Closed Session Agenda

Monterey Peninsula Regional Water Authority (MPRWA)

7:00 PM, Thursday, April 13, 2017

Council Chambers
580 Pacific Street
Monterey, California
CALL TO ORDER

CLOSED SESSION AGENDA ITEMS

cs1. Performance Evaluations for Executive Director and Authority Legal Counsel - Pursuant to
Government Code 54957

ADJOURNMENT

The Monterey Peninsula Regional Water Authority is committed to including the disabled in all
of its services, programs and activities. In compliance with the Americans with Disabilities Act,
if you need special assistance to participate in this meeting, please contact the Monterey City
Clerks Office at (831) 646-3935. Notification 30 hours prior to the meeting will enable the City
to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.102-
35.104 ADA Title II]. Later requests will be accommodated to the extent feasible. For
communication-related assistance, dial 711 to use the California Relay Service (CRS) to speak
to City offices. CRS offers free text-to-speech, speech-to-speech, and Spanish-language
services 24 hours a day, 7 days a week. If you require a hearing amplification device to attend
a meeting, dial 711 to use CRS to talk to the Monterey City Clerk's Office at (831) 646-3935 to
coordinate use of a device.

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

1
 Agenda
Monterey Peninsula Regional Water Authority (MPRWA)
Director's Meeting

7:00 PM, Thursday, April 13, 2017

Council Chambers
580 Pacific Street, Monterey
Monterey, California

CALL TO ORDER

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

***Adjourn to Closed Session (See additional agenda)***

Adjourn to Regular Meeting

PRESENTATIONS

1. Presentation of Certificate of Appreciation to David Pendergrass for Outstanding Service to

the Community as a Founding Member of the Water Authority - Kampe

PUBLIC COMMENTS
PUBLIC COMMENTS allows you, the public, to speak for a maximum of three minutes on any
subject which is within the jurisdiction of the MPRWA and which is not on the agenda. Any person
or group desiring to bring an item to the attention of the Authority may do so by addressing the
Authority during Public Comments or by addressing a letter of explanation to: MPRWA, Attn:
Monterey City Clerk, 580 Pacific St, Monterey, CA 93940. The appropriate staff person will contact
the sender concerning the details.

CONSENT AGENDA
CONSENT AGENDA consists of those items which are routine and for which a staff
recommendation has been prepared. A member of the public or MPRWA Director may request
that an item be placed on the regular agenda for further discussion

2. Approval of Minutes from March 9, 2017 - Romero

3. Approve and File Authority Checks Through March 31, 2017 - Romero

4. Adoption of Resolution 2017- 01, Approving an Extension of the Contract for Executive
Director Services with Cullem Management Services LLC at a Price Not-to-Exceed
$90,000 for the Period July 1, 2017 to June 30, 2018 - Cullem
 Thursday, April 13, 2017
5. Adoption of Resolution 2017- 02, Approving Donald G. Freeman as Legal Counsel through
June 30, 2018 and Authorizing the Authority President to Execute a Contract Extension
with Perry Freeman at a Price Not-to-Exceed $30,000 - Cullem

6. Receive 3rd Quarter FY 2016-2017 Financial Status Report - Cullem

***End of Consent Agenda***

AGENDA ITEMS

7. Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP) and the Status of Test Slant Well Operations - Crooks

8. Receive Copy of Public Water Now (PWN) Letter to the Water Authority and Approve
Response by the Board President - Cullem

9. Receive Report, Discuss, and Provide Staff Direction on Scope of Future Work for the
Authority Special Counsel, Adopt Resolution 2017-03, Approve Brownstein Hyatt Farber
Schreck as Special Legal Counsel through June 30, 2018, and Authorize the Authority
President to Execute a Contract Extension at a Price Not-to-Exceed $100,000

ADJOURNMENT

The City of Monterey is committed to including the disabled in all of its services, programs and
activities. In compliance with the Americans with Disabilities Act, if you need special assistance
to participate in this meeting, please contact the City Clerks Office at (831) 646-3935.
Notification 30 hours prior to the meeting will enable the City to make reasonable arrangements
to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II]. Later requests will
be accommodated to the extent feasible. For communication-related assistance, dial 711 to use
the California Relay Service (CRS) to speak to City offices. CRS offers free text-to-speech, speech-
to-speech, and Spanish-language services 24 hours a day, 7 days a week. If you require a hearing
amplification device to attend a meeting, dial 711 to use CRS to talk to the City Clerk's Office at
(831) 646-3935 to coordinate use of a device.

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

2
MONTEREY PENINSULA REGIONAL WATER
AUTHORITY

CERTIFICATE OF APPRECIATION
FOR OUTSTANDING SERVICE
DAVID K. PENDERGRASS
The Board of the Monterey Peninsula Regional Water Authority would like to extend its
appreciation for the outstanding contributions you have made as a member of the Water
Authority Board since its inception in February 2012.

Since February 2012, your many years of experience with water supply issues on the
Monterey Peninsula have proved invaluable in Water Authority deliberations and in
guiding the community's efforts to obtain a new potable water source.

Furthermore, your long service on the Board of the Monterey Peninsula Water
Management District allowed you to provide crucial information and insight essential to
insuring both agencies worked collaboratively on the water supply problem.

On the occasion of your retirement as Mayor of Sand City, as well as from secretary of
the Water Authority, you can take pride in having played a critical role in the eventual
resolution of our water crisis and having well and faithfully served our community.

As fellow Mayors and Authority Directors, we want to thank you for a job well done and
to wish you well in the future.

__________________ ________________________ __________________

Bill Kampe, President Ralph Rubio, Vice- President Jerry Edelen, Director

_____________________ __________________
Clyde Roberson, Director Steve Dallas, Director
 M I N U TE S
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Director's Meeting
7:00 PM, Thursday, March 9, 2017
COUNCIL CHAMBERS
580 PACIFIC STREET, MONTEREY
MONTEREY, CALIFORNIA

Directors Present: Director Dallas, Alternate Director Peake, Director Pendergrass, Vice
President Rubio
Directors Absent: Director Edelen, Director Roberson, President Kampe

Staff Present: Executive Director Cullem, Legal Counsel Freeman, Clerk Romero

CALL TO ORDER

Vice President Rubio called the meeting to order at 7:01pm

ROLL CALL

PLEDGE OF ALLEGIANCE

REPORTS FROM BOARD DIRECTORS AND STAFF

Executive Director Cullem reported that Rich Svindland is the new California American Water
(Cal Am) President. He also announced that the Authority sent a comment letter on the
Monterey Peninsula Regional Water Supply Project (MPWSP) draft Environment Impact Report
(DEIR) to the California Public Utilities Commission (CPUC) and the Marine Sanctuary. He
added that Ground Water Replenishment (GWR) is facing challenges from the Central Coast
Water Resources Control Board. He stated that a preliminary invoice for Authority contributions
has been sent to the City Managers in time for budget approval.

Don Freeman reported that last week the California Supreme Court gave a ruling that all public
official records whether on personal email or phone are subject to the Public Records Act
(PRA) for 2 years. He recommended any personal emails or texts re: MPRWA should be sent
to the Authority Clerk so that the records are retrievable for possible PRA requests.

PUBLIC COMMENTS

George Riley said that the Supreme Court ruling about records is going to be very
complicated. He said that he believes that the California American Water (Cal Am)
Monterey Peninsula Regional Water Supply Project (MPWSP) is going to be litigated.
He suggested future discussion with the water management district to initiate an inter-
agency group to come up with an alternate project other than Cal Am's in case their
project gets caught up in litigation and falls through.

Vice President Rubio responded to public comment saying that Water Management Districts
alternate to Cal Am's project is the Deep Water Desal project. Director Pendergrass said that
Cal Am has a 3 prong approach to the water supply project, which includes Aquifer Storage
Recovery (ASR), Ground Water Replenishment (GWR), and the MPWSP desalination plant.
 MPRWA Minutes Thursday, March 9, 2017

CONSENT AGENDA

On a motion by Director Pendergrass, seconded by Director Dallas, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Approved the Consent Agenda:

AYES: 4 DIRECTORS: Dallas, Peake, Pendergrass, Rubio

NOES: 0 DIRECTORS: None
ABSENT: 2 DIRECTORS: Edelen, Roberson
ABSTAIN: 0 DIRECTORS: None
RECUSED: 0 DIRECTORS: None

1. Approve Minutes of Director's Meeting of February 9, 2017 - Romero

Action: Approved

2. Approve and File Authority Checks Through February 28, 2017 - Romero
Action: Approved

3. Approve Contract Change Order #5 with Separation Processes, Inc. to Provide Additional
Technical Input for the Water Authority Comments on the Re-circulated DEIR/DEIS at a Price
Not-to-Exceed $3,000 - Cullem
Action: Approved

4. Approve Amended Water Authority Financial Policies and Procedures - Cullem

Action: Approved

***End of Consent Agenda***

AGENDA ITEMS

5. Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP) and Status of Test Well Operation and Pipeline Construction
Crooks
Action: Received Report

Chris Cook, Engineering Manager at California American Water, gave a presentation on the
MPWSP (project) anticipated schedule, Monterey Pipeline (pipeline), Pipe Bridge Permitting,
and the Test Well. He reported the following:

o The project is currently in the public comment period for the DEIR, which has been
extended to March 29, 2017.

o Project construction will begin Q1 or Q2 of 2018, and is on target to have the pipeline
completed by the end of 2017.

o The pipeline bridge permits were included in the DEIR, and the initial CalTrans
application indicated a need for an aesthetically sensitive bridge with concrete structure.
Cal Am resubmitted an application to Caltrans with a concrete bridge that is more
appropriate.

o The test well has operated over 457 days with an average of 92-93% salinity.

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, March 9, 2017
2
MPRWA Minutes Thursday, March 9, 2017

Alternate Director Peake asked if any cultural artifacts have been found underground during
construction. Mr. Cook responded that some old railroad tracks and pottery were found
but archaeologists deemed them not cultural artifacts. He added that if an artifact was found
they would wait to find out if it has cultural significance. He reported that rain has delayed work
on the pipeline bridge, and Cal Am is sending out letters to residents and businesses in
advance of road work from the pipeline. He said that changeable message signs are also being
used to alert the public, however there will still be delays despite their best efforts.

Executive Director Cullem reported that Cemex may be asked to stop mining sand. Don
Freeman said that the Water Management District and the City of Seaside are monitoring
Cemex as well. Director Pendergrass said that traffic was horrendous on Freemont due to
pipeline construction. Mr. Cook responded that there has been a learning curve to figure out
which intersections to close or not close and what times to help avoid traffic congestion.

PUBLIC COMMENT

George Riley said that visual exposure of the pipe bridge is much worse on the east
side than the west side and asked if there are any plans to change this.

Mr. Cook responded to the comment and said that the slope of the bridge makes it more costly
and complex to change the design to the west side.

ADJOURNMENT

Meeting adjourned at 7:29pm.

ATTEST:

Nova Romero, Clerk of the Authority MPRWA President

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, March 9, 2017
3
Monterey Peninsula Regional Water Authority Date: April 13, 2017
Agenda Report Item No: 3.

FROM: Executive Director Cullem

SUBJECT: Approve and File Authority Checks Through March 31, 2017 - Romero

RECOMMENDATION:

It is recommended that the Authority approve and file the accounts payable payments
made during the period March 1, 2017 through March 31, 2017 with total payments for
the above referenced period of $16,605.00 from the general fund account and authorize
the Directors to sign for such checks.

DISCUSSION:

At its meeting on September 12, 2013, the Authority Board approved a staff
recommendation to provide the Directors a listing of financial obligations since the last
report for inspection and confirmation. Each invoiced expense has been reviewed and
approved by the Executive Director and Finance personnel prior to payment to insure that
it conforms to the approved budget.
The following checks are hereby submitted to the Authority for inspection and
confirmation:
$4,225 to Cullem Management Services for February 2017

$2,500 to Don Freeman for April 2017 retainer

$9,880 to Brownstein Hyatt Farber Schreck for Special Water Counsel

(conference calls, review of DEIR, comment letter)

The bank balances as of March 31, 2017 are sufficient cover the above checks
therefore, staff is recommending approval.

ATTACHMENTS:
None
Monterey Peninsula Regional Water Authority Date: April 13, 2017
Agenda Report Item No: 4.

FROM: Executive Director Cullem

SUBJECT: Adoption of Resolution 2017- 01, Approving an Extension of the Contract

for Executive Director Services with Cullem Management Services LLC at
a Price Not-to-Exceed $90,000 for the Period July 1, 2017 to June 30,
2018

RECOMMENDATION:

It is recommended that the Water Authority Board extend the contract with Cullem
Management Services LLC for Executive Director services for FY 2017 -2018 and adopt
Resolution 2017-01.

DISCUSSION:

At closed session on September 8, 2016, following its ad hoc committee

recommendation, the Water Authority Board approved a contract with Cullem
Management Services LLC for Executive Director (ED) services for the balance of FY
2016-2017.

Since the current contract expires on June 30, 2017, a contract extension for the
upcoming fiscal year is requested. The contract is at Attachment A and Resolution
2017-01 authorizing the extension is at attachment B.

BUDGET CONSIDERATIONS:

The Executive Director (ED) compensation for FY 2017-2018 is budgeted at not-to-

exceed $90,000.

ATTACHMENTS:

A- Contract with Cullem Management Services LLC

B- Resolution 2017-01
C- Contract "Exhibit A" -Scope of Duties

06/12
 ATTACHMENT A

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

CONTRACT FOR EXECUTIVE DIRECTOR SERVICES

THIS CONTRACT is executed this ___ day of _____ 2017, by and between the
MONTEREY PENINSULA REGIONAL WATER AUTHORITY, a California joint powers agency
(hereinafter MPRWA), and CULLEM MANAGEMENT SERVICES, LLC (hereinafter
"CONSULTANT").

IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:

1. Scope. CONSULTANT hereby agrees to provide Executive Director Services to

MPRWA as the scope of services under this Contract, also referred to as "Agreement", as set
forth in the Statement of Work, Exhibit A, attached hereto and incorporated herein by this
reference.

2. Term. The work under this Contract shall commence on 1 July 2017 and be
completed 30 June 2018 unless extended by the parties by written amendment to this
agreement.

3. Compensation. MPRWA shall pay CONSULTANT at a rate of $ 130 per hour

in an amount not-to-exceed a total of $90,000.Consultant shall be reimbursed for actual out-of-
pocket expenses and costs advanced or paid on behalf of the MPRWA. Compensation under
this Contract shall become due and payable thirty (30) days after MPRWAs approval of
CONSULTANTS submission of monthly written invoices.

. 4. Termination. This Agreement may be terminated by either party with or without

cause upon thirty (30) calendar days written notice to the other party.

5. Immunity. As MPRWAs authorized representative, CONSULTANT shall be

recognized as having rights to any immunities it is entitled to. In no event shall any duties
contained in Exhibit A, or otherwise herein, negate any legal protections or immunities available
to the parties under local, state or federal law.

6. Mutual Indemnification.

6.01. Each Party shall indemnify, defend and hold harmless the other Party, to the
extent allowed by law and in proportion to fault, against any and all third-party liability for claims,
demands, costs or judgments (direct, indirect, incidental or consequential) involving bodily
injury, personal injury, death, property damage or other costs or expenses (including reasonable
attorneys fees, costs and expenses) arising or resulting from the acts or omissions of its own
officers, agents, employees or representatives carried out pursuant to the obligations of this
Agreement.

6.02. Each Party shall protect, defend, indemnify and hold harmless the other
Party (including their officials, employees and agents as the same may be constituted now and
from time to time hereafter) from and against any and all liabilities, losses, damages, expenses
or costs, whatsoever (including reasonable attorneys fees, costs and expenses), which may
arise against or be incurred by the other Party as a result of or in connection with any actual or
alleged breach of this Agreement by either Party.
 6.03. Except for any duties either Party owes to the other pursuant to the
provisions of this Agreement, nothing in this Agreement shall be construed to waive any legal
protections or immunities available to the Parties under state or federal law.

7. Insurance.

7.01. Each party shall maintain in effect, at its own cost and expense, the
following insurance coverage provided either through a bona fide program of self-insurance,
commercial insurance policies, or any combination thereof as follows:

a. Commercial General Liability or Public Liability with minimum limits of

$1,000,000 per occurrence and $2,000,000 in the aggregate. Each party shall prove
that is self insured to the limits specified or have its insurance policy endorsed to
name the other party additionally insured.

b. Auto Liability including owned, leased, non-owned, and hired automobiles,

with a combined single limit of not less than $1,000,000 per occurrence and
$2,000,000 in the aggregate.

c. If a Party employs others in the performance of this Agreement, that Party

shall maintain Workers Compensation in accordance with California Labor Code
section 3700 with a minimum of $1,000,000 per occurrence for employers liability,
for the duration of time that such workers are employed.

d. Each Party shall maintain in effect throughout the term of this agreement all
risk property insurance, excluding earthquake and flood, on all permanent property of
an insurable nature in an amount sufficient to cover at least 100% of the replacement
costs of said property.

e. CONSULTANT shall maintain Professional Liability insurance in effect

throughout the term of this contract with limits of not less than $1,000,000
per claim and $2,000,000 in the aggregate.

7.02. All insurance required by this Agreement shall:

a. Be placed (1) with companies admitted to transact insurance business in the

State of California and with a current A.M. Best rating of no less than A:VI or with
carriers with a current A.M. Best rating of no less than A:VII; or (2) disclosed self-
insurance with limits acceptable to the other party;

b. Provide that each Partys insurance is primary and non-contributing insurance

to any insurance or self-insurance maintained by the other party and that the
insurance of the other party shall not be called upon to contribute to a loss covered
by a partys insurance; and

c. Subsequent to execution of this Agreement, each party shall file certificates of

insurance with the other party evidencing that the required insurance is in effect.

-2-
 8. Non-discrimination. During the performance of this Agreement, City, and its
subcontractors, shall not unlawfully discriminate against any person because of race, religious
creed, color, sex, national origin, ancestry, physical disability, mental disability, medical
condition, marital status, age (over 40), or sexual orientation, either in Citys employment
practices or in the furnishing of services to recipients. City shall ensure that the evaluation and
treatment of its employees and applicants for employment and all persons receiving and
requesting services are free of such discrimination. City and any subcontractor shall, in the
performance of this Agreement, fully comply with all federal, state, and local laws and
regulations which prohibit discrimination. The provision of services primarily or exclusively to
such target population as may be designated in this Agreement shall not be deemed to be
prohibited discrimination.

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

MPRWA: CONSULTANT:
Bill Kampe, President James M. Cullem, Principal
MPRWA Cullem Management Services, LLC
c/o City of Monterey 5 Greenwood Rise
580 Pacific Street Monterey, CA 93940
Monterey, CA 93940

10. Entire Contract. This Contract constitutes the entire contract between the parties
hereto and supersedes any and all prior contracts, whether oral or written, relating to the subject
matter thereof. Any amendment of this Contract will be effective only if it is in writing signed by
the authorized representatives of both parties hereto. Each party is entering into this contract
based solely upon the representations set forth herein and upon each party's own independent
investigation of any and all facts such party deems material. Neither MPRWA nor CONSULTANT
shall be deemed to have waived any obligation of the other, or to have agreed to any
modification to this contract unless it is in writing, and signed by the authorized representative of
the party giving the waiver. A waiver of any of the terms and conditions of this Agreement shall
not be construed as a waiver of any other terms or conditions in this Agreement.

11. Assignment of Interest. The duties under this Contract shall not be assignable,
delegable, or transferable without the prior written consent of MPRWA. Any such purported
assignment, delegation, or transfer shall constitute a material breach of this Contract upon
which MPRWA may terminate this Contract and be entitled to damages.

12. Conflict of Interest/Political Reform Act. CONSULTANT shall at all times

avoid conflicts of interest, or the appearance of conflicts of interest, in the performance of this
Contract. CONSULTANT hereby certifies that neither it nor its SUBCONSULTANTS now have,
nor will they acquire, any financial or business interest that would conflict with the performance
of services under this contract. During the term of this Contract CONSULTANT shall not directly
nor indirectly, either as a partner, employer, employee, consultant, principal, and agent or in any
individual or representative of MPRWA, engage or participate in any business or voluntary
activity on behalf of any other party on any property located within Monterey County without
notification to the MPRWA.
-3-
 13. Statement of Economic Interest. If MPRWA determines CONSULTANT
comes within the definition of CONSULTANT under the Political Reform Act (Government Code
Sections 87100 et seq.) CONSULTANT shall complete and file, and shall require any other
person doing work under this Contract, to complete and file a "Statement of Economic Interest"
with MPRWA disclosing CONSULTANT'S and/or such other person's financial interests.

14. Laws. CONSULTANT agrees that in the performance of this Contract it will
comply with all applicable state, federal and local laws and regulations. This Contract shall be
governed by and construed in accordance with the laws of the State of California.

15. Attorneys Fees and Court Venue. Should either party to this Contract bring
legal action against the other, (formal judicial proceeding, mediation or arbitration), the case shall
be handled in Monterey County, California, and the party prevailing in such action shall be
entitled to a reasonable attorneys fee which shall be fixed by the judge, mediator or arbitrator
hearing the case and such fee shall be included in the judgment, together with all costs.

16. Licensing. CONSULTANT represents that it is properly licensed to perform the

work specified under this Contract, including but not limited to, possession of a current City of
Monterey business license.

17. Agency. CONSULTANT is hereby deemed to be an independent CONSULTANT

and not an agent or employee of MPRWA.

18. Severability. If any of the provisions contained in the Agreement are held illegal,
invalid, or unenforceable, the enforceability of the remaining provisions shall not be impaired
thereby. Limitations of liability and indemnities shall survive termination of the Agreement for
any cause. If a part of this Agreement is valid, all valid parts that are severable from the invalid
part remain in effect. If a part of this Agreement is invalid in one or more of its applications, the
part remains in effect in all valid applications that are severable from the invalid applications.

19. Successors and Assigns. This Agreement and the rights, privileges, duties,
and obligations of MPRWA and CONSULTANT under this Agreement, to the extent assignable
or delegable, shall be binding upon and inure to the benefit of the parties and their respective
successors, permitted assigns, and heirs.

20. Headings. The headings are for convenience only and shall not be used to
interpret the terms of this Agreement.

21. Time is of the Essence. Time is of the essence in each and all of the provisions
of this Agreement.

22. Authority. Any individual executing this Agreement on behalf of MPRWA or

CONSULTANT represents and warrants hereby that he or she has the requisite authority to
enter into this Agreement on behalf of such party and bind the party to the terms and conditions
of this Agreement.

-4-
 IN WITNESS WHEREOF, this Contract is entered into by the parties hereto in Monterey,
California, on the day and year first written above.

MONTEREY PENINSULA REGIONAL WATER AUTHORITY:

By: _____________________________ Date: ______________________

Bill Kampe
Its: President

CONSULTANT:

By: _____________________________ Date: ______________________

James M. Cullem
Its: Principal

ATTEST:

By: _____________________________ Date: ______________________

Nova Romero
Its: Clerk of the Board

APPROVED AS TO FORM:

By: _____________________________ Date: ______________________

Donald G. Freeman
Its: MPRWA Attorney

-5-
 ATTACHMENT B
MPRWA RESOLUTION NO. 2017-01

A RESOLUTION OF THE MONTEREY PENINSULA REGIONAL WATER

AUTHORITY AUTHORIZING THE AUTHORITY PRESIDENT TO EXECUTE A
CONTRACT WITH CULLEM MANAGEMENT SERVICES, LLC FOR EXECUTIVE
DIRECTOR SERVICES

WHEREAS, Cullem Management Services, LLC (Cullem LLC) has offered to

continue to provide James. M. Cullem to serve the Monterey Peninsula Regional Water
Authority (MPRWA) as Executive Director, and

WHEREAS, in FY 2017-2018, the Water Authority Board is projected to budget

$90,000 for Executive Director services, which funding should be sufficient for those
services,

NOW, THEREFORE, BE IT RESOLVED, that the Board President of the

MPRWA is hereby authorized to execute on behalf of MPRWA a Contract with Cullem
LLC, at a total price not-to-exceed $90,000, for James M. Cullem to continue serving as
the Executive Director, with duties as defined in Attachment A, for FY 2017-2018.

PASSED AND ADOPTED BY THE MONTEREY PENINSULA REGIONAL

WATER AUTHORITY this ____day of ____ 20____, by the following vote:

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

APPROVED:

ATTEST:

Bill Kampe, President

Nova Romero, Clerk to the Authority

ATTACHMENT C
Monterey Peninsula Regional Water Authority Date: April 13, 2017
Agenda Report Item No: 5.

FROM: Executive Director Cullem

SUBJECT: Adoption of Resolution 2017- 02, Approving Donald G. Freeman as Legal

Counsel through June 30, 2018 and Authorizing the Authority President to
Execute a Contract Extension with Perry Freeman at a Price not-to-
exceed $30,000

RECOMMENDATION:

It is recommended that the Monterey Peninsula Regional Water Authority (MPRWA)

adopt Resolution 2017-02 approving Donald G. Freeman as legal counsel through June
30, 2018 and authorizing the Authority President to execute a contract extension with
Perry Freeman at a price not-to-exceed $30,000.

DISCUSSION:

Following a formal Request for Qualifications (RFQ) for legal services for the Water
Authority conducted during August and September 2012, an Ad-Hoc committee of the
MPRWA recommended selection of Perry and Freeman (Donald G. Freeman). On
September 27, 2012, the Water Authority adopted a resolution selecting Mr. Freeman to
be legal counsel. On December 10, 2012, Mr. Freeman provided the Water Authority
with waivers of conflict of interest from all other participating jurisdictions to which he
has professional, contractual obligations.

Due to Don Freeman's extensive knowledge of the water supply issues that the Water
Authority has dealt with the last three years, and in light of his excellent performance in
the position of Authority Counsel, the Executive Director recommends the Authority
maintains continuity with Donald G. Freeman, at least through June 30, 2018.

Resolution 2017-02 approves an extension of Donald G. Freeman as Authority legal

counsel through June 30, 2018 and authorizes the Authority President to execute a
contract extension accordingly.

06/12
BUDGET CONSIDERATIONS:

The budget for FY 2017-2018 will request a maximum of $30,000 for Legal Counsel
services through June 30, 2018.

ATTACHMENTS:

A-Resolution 2017-02
B-Legal Services Agreement
 MPRWA RESOLUTION NO. 2017-02

A RESOLUTION OF THE MONTEREY PENINSULA REGIONAL WATER AUTHORITY

ACKNOWLEDGING DONALD G. FREEMAN AS LEGAL COUNSEL FOR THE MONTEREY
PENINSULA REGIONAL WATER AUTHORITY AND AUTHORIZING THE PRESIDENT TO
EXTEND A CONSENT AND WAIVER OF CONFLICT OF INTEREST

WHEREAS, Donald G. Freeman has been requested to continue to represent the

Monterey Peninsula Regional Water Authority (MPRWA);

WHEREAS, Donald G. Freeman is currently the City Attorney for the City of Seaside and
the City of Carmel-by-the-Sea;

WHEREAS, Donald G. Freeman and MPRWA recognize the potential conflict of interest
which may arise as a result of Donald G. Freemans legal representation of MPRWA, City of
Seaside, and the City of Carmel-by-the-Sea;

WHEREAS, MPRWA wishes to acknowledge Donald G. Freeman as legal counsel for

MPRWA;

WHEREAS, the President of MPRWA and members of the MPRWA Board of Directors
have reviewed a letter from Donald G. Freeman dated November 20, 2012, indicating that Mr.
Freeman does not believe that his legal services for the Monterey Peninsula Regional Water
Authority will have any impact on his full and effective representation of each party, and does
not believe he has knowledge of any confidential information from any party which would be
material or relevant to his representation of MPRWA, the City of Seaside, and the City of
Carmel-by-the-Sea;

WHEREAS, Donald G. Freeman recognizes that by concurrently representing the

MPRWA, the City of Seaside, and the City of Carmel-by-the-Sea an issue of divided loyalty,
such as in litigation, could possibly arise at some future date, and that at that time it could be
necessary for him to make full disclosure to all parties, could be subject to disqualification from
representing any party, and at such time it would be necessary for each party to seek
independent legal counsel;

WHEREAS, the City of Carmel-by-the-Sea and the City of Seaside have passed their
respective Resolutions and their respective Mayors have executed the Consent and Waiver of
Conflict of Interest;

WHEREAS, the President and Board of Directors have reviewed this request with
independent legal counsel;

WHEREAS, according to Rule 3-310 of the California Rules of Professional Conduct

applicable to California lawyers which requires informed written consent of all represented
parties because of concurrent representation, MPRWA recognizes that Donald G. Freeman is
the City Attorney for the City of Seaside, and for the City of Carmel-by-the-Sea;

WHEREAS, the Board of Directors has been fully satisfied with the performance of
Donald G. Freeman during the period of his tenure as Authority legal Counsel between
September 27, 2012 and the present;

WHEREAS, due to the critical nature of on-going legal activities associated with the
CPUC consideration of the California American Water application for the Monterey Peninsula
Water Project, the Board of Directors finds that the public interest is better served by renewing
Donald G. Freemans contract at this time than to re-advertise a request for proposal for legal
services and;

WHEREAS Board of Directors wishes to authorize the President to extend a Consent

and Waiver of Conflict of Interest, and hereby acknowledges Donald G. Freeman as legal
counsel for the Monterey Peninsula Regional Water Authority, at a total fee not-to-exceed
$30,000.00 for the period July 1, 2017 to June 30, 2018.

NOW, THEREFORE, BE IT RESOLVED, that the President of MPRWA is hereby

authorized to extend on behalf of MPRWA a Consent and Waiver of Conflict of Interest thereby
acknowledging Donald G. Freeman as legal counsel for the Monterey Peninsula Regional Water
Authority and authorizes the President to execute a contract extension with Donald G. Freeman
for legal counsel services.

PASSED AND ADOPTED BY THE MONTEREY PENINSULA REGIONAL WATER

AUTHORITY this ____day of ____ 201___, by the following vote:

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

APPROVED:

ATTEST:

Bill Kampe, President

Nova Romero, Authority Clerk

 Attachment B
AGREEMENT FOR LEGAL SERVICES

THIS AGREEMENT, made and entered into this ___ day of _____________,
2017, by and between the MONTEREY PENINSULA REGIONAL WATER AUTHORITY,
hereinafter referred to as "MPRWA", and DONALD G. FREEMAN of the Law
Offices of Perry and Freeman, hereinafter referred to as "Attorney", both
of whom understand as follows:

A. Term: The term of this Agreement shall be for one (1) year
commencing July 1, 2017, and shall terminate on June 30, 2018, unless
terminated pursuant to paragraph H. of this Agreement.

B. Compensation. Attorney will provide general legal services to

MPRWA for a retainer of $2,500.00 per month commencing July 1, 2017.

C. Reimbursement of Costs. Attorney shall be reimbursed for

actual out-of-pocket expenses 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. When
specifically required to travel out of the county to conduct MPRWA
related business expenses shall be billed as actual out-of-pocket costs
unless otherwise negotiated. There will be no charge for actual travel
time.

D. Ordinary Services. Legal advice and legal opinions to MPRWA

on matters including, but not limited to, public sector policies and
procedures, the Ralph M. Brown Act, the Public Records Act, conflicts of
interest, general public agency law, Board of Directors' actions, and
attendance at regular and special meetings of the Board of Directors or
Board of Directors' committees as requested,

E. Extraordinary Legal Services. Preparation of complex legal

documents, representing MPRWA in court appearances, litigation, or in
proceedings before other public or administrative bodies, or legal
services provided to any independent or separate agency or entity of
government not operated as an integral part of MPRWA.

F. Miscellaneous. MPRWA recognizes that Attorney has a private

law practice currently located in Carmel-by-the-Sea, California, and will
retain that office as his principal place of business. In addition,
MPRWA recognizes Attorney is the City Attorney for the City of Carmel-by-
the-Sea and the City of Seaside as well as general legal counsel for the
Association of Monterey Bay Area Governments (AMBAG); and that Attorney
also represents and advises other public entities upon request. The City
of Carmel-by-the-Sea approved and signed a conflict waiver on November 6,
2012. The City of Seaside approved and signed a conflict waiver on
October 18, 2012. MPRWA approved a conflict waiver on December 10, 2012.

G. Association of Special Legal Counsel. MPRWA and Attorney

recognize, that from time 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

1
 Attachment B
and other matters where either MPRWA Board of Directors or Attorney feel
effective representation requires special legal counsel.

H. 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 days prior to
the effective date of termination.

I. Notices. All notices herein provided to be given, or which

may be given by either party to the other, shall be considered fully
received when made in writing and deposited in the United States mail,
certified and postage prepaid, and addressed to the respective parties as
follows:

MPRWA: ATTORNEY:

President, Board of Directors Donald G. Freeman

Monterey Peninsula Regional Perry and Freeman
Water Authority P.O. Box 805
580 Pacific Street Carmel, CA 93921
Monterey, CA 93940

J. Immunity. As an authorized representative of MPRWA, Attorney

shall be recognized as 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 on its behalf by its President, and duly attested by its Clerk;
and the Attorney has signed and executed this agreement in duplicate
originals the day and year first hereinabove written.

MPRWA

_____________________________
Bill Kampe, President

ATTORNEY:
ATTEST:

_____________________ _________________________
Donald G. Freeman Clerk of the Board

2
Monterey Peninsula Regional Water Date: April 13, 2017

Authority Item No: 6.

Agenda Report

FROM: Executive Director Cullem

SUBJECT: Receive 3rd Quarter FY 2016-2017 Financial Status

RECOMMENDATION:
It is recommended that the Authority Board receive the 3rd Quarter FY 2016-2017
Financial Status.

DISCUSSION:

The 3rd Quarter FY 2016-2017 financial status reports are attached.

FISCAL IMPACT:

Funds remain sufficient to complete the FY 2016-2017 program well within the budget.
Year-end funds are likely and staff will recommend any surplus be applied to a
reduction in FY 2017-2018 contributions.

ATTACHMENTS:
A- 3rd Quarter Profit and Loss Performance FY 2016-2017
B- 3rd Quarter Encumbrances vs Budget FY 2016-2017

06/12
5:02 PM Monterey Peninsula Regional Water Authority
04/03/17
Accrual Basis Profit & Loss Budget Performance
July 2016 through March 2017

Jul '16 - Mar 17 YTD Budget Annual Budget

Ordinary Income/Expense
Income
47200 Program Income
47230 Membership Dues 290,000.00 217,500.00 290,000.00
47240 Transfer from Reserves 0.00 0.00 0.00
Total 47200 Program Income 290,000.00 217,500.00 290,000.00
Total Income 290,000.00 217,500.00 290,000.00
Expense
60900 Administration and Clerical
60901 Clerk of the Board 21,750.00 21,750.00 29,000.00
60902 Executive Director 41,545.95 65,250.00 87,000.00
60903 Principal Offc of the Authority 0.00 0.00 0.00
60904 Financial Services 4,794.94 4,500.00 6,000.00
60905 Misc Admin Expenses 263.52 375.00 500.00
Total 60900 Administration and Clerical 68,354.41 91,875.00 122,500.00
61100 Bank Charges
61101 Bank Administration Chgs 40.00
Total 61100 Bank Charges 40.00
62100 Legal Fees
62110 Board Counsel 25,000.00 22,500.00 30,000.00
62140 Special Counsel 34,333.96 75,000.00 100,000.00
Total 62100 Legal Fees 59,333.96 97,500.00 130,000.00
62800 Contract Services
62802 Audit Services 7,500.00 6,000.00 8,000.00
62803 Televised Meeting 1,760.00 2,250.00 3,000.00
62804 Contract Services & Studies 0.00 9,750.00 13,000.00
Total 62800 Contract Services 9,260.00 18,000.00 24,000.00
65000 Insurance 6,615.53 5,625.00 7,500.00
65100 Travel Expenses 0.00 750.00 1,000.00
68300 Contingency 0.00 3,750.00 5,000.00
Total Expense 143,603.90 217,500.00 290,000.00
Net Ordinary Income 146,396.10 0.00 0.00
Other Income/Expense
Other Expense
80000 Prior Year's-Expense -937.72
Total Other Expense -937.72
Net Other Income 937.72
Net Income 147,333.82 0.00 0.00

Page 1 of 1
11:06 AM
04/03/17
Monterey Peninsula Regional Water Authority
Accrual Basis Profit & Loss Budget vs. Actual
July 2016 through March 2017

9 Months 9 Months
Jul 16- Mar 17 Annual Budget $Under Budget 'A of Budget Pro - rated Budget SUnder/Over Budget
Ordinary Income/Expense
Income
47200 Program Income
47230 - Membership Dues 290,000.00 290,000.00 0 00 100.0% 217,500.00
47240 - Transfer from Reserves 0.00 0.00 0.00 0.0%
Total 47200 Program Income 290,000.00 290,000.00 0.00 100.0%
Total Income 290,000.00 290,000.00 0.00 100.0% 217,500.00
Expense
60900 Administration and Clerical
60901 Clerk of the Board 21,750.00 29,000.00 -7,250.00 75.0% 21,750.00 0.00
60902 Executive Director 41,545.95 87,000.00 -45,454.05 47.75% 65,250.00 -23,704.05
60903 Principal Offc of the Authority 0 00 0.00 0.00 0.0% 0.00
60904 Financial Services 4.794.94 6,000.00 -1,205.06 79.92% 4,50000 294.94
60905 Misc Admin Expenses 263.52 500.00 -236.48 52.7% 375.00 -111.48
Total 60900 Administration and Clerical 68,354.41 122,500.00 -54,145.59 55.8% 91 875 00 -23,520.59
61100 Bank Charges
61101 Bank Administration Chgs 40.00
Total 61100 Bank Charges 40.00
62100 Legal Fees
62110 Board Counsel 25,000 00 30,000.00 -5,000.00 83.33% 22,500.00 2,500 00
62140 Special Counsel 34.333,96 100,000.00 -65,666.04 34.33% 75,000.00 -40.666 04
Total 62100 Legal Fees 59,333 96 130,000 00 -70.666.04 45.64% 97.500.00 -38,166.04
62800 Contract Services
62802 Audit Services 7,500.00 0,000.00 -500.00 93.75% 6,000.00 .500.00
62803 Televised Meeting 1,760.00 3,000 00 -1,240.00 58.67% 2.250.00 -490.00
62804 Contract Services & Studies 13,000.00 13,000.00 0.00 100.0% 9.750 00 3,250.00
Total 62800 Contract Services 22,26000 24,000.00 -1,740.00 92.75% 18,000.00 4.26000

65000 Insurance 6,615.53 7,500.00 -884.47 88.21% 5,625.00 990.53

65100 Travel Expenses 0.00 1,000.00 -1,000.00 0.0% 750.00 -750 00
68300 Contingency 10,000.00 5,000.00 5,000.00 200.0% 3.750.00 6,250.00
Total Expense 166.603.90 290.000.00 -123,396.10 57.45% 217,500.00 -50,896 10
Net Ordinary Income 123,396.10 0.00 100.0%
Other Income/Expense
Other Expense
80000 Prior Year's-Expense -937.72
Total Other Expense -937.72
Net Other Income 937.72
Net Income 124,333.82 0.00 100.0%

Page 1 of 1
Monterey Peninsula Regional Water Authority Date: April 13, 2017
Agenda Report Item No: 7.

FROM: Executive Director Cullem

SUBJECT: Receive an Update on the Summary Project Schedule for the Monterey
Peninsula Water Supply Project (MPWSP) and Status of Test Well
Operation and Pipeline Construction

RECOMMENDATION:

It is recommended that the Water Authority Board receive a report from Cal Am on the
latest "Summary" MPWSP schedule and on the status of the test well operation and
progress on the pipeline construction.

DISCUSSION:

Cal Am will provide the most recent Summary MPWSP schedule and discuss the status
of the test slant well and of the transfer pipeline construction.

Cal Am may also be able to provide some insight as to the effect on the schedule of the
latest CPUC extension of the public comment period for the DEIR/DEIS.

Note that regular updates on the MPWSP are available at Cal Am's project web site:
www.watersupplyproject.org .

ATTACHMENTS:

None

06/12
Monterey Peninsula Regional Water Date: April 13, 2017

Authority Item No: 8.

Agenda Report

FROM: Executive Director Cullem

SUBJECT: Receive Copy of Public Water Now (PWN) Letter to the Water Authority
and Approve Response by the Board President

RECOMMENDATION:
It is recommended that the Authority Board receive a copy of the March 21, 2017 Public
Water Now letter to the Water Authority and approve a response by the Authority
President.

DISCUSSION:

Attached is a letter from Public Water Now to the MPRWA voicing long-standing
objections to Cal Am's desal project, esp. challenging the, " ...poor science around
feasibility of the 'first of its kind' slant well ocean intake..." and asserting Cal Am has a "..
lack of water rights" for the Monterey Peninsula Water Supply Project (MPWSP). Most
importantly, included with the letter (but not attached) are dozens of letters from the
public to the California Public Utilities Commission (CPUC) and the Monterey Bay
National Marine Sanctuary (MBNMS) requesting that the CPUC not certify the MPWSP
EIR.

These objections have been addressed in the past by the CPUC and the State Water
Resources Control Board and/or are being addressed in the EIR/EIS process.

Accordingly, the Water Authority President prepared a letter (attachment B) in response

to PWN for approval by the Board.

FISCAL IMPACT: None

ATTACHMENTS:
A- Public Water Now letter dated March 21, 2017
B- Letter from Water Authority President Bill Kampe dated April 13, 2017

06/12
ATTACHMENT A
 ATTACHMENT B

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

April 13, 2017 Directors:

Bill Kampe, President
Ralph Rubio, Vice President
David Pendergrass, Secretary
Mr. George T. Riley Jerry Edelen, Treasurer
Managing Director, Public Water Now Clyde Roberson, Director
Steve Dallas, Director
P.O. Box 1293
Monterey, CA 93942 Executive Director:
Jim Cullem, P.E.

Subject: Monterey Peninsula Water Supply Project

Dear Mr. Riley:

We have received your letter of March 21, describing your concerns with the Monterey
Peninsula Water Supply Project (MPWSP). We feel your letter misrepresents the current
situation, specifically the test well and the topic of water rights. We also believe that the efforts
by Public Water Now (PWN) to delay the MPWSP are ill-advised and put the welfare and
quality of life of all water users at risk of rationing.

The test well has been in operation for over 2 years with excellent operating results. It pumps
water at the target rate, the water quality is as predicted, and the current monitoring indicates
very minimal impact on local groundwater. The stated concern seems to be around possible
impacts to groundwater aquifers. That concern is more related to the comments on water rights
then to the type of well.

The DEIR/DIES for the project provides excellent background regarding water rights. It
describes the specific circumstances for the current project and the general framework of law that
applies. It is important to note that the proposed wells would draw water that is not suitable as
potable water or as agricultural irrigation water. The DEIR is very clear that in such a situation,
the State Constitution allows beneficial use of the water.

The DEIR/DEIS explains that Essentially, if the extraction of otherwise unusable Basin
groundwater will not harm lawful water users and any fresh water extracted can be returned to
the Basin without injury to existing legal water users, then CalAm would have rights to the
portion of feedwater that comes from the Basin because the MPWSP product water that contains
such Basin water would be developed water. The DEIR/DEIS also identifies possible harm,
notes a likelihood of very minimal impact, and outlines simple mitigations.

Further, the DEIR/DEIS explains how the project plan for returning the fresh water to the basin,
primarily in Castroville, satisfies the requirements of the Agency Act.

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

You have urged the CPUC to deny the EIR and delay the project. We believe such a course
creates high risks for the water users of our area. Persistent delay raises a significant risk that the
milestones in the State Water Resources Control Boards revised cease and desist order will be
missed and the Peninsula will need to implement harsh water rationing to comply with the
consequential reductions in available supply pursuant to the CDOs terms.

PWN has not proposed a specific preferred alternative to the MPWSP. The Regional Water
Authority monitors progress on the open ocean intake alternatives. Open ocean intake for
desalination is not preferred under the state Ocean Plan, and only acceptable if subsurface intake
proves infeasible. That leads us back to the MPWSP, and why it is important to fully
demonstrate feasibility, or lack of it, in this project. We also note that settlement agreements on
the MPWSP show a high degree of support for the project as defined. The open ocean projects
have not yet reached this point, and may find that environmental concerns erupt during CEQA
review, or in the courts, especially if subsurface intake is not fully explored.

We urge Public Water Now to recognize the timely need for an alternate water supply, and the
credible and substantial progress made so far on the MPWSP. Delay in taking the next essential
steps can only serve to cause increased costs for ratepayers, and painful water rationing in the
future.

Sincerely,

Bill Kampe
President
Monterey Peninsula Regional Water Authority

2
Monterey Peninsula Regional Water Authority Date: April 13, 2017
Agenda Report Item No: 9.

FROM: Executive Director Cullem

SUBJECT: Receive Report, Discuss, and Provide Staff Direction on Scope of Future
Work for the Authority Special Counsel, Adopt Resolution 2017-03,
Approve Brownstein Hyatt Farber Schreck as Special Legal Counsel
through June 30, 2018, and Authorize the Authority President to Execute a
Contract Extension at a Price Not-to-Exceed $100,000

RECOMMENDATION:

It is recommended that the Monterey Peninsula Regional Water Authority (MPRWA)

discuss the scope of future work for the Special Counsel, adopt Resolution 2017-03
approving Brownstein Hyatt Farber Schreck, LLP (Brownstein) as Special Legal
Counsel for the period July 1, 2017 through June 30, 2018 and authorize the Authority
President to extend a contract with Brownstein at the proposed hourly rates and a total
contract price not-to-exceed $100,000.

DISCUSSION:

In March 2012, The Authority negotiated an agreement for Attorney of Record services
with Brownstein. The firm provided special expertise in water law, at a reduced rate, in
support of Water Authority formation and activities.

For reasons outlined in the staff report on the subject at the Water Authority meeting in
November 13, 2015, the Authority extended the Brownstein agreement to June 30,
2017 and approved preparation of a contract accordingly.

At attachment A is the March 30, 2017 letter from the Special Counsel identifying what
tasks he understands the Authority expected during FY 2017-2018.

Special Counsel involvement is needed on short notice in response to actions by others

who are participating in the Cal Am application process. Other than those tasks that
specifically require an attorney (eg: motions, briefs and hearings with the CPUC and
SWRCB), the Special Counsel is involved with settling party conference calls, review of
Authority correspondence with state officials, and review of the DEIR.

The CPUC process, in particular hearings related to the EIR/EIS and issuance of Cal
Am's Certificate of Public Convenience and Necessity (CPCN), as well as expected

06/12
future negotiations on the Settlement Agreements will require a substantial amount of
specialized legal work in 2017 and 2018. To insure continuity in Special Legal Counsel
services, the Executive Director recommends the Authority extend the contract
(Attachment B) with Brownstein through June 30, 2018.

The Water Authority Board is requested to review the tasks in order to insure that
counsel is utilized where appropriate and not tasked with work that can be completed by
staff or by less costly resources. Resulting Board direction to staff will be followed
during FY 2017-2018.

BUDGET CONSIDERATIONS:

Although the hourly rate for Russ McGlothlin has increased to $450 per hour, by
utilization of legal assistants Brownstein can reduce hourly expenses to an average of
$380 per hour. Accordingly, funds are expected to be sufficient for these legal services
in the coming fiscal year and will be addressed in the budget proposal.

ATTACHMENTS:

A- Brownstein Letter of March 30, 2017

B- Contract with Brownstein
C- Resolution 2017-03
 ATTACHMENT A

Memorandum

DATE: March 30, 2017

TO: Monterey Peninsula Regional Water Authority

FROM: Russell M. McGlothlin

RE: Estimated 2017-2018 Budget for Legal Services from Brownstein Hyatt Farber
Schreck

You have requested that we estimate the budget for legal services from our firm for fiscal year 2017-
2018. The attached table estimates the 2017-2018 budget for our anticipated representation of the
Monterey Peninsula Regional Water Authority (Authority) with respect to the pending application by
California American Water for issuance of a Certificate of Public Convenience and Necessity from the
California Public Utilities Commission (CPUC Proceeding) for the proposed Monterey Peninsula
Water Project (Application 12.04.012) and related matters and other Monterey Peninsula water matters
on which we may requested to assist.

Our efforts during the following fiscal year will be focused on the completion of Phase I of the CPUC
Proceeding (i.e., CPUC approval of the desalination project). The significant issues/work with respect to
this effort include amendment of the Large Settlement Agreement, review of the final DEIR/DEIS,
Phase I briefing, likely supplemental hearings, and comments on the proposed decision prior to action
by the Commission. The current schedule for the CPUC Proceeding anticipates the release of a
proposed decision on Phase I in the first half of 2018, which would fall within next years legal budget.

The table below estimates the budget for the principal categories of work that we anticipate in 2017-
2018 and is segregated by quarter. Estimated work may move between quarters depending on
schedule of the CPUC Proceeding and other developments. Additional work beyond the matters listed
may necessitate expenditures beyond those estimated below. The variance between the low and high
estimates reflects the inherent uncertainty concerning the scope of necessary work. Where possible
and appropriate, we will seek to coordinate with other entities (e.g., Cal-Am and MPWMD) to ensure
efficient and cost-effective representation.

015621\0002\15569400.1
 Estimated Budget for CPUC A.12.04.019 and SWRCB CDO (July 2017-June 2018)

Task/Matter Quarter Low High

Prepare for and Attend Calls/Meetings with Settling Parties 3 $3,000 $5,000
General Case/Matter Management Issues 3 $7,000 $10,000

Subtotal Q3 2017 $10,000 $15,000

Prepare for and Attend Calls/Meetings with Settling Parties 4 $3,000 $5,000
Review, Correspondence, and Comments re Final DEIR/DEIS 4 $4,000 $7,000
General Case/Matter Management Issues 4 $7,000 $10,000
Subtotal Q4 2017 $14,000 $22,000

Prepare for and Attend Calls/Meetings with Settling Parties 1 $3,000 $5,000
Prepare for and Attend Possible (Not Certain) Supplemental
2 $17,000 $30,000
Hearings
Opening Brief 1 $7,000 $12,000
Reply Brief 1 $5,000 $10,000
General Case/Matter Management Issues 1 $7,000 $10,000
Subtotal Q1 2018 $39,000 $67,000

Prepare for and Attend Calls/Meetings with Settling Parties 2 $3,000 $5,000
Review and Prepare Comments on Proposed Decision 2 $7,000 $12,000
General Case/Matter Management Issues 2 $7,000 $10,000
Subtotal Q1 2018 $17,000 $27,000

Total 2017-2018 $80,000 $131,000

2
015621\0002\15569400.1
 ATTACHMENT B

AGREEMENT FOR LEGAL SERVICES

THIS AGREEMENT, made and entered into this ___ day of _____________, 2017, by and
between the MONTEREY PENINSULA REGIONAL WATER AUTHORITY, hereinafter
MPRWA, 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 July 1,
2017, and shall terminate on June 30, 2018, unless terminated pursuant to paragraph G of this
Agreement.

B. Compensation. Attorney will provide legal services to MPRWA at no more than

$450/hour for partners and no more than $300/hour for associates, for an approximate average rate
of no more than $380.00 per hour, unless special services are required and are pre-approved with the
MPRWAs Executive Director.

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-pocket
expenses 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 costs
unless otherwise negotiated. There will be no charge for actual travel time.

D. Budget. Attorney will not accrue costs for legal services in excess of $100,000
between July 1, 2017 and June 30, 2018 without prior approval of the Authoritys Executive
Director.

E. Ordinary Services. Legal advice and legal opinions to MPRWA as outlined in the
Amendment 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. 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. In
addition, MPRWA recognizes Attorney also represents and advises other public entities upon
request. Attorney will submit conflict waivers to MPRWA whenever such potential arise during the
term of this contract.

G. 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 days
prior to the effective date of termination.

H. Notices. All notices herein provided to be given, or which may be given by either
party to the other, shall be considered fully received when made in writing and deposited in the
 ATTACHMENT B

United States mail, certified and postage prepaid, and addressed to the respective parties as follows:

MPRWA: ATTORNEY:

President, Board of Directors Russell M. McGlothlin

Monterey Peninsula Regional BROWNSTEIN HYATT FARBER SCHRECK, LLP
Water Authority 21 East Carrillo Street
580 Pacific Street Santa Barbara, CA 93101
Monterey, CA 93940

I. Immunity. As an authorized representative of MPRWA, Attorney shall be recognized

as 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 on
its behalf by its President, and duly attested by its Clerk; and the Attorney has signed and executed
this agreement in duplicate originals the day and year first herein above written.

MPRWA:

____________________________
Bill Kampe, President

ATTORNEY:
ATTEST:

_____________________ _________________________
Russell M. McGlothlin Clerk of the Board
 ATTACHMENT C
MPRWA RESOLUTION NO. 2017-03

A RESOLUTION OF THE MONTEREY PENINSULA REGIONAL WATER

AUTHORITY ACKNOWLEDGING Brownstein Hyatt Farber Schreck LLP AS
SPECIAL COUNSEL OF RECORD FOR THE MONTEREY PENINSULA REGIONAL
WATER AUTHORITY, AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A
CONSENT AND WAIVER OF CONFLICT OF INTEREST, AND AUTHORIZING THE
PRESIDENT TO EXECUTE AN AGREEMENT WITH BROWNSTEIN FOR LEGAL
SERVICES

WHEREAS, Brownstein Hyatt Farber Schreck LLP (Brownstein) has been

requested
to represent the Monterey Peninsula Regional Water Authority (MPRWA) as Special
Counsel;

WHEREAS, Brownstein is currently acting as Special Counsel for the City of

Carmel-by-the-Sea and the City of Seaside;

WHEREAS, Brownstein and MPRWA recognize the potential conflict of interest

which may arise as a result of Brownsteins legal representation of MPRWA, the City of
Carmel-by-the-Sea, and the City of Seaside;

WHEREAS, MPRWA wishes to acknowledge Brownstein as Special Counsel for

MPRWA;

WHEREAS, the President of MPRWA and members of the MPRWA Board of

Directors have reviewed a letter from Brownstein indicating that Brownstein does not
believe that its legal services for the Monterey Peninsula Regional Water Authority will
have any impact on its full and effective representation of each party, and does not
believe it has knowledge of any confidential information from any party which would be
material or relevant to its representation of MPRWA, the City of Carmel-by-the-Sea, and
the City of Seaside;

WHEREAS, Brownstein recognizes that by concurrently representing the

MPRWA, the City of Carmel-by-the-Sea and the City of Seaside an issue of divided
loyalty, such as in litigation, could possibly arise at some future date, and that at that
time it could be necessary for it to make full disclosure to all parties, could be subject to
disqualification from representing any party, and at such time it would be necessary for
each party to seek independent legal counsel;

WHEREAS, the City of Carmel-by-the-Sea and the City of Seaside have passed
their respective Resolutions and their respective representatives have executed the
Consent and Waiver of Conflict of Interest;
 ATTACHMENT C

WHEREAS, the President and Board of Directors have reviewed this request
with independent legal counsel;

WHEREAS, according to Rule 3-310 of the California Rules of Professional

Conduct applicable to California lawyers which requires informed written consent of all
represented parties because of concurrent representation, MPRWA recognizes that
Brownstein is the Special Counsel for the City of Carmel-by-the-Sea, and for the City of
Seaside; and

WHEREAS Board of Directors wishes to authorize the Executive Director to

execute a Consent and Waiver of Conflict of Interest, and hereby acknowledges
Brownstein as Special Counsel for the Monterey Peninsula Regional Water Authority.

NOW, THEREFORE, BE IT RESOLVED, that the Executive Director of MPRWA

is hereby authorized to execute on behalf of MPRWA a Consent and Waiver of Conflict
of Interest thereby acknowledging Brownstein as Special Counsel for the Monterey
Peninsula Regional Water Authority.

NOW, THEREFORE, BE IT FURTHER RESOLVED, that the President of

MPRWA is hereby authorized to execute on behalf of MPRWA an agreement with
Brownstein for Special Counsel services for the Monterey Peninsula Regional Water
Authority through June 30, 2018, at a fee not-to-exceed $100,000.00.

PASSED AND ADOPTED BY THE MONTEREY PENINSULA REGIONAL

WATER AUTHORITY this ____day of ____ 20____, by the following vote:

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

APPROVED:

ATTEST:

Bill Kampe, President

Clerk to the Authority

 Agenda
Monterey Peninsula Regional Water Authority (MPRWA)
Director's Meeting
ADDENDUM

7:00 PM, Thursday, April 13, 2017

Council Chambers
580 Pacific Street, Monterey
Monterey, California

CALL TO ORDER

AGENDA ITEMS

10 Receive Report, Discuss, Approve a $10,000 Change Order for SPI, and Provide Staff
Direction on Comments Received on the MPWSP DEIR/DEIS. - Cullem

ADJOURNMENT

The Monterey Peninsula Regional Water Authority is committed to including the disabled in all
of its services, programs and activities. In compliance with the Americans with Disabilities Act,
if you need special assistance to participate in this meeting, please contact the Monterey City
Clerks Office at (831) 646-3935. Notification 30 hours prior to the meeting will enable the City
to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.102-
35.104 ADA Title II]. Later requests will be accommodated to the extent feasible. For
communication-related assistance, dial 711 to use the California Relay Service (CRS) to speak to
City offices. CRS offers free text-to-speech, speech-to-speech, and Spanish-language services 24
hours a day, 7 days a week. If you require a hearing amplification device to attend a meeting, dial
711 to use CRS to talk to the Monterey City Clerk's Office at (831) 646-3935 to coordinate use of a
device.

Agenda related writings or documents provided to the MPRWA are available for public
inspection during the meeting or may be requested from the Monterey City Clerks Office at 580
Pacific St, Room 6, Monterey, CA 93940. This agenda is posted in compliance with California
Government Code Section 54954.2(a) or Section 54956.
Monterey Peninsula Regional Water Authority Date: April 13, 2017

Agenda Report Item No: 10.

FROM: Executive Director Cullem

SUBJECT: Receive Report, Discuss, Approve a $10,000 Change Order for SPI, and
Provide Staff Direction on Comments Received on the MPWSP
DEIR/DEIS

RECOMMENDATION:
It is recommended that the Authority Board discuss recently released comments on the
Monterey Peninsula Water Supply Project (MPWSP), approve a change order with SPI
(Separation Processes, Inc) and its sub-consultant Geosyntec to provide the Authority
with its analysis of key portions of those comments, and provide staff guidance.

DISCUSSION:

Comments on the MPWSP DEIR/DEIS have now been received by the CPUC CEQA
Consultant, Engineering Science (ES). Among them is a rather detailed and technical
submission by the Marina Coast Water District. Accordingly, staff recommends that the
Authority Board issue a change order to SPI to have Geosyntec conduct an analysis of
the groundwater and modeling issues raised by MCWD (and others)to identify key
issues. Questions to be answered include the following from Russ Mcglothlin, our
Special Counsel:
Was the modeling performed adequately to accurately project the groundwater
level drawdown effects and seawater intrusion effects of the source well
operations?
Is the desalination project sized appropriately in light of likely future demand and
projected reliable supplies? Note: It is important to gauge necessary size in
relation to max month demands and supply availability, not just average annual
acre-feet per year.

It is further recommended that the Authority agendize a more thorough discussion of the
comments provided to ES, and to give the public a better opportunity to weigh in on the
DEIR/DEIS, at a future Board meeting.

FISCAL IMPACT:

The SPI change order would be not-to-exceed $10,000 and funded by authorizing the
Executive Director to adjust line items in the existing budget.

ATTACHMENTS: None

06/12