Zone 7 Meeting - June 16, 2021
MINUTES OF THE BOARD OF DIRECTORS
ALAMEDA COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT
June 16, 2021
The following were present:
DIRECTORS: SANDY FIGUERS
MICHELLE SMITH MCDONALD
DIRECTORS ABSENT: ANGELA RAMIREZ HOLMES
ZONE 7 STAFF: VALERIE PRYOR, GENERAL MANAGER
OSBORN SOLITEI, TREASURER/ASSISTANT GENERAL MANAGER, FINANCE
COLTER ANDERSEN, PRODUCTION MANAGER
JARNAIL CHAHAL, ENGINEERING MANAGER
CAROL MAHONEY, INTEGRATED WATER RESOURCES MANAGER
AMPARO FLORES, INTEGRATED PLANNING MANAGER
JAVIA GREEN, FINANCIAL ANALYST
SAL SEGURA, ASSOCIATE ENGINEER
LILLIAN XIE, ASSISTANT ENGINEER
DONNA FABIAN, EXECUTIVE ASSISTANT
ALEXANDRA BRADLEY, COMMUNICATION SPECIALIST
COUNSEL: REBECCA SMITH, DOWNEY BRAND
Item 1 - Closed Session
The Board went into Closed Session at 6:00 p.m. and came out of Closed Session at 6:46 p.m.
Item 2 -
There were no reportable actions.
Item 3 -
President Sanwong called the meeting to order at 7:00 p.m. Roll call was taken and Director Ramirez Holmes was absent.
Item 4 -
Linda Kelly, Pleasanton resident, suggested the same terminology be used throughout all reports that are published. President Sanwong stated that it might be helpful to post a list of acronyms on the website.
Item 5 -
Director Palmer made a motion to approve Item 5a and Director Figuers seconded the motion. Item 5a was approved by a roll call vote of 5-1-1 with President Sanwong abstaining and Director Ramirez Holmes absent. Director Palmer moved to approve Item 5b and Director Figuers seconded the motion. Item 5b was approved by a roll call vote of 6-01, with Director Ramirez Holmes absent.
Item 6 -
Director Figuers moved to approve Item 6a and Director Gambs seconded the motion. Item 6a was approved by a roll call vote of 6-0, with Director Ramirez Holmes absent.
Resolution No. 21-44 Resolution of Support for Director Palmer to Serve as Chair of the ACWA Region 5 Board
Item 7 -
Sal Segura, Associate Engineer, reviewed the item for the Board and provided a presentation covering water supply, water use, and water costs. President Sanwong asked Mr. Segura to provide his perspective on water evaporation. Mr. Segura responded that the water was either absorbed by dry soil or the snow simply evaporated during warm weather, which is highly unusual. President Sanwong asked Mr. Segura to discuss the increase in evaporation at Lake Del Valle. Mr. Segura responded that the agency stands to lose water due to evaporation if more water is being stored. The presentation will be added as supplemental material to the Agency's website.
Vinay Pohray, Pleasanton resident, asked if charges from the State Water Project (SWP) on his property tax statement would increase as a result of the increased water costs to Zone 7. Valerie Pryor, General Manager, stated that the SWP costs that are recovered by the property taxes are capital costs, so they do not vary as much each year. Ms. Pryor added that the water costs that he was seeing were the annual costs of supply, which do vary each year. The property tax bill shows the capital costs, some of which is a debt service that was originally incurred for the project, and some of it is the long-term capital repair and rehabilitation. The costs will go up over time, but more so at the rate of inflation.
David Lunn, Livermore resident, asked why Zone 7 was unable to get all its water from the current banks this year, where the agency was only getting about 82% of its water. Mr. Segura responded that it was based on project capacities and allocation between the banking numbers. Zone 7 expects to recover 7,200 acre feet from Cawelo and expects to recover all but 500 of the 9,100 acre feet from Semitropic. The agency is trending more toward 85% but the remainder of it would be recovered in January or February of next year. If recovery were to occur more than once, the contractual amount allows the agency water from the groundwater bank, which would then not require a purchase of water from Mojave. Mr. Lunn then mentioned that the Urban Water Management Plan shows pumping 25,000 acre feet per year, around 52% of the groundwater pumping capacity this year and asked for the reasoning behind it. Mr. Segura stated that pulling that much water from the groundwater basin is something that Zone 7 has never met in the past. The capacity is there, but it must be balanced with the agency's facilities. If the agency pulled out now, it would have to be put back next year to maintain a balance between supply with demand.
Amparo Flores, PhD, Integrated Planning Manager, stated that Zone 7 is doing full recovery from Cawelo and Semitropic, and may receive a bit more from Semitropic beyond the contractual amount, but the way those are set up, particularly Cawelo Water District, they start to recover in the fall. Some of it does spill into the early part of next year, but then water would go into carryover for use in 2022 so it is not an issue and should be available for when it is needed in 2022.
Mr. Pohray asked if the water costs that were going from $4.5 million to $14 million were for untreated water and Ms. Pryor responded it was for both treated and untreated water users.
Director Palmer stated that the agency did not want to maximize how much water could be taken out of the groundwater or maximize the water usage if it was not needed, because there may be a multiple-year drought, in which case plans must be made for the future.
Director Gambs stated that it is good to see so much participation from the public.
Item 8 -
Dr. Amparo Flores reviewed the item for the Board and provided a presentation on the proposed second water transfer agreement with Mojave Water Agency. Dr. Flores stated that staff are recommending that the Board authorize the General Manager to negotiate and execute an agreement with Mojave Water Agency for this second water transfer of up to 3,600 acre feet at a cost of $1,000 per acre foot with a total purchase cost not to exceed $3.6 million. The presentation will be added as supplemental material to the Agency's website.
Director Gambs asked what the benefit of purchasing the water would have on Zone 7 next year and what would happen with or without it. Dr. Flores said without it, the agency is looking at a lower carryover in San Luis Reservoir. She added that Zone 7 typically likes to target around 10,000 acre feet relative to the demands. Forgoing the purchase would mean entering with closer to 7,000 acre feet. The agency was looking at very low SWP allocation next year, perhaps even starting at 0% at the beginning of the year, but it could possibly increase depending on rainfall. Given those conditions, it seems prudent to have some water readily available in the system. Director Gambs asked what that might be in terms of cutbacks. Ms. Pryor responded that there will be a deficit in the statewide system by the end of this calendar year that it is probable that 2022 will be worse. There will be less water available, and likely less available to purchase, so a realistic scenario is to consider mandatory conservation.
Director Green asked what this is like compared to other agencies or what was experienced in previous droughts when it comes to cost increases. Ms. Pryor responded that the cost of water is going up but Zone 7 was one of the first agencies to contact Mojave, so the first tranche of water was purchased at $850 per acre foot. The second one is $1,000 per acre foot. The costs go up in dry years. During wet years like in the previous year water was purchased from Napa County for under $300 per acre foot. Dr. Flores added that Mojave is selling carryover water to four other agencies at $1,000 per acre foot, and staff had to fight to get the 3,600 acre feet. There was a lot of interest in this water.
President Sanwong thought about 2022 and the probability of mandatory conservation and asked if staff is starting to think about how to message and communicate it. Ms. Pryor responded that staff are working with the retailers and jointly got the request for 10% conservation out, encouraging the public that water saved today will be water available for next year. Ms. Pryor added that the Department of Water Resources (DWR) and the federal Central Valley Project will assess where the state is at the end of summer. This is when there will be a better idea about what 2022 may look like so the agency can start the planning and messaging. It is always good to notify people now that next year will likely be worse.
Mr. Pohray asked if there are rules or regulations in place with respect of this kind of pricing by a fellow agency. Ms. Pryor replied that there are no regulations. It is driven by market forces. Director Palmer added that this is what happens in a drought.
Director Palmer moved to approve the water transfer agreement and Director Smith McDonald seconded the motion. The item was approved by a roll call vote of 6-0 with Director Ramirez Holmes absent.
Resolution No. 21-45 2021 Second Water Transfer Agreement with Mojave Water Agency
Item 9 -
Dr. Amparo Flores reviewed the item for the Board and provided a presentation on proposed rebate increases for the High-Efficiency Washer Program, the Weather-Based Irrigation Controllers, and the Water-Efficient Lawn Conversions. Dr. Flores stated that $165,000 was available in the fiscal year 21-22 budget for rebates, and staff were hoping to make this effective at the beginning of the coming fiscal year, while continuing to research the availability of drought funding for these programs and additional grant opportunities. Zone 7 already had about $80,000 of grant funding available from Prop 1 to cover the next three years that could help supplement the program. The presentation will be added as supplemental material to the Agency's website.
Director Smith McDonald asked if there was a budget for marketing. Ms. Pryor responded that there will be a press release and appropriate postings on social media. Dr. Flores stated that there is separate funding for public outreach, both in the conservation program budget, and also in the General Manager's budget. Director Smith McDonald suggested reaching out to local real estate agents, as well as people that are making purchases for new appliances or making decisions about landscape. Dr. Flores mentioned that staff were working closely with the retailers who use bill inserts and their platforms to advertise. Director Palmer asked if the amounts were similar to other water agencies and Dr. Flores responded that they were comparable and there is more information in the staff report about what other agencies are doing.
Director Smith McDonald stressed the importance of a streamline rebate application process to make it easy for people to apply. Dr. Flores stated that staff is working on streamlining the process and making online submission easier with the launch of the new website. Director Green asked if there was anything on the horizon for resiliency funding and where the funding for these programs originally came from. Ms. Pryor explained there is funding in Fund 100 and from Prop 1.
The Directors agreed to support the increase in the rebate program.
Item 10 -
Lillian Xie, Assistant Engineer, reviewed the item for the Board and provided a presentation on Desktop Groundwater Contaminant Mobilization Study which will help characterize the contaminants in the groundwater basin which provides the overall benefit of helping with water supply reliability, groundwater quality and management. The presentation will be added as supplemental material to the Agency's website.
Staff advertised a request for proposals (RFP) and emailed it to 17 consultants. Staff received one proposal from Kennedy/Jenks and assembled a review panel made up of Zone 7 and retailer staff to review it. The review panel concluded that Kennedy/Jenks was qualified for the project.
The scope of work for this study involves five key tasks; collect, organize, and review groundwater data; convert current groundwater model to a new model that will better inform on the behavior of contaminants in our groundwater basin; simulations for present and future operations, and for scenarios in which we introduce purified water into our groundwater basin; identify mitigation measures to minimize well clogging; to prepare the project report. The estimated cost for this project is approximately $165,000, which includes a 10% contingency. The funding will be split from two different funds with 60% coming from Fund 100, water operations, and 40% coming from Fund 130, connection fees.
Director Gambs asked if the new groundwater model would have the capability to track toxins and if it could be turned over to Zone 7 staff in the event modeling is needed to run scenarios without having to hire a consultant. Ms. Xie responded that the new model will take into account the tracking of toxins and Zone 7 will have the ability to make modifications to the model as needed.
President Sanwong asked how much of the new model will be visualization, something that could be viewed on a computer where 3D rendering is available.
Melanie Tan, Project Manager of Kennedy/Jenks Consulting, responded that they can create heat maps as previously done, using different gradients with a higher concentration in red and then going through orange and then green for a lower concentration. How contaminants move in space can also be seen.
President Sanwong stated that she would like the visualization of the model as part of the presentation to the Board.
Director Green stated that she supports awarding of this contract. The information supplied is needed and the portion that involves potable reuse she thinks is being properly funded, and this is something she will be supporting.
Director Palmer moved to approve the Award of Contract for Desktop Groundwater Contaminant Mobilization Study and Director Gambs seconded the motion. The item was approved by a roll call vote of 6-0 with Director Ramirez Holmes absent.
Resolution No. 21-46 Award of Contract for Desktop Groundwater Contaminant Mobilization Study
The Board took a 7-minute break.
Item 11 -
JaVia Green, Financial Analyst, reviewed the item for the Board and provided a presentation on the proposed budget amendment. Three changes to the budget decreased it by $8.4 million dollars. The changes were to treated water sales revenue, cost-sharing agreement revenue and water connection fees. There were five proposed changes that increased the budget by $16 million in the areas of labor and personnel costs in Fund 200, water production costs, services agreements, and capital projects in Fund 120. The presentation will be added as supplemental material to the Agency's website.
Mr. Pohray asked if the agency was dropping to below the reserve level as a result of increased water costs and an increase of $5 million to the funding of new projects. Ms. Green answered that the funding of new projects included an assumption that 75% of the cost would be reimbursed. He explained that the cost for the projects should not be at the expense of ratepayers. President Sanwong explained that projects could not be delayed due to the drought. The agency has a capital improvement plan and there could be emergency projects like a broken pipe.
Director Smith McDonald moved to approve the Mid-Cycle Budget Amendment for FY 2021-22 and Director Palmer seconded the motion. The item was approved by a roll call vote of 6-0 with Director Ramirez Holmes absent.
Resolution No. 21-47 Mid-Cycle Budget Amendment for FY 2021-22
Item 12 -
Osborn Solitei, Treasurer/Assistant General Manager - Finance, reviewed the item for the Board noting a few changes. Two of the changes were required by the California Debt Investment Advisory Commission, and the other two were recommended by the Finance Committee. There were no questions or comments from the Board.
Director Gambs moved to approve the Investment Policy and Director Palmer seconded the motion. The item was approved by a roll call vote of 6-0 with Director Ramirez Holmes absent.
Resolution No. 21-48 Adopting Investment Policy and Delegating Authority to Deposit and Invest Funds to The Treasurer
Item 13 -
Ms. Pryor reviewed the item for the Board and stated that Zone 7 participates in the Delta Conveyance Project and the Delta Conveyance Design and Construction Authority (DCA) where Director Palmer was appointed by the Board president to serve in 2018. In January, there was an amended JPA agreement and as a result, Zone 7 and Alameda County Water District (ACWD) share a seat. The general arrangement is that one agency will have the director and one agency will have the alternate and a rotation will take place every two years. Staff were asking the Board to authorize the General Manager to sign a letter of understanding with ACWD.
ACWD acted on this at their board meeting in the previous week and confirmed Director Palmer will serve another two years, and selected their director, John Weed as the alternate.
Director Palmer stated that she has been deeply involved in the DCA and they recently had a change in the way the Board is structured. Director Palmer added that she is vice president of the Board and also chair of the stakeholder's engagement committee.
Director Gambs moved to approve the item and Director Green seconded the motion. The item was approved by a roll call vote of 6-0 with Director Ramirez Holmes absent.
Resolution No. 21-49 Consider Appointment of Representatives to the Delta Conveyance Design and Construction Authority
Item 14 -
Mr. Solitei reviewed the item and policy for the Board and said it was discussed at length at the last Administrative Committee Meeting with minor changes being made. The Committee recommended the policy be forwarded to the full Board for approval.
Director Palmer moved to approve the item and Director Smith McDonald seconded the motion. The policy was approved by a roll call vote of 6-0 with Director Ramirez Holmes absent.
Resolution No. 21-50 Amendment to Zone 7 Board of Directors Compensation and Expense Reimbursement Policy
Item 15 -
Mr. Solitei reviewed the item for the Board and stated that this item was also discussed at length at the last Administrative Committee Meeting. The policy states that Board compensation be reviewed every two years. Staff conducted a compensation survey of comparable agencies; the Alameda County Water District, Valley Water and East Bay Municipal Utility District.
Committee members asked if Board members were eligible to receive benefits such as medical and retirement and were told they were eligible, but the Committee recommended the Board not receive these benefits.
The Administrative Committee considered three options; 1) maintain the current compensation level; 2) set it to the average of comparable agencies; or 3) increase the compensation 5% per calendar year, so that would be 10% since it has been two years.
Director Smith McDonald wanted to advocate for what she thought was a nominal increase when it came to the expense to the agency. The chart and staying close to the mean of other agencies reflected the value of the work that the governance team conducts on behalf of Zone 7. She wanted to make sure that future Board candidates have an understanding that there is value to the work they are doing which in line with the value of work at other water agencies.
Director Palmer moved to approve the Ordinance and Director Green seconded the motion. The item was approved by a roll call vote of 6-0 with Director Ramirez Holmes absent.
Ordinance No. 2021-01 An Ordinance Increasing the Compensation of Members of the Board of Directors of Zone 7 of the Alameda County Flood Control and Water Conservation District
Item 16 -
There were no comments from the Board.
Item 17 -
President Sanwong stated that this was her final Board Meeting as Board President and thanked everyone for their work in the past year. She indicated that she met a lot of her goals and priorities this past year; her biggest being community education, specifically for rate payers. Her accomplishments during her time as Board President included partnering with students from the Go Green Initiative and Museum on Main to produce the Hometown Water documentary, giving presentations at numerous organizations, and attending the Lake Del Valle ribbon cutting ceremony at the new visitor center. One of the projects she wants to work on in the coming year is cyber security.
Director Palmer drew attention to her PFAS report. It outlined some of what was accomplished in the last ACWA PFAS work group meeting. They were hoping PHGs would be issued in June. She cautioned that filters such as granular activated charcoal or ion exchange columns may come under CEQA, which could then become very difficult for agencies to handle. She mentioned that the inquiry on whether operators need to be cleared with Live Scan is an upcoming subject. She and Director Gambs gave a presentation to the Rotary Club on Tuesday; and she would be presenting to Dublin Rotary in October about the Delta conveyance.
Director Gambs stated that his part of the Rotary Club presentation included a Zone 7 101 and the challenges the agency faces. He then turned it over to Director Palmer, who discussed state water problems and climate change. He complimented President Sanwong on her enthusiasm, energy, and leadership; and applauded her efforts on outreach.
Director Smith McDonald thanked President Sanwong for her leadership in the most unusual year and how she always handled it with grace and a smile. She also thanked Ms. Pryor and her staff for managing the agency through a global pandemic.
Director Green thanked President Sanwong for her leadership. She felt President Sanwong had done an excellent job of representing the Board.
Item 18 -
Item 19 -
Ms. Pryor highlighted awards that Zone 7 recently won. One being the Government Finance Officers Association of the United States and Canada, GFOA Distinguished Budget Presentation Award, which was the sixth consecutive award the agency received for its budget, a very prestigious award. Zone 7 also won two communications awards from the Academy of Interactive and Visual Arts for our Flood Ready Freddy campaign, and also our revised 2019-20 Annual Report.
Item 20 -
President Sanwong adjourned the meeting at 9:34 p.m.