tac mprwa minutes 11-19-12

7/30/2019 Tac Mprwa Minutes 11-19-12

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

TECHNICAL ADVISORY COMMITTEE (TAC)TAC Regular Meeting

2:00 PM, Monday, November 19, 2012CITY COUNCIL CHAMBER

FEW MEMORIAL HALL OF RECORDSMONTEREY, CALIFORNIA

Members Present: Israel, Narigi, Riedl, Riley, Stoldt

Members Absent: Chair Burnett

Staff Present: Clerk of the Committee, Legal Counsel

CALL TO ORDER

ROLL CALL

Member Stoldt called the meeting to order at 2:04 p.m.

PLEDGE OF ALLEGIANCE

REPORTS FROM TAC MEMBERS

There were no reports from TAC members.

PUBLIC COMMENTS

Member Stoldt invited public comments for items that were not on the agenda. Donald Murphyresponded to George Rileys presentation during the Authority meeting on November 8, 2012and expressed concern that Mr. Rileys affiliations may present a conflict with his ability toparticipate impartially as a TAC Member. He expressed the position that the TAC should be aan unbiased and non political group. With no further requests to speak, Mr. Stoldt closed publiccomment.

APPROVAL OF MINUTES

1. September 17, 2012

On a motion by Member Israel, seconded by Member Riedl and carried by the following vote,the MPRWA Technical Advisory Committee approved the September 17, 2012 minutes asamended:

AYES: 4 MEMBERS: Stoldt, Riedl, Israel, Riley


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NOES: 0 MEMBERS: NoneABSENT: 1 MEMBERS: BurnettABSTAIN: 1 MEMBERS: NarigiRECUSED: 0 MEMBERS: None

2. October 15, 2012

On a motion by Member Riedl, seconded by Member Israel and carried by the following vote,the MPRWA Technical Advisory Committee approved the October 15, 2012 minutes asamended:

AYES: 4 MEMBERS: Stoldt, Riedl, Israel, RileyNOES: 0 MEMBERS: None

ABSENT: 1 MEMBERS: BurnettABSTAIN: 1 MEMBERS: NarigiRECUSED: 0 MEMBERS: None

AGENDA ITEMS

3. Discuss MPWMD Financial Analysis of SPI Cost Comparisons Report

Member Stoldt introduced the item and made a presentation about the principals andcalculations for public financing and explained the economic analysis performed for recovery ofcapital is very much like how public financing is done. He also explained how a capital recoveryfactor is used to convert a single up front capital cost into an annual amount to be recovered asif the money was to be repaid as a loan, based on an interest rate and time period.

Member Stoldt then discussed how public debts must include borrowed interest and during

construction, issuance costs and a reserve fund. How and when interest is calculated andaccrued and the benefits and draw backs to public funding. There was discussion from the TACover borrowing funding all at one time versus incrementally over the life of the project

Member Stoldt opened the item for comments or questions from the public. Having no requeststo speak, Member Stoldt closed public comment on this item and moved on to the next agendaitem.

4. Discuss Cal Am Requested Surcharge 2, Impacts to Ratepayers, and Provide Direction to Staff

Member Stoldt introduced the item and distributed a document outlining the scenario that zero'sout the proposed Cal Am surcharge 2, instead of including the surcharge of the proposed $99

million. Member Stoldt explained the surcharge and the effects of changes in differentscenarios and how it would impact the rate base. He also expressed that the fundamentalconcern of the ratepayer is the idea that current ratepayers will have an unequal burden withminimal benefits compared to future resident. The Authority Board will address their position onthis item in the near future. Member Stoldt opened the item for comments from the TAC whorequested clarification on specific calculations. Member Stoldt then opened the item forcomments from the public.


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Member Stoldt clarified that the default scenario of 2,500 cost per acre foot and pointed out thatunder the cost of debt, financing area should be looking at authorized cost of debt, corporatedebt, and questioned what if corporate debt was tax exempt without credit support as well asconsider looking at it without backstop. State revolving fund debt should be looked at as a debtand then moving it over as a surcharge.

Member Israel requested reconsideration of the cost of energy and any impacts of usingmethane generated power from the Monterey Regional Waste Management District.

Member Riedl questioned turning off surcharge 2 and state revolving fund as an option, as itwas lumped together in the worksheet, and asked if they be equitable. You could make a publiccontribution at no ownership, but it's a non starter.

The TAC agreed to indicate to the Authority that surcharge 2, although cheaper, has specificissues such as is unequally charged and that ratepayers and businesses may suffer from "rateshock" when implemented. The goal would be to determine how to get the benefits of thesurcharge without affecting the population.

Member Stoldt opened the item for questions from the public. Salfwat Malek questioned anysafeguards the ratepayers have if the project fails. Libby Downey expressed disagreement withLegal Counsel Freeman, and encouraged the TAC to appear as if they are advising and notadvocating. Doug Wilhelm questioned the surcharge and assumptions on the key assumptionspage. Member Stoldt clarified the layout of the table under the Surcharge and Construction

Assumptions section of the Key Assumptions hand out.

The TAC agreed to write a memo about the assumptions and recommendations discussed toprovide for reference and inclusion to the CPUC Cost Workshop and for future discussion forthe Authority Board. Member Stoldt clarified that these are not the consultants numberspresented today, but generated for the cost modeling workshop. With no further discussion or

items to come before the TAC, Member Stoldt adjourned the meeting at 4:13 p.m.

ADJOURNMENT

Respectfully Submitted, Approved,

Lesley Milton, Clerk to the Authority Director Burnett, TAC Chair

tac mprwa minutes 11-19-12

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