governance committee agenda packet 09-17-14

8/11/2019 Governance Committee Agenda Packet 09-17-14

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members regarding any item on the agenda, they will be available at the Monterey PeninWater Management District (MPWMD) office during normal business hours, and postethe Governance Committee website http://www.mpwmd.net/GovernanceCommittee/GovernanceCmte.htm . distributed at the meeting will be made available in the same manner.

Upon request, a reasonable effort will be made to provide written agenda materialsappropriate alternative formats, or disability-related modification or accommodatincluding auxiliary aids or services, to enable individuals with disabilities to participate in p

meetings. A reasonable effort will also be made to provide translation services upon requPlease submit a written request, including your name, mailing address, phone number brief description of the requested materials and preferred alternative format or auxiliary aidservice by 5:00 PM on Monday, September 15, 2014. Requests should be sent to the BSecretary, MPWMD, P.O. Box 85, Monterey, CA, 93942. You may also fax your requestAdministrative Services Division at 831-644-9560, or call 831-658-5600.

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Monterey Peninsula Water Supply Project Governance Committee

Meeting Date: September 17, 2014

Agenda Item: 1. Approve Draft Minutes of May 23, June 10 and August 25, 2Governance Committee Meetings

Summary: Attached as Exhibits 1-A through 1-C

, respectively, are draft mthe May 23, June 10, and August 25, 2014 committee meetings.

Action: Review and approve the committee minutes.
http://www.mpwmd.net/GovernanceCommittee/GovernanceCmte.htmhttp://www.mpwmd.net/GovernanceCommittee/GovernanceCmte.htmhttp://www.mpwmd.net/GovernanceCommittee/GovernanceCmte.htm


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GOVERNANCE COMMITTEE

FOR THE

MONTEREY PENINSULA WATER SUPPLY PROJECT

California American Water Monterey County Board of SupervisorsMonterey Peninsula Regional Water Authority Monterey Peninsula Water Management Distri

EXHIBIT 1-A

DRAFT MINUTES Regular Meeting

Governance Committee for the

Monterey Peninsula Water Supply Project May 23, 2014

Call to Order: The meeting was called to order at 1:30 pm in the conference room Monterey Peninsula Water Management District offices.

Members Present: Chuck Della Sala, representing Monterey Peninsula Regional Water A(JPA) (Alternate for Jason Burnett)Robert S. Brower, Sr., Vice Chair, representative for Monterey PeninsulaManagement DistrictRobert MacLean, representative for California American Water

Members Absent: David Potter, representing Monterey County Board of SupervisorsJason Burnett, Chair, representing Monterey Peninsula RegionalAuthority

Pledge of Allegiance: The assembly recited the Pledge of Allegiance.

Public Comments: No comments were presented to the committee.

Agenda ItemsThe Chair received public comment on each agenda item.

Action Items


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No comments were directed to the committee during the public comment period on this ite

Della Sala offered a motion to adopt the recommendation of the ad-hoc selection commiand contract with Value Management Strategies, Inc. (VMS) for preparation of aengineering study for a not-to-exceed cost of $124.000. Jim Cullum shall be authorinegotiate with VMS to reduce the cost from $129,997.22 to $124,000. The motioseconded by Brower and approved unanimously on a vote of 2-0 by Della Sala and BMacLean expressed agreement with the committee action.

Discussion Items

2. Update from California American Water on Source Water Intake Location InvestigationsIan Crooks, Engineering Manager for Cal-Ams Coastal Division reported that thecomment period on the City of Marinas consideration of the application for constructiontest well at the CEMEX site closes on June 17, 2014. The goal is to obtain approvMarina by August. The permitting process for the Potrero contingency test well site sbe submitted to the California Department of Parks and Recreation by mid-June.

Public Comment: (1) David Stoldt , Monterey Peninsula Water Management Distriwhen the CEMEX test well is to be considered by the California Coastal Commission (CGeorge Riley asked if applications are being submitted for both the CEMEX and locations.

Crooks responded that an application for the CEMEX site has been filed with the CCCCity of Marina approves the application, the CCC could consider the application in O2014. He also stated that the CEMEX site is the primary location under consideration ftest wells. The process for permitting the Potrero site is proceeding as a contingency plan

3. Update on Development of Landfill Gas Term SheetCrooks reported that Cal-Am has been in negotiations with Monterey Regional Management District (WMD) on development of a term sheet. A draft term sheet has submitted to WMD that addressed all their concerns, but there is no agreement as yet. cost for WMD to construct the infrastructure needed to deliver energy to the desal projeestimated to be in excess of $1 million.

4. Discussion of Items to be Placed on Future Agendas


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There was a request that Cal-Am provide to the committee a detailed critical path methocompletion of the desalination project.

Public Comment: (1) George Riley requested that the committee provide an update three desalination project alternatives. He explained that Cal-Ams desalination propobehind schedule and the other two alternatives will be entering the EIR process soon.other two alternatives would be less costly than Cal-Ams proposal, so it wouadvantageous to review the project schedules again. (2) Michael Warburton , repPublic Trust Alliance, expressed agreement with the request to develop a comparison othree desalination project alternatives, and stated that the Governance Committee would

the appropriate entity to conduct the study.

Brower stated that the Water Management Districts Water Supply Planning committee wconsider the request to conduct a comparison of desalination alternatives. MacLean sthat a comparison study should not be conducted by the Governance Committee, but coulconsidered by the JPA.

Adjournment

The meeting was adjourned at 2:10 pm.U:\Arlene\word\2014\GovernanceCommittee\Minutes\d


FOR THE



EXHIBIT 1-B

DRAFT MINUTES Joint Special Meeting


Monterey Peninsula Water Supply Projectand

Monterey Peninsula Regional Water Authority July 10, 2014


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Members Present: Governance CommitteeJason Burnett , Chair, representing

Monterey Peninsula Regional WaterAuthority (JPA)David Potter , representingMonterey County Board ofSupervisorsRichard Svindland , representingCalifornia American Water (alternateto Robert MacLean)

Water AuthoritMayor Jason Burnett , C

Mayor Jerry Edelen , CitOaksMayor Bill Kampe , City GroveMayor David PendergrassSand CityMayor Ralph Rubio , CitMayor Chuck Della Sala

Monterey

Members Absent: Robert S. Brower , Sr., Vice Chair,representative for MontereyPeninsula Water ManagementDistrictRobert MacLean , representative forCalifornia American Water

No absences


Public Comments: (1) Tom Rowley thanked David Potter for attending the Water Ameeting and urged him to attend regularly to represent the CalAmerican Water Company (Cal-Am) rate payers in the unincorporated aMonterey County. (2) Nelson Vega thanked Mr. Potter for attemeeting. He also described Mr. Della Salas term as president of theAuthority as exemplary and commendable.


Action Items

1. Receive Report from Value Management Strategies, Inc. Discuss and Provide Direction on tDraft Preliminary Value Engineering Study of CDMs 30% Design of the California AmeWater Company Desalination Project


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Mark Watson of Value Management Strategies gave a presentation that summarizedpreliminary results of the Value Engineering (VE) Study. He noted that comments recei

the meeting would be incorporated into the final report that should be provided withindays. The final step in the process will be to decide which alternatives presented in the rshould be incorporated into final design. Watson stated that the purpose of the study waidentify a series of value enhancing options to the current design of the project througobjective, not an independent review. He reiterated that VE is not a cost reducing exercisan intersection of performance, cost, risk and time, all appropriately weighted that increase the value of the project. If the 15 identified priorities were implemented, they cpotentially decrease the total project cost by $9 million and improve the value of the pr

by up to 29 percent over the life of the project.

Jim Cullum, Executive Director of the Monterey Peninsula Regional Water Authority, cauthe assembled Boards that the proposed $9 million in savings may change as modifyinaspect of the project may impact other factors. He noted that the public will have opportunities to comment of the VE study, including the August 25, 2014 meeting oGovernance Committee.

Rich Svindland, Vice President of Engineering, California American Water, noted that has identified many of the alternatives for incorporation into CDMs project design. Thenot yield a dollar for dollar recovery, but Cal-Am will negotiate to get a decreased cost tratepayers. He explained that some systems are not yet fully designed because testresults are not available. The pipeline design is ready for the VE process, which will be inin the EIR.

Public Comment: (1) Nelson Vega questioned the potential impacts to the cost per acof the project and supported the larger facility size. ( 2) Rick Riedl requested rewith CDM to recoup some of the cost savings and questioned if there was an incentireduce costs within the contract. (3) Dale Hekhuis requested clarification of the defvalue comparison. (4) George Riley asked if the quality or components of the sourwould change, were the VE study suggestions to be implemented. (5) Dquestioned the RO schematic expressing concern that the building was not large enoughquestioned if the public would be able to comment on the final process.Warburton questioned how drought regulations would be enforced and spoke to pelegislation as it relates to this project.


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Watson made the following statements in response to questions from the assembled Boand members of the public. (1) The highest risk identified in the VE study is the raw

data. The report will indicate that there is a lack of data on the water and assumptions wmade according to different speculated results. Source water is a key aspect to overall cothe project. (2) The VE recommendations propose to increase the RO water recoveryfrom 45% to 50% on the first pass, and 90% on the second pass, for a total 45% recoverybelieves that there is a possibility for a higher recovery rate which would impact thmembranes positively. (3) The project proposes 33 energy saving devices. Energy recopart of the project design. One of the risks and uncertainties is use of methane gas. current plan is to utilize dual sources from methane and PG&E; however, the ultimate p

source for the project has not been determined. (4) The VE study did not calculate the ca 9.6 mgd plant vs a 6.5 mgd plant. The study did evaluate if any of the alternatives change with a 9.6 or 6.5 mgd plant. (5) The quality of the s ource water could design solutions. There are VE alternatives that deal with source water risks, but the testdata is needed to evaluate appropriate alternatives.

AdjournmentThe meeting was adjourned at approximately 8:10 pm.

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FOR THE



EXHIBIT 1-C

DRAFT MINUTES Regular Meeting


Monterey Peninsula Water Supply Project


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Members Present: Jason Burnett, Chair, representing Monterey Peninsula RegionalAuthority (JPA)

Robert S. Brower, Sr., Vice Chair, representative for Monterey PeninsulaManagement DistrictRobert MacLean, representative for California American Water

Members Absent: David Potter, representing Monterey County Board of Supervisors


Public Comments: No comments


Action Items1. Approve Draft Minutes of July 16, 2014 Governance Committee Meeting

Public Comment: Michael Warburton , representing the Public Trust Alliance, requethe comments he made at the July 16, 2014 meeting under the Public Comments itemamended to state that any move to use ratepayer money to pay for a desalination plantMonterey County before reasonable alternatives are investigated, is very likely to resviolations in public utilities, securities, environmental water law and constitution on both and federal levels.

On a motion by Brower and second of Burnett, the July 16, 2014 committee meeting miwere approved as presented on a unanimous vote of 2 0 by Brower and Burnett.

2. Approve Response to California American Water re Request for Proposal for Test Slant WConstructionPublic Comment: (1) Tom Rowley , representing Monterey Peninsula Taxpayers As

asked if the proposed monitoring wells could be converted to water supply wells.Warburton opined that the Governance Committees proposed response to CaliAmerican Water (Cal-Am) is inadequat e and does not protect the public interest. Theproponents have moved ahead based on presumptions, and the Governance Commshould examine those presumptions. He expressed hope that the Governance Commwould seek to protect the public interest and not focus entirely on protection of busi


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On a motion by Burnett and second of Brower, the committee authorized submission o

response letter to California-American Water as presented. The motion was approvedvote of 2 0 by Burnett and Brower.

3. Receive Report, Discuss and Provide Direction on the Value Engineering Final Report for Cal Am Desalination FacilityRichard Svindland and Ian Crooks reviewed Cal-Ams response to recommendations Bthrough E7; M-4; TP-1 through TP-11; and RS-2. Comments from the Governance Comare listed below .E-2 If recommendation were to be followed, it would affect plant sizing, and relia

(with more pumps, operation could continue if some pumps were down).Committee noted that any change affecting plant size would be a concern to thcommunity. Many parties to the litigation have agreed that 9.6 MGD isrecommended or 6.4 mgd with a groundwater replenishment project.

TP-1 Cal-Am representatives said that this change could cause an increase in brineconcentration to the outfall, and operation of outfall to the National Marine

Sanctuary, which could increase costs. Through use of slant wells, it is possibthe source water will require less treatment and result in increased plant efficiCommittee asked if the plant could be designed to use 45% recovery rate and increase the recovery. CAW responded that yes, if conditions change, modificcould be made to increase recovery.

TP-4 Committee asked that the report include the annual and life-cycle cost savingsassociated with elimination of sulfuric acid treatment from the process.

TP-7 Committee clarified that if this change were implemented, a one-month delay project completion would result. However, due to the time extension recentlygranted by the California Public Utilities Commission (CPUC), this delay wouinhibit timely completion of the project.

TP-9 Cal-Am representatives stated that the review of alternatives will be completeprior to the September 17, 2014 meeting of the Governance Committee.

TP-10 Committee agreed that an expenditure of $225,000 to evaluate the mean size osand granules so that pump screens can be designed properly, would be a wiseexpenditure.

TP-11 Cal-Am representatives say they will review this, but have concerns thatimplementation would result in increased iron and manganese to the outfall.


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RS-2 The committee requested that this be carefully analyzed, so that the informatioavailable before State Water Resources Control Board hearings on this issue.

should be a plan to accelerate construction so that operation could begin as sopossible, especially in the event that drought continues. (Cal-Ams current plathat partial operation of the plant could begin after the first six months ofconstruction.) There are permitting and environmental considerations to plan construction were to be accomplished in shifts at night. A final decision on wto implement shifts could be made after 60% design work is complete. Cal-Ainvestigate this, and also ask the test well drillers to provide a quote for operatwith 1, 2 and 3 shifts.

Public Comment: Michael Warburton stated that the value engineering team did not the major question; there was no evaluation of California American Waters desalinationversus another water supply alternative. According to Mr. Warburton, legal circumsthave changed since the time that the Public Trust Alliance expressed support for a desalinproject solution. At this present time, reallocation of public water is of most imporAdministrators of Salinas water have a responsibility to the entire county, not j

agricultural interests, so that a small amount of water could solve the Monterey Peninsurban water problem. He noted that the urban preference has not disappeared in MonteCounty and its extremely important for the Governance Committee, the Mayors and utito engage what that means.

Brower offered a motion to delay action until the next committee meeting when minformation will be available, including a plan for acceleration of the construction scheddiscussed under recommendation RS-2. The motion was seconded by Burnett and app

on a vote of 2 0 by Brower and Burnett.

Reports to Committee4. Progress Report from California-American Water on Development of Monterey Peninsu

Water Supply Project Desalination PlantCrooks reviewed the Monterey Peninsula Water Supply Project Anticipate Schedule, updaon August 25, 2014. He reported that final publication of the project EIR is set for July 20California Coastal Commission (CCC) approval is expected to occur in February or MarchHe noted that if the Public Utilities Commission and the CCC could process the applicatioparallel, the CCC could approve the slant well portion of the project first. Under that scenslant well construction would not be delayed by the Snowy Plover nesting season. Crook

agreed to develop information on the implications of parallel process of the permits, and mhis analysis available to Burnett for future discussions with John Laird at the California N


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Public Comment: (1) Michael Warburton expressed support for meetings with Jregarding the project timeline, as he believes it is not clear that constitutionally deleg

officers that protect the public trust understand their duties. However, Warburton opined tthe desalination project has been driven by presumption, ambition and knee-jerk protectioproperty which people might not own. He expressed support for broadening public discuand understanding of what is at stake, but also noted his concern that acceleratingconstruction schedule could have a deleterious impact on that aspect of the project. (Rowley stated that several years ago the Monterey City Council decided to not pursue PWater Rights due to the high cost and potential years-long legal battle associated witheffort. Rowley stated that at this time, the community cannot avoid the deadline it is und

develop a water solution. Possibly at some future date the community can take the necessary to divide up water from the Salinas Basin.

Discussion Items5. Suggest Items to be Placed on Future Agendas

Committee members proposed the following agenda items: review the Value EngineReport, and review bids for construction of monitoring wells.

Public Comment: Michael Warburton suggested that the Governance Committee addquestion of changed circumstances regarding the desalination project. Is this a problemwill not be solved in our lifetime, or is there a legal responsibility to solve this in the interest? The committee should be interested in finding out if circumstances have chabased on climate change, vulnerabilities of coastal locations, drought, and new informatiogroundwater movement. He suggested that legal experts could determine if it wouleasier to solve this now than it was 20 years ago.

AdjournmentThe meeting was adjourned at approximately 3 pm.

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Monterey Peninsula Water Supply Project Governance Committee

Meeting Date: September 17, 2014


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Peninsula Regional Water Authority on August 14, 2014. Jim Culprovide additional information to the Governance Committee at th

September 17, 2014 meeting.

Exhibits:5-A August 14, 2014 Report from Jim Cullum to the Monterey Peninsula Regional Wate

Authority

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http://www.mpwmd.dst.ca.us/GovernanceCommittee/StaffNotes/2014/20140917/item5ExhA.pdfhttp://www.mpwmd.dst.ca.us/GovernanceCommittee/StaffNotes/2014/20140917/item5ExhA.pdf


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EXHIBIT 5-A

WA AGENDA

Power Purchase Agreement- 14 August 2014 FROM: Executive Director Cullem

SUBJECT:

Receive report, discuss, and provide direction on the power purchase agreement

between Cal Am and the Monterey Regional Waste Management District (MRWMD).

RECOMMENDATION:

It is recommended that the Water Authority Board receive a report on the status ofnegotiations between Cal Am and the Monterey Regional Waste Management District(MRWMD) for renewable electrical power for the Desalination (Desal) facility.

DISCUSSION:

With support from the Water Authority, Cal Am and the staff of the MRWMD havediligently worked on a term sheet and power purchase agreement to allow Cal Am toacquire between 3.5 and 4.5 megawatts of renewable electrical power for the Desalfacility from the landfill. An electrical power study, funded by Cal Am, determined howbest to provide power "over the fence" and what equipment would be required.

The power purchase agreement that the MRWMD currently has with PG&E expires hisfall, and the District needs to obtain new customers for that power now. Unfortunately,the current schedule for a CPCN decision by the CPUC prevents Cal Am from enteringinto a purchase agreement at this time.

However, an agreement was reached by which MRWMD will seek short-term (3-5 year)customers for its power allowing Cal Am to be considered as a longer term customer inthe 2017-2019 time frame. That will provide sufficient time for the Desal permittingprocess to be completed, the CPCN issued, and for construction to advance far enoughalong for Cal Am to be able to enter into a power purchase agreement and actuallyutilize the renewable power. The attached staff report to the MRWMD board seeking


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governance committee agenda packet 09-17-14

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