Zone 7 Meeting - April 21, 2021

3. Call Meeting to Order

4. Public Comment

5. Minutes

6. Consent Calendar

7. State Government Relations Update by The Gualco Group

8. Consider Adopting Limited Legislative Policy Guidelines for Calendar Year 2021 Related to Grant and Stimulus Funding Opportunities

9. Declaration of May as Water Awareness Month

10. Water Transfer Agreements

11. Consider Rescinding Local Water Supply and Water Quality Studies Task Order for Joint Funding and Funding Studies from Zone 7 Budget

12. 2021 Annual Sustainability Report

13. Award of Construction Contracts for Arroyo Mocho Stanley Reach Stabilization Project

14. Award of Construction Contracts for Rehabilitation of Flood Control Channels - Phase 3 Project

15. Reports - Directors

16. Items for Future Agenda - Directors

17. Committees

18. Staff Reports

19. Adjournment





April 21, 2021

The following were present:






















Item 1 - Closed Session

The Board did not meet in Closed Session.

Item 3 -

3. Call Meeting to Order

President Sanwong called the meeting to order at 7:00 p.m. Roll call was taken and all Board members were present.

Item 4 -

4. Public Comment

There was no public comment.

Item 5 -

5. Minutes

Director Palmer made a motion to approve both the Special Board Meeting Minutes of January 6, 2021, and the Regular Board Meeting Minutes of March 17, 2021, and Director Smith McDonald seconded the motion. The minutes were approved by a roll call vote of 7-0.

Item 6 -

6. Consent Calendar

Director Ramirez Holmes moved to approve all items on the Consent Calendar and Director Palmer seconded the motion. All Consent Calendar items were approved by a roll call vote of 7-0.

Resolution No. 21-17 Award of Contract for As-Needed Tree Maintenance Services (Item No. 6a)

Resolution No. 21-18 Award of Contract for Generator Maintenance, Parts, and As-Needed Repair Services (Item No. 6b)

Resolution No. 21-19 Award of Contract for As-Needed Fence Maintenance, Parts, and Repair Services (Item No. 6c)

Resolution No. 21-20 Award of Contract for As-Needed Air Compressor Maintenance, Parts, and Repair Services (Item No. 6d)

Resolution No. 21-21 Award a Contract for Chain of Lakes Model Support and Training (Item No. 6e)

Item 7 -

7. State Government Relations Update by The Gualco Group

Valerie Pryor, General Manager, introduced Jack Gualco of the Gualco Group, Zone 7's state legislative advocacy group, to provide a report on state government activities.

Mr. Gualco introduced Kendra Daijogo from the Gualco Group, who also participated in the presentation.

Mr. Gualco discussed some of the priorities that the legislature is focusing on this year such as wildfire prevention and mitigation; an economic stimulus package, which includes a $2 billion drought relief package; subsidence fixes on the State Water Project (SWP); design-build for fixes to non-Delta reaches of the SWP; climate adaptation; power grid management; homelessness; and special elections and vacancies. Ms. Daijogo continued the presentation, discussing two bills by Senator Dodd. One that would establish the Water Rate Assistance Program, and the second that would address payment plans. Next, Mr. Gualco discussed regulatory activity such as the Water Resilience Portfolio Initiative, the human right to water in disadvantaged communities, COVID impacts on service operations and back bill protocols, PFAS and PFOS, drought and water rights realignment, and low-income rate assistance. Lastly, Ms. Daijogo gave an update on the Governor recall initiative.

Director Ramirez Holmes stated that she has not seen an updated ACWA position and asked for an update on whether the Dodd bills had been amended. Ms. Daijogo answered that the bills were amended on April 20. ACWA has not yet sent out an update. They were currently reviewing those amendments. A review and analysis and positioning should be coming out soon because there will be an ACWA State Legislator Committee meeting next week. Director Ramirez Holmes stated that the ACWA's concern with Senator Dodd's bills is that they deal with delinquent bills, not only due to the current COVID emergency, but beyond that. So, retailers are concerned that this could set up a longer-term situation of people not paying their bills and not having to pay. Ms. Daijogo confirmed Director Ramirez Holmes' assessment of the situation.

Director Ramirez Holmes commented that she had wanted to get a sense of the problem locally, so she contacted the City of Pleasanton and asked how many households are delinquent on their water bills. They replied that in March, there were 800 single family households in Pleasanton that were delinquent.

Director Smith McDonald asked what the triggers are going to be for future drought emergency declarations. She expressed concern that the governor might declare a drought emergency in our area without us getting a heads up. Mr. Gualco replied that it is going to be very region specific. A bipartisan letter signed primarily by San Joaquin Valley legislators went to the governor 10 days ago that asked him to declare a statewide drought emergency. He has demurred on that thus far. DWR and the State Water Board will be advising him regarding areas that are stressed. Timing will be a collaborative effort between the affected water agencies, DWR, the Water Board and the governor's office. Part of the reason he has not declared a statewide declaration is that he is concerned that it is going to be viewed as a gift to the Central Valley. Others are apprehensive that it will give the State Water Board additional authority and power, given what took place in the last drought.

Director Smith McDonald asked if there were any provisions related to water quality or opportunities for the agency to get assistance in the expenses incurred in some of the homeless encampment cleanup efforts. Mr. Gualco answered that he thinks there are going to be some funds in the May revise. He expects that the governor is going to suggest more money be dedicated towards that because it has become a public health concern. President Sanwong added that agencies downstream from us also have had similar cleanup costs, so we are not alone on that.

Director Palmer wondered if, due to ratepayers who could not or would not pay their water rates, we could still function without that funding coming in. At some point, it is going to get passed onto the rest of the rate payers. Mr. Gualco responded that he thinks there is going to be some bolstering of the CARES Act funding, because that is where a lot of this money is dedicated for dealing with homeless situations. And then it depends on which county you are located. If you are in a county of over 500,000 people, then the cities will be getting direct allocations. If it is a smaller county, then it will be through the Board of Supervisors.

President Sanwong asked if Zone 7 should also be monitoring federal legislation and staying current what is happening in Washington DC. Mr. Gualco said that ACWA is doing a good job of reporting, through their DC office, what is going to be happening in terms of water infrastructure. The Biden proposal is for about $1.9 trillion. Negotiations are going to slightly reduce that number. He expects that before Congress wraps up for the year, there will be another large amount of money coming California's way. In addition, the legislature and governor want to use the budget surplus of federal money to do major one-time investments in infrastructure. They realize that getting people back to work and getting our road system and water infrastructure to operate properly and efficiently as part of an economic recovery program makes a lot of sense right now.

President Sanwong asked if there was any updated information about the Water Conservation as a Way of Life program. Mr. Gualco replied that it is regional because if you look at Metropolitan Water District, they are in relatively good shape. They can get through this year and maybe even next without a lot of curtailments. A big item of debate at a recent MWD board meeting was how best to position themselves so that it cannot be interpreted that Southern California is not doing its fair share, because they are doing a good job of saving and conserving. At the same time not letting people off the hook and making sure that they are doing their fair share. There was such a huge amount of effort and resources dedicated to getting people to conserve the last go around that the question is how much headroom we have at this point to conserve even further because, generally, people have stuck with the water conservation model and way of living. It is going to be interesting to see what kind of additional flexibility can be built into the system because the baseline has shifted in a favorable way.

President Sanwong asked if there was going to be strict enforcement of households having to meet conservation requirements at levels that haven not been yet determined. Wasn't that something that Governor Brown was pushing forward during the last drought? Mr. Gualco replied that at this point, the governor wants conservation to be voluntary. Once the emergency declarations abound, we will see if he wants to put a finer point on that. But there is a bill moving through the legislature, AB 1434, by Laura Friedman that would lower the limitation per household even further beyond what was adopted the last time. That is getting a great deal of pushback because some, particularly from the arid parts of the state, feel that the number is not even practical. So, there is going to be a lot of debate about that over the next few months.

Director Ramirez Holmes commented that the governor's proclamation directing the Save Our Water Campaign to kick up is good news for Zone 7, because it will have statewide messaging and they have a bigger budget than we do.

Director Green asked what was going on with PFAS. Mr. Gualco replied that it is a combination of monitoring and looking at alternative water supplies. There is a lot of concern that there could be some additional regulatory controls placed at a time when we are trying to conserve and utilize every drop of water that we can. Wells that do not pose a threat in the near term can be brought back and made available. But PFAS and PFOS are yet another layer of problems with our water supply that five years ago, we really would not have predicted. This has led members like Bill Corr to say that we need to establish a process to identify constituents of emerging concern to try to get ahead of this. And the waterboard staff is more than eager to do that. Director Green asked if they are going to delay actual regulation. Mr. Gualco replied no. It will be on a site-specific basis. Wells that far exceed water quality standards will not be brought back. But those that are on the cusp, there is a possibility they would be. Director Palmer added that an MCL has not been put in for PFAS and the notification levels. That has not been established by the EPA. There are wells that have not exceeded public health risk criteria, but they are still on notification levels, so those are the sorts of things that could be brought back.

Item 8 -

8. Consider Adopting Limited Legislative Policy Guidelines for Calendar Year 2021 Related to Grant and Stimulus Funding Opportunities

Ms. Pryor introduced the agenda item. She explained that this proposal is for the Board to grant very limited legislative policy guidelines to staff and our legislative advocates, related specifically to just financial items. This would be positioning staff and our legislative advocates to advocate for Zone 7 projects and would just be for this year. It only relates to funding and support. It would include signing advocacy letters from organizations such as the Association of California Water Agencies (ACWA) and California Special Districts Association (CSDA) and coalition letters for some of the projects we are participating in, such as the Los Vaqueros Reservoir expansion and the Sites Reservoir project. It would not be opposition, and this would not relate to pieces of legislation or ballot measures that are going through a normal process. If the Zone 7 Board wanted to act on those, those would come to the Board approval.

Director Ramirez Holmes expressed reservations about the item. She said that letters of support, tend to be from elected officials and she hesitates to give control of that. She noted that in the resolution, #1 and #3 seem to be in conflict. Ms. Pryor acknowledged that #1 was miswritten. It should be clarified to support legislative proposals. Specific pieces of legislation would be for #3. Director Ramirez Holmes asked for confirmation that this would mean striking support for legislation from #1. Ms. Pryor replied that is correct.

Director Ramirez Holmes cited #2 in the resolution and expressed concern that it could be broadly interpreted to include supporting projects such as DSRSD's Potable Reuse Project, which the Board has not declared a position on. Ms. Pryor replied that the thought process was that we would want to support projects that our local partners are pursuing that are drought related and provide additional water to the Tri-Valley area. That could be reworded if the Board prefers. Director Ramirez Holmes asked if the resolution as written would give that approval to Ms. Pryor. Ms. Pryor replied yes.

Director Ramirez Holmes said that she would like to see in the resolution an exemption that it would not apply to anything that would require a public vote such as a bond.

Director Figuers questioned why we need the resolution. He asked, if this resolution is adopted, who can make the support? Could staff do that independently? Or is it still restricted to the approval of the Board in some respect? Ms. Pryor responded that, currently, she often receives requests to sign and put the Zone 7 logo on various support letters from ACWA, CSDA, and others, which she does not do because she does not have Board authority. She has also received requests from local legislators for input on a specific bill or proposal, which she also does not provide because due to lack of Board authorization. She explained that this authorization would just be during this different and hectic time when there's talk about throwing a lot of money around and making money available. It would not go further into supporting legislation or ballot measures.

Director Figuers commented that there is going to have to be a lot of trust between Ms. Pryor and the Board because if they give her this type of approval, there could come a time when one or two Board members disagree with her decision. He said that he does not want that to occur. Ms. Pryor has an understanding of what the Board is thinking, but there is a small risk that should be considered.

Ms. Pryor reiterated that this is just about additional funding for Zone 7. It is not on policy items; it is not on legislative items. It is about trying to get our interest in getting additional funds for Zone 7 out there. Director Figuers disagreed, saying that is not what the resolution says.

President Sanwong stated that Director Ramirez Holmes had recommended that we would strike the support legislation language. So, it would just be to support proposals. Should we entertain a motion for this, it would be removed.

Director Figuers said that we want to put a timeline on it, just to test it out. Perhaps for a year or two, and then have it come back to the Board. Ms. Pryor replied that the resolution as stated is for calendar year 2021. So, it will sunset December 31st.

Director Gambs suggested including a reporting back to the board requirement. Ms. Pryor replied that it is included in the resolution.

Director Smith McDonald asked if this is a practice that is happening in other places. Ms. Pryor replied that in her experience with local governments, they annually adopt legislative principles that cover a wide variety of topics, not just emergency funding. So, they would not necessarily need a short-term set of legislative guidelines. Mr. Shapiro confirmed that it is normal to adopt a set of principles at the beginning of the year. It allows staff to act a little bit faster and not clog up Board agendas as much. Mr. Gualco added that it ranges from agency to agency. Some give broad grants of authority to the CEO or the general manager with the understanding that they are putting themselves out there and must know their Board's positions. He explained that the reason Ms. Pryor is bringing this forward is because we are going to have to really move quickly, and particularly on the fiscal issues, as we deal with the drought response. So, giving her some additional flexibility in the near term would be appropriate.

Director Green stated that she was happy to see this item because she wants us to be a little more proactive when it comes to the money that may be becoming available. She agreed with the comments and Director Ramirez Holmes' suggested edits. She also agreed that there is a certain amount of trust here, but she felt that our general manager has earned that trust. The fact that the resolution sunsets quickly puts us in a good position. With those edits, this is something she could support.

Director Palmer stated that in reading the item, many of the questions that were brought up had been answered in the resolution itself. She felt it was carefully worded and she was pleased with it.

President Sanwong expressed concern with item #2 because the agencies within the Tri-Valley are not always in alignment on certain topics. She asked if we would be able to modify some of the language for item #2. Ms. Pryor replied that the Board always has that privilege.

Director Figuers suggested having the general manager contact the chair of the Board informally when supporting proposals. Ms. Pryor replied that the resolution does state that these items would be reported to the Board. Director Figuers clarified his suggestion by stating that he meant a day or two after the occurrence, not during a Board meeting.

Director Ramirez Holmes said that this is not for seeking grants. They do not have to take any political positions to apply for and get grant money. These are separate processes.

Director Ramirez Holmes suggested the following changes to the resolution wording: In the last "Whereas," she would add to the end of the sentence, "in both GM reports and monthly public GM reports," meaning we would get updates in the weekly emails to the Board. But the monthly GM report would be made public as part of Ms. Pryor's report. In the first "Resolved," she suggested striking the words "legislation and." In the second "Resolved," she suggested striking "support and," and instead have it say, "It is Zone 7's policy to provide endorsements for grant support of projects of our local and regional partners that meet the goals in Item One." She explained that it means that we are not supporting but only giving endorsements to our local partners to get grants and do studies on their own. #3 stays the same.

Mr. Shapiro asked Director Ramirez Holmes to clarify when something evolves from a proposal to legislation. For example, if ACWA thinks another a $100 million of general fund dollars should go into the budget, that seems like a proposal. When a legislator then picks that up, sends it over to legislative council, and asks the committee chair for appropriations to include it. Does it become legislation? And once it is in a draft bill, does that mean that we can no longer support it? Director Ramirez Holmes confirmed that it is correct. She said that her biggest concern is the conflict between items #1 and three in the resolution. Mr. Shapiro added that if a legislator is seeking an amendment to legislation, that is still a proposal, but once it is in bill language, that is when it is legislation. Director Ramirez Holmes responded that amendments are already legislation and, therefore, it would go to the Board. Mr. Gualco replied that in his experience, it is not uncommon for a legislator to go to another legislator and ask for change in a bill. It is not legislation yet. It is just a proposal. Director Ramirez Holmes replied that her understanding is that Ms. Pryor was not seeking to get into the legislative process, but that she was trying to get broader approval to support funding proposals that would move forward.

Director Palmer suggested leaving out the word "grants" in #2 and leaving it as is. She agreed with Director Ramirez Holmes' changes for #1, but not with the changes for #2. Director Ramirez Holmes stated that she would be uncomfortable with that. She said she does not want to stifle the ability of Zone 7 to support our regional partners in access to grants, but she does not want to endorse proposals that have not come to the Board. She said that she and perhaps others on the Board might be uncomfortable if we gave that broad authority. Director Palmer responded that we do not have to stick the word "grants" in there.

Director Figuers asked Director Ramirez Holmes how she distinguished the word "support" from "endorsement." What is the difference to you between those two terms? Director Ramirez Holmes responded that the resolution currently says, "Support and endorsements of projects." She said the distinction is that she wants to be a good regional partner and give support to our partners to seek grants for studies as opposed for us to sign on to things. She does not want the broad ability that would give Ms. Pryor authority to do that as is written. She said she is not comfortable with that. Director Figuers responded that an endorsement is not a support. Director Ramirez Holmes clarified that it was an endorsement of grant support request. Director Palmer stated that we do not need to put grants in there, because we can endorse something and lend our support without have any funding. Director Angela Ramirez Holmes responded that we cannot under the proposal, but Ms. Pryor can.

Ms. Pryor suggested the wording, "provide either support or endorsements to funding for drought related projects for local and regional partners." Director Green said she liked that better because grant is almost too specific. Director Palmer agreed. She said it would bring the funding as opposed to specifically grants, because those might not be necessarily available. Director Green added that funding can come in other forms. Also, they are talking about promoting funding so that they can apply for it. They are not talking about voting on grants specifically, but funding can also come as loans. She felt the word "funding" works better. Director Palmer agreed.

Director Figuers said that it all comes down to trusting Ms. Pryor. He said he did.

President Sanwong agreed with Director Figuers' points but added that all seven Board members are not always in unanimous agreement on some of these topics so there is that aspect to consider.

Director Palmer asked for clarification. Are we going with what Ms. Pryor has proposed for #2 and what Director Ramirez Holmes has proposed for #1? President Sanwong added that there's one other comment Director Ramirez Holmes had made regarding reporting. Director Ramirez Holmes responded saying that the Board should specify how we want that information. She said she wants it to be in the weekly GM reports to the Board and the monthly public reports.

Director Palmer moved to approve the item with the following changes. Director Green seconded the motion. The motion was approved by a roll call vote of 7-0.

1) In the last "Whereas" paragraph, add to the end of the sentence, "in both GM reports and monthly public GM reports."

2) In the first "Resolved" paragraph, strike the words "legislation and" from #1.

3) In the first "Resolved" paragraph, change the sentence in #2 to read, "It is Zone 7's policy to provide either support or endorsements to funding for drought related projects for local and regional partners."

Resolution No. 21-22 Consider Adopting Limited Legislative Policy Guidelines for 2021

Item 9 -

9. Declaration of May as Water Awareness Month

Ms. Pryor stated that Item 9 is a resolution to declare May as Water Awareness Month, which is celebrated in California every year in May. Ms. Pryor stated that Zone 7 will be conducting public outreach and education to heighten public awareness about water supply and the need for water conservation and water use efficiency. Zone 7 is sponsoring the Bringing Back the Natives Online Tour and launching Zone 7's Waterwise Wendy outdoor water conservation campaign along with supporting educational videos.

Director Gambs said that he appreciates that this has been brought to the public's attention. Director Ramirez Holmes added that this would be a great time to get some press releases out regarding Zone 7's rebate programs, and through social media. Director Palmer moved to approve the resolution and Director Green seconded the motion. The resolution was approved by a roll call vote of 7-0.

Resolution No. 21-23 Declaration of May as Water Awareness Month

Item 10 -

10. Water Transfer Agreements

Amparo Flores, PhD, Integrated Planning Principal Engineer/Geologist, explained a proposed water transfer with Mojave Water Agency, another State Water Project contractor. The Table A allocation from the State Water Project, the Agency's main source of water was reduced from 10% to 5% in late March, which translates to a loss of roughly 4,000 acre-feet for Zone 7. The plan is to maximize recovery from the current county groundwater banks requesting delivery of 19,100 acre-feet. A relatively high level of groundwater pumping is expected at 13,100 acre-feet to have local water available due to the reduced surface water availability this year The Agency is looking at an anticipated need for about 10,000 acre-feet of water transfers in 2021 to supplement supplies.

There are a few options for water transfers, the Yuba Accord program administered by the Department of Water Resources, the Dry Year Transfer program administered by the State Water Contractors and a transfer with another State Water Project contractor. Mojave Water Agency has discussed potential terms of selling water to Zone 7 at $850 per acre-foot, up to 4,500 acre-feet, there is typically a variable rate at about $70 per acre-foot added to that for delivering the water. The $850 per acre-foot reflects the current state of the market with very high demand and low supply. There is a timing outline in terms of when Mojave Water Agency would provide the written notice to Zone 7 of the final amount of water available and deadline for Zone 7 to respond.

Funding for water purchases comes from Fund 100, the Water Enterprise Operations Fund. In the fiscal year 21 to 22, Fund 100 adopted budget, there is included about a million dollars for water purchase and $1.2 million for a separate water transfer. In total, there is about $2.2 million for water purchases, including transfers. The estimated cost of this agreement with Mojave Water Agency is about $3.82 million dollars. Any additional funds that are needed for this water transfer would have to be appropriated in the mid-cycle budget adjustment for fiscal year 21 to 22, that will be presented to the Board in June of this year.

President Sanwong thanked Dr. Flores and her team for expediently reaching out to the Mojave Water Agency for this transfer and then asked what if we were not able to negotiate this agreement with Mojave. She asked what would happen in terms of our water supply locally - would this then impact our water conservation recommendations; would we potentially go from voluntary to mandatory conservation.

Ms. Pryor answered that without these water transfers, we would be in a position where we might have to consider mandatory conservation instead of voluntary, but we are fortunate that we are not in that position. And also with the recent amendment to the state water contract, we will be able to pursue multi-year transfers. It is hopeful that at some point in the near future, transfers would not be year to year and we could get a little bit more certainty going forward.

President Sanwong asked about other nearby water agencies who are not on the State Water Project. Ms. Pryor answered that every water agency is different. Some have more access to local supplies; some have more access to imported supplies. And depending on each agency's situation, they are in different stages of the drought.

Director Gambs asked, in the future, is it our goal to have projects like Sites Reservoir and the Los Vaqueros Expansion put us in a position where we would not need to get these kinds of transfers, which are very expensive? Dr. Flores responded that the goal is to implement long-term water supply projects that would maintain our reliability into the future. Those projects will take five, seven, or ten years. In the interim, the best option is to participate in these types of water transfers.

Director Smith McDonald asked is additional funding from the federal and state government would assist with picking up some of these costs since there is not enough in Fund 100. Ms. Pryor responded that the funds are not budgeted, but there are sufficient funds in Fund 100.

Mr. Solitei stated that in Quarter two, there was a $12.4 million fund balance. If that continues, it might be used for mid-cycle budget for these funds. Director Ramirez Holmes asked if the quarter two fund balance was an anticipated year-end fund balance that would be a projected surplus in Fund 100, which would fund this water transfer. Mr. Solitei confirmed this funding plan.

Director Green asked for confirmation that it was $850 per acre-foot and would future transfers be around the same amount. Dr. Flores confirmed the $850 per acre-foot and explained that the price could fluctuate based on the type of water year that is occurring at the time. President Sanwong pointed out that attachment one in the packet shows what a 5% State Water Project allocation estimated costs could be versus in 2020, when Zone 7 had a 20% allocation. The pricing really is a significant difference. Director Green agreed that compared to other things it is competitive. Dr. Flores added that there are transfers being negotiated by others right now that are coming in higher than $850 per acre-foot.

President Sanwong welcomed comments and questions from the public. None were received. Director Palmer made a motion to approve Item 10 and Director Green seconded the motion. Item 10 was approved by a roll-call vote of 7-0.

Resolution No. 21-24 2021 Water Transfer with Mojave Water Agency

The Board took a 10-minute break.

Item 11 -

11. Consider Rescinding Local Water Supply and Water Quality Studies Task Order for Joint Funding and Funding Studies from Zone 7 Budget

Ms. Pryor presented the item to consider rescinding the local water supply and water quality studies Tri-Valley Task Order and instead funding studies by utilizing the Zone 7 budget. She provided background information on the original task order established under the Tri-Valley Inter-Governmental Reciprocal Services Master Agreement. The Pleasanton City Council voted against funding the task order on February 2nd. As a result, Livermore staff suggested that their original approval of the funding was no longer equitable and proposed that Zone 7 take the lead on the necessary studies and to build these costs into water rates. Staff at DSRSD confirmed that they would support this approach. This funding mechanism would address some financial equity concerns across the Tri-Valley because Cal Water could not easily participate under the previous arrangement. Rates and fees would cover retailers and residents of the valley with Zone 7 funding. The Zone 7 Liaison Committee on March 8th recommended bringing this to the Zone 7 Board. The committee noted that it is important to study all the options for local water supply and storage. These studies would provide information to inform future decisions. Staff indicated that regardless of the funding mechanism, there is active collaboration between Zone 7 and its retailers on these issues. Ms. Pryor highlighted several near-term studies that were currently underway. The studies related to overall water supply reliability and water quality were appropriate to be funded by the water rates. The studies that were specific to potable reuse are related to new water supply and would be appropriate to be funded by connection fees. She indicated that the Board's action would not pre-approve the future studies, but rather pre-approve a potential funding mechanism in rescinding the task order. Inclusion of future studies would be considered by the Board at the appropriate budget time in the award of each contract and its funding will require a separate forward action. Ms. Pryor welcomed questions from the Board.

President Sanwong asked to confirm that the agencies agreed to take this approach at the Tri-Valley Water Liaison Round Table. Ms. Pryor confirmed, and indicated all four agencies supported the set of studies in July 2019.

Director Gambs wanted to consider seeking sources of funding like grants in lieu of water rates. Another suggestion was funding it with only connection fees, but he felt that it did not respect the need for the studies. A reliable supply of water is based on both the needs of existing and new customers. Funding with development fees from new customers would not be an appropriate probable use. Ms. Pryor stated that opportunities to seek grant funding for these studies would take place. As indicated in the Staff Report, it was recommended that the general water supply reliability and general water quality items would be funded by rates. Anything specific to potable reuse would be funded by connection fees because that would be a new water supply, which is consistent with past funding of potable reuse studies.

Director Figuers stated that Pleasanton's objection to reuse is multi-year and longstanding in the mid 1990's. This came up and they were vehemently opposed to it, but it needs to be evaluated.

Director Green stated she was present at the meeting when the agencies were in agreeance and tried to remember if an actual vote was taken. It was Ms. Pryor's understanding that official votes are not taken at the Liaison Committees, but a general sense of support, nodding or straw poll.

Director Ramirez Holmes confirmed that a vote was taken. At that meeting, representatives from Pleasanton were representing that their council unanimously agreed to move forward. The Liaison Committee was a report out of everyone's council, receiving the potable reuse study and deciding whether to continue with Phase 2. Pleasanton voted 5-0 to continue. When it was discussed it at the Tri-Valley Round Table, the agencies said that their councils had all approved to move forward. The task order was just a checkoff after that point, but there was a unanimous council vote taken.

President Sanwong clarified that on February 2, 2021 at the Pleasanton City Council Meeting, when they decided to rescind their previous unanimous 5-0 vote, it was a 3-2 vote of Pleasanton City Council. It was not unanimous to rescind the task order. She noted that it is very unlikely that there is going to be one point of view for an entire city, and there is likely going to be a mixture of different perspectives.

Director Smith McDonald asked for a better understanding of Pleasanton's longstanding resistance to potable reuse over the last 20 years. She felt it was important to know where the community stands. She stated that she did not accept a longstanding stance on potable reuse. President Sanwong shared her individual perspective as someone who lived in Pleasanton in the 1990's. She recalled a debate at her high school civics class and supporting the use of technology to explore water supply reliability issues. President Sanwong felt strongly that that it was something that needed to be reconsidered. Director Figuers added that these unresolved problems go back into the early 1960s.

Director Palmer wanted to make sure that it was clear that the issue was not on the ballot in the last election. Over the last 21 years, technology has improved and changed and Pleasanton may have changed.

Director Ramirez Holmes said that she and President Sanwong spoke during public comment when this issue was brought up at the February meeting. She reiterated that this was not a vote for potable reuse. It is about a group that was formed to collectively discuss the problems of the drought and determine out how to better work together, early results of those were reciprocal services agreements about shared chemical purchases, repairs, use of heavy equipment. This Tri-Valley Round Table surveyed the community twice and the results of the polls were clear, and they matched the goals of the round table participants; explore all options for better water reliability, evaluate those, and then make decisions. These also included storage options, conservation goals, and new supply. The only reason potable reuse was part of it is because that was the only new local supply that was available. Zone 7 has invested in several of these for evaluation, Los Vaqueros, Delta Conveyance, Sites Reservoir, and desalination efforts. The technical studies go beyond potable reuse and include factors like communication and outreach, groundwater supplies for new issues like PFOS that were not a part of the original list. The item was on the agenda because Pleasanton backed out of their previous commitments. Director Ramirez Holmes reiterated that this was not about potable reuse. The agency would also continue to collaborate with its retailers. The Board needed to decide whether it would continue the studies that were unanimous at the round table and pay for them so that the important work can move forward.

Director Green agreed that the discussion should not be about potable reuse but indicated that it was linked in the literature and the presentations. She did not wish to misinform people and clarified that Director Palmer was correct, it was not on the ballot while it was not on the ballot it was part of campaign discussion. She would like to see these studies stand on their own without being attached to potable reuse. She hoped that someone from Pleasanton will make an appearance to explain for themselves.

President Sanwong felt that not one person could speak for Pleasanton. The general plan is mentioned in the letter from the Pleasanton City Manager. She asked what the merits of the general plan were in terms of Zone 7's role as the sustainable groundwater management authority that was passed in 2014. Certainly, the Pleasanton general plan having been drafted in 2005 does precede the SGMA of 2014 in terms of timeline. However, it was mentioned in the general plan of Pleasanton, but there is no merit. She asked if the groundwater basin was ultimately Zone 7's the authority. Director Palmer confirmed.

Pleasanton resident Linda Kelly was saddened by the city council vote and that Pleasanton was pulling out. She felt that it turned an issue that is important to the entire region into a political chaotic event. She shared that she attended some of the meetings when there was unanimous approval to complete the studies. She extended an apology for Pleasanton.

Jan Lee, Assistant General Manager of the Dublin San Ramon Services District (DSRSD). She stated that DSRSD supports Zone 7's recommendation to fund the local water studies and community outreach program from Zone 7 rates and connection fees. The district appreciated the efforts Zone 7 has made since 2014 to study a broad array of water supply storage and conveyance projects to ensure water resiliency for the Tri-Valley. In 2014, its customers were faced with 25% cutbacks in water supply. The DSRSD Board adopted a water resiliency policy to guide district efforts to work collaboratively with local and regional partners on water supply efforts. The water resiliency policy emphasizes the need to build a resilient and sustainable water supply through implementation of a diverse portfolio of water projects such as those that Zone 7 is currently evaluating. It was DSRSD's position that it should be studying all of the water supply projects identified in Zone 7's five-year strategic plan to make decisions in the best interest of its ratepayers. It is too early to be taking options off the table. It is also DSRSD's policy to prioritize the use of local and sustainable water supplies that contribute to regional self-reliance. They believed it was important to educate residents and businesses on the region's water, supply challenges and potential solutions and we remain committed to working collaboratively with Zone 7 and the other retailers on the community outreach program currently underway. DSRSD strongly supported staff's recommendation and urged the Zone 7 Board to adopt the resolution.

Director Gambs respected the right of the City of Pleasanton to do what it believes is in the best interest of its constituents, as it is just their responsibility. It is Zone 7's responsibility to find a reliable supply of water for the future. This was not a decision on doing a project, but rather on feasibility, outreach, and other factors. There was a DSRSD project that was called Clean Water Revival that caused some Pleasanton residents to be displeased. He felt that a review of education and the groundwater basin needs be conducted from the last 20 years. Zone 7's charge is to do what is in the best interest of all the customers and this cannot be accomplished without this investigation.

Director Smith McDonald expressed her support of the resolution. Zone 7 was asked to be financially responsible for something it could afford. The agency will share its information. She also stated when potable reuse comes before the Board, she will consider it prior to casting her vote it because all options should not be taken off the table. The agency represents the entire Valley where there are plenty citizens who want the information from the Board, who want to understand the options moving forward for reliable water into the future. She would never say "no" to gathering information and taking the opportunity to share it with constituents.

Director Green asked if the directors were voting on the studies and whether discussions would take place on their own merits as they moved forward. Ms. Pryor confirmed.

Director Ramirez Holmes moved to approve the item, and Director Palmer seconded the motion.

Resolution No. 21-25 Consider Rescinding Local Water Supply and Water Quality Studies Tri-Valley Task Order and Funding Studies from Zone 7 Budget

Item 12 -

12. 2021 Annual Sustainability Report
Sal Segura, Associate Civil Engineer, presented the 2021 Annual Sustainability Report. The State of California is experiencing an extreme drought. In 2021, April 1st, which is considered the high point for snow levels in the Sierra, came in at an average of 59% of the April 1st long-term average. The weather is a source of all of our fresh water. An indicator for water health is an 8-Station Index in the Northern Sierra and this is also probably the best indicator of precipitation for the year. Everything is based on this April 1st average - the water year starting in October, ending in September. In April, we only had half of what is considered normal for this time of the year.

There is usually more rainfall throughout the year. The NOAA station 15E in Livermore is a local indicator for precipitation and this is a little bit lower than the 8-Station Index. This local station came in at 44% on April 1st.

Groundwater storage is broken up into reserve storage of 128,000 acre-feet, and everything above that is considered operational storage, which is approximately 126,000 acre-feet for a total of 254,000.

We participate in two different groundwater banks outside of our basin in Kern County, known as Semitropic and Cawello. This is groundwater storage outside of our basin. When we go into kind of a water deficit situation, Zone 7 has the ability to draw out from these banks. Water stored in Lake Del Valle can also be carried forward from one year to the next.

Our supplies, come from several different portfolios, storage, and imported. Altogether we have about 59,300 acre-feet to work with this year. 15,000 acre-feet from incoming supplies, and about 45,000 acre-feet from storage supplies, together that makes the 59,300 acre-feet. The delivery requests that we are planning for from our retailers is 47,500-acre feet and does not include conservation. It is a very conservative estimate. The remainder will go into "carryover" water for 2022. And a percentage of that will also go to cover losses like evaporation and system losses.

This is going to cost our storage quite a bit, but we can, and will meet a 100% of the projected demands. We will be having to draw from our storage about 60,000 acre-feet. We are currently at about 234,000 acre-feet of storage, we would be dropping to about 172,000 acre-feet of storage in all the storage categories. There are some actions we could take to mitigate that, such as buy more water to refill and replenish storage.

President Sanwong asked for confirmation that simulations are run for different extremes, whether below or above the 59% projection from the Table A allocation. Mr. Segura confirmed that there is a water supply model that is used for forecasting the various different outcomes of water supply.

Director Gambs asked, how is everybody modeling their future hydrology, given the uncertainty with global warming? Mr. Segura answered more and more, folks are starting to introduce climate change into their forecast and into their modeling, especially as you go out, 20, 25 years. People are much more aware now that the weather patterns will not necessarily repeat and also the cycle of hydrology is constantly changing whereas maybe it used to be once every five years you would get a good bountiful year. Now that may be once every seven to eight years, that it's happening.

Director Green asked, with regards to conservation, we do not have a way of measuring that ourselves. Is that correct? That the retailers are the ones who can give us some numbers regarding that? Mr. Segura answered that no, we keep track of all the deliveries. For this year specifically, we can see a trend of about 10% conservation taking place right now and we are hoping that 10% stays and maybe even increases. We collect all the water delivery data each month and we track it very closely. Director Green further asked if it was voluntary conservation at this point and if there was some hope that it might actually increase a bit as we get into the summer. Mr. Segura confirmed this was correct and the hope that with the governor's declaration, we expect the water users to really start implementing more conservation as they did in earlier years.

Director Green stated that she would be interested in seeing some of the range of the models to see what a reasonable range is. President Sanwong mentioned that it was reviewed at a Board Meeting and they could review that information. Director Smith McDonald stated that the California Climate Assessment from 2018 was used. Ms. Mahoney added that the California Climate Assessment was incorporated and will be again when an updated assessment comes out in the future. The 2018 assessment did not provide a clear signal in the amount of precipitation with regards to temperature escalation nor when the precipitation would be coming in or in what form - snow or rain. DWR also uses the climate assessment to assess the types of water hydrology that they are expecting and incorporate it into their projections.

Ms. Pryor added that 80% of Zone 7's water comes from the State Water Project. Our numbers are based on the Department of Water Resources' delivery capability report that they do every two years. It is DWR's model and projections that they take into account climate change.

Director Smith McDonald commented that the graphics were clear in showing what the water future looks like for the water delivery for Zone 7 and suggested a communications opportunity to provide a couple of short social media graphics or something similar to let customers know water delivery over the next few years is secure regardless of the climate.

Item 13 -

13. Award of Construction Contracts for Arroyo Mocho Stanley Reach Stabilization Project

Jeff Tang, Associate Engineer and Project Engineer for the Arroyo Mocho Stanley Reach Stabilization Project, stated that staff are asking the Board to award contracts for the project.

Mr. Tang said the project is the reach of the Arroyo Mocho, which is located north of Stanley Boulevard between Isabel Avenue and Murietta Boulevard. Mr. Tang added that back in 2017, the heavy winter storms destabilized the area. This project is to repair and restore those sites. In addition, staff are looking to restore and improve the maintenance access roads on both the north and south banks of the creek.

Furthermore, the City of Livermore has asked Zone 7 to assist them with completing paving work for the Iron Horse Trail, which will allow the public to utilize this reach. The city plans to reimburse Zone 7 for these trail improvements as part of the Tri-Valley Intergovernmental Resources contract. The engineer's estimate for the project is $4.87 million. The contractor is expected to begin construction around the middle of May 2021 with completion by December 2022.

Staff went through the usual bidding process and received five bids. Teichert Construction was the apparent low bidder. Once staff reviewed their bid package, it was determined that they were the responsive, responsible, and low bidder for the project. Staff is recommending the construction contract be awarded to Teichert Construction for $4,250,893.

Additionally, staff is asking the Board to approve two more resolutions. One awarding a construction management support services contract, and the other for engineering and environmental support services.

Director Figuers said he felt the design was completely flawed years ago and he feels that in the next 20 years, Zone 7 will spend more money on this particular stretch.

Director Gambs said he applauds staff in working with the City of Livermore to build the trail section. He thinks it is great when public agencies cooperate with each other.

Director Gambs moved to approve the resolution to award the Construction Contract and Director Smith McDonald seconded the motion. The resolution was approved by a roll call vote of 5-1-0 with Director Figuers abstaining and Director Ramirez Holmes absent.

Director Palmer moved to approve the resolution for Construction Management Support Services Contract and Director Gambs seconded the motion. The resolution was approved by a roll call vote of 5-1-0 with Director Figuers abstaining and Director Ramirez Holmes absent.

Director Palmer moved to approve the resolution for the Engineering and Environmental Support Services Contract and Director Gambs seconded the motion. The resolution was approved by a roll call vote of 5-1-0 with Director Figuers abstaining and Director Ramirez Holmes absent.

Resolution No. 21-26 Award of Construction Contract for the Arroyo Mocho Stanley Reach Stabilization Project

Resolution No. 21-27 Construction Management Support Services Contract for the Arroyo Mocho Stanley Reach Stabilization Project

Resolution No. 21-28 Engineering and Environmental Support Services Contract for the Arroyo Mocho Stanley Reach Stabilization Project

Item 14 -

14. Award of Construction Contracts for Rehabilitation of Flood Control Channels - Phase 3 Project

Jessica Traynor, Assistant Engineer, gave a presentation on the award of contracts for the Rehabilitation of Flood Control Channels, Phase 3 Project, which covered the final 11 slide damages from the 2017 storms, and 11 slide damages from 2018 onwards. Construction would begin in May of 2021 and completed after two construction seasons in September 2022. The engineer's estimate was $3.5 million. The project construction locations are along the South San Ramon Creek in Dublin. There are four on Tassajara Creek and six on Arroyo Mocho, a total of seven sites in Dublin and 11 sites in the City of Pleasanton. Four bids were received, the apparent low bidder, Brannon Corporation, and the second low bidder, Innovative Construction Solutions (ICS), were considered non-responsive. She then explained how both did not meet the bid requirements. Staff recommended to award contract to the third lowest bidder Fanfa Inc.

Ms. Traynor presented the following four Resolutions to the Board to take action: Award of Construction Contract for the Rehabilitation of Flood Control Channels, Engineering Support Services Contract for the Rehabilitation of Flood Control Channels, Construction Management Support Services Contract for the Rehabilitation of Flood Control Channels, and Environmental Support Services Contract for the Rehabilitation of Flood Control Channels. She then welcomed questions and comments from the Board.

President Sanwong asked about the non-responsive determination and if staff compared their examples to the agency's project. She also asked for an example of a non-responsive bidder and if there were other project size requirements. Ms. Traynor confirmed and stated that was correct. She indicated that the bid specifications call for three project examples over $1.5 million each that were completed within five years of the project bid that are similar in nature and complexity.

Jarnail Chahal, Engineering Manager, explained that Brannon Corporation listed three projects in their bid package, however, the projects did not meet the $1.5 million requirement in the bid specifications. They could not demonstrate the experience to handle a similar project. Additionally, whether the firm could handle the complexities of a project of this caliber such as experience placing riprap. Their bid was non-responsive because they did not meet the specifications for the project. Typically, half of the total construction cost of the project is used as a guideline in seeking for a contractor with experience completing a project of similar complexity.

Director Smith McDonald asked if council was consulted as part of the decision-making process. Ms. Traynor confirmed.

Joe Seto, Flood Protection Principal Engineer, augmented what Mr. Chahal had shared about the requirements of firms submitting project examples over $1.5 million and experience with projects that are similar in nature and complexity of the project. Since these were bank slide repair projects within a livestream, and they are subject to strict regulations by the California Department of Fish and Wildlife, Regional Water Quality Control Board, and Army Corps of Engineers. There are many environmental and quality requirements associated with these permits. These are meant to look for minimum qualifications in the bid documents to look for similar previous experience. Mr. Chahal added that this was standard practice. Contractors must meet the qualifications for their bid to be responsive.

President Sanwong asked if a certain level of experience is usually required to work with the agencies mentioned, and Mr. Seto confirmed.

Director Green asked if the project, bid process and responsiveness had changed due to COVID-19. Ms. Traynor stated that the project was going back to normal. The 2020 construction season severely limited projects, but this year will be normal with construction crews taking precautions. Safety regulations and COVID-19 related health guidelines are also written into the specifications. Ms. Traynor indicated the only part of the bid process that was different was that the mandatory meetings were held by Zoom instead of in-person.

President Sanwong opened public comment.

Eric Rager with ICS prepared slides and a statement that he submitted to the Board earlier that day. He stated that the qualifications that were submitted at their bid time were all for projects that were completed in the last five years, projects over $1.5 million and within waterways. They also routinely work with regulatory agencies. He could have submitted 10 better projects of similar size, scale and nature of this project had the $1.5 million requirement not been there. These are 18 different sites that range in value between about $100,000 and $400,000. Their firm had experience placing riprap, working in live streams and projects similar in size, but that was not the requirement. He felt that what his firm met the requirements. President Sanwong asked which specific attachment Mr. Rager was referencing. He said there were three sections. The projects that submitted met the requirements, also that the requirements and the bid documents were very broad; however, the response received from Zone 7 were very specific and not included in the requirements. Secondly, ICS was cheaper than Fanfa Inc. He then stated that their firm would not be bidding due to the subjective nature of the review of their qualifications and dismissal, as he felt that it was unfair. Thirdly, he felt that Fanfa Inc. did not meet the qualifications.

Director Smith McDonald asked for staff to address some of the concerns that were raised, as she was not intimately familiar with the process. Ms. Traynor went into the details of why the second low bid was considered non-responsive. The first project listed was a soil corrective-measures implementation, and it is an environmental remediation project, so that project was not similar in nature or complexity to the flood control channel bank slide repairs. The second project was a slew maintenance project, which is a dredging project. This is sediment removal and dredging the bottom of a channel, which is also not similar in nature or complexity to the bank slide repairs that are required by this project. The third project that was submitted was accepted as similar in nature and complexity. The phase three project does have 16 sites with riprap installation, 12 sites with geogrid installation and one site with geo web and staff were looking for project experience that aligned with these.

Director Smith McDonald then asked if the $1.5 million was a standard threshold for these projects and an accurate measure of a bidder's ability to do the work. She indicated that Mr. Rager argued that they have other projects that are similar in nature, but they do not meet the $1.5 million threshold.

Mr. Seto stated that it was typical because the engineer cost estimate for the project was $3.5 million so it was set a slightly below 50%. Setting that too high could have eliminated potential bidders and staff wanted to invite a greater response. Mr. Chahal said that ICS did not have issues meeting the $1.5 million requirement. Out of the three projects, which were the requirement, only one of their projects was similar in complexity, the other two were not similar, and was the reason for their non-responsive bid. A form is included in the bid package to list three projects that will be reviewed. Staff cannot review the 10 other projects mentioned since they were not be part of the bid package.

Director Green asked how much of the criteria is Zone 7 and what part the State plays in defining some of this process. Mr. Chahal stated that having contractor qualifications is not a regulation, but it is very standard practice to make sure the contractor has the experience to complete construction. It is not regulated, but it is best practice.

Scott Shapiro, General Counsel, stated that the law does use these terms 'responsive' and 'responsible', and says that it must be the lowest, and there is extensive case law on what those mean. However, the ability to determine if a project meets that test is in the eyes of the agency. The question is whether the agency had substantial evidence in the record to make that determination. In this case, staff provided detailed explanations, even though the $1.5 million test was met, staff does not believe that it was responsive because it was not similar enough and it does not meet the complexity requirement identified to ensure the agency is protected. Additionally, that the contractor has a reliable record of being able to do that work. It is a mix of state law coupled with staff's determination in building the record for the agency to make the final determination.

Ms. Traynor said there was an irregularity with the Fanfa Inc. bid, they did not fill out the form quite correctly; however, they did submit their qualifications. Two of their projects were emergency bank slide repair projects and one was a Zone 7 maintenance contract that included bank slide repairs. The agency had used Fanfa Inc. before for similar work.

Mr. Seto stated that a subcontractor license number was not quite right, but staff were able to go online and verify that the subcontractor has a valid license. Fanfa Inc. cited their previous work with Zone 7, so the agency has records and can verify details of them internally. Staff was also able to verify that they were similar in nature and complexity. Despite minor irregularities, they are inconsequential because there are no financial incentives for those deviations, which were confirmed by counsel. It does not have any impact to the dollar amount.

Director Palmer moved to approve Resolutions 21-29, Award of Construction Contract for the Rehabilitation of Flood Control Channels, Phase 3 Project, and Director Smith McDonald seconded the motion. The Resolution was approved by a voice vote of 6-0, with Director Ramirez Holmes absent.

Director Palmer moved to approve Resolutions 21-30, Engineering Support Services Contract for the Rehabilitation of Flood Control Channels, Phase 3 Project, and Director Smith McDonald seconded the motion. The Resolution was approved by a voice vote of 6-0, with Director Ramirez Holmes absent.

Director Palmer moved to approve Resolutions 21-31, Construction Management Support Services Contract for the Rehabilitation of Flood Control Channels, Phase 3 Project, and Director Smith McDonald seconded the motion. The Resolution was approved by a voice vote of 6-0, with Director Ramirez Holmes absent.

Director Smith McDonald moved to approve Resolution 21-32, Environmental Support Services Contract for the Rehabilitation of Flood Control Channels, Phase 3 Project, and Director Palmer seconded the motion. The Resolution was approved by a voice vote of 6-0, with Director Ramirez Holmes absent.

Resolution No. 21-29 Award of Construction Contract for the Rehabilitation of Flood Control Channels, Phase 3 Project

Resolution No. 21-30 Engineering Support Services Contract for the Rehabilitation of Flood Control Channels, Phase 3 Project

Resolution No. 21-31 Construction Management Support Services Contract for the Rehabilitation of Flood Control Channels, Phase 3 Project

Resolution No. 21-32 Environmental Support Services Contract for the Rehabilitation of Flood Control Channels, Phase 3 Project

Item 15 -

15. Reports - Directors

As tonight's Board meeting falls on Administrative Professionals Day, President Sanwong expressed her thanks and appreciation to Donna Fabian, Executive Assistant, and her staff, Nzinga Arrington, Amanda Rogers and Lira Walter, for everything they do to support the Board and Zone 7.

President Sanwong requested the Board members let her know what their thoughts are in terms of returning to the Boardroom.

President Sanwong added that she attended a Liaison Committee meeting with Zone 7, DSRSD and the City of Dublin. Notes from that meeting should come out soon.

Director Palmer said she attended meetings with ACWA, the DCA Board, the Delta, and the California Water Commission, and DWR.

Director Gambs said he attended the Livermore Chamber of Commerce Business Alliance meeting on April 7th.

Item 16 -

16. Items for Future Agenda - Directors

Director Green mentioned that having an informational session to discuss potable reuse might be something to consider.

Item 17 -

17. Committees

There were comments or edits.

Item 18 -

18. Staff Reports

There were no questions or comments.

Item 19 -

19. Adjournment

President Sanwong adjourned the meeting at 10:39 p.m.