Salinas Valley Basin Groundwater Sustainability Agency...Groundwater Sustainability Agency 7. Adopt...

REVISED BOARD OF DIRECTORS

REGULAR MEETING AGENDA

NOVEMBER 9, 2017

4 P.M.

CITY HALL ROTUNDA, 200 LINCOLN AVENUE

SALINAS, CALIFORNIA 93901

1. Call to Order

2. Roll Call

3. Pledge of Allegiance

4. General Public Comment

Members of the public may comment on matters within the jurisdiction of the agency that

are not on the agenda. Public comments generally are limited to two (2) minutes per

speaker; the Chair may further limit the time for public comments depending on the

agenda schedule. Comments on agenda items should be held until the items are reached.

To be respectful of all speakers and avoid disruption of the meeting, please refrain from

applauding or jeering speaker.

CONSENT RESOLUTION

All matters listed under the Consent Agenda may be enacted by one motion unless a member

of the Board, audience, or staff requests discussion or a separate vote.

5. Approve October 12, 2017 regular meeting minutes.

CONSIDERATION ITEMS

Receive staff report, Directors’ questions, public comments, Directors’ comments and

consider Board action on each of the following items.

6. Receive Financial Report.

Salinas Valley Basin

Groundwater Sustainability Agency www.svbgsa.com

7. Adopt RESOLUTION approving Amendment No. 1 to Agreement regarding

interim administrative and legal services between the County of Monterey, the City

of Salinas, and the Salinas Valley Basin Groundwater Sustainability Agency.

8. Adopt RESOLUTION adopting Bylaws for the conduct of Board business.

9. Adopt RESOLUTION adopting a Conflict of Interest Code for the Agency.

10. Adopt RESOLUTION approving Coordination Agreement between Marina Coast

Water District and SVBGSA.

11. Adopt RESOLUTION approving Investment Policy.

12. Update on California Department of Water Resources Groundwater Sustainability

_Plan Grant Application.

REPORTS

13. General Manager’s Report

14. Directors’ Reports and Future Agenda Items

ADDENDUM

15. Provide direction to staff on the California Department of Water’s

response regarding the formation of GSAs in the Salinas Valley Basin

ADJOURNMENT

MEETING ACCOMMODATION

Disability-related modification or accommodation, including auxiliary aids or services, may

be requested by any person with a disability who requires modification or accommodation in

order to participate in the meeting. Requests should be referred to Ann Camel, Clerk to the

Board at [email protected] as soon as possible but by no later than 5 p.m. two business days

prior to the meeting. Hearing impaired or TTY/TDD text telephone users may contact the

Agency by dialing 711 for the California Relay Service (CRS) or by telephoning any other

service providers’ CRS telephone number.

VIEWING MEETINGS

Live meetings are televised on Channel 25 at www.youtube.com/thesalinaschannel . The

recorded meeting schedule may be viewed at http://tinyurl.com/salinas25

AGENDA POSTING

mailto:[email protected]

http://www.youtube.com/thesalinaschannel

http://tinyurl.com/salinas25

The meeting agenda was posted on November 3, 2017 at the City Clerk’s Office, in the City

Hall Rotunda, 200 Lincoln Avenue, Salinas, CA 93901. The revised meeting agenda was

posted prior to 4 p.m. on November 6, 2017.

1 (October 12, 2017)

Salinas Valley Basin Groundwater

Sustainability Agency

SALINAS VALLEY BASIN GROUNDWATER SUSTAINABILITY AGENCY

UNOFFICIAL MEETING MINUTES

OCTOBER 12, 2017

Oath of Office

The Honorable Monterey County Superior Court Judge Hulsey swore in the Permanent Primary

and Alternate Board of Directors in attendance at 4 p.m. in the City Hall Rotunda, 200 Lincoln

Avenue, Salinas.

Call to order

Chairperson Pro Tem Gunter convened the meeting of the Permanent Board of Directors.

Roll call

Present:

Director Janet Brennan

Director Lou Calcagno

Director Brenda Granillo

Director Bill Lipe

Director Michael McHatten

Director Steve McIntyre

Director Colby Pereira

Director Adam Secondo

Director Ron Stefani

Chairperson Joseph Gunter

Absent:

Director Luis Alejo

Also Present:

General Manager Gary Petersen; Chief Assistant County Counsel Les Girard; Clerk Ann Camel

Election of Board Officers

Director Lipe nominated Director Alejo as Chairperson. The motion died for lack of a second.

Upon motion by Director McHatten and second by Director Secondo, the Board elected

Director Gunter to serve as Chairperson. Ayes: Directors Brennan, Calcagno, Granillo, Lipe,

McHatten, McIntyre, Pereira, Secondo, Stefani, and Chair Gunter. Noes: None. Abstain:

None. Absent: Director Alejo.

Upon motion by Director Pereira and second by Director McIntyre, the Board elected

Director McHatten to serve as Vice Chair. Ayes: Directors Brennan, Calcagno, Granillo,

Lipe, McHatten, McIntyre, Pereira, Secondo, Stefani, and Chair Gunter. Noes: None.

Abstain: None. Absent: Director Alejo.

2 (October 12, 2017)

Consider General Manager candidate selected by Regional Government Services

Mr. Girard stated that the Board contracted with Regional Government Services (RGS) to provide

General Manager services. The General Manager will be an employee of RGS. RGS met with the

Executive Committee and Directors’ ad hoc Committee to identify desirable qualifications. The

contract for Interim General Manager services would need to be extended if the Board requests RGS

to continue its recruitment.

Richard Averett, RGS Executive Director, and Sophia Selivanoff, RGS Director of Human

Resources Services, presented the report on record. They worked with stakeholders to identify

desirable qualifications and to seek applicants. All four applicants were interviewed. Gary Petersen

is recommended based on his leadership on this effort and outstanding qualifications.

Permanent Directors asked questions, and commended the selection process and Mr. Petersen for his

service and leadership.

The following audience members spoke in support of Mr. Petersen’s appointment:

Tom Adcock, Alternate Director; Heather Lukacs, Advisory Committee Member; Abby Taylor

Silva, Grower-Shipper Association, Advisory Committee member.

Mr. Petersen thanked everyone for their comments. He has done much organizational work and

leadership collaboration, and he would like to complete this journey. In response to Directors, Mr.

Petersen stated that his employment relationship is with RGS, but he would receive direction from

the Board. His final day with the City would be November 5, and he would act in both roles in the

interim. He would seek consensus from parties. Priorities include submitting the grant application

by November 13, 2017, and then determining what a joint Plan would like.

Mr. Girard clarified that direction would come from the Board, but any performance dissatisfaction

would be directed to RGS.

BOARD ACTION

Upon motion by Director McIntyre and second by Director McHatten, the Board voted to

accept Gary Petersen as the SVBGSA General Manager. Ayes: Directors Brennan, Calcagno,

Granillo, Lipe, McHatten, McIntyre, Pereira, Secondo, Stefani, and Chair Gunter. Noes:

None. Abstain: None. Absent: Director Alejo.

Upon motion and second, the Board voted to authorize an amendment to the interim services

agreement authorizing Mr. Petersen to continue as Interim Director until he transitions to

employment with RGS. Ayes: Directors Brennan, Calcagno, Granillo, Lipe, McHatten,

McIntyre, Pereira, Secondo, Stefani, and Chair Gunter. Noes: None. Abstain: None.

Absent: Director Alejo.

General Public Comment

None

CONSENT RESOLUTION

Upon motion and second, the Board voted to adopt the Consent Resolution. Ayes: Directors

Brennan, Calcagno, Granillo, Lipe, McHatten, McIntyre, Pereira, Secondo, Stefani, and Chair

Gunter. Noes: None. Abstain: None. Absent: Director Alejo.

3 (October 12, 2017)

The Consent Resolution contained the following items:

1. Approved September 14, 2017 regular meeting minutes

2. Adopted RESOLUTION 2017-10 approving the Board meeting schedule

3. Received status report on RGS task list

CONSIDERATION ITEMS

4. Consider appointment of Members to 1) Budget and Finance Committee, and 2) Executive

Committee, and 3) Planning Committee.

Mr. Girard stated that the Planning Committee would be addressed in the Bylaws that will be

considered in November.

Upon motion by Director Pereira and second by Director McIntyre, the Board voted to

appoint Directors Secondo, McHatten, Alejo, Brennan and Lipe to the Budget and Finance

Committee. Ayes: Directors Brennan, Calcagno, Granillo, Lipe, McHatten, McIntyre,

Pereira, Secondo, Stefani, and Chair Gunter. Noes: None. Abstain: None. Absent: Director

Alejo.

Upon motion and second, the Board voted to appoint Directors McHatten, Pereira, McIntyre,

Stefani, and Chair Gunter to the Executive Committee. Ayes: Directors Brennan, Calcagno,



5. Agency Bylaws and Conflict of Interest Code

Mr. Girard reported that the Executive Committee would make a recommendation at the November

Board meeting.

6. Consider approving Advisory Committee’s recommended appointment of Bob Jaques and

consider rotating Board members’ representation on the Advisory Committee.

Mr. Girard stated that rotating Board members’ representation on the Advisory Committee would be

addressed in the Bylaws on the November agenda. Director Lipe expressed that all Directors should

have the opportunity to serve on the Advisory Committee.

In response to Abby Taylor Silva, Mr. Girard stated that the JPA allows the Advisory Committee to

include members from other basins or the Seaside adjudicated basin.

Upon motion by Director Brennan and second by Director Granillo, the Board approved the

appointment of Bob Jaques to the Advisory Committee. Ayes: Directors Brennan, Calcagno,



7. Agreement for Legal Services with the County Counsel’s Office of Monterey County

Mr. Petersen presented the report, on file. There were no comments.

Upon motion and second, the Board voted to adopt RESOLUTION 2017-11 approving the

4 (October 12, 2017)

legal services agreement with the Monterey County Counsel’s Office. Ayes: Directors

Brennan, Calcagno, Granillo, Lipe, McHatten, McIntyre, Pereira, Secondo, Stefani, and Chair

Gunter. Noes: None. Abstain: None. Absent: Director Alejo.

8. Approval of Directors and Officers Liability Insurance Policy

Roberto Moreno, Senior Advisor, presented the report and a presentation of alternative coverage

limits, on file in the Agency record. Mr. Moreno clarified that CNA’s proposal for $2,180 was for

$1,000,000 in coverage. In response to Directors, Mr. Moreno stated that liability coverage is the

only coverage currently needed until property insurance will be required. Fifteen thousand dollars

was budgeted for insurance when full time staff was anticipated.

Upon motion by Director Brennan and second by Director Lipe, the Agency voted to accept

the $2 million insurance policy offer from ACE Fire Underwriters at a cost of $2,069. Ayes:

Directors Brennan, Calcagno, Granillo, Lipe, McHatten, McIntyre, Pereira, Secondo, Stefani,

and Chair Gunter. Noes: None. Abstain: None. Absent: Director Alejo.

9. Adopt Resolution ratifying Agreement for GSP Planning Grant Writing (“Agreement”) with

Kennedy/Jenks Consultants including a budget transfer, and Resolution authorizing the

application for grant funding

Mr. Petersen presented the report, on file, and answered Directors’ questions. He compared the

proposals that had been received. Grant matching funds could include in-kind services and

expenditures retroactive to when the State Groundwater Management Act went into place, so the

SVBGSA may have met the matching fund requirement. Participants could contribute by assisting

in Plan development. Kennedy/Jenks would coordinate with other basins. In response to Norm

Groot, Mr. Petersen stated that there is no assurance that the Agency would secure a grant sufficient

to recover the cost of the application, but the complexity justifies the investment.

Upon motion and second the Board adopted RESOLUTION 2017-12 ratifying Agreement for

GSP Planning Grant Writing (“Agreement”) with Kennedy/Jenks Consultants including a

budget transfer, and RESOLUTION 2017-13 authorizing the application for grant funding.

Ayes: Directors Brennan, Calcagno, Granillo, Lipe, McHatten, McIntyre, Pereira, Secondo,

Stefani, and Chair Gunter. Noes: None. Abstain: None. Absent: Director Alejo.

10. Consider appointment of members to ad hoc committee to attend Interagency GSP and

cooperation agreement meetings

Upon motion by Director Brennan and second by Director McIntyre, the Agency voted to appoint Directors Lipe, McIntyre, and Granillo to the Interagency Ad hoc Committee. Ayes:

Directors Brennan, Calcagno, Granillo, Lipe, McHatten, McIntyre, Pereira, Secondo, Stefani,

and Chair Gunter. Noes: None. Abstain: None. Absent: Director Alejo.

REPORTS

11. General Manager’s Report

Mr. Petersen reported on meetings at the Bureau of Reclamation and CSUMB, and on the

Monterey County drought contingency. A special Board meeting may be required for the grant

application.

12. Directors’ Reports and Future Agenda Items

Director Pereira would like a report on what future working relations with the Water Resources

5 (October 12, 2017)

Agency would like, e.g. MOU. She is interested in educational opportunities on global ground

water systems, including models in Australia, Denmark, and Israel.

Director McHatten suggested posting task orders and future agenda items to the webpage.

Director Secondo stated that the Nature Conservancy may allow the Agency early access to their

2019 program agenda. A Denmark contingency offered all CA GSAs a tour of their systems or to

make a presentation to the Board. Israel representatives have also offered tours, which could be

extended to other GSAs.

Norm Groot, Farm Bureau, suggested an agenda item responding to the upcoming State boundary

modifications and discussions with the Monterey County Water Resources Agency on the failed

boundary change in southern Monterey County.

In response to David Morisoli, Chair Gunter stated that the Planning Committee would be on the

November agenda.

ADJOURNMENT

The meeting adjourned at 5:40 p.m.

APPROVED:

________________________________

Joseph Gunter, Board Chair

ATTEST:

_________________________________

Ann Camel, Clerk of the Board

1

MEETING DATE: November 9, 2017 AGENDA ITEM: 6 SUBJECT: Receive Financial Reports RECOMMENDATION: It is recommended that the Board of Directors receive the financial reports. BACKGROUND Section 6.8 of the Joint Exercise of Powers Agreement forming the Salinas Valley Basin Groundwater Sustainability Agency (“Agency”) states “The Board shall adopt Bylaws governing the conduct of meetings and the day-to-day operations of the Agency on or before the first anniversary of the Effective Date.” DISCUSSION Attached are the following financial statements for the Agency thru October 31, 2017:

Statement of Revenue & Expense - Budget vs. Actual – shows all member contributions billed and expenses through October

Statement of Revenue & Expense - July thru October - shows monthly totals

Balance Sheet – shows $409,100 in cash and $710,000 in receivables

Payment & Disbursement Report – shows detail of deposits and disbursements for the month of October, the first month with fiscal activity

FISCAL IMPACT None. ATTACHMENT(S)

Financial Statements as stated above

PREPARED BY: Roberto Moreno, RGS Senior Advisor

Jul - Oct ... Budget

Ordinary Income/Expense

Income

440000 · Member Contributions 1,145,000 1,145,000

Total Income 1,145,000 1,145,000

Expense

520000 · Administrative Services 28,148 104,243

530000 · Groundwater Sustainability ... 68,182

530500 · Staff Attorney 27,950

540100 · Agency Financing Plan 13,636

540200 · Facilitation Services 10,909

540300 · Grant Writing / Lobbying 5,455

540400 · Outside Specialty Legal Svcs 21,818

550200 · Conferences / Training 2,045

550300 · Dues and Subscriptions 2,045

550600 · Insurance Expense 2,219 4,091

550700 · Legal Notices & Ads 2,727

550800 · Office Supplies 1,227

550900 · Postage and Delivery 818

551000 · Printing and Reproduction 1,470 2,727

551100 · Office Rent 800 10,909

551200 · Technology 3,545

551300 · Travel Expense 2,727

551500 · Recruitments 9,551

Total Expense 42,188 285,056

Net Ordinary Income 1,102,812 859,944

Net Income 1,102,812 859,944

12:53 PM Salinas Valley Basin Groundwater Sustainability Agency

11/02/17 Statement of Revenue and Expense - Budget vs ActualAccrual Basis July through October 2017

Page 1

Jul 17 Aug 17 Sep 17 Oct 17 TOTAL

Ordinary Income/Expense

Income

440000 · Member Contributions 1,145,000 1,145,000

Total Income 1,145,000 1,145,000

Expense

520000 · Administrative Services 9,825 6,532 11,792 28,148

550600 · Insurance Expense 2,219 2,219

551000 · Printing and Reproduct... 656 525 289 1,470

551100 · Office Rent 800 800

551500 · Recruitments 1,658 6,705 1,188 9,551

Total Expense 12,138 13,762 16,287 42,188

Net Ordinary Income -12,138 1,131,238 -16,287 1,102,812

Net Income -12,138 1,131,238 -16,287 1,102,812

12:49 PM Salinas Valley Basin Groundwater Sustainability Agency

11/02/17 Statement of Revenue and ExpenseAccrual Basis July through October 2017

Page 1

Oct 31, ...

ASSETS

Current Assets

Checking/Savings

100100 · Rabobank Checking 24,100

100200 · Rabobank Money Mar... 385,000

Total Checking/Savings 409,100

Accounts Receivable

110000 · Accounts Receivable 710,000

Total Accounts Receivable 710,000

Total Current Assets 1,119,100

TOTAL ASSETS 1,119,100

LIABILITIES & EQUITY

Liabilities

Current Liabilities

Accounts Payable

200000 · Accounts Payable 16,287

Total Accounts Payable 16,287

Total Current Liabilities 16,287

Total Liabilities 16,287

Equity

Net Income 1,102,812

Total Equity 1,102,812

TOTAL LIABILITIES & EQUITY 1,119,100

10:44 AM Salinas Valley Basin Groundwater Sustainability Agency

11/02/17 Balance SheetAccrual Basis As of October 31, 2017

Page 1

2:30 PM

10/30/17

Accrual Basis

Salinas Valley Basin Groundwater Sustainability Agency

Payment & Disbursement Report July through October 2017

Type Date Num Name Memo Amount

Jul - Oct 17

Deposit 10/03/2017 Castroville CSD Member contribution 20,000.00

Deposit 10/23/2017 Gonzales & Soledad Member contribution 55,000.00

Bill Pmt -Check 10/23/2017 1001 Regional Government Servies Aug-Sept invoices -25,900.20

Deposit 10/24/2017 Salinas Member contribution 330,000.00

Deposit 10/30/2017 King City Member contribution 30,000.00

Jul - Oct 17 409,099.80

Page 1 of 1

Salinas Valley Basin

Groundwater Sustainability Agency Department of Public Works • 200 Lincoln Avenue • Salinas, California 93901 • (831) 758-7390

AGENCY MEETING DATE: November 9, 2017

AGENDA ITEM: 7

SUBJECT: Amendment No 1. To Agreement with Monterey County and the City of Salinas

regarding Interim Services

RECOMMENDATION: Approve the Agreement

BACKGROUND

Section 9.1 of the Joint Exercise of Powers Agreement (“JPA Agreement”) forming the Salinas

Valley Basin Groundwater Sustainability Agency (“Agency”) provides that one or more

members of the Agency will provide interim administrative, legal and other support services at

no cost to the Agency until the appointment of the Permanent Board of Directors (no later than

October 1, 2017). As reported at the initial meeting of the Agency Board on March 9, 2017, the

City of Salinas (“City”) has provided interim General Manager and Clerk of the Board services

to the Agency, and the County has provided interim legal and administrative services. The JPA

Agreement requires that the provision of these interim services be formalized and documented

with the Board’s approval. This was accomplished in April of 2017.

DISCUSSION

The City and the County provided the indicated services, and others as necessary, at no cost. The

agreement provided that the services would be provided until the earlier of October 1, 2017, or

the seating of a Permanent Board of Directors, or the securing by the Agency of substitute

services at its sole cost.

In August of 2017 the Board entered into an agreement with Regional Government Services

(RGS) to provide management support services to the JPA. Clerk, administrative support and

financial services were immediately provided by RGS. The recruitment for General Manager

Services was completed after the contact for services was agreed upon.

Additionally, during this time the JPA released and evaluated Request for Proposals for Legal

Services to the JPA. Ultimately, the County of Monterey was selected to provide services.

In both cases, the General Manager Recruitment and the agreement for legal services,

circumstances were such that the City of Salinas and the County of Monterey ended up providing

interim services for a few weeks beyond the agreed upon termination of the Interim Services

Agreement.

In order to memorialize this extension of services beyond the terms of the original agreement,

Amendment No 1. to the Interim Services Agreement was developed.

This amendment to the agreement, like the agreement itself is not prohibited by Government

Code section 1090 because the representation of the City and County on the Agency’s Board of

Directors is subject to the exception set forth in Government Code section 1091.5 (9) (non

Ultimate-interest). In addition, this agreement does not create a conflict of interest for the City

and County Directors under the Political Reform Act because they do not have a financial

interest in the draft agreement pursuant to the exceptions provided in definition of “income” set

forth in Government Code section 82030 (b).

In an abundance of caution, it is proposed that the amendment to the agreement be executed by

the Vice-Chair of the Agency, and we ask that the City and County Directors not participate in

the discussion or vote on the draft amendment. Enclosed as Attachment C is a draft resolution

authorizing the Vice-Chair to execute the agreement.

Attachments: A – Draft Agreement

B – Amendment No 1.

C – Draft Resolution

Page 3 of 9

ATTACHMENT A.

AGREEMENT REGARDING INTERIM ADMINISTRATIVE AND LEGAL SERVICES

between

THE COUNTY OF MONTEREY,

THE CITY OF SALINAS,

and

THE SALINAS VALLEY BASIN GROUNDWATER SUSTAINABILITY AGENCY

Page 4 of 9

RECITALS

WHEREAS, the Salinas Valley Basin Groundwater Sustainability Agency (“SVBGSA”)

is a joint powers authority (“JPA”) formed pursuant to state law and by agreement effective

December 22, 2017 (“JPA Agreement”); and

WHEREAS, the JPA agreement forming the SVBGSA provides that one or more of the

members of the SVBGSA will provide interim administrative, legal and other support services to

the SVBGSA at no cost, until no later than September 30, 2017; and

WHEREAS, the City of Salinas (“City”) and the County of Monterey (“County”) are

currently providing such interim services to the SVBGSA; and

WHEREAS, the parties desire to memorialize the nature, extent, and continued provision

of the interim services provided for in the JPA Agreement; NOW THEREFORE,

For good and valuable consideration, the sufficiency of which is hereby acknowledged,

the County, the City, and the SVBGSA agree that the County and City will provide interim

administrative and legal services to the SVBGSA at no cost as follows:

1. The County will provide the following interim services to the SVBGSA:

a. Interim legal services through the Office of the County Counsel by an attorney

designated by the County Counsel; and

b. Interim administrative and other support services through the County

Administrative Office.

2. The City will provide the following interim administrative services to the SVBGSA:

a. The City Manager will designate an interim General Manager for the SVBGSA;

and,

b. The City Clerk will provide interim Clerk of the SVBGSA Board of Directors

services.

3. The SVBGSA hereby accepts the proffered services, and waives any claim for damages

against the County and City, and each of them, their officers and employees related to or

arising from the provision of the indicated services. The City and County, and each of

them hereby waive any claim for damages against the SVBGSA, and its Board of

Directors, and any claim for damages against each other, and their respective officers and

employees, related to or arising from the provision of the indicated services.

4. The SVBGSA acknowledges that County Counsel represents other clients, including the

County of Monterey, LAFCO of Monterey County, the Transportation Agency of

Monterey County, the Water Resources Agency of Monterey County, and the Monterey

Bay Unified Air Pollution Control District, which representation may, from time-to-time,

Page 5 of 9

present a conflict of interest with the representation of the SVBGSA. County Counsel

shall promptly inform the SVBGSA of any situation giving rise to a conflict of interest in

the representation of the SVBGSA, and the parties shall confer in good faith regarding a

potential waiver of any conflict. Should any conflict not be waived, the SVBGSA shall

retain at its own cost legal services from a different attorney of its choice regarding that

matter.

5. The interim services provided for herein shall be provided until the earlier of the seating

of the Permanent Board of Directors, October 1, 2017, or such time as the SVBGSA

secures other or permanent replacement services, which such service shall not be a

financial obligation of the City or County.

CITY OF SALINAS

By______________________________

Ray Corpuz

City Manager

Dated: April ___, 2017

COUNTY OF MONTEREY

By______________________________

Lew C. Bauman

County Administrative Officer


SALINAS VALLEY BASIN

GROUNDWATER SUSTAINABILITY

AGENCY

By______________________________

Michael McHatten

Vice-Chair


APPROVED AS TO FORM

______________________________

Charles J. McKee

County Counsel

APPROVED AS TO FORM

______________________________

Christopher A. Callihan, City Attorney

ATTACHMENT B

AMENDMENT NO. 1

to

AGREEMENT REGARDING INTERIM ADMINISTRATIVE AND LEGAL SERVICES

between

THE COUNTY OF MONTEREY,

THE CITY OF SALINAS,

and

THE SALINAS VALLEY BASIN GROUNDWATER SUSTAINABILITY AGENCY

Page 7 of 9

RECITALS

WHEREAS, in April of 2017, the Salinas Valley Basin Groundwater Sustainability

Agency (“SVBGSA”), the County of Monterey (“County”) and the City of Salinas (“City)

entered into an agreement (“Agreement”) whereby the County and City would provide interim

administrative and legal services to the SVBGSA until the earlier of October 1, 2017 or until

replacement services were obtained; and

WHEREAS, neither replacement executive director/general manager nor legal services

were obtained by October 1, 2017, and the City and County continued to provide such services;

and

WHEREAS, replacement legal services have been secured, and replacement general

manager services will be secured on November 6, 2017; and

WHEREAS, it is therefore appropriate to document the continuation of interim

administrative and legal services until replacement services were or will be obtained by

SVBGSA; NOW THEREFORE,

For good and valuable consideration, the sufficiency of which is hereby acknowledged,

the County, the City, and the SVBGSA agree as follows:

1. Paragraph 5 of the Agreement is amended to read:

The interim services provided for herein shall be provided until the earlier later of the seating

of the Permanent Board of Directors, October 1, 2017, or such time as the SVBGSA secures

other or permanent replacement services, which such service shall not be a financial

obligation of the City or County.

2. Except as specifically amended, all other terms of the Agreement remain unchanged and

in effect.

CITY OF SALINAS

By______________________________

Ray Corpuz

City Manager

Dated: November ___, 2017

COUNTY OF MONTEREY

By______________________________

Lew C. Bauman

County Administrative Officer


Page 8 of 9

SALINAS VALLEY BASIN

GROUNDWATER SUSTAINABILITY

AGENCY

By______________________________

Michael McHatten

Vice-Chair


APPROVED AS TO FORM

______________________________

Charles J. McKee

County Counsel

APPROVED AS TO FORM

______________________________

Christopher A. Callihan, City Attorney

Page 9 of 9

_____________________________________

Page 1 of 2

Before the Board of Directors of the

Salinas Valley Basin Sustainable Groundwater Management Agency

Resolution No.

Resolution approving an extension of the

Agreement regarding Interim Legal and

Administrative Services with the County of

Monterey and the City of Salinas

)

)

)

WHEREAS, the Joint Exercise of Powers Agreement establishing the SVBGSA provided

that the City of Salinas and the County of Monterey would provide interim administrative and

legal services, respectively, to the SVBGSA until September 30, 2017; and,

WHEREAS, the Board entered into an agreement with the County of Monterey and the

City of Salinas for the provision of such interim services until the earlier of the retention of

replacement services or September 30, 2017; and

WHEREAS, the Board approved an agreement with Regional Government Services for

the provision of certain administrative services but the position of General Manager was not

filled by September 30, 2017, and the City continues to provide interim General Manager

services until a permanent General Manager begins service on November 5, 2017; and,

WHEREAS, permanent legal services were not retained by September 30, 2017, and the

County continued to provide such interim services until Agency Counsel was selected in October

of 2017; and,

WHEREAS, it is therefore necessary and appropriate to extend the Agreement for Interim

Legal and Administrative Services; NOW, THEREFORE,

BE IT RESOLVED, by the Board of Directors of the Salinas Valley Basin Groundwater

Sustainability Agency as follows:

1. The above recitals are true and correct.

2. The attached Amendment No. 1 to the Agreement regarding Interim Legal and

Administrative Services with the County of Monterey and the City of Salinas is

hereby approved.

3. The Vice-Chairperson of the Board is authorized to execute the Amendment on

behalf of the SVBGSA.

4. The General Manager and Agency Counsel are hereby authorized and directed to take

such other and further actions as may be necessary or appropriate to implement the

intent and purposes of this resolution.

ATTACHMENT C

Page 2 of 2

PASSED AND ADOPTED on this ___ day of ___________, ______, by the following vote, to-

wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

I, Ann Camel, Clerk of the Board of Directors of the Salinas Valley Basin Groundwater Sustainability Agency, State

of California, hereby certify that the foregoing is a true copy of an original order of said Board of Directors duly

made and entered in the minutes thereof of Minute Book_____ for the meeting on _______________.

Dated: Ann Camel, Clerk of the Board of Directors of the Salinas Valley Basin

Groundwater Sustainability Agency, County of Monterey, State of California _____________________________________

1

AGENCY MEETING DATE: November 9, 2017

AGENDA ITEM: 8

SUBJECT: Approval of Agency Bylaws

RECOMMENDATION: It is recommended that the Board of Directors consider and adopt Bylaws for the conduct of Board business.

BACKGROUND Section 6.8 of the Joint Exercise of Powers Agreement forming the Salinas Valley Basin Groundwater Sustainability Agency (“Agency”) states “The Board shall adopt Bylaws governing the conduct of meetings and the day-to-day operations of the Agency on or before the first anniversary of the Effective Date.”

DISCUSSION Staff prepared draft bylaws for the Agency which were considered by the Executive Committee at a special meeting on November 1, 2017. Enclosed are the draft bylaws for the Board’s consideration. Changes recommended by the Executive Committee, and other recommended changes to the initial draft, are indicated in underline/strikeout. Issues for specific Board discussion and consideration are highlighted.

FISCAL IMPACT None with the adoption of the bylaws. Implementation of the bylaws may have a fiscal impact, for example publication of notices for the adoption of ordinances.

ATTACHMENT(S)

A – Draft bylaws B – Resolution

PREPARED BY: Leslie J. Girard Agency Counsel

I.

BYLAWS


BOARD OF DIRECTORS

PURPOSE AND AUTHORITY.

1.1. Authority. These bylaws are adopted pursuant to the Joint Exercise of Powers Agreement fonning the Salinas Valley Basin Groundwater Sustainability Agency ("Agency"), dated December 22, 2016 (Agreement).

J

1.2. Put:pose. The putpose of these bylaws is to establish procedures for the conduct of meetings of the Agency Board of Directors ("Board"), provide for the formation and function of committees, and to provide guidelines for the other activities of the Board.

1.3. Relations between Board and Regional Government Services. The pwpose of the Board is to set policy for implementation by Regional Government Services, an independent contractor who is providing certain administrative services to the Agency pursuant to a contract dated August 10, 2017. Such services include the provision of a General Manager, who will function as the Agency's Executive Director as described in the Agreement but not be an employee of the Agency.

1.4. Incorporation of Provisions of the Agreement. Various provisions of the Agreement set forth the powers, duties and procedures of the Board. Those provisions are attached hereto and incorporated herein as Exhibit A for ease of reference. If any inconsistency exists between the provisions of the Agreement and these bylaws, the provisions of the Agreement shall control.

II. DIRECTORS.

2.1. General. The number, manner of appointment, removal, filling of vacancies, and duties of Primary and Alternate Directors are set forth in Article VI of the Agreement. Primary and Alternate Directors are expected to communicate with each other from time-to-time so that the Alternates may participate in Board meetings in an informed manner when called upon to do so. When a Primary Director is present, an Alternate may attend a Board meeting as a member of the public, but may not participate in any Board discussion or vote on a matter.

2.2. Compensation.

(a) Each Director, whether Primary or Alternate, shall receive a stipend for hisor her services in the sum of $100 for each meeting attended by such Director in an official capacity. A meeting for which a stipend will be given may be a regular or special meeting of the Board at which a Director is sitting as a participating member of the Board, a meeting of any committees established by the Board to which a Director is appointed and is attending in a participating capacity, or any meeting at which a Director's presence is authorized by the Board.

(b) In addition, Directors, whether Primary or Alternate, shall be reimbursed foractual and necessary expenses incurred in the performance of official Agency business when so directed or authorized by the Board, such reimbursement to be consistent with a schedule and

1

AGENCY MEETING DATE: November 9, 2017 AGENDA ITEM: 9 SUBJECT: Approval of Agency Conflict of Interest Code RECOMMENDATION: It is recommended that the Board of Directors consider and adopt a Conflict of Interest Code for the Agency. BACKGROUND Section 7.9 of the Joint Exercise of Powers Agreement forming the Salinas Valley Basin Groundwater Sustainability Agency (“Agency”) requires the Board to have started the process to adopt a conflict of interest code as required by the California Political Reform Act (Government Code section 81000 et seq. DISCUSSION Staff has prepared a draft Conflict of Interest Code for consideration by the Board, which is attached. If approved by the Board, the Code must be forwarded to the Monterey County Board of Supervisors, which is the statutorily designated “Code Reviewing Body” pursuant to Section 82011 of the Government Code, for review and approval. FISCAL IMPACT None with the adoption of the Code. Transmission to the County for consideration will involve staff time and related expense. ATTACHMENT(S)

A – Draft Conflict of Interest Code B – Resolution

PREPARED BY: Leslie J. Girard Agency Counsel

MEETING DATE: November 9, 2017 AGENDA ITEM: 10 SUBJECT: RESOLUTION approving a Coordination Agreement between

Marina Coast Water District and SVBGSA RECOMMENDATION: It is recommended that the Board of Directors adopt a resolution approving a Coordination Agreement between Marina Coast Water District and SVBGSA. BACKGROUND Marina Coast Water District (MCWD) filed as a GSA with the Department of Water Resources for a portion of the area generally known as the Monterey Subbasin north and west of Highway 68. The question remains as to whether this is an acceptable filing under SGMA Legislation. However, a number of deadlines are pending associated with the development of Ground Water Sustainability Plans (GSPs) grant funding that require coordination between the two agencies until which time the Department of Water Resources rules on the jurisdictional matter. To that end SVBGSA Staff has worked with MCWD to create a coordination agreement that sets forth a plan to manage the Monterey Subbasin. This agreement is designed to work under a variety of scenarios and provide useful coordination between the two agencies. DISCUSSION Essentially the agreements designate MCWD as being responsible for submitting a grant application/proposal to DWR for a Category 2, Tier 2 Groundwater Sustainability Plan grant for the Monterey Subbasin. MCWD will continue to coordinate with SVBGSA and obtain input from SVBGSA in preparation of the grant application/proposal for the Monterey Subbasin. The agreement also allows that the SVBGSA shall be the Party responsible for submitting a grant application/proposal to DWR for a Category 2, Tier 1 Groundwater Sustainability Plan grant for the 180/400 Foot Aquifer Subbasin. SVBGSA shall be responsible for the cost of preparing the grant. SVBGSA will coordinate with MCWD and obtain input from MCWD in preparation of the grant application/proposal for the 180/400 Foot Aquifer Subbasin.

2

In order to accomplish this work a coordination committee including representatives from MCWD and SVBGSA shall be formed for each subbasin. Given the current view from the State Water Board, two scenarios are developed. a) If MCWD is allowed under SGMA to include the Ord Subarea within its Groundwater Sustainability Agency boundaries, MCWD shall manage the Marina and Ord Subareas as part of its GSA under the GSP. b) If MCWD is not allowed under SGMA to include the Ord Subarea within its Groundwater Sustainability Agency boundaries, the Ord Subarea may be designated by the SVBGSA as a Management Area within the boundaries of its GSA, and MCWD shall be allowed to manage the Ord Subarea under the GSP. Staff believes that this language provides for the flexibility needed to work out a management area with MCWD that allows them to manage the Ord Area for which they provide water service. Additionally this language provides the opportunity to negotiate the boundaries of the Coral De Tierra area in a manner that protects other interests.

FISCAL IMPACT None with the adoption of this agreement, though as we enter into GSP development there will be some cost, likely in matching funds to cover the SBVGSA portion of the Monterey Subbasin GSP. ATTACHMENT(S)

A – Coordination Agreement B – Resolution

PREPARED BY: Gary Petersen General Manager

PROPOSITION 1 Coordination Agreement

THIS PROPOSITION 1 COORDINATION AGREEMENT (the "Agreement") is made

effective as of November 9, 2017 by the Marina Coast Water District Groundwater Sustainability Agency (“MCWD”) and the Salinas Valley Basin Groundwater Sustainability Agency (“SVBGSA”) regarding proposals for Sustainable Groundwater Planning (“SGWP”) Grant Program funds, authorized by the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (“Proposition 1”) within the Monterey Subbasin and the 180/400 foot Subbasin, with reference to the following facts:

A. Eligibility criteria for Category 2 proposals for SGWP Grant Program funds, authorized

by Proposition 1, only accept one application per Basin/Subbasin; and B. An eligible agency may be part of the Proposition 1 application as a project

proponent, but must identify a single entity that will act as the grant applicant and submit a basin-wide application and receive the grant on behalf of the basin; and

C. If multiple applications are received within a basin for Category 2 projects, DWR will

contact the applicants and request that the Parties consolidate one single application for the basin to be submitted before the close of the open filing period; and

D. The applicant must include a Proposal level “Summary” highlighting each project

contained in the Proposal and must demonstrate that it encompasses the entire basin or describes why a portion of the basin is not covered in the Proposal.

E. Applicants requesting funding for Category 2 Proposition 1 application must provide

documentation of any communications with beneficial users of groundwater in the basin that may potentially be affected by implementation of the project, including, but not limited to DACs, SDACs, agricultural water users, municipal water users, wildlife refuges, or other stakeholders.

F. The Filing Period Closes November 13, 2017 for proposals for SGWP Grant Program

funds; and G. Proposition 1 requires a minimum cost share of 50% of the total project cost.

THEREFORE, in consideration of the facts recited above the Parties agree to the following with regards to Proposition 1 applications:

1. The Parties agree that MCWD shall be the Party responsible for submitting a grant

application/proposal to DWR for a Category 2, Tier 2 Groundwater Sustainability Plan grant for the Monterey Subbasin and MCWD shall be the grantee if the proposal is successful. MCWD shall be responsible for the cost of preparing the grant. MCWD will coordinate with SVBGSA and obtain input from SVBGSA in preparation of the grant application/proposal for the Monterey Subbasin.

2. The Parties further agree that SVBGSA shall be the Party responsible for submitting a grant application/proposal to DWR for a Category 2, Tier 1 Groundwater Sustainability Plan grant for the 180/400 Foot Aquifer Subbasin and SVBGSA shall be the grantee if the proposal is successful. SVBGSA shall be responsible for the cost of preparing the grant. SVBGSA will coordinate with MCWD and obtain input from MCWD in preparation of the grant application/proposal for the 180/400 Foot Aquifer Subbasin.

3. A coordination committee including representatives from MCWD and SVBGSA shall

be formed for each subbasin. 4. The parties agree that they shall share all data necessary to facilitate the completion

of the Proposition 1 applications/proposals. 5. The Proposition 1 application for the Monterey Subbasin will include:

a) A project for the preparation of the GSP by MCWD for the Marina Subarea and the Ord Subarea, as shown on attached Exhibit “A;” and

b) A project for the preparation of a GSP by SVBGSA for the Corral de Tierra

Subarea, also as shown on attached Exhibit “A”.

6. The Marina, Ord and Corral de Tierra subareas shall be managed as follows:

a) If MCWD is allowed under the Sustainable Groundwater Management Act (“SGMA”) to include the Ord Subarea within its Groundwater Sustainability Agency boundaries, MCWD shall manage the Marina and Ord Subareas as part of its GSA under the GSP described in Section 5 (a), above.

b) If MCWD is not allowed under SGMA to include the Ord Subarea within its

Groundwater Sustainability Agency boundaries, the Ord Subarea may be designated by the SVBGSA as a Management Area within the boundaries of its GSA, and MCWD shall be allowed to manage the Ord Subarea under the GSP described in Section 5 (a), above.

7. The projects for the Monterey Subbasin will include review and potential refinement

of the portion of the Salinas Valley Integrated Hydrologic Model (“SVIHM”) that addresses the Monterey Subbasin and nearby subbasins. SVIHM is being developed by the USGS for the County of Monterey, and will address the entire Salinas Valley Groundwater Basin.

8. MCWD will provide matching grant funds for development of its project, including

the GSP and for SVIHM model review and refinement for the Marina Subarea and Ord Subarea of the Monterey Subbasin, and SVBGSA will provide matching grant funds for development of its project. Notwithstanding anything to the contrary herein, in the event MCWD is prevented from including the Ord Subarea within its GSP or the SVBGSA elects to include the Ord Subarea within its own GSP for the Monterey Subbasin, then SVBGSA shall reimburse MCWD for any matching funds which MCWD has provided or expended proportionately for the Ord subarea after the effective date of this agreement, and SVBGSA shall be responsible for all matching funds applicable to the Ord Subarea for purposes of the SGWP Grant Program.

9. SVBGSA and MCWD may include additional project(s) in each other’s grant

applications for the Monterey and 180/400 Foot Aquifer Subbasins if they provide all required information in the appropriate format and demonstrate matching funds by an agreed upon timeframe. 10. The Parties acknowledge that the submission deadline for any Proposition 1 application is November 13, 2017. As such, the Parties agree to the following schedule for coordination of grant applications for the Monterey and 180/400 Foot Aquifer Subbasins:

Proposition 1 Applicant to share draft Proposition 1 application with other Party (10/20/2017)

Proposition 1 Applicant to receive feedback on Draft Proposition 1 application from other Party (by 10/27/2017)

Proposition 1 Applicant to obtain complete information from other Party for any independent Projects (for which other Party is providing matching funds) for inclusion in in Draft Proposition I application (10/27/2017)

Submit Prop 1 application to DWR by 11/13/2017

In the event either Party fails to provide any of the required information to the submitting Party by the identified dates, then this Agreement shall terminate and either Party may submit a Proposition 1 application on their own behalf, without regard to the other Party.

11. Assuming agreement is reached between the Parties regarding the Proposition 1 applications for the Monterey Subbasin and 180/400 Foot Aquifer Subbasin, the Parties will provide letters of support for each other’s Proposition 1 grant applications for the 180/400 Foot Aquifer Subbasin and the Monterey Subbasin by November 3, 2017.

Agreed and acknowledged on ____________, 2017, by the signatures below:

SALINAS VALLEY BASIN GROUNDWATER SUSTAINABILITY AGENCY By:_______________________ Title:______________________

MARINA COAST WATER DISTRICT GROUNDWATER SUSTAINABILITY AGENCY By:_______________________ Title:_____________________

APPROVED AS TO FORM: ______________________________ Leslie J. Girard SVBGSA Agency Counsel

APPROVED AS TO FORM: _____________________________ MCWD Agency Counsel



Resolution No.

Resolution approving a Coordination Agreement

between Marina Coast Water District and the

Salinas Valley Basin Ground Water Sustainability

Agency for the management of the Monterey

Subbasin.

)

)

)

WHEREAS, the Marina Coast Water District has filed with the Department of Water

Resources to become the Ground Water Sustainability Agency for the Monterey Subbasin; and,

WHEREAS, this filing has created the need for Marina Coast and the Salinas Valley

Basin to coordinate management activities in the Monterey Subbasin; and

WHEREAS, the Marina Coast Water District and the Salinas Valley Basin Ground Water

Sustainability Agency developed an agreement that is mutually acceptable for managing this

basin; and,

WHEREAS,the proposed Coordination agreement will allow for Grant Applications that

will fund Ground Water Sustainability planning in the subbasin; NOW, THEREFORE,


Sustainability Agency as follows:

The above recitals are true and correct.

The attached Coordination agreement between Marina Coast Water District and the Salinas

Valley Basin Ground Water Sustainability Agency is hereby approved.

The General Manager and Agency Counsel are hereby authorized and directed to take such other

and further actions as may be necessary or appropriate to implement the intent and purposes of

this resolution.

PASSED AND ADOPTED on this ___ day of ___________, ______, by the following vote, to-

wit:

AYES:

NOES:

ABSENT:

ABSTAIN:






1

DATE: November 9, 2017

AGENDA No: 11

FROM: Roberto Moreno, RGS Senior Advisor

SUBJECT: Approve Investment Policy

RECOMMENDATION Adopt Resolution Approving the Investment Policy

FISCAL IMPACT Approval of the Investment Policy has no impact of itself. Due to the current state of the economy investment returns are low. Investment earnings are not included in the Agency’s budget. Any investment earnings will assist with the Agency’s finances.

BACKGROUND In order to properly handle the Agency’s investments, the Board is asked to adopt the attached Investment Policy. California Government Code Section 53646(a) (2) states that the treasurer or chief fiscal officer of a local agency may render annually to the legislative body of the local agency an investment policy, which the legislative body shall consider at a public meeting. State law further requires the Treasurer or Chief Financial Officer to submit detailed information on all securities, investments, and monies of the Agency on a quarterly basis.

DISCUSSION & ANALYSIS This is the Agency’s first investment policy. The Investment Policy allows investment in all investment vehicles permitted by State law. However, in actual practice the funds managed by the Treasurer will for the most part be invested in a Money Market Account at Rabobank and in CalTrust. CalTRUST is a Joint Powers Authority created by public agencies in 2005 to provide a convenient method for public agencies to pool their assets for investment purposes. CalTRUST is governed by a Board of Trustees made up of experienced local agency treasurers and investment officers. The Board sets overall policies for the program and selects and supervises the activities of the investment manager and other agents.

ATTACHMENT(S)

A - Resolution Approving Investment Policy B – Investment Policy

Page 1 of 6



Resolution No.

Resolution adopting Investment Policy )


Sustainability Agency that the Investment Policy attached hereto as Exhibit A is approved.

PASSED AND ADOPTED on this 9th day of November, 2017, by the following vote, to-wit:

AYES:

NOES:

ABSENT:

ABSTAIN:






ATTACHMENTS:

Exhibit A – Investment Policy

Page 2 of 6

Exhibit A


INVESTMENT POLICY

PURPOSE

The purpose of this document is to identify various policies and procedures that enhance

opportunities for a prudent and systematic investment process and to organize and formalize

investment-related activities. Investments shall be made with judgment and care, under

circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise

in the management of their own affairs, not for speculation, but for investment, considering the

probable safety of their capital as well as the probable income to be derived. The ultimate goal is

to enhance the economic status of the Agency while protecting its invested cash.

The investment policies and practices of the Salinas Valley Basin Groundwater Sustainability

Agency are based on state law and prudent money management. All funds will be invested in

accordance with the Agency's Investment Policy and the authority governing investments for

local governments as set forth in the California Government Code, Sections 53601 through

53686. The provisions of relevant bond documents restrict the investments of bond proceeds.

OBJECTIVE

The Agency has a fiduciary responsibility to maximize the productive use of all the assets

entrusted to its care and to invest and wisely and prudently manage those public funds. As such,

the Agency shall strive to maintain the level of investment of all idle funds as near 100% as

possible through daily and projected cash flow determinations, investing in those investment

vehicles deemed prudent and allowable under current legislation of the State of California and

the ordinances and resolutions of the Salinas Valley Basin Groundwater Sustainability Agency.

SCOPE

It is intended that this policy cover all funds and investment activities of the Salinas Valley Basin

Groundwater Sustainability Agency. This investment policy applies to all Agency transactions

involving the financial assets and related activity of all funds. Any additional funds that may be

created from time to time shall also be administered with the provisions of this policy and

comply with current State Government Code.

The Agency will consolidate cash and reserve balances from all funds to maximize investment

earnings and to increase efficiencies with regard to investment pricing, safekeeping, and

administration. Investment income will be allocated to the various funds based on their

respective participation and in accordance with generally accepted accounting principles.

AUTHORIZATION

The Board of Directors has delegated investment authority to the Treasurer. This delegation is

further authorized by Section 53600, et seq. of the Government Code of the State of California,

Page 3 of 6

which specifies the various permissible investment vehicles, collateralization levels, portfolio

limits, and reporting requirements.

GUIDELINES

Government Code Section 53600.5 states: “When investing, reinvesting, purchasing, acquiring,

exchanging, selling and managing public funds, the primary objective of the trustee shall be to

safeguard the principal of funds under its control. The secondary objective shall be to meet the

liquidity needs of the depositor. The third objective shall be to achieve a return on the funds

under its control.”

Simply stated, safety of principal is the foremost objective, followed by liquidity and return on

investment (known as yield). Each investment transaction shall seek to first ensure that capital

losses are avoided, whether they are from market erosion or security defaults.

1. Government Code Section 53601 authorizes the following investment vehicles:

Maximum Minimum

Percentages of Maximum Quality

Permitted Investments/Deposits Portfolio Maturity Requirements

U.S. Treasury Obligations Unlimited 5 Years* None

U.S. Agencies Obligations (g) Unlimited 5 Years* None

Certificates of Deposit Unlimited 5 Years* None

Negotiable Certificates 30% 5 Years* None

Bankers Acceptances 40%b 180 Days None

Commercial Paper 25%c 270 Days A-1/P-1/F-1

L.A.I.F. 40 Milliona N/A None

CalTRUST Investment Pool (h) Unlimited N/A None

Repurchase Agreements Unlimited 1 Year None

Reverse Repurchase Agreements 20% 92 Days None

Mutual Funds and Money Market

Mutual Funds 20% n/a Multipled,e

Medium Term Notesf 30% 5 Years* “A” rating

*Maximum term unless expressly authorized by Governing Body and within the

prescribed time frame for said approval

(a) Limit set by LAIF Governing Board, not the Government Code.

(b) No more than 30 percent of the agency’s money may be in Bankers’ Acceptances of

any one commercial bank.

(c) 10 percent of the outstanding commercial paper of any single corporate issuer.

(d) A mutual fund must receive the highest ranking by not less than two nationally

recognized rating agencies or the fund must retain an investment advisor who is

registered with the SEC (or exempt from registration), has assets under management in

Page 4 of 6

excess of $500 million, and has at least five years’ experience investing in instruments

authorized by Government Code sections 53601 and 53635.

(e) A money market mutual fund must receive the highest ranking by not less than two

nationally recognized statistical rating organizations or retain an investment advisor

registered with the SEC or exempt from registration and who has not less than five years’

experience investing in money market instruments with assets under management in

excess of $500 million.

(f) “Medium-term notes” are defined n Government Code Section 53601 as “all

corporate and depository institution debt securities with a maximum remaining maturity

of five years or less, issued by corporations organized and operating with the U.S. or by

depository institutions licensed by the U.S. or any state and operating within the U.S.”

(g) Includes U.S. Government Sponsored Enterprise Obligations

(h) Investment Trust of California dba CalTRUST

2. Criteria for selecting investments, and the order of priority, are:

A) Safety. The safety and risk associated with an investment refers to the potential loss

of principal, interest or a combination of these amounts. Investments of the Salinas

Valley Basin Groundwater Sustainability Agency shall be undertaken in a manner

that seeks to ensure the preservation of capital in the overall portfolio. To attain this

objective, diversification is required in order that potential losses on individual

securities do not exceed the income generated from the remainder of the portfolio.

The Agency only invests in those instruments that are considered very safe.

B) Liquidity. This refers to the ability to "cash in" at any moment with a minimal

chance of losing some portion of principal or interest. Liquidity is an important

investment quality especially when the unexpected need for funds occurs. The

Salinas Valley Basin Groundwater Sustainability Agency investment portfolio will

remain sufficiently liquid to enable the Agency to meet all operating requirements,

which might be reasonably anticipated. It is the Agency's full intent, at the time of

purchase, to hold all investments until maturity to ensure the return of all invested

principal dollars.

C) Yield. Yield is the potential dollar earnings an investment can provide, and

sometimes is described as the rate of return. The Salinas Valley Basin Groundwater

Sustainability Agency investment portfolio shall be designed with the objective of

attaining a market rate of return throughout budgetary and economic cycles, taking

into account the Agency's investment risk constraints and the cash flow

characteristics of the portfolio.

3. An amount of money deemed sufficient to meet one payroll and two weeks claims shall be

maintained in highly liquid investment vehicles such as the State Local Agency Investment

Fund, or other similar investment instrument.

Page 5 of 6

4. The Agency will attempt to obtain the highest yield obtainable when selecting investments,

provided that criteria for safety and liquidity are met. Ordinarily, through a positive yield

curve, (i.e., longer term investment rates are higher than those of shorter maturities), the

Agency attempts to ladder its maturities to meet anticipated cash maturities that carry a

higher rate than is available in the extremely short market of 30 days or less.

5. Most investments are highly liquid, with the exception of certificates of deposit held by

banks and savings and loans. Investments in Certificate of Deposit shall be fully insured or

collateralized. When insurance is pledged, it shall be through the FDIC. Collateralization

shall be in the amount of 110% of principal when government securities are pledged or 150%

of principal when backed by first deeds of trust. Maturities are selected to anticipate cash

needs, thereby obviating the need for forced liquidation.

6. When investing in Bankers Acceptances, Treasury Bills and Notes, Government Agency

Securities and Commercial Paper, securities for these investments shall be conducted on a

delivery-versus-payment basis. Securities are held by a third party custodian designated by

the Treasurer and evidenced by safekeeping receipts when such delivery directly to the

Agency would be impractical.

7. With the exception of Treasury Notes and other government Agency Issues, the maturity of

any given investment shall not exceed 1 year.

8. Bond Proceeds shall include any notes, bonds or other instruments issued on behalf of the

Salinas Valley Basin Groundwater Sustainability Agency for which the members of the

Board of Directors serve as the governing body. Should the Salinas Valley Basin

Groundwater Sustainability Agency elect to issue bonds for any purpose, the Indenture of

Trust shall be the governing document specifying allowable investments for the proceeds of

the issue as prescribed by law.

9. Investment income shall be shared by all funds on a proportionate ratio of each funds balance

to total pooled cash with investment income distributed accordingly on a quarterly basis.

10. Investments in any other vehicle like Repurchase and Reverse Repurchase Agreements shall

not be authorized unless the investment is made through the pooled money portfolio of the

Local Agency Investment Fund or CalTrust.

11. The Treasurer shall annually render to the Board of Directors for consideration at a public

meeting, a statement of investment policy. The Treasurer will also render an investment

report to the Board of Directors within 30 days following the end of each calendar quarter.

The monthly report shall include type of investment, issuer, date of maturity, par and dollar

amount invested on all securities, investments and monies held by the Salinas Valley Basin

Groundwater Sustainability Agency. The report shall state compliance with the investment

policy or manner in which the portfolio in not in compliance. It shall also include a

statement denoting the ability to meet the Agency's expenditure requirement for the next six

months or provide an explanation as to why sufficient money shall, or may, not be available.

12. Any State of California legislative action, that further restricts allowable maturities,

investment type or percentage allocations, will be incorporated into the Salinas Valley Basin

Page 6 of 6

Groundwater Sustainability Agency Investment Policy and supersede any and all previous

language.

13. Officers and employees involved in the investment process shall refrain from personal

business activities that could conflict with proper execution of the investment program, or

that could impair their ability to make impartial decisions.

The basic premises underlying the Agency's investment philosophy are, and will continue to be,

to safeguard principal, to meet the liquidity needs of the organization and to return an acceptable

yield.

November 9, 2017

1

MEETING DATE: November 9, 2017 AGENDA ITEM: 14 SUBJECT: Future Agenda Items Following is a list of items tentatively scheduled for future meetings looking ahead 6 months.

December January February March April May

Educational Presentation






Approve Purchasing Policy

Presentation on Brown Act

Receive FY 18-19 Budget

Presentation on Conflict of Interest

Approve FY 2018-19 Budget

Approve RGS Agreement for FY 18-19

Monthly Finance Report






Approve Investment Policy

Status Report of RGS Tasks



CALIFORNIA

Water Boards

EDMUND G. BROWN JR. GOVERNOR

MA-TTKEVV RODRIQUEZ SECRETARY FOR ENVIRONMENTAL PROTECTION

State Water Resources Control Board

NOV 0 2 2017

[all via mail and email] Gary Peterson Interim General Manager Salinas Valley Basin Groundwater Sustainability Agency 200 Lincoln Ave. Salinas, CA 93901 [email protected]

Keith Van Der Maaten General Manager Marina Coast Water District 11 Reservation Road Marina, CA 93933 kvandermaatenmcwd.orq

Dear Messrs. and Mses.:

Mary F. Lerner, Esq. Attorney at Law Lozano Smith 7404 N Spalding Ave. Fresno, CA 93720 mlernerlozanosmith.com

Pamela H. Silkwood, Esq. Horan Lloyd Professional Corporation 26385 Carmel Rancho Blvd., Suite 200 Carmel, CA 93923 psilkwoodhoranlegal.com

RE: SUSTAINABLE GROUNDWATER MANAGEMENT IN THE SALINAS VALLEY BASIN.

I am in receipt of your letters regarding the formation of groundwater sustainability agencies (GSAs) in the Salinas Valley Basin pursuant to the Sustainable Groundwater Management Act, Water Code section 10720, et seq. (SGMA): letter dated June 9, 2017, on behalf of the Salinas Valley Basin Groundwater Sustainability Agency (SVB GSA); letter dated June 9, 2017, on behalf of the Clark Colony Mutual Water Company and Upper Valley Association; letter dated June 15, 2017, on behalf of the Marina Coast Water District; and, letter dated June 22, 2017, on behalf of the City of Greenfield. I understand that staff of the State Water Resources Control Board (State Water Board) met with representatives from the Marina Coast Water District on May 23; representatives from the City of Greenfield and Clark Colony Water Company on June 12 and June 21; and representatives from the San Lucas County Water District, the City of Greenfield and Clark Colony Water Company on July 6, of this year.

As noted in several of your letters, SGMA intends that sustainable groundwater management be achieved locally. The State Water Board has a limited role under SGMA, and will intervene in a basin "only when necessary to ensure that local agencies manage groundwater in a sustainable manner." (Wat. Code, § 10720.1, subd. (h).) By way of this letter, I would like to encourage local resolution of the conflicts over groundwater management in Salinas Valley. In furtherance of that end, I have included legal analysis developed by my staff to provide transparency as to the State Water Board's understanding of SGMA as applied to the Salinas Valley.

FELICIA MARCUS, CHAIR I EILEEN SOBECK, EXECUTIVE DIRECTOR

1001 I Street, Sacramento, CA 95814 J

Mailing Address: P.O. Box 100, Sacramento, CA 95812-0100 i www.waterboards.ca.gov

CA RECYCLED PAPER

NOV 0 2 2011 -2

These opinions are not a declaratory decision and do not bind the State Water Board in any future determination.

May the Marina Coast Water District (Marina Coast) act as a GSA over an area outside its jurisdictional boundaries?

This question was addressed by letter dated April 12, 2017, to Mr. Leslie Girard, Chief Assistant County Counsel, from Mr. Sam Boland -Brien, Chief of the Groundwater Management Program at the State Water Board. The position of the State Water Board remains the same as expressed in Mr. Boland-Brien's letter.

SGMA states that the Act does not grant authority to any agency to impose regulatory requirements or fees on activities outside of its jurisdictional boundaries. (Wat. Code, § 10726.8, subd. (b).) Although any local agency or combination of local agencies overlying a groundwater basin may decide to become a GSA for that basin (Wat. Code, § 10723, subd. (a)), a local agency cannot undertake groundwater management outside of its jurisdictional boundaries because the agency lacks the authority to regulate. As a result, if two local agencies file GSA notices for an area over which only one of the agencies has jurisdiction, there is no overlap in

areas proposed to be managed pursuant to Water Code section 10723.8, subdivision (c).

It is my understanding that the jurisdictional boundaries of Marina Coast overlay a portion of the Monterey Subbasin. Marina Coast also provides water and sewer services to lands outside of its jurisdictional boundaries within the Fort Ord area. The State Water Board does not consider the notice posted by Marina Coast on March 14, 2017, to overlap the SVB GSA notice because Marina Coast cannot undertake groundwater management in the Fort Ord area. If Marina Coast were to expand its jurisdictional boundaries through annexation to include the Fort Ord area, Marina Coast could become the exclusive GSA for the Fort Ord area upon withdrawal of the SVB GSA.

May the Arroyo Seco Groundwater Sustainability Agency, an entity formed by the City of Greenfield and the Clark Colony Mutual Water Company, act as a GSA over the area served by the mutual water company but outside the jurisdiction of the city?

A local agency and a mutual water company can create a GSA through a memorandum of agreement (MOA) or other legal agreement. The GSA so created will have the authority to undertake groundwater management only within the jurisdictional boundaries of the local agency. SGMA does not grant authority to any agency to impose regulatory requirements or fees on activities outside of its jurisdictional boundaries. (Wat. Code, § 10726.8, subd. (b).) A mutual water company may participate in a GSA, (Wat. Code, § 10723.6, subd. (b)), but a

mutual water company is not a local agency, does not have regulatory authority or jurisdictional boundaries, and cannot undertake groundwater management pursuant to SGMA. Therefore, a

local agency cannot undertake groundwater management outside of its jurisdictional boundaries through a legal agreement with a mutual water company.

The State Water Board does not consider the notice posted by the Arroyo Seco GSA to overlap the SVB GSA notification because the Arroyo Seco GSA cannot undertake groundwater management outside of the City of Greenfield.

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May -the San Lucas Water Dtstrict act -as a GSA over an area outside its jurisdictional boundaries?

As described above, SGMA does not grant authority to any agency to impose regulatory requirements or fees on activities outside of its jurisdictional boundaries. (Wat. Code, § 10726.8, subd. (b).) San Lucas Water District cannot undertake groundwater management under SGMA outside of its jurisdictional boundaries. To the extent that the notice filed by San Lucas Water District includes areas over which the District does not have jurisdiction, there will be no overlap with another local agency in the areas proposed to be managed pursuant to Water Code section 10723.8, subdivision (c).

Based on this legal analysis, there are no overlapping notices of intent to manage groundwater within the Salinas Valley. As a result, the Board considers the entire Valley to be managed and not subject to reporting requirements under Water Code section 5202, subdivision (a)(2). Because there are multiple GSAs in the basins in Salinas Valley, however, cooperation and coordination amongst the GSAs will be necessary to avoid probationary status. Where there are multiple GSAs in a basin, the GSAs must "prepare[] agreements to develop one or more groundwater sustainability plans that will collectively serve as a groundwater sustainability plan for the entire basin." (Wat. Code, § 10735.2, subd. (a)(1)(B).) If there are multiple plans in a basin, the plans must be "coordinated pursuant to a single coordination agreement that covers the entire basin." (Wat. Code, § 10727.) "[GSAs] intending to develop and implement multiple groundwater sustainability plans shall coordinate with other agencies preparing a groundwater sustainability plan within the basin to ensure that the plans utilize the same data and methodologies ...." (Wat. Code, § 10727.6.) The State Water Board may consider probationary designation if adequate coordination agreements are not adopted within a basin.

What are the roles of the Department of Water Resources and the State Water Board in reviewing notices of intent?

Several of the letters that I received assert that the Department of Water Resources (DWR) determines whether a local agency has properly become or formed a GSA by posting the local agency's notice of intent to the DWR website. The posting of notices by DWR is based solely on a determination that the notice submitted to DWR is complete. The posting is not a determination as to the validity of the agency's intent to manage groundwater in a particular area. In contrast to DWR's ministerial role, the State Water Board must consider agencies' notices of intent for purposes of implementing and enforcing Water Code section 5202, which requires persons who extract groundwater within a high- or medium -priority basin that is "not within the management area of a GSA" to file an annual report of groundwater extraction. (Wat. Code, § 5202, subd. (a)(2).) The Board will determine whether an area is "not within the management area of a GSA" on a case -by -case basis through the issuance of invoices for reporting fees or through enforcement actions for failure to file a required report. (Ibid.) These determinations will occur after the reporting deadline on December 15, 2017, for groundwater extractions made during the previous water year.

I appreciate the challenges of establishing an effective governance structure for sustainable groundwater management in the absence of clear precedent interpreting SGMA's requirements and grants of authority. This letter is intended to provide clarity as to the State Water Board's understanding of these issues to assist in your efforts. These opinions are merely advisory and provided for your information.

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If you have additional questions, please contact Nicole Kuenzi, Office of Chief Counsel, State Water Board, at Nicole.Kuenziwaterboards.ca.qov, (916) 322-4142.

Michael A.M. Lau er Chief Counsel

cc: [via email only] Samuel Boland -Brien, Sr. Engineer State Water Resources Control Board 1001 I Street, 13th Floor Sacramento, CA 95814 Samuel.Boland-Brienwaterboards.ca.qov

[via email only] Kevin O'Brien, Esq. Downey Brand LLP 621 Capitol Mall Fl 18 Sacramento, CA 95814-4731 kobrien(@,downevbrand.com

[via email only] Jessica Bean State Water Resources Control Board 1001 I Street, 13th Floor Sacramento, CA 95814 Jessica.Beanwaterboards.ca.qov

[via email only] Leslie Girard, Esq. County Counsel's Office/Monterey County 168 W Alisal St 3rd Fl

Salinas, CA 93901 qirandlaco.monterey.ca.us

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