Carmel Area Wastewater District/Pebble Beach Community Services District

Pebble Beach Company

 

WASTEWATER RECLAMATION PROJECT

MANAGEMENT COMMITTEE

 

MINUTES

 

Meeting of March 18, 2005

Pebble Beach Community Services District Boardroom

3101 Forest Lake Road, Pebble Beach, CA

 

1.  Call to Order

Richard Andrews, PBCSD General Manager, serving as facilitator, called the meeting to order at 9:40 a.m.  All members or alternates were present, including: Joyce S. Stevens and Charlotte F. Townsend, Carmel Area Wastewater District Board of Directors (CAWD); Gary D. Hornbuckle and Richard D. Verbanec, Pebble Beach Community Services District Board of Directors (PBCSD); and Mark Stilwell, Executive Vice President, Pebble Beach Company (PBCo).

 

            Others in attendance:

            David Berger, General Manager, Monterey Peninsula Water Management District (“MPWMD”)

            George Thacher, Associate Legal Counsel, CAWD/PBCSD

            Ray von Dohren, P.E., General Manager, CAWD

            Barbara Buikema, Accountant/Controller, CAWD

            Michael Niccum, P.E., District Engineer, PBCSD

                        Mike Magretto, Field Operations Supervisor, California-American Water Company (“Cal-Am”)

                        Tom Peterson, Operations Supervisor, Cal-Am

           

2.  Visitors, public comment and/or changes to the agenda:

            There were no comments from visitors, and no changes to the agenda were requested.

 

3.  Minutes:

There were no corrections suggested to the Minutes of the Committee meeting held on January 7, 2005.  In response to a question from Joyce Stevens about a reference on page 2 of the minutes to electrical energy savings, Ray von Dohren clarified that none of the annual $60,000 savings from the new micro-turbine electrical generators at the treatment plant would be attributable to the reclamation project.  Therefore, he said the reclamation project would not share in the savings.

 

It was moved by Joyce Stevens, seconded by Gary Hornbuckle and unanimously carried, to approve the minutes of the Reclamation Management Committee meeting held on January 7, 2005, as submitted.

 

4.  Operations & Maintenance of the Project:

 

4-A.  Treatment Plant Operations & Maintenance (“O&M”)

The Committee received a written report from CAWD Treatment Plant Superintendent, Mark Scheiter, dated March 15, 2005 regarding treatment plant operations for the period of February and March 2005.  It was reported that during the report period the tertiary system had operated intermittently, as irrigation requirements had been minimal.  The most significant activity had involved the treatment plant staff’s extensive work with representatives of the U.S. Filter Company in the assembly, operation and testing of the Micro-Filter/Reverse Osmosis (“MF/RO”) Pilot Plant.  CAWD General Manager Ray von Dohren indicated that, based on their initial experience with the MF/RO Pilot Plant, it is operating as it should, and that CAWD staff has concluded the Pilot Plant should be operated for 6 months instead of the 3-month period originally specified.  He said that after two months of operation the staff was just beginning to understand maintenance requirements for an MF/RO facility, particularly regarding the filter membrane cleaning cycle.  Mr. von Dohren, noting the most important maintenance consideration at this time is scaling from silica precipitation on the RO membranes, said if the filters bio-foul from growth on the front of RO membranes, they can be cleaned and will recover satisfactory function if the cleaning is done often enough.  But, if scaling occurs at the back of the membranes damage is permanent and they cannot regain their filtering capability.  He said that since the secondary treatment processes do not remove silica that is in suspension, and the wastewater contains relatively higher amounts of silica than normal, it is very important to perform proper operation of the equipment and regular maintenance to keep the membranes from scaling.  It was noted also that another important maintenance requirement identified by operating the MF/RO Pilot Plant is that more testing and controlling of free chlorine in the secondary process is required, as chlorine can damage the RO membranes.

 

Rick Verbanec asked how an additional 3 months operating period for the MF/RO Pilot Plant would impact the end result of the advanced treatment facilities project.  Mr. von Dohren responded that the current planned critical path of construction activities for the advanced treatment facilities is premised on completion of the project in May 2007, but that the PBCo had recently requested the schedule be accelerated so that the whole Expanded Reclamation Project, including Forest Lake Reservoir and MF/RO Facilities be fully operational by December 2006 for the 2007 irrigation season.  This would allow the reservoir to be filled during the 2006/2007 wet season.  He said the construction period for the MF/RO Plant would be about 14 months, but indicated that he did not know if the MF/RO Plant could be operational early enough to be able to fill Forest Lake Reservoir with advanced treated water for use in the 2007 irrigation season.  Noting that the MF/RO Pilot Plant began running consistently on February 4th, Mr. von Dohren said he was unsure that the Pilot Plant would actually be on the critical path of the MF/RO project, and that further study would be necessary to determine how to achieve PBCo’s most recent goal.     

 

Joyce Stevens thanked Mr. von Dohren for the CAWD staff’s efforts and advised the Management Committee that a letter had been received from U.S. Filter Company complimenting the CAWD staff for its work and assistance in implementing the MF/RO Pilot Plant.

 

There being no further questions or comments, the written and oral reports regarding Treatment Plant O & M were received for information purposes and no action was required or taken by the Committee.

 

4-B.  Distribution System O&M

PBCSD District Engineer, Michael Niccum, reviewed his written Distribution System Operations Report, dated March 18, 2005.  Mr. Niccum indicated that the distribution system had operated normally and that all required maintenance had been performed.  He reported that due primarily to higher than normal rainfall, total water demand year date was 26% below the 10-year average usage of 133 acre-feet and potable water backup usage was 62% lower than the 10-year average of 34 acre-feet for the same period.  Mr. Niccum said the Reclamation Project Oversight Committee of recycled water users had met and set the first golf course potable water flushing cycle for April 8th and the golf course superintendent members of the committee would tour the CAWD Treatment Plant and MF/RO Pilot Plant sometime in May.

 

There being no questions or comments, the Distribution System O & M Report was received for information and no action was required or taken by the Committee.

 

4-C.  Operation and Maintenance Expense Reports

Before considering the project financial reports prepared by CAWD Accountant, Barbara Buikema, Mr. Andrews said the Technical Advisory Committee (“TAC”) wanted the Management Committee to be aware that the reports were not complete because Ms. Buikema had not received current revenue information from the Monterey Peninsula Water Management District.  He said the situation began some time prior to the Management Committee’s last meeting on January 7th.  Mr. Andrews indicated that the TAC had expressed its concerns to MPWMD’s management staff, who said the problem related to staff turnover and would be resolved shortly as new staff is being trained.

 

Ms. Buikema then the reviewed the financial reports that she had prepared for the period from July 2004 through January 2005.  She confirmed that current revenue data was not yet available from the MPWMD, and that her report was therefore designed as an Operation & Maintenance Statement to update the Committee on operating expenses incurred by CAWD and PBCSD through January 2005.  Ms. Buikema reported that on March 14, 2005 there was a balance of $325,492 in the Operation & Maintenance (“O&M”) Account, and through the first three quarters of the fiscal year $996,672 in water sales revenue had been apportioned to the Reclamation Project by the MPWMD.  She indicated the total included a $415,000 budget adjustment approved by the Committee for uncompensated expenses carried forward from the prior budget year. 

 

Ms. Buikema noted that in response to the Committee’s instructions at its January meeting, the reclamation project staff had investigated the additional labor costs incurred at the tertiary treatment plant for the period of July through September 2004.  She said staff had been unable to identify a satisfactory answer for the added labor, but concluded treatment plant staff had devoted a lot of time to the MR/RO Pilot Plant, and the time had probably been charged to the tertiary plant O&M budget instead of the capital projects budget.

 

On behalf of the MPWMD staff, MPWMD General Manager, David Berger, apologized to the Committee for the lack of current revenue data available to the CAWD staff and the Management Committee.  He said the problem was due to errors by a long time employee who had used erroneous data in an attempt to work with a difficult accounting system.  He indicated that when the employee left the District, the finance officer discovered the accounting errors and decided to correct the data before sending it to the CAWD.  

 

There being no questions or comments, the O & M Financial Statements were received for information and no action was required or taken by the Committee.

 

5.  Status reports concerning Phase II (Expanded) Reclamation Project:

 

5-A.   Advanced treatment facilities:     

General Manager von Dohren reported orally regarding the status of planning and implementation of the advanced treatment plant component of the Expanded Reclamation Project, which will include micro-filtration and reverse osmosis facilities (“MF/RO”).  He said that on March 11, 2005 the PBCo, acting as the fiscal sponsor for the project, authorized CAWD to move to the 20% design stage of the MF/RO project.  Specific methods of procurement are still being considered, but as it appears the most critical issue to PBCo is time, Mr. von Dohren expressed the opinion the most expedient procurement method would be to proceed with a “design-build” procurement process, with CAWD in control of the designer and builder.   He said CAWD would be working with Legal Counsel, Robert Wellington, to prepare the procurement documents as soon as possible.   

 

            There were no questions or comments from the Committee.

 

5-B.   Forest Lake Reservoir:

PBCSD District Engineer Michael Niccum reviewed his written report, dated March 18, 2005 regarding the status of planning for the Forest Lake Reservoir component of the Expanded Reclamation Project.   He reported that PBCSD had received very competitive bids for construction of the project.  The District Board of Directors had declared the bid of $10,936,000 from Anderson Pacific Engineering Construction, Inc. to be the lowest responsible bid and authorized award of the construction contract to that firm.  In addition, the PBCSD Board had approved two agreements to implement the project: 1) an agreement for project construction management services to be provided by E2 Consulting Engineers with a budget limit of $978,500 and 2) an agreement with the PBCo for reimbursement to PBCSD of construction and project management costs incurred prior to issuance by PBCo of its formal financial commitment for the Expanded Reclamation

Project.  Mr. Niccum said PBCSD had issued a Notice to Proceed to Anderson Pacific, specifying work on the project to commence on March 21, 2005.  He indicated the contract requires the reservoir improvements to be completed within 240 days or by the end of November 2005 to allow the reservoir to be filled with recycled water during the wet season.  The remainder of the project is required to be completed by March 21, 2006 to allow use of the stored recycled water during the 2006 irrigation season.

 

In response to Ms. Stevens’ question, Mr. Niccum indicated there have been no comments or responses from residents regarding the project, but PBCSD does plan to schedule a night meeting for neighbors to be briefed and to answer questions about the project.  Mr. Stilwell noted that the routing of trucks will be an important consideration to minimize impact of the project on residents.  Mr. Niccum clarified that all heavy trucks will be routed to and from the project via PBCo’s Haul Road, Lopez Road and a temporary construction access road on Lopez Road across from PBCSD facilities at Forest Lake and Lopez Roads.  Ms. Stevens mentioned that she had recently received information about the use of solar-powered motors, pumps and agitators to assist in control of algae in reservoirs, and wondered if the technology had been considered for application in Forest Lake Reservoir.  Mr. Niccum responded that PBCSD’s algae control consultant, Dr. Alex Horne of the University of California, Berkeley, had recommended that an air bubbler system be installed, which will require hard wiring for electricity to operate the equipment.

 

            There were no further questions or comments from the Committee.

 

5-C.    Financial Planning

Mark Stilwell reported orally regarding Pebble Beach Company progress in raising funds through the sale of potable water entitlement rights to finance Expanded Reclamation Project improvements.  He said about 85 acre-feet of water entitlements had been subscribed with a potential value of $17 million.  He said letters were sent by the PBCo to 350 prospective buyers, with instructions to deposit the purchase price in escrow by April 1st to meet an escrow closing date of April 15th.  Mr. Stilwell indicated that unless there is a significant drop-out of actual buyers the PBCo should be able to formally issue its financial commitment for the Expanded Reclamation Project around April 15th.  He reminded the Committee that pursuant to the implementation agreements for the Expanded Reclamation Project, CAWD and PBCSD would have to concur they are ready to proceed with the project by also signing the financial commitment document. 

 

Mr. Stilwell also clarified that the issue posed by Richard Rosenthal had not yet been resolved.  He said Mr. Rosenthal had submitted a letter to the MPWMD, which questioned whether the sale of PBCo potable water entitlements was governed by the Monterey County agreement regarding sale of Robles Del Rio water rights.  Mr. Stilwell indicated that PBCo remained confident that the Robles Del Rio agreement is not applicable.  He said the way PBCo had decided to address the matter was to include language in the PBCo water sales escrow letters disclosing the Rosenthal letter is on file, and asking the buyer to close escrow with the understanding and promise that PBCo will defend the buyer’s legal rights to the water purchased.  In the unlikely event Mr. Rosenthal prevailed in legal proceedings, the PBCo would refund the buyer’s money.  Mr. Stilwell also noted that the water sales agreements can only be challenged at the time a building permit is being processed. 

 

In response to questions from the Committee, Mr. Stilwell estimated that about one-third of the water sales would be to owners of vacant lots of record and the other two thirds to residential property owners who plan to remodel their homes.  He said PBCo was still getting multiple telephone calls each day from property owners who had not yet returned their contracts.  Further discussion ensued relating to the possibility of more property owners opting in to the project financially when they better understood it was moving forward and the PBCo water was likely to be the only added potable water rights available for an extended period of time.              

 

            There were no further questions or comments from the Committee.

 

6.   Miscellaneous Information or Announcements from Members, Staff or Visitors:

Mr. Stilwell reported that the Regional Water Quality Control Board had issued a Cease and Desist Order to the Monterey Peninsula cities and the PBCo alleging inadequate control of pollutants from stormwater runoff entering two areas that had each been designated by the State as an Area of Special Biological Significance (“ASBS”).  He said the Cease and Desist Order indicated that PBCo would have to either ask the State Board for an exception from the stormwater discharge prohibition or build facilities that would keep stormwater from entering Carmel Bay.  Mr. Stilwell indicated that the City of Carmel-By-The-Sea and PBCo were jointly contesting the Cease and Desist Order, and that part of their position was that the agencies should at least be given some credit for the Reclamation Project, which significantly reduces the amount of wastewater effluent that would otherwise be discharged into Carmel Bay.  Also, PBCo and Carmel have argued that the Regional Board should be investigating the Carmel River as the likely major source of whatever stormwater pollution is getting into Carmel Bay.  Mr. Stilwell said the Regional Board had subsequently postponed its hearing on the Cease and Desist Order until summer.     

 

7.   Closed Session

The Committee did not meet in a closed session.

 

8.         Adjournment & Next Meeting Date:

 

There being no further business at 10:58 a.m., it was moved by Joyce Stevens, seconded by Gary Hornbuckle, and unanimously carried to adjourn to the Committee’s next regular meeting on Friday, May 20, 2005 at 9:30 a.m. in the PBCSD Boardroom at 3101 Forest Lake Road, Pebble Beach. 

 

                                                      Respectfully submitted:                                                                                                                                                                                                                              

                                                                                                            (s) Richard Andrews

                                                                                                            Secretary to the Committee