MINUTES OF THE BOARD OF DIRECTORS ZONE 7 ALAMEDA COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT. REGULAR MEETING November 14, 2018

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1 ALAMEDA COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT, ZONE NORTH CANYONS PARKWAY LIVERMORE, CA PHONE (925) FAX (925) MINUTES OF THE BOARD OF DIRECTORS ZONE 7 ALAMEDA COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT The following were present: REGULAR MEETING November 14, 2018 DIRECTORS: DENNIS GAMBS SARAH PALMER RICHARD QUIGLEY ANGELA RAMIREZ HOLMES OLIVIA SANWONG BILL STEVENS DIRECTORS ABSENT: SANDS FIGUERS ZONE 7 STAFF: COUNSEL: VALERIE PRYOR, GENERAL MANAGER OSBORN SOLITEI, TREASURER/ASSISTANT GENERAL MANAGER, FINANCE CAROL MAHONEY, INTEGRATED WATER RESOURCES MANAGER COLTER ANDERSEN, PRODUCTION MANAGER RHETT ALZONA, PRINCIPAL ENGINEER, FACILITIES ENGINEERING AMPARO FLORES, PRINCIPAL ENGINEER, INTEGRATED PLANNING WES MERCADO, ASSOCIATE ENGINEER, INTEGRATED PLANNING AMANDA ROGERS, ACTING EXECUTIVE ASSISTANT DAVID ALADJEM, DOWNEY BRAND Item 1 - Call Meeting to Order President Ramirez Holmes called the meeting to order at 6:30 p.m. and the Board went into Closed Session immediately. Item 2 Closed Session (a) Conference with Labor Negotiators pursuant to Government Code section : Agency Negotiator: Valerie Pryor Employee Organizations: Alameda County Management Employees Association; Alameda County Building and Construction Trades Council, Local 342, AFL-CIO; International Federation of Professional and Technical Engineers, Local 21, AFL-CIO; Local 1021 of the Service Employees International Union, CTW; Unrepresented Management (b) Conference with Legal Counsel - Existing litigation pursuant to Government Code (d)(1): 1 case (1) Edwin Belshe and Ginger Belshe v. Alameda County Flood Control and Water Conservation District, Zone 7, et al., Alameda County Superior Court Case No. RG P a g e

2 (c) Conference with Legal Counsel - Potential litigation pursuant to Gov t Code section (d) (4): 1 case (d) Conference with Legal Counsel - Potential litigation pursuant to Gov t Code section (d) (2): 1 case Item 3 Open Session and Pledge of Allegiance President Ramirez Holmes called the meeting back into session at 7:05 p.m. and led the Salute to the Flag. Item 4 Report Out of Closed Session President Ramirez Holmes announced that due to a communications mix up with the Board meeting date change, tonight s meeting would not be televised. One item was reported out of closed session. The authorization of payment pursuant to the International Federation of Professional and Technical Engineers Representation Unit 16 and 60 MOU, Sideletter of Agreement, authorizing and directing the General Manager to pay a $2,500 one-time lump-sum payment that was negotiated between the County and IFPTE Representation Units 16 & 60 in exchange for an increased payment for medical insurance. Director Quigley moved to approve the item. Director Palmer seconded the motion. The item passed with a roll call vote of 6-0, with Director Figuers absent. Resolution No Authorization of Payments Pursuant to the International Federation of Professional and Technical Engineers (IFPTE) Representation Unit 16 & 60 MOU, Sideletter of Agreement Item 5 Citizen s Forum There were no public comments. Item 6 Minutes of the Regular Board Meeting of October 17, 2018 A redlined version of the minutes was handed out showing proposed changes by Director Palmer. President Ramirez Holmes suggested the draft with the proposed changes be accepted, and she had one additional change on page 7, second to the last paragraph, first sentence. The word determined was missing. The sentence should read, President Ramirez said the six positions are a placeholder but not really determined because you re still reviewing what will come online and is needed in the budget. Director Quigley moved that the minutes of October 17, 2018, be accepted and approved with the proposed changes, and Director Stevens seconded the motion. The minutes were approved by a voice vote of 6-0, with Director Figuers absent. Item 7- Consent Calendar a. Contract Amendment for the PPWTP Upgrades and Ozonation Project 2 P a g e

3 Director Stevens moved to approve Item 7a. Director Quigley seconded the motion. The items passed with a roll call vote of 6-0, with Director Figuers absent. Resolution No Contract Amendment for the PPWTP Upgrades and Ozonation Project (Item 7a) Item 8a Employee of the Month Ms. Pryor, General Manager, announced that Dane Wilkins, Instrumentation Technician I, has been selected as the Employee of the Month for September Mr. Wilkins joined Zone 7 in May 2016 after completing one year as an apprentice technician at the San Francisco Public Utilities Commission and has Associate s degrees in instrumentation and electrical technology from Los Medanos College. He has been instrumental in keeping Zone 7 s equipment operational, is very knowledgeable, and willing to help others with the heavy workload. He s able to work with minimal oversight and is eager to learn. Overall, he s been greatly beneficial to the Agency. The Board congratulated and applauded Mr. Wilkins in absentia. Item 9 DVWTP Ozonation Project Quarterly Progress Presentation President Ramirez Holmes stated that there is no staff report for Item 9. She requested that it be noted on future agendas when there is no staff report. Rhett Alzona, Principal Engineer, Facilities Engineering, gave a presentation on the status of the Del Valle Water Treatment Plant Ozonation Project. He said construction was progressing well. The budget is on track and there are no big issues or risks. Change orders are under control as well. They re targeting to get the electrical work done during the plant shutdown in December, but cautioned that they are still trying to coordinate with PG&E on the electrical facilities installs. In response to Director Gambs inquiry about changes made to the Patterson Pass Ozonation Project because of the challenges connecting PG&E at the Del Valle plant, Mr. Alzona replied that they didn t want to wait on PG&E coordination, which held up a considerable amount of electrical facility construction work at DVWTP that would need to be done during a plant shutdown. Now they are designing a parallel service (trenching new conduits to a new transformer pad into the electrical building) while keeping the existing PG&E service in operation. This means that the contractor will only need to work with PG&E on a more manageable short section of the electrical system during the plant shutdown. The plant will be more reliable and efficient by shortening the work during the plant shutdown and having the existing service in operation for a longer period of time. He said this alternative is probably more cost effective since it would avoid potential coordination delay costs and the costs of running a temporary generator. Directed Sanwong suggested emphasizing the taste and odor benefits as well as the fact that the project was debt financed when messaging the project to the public. Item WSE Update: Preliminary Findings Ms. Pryor gave some background on this project. She said that an update of the Water Supply Evaluation would help inform decisions with regard to where we are with demand, new conservation 3 P a g e

4 legislation, and current water supply reliability and would help the Board to evaluate future commitments to projects such as the Los Vaqueros Reservoir Expansion and Sites Reservoir. It is now anticipated that the decisions for the prior two projects would be continuing planning and design for one more year and deferring the major commitments to a following year. As a result, this report is less critical but is still important. Mr. Wes Mercado gave a presentation covering Zone 7 s water demand forecasts, including the West Yost demand study; Zone 7 s reliability policy; the Los Vaqueros Reservoir expansion as a water storage project; and various portfolios of new water supply projects such as the California WaterFix, potable reuse, Sites Reservoir, regional brackish water desalination, and short-term transfers. A key finding is that a diversified portfolio with multiple new water supply projects will be needed due to the decreased reliability of the State Water Project. The risk model shows that Los Vaqueros is of limited benefit as emergency storage, although other expected operational benefits may not be adequately captured by the risk model. In the interim, steady annual transfers (5,000-10,000 acre-feet per year or AFY) are needed to meet Zone 7 s reliability goals. There was discussion regarding the demand assumptions and the West Yost study. In response to Director Sanwong s questions, Mr. Mercado replied that the Agency hired West Yost to do the study and preliminary results were received last month from them. Director Palmer suggested putting dates on any updates in the future in order to be able to know how recent they are. President Ramirez Holmes and Director Quigley asked where the indoor residential water-use data in West Yost s study came from. Mr. Mercado replied that all the data used in the study was from the retailers. Ms. Pryor explained that the retailers are required to report water-use data to the State Water Resources Control Board and it is publicly available. President Ramirez Holmes questioned the long-term projection of 5,000 AFY reduction in water demand at buildout despite population growth. Mr. Mercado stated that while recent water efficiency legislation makes that projection feasible, the possibility that there may be higher actual demands in the future is also being considered. This is why it is important to continue to monitor actual trends in demands. In response to Director Gambs question about the status of other agencies Los Vaqueros evaluation, Ms. Pryor replied that a number of agencies are potentially participating in Los Vaqueros. Contra Costa Water District is putting out preliminary cost estimates right now and the various agencies are reviewing those numbers. Decisions will likely happen over the next few months. Director Quigley asked if water quality benefits have been considered when examining these projects. Ms. Pryor replied that the water supply risk model is not necessarily showing a direct quantitative water supply benefit, but there are a lot of qualitative benefits such as operational flexibility, which may give Zone 7 more opportunities for transfers and exchanges. Water quality improvement is another potential qualitative benefit. President Ramirez Holmes asked if the Los Vaqueros project was being considered only with the pipeline being built or by using Delta transfers or exchanges to get the water. Mr. Mercado replied that the primary benefit of Los Vaqueros is the ability to reduce the impacts of Delta outage situations, which Delta exchanges would be vulnerable to. President Ramirez Holmes asked if there was the potential to phase in the pipeline. Ms. Pryor replied that we are reviewing that with the various participants. The cost allocation of the project is currently based on proportional use of the different project components being constructed. 4 P a g e

5 Director Gambs noted that an intertie with the Mokelumne Aqueduct should be considered. President Ramirez Holmes responded that this would not have Prop 1 funding, which is critical. Dr. Flores added that Zone 7 s CIP contains a reliability intertie with East Bay MUD that would connect through the west side of Zone 7 s transmission system. Director Stevens requested cost per acre-foot (AF) information for each project in future presentations because that may be the factor that determines Board decisions. Ms. Pryor replied that can be done and there is some cost information in a later slide as well. Director Sanwong, referring to slide 22, suggested adding another column describing how the projects might help manage risk so that the Board is not discarding projects solely based on cost. Director Quigley asked if the Los Vaqueros expansion cost estimate of $2,050/AF came from Contra Costa Water District. Ms. Pryor answered that it is a preliminary estimate based on Contra Costa Water District s analysis of the cost shares for various participants but these estimates are still being refined. Director Gambs, referring to the $700 to $1,000/AF of Sites Reservoir water, asked if that number represents 5,000 to 10,000 acre-feet, which is an average yield, or is it double that amount, which could double the unit cost of dollars per acre-foot. Ms. Pryor replied that costs are based on yield, so total cost is divided by total supply to get the cost per acre-foot. Multi-year cash flows must be looked at because if one project is financed over 20 years and one is financed over 40 years, they have different financial impacts. In response to Director Stevens comment that it appears Zone 7 will not be able to meet our reliability goals until 2030/2035, Mr. Mercado answered that steady annual transfers are going to be needed in the interim. Meeting the 99% reliability goal will require large interim transfers up to 10,000 AFY. Multiple new water supply reliability projects will be needed and a diversified portfolio will be best for reliability. The West Yost demand study shows the potential for further demand reductions of an additional 5,000 AFY on average at build out, but that must be weighed against the risk of underestimating demand. The risk model showed that using Los Vaqueros as emergency storage is of limited benefit, but there are benefits from increased operational flexibility, particularly on a monthly time scale, which the risk model cannot account for. Director Stevens suggested revisiting the reliability policy and asked if it will be discussed with the retailers. Ms. Pryor replied that discussion has not happened, however, there has been some discussion in the past about other metrics. The finding now is that we need to pursue multiple projects. Director Stevens raised concerns that the public will not understand if we have to raise water rates in order to meet our 99% exceedance reliability policy. Costs will rise and until the major projects are built in 2020 or 2030, we will be relying on transfers. We also need to have total buy-in from the retailers. Director Gambs added that Pleasanton and DSRSD have water supply reliability goals and suggested that staff check those; he also suggested that Zone 7 needs about 15,000 AFY of new supplies. Mr. Mercado replied that because of the differences in the availability of supplies during various hydrologic conditions, the answer is not straightforward; Zone 7 may need less than 15,000 AF if more supplies are available during dry years when the need is greatest. President Ramirez Holmes asked if the annual transfer costs in the interim include storage. Ms. Pryor replied no, it would be for purchasing transfer water. President Ramirez Holmes commented that it is very expensive. Ms. Pryor stated that it would likely be transfers of State Water Project water. We are 5 P a g e

6 trying to partner with other Bay Area contractors. With State Water Project transfers, the costs are based on the contractual cost for the water, so Bay Area contractors would have a lower cost than if we were transferring water from Southern California. Director Quigley thanked staff for the presentation and said it is one of the best water supply evaluations he has heard in his years on the Board. He suggested dovetailing the graph on page six with the preliminary draft cost estimates to make it more educational for the Board and the public. Director Gambs asked if there was an estimate for the split between how much of the new supplies is needed for existing customers versus new customers. Ms. Pryor replied that the last connection fee study showed Sites Reservoir and the South Bay Aqueduct enlargement as 100% allocated to growth, while the reliability projects are allocated to water rates. Director Stevens disagreed with the approach because he felt it would throw Zone 7 into the political war on growth. He felt we need to let the cities decide growth policies. Zone 7 s job is simply to supply the water requested by the cities to build out. It shouldn t matter if they are new or existing customers. President Ramirez Holmes responded that, in general, new housing is more water efficient because of small lots, while multifamily housing has little outdoor landscaping. Because of that, dividing costs between new and existing customers doesn t matter. She felt that a growth war is not something we want to encourage. Director Gambs disagreed and said there is not going to be an argument either way as long as we stick to allocating the cost to the customer that is benefiting. It is not an issue of growth or no growth. Director Gambs said that he wanted confirmation that we can use the State Water Project facilities, the tunnels, and the South Bay Aqueduct in the future to convey Sites Reservoir water to our treatment plants. Ms. Pryor responded that the Sites JPA (Joint Powers Authority) and Reservoir Committee are evaluating this and discussing with DWR, and this effort will be part of the next phase of the Sites Reservoir project over the next four years. Director Gambs emphasized the importance of the Chain of Lakes for recharging the groundwater basin to the whole water supply picture. He wondered why it was not mentioned in the presentation. He would like to see more emphasis on that in future discussions. Director Quigley agreed and felt it was important to include the Chain of Lakes because we are dependent on the groundwater basin as a water source. President Ramirez Holmes asked if that was in the existing CIP (Capital Improvement Program). Director Stevens also agreed about the need to recharge the groundwater. He felt that because the Chain of Lakes will help reduce our risk, we should think about getting the Chain of Lakes before He cautioned about classifying groundwater as a water source since it is stored surface water from other supplies. Dr. Flores replied that even though they were not specifically included in the list of projects, the diversion structures in the Chain of Lakes are included in the CIP, and the groundwater basin recharge is included in the water supply risk model. Director Gambs commented on the need for diversifying our water supply. We currently have about 80% Delta water and 20% local water from the watershed. The challenge with the Delta is that it is subject to hydrologic variability, regulatory constraints, and legal challenges. This makes it hard to apply a true cost on it but it does speak to the advantage of potable reuse, which we know is more expensive. President Ramirez Holmes asked for public comment. 6 P a g e

7 Dan McIntyre, General Manager for Dublin San Ramon Services District, noted that it is clear that one new water supply project is not enough. Two or more projects will be required and the more diversification, the better. Local control is better in terms of our water supply and sustainability and we should keep all of our options open. He notes that all of these projects are going to be expensive but they are reasonable investments. He said that some influential folks in the Tri-Valley might argue that we should do nothing. He believes that if we did nothing, he would see in his lifetime a summer with no irrigation. It alarms him that some folks do not understand those implications. He thinks we need to do a better job of communicating with the public about water supply issues. Item 11 Reports - Directors President Ramirez Holmes announced that DSRSD had a very bad water leak at their Dublin facility this weekend and that we are pleased to be offering our Parkside facilities for their staff to meet. President Ramirez Holmes wondered what procedures were in place for field staff due to the horrible smoke conditions that we ve had due to the fires. Ms. Pryor replied that they have alerted employees, are limiting field work when possible, and have provided masks. President Ramirez Holmes expressed concern that one of our cheapest conservation options, the washer rebate program, is ending. She asked if there was going to be another water conservation program evaluation coming back to the Board. Ms. Pryor replied that current grant funding programs are winding down but there may be some new grant opportunities in the future, which staff is assessing. President Ramirez Holmes stated that she attended the Elected Women s lunch with our General Manager last week. She also viewed the PPIC webinar yesterday about future priorities for California s next Governor. She said she will be sending out a PowerPoint on the introductory piece before the next meeting. There are a lot of unknowns about whether Governor Newsom will continue the legacy projects that were important to Governor Brown or whether he cares about water at all, so it was a very interesting webinar. Director Sanwong mentioned that at the Pleasanton Economic Vitality Committee Meeting last month a request was made for educational materials in other languages, specifically Chinese. Director Palmer stated that she has written comments about the California Water Women and that the panel included a pretty impressive group of panelists. She also pointed out that she has the minutes of the DCDCA (Delta Conveyance Design and Construction Authority), which always meets the day after our Board meeting. She said she ll give them to Amanda for distribution, but they can also be accessed at dcdca.org. President Ramirez Holmes asked Director Palmer if she could regularly update the Board when there has been a meeting. Director Palmer said she would give the link to Amanda. Director Palmer also stated that she has a link to the Department of Water Resources recent primer on Making Water Conservation in California a Way of Life. This covers SB606 and AB1668 and just came out. The primer covers the four key goals of using water more wisely, eliminating waste, strengthening local drought resilience, and improving agricultural water use and efficiency and drought planning. She said she forwarded it to Valerie so that she can send everybody the link. She said she ll also give the brief summary that covers the four main points to Amanda for distribution. 7 P a g e

8 Item 12 Items for Future Agenda - Directors President Ramirez Holmes noted that the Board would be getting the agenda for the Board Retreat sometime next week. Item 13 Staff Reports Ms. Pryor highlighted a few items: 1. Staff has revised the Medeiros Parkway project preliminary design to lower the bike trail. A public meeting about that will take place at the Zone 7 administration office on December 5, 2018, from 6:00 p.m. to 8:00 p.m., to get community input. It will be highlighted in the enewsletter. Also, 670 postcards will be sent to all residences living within 300 feet of the project. 2. Flood repairs are almost complete this year. There were a record number of repairs. Typically, eight to ten repairs are completed in a season. This season staff completed 35. Ms. Pryor complimented staff on the effort. 3. Cost information has been received for the next phase of the Sites Reservoir Project. Originally, Phase Two was going to include design but because contractors protested about the large financial commitment, this phase will only cover 2019 activities, which include defining project operations, principles agreement, coordinating with State and Federal agencies, preliminary permanent planning, preliminary right away, and supplemental analyses. This change gives staff more time to analyze the project but there is a risk of not meeting the statutory guidelines for Prop 1 Funding and overall costs. Based on that, costs for 2019 will be up to $1.3 million. Funds are available in Fund 310 and based on this plan, Zone 7 costs through 2022 will be about $22 million, which will be financed by the Sites Project Authority. Director Quigley thanked staff for the Schools Outreach Program. He noted that the outreach report stated that 122 classes were visited during the month of October. This includes schools in all four districts and just about every grade level. He said that he is involved with one of the Livermore high schools twice a week and the teachers there have expressed appreciation for the program. Director Gambs complemented staff on the Flood Preparedness Open House that was held on October 23. He thought it was well organized and informative. He especially enjoyed the slideshow showing the history on Zone 7 s flood control channels that was done by Andy Chamberlain, a Flood Control civil engineer. He suggested making the open house an annual event and making the slideshow available on the website. Item 14 Adjournment President Ramirez Holmes adjourned the meeting at 9:47 p.m. in memory of those lost in the California wildfires. 8 P a g e