MINUTES OF THE FORMAL BOARD OF DIRECTORS' MEETING

March 23, 2006

LEGISLATION, CONSERVATION AND OUTREACH COMMITTEE

CALL TO ORDER/ROLL CALL
Chair Steiner called the Legislation, Conservation and Outreach Committee to order at 29:15 a :35 p.m. Committee members present were Chair Steiner, Vice Chairs Croucher and Irvin, and Directors Bond, Dailey, Ferguson, Lewanski, Lewis, Rhinerson, Thompson, and Williams. Absent were Directors Morrison, Price, and Tu. Also present were Directors Bowersox, Brammell, Dixon, Johnson, Knutson, Lewinger, Linden, Loveland, Martin, Muir, Parker, Pocklington, Rogers, and Watton. At that time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only committee members participated in the vote. Staff present was was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Assistant General Manager Cushman, Director of Public Affairs Jacoby, and Principal Water Resources Specialist Stadler.

ADDITIONS TO THE AGENDA

There were no additions to the agenda.

PUBLIC COMMENT

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

CHAIR’S REPORT

Chair Steiner reported that written reports from Directors who attended the ACWA Washington, D. C., Conference were in the board packet and that Chairman Bond would be reporting on how reports were to be made by Directors who attended functions paid for by the Water Authority.

Directors’ Comments

There were no comments from the Directors.

I. CONSENT CALENDAR

There were no items on the Consent Calendar.

II. ACTION/DISCUSSION

1. Recommendation of Conservation Ad Hoc Committee.

1-A Conservation Ad Hoc Committee recommendations on proposals from Quail Botanical Gardens and Mira Costa College for water conservation projects not-to-exceed $66,250, and the Water Authority’s FY 2006-2007 contribution to the Water Conservation Garden.

1-B Recommendations from the Conservation Ad Hoc Committee regarding funding for water conservation projects and the Cuyamaca Water Conservation Garden.

Conservation Ad Hoc Committee recommendation:

1. Approve the Quail proposal to produce a 30-minute broadcast quality video and authorize the General Manager to enter into an agreement with Quail in an amount not to exceed $35,650.

2. Approve the Mira Costa proposal to provide training to landscapers and gardeners and authorize the General Manager to enter into an agreement with Mira Costa in an amount not to exceed $30,600.

3. Authorize $100,000 in funding for the Garden at Cuyamaca College for Fiscal Year 2006-2007.

Director Irvin moved, Director Bond seconded and the motion carried unanimously, to adopt the Conservation Ad Hoc Committee recommendations to approve the Quail proposal to produce a 30-minute broadcast quality video and authorize the General Manager to enter into an agreement with Quail in an amount not to exceed $35,650; approve the Mira Costa proposal to provide training to landscapers and gardeners and authorize the General Manager to enter into an agreement with Mira Costa in an amount not to exceed $30,600; and authorize $100,000 in funding for the Garden at Cuyamaca College for Fiscal Year 2006-2007.

2. Legislative issues.

2-A Report by Carpi and Clay.

Legislative Advocate Jonathan Clay reported on issues in Sacramento and Legislative Advocate Ben Clay reported on issues in Washington, D.C. Director Rogers inquired about the federal budget and Mr. Ben Clay indicated that Mr. Ken Carpi would provide the information to Director Rogers.

2-B Status report on water and flood control sections of Governor’s proposed infrastructure bond.

Principal Water Resources Specialist Stadler stated there would be no infrastructure bond in the June ballot.

III. INFORMATION

The following items were received and filed:

1. Report on San Diego Region Water/Wastewater Internship Program.
2. Report on conservation efforts.
3. Water Conservation Garden report.
4. Outreach activities for the month of February.

IV. ADJOURNMENT

There being no further business to come before the Legislation, Conservation and Outreach Committee, Chair Steiner adjourned the meeting at 10:08 a.m.

ADMINISTRATIVE AND FINANCE COMMITTEE

CALL TO ORDER / ROLL CALL
Chair Dixon called the Administrative and Finance Committee meeting to order at 10:18 a.m. Committee members present were Chair Dixon, Vice Chair Dailey, and Directors Bowersox, Brammell, Johnson, Knutson, Muir, Parker, Steiner, Watton, and Williams. Committee members absent were Vice Chair Tu, Director Price, and Representative Slater-Price. Also present were Directors Bond, Broomell, Croucher, Ferguson, Haddad, Irvin, Lewanski, Lewinger, Lewis, Linden, Loveland, Martin, Pocklington, Rhinerson, Rogers, and Thompson. At that time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only Committee members participated in the vote. Staff present was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Assistant General Manager Cushman, Director of Finance/Treasurer Brust, Director of Administrative Services Young, Director of Human Resources Glover, Director of Engineering Economides, and Investment Analyst Cirello.

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

There was no Chair’s report.

I. CONSENT CALENDAR

1. Approve Ordinance repealing Section 16.1, Subdivision (a) of the Administrative Code.

Staff recommendation: Adopt Ordinance No. 2006-____, an Ordinance of the Board of Directors of the San Diego County Water Authority, repealing Section 16.1, Subdivision (a) of the Administrative Code.

2. Adopt Resolution approving an amendment to the contract between the California Public Employees’ Retirement System Board of Administration and the San Diego County Water Authority Board of Directors effective July 1, 2006.

Staff recommendation: Adopt Resolution No. 2006-____ to approve an amendment to the contract between the California Public Employees’ Retirement System Board of Administration and the San Diego County Water Authority Board of Directors.

Director Dailey abstained from voting on the Consent Calendar.

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

II. ACTION/DISCUSSION

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

Ms. Brust and Ms. Cirello made a presentation on the Water Authority’s investment portfolio performance with respect to its benchmark. They reviewed the investment strategy starting in 2003, the portfolio and benchmark yields, how the Water Authority had since adapted its investment strategy to the changing yield environments, issues with Freddie Mae and Frannie Mae, and the growing capital needs of the Water Authority.

III. INFORMATION

The following items were received and filed:

1. Status update on the In-Lieu Charge due from the City of San Diego for Fiscal Year 2005-2006.
2. Controller’s report on monthly financial statements.
3. Board Calendar.

IV. ADJOURNMENT

There being no further business to come before the Administrative and Finance Committee, Chair Dixon adjourned the meeting at 10:38 a.m.

WATER PLANNING COMMITTEE MEETING

CALL TO ORDER / ROLL CALL
Chair Haddad called the Water Planning Committee meeting to order at 10:45 a.m. Committee members present were Vice Chair Lewinger and Watton, and Directors Dixon, Irvin, Linden, Loveland, Martin, Pocklington, Rhinerson, Rogers, Saunders, and Sundram. Committee member absent was Director Quist. Also present were Directors Bond, Bowersox, Brammell, Broomell, Croucher, Dailey, Ferguson, Johnson, Knutson, Lewanski, Lewis, Muir, Parker, Price, Thompson, and Williams. At that time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only the committee members participated in the vote. Staff present was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Assistant General Manager Cushman, Director of Water Resources Weinberg, Seawater Desalination Program Manager Yamada, and Principal Water Resources Specialists Driver and 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 stated that two important items on the agenda were included in the Committee’s goals and objectives. The first was the Water Authority’s draft Drought Management Plan (DMP) that was distributed and the objective was to review and approve the Plan. The second item was a report by staff on funding proposals under Proposition 50.

As part of the review of the DMP, Chair Haddad had scheduled two special meetings. The first on April 6 and the second on May 2. Vice Chair Lewinger would chair the April 6 meeting. At those meetings, Committee members would be able to discuss in detail elements of the plan.

A public hearing would be held by the Committee in Carlsbad on Monday evening, April 24, to accept comments from the public on the draft EIR for the Regional Seawater Desalination Facility at Encina. Chair Haddad would appoint directors from the board to serve on the Committee for this public hearing, to ensure a quorum. Directors Ferguson, Martin, Johnson, Daily, Thompson, Price and Linden expressed interest in attending.

Directors’ Comments

Director Lewinger reported on the WateReuse conference in Northern California and stated he would submit a written report next week.

I. CONSENT CALENDAR

There were no items on the Consent Calendar.

Chair Haddad requested items be taken out of order.

III. INFORMATION

Chair Haddad acknowledged the efforts of the member agency Technical Advisory Committee (TAC), in preparing the draft Drought Management Plan. The TAC completed its deliberations and had submitted the draft plan for Committee review and consideration. A draft copy of the plan was included in the pick-up packet and a transmittal letter signed by all TAC members. He stated that the TAC members contribution was recognized by the Committee and the Board and they appreciated the commitment they made in working together on the plan. Chair Haddad asked the Committee to refrain from specific questions on content as the DMP would be discussed in detail at the special meetings scheduled in April and May.

1. Distribution of Water Authority’s draft Drought Management Plan

Mr. Weinberg summarized the draft DMP and introduced Principal Water Resources Specialist Friehauf who gave a synopsis of the contents of the draft DMP that was included in the pick-up packet. Ms. Friehauf reviewed the tentative schedule for review and the adoption of the DMP that would be discussed further at the April 6, Special Board meeting and at the May 2, 2006 special meeting of the Water Planning Committee.

2. Report on submittal of proposals for the Proposition 50, Chapter 6 (a), Desalination Funding Program and Chapter 8 Integrated Regional Water Management Program.

Seawater Desalination Manger Yamada briefed the Committee on the submittal of proposals for Proposition 50, Chapter 6 (a) summarizing the Water Authority proposals and the member agency proposals.

Principal Water Resources Specialist Driver reported on the submittal and the process of the IRWM for Proposition 50, Chapter 8, funding.

Chair Haddad directed Mr. Hentschke to take the Water Planning Committee into Closed Session at 11:30 a.m.

II. ACTION / DISCUSSION

1. Regional Seawater Desalination

1-A Update on Desalination at Encina Power Station.

1-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

The Water Planning Committee reconvened at 12:35 p.m., Mr. Hentschke stated that at that time there was nothing to report.

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 12:35 p.m.

ENGINEERING AND OPERATIONS COMMITTEE

CALL TO ORDER / ROLL CALL
Chair Knutson called the Engineering and Operations Committee to order at 1:15 p.m. Committee members present were Vice Chairs Ferguson and Johnson, and Directors Brammell, Broomell, Lewanski, Lewinger, Loveland, Rogers, and Thompson. Committee members absent were Directors Croucher, Morrison, Sundram and Tu. Also present were Directors Bond, Bowersox, Dailey, Haddad, Irvin, Lewis, Linden, Martin, Muir, Parker, Pocklington, Price, Saunders, Watton, and Williams. At the time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only committee members participated in the vote. Staff present was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, 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

Chair Knutson announced the E&O tour had been scheduled for June 8.

Chair Knutson reported the Construction Costs Ad Hoc Committee had met twice and set goals to produce more competition for construction contracts. He said the committee had considered upcoming bids for the San Vicente Surge Control Facility and San Vicente Pump Station for discussion at its next meeting.

Directors’ Comments

Director Rogers stated that the Coachella Canal tour was informative and well done.

I. CONSENT CALENDAR

1. Grant of easement to SDG&E for relocation of an overhead electric line as part of the San Vicente Pump Station project.

Staff recommendation: Authorize the General Manager to execute a Grant of Easement to SDG&E.

Vice Chair Ferguson moved, Director Brammell seconded and the motion carried unanimously to adopt the Consent Calendar.

II. ACTION/DISCUSSION

1. Construction contract for San Vicente /MLP Interconnect pipeline.

Staff recommendation:

A. Increase the San Vicente/MLP Interconnect pipeline budget by $994,000 for a total budget of $4,996,000.
B. Award a construction contract to CCL Contracting, Inc. for $3,438,000.

Senior Engineer Henry presented information about the bidding process, and explained the necessity for an increase in the project budget.

Vice Chair Johnson moved, Director Lewanski seconded and the motion carried unanimously to adopt the staff recommendation.

III. INFORMATION

1. Presentation on Annual Aqueduct Operating Plan.

In September 2005, the Board directed staff to work with the member agencies to develop an Annual Aqueduct Operating Plan, and to include recommendations for modifications to the Board-adopted interim untreated water distribution priorities. Mr. Eaton and Senior Engineer Galleher presented the newly completed Annual Aqueduct Operating Plan, with no recommended changes to the Board’s 2005 interim untreated water distribution priorities for the next year. Additional information was presented providing details about distribution of treated and untreated water, aqueduct shutdowns, power generation, SSOA, and treatment plant outages through 2007.

IV. ADJOURNMENT

There being no further business to come before the E&O Committee, Chair Knutson adjourned the meeting at 1:40 p.m.

IMPORTED WATER COMMITTEE

CALL TO ORDER / ROLL CALL
Chair Muir called the Imported Water Committee to order at 1:47 p.m. Committee members present were Directors Bond, Bowersox, Broomell, Haddad, Johnson, Lewis, Linden, Martin, Parker, Pocklington, and Saunders. Committee members absent were Director Quist and Representative Slater-Price. Also present were Directors Croucher, Dailey, Ferguson, Irvin, Knutson, Lewanski, Lewinger, Loveland, Morrison, Price, Rhinerson, Rogers, Steiner, Tu, 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 discussed the Board tour of the Coachella Canal on March 9. He stated that the MWD delegates and staff were coordinating the facility inspection trips sponsored by MWD for the next fiscal year.

4-A Director’s comments.

There were no comments from Directors.

I. CONSENT CALENDAR

1. Agreement with the State Lands Commission for the Water Authority to purchase approximately 880 acres of property for the Coachella Canal Lining Project.

Staff recommendation: Authorize staff to conclude negotiations and purchase real property for an amount not-to-exceed $1.4 million substantially per the terms of the purchase agreement.

Director Pocklington moved, Director Johnson seconded, and the motion passed unanimously to approve the staff recommendation.

II. ACTION/DISCUSSION

1. MWD Issues and Activities update.

1-A MWD Delegates report.

The delegates discussed the selection process for MWD’s General Counsel open position; the exclusive negotiation agreement authorized for the Diamond Valley Lake Recreation and Land Development Program; and the board’s authorization of alignment and feasibility studies and right-of-way negotiations for the remaining portions of San Diego Pipeline No. 6. Director Loveland stated that the union negotiations were moving forward.

The Chair requested that the following items be taken out of order.

3. Colorado River

3-A Report by Colorado River Board representative.

Chairman Bond discussed the Colorado River’s total system storage, the River’s salinity levels, retirements on the Colorado River Board, and Indian water rights and the impacts on California and San Diego.

Engineering Manager Steele was asked by Ms. Stapleton to report on the bid openings received on March 22 for a portion of the All-American Canal Lining project. Mr. Steele stated that four bids were received for Reach two and three of the All-American Canal, with the lowest bid at $67.6 million. He said that the four bids were currently under review by IID purchasing. The bids for Reach one would open on April 5. A recommendation to award the contracts would be given to the Board at the April meeting.

The Committee went into closed session at 2:11 p.m.

2. Quantification Settlement Agreement.

2-A CLOSED SESSION:
Conference with Legal Counsel – Potential Litigation
Government Code §54956.9(b) – One case.
The Committee reconvened at 3:02 p.m. General Counsel Hentschke stated that the Committee discussed the closed session item and that there was nothing to report.

III. INFORMATION

The following information item was noted and filed:

1. Imported Water Activities report.

IV. ADJOURNMENT

There being no further business to come before the Imported Water Committee, Chair Muir adjourned the meeting at 3:03 p.m.

FORMAL BOARD OF DIRECTORS’ MEETING OF MARCH 23, 2006

1. CALL TO ORDER. Chairman Bond called the Formal Board of Directors’meeting to order at 3:10 p.m.

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

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

3-A Report on proxies received. Director Lewinger was the proxy for Director Sundram.

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

5. APPROVAL OF MINUTES. Director Tu moved, Director Croucher seconded and the motion carried for a total of 87.99% of the vote, to approve the minutes of the Special Engineering and Operations meeting of February 9, 2006, the SCOOP meeting of February 9, 2006, the Special Board meeting of February 21, 2006 and the Formal Board of Directors’ meeting of February 23, 2006.

6. OPPORTUNITY FOR MEMBERS OF THE PUBLIC WHO WISH TO ADDRESS THE BOARD ON MATTERS WITHIN THE BOARD’S JURISDICTION. There were no public speakers.

7. PRESENTATIONS & PUBLIC HEARINGS

Director Dixon entered the room at 3:15 p.m.

8. REPORTS BY CHAIRS

Chairman’s Report – Chairman Bond.

Chairman Bond reviewed the meetings he had attended during the past few weeks.

Legislation, Conservation and Outreach Committee. Director Steiner stated the committee unanimously approved the recommendations from the Board Conservation Ad Hoc Committee regarding funding the water conservation projects and the Cuyamaca Water Conservation Garden.

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

Water Planning Committee. Director Haddad announced staff reported on the Draft Drought Management Plan. He stated there would be two upcoming meetings on April 6 and May 2, 2006 to refine the draft for final Board consideration at the May 2006 Board meeting. He stated there was no reportable action from the Closed Session.

Engineering and Operations Committee. Director Knutson announced the Engineering and Operations Tour would be held on June 8, 2006. He stated all items were passed in committee.

Imported Water Committee. Director Muir reviewed the Consent Calendar item and there were no reportable actions from the Closed Session.

9. CONSENT CALENDAR

Director Croucher moved, Director Ferguson seconded, and the motion carried at 91.42% of the vote, to approve the Consent Calendar. Abstentions and those voting no were listed under the item.

10. ACTION / DISCUSSION

There were no items.

11. CLOSED SESSIONS:

At 3:20 p.m. Chairman Bond took the Board into Closed Session. Chairman Bond reported there was no need for the closed session for items 11-A and 11-B. There was no report on items 11-C and 11-D.

12. SPECIAL REPORTS

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

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

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

12-D SANDAG REPORT – No report was given.

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 4:00 p.m.

__________________________________
James H. Bond
Chairman

_______________________________
Claude A. Lewis
Secretary

________________________________
Doria F. Lore, Clerk of the Board

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