MINUTES OF THE BOARD OF DIRECTORS
ALAMEDA COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT
May 15, 2019
The following were present:
DIRECTORS: SANDS FIGUERS
ANGELA RAMIREZ HOLMES
MICHELLE SMITH MCDONALD
DIRECTORS ABSENT: NONE
ZONE 7 STAFF: VALERIE PRYOR, GENERAL MANAGER
OSBORN SOLITEI, TREASURER/ASSISTANT GENERAL MANAGER, FINANCE
BRANDON WOODS, ASSOCIATE ENGINEER
ALEXANDRA BRADLEY, COMMUNICATIONS SPECIALIST
DONNA FABIAN, ACTING EXECUTIVE ASSISTANT
COUNSEL: DAVID ALADJEM, DOWNEY BRAND
Item 1 - Call Meeting to Order
President Ramirez Holmes called the meeting to order at 6:00 p.m.
Item 2 - Swearing In of Director
Acting Executive Assistant Donna Fabian administered the Oath of Office to recently appointed Director Michelle Smith McDonald, and the Board immediately went into Closed Session.
Item 3 - Closed Session
(a) Conference with Labor Negotiators pursuant to Government Code section 54954.5:
Agency Negotiator: Valerie Pryor
Employee Organizations: Alameda County Management Employees Association; Alameda
County Building and Construction Trades Council, Local 342, 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 pursuant to Government Code §54956.9(d)(1). 2 cases. (1) Edwin Belshe and Ginger Belshe v. Alameda County Flood Control and Water Conservation District, Zone 7, et al., Alameda County Superior Court Case No. RG17868354; (2) City and County of San Francisco v. City of Dublin et al., Contra Costa County Superior Court Case No. CIV MSN18-0928
(c) Conference with Legal Counsel - Potential litigation pursuant to Gov't Code section 54956.9(d) (4): 2 cases
(d) Conference with Legal Counsel - Potential litigation pursuant to Gov't Code section 54956.9(d) (2): 2 cases
Item 4 -
Open Session and Pledge of Allegiance
President Ramirez Holmes called the meeting back into session at 7:00 p.m. and led a salute to the flag.
Item 5 -
Report Out ot Closed Session
Nothing to report.
Item 6 -
Mario Gonzalez-Brito of the Alameda County Management Employees Union Local 3, introduced himself as the new Business Agent representing managers and supervisors at Zone 7. He extended an offer that indicated they would be happy to attend Closed Session meetings if the Board wanted to hear from them.
Item 7 -
Minutes-Special Board Meeting of April 10, 2019/Regular Board Meeting of April 17, 2019
President Ramirez Holmes stated that the minutes of the Special Board Meeting of April 10th and the Regular Board Meeting of April 17th were both revised as submitted. Director Palmer moved that the minutes of the Special Board Meeting of April 10, 2019, be approved and Director Quigley seconded the motion. The minutes were approved by a voice vote of 6-1, with Director Smith McDonald abstaining.
Director Quigley moved that the minutes of the Regular Board Meeting of April 17th, 2019, be approved and Director Figuers seconded the motion. The minutes were approved by a voice vote of 5-2, with Directors Palmer and Smith McDonald abstaining.
Item 8 -
Director Palmer asked that Item 8a be pulled. Director Quigley moved to approve Items 8b through 8e and Director Gambs seconded the motion. Items 8b through 8e were approved by a roll call vote of 7-0.
Director Palmer asked about page 2 of the item where it stated "Single Audit Report (if needed)" and why it was not known whether it was needed or not. Mr. Solitei responded that the Single Audit Report is a requirement for entities that expend $750,000 or more a year in Federal awards and is the primary mechanism used by Federal agencies to ensure accountability. Director Quigley made a motion to approve Item 8a and Director Palmer seconded it. The passed with a roll call vote of 7-0.
Resolution No. 19-32 Amendment to External Auditor's Services Agreement (Item 8a)
Resolution No. 19-33 Out-of-State Travel to Attend the 2019 American Water Works (AWWA) Annual Conference and Exposition Conference in Denver, CO (Item 8b)
Resolution No. 19-34 Award of Construction Contract for the Chain of Lakes Well No. 1 Facility Stabilization Project (Item 8c)
Resolution No. 19-35 Award of Construction Contract for the Cal Water Service Turnout No. 5 Renewal/Replacement Project (Item 8d)
Resolution No. 19-36 Services Contract with Platinum Security Service, Inc. for Security Guard Services (Item 8e)
Item 9 -
Ms. Pryor stated that Fermin Navarro was hired on April 22nd as a Safety Technician II. She went over some highlights from his past work experience. The Board applauded and welcomed Fermin in absentia.
Ms. Pryor also informed the Board that Zone 7 celebrated Take Our Children to Work Day on April 25th, with eight children in attendance. She briefly went over the day's agenda, and thanked staff for their assistance in the various tours and activities.
Ms. Pryor also stated that the annual Service Awards ceremony took place earlier in the day celebrating 17 employees reaching 5-year increment anniversaries. All employees were honored with a continental breakfast and a slideshow of photos of the awardees.
Item 10 -
Presentation of Science and Engineering Fair Attendees
Ms. Bradley introduced eight students from the Livermore Valley Joint Unified School District. Students gave a brief overview of their Science Odyssey fair project. All students and the Board stood in front of the dais for a group photo. The students received a Certificate of Recognition and a $50 visa gift card.
Item 11 -
DVWTP Ozonation Project Quarterly Progress Presentation
Mr. Woods gave a presentation on the status of the Del Valle Water Treatment Plant (DVWTP) Ozonation Project. He stated that the construction progress continues to do well; however, the project schedule remains slightly at risk, as there has been some delay of critical ozone equipment. This was a result of the partial government shutdown earlier this year as it sat in the Port of NY waiting to clear customs. The project remains on schedule and within budget.
Item 12 -
Revised Reserve Policy
Mr. Solitei provided a background on the Revised Reserve Policy, which was adopted by the Board on September 28, 2016. He said staff met with the Retailers on November 13, 2018 and January 15, 2019 to discuss the Reserve Policy, and then met with the Finance Committee on March 5, 2019 and April 30, 2019. At the April 30, 2019 meeting, the Finance Committee recommended combining the Drought Contingency and Rate Stabilization Reserves into one reserve, and renaming it the "Reserve for Economic Uncertainties." It was also recommended to add the Debt Rate Stabilization Reserve, and remove the Building Sinking Fund from the policy.
President Ramirez Holmes noted that the Finance Committee Meeting notes are now available and copies were on the dais, and on the rack wall in the hallway. Director Sanwong asked what distinguishes using the Emergency Reserve versus the Reserve for Economic Uncertainties since natural disasters are listed under both. Mr. Solitei responded that the Emergency Reserve would be used if it were a declared emergency determined by the President, Governor, Board of Supervisors, Zone 7 Board of Directors, etc. He said the Reserve for Economic Uncertainties could come into play during a drought where we ask for water conservation and our revenues would drop, so that we would not have to increase rates.
Director Gambs said it made sense to combine the two reserves into Economic Uncertainties and thanked staff for all the work that went into revising the policy. He asked if the Economic Uncertainties Reserve minimum amount would be adequate to prevent raising rates after a historical drought. Ms. Pryor responded that from the staff report for the Finance Committee, we tried to simulate a different rate structure with the previous drought. If the Agency had a similar rate structure with a fixed charges as we do now, the reserve balance would have been $13.1M, instead of the actual $5.4M, about an $8 million swing. President Ramirez Holmes said that we did change two things since the drought. The first was changing the rate structure to include a fixed charge, and we are not yet collecting the total of what our fixed costs are (around 70%). The second thing we did was implement a water shortage surcharge through the Urban Water Management Plan. President Ramirez Holmes wanted to reiterate that no matter which option was chosen, we would not meet the minimum amount this fiscal year. She also wanted to confirm that our projected fiscal year-end for Fund 100 reserves of $14.5M is $1.3M more than the budget projection of $13.2M, and Mr. Solitei replied yes. She wanted to point that out because it was a concern brought up by the Retailer's regarding surpluses. She noted that page 10 of the proposed policy needed to be revised because we no longer have a pay-as-you-go funding strategy. She also pointed out that on pages 9 and 10 of the proposed policy regarding the initial rate stabilization fund deposits, there are specific amounts listed that she requested those not to be included, but just simply that the reserve was not going to be required to have a minimum or maximum. She further noted that on the Finance Committee notes, Director Quigley was in attendance, and not Director Palmer. Director Sanwong advocated for a different name for the Economic Uncertainties reserve but the Board could not come up with a more fitting name.
Carol Atwood, Administrative Services Manager at Dublin San Ramon Services District (DSRSD), thanked Zone 7 for including the Retailers in the Reserve Policy discussions. She said DSRSD was fine with what was being done with operating reserves. As far as our Emergency Reserves, she said they thought there are very healthy capital reserves in Fund 120. During uncertainties and financial problems, there would be some wiggle room on the deferral of projects and it might be a duplication to have an additional Emergency Reserve. As far as the Economic Uncertainty Reserve, they recommended a level equal to 25% of volume-based water sales.
Director Figuers moved that the Board approve the modified Option 3 Reserve Policy and associated wording changes, which were recommendation by the Finance Committee, and President Ramirez Holmes seconded the motion. The item passed with a roll call vote of 7-0.
Resolution No. 19-37 Reserve Policy (Item 12)
Item 13 -
President Ramirez Holmes stated that the Investment Policy was required to come back to the Board annually, and there are minimal changes. Mr. Solitei said that the changes could be found on pages 5 and 10 highlighted in red. Director Gambs asked for clarification on why there were funds that were invested and funds with the County. Mr. Solitei responded that in 2016 the Board decided to invest some of Zone 7 funds, which is why the Investment Policy was created. The funds that are with the County are being invested by the County's policy. Ms. Pryor said by investing two ways, it diversifies our Investment Portfolio. As there was no public comment, Director Palmer moved to approve the item and Director Figuers seconded. The Investment Policy was approved by a roll call vote of 7-0.
Resolution No. 19-38 Investment Policy and Delegating Authority to Deposit and Invest Funds to the Treasurer (Item 13)
Item 14 -
Consider Action to Increase the Compensation of Zone 7 Board Members
President Ramirez Holmes stated that a review of the Board's compensation was to be done every two years. She further stated that at the April 17, 2019, Regular Board Meeting, the Board considered three options, and requested that Option 2 be brought back to the full Board at the May 15th Board Meeting for a public hearing and to adopt the Ordinance. There was no public comment and there was no discussion by the Board. Director Figuers moved that the item be approved, and Director Palmer seconded it. The item passed by a roll call vote of 5-2 with Directors Quigley and Ramirez Holmes opposed.
Ordinance No. 19-01 Increase Zone 7 Board of Directors Compensation
Item 15 -
Committees: Finance Committee Meeting - April 30, 2019 -notes pending
a. Finance Committee Meeting - April 30, 2019 - notes
Item 16 -
a. Verbal comments by President
b. Written reports
c. Verbal reports
President Ramirez Holmes welcomed Director Smith McDonald and announced that she was assigned to the Water Resources Committee. She attended the Alameda County Agricultural Advisory Committee meeting on April 23rd where there were some concerns regarding our fee collection policy for agriculture users. She also attended Assemblymember Rebecca Bauer-Kahan's open house at her office in San Ramon, and was able to talk with her legislative representative about our forthcoming letter against the water tax. She also went to Monterey to the Site's Reservoir Open House with Director Sanwong where they were talking about scheduling a tour. Director Sanwong submitted a written report and shared some highlights. Director Figuers mentioned that he attended the ACWA Groundwater meeting. Director Quigley mentioned he attended the ACWA Conference, and was working on a written report. Director Palmer said she also attended the ACWA Conference and provided highlights from the various classes she attended. She also attended the Water Resources Committee meeting. Director Gambs stated that he also attended the ACWA Conference and the Livermore Chamber of Commerce Business Alliance meeting. Newly elected Director Smith McDonald thanked staff and the Board for the warm welcome.
Item 17 -
Items for Future Agenda-Directors
There were no items mentioned for future agenda.
Item 18 -
a. General Manager's Report
b. Legislative Update
c. April Outreach Activities
d. Capital Projects Status Report
e. Water Inventory and Water Budget Update
f. Investment Report as of March 31, 2019
g. Verbal reports
Ms. Pryor highlighted a few items from her staff report, the first being that Zone 7 has launched its 2019 interactive storm damage repairs and trail closures map. She then talked about Governor Newsom's support of a single tunnel going through the Delta, as opposed to two. Further, on May 2nd, the Department of Water Resources (DWR) announced that it withdrew its California Waterfix permitting and environmental work, and initiated planning and permitting for a single smaller tunnel. Therefore, California Waterfix was no longer the name of the project. They are calling it Delta Conveyance until a new name is given. She stated that DWR will still be doing the environmental and permitting process, but the Delta Conveyance Design and Construction Authority (DCA) will be doing the engineering and design. We expect DWR will begin communications with state water contractors soon. President Ramirez Holmes asked about the Per- and polyfluoroalkyl Substances (PFAS) status and would like to continue receiving updates in the future. Ms. Pryor stated that staff will continue to report on this and we will be doing quarterly monitoring and reporting.
Director Palmer commented on the Capital Projects Status Report. She said she was very pleased the way it was setup and she got more information out of it than she has ever gotten before.
Item 19 -
The meeting was adjourned at 9:05 p.m.