Zone 7 Meeting - May 20, 2026

Director Palmer requested a correction to clarify that the Chain of Lakes Conveyance System project would convey water through the turnout from the South Bay Aqueduct to the Del Valle Water Treatment Plant. Director Palmer made a motion to approve the minutes as amended. The motion was seconded by Director Benson and approved by a voice vote of 7-0.

Director Benson moved to approve the minutes of the regular Board meeting held on April 15, 2026. The motion was seconded by Director Green and approved by a voice vote of 7-0.

Item 8 -

8. Consent Calendar

Director Palmer moved to approve Items 8b and 8c, seconded by Director Gambs. The motion was approved by a roll-call vote of 7-0.

Public comment was received from Chad Weetman, Brian Quan, and Margie Barry, residents of Pleasanton, regarding Item 8a.

Director Palmer moved to approve Item 8a, seconded by Director Green. The motion was approved by a roll-call vote of 7-0.

Item 9 -

9. Public Hearing for the 2025 Urban Water Management Plan and 2025 Water Shortage Contingency Plan >

Neeta Bijoor, Principal Water Resources Planner, presented the Draft 2025 Urban Water Management Plan (UWMP) and Water Shortage Contingency Plan (WSCP). She explained that the UWMP is required by the California Water Code to be updated every five years and serves as a long-range planning document evaluating water supplies and demands through 2045, with optional planning through 2050. Ms. Bijoor reviewed the extensive coordination effort undertaken with Zone 7's retailers and stakeholders during development of the plan and outlined future water supply projects anticipated to support long-term reliability, including Sites Reservoir, the Chain of Lakes Conveyance System, and the Delta Conveyance Project. She also discussed exploratory concepts such as potable reuse and desalination.

Ms. Bijoor explained that the plan demonstrates reduced reliance on Delta supplies through conservation efforts, conjunctive use of groundwater storage, and future local and regional supply projects. She reviewed the methodology used to forecast future water demands and supplies and reported that projected supplies are expected to meet demands under normal-year and single dry-year conditions throughout the planning horizon if planned projects are implemented. Under a five-year drought scenario at the end of the planning horizon, a limited shortage could occur by the fifth year but could be addressed through conservation measures, water transfers, and additional supply projects. Ms. Bijoor also reviewed the Water Shortage Contingency Plan, including the process used to evaluate water shortages and the five shortage stages, along with the associated voluntary and mandatory conservation actions.

Director Figuers asked how long a shortage condition would need to exist before triggering a shortage stage. Ms. Bijoor explained that the determination is adaptive and depends on the nature of the shortage event. Director Benson asked about the highest shortage stage previously experienced by Zone 7, and Valerie Pryor, General Manager, responded that the Agency had generally reached Stage 2 conditions during past droughts.

Director Green asked questions regarding coordination with retailers, drought surcharges, emergency operations procedures, future supply reliability, and assumptions related to Sites Reservoir and the Delta Conveyance Project. Staff explained that Zone 7 works closely with retailers to coordinate drought response measures, described the purpose of drought surcharges and the Agency's emergency operations structure, and discussed long-term supply planning assumptions. Director Green also requested consideration of revised wording in the draft plan regarding future water supply assumptions and asked questions regarding the methodology used by retailers to develop demand projections. Staff explained that the projections were based on land-use planning assumptions and retailer-provided demand forecasts.

Director Gambs asked whether the shortage stages and associated actions were prescribed by the State and whether water transfers were incorporated into the plan. Ms. Bijoor confirmed that the State requires agencies to organize their plans using specified shortage stages and explained that water transfers are included as a supply augmentation measure. Director Palmer asked for clarification regarding reductions in Delta reliance and the treatment of Sites Reservoir supplies within the analysis. President Narum asked about the methodology used to establish drought surcharges, and Osborn Solitei, Treasurer/Assistant General - Finance, explained that guidance is provided through the Agency's rate study and Water Shortage Contingency Plan.

Public comment was received from Andrew Turnbull, a resident of Sunol.

Director Green reiterated her concerns regarding long-term water supply reliability and future water supply planning. Director Gambs commented on Zone 7's history of reliable water supplies and highlighted the benefits of the Agency's groundwater storage programs and planned infrastructure projects. President Narum noted the significant improvements in water supply reliability since the 2014-2015 drought and commended staff, the Board, and the retailers for their efforts to diversify water supplies and improve system reliability. Director Palmer commented on the importance of developing additional regional interties to improve emergency water supply resiliency and allow agencies to assist one another during emergencies.

Staff indicated that the final plans would be presented to the Board for consideration and adoption at the June 17, 2026, Board meeting.

Item 10 -

10. Renewal of Municipal and Industrial Water Supply Contracts >

Valerie Pryor presented the proposed renewal of Zone 7's Municipal and Industrial Water Supply Contracts with the Agency's retailers. She explained that Zone 7 has maintained long-term water supply contracts with its retailers since 1962 and reviewed the history of the current contractual framework, which was established through contract renewals in the 1990s. Ms. Pryor acknowledged the significant contributions of Water Resources Manager Ken Minn, Associate Planner Kevin Padway, and General Counsel Rebecca Smith in developing the new agreements. She reported that staff initiated the contract renewal process in 2023 and worked collaboratively with the retailers through numerous group and individual meetings, as well as a technical work group, to negotiate updated agreements that would extend water supply service through December 31, 2055.

Ms. Pryor explained that the proposed contracts preserve the key principles and substantive provisions of the existing agreements while updating language to reflect current laws, regulations, and operational practices. She reviewed several key provisions, including Zone 7's role as the exclusive water supplier, water availability limitations, conservation requirements, flow regulation authority, groundwater production quotas, and Zone 7's role as the exclusive groundwater sustainability agency. She also noted that special provisions were included for Dublin San Ramon Services District (DSRSD) and the City of Pleasanton related to groundwater production quotas and other existing operational arrangements. In the case of DSRSD, several prior agreements associated with the Mocho PFAS Treatment Plant site were incorporated into the proposed contract.

Director Gambs asked whether the provision addressing DSRSD's groundwater production quota applied only to the cost calculation for the quota or also specified the source of the water delivered. Ms. Pryor explained that the provision establishes how the groundwater production quota rate is calculated but does not specify the source of the water. Director Gambs also asked about the operational coordination provision included in the Pleasanton contract. Ms. Pryor explained that the provision formalizes Zone 7's commitment to make good-faith efforts to coordinate with Pleasanton regarding its preferred blend of groundwater and surface water supplies, while recognizing that Zone 7 must continue managing the overall water supply portfolio for all retailers.

Director Gambs further asked whether the Pleasanton contract would require amendment if future agreements related to groundwater production facilities were executed. Ms. Pryor responded that staff believes the language in the proposed contract is sufficiently broad to accommodate the operational arrangements currently under discussion and does not anticipate that an amendment would be necessary.

Director Palmer moved to approve the Renewal of Municipal and Industrial Water Supply Contracts, seconded by Director Green. The motion passed by a roll-call vote of 7-0.

Item 11 -

Colleen Winey, Acting Senior Geologist, presented an update on the Regional Groundwater Facilities Improvement Project and requested authorization for the General Manager to negotiate and execute a cooperating agreement with the City of Pleasanton for Phase II and Phase III of the project. Ms. Winey reviewed the work completed to date, including yield testing, water quality analysis, groundwater modeling, the feasibility study, basis of design report, and cost estimate. She explained that the preferred project consists of two new production wells at Tennis Community Park and Hansen Park, approximately 4,000 linear feet of pipeline connecting the wells to the existing Hopyard Chloramination Facility, and improvements to the chloramination facility.

Ms. Winey reported that the Pleasanton City Council approved moving forward with the project at their April 2026 meeting and that retailers expressed support for the project during a May 2026 meeting. She explained that the proposed cost-sharing arrangement is based on the estimated production capacity of the new wells. Of the estimated 9,700 acre-feet per year of production, 3,500 acre-feet would be allocated to Pleasanton's groundwater pumping quota and 6,200 acre-feet would be available to Zone 7. Based on this allocation, Pleasanton would be responsible for approximately 36 percent of the capital costs and Zone 7 approximately 64 percent. The total project cost is estimated at $42 million, with approximately $15 million attributable to Pleasanton and $27 million attributable to Zone 7.

Ms. Winey explained that under the proposed Phase III operating arrangement, the new wells would be integrated into Zone 7's transmission system, with Zone 7 owning, operating, and maintaining the facilities. Zone 7 would continue to sustainably manage the groundwater basin and would produce Pleasanton's groundwater pumping quota in a manner similar to the existing arrangement with Dublin San Ramon Services District.

Director Gambs asked how the proposed agreement relates to the Municipal and Industrial Water Supply Contract approved under the previous agenda item and whether the arrangements should be incorporated into a single agreement. Ms. Pryor explained that the proposed groundwater facilities agreement is a separate arrangement that has not yet been finalized and that it is referenced in the special provisions of the water supply contract. Director Gambs also asked questions regarding future agreement administration and groundwater pumping quota provisions.

Director Green asked why the cost allocation for the chloramination facility improvements differed from the overall project cost allocation. Ms. Winey explained that the facility currently serves existing Zone 7 wells and therefore the allocation is based on the total capacity of all wells utilizing the facility rather than only the new wells. Director Green also asked about potential future PFAS treatment requirements. Ms. Pryor explained that, under the proposed agreement, Zone 7 would be responsible for future treatment improvements and associated operational costs, with Pleasanton paying its share through wholesale water rates. Ms. Winey added that treatment, if ever needed, would occur at the Hopyard facility rather than at the individual well sites.

President Narum asked questions regarding the allocation of engineering, legal, administrative, and contingency costs and whether funding for Zone 7's share of the project had been identified. Ms. Winey explained that project costs would be allocated according to the agreed-upon cost-sharing percentages, and Mr. Solitei confirmed that Zone 7's share is included in the Agency's Expansion Fund. President Narum also expressed support for the agreement and encouraged staff to explore opportunities to accelerate the project schedule.

Director Palmer emphasized the importance of communicating that any future treatment facilities would be located at the Hopyard facility rather than at the park well sites. She also asked about construction of the pipeline, and staff explained that the pipeline would be installed using conventional trenching methods. Director Gambs noted the value of bringing additional wells online to improve operational reliability and resilience.

Director Palmer moved to approve the item, seconded by Director Green. The motion passed by a roll-call vote of 7-0.

Item 12 -

12. Consider Amending the Board of Directors Compensation and Expense Reimbursement Policy >

Osborn Solitei presented proposed amendments to the Board of Directors Compensation and Expense Reimbursement Policy. He explained that the policy was last updated in June 2021 and was reviewed as part of the Agency's periodic policy review process. Mr. Solitei reported that staff determined the policy continues to function effectively by providing guidance regarding director compensation and reimbursement for attendance at Zone 7 meetings, approved conferences, seminars, training programs, webinars, and other activities that support the Agency's mission. He noted that the proposed revisions were primarily administrative in nature and included the removal of outdated language related to the now-defunct Los Vaqueros Reservoir Committee. Mr. Solitei stated that the Administrative Committee reviewed the policy on April 30, 2026, and unanimously recommended forwarding it to the Board for consideration.

President Narum confirmed that the Administrative Committee voted 3-0 to recommend approval of the policy update. Director Green asked whether training opportunities related to PFAS and other emerging water quality topics could be added to the list of reimbursable educational activities. Director Benson noted that the policy was intended to be comprehensive and that the Board has historically approved additional training opportunities on a case-by-case basis. President Narum suggested that extraordinary educational opportunities could be considered separately by the Board rather than being specifically listed in the policy.

Director Green noted that some educational opportunities arise on short notice and may not align with the Board's meeting schedule. Mr. Solitei pointed out that the policy includes a provision allowing reimbursement requests to be considered after attendance when advance Board approval is not practical. Director Palmer also referenced the policy's exception process and noted that it would accommodate the type of training opportunities described by Director Green. Director Green thanked staff and indicated she may utilize the exception process in the future.

Director Palmer moved to adopt the Resolution approving the updated Board of Directors Compensation and Expense Reimbursement Policy, seconded by Director Green. The motion passed by a roll-call vote of 7-0.

Item 13 -

13. Committees

There were no Board comments on the Water Resources Committee or the Administrative Committee meeting notes.

Item 14 -

14. Reports - Directors

Director Green reported on her attendance at the ACWA Spring Conference, where she participated both as a Zone 7 representative and in her role with the JPIA. She noted discussions regarding rising healthcare costs, including the impacts of new weight-loss medications, as well as a presentation on cybersecurity that highlighted lessons learned from a recent security breach. Director Green stated that she found the conference informative and planned to provide additional notes at a future meeting.

Director Palmer referenced information included in her written report and highlighted discussions regarding emergency response planning. She noted concerns that water agencies are not consistently recognized as primary responders during emergencies despite the critical role of water service in supporting hospitals and other essential services. Director Palmer stated that ACWA is exploring the issue and expressed support for further consideration of the topic.

Item 15 -

15. Items for Future Agenda

Director Figuers inquired about a future agenda item related to Sunol. President Narum suggested that Director Figuers meet informally with Mr. Turnbull first, and Director Figuers agreed.

Item 16 -

16. Staff Reports

Valerie Pryor reminded the Board that the Agency will begin the treated water rate-setting process for rates effective January 1, 2027. She noted that a special Board workshop has been scheduled for August 12, 2026, to review the proposed rates and obtain Board input. Ms. Pryor stated that adoption of the proposed rates is currently scheduled for the October Board meeting, allowing sufficient time for the retailers to complete the Proposition 218 notification process.

Item 17 -

17. Adjournment

President Narum adjourned the meeting at 9:13 p.m.

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Zone 7 Meeting - May 20, 2026

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