M I N U T E S of the Regular Meeting Monterey Regional Water Pollution Control Agency Board of Directors February 27, 2012

Transcription

1 M I N U T E S of the Regular Meeting Monterey Regional Water Pollution Control Agency Board of Directors 1. CALL TO ORDER The Regular Meeting of the Board of Directors of the Monterey Regional Water Pollution Control Agency was Called to Order by Vice Chair Allion at 7:01 p.m., on Monday, in the Board Room at 5 Harris Court, Building D, Monterey, California. 2. ROLL CALL BOARD MEMBERS PRESENT: Dennis Allion, Vice Chair Ramiro Cortez David Lewis Lou Calcagno Kenneth Nishi Libby Downey Chris Orman Carmelita Garcia Gloria De La Rosa Dave Pendergrass Steve Bloomer Vacant Ex-Officio BOARD MEMBERS ABSENT: Ron Stefan, Chair Felix Bachofner MRWPCA STAFF PRESENT: Keith Israel Brad Hagemann Rob Wellington John Tiernan Tom Buell Bob Holden Del Rey Oaks, Councilmember Boronda County Sanitation District Castroville CSD, Vice President [Alternate] Monterey County, Supervisor Marina Coast Water District, Director Monterey, Councilmember Moss Landing County Sanitation District Pacific Grove, Mayor Salinas, Councilmember Sand City, Mayor Seaside, Councilmember [Alternate] U.S. Army, Representative Castroville Comm Services District, President Seaside, Mayor General Manager Assistant General Manager Legal Counsel Director of Admin Services/Deputy GM Director of Finance Principal Engineer

2 Page 2 Mike McCullough Mark Malanka Robert Locke Jarrod Levine Maddi Bell Betty Nebb Recycled Water Project Assistant Maintenance Manager Operator III Operator III Admin Support Specialist I Executive Assistant OTHERS PRESENT: Saul Rosenbaum Prager and Company Jeff Stava Nossaman LLP Nancy Isakson Salinas Valley Water Coalition George Riley Citizens for Public Water Aliya Piotrkaoski Cal American Water Frank Aguayo City of Salinas Jeff Krebs City of Monterey Carl Niizawa Marina Coast Water District David Berger Wayne Downey 3. PLEDGE OF ALLEGIANCE Vice Chair Allion welcomed Mr. Nishi, MCWD, back to the MRWPCA Board and asked him to lead the group in the Pledge of Allegiance. 4. PUBLIC COMMENTS At 7:01 pm, Vice Chair Allion called for Public Comments none received. 5. ELECTION OF BOARD OFFICERS FOR 2012 Chair Orman reported that the Nomination Committee, consisting of Ms. Garcia and Mr. Cortez, met on February 15 to review possible nominations for Chair and Vice Chair. After some deliberation, the Committee determined it was in the best interests of the Board to continue the leadership and submitted the following nominations for consideration: Mr. Stefani for Chair and Mr. Allion for Vice Chair. There were no additional nominations from the Floor. ACTION TAKEN: On a motion by Mr. Orman, seconded by Mr. Calcagno, the Board unanimously approved the election of Board officers for 2012: Mr. Stefani for Chair and Mr. Allion for Vice Chair. Vice Chair Allion suggested that Agenda Item 8 be moved up in the agenda to accommodate the speakers who will present information regarding the CalPERS refinancing. The Board members concurred.

3 Page 3 8. OTHER ACTION ITEMS A. Approve Resolution , Authorizing the Issuance of not to exceed $9,000,000 Principal Amount of Taxable Wastewater Revenue Bonds (Pension Side Fund Refunding), Series 2012 Mr. Tiernan stated that in November 2011, staff presented to Budget/Personnel Committee proposals to consider specific CalPERS Side Fund refinancing recommendations. Prager and Company offered the best proposal with interest rates in the low 4% range. He explained that PERS requires agencies with less than 100 employees to establish a Side Fund which in essence equals the present value of the plan s benefit, less the present value of employees future contributions. Current financing on the Side Fund is 7.75% on a $9 million obligation. He explained that Resolution would 1) authorize the issuance of revenue bonds, 2) authorize and direct execution of an indentures of trust and a bond purchase contract, 3) authorize the sales of bonds, and 4) approve an official statement and provide other matters properly related thereof. Mr. Tiernan noted that approving this Resolution does not obligate the Board to this transaction. In Section 1 of the Resolution, it states the present value savings generated by the bonds must be at least 20% of the current obligation. Prager and Company s current estimates are at 24% present value savings, ($2.1 million) or over the life of the 15-year bonds this equates to $2.8 million. Mr. Tiernan introduced Mr. Saul Rosenbaum, Managing Director and Principal of Prager & Company. Mr. Rosenbaum provided background information about the firm and proceeded to explain that the Side Fund represents an existing obligation of the Agency. He provided an example of a home mortgage being refinanced saving interest costs without any additional obligation. He explained that industry standard for municipalities to consider a refinance is when net present savings would meet or exceed 3% of the amount being refunded. The Agency has determined that the net present savings should be at least 20% of the existing obligation. He noted that it would take 75 to 90 days to complete a public bond offering some of this time has elapsed with preparation of the documentation for the bond sales. He underscored that the Resolution does not obligate the agency to do anything but simply permits staff to move forward as certain parameters or conditions are met. Mr. Rosenbaum noted that over the last 30 years, interest rates have been as low as they are now less than 5% of the time. Mr. Calcagno questioned the financial wellbeing of PERS. By paying off the PERS obligation, it prevents PERS from receiving the 7.75% interest rate they are currently charging for the pension obligations. Discussion followed about the probability that PERS will actually have to increase charges in order to make the system whole. Mr. Nishi asked about the side fund of $9M and how we got to that level. He also noted that the debt covenant would have to meet the net revenues from this new

4 Page 4 financing and expressed concern as to whether that would be possible. Mr. Buell explained that what was being proposed tonight would not change the debt covenant of 1.25% that is required. Mr. Nishi asked that if this bond financing is approved would it take a superior position over 2003 and 2006 bonds. Mr. Jeff Stava with Nossaman, explained that it is on parity with the 2003, 2006 bonds and that these bonds prohibit issuance of anything superior. Discussion continued regarding the increasingly high costs of pension plans and the need for public entities to revisit how they are funded. Mr. Hagemann stated that this agency did the same as others recently by agreeing to a two-tiered pension plan for newly hired employees. This plan should be in place before May 1, Mr. Rosenbaum answered questions on the bond issuance and provided more information on the next steps and the timing for going to market. Discussion included the possibility to have staff and the Board Chair proceed with negotiations and call for a Special Board meeting to consider the final documents. Mr. Stava explained that due to new rules in the State law for a JPA, financing approval has to occur at a regularly scheduled Board Meeting. That is why the Resolution is prepared with certain parameters that will get the 20% present value savings for a not to exceed amount and maturity date that the Board is comfortable going forward with, and why it delegates to the Chair and staff the authority to finalize the transaction without having to come back to the full Board. Mr. Orman made a motion for the Board to support Resolution authorizing the issuance, not to exceed $9M principal taxable wastewater revenue bonds for the pension side fund refunding and authorizing Vice Chair Allion to serve as one of the members of the authorized group. The motion was seconded by Mr. Bloomer. Mr. Calcagno suggested an amendment to the motion that would provide that the PERS Program be examined immediately by the Budget/Personnel Committee (BPC). Mr. Wellington explained the amendment to the motion would have to be subject to the proviso to negotiation with employees and Vice Chair Allion summarized that this amendment would inhibit the agency from moving ahead and approving the bond. Mr. Orman, as a member of the Budget/Personnel Committee, stated he would encourage that issues regarding employee benefits and pension be reviewed and considered by the BPC in the near future. Mr. Calcagno agreed to withdraw his amendment to the motion with assurance that the matter would be brought to the BPC; BPC Chair De La Rosa asked that the matter be brought to the committee for discussion and a review of the PERS situation. Vice Chair Allion asked for Public Comments none received; he called for a vote on the motion previously discussed.

5 Page 5 ACTION TAKEN: On a motion by Mr. Orman, seconded by Mr. Bloomer, the full Board approved Resolution , authorizing the issuance of not to exceed $9,000,000 principal amount of Taxable Wastewater Revenue Bonds (Pension Side Fund Refunding), Series 2012; and recommended that Vice Chair Allion be included as a member of the group to authorize the issuance. [All in favor, except Mr. Nishi who voted no.] 6. CONSENT AGENDA Mr. Nishi asked to pull Items A and C from the Consent Agenda. Regarding Item A, Approve Minutes/Reports for the Regular Board Meeting of November 28, 2011, Mr. Nishi stated that whoever requested a change to his comments recorded on page 8 of the Minutes needs to know that the minutes were indeed correctly recorded. Regarding Item C, Receive Financial Statements for January 2012, Mr. Nishi referred to the Schedule of Investments (page 34), asked that the reserve policy be reviewed by BPC, and suggested that the agency was basically under the required 20% of O&M costs. Mr. Buell explained that since investments are now including all cash, we are going to see some fluctuation of our total cash during a month depending on when revenues are received. He also noted that we will be receiving a majority of our bond proceeds and some of the money will go back into the General Fund which will be over $4M, above the 20% reserve requirement. Mr. Tiernan stated that many of our capital projects are funded out of bond proceeds; however, we had not yet requested available bond money. As a result, we have been using our General Fund money to fund capital projects and will replenish the General Fund when the bond money proceeds are received in March. ACTION TAKEN: On a motion by Mr. Nishi, seconded by Ms. De La Rosa, the Board unanimously approved Consent Agenda Items A through J as follows: A. Approve Minutes/Reports for the Regular Board Meeting of November 28, 2011 B. Approve Minutes/Reports for the Regular Board Meeting of January 30, 2012 C. Receive Financial Statements for January 2012 D. Receive Comparison Percentage of Budget Expended through January 2012 vs E. Receive Check Register for January 2012 F. Receive NPDES Monitoring Report for January 2012 and Plant Flows; and Effluent Quality for Connected Agencies, Plus Flow Charts for RTP, Salinas, Monterey Peninsula, Marina, Fort Ord and Castroville for January 2012

6 Page 6 G. Receive Actual vs. Budgeted Fiscal Year 2011/12 Expenditures for the Capital Improvement Program, Capitalized Equipment Fund, and Urban Reclamation Program H. Receive Actual vs. Anticipated Fiscal Year 2011/12 Revenues from Capacity Charges I. Approve Contract for the Reeside Pump Station Electrical Upgrade Project J. Approve Contract for the Reeside Pump Station Odor Control Installation 7. COMMITTEE REPORTS AND RELATED ACTION ITEMS A. Budget/Personnel Committee 1. Receive Committee Recommendations from BPC Meeting of February 10, 2012 Item 1 Review Mid-Year Budget Status and Investment Portfolio Mr. Israel explained that the mid-year budget status and investment report given at the BPC would be provided in more detail as a Staff Report that will follow review of the committee discussion and approval of the Minutes/Report for this meeting. Item 2 Consider Options Related to Use of Salinas Industrial Treatment Plant (SITP) Water Mr. Israel stated this item was brought to the BPC to look at options for use of the Salinas Industrial Treatment Plant water and the plans the City has to expand their facility. Staff received information from a consultant working with the City, and we provided information in return but asked for some details about the quantity and quality of the water and specific information as to the size of the facility and some details about the proposed schedule for such a project. In conjunction with this, staff had considered use of the SITP water within the EIR for the Coastal Water Project in 2007 and At that time the water was considered as a possible source of dilution water that was required by the groundwater replenishment regulations of the California Department of Public Health (CDPH). Recently CDPH revised their draft groundwater replenishment regulations and do not now include a requirement for dilution water. Mr. Israel reported that now SITP water is not required for dilution water but might be used for another phase of the GWR project or for a different project within the Salinas River Basin. As staff investigates the SITP water to determine uses and how it could help various groups, we determined there may be a number of possible water sources that ought to be considered in a more global way. For example, flows from the communities around the Salinas area, issues associated with stormwater, drain water such as the Blanco Drain and reclamation ditch, and other sources of water. Staff proposes to start an integrated study to consider this. Mr. McCullough has a

7 Page 7 background in salinity issues and will be providing temporary staff assistance to prepare an internal, preliminary evaluation of all water treatment possibilities to bring to the Committee and City for review. He will be identifying these water sources that could result in possibilities for more agricultural irrigation, storm water diversion, storage and reuse, sub-regional treatment facility, larger interceptor and other possibilities to treat and reuse these water sources. Discussion followed with the suggestion that there should be coordination with the Water Quality Control Board in San Luis Obispo as there may be questions about water going to the Salinas River, even after being treated. Mr. Israel stated that it is best to consider all potential sources together to evaluate what the possibilities may be all would be part of the feasibility study. Staff will focus on a regional concept and creation of a win/win for everyone. Public Comments: Nancy Isakson, Salinas Valley Water Coalition, spoke about the Blanco Drain and noted there is required treatment for those waters specifically to maintain the fisheries flow for the Salinas Valley Water Project and the Lagoon. She commended the Board for looking at some of these alternatives, but asked that as the Board moves forward to be cautious and to reach out in consideration to the growers in the Salinas Valley. They want you to be successful and feel that it is in everyone s best interests to move forward, but suggest not saying we gave this to you and now you owe us this this language will not serve anybody. George Riley, Citizens for Public Water, stated that he attended the MCWRA meeting and someone else raised the question about the right to the wastewater that was first given to the CSIP project and now there is a pay-back opportunity. He suggested that the dialogue involving the Salinas River water of any sort be kept on a business or collaborative basis because the more you talk about wanting to get that water, you set the wrong dynamic. He asked that the Board be deliberate and careful in the use of words. Mr. Israel added that basically the nature of this study was to benefit the City of Salinas and the Salinas Valley there is no direct benefit to the Peninsula, but rather something staff felt needed to be done as we look at all different areas to improve the water supply. Ms. De La Rosa agreed that water is so critical to everyone. It is very important to be careful in the approach. Discussion followed and Mr. Israel confirmed that this proposed study was discussed at the BPC meeting as a suggestion for what this agency could do to help mediate various impaired water sources. At that time, staff had not formulated a particular plan, but will be expecting to meet with the City and other stakeholders who would be involved with this study as we progress.

8 Page 8 Committee Recommendation: That the full Board approve $9,000 for an in-house Feasibility Study to evaluate advantages to treat and utilize water from the SITP, and other waters as listed in staff report for BPC. 2. Approve BPC Meeting Minutes/Report of February 10, 2012, including listed recommendations of the Committee. ACTION TAKEN: On a motion by Mr. Pendergrass, seconded by Ms. Garcia, the Board approved the Budget/Personnel Meeting Minutes/Report of February 10, Staff Report: Mid-Year Budget Review John Tiernan, Director of Admin Services/Deputy GM; Tom Buell, Director of Finance; and Brad Hagemann, Assistant General Manager. Mr. Tiernan stated that we are in good shape and are staying in line with our budget. He referred first to Revenues and noted that User Fees are right at budget halfway through the year; lien transfer fees are up a bit primarily due to the continuing foreclosures in the County; fees from outside entities are down slightly because billing is just now being completed; and other revenue is up because of a dividend received from our workman s compensation program. Mr. Tiernan announced that Expenditures are currently under budget and expenses associated with SVRP, CSIP and SDRF continue to be reimbursed by the County. Wages & Benefits are under budget due to a key position not filled but covered by current staff and some engineering costs are capitalized as they are charged to specific projects. Contract Services is slightly up because we paid for our permits up front. Utility costs are lower because our co-generation facility has been running well this year and therefore saves in energy costs. Regarding Capital Projects, Mr. Tiernan explained that additional funding comes from the increase in user rates passed last year that added about $1 million to the Capital Projects Fund. As these revenues come in, they are transferred to the Capital Projects Fund, and we are currently under budget on expenditures for capital projects. Mr. Buell introduced the Cash & Investments Schedule and noted there is about $20 million in the current investment portfolio with the majority of money being very liquid. He explained there is nothing available paying a reasonable rate the best we currently have is our Money Market funds in the bank which pay interest at.45%; even a CD would be less than 1%. Staff will continue to monitor the market for better interest rates; until then, we will maintain the accounts as currently situated.

9 Page 9 Mr. Hagemann provided information about the Capital Improvement Program with a budget of $3.8 million for this fiscal year. Actual expenditures for this year are anticipated to be around $3 million. He explained that some of the cost savings is a result of combining a couple of projects; others have been slightly delayed to get a better bid environment. For Major O&M the budget is $450k with actual expenditures anticipated to be only $280k. He then highlighted a few of the major projects with photos to illustrate the work being completed: Pump Stations Concrete Repairs and Gate Installation Reeside Pump Station Odor Control and Electrical Upgrades Coral Street Pump Station Electrical Redesign Monterey, Seaside, Ft. Ord, and Salinas Pump Stations Monterey Pacific Grove $700,000 $527,000 $140,000 Bioflocculation Upgrades Regional Treatment Plant $1,355,000 Digester Mixing Upgrades Regional Treatment Plant $1,240,000 Vice Chair Allion thanked staff for the comprehensive report on the Mid-Year Budget Status. B. Recycled Water Committee 1. Receive Committee Recommendations from RWC Meeting of February 16, 2012 Item 1 Review Proposed Options for Assisting the Development of the Monterey Peninsula Regional Water Authority Mr. Israel stated that the Authority asked for a response by February 23 to a letter they sent requesting input on: 1) our interest in working with the Authority; 2) our suggested role with the Authority; and 3) a description of the water supply alternatives that we are developing. Staff provided a general response back and indicated that at the February Board meeting the Board would formulate a more specific and comprehensive response to their inquiry. Discussion followed with Mr. Calcagno stating that he supported providing assistance to the Authority but cautioned that the Agency should be thoughtful in the amount of financial assistance that is provided. Ms. Downey stressed that the Authority will need some guidance in the areas of engineering expertise to provide technical support. Mr. Pendergrass agreed that the Authority is the Mayors answer to governance on peninsula water solutions and needs a Technical Advisory

10 Page 10 Committee (TAC) of experts to help educate the Authority in promoting the best projects for our community. Mr. Israel offered that this agency s support for the Authority (related to question 1) was confirmed in our letter of support on February 8 th. Regarding a role in working with the Authority, he offered that we could provide some limited technical staff support (40 hours, about $4,000), especially in light of the possibility that the Authority will have an executive management team available for administrative support. After some discussion the Board decided that this level of technical staff support would be appropriate especially because the cost could be reimbursed either by the Authority or as part of the cost for the GWR project. If the need is greater, additional technical support could be reconsidered by the Board in the future. Discussion followed regarding Cal Am efforts to go forward to build a desalination plant, and Mr. Nishi stated that the Regional Desal Project is not dead until the CPUC determines it is since it is the only project that is able to meet the imposed deadline of He continued by saying that he still has concerns that the expenditures by this Agency on the GWR project do not benefit Boronda, Salinas, Moss Landing, Castroville and MCWD and that is not appropriate. Ms. Garcia suggested that the members put on regional hats, look at the general fund and think about tourism because we need water to support the hospitality industry. When people come for the Moss Landing Antique Fair or the Salinas Rodeo, they are eating and staying in hotels all over the Peninsula. She expressed frustration that the Board is still having this discussion. Vice Chair Allion stated that staff may need to clarify exactly how the money spent on GWR will be reimbursed, and that it is not intended that the ratepayers in Salinas and elsewhere will be paying for this project. The people who will be paying for the GWR project are those who will be using the water and in this case it will be ratepayers living on the Peninsula. Mr. Israel continued by suggesting this Agency be part of a TAC to advise the Authority and noted that staff participates in other area TAC meetings. He also explained that we can t be a member of the Authority JPA or even an ad hoc member because their charter does not have any provision for that type of membership. When and if the Authority changes their JPA, and there is interest to have this Agency more involved, this would be brought back to the Board for consideration. After thorough discussion, the Board agreed to accept the following recommendation when the RWC Minutes/Report is approved. Board Recommendation: That the Board approve a response to the Monterey Peninsula Regional Water Authority showing support for the Authority in securing a future water supply; to provide 40 hours of technical staff support (limited to $4,000 which will be reimbursed); to

11 Page 11 participate as a member of the Technical Advisory Committee (TAC) and consider becoming an ad hoc member if the JPA were accordingly amended and upon further specific action by this Board. Item 2 Consider Additional Funding to Expedite the Groundwater Replenishment Project (GWR) Mr. Israel reported that Cal Am is proposing a reconfigured Regional Water Plan to the CPUC in April with GWR as a potential new component. As a result, our work on GWR must be able to maintain the project timeline. He explained that the Committee considered an expenditure plan for additional funding needed for the balance of this fiscal year to keep this project moving along in an expedited mode. Mr. Israel stated that as mentioned before, staff has historically accounted for costs related to specific projects and proposes that next month we will provide a detailed accounting of costs for the GWR. Information will be provided at the March Board meeting that will give some chronology and discuss the pluses and minuses in considering the overall benefit of this project and related activities to everyone. Basically the Agency treats the funding as a loan that will be repaid, similar to what was done for the MWRSA Study that preceded the SVRP/CSIP where we expended about $1 million. Regarding the current request for $309,400, Mr. Israel provided an itemized summary of GWR costs for the Board s review. He noted costs related to the Independent Advisory Panel and described the value that is added as a result of their involvement and advice in evaluating the progress of the project. He also described many of the proposed outreach activities that would be funded and the continuing work being done by our current project team. He noted that some funding was available through our reserves and as a result of several projects coming in under budget. Therefore, there are sufficient funds available to advance between now and the end of this fiscal year. Additionally staff is working with MPWMD as they are developing an MOU to assist in funding to support our GWR project. Discussion followed with the Board seeking more information on several elements of the GWR project: the monitoring wells, outreach activities, the IAP and then generally recognizing that that work on this project is progressing in order to meet the proposed deadline. Committee Recommendation: That the Board approve supplemental funding in the amount of $309,400 for expediting the GWR Project. Item 3 Update on the National Research Council Report Water Reuse Potential for Expanding the Nation s Water Supply through Reuse of Municipal Wastewater

12 Page 12 Mr. Holden reported that the National Research Council has produced a report on water reuse potential and highlighted a couple of the key points. He noted the website for the entire report: 12 billion gallons of municipal wastewater is discharged each day to estuary or the ocean Reuse of these discharges would augment water supplies by a significant amount Less than 1% of U.S. wastewater is reused Defacto (unplanned) potable reuse of wastewater effluent as a water supply is common most water supplies include some portion of wastewater in them Risk of pathogens from potable reuse does not exceed current approved drinking water systems Water conservation is least costly water reuse less expensive than seawater desalination Information only no action needed. Public Comments: Nancy Isakson, Salinas Valley Water Coalition, stated that although she supports going forward with the GWR project, she felt that identifying where the funding is coming from is very important. She did recognize that past and future costs for the GWR will be recovered when water is sold. In light of what has happened with the Regional Water Project, Cal Am had guaranteed payment for everything, but there are costs for MCWRA and MCWD that are still owed. As a ratepayer, she felt it is important to your constituents to be cautious and careful; consider what has happened and avoid the same problems. Mr. Orman stated that the Prop. 218 user rate fee increase was implemented to support the $40 million Capital Improvement Program projected over the next 20 years. He noted that currently we have an $800k excess and explained it could be used to fund the GWR project because this project is so important; however, the Board needs to remember the obligation we have in the future to rebuild the infrastructure. Mr. Pendergrass agreed and assured the public that this Board would continue to be transparent in financing the GWR and true to the obligations for designated funds. He added that an MOU was being developed for this Agency, MPWMD and Cal Am to work together and that the MPWMD was considering funding for the next budget years. The GWR would be the first of its kind in Northern California; there is, therefore, a lot of support for this to be accomplished.

13 Page Approve RWC Minutes/Report of February 16, 2012, including listed recommendations of the Committee. ACTION TAKEN: On a motion by Ms. Downey, seconded by Mr. Bloomer, the Board approved the RWC Minutes/Report of February 16, 2012 including the listed recommendations of the Recycled Water Committee. [All in favor, except Mr. Nishi who voted no.] 9. INFORMATIONAL ITEMS A. Reclamation Project Status Summary Mr. Israel stated the report has been updated. No questions. B. Strategic Planning Goals ( ) and One-Year Objectives Update Mr. Israel stated the goals have been updated. No questions. C. Status Report of Other Significant Projects No questions or comments. D. Operational Report No questions or comments. 10. STAFF REPORTS A. General Manager/Assistant General Manager/Legal Counsel Mr. Israel referred to an article by David Smith, Executive Director of the California WateReuse Association talking about implications of some of the new draft regulations for water recycling. He stated information would be provided in the future for review. He also announced the next meetings for the Water Authority: a special meeting on March 2; and, regular meetings on March 8 and March 22. Mr. Hagemann stated that at the last meeting it was announced that we had placed first for Plant of the Year in our local CWEA section. We have made it to the top tier in the State competition and have had inspectors come to the RTP. Should have results in the next few months. B. Department Heads Nothing to report. 11. CORRESPONDENCE There were no comments or questions.

14 Page BOARD MEMBER COMMENTS Ms. Garcia requested that future agenda items include discussion of the language around the 20% for the reserve policy and consideration for Cal PERS issue discussed earlier. Ms. Downey suggested that as we are promoting our GWR project, perhaps we should have purified water available for people to drink to demonstrate it safety. Mr. Lewis noted that he had the opportunity to drink the recycled water and stated there is nothing wrong with it. Vice Chair Allion asked for a show of hands of those who had drunk the recycled water [majority of people in the room raised their hands]. Mr. Nishi stated he was glad to be back on the MRWPCA Board. 13. ADJOURNMENT At 9:41 pm with no further business, Vice Chair Allion adjourned the meeting to the next regularly scheduled Board Meeting to be held in the Board Room at 5 Harris Court, Building D, Monterey, California on Monday, March 26, 2012 at 7:00 pm. Keith E. Israel, General Manager Dennis Allion, Vice Chair Secretary to the Board MRWPCA Board of Directors Z:\BOARD OF DIRECTORS\Board Meeting Minutes\2012\February\Board Minutes draft doc