mprwa special meeting agenda packet 11-12-15

8/20/2019 Mprwa Special Meeting Agenda Packet 11-12-15

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AgendaMonterey Peninsula Regional Water Authority (MPRWA)

SPECIAL MEETING

5:00 PM, Thursday, November 12, 2015

SEASIDE COUNCIL CHAMBER440 Harcourt AveSeaside, California

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

PUBLIC COMMENTSPUBLIC COMMENTS allows you, the public, to speak for a maximum of three minutes on anysubject which is within the jurisdiction of the MPRWA and which is not on the agenda. Any personor group desiring to bring an item to the attention of the Authority may do so by addressing theAuthority during Public Comments or by addressing a letter of explanation to: MPRWA, Attn:Monterey City Clerk, 580 Pacific St, Monterey, CA 93940. The appropriate staff person will contactthe sender concerning the details.

CONSENT AGENDA

1. Approve Minutes from August 13, 2015 - Milton

2. Approve Minutes from September 24, 2015 - Milton

3. Approve and File Authority Checks Through Nov 6, 2015 - Milton

4. Receive and Discuss if necessary, the Draft Letter the Governor's Military Council (GMC)sent through Admiral Dan Oliver on Nov 6, 2015

5. Receive Copy of Water Authority Financial Policies and Procedures adopted by the Authority Board on Mar 13, 2014

6. Adoption of Resolution 2015-XX, Approving Donald G. Freeman as Legal Counsel through December 31, 2016 and Authorizing the Authority President to Executea contract extension with Perry Freeman at a Price not-to-exceed $36,000.

7. Adoption of Resolution 2015-YY, Approving Brownstein Hyatt Farber Schreck as Special Legal Counsel through December 31, 2016 and Authorizing the Authority President toExecute a Contract Extension at a Price not-to-Exceed $100,000.

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 DecideWhether to Co-apply or Send A Letter of Support - Cullem

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Thursday, November 12, 2015

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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

ADJOURNMENT

The City of Monterey is committed to including the disabled in all of its services, programs andactivities. In compliance with the Americans with Disabilities Act, if you need special assistanceto participate in this meeting, please contact the City Clerk’s Office at (831) 646-3935.Notification 30 hours prior to the meeting will enable the City to make reasonable arrangementsto ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II]. Later requests willbe accommodated to the extent feasible. For communication-related assistance, dial 711 to usethe California Relay Service (CRS) to speak to City offices. CRS offers free text-to-speech, speech-to-speech, and Spanish-language services 24 hours a day, 7 days a week. If you require a hearingamplification device to attend a meeting, dial 711 to use CRS to talk to the City Clerk's Office at(831) 646-3935 to coordinate use of a device.

Agenda related writings or documents provided to the MPRWA are available for publicinspection during the meeting or may be requested from the Monterey City Clerk’s Office at 580Pacific St, Room 6, Monterey, CA 93940. This agenda is posted in compliance with CaliforniaGovernment Code Section 54954.2(a) or Section 54956.

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MINUTES

MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)Regular Meeting

7:00 PM, Thursday, August 13, 2015COUNCIL CHAMBER580 PACIFIC STREET

MONTEREY, CALIFORNIA

Directors Present: Edelen, Burnett, Kampe, Pendergrass, Rubio, Alternate Director DowneyDirectors Absent: None

Staff Present: Executive Director, Legal Counsel, Clerk

ROLL CALL

Vice President Kampe called the meeting to order at 7:00 PM.

President Burnett called in from a noticed location.

Alternate Director Downey was present for Director Roberson.

PLEDGE OF ALLEGIANCE


Vice President Kampe invited reports from the Board and Staff.

Executive Director Cullem reported that the Authority previously considered the final routing ofthe pipelines as part of the DEIR for the Monterey Peninsula Water Supply Project (MPWSP)and subsequently the City of Monterey sent a letter to the CPUC requesting consideration of athird alternate, less intrusive route. Additionally, he announced that Keith Van Der Matten wasappointed the General Manager of the Marina Coast Water District and is now a representativeon the TAC. He then reported that the letter to the CPUC regarding the Geo Science conflictapproved the 29th of July was mailed on July 30th. Lastly, he provided a letter to the Directorsfrom resident Bill Hood, to Cal Am General Manager Rob MacLean as a letter of public input.

PUBLIC COMMENTS

Vice President Kampe invited public comments

• George Riley expressed concern that the test well time period be too short for valuableinformation and requested the Sand City pumping data be considered.

• Tom Rowley, said the reason the Authority has been successful is that they approach allissues from an independent perspective and urged the Board to take up the issue Mr.Riley discussed.

• An individual presented an alternative to the pipeline route to reduce impacts to trafficand neighborhood.

• Doug Wilhelm congratulated the Mayors for undertaking a review of the deal projects.He hoped it was not just a show for the CPUC to prove the viability of Cal Am. Herequested agendizing a presentation on the Poseidon desalination facility.

CONSENT AGENDA


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MPRWA Minutes Thursday, August 13, 2015

Monterey Peninsula Regional Water Authority

Regular Meeting Minutes - Thursday, August 13, 20152

Executive Director Cullem requested tabling Item #4 because no updated schedule is available.

On motion by Director Pendergrass and seconded by Director Rubio and approved by thefollowing roll call vote the Authority Directors approved Consent Agenda Items 1 through 3 andtabling Item 4.

1. Approve the Minutes of July 9, 2015 Regular MeetingAction: Approved

2. Approve the Minutes of July 29, 2015 Special MeetingAction: Approved

3. Approve and File ChecksAction: Approved

4. Receive the Most Recent Update of the California Public Utilities Commission (CPUC)Schedule for the Monterey Peninsula Water Supply Project

Action: TabledAGENDA ITEMS

5. Receive an Update on the Summary Project Schedul e for the Monterey Peninsula WaterSupply Project (MPWSP), including Status of the Application to the Coastal Commission for anAmended Coastal Development Permit (CDP) to Resume Slant Test Well Operations, ReceiveResponses to Questions Provided to California American Water Company on July 29, 2015,Review the Table of Permits and Approvals, and Approve a Letter to Cal Am With Regard toSlant Well Financial Risk

Ian Crooks from Cal Am provided an update on the latest project schedule for the Monterey

Peninsula Water Supply Project (MPWSP), which reflected what is known in the EIR at thistime. He detailed the schedule of the pipeline and thinks the construction can be done in 15-18months and that Cal Am is working with the Design Build firm for efficiencies. Should bebreaking ground mid-2017. He then reported on the status on the application for the test slantwell. He then spoke to the responses to the questions posed by the Authority which were alsoincluded within the agenda packet. Mr. Crooks invited questions regarding the responses.

Mr. Crooks also supplied and explained a table of permits that are anticipated as necessary forthe MPWSP project, delineated by state, federal and local permitting agencies. Also includedin the schedule necessary key documentation and the purpose of the permit. He reportedworking with the TAC to review the permits in a Gant schedule noting many permits cannot becompleted until the CEQA/NEPA process is complete, but work can be done in anticipation. He

indicated that the Authority can assist with the anticipated schedule and assist with working withthe following agencies:

• FORA regarding the terminal reservoir• The City of Seaside for the transfer of land• TAMC regarding acquiring utility easements• Other local permits from the individual cities.


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Executive Director Cullem spoke to the draft letter prepared to send to Mr. MacLean regardingthe financial guarantee project slant wells. President Burnett added that the notion of the letteris asking Cal Am to guarantee that if the test well and does not turn into a production well, thatthe community would not need to pay for it. It's not appropriate for the community to bear thefull risk and costs.

Vice President Kampe invited comments from the public.

• George Riley agreed with President Burnett citing concerns regarding stranded costs herequested the Authority ask Cal Am to extend the time period for the test wells.

• Mr. Check expressed concern regarding the Dana Point well data that the amount ofiron and manganese will impacts production. He expressed concern that there is nochemical testing occurring which could have impacts to the operation of the plant.

• Jan Schriner speaking as a resident and not as a Board Member of the MCWD, likedthe direction of the letter, and wanted to see if there was a rate of return based onproduction instead of just the investment.

• Nelson Vega thinks Mr. Check's point is valid, but we don't know the full story aboutDana point. He also requested consideration of private company’s rights if they take arisk, they should get a return and that if we ask them to take on risk, we should bewilling to share risk. Please don’t lose sight of the goal to get the best price per acrefoot.

Director Edelen spoke to the regulatory hoops that are being required to jump through, are allself-inflicted by the State government. He spoke to a desal plant in the Middle East and that didnot destroy the environment. Director Rubio spoke to his previous comment that baseline datashould have been collected for a variety of reasons, and in regards to the letter, it is a goodidea and it should be sent but at the same time the risk is already being shared by thecommunity in many ways. Alternate Director Downey thought the questions and answersprovided are interesting, but expressed frustration that many responses actually had noanswers. She does not want to pay for mistakes, but encouraged moving quickly when there isa deadline.

Director Pendergrass motioned to authorize sending the proposed letter to Cal Am. It wasseconded by Director Edelen.

President Burnett requested a modification to the motion adding in the notion of stranded costs,and inclusion of comments with pumping efficiencies. The amendments to the motion wereaccepted.

The Authority Board discussed the Sand City intake and the efficiencies, water quality testingresults and the CPUC interpretation of the test wells if they would be considered stranded costsand cannot be recovered or if it is a necessary project request and can be recovered.

On motion by Director Pendergrass and Seconded by Director Edelen and passed by thefollowing vote, the Authority Board approved the inclusion of stranded costs into the letter withthe same tone and principal of the draft letter, based on the discussion and authorized staff tosend the revised letter to Cal Am.


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6. Receive Report, Discuss, and Provide Direction on Final Application to the State WaterResources Control Board (SWRCB) for a Cease and Desist Order (CDO) Extension Request,and Authorize the Authority President to Send a Comment Letter to the Board Staff on Its DraftResponse to the Cal Am Draft CDO Application

Executive Director Cullem spoke to the previous discussions of this item and indicated a draftresponse has been received on the draft application. Progress has been made but furtherreview and modifications are need which will be brought back to the Authority in the future.Secondly, Mr. Cullem requested the Board to authorize President Burnet to send a commentletter with respect to the draft responses to the State. Director Rubio expressed concern thatthe Authority has not agreed with drafting a combined letter with Cal Am and the WaterManagement District. His second concern is that before authorizing the comment letter, hewants to see the draft responses and this item is too premature.


• Ron Witezman questioned why we want to fine the rate as opposed to Cal Am.

• Tom Rowley agreed with Mayor Rubio regarding a co-petition citing that that theindependence of the Authority is crucial to the long term accomplishments.

• George Riley spoke in agreement of Mr. Rowley and Mr. Weitzman

• John Narigi representing the Coalition of Peninsula Businesses, pleased with theoutcome of the final document but remains concerned regarding fault imposed formissing the milestones. He spoke in support of unification of the Authority and theDistrict as long as it does not impact the protection of the community.

• Jan Shriner speaking as a Marina resident spoke to the confusion of the role ofgovernment vs business. Urged being careful of resenting state government forprotection of people's resources.

• Nelson Vega spoke in support of Mr. Narigi and Director Rubio to maintainindependence.

• Michael Baer expressed concern that the Authority is assuming risk by co-signing andthat it is contradictory to the letter they discussed previously.

Director Rubio reiterated that before authorizing to send a comment letter he requested to seethe letter and requested to continue both of the items.

On motion by Alternate Director Downey and seconded by Director Rubio and passed by theFollowing roll call vote the Authority Directors continued the item until more information isavailable.

7. Approve a Letter from the Water Authority to the Marina City Council Inviting Marina to Name aNon-voting Hydrogeologist to the MPWSP Hydrogeological Working Group (HWG)

Executive Director Cullem spoke to the item detailed within the letter provided in the packet.


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Vice President Kampe invited Comments from the public.

• Mark Baer spoke in support of allowing marina who will be impacted by the desal plant,and questioned Mr. Williams representation.

• Ron Weitzman questioned why the City of Marina and not Marina Coast Water District.

• Jan Shriner agreed with Mr. Weitzman's question and encouraged someone withhistoric information to help the CPUC understand, so there are no inaccurateassumptions made.

President Burnett answered the question about extending the invitation to the City of Marinabecause they are the permitting agency and it will benefit the Authority having the permittingagency involved to address questions early on and avoid permitting delays down the road. Hethen indicated Dennis Williams now represents Cal am, no longer the CPUC.

Director Downey questioned the paragraph that Marina can charge Cal Am and questioned theintent of the statement. Director Kamp requested changing on the wording of that sentence toeliminate "as long as the participation facilitated" and substitute with ______.

On motion by Alternate Director Downey and seconded by the Director Edelen and passed bythe following vote, the Authority Directors accepted the letter with the recommended changes.5-0-1, Pendergrass voted no.

Director Pendergrass did not agree with the motion as it complicates the process and doesn’tthink it is the right way to go.

8. Receive Presentation, Discuss, and Provide Staff Direction on the Deep Water Desal Project

Executive Director Cullem provided procedural instructions on how the presentations would befacilitated.

David Armanasco from Deep water Desal began by explaining they’re not in competition withCal Am but are a regional water solution for the Monterey area. He also shared that the StateLands Commission is the lead agency for the DWD EIR and the Monterey Bay National MarineSanctuary is the lead for the EIR. He assured the Directors that there is enough demand for thisproject without the Monterey Peninsula and the project continues to move forward. He notedthat Jim Heitzinger, legal counsel was present in the audience and can respond to permittingquestions. He then introduced the General Manager of Deep water Desal, Kim Adamson whoprovided the presentation. He spoke to her qualifications.

Ms. Adamson, spoke to their role as the back-up option for the WMD, they felt it was importantto do. She also clarified that there is no competition between projects. She provided a projectoverview/features detailing the desalination process, potential offtakes and explained the intakeand outfall strategy as well as the project schedule, the public/private partnership models andfinancing and then highlighted the risks and contingencies for the project. She indicated thatDWD has already done many of the required preliminary reports that will be required for theEIR so their timeline is extensively truncated.

Vice President Kamp recessed the meeting at 9:06 PM. The meeting was reconvened at 9:16PM and Mr. Kampe invited public comment on the item.


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• Mark Baer questioned the pipeline and the easement agreements for intake.• Ron Witezman requested clarification that they have an NOI and not a NOP.

Ms. Adamson responded to public comments that easements and permits for intake piping andeasements related to the Harbor District. She indicated the Harbor District said they would workwith them in fair dealings. They are going through Dynagy easements and confirmed that theydid an NOP according to the State Lands Commission.

Director Rubio questioned the estimated costs per acre foot and asked if that included aconveyance costs, and in the offtakers risk to which Ms. Adamson responded she does nothave pipeline estimates for the pipeline route to the Peninsula. No cost estimates are availablebut they are comparable. Alternate Director Downey questioned the total investment requiredand Ms. Adamson indicated they are not ready right now and it would be shared with potentialcustomers and partners based on specific parameters. Director Edelen questioned how difficultwould it be to increase demand for this project in the future to which Ms Adamsan said theremay be redundancies built in for future growth but growth was not included in the existing EIR.

Vice President Kampe questioned Monterey County's requirement to have public ownership ofdesal projects to which the first model falls under that ordinance and the second copies the CalAm project model. Legal Counsel Heitzinger responded that the ordinance will have to bereinterpreted or changed to allow. This model would reduce the risks discussed earlier, andbelieves that depending on the partner, it could significantly reduce the cost of water because itwill reduce the cost of debt and there are public policy reasons that they may want to reinterprettheir ordinance differently.

Executive Director Cullem indicated the Kennedy Jenks Study included costs and is available tothe Board and the TAC, which includes cost information, although somewhat dated. TheDirectors thanked DWD staff for their presentation.

9. Receive Presentation, Discuss, and Provide Staff Direction on the Peoples Desal Project

David Balch with the People's Moss Landing Desal project indicted that the largest differencesbetween the two projects is in the intake and the intake structure. Mr. Balch provided overviewof the project including the goals and objectives, the rehabilitation of existing infrastructure, theexisting water demands and needs, proposed project description, overview, the environmentalreview process and their draft schedule. He indicated that the project is designed to serve NorthMonterey County, and does not include growth and cited this project as being the simplestproject due to all existing infrastructure. Project Hurdles include project financing, long termand short term, pending litigation in foreclosure of the property, but indicated that they areworking with investors, easements with the Harbor Master as the outfall pipeline easementneeds to be extended due to the expiration. Mr. Balch answered questions of the Board.



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• Tom Rowley spoke to the need for a back-up project and it's good to hear other projectsare moving forward.

• Mr. Chevk agreed for the need for a back-up but also to create competition.• John Narigi agreed with competition but expressed concern regarding no information

about the cost of the project. He suggested the Authority resend the 8-9 questions andrequest the alternative projects to answer them factually and specifically.

• George Riley spoke to the SPI reports that Cal Am had a schedule advantage and sincethe advantage is gone we should be addressing who can get there the quickest and toignore other projects is missing an opportunity.

• Ron Witesman don’t be afraid of Cal Am they will not cut off our water Cal am.• Mark Baer it was a horse race for the regional failed project, let it continue.

Director Rubio expressed frustration with gaps and non-answers in terms of cost conveyanceand until we can compare with specifics, he finds it hard to make an informed decision.

The Directors thanked Mr. Balch for the presentation and acknowledged there is more to learnabout all of the alternative projects.

ADJOURNMENT

The meeting adjourned at 10:09 PM.

ATTEST:

Lesley Milton-Rerig, Clerk of the Authority Bill Kampe, Authority Vice President


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MINUTESMONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)

Regular Alternate Meeting7:00 PM, Thursday, September 24, 2015

COUNCIL CHAMBER580 PACIFIC STREET

MONTEREY, CALIFORNIA

Directors Present: Edelen, Kampe, Pendergrass, Rubio, Alternate Directors Downey andTalmage

Directors Absent: None

Staff Present: Executive Director, Legal Counsel, Clerk

CALL TO ORDER

Vice President Kampe called the meeting to order to 7:00 PM.


Executive Director Cullem indicated that staff had started the financial audit for FY 14-15. He alsoreported that the Authority is trying to coordinate a representative to attend the California CoastalCommission meeting in October for the test well. Vice President Kampe indicated he is availableand encouraged other Directors to attend. Finally, Mr. Cullem appreciated that the Directors wereable to attend this alternate session because agendized items are time sensitive. He furtherexplained that the Authority made it clear that they wanted to see the letters prior to distributionwhich are included in the packet. He additionally indicated that the CDO application will not beready for the Authority to consider the application and co-application, so we may or may not havethe October 8 meeting if there is no time sensitive actionable items. The goals is to give sufficienttime to review the draft and receive public comment or responses from Member City Councils. Thetentative date for is October 22nd at this time. Director Rubio informed the Board that he will be outof town October 21-23rd.

ORAL COMMUNICATIONS


• Tom Rowley thanked the Board for having an independent letter and thinks that it'simportant that the Authority retain its independence.

• A resident spoke representing Mark Del Piero who submitted a written comment regarding,water, desal, the slant well application and asked that no decision be made until the letter isreviewed.

CONSENT AGENDA

1. Approve and File Authority Checks Through September 24, 2015Action: Approved

Director Kampe invited public comment and had no requests to speak.


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Thursday, September 24, 2015 – Regular Alternate MeetingMonterey Peninsula Regional Water Authority

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On motion by Director Pendergrass, seconded by Director Rubio and passed by the following votethe Authority Board approved the Minutes of September 24th as presented. 6-0

2. Receive Letter from Cal Am President Rob Maclean in Response to Water Authority Letteron Financial Guarantee for the MPWSP Slant Wells

Pulled for public comment.

• Charles Chek spoke to the letter that states Cal Am denies responsibility for anything thatpertains to issues that the slant well does not perform to specifications, accept as afunctional slant well. If it is not meeting the criteria necessary to not damage aquifers, notcause damage to Salinas Basin, it is not meeting its need and should be rejected.

On motion by Director Rubio and seconded by Director Edelen and passed unanimously, theAuthority Board received the letter. 6-0

BUSINESS ITEMS

3. Receive, Discuss and Approve the Final Comment Letter to the California Public UtilitiesCommission (CPUC) on the Monterey Peninsula Water Supply Project DraftEnvironmental Impact Report - Cullem

Executive Director Cullem introduced the item explaining that a fourth paragraph was added byWater Counsel and President Burnett that includes information on basic modeling and return wateralternatives. He further explained that because there will be a recirculation of the DEIR, it willincorporate a maximum number of options for the public. This will likely be controversial, but it willavail us of the return water alternatives and there should be a benefit to the rate payers. Heexplained it is time sensitive because comments on the DEIR are due September 30th.

Vice President Kampe invited comments from the public

• Norm Grut, intervenor, said it adequately addresses and details of the return of water tosatisfy the water rights issues, as well as the Water Resource Agency Act. He expressedcaution with statements that it will reduce the price of the water.

• Tom Rowley spoke in support of the extended EIR comment period this this will assist withmaking the document more bulletproof.

• George Riley expressed concern regarding the cost of water, who would pay for it and whowould buy it. He then spoke to the chart on page 28 as misleading to the public as it may bethe design intent, but the slant well being used will not penetrated below the bay.

• Charles Chek expressed frustration that the current rate payers will pay to build the facilitybut that Cal Am can sell it later to those who never assisted with the production costs.

• Michael Baer commented on previous comments made, expressed frustration there was nodata from the test well collected in the first week, and disagreed that the chart is mis-leading. He questioned the availability of the letter.

Director Rubio was glad to see the revisions as well as additional opportunity to weigh in. Hequestioned the statement that it could result in operating savings, acknowledging the concerns ofthe public. He supported the letter that it will clarify the Authority position on the EIR. DirectorTalmage thinks that the paragraph four re-draft is reasonable and thorough.


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Director Edelen moved to approve the final comment letter and authorize staff to send it to theCPUC. Seconded by Director Rubio

Speaking on the second, Vice President Kampe responded to comments made by the public thatthe differential of the cost paid vs the cost to produce and questioned why the facility would produceenough water in excess of our needs. Executive Director Cullem spoke to the initial test well resultsand the quantities of water delineated in the settlement agreement, including the additional waternecessary for the replenishment of the aquifers and the Seaside Basin.

Passed unanimously. 6-0

4. Discuss the Status of the Cal Am Request to Resume Test Slant Well Operations andAuthorize Sending a Letter of Support to the California Coastal Commission Prior to itsConsideration of The Request on October 6, 2015. -Crooks

Ian Crooks from Cal Am reported that there is confirmation that the item will be heard at theCalifornia Coastal Commission in October and encouraged any support the community canprovide.

Vice President Kampe invited comments from the public and had no requests to speak.

Director Rubio moved that the letter be approved, and that the Authority Authorize staff to send theletter of Support to the Coastal Commission. Seconded by Vice President Kampe. Speaking on thesecond, Mr. Kampe requested that there be a wording change on paragraph 2, expressing concernthat when read, it implies a direct connection between the test well and the draw down, but it's notan accurate connection. The drop could be completely independent of the test well, as the dropcontinued after the test wells were shut off. Staff requested they be allowed the latitude to fix it orreplace with similar wording. As long as it does not change the intent of the letter, to support theaction, Director Rubio supported the motion change.

The motion was unanimously approved. 6-0

5. Approve Return of Excess Contributions for FY 14-15 and Approve a Reserve Fund for FY 15-16of Approximately $179,000 from Year-end Balances -Cullem

Executive Director Cullem presented the item and explained that there was less money spentduring the Fiscal Year due to the stalled projects and delays imposed by the CPUC. Additionally,the percent distributions have changed for fair share contributions and Mr. Cullem spoke to therevised FY 15-16 contribution percentages to satisfy the new budget approved from the Board. Heindicated the potential credits from the remaining funds from the previous fiscal year will allow for an"excess contribution" made by each of the Cities to cover the County of Monterey, and the fundsprovided by the County will be refunded as a credit to each of the member cities. There are still

expenses, and he is leery about returning funds because there is a lot happening on the front forthe CDO extension. He requested a creation of a reserve fund in exchange of returning funds tomember cities. Mr. Cullem answered questions of the Board.

Ms. Downey questioned why Monterey County would get credit when they didn't pay all of it. Mr.Cullem detailed all of the payments made by Monterey County, and the in-kind efforts made to theAuthority over the years. Mr. Cullem responded that he does not believe that we are going toreceive any additional funds from Monterey County.


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• Tom Rowley retracted statements regarding the County’s non-participation and thanked thestaff and Directors for efforts that resulted in a partial contribution. He spoke to the efficiencyof the Authority to have a budget under $300,000 annually.

On motion by Alternate Director Talmage and seconded by Director Rubio and passed byunanimous vote, the Authority Directors approved the return of excess contributions for FY 2014-15as credits and approved the creation of a reserve fund for FY 15-16 to contain the year endbalances. 6-0

ADJOURNMENT

Having no further business, the meeting was adjourned at 7:49 PM.

Respectfully submitted,

______________________________ ______________________________Lesley Milton-Rerig, City Clerk Bill Kampe, Authority Vice President


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Monterey Peninsula Regional Water AuthorityAgenda Report

Date: November 12, 2015

Item No: 1

FROM: Authority Clerk Milton

SUBJECT: Approval and File Authority Checks through November 6, 2015

RECOMMENDATION:

It is recommended that the Authority approve and file the accounts payable paymentsmade during the period September 18, 2015 through November 6, 2015 with totalpayments for the above referenced period of $42,113.19 from the general fund accountand authorize the Directors to sign for such checks.

DISCUSSION:

At its meeting on September 12, 2013, the Authority Board approved a staffrecommendation to provide the Directors a listing of financial obligations since the lastreport for inspection and confirmation. Each invoiced expense has been reviewed andapproved by the Executive Director and Finance personnel prior to payment to insure thatit conforms to the approved budget.

The following checks are hereby submitted to the Authority for inspection andconfirmation.

• $19,866.77 City of Monterey for Executive Director Reimbursement Quarter 32015

• $21,565.22 To Brownstein Hyatt Farber & Schreck for August, and SeptemberSpecial Counsel Legal Services

• $ 160.00 to Access Monterey Peninsula• $ 521.20 to Mayor Bill Kampe for travel expenses to CCC meeting

The bank balance as of November 6, 2015 is sufficient cover the above check therefore,staff is recommending approval.

ATTACHMENTS:• Budget to Actual Report through November 6, 2015


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1:29 PM 11/03/15 Accrual Basis

Monterey Peninsula Regional Water Authority Profit & Loss Budget vs. Actual

July 1 through November 3, 2015

Jul 1 - Nov 3, 15 Budget $ Over Budget

Ordinary Income/Expense

Income

47200 · Program Income

47230 · Membership Dues 0.00 137,000.00 -137,000.00

47240 · Program Service Fees 0.00 0.00 0.0047250 · Reimbursement SPI Contract 0.00 0.00 0.00

47260 · Reimburesment VE Contract 0.00 0.00 0.00

47200 · Program Income - Other 0.00 0.00 0.00

Total 47200 · Program Income 0.00 137,000.00 -137,000.00

49900 · Uncategorized Income 0.00 0.00 0.00

Total Income 0.00 137,000.00 -137,000.00

Expense

60900 · Administration and Clerical

60901 · Clerk of the Board 0.00 24,000.00 -24,000.00

60902 · Executive Director 0.00 85,000.00 -85,000.00

60903 · Principal Offc of the Authority 0.00 5,000.00 -5,000.00

60904 · Financial Services 0.00 6,000.00 -6,000.00

60905 · Misc Admin Expenses 0.00 500.00 -500.00

60900 · Administration and Clerical - Other 0.00 0.00 0.00

Total 60900 · Administration and Clerical 0.00 120,500.00 -120,500.00

62100 · Legal Fees

62110 · Board Counsel 10,000.00 36,000.00 -26,000.00

62140 · Special Counsel 20,293.90 100,000.00 -79,706.1062100 · Legal Fees - Other 0.00 0.00 0.00

Total 62100 · Legal Fees 30,293.90 136,000.00 - 105,706.10

62800 · Contract Services

60801 · Public Outreach 50.00 0.00 50.00

60806 · Contract VE 0.00 0.00 0.00

62802 · Audit Services 0.00 6,000.00 -6,000.00

62803 · Televised Meeting 1,162.50 5,000.00 -3,837.50

62804 · Contract Services & Studies 0.00 0.00 0.00

62805 · Contract SPI 0.00 0.00 0.00

62800 · Contract Services - Other 919.80 0.00 919.80

Total 62800 · Contract Services 2,132.30 11,000.00 -8,867.70

65000 · Insurance 6,438.48 7,500.00 -1,061.52

65100 · Travel Expenses 0.00 5,000.00 -5,000.00

66000 · Payroll Expenses 0.00 0.00 0.00

68300 · Contingency 0.00 10,000.00 -10,000.00

Total Expense 38,864.68 290,000.00 -251,135.32

Page 1 of 4


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Jul 1 - Nov 3, 15 Budget $ Over Budget

Net Ordinary Income -38,864.68 -153,000.00 114,135.32

Other Income/Expense

Other Income47220 · Interest Earned 0.11 0.00 0.11

Total Other Income 0.11 0.00 0.11

Other Expense

80000 · Ask My Accountant 0.00 0.00 0.00

Total Other Expense 0.00 0.00 0.00

Net Other Income 0.11 0.00 0.11

Net Income -38,864.57 -153,000.00 114,135.43

Page 2 of 4


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Ordinary Income/Expense

Income

47200 · Program Income

47230 · Membership Dues

47240 · Program Service Fees47250 · Reimbursement SPI Contract

47260 · Reimburesment VE Contract

47200 · Program Income - Other

Total 47200 · Program Income

49900 · Uncategorized Income

Total Income

Expense

60900 · Administration and Clerical

60901 · Clerk of the Board

60902 · Executive Director

60903 · Principal Offc of the Authority

60904 · Financial Services

60905 · Misc Admin Expenses

60900 · Administration and Clerical - Other

Total 60900 · Administration and Clerical

% of Budget

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

62100 · Legal Fees

62110 · Board Counsel

62140 · Special Counsel62100 · Legal Fees - Other

Total 62100 · Legal Fees

62800 · Contract Services

60801 · Public Outreach

60806 · Contract VE

62802 · Audit Services

62803 · Televised Meeting

62804 · Contract Services & Studies

62805 · Contract SPI

62800 · Contract Services - Other

Total 62800 · Contract Services

65000 · Insurance

65100 · Travel Expenses

66000 · Payroll Expenses

68300 · Contingency

Total Expense

27.78%

20.29%

0.0%

22.28%

100.0%

0.0%

0.0%

23.25%

0.0%

0.0%

100.0%

19.39%

85.85%

0.0%

0.0%

0.0%

13.4%

Page 3 of 4


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Net Ordinary Income

Other Income/Expense

Other Income47220 · Interest Earned

Total Other Income

Other Expense

80000 · Ask My Accountant

Total Other Expense

Net Other Income

Net Income

% of Budget

25.4%

100.0%

100.0%

0.0%

0.0%

100.0%

25.4%

Page 4 of 4


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Item No: 4.

№ 06/12

FROM: Executive Director Cullem

SUBJECT: Receive and Discuss the Draft Letter to the Governor's MilitaryCouncil (GMC) sent through Admiral Dan Oliver on Nov 6, 2015.

RECOMMENDATION:

It is recommended that the Water Authority Board receive and discuss theattached draft letter prepared for the Governor's Military Council.

DISCUSSION:

The Water Authority was requested to prepare a letter to the GMC whichrequested the Governor to insure State agencies involved with review andapproval of the extension of Cease And Desist Order (CDO) 2009-0060and of the Monterey Peninsula Water Supply Project (MPWSP) beparticularly attentive to the water needs of the Naval Post Graduate School(NPGS) and the Defense Language Institute (DLI) in light of the next roundof Base Reduction and Closure (BRAC) expected in 2017.

The draft letter was forwarded to Admiral Dan Oliver, President of theNaval Post Graduate School, who was scheduled to meet with the GMCthe week of November 2. Since time was of the essence, the draft wasforwarded to Adm. Oliver on November 3, 2015.

ATTACHMENTS:

• Draft letter to the GMC dated November 3, 2015• History of the Monterey Peninsula Water Supply Project and theGroundwater Replenishment Project


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580 PACIFIC ST, ROOM 6 · MONTEREY · CALIFORNIA · 93940 · www.mprwa.org ·

DRAFTMONTEREY PENINSULA REGIONAL WATER AUTHORITY

November 3, 2015

Governor's Military Councilc/o Vice Admiral Daniel Oliver

Directors:Jason Burnett, President

Bill Kampe, Vice PresidentDavid Pendergrass, Secretary

Jerry Edelen, TreasurerRalph Rubio, Director

Clyde Roberson, Director

Executive Director:Jim Cullem, P.E.

Re: Water Supply Concerns Relating to the Monterey Peninsula’s MilitaryInstallations

Ladies and Gentlemen:

The Monterey Peninsula Regional Water Authority (“Water Authority”) is a joint powersagency comprised of the six cities encompassing the Monterey Peninsula. As the WaterAuthority’s President, I request your assistance in resolving water supply constraintsfacing the Monterey Peninsula and its two military facilities, the Naval PostgraduateSchool (“NPS”) and the Defense Language Institute (“DLI”). Specifically, I request that theGovernor’s Military Council work with the Governor’s Office to: (1) communicate the waterneeds of NPS and DLI to the State Water Resources Control Board (“SWRCB”), whichwill soon be considering a short-term solution to the Monterey Peninsula’s water supplylimitations; and (2) monitor and take all appropriate actions to expedite the water supplyprojects discussed below to afford a long-term solution.

The Monterey Peninsula faces significant, but solvable, water supply issues. Our primarywater supply is derived from the underflow of the Carmel River, which is supplemented toa lesser extent by groundwater from the Seaside Groundwater Basin. The SWRCB hasordered our water supplier, California American Water Company (“Cal-Am”), to eliminateapproximately three-quarters of its historical diversions from the Carmel River and hasestablished a deadline of January 1, 2017 to do so. 1 The groundwater supply from theSeaside Groundwater Basin is also restricted by court order to reduce and ultimatelyeliminate present overdraft of the basin.

1 In 1995, the SWRCB determined that: (i) based on the hydrogeologic character of the Carmel RiverValley, the SWRCB possesses jurisdiction over the groundwater supply within the valley diverted by Cal-Am; (ii) Cal-Am’s diversions are unpermitted, and therefore all of its diversions commenced after 1914(when the Water Commission Act was enacted) are unauthorized; and (iii) Cal-Am’s diversions areadversely affecting the river’s riparian ecosystem. These ecological impacts include reduced river flows thatsupport numerous species including the Central California Coast Steelhead, a threated species under theEndangered Species Act.


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Governor's Military Council - DRAFTNovember 3, 2015Page 2

The state’s deadline for Cal-Am to cease its unauthorized Carmel River diversions wasestablished in a cease and desist order issued in 2009 (CDO 2009-0060). Cal-Am, withassistance from community representatives, has sought to develop a replacement watersupply for its unauthorized diversions from the Carmel River. Unfortunately, for variousreasons, a replacement water supply will not be in place by the time that the CDO’spresent deadline would become effective in 2017.

As a long-term solution, two water supply projects are being designed and permitted,which we anticipate to be available to substitute for Cal-Am’s unauthorized diversionsfrom the Carmel River by 2020. These projects are: (1) a desalination project referred toas the Monterey Peninsula Water Supply Project (“MPWSP”); and (2) a groundwaterreplenishment project (“GWR”), formally called the Pure Water Monterey project, whichwill use advanced treated waste water to replenish the Seaside Groundwater Basin forsubsequent recapture and use.

As a short-term solution, Cal-Am intends to file a petition with the SWRCB later thismonth to request a modification of the CDO’s 2017 deadline. The Water Authority and theWater Management District may join in the petition if agreed to by their respective boards.Most of the details of the proposed CDO extension have been worked out following morethan two years of negotiations among community representatives, SWRCB staff, andenvironmental organizations. In short, the proposal would extend the 2017 deadline byfour years in exchange for a partial reduction in Cal-Am diversions next year coupled witha “stairstep” schedule of additional reductions that would become effective over the nextfive years, unless specified MPWSP/GWR milestones are met. In other words, theMonterey Peninsula may avoid the most severe water supply reductions over the next fiveyears, but only if timely progress is made on a replacement supply. We believe theextension proposal represents an appropriate compromise of the competing social,economic, and environmental interests affected by Cal-Am’s near-term river withdrawalsand also establishes a strong incentive for Cal-Am and local and state interests toexpedite the MPWSP and GWR projects.

I will provide a copy of the petition to the Council when it is finalized later this month. If theCouncil concurs with the proposed terms of the CDO extension, the Water Authorityrespectfully requests that the Council work with the Governor’s Office to encourage theSWRCB to grant the petition. We also urge the Council to apprise the SWRCB of thewater needs of the NPS and DLI and the installations’ essential importance to the welfare

of California and our nation’s military.2

The CDO extension, if adopted, affords the Monterey community with a “bridge” watersupply while the replacement water supply projects proceed. Of course, the importance oftimely completion of these projects cannot be understated. Unfortunately, for a host ofreasons, delays have accompanied both projects, principally the MPWSP. 3 Further delays

2 NPS is developing key defense capabilities in cyber-security, asymmetric warfare, operations researchand nano-technology. DLI is the foundation of U.S. intelligence capability and key to our nation’s homelandsecurity efforts.3 A more detailed history of the projects is set forth in the attached chronology.


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Governor's Military Council - DRAFTNovember 3, 2015Page 3

will cause significant adverse impacts to the area’s water supply. A failure to satisfyproject milestones will result in substantial reductions to Cal-Am’s Carmel Riverwithdrawals under the terms of the CDO extension, assuming it is adopted. In addition,the projects must be fully operational by 2020 to substitute for the unauthorized CarmelRiver diversions when the CDO extension terminates.

The Water Authority respectfully urges the Council to monitor the permitting of theMPWSP and GWR, and, together with the Governor’s Office, make every effort to supporttimely progress on these critically important projects. Upon your invitation, I wouldwelcome the opportunity to further brief the Council on the status and schedule of theprojects and to discuss the ways in which the Council and Governor’s Office couldsupport timely progress on the projects.

The Monterey Peninsula’s mayors, who are also the directors of the Water Authority,recognize the significant role that the NPS and DLI play in our nation’s militarypreparedness and our community’s social and economic wellbeing. These facilities arekey economic and technology generators in our region and in California as a whole. Asdiscussed above, viable short- and long-term solutions are available to ensure reliablewater supplies for these facilities. However, extensive collaboration between local andstate government is needed to ensure that the CDO extension is adopted and that theprojects proceed expeditiously.

Thank you for considering these comments and requests for assistance. I look forward tofurther discussing these issues with the Council. I also would be happy to participate inany statewide effort that is mobilized to address the implications of water supply toCalifornia’s military facilities.

Sincerely,

Jason BurnettPresident, Monterey Peninsula Regional Water Authority

Enclosure: History of the Monterey Peninsula Water Supply Project and the GroundwaterReplenishment Project


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580 PACIFIC ST, ROOM 6 · MONTEREY · CALIFORNIA · 93940 · www.mprwa.org ·

Enclosure:History of the Monterey Peninsula Water Supply Project

and the Groundwater Replenishment Project

The California American Water Company (Cal Am) is facing serious hurdles in providing potablewater to customers in its Monterey Peninsula area due to several significant regulatory and court-ordered restrictions affecting the two primary water sources available to Cal Am.

The first was a conclusion in 1995, by the State Water Resources Control Board (SWRCB) OrderWR 95-10, that 2/3 of Cal Am's long utilized extraction of water from the Carmel River basin wasillegal and adversely affected the public trust resources of the river. Subsequent efforts to getvoter and regulatory approvals for a new dam on the Carmel River or for a desalination project(Desal) at Moss Landing were unsuccessful. In 2009, the SWRCB issued Cease and DesistOrder CDO 2009-0060 mandating that Cal Am eliminate its illegal take by January 1, 2017.

Second, in 2006, the Seaside Basin Aquifer, Cal Am's only significant alternate water supplyother than the Carmel River, was adjudicated with subsequent restrictions on all users, includingCal Am, until the basin overdraft was corrected. This adjudication requires a step down of takefrom the Seaside Basin over time, which further limits Cal Am's ability to obtain a water supply forthe Monterey Peninsula area.

In 2010, Cal Am entered a public private partnership with the Marina Coast Water District(MCWD) and the Monterey County Water Resources agency (MCWRA) to construct and operatea Regional Desal Facility north of Marina. In 2012, for a variety of reasons, not the least of whichwas the inability to secure groundwater rights to brackish feed water from the Salinas RiverBasin, that partnership fell apart.

On April 23, 2012, Cal Am filed an application with the California Public Utilities Commission(CPUC) to construct a Monterey Peninsula Water Supply Project (MPWSP) including a Desalfacility north of the City of Marina and drawing feed water from Monterey Bay. A complicatingfactor has been the requirement of State agencies for Cal Am to obtain source water fromMonterey Bay by subsurface intakes versus open-water intakes, a relatively untested approachinvolving the construction of slant wells, one of which has already been constructed for testingpurposes. The MPWSP also included supplemental but relatively small additional water suppliessuch as aquifer storage and recovery (ASR) and recycled water projects in the City of PacificGrove.

Twenty-two interveners entered the process, and sixteen of these ultimately agreed to aproposed settlement agreement which allowed for either a 9.6 million gallon per day (MGD) desalfacility, or "variant" which consists of a 6.4 MGD desal along with a Monterey Regional WaterPollution Control Agency (MRWPCA) 3.2 MGD wastewater recycling facility, known as the PureWater Monterey/Groundwater Replenishment project (PWM/GWR). The MPWSP DEIR identifiesthe variant as the environmentally superior alternative. The GWR EIR has been completed andcertified and could produce water as early as 2018. The project awaits finalization of an umbrella


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2

agreement with participating public agencies and funding through the State Revolving Fund(SRF).

The MPWSP environmental review has run into a delay due to some conflict of interest issues

with the EIR consultant. The CPUC is trying to resolve the problem in a timely way. To facilitateits resolution, the DEIR will be re-circulated with the EIS in 2016. Following testimony from thesettling parties and others, the Certificate of Public Convenience and Necessity (CPCN), neededto authorize Cal Am to build the MPWSP, should be issued by the CPUC at the end of 2016. Ascurrently scheduled, the MPWSP should be complete and operational by the end of 2020.


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Item No: 5.

№ 06/12


SUBJECT: Receive Copy of Water Authority Financial Policies andProcedures Adopted by the Authority Board on March 13, 2014.

RECOMMENDATION:

It is recommended that the Water Authority Board receive a copy of the

MPRWA Financial Policies and Procedures.

DISCUSSION:

In response to questions concerning the "whistle-blower" policy of theMPRWA, staff has enclosed a copy of the Financial Policies andProcedures that were adopted by the Board on March 13, 2014. Thewhistle-blower policy is contained therein.

ATTACHMENTS:

A- MPRWA Financial Policies and Procedures


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13.2 Authority Funding and Contributions. For the purpose of funding the expenses andongoing operations of the Authority, the Board of Directors shall maintain a funding account inconnection with the annual budget process. The Board of Directors shall issue assessments forcontributions by the Members to fund said account in the amount and frequency determinednecessary by the Board. Assessments for Member contributions shall be made by each Member

in proportion to the weighted vote of each member as determined pursuant to Section 8.2, andtherefore no Member shall be required to make contributions to the Authority in excess of thatportion of each assessment that is equivalent to the weighted vote possessed by its Director.Such contributions shall be paid by each Member to the Authority within sixty (60) days ofassessment by the Board.

13.3 Return of Contributions. In accordance with Government Code section 6512.1,repayment or return to the Members of all or any part of any contributions made by Membersand any revenues by the Authority may be directed by the Board of Directors at such time andupon such terms as the Board of Directors may decide; provided that (1) any distributions shallbe made in proportion to the contributions paid by each Member to the Authority, and (2) anycapital contribution paid by a Member voluntarily, and without obligation to make such capitalcontribution pursuant to Sections 13.2, shall be returned to the contributing Member, togetherwith accrued interests at the annual rate published as the yield of the Local Agency InvestmentFund administered by the California State Treasurer, before any other return of contributions tothe Members is made. The Authority shall hold title to all funds and property acquired by theAuthority during the term of this Agreement.

ARTICLE 6-BY-LAWS

FINANCE POLICY

6.1 Deposit and Disbursement of Funds All funds of the Authority shall be deposited in one ormore depository accounts as may be designated by the Board. Such accounts shall beindependent of any account owned by or exclusively controlled by any of the Members. Nodisbursements of such funds shall be made unless the same shall have been approved in theannual operating budget, or otherwise specifically approved by the Board. All disbursementsshall be by check. Disbursements of not more than five thousand dollars ($5,000) may beissued pursuant to the Treasurer's sole signature. Disbursements in excess of five thousanddollars ($5,000) may only be issued upon the signature of the Treasurer and President, or in thePresident's absence, the Vice-President.

FINANCIAL RESPONSIBILITIES AND PROCEDURES1. RESPONSIBILITIES OF AUTHORITY STAFF

It is the responsibility of the Board of Directors to formulate financial policies and review operations andactivities on a periodic basis. It is the responsibility of the Executive Director to implement all financialpolicies and procedures and coordination of the following: Annual budget presentation, managementof the contracts and expenditures, monitoring accounts receivables, and approving revenue andexpenditure objectives in accordance with the Board approved expenditures and budget.


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The Executive Director, Clerk and Finance Specialist have the day-to-day operations responsibility formanaging agency funds, ensuring the accuracy of the accounting records, internal controls, financialobjectives and policies, financial statement preparation, and bank reconciliation review and approval.

The Finance Specialist, supervised by the Clerk, is responsible for the preparation of the accountspayable processing, cash receipts input, journal entries for general ledger, form 1099 reporting, as wellas bank reconciliations.

1.c General Journal Entry Procedures, Expenditures and Disbursements

The following procedure is to ensure timely and correct payments to vendors and contractors whoprovide the Authority with services; to assure that no disbursement of agency monies shall be madeunless the obligation is supported by accounting evidence in proper form, and to ensure that sufficientmoney is available to make disbursements.

All expenditures shall be approved by either Board Action, or by the Executive Director through the

powers granted to him in the By-laws.

All disbursements for the authority will be made by check outlined in the process below.

Once an invoice is received, it is reviewed and approved by the Director, or staff member initiating theservice contract or monitoring the contractor performance. Once approved, a written approval issubmitted to the Clerk to verify it was an approved board action and the expenditure is recorded againstthe current adopted budget.

The Clerk will forward the approved invoice to the Finance Specialist for check processing. Once thecheck is processed, it is provided to the Clerk, along with all supporting documentation who will thendeliver to the directors for signature as required by the check signing policy as listed in the By-laws.

Upon payment of a bill, a copy of the check shall be stapled onto the bill with supporting documentationand expenditure authority. The paid invoices shall be filed alphabetically according to vendor name andshall be kept on a fiscal year basis on file.

1.a Tracking of Maximum Funds Allowed per Contractual Agreements.

The Executive Director is responsible to maintain a listing of existing contractual agreements, includingthe total allow able expenses and track all amounts paid per contractual agreements as part of the cashdisbursement approval process to ensure contractual agreements are followed and the Authority hasthe sufficient funds to operate.

1.e Accounts Receivable Aging Report Review & Collection

On a monthly basis, the Financial Specialist will complete an initial review of the aging report and thensend it to the Executive Director for follow up. This continuous review of the accounts receivable ledgeralong with the implementation of a collection process will reduce the amount of delinquent receivables.

1.b Bank Reconciliations and Final Close Process


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Bank reconciliations shall be completed monthly by the Finance Specialist and cross-referenced withthe paid invoices. The monthly reconciliation shall be reviewed by either the Clerk of the ExecutiveDirector and cross-referenced with the adopted budget. A final year-end reconciliation will be done byJuly 15 th for the previous fiscal year.

1.d Budget to Actual Review

A budget to actual review will be reviewed by the Executive Director and presented to the Boardquarterly to make sure the Authority has the flexibility to fulfill their mission statement with little to nofinancial constraints.

1.f Managerial Review of Accounting Reports

The Executive Director is responsible to review all accounting reports for the Authority at least quarterlyto ensure all invoices, disbursements, encumbrances and budget to actual reports are on track for theyear and no budget line items have been exceeded without approval by the Directors.

2. ANNUAL BUDGET

The structure of the annual budget will be formatted to resemble the format of the financial statements.This will allow for more useful comparisons between the budgeted and annual financial information aswell as more meaningful and precise analysis of budget variances.

3. WHISTLEBLOWER POLICY

This whistleblower policy is included to ensure no retaliation occurs if and when an individual makes agood-faith report of fraud or any other illegal action. It is the responsibility of all agency representativesto report violations or suspected violations in accordance with the Whistleblower Policy.

Suspected violations shall be reported to the Board President, or in is absence, the Board Vice-President.

All representatives of the Authority, including Directors, TAC Members and Staff are expected toobserve high standards of business and personal ethics in the conduct of their duties andresponsibilities. As representatives of the Authority, we must practice honesty and integrity in fulfillingour responsibilities as well as comply with all applicable laws and regulations.

No representative, who, in good faith, reports a violation, shall suffer harassment, retaliation or adverseemployment consequence.


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Item No: 6.

№ 06/12


SUBJECT : Adoption of Resolution 2015-XX, Approving Donald G.Freeman as Legal Counsel through December 31, 2016 andAuthorizing the Authority President to Execute a ContractExtension with Perry Freeman at a Price not-to-exceed$36,000

RECOMMENDATION:

It is recommended that the Monterey Peninsula Regional Water Authority(MPRWA) adopt Resolution 2015-XX approving Donald G. Freeman aslegal counsel through December 31, 2016 and authorizing the AuthorityPresident to execute a contract extension with Perry Freeman at a pricenot-to-exceed $36,000.

DISCUSSION:

Following a formal Request for Qualifications (RFQ) for legal services forthe Water Authority conducted during August and September 2012, an Ad-Hoc committee of the MPRWA recommended selection of Perry andFreeman (Donald G. Freeman). On September 27, 2012, the WaterAuthority adopted a resolution selecting Mr. Freeman to be legal counsel.On December 10, 2012, Mr. Freeman provided the Water Authority withwaivers of conflict of interest from all other participating jurisdictions towhich he has professional, contractual obligations.

Due to Don Freeman's extensive knowledge of the water supply issues thatthe Water Authority has dealt with the last three years, and in light of hisexcellent performance in the position of Authority Counsel, the ExecutiveDirector recommends the Authority maintains continuity with Donald G.Freeman, at least through 31 December 2016.


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The adopted budget for FY 2015-16 includes $36,000 for Legal Counselwhich should be adequate for services through June 30, 2016, by whichtime a new budget for FY 2016-17 will have been adopted.

Resolution 2015-XX approves an extension of Donald G. Freeman asAuthority legal counsel through December 31, 2016 and authorizing theAuthority President to execute a contract extension accordingly.

ATTACHMENTS:

Resolution 2015-XX

Contract for legal services


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MPRWA RESOLUTION NO. 2015-XX

A RESOLUTION OF THE MONTEREY PENINSULA REGIONAL WATER AUTHORITYACKNOWLEDGING DONALD G. FREEMAN AS LEGAL COUNSEL FOR THE MONTEREYPENINSULA REGIONAL WATER AUTHORITY AND AUTHORIZING THE PRESIDENT TO

EXTEND A CONSENT AND WAIVER OF CONFLICT OF INTEREST

WHEREAS, Donald G. Freeman has been requested to continue to represent theMonterey Peninsula Regional Water Authority (MPRWA);

WHEREAS, Donald G. Freeman is currently the City Attorney for the City of Seaside andthe City of Carmel-by-the-Sea;

WHEREAS, Donald G. Freeman and MPRWA recognize the potential conflict of interestwhich may arise as a result of Donald G. Freeman’s legal representation of MPRWA, City ofSeaside, and the City of Carmel-by-the-Sea;

WHEREAS, MPRWA wishes to acknowledge Donald G. Freeman as legal counsel forMPRWA;

WHEREAS, the President of MPRWA and members of the MPRWA Board of Directorshave reviewed a letter from Donald G. Freeman dated November 20, 2012, indicating that Mr.Freeman does not believe that his legal services for the Monterey Peninsula Regional WaterAuthority will have any impact on his full and effective representation of each party, and doesnot believe he has knowledge of any confidential information from any party which would bematerial or relevant to his representation of MPRWA, the City of Seaside, and the City ofCarmel-by-the-Sea;

WHEREAS, Donald G. Freeman recognizes that by concurrently representing theMPRWA, the City of Seaside, and the City of Carmel-by-the-Sea an issue of divided loyalty,such as in litigation, could possibly arise at some future date, and that at that time it could benecessary for him to make full disclosure to all parties, could be subject to disqualification fromrepresenting any party, and at such time it would be necessary for each party to seekindependent legal counsel;

WHEREAS, the City of Carmel-by-the-Sea and the City of Seaside have passed theirrespective Resolutions and their respective Mayors have executed the Consent and Waiver ofConflict of Interest;

WHEREAS, the President and Board of Directors have reviewed this request with

independent legal counsel;

WHEREAS, according to Rule 3-310 of the California Rules of Professional Conductapplicable to California lawyers which requires informed written consent of all representedparties because of concurrent representation, MPRWA recognizes that Donald G. Freeman isthe City Attorney for the City of Seaside, and for the City of Carmel-by-the-Sea;

WHEREAS, the Board of Directors has been fully satisfied with the performance ofDonald G. Freeman during the period of his tenure as Authority legal Counsel between


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September 27, 2012 and the present;

WHEREAS, due to the critical nature of on-going legal activities associated with theCPUC consideration of the California American Water application for the Monterey PeninsulaWater Project, the Board of Directors finds that the public interest is better served by renewingDonald G. Freeman’s contract at this time than to re-advertise a request for proposal for legalservices and;

WHEREAS Board of Directors wishes to authorize the President to extend a Consentand Waiver of Conflict of Interest, and hereby acknowledges Donald G. Freeman as legalcounsel for the Monterey Peninsula Regional Water Authority until December 31, 2016.

NOW, THEREFORE, BE IT RESOLVED, that the President of MPRWA is herebyauthorized to extend on behalf of MPRWA a Consent and Waiver of Conflict of Interest therebyacknowledging Donald G. Freeman as legal counsel for the Monterey Peninsula Regional WaterAuthority and authorizes the President to execute a contract extension with Donald G. Freemanfor legal counsel services.

PASSED AND ADOPTED BY THE MONTEREY PENINSULA REGIONAL WATERAUTHORITY this ____day of ____ 201___, by the following vote:

AYES: 0 DIRECTORS:NOES: 0 DIRECTORS:ABSENT: 0 DIRECTORS:ABSTAIN: 0 DIRECTORS:

APPROVED:

ATTEST:

Jason Burnett, President

Clerk to the Authority


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EMPLOYMENT AGREEMENT FOR LEGAL SERVICES

THIS AGREEMENT, made and entered into this V 1 day of eceinber2012, by and between the MONTEREY PENINSULA REGIONAL WATER AUTHORITY,

hereinafter MPRWA , and DONALD G. FREEMAN of the Law Offices of Perryand Freeman, hereinafter referred to as Attorney , both of whomunders tand as fol lows:

. A. erm: The term of this Agreement shall be for one (1) yearcommencing December 15, 2012, and shal l terminate on December 14, 2013,unless terminated pursuant to paragraph H. of this Agreement.

B. Compensation. Attorney will provide general legal services toMPRWA for a retainer of 2,500.00 per month commencing December 1, 2012,for a period of 90 days at which time attorney compensation shall bereviewed by the MPRWA Board of Directors . pon review by the Board ofDirectors the attorney compensation may be adjusted for the balance of

the contract period. xtraordinary legal services as set forth inparagraph D. hereinbelow shall be charged at the rate of $350.00 perhour.

C. Billing and Reimbursement of Costs. For the 90 day periodcommencing December 15, 2012, an accounting of services and hours willbe provided to MPRWA on a monthly basis. Attorney shall be reimbursedfor actual out-of-pocket expenses and costs advanced or paid on behalfof the MPRWA, including court reporter fees and charges, court costs, andcosts of outside investigators or experts pertaining to MPRWA lit igation.When specifically required to travel out of the county to conduct MPRWArelated business expenses shall be billed as actual out-of-pocket costsunless otherwise negotiated. There will be no charge for actual travel

time.

D. Ordinary Services. Legal advice and legal opinions to MPRWAon matters including, but not limited to, public sector policies andprocedures, the Ralph M. Brown Act, the Public Record Act, conflicts ofinterest, general public agency law, Board of Directors' actions, andattendance at regular and special meetings of the Board of Directors orBoard of Directors ' commit tees as requested,

E. Extraordinary Legal Services. Preparation of complex legaldocuments, representing MPRWA in court appearances, litigation, or inproceedings before other public or administrative bodies, or legalservices provided to any independent or separate agency or entity ofgovernment not operated as an in tegral par t of MPRWA.

F. Miscellaneous. MPRWA recognizes that Attorney has a privatelaw practice currently located in Carmel-by-the-Sea, California, and willretain that office as his principal place of business. n addi t ion,MPRWA recognizes Attorney is the City Attorney for the City of Carmel-by-the-Sea and the Ci ty of Seaside as wel l as general legal counsel for theAssociation of Monterey Bay Area Governments (AMBAG); and that Attorneyalso represents and advises other publ ic ent i t ies upon request . The Ci ty


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Donald G. Freeman

of Carmel-by-the-Sea approved and signed a conflict waiver on November6 2012. The City of Seaside approved and signed a conflict waiver onOctober 18 2012. MPRWA approved a conflict waiver on December 10 2012.

G. Association of Special Legal Counsel. PRWA and Attorneyrecognize, that from time to time, it may become necessary to associatewith special legal counsel for matters involving litigation labornegotiations, worker s compensation personnel or bond issue proceedingsand other matters where either MPRWA Board of Directors or Attorney feeleffective representation requires special legal counsel.

H. Termination. ither party may terminate this Agreementwithout cause by providing written notice to the other party in themanner set forth in item I. of this Agreement at least 30 days prior tothe effective date of termination.

I . Notices. All notices herein provided to be given or whichmay be given by either party to the other shall be considered fullyreceived when made in writing and deposited in the United States mailcertified and postage prepaid and addressed to the respective partiesas follows:

MPRWA:

President Board of DirectorsMonterey Peninsula Regional

Water Authority580 Pacific StreetMonterey CA 93940

ATTORNEY:

Donald G. FreemanPerry and FreemanP.O. Box 805Carmel CA 93921

J. Immunity . As an authorized representative of MPRWA Attorneyshall be recognized as having rights to any immunity MPRWA is entitledto. n no event shall any duties contained in this Agreement or

otherwise herein negate any legal protections or immunities availableto the parties under local state or federal law.

IN WITNESS WHEREOF MPRWA has caused this agreement to be signed andexecuted on i ts behalf by i ts President and duly attested by i ts Clerk;and the Attorney has signed and executed this agreement in duplicateoriginals the day and year f irst hereinabove writ ten.

MPRWA

Chuck Della Sala President

ATTORNEY:

2


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RESOLUTION NO. 2012 05 C.S.

A RESOLUTION OF THE MONTEREY PENINSULA

REGIONAL WATER AUTHORITY

AUTHORIZE PRESIDENT TO EXECUTE CONTRACTWITH DONALD G. FREEMAN AS LEGAL COUNSEL FOR THE

MONTEREY PENINSULA REGIONAL WATER AUTHOR ITY

WHER EAS, Donald G. Freema n is an attorney licensed to practice law in the State ofCalifornia;

WHER EAS, Donald G. Freeman h as been selected to represent the Mo nterey PeninsulaRegional Water Authority MPRWA);

WHER EAS, Donald G. Freeman d esires to act as Legal Counsel for the MPR WA ;

WHER EAS, Donald G . Freeman agrees to provide general legal services as m orespecifically described in the Employment Agreement for Legal Services attached hereto asExhibit A;

WHER EAS, the President of MPRW A and mem bers of the MPRW A Board of Directorshave reviewed the contract of Donald G. Freeman and agrees to its terms and conditions;

NOW , THEREFORE, BE IT RESOLVED, that the President of MPRWA is herebyauthorized to execute on behalf of MPRWA a contract with Donald G. Freeman as legal counselfor the MPRW A.

PASSED AND ADOPTED BY THE MONTEREY PENINSULA REGIONAL WATERAUTHOR ITY this 13th day of Decem ber, 2012, by the following vote:

AYES:

NOES:ABSENT:ABSTAIN:

4 DIRECTORS:

0 DIRECTORS:2 DIRECTORS:0 DIRECTORS:

Pendergrass, Rub io, Della Sala, Carm el AlternateTalmageNoneKam pe, Edelen,None

APPROVED:

ATTEST


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Item No: 7.

№ 06/12


SUBJECT: Adoption of Resolution 2015-YY, Approving BrownsteinHyatt Farber Schreck as Special Legal Counsel throughDecember 31, 2016 and Authorizing the AuthorityPresident to Execute a Contract Extension at a Price not-to-Exceed $100,000.

RECOMMENDATION:

It is recommended that the Monterey Peninsula Regional Water Authority(MPRWA) adopt Resolution 2015-YY approving Brownstein Hyatt FarberSchreck, LLP as Special Legal Counsel for the period January 1, 2016 through December 31, 2016 and authorize the Authority President toextend a contract with Brownstein at the current hourly rates and a totalcontract price not-to-exceed $100,000.

DISCUSSION:

In March 2012, The Authority negotiated an agreement for Attorney ofRecord services with Brownstein. The firm provided special expertise inwater law, at a reduced rate, in support of Water Authority formation andactivities.

For reasons outlined in the staff report on the subject at the Water Authoritymeeting of November 13, 2014, the Authority extended the Brownsteinagreement to December 31, 2015 and approved preparation of a contractaccordingly.

The CPUC process, in particular hearings related to approval of theEIR/EIS and issuance of Cal Am's Certificate of Public Convenience andNecessity(CPCN), as well as expected future negotiations with the State


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Water Resources Control Board on the Cease and Desist Order, willcontinue to require a substantial amount of specialized legal work in 2016.To insure continuity in Special Legal Counsel services, the Executive

Director recommends the Authority extend the contract with Brownsteinthrough 31 December 2016.

BUDGET CONSIDERATIONS:

In the approved budget for FY 2015-2016 the Water Authority authorizedan expenditure for Special Legal Counsel not-to-exceed $100,000. Thesefunds are expected to be sufficient for these legal services through thecurrent fiscal year. A new budget for FY 2016-2017 will need to consider

funding of Special Legal Services in June 2016.ATTACHMENTS:

Resolution 2015-YY

Contract for Special Legal Counsel services


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MPRWA RESOLUTION NO. 2015-YY

A RESOLUTION OF THE MONTEREY PENINSULA REGIONAL WATER AUTHORITYACKNOWLEDGING Brownstein Hyatt Farber Schreck LLP AS SPECIAL COUNSEL OF

RECORD FOR THE MONTEREY PENINSULA REGIONAL WATER AUTHORITY,AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A CONSENT ANDWAIVER OF CONFLICT OF INTEREST, AND AUTHORIZING THE PRESIDENT TO

EXECUTE AN AGREEMENT WITH BROWNSTEIN FOR LEGAL SERVICES

WHEREAS, Brownstein Hyatt Farber Schreck LLP (Brownstein) has been requestedto represent the Monterey Peninsula Regional Water Authority (MPRWA) as Special Counsel;

WHEREAS, Brownstein is currently acting as Special Counsel for the City of Carmel-by-the-Sea and the City of Seaside;

WHEREAS, Brownstein and MPRWA recognize the potential conflict of interest whichmay arise as a result of Brownstein’s legal representation of MPRWA, the City of Carmel-by-the-Sea, and the City of Seaside;

WHEREAS, MPRWA wishes to acknowledge Brownstein as Special Counsel forMPRWA;

WHEREAS, the President of MPRWA and members of the MPRWA Board of Directorshave reviewed a letter from Brownstein indicating that Brownstein does not believe that its legalservices for the Monterey Peninsula Regional Water Authority will have any impact on its fulland effective representation of each party, and does not believe it has knowledge of anyconfidential information from any party which would be material or relevant to its representationof MPRWA, the City of Carmel-by-the-Sea, and the City of Seaside;

WHEREAS, Brownstein recognizes that by concurrently representing the MPRWA, theCity of Carmel-by-the-Sea and the City of Seaside an issue of divided loyalty, such as inlitigation, could possibly arise at some future date, and that at that time it could be necessary forit to make full disclosure to all parties, could be subject to disqualification from representing anyparty, and at such time it would be necessary for each party to seek independent legal counsel;

WHEREAS, the City of Carmel-by-the-Sea and the City of Seaside have passed theirrespective Resolutions and their respective representatives have executed the Consent andWaiver of Conflict of Interest;

WHEREAS, the President and Board of Directors have reviewed this request withindependent legal counsel;

WHEREAS, according to Rule 3-310 of the California Rules of Professional Conductapplicable to California lawyers which requires informed written consent of all representedparties because of concurrent representation, MPRWA recognizes that Brownstein is the Special


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Counsel for the City of Carmel-by-the-Sea, and for the City of Seaside; and

WHEREAS Board of Directors wishes to authorize the Executive Director to execute aConsent and Waiver of Conflict of Interest, and hereby acknowledges Brownstein as SpecialCounsel for the Monterey Peninsula Regional Water Authority.

NOW, THEREFORE, BE IT RESOLVED, that the Executive Director of MPRWA ishereby authorized to execute on behalf of MPRWA a Consent and Waiver of Conflict of Interestthereby acknowledging Brownstein as Special Counsel for the Monterey Peninsula RegionalWater Authority.

NOW, THEREFORE, BE IT FURTHER RESOLVED, that the President of MPRWA ishereby authorized to execute on behalf of MPRWA an agreement with Brownstein for legalservices for the Monterey Peninsula Regional Water Authority through December 31, 2016.

PASSED AND ADOPTED BY THE MONTEREY PENINSULA REGIONAL WATER

AUTHORITY this ____day of ____ 20____, by the following vote:

AYES: 0 DIRECTORS:NOES: 0 DIRECTORS:ABSENT: 0 DIRECTORS:ABSTAIN: 0 DIRECTORS:

APPROVED:

ATTEST:

Chuck Della Sala, President

Clerk to the Authority


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EMPLOYMENT AGREEMENT FOR LEGAL SERVICES

THIS AGREEMENT, made and entered into this ___ day of _____________, 2015, by

and between the MONTEREY PENINSULA REGIONAL WATER AUTHORITY, hereinafter“MPRWA”, and the LAW OFFICES of BROWNSTEIN HYATT FARBER SCHRECK, LLP ,hereinafter referred to as "Attorney", both of which understand as follows:

A. Term: The term of this Agreement shall be for one (1) year commencing January1, 2016, and shall terminate on December 31, 2016, unless terminated pursuant to paragraph H.of this Agreement.

B. Compensation. Attorney will provide legal services to MPRWA at an averagerate of no more than $350.00 per hour.

C. Billing and Reimbursement of Costs. An accounting of services and hours will beprovided to MPRWA on a monthly basis. Attorney shall be reimbursed for actual out-of-pocketexpenses and costs advanced or paid on behalf of the MPRWA, including court reporter fees andcharges, court costs, and costs of outside investigators or experts pertaining to MPRWAlitigation. Travel to conduct MPRWA related business expenses shall be billed as actual out-of-pocket costs unless otherwise negotiated. There will be no charge for actual travel time.

D. Budget. Attorney will not accrue costs for legal services in excess of $100,000between January 1, 2016 and December 31, 2016 and in without prior approval of the AuthorityExecutive Director.

E. Ordinary Services. Legal advice and legal opinions to MPRWA as outlined in theAmendment to Agreement for Legal Services dated December 5, 2013 (Exhibit A to thisAgreement) and Brownstein Hyatt Farber Schreck, LLP Standard Terms and Conditions (ExhibitB to this Agreement).

F. Miscellaneous. MPRWA recognizes that Attorney is a private law practicecurrently located in Santa Barbara, California, and will retain that office as its principal place ofbusiness. In addition, MPRWA recognizes Attorney also represents and advises other publicentities upon request. Attorney will submit conflict waivers to MPRWA whenever suchpotential arise during the term of this contract.

G. Termination. Either party may terminate this Agreement without cause byproviding written notice to the other party in the manner set forth in item I. of this Agreement atleast 30 days prior to the effective date of termination.

H. Notices. All notices herein provided to be given, or which may be given by eitherparty to the other, shall be considered fully received when made in writing and deposited in the


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United States mail, certified and postage prepaid, and addressed to the respective parties asfollows:

MPRWA: ATTORNEY:

President, Board of Directors Russell M. McGlothlin

Monterey Peninsula Regional BROWNSTEIN HYATT FARBER SCHRECK,LLP Water Authority 21 East Carrillo Street

580 Pacific Street Santa Barbara , CA 93101 Monterey, CA 93940

I. Immunity. As an authorized representative of MPRWA, Attorney shall berecognized as

mprwa special meeting agenda packet 11-12-15

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