EXHIBIT 1-A

April 9, 2011  

                                                                                   

 

The Honorable Adrienne Grover

Presiding Judge of the Superior Court

County of Monterey

240 Church Street

Salinas, CA  93901                                                                                                                            

 

Subject:          Final Report of the 2010 Monterey County Civil Grand Jury

 

Dear Judge Grover,

 

The Monterey Peninsula Water Management District (MPWMD or District) is pleased to have the opportunity to respond to the findings and recommendations in the Final Report of the 2010 Monterey County Civil Grand Jury concerning the Monterey County Regional Water Project.  The District’s response to each required finding and recommendation is provided below.

 

Findings of the Grand Jury

 

F8.4.   It would be in the public interest for MPWMD to have a role in the project, so as to make available its considerable water expertise.

MPWMD agrees with Finding 8.4. 

 

F8.5.   There seems to be no independent financial oversight.

 

MPWMD partially disagrees with Finding 8.5.  Throughout the proceedings before the California Public Utilities Commission (CPUC), both the Monterey County Water Resources Agency and the Marina Coast Water District testified that each organization would exercise independent financial oversight through its public budgeting process.  In addition, it is MPWMD’s understanding that Monterey County plans to hire its own financial experts, Nixon Peabody LLP, to conduct an independent analysis of the proposed financing plan for the Regional Water Project.  It is MPWMD’s understanding that this analysis will be separate from the analysis that will be conducted by a different firm, Piper Jaffray Companies, for the Monterey County Water Resources Agency.       

 

F8.6.   Peninsula recycled waste water is not being used to offset an equal amount of Salinas Basin water for export.

MPWMD agrees with Finding 8.6.

 

 

F8.7.   There are many areas of concern in the technical aspects of this large-scale desalination project.

MPWMD agrees with Finding 8.7.

 

F8.8.   The current desalination plan is to replace Carmel River water.  Vital service upgrades for schools and nursing homes cannot happen without new water.

MPWMD agrees with Finding 8.8 and notes that the recent CPUC Decision (D.11-03-048) directing tariff modifications to recognize moratorium mandated by the State Water Resources Control Board (SWRCB) formalizes this situation.  The decision does, however, allow for the possibility of service for “demonstrated and compelling” institutional public health and safety water, subject to approval by the SWRCB.   

 

Recommendations of the Grand Jury

 

R8.2.   Grant the Municipal Advisor role a voting position, as many members are familiar with desalination operations. [Related Finding: F8.1]

It is MPWMD’s understanding that this recommendation will not be implemented by the signatories to the Water Purchase Agreement.  During the CPUC proceedings, MPWMD recommended that the Municipal Advisor be afforded an effective, representational voice in the Regional Project management decisions.  Specifically, MPWMD recommended that the Municipal Advisor be granted full party status with full voting rights, and the ability to dispute decisions reached by the Advisory Committee.  

 

R8.4.   MRWPCA, MCWD, MCWRA, and CalAm should continue to work to come to some agreement for participation of MPWMD.  Because these agency positions may have become entrenched, the Monterey County Board of Supervisors is encouraged to intervene to facilitate some agreement to include MPWMD.  [Related Finding: F8.4]

It is MPWMD’s understanding that this recommendation will not be implemented because the adopted Water Purchase Agreement has established the role for each agency and excludes MPWMD.  MPWMD is open to further discussions and is willing to participate in the planning and implementation of the Regional Water project.   

 

R8.5.   Consider the formation of an independent financial overview committee to review major functions of the project.  [Related Finding: F8.5]

It is MPWMD’s understanding that this recommendation has been partially implemented.  Specifically, both Monterey County and Monterey County Water Resources Agency have indicated that they will retain separate experts to analyze the proposed financing plan for the Regional Project.

 

R8.6.   MPWMD and MCWRA should pursue legal clarification or adjudication to allow Peninsula recycled water to be used to offset an equal amount of Salinas Basin water for export to the Monterey Peninsula.  [Related Finding: F8.6]

It is MPWMD’s understanding that this recommendation will not be implemented by the settling parties who signed the Water Purchase Agreement.

 

R8.7.   It would be prudent to continue work toward additional solutions for more water because of the technically high risk elements of this plan and to assist communities that need water to upgrade their outdated municipal services.  MCWRA, MPWMD, MRWPCA, and CalAm should pursue all avenues of finding new water for the community.  [Related Findings: F8.7 and F8.8]

This recommendation has been implemented.  MPWMD has identified a number of smaller water supply projects that could provide new water to the Monterey Peninsula community.  These projects include expansion of the existing Aquifer Storage and Recovery (ASR) Project, partnership with MRWPCA on the Seaside Basin Groundwater Replenishment Project, and a possible desalination facility located at the former City of Monterey Water Treatment Plant.  In addition, MPWMD and the other agencies are in the process of applying for state funding for specific projects through the Integrated Regional Water Management Planning Program.    

 

Sincerely,

 

 

Darby Fuerst

General Manager

 

Cc:       MPWMD District Board

            MPWMD General Counsel

            Keith Israel, MRWPCA General Manager

            Jim Heitzman, MCWD General Manager

            Curtis Weeks, MCWRA General Manager

            Craig Anthony, CAW General Manager

 

 

 

 

 

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