MPRWA Regular Meeting Agenda Packet 01-09-14

8/13/2019 MPRWA Regular Meeting Agenda Packet 01-09-14

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AgendaMonterey Peninsula Regional Water Authority (MPRWA)

Regular Meeting

7:00 PM, Thursday, January 9, 2014

Council Chamber580 Pacific StreetMonterey, California

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

PUBLIC COMMENTSPUBLIC 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 personor group desiring to bring an item to the attention of the Authority may do so by addressing theAuthority 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 contactthe sender concerning the details.

APPROVAL OF MINUTES

1. December 9, 2013 Special Meeting

AGENDA ITEMS

2. Approve Certificate of Appreciation to Deanna Allen of the City of Carmel for FinancialServices to the Authority

3. Authorize Contract Extension for Brownstein, Hyatt, Farber and Schreck for Legal ServicesCullem

4. Receive Update on the Pro-Rated Cost Share Requests from the County of Monterey -Cullem

5. Approve and File Checks Through December 31, 2013 - Cullem

6. Year End Budget Review for Calendar Year 2013 - Cullem

7. Receive Update on The 2012-2013 Financial Audit Report Cullem

ADJOURNMENT

The Monterey Peninsula Regional Water Authority is committed to include the disabled in all ofits services, programs and activities. For disabled access, dial 711 to use the California RelayService (CRS) to speak to staff at the Monterey City Clerks Office, the Principal Office of theAuthority. CRS offers free text-to-speech, speech-to-speech, and Spanish-language services24 hours a day, 7 days a week. If you require a hearing amplification device to attend a


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Created date 01/07/2014 11:47 AM Thursday, January 9, 2014

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meeting, dial 711 to use CRS to talk to staff at the Monterey City Clerks Office at(831) 646-3935 to coordinate use of a device or for information on an agenda.

Agenda related writings or documents provided to the MPRWA are available for publicinspection during the meeting or may be requested from the Monterey City Clerks Office at 580Pacific St, Room 6, Monterey, CA 93940. This agenda is posted in compliance with CaliforniaGovernment Code Section 54954.2(a) or Section 54956.


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MINUTES

MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)Special Meeting

12:30 PM, Monday, December 9, 2013SEASIDE COUNCIL CHAMBER

440 HARCOURT AVESEASIDE, CA 93955

MONTEREY, CALIFORNIA

Directors Present: Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala

Directors Absent: None

Staff Present: Executive Director, Legal Counsel, Clerk, Consultant Alex Wesner

ROLL CALL

President Della Sala called the meeting to order at 12:34 p.m.

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

Vice President Burnett reported regarding the California Public Utilities workshop on December2, 2013 indicating the focus of questioning was regarding the size of the desal facility and thathe had the opportunity to speak about the Authority position of sizing and the need to havewater for lots of record and economic rebound. Director Pendergrass spoke to the passing ofMonterey Peninsula Water Management District former General Manager Darby Fuerst.Executive Director Cullem spoke to the TAC Special Meeting that preceded this meeting andindicated that their recommendation will be provided at the appropriate time on the agenda.

PUBLIC COMMENTS

President Della Sala invited public comments and had no requests to speak

APPROVAL OF MINUTES

On motion by Director Pendergrass and Seconded by Director Rubio and approved by thefollowing vote the Authority approved the minutes of October 31, 2013 Regular Meeting,November 14, 2013 Special Meeting and November 14, 2013 Regular Meeting.

AYES: 6 DIRECTORS:Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala

NOES: 0 DIRECTORS: NoneABSENT: 0 DIRECTORS: NoneABSTAIN: 0 DIRECTORS: NoneRECUSED: 0 DIRECTORS: None

1. October 31, 2013 Special Meeting

Action: Approved

2. November 14, 2013 Special Meeting

Action: Approved

3. November 14, 2013 Regular Meeting


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MPRWA Minutes Monday, December 9, 2013

Monterey Peninsula Regional Water Authority

Special Meeting Minutes - Monday, December 9, 20132

Action: Approved

AGENDA ITEMS

4. Review, Discuss and Provide Recommendations on draft SPI Report to the Monterey PeninsulaWater Supply Project (MPWSP) Design Build Consultant selection process (Alex Wesner)

Executive Director Cullem introduced Alex Wesner, Separation Processes Inc (SPI) who wascontracted by the Governance Committee Members to participate in the selection process forthe design build firm for the Monterey Peninsula Water Supply Project. Mr. Wesner provided adetailed presentation of his involvement in the selection process for the Design Build contractfor the MPWSP on behalf of the Governance Committee. His role was to review relevantdocuments, including statement of qualifications, Request for Proposals, proposal responses,questionnaire response and evaluation reports. He also attended meetings including interviewswith the contractors, proposal scoring sessions and negotiations with selected Design Build firm.

Mr. Wesner spoke to the technical specifications that were included in the contract negotiationprocess and provided evidence of the justifications for selection of the firm CDM including price,design ideas and site plan. He explained that the process was prescriptive to respond to specific

technical criteria yet allowed the bidders to submit voluntary alternate proposals for flexibility.

Mr. Wesner then provided the following schedule highlights proposed by the selected contractorCDM (*This time frame is contingent upon the success of the test wells.) then answeredquestions from the Directors.

GWR Capacity Decision: October 2015 Final Design/Construction Start Nov 2015 Initial Start up at for 6.4 MGD Sept 2017 Final Start up for 9.6 MGD March 2018

Director Edelen spoke in support of the design build selection process with regards to flexibilityand interaction with the project opportunities and proposals. He indicated that Cal Am should becongratulated for the flexibility which resulted in detailed responses and unanticipated financialbenefits. Vice President and TAC Chair Burnett read an email from Legal Counsel McLaughlininto the record indicating Attorney Wes Strickland reviewed the proposed contract andconcluded that the agreement was well drafted and fair. One further item is being exploredregarding meeting coordination, but feels it is ripe for approval by the Governance Committee.

President Della Sala expressed surprise by the minimal difference in the unit cost between the6.4 MGD and 9.6 MGD facility and then questioned the level of electricity needed for operatingthe two proposed systems. Mr Wesner indicated that energy usage figures were outside thescope of the proposal but all projects were required to have efficiently operating equipment.

President Della Sala invited public comments.

David Lifland spoke to the cost of the slant wells and brine disposal not included in theproposals. Spoke to the pre-filter and the iron and manganese issue indicating that longterm operations will still need them and he questioned the capacities of the proposedsystems, speaking in support of expansion capabilities. Finally, he questioned thewarranty policy if it could include replacement or proper maintenance.


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Chair Burnett reported on the recommendations made by the TAC at the previous meeting andExecutive Director Cullem spoke to the following additional suggestions to be recommended tothe Governance Committee.

Recommended changes to the contract:1) Request Cal Am to look into locking-in the price of reduction in the event the

filters are not needed if iron and manganese are not needed and any other areas

that could be locked inSuggestions for further review:

2) Looking at oversight of quality control and QA3) Clarification when the value engineering exercise begins4) Identify the critical path schedule that the public agencies and the public can look

to ensure the project stays on schedule

Director Kampe questioned exactly what is included in Quality Assurance or Quality Control andquestioned if an analysis was doing to determine if savings on capital costs has any impact onoperational costs.

Mr. Wesner responded to technical questions asked about the process and the treatment

needed under specific circumstances.

On motion and approved by the following vote the Monterey Peninsula Regional Water Authorityaccepted the TAC recommendation as the Director recommendation to be forwarded to theGovernance Committee as follows.

To endorse the selection of CDM Smith for the design build team with theexception of the potential for a credit for the pre filtration if not necessary based onwater quality test, as well as to consider inclusion into the contract for QualityAssurance to be conducted by Cal Am or its representative.

AYES: 6 DIRECTORS:

Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala


5. Discuss and Provide direction to Water Authority Vice-President Burnett on the Design-BuildSelection Scheduled for discussion at the at the Governance Committee meeting on Dec 11,2013 (Burnett)Action: Item Tabled

On motion by Director Kampe and Seconded by Directors Edelen and Rubio and passed by thefollowing vote, the Authority approved tabling this item:

AYES: 6 DIRECTORS:Burnett, Edelen, Kampe, Pendergrass, Rubio, Della Sala



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6. Receive Report, Discuss and Provide Direction on Alternates Funding Scenarios as Related toCost of Water (Cullem)

Executive Director Cullem spoke to the item and gave a brief presentation which recommendedthat the Authority review the alternative funding scenarios (as outlined in the attachmentincluded in the packet) and provide direction as to how to determine the costs impact to theaverage customer for water usage. The projected cost increase associated with the MPWSP

provided to the CPUC on December 2, 2013 indicating increases could range from $32 to $52per month. Executive Director Cullem answered requested guidance from the Directors on howbest to calculate and communicate these issues to the public.

Director Burnett added that the TAC will take up the issues as well as will work with theMonterey Peninsula Water Management District to determine and communicate how this willimpact the individual water rate payers and bring it back before the Directors. Executive DirectorCullem spoke to the different usage categories that will be addressed. Director Edelen clarifiedthat these calculations would be based on the 9.6 MGD facility not the smaller facility plus GWRor ASR.

President Della Sala opened the item to public comment.

George Riley spoke as a member of the public that public awareness will happen whenthe first bill is received with the water increase included. He expressed concerned aboutfinancing $83 million dollars and that more money is being set aside for water reclaimingprojects over water supply projects and thinks that the projections of getting funding isoverly optimistic.

Director Kampe questioned how and if the financial liability of the projects (GWR/Desal/ASR)will be calculated which must be considered in the overall solution.

Mr. Cullem spoke to the analysis that will be done regarding the costs of the GWR project,similar to that of the desal project noting there will be capital costs, but also savings in operating

costs, therefore a net present value and total cost analysis will reveal the best results as capitalcosts is only a small part of the total project cost analysis.

Direction was provided and no action was taken.

ADJOURNMENT

The Meeting was adjourned at 2:13 p.m.

ATTEST:

Lesley Milton, Clerk of the Authority Chuck Della Sala, MPRWA President


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MONTEREY PENINSULA REGIONAL

WATER AUTHORITY

CERTIFICATE OF APPRECIATION

FOR OUTSTANDING CONTRIBUTIONS

Whereas,The Board of Directors of the Monterey Peninsula Regional Water Authority

hereby wishes to express its heartfelt appreciation to Deanna Allen for her outstanding

contribution to the operation of the Water Authority as its Finance Specialist from February

2012 to January, 2014.

Whereas,Deanna worked tirelessly to process invoices, make and receive payments, and

to maintain all Authority finance records as an unpaid extra duty in her full time position at

the City of Carmel by the Sea. Despite her workload at the City, Deanna never failed to provide

timely and accurate information on expenditures and receipts and she managed to keep the

Authority in the black throughout 2013.

Whereas,Her professionalism competence was confirmed by the successful completion

of the Authority Audit for Fiscal Year 2012-2013 and 2012.

Therefore,The Board of Directors commends Deanna for her hard work and dedicated

service to the Water Authority and wishes her continued success in the future.

Chuck Della Sala, President Jason Burnett, Vice President Jerry Edelen, Treasurer

Ralph Rubio, Secretary David Pendergrass, Director Bill Kampe, Director


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Monterey Peninsula Regional Water AuthorityAgenda Report

Date: January 09, 2014

Item No: 3.

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FROM: Executive Director Cullem

SUBJECT: Authorize Contract Extension for Brownstein, Hyatt, Farber and Schreck for LegalServices

RECOMMENDATION:

It is recommended that the Monterey Peninsula Regional Water Authority (MPRWA) adoptResolution 2014-01 approving Brownstein Hyatt Farber Schreck, LLP as Attorney of Record forthe period January 1, 2014through December 31, 2014, authorizing the Authority President toexecute a contract with Brownstein, and approving a budget increase of $100,000 accordingly.

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.

Settlement agreements in May, June, and July 2013 during the California Public Utilities

Commission (CPUC) process for considering Cal-Ams Monterey Peninsula Water Supply

Project (MPWSP) involved considerable participation by Brownstein on behalf of the Authority.

To address requirements through the remainder of the calendar year, the Authority extended

the Brownstein contract to December 31, 2013 at its meeting of September 12, 2013.

The CPUC process, as well as negotiations with the State Water Resources Control Board on

the Cease and Desist Order, will continue to require a substantial amount of legal work in 2014.

To insure continuity in Attorney of Record services, the Executive Director recommends the

Authority extend the contract with Brownstein through 31 December 2014.

BUDGET CONSIDERATIONS:

On December 5, 2013, Brownstein provided the Authority with an estimate of legal expenses by

calendar quarter in 2014. For the balance of FY 2013-2014 (January-June 2014), the estimate

is between $77,000 and $121,000. The total estimate for all of CY 2014 ranges between$124,000 and $194,000. Of course, actual expenses depend upon legal requirements which are

not yet fully determined.

As of December 31, 2013, approximately $21,000 remains in the FY 2013-2014 budget for

Attorney of Record Services. Accordingly, an additional $100,000 will be needed for CY 1 and 2.

Thus, the revised budget for Attorney of Record Services for FY 2013-2014 will total $121,000.


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Since the Water Authority is awaiting a contribution of $83,300 in approved funding from

Monterey County, it is not necessary to adjust the City contributions at this time.

Funding for CY quarters 3 and 4 will be addressed as part of the FY 2014-2015 budget process.

Resolution 2014-01 approves an extension of Brownstein as Attorney of Record through

December 31, 2014 and authorizes the Authority President to execute a contract with

Brownstein accordingly. It also approves an additional $100,000 in the FY 2013-2014 budget for

Attorney of Record services.

ATTACHMENTS:

Resolution 2014-01

Sample contract for legal services


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MPRWA RESOLUTION NO. 2014-__

A RESOLUTION OF THE MONTEREY PENINSULA REGIONAL WATERAUTHORITY

ACKNOWLEDGING, BROWNSTEIN HYATT FARBER SCHRECK,LLP ASATTORNEY OF RECORD FOR THE MONTEREY PENINSULA REGIONAL WATER

AUTHORITY AND AUTHORIZING THE PRESIDENT TO EXECUTE A CONSENTAND WAIVER OF CONFLICT OF INTEREST

WHEREAS, Brownstein Hyatt Farber Schreck,LLP(Brownstein)has beenrequested to represent the Monterey Peninsula Regional Water Authority (MPRWA) asAttorney of Record; and

WHEREAS, Brownsteinis currently acting as special council for the City ofCarmel by the Sea; and

WHEREAS, Brownstein and MPRWA recognize the potential conflict of interestwhich may arise as a result of Brownsteins legal representation of MPRWA and theCity of Carmel; and

WHEREAS, MPRWA wishes to acknowledge Brownsteinas Attorney of Recordfor MPRWA; and

WHEREAS, the President of MPRWA and members of the MPRWA Board ofDirectors have reviewed a letter from Brownstein indicating that Brownstein does notbelieve that its legal services for the Monterey Peninsula Regional Water Authority willhave any impact on its full and effective representation of each party, and does notbelieve it has knowledge of any confidential information from any party which would bematerial or relevant to its representation of MPRWA, the City of Carmel by the Sea; and

WHEREAS, Brownstein recognizes that by concurrently representing theMPRWA, 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 itto make full disclosure to all parties, could be subject to disqualification fromrepresenting any party, and at such time it would be necessary for each party to seekindependent legal counsel; and

WHEREAS, the City of Carmel by the Sea has passed their respectiveResolutions and their respective Mayors have executed the Consent and Waiver ofConflict of Interest; and

WHEREAS, the President and Board of Directors have reviewed this request


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with independent legal counsel;

WHEREAS, according to Rule 3-310 of the California Rules of ProfessionalConduct applicable to California lawyers which requires informed written consent of all

represented parties because of concurrent representation, MPRWA recognizes thatBrownstein is the special legal counsel for the City of Carmel by the Sea; and

WHEREAS Board of Directors wishes to authorize the President to execute aConsent and Waiver of Conflict of Interest, and hereby acknowledges Brownstein asAttorney of Record for the Monterey Peninsula Regional Water Authority.

NOW, THEREFORE, BE IT RESOLVED, that the President of MPRWA is herebyauthorized to execute on behalf of MPRWA a Consent and Waiver of Conflict of Interestthereby acknowledging Brownstein as Attorney of Record for the Monterey PeninsulaRegional Water Authority.

NOW, THEREFORE, BE IT FURTHER RESOLVED, that the President ofMPRWA is hereby authorized to execute on behalf of MPRWA a contract withBrownstein for services as Attorney of Record for the Monterey Peninsula RegionalWater Authority.

PASSED AND ADOPTED BY THE MONTEREY PENINSULA REGIONALWATER AUTHORITY this ____day of ____ 2014, by the following vote:

AYES: 0 DIRECTORS:NOES: 0 DIRECTORS:ABSENT: 0 DIRECTORS:ABSTAIN: 0 DIRECTORS:

APPROVED:

ATTEST:

Chuck Della Sala, President

Lesley Milton, Clerk


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DRAFT-January 9, 2014

EMPLOYMENT AGREEMENT FOR LEGAL SERVICES

THIS AGREEMENT, made and entered into this ___ day of _____________, 2014, by and

between the MONTEREY PENINSULA REGIONAL WATER AUTHORITY, hereinafterMPRWA, and the LAW OFFICES of BROWNSTEIN HYATT FARBER SCHRECK, LLP,hereinafter referred to as "Attorney", both of which understand as follows:

A. Term: The term of this Agreement shall be for one (1) year commencing January 1,2014, and shall terminate on December 31, 2014, unless terminated pursuant to paragraph H. of this

Agreement.

B. Compensation. Attorney will provide legal services to MPRWA at an average rate of

no more than $350.00 per hour.

C. Billing and Reimbursement of Costs. An accounting of services and hours will be

provided to MPRWA on a monthly basis. Attorney shall be reimbursed for actual out-of-pocketexpenses and costs advanced or paid on behalf of the MPRWA, including court reporter fees and

charges, court costs, and costs of outside investigators or experts pertaining to MPRWA litigation.Travel to conduct MPRWA related business expenses shall be billed as actual out-of-pocket costsunless otherwise negotiated. There will be no charge for actual travel time.

D. Budget. Attorney will not accrue costs for legal services in excess of $49,000between January 1, 2014 and March 31, 2014 and in excess of $72,000 between April 1, 2014 and

June 30, 2014 without prior approval of the Authority Executive Director. Services after June 30,2014 are subject to adoption of an Authority budget for FY 2014-2015.

E. Ordinary Services. Legal advice and legal opinions to MPRWA as outlined in theAmendment to Agreement for Legal Services dated December 5, 2013 (Exhibit A to this Agreement)and Brownstein Hyatt Farber Schreck, LLP Standard Terms and Conditions (Exhibit B to this

Agreement).

F. Extraordinary Legal Services. Preparation of complex legal documents, representing

MPRWA in court appearances, litigation, or in proceedings before other public or administrativebodies, or legal services provided to any independent or separate agency or entity of government notoperated as an integral part of MPRWA.

G. Miscellaneous. MPRWA recognizes that Attorney is a private law practice currently

located in Santa Barbara, California, and will retain that office as its principal place of business. Inaddition, MPRWA recognizes Attorney also represents and advises other public entities uponrequest. Attorney will submit conflict waivers to MPRWA whenever such potential arise during the


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term of this contract.

H. Association of Special Legal Counsel. MPRWA and Attorney recognize, that fromtime to time, it may become necessary to associate with special legal counsel for matters involving

litigation, labor negotiations, worker's compensation personnel or bond issue proceedings and other

matters where either MPRWA Board of Directors or Attorney feel effective representation requiresspecial legal counsel.

I. Termination. Either party may terminate this Agreement without cause by providing

written notice to the other party in the manner set forth in item I. of this Agreement at least 30 daysprior to the effective date of termination.

J. Notices. All notices herein provided to be given, or which may be given by eitherparty to the other, shall be considered fully received when made in writing and deposited in theUnited States mail, certified and postage prepaid, and addressed to the respective parties as follows:

MPRWA: ATTORNEY:

President, Board of Directors Russell M. McGlothlinMonterey Peninsula Regional BROWNSTEIN HYATT FARBER SCHRECK, LLP

Water Authority 21 East Carrillo Street

580 Pacific Street Santa Barbara, CA93101Monterey, CA 93940

K. Immunity. As an authorized representative of MPRWA, Attorney shall be recognizedas having rights to any immunity MPRWA is entitled to. In no event shall any duties contained in

this Agreement, or otherwise herein, negate any legal protections or immunities available to the

parties under local, state or federal law.

IN WITNESS WHEREOF, MPRWA has caused this agreement to be signed and executed onits behalf by its President, and duly attested by its Clerk; and the Attorney has signed and executedthis agreement in duplicate originals the day and year first hereinabove written.

MPRWA

____________________________Chuck Della Sala, President

ATTORNEY:ATTEST:

_____________________ _________________________Russell M. McGlothlin Clerk of the Board


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015621\0002\10889833.1

Memorandum

DATE: December 5, 2013

TO: Monterey Peninsula Regional Water Authority

FROM: Russell M. McGlothlin

RE: Estimated 2014 Budget for Legal Services from Brownstein Hyatt Farber Schreck

You have requested that we estimate the budget for legal services from our firm for calendar year 2014.The attached table estimates the 2014 budget for our anticipated representation of the MontereyPeninsula Regional Water Authority (Authority) with respect to: (1) the pending application by CaliforniaAmerican Water for issuance of a Certificate of Public Convenience and Necessity from the CaliforniaPublic Utilities Commission for the proposed Monterey Peninsula Water Project (Application 12.04.012);and (2) discussions and negotiations with the State Water Resources Control Board concerningoperation of the Cease and Desist Order (SWRCB Order 2009-0060).

The table estimates the budget for the principal categories of work that we anticipate in 2014 and issegregated by quarter. Additional work, either for these proceedings, but beyond the matters listed, orwork unrelated to these proceedings, may necessitate expenditures beyond those estimated below.

The variance between the low and high estimates reflects the inherent uncertainty concerning thescope of necessary work. Where possible and appropriate we will seek to coordinate with other entities(e.g., MPWMD) to ensure efficient and cost-effective representation.


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2015621\0002\10889833.1

Estimated Budget for CPUC A.12.04.019 and SWRCB CDO (2014)

Task/Matter Quarter Low High

Briefing on Settlement Agreement, Including JurisdictionalIssues Pertaining to Governance Committee

1 $6,000 $9,000

Prepare and Submit Comments on Draft EIR 1 $8,000 $12,000

Securitization Legislation 1 $3,000 $5,000Prepare for and Attend Quarterly Check-in Call with SettlingParties

1 $500 $2,000

Efforts re Modification of CDO 1 $6,000 $9,000

General Case/Matter Management Issues 1 $8,000 $12,000

Subtotal Q1 $31,500 $49,000

Opening and Reply Briefing 2 $10,000 $15,000

Review and Correspondence re Final EIR 2 $3,000 $5,000

Comments on Proposed Decision $10,000 $15,000

Securitization Legislation 2 $3,000 $5,000

Ex Parte Meeting(s) (Not Certain) 2 $6,000 $9,000

Prepare for and Attend Quarterly Check-in Call with SettlingParties

2 $500 $2,000



Subtotal Q2 $46,500 $72,000

Ex Parte Meeting(s) (Not Certain) 3 $3,000 $6,000

Review and Correspondence re CPCN Phase I 3 $4,000 $6,000


3 $500 $2,000



Subtotal Q3 $21,500 $35,000

GWR Phase - Testimony 4 $10,000 $15,000


4 $500 $2,000


General Case/Matter Management Issues 4 $8,000 $12,000Subtotal Q4 $24,500 $38,000

Total 2014 $124,000 $194,000


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3015621\0002\10889833.1


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Item No: 4.

06/12


SUBJECT: Receive Update on Pro-Rated Cost Share Requests from the County ofMonterey

RECOMMENDATION:

It is recommended that the MPRWA receive an update on requests to Monterey Countyfor pro-rated cost shares for the final Water Authority budget for FY 2012-2013 and foradopted budget for FY 2013-2014.

DISCUSSION:

At its special and regular meetings of November 14, the Water Authority authorized arequest to the Monterey Board of Supervisors for a pro-rated (fair share) contribution forthe costs of SPIs participation in the Cal-Am design-build contractor selection processas well as for on-going Water Authority expenses. Approximately 34% of Cal-Amcustomers reside outside the incorporated areas but have been represented by theAuthority without a fair-share contribution of the County.

Attached are copies of two Water Authority letters requesting County approval of fairshare contributions.

FISCAL IMPACT:

The letter of December 2, 2013 would provide approximately $12,000 in reimbursementto the Water authority. The letter of January 6, 2014, however, requests new funding forthe Authority totaling $306,000 of which $83,300 had already been approved by (but notyet invoiced to) the Board of Supervisors on September 11, 2012.

ATTACHMENTS:

Water Authority letters of December 2, 2013 and January 6, 2014.


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580 PACIFIC ST, ROOM 6 MONTEREY CALIFORNIA 93940 www.mprwa.org

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

December 2, 2013

Fernando Armenta, ChairMonterey County Board of Supervisors168 W. Alisal St.Salinas, CA 93901

Directors:

Chuck Della Sala, PresidentJason Burnett, Vice President

Ralph Rubio, Secretary

Jerry Edelen, TreasurerBill Kampe, Director

David Pendergrass, Director

Executive Director:Jim Cullem, P.E.

RE:Fair Share Reimbursement for Engineering Support Services for DB Selection

Dear Mr. Armenta,

As you know, Supervisor Dave Potter represents the County on the Monterey Peninsula Water SupplyProject (MPWSP) Governance Committee. The Monterey Peninsula Regional Water Authority (MPRWA)is represented by Carmel Mayor Jason Burnett, and the Monterey Peninsula Water Management District(MPWMD) is represented by Director Jeanne Byrne.

At the end of October, consistent with the current Governance Agreement, the Committee received aninvitation from the California American Water Company (Cal-Am) to provide a representative of thecommittee to participate in Cal-Ams interview and selection process for a Design-Build (DB) firm for thedesalination (Desal) plant component of the MPWSP.

Members of the Governance Committee concluded that the representative should be a technicallyqualified professional with specific experience with Desal and the design-build process, as well asknowledge of the MPWSP. The interviews were to take place 5-6 November 2013, so time was of theessence. Given the short notice and the qualification requirements, it was agreed to execute a non-competitive contract with Separation Processes, Inc. (SPI), the firm that conducted the comparative Desalstudy in 2012.

Alex Wesner, P.E. is the SPI representative and will brief Governance Committee members as theprocess moves forward. He will bill for his time at a rate of $201 per hour. Labor costs are estimated at$30,000, direct overhead costs (including travel) estimated at $4000, and a project contingency would be$2000. Total costs would not exceed $36,000. Since the Governance Committee must rely on its memberagencies for execution and funding of contracts, agencies have been asked to share the cost equally($12,000 each).

The only one of the three public agencies that could meet quickly enough to award a contract prior to thestart of the interviews was the MPRWA, which held a special meeting on October 31 to approve thecontract with SPI for Phase 1 of the work at a price not-to-exceed $12,000 (the Water Authority share).Inclusion of Phases 2 and 3 were to be contingent on commitments from the MPWMD and the County.The contract with SPI dated November 5, 2013 and scope of work are attached.


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November 12, 2013

2

As of November 12, SPI had completed most of the Phase 1 work and needed a contract change order toproceed with Phases 2 and 3 which were fast approaching. Since representatives of MPWMD and theCounty had indicated their agencies would pay their fair share as quickly as could be internally approved,the Water Authority issued a change order to the SPI contract at its meeting of November 14 to completePhases 2 and 3, increase the contract total price to not-to-exceed $36,000, and extend the completiondate to March 31, 2014.

It is requested that the Monterey County Board of Supervisors approve reimbursement of the Water

Authority one third (1/3) the final amount of the SPI contract, not-to-exceed $12,000 in cost to the County.

Sincerely,

Chuck Della Sala, PresidentMonterey Peninsula Regional Water Authority

C: Charles McKee, County Counsel

Attachment:Water Authority contract with SPI for Consultant Support Services dated Nov 5, 2013 including Scope ofWork


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580 PACIFIC ST, ROOM 6 MONTEREY CALIFORNIA 93940 www.mprwa.org

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

January 6, 2014

Fernando Armenta, ChairMonterey County Board of Supervisors168 W. Alisal St.Salinas, CA 93901

Directors:

Chuck Della Sala, PresidentJason Burnett, Vice President

Ralph Rubio, Secretary

Jerry Edelen, TreasurerBill Kampe, Director

David Pendergrass, Director

Executive Director:Jim Cullem, P.E.

RE: Pro-Rata Share of Costs for Water Authority Representation and Invitation to Participate

Dear Supervisor Armenta:

As you know, the Monterey Peninsula Regional Water Authority (MPRWA) was created by aJoint Exercise of Powers Agreement on February 12, 2012 and originally consisted of the six cities onthe Monterey Peninsula: Carmel-by-the-Sea, Del Rey Oaks, Monterey, Pacific Grove, Sand City andSeaside. Since 34% of California American Water Company (Cal-Am) customers reside within non-incorporated areas, a restatement of the Agreement was adopted by the Water Authority on February14, 2013 to allow membership by Monterey County.

Although Supervisor Dave Potter represents the County on the Monterey Peninsula WaterSupply Project (MPWSP) Governance Committee, the Water Authority also separately considersissues impacting residents of the unincorporated areas. Accordingly, we would again like to invite theBoard of Supervisors to name a representative to the MPRWA Board.

In recognition of Water Authority efforts on behalf of County residents, the Board ofSupervisors approved a pro-rata contribution of $83,300 on 11 September 2012, based on an initialFY 2012-2013 MPRWA budget of $245,245. To date, the Authority has not yet invoiced the County forthose funds.

The FY 2012-2013 MPRWA budget was subsequently increased to $476,726 to cover thecosts of a part-time Executive Director and a contract for expanded Attorney of Record expenses insupport of Authority participation in the California Public Utilities Commission (CPUC) settlementnegotiations on Cal-Ams application A.12-04-019 for a Monterey Peninsula Water Supply Project(MPWSP).

The Countys revised FY 2012-2013 pro-rata share at 34% would be $162,000 or an increaseof $78,700 over the previously approved contribution.

The FY 2013-2014 MPRWA budget of $423, 680 was adopted on April 25, 2013. TheCountys pro-rata share at 34% is $144,000.


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January 6, 2014

2

Accordingly, the Water Authority hereby requests that the Board of Supervisors approve arevision to its fair-share (pro-rata) contribution to the MPRWA budget for FY 2012-2013 in the amountof an additional $78,700 and approve its pro-rata contribution to the MPRWA budget for FY 2013-2014 in the amount of $144,000.

Sincerely,

Chuck Della Sala, PresidentMonterey Peninsula Regional Water Authority

C: Lew Bauman, County Administrative OfficerCharles McKee, County Counsel


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Item No: 5.

06/12

FROM: Executive Director Cullem, Prepared by Clerk Milton

SUBJECT: Approve and File Checks Through December 31, 2013

RECOMMENDATION:

It is recommended that the MPRWA approve and file the accounts payable paymentsmade during the period of July 1, 2013 through December 31, 2013. Total AccountsPayable and Payroll for the above referenced period is $222,300.21. It is recommendedthat the Authority approve and file the attached checks.

DISCUSSION:

At its meeting on September 12, 2013, the Authority Board approved a staffrecommendation to provide the Directors a listing of general checks issued since the lastreport so that it can inspect and confirm these checks. Each invoiced expense has beenreviewed and approved by the Executive Director and Finance personnel and confirmedby the President or Vice President prior to payment to insure that it conforms to theapproved budget.

The following checks are hereby submitted to the Authority for inspection andconfirmation.

$13,500 to Perry and Freeman For Legal Services $800 for Opinion Editorial Editing $300 to Sunset Center for CPUC meeting space $1,312.5 to AMP for Video Recording and Broadcasting 157,090.19 for Special Legal Counsel of Brownstein, Hyatt, Farber and Schreck $828.74 to The City of Monterey for Administrative Expenses Reimbursement

(Meeting space for CPUC meeting at Marriott, Website Renewal, etc) $6,766.90 to Separation Processes for Project Evaluation/Consulting testimony $6,701.88 for Insurance Expenses $35,000 for Clerical and Administrative Services Contract (annual payment)

FISCAL IMPACT

The listed checks have been budgeted and paid from the various funds, as appropriate.

ATTACHMENT

Compiled list of general checks issued for the period described above.


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Type Date Name Item Account Paid Amount Original Amount

Bill Pmt -Check 8/8/2013 Don Freeman Wells Fargo Checking -4,500.00

Bill 7/1/2013 5110 Independent Legal Counsel Serv -2,250.00 2,250.0


TOTAL -4,500.00 4,500.00

Bill Pmt -Check 8/8/2013 Lewis A. Leader Wells Fargo Checking -800

Bill 8/1/2013 5500 OUTSIDE SERVICES -800 800

TOTAL -800 800

Bill Pmt -Check 8/8/2013 Sunset Cultural Center, Inc. Wells Fargo Checking -300


TOTAL -300 300

Bill Pmt -Check 8/2/2013 Access Monterey Peninsula Wells Fargo Checking -900


TOTAL -900 900

Bill Pmt -Check 9/10/2013 Brownste in Hya tt Farber Schreck Wells Fargo Checking -110,120.81

Bill 4/16/2013 5210 Attorney of Record(CPUC) -18,385.39 18,385.39




5860 Travel Expense -12.25 12.25

5210 Attorney of Record(CPUC) -3,181.68 3,181.68

TOTAL -110,120.81 110,120.81

Bil l Pmt -Check 10/24/2013 Brownstein Hyatt Farber Schreck Wel ls Fargo Checking -23,842.99



TOTAL -23,842.99 23,842.99

Bill Pmt -Check 10/24/2013 City of Monterey Rev Division Wells Fargo Checking -828.74

Bill 8/27/2013 5300 STAFF SERVICES Admin/Clerical -828.74 828.74

TOTAL -828.74 828.74





TOTAL -6,750.00 6,750.00

Bill Pmt -Check 10/24/2013 Separation Processes, Inc. Wells Fargo Checking -6,766.90

Bill 4/3/2013 5510 Project Evaluation Study -871.8 871.8

Bill 5/6/2013 5510 Project Evaluation Study -2,679.10 2,679.10

Bill 6/5/2013 5510 Project Evaluation Study -3,216.00 3,216.00

TOTAL -6,766.90 6,766.90

Bill Pmt -Check 12/3/2013 Access Monterey Peninsula Wells Fargo Checking -225


TOTAL -225 225

Bill Pmt -Check 12/3/2013 Alliant Insurance Services Wells Fargo Checking -6,701.88

Bill 9/12/2013 5600 INSURANCE EXP -6,701.88 6,701.88

TOTAL -6,701.88 6,701.88

Bill Pmt -Check 12/3/2013 Brownste in Hyatt Farber Schreck Wells Fargo Checking -23,126.39



Check Detail

All Transactions July 1, 2013 to December 31, 2013


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Bill 10/31/2013 5210 Attorney of Record(CPUC) -105 105


TOTAL -23,126.39 23,126.39

Bill Pmt -Check 12/3/2013 City of Monterey Rev Division Wells Fargo Checking -35,000.00

Bill 11/26/2013 5300 STAFF SERVICES Admin/Clerical -35,000.00 35,000.00

TOTAL -35,000.00 35,000.00



TOTAL -2,250.00 2,250.00

Bill Pmt -Check 12/3/2013 Access Monterey Peninsula Wells Fargo Checking -187.5

Bill 11/22/2013 5500 OUTSIDE SERVICES -187.5 187.5

TOTAL -187.5 187.5

Total Checks Paid -222,300.21


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Item No: 6.

06/12


SUBJECT: Receive Update on Status of Financial Report and Full Opinion Audit for FY2012-2013 and 2012,

RECOMMENDATION:

It is recommended that the MPRWA receive an update on the Full Opinion Audit for Fiscal Year2012-2013 and for 2012 (partial FY 2011-2012)

DISCUSSION:

At its meeting on June 13, 2013, the Water Authority Board approved a staff recommendation toallow completion of the Financial Annual Report and a Full Opinion Audit for FY 2012-13, asrequired by Water Authority Bylaws sections 6.3 and 6.4.1, concurrently with that of the MemberCity conducting the Authority audit. However, staff subsequently determined it would create lessof a potential conflict of interest to select a firm not currently auditing member cities.

Following an informal proposal process, the Executive Director selected McGilloway, Ray,Brown and Kaufman (Kaufman) for the audit and a contract was executed on October 31, 2013.

A time extension for report completion to Dec 31, 2013 and, an extension of the contractcompletion date to March 31, 2014 were approved by the Water Authority on November 14,

2013 in order to provide additional time for any unanticipated audit follow-up after the report wascompleted.

The draft audit was completed on 27 December and reviewed by the Authority Treasurer on 29December. Since no errors were found or corrections made, the audit is considered complete.However, Kaufman has requested an opportunity to brief the Treasurer and the ExecutiveDirector on a Management Letter which should accompany the audit. Since that briefing hasnot yet taken place, the Executive Director will submit the final audit report to the Authority at thenext meeting.


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Item No: 7.

06/12


SUBJECT: Year End Budget Review for Calendar Year 2013

RECOMMENDATION:

It is recommended that the MPRWA receive an update the budget for FY 2013-2014 asof the end of the calendar year (December 31, 2013).

DISCUSSION:

At its meeting of April 25, 2013, the Water Authority adopted a budget of $423,680 forFiscal Year 2013-2014. As of December 31, 2013, the Authority has expendedapproximately $222,000 (52%) of the budget funds.

The contribution from each City was calculated based upon a lesser amount of$341,263 in anticipation of a FY 2012-2013 $82,417 surplus. Unfortunately, that surplusfailed to materialize as a consequence of higher than expected Attorney of Record costsassociated with the CPUC settlement proceedings in the spring of 2013.

In addition, Attorney of Record billings continue as a major expense, but are within thebudget as of December 31, 2013. However, as noted in the staff report for theBrownstein Contract extension, an increase for the Attorney of record in the order of$86,000 will be needed for calendar year 2014. Distribution of Attorney of Recordexpenses between FY 2013-2014 and FY 2014-2015 is yet to be finalized.

As a result of the reduced City assessments discussed above there will be a shortfall infunding for the current fiscal year. However, the Authority has requested a fair-sharecontribution from Monterey County in the amount of $306,000. Of that amount, $83,300has already been approved by the Board of Supervisors. If the County provides its fairshare in the near term, the shortfall would be eliminated.

FISCAL IMPACT:

Accordingly, the Executive Director recommends the Authority defer a revision to theCity assessments until the Authority has received a response from the County to thefair-share funding requests.


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Documents

MPRWA Regular Meeting Agenda Packet 01-09-14