ITEM:		ACTION ITEMS
23.	REVIEW SPECIAL MEETING OF MRWPCA BOARD OF DIRECTORS AND AD HOC WATER SUPPLY PLANNING COMMITTEE REGARDING DEVELOPMENT OF LONG-TERM AGREEMENTS AMONG MRWPCA, MCWD, AND MCWRA TO SUPPORT THE PROPOSED REGIONAL WATER PROJECT, AND DIRECT PREPARATION OF A DISTRICT RESPONSE
Meeting Date:			April 20, 2009	Budgeted:	No
From:			Darby Fuerst,	Program/	N/A
			General Manager	Line Item No.:	N/A
Prepared By:			Darby Fuerst	Cost Estimate:	N/A
General Counsel Approval: N/A
Committee Recommendation: The Ad Hoc Water Supply Planning Committee reviewed this item on April 14, 2009, and recommended preparation of a District response.
CEQA Compliance: N/A

SUMMARY: On March 23, 2009, the Monterey Regional Water Pollution Control Agency (MRWPCA) Board of Directors and its Ad Hoc Water Committee held a special meeting to begin a dialogue intended to lead to the development of one or more long-term water supply agreements among the MRWPCA, Marina Coast Water District (MCWD) and Monterey County Water Resources Agency (MCWRA). The agenda for this special meeting is included as Exhibit 23-A. The District Board and staff were not invited to participate in the meeting, but staff did receive notice of the meeting. District General Manager Fuerst and General Counsel Laredo attended the meeting. District Directors Pendergrass and Potter also attended the meeting, representing the City of Sand City and Monterey County, respectively.

The meeting was held to provide an opportunity to bring parties together to discuss the Regional Water Supply Project, which is an alternative to the Coastal Water Project (CWP) proposed by California American Water (Cal-Am), and the institutional agreements necessary to allow the Regional Project to move forward. As discussed at the meeting, four agreements were identified that are needed to demonstrate the viability of the Regional Project to the California Public Utility Commission (CPUC):

1. Agreement between MCWD and MCWRA regarding the use of water from wells in the Salinas Valley Groundwater Basin as feedwater for the desalination facility that would be constructed and operated MCWD.

2. Agreement between MCWD and MRWPCA regarding the use of MRWPCA’s ocean outfall for disposal of the brine from MCWD’s desalination facility.

3. Agreement among MCWD, MRWPCA, and MCWRA regarding the use of recycled water.

4. Agreement between MCWD and Cal-Am regarding the purchase of water from MCWD’s desalination facility.

A motion was made to select the Regional Water Supply Project as the preferred project and develop the four institutional agreements within 30 days. As part of the motion, a Negotiating Committee consisting of the MRWPCA Executive Director, Board Chair, and Board member from each agency and a neutral counsel was formed and directed to meet within 10 days to develop the agreements. The motion was approved unanimously. Minutes from the March 23, 2009 special meeting are included as Exhibit 23-B. A transcript of the special meeting was prepared by MRWPCA staff at the District’s request and was provided to each District Director under separate cover. Copies of this transcript are available at the District office.

Following the special meeting, members of the Negotiating Committee met on several occasions and developed four Memoranda of Understanding (MOU). The first MOU is an overarching agreement designed to create a leadership and management framework responsible for developing a strategy to implement the proposed Regional Water Supply Project. As part of this MOU, each of the “Participating Entities”, i.e., MCWRA, MCWD, and MRWPCA, agree to execute specific institutional agreements and contribute financial and technical resources and in-kind assistance to implement the Regional Water Supply Project. A copy of this MOU, i.e., Monterey Regional Water Supply Program Planning MOU, is included as Exhibit 23-C. Copies of the three other MOUs that relate to the Regional Urban Water Augmentation Project (RUWAP), use of the MRWPCA outfall for brine disposal, and recycled water availability are included as Exhibits 23-D, 23-E, and 23-F, respectively.

The MRWPCA Board considered and approved each of the four MOUs on April 13, 2009. Similarly, the MCWD Board considered and approved each of the four MOUs on April 14, 2009. The MCWRA Board is scheduled to consider each of the four MOUs later this month.

This item was reviewed by MPWMD’s Water Supply Planning Committee on April 14, 2009. At that meeting, the committee recommended that the MPWMD Board direct staff to prepare a response indicating support for MRWPCA’s initiative and request that the District be part of the ongoing negotiations and management framework. This request is based on the District’s continuing authority and responsibility to regulate water distribution systems within the District boundaries, including Cal-Am’s systems that would be provided water from sources outside the District under the Regional Project. In addition, this request is consistent with the District’s continuing responsibilities to augment the area’s water supplies, monitor the environmental health of the Carmel River system, and promote water conservation. At the committee meeting, Director Brower volunteered to represent the District in discussions with the other agencies. The committee also recommended that the Directors who participated at MRWPCA’s special meeting, i.e., Directors Pendergrass and Potter, support inclusion of the District in the management framework that is outlined in the Monterey Regional Water Supply Program Planning MOU.

RECOMMENDATION: The Board should review the information regarding the March 23, 2009 special meeting of the MRWPCA Board and its Ad Hoc Water Committee, the agreements among MRWPCA, MCWD, and MCWRA that have been developed to support the Regional Project, and the District’s Water Supply Planning Committee recommendations. Based on this review, public comment, and discussion, the Board should provide direction regarding preparation of a District response. More specifically, staff recommends that the Board direct staff to prepare a letter for the Chair’s signature indicating support for the Monterey Regional Water Supply Program and requesting inclusion in the leadership and management framework described in the Monterey Regional Water Supply Program Planning MOU.

BACKGROUND: Cal-Am has proposed construction and operation of the CWP to address the physical and regulatory constraints on water supplies in the Monterey Peninsula area. As analyzed in the Draft EIR prepared by the CPUC, the CWP would include a 10 million gallon per day (MGD) desalination plant at Moss Landing and an aquifer storage and recovery (ASR) project in the Seaside Basin that would yield approximately 12,500 acre-feet per year (AFY). As an alternative, a Regional Water Supply Project has been proposed that would yield approximately 15,200 AFY, with 12,500 AFY supplied to the Monterey Peninsula area and 2,700 AFY provided to users on the former Fort Ord served by MCWD. The Regional Project would be developed in phases and initially would include a 10 MGD desalination plant at the North Marina site.

IMPACT TO DISTRICT STAFF/RESOURCES: The impact to staff and resources will depend on the level of participation that the Board decides upon.

EXHIBIT

23-A Agenda for Special Meeting of the MRWPCA Board of Directors and of the Ad Hoc Water Committee, March 23, 2009

23-B Minutes for Special Meeting of the MRWPCA Board of Directors and of the Ad Hoc Water Committee, March 23, 2009

23-C Draft Monterey Regional Water Supply Program Planning Memorandum of Understanding, April 10, 2009

23-D Final Draft Memorandum of Understanding, Regional Urban Water Augmentation Project, April 13, 2009

23-E Memorandum of Understanding, Planning for Use of MRWPCA Outfall for Brine Disposal, April 10, 2009

23-F Monterey Regional Water Supply Program, Recycled Water Three-Way Memorandum of Understanding, April 13, 2009

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