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

________________________________________________________________

REGULAR MEETING

October 18, 2017

The following were present:

DIRECTORS: SANDS FIGUERS

JOHN GRECI

ANGELA RAMIREZ HOLMES

JIM McGRAIL

SARAH PALMER

RICHARD QUIGLEY

BILL STEVENS

DIRECTORS ABSENT: NONE

ZONE 7 STAFF: JILL DUERIG, GENERAL MANAGER

OSBORN SOLITEI, ASSISTANT GENERAL MANAGER, FINANCE/TREASURER

AMPARO FLORES, MANAGER, INTEGRATED PLANNING

ELKE RANK, ASSOCIATE WATER RESOURCES PLANNER,

INTEGRATED PLANNING

LINDA VAN BUSKIRK, EXECUTIVE ASSISTANT

GENERAL COUNSEL: REBECCA R.A. SMITH, DOWNEY BRAND

Item 3 -

OPEN SESSION AND PLEDGE OF ALLEGIANCE

The Board came out of Closed Session at 6:50 p.m. President Greci called the meeting back into session at 7:01 p.m. and led the Salute to the Flag.

Item 4 -

REPORT OUT OF CLOSED SESSION

President Greci reported that the Board met in Closed Session on the items on the agenda and that no reportable actions were taken.

Item 5 -

CITIZENS FORUM

Matt Katen, Principal Geologist at Zone 7, addressed the Board as one of the employee representatives for the Alameda County Management Employees Association (ACMEA). He expressed great disappointment about the notice of a reduction in workforce that ACMEA received from the County HR Department on behalf of Zone 7. According to the notice, six ACMEA-represented positions, four vacant and two filled, are being eliminated due to significant revenue losses from low water sales. He stated this marks the first time in Zone 7's 60-year history that it will experience layoffs.

Linda Kelly, a member of the group Citizens for Sensible Water Rates, addressed the Board to express her dismay at employee cuts. She also spoke on transparency and urged the Board to continue its TV coverage of board meetings to keep the public apprised of what is happening within the Agency.

Dennis Gambs, a former Principal Engineer at Zone 7, addressed the Board regarding the reduction in force. He stated that although some Board members are under the impression that classifications are being corrected, the memo to ACMEA clearly specifies that one person would lose their job. The stated reason for the elimination of positions was due to a revenue shortfall; however he expressed skepticism that Zone 7 is experiencing a shortfall, when in Item 18f - the 4th Quarter R&E Report shows a $1.3 million dollar excess in the water revenues. He said that, in his opinion, these are dedicated and hard-working employees that have greatly contributed to Zone 7's many successes. The elimination of these positions impacts the morale of all Zone 7 staff.

Jim Horen, a resident of Pleasanton and a retired Zone 7 Engineer addressed the Board regarding the staffing proposal. Based on his past experience at the Agency and involvement in the budgeting process along with putting together the Asset Management Program and Capital Improvement Programs, he stated the proposal is without merit. He urged the Board to carefully consider the proposal and either put it aside or shelve it.

David Lunn addressed the Board regarding the importance of working with DWR to draw down Lake Del Valle water to capture and use more "free water." He handed out a table he created entitled "Untreated Water Costs 2018" to explain his points. He also expressed sympathy for the Agency's staff.

Tish Niehans, a resident of Pleasanton, addressed the Board about transparency. She stated her emails sent to the Board were sent back and the main office is virtually impossible to find. When making decisions or in finding a new General Manager, she urged the Board to think very carefully, conduct its own research, and make decisions in the best interest of the community.

Venky Venkatesan, a 32-year resident of Pleasanton, addressed the Board regarding costs. He stated in the last 7-8 years the cost of water in Pleasanton has increased from $2 to $3.74 per unit plus extra delivery costs. Many Pleasanton residents are paying over $1,000 per month. Due to rising costs and less water use, he stated the Agency is in a classic debt spiral. He stated the ozonation projects are unaffordable. He urged the Board to control costs.

President Greci thanked the people who addressed the Board. He sympathized with opinions presented, and stated the Board listened and heard what people said.

Item 6 -

MINUTES OF THE REGULAR BOARD MEETING OF SEPTEMBER 20, 2017 AND MINUTES OF THE SPECIAL BOARD MEETINGS OF OCTOBER 3, 2017 AND OCTOBER 4, 2017 Minutes of the Regular Board Meeting of September 20, 2017

Director Ramirez Holmes made a correction to the minutes on page 4. The last paragraph about the Westlands vote should read "Westlands vote of 7-1. . ." instead of ". . . 6-1".

Director Figuers moved that the minutes of September 20, 2017 be accepted with the corrections and approved, and Director Palmer seconded the motion. The minutes were approved by a voice vote of 7-0.

Minutes of the Special Board Meeting of October 3, 2017

Director Palmer moved that the minutes of October 3, 2017 be accepted and approved, and Director Quigley seconded the motion. The minutes were approved by a voice vote of 7-0.

Minutes of the Special Board Meeting of October 4, 2017

Director Ramirez Holmes moved that the minutes of October 4, 2017 be accepted and approved, and Director Stevens seconded the motion. The minutes were approved by a voice vote of 7-0.

Item 7 -

CONSENT CALENDAR a. California Flood Preparedness Week - October 21-28, 2017

b. Telephone Equipment and Installation Services

c. Accept and Appropriate Funds from Grant Awarded by EPA Water Quality Improvement Fund

d. Water Transfer Agreement with River Garden Farms Company

Director Greci asked to pull all items for discussion due to their importance.

Item 7a - California Flood Preparedness Week - October 21-28, 2017: There were no comments.

Director Palmer moved to approve Item7(a) and Director Quigley seconded the motion. The item was passed by a voice vote of 7-0.

Resolution No. 17-76 Approved Proclaiming Participation in the California Flood

Preparedness Week (Item 7a)

Item 7b - Telephone Equipment and Installation Services: There were no comments.

Director Quigley moved to approve Item 7(b) and Director Palmer seconded the motion. The item was passed by a roll call vote of 7-0.

Resolution No. 17-77 Authorized Procurement of Telephone Equipment and Installation

Services (Item 7b)

Item 7c - Accept and Appropriate Funds from Grant Awarded by EPA Water Quality Improvement Fund: There were no comments.

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

Resolution No. 17-78 Authorization to Accept and Appropriate EPA WQIF Grant Funding

(Item 7c)

Item 7d - Water Transfer Agreement with River Garden Farms Company:

Director Figuers inquired why the agency is doing this and if there is any critical need for the expenditure. Staff explained that this is a demonstration project. For future water supply planning, the agency must know if these temporary transfers are an option. The River Garden Farms Company is a group north of the delta, so Zone 7 will have to negotiate with DWR, the Bureau of Reclamation, and the State Water Resources Control Board to be able to move the water. Staff is requesting the authority to enter into agreements with River Garden Farms which would be set up similar to the Yuba Accord where there is a range in price depending on the water year. The agency would then commit to the desired amount of water. At this time, the agency is not committing any funds.

In response to Director Ramirez Holmes' question about if this will be for treated or untreated water, Staff explained that this will be untreated water. Like Byron Bethany Irrigation District water, it would come to Zone 7 through the South Bay Aqueduct and could then be used for groundwater recharge, sent directly to our treatment plants, or even for storage in San Luis or Kern County water banks. This is extra water, but the purpose is to demonstrate whether this is even possible.

Director Stevens stated that people in the Tri-Valley want Zone 7 to find water where we can. This is a less expensive option than recycled water and desalination and may be another method that we can use in the future.

David Lunn addressed the board regarding questions he had about the untreated water rates. He urged the board to direct Staff to charge water transfer costs to connection fees instead of untreated water rates.

Director Figuers and Ramirez Holmes asked Staff to ensure that when the budget process occurs, a specific discussion with all of the options are on the table such as participation in Los Vaqueros and Sites. The agency should not tie up money here if it would prohibit us from participating in many other options.

Director Greci asked if there was any further public comment. There were no comments.

Director Stevens moved to approve Item 7(d) and Director Quigley seconded the motion. The item was passed by a roll call vote of 7-0.

Resolution No. 17-79 Authorized the Water Transfer Agreement with River Garden Farms

Company (Item 7d)

Item 8 -

STAFFING UPDATE

August Employee of the Month Recognition - Jerry Harris

Ms. Duerig announced that Jerry Harris, Water Resources Technician II in the Maintenance section, was the August Employee of the Month and was present in the audience. Mr. Harris joined Zone 7 in February 2014 as a Water Resources Technician I and was promoted to Water Resources Technician II in February 2015. He was acknowledged for utilizing his drafting skills collaboratively with the maintenance crew to create new drawings for maintenance projects, and to update existing drawings as changes are made. Mr. Harris has also taken on the challenging task of updating all of the piping and electrical drawings for the Del Valle Water Treatment Plant (DVWTP). In addition, during the past year Mr. Harris has helped Facilities Engineering with some overflow work. Mr. Harris was recognized for his ongoing ability to step up and help out across departmental lines, while performing high quality work and meeting deadlines. Director Stevens pointed out that a good draftsman can save a lot of time and money and makes the agency very efficient. He personally thanked Mr. Harris. The Board applauded Mr. Harris for his accomplishments.

Item 9 -

IS/MND CEQA DOCUMENT FOR DVWTP OZONATION PROJECT

Ms. Duerig introduced Elke Ranke, Associate Water Resources Planner in the Integrated Planning section. Ms. Rank gave a presentation on the Initial Study and Mitigated Negative Declaration (IS/MND) which was done in compliance with the California Environmental Quality Act (CEQA) for the Del Valle Water Treatment Plant Ozonation Project. The presentation highlighted the previous board actions taken on the project beginning in 2005.

Currently, the project is at 60% design. Ninety-five percent design is anticipated in November. Tonight is only Board consideration of the Final IS/MND and associated Mitigation Monitoring and Reporting Program (MMRP) per the CEQA process.

Ms. Rank reviewed the benefits of ozone treatment:

? More effective for disinfection - Better at treating organic matter than chlorine

? Reduces potentially harmful Disinfection-By-Products (DBPs)

? Enhances the water treatment process - Reduces coagulant use and reduces sludge handling costs

? Considered the most effective treatment for Contaminants of Emerging Concern (CECs) such as cyanotoxins, endocrine disruptors and pharmaceuticals

? Most effective treatment for Taste and Odor (T&O) causing compounds

Ms. Rank then gave an overview of the California Environmental Quality Act (CEQA) rules and regulations, stating that CEQA is very procedural, and showed how the Agency has complied with the process guildelines. The Draft IS/MND and Notice of Availability were made available to the public by a number of various means for a required 30-day public review period between July 10 - August 8, 2017. No comments were received during the public review period. A Final IS/MND was then prepared, with only the addition of the required Mitigation Monitoring and Report Program. All environmental impacts of the Project were found to be either insignificant or mitigated to a level of insignificance pursuant to the mitigation measures outlined in the Final IS/MND and the Mitigation Monitoring & Reporting Plan (MMRP).

The staff recommended the Board receive public comment on the IS/MND and MMRP and then adopt the resolution to approve and adopt the Final Initial Study/Mitigated Negative Declaration and associated Mitigation Monitoring and Reporting Program; to approve the Project as described in IS/MND; and to direct staff to prepare a Notice of Determination within five days.

Discussion ensued and the Board provided feedback on the presentation.

Rebecca Smith, General Counsel, reminded everyone that the matter for the board to decide is whether or not the Initial Study/Mitigated Negative Declaration complies with CEQA and appropriately evaluates the environmental consequences of the project and appropriately describes the mitigation for the project. The key point to be addressed tonight is the CEQA compliance.

President Greci opened the public hearing.

Tish Niehans addressed the Board. She stated she had no idea that this was underway and expressed concern over the apparent failure of adequate public notice for this draft document. She stated she would have commented had she known because she is concerned not just with the environmental impact of construction dust, dirt and noise, but also what ozone will mean for the environmental health of the vineyards and people living nearby over the next 25 years and more.

John Bauer, a south Pleasanton resident addressed the board regarding safety of the water. He inquired whether the ozonation plant would completely replace the current treatment plant or if it will be a mix of new technology with the old. He also inquired if the ozonation plant will meet the state-mandated requirements for removal of Chromium 6. Lastly, he stated that a number of people in the community felt that the public review process was not properly noticed. He thanked the Board for their community service.

In response to the questions by Mr. Bauer, Ms. Duerig explained that the ozone plant is not designed to help with Chromium 6, since Chromium 6 does not exist in the source water for the Del Valle Water Treatment Plant. The DVWTP ozone process will be an addition to the already existing treatment plant and will be located well within the existing fence line, as far removed from any neighbors as possible.

Vin Pohay addressed the Board regarding the ozone project. He stated that although there is no argument about the benefits of ozone technology, this project will be very expensive and overextended in its core scope for which it has been designed. He urged the Board to pause and reconsider the scope of the treatment plant as originally designed and see if that can be pared down.

Jill Buck, a Pleasanton resident, applauded the ozone project and the Board's foresight to move forward with it. She stated now is the time to move forward with this technology. She said she is tired of seeing crumbling infrastructure - locally, statewide and nationally - and hearing people complain about the costs to improve it. She said she may be one voice within the community, but she knows there are others who appreciate what Zone 7 is doing and why because clean, safe drinking water is something we can't live without, it is not a luxury, it is a need and therefore a right. She thanked the Board for having the courage to move forward with this project.

John Marchand, Mayor of Livermore, chemist, and past member of the Zone 7 Board of Directors, addressed the Board regarding safe water and the ozone project. He stated that water is the most fundamental compound for life to exist. The move toward ozone is simply part of Zone 7's long-standing commitment to water quality. He shared his extensive experience working at water treatment plants including those with ozone treatment. When using ozone, there were never taste and odor or carcinogenic disinfection byproduct problems. He further shared that there was no ozone that escaped because it is generated and applied inside closed buildings with an ozone destruction system. Although ozone is expensive and it has gotten more so every year in the decades since it was first recommended, he asked "What value do you place on customer confidence that the water is safe for our children to drink? What is the value of having water that does not stink? What is the value of having water that is not in excess of the standard for carcinogens?" He assured those present that the risks of trihalomethanes and cyanotoxins are very real. Ozone represents the state of the art treatment our children and their children deserve. He commended Zone 7's commitment to water quality and public health.

Linda Kelly spoke on the desire to tour an ozone treatment plant so that she and others in the public could better understand and be more supportive if they knew what the money was going towards.

There were no more speakers and the public hearing was closed.

Director McGrail expressed his support of the project as a way to improve our water supply and to benefit family, friends, neighbors and the community. This will be a good move for future generations.

Director Palmer concurred with Director McGrail and added that as a biochemist, she is familiar with the byproducts that come out of the other types of treatment that have been in use in Livermore, and it would be negligent not to move forward with ozonation as it has been shown to be the only treatment that will stop us from having those byproducts. It will also potentially protect us from contaminants of emerging concern. She expressed her support of ozonation so that everybody can benefit from having healthy water.

Director Quigley concurred with Directors McGrail and Palmer and stated that ozonation has been proven very successful in our neighboring water agencies and he has been convinced by many water professionals over the years that it works. He expressed support for the project.

Director Stevens stated that the ozonation project has been included in the Agency's Capital Improvement Plan for many years. He expressed support for the project and associated CEQA analysis.

Director Ramirez Holmes added that any time the Agency can be more effective by using better technology, we have to take steps to make those improvements and not continue putting Band-Aids on the existing treatment plants. Infrastructure is important. Ozone is expected to be more effective, for example, by utilizing less chemicals. Financially, the continued practice of using water rates to fund capital projects in not a good one, so she expressed support for seeking low cost interest loans from the state to be able to fund these big projects here in the Tri-Valley. This project meets the CEQA requirements. Director Ramirez Holmes thanked the public for attending the meeting and keeping the Board honest.

President Greci discussed his appreciation for all the comments and the clarification on the CEQA issues. He added that this is a process. Zone 7 must be progressive and think ahead so if or when a major toxin arises, Zone 7's treatment facilities will be prepared.

Director Palmer moved to approve Item 9 and Director Quigley seconded the motion. The item was passed by a roll call vote of 7-0.

Resolution No. 17-80 Authorized the Adoption of the Mitigated Negative Declaration for the

"Del Valle Ozonation Project" and the Mitigation Monitoring and

Reporting Program (Item 9)

[NOTE: Director McGrail left the meeting at 8:42 p.m.]

Item 10 -

2017 AMP UPDATE AND FY 2018-19 CIP UPDATE

Ms. Duerig introduced Amparo Flores, Integrated Planning Manager, who gave a presentation on the update of the Asset Management Plan (AMP) and the Ten-Year Capital Improvement Program (CIP). Dr. Flores explained that the two plans are similar but differ in purpose and scope. The AMP focuses on the renewal and replacement of the agency's existing assets over 40 years; while the CIP focuses on projects and programs for both the first ten years of the AMP, as well as expansion needs to accommodate planned development. She emphasized that the Flood System CIP was not included in this CIP and would be developed separately. She relayed staff recommendations that the Board accept the AMP Update, approve the AMP funding transfer of $12,300,000 beginning FY 2018-19, and adopt the FY 2018-19 Ten-Year Water System Capital Improvement Plan.

Director Stevens complimented Dr. Flores on the presentation.

Director Greci commented on the lack of questions from the Board, and Director Ramirez Holmes replied that the Board had asked numerous questions at the October 3 meeting.

There were no public comments.

Director Palmer moved to approve Item 10 and Director Quigley seconded the motion. The item was passed by a roll call of 6-0, with Director McGrail absent.

Resolution No. 17-81 Accepted the 2017 Asset Management Plan and Adopted the FY 2018/19

Ten-Year Water System Capital Improvement Plan (Item 10)

Item 11 -

TREATED WATER RATE SCHEDULES FOR CALANDAR YEAR 2018 Osborn Solitei, Assistant General Manager, Finance described the proposed Treated Water Rate Schedule for Calendar Year 2018. Mr. Solitei gave an overview of the Calendar Year (CY) 2018 fixed charges based on Board Resolution #16-172. Staff held a meeting with the Retailers on October 3, 2017 to discuss rates and gained their support of this proposal. Mr. Solitei provided a comparison of the current CY 2017 and the upcoming CY 2018 treated water rate components. He described the current year's $3.62/CCF compared to the proposed reduction for the upcoming CY 2018 of $3.16/CCF which no longer includes a temporary surcharge. He explained the Fund 100 six-year performa, as well as the six-year projections for Funds 100 and 120. Mr. Solitei provided information comparing water rates from nearby water agencies and found that Zone 7 still provides one of the lowest in the area.

Staff recommended that the Board adopt the attached resolution to sunset the temporary surcharge of $0.57/CCF on December 31, 2017. Staff plans to conduct a Wholesale Water Rate Study in 2018 for future years.

President Greci asked for Board comments. Director Stevens asked whether the Agency would ever consider doing a 50% fixed charge and shared that he finds that to be a more realistic value than the existing 35%. Mr. Solitei explained that the fixed component of our rate structure will be part of next year's study.

President Greci asked for public comment. Linda Kelly inquired whether the other retailers were considered when creating the "Bay Area Water Rates & Average Bi-Monthly Bills" as Mr. Solitei provided only Pleasanton as an example during his presentation. He confirmed that the other retailers were considered, but only Pleasanton was given as an example. Mr. Solitei expressed his gratitude to all the retailers and their participation in the meeting held on October 3rd to discuss rates.

Vin Pohray addressed the board and expressed his appreciation for the Board's efforts in removal of the temporary surcharge. However, he also shared his concerns with the temporary surcharge actually being converted into a permanent base rate increase which essentially leaves the public responsible for paying the same amounts or more. Mr. Pohray asked the Board to reconsider the rate adjustments to better serve its constituents. Director Figuers agreed with Mr. Pohray and reiterated why he has always disliked implementing a surcharge. He added that since 1970 or 1971 through 2012 or 2013 the average rate increases were just under 7%. Director Figuers added that the Agency has had very few temporary surcharges; one of them was converted to part of the base, as Mr. Pohray described, and the other one was actually removed, which is under consideration this evening. Director Palmer added that Mr. Pohray's rates (in the City of Pleasanton) are lower than others' in the area.

Tish Niehans questioned the increase in operating expenses of over $7M, an excess of 24%, and what these expenditures consist of, particularly when there are layoffs occurring. She asked the Board to gain control over a 24% increase in operating costs and explained that an average of 7% increase in water rates far exceeds the rate of inflation and to reconsider reducing the rates even further.

Carol Atwood, Administrative Services Manager with Dublin San Ramon Services District, addressed the Board and thanked Staff for including the retailers in a presentation on how they calculated the rates. Ms. Atwood explained that once the fixed and variable costs have been considered, Zone 7 is only increasing the rates by 3%. She commended the Agency and believes this is staying quite consistent with the CPI rates for both consumer goods and wage earners. Ms. Atwood added that when she looked at the Agency's financial projections, she was surprised at its ability to stay within 3% of operating expenses and while attempting to reach reserve levels. She praised the Board for their continued commitment to its constituents and expressed her appreciation in the open communication that has occurred between the Agency and the retailers.

Director Quigley voiced his support for sunsetting the temporary surcharge.

Director Ramirez Holmes stated that the rates will be lower than they've been in the past two years due to dropping the surcharge. The 2018 rate already had a 10% increase voted by the Board in 2015, but most customers will experience a decrease in their rates with this modification. She advised customers to pay close attention to the tiered rates that occur at the city level in terms of usage, as this is a very important piece. Director Ramirez Holmes expressed her support for sunsetting the temporary surcharge.

Director Ramirez Holmes moved to approve Item 11 and Director Quigley seconded the motion. The item was passed by a roll call vote of 6-0, with Director McGrail absent.

Resolution No. 17-82 Approved the Sunset of the CY 2017 Temporary Surcharge

(Item 11)

Item 12 -

UNTREATED WATER RATE SCHEDULES FOR CALENDAR YEAR 2018

Osborn Solitei presented the staff report on the Proposed Untreated Water Rates for 2018. He began by showing a chart of the Untreated Water Rate Revenue History which listed the historical rates from 2001 to the present. Rates have ranged from $110 to $130 since 2013.

Staff recommends a resolution approving the 2018 rate schedule for an Untreated Water rate of $129 per acre foot for all metered water delivered to each customer per month, a Temporary Untreated Water rate of $837 per acre-foot, a Non-Scheduled Untreated Water rate of $837 per acre-foot, and a Surplus Untreated Water rate of $240 per acre-foot. The increase is primarily based on water transfer costs.

Director Greci asked for comments from the board or public.

David Lunn addressed the Board. He thanked Mr. Solitei for speaking to him about this subject and he further thanked the Board for listening to him. He spoke on the chart he provided to the Board and asked for clarification regarding the procedure for calculating the SWP Transportation Variable for the water being delivered when some water doesn't have a transportation variable. He suggested that those costs should not pass through. He urged the Board to delay their vote by one month to give Staff time to look into the calculations and respond in more detail to his questions. Director Quigley thanked Mr. Lunn for his earlier comments regarding free water.

A discussion ensued about the procedure used for accounting of the Water Transfer Costs. Staff explained that a budget is presented with the Agency's best estimate of how much water will be purchased from various locations. As an example, the amount taken from Semitropic could be reduced and the same amount taken from River Gardens, to test if another source could be utilized during drought or another time of need. The agency does not charge the customer during these variances, there is no true-up if actual costs exceed those projected, such as occurred during the drought.

Director Quigley moved to approve Item 12 and Director Stevens seconded the motion. The item was passed by a roll call vote of 5-0, with Director Palmer abstaining and Director McGrail absent.

Resolution No. 17-83 Adopted the Untreated Water Rates for CY 2018 (Item 12)

Item 13 -

PROPOSED 2018 MUNICIPAL & INDUSTRIAL WATER CONNECTION FEES

Mr. Solitei presented the staff report on the Proposed 2018 Municipal and Industrial Water Connection Fees. These fees provide funding for short-term and long-term Expansion Program costs. The Board resolved to update the fee regularly to keep pace with inflation. Staff recommends increasing the current rate by 3.6% which is based on the Engineering News Record Construction Cost Index (ENR CCI) from December 2016 to September 2017. Based on the Agency's service areas, the current fee for the Alameda County service area is $27,180 and is proposed to increase to $28,170, an increase of $990. Dougherty Valley is currently at $26,080 and is proposed to increase to $27,030, an increase of $950.

This item was presented to the Finance Committee on September 21, 2017, and the committee concurred with the staff recommendations to adopt the resolution to amend the basic fee for a standard 5/8-inch meter within the Zone 7 service area in Alameda County to $28,170 and to $27,030 within the Dougherty Valley Service Area. For meter types larger than a 5/8-inch basic meter, the basic charge shall be multiplied by a fee factor as described in Ordinance No. FC 0-91-68. The fees as amended shall become effective January 1, 2018.

President Greci asked if there was any further board or public discussion. No further comments were received.

Director Stevens moved to approve Item 13 and Director Quigley seconded the motion. The item was passed by a roll call vote of 6-0, with Director McGrail absent.

Resolution No. 17-84 Adopted the 2018 Municipal and Industrial (M&I) Connection Fees

(Item 13)

Item 14 -

FORMATION OF A JOINT POWERS AUTHORITY TO ISSUE REVENUE BONDS Mr. Solitei presented the staff report on the Formation of a Joint Powers Authority (JPA) to Issue Revenue Bonds. He described the Joint Exercise of Powers Act which permits two or more public agencies to agree to form a JPA for the purpose of jointly exercising any of their common powers. Once formed, the JPA can be used to issue bonds to finance public capital improvements, including facilities for the production, storage, transmission or treatment of water, such as the ozonation project for both DVWTP and PPWTP. The Agency's financial advisor has identified two existing California JPA agencies who have expressed interest in cooperating with Zone 7 to form a new JPA, the California Municipal Finance Authority (CMFA) and the California Statewide Communities Development Authority (CSCDA). CSCDA has been identified by the Agency's finance team as a JPA partner and passive member. This newly-created JPA will be governed and managed by Zone 7's Directors and staff and will have the authority to issue bonds at its complete discretion.

This item was presented to the Finance Committee on September 21, 2017, and the committee concurred with the staff recommendation. Staff further recommends the Board approve the Joint Exercise of Powers Agreement with CSCDA and to authorize the General Manager to take actions necessary to complete the formation of such a JPA.

Director Stevens spoke about this presentation coming before the Finance Committee in September. He stated this is a parallel path to seeking SRF loans, which is the least expensive route. Bond financing has a higher interest rate.

Director Quigley concurred with Director Stevens stating that the Finance Committee was happy with the recommendation and encouraged the Board to approve this parallel path direction.

Greci asked for public comment. No comments were received.

Director Palmer moved to approve Item 14 and Director Quigley seconded the motion. The item was passed by a roll call vote of 6-0, with Director McGrail absent.

Resolution No. 17-85 Authorized the Execution and Delivery of a Joint Exercise of Powers

Agreement with the California Statewide Communities Development

Authority (Item 14)

Item 15 -

COMMITTEES: Finance Committee Meeting, September 21, 2017 - notes Director Ramirez Holmes asked for a correction to the Finance Committee meeting notes. On page 2 at Item 3 at the end of the second to last sentence, "Directors Stevens and Ramirez Holmes clarified that the fee is paid by commercial and residential builders. . ." She said that everything after the comma through "impact her" should be stricken from the notes.

Item 16 -

REPORTS - DIRECTORS

e. Verbal comments by President

f. Written report by Director Quigley

g. Verbal reports

President Greci reported that he attended the Special/Joint Meeting with the Department of Water Resources celebrating the 50th anniversary of Lake Del Valle Dam and the 60th anniversary of Zone 7 on October 4, 2017.

Director Palmer reported that she attended the Special/Joint Meeting with the Department of Water Resources celebrating the 50th anniversary of Lake Del Valle Dam and the 60th anniversary of Zone 7 on October 4, 2017. She also attended the Oroville Spillway Site Visit on October 12, 2017. She urged her fellow board members to view the Department of Water Resources' time lapse video showing the work that has been done to date.

Director Quigley reported that he attended the Special/Joint Meeting with the Department of Water Resources celebrating the 50th anniversary of Lake Del Valle Dam and the 60th anniversary of Zone 7 on October 4, 2017. He also attended the Santa Clara Valley Water District's board meeting on Tuesday, October 17, 2017, where their board voted 7-0 to support the California WaterFix.

Item 17 -

ITEMS FOR FUTURE AGENDA

Director Greci withdrew his request to place an evaluation of the cost benefits of televising the board meetings on a future agenda. The responses he has received from the public after initially suggesting such an evaluation were enough to demonstrate the benefits to the community and warrant renewing the contract with TV30 without the need for another expensive poll. He stated he is all in favor of Channel 30.

Director Ramirez Holmes suggested that given the discussions this evening with David Lunn, a retired employee and one of the untreated water customers, an item might be placed on a Finance Committee agenda to talk about how the agency can improve this process and at the same time gather feedback from untreated water customers about what they need from us. Director Palmer and President Greci concurred.

Item 18 -

STAFF REPORTS(Information items. No action will be taken.)

h. General Manager's Report

i. Legislative Update

j. Outreach Activities

k. Water Inventory and Water Budget Update

l. Updates on Water Supply Projects

m. FY 2016-17 Unaudited Fourth Quarter Revenue and Expenditure (R&E) Report

n. Verbal reports

Ms. Duerig invited any questions on the staff reports. There were no comments.

Director Ramirez Holmes thanked staff for the updates on the water supply projects and suggested that since many folks have expressed an interest in the ozone projects, that the agency should consider posting information in the next eNews. She also shared that the Unaudited 4th Quarter Revenue and Expenditure (R&E) Report discussed being under budget, which is good news, and the Comprehensive Annual Financial Report will be coming to the Finance Committee in December.

President Greci reminded the board of the upcoming board schedule.

Item 19 -

ADJOURNMENT

The meeting was adjourned at 9:50 p.m.

Board Secretary