MP Regional Water Authority TAC Meeting

MINUTES MONTEREY PENINSULA WATER AUTHORITY (MPRWA) TECHNICAL ADVISORY COMMITTEE (TAC) Regular Meeting 2:00 PM, Monday, January 7, 2013 FEW MEMORIAL HALL OF RECORDS MONTEREY, CALIFORNIA Members Present: Huss, Israel, Narigi, Riley, Riedl, Stoldt, Siegfried, Reichmuth, Burnett Members Absent: None Staff Present: Legal Counsel, Monterey Assistant City Manager, Clerk of the Authority CALL TO ORDER ROLL CALL The Authority Clerk issued the Oath of Office for the new TAC Members Huss, Reichmuth and Seigfried. PLEDGE OF ALLEGIANCE REPORTS FROM TAC MEMBERS TAC Chair Burnett requested reports from TAC members including a brief introduction from the new TAC members. Members Huss, Siegfried and Reichmuth gave brief descriptions of their professional experience as it relates to local water issues. Member Narigi arrived at 2:05 p.m. PUBLIC COMMENTS Chair Burnett invited public comments for items not on the agenda. Libby Downey requested members to speak louder. Tom Rowley spoke representing the Monterey Peninsula Taxpayers association requesting information about the presentation to be made to the CPUC by Cal Am on Wednesday January 9th, 2013. Nancy Isakson Government Affairs Consultant for the Salinas Valley Water Coalition commented about the agenda availability on the website and encouraged a more visible location to post the agenda. She then pointed out that Dale Huss' company received the largest amount of recycled water in the region and wants the Authority to understand this could be a conflict. Ron Cohen questioned information that Cal Am agreed to make available prior to the January 9, 2013 presentation and asked if the MPRWA had access to it. With no further requests to speak, Chair Burnett closed public comment asked a representative of Cal Am to respond about how the January 9, 2013 meeting be facilitated and how to locate the requested document. A representative from Cal Am indicated that the Public Participation Hearing on January 9, 2013 will entail a presentation and opportunity for the public to give input to the consultants preparing the EIR. He said he would provide information about the format about the time and place after the meeting. Information regarding follow up documentation from the CPUC Cost workshop was waiting for testimony to be completed then will upload to the website www.MPWSP.org which currently has three documents available under the "download" section  MPRWA TAC Minutes Monday, January 7, 2013 but meeting notes need to be made available. APPROVAL OF MINUTES 1. November 19, 2012 Action: Approved On motion, the MPRWA Technical Advisory Committee approved the minutes of November 19, 2012. AYES: 6 MEMBERS: Stoldt, Riedl, Israel, Narigi Riley, Burnett NOES: 0 MEMBERS: None ABSENT: 0 MEMBERS: None ABSTAIN: 3 MEMBERS: Huss, Seigfried, Reichmuth RECUSED: 0 MEMBERS: None 2. December 3, 2012 Action: Approved On motion, the MPRWA Technical Advisory Committee approved the minutes of December 3, 2012: AYES: 6 MEMBERS: Stoldt, Riedl, Israel, Narigi Riley, Burnett NOES: 0 MEMBERS: None ABSENT: 0 MEMBERS: None ABSTAIN: 3 MEMBERS: Huss, Seigfried, Reichmuth RECUSED: 0 MEMBERS: None AGENDA ITEMS 3. Review and Provide Recommendation of State Water Board Memo Regarding Water Rights Action: Discussed Chair Burnett introduced the item referencing documents included in the agenda packet then opened the item for public comments. With no requests to speak, closed public comment and asked for comments from the members. Member Huss noted that a certain amount will need to be returned back questioned if other water sources be made available between now and then. Member Stoldt identified the fact that the modeling has not been done simulating confined conditions and questioned if they used a past EIR for modeling or not and indicated he will reevaluate and determine if the EIR did or did not do the model. Member Huss identified that the MCWRA modeled the underground basin and the 180 is the refined aquifer. What needs to be discussed is taking water out of the 180 basin may cause more harm than benefit. Member Israel recognized that the report lists alternatives if it is not feasible to return it all but found it encouraging that their recommendations allowed the generation of new model, things could change and it outlines a mechanism to deal with that. He identified that the Dana Point 2 MPRWA TAC Minutes Monday, January 7, 2013 facility has pumped for a number of years and has never reached equilibrium. Concerned that could be an issue with developing a model. Chair burnet opened the item for public comment. Tom Rowley representing the Monterey Peninsula Taxpayers Association spoke to the recent meetings and reports about the salt water intrusion into the aquifer and recent reports indicate that a few test wells will not be sufficient to determine if there will be impacts and he encouraged the TAC to study and obtain additional information before making any recommendations or decisions. Nancy Isakson spoke to Mr. Stoldt’s comments confined vs. unconfined modeling and spoke to a letter their hired hydrologist wrote to the State Water board discussing the inadequacy of the model. She then questioned the timeline to receive results from the test wells and encouraged Cal Am and the community to support targeting a water source outside of the Salinas Valley. With no further requests to speak, Chair Burnett closed public comment on the item and returned the discussion to the members. Burnett indicated that today the discussion is not seeking a conclusion but seeking to identify key questions and asked the TAC if there are other questions to be answered. The TAC identified the following items to be addressed:  Modeling: was it confined to a previous EIR  Is the future will the water be usable due to the increased tolerance of certain plants  What is the fraction of freshwater over time, what if this continues to change  Number of alleged deficiencies of the model, noted in the Tim Durbin Memo  Observation that the MCWRA is in the process of engaging in a 5 year study and how can we proceed while that study is under way Member Reily questioned the purpose of the report as it relates to the TAC and Director Burnett responded as the Authority gets closer to supporting a project conditionally, understanding this in more detail will inform the authority's determination, and if so how, do we want to engage further in the project. Who ultimately is the decision maker here? It's ultimately the courts. If this is challenged, what the State Water Board attempts to do, they will lay out the issues the court will look at. Member Riedl questioned if moving out of the 180 aquifer alleviated the water rights issue and could Cal Am move out of the 180 aquifer. The Cal Am representative responded that they are targeting the shallow well but if it does not work, then they will look to the 180 which will present legal paths forward, however there are remedies available but it calls for more information and Cal Am is hoping the slant test wells provide that information. Interim Director Meurer affirmed that the test wells will provide information however regardless of the data set provided, as long as there is a pass fail set prior, you will have to continue to look for information. He then expressed concern that unless the Cal Am project is just as aggressive at looking at an alternative intake system the region will run up against a solid wall against the timeline. A single test well, is not going to answer the questions the Salinas Valley people want which will end up in court, will last for years and our region will be lacking in water. Member Huss responded that the Salinas Valley Water Coalition and other interests will need to be part of that process and that it should be clear that causing any harm the Salinas Valley will not be tolerated. He encouraged the Regional Water Agency to be involved with oversight. 3  MPRWA TAC Minutes Monday, January 7, 2013 Chair Burnett said Cal Am needs to have a robust contingency plan being pursued on a parallel basis. Cal Am admitted that their contingency plan was not developed on the same level of detail. The Authority position is that is not advisable. Member Stoldt indicated that the memo talks about the physical solution can be decided by the courts without adjudication. Legal Counsel Freeman responded that it is possible but not applicable to the entire region. Adjudication to the Salinas Basin would take many years. Member Reichmuth clarified that the TAC was discussing two separate issues; the technical issue of can you get enough water out of either one of the water rights issue. Depending on the area selected, there may be no issues relating to water rights. Member Reichmuth then requested agendizing a detailed description of the test wells and a possible presentation from Cal Am at a future meeting. With no further discussion on the item, Chair Burnett moved on to the next agenda item. 4. Review and Provide Recommendation for Final Consultants Report: Evaluation of Seawater Desalination Projects Action: Chair Burnett introduced the item, presented a history of development of the report and said SPI is in the process of providing an addendum to include information that would have a material impact over schedule or costs. The report should be completed by the end of January, 2012. No action is necessary but he asked if the TAC to identify issues or concerns the Authority should be aware of. Chair Burnett answered questions from the TAC. TAC discussed sections in the report relating to financial comparisons and came to the conclusion, out of fairness to SPI consultants, the Authority did not request a financial comparison in the scope of work and indicated they were looking forward to the possibility of hiring a financial consultant that can address particular financial questions. Member Narigi indicated he was still concerned about the cost differential between the three projects as well as the demonstrated ability of the other two projects to be financially capable of completing the projects as proposed. He questioned any public private partnerships to date. Chair Burnett responded that financial capability is important and has been added to the project decision matrix. Member Reichmuth agreed with Member Narigi’s concerns and requested Cal Am to provide written documentation of their ability to qualify for public financing. He then expressed concern about the ability of the Deep Water Desal project to obtain permits to pipe water across Elkhorn Slough. Chair Burnett clarified that their site selection has changed and it no longer is an issue. Chair Burnett opened the item for public comment. Ron Cohen said that the SPI cost comparison was flawed in the comparison to other projects, because it compared each to the Cal Am project. He also said the report failed to look at the cost of water to the consumer. He then commented on the success of the Poseidon project. Bill Hood spoke that many of the questions presented should have been made at the draft stage and not the final report stage. He expressed concerns that the Authority is trying to accommodate Cal Am with more concessions than demands. He encouraged the Authority to maintain a relationship with all three at arm length. Dale Hekhuis questioned changes from a previous version fo the report and requested an explanation about the revised page including 4  MPRWA TAC Minutes Monday, January 7, 2013 why it was released and encouraged the Authority to write a memo about the Authority's position about this independent report. Tom Rowley spoke to the possibility of an addendum to the SPI report and questioned if someone with financial expertise was intending to look at the financial issues at the December 27th meeting. Jeff Linan, Director of Finance for Cal Am spoke to their primary proposal to obtain funding from three sources: 1) surcharge 2, the $99 million of funds during construction that would offset the costs to ensure no financing of the plant, 2) SRF funds estimated at 2.5% interest rate and 3) the common equity invested by Cal Am who would provide up to $20 million of financing to reduce the total costs. The weighted average of the source of financing, size of the plant, etc. will be between 3% and 4%. He indicated challenges with the formula which makes it hard to model after. Nelson Vega said that the only thing that the average consumer cared about was how much their cost of water will be. He expressed concern over Cal Am being involved in both the water owning and distribution business. Libby Downey questioned the status of the Cal Am project. Director Burnett responded to questions posed during public comment and returned discussion to the TAC and asked if there was a significant message or position that the TAC desired to be passed onto the Authority to which the members responded no, therefore he closed the discussion and due to time constraints, tabled the next two agenda items. 5. Discuss Framework for Decision Making Regarding Public Utilities Commission Testimony on Desalination Project for Testimony Due January 2013 and Provide Recommendation to Authority Board Action: Tabled 6. Discuss and Provide Recommendation of Options for Providing Source Water for Ground Water Replenishment Project Action: Tabled ADJOURNMENT With no more time to address the additional two agenda items, Chair Burnett adjourned the meeting. Respectfully Submitted, Approved, Lesley Milton, Clerk to the Authority MPRWA TAC Chair 5