Monterey Peninsula Regional Water Authority

MINUTES MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA) Regular Meeting 7:00 PM, Thursday, December 10, 2015 COUNCIL CHAMBER MONTEREY, CALIFORNIA Directors Present: Rubio, Edelen, Pendergrass, Kampe, Burnett, Alternate Director Downey Directors Absent: Roberson Staff Present: Executive Director, Legal Counsel, Clerk ROLL CALL President Burnett called the meeting to order at 7:01 PM. Alternate Director Downey was present for Director Roberson. PLEDGE OF ALLEGIANCE REPORTS FROM BOARD DIRECTORS AND STAFF President Burnett invited reports from the Board and Staff. Executive Director Cullem reported that he attended the workshop on the externalities study at the Water Management District. He then welcomed Bill Connor, the legal counsel stand-in for Mr. Freeman, and Nova Swain, the Clerk understudy for Lesley Milton. President Burnett said that the cease and desist order (CDO) proposal that the board adopted at the last meeting was submitted to the State, and stated that there is now a prohibition on ex- parte communications with the Board and its staff. PUBLIC COMMENTS President Burnett opened public comments. Receiving no requests to speak he closed the public comments session. CONSENT AGENDA Executive Director Cullem requested that the minutes from November 12th, item #6, be changed to reflect that the City of Monterey contract be awarded on a fiscal year basis, not a calendar year basis. Mr. Cullem says this would change the dollar amount to $15,000, and extend contract to the end of the fiscal year on June 30th 2016.  MPRWA Minutes Thursday, December 10, 2015 Alternate Director Downey noted that she would be abstaining from items #1 and #2, approval of minutes, because she was not present for those meetings. On a motion by Director Pendergrass, seconded by Director Edelen, and carried by the following vote, except Items 1 & 2 from which Alternate Director Downey abstained, the Authority Directors approved Consent Agenda, with the correction of the dollar amount in the November 12th minutes to $15,000 for contract extension through June 30th: AYES: 6 DIRECTORS: Downey, Edelen, Kampe, Pendergrass, Rubio, Burnett NOES: 0 DIRECTORS: None ABSENT: 0 DIRECTORS: None ABSTAIN: 0 DIRECTORS: None RECUSED: 0 DIRECTORS: None 1. Approve Minutes from August 13, 2015 - Milton Action: Approved, Downey abstained 2. Approve Minutes from November 12, 2015 Action: Approved with change, Downey abstained 3. Approve and File Authority Checks Through December 10, 2015 Action: Approved 4. Receive Report on the November 17, 2015 Update of the California Public Utilities Commission (CPUC) Schedule for the Monterey Peninsula Water Supply Project Action: Approved 5. Terminate the Contract with the City of Seaside for Clerk of the Board and Financial Support Services for the Monterey Peninsula Regional Water Authority (MPRWA) as of Dec 31, 2015, Adopt Resolution 2015-06 Approving an Agreement with the City of Monterey for Those Services, and Authorize The Authority President to Execute a Contract with the City of Monterey for at a Price not to Exceed $15,000 for the Period January 1 to June 30, 2016 Action: Approved, adopted Reso 15-06 6. Approve Extension of the Separation Processes Inc (SPI) Contract Until 30 June 2016 for Additional Technical Support to the MPRWA and Authorize the Expenditure of Not-to- Exceed $10,000 from Reserve Funds Action: Approved Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, December 10, 2015 2  MPRWA Minutes Thursday, December 10, 2015 AGENDA ITEMS 7. Presentation of Certificate of Appreciation to Lesley Milton Action: Presented certificate President Burnett presented an award of appreciation to Lesley Milton who is retiring from MPRWA Clerk of the Board. Ms. Milton thanked the Board for the opportunity to serve the community. 8. Receive Report and Discuss the Status of the Pure Water Monterey (PWM) / Ground Water Replenishment (GWR) Project. Action: Received and discussed report Dave Stoldt, the General Manager of the Monterey Peninsula Water Management District (MPWMD), reported that Marina Coast Water District approved the pipeline agreement with the Monterey Regional Water Pollution Control Agency (MRWPCA). He also reported that the MRWPCA Board is considering a 2.4 million dollar contract to award bid packets for various design components for the project to be ready to go in July. He also said that the externalities study that Director Cullem attended made progress by pulling out the financial analysis and focusing solely on the non-project economics such as social or sustainable return on investment. Mr. Stoldt reported that most of the 9 criteria related to groundwater replenishment with Pure Water Monterey (PWM) have been met but that cost comparison remains the largest hurdle. He said the cost of PWM is $1,800-2,100 per acre foot and desal water is $3,000 per acre foot, and there isn’t enough recycled water to do everything so a desal plant with associated cost is required. He added that on December 15th there will be a filing for updated cost estimates. Mr. Stoldt invited questions from the Board. Alternate Director Downey asked about the status of the water purchase agreement with California American Water (CalAm). Mr. Stoldt responded that the work with CalAm has been cooperative and well attended although there is a slow response with CalAm. He also said that one issue is that CalAm is requesting a joint and severable liability between PCA and MPWMD, but neither party’s legal counsel will agree to that due to the operational and financial differences between the two agencies. Mr. Stoldt continued to say that the MPWMD doesn’t want to subordinate the agreement already in place with the growers by allowing CalAm to tap into the drought reserve. He added that overall most of the agreements have been executed and there is a draft agreement which might be done by December 31st. Alternate Director Downey questioned if another agency is added to the agreement later they will want some control. Mr. Stoldt replied that adding another agency will decrease the buffer of allocated water. He added that there may be additional water sources or annexations and pre- existing water rights that need to be factored in to the agreement. Alternate Director Downey asked President Burnett if the time in between meetings with CalAm could be reduced to encourage CalAm to be more efficient. President Burnett said the MPRWA is not centrally involved in those negotiations but that there are other agencies involved. Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, December 10, 2015 3  MPRWA Minutes Thursday, December 10, 2015 Dave Stoldt answered financial questions of the board. Dave Stoldt gave a report that MRWPCA is in the application pool for a state loan, and is applying for storm water grants to reduce the overall cost. 9. Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water Supply Project (MPWSP), including Award of Production Well and Conveyance System Contracts and Status of Test Slant Well Operations and Results. Action: Received and discussed report Catherine Stedman from CalAm Public Relations gave a report that the current schedule remains on track for project completion in 2019. She said the conveyance facility contract selections will be publicly available on December 11. President Burnett stated that the governance committee recommended a contract for source water slant wells close to the budgeted amount. Ms. Stedman replied that the contract is with the lowest bidder. 10. Receive Report, Discuss, and Revise the Mission, Purpose, and Sunset of the Monterey Peninsula Regional Water Authority Action: Adopted the position to sunset at the first production of water from the full portfolio of the MPWSP, and the lifting of the cease and desist order Executive Director Cullem reviewed the Monterey Peninsula Water Authority (MPRWA) mission, work plan, and duration of the Authority. He said there was a previous revision to the mission statement i.e., replace "Cities' water users" with "water users within the incorporated cities and unincorporated portions of the County". Mr. Cullem asked for the board to give feedback on the mission statement and work plan. President Burnett said the County had questions about the sunset date of the Authority. Director Rubio wondered what was meant by the County concern about "mission creep", and was unaware of the Authority adding projects or doing anything outside of the scope. President Burnett responded that the County did not have any specific examples of mission creeping from the Authority when they were asked. President Burnett opened public comments.  Jody Hansen from the Monterey Peninsula Chamber of Commerce, read from a letter in support of MPRWA from the Coalition of Peninsula Businesses. The letter supported the MPRWA not sun setting until the mission is accomplished Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, December 10, 2015 4 MPRWA Minutes Thursday, December 10, 2015 President Burnett responded to public comments, and asked for comments from the board. Director Edelen spoke in support of the Authority continuing until water is flowing. He suggested that working through the Local Agency Formation Commission of Monterey County (LAFCO) to form a Joint Powers Authority (JPA) between the affected agencies to replace the Water Management District could hold water officials accountable and ensure that taxpayer money is used to secure adequate water sources. Director Pendergrass agreed that the Authority was formed to accomplish a mission and should remain to collaborate with all the agencies and support each other. President Burnett said he suggests the option where the Authority sunsets at first production of water from the full portfolio of Monterey Peninsula Water Supply Project (MPWSP), GWR, enhanced ASR, and lifting of the CDO. Director Kampe suggested adding some milestones to reach by 2017 to ensure that the mission is on track. He also said the Authority should be alert once the water is flowing that its usage and allocation is appropriate and the community should have a voice through the Authority or the aforementioned JPA in the policy. President Burnett said that an Environmental Impact Report (EIR) will be necessary to govern how the water is allocated, and that process should begin sooner rather than later. Alternate Director Downey said the Authority needs to be careful how money is spent. She said that she supported the idea of looking into what LAFCO could do with regard to forming a JPA between the various agencies and MPWMD. She stated that Supervisor Potter said that the County was reluctant to join the Authority because it is spending too much money. She said that the Authority needs to be very careful when looking at the budget as to how the money is spent, and this should be a consideration when determining a sunset date. Director Rubio said LAFCO may not be the appropriate agency to collaborate with due to the Joint Powers Authority (JPA) special legislation. Alternate Directory Downey agreed that LAFCO may not be the correct agency to work with, but she would like to keep the idea of creating a JPA with the Water District on the horizon. President Burnett suggested that the Agency not take a position regarding the JPA issue at this time, and Director Rubio agreed, saying that some more milestones should be reached before addressing that matter. Alternate Director Downey said that augmenting the efforts of MPWMD through the formation of a JPA might be something to consider. Director Kampe said he sees the MPRWA working as collaborators with the MPWMD on how water is allocated and conserved. He would like to see the Authority assist businesses use water resources more efficiently. Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, December 10, 2015 5 MPRWA Minutes Thursday, December 10, 2015 Director Pendergrass opined he would like to have less frequent meetings and less repetition. Director Rubio made a motion for the Authority to adopt the position to sunset at the first production of water from the full portfolio of the MPWSP, and the lifting of the cease and desist order, this was seconded by Director Kampe. Alternate Director Downey asked to clarify if voting for the Authority to sunset at the first production of water from the full portfolio of water would be a concrete decision. Bill Connor stated that this would not be set in stone if the Authority decided in the future to vote again on a new sunset date. Alternate Director Downey said she could support the motion if it meant that it was not set in stone. The motion made by Director Rubio, seconded by Director Kampe for the Authority to adopt the position to sunset at the first production of water from the full portfolio of the MPWSP, and the lifting of the cease and desist order, passed unanimously. AYES: 6 DIRECTORS: Downey, Edelen, Kampe, Pendergrass, Rubio, Burnett NOES: 0 DIRECTORS: None ABSENT: 0 DIRECTORS: None ABSTAIN: 0 DIRECTORS: None RECUSED: 0 DIRECTORS: None The Board of Directors discussed whether to take action regarding the future formation of a Joint Powers Authority or merging with the Water Management District in some form. No action was taken with regard to that matter. ADJOURNMENT The meeting adjourned at 8:35PM. ATTEST: Nova Romero, Clerk of the Authority MPRWA President Monterey Peninsula Regional Water Authority Regular Meeting Minutes - Thursday, December 10, 2015 6