tac mprwa minutes 12-03-12

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

TECHNICAL ADVISORY COMMITTEE (TAC)Regular Meeting

2:00 PM, Monday, December 3, 2012FEW MEMORIAL HALL OF RECORDS

CITY COUNCIL CHAMBERSMONTEREY, CALIFORNIA

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

Members Absent: None

Staff Present: Legal Counsel, Clerk to the Authority

CALL TO ORDER

TAC Chair Burnett called the meeting to order at 2:15 p.m.

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM TAC MEMBERS

Member Riley reported about a presentation he made at the Authority Directors meeting onNovember 13, 2012 and acknowledged that as a member of the TAC he is responsible to beopen minded and address each decision independently.

Member Israel indicated that The Pacific Institute released a report on the costs of desalinationwhich he encouraged the MPRWA to review. He also reported that the Santa Clara CountyWater District is building a groundwater replenishment unit which will be on line next year.

Chair Burnett reported of efforts to schedule a representative from the Coastal Commission tospeak to the Authority about process and permitting requirements. Also, he indicated the TACwill be presenting recommendations to the Authority Directors for appointment of additionalTAC Members at the next meeting.

PUBLIC COMMENTS

Chair Burnett opened public comments for items not on the agenda. Interim Executive Director

Meurer spoke about the process of publishing the Authority meeting agendas and materials. Herequested feedback from the members about suggestions for increasing the efficiency ofinformation distribution to ensure that materials are released with enough time to review prior tomeetings. He also commented on efforts to televise specific Authority meetings.

Doug Wilhelm spoke about the San Diego Water Authority Board agreement with Poseidon fora 50,000 acre per year plant which will be online in 2016 and questioned why their statistics aremuch different than our local proposals. He emphasized two points that he encouraged the


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MPRWA TAC Minutes Monday, December 3, 2012

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TAC to consider. First, the risks are in the hands of the private company and second, he theSan Diego Water Authority had the option to buy the facility after a number of years on aformula basis. With no further requests to speak, Chair Burnett closed public comment.

APPROVAL OF MINUTES

1. November 13, 2012Action item: Approved

On a motion by Member Narigi and seconded by Member Stoldt and passed by the followingvote, the MPRWA voted to approve the minutes of November 13, 2012.

AYES: 6 DIRECTORS: Israel, Narigi, Riedl, Riley, Stoldt, BurnettNOES: 0 DIRECTORS: None

ABSENT: 0 DIRECTORS: NoneABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

2. November 19, 2012Action item: Continued

On a motion by Member Stoldt and seconded by Member Narigi and passed by the followingvote, the MPRWA voted to continue the minutes of November 19, 2012 for clarification on itemnumber 3.

AYES: 6 DIRECTORS: Israel, Narigi, Riedl, Riley, Stoldt, Burnett,NOES: 0 DIRECTORS: None

ABSENT: 0 DIRECTORS: None

ABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

AGENDA ITEMS

3. Review of Recommendations to Authority Board on CPUC Cost Model and Action AsWarranted

Member Stoldt introduced the item requesting review of the draft worksheet and memorandumincluded in the packet for completeness and answered questions from the TAC.

Chair Burnett requested comments from the public having no requests to speak, closed public

comment and returned the discussion to the TAC.

Member Stoldt then described the CPUC cost workshop agenda and discussion facilitation.Chair Burnett requested that of the 13 items listed, the TAC identify the most critical items thatshould be recommended to the Authority representative to address at the Cost Workshop.

TAC members recommended items 7, 8, 9, & 10 as priorities and that item number 6 regardingenergy costs should also be solidified.


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TAC Members also discussed the issues associated with the pending Cal Am surcharge andindicated that is a large enough dollar amount and impact to the rate payers to warrant a fulldiscussion at a future meeting.

Director Burnett thanked Member Stoldt for his efforts producing the recommendations and

recapped the discussion and recommendation to reorder the categories, with a top tier section.He indicated the Authority would take up the issue at the next meeting and designate arepresentative from the Authority to attend the Public Utilities Commission workshop. With nofurther discussion Chair Burnett closed the item.

4. Discussion of Seaside Groundwater Basin Watermaster Study of Replenishment

Member Stoldt introduced the item discussing the Seaside Groundwater Basin WatermasterStudy of Replenishment. There was a verbal discussion about what was presented at theWatermaster meeting as well as potential scenarios for replenishments rates. The discussionconcluded with a vote of 6 to 2 to hire a consultant to do a 25 year replenishment model.Member Stoldt then answered questions of the TAC.

Member Riley commented on his attendance at the meeting and if the proposal was a straightline replenishment of 50 or 25 years. Member Riedl responded clarifying that two differentagenda items were discussed at the Watermaster meeting. The first considered was the 25year straight line replacement and the second was stabilization of the replenishment rate.

Member Israel reported that he is still talking with the growing community about the need andavailability of water as well as how often the facility should run. He indicated that depending onthe capacity, they might be able to assist with the recharge.

Chair Burnett opened the item for public comment, having no requests to speak, closed publiccomment and returned the discussion to the TAC.

Chair Burnett then asked if this modeling allows for banking or flexibility given other parts areweather dependent. Member Stoldt responded that Cal Am has indicated that the 350 acrefoot/year does not include an additional capital expense, but that the proposed 700 acrefoot/year likely will. The amount of water available to the Peninsula needs to be factored intothe 25 year plan before it is finished. If the JPA wants to take a policy issue on replacement andreplenishment it will have a cost implication related to other projects.

Chair Burnett recapped that the TAC is willing to make a recommendation that the AuthorityBoard suggest a higher rate of replenishment however he indicated it would be premature atthis time because the study has not been completed. However, a discussion at the Directorlevel is appropriate as three of the Directors were present at the Watermaster meeting. With no

further discussion, Chair Burnett closed discussion on this item.

5. Consider and Recommend Options for Updates to the Report from Separation Processes Inc.:Evaluation of Seawater Desalination Projects


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Chair Burnett reported that the draft SPI report was prepared as a snapshot in time and thatsome projects have materially and/or significantly changed since the first round of informationand questioned if this is an opportunity to determine if there is a need to revise the scope of the

report. Director Burnett opened the item for discussion for the TAC and questioned if the TACwould recommend authorization for additional funding for incorporation of new information andadditional work.

Member Riley and Member Narigi both responded about how long the door should be left opento new information, as it is and will continue to be constantly changing and suggested a 3month update of only critical information.

Member Riedl questioned if SPI would be responding to comments presented. Chair Burnettresponded that they would respond to all comments compiled and submitted to them.

Chair Burnett opened the item for comments from the public.

Doug Wilhelm commended the work of the consultants with regard to cost, but the outstandingquestions was looking at similar interest rates across the three proposals as well as risk factorswhich could easily delay any project. With no further requests to speak, Chair Burnett broughtthe discussion back to the TAC.

The TAC discussed the possible levels of additional funding related to a revised scope of work.

Member Riley questioned what SPI could do to clarify cost priorities.

On a motion by Chair Burnet and seconded by Member Narigi and carried by the following vote,the MPRWA TAC moved to request SPI to identify additional critical information that would

affect the project to a significant degree, be prepared to provide a memo back to the communityby Jan 15, 2013 to include reasonable cut off and budget and request Member Stoldt tocommunicate with SPI and bring information back to Water Authority at the next scheduledmeeting.

AYES: 6 DIRECTORS: Israel, Narigi, Riedl, Riley, Stoldt, BurnettNOES: 0 DIRECTORS: None

ABSENT: 0 DIRECTORS: NoneABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

Member Stoldt left the meeting at 3:23 p.m.

6. Propose a Roadmap for Decisions, Recommendations and Direction for Public UtilitiesCommission Testimony

Chair Burnett introduced the item and indicated that testimony for the CPUC proceedings aredue in February and the Authority needs to provide direction to outside Legal Counsel in orderto prepare. He posed the question of how can the TAC help the Authority in sequencing the


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decisions so that they can make the best decisions possible for the community. Chair Burnettthen opened the item for questions and discussion from the TAC.

Member Narigi commented about the process the TAC and Authority went through to hire theSPI consultants and suggested that in order to make a more informed recommendation, it isnecessary to wait until the Final Report is finished, make decision as a TAC with the information

available, then pass on to the Authority Board.

Member Riedl acknowledged that the SPI report is only a part of the puzzle as it does not touchon financing the project or potential legal rights and he recommends generating a detailedproject schedule to develop including milestones and financial performance goals. Ifperformance goals are not reached then it will be understood that a project cannot be reached.

Acknowledging that performance goal would be time consuming, he suggested the option tohire a project manager. Member Riedl also suggested looking into the issue of water rights aswell as potentially developing a budget and finance committee.

Member Israel suggested that this could be included in SPI's revised scope of work, to develop

recommendations and a series of alternatives to be included at the end of the report. ChairBurnett responded that the consultant are not intending to make recommendations of oneproject over another, but could make recommendations on specific project aspects.

Chair Burnett requested the TAC identify the key seven points from what they studied that theycan make recommendations from.

Chair Burnett opened the item to the public. Salfwat Malek questioned if SPI has fulfilled theobligations in their contract and spoke about concerns about theAuthoritys ability to meet thetimeline for the CPUC deadlines. Having no further requests to speak, Chair Burnett closed

public comment and responded to Mr. Malek's comments. He agreed the timeline presentedlooks challenging and indicated that some of the recommendations were policy questions andsome were TAC recommendations and that the Authority will do their best to achieve alldeadlines while being responsive to the public interest.

Member Israel stated that intervener testimony for the CPUC is scheduled for January 22, 2013and the Authority needs to make sure we provide the best possible information. He questionedwhat is a reasonable period of time to request the final report be completed by the consultants.

Chair Burnett summarized the discussion and indicated that further future discussion will behelpful. He noted that the SPI report as updated, would include financial and legal projections,organized into a matrix (6 key issues) and the possibility of a detailed project schedule with

timeline for resolving key issues. Still to be resolved is the key question of contingency plans.With no further discussion on this item, Chair Burnett moved to the next agenda item.

7. Approve Future Meeting Dates for Technical Advisory Committee in 2013Action item: Approved as Presented

On a motion by Member Narigi and seconded by Member Riley and passed by the followingvote, the MPRWA voted to approve the presented meeting dates for the Technical Advisory


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Committee through March 30, 2013.

AYES: 5 DIRECTORS: Israel, Narigi, Riedl, Riley, BurnettNOES: 0 DIRECTORS: None

ABSENT: 1 DIRECTORS: Stoldt

ABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

ADJOURNMENT

Director Burnet adjourned the meeting at 4:11 p.m.

Respectfully Submitted, Approved,

Lesley Milton, Clerk to the Authority President MPRWA

tac mprwa minutes 12-03-12

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