MPRWA Regular Meeting Agenda Packet 08-08-13

Agenda
Monterey Peninsula Regional Water Authority (MPRWA)

Regular Meeting

7:00 PM, Thursday, August 8, 2013
Council Chamber
580 Pacific Street
Monterey, California

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

PUBLIC COMMENTS
PUBLIC COMMENTS allows you, the public, to speak for a maximum of three minutes on any
subject which is within the jurisdiction of the MPRWA and which is not on the agenda. Any person
or group desiring to bring an item to the attention of the Authority may do so by addressing the
Authority 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 contact
the sender concerning the details.

APPROVAL OF MINUTES

1. July 25, 2013 Packet Page 1

AGENDA ITEMS

2. Receive Report, Discuss and Provide Recommendations on Opinion Editorials Published
and Future Opinion Topics Cullem Packet Page 7

3. Receive Report, Discuss, and Provide Recommendations Regarding Trip to Poseidon
Desalination Facility Cullem Packet Page 19

ADJOURNMENT

The Monterey Peninsula Regional Water Authority is committed to include the disabled in all of
its services, programs and activities. For disabled access, dial 711 to use the California Relay
Service (CRS) to speak to staff at the Monterey City Clerks Office, the Principal Office of the
Authority. 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 hearing amplification device to attend a
meeting, dial 711 to use CRS to talk to staff at the Monterey City Clerks Office at
(831) 646-3935 to coordinate use of a device or for information on an agenda.

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

MI NUTES
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Regular Meeting
7:00 PM, Thursday, July 25, 2013
COUNCIL CHAMBER
580 PACIFIC STREET
MONTEREY, CALIFORNIA

Directors Present: Burnett, Edelen, Kampe, Pendergrass, Rubio

Directors Absent:

Della Sala

Staff Present: Legal Counsel, Executive Director, Clerk

ROLL CALL

Vice President Burnett led the meeting in President Della Salas absence.

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

Vice President Burnett reported that the deadline for the settlement documents is unchanged
and is still scheduled for on August 31, 2013 at 5:00 p.m. He explained that the pre-hearing
conference has always been scheduled to be after the settlement concludes and if intervening
parties are to resolve a substantial number of issues through the settlement process, the
prehearing conference will be less intense.
Executive Director Jim Cullem reported on a scheduled trip for August 7, 2013 to visit the
Ground Water Replenishment and Desalination Facilities in Southern California. They will bring
back any information and lessons learned to the Authority.

PUBLIC COMMENTS

Vice President Burnett opened the floor to public comment. Tom Rowley spoke representing
The Monterey Peninsula Taxpayers Association regarding an article in the Carmel Pine Cone
stating that the adopted position statement was a final document, but recalled statements made
by Directors that it was a working document. He then spoke to the public confusion due to
inaccurate information in local news publications and that he is disappointed that Monterey
County is not represented on the Authority. He then requested that the Policy Position
Statement more clearly specify the EIR to be a project level review of the alternative desal
projects. Lastly, he spoke to the quoted baseline increase to ratepayers bills of $44 dollars and
wished the Authority luck with their proposed outreach plan. Having no further requests to
speak, public comment was closed.
Vice President Burnett requested to agendize discussion at a future meeting of ways the
Authority can assist the County to become a member of the Authority. He then spoke to Mr.
Rowleys comments about the baseline bill increase of $44 and requested to get clarification
from Cal Am representation.

APPROVAL OF MINUTES
MPRWA Meeting, 8/8/2013 , tem No. 1., tem Page 1, Packet Page 1
MPRWA Minutes Thursday, July 25, 2013

Monterey Peninsula Regional Water Authority
Regular Meeting Minutes - Thursday, July 25, 2013
2

1. July 11, 2013
Action: Approved

On a motion by Director Pendergrass, seconded by Director Rubio, and carried by the following
vote, the Monterey Peninsula Regional Water Authority approved the minutes of July 11, 2013:
AYES: 5 DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio
NOES: 0 DIRECTORS: None
ABSENT: 1 DIRECTORS: Della Sala
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

AGENDA ITEMS

2. Receive Presentation, Discuss and Provide Direction on Adopted Position Statement
Action: Discussed, Direction Provided and Approved Changes

Executive Director Cullem gave a presentation on the adopted policy position statement with the
purpose to break down the elements of the currently adopted policy position statement in such a
manner that the public could understand the details. He then answered questions from the
Directors. Legal Counsel Freeman indicated that the presentation was for informational
purposes only and was a general overview of the policy position statement adopted at a
previous meeting.
Director Rubio spoke to the adopted criteria for support of the Cal Am project and requested the
development of more generic criteria that could be applied to other projects as a more
comparable approach.
Vice President Burnett opened the item to public comment. Tom Rowley suggested changes to
the presentation to clarify to the public who the Authority is, provide the status of Surcharge 2,
questioned how many wells were needed for testing purposes for accurate results and lastly,
questioned if the Authority had considered contracting with SPI Consultants to update their
analysis to reflect relative costs. Nelson Vega spoke to the portfolio of water projects, and
questioned that they be listed in terms of the priority. He questioned the term competitive
economics" and suggested it be measured in dollars to the ratepayer. Lastly, he questioned
why there was still discussion of other projects, as they are not demonstrating they can be
successful at delivering water.
Having no more requests to speak, Vice President Burnett closed public comment, responded
to questions and brought the item back to the Directors for discussion. The Director's received
the report and acknowledged that it is important that the public is informed of this document due
to the Settlement Agreement deadline. They agreed to a few minimal word changes so the
presentation could be used as an outreach document and a reference between the settlement
agreement and the position statement.
On a motion by Director Pendergrass, seconded by Director Rubio, and carried by the following
vote, the Monterey Peninsula Regional Water Authority approved changes to the received
presentation regarding the adopted position statement:


3

3. Receive Report, Discuss and Provide Direction on Draft Scope of Services for Public Outreach
Consultant
Action: Discussed and Approved Scope of Services

Executive Director Cullem spoke to the item and discussed the different options for public
outreach without duplicating efforts of other public agencies, while keeping costs minimum. He
requested direction on the draft scope of services and permission to move forward securing
consultant services then answered questions from the Directors.
Director Pendergrass expressed concern about the cost and spoke to opportunities for
outreach via editorials in the local newspaper. Director Rubio requested that a meeting
synopsis be provided to report at member city council meetings.
Vice President Burnett opened the item to public comment. Nelson Vega suggested the
Authority communicate why they are different from the Monterey Peninsula Water Management
District and other water agencies and why this agency can deliver a successful project. Having
no additional requests to speak, public comment was closed.
Director Edelen indicated it was not cost effective for a consultant to attend Authority meetings.
The Authority Clerk agreed to have an action summary prepared in a timely manner after the
meetings to distribute to the member cities.
On a motion by Director Kampe, seconded by Director Rubio, and carried by the following vote,
the Monterey Peninsula Regional Water Authority approved the presented draft scope of
services, eliminating the need for the consultant to attend Authority meetings, and authorized
the Executive Director to solicit for Public Outreach consultant services:


4. Review, Discuss and Provide Direction on Draft Opinion Editorials for Future Publication
Action: Discussed and Provided Direction

Director Burnett spoke to the item and to the intent of providing opinion editorials to the
Monterey Herald for publication as a method of public outreach. Executive Director Cullem
spoke to the four proposed opinion editorial topics and indicated additional future articles could
address items such as the cost of water, contingencies and risks.
Director Burnett then spoke to the timing of the release of the articles and requested that they
coincide with the release of the pending settlement agreement. The Directors discussed timing,
distributions that would be acceptable under the California Brown Act, as well as the names
that should be listed as endorsing the article. The Directors agreed to have the Authority
President endorse the message First.


4
Director Burnett opened the item to public comment. Tom Rowley spoke to the importance of
helping the public understand the true impact the water shortage. Nelson Vega repeated earlier
comments that the Authority should not waste their political position and good reputation. He
encouraged the Authority to produce water, allow growth, but keep your eye on the game.
Having no further requests to speak, public comment was closed.
Executive Director Cullem recapped the discussion that the Directors agreed to produce two
articles prior to the next meeting. The first would address the purpose of the Authority and it is
to be signed by President Della Sala. The second article is to address the settlement
agreement and will be signed by both President Della Sala and Vice President Burnett.
Additionally, a news release will be completed and distributed if settlement agreement is
signed, as it will be a significant event and the public should be made aware.
Director Burnett explained three reasons the settlement agreement is significant:
1) If there is a substantial number of intervening parties agreeing to sign, it is more than
has been seen in a long time.
2) If Cal Am agrees to the settlement agreement, the savings to the public is in hundreds of
millions of dollars
3) The ability to facilitate the plant being built, the various contingencies included, it
substantially increases the prospective that it will cross the finish line.
Executive Director Cullem then explained that after the first two editorials are released, future
editorials could rotate responsibility between the different Directors and allow them to speak on
their different topics of interest.

Director Rubio indicated that due to Brown Act requirements only minimal Directors will not be
able to review the document prior to release. Therefore, he requested a copy be sent to each
Director, prior to or same time as it is sent to print. The Directors agreed and directed staff to
facilitate this request.
ADJOURN TO CLOSED SESSION

Vice President Burnett invited public comments on the closed session item and having no
requests to speak, adjourned to closed session at 8:55 p.m.
5. Conference with Legal Counsel Existing Litigation, Gov. Code, section 54956.9 California
Public Utilities Commission, In the Matter of Application of California-American Water Company
(U210W) for Approval of the Monterey Peninsula Water Supply Project and Authorization to
Recover All Present and Future Costs in Rates, A.12.04.019, Filed April 23, 2012
Action: Discussed and Provided Direction to Negotiating Team

Legal Counsel Freeman announced that the Directors met with the negotiating team pursuant
to Existing Litigation, Gov. Code, section 54956.9 California Public Utilities Commission, In
the Matter of Application of California-American Water Company (U210W) for Approval of the
Monterey Peninsula Water Supply Project and Authorization to Recover All Present and Future
Costs in Rates, A.12.04.019, Filed April 23, 2012 where they discussed and gave direction to
the negotiating team. If the final documents are consistent with the direction provided, the
Authority authorized the President to sign the settlement negotiation documents.

ADJOURNMENT

5
Having no further business to conduct, the meeting was adjourned.

ATTEST:

Lesley Milton, Clerk of the Authority Chuck Della Sala MPRWA President


Agenda Report

Date: August 08, 2013
Item No: 2.

06/12
FROM: Executive Director Cullem

SUBJECT: Opinion-Editorial (op-ed) Articles in the Monterey Herald

RECCOMENDATION:
Staff recommends that the Authority determine the subject matter for future op-ed pieces to the
Herald or to other media outlets, and assign Authority members to co-author future opinion
editorials.

DISCUSSION:

On Aug 3, 2013, the Herald printed the first op-ed which provided an overview of the water
problem we face, the composition and purpose of the Authority, and Cal-Ams MPWSP
submission to the CPUC. Further, it discussed what the portfolio approach is, alluded to the
eight conditions that had to be met to secure the Authoritys approval, and noted topics for
future op-eds.
On Aug 5, 2013, the Herald printed the second op-ed. It reviewed the mission and organization
of the Water Authority, but focused on the four basic criteria that any water project was
expected to meet, as well as the eight specific conditions Cal-Ams MPWSP had to meet in
order to obtain Authority approval. The article then discussed that following the settlement
negotiations and agreements submitted to the CPUC on July 31, 2013, the Authority concluded
the eight conditions had been met. About half the op-ed went on to outline the specific reasons
why the Authority had reached that conclusion.
In both op-eds, we noted that future articles would cover water rates (cost of water to the
public), governance, decision-making, accountability, permit issues, contingency plans, and
schedules.
It has also been suggested that the Authority consider doing a co-authored op-ed with the
MPWMD on the cooperative efforts of both in finding and expediting a solution to the water
crisis.
ATTACHMENTS:
Submitted Opinion Editorials 1 and 2
1
How to get that water we all want and need (aka Water 101)
By Chuck Della Sala
If you have lived on the Monterey Peninsula for any length of time, you
know that a major concern is ensuring that we have sufficient water.
Over the past few decades there is likely no local issue that has been
more debated, politicized, voted on and, finally, as frustrating.
Early last year, the Monterey Peninsula Regional Water Authority
(MPRWA) was created, consisting of the six Peninsula cities served by
California American Water (Cal-Am): Carmel-by-the-Sea, Del Rey Oaks,
Monterey, Pacific Grove, Sand City and Seaside. As the mayors of each of
those cities comprise the board were also known as the Mayors Authority.
Our mission is finding a solution to our water shortage created by the
over-drafting of the Carmel River. Despite the good intentions of many and
various ideas and concepts, that answer has remained elusive.
The MPRWA is working toward getting the necessary water in a timely
fashion and a financially responsible manner. In the process we need to
address such issues as why we have a water shortage and why it hasnt been
solved, why water is expensive and how much more it may cost in the
2
future, what are the contingency plans and, finally, why what we are doing
will succeed.
Simple, eh?
For starters, how did we get to this point in time?
In 1978, the community formed the Monterey Peninsula Water
Management District (MPWMD) to address our growing demand for water,
which, by the mid 1990s, had resulted in over-drafting water from the
Carmel River and the Seaside Aquifer. Despite increased water
conservation efforts, the Peninsula was unable to reach a consensus or come
up with something that successfully passed judicial review.
In 2006, a court decision mandated reductions in pumping from the
Seaside Aquifer, and in 2009, the State issued a Cease and Desist Order
imposing a deadline of Jan. 1, 2017, to greatly reduce water withdrawals
from the Carmel River. With a Sword of Damocles hanging over us, the
task was clear: We simply had to find an alternative water supply in the face
of future severe rationing.
To facilitate the process, the State gave the California Public Utilities
Commission responsibility to decide what water project(s) would be built. In
2012, Cal-Am, Marina Coast Water District, and Monterey County proposed
3
a Regional Water Project. After that project failed Cal-Am proposed the
current Monterey Peninsula Water Project.
Accordingly, in January 2012, the MPRWA was created. Our purpose is
to study, plan, develop, finance, acquire, construct, maintain, repair, manage,
operate, control and govern water projects. Its like being a clearinghouse.
One of our primary responsibilities is to address public concerns about
the transparency of the project development process and about the projected
increased cost of water.
Mastering the complexity of the water issue requires the MPRWA to
travel a sometimes prickly path: navigate bureaucracies, sit through long
meetings, balance competing interests, and understand engineering,
hydrology, the law, and, of course, politics.
Cal-Am thinks it has a solution. It filed an application in April 2012
with the state Public Utilities Commission for the Monterey Peninsula Water
Supply Project, a project chosen after Cal-Am examined 11 potential
alternatives to the original Regional Desalination Project. The current
project is comprised of three primary elements referred to as a Portfolio
Approach. They are desalination of seawater (desal), aquifer storage and
recovery and groundwater replenishment or water recycling. A recent small
4
addition to the Portfolio is the Pacific Grove recycling project that might
reduce potable water demand by up to 3 percent.
The Mayors Authority supports the portfolio approach because even if
one major aspect gets delayed the other two can continue to move forward.
Cal-Am plans to build a saltwater desal plant with slant well intakes
beneath the seabed on the coast north of Marina. Its size depends on the
success of the recycled water project. Our belief is that desal has to be part
of the mix because, without it, the rest of the portfolio would be unable to
provide the needed water.
Aquifer storage and recovery is already used by Cal-Am and the
MPWMD to take excess flows off the Carmel River in the winter to be
stored in the Seaside Groundwater Basin for later use. This process will be
expanded in the new project.
Groundwater replenishment is a project of the Monterey Regional Water
Pollution Control Agency and MPWMD that would thoroughly treat
wastewater before returning it to the Seaside Basin.
Although there are two other desal alternative projects under
consideration, time is of the essence. Accordingly, the Mayors Authority
could support Cal-Ams project as part of the portfolio approach if eight
conditions are met. Our position policy statement outlines those conditions,
5
which we will detail in a subsequent commentary in The Herald. We will
also examine the effect of water rates, governance, decision-making and
accountability, and the issues of permits, contingency plans and schedules.
In summary, over the last year and a half, we have all worked hard to
address past failures and to find a viable water project. We have focused on
consensus, transparency, adequate financing, and the importance of
contingency planning. As a result, we strongly believe the community is
the closest it has ever been to a achieving a water supply solution.
And we know that you will be closely watching us.

Chuck Della Sala is the mayor of Monterey and the president of the
Monterey Peninsula Regional Water Authority.
# # #

1
Cal-Am has best plan to prevent water rationing (Water 102)
By Chuck Della Sala and Jason Burnett
A few days ago, in How to get that water we all want and need (aka Water
101) that appeared in this space in The Herald, we discussed how the Monterey
Peninsula, after years of fits and starts, continues to find itself in a serious water
supply crisis.
We noted some of the steps that have put us in this position, but the bottom line
remains that the state has imposed a cease and desist order, with a deadline of Jan.
1, 2017, to greatly reduce the over-drafting of water from the Carmel River. If
that condition isnt met, the Monterey Peninsula faces the likelihood of drastic
water rationing.
In January 2012 a new group was formed to address the problem and provide
some public control: the Monterey Peninsula Regional Water Authority
(MPRWA), made up of the mayors of the six Peninsula cities served by California
American Water. They are Carmel-by-the-Sea, Del Rey Oaks, Monterey, Pacific
Grove, Sand City and Seaside. It is known as the Mayors Authority because it is
made up of the mayors of each of those half-dozen cities.
2
We know some of you may be thinking: Why do we need yet another alphabet
soup agency to deal with our longstanding water issues?
We aim to answer that by fulfilling our mission to find a solution and to get the
needed water in both a timely and financially responsible manner.
On April 23, 2012, Cal-Am submitted an application to the California Public
Utilities Commission (CPUC) for a new Monterey Peninsula Water Supply
Project. It includes a desalination facility north of Marina. Meanwhile, since its
inception, the MPRWA has adopted a portfolio approach to water projects,
including the desal option, to avoid placing all our supply options in one basket.
After a series of public meetings, the Mayors Authority adopted a policy
position statement that mandated that any project (particularly desal projects) must
meet the following four basic criteria:
Competitive economics (especially from the ratepayers perspective);
Control by elected officials, accountability to the public, and a transparent
decision-making process;
A clear path to permits and construction as near to the cease and desist order
deadline as feasible, and
Contingency plans to address technical, permit, and legal risks.
3
Besides Cal-Ams desal facility, there were other projects in the running, but the
MPRWA recently determined that while none immediately met all of our basic
criteria, the Cal-Am project was the most likely to be able to do so.
Granted, many folks feel weve been down this road before. But we indicated
we could support Cal-Ams project if it meets eight fairly detailed and precise
conditions of approval:
Accept approximately 50 percent public funds to reduce interest rate and
profit expenses;
Diligently seek lowest electricity rates to lower the costs of desal operations;
Agree that any additional surcharges on ratepayers bills be spent only on
actual project construction, subject to PUC approval;
Be able to obtain a state loan and accept a public agency partner if needed

to qualify for that loan;

Agree to public oversight by a Governance Committee that includes elected
officials;

Agree to resolve certain environmental and approval requirements

related to how it obtains necessary feed water (intake) for the desal facility;

Develop contingencies for feed water that do not impact farming

activities in the Salinas Valley and are completed in a timely manner, and

Ensure its feed water wells (slant intake wells) can withstand sea level

4
rise, coastal erosion, earthquakes, and tsunamis.

On July 31, agreements between Cal-Am, the MPRWA, and a significant
number of groups that had previously voiced concerns about the Monterey
Peninsula Water Project, were filed with the CPUC. Cal-Am has met the
MPRWAs eight conditions of approval.
Accordingly, the MPRWA decided to approve the Cal-Am project because:
Cal-Am has made some very significant concessions that are of great benefit
to the ratepayers.
Cal-Ams 9.6 million gallon per day (mgd) desal, or an alternative 6.4 mgd
plant supplemented by a 3.2 mgd groundwater replenishment project, can
replace Carmel River water and replenish the Seaside aquifer and can satisfy
the communitys water needs through a variety of new water sources
(portfolio approach),
The Cal-Am project appears to have a substantial lead over the competing
Deepwater Desal (DWD) and Peoples Moss Landing (PML) projects in
planning, financial, permitting, electrical power acquisition, and
minimization of risk, and,
Cal-Am has agreed to minimize costs to the ratepayers by utilizing cheaper
public funding if available, by using a competitive process to select the
5
design build contractor, and utilizing a value-engineering firm to squeeze out
more savings in the desal design.
There were a number of additional considerations that the Mayors Authority
successfully negotiated with the state PUC as part of the agreements submitted on
July 31 to include local control of water allocation decisions, measures to address
future water supply needs, inclusion of water recycling projects proposed by the
City of Pacific Grove, and a connection fee for new water users to reimburse
current ratepayers.

We intend to further examine these important issues in a future column,
covering such issues as accountability, contingency plans, the cost of water to the
public and schedules.
Chuck Della Sala is the mayor of Monterey and the president of the Monterey
Peninsula Regional Water Authority. Jason Burnett is the Mayor of Carmel-by-the-
Sea and the Authority Vice-President.
# # #

6

Agenda Report

Date: August 08, 2013
Item No: 3.

06/12
FROM: Executive Director Cullem

SUBJECT: Receive Report, Discuss, and Provide Recommendations Regarding Trip to
Poseidon Desalination Facility

DISCUSSION:

There is no written report for this item. An oral report will take place at the meeting.

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