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M I N U T E SMONTEREY PENINSULA WATER AUTHORITY (MPRWA)

TECHNICAL ADVISORY COMMITTEE (TAC)Special Meeting

3:00 PM, Thursday, May 23, 2013MONTEREY PENINSULA WATER MANAGEMENT DISTRICT

5 HARRIS COURTMONTEREY, CALIFORNIA

Members Present: Israel, Riley, Riedl, Burnett

Members Absent: Huss, Narigi, Stoldt,

Staff Present: Clerk, Executive Director, Legal Counsel

CALL TO ORDER

Chair Burnett called the meeting to order at 3:10 p.m.

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM TAC MEMBERS

Chair Burnett requested switching the order of the agenda items for those that were at theGovernance Committee meeting preceding this meeting which discussed this item. TACmembers agreed.

Chair Burnett invited reports from TAC members and had no requests to speak. He thenreported that Cal Am is continuing to look at a revised location for the test wells to reduce theconcern over the snowy plover habitat and avoid conflict with the US Fish and Wildlife service.Congressman Sam Far, on behalf of the MPRWA, submitted a letter seeking guidance onfinding a less controversial location.

PUBLIC COMMENTS

Chair Burnett invited public comments for items not on the agenda and had no requests tospeak.

AGENDA ITEMS

1. Review and Provide Direction Regarding Term Sheet for Power Sales Agreement from theMonterey Regional Waste Management District to Cal Am for Powering Desalination Facilities(Reichmuth)Action: Continued

2. Review and Provide Recommendations Regarding Draft Request for Proposal for Design-BuildServices for the Monterey Peninsula Water Supply Project (Cal Am Representative)Action: Discussed and Provided Recommendations

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Chair Burnett reported on the Governance Committee meeting which took up this item andindicated that this meeting was an opportunity for the TAC to provide comments to the Authorityon the draft request for proposal, and if agreed, return to the Governance Committee to provideto Cal Am. He reported that his meeting was off schedule because of the tight turnaround timestipulated in the Governance Committee agreement. The final recommendations will be due on

Tuesday, May 28, 2013 at 2:00 to the Governance Committee. The final RFP will be releasedto the public on June 17, 2013.

Chari Burnett spoke to the analysis of the draft RFP conducted by SPI Consultants, at theAuthoritys request. Copies were provided to the TAC and the public. He then reported onconcerns that were raised during the Governance Committee meeting to request the TAC toweigh in on. Concerns were as follows:

Concern that the document has been made to be too prescriptive and does not allowroom for design modifications for a design build RFP.

Questioned if it is appropriate to equally weight the scores on the different size plants

Should the facility be evaluated at a 20 or a 30 year NPV valuation Is evaluation criteria of 40% on technical merits and 60% on cost appropriate

Discussion of the penalty for late delivery and inclusion of a bonus for early delivery

Eric Sabolsice spoke representing Cal Am and described how the RFP was developed; theexpertise utilized to develop, and discussed the level of prescription to be able to do a validcomparison of the submissions. He then spoke to concerns expressed about being tooprescriptive. The goal was to be able to compare the proposals but leave enough flexibility touse their experience and knowledge they have developed, and include cost savings. This willalso be to enable a baseline comparison. He then answered questions from TAC members.

Member Riedl spoke to concerns about limiting the amount of salt in the waste water, and

comments in the document about adding additional chemicals to reduce corrosion thedistribution system. Mr. Sabolsice acknowledged it will be a problem and is willing to entertainsuggestions to balance the non-aggressive water and will share with the technical team. Thewater that will be traveling from the plant to the Seaside Basin will be corrosive. Water leavingthe facility needs to be potable as well as not cause issues from the plant to the distributionsystem.

Member Riley questioned how many firms or teams responded to the Request for Qualificationsand how many will be allowed to submit for the RFP. Mr. Sabolsice responded that nine arebeing considered and expected to respond to RFQ, and staff hope the RFP yields fiveresponses.

Member Riley then questioned what the implications are if the Cease and Desist deadline ismissed and if there is no penalty, there is no need for an incentive bonus. Chair Burnett clarifiedthere is a penalty for delay in the RFP, but no bonus for earlier delivery but is encouraging earlydeliver as a way to petition good faith, and reduce the potential penalties opposed. Mr.Sabolsice responded that the document was written strategically to allow the bidders to presentthe best price and the best schedule, and from there a bonus could be determined. He alsonoted that the contract has provisions for delay not under the contractors control (such aspermitting issues or legal stays) and companies may be compensated.

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Member Israel questioned the process for disposal of water that did not meet specifications. Mr.Sabolsice responded that it would be discharged as waste to the Monterey Regional PollutionControl Agency. Mr. Israel suggested it could be used for agricultural uses. He then spoke tothe significant level of inversion occurring in the proposed location and the fact it is likely higherthan the bidding firms are accustomed to. Because of the unique environment, this should beclarified for warranty provisions and design modifications. Legal Counsel Freeman agreed and

urged Cal Am to include the uniqueness of the atmosphere as it will affect the warranty period.

Dave Stoldt arrived at 4:46 p.m.

Chair Burnett requested the TAC agree upon a list of recommendations to report on to theAuthority directors for their meeting at 7:00 p.m. The TAC agreed to the below list ofrecommendations:

Support advocating for Net Present Value (NPV) valuation be based on 30 years, not 20years.

Recommend the document to be modified to allow more creativity in design and allow

more consideration be given to creativity within the scoring criteria as well.

Rate of corrosion and inversion layer in excess of other marine environments needs tobe factored in

Consideration of an early completion incentive or bonus. Recommendation would basedon the CPUC and the CDO penalties.

Mr. Sabolsice agreed that Cal Am would reconsider and revising the document as a way to notstifle creativity.

Member Riedl spoke again to the issue of salt management and the fact there is a local issuewith too much salt in the waste water. If the Cal am project changed their process it would savea lot of money down stream in salt mitigation.

ADJOURNMENTExecutive Director Reichmuth requested that Item 1 that was moved to the last agenda item, betabled until a future meeting and the TAC agreed. With no further business to come before theTAC, Chair Burnett adjourned the meeting at 5:23 p.m.

Respectfully Submitted, Approved,

Lesley Milton, Committee Clerk President MPRWA