on California-American Water Compliance with State Water Resources Control Board Order 95-10 ATTORNEY’S REPORT 8. Report on 5:30 PM Closed Session DIRECTORS’ REPORTS 9. Oral Reports on Activities of County, Cities, Other Agencies/Committees/ Associations PUBLIC HEARINGS 10. Consider Appeal by Las Villas Nogales Home Owners’ Association of Staff Determination Regarding Denial of Water Use Credits on Adjacent Properties – Continued from December 13, 2004 Board Meeting 11. Consider Appeal of District Staff’s Decision to Deny a Water Permit Pursuant to MPWMD Rule 24-C, Special Fixture Unit Accounting – 902 Via Verde, Del Rey Oaks (APN 012-541-003) 12. Consider Appeal of District Staff’s Decision to Deny a Water Permit Pursuant to MPWMD Rule 24-C, Special Fixture Unit Accounting – 167 Laurel Avenue, Pacific Grove (APN 006-247-005) 13. Consider Application to Create CaZada Woods Water Company Water Distribution System (Combining CaZada Woods and Monterra Ranch Systems); APN 169-011-004 et al (Tehama/Monterra) 14. Consider First Reading of Ordinance No. 119 – An Ordinance of the Board of Directors of the Monterey Peninsula Water Management District Amending District Rules to Modify the Expanded Water Conservation and Standby Water Rationing Plan 15. Consider First Reading of Ordinance No. 120 – An Ordinance of the Board of Directors of the Monterey Peninsula Water Management District Setting and Amending Administrative Fees for Various Services, Including Permit Processing, and Enabling Future Amendment of Fees by Board Resolution 16. Consider Adoption of Mid-Year FY 2004-2005 Budget Adjustment INFORMATIONAL ITEMS/STAFF REPORTS 17. Letters Received 18. Committee Reports 19. Strategic Planning Initiatives Progress Report 20. Carmel River Fishery Report 21. Water Conservation Program Report 22. Monthly Allocation Report 23. Monthly California-American Water Company Production Report 24. Semi-Annual Financial Report on the CAWD/PBCSD Recycled Water Project 25. Monthly Water Supply Status Report 26. Receive and File Semi-Annual Groundwater Quality Monitoring Report ADJOURNMENT

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David A. Berger, Secretary to the Board

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