M I N U TE S MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA) Regular Meeting 7:00 PM, Thursday, November 14, 2013 COUNCIL

CHAMBER 580 PACIFIC STREET MONTEREY, CALIFORNIA Directors Present: Directors Absent: Staff Present: ROLL CALL President Della Sala called the meeting to order at 7:05 p.m. PLEDGE OF ALLEGIANCE REPORTS FROM BOARD DIRECTORS AND STAFF Vice President Burnett reported on updates provided to the State Water Resources Control Board regarding the Peninsula's progress to reach the Cease and Desist Order. Executive Cullem reported that the public outreach efforts have been progressing and the PR consultant and interns will likely participate during Whale Fest in Monterey. He also reported that the Financial Audit is in full progress. PUBLIC COMMENTS President Della Sala invited public comments for items not on the agenda. Nelson Vega expressed concern that outreach has not been effective at communicating the potential financial impact to the community if water restrictions are imposed in 2017. Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala None Executive Director, Legal Counsel, Clerk

APPROVAL OF MINUTES 1. October 10, 2013 On motion by Director Rubio and Seconded by Vice President Burnett and approved by the following vote the Authority approved the Minutes of October 10, 2013 with requested modifications. AYES: NOES: ABSENT: ABSTAIN: RECUSED: 6 0 0 0 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala None None None None

MPRWA Minutes AGENDA ITEMS 2.

Thursday, November 14, 2013

Receive Update and Discuss Presentation Regarding the Monterey Peninsula Water Supply Project Cal Am Engineer Rich Svinland provided updates on three items pertaining to the Monterey Peninsula Water Supply Project (MPWSP): 1) Status of the Design Build Vendor Selection Process 2) Test Well Permit Applications and Project Status 3) Bore Hole Program. Design Build Selection Process: Cal Am received proposals for the second phase of the RFP for Design Build Services and interviews and are taking place to evaluate the proposals. The final selection will be made on November 11, 2013. Negotiations will conclude before the notice is made public and Cal Am will submit all information at the December 11, 2013 Governance Committee meeting. Test Well Update Mr. Svinland reported that it is unlikely that Cal Am will be able to drill the test well in the nonnesting season for the snowy plover bird. The City of Marina requested the following six additional studies as part of the Negative Declaration for the Environmental Impact Report: 1. 2. 3. 4. 5. 6. Additional geotechnical studies Essential fish habitat study - impacts to marine life/ Quality of water study for the water put back into the bay Archeological study of the Semex buildings Recommended coastal hazard and wave study - long term effect of the test wells Specific habitat primary report

Mr. Svinland indicated that after all of the above reports are submitted and approved through the City of Marina, then it has to go to the Coastal Commission for approval. There is a very remote chance to be able to drill this season, but that it is highly unlikely. Bore Holes: 5 of the 12 proposed bore holes have been completed to date. Cal Am has commissioned a hydrologist working group to prepare a report of the bore holes. Mr. Svinland answered questions from the Directors. President Della Sala invited public comments on the item. Nelson Vega questioned when the wells are in full production, how many wells are needed and how many gallons per minute are needed to meet the demand for the 9.6 mgd plant. David Lifland questioned specific technical questions regarding the bore holes.

Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, November 14, 2013 2

MPRWA Minutes

Thursday, November 14, 2013

Mr. Svinland responded to Mr. Vegas questions that 16,000 gpm are needed to make 9.6 mgd per day. The project is estimating 2,000 gpm per well, which requires 8 wells running at all times, and additional wells will be needed for redundancy. Worst-case scenario; a total of 15 wells will be needed. Mr. Svinland responded to Mr. Liflands questions indicating that the working group of the expert geologist will provide a final report in the near future. This item was for information only, no action was taken. 3. It is recommended that the MPRWA Receive, update, discuss, and provide direction on a work plan for Water Authority support of the Monterey Regional Water Pollution Control Agency (MRWPCA) Ground Water Replenishment Project (GWR). Executive Director Cullem presented the report indicating that the Authority has asked that the MRWPCA advise the Authority of what assistance is needed to assist with moving the GWR project forward. A letter has been submitted by Mr. Israel outlining potential avenues for assistance. Mr. Cullem reported that the TAC has discussed the letter and will remain engaged. Vice President Burnett reported that TAC Member Narigi has come forward with key questions regarding the GWR project, and will work the Mr. Cullem to clarify and identify issues to discuss with the full Board or TAC. President Della Sala invited public comments on the item. Nelson Vega expressed concern about the cost of the program, potential stranded costs and about the States regulations on this type of project. David Lifland questioned water tests at the pilot plant if they were going to be testing the drainage ditch and the agricultural wash ponds and asked if the building location has been determined.

Keith Israel, General Manager of the Monterey Regional Water Pollution Control Agency responded to Mr. Vegas concerns regarding the capital invested and the operating costs. He indicated that costs for the development are funded 66% by the MRWPCA and 33% by the MPWMD. Even if GWR does not go forward at this time, this technology would be reused for other projects so would not be considered stranded costs, but research and development costs. Mr. Israel noted that the project still is on track with regards to schedule and does seem to be ripe politically. Mr. Israel then responded to Mr. Lifland that the EIR includes the produce wash water, storm water from Lake El Estero and Salinas reclamation ditch water as alternative sources of water. The plant would be at the current MRWPCA facility and the wells would be in the Seaside Basin. Vice President Burnet indicated that he shares the same concerns about stranded costs. He spoke to two factors that would affect the GWR project: First regarding the cost differential between the larger and the smaller plant which will get clarity when the bids are revealed, and second is if the water purchase agreement for the source water and the product water would trigger debt equivalency, at which point the project would be dead. This item was for information only, no action was taken.

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MPRWA Minutes 4.

Thursday, November 14, 2013

Approve extension of deadline for Fiscal Year 2012-13 Financial Report and Full Opinion Audit to December 31, 2013, and authorize a time extension of the contract with McGilloway, Ray, Brown and Kaufman to March 31, 2014. Executive Director Cullem spoke to the item, the selection process of the Auditing firm and the contract. He noted that because it is first audit for the Authority, it will take more time to deliver the annual report and requested an extension. President Della Sala opened the item to public comment and had no requests to speak. On motion by Director Edelen and Seconded by Director Kampe and passed by the following vote, the Authority approved the extension of deadline for Fiscal Year 2012-13 Financial Report and Full Opinion Audit to December 31, 2013, and authorized a time extension of the contract with McGilloway, Ray, Brown and Kaufman to March 31, 2014. Speaking on the second, Director Rubio spoke to the audit being an important piece for the transparency for the Authority and encouraged staying on schedule as it goes to the credibility of the agency. President Della Sala concurred. AYES: NOES: ABSENT: ABSTAIN: RECUSED: 6 0 0 0 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala None None None None

5.

Discuss and Approve a Contract Change Order with Separation Processes, Inc. to Increase the Contract Amount to Not-to-Exceed $36,000, and Extend the Completion Date to March 31, 2014. Executive Director Cullem spoke to the recommendation to extend the award of contract for Separation Processes Inc. The other two agencies have not had a chance to act on this item but have been provided letters of support for their fair share contribution of $12,000 each. Mr. Cullem proposed expanding the contract with SPI Consultants with assurances from the other parties to pay. President Della Sala opened the item to public comment and had no requests to speak. On motion by Director Kampe and Seconded by Director Edelen and passed by the following vote, the Authority approved Approve a Contract Change Order with Separation Processes, Inc. to Increase the Contract Amount to Not-to-Exceed $36,000, and Extend the Completion Date to March 31, 2014. Speaking on the second Director Rubio requested that future financial actions should include a report of a fiscal impact and how it relates to the adopted budget. AYES: NOES: ABSENT: ABSTAIN: RECUSED: 6 0 0 0 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala None None None None

Vice President Burnett requested consideration of the need to hold a special meeting due to the release date of the Design Build Contract Vendor Selection and the need to provide direction prior to the December 11, 2013 Governance Committee Meeting. The Directors discussed and agreed to schedule a special meeting. Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, November 14, 2013 4

MPRWA Minutes 6.

Thursday, November 14, 2013

Adoption of Resolution, Approving Donald G. Freeman as Legal Counsel through December 31, 2014 and Authorizing the Authority President to Execute a contract with Perry Freeman. Legal Counsel Freeman recused himself from this agenda item. Executive Director Cullem spoke to the item and the terms of the agreement noting there were no modifications from the previous agreement and recommended that the Authority extend the contract through December 31, 2014. President Della Sala opened the item to public comment and had no requests to speak. On motion by Director Rubio and Seconded by Director Pendergrass and passed by the following vote, the Authority adopted Resolution 2013-09, approving Donald G. Freeman as Legal Counsel through December 31, 2014 and authorizing the Authority President to execute a contract with Perry & Freeman for legal counsel services. AYES: NOES: ABSENT: ABSTAIN: RECUSED: 6 0 0 0 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala None None None None

ADJOURNMENT

ATTEST:

Lesley Milton, Authority Clerk

Chuck Della Sala, President

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