Zone 7 Meeting - October 18, 2023
MINUTES OF THE BOARD OF DIRECTORS
ALAMEDA COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT
October 18, 2023
The following were present:
Directors: Dawn Benson
Angela Ramirez Holmes
Staff: Valerie Pryor, General Manager
Osborn Solitei, Treasurer/Assistant General Manager - Finance
Jarnail Chahal, Acting Assistant General Manager - Engineering/Operations
Lizzie Foss, Financial Analyst
JaVia Green, Financial Analyst
Donna Fabian, Executive Assistant
General Counsel: Rebecca Smith, Downey Brand
Item 1 - Call Zone 7 Water Agency Meeting to Order
President Figuers called the Regular Meeting of the Board of Directors to order at 7:02 p.m.
Item 2 - Closed Session
The Board went into Closed Session at 6:03 p.m. and came out of Closed Session at 6:40 p.m.
Item 3 -
President Figuers stated that there was nothing to report out of Closed Session.
Item 4 -
President Figuers led the Pledge of Allegiance.
Item 5 -
All Directors were present.
Item 6 -
There was no public comment.
Item 7 -
Director Palmer made a motion to approve the Special Board Meeting minutes of September 13, 2023, and the Regular Board Meeting minutes of September 20, 2023, and Director Narum seconded the motion. The minutes were approved by a voice vote of 7-0.
Item 8 -
Director Benson made a motion to approve the Consent Calendar and Director Palmer seconded the motion. The Consent Calendar was approved by a roll call vote of 7-0.
Item 9 -
Lizzie Foss, Financial Analyst, stated that staff have engaged with untreated water customers, met with members of the Tri-Valley Conservancy, and sent emails to remind customers of upcoming meetings and to encourage participation. She added that staff presented the 2024 preliminary untreated water rate of $220 per acre foot to the Finance Committee, noting that this rate excludes any reconciliation balance added to it. Staff updated the committee on the untreated water program's outstanding reconciliation, which has a balance of $209 an acre foot and reflects an under collection from the untreated customers for calendar years 2021 and 2022.
Ms. Foss gave a brief overview of the proposed untreated water rate for calendar year 2024. She said the main objectives of this year's rate update were to develop untreated rates consistent with approved board principles, ensure financial sufficiency to meet water supply and program costs, and maintain fairness and equitability of rates while minimizing customer impacts.
Ms. Foss stated that the Finance Committee's recommendation is to implement a five-year phase-in of the outstanding reconciliation balance, as the Committee had concerns regarding a prolonged phase in approach, including risk of impact to treated water customers carrying the cost burden for the untreated water customers and risk of impact to future untreated customers paying for costs they did not incur. The Committee recommended the 2024 water rate be $263 an acre foot, which is an increase of $8.00 from the current year's rate.
Public comment was received from Mark Triska, wine grape grower, Gina Molinaro-Cardera, winery owner, wine grape grower and President of the Livermore Valley Winegrowers Association, Ken Wong, wine grape grower and Board member of the Livermore Valley Winegrowers Association, Diana Roberts, representing the Tri-Valley Conservancy, Karl Wente, of Wente Vineyards, and Kelly Abreu, a resident of Fremont.
After questions and discussion, Director Palmer made a motion to approve the item as presented, and Director Ramirez Holmes seconded the motion. The resolution was approved by a roll call vote of 7-0.
Item 10 -
Osborn Solitei, Treasurer/Assistant General Manager - Finance, introduced the team who worked on the project, including Fred Dilly from PFM Financial Advisors, Jon Guz from Stradling Yocca Carlson & Rauth (Bond Counsel), David Stinfil from Siebert Williams Shank (Underwriters), and staff from Zone 7.
David Stinfil provided a market update stating that inflation has affected the bond markets and there has been a lot of volatility over the past several months. He shared a snapshot of the past several weeks' of municipal market data (MMD) rate changes that showed how they have changed. He then discussed how changes in MMD rates could affect the Agency's upcoming issuance.
Fred Dilly stated that Agency staff and PFM had successful meetings with Standard and Poor's (S&P) and Fitch Ratings, who are responsible for assessing the Agency's credit worthiness. S&P recently upgraded the Agency to AAA, which the highest possible credit rating. Mr. Dilly stated that this means that Zone 7 will be able to sell bonds at a more competitive interest rate. Mr. Dilly added that the proceeds of the bonds will be used for the Chain of Lakes PFAS facility as well as other planned water system capital improvements and will also be used to pay cost of issuance.
Jonathan Guz provided an overview of the legal documents that would be approved along with the resolution. Those being the First Supplemental Installment Sale Agreement, the First Supplemental Trust Agreement, the Bond Purchase Agreement, the Continuing Disclosure Certificate and the Official Statement.
Director Ramirez Holmes asked if there is an option to refinance the bonds to which Mr. Solitei replied yes, at year 8.
Public comment was received from Kelly Abreu, a resident of Fremont.
Director Narum made a motion to approve the resolution to issue $30 million of bonds and Director Green seconded the motion. The resolution passed unanimously by a roll call vote of 7-0.
Item 11 -
JaVia Green, Financial Analyst, gave a presentation on the calendar year 2024 proposed municipal and industrial connection fees which is a routine and annual review of the water connection fees. She stated that board policy is to update the fee annually based on the engineering news record construction cost index (CCI). She added that the last comprehensive connection fee study was performed in FY 16-17. Staff will be updating that study, as an RFP was recently issued. Ms. Green stated that staff recommends a 2.4% increase which is reflective of the change in the CCI. That rate would increase the fees for the Alameda County Service area from $33,730 to $34,530 and from $32,360 to $33,130 for the Dougherty Valley service area. She added that staff presented this recommendation to the Finance Committee on September 14th, and the committee unanimously agreed to forward the item to the full Board for adoption.
Director Benson moved to approve the resolution and Director Palmer seconded the motion. The resolution passed unanimously by a roll call vote of 7-0.
Item 12 -
There were no comments on the Committee notes.
Item 13 -
[See "Minutes of the Board of Directors, Livermore Valley Water Financing Authority, Regular Meeting, October 18, 2023"]
Item 20 -
President Figuers called the Zone 7 Water Agency Meeting back to order at 9:19 p.m.
Item 21 -
Director Palmer submitted a written report. Director Ramirez Holmes attended meetings for the Los Vaqueros Joint Powers Authority in Washington D.C. Director Green attended the ACWA Region 5 event at Alameda County Water District and an ACWA Region 2 webinar on cannabis growth and the water issues that come with it.
Item 22 -
There were no items for future agendas.
Item 23 -
Ms. Pryor mentioned that there will be a Flood Open House on Saturday from 10:00 a.m. to 2:00 p.m. with hotdogs, treats and a goat petting zoo.
Item 24 -
President Figuers adjourned the meeting at 9:32 p.m.