EXHIBIT 1-A

DRAFT MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District March 15, 2004

The meeting was called to order at 7 PM in the Monterey City Council Chambers. Directors present: Alvin Edwards, Chair – Division 1 Larry Foy, Vice Chair – Division 5 Judi Lehman – Division 2 Kristi Markey – Division 3 Michelle Knight – Division 4 David Pendergrass – Mayoral Representative David Potter – Monterey County Board of Supervisors Directors absent: None General Manager present: Fran Farina District Counsel present: David C. Laredo The assembly recited the Pledge of Allegiance. The following comments were directed to the Board during Oral Communications. (1) David Dilworth, representing Helping Our Peninsula’s Environment (HOPE) alleged that the total acre-feet of water produced by the California-American Water Company (Cal-Am) in 2003, plus the water represented by outstanding water permits and water credits, and water left in the jurisdictions’ allocation, may exceed the annual production limit set by State Water Resources Control Board (SWRCB) Order 95-10. He requested that the District provide a list that quantifies the amount of water represented by outstanding water credits and water permits for projects that have not yet been developed, and the amount of water produced in 2003. (2) Ron Chesshire reminded the Board that its main purpose is to augment the water supply. He urged the Board to work with the Public Utilities Commission (PUC) and local communities on development of a water supply solution. (3) John Fischer, resident of Pacific Grove, urged the Board to be aware of plans Cal-Am is making for development of desalination projects in other parts of California. (4) Michael Waxer noted that the list of Carmel Valley private pumpers that District staff provided to the Carmel River Advisory Committee included many clients of the Carmel Development Company including Earthbound Farms, a company that produces organic produce, and other private water distribution systems approved by the Monterey County Board of Supervisors. (5) Patricia Bernardi, a resident of Carmel Valley, asked that Director Potter or another Director provide an explanation for item S-24 on the March 16, 2004 Monterey County Board of Supervisors agenda titled Approve Letter of Intent between the Monterey County Water Resources Agency and California-American Water Company to Form a Partnership to Develop the Monterey County Water Supply Project. (6) Lou Haddad expressed objections to the approval of expenditures outlined in Consent Calendar item 2, Consider Purchase of a Multi-Function Copier for Water Demand Division; item 3, Authorize Funds for Technical Assistance for Seaside Basin Groundwater Management Plan; and item 4, Consider Approval of Software and Hardware Purchases for Information Technology. He suggested that a financial oversight committee should be established to prevent “runaway expenditures.” (7) Sheryl McKenzie, Government Affairs Director for the Monterey County Association of Realtors, explained that the staff report for item S-24 on the March 16, 2004 Monterey County Board of Supervisors agenda states that a determination of regional water demand would be developed with input from the Monterey County Water Resources Agency, Monterey Peninsula Water Management District, Fort Ord Reuse Authority, Castroville Water District and communities of northern Monterey County and other water utilities. Ms. McKenzie objected to the March 15, 2004 letter from Chair Edwards to Lou Calcagno requesting continuation of item S-24. On a motion by Director Potter and second by Director Knight, Consent Calendar items 2, 3 and 4 were pulled for separate consideration. The remaining Consent Calendar items were adopted unanimously on a vote of 7 – 0. Approved. Director Potter offered a motion to adopt the staff recommendation and authorize an expenditure of $7,948.80 for the purchase of a photocopier and service contract. Director Potter offered an amended motion to continue this item for a maximum of 30 days, and bring back to the Board information on the cost of a lease option. Director Knight seconded the motion. It was adopted on a vote of 7 – 0. During the public comment period on this item David Dilworth expressed opposition to the copier purchase due to the high cost of the equipment. Director Foy offered a motion that was seconded by Director Lehman to adopt the staff recommendation and authorize funds not to exceed $22,000 to provide technical assistance for development of the Seaside Basin Groundwater Management Plan. The motion was approved unanimously on a vote of 7 – 0. During the public comment period on this item, Patricia Bernardi stated that the District’s involvement in the Seaside Basin adjudication lawsuit should not be the factor used to delay this project. Director Foy made a motion that was seconded by Director Potter to approve an expenditure of $45,575 for the purchase of new, upgraded and replacement hardware and software for use at the District for various information technology functions. The motion was 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) David Dilworth suggested that the item be deferred until more detailed information was provided to the Board on the purchase of Adobe Acrobat and the associated licenses for multiple users. (2) John Fischer, a resident of Pacific Grove, asked if there were plans to purchase software that could be used by District staff to conduct analyses presently completed by consultants. (3) Lou Haddad questioned the necessity of the proposed purchases. Approved. Approved. Approved. Approved. Approved. Approved. Approved. General Manager Farina reported that operation of the Aquifer Storage and Recovery Project (ASR) was halted on March 12, 2004 at the request of Cal-Am due to failure of the pump at Cal-Am’s Pierce well. The well should be repaired by March 17, 2004, which will allow the District to restart operation of the ASR project by March 19, 2004. District Counsel Laredo reported that no action was taken on item 1.A related to the General Manager position. Regarding agenda item 2A, Labor Negotiator Cynthia Schmidlin provided a report to the Board on negotiations with the employee association Laborer’s International Union of North America. No action was taken. Regarding items 3A through 3D and item 4, District Counsel provided a report to the Board but no reportable action was taken. Chair Edwards reported that he had directed staff to investigate the cost of hiring a consultant to represent the District in the California State Legislature concerning SB1529. In addition, staff was directed to review the November 2, 2004 election schedule in preparation for placing a local measure on the ballot regarding governance of the District. He stated that if legislation was in process that would modify the District’s governance structure, local voters should have the opportunity to weigh-in on the proposal. He noted that these items would be placed on future Board meeting agendas for consideration by the Directors. Chair Edwards also announced that he faxed a letter dated March 15, 2004 to Lou Calcagno, Chair of the Monterey County Board of Supervisors, requesting that agenda item S-24 (Approve Letter of Intent between the Monterey County Water Resources Agency and California-American Water Company to Form a Partnership to Develop the Monterey County Water Supply Project) be deferred from the March 16, 2004 agenda until sometime after March 31, 2004. He apologized to the Board for any irresponsible action on his part, but reiterated that the District and the County should work together on development of a water supply solution. Director Lehman requested that District staff prepare a list of all permitted, but not used or not metered water uses. This list should be distributed to the Water Demand and Administrative Committees. Ms. Lehman expressed a concern about the cumulative effects that could result from increased water production when the pending water demand comes on line. She referenced a letter dated February 24, 2004 from Peter Coniglio regarding 12 unused water permits (on file at the District office). Director Potter stated that the full Board should have had the opportunity to consider authorizing Chair Edwards to transmit the March 15, 2004 letter to Lou Calcagno. He suggested that the letter should be rewritten to reflect the concerns of the Board. In regards to agenda item S-24, Director Potter expressed his concern that Cal-Am does not seem to be motivated to solve the local water supply problem. He noted that Cal-Am has not yet submitted an application for a water supply project to any local or State permitting agency. Therefore, the County of Monterey intends to begin the public dialogue and discourse on how to address the water supply issues. Director Markey thanked Chair Edwards for transmitting the March 15, 2004 letter to the Monterey County Board of Supervisors. She expressed concern that the Board of Supervisors planned to take action on agenda item S-24 without providing advance notice to the District. Director Pendergrass suggested that the letter could have been considered by the Board as an urgency issue. He would have preferred to be briefed on the issue before the letter was transmitted to the Board of Supervisors. On a motion by Director Pendergrass and second by Director Foy, the April through June 2004 Quarterly Water Supply Strategy and Budget was approved unanimously as presented in the staff note on a vote of 7 – 0. The following comments were directed to the Board during the public hearing on this item. (1) David Dilworth explained that flushing flows in the Carmel River that occur after heavy rains are beneficial to California red-legged frogs. He asked for an explanation as to why the California Department of Health Services requested that Cal-Am’s San Carlos Well be taken off-line due to water treatment issues. (2) Patricia Bernardi asked if the Russell wells will be used in order to meet the proposed reductions in pumping in June from the upper Carmel Rivera aquifer. Director Foy offered a motion that was seconded by Director Knight to approve a water use credit of 9.063 acre-feet per-acre (AFA) for the retrofit of the Presidio of Monterey’s urinals to waterless urinals and 7.998 AFA for the retrofit of the food service facilities with SOMAT disposal systems. The motion was adopted on a vote of 5 – 2. Directors Edwards, Foy, Knight, Pendergrass and Potter voted in favor of the motion. Directors Lehman and Markey were opposed. Director Markey proposed an amended motion to approve a water use credit of 7.998 AFA for the SOMAT system and reserve determination on the appropriate water credit for the waterless urinals until water savings can be estimated based on water records obtained from water meters in buildings where the waterless urinals have been installed. The motion was seconded by Director Lehman. The motion failed on a vote of 2 – 5. Directors Lehman and Markey voted in favor of the motion. Directors Edwards, Foy, Knight, Pendergrass and Potter were opposed. The following comments were directed to the Board during the public hearing on this item. (1) Lou Haddad expressed support for the U.S. Army’s request that water use credits be granted for retrofits accomplished at the Presidio of Monterey. (2) David Dilworth, representing HOPE, stated that the District should not measure water use in fixture units. He asked several questions about the proposal to issue water use credit to the Presidio. (3) John Fischer, a resident of Pacific Grove, congratulated the Presidio of Monterey on its conservation efforts. He noted that utilization of actual historic water use is the best way to determine savings achieved through retrofitting. The meeting was adjourned at 10:20 PM and reconvened at 10:30 PM. Director Foy offered a motion to approve the first reading of Ordinance No. 113 with the correction suggested by staff to amend Finding 4, line 1, by adding the word “compensation” after the words “Board Member.” The motion was seconded by Director Edwards. Director Markey offered an amendment to limit compensation to no more than five (5) days in any calendar month. Directors Foy and Edwards concurred with the amendment. The amended motion was adopted on a vote of 5 – 2. Directors Edwards, Foy, Knight, Markey and Pendergrass voted in favor of the motion. Directors Lehman and Potter were opposed to the motion. The following comments were directed to the Board during the public hearing on this item. (1) David Dilworth recommended against adoption of Ordinance No. 113. (2) Tex Irwin spoke in support of Ordinance No. 113, and urged the Board to develop a water supply. (3) Robert Greenwood, representing the Carmel Valley Association, suggested that the Board compensation be limited to $400 per month for attendance at two Board meetings and two committee meetings. (4) John Fischer expressed support for adoption of Ordinance No. 113. (5) Patricia Bernardi suggested that the rate of payment for each meeting should remain unchanged at $30 per meeting, or as an alternative, compensation could be set at $100 for each Board meeting along with a lower rate established for attendance at committee meetings. (6) Steve Leonard, a resident of Pacific Grove, spoke in support of Ordinance No. 113. Director Potter made a motion to adopt the staff recommendation, including approval of the variance request; issuance of a Confirmation of Exemption letter; and issuance of a refund of a portion of the $2,450 fee paid by the applicant based on the amount of staff time spent on processing the application. The motion was seconded by Director Knight and approved unanimously on a vote of 7 – 0. During the public hearing on this item, David Dilworth asked why a water distribution system permit was needed for a well that would serve one lot. On a motion by Director Pendergrass and second by Director Foy, the Board unanimously approved the staff recommendation to direct staff to finalize the text and proceed with production and distribution of the final report. The motion was approved on a vote of 7 – 0. Rick Dickhaut, Chief Financial Officer, noted that page 201 of the Board packet states that Cal-Am produced 11,196 AF of water from the Carmel River Basin in Water Year 2003. That sentence should be corrected to state that Cal-Am produced 11,131 AF of water from the Carmel River Basin in Water Year 2003, 154 AF below the production limit of 11,285 AF. During the public hearing on this item, David Dilworth disagreed with a statement on page 204 of the Board packet which states that “the District strictly adheres to federal and state regulations to ensure the protection of threatened species such as the steelhead and California red-legged frogs.” According to Mr. Dilworth, the Carmel River steelhead and the California red-legged frog are on the endangered species list because the District has approved 8,000 new water connections since 1977. He proposed that the sentence be replaced with language that points out the District’s role in causing over-pumping of the Carmel River in spite of heroic conservation efforts made by the public. Director Potter left the meeting at 11:05 PM prior to consideration of this item. Director Markey proposed a motion to adopt the resolution. Director Knight seconded the motion. It was adopted on a vote of 4-1-1. Directors Edwards, Knight, Lehman and Markey voted in support of the motion. Director Foy was opposed. Director Pendergrass abstained from voting on the motion due to a conflict of interest. Director Potter was absent from the discussion and vote on this item. During the public comment period on this item, the following comments were directed to the Board. (1) Robert Greenwood, Carmel Valley Association, expressed support for the resolution. (2) Patricia Bernardi, a resident of Carmel Valley, spoke in support of the resolution. She expressed a preference for the term “interested parties” and said that she becomes a stakeholder whenever water is taken from the Carmel River and transferred into the Seaside basin. (3) Tex Irwin spoke in support of the resolution. (4) David Dilworth, representing HOPE, expressed support for the resolution. This item was considered at 8:15 PM. All Directors were present for this item. Director Potter proposed a motion to return this issue to the Policy and Technical Advisory committees and request that they make a recommendation to the Board on the questions raised in the staff report: (a) how much water, if any, should be considered for allocation; (b) what formula should be used to determine each jurisdiction’s share; (c) should an MPWMD Community Reserve be established; and (d) should the U.S. military be added as new jurisdiction. Director Knight seconded the motion. It was 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) Ron Chesshire, a resident of Monterey, suggested that the District seek an opinion from the SWRCB as to whether or not the District should move ahead on making additional water available for allocation to the jurisdictions. (2) Robert Greenwood, representing the Carmel Valley Association, urged the Board to prepare an update to the Water Allocation Program EIR before any decisions are made regarding development of new water sources. (3) Roy Thomas, President of the Carmel River Steelhead Association, encouraged the District to enhance the Carmel River Lagoon habitat during low flow periods by supplementing the lagoon with reclaimed wastewater. According to Mr. Thomas, this protective measure would also guard against the advancement of seawater intrusion into groundwater resources. (4) Patricia Bernardi, a resident of Carmel Valley, stated that the ASR project should be part of a long-term integrated plan rather than a “quick fix.” (5) David Dilworth noted that the Pebble Beach Company was reimbursed for its investment in development of the Carmel Area Wastewater District/Pebble Beach Community Services District Wastewater Reclamation Project. Mr. Dilworth asked if Cal-Am should be allowed to profit from the delivery of water it produces in excess of its permitted water right. At the direction of Chair Edwards, this item was referred to the Water Demand Committee to review the preliminary draft version of Ordinance No. 117 and consider incorporating safeguards from Ordinance No. 101. The amended ordinance would be submitted to the Board at the April 19 or May 17, 2004 meeting. Chair Edwards deferred this item to the April 19, 2004 Board meeting. The Board did not discuss these items. The meeting was adjourned at 11:25 PM.

CALL TO ORDER/ROLL CALL PLEDGE OF ALLEGIANCE ORAL COMMUNICATIONS ORAL COMMUNICATIONS CONSENT CALENDAR 1. Consider Adoption of Minutes of the Board Workshop of February 2, 2004 and the Regular Board Meeting of February 19, 2004 2. Consider Purchase of a Multi-Function Copier for Water Demand Division CONSENT CALENDAR 3. Authorize Funds for Technical Assistance for Seaside Basin Groundwater Management Plan 4. Consider Approval of Software and Hardware Purchases for Information Technology 5. Approve Expenditure of Mitigation Funds to Retrofit Pool No. 2 at the Sleepy Hollow Steelhead Rearing Facility 6. Consider Approval of Revised Indemnification Provisions in Access Agreements for District Projects along the Carmel River 7. Consider Approval of Second Quarter Investment Report 8. Receive District-Wide Annual Water Distribution System Production Summary for Water Year 2003 9. Receive District-Wide Annual Water Production Summary Report for Water Year 2003 CONSENT CALENDAR 10. Receive 2002-2003 Annual Mitigation Program Report 11. Consider Adoption of Treasurer’s Report for January 2004 GENERAL MANAGER’S REPORT ATTORNEY’S REPORT 12. Report on Closed Session DIRECTORS’ REPORTS 13. Board Comments and Referrals DIRECTORS’ REPORTS PUBLIC HEARINGS 14. Consider Adoption of April through June 2004 Quarterly Water Supply Strategy and Budget 15. Consider Water Use Credit for Installation of SOMAT Disposal Systems and Waterless Urinals at the Presidio of Monterey PUBLIC HEARINGS 15. Consider Water Use Credit for Installation of SOMAT Disposal Systems and Waterless Urinals at the Presidio of Monterey 16. Consider First Reading of Ordinance No. 113 – Increase Board Compensation PUBLIC HEARINGS 17. Consider Variance from MPWMD Rule 20-C-3 by Kingmen, Inc. (Fred King): APN 103-121-002 18. Receive Public Comment on Draft 2003 MPWMD Annual Report ACTION ITEMS 19. Consider Adoption of a Resolution Declaring the District’s Intent to Prepare a Groundwater Management Plan for the Seaside Groundwater Basin and Adopting a Statement of Public Participation ACTION ITEMS 19. Consider Adoption of a Resolution Declaring the District’s Intent to Prepare a Groundwater Management Plan for the Seaside Groundwater Basin and Adopting a Statement of Public Participation 20. Discussion of Near Term Water Supply Concepts, Including Reclamation 21. Discuss Water Credit Transfer Program and Provide Direction to Staff ACTION ITEMS 22. Status Report on Preparation of a Study to Update Commercial Water Use Factors INFORMATIONAL ITEMS/STAFF REPORTS 23. Letters Received 24. Committee Reports 25. Strategic Planning Initiatives Progress Report 26. Carmel River Fishery Report 27. Water Conservation Program Report 28. Monthly Allocation Report 29. Monthly California-American Water Company Production Report 30. Production Report – CAWD/PBCSD Wastewater Reclamation Project 31. Monthly Water Supply Status Report 32. Report on Second Quarter Financial Activity for Fiscal Year 2003-2004 ADJOURNMENT

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