M I N U TE S MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA) Special Meeting 12:30 PM, Monday, December 9, 2013 SEASIDE COUNCIL

CHAMBER 440 HARCOURT AVE SEASIDE, CA 93955 MONTEREY, CALIFORNIA Directors Present: Directors Absent: Staff Present: ROLL CALL President Della Sala called the meeting to order at 12:34 p.m. PLEDGE OF ALLEGIANCE REPORTS FROM BOARD DIRECTORS AND STAFF Vice President Burnett reported regarding the California Public Utilities workshop on December 2, 2013 indicating the focus of questioning was regarding the size of the desal facility and that he had the opportunity to speak about the Authority position of sizing and the need to have water for lots of record and economic rebound. Director Pendergrass spoke to the passing of Monterey Peninsula Water Management District former General Manager Darby Fuerst. Executive Director Cullem spoke to the TAC Special Meeting that preceded this meeting and indicated that their recommendation will be provided at the appropriate time on the agenda. PUBLIC COMMENTS President Della Sala invited public comments and had no requests to speak APPROVAL OF MINUTES On motion by Director Pendergrass and Seconded by Director Rubio and approved by the following vote the Authority approved the minutes of October 31, 2013 Regular Meeting, November 14, 2013 Special Meeting and November 14, 2013 Regular Meeting. AYES: NOES: ABSENT: ABSTAIN: RECUSED: 1. 6 0 0 0 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala None None None None Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala None Executive Director, Legal Counsel, Clerk, Consultant Alex Wesner

October 31, 2013 Special Meeting Action: Approved November 14, 2013 Special Meeting Action: Approved November 14, 2013 Regular Meeting

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MPRWA Minutes Action: Approved AGENDA ITEMS 4.

Monday, December 9, 2013

Review, Discuss and Provide Recommendations on draft SPI Report to the Monterey Peninsula Water Supply Project (MPWSP) Design Build Consultant selection process (Alex Wesner) Executive Director Cullem introduced Alex Wesner, Separation Processes Inc (SPI) who was contracted by the Governance Committee Members to participate in the selection process for the design build firm for the Monterey Peninsula Water Supply Project. Mr. Wesner provided a detailed presentation of his involvement in the selection process for the Design Build contract for the MPWSP on behalf of the Governance Committee. His role was to review relevant documents, including statement of qualifications, Request for Proposals, proposal responses, questionnaire response and evaluation reports. He also attended meetings including interviews with the contractors, proposal scoring sessions and negotiations with selected Design Build firm. Mr. Wesner spoke to the technical specifications that were included in the contract negotiation process and provided evidence of the justifications for selection of the firm CDM including price, design ideas and site plan. He explained that the process was prescriptive to respond to specific technical criteria yet allowed the bidders to submit voluntary alternate proposals for flexibility. Mr. Wesner then provided the following schedule highlights proposed by the selected contractor CDM (*This time frame is contingent upon the success of the test wells.) then answered questions from the Directors. GWR Capacity Decision: October 2015 Final Design/Construction Start Nov 2015 Initial Start up at for 6.4 MGD Sept 2017 Final Start up for 9.6 MGD March 2018

Director Edelen spoke in support of the design build selection process with regards to flexibility and interaction with the project opportunities and proposals. He indicated that Cal Am should be congratulated for the flexibility which resulted in detailed responses and unanticipated financial benefits. Vice President and TAC Chair Burnett read an email from Legal Counsel McLaughlin into the record indicating Attorney Wes Strickland reviewed the proposed contract and concluded that the agreement was well drafted and fair. One further item is being explored regarding meeting coordination, but feels it is ripe for approval by the Governance Committee. President Della Sala expressed surprise by the minimal difference in the unit cost between the 6.4 MGD and 9.6 MGD facility and then questioned the level of electricity needed for operating the two proposed systems. Mr Wesner indicated that energy usage figures were outside the scope of the proposal but all projects were required to have efficiently operating equipment. President Della Sala invited public comments. David Lifland spoke to the cost of the slant wells and brine disposal not included in the proposals. Spoke to the pre-filter and the iron and manganese issue indicating that long term operations will still need them and he questioned the capacities of the proposed systems, speaking in support of expansion capabilities. Finally, he questioned the warranty policy if it could include replacement or proper maintenance.

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MPRWA Minutes

Monday, December 9, 2013

Chair Burnett reported on the recommendations made by the TAC at the previous meeting and Executive Director Cullem spoke to the following additional suggestions to be recommended to the Governance Committee. Recommended changes to the contract: 1) Request Cal Am to look into locking-in the price of reduction in the event the filters are not needed if iron and manganese are not needed and any other areas that could be locked in Suggestions for further review: 2) Looking at oversight of quality control and QA 3) Clarification when the value engineering exercise begins 4) Identify the critical path schedule that the public agencies and the public can look to ensure the project stays on schedule Director Kampe questioned exactly what is included in Quality Assurance or Quality Control and questioned if an analysis was doing to determine if savings on capital costs has any impact on operational costs. Mr. Wesner responded to technical questions asked about the process and the treatment needed under specific circumstances. On motion and approved by the following vote the Monterey Peninsula Regional Water Authority accepted the TAC recommendation as the Director recommendation to be forwarded to the Governance Committee as follows. To endorse the selection of CDM Smith for the design build team with the exception of the potential for a credit for the pre filtration if not necessary based on water quality test, as well as to consider inclusion into the contract for Quality Assurance to be conducted by Cal Am or its representative. AYES: NOES: ABSENT: ABSTAIN: RECUSED: 5. 6 0 0 0 0 DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala None None None None

Discuss and Provide direction to Water Authority Vice-President Burnett on the Design-Build Selection Scheduled for discussion at the at the Governance Committee meeting on Dec 11, 2013 (Burnett) Action: Item Tabled On motion by Director Kampe and Seconded by Directors Edelen and Rubio and passed by the following vote, the Authority approved tabling this item: 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

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MPRWA Minutes 6.

Monday, December 9, 2013

Receive Report, Discuss and Provide Direction on Alternates Funding Scenarios as Related to Cost of Water (Cullem) Executive Director Cullem spoke to the item and gave a brief presentation which recommended that the Authority review the alternative funding scenarios (as outlined in the attachment included in the packet) and provide direction as to how to determine the costs impact to the average customer for water usage. The projected cost increase associated with the MPWSP provided to the CPUC on December 2, 2013 indicating increases could range from $32 to $52 per month. Executive Director Cullem answered requested guidance from the Directors on how best to calculate and communicate these issues to the public. Director Burnett added that the TAC will take up the issues as well as will work with the Monterey Peninsula Water Management District to determine and communicate how this will impact the individual water rate payers and bring it back before the Directors. Executive Director Cullem spoke to the different usage categories that will be addressed. Director Edelen clarified that these calculations would be based on the 9.6 MGD facility not the smaller facility plus GWR or ASR. President Della Sala opened the item to public comment. George Riley spoke as a member of the public that public awareness will happen when the first bill is received with the water increase included. He expressed concerned about financing $83 million dollars and that more money is being set aside for water reclaiming projects over water supply projects and thinks that the projections of getting funding is overly optimistic.

Director Kampe questioned how and if the financial liability of the projects (GWR/Desal/ASR) will be calculated which must be considered in the overall solution. Mr. Cullem spoke to the analysis that will be done regarding the costs of the GWR project, similar to that of the desal project noting there will be capital costs, but also savings in operating costs, therefore a net present value and total cost analysis will reveal the best results as capital costs is only a small part of the total project cost analysis. Direction was provided and no action was taken. ADJOURNMENT The Meeting was adjourned at 2:13 p.m. ATTEST:

Lesley Milton, Clerk of the Authority

Chuck Della Sala, MPRWA President

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