MINUTES OF THE FORMAL BOARD OF DIRECTORS' MEETING

NOVEMBER 17, 2005

ADMINISTRATIVE AND FINANCE COMMITTEE

CALL TO ORDER / ROLL CALL

Chair Dixon called the Administrative and Finance Committee meeting to order at 9:32 a.m. Committee members present were Chair Dixon, Vice Chairs Dailey and Tu, and Directors Bowersox, Brammell, Johnson, Knutson, Parker, Price, Steiner, and Williams. Committee members absent were Directors Muir, Watton, and Representative Slater-Price. Also present were Directors Bond, Ferguson, Lewanski, Lewinger, Lewis, Linden, Loveland, Martin, Pocklington, Rogers, and Sundram. 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, and Director of Human Resources Glover. Also in attendance was Ken Al-Imam, CPA, Partner of Conrad and Associates; Doug Charchenko, Managing Director of Wedbush Morgan Securities; and Mr. David Brodsly, Vice President of Kelling, Northcross & Nobriga.

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 stated there would be a special Administrative and Finance Committee meeting that was tentatively scheduled for Monday December 12, 2005 at 2:00 p.m., and the full Board would be invited. He mentioned the topic of this meeting would be a continuation of the discussion on AB 1234.

I. CONSENT CALENDAR

1. Treasurer’s report.

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

2. Approval of the updated annual annexation fee of $2,929 per acre to reflect existing Water Authority’s facilities.

Staff recommendation: Adopt Resolution No. 2005-____ establishing the annexation fee at $2,929 per acre.

3. 2006 Board Meeting Dates.

Staff recommendation: Combine the November and December Board Meeting dates to November 30, 2006, and approve the 2006 Board Meeting Dates Calendar.

Director Knutson moved, Director Tu seconded, and the motion carried unanimously to approve the Consent Calendar.

II. ACTION/DISCUSSION

1. Accept Comprehensive Annual Financial Report for Fiscal Year ended June 30, 2005 .

Staff recommendation : Receive and file the Comprehensive Annual Financial Report for Fiscal Year ended June 30, 2005.

Mr. Al-Imam gave a presentation on the Comprehensive Annual Financial Report, reviewed the audit performed, and discussed the recommendations put forth for the Water Authority’s financial and accounting processes. A discussion followed regarding the report and the budget process.

Director Knutson moved, Director Johnson seconded, and the motion carried unanimously to accept the staff recommendation.

2. Approve the Selection of Wedbush Morgan Securities (Wedbush) and Kelling, Northcross & Nobriga (KNN) to provide financial advisory services.

Staff recommendation : Approve the selection of Wedbush and KNN as the Water Authority’s financial advisors and authorize the General Manager to enter into agreements with Wedbush and KNN for base financial advisory services for a five-year period from January 1, 2006 through December 31, 2010, for the not-to-exceed amounts of $635,552 and $280,456, respectively, for a total of $916,008.

Ms. Brust made a brief report on the selection of the team that would provide financial advisory services to the Water Authority. Ms. Brust introduced team members Mr. Charchenko and Mr. Brodsly.

Director Dailey moved, Director Tu seconded, and the motion carried unanimously to accept the staff recommendation.

3. Ordinance making technical amendments to Chapters 2.04, 2.08, and 2.16 to implement prior board actions .

Staff recommendation : Adopt Ordinance No. 2005-____, an Ordinance of the Board of Directors of the San Diego County Water Authority amending Article 2, Chapters 2.04, 2.08, and 2.16 of the Administrative Code by the Amendment of Sections 2.04.040, 2.08.040, 2.16.020, and 2.16.070 to make technical changes consistent with prior board actions.

Mr. Hentschke gave a brief overview of the technical amendments.

Director Knutson moved, and Director Dailey seconded to accept the staff recommendation and the motion carried unanimously.

III. INFORMATION

The following items were received and filed:

1. Board Calendar of events.

Chair Dixon requested that all Directors complete the survey on PowerPoint presentations included in the pickup packets, and return them to Clerk of the Board Lore on November 17, 2005.

IV. ADJOURNMENT

There being no further business to come before the Administrative and Finance Committee, Chair Dixon adjourned the meeting at 10:05 a.m.

ENGINEERING AND OPERATIONS COMMITTEE

CALL TO ORDER / ROLL CALL

Chairman Knutson called the Engineering and Operations Committee to order at 10:20 a.m. Committee members present were Vice Chairs Ferguson and Johnson, and Directors Brammell, Broomell, Lewanski, Lewinger, Loveland, Rogers, Sundram, and Tu. Committee members absent were Directors Croucher, Inzunza, and Thompson. Also present were Directors Bond, Bowersox, Dailey, Dixon, Haddad, Lewis, Linden, Martin, Parker, Pocklington 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, Assistant General Manager Cushman, 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

Chairman Knutson announced that the E&O Committee would meet on December 6, 2005, 11:30 a.m., at the Escondido office.

I. CONSENT CALENDAR

1. Aqueduct Protection Program Professional Services Contract for Acoustic Monitoring Services, Remote Field Eddy Current Inspection Services, and As-Needed Corrosion Engineering services.

(a) Professional Services Contract for Acoustic Monitoring Services for the Aqueduct Protection Program.

Staff recommendation: Award a professional services contract to PURE Technologies US, Inc., in the amount of $330,000 for acoustic monitoring services for the Aqueduct Protection Program.

(b) Professional Services Contract for Remote Field Eddy Current Inspection Services for the Aqueduct Protection Program.

Staff recommendation: Award a professional services contract to the Pressure Pipe Inspection Company in the amount of $259,561 for Remote Field Eddy Current inspection services for the Aqueduct Protection Program’s Fiscal Year 2006 and Fiscal Year 2007 pipeline shutdowns.

(c) Professional Services Contract for As-Needed Corrosion Engineering Services for the Aqueduct Protection Program.

Staff recommendation: Award a professional services contract to Schiff Associates in the amount of $100,000 for as-needed corrosion engineering services for the Aqueduct Protection Program during Fiscal Year 2006 and Fiscal Year 2007.

2. Amend the three-year, as-needed Professional Services Contract providing inspection and monitoring of construction projects within the rights of way with Testing Services and Inspection, Inc, to increase the amount by $225,000 to an amount not-to-exceed $2,525,000.

Staff recommendation: Authorize the General Manager to execute the first amendment to the three-year, as needed professional services contract with Testing Services and Inspection, Inc., to increase the contract by $225,000, to a not-to-exceed amount of $2,525,000 for inspection and monitoring of construction within the Water Authority’s rights of way.

3. Approve amendment to contract with Donald W. Detisch for legal services for Lake Hodges Pipeline Project land acquisition.

Staff recommendation: Approve an amendment to the contract with Donald W. Detisch to increase the contract limit by $100,000 from $49,000 to $149,000.

Vice Chair Ferguson moved, Vice Chair Johnson seconded and the motion carried unanimously to adopt all Consent Calendar staff recommendations.

II. ACTION/DISCUSSION

1. Approve amendment to contract with Hawkins Delafield and Wood, LLP for legal services for the Lake Hodges to Olivenhain Pipeline design-build project and the design-build-operate Twin Oaks Valley Water Treatment Plant project.

Staff recommendation: Approve an amendment to the contract with Hawkins Delafield and Wood, LLP to increase the contract limit by $100,000 from $775,000 to $875,000.

Director Lewinger moved, Vice Chair Johnson seconded and the motion carried

unanimously to adopt the staff recommendation.

Committee member Thompson entered the meeting.

The Committee went into closed session at 10:30 a.m.

2. CLOSED SESSION:

Conference with Real Property Negotiator

Government Code §54956.8

Property: Acquisition of property APN 377-080-15 & 16 for the La Mesa Sweetwater Extension Pipeline

Agency Negotiators: Daniel S. Hentschke, William J. Rose, William Busch, Tad Brierton

Negotiating Parties: Ramon & Rosario Minez, Husband and Wife

Under Negotiation: Price and terms of acquisition

The Committee reconvened at 11:20 a.m. Mr. Hentschke stated at that time there was no reportable action.

III. INFORMATION

There were no Information Items.

IV. ADJOURNMENT

There being no further business to come before the Engineering and Operations Committee, Chairman Knutson adjourned the meeting at 11:25 a.m.

WATER PLANNING COMMITTEE MEETING

CALL TO ORDER/ROLL CALL

Chair Haddad called the Water Planning Committee meeting to order at 11:30 a.m. Committee members present were Vice Chairs Lewinger and Watton, Directors, Linden, Loveland, Martin, Pocklington, Quist, Rogers, and Sundram. Committee members absent were Directors Dixon, Irvin, Saunders, and Rhinerson. Also present were Directors Bond, Bowersox, Brammell, Broomell, Dailey, Ferguson, Johnson, Knutson, Lewanski, Lewis, Parker, Thompson, Tu, 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 the committee members participated in the vote. Staff present was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Assistant General Manager Cushman, Seawater Desalination Program Manager Yamada, Water Resources Manager Pyle, and Principal Water Resources Specialist Friehauf.

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 congratulated Mayor Lewis on the dedication of City of Carlsbad’s new 4 million gallon per day reclamation plant. The plant was located next to the Encina Wastewater Plant. In December, the committee would continue to discuss annexation policies and report on the development of the Water Authority annexation policies. The committee should plan for another workshop on annexation policies in January or February 2006.

Chair Haddad stated that the adoption of the Urban Water Management Plan on the agenda was one of the key committee goals to be accomplished and would be presented to the Board for adoption.

Director’s Comments

There was no report from the directors.

I. CONSENT CALENDAR

There were no items on the Consent Calendar.

II. ACTION / DISCUSSION

1. Adoption of Water Authority’s 2005 Urban Water Management Plan.

Staff recommendation: Adopt the Water Authority’s 2005 Plan.

Alternative: Direct staff to incorporate additional Board comments and seek Board adoption at December 8, 2005, meeting.

Ms. Friehauf made a presentation on this item.

Director Pocklington moved, Director Lewinger seconded and the motion carried unanimously.

2. Regional Seawater Desalination.

2-A Update on Desalination at Encina Power Station

Seawater Desalination Program Manager Yamada briefed the Board on the Encina Desalination project regarding field activities related to the preparation of the EIR that had been completed on the site with the exception of some water sampling and water quality activities that would continue over the next few months. He then thanked Cabrillo Power and its personnel for their cooperation in helping obtain the data needed for the EIR. Mr. Yamada stated the draft EIR would be released for the Water Authority’s Regional Seawater Desalination Project at Encina in late January 2006 for public review.

Mr. Yamada presented a radio spot by the late President John F. Kennedy from 1961 on seawater desalination. The U.S. Desal Coalition would arrange with Washington radio stations to play this radio spot during a full house vote in regard to pending legislation before Congress on HR1071.

Chair Haddad stated that there would be no Closed Session.

3-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

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 at noon.

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

Chair Steiner called the Legislation, Conservation and Outreach Committee to order at 21:00 p :35 p.m. Committee members present were Chair Steiner, Vice Chair Irvin, Directors Bond, Dailey, Ferguson, Lewanski, Lewis, Price, Thompson, Tu, and Williams. Committee members absent were Directors Croucher, Inzunza, and Rhinerson. Also present were Directors Bowersox, Brammell, Broomell, Haddad, Johnson, Knutson, Lewinger, Linden, Loveland, Martin, Muir, Parker, Pocklington, Quist, Saunders, Sundram, and Watton. 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 was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Assistant General Manager Cushman, and Director of Public Affairs Jacoby.

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 reiterated the message was to conserve and suggested planting water saving plants at this time.

DIRECTOR’S COMMENTS

Director Tu requested that discussion of membership on the SCOOP Committee be added the committee’s agenda for next month .

I. CONSENT CALENDAR

There were no items on the Consent Calendar.

II. ACTION/DISCUSSION

1. Legislative issues.

1-A Report by Carpi and Clay.

Legislative Advocate B. Clay reported on issues in Washington, D.C., and Legislative Advocate Clay reported on issues in Sacramento.

III. INFORMATION

1. Water Authority outreach video.

The new Water Authority outreach video was shown.

The following items were received and filed:

2. Report on conservation efforts.

3. Update on community relations program.

4. Water Conservation Garden report.

Director Lewinger presented slides from the recently dedicated William Buckner Succulent and Cactus Garden at the Water Conservation Garden.

5. SCOOP quarterly report.

6. Outreach activities for the month of September 2005.

IV. ADJOURNMENT

There being no further business to come before the Legislation, Conservation and Outreach Committee, Chair Steiner adjourned the meeting at 1:29 p.m.

IMPORTED WATER COMMITTEE

CALL TO ORDER / ROLL CALL

Chairman Muir called the Imported Water Committee to order at 1:37 p.m. Committee members present were Directors Bond, Bowersox, Broomell, Johnson, Lewis, Linden, Martin, Parker, Pocklington, Saunders, and Quist. Committee members absent were Directors Haddad and Representative Slater-Price. Also present were Directors Brammell, Croucher, Dailey, Ferguson, Irvin, Knutson, Lewanski, Lewinger, Loveland, Price, Rogers, Sundram, Thompson, Watton, and Williams. At that time, there was a quorum of the 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, 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 stated that Director Loveland had been sworn-in as the Water Authority’s alternate representative to the Colorado River Board. He said that the QSA Ad-Hoc Committee would invite the Board to tour the Coachella Canal Lining Project, tentatively scheduled for March 9, 2006.

4-A Directors’ Comments

There were no comments from Directors.

CONSENT CALENDAR

There were no items on the Consent Calendar.

ACTION/DISCUSSION

1. MWD issues and activities update.

1-A MWD Delegates Report.

The delegates discussed the Diamond Valley Lake Recreation plan and the Center for Education; MWD’s System Overview Study; a possible surplus from water sales; and the status of labor and union negotiations. Director Parker stated that the process for obtaining a new general manager would begin in January. Assistant General Manager Cushman gave an update on the MWD member agency general managers meetings on rate issues.

1-B MWD System Overview Study Update.

Inter-Agency Program Manager Chen gave a presentation on MWD’s System Overview Study update and MWD’s latest effort to expand the study to better incorporate member agencies’ plans in the evaluation. Chairman Bond commented that the Water Authority’s CIP budget should be included in discussions with MWD considering that the Water Authority was paying for its CIP program along with its share of the cost of MWD’s programs.

2. Colorado River.

2-A Report by Colorado River Board representative.

Chairman Bond said that in 2004 the Colorado River’s total system storage was at its lowest point in over 30 years, but that levels had increased since then. He discussed the issues that the Seven Basin States were working on, and proposals from Nevada and Arizona on supplementing their Colorado River supplies. Chairman Bond stated that Mexico had been receiving over its 1.5 maf allotment due to the United States Bureau of Reclamation limitations on controlling excess flows from the River. Director Pocklington discussed the River’s salt content and the federal government’s plans to improve the water quality.

3. Quantification Settlement Agreement

3-A QSA Ad Hoc Committee report .

Director Watton stated his comments would be discussed in the Closed Session.

The Committee went into Closed Session at 2:23 p.m.

3-B CLOSED SESSIO:

Conference with Real Property Negotiator

Government Code §54956.8

Property: Water conserved from All American Canal Lining Project

Agency Negotiators: Maureen A. Stapleton,

James J. Taylor, Gordon Hess, Ken Steele

Negotiating Parties: U.S./Bureau of Reclamation, IID, SDCWA

3-C CLOSED SESSION:

Conference with Legal Counsel – Anticipated Litigation

Government Code §54956.9(b)

The Imported Water Committee reconvened at 3:32 p.m. General Counsel Hentschke stated that the Committee took action directing the Chairman of the Board to appoint two representatives to the dispute panel and directed the General Manager and General Counsel to participate in the administrative committee and dispute resolution process as suggested by IID and consistent with Article 17 of Water Transfer Agreement.

INFORMATION

1. CALFED and statewide funding efforts.

Government Relations Manager Volberg reported on CALFED and its statewide funding efforts. Director Loveland asked what input the state’s funding plan might have on the San Diego region. Staff responded they would evaluate and bring this information back to the committee.

The following information item was noted and filed:

2. Imported Water Activities report.

ADJOURNMENT

There being no further business to come before the Imported Water Committee, Chairman Muir adjourned the meeting at 3:34 p.m.

FORMAL BOARD OF DIRECTORS’ MEETING OF NOVEMBER 17, 2005

1. CALL TO ORDER. Chairman Bond called the Formal Board of Directors’

meeting to order at 3:40 p.m.

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

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

3-A Report on proxies received. Director Watton was the proxy for Director Croucher.

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

5. APPROVAL OF MINUTES. Director Johnson moved, Director Muir seconded and the motion carried for a total of 95.60% of the vote, to approve the Minutes of the Formal Board of Directors’ meeting of October 27, 2005. The Board received and filed the minutes of the Administrative and Finance Committee meeting of October 12, 2005, the Imported Water Committee meeting of October 18, 2005 and the Water Planning Committee meeting of October 19, 2005.

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 Reappointment of Howard Williams, representing Vista Irrigation District.

Term expires November 23, 2011.

7-B Recognition Employee of the First Quarter.

Supervising Administrative Assistant Barrientos was honored as Employee of the First Quarter.

8. REPORTS BY CHAIRS

Chairman’s Report – Chairman Bond announced the invitations for the Board Holiday Reception had been distributed and he encouraged the Board members to attend. He provided a summary of the events he had attended since the last meeting.

Administrative and Finance Committee . Director Dailey reported items 9-1 through 9-6 were all approved.

Engineering and Operations Committee. Director Knutson announced the invitations for the Twin Oaks Valley Treatment Plant dedication on December 6, 2005, were distributed. He stated immediately following the dedication a special meeting of the Engineering and Operations Committee in Escondido would be held. He reported items 9-7 through 9-12 were passed unanimously.

Water Planning Committee. Director Lewinger announced the Urban Water Management Plan had been adopted.

Legislation, Conservation and Outreach Committee. Director Steiner reviewed the committee meeting. There were no action items.

Imported Water Committee. Director Muir announced the results of the Closed Session had been added to the Consent Calendar.

9. CONSENT CALENDAR

Director Pocklington moved, Director Dailey seconded, and the motion carried at 95.60 % of the vote, to approve the amended Consent Calendar. Abstentions and those voting no are listed under the item.

10. ACTION / DISCUSSION

There were no items.

11. CLOSED SESSION:

11-A CLOSED SESSION:

Conference with Real Property Negotiator

Government Code §54956.8

Property: Acquisition of property APN 377-080-15 & 16 for

the La Mesa Sweetwater Extension Pipeline

Agency Negotiators: Daniel S. Hentschke, William J. Rose,

William Busch, Tad Brierton

Negotiating Parties: Ramon & Rosario Minez, Husband and Wife

Under Negotiation: Price and terms of acquisition

11-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

11-C CLOSED SESSION:

Conference with Real Property Negotiator

Government Code §54956.8

Property: Water conserved from All American Canal Lining Project

Agency Negotiators: Maureen A. Stapleton, James J. Taylor,

Gordon Hess, Ken Steele

Negotiating Parties: U.S./Bureau of Reclamation, IID, SDCWA

11-D CLOSED SESSION:

Conference with Legal Counsel – Anticipated Litigation

Government Code §54956.9(b)

General Counsel announced there was no need for the Closed Sessions.

12. SPECIAL REPORTS

12-A GENERAL MANAGER’S REPORT – Ms. Stapleton

No report was given.

12-B GENERAL COUNSEL’S REPORT – Mr. Hentschke

No report was given.

12-C ACWA-JPIA REPORT – Director Knutson

Director Knutson announced the JPIA risk assessment provided a very favorable report about the programs at the Water Authority.

12-D SANDAG REPORT – Director Dailey reported the Nominating Committee would announce the slate of Officers.

SANDAG Subcommittee: Borders/Regional Planning Committee

No report was given.

13. OTHER COMMUNICATIONS

14. ADJOURNMENT

There being no further business to come before the Board, Chairman Bond

adjourned the meeting at 4:15 p.m.

__________________________________
James H. Bond
Chairman

_______________________________
Claude A. Lewis
Secretary

________________________________
Doria F. Lore, Clerk of the Board

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