mprwa updated regular meeting agenda packet 06-11-13

8/22/2019 MPRWA Updated Regular Meeting Agenda Packet 06-11-13

1/26

AgendaMonterey Peninsula Regional Water Authority (MPRWA)

Regular Meeting7:00 PM, Thursday, June 13, 2013

Council ChamberFew Memorial Hall

Monterey, 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 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 contactthe sender concerning the details.

CONSENT ITEMS

1. Approve Future Meeting Dates and Agenda Items - Cullem

2. Receive Financial Update and Authorize Staff to Contract for Financial Services Audit forFiscal Year 2012-13 - Cullem

3. Review Final Recommendations for Draft Request for Proposal for The Monterey

Peninsula Water Supply Project - Burnett

END OF CONSENT AGENDA

APPROVAL OF MINUTES

4. May 23, 2013

AGENDA ITEMS

5. Receive Report on California Public Utilities Hosted Ground Water ReplenishmentWorkshop on June 12, 2013 - Burnett

6. Receive Update and Provide Direction Regarding Draft Power Purchase Agreement TermSheet - Cullem

7. Receive Report and Provide Guidance Regarding Reproduction of Water Article And OtherOutreach Opportunities - Cullem

8. Receive, Update, and Discuss MPRWAs Position on Issues for MPRWAs Participationand Decision-Making with Respect to California Public Utilities Commission SettlementProceedings in A.12.04.019 - Burnett

ADJOURN TO CLOSED SESSION


2/26

Thursday, June 13, 2013

2

9. Conference with Legal Counsel Existing Litigation, Gov. Code, section 54956.9 California Public Utilities Commission, In the Matter of Application of California-AmericanWater Company (U210W) for Approval of the Monterey Peninsula Water Supply Projectand Authorization to Recover All Present and Future Costs in Rates, A.12.04.019, FiledApril 23, 2012 - Burnett

ADJOURN TO OPEN SESSION

10. Receive, Update, and Discuss MPRWAs Position on Issues Identified During ClosedSession for MPRWAs Participation and Decision-Making with Respect to California PublicUtilities Commission Settlement Proceedings in A.12.04.019 - Burnett

ADJOURNMENT

The Monterey Peninsula Regional Water Authority is committed to include the disabled in all ofits services, programs and activities. For disabled access, dial 711 to use the California RelayService (CRS) to speak to staff at the Monterey City Clerks Office, the Principal Office of theAuthority. CRS offers free text-to-speech, speech-to-speech, and Spanish-language services24 hours a day, 7 days a week. If you require a hearing amplification device to attend ameeting, 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 publicinspection during the meeting or may be requested from the Monterey City Clerks 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.


3/26

Monterey Peninsula Regional Water Authority

Agenda Report

Date: June 13, 2013

Item No: 1.

08/12

FROM: Prepared By: Clerk to the Authority

SUBJECT: Approval of Meeting Dates and Agenda Items through December 31, 2013

RECOMMENDATION:

It is recommended that the Authority approve the below meeting dates through December 31,2013

DISCUSSION:

The MPRWA Directors have been meeting the Second and Third Thursday of every month forthe last year. Staff suggests a reduction of the meeting frequency, consistent with the projectedneeds following a CPUC decision on the settlement agreement. Below is a proposed list ofmeeting dates for the Directors through December 31, 2013, assuming two meetings per monththrough the summer season, and suggesting one regularly scheduled meeting and one optionalsecond meeting if necessary beginning in September. Staff will be suggesting a similarschedule change for the TAC as well.

The following dates are recommended for future meetings through December 31, 2013.

Regular: July 11, 2013

Regular: July 25, 2013

Regular: August 08, 2013Regular: August 22, 2013

Regular: September 12, 2013Optional: September 26, 2013

Regular: October 10, 2013Optional: October 24, 2013

Regular: November 07, 2013

Optional: November 28, 2013 (*4th Thursday Due to Thanksgiving Holiday)

Regular: December 12, 2013Optional: TBD (*Due to Christmas Holiday)


4/26


5/26


Agenda ReportDate: June 13, 2013

Item No: 2.

08/12

FROM: Executive Director CullemPrepared by Clerk Milton

SUBJECT: Receive Financial Update and Authorize Staff to Contract for Financial Services

Audit for Fiscal Year 2012-13 - Cullem

RECOMMENDATION:

Staff requests approval to allow the Annual Audit and the Financial Report to be completedconcurrently with that of the Member City conducting the Authority Audit.

DISCUSSION:

On April 25, 2013 the Authority adopted its operating budget for Fiscal year 2013-14. To date,most of the 6 member cities have approved their individual appropriation for the Authoritysbudget. Exhibit A is the current projected accounting for the Authority through June 30, 2013 toclose out the first full fiscal year.

The budget for the Executive Director Services remains robust for three reasons. First, theposition was not filled until mid year. Second, since the position was budgeted based on acalendar year, but is more appropriately accounted for on a fiscal year. Last, the hoursexpended by the Executive Director through May, 2013 was an average of only 22.5 hours, lessthan the budgeted 30 hours. The remaining balance of funds from Fiscal year 2012-13 has beenincorporated into the Fiscal year13-14 budget approved by the Authority on April 25, 2013.

Aside from that, the Authority budget has been able to maintain cost controls and operate withinthe approved operational budget as demonstrated below.

As the end of the 2012-13 Fiscal year closes, Article 6.3 of the adopted bylaws states:

The accounts of the Authority shall be reviewed as of the close of business onJune 30th by a certified public accountant. A full Opinion Audit will be provided tothe Board by the reviewing certified public accountant. The statement shall at alltimes be available to members of the organization within the offices of theAuthority.

As of June 30, 2013 the Authority will still have some outstanding invoices for services that willhave been incurred up to June 30, 2013 and may not be able to be captured by full opinion by aCertified Public Accountant. Staff is recommending delaying the review until all invoices forservices have been received for the Fiscal year.


6/26

Staff requests approval to allow the Annual Audit and the Financial Report to be completedconcurrently with that of the Member City conducting the Authority Audit. This will be completedno later than November 30, 2013.

Exhibit A:

Adopted Budget 2012-13

Professional Services

Adopted

Budget

Expended Remaining Encumbered

by 6/30/13

Remaining

Legal Counsel $20,000 $14,750 $5,250 $0.00 $5,250.00

Attorney OfRecord $149,412 $119,238 $30,174 $30,173.74 $0.00

Clerk Services $35,000 $35,000 $0 $0.00 $0.00Financial Advisor $12,500 $12,500 $0 $0.00 $0.00

Executive Director $131,868 $18,068 $113,800 $8,967.50 $104,832.40 *

Studies $10,000 $0 $10,000 $0.00 $10,000.00

Project Evaluation $102,090 $94,198 $7,892 $0.00 $7,891.52

Insurance $7,000 $5,746 $1,254 $0.00 $1,254.11

Audit $5,000 $0 $5,000 $5,000.00 $0.00

Contingency $3,855 $2,164 $1,691 $500.00 $1,191.09

$476,725 $301,665 $175,060 $44,641.24 $130,419.12


7/26


Agenda Report

Date: June 13, 2013

Item No: 3.

06/12

FROM: Executive Director Cullem

SUBJECT: Review Final Recommendations for Draft Request for Proposal for The MontereyPeninsula Water Supply Project

RECCOMENDATION:

This item is for information only purposes. These are the final recommendations, approved byboth the TAC and the Authority and forwarded to the Governance Committee and passed on toCal Am for incorporation into the Draft RFP Design Build schedule for release on June 17, 2013.

ATTACHMENTS:

Recommendations from Monterey Peninsula Water Supply Project GovernanceCommittee to California American Water re Request for Proposals for Design andConstruction of Desalination Infrastructure - May 28, 2013


8/26

Governance Committee C/O Monterey Peninsula Water Management District P.O. Box 85 Monterey, CA 93942

GOVERNANCE COMMITTEE

FOR THE

MONTEREY PENINSULA WATER SUPPLY PROJECT

California American Water Monterey County Board of Supervisors

Monterey Peninsula Regional Water Authority Monterey Peninsula Water Management District

Recommendations from

Monterey Peninsula Water Supply Project Governance Committee to

California American Water re Request for Proposals for

Design and Construction of Desalination Infrastructure

May 28, 2013

1. The request for proposals (RFP) continue to require detailed bids for the base-case design

in order to facilitate the comparison of bids but should do more to encourage creativity in

development of alternative designs that may save money and/or increase value. Alternative

designs should require same level of detail as the base-case design and meet or exceed same

performance standards.

2. The RFP should state that all workers will be paid, at least, the prevailing wage.

3. The Governance Committee supports inclusion of a goal for local hiring. California American

Water (Cal-Am) shall review the County of Monterey ordinance that specifies local hires and

consider inclusion of that or similar language in the RFP. The bidders local utilization plan

should be a factor in the 40% technical evaluation criteria.

4. Establish a 30-year net present value cost comparison, instead of (or in addition to) a 20-

year term.

5. Bidders should be advised that the rate of corrosion is high in the local coastal marine

environment. Good quality materials are required so that Cal-Am and the rate payers will not

be responsible to pay for replacement of components that have developed rust after a short

period of time.

6. The Governance Committee agrees with the approach to apply penalties for late delivery, but

understands and agrees with the approach to not provide for a bonus for early project

completion.

7. The Governance Committee understands that Cal-Am is proposing to ask for an estimated

schedule for both permitting and construction and that the date for completion (and associated

penalties for late delivery) would be set relative to the signing of the Design-Build contract. The

Governance Committee requests that Cal-Am consider ways to bifurcate the permit schedule

from the construction schedule, recognizing certain parts of the permitting process will beoutside the control of the Design-Build firm/team.

Note: A number of other items were discussed by the Governance Committee and offered to Cal-Am

for consideration. It is the Governance Committees understanding that Cal-Am will incorporate many

of those items into the RFP.

U:\Arlene\word\2013\GovernanceCommittee\Minutes\20130528recommendationsFinal.docx


9/26

MINUTES

MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)Regular Meeting

7:00 PM, Thursday, May 23, 2013COUNCIL CHAMBER

FEW MEMORIAL HALLMONTEREY, CALIFORNIA

Directors Present: Burnett, Edelen, Pendergrass, Alternate Member Lucius, Della Sala

Directors Absent: Kampe

Staff Present: Executive Director, Legal Counsel, Clerk

ROLL CALL

President Della Sala called the meeting to order at 7:05 p.m. All members were present withthe exception of Mayor Kampe, and Alternate Casey Lucius attended in his absence.

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

President Della Sala invited reports from Directors and Staff. Director Burnett reported on thepossible change of location of the Monterey Peninsula Water Supply Project (MPWSP) test wellto an alternate location on the Semex property. Conversations are continuing and areprogressing positivity. He indicated that Congressman Farr submitted a letter to the U.S. Fishand Wildlife Service requesting assistance in identification of an alternate, less controversialsite.

President Della Sala reported regarding the Governance Committee special meeting on May17, 2013 which adopted draft criteria for the Ground Water Replenishment (GWR) project to be

recommended for the June 12, 2013 California Public Utilities Commission (CPUC) GWRworkshop. The Committee adopted the guidelines recommended by the Authority. He thenreported that the Cal Poly design teams made outstanding presentations to the GovernanceCommittee and went above and beyond in their level of detail and engineering. Manyefficiencies were designed into the facility, including a net zero energy design consumption.Design was to be LEED-like without the cost for certification for Leadership in Energy Efficiencyand Design (LEED). Both plans were designed for future expansion. The two teams were thenrequested to break out the most expensive part of the development to determine if therisk/reward benefit was there and to determine how expensive it would be to maintain theenergy efficient building.

Executive Director Reichmuth reported that all previously video recorded meetings are now

linked on the website www.mprwa.org. He also reminded the Directors that May 31, 2013 wouldbe his last day working as the Executive Director for the Authority and that Jim Cullem willbecome the new Executive Director. Mr. Reichmuth then requested continuing item three to thenext regular meeting as there was no representative from Cal Am to provide an update on theMPWSP.

On a motion by Director Edelen, seconded by Director Lucius, and carried by the following vote, theMonterey Peninsula Regional Water Authority approved continuing agenda Item three to the nextmeeting.

AYES: 6 DIRECTORS: Burnett, Edelen, Lucius, Pendergrass, Rubio, Della Sala


10/26

MPRWA Minutes Thursday, May 23, 2013


Regular Meeting Minutes - Thursday, May 23, 20132

NOES: 0 DIRECTORS: NoneABSENT: 0 DIRECTORS: NoneABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

PUBLIC COMMENTS

President Della Sala invited comments from the public for items not on the agenda. NelsonVega questioned what the process would be if the Cal Am project was not successful andquestioned if the Authoritys position is to support general plan build out for the EnvironmentalImpact Report (EIR) process. With no additional requests to speak President Della Sala closedpublic comment and responded to Mr. Vegas question by saying the Authority requested theCPUC to mandate a full EIR based on a full general plan build out.

APPROVAL OF MINUTES

1. May 9, 2013Action: 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 May 9, 2013:

AYES: 6 DIRECTORS: Burnett, Edelen, Lucius, Pendergrass, Rubio, Della SalaNOES: 0 DIRECTORS: NoneABSENT: 0 DIRECTORS: NoneABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

AGENDA ITEMS

2. Receive Report and Provide Guidance Regarding Settlement Discussions and Preparation forJune 12, 2013 California Public Utilities Commission Settlement Conference (Burnett)Action: Received Report and Discussed

Director Burnett reported on this item and indicated that because of the adopted positionstatement, many of the things that will take place in the confidential settlement discussions willbe less challenging. The goal of the Authority has been to maintain transparency. He noted thatif issues due arise that need further clarification, they will be returned to the Authority forclarification or to refine elements of the position statement. Director Burnett reported thetimeline for the final settlement hearings as listed below:

June 14, 2013 - Final settlement agreements submitted

June 12, 2013 - GWR workshop June 28, 2013 - GWR Settlement agreements submitted

Director Burnett then reported that the criteria approved by the Authority, GovernanceCommittee and the Monterey Peninsula Water Management District for the June 12, 2013workshop was rejected by the CPUC and returned requesting revisions to be more objective inorder to satisfy the CPUC rules under the Tier 2 letter. Director Burnett expressed concern thatmore objective criteria will mean less discretion and judgment that can be exercised on behalfof the community. He then answered questions of the board.


11/26




President Della Sala opened the item to public comment. Nelson Vega questioned why everydocument is based on the 6.4 MGD facility size, and not the 9.6 MGD capacity. His assumptionis that proposal should be vying for a larger plant and if the GWR is successful, cost effective,and efficient, then opt for the smaller plant plus GWR. He also questioned the settlementconference process. Having no more requests to speak, President Della Sala closed publiccomment and responded that the Authority is in support of a portfolio approach, and Cal Am isprogressing as a portfolio, but going forward with a study for the 9.6 MGD in the event GWR is

not successful.

3. Receive Status Update for Compliance with Authority Adopted Conditions for the MontereyPeninsula Water Supply Project (Bowie)Action: Continued to the Next Regular Meeting

4. Receive Report and Provide Direction Regarding Term Sheet for Power Purchase Agreementby Cal Am from Monterey Regional Waste Management District (Reichmuth)Action: Received Report and Discussed

Executive Director Reichmuth reported that he has been facilitating the development of a power

purchase agreement between the Monterey Regional Waste Management District and theMPWSP. He indicated that a committee has been formed and is in process of developing adraft term sheet. He anticipates that for every .01 per KWH saved would equate toapproximately $480 in cost savings per day, but the real cost savings would be with theelimination of the transmission costs. Another issue requiring discussion would be therenewable energy credit ownership, or RECs as they hold monetary as well as publicrelationship benefits. Mr. Reichmuth then answered questions of the Directors.

Director Rubio questioned if there was an issue of a public board selling energy to a publicagency. Director Edelen reminded the Directors that the priorities are to produce the water atthe lowest possible rate.

President Della Sala opened the item to public comment and had no requests to speak.

5. Receive Report and Provide Direction on Draft Request for Proposals for Design-Build Servicesfor Monterey Peninsula Water Supply ProjectAction: Received Report and Provided Direction for Recommended Changes

Director Burnett introduced the item and facilitated discussion regarding the Draft Request forProposal. He noted that within the Governance Committee agreement, any contracts over $1million are required to go before the Governance Committee for review and recommendations.The turnaround time is 10 days to avoid delay of the process. This agenda item is to allow theAuthority to make recommendations for Director Burnett to report to the GovernanceCommittee. The RFP will be released to the public on June 17, 2013 and responses are due in

September 2013.

Director Burnett then discussed the items the governance committee and the TAC discussedand he reviewed the report prepared by SPI consultants. The Directors discussed the meritsof the below recommendations.


12/26




1) Balance of Risk: Risk is shouldered more for design build firms over traditional bids.However, if too much risk is assigned to the Design-Build firm, the results will be morecostly bids.

2) Responses should be evaluated for both smaller and larger size facilities, should beweighted equally, and should be evaluated on both construction and operations. TheTAC recommends costs be evaluated over a 30 year life review.

3) Approach to evaluation criteria - 40% based on technical merits and 60% on the

business terms of the proposal. Basic thinking, less weight given to technical and teams,all teams have been prequalified so any team should be able to deliver the project.

4) Concern that the RFP is too detailed, rather than leaving it to creative design. The TACbelieves we should encourage more innovation and creativity on behalf of the Design.would expect all to bid on base design, for apples/apples comparison, given how tofactor in scoring

5) Provisions for penalties if projects are not completed on time, but no bonus forcompleting on time or early. TAC feels a positive encouragement is important.

6) Binding arbitration vs. a court process - unless we want to take a position, the lawyerswill negotiate this and bring back a recommendation.

7) Due to higher than normal inversion levels in our local environment designs must berobust against corrosion.

Director Rubio spoke to the concept of penalties saying it was common business practices ofnon performance. He then spoke to the idea of creativity and that it comes down to a value

judgment and could be difficult to evaluate. He suggested holding the bid price for over a yearis unusual and somewhat unreasonable. Executive Director Reichmuth indicated that municipalcontracts are usually 90 days for bid price but to the bid value and the time for the project, oneyear is not unreasonable.

President Della Sala opened the item to public comment. Nelson Vega questioned if there wasany value with requesting a specific plan RFP rather than a creative design, as creativity andunknown equals risk. Having no more requests to speak, President Closed public comment.

Mr. Reichmuth agreed with Mr. Vega's comments and went on to discuss the risk burdendifferences with a design build project and that it is appropriate in this environment to takeadvantage of the latest technologies and proprietary equipment that can be brought anddelivered at a lower price. Equally important, with a design-build contract, if there is a designerror that leads to a contract change, the design-build firm would be responsible to remedy.

President Della Sala questioned the Directors consensus with the recommendations providedby the TAC and the Directors agreed to all recommendations.

6. Discuss and Provide Policy Direction Regarding Support of New Water Service Connection Fees(Burnett, Stoldt)Action: Discussed and Approved Consideration of a Connection Charge for New Users

Director Burnett discussed the fact that ratepayers will be billed for the costs incurred to bring a newMPWSP facility operational, paying thorough surcharge two. However, if a new water customerbegins service after the project is completed, there would be no obligation to pay any of the feescurrent users are paying. A fairness argument can be made that there should be a mechanism thatnew rate payers share the development cost. Director Burnett suggested that a connection fee be putin place to account for this issue and is asking if the Authority is in support of such a connection fee.Director Burnett then answered questions from the Directors.


13/26




Director Pendergrass expressed concern and indicated this process is a balancing act and that heprefers to see Cal Ams rate proposal to the CPUC prior to deciding. Director Edelen spoke to theprocess to determine equal contributions, but indicated he is in favor of the idea of a connectioncharge. Director Rubio expressed concern that too many fees will stifle the economic vitality of thecommunity by discouraging development. He supports the idea with caution. Alternate Luciusquestioned the duplication of fees from multiple agencies to which President Della Sala explained thenomenclature of "connection fee" from other regional water projects.

President Della Sala opened the item to public comment. City Manager John Dunn expressedunderstanding for the logic of the fee, but communicated that Seaside customers are currentlycharged a connection fee to Cal Am as well as a water allocation fee imposed by the MPWMD. Heurged reconsideration for the potential of three fees to Seaside customers and urged finding anintegrated approach. The then urged extra consideration for affordability, indicating if the fees are toohigh it defeats the purpose of this project. Doug Wilhelm spoke to the comment that some cities havemore lots of record for general plan build out than others and reminded the Directors that there is asurcharge already in place for current rate payers. Mr. Wilhelm then questioned how the moneywould be returned to the ratepayers. With no more requests to speak, President Della Sala closedpublic comment. Director Burnett agreed with Mr. Wilhelm and indicated it would be used to lower therate for all water users. The magnitude of that reduction would depend on the number of connection

fees.

President Della Sala identified that this policy is a way to reduce the cost of the project to theratepayers and the fee is still to be determined. In principle, he asked if the Authority supported thisposition. Director Rubio expressed resistance to agree without more details, but supported the ideathat a connection charge for new users as a way to charge a pro-rated share.

On a motion by Director Rubio seconded by Director Lucius and carried by the following vote, theMonterey Peninsula Regional Water Authority approve the concept of a new water serviceconnection fee with the reservation of seeing further information and study to refund the connectionfee costs for possible integration

AYES: 6 DIRECTORS: Burnett, Edelen, Lucius, Pendergrass, Rubio, Della SalaNOES: 0 DIRECTORS: NoneABSENT: 0 DIRECTORS: KampeABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

7. Provide Further Direction and Refinement Regarding Authority Policy Position with Respect to theSignificant Contribution of Public FundsAction: Discussed and Provided Direction

Director Burnett reported on the item and requested clarification for the Authority position ofwhat "significant" contribution of funds would qualify as. He clarified that a couple of variablesneed to be accounted for. First, the size of the facility and second, most of the cost numbers wefocus on are the high end cost numbers. Director Burnett answered questions from theDirectors.


14/26




Director Rubio suggested using the guideline of 25%of the total cost for the public contribution.Director Pendergrass spoke to issues of public ownership and Alternate Director Luciusquestioned what the direct impact would be to rate payers. Director Burnett responded that costto the individual rate payer would depend on interest rates years from now. If the MontereyPeninsula Water Management Districts interest rate savings calculations associated withsecuritization and rate reduction bond are accurate, total savings on $100 million over a 30 yearperiod is $224 million dollars. Over a 30 year period it's about a $1,000 per household.

President Della Sala opened the item for public comment. Doug Wilhelm spoke indicating thatCal Am has over 42,000 hook ups and based on his own calculations of surcharge two, it wouldcost an average homeowner $2,000 for the start up of the plant. Pacific Grove City ManagerTom Frutchey spoke indicating that for every $1,000 savings per person, assuming $100 permonth, it's a 1% savings. Having no more requests to speak, President Della Sala closed publiccomment and brought the discussion back to the board.

Director Burnett summed up the two basic ways of reducing Cal Am's equity: 1) rate reductionsecuritization and 2) Surcharge two. With respect to Surcharge 2, if we are successful with the first,the revenue requirement will be less because we will be saving interest charges and if you setsurcharge two equal to the revenue requirement, so you don't have rate shock but a gradual

increase. Director Pendergrass expressed concern that Cal Am is not in support of this strategy asthey have expressed opposition before. President Della Sala indicated that earmarking apercentage is not perfect but a range could cover all bases.

On a motion by Director Rubio seconded by Director Edelen and carried by the following vote, theMonterey Peninsula Regional Water Authority approved the refinement of the previously adoptedposition regarding the item significant contribution of public funds to add the definition that Cal Ammust accept the contribution of public funds of approximately 50% of the cost of the project toinclude both surcharge two and the rate reduction bonds to count toward the public contribution of50%.

AYES: 6 DIRECTORS: Burnett, Edelen, Lucius, Pendergrass, Rubio, Della SalaNOES: 0 DIRECTORS: NoneABSENT: 0 DIRECTORS: KampeABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

ADJOURNMENTWith no further business to come before the Authority, President Della Sala adjourned themeeting.

ATTEST:

Lesley Milton, Authority Clerk Chuck Della Sala, Authority President


15/26


Agenda Report

Date: June 13, 2013

Item No: 5.

06/12


SUBJECT: Receive Report on California Public Utilities Hosted Ground WaterReplenishment Workshop on June 12, 2013

RECCOMENDATION:

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

ATTACHMENTS:


16/26


17/26


Agenda Report

Date: June 13, 2013

Item No: 6.

06/12


SUBJECT: Receive Update and Provide Direction Regarding Draft Power PurchaseAgreement Term Sheet

RECCOMENDATION:

Staff is requesting the Authority to review the minutes of the power purchase agreementmeeting of June 6, 2013 and provide direction.

A copy of the minutes will be provided at or before the meeting.

ATTACHMENTS:

Minutes of the June 6, 2013 Power Purchase Agreement Meeting


18/26

DRAFTJune 5,2013

TERM SHEETfo r

Primary Terms for New Power Sales Agreement (PSA) betweenMonterey Regional Waste Managem ent Distr ict (MRWMD) andCalifornia American Water Com pany (CalAm)Com merc ial Terms:Project Definition - The project will be that the MRWMD (District) will generate electrical power and provide thatpower to the proposed desalination plant owned and operated by CalAm, a regulated utility, operating within theMonterey Peninsula Water M anagement District.Unit Contingent: The existing Power Purchase Agreements (PPA) with PG&E and 3Phases Renew ables are unitcontingent agreements, that is the District is only obligated to supply power when power is produced.Installed Capacity: The current actual installed capacity 5 MW. The future planned 3 additional MW. Capacity of thetransformer 5 MW plus a second 5 MW backup.Contract Amount (annual quantity): The proposed annual M WH to be delivered for planning purposes not contractual.- Current Power output: 5 MW, minus District usage (0.5 MW)- Projected Power output; 7 MW by xx/vd2Oxx , minus District usageExcluding the existing commitments described above, MRW MD will be able to divert as much power as needed toneighboring adjacent parcels. Power Demand by CalAm- Xx MW AverageXx MW Peak- Xx MW SeasonalMinimum or Guaranteed Amount: Am ount of MW H that will be a contractual obligation to supply and to purchase.Product Definition (energy, capacity, green attributes, voltage stabilization): The Product has to b e defined; Energy vs.RECs, Capacity, and other attributes.- Product is the electricity and Renewable Energy Credits (RECs) from all engine/generators from the existingMR WM D power plant less District usage.- Ownership of R enewable Energy Credits (RECs) to be discussed.Availability: Hours that facility is operating; a level of 85% is a normal quality operational level.Term of Agreement:- Ten year agreement; longer term?.Security: Financial assurances for performance.Delivery Point: This will have to be defined. The normal delivery point is close to the outlet of the transformer (thehigh side) physically and contractually at the meter used to measure the power.Delivery Voltage: The current voltage at the h igh side of the transformer is 21 ,000 volts. Generators produce at 4,160volts.Metering: Real time metering at the delivery point for purposes of calculating payments; revenue grade meter.

t


19/26

Interconnection Issues: A norm al utility contract will have a separate interconnection agreement, an engineering studyon the im pact to the system, the load on the existing lines, the m etering, the safety issues, shut downs, etc. TCost of Studies: Who performs, pays, etc.Project Start Date: Contingent on construction, etc.- Effective date is January 1, 20_ or as soon as possible thereafter.Existing Contractual Obligations to Sell PowerPrice: Separate pricing for each attribute; escalation; tied to an index?- Baseload price of $0.xxxx dollars/kWh- Annual Cost of Living Price Adjustments of xxxBackup Power: Stand by power. Responsibility of CalAm.- Interruption of Pow ero By CalAmo By DistrictExcess Power in the Future:- Additional Power Output generated by additional landfill gas engine/generators installed by the District may/maynot become subject to the terms of the PSAEnd of Term Options: At the end of the contract, MRWMD will discuss future contact options for this, and anyadditional power developed, with CalAm before comm itting to selling the power to another buyer. Options forextension?- Use the Standard Form for Pow er Sales

June 5, 2013:\wmmmprwa\ps draft calammrwmd_revised 6513.docx


20/26

M

DOW .

L 1 !I a d MarOption 3Gen 5 &- B u s L i m a a c t-Trans f . LimiLo011DmiOna. V1111atm111* +126114+00 b00% caaria la SODOMMUDD

110 . i c s o,00

4I2MDmole

4611 4100 LOD MIDIUD C

4,6,:111a - aW arPem e w s 1 0 1 /5 MI

WSWralMOR II tai-t

t e aMMIar i t SOO +Maar InA s a 1a.rd1r dunnaiaanaioardaflak, LW.

so rra dans

LISI

rz--DIMES

tati60

1 1 1 1 1 0 - o v a n l I g n O N T E R E Y R E G I O N A LT A S T E I I A N A G E E I E N T D i m m e r

MOM

1 = 1 1 0 1 .MRWMD SITE ELECT

SING

LEGENDC R O I A 1. tow. R E F E R E N C E , at star n.-2

- FOR untrIn- GE NMNIR D I Cat O U VID MID GA MINDICO1SIM MP ILIE D P O W D I ME E T MDwi FOR WORM 000RRI1OR COMM MD OMERMAXED 11EEC DICRIDY-Itlai 0404110. 10111004104aallaart MD 2114+ =mamas Mal%SlikitE-G

Marna Cal4.1000411+11

6!-

at rasa Srduci" raarani ^1K1suss Stalbss

dada

MATERIALS RECOVERY FACILITY

11

111111 111V3A D M I N IS T R A T I O N B U I L D IN G

SHOBUI

1401.41174 1 1 .0. 00419041 0 1 .

lowkaMai


21/26


Agenda Report

Date: June 13, 2013

Item No: 7.

06/12


SUBJECT: Receive Report and Provide Guidance Regarding Reproduction of Water ArticleAnd Other Outreach Opportunities

RECCOMENDATION:

As an initial effort to expedite public outreach the Executive Director contacted The MontereyCounty Herald to obtain permission to publish and reprint the article The Path to Your Taporiginally published on June 2, 2013. The publisher has provided permission and a copy is

included in the agenda packet. Staff if requesting guidance concerning printing and distributingthis file for public use.

Staff will return at a later meeting with more details for the proposed public outreach efforts forthe Fiscal year of 2013-14.

ATTACHMENTS:

Water Article Produced by the Monterey Herald and published on June 2, 2013.


22/26

SERVING THE MONTEREY PENINSULA AND SALINAS VALLEY $1.50SUNDAY

Sunday, June 2, 2013

www.montereyherald.com

SPANISH ROOTSFormer mayor featured in documentary

Story on page B1

TWIN BLOWOUTSGiants aces roughed up in St. Louis

Story on page C1

By SEAN MURPHYAssociated Press

OKLAHOMA CITY Its a warfamiliar as a daily prayer for Tornadresidents: When a twister approacheshelter in a basement or low-level

room or closet, away from windows anrior walls.

But with the powerful devastation fMay 20 twister that killed 24 and puthe Oklahoma City suburb of Moetched in their minds, many Oklainstead opted to flee Friday night whelent tornado developed and headed towstates capital city.

It was a dangerous decision to makeInterstates and roadways already

with rush-hour traffic quickly became lots as people tried to escape the onstorm. Motorists were trapped in thecles a place emergency officials sayof the worst to be in a tornado.

It was chaos. People were goingbound in the northbound lanes. Eve

was running for their lives, said Terr51, a teachers assistant in Moore.

Outrunnintornado

bad movfor many

OKLAHOMA STORMS

Jammed roadwaytrapped motorist

twister bore dow

Please see Tornadoes page A9

By PAUL ELIASAssociated Press

SAN FRANCISCO At the heigh

Foreclosurscams undefire from fe

Bid-rigging heavin California

The pathto your

tapWhat you need to know

about the water supply project

By JIM JOHNSONHerald Staff Writer

After nearly two decades ofliving under the threat of losing

a major portion of their watersupply, and after watching aseries of possible solutions fail,many Monterey Peninsula resi-

expected to accomplish. Wealso examine other key ques-tions such as how much it isexpected to cost and who will

pay for it.While new developments willoccur regularly as the project

works its way through the regu-latory process including the

Editors note: Our watersupply is a critical issue, soits critical we understandwhats being done tosecure it. As the MontereyPeninsula Water SupplyProject enters an importantphase in the review

Seemontereyherald.com/desal for related stories,videos and resources on

the Monterey Peninsulasquest for a viable watersource.

MONTEREY PENINSULA A QUEST FOR WATER


23/26


24/26

TimelineKey dates in the past

and future:

1995: State water board isorder requiring CalifornAmerican Water to cutfrom the Carmel River.

2003: Adjudication of the Sbasin reduces availablefrom that source.

2004: Cal Am submits app

for the Coastal Water Pwhich results in the regdesalination project.

2009: State water board isorder requiring Cal Am

VERN FISHER

WW.MONTEREYHERALD.COM THE MONTEREY COUNTY HERALD, SUNDAY, JUNE 2, 201

Key playersThe organizations at the

of the Monterey PeninWater Supply Project:

California American Waterwater utility that servesthe Peninsula. This projcompanys proposal.

Monterey Peninsula WaterManagement District: P

water agency working ipartnership with Cal Amaquifer storage and recelement.

Monterey Regional Water PControl Agency: Public athat treats wastewaterregion. It is workingindependently on thegroundwater replenishmcomponent in collaborathe water management

Monterey Peninsula RegionAuthority: Often referrthe mayors water authoa power-sharing agencPeninsula cities, represtheir mayors CarmeOaks, Monterey, PacificSand City and Seaside.Mayor Jason Burnett, tauthoritys vice presidebecome its spokesmanformed to offer publicrepresentation during phearings.

California Public UtilitiesCommission: State agenconsidering Cal Ams ppermit. The PUC ultimadecide the rate structuAm customers. Hearingproject are being oversAdministrative Law JudWeatherford.

Division of Ratepayer AdvoPart of the PUC, it acts voice for Cal Am custom

Salinas Valley Water Coalitgroup of agricultural intconcerned about the imthe project on efforts toseawater intrusion in th

Valley groundwater basState Water Resources Co

Board: Often referred tstate water board. Its ocut back on pumping frCarmel River led to thea new water supply.

Other players: Planning anConservation League, PTrust Alliance, Citizens Water, Surfrider FoundWaterPlus, Marina CoaDistrict, Coalition of PenBusinesses, LandWatchMonterey County, Ag LaTrust.

lf of that would go to paythe actual desal plant.

Ratepayer advocatesrking for the state Publiclities Commission (PUC)ve argued that Cal Ams

st estimates are inflated.ey have called for cost

ps, but company officialsggest that could result ingher costs.Cal Am says it would keepstomers costs downmewhat by placing a sur-arge on their bills beforee project is built. Thateans the company couldt collect its normal profitargin on about00million of the projectsts. The company will alsoek a low-interest staten.A group made up of theninsulas mayors is pro-sing a public contributionup to $100 million more,ich they say could save

stomers an estimated24 million over the life ofe loan.

When will my water billrease? By how much?According to Cal Amsojections, customerster bills are expected touble and could nearlyple by 2017 from a 2012seline, though less thanlf of that increase will beectly attributable to the

oject.Bills could begin torease as soon as next

mmer if Cal Ams requesta surcharge is granted bye PUC.According to the compa-s projections as recentlylast year, residential cus-

mers who use relatively lit-water could see their

onthly bills increase fromout $21 now to between0 and $56 by 2017, without $17 to $24 of therease due to the project.

Higher-use customersuld see a monthlyrease from about $146 totween $308 and $496. Ofat increase, about $119 to98 would be a result of theter project.

An average commercialstomer could see anrease from about $350r month to between $709d $752, with about $298 to17 attributable to theoject.Also causing bills to go upe the San Clemente Dammoval and general ratereases, among otherngs, including costsated to the failed desaloject.Cal Ams projections arebject to fluctuation result-g from other surchargesat could come off waters in the next several

ars. Actual rates will be setthe PUC.

f there is no project, whatl the economic impact be?

$261 million per year in lostindustrial production, suchas food production; and theloss of 6,000 jobs.

What is the general natureof opposition to the project?

Some believe the pro-posed project is too expen-sive and a privately owneddesal plant will unfairly bene-fit Cal Am at the expense of

groundwater basin becauseit could exacerbate seawaterintrusion.

What are the potentialenvironmental impacts?

Those are being studiedin the projects environmen-tal impact report, which isbeing conducted by SanFrancisco-based Environ-mental Science Associates

What happens if the projectis delayed? Will there be waterrationing or penalties?

Cal Am has alreadyacknowledged the project

wont be finished by the endof 2016, the deadline to meetthe state water boards ceaseand desist order, and isntexpecting the desal plant tobe online until the end of the

following year.Company officials saythey plan to argue for arelaxation of the deadline byshowing the state waterboard that significantprogress has been made onthe project and that a new

water supply is imminent.If the board decides to

uphold the deadline, it couldresult in mandatory ration-ing or a legal injunction toprevent Cal Am from pump-ing over the limit from theriver. In addition, daily pen-alties of up to $500 for tres-passing and $1,000 for violat-ing the order have beendiscussed.

What is the projectscurrent status andwhat comes next?

The project is in the mid-

Waterompage A6

M O N T E R E YB AY

P A C I F I CO C E A N

CarmelRiver

Salin

asR

iver

CarmelRiver

Salin

asR

iver

218

1

1

68

101

G20

156

183

MossLanding

California American Water service area

Salinas

Chualar

Marina

Seaside

Del ReyOaks

Ryan Ranch

Bishop

Toro

Ambler

RalphLane

Monterey

Presidio ofMonterey

PacificGrove

Pebble

Beach

Carmel

CarmelValley

HiddenHills

CarmelHighlands

Castroville

MossLanding

Salinas

Marina

Castroville

Sand City

Chualar

Seaside

Del ReyOaks

Ryan Ranch

Bishop

Toro

Ambler

RalphLane

Monterey

Presidio ofMonterey

PacificGrove

Pebble

Beach

Carmel

CarmelValley

HiddenHills

CarmelHighlands

Sand City

Source: California American WaterSource: California American Water JAMES HERRERA/The Herald

G16

G17

68

MONTEREY PENINSULA A QUEST FOR WATER

How much isan acre-foot?

The desalination plantwill deliver between 6,252and 9,752 acre-feet ofwater per year, depending

on its size. Sowhat is anacre-foot?1 acre-foot of

Most customers in this area will see their bills about double to help pay for the project.Cal Am serves about 100,000 customers.

Fresh water movement

Clay

Water-bearing gravels

Seawater

Seawater intrusion

M O N T E R E Y

B AY

Castroville

SalinasChualar

End ofpercolation

area

180-foot aquifer

Dunes sand aquifer

400-foot aquifer

Deep aquifer

Gonzales

Aquifer cross-section

Source: Monterey County Water Resources Agency JAMES HERRERA/The Herald

An underground view of the northwestern end of the Salinas Valley groundwater basinwhere Cal Am is planning to draw feeder water for its proposed desalination plant.

DesalneighborScan this codefor a videofrom theSand Citydesalination plant, or seehttp://bit.ly/SCdesal


25/26


Agenda Report

Date: June 13, 2013

Item No: 8.

06/12

FROM: Authority Clerk

SUBJECT: Receive, Update, and Discuss MPRWAs Position on Issues for MPRWAsParticipation and Decision-Making with Respect to California Public UtilitiesCommission Settlement Proceedings in A.12.04.019

RECCOMENDATION:

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


26/26

mprwa updated regular meeting agenda packet 06-11-13

Documents