MINUTES OF THE FORMAL BOARD OF DIRECTORS' MEETING

April 27, 2006

ADMINISTRATIVE AND FINANCE COMMITTEE
CALL TO ORDER / ROLL CALL

Chair Dixon called the Administrative and Finance Committee meeting to order at 9:02 a.m. Committee members present were Chair Dixon, Vice Chairs Dailey and Tu, and Directors Bowersox, Brammell, Johnson, Muir, Parker, Price, Steiner, Watton, and Williams. Committee members absent were Director Knutson and Representative

Slater-Price. Also present were Directors Bond, Croucher, Ferguson, Haddad, Lewanski, Lewinger, Lewis, Linden, Loveland, Martin, Rhinerson, Sundram, and Thompson. At that time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only Committee members participated in the vote. Staff present was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Assistant General Manager Cushman, Director of Finance/Treasurer Brust, Director of Administrative Services Young, Director of Human Resources Glover, and Deputy Director of Finance Sandler.

ADDITIONS TO AGENDA
There were no additions to the agenda.

PUBLIC COMMENT
There were no members of the public who wished to address the Committee.

CHAIR’S REPORT
Chair Dixon reminded the Committee that a rate model workshop would be held on May 18, and an updated calendar could be found in the back of the Administrative and Finance section of the Board packet. He also mentioned there would be a special Board meeting on May 2, 2006.

I. CONSENT CALENDAR

1. Professional Services Contract with Sol Pacific, LLC for janitorial services for the Kearny Mesa and Escondido Offices.

Pacific, LLC for janitorial services through June 30, 2007, with an option to extend the contract annually for two years, for a total not-to-exceed amount of $195,586.

2. Treasurer’s report.

Staff recommendation: Note and file monthly Treasurer’s report.

Director Johnson moved, Director Steiner seconded, and the motion carried unanimously to approve the Consent Calendar.

II. ACTION/DISCUSSION

1. Resolution establishing the amount due from the City of San Diego for the In-Lieu Charge as a condition of providing water service for Fiscal Year 2005-2006 .

Staff recommendation : Adopt Resolution 2006-____ establishing the amount due from the City of San Diego for the In-Lieu Charge for Fiscal Year 2005-2006 of $408,475. This amount reflects an In-Lieu Charge calculation based on property taxes less the monies shifted to the Educational Revenue Augmentation Fund (“ERAF”).

Mr. Sandler made a presentation on Water Authority’s In-Lieu Charge, and highlighted key points of the Board memo. He discussed the history and provided an explanation of the In-Lieu charge, the State Educational Revenue Augmentation Fund (ERAF) property tax shift, and the In-Lieu charge calculation. Mr. Sandler confirmed that staff was not recommending raising rates to meet the budget revenue shortfall.

Director Tu moved, Director Johnson seconded and the motion passed, to adopt Resolution 2006-____ establishing the amount due from the City of San Diego for the In-Lieu Charge for Fiscal Year 2005-2006 of $408,475. Director Bowersox opposed the motion.

III. INFORMATION

The following items were received and filed:

1. Report on calendar year 2007 Melded Untreated Municipal and Industrial Supply rate and Melded Municipal and Industrial Treatment rate.

2. Board of Director’s first Quarter 2006 payments and attendance.

3. Controller’s report on monthly financial statements.

4. Board Calendar.

IV. ADJOURNMENT

There being no further business to come before the Administrative and Finance Committee, Chair Dixon adjourned the meeting at 9:31 a.m.

ENGINEERING AND OPERATIONS COMMITTEE

CALL TO ORDER / ROLL CALL
Vice Chair Ferguson called the Engineering and Operations Committee to order at 9:41 a.m.. Committee members present were Vice Chairs Ferguson and Johnson and Directors Arant, Brammell, Croucher, Lewanski, Lewinger, Morrison, Sundram, Thompson and Tu. Chair Knutson and Director Rogers were absent. Also present were Directors Bond, Bowersox, Dailey, Dixon, Haddad, Lewis, Linden, Martin, Pocklington, Rhinerson, Steiner, Watton, and Williams. At the time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only Committee members participated in the vote. Staff present was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Director of Engineering Economides, Director of O&M Eaton, Director of Right of Way Rose, and Assistant Director of Engineering Stift.

ADDITIONS TO AGENDA
There were no additions to the agenda.

PUBLIC COMMENT
There were no members of the public who wished to address the Committee.

CHAIR’S REPORT
Vice Chair Ferguson spoke about the upcoming Engineering and Operations Tour on June 8, 2006 and reported on the recent activities of the Construction Costs Ad Hoc Committee.

I. CONSENT CALENDAR

1. Construction contract for cathodic protection of Escondido Pump Station Inlet Pipeline.

Staff recommendation: Award a contract for construction to American Construction & Supply, Inc. for $46,997 for cathodic protection of Escondido Pump Station Inlet Pipeline.

2. Notice of Completion for the Wetland Creation for the Manchester site.

Staff recommendation: Accept the Wetland Creation for the Manchester site project as complete, record the Notice of Completion, and release all funds held in retention to Sierra Pacific West, Inc., following expiration of notice of completion period.

Director Thompson moved, Director Croucher seconded and the motion carried unanimously, to adopt the Consent Calendar.

II. ACTION/DISCUSSION

CLOSED SESSION
Conference with Legal Counsel – Potential Litigation
Government Code §54956.9 (b)
Claim of TC Construction Co., Inc., and BIF, LLC: Ratify Contract Termination Agreement among TC Construction, Inc., BIF, LLC and the Water Authority in settlement of claim.

III. INFORMATION

Vice Chair Ferguson introduced new board member Gary Arant, General Manager of the Valley Center Municipal Water District.

IV. ADJOURNMENT

There being no further business to come before the Engineering and Operations Committee, Director Ferguson adjourned the meeting at 10:12 a.m.

LEGISLATION, CONSERVATION AND OUTREACH COMMITTEE
CALL TO ORDER/ROLL CALL

Chair Steiner called the Legislation, Conservation and Outreach Committee to order at 210:18 a :35 p.m. Committee members present were Chair Steiner, Vice Chair Croucher and Directors Bond, Dailey, Ferguson, Lewanski, Lewis, Morrison, Price, Rhinerson, Thompson, Tu, and Williams. Absent was Vice Chair Irvin. Also present were Directors Arant, Bowersox, Brammell, Dixon, Haddad, Johnson, Lewinger, Linden, Loveland, Martin, Muir, Parker, Pocklington, Quist, Rogers, Sundram, and Watton. At that time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only committee members participated in the vote. Staff present was was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Assistant General Manager Cushman, and Government Relations Manager Volberg.

ADDITIONS TO THE AGENDA
There were no additions to the agenda.

PUBLIC COMMENT
There were no members of the public who wished to address the Committee.

CHAIR’S REPORT
Chair Steiner reported that the Conservation Ad Hoc Committee would reconvene after the Managers’ Steering Committee had recommendations on funding for conservation and what conservation projects should be funded. The Committee would also reconvene on a future date to discuss funding proposals for the next two-year budget cycle for the Water Conservation Garden.

DIRECTORS’ COMMENTS
There were no comments from the Directors.

CONSENT CALENDAR

1. Authorize Resolutions for the United States Bureau of Reclamation Water 2025 and CALFED Water Use Efficiency Grant Programs.

Staff recommendation: Authorize resolutions to file for Reclamation’s Water 2025 and CALFED WUE Grant Programs. (Action)

Director Croucher moved, Director Ferguson seconded, and motion carried unanimously to authorize resolutions to file for Reclamation’s Water 2025 and CALFED WUE Grant Programs.

II. ACTION/DISCUSSION

1. Legislative issues.
1-A Report by Carpi and Clay.

Legislative Advocate Jonathan Clay reported on issues in Sacramento and Legislative Advocate Ken Carpi reported on issues in Washington, D.C.

1-B Resolution expressing Support for Senate Bill 511 (Hollingsworth) relating to Water Authority Board governance.

Director Croucher moved, Director Dailey seconded, and the motion carried unanimously, to adopt Resolution No. 2006-___, a Resolution of the San Diego County Water Authority Board of Directors, expressing support for SB 511 (Hollingsworth).

1-C Adopt positions of: Support on AB 984 (Laird); Co-sponsorship of AB 2496 (Laird); Support on AB 2515 (Ruskin); and Support on SB 1640 (Kuehl).

Director Croucher moved, Director Price seconded, and the motion carried unanimously, to adopt positions of support on AB 984 (Laird); Co-sponsorship of AB 2496 (Laird); Support on AB 2515 (Ruskin); and Support on SB 1640 (Kuehl).

1-D Adopt 2006 water bond policy principles.

Director Ferguson moved, and Director Tu seconded. A seventh bullet was added to the section of “Water supply and water quality.” The bullet is as follows: “Provide funding for water supply-related habitat conservation plans.” Chair Steiner called for the question and the motion carried unanimously.

III. INFORMATION

The following items were received and filed:

1. Status report on legislation and legislative positions.

2. Report on conservation efforts.

3. Water Conservation Garden report.

4. Outreach activities for the month of March.

IV. ADJOURNMENT

There being no further business to come before the Legislation, Conservation and Outreach Committee, Chair Steiner adjourned the meeting at 11:03 a.m.

IMPORTED WATER COMMITTEE
CALL TO ORDER / ROLL CALL

Chair Muir called the Imported Water Committee to order at 11:10 a.m. Committee members present were Vice Chairs Martin and Saunders and Directors Arant, Bond, Bowersox, Haddad, Johnson, Lewis, Linden, Parker, Pocklington, and Quist. Committee member Representative Slater-Price was absent. Also present were Directors Brammell, Dailey, Ferguson, Lewanski, Lewinger, Loveland, Morrison, Price, Rhinerson, Rogers, Sundram, Thompson, Watton, and Williams. At that time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only committee members participated in the vote. Staff present included General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Assistant General Manager Cushman, Director of Imported Water Hess, Colorado River Program Manager Razak, and others.

ADDITIONS TO AGENDA
There were no additions to the agenda.

PUBLIC COMMENT
There were no members of the public who wished to address the Committee.

CHAIR’S REPORT
Chair Muir reported that the Governor’s office released the ten-year action plan for the revitalization of CALFED and staff would review the plan at the May Committee meeting. He stated that DWR was increasing its allocation of State Water Project water for the contractors from eighty percent to one hundred percent of requests, so that 4.13 maf would be distributed amongst 29 state water project contractors including MWD.

4-A Directors’ comments.
There were no comments from Directors.

CONSENT CALENDAR
There were no items on the consent calendar.

II. ACTION/DISCUSSION

1. MWD Issues and Activities update.
1-A MWD Delegates report.

The delegates discussed the status of MWD’s labor negotiations including a possible strike, desalination, the Diamond Valley Lake recreation contractor negotiations, and the status of the recruitment for the General Counsel position.

2. Quantification Settlement Agreement.
2-A QSA Quarterly report.

Ms. Razak reported on recent activities of the QSA implementation.

2-B QSA Ad-Hoc Committee report.

Director Watton stated that the Ad-Hoc Committee discussed the Water Authority’s participation on Reach 3 of the All American Canal lining project, and that the Committee supported staff’s recommendation and moved the recommendation to the board. He said that the Committee requested that staff review the increasing costs of the CIP budget. The committee was updated on the status of the fallowing and economic mitigation. He said that the Local Entity was including other members of the Imperial Valley community in their meetings.

2-C Report on All American Canal Lining Project, Coachella Canal Lining Project, CIP budget increase, and recommendation on the Water Authority’s Participation in Reach 3 Construction.

Staff recommendation : Increase the CIP Fiscal 2006 and 2007 budget for the Coachella Canal Lining Project by $4.0 million and construct the All American Canal Lining Project, including Reach 3, and increase the CIP Fiscal 2006 and 2007 budget for this project by $38.3 million.

Ms. Razak reviewed the options for the Water Authority’s participation in the construction of Reach 3 of the All American Canal, the funding requirements based on the bid results for the Canal, and staff’s recommendation. Directors asked questions regarding MWD’s wheeling charge rates and if there would be an impact to the Water Authority’s rates. Directors asserted their support for the Water Authority constructing Reach 3 due to the reliability of the water and the certainty of the long-term costs, while others voiced concerns over the cost. Director Pocklington moved, Director Johnson seconded, and the motion passed to approve the staff recommendation. Directors Quist and Arant voted no.

Chair Muir asked to discuss item 3 on the agenda, Colorado River, prior to the closed session.

3. Colorado River
3-A Report by Colorado River Board representative.

Chairman Bond discussed the Seven Basin States proposal concept of “intentionally created surplus” credits for Lake Mead storage and said the Water Authority was working with MWD for a possible sub-contractor partnership for that storage.

The Committee recessed into closed session at 12:10 p.m.

Vice Chair Martin reconvened the Committee at 2:33 p.m. and went into closed session. Chair Muir had left the meeting for the afternoon session.

2-D CLOSED SESSION:
Conference with Legal Counsel – Potential Litigation
Government Code §54956.9(b) – One case.
The Committee reconvened at 3:15 p.m. General Counsel Hentschke stated that the Committee discussed the closed session item and that there were no reportable actions.

III. INFORMATION
The following information items were noted and filed:

1. Quarterly Bay-Delta report

2. Imported Water Activities report.

IV. ADJOURNMENT
There being no further business to come before the Imported Water Committee, Vice Chair Martin adjourned the meeting at 3:16 p.m.

WATER PLANNING COMMITTEE MEETING
CALL TO ORDER / ROLL CALL

Chair Haddad called the Water Planning Committee meeting to order at 1:00 p.m. Committee members present were Vice Chair Lewinger and Watton, and Directors, Irvin, Linden, Loveland, Martin, Pocklington, Rhinerson, Rogers, Saunders, and Sundram. Committee members absent were Directors Dixon and Irvin. Also present were Directors Arant, Bond, Bowersox, Brammell, Dailey, Ferguson, Johnson, Lewanski, Lewis, Morrison, Muir, Parker, Price, Thompson, and Williams. At that time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however only the committee members participated in the vote. Staff present was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Assistant General Manager Cushman, Director of Water Resources Weinberg, Water Resource Manager Purcell, Seawater Desalination Program Manager Yamada, and Water Resources Specialist Tegio.

ADDITIONS TO AGENDA
There were no additions to the agenda.

PUBLIC COMMENT
There were no members of the public who wished to address the committee.

CHAIR’S REPORT
Chair Haddad announced that a Special Water Planning Committee meeting was scheduled May 2, 2006, to continue review of the Water Authority’s draft Drought Management Plan and allocation methodology and communication strategy contained in the Plan. He thanked the Board members that attended the Regional Seawater Desalination Project at Encina Open House and Public Hearing on the Draft Environmental Impact Report in Carlsbad, Monday, April 24, 2006.

Directors’ Comments
None

I. CONSENT CALENDAR

1. Authorize agreement with U. S. Fish & Wildlife Service to provide staff for processing the San Diego County Water Authority Subregional NCCP/HCP in the amount of $600,000.

Staff recommendation: Authorize execution of Agreement with U.S. Fish & Wildlife Service to provide NCCP/HCP and CIP project processing for a 36-month period for a not-to-exceed amount of $600,000.

2. Authorize agreement with U. S. Army Corps of Engineers to provide staff for expedited processing of permits and other regulatory actions in the amount of $250,000.00.

Staff recommendation: Authorize execution of an agreement with U. S. Army Corps of Engineers to provide staff for expedited processing of permits and other regulatory actions for a 24-month period in an amount not to exceed $250,000.

3. Amend the agreement between the San Diego County Water Authority and the Rincon del Diablo Municipal Water District for Reclaimed Water Development Fund Incentives.

Staff recommendation: Approve the amendment with the Rincon del Diablo Municipal Water District for Reclaimed Water Development Fund Incentives.

4. Approval of Financial Assistance Program Applications Fiscal Year 2006 Submittal Period.

Staff recommendation: Authorize the General Manager to enter into a joint participation agreement with the Sweetwater Authority for the Sweetwater Authority/City of Chula Vista Joint Membrane Bioreactor Feasibility Study to award an amount not to exceed $25,000 for the project.

Director Pocklington moved, Director Lewinger seconded, and the motion carried unanimously to approve the Consent Calendar.

II. ACTION / DISCUSSION
1. Public Hearings.
1-A. Receive comments from the public for the Mission Trails Flow Regulatory Structure II, and Pipeline Tunnel Project Environmental Impact Report.

Mr. Tegio presented to the Board the Mission Trails Flow Regulatory Structure II, and Pipeline Tunnel Project Environmental Impact Report.

Members of the public who addressed the Board were Roberta Froome, San Diego; Paul Rogalsky, San Diego; Bob Muldrew, Tierrasanta; Ken Oertle, Tierrasanta; Benjamin Eastman, San Diego; Tim Taylor, San Diego; and Eric Germain, Tierrasanta.

1-B. Receive comments from the public for the Regional Seawater Desalination Project at Encina Environmental Impact Report.

Mr. Purcell reviewed the Regional Seawater Desalination Project at Encina.

One member of the public addressed the Boardm Mr. Ed Kimura, San Diego.

2. Regional Seawater Desalination
2-A Update on desalination at Encina Power Station.

Mr. Yamada presented an overview on State Lands Commission Resolution on Once Through Cooling as related to the Regional Seawater Desalination Project at Encina. He then briefed the Committee on the Ocean Protection Council and the amended Resolution passed April 20, 2006.

2-B CLOSED SESSION:
Conference with Real Property Negotiator
Government Code §54956.8
Property: Property interests for a regional desalination project at the Encina Power Plant site in the City of Carlsbad
Agency Negotiators: Maureen Stapleton, Daniel Hentschke, Ken Weinberg
Negotiating Parties: Cabrillo Power, LLC;
Poseidon Resources, Inc.
Under Negotiations: Price and terms of acquisition

Chair Haddad directed Mr. Hentschke to take the Water Planning Committee into Closed Session at 2:15 p.m.

The Water Planning Committee reconvened at 2:25 p.m. Mr. Hentschke stated that at that time, there was nothing to report.

III. INFORMATION

The following item was received and filed:

1. Water Resources Report

IV. ADJOURNMENT

There being no further business to come before the Water Planning Committee, Chair Haddad adjourned the meeting 2:27 p.m.

FORMAL BOARD OF DIRECTORS’ MEETING OF APRIL 27, 2006

1. CALL TO ORDER. Chairman Bond called the Formal Board of Directors’ meeting to order at 3:25 p.m.

2. SALUTE TO THE FLAG. Vice Chairman Loveland led the salute to the flag.

3. ROLL CALL, DETERMINATION OF QUORUM. Secretary Lewis called roll. Directors present were Arant, Bond, Bowersox, Brammell, Dailey, Dixon, Ferguson, Haddad, Johnson, Lewanski, Lewinger, Lewis, Linden, Loveland, Martin, Morrison, Parker, Pocklington, Price, Saunders, Steiner, Thompson, Tu, Williams and Watton. Directors absent were Croucher, Irvin, Knutson (p), Muir (p), Quist (p), Rhinerson, Rogers, Sundram, and Representative Slater-Price.

3-A Report on proxies received. Director Ferguson was the proxy for Directors Knutson and Quist; Director Watton was the proxy for Director Muir.

4. ADDITIONS TO AGENDA. There were no additions to the agenda.

5. APPROVAL OF MINUTES. Director Johnson moved, Director Martin seconded and the motion carried for a total of 94.13% of the vote, to approve the minutes of the Formal Board of Directors’ meeting of March 23, 2006.

6. OPPORTUNITY FOR MEMBERS OF THE PUBLIC WHO WISH TO ADDRESS THE BOARD ON MATTERS WITHIN THE BOARD’S

JURISDICTION. There were no public speakers.

7. PRESENTATIONS & PUBLIC HEARINGS

7-A Retirement of Director. The Board adopted Resolution No. 2006-14 honoring Gary Broomell upon his retirement from the Board of Directors.

7-B Appointment of Director Gary Arant, representing Valley Center Municipal Water District. Term expires January 13, 2008.

7-C Presentation of Science Fair award winners.

Education Programs Supervisor Golakoff introduced the Science Fair Winners.

8. REPORTS BY CHAIRS

Chairman’s Report – Chairman Bond .

Chairman Bond reviewed the meetings he recently attended including the Hispanic Chamber, City of Escondido, Olivenhain Municipal Water District, Ramona Municipal Water District and Santa Fe Irrigation District.

Administrative and Finance Committee . Director Dixon announced all items had passed in committee.

Engineering and Operations Committee . Director Ferguson announced all items had passed in Committee. In addition, the Board voted to ratify Contract Termination Agreement among TC Construction, Inc., BIF, LLC and the Water Authority in settlement of claim.

Legislation, Conservation and Outreach Committee . Director Steiner announced all items had passed in Committee. In addition, the Board adopted the proposed policy principles regarding a 2006 water bond, with the addition of “Provide funding for water supply-related habitat conservation plans.”

Imported Water Committee . Director Martin announced all items had passed in Committee.

Water Planning Committee. Director Watton announced all items had passed in Committee.

CONSENT CALENDAR

Director Tu moved, Director Pocklington seconded, and the motion carried at 94.13% of the vote, to approve the amended Consent Calendar. Abstentions and those voting no were listed under the item.

10. ACTION / DISCUSSION
There were no items.

11. CLOSED SESSIONS:

At 3:50 p.m. Chairman Bond took the Board into Closed Session. Chairman Bond reported there was no need for the closed session for items 11-A, 11-B and 11-C.

The following action was taken by the Board in Closed Session:

Approve adjustments to compensation for General Manager and General Counsel .

The Board authorized the Chair to execute amendments to the employment agreement with the General Manager increasing the amount of compensation by 4% for $9,756 and to the employment agreement with the General Counsel increasing the amount of compensation by 4% for $7,967.

12. SPECIAL REPORTS

12-A GENERAL MANAGER’S REPORT – No report was given.

12-B GENERAL COUNSEL’S REPORT – No report was given.

12-C ACWA-JPIA REPORT – Director Knutson. No report was given.

12-D SANDAG REPORT – Director Dailey announced SANDAD had added an additional seat to their Board representing the unincorporated portion of San Diego County.

SANDAG Subcommittee: Borders/Regional Planning Committee - Director Williams announced he would be providing his report in a written manner.

13. OTHER COMMUNICATIONS

14. ADJOURNMENT

There being no further business to come before the Board, Chairman Bond adjourned the meeting at 4:00 p.m.

__________________________________
James H. Bond
Chairman

_______________________________
Claude A. Lewis
Secretary

________________________________
Doria F. Lore, Clerk of the Board

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