EXHIBIT 14-E

SITE HISTORY

There is a long and complex history associated with the property located at the Schulte and Carmel Valley Roads intersection. It involves an original development application for a minor subdivision, enactment of an MPWMD ordinance, SWRCB application for appropriative water rights, severed riparian water rights, and litigation.

Original Parcel Owned by Roy Martin

Roy Martin acquired a 49.23-acre parcel of land at the Schulte Road location in 1909. The property abutted the Carmel River and riparian rights were attached to the property. In 1911, Mr. Martin signed a deed to Monterey County Water Works (Cal-Am’s predecessor in title) granting “all riparian rights of every description owned or held” in and to the waters of the Carmel River reserving “the right in each month to take and receive one thousand (1,000) cubic feet of water” to be used for stock and domestic purposes on this property. This computes to approximately 0.28 acre-feet annually (AFA) for the entire 49.23-acre parcel. Earlier in the chain of title, James Meadows granted to C. P. Huntington on August 14, 1882, “the right to appropriate such portion of the waters of said river and its tributaries and so use the same as to him may seem meet and proper.”

The usual argument in a situation such as this is either that the property owner did not give up his right to pump ground water and could take as much was as was reasonable and beneficial for his purposes, or that a prescriptive right to use the water had been established because the property had used it openly, continuously, and adversely to Monterey County Water Works for the prescribed time.

Roy Martin and his family farmed the land in Carmel Valley. Martin Produce Stand was a landmark on Carmel Valley Road. It even had special recognition in the Carmel Valley Master Plan (CVMP) at Policy 28.1.16, which reads:

The Valley Hills and Begonia Gardens nurseries and Martin’s produce stand should be made conforming uses. These sites must continue in their present use or, if discontinued, another agriculturally related commercial use shall be allowed.

Grice Engineering Hydrology Report to Michael R. Berube

By 1994, the Martin parcel was reduced to 26 acres (APN 169-181-043). The owner was Mills College as Trustee of the Scott C. Ramsden and Mary Alice Ramsden Charitable Remainder Unitrust dated January 9, 1993. Michael R. Berube had an option on the parcel and wanted to develop it in two phases. Phase 1 or “Partial Buildout” would reduce existing water use from 36.56 AFA to 19.91 AFA. Phase 2 or (Complete Buildout) would reduce water use from 19.91 AFA to 3.99 AFA.

As part of the county approval process, Mr. Berube had a hydrology study and nitrate loading assessment prepared for the parcel by Grice Engineering, Inc. (Grice Report, November 1994). A complete copy of the Grice Report is available at the District office. Two significant statements are repeated in the Grice Report. The first is that “…within the study area, the aquifer is in an overdraft of 30.55 acre-feet/year. At complete buildout the balance of inflow-outflow would change and the aquifer would be recharged at a rate of 2.02 acre-feet/year.” The second is that “…the demand for groundwater will be decreased to 3.99 acre-feet/year.”

Mills College Subdivision (Berube)

In 1995, Michael Berube, as optionee of APN 169-181-043, successfully moved through the Monterey County development approval process with a minor subdivision (No. MS95005). A lot line adjustment to All Saints School of 2.2 acres had reduced the development parcel to 23.8 acres. This was divided into four new parcels with one remainder parcel of 10 acres. Applicant Berube intended to create four new lots abutting the river with the remainder parcel on which Martin’s Produce Stand was located reserved for Phase 2. This 10-acre remainder parcel could later be subdivided into four 2.5-acre parcels according to the zoning.

Water for the Project

Berube originally wanted the development served by Cal-Am. In May 1995, the applicant’s attorney, Anthony Lombardo, notified the County it wanted to amend its proposal to allow for the drilling of individual wells to serve each lot. The draft SWRCB Order No. WR 95-10 was issued in early June 1995 and finalized on July 6, 1995. Most of Cal-Am’s extractions from the Carmel River system were deemed to be without a valid legal right.

The Mills College project was approved by Dale Ellis, Zoning Administrator, on May 24, 1995. The applicant and his attorney continued to pursue water in two ways. First, well permits were secured from the County to drill individual wells. They expired twice and were finally drilled in early 1999.

Mr. Berube also filed an application with the SWRCB to secure an appropriative water right. This process began in February 1995. If he could secure this water right, he could trade water for Cal-Am service. This involved working with MPWMD and culminated in Ordinance 81. The ordinance provided Cal-Am could produce an annual maximum of 2.15 acre-feet (AF) “to serve the parcels within the proposed Mills College subdivision” which would be the equivalent of 2.0 AF of delivered water. Protests were filed against Berube’s appropriative water right application (A030442) and the SWRCB processing of various Table 13 applications continues. It should be noted that the historical water numbers recognized in Ordinance 81 as well as Berube’s requested Table 13 water right differ from the County’s numbers.

Save Our Carmel River vs. County of Monterey, et al.

When the wells were being drilled on the Mills College parcel in early 1999, Save Our Carmel River (SOCR) brought suit against Monterey County upon being notified that the County would require no water reduction because it was not a “condition” of approval. In the Decision filed September 1, 1999, the Court ruled in favor of SOCR and required the County to “accept the project description now and in the future as it was in 1995 when the project was approved, unless and until other appropriate action is taken.”

Save Our Carmel River v. County of Monterey, Case No. M43343.

Phase 1 Activities

After the 1995 approval was secured, the development process proceeded. Berube as optionee was succeeded in ownership by BLL (Berube, Loorz & Loorz), a Limited Liability Company, which secured the four newly created lots (APN 169-181-047, 169-181-048, 169-181-049, and 169-181-050). JEM Partners, LLC, a California Limited Liability Corporation, ultimately received title to the remainder parcel (169-181-051, formerly referred to as 169-181-046). The 2.2-acre parcel created by the original lot line adjustment became APN 169-181-052.

JEM succeeded Berube on Table 13 and held the water rights to the entire parcel. It then assigned rights of 1 AF to each of the four newly created parcels from the Mills College subdivision. In addition, it assigned 1 AF of water to the 2.2-acre parcel transferred to All Saints School. Thus, the 19.91 AFA from Phase 1 development was reduced by 5 AFA to 14.91 AFA.

Phase 2 Activities

Moving forward with Phase 2 on the 10-acre remainder parcel (currently referenced as 10.02 acres), JEM filed applications for four well permits. The total water demand could not exceed 14.91 AFA without JEM applying for and the County processing and granting discretionary permits, subject to environmental review and associated public hearings. A Deed Restriction to this effect was filed with the Monterey County Recorder on December 27, 2002, Document 2002125605.

A Stipulation and Order Regarding Water Usage on Remainder Parcel was executed in June 2002 between the parties to the SOCR litigation. Several conditions were added which would then allow the County to issue permits ministerially for the four new wells. Of particular note is condition 3G which states,

In the event that any application is filed with the County for non-agricultural development of the remainder, water consumption associated with such non-agricultural development shall be evaluated and conditioned consistent with applicable water demand analyses contained in the November 1994 report of Grice Engineering, prepared in connection with the Mills College Subdivision.

Proposed Lot Line Adjustment

In 2002, JEM Partners filed a Lot Line Adjustment (PLN020437) for APN 169-181-051 (the Mills College remainder parcel) and 169-181-052 (the 2.2-acre parcel originally sliced off before the Mills College subdivision commenced) together with 169-181-045. The 169-181-051 remainder parcel would be reduced from 10.02 acres to 5.01 acres. The 169-181-045 and -052, currently at 14.73 acres, would increase to 19.74 acres. Each property would have two wells. The matter was heard by the Carmel Valley Land Use Advisory Committee on March 17, 2003 and approved by the Minor Subdivision Committee on August 28, 2003. The conditions require a deed restriction against 169-181-051 restricting water use on the remaining 5.01 acres of the original Mills College remainder parcel to 10.91 AFA without securing County approval. On the now 7.21 acres (the original 2.2 acres transferred before the Mills College subdivision and the new 5.01 acres from the Mills College remainder parcel) for a total of 19.74 acres, the limitation is 5 AFA (the original 1 AFA transferred to the 2.2 acre parcel sliced off before the Mills College subdivision and 4 AFA remaining from the 14.91 AFA after 10.91 AFA is assigned to 169-181-051) without securing County approval. As of September 3, 2004, the lot line adjustment had not been recorded.

On or about September 16, 2003, JEM Partners LLC conveyed title to the complete remainder parcel (APN 169-181-051) to Milton B. Kane, who subsequently conveyed to Christo D. Bardis on November 25, 2003.

Other Land Use Possibilities

The current owner of 169-181-051, Christo D. Bardis, also controls the water right of 14.91 AFA for the original Mills College subdivision remainder parcel.

The current status of the remainder parcel is unclear. The lot line adjustment (PLN020437) leaving 5.01 acres with 169-181-051 and transferring 5.01 acres to All Saints parcels 169-181-045 and 169-181-052 need only be recorded. Another iteration which has been suggested is that Mr. Bardis will retain a 2.5-acre parcel with the balance deeded to All Saints. A third iteration has Mr. Bardis proceeding with a minor subdivision (PLN030560) to split the former Mills College 10-acre remainder parcel into four parcels of 2.5 acres each.

Outstanding Issues

In February 2004, the County issued four permits for new water wells for 169-181-051 to Christo Bardis. One well has been drilled.

According to the Grice Report, when all development was concluded, total water demand would be reduced to 3.99 AFA. To date, development has already been granted 5 AFA (1 AFA to each of the four lots created by the Mills College subdivision Phase 1 and 1 AFA transferred with the 2.2 acres deeded to All Saints by Mills College prior to the subdivision).

The Zoning Administrator’s Mills College approval states that the Grice Report recommendations “shall be followed in all further development of this property.” Similar language is found in the Stipulation requiring that any application filed for non-agricultural development on the Mills College remainder parcel “shall be evaluated and conditioned consistent with applicable water demand analyses contained in the November 1994 report of Grice Engineering, prepared in connection with the Mills College Subdivision.”

U:\staff\word\boardpacket\2005\20050127\PubHrgs\14\item14_exh14e.doc

Prepared by DeLay & Laredo (FF), revised 11/5/04

Minor style edits by HS 11/8/04