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

________________________________________________________________

REGULAR MEETING

November 16, 2016

The following were present:

DIRECTORS: SANDS FIGUERS

JOHN GRECI

ANGELA RAMIREZ HOLMES

JIM McGRAIL

SARAH PALMER

RICHARD QUIGLEY

BILL STEVENS

DIRECTORS ABSENT:

ZONE 7 STAFF: JILL DUERIG, GENERAL MANAGER

KURT ARENDS, ASSISTANT GENERAL MANAGER, ENGINEERING

OSBORN SOLITEI, ASSISTANT GENERAL MANAGER, FINANCE

ELKE RANK, ASSOCIATE WATER RESOURCES PLANNER, INTEGRATED PLANNING

LIRA WALTER, TEMPORARY OFFICE ASSISTANT

COUNSEL: DAVID ALADJEM, DOWNEY BRAND

Item 1 -

CALL TO ORDER / PLEDGE OF ALLEGIANCE President Quigley called the meeting to order at 6:30 p.m. and the board went into Closed Session immediately.

Item 2 - Closed Session

(a) Conference with Labor Negotiators pursuant to Government Code section 54954.5:

Agency Negotiator: G.F. Duerig

Employee Organizations: Alameda County Management Employees Association; Alameda

County Building and Construction Trades Council, Local qs342, AFL-CIO; International

Federation of Professional and Technical Engineers, Local 21, AFL-CIO; Local 1021 of the Service Employees International Union, CTW; Unrepresented Management.

(b) Conference with Legal Counsel - Existing litigation Gov't Code section 54956.9(d)(1): Center for Food Safety, et al., v. California Department of Water Resources, et. al., Sacramento County Case No. 34-2016-80002469

(c) Conference with Legal Counsel - Significant exposure to litigation pursuant to Gov't Code section 54956.9(d) (2): 2 cases

(d) Conference with Legal Counsel - Potential litigation pursuant to Gov't Code section 54956.9(d) (4): 1 case

Item 3 -

OPEN SESSION AND REPORT OUT OF CLOSED SESSION The Board came out of Closed Session at 7:00 p.m. and President Quigley said that no reportable action had been taken in Closed Session.

Item 4 - Pledge of Allegiance

President Quigley led the Salute to the Flag.

Item 5 -

CITIZENS FORUM There were no public comments at this time.

Pursuant to Government Code Section 54954.2(b)(2) of the Brown Act, Staff requested to add an urgency item to Closed Session - Conference with Real Property Negotiator: Property: APN 099A-1650-003-09. The addition of this urgency item would require a 2/3 vote. Director Palmer made the motion that this item be approved for Closed Session, and President Quigley seconded the motion. The urgency item was approved by a roll call vote of 7-0. Closed Session will continue after the Regular Meeting Open Session Items.

Item 6 -

MINUTES OF THE REGULAR BOARD MEETING OF OCTOBER 19, 2016

Director Ramirez Holmes requested changes be incorporated to her voting no on Item 11, indicating that she voted yes, and that it was in fact a unanimous vote. Director Stevens commented that he clearly remembered her voting "no." Director Palmer made the motion to approve the minutes as amended, and Director Ramirez Holmes seconded the motion. The motion was passed with a voice vote of 6-1, with Director Stevens opposed.

Item 7 -

CONSENT CALENDER

a. Request for Out-of-State Travel to Attend Upcoming Association of California Water Agencies' DC Conference

b. Contract Amendment for Professional Services to Support Preparation of Alternative Groundwater Sustainability Plan

c. Status of Becoming a Groundwater Sustainability Agency

d. Resolution Authorizing the General Manager to Submit a Funding Application for the Drinking Water State Revolving Fund

e. Award of Construction Contract for the Mocho 1 Well Repair Project

Director Ramirez Holmes asked that item 7(d) be pulled for further discussion.

Director Figuers moved to approve Consent Items 7(a)(b)(c) and (e) and Director Stevens seconded the motion. The items were passed by a voice vote of 7-0.

Resolution No. 16-175 Request for Out-of-State Travel to Attend Upcoming Association of California Water Agencies' DC Conference 7 (Item 7a)

Resolution No. 16-176 Authorization to Amend Contract with Todd Groundwater (Item 7b)

Resolution No. 16-177 Status of Becoming Groundwater Sustainability Agency (Item 7c)

Resolution No. 16-179 Award of Construction for the Mocho 1 Well Repair Project (Item 7e)

7d: Authorizing the General Manager to Submit a Funding Application for the Drinking Water

Director Ramirez Holmes questioned the request for financial assistance of a specific project listed in the summary, namely adding ozone at Patterson Pass Water Treatment Plant. Although the project was discussed with the Water Resources Committee, it had not been brought to the Board. She reasoned that she was not opposed to the loan fund itself, but that she had concerns authorizing a loan application that lists a specific project in the preliminary documents that Board has not approved. She asked for clarifications on what the Drinking Water State Revolving Loan Fund options were, and whether the application would be generic or specific to a project.

In response to Director Ramirez Holmes' questions, Osborn Solitei, Assistant General Manager of Finance, responded that as discussed previously, Staff had explored the options of qualifying loans and bonds for the Ozone Project. The agency is required to submit an application in order to apply for the cost-effective avenue through the Drinking Water State Revolving Fund. The General Manager is required to obtain authorization from the Board in order to begin the application process, but eventually it will be project specific.

Director Palmer added that the loan interest rate at approximately 1.6% is "astounding." Mr. Solitei concurred.

In response to Director Ramirez Holmes' questions, Ms. Duerig explained that when we apply for the State Revolving Fund it will need to be project-specific. However, we will not be asking for money, the application can be changed, withdrawn or not submitted until we have decided. She clarified that Director Ramirez Holmes' statement was correct - Staff had not received Board approval for the Ozone addition at Patterson Pass Water Treatment Plant and there would be further discussion regarding this project at the December Regular Board Meeting. She added that we are simply requesting authority to begin putting together an application with a resolution to include in the package.

President Quigley asked for public comment. None was received.

Director Palmer moved to approve Item 7(d) and Director McGrail seconded the motion. This item was passed with a roll call vote of 5-1-1, with Director Stevens abstaining.

Resolution No. 16-178 Authorizing the General Manager to Submit a Funding Application for the Drinking Water State Revolving Fund (Item 7d)

Item 8 -

STAFFING UPDATE: EMPLOYEE OF THE MONTH RECOGNITION-ELK RANK

a. September Employee of the Month - Athena Watson

Ms. Duerig announced that Athena Watson, Associate Civil Engineer in Zone 7's Facilities Engineering section, was selected as the September Employee of the Month. Athena joined Zone 7 in August 1995 and over the years has worked on various wells and well facility construction projects. She has played an important role in managing programs to keep the agency in compliance with regulatory requirements. The board congratulated Ms. Watson for her accomplishments.

b. Congratulations to Retiree - Boni Brewer

Ms. Duerig extended congratulations to Boni Brewer, Communications Specialist, who retired after over 10 years of service. The Board recognized and applauded Boni in absentia.

Director Palmer moved for approval of the resolution of appreciation and Director Greci seconded the motion, which was approved unanimously.

Resolution No. 16-180 Congratulations to Retiree - Boni Brewer

c. New Employee Introduction - Wes Mercado

Ms. Duerig introduced Wes Mercado. Wes joined Zone 7 as a Junior Engineer working in the Integrated Planning Section. He comes to Zone 7 from the U.S. Forest Service, the U.S. Army Corps of Engineers and Brezack and Associates Planning. Wes is an Eagle Scout and received his Bachelor's degree in Civil and Environmental Engineering from the University of California, Los Angeles and his Master's degree in Civil and Environmental Engineering, specializing in Environmental Hydraulic Engineering, from the University of Illinois, Urbana-Champaign.

Item 9 -

PROPOSED SERVICES CONTRACT WITH HORIZON WATER AND ENVIORNMENT

Elke Rank, Associate Water Resources Planner in the Integrated Planning section, gave a presentation entitled "Professional Services Contract - Programmatic Permits for Routine Stream Maintenance." Ms. Rank highlighted the agency's need to simplify routine stream maintenance activities. Zone 7 has a 5-year Routine Maintenance Agreement from the California Department Fish and Wildlife and obtains as-needed annual permits from both the Regional Water Quality Control Board, and the U.S. Army Corps of Engineers. However, the current process can be both challenging and time consuming. There is often insufficient time to allow for completion on time-critical projects.

Qualification statements were requested to provide "as needed" environmental support services and fourteen proposals were received. The top rated firms were presented to the Board in August 2016. Separate proposals for programmatic permitting were requested from the top three firms (ESA, ICF-Jones & Stokes and Horizon Water and Environment). Based on their proposal, expertise from Horizon Water and Environment was identified as best qualified to provide Zone 7 with long-term stream management permits that can be negotiated simultaneously with the three major environmental regulatory agencies. This approach will improve efficiency, provide cost savings and flexibility. The proposed work will occur in two phases, but the current request is only for Phase 1. Staff recommends awarding the environmental support services contract for Phase 1 to Horizon in the amount not to exceed $425,000.

Director Greci commented that he feels Horizon could not guarantee an improved process in obtaining permits from the regulatory agencies. The costs associated with their services are too high, and he stated that the agency's qualified staff is capable of performing the work. He asked about what to expect in Phase 2.

David Aladjem, Legal Counsel, addressed concerns posed by Director Greci, stating that he agreed that Mr. Greci's comments are a policy matter, but that "the courts have set it" and Zone 7 would be held responsible even if the agency has been unable to secure authorizations to perform time-critical work. Mr. Aladjem cited an example from the mid-90s, where Monterey was held accountable for excessive damage due to the delay in obtaining permits when they experienced immense flooding. As a result, Monterey was held liable by the court of appeals. Mr. Aladjem added that although he may not agree with the process, it is in the agency's best interest to comply.

In response to Director Greci's reservations, Ms. Duerig explained that although Zone 7 has great staff, they are buried keeping up with the normal permit applications. The added workload of seeking programmatic permits could only delay other work.

Director Figuers asked what the potential offsetting cost savings would be available for staff submitting streamlined permits as opposed to doing it without a 5-year permit. Ms. Duerig responded that it was less about the cost savings and more about obtaining necessary permits to be able to complete critical projects and to reduce exposure to liability. At this time, we cannot quantify what the offsetting costs may be.

Director Palmer added that many speakers expressed the importance of having programmatic permits at the ACWA meeting she attended on November 7th. She views them as a "tremendous project saver" because they extend over several years.

Director McGrail inquired about Horizon's track record and credibility. He mentioned that he would like to see that the fulfillment of permits guaranteed and completed in a timely manner for the amount of money being spent. He expressed the importance of in-house staff involvement and supervision. Staff responded that they have received only positive feedback from other agencies that have hired outside consultants to secure permits. Horizon, in particular, had the only track record for success. Their management team derived from the Jones and Stokes firm that has been in operation since the 1960s. They have experience working with Sonoma County, Napa County, as well as other flood agencies around the rim of the bay. It was Staff's opinion that environmental negotiations were never for certain when dealing with regulatory agencies, which is the cause of higher contingencies and allotment for potential slippage. It will be managed by staff to ensure productivity.

Director Ramirez Holmes referred to one project that cost another agency $4M and asked how we can assure that Zone 7's cost will not be as steep. Will staff be able to conduct work in-house to get a subsequent 5-year permit and execute this 5 years at a time? She asked about future projects and what category emergency scenarios fall under. Staff responded that other agencies like Sonoma County are prone to more complex issues and multiple districts of regulatory agencies in their basin; as a result expenses are higher in those areas. Cost savings will be determined over time and an annual list of projects will be submitted and reviewed prior to conducting work. Emergency issues are not subject to the same permitting.

Director Stevens expressed his support for obtaining environmental services from an outside consultant if it makes Zone 7 more successful in the long run.

President Quigley also expressed his support of executing a contract with Horizon. He asked whether doing so would put us in a better position for grant funding opportunities along our flood control channels. Ms. Duerig explained she believed this would depend on the grant application requirements. President Quigley asked for public comment. There was none.

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

Resolution No. 16-181 Award of Environmental Services Contract to Horizon Air and Water

Item 10 -

PROPOSED SERVICES CONTRACT FOR INFORMATION TECHNOLOGY

Mr. Solitei gave a brief background on the Staff Report for the Professional Services Contract for Information Technology Services. Currently, LanLogic, Inc., provides Zone 7 with IT services expected to expire December 31, 2016. Thus, the development of the Request for Proposal was contracted to Nexlevel Information Technology in order to successfully meet the agency's IT needs. Based on the evaluation criteria LanLogic Inc., displayed the best knowledge of technical expertise and were found to be most qualified to provide IT services for the agency. Staff recommended awarding a 3-year contract to LanLogic Inc. for IT services, authorizing the General Manager to extend it up to two additional 1-year periods based on performance. This increases the total 5 year contract value not to exceed $1,286,640.

Director McGrail was pleased to know that staff is satisfied with the current services LanLogic has provided.

Director Stevens was impressed that staff hired NexLevel for knowledge in developing and facilitating the RFP; the outcome proved that we hired the right consultant to begin with.

Director Palmer asked why this is not a 3 or 5-year contract with a revisit, or a 3-year contract with a 2-year extension. Mr. Solitei explained terms are structured in the event better services can be pursued elsewhere, and we are not bound to long-term agreement.

President Quigley asked for public comment. There was none.

Director Palmer moved for approval and Director McGrail seconded the motion. The item was passed with a roll vote of 7-0.

Resolution No. 16-182 Award of Contract for Information Technology Services

Item 11 -

COMMITTEES

a. Water Agency Liaison Committee Meeting - September 22, 2016 - notes

b. Water Resources Committee Meeting - November 2, 2016 - notes

No public comment was received. Item 12 -

REPORTS-DIRECTORS

a. Verbal comments by President

b. Verbal reports

Director Ramirez Holmes said that on October 25th she attended the Water Education Foundation Drought-Delta Workshop and that Kurt Arends, Assistant General Manager in Engineering was also there. She found it interesting to hear some of the different perspectives and lessons learned from the drought. She also attended the Tri-Valley Mayor's Summit in Livermore and found that there was less discussion about water this year. She would like to see it in the forefront even though there is no immediate action that needs to be taken.

Director Greci invited Carol Mahoney, Integrated Water Resources Manager, to share information from a meeting with Scott Haggerty and his legislative aide regarding the Chain of Lakes. Ms. Mahoney said that during their meeting they discussed how to better communicate to the neighbors around Lake A, what types of mining activities are taking place, and how to meet the needs of the future Chain of Lakes. In addition, she mentioned that CEMEX is proposing to further their mining. She added that CEMEX will be submitting a proposed mining amendment application to the county, and when the CEQA notice of preparation is posted, the public will have an opportunity to obtain new information and to ask appropriate questions.

Director Palmer reported that she attended the ACWA meeting on November 4th. Discussions about Region 4, Putah Creek, as well as various projects occurring around the state took place. There was great feedback shared about the fish studies being done to improve Delta conditions. She also mentioned that many agencies expressed their support of programmatic permits and she is happy to hear that Zone 7 is taking the same approach.

Item 13 - Items for Future Agenda - Directors

None were discussed.

Item 14 - Staff Reports (Information items. No action will be taken.)

a. General Manager's Report

b. Legislative Update

c. October Outreach Activities

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

e. Capital Project Status

f. Verbal Reports

Ms. Duerig shared that about two dozen engineers and operation personnel from China were very grateful for staff presentations about water planning and operational management during the drought. They gave Zone 7 gifts of beautiful silk drawings as a token of their appreciation.

Ms. Duerig added that there was an oversight on the Water Inventory Report that was not included in this month's Staff Report. The December agenda will contain two Water Inventory Reports - one for October and one for November. She expressed apologies for the glitch.

The Open Session meeting was adjourned at 8:12 p.m.

President Quigley announced that the Board would be continuing the Closed Session to address the urgency item.

Closed Session (continued)

(e) Conference with Real Property Negotiator:

Property: APN 009A-1650-003-09

Agency Negotiator: G.F. Duerig

Negotiating Party: Sandra Weck, Colliers International

Under Negotiation: Price and terms of payment

Open Session and Report out of Closed Session

The Board came out of Closed Session at 8:38 p.m. and President Quigley said no reportable actions had been taken.

Item 15 -

ADJOURNMENT

The meeting was adjourned at 8:38 p.m.