Monterey Peninsula Regional Water Authority

SPECIAL MEETING MINUTES MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA) Wednesday, August 1, 2012 1. CALL TO ORDER The MPRWA special meeting of Wednesday, August 1, 2012 was called to order at 7:00 p.m. by President Chuck Della Sala, at the Monterey City Council Chambers. 2. ROLL CALL AND INTRODUCTIONS Roll call was taken and a quorum established with the following members in attendance: PRESENT: President Chuck Della Sala, Monterey; Vice President Felix Bachofner, Seaside; Directors Jason Burnett, Carmel; Jerry Edelen, Del Rey Oaks; Carmelita Garcia, Pacific Grove; David Pendergrass, Sand City. Others: Interim Executive Director, John Dunn; Interim Agency Attorney, Don Freeman; TAC Representative, Dave Stoldt; Acting Agency Clerk, Samantha Sakhrani. 3. PLEDGE OF ALLEGIANCE Director Garcia led the attendees in the Pledge of Allegiance. 4. PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA President Della Sala opened the meeting to public comment.  George Brehmer - Requested the Authority be objective when choosing a consultant.  George Riley - Spoke about an article regarding Cal Am and rate payers.  Nelson Vega – Asked the Authority to look into the Governor’s Water Master Plan.  Libby Downey - Urged the Authority to get a commitment on the offer the Water Management District made to assist with financial costs.  Harvey Billig – Asked Authority to hire a financial advisor to aid in the projects.  Unidentified member of the public – Spoke about an article referencing a workshop held in San Francisco, which stated CalAm would consider City of Pacific Grove as a fourth project. President Della Sala closed public comment. 5. APPROVAL OF MINUTES None. 6. BUSINESS ITEMS A. Consider awarding contract between MPRWA and Base Water  MPRWA Special Meeting Minutes August 1, 2012 Page 2 of 6 Resources Consulting and Management LLC for consulting regarding comparison of cost estimates for the proposed desalination project alternatives and evaluation of schedule and alternative financing options and authorize MPRWA Chair or designee to execute agreement on behalf of MPRWA. MPRWA TAC Committee Chair, Dave Stoldt, presented the contract and stated the contract had minor changes put forth by Attorney Christine Davi and Attorney Don Freeman. The estimated total costs of the firm to be approximately $58, 750. Directors asked clarifying questions regarding additional proposals from other firms, the potential timeline implications and the overall quality of the submitting company. Mr. Stoldt answered questions and stated an additional three (3) firms had expressed interest in the project; there is a major concern regarding public perception of the principal of Base Water Resources Consulting and Management as he had done business with the City of Oxnard where there were allegations of misused public funds and failure to report gifts from firms conducting business with the City. Mr. Ortega’s experience with other projects was discussed and for the purpose of informing the public, a synopsis of an email by the Ventura County Investigation Department was shared. President Della Sala opened the floor for public comment.  Nelson Vega - Asked the Authority to seek another consulting firm and to make contracts more specific as the submitted contract contained flaws. President Della Sala asked City Attorney Don Freeman to address Mr. Vega’s concern in regards to the Attorney clause in the contract. Seaside City Attorney Freeman stated that the contract has been reviewed by himself and Monterey City Attorney Davi and the Attorney Provision is standard for some public agencies, the use is personal preference; the lack of use in this agreement has to do with the nature of the consultant agreement and the consideration of litigation fees. What is included in the agreement is standard and used in most jurisdictions as it outlines the performance requirements, along with provisions to terminate should the agreement lack fulfillment by the contracted party.  Unidentified member of the public - Asked the Authority to act with prudence.  MPRWA Special Meeting Minutes August 1, 2012 Page 3 of 6 No further comments, public comment closed. M/S/C (EDELEN/GARCIA) motion to not award the contract to BASE Water Resource Consulting and direct Mr. Stoldt to solicit other appropriate alternative consulting firms that the Board could evaluate in the future. MOTION CARRIED (6-0-0-0) Directors Garcia and Burnett spoke to the importance of guarding the public trust and fully vetting future consultants. B. Update of California Public Utilities Commission workshop of July 26 and July 27 and provide a policy direction for future meetings. President Della Sala thanked Director Burnett and his alternate and City of Seaside alternate, Steve Bloomer, for attending the workshop. Director Burnett made available to the public the slide presentation presented at the workshop and pointed out that the PUC regulates only CalAm and does not and can not direct a public agency to take any action; PUC made clear that unless public agencies come forward and propose viable alternatives, the PUC will continue with current direction. Director Burnett identified: if Authority wishes to make a public announcement that public ownership is favored or partial ownership and that the Authority favors public governance for important decisions, then Authority needs to submit specific proposal/ plan to PUC as soon as possible with critical deadline of September 18; or alternatively, Authority needs to work with other agencies to encourage submission of a proposal that the PUC can evaluate and if chooses to, direct Cal Am to work with the public agency. Key point for Authority consideration is PUC can not legally direct the Board or any other public entity to take any action; the Authority needs to take that action. City Attorney Freeman: Emphasized the September 18 deadline and reminded the Authority the tasks set forth for the evening is to provide policy direction achieving regard to the Authority and potentially public ownership, governance, and financing. Director Burnett: Advocates public ownership and public financing in the interest of lower interest rates associated with debt and subsequent lower costs to rate payers; asked Authority to appoint an Ad Hoc Committee to work with Water Management District, to assist their efforts in submitting a proposal for PUC submission before the deadline. Director Pendergrass: Does not support public own and operate; asked that public/private ownership and all options be explored. Director Edelen: Thanked Director Burnett and stated a definitive determination on whether to support public or private ownerships has not  MPRWA Special Meeting Minutes August 1, 2012 Page 4 of 6 been made; two (2) out of the three (3) desal projects are private; supports whatever alternative can provide the most amount of water for the least possible cost. President Della Sala opened the floor for public comment.  George Riley - Spoke in favor of Director Burnett and City Attorney Freeman’s analysis; asked the Authority to point out to CalAm if they take risks and fail, they should not be awarded.  Nelson Vega – Asked Authority to focus on growth issue of more water at a higher cost for the higher usage consumers.  Tom Rowley - Shared that his monthly water charges have increased dramatically in a short period of time.  George Schroeder - Asked the Board define the meaning of partial ownership.  Harvey Billig - asked Authority to concentrate on developing a community consensus to use as a guide when making decisions.  Unidentified member of the public – Asked the Authority to consider individuals and families of lower income when making decisions. President Della Sala asked Monterey Peninsula Water Management District General Manager, David Stoldt, to state his comments. Mr. Stoldt shared: -Regarding Finance: District stands ready to be public partner if a public partner is needed if CalAm can not get state revolving fund loans because they are a private entity; District has discussed doing tax exempt financing with or without public ownership; District will be proposing a finance plan and identifying affiliated issues, a draft will be made available to view before submittal. -Regarding Governance: District is interested in working with the Mayors to find a workable governance structure.  An unidentified member of the public - Commented on the number of tiers that are proposed into the projects and asked the Authority to focus on the highest tier. No further comments, public comment closed. A details discussion ensued regarding potential partnerships and structures. President Della Sala asked for consensus to appoint an Ad Hoc Committee to work with the Water Management District or any public agency who would like to assist in reducing the costs of financing and looking at partial public ownership.  MPRWA Special Meeting Minutes August 1, 2012 Page 5 of 6 President Della Sala stated the Ad Hoc Committee will be meeting with Cal Am representatives and asked if there were any objections. No objections. A details discussion ensued regarding finance, ownership and governance; the appropriate timing of discussions; the transparency and make-up of Ad Hoc Committee meetings; concerns around accuracy of news articles; accuracy of information disseminated to the public, and; possible areas to keep the public and press updated on the activities of the Authority. C. Appointment of subcommittee to meet with CalAm to discuss governance and other issues. President Della Sala asked that item 6 C be withdrawn. M/S/C (DELLA SALA/EDELEN) motion to withdraw item 6 C from the agenda. MOTION CARRIED (6-0-0-0) President Della Sala opened the floor for public comment.  Tom Rowley – Spoke to personal observations and asked Authority to not limit conversations with existing water agencies, but rather be creative with options and partnerships.  Nelson Vega – Thanked Director Garcia; asked Authority for efficiency and transparency; asked that a Water Purchase Agreement be discussed right away.  Libby Downey - Recommended Ad Hoc Committee be created, vet processes and bring back to the Authority to make decisions; reminded Authority they have no control over the media and headlines.  Ralph Rubio – Concerned that the general public does not attend meetings and encouraged the Authority to find a way for better community outreach. No further comments, public comment closed. President Della Sala established that Authority consensus was for him to appoint an Ad Hoc Committee to meet with CalAm. 7. ADJOURNMENT The meeting was adjourned at 9:00 p.m. Respectfully submitted,  MPRWA Special Meeting Minutes August 1, 2012 Page 6 of 6 _______________________________ Samantha Sakhrani Acting Agency Clerk ATTEST: _____________________________ Chuck Della Sala President