CITY COUNCIL: Resolution Entering into a Joint Powers Agreement (JPA) for the Purposes of Water Governance

Meeting Date: January 10, 2012
Prepared by: Jason Stilwell

City Council
Agenda Item Summary

Name: Consideration of a Resolution entering into a Joint Powers Agreement (JPA) for the purposes of water governance.

Description: In light of the possibility that California-American Water Company (CalAm), will be required to cease all but a small amount of diversions from the Carmel River Valley by 2016 and the ongoing issues with the Regional Desalination Project ("Regional Project"), the mayors of the Peninsula Cities (Carmel, Monterey, Pacific Grove, Seaside, Sand City, and Del Rey Oaks) have determined that it is in their best interest to form a Joint Powers Authority to provide a diverse array of options to undertake actions with regard to development of the Regional Project or one or more alternative water supply projects to offset the water supply restrictions. The purpose of the Authority is to provide a public
forum for deliberation and participation in the governance of such water supply projects that includes representation directly accountable to the customers served by Cal-Am.

Overall Cost: The Agreement is drafted to provide the revenues necessary for the Authority's operations, but it also includes provisions to appropriately limit the Cities' financial exposure.

Staff Recommendation: Staff recommends approval ofthe Agreement to advance the City's interest in ensuring that a prudent and cost-efficient water supply project is developed in a timely way to avoid the severe water supply restrictions facing the City.

Important Considerations: If the present impediments to the Regional Project are resolved and it remains a viable water supply solution, the Authority will provide an open and deliberate process for the Cities to express their views and concerns as the Regional Project proceeds. If the Regional Project ceases to be viable, the Authority may provide a means for the Peninsula Cities to pursue development of an alternative replacement water supply project.

Decisions by the Authority's Board ofDirectors will be made by one director, one vote, unless a weighted vote is requested by a director. In that case, voting will be weighted in proportion to each city's three-year weighted average receipt of water from Cal-Am.

Decision Record: None

Reviewed by:

Jason Stilwell, City Administrator Date

CITY OF CARMEL-BY-THE-SEA
STAFF REPORT

TO: MAYOR CLOUD AND COUNCIL MEMBERS
FROM: JASON STIWELL, CITY ADMINISTRATOR
DATE:
SUBJECT: RECEIVE REPORT ON THE FORMATION OF THE MONTEREY PENINSULA REGIONAL WATER AUTHORITY AND ADOPT A RESOLUTION TO AUTHORIZE THE MAYOR TO SIGN THE JOINT EXERCISE OF POWERS AGREEMENT TO FORM THE MONTEREY PENINSULA REGIONAL WATER AUTHORITY

RECOMMENDATIONS:
Authorize the Mayor to join with the Peninsula Cities of Monterey, Pacific Grove, Seaside, Sand City, and Del Rey Oaks (collectively the "Peninsula Cities") to sign the joint exercise of powers agreement to form the Monterey Peninsula Regional Water Authority ("Authority").

The Mayor and City Administrator recommend this authorization as an important step in solving the long-standing water supply deficiency on the Monterey Peninsula.

BACKGROUND
The water supply to customers within the City, which is supplied by the California-American Water Company ("Cal-Am"), is subject to a severe and increasing restrictions as a result of both a cease and desist order ("CDO") issued by the California State Water Resources Control Board, limiting withdrawals from the Carmel Valley Groundwater Basin, and a judicial order limiting withdrawals from the Seaside Groundwater Basin. Pursuant to the CDO, Cal-Am will be required to cease all but 3,376 acre feet of diversions from the Carmel River Valley in 2016, which if implemented without a replacement water supply project, will result in catastrophic water shortages for the City.

To obtain replacement water to offset these reductions, Cal-Am applied for and was granted a
certificate of public convenience and necessity from the California Public Utilities
Commission in December 2010 to participate in a private/public water project, commonly
referred to as the Regional Desalination Project ("Regional Project"). Since that approval was
granted, multiple impediments have arisen that have delayed and threatened the viability of
the Regional Project. Concern has been expressed by the community regarding: the merits of
the Regional Project as compared to potential alternatives, governance of the Regional
Project, and the need for representation that is directly accountable to the Cal-Am customers
who would receive water from the Regional Project.
85 Consideration of Regional Water Governance
Page2
MONTEREY PENINSULA REGIONAL WATER AUTHORITY
The vitality of the Monterey Peninsula, the quality of life of its residents, and the economic
future of the community is dependent on a secure water supply. Efforts to date have not
assured that the Peninsula community will have a stable water supply in the future. This issue
is of paramount importance. The six Peninsula Cities speaking in one voice in a leadership
role is required to support the efforts underway, develop additional water supply options,
protect the community, and communicate with the public.
After considerable discussion and deliberation of the Mayors of the Peninsula Cities, the
Mayors determined that it is in the best interest of the Peninsula Cities to form the Authority
pursuant to Government Code, sections 6500, et seq. The Authority would provide a diverse
array of options to accomplish two fundamental purposes:
1. Undertake actions to advance the timely development of the Regional Project or one or
more alternative water supply projects to offset the aforementioned water supply
restrictions; and
2. Provide a public forum for deliberation and participation in the governance of such water
supply projects that includes representation directly accountable to the customers served
by Cal-Am.
The Joint Exercise of Powers Agreement ("Agreement") that would form and govern the
operation of the Authority is· drafted to provide flexibility for the Authority to achieve these
goals. If the present impediments to the Regional Project are resolved such that the Regional
Project remains a viable water supply solution, the Authority will provide an open and
deliberate process for the Cities to express their views and concerns as the Regional Project
proceeds. The Authority could also assume a substantial role in the governance and
management of the Regional Project should the agreements pertaining to the Regional Project
be so amended.
If the Regional Project ceases to be viable, the Authority may provide a means for the
Peninsula Cities to pursue the development of one or more alternative replacement water
supply projects to resolves the pending water supply challenge. An alternative water project
could be undertaken directly by the Authority on its own or in cooperation with other public
agencies and Cal-Am. Further, the Authority could assume a direct role in the design,
financing, and construction of the alternate project, or simply provide a contribution to project
oversight with others undertaking the direct development role. In short, the Authority would
be organized to allow the full range of opportunities for the Peninsula Cities to foster timely
development of a replacement water supply project and direct accountability to the Cal-Am
customers within the Peninsula Cities.
Decisions by the Authority's Board of Directors will be made by one director, one vote,
unless a weighted vote is requested by a director. In that case, voting will be weighted in
proportion to each city's three year weighted average receipt of water from Cal-Am.
86
Consideration of Regional Water Governance
Page3
Any jurisdiction can remove itself from the Agreement at any time if it deems that the
Authority is moving in the wrong direction, requires too much staff time, or too much of other
city resources. Article 15 ofthe Agreement establishes these processes.
FISCAL IMPACT
The Agreement is drafted to provide the revenues necessary for the Authority's operations,
but it also includes provisions to appropriately limit the Cities' financial exposure. The
Authority will require certain minimal operating funds to ensure compliance with the Brown
Act and the Joint Exercise of Powers Act. This level of funding should be sufficient for the
Authority if its undertakings are limited to the Authority's initial role, which will largely be
limited to participation in the oversight/governance of the Regional Project or its alternative.
The Agreement provides that each of the Peninsula Cities will only bear fmancial
responsibility for contributions to the Authority's financial requirements in an amount
proportionate to their respective weighted voting (determined by the three year weighted
average receipt of water from Cal-Am). Staff believes this approach is reasonable and
protects the City from excessive financial exposure.
STAFF REVIEW
The City Administrator has participated with the Mayor in discussions pertaining to potential
strategies concerning how best to advance the Regional Project, or if necessary, alternative
projects, and has also participated in the drafting and refinement of the Agreement. Staff
believes that the formation of the Authority is the best present strategy to advance the City's
interest in ensuring that a prudent and cost-efficient water supply project is developed in a
timely manner to avoid the severe water supply restrictions facing the City.
87
CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
RESOLUTION 2012-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARMEL-BY-THE-SEA ENTERING INTO A JOINT POWERS AGREEMENT
(JPA) FOR THE PURPOSES OF WATER GOVERNANCE
WHEREAS, there exists the possibility that City's water supplier, CaliforniaAmerican
Water Company (Cal-Am), will be required to cease all but a small amount of
diversions from the Carmel River by 2016; and
WHEREAS, there are ongoing issues with the viability of the Regional
Desalination Project ("Regional Project"), and
WHEREAS, the Peninsula Cities have determined it is their best interests to form
a Joint Powers Authority to provide a diverse array of options to undertake actions with
regard to development of the Regional Project or one or more alternative water supply
projects to offset the water supply restrictions; and
WHEREAS, the purpose of the Authority is to provide a public forum for
deliberation and participation in the governance of such water supply projects that
includes representation directly accountable to the customers served by Cal-Am.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF
THE CITY OF CARMEL-BY-THE-SEA DOES:
1. Approve the City's participation in the Authority to help ensure the
development of a prudent, cost-efficient water supply project to avoid the
severe water supply restrictions facing the City.
PASS ED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMELBY-
THE-SEA this 1Oth day of January 2012, by the following roll call vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
SIGNED:
SUE McCLOUD, MAYOR
ATTEST:
Heidi Burch, City Clerk
JOINT EXERCISE OF POWERS AGREEMENT
by and among
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
creating the
MONTEREY PENINSULA REGIONAL WATER AUTHORITY
88
TABLE OF CONTENTS
Page
-i-
ARTICLE 1 DEFINITIONS ................................................................................................. 2
ARTICLE 2 CREATION OF THE AUTHORITY .............................................................. 2
2.1 Creation of Authority ............................................................................................. 2
2.2 Purpose of the Authority ........................................................................................ 3
ARTICLE 3 TERM .............................................................................................................. 3
ARTICLE 4 POWERS ......................................................................................................... 3
ARTICLE 5 MEMBERSHIP................................................................................................ 5
5.1 Members ................................................................................................................ 5
5.2 New Members ........................................................................................................ 5
ARTICLE 6 BOARD OF DIRECTORS AND OFFICERS ................................................. 5
6.1 Formation of the Board of Directors ...................................................................... 5
6.2 Duties of the Board of Directors ............................................................................ 5
6.3 Directors ................................................................................................................. 5
6.4 Requirements ......................................................................................................... 6
6.5 Vacancies ............................................................................................................... 6
6.6 Officers .................................................................................................................. 6
6.7 Appointment of Officers ........................................................................................ 6
6.8 Principal Office ...................................................................................................... 6
ARTICLE 7 DIRECTOR MEETINGS ................................................................................ 6
7.1 Initial Meeting ........................................................................................................ 6
7.2 Time and Place ....................................................................................................... 6
7.3 Special Meetings .................................................................................................... 6
7.4 Conduct .................................................................................................................. 6
7.5 Local Conflict of Interest Code.............................................................................. 7
ARTICLE 8 MEMBER VOTING ........................................................................................ 7
8.1 Quorum .................................................................................................................. 7
8.2 Director Votes ........................................................................................................ 7
8.3 Affirmative Decisions of the Board of Directors ................................................... 7
ARTICLE 9 EXECUTIVE DIRECTOR AND STAFF ....................................................... 7
89
TABLE OF CONTENTS
(continued)
Page
-ii-
9.1 Appointment .......................................................................................................... 7
9.2 Duties ..................................................................................................................... 7
9.3 Staff ........................................................................................................................ 8
9.4 Term and Termination ........................................................................................... 8
ARTICLE 10 BYLAWS ......................................................................................................... 8
ARTICLE 11 ADVISORY COMMITTEES .......................................................................... 8
ARTICLE 12 ACCOUNTING PRACTICES......................................................................... 8
12.1 General ................................................................................................................... 8
12.2 Fiscal Year ............................................................................................................. 8
12.3 Appointment of Treasurer and Auditor; Duties ..................................................... 9
ARTICLE 13 BUDGET AND EXPENSES ........................................................................... 9
13.1 Budget .................................................................................................................... 9
13.2 Authority Funding and Contributions .................................................................... 9
13.3 Return of Contributions ......................................................................................... 9
13.4 Issuance of Indebtedness........................................................................................ 9
ARTICLE 14 LIABILITIES ................................................................................................. 10
14.1 Liability ................................................................................................................ 10
14.2 Indemnity ............................................................................................................. 10
ARTICLE 15 WITHDRAWAL OF MEMBERS ................................................................. 10
15.1 Unilateral Withdrawal .......................................................................................... 10
15.2 Rescission or Termination of Authority .............................................................. 10
15.3 Effect of Withdrawal or Termination .................................................................. 10
15.4 Return of Contribution ......................................................................................... 11
ARTICLE 16 MISCELLANEOUS PROVISIONS .............................................................. 11
16.1 No Predetermination or Irretrievable Commitment of Resources ....................... 11
16.2 Notices ................................................................................................................. 11
16.3 Amendments to Agreement ................................................................................. 11
16.4 Agreement Complete ........................................................................................... 11
16.5 Severability .......................................................................................................... 11
90
TABLE OF CONTENTS
(continued)
Page
-iii-
16.6 Withdrawal by Operation of Law ........................................................................ 11
16.7 Assignment .......................................................................................................... 12
16.8 Binding on Successors ......................................................................................... 12
16.9 Counterparts ......................................................................................................... 12
16.10 Singular Includes Plural ....................................................................................... 12
16.11 Member Authorization ......................................................................................... 12
APPENDIX A DEFINITIONS ............................................................................................... 14
91
1
JOINT EXERCISE OF POWERS AGREEMENT
MONTEREY PENINSULA REGIONAL WATER AUTHORITY
This Joint Exercise of Powers Agreement (“Agreement”) is made and entered into as
of __ of January, 2012, by and among 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,
sometimes referred to herein individually as a “City” or “Member” and collectively as the
“Cities” or “Members.” Except as otherwise specifically defined in this Agreement, capitalized
terms used herein shall have the meanings given to them in Article 1 of this Agreement.
RECITALS
A. Each of the Cities is a public agency located within the Monterey Peninsula in
Monterey County, and is duly organized and existing under and by virtue of the laws of the State
of California.
B. With minor exceptions, the households and businesses within the Cities receive
their water supply from the California American Water Company (“Cal-Am”) and those
customers within the Cities represent the vast majority of Cal-Am’s customers within its
Monterey District.
C. Cal-Am presently obtains the majority of the water that it supplies to the
Monterey District from groundwater produced from water wells located within the Carmel
Valley Groundwater Basin, and to a lesser extent, groundwater produced from the Seaside
Groundwater Basin. In both instances, the amount of water supplies available for distribution
have been reduced and will continue to be reduced by administrative and court orders. (See State
Water Resources Control Board, WR Order 2009-60 [requiring Cal-Am to reduce the amount of
water being diverted from the Carmel Valley Groundwater Basin], and Seaside Basin Decision
(defined below) [limiting Cal-Am’s right to produce groundwater from the Seaside Groundwater
Basin]).
D. The Cities have a common interest in the timely development of one or more
water supply projects to ensure that a safe and reliable supply of water is available to replace
water supplies lost because of the aforementioned mandatory reductions.
E. The Cities also have a common interest in ensuring that the governance of water
supply projects that serve the Cities’ water users includes representation that is directly
accountable to those water users.
F. The City of Seaside also operates a small water system (approximately 800
customer connections) within its jurisdiction that it supplies with groundwater produced from the
Seaside Groundwater Basin. Seaside’s right to produce groundwater from the Seaside
Groundwater Basin has been, and will continue to be, limited by the Seaside Basin Decision.
Seaside therefore has a separate interest in the development of a water supply project to the
extent that the project may provide water to the City to replace this lost groundwater supply.
92
2
G. The timely development of a regional water supply project may best be achieved
through the cooperation of the Cities operating through a joint powers agency.
H. The Act (defined below) authorizes the Cities to create a joint powers agency, and
to jointly exercise any power common to the Cities and to exercise additional powers granted
under the Act.
I. The Act, including the Marks-Roos Local Bond Pooling Act of 1985
(Government Code sections 6584, et seq.), authorizes an entity created pursuant to the Act to
issue bonds, including under certain circumstances, to purchase bonds issued by, or to make
loans to, the Cities for financing public capital improvements, working capital, liability and other
insurance needs or projects whenever there are significant public benefits, as determined by the
Cities. The Act further authorizes and empowers the Authority to sell bonds so issued or
purchased to public or private purchasers at public or negotiated sales.
J. Based on the foregoing legal authority, the Cities desire to create a joint powers
authority for the purpose of taking all actions deemed necessary by the joint powers authority to
ensure the timely development, financing, construction, operation, repair, and maintenance of
one or more water supply projects to replace lost water supplies previously identified; to ensure
that the governance of such projects includes representation that is directly accountable to the
Cities’ residents that are served by such projects; and to undertake any additional related or
ancillary actions.
K. The governing board of each City has determined it to be in the Member’s best
interest and in the public interest that this Agreement be executed and that each City become a
participating Member of this Authority.
TERMS OF AGREEMENT
In consideration of the mutual promises and covenants herein contained, the Cities agree
as follows:
ARTICLE 1
DEFINITIONS
Unless defined elsewhere in this Agreement, all defined terms used herein, shall have the
meaning specified in the definitions set forth in Appendix A to this Agreement, and all such
definitions are incorporated herein by reference.
ARTICLE 2
CREATION OF THE AUTHORITY
2.1 Creation of Authority. There is hereby created pursuant to the Act a joint powers
agency which will be a public entity separate from the parties to this Agreement and shall be
known as the Monterey Peninsula Regional Water Authority. Within 30 days after the effective
date of this Agreement and after any amendment, the Authority shall cause a notice of such
Agreement or amendment to be prepared and filed with the office of the California Secretary of
State containing the information required by Government Code section 6503.5. Within 10 days
after the effective date of this Agreement, the Authority shall cause a statement of the
information concerning the Authority, required by Government Code section 53051, to be filed
93
3
with the office of the California Secretary of State and with the County Clerk for the County of
Monterey, setting forth the facts required to be stated pursuant to Government Code section
53051(a).
2.2 Purpose of the Authority. Each Member has in common the power to study, plan,
develop, finance, acquire, construct, maintain, repair, manage, operate, control, and govern
Water Projects either alone or in cooperation with other public or private non-member entities.
The purpose of this Agreement is to establish a public entity separate from its Members to jointly
exercise some or all of the foregoing common powers, as deemed necessary by the Authority, to:
(1) ensure the timely development, financing, construction, operation, repair, and maintenance of
one or more Water Projects; and (2) ensure that the governance of such Water Projects includes
representation that is directly accountable to the Cities’ water users.
ARTICLE 3
TERM
This Agreement shall become effective upon execution by each of the Cities and shall
remain in effect until terminated pursuant to the provisions of Article 15 (Withdrawal of
Members) of this Agreement.
ARTICLE 4
POWERS
The Authority shall possess the power in its own name to exercise any and all common
powers of its members reasonably related to the purposes of the Authority, including but not
limited to the following powers, together with such other powers as are expressly set forth in the
Act:
4.1. To study, plan, develop, finance, acquire, construct, maintain, repair, manage,
operate, control, or govern Water Projects, or any portion thereof, and related works and
improvements, either by the Authority alone or in cooperation with other public or private nonmember
entities.
4.2. To perform other ancillary tasks relating to Water Projects, including without
limitation environmental review, engineering, and design.
4.3. To obtain rights, permits and other authorizations for, or pertaining to, Water
Projects.
4.4. To purvey water and enter into water supply agreements with its Members or
other public or private non-members, including without limitation water supply agreements with
Cal-Am.
4.5. To exercise the common powers of its Members to develop, collect, provide, and
disseminate information concerning Water Projects to the Members and others, including but not
limited to legislative, administrative, and judicial bodies, as well the public generally.
4.6. To make and enter into contracts necessary for the full exercise of its powers.
94
4
4.7. To employ, or otherwise contract for the services of, agents, officers, employees,
attorneys, engineers, planners, financial consultants, technical specialists, advisors, and
independent contractors.
4.8. To accumulate operating and reserve funds for the purposes herein stated.
4.9. To incur debts, liabilities, or other obligations necessary or proper to carry out the
purposes of this Agreement.
4.10. To issue bonds, notes, and other forms of indebtedness, and to enter into leases,
installment sales, and installment purchase contracts.
4.11. To acquire property and other assets by grant, lease, purchase, bequest, devise, or
eminent domain, and to hold, enjoy, lease or sell, or otherwise dispose of, property, including
real property, water rights, and personal property, necessary for the full exercise of its powers.
4.12. Receive gifts, contributions, and donations or property, funds, services, and other
forms of financial or other assistance from any persons, firms, corporations, or governmental
entities, or any other source.
4.13. To invest money that is not required for the immediate necessities of the
Authority, as the Authority determines is advisable, in the same manner and upon the same
conditions as local Members, pursuant to Government Code section 53601, as it now exists or
may hereafter be amended.
4.14. To apply for, accept, and receive state, federal or local licenses, permits, grants,
loans, or other aid and assistance from the United States, the State, or other public agencies or
private entities necessary for the Authority’s full exercise of its powers.
4.15. To sue and to be sued in its own name.
4.16. To undertake any investigations, studies, and matters of general administration.
4.17. To develop, collect, provide, and disseminate information to the Members and
others that furthers the purposes of the Authority.
4.18. To adopt bylaws and other rules, policies, regulations and procedures governing
the operation of the Authority consistent with this Agreement.
4.19. To perform all other acts necessary or proper to carry out fully the purposes of
this Agreement.
4.20. To organize and/or participate with local agencies to form a water management
group to develop and implement an Integrated Water Management Plan pursuant to Water Code
sections 10530 et seq.
95
5
For purposes of Government Code section 6509, the powers of the Authority shall be
exercised subject to the restrictions upon the manner of exercising such powers as are imposed
on the City of Seaside.
ARTICLE 5
MEMBERSHIP
5.1 Members. The Members of the Authority shall be 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, as long as they have not, pursuant to the provisions hereof, withdrawn
from this Agreement.
5.2 New Members. Any public agency (as defined by the Act) that is not a Member
on the effective date of this Agreement may become a Member upon: (a) the approval of the
Board of Directors by a supermajority of at least seventy (70) percent of the votes held among all
Directors as specified in Article 8 (Member Voting); (b) payment of a pro rata share of all
previously incurred costs that the Board of Directors determines have resulted in benefit to the
public agency, and are appropriate for assessment on the public agency; and (c) execution of a
written agreement subjecting the public agency to the terms and conditions of this Agreement.
ARTICLE 6
BOARD OF DIRECTORS AND OFFICERS
6.1 Formation of the Board of Directors. The Authority shall be governed by a Board
of Directors.
6.2 Duties of the Board of Directors. Subject to the provisions of the Act, the Board
of Directors shall be the policymaking body of the Authority. The business and affairs of the
Authority, and all of the powers of the Authority, including without limitation all powers set
forth in Article 4 (Powers), are reserved to and, shall be exercised by and through the Board of
Directors, except as may be expressly delegated to the Executive Director or others pursuant to
this Agreement, Bylaws, or by specific action of the Board of Directors.
6.3 Directors. Each Member shall appoint one Director and one Alternate Director to
the Board of Directors. Alternate Directors shall have no vote, and shall not participate in any
discussions or deliberations of the Board, if the Director is present. If the Director is not present,
or if the Director has a conflict of interest which precludes participation by the Director in any
decision-making process of the Board, the Alternate Director appointed to act in his/her place
shall assume all rights of the Director, and shall have the authority to act in his/her absence,
including casting votes on matters before the Board. Each Director and Alternate Director shall
be appointed prior to the initial meeting of the Board, as set forth in Section 7.1.
96
6
6.4 Requirements. Each Director and Alternate Director shall be an official elected to
the governing body of the City he or she represents, and shall have been appointed by resolution
of that City’s governing body to serve for a term of two years. A Director may be removed
during his or her term or reappointed for multiple terms at the pleasure of the member that
appointed him or her. No individual Director may be removed in any other manner, including by
the affirmative vote of the other Directors.
6.5 Vacancies. A vacancy shall occur when a Director resigns, or is removed by his
or her appointing Member, or when he or she ceases to hold office on the legislative body of the
Member that appointed him or her. Upon the vacancy of a Director, the Alternate Director shall
serve as Director until a new Director is appointed by the Member. Members shall submit any
changes in Director or Alternate Director positions to the Executive Director in writing and
signed by an authorized representative of the Member.
6.6 Officers. Officers of the Authority shall be a President, Vice President, Secretary,
and Treasurer. The Treasurer shall be appointed consistent with the provisions of Section 12.3.
The Vice President, or in the Vice President’s absence, the Secretary, shall exercise all powers of
the President in the President’s absence or inability to act. The President, the Vice President, and
the Secretary must be Directors.
6.7 Appointment of Officers. Officers shall be elected annually by, and serve at the
pleasure of, the Board of Directors. Officers shall be elected at the first Board meeting, and
thereafter at the first Board meeting following January 1st of each year. An Officer may serve
for multiple consecutive terms. Any Officer may resign at any time upon written notice to the
Board, and may be removed and replaced by an affirmative decision of the Board.
6.8 Principal Office. The principal office of the Authority shall be established by the
Board of Directors, and may thereafter be changed by the affirmative vote of the Board.
ARTICLE 7
DIRECTOR MEETINGS
7.1 Initial Meeting. The initial meeting of the Board of Directors shall be held in the
County of Monterey, California within thirty (30) days of the effective date of this Agreement.
7.2 Time and Place. The Board of Directors shall meet at least quarterly, at a date,
time and place set by the Board within the boundaries of the Members, and at such other times as
may be determined by the Board.
7.3 Special Meetings. Special meetings of the Board of Directors may be called by
the President or by four (4) or more Directors in accordance with the provisions of Government
Code section 54956.
7.4 Conduct. All meetings of the Board of Directors, including special meetings,
shall be noticed, held, and conducted in accordance with the Ralph M. Brown Act (Government
Code sections 54950, et seq.). The Board may use teleconferencing in connection with any
meeting in conformance with and to the extent authorized by applicable law.
97
7
7.5 Local Conflict of Interest Code. The Board of Directors shall adopt a local
conflict of interest code pursuant to the provisions of the Political Reform Act of 1974
(Government Code sections 81000-91014).
ARTICLE 8
MEMBER VOTING
8.1 Quorum. A quorum of any meeting of the Board of Directors shall consist of a
majority of the Directors appointed. In the absence of a quorum, any meeting of the Directors
may be adjourned by a vote of a majority of Directors present, but no other business may be
transacted. For purposes of this Article, a Director shall be deemed present if the Director
appears at the meeting in person or telephonically, provided the telephone appearance is
consistent with the requirements of the Ralph M. Brown Act.
8.2 Director Votes. Voting by the Board of Directors shall be made on the basis of
one vote for each Director, unless one or more Directors requests weighted voting. If weighted
voting is requested, then each Director’s vote shall be weighted proportionally to the amount of
water delivered to Cal-Am customers within each City, as determined on a three year running
average. Accordingly, to determine the weighted vote for each Director, the annual average
amount of metered water delivered by Cal-Am during the proceeding three years to customers
within each City shall be compared to the annual average of the total metered water delivered by
Cal-Am during the proceeding three years to customers within all of the Cities combined, and the
resulting percentages for each City shall represent the weighted vote for each Director
representing each respective City. A Director, or an Alternate Director when acting in the
absence of his or her Director, may vote on all matters of Authority business unless disqualified
because of a conflict of interest pursuant to California law or the local conflict of interest code
adopted by the Board of Directors.
8.3 Affirmative Decisions of the Board of Directors. Except as otherwise specified in
this Agreement, all affirmative decisions of the Board of Directors shall require the affirmative
vote of the majority of all appointed Directors (whether present or not), unless weighted voting is
requested, in which case all affirmative decisions by the Board shall require the affirmative vote
of the majority of the weighted votes held by all Directors (whether present or not), provided that
if a Director is disqualified from voting on a matter before the Board because of a conflict of
interest, that Director shall be excluded from the calculation of the total number of Directors, or
total number of weighted votes, as applicable, that constitute a majority.
ARTICLE 9
EXECUTIVE DIRECTOR AND STAFF
9.1 Appointment. The Board of Directors shall appoint an Executive Director, who
may be, though need not be, an officer, employee, or representative of one of the Members. The
Executive Director’s compensation, if any, shall be determined by the Board of Directors.
98
8
9.2 Duties. The Executive Director shall be the chief administrative officer of the
Authority, shall serve at the pleasure of the Board of Directors, and shall be responsible to the
Board for the proper and efficient administration of the Authority. The Executive Director shall
have the powers designated by the Board, or otherwise as set forth in the Bylaws, if adopted.
9.3 Staff. The Executive Director may employ such additional full-time and/or parttime
employees, assistants and independent contractors who may be necessary from time to time
to accomplish the purposes of the Authority, subject to the approval of the Board of Directors.
Employees of the Authority shall not be deemed employees of any Member. The Authority may
contract with a Member or other public agency or private entity for various services, including
without limitation those related to the Authority’s finance, purchasing, risk management,
information technology and human resources. A written agreement shall be entered between the
Authority and the Member or other public agency or private entity contracting to provide such
service, and that agreement shall specify the terms on which such services shall be provided,
including without limitation the compensation, if any, that shall be made for the provision of
such services.
9.4 Term and Termination. The Executive Director shall serve until he/she resigns or
the Board of Directors terminates his/her appointment.
ARTICLE 10
BYLAWS
If deemed appropriate and necessary, the Board of Directors may cause to be drafted,
approve, and amend Bylaws of the Authority to govern the day-to-day operations of the
Authority.
ARTICLE 11
ADVISORY COMMITTEES
The Board of Directors may from time to time appoint one or more advisory committees
or establish standing or ad hoc committees to assist in carrying out the purposes and objectives of
the Authority. The Board shall determine the purpose and need for such committees and the
necessary qualifications for individuals appointed to them. Each committee shall include a
Director as the chair thereof. Other members of each committee may be constituted by such
individuals approved by the Board of Directors for participation on the committee. However, no
committee or participant on such committee shall have any authority to act on behalf of the
Authority.
ARTICLE 12
ACCOUNTING PRACTICES
12.1 General. The Board of Directors shall establish and maintain such funds and
accounts as may be required by generally accepted public agency accounting practices. The
Authority shall maintain strict accountability of all funds and report of all receipts and
disbursements of the Authority.
99
9
12.2 Fiscal Year. Unless the Board of Directors decides otherwise, the fiscal year for
the Authority shall run concurrent with the calendar year.
12.3 Appointment of Treasurer and Auditor; Duties. The Treasurer and Auditor shall
be appointed in the manner, and shall perform such duties and responsibilities, specified in the
Act..
ARTICLE 13
BUDGET AND EXPENSES
13.1 Budget. Within 90 days after the first meeting of the Board of Directors, and
thereafter prior to the commencement of each fiscal year, the Board shall adopt a budget for the
Authority for the ensuing fiscal year. In the event that a budget is not so approved, the prior
year’s budget shall be deemed approved for the ensuing fiscal year, and any assessment(s) of
contributions of Members approved by the Board during the prior fiscal year shall again be
assessed on the Members in the same amount and terms for the ensuing fiscal year.
13.2 Authority Funding and Contributions. For the purpose of funding the expenses
and ongoing operations of the Authority, the Board of Directors shall maintain a funding account
in connection with the annual budget process. The Board of Directors shall issue assessments for
contributions by the Members to fund said account in the amount and frequency determined
necessary by the Board. Assessments for Member contributions shall be made by each Member
in proportion to the weighted vote of each member as determined pursuant to Section 8.2, and
therefore no Member shall be required to make contributions to the Authority in excess of that
portion of each assessment that is equivalent to the weighted vote possessed by its Director.
Such contributions shall be paid by each Member to the Authority within sixty (60) days of
assessment by the Board.
13.3 Return of Contributions. In accordance with Government Code section 6512.1,
repayment or return to the Members of all or any part of any contributions made by Members
and any revenues by the Authority may be directed by the Board of Directors at such time and
upon such terms as the Board of Directors may decide; provided that (1) any distributions shall
be made in proportion to the contributions paid by each Member to the Authority, and (2) any
capital contribution paid by a Member voluntarily, and without obligation to make such capital
contribution pursuant to Sections 13.2, shall be returned to the contributing Member, together
with accrued interests at the annual rate published as the yield of the Local Agency Investment
Fund administered by the California State Treasurer, before any other return of contributions to
the Members is made. The Authority shall hold title to all funds and property acquired by the
Authority during the term of this Agreement.
13.4 Issuance of Indebtedness. The Authority may issue bonds, notes or other forms of
indebtedness, as permitted under Sections 4.9 and 4.10, provided such issuance be approved at a
meeting of the Board of Directors by unanimous vote of the Directors as specified in Article 8
(Member Voting).
100
10
ARTICLE 14
LIABILITIES
14.1 Liability. In accordance with Government Code section 6507, the debt, liabilities
and obligations of the Authority shall be the debts, liabilities and obligations of the Authority
alone, and not the Members.
14.2 Indemnity. Funds of the Authority may be used to defend, indemnify, and hold
harmless the Authority, each Member, each Director, and any officers, agents and employees of
the Authority for their actions taken within the course and scope of their duties while acting on
behalf of the Authority. Other than for gross negligence or intentional acts, to the fullest extent
permitted by law, the Authority agrees to save, indemnify, defend and hold harmless each
Member from any liability, claims, suits, actions, arbitration proceedings, administrative
proceedings, regulatory proceedings, losses, expenses or costs of any kind, whether actual,
alleged or threatened, including attorney’s fees and costs, court costs, interest, defense costs, and
expert witness fees, where the same arise out of, or are in any way attributable in whole or in
part, to negligent acts or omissions of the Authority or its employees, officers or agents or the
employees, officers or agents of any Member, while acting within the course and scope of a
Member relationship with the Authority.
ARTICLE 15
WITHDRAWAL OF MEMBERS
15.1 Unilateral Withdrawal. A Member may unilaterally withdraw from this
Agreement without causing or requiring termination of this Agreement, effective upon sixty (60)
days' written notice to the Executive Director.
15.2 Rescission or Termination of Authority. This Agreement may be rescinded and
the Authority terminated by unanimous written consent of all Members, except during the
outstanding term of any Authority indebtedness.
15.3 Effect of Withdrawal or Termination. Upon termination of this Agreement or
unilateral withdrawal, a Member shall remain obligated to pay its share of all debts, liabilities
and obligations of the Authority required of the Member pursuant to terms of this Agreement,
and that were incurred or accrued prior to the effective date of such termination or withdrawal,
including without limitation those debts, liabilities and obligations pursuant to Sections 4.9, 4.10
and 13.4. Any Member who withdraws from the Authority shall have no right to participate in
the business and affairs of the Authority or to exercise any rights of a Member under this
Agreement or the Act, but shall continue to share in distributions from the Authority on the same
basis as if such Member had not withdrawn, provided that a Member that has withdrawn from
the Authority shall not receive distributions in excess of the contributions made to the Authority
while a Member. The right to share in distributions granted under this Section 15.3 shall be in
lieu of any right the withdrawn Member may have to receive a distribution or payment of the fair
value of the Member’s interest in the Authority.
101
11
15.4 Return of Contribution. Upon termination of this Agreement, any surplus money
on-hand shall be returned to the Members in proportion to their contributions made. The Board
of Directors shall first offer any property, works, rights and interests of the Authority for sale to
the Members on terms and conditions determined by the Board of Directors. If no such sale to
Members is consummated, the Board of Directors shall offer the property, works, rights, and
interest of the Authority for sale to any non-member for good and adequate consideration. The
net proceeds from any sale shall be distributed among the Members in proportion to their
contributions made.
ARTICLE 16
MISCELLANEOUS PROVISIONS
16.1 No Predetermination or Irretrievable Commitment of Resources. Nothing herein
shall constitute a determination by the Authority or any of its Members that any action, including
without limitation actions relating to Water Projects, shall be undertaken or that any
unconditional or irretrievable commitment of resources shall be made, until such time as the
required compliance with all local, state, or federal laws, including without limitation the
California Environmental Quality Act, National Environmental Policy Act, or permit
requirements, as applicable, has been completed.
16.2 Notices. Notices to a Director or Member hereunder shall be sufficient if
delivered to the City Clerk of the respective Director or Member and addressed to the Director or
Member. Delivery may be accomplished by U.S. Postal Service, private mail service or
electronic mail (provided if by electronic mail, a confirmation of receipt is provided by the
recipient).
16.3 Amendments to Agreement. This Agreement may be amended or modified at any
time only by subsequent written agreement approved and executed by all of the Members.
16.4 Agreement Complete. The foregoing constitutes the full and complete Agreement
of the Members. There are no oral understandings or agreements related to the subject matter of
this Agreement that are not set forth in writing herein.
16.5 Severability. Should any part, term or provision of this Agreement be decided by
a court of competent jurisdiction to be illegal or in conflict with any applicable Federal law or
any law of the State of California, or otherwise be rendered unenforceable or ineffectual, the
validity of the remaining parts, terms, or provisions hereof shall not be affected thereby,
provided however, that if the remaining parts, terms, or provisions do not comply with the Act,
this Agreement shall terminate.
16.6 Withdrawal by Operation of Law. Should the participation of any Member to this
Agreement be decided by the courts to be illegal or in excess of that Member’s authority or in
conflict with any law, the validity of the Agreement as to the remaining Members shall not be
affected thereby.
102
12
16.7 Assignment. Except as otherwise provided in this Agreement, the rights and
duties of the Members may not be assigned or delegated without the written consent of all other
Members. Any attempt to assign or delegate such rights or duties in contravention of this
Agreement shall be null and void.
16.8 Binding on Successors. This Agreement shall inure to the benefit of, and be
binding upon, the successors and assigns of the Members.
16.9 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original.
16.10 Singular Includes Plural. Whenever used in this Agreement, the singular form of
any term includes the plural form and the plural form includes the singular form.
16.11 Member Authorization. The legislative bodies of the Members have each
authorized execution of this Agreement, as evidenced by their respective signatures below.
IN WITNESS WHEREOF, the Members hereto have executed this Agreement by authorized
officials thereof on the dates indicated below, which Agreement may be executed in
counterparts.
CITY OF CARMEL-BY-THE SEA
By: _________________________________
Title:________________________________
DATED:______________________
APPROVED AS TO FORM:
By: _________________________________
Title:________________________________
CITY OF DEL REY OAKS
By: _________________________________
Title:________________________________
DATED:______________________
APPROVED AS TO FORM:
By: _________________________________
Title:________________________________
CITY OF MONTEREY
By: _________________________________
Title:________________________________
DATED:______________________
APPROVED AS TO FORM:
By: _________________________________
Title:________________________________
103
13
CITY OF PACIFIC GROVE
By: _________________________________
Title:________________________________
DATED:______________________
APPROVED AS TO FORM:
By: _________________________________
Title:________________________________
CITY OF SAND CITY
By: _________________________________
Title:________________________________
DATED:______________________
APPROVED AS TO FORM:
By: _________________________________
Title:________________________________
CITY OF SEASIDE
By: _________________________________
Title:________________________________
DATED:______________________
APPROVED AS TO FORM:
By: _________________________________
Title:________________________________
104
14
APPENDIX A
DEFINITIONS
The terms defined in this Appendix A shall for all purposes of this Agreement have the
meanings herein specified.
1.1 “Act” means 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., including all laws
supplemental thereto.
1.2 “Agreement” means this Joint Exercise of Powers Agreement, which creates the
Authority.
1.3 “Auditor” means the auditor of the financial affairs of the Authority appointed by
the Board of Directors pursuant to Section 12.3 of this Agreement.
1.4 “Authority” means the joint powers agency created by this Agreement that will be
known as the Monterey Peninsula Regional Water Authority.
1.5 “Board of Directors” or “Board” means the governing body of the Authority as
established by Article 6 of this Agreement.
1.6 “Bylaws” means the bylaws, if any, adopted by the Board of Directors pursuant to
Article 10 of this Agreement to govern the day-to-day operations of the Authority.
1.7 “Director” and “Alternate Director” mean a director or alternate director
appointed by a Member pursuant to Section 6.3 of this Agreement.
1.8 “Executive Director” means the chief administrative officer of the Authority to be
appointed by the Board of Directors pursuant to Article 9 of this Agreement.
1.9 “Member” means each party to this Agreement that satisfies the requirements of
Article 5 of this Agreement, including any new members as may be authorized by
the Board, pursuant to Section 5.2 of this Agreement.
1.10 “Monterey Peninsula” means the incorporated area of each of the Cities and the
unincorporated area of the County of Monterey, which is within Cal-Am’s
Monterey District as established by its tariff granted by the California Public
Utilities Commission.
1.11 “Officer(s)” means the President, Vice President, Secretary, or Treasurer of the
Authority to be appointed by the Board of Directors pursuant to Section 6.7 of
this Agreement.
1.12 “State” means the State of California.
1.13 “Seaside Basin Decision” means the final judgment entered by the Monterey
Superior Court in the lawsuit entitled California American Water Co. v. City of
105
15
Seaside, Monterey County Superior Court, Case No. M66343, together with any
and all amendments or modifications to that decision ordered by the court.
1.14 “SWRCB Order” means State Water Resources Control Board Order WR Order
2009-60, and any subsequent order concerning Cal-Am’s diversions from the
Carmel River Valley that amends or replaces WR Order 2009-60.
1.15 “Water Project” means any capital project intended, in whole or in part, to
produce water for beneficial use on the Monterey Peninsula, including without
limitation projects to replace lost or reduced water supplies as a result of the
SWRCB Order or the Seaside Basin Decision, or to comply with the directives or
requirements of the SWRCB Order or the Seaside Basin Decision. A Water
Project may include, without limitation, wells, diversion infrastructure, conduits,
pipes, reservoirs, tanks, pumping plants, desalination plants, water reclamation
plants, treatment plants, water conveyance and storage facilities, buildings, and
other structures and infrastructure utilized for the diversion, pumping,
conveyance, desalination, reclamation, treatment, control, storage, groundwater
recharge and delivery of waters for beneficial use within the Monterey Peninsula.
“Water Projects” means each and every Water Project, collectively.