Agenda

Monterey Peninsula Regional Water Authority (MPRWA)

Director's Meeting

7:00 PM, Thursday, May 10, 2018

Council Chambers
580 Pacific Street, Monterey
Monterey, California

CALL TO ORDER

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

PUBLIC COMMENTS
PUBLIC COMMENTS allows you, the public, to speak for a maximum of three minutes on any
subject which is within the jurisdiction of the MPRWA and which is not on the agenda. Any person
or group desiring to bring an item to the attention of the Authority may do so by addressing the
Authority during Public Comments or by addressing a letter of explanation to: MPRWA, Attn:
Monterey City Clerk, 580 Pacific St, Monterey, CA 93940. The appropriate staff person will contact
the sender concerning the details.

CONSENT AGENDA
CONSENT AGENDA consists of those items which are routine and for which a staff
recommendation has been prepared. A member of the public or MPRWA Director may request
that an item be placed on the regular agenda for further discussion

1. Approve Minutes from March 8, 2018 - Romero

2. Approve Minutes from April 12, 2018 - Romero

3. Approve and File Authority Checks Through April 30, 2018 - Russo

4. Approve a Certificate of Appreciation for Water Authority Clerk of the Board Nova Romero
- Cullem

5. Receive Report, Discuss if Necessary and Provide Direction to Staff if Required on Issues
Discussed at the Settlement Meetings - Kampe

***End of Consent Agenda***

AGENDA ITEMS

6. Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP) and the Status of Pipeline Installation - Cook
 Thursday, May 10, 2018
7. Receive Update, Discuss, and Provide Staff Direction on the Deep Water Desal Project -
Armanesco

8. Receive Report, Discuss, and Provide Staff Direction on Authority Work Plan for the
Balance of FY 2017-2018 and for FY 2018-2019 - Kampe

9. Receive Report on Budget Options, Discuss, Adopt Budget for FY 2018-2019, and Provide
Staff Guidance - Kampe

ADJOURNMENT

The City of Monterey is committed to including the disabled in all of its services, programs and
activities. In compliance with the Americans with Disabilities Act, if you need special assistance
to participate in this meeting, please contact the City Clerk’s Office at (831) 646-3935.
Notification 30 hours prior to the meeting will enable the City to make reasonable arrangements
to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II]. Later requests will
be accommodated to the extent feasible. For communication-related assistance, dial 711 to use
the California Relay Service (CRS) to speak to City offices. CRS offers free text-to-speech, speech-
to-speech, and Spanish-language services 24 hours a day, 7 days a week. If you require a hearing
amplification device to attend a meeting, dial 711 to use CRS to talk to the City Clerk's Office at
(831) 646-3935 to coordinate use of a device.

Agenda related writings or documents provided to the MPRWA are available for public
inspection during the meeting or may be requested from the Monterey City Clerk’s Office at 580
Pacific St, Room 6, Monterey, CA 93940. This agenda is posted in compliance with California
Government Code Section 54954.2(a) or Section 54956.

2
 M I N U TE S
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Director's Meeting
7:00 PM, Thursday, March 8, 2018
COUNCIL CHAMBERS
580 PACIFIC STREET, MONTEREY
MONTEREY, CALIFORNIA

Directors Present: Director Carbone, Director Dallas, Director Edelen, Director Roberson,
Director Rubio, President Kampe
Directors Absent: None

Staff Present: Executive Director Cullem, Legal Counsel Freeman, Clerk Romero

CALL TO ORDER

President Kampe called the meeting to order at 7:02 pm.

ROLL CALL

All Directors present.

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

Executive Director Cullem said he would like to meet with each Director’s City Council to give
an update on the status of the water supply project.

PUBLIC COMMENTS
• Tom Rowley, Monterey Peninsula Taxpayers Association (MPTA), said that the news
article by Jim Johnson was very misleading about the Authority’s position and
suggested that the Authority make a statement or press release to clarify the false
information in the media.

• Michael Baer, resident, presented a picture of California American Water’s (Cal Am)
depictions of the Monterey Peninsula Water Supply Project (MPWSP) slant wells from
the Monterey Bay National Marine Sanctuary (MBNMS) Draft Environmental Impact
Report (DEIR), June 2014, versus the picture of the slant well as depicted in the DEIR,
March 2017, and showed the differences.

PUBLIC COMMENT:

None

On a motion by Director Rubio seconded by Director Carbone, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Approved the Consent Agenda:

AYES: 6 DIRECTORS: Rubio, Edelen, Kampe, Dallas, Roberson, Carbone

NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None
 MPRWA Minutes Thursday, March 8, 2018

1. Approve Minutes from September 18, 2017

Action: Approved

2. Approve Minutes from December 14, 2017

Action: Approved

3. Approve Minutes from January 11, 2018

Action: Approved

4. Approve Minutes from February 15, 2018

Action: Approved

5. Approve and File Authority Checks Through February 28, 2018

Action: Approved

6. Receive Report and Adopt Resolution 2018-01 Approving a Conflict of Interest Code for the
Water Authority
Action: Received report, Adopted Resolution 2018-01

7. Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project, Status of Test Well Operation and Pipeline Construction
Action: Received update

***End of Consent Agenda***

PUBLIC COMMENT ON CLOSED SESSION:

• Michael Baer said he hopes that after the closed session the public will know the
Authority’s stance on the MPWSP.

• Tom Rowley, MPTA, said that there was a hearing on the water supply charge which is
affecting all residents and property taxes, particularly the 8.2% user fee.

***Adjourn to Closed Session***

Adjourned to closed session at 7:15 pm.

8. Pursuant to Government Code 54956.9. Conference with Legal Counsel – Existing Litigation:
In the Matter of the Application of California-American Water Company (U210W) for Approval
of the Monterey Peninsula Water Supply Project and Authorization to Recover All Present and
Future Costs in Rates, California Public Utilities Commission No. A.12-04-019
Action: Received update on the status of negotiations, will receive direction for Staff
under item #9

Adjourned to open session at 8:30 pm.

Don Freeman announced that the Directors received an update regarding existing litigation
during closed session and will receive direction from Special Legal Counsel under item #9.

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, March 8, 2018
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 MPRWA Minutes Thursday, March 8, 2018

AGENDA ITEMS

9. Receive Report on the Joint Case Management Statement Submitted to the CPUC and on the
Case Management Conference, and Provide Staff Direction on Supporting a CDO Modification
Incorporating a Potential Pure Water Monterey Expansion
Action: Received report; discussed; Approved support of a CDO modification
incorporating a potential Pure Water Monterey expansion and affirmed the Authority’s
position to have the CPCN issued between June and September 2018 as planned

Executive Director Cullem said there is a petition to request that the State Water Resources
Control Board (SWRCB) add to the milestones which would allow an expansion of Pure Water
Monterey (PWM). Staff’s position is that this expansion opens the possibility if there is a delay
in the desal plant start date, there would be water available to get out from under the Cease
and Desist Order (CDO). He explained that the Authority should decide if they support the
expansion of PWM and want to co-apply for the expansion, which is Staff’s recommendation.
The other option would be to not take any action, or comment after the petition is submitted. He
also clarified for the public that there is a willingness to delay the CPCN for the MPWSP under
the condition that the CDO is modified as proposed, to determine the feasibility of public
ownership of the water company and to negotiate an agreement between the settling parties,
and in no way implies that the Authority does not wish to move forward with the desal project.

PUBLIC COMMENT:

• Tom Rowley, MPTA, said that PWM hasn’t given an update on the project or given the
true cost, and it has been understated by the MPWMD.

• Fred Meuer suggested that the Authority’s position be very clear and that there is no
delay in getting water to the consumers. He said there should be a very clear “drop
dead” date for the SWRCB to act. He said both projects should be done to the
maximum extent that they can, any potential of water the portfolio should be pursued.

Director Edelen agreed with Mr. Meuer’s comments and said that the SWRCB needs to see
that the Authority is pursuing all options. Director Rubio said that there is a specific timeline in
the petition for deadlines that must be met, such as the CPCN and the CDO deadlines.

On a motion by Director Rubio, seconded by Director Carbone, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Approved Supporting a CDO
Modification Incorporating a Potential Pure Water Monterey Expansion:

AYES: 6 DIRECTORS: Rubio, Edelen, Kampe, Dallas, Roberson, Carbone

NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, March 8, 2018
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 MPRWA Minutes Thursday, March 8, 2018

Don Freeman asked for the Directors to affirm that they want the CPCN to be issued in the
timeframe of June and September 2018.

Motion by Rubio, seconded by Edelen, affirmed the Authority’s position to have the CPCN
issued in 2018, between June and September as planned:

AYES: 6 DIRECTORS: Rubio, Edelen, Kampe, Dallas, Roberson, Carbone

NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

Don Freeman asked the Directors to affirm that in the event the SWRCB accepts the
modifications to the milestones to allow for the expansion of PWM, the Authority would consider
at a future meeting date, the timing of the issuance of the CPCN, contingent on significant
progress being made towards a settling party agreement.

Director Roberson asked to clarify how “significant progress” would be measured on a

settlement agreement. Director Rubio said the Authority would re-evaluate the progress at a
later date. Director Roberson suggested holding off on making a motion on this issue for now.

No further discussion on this item, no further motions on the CPCN issuance were made.

10. Receive Report, Discuss, and Provide Staff Direction on Authority Work Plan for the Balance of
FY 2017-2018 and for FY 2018-2019
Action: Continued

PUBLIC COMMENT:

• Tom Rowley, MPTA, said that the main priority of the Authority Work Plan is still
securing a water supply. He said that the cost of water and the lack of water for housing
should be part of the Authority’s discussion.

ADJOURNMENT

Meeting adjourned at 8:55 pm.

ATTEST:

Nova Romero, Clerk of the Authority MPRWA President

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, March 8, 2018
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 M I N U TE S
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Director's Meeting
7:00 PM, Thursday, April 12, 2018
COUNCIL CHAMBERS
580 PACIFIC STREET, MONTEREY
MONTEREY, CALIFORNIA

Directors Present: Director Carbone, Director Edelen, Alternate Director Peake, Director
Roberson, Director Rubio,
Directors Absent: Director Dallas, President Kampe

Staff Present: Executive Director Cullem, Legal Counsel Freeman, Clerk Romero

CALL TO ORDER

Vice President Rubio called the meeting to order at 7:00 p.m.

ROLL CALL

President Kampe and Director Dallas were absent. All other Directors and Alternate Director
Peake present.

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

Executive Director Cullem announced that the link to the Monterey Peninsula Water Supply
Project (MPWSP) Environmental Impact Report/Environmental Impact Statement (EIR/EIS) has
been posted at https://montereybay.noaa.gov/.

PUBLIC COMMENTS

• Tom Rowley, Monterey Peninsula Taxpayers Association (MPTA), said he is

disappointed with the judge's ruling to allow a user fee of 8.25% charges from the water
district.

• George Riley, Public Water Now (PWN), said that his group will be responding to the
EIR and will focus on discharge and sub surface intake.

• Michael Warburton, Public Trust Alliance (PTA), said he attended the meeting in Marina
and heard the City of Marina defending its water supply.

• Michael Baer, said he attended a meeting in Marina and recommended that the Mayors
watch a video of the meeting to hear the comments. He said that the PWN petition will
have enough signatures to be on the November ballot to vote for public ownership of
water.

• John Narigi, Monterey Peninsula Coalition of Businesses, said that California Public
Utilities Commission (CPUC) and Monterey Bay Marine Sanctuary (MBMS) found that
the MPWSP would have no significant impact to the environment or the Salinas
Groundwater Basin. He said that this should make it clear to the Authority to continue to
support the project.
 MPRWA Minutes Thursday, April 12, 2018

CONSENT AGENDA

1. Approval of Minutes from March 8, 2018

Action: Continued

The Board unanimously recommended the approval of minutes for continuance because they
were not ready at the time of the meeting.

2. Approve and File Authority Checks Through March 31, 2018

Action: Approved

On a motion by Director Edelen, seconded by Director Carbone, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Approved Consent Item #2:
AYES: 5 DIRECTORS: Carbone, Edelen, Peake, Roberson, Rubio
NOES: 0 DIRECTORS: None
ABSENT: 2 DIRECTORS: Dallas, Kampe
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

3. Adoption of Resolution 2018-02, Approving an Extension of the Contract for Executive Director
Services with Cullem Management Services LLC at a Price Not-to-Exceed $90,000 for the
Period July 1, 2018 to June 30, 2019
Action: Removed from consent; discussed; adopted resolution 18-02 and approved
contract for Executive Director Services with Cullem Management Services LLC

A request was made to remove items 3,4, 5, 6, and 7 from consent to discuss.

Director Roberson said he is not ready at this time to vote on the budget until more research is
done. He suggested the formation a subcommittee to take a closer look at the budget and see
what changes can be made to reduce costs. He said he wants the Authority to avoid mission
creeping, and said the Authority has become more of a legal water expert instead of a public
advocate. Director Edelen concurred with Director Roberson and agrees that a subcommittee
consisting of Executive Director Cullem, Director Roberson and another Director to review the
budget is a good idea. Vice President Rubio agreed that perhaps the contracts for legal
services and clerk services should have the wording “up to” $35,000 and add language to
reduce payments during the slower times instead of fixed rates. Executive Director Cullem said
that having legal counsel on retainer saves money in the long run due to the high cost of hourly
rates for lawyers. He said that clerk and financial services could be reduced to cut back on
costs.

4. Adoption of Resolution 2018-03, Approving Donald G. Freeman as Legal Counsel through June
30, 2019 and Authorizing the Authority President to Execute a Contract Extension with Perry
Freeman at a Price Not-to-Exceed $30,000
Action: Removed from consent; discussed; adopted resolution 18-03 and approved
contract for Legal Services with Donald Freeman

Discussed under item #3.

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, April 12, 2018
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 MPRWA Minutes Thursday, April 12, 2018

5. Adoption of Resolution 2018-04 Approving an Extension of the Agreement with the City of
Monterey for Clerk of the Board, Administrative, and Financial Support Services, and
Authorizing the Authority President to Execute a Contract Extension with the City of Monterey at
a Price of $35,000 for the Period July 1, 2018 to June 30, 2019
Action: Removed from consent; discussed; adopted resolution 18-04 and approved
contract for Clerk of the Board and Financial Services with the City of Monterey

Discussion under item #3.

6. Receive FY 2017-2018 Budget Update, Adopt a $290,000 Budget for FY 2018-2019, and
Approve a Request for FY 2018-2019 Member Contributions
Action: Removed from consent; discussed; formed a subcommittee to review the
budget; received report

Executive Director Cullem suggested the Authority adopt a "draft" budget with the option to
make changes to the budget in the future. He said he needs to have a budget when asking the
cities for contributions. Director Roberson suggested adopting a $145,000 draft budget. Vice
President Rubio suggested adopting a $155,000 draft budget but to ask the cities for
contributions based on a $290,000 budget. Director Peake said that the $290,000 budget
should be presented when requesting fair share contributions and said he is concerned about
the County's budget deficit. Director Edelen said it's easier to give each city a rebate later if the
Authority doesn’t use all of the money. Director Carbone suggesting writing a letter to the
County requesting that cannabis tax money be used for MPRWA fair share contribution to
complete its mission for a sustainable water supply.

PUBLIC COMMENT:

• Tom Rowley, MPTA, said that 1/3 of Cal Am ratepayers are not represented because
the County does not show up to the meetings to represent them. He added that money
is being wasted by the MPWMD and the Authority is a cost effective organization.

• Michael Baer says that he agrees that the County should be represented on the board.
He voiced support of the preliminary budget. He suggested that the Authority spend
$10,000 on a preliminary feasibility study on the public ownership of water instead of on
Geosyntec.

• George Riley, PWN, said that the Authority should continue as a public leadership entity
and stay out of the technical aspects. He said the Authority’s strengths are in the policy
and said that the Authority can save money by not hiring consultants for technical work.

On a motion by Director Edelen, seconded by Director Roberson, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Approved Consent Items 3, 4, 5, and 6,
and Approved the Formation of a Subcommittee to Review the FY 2018-19 budget:
AYES: 5 DIRECTORS: Carbone, Edelen, Peake, Roberson, Rubio
NOES: 0 DIRECTORS: None
ABSENT: 2 DIRECTORS: Dallas, Kampe
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, April 12, 2018
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 MPRWA Minutes Thursday, April 12, 2018

7. Receive Copy of CPUC Filing Made by Water Authority Special Counsel on Behalf of the
Authority in Opposition to a MCWD Motion to Refer Groundwater and Harm Issues Directly to
the SWRCB
Action: Removed from consent; discussed; received report

Don Freeman gave a brief explanation of the motion filed by Russ McGlothlin regarding the
opposition of Marina Coast Water District’s motion to refer groundwater and harm issues to the
State Water Resources Control Board. He said that the main reason for the opposition is that it
would delay of the MPWSP.

PUBLIC COMMENT:

• Michael Baer said that he read the responses to the EIR on water rights and said he is
disappointed to see the Authority filing a motion against MCWD to have the SWRCB
take another look at water rights.

• Michael Warburton said that this is a serious item and people are playing fast and loose
with water rights.

The Board unanimously accepted and received the report.

AGENDA ITEMS

8. Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP) and the Status of Test Slant Well Operations
Action: Received update; discussed

Chris Cook, California American Water (Cal Am), gave presentation on the MPWSP schedule.

PUBLIC COMMENT:

• Tom Rowley, MPTA, said that Deep Water Desal will be giving a presentation and
answering questions at an upcoming luncheon. He added that Deep Water Desal could
be moving forward with its project now that more testing has been done which means
there could be further diversification of the portfolio. He also said that a recent
presentation by Paul Scuito on Monterey Water One did not show the true costs of
GWR because it didn’t include the transportation of water.

• Michael Warburton said that a lecture was given at the Aquarium about the impacts on
the environment with desal and long term impacts aren't known on the aquatic
resources.

• Michael Baer asked if Cal Am will continue to provide monthly reports and questioned if
plans are being made to mitigate traffic for the pipe bridge.

• Fred Meurer said that the EIR approval shows that federal government came to the
same conclusion that the MPWSP is the way to go and commended the Authority for
keeping the project going. He said that in 2012 the original water desal project was
supposed to be in Marina but the project fell apart. He added that the genesis of the
Authority was to be a voice for the people.

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, April 12, 2018
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 MPRWA Minutes Thursday, April 12, 2018

Chris Cook and Ian Crooks of Cal Am answered questions from public comment.

9. Receive Report, Discuss, and Provide Staff Direction on Authority Work Plan for the Balance of
FY 2017-2018 and for FY 2018-2019
Action: Continued

The Board unanimously continued this item to a future meeting due to time constraints.

ADJOURNMENT

Meeting adjourned 8:27 pm.

ATTEST:

Nova Romero, Clerk of the Authority MPRWA President

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, April 12, 2018
5
Monterey Peninsula Regional Water Authority Date: May 10, 2018
Agenda Report Item No: 3.

FROM: Executive Director Cullem

SUBJECT: Approve and File Authority Checks Through April 30, 2018

RECOMMENDATION:

It is recommended that the Authority approve and file the accounts payable payments
made during the period April 1 through April 30, 2018, with total payments for the above
referenced period of $64,633.28 from the general fund account and authorize the
Directors to sign for such checks.

DISCUSSION:

At its meeting on September 12, 2013, the Authority Board approved a staff
recommendation to provide the Directors a listing of financial obligations since the last
report for inspection and confirmation. Each invoiced expense has been reviewed and
approved by the Executive Director and Finance personnel, as well as by the Water
Authority Treasurer and/or President as appropriate, prior to payment to insure that it
conforms to the approved budget.
The following checks are hereby submitted to the Authority for inspection and
confirmation:
• $2,500 – Don Freeman, April retainer
• $520 – AMP Media, Invoice 1873 and 1895
• $44,698.34 – Brownstein, Hyatt, Farber, Schreck, Invoice 714000 Services
through 2/28/18
• $4,712.50 – Cullem Mangement Services, LLC, March services
• $12,202.44 - Brownstein, Hyatt, Farber, Schreck , Invoice 715817 Services
through 3/31/18

The bank balances as April 30, 2018, is sufficient cover the above checks, therefore
staff is recommending approval.

BUDGET UPDATE:
None

ATTACHMENTS:
None
Monterey Peninsula Regional Water Authority Date: May 10, 2018
Agenda Report Item No: 4.

FROM: Executive Director Cullem

SUBJECT: Approve a Certificate of Appreciation for Water Authority Clerk of the

Board Nova Romero

RECOMMENDATION:

The Executive Director recommends that the Water Authority Board approve a
Certificate of Appreciation to Nova Romero for her years of dedicated service to the
Community and to the Water Authority as Clerk of the Board since 2016.

DISCUSSION:

Nova has served as Clerk of the Board since January 1, 2016. Through her technical
competence, personal dedication, and ability to juggle her responsibilities to the City of
Monterey as well as to the Authority, she has made an invaluable contribution to the
successful execution of the Water Authority mission over the last nearly 2 1/2 years.

Nova has accepted a promotion to the Hollister City Clerk's office. Though she will be
sorely missed, we wish her every success in her future endeavors.

ATTACHMENTS:

Certificate of Appreciation for Nova Romero

№06/12
MONTEREY PENINSULA REGIONAL WATER
AUTHORITY

CERTIFICATE OF APPRECIATION
FOR OUTSTANDING SERVICE

Whereas, The Board of Directors of the Monterey Peninsula Regional Water

Authority hereby wishes to express its heartfelt appreciation to Nova Romero for
outstanding service to the community as Clerk of the Board of the Monterey
Peninsula Regional Water Authority from January 1, 2016 to May 4, 2018,
2018 and

Whereas, Nova has consistently provided outstanding support for the

Authority in managing administrative and Clerk of the Board services,
services and
coordinating, scheduling,, and recording all meetings of the Board and of the
Technical Advisory Committee, and,

Whereas, Nova will end her service with the Water Authority on May 4,
4 2018
to take a position of increased responsibility with the City of Hollister,

Now Therefore, The Board of Director’s wishes to commend Nova Romero for
her dedicated service to the Water Authority and to this community and wishes her
continued success in all her future endeavors.

___________________ _____________________ _____________________

Bill Kampe, President Ralph Rubio, Vice-President Steve Dallas,, Director

___________________ _____________________ ______________________

Jerry Edelen, Director Clyde Roberson, Director Mary Anne
nne Carbone,
Carbo Director

____________________
Jim Cullem, Executive Director
Monterey Peninsula Regional Water Authority Date: May 10, 2018
Agenda Report Item No: 5.

FROM: Executive Director Cullem

SUBJECT: Receive Report, Discuss if Necessary and Provide Direction to Staff if

Required on Issues Discussed at the Settlement Meetings

RECOMMENDATION:

It is recommended that the Water Authority receive an update on issues discussed at

the settlement (collaborative) meetings with the MPWSP intervening parties, and
discuss and provide direction if required.

DISCUSSION:

As approved by the Board on Dec 14, 2017, facilitator Marci DuPraw was retained to
participate in "settlement meetings" and assist the interveners in CPUC Proceeding
A.12.04.019, the Monterey Peninsula Water Supply Project (MPWSP), with resolving
remaining conflicts and disagreements. The settlement meetings have previously been
referred to as "collaboration" meetings. Although the MPRWA will not be a party to a
future settlement agreement, the Authority initiated the effort in hopes of insuring the
most timely and cost-effective route to a new water supply in general and a desal facility
in particular.

Day-long meetings with 23 intervenors were held on Jan 10, Jan 25, and Feb 13, 2018.
The first meeting focused on clarifying the key interests (vs positions) of the intervening
parties, establishing ground rules for discussion, and encouraging the parties to submit
specific proposals that would address their concerns. Subsequent meetings focused on
remaining opposition to the desal plant by Marina and the Marina Coast Water District
(MCWD) as well as several other intervenors. Marina community values, retention of
the Castroville Community Services District water purchase agreement, impact of the
CPUC schedule on the CDO milestones, and potential modifications to the milestones,
were also identified as key interests.

Formal facilitated meetings ended on Feb 13 without a settlement. However, since a

great number of issues were discussed cordially, relationships were formed which have
allowed the MPRWA staff and others to continue informal discussions in the hopes of
encouraging resolution of future conflicts without resorting to timely and expensive
litigation.

№06/12
Staff will propose at the June meeting that the Authority Board approve letters to the
Council of the City of Marina and to the Board of the Marin Coast Water District
expressing MPRWA disappointment that a settlement agreement could not be reached
and our hope that a settlement ( fair to all parties) may eventually emerge as the
MPWSP moves through the CPUC process.

FISCAL CONSIDERATIONS:

Unfortunately, our effort to facilitate a settlement agreement was very costly in terms of
Special Counsel costs, so we will have to carefully ration the remaining FY 2017-2018
budget to be sure Special Counsel is funded for the upcoming CPUC proceedings.
None-the-less, staff believes the settlement effort was worth the cost, as it held the
potential to save substantial costs and time for Cal Am customers were it possible to
resolve differences without litigation.

ATTACHMENTS:

None
Monterey Peninsula Regional Water Authority Date: May 10, 2018
Agenda Report Item No: 6.

FROM: Executive Director Cullem

SUBJECT: Receive an Update on the Summary Project Schedule for the Monterey
Peninsula Water Supply Project (MPWSP) and the Status of Pipeline
Installation

RECOMMENDATION:

It is recommended that the Water Authority Board receive a report from Cal Am on the
latest "Summary" MPWSP schedule and on the status of the pipeline construction.

DISCUSSION:

Cal Am's most recent Summary Monterey Peninsula Water Supply Project (MPWSP)
schedule will be presented at the meeting.

Cal Am also has reported that it is currently installing the last mile of 36” pipe. The pipe
bridge contractor is constructing support structures and planned on placing girders
spanning HWY 68 in early April. Overall pipeline install and street repair is expected to
be complete in June. Commissioning would follow in next several months.

Note that regular updates on the MPWSP are available at Cal Am's project web site:
www.watersupplyproject.org .

ATTACHMENTS:

None

№06/12
Monterey Peninsula Regional Water Authority Date: May 10, 2018
Agenda Report Item No: 7.

FROM: Executive Director Cullem

SUBJECT: Receive Update, Discuss, and Provide Staff Direction on the

Deep Water Desal Project

RECOMMENDATION:

It is recommended that the Board of the Monterey Peninsula Regional Water Authority
(MPRWA) receive an update on the proposed Deep Water Desal (DWD) Project and
provide staff direction.

DISCUSSION:

On January 12, 2017, both DWD and PML desal projects provided full presentations on
the status of their respective projects. Since DWD is the most advanced in its design
and approval process, the Water Authority has requested an update on that project.

Mr. David Armanasco accepted an invitation to provide a 30 minute update followed by

questions at the May 10, 2018 Water Authority Board meeting.
Specific information was requested as follows:
- How do you plan to get support/approval for your project source water
prior to exhausting all alternatives for sub surface intake?
- What are the overall project features (eg: data center)?
- What is the desalination configuration and facilities layout?
- Who are potential product water purchasers?
- What is your Intake/Outfall strategy?
- What is the CEQA/NEPA status and timeline?
- What hurdles do you see and what are the contingencies?
- What is status of discussions with state permitting agencies?
- What is current financial status and total investment required?
- What is the overall schedule for delivery of water to end user?

Additional information about Deep Water Desal can be found on the project web site at
www.deepwaterdesal.com.

ATTACHMENTS:

None

№06/12
Monterey Peninsula Regional Water Authority Date: May 10, 2018
Agenda Report Item No: 8.

FROM: Executive Director Cullem

SUBJECT: Receive Report, Discuss, and Provide Staff Direction on Authority Work
Plan for the Balance of FY 2017-2018 and for FY 2018-2019.

RECOMMENDATION:

Edit and update the MPRWA Workplan Priority Ranking priority adopted by the Board
on June 6, 2016 and revised by the Board on June 8, 2017.

DISCUSSION:

A draft MPRWA Workplan Priority Ranking for the balance of FY 2017-2018 and FY
2018-2019 is at attachment A. These priorities should be considered in light of available
resources, expected sunset date of the Authority, and the mission statement of the JPA
which states in part:
"The purpose of this Agreement is to establish a public entity separate from its Members
to jointly exercise some or all of the foregoing common powers, as deemed necessary
by the Authority, to: (1) ensure the timely development, financing, construction,
operation, repair, and maintenance of one or more Water Projects; and (2) ensure that
the governance of such Water Projects includes representation that is directly
accountable to the Cities' water users."

ATTACHMENTS:
A-Draft Table of Work Plan Priorities

№06/12
 ATTACHMENT A

MPRWA Workplan
May 10, 2018

Item Main Organizations Situation Priority

Level
Current
1 Support CDC Milestone mods to include MOW; MPWMD; MPRWA; Obstacles at SWRCB 1
PWM Phase 2 options PCL
2 Support Issuance of CPCN CalAm; MPRWA; Business Expecting CPUC action in Sep. - Oct 1
Coalition
3 Act as needed to Legal Challenges from Multiple parties Filings in process with CPUC, SWRCB; 2
various parties eventually at CCC
4 Ongoing public agency collaboration, e.g. MPRWA; MPWMD; MOW Contain costs; monitor water usage; focus on 1
Governance Committee water supply; adapt to events

5 Obtain a cost of water estimate CalAm; WPWMD; MOW; Develop basis to compare PWM expansion as 1
MPRWA interim to Desal only plan.

Future
6 Post MPWSP water allocation plan MPWMD; MPRWA Likely to require an EIR, therefore a long lead 1
task
Completed
7 Finalize brine discharge agreement Surfrider; CalAm; MPRWA Completed 2

8 Finalize Return Water agreement CalAm; CSIP Completed 2

9 Restart Test Well CCC; CalAm; MPRWA Restarted 1

10 Extend Cease and Desist Order CalAm; MPRWA; WPWMD Extension granted 1

11 Finalize WPA with Castroville CCSD; MPWMD; MCWRA Agreement Complete 3

12 Gain CPUC approval for GWR pipeline, WPA MOW; CalAm; MPWMD; Approval issued on 09/15/2016 1
MPRWA
13 Support GWR NEPA as basis for grants MOW; CalAm; MPWMD; Done 2
MPRWA
14 Complete EIR/EIS for Desal CPUC; CalAm Issued; no further comment planned 1

Parked
15 Extend NOAA mitigation agreement for CalAm; NMS; NOAA 3
Carmel River
16 Settlement talks re Harm, Rights MPRWA; MPWMD; MOW; Terminated - no current prospect of 1
Marina, MCWD; CalAm agreement

17 Contribute to Settlement Agreement CalAm; MPWMD; MPRWA No longer an active process. 1

Update
18 Obtain various city / county permits after CalAm; Cities; MPRWA Will be required for pipelines after CPCN 1
CPCN
Priority classes
Direct support of mission; MPRWA brings core community perspective 1
Vital to success; other parties bring primary expertise. MPRWA adds community values perspective 2
Of interest as part of the overall project; other parties bring higher engagement and expertise 3
Monterey Peninsula Regional Water Date: 10 May 2018

Authority Item No: 8

Agenda Report

FROM: Executive Director Cullem

SUBJECT: Receive Report on Budget Options, Discuss, Adopt Budget for FY 2018-
2019, and Provide Staff Guidance- Kampe

RECOMMENDATION:

It is recommended that the MPRWA Board Receive an update on budget options for FY
2018-2019, discuss, adopt the budget, and provide staff guidance.

DISCUSSION:

The Board adopted a preliminary no-change budget for FY 2018-2019 as recommended

by the Executive Director. The preliminary budget was used to advise contributing
members of their maximum fair-share contribution for the new fiscal year.

However, staff remains concerned that one or more members will be unable to meet
their full fair-share in the coming year, and that in turn impacts the budget and
contributions from other members.

Accordingly, the Executive Director has prepared a range of budget options from a high
of $350,000 to a low of $150,000 (Attachment A). Options below the staff recommended
$290,000 will require progressive cuts in staff and legal services and the sunset of the
Technical Advisory Committee (TAC). Below $210,000 will also require a change in
meetings of the Authority from monthly, to an average of bi-monthly.

If a low budget is adopted, and Water Authority activities pick up during the coming
fiscal year to the point that the additional funding will be required, the Executive Director
will return to the Board for approval of supplemental funding requests mid-year.

FISCAL IMPACT:

No reserve funds remain and no year-end surplus is expected in FY 2017-2018.

Accordingly, the Authority will be able to operate only on funding collected from
members in FY 2018-2019.

ATTACHMENTS:
A- Budget Options for FY 2018-2019

№06/12
 ATTACHMENT A

BUDGET OPTIONS for FY 2018-2019

EST. OPERATING EXPENSES $ 350,000 $290,000 $250,000 $210,000 $170,000 $150,000

Administration and Clerical Services

Principal Office of Authority (Mont) 5,000 5,000 5,000 5,000 4,000 4,000

Clerk of Board (Monterey) 24,000 24,000 20,000 12,000 12,000 12,000

Financial Services (Monterey) 6,000 6,000 6,000 6,000 4,000 4,000

Executive Director (Monterey) 90,000 85,000 75,000 60,000 55,000 50,000

Miscel Admin Expenses 500 500 500 500 500 500

Legal Services

Board Counsel (Freeman) 30,000 30,000 24,000 18,000 12,000 12,000

Special Counsel (Brownstein) 150,000 100,000 80,000 70,000 60,000 50,000

Contract Services

Public Outreach 0 0 0 0 0 0

Audit Services (Kaufman) 8,000 8,000 8,000 8,000 8,000 8,000

Televised Meetings (AMP) 3,000 3,000 3,000 2,000 1,000 1,000

Contract Services and Studies 11,000 10,000 10,000 10,000 3,000 0

Insurance 7,500 7,500 7,500 7,500 7,500 7,500

Travel Expenses 5,000 1,000 1,000 1,000 1,000 1,000

Contingency 10,000 10,000 10,000 10,000 2,000 0

MEETING FREQUENCY Month Month Month Month bi-Month bi-mo

OTHER 1/2 TAC No TAC No TAC No TAC