President Gambs expressed his gratitude to the Board for the opportunity to serve as President, noting it was an honor and a role he truly enjoyed. He remarked that stepping into a new position is always a learning experience and that serving as President provided him a deeper understanding of Zone 7 and the responsibilities of the role. He also thanked Director Narum for her support in helping him stay on track with agenda items.

Director Palmer thanked President Gambs for his service over the past year and commended him for doing a fine job.

Director Benson also thanked President Gambs, stating it was an honor and privilege to serve alongside him as Vice President. She shared that both of them learned a great deal about the District and that the past year served to unify the Board. She expressed appreciation for his leadership and shared her hope for continued collaboration and strengthened relationships among Board members moving forward.

Director Benson nominated Director Narum to serve as President for the upcoming year. Director Palmer seconded the nomination. The motion passed unanimously with a 7-0 roll call vote.

Director Narum thanked the Board for the opportunity and expressed her commitment to advancing Zone 7's objectives related to clean, reliable water and flood control. She also thanked former President Gambs for his leadership and willingness to learn and guide the Board during his term. Director Narum acknowledged that while Vice President Benson would have traditionally moved into the President role, her current work constraints made that difficult. She proposed nominating Director Benson to remain as Vice President for one more year, with the possibility of assuming the presidency the following term. Director Palmer confirmed this as a motion, which she then seconded.

Director Benson expressed her appreciation for the opportunity to continue as Vice President, noting her desire to support the President and Agency through the many initiatives planned for the coming year. Director Green also expressed interest in serving as Vice President, citing her six years on the Board and her enthusiasm for taking on the role. She also thanked former President Gambs for his service.

Director Benson was reappointed as Vice President by a roll call vote of 5-2 with Directors Figuers and Green dissenting.

Director Palmer took a moment to acknowledge Director Green's contributions, especially her dedication to PFAS-related issues and her consistent engagement with the Pleasanton City Council. Director Green responded by affirming her advocacy for PFAS matters and thanked Director Palmer.

Item 7 -

7. Public Comment on Non-Agenda Items

Public comment was received by Laura Glorin.

Item 8 -

8. Minutes

Director Palmer moved to approve the minutes of the regular Board meeting held on June 18, 2025. The motion was seconded by Director Benson and approved by a roll call vote of 7-0.

Item 9 -

9. Consent Calendar >

Director Palmer moved to approve the Consent Calendar Items 8a through 8f. The motion was seconded by Director Gambs and approved by a roll call vote of 7-0.

Item 10 -

10. Amend the Contract for Computerized Maintenance Management System Implementation Services >

Valerie Pryor, General Manager, introduced the item, thanking the Board for its ongoing support of the implementation of the new Computerized Maintenance Management System (CMMS). With the system scheduled to go live in early August, she explained that additional work is needed, and this amendment presents an opportunity to update the Board on the project's progress. Jon Nicolaus, Maintenance Manager, then presented an overview of the CMMS implementation.

Mr. Nicolaus explained that the CMMS project is a key part of achieving Strategic Goal F: effective operations through proactive maintenance. The existing system, Tabware, is outdated and no longer meets Zone 7's asset management needs. The new system KloudGin will enhance preventive maintenance compliance, increase asset availability, and extend the useful life of assets. The system tracks maintenance activities, schedules preventive maintenance, manages spare parts, assigns mobile work orders, and supports regulatory compliance. It also centralizes critical documentation, such as O&M manuals and design drawings, and supports data on asset reliability.

He explained the concept of Reliability-Centered Maintenance (RCM), a data-driven approach that prioritizes resources on the most critical equipment to improve reliability and reduce failures. Mr. Nicolaus described the competitive process that led to the selection of Kennedy Jenks, who conducted a needs assessment, supported vendor selection, and has led the configuration and implementation of the system. KloudGin was selected and configured to meet Zone 7's operational needs, and the project is nearing its go-live milestone. End-user training was scheduled for late July, with full implementation planned for August 4, 2025.

The contract amendment is needed to complete the preventive maintenance programming for critical facilities such as the ozone system at Patterson Pass, PFAS treatment sites, pump stations, and well fields, many of which currently lack preventive maintenance plans. The amendment also includes the organization and linking of asset documents and continued technical support until a CMMS analyst is hired in-house.

Mr. Nicolaus acknowledged the efforts of the implementation team and additional staff contributors. Directors Gambs, Palmer, and Narum asked questions about well coverage, HVAC systems, contract costs, and the resolution language. Mr. Nicolaus confirmed that wells and well fields would be fully integrated into the CMMS, with configured preventive maintenance schedules, which could help prevent failures experienced in recent years. HVAC systems maintained by outside contractors will also be tracked within the CMMS, though the maintenance itself is external. Mr. Nicolaus stated this amendment represents the final major contract cost, with the system being fully handed over to Zone 7 staff, including defined workflows and preventive maintenance schedules.

Director Palmer pointed out a typographical issue in the resolution language regarding the phrase "in an amount not of." Staff confirmed that it should read "in an amount of." Director Benson expressed strong support for the program, emphasizing its value in improving efficiency, eliminating reliance on spreadsheets and paper tracking, and supporting proactive asset management.

Director Green made a motion to approve the resolution with the recommendation to correct the typographical error. Director Figuers seconded the motion. The resolution was approved unanimously by a 7-0 roll call vote.

Item 11 -

11. Sites Reservoir Project Workshop #1 >

Valerie Pryor introduced the first of several planned workshops on the Sites Reservoir Project. She explained that the project, long in the planning and permitting phase, is moving steadily toward full permitting by the end of 2025. A final decision on long-term participation by Zone 7 is anticipated in the first half of 2026. This workshop provided an overview of the project, the reasons for Zone 7's involvement, and next steps. Future workshops will be scheduled as more details become available, including permit terms, financial modeling, and final contract language.

Lillian Xie, Associate Civil Engineer, presented the Sites Reservoir Project Workshop #1. She explained the project aligns with Strategic Plan Goal B, reliable water supply and infrastructure, and Initiative 5, which is focused on developing a diversified water supply plan. She emphasized that roughly 90% of Zone 7's water supply comes from the State Water Project (SWP), which has been declining in reliability due to climate change, sea level rise, and aging infrastructure. Zone 7's 2022 Water Supply Evaluation Update found that the Agency would face major shortages in critically dry years if no new projects are added. Modeling showed that a portfolio including Sites and two other projects would reduce projected shortages from 76% down to just 10%.

The Sites Reservoir would provide both storage and water supply benefits. It is an off-stream reservoir located 75 miles northwest of Sacramento and would divert water from the Sacramento River during high-flow periods. Because it is off-stream, it has less environmental impact on natural river systems. The reservoir is currently fully subscribed, with a growing waitlist of interested agencies. It is expected to become operational by 2032.

Ms. Xie provided historical context, noting that studies supporting Sites date back to the 1950s and culminated in the formation of the Sites JPA in 2010. Since then, the project has secured $875 million in Prop 1 funding, a $449 million USDA loan, and recently received an additional $134 million in federal funding. CEQA review was completed in 2023, and the project reached 30% design in 2024. A water right permit is expected from the State Water Board by the end of 2025, which is essential for project viability.

Ms. Xie also explained how the project operates: participants receive shares of storage and can choose how to use their water, whether to hold, use, sell, or lease it. The diversion window runs from September to mid-June, with deliveries possible from July through November using the South Bay Aqueduct. Modeling showed that if the project had been operational in 2024-2025, it could have captured 1.4 million acre-feet, 95% of its storage capacity, enough to serve about 3 million households for a year.

The project offers multi-benefit returns, including municipal, industrial, and agricultural supply, plus flood, environmental, and recreation benefits. Its design makes it a strong fit for climate change adaptation, as it captures rainfall during storm events rather than relying on diminishing snowpack. The estimated construction cost is between $6.2 and $6.8 billion, though refined estimates will be provided before investment decisions are made. State and federal contributions are expected to cover 12% and up to 16% respectively, with the remaining 72% coming from local participants. Zone 7's current share of capacity in the project is 4.4%, equating to about 62,340 acre-feet of storage and 10,000 acre-feet per year of average yield before losses.

Ms. Xie reviewed the upcoming "investor commitment period," a six-month window during which the key financial and legal terms will be finalized. Zone 7 is preparing for this decision point with its own planning studies, including the 2025 Urban Water Management Plan, M&I Water Connection Fee Study, and 10-Year Capital Improvement Plan.

Director Green inquired about the timing of the updated cost estimate and geological studies. Ms. Xie confirmed the cost update would come later in 2025 and explained that land access limitations have delayed further geotechnical investigation. Chris Hentz, Assistant General Manager - Engineering, elaborated that seismic assessments and further design work are planned once access is secured and emphasized that the Division of Safety of Dams has stringent requirements the project must meet.

Director Gambs asked if it would be possible in the future to store non-Sites water, such as excess SWP supply. Ms. Xie responded that currently only Sites water can be stored, but future flexibility could be explored. He also expressed strong support for the project, calling it a valuable complement to the State Water Project, particularly in dry years.

Director Brown asked whether participant commitments were final. Ms. Xie explained that all participants are currently in the same stage, preparing for final investment decisions in mid-2026.

Director Benson expressed approval of the project for securing additional water supply and meeting the reliable supply for the customers.

President Narum asked about the implications of not receiving the water right. Ms. Pryor confirmed that the project would not proceed without it but expressed confidence in securing the water right. President Narum also inquired about Zone 7's role in the project's governance. Ms. Pryor described Zone 7's involvement on the Sites JPA Reservoir Committee and other workgroups, with multiple staff, including herself, Lillian Xie, Chris Hentz, Osborn Solitei, and Lizzie Foss, regularly participating in meetings.

Director Figuers raised concerns about evaporation and potential seepage in such a large reservoir. Director Gambs emphasized that Sites is well aligned with Zone 7's goals and offers strategic use of existing State Water Project infrastructure. President Narum concluded the item by stating her confidence in the project and appreciation for staff's continued involvement. This item was informational only so no action was taken.

Item 12 -

12. Reports - Directors

President Narum thanked the Board for the honor of serving as President and requested that each Director submit their top three committee preferences to Donna Fabian, Board Secretary, within the next few days. She noted that while changes may not be necessary, she would do her best to accommodate everyone's preferences.

Director Palmer submitted a written report and verbally highlighted several updates. She reported that the Delta Conveyance Design and Construction Authority (DCA) met on June 18, and she included a link in her written report for Board members to view updates on project funding and reliability. She noted that new video content and fact sheets are now available on the DCA website (dcdca.org). Additionally, she shared that ACWA has finalized its job description for the Executive Director position. Director Palmer stated that she has been recommended to serve as Chair of ACWA Region 5 on the upcoming slate, with ballots scheduled to go out and voting concluding on September 26. She also reported on the recent joint meeting of Alameda County and Contra Costa County Special Districts, which was held at DSRSD. The East Bay Economic Development Alliance gave a presentation highlighting the economic strength of the East Bay, noting it contributes approximately $300 billion and ranks as the 52nd largest global economy. Slides from the presentation are available for review, and the next special districts meeting will be held on September 10.

Director Green reported that she recently participated in a tour of the Delta Conveyance Project, which she described as highly informative and impactful. She was especially impressed by the fish-friendly screen designs. While she considered submitting additional comments for the minutes, she felt Director Palmer's report was comprehensive. She offered to share videos from the tour with anyone interested.

Director Gambs echoed the value of the tour, noting that seeing the project in person provided a much better sense of its scale than reviewing documents alone.

Director Benson also commented on the joint special districts meeting and praised the East Bay Economic Development Alliance's presentation. She encouraged the Board to review the slides, emphasizing the economic initiatives underway that could impact local water use, infrastructure projects, and overall business growth in the region.

Item 13 -

13. Items for Future Agenda

No items were requested for consideration at an upcoming Board meeting.

Item 14 -

14. Staff Reports

Valerie Pryor provided brief highlights from the written staff reports included in the agenda packet. She noted that Item 14a, the Monthly General Manager's Report, includes the release of Zone 7's annual Consumer Confidence Report (formerly known as the Water Quality Report). The report is available on the Agency's website, was shared via email, and featured in the Agency's newsletter. It shows that Zone 7's water quality significantly exceeded regulatory standards.

Ms. Pryor also announced that the Agency received the Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting for its FY 2023-24 Annual Comprehensive Financial Report. This marks the ninth consecutive year Zone 7 has received the honor, and she extended appreciation to Osborn Solitei and his team for their continued excellence.

Lastly, she called attention to Item 14e, the Annual Water Supply Operations Plan Update, noting that while the report is sometimes presented in meetings, especially during challenging water years, this year's report was provided in written form, as Zone 7 is currently experiencing a strong water year. She reported that the Agency is able to meet current demands and is storing water for future use.

Item 15 -

15. Adjournment

President Narum adjourned the meeting at 8:24 p.m.

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Zone 7 Meeting - July 16, 2025

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