FINAL MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District January 25, 2007

The meeting was called to order at 7:05 PM in the District conference room. Board members present: David Pendergrass, Chair – Mayoral Representative Alvin Edwards, Vice Chair – Division 1 Judi Lehman – Division 2 Kristi Markey – Division 3 Michelle Knight – Division 4 Larry Foy – Division 5 David Potter – Monterey County Board of Supervisors Board members absent: None General Manager present: David A. Berger District Counsel present: David Laredo The assembly recited the Pledge of Allegiance. No comments were directed to the Board during Oral Communications. On a motion by Director Potter and second by Director Foy, the Consent Calendar was adopted on a unanimous vote of 7 – 0. General Manager Berger presented the item. Director Markey requested that the Board conduct another discussion on the yield targets to satisfy existing and future District water needs before the jurisdictions complete their review. She stated that the existing water needs estimate could be expressed as a range based on dry and wet year conditions. Chair Pendergrass agreed to conduct the discussion at the March 19, 2007 meeting or a future meeting. Henrietta Stern, Project Manager, did not give a presentation because information on the progress of water supply project alternatives was presented during the Strategic Plan Update. An outline of progress on water supply project alternatives is on file at the District office and on the District’s web site. A summary of the report presented by Darby Fuerst, Water Resources Division Manager, is on file at the District office and on the District’s website. Mr. Fuerst reported that between October 1, 2006 and January 23, 2007, California American Water (CAW) production from the Carmel River was 2,809 acre-feet, which is 44 acre-feet under the limit established as a result of SWRCB Order 95-10. Between October 6, 2006 and December 31, 2006 CAW production from the Coastal and Laguna Seca Subareas of the Seaside Basin, respectively, were 1,052 acre-feet and 92 acre-feet. District Counsel Laredo stated that he provided status reports on all closed session items listed on the agenda. The Board provided direction to staff and counsel. No reportable action was taken. Judi Lehman reported that she participated as an alternate in the January 17, 2007 Watermaster meeting, and that the main topic of discussion was selecting contractors to complete work mandated by the adjudication decision. She also participated in the January 16, 2007 meeting of the Monterey County Special District’s Association Meeting which included an interesting presentation from the Local Agency Formation Commission. Director Potter offered a motion that was seconded by Director Foy, to adopt the second reading of Ordinance No. 127 as presented. The motion was approved unanimously by roll-call on a vote of 7 – 0. No comments were directed to the Board during the public hearing on this item. Director Potter made a motion to authorize MPWMD to participate in the Division of Ratepayer Advocates-led regional water supply/management alternatives analysis. The motion was seconded by Director Edwards and adopted unanimously on a vote of 7 – 0. The following comments were directed to the Board during the public comment period on this item. (1) Brent Haddad, Associate Professor of Environmental Studies at University of California Santa Cruz, explained that the University’s role in the process is to provide support to the Department of Rate Payers Advocates (DRA) by facilitating meetings and doing background research. The goal of the DRA is that through a reinvigorated public process, to identify a water supply solution that will be beneficial to the ratepayers and to achieve consensus among local agencies and CAW. (2) Robert Greenwood, representing the Carmel Valley Association, stated that based on his review of the list of proposed agenda items for the Division of Ratepayer Advocates 2007 meetings, the process seems to be vague and lack clarity. (3) Paul Bruno, a resident of Monterey, expressed his concern that beginning a new alternatives review through the proposed DRA process, will cause another prolonged delay in selection of a water supply solution for the Monterey Peninsula. (4) Clive Sanders, a resident of Pacific Grove, added to Mr. Bruno’s comments by describing the DRA process as a delaying tactic. He asked why, after ten years of planning and discussion, the water supply development process is being challenged again. (5) Manuel Fierro, a resident of Monterey, stated that seven desalination projects are proposed to be constructed in the Monterey Bay area. According to Mr. Fierro, it is time to begin the DRA process and bring all the project proponents and interested persons together to formulate a decision. There was no discussion of the Informational Items/Staff Reports. The meeting was adjourned at 8:05 PM.

CALL TO ORDER/ROLL CALL PLEDGE OF ALLEGIANCE ORAL COMMUNICATIONS CONSENT CALENDAR 1. Consider Adoption of Minutes of the December 11, 2006 Regular Board Meeting 2. Ratify Board Committee Assignments for Calendar Year 2007 3. Ratify Appointments to Community Advisory Committee 4. Authorize Expenditure of Budgeted Funds to Conduct Water Year 2007 Injection Testing Program at Phase 1 Aquifer Storage and Recovery Facilities 5. Consider Adoption of Resolution 2007-01 Declaring the Official Intent to Reimburse Aquifer Storage and Recovery Expenditures from the Proceeds of Tax Exempt Securities 6. Amendment to Scope of Consultant Contract for Preparation of Integrated Regional Water Management Plan: (A) Consider Entering into an Agreement with Monterey County Water Resources Agency to Reimburse the Costs of Completing an Update of the Canyon Del Rey Drainage Study; (B) Consider Amending Agreement with RMC Water and Environment Consultants for Services to Complete an Update of the Canyon Del Rey Drainage Study 7. Consider Amendment No. 2 to General Manager’s Employment Agreement 8. Consider Approval of General Manager’s Draft PowerPoint Presentation Regarding MPWMD Strategic Water Issues Affecting the Jurisdictions 9. Consider Approval of Annual Update on Investment Policy 10. Consider Adoption of Treasurer’s Report for October 2006 PRESENTATIONS 11. Strategic Plan Update 12. Water Supply Project Alternatives Update GENERAL MANAGER’S REPORT 13. Status Report on California-American Water Compliance with State Water Resources Control Board Order 95-10 and Seaside Groundwater Basin Adjudication Decision ATTORNEY’S REPORT 14. Report on 5:30 PM Closed Session of the Board 3. Conference with Legal Counsel – Existing Litigation (Gov. Code 54956.9 (a)) A. Application of California American Water Company to the Public Utilities Commission Application No. 04-09-019 – Coastal Water Project B. Save Our Carmel River; Patricia Bernardi; The Open Monterey Project v. MPWMD; MPWMD Board; and the City of Seaside; Monterey County Superior Court Case No. M72877 C. State Water Resources Control Board Permit No. 7130B D. State Water Resources Control Board Permit No. 20808 E. CPUC Matter – Rulemaking No. 06-12-016 – General Rate Case Plan for Class A Water Companies F. California-American Water Company v. City of Seaside, et. al., Monterey Superior Court Case No. M66343 4. Conference with Legal Counsel – Anticipated Litigation: Significant exposure to litigation pursuant to subdivision (b) of Section 54956.9 (One Case) DIRECTORS’ REPORTS (INCLUDING AB 1234 REPORTS ON TRIPS, CONFERENCE ATTENDANCE AND MEETINGS) 15. Oral Reports on Activities of County, Cities, Other Agencies/ Committees/ Associations PUBLIC HEARINGS 16. Consider Second Reading and Adoption of Ordinance No. 127 – Expanding the Rebate Program to Include Rebates for High Efficiency Toilets and Zero Water Consumption Urinals ACTION ITEMS 17. Consider Authorizing MPWMD Participation in Division of Ratepayer Advocates Proposed Analysis of Regional Alternative to Coastal Water Project INFORMATIONAL ITEMS/STAFF REPORTS 18. Letters Received 19 Committee Reports 20. Carmel River Fishery Report 21. Water Conservation Program Report 22. Monthly Allocation Report 23. Monthly California American Water Production Report 24. Monthly Water Supply Status Report 25. Quarterly Water Supply Project Status Report 26. Quarterly Irrigation Program and Riparian Projects Report 27. Quarterly Carmel River Erosion Protection and Restoration Projects Report 28. Quarterly Water Use Credit Transfer Status Report ADJOURNMENT

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David A. Berger, Secretary to the Board

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