The first item addressed a request from the International Federation of Professional and Technical Engineers, Local 21, regarding longevity pay for its members at Zone 7 Water Agency. The request, made between September 2024 and November 2024 by Local 21 representatives and members, was submitted through Human Resources and directly to the Board. On September 6, 2023, Alameda County, Zone 7, and Local 21 entered into a Memorandum of Understanding, which specifically excluded Zone 7 employees from the longevity pay provision under Section 13(d)(3). The Board acknowledged Local 21's request and recommended that it be submitted during Zone 7's negotiations set to begin in January 2025.

The second item will be addressed under Agenda Item 11, Authorized Water Transfer Option.

Item 4 -

4. Pledge of Allegiance

Director Benson led the Pledge of Allegiance.

Item 5 -

5. Roll Call of Directors

All Directors were present.

Item 6 -

6. Public Comment on Non-Agenda Items

There was no public comment.

Item 7 -

7. Minutes

Director Palmer moved to approve the minutes from the regular Board meeting on November 20, 2024, seconded by Director Narum. The motion was approved by a 7-0 voice vote.

Item 8 -

8. Consent Calendar

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

Item 9 -

9. Independent Auditor's Report and Annual Comprehensive Financial Report (ACFR) for the Fiscal Year Ended June 30, 2024

In the absence of the auditors, the report was presented by Osborn Solitei. The presentation covered two key components: the auditors' report and the financial health of the Agency.

The auditors conducted their work in compliance with Government Auditing Standards, including an evaluation of internal controls over financial reporting and an assessment of the agency's financial statements prepared by management. They concluded that the financial statements were presented fairly in all material respects and that there were no conditions or events raising substantial doubt about the agency's ability to continue as an ongoing concern. The auditors also affirmed their independence and compliance with ethical standards.

The financial statements reflected the agency's adherence to Governmental Accounting Standards Board (GASB) requirements, including GASB 100, which had no material impact. Key disclosures were reviewed, including cash and investments (Note 2), long-term debt (Note 6), pension liabilities (Note 8), and other post-employment benefits (OPEB) liabilities (Note 9). There were no misstatements, disagreements with management, or significant difficulties reported during the audit process.

As of June 30, 2024, the agency's net position increased by $32.2 million, totaling $618 million. Cash and investments totaled approximately $339 million, reflecting growth from the prior fiscal year. Restricted cash included $35 million allocated to debt issued in the previous year. The report highlighted the agency's continued financial stability, with no material weaknesses identified in the audit.

Director Figuers moved to approve the Resolution and Director Narum seconded the motion. The Resolution was approved by a roll call vote of 7-0.

Item 10 -

10. Recommend Voting to Dissolve the Los Vaqueros Reservoir Expansion Joint Powers Authority

Valerie Pryor provided an overview of the Los Vaqueros Reservoir Expansion Project and the associated JPA, in which Zone 7 participated as a member. The Contra Costa Water District, the owner of the reservoir, voted on November 6, 2024, to end its participation in the expansion project, effectively terminating the project. Consequently, the JPA is preparing for dissolution, with a vote expected at its January meeting.

The Board discussed directing its representative and alternate representative to vote in favor of the dissolution. Upon dissolution, remaining assets and funds will be returned to the member agencies, including Zone 7. The dissolution process will also address issues such as ownership of design documents, including plans for the dam, pumping station, and Transfer-Bethany Pipeline.

The Board discussed the challenges that led to the decision, including a five-year downtime for the reservoir and concerns about water supply for Contra Costa Water District customers during the construction period. The Board expressed hope that some elements of the project, such as the Transfer-Bethany Pipeline, might be revisited in the future. The winding-down process is expected to be completed by May 2025, following member agency resolutions anticipated in February.

Director Benson made a motion to approve the Resolution and it was seconded by Director Palmer. The resolution passed with a roll call vote of 6-1 with Director Brown dissenting.

Item 11 -

11. Authorize the Water Transfer Option Agreement

Ken Minn presented an overview of the proposed water transfer option agreement, aligning it with Strategic Goal A and Initiative 2, which focuses on water supply reliability. He provided an update on the current water supply conditions, which indicate a 5% initial allocation for State Water Project water, translating to a Table A allocation of 4,000 acre-feet out of a 40,000-acre foot demand. Given these conditions, Zone 7 anticipates needing 3,700 acre-feet of water supplies from water transfers. The operational plan also factors in local runoff, groundwater basins, and current banking, but water transfers remain a necessity.

Mr. Minn referenced the 2022 water supply evaluation presented last year, which projected a need for annual water transfers of approximately 10,000 acre-feet through the 2030s. This volume will not only address immediate water supply needs but will also be stored for future use to bolster long-term reliability and reduce the risk of shortage in the 2030s.

The proposed transfer option involves working with the Sutter Extension Water District, which holds senior water rights on the Feather River. The water will be transferred via the Feather River and the Delta, ultimately reaching Zone 7's service area. This type of transfer, known as groundwater substitution transfer, is one of the available options for securing water supply. The key terms of the agreement include a purchase option for up to 3,000 acre-feet per year over the next five years, with an option fee of $13 per acre-foot. The water cost is tied to the State Water Project allocation, with prices ranging from $550 to $875 per acre-foot depending on the allocation. In addition, Zone 7 will cover up to $20,000 annually in administrative costs related to the agreement, including environmental filings and permitting.

Mr. Minn also outlined some limitations, such as the transfer window between July and September and the potential for carriage water losses as the water moves through the Delta. Carriage losses could reduce the amount of water actually available, with potential losses of up to 33%. However, the cost of water remains relatively competitive, particularly when compared to the cost of purchasing water on the open market, where prices have ranged from $850 to $2,000 per acre-foot in recent years.

In closing, Mr. Minn recommended that the Board authorize the General Manager to negotiate, execute, and amend the agreement, exercise the purchase option as needed, and execute any necessary supplementary agreements, including environmental certifications and permitting. Staff will continue to explore additional transfer opportunities and monitor water supply conditions.

Director Narum inquired whether the projections assumed 100% of Pleasanton's water supply needs would be met, to which Minn confirmed that this was included. He also clarified that while feasibility studies are ongoing for new water sources, the current planning assumes full supply to Pleasanton.

Director Brown requested a copy of the presentation, and Valerie Pryor confirmed that it would be distributed.

President Gambs asked if there were other participants in similar agreements with Sutter Extension Water District. Mr. Minn responded affirmatively, noting that the district had partnered with other agencies, including Metropolitan Water District, in the past. He also confirmed that this agreement is set for five years, with Sutter comfortable starting with this duration to establish the relationship.

Director Figuers left the meeting at 7:53 p.m.

Director Narum moved to approve the Resolution and Director Green seconded the motion. The Resolution was approved by a roll call vote of 6-0 with Director Figuers absent.

Item 12 -

12. Temporary Adjournment/Continuance of Zone 7 Water Agency Meeting

President Gambs adjourned the Zone 7 Water Agency meeting at 7:56 p.m.

Item 13 -

13. Call Livermore Valley Water Financing Authority (LVWFA) Regular Meeting to Order

President Gambs called the Livermore Valley Water Financing Authority Regular Meeting to Order at 7:56 p.m.

Item 14 -

14. Roll Call of LVWFA Board

Director Figuers was absent.

Item 15 -

15. Public Comment

There was no public comment.

Item 16 -

16. Livermore Valley Water Financing Authority, Water Revenue Bonds, 2018 and 2023 Series A for the Year Ended June 30, 2024, Update

Osborn Solitei provided an update on the Livermore Valley Water Financing Authority revenue bonds. He reported that the funds from the 2018 Water Revenue Bond Series A have been fully utilized, with all associated projects completed. The 2023 bonds, totaling $28.8 million, were issued last year to fund ongoing projects, including the Chain of Lakes PFAS project. As of June 30, 2024, approximately $3.2 million of the 2023 bond proceeds have been spent, with the remaining funds accruing interest toward the project.

Mr. Solitei also discussed arbitrage, noting that the evaluation for the 2023 bonds is ongoing, as these were issued in October 2023 and closed in November 2023. The results of the arbitrage calculation will be reported once completed. Updates on the 2023 bond and related projects will continue to be provided in future reports. There were no comments from the Board.

Item 17 -

17. Adjournment of Livermore Valley Water Financing Authority Regular Meeting

President Gambs adjourned the Livermore Valley Water Financing Authority Regular Meeting at 8:00 p.m.

Item 18 -

18. Call Zone 7 Water Agency Meeting to Order

President Gambs called the Zone 7 Water Agency Meeting back to Order at 8:00 p.m.

Item 19 -

19. Reports - Directors

President Gambs wished everyone a Merry Christmas and Happy New Year. He reflected on his attendance at the recent ACWA Conference and discussed the evolving challenges facing California water agencies over the past 40 years, including reduced State Water Project entitlements, increased droughts, and stricter regulations. He emphasized the benefits of the Agency's participation in ACWA, highlighting its role in addressing water supply and quality issues. He acknowledged the long-standing contributions of Director Palmer and others in representing the agency within ACWA.

Director Palmer reported on her attendance at various meetings, including discussions on State Water Resource Control Board issues and the Healthy Rivers and Landscapes voluntary agreements. She praised Zone 7's advocacy for these agreements and highlighted concerns about the potential negative impacts of unimpaired flows on water availability for agriculture and municipalities. She urged continued attention to these issues. She also attended the Alameda County Special Districts Association luncheon, and participated in several ACWA committee meetings, addressing topics such as lead copper rules and groundwater management.

Director Green thanked Ken Minn for arranging a site visit to the Agency's first test well in Pleasanton, which she found to be informative. She expressed appreciation for Colleen Winey and Jacob Danielsen's assistance and noted the team's efforts to minimize disruption to neighbors. She praised their commitment to keeping noise levels within acceptable limits and maintaining a clean worksite.

Director Benson also attended the ACWA conference and highlighted several key points. She shared that Director Palmer chaired the Region 5 membership meeting, where discussions included a special scholarship program in honor of Bette Boatmun, a former ACWA president and CSDA leader.

Item 20 -

20. Items for Future Agenda

There was no request for items for a future agenda.

Item 21 -

21. Staff Reports

Valerie Pryor highlighted several key updates from her staff report. She began by noting the publication of an article in the Hydrological Processes journal, which stems from a study conducted by the Lawrence Livermore National Laboratory in partnership with Zone 7 and funded by the Department of Energy. The study, titled How Rains and Floods Become Groundwater: Understanding Recharge Pathways with Stable and Cosmogenic Isotopes, is now a published article, with staff members Jacob Danielsen, Mike Garguilo, and Ken Minn, as well as Zone 7 Water Agency, listed as authors.

Next, Ms. Pryor provided an update on the Chain of Lakes Wells PFAS Treatment Facility, noting that the vessels for the facility have arrived and the project is progressing as planned. She also brought attention to the first annual Tri-Valley Water Conservation Art Contest for K-12th grade students. This contest is a collaborative effort between the cities of Livermore, Pleasanton, Cal Water Service Company, and Dublin San Ramon Services District. The contest's theme, Habitat Heroes: Transforming Lawns into Vibrant Native Gardens, encourages students to create artwork that celebrates water conservation through various mediums, including photography, painting, and digital artwork. The grand prize for the contest is an iPad, and the submission deadline is set for 5:00 p.m. on March 3rd.

Director Brown requested that a link be provided to facilitate sharing the art contest information.

Item 22 -

22. Adjournment - President Gambs adjourned the meeting at 8:18 p.m.

You are here

Zone 7 Meeting - December 18, 2024

Site Search