MI NUTES

MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)

Regular Meeting
6:00 PM, Thursday, September 27, 2012
FEW MEMORIAL HALL
CITY COUNCIL CHAMBER
580 PACIFIC STREET
MONTEREY, CALIFORNIA

Directors Present: Bachofner, Burnett, Edelen, Garcia, Pendergrass, Potter, Della Sala
Directors Absent: None

Staff Present: Monterey City Manager Meurer, Legal Counsel Davi, Legal Counsel
Freeman, Clerk to the Authority Milton

ROLL CALL

President Della Sala called the meeting to order at 6:06 p.m.

PLEDGE OF ALLEGIANCE

OTHER BUSINESS

1. Accept Monterey County as Participatory Member of the Monterey Peninsula Regional Water
Authority and Authorize Amendment to Bylaws
Action: Approved (5-0-1; Garcia absent)

Legal Counsel Davi presented the agenda report, noting on August 1, 2012 the MPRWA sent a
letter to the County of Monterey inviting participation in the JPA that the County Board of
Supervisors unanimously voted on September 11, 2012 to join the JPA and appointed
Supervisor Dave Potter as their representative. She added that the County approved a
payment of $83,300 for Fiscal Year 2012/13 and requested that a pro ration share of $5,561.61
be waived. President Della Sala opened public comments and having no requests to speak
closed public comment.

On a motion by Director Burnett, seconded by Vice President Bachofner, and carried by the
following vote, the Monterey Peninsula Regional Water Authority accepted Monterey County as
a participatory member of the Monterey Peninsula Regional Water Authority, authorized an
amendment to the bylaws, accepted the $83,300 cost share for FY 12/13 and waived the pro-
rated cost sharing amount of $5,561.61.
AYES: 5 DIRECTORS: Bachofner, Burnett, Edelen, Pendergrass, Della
Sala
NOES: 0 DIRECTORS: None
ABSENT: 1 DIRECTORS: Garcia
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

PUBLIC COMMENTS

President Della Sala requested public comments for items not on the agenda. Nelson Vega
expressed concerns on taxes that may be charged per parcel and not more fairly on how much
water was used. He stated it seems there is a lot of duplication of effort by multiple agencies
and multiple jurisdictions making decisions about water. President Della Sala spoke in support
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of TAC Chair Stoldts efforts. He reconfirmed the purpose of MPRWA and confirmed that there
may not always be a need for both agencies to exist. Director Edelen responded to Mr. Vegas
comments, clarifying that the MPRWA does not have jurisdiction over all water related issues,
only those under its mission and purview. Having no further comments to speak, President
Della Sala closed public comments.

REPORTS FROM MPRWA DIRECTORS AND STAFF

Director Burnett reported that the Monterey Peninsula Water Management District (MPWMD)
also addressed the topic of governance as did the MPRWA, noting that MPWMD wants public
ownership at least in part and advocates for their inclusion in its governance. Director Burnett
noted that this resulted in two letters submitted to the CPUC, one from MPWMD and one from
MPRWA. He closed stating the Monterey County Board of Supervisors scheduled a special
meeting September 28th, 2012 to review the question of governance.
Director Pendergrass reported that the Monterey Regional Water Pollution Control Agency
(MRWPCA) voted 11 to 9 against the ground water replenishment budget. Director Burnett
requested a breakdown of the jurisdictions voting against the motion in order to discuss the
dissention and stated his meetings with local agricultural representatives to understand their
water rights concerns were amicable, adding there is another negotiating session with farmers
coming up. Director Pendergrass indicated the dissenting jurisdictions were the Cities of
Salinas, Marina Coast, Pacific Grove and the Moss Landing Harbor District. Vice President
Bachofner discussed the impacted scenarios by the vote and stressed that timing was an issue.
Director Garcia arrived at the meeting at 6:26 p.m. and stated for the record that she supported
the joining of Monterey County to the MPRWA. Director Potter arrived at 6:27 p.m. and was
welcomed by the board.

2. Receive Report from Technical Advisory Committee (TAC)

a. Summary of September 17, 2012 Technical Advisory Committee Meeting
Action: Report Received
TAC Chair Stoldt provided an update on the TAC September 18, 2012 meeting regarding
Consultant Chris Helms presentation about environmental and permitting issues. Mr. Helm
provided preliminary observations of the three targeted desalination proposals, noting the scope
was adjusted to reflect compliance activities.
b. Review of Consultant Schedule and Progress
Action: Report Received and Discussed

TAC Chair Stoldt indicated that responses to the SPI Consultants inquiries from the desalination
proposals were slower than anticipated and a final report should be available on or
before October 31, 2012. He noted one invoice for consulting services was received to date and
forwarded on to the finance officer for payment.
President Della Sala opened public comment. George Riley expressed concern that there has
not been enough discussion regarding project costs, funding available and public financing
opportunities. He requested MPRWA agendize a discussion of costs. Tom Rowley concurred
with Mr. Rileys concerns about "stranded costs and expressed concern it will end up with the
ratepayers. He asked that the MPRWA be concerned about the impact of cost on ratepayers. In
regards to Mr. Rileys comments Mr Vega disagreed that money should not be a consideration at
this point because it could result with an inadequate project. Instead, he said they should find the
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right project parameters, then discuss cost. TAC Chair Stoldt announced CPUC workshops on
costs and cost impacts have been set for Dec 11, 12 & 13, 2012. Director Burnett requested the
discussion of costs to be taken up by MPRWA at a later date. Having no further requests to
speak on Item #2, President Della Sala closed public comment.
APPROVAL OF MINUTES

3. August 1, 2012
Action: Approved (5-0-2 Burnett, Potter abstain)

4. September 12, 2012 Special Meeting
Action: Approved (6-0-1 Potter abstain)

On a motion by Director Burnett and Seconded by Director Garcia the Monterey Peninsula
Regional Water Authority approved the minutes from the meetings of August 1, 2012 and
September 12, 2012 by the following vote:
AYES: 5 DIRECTORS: Bachofner, Edelen, Garcia, Pendergrass, Della Sala
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 2 DIRECTORS: Burnett, Potter
RECUSED: 0 DIRECTORS: None

AGENDA ITEMS

5. Direct the Selection of Legal Counsel and Authorize the President to Execute a Professional
Services Contract with the Selected Firm/Attorney
Action: Discussed and Approved (7-0-0)

Legal Counsel Davi presented the agenda report, stating the City of Monterey released a
Request for Qualifications for legal counsel on August 10, 2012 and that 21 proposals were
received. She stated MPRWA appointed members to an Ad Hoc committee, which reviewed
the proposals and recommended four firms be presented to the MPRWA, based on specific
criteria.

President Della Sala opened the item for public comments. Anthony Candotti, principal attorney
at Condotti & Kovacevich responded to Vice President Bachofners concerns about costs
associated with travel time to and from Santa Cruz indicating their proposal reflected a reduced
rate for travel. Don Freeman spoke in support of his submission and gave qualifications for
consideration of his firm, Perry and Freeman. Jason Redder, a partner at L+G, LLP, responded
to questions about rates of principals verses associate attorneys and indicated that in the
submitted proposal rates are reflective of experience. Richard Glenn from the Thompson Law
office advocated that his office is the closest generating no mileage costs and said that he has
a paralegal rate and other flexible, negotiable costs. He gave examples of substantial
experience in public agency work and water supply issues. Having no further requests to speak
President Della Sala closed public comment on this item.

Director Pendergrass said he prefers a firm who has familiarity with the MPRWA, the process
and the players, and therefore, recommended Perry and Freeman. Director Edelen concurred
and thanked the four firms represented at the meeting, stating they were all well qualified and
very professional. Vice President Bachofner said he prefers to give business to the most local
firm because it will have a net positive impact on the peninsula.

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Director Burnett moved and Director Pendergrass seconded the motion for the Monterey
Peninsula Regional Water Authority to accept the firm of Perry and Freeman and the option of
a flat monthly fee of $2,500.
President Della Sala invited discussion on the motion. Director Garcia questioned the specifics
of the Perry and Freeman proposal. On question, Mr. Freeman explained the fee schedule
presented in the proposal and said his firm rarely charges the extraordinary fees unless they
are required to attend litigation.

Director Potter expressed concerned that Mr. Freeman serves at the pleasure of too many of
the local jurisdictions and there would be a concern with an element of influence which should
be subject to consideration of the board. He stated if the issue of conflict came up it would be
unreasonable to have to continuously retain outside counsel in times of conflict. Mr. Freeman
responded that he would be required to bring a letter to each of the jurisdictions for which he
participates to deal with any conflicts of interest. Mr. Freeman noted if there was a conflict, he
would suggest that MPRWA retain separate legal counsel. Vice President Bachofner spoke in
support of the Thompson Law firm citing no conflict of interest and previous positive
experiences. Director Garcia spoke in support of positive past experiences with Perry and
Freeman.

The motioner clarified his motion to state the following: the MPRWA Board approves the
selection of Perry and Freeman for legal counsel with the understanding any extraordinary
costs would be additional to the $2,500 flat fee and there would be a 90 day review period of
the contract and authorized the President to execute a professional services contract with the
selected firm Perry and Freeman. And the seconded agreed to the change and the motion was
carried by the following vote:
AYES: 7 DIRECTORS: Bachofner, Burnett, Edelen, Garcia, Pendergrass,
Potter, Della Sala
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

Legal Counsel Davi accepted responsibility to review the legal services contract prior to its
execution.

6. Review the Necessity/Desirability of Executive Director
Action: Discussed and Approved Necessity of Hiring Executive Director

Monterey City Manager Meurer introduced this item and reported that all six participating
agencies have formally requested the authority hire a dedicated Executive Director due to the
time constraints of current City Managers and the attention needed to efficiently coordinate the
efforts of the MPRWA.

President Della Sala opened public comment. Tom Rowley said the Board was very lucky to
have John Dunns involvement, but that the sooner the Executive Director is appointed the
more efficient the MPRWA can function. Having no further requests to speak, President Della
Sala closed public comment.

On a motion by Director Garcia and seconded by Director Burnett and carried by the following
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vote, the MPRWA Board approved the necessity of hiring an Executive Director.
AYES: 7 DIRECTORS: Bachofner, Burnett, Edelen, Garcia, Pendergrass
Potter, Della Sala
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

7. Discuss Agenda Items for Future Meetings
Action: Discussed

President Della Sala introduced this item requesting additional agenda topics for future
meetings. Director Burnett requested that a discussion over the surcharge take place at a future
date due to the fact the issue may come before MPRWA prior to the completion of the SPI
Consulting report. President Della Opened public comment on this item and seeing no requests
to speak closed public comment.

8. Information
Action: Discussed

President Della Sala indicated that there are previous commitments in the Monterey Council
Chamber at 6:00 p.m. through the end of 2012. Meetings for the remainder of 2012 will begin at
7:00 p.m. Having no further business to conduct before the MPRWA, President Della
Sala adjourned the meeting to Closed Session at 7:38 p.m.

***Adjourn to Closed Session***

ANNOUNCEMENTS FROM CLOSED SESSION

Legal Council Don Freeman announced that the Board gave confidential direction to staff
regarding the Closed Session item: Conference with Labor Negotiators Pursuant to
Government Code Section 54957.6 Agency Negotiators: Fred Meurer - Unrepresented
Employee: Executive Director

ADJOURNMENT


ATTEST:



Lesley Milton, Clerk to the Authority Chuck Della Sala, MPRWA President

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