MPRWA Special Meeting Agenda Packet 01-14-16

Agenda
Monterey Peninsula Regional Water Authority (MPRWA)

Director's Special Meeting
5:00 PM, Thursday, January 14, 2016
Council Chambers
440 Harcourt Avenue
Seaside, California
ROLL CALL
PLEDGE OF ALLEGIANCE
REPORTS FROM BOARD DIRECTORS AND STAFF
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.
APPROVAL OF MINUTES
1.
Approve Minutes from December 10, 2015 - Swain

CONSENT AGENDA
2.
Approve and File Authority Checks Through January 14, 2016 - Swain
3.
Approve Extension of Contract with the City of Seaside for Financial Support Services for
the Monterey Peninsula Regional Water Authority (MPRWA) to June 30, 2016 at a Price of
$2500 - Cullem
4.
Approve Schedule of Calendar Year 2016 Meeting Dates for the Water Authority - Swain
AGENDA ITEMS
5.
Receive and Accept Annual Financial Report and a Full Opinion Audit for FY 2014-2015
from McGilloway, Ray, Brown and Kaufman (Kaufman) CPA, Approve a Modification to the
Kaufman Contract to Complete the FY 2015- 2016 and FY 2016-2017 Audits with a
Completion Date of March 1, 2018 at an additional fee not-to-exceed $14,500, and Provide
Direction to Staff - Kaufman/Cullem
6.
Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP) and the Status of Test Slant Well Operations and Results, and
Receive a Report on Prices of the MPWSP Which Cal Am Submitted to the CPUC on
December 15, 2015 - Crooks
7.
Receive Report, Discuss, and Provide Direction on the Pure Water Monterey (PWM) /
Ground Water Replenishment (GWR) Project Draft Testimony to the California Public
Utilities Commission and the Request from the Monterey Regional Water Pollution Control
Agency and the City of Monterey to Send a Letter to Cal Am in Support of Finalization of
the Water Purchase Agreement - Cullem/Stoldt
8.
Receive Report, Discuss, and Provide Direction on a Draft Term Sheet from the Castroville
Community Services District (CCSD) for the Purchase and Use of Return Water from the
Monterey Peninsula Water Supply Project (MPWSP) Desal Facility - Cullem
9.
Receive Report, Discuss, and Provide Direction on a Draft Term Sheet from the Surfrider
Association Concerning MPWSP Desal Facility Brine Disposal - Cullem
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, speechto-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.
M I N U TE S
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Regular Meeting
7:00 PM, Thursday, December 10, 2015
COUNCIL CHAMBER
MONTEREY, CALIFORNIA
Directors Present:
Directors Absent:
Rubio, Edelen, Pendergrass, Kampe, Burnett, Alternate Director Downey

Roberson
Staff Present:
Executive Director, Legal Counsel, Clerk
ROLL CALL
President Burnett called the meeting to order at 7:01 PM.
Alternate Director Downey was present for Director Roberson.
PLEDGE OF ALLEGIANCE
REPORTS FROM BOARD DIRECTORS AND STAFF
President Burnett invited reports from the Board and Staff.
Executive Director Cullem reported that he attended the workshop on the externalities study at
the Water Management District. He then welcomed Bill Connor, the legal counsel stand-in for
Don, and Nova Swain, the Clerk understudy for Lesley Milton.
President Burnett said that the cease and desist order (CDO) proposal that the board adopted
at the last meeting was submitted to the State, and stated that there is now a prohibition on exparte communications with the Board and its staff..
PUBLIC COMMENTS
President Burnett opened public comments. Receiving no requests to speak he closed the
public comments session.
CONSENT AGENDA
Executive Director Cullem requested that the minutes from November 12th, item #6, be changed
to reflect that the City of Monterey contract be awarded on a fiscal year basis, not a calendar
year basis. Mr. Cullem says this would change the dollar amount to $15,000, and extend
contract to the end of the fiscal year on June 30th 2016.
Libby requested to abstain from items #1 and #2, approval of minutes because she was not
present for those meetings.
On a motion by Director Pendergrass and seconded by Director Edelen and passed with the
following vote, the Authority Directors approved Consent Agenda items 1-6 with the
modification of the dollar amount in the November 12th minutes to $15,000 for contract
extension through June 30th. Approved (6-0) with Director Downey abstaining from items 1-2.
MPRWA Minutes
Thursday, December 10, 2015
1.
Approve Minutes from August 13, 2015 - Milton

Action: Approved, Libby abstained
2.
Approve Minutes from November 12, 2015

Action: Approved with change, Libby abstained
3.
Approve and File Authority Checks Through December 10, 2015

Action: Approved
4.
Receive Report on the November 17, 2015 Update of the California Public Utilities Commission
(CPUC) Schedule for the Monterey Peninsula Water Supply Project
Action: Approved
5.
Terminate the Contract with the City of Seaside for Clerk of the Board and Financial Support
Services for the Monterey Peninsula Regional Water Authority (MPRWA) as of Dec 31, 2015,
Adopt Resolution 2015-ZZ Approving an Agreement with the City of Monterey for Those
Services, and Authorize The Authority President to Execute a Contract with the City of
Monterey for at a Price not to Exceed $15,000 for the Period January 1 to June 30, 2016
Action: Approved
6.
Approve Extension of the Separation Processes Inc (SPI) Contract Until 30 June 2016 for
Additional Technical Support to the MPRWA and Authorize the Expenditure of Not-to- Exceed
$10,000 from Reserve Funds
Action: Approved
AGENDA ITEMS
7.
Presentation of Certificate of Appreciation to Lesley Milton

President Burnett presented an award of appreciation to Lesley Milton who is retiring from
MPRWA Clerk of the Board. Lesley Milton thanked the Board for the opportunity to serve the
community.
8.
Receive Report and Discuss the Status of the Pure Water Monterey (PWM) / Ground Water
Replenishment (GWR) Project.
Dave Stoldt the General Manager of the Monterey Peninsula Water Management District
(MPWMD) reported that Marina Coast Water District approved the pipeline agreement with the
Monterey Regional Water Pollution Control Agency (MRWPCA). He also reported that the
MRWPCA Board is considering a 2.4 million dollar contract to award bid packets for various
design components for the project to be ready to go in July. The externalities study that Director
Cullem attended made progress by pulling out the financial analysis and focusing solely on the
non-project economics such as social or sustainable return on investment.
Mr. Stold reported that most of the 9 criteria related to groundwater replenishment with Pure
Water Monterey (PWM) have been met but that cost comparison remains the largest hurdle. He
said the cost of PWM is $1,800-2,100 per acre foot and desal water is $3,000 per acre foot, and
there isnt enough recycled water to do everything so a desal plant with associated cost is
required. On December 15th there will be a filing for updated cost estimates. Mr. Stoldt invited
questions from the Board.
Monterey Peninsula Regional Water Authority

Regular Meeting Minutes - Thursday, December 10, 2015
2
MPRWA Minutes
Alternate Director Downey asked about the status of the water purchase agreement with
California American Water (CalAm). Mr. Stoldt responded that the work with CalAm has been
cooperative and well attended although there is a slow response with CalAm. One issue is
CalAm is requesting a joint and severable liability between PCA and MPRWA but neither partys
legal counsel will agree to that due to the operational and financial differences between the two
agencies. Mr. Stoldt responded that the MPRWA doesnt want to subordinate the agreement
already in place with the growers by allowing CalAm to tap into the drought reserve. Overall
most of the agreements have been executed and there is a draft agreement which might be
done by December 31st. Alternate Director Downey questioned if another agency is added to the
agreement later they will want some control. Mr. Stoldt replied that adding another agency will
decrease the buffer of allocated water. He added that there may be additional water sources or
annexations and pre-existing water rights that need to be factored in to the agreement. Alternate
Director Downey asked President Burnett if the time in between meetings with CalAm could be
reduced to encourage CalAm to be more efficient. President Burnett said the MPRWA is not
centrally involved in those negotiations but that there are other agencies involved.
Dave Stoldt answered financial questions of the board.
Dave Stoldt gave a report that MPRWA is in the application pool for a state loan, and is
applying for storm water grants to reduce the overall cost.
9.
Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP), including Award of Production Well and Conveyance System
Contracts and Status of Test Slant Well Operations and Results
Catherine Stedman from CalAm Public Relations gave a report that the current schedule
remains on track for project completion in 2019. The conveyance facility contract selections will
be publicly available on December 11.
President Burnett stated that the governance committee recommended a contract for source
water slant wells close to the budgeted amount. Ms. Stedman stated the contract is with the
lowest bidder.
10.
Receive Report, Discuss, and Revise the Mission, Purpose, and Sunset of the Monterey
Peninsula Regional Water Authority
Executive Director Cullem reviewed the Monterey Peninsula Water Authority Authority
(MPRWA) mission, work plan, and duration of the Authority. There was a previous revision to
the mission statement i.e., replace "Cities' water users" with "water users within the
incorporated cities and unincorporated portions of the County". Mr. Cullem asked for the board
to give feedback on the mission statement and work plan.
President Burnett said the County had questions about the sunset date of the Authority.
Director Rubio wondered what was meant by the County concern about "mission creep", and
was unaware of the Authority adding projects or doing anything outside of the scope. President
Burnett responded that the County did not have any specific examples of mission creeping from
the Authority when they were asked.

3
MPRWA Minutes
President Burnett opened public comments.
Jody Hansen from the Monterey Peninsula Chamber of Commerce, read from a letter in
support of MPRWA from the Coalition of Peninsula Businesses. The letter supported the
MPRWA not sun setting until the mission is accomplished
President Burnett responded to public comments, and asked for comments from the board.
Director Edelen spoke in support of the Authority continuing until water is flowing, and remain to
ensure the Water Management District is accountable, and taxpayer money is used to secure
future water sources and growth.
Director Pendergrass agreed that the Authority was formed to accomplish a mission and should
remain to collaborate with all the agencies and support each other.
President Burnett said he suggests the option where the Authority sunsets at first production of
water from the full portfolio of Monterey Peninsula Water Supply Project (MPWSP), GWR,
enhanced ASR, and lifting of the CDO.
Director Kampe suggested adding some milestones to reach by 2017 to ensure that the
mission is on track. He also said the Authority should be alert once the water is flowing that its
usage is appropriate and have a voice in the policy process.
President Burnett said that an Environmental Impact Report (EIR) should be formed to make
sure the water is allocated correctly, and that process should begin sooner rather than later.
Alternate Director Libby said the Authority needs to be careful how money is spent, and also be
proactive and join with Local Agency Formation of Monterey County (LAFCO) or MPWMD.
Rubio said LAFCO may not be the appropriate agency to collaborate with due to the Joint
Powers Authority (JPA) special legislation. Alternate Directory Downey conceded that LAFCO
may not be the correct agency to work with but to keep the idea on the horizon, such as
creating a JPA with the Water District.
Director Rubio said some more milestones should be reached before deciding when to sunset.
Director Kampe said he sees the MPRWA working as collaborators with the MPRWMD on how
water is allocated and conserved. He would like to see the Authority assist businesses use
water resources more efficiently.
Director Pendergrass opined he would like to have less frequent meetings and less repetition.
Director Rubio made a motion for the Authority to adopt the position to sunset at the first
production of water from the full portfolio of the MPWSP, and the lifting of the cease and desist
order, this was seconded by Director Kampe.
Alternate Director Downey asked to clarify if voting for the Authority to sunset at the first
production of water from the full portfolio of water would be a concrete decision. Bill Connor
stated that this would not be set in stone if the Authority decided in the future to vote again on a
new sunset date. Alternate Director Downey said she could support the motion if it meant that it
4
MPRWA Minutes
was not set in stone.

The motion made by Director Rubio, seconded by Director Kamp for the Authority to adopt the
position to sunset at the first production of water from the full portfolio of the MPWSP, and the
lifting of the cease and desist order, passed unanimously (6-0).
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
6
0
0
0
0
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
Downey, Edelen, Kampe, Pendergrass, Rubio, Burnett

None
None
None
None
ADJOURNMENT
The meeting adjourned at 8:35pm.
ATTEST:
Nova Swain, Clerk of the Authority
MPRWA President

5

Agenda Report
FROM:
Date: January 14, 2015

Item No: 1
Authority Clerk Milton
SUBJECT: Approval and File Authority Checks through November 6, 2015

RECOMMENDATION:
It is recommended that the Authority approve and file the accounts payable payments
made during the period November 6, 2015 through December 31, 2015 with total
payments for the above referenced period of $43,834.53 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.
$15,000 City of Monterey for Clerk & Administrative services January 1, 2016June 1, 2016
$10,000 to City of Seaside for Clerk and Administrative Services August 1, 2015
to December 31, 2015
$2,500 to City of Seaside for Financial Services December 31, 2015 through
June 30, 2015
$10,579.08 To Brownstein Hyatt Farber & Schreck for Services Rendered

through November 30, 2015 $160.00 to Access Monterey Peninsula
$4,875.00 to McGilloway, Ray Brown & Kaufman for Financial Audit Services
$440.00 to Access Monterey Peninsula
$440.45 to Jim Cullem expenditures Reimbursement CPUC Trip
The bank balance as of January 5, 2016 is sufficient cover the above check therefore,
staff is recommending approval.
ATTACHMENTS:
1. Budget to Actual Report through December 31, 2015
2:48 PM
01/08/16
Accrual Basis
ATTACHMENT 1
Profit & Loss Budget vs. Actual

July 1, 2015 through January 8, 2016
Jul 1, '15 - Jan 8, 16
Budget
$ Over Budget
% of Budget
Ordinary Income/Expense
Income
47200 Program Income
47230 Membership Dues
0.00
137,000.00
-137,000.00
0.0%
47240 Program Service Fees
0.00
0.00
0.00
0.0%
47250 Reimbursement SPI Contract
0.00
0.00
0.00
0.0%
47260 Reimburesment VE Contract
0.00
0.00
0.00
0.0%
47200 Program Income - Other
0.00
0.00
0.00
0.0%
0.00
137,000.00
-137,000.00
0.0%
Total 47200 Program Income
49900 Uncategorized Income

Total Income
0.00
0.00
0.00
0.0%
0.00
137,000.00
-137,000.00
0.0%
Expense
60900 Administration and Clerical
60901 Clerk of the Board
0.00
24,000.00
-24,000.00
0.0%
60902 Executive Director
19,866.77
85,000.00
-65,133.23
23.37%
60903 Principal Offc of the Authority
0.00
5,000.00
-5,000.00
0.0%
60904 Financial Services
0.00
6,000.00
-6,000.00
0.0%
60905 Misc Admin Expenses
0.00
500.00
-500.00
0.0%
60900 Administration and Clerical - Other
0.00
0.00
0.00
0.0%
19,866.77
120,500.00
-100,633.23
16.49%
Total 60900 Administration and Clerical
62100 Legal Fees

62110 Board Counsel
15,000.00
36,000.00
-21,000.00
41.67%
62140 Special Counsel
70,093.98
100,000.00
-29,906.02
70.09%
0.00
0.00
0.00
0.0%
85,093.98
136,000.00
-50,906.02
62.57%
62100 Legal Fees - Other

Total 62100 Legal Fees
62800 Contract Services

50.00
0.00
50.00
100.0%
60806 Contract VE
0.00
0.00
0.00
0.0%
62802 Audit Services
0.00
6,000.00
-6,000.00
0.0%
1,522.50
5,000.00
-3,477.50
30.45%
62804 Contract Services & Studies
0.00
0.00
0.00
0.0%
62805 Contract SPI
0.00
0.00
0.00
0.0%
919.80
0.00
919.80
100.0%
Total 62800 Contract Services
2,492.30
11,000.00
-8,507.70
22.66%
65000 Insurance
6,438.48
7,500.00
-1,061.52
85.85%
521.20
5,000.00
-4,478.80
10.42%
66000 Payroll Expenses
0.00
0.00
0.00
0.0%
68300 Contingency
0.00
10,000.00
-10,000.00
0.0%
114,412.73
290,000.00
-175,587.27
39.45%
-114,412.73
-153,000.00
38,587.27
74.78%
0.45
0.00
0.45
100.0%
0.45
0.00
0.45
100.0%
0.00
0.00
0.00
0.0%
0.00
0.00
0.00
0.0%
0.45
0.00
0.45
100.0%
-114,412.28
-153,000.00
38,587.72
74.78%
60801 Public Outreach
62803 Televised Meeting
62800 Contract Services - Other
65100 Travel Expenses
Total Expense
Net Ordinary Income
Other Income/Expense
Other Income
47220 Interest Earned
Total Other Income
Other Expense
80000 Ask My Accountant
Total Other Expense
Net Other Income
Net Income
Page 1 of 1

Agenda Report

Item No: 3.
FROM:
Executive Director Cullem
SUBJECT:
Approve Extension of Contract with the City of Seaside for Financial

Support Services for the Monterey Peninsula Regional Water Authority
(MPRWA) to June 30, 2016 at a Price of $2500.
RECOMMENDATION:
It is recommended that the Authority extend the contract for MPRWA financial support
services with the City of Seaside through June 30, 2016.
DISCUSSION:
In CY 2012 and 2014, the City of Carmel-by-the-Sea provided financial services to the
MPRWA on a pro-bono basis. In January 2014, on advice from its auditors, the
Authority contracted with the City of Seaside to assume financial services at an annual
fee of $5000 as a part of the Clerical Services contract. In November 2015, the City of
Seaside indicated that it could not continue to provide Clerk of the Board and clerical
support after December 31, 2015 nor financial support services after June 30, 2016.
At its meeting of Dec 10, 2015, In order to provide continuity and to retain access to the
City of Monterey (Agency of Record) computer system, the Water Authority Board
authorized the Authority President to enter into a contract with the City of Monterey for
Clerk of the Board and clerical support services for the period January 1 to June 30,
2016, at a price of $15,000.
In December 2015 the City of Monterey agreed to return to its original contract
arrangement with the Water Authority under which it will resume providing Clerk of the
Board and clerical support services as of Jan 1, 2016, in addition to the previously
extended contract for Agency of Record and Executive Director services, until June 30,
2016. The City of Monterey also agreed to assume provision of financial support
services on July 1, 2016, provided the City extends its contract to provide the Clerk of
the Board and remain the MPRWA Agency of Record for FY 2016-2017.
FISCAL IMPACT:
The contract extension with the City of Seaside for financial support services provides
for a reimbursement of $5,000 per fiscal year. Since Seaside will continue to provide
those services through the balance of FY 2015-2016, it will receive an additional $2500
in reimbursement for the period January 1 to June 30, 2016. These funds are budgeted.

Agenda Report
FROM:

Item No: 4.
SUBJECT: Approve Schedule of Calendar Year 2016 Meeting Dates for the Water
Authority
RECOMMENDATION:
It is recommended that the Water Authority approve the schedule for its
meetings during calendar year 2016.
DISCUSSION:
During calendar 2015, the Water Authority has been able to conduct business on the
second Thursday of each month, with the fourth Thursday of each month reserved for
an optional meeting. Efforts were made to move the meeting to an earlier time or
alternate date but we were unable to secure a regular meeting place and had conflicts
with scheduling AMP live coverage. Therefore, It is recommended that the meeting
schedule remain the same for 2016.
ATTACHMENTS:
Draft meeting schedule for CY 2016.
2016 Meeting Dates

Directors Meeting Dates through December 31, 2016
All meetings are on the Second Thursday of the month at 7:00 p.m. unless otherwise posted. The
Fourth Thursday of the month is an Optional Meeting if necessary.
January 14/January 28
August 11 / August 25
February 11 / February 25
September 8 / September 22
March 10 / March 24
October 13 / October 27
April 14 / April 28
November 10 only (November 24 is a
May 12 / May 26
Holiday)
June 9/ June 23
December 8 only
July 14/ July 28
TAC Meeting Dates through December 31, 2016

All meetings are on first Monday of the month at 10:30 a.m. unless otherwise posted. The third
Monday of the month is an Optional Meeting if necessary.
January 4
August 1
February 1
September 19 only (September 5 is a
March 7
Holiday)
April 4
October 3
May 2
November 7
June 6
December 5
July 18 (July 4 is a Holiday)

Agenda Report

Item No: 5.
FROM:
SUBJECT:
Receive and Accept Annual Financial Report and a Full Opinion Audit for FY
2014-2015 from McGilloway, Ray, Brown and Kaufman (Kaufman) CPA, Approve
a Modification to the Kaufman Contract to Complete the FY 2015- 2016 and FY
2016-2017 Audits with a Completion Date of March 1, 2018 at an additional fee
not-to-exceed $15,500, and Provide Direction to Staff
RECOMMENDATION:
It is recommended that the MPRWA receive and accept the written audit for Fiscal Year 20142015 as well as a verbal presentation by Kaufman. It is further recommended that the Authority
approve an amendment to the Kaufman contract to include completion of the audit for Fiscal
Years 2015-2016 and 2016-2017, and an extension to March 31, 2018, at a fee not-to-exceed
$15,500, inclusive of the MD&A, and provide staff direction.
DISCUSSION:
Following an informal solicitation for proposals in 2013, the Executive Director selected
Kaufman for the FY 2012-2014 audits. The Water Authority was briefed on the selection at its
meeting of October 10th. The contract was executed on October 31, 2013.
On February 13, 2014, the Water Authority approved a modification and contract extension for
the completion of the FY 2013-2014 audit. On January 10, 2015 the Authority modified and
extended the contract for completion of the FY 2014-2015 audit.
The Authority now needs to select a firm for FY 2015-2016 and FY 2016-2017 audits. However,
in the opinion of staff, Kaufman now has extensive experience with the Authoritys financial
system. Further, it has done an excellent job in conducting the audits and has provided direction
and guidance that has greatly improved the Authority's system of financial accountability.
At the request of the Executive Director, Kaufman had offered to complete audits at a price noto- exceed $7500 and $8000 respectively, inclusive of the Management Discussion and
Analysis (MD&A) which has previously been completed by change orders.
In the opinion of the Executive Director, the proposed fees are fair and reasonable, and a
significantly lower price is unlikely, especially in light of Kaufman's current knowledge of the
Authority's financial system. Accordingly, the Executive Director recommends that an
amendment and extension to Kaufmans contract for the additional work would be in the best
interests of the public.
ATTACHMENTS:
Fiscal Year 2014-2015 Audit Documents
06/12
ATTACHMENT 1
McGILLOWAY, RAY, BROWN & KAUFMAN

Accountants & Consultants
2511 Garden Road, Suite A180
Monterey, CA 93940-5301
831-373-3337
Fax 831-373-3437
379 West Market Street

Salinas, CA 93901
831-424-2737
Fax 831-424-7936
Board of Directors and Management of

Monterey, California
We have audited the financial statements of Monterey Peninsula Regional Water Authority for the
year ended June 30, 2015. Professional standards require that we provide you with information
about our responsibilities under generally accepted auditing standards, as well as certain
information related to the planned scope and timing of our audit. We have communicated such
information in our letter to you dated September 28, 2015. Professional standards also require that
we communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The
significant accounting policies used by Monterey Peninsula Regional Water Authority are
described in Note 1 to the financial statements. No new accounting policies were adopted and the
application of existing policies was not changed during the fiscal year June 30, 2015. We noted no
transactions entered into by Monterey Peninsula Regional Water Authority during the year for
which there is a lack of authoritative guidance or consensus. All significant transactions have been
recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and
are based on managements knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because
of their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected. The most sensitive estimate affecting
the Authoritys financial statements was:
Managements estimate for the allowance of doubtful accounts receivable is $134,719.
This decision is based on managements assumptions and historical experience with
collection of membership fees, and these assumptions appear reasonable.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and
completing our audit.
Daniel M. McGilloway, Jr., CPA, CVA, Gerald C. Ray, CPA, Clyde W. Brown, CPA, Patricia M. Kaufman, CPA,
Larry W. Rollins, CPA
Sarita C. Shannon, CPA, Whitney Ernest, CPA, Devvyn MacBeth, CPA,

Jesus Montemayor, CPA, Smriti Shrestha, CPA, Wei Ding, CPA
ATTACHMENT 1
Corrected and Uncorrected Misstatements

Professional standards require us to accumulate all known and likely misstatements identified
during the audit, other than those that are clearly trivial, and communicate them to the appropriate
level of management. Management has corrected all such misstatements. In addition, none of the
misstatements detected as a result of audit procedures and corrected by management were material,
either individually or in the aggregate, to each opinion units financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting,
or auditing matter, whether or not resolved to our satisfaction, that could be significant to the
financial statements or the auditors report. We are pleased to report that no such disagreements
arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated December 11, 2015.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a second opinion on certain situations. If a consultation
involves application of an accounting principle to Monterey Peninsula Regional Water Authoritys
financial statements or a determination of the type of auditors opinion that may be expressed on
those statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such
consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as Monterey Peninsula Regional
Water Authoritys auditors. However, these discussions occurred in the normal course of our
professional relationship and our responses were not a condition to our retention.
Restriction on Use
This information is intended solely for the use of Board of Directors and Management of Monterey
Peninsula Regional Water Authority and is not intended to be, and should not be, used by anyone
other than these specified parties.
McGilloway, Ray, Brown & Kaufman

Salinas, California
December 11, 2015
ATTACHMENT 1

831-373-3337
Fax 831-373-3437

Salinas, CA 93901
831-424-2737
Fax 831-424-7936
To the Board of Directors and Management

of Monterey Peninsula Regional Water Authority
In planning and performing our audit of the basic financial statements of Monterey Peninsula
Regional Water Authority (the Authority) as of and for the year ended June 30, 2015, in
accordance with auditing standards generally accepted in the United States of America, we
considered Monterey Peninsula Regional Water Authoritys internal control over financial
reporting (internal control) as a basis for designing audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the Monterey Peninsula Regional
Water Authoritys internal control. Accordingly, we do not express an opinion on the effectiveness
of Monterey Peninsula Regional Water Authoritys internal control.
Our consideration of internal control was for the limited purpose described in the preceding
paragraph and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies and, therefore, material weaknesses or significant
deficiencies may exist that were not identified. However, as discussed below, we identified certain
deficiencies in internal control that we consider to be material weaknesses and other deficiencies
that we consider to be significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies in internal control, such that there is a reasonable possibility that a
material misstatement of the entitys financial statements will not be prevented, or detected and
corrected, on a timely basis. We did not identify any deficiencies in internal control to be material
weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that
is less severe than a material weakness, yet important enough to merit attention by those charged
with governance. We consider the following deficiencies in internal control to be significant
deficiencies:
General Journal Entry Process (Repeat finding, June 30, 2014)
Deficiency: We noted that the Authority does not have a formal journal entry procedure. Currently,
the interim financial statements are generated through QuickBooks. While the current financial
statements did not require adjustments, as the Authority grows in complexity, adjustments for
various matters may be necessary.

ATTACHMENT 1
Recommendation: We believe it would be beneficial for the Authority to develop a process for
making adjusting journal entries on an annual basis (at minimum). We recommend this process to
include procedures for both standard and nonstandard journal entries. For nonstandard journal
entries, we recommend the Executive Director review and approve all nonstandard journal entries
and initial the support for the entries to document approval. This process will improve controls
over necessary adjustments made to the general ledger.
Status: Repeat Finding
Best Practices
QuickBooks Password Security
Deficiency: Our audit revealed that the QuickBooks file is now maintained on two computers
Financial Services Managers desktop and a spare computer which a part-time employee uses.
With the expansion of locations, more security is considered ideal.
Recommendation: We recommend the Authority password protect the QuickBooks file.
Locking QuickBooks fiscal year after final close process
Deficiency: During our audit, we noted that the bookkeeper was making changes to transactions
after final close process was completed. This creates discrepancies between the books and
reconciliations documentation.
Recommendation: We recommend the Authority lock each fiscal year after final close process is
complete.
Prior Year Findings
Bank Reconciliation Review
Deficiency: During the audit, we noted no managerial review of bank reconciliation occurs.
Recommendation: We recommend that management review bank reconciliations on a monthly
basis.
Status: Implemented
Billings to QuickBooks Reconciliation
Deficiency: While conducting the audit, we noted the process of billing and accounting are
completed by separate individuals, a process that is recommended for sound internal controls.
However, there is no reconciliation between billings and QuickBooks completed. This allows for
errors within the general ledger to exist for some time, which can lead to irregularities, including
fraud, to continue without notice.
Recommendation: We recommend the Authority develop and implement monthly billings to
QuickBooks reconciliation and, if any reconciling items are noted, they are promptly reviewed and
adjusted with adequate explanations.
Status: Implemented

Salinas, California
December 11, 2015
2
ATTACHMENT 1
MONTEREY PENINSULA REGIONAL

WATER AUTHORITY
BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2015
MCGILLOWAY, RAY, BROWN & KAUFMAN

ACCOUNTANTS & CONSULTANTS
ATTACHMENT 1
TABLE OF CONTENTS
Page
Independent Auditors Report
Managements Discussion and Analysis

(Required Supplementary Information)
Basic Financial statements

Statement of Net Position
Statement of Revenues, Expenses and Changes in Net Position
Statement of Cash Flows
Notes to Financial Statements
7
8
9
10
ATTACHMENT 1

831-373-3337
Fax 831-373-3437

Salinas, CA 93901
831-424-2737
Fax 831-424-7936
INDEPENDENT AUDITOR'S REPORT

The Board of Directors
of Monterey Peninsula Regional Water Authority
Monterey, California
We have audited the accompanying financial statements of the Monterey Peninsula Regional
Water Authority (the Authority), as of and for the year ended June 30, 2015, and the related
notes to the financial statements, which collectively comprise the Authoritys basic financial
statements as listed in the table of contents.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States
of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entitys preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entitys internal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.

ATTACHMENT 1
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the Monterey Peninsula Regional Water Authority as of June 30, 2015
and the changes in its financial position and its cash flows for the year then ended, in accordance
with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
managements discussion and analysis on pages 3 through 6 be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board, who considers it to be an essential
part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with managements
responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.

Salinas, California
December 11, 2015
ATTACHMENT 1
MONTEREY PENINSULA REGIONAL WATER AUTHORITY
MANAGEMENTS DISCUSSION AND ANALYSIS
JUNE 30, 2015
This section of the Authoritys annual financial report presents our discussion and analysis of the
Authoritys financial position and changes in financial position as of and for the fiscal year
ended June 30, 2015. The Managements Discussion and Analysis (MD&A) should be read in
conjunction with the Authoritys basic financial statements and the related notes to the financial
statements, which immediately follow this section.
Financial Highlights
Operating revenues increase by $316,271 to $740,833 or 74.5%, primarily due to receipt

of $200,000 in Cal-Am funds to pay for the Value Engineering (VE) contract and the
receipt of $153,000 from the County of Monterey as its fair-share contribution for FY
2014-2015.
Operating expenses increased by $210,227 to $529,970 or 65.7%, primarily due to
increases in the cost of the VE contract and SPI review of the VEs recommendations.
Current assets increased by $280,784 to $414,549 or 209.9%, primarily due to
overpayment by the Member Agencies to cover Authority operating expenses based on
an assumption that County of Monterey would not contribute its fair-share for FY 20142015 and less of a need for Special Counsel Services than expected due to a slowdown in
the Desal Project CEQA process.
Current liabilities increase by $69,921 to $82,318 or 564.02%, primarily due to a balance
owed to Cal-Am for the over contribution of fund to pay for the VE contract.
The Authoritys net position increased by $210,863 to $332,231 or 173.7%, as a result of
current year operations.
Using This Annual Report

This annual report consists of three sections: Managements Discussion and Analysis; the
Financial Statements; and Notes to the Financial Statements that explain in more detail some of
the information in the Financial Statements.
Required Financial Statements
The Statements of Net Position includes the Authoritys assets plus deferred outflows of
resources and liabilities plus deferred inflows of resources and provides information about the
nature and amounts of investments in resources (assets) and nature and extent of obligations
(liabilities) with the difference between them being reported as net position. It also provides the
basis for computing the rates of return, evaluating the capital structure of the Authority, and
assessing the liquidity and financial flexibility of the Authority.
The Statements of Revenues, Expenses, and Changes in Net Position presents the changes in net
position from one reporting period to another by accounting for revenues and expenses and
measuring the financial results of operations. This statement measures the profitability of the
Authoritys operations over the past year and can be used to determine whether the Authority has
successfully recovered all of its costs through its user fees and other charges.
The Statements of Cash Flows provides information about the Authoritys cash receipts, cash
payments, and net changes in cash and cash equivalents resulting from operating, investing, and
capital and non-capital financing activities. It also provides information regarding sources of
cash, uses of cash, and changes in cash balances during the reporting period.
3
ATTACHMENT 1
JUNE 30, 2015
Notes to the financial statements include information essential to understanding the above
statements, such as the Authoritys significant accounting policies and information about certain
financial statement account.
Authoritys Financial Analysis
Net Position
A summary of the Authoritys Condensed Statement of Net Position is presented in Table 1
below.
Net Position may serve over time as an indicator of an Authoritys financial position. In the case
of this Authority, assets exceeded liabilities by $332,231 as of June 30, 2015.
The Authoritys current financial position is the product of the net result of revenues and
expenses.
Table 1
CONDENSED STATEMENT OF NET POSITION
Year ended June 30,
2015
2014
Change
Amount
Percent
ASSETS
Cash and cash equivalents
Receivables
Total assets
414,549
-
133,765
-
280,784
-
209.9%
0.0%
414,549
133,765
280,784
209.9%
Accounts payable
Unearned revenue
81,197
1,121
11,276
1,121
69,921
-
620.1%
0.0%
Total liabilities
82,318
12,397
69,921
564.02%
332,231
332,231
121,368
121,368
210,863
210,863
173.7%
LIABILITIES
NET POSITION
Unrestricted
Total net position
173.7%
Changes in Net Position

The following table represents a summary of the Statement of Revenues, Expenses and Changes
in Net Position.
Table 2
CONDENSED STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
Operating revenues
Year ended June 30,

2015
2014
$ 740,833
$ 424,562
Operating expenses
Change in net position
529,970
210,863
319,743
104,819
Change
Amount
Percent
$ 316,271
74.5%
$
210,227
106,044
65.7%
101.2%
ATTACHMENT 1
JUNE 30, 2015
Budget
The Authoritys governing body adopted a budget as an operating plan. Budgetary basis financial
statements are not presented because there is no legal requirement to do so.
On April 14, 2014, the Authority adopted a budget of $458,680 for fiscal year 2014-2015 with
fair-share contributions requested from each member city as well as from County of Monterey.
The $35,000 increase from FY 2013-2014 was due primarily to an additional $52,000 budgeted
for Special Counsel Services in expectation of California Public Utilities Commission (CPUC)
proceedings scheduled to follow certification of the Cal-Am Monterey Peninsula Water Supply
Project (MPWSP) EIR, and a decrease of $17,000 for Contract Services.
Factors Bearing on the Authoritys Future
During the fiscal year that ended June 30, 2015, the focus of the Authority was to keep the
Community united in requesting a four-year extension of the State Water Resources Control
Board SWRCB (CDO) 2009-0060 January 1, 2017 deadline related to reduction of water
diversions from the Carmel River, to support Cal-Am applications to the City of Marina and to
the Coastal Commission for permits to build and operate the test slant well, and to respond to the
Cal-Am Desal DEIR prepared by the CPUC by way of local expert commentary as well as by
means of two (2) contracted focused studies. In addition, the Authority remained available to
assist the Water Pollution Control Agency in its Pure Water Monterey/Ground Water
Replenishment (PWM/GWR) project intended to meet one third of the Carmel River diversion
requirement. The Authority continued to provide transparency in its deliberations, insuring
accountable elected officials retain oversight of new water supply projects for the Peninsula,
maximizing public participation, and retaining a policy position that best served the needs of
Peninsula residents.
The Position Statement also defined basic conditions that any project must satisfy to receive
Authority support. Though the Authority remains open to other Desal options such as Deep
Water Desal and Peoples Desal, the Authority continues to support Cal-Ams MPWSP since it
currently appears to be farthest along in the permitting and construction process.
The future of the Water Authority depends upon how successful it can be in keeping the six
Peninsula Cities and Monterey County working together, focused on those components of the
portfolio water solution which comply with the basic conditions of its Position Statement.
To that end, the Authority again approved the following work plan for the upcoming fiscal year:
Completion of post-settlement activities and follow-up with settling parties regarding

Cal-Ams CPUC application for the MPWSP
Work collaboratively with the Monterey Peninsula Water Management District
(MPWMD) and Cal-Am to obtain Water Rate Relief Bonding and other public
funding to minimize costs to the ratepayer
Work collaboratively with MPWMD and the Monterey Regional Water Pollution
Control Agency (MRWPCA) to move the GWR project forward
Work with the MPWMD, Cal Am, and other interested parties to obtain appropriate
modifications to the Cease and Desist Order from the SWRCB
When appropriate, support Cal-Am in its effort to secure permits related to the
proposed source wells, intake water, conveyance facilities, and brine disposal.
Pursue opportunities to increase the use of storm water in future water supply projects
5
ATTACHMENT 1
JUNE 30, 2015
Request for Information
This financial report is designed to provide citizens and taxpayers with a general overview of the
Authoritys finances and to demonstrate the Authoritys accountability for money it receives. If
you have any questions about this report or need any additional information, please contact the
Authoritys Executive Director, James Cullem, via telephone at 831-241-8503, or email at
cullem@monterey.org
ATTACHMENT 1

STATEMENT OF NET POSITION
JUNE 30, 2015
ASSETS
Cash and cash equivalents
Accounts receivable, net of $134,719 allowance
Total assets
414,549
414,549
LIABILITIES
Accounts payable
Unearned revenue
81,197
1,121
Total liabilities
82,318
NET POSITION
Unrestricted
Total net position
The accompanying notes are an integral part of these financial statements.

7
332,231
332,231
ATTACHMENT 1
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR THE YEAR ENDED JUNE 30, 2015
OPERATING REVENUES
Membership fees
Project evaluation reimbursement
Total operating revenue
740,833
OPERATING EXPENSES
Administration and clerical services
Legal services
Contract services
Insurance
Bad debt expense
105,003
150,780
132,794
6,673
134,720
Total operating expenses
529,970
Operating income/change in net position
210,863
Net Position, beginning of the year
130,649
Prior period adjustment (Note 5)
(9,281)
Net Position, beginning of the year, as restated

Total net position, end of year
620,794
120,039
121,368
$

8
332,231
ATTACHMENT 1
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2015
Cash Flows from Operating Activities

Cash received from membership fees
Cash payments to consultants and suppliers of goods and services
Net cash provided by operating activities
740,833
(460,049)
280,784
Net increase in cash and cash equivalents
280,784
Cash and Cash Equivalents, beginning of year
133,765
Cash and Cash Equivalents, end of year

Reconciliation of operating income to net cash provided by operating
activities
Operating income
Adjustments to reconcile operating income to net cash
provided (used) by operating activities
Provision for doubtful accounts
(Increase) decrease in accounts receivables
Increase (decrease) in accounts payable
Net cash provided by operating activities
414,549
210,863
134,719
(134,719)
69,921
$

9
280,784
ATTACHMENT 1
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
1. Organization and Summary of Significant Accounting Polices
Organization
The Monterey Peninsula Regional Water Authority (the Authority) was formed on February
25, 2012, pursuant to the Joint Exercise of Powers Act, set forth in Chapter 5 of Division 7 of
Title 1 of the Government Code, sections 6500, et seq. The Authority operates as a jointly
governed organization. The participants of the Authority are the City of Carmel-by-the-Sea, the
City of Del Rey Oaks, the City of Monterey, the City of Pacific Grove, the City of Sand City,
and the City of Seaside. The Authority operates under a governing body of six directors, one
director from each participant.
The purpose of the Authority is to jointly ensure the timely development, financing, construction,
operation, repair, and maintenance of one or more water projects and ensure that the governance
of such water projects includes representation that is directly accountable to the participants
water uses.
Basis of Accounting, Financial Presentation, and Measurement Focus
The Authoritys basic financial statements have been prepared using the accrual basis of
accounting.
As such, revenue is recognized when earned, and expenses are recognized when they are
incurred.
The Authority reports its activities as a single enterprise fund, which is used to account for
operations that are financed and operated in a manner similar to a private business enterprise.
An enterprise fund distinguishes operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with the proprietarys fund principal ongoing operations. The
principle operating revenue for the Authority is membership fees from the Authoritys six
member agencies. Operating expenses for the Authority include the cost of services, and
administrative expenses. All revenues and expenses not meeting this definition are reported as
non-operating revenues and expenses.
The basic financial statements are prepared using an economic resources measurement focus.
This means all assets and liabilities associated with the Authoritys activities are included on the
Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position
presents increases (revenues) and decreases (expenses) to total net position.
Accounting Changes
The Authority applies all applicable GASB pronouncements for certain accounting and financial
reporting guidance.
Budget
The Authority annually adopts an operating budget for the ensuing fiscal year effective July 1
with a mid-year review as a financial plan for the year. The governing body adopts said budget
as an operating plan. Budgetary basis financial statements are not presented because the
Authority is not legally required to do so.
Cash Equivalents
The Authority presents its cash flow statements using the direct method. For purposes of cash
flow presentation, the Authority considers demand deposits with financial institutions to be cash
equivalents.
10
ATTACHMENT 1
JUNE 30, 2015
Accounts Receivable
The primary source of accounts receivable is from membership fees paid annually by the six
member agencies. No allowance is established for membership fees as management considers
them fully collectible.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section
for deferred outflows of resources. This separate financial statement element, deferred outflows
of resources, represents a consumption of net position that applies to a future period(s) and so
will not be recognized as an outflow of resources (expenses) until then. For this reporting period,
the Authority has no items that qualify for reporting in this category.
In addition to liabilities, the statement of net position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net position that applies to a future period(s) and so will
not be recognized as an inflow of resources (revenue) until that time. For this reporting period,
the Authority has no items that qualify for reporting in this category.
Net Position
The statement of net position reports all financial and capital resources. The difference between
assets and liabilities is net position. The Authoritys net position is classified as follows:
Net investment in Capital Assets This represents the total investment in capital assets, net of
outstanding debt obligations related to those capital assets. Currently, the Authority does not
have any capital assets or outstanding debt.
Restricted This represents amounts that are subject to restrictions that are imposed by external
groups such as creditors, contributors or laws and regulations of other Governments or law
through constitutional provisions or enabling legislation. Currently, the Authority does not have
any restrictions on net position.
Unrestricted Net Position Unrestricted net position includes resources derived from
membership fees.
Revenue Recognition
Revenues are recognized when earned. Revenues for the Authority are recognized when billed to
each of the six member agencies.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements in accordance
with generally accepted accounting principles. Those estimates and assumptions affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Accordingly, actual results may differ from these estimates.
2. Cash Held with Financial Institutions
The Authority maintains cash balances at Wells Fargo Bank, N.A, a commercial bank with
branches in Carmel-by-the-Sea, CA with federal depository insurance coverage of $250,000. In
accordance with the applicable federal law and state statutory requirements, public funds are
collateralized for balances above FDIC coverage. The bank balance at June 30, 2015 was
$447,508; the book balance was $414,549.
11
ATTACHMENT 1
JUNE 30, 2015
3. Related Parties
The Authority currently contracts out for administrative and clerical services and executive
director services. The administrative and clerical services contract, between the Authority and
the City of Seaside, states that the Authority is contractually obligated to pay the City of Seaside
for administrative and clerical services with an annual payment rendered at the beginning of each
fiscal year. For the fiscal year ended June 30, 2015, a fee of $35,000 was paid to the City of
Seaside for administrative and clerical services.
The executive director services contract, between the Authority and the City of Monterey, states
the Authority is liable for all services rendered to the Authority by the Executive Director and
fees are to be paid on a monthly basis. For the fiscal year ended June 30, 2015, $69,678 was paid
to the City of Monterey for executive director services.
These contracts are in place to provide the Authority with all necessary services that would
otherwise be handled by an operational staff. As such, the Authority does not retain a staff to
fulfill these duties and does not have payroll or any other related liabilities.
4. Risk Management
The Authority is exposed to various risks of loss related to torts, theft of, damage to, or
destruction of assets; errors and omissions; injuries to employees; employee health claims;
unemployment compensation claims and environmental damage for which the Authority
purchases commercial insurance. There has been no reduction in insurance coverage from the
prior year. Insurance settlements for claims resulting from the risks covered by commercial
insurance have not exceeded the insurance coverage in the past year. The Authority has obtained
coverage from commercial insurance companies.
5. Prior Period Adjustments
The net position as of the beginning of the 2014-15 year were restated in error. In the current
year, management discovered that the Authority had overstated accounts receivable.
June 30, 2014, Net Position - as Previously Reported
Overstated Accounts Receivable
130,649
(9,281)
June 30, 2014, Net Position - as Restated
121,368
6. Subsequent Events
Management has performed an analysis of the activities and transactions subsequent to June 30,
2015, to determine the need for any adjustments to and/or disclosures within the audited
financial statements for the year ended June 30, 2015. Management has performed their analysis
through December 11, 2015, the date the financial statements were available to be issued. No
subsequent events as defined by the standard were found.
Subsequent events were evaluated through December 11, 2015, which is the date the financial
statements were available to be issued.
12

Agenda Report
FROM:

Item No: 6.
SUBJECT: Receive an Update on the Summary Project Schedule for the Monterey
Peninsula Water Supply Project (MPWSP) and the Status of Test Slant
Well Operations and Results, and Receive a Report on Prices of the
MPWSP Which Cal Am Submitted to the CPUC on December 15, 2015
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 test well operations and
results, and receive a report on the prices of the MPWSP submitted by Cal Am to the
California Public Utilities Commission (CPUC) Administrative Law Judge ( ALJ) on
December 15, 2015.
DISCUSSION:
Cal Am will provide an update on the Summary MPWSP schedule and the status of test
slant well operations and results at the Water Authority meeting. In addition, Cal Am will
provide current information on the capital costs of building the 9.6 gpm and 6.4 gpm
MPWSP project alternatives as submitted to the ALJ on December 15, 2015.
ATTACHMENTS:
None
06/12

Agenda Report
FROM:

Item No: 7.
SUBJECT: Receive Report, Discuss, and Provide Direction on the Pure Water
Monterey (PWM) / Ground Water Replenishment (GWR) Project Draft
Testimony to the California Public Utilities Commission and the Request
from the Monterey Regional Water Pollution Control Agency and the City
of Monterey to Send a Letter to Cal Am in Support of Finalization of the
Water Purchase Agreement
RECOMMENDATION:
It is recommended that the Water Authority receive an update on the draft testimony
expected to be submitted to the California Public Utilities Commission (CPUC) on the
Pure Water Monterey (PWM) / Ground Water Replenishment (GWR) project, consider
letters requesting the Water Authority to contact Cal Am, and provide staff direction.
DISCUSSION:
At its meeting of Dec 10, 2015, the Water Authority received the most recent CPUC
Schedule on the MPWSP. As noted on that schedule, testimony on the GWR Water
Purchase Agreement (WPA) is due to the CPUC Administrative Law Judge (ALJ) by
January 22, 2016.
Although agreement amongst Cal Am, the Monterey Peninsula Water Management
District (MPWMD), and the Monterey Regional Water Pollution Control Agency
(MRWPCA) is close, a few issues remain in executing the WPA for buying GWR water
to meet the needs of the MPWSP. The remaining issues have resulted in letters to the
Water Authority from the MRWPCA (encl A) and from the City of Monterey (encl B)
requesting that the Authority work to resolve them prior to January 22.
Although rebuttal testimony can be submitted to the ALJ by March 22 following two
months of settlement discussions, the Authority President and Special Counsel have
been working to mediate a resolution prior to January 22 as requested. An update on
that effort will be provided at the Water Authority Board meeting.
ATTACHMENTS:
1. Letter from the MPWMD dated December 22, 2015
2. Letter from the City of Monterey dated January 5, 2016
06/12
ATTACHMENT 1
ATTACHMENT 1
ATTACHMENT 2

Agenda Report
FROM:

Item No: 8.
SUBJECT: Receive Report, Discuss, and Provide Direction on a Draft Term Sheet from
the Castroville Community Services District (CCSD) for the Purchase and
Use of Return Water from the Monterey Peninsula Water Supply Project
(MPWSP) Desal Facility
RECOMMENDATION:
It is recommended that the Water Authority receive an update on the testimony
expected to be submitted to the California Public Utilities Commission (CPUC) as a draft
Term Sheet on the Sale of desal facility "return water" to the Castroville Community
Services District (CCSD).
DISCUSSION:
Schedule on the MPWSP. As noted on that scheduled, supplemental testimony on the
issue of "return water" is due to the CPUC Administrative Law Judge (ALJ) by January
22, 2016.
Recent discussions between representatives of Cal Am, the MPWMD, the MPRWA, the
CCSD, and the Salinas River Basin agricultural interests have lead to an acceptable
draft term sheet for the sale of desal water to the CCSD to meet Cal Am's expected
requirements to provide "return water" in compensation for any groundwater
inadvertently drawn into the desal facility source water intakes.
Rebuttal testimony on the return water proposal may be submitted to the ALJ by March
22 following two months of settlement discussions. However, the Authority President
and Special Counsel have been working with other interested parties to develop an
acceptable term sheet prior to January 22 to reduce the likelihood of extensive rebuttal
or litigation over the issue. An update on that effort will be provided at the Water
Authority Board meeting.
ATTACHMENTS:
None - Draft of Return Water Term Sheet will be posted on the web site on January 12
06/12

Agenda Report
FROM:

Item No: 9.
SUBJECT: Receive Report, Discuss, and Provide Direction on a Draft Term Sheet from
the Surfrider Association Concerning MPWSP Desal Facility Brine Disposal
RECOMMENDATION:
It is recommended that the Water Authority receive an update on the testimony
expected to be submitted by the Surfriders Association to the California Public Utilities
Commission (CPUC) as a draft Term Sheet on Brine Disposal
DISCUSSION:
Schedule on the MPWSP. As noted on that scheduled, supplemental testimony on the
issue of "brine disposal" is due to the CPUC Administrative Law Judge (ALJ) by January
22, 2016.
Recent discussions between representatives of Cal Am, the MPWMD, the MPWPCA,
the Surfriders Association, the MPRWA, have been conducted to address the brine
disposal issue. As authorized by the Authority Board on December 10, 2015, the
Authority has had the assistance of Al Preston, Ph.D., P.E., of Geosyntec(SPI subconsultant), an expert on the brine disposal issue.
Rebuttal testimony on the brine disposal proposal may be submitted to the ALJ by
March 22 following two months of settlement discussions. However, the Authority
President, our Special Counsel, and other interested parties have sought to develop an
acceptable Surfrider term sheet prior to January 22 to reduce the likelihood of extensive
rebuttal or litigation over the issue. An update on that effort will be provided at the Water
Authority Board meeting.
ATTACHMENTS:
None
06/12

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Agenda

Monterey Peninsula Regional Water Authority (MPRWA)

Approve Minutes from December 10, 2015 - Swain

Rubio, Edelen, Pendergrass, Kampe, Burnett, Alternate Director Downey

Executive Director, Legal Counsel, Clerk

Thursday, December 10, 2015

Approve Minutes from August 13, 2015 - Milton

Approve Minutes from November 12, 2015

Approve and File Authority Checks Through December 10, 2015

Presentation of Certificate of Appreciation to Lesley Milton

Monterey Peninsula Regional Water Authority

Thursday, December 10, 2015

Monterey Peninsula Regional Water Authority

Thursday, December 10, 2015

President Burnett opened public comments.

Thursday, December 10, 2015

was not set in stone.

Downey, Edelen, Kampe, Pendergrass, Rubio, Burnett

Nova Swain, Clerk of the Authority

Monterey Peninsula Regional Water Authority

Monterey Peninsula Regional Water Authority

Date: January 14, 2015

Authority Clerk Milton

SUBJECT: Approval and File Authority Checks through November 6, 2015

$10,579.08 To Brownstein Hyatt Farber & Schreck for Services Rendered

$440.00 to Access Monterey Peninsula

$440.45 to Jim Cullem expenditures Reimbursement CPUC Trip

Monterey Peninsula Regional Water Authority

Profit & Loss Budget vs. Actual

Jul 1, '15 - Jan 8, 16

47240 Program Service Fees

47250 Reimbursement SPI Contract

47260 Reimburesment VE Contract

47200 Program Income - Other

Total 47200 Program Income

49900 Uncategorized Income

60902 Executive Director

60903 Principal Offc of the Authority

60904 Financial Services

60905 Misc Admin Expenses

60900 Administration and Clerical - Other

Total 60900 Administration and Clerical

62100 Legal Fees

62140 Special Counsel

62100 Legal Fees - Other

62800 Contract Services

62802 Audit Services

62804 Contract Services & Studies

62805 Contract SPI

Total 62800 Contract Services

66000 Payroll Expenses

60801 Public Outreach

62803 Televised Meeting

62800 Contract Services - Other

65100 Travel Expenses

Net Ordinary Income

Net Other Income

Monterey Peninsula Regional Water Authority

Date: January 14, 2016

Executive Director Cullem

Approve Extension of Contract with the City of Seaside for Financial

Monterey Peninsula Regional Water Authority

Date: January 14, 2016

Executive Director Cullem