EXHIBIT 20-A

ITEM: VII ACTION ITEMS

MEETING DATE: FEBRUARY 27, 1997

A. CONSIDER APPROVAL OF A POLICY STATEMENT PROHIBITING THE FUTURE ALLOCATION OF WATER PREVIOUSLY SET ASIDE FOR DROUGHT RESERVE FROM THE PARALTA WELL AND RECOMMENDING THAT A DISTRICT RESERVE FOR REGIONAL PROJECTS PROVIDING COMMUNITY BENEFIT BE ESTABLISHED

SUMMARY: At its January 23, 1997 meeting, the District Board directed staff to develop a policy statement that would prevent future allocation of the water previously set aside for drought protection from the estimated yield of California-American Water Company’s (Cal-Am’s) Paralta well in the Seaside Basin. This statement is included as Exhibit A-1. The Board also directed staff to provide criteria for a community benefit allocation. “Regional Projects” or projects that would be eligible to receive water from a community benefit allocation are defined by District Rule 11 as “non-profit endeavors which provide for the health, safety and/or welfare of the community, and provide regional non-denominational benefit to the residents of the greater Monterey Peninsula area.” Examples of projects that received water from the District’s previous reserve for regional projects are listed in Exhibit A-2. Last, the Board directed staff to develop a recommendation to establish a District reserve of 50 acre-feet for regional projects. The Board specified that the water for the reserve should come from the savings that have accrued as a result of the District’s water conservation program. If the water is not used by regional projects, it should be returned to the conservation savings.

RECOMMENDATION: Following staff’s introduction, the Board should receive public comments and:

(1) consider approval of the proposed policy statement prohibiting the future allocation of water previously set aside for drought protection from the Paralta well yield,

(2) review the current definition of “regional projects” and direct staff regarding any modifications to the criteria for distributing water from the proposed community benefit allocation, and

(3) direct staff to develop a conceptual ordinance establishing a District reserve for regional projects that provide community benefit for consideration by the Board in April 1997. Water for the reserve will come from the savings that have accrued as a result of the District’s water conservation program. Fifty (50) acre-feet will be placed in the reserve and, if not used by regional projects, returned to the conservation savings.

It should be noted that implementation of an ordinance establishing a District reserve for regional projects from conservation savings could be affected by the vote on Measure A. If Measure A is approved by the voters within the District on March 4, 1997, no unallocated water could be allocated until the criteria to end the water shortage declared by Measure A are met. In addition, before any allocation could be established, a supplement to the District’s Water Allocation Program EIR would need to be prepared and certified by the District Board.

BACKGROUND: In January 1997, the Board considered whether or not a policy should be developed that would prevent future allocations of water previously set aside for drought protection or water conservation. The policy would address the portion of the annual yield from the Paralta well in the Seaside Basin that was set aside for drought reserve in 1993, the water conservation savings that have accrued since the District’s water conservation program began in 1987, and the District’s share of the water made available by operation of the CAWD/PBCSD Reclamation Project. Presently, no formal policy exists that states the Board’s intent to retain or release water from these sources for the benefit of the community.

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