MPRWA Regular Meeting Agenda Packet 07-10-14

Agenda
Monterey Peninsula Regional Water Authority (MPRWA)

Regular Meeting

7:30 PM, Thursday, July 10, 2014
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. June 12, 2014 Regular Meeting - Milton

AGENDA ITEMS

2. Receive Status Report of the Final Negotiations on the Ground Water Replenishment
Project Source Water Agreements - Israel

3. Receive Preliminary Cost Comparison Between the Ground Water Replenishment Project
and the Monterey Peninsula Water Supply Desal Project - Stoldt/Israel

4. Election of Officers for Fiscal Year 2014-15 - Milton

5. Receive Report on Status of Mitigated Negative Declaration for the City of Marina Test
Wells and the Approval Process for the City of Marina and the California Coastal
Commission Coastal Development Permits - Cal Am

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
Thursday, July 10, 2014
2

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, June 12, 2014
COUNCIL CHAMBER
580 PACIFIC STREET
MONTEREY, CALIFORNIA

Directors Present: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala
Directors Absent: None
Staff Present: Executive Director, Legal Counsel, Clerk

ROLL CALL

The meeting was started at 7:00 PM and all members were present.

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

Executive Director Cullem indicated that he attended ACEC to give a presentation on the
Authority activities and also attended the County of Monterey budget briefing trying to obtain
member contributions for Fiscal Year 2014-15.

PUBLIC COMMENTS

President Della Sala invited public comments for items not on the agenda.
Nelson Vega spoke to the progress made over the last two years and thanked the
Mayors for standing up for Cal Am and supporting the water project.
Nina Beaty spoke to the impacts of the Japanese nuclear reactor disaster and
questioned if it radiation removal would be included in the plans for the the desalination
facility.
John Narigi spoke on behalf of the Business Coalition and thanked the Directors for
using their political clout toward a no vote on Measure O.
Tom Rowley thanked the Mayors on behalf of the Monterey Peninsula Tax Payers
Association for their efforts and leadership toward Measure O and that their leadership
will continue to be needed to neutralize the bad information that is being released.
Jody Hansen, Monterey Peninsula Chamber of Commerce echoed the appreciation for
taking a stand against Measure O.

APPROVAL OF MINUTES

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 March 13,
2014 and May 8, 2014 as presented.
AYES: 6 DIRECTORS: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della
Sala
NOES: 0 DIRECTORS: None
ABSENT: 0 DIRECTORS: None
MPRWA Meeting, 7/10/2014 , tem No. 1., tem Page 1, Packet Page 1
MPRWA Minutes Thursday, June 12, 2014

Monterey Peninsula Regional Water Authority
Regular Meeting Minutes - Thursday, June 12, 2014
2
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

1. May 8, 2014 Regular Meeting
Action: Approved.

2. March 13, 2014 Regular Meeting
Action: Approved.

AGENDA ITEMS

3. Receive Update on the Pure Water Monterey and Ground Water Replenishment Projects
Action: Update Received.

Keith Israel, General Manager of the Monterey Regional Water Pollution Control Agency
(MRWPCA) provided an update regarding the progress made toward the Pure Water Monterey
and Ground Water Replenishment projects. He spoke to the independent advisory panel
reports, the pilot plant tours, environmental impact report work and other ongoing activities. Mr.
Israel outlined the key factors of the source water agreement negotiation meetings, speaking to
the series of critical negotiating sessions with the Salinas Valley Agricultural interest in an effort
to work out a compromise to allow the PWM/GWR to remain a viable water supply option for
the peninsula.

Mr. Israel also reported and provided a copy of the concept approval letter from the Department
of Public Health noting it is a significant step to move the project forward. He indicated good
traction has been made but staff continues to work through issues such as the source water
negotiations, the drought strategies including identification of other water sources, storage of
differential flows, improvement of water quality and salt mitigation strategies. Program staff is
also working to implement salt source control programs focusing on commercial users. Mr.
Israel answered questions from the Board.

Director Kampe expressed concern that Salinas Valley will not negotiate to which Mr. Israel
spoke to an agreement that which expires in 2037 allowing all water for the peninsula will come
back to the peninsula. He indicated that by modifying the term of the agreement and agreeing
to continue to supply portions of water, through interruptible flows, it will be a winning solution
for all. He also clarified comments regarding providing water at a different rate schedule and
explained a rate study would be done but water rates would differ because they will be
interruptible flows.

President Della Sala invited public comments on the item.
Nelson Vega questioned the total cost of water to the rate payers and how it could be
determined if no water purchase agreement has been signed. He expressed concern
the negotiations would increase the water purchase agreement costs.
David Lifland congratulated PWM on receipt of the letter from the Department of Public
Health and questioned why the Salinas River Lagoon was not considered as a water
source.

3

Mr. Israel responded to public comments indicating the water purchase agreement was not
undertaken until more progress was made on source control. Regarding sources, Monterey
Peninsula water would be the primary source with Salinas Valley water to use if available. He
also spoke to arrangements for source water from the Marina Coast Water District. Recent cost
estimates will be $2,200 acre/ft.

4. Receive Update on the Status of the Peoples Desal and the Pacific Grove Water Recycling
Projects

Director Kampe delivered a report on the item and provided a handout with a brief description
of the Pacific Grove water project. He thanked the Monterey Regional Water Management
District for a $100,000 planning grant to move forward on the project and updated the Authority
on the status reporting the project is on schedule for a pilot test in May 2016 and to be
operational by October 2016. This project would displace 125 acre/ft of potable water from Cal
Am.
Mr. Kampe indicated that there has been no recent work done with the City of P.G. for the
People's Project and expressed concern as to which agency will certify their work or who is
coordinating and reviewing their technical and environmental studies.

David Balch, attorney representing Nadar Aga and People's Moss Landing spoke during public
comment agreeing that not many substantive discussions have taken place with the City due to
the uncertainty of the change in the political structure at the City. He reported that over the last
year significant technical work was completed including a privately commissioned EIR, which is
almost complete. The Notice of Preparation will be released in the next week weeks and the
EIR will be complete after the public review period. Cost estimates have been completed as
well, and this project would provide water to north Monterey County and the project would move
forward with or without City support.
Mr. Blach extended an invitation to meet with any Mayor to discuss the draft EIR as well as give
a presentation at the next Authority meeting. Director Kampe requested for a full presentation
at a future meeting.

Mayor Della Sala invited further public comment and had no requests to speak. No action was
taken as this was an update on the status of the project.

5. Approval of Checks and Projected Year-End Financial Report

4
Action: Update Received and checks were approved and filed.

Authority Clerk Milton spoke to the expenses incurred during the last month and how it reflects
to the end of the year budget balance. She indicated that it was not anticipated that expenses
would exceed current bank balance and that any money remaining will be carried over into next
years budget balance. She also reported a member contribution was received from the County
of Monterey for their fair share of Fiscal Year 2012-13. Executive Director Cullem spoke to a
request made by Monterey County Supervisor Potter to explain the budget and the work plan of
the Authority, the $153,000 that was include in the County of Monterey Fiscal Year 2014-15
budget.
The Directors questioned the Monterey County Contribution for FY 13-14 to which Mr. Cullem
explained that was never included in Monterey County budget last year and it is very unlikely
that it will be received, but he will continue to pursue it.

President Della Sala invited public comment on the item.
Tom Rowley thanked the Directors for the effort and still requested that someone from
the County of Monterey be seated as part of the Authority and a regular report from
Monterey County should be provided.
David Lifland requested clarification regarding the fiscal years that Monterey County
approved and paid.

On a motion by Director Burnett, seconded by Director Rubio, and carried by the following vote,
the Monterey Peninsula Regional Water Authority approved and filed the checks through June
12, 2014.
Sala

6. Receive Report, Award a Contract for a Value Engineering (VE) Study for the Monterey
Peninsula Water Supply Project to Value Management Strategies, Inc (VMS), Reimbursable by
Cal Am With a Not-To-Exceed Cost of $109,035.70, Approve a Contingency of $11,000.00, and
Authorize the President to Execute The Contract for Professional Services

Executive Director Cullem spoke to the facilitation for the RFP and selection of the consultant
for a Value Engineering Study for the Monterey Peninsula Water Supply Project. He reported
that the selection committee recommended awarding the contract to VMS, which was approved
by the Governance Committee. This item is requesting approval of execution of the contract
with costs to be fully reimbursement by Cal Am. He spoke to negotiations completed that
resulted in a reduction of costs resulting in a total contract price of $109K. Mr. Cullem answered
questions from the Board.

David Lifland questioned when the contract would start, and how to provided comments.

5

On a motion by Director Rubio, seconded by Director Kampe, and carried by the following vote,
the Monterey Peninsula Regional Water Authority approved execution of a contract for a Value
Engineering (VE) Study for the Monterey Peninsula Water Supply Project to Value
Management Strategies, Inc (VMS), reimbursable by Cal Am with a Not-To-Exceed cost of
$109,035.70, approved a contingency of $11,000.00, and Authorized the President to execute
the contract for professional services:
Sala

7. Receive Report on Progress of Securitization Bills in the State Legislature and the Status of
Settling Parties Joint Comments on Ruling Requesting Comments on Surcharge Options and
Proposals

Vice President Burnett spoke to the progress of legislation which would provide for a
securitization structure resulting in $79-90 million in ratepayer savings. He reported that the
proposed legislation moved through the Senate successfully, and will go to the Assembly this
month. The first session will be on Monday, September 23, 2014 where Mr. Burnett, TAC
Member Stoldt and Assembly Member Stone will provide witnesses testimony. Vice President
Burnett anticipated that it would proceed smoothly. He clarified that having this legislation
signed into law is not the final step the MRWMD will need to make to meet the terms of the
settlement agreement.
President Della Sala invited public comments and had no requests to speak.
Executive Director Cullem recommended that prior to Surcharge 2 taking affect, that Cal Am or
MRWMD begin public education prior to the jump in water bills to reduce confusion and
complaints.

8. Receive Report and Discuss Latest California Public Utilities Commission Schedule for the
Monterey Peninsula Water Supply Project
Action: Discussed

Executive Director Cullem spoke to the schedule as it relates to the different water supply
projects and the CPUC schedule. He spoke to changes made since the initial introduction and
spoke to dates that have been changed for the release of the EIR. Mr. Cullem answered
questions regarding the schedule.
President Della Sala Invited public comments.
Tom Rowley said the time table is overoptimistic and premature to say that were are in
an position to evaluate an EIR. He expressed concern that the slant test well must be
proven to be workable to have a desal project and an EIR cannot be completed
accurately until then.

6

Mr. Israel provided an updated sheet for the GWR status. Mayor Burnett thanked Mr. Israel for
updating the schedule as it relates to GWR.
Director Kampe responded to Mr. Rowley's comments regarding evaluation of a project without
a clear source of water. Director Burnett responded first by saying that an EIR requires the best
judgment based on the information at hand. He indicating that the CPUC EIR Team, as a
lesson learned from previous project, reached out to the State Water Resources Control Board,
and asked for what questions need to be answered with regard to ground water rights. The
result was the request for the studies that were provided to the hydrogeological working group.
They have a report that they are refining and will be made public before the draft EIR is
released. The EIR will assess any impacts to the groundwater. The current judgment is that
they don't need to have a slant test well for the EIR to be completed.
In this case, the best information available is the modeling and the bore holes and associated
water tests. Cal Am, as a business decision, has deemed it necessary before investing the $75
million in a full bank of production wells.
This was an information item that will be amended and reviewed as necessary.

9. Discuss the Marina Mitigated Negative Declaration (MND) for the Monterey Peninsula Water
Supply Project Slant Test Well
Action: Update Received and Discussed

Ian Crooks from Cal Am spoke to the item indicating the mitigated negative declaration has
been released for public review and the comment period closes on Tuesday July 17, 2014 and
to date no comments have been received. The proposal will be completed in two to three
weeks and is scheduled for Marina Planning Commission on July 10, 2014. If the Planning
Commission is not appealed, it goes directly to Marina City Council. He also noted that nothing
in the MND causes concern and none of the proposed mitigation strategies cannot be handled.
Mr. Cullem and Mr. Crooks have been working with Marina to ensure that the item is approved
in time for the coastal development permit.

Tom Rolwey said he was encouraged by Mr. Crooks comments but there will be
engineering support to review and vet the document to ensure all issues are mitigated.
He thanked Cal Am for scheduling for success.
David LIfalnd spoke to concerns regarding SWCA listed, thinks that SWCA shoudl not
be allowed to quote anything on any project in the future.
Jan Schriener, a Director from the Marina Coast Water District Board of Directors
requested that Authority members as well as members of the public should maintain
professionalism at all times. The process needs to stay transparent and professional.
She expressed concern regarding a plan to truck water to the Cemex site (millions of
gallons) as well as bore hole data being lower in total results. She indicated more than a
verbal report needs to be given to explain these details. A letter will be discussed at the
MCWD Board meeting on June 16, 2014.

Update was received and no action was taken.

7

10. Discuss and Provide Direction Regarding The Detailed Critical Path Method (CPM) Schedule
for all Permits and Approvals for the Monterey Peninsula Water Supply Project
Action: Update Received and Direction was Provided.

Executive Director Cullem requested direction to track the critical path method to determine all
of the critical activities for the MPWSP and where the Authority may be able to assist. He also
proposed tracking cost comparison between projects. He requested this as an opportunity to
involve the TAC and requested direction from the Board.
Director Rubio welcomed and requested the opportunity to see a Gant Chart with appropriate
milestones, and that it be synced with the budget to get a sense of where it is with the timeline
as well as with the financial scope of the process.
President Della Sala invited public comment.
Nelson Vega spoke in support of Mayor Rubio's comments to track project progress as
well as costs.
Direction provided by Director Rubio was approved unanimously.

ADJOURNMENT

Having no further business to conduct, the meeting was adjourned at 8:53 pm

ATTEST:

Lesley Milton, Authority Clerk Chuck Della Sala, President


Agenda Report

Date: July 10, 2014
Item No: 2.

06/12
FROM: Executive Director Cullem

SUBJECT: Receive Status Report of the Final Negotiations on the Ground Water
Replenishment Project Source Water Agreements

RECOMMENDATION:

Staff recommends that the Water Authority receive an update from Keith Israel, General
Manager of the Monterey Regional Water Pollution Control Agency on the status of
negotiations for source and product water, and on the prospects of Pure Water
Monterey (PWM) / Ground Water Replenishment (GWR) remaining competitive as part
of the MPRWA portfolio of water supply projects.

DISCUSSION:

The Pollution Control Agency has conducted a series of critical negotiating sessions
with the Salinas Valley agricultural interests in an effort to work out a compromise to
allow PWM/GWR to remain a viable water supply option for the Peninsula.

At Exhibit A is the most recent revision of the GWR schedule. Since time is of the
essence in order to retain GWR in the water portfolio, Keith Israel, the general manager
of the Pollution Control Agency has been asked will provide additional details at the
Water Authority meeting.

ATTACHMENTS:

GWR schedule as revised
October 7, 2013
GWR

Task Due Date Responsible Party Notes
File Motion for
Bifurcation of the
GWR Decision
August 2013 MRWPCA Complete and Granted
Board Actions to
Approve Revised
Governance Committee
Agreement
October 2013
August/Sept 2013
MPWMD, MPRWA,
County, & Cal-Am
To be Completed in
October
Executed Agreements
for GWR Source Water
and/or Declaratory
Relief

June 23, 2014
June 30
MRWPCA
Action on
Meet & Confer in
Progress
Draft WPA
Mar 2014
August
MPWMD & MRWPCA Delayed due to source
water agr & funding
Obtain Representations
from DPH re Use of
Extracted GWR Water

Oct 2014
MRWPCA See June 5, 2014
Concept approval letter
from CDPH
Obtain Representations
from RWQCB re Use of
Extracted GWR Water

Oct 2014
MRWPCA See June 5, 2014
Concept approval letter
from CDPH
Storage Agreement
with Seaside Basin
Watermaster

Jul 2014
September

MRWPCA & MPWMD
Delayed as noted
above
GWR Basis of Design
Complete with At Least
10% Design

Jul 2014
August

MRWPCA

Delayed as noted
above
GWR Financing Plan
Sufficient for SRF
Funding

Aug 2014
September

MRWPCA & MPWMD

Delayed as noted
above

Agreement on Terms of
WPA

May 2014
September

Cal-Am, MRWPCA,
&MPWMD
Delayed as noted
above
Perform Revenue
Requirement Analysis
Including Any Debt
Equivalency Effect

Jul 2014
August

MRWPCA & MPWMD
Delayed as noted
above
Perform Assessment of
GWR Positive and
Negative Externalities
for Any Premium
Showing

June 2014
September

MRWPCA & MPWMD

Delayed as noted
above
DEIR Circulated July 2014
August
MRWPCA Coordinate with CPUC
EIR
Dilution Water
Requirements
July-October 2014 MRWPCA

Project Approved and
FEIR
October 2014
December
MRWPCA Coordinate with CPUC
EIR
All Permits for GWR
Construction Obtained

Major Permits
1
st
Quarter 2015
January 2015

MRWPCA

June 12, 2014
Agenda Report

Date: July 10, 2014
Item No: 3.

06/12

SUBJECT: Receive Preliminary Cost Comparison Between the Ground Water
Replenishment Project and the Monterey Peninsula Water Supply Desal
Project

RECOMMENDATION:

Staff recommends that the Water Authority receive an update from Keith Israel, General
Manager of the Monterey Regional Water Pollution Control Agency and David Stoldt,
General Manager of the Water Management District on the cost comparisons between
Ground Water Replenishment (GWR) and Cal Ams Desal facilities.

DISCUSSION:

As a part of the CPUC decision process approving GWR as part of a new Peninsula
Water Supply system, a cost comparison between GWR and the Cal Am Desal facilities
needs to be completed.

At Exhibit A is a list from the Pollution Control Agency that suggests areas of cost
comparison.

Keith Isreal and Dave Stoldt have been requested to update the Water Authority on the
preparation of the cost comparison.

ATTACHMENTS:

Suggested Aras of Cost Comparison


Joint Powers Authority Member Entities:
Boronda County Sanitation District, Castroville Community Services District, County of Monterey, Del Rey Oaks, Fort Ord, Marina Coast Water District, Monterey,
Moss Landing County Sanitation District, Pacific Grove, Salinas, Sand City, and Seaside.

1/30/2014

GWR Annualized Cost Components

1. Capital recovery (assume 30-year SRF loan)
2. Operations and maintenance costs
a. Power
b. Chemicals
c. Labor
d. Materials
e. Equipment replacement
f. Miscellaneous costs
3. Treatment costs for water through secondary treatment
4. Transmission (lease of RUWAP)
5. Contributions from various parties towards annualized
costs

Z:\General Manager\Mayors JPA-MPR Water Authority\GWR annualized costs components 1-30-14.doc

Agenda Report

Date: July 10, 2014
Item No: 4.

06/12
FROM: Authority Clerk Milton

SUBJECT: Election of Officers for Fiscal year 2014-15

RECOMMENDATION:

Staff recommends that the Authority Directors appoint the Chair, Vice-Chair, Secretary,
Treasurer, and Technical Advisory Committee Chair for Fiscal Year 2014-2015.

DISCUSSION

Article 3 of the adopted Bylaws indicate at the first meeting of the Board of each fiscal year,
nominations for the Officers will be made and seconded by a DirectorThe initial term of the
elected Officers shall run from the date of their election to office until June 30, 2013. Thereafter,
each officer shall serve a term of one (1) year. An officer may succeed himself/herself and may
serve any number of consecutive or non consecutive terms.

This is the first meeting of the 2014-15 Fiscal Year and below is a list of the positions currently
held by the Authority Directors and the associated appointment dates. The amended by-laws
eliminated the requirement that the TAC Chair be a Director, however appointment of a Director
is still allowed if so desired.

Authority Directors Current Position Appointment
Date
1. Mayor Chuck Della Sala President July 2013
2. Mayor Jason Burnett Vice President, TAC Chair July 2013
3. Mayor Jerry Edelen Treasurer July 2013
4. Mayor Ralph Rubio Secretary July 2013


Agenda Report

Date: July 10, 2014
Item No: 5.

06/12

SUBJECT: Receive Report on Status of Mitigated Negative Declaration for the City of
Marina Test Wells and the Approval Process for the City of Marina and the
California Coastal Commission Coastal Development Permits

RECOMMENDATION:

Staff recommends that the Water Authority receive an update from Cal Am on the
Marina Mitigated Negative Declaration (MND) for the Test Slant Well and discuss the
approval process and schedule to be followed in obtaining a City of Marina CDP and a
Coastal Commission CDP. The Authority should also receive an update on the National
Ocean and Atmospheric Administration (NOAA) Monterey Bay National Marine
Sanctuary (MBNMS) Environmental Assessment (EA).

DISCUSSION:

The test slant well has undergone an extensive environmental review process that has
resulted in Marina circulating an MND in May 2014. Nine (9) comments were received
by the City and responses have been prepared.

The City Planning Commission will consider the MND and Marina CDP at its meeting of
July 10, 2014. The City has allowed for two (2) Planning Commission meetings and two
(2) City Council meeting on the MND and Marina CDP if needed. The complete Marina
schedule for approval and construction of the test well is at Exhibit A.

To keep the schedule on track and to conduct as much work as possible concurrently,
Cal Am currently intends to bring the Request for Proposal (RFP) for the test slant well
construction to the Governance Committee on July 16, 2014.

In parallel with the Marina processing, MBNMS has circulated its draft EA with
comments due back by July 26. Cal Am has been requested to brief the Water Authority
on the EA as well as the MND.

ATTACHMENTS:

CEMEX Test Well Schedule


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