FINAL  MINUTES

Regular Meeting

Board of Directors

Monterey Peninsula Water Management District

August 18, 2008

 

The meeting was called to order at 7:05 PM in the District Conference Room.

 

CALL TO ORDER/ROLL CALL

 

Directors Present:

Alvin Edwards – Division 1

Judi Lehman, Chair – Division 2

Kristi Markey, Vice Chair -- Division 3

Regina Doyle – Division 4

Bob Brower – Division 5

David Pendergrass – Mayoral Representative

David Potter – Monterey County Board of Supervisors

 

Directors Absent:

All present

 

General Manager present:  Darby Fuerst

 

District Counsel present:  David C. Laredo

 

 

 

 

The assembly recited the Pledge of Allegiance.

 

 

PLEDGE OF ALLEGIANCE

No comments.

 

ORAL COMMUNICATIONS

 

 

 

On a motion by Director Pendergrass and second by Director Markey, the Consent Calendar items were approved unanimously on a vote of 7 – 0.

 

CONSENT CALENDAR

Approved.

 

1.

Consider Adoption of Minutes of the July 21, 2008 Regular Board Meeting

Approved.

 

2.

Consider Expenditure of Budgeted Funds to Remove Instream Concrete Slab and Participate in NOAA Restoration Center and California Conservation Corps Grant Program

Approved.

 

3.

Consider Expenditure of Budgeted Funds to Contract with the California Conservation Corps for Fall 2008 Vegetation Management Activities

Approved.

 

4.

Consider Extension of Cooperative Agreement with the United States Geological Survey (USGS) for Streamflow Gaging in Water Year 2009

 

 

 

Approved.

 

5.

Receive Report on a Strategy for Distribution of Proposition 84 and 1E Bond Funds to the Central Coast Region

Approved.

 

6.

Receive Report on Potential Sources for Federal and/or State Funding for Carmel River Lagoon Adaptive Management Study Plan

Approved.

 

7.

Consider Approval of Fourth Quarter Investment Report

 

 

 

 

 

 

PRESENTATIONS

Henrietta Stern, Project Manager, presented the report.  An outline of the presentation is on file at the District office and can be viewed at the District’s website. 

 

8.

Water Supply Project Alternatives Update

 

 

 

 

 

GENERAL MANAGER’S REPORT

Darby Fuerst, General Manager, presented the report.  An outline of the presentation is on file at the District office and can be viewed at the District’s website.  Mr. Fuerst reported that for the period of October 1, 2007 through August 12, 2008, California American Water (CAW) production from the Carmel River was 410 acre-feet under the production limit established as a result of SWRCB Order 95-10.   During the same time period, production from the Coastal Subareas of the Seaside Basin was 226 acre-feet under the production limit established as a result of the Seaside Groundwater Basin Adjudication.  Production from the Laguna Seca Subarea through July 15, 2008 was 160 acre-feet over the production limit.  The adjudication decision allows CAW to combine its production from all subareas within the Seaside Groundwater Basin.  Consequently, CAW’s production from all subareas within the Seaside Groundwater Basin through August 15, 2008 was 66 acre-feet under the adjudication limit.  

 

9.

Status Report on California American Water Compliance with State Water Resources Control Board Order 95-10 and Seaside Groundwater Basin Adjudication Decision

 

 

 

General Manager Fuerst announced the change to the Board meeting schedule.

 

10.

Announce that September 15, 2008 Board Meeting has been Rescheduled to Monday, September 22, 2008 at 7 PM

 

 

 

 

 

ATTORNEY’S REPORT

District Counsel Laredo reported that he provided a status report on Item 3.C. and presented a partial settlement agreement with California American Water (CAW) that if adopted would be submitted to the Public Utilities Commission (PUC).  On a motion by Edwards and second by Markey, the Board ratified the settlement agreement unanimously on a vote of 7 – 0.  The settlement agreement can be viewed on the District’s website.  It specified that CAW would withdraw support for the Stand-Alone Water Conservation Plan it had developed.  In addition, the District would amend Regulation XV of the Rules and Regulations that pertains to the Expanded Water Conservation and Standby Rationing Plan.  Public Hearing item 13, on the August 18, 2008 agenda complied with that requirement.  Counsel Laredo also reported that he provided a status report to the Board on item 3.H.

 

11.

Report on 5:30 PM Closed Session of the Board

 

 

 

3.

Conference with Legal Counsel – Existing Litigation (Gov. Code 54945.9 (a))

 

 

 

A.

Application of California American Water Company to the Public Utilities Commission Application No. 04-09-019 – Coastal Water Project

 

 

 

B.

Application of California American Water Company to the California Public Utilities Commission -- Application No. 07-02-023 -- Allowance for Funds Used During Construction (AFUDC) for its San Clemente Dam Memorandum Account

 

 

 

C.

Application of California-American Water Company to California Public Utilities Commission for a Special Conservation Program and Design Modifications Rate in its Monterey District (Application No. 07-12-010) – Conservation Program Application

 

 

 

D.

Application of California -American Water Company to California Public Utilities Commission for Authorization to Increase Revenues for Water Service in its Monterey District in the years 2009; 2010; and 2011 (Application No. 08-01-027) – General Rate Case

 

 

 

E.

Application of California-American Water Company to Authorize Support Services for its Monterey District to the California Public Utilities Commission (Application No. 08-01-024 ) – General Office Case

 

 

 

F.

Application of California American Water to the California Public Utilities Commission to Authorize Costs for the Long-Term Water Supply to be Transferred to a Balancing Account and a Requirement for Annual Review of that Account (Application No. 08-04-019).

 

 

 

G.

Application of California-American Water Company to the California Public utilities Commission for an Authorized Cost of Capital for Utility Operations for 2009 (Application No. 08-05-003)

 

 

 

H.

State Water Resources Control Board Draft Cease and Desist Order WR 2008-00XX-DWR

 

 

 

I.

MPWMD v. Nick Marotta, Jr., Gerda Marotta, and Does 1-100 -- Monterey County Superior Court Case No. M83498

 

 

 

J.

MPWMD v. Roy Woods, Woods 1995 Trust, and Does 1-100 -- Monterey County Superior Court Case No. M83499

 

 

 

 

 

 

 

 

4.

Conference with Legal Counsel – Threatened Litigation (Gov. Code 54956.9(b))

Sierra Club v California American Water (16 U.S.C §1538)

 

 

 

 

 

DIRECTORS’ REPORTS (INCLUDING AB 1234 REPORTS ON TRIPS, CONFERENCE ATTENDANCE AND MEETINGS)

Vice Chair Markey reported that she and Chair Lehman met with Commissioner Bohn of the PUC and members of the Division of Ratepayer Advocates to discuss applications pending before the PUC.  The purpose of the meeting was to impress upon the PUC that the community needed a timely solution to the water supply situation.  Commissioner Bohn indicated that the EIR on CAW’s Coastal Water Project should be completed by the end of 2008.   Director Doyle reported that she met with the Pacific Grove Property Owners on Water Equity and Conservation.  She plans to monitor the progress of the group’s activities related to the City of Pacific Grove’s water waiting list.  Chair Lehman announced that the August 6, 2008 Watermaster meeting was cancelled.  She did attend the August 6, 2008 REPOG meeting and the August 14, 2008 meeting with Laguna Seca Subarea property owners regarding proposed Ordinance No. 135.

 

12.

Oral Report on Activities of County, Cities, Other Agencies/Committees/ Associations

 

 

 

 

 

 

PUBLIC HEARINGS

Motion 1 – Director Edwards offered a motion that was seconded by Director Markey, to adopt first reading of the ordinance.  Within 30 days, the Board should consider second reading and adoption of a modified ordinance that would include the following.  (1) Add new text to Section Three. A, “Hidden Hills shall mean the California American Waters (Cal-Am) Subunit as described in the purchase agreement between Carmel Valley Mutual Water Company and Cal-Am recorded July 8, 1994, Document # 49389 Reel 3125 Page 696.  MPWMD recognizes the validity of this agreement and this Ordinance does not modify that contract  (2) The first sentence of Sections 5 C and 6 C shall be amended by adding the words “and Hidden Hills” after the words “Satellite Systems.”(3) The reference to “urgency effect” shall be deleted from Section Twelve, and the effective date of the ordinance shall also be modified.  The motion was adopted on a roll-call vote of 5 – 2.  Directors Doyle, Edwards, Lehman, Markey and Pendergrass voted in favor of the motion.  Directors Brower and Potter were opposed.

 

Substitute Motion – Director Potter proposed a motion that was seconded by Director Brower, to submit an amended ordinance for first reading at the September 22, 2008 Board meeting.  The following changes should be incorporated into the ordinance. (1) Add new text to Section Three. A, “Hidden Hills shall mean the California American Waters (Cal-Am) Subunit as described in the purchase agreement between Carmel Valley Mutual Water Company and Cal-Am recorded July 8, 1994, Document # 49389 Reel 3125 Page 696.  MPWMD recognizes the validity of this agreement and this Ordinance does not modify that contract.  (2) The first sentence of Sections 5 C and 6 C shall be amended by adding the words “and Hidden Hills” after the words “Satellite Systems.”(3) The reference to “urgency effect” shall be deleted from Section Twelve, and the effective date of the ordinance shall also be modified. (4) The term “superior, unimpaired water rights” should be retained in the ordinance and the following sentence should be added to the description of the “trigger” for water rationing under stages 4 through 7 in Rule 164.B.1, Rule 165. B.1, Rule 166.B.1, and Rule 167.B.1, “Alternative Production Allocations resulting from the Amended Decision and Final Judgment in California American Water Company v. City of Seaside, et al, Monterey County Superior Court Case No. M66343, are superior, unimpaired water rights.”  The motion failed on a vote of 2 – 5.  Directors Potter and Brower voted in favor of the motion.  Directors Doyle, Edwards, Lehman, Markey and Pendergrass were opposed.

 

Public Comment Received:  (1) Craig Anthony, General Manager of CAW, expressed support for adoption of Ordinance No. 135.  He stated that water conservation measures should apply to all CAW customers.  He noted that in 2008, 6.9 acre-feet of water was transferred from the Hidden Hills system to the Toro system.  CAW will pay the Watermaster a replenishment fee for the water that was sent to the Toro system.   (2) Lloyd Lowrey of Noland Hamerly Etienne and Hoss, addressed the Board on behalf of the Hidden Hills Subunit Ratepayers Association.  A summary of his comments is on file at the District office and can be viewed on the District’s website.  He requested that the ordinance be modified to include a definition of the Hidden Hills system.  He stated that the Association would accept Ordinance No. 135 if it was modified as suggested.  (3) Robert Greenwood, addressed the Board on behalf of the Carmel Valley Association.   He asked if the entire Seaside Basin, except for the Inland Subareas, was already within the Monterey Peninsula Water Resource System (MPWRS).   General Manager Fuerst explained that the Northern and Southern Coastal Subareas of the Seaside Basin are already within the MPWRS. (4) Sheri Damon of Lombardo and Gilles, spoke on behalf of the Pasadera Homeowners Association.  She requested that the ordinance be revised to recognize the authority of the Seaside Basin Watermaster, and specify that the District will not interfere with contractual rights between CAW and its satellite water systems.  (5) Christine Kemp of Noland Hamerly Etienne and Hoss, representing Curtis Angton, requested that Ordinance No. 135 allow processing of applications for projects that have been deemed complete by the permitting jurisdiction, if the water distribution system is within its production limit.  (6) Anthony Lombardo of Lombardo and Gilles, addressed the Board on behalf of Eric Robinson of Kronick Moskovitz Tiedemann & Girard; and also the Villas at Laguna Seca Project; and Bishop, McIntosh & McIntosh owner of Laguna Seca Golf Club.  Mr. Lombardo referenced a letter dated August 15, 2008 submitted by Eric Robinson (on file at the District office.)  Mr. Lombardo requested that the ordinance be amended to state that “superior, unimpaired water rights” include, but are not limited to Alternative Production Allocations recognized in the Seaside Basin Adjudication decision.  (7) Rebecca Tagg, a resident of Hidden Hills, expressed opposition to Ordinance No. 135 because it would penalize Hidden Hills residents.  (8) Russ Hatch, representing the Hidden Hills Ratepayers Association, stated that the Board should defer adoption of Ordinance No. 135 until questions posed by the public have been answered by the District.  (9) Geoffrey de Sibert, President of the York Hills Homeowners Association, said that it would be inappropriate for the Board to adopt Ordinance No. 135 with urgent effect.  According to Mr. de Sibert, this is not an urgency issue and the District should respond to property owners’ questions before further action is taken by the Board.  (10) Ken Hollbrook, President of the Pasadera Homeowners Association, stated that the District has not yet responded in writing to questions raised by property owners about Ordinance No. 135.  Without complete information and adequate advance notice of the Board’s pending action on Ordinance Nos. 135 and 136, it is difficult for his association to comment or make a recommendation.  He chided the Board for not sending notice about public hearings on the proposed ordinance to each property owner that would be affected by adoption of the ordinance.  (11) Paul Bruno encouraged the Board to diligently pursue a water supply solution.  (12) James Hanlon stated that water use in the Laguna Seca Subarea could have exceeded the production limit because CAW transferred water from that area to other distribution systems.  He asserted that the overage may not be due to residential water use in the Laguna Seca Subarea.

 

13.

Consider Adoption of Ordinance No. 135 with Urgent Effect – Include the Inland Subareas of the Seaside Basin into the Monterey Peninsula Water Resource System

 

 

 

 

At 9 PM the Board recessed and then reconvened at 9:05 PM.

 

 

 

 

 

Director Edwards made a motion that was seconded by Director Markey, to approve the staff recommendation to adopt the Negative Declaration and Ordinance No. 134.  The motion was approved on a unanimous roll-call vote of 7 – 0.

 

Public comment received.  (1) Anthony Lombardo of Lombardo and Gilles, representing Eric Robinson, requested that Ordinance No. 134 be amended to specify that the term “superior, unimpaired water rights” should be retained in the ordinance, and that an additional sentence be added as outlined in his letter to the Board dated August 15, 2008.  (2) Robert Greenwood, representing the Carmel Valley Association, asked for clarification of Finding 25 of Ordinance No. 134 which states the Board can rescind Stage 5 water rationing and above by resolution.   (3) George Riley, representing Citizens for Public Water, suggested that if water rates were increased during a rationing period, the increase should be in place for a minimum of six months.  (4) Craig Anthony, representing CAW, expressed support for adoption of Ordinance No. 134.  (5) Todd Evers, a member of the Pasadera Homeowners Association Board of Directors, asked if a process was in place to provide notification about the ordinance to property owners that would be affected by its adoption.   

 

14.

Consider Second Reading and Adoption of Revised Ordinance No. 134 – An Ordinance of the Board of Directors of the Monterey Peninsula Water Management District Amending Regulation XV, Expanded Water Conservation and Standby Rationing Plan

A.       Consider Adoption of Negative Declaration in Compliance with California Environmental Quality Act (CEQA)

B.       Consider Adoption of Ordinance No. 134

 

 

 

 

 

Director Markey offered a motion that was seconded by Director Edwards, to adopt Ordinance No. 136 with the following amendments and clarifications.  (1) Rule 40.B.1, second sentence, add the word “physical” in front of the words “water supplies.”  (2) Rule 40.B.2, add the word “physical” in front of the words “water supplies.”  (3) Rule 40.B.3. line 1, add the word “physical” in front of the words “water supplies” (4) Rule 40.B.3, line 7, add the word “physical” in front of the words “water supplies.”  (5) Rule 40. B. 3, line 8, add the word “not” in front of the words “sufficient to meet.”  (6) Page 5 of the ordinance, reference to Section C should be changed to Section “D.” (7) Rule 40.B.4. should include Option A text shown on page 4 of the ordinance, “Where a Water Distribution System has reached or exceeded its System Capacity or Expansion Capacity limit, as modified, the General Manager shall not receive or process any application for a permit to expand or extend that system until the further amendment, based upon credible expert analysis, is made to the System Capacity or Expansion Capacity, or both, for that Water Distribution System.”  (8) Rule 40.D.4 shall be amended to include Option B text shown on page 5 of the ordinance, “Suspend receipt of Expansion or Extension applications for any system that exceeded its Pro Rata Expansion Capacity within the preceding twelve (12) months.” The motion was adopted unanimously on a roll-call vote of 7 – 0.  

 

Public comment received.  (1) Craig Anthony, representing CAW, asked where he could find a list of the number of water distribution systems within the District. (2) Anthony Lombardo of Lombardo and Gilles, representing Dennis Chambers, asked how adoption of Ordinance No. 136 would affect undeveloped lots in the Ryan Ranch Water Distribution System.  If water use in that system were considered separate from the larger CAW system, would a moratorium on processing of water permits be implemented in Ryan Ranch?  (3) Sheri Damon of Lombardo and Gilles, representing the Pasadera Homeowners Association, requested that the Board defer consideration of this ordinance until after the Policy Advisory Committee has met to develop a recommendation.   (4) Christine Kemp of Noland Hamerly Etienne and Hoss, representing Curtis Angton, requested that the Board incorporate Rule 40.B.4 Option B into the ordinance.  That would allow processing of water permit applications received prior to a determination that the System or Expansion Capacity has been exceeded.  (5) Lloyd Lowrey of Noland Hamerly Etienne and Hoss, representing John Anderson.  He requested that the Ordinance be modified as follows.  (A) Rule 40.B.1, line eight, add the word “physically” in front of the word “sufficient.”  (B)  Rule 40.B.2., line 2, add the word “physically” in front of the word “sufficient.”  (C) Rule 40.B.3.,  line 7, add the word “physically” in front of the word “available.” (D) Add the words “of physical capacity” at the end of Rule 40.B.3.  (E) Rule 40.B.4, Option A, second line, add the word “physically” in front of the words “reached or exceeded.”  (F) Rule 40.B.4, Option B, second line, add the word “physically” in front of the words “reached or exceeded.” (G) Rule 40.D, first line, add the word “physically” in front of the word “exceeds.” (6) Geoffrey de Sibert, President of the York Hills Homeowners Association, expressed agreement with comments made by Lloyd Lowrey.  (7) Ernest Lostrom, property owner in Ryan Ranch, stated that it would be unfair to prohibit persons that own property in Ryan Ranch from developing their lots.  (8) Henry Ruhnke, of Wald Ruhnke & Dost Architects LLP, spoke on behalf of Sam Downing of Salinas Valley Memorial Healthcare System.  He expressed opposition to imposition of a water permit moratorium in Ryan Ranch.  (9) George Riley stated that he appreciated the Board’s effort to make a system-wide decision.  He noted that the proposed rules will result in a more fair distribution of the water resource.  (10) Roger Manley, a resident of Pasadera,  urged the Board to provide leadership on promoting water conservation. 

 

15.

Consider Second Reading and Adoption of Ordinance No. 136 --  An Ordinance to Establish a Process to Authorize Adjustments to Water Distribution System Production and Connection Limits

 

 

 

 

 

The meeting recessed at 10:05 and reconvened at 10:10 PM.  Director Potter departed from the meeting prior to consideration of Action Item 16.

 

 

 

 

 

 

 

ACTION ITEMS

Director Brower offered a motion that was seconded by Director Edwards, to amend the contract with Camp Dresser & McKee Inc. and Jones & Stokes Associates and authorize preparation of the next phase of studies (Complete Policy Review for Projects) for a not-to-exceed cost of $19,000.  The motion was approved on a unanimous vote of 6 - 0.  Directors Brower, Doyle, Edwards, Lehman, Markey, and Pendergrass voted in favor of the motion.  Director Potter was absent for the vote. 

 

During the public comment period on this item, George Riley asked if the Board should consider pursuit of a smaller project, or if the 95-10 Desalination Project should be developed in place of the desalination project proposed by the City of Sand City. 

 

16.

Receive Constraints Analysis Regarding MPWMD 95-10 Desalination Project

 

 

 

 

 

On a motion by Director Brower and second by Director Markey, the Board voted to establish a $2.5 million line of credit with Bank of America at a variable rate based on the Wall Street Prime Rate less 0.75% and with out-of-pocket costs not to exceed $5,000.   The motion was approved unanimously on a vote of 6 – 0.  Directors Brower, Doyle, Edwards, Lehman, Markey and Pendergrass voted in favor of the motion.  Director Potter was absent for the vote.

 

No comments were directed to the Board during the public comment period on this item.

 

17.

Consider Approval to Secure a $2.5 Million Line of Credit to Fund Development of Water Supply Projects

There was no discussion of the Informational Items/Staff Reports.

 

INFORMATIONAL ITEMS/STAFF REPORTS

 

 

18.

Letters Received

 

 

19.

Committee Reports

 

 

20.

Strategic Plan Update

 

 

21.

Carmel River Fishery Report

 

 

22.

Water Conservation Program Report

 

 

23.

Monthly Allocation Report

 

 

24.

Monthly California American Water Production Report

 

 

25.

Monthly Water Supply Status Report

 

 

26.

Semi-Annual Ground Water Quality Monitoring Report

 

 

 

The meeting was adjourned at 11 PM.

 

ADJOURNMENT

 

 

                                                                                    ___________________________________

                                                                                    Darby Fuerst, Secretary to the Board

 

 

 

 

 

 

 

 

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