FINAL MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District September 22, 2008
The meeting was called to order at 7:00 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
The following comments were directed to the Board during the Oral Communications period. (1) Craig Anthony, General Manager/Central Division, California American Water (CAW), expressed disappointment that the District: (A) recommended against rate coverage for the Sand City desalination plant; (B) recommended against rate coverage for the main replacement program just as CAW is working to reduce unaccounted for water loss; (C) supported a main replacement surcharge for Hidden Hills customers to support main replacement; (D) placed a permit moratorium on Ryan Ranch without having the courtesy to discuss the issue with CAW. (2) Manuel Fierro recommended that the District Board support the California Division of Ratepayer Advocates (DRA) recommendations outlined in its August 21, 2008, report on CAW Application No. 08-01-027. Mr. Fierro submitted his comments in writing. They are on file at the District office or can be viewed on the District’s website. (3) George Riley, representing Citizens for Public Water, advised the Board that the organization was engaged in an effort to publicize the DRA recommendations regarding CAW Application No. 08-01-0247.	ORAL COMMUNICATIONS
On a motion by Director Edwards 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 August 18, 2008 Regular Board Meeting
Approved.	2.	Receive Notice of Appointments to Carmel River Advisory Committee
	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.	3.	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 September 17, 2008, CAW production from the Carmel River was 555 acre-feet under the production limit established as a result of State Water Resources Control Board (SWRCB) Order 95-10. During the same time period, production from the Coastal Subareas of the Seaside Basin was 210 acre-feet under the production limit established as a result of the Seaside Groundwater Basin Adjudication. Production from the Laguna Seca Subarea through September 17, 2008 was 181 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 September 17, 2008 was 29 acre-feet under the adjudication limit. Director Edwards suggested that the District publish advertisements in local newspapers thanking the community for its active participation in water conservation efforts that resulted in water production for Water Year 2008 that was below limits established as a result of SWRCB Order 95-10 and the Seaside Basin Adjudication decision.	4.	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 reported that on Sunday, August 24, 2008 a fire occurred in the District office. Andy Bell, the District’s Planning and Engineering Manager, was working that day. He discovered the fire and extinguished it. The Monterey Fire Department also arrived on the scene. A disaster cleanup crew was hired to conduct the cleanup effort for a cost of $16,000. The full cost, minus a $2,000 deductible should be paid by the District’s insurance policy.	5.	Report on Emergency Cleanup and Repair Expenditures Due to Office Fire
	ATTORNEY’S REPORT
District Counsel Laredo reported that the Board reviewed the status of items A through E and G, no action was taken. The Board reviewed the status of item F, and on a vote of 7 – 0, ratified a settlement agreement between DRA, CAW and the District that authorized payment of preconstruction costs incurred in 2007 for the Coastal Water Project in an amount that will be $140,000 less than CAW had originally requested. The Board also reviewed the status of item H, no action was taken.	6.	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)
Director Brower reported that he attended a meeting of the Association of California Water Agencies (ACWA), Region 5, on September 18 and 19, 2008. Several agencies were represented at the meeting whose source of water is the Hetch Hetchy Reservoir. Those agencies are exploring the feasibility of constructing desalination facilities as a cost effective alternative to the Hetch Hetchy source. Director Brower noted that Stanford University had established a program to reduce water reduction throughout the campus. They found that the cost to maintain waterless urinals was prohibitive. As an alternative, they have installed one-pint-flush urinals and dual-flush toilets throughout the campus. Director Brower also reported that Redwood City has adopted an ordinance requiring the installation of dual-plumbing systems in all new commercial and industrial buildings, apartments and condominiums. General Manager Fuerst reported that the District received the most recent update to the Monterey County 2007 General Plan EIR and placed a link to the document on the District’s website. The District will submit comments on the EIR, which are due by October 28, 2008. Mr. Fuerst also reported that District staff attended the first workshop to organize and promote the 20x2020 program implemented by the State of California. The program requires a 20 percent reduction in water use across California by the year 2020. The baseline water use target set for the Central Coast region by 2010 is 145 gallons per-person, per-day. Water use on the Monterey Peninsula is currently 113 gallons per-person, per-day. At the workshop, the District was recognized as a leader in the development and implementation of water conservation programs. The District will participate in all future 20x2020 meetings.	7.	Oral Report on Activities of County, Cities, Other Agencies/Committees/ Associations
	PUBLIC HEARINGS
Vice Chair Markey offered a motion that was seconded by Director Edwards, to adopt Ordinance No. 135 as presented with Option B language shown on pages 4, 12, 15, 16, 19 and 22 of the ordinance. 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. The following comments were directed to the Board during the public hearing on this item. (1) Sheri Damon of Lombardo and Gilles, representing the Pasadera Homeowners Association, suggested that several changes be made to the text of Ordinance No. 135 that would recognize the contract rights between CAW and the Bishop Water Company. Ms. Damon stated that she submitted those suggestions to District Counsel in advance of the meeting with the expectation that they would be incorporated into the second reading version of the ordinance for Board consideration. The changes she suggested are on file at the District office and can be viewed on the District’s website. (2) Lloyd Lowrey of Noland, Hamerly, Etienne and Hoss, representing the Hidden Hills Ratepayer Association, requested that several changes be made to the ordinance which he described as “non-substantive.” A list of the changes he requested is on file at the District office and can also be viewed on the District’s website. (3) Christine Gianascol Kemp of Noland, Hamerly, Etienne and Hoss, representing Curtis Angston, requested that Finding Nos. 14 and 15 be removed from the ordinance, and that the ordinance be further revised to include all changes requested by Lloyd Lowrey. She noted that Mr. Angston was progressing through the Monterey County Planning Department process in order to construct a home in Hidden Hills. If any future action in Hidden Hills were to prohibit construction of the residence, she would come before the Board requesting an exemption to the rules for Mr. Angston’s project. (4) Russ Hatch, former operator of the Hidden Hills and Bishop water companies, expressed support for comments presented by Lloyd Lowrey.	8.	Consider Second Reading and Adoption of Ordinance No. 135 -- Include the Inland Subareas of the Seaside Groundwater Basin into the Monterey Peninsula Water Resources System (MPWRS)
Director Potter offered a motion that was seconded by Director Brower to: (1) adopt the Findings of Approval for Application #20071212CVR-L4 to Amend the CAW Water Distribution System; (2) approve Application #20071212CVR-L4 and authorize issuance of MPWMD Permit #M08-02-L4 with the 27 Conditions of Approval; and (3) direct staff to file a Notice of Determination with the Monterey County Clerk. The motion was adopted unanimously on a vote of 7 – 0. Anthony Lombardo of Lombardo and Gilles addressed the Board on behalf of Carmel Valley Ranch. He expressed support for the Conditions of Approval.	9.	Consider Application to Amend California American Water Distribution System to Annex 12 Residential Lots Associated with Carmel Valley Ranch (APN 416522-020)
On a motion by Director Pendergrass and second by Director Edwards, the October through December 2008 Quarterly Water Supply Strategy and Budget was approved unanimously on a vote of 7 – 0. In response to a question from Director Edwards, Craig Anthony of CAW stated that by the winter of 2009 construction of all related infrastructure should be complete so that the Seaside Basin Aquifer Storage and Recover Project will be operating at full capacity. No other comments were directed to the Board during the public hearing on this item.	10.	Consider Adoption of October through December 2008 Quarterly Water Supply Strategy and Budget
	ACTION ITEMS
Vice Chair Markey offered a motion that was seconded by Director Potter, to refer development of an ordinance regarding dual plumbing systems to the Rules and Regulations Review Committee. The motion was approved unanimously on a vote of 7 – 0. The following comments were directed to the Board during the public comment period on this item. (1) Robert Greenwood, representing the Carmel Valley Association, urged the Board to contact other water districts in California that allow installation of dual plumbing systems and find out what their experience has been. (2) George Riley advised the Board that community groups advocating sustainable use of resources have expressed a keen interest in this issue. (3) Craig Anthony, representing CAW, stated that any ordinance authorizing the installation of dual plumbing systems should include regulations that would allow pay-back of water on site when a non-potable water source fails. He explained that there must be some way to address the failure of a non-potable source other than for the property owner to pay for off-site retrofits.	11.	Consider MPWMD Policy Regarding Installation of Dual Plumbing Systems
Director Potter departed from the meeting following the vote on item 11.
Director Brower offered a motion that was seconded by Director Lehman, to prioritize the exploration of available alternative water sources, and direct staff to develop a plan of action for moving ahead on this priority and present the plan at the October 20, 2008 Board meeting. 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. The following comments were directed to the Board during the public comment period on this item. (1) Craig Anthony, representing CAW, stated that CAW has worked with developers throughout the country to design recycling projects that can reduce water use by 40 to 60 percent. He described a large commercial building in Battery Park, New York, in which waste water is treated by membrane technology and then used for flushing toilets and landscaping at that site. Mr. Anthony noted that the revenue stream for CAW was reduced, but most importantly, efficiency of water use was achieved. (2) Deborah Lindsay, candidate for Pacific Grove City Council, expressed support for the installation of greywater systems. She suggested that the Board form an ad-hoc committee to investigate alternative water sources, and offered to provide the District with names of persons that may be interested in participating on such a committee. (3) George Riley expressed support for the proposal to prioritize the use of alternative water sources. He urged the Board to take leadership on this issue and noted that many persons in the community would be interested in participating in this effort.	12.	Consider Request from Director Doyle to Prioritize the District in Actively and Aggressively Exploring Available Alternative Water Sources: Recycling and Reuse of Greywater; Rainwater Harvesting and Storage; and Stormwater Storage and Reuse
Director Brower offered a motion that was seconded by Director Edwards, that the District Board meet with the MRWPCA Board on October 29, 2008. 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. No comments were directed to the Board during the public comment period on this item.	13.	Consider Scheduling a Joint Meeting of the MPWMD and Monterey Regional Water Pollution Control Agency (MRWPCA) to Discuss Cooperative Efforts Regarding the Groundwater Replenishment Project and Other Potential Water Supply Projects
There was no discussion of the Informational Items/Staff Reports.	INFORMATIONAL ITEMS/STAFF REPORTS
	14.	Letters Received
	15.	Committee Reports
	16.	Strategic Plan Update
	17.	Carmel River Fishery Report for August 2008
	18.	Water Conservation Program Report
	19.	Monthly Allocation Report
	20.	Monthly California American Water Production Report
	21.	Monthly Water Supply Status Report
The meeting was adjourned at approximately 10 PM.	ADJOURNMENT

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Darby Fuerst, Secretary to the Board

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