MPRWA Agenda Packet 3-10-16

Closed Session Agenda
Monterey Peninsula Regional Water Authority (MPRWA)

7:00 PM, Thursday, March 10, 2016
Council Chambers
580 Pacific St.
Monterey, California
CALL TO ORDER
CLOSED SESSION AGENDA ITEMS
cs1.
Performance Evaluations for Executive Director and Authority Legal Counsel PositionsPursuant to Government Code 54957
ADJOURNMENT
____________________________________________________________________________
The Monterey Peninsula Regional Water Authority is committed to including the disabled in all
of its services, programs and activities. In compliance with the Americans with Disabilities Act,
if you need special assistance to participate in this meeting, please contact the Monterey City
Clerks Office at (831) 646-3935. Notification 30 hours prior to the meeting will enable the City
to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.10235.104 ADA Title II]. Later requests will be accommodated to the extent feasible. For
communication-related assistance, dial 711 to use the California Relay Service (CRS) to speak
to City offices. 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 the Monterey City Clerk's Office at (831) 646-3935 to
coordinate use of a device.
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.
Agenda
Monterey Peninsula Regional Water Authority (MPRWA)
Director's Meeting
7:00 PM, Thursday, March 10, 2016
Council Chambers
580 Pacific Street
Monterey, California
ROLL CALL
PLEDGE OF ALLEGIANCE
REPORTS FROM BOARD DIRECTORS AND STAFF
***Adjourn to Closed Session (See additional agenda)***
Adjourn to Regular Meeting
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.
Approval of Minutes from December 10, 2015 - Romero

CONSENT ITEMS
CONSENT AGENDA consists of those items which are routine and for which a staff
recommendation has been prepared. A member of the public or a Councilmember may request
that an item be placed on the regular agenda for further discussion.
2.
Receive Letter from Sand City in Support of GWR - Cullem
3.
Approve and File Authority Checks Through March 10, 2016, Receive a Mid-year Budget
Report, and Receive an Estimate of Requested FY 2016-2017 Member Contributions Romero/Cullem
4.
Adoption of Resolution 16-01, Approving Donald G. Freeman as Legal Counsel through

June 30, 2017 and Authorizing the Authority President to Execute a contract extension
with Perry Freeman at a Price not-to-exceed $36,000 - Cullem
Thursday, March 10, 2016
5.
Adoption of Resolution 16-02, Approving Brownstein Hyatt Farber Schreck as Special

Legal Counsel through June 30, 2017 and Authorizing the Authority President to Execute a
Contract Extension at a Price not-to-Exceed $100,000 - Cullem
6.
Authorize The Authority President To Extend The Contract With The City Of Monterey For
Executive Director Services for a Price of $5000 for the Period July 1, 2016 to June 30,
2017, and To Request The City Of Monterey To Extend Its Contract With James M. Cullem
For That Position - Cullem
7.
Adoption of Resolution 16-03 Approving an Extension of the Agreement with the City of
Monterey for Clerk of the Board, Clerical, and Financial Support Services, and Authorizing
the Authority President to Execute a Contract with the City of Monterey for at a Price of
$30,000 for the Period July 1, 2016 to June 30, 2017 - Cullem
8.
Authorize the Utilization of $10,000 from Contingency Funds to Pay for Preparation of a
Technical Report as a Part of the Water Authority's Rebuttal Testimony on The Testimony
of Curtis Hopkins, Hydrogeologist for the Marina Coast Water District - Cullem
AGENDA ITEMS
9.
Receive and Discuss Recommendations from the Technical Advisory Committee (TAC)
and from Staff on CPUC Testimony Submitted on January 22, 2016 and Provide Direction
- Cullem
10.
Receive and Discuss Recommendations from the Technical Advisory Committee (TAC) on
the Water Authority Policy Position Statement and Provide Direction - Cullem
11.
Discuss City of Monterey Request to Include a Response to the Cal Am Rate Increase
Proposal into the Mission and Work Plan of the Water Authority and Provide Staff Direction
- Cullem
12.
Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP) and the Status of Test Slant Well Operations - Cullem
ADJOURNMENT
The City of Monterey is committed to including the disabled in all of its services, programs and
activities. In compliance with the Americans with Disabilities Act, if you need special assistance
to participate in this meeting, please contact the City Clerks Office at (831) 646-3935.
Notification 30 hours prior to the meeting will enable the City to make reasonable arrangements
to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II]. Later requests will
be accommodated to the extent feasible. For communication-related assistance, dial 711 to use
the California Relay Service (CRS) to speak to City offices. CRS offers free text-to-speech, speechto-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 the City Clerk's Office at
(831) 646-3935 to coordinate use of a device.
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.
M I N U TE S
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Regular Meeting
7:00 PM, Thursday, December 10, 2015
COUNCIL CHAMBER
MONTEREY, CALIFORNIA
Directors Present:
Directors Absent:
Rubio, Edelen, Pendergrass, Kampe, Burnett, Alternate Director Downey

Roberson
Staff Present:
Executive Director, Legal Counsel, Clerk
ROLL CALL
President Burnett called the meeting to order at 7:01 PM.
Alternate Director Downey was present for Director Roberson.
PLEDGE OF ALLEGIANCE
REPORTS FROM BOARD DIRECTORS AND STAFF

President Burnett invited reports from the Board and Staff.
Executive Director Cullem reported that he attended the workshop on the externalities study at
the Water Management District. He then welcomed Bill Connor, the legal counsel stand-in for
Mr. Freeman, and Nova Swain, the Clerk understudy for Lesley Milton.
President Burnett said that the cease and desist order (CDO) proposal that the board adopted
at the last meeting was submitted to the State, and stated that there is now a prohibition on exparte communications with the Board and its staff.
PUBLIC COMMENTS
President Burnett opened public comments. Receiving no requests to speak he closed the
public comments session.
CONSENT AGENDA
Executive Director Cullem requested that the minutes from November 12th, item #6, be changed
to reflect that the City of Monterey contract be awarded on a fiscal year basis, not a calendar
year basis. Mr. Cullem says this would change the dollar amount to $15,000, and extend
contract to the end of the fiscal year on June 30th 2016.
MPRWA Minutes
Thursday, December 10, 2015
Alternate Director Downey noted that she would be abstaining from items #1 and #2, approval
of minutes, because she was not present for those meetings.
On a motion by Director Pendergrass, seconded by Director Edelen, and carried by the
following vote, except Items 1 & 2 from which Alternate Director Downey abstained, the
Authority Directors approved Consent Agenda, with the correction of the dollar amount in the
November 12th minutes to $15,000 for contract extension through June 30th:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
6
0
0
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
Downey, Edelen, Kampe, Pendergrass, Rubio, Burnett

None
None
None
None
1.
Approve Minutes from August 13, 2015 - Milton

Action: Approved, Downey abstained
2.
Approve Minutes from November 12, 2015

Action: Approved with change, Downey abstained
3.
Approve and File Authority Checks Through December 10, 2015

Action: Approved
4.
Receive Report on the November 17, 2015 Update of the California Public Utilities Commission
(CPUC) Schedule for the Monterey Peninsula Water Supply Project
Action: Approved
5.
Terminate the Contract with the City of Seaside for Clerk of the Board and Financial Support
Services for the Monterey Peninsula Regional Water Authority (MPRWA) as of Dec 31, 2015,
Adopt Resolution 2015-06 Approving an Agreement with the City of Monterey for Those
Services, and Authorize The Authority President to Execute a Contract with the City of
Monterey for at a Price not to Exceed $15,000 for the Period January 1 to June 30, 2016
Action: Approved, adopted Reso 15-06
6.
Approve Extension of the Separation Processes Inc (SPI) Contract Until 30 June 2016 for
Additional Technical Support to the MPRWA and Authorize the Expenditure of Not-to- Exceed
$10,000 from Reserve Funds
Action: Approved
Monterey Peninsula Regional Water Authority

Regular Meeting Minutes - Thursday, December 10, 2015
2
MPRWA Minutes
AGENDA ITEMS
7.
Presentation of Certificate of Appreciation to Lesley Milton

Action: Presented certificate
President Burnett presented an award of appreciation to Lesley Milton who is retiring from
MPRWA Clerk of the Board. Ms. Milton thanked the Board for the opportunity to serve the
community.
8.
Receive Report and Discuss the Status of the Pure Water Monterey (PWM) / Ground Water
Replenishment (GWR) Project.
Action: Received and discussed report
Dave Stoldt, the General Manager of the Monterey Peninsula Water Management District
(MPWMD), reported that Marina Coast Water District approved the pipeline agreement with the
Monterey Regional Water Pollution Control Agency (MRWPCA). He also reported that the
MRWPCA Board is considering a 2.4 million dollar contract to award bid packets for various
design components for the project to be ready to go in July. He also said that the externalities
study that Director Cullem attended made progress by pulling out the financial analysis and
focusing solely on the non-project economics such as social or sustainable return on
investment.
Mr. Stoldt reported that most of the 9 criteria related to groundwater replenishment with Pure
Water Monterey (PWM) have been met but that cost comparison remains the largest hurdle. He
said the cost of PWM is $1,800-2,100 per acre foot and desal water is $3,000 per acre foot, and
there isnt enough recycled water to do everything so a desal plant with associated cost is
required. He added that on December 15th there will be a filing for updated cost estimates. Mr.
Stoldt invited questions from the Board. Alternate Director Downey asked about the status of the
water purchase agreement with California American Water (CalAm). Mr. Stoldt responded that
the work with CalAm has been cooperative and well attended although there is a slow response
with CalAm. He also said that one issue is that CalAm is requesting a joint and severable
liability between PCA and MPRWA, but neither partys legal counsel will agree to that due to the
operational and financial differences between the two agencies. Mr. Stoldt continued to say that
the MPRWA doesnt want to subordinate the agreement already in place with the growers by
allowing CalAm to tap into the drought reserve. He added that overall most of the agreements
have been executed and there is a draft agreement which might be done by December 31st.
Alternate Director Downey questioned if another agency is added to the agreement later they
will want some control. Mr. Stoldt replied that adding another agency will decrease the buffer of
allocated water. He added that there may be additional water sources or annexations and preexisting water rights that need to be factored in to the agreement. Alternate Director Downey
asked President Burnett if the time in between meetings with CalAm could be reduced to
encourage CalAm to be more efficient. President Burnett said the MPRWA is not centrally
involved in those negotiations but that there are other agencies involved.

3
MPRWA Minutes
Dave Stoldt answered financial questions of the board.

Dave Stoldt gave a report that MPRWA is in the application pool for a state loan, and is
applying for storm water grants to reduce the overall cost.
9.
Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP), including Award of Production Well and Conveyance System
Contracts and Status of Test Slant Well Operations and Results.
Action: Received and discussed report
Catherine Stedman from CalAm Public Relations gave a report that the current schedule
remains on track for project completion in 2019. She said the conveyance facility contract
selections will be publicly available on December 11.
President Burnett stated that the governance committee recommended a contract for source
water slant wells close to the budgeted amount. Ms. Stedman replied that the contract is with
the lowest bidder.
10.
Receive Report, Discuss, and Revise the Mission, Purpose, and Sunset of the Monterey
Peninsula Regional Water Authority
Action: Adopted the position to sunset at the first production of water from the full
portfolio of the MPWSP, and the lifting of the cease and desist order
Executive Director Cullem reviewed the Monterey Peninsula Water Authority (MPRWA)
mission, work plan, and duration of the Authority. He said there was a previous revision to the
mission statement i.e., replace "Cities' water users" with "water users within the incorporated
cities and unincorporated portions of the County". Mr. Cullem asked for the board to give
feedback on the mission statement and work plan.
President Burnett said the County had questions about the sunset date of the Authority.
Director Rubio wondered what was meant by the County concern about "mission creep", and
was unaware of the Authority adding projects or doing anything outside of the scope. President
Burnett responded that the County did not have any specific examples of mission creeping from
the Authority when they were asked.
President Burnett opened public comments.
Jody Hansen from the Monterey Peninsula Chamber of Commerce, read from a letter in
support of MPRWA from the Coalition of Peninsula Businesses. The letter supported the
MPRWA not sun setting until the mission is accomplished

4
MPRWA Minutes
President Burnett responded to public comments, and asked for comments from the board.
Director Edelen spoke in support of the Authority continuing until water is flowing. He
suggested that working through the Local Agency Formation Commission of Monterey County
(LAFCO) to form a Joint Powers Authority (JPA) between the affected agencies to replace the
Water Management District could hold water officials accountable and ensure that taxpayer
money is used to secure adequate water sources.
Director Pendergrass agreed that the Authority was formed to accomplish a mission and should
remain to collaborate with all the agencies and support each other.
President Burnett said he suggests the option where the Authority sunsets at first production of
water from the full portfolio of Monterey Peninsula Water Supply Project (MPWSP), GWR,
enhanced ASR, and lifting of the CDO.
Director Kampe suggested adding some milestones to reach by 2017 to ensure that the
mission is on track. He also said the Authority should be alert once the water is flowing that its
usage and allocation is appropriate and the community should have a voice through the
Authority or the aforementioned JPA in the policy.
President Burnett said that an Environmental Impact Report (EIR) will be necessary to govern
how the water is allocated, and that process should begin sooner rather than later.
Alternate Director Downey said the Authority needs to be careful how money is spent. She said
that she supported the idea of looking into what LAFCO could do with regard to forming a JPA
between the various agencies and MPWMD. She stated that Supervisor Potter said that the
County was reluctant to join the Authority because it is spending too much money. She said
that the Authority needs to be very careful when looking at the budget as to how the money is
spent, and this should be a consideration when determining a sunset date.
Director Rubio said LAFCO may not be the appropriate agency to collaborate with due to the
Joint Powers Authority (JPA) special legislation. Alternate Directory Downey agreed that
LAFCO may not be the correct agency to work with, but she would like to keep the idea of
creating a JPA with the Water District on the horizon.
President Burnett suggested that the Agency not take a position regarding the JPA issue at this
time, and Director Rubio agreed, saying that some more milestones should be reached before
addressing that matter.
Alternate Director Downey said that augmenting the efforts of MPWMD through the formation of
a JPA might be something to consider.
Director Kampe said he sees the MPRWA working as collaborators with the MPWMD on how
water is allocated and conserved. He would like to see the Authority assist businesses use
water resources more efficiently.

5
MPRWA Minutes
Director Pendergrass opined he would like to have less frequent meetings and less repetition.
Director Rubio made a motion for the Authority to adopt the position to sunset at the first
production of water from the full portfolio of the MPWSP, and the lifting of the cease and desist
order, this was seconded by Director Kampe.
Alternate Director Downey asked to clarify if voting for the Authority to sunset at the first
production of water from the full portfolio of water would be a concrete decision. Bill Connor
stated that this would not be set in stone if the Authority decided in the future to vote again on a
new sunset date. Alternate Director Downey said she could support the motion if it meant that it
was not set in stone.
The motion made by Director Rubio, seconded by Director Kampe for the Authority to adopt the
position to sunset at the first production of water from the full portfolio of the MPWSP, and the
lifting of the cease and desist order, passed unanimously.
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
6
0
0
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
Downey, Edelen, Kampe, Pendergrass, Rubio, Burnett

None
None
None
None
The Board of Directors discussed whether to take action regarding the future formation of a
Joint Powers Authority or merging with the Water Management District in some form. No action
was taken with regard to that matter.
ADJOURNMENT
The meeting adjourned at 8:35PM.
ATTEST:
Nova Swain, Clerk of the Authority
MPRWA President

6

Agenda Report
FROM:
Date: March 10, 2016

Item No: 2.
Executive Director Cullem
SUBJECT: Receive Letter from Sand City in Support of GWR

RECOMMENDATION:
It is recommended that the Authority formally receive the Sand City letter received by
the Water Authority on January 8, 2016 requesting the Water Authority submit CPUC
testimony in support of Ground Water Replenishment (GWR).
DISCUSSION:
At the January 14, 2016 Water Authority meeting, the Executive Director noted receipt
of the Sand City letter which was not included into the meeting minutes. The letter is at
attachment A for the record.
ATTACHMENTS:
A - Sand City letter dated January 8, 2016
06/12
anuary 8, 2016
Attn: President Jason Burnett
735 Pacific Street
Monterey, CA 93940
Dear President Burnett,
California American Water (Cal-Am) has been involved in producing a Water
Purchase Agreement (WPA) with the following agencies: Monterey Regional
Water Pollution Control Agency (MRWPCA) and the Monterey Peninsula
Water Management District (MPWMD) for the 'Pure Water Monterey' project
as part of the settlement agreement. The water purchase agreement is an
item that needs to be completed prior to the testimony phase of the CPUC
hearings. The three way agreement accounts for the reclamation water that
is purified, conveyed, and injected into the Seaside Groundwater Basin by
MRWPCA and to be purchased by Cal-Am.
City Hall
1 Sylvan Park,
Sand City, CA
93955
Administration
(831) 394-3054
Planning
(831) 394-6700
FAX
(831) 394-2472
Police
(831) 394-1451
FAX
(831) 394-1038
Incorporated
May 31, 1960
The parties have been working on draft versions of the agreement during the
past 6 months and is currently in an apparent impasse. The document is very
critical to justifying the Pure Water Monterey project as a very important
sustainable component of the Cal-Am three part Monterey Peninsula Water
Supply Project that would supply water to the Peninsula.
The City of Sand City requests that MPRWA initiate communications with
Cal-Am officials to bring a quick resolution of the differences concerning the
WPA and finalize this agreement prior to the CPUC testimony hearings.
Sin
David K. Pendergras
Mayor
City of Sand City

Agenda Report
FROM:
Date: <MEETING DATE>

Item No: 3.
Executive Director Cullem / Authority Clerk Romero
SUBJECT: Approve and File Authority Checks Through March 10, 2016, Receive a
Mid-year Budget Report, and Receive an Estimate of Requested FY 20162017 Member Contributions.
RECOMMENDATION:
It is recommended that the Authority approve and file the accounts payable payments
made during the period January 11 through March 10, 2016 with total payments for the
above referenced period of $43,657.45 from the general fund account and authorize the
Directors to sign for such checks. It is also recommended that the Board receive the
budget update and estimated FY 16-17 membership contributions.
DISCUSSION:
At its meeting on September 12, 2013, the Authority Board approved a staff
recommendation to provide the Directors a listing of financial obligations since the last
report for inspection and confirmation. Each invoiced expense has been reviewed and
approved by the Executive Director and Finance personnel prior to payment to insure that
it conforms to the approved budget.
The following checks are hereby submitted to the Authority for inspection and
confirmation:
$16,840.70 City of Monterey for Executive Director Services, Quarter 4 2016
$6,756.00 To Brownstein Hyatt Farber & Schreck for Services Rendered through
December 31,2016
$1,425.00 to McGilloway, Ray Brown & Kaufman for Financial Audit Services
$960.00 to Access Monterey Peninsula
$7,500 to Perry and Freeman for Legal Counsel Services January, February and
March 2016
$2,676.45 to Separation Processes Inc
3,500.00 To City of Seaside for Financial Services for FY 15-16
2,000.00 To the City of Seaside for Clerk Services Through December 2016
2,000.00 To City of Monterey for Principal Office of the Authority FY 15-16
Staff is also requesting that a check be issued to Cal Am Water, which is the total
balance remaining from the Value Engineering Account, totaling $15,051.91. Once the
check has cleared, staff will close this account as the project has been completed.
The bank balance as of March 10, 2016 is sufficient to cover the above checks so staff
is recommending approval.
BUDGET UPDATE
For the current fiscal year, the budget was increased $10,000 from the Reserve Funds
to cover the costs of the testimony preparation for the CPUC. At this time no additional
changes to the budget are anticipated. The projections for the Fiscal Year 2016-17 is
currently expected to remain the same as for Fiscal Year 2015-16, i.e. $290,000. Staff
will present the final budget for adoption in May 2016.
The estimated annual membership contributions are attached for Fiscal Year 2016-17.
These figures appear higher than the previous year because they will not have the carry
over credits from the previous fiscal year.
ATTACHMENTS:
A - Budget to Actual Report through March 10, 2016
B - Estimated Annual Membership Contributions FY 2016-17
4:00 PM
02/25/16
Accrual Basis
Profit & Loss Budget vs. Actual

July 1, 2015 through February 25, 2016
Jul 1, '15 -Mar 10, 16
Budget
$ Over Budget
Ordinary Income/Expense
Income
47200 Program Income
47230 Membership Dues
45,948.00
137,000.00
-91,052.00
47240 Transfer From Reserve Funds
10,000.00
10,000.00
0.00
0.00
0.00
0.00
47250 Reimbursement SPI Contract

47260 Reimburesment VE Contract
0.00
0.00
0.00
47200 Program Income - Other
8.50
0.00
8.50
55,956.50
147,000.00
-91,043.50
153,000.00
153,000.00
0.00
208,956.50
300,000.00
-91,043.50
60901 Clerk of the Board
24,000.00
24,000.00
0.00
60902 Executive Director
36,707.47
85,000.00
-48,292.53
Total 47200 Program Income
49900 Carry Over from FY 14-15

Total Income
Expense
60900 Administration and Clerical
60903 Principal Offc of the Authority
5,000.00
5,000.00
0.00
60904 Financial Services
6,000.00
6,000.00
0.00
0.00
500.00
-500.00
60905 Misc Admin Expenses

60900 Administration and Clerical - Other
0.00
0.00
0.00
71,707.47
120,500.00
-48,792.53
62110 Board Counsel
22,500.00
36,000.00
-13,500.00
62140 Special Counsel
55,834.76
100,000.00
-44,165.24
Total 60900 Administration and Clerical
62100 Legal Fees
62100 Legal Fees - Other
0.00
0.00
0.00
78,334.76
136,000.00
-57,665.24
50.00
0.00
50.00
0.00
0.00
0.00
62802 Audit Services
6,300.00
6,000.00
300.00
62803 Televised Meeting
2,922.50
5,000.00
-2,077.50
Total 62100 Legal Fees
62800 Contract Services

60801 Public Outreach
60806 Contract VE
62804 Contract Services & Studies

62805 Contract SPI
0.00
0.00
0.00
45,190.56
10,000.00
35,190.56
0.00
0.00
54,463.06
21,000.00
33,463.06
6,438.48
7,500.00
-1,061.52
62800 Contract Services - Other

Total 62800 Contract Services
65000 Insurance
65100 Travel Expenses
521.20
5,000.00
-4,478.80
66000 Payroll Expenses
0.00
0.00
0.00
68300 Contingency
0.00
10,000.00
-10,000.00
211,464.97
300,000.00
-88,535.03
Total Expense
Page 1 of 4
4:00 PM
02/25/16
Accrual Basis

Jul 1, '15 -Mar 10, 16
Net Ordinary Income
Budget
-2,508.47
0.00
160,000.00
160,000.00
$ Over Budget
-2,508.47
Other Income/Expense
Other Income
Reserve Fund
47220 Interest Earned
Total Other Income
0.80
0.00
0.80
160,000.80
160,000.00
0.80
0.00
0.00
0.00
0.00
0.00
0.00
160,000.80
160,000.00
0.80
157,492.33
160,000.00
-2,507.67
Other Expense
80000 Ask My Accountant
Total Other Expense
Net Other Income
Net Income
Page 2 of 4
4:00 PM
02/25/16
Accrual Basis

% of Budget
Ordinary Income/Expense
Income
47200 Program Income
47230 Membership Dues
33.54%
47240 Transfer From Reserve Funds
100.0%
47250 Reimbursement SPI Contract

47260 Reimburesment VE Contract
47200 Program Income - Other
0.0%
0.0%
100.0%
Total 47200 Program Income
38.07%
49900 Carry Over from FY 14-15
100.0%
Total Income
69.65%
Expense
60900 Administration and Clerical
60901 Clerk of the Board
100.0%
60902 Executive Director
43.19%
60903 Principal Offc of the Authority
100.0%
60904 Financial Services
100.0%
60905 Misc Admin Expenses

60900 Administration and Clerical - Other
Total 60900 Administration and Clerical
0.0%
0.0%
59.51%
62100 Legal Fees

62110 Board Counsel
62140 Special Counsel
62100 Legal Fees - Other
Total 62100 Legal Fees
62.5%
55.84%
0.0%
57.6%
62800 Contract Services

60801 Public Outreach
60806 Contract VE
100.0%
0.0%
62802 Audit Services
105.0%
62803 Televised Meeting
58.45%
62804 Contract Services & Studies

62805 Contract SPI
62800 Contract Services - Other
Total 62800 Contract Services
0.0%
451.91%
0.0%
259.35%
65000 Insurance
85.85%
65100 Travel Expenses
10.42%
66000 Payroll Expenses
0.0%
68300 Contingency
0.0%
Total Expense
70.49%
Page 3 of 4
4:00 PM
02/25/16
Accrual Basis

% of Budget
Net Ordinary Income
100.0%
Other Income/Expense
Other Income
Reserve Fund
47220 Interest Earned
Total Other Income
100.0%
100.0%
Other Expense
80000 Ask My Accountant
Total Other Expense
Net Other Income
Net Income
0.0%
0.0%
100.0%
98.43%
Page 4 of 4
ATTACHMENT B
Estimated Jurisdiction Contribution
Assuming County Participation
Contributions With County Participation
FY 2016-17
Member Jurisdiction
County of Monterey
Carmel By the Sea
Sand City
City of Pacific Grove
City of Seaside
City of Monterey
City of Del Rey Oaks
Total Income/Budget
New FY 16-17
Estimated
Percent
Contribution
Distribution *
Request **
30.40%
$88,160
6.50%
$18,850
0.80%
$2,320
13.10%
$37,990
14.80%
$42,920
33.00%
$95,700
1.40%
$4,060
100%
$290,000
* Computed from water years 2012-2014

** Year-end budget surplus (to be determined) may reduce
contributions in FY 16-17

Agenda Report
FROM:

Item No: 4.
SUBJECT: Adoption of Resolution 16-01, Approving Donald G. Freeman as Legal

Counsel through June 30, 2017 and Authorizing the Authority President to
Execute a Contract Extension with Perry Freeman at a Price not-to-exceed
$36,000
RECOMMENDATION:
It is recommended that the Monterey Peninsula Regional Water Authority (MPRWA)
adopt Resolution 16-01 approving Donald G. Freeman as legal counsel through June
30, 2017 and authorizing the Authority President to execute a contract extension with
Perry Freeman at a price not-to-exceed $36,000.
DISCUSSION:
Following a formal Request for Qualifications (RFQ) for legal services for the Water
Authority conducted during August and September 2012, an Ad-Hoc committee of the
MPRWA recommended selection of Perry and Freeman (Donald G. Freeman). On
September 27, 2012, the Water Authority adopted a resolution selecting Mr. Freeman to
be legal counsel. On December 10, 2012, Mr. Freeman provided the Water Authority
with waivers of conflict of interest from all other participating jurisdictions to which he
has professional, contractual obligations.
Due to Don Freeman's extensive knowledge of the water supply issues that the Water
Authority has dealt with the last three years, and in light of his excellent performance in
the position of Authority Counsel, the Executive Director recommends the Authority
maintains continuity with Donald G. Freeman, at least through June 30, 2017.
Resolution 16-01 approves an extension of Donald G. Freeman as Authority legal
counsel through June 30, 2017 and authorizes the Authority President to execute a
contract extension accordingly.
BUDGET CONSIDERATIONS:
06/12
The budget for FY 2016-2017 will request a maximum of $36,000 for Legal Counsel
services through June 30, 2017.
ATTACHMENTS:
A-Resolution 16-01
MPRWA RESOLUTION NO. 2016-01
A RESOLUTION OF THE MONTEREY PENINSULA REGIONAL WATER AUTHORITY

ACKNOWLEDGING DONALD G. FREEMAN AS LEGAL COUNSEL FOR THE MONTEREY
PENINSULA REGIONAL WATER AUTHORITY AND AUTHORIZING THE PRESIDENT TO
EXTEND A CONSENT AND WAIVER OF CONFLICT OF INTEREST
WHEREAS, Donald G. Freeman has been requested to continue to represent the

Monterey Peninsula Regional Water Authority (MPRWA);
WHEREAS, Donald G. Freeman is currently the City Attorney for the City of Seaside and
the City of Carmel-by-the-Sea;
WHEREAS, Donald G. Freeman and MPRWA recognize the potential conflict of interest
which may arise as a result of Donald G. Freemans legal representation of MPRWA, City of
Seaside, and the City of Carmel-by-the-Sea;
WHEREAS, MPRWA wishes to acknowledge Donald G. Freeman as legal counsel for
MPRWA;
WHEREAS, the President of MPRWA and members of the MPRWA Board of Directors
have reviewed a letter from Donald G. Freeman dated November 20, 2012, indicating that Mr.
Freeman does not believe that his legal services for the Monterey Peninsula Regional Water
Authority will have any impact on his full and effective representation of each party, and does
not believe he has knowledge of any confidential information from any party which would be
material or relevant to his representation of MPRWA, the City of Seaside, and the City of
Carmel-by-the-Sea;
WHEREAS, Donald G. Freeman recognizes that by concurrently representing the
MPRWA, the City of Seaside, and the City of Carmel-by-the-Sea an issue of divided loyalty,
such as in litigation, could possibly arise at some future date, and that at that time it could be
necessary for him to make full disclosure to all parties, could be subject to disqualification from
representing any party, and at such time it would be necessary for each party to seek
independent legal counsel;
WHEREAS, the City of Carmel-by-the-Sea and the City of Seaside have passed their
respective Resolutions and their respective Mayors have executed the Consent and Waiver of
Conflict of Interest;
WHEREAS, the President and Board of Directors have reviewed this request with
independent legal counsel;
WHEREAS, according to Rule 3-310 of the California Rules of Professional Conduct
applicable to California lawyers which requires informed written consent of all represented
parties because of concurrent representation, MPRWA recognizes that Donald G. Freeman is
the City Attorney for the City of Seaside, and for the City of Carmel-by-the-Sea;
WHEREAS, the Board of Directors has been fully satisfied with the performance of
Donald G. Freeman during the period of his tenure as Authority legal Counsel between
September 27, 2012 and the present;

WHEREAS, due to the critical nature of on-going legal activities associated with the
CPUC consideration of the California American Water application for the Monterey Peninsula
Water Project, the Board of Directors finds that the public interest is better served by renewing
Donald G. Freemans contract at this time than to re-advertise a request for proposal for legal
services and;
WHEREAS Board of Directors wishes to authorize the President to extend a Consent
and Waiver of Conflict of Interest, and hereby acknowledges Donald G. Freeman as legal
counsel for the Monterey Peninsula Regional Water Authority, at a total fee not-to-exceed
$36,000.00 for the period July 1, 2016 to June 30, 2017.
NOW, THEREFORE, BE IT RESOLVED, that the President of MPRWA is hereby
authorized to extend on behalf of MPRWA a Consent and Waiver of Conflict of Interest thereby
acknowledging Donald G. Freeman as legal counsel for the Monterey Peninsula Regional Water
Authority and authorizes the President to execute a contract extension with Donald G. Freeman
for legal counsel services.
PASSED AND ADOPTED BY THE MONTEREY PENINSULA REGIONAL WATER
AUTHORITY this ____day of ____ 201___, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
0
0
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
APPROVED:
ATTEST:
Jason Burnett, President
Clerk to the Authority

Agenda Report
FROM:

Item No: 5.
SUBJECT: Adoption of Resolution 16-02, Approving Brownstein

Hyatt Farber Schreck as Special Legal Counsel through
June 30, 2017 and Authorizing the Authority President to
Execute a Contract Extension at a Price not- to-Exceed
$100,000.
RECOMMENDATION:
It is recommended that the Monterey Peninsula Regional Water Authority
(MPRWA) adopt Resolution 16-02 approving Brownstein Hyatt Farber
Schreck, LLP as Special Legal Counsel for the period July 1, 2016 through
June 30, 2017 and authorize the Authority President to extend a contract
with Brownstein at the current hourly rates and a total contract price not-toexceed $100,000.
DISCUSSION:
In March 2012, The Authority negotiated an agreement for Attorney of
Record services with Brownstein. The firm provided special expertise in
water law, at a reduced rate, in support of Water Authority formation and
activities.
For reasons outlined in the staff report on the subject at the Water Authority
meeting in November 13, 2015, the Authority extended the Brownstein
agreement to June 30, 2016 and approved preparation of a contract
accordingly.
The CPUC process, in particular hearings related to approval of the
EIR/EIS and issuance of Cal Am's Certificate of Public Convenience and
Necessity(CPCN), as well as expected future negotiations with the State
06/12
Water Resources Control Board on the Cease and Desist Order, will
continue to require a substantial amount of specialized legal work in 2016
and 2017. To insure continuity in Special Legal Counsel services, the
Executive Director recommends the Authority extend the contract with
Brownstein through June 30, 2017.
Funds are expected to be sufficient for these legal services through the
current fiscal year. A new budget for will need to provide funding of Special
Legal Services in FY 2016-2017.
ATTACHMENTS:
A-Resolution 16-02
MPRWA RESOLUTION NO. 16-02

A RESOLUTION OF THE MONTEREY PENINSULA REGIONAL WATER
AUTHORITY ACKNOWLEDGING BROWNSTEIN HYATT FARBER SCHRECK LLP
AS SPECIAL COUNSEL OF RECORD FOR THE MONTEREY PENINSULA
REGIONAL WATER AUTHORITY, AUTHORIZING THE EXECUTIVE DIRECTOR TO
EXECUTE A CONSENT AND WAIVER OF CONFLICT OF INTEREST, AND
AUTHORIZING THE PRESIDENT TO EXECUTE AN AGREEMENT WITH
BROWNSTEIN FOR LEGAL SERVICES
WHEREAS, Brownstein Hyatt Farber Schreck LLP (Brownstein) has been
requested
to represent the Monterey Peninsula Regional Water Authority (MPRWA) as Special
Counsel;
WHEREAS, Brownstein is currently acting as Special Counsel for the City of
Carmel-by-the-Sea and the City of Seaside;
WHEREAS, Brownstein and MPRWA recognize the potential conflict of interest
which may arise as a result of Brownsteins legal representation of MPRWA, the City of
Carmel-by-the-Sea, and the City of Seaside;
WHEREAS, MPRWA wishes to acknowledge Brownstein as Special Counsel for
MPRWA;
WHEREAS, the President of MPRWA and members of the MPRWA Board of
Directors have reviewed a letter from Brownstein indicating that Brownstein does not
believe that its legal services for the Monterey Peninsula Regional Water Authority will
have any impact on its full and effective representation of each party, and does not
believe it has knowledge of any confidential information from any party which would be
material or relevant to its representation of MPRWA, the City of Carmel-by-the-Sea, and
the City of Seaside;
WHEREAS, Brownstein recognizes that by concurrently representing the
MPRWA, the City of Carmel-by-the-Sea and the City of Seaside an issue of divided
loyalty, such as in litigation, could possibly arise at some future date, and that at that
time it could be necessary for it to make full disclosure to all parties, could be subject to
disqualification from representing any party, and at such time it would be necessary for
each party to seek independent legal counsel;
WHEREAS, the City of Carmel-by-the-Sea and the City of Seaside have passed
their respective Resolutions and their respective representatives have executed the
Consent and Waiver of Conflict of Interest;
WHEREAS, the President and Board of Directors have reviewed this request
with independent legal counsel;
WHEREAS, according to Rule 3-310 of the California Rules of Professional
Conduct applicable to California lawyers which requires informed written consent of all
represented parties because of concurrent representation, MPRWA recognizes that
Brownstein is the Special Counsel for the City of Carmel-by-the-Sea, and for the City of
Seaside; and
WHEREAS Board of Directors wishes to authorize the Executive Director to
execute a Consent and Waiver of Conflict of Interest, and hereby acknowledges
Brownstein as Special Counsel for the Monterey Peninsula Regional Water Authority.
NOW, THEREFORE, BE IT RESOLVED, that the Executive Director of MPRWA
is hereby authorized to execute on behalf of MPRWA a Consent and Waiver of Conflict
of Interest thereby acknowledging Brownstein as Special Counsel for the Monterey
Peninsula Regional Water Authority.
NOW, THEREFORE, BE IT FURTHER RESOLVED, that the President of
MPRWA is hereby authorized to execute on behalf of MPRWA an agreement with
Brownstein for Special Counsel services for the Monterey Peninsula Regional Water
Authority through June 30, 2017, at a fee not-to-exceed $100,000.00.
PASSED AND ADOPTED BY THE MONTEREY PENINSULA REGIONAL
WATER AUTHORITY this ____day of ____ 20____, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
0
0
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
APPROVED:
ATTEST:
Jason Burnett, President
Clerk to the Authority

Agenda Report
FROM:

Item No: 6.
SUBJECT: Authorize The Authority President To Extend The Contract With

The City Of Monterey For Executive Director Services for a
Price of $5000 for the Period July 1, 2016 to June 30, 2017,and
To Request The City Of Monterey To Extend Its Contract With
James M. Cullem For That Position
RECOMMENDATION:
It is recommended that the Monterey Peninsula Regional Water Authority
(MPRWA) extend the contract with the City of Monterey for employment
services for the Authority Executive Director position and to request the
City to extend its employment contract with James (Jim) M. Cullem to serve
as the Executive Director for the MPRWA.
DISCUSSION:
At its meeting of January 24, 2013, the Water Authority Board approved
Resolution 2013-04 and entered into an annual, renewable, contract with
the City of Monterey for Executive Director services. In May 2013, with the
approval of the Water Authority Board, the City hired Jim Cullem through
an annual, renewable contract as Executive Director. The contract with the
City was extended to June 30, 2016. The City also extended Jim Cullem's
contract to June 30, 2016.
At its meeting of March 10, 2016, the Water Authority Board will conduct a
performance review of the Executive Director and should therefore be in a
position to determine if Jim Cullem should continue to serve in that position.
The Authority is also requested to authorize the President to sign the
necessary documents prior to the June 30, 2016 contract expiration date.
06/12
The Executive Director position for FY 2015-2016 is budgeted. The City of
Monterey is reimbursed for Director salary by invoice and the City receives
$5,000 a year to provide the official office of the MPRWA. Funding of the
position for FY 2016-2017 will be addressed at the Authority budget
meeting in May 2016.
ATTACHMENTS:
None

Agenda Report

Item No: 7.
FROM:
SUBJECT:
Adoption of Resolution 16-03 Approving an Extension of the Agreement

with the City of Monterey for Clerk of the Board, Clerical, and Financial
Support Services, and Authorizing the Authority President to Execute a
Contract with the City of Monterey for at a Price of $30,000 for the Period
July 1, 2016 to June 30, 2017.
RECOMMENDATION:
It is recommended that the Authority adopt Resolution 16-03 authorizing an extension of
the agreement with the City of Monterey for Clerk of the Board, and Clerical and
Financial Support services, and authorize the Authority President to execute a contract
accordingly on behalf of the Water Authority at a price of $30,000 for the period July 1,
2016 to June 30, 2017.
DISCUSSION:
When the Monterey Peninsula Regional Water Authority was formed as a JPA in 2012,
the intent was for the member agencies to provide Executive Director and
Administrative and Clerical support services on a rotating basis. Over time it became
obvious that this was not a workable arrangement as the time demands were
substantial and there was need for more specialized expertise. In Feb 2013 the
Authority contracted with the City of Monterey to serve as Agency of Record and to
provide the Executive Director and Clerk of the Board Services.
In September 2013 Monterey sub-contracted with the City of Seaside to provide the
Clerk of the Board but retained the contract to remain the Agency of Record and to
employ the Executive Director on a reimbursable basis.
The City of Carmel-by-the-Sea provided financial services on a pro-bono basis. In
January 2014, the City of Seaside assumed financial services as a part of the Clerical
Services contract.
On September 11, 2014 the City of Seaside contracted directly with the Authority to
provide Clerk, administrative, and financial services. Monterey agreed to provide backup for Seaside.
In February 2015, the City of Monterey and the Authority extended the contract for
Agency of Record and Executive Director services until June 30, 2016.
The Agreements with Monterey and Seaside provided that any party could give 30 days
notice to discontinue providing respective services. Due to an increasing workload at
Seaside, the Clerk of the Board was unable to serve the Water Authority past the end of
2015. Accordingly, Seaside gave notice it would terminate its contract with the Authority
as of Dec 31, 2015.
In order to provide a maximum of continuity and to retain access to the City of Monterey
(Agency of Record) computer system, the City of Monterey contracted with the Water
Authority to provide clerk of the Board and Clerical Support Services from January 1,
2016 through June 30, 2016.
Seaside contracted to provide Financial Support services through June 30, 2016.
The City of Monterey has indicated a willingness to extend the contract for
administrative support and Clerk of the Board services and to assume responsibility for
financial support services for FY 2016-2017at an annual fee of $30,000.
Funding for this agreement in FY 2016-2017 will be addressed during budget
discussions in May 2016.
ATTACHMENTS:
A- Resolution 16-03
RESOLUTION NO. 16-03

RESOLUTION OF THE MONTEREY PENINSULA REGIONAL WATER AUTHORITY
APPROVING AN AGREEMENT WITH THE CITY OF MONTEREY FOR PROVIDING
ADMINISTRATIVE, BOARD CLERK, AND FINANCIAL SERVICES
WHEREAS, the City of Monterey is a participating Member of the Monterey

Peninsula Regional Water Authority; and
WHEREAS, the Authority has deemed it to be more efficient to contract for
continuous administrative services rather than rotating between member cities; and
WHEREAS, the City of Monterey served as the Office of Record for the Authority
from 2012 to 2016; and
WHEREAS, the City of Monterey resumed the contract with the Authority to provide
administrative support and Clerk of the Board services from January 1, 2016 to June 30,
2016 at a fee of $15,000; and
WHEREAS, the City of Monterey has indicated a willingness to continue providing
administrative support and Clerk of the Board services, and to assume financial support
services for the period July 1, 2016 to June 30, 2017 at a fee of $30,000;
NOW THEREFORE BE IT RESOLVED, that the Authority President is hereby
authorized to execute a contract between the Monterey Peninsula Regional Water
Authority and the City of Monterey to provide administrative, Board Clerk and financial
services, as outlined in Exhibit A, for the period July 1, 2016 to June 30, 2017 for a fee of
$30,000.
PASSED AND ADOPTED BY THE MONTEREY PENINSULA REGIONAL
WATER AUTHORITY this ___ day of ____ 201_, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
ATTEST:
APPROVED:
__________________________
Clerk of the Board
Jason Burnett President

1
EXHIBIT A
SCOPE OF SERVICES/PAYMENT PROVISIONS
CLERK OF THE BOARD AND FINANCIAL SERVICES
I.
City of Monterey to Provide the Following:
A.
Clerk of the Board and Administrative Services:
B.
Produce and distribute Agendas and Packets for Board & TAC meetings
Attend & take minutes at Board & TAC meetings
Transcribe, format, & finalize meeting minutes
Complete administrative paperwork to follow up on Board actions
Records management services
FPPC filing administration
Website administration
Financial Services
Financial services in accordance to the adopted Financial policies and
Procedures including the following:
o Production of an annual budget and budget amendments as
necessary
o General Journal Entry Procedures, Expenditures and Disbursements
o Bank Reconciliation and Final Budget Closing processes
C.
Equipment:
Office space and computer work stations for staff assigned to water
authority functions
Administrative and clerical supplies related to Clerks Office activity.
Monterey City Council Chamber as a meeting facility
Audio-visual equipment that exists in the Council Chamber
Office space and computer work stations with content management
software in Monterey.
D.
Miscellaneous Services Performed by City of Monterey:
Monterey to set up and prepare the meeting rooms for Board and TAC
meetings
Payroll Services for Monterey employee(s) providing these services
Tracking of employee hours and resultant costs of services provided
II.
MPRWA to Provide the Following:

An amount of $15,000 semi-annually, paid to the City of Monterey at the
commencement of the contract, and to be allocated as a portion of
Salaries within the Office of the City Clerk to be paid as part of the regular
payroll to employee(s) performing the services described in Exhibit A
herein

Agenda Report
FROM:
SUBJECT:

Item No: 8.

Authorize the Utilization of $10,000 from Contingency Funds to Pay for
Preparation of a Technical Report as a Part of the Water Authority's
Rebuttal Testimony on The Testimony of Curtis Hopkins, Hydrogeologist
for the Marina Coast Water District
RECOMMENDATION:
Staff recommends that the Water Authority authorize the utilization of $10,000 from
Contingency Funds to Pay for the preparation of a technical report as a part of the
Water Authority's rebuttal on The testimony of Curtis Hopkins, hydrogeologist for the
Marina Coast Water District.
DISCUSSION:
At its meeting of Dec 10, 2015, the Water Authority Board approved an extension of the
Separation Processes Inc (SPI) "DEIR Review Services Agreement" to 30 June 2016
to provide technical Support from it hydrogeological sub-consultant Geosyntec for
MPRWA comments on CPUC supplemental testimony and to report periodically on
future Hydrogeological Working Group (HWG) Analyses.
At the December meeting the Board also authorized the Executive Director to execute
and administer a change order (C/O #2) to prepare Authority testimony on brine
disposal, and approved the expenditure of not-toexceed $10,000 from reserve funds to
pay for the work. Supplemental testimony on brine disposal was prepared by Geosyntec
(Al Preston) and submitted to the CPUC on January 22, 2016.
On January 22, 2016 supplemental testimony on the hydrogeological model, the
Hydrogeological Working Group (HWG) analysis, and on the slant well intake water
system were submitted to the CPUC by Marina Coast Water District (MCWD) and
Curtis Hopkins. Rebuttal testimony is due to the CPUC by March 22, 2016. This issue is
addressed in more detail on agenda item #9.
Accordingly, since time was of the essence, the Executive Director directed the use of
not-to-exceed $10,000 in Contingency Account funds, subject to authorization of the
Water Authority at its meeting of March 10, 2016, to have Geosyntec (Gordon Thrupp)
provide consultant support, prepare an independent technical report as a basis for
06/12
rebuttal testimony, and, if necessary, attend CPUC hearings on the issues raised by
MCWD.
FISCAL IMPACT:
The FY 2015-2016 Water Authority budget has a contingency fund balance of $10,000.
The Board is requested to authorize the use of the contingency funds for Gordon
Thrupp's work.
ATTACHMENTS:
None

Agenda Report
FROM:

Item No: 9.
SUBJECT: Receive and Discuss Recommendations from the Technical Advisory

Committee (TAC) and from Staff on CPUC Testimony Submitted on
January 22, 2016 and Provide Direction
RECOMMENDATION:
Staff recommends that the Water Authority receive recommendations from the TAC
and from staff on the supplemental testimony that was submitted to the CPUC ALJ,
especially that from Tom Moore and Curtis Hopkins, and provide direction to staff with
respect to any rebuttal testimony.
DISCUSSION:
Cal Am provided updated costs estimates to the CPUC on December 15, 2015, and the
MPRWA, the MPWMD and the MRWPCA did the same on January 22, 2016.
The supplemental testimonies submitted with the approval of the Water Authority Board
by Mayor Jason Burnett (Board President) and by Al Preston of Geosyntec (Authority's
hydrogeologic expert) are at attachments A and B.
The supplemental testimony submitted by Tom Moore of the MCWD Board and that
submitted by Curtis Hopkins, a hydrogeologist for the MCWD, as well as all
supplemental testimony that was submitted by intervenors, can be reviewed at the
Water Authority Web page under "Documents" within "Resource Central".
Following several conference calls with Russ McGlothlin, the Authority Special Counsel,
and discussions at the TAC, the Executive Director recommends that the Authority
extend its existing contract with Separation Processes Inc (SPI), and its hydrogeologist
sub-consultant Geosyntec (Gordon Thrupp), to prepare a technical report on the
Hopkins testimony. Thrupp's report would serve as the basis of rebuttal testimony from
the Authority due to the CPUC ALJ by March 22, 2016.
Additional comments and recommendations from the TAC meeting of March 7 will be
provided to the Board at the meeting.
06/12
FISCAL IMPACT:
The $10,000 fiscal impact of the additional Geosyntec work is addressed in consent
agenda item #8.
ATTACHMENTS:
A- Testimony of Jason Burnett
B- Testimony of Al Preston
BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF CALIFORNIA
In the Matter of Application of CaliforniaAmerican Water Company (U210W) for

Approval of the Monterey Peninsula Water
Supply Project and Authorization to Recover All
Present and Future Costs in Rates
A.12-04-019
(Filed April 23, 2012)
SUPPLEMENTAL TESTIMONY OF JASON BURNETT
RUSSELL M. MCGLOTHLIN (SBN 208826)

JENA R. SHOAF (SBN 296060)
BROWNSTEIN HYATT FARBER SCHRECK, LLP
1020 State Street
Santa Barbara, CA 93101
Telephone: (805) 963-7000
Facsimile: (805) 965-4333
Email: rmcglotblin@blifs.com; - shclifs.sjon
Attorneys for:
MONTEREY PENINSULA REOIONAL WATER
AUTHORITY
Dated: January 22,2016

In the Matter of Application of CaliforniaAmerican Water Company (U210W) for

A.12-04-019
TABLE OF CONTENTS
I.
Introduction
II.
V.
The Water Authority's Support for Inclusion of GWR in the MPWSP
The Water Authority's Support for the Return Water Settlement Term Sheet
The Water Authority's Support for the Brine Discharge Settlement Term Sheet
8
9
VI.
SUPPLEMENTAL TESTIMONY OF JASON BURNETT

I.
Introduction
Ql:
Please state your name and business address.
Al: My name is Jason Burnett. My business address is Carmel-by-the-Sea City Hall, Monte
Verde St., Carmel-by-the-Sea, CA 93921.
Q2: By whom are you employed and in what capacity?
A2: I am currently the Mayor of the City of Carmel-by-the-Sea, California. I was elected
Mayor in 2012, was reelected in 2014, and was previously a member of the City Council from
2010 through 2012.
Q3: What offices and roles do you perform for the Monterey Peninsula Regional Water
Authority ("Water Authority")?
A3:
I am currently the President of the Water Authority. I was previously its Vice-President
and the Chair of its Technical Advisory Committee. I have been highly involved in the Water
Authority's efforts concerning the Monterey Peninsula Water Supply Project (MPWSP)
proposed by the California-American Water Company ("Cal-Am") as well as efforts pertaining
to this proceeding before the California Public Utilities Commission ("CPUC"). I am also the
Water Authority's principal representative to the Monterey Peninsula Water Supply Project
Governance Committee, which was established to afford community input into the planning and
development of the MPWSP, and I chair that committee.
Q4: Have you testified before the CPUC?
A4:
Yes, I provided testimony in the prior evidentiary phase of this proceeding in 2013.
Additional background testimony concerning my education and professional experience and the
role of the Water Authority and its efforts concerning the MPWSP are set forth in my earlier
testimony. I have also testified in an unrelated proceeding involving PG&E gas distribution.
Q5: What is the purpose of your testimony?
A5:
The purpose of my testimony is to testify in support of the following subjects:
Inclusion of the Pure Water Monterey Project, commonly referred to as the groundwater
replenishment project or "GWR" as a component of the MPWSP;
H.
The "return water" settlement term sheet; and
The draft brine discharge settlement term sheet.
The Water Authority's Support for Inclusion of GWR in the MPWSP
Q6: What is the Water Authority's position on whether GWR should be a component of the
MPWSP?
A6: The Water Authority has long supported a portfolio approach to solving our water supply
challenges. However, at the time of the submission of my earlier testimony we did not know
whether the GWR project would advance to the point of warranting our support for inclusion in
the portfolio. At that point, in 2013, we supported the notion of including the possibility of GWR
with a smaller desalination facility (6.4 million gallons per day or MGD) or the possibility of a
larger desalination facility (9.6 MGD) without GWR. Since 2013, the Water Authority and the
Governance Committee have pursued both options including through the request for proposal
(RFP) process for the design-build firm and a value engineering process that evaluated both 6.4
MGD and 9.6 MGD desalination plants. By pursuing both options, we kept both options open
until more information was available.
Since the submission of my earlier testimony, the Water Authority has held numerous public
meetings to receive updates on the planning efforts for the GWR project, to receive public
comment regarding the same, and to provide an opportunity for discussion by the Water
Authority's board of directors concerning the merits of including the GWR project as a
component of the MPWSP. We now conclude that GWR should be a component of the MPWSP.
Q7: What does the Water Authority consider to be the most important issues pertaining to
whether the GWR project should be a component of the MPWSP?
A7: The Water Authority believes the key issues include: (i) the timing of development of
GWR, (ii) the certainty of approvals, financing, and project viability; (iii) potential
2
improvements to the Monterey Peninsula's water supply reliability; (iv) potential interim
assistance in meeting the requirements of a proposed modified Cease and Desist Order (see
Attachment 1), which is presently under consideration by the State Water Resources Control
Board ("SWRCB"); (v) relative environmental impacts of GWR and desalination; (vi) the value
of continuing and enhancing the community consensus around a portfolio of water supply
projects; and (vii) the rate implications of GWR's inclusion. The Monterey Peninsula Water
Management District ("MPWMD") and the Monterey Regional Water Pollution Control Agency
("MR.WPCA"), in consultation with the Water Authority and Cal-Am have explored various
efforts to lower the cost of GWR, including the terms applicable to GWR within the Settlement
Agreement (discussed below), grant funding, cost sharing, and value engineering.
Q8: Please describe the criteria set forth in the Settlement Agreement pertaining to GWR.
A8: The Settlement Agreement, which was entered into by the Water Authority and most of
the parties to this proceeding, and submitted to CPUC on July 31, 2013, provides that the
decision whether to include GWR as a component of the MPWSP should be based on whether
nine criteria are satisfied. I have paraphrased the nine criteria from the Settlement Agreement as
follows:
1.
An Elift has been completed for GWR without challenge;
2.
Permitting is on schedule;
3.
There is sufficient legal certainty regarding the GWR project ability to produce
sufficient water;
4.
The California Department of Health or the Regional Water Quality Control

Board will likely approve the GWR extraction and GWR treatment and injection
processes;
5.
The GWR Project is on schedule;
6.
Preliminary design for the GWR Project is sufficient to generate an accurate

project cost estimate;
7.
A sufficiently detailed GWR Project funding plan to support an application for a

State Revolving Fund loan is in place;
8.
California American Water, MPWMD, and MRWPCA have agreed on a WPA

with just and reasonable terms; and
3
9.
The revenue requirement for the combination of the GWR Project and the smaller
desalination is just and reasonable when compared to the revenue requirement for
a larger desalination project alone.
Q9: Does the Water Authority believe the nine criteria for the GWR decision set forth in the
Settlement Agreement have been satisfied?
A9:
Yes, the Water Authority concludes that the nine criteria have been satisfied. The first
eight criteria have been definitively satisfied. After extensive analysis, public meetings, and
discussion by its board, the Water Authority concludes that the ninth criterion has also been
satisfied.
Q10: Why does the Water Authority conclude that the ninth criterion has been satisfied?
A10: The inclusion of GWR will likely result in a cost premium to the Cal-Am ratepayers in
most years, but we believe it is likely to be modest and acceptable when weighed against the
other benefits obtained from the GWR project.
Q11: Please explain why you anticipate that the inclusion of GWR will likely result in a cost
premium.
Al 1: The Authority believes that cost differences should first be examined based on a
comparison of net present value (NPV) of the lifetime project costs of each option (GWR plus
smaller desalination versus larger desalination) and then we should also consider any intertemporal cost divergences over the life of the projects. The MPWMD, MRWPCA, and Cal-Am
have developed a cost model and the Water Authority concurs that it is an appropriate model.
The cost model allows us to change key variables to develop a reasonable array of scenarios. The
variables include whether grant funding is obtained for the GWR project, the future escalation in
the cost of electricity (lower costs increase the premium for the GWR/smaller desalination
hybrid option), how much of existing sunk-costs incurred by the MPWMD and MRWPCA will
be included in cost reimbursement through rates, whether any cost-sharing agreement for the
GWR pipeline can be agreed to with other local agencies, and the discount rate used for the NPV
calculation. Depending on the variables inputted in the model, we have developed a high-,
median-, and low-cost scenario. The details of the cost model and its outcomes based on
4
different variables are set forth in the testimony filed by David Stoldt, General Manager of the
MPWMD.
Most scenarios show a higher NPV with the inclusion of GWR. However, under most scenarios
the cost difference is within about five percent of the revenue requirement of the total MPWSP
costs (i.e., the NPV costs of GWR plus smaller desalination plant is within five percent of the
NPV cost of the stand-alone larger desalination plant). (See Supplemental Testimony of David
Stoldt, filed January 22,2016, Attachment 2 "GWR Cost Comparison Model Median Cost
Scenario.) This five percent figure is within the range of existing cost uncertainties. This
translates into an approximately one percent impact on the averageCal-Am water bill in the first
year of operation or about an $1 premium per month for the average Cal-Am customer. (See
Supplemental Testimony of Jeffrey Linam, filed January 22, 2016.)
Under most model scenarios the cost differential decreases over time (i.e., the GWR premium
diminishes). In fact, in the later years modeled, the large desalination with no GWR actually
incurs a premium under the median-cost scenario. However, the temporal differences are not
significant, and in our judgment, it is fair to acknowledge that there will likely be a modest cost
premium if GWR is included within the MPWSP especially from the perspective of today's
ratepayers.
Q12: Why does the Water Authority deem the modest premium attendant to GWR acceptable
when weighed against the other benefits obtained from the GWR project?
Al2: The GWR project affords numerous positive benefits that should be considered
independent of the cost modeling The Settlement Agreement identified several of these potential
benefits, including: "(i) a material schedule advantage in that the GWR Project is anticipated to
be operable sooner than the desalination plant; (ii) water supply resilience and reliability (benefit
of the portfolio approach); and (iii) other positive externalities of the GWR Project, including,
but not limited reduced atmospheric carbon emissions, reduced brine discharge, and the
implementation and encouragement of State policies regarding water recycling through early
adoption of a water reuse project."
The Water Authority concurs that these are appropriate positive externalities that the GWR
project will likely afford. I further elaborate on the positive attributes warranting including of the
5
GWR project within the MPWSP as follows:
GWR is approved with a certified EIR whereas the CEQA compliance for the
desalination project is still pending.
The GWR project is anticipated to come online as soon as 12 to 24 months ahead of the
anticipated start-up for the desalination project. This should allow the Monterey
Peninsula to reduce its use of Cannel River water sooner, potentially assist in avoiding
violations of the proposed modified Cease and Desist Order (see to Application to
Modify SWRCB Order VVRO 2009-0060, attached hereto as Attachment 1) presently
under consideration by the SWRCB, and help to satisfy milestones set forth in the
proposed modified CDO that include GWR achievements as milestone compliance. (See
Attachment 1 hereto at page 3 of Attachment l[proposed modified CD0].)
The GWR project should afford better water supply reliability both in construction and
long-term water supply due to operational flexibility and reduced operational risk (i.e., if
either plant is delayed in development or during operation either experiences a service
interruption, the portfolio approach avoids a complete loss of supply).
The GWR project affords several environmental benefits in comparison to the large
desalination project alone. These include surface water quality improvements, reduced
brine discharge, and reduced demand on the desalination source wells, which will lessen
any potential impacts on the Salinas Valley Groundwater Basin that must be mitigated
through additional return water deliveries. The lower energy consumption of the hybrid
GWRismaller desalination plant will also make it easier to meet the AB 32 greenhouse
limitations applicable to the projects. Each of these environmental issues matter to our
community directly and many of them underpin our essential visitor serving economy.
I also note the benefits that GWR affords in not just diversifying the Monterey
Peninsula's water supply, but also improving water quality within the Salinas Valley by
including poor quality agricultural/industrial waste water as a source water supply for
GWR. Contaminated supplies would be treated and serve as a new source of supply
rather than a continued water quality problem demanding mitigation. Such multi-benefit
and regional water supply planning should be embraced whenever reasonably feasible. In
fact, the embrace of the GWR project's potential has been an essential reason why we
have been able to form and maintain a broach coalition of support for the MPWSP among
the parties to the Settlement Agreement and other community interests.. A good
commentary on noted cooperation that has emerged in support of the regional approach
embraced in GWR and the return water settlement is set forth in an editorial from the
Monterey Herald, dated January 22, 2015. I have attached a copy of the editorial to this
testimony as Attachment 2. Previous approaches to solving Monterey Peninsula's water
supply shortfall have been derailed because of lack of strong community and stakeholder
consensus including buy-in from the agricultural community. GWR has strong
community and stakeholder support and is critically important as we work to maintain
and enhance the support for the portfolio.
The GWR project also furthers essential state goals of advancing greater use of water
recycling and indirect potable reuse as specified in SWRCB's Water Action Plan. (See
Attachment 3, a letter from Felicia Marcus, Chair of the SWRCB, to Commissioner
Catherine Sandoval, dated January 22, 2016.)
Q13: Has the Water Authority reviewed the proposed Water Purchase Agreement ("WPA") for
GWR?
A13: Yes.
Q14: Does the Water Authority believe that the terms of the WPA are just and reasonable?
A14: Yes.
Q15: In conclusion, does the Water Authority urge the CPUC to include GWR as a component
of the MPWSP?
A15: Yes, the Water Authority believes the modest cost premium for GWR is justified based
on our understanding of community values, our risk mitigation strategy, our need for immediate
and reliable new water supplies, the environmental benefits afforded by GWR, and the other
advantages of GWR discussed above. Accordingly, the Water Authority urges the CPUC to
approve Cal-Am's execution of the WPA to allow the GWR project to be included within the
MPWSP. We also favor CPUC approval for Cal-Am to execute the WPA this summer so that
construction of the GWR project can commence expeditiously without delay. Please see
testimony of Paul Sciuto of January 22, 2016 noting when the GWR project will be ready for
construction.
The Water Authority's Support for the Return Water Settlement Term Sheet
Q16: Does the Water Authority support the "return water" settlement term sheet described in
and attached to the supplemental testimony of Richard Svindland on behalf of Cal-Am, dated
January 22, 2016?
A16: Yes.
Q17: Why does the Water Authority support the return water settlement term sheet?
A17: The return water settlement term sheet is the product of extended negotiations with
Salinas Valley Water Coalition, the Monterey County Farm Bureau, the Castroville Community
Services District ("CCSD"), and numerous other parties to this proceeding. It sets forth the terms
on which a definitive agreement could be reached to resolve the return water issues associated
with the potential impacts to the Salinas Valley Groundwater Basin ("SVGB") relating to the
desalination source water wells. As noted in footnote 4 of the prior Settlement Agreement,
"SVWC, MCFB, LandWatch, and Citizens for Public Water are concerned about potential harm
from California American Water's production of source water to the Salinas River Groundwater
Basin ("SRGB") and its users. Their CPCN support is therefore contingent on resolving certain
source water issues to be informed by the Hydrogeologic Study and the Technical Report
provided for in the Settlement Agreement." The return water settlement term sheet represents a
substantial step in resolving this issue and removing this contingency to the full support of the
Settlement Agreement terms. It also substantially reduces the risk of litigation that could delay
the desalination project.
A broader discussion of the return water issue and the specific terms set forth in the term sheet is
provided in the supplemental testimony of Richard Svindland, dated January 22, 2016.
Essentially, the term sheet provides for the delivery of return water to the CCSD, and if
8
necessary, also the Castroville Seawater Intrusion Project ("CSIP") or another SVGB
groundwater user to offset current groundwater use. This affords a means of in lieu
replenishment of the SVGB. This in lieu replenishment mitigates potential groundwater right
legal challenges, CEQA mitigation requirements, and groundwater export limitations set forth in
the Monterey County Water Resources Agency Act ("Agency Act"). The terms provide for
reasonable reimbursement of Cal-Am (and hence its ratepayers) for the water deliveries to the
CCSD and CSIP with the amount depending on circumstances specified in the term sheet.
It should be noted that the price paid per acre-foot will vary depending on whether the return
water is (i) required by the Agency Act or other legal obligations; or (ii) is not legally required
but is within the guaranteed supply to CCSD that is necessary to support its investment in a
pipeline to convey the desalinated water to CCSD. 1 If the return water is legally required, the
price will be set at the avoided cost of CCSD's pumping. This amount is substantially less than
the cost of producing the water but any amount of cost recovery is an improvement over no
reimbursement. If the return water is not required, the price will be set at the marginal cost of
operating the desalination plant, effectively making the Cal-Am ratepayer whole relative to
simply turning down or turning off the desalination plant.
Presuming a final definitive agreement can be reached consistent with the term sheet, and that a
settlement agreement is accepted by the CPUC, this will largely, if not entirely, resolve one of
the fmal significant potential challenges to the MPWSP relating to groundwater rights, CEQA
issues concerning potential impacts to the SVGB, and the Agency Act. In light of the significant
certainty that such a settlement would afford and the just and reasonable terms for the Cal-Am
ratepayers, the Water Authority has agreed to the term sheet and will support efforts to convert it
into a defmitive settlement agreement for submission to the CPUC in this proceeding.
DEL The Water Authority's Support for the Brine Discharge Settlement Term Sheet
Q18: Does the Water Authority support the brine discharge settlement term sheet described in
and attached io the testimony of Al Preston?
The term sheet provides that Cal-Am shall make available for delivery to CCSD 800 acre-feet annually
of return water if the large desalination plant is constructed, or 690 acre-feet annually if the smaller
desalination plant is constructed.
9
A18: Yes.
Q19: Why does the Water Authority support the brine discharge settlement term sheet?
A19: The brine discharge settlement term sheet resolves the other significant potential
challenge that was left unresolved in the prior Settlement Agreement. It is the product of
extended negotiations with the Surfrider Foundation ("Surfrider") and other parties to this
proceeding. It sets forth the terms on which a definitive agreement could be reached to resolve
the brine discharge issues associated with the MPWSP. As noted in footnote 4 of the prior
Settlement Agreement, "Surfrider's support [for issuance of a CPCN for the MPWSP] is
contingent on resolving brine discharge to include a pressurized diffuser." The brine discharge
settlement term sheet represents a substantial step in resolving this issue and removing this
contingency to the full support of the Settlement Agreement terms.
A broader discussion of the brine discharge issues and the specific terms set forth in the term
sheet is set forth in the direct testimony of Al Preston, dated January 22, 2016, which is being
filed concurrently by the Water Authority with my testimony. Essentially, the term sheet
provides for a reasonable monitoring regime to confirm that the marine environment is protected
through appropriate dilution of the brine generated and discharged from the MPWSP, and
provides for contingent mitigation if the currently-proposed outfall approach proves insufficient
for such protection.
Presuming a final definitive agreement can be reached consistent with the term sheet and that
settlement agreement is accepted by the CPUC, the settlement should provide a means to ensure
protection of the marine environment from high saline concentrations and will resolve the
objections that Surfrider maintained in relation to the MPWSP' s brine discharge. Like the return
water issue, this will afford significant certainty on a significant remaining challenge. It also will
likely avoid the requirement to install an expensive pressurized diffuser, provided that the
monitoring confirms that the brine diffusion is consistent with the California Ocean Plan and any
other regulatory requirements. Accordingly, the Water Authority will support efforts to reach a
final agreement with Surfrider and the other parties to the proceeding on the terms of a definitive
settlement agreement concerning the brine discharge monitoring and contingent mitigation for
submission to the CPUC in this proceeding.
10
Q20: Does this conclude your testimony?

A20: Yes.
SOF
11
Supplemental Testimony
of Jason Burnett
January 22, 2016
Attachment 1
ELLISON, SCHNEIDER & HARRIS L.L.P.

ATTORNEYS AT LAW
2600 CAPII01. AVENUE, StnTE 400
SACRAMENTO, CALIFORNIA 95816
TELEPHONE,: (916) 447-2166
http://www.eslawtirm.com
. CI,
ROBERT E. DONLAN
ILED@ESLAWFIRNI.COM
November 20, 2015

Tom Howard
Executive Director
State Water Resources Control Board
1001 1 Street
Sacramento, CA 95814
Re: Application For Order Modifying State Water Board Order
WRO 2009-0060 (Cease and Desist Order)
Dear Mr. Howard:
On behalf of the petitioners and other stakeholders, California-American Water Company hereby
submits the enclosed Application For Order Modifying State Water Board Order WRO 20090060. Petitioners and Stakeholders appreciate the time and efforts of State Water Board staff in
the development of the Application and Proposed Order, and we look forward to working with
the State Water Board on approval and implementation of the Proposed Order.
Sincerely,
e: b' l
obert E. Donlan
Enc.
cc:
Barbara Evoy
John O'Hagart
Mariana Aue
Felicia Marcus
Frances Spivy-Weber
Tam Doduc
Steven Moore
Dorene D'Adamo
Anthony J. Cerasuolo
Andrew Homer
Russell M. McGlothlin
David C. Laredo
Thomas H. Jamison
(00341004;1)
CALIFORNIA-AMERICAN WATER COMPANY

Anthony J. Cerasuolo (State Bar. No. 800912)
1033 B Avenue, Suite 200
Coronado, California 92118
Telephone: (619) 522-6370
I.
! I +I
:
ELLISON, SCHNEIDER & HARRIS L.L.P,

Robert E. Donlan (State Bar No. 186185)
Shane E. C. McCoin (State Bar No. 258588)
2600 Capitol Avenue, Suite 400
Sacramento, California 95816
Telephone: (916) 447-2166
Attorneys for CALIFORNIA-AMERICAN WATER COMPANY
BROWNSTEIN HYATT FARBER SHRECK, LLP
Russell M. McGlothlin (State Bar No. 208826)
1020 State Street
Santa Barbara, California 93101
Telephone: (805) 963-7000
Attorneys for MONTEREY PENINSULA REGIONAL WATER AUTHORITY
DE LAY & LAREDO
David C. Laredo (State Bar No. 66532)
606 Forest Avenue
Pacific Grove, CA 93950
Telephone: (831) 646-1502
Attorneys for MONTEREY PENINSULA WATER MANAGEMENT DISTRICT and CITY OF
PACIFIC GROVE
FENTON & KELLER
Thomas H. JaliliS011 (State Bar No. 69710)
2801 Salinas Highway
Monterey, CA 93940
Telephone: (831) 373-1241
Attorneys for PEBBLE BEACH COMPANY
STATE OF CALIFORNIA
STATE WATER RESOURCES CONTROL BOARD
In the Matter of the Unauthorized Diversion and Use
of Water by the California American Water
Company; Cease and Desist Order WR 2009-0060
APPLICATION FOR ORDER

MODIFYING STATE WATER
BOARD ORDER WRO 2009-0060
(CEASE AND DESIST ORDER)
1
Application for Order Modifying Cease and Desist Order Wil0 2009-0060
I.
t
Introdu cjon
Pursuant to Water Code section 1832, California-American Water Company ("CAW"),,
Monterey Peninsula Regional Water Authority ("1VITRWA") and Monterey Peninsula Water
Management District ("1VEPWMD"), the Pebble Beach Company ("PBC"), and the City of
Pacific Grove l (collectively and/or, individually, "Petitioners") hereby apply to the State Water
Resources Control Board ("SWRCB") for an order modifying certain of the ordering provisions
of Order WRO 2009-0060 (referred to herein as "Order" or "CDO"). 2 In Orders WRO 20090060 as amended by WR 2010-0001, the SWRCB required CAW to comply with Condition 2 of
SWRCB Order WR 95-10. CAW has complied with these Orders by diligently implementing
various actions in collaboration with the MPRWA, MPWMD and other community interests,
including termination of unlawful diversions from the Carmel River in accordance with the
schedule and conditions set forth in the CDO. Petitioners have diligently implemented measures
to comply with the CDO, and CAW is currently meeting or has met all of the conditions of the
CDO. Despite the best efforts of these parties as described below, factors beyond Petitioners'
control prevent CAW and Petitioners from implementing a replacement water supply to
eliminate all unauthorized diversions from the Carmel River before December 31, 2016 as
required in the CDO. Accordingly, Petitioners hereby request that the SWRC13 issue a new order
modifying and restating certain of the ordering provisions of the CDO as specifically proposed in
Attachment 1 ("Proposed Order"), 3
Although it is a member of the MPRWA, the City of Pacific Grove joins as an individual Petitioner due to its
below.
specific interest in the "City of Pacific Grove Recycled Water Project" described in Section
Order would supersede the ordering provisions of
2 Petitioners understand that, as of its effective date, the requested
State
State Water Board WRO 2009-0060. All other provisions of State Water Board WRO 2009-0060 and all other
until terminated by
Water Board orders concerning CAW's diversions from the Carmel River would remain in effect
law or action of the State Water Board
analysis and negotiations by Petitioners, stakeholders,
3 The Proposed Order is the result of nearly two years of
includes significant commitments to measures to
Order
Proposed
The
staff.
SWRCB
and
resources agencies,
and
protect and enhance aquatic resources in the Carmel River through the extension period of the Proposed Order,
without
Peninsula
Monterey
the
on
standards
use
and
conservation
water
unequaled
maintain
to
reflects an effort
causing further damage to the economy of the Peninsula. The diversion reductions proposed in the Proposed Order
will severely stretch the communities' water conservation capabilities, and therefore this Application is made with
the understanding and on the condition that the SWRCE1 adopt an order amending the COO that is materially the
same as the terms and conditions in the Proposed Order in Attachment 1. Petitioners reserve all rights and remedies
Lo protect the water supply necessary to maintain health and safety of the Monterey Peninsula, and do not intend
with this Application to waive any rights or remedies necessary to protect an adequate water supply for the public
welfare of the Monterey Peninsula.
2
Application for Order Modifying Cease and Desist Order WRO 2009-0060
In summary, the Proposed Order would extend the deadline for CAW to terminate all
unlawful diversions from the Cannel River until December 31, 2020 to allow additional time to
complete development of a replacement water supply. The moratorium on new connections and
increased uses at existing connections that is described in more detail below would be
maintained during the extension period. The Proposed Order would require CAW to make an
immediate reduction of 1,000 afa from the existing diversion limit that is in place under Order
WRO 2009-0060 for Water Year 2015-16, resulting in a diversion limit for that year of 8,671. In
Water Year 2016-2017, the diversion limit would automatically be decreased again to 8,310 afa,
which is derived by using a five year average of CAW's actual Cannel River production for the
period ending with Water Year 2014-15. If Petitioners meet annual milestones that are directly
tied to demonstrable progress on completing a new water supply during the extension period,
then this diversion limit (8,310 afa) would be maintained for the entire extension period. If
Petitioners fail to meet a milestone and the SWRCB does not grant an exception, then the
diversion limit for the subsequent Water Year would be reduced by 1,000 afa and such reduction
would remain in force until after the milestone was met. The Proposed Order includes provisions
describing the possibility of carrying over limited volumes of water from one Water Year to
another where CAW produces less than the diversion limit in place for a given Water Year. It
also includes modifications to how water that is diverted to Aquifer Storage and Recovery
("ASR") is treated with respect to the diversion limit, which modifications are aimed at
promoting maximum utilization of ASR to offset CAW' s unlawful diversions. The Proposed
Order also establishes a reporting structure through which Petitioners and other stakeholders
would provide annual updates to the S'WRCB on progress towards developing a new water
supply and the status of the Cannel River fishery and habitat.
Petitioners also request cooperation and assistance from the SWRCB regarding certain
applications, permits, loans and grant funds to implement projects that will reduce unauthorized
diversion from, and increase the water in, the Cannel River, particularly during drier months of
the year. With the SWRCB 's support for those projects and modification of Order WRO 20093
0060, Petitioners can commit to carry out the actions, plans and projects described in Sections
M.A and 111.C, which include:
Continued development and implementation of efficiency and conservation measures;
Continued development and implementation of projects to develop alternative and

supplemental water supplies; and
Continued development and implementation of fish and wildlife protection and
enhancement measures.
While not signatories to this Application, many other stakeholders participated
extensively in the development of this Application. Petitioners thank each of these groups and
request that the Board recognize them for their efforts to collaborate with Petitioners. Without
them, this Application would not be as robust and well-reasoned as it is today. These groups
include the Sierra Club, the Carmel River Steelhead Association, the Planning and Conservation
League Foundation, Quail Lodge, Berrurdus Lodge, and the Cannel Valley Ranch, among
others. Included in Attachment 2 are letters of support from several stakeholder entities, each of
whom participated in the development of this Application.
Petitioners would also like to acknowledge the significant efforts and collaboration by
Staff of the SWRCB in the development of this Application. In the face of the worst drought in
California's history, SWRCB Staff professionally and cooperatively worked with Petitioners over
a two year period to provide feedback, to help drive consensus among stakeholders and to assist
in the development of this Application and the Proposed Order. The Board should recognize the
efforts and professionalism of its Staff members and their contributions to this Application.
The SWRCB has Authority to Modify the CDO
II.
The SWRCB liaR broad discretion to modify a CDO and to revise a schedule of
compliance contained in a CDO. See Order WR 2010-0002. Petitioners make this Application
pursuant to Water Code section 1832, which states, in relevant part: "The board may, alter notice
and. opportunity for hearing, upon its own motion or upon receipt of an application from an
aggrieved person, modify, revoke, or stay in whole or in part any cease and desist order issued
pursuant to this chapter." For the reasons set forth below, including the fishery protection and
enhancement measures that will be implemented by Petitioners, Petitioners submit there is good
4
2009-0060
WRO
Application for Order Modifying Cease and Desist Order
cause for the SWRCB to Modify the schedule and conditions in Order WRO 2009,0060.
DT. It is Reasonable and in the Public Interest to Modify the COO as Requested
A. CAW and Petitioners have Diligently and Aggressively Implemented
Measures to Comply with the COO.
1. Efficiency and Conservation Measures
Prior to and since the issuance of the CDO, Petitioners have dedicated tremendous
resources to implement efficiency and conservation measures to control and reduce customer
demand and system losses within CAW's Monterey district, such that the community is currently
outperforming the Carmel River diversion reduction targets set forth in the CDO. These include
the following specific measures:
a. Moratorium on New Connections and Increased Uses at Existing
Connections
CAW has implemented and diligently enforced a moratorium on new, service connections
within its Monterey district. CAW applied for, and the California Public Utilities Commission
("CPUC") approved on March 24, 2011, a moratorium on new service connections and an
increased use at existing connections caused by a change in use. 4 See CPUC Decision D.11-03048. The moratorium has remained in effect since it was approved, and would be maintained
during the requested extension period under the Proposed Order.
b. Revised Conservation and Rationing Plan
On July 14, 2015 CAW submitted an application to the CPUC to modify revised Rule
No. 14.1.1 in CAW' s CPUC tariff, Water Conservation and Rationing Plan for the Monterey
District. CAW filed this application, with support and cooperation from MPWMD, hi
recognition that Rule 14.1.1, which is based upon the MTV/MD Regulation XV, Expanded
Water Conservation and Standby Rationing Plan, is outdated since it was last reviewed by the
CPUC in a 2007 proceeding. A prehearing conference was held by the CPUC Administrative
Law Judge on September 8, 2015 to discuss the parties' proposed schedule and scope of the
Prior CPUC decisions require CAW to seek CPTIC authorization prior to denying service to any customer within
its service area.
5
proceeding. On November 4, 2015, the CPUC filed a scoping memo that sets the schedule for a
decision on CAW's application by approximately October 2016.
c.
Water Conservation Programs
CAW and MPWMD have implemented a variety of customer water conservation and
efficiency programs, including programs targeting large commercial customers such as laundries,
hotels, and car washes. CAW' s efficiency standards have placed it in the lowest residential percapita usage tier under the SWRCB's recently adopted emergency urban water conservation
regulations. CAW and MPWMD have also implemented programs targeting reductions in
outdoor irrigation, including replacement of irrigated turf with drought tolerant landscaping or
artificial turf, incentives for installation of weather-based irrigation controllers, mandatory
installation of rain sensors on irrigation systems, and mandatory water efficiency requirements
for all non-residential customers and certain residential customers. See MPWMD Regulation
XIV. In February 2010, CAW implemented, with CPUC approval, a new tiered conservation rate
structure with increases directed at the top tier users to promote conservation practices and
reduce overall water usage. Compared to the five year historical tier 4 and 5 usage, tier 4 and 5
usage was down approximately 71% in Water Year 2014-2015. See Table Nine in CAW's 4th
Quarterly Report for the 2014-2015 Water Year to SWRCB pursuant to Order WRO 2009-0060.
d. Infrastructure and Operational Improvements to Reduce System
Losses and Customer Leaks
CAW has implemented and continues to implement programs to detect and reduce nonrevenue system losses, including: replacement of older water mains and service lines in areas
shown to be more leak prone; water meter replacement; active leak detection; technological
solutions to manage lost water; and operational fixes such as pressure reduction. In addition,
CAW is currently conducting a pilot test with a group of Monterey customers using remote
technology that enables participants to receive real time water consumption data for their
residential water account on their smart phone. The technology can be used to set up an alert if
consumption is indicative of a water leak or if use increases. This allows customers the ability to
6
2009-0060
WRO
Order
Desist
and
Application for Order Modifying Cease
detect water leaks as they occur and to monitor their water use closely, further encouraging water
conservation.
2. CAW is Diligently Pursuing Development of a Primary Alternative
Water Supply
As directed by Order 95-10 and the Order, Petitioners have diligently pursued the
Monterey Peninsula Water Supply Project ("MPWSP"), which will produce the replacement
water supply necessary to eliminate unauthorized diversions from the Cannel River.
a. Application for Approval of114PWSP and Permittinz Activity

On April 23, 2012, CAW filed an application to the CPUC for approval of the MPWSP.
The 1VIPWSP includes the following components: (1) a desalination plant and associated sourcewater slant wells and conveyance system, which can produce up to 9,752 afa for system demand;
(2) an ASR project to store water lawfully diverted from the Cannel River in the Seaside
Groundwater Basin for subsequent recovery, with an expected long term average yield of 1,300
acre-feet annually; and possibly (3) a Groundwater Replenishment ("GWR_") project that could
treat recycled water and replenish up to 3,500 afa in the Seaside Basin. The GWR project is
being developed by the MPWMD and Monterey Regional Water Pollution Control Agency
("MRWPCA") and, if timely approved, could result in a down-sized desalination plant. The
Certificate of Public Convenience and Necessity ("CPCN"), approving the MPWSP, is
anticipated from the CPUC before the end of 2016.
Significant progress has been made on the MPWSP. CAW has undertaken and
continues to advance as many aspects of the project as can be done without regulatory permits.
In that regard, CAW acquired a 45-acre parcel of land near the City of Marina to serve as the
desalination plant site. CAW reached an agreement with CEMEX, Inc. that provides a
temporary easement to construct. and operate a test slant well as well as an option to purchase a
permanent easement for purposes of constructing and operating a full scale subsurface seawater
intake system. CAW has awarded a design-build contract to CDM Smith to construct the
desalination plant once all necessary permits have been obtained. CAW is also in the process of
7
conducting separate procurements to construct distribution system improvements and construct

the source water wells. These actions will expedite the construction of the MPWSP once all
regulatory agencies have issued their respective permits.
On April 30, 2015, the CPUC released its Draft Environmental Impact Report ('DEIR")
for the MPWSP pursuant to the California Environmental Quality Act ("CEQA"). The release of
the DEW began a 60-day public comment period, which was subsequently extended through
September 30, 2015. On September 8, 2015, the CPUC issued a statement that it will revise and
recirculate the MPWSP DEW as a joint DEIR/Draft Environmental Impact Statement ("DEIS").
The joint DEIR/DEIS will meet the requirements of the National Environmental Policy Act
("NEPA"), and will be coordinated with the Monterey Bay National Marine Sanctuary
("MBNMS") as the federal lead agency. MBNMS 's parent agency the National Oceanic and
Atmospheric Administration ("NOAA") published a Notice of Intent to Prepare Environmental
Impact Statement on August 26, 2015 under NEPA for the MPWSP and held a related scoping
meeting on September 10, 2015.
Substantial progress is also being made on the G'WR. component of the MPWSP. On
April 23, 2015, MPWMD and1VIRWP CA released a DEW for a 45-day public comment period
that closed on June 5, 2015. On October 8, 20151VIRWPCA certified its final EIR for the G'WR
project.
b. Senate Bill 936 for Partial Public Financing
In September 2014, Governor Jerry Brown signed Senate Bill (SB) 936, authored by
Senators Bill Monning and Anthony Cannella and Assemblymen Mark Stone and Luis Akjo.
This legislation allows the MPWSP to utilize partial public financing if it is available at a lower
rate than conventional, private project financing.
c. Test Slant Well Project
In addition, a new test slant well located on the CEMEX property in Marina, California
was completed in March 2015. The test well was put into long term operation on April 22, 2015.
Data from the test well and an associated network of monitoring wells is posted weekly on
8
2009-0060
WRO
Order
Desist
and
Cease
Application for Order Modifying
CAW 's MPWSP website (http://www.watersupplyproject.org,/). Preliminary test well results

have been promising and indicate that the test well is operating as designed. CAW and the
California Coastal Commission also successfully defended the Coastal Development Permits
underlying the test well in two separate lawsuits challenging their validity.
3. Petitioners Have Implemented Other Projects to Replace and Authorize
Carmel River Diversions

Petitioners have developed, permitted and implemented supplemental water supply
projects to reduce unauthorized Cannel River diversions. Petitioners have also facilitated or
supported efforts by other entities to complete multiple projects and water right transactions that
will permit beneficial uses within CAW' s service area.
a. Table 13 Water Rights

CAW pursued and satisfied the requirements under SWRCB Decision 1632 to obtain
additional appropriative water rights under SWRCB Permit 21330 to lawfully divert up to 1,488
afa from the Cannel River; subject to the same by-pass flow requirements as ASR water. In
Water Year 2014-2015, CAW was able to divert 42.2 AF under the Permit, and reduce
unauthorized diversions by an equal amount. 5
h. Pebble Beach Wastewater Reclamation Project

CAW has been a participant with PBC, the Cannel Area Wastewater District ("CAWD"),
the Pebble Beach Community Services District ("PBCSD"), and MPWMD in accomplishing
perhaps the most renowned golf course recycled water irrigation project in the country. The
CAWD-PBCSD Wastewater Reclamation Project (as it is known) treats wastewater at the
CAWD plant to a tertiary level, with advanced level micro-filtration which is then distributed by
PBCSD and MPWMD as recycled water to irrigate all of the Del Monte Forest golf courses. This
project is presently supplying an average of 1,000 afa of recycled water to the golf courses,
conserving that amount of diversions from the Cannel River. In addition to MPWWID's
Decision 1632 Condition 10 provides an opportunity for the persons named in Table 13 of Decision 1632 to obtain
a water right permit with a priority superior to the MPWMD's Permit 20808. Decision1632 delegates authority to
the Chief of the Division of Water Rights to modify the quantities identified in Table 13.
5
9
conservation programs, this project is one of the largest water saving projects operating on the
Monterey Peninsula. In return for its financial commitment (of which PBC has funded over $22
million in operating shortfalls and debt service) which made the project possible, PBC (with
other Del Monte Forest landowners) received the Pebble Beach Water Entitlement, which was
fully recognized in SWRCB Order WRO 2009-0060, as modified by Order WR 2010-0001.
a Additional Aquifer Storage and Recovery Capacity
As required by the Order, CAW and the MPWMD expanded the Cannel River ASR
Project to fulfill the Small Project requirement in Ordering Paragraph 3.a.(5). CAW and
1VIPWMD jointly hold water right Permit 20808C that allows for up to 2,900 afa to be diverted
from the Carmel River during periods of excess flow and then injected into the Seaside Basin as
part of the ASR program. 6 CAW and MPWMD have completed two new wells (ASR Wells #3
and #4) at the Seaside Middle School since the CDO was issued. The addition of ASR Well #3
gives CAW and MPWMD the ability to store and recover an expected long term average of more
than 500 afa, and was completed to satisfy Condition 5 of the CDO. The addition of ASR Well
#4 provides the opportunity for CAW and MP'WMD to realize an estimated additional 500 afa
available for diversion under the associated Permit.
d. Cannel River Floodplain Restoration and Environmental
Enhancement Protect and Interim Water Use Agreement
CAW supported and facilitated a water right change petition submitted by the Clint
Eastwood and Margaret Eastwood Trust ("Eastwood Trust") and approved by the SWRCB on
July 3, 2015 in Division Decision 2015-0001. This project includes a significant donation of land
by the Eastwood Trust to the Big Sur Land Trust as an important component of the Carmel River
Floodplain Restoration and Environmental Enhancement Project. The Cannel River Floodplain
Restoration and Environmental Enhancement Project will, among other potential things, restore
the historic floodplain and wetlands and improve flood protection in the lower Carmel River and
increase riparian habitat.
The "face" amount of Permit 20808C presumes Carmel River flows meet or exceed minimum instreatn flow
requirements each day of the 183-day diversion season and that diversions occur each day at the maximum
instantaneous rate allowed under the Permit.
6
10
2009-0060
WRO
Application for Order Modifying Cease and Desist Order
The Eastwood Trust agreed to permanently dedicate 46 afa of its existing water right to
instream flows, and to grant temporary use of up to 85 afa to assist CAW to reduce its
unauthorized diversions from the Carmel River. CAW and the Eastwood Trust expended
significant time and effort to complete this transaction and expect to begin replacing CAW
diversions with water available through the associated water right (License 13868A) in the
immediate near term. Based upon an agreement with the Eastwood Trust, the SWRCB has
ordered that all municipal water pumped under License 13868A during 2015 will be used to
offset CAW' s Cannel River Diversions, and that at least 50 af and 25 af will be used to assist
CAW to reduce its unauthorized diversions from the Cannel River in 2016 and 2017,
respectively. Until the MPWSP is brought online and unauthorized diversions from the Cannel
River eliminated, the agreement with the Eastwood Trust authorizes CAW to use all water under
License 13868A that is not used by Eastwood pursuant to the License amendment.
e.
Carmel River In stream Flow Enhancement Program
CAW has proposed to the SWRCB the Carmel River Instream Flow Enhancement
Program, whereby CAW will compensate Carmel River water rights holders to implement
conservation measures to reduce water diversions from the river in order to increase instream
flows for the benefit of fish and wildlife in the Carmel River. On September 8, 2015, CAW
submitted a Notice of Intent to Implement the Carmel River Flow Enhancement Program to the
SWRCB describing the proposed program which would temporarily modify the water users'
water rights to allow for the instream use of water in the Cannel River.
f
City ofPacific Grove Recycled Water Project
The City of Pacific Grove certified an DR for its Local Water Project to reduce irrigation
on the City's municipal golf course and El Carmelo Cemetery. MPWMD provided a feasibility
funding grant to assist planning this effort. Clean Water State Revolving Fund ("SRF") fmancing
for this effort was approved by the SWRCB on November 17,2015. The City expects to begin
construction during or before January 2016. CAW also has actively supported this project
throughout the proposal and approval process.
11
4. CAW and Petitioners have Implemented and Propose Additional

Measures to Enhance and Improve Conditions for Fish and Wildlife
Resources
Petitioners have permitted and implemented significant measures to enhance and improve
conditions for fish and wildlife resources in the Carmel River watershed, and to minimize and
avoid potential impacts to fish and wildlife during the extension period for the CDO sought
through this Application.
a. Funding for Carmel River Mitigation Projects
Pursuant to a 2009 agreement (amended in 2014) between CAW, the National Oceanic
and Atmospheric Administration (NOAA), and the California Department of Fish and Wildlife
("CDFW"), CAW made a one-time payment of $3.5 million in 2009, annual payments of $1.1.
million per year for 2010 through 2015, and has committed to make annual payments of $1.1
million per year through 2016 to the State Coastal Conservancy ("SCC") for environmental
protection and enhancement projects in the Cannel River watershed.
CAW' s s payments, which total $10.1 million to date, are being used to fund the
following significant projects, which are designed to mitigate the impacts of CAW's
unauthorized diversions and are identified by the SCC through ongoing consultations with the
NMPS, CDFW, and Cannel River stakeholders primarily through the Cannel River Task Force:
Removal of Old Carmel River Dam to facilitate fish passage;
Removal of Sleepy Hollow Ford to facilitate fish passage;
Restoration of Cannel River upstream of San Clemente Dam;
Sleepy Hollow Fish Rearing Facility Intake Improvements;
Cannel River Lagoon Large Wood Augmentation;
Cannel Lagoon Water Augmentation;
Cannel Lagoon Ecological Barrier;
Additional Fish Passage Barrier Removal;
Off-stream Storage of Excess Flows in Exchange for Forbearance of Summer Pumping;
12
WRO 2009-0060
Order
Desist
and
Application for Order Modifying Cease
Provided that NOAA and CAW mutually agree to terms for extending the 2009 agreement
described above, CAW will make additional annual payments of $1.1 million (pro-rated for any
partial years) until unpermitted diversions of water from the Cannel River are replaced by legal
sources of water for use on projects during the requested extension period for the CDO. Use of
these funds and administrative efforts will focus, with support of CAW and other Parties, on
projects that can be implemented during the extension period to mitigate potential effects of the
extension. MPWMD will use its best efforts and cooperate with NOAA, CDFW, SCC and the
Carmel River Steelhead Association, to identify, develop, and implement mitigation efforts that
benefit the Cannel River.
b. Cannel River Reroute and San Clemente Dam Removal Project
CAW also has permitted, financed and completed significant construction activities to reroute the Cannel River and remove the San Clemente Dam. The Carmel River Reroute and San
Clemente Dam Removal Project is the largest dam removal project in California history, and was
jointly developed and/or funded by the CAW, SCC, NOAA's National Marine Fisheries Service,
the Planning and Conservation League Foundation, and the Nature Conservancy. This
monumental and innovative project will:
Remove the 106 foot high San Clemente Dam and implement a watershed restoration
process that will bring the Cannel River back to life;
Provide unimpaired access to over 25 miles of essential spawning and rearing habitat,
thereby aiding in the recovery of threatened South-Central California Coast steelhead;
Restore the river's natural sediment flow, helping replenish sand on Carmel Beach and
improve habitat downstream of the dani for steelhead;
Re-establish a healthy connection between the lower Carmel River and the watershed
above San Clemente Dam;
Improve habitat for threatened California red-legged frogs;
Reduce beach erosion that contributes to destabilization of structures;
Provide a long-term solution to the public safety risk posed by the potential collapse of
13
the dam, which potentially threatens 1,500 homes and other public buildings in the event
of a large flood or earthquake;
The various construction activities that have been completed or are nearly completed to date
include: complete excavation of the re-route cut, nearly complete installation of the diversion
dike and the stabilized sediment slope, the complete demolition of San Clemente Dam itself and
the near completion of the new river channel that allows for fish passage. An additional
component of the project is the ultimate transfer of CAW property around San Clemente Dam to
the U.S. Department of Interior Bureau of Land Management, which will create additional open
space and habitat in the watershed.
a Los Padres Dam Downsheam Fish Passage Facilities
CAW and various stakeholders agreed to construct downstream fish passage facilities at
Los Padres Dam, located at approximately River Mile 24.8 on the Cannel River. CAW owns and
operates Los Padres Dam and has made various improvements to accommodate upstream fish
passage over the Dam. Currently, when lake elevations fall below the dam's spillway crest, no
downstream fish passage corridor exists. To improve downstream fish passage opportunities, the
following facilities will be constructed: behavioral guidance system, floating weir surface
collector, fish bypass conduit, bypass access portals, and bypass outfall. Construction of these
facilities began in the second quarter of 2015, and will be completed before November 26, 2015.
d. Los Padres Dam Long Term Planning Study
In its April 10, 2015 Decision Adopting the 2015, 2016, 2017 Revenue Requirement for
California-American Water Company, the CPUC authorized CAW to fund a study to determine
the ultimate disposition of the Los Padres Dam and its effects on thr Cannel River. CAW will
fund MPWMD to continue independently studying the fate of the Los Padres Dam, including
contribution from CAW of approximately $1.0 million to assist MEWMD. Studies will include
evaluating upstream steelhead passage at Los Padres Dam, whether the public trust resources of
the Cannel River will be adversely affected or enhanced by removal or alteration of Los Padres
Dam, what options exist to maintain physical existing surface storage in Los Padres Reservoir,
14
and analysis of the potential geomorphic effects of a resumption or increase of the natural flow
of sediment. In addition, CAW expects to work with MEWMD to develop the scope of work and
award the feasibility study to a qualified environmental consultant in the near future and
anticipates completing the study during 2018, CAW also will continue to fund mitigation
measures pursuant to MPWMD's current mitigation program through December 31, 2020.
e.
Commitment to Fund and Implement Additional Mitigation Projects
Upon SWRCB approval of this Application on terms substantially similar to those

requested herein, and subject to final approval from CDFW, NOAA, and other agencies with
permitting jurisdiction, CAW will implement up to $2 5 million in other projects on the Carmel
River to improve fish passage and habitat. These include, in order of priority and estimated costs:
additional spawning gravel injections below Los Padres reservoir ($0.2 million); improvements
to the existing upstream fish passage ladder and trap at Los Padres Dam ($0.2 million);
installation of a fish screen at the lower outlet pipe on Los Padres Dam ($0.8 million); a pit
tagging program ($0.8 million); and a through-reservoir survival study for Los Padres Reservoir
($0.5 million). Should the higher priority projects exceed the estimated amounts, funding will be
pulled from the lower priority projects until the entire $2,5 million is utilized. Additionally, the
estimated cost from the above projects may be used to supplement other related projects
occurring on the Cannel River (i.e., pit tagging work being contemplated by IVLEWMD),
B. Factors Beyond CAW's and Petitioners' Control Prevent Petitioners from
Achieving all CDO Conditions and Deadlines
The requested modifications are necessary because factors beyond CAW's and
Petitioners' control namely the failure of the Regional Desalination Project and delays in the
CPUC approval schedule for the MPWSP make it infeasible to complete the IVITWSP and
eliminate unauthorized Cannel River diversions within the current CDO schedule (i.e., by
December 31, 2016). Petitioners anticipate a final CPUC decision approving the 1WPWSP and
authorizing construction before the end of 2016. Once authorized, CAW expects to begin
construction of the MPWSP by mid-2017, and to begin producing potable water to replace
15
Carmel River diversions before the end of the requested extension period. Major infrastructure
projects of this size and scope are often subject to delays and litigation, but this anticipated
schedule reflects Petitioners' best judgment if delays are kept to a minimum.
Taking into account the commitments, efforts and accomplishments described above,
Petitioners request that the SWRCB modify the CDO as shown in Attachment 1. Petitioners'
make this request upon the express understanding and condition that the hearing record
developed and adduced before the SWRCB for Orders WRO 2009-0060 and WRO 2010-0001
are incorporated within the proceedings on this Application, for all purposes. Further, this
Application is made upon the express understanding and condition that Petitioners each shall
preserve, and not waive, their collective or individual rights to petition for relief from any
provision of the order amending and restating the CDO, for any reason, upon a claim that the
order amending and restating the CDO causes a threat to public health or safety or otherwise
jeopardizes the water supply for the Monterey Peninsula. Should the SWRCB consider adoption
of an order amending and restating the CDO on terms or conditions different from the Proposed
Order submitted as Attachment 1 to this Application, Petitioners request that the SWRCB not
take action thereon until Petitioners have been provided notice of the draft order not less than. 30
days prior to any meeting to adopt the order, and provided an opportunity to augment the record
of proceedings with respect to the Application.
IV.
Petitioners Request Assistance from the SVVRCB.
Taking into account the commitments, efforts and accomplishments described herein,
Petitioners request that the SWRCB commit to use reasonable efforts to assist Petitioners' efforts
to eliminate unauthorized Cannel River diversions as follows:
1. Support issuance of a CPCN from the CPUC and support CAW' s request(s) to the
California Coastal Commission and other agencies with permitting jurisdiction for
expedited permit issuance for the "Monterey Pipeline and other ASR related
improvements," which will facilitate increased ASR diversion during high flows and
other improved operations that will increase the amount of water in the Carmel River
16
2009-0060
WRO
Order
Application for Order Modifying Cease and Desist
during dry months;

2. Cooperate with the Parties' in efforts to secure from the SWRCB' s Division of Financial
Assistance a one percent (1.000%), thirty-year loan from the program announced March
19, 2014 for water recycling projects for the MPWMD/MRWPCA GWR project,
provided an application is submitted by December 2, 2015;
3. Cooperate with the Parties to secure prioritization of the MPWMD/MRWPCA GWR
grant request pursuant to Chapter 9 of AB 1471(2014 Proposition 1); and
4. Support, including expedited review of, water rights Application 32263 of Monterey
County Water Resources Agency, and any amendments thereto, to facilitate the
MYWMD/MRWPCA GWR project.
V.
Conclusion
For the reasons stated herein, Petitioners respectfully request modification of Order WRO
2009-0060 as set forth in Attachment 1.
[Remainder of Page Intentionally Blank]
17
Respectfully Submitted,
Dated:
5-
CALIFORNIA-AMER1CAN WATER COMPANY
By:
MONTEREY PENINSULA REGIONAL WATER

AUTHORITY
By:
MONTEREY PENINSULA WATER

MANAGEMENT DISTRICT
By:
PEBBLE BEACH COMPANY
CITY OF PACIFIC GROVE
By:
18
Application for Order Modifying Cease and Desist Order WRO 2009-0060 .
Dated:
(6t_
By:

AUTHORITY
By

MANAGEMENT DISTRICT
By:
By:
By:
18
Dated: ( t 1 4 .15
By:

AUTHORITY
By:

MANAGEMIST DATRICT
By:
By:
CITY OF PACIFIG GROVE
By:
18
Dated:
By:

AUTHORITY
By:

MANAGEMENT DISTRICT
By:
kri Ler
By:
443 491:4A/M40140
By:
18
Attachment 1
Attachment 1 to Application to Modify SWRCB Order WRO 2009-0060

PROPOSED ORDER AMENDING AND RESTATING ORDER WRO 2009-0060
NOW, THEREFORE, IT IS ORDERED THAT as of the effective date of this Order,' CalAm shall cease and desist from the unauthorized diversion of water from the Carmel
River in accordance with the following schedule and conditions.
1.
Cal-Am shall diligently implement actions to terminate its unlawful diversions from
the Carmel River and shall terminate all unlawful diversions from the river no later
than December 31, 2020. 2
2.
Cal-Am shall not divert water from the Carmel River for new service connections or for
any increased use of water at existing service addresses resulting from a change in
zoning or use. Cal-Am may supply water from the river for new service connections or
for any increased use at existing service addresses resulting from a change in zoning
or use after October 20, 2009, provided that any such service had obtained all
necessary written approvals required for project construction and connection to CalArres water system prior to that date.'
3.
Cal-Am shall adjust its diversions from the Carmel River in accordance with the
following:
a. Effective Diversion Limit. The limits set forth in this Condition 3.a., as may be
further reduced or increased pursuant to the terms and conditions of this Order, is
referred to as the "Effective Diversion Limit."
(1) Immediate Reduction: Commencing on October 1, 2015 (Water Year 20152016), the Effective Diversion Limit shall be 8,671 afa. 4
(2)
L
Annual Diversion Limits:

Water Year 2016 2017 Reduction. Commencing on October 1,2016
-
1 The effective date of this Order shall be the date of issuance. As of the effective "date, this Order shall supersede
the ordering provisions of State Water Board WRO 2009-0060. All other provisions of State Water Board WRO 20090060 and all other State Water Board orders concerning Cal-Am's diversions from the Carmel River shall remain in
effect until terminated by law or action of the State Water Board.
2 pal-Am lawfully diverts 3,376 afa under a legal basis of water right
3 Multiunit residential, commercial or industrial sites may currently be served by a single water meter. The
installation of additional meters at an existing service will not be viewed as a new service connection provided
that the additional metering does not result in an increase in water use.
4 Each Water Year runs from October Ito September 30 of the following year.

(Water Year 2016-2017) the Effective Diversion Limit shall be 8,310 afa,
and this Effective Diversion Limit shall be maintained through December
31, 2020 subject to the terms and conditions in this Order.
ii.
Seaside Groundwater Basin Limitations. The Effective Diversion

Limit shall not apply to any exceedance that Cal-Am, the Monterey
Peninsula Regional Water Authority ("MPRWA"), the Monterey
Peninsula Water Management District ("MPWMD") the Pebble Beach
Company ("PBC"), and for the City of Pacific Grove (collectively
"Petitioners") establish was necessary to meet reductions required by
mitigation measures imposed pursuant to the Seaside Basin
Watermaster's Seawater Intrusion Response Plan or by the court
pursuant to the Seaside Groundwater Basin Judgment in response to a
detection of seaWater intrusion within the Seaside Groundwater Basin.
iii.
Carryover: After October 1, 2015 if Cal-Am's actual diversions during a

given Water Year are less than the Effective Diversion Limit for that
Water Year, Cal-Am shall be credited for the difference between the
Effective Diversion Limit and Cal-Am's actual diversions. Any such
credit may be carried over to offset any exceedance of the Effective
Diversion Limit in future Water Years, subject to the restriction in
Paragraph 3.a.(2)(iv) below.
iv.
Cap on Carryover: Notwithstanding the provision on carryover in

Paragraph 3.a.(2)(iii), in any Water Year the sum of (a) Cal-Am's
diversions of non-ASIR. 5 water from the Carmel River and (b) water
recovered from ASR storage shall not exceed the Effective Diversion
Limit then in effect plus 750 afa.
("ASR') storage
6 "ASR water' means Carmel River water diverted to underground Aquifer Storage and Recovery
pursuant to State Water Board Permits 20808A and 20808C, as discussed in Paragraphs 3.a.(3), 3.c., and 4 of this
Order.
2

v.
Milestones: For purposes of calculating a reduction to the Effective
Diversion Limit, the following Milestones and Deadlines will apply;

Milestone
1. (WY
20162017)
Issuance of a Certificate of Public Convenience and

Necessity to Construct the Monterey Peninsula Water
Supply Project ("MPWSP") by the California Public
Utilities Commission.
2.(WY
Start of construction for any of the Cal-Am
2017Components of the MPWSP6 and/or the Pure Water
2018)
Monterey' project, meaning commencement of
physical work after issuance of required regulatory
permits and authorizations to begin worle.
3.(WY
(1) Drilling activity for at least one MPWSP source
2018water production well complete; (2) foundation and
2019)
structural framing complete for MPWSP pretreatment,
seawater reverse osmosis, and administration
buildings at desalination plant; (3) excavation
complete for MPWSP brine and backwash storage
basins; and (4) 25% of MPWSP transmission
pipelines installed based on total length 16 .
4.(WY
(1) 50% of drilling activity complete for MPWSP
2019source water production wells based on total number
2020)
of wells required; (2) mechanical systems for
MPWSP brine and backwash storage basins
complete; (3) Construction of MPWSP filtered water
tanks and finished water tanks complete; (4) 50% of
MPWSP transmission pipelines installed based on
total length, including 100% installation of the
"Monterey Pipeline and other ASR related
improvements" (See Footnote 9)
5.(WY
Substantial completion of the Cal-Am Components of
2020
the MPWSP, meaning the Cal-Am Components are
2021
sufficiently complete and appropriately permitted to
and
allow delivery of MPWSP produced potable water to
beyond) Cal-Am's Monterey Main system; eliminating further
Cal-Am diversions of Carmel River water without
valid basis of right
.
' Deadline
September 30, 2017
September 30, 2018
September 30, 2019
September 30, 2020
December 31, 2020
For purposes of this proposal the Cal-Am Components of the MPWSP include: source water production wells;
desalination plant; brine disposal system; and transmission pipelines.
7 The Pure Water Monterey project is a proposed advanced water recycling project, jointly developed by two public
agencies the MPWMD and the Monterey Regional Water Pollution Control Agency ("MRWPCA").
13 Such work may include, among other things, any of the following: desalination plant site grading and preparation;
electric utility installation; yard piping; subsurface excavation for structural foundations; transmission pipeline
Installation.
9 Not including the MPWSP Test Well completed in 2015.
io For transmission pipeline installation Cal-Am will prioritize installation of the "Monterey Pipeline and other ASR
related improvements," which will facilitate increased ASR diversion during high flows and other improved operations
that will increase the amount of water in the Carmel River during dry months,
3
6
vi.
Reductions to the Effective Diversion Limit Based on Missed

Milestones: The following reductions to the Effective Diversion Limit
shall apply if an applicable Milestone Deadline is not met:
Water Year
Oct. 1,2016
Sept. 30,2017
Oct. 1,2017
Sept. 30, 2018
Oct. 1, 2018
Sept. 30, 2019
Oct 1, 2019 .
Sept. 30, 2020
Oct. 1, 2020
Dec. 31, 2020
Milestone
Missed
Reduction in Effective Diversion Limit
1000 AFA
Date
Reduction
Assessed
Oct. 1, 2017
1000 AFA
Oct. 1,2018
1000 AFA
Oct. 1, 2019
1000 AFA
Oct. 1, 2020
1000 AFA
Dec. 31, 2020
If a Milestone is not achieved by its Deadline but is subsequently

achieved, the corresponding reduction to the Effective Diversion Limit
shall be reversed on the first day of the Water Year following
achievement of the Milestone. Once a Milestone has been achieved,
any corresponding reduction will not be assessed in subsequent Water
Years.
vii.
Illustration: The following table illustrates the effect of the reduction in

the Effective Diversion Limit over the term of this Order, and assumes
no Deadlines have been met and no carryover credits have been
applied under Paragraph 3.a.(2)(iii), and no additional water rights have
been obtained pursuant to Paragraph 6. The result is an elimination of
unauthorized diversions from the Carmel River on December 31, 2020.
Water Year
Oct. 1, 2015
Effective Diversion Limit if Milestones Missed,

No Credits Applied, No Additional Water
Rights Obtained
8,671 AFA
Sept. 30, 2016

4

Oct. 1, 2016
Sept. 30, 2017
Oct. 1,2017
Sept. 30, 2018
Oct. 1,2018
Sept. 30, 2019
Oct. 1,2019
Sept. 30, 2020
Oct. 1, 2020
Dec. 31, 2020
Thereafter
viii.
8,310 AFA
7,310 AFA
6,310 AFA
5,310 AFA
4,310 AFA
3,376 AFA
Joint Annual Report. At least 120 days prior to each Milestone

Deadline described in Condition 3.a.(2)(v), Petitioners shall submit a
joint report to the Deputy Director, Division of Water Rights, describing
progress towards that Milestone, whether Petitioners expect the
Milestone to be achieved by its Deadline and, if not, whether the
Milestone will be missed for reasons beyond Petitioners' control. Within
fifteen days of receiving the joint report by the Petitioners, the Deputy
Director, Division of Water Rights shall submit a Staff Report to the State
Water Board that attaches the joint report. Within 60 days of receipt of
the Staff Report, the State Water Board shall receive, at a regularly
scheduled meeting, written and oral reports from Petitioners, the Deputy
Director, Division of Water Rights, and the public on progress towards
Milestones. If Petitioners' joint report indicates that a Milestone is likely
to be missed, the State Water Board shall determine during that meeting
whether the cause for delay is beyond or within Petitioners' control. If the
State Water Board determines that the cause is beyond Petitioners'
control, it may suspend any corresponding reductions under Condition
3.a.(2)(vi) until such time as the Petitioners can reasonably control
progress towards the Milestone.
ix.
Status of Steelhead Fishery Report. During the extension period CAW

will provide funding in an amount not to exceed $175,000 per year for the
preparation of an annual report that evaluates the status of the
threatened South-Central California Coast Steelhead Distinct Population
Segment ("SCCC Steelhead DPS") in the Carmel River ("Status of
Steelhead Fishery Report"). Petitioners and various stakeholders agree

that, if possible, the annual Status of the Steelhead Fishery Report will be
prepared by the National Marine Fisheries Service ("NMFS") Southwest
Fisheries Science Center ("SWFSC"). Petitioners and various
stakeholders further agree that if NMFS West Coast Region finds a

significant change in the status of the SCCC Steelhead DPS since the
previous report (or, in the case of the first report, since the effective date
of this Order), NMFS West Coast Region may provide recommendations
for additional adaptive management measures to be taken with respect
to the SCCC Steelhead DPS in the Carmel River. If SWFSC cannot
complete the Status of the Steelhead Fishery Report for any or all years
during the extension period, Petitioners and other stakeholders will work
expeditiously and in good faith to designate another individual or entity
with requisite expertise to complete the report. If the NMFS West Coast
Region cannot review the Status of the Steelhead Fishery report in any
or all years, Petitioners and other stakeholders will work expeditiously
and in good faith to develop an alternative system for making adaptive
management recommendations. Petitioners, stakeholders, and the
preparer of the Status of the Steelhead Fishery Report will endeavor to
deliver the report in a cost effective and efficient manner, to share
resources, and to avoid duplication of effort to lower the cost of the report
to the extent practicable. The Status of the Steelhead Fishery Report and
any adaptive management recommendations shall be submitted to the
SWRCB by Petitioners each year with the corresponding joint annual
report.
(3) ASR Project: The amount of water diverted to underground storage under State
Water Board Permits 20808A and 20808C as of May 31 of each year shall be
included in Cal-Am's annual production of Carmel River water that is subject to
the Effective Diversion Limit, up to a maximum of 600 afa. On June 1 of each
year, Cal-Am shall submit an operating plan to the Deputy Director for Water
Rights specifying the quantity of water it intends to supply from the ASR Project
for its customers after May 31 of each year. As described in Paragraph 4
below, after the first 600 afa have been recovered in a given Water Year, the
6
Effective Diversion Limit for that Water Year shall be reduced by the amount of
ASR water recovered in that Water Year.
(4) Sand City Desalination Plant: Any volume of water that is produced by the Sand
City Desalination Plant and not served to persons residing within the City of Sand
City shall be subtracted from the Effective Diversion Limit for the Water Year in
which it is produced.
(5) Pebble Beach: Within 90 days following adoption of State Water Board Order
WRO 2009-0060, PBC certified, under penalty of perjury, the total quantity of
water annually used under its water entitlement from MPWMD (for the funding
assurances provided for the construction and expansion of the CAWD-PBCSD
wastewater reclamation project). This amount was 36.352 afa, Ten percent
(10%) of the amount reported, or 3.635 afa was to be added to the Effective
Diversion Limit to allow Cal-Am to divert water from the river to supply water for
PBC water entitlements initiated in the 12 months following adoption of State
Water Board Order WRO 2009-0060. Thereafter, PBC has annually submitted
and shall continue to annually submit, on September 30, a report to the Deputy
'Director for Water Rights accounting for any additional water that is diverted
from the Carmel River as the result of an increased use of its MPWMD water
entitlement. Increased diversions from the river by Cal-Am to satisfy PBC
entitlements from MPWMD shall be added to the Effective Diversion Limit, and
are not subject to Paragraph 2 of this Order. Water diverted from the river by
Cal-Am for PBC entitlements can only be served to properties that have
received a PBC entitlement from MPWMD and which are located in the CalArn's service area. After December 31, 2020, Cal-Am shall not illegally divert
water from the river to supply the holders of PBC entitlements.
(6) Supplemental Water Rights and Acquisitions: Provided Cal-Am is able to
identify suitable and willing transacting parties, Cal-Am will exercise
reasonable additional efforts to acquire supplemental Carmel River water
rights at acceptable costs, and/or will pursue other Carmel River water
acquisitions and water right changes in order to increase flows in the Carmel
River and decrease Cal-Arn's unauthorized Carmel River diversions ("Carmel
River Flow Enhancement Program"). Cal-Am will use best efforts to implement
7
Attachment 1 to Application to Modify SIAIRCB Order WM 2009-0060

the Carmel River Flow Enhancement Program to the extent it can negotiate
acceptable agreements with water right holders and provided participation will
not negatively affect the rights of potential participants. Such acquisitions or
water right changes may include leases and purchases of water rights along
the Carmel River on a temporary or permanent basis, and may include water
right change approvals or permits (permanent or temporary) from the State
Water Board to increase opportunities to increase lawful diversions or reduce
unauthorized diversions during periods of lower flow on the Carmel River. Fifty
percent of water available under any Carmel River water right that is acquired
by Cal-Am after the effective date of this Order shall be dedicated to instream
use, and the remaining fifty percent shall be used to increase the Effective
Diversion Limit in effect at the time a transaction is completed.
(7) Malpaso Water Company: Water provided on an interim basis by the Malpaso
Water Company LLC to Cal-Am under SWRCB License No. 13868A shall be
added to the Effective Diversion Limit for the Water Year in which the water is
provided to Cal-Am.
on for this Order modifying
(8) Additional Conservation Measures: In considerati
certain provisions of WRO 2009-0060, and subject to final approval from the
California Department of Fish and Wildlife, the National Oceanic and
Atmospheric Administration, and any other agencies with permitting jurisdiction,
Cal-Am shall implement $2.5 million in other projects on the Carmel River to
improve fish passage and habitat. These include, in order of priority and
estimated costs: additional spawning gravel injections below Los Padres Dam
using excess gravel from Los Padres reservoir ($0.2 million); improvements to
the existing upstream fish passage ladder and trap at Los Padres Dam ($0.2
million); installation of a fish screen at the lower outlet pipe on Los Padres Dam
($0.8 million); a pit tagging program ($0.8 million); and a through-reservoir
survival study for Los Padres Reservoir ($0.5 million). Should the higher priority
projects exceed the estimated amounts, funding will be applied from the lower
priority projects and utilized until the entire $2.5 million is exhausted.
Additionally, the estimated cost from the above projects may be used to
supplement other related projects occurring on the Carmel River.
(9) Los Padres Fish Passage. Cal-Am has committed to install of downstream fish
passage facilities at Los Padres Dam and will endeavor to do so before
December 31, 2015. Cal-Am will also endeavor to remove the Old Carmel
River Dam and the Sleepy Hollow Ford before September 30, 2017.
b. Either Cal-Am or the MPWMD may petition the State Water Board Deputy
Director for Water Rights for relief from reductions imposed under this Order. No
relief shall be granted unless all of the following conditions are met: (1) Cal-Am
continues the moratorium on new service connections pursuant to Water Code
section 350, and any orders from the PUC prohibiting new connections pursuant
to Public Utility Code section 2708, and the MPWMD continues a moratorium on
new service connections under its authority; (2) the demand for potable water by
Cal-Am customers meets all applicable conservation standards and
requirements; and (3) a showing is made that public health and safety will be
threatened if relief is not granted. Any relief granted shall remain in effect only as
long as a prohibition on new service connections remains in effect, and
compliance with applicable conservation standards and requirements remains in
effect.
c. ASR Project water stored in the Seaside groundwater basin under State Water
Board Permits 20808A and 20808C shall be used to mitigate the effect of CalAm's illegal diversions from the river. ASR water should be supplied to Cal-Am
customers only during months when water is most needed in the river to preserve
steelhead.
4.
Cal-Am shall reduce its illegal diversions from the river at the same rate ASR water is
recovered from the groundwater basin. After the first 600 afa have been recovered in
a given Water Year, the Effective Diversion Limit for that Water Year shall be
reduced by the actual amount of ASR water recovered in that Water Year.
5.
In State Water Board Order WRO 2009-0060, Cal-Am was required to implement one
or more small projects that, when taken together, totaled not less than 500 afa to
reduce unlawful diversions from the river. Cal-Am was required to identify to the
Deputy Director for Water Rights within 90 days of State Water Board Order WRO 20090060 the projects that it would implement, and to implement those projects within 24
9

months of entry of State Water Board Order WRO 2009-0060. Cal-Arn satisfied this
requirement by completing ASR Well #3. To the maximum practicable extent, Cal-Am
shall continue to operate this small project to reduce illegal diversions from the river
during the months when surface flow in the river begins to go dry and through the
months when surface flow in the river disappears below river mile 6.5.
6.
Cal-Am shall continue to post quarterly reports on its website and file the quarterly
reports with the Deputy Director for Water Rights. The quarterly reports shall include
the following:
a.
Monthly summaries of the quantity of water it diverts from the river.
b. Monthly summaries of the quantity of ASR project water diverted from the river
under State Water Board Permits 20808A and 20808C and stored in the Seaside
ground water basin. The monthly reporting shall also state the quantity of ASR
water recovered from aquifer storage, and the current balance of water in storage.
c.
Monthly summaries of the quantity of water being produced by the Sand City
desalination plant. The reporting shall identify new service connections within Sand
City and thereafter report the quantity of water being delivered to the new
connections. The monthly reports shall specify the quantity of water used to reduce
diversions from the river during the reporting period.
d. Monthly summaries of the quantity of water saved by reducing system tosses.

e. Monthly summaries of reductions in demand for potable water due to conservation
actions such as increased water rates, MPWMD's retrofit program, efforts to
f.
reduce potable water for outdoor water use and demand reduction initiatives.
Monthly summaries identifying all new service connections. The report shall
include the Cal-Am account number, the service address, the name of each
authority granting any approval required for connecting to Cal-Am's system and the
name of each authority granting any approval required before commencing
construction; the issuer of the each approval and the date of each approval shall
be separately listed for each service address.
that receive an
g. Monthly summaries identifying existing service addresses
increased supply of water due to a change in zoning or use. The report shall
include Cal-Am account number, the service address and the name of each
authority authorizing a change of use or of zoning and the date of such change.
10
h. Each quarterly report submitted by Cal-Am shall be certified under penalty

of perjury and shall include the following declaration: "/ declare under
penalty of perjury, under the laws of the State of California, that all
statements contained in this report and any accompanying documents are
true and correct, with full knowledge that all statements made in this report
are subject to investigation and that any false or dishonest statement may
be grounds for prosecution."
7.
Cal-Am shall file quarterly reports of its diversions under Paragraph 5 (small project) of
this Order.
8.
The Deputy Director for Water Rights is authorized to modify the timing and the content
of the reporting required by all of the provisions of this Order to more effectively carry
out the intent of this Order.
9.
As of its effective date, this Order supersedes the ordering provisions of State Water
Board Order WRO 2009-0060, but does not supersede or render moot any of the
analysis or discussion contained in State Water Board Order WRO 2009-0060. Cal-Am
shall comply with all requirements of State Water Board Order 95-10, except as modified
pursuant to State Water Board Order WRO 2009-0060 or this Order.
10.
The Deputy Director for Water Right's is directed to closely monitor Cal-Am's
compliance with Order 95-10 and this Order. Appropriate action shall be taken to
insure compliance with these Orders including the issuance of additional cease and
desist orders under Water Code section 1831, the imposition of administrative civil
liability under Water Code section 1055, and referral to the Attorney General under
Water Code section 1845 for injunctive relief and for civil liability. If additional
enforcement action becomes necessary, the Deputy Director is directed to consider
including in such actions all Cal-Am's violations of Water Code section 1052 since the
adoption of Order 95-10.
11.
The conditions of this Order and Order 95-10 shall remain in effect until (a) Cal-Am
certifies, with supporting documentation, that it has obtained a permanent supply of
water that has been substituted for the water illegally diverted from the Carmel River
and (b) the Deputy Director for Water Rights concurs, in writing, with the certification.
11
Attachment Ito Application to Modify S1A1RCB Order WRO 2009-0060

CE RTIFICATION
The undersigned Clerk to the Board does hereby certify that the foregoing is a full, true, and
correct copy of an order duly and regularly adopted at a meeting of the State Water
Resources Control Board held on
AYE:
NAY:
ABSENT:
ABSTAIN:
Clerk to the Board
12
Attachment 2
P LA NNITAi AND CuNsiIwATItN L FACi LI E
SIERRA
CLUB
0 N
I) T5i
November 19, 2015
Ms. Felicia Marcus,

Chair, State Water Resources Control Board
10011 Street
Sacramento CA 95814
Chair Marcus,
This letter transmits the comments of the Planning and Conservation League and the
Sierra Club on California American Water Company's Application to Modify SWRCB
Order WRO 2009-0600.
As you may know both PCL and the Sierra Club were active parties in the proceeding
that resulted in that 2009 Cease and Desist Order. We presented witnesses and provided
cross examination in that hearing. Additionally, the Sierra Club petitioned the Board in
1994 (through initiation of a complaint) to address both the legality of CAL-AM'S
diversions from the Cannel River and the decline of the steelh.ead population in the
River. Order 95-10 resulted from this complaint. Since the Board's issuance of the CDO
we have been working diligently with parties to obtain permits and ftmding for
alternative water supplies that will provide CAL-AM customers with alternative water
supplies.
It is now apparent that it will not be possible for CAL-AM to implement those alternative
water supplies in time for them to replace its illegal Carmel River diversions by the
deadline in the CDO, December 31, 2016,
We have been in discussions with CALAM, your staff and other parties as the deadline
for CDO compliance has approached. With one significant exception, we concur with
the latest draft Application dated November 19, 2015 that has been made available to us.
Our concurrence includes support for the time extension and the milestones that have
been proposed as triggers to demonstrate progress. We also concur with the proposed
funding for non-flow improvements to the habitat set forth in the application, and with
the proposal for adaptive management.
However there is one significant provision in CAL-AM's Application that would not be
consistent with the Board's public trust responsibilities. CAL-AM is proposing an
Effective Diversion Limit for water year 2015 2016 of 8,671 acre feet annually. It
would be reduced only slightly to 8,310 for the remaining term of the CDO extension.
That would be more than CALAM pumped in any of the past four years:
2011 2012
2012 2013
2013 2014
2014 2015
7,646 acre feet

8,007 acre feet
7,743 acre feet
7,228 acre feet
CAL-AM's proposed Effective Diversion Limit totally ignores the evidence that water
use by CAL-AM customers has been steadily decreasing. In water year 2014-2015 its
customers improved the efficiency of their water use so that their illegal diversions were
over 1,400 acre feet less than the amount CALAM is proposing. Furthermore that was
accomplished with no extraordinary financial or economic impacts to the users.
However the Cannel River steelhead have continued their precipitous decline. In 2013 2014 the steelhead fish count at San Clemente Dam was zero. In 2014 2015 it was only
7 fish. This year there were apparently no adult spawners returning below San Clemente
Dam, measured by the fish counting devices still in place.
In addition the overly high Effective Diversion Limit would result in a steep cliff in water
availability starting December 31, 2020 if alternative water supplies are not on line by
that date. Under their proposal even if all the milestones were missed they would still be
able to divert 5,310 acre feet of water in water year 2019 -2020, ending September 30,
2020. That would leave them only three months to reduce diversions down to their
legally permitted amount of 3,376 acre feet starting January 1,2021.
In light of the above we recommend that the Effective Diversion Limit be set at the
average of the three most recent water years. That equates to 7,659 acre feet. That would
provide CAL-AM some cushion over its water production in 2014-2015.
In addition, the Planning and Conservation League and the Sierra Club support the
current proposal's potential maximum credit of 750 acre feet. Under this provision the
amount of water diverted in any year less than the Effective Diversion Limit could be
carried over as an addition to the Effective Diversion Limit for the following year, The
amount of carryover credit could be up to 750 acre feet in any one year.
As you perform your public trust balancing responsibility, the impacts to the
steelhead from CALAM's proposed increase in diversion levels would outweigh any
economic or social impacts to water consumers (which have not been demonstrated).
Sincerely,
Jonas Minton,
Senior Water Policy Advisor, Planning and Conservation League
Rita Dalessio on behalf of the Ventana Chapter, Sierra Club

_
Larry Silver, Esq.

Counsel to Ventana Chapter, Sierra CIO
Carmel River Steelhead Association

501 (c)(3) TIN 77-0093979
P.O. Box 1183
Monterey, CA 93942
Barbara F.voy
Deprity Director. Division or Winer Rights
1001 1 Street
Sacramento, CA 9581 , 1
November I 8, 2015
RE: Application to Modify State Water Board Order 2009-0060 ((ease and Desist Order
Carmel River)
Dear Ms. l'voy
The Carmel Ri% et' Steel bead AucuiLion ((RSA I has been part or the stakeholders group
Nvorking with Cal Am on the request to extend WO 200)-0060. As a part or the group from the
bet2inning. CRS A recommends that the State Watei Board extend the Cease and Desist Order for
the l'our years requested,
1 have read the q- /1-15 letter addressed to you tilrfn M111011;11 Mai me Fisheries Service 1
agree in principal to their comment thni with the extension the fish will sutler further but they NV ill
VC. I 1.10, howe%er. red NMI'S did not analyze the request for extension in rehnionship to the
added mitigation Cal Am has agreed to do. to fully note the actual condition of the river. to give
accnrate rescue data. in to .gtve credit, to the loam other stakeholders volunteering lime to save the
Carmel River and its titeelhead.
At one or the early meetings with Cal Am_ the other stakeholders and your staff, 1 mudc the
point that the best thing for steelhend would he to slop all illegal pumping and the excessive
pumping to maintain water rights. Realizing that it is socially. economically and poi ideally
unrealistic for this to happen without a replacement water source and realizing even ifCal Am
reduced pumping significantly he river would still have problems, the second best thing would be
additional mitigation to help the lish during the extension and to help set the stage (Or recovery
\vile!' wale' is no longer ovcr-pumped from the rix er.
Cal Am has stepped up and promised to spend 2 2 million for mitigation above and beyond
the rollick spent or allocated in the NMI'S Cal Am settlement Rind agreement. I hree of the projects
promised in the extension proposal - the gravel injection below the recently removed Son Clemente
Writ the improvements cn the existing tish ladder and trap L'I'SA build in the late Ms., and the
installation of adequate fish screens Q11 the 1,os Padres Dam outlets - will have an immediate and
lusting benefit rot steelhend and all three projects will help i.educe the erects 01 the extension, in
fact. the NIVIFS letter mentions the mild screens as one thing that coul d
SteUlhead, Two
other projects - the pit lagging study mid the through-rLscrvoir survival study Jr Los Padres Dom
will sot the stage providing much needed information and put stakeholders in a belle' position to
help 'outland when water is restored.
CRSA believes these five additional mitigations will significantly reduce the impacts of
eNiending the Cease and Desist Order, file promised extensions, combined with the two projects
completed this year the removal or San Clemente Dam and the Los Padres Dam downstream fish
passage will put steelhead in a much better place going forward than they are now.
Another thing to consider is that the letter from NW'S did not mention the tributaries of the
Carmel River, and the Rio that most if not all tributaries now dry back every year. Ibis requires
CRSA to rescue thousands of ivy from them every year. To show the importance of the tributaries;
in two years CRSA rescued more small steelhead from Cachagua Creek than were rescued from the
main Carmel River. The drying back or the tributaries is the result or too ninny water users and
changes in land use on these tributaries and has nothing to do with Cal Am pumping. In fact, these
tributaries will still dry back when Cal Am is down to its legal limit of water. So while cutbacks in
pumping from the main Carmel River will greatly help, it will not fully restore the steelhead
population.
In conclusion and for the reasons listed above, CRSA supports extending WO 20N-0060.
Sincerely,
Lere
Brian LeNeve
President, Carmel River Steel hear! Association
ANTHONY LOMBARDO & ASSOCIATES

A PROFESSIONA,I, CONPORATION
ANTHONY L. LONIBAR
144W. GARILA_N STREET
KELLY MC CARTHY SUTHERLAND
' SALXNAS, CA 93901
MICHAEL A. CHURCHILL
(831) 751-2330
CODY J. PHILLIPS
FAX (831) 751-2331
November 17, 2015
Ms. Barbara Evoy

Deputy Director, Division of Water Rights
'State Water Resources Control Board
1001 I Street
Sacramento, CA 95g14
Re:
Application to Modify Terms of Cease and Desist Order
Dear Ms. Evoy:

As you may recall, our firm represents Quail Lodge, Cannel Valley Ranch Resort and Bemardus
Lodge which are plaintiffs in the litigation involving the Cease and Desist Order.
We have reviewed the proposal to modify the terms of the Cease and Desist Order which is
being presented to you by California American Water Company and my clients wholeheartedly
endorse the request contained therein.
If you have any further questions regarding my clients" position in this matter, please do not
hesitate to contact me.
Sincerely,
/;1494,4,
Anthony L. LoAbardb
ALL/gp
of Jason Burnett
January 22, 2016
Attachment 2
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of Jason Burnett
January 22, 2016
Attachment 3
EIJIJUNI1 G. ElliC6V14
Jri
daysvol
01.1
14
Water Boards
MATtlitLY RObtlIblArt
84COEIMY PII
rnOirellaif

January 22, 2016
Commissioner Catherine J.K. Sandoval

California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102-3298
Via U.S. Postal Service and Email: catherine.sandovalgcpuc.ca .qov
Subject: Letter of Support for Pure Water Monterey, Application No. 12-04-019 (filed April 23,
2013)
Dear Commissioner Sandoval:
The State Water Resources Control Board (State Water Board) is both very concerned about
and interested in a sustainable water supply for the Monterey Peninsula to eliminate existing
unlawful pumping from the Carmel River consistent with the State Water Board's Cease and
Desist Order (COO), State Water Board Order WR 2009-0060. I understand that several
public agencies and Cal-Am have chosen to support water recycling (Pure Water Monterey) as
part of the portfolio of water supplies under consideration by the California Public Utilities
Commission.
On November 30, 2015, the State Water Board approved a wastewater change petition for the
City of Salinas, that allows up to 4.67 million gallons per day (5,235 acre-feet per year) of
wastewater to be recycled and applied to two potential uses, one of which is municipal use in
the Cal-Am service area. This water must be used to offset deliveries of unlawful diversions
from the Carmel River by Cal-Am, unless the Executive Director of the State Water Board
grants permission to use the water for new uses in the service area. Additionally, it is my
understanding that the project will use wastewater that would not be subject to State Water
Board water right permitting requirements, because it Is currently discharged directly to the
ocean.
Allowing this water to be used in the Cal-Am service area by adding this portion of Pure Water
Monterey to the area's water portfolio makes sense because it would provide a lawful
alternative to illegal diversions from the Carmel River on a timeline anticipated to be faster
than that anticipated for the proposed desalination plant. State Water Board Order WR 20090060 requires that Cal-Am cease unlawful diversions at the end of December 2016. Cal-Am
has requested an extension of this deadline until December 31, 2020 that is currently under
consideration by the State Water Board. Any potential extension of the deadline, however, will
not solve the issue of continued impacts to the Carmel River.
Approval of this portion of Pure Water Monterey adds to the region's development of a diverse
water portfolio. The current drought emergency has underscored the pitfalls of relying on too
1- 11 CIA MAICI1S, GRAM I THOMAS HOWARD, EXECUTIVE DIRECTOR
1001 I StreeI, ancfamenla, CA 9581 ,1 I ivlaillog Addritcs: P.O. Bun 100, aduriinton14, Ca 95812-0100 I www.waltribustdg_co.nov
C:)
01.-1? A;(
-2-
January 22, 2016
few sources of water supply in many communities across the state. The project is in alignment
with the State Water Board's Recycled Water Policy, which encourages the maximum
substitution of recycled water for potable water by 2030.
Water rights for other portions of the Pure Water Monterrey Project are currently under review
at the State Water Board, and I can therefore not comment on them. The portion of Pure
Water Monterey Project approved by the State Water Board, however, advances state
mandates and policy objectives. If successful, it also demonstrates how multiple agencies can
work together to develop a water supply project that provides benefits to multiple stakeholders
and enhances environmental considerations.
I appreciate the opportunity to comment on the proceedings.
Sincerely,
(") Felicia Marcus

Chair
cc.
Administrative Law Judge Gary Weatherford,

505 Van Ness Avenue
San Francisco, CA 94102-3298
Via U.S. Postal Service and Email: gw2espuc.ca.qov
Attn: President Jason Burnett
735 Pacific Street
Monterey, CA 93940
Via U.S. Postal Service and Email: iason_burnettRomailcom
Monterey Peninsula Water Management District
Attn: David StoIdt, General Manager
5 Harris Court, Building G, P.0, Box 85
Monterey, CA 93942
Monterey Regional Water Pollution Control Agency
Attn: Paul Sciuto, General Manager
5 Harris Court, Bldg D
Monterey, CA 93940
California American Water Company
Attn: President Robert MacLean
1033 B Ave Ste 200
Coronado, CA 92116
-3Office of Ratepayer Advocates

Attn: Linda Serizawa, Deputy Director
505 Van Ness Avenue
San Francisco, CA 94102
January 22, 2016
CERTIFICATE OF SERVICE
1 hereby certify that I have this day served a copy of the SUPPLEMENTAL
TESTIMONY OF JASON BURNETT on all parties of record in A.12-04-019 by electronic mail.
Executed on January 22, 2016, at Santa Barbara, California.
ts/ Gina Lane

Gina Lane
BROWNSTEIN HYATT FARBER

SCHRECK, LLP
1020 State Street
Telephone: (805) 963-7000
Facsimile: (805) 965-4333
Email: GLanerelbhfs.com
015621\0002\10703327,1
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f\
ght.:
_2,
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PROCEEDING: A1204019 - CAL-AM WATER CO. - F
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LAST CHANGED: JANUARY 21, 2016
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MICHAEL WARBURTON
EXEC. DIR.
THE PUBLIC TRUST ALLIANCE
EMAIL ONLY
EMAIL ONLY, CA 00000
FOR: THE PUBLIC TRUST ALLIANCE
DARREN M. FRANKLIN
ATTORNEY
SHEPPARD, MULLIN, RICHTER & HAMPTON LL?
333 SOUTH HOPE ST., 43RD FL.
LOS ANGELES, CA 90071-1422
FOR: GEOSOIENCE SUPPORT SERVICES, INC.
RUSSELL M. MCGLOTHLIN
1020 STATE STREET
SANTA BARBARA, CA 93101
FOR: MONTEREY PENINSULA REGIONAL WATER
AUTHORITY
NORMAN C. GROOT
MONTEREY COUNTY FARM BUREAU
PO BOX 1449 / 931 BLANCO CIRCLE
SALINAS, CA 93902-1449
FOR: MONTEREY COUNTY FARM BUREAU
RON WEITZMAN
PRESIDENT
WATER PLUS
PO BOX 146
CARMEL, CA 93921
FOR: WATER PLUS
BOB MCKENZIE
WATER ISSUES CONSULTANT
COALITION OF PENINSULA BUSINESSES
PO BOX 223542
CARMEL, CA 93922
FOR: COALITION OF PENINSULA BUSINESSES
NANCY ISAKSON
PRESIDENT
SALINAS VALLEY WATER COALITION
3203 PLAYA COURT
MARINA, CA 93933
FOR: SALINAS VALLEY WATER COALITION
(SVWC)
GEORGE T. RILEY
MANAGING DIRECTOR
PUBLIC WATER NOW
1198 CASTRO ROAD
MONTEREY, CA 93940
FOR: PUBLIC WATER NOW
ROBERT WELLINGTON
WELLINGTON LAW OFFICES
857 CASS STREET, STE. D
MONTEREY, CA 93940
THOMAS FRUTCHEY
CITY MANAGER
300 FOREST AVENUE
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FOR: MONTEREY REGIONAL WATER POLLUTION
CONTROL AGENCY (MRWPCA)
PACIFIC GROVE, CA 93950

FOR: CITY OF PACIFIC GROVE
DAVID C. LAREDO
ATTORNEY
DE LAY & LAREDO
606 FOREST AVENUE
PACIFIC GROVE, CA 93950-4221
FOR: MONTEREY PENINSULA WATER
MANAGEMENT DISTRICT (MPWMD)
CARLOS RAMOS
1048 BROADWAY AVENUE
SEASIDE, CA 93955
FOR: LATINO WATER-USE
COALITION-MONTEREY PENINSULA/LATINO
SEASIDE MERCHANTS ASSOC./COMMUNIDAD EN
ACC ION
LAURA HORTON
ADAMS BROADWELL JOSEPH & CARDOZO
601 GATEWAY BLVD., STE. 1000
SOUTH SAN FRANCISCO, CA 94080
FOR: CALIFORNIA UNIONS FOR RELIABLE
ENERGY (CURE)
GABRIEL M.B. ROSS

ATTORNEY
SHUTE, MIHALY & WEINBERGER LLP
396 HAYES STREET
SAN FRANCISCO, CA 94102
FOR: SURFRIDER FOUNDATION
JOHN H. FARROW
M.R. WOLFE & ASSOCIATES, P.C.
555 SUTTER STREET, SUITE 405
FOR: LANDWATCH MONTEREY COUNTY
JOHN REYNOLDS
CALIF PUBLIC UTILITIES COMMISSION
COMMISSIONER RETERMAN
ROOM 5133
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3214
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MARK FOGELMAN, ESQ.

COUNSEL
FRIEDMAN & SPRINGWATER LLP
350 SANSOME STREET, SUITE 210
FOR: MARINA COAST WATER DISTRICT
SARAH E. LEEPER
ATTORNEY
CALIFORNIA AMERICAN WATER COMPANY
555 MONTGOMERY ST., STE. 816
FOR: CALIFORNIA-AMERICAN WATER COMPANY
LAURENS H. SILVER
ATTORNEY
CALIFORNIA ENVIRONMENT LAW PROJECT
PO BOX 667
MILL VALLEY, CA 94942
FOR: SIERRA CLUB
DAN L. CARROLL
ATTORNEY AT LAW
DOWNEY BRAND, IL?
621 CAPITOL MALL, 18TH FLOOR
SACRAMENTO, CA 95814
FOR: COUNTY OF MONTEREY / MONTEREY
COUNTY WATER RESOURCES AGENCY
JONAS MINTON
WATER POLICY ADVISOR
PLANNING AND CONSERVATION LEAGUE
1107 - 9TH STREET, SUITE 901
SACRAMENTO, CA 95814-3618
FOR: PLANNING AND CONSERVATION LEAGUE
Information Only
11 .1
JOE GEEVER
WATER PROGRAMS MANAGER
SURFRIDER FOUNDATION
EMAIL ONLY
KAREN GRIMMER
NATINAL OCEANIC & ATMOSPHERIC ADMIN.
EMAIL ONLY
LINDA MINKY
BROWNSTEIN HYATT FARBER & SCHRECK
EMAIL ONLY
SARAH DAMRON
EMAIL ONLY
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EXECUTIVE DIVISION
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DON EVANS
MCWO
8550 WEST CHARLESTON, STE. 102-394
LAS VEGAS, NV 89117
DENNIS E. WILLIAMS
PRESIDENT
GEOSCIENCE SUPPORT SERVICES, INC.
PO BOX 220
CLAREMONT, CA 91711
JAN DRISCOLL
ATTORNEY AT LAW
ALLEN MATKINS LECK GAMBLE MALLORY NATSIS
501 W. BROADWAY, 15TH FLOOR
SAN DIEGO, CA 92101
ANTHONY J. CERASUOLO
1033 B AVENUE,STE. 200
SAN DIEGO, CA 92118
KEVIN TILDEN
1033 B AVENUE, SUITE 200
CORONADO, CA 92118
ROBERT G. MACLEAN
PRESIDENT
CORONADO, CA 92118
PAUL L. FINDLEY
RBF CONSUILTING
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SAN DIEGO, CA 92124
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PERKINS & COIE LLP
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BHFS
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21 EAST CARRILLO STREET
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ATTORNEY AT LAW
DE LAY & LAREDO
389 PRINCETON AVENUE
MANAGEMENT DISTRICT
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COUNTY OF MONTEREY
168 WEST ALISAL ST., 3RD FLR
SALINAS, CA 93901
AMY WHITE
LANDWATCH MONTEREY COUNTY
PO BOX 1876
SALINAS, CA 93902
DAVID E. CHARDAVOYNE
GENERAL MANAGER
MONTEREY COUNTY WATER RESOURCES AGENCY
PO BOX 930
SALINAS, CA 93902
JANET BRENNAN
PO BOX 1876
SALINAS, CA 93902
JULIE ENGELL
PO BOX 1876
SALINAS, CA 93902
LLOYD W. LOWREY, JR.

NOLAND, HAMERLY, ETIENNE & HOSS
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JOLAND HAMERLY ETIENNE & HOSS
PO BPX 2510
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JASON K. BURNETT
MONTEREY PENINSULA REGIONAL WATER AUTH
PO BOX 7202
CARMEL, CA 93921
OFFICE MANAGER
PO DRAWER 2670
GREENFIELD, CA 93927
JAMES HEITZMAN
GENERAL MANAGER
MARINA COAST WATER DISTRICT
11 RESERVATION RD
MARINA, CA 93933
JAN SHRINER
MARINA COAST WATAER DISTRICT
11 RESERVATION ROAD
MARINA, CA 93933
BRIDGET HOOVER
DIR - WATER QUALITY PROTECTION
MONTEREY BAY NATIONAL MARINE SANCTUARY
99 PACIFIC STREET, BLDG. 455
MONTEREY, CA 93940
KEITH ISRAEL
GENERAL MGR.
MONTEREY REGIONAL WATER POLLUTION
5 HARRIS COURT, BLDG. D
MONTEREY, CA 93940
PAUL SCIUTO
MONTEREY REGN'L. WTR. POLLUTION CONTROL
5 HARRIS CT., BLDG D
MONTEREY, CA 93940
DAVID STOLDT
GEN. MGR.
MONTEREY PENINSULA WATER MNGMNT. DIST.
PO BOX 85
MONTEREY, CA 93942-0085
ANTHONY J. TERSOL
SURFRIDER FOUNDATION - MONTEREY CHAPTER
319 FOREST AVE.
CATHERINE BOWIE
511 FOREST LODGE ROAD, SUITE 100
MONTEREY, CA 93950
HEIDI A.. QUINN

DE LAY & LAREDO
606 FOREST AVENUE
MICHAEL BOWHAY
MONTEREY PENINSULA COUNTRY CLUB
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PEBBLE BEACH, CA 93953-2090
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ROSSMANN AND MOORE, LLP
380 HAYES STREET
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BURKE, WILLIAMS & SORENSEN
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CYNTHIA RUSSELL
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ATTORNEY AT LAW
NOSSAMAN LLP
50 CALIFORNIA STREET, 34TH FLR
NICHOLAS A. SUBIAS, ESQ.

CORP. COUNSEL
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VIDHYA PRABHAKARAN
DAVIS WRIGHT & TREMAINE LIP
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FOR CITY OF PACIFIC GROVE
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BREZACK & ASSOCIATES PLANNING
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WALNUT CREEK, CA 94598
ERIC ROBINSON
ATTORNEY
KRONICK MOSKOVITZ TIEDERMANN & GIRARD
FOR SALINAS VALLEY WATER COALITION
(SVWC)
SCOTT BLAISING
ATTORNEY
BRAUN BLAISING MCLAUGHLIN & SMITH, P.C.
915 L STREET, STE. 1270
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505 VAN NESS AVENUE
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505 VAN NESS AVENUE
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CPUC Service Lists - A1204019

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TESTER MONO
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COMMUNICATIONS AND WATER POLICY BRANCH
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505 VAN NESS AVENUE
SAN FRANCISCO, CA
94102-3214

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ROOM 5220
505 VAN NESS AVENUE
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LEGAL DIVISION
ROOM 5029
505 VAN NESS AVENUE
MICHAEL EELAEO
INFRASTRUCTURE PLANNING AND PERMITTING B
AREA
505 VAN NESS AVENUE
PETER V. ALIEN
RAVI KUMRA
CALIF PUBLIC UTILITIES
CALIF PUBLIC
SAFETY AND ENFORCEMENT DIVISION

ROOM 2206
505 VAN NESS AVENUE
COMMISSION
WATER AND SEWER ADVISORY BRANCH
AREA 3-C
$05 VAN NESS AVENUE
SARAN R. THOMAS
LEGAL DIVISION
ROOM 5033
505 VAN NESS AVENUE
SAN FRANCISCO, CA
94102-3214
STEPHEN ST. MARIE

SUZIE ROSE
TERENCE SHIA
AREA
505 VAN MESS AVENUE

ROOM 4208
505 VAN NESS AVENUE
POLICY & PLANNING DIVISION

ROOM 5119
505 VAN NESS AVENUE

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1/22/2016
BEFORE TBE PUBLIC UTILITIES COMMISSION

In the Matter of Application of CaliforniaAmerican Water Company (LT210W) for

A.12-04-019
DIRECT TESTIMONY OF AL PRESTON, Ph.D., FL
RUSSELL M. MCGLOTHLIN (SBN 208826)

JENA R. SHOA.F (SBN 296060)
BROWN-STEIN HYATT FARBER SCITRECK, LLP
1020 State Street
Telephone: (805) 963-7000
Facsimile: (805) 965-4333
Email: nricglothlin@bhfs.com; jshoaf@bhfs.eorn
Attorneys for;
AUTHORITY
Dated: January 22, 2016

In the Matter of Application of California
American Water Company (U210W) for
A.12-04-019
TABLE OF CONTENTS
I.
Introduction
IL
Determining Natural Background Salinity
III.
V.
Monitoring Locations
Monitoring and Retrieval Frequency
VI.
Mitigation Measures
DIRECT TESTIMONY OF AL PRESTON, Ph.D., P.E.

I.
Introduction
Ql: Please state your name and business address.

Al: My name is Al Preston. My business address is 448 South Hill Street, Los Angeles, CA
90013.
Q2: By whom are you employed and in what capacity?
A2: I am employed by Geosyntec Consultants Inc., as a Senior Water Resources Engineer.
Q3: What are your responsibilities at Geosyntec Consultants Inc.?
A3: I manage water resource engineering and modeling projects, including client interaction,
budgets and staffmg, as well as directly performing technical analysis and modeling. I provide
direction and senior review of technical work performed by others including quality assurance of
modeling results and reports.
Q4: Briefly describe your educational background.
A4: I have a Bachelors of Civil Engineering and Masters of Mechanical Engineering from the
University of Canterbury in New Zealand, and a Masters of Civil Engineering and Ph.D. in
Mechanical Engineering (computational fluid dynamics) from the California Institute of
Technology.
Q5:
Please describe your professional experience.
A5: I am a licensed Professional Civil Engineer in the State of California, and have over 14
years of experience in computational fluid dynamics and hydrodynamic and surface water
quality modeling. I have primarily worked on three-dimensional hydrodynamic simulations and
water quality modeling of lakes, reservoirs, rivers, and coastal ocean waters. I have conducted,
led, and managed modeling projects to evaluate mixing and dispersion of desalination brine
discharges, assess thermal discharges in rivers, situate new drinking water intakes, examine the
effects of diffuser discharges, determine water quality of expanded reservoirs, track
contaminants through lakes and rivers, and investigated the effects of climate change. My clients
are typically water authorities and have included, Metropolitan Water District of Southern
California, Southern Nevada Water Authority, Contra Costa Water District, and San Diego
Public Utilities Department. I also managed the subsurface seawater intake feasibility study for
West Basin Municipal Water District's proposed desalination plant at El Segundo, CA.
Q6: Have you testified before the California Public Utilities Commission ("CPUC")?
A6: No.
Q7: What is the purpose of your testimony?
A7: The purpose of my testimony is to provide my professional opinion as to the
appropriateness of the Tem' Sheet (Exhibit A) that certain parties have prepared as an outline of
a proposed settlement. The settlement would resolve concerns related to using the Monterey
Regional Water Pollution Control Agency ("PCA") outfall to discharge brine from the Monterey
Regional Water Supply Project ("MRWSP" or "Project") desalination facility proposed for
development by the California American Water Company ("Cal-Am"). Factors considered in
my opinion include monitoring protocol, ability to determine compliance with the Ocean Plan,
and the technical feasibility of potential mitigation options.
Q8: Can you please describe your involvement with the Project to date?
A8: I was originally retained in May 2015 by Separation Processes Incorporated ("SPI") on
behalf of the Monterey Peninsula Regional Water Authority ("MPRWA") to evaluate the EIR
report and modeling conducted to examine the brine discharge for the Project. More recently,
since December 2015, I have been retained by SPI on behalf of MPRWA to be involved in
technical discussions with the expert, Craig Jones, retained by Surfrider Foundation regarding
development of the Term Sheet, as well as regularly engaging with representatives from Cal-Am,
Monterey Regional Water Pollution Control Agency, and the Surfrider Foundation. While the
Term Sheet is not a complete or final settlement agreement, there exists substantial agreement
between the parties involved concerning the terms and I anticipate that the parties should be able
reach agreement on terms substantially similar to those set forth in the Term Sheet.
Q9: Does the Term Sheet set forth an appropriate approach to monitor salinity concentrations
and dilution in relation to the Project for compliance with the Ocean Plan?
A9: Yes, it is my professional judgment that the Term Sheet describes monitoring protocol
that will be sufficient to monitor salinity changes due to the brine discharge and to determine
compliance with the Ocean Plan, as well as outlining appropriate mitigation steps to be taken
should non-compliance be determined.
Q10: In your professional opinion, will the brine discharge be in compliance with the Ocean
Plan salinity limitation?
A10: The modeling analyses of the Project's anticipated brine discharge and dilution that I
previously reviewed were appropriate, but did use numerous conservative assumptions that likely
under-estimate the mixing and dilution that will actually occur once the Project is operational.
These include the following assumptions made in the near-field analyses: circular diffuser ports
(instead of oval); use of minimum height above sea-floor instead of average height; neglect of
additional near-field dilution after plume impacts sea-floor; and the following assumptions made
in the far-field analyses: neglect of vertical mixing in the far-field, neglect of waves, neglect of
gravity currents, and use of low-end lateral diffusion coefficient More recently it has been
brought to my attention that internal waves within Monterey Bay can also lead to substantial
near-shore mixing, and this additional mixing was also neglected in the modeling.
Given the modeling analyses performed, including the many conservative assumptions listed
above, coupled with the monitoring protocol described in the Term Sheet, it is my professional
opinion that the brine discharge will be in compliance with the Ocean Plan salinity limitations
and that this will be adequately demonstrated by the proposed monitoring described in the Term
Sheet, if implemented.
Q11: Please summarize the key facets of the Term Sheet and explain why they are appropriate?
All: The primary goal of the Term Sheet is to monitor and confirm that the marine
environment is protected through appropriate dilution of the brine generated and discharged from
the Project, and to provide for mitigation if the currently-proposed outfall approach proves
insufficient for such protection. The Term Sheet proposes the implementation of a monitoring
3
protocol that would confirm that the Ocean Plan salinity limitations are satisfied, and would
provide appropriate mitigation measures should monitoring detelmine non-compliance. The
Ocean Plan specifies that salinity should not exceed 2.0 parts per thousand (ppt) above "natural
background salinity" measured no further than 100 meters (m) horizontally from the discharge.
Determining Natural Background Salinity
Q12: How does the Term Sheet propose that the natural background salinity be monitored and
why is the approach appropriate?
Al2: Due to an apparent lack of long-term (i.e., 20 years or more) data in close proximity to
the discharge location, the Term Sheet specifies that a reference location be used to measure the
natural background salinity. This approach allows for monitoring natural changes in salinity that
occur over seasonal and decadal time-scales. The Term Sheet specifies a reference location
1,000 m to the north of the discharge and at the same depth/elevation as the discharge. It is
anticipated that this location will be far enough away from the discharge to be not influenced by
the salinity discharge. In particular, since it is at the same elevation as the discharge it will not
be affected by a density current, which would typically move downslope. In addition, any longshore transport of the salinity discharge toward the reference location would be highly
dispersive. Thus, this location is appropriate to use to measure the natural background salinity.
In
Monitoring Locations
Q13: How does the Term Sheet propose that compliance with the Ocean Plan be measured and
why is the approach appropriate?
A13: The Term Sheet specifies that salinity measurements will be made on the seafloor at a
location 100 m downslope of the discharge, and compared to the measurements at the reference
location in order to determine compliance with the Ocean Plan. This location is appropriate
since it is consistent with the 100 m distance specified in the Ocean Plan and is located
downslope where the highest salinities are expected to occur (e.g., due to possible density
currents travelling downslope).
Q14: Does the Term Sheet propose monitoring of salinity at additional locations?
A14: The Term Sheet also specifies that additional salinity measurements will be made 10 m
and 1000 m downslope of the discharge. These measurements will provide insight into the near
field mixing as well as the evolution and movement of the brine discharge plume in the far field,
including monitoring of potential density currents if they exist.
IV.
Monitoring and Retrieval Frequency
Q15: Please describe the process for taking measurements of salinity in the locations the Term
Sheet recommend that salinity measurements be taken and how often will the probes be retrieved
and recalibrated?
A15: The Term Sheet specifies that salinity measurements will be made continuously (likely to
be every 15 to 60 minutes) via probes permanently installed at each of the three monitoring
locations (described above) and at the natural background salinity reference location. These
measurements will be retrieved on monthly boat trips, at which time the probes will be checked
and recalibrated and additional measurements of vertical salinity profiles (i.e., measurements of
salinity made throughout the water column) will be made.
Q16: Do you conclude that this approach is comprehensive to ensure compliance with the
Ocean Plan?
A16: This high frequency salinity monitoring is a thoroughly comprehensive approach and will
enable compliance with the Ocean Plan to be verified and provide additional insight into any
temporal variation of salinities both in the natural background and due to the brine discharge.
Furthermore, the vertical profiles collected monthly will provide additional information on the
vertical mixing of the brine discharge and whether a density current may occur under certain
conditions.
V.
Mitigation Measures
Q17: Please describe the available mitigation options set forth in the Term Sheet.
A17: The Term Sheet outlines different mitigation options that could be implemented should it
be determined that the brine discharge is in non-compliance. These include retrofitting of
existing diffuser ports and construction of a new diffuser structure, both of which are technically
5
appropriate options that can increase the initial dilution of the brine discharge. The language in
the Term Sheet is flexible with respect to what the exact mitigation strategy will be, which is
appropriate given that the best strategy will likely depend upon how much additional dilution
will be required and also may change in the future as different technologies are developed.
Q18: Does this conclude your testimony?
A18: Yes.
Direct Testimony of
Al Preston, Ph.b.,
January 22, 2016
Exhibit A
1/21/2016
BEIN,LUTTLEMENT TERM SHEET (A.12-04-0191

California-American Water ("Cal-Am"), Surfrider Foundation, the Monterey
Peninsula Regional Water Authority, the Monterey Regional Water Pollution Control
Agency, the Monterey Peninsula Water Management District. and [insert] ("the
Parties") have prepared this Term Sheet to facilitate discussions to resolve
contested issues relating to brine discharge impacts from Cal-Ames Monterey
Peninsula Water Supply Project ("lvIPWSP" or "the Project") into the Monterey Bay
National Marine Sanctuary ("Sanctuary"). The Parties agree to negotiate appropriate
binding agreements on the terms described below. The terms represent
compromises that the Parties intend to resolve the Parties' disputes in front of the
California Public Utilities Commission ("PUC") with respect to the Project's brine
discharge impacts. This Term Sheet, however, does not constitute a binding agreement,
covenant, or condition with respect to the issue of brine discharge.
TERMS .
1.
Agreement to Not Oppose Brine Discharge

Surfrider Foundation will not oppose in puc proceeding A.12.04.019
("Proceeding") the use of the Monterey Regional Water Pollution Control
Agency ("PCA") outfall to discharge brine from the MPWSP desalination
facility, as currently proposed in the Proceeding, so long as all other terms
and conditions specified herein are agreed to arid met. Surfrider Foundation
reserves the right to support or oppose other potential MPWSP brine
discharge locations, including locations that have been identified as
contingencies or alternatives in the Proceeding. The Parties agree to defend
and support the settlement to be developed from this Term Sheet in any
administrative or judicial proceeding concerning the settlement and/or CalAm's obligati* and responsibilities with respect to the brine monitoring
arid mitigation,
2.
Monitoring Program
Cal-Am agrees to monitor the MPWSP's brine discharges as follows:
2.1
Monitoring and Data Collection
Starting at least one year prior to the first discharge of the Project's
brine into the Sanctuary and continuing throughout the life of the
Project, Cal-Am shall continuously monitor the presence of brine
constituents in the water column, including without limitation salinity
levels, from at least four monitoring locations including: (1) 10 meters
downslope of the outfall, which is intended to measure effects within
and near the Zone of Initial Dilution ("ZID"); (2) 100 meters
1
CONFIDENTIAL SETTLEMENT COMMUNICATION
(Rule of Practice and Procedure 12.6)
1/21/2016
downslope of the outfall, which is the compliance point; (3) 1000
meters downslope of the (Aldan, intended to measure far-field effects,
and (4) 1000 meters north of the outfall, and along the same
elevation contour as the outfall, which is intended to measure
conditions without the influence of the outfall (the "Reference
Location"). The vertical profiling described in Section 2.1.a below will
used to validate the Reference Location: if review of the vertical
profiling shows evidence that the Reference Location may be
influenced by the outfall, the Parties will agree og a new Reference
Location. Any of these four monitoring locations may be revised
during or after the first year of pre-Project operations monitoring
should monitoring data indicate unusual behavior at any monitoring
site.
Data from these locations Will be retrieved initially on
a.
. a
monthly basis before Project operations. During each data collection,
the salinity probe will be checked and re calibrated The amount of
re-calibration required will be recorded, and used to inform potential
less-frequent future sampling protocol:, After probe re-calibration, a
vertical salinity profile will be measured at each location.
Following commencement of Project operations, monitoring
b.
data shall be collected atTegular ,bimonthly intervals. The calibration
and vertical profile protoOls . deScribedirninediately above will be
followed at each data colledtion. Data will be analyzed, shared with
the Parties and the PUC, and posted online.
The frequency of data collection will be reconsidered at the
c.
of full-capacity Project
later of two years after the
operations or the close of the period of Watershed Sanitary Survey
mandated by the State Water Resources Control Board's Division of
Drinking Water if at this time, the daily average salinity measured at
the 100-Meter location boundary does not reach 75% of the salinity
standards .specified in section 2.5 below, Cal-Am may reduce the
frequency Of data collection and analysis to quarterly intervals.
The Parties agree to support Cal-Am in obtaining any
d.
regulatory approvals required for the installation or operation of this
monitoring program. If Cal-Am fails to obtain any required approval,
the Parties agree that the monthly monitoring described in Section
2.1(a) will suffice until a continuous monitoring program can be
implemented.
2.2 Alternative Monitoring Programs
2
1/21/2016
If a regulatory agency with jurisdiction over the Project requires an
alternative monitoring program that is more protective of marine
resources in the Sanctuary, the Parties agree that Cal-Am shall
implement that alternative monitoring program in lieu of the
monitoring program described in this agreement. If the Parties cannot
determine whether the alternative monitoring program is more
protective of marine resources in the Sanctuary, Cal-Am may
substitute the alternative monitoring program for the program in this
agreement, but only if the Parties agree that it is a suitable
replacement for the monitoring program established by this
agreement
The Parties further agree to consider reasonable Modifications to this
agreement's monitoring program if required to meet a mandate from
other agencies. The Parties have no obligation to approve such
modifications, but will give cIoSe consideration to proposals that do
not reduce the frequency or accuracy of monitoring and data
collection.
The Parties recognize that alternative monitoring programs may
require PUG approval and agree to make commercially reasonable
efforts to obtain any such approval
2.3
Salinity Standards
Monitoring shall determine Whether discharged brine is diluted to the

levels specified below
3.
During PrOfect operation, monitored salinity at and outside of the ZID

boundary will Comply with this agreement if it meets the lowest of the
following standards:, (1) the Ocean Plan's receiving water limitation
for salinity of a daily "average of 2 parts per thousand above salinity at
the Reference Location , as measured at the 100-meter site, or (2) any
other salinity or other brine constituent standard established by a
regulatory agency with jurisdiction over the Project.
Enforcement and Mitigation
If, at any time, monitoring shows that the Project's brine discharges have not
met the salinity standards , then a thorough review of all data shall be made
to determine if the non-compliance may have been caused by a temporary,
unusual, or erroneous measurement circumstance. This review would
consider brine discharge operational data, salinity data from all four
monitoring locations, the vertical profile data from all four locations, any recalibration of the salinity probes, and the duration of any non-compliance
(e.g., one day versus multiple days). If it cannot be established that there
3
1/21/2016
were measurement errors leading to the non-compliance, then Cal-Am
agrees to implement mitigation measures to increase brine dilution, and
reduce any exceedance in the brine plume salinity, as compared to salinity at
the Reference Location.
Cal-Am shall then immediately identify mitigation options that can further
dilute the Project's brine to comply with these standards. The Parties shall
expeditiously work together with reasonable efforts to select a mitigation
option that will protect against future exceedances of the salinity standards
by reducing brine plume concentration to eliminate observed exceedances.
They shall give preference to effective mitigation options that are (1) cost
effective, (2) capable of timely implementation,. and (3) otherwise
reasonable. Such mitigation may include:
a) Retrofitting the existing outfall with inclined, p'iessurized
diffuser ports (e g, at a 60 degree angle above horizontal) ;1? '
Constructing a new pressurized 'diffuser stricture designed solely for
the discharge of brine. This would likely have ports inclined vertically
upwards and other design considerationS,(e.g., increased discharge
velocity) to maximize dilution; or
c) Achieving rapid dilution of brine through another discharge
method or design that the Parties determine is mutually agreeable.
The Parties shall 'select a mitigation option no more than 60 days following
the date the monitoring', data showing an exceedance was retrieved; if the
Parties have not- designated a mutually agreeable mitigation option by that
time, Cal-Am shall select either (a) or .:(b) above. Cal-Am will use all
corninercially reasonable efforts to . commence implementation of the
:.Selected Mitigation option within four months of its selection by the Parties.
The Parties agree to explore the best possible mechanisms to expedite the
time gain PUC approval of the selected mitigation option. In particular, they
agree to investigate whether a the PUG may approve ,as part of the CPCN
under consideration in this proceeding, the improvement that would be
required for certain mitigation options .. If such pre-approval is possible, the
Parties may include such mechanism in the agreement that they intend will
follow this Term Sheet..
Following such discharge mitigation, monitoring shall continue for the life of
MPWSP.
4.
General
This Term Sheet reflects a proposed settlement and compromise of

putative claims and remedies of the Parties hereto.
4.1
4
1/21/2016
4.2
If the Parties do not ultimately reach agreement or if the brine
monitoring and mitigation settlement described in this Term Sheet is not
approved by the PUC and implemented by Cal-Am, Surfrider [insert other
Parties] reserves its rights to challenge the salinity impacts of Cal-Amps
discharge of brine from the Project in any appropriate forum.
Among other things, this Term Sheet helps to define a stable and finite
project description that will facilitate the PUC's completion of CEQA review
for the MPWSP. The legal effectiveness of this Term Sheet is contingent on
the completion of CEQA review and does not irretrievably commit the Parties
to carrying out any physical activities that would be required for Cal-Am to
meet the obligations established by this Term Sheet. The PUC, as the lead
agency, and all responsible agencies will retain full discretion with respect to
deciding whether to approve any other commitments necessary or
convenient for Cal-Am to address matters relating to the discharge of brine
from the Project, including discretion to modify commitments to 'avoid or
reduce any significant adverse physical environmental effects from the
activities that are within their jurisdiction.
4.3
This Term Sheet does not currently impact the terms of sections
3 .1(a) of the document known as the Large Settlement Agreement.
4.4
4.5
This Term Sheet may be executed in any number of counterparts.
750542.1
5
CERTIFICATE OF SERVICE
I hereby certify that I have this day served a copy of the DIRECT TESTIMONY OF AL
PRESTON, Ph.D., P.E. on all parties of record in A.12-04-019 by electronic mail.
Executed on January 22, 2016, at Santa Barbara, California.
id Gina Lane
Gina Lane
BROWNSTEIN HYATT FARBER
SCHRECK, LLP
1020 State Street
Telephone: (805) 963-7000
Facsimile: (805) 965-4333
Email: GLanegbhfs.com
01562110002l10703327.1
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MICHAEL WARBURTON
EXEC. DIR.
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DARREN M. FRANKLIN
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SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
333 SOUTH HOPE ST., 43RD FL.
LOS ANGELES, CA 90071-1422
FOR; GEOSCIENCE SUPPORT SERVICES, INC.
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AUTHORITY
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MONTEREY COUNTY FARM BUREAU
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PRESIDENT
WATER PLUS
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WATER ISSUES CONSULTANT
COALITION OF PENINSULA BUSINESSES
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PRESIDENT
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MARINA, CA 93933
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MANAGING DIRECTOR
PUBLIC WATER NOW
1198 CASTRO ROAD
MONTEREY, CA 93940
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WELLINGTON LAW OFFICES
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MONTEREY, CA 93940
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300 FOREST AVENUE
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DAVID C. LAREDO
ATTORNEY
DE LAY & LAREDO
606 FOREST AVENUE
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MANAGEMENT DISTRICT (MPWMD)
CARLOS RAMOS
1048 BROADWAY AVENUE
SEASIDE, CA 93955
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COALITION-MONTEREY PENINSULA/LATINO
SEASIDE MERCHANTS ASSOC./COMMUNIDAD EN
ACCION
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ADAMS BROADWELL JOSEPH & CARDOZO
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ENERGY (CURE)
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ATTORNEY
SHUTE, MIHALY & WEINBERGER LLP
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ATTORNEY AT LAW
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BROWNSTEIN HYATT FARBER & SCHRECK
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ATTORNEY AT LAW
ALLEN MATKINS LECK GAMBLE MALLORY NATSIS
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Agenda Report
FROM:

Item No: 10.
SUBJECT: Receive and Discuss Recommendations from the Technical Advisory

Committee (TAC) on the Water Authority Policy Position Statement and
Provide Direction
RECOMMENDATION:
Staff recommends that the Water Authority receive recommendations from the TAC on
the Water Authority Policy Position Statement and provide direction to staff.
DISCUSSION:
Nearly three years have passed since the Water Authority Board adopted its Policy
Position Statement. The Statement addresses a "Portfolio Approach" to new water
supplies. Further, it identifies four (4) requirements that any competing water project
must satisfy as well as eight (8) requirements that Cal Am must satisfy in order to gain
Water Authority support.
The TAC was requested to review the Position Statement in light of developments over
the last three years and to recommend changes, if appropriate, to the Water Authority.
Recommendations from the TAC will be provided at the Water Authority meeting.
The Policy Position Statement is at attachment A and a power point of the Statement
will be available for the meeting.
ATTACHMENTS:
A- Water Authority Policy Position Statement of July 11, 2013.
06/12
ATTACHMENT A

DRAFT POLICY POSITION STATEMENT
The Authority considered and adopted this position statement as direction to our staff and
consultants in preparing Public Utilities Commission (PUC) testimony due
February 22nd, 2013. This position was adopted, in advance of a completed EIR and in
recognition that more information will be forthcoming, because the PUC decision process is
underway and the Authority seeks to have a voice in that process. This document was adopted
at the January 31, 2013 Special Meeting and amended at the June 13, 2013 Regular meeting.
POSITION STATEMENT
Reiterate our support for a portfolio approach. This includes Ground Water Replenishment
(GWR), Aquifer Storage and Recovery (ASR), and Pacific Grove Small Projects, all of which
have public ownership, in addition to a desal project described here. Benefits of a portfolio
approach allow each individual element (PG small projects, GWR, ASR, desal) ability to move
on its own track and schedule such that a delay in one doesn't necessarily delay others. As
such, the Authority supports efforts to move forward with any individual element on its own,
especially if one element of the portfolio can move faster than the rest. For example, we
support ASR (and the associated pipeline infrastructure) moving forward even if desal is
delayed." The Authoritys position is consistent with the powers afforded to the Governance
Committee and as set forth in the Authoritys direct PUC testimony submitted on February 22,
2013.
Any project must meet four basic criteria:
1. Project economics must be competitive.
2. Project must have suitable public governance, public accountability and public
transparency.
3. Project must have clear path to permitting and constructing the facility as near to the
CDO deadline as feasible.
4. Project must have contingency plans to address significant technical, permitting and
legal risks.
None of the three projects (Cal Am, Deepwater Desal or DWD, or Peoples Moss Landing or
PML) as proposed meet these criteria. Therefore, none of the three projects as proposed
warrant Authority support. However, at this time Cal Ams proposed project appears to be
closest to meeting these four criteria. Cal Ams Project would earn our support if Cal Am
makes certain modifications. Consequently, the Authoritys support for the Cal Am Project is
subject to the following conditions:
FINANCIAL CONSIDERATIONS
1. Cal Am must accept a significant contribution of public funds consistent with the
parameters set forth within the Authoritys direct testimony submitted to the PUC on
February 22, 2013. Without the interest rate advantages afforded by such approach,
the costs of water from the Cal Am Project will be materially higher, and likely
substantially in excess of the cost of water from the alternative projects. A significant
ATTACHMENT A

contribution of public funds will avoid such an unwarranted expense to Cal Ams rate
payers. At the May 23, 2013 meeting, the Authority approved the refinement of the
previously adopted position to define significant contribution of public funds to mean
that Cal Am must accept the contribution of public funds of approximately 50% of the
cost of the project to include both surcharge two and the rate reduction bonds to count
toward the public contribution of 50%. Cal Am's traditional financing entails a blend
of 53% equity and 47% debt. A significant public contribution (combined with
Surcharge 2) should be of sufficient size to reduce Cal Am's equity to
approximately half that much (26 to 27%).
2. Cal Am must diligently seek to secure lower electricity rates for the project (e.g., $0.08$0.09 cents/kWh as most recently estimated by Cal Am) including agreement to
purchasing power through a municipal electrical utility, generation of on-site power if
necessary, other public entity or other source of low-cost power.
3. Cal Am must agree to limit the use of revenue from Cal Ams Surcharge 2 to reduce risk
to Cal Am ratepayers in the event the Cal Am project does not move forward. For
example, Cal Am could agree only to use Surcharge 2 to fund lower risk parts and
phases of the project (such as only the construction phase after the issuance of a
Coastal Development Permit from the Coastal Commission) or could provide other
mechanisms of reducing the risk to Cal Am ratepayers.
4. Cal Am must show something in writing from the State demonstrating its ability to
secure SRF financing. Absent such a document, the Authority will work with the Water
Management District to secure SRF financing as public agencies. Cal Am must accept a
public agency partner for SRF purposes if necessary, even if doing so results in a
reduction in Cal Ams equity position.
GOVERNANCE
5. Cal Am must agree, upon mutually-acceptable terms, to form a Governance Committee
to provide publicly-accountable oversight of the project.
PERMITTING & CONTINGENCY PLANS
6. To promptly address concerns pertaining to Cal Ams proposed intake wells, Cal Am
must:
a. Address or cause to be address all issues raised in the December 2012 Tim
Durbin testimony;
b. Proceed with the planned test wells and any other advanced geotechnical work
to support the proposed intake wells as soon as practically feasible;
c. Collaborate with local public agencies to advance permitting efforts with other
responsible agencies, including the California Coastal Commission;
d. Seek to clarify whether the installation of Cal Ams intake wells will require
approval from any federal agency, which would, in turn, require NEPA
compliance; and
ATTACHMENT A

7. Continue to explore and advance alternative intake strategies as a contingency if Cal
Am's proposed intake wells prove legally or technically infeasible.
a. Cal Am must fully develop a contingency plan or plans and implement that plan
or those plans for source water that do not involve wells in the Salinas Basin.
This must be done concurrently along with Cal Am planning and testing of slant
wells.
8. Cal Am must address questions about sea level rise and coastal erosion with respect to
the placement and longevity of their proposed slant wells. Coastal sands are also prone
to liquefaction in seismic events and coastal facilities are susceptible to damage from
tsunami events as well.
If Cal Am meets the above conditions, the Authority conditionally supports the Cal Am Project
because:
1. Cal Ams desal project size (9.6 desal only or 6.4 desal with GWR) appears to be
consistent with the Authoritys position of focusing on water for replacement and
replenishment including lots of record, pebble beach, allocation entitlement, and
economic rebound and accommodates the policy desire to pursue a portfolio of projects to
meet the needs of our communities, thereby reducing the risk associated with any project
failing or being delayed. The Coastal Commission identifies proposed projects with a
defined service area with a known level of build-out as involving an easier review while
projects with an unknown or extensive service area as involving a more difficult review.
Cal Ams project would involve this easier review while DWD would involve a more
difficult review.
2. Cal Ams project, DWD project and PML project are all in the planning stage although Cal
Ams project is the most advanced according to both SPI and the TAC.
3. Permitting agencies will require the least environmentally harmful feasible alternative for
source water intake. The Coastal Commission states that a subsurface intake (such as Cal
Ams proposed slant wells) involve an easier review while an open-water intake involves
a more difficult review. State Water Board staff likely will recommend that subsurface is
preferred. If subsurface is not feasible, consider Track 2 (infiltration galleries or open
water intake). It is unlikely that open water intake will be permitted unless test slant wells
have shown subsurface intake to be infeasible. Any project must therefore include a test
slant well. Only Cal Ams project proposes to do so.
4. Only Cal Am has demonstrated ability to finance a project. Their financing plan is
comprised of four different sources of capital; short-term construction financing, Surcharge
2, SRF, and equity. Neither of the other two projects have a detailed financing plan and
neither would likely have access to short-term construction financing, Surcharge 2 or SRF,
all advantageous forms of financing (Cal Am offers the short-term construction financing
but only for their project. Surcharge 2 is only permitted for a Cal Am facility. SRF is unlikely
to be available for open water intake.) We propose to include a significant public
ATTACHMENT A

contribution as a fifth source of capital. Doing so would significantly lower the Net Present
Value (NPV) cost of the project.
5. Cal Am has the capital necessary to complete the permitting of its project. Neither of the
other projects have demonstrated this ability.
6. Cal Am has indicated the potential for securing electricity at $0.087 per kwh and could
possibly purchase electricity at a lower rate through a municipal electrical utility formed by
a local public agency. DWDs proposed municipal electrical utility involves the City of
Salinas and its success is therefore outside of the direct control of the Authority.
7. The ultimate unit cost of water from the Cal Am Project in comparison to the cost of water
from the DWD and PML projects are close in amount presuming a significant public
contribution is made to lower the financing costs of the Cal Am Project and that Cal Am
secures electricity in the $0.08-0.09 per kwh range.
a. SPI estimates that Cal Ams production cost would be $2,310/$3,015 per acre foot
for the larger/smaller desal projects respectively if the cost of financing is brought
down to 4% and the cost of electricity is reduced to $0.087 per kwh. This is within
about 10% of the unit production costs of DWD ($2,100/$2,670) and is largely due to
the increased cost of slant wells.
b. The range of these estimates is minus 30% to plus 50%. The TAC recommends the
Authority focus its attention on the ranges.
c. For the larger plant, the range of the cost per acre foot of Cal Ams project with
Authority conditions is $1617 to $3465. The corresponding range for DWD is $1470
to $3150.
d. For the smaller plant, the range of the cost per acre foot of Cal Ams project with
Authority conditions is $2110 to $4522. The corresponding range for DWD is $1870
to $4005.
8. The DWD project involves a complex relationship of various entities, including a
municipal electrical utility, a data center, the formation of a regional JPA, a water purchase
agreement with Cal Am. The Authority is not aware that any of these relationships have
been established. This unresolved complexity leaves more room for possible delay or
failure. In contrast, Cal Ams organization structure is described as good by SPI.
9. Both DWD and PML will likely face questions from permitting agencies regarding the
placement of the desalination plant in relationship to the 100 year flood plain and sea level
rise. It is unclear how either project will respond to such questions.
10. The CEQA review for Cal Ams project is well underway and is being handled by the
Public Utility Commission as the lead agency. Any court challenge to the CPUCs EIR
must be made by a petition directly to the State Supreme Court (very few petition are
granted), reducing the legal risk of a challenge and also reducing the likelihood of project
delay in comparison to a CEQA challenge to a project involving a local lead agency.
Moreover, the Authority reiterates its request that both alternatives be reviewed at a
project level such that no further environmental review would be required if the Cal Am
project fails in whole or part.
11. The draft Governance Committee agreement strikes the right balance of ensuring that the
most important decisions are either made by public agencies or are fully informed by
ATTACHMENT A

recommendations from public agencies. The draft Governance Committee agreement
avoids inserting the public agencies into decisions that are judged to be better made by a
private entity.
ADDITIVE CONSIDERATIONS
Water Allocation. The proposed project is sized based on an estimate of the water needed for
replacement, replenishment, economic rebound, Pebble Beach allocation entitlement, and lots
of record. The estimate has been established for project design, engineering, and financial
planning purposes. The Authority supports this size for this purpose. Allocation decisions about
the use of the water should not be made by the PUC but instead should be made locally. The
Authority supports the MPWMDs proposal to initiate a process, in collaboration with the
Authority and other public agencies, to develop proposed amendments to MPWMDs water
allocation ordinances to address the allocation of water obtained from the Project. While the
Project is not sized for General Plan build-out within Peninsula jurisdictions, the Authority has
requested that the EIR evaluate a full range of plant sizes up to and including the size
necessary for full General Plan build-out. Further, the MPWMD, in collaboration with other
public agencies, should seek to update the estimate of the added capacity necessary to meet
the General Plan build-out projections for the Peninsula jurisdictions. The Authority
recognizes that future circumstances may trigger a need for review of future water
supply needs for the Peninsula to either expand or develop a new water supply to avoid
future pending shortage situations. The Authority will request Cal Am to initiate a
process to address the adequacy of the water supply to meet the future service
obligations of Cal Am customers as defined by the California Public Utilities
Commission.
Pacific Grove Non-Potable Water Projects. The Authority supports Cal Ams inclusion in its
next general rate case application proposals for Cal Am to collaborate with Pacific Grove in the
development of its projects to generate as much as 500 acre-feet of recycled, non-potable
water per year.
Project Cost Control. The Authority is working to reduce the Projects ratepayer impacts
through a significant public contribution, appropriate use of Surcharge 2, the Governance
Committees review of the RFP process, and the Governance Committees value engineering
process. Any cost cap imposed on the Project should be reasonably calculated to avoid
frustrating project financing or causing project delay.
Contingency Planning. As described in condition #6 above, the Authoritys primary concern

regarding contingency planning involves contingencies for the source water intake. We also
recognize the need to do contingency planning for certain other aspects of the Project,
including brine discharge.
Water Connection Fee. At the May 23, 2013 regular meeting the Authority approved support of
the concept of a new water service connection fee with the reservation of seeing further
information and study to refund the connection fee costs for possible integration.

Agenda Report
FROM:

Item No: 11.
SUBJECT: Discuss City of Monterey Request to Include a Response to the Cal Am

Rate Increase Proposal into the Mission and Work Plan of the Water
Authority and Provide Staff Direction
RECOMMENDATION:
Staff recommends that the Water Authority consider a request from the Monterey City
Council to respond to the proposed California American Water Company (Cal Am) rate
increase proposal under the CPUC Water Revenue Adjustment Mechanism (WRAM).
DISCUSSION:
On July 14, 2015, Cal Am submitted an application to the CPUC requesting changes to
its rate design. The most controversial component of that application involves a request
to recover $40 million in lost revenue as a result of conservation efforts over the last
several years. This type of lost revenue request is addressed under the CPUC WRAM
program.
A discussion of the issue from the perspective of the Office of Ratepayer Advocates can
be found at http://www.ora.ca.gov/general.aspx?id=3152 .
At its meeting of March 1, 2016, the Monterey City Council requested that the Water
Authority include a review, analysis, and response to the Cal Am application. Attached
is a copy of Monterey's letter to the CPUC.
To include this issue in the Water Authority mission statement and work plan for FY 1516 will require Board approval. Staff requests that the Board provide direction.
ATTACHMENTS:
A- City of Monterey Letter to the CPUC dated March 3, 2016
06/12
March 3, 2016
"ilbrnia
Mayor:
CLYDE ROBERSON
Councitinembors:
TIMOTFIY BARRETT
LIBBY DOWNEY
ALAN HAFFA
0) SMITH
City Manager:
MICHAEL McCARTHY
c;;;;T:i-lcri
1-0

Public Advisor's Office
505 Van Ness Avenue
San Francisco, CA 94102
RE:
California American Water's Application 15-07-019 (Filed July 16, 2015)
Dear President Picker and Commissioners of the California Public Utilities Commission;
By unanimous vote of the City Council of the City of Monterey ("City"), the City hereby
opposes Cal Am's application to modify its rate design, to change its water revenue
adjustment mechanisms ("WRAM") and modified cost balancing account ("MCBA")
surcharge collection, and to implement an annual consumption true-up mechanism ("sales
reconciliation mechanism" or "SRM").
On March 1, 2016 the City conducted a public hearing regarding Cal Am's proposed
changes. After receiving and considering public input from residents, the hospitality
industry, and Cal Am, the Council deliberated and decisively objects to many aspects of
Cal Am's proposal because it results in inequities to its ratepayers. The City firmly
supports the detailed and comprehensive analysis and recommendation of the Office of
Ratepayer Advocates (ORA) expressed in its report to the CPUC dated February 16,
2016.
The City agrees with ORA's recommendation that the CPUC should disallow $17.39
million in WRAM balance, as this portion of the balance is reasonably attributable to Cal
Am's lack of management oversight of the allotment system, and not by reduced
consumption.
Consistent with ORA's recommendation, the City concurs that Cal-Am should be required
to amortize $17.39 million over five years rather than 20, and most importantly disallow
charging ratepayers any interest,
The City also supports ORA's recommendation to require Cal-Am to make future WRAM
balance recovery requests through the normal application process and not through the
informal process of filing advice letters with the Commission. Furthermore, the City is
concerned that the method of calculating costs between classes of ratepayers must be fair
and transparent.
Thank you for your consideration of this informal comment letter. Should you have any
questions, please do not hesitate to contact me at (831) 646-3760.
Sincerely,
CITY HALL MONTEREY CALIFORNIA 93940 831.646.3760 FAX 831.646.3793

Web Site htlp://www.monterev.oW
c:
Publicadvisorncpuc,ca,gov
CPUC Legal Division
State Senator Bill Monning
Assemblyman Mike Stone
Monterey Business Associations
Monterey Neighborhood Associations
Mayors of the Cities of Carmel by the Sea, Del Rey Oaks, Marina, Pacific Grove,
City of Sand, Seaside
Monterey Peninsula Water Management District
California American Water Company
Public Trust Alliance
Water Plus
Public Water Now
Coalition of Peninsula Businesses
Regulatory Liaisons, Inc.

Agenda Report
FROM:

Item No: 12.
SUBJECT: Receive an Update on the Summary Project Schedule for the Monterey
Peninsula Water Supply Project (MPWSP) and the Status of Test Slant
Well Operations
RECOMMENDATION:
It is recommended that the Water Authority Board receive a report from Cal Am on the
latest "Summary" MPWSP schedule and on the status of test well operations and
results.
DISCUSSION:
Cal Am will present the most recent Summary MPWSP schedule, including an update of
the "dashboard", and the status of test slant well operations and results at the Water
Authority meeting.
ATTACHMENTS:
None
06/12

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Closed Session Agenda

Monterey Peninsula Regional Water Authority (MPRWA)

Approval of Minutes from December 10, 2015 - Romero

Receive Letter from Sand City in Support of GWR - Cullem

Adoption of Resolution 16-01, Approving Donald G. Freeman as Legal Counsel through

Thursday, March 10, 2016

Adoption of Resolution 16-02, Approving Brownstein Hyatt Farber Schreck as Special

Rubio, Edelen, Pendergrass, Kampe, Burnett, Alternate Director Downey

Executive Director, Legal Counsel, Clerk

REPORTS FROM BOARD DIRECTORS AND STAFF

Thursday, December 10, 2015

Downey, Edelen, Kampe, Pendergrass, Rubio, Burnett

Approve Minutes from August 13, 2015 - Milton

Approve Minutes from November 12, 2015

Approve and File Authority Checks Through December 10, 2015

Monterey Peninsula Regional Water Authority

Thursday, December 10, 2015

Presentation of Certificate of Appreciation to Lesley Milton

Monterey Peninsula Regional Water Authority

Thursday, December 10, 2015

Dave Stoldt answered financial questions of the board.

Monterey Peninsula Regional Water Authority

Thursday, December 10, 2015

Monterey Peninsula Regional Water Authority

Thursday, December 10, 2015

Downey, Edelen, Kampe, Pendergrass, Rubio, Burnett

Nova Swain, Clerk of the Authority

Monterey Peninsula Regional Water Authority

Monterey Peninsula Regional Water Authority

Date: March 10, 2016

Executive Director Cullem

SUBJECT: Receive Letter from Sand City in Support of GWR

Monterey Peninsula Regional Water Authority

Date: <MEETING DATE>

Executive Director Cullem / Authority Clerk Romero

$16,840.70 City of Monterey for Executive Director Services, Quarter 4 2016

$960.00 to Access Monterey Peninsula

$2,676.45 to Separation Processes Inc

3,500.00 To City of Seaside for Financial Services for FY 15-16

2,000.00 To City of Monterey for Principal Office of the Authority FY 15-16

A - Budget to Actual Report through March 10, 2016

B - Estimated Annual Membership Contributions FY 2016-17

Monterey Peninsula Regional Water Authority

Profit & Loss Budget vs. Actual

47240 Transfer From Reserve Funds

47250 Reimbursement SPI Contract

47200 Program Income - Other

60901 Clerk of the Board

60902 Executive Director

Total 47200 Program Income

49900 Carry Over from FY 14-15

60903 Principal Offc of the Authority

60904 Financial Services

60905 Misc Admin Expenses

62110 Board Counsel

62140 Special Counsel

Total 60900 Administration and Clerical

62100 Legal Fees

62100 Legal Fees - Other

62802 Audit Services

62803 Televised Meeting

Total 62100 Legal Fees

62800 Contract Services

62804 Contract Services & Studies