MPRWA Regular Meeting Agenda Packet 04-25-13 PDF

Agenda
Monterey Peninsula Regional Water Authority (MPRWA)

Regular Meeting

7:00 PM, Thursday, April 25, 2013
Council Chambers
City of Carmel-By-The-Sea
7th Avenue & Monte Verde
Monterey, California

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.

APPROVAL OF MINUTES

1. April 11, 2013

AGENDA ITEMS

2. Receive Report on April 25, 2013 Workshop Regarding Cal-Am's California Public Utilities
Commission Application A.1204019 (Burnett) -

3. Receive Update Report from Cal Am Regarding Compliance with Conditions for Authority
Support of Monterey Peninsula Water Supply Project (Information Only)

4. Receive Report on April, 22, 2013 Governance Committee Meeting (Burnett)

5. Review Public Outreach Program and Adopt Budget for Fiscal Year 2013-2014 (Reichmuth)

ADJOURNMENT

The Monterey Peninsula Regional Water Authority is committed to include the disabled in all of
its services, programs and activities. For disabled access, dial 711 to use the California Relay
Service (CRS) to speak to staff at the Monterey City Clerks Office, the Principal Office of the
Authority. 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 staff at the Monterey City Clerks Office at
(831) 646-3935 to coordinate use of a device or for information on an agenda.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 Clerks 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.

MI NUTES
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Regular Meeting
7:00 PM, Thursday, April 11, 2013
COUNCIL CHAMBERS
FEW MEMORIAL HALL
MONTEREY, CALIFORNIA

Directors Present: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala

Directors Absent:

None

Staff Present: Executive Director, Legal Counsel, Clerk of the Authority

ROLL CALL

President Della Sala called the meeting to order at 7:02 p.m. and all members were present.
PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

President Della Sala invited reports from Directors and staff and had no requests to speak.
PUBLIC COMMENTS

President Della Sala invited comments from the public for items not on the agenda. David
Armanasco representing Deep Water Desal provided a brief update indicating they have
responded to requests from the California Public Utilities Commission (CPUC) to meet and
provide information as an alternative project to the Cal Am Monterey Peninsula Water Supply
Project (MPWSP) Environmental Impact Report (EIR). He also indicated that DWD will be
submitting a project description simultaneously to the CPUC and the State Lands Commission.
With no further requests to speak, President Della Sala moved to the first agenda item.
APPROVAL OF MINUTES

1. February 14, 2013
Action: Approved

On a motion and carried by the following vote, the Monterey Peninsula Regional Water
Authority approved the minutes of February 14, 2013.
AYES: 6 DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio,
Della Sala
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

2. March 14, 2013
Action: Approved

On a motion and carried by the following vote, the Monterey Peninsula Regional Water
Authority approved the minutes of March 14, 2013.
MPRWA Meeting, 4/25/2013 , tem No. 1., tem Page 1, Packet Page 1
MPRWA Minutes Thursday, April 11, 2013

Monterey Peninsula Regional Water Authority
Regular Meeting Minutes - Thursday, April 11, 2013
2
AYES: 6 DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio,
Della Sala
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

AGENDA ITEMS

3. Receive Report From The Monterey Regional Water Pollution Control Agency and The
Monterey Peninsula Water Management District Regarding The Ground Water Replenishment
Project (Israel, Stoldt)
Action: Received Report and Discussed

a. Review Scopes of Work for Feasibility and CEQA Analysis

Monterey Peninsula Water Pollution Control Agency (MRWPCA) General Manager Keith Israel
introduced the item and acknowledged the support the Monterey Peninsula Water Management
District has provided, specifically with regards to funding. He spoke to the goals of the Ground
Water Replenishment (GWR) project of bringing an additional 3,500 acre foot of water into the
Seaside Basin. He then reported on the three components to the project; 1) Bringing source
water to facility, 2) Reverse Osmosis Treatment and 3) Pumping water into Seaside Basin. The
anticipated cost for the program is $2,000 to $2,600 per acre foot of water. He provided a
handout with the projected schedule which is outlined below:
CEQA to be completed by Second Quarter 2014.
Monitoring test well completed by end of 2013.
Two phase feasibility study to address sizing, which will complete phase 1 by June 2013
to be able to provide concept to partners (farmers and city of Salinas) regarding the
source of water under consideration.
Continue to work on pilot tests in 2013
Design work to be completed in 2014,
Design-Build staring in 2015 to be completed by end of year
Mr. Israel then reported the MRWPCA passed the budget authorizing various components of
the project and indicated that public outreach is the next major hurdle and they are working with
an independent consultant for assistance. The current focus is trying to understand the key
issues from the stakeholders. He then invited agencies to coordinate public outreach efforts to
maximize the use of the dollars available.

Mr. Israel then spoke about the public workshop being sponsored by the California Public
Utilities Commission on June 12, 2012 to determine criteria for Ground Water Replenishment.
He also spoke about conducting a water feasibility study to determine water rights, how much
water is needed and how to distribute it. He identified additional sources of potential water
which could be treated and used such as produce wash water, Peninsula and Salinas storm
water flows, drain water and unused waste water.

3
Monterey Peninsula Water Management District General Manager Dave Stoldt then presented
a report highlighting things the District is doing separately to support the GWR project and
touched on the GWR Go/No Go criteria that is being developed. He reported that the District
intents to reach out to the three intervening parties to ensure they understand the criteria prior
to the cost workshop. He reported that the model for the first draft of cost sharing needs some
tweaking and the District is considering taking a more significant role. Mr. Stoldt listed the
following hurdles the District is trying to work through:
Storage agreement - must be modified from those who have current rights.
Develop water purchase agreement with assurances that will work for Cal Am
Address the debt equivalence issues.
Policy consideration for GWR, there are four key policy areas state wide, 3 from the
water resources control board. Trying to forge a nexus between what they want and how
it is a solution, and how it interacts with the CDO.
AB 32 related to energy use.
Need for hospitality-specific public outreach

Both Mr. Stoldt and Mr. Israel answered questions from the Directors. Director Edelen
suggested a press conference, and coordinating a trip to the Orange County facility for media
related personnel and encouraged arming them with complete and accurate information about
successful programs.
Director Rubio spoke in support of public outreach and suggested bringing back cases of water
for distribution as samples by the public. He then questioned the completion of the scoping of
the EIR and requested consideration of a full scale EIR for the GWR project. He questioned the
recycled water project if it would supply enough water to have a recycled component for
landscaping. Mr. Israel responded that the Marina Coast Water District is ready to talk specifics
on the use of Recycled water and it is targeted as an additional source of water.

Director Pendergrass spoke to the difference in perspective after a trip to the Orange County
facility and spoke to the positive impact it makes to perspective of the project and he
encouraged anyone that is available to tour the facility. Director Kampe questioned the process
that astronauts use to clean water during missions and Mr. Israel confirmed it is the same
process.
Vice President Burnett spoke to the support of the interveners testimony, including the
Planning and Conservation League, who indicated that they would be willing request a partial
relaxation of the Cease and Desist order if it moved the GWR project forward. The June 12,
2012 CPUC meeting will help establish the go-no go criteria and Vice President Burnett, as
Chari of the TAC will vet through the TAC and other interveners before bringing it back to the
Directors.

President Della Sala invited public comments on the item. Nelson Vega questioned the water
rights of the agricultural community and requested an explanation of the ownership of the
Seaside Aquifer. He also questioned why there has been no discussion on the facility that
would be used to filter and treat the water. He suggested that water be sold at different rates for
those that have different uses of water and urged the Directors to support the lowest cost water
supply. With no further requests to speak, President Della Sala closed public comment.

4
Mr. Israel spoke to Mr. Vegas comments that the MRWPCA is looking for additional sources of
water to avoid legal conflict and that conversations with the agricultural community have been
positive. The goal is proposing a project that meets that need by working with multiple sources
of water to solve the water rights issue. Member Stoldt responded to Mr. Vegas question about
cost and indicated that the small desalination facility will cost approximately $3,400 per acre
foot and the GWR project costs could be approximately $2,400 per acre foot. He then said the
cost of the desalination facility plus the GWR project is the most cost effective option and that
there is an analysis being done to illustrate and will be presented to the public. He then spoke
to the question about control of the aquifer and said that storage is allocated based on what the
Adjudication Judge assigned to existing pumpers. If storage is going unused, it can be made
available to others. The Water Master has a storage recovery agreement, which is something
that can be modified. Would look to the current rights holders and request agreement. Lastly he
spoke to the comment about selling water at different rates and he said there is a legal
mechanism to allow the highest bidder purchase, however, the bidding process works against
all models in California. There is an opportunity to recover the different costs by charging a
connection feel, but not through cost adjustment. There will come a time that water will need to
be allocated differently to the different jurisdictions.

4. Receive Report Regarding The Status of the Monterey Peninsula Regional Water Management
District Back up Projects (Stoldt)
Action: Received Report and Discussed

Mr. Stoldt presented the report for this item and indicated that the Request for Qualifications
(RFQ) for a desalination facility was issued and received 2 statements of qualifications. Both
were reviewed at the committee and board level and the MPWMD elected to begin negotiations
with Deep Water Desal for a cost sharing with the permitting issues. Currently they are meeting
with an attorney to solidify contractual relationships and other related pieces. Next there will be
a meeting with the State Lands Commission to potentially be a co-lead agency for the
environmental work. The process is to ensure that there is a backup plan in progress while
waiting for the results for the MPWSP test wells. There is still a high risk for not receiving
permits for open water intake and it is still worth making an investment to a certain level to
advance an alternative plan.
President Della Sala opened the item to public comment. Nelson Vega clarified that it was the
Deep Water project supported as an alternative project and expressed concern for the selection
of firm and the cost to tax payers associated with pursuing the alternative plan. Tom Rowley
spoke representing Monterey Peninsula Taxpayers Association expressing concern that there
is duplication of effort and costs for pursuing an alternative project and environmental studies
as the Authority requested the CPUC to require a project level analysis of DWD. He requested
that the Authority question this duplication of efforts and funds spent. Having no further
requests to speak, President Della Sala closed public comment.
President Della Sala spoke to Mr. Rowleys comment indicating the duplication of effort and
cost is a hedge against the eventuality of litigation that could paralyze the desalination project.
MPWMD did endorse the MPWSP, and adopted the 8 conditions, including pursuing an
alternative intake project, which Cal Am is not pursuing. The WMD is doing what has been
asked of Cal am to move along and qualify an alternative intake that is out of the Salinas valley
Ground Water to be in a better position to move the project along.
5. Receive Report on Second Governance Committee and Provide Direction (Burnett)

a. Cal Am Request for Qualifications for Design Build Firms Desalination Plant

5

Vice President Burnett reported on the recent Governance Committee which discussed the
Request for Qualifications (RFQ) for the MPWSP. He communicated the comments provided by
the Authority and Cal Am incorporated all requested comments and the RFQ has been
released. The Request for Proposal (RFP) will be released in draft form in May and Cal Am will
allow the Authority to provide comments before publication. Other action items from the
meeting included a letter sent to Judge Weatherford requesting a workshop to discuss criteria
for the GWR decision. Also, efforts have been made to meet with the Monterey Regional Waste
Management District to explore opportunities with the landfill gas recovery program. A letter of
interest describing the parameters and timeline will be prepared and sent. Vice President
Burnett answered questions from the Directors.

President Della Sala opened the item to public comment. Nelson Vega questioned access to
information being sent or received by public officials during public meetings. Legal Counsel
Freeman responded that it is not illegal, even with the Brown Act, but it would be a public
comment and would be accessible to the public. Sue McCloud commented on pursuing
discussions with the MRWMD as their agenda packet is being published tomorrow and
encouraged a letter of interest to be sent prior to distribution of the packet. With no other
requests to speak, President Della Sala closed public comment.

6. Review 2013 -2014 Budget for Public Outreach and Provide Comments to Staff (Reichmuth)
Presented Report and Received Direction

Executive Director Reichmuth spoke to the request by the Authority for a comprehensive public
outreach campaign. Provided in the agenda report, was an expansive public outreach program
for a water supply project, GWR and desalination facility. Mr. Reichmuth answered questions
and received direction from the Directors.

Director Kampe spoke to Mr. Reichmuths comments and suggested of a public outreach
budget of approximately $40,000 and requested staff explore some cost sharing opportunities
with other agencies. Director Rubio spoke in support of Director Kampes comment.
President Della Sala opened the item to the public. Tom Rowley spoke to the credibility of the
Authority from their past actions, acknowledged the need for public outreach including the need
to avoid rationing. He said the best outreach you have is the reputation of the Authority then
spoke to having all Land use jurisdictions represented. Doug Wilhelm suggested more
research about what type and level of outreach that is needed and spoke about the level of
effort of public outreach that occurred with the Poseidon project. Nelson Vega spoke to the cost
of outreach per person and suggested outreach to the public via the water bill. Sue McCloud
spoke to previous comments about how to combine outreach efforts with other agencies. With
the last project there was a vetting many firms and the objectives to be achieved must be
identified and broken down into functional methods. Past efforts could be reformatted for this
campaign. With no further requests to speak, President Della Sala closed public comment.

Director Pendergrass suggested a subcommittee of the board collaborate with other agencies
for public outreach. Director Rubio agreed with Director Pendergrass and said Cal Am also has
responsibility to communicate to their constituents.

6
President Della Sala spoke to the need to be transparent and be good representatives,
suggested a budget of $40,000 for the next Fiscal Year, scheduled to be spent quarterly or by
tasks for a tracking for the expenditure of money, to be able to allow staff to prepare and have
the Directors approve the budget for next year to be passed on to the member City jurisdictions
prior to adoption of their annual budgets.

Director Kampe spoke to the need for an upgraded website, televised meetings, and spoke to
the emotional sensitivity to the public that needs to be documented, distributed and available.
He suggested a budget of $45,000. He then commented that he does not know what the
purpose of the outreach is intended to be, what the goal is or what the time line will be. The
Authority came to a consensus that staff return at the next meeting with a tier 1 approach
budget of $45,000 for the next fiscal year.
7. Receive Update Report from Cal Am Regarding Compliance with Conditions for Authority
Support of Cal Am Desal Project (Bowie)
Action: Merged Items 7 & 8, Received Report and Discussed

Vice President Burnett reported that staff for the MPWSP project have been at the CPUC
hearing testifying and have not had the opportunity to update on progress made since the last
presentation therefore will not be able to provide a full report. He then requested that Items 7
and 8 on this agenda be merged. The Directors agreed.
Mr. Burnett indicated that the CPUC Testimony Hearing was a productive exercise and spoke
to the great work our Legal Counsel Russ McGlothlin provided. He then spoke to the process
that took place throughout the proceeding and said the productive work was accomplished
spending time with all the intervening parties to understand their issues and make agreements.
He reported that the next step includes hearings which will be completed in early May, after
which begin the legal briefings, which will be a potentially a costly endeavor. There is a 30 day
window of opportunity to submit to the CPUC compromises that have been worked out by
intervening parties. Legal Counsel Freeman spoke in support of eliminating issues prior to the
Briefings to reduce legal costs.
Vice President Burnett then spoke to the two handouts presented which are matrix updates of
the testimony hearings and Cal Ams compliance with the Authority adopted support conditions.
He noted that the topic of public contribution received the largest amount of attention at the
hearings, as well as the construction of public funds.
Vice President Burnett then described the process that could be used to cover the $40 billion
dollars in transactions, $6 billion approved by the CPUC through a process called securitization.
He indicated that a testifying Cal Am expert admitted that although there are many potential
problems from utilizing public funding, there are ways Cal Am could be willing to accept since it
is not recourse debt. Mr. Burnett then reported that a meeting that occurred after the hearings
concluded resulted in generation of four potential scenarios for public contribution. Ken
Talmage spoke to explain the different scenarios.

President Della Sala opened the item for public comment. Nelson Vega thanked Vice President
Burnett for his efforts, then expressed concern that it was very risky to the rate payers and in
many scenarios could leave them with stranded costs. With no further requests to speak,
President Della Sala closed public comment. Vice President Burnett answered that an
agreement can be made to have a reserve fund set aside or to have up to one year of bond
servicing in reserve in the event of default.

7

Vice President Burnett then commented on progress made to meet the eight compliance
conditions for the MPWSP. He noted that Cal Am has acknowledged that the project likely will
NEPA and has applied to the Army Corps of Engineers. Also Cal Am continues to push back
and is not actively pursuing a contingency plan and questioned what should be done about that.
He then indicated that there is a request from an intervening party for a change to the brine
discharge system, which is not part of the conditions but it is important to note. The request is
to change from a depressurized to a gravity controlled brine discharge system, which would
force the brine to mix. Cal Am indicated that is not necessary and would add $10 million to the
project cost. The argument is that it could cause a dead zone if not remediated. Lastly he
reiterated that many areas are amenable to a settlement and should be perused.

President Della Sala opened the item to public comment. Tom Rowley spoke to the eight policy
conditions and questioned the timing for the release of the EIR in relation to the release of the
Administrative Law judge decision and what the process would be if it is denied. He then
expressed concern about the duplication of efforts. Nelson Vega also expressed concern about
the process and questioned the development of contingency plan, and expressed frustration
with Cal Am that they will not develop a contingency because they cannot recoup the costs
from the ratepayers. With no additional requests to speak, public comment was closed.
Vice President Burnett spoke to Mr Vega's comment that Cal Am cannot recover cost for
something that is not used and useful. Legal Counsel Freeman confirmed that the CPUC could
direct the resistance to engage in a parallel process, where they would only be able to be
reimbursed for the one successful project.

Vice President Burnett requested agendizing for a future meeting contracting for professional
help, not to exceed $10,000, to assist with the settlement process to reduce the amount of work
assigned to the Attorney of Record, indicating the settlement process will require more structure
rather than ad hoc availability. Legal Counsel Freeman suggested not losing the two weeks
between now and the next meeting and suggested the Authority authorize the action. The
Directors Agreed.

8. Receive Update and Provide Direction for California Public Utilities Commission Testimony
Hearing for Application (A-12-01-019)
Action: Item Merged with Agenda Item 7

ADJOURNMENT

With no further business to come before the Authority, President Della Sala adjourned the
meeting at 9:57 p.m.

ATTEST:

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


Agenda Report

Date: April 25, 2013
Item No: 5.

08/12

FROM: Executive Director Reichmuth

SUBJECT: Review Public Outreach Program and Adopt Budget for Fiscal Year 2013-2014
(Reichmuth)
RECOMMENDATION:

That the MPRWRA Board approve the public outreach funding for next fiscal year and the
agency budget for 2013/14 and authorize staff to forward to member agencies.

FISCAL IMPLICATIONS:

The proposed budget action would fund a budget of $423,680 for the MPRWA to adequately
fund their operations. Details are provided in the Discussion section of this report.

DISCUSSION:

At its most recent Board meeting, MPRWA Directors requested a limited public outreach
program for the next fiscal year as part of the overall budget. That program is as follows:

Table 1: Proposed Public Outreach Budget

Website Update/Redevelopment $15,000
Ease of use
Attractiveness
Search engine by keyword
Speakers' Bureau Support $20,000
Research
Develop brochure
Key points
Cost/benefit analysis
Ratepayer impacts
Significant issues and concerns
Televising Meetings $14,000
TOTAL $49,000

Below are spreadsheets describing overall budget impacts. At such time as County membership
becomes active, then costs/reallocations will be adjusted.


Based on the Authoritys Joint Powers Agreement, below is the approved Member City expense
allocation based on water usage.

Table 2: Member City Expense Allocation Based On Water Usage

Member City Weight
Carmel By the Sea 9.30%
Sand City 1.30%
City of Pacific Grove 18.80%
City of Seaside 22.00%
City of Monterey 46.50%
City of Del Rey Oaks 2.10%

The proposed revisions to the budget and the Member City expected contributions are included
below in Table 2, and Table 3.

Table 3: Proposed Budget 2013-2014 Fiscal Year

Adopted
Budget
12-13
Proposed
Budget
13-14
Carry
Over
From
12-13
Funds
Requested

Professional Services

Legal Counsel $20,000 $63,000 $4,500 $58,500

Attorney of Record $149,412 $100,000 $0 $100,000

Staff $35,000 $35,000 $0 $35,000

Financial Advisor Services $12,500 $0 $0 $0

Executive Director $131,868 $94,680 $63,548 $31,132
Studies $10,000 $10,000 $10,000 $0
Project Evaluation $86,650 $20,000 $1,545 $18,455
Contract Assistance $0 $15,000 $0 $15,000
Travel

$0 $5,000 $0 $5,000
Public Outreach $0 $49,000 $0 $49,000
Insurance $4,000 $7,000 $86 $6,914
Audit $5,000 $5,000 $0 $5,000
Contingency $22,295 $20,000 $2,738 $17,262

Total Budget FY 13-14 $476,726 $423,680 $82,417 $341,263


Table 3: Financial Contributions by Member City

Member City Contributions

Member City
Approved
Percent
Distribution
Total
Contributions
FY 2012-13
Total
Contributions FY
2013-14
Carmel By the Sea 9.30% $44,336 $31,737
Sand City 1.30% $6,197 $4,436
City of Pacific Grove 18.80% $89,624 $64,157
City of Seaside 22.00% $104,880 $75,078
City of Monterey 46.50% $221,678 $158,687
City of Del Rey Oaks 2.10% $10,011 $7,167
Total Income $476,726 $341,263
Total Budget $476,726 $423,680
* Carry Over Balance Reduces total Contribution

Attachments: 1. Resolution

c: President Della Sala
Legal Counsel Freeman
Director and TAC Chair Burnett


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