minutes

South Bay Irrigation District

March 17, 2003

The Board of Directors of South Bay Irrigation District held a regular meeting on Monday, March 17, 2003, at the Sweetwater Authority Administrative Office, 505 Garrett Avenue, Chula Vista, California. President Pocklington called the meeting to order at 3:00 p.m.

ROLL CALL

Directors Present: Doud, Pocklington, Wolniewicz and Wright

Directors Absent: Welsh.

Others Present: General Manager Bostad, Operations Manager Mark Rogers, Legal Counsel Peggy Strand, Treasurer Wanda Avery, and Board Secretary Marisa Farpón-Friedman. Sweetwater Authority staff Michael Garrod, Paula Roberts, George Silva and Jim Smyth, Sweetwater Authority Director Beauchamp, and Nina Jazmadarian of McGuire & Associates.

PLEDGE OF ALLEGIANCE TO THE FLAG
Director Wright conducted the pledge of allegiance to the flag.

OPPORTUNITY FOR PUBLIC COMMENT (Government Code Section (54954.3)
There was no comment from the public.

CHAIR’S PRESENTATION

ACTION AGENDA

1. PRESENTATION BY NINA JAZMADARIAN, PRINCIPAL WATER RESOURCES MANAGER, MCGUIRE ENVIRONMENTAL
Sweetwater Authority Water Resources Master Plan

General Manager Bostad gave some background on Sweetwater Authority Water Resources Master Plan and noted that the purpose of the plan is to develop a strategy to move forward in the next 5-10 years regarding local resources development and to use different programs that are available through the state. It also will help to track changes and position ourselves appropriately regarding future desalination opportunities. He introduced Michael Garrod, Sweetwater Authority’s Deputy Chief Engineer and project manager for the Plan.

Mr. Garrod noted the importance of water resources for the last 20-30 years. He pointed out the uniqueness of Sweetwater Authority in San Diego County due to its resources, i.e., reservoirs, groundwater, demineralization, etc., as well as the potential for desalinization and more demineralization. He introduced Nina Jazmadarian, who has been in the water resource arena for the last 12 years. For the last 2 years she has been working with McGuire Environmental in the Los Angeles area, and the previous 10 years she worked at the Metropolitan Water District of Southern California. He said that Nina Jazmadarian and he have been working on this Master Plan for a couple of months.

Ms. Jazmadarian thanked the board. She said her presentation would consist of a review of Sweetwater Authority’s demands, existing supplies, potential new supplies, shortage and wet year supplies, potential partnering options, and conclusions.

She said that for the demand projection, Sweetwater has only grown about 2 percent in 20 years. There are some potential new supply options i.e., National City Wells, expanded demineralization, imported water, ocean desalination, and conservation, with the preliminary low cost options being conservation and National City Wells. She gave a graphic explanation of demands and historic and projected water usage. The demand in 2002 is 25,202 acre-feet and it is projected that in 2020 the demand will be 25,743 acre-feet. The main reason for the low increase overall (550 acre-feet) is the low growth in the Sweetwater service area and the passive conservation. The biggest impact on the water demands would be the Bay Front project. The existing supplies are Sweetwater and Loveland Reservoirs, National City Wells, Demineralization Facility, CWA/MWD Imported Supplies, and Conservation.

As far as historic comparison of local and imported supplies, i.e., imported raw water, imported treated water, Sweetwater Reservoir, National City Wells, and Demineralization Plant, there is a large fluctuation from year to year as a result of hydrology. The National City Wells are the constant supplier.

Sweetwater Authority’s surface water is at 24,214 acre-feet; the Reynolds Demineralization facility is at 900 acre-feet. These together are enough to meet our demands without taking any imported water supplies. During an average year, we need to take imported water supplies but not as much as during a dry year. Most of our demands will be met by local supplies, with about 7,000 acre-feet or a little more to be purchased from the CWA. When one or multiple dry years occur, the demands are heavily dependent on imported supplies, and local surface water drops down. The National City Wells and the Reynolds Demineralization facility stay constant.

Sweetwater Reservoir was constructed in 1888 and has a capacity of 28,079 acre-feet. There is an emergency pool of one-month average demand or 1,700 acre feet. With the reservoir, Sweetwater has been able to participate in the shift season storage program pre-deliveries of MWD water, direct reservoir replenishment, and it will now be able to participate in the new Surface Storage Operating Agreement with MWD.
In talking about the existing supplies, Ms. Jazmadarian mentioned that the risks with the reservoir are spill and water quality. The Perdue Plant can treat water stored from the reservoir as well as imported water. The plant is rated 30 MGD and a 10 MGD clearwell serves as a point of delivery to the distribution system. The capital and operating and maintenance costs are $107 per acre-foot. She also referred to the cost of the Urban Runoff Diversion System that protects the reservoir from poor quality urban runoff, the brush removal program, and the Least Bell’s vireo upper Sweetwater Habitat Management Program.

Ms. Jazmadarian then talked about the National City Wells. The current well production is 1,800 acre-feet, with Well #2 producing 350 gallons per minute and Well #3 700 gallons per minute. The cost is $75 per acre-foot per extraction of the water and the risk is MTBE contamination. The Reynolds Demineralization facility uses reverse osmosis to treat the brackish groundwater from the San Diego Formation and the alluvial basin. This process decreases TDS from an average of 2,200 to 100 mg per liter and is blended with other water to bring it back up to 400-500 mg per liter. Phase I commenced in 2000 and it was designed to produce 4 mgd or 3,600 acre-feet per year. It is now producing about 3,000 acre-feet per year. There are five wells in the San Diego Formation and four alluvial wells. The risks of the demineralization facility are the potential vegetation stress in the Sweetwater River channel possibly caused by pumping in San Diego Formation and lowering water levels in alluvial aquifer river, the unknown yield of the San Diego Formation including National City wells, and high levels of iron/manganese. The costs for the supply are $499 per acre-foot for capital, and $292 per acre-foot for Operation & Maintenance. Sweetwater Authority receives a $250 credit from Metropolitan for each acre-foot produced.

The imported supplies are raw and treated water from CWA through Pipelines 3 and 4 respectively. There may be pipeline capacity restrictions for seasonal water during the peak demand on Pipeline 3. There are also possible future treated water supply constraints during peak days. The raw water costs including the CWA costs are $421 per acre-foot for Tier 1 and $502 per acre-foot for Tier 2. The new Surface Storage Agreement will make this cost about $70 less per acre-foot. MWD would pick up its share of evaporation and MWD water spills first. The risks are the water quality, drought, and emergency. An issue with MWD is that during peak summer days the Skinner Plant would run out of capacity for treated water.

Sweetwater Authority has been a signatory to the Best Management Practices since 1991. The specific objectives for Sweetwater’s conservation policy are elimination of wasteful practices in water use, continued development information on both current and potential water conservation practices, ongoing timely implementation of conservation practices, public information, and education activities to spread knowledge of water use techniques. Ms. Jazmadarian displayed a graphic showing the costs of the current supplies.

As for new supplies, Ms. Jazmadarian said that the key question is whether Sweetwater Authority should invest in new resource options; if the answer is yes, what quantity of new supplies should it seek? What should it do with the excess supplies it develops in wet years?

One of the new supplies would be conservation, which has already had a significant impact on Sweetwater. Without conservation, the projected demands would have been over 30,000 acre-feet, and right now we are only projecting 25,000 acre-feet. There are different types of conservation devices that Sweetwater Authority is utilizing: high-efficiency washing machines can save 5,086 gallons per year per household; low flow showerheads can save about 2,000 gallons per year; faucet aerators can save 548 gallons; leak detection tablets can save about 3,000 gallons per year, and low flush toilets can save about 9,000 gallons per year. The risk with conservation devices is that more conservation means a higher price per acre-foot. Typically, water agencies’ biggest cost is fixed capital and that has to be spread out over less water.

Another new supply would be to expand the National City Wells. Currently Sweetwater Authority is drilling the new well #4, which should be equipped by May of 2003. Sweetwater is expecting it to produce between 700-800 gallons per minute. Well #2 production is to be suspended, which increases the production from Wells #3 and #4 to 1,500 gallons per minute or the historical production of 2,400 acre feet per year. This would be a 600 acre-feet per year increase in production over current production. The cost of the new well is $750,000 and, amortized at 5 percent interest for 30 years, it equals $41an acre- foot. The net cost including the cost of production would be $116 an Acre Foot. There are some issues with expanding the National City Wells, such as the wells and the demineralization facility competing for the same yield. Also, Sweetwater Authority is partnering with the USGS on a study to determine the safe yield of the basin.

There is also the potential that the demineralization facility be expanded from 4 to 8 MGD. The estimated capital costs are about $8.6 million including five new wells.

The CWA/MWD imports are also new supplies. The three key questions are how reliable is MWD in dry years? Will the capacity limitations restrict the use of this supply for the Surface Storage Operating Agreement? Will increasing costs of MWD water make it worthwhile to invest in other sources? MWD is upgrading its Integrated Resources Plan (IRP), which details how MWD is going to get supplies in dry years. The current plan was adopted in 1996 and it provided for 100 percent reliability through 2020. The current IRP extends the forecast through 2025 and adds the possibility of a Planning Buffer for uncertainty in regional forecasts of population growth used in water supply planning and also uncertainties in resource plans.

MWD is projecting that the demands for the year 2025 will be 6.4 million acre feet The plans to meet those demands are 1.25 acre-feet from conservation, 2.46 million acre- feet from local supplies; 650,000 acre-feet from state water projects; 1.25 million acre-feet from the Colorado River; and 900,000 acre-feet from Storage and Transfers. MWD needs to develop 2.1 million acre-feet of new and replacement supplies under the IRP update. This would also include the local resources. There are 520,000 acre feet of implementation risk in these supplies and MWD is contemplating a 10 percent planning buffer, about 500,000 acre-feet, as a way to mitigate this risk.

As far as the imported water supplies, Sweetwater has no capacity rights in pipelines and none of the agencies have it, therefore capacity restrictions will likely occur when agencies try to increase storage in the reservoirs and the CWA treatment plant. If flows are at near capacity in the Department of Water Resources, MWDs or the CWAs systems, wheeling can be suspended.

The MWD/CWA Reservoir Surface Storage Operating Agreement is for a 5-year term. The purpose is to shift deliveries from summer to winter to avoid exceeding the capacity of MWD’s Skinner Filtration Plan. There is a $70 per acre-foot discount given for water delivered and extracted on a set schedule, as well as a $35 additional credit given for water that is delivered when called upon. MWD pays for evaporation and MWD’s water floats on top for spill.

It will be questionable whether MWD be interested in renewing the agreement after 5 years? According to projections, the Skinner Plant will again be at capacity once Module 7 comes on line. Also, in addition to the current program, will MWD include a long-term storage component for droughts and emergencies and will it be willing to accept the costs of evaporation and possible spill? The possibility of a long-term program that includes droughts and emergencies after this program ends is under discussion.

Ms. Jazmadarian displayed a chart of MWD’s rate projections for 2012. The System Access, Water Stewardship charge and System Power rate combined with either Tier 1 or Tier 2 give the untreated volumetric rate. With Tier 1 the rate is currently $326 and is projected to increase with low demand to $407 per acre-foot. The high demand or a low-rate increase projection would be $370 per acre-foot. Tier 2 is projected to be $407; with the high-rate increase it would go up to $481 per acre-foot and with the low-rate increase it would go up to $471 per acre foot. The Treatment Surcharge now is $82 per acre-foot. The high-rate increase is expected to almost double to $160 per acre-foot, and the low rate increase still is almost double at $157 per acre-foot. The Treated Volumetric rate goes up significantly. Tier 1 goes from $408 to $567 with the high-rate increase, and $527 for low-rate increase. With Tier 2 it goes from is $489 per acre-foot to $641 with high-rate increase and $628 with low-rate increase.

The Readiness-to-Serve Charge is based on the 10-year ruling average of demand. Right now, MWD is collecting $80 million from all of its agencies. They are projecting that it will go up to about $100,000 with a high-rate increase and $101,000 with a low-rate increase.

The Capacity Reservation Charge is now at $6,100 per cubic feet per second (cfs) and they are expecting it to go up to $14,300 cfs with either the high-rate increase or the low-rate increase.

The Peaking Surcharge is three times the Capacity Reservation Charge or $18,300. Starting January 1, 2004 there will only be a Capacity Reservation Charge based on historic usage. Right now agencies sign up for the capacity they think they will use. If they exceed that amount, they get a Peaking Surcharge, which is a penalty to keep people from going above the capacity. With the agreement, CWA will pay the full Capacity that they can get from MWD or 1,296 cfs. This has only been in effect for 3 ½ months, and this is the last year for it.

The other option is the DWR Dry Year Supply, which could reduce the economic impacts of water shortages. There are two choices for an agency that is interested in this type of dry year supply. There is an Options Contract where an agency submits a request for possible purchase and deposits a certain fee. Upon the purchase, it pays the remainder of the costs. If it does not purchase the water it loses its deposit. The other option is a Direct Purchase Contract where an agency submits a request for purchasing water and pays a deposit, and the remaining costs are paid when DWR is able to obtain the water. There are many costs associated with these transfers. The cost for the water transfer is $75 per acre-foot. This has been the historic cost but it might start going up. There are State Water Resources Control Board fees, and power fees on the California aqueduct, which can range between $43-$99 per acre-foot. Also, a DWR agreement preparation fee of $2,500, a $5 acre foot DWR Contract administration fee, a $164 MWD wheeling fee, and a member agency wheeling fee. On top of that, there are losses. The water above the Delta will have between 15-30 percent Delta carriage losses and 8 percent California Aqueduct losses. Those fees add up to an estimated total of $357-$485 per acre-foot.

There is also the option of not using DWR and trying to find a seller outside of MWD service area, which would likely be through the California Aqueduct. The costs associated with that would include the administrative cost of procuring the supply; CEQA/NEPA costs between $75 to $150 per acre-foot of water, DWR Agreement Preparation Charge of $2,000, DWR Administrative Charge of $250, State Water Resources Control Board fees, $43-$130 DWR Power fees, $5,000 Metropolitan administrative fee, $164 Metropolitan wheeling fee using fiscal year 2003 rates, Member agency wheeling fees, 15-30 percent Delta carriage losses and 8 percent California Aqueduct losses, totaling an estimated $356-$594 per acre-foot of raw water.

As for Ocean Desalination, there is potential for a plant at the South Bay facilities. The Poseidon concept was for an initial phase of 25 MGD Plant – 5 MGD to Cal Am, 5 MGD to the City of San Diego, and 15 MGD to Otay. Sweetwater would receive 5 MGD of desalinated water in exchange for 5 MGD of Perdue water to Otay. The cost would be a minimum of $794 plus $50-$100 per acre-foot for concentrate disposal and lack of economies of scale and not including the distribution system costs.

The initial phase is to not develop additional supplies for Sweetwater. It would likely improve water quality in Sweetwater’s system through the exchange; however, Sweetwater can explore the possibility of pumping additional groundwater to blend with seawater, thus increasing the yield of basin and developing additional water resource. The economies of scale also would require a plant larger than it needs. There is a possibility of partnering with several entities.

With regards to recycling, Sweetwater would need the City of San Diego to construct a transmission pipe from South Bay Water Recycling Plant through Chula Vista and National City parallel to I-5 to serve the City customers north of National City. The customers would only be the golf courses, Glen Abbey, and the Bayfront or about 1,700 acre feet of total demands per year, assuming 85 percent or 1,450 acre feet per year would be served. Another consideration is that Otay has rights to all the recycling water at the South Bay plant and it has been negotiating with the City of San Diego to acquire the rights to the wastewater that is being recycled at that facility. Sweetwater could purchase water for $350 plus $50 per acre-foot for amortization of pipeline and pump station. Other new capital costs would be water mains at $6.5 million, and retrofits at $600,000 for six sites, which equals $462 per acre-foot amortized. The unit cost would be $400 per acre-foot for the purchase of water, $25 per acre-foot for pumping, and $462 per acre-foot for amortized additional capital, all totaling $887 per acre-foot.

Another option is storage and treatment at Loveland. The reservoir could be operated on a safe-yield basis using a pipeline to deliver water from storage from El Capitan. If the average runoff is 9,000 acre-feet per year, then we could assume the safe yield of 4,000 acre-feet per year. However, this yield cannot be guaranteed. A 4 MGD plant would be needed to treat the 4,000 acre-feet per year. Water would be sold to either Otay or Padre Dam and would result in a reduction in transmission losses from Loveland to Sweetwater reservoir. Sweetwater would then take Otay’s or Padre Dam’s supply from the CWA. The costs are $24 million for a pipeline from El Capitan, $4 million for a treatment plant that processes 4,000 acre-feet per year, plus water costs.

Another supply would be in-MWD area transfers. This would require conjunctive use. The water would be stored in wet and normal years and extracted in dry years. It would then be delivered to Sweetwater by either exchanging Tier 1 or introducing groundwater to MWD’s distribution system. Storage would be done in lieu of deliveries, injection, or direct spreading. There are many costs with this. There are water costs, storage fees, administrative fees and other groundwater basin fees, extraction facilities, and delivery fees at a cost range between $650 and $1,256 per acre-foot, if of 3,000 acre-feet of supplies are developed.

The final new supply would be the Aquifer Storage and Recovery wells in National City. We could assume 1,100 acre-feet per year injection and 3,300 acre-feet of extraction in the fourth year. CWA raw water or local water would be taken, treated at Perdue, and then injected. It is assumed that all the water would be recovered and there would not be any losses. No treatment beyond disinfection would be needed during recovery.

The amortized capital cost at 5 percent interest for 20 years would be about $722,000 per year. Additionally, the cost of water treatment and pumping would raise the total cost to $1,498 per acre-foot. The risks with this operation are Perchlorate, MTBE, and other water quality contaminates.

With regard to costs for all new supplies, Ms. Jazmadarian stated that Conservation is $22 per acre-foot; National City Wells, $116 for the new well #4; expansion of the Demineralization plant is $420; Surface Storage Operating Agreement Raw Water for Tier 1 is $506 and $587 for Tier 2 per acre-foot; imported Raw Water total Tier 1/Tier 2 costs are $528 and $609 per acre-foot respectively; the Imported Treated Water for Tier 1/Tier 2 is $515 and $596 per acre- foot respectively; the DWR Dry Year Supplies range from $464 to $592 per acre-foot; out of the MWD Area Transfers could range from $463 to $701 per acre-foot; the Ocean Desalination is $744 per acre-foot; Recycling is $887 per acre- foot; Storage and Treatment at Loveland is $959 per acre foot; MWD Area Transfers would range between $646 and $1,256 per acre foot; and ASR National City Wells field is $1,498 per acre-foot.

There are also issues with Shortage and Wet Year Supplies. In the past, there has been the Incremental Interruption and Conservation Plan (IIC)) that MWD adopted in the 1991 drought. There has also been the Water Surplus and Drought Management Plan (WSDM) that MWD has adopted. Sweetwater Authority needs to consider what it does with its Wet Year Excess. The Incremental Interruption and Conservation Plan (IICP) was an allocation plan implemented in 1991 and only for shortages. It was based on fiscal year 1989-90 purchases from MWD. Adjustments were made for growth, loss of local supply, conservation in base year, and reclamation. The nonfirm water purchases in the base year were reduced at a greater rate than firm purchases. MWD was in Stage V the majority of the time, which was a 20 percent reduction in firm deliveries and 50 percent reduction
in nonfirm deliveries. The new plan is the Water Surplus and Drought Management (WSDM) Plan, which manages water resources during both wet and dry periods. MWD does not have an Allocation plan adopted yet. The principal was to share the pain and agencies that have supplies share with agencies that do not. Once this concept is in place, we may need to calculate the cost of sharing supplies in a drought when developing new sources.

Based on hydrology, if Sweetwater invests in new resources, what will it do with those supplies in wet years? There is a potential to partner with other entities to sell extra water and invest in resources that can be reduced in capacity in wet years in order to have a cheap enough resource that can be used. The potential partnering options may offer benefits, such as being able to afford investing in a resource that would otherwise be too expensive. Also, possibly improving water quality, although there is the risk that the partners may not be able to pay; there is also a water quality liability depending on the project and, depending on the partner, the litigation may be involved in the International courts in The Hague. Potential partners would include the City of San Diego, Otay, Cal- Am, Padre Dam, CWA, MWD, Bureau of Reclamation and Mexico. The Bureau, if involved, would somehow be able to do something with the Colorado River supply and possibly make a trade, and perhaps get involved with desalination.

Ms. Jazmadarian ended her presentation by noting the strategies for Sweetwater authority, which are to maintain the Perdue Treatment Plant, expand National City well field, stabilize the demineralization plant and expand to 8 MGD, and Ocean Desalination providing a support role to the CWA or developing a partnership with the Port District and the City of Chula Vista.

President Pocklington thanked Ms. Jazmadarian saying that her presentation is certainly a good starting point and it has educated the Board to a much higher degree.

2. ITEMS TO BE ADDED, WITHDRAWN OR REORDERED TO THE AGENDA
(Government Code Section 54956.5)

There were none.

3. APPROVAL OF MINUTES

Director Doud made a motion, seconded by Director Wolniewicz, that the Board approve the minutes of the regular meeting of February 17, 2003. The motion carried.

4. APPROVAL OF DEMANDS AND WARRANTS

Director Doud made a motion, seconded by Director Wright, that warrant numbers 9957 through 9969 be approved. The motion carried.

5. APPROVAL OF DIRECTORS’ ATTENDANCE AT MEETINGS & FUTURE AGENDA ITEMS

A. Director Wolniewicz made a motion, seconded by Director Doud, that the Governing Board approve per diem for Director Wright’s attendance at the WateReuse meeting in Carlsbad on February 19, 2003. The motion carried.

B. Director Doud made a motion, seconded by Director Pocklington, that the Governing Board approve per diem for Director Wolniewicz’s attendance at the Port of San Diego/Chula Vista Bayfront Master Plan on February 25, 2003. The motion carried.

C. Director Wolniewicz made a motion, seconded by Director Doud, that the Governing Board approve per diem for Directors Doud, Pocklington, Wolniewicz and Wright to attend the National City Chamber of Commerce Membership Breakfast with Speaker Mayor Nick Inzunza – March 19, 2003, 7:30 a.m., at the Martin Luther King Jr., Community Building. The motion carried.

6. NEW BUSINESS

A. Upon a motion made by Director Wright, seconded by Director Doud, the following Resolution:
RESOLUTION 550
RESOLUTION OF THE BOARD OF DIRECTORS
OF SOUTH BAY IRRIGATION DISTRICT
ADOPTING AN ANNUAL STATEMENT OF INVESTMENT POLICY
was passed and adopted by the following vote, to wit:

Ayes: Directors Doud, Pocklington, Wolniewicz, and Wright
Noes: None
Absent: Welsh
Abstain: None

B. Upon a motion made by Director Wolniewicz, seconded by Director Wright, the following Resolution:

RESOLUTION 549
RESOLUTION OF THE BOARD OF DIRECTORS
OF SOUTH BAY IRRIGATION DISTRICT
CONFIRMING ROBERT VALDERRAMA TO VOTE IN THE ABSENCE OF THE DISTRICT’S REPRESENTATIVE TO THE SAN DIEGO COUNTY WATER AUTHORITY

was passed and adopted by the following vote, to wit:

Ayes: Directors Doud, Pocklington, Wolniewicz, and Wright
Noes: None
Absent: Welsh
Abstain: None

C. Review of past budgets: President Pocklington reviewed the spreadsheet comparing the revenues and expenses from 1986 until present. He noted that the highest income was $75,000 in 1989 and the lowest was last year at $39,000. The highest excess revenue was in 1998 at $30,000 and last year there was a deficit of $15,000. He noted that the Directors’ fees had increased considerably in spite of the decrease in the revenue income. He is concerned that we are going to cut too much into the principal and he thinks we need to cut costs. He suggested a couple of different ways that would help balance the expenses.

After a discussion by members of the Board, President Pocklington appointed a committee with Director Doud and Director Welsh to review the situation and the different options, and bring their recommendations at the next Board meeting.

7. REPORT OF TREASURER

Treasurer Avery said that the Local Agency Investment Fund interest rate was 2.01 percent and the Treasury Bills for one year was 1.05 percent and 1.40 percent for two years. She noted that we would have to move some money out of LAIF and into Treasury Bills, in order to comply with our revised Investment Policy. President Pocklington agreed.

8. REPORT OF LAFCO SPECIAL DISTRICTS ADVISORY COMMITTEE MEMBER

Director Wolniewicz said that there was no meeting. He noted that there would be a meeting on April 7th at 9:30 a.m., right after the regular LAFCO meeting.

9. REPORT OF LAFCO SPECIAL DISTRICTS REGULAR MEMBER

President Pocklington said that at the last LAFCO Commission meeting, it became very apparent that there is a strong movement for consolidation in the fire districts especially in North County. There is concern regarding the cost of these districts and state budget and they are trying to find ways to reduce the costs and still maintain the reliable fire districts. Also discussed at the meeting was a large project in the Carlsbad area totaling 1,998 single houses and 238 multi-family residences for a total of about 1,900 acres. Leucadia County Water District, the City of Carlsbad, Vallecitos Water District, and Olivenhain Municipal Water District are involved in the project. The agreement was approved to go forth with the 2,000 plus residences. The service area was divided up. They also talked about the budget for next year and trying to hold the line to about the same cost as they had this year.

10. REPORT OF SAN DIEGO COUNTY WATER AUTHORITY REPRESENTATIVE

President Pocklington referred to the pending IID agreement and the meetings that have taken place. He said the bottom line is if we are ever going to do anything for Southern California, the agreement has to be approved. He assumes that CWA will probably have discussions at the next Board meeting, but it will probably be under closed session.

11. DIRECTORS’ COMMENTS

Director Wright said that the Board had the latest information on the Desalination at Tampa. He said that the plant is running and they have some work to do to deliver product water. The problem is debris and surface litter that can foul the membranes. He said, they were working on systems to protect the membranes so they would not be fouled. The second issue he wanted to comment on was the Water Education Conference, which was very informative. Peter McLaughlin’s presentation on the desalination plant at Carlsbad was given some pretty good slaps by an opposing panelist, one of the issues being the cost. During public’s opportunity toask questions he tood the microphone to support and defend desalination. He is expecting some paperwork from the Water Education program’s organizers, which would give the outline of the opposing speakers’ views and major points. He said the final item that is general information was in the morning paper, an article highlighting an article, “Not oil… water around the world is the next big fight on the planet.”

12. CLOSED SESSION

There was no need for a closed session.

13. ADJOURNMENT

With no further business before the Board, President Pocklington adjourned the meeting at 5:17 p.m., to the hour of 3:30 p.m., on April 21, 2003.