EXHIBIT 1-A

Draft Text for District Newsletter

1. California Water Crises Compared to Local Water Situation – Lead Article

2. Status of Draft Cease and Desist Order – Preparations by District to Enable Community Compliance

3. Progress on Water Supply Project Development

4. Expanded Rebate Program – Turf Replacement

5. Water Year 2009 Status – Production, Conservation Savings, Rainfall

To be submitted at October 14, 2009 Committee Meeting

Topic: California Water Crises Compared to Local Water Situation

In February 2009, Governor Schwarzenegger proclaimed a statewide drought emergency and called for a statewide water conservation program to begin immediately. To water users in the MPWMD, the conservation challenge is not new; it’s a way of life that has yielded a 20% reduction in community water use since 1987. Per capita water use is 80 gallons per day below the state average.

The MPWMD is not affected by cutbacks in water deliveries from other parts of the state. This area is served exclusively by local water sources: the Carmel River and the Seaside Groundwater Basin. Water production is monitored by the District and resource agencies to provide Carmel River streamflow for steelhead fish, and to guard against seawater intrusion.

In Water Year 2009, rainfall recorded in the Carmel River watershed was 18 inches, which is 3 inches or 15 percent below average. It is estimated that sufficient water storage exists within the Carmel River and Seaside Basin to meet community water needs through September 2010 (see page __). This assumes the community continues to be vigilant about reducing water waste.

Even if abundant rainfall is received in 2010, the “regulatory” drought will continue. This “regulatory” drought is due to state and judicial decisions that limit production from local water sources. Reductions in pumping from the Seaside Basin were the result of the 2006 basin adjudication. In 1995, the state limited production from the Carmel River by 20 percent from previous levels. In 2008 and 2009 the state issued draft Cease and Desist Orders calling for more stringent water reductions that have not yet been adopted (see page ___).

The community achieved the state-ordered 20 percent reduction in 13 of the past 14 years through compliance with strict conservation measures. Pumping in the Seaside Basin also remains within legal limits. Should the state adopt the Cease and Desist Order, a seven-phase conservation and rationing program is in place to ensure compliance with escalating water reductions.

Only development of new water supplies will alleviate the regulatory drought. The Aquifer Storage and Recovery Project developed by the MPWMD in cooperation with California American Water is fully operational. The MPWMD has investigated development of a desalination plant, and is working with the Water for Monterey County Coalition to pursue a regional water supply project (see page __).

Statewide, the “Save Our Water” campaign is focused on conservation education http://www.saveourH2O.org. District staff participate in state-level meetings regarding development of the proposed 20x2020 Conservation Plan that would divide the state into ten regions, and require each region to reduce per capita urban water use by 20 percent by the year 2020 http://www.swrcb.ca.gov/water_issues/hot_topics/20x2020/index.shtml.

Topic: Status of Draft Cease and Desist Order – Preparations by District to Enable Community Compliance

An important decision that could affect all water users in the MPWMD is pending before the State Water Resources Control Board (State Board). Will the State Board decide to adopt the September 2009 Draft Cease and Desist Order (CDO) and require significant reductions in water diversions from the Carmel River Basin? In a letter to the State Board, MPWMD General Manager Darby Fuerst requested that, if the Order is adopted, implementation should be delayed to allow additional review of the issues.

The CDO would require California American Water (Cal-Am) to incrementally reduce its water diversions from Carmel River sources to 3,376 acre feet per year by 2017. In Water Year 2009 (October 2008 through September 2009) diversions from the Carmel River for customer service totaled 10,285 acre-feet. The MPWMD has advised the State Board that drastic reductions in production are an unacceptable threat to the public health, safety and welfare of the community.

The MPWMD and Cal Am are developing strategies to minimize the impact of the CDO on the community, should the State Board implement the order. One option is that the MPWMD could activate advanced stages of its seven-phase Water Conservation and Standby Rationing Program to enable water users to ramp up conservation efforts and achieve water use reductions.

The State Board first issued a draft CDO in January 2008 due to concerns about adverse effects on fish and wildlife resulting from Cal-Am’s unauthorized illegal diversions. The draft CDO asserted that Cal-Am had not complied with the State Board’s 1995 decision in Order 95-10. That decision determined that Cal-Am was producing 10,730 acre-feet of water from the Carmel River basin in excess of its legal right of 3,376 acre-feet, and that over production was causing harm to the steelhead fish and streamside vegetation.

Cal-Am was ordered to temporarily reduce its pumping by 20 percent to 11,285 acre-feet per year until a new water project could be developed that would allow for termination of its unauthorized diversions. Production has remained below the 11,285 limit in 13 out of the past 14 years. However, sufficient new water sources have not been developed to allow full compliance with Order 95-10.

Topic: Progress on Water Supply Project Development

A priority for the MPWMD is development of new water projects that will reduce the community’s dependence on Carmel River sources. The focus is on aquifer storage and recovery, desalination, and conservation measures that could be incorporated into a regional solution that may include projects developed by other local resource agencies such as large-scale seawater desalination and water recycling.

Aquifer Storage and Recovery

The MPWMD Phase 1 Aquifer Storage and Recovery Project (ASR) is designed to utilize the Seaside Groundwater basin for storage of up to 2,426 acre-feet of water per year. Water is diverted from the Carmel River during the winter months when excess streamflow is available, pumped into the Seaside basin, and stored there until the summer months when it can be distributed to the community. This helps meet customer water demand in the summer, and provide streamflow for wildlife in the Carmel River during dry periods. This project is operated under a permit issued by the State Board that allows diversion of Carmel River water for ASR.

Since ASR planning and testing began in 1998, over 2,100 acre-feet of Carmel River Basin water have been diverted for storage in the Seaside Basin. The project will be capable of injecting and storing water at full capacity in early 2010. The two ASR injections wells are located on former Fort Ord land near the intersection of General Jim Boulevard and Eucalyptus Road within the City of Seaside.

Seawater Desalination

The result of field studies completed in late 2009 indicate that development of a desalination facility using source water from the Seaside Groundwater Basin may not be feasible. The proposed MPWMD 95-10 Desalination Project was projected to produce between 2,800 and 4,500 acre-feet of water per year from the Seaside Basin. Water intake facilities would be constructed along the coast from Sand City through former Fort Ord. The MPWMD Board in 2008 agreed to focus its efforts on studying the 95-10 Desalination Project to provide water to the community in the interim until Cal-Am’s Coastal Water Project, or another regional solution is operational.

Cooperation with Other Agencies

The MPWMD ASR Project is included as a component of the proposed Coastal Water Project and the regional project alternative formulated by the Water For Monterey County Coalition. Aside from development of its ASR and desalination projects, MPWMD is actively coordinating with other agencies on water supply solutions. MPWMD has entered into memorandums of agreement regarding cooperation on water supply project planning with the Marina Coast Water District, Monterey Regional Water Pollution Control Agency and the Monterey County Water Resource Agency. In addition, the MPWMD participates on the Water For Monterey County Coalition, and jointly funded the group’s efforts to develop the Regional Project. In 2009, the MPWMD Board funded development of a study that evaluates the economic and cost allocation issues associated with the proposed Coastal Water Project and the Regional Project that can be viewed at _________.

Topic: Expanded Rebate Program – Turf Replacement

Receive cash for replacing your lawn with drought tolerant plants or synthetic turf, and save money on your water bill! You don’t have a lawn? Replace your washing machine with a high efficiency model to receive a cash rebate. Own a business? Obtain a rebate by replacing your water-cooled ice machine with an air-cooled one, or install a high efficiency toilet or smart irrigation system controller.

The MPWMD rebate program extends to residential and commercial projects, and encompasses a wide range of water using fixtures and appliances such as high efficiency toilets and urinals, ultra-low consumption dishwashers, instant access hot water heaters and cooling tower conductivity controllers. Rebates are also offered for installation of cistern water tanks and outdoor irrigation equipment.

The list of devices that qualify for a rebate was recently expanded, and the rebate amounts were increased for some fixtures. Water saving devices that are required to be installed upon construction or resale of a property will not qualify for a rebate. Contact the District for a complete list of qualifying devices.

Take advantage of cash rebates to help fund improvements to your home or business, lower your water bill, and maintain community water use at levels established by the State to protect the Carmel River and Seaside Groundwater Basin. Funding for the rebate program is supported by California American Water and the Seaside Municipal Water System.

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