MINUTES OF THE BOARD OF DIRECTORS
ZONE 7
ALAMEDA COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT

________________________________________________________________

REGULAR MEETING

February 17, 2016

The following were present:

DIRECTORS: SANDS FIGUERS

JOHN GRECI

JIM McGRAIL

SARAH PALMER

RICHARD QUIGLEY

ANGELA RAMIREZ HOLMES

BILL STEVENS

DIRECTORS ABSENT: NONE

ZONE 7 STAFF: JILL DUERIG, GENERAL MANAGER

KURT ARENDS, ASSISTANT GENERAL MANAGER, ENGINEERING

OSBORN SOLITEI, ASSISTANT GENERAL MANAGER, FINANCE

LINDA VAN BUSKIRK, BOARD SECRETARY

COUNSEL: DAVID ALADJEM, DOWNEY BRAND

Item 2 - Open Session and Report Out of Closed Session

The Board came out of Closed Session at 6:59 p.m. and President Palmer said that no reportable actions had been taken in Closed Session.

Item 3 -

CALL TO ORDER / PLEDGE OF ALLEGIANCE President Palmer called the regular meeting to order at 7:06 p.m.

Item 4 - Pledge of Allegiance

President Palmer led a salute to the flag.

Item 5 -

CITIZENS FORUM Matt Morrison, spoke on the Ralph M. Brown Act. President Palmer thanked Mr. Morrison and said that the Board is trained every two years on the Brown Act.

Item 6 -

MINUTES OF THE REGULAR MEETINGS OF JANUARY 20, 2016 President Palmer requested a correction to the minutes at page 3, the fifth paragraph down, discussing consultant support, to take out the word is and rework the sentence so that it doesnt sound awkward. Director Quigley moved that the minutes be accepted as corrected, and Director Stevens seconded the motion. The motion passed by a vote of 7-0.

Item 7 -

CONSENT CALENDAR President Palmer pulled Item 7(c) for comment.

Director Ramirez Holmes moved to approve Consent Items 7(a)(b)(d) and (e) and Director Quigley seconded the motion. The items were passed by a roll call vote of 7-0.

Resolution No. 16-114 Authorized the removal of items from Alameda County and Zone 7 Fixed Asset Inventory Records (Item 7a)

Resolution No. 16-115 Authorized the Zone 7 Conflict of Interest Code - Biennial Review (Item 7b)

Resolution No. 16-117 Authorized the execution of a letter agreement with

Semitropic Water Storage District for raw water treatment (Item 7d)

Resolution No. 16-118 Authorized the execution of a contract with Cardno to

provide specialized environmental analysis (Item 7e)

Director McGrail complimented staff on Item 7d for doing a good job by including the checks and balances within that item.

Item 7c: SEIU Local 1021 Side letter for Admissions and Columbus Day Holidays

President Palmer pointed out that although she certainly does not begrudge the operators an award of $600 a piece, this item was passed by the County without consulting the Zone 7 Board.

Director Quigley moved to approve Consent Item 7c and Director McGrail seconded the motion. The item was passed by a voice vote of 7-0.

Resolution No. 16-116 Authorized adoption of the 2015-2019 SEIU MOU Side letter of Agreement (Item 7c)

President Palmer reordered the agenda to hear Item 11 before the remaining items, as requested by General Manager, Jill Duerig.

Item 11 -

STAFFING UPDATE a. Employee of the Month Recognition

b. New Employee Introduction

Ms. Duerig announced that the December Employee of the Month was Amanda Rogers who was present in the audience. As an Administrative Assistant in our reception area, she is the face of Zone 7. Amanda has recently taken on the huge task of project lead during the implementation of converting our electronic filing system from Versatile to Laserfiche, which will be a much more user friendly program. She continues to work with the consultants to get this program up and running for the agency, all while handling her usual assignments as our go to person for uploading agenda packages, plan holders lists and other documents to the Zone 7 website, and much more, with a positive and helpful attitude. The Board applauded Amanda for her accomplishments.

Ms. Duerig was pleased to introduce the agencys newest employee, Travis Baggett, also present. Travis joined Zone 7 on January 19th as a Water Resources Technician in the Flood Control section. He came to Zone 7 from the Santa Clara Valley Water District where he worked as a Hydrographer. He brings Zone 7 a wide range of field and office experience in data collection, modeling, drafting, and monitoring streams and wells. He received his bachelors degree in meteorology from San Jose State University and a masters degree in marine and atmospheric science from the State University of New York, Stony Brook. The Board welcomed Travis to Zone 7.

Item 8 -

AWARD OF CONTRACT FOR THE DVWTP FILTER VALVES REPLACEMENT PROJECT Kurt Arends, Assistant General Manager, Engineering, presented a summary to the Board of the staff report. This contract is for replacement of the valves on filters 5 through 8. The valves on filters 1 through 4 were replaced in 2010. The valves were originally installed about 27 years ago, and have a 25-year life expectancy, so they have been scheduled for replacement. This project was originally identified in the AMP and is part of Zone 7s CIP. The project was advertised and the agency received four bids. The lowest bid received was for $326,500 from Manito Construction, Inc. This same contractor recently completed the Super Pulsator Project at the Del Valle Water Treatment Plant, so they are very familiar with the plant, and the agency was very happy with their performance. Staff recommended the Board approve the project and award the contract to Manito Construction, Inc., in an amount not-to-exceed $326,500, authorize the General Manager to issue change orders as and when needed, and adopt the resolution.

In response to Director McGrails question asking if any future change orders would be limited to 10% of the contract amount, Mr. Arends responded that is correct.

Director Ramirez Holmes moved to approve Item 8 and Director Figuers seconded the motion. The item was passed by a roll call vote of 7-0.

Resolution No. 16-119 Authorized a contract with Manito Construction for the Del Valle Water Treatment Plant filter valve replacement.

Item 9 -

WATER SUPPLY EVALUATION UPDATE General Manager, Jill Duerig, introduced Brad Ledesma, Associate Engineer with the Integrated Planning group, who presented a summary of the Water Supply Evaluation Update. A complete copy of the study is posted on the Zone 7 website.

In response to questions by Director Figuers on the Updated Projected Water Demands slide, Mr. Ledesma said that according to the data that the agency collected from the retailers, beyond a 23-year time frame, the water demands are relatively flat. That is associated with a couple of things. One is water conservation efforts and other things going into play. The demand line you see is flat but there is still a slight increase to that because of infill. Essentially the majority of growth, as Director Figuers pointed out, is by 2030.

In response to questions by Director Ramirez Holmes on the California WaterFix slide, Mr. Ledesma explained that DWR has their own cost estimating elements that theyve developed for the California WaterFix and as part of that they will bond out over a longer period of time to fund the California WaterFix. The Present Worth is about $320M over about a 40-year period. If you amortize that out, including O&M, the cost of Zone 7s share is about $8.5M per year. Zone 7s share as a participating State Water Project contractor amounts to about a 1.2% allocation based on Zone 7s Table A amount.

In response to questions by Director Ramirez Holmes on the New Core Metrics as they relate to providing a reliable supply in a fiscally responsible manner, Mr. Ledesma explained how the study looked at the reliability of the State Water Project either remaining the same or as declining between now and when the California Water Fix would come on line. The California WaterFix is then envisioned to restore reliability to pre-2007 levels, not just for 18,100 AF as seen on the graphic, but for our entire Table A water. Once the California WaterFix is in place, you are looking at a higher reliability for our total State Water Project supply.

Director Ramirez Holmes asked for clarification, stating that the California WaterFix does not diversify the portfolio, yet we say that is a lower priority because it is not in the mission statement, and yet reliability is in the mission statement, so diversification might very well be reliability. Mr. Ledesma responded that regarding diversification, the key is that without the California WaterFix, you are essentially looking at a situation where existing Table A amounts in the State Water Project could decline. We live in the arid western United States. The average rainfall in the Livermore area is only about 14.5 inches, so there is not enough local supply to support everything that is going on within the valley. Imported water will always continue to be an important part of the Tri-Valley area, and that is why the California WaterFix is important to Zone 7 and important to the Tri-Valley. Having desalination and purified recycled water help provide stop gaps until the California WaterFix is on line.

In response to questions from Director Ramirez Holmes and Director McGrail about local storage and the possibility of utilizing the Los Vaqueros expansion, Lake Del Valle or groundwater, Mr. Ledesma explained that the study looked at storage in three ways: the groundwater basin (through Zone 7s Chain of Lakes pipeline or Well Master Plan wells), Los Vaqueros surface water reservoir, and what is going on in the California WaterFix area. He pointed out that Los Vaqueros is a federal facility, and trying to move State Water Project water through a federal facility is difficult due to extensive bureaucratic red tape.

Director Quigley thanked Mr. Ledesma for clarifying for the public and the Board that Los Vaqueros, while it is very close, is a federal not a state water facility. This is very important. He said it would be nice to get the state and feds to work together on storage and for the agency to try to have an intertie with a federal partner.

Director Stevens pointed out that Zone 7 had looked at Los Vaqueros over 15 years ago, but even then it was cost prohibitive, especially for a small agency like Zone 7. If you build a facility to store water, you have to find the water to put in there, and that is problematic with reduced reliability of the State Water Project. He said the options presented here are probably the cheapest and best options right now and for the foreseeable future. Director Stevens commended staff on doing a great job on the Water Supply Evaluation update.

Director Greci also commended Mr. Ledesma and staff for putting together such an extremely informative update that demonstrates the versatility that this organization has and emphasizes what we do to meet reliability. Nothing happens quickly in water planning, so you have to look out many years ahead. It is important to educate the public, work with other agencies in the same business and keep a rapport with the state, to work conjunctively for the same cause - to provide water to the people of this state at a reasonable cost. There is no way of getting around the need or the cost.

Dan McIntyre, DSRSD, commended Brad Ledesma and staff on doing a great job on this water supply evaluation update. He then strongly encouraged Zone 7 to look at the need for more diversification and greater local control over the water supply, stressing that they should be considered as primary metrics.

Matt Morrison encouraged the Board to incorporate demand reduction - as a supply source and as a reliability source - into its planning for future water use, coupled with a campaign to let people know what Zone 7s other responsibilities are such as paying for flood control and other projects in order to meet the requirements of the needs of the valley.

In response to Alfred Exner of Pleasantons question about recycled water, Ms. Duerig responded that irrigation recycling (purple pipes) has a demand primarily during summer months. The capacity of the plants to produce recycled water is actually greater in the winter months. By looking at things like indirect or direct potable reuse, you can take advantage of existing facilities and use them year round, and you capture water that would otherwise be exported to the bay.

In response to Director Ramirez Holmes question about whether Zone 7 has any projects on the horizon that are leveraging potential water bond money, Director Quigley said Title 16 funding and other sources of recycling/reuse grant money could be available. Some of the water bond funds are looking for shovel-ready projects by July. Dan McIntyre, DSRSD, concurred that millions of dollars are available for recycling projects such as classical purple pipe recycling, which DSRSD is doing, while also looking into additional funding. Its state funding from Proposition 1A leveraged with some of our own funds (50/50 split) to expand another water supply project. The City of Pleasanton has been successful in getting some funds on old programs and is looking ahead on further expanding their system.

Item 10 -

SUPPORT FOR CALIFORNIA WATER ACTION PLAN AND CALIFORNIA WATER FIX President Palmer explained that there was a difference on this item as presented to the Board in the agenda packet which stated the recommendation was to vote on adopting the resolution presented; however, the agenda itself had originally stated the recommended action was to be information only. In light of this, President Palmer said the Board would get information on the item only, at the present meeting and will then defer the vote until the next board meeting in March.

Amparo Flores, with the Integrated Planning group, gave a presentation entitled Support for Updated California Water Action Plan and California WaterFix and then responded to questions from the Board and public.

President Palmer commented that salt in of the groundwater is a very big issue for us. The idea that the California WaterFix decreases the salt load in our valley is really important because as we are talking about emergencies, relying on our groundwater becomes crucially important.

Director Quigley added that the quality of our source water at the point of intake will be much better with the California WaterFix. He is resoundingly behind this effort.

In response to questions from Director Ramirez Holmes, Dr. Flores responded that the Design and Construction Enterprise (DCE) Tentative Agreement is a work in progress and is not expected to be signed until the Biological Opinion is filed sometime this fall. That would be the earliest that people would start to move forward on making decisions regarding this interim funding, the $1.2 billion that is part of the overall construction cost. The overall cost of the California WaterFix is about $15 billion, with Zone 7s share being close to 1% of that. Director Ramirez Holmes said she appreciates the continuance to allow the public the opportunity to be able to come to the next meeting to learn more, as public buy in is going to be critical.

Matt Morrison, Treasurer with the San Francisco Bay Chapter of the Sierra Club, thanked the Board for continuing the item, as there is an interest among the environmental organizations to comment on supporting this.

President Palmer thanked Dr. Flores for the staff report well done.

Item 12 -

COMMITTEES The Finance Committee met on January 19, 2016. The notes are included in the agenda packet.

A Water Agency Liaison Committee/Water Policy roundtable met on February 11, 2016. Notes are pending.

Item 13 -

REPORTS-DIRECTORS a. Verbal comments by President

b. Verbal reports

President Palmer attended the Water Agency Liaison Committee meeting last Thursday which she felt was very interesting. The roundtable aspect is basically concluded. The liaison committee will convene on an as-needed basis. President Palmer also attended a project development meeting in Sacramento on February 2nd which was very interesting. Companies that had made large tunnels were there and presented some of their projects. She was fascinated by the logistics that went into the projects.

Director Figuers attended the ACWA Groundwater Committee meeting last week. The committee discussed details of how to set up statewide groundwater and surface water monitoring and data collection such as where the wells are, documenting the inflows and outflows of the groundwater basin, and who is going to control what.

Director Ramirez Holmes watched a California 2.0 webcast on January 14th which was a statewide briefing update on the progress of the California Water Action Plan. She also attended the Water Education Foundations two-day Water 101 class which discussed current issues in California water management, water bond, construction of new storage, working with state legislators, as well as communicating water issues in a multimedia world.

Item 14 - Items for Future Agenda - Directors - None.

Item 15 -

STAFF REPORTS a. General Managers Report

b. Drought Update

c. Water Inventory Update

d. 2015 Nitrate Study Report

e. Capital Project Status Report

f. FY 2015-16 Second Quarter Revenue and Expenditure Report

g. Legislative Update

h. Outreach Activities

i. Verbal Reports

President Palmer clarified that in Item 15d, the 2015 Nitrate Study Report is preliminary, especially with regard to the cross section figures which were computer generated.

Director Stevens commented on Item 15b, the Drought Update, specifically the Lake Oroville and San Luis Reservoir Storage Levels. He said people should be cognizant that we are in a worse condition than we were in last year. There is no guarantee that we are going to get more rain, and if you look at the extended forecast for the next couple of months, it is not good. The drought is not over.

President Palmer agreed that the reservoirs are down considerably and we are not out of the woods by any stretch of the imagination and should not be lulled into complacency. She pointed out that Zone 7 has been working very hard to get water, but actually lost water due to some accounting issues and the lack of timely approvals by DWR and Reclamation. It is very difficult to overcome some of the bureaucracy that the agency must deal with.

Item 16 -

ADJOURNMENT The meeting was adjourned at 8:48 p.m.