Monterey Peninsula Regional Water Authority

MINUTES MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA) Special Meeting 7:00 PM, Thursday, November 12, 2015 COUNCIL CHAMBER 440 HARCOURT AVE SEASIDE, CALIFORNIA ROLL CALL PRESENT: Edelen, Pendergrass, Rubio, Kampe, Burnett, Roberson ABSENT: None STAFF PRESENT: Executive Director, Legal Counsel, Clerk PLEDGE OF ALLEGIANCE REPORTS FROM BOARD DIRECTORS AND STAFF Executive Director Cullem indicated that there is a hard stop on the agenda at 7:00. There are also issues on consent agenda, such as errors in the minute and requested that Agenda Item 1 be continued. PUBLIC COMMENTS President Burnett invited comments from the public.  Tom Rolwey spoke to an article in the Monterey Herald indicates that the Monterey Peninsula Taxpayers association a critic of the actions agendized tonight but confirmed that MPTA supports the Authority and its independence.  Steve Thomas spoke representing the Pure Water Monterey reporting that the Project EIR was approved and uncontested. He also reported that there was approval from City of Salinas and the Board of Supervisors on the source water agreements. He spoke to the awards that the project is being considered for. Lastly reported the project is in final stages of approvals for the water purchase agreement, working with Marina Coast Water District and looking to be able to be a participant and beneficiary of the larger Monterey water supply project.  Charles Ceck reminded the Directors that the slant well is running again and has gone through maintenance and issues. President Burnett indicted it will be discussed during this meeting. CONSENT AGENDA Executive Director Cullem reported that an updated letter is available to the public for Agenda item 4. He also requested that Agenda Item 1 be continued to the next meeting. Director Edelen requested to pull items 6 and 7 for discussion. Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, November 12, 2015 1 On motion by Director Pendergrass and Seconded by Director Rubio and passed by the following vote the Authority Board approved Consent Agenda items 2, 3, 4 & 5. Passed unanimously (6-0). 1. Approve Minutes from August 13, 2015 - Milton Action: Continued 2. Approve Minutes from September 24, 2015 - Milton Action: Approved 3. Approve and File Authority Checks Through Nov 6, 2015 - Milton Action: Approved 4. Receive and Discuss if necessary, the Draft Letter the Governor's Military Council (GMC) sent through Admiral Dan Oliver on Nov 6, 2015 Action: Authorized 5. Receive Copy of Water Authority Financial Policies and Procedures adopted by the Authority Board on Mar 13, 2014 Action: Received 6. Adoption of Resolution Approving Donald G. Freeman as Legal Counsel through December 31, 2016 and Authorizing the Authority President to Execute a contract extension with Perry Freeman at a Price not-to-exceed $36,000. Approved and Passed Resolution 15- Director Edelen requested that the funds be prorated for both the contract extensions to coincide with the calendar year and not a fiscal year, as it makes more sense to coincide with the budget. Director Edelen agreed. Executive Director Cullem requested that the Resolution be modified extending the contract only to December 30th and the dollar amounts to reflect be half the amount of the agendized amounts and aligned with the budget. President Burnett invited public comment on the item.  George Riley requested that there be a discussion on the sun setting of the Authority. On motion by Director Rubio and seconded by Director Edelen and passed by the following vote, the Authority Directors approved Consent Agenda items 6 and 7 with the modification that the resolutions reflect contract extensions only through June 30th and the dollar amounts to be $18,000 and $50,000 respectively. Approved Unanimously (6-0). 7. Adoption of Resolution 2015-YY, Approving Brownstein Hyatt Farber Shreck as Special Legal Counsel through December 31, 2016 and Authorizing the Authority President Execute a Contract Extension at a Price not-to-Exceed $100,000. Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, November 12, 2015 2 AGENDA ITEMS 8. Receive, Discuss, and Provide Direction on Final Application to the State Water Resources Control Board (SWRCB) to Modify Cease and Desist Order (CDO) 2009-0060 and Decide Whether to Co-apply or Send A Letter of Support - Cullem President Burnett introduced the item and provided an overview of the efforts expended during the last year and a half working with the State Water Resources Control Board, other stake holders, and with the Authority and with the public to provide an adequate application for modification of the Cease and Desist Order. In addition to the approval of the provided draft application, the key policy question he requested to address is if the Authority will authorize being a co-applicant or if they desire to send a letter of support independently. He reported that draft letters were received from Sierra Club and the Planning and Conservation League expressing support with the exception of the effective diversion, which is significant because these groups brought the CDO request to fruition. Speaking to the diversion limit, he reported on the requested diversion figures and expressed concern that as a community we may not be able to meet the goals the conservation groups are requesting. Our authority is just to petition, send a letter and possibly provide testimony. President Burnett spoke to changes made since the last draft was reviewed including modifications to the status of the Steel Head Fishery report, which includes a requirement to conduct an annual science assessment and only if there is a significant change and if so the requirements for an adaptive management plan. President Burnett then mentioned that Pebble Beach is actively involved in these discussions and has authorized being a co-signer on the application as they concluded that they will be in a better position to advocate for their interests as a co-signer rather than a letter of support. Special Legal Counsel Russ McGlothlin expressed concern with the proposed diversion limits indicating that the threshold proposed invites the potential of a violation, which would take the community and Cal Am to focus on enforcement rather than focusing on a long term solution. The number was generated is an average of 5 years, instead of 3 years. Director Pendergrass questioned the process by which it would be reviewed and possibly approved to which President Burnett explained once the application is received it triggers the formal process and only the applicants have the ability to request a hearing. The timeline for the State Board to make a decision depends on if a hearing process is Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, November 12, 2015 3  necessary, and the only topic which could be covered in a hearing would be the effective diversion limit. Director Rubio requested clarification on 1) the policy decision of Authority to co-apply vs a letter of support and if the co-application provides us standing; 2) how does our signing on differ from a strong letter of support attached to the application; and 3) does signing onto the document expose the Authority to liability for future lawsuits in anyway. Special Legal Counsel McGlothlin responded that there is no way there is liability that arises from this with the exception if there is a violation. One of the tools the State Board has for enforcement is fines, which then could go to communities adversely if the CPUC felt compelled and has nothing to do with if we are the application or a supporter. Otherwise there is no financial or other liability for the Authority directly. He further went on to explain the issue of standing and that the water code section 1832 provides that any aggrieved party may petition the Board to modify, revoke or stay a CDO and that the Authority member cities already have standing as an aggrieved parties, but then added that it is much better that the Authority represent this as a regional problem. Furthermore if at such time we don’t get what we are asking for or determine the COD is modified differently or is too onerous and we want to seek relief, we are in a stronger position that we have exhausted all administrative remedies if we ever get to that process. It is fundamentally a matter of wanting to put the community perspective forward to the Board as a community problem and not a Cal Am problem. On question by Vice President Kampe further questioning if our being a party vs being a cosigner hinders our capacity to challenge the implications of the diversion limits, Mr. McGlothlin responded he does not think so with the exception that the cities were intervenors in the lawsuit with the Water Management District in 2009. We began that litigation and entered into an interim settlement agreement, and entered a tolling agreement to extend statute of limitations. After you apply for a modification, are we barred from continuing litigation in the future, it’s not a big concern. As it stands right now, we are not changing or dismissal, the cities remain permitted to reinitiate litigation in 2009, but we should be aware that somewhere down the line they could argue a waiver President Burnett invited comments from the public. • Tom Rowley expressed thanks to the Authority for their leadership in pushing to get a water project. He questioned an application timing, if there been substantial enough progress and if the time is right. He spoke in support of this action and asked if they can procedurally intervene vs. co-signing. • George Riley questioned if the Authority has standing all ready, how does this add to the influence or options and does this document add new strength to standing or adding dimension to our issues. Expressed concern it puts the Authority in a defensive box to support Cal Am’s actions. • John Narigi spoke to the impact of the recession on the local economy and the current and hopefully continued conservation efforts of the community, but still requested that the Authority consider supporting the 9,500 acre feet desal facility as Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, November 12, 2015 4  a beginning point and not to request water production rates that maintain our current way of life. He spoke to the condition of new connections, as it affects the economy and residents. The Business Coalition request they sign on as a co-applicant. • Ron Weitsman, President of the Monterey Peninsula Rate Payers Association spoke in support of the CDO, and that Cal Am spent a lot of time with no progress and wasted a lot of money and believe Cal Am should pay the penalty for that. The CDO does not grant authority to cut the water supply and co-signing does not maintain independence. • Lou Colletti expressed concern and requested that the CDO extension should not recognize the water entitlement from the Pacific Grove water project based on the use of illegal water. He informed the Board he is going to petition the Water Rights Division that it be a topic of discussion. • Charles Ceck agreed that Cal Am has not met their goals in the last year to bring the desal into place, and thinks they will make more mistakes. The CPUC will give them the ability to charge the rate payers more money for the reduced amount of produced water. Every time they are fined they will just pass to the rate payers and he is disappointed. The Board responded to public comments made. Vice President Kampe spoke in support of taking action that will give us a positive outcome and supports the co-application. Director Edelen also spoke in support of public comments, but that if we cosign we are still maintaining independence. Mayor Rubio thanked the Board for having a policy discussion on being a co-signer vs independent letter. He spoke to the previous decisions to support and move things forward and spoke in support of continuing to move forward in the interest of the community, as the issues are important and co-signing will be more beneficial for the final decision and we need to stand behind our work product. Director Pendergrass spoke to the progress made and the efforts of the Authority from the beginning and to his view of the importance of co-signing this document. Director Rubio motioned to approve the authorization of submission of the draft application, version dated November 12, 2015 with the Authority as a co-signatory with no objection to adding Pebble Beach as a cosigner. Seconded by Director Edelen. Speaking on the second, Director Roberson strongly feels we need relief from the CDO, but still has concerns about waiving legal rights and feel that a letter of independence from this Board is more appropriate. He will abstain from the vote, instead of voting no. Director Burnett questioned if there could be a distinction made between the substance of the application and the policy decision regarding co-signing the document. On motion by Director Rubio and seconded by Director Edelen and passed by the following vote, the Authority Directors authorize submission of the draft application, version dated November 12, 2015 endorsing the content of the petition as presented. Motion Passes Unanimously. 6-0 Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, November 12, 2015 5  On motion by Director Rubio and seconded by Director Edelen and passed by the following vote, the Authority Directors authorized submission of the draft application with the Authority as a co-signatory with no objection of adding Pebble Beach as an additional co-signatory and authorize non substantive changes and authorize sending to the State Water Resources Control Board. Motion carries 5-0-1, Roberson abstaining. 9. Receive an Update on the Summary Project Schedule and Status of the Test Slant Well for the Monterey Peninsula Water Supply Project (MPWSP) - Crooks Ian Crooks from Cal Am provided an update on the test well project which started long term pumping on October 27th after discovering a pump motor issue. He further reported that operations are normal, that pump rate and water quality is good and salinity is increased. He added that there was a request for water quality for the well, and noted that on the project website www.watersupplyproject.org there is a table that includes water quality results which will continue to be updated. Additionally posted are the results of the test slant well study covering other slant wells built in the county. Lastly, Mr. Crooks reported receiving bids for the last two main components for the desal construction project, the pipelines and the production wells which will be brought before the Governance Committee in December 2015. They have hard bids for all components of the project and can discuss more in the future. Mr. Crooks answered questions from the Directors. President Burnett requested Mr. Crooks to send the charts in advance of the meeting so a more comprehensive discussion can take place, to which Mr. Crooks agreed. Executive Director Cullem spoke to the expansive Gant Chart prepared for the TAC and they will report back to the Directors at a future meeting. Director Roberson thanked Cal Am staff for helping coordinating with the City of Monterey with their existing infrastructure project so as not to impact the residents. President Burnett invited comments from the public.  Tom Rowley thanked Executive Director Cullem for his work putting all of this together.  Ron Weitzman questioned if the 28 slant wells were desalination or fresh water slant wells. He thinks the Authority should look at the other projects as closely. He disagreed that the Authority is independent. Director Pendergrass spoke in support of his favored position of the desalination facility to be a public private partnership. He spoke in support of the Sand City Desal Project and the Public private partnership Sand City has and thanked Cal Am for making it work. Director Kampe indicated that this truly represents that Cal Am has the one that is furthest a head both technically and legally of the other projects. He spoke to the service this project Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, November 12, 2015 6  will provide and impact to the entire state. Early indicators are good and we need to pursue this course with the conviction that we began with. Director Roberson questioned if there was a timeline proving the feasibility of the slant wells to which President Burnett spoke to the settlement agreement that lays out the alternatives that are acceptable at specific locations and the status of each of those alternatives. ADJOURNMENT Having no further business, the meeting was adjourned at 6:59 PM ATTEST: Lesley Milton-Rerig, Clerk of the Authority Bill Kampe, Authority Vice President Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, November 12, 2015 7