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AGENDA

MONTEREY PENINSULA REGIONAL WATER AUTHORITY1:00 p.m. Saturday, February 25, 2012Carpenter Hall, Sunset Cultural Center

Mission Street between 8th and 10th AvenuesCarmel-by-the-Sea, California

1. Call to Order

2. Roll call and introductions

3. Pledge of Allegiance

4. Public Comment for items not on the agenda

5. Reports from members of the Authority Board and staff

6. Approval of minutes

7. Consideration of bylaws

8. Consideration of direction to obtain Authority liability insurance

9. Discussion of items from the City Council

a. Consideration of requested responses from other agencies

10. Consideration of Fiscal Year 2011-2012 budget

11. Designation of signators

12. Items for future agendas

13. Discussion of future meetings

14. Adjournment

Carpenter Hall at the Sunset Cultural Center is an ADA-accessible facility.

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MINUTESMONTEREY PENINSULA REGIONAL WATER AUTHORITY

Thursday, February 9, 2012

1. CALL TO ORDER

The first meeting of the Monterey Peninsula Regional Water Authority was held atCarpenter Hall in the Sunset Cultural Center, in the City of Carmel-by-the-Sea, on theabove stated date at the stated hour of 4:00 p.m. Carmel City Administrator JasonStilwell called the meeting to order.

2. ROLL CALL AND INTRODUCTIONS

City Administrator Stilwell made brief introductory remarks and called the roll of theAuthority Directors.

Present: Directors Bachofner; Della Sala; Edelen; Garcia; McCloud and Pendergrass

3. PLEDGE OF ALLEGIANCE

The public joined the Authority Directors in the Pledge of Allegiance.

4.

ELECTION OF BOARD PRESIDENT, VICE PRESIDENT, SECRETARY ANDTREASURER

Director McCloud nominated Director Della Sala as President, seconded by Director Pendergrass, and approved unanimously.

Director Bachofner nominated Director McCloud to serve as Vice President until April,when her term as Carmel Mayor will end, seconded by Director Garcia, and approvedunanimously. McCloud stated that she will formally resign when her Mayoral termexpires, as per Article 6.2.

Director Della Sala nominated Director Edelen to serve as Secretary, seconded by

Director Bachofner, and approved unanimously.Director Bachofner nominated Director Garcia to serve as Treasurer, seconded byDirector Della Sala, and approved unanimously.

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5. COMPLETION OF SIGNING OF THE JOINT EXERCISE OF POWERSAGREEMENT

The six members of the Authority signed the official Joint Exercise of Powers Agreementdocument.

6. FILING OF AGREEMENT WITH THE SECRETARY OF STATE

According to Article 2 of the Agreement, notice of the Agreement must be filed with theSecretary of State and Monterey County Clerk within 10 days (as per Government CodeSection 53051 (a)) and another notice of Agreement must be filed with the Secretary of State within 30 days, in compliance with Government Code section 6503.5.

Chairman Della Sala opened and closed the meeting to public comment at 4:15 p.m . andthere were no public comments.

7. PREPARATION OF BY-LAWS OR RULES OF PROCEDURE

Chairman Della Sala opened and closed the meeting to public comment at 4:20 p.m. There were no public comments.

Director Bachofner recommended the Authority consider using Rosenbergs Rules of Order, a simpler form of parliamentary procedure than Roberts Rules.

8. PUBLIC INPUT FOR FUTURE AGENDAS

a. Membership of other public agencies as permitted by Article 5 of Agreement

Chairman Della Sala opened the meeting to public comment at 4:18 p.m.

Speaking to the issue were: Ralph Rubio; Susan Goldbeck; Libby Downey; Dan Presser;Bill Hood; Tom Rowley; George Riley; Dale Hekhuis; Ron Weitzman; Safwat Malek;Ron Stefani; and Roger Dolan.

Chairman Della Sala closed the meeting to public comment at 4:40 p.m.

Director McCloud moved, seconded by Director Della Sala, and approved unanimously,

to send a letter to Supervisor Dave Potter, Cal-Am Water, the Monterey Peninsula Water Pollution Control Agency, and the Monterey Peninsula Water Management District tofind out what role they may wish to have in working with the Authority to secure a futurewater supply and what water supply alternatives these agencies are developing that could

be part of the future solution. A response date from these agencies will be requested byFebruary 23.

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b. Issues for consideration from City Councils

Chairman Della Sala opened the meeting to public comment at 4:58 p.m.

Speaking to the issue were: Libby Downey, who expressed the concerns of the MontereyCity Council; George Riley; Susan Goldbeck; and Roger Dolan.

Director McCloud expressed the concerns of the Carmel City Council.

Director Garcia expressed the concerns of the Pacific Grove City Council.

Director Bachofner read a letter expressing the concerns of the Seaside City Council.

Director Pendergrass expressed a concern of the Sand City City Council, related toindemnity of members of the Authority as stated in Article 14.2 of the Agreement.

Director Edelen expressed a concern of the Del Rey Oaks City Council regarding a sunsetdate for the Authority.

9. DISCUSSION OF FUTURE MEETINGS

Chairman Della Sala recommended that meetings of the Authority take place every twoweeks, on the second and fourth Thursdays, beginning at 4:00 p.m., with dates scheduledfor February 23, March 8 and March 22.

Directors Bachofner and Garcia expressed the view that 4:00 p.m. may be too early toaccommodate many working people and suggested a 6:00 p.m. start time and perhaps toconsider holding meetings on different days, and possibly some Saturdays in the future.As the cost of televising the meetings for public viewing may be cost prohibitive, it wassuggested that the meetings could be inexpensively videotaped and downloaded on theInternet, as is done in the City of Del Rey Oaks.

It was also suggested that the meeting locations be rotated among the six cities.

By consensus of the members, the next meeting will be on Thursday, February 23, at 6:00 p.m., in a location to be determined.

10. PUBLIC COMMENTS FOR ITEMS NOT INCLUDED ON THE AGENDA

Bill Hood recommended that the letters to be sent to the various agencies and citedsections 4.5 and 4.16-20 of the Agreement.

George Riley stressed the importance of open dialogue and public forums for discussion.

Dale Ellis, speaking on behalf of the Monterey County Hospitality and PeninsulaBusiness Association said the business community welcomes the leadership of theAuthority and will stand ready to support its efforts.

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Kathleen Lee, aide to Supervisor Dave Potter, said her office is working to organize a public forum with the cooperation of the various water agencies and recommended thatthe Authority develop a central Website for the public to view documents andinformation pertaining to its actions.

Lawson Little expressed concerns about the sunset of the Authority.

Jason Burnett urged the Authority to take a portfolio approach and consider the meritsof the projects endorsed by the MRWPCA and the aquifer storage recovery project.

11. ADJOURNMENT

The meeting was adjourned at 5:50 p.m.

__________________________________ Jerry Edelen, Secretary

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BYLAWS

of the

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

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ARTICLE 1 THE AUTHORITY ......................................................................................... 1

1.1 Name of Authority ................................................................................................. 1

1.2 Office of Authority ................................................................................................ 1

1.3 Fiscal Year ............................................................................................................. 1

of each calendar year and end June 30th of the following calendar year ......................... 1

1.4 Powers .................................................................................................................... 1

ARTICLE 2 BOARD OF DIRECTORS AND MEETINGS ............................................... 1

2.1 Board of Directors.................................................................................................. 1

2.2 Meetings ................................................................................................................. 1

ARTICLE 3 OFFICERS ....................................................................................................... 23.1 Officers .................................................................................................................. 2

3.2 Election of Officers ................................................................................................ 2

3.3 Removal of Elected Officers .................................................................................. 2

3.4 Vacancies ............................................................................................................... 2

3.5 Resignation of Officers .......................................................................................... 2

3.6 Responsibilities of Officers.................................................................................... 3

ARTICLE 4 ADVISORY COMMITTEES .......................................................................... 4

4.1 Establishment of Advisory Committees ................................................................ 4

4.2 Advisory Committee Powers ................................................................................. 4

4.3 Advisory Committee Meetings .............................................................................. 4

ARTICLE 5 EXECUTIVE DIRECTOR AND STAFFING ................................................ 4

5.1 Appointment .......................................................................................................... 4

5.2 Powers .................................................................................................................... 4

5.3 Staffing ................................................................................................................... 5

ARTICLE 6 FINANCES ...................................................................................................... 5

6.1 Deposit and Disbursement of Funds ...................................................................... 5

6.2 Budget .................................................................................................................... 5

6.3 Annual Audits ........................................................................................................ 5

6.4 Financial Report ..................................................................................................... 5

6.5 Bonding .................................................................................................................. 5

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6.6 Reserve Funds ........................................................................................................ 6

ARTICLE 7 DEBTS AND LIABILITIES ........................................................................... 6

ARTICLE 8 REIMBURSEMENT FOR TRAVEL EXPENSES ......................................... 6

ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES .................................................. 6

9.1 Events of Default ................................................................................................... 6

9.2 Cure Period ............................................................................................................ 7

9.3 Remedies on Default .............................................................................................. 7

9.4 No Remedy Exclusive............................................................................................ 7

9.5 Agreement to Pay Attorneys Fees and Expenses ................................................. 7

9.6 No Additional Waiver Implied by One Waiver ..................................................... 7ARTICLE 10 RECORDS RETENTION ................................................................................ 7

10.1 Maintenance of the Authority Records .................................................................. 7

10.2 Inspection Rights ................................................................................................... 8

10.3 Maintenance and Inspection of Agreement and Bylaws ........................................ 8

10.4 Inspection by Directors .......................................................................................... 8

ARTICLE 11 CONFLICTS OF INTEREST CODE .............................................................. 8

ARTICLE 12 LIABILITY AND INDEMNIFICATION ....................................................... 8

12.1 Indemnification of Directors, Officers and Employees ......................................... 8

12.2 Insurance ................................................................................................................ 8

12.3 Indemnification By Member Agencies .................................................................. 8

ARTICLE 13 AMENDMENT................................................................................................ 9

ARTICLE 14 DEFINITIONS AND CONSTRUCTION ....................................................... 9

ATTACHMENT A Principal Office of the Authority ........................................................... 10

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PREAMBLE

These Bylaws are adopted and effective as of February 25, 2012 pursuant to the "JointExercise of Powers Agreement of the Monterey Peninsula Regional Water Authority (the"Agreement").

ARTICLE 1

THE AUTHORITY

1.1 Name of Authority. The name of the Authority created by the Agreement shall bethe Monterey Peninsula Regional Water Authority (the Authority).

1.2 Office of Authority. The principal office of the Authority shall be at the addresslisted in Attachment A to these Bylaws, or at such other location as the Board may designate byresolution.

1.3 Fiscal Year. The fiscal year for the Authority shall commence July 1st

of each calendar year and end June 30th of the following calendar year.

1.4 Powers. The powers of the Authority shall be as set forth in Article 4 of theAgreement.

ARTICLE 2

BOARD OF DIRECTORS AND MEETINGS

2.1 Board of Directors. The Authority shall be governed by a Board of Directors (theBoard) as set forth in Article 6 of the Agreement.

2.2 Meetings. Meetings of the Board may be called by the President, Vice-President,or any four directors by written request. Board meetings shall be conducted in compliance withArticle 7 of the Agreement, all applicable laws, and as further specified herein. [does the Board want to provide for a schedule, time, and place for regular meeting?]

2.2.1 Order of Business. At the regular meetings of the Board, the followingshall be the order of business:

i. Call to Order

ii. Roll Call.

iii. Pledge of Allegiance

iv. Public Comment

v. Report from Board Members and Staff

vi. Approval of Minutes of the Previous Meeting.

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vii. Agenda Items.

viii. Adjournment

2.2.2 Action by the Board. All resolutions of the Board shall be in writing,signed by the President and attested to by the Secretary. All other actions of the Board shall be

by motion recorded in written minutes.

2.2.3 Rule of Order. All rules of order not otherwise provided for shall bedetermined, to the extent practicable, in accordance with "Rosenbergs Rules of Order;"

provided, however, that no action of the Board shall be invalidated or its legality otherwiseaffected by the failure or omission to observe or follow "Rosenbergs Rules of Order."

ARTICLE 3

OFFICERS

3.1 Officers. The Officers of the Authority are the President, Vice-President,

Secretary and Treasurer, as provided for in Article 6 of the Agreement. All Directors are eligibleto serve as an Officer. The President, the Vice President, and the Secretary must be Directors.The Treasurer shall be appointed consistent with the provisions of Section 12.3 of theAgreement, and may, but need not, be a Director. The Treasurer shall serve at the pleasure of theBoard, subject to an employment contract, if any, with the Authority.

3.2 Election of Officers. At the first meeting of the Board of each fiscal year,nominations for the Officers will be made and seconded by a Director. If more than two (2)Directors are nominated for any one office, balloting occurs until a nominee receives a majorityof the votes cast; provided that after the first ballot the nominee receiving the fewest votes will

be dropped from the balloting. The initial term of the elected Officers shall run from the date of

their election to office until June 30, 2013. Thereafter, each Officer shall serve a term of one (1)year. An Officer may succeed himself/herself and may serve any number of consecutive or non-consecutive terms.

3.3 Removal of Elected Officers. An Officer may be removed, with or without cause, by a majority vote of the Board at a regular or special meeting.

3.4 Vacancies. Any vacancy in the offices because of death, resignation, removal,disqualification, or any other cause will be filled for the balance of the vacated term in themanner prescribed in these Bylaws for regular appointments to that office; provided, however,that such vacancies may be filled at any regular or special meeting of the Board.

3.5 Resignation of Officers. Any Officer may resign at any time by giving writtennotice to the Executive Director or Secretary. Any resignation takes effect at the date of thereceipt of that notice or at any later time specified in that notice. Unless otherwise specified inthat notice, the acceptance of the resignation is not necessary to make it effective.

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3.6 Responsibilities of Officers.

3.6.1 President of the Board. The President of the Board shall preside atmeetings of the Board and exercise and perform such other powers and duties as may beassigned to him/her by the Board or prescribed by these Bylaws.

3.6.2 Vice-President of the Board. The Vice-President of the Board shall fulfillall the duties of the President in his/her absence, and exercise and perform such other powers andduties as may be assigned to him/her by the Board.

3.6.3 Secretary. The Secretary shall perform, but not be limited to, thefollowing duties:

(a) Book of Minutes. Keep or cause to be kept, at the principalexecutive office of the Authority or such other place as the Board may direct, a book of minutesof all meetings and actions of directors and committees of the Authority, with the time and placeof holding the meeting, whether regular or special, and, if special, how authorized, the noticegiven, the names of those present and absent at such meetings and the proceedings of suchmeetings.

(b) Notices and Other Duties. Prepare, give, or cause to be given,notice of, and agendas for, all meetings of the Board and committees of the Authority.

(c) Exercise and perform such other powers and perform such other duties as may be assigned to him/her by the Board.

3.6.4 Treasurer. The Treasurer shall be the depository and have custody of allthe money of the Authority from whatever source, and shall provide strict accountability of said

funds in accordance with Government Code Sections 6505 and 6505.5. The Treasurer shall possess the powers of, and shall perform those functions required by, Government Code Sections6505, 6505.5, and all other applicable laws and regulations, including any subsequentamendments thereto. Particularly, the Treasurer shall perform, but not be limited to, thefollowing duties::

(a) Books of Account. Keep and maintain, or causes to be kept andmaintained, adequate and correct books and records of accounts of the properties and businesstransactions of Authority, including accounts of its assets, liabilities, receipts, disbursements,gains, losses, capital, retained earnings, and other matters customarily included in financialstatements. The books of account will be open to inspection by any Director at all reasonabletimes.

(b) Deposit and Disbursement of Money and Valuables. Consistentwith the provisions of Article 6, deposit all money and other valuables in the name and to thecredit of the Authority within such depository accounts as may be designated by the Board;disburse the funds of the Authority as may be ordered by the Board; and render to the Board,whenever requested, an account of all of his/her transactions as Treasurer and of the financialcondition of the Authority.

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(c) Exercise and perform such other powers and perform such other duties as may be assigned to him/her by the Board.

ARTICLE 4

ADVISORY COMMITTEES

4.1 Establishment of Advisory Committees. Pursuant to Section 11 of theAgreement, the Board may establish one or more advisory committees or establish standing or adhoc committees to assist in carrying out the purposes and objectives of the Authority.

4.2 Advisory Committee Powers. Any advisory committee shall exercise such powers as may be delegated to it, except that no committee may:

4.2.1 Take any final action on matters which, under the Agreement, requireapproval by a majority or two-thirds (2/3) vote of the Board;

4.2.2 Amend or repeal the Bylaws or adopt new Bylaws;

4.2.3 Amend or repeal any resolution of the Board;

4.2.4 Appoint any other committees of the Board or the members of thesecommittees; or

4.2.5 Approve any transaction which would violate the Political Reform Act(commencing with Section 81000 of the Government Code of the State of California) and/or Section 1090 of the Government Code of the State of California.

4.3 Advisory Committee Meetings. Advisory committees shall meet at the call of their respective committee chairs. All advisory committee meetings shall be conducted inaccordance with the Ralph M. Brown Act (California Government Code sections 54950 et seq.).Minutes of committee meetings shall be recorded and upon approval shall be distributed to theBoard.

ARTICLE 5

EXECUTIVE DIRECTOR AND STAFFING

5.1 Appointment. The Board shall appoint an Executive Director in accordance withArticle 9 of the Agreement.

5.2 Powers. In accordance with Article 9 of the Agreement, the Executive Director

shall administer the business and activities of the Authority, and shall execute all resolutions andagreements on behalf of the Board. The Executive Director shall have such powers, duties andresponsibilities as set forth in the Agreement, these Bylaws and as may be provided byagreement between the Executive Director and the Authority or as otherwise delegated to theExecutive Director by the Board. [note: Board to discuss specific Executive Director Duties for inclusion in this Section 5.2]. The Executive Director shall coordinate staff resources toward thecompletion of tasks assigned by these Bylaws or other order of the Board. To the extent cost-

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effective and efficient, the Executive Director shall seek the provision of staff resources from theMembers and coordinate among Members to accomplish said tasks.

5.3 Staffing. Subject to the Boards prior approval, the Executive Director mayemploy additional staff and/or contract for consultant, legal, or technical services to implementor to assist in the implementation of tasks assigned by these Bylaws or other order of the Board.Unless directed otherwise by the Board, the responsibilities of the individuals assigned to tasksshall be determined by the Executive Director.

ARTICLE 6

FINANCES

6.1 Deposit and Disbursement of Funds.

All funds of the Authority shall be deposited in one or more depository accounts as may be designated by the Board. Such accounts shall be independent of any account owned by or exclusively controlled by any of the Members. No disbursements of such funds shall be madeunless the same shall have been approved in the annual operating budget, or otherwisespecifically approved by the Board. All disbursements shall be by check. Disbursements of notmore than five thousand dollars ($5,000) may be issued pursuant to the Treasurers solesignature. Disbursements in excess of five thousand dollars ($5,000) may only be issued uponthe signature of the Treasurer and President, or in the Presidents absence, the Vice-President.

6.2 Budget. The Authority shall operate pursuant to a budget to be adopted pursuantto Article 13 of the Agreement. Unless it is necessary to incur debt in conjunction with thedevelopment of capital facilities, the Authority shall endeavor to operate each year pursuant to anannually balanced budget so that projected annual expenses do not exceed projected annualrevenues.

6.3 Annual Audits. The accounts of the Authority shall be reviewed as of the close of business on June 30th by a certified public accountant. A Full Opinion Audit will be provided tothe Board by the reviewing certified public accountant. The statement shall at all times beavailable to members of the organization within the offices of the Authority.

6.4 Financial Report.

6.4.1 Not later than December 1st after the close of Authoritys fiscal year, theBoard will cause an annual report, prepared by a certified public accountant, to be sent to thegoverning body of each Member.

6.4.2 The report required by this Section will be accompanied by the FullOpinion Audit to be developed and provided to the Board pursuant to Section 6.3.

6.5 Bonding. The President, Treasurer, and such other officers and staff who havecharge of, handle, or have access to any property of the Authority shall be bonded by a sufficientfidelity bond in the amount set by the Board and paid for by the Authority.

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6.6 Reserve Funds. One or more reserve funds for the Authority shall be created inthe amount(s) determined by the Board, and administered to fund expenses arising fromemergencies or extenuating situations or circumstances. Disbursements from a reserve fund mayonly be made upon the affirmative agreement of the Board by a supermajority of at least seventy(70) percent of the votes held among all Directors.

ARTICLE 7

DEBTS AND LIABILITIES

The debts, liabilities and obligations of the Authority are not and will not be the debts,liabilities or obligations of any or all of the Members. However, nothing in this Article or in theAgreement prevents, or impairs the ability of, a Member or Members, from agreeing, in aseparate agreement, to be jointly and/or severally liable, in whole or in part, for any debt,obligation or liability of the Authority, including but not limited to, any bond or other debtinstrument issued by the Authority.

ARTICLE 8REIMBURSEMENT FOR TRAVEL EXPENSES

Directors and the Executive Director shall be reimbursed for all reasonable and necessarytravel expenses when required or incurred by those persons in attending meetings or events

pertinent to the business and operation of the Authority. Reimbursable expenses shall include allcharges for meals, lodging, air fare and costs of travel by automobile at the rate per mile allowedas a business expense by the Internal Revenue Service. The Treasurer, upon approval of thePresident, shall be authorized to pay all such expenses deemed reasonable and necessary so longas sufficient funds have been budgeted therefore. Payments for amounts in excess of that

budgeted must be approved by the Board.

Reasonable and Necessary is defined as those expenses which the member would not haveincurred in performing the normal business of its agency.

ARTICLE 9

EVENTS OF DEFAULT AND REMEDIES

9.1 Events of Default. Subject to the cure period provided in Section 9.2 below, anevent of default occurs if a Member does or omits from doing any of the following:

9.1.1 Fails to appoint a director and/or an alternate to serve on the Board;

9.1.2 Fails to comply with the Agreement or these Bylaws;

9.1.3 Fails to comply with any contract executed by the Member with theAuthority, or any bond or other evidence of indebtedness for which the Member has agreed toassume responsibility, in whole or in part; or

9.1.4 Fails to pay fees, if any, assessed by the Board;

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9.2 Cure Period. A Member shall not be in default under the Agreement or theseBylaws unless such Member shall fail to correct such default for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to suchMember by the Authority or the Executive Director; provided, however, if the failure stated inthe notice cannot be corrected within the applicable period; the Authority, or the Executive

Director, as the case may be, will not unreasonably withhold its consent to an extension of suchtime if corrective action is instituted by the Member within the applicable period and diligently pursued until the default is corrected. After such an extension, failure to diligently pursue or toachieve corrective action is a separate event of default under these Bylaws requiring notice butnot requiring that Authority consent to any extension;

9.3 Remedies on Default. The Authority may exercise any and all remedies available pursuant to law, or granted pursuant to the Agreement or these Bylaws to remedy an event of default by a Member.

9.4 No Remedy Exclusive. No remedy conferred herein upon or reserved to theAuthority is intended to be exclusive and every such remedy is cumulative and is in addition toevery other remedy given under the Agreement or these Bylaws, now or hereafter existing at lawor in equity. No delay or omission to exercise any right or power accruing upon any defaultimpairs any such right or power or will be construed to be a waiver thereof, but any such rightand power may be exercised from time to time and as often as may be deemed expedient. Inorder to entitle the Authority to exercise any remedy reserved to it in these Bylaws, it is notnecessary to give any notice, other than such notice as may be required in these Bylaws or bylaw.

9.5 Agreement to Pay Attorneys Fees and Expenses. In the event a Member should be in default under any of the provisions of these Bylaws and the Authority should employattorneys or incur other expenses for the collection of moneys or the enforcement of performanceor observance of any obligation or agreement on the part of the defaulting Member, thedefaulting Member agrees that it will on demand therefore pay to the Authority the reasonablefees of such attorneys and such other expenses so incurred by the Authority.

9.6 No Additional Waiver Implied by One Waiver. In the event any agreementcontained in the Agreement or these Bylaws should be breached by any Member and thereafter waived by the other Members, such waiver will be limited to the particular breach so waived andwill not be deemed to waive any other breach hereunder.

ARTICLE 10

RECORDS RETENTION

10.1 Maintenance of the Authority Records. The Authority will keep:

10.1.1 Adequate and correct books and records of account; and

10.1.2 Minutes in written form of the proceedings of its Board, and committeesof the Board.

All such records will be kept at the Authoritys principal office.

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10.2 Inspection Rights.

10.2.1 Any Member may inspect the accounting books and records and minutesof the proceedings of the Board and committees of the Board, at any reasonable time, for a

purpose reasonably related to such persons interest.

10.2.2 Any inspection and copying under this Section may be made in person or by an agent or attorney or the entity entitled thereto and the right of inspection includes the rightto copy and make extracts.

10.3 Maintenance and Inspection of Agreement and Bylaws. The Authority will keepat its principal executive office the original or copy of the Agreement and these Bylaws asamended to date, which will be open to inspection by the Authority or any Member at allreasonable times during office hours.

10.4 Inspection by Directors. Every Director has the absolute right at any reasonabletime to inspect all non-confidential books, records, and documents of every kind and the physical

properties of the Authority. This inspection by a Director may be made in person or by an agentor attorney, and the right of inspection includes the right to copy and make extracts of documents.

ARTICLE 11

CONFLICTS OF INTEREST CODE

The Authority shall be subject to the conflict of interest rules set forth in the PoliticalReform Act (commencing with Section 81000 of the Government Code of the State of California) and Sections 1090 et seq. of the Government Code of the State of California, and theAuthority shall adopt a conflict of interest code as required and as provided by the implementing

regulations of the Political Reform Act.ARTICLE 12

LIABILITY AND INDEMNIFICATION

12.1 Indemnification of Directors, Officers and Employees. The Authority shalldefend and indemnify its directors, officers and employees to the same extent as any publicagency of the State of California is obliged to defend and indemnify its public employees

pursuant to California Government Code 825 et seq. or other applicable provisions of law.

12.2 Insurance. The Authority may insure itself to the extent deemed necessary by theBoard against loss, liability and claims arising out of or connected to the conduct of theAuthority's activities.

12.3 Indemnification By Member Agencies. To the extent any Member Agency'snegligent or wrongful act or omission is the cause of an injury for which other Member Agenciesmay be, or are sought to be, held liable pursuant to California Government Code section 895 etseq., the Member Agency which is legally responsible for the injury shall, at its own expenses,defend, indemnify and hold harmless all of such other Member Agencies from any and all legalconsequences of the negligent or wrongful conduct or omission. Nothing in this Section shall be

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deemed to preclude a Member Agency having the duty to defend, indemnify and hold harmless,from resorting to any insurance or other form of coverage for losses available to the Member Agency, including insurance or coverage for losses procured through the Authority.

ARTICLE 13

AMENDMENT

These Bylaws may be amended from time to time by resolution of the Board dulyadopted upon a two-thirds vote of the entire Board at a regular or special meeting of the Board;

provided, however, that no such amendment shall be adopted unless at least thirty (30) dayswritten notice thereof has previously been given to all members of the Board. Such notice shallidentify the Article to be amended, the proposed amendment, and the reason for the proposedamendment.

ARTICLE 14

DEFINITIONS AND CONSTRUCTION

Unless specifically defined in these Bylaws, all defined terms shall have the samemeaning ascribed to them in the Agreement. If any term of these Bylaws conflicts with any termof the Agreement, the Agreements terms shall prevail, and these Bylaws shall be amended toeliminate such conflict of terms. Unless the context or reference to the Agreement requiresotherwise, the general provisions, rules of construction, and definitions in the California CivilCode will govern the construction of these Bylaws.

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ATTACHMENT A Principal Office of the Authority

The principal office of the Authority shall be located at _____________________________.

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