Supplemental Information (2) for Item 1

Following the June 17 Doheny Desal Participants meeting, I had received an inquiry
regarding the action taken and clarification of the action taken. I had MWDOC Legal
Counsel outline what had occurred at the meeting of June 17 and provide his input in an
email to me. His informal discussion via email, which was sent out to the Participant’s by
me was as follows:
MWDOC Attorney Email Communication to Karl Seckel Regarding the Doheny
Participants Action Taken on June 17
“As we discussed, you asked me to take a quick look at the action taken last Monday
by the Doheny Desal Participants’ Committee in light of both the Participants'
Agreement and the project status. I attended the meeting on behalf of MWDOC. It
was a long meeting, and the Committee spent a considerable amount of time
discussing its options for obtaining some of the MET Foundational Action Funding
Program grant money. Ultimately, the Committee voted to authorize MWDOC staff
to prepare and submit an FAF proposal based on $100,000 in local match funding
from the Doheny Desal group for tasks to be identified by MWDOC from the list of
tasks provided at the meeting. This action at this time was driven in part by a time
deadline for MWDOC’s submission to MET. A good deal of the discussion was
about the source of the local match funding being money already in existing funds.
Some members of the Committee stated prior to voting that their ability to approve
the action depended on the fact that this was money already committed to the desal
project, while others indicated they would request review by their governing bodies.
Either way, a final authorization on an expenditure was not a prerequisite for an
action to authorize submission of a grant application.
The Agency Participation Agreement is not overly detailed and includes a fairly
broad description of "Phase 3 Work" (§ 1.2). For this reason, I do not see an
immediate need to identify whether the work proposed for FAF funding is within the
current Phase 3 Work or requires a new agreement that will establish a scope for
“Phase 4” work. The work that will be selected for the grant application, and the
funding itself, is still a ways off. A central issue in considering the action taken
Monday is the authority of the Committee to take it. However you look at the current
"Phase" of the project and the status of the Participants’ Agreement, it is difficult to
conclude that no authority existed. The action was taken by a Committee that exists
because of the Participants’ Agreement; the Agreement focused on Phase 3 but also
contemplated taking the project beyond Phase 3. Clearly the Committee has a role
to play in the transition from Phase 3 to whatever the future has in store for the
project. As the Participants have discussed, that role may soon be defined further in
a “close-out agreement” or a “Phase 4” agreement, but for now only the Participants’
Agreement governs the Participants’ actions.
Since the action Monday did not irrevocably commit funds to a particular project, but
only authorized the submission of an application for funding, I do not believe it was
outside the Participants’ authority under the Agreement. Those are just my
thoughts, and counsel for the other agencies may well reach a different conclusion.
Between now and the time a grant agreement with MET is under consideration, a lot
will need to happen. The authorization Monday had limited reach and was
necessary to get the process going with MET. Assuming the grant application is
2