June 10, 2021 Fremont, California The regular monthly ...

June 10, 2021 Fremont, California

The regular monthly meeting of the Board of Directors of ALAMEDA COUNTY WATER DISTRICT was held on June 10, 2021, at the hour of 6:00 P.M.

Due to COVID-19 and in accordance with Governor Newsom's Executive Order N-25-20 which suspends portions of the Brown Act, this meeting was conducted by Zoom Webinar and Teleconference, and members of the public were invited to participate.

Present: Directors Weed, Gunther, Huang, Sethy, and Akbari

Staff members present: General Manager Robert Shaver, Manager of Operations & Maintenance Kurt Arends, Manager of Finance Jonathan Wunderlich, Manager of ,¥ater Resources Laura Hidas, Manager of Engineering & Technology Services Ed Stevenson, Water Production Manager Michael Wickham, Supervising Financial Analyst Sydney Oam, Facilities Maintenance Manager Dan Stevenson, Human Resources & Risk Manager Jennifer Solito, General Counsel Patrick Miyaki, and Assistant District Secretary Andy Warren.

President Aziz Akbari presided.

Robert Shaver led in the Salute to the Flag.

3 - PUBLIC COMMENTS

• Mr. Kelly Abreu, a resident of Fremont, compared drought conservation goals by different agencies within the Bay Area and throughout the state.

4 - CONSENT CALENDAR

A motion was made by Director Huang to add Items 5.1 through 5.9 and Items 5.12 through 5.15 to the Consent Calendar, seconded by Director Sethy.

The motion was passed by the following vote:

AYES: NOES: ABSENT:

Directors Weed, Gunther, Huang, Sethy, and Akbari None None

A motion was made by Director Huang, seconded by Director Gunther to approve the following items on the Consent Calendar as amended.

4.1 Approval of Minutes of Regular Board Meeting of May 13, and Special Board Meetings of May 19, and May 27, 2021

4.2 Ratification of Payment of Audited Demands dated May 7, May 14, May 21, and May 28, 2021

Minutes - June 10, 2021

4.3 Resolution Placing in Nomination Director John H. Weed as a Member of the Association of California Water Agencies Region 5 Board

RESOLUTION NO. 21-023

OF THE BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT PLACING IN NOMINATION JOHN H. WEED AS MEMBER OF THE ASSOCIATION OF CALIFORNIA WATER AGENCIES REGION 5 BOARD

4.4 Resolution Approving and Authorizing Execution of Public Water System Extension Agreement with Toll West, LLC., Warm Springs Area 3 Phase 2, ACWD No. 2018-0022


OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT APPROVING AND AUTHORIZING EXECUTION OF PUBLIC WATER SYSTEM EXTENSION AGREEMENT WITH TOLL WEST, LLC., TRACT 8398, WARM SPRINGS AREA 3 PHASE 2, ACWD NO. 2018-0022

4.5 Resolution Establishing Fiscal Year 2021/22 Appropriations Limit


OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT ESTABLISHING APPROPRIATIONS LIMIT FOR FY 2021/22

5.1 Authorization of Agreement for Preventative Maintenance and Repair of Diesel Generators

5.2 Authorization to Award Contract for Welding Services

5.3 Authorization to Award Contract for Provision and Delivery of Fuel

5 .4 Authorization of Agreement for Janitorial Services

5.5 Authorization to Award Contract for Paving Services

5.6 Resolution Approving and Authorizing the Designation of Certain Products by Specified Brand or Trade Name

5.7 Authorization of Purchase Orders for Negotiated and Bid Water Treatment Chemicals

5 .8 Authorization to Enter into Agreement for the Retrofit of Lighting Systems and Loan Agreement with PG&E

5.9 Authorization of Purchase Order for Disposal of Materials to Newby Island Landfill

5.12 Resolution Honoring Therese C. Wooding upon Her Retirement from District Service

5.13 Resolution Approving an Updated Statement of Investment Policy

5.14 Resolution Approving an Updated Statement of Reserve Fund Policy

of 41


5.15 Authorization to Enter into Participation Agreements with the Bay Area Water Supply and Conservation Agency for FY 2021/22 Water Use Efficiency Programsand Related Services and Adopt a Resolution Amending the Rate and Fee Schedule


AYES: NOES: ABSENT:


5 - ACTION CALENDAR

5.1 * AUTHORIZATION OF AGREEMENT FOR PREVENTATIVE MAINTENANCE AND REP AIR OF DIESEL GENERATORS

The District contracts with outside services companies to provide preventative maintenance, load testing, and repair services for its stationary and mobile emergency generators. The current contract with California Generator Service will expire on June 30, 2021. A Request for Proposal (RFP) for these services was issued on April 2, 2021 and three proposals were received and opened on May 6, 2021. The RFP package included a two-year base term with three additional one-year options, to be exercised at the sole discretion of the District. California Generator Service of San Leandro, CA submitted the highest ranked proposal that was deemed both responsive and responsible. Sufficient funding is included for this expense in the proposed budget and will be included in future budget proposals. This item was reviewed with the Operations and Water Quality Committee on June 1, 2021. Board authorization for the maintenance and repair of standby and emergency generators will assist the District in achieving its Strategic Plan Goal 1.1-Efficiently Manage and Maintain Our Infrastructure to Ensure Reliability and Goal 1.3 Continuously Improve Emergency Preparedness and Response Capabilities.

The District has six stationary generators located at various facilities and seven portable emergency generators, each of which is inspected monthly and tested annually with a load bank to assure the ability to continue to function in the event of a power outage. The reliability of these generators is essential to the District's emergency preparedness. California Generator Service was the successful proposer in 2016 and was awarded a five-year contract to perform monthly preventative maintenance and limited repair work. The existing contract will expire on June 30, 2021 and a new contract is needed to maintain the reliable operation of District generators. An RFP for these services was issued on April 2, 2021 and three proposals were received and opened on May 6, 2021. The proposals were evaluated by staff in accordance with established criteria contained in the RFP and California Generator Service of San Leandro, California was the highest ranked proposal that was deemed to be both responsive and responsible. The agreement has an initial term of two base years and up to three one-year extensions, if the service has been satisfactory, with the pricing increases for subsequent option to be determined by U.S. Bureau of Labor Statistics, Employment Cost Index Table 13, with a yearly escalation cap of 3.5%. In addition, an allowance of approximately 25% is added to cover the cost of minor repairs and the replacement of parts identified during the monthly inspections and testing process.

of 41


A motion was made by Director Huang, seconded by Director Gunther to 1) authorize the General Manager to enter into an agreement for preventive maintenance and repair services with California Generator Service for a base term of two years for an estimated cost of $97,400 and; 2) authorize the General Manager to exercise up to three one-year option terms, if the services are satisfactory to the District, for a potential contract term of five years and for a total not-to-exceed amount of $254,000 which includes an allowance for escalation at an estimated annual rate of 3.5% and an allowance of approximately 25% for repairs and replacement parts.


AYES: NOES: ABSENT:


5.2* AUTHORIZATION TO AWARD CONTRACT FOR WELDING SERVICES

The District's current agreement for the provision of pipeline field and shop welding services will expire on June 30, 2021. To ensure continued service, staff issued an invitation for bids for welding services on April 9, 2021, which closed on April 30, 2021. The solicitation was sent to over 50 firms. The lone responsive and responsible bid was submitted by Ferguson Welding Services, Inc. Sufficient funding is included for this expense in the proposed budget and will be included in future budget proposals. This item was reviewed with the Operations and Water Quality Committee on June 1, 2021. Board approval of this Item will assist the District in achieving its Strategic Plan Goal 1.1 - Efficiently Manage and Maintain Our Infrastructure to Ensure Reliability.

Contract welding services are needed to suppmt the District's distribution system maintenance and repair program including the field welding of steel pipe joints associated with the installation of customer requested service and fire lines, water meter manifolds, fire hydrant laterals, and the fabrication and installation of steel offsets. Additionally, welding services are needed to perform emergency repairs to steel water mains, and to make repairs or to fabricate modifications to District equipment. Historically, approximately 85% of the contract welding work is associated with customer requested projects for which the cost is fully reimbursed to the District. Current expenditures average approximately $145,000 per year, and staff anticipates a minor increase to $160,000 next fiscal year.

Staff issued an invitation for bids on April 9, 2021 that was sent to approximately 55 firms that were registered on the District's online bidding platform. On April 30, 2021, the invitation for bids closed with one responsive and responsible bid received from Ferguson Welding Services, Inc. Ferguson Welding is the current provider of welding services to the District and their services have been satisfactory.

A motion was made by Director Huang, seconded by Director Gunther to 1) authorize the General Manager to enter into an agreement for welding services with Ferguson Welding Services, Inc., for a base term of two--years for an estimated cost not-to-exceed $320,000, and 2) authorize the General Manager to exercise up to three one-year option terms, if services are satisfactory, for a total contract term of five years and a total not-to-exceed amount of $800,000.

of 41



AYES: NOES:

Directors Weed, Gunther, Huang, Sethy, and Akbari None

ABSENT: None

5.3* AUTHORIZATION TO AWARD CONTRACT FOR PROVISION AND DELIVERY OF FUEL

The District's contract with Western States Oil to provide fuel for the District's fleet will expire on June 30, 2021. An Invitation for bids (IFB) for these services was issued on April 16, 2021. Three bids were received and opened on May 14, 2021. Upon review, all three bids were deemed both responsive and responsible. The IFB package included a two-year base term with three additional one-year options to be exercised at the sole discretion of the District. Merrimac Petroleum, Inc., dba Merrimac Energy Group of Long Beach, California, submitted the lowest bid. Sufficient funding is included for this expense in the proposed budget and will be included in future budget proposals. This item was reviewed with the Operations and Water Quality Committee on June 1, 2021. Board authorization for the provision and delivery of fuel will assist the District in achieving its Strategic Plan Goal 1.1- Efficiently Manage and Maintain Our Infrastructure to Ensure Reliability.

The District's fleet consists of approximately 150 vehicles and equipment that use unleaded gasoline and No. 2 clear diesel. The bid results range from a low bid of $281,237.00 to a high bid at $287,930.50.

The unit price the District will pay for fuel consists of the average rack price for fuel posted by Oil Price Information Service (OPIS) for Petroleum Allocation District 5 (PADS) on the day the fuel is delivered to the District, plus or minus the adjusted factor quoted by Merrimac Petroleum Inc. The estimated budget for fuel in FY 2021/22 is $300,000 which includes a contingency based on the average cost of fuel and quantity used over the past three years. Historically, the rack price for fuel has been highly volatile subject to wide price fluctuations. Over the past three years fuel has fluctuated by more than two dollars a gallon during brief and/or extended periods. The low-price bid is summarized below.

Unleaded Diesel No 2

Estimated quantities for bidding 55,000 55,000 purposes

Adjustment to daily rack rate price -.0801 -.0019

A motion was made by Director Huang, seconded by Director Gunther to 1) authorize the General Manager to enter into an agreement for the provision and delivery of fuel with Merrimac Petroleum Inc. for a base term of two years for an estimated cost of $562,474 and; 2) authorize the General Manager to exercise up to three one-year option terms, if the services are satisfactory

of 41


to the District, for a potential contract term of five years and for a total not-to-exceed amount of $1,406,185.00.


AYES: NOES: ABSENT:


5.4* AUTHORIZATION OF AGREEMENT FOR JANITORIAL SERVICES

The District contracts with outside service companies to provide janitorial services for five district facilities. The current contract with Transpacific Building Maintenance will expire on June 30, 2021. A Request for Proposal (RFP) for these services was issued on April 1, 2021. On May 4, 2021, four proposals were received and evaluated. Transpacific Building Maintenance Inc. of Santa Clara, California submitted the proposal that received the highest ranking based on the criteria in the RFP and was deemed both responsive and responsible. The RFP package included a two-year base term with three additional one-year options, to be exercised at the sole discretion of the District. Sufficient funding is included for this expense in the proposed budget and will be included in future budget proposals. This item was reviewed with the Operations and Water Quality Committee on June 1, 2021. Board approval of this Item will assist the District in achieving its Strategic Goal l.1- Efficiently Manage and Maintain Our Infrastructure to Ensure Reliability.

The District contracts out for janitorial services at five facilities: headquarters (including warehouse and garage restrooms), Mission San Jose Water Treatment Plant, Water Treatment Plant No. 2, Peralta Tyson Blending Facility, and the Newark Desalination Facility. The service levels vary from one day a week at the Newark Desalination Facility to five days a week at headquarters and Water Treatment plant No. 2.

Proposals were solicited and a total of four \Vere received. All proposals were evaluated by staff in accordance with established criteria that included: technical competence, past performance, approach to scope of services, business operations, and cost. The proposal submitted by Transpacific Building Maintenance, Inc. was ranked highest amongst the four proposals received. Transpacific Building Maintenance, Inc. has been the District's janitorial service provider since 2016 and have performed satisfactorily during their tenure.

The estimated $82,800 annual cost for janitorial services includes the cost for base services at the five District facilities, potential holiday, and weekend charges and a 15% contingency for additional services, as needed or emergency, outside the base scope of work. Examples include the cleaning of plastic and cloth chairs, disinfection of microbial exposed areas, or any other janitorial related services not identified as a base service in the janitorial services agreement. The contract includes provisions for up to three one-year extensions if services have been satisfactory, with the pricing escalator for any subsequent option to be determined by the Department of Labor's Employment Cost Index, Table 13.

A motion was made by Director Huang, seconded by Director Gunther to 1) authorize the General Manager to enter into an agreement for janitorial services with Transpacific Building Maintenance

of 41


Inc. for a base term of two years for an estimated cost of $165,600, and; 2) authorize the General Manager to exercise up to three one-year option terms, if the services are satisfactory to the District, for a potential contract term of five years and for a total not-to-exceed amount of $431,800 which includes an allowance for escalation at an estimated annual rate of 3.5% and an additional 15% contingency to address additional work requests.


AYES: NOES: ABSENT:


5.5* AUTHORIZATION TO AWARD CONTRACT FOR PAVING SERVICES

The District's current contract to repair and replace asphalt pavement removed during pipeline trenching work and to adjust valve pot elevations at various street construction sites within the District's service area will expire on June 30, 2021. An Invitation for Bids (IFB) for the provision of paving services was issued on April 12, 2021. Two bids were received and opened on May 4, 2021. Upon review, both bids were deemed responsive and responsible. The IFB package included a two-year base term with three additional one-year options; to be exercised at the sole discretion of the District. Dun-Rite Excavating, Inc. (Dun-Rite) of Livermore, California submitted the lowest bid. Sufficient funding is included for this expense in the proposed budget and will be included in future budget proposals. This item was reviewed with the Operations and Water Quality Committee on June 1, 2021. Board approval of this Item will assist the District in achieving its Strategic Goal 1.1-Efficiently Manage and Maintain Our Infrastructure to Ensure Reliability.

Contract asphalt paving services are needed for patch paving of pipeline trench cuts throughout the District's service area; patch paving and overlays for planned service lateral replacements; compaction testing of backfill and pavement work; and valve pot adjustments for customer jobs and annual city street overlay projects. The bid results for one year of asphalt paving repair services ranged from Dun-Rite's low bid of $1,294,675 to a high of $2,257,650. Dun-Rite of Livermore, California, has been in business under its present name for 27 years and has been providing satisfactory asphalt paving repair services to the District for the past five years. DunRite's quote for providing similar services to the District for the current fiscal year totaled $1,294,675. The estimated fiscal year cost of these services is $1,489,000 and includes a 15% contingency for possible additional unanticipated paving work. The contract includes provisions for up to three one-year extensions if the services have been satisfactory, with pricing for any subsequent option to be determined by US Bureau of Labor Statistics Producer Price Index (PPI) with a yearly escalation cap of 3.5%.

A motion was made by Director Huang, seconded by Director Gunther to 1) authorize the General Manager to enter into an agreement for the provision of paving services with Dun-Rite Excavating, Inc. for a base term of two years for an estimated cost of $2,978,000 and; 2) authorize the General Manager to exercise up to three one-year option terms, if the services are satisfactory to the District, for a potential total contract term of five years and for a total not-to-exceed amount of $7,445,000 plus annual escalation costs determined by the US Bureau of Labor Statistics Producer Price Index (PPI).

of 41



AYES: NOES:


ABSENT: None

5.6* RESOLUTION APPROVING AND AUTHORIZING THE DESIGNATION OF CERTAIN PRODUCTS BY SPECIFIC BRAND OR TRADE NAME

Annually, District staff prepares a list of standardized components for public works projects planned for the upcoming fiscal year. The specifying of standardized components allows the opportunity for substantial cost savings in reduced spare parts inventory and staff training on the operation and repair of equipment. Public Contract Code Section 3400 allows a specific make or model of material or equipment that is publicly bid or specified in a public works contract provided specific requirements are met. This item was reviewed with the Operations and Water Quality Committee on June 1, 2021. Board approval of this Item will assist the District in achieving its Strategic Plan Goal 1.1 - Efficiently Manage and Maintain Our Infrastructure to Ensure Reliability.

Public Contract Code Section 3400 allows the District to procure equipment by designating the specific make or model by making a finding that is included in the invitation for bids for the material or piece of equipment for any of the following purposes:

1. To test a product to determine its suitability for future use. 2. To match other products in use (i.e. standardize), on a public improvement either

completed or proposed. 3. To obtain a necessary item that is only available from one source. 4. To respond to an emergency declared by the local agency.

For FY 2021/22, there are several capital projects that District staff desires to standardize the mechanical and electrical equipment and instrument and control devices specified for these projects. These projects include, for example, PLC hardware upgrades, communications and telemetry equipment, electrical equipment, control valves, and SCADA systems. Additionally, this list is also used for maintenance generated equipment replacements. All items listed have been previously evaluated as best meeting the District's needs based on equipment performance (i.e., accuracy, repeatability, etc.), reliability, purchase and maintenance costs, parts and service availability, and function applicability.

A motion was made by Director Huang, seconded by Director Gunther to adopt a resolution finding that the identified mechanical, electrical, instrument, and control equipment will be designated by specific manufacturer or make/model for public works projects advertised during FY 2021/22.


OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT APPROVING AND AUTHORIZING THE DESIGNATION OF CERTAIN PRODUCTS BY SPECIFIED BRAND OR TRADE NAME

of 41

Minutes June 10, 2021


AYES: NOES: ABSENT:


5.7* AUTHORIZATION OF PURCHASE ORDERS FOR NEGOTIATED AND BID WATER TREATMENT CHEMICALS

The District has contracts for nine primary bulk chemicals used in the water treatment process. Five of those contracts will expire at the end of June 2021. Five chemicals, sodium hypochlorite, sodium hydroxide, hydrofluorosilicic acid, aqua ammonia, and ferric chloride, are purchased through the Bay Area Chemical Consortium (BACC), a collective of over 35 utilities and governmental agencies that uses its size and economy of scale to negotiate lower pricing on chemicals used in water and wastewater industries. However, the BACC received no responsive bids for hydrofluorosilicic acid for FY 2021/22. To obtain the required chemical, staff independently negotiated with DuBois Chemicals, Inc. to provide hydrofluorosilicic acid. For antiscalant, and cationic polymer, staff recommends exercising the options in the current contracts to extend them for an additional 12 months. Contracts for liquid oxygen and carbon dioxide were approved in October 2020; Staff recommends extending the Liquid Oxygen contract when the oneyear term expires. Carbon dioxide is not included in this staff report and is scheduled for reevaluation in the fall. The estimated aggregate cost for the purchase and delivery of these eight chemicals in FY 2021/22 is $1,760,550. Adequate funding has been included in the proposed FY 2021/22 budget to cover the cost of water treatment chemicals. This item was reviewed with the Operations and Water Quality Committee on June 1, 2021. Board authorization of the purchase orders for the water treatment chemicals will help the District meet its Strategic Plan Goal 1 Cost Effectiveness and Value.

Staff evaluated eight existing contracts for water treatment chemicals to determine whether it would be best to either renew or to re-bid the chemicals contracts based on market conditions. The determination was to re-bid five chemicals, sodium hypochlorite, sodium hydroxide, hydrofluorosilicic acid, aqua ammonia, ferric chloride, and cationic polymer, and to extend current contracts for anti-sealant, and cationic polymer. Liquid oxygen, supplied by Airgas USA LLC, has a one-year term agreement that was approved by the Board in October 2020.

The District has continued to participate as a member of the Bay Area Chemical Consortium (BACC) and takes advantage of the collective BACC bidding process to negotiate lower prices on water treatment chemicals. Consortium members have generally saved between 10 to 30 percent on bulk chemical purchases using the BACC process. For FY 2021/22, four of these chemicals, sodium hypochlorite, sodium hydroxide, aqua ammonia, and ferric chloride were bid through the BACC. After the BACC received no responsive bids for hydrofluorosilicic acid, Staff conducted market outreach and negotiated directly with DuBois Chemical Inc. to provide the required chemical. The District expects to save up to 4% and 7.4% on the unit costs of ferric chloride and sodium hydroxide in FY 2021/22 compared to the previous year, as shown in the summary table below. However, unit costs will increase in FY 2021/22 for the remaining chemicals due to decreased production and/or market price adjustments. The hydrofluorosilicic acid increase is due to significant increases in freight, and a decrease in the supply.

of 41


Cationic polymer is used at Water Treatment Plant No. 2 during the settling process. The original agreement with Polydyne, Inc. was authorized by the Board in June of 2019 with a base term of two years and three one-year options to renew. The product and services provided to date by Polydyne, Inc. have been satisfactory and in compliance with the contract. Staff recommends exercising the first contract extension for cationic polymer for FY 2021/22 with a 3.5% increase in unit price.

The original agreement with King Lee Technologies for anti-sealant was authorized by the Board in June 2017 and contained provisions for extending the contract for four additional 12-month periods. The third agreement extension with King Lee Technologies will expire on June 30, 2021. The product and services provided to date by King Lee Technologies have been satisfactory and in compliance with the contract. Staff recommends exercising the fourth and final contract extension for anti-sealant for FY 2021/22 with no increase in unit price.

Liquid oxygen's original one-year agreement with Airgas was authorized by the Board in October 2020 and contains provisions for extending the contract for four additional 12-month periods. The current unit price, included in the table below, is expected to increase by not more than four (4) percent in November per the current agreement. This is included in the requested not-to-exceed aggregate amount for water treatment chemicals for FY 2021/22. The product and services provided to date by Airgas USA, LLC have been satisfactory and in compliance with the current agreement. Staff recommends exercising the first contract extension when the current term expires in November 2021.

Due to the uncertain market conditions, Staff will reevaluate the market price of carbon dioxide at the end of the current agreement term and either rebid or extend as appropriate.

A summary of the proposed unit costs and previous year unit costs for all eight chemicals is included below. The estimated aggregate cost for the eight chemical contracts for FY 2021/22 is $1,760,550.

Previous Unit Price

Item Chemical

Bid Supplier

Unit Unit Units

Percent No. Process Price Change From

Price Last Year

Sodium Olin, 1 Hypochlorite BACC

Corporation. $0.704 $0.6582 gal 7%

(12.5%)

Thatcher

2 Ferric Chloride BACC Company of

$731.00 $761.00 dry ton -4% California,

Inc.

3 Sodium

BACC Univar USA,

$0.2082 $0.2248 dry lb -7.4% Hydroxide at 50% Inc.

of 41

Minutes -June 10, 2021

Previous Unit Price

Item Chemical

Bid Supplier Unit

Unit Units Percent

No. Process Price Change From Price

Last Year

Hydrofluorosilicic DuBois

4 Negotiated Chemicals, $2.58 $1.5200 gal 70% Acid

Inc

5 Aqua Ammonia

BACC Hills Brothers

$1.03 $0.66 gal 56% 19% Chemical Co.

6 An ti-scalan t Negotiated King Lee

$1.14 $1.14 lb 0% Technologies

7 Cationic Polymer Negotiated Polydyne, Inc. $2,261.50 $2,185 liquid

3.5% ton

8 Liquid Oxygen Negotiated Airgas USA

$0.567 $0.567 ccf 0% LLC

A motion was made by Director Huang, seconded by Director Gunther to authorize the purchase orders to furnish and deliver the eight water treatment chemicals (sodium hypochlorite, ferric chloride, sodium hydroxide, hydrofluorosilicic acid, aqua ammonia, cationic polymer, antiscalant, and liquid oxygen), for FY 2021/22 for an aggregate amount not-to-exceed $1,760,550.


AYES: NOES: ABSENT:


5.8* AUTHORIZATION TO ENTER INTO AGREEMENT FOR THE RETROFIT OF LIGHTING SYSTEMS AND LOAN AGREEMENT WITH PG&E

The District regularly reviews energy use and seeks ways to reduce energy consumption, save money, and reduce environmental impact. One such project to reduce energy use and save money is a lighting retrofit and upgrade project to replace existing incandescent and fluorescent lighting with high efficiency LED models. The project also includes the installation of lighting system control enhancements such as occupancy sensors to further maximize energy reduction. The lighting system upgrades, and installation work will cost approximately $288,000 to complete. The District will save an estimated $7,850 a month, or $94,000 per year in energy costs. The savings in energy costs for the lighting upgrade work will pay for itself in approximately three years. Pacific Gas & Electric Company (PG&E) offers a program called On-Bill Financing (OBF) that is essentially a no cost/no interest loan for the District and would provide for the District to continue paying its regular PG&E bill amounts with the energy savings cost reduction being applied to pay down the balance of the loan until the loan is fully paid. The scope of this project was reviewed with the Operations and Water Quality Committee on May 17, 2021. Board authorization to participate in this program will assist the District in achieving its Strategic Plan Goal 1.1- Efficiently Manage and Maintain Our Infrastructure to Ensure Reliability.

of 41


The Board approved a similar LED lighting replacement project at their October 2018 meeting. That project included assessing lighting retrofits at five District sites: 1) District Headquarters Office; 2) Mission San Jose Water Treatment Plant; 3) Water Treatment Plant No. 2; 4) Newark Desalination Facility; and 5) Peralta-Tyson Blending Facility. The project also included utilizing a PG&E program called On-Bill Financing (OBF). However, the original project was never completed as the District terminated the agreement with the original contractor after several months of non-performance by the contractor.

Staff is recommending essentially the same project with the intent of reducing energy use, saving money on energy costs, and reducing environmental impact for the District. The scope is fundamentally the same but has been expanded slightly to include more control devices such as occupancy and motion controllers to further reduce energy use and increase savings.

The District intends to utilize a competitively bid cooperative agreement awarded by Sourcewell to .,.Wesco Energy Solutions (Wesco) for the LED lighting and improvements in accordance with Section L "Cooperative Purchasing Agreements" of the District's Procurement Policy. Wesco reviewed the details of the previous project and conducted site evaluations to confirm the scope. The pricing Wesco provided is consistent with the Sourcewell bid schedule of fees. Wesco's proposed cost for all five District sites is $288,092.

Independent of Wesco, PG&E offers a loan product known as On-Bill Financing (OBF). OBF is administered through PG&E and is a no-cost, no interest loan. With the OBF program, the District would continue to pay regular PG&E bills at the current rate. The savings from the energy reduction of the lighting retrofit would be applied toward to the balance of the loan until the loan is fully paid. It is estimated that it will take the District approximately three years to pay off the loan, at which point the District would own the upgrades to the lighting systems, and then benefit from the energy and billing savings. However, the OBF program has a maximum cap of $250,000. Staff is recommending utilizing the OBF program to finance the bulk of the project. Upfront costs for the District by utilizing the OBF program will be reduced to approximately $38,000.

Staff recommends entering into an agreement with Wesco Energy Solutions and entering into an agreement with PG&E for the OBF loan program.

A motion was made by Director Huang, seconded by Director Gunther to 1) authorize the General Manager to enter into an agreement with Wesco Energy Solutions in an amount not-to-exceed $317,000, which includes a 10% contingency, for the retrofit of the District's existing lighting systems; and 2) authorize the General Manager to enter into a loan agreement with Pacific Gas & Electric Company for the retrofit of the District's existing lighting systems.


AYES: NOES: ABSENT:


of 41


5.9* AUTHORIZATION OF PURCHASE ORDER FOR DISPOSAL OF MATERIALS TO NEWBY ISLAND LANDFILL

Funds are authorized each year for the disposal of trench excavation spoils_consisting primarily of rock, soil, asphalt, and concrete generated by District field crews. The District's Fiscal Year (FY) 2020/21 agreement with Newby Island Landfill in Milpitas will expire on June 30, 2021. Newby Island is currently the most cost-effective disposal site although staff continues to explore other disposal site alternatives. For FY 2021/22, Newby Island rates increased by 4% to a cost of $30.90 per ton plus an Environmental Fee of $18.00 per truck load. This cost is subject to change on an annual basis. The estimated cost of material disposal for FY 2020/21 is $250,000, a reduction of $25,000 from prior fiscal years due to the slight decrease in system leaks over the last three years and corresponding reduction in excavation spoils volume. Because Newby Island Landfill is the sole location for legal disposal within a reasonable distance of District facilities, this meets the requirements for a single source contract the Board can approve in accordance with Section I of the District's Procurement Policy. There are adequate funds in the FY 2021/22 budget for this expenditure. This item was reviewed with the Operations and Water Quality Committee on June 1, 2021. Board approval of a purchase order with Newby Island Landfill will help the District meet its Strategic Plan Goal 1.1 - Efficiently Manage and Maintain our Infrastructure to Ensure Reliability.

Since June 2013, the Newby Island Landfill has been the only cost-effective disposal site available to the District for excavation and trench spoils disposal. Staff has explored using other disposal sites including sites located on private property as well as structuring the disposal contract differently by combining transportation and disposal activities into one service. Staff will continue to investigate other disposal alternatives; however, hauling distances have precluded other disposal site alternatives from being cost effective. Because Newby Island Landfill is the sole location for legal disposal within a reasonable distance of District facilities, this meets the requirements for a single source contract the Board can approve in accordance with Section I of the District's Procurement Policy. The Newby Island Landfill disposal site supports District efforts to continue new installations and the repair or replacement of water mains and service line leaks.

A motion was made by Director Huang, seconded by Director Gunther to authorize the General Manager to approve a purchase order to Newby Island Landfill for an amount not-to-exceed $250,000.


AYES: NOES: ABSENT:


of 41


5.10 AUTHORIZATION OF CHANGE ORDER FOR THE RUBBER DAM NO. 1/ALAMEDA COUNTY DROP STRUCTURE FISHWAY, RUBBER DAM NO. 1 CONTROL BUILDING MODIFICATIONS, AND SHINN POND FISH SCREENS CONSTRUCTION

The Rubber Dam No. 1/Alameda County Drop Structure Fishway (RDl/DS Fishway), Rubber Dam No. 1 (RDl) Control Build Modifications and Shinn Pond Fish Screens (Shinn Screens) (collectively, the "Project") are components of the Lower Alameda Creek Fish Passage Improvements intended to enhance steelhead migration through Lower Alameda Creek while sustaining the long-term reliability of the District's groundwater recharge operations. The Project includes construction of a new fishway, a new Shinn Pond Fish Screens facility to replace existing unscreened diversions, dam foundation modifications, and upgrades to the existing RDl control building and mechanical and control equipment. Change Order No. 9 has been prepared to address additional work related to changes to structural components and equipment for the RDl/DS Fishway. There is adequate funding in the current fiscal year capital budget for this expenditure, and the Project is partially funded by the Alameda County Flood Control and Water Conservation District as well as numerous grants. Board authorization of this contract change order will help meet the District's Strategic Plan Goal 2.1 - Maintain and Enhance Sustainability and Reliability of Local and Regional Water Supplies.

On January 10, 2019, the Board awarded a construction contract in the amount of $36,757,000 to Flatiron West, Inc. (Flatiron) for construction of the RDl/DS Fishway Project. Flatiron began work in the flood control channel on May 15, 2019, and construction is progressing on schedule to be completed this calendar year.

Change Order Nos. 1 through 8 totaling $733,704.09 were previously authorized to address multiple necessary changes including structural and other design changes, additional dewatering of excavated areas and winterization of dewatering wells, changes to backfill materials and mechanical equipment, demolition of unexpected buried concrete structures, addition of site safety features, changes to the RDl Control Building electrical system, costs for additional insurance required by permitting agencies, relocation of a construction laydown area, as well as credit to the District for expediting procurement of materials, amendments to resource agency permitting, and the Contractor's provision of a letter of credit as security in lieu of retention.

Change Order No. 9 in the amount of $134,155.21 has been prepared for 1) design and installation of additional soil tie-backs, 2) design and modification of jet-grouted columns including additional concrete coring, 3) additional steel reinforcing and modified concrete mix design needed to meet design requirements identified during the submittal phase, and 4) incremental cost to substitute the required davit crane due to the unavailability of the specified crane. Staff has evaluated the costs associated with this work and has determined that they are fair and reasonable.

A motion was made by Director Se thy, seconded by Director Gunther to approve Change Order No. 9 in the amount of $134,155.21 to Flatiron West, Inc., for the Rubber Dam No. 1/Alameda County Drop Structure Fishway, RDl Control Build Modifications and Shinn Pond Fish Screens Construction Project, Job 21006, 21012, and 21019.

of 41



AYES: NOES: ABSENT: ABSTAIN:

Directors Gunther, Huang, Sethy, and Akbari None None Director Weed

5.11 AUTHORIZATION OF CONTRACT CHANGE ORDER FOR ADDITIONAL PAVING ON BEHALF OF THE CITY OF UNION CITY FOR THE ALVARADO NILES PIPELINE SEISMIC IMPROVEMENT PROJECT AND EXECUTION OF AN AGREEMENT WITH THE CITY FOR THE REIMBURSEMENT OF COSTS

Director Gunther stated that he holds an interest in a property in proximity to the project and recused himself, as required by law, from any participation in or discussion of Item 5.11. Director Gunther left the meeting at 6:34 P.M.

The Alvarado-Niles Pipeline Seismic Improvement Project (Project) is nearing completion and the City of Union City (City) has requested that the final paving work be expanded to include repaving of the entire widths of affected streets, including special paving and decorative pavement stamping of crosswalks in accordance with current City standards. Including such additional paving work into the Project would assist the City in meeting its paving rehabilitation goals while minimizing impacts to traffic and the surrounding areas by reducing street closures and mobilization impacts and would improve the aesthetics of crosswalks along the Project alignment by repaving, coloring, and restamping the entire crosswalks as opposed to only those portions affected by the Project. The City would reimburse the District for 100% of the associated costs for services, materials, and equipment for the additional paving work required to repave entire streets and for decorative stamping of crosswalks, and 50% of the cost of recoloring the crosswalks impacted by the Project. The Project, which is part of the District's Main Renewal and Seismic Upgrades Program, was most recently reviewed with the Engineering and Information Technology Committee on November 18, 2020. This Project will help meet the District's Strategic Plan Goal 1.1-Efficiently Manage and Maintain our Infrastructure to Ensure Reliability.

The Project consists of the replacement of approximately 3.5 miles of 14-inch to 18-inch diameter asbestos cement and steel pipe and replacement of all water service laterals, valves, and interconnections with other pipelines and branch connections along the Alvarado-Niles Road corridor in Union City. The work is being implemented in two phases to accommodate long lead times and required permitting. Phase 1 includes the installation of approximately 1.7 miles of 14-inch and 16-inch diameter seismically-designed welded steel pipe and all appurtenances within Smith Street and Alvarado-Niles Road, between Union City Boulevard and Santa Maria Drive, and within Alvarado-Niles Road, between Almaden Boulevard and Central Avenue. The Board awarded the Phase 1 construction contract in the amount of $11,316,775 to Garney Pacific Inc. (Garney), in February 2020, and construction commenced in May 2020. Construction is nearing completion.

As part of the existing Project construction contract with the District, Garney will be repaving those portions of Smith Street in Union City between the Union Pacific Railroad tracks and Union City Boulevard following installation of the pipeline. The paving work included in the contract

of 41


includes grinding and pavement overlay of the portions of the street paving impacted by Project construction (e.g., trench excavation areas), but does not include complete pavement replacement across the entire street. Garney will also restore City crosswalks to match the existing paving coloring and decorative pavement stamping along the areas excavated for pipeline installation.

Due to the condition of the existing pavement along Smith Street, the City is planning a pavement restoration project to repave the entire street width. Recently, the City requested the District to have Garney perform the additional paving work required to completely replace the existing pavement in this area on the City's behalf. This would result in additional grinding and asphalt overlay which would improve the condition of the existing roadway, including areas outside the District's restoration limits associated with Project work. The City requested that Garney pave the entire width of the street as opposed to only the excavation areas impacted by the Project. The City also requested that the entirety of existing crosswalks along the Project alignment along Smith Street and Alvarado-Niles Boulevard be recolored and re-stamped as necessary so that the aesthetics of all such crosswalks would be improved.

Following discussions between District and City staff, the City has agreed to reimburse the District for 100% of the cost of services, materials, and equipment for the additional work to grind and repave the entire width of Smith Street. The City also agreed to reimburse the District for 50% of the cost to recolor and restore the aesthetics of the crosswalks impacted by the Project. The total cost of the work to be reimbursed by the City is estimated at $311,762.04. Staff proposed, and the City accepted, the addition of a 40% contingency to this estimated amount to ensure adequate funding is committed by the City to cover any unexpected changes in scope. Therefore, the total potential reimbursement amount, including the 40% contingency, is $436,466.86. The District's share of costs associated with the crosswalk restoration work included in this change order is $56,736.75. Therefore, the total value of the change order is $493,203.61. The additional work would also require a contract extension of seven calendar days, and the costs associated with this extension are included in the City's reimbursement amount. Staff recommends that the Board authorize the General Manager to execute the change order and to execute an agreement with the City to provide for the reimbursement of costs as described above.

Director Sethy requested a more detailed project update at a future Engineering & Information Technology committee meeting.

A motion was made by Director Sethy, seconded by Director Weed to authorize the General Manager to 1) execute Change Order No. 5 in an amount not to exceed $493,203.61 which includes a time extension not to exceed seven days to Garney Pacific Inc. for crosswalk improvements and additional pavement work to be reimbursed by the City of Union City for the Alvarado-Niles Pipeline Seismic Improvement Project Job 21192, and 2) execute an agreement with the City of Union City for reimbursement of costs associated with this change order.


AYES: NOES: ABSENT:

Directors Weed, Huang, Sethy, and Akbari None Director Gunther

of 41


Director Gunther returned to the meeting at 6:39 P.M.

5.12* RESOLUTION HONORING THERESE C. WOODING UPON HER RETIREMENT FROM DISTRICT SERVICE

Therese C. Wooding will be retiring after more than 21 years of service with the District, and her last day in the office will be June 11, 2021.

Therese began her service with the District on January 24, 2000, as an Engineer I in the Project Engineering Division of the Engineering Department. Therese was promoted to an Engineer II on March 18, 2002, and to her current position of Engineer III on June 18, 2017. Prior to joining the District, Therese amassed over 10 years of experience as a civil engineer designing water and wastewater treatment projects for Parsons Engineering-Science, Inc., a private engineering consulting firm.

As Project Manager, Therese successfully led a wide range of planning, design, and construction projects throughout the District such as the Distribution System Seismic Improvement Program, Headquarters Facility Expansion and Upgrades - New Water Quality Laboratory Project, Avalon Tank Slope Stability Improvements Project, Warren Avenue 20-inch Pipeline Relocation Project, Mission San Jose Water Treatment Plant Access Road Erosion Mitigation Project, Canyon Heights Tank Access Road Improvements Project, the Warren A venue Regulator Station 2000 Modifications, and the Rubber Dam No. 1/Alameda County Drop Structure Fishway, Rubber Dam No. 1 Control Building Modifications and Shinn Pond Fish Screens Project.

Throughout her career at the District, Therese applied her knowledge of engineering and environmental permitting and CEQA to carry out her projects and to support other projects including the Alameda Reservoir Water Quality Enhancements Project, Rubber Dam No. 1 Fabric Replacement Project, and Kaiser Pond Fish Screen Project. Therese has served as a resource to Project Engineering staff as well as many others throughout the District. She has also played an important role in the District's successful grant funding program by collaborating with the District's grant funding team, writing, and providing input to numerous grant applications resulting in significant grant funding being awarded to the District. Therese's many contributions will benefit the District and its customers for many years to come.

Therese consistently performed her duties with a high level of competence, professionalism, integrity, and dedication; she will be greatly missed by her many friends and colleagues at the District.

A motion was made by Director Huang, seconded by Director Gunther to adopt a resolution honoring Therese C. Wooding, and expressing appreciation for her 21 years of dedicated service with the District.


OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT HONORING THERESE C. WOODING UPON HER RETIREMENT FROM DISTRICT SERVICE

of 41



AYES: NOES: ABSENT:

Di.rectors Weed, Gunther, Huang, Sethy, and Akbari None None

5.13* RESOLUTION APPROVING AN UPDATED STATEMENT OF INVESTMENT POLICY

The investment of public funds is governed by Section 53600 of the California Government Code which specifies the types of investments permitted, the maximum maturity for those investments, and identifies investment objectives as well as reporting requirements. The Board of Directors last approved the District1s Statement of Investment Policy on January 9, 2020. Staff and Chandler Asset Management, the District's investment portfolio manager, recently completed the annual review of the investment policy and recommend updates to align the policy with recent changes in the California Government Code as a result of Senate Bill 998 which was enacted on January 1, 2021. Proposed revisions were reviewed with the Finance Committee on May 18, 2021. Approval of this item will help the District achieve its Strategic Plan Goal 3 - Improve the District's Financial Stability and Transparency.

Staff annually reviews the District's Statement of Investment Policy and recommends changes for conformity with the California's Government Code (Code) and to further the District's stated investment objectives. The last time changes to the Statement of Investment Policy were adopted was on January 9, 2020 by Board resolution No. 20-004, which remain in effect. On January 1, 2021, Senate Bill 998 (SB 998) was enacted which expanded certain sections of the code to provide additional investment opportunities for local agencies. During the annual review, Chandler Asset Management and staff reviewed SB 998 and other policy adjustments allowed by code, and recommend the following modifications to the existing investment policy:

1. Increase the maximum investment allocation allowable for commercial paper from 25% to 40% if the District's assets under management are greater than $100,000,000. This change aligns the District's policy with SB 998 and this provision is scheduled to expire on January 1, 2026.

2. Authorize investments in securities issued or backed by the U.S. Government that could result in a zero or negative interest accrual if held to maturity. This change aligns the District's policy with SB 998 and this provision is scheduled to expire on January 1, 2026.

3. Increase the percentage allowed for federal agency or United States government-sponsored enterprise (GSE) obligations from 25% to 30%.

4. Increase the percentage allowed to be invested in United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank, also known as supranational securities, from 5% to 10% per single issuer.

of 41


In addition, minor modifications were recommended to align the investment policy's language with recent changes in the California Government Code.

The Finance Committee reviewed the recommended changes in detail on May 18, 2021. In accordance with the provisions of the California Government Code, Board approval is required to update the investment policy.

A motion was made by Director Huang, seconded by Director Gunther to adopt a resolution approving the updated Statement of Investment Policy.


OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT APPROVING STATEMENT OF INVESTMENT POLICY


AYES: NOES: ABSENT:


5.14* RESOLUTION APPROVING AN UPDATED STATEMENT OF RESERVE FUND POLICY

The District maintains several reserve funds to ensure that sufficient resources are available to meet operating expenses, capital expenditures, debt service obligations, and address unanticipated events. As part of the District's commitment to fiscal responsibility and prudent financial planning, the Statement of Reserve Fund Policy is reviewed annually in conjunction with adoption of either the District's two-year budget or mid-cycle budget update. This item was reviewed with the Finance Committee on May 18, 2021. Approval of the policy and the proposed updates will help meet Strategic Plan Goal 3 - Improve the District's Financial Stability and Transparency.

The District's Statement of Reserve Fund Policy was last updated on June 11, 2020 by Board Resolution No. 20-040. Staff is proposing the following updates to the Reserve Policy:

• Remove the Debt Service Reserve from the Reserve Policy. With the payoff of the District's 2009 revenue bonds, it is no longer required to maintain a balance in the Debt Service Reserve and the funds in this restricted reserve were released in June 2020.

• Add the Capital Project Sinking Fund to the Reserve Policy. Due to the timing of capital projects and the desire to fund the majority of capital projects on a pay-go basis, the Capital Projects Sinking Fund is utilized to account for resources specifically designated for future capital projects. The annual Capital Improvement Program appropriations are drawn from this reserve fund as needed. The Capital Projects Sinking Fund has an established target equal to the difference between the current General Fund balance and lowest ending balance within the next five years as presented in the Financial Planning Model. Any General Fund balances that are either short or in excess of the Capital Projects Sinking Fund target will be accounted for in the Rate Stabilization Reserve. Development of this specific reserve fund is the result of

of 41


discussions with the Finance Committee over the past year about the need to recognize that much of the District's reserves above the cunent policy target are dedicated to paying for future capital projects.

o Update the Capital Reserve to include that the funding in the Capital Reserve will be revised annually based on the prior year's depreciation and will be adjusted to account for unanticipated timing issues that may affect the reserve balance.

o Update the Rate Stabilization Reserve to include that any General Fund balances that are either short or more than the Capital Projects Sinking Fund target will be accounted for in the Rate Stabilization Reserve.

No changes are proposed to the Facilities Improvement Fund Reserve, Installer's Reimbursement Fund Reserve, Management Retirement Bonus Reserve, Operations and Maintenance (O&M) Reserve, or Emergency Reserve.

A motion was made by Director Huang, seconded by Director Gunther to adopt a resolution approving an updated Statement of Reserve Fund Policy.


OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT APPROVING AN UPDATED STATEMENT OF RESERVE FUND POLICY


AYES: NOES: ABSENT:


5.15* AUTHORIZATION TO ENTER INTO PARTICIPATION AGREEMENTS WITH THE BAY AREA WATER SUPPLY AND CONSERVATION AGENCY FOR FY 2021/22 WATER USE EFFICIENCY PROGRAMS AND RELATED SERVICES AND ADOPT A RESOLUTION AMENDING THE RATE AND FEE SCHEDULE

The District routinely participates in water use efficiency programs administered by the Bay Area Water Supply and Conservation Agency (BA WSCA) under annually renewed, program-specific participation agreements. In doing so, the District leverages BA WSCA staff resources and benefits from economy of scale pricing to better achieve cost-effective water use efficiency goals. Each fiscal year the District must determine which BAWSCA programs and services to renew, add, or end. For FY 2021/22, the District proposes to renew participation agreements for the Rain Barrel Rebate, Regional Smart Controller, and Large Landscape programs, as well as add participation agreements for the Irrigation Hardware Rebate and Water Loss Management programs. No programs or services are proposed to end. Funds for the programs are proposed for inclusion in the FY 2021/22 budget as presented at the May 19, 2021, Board Workshop. Rebates and incentives for current programs are adopted in the District's Rate and Fee Schedule, and Irrigation Hardware Rebates will be added through resolution. All the proposed programs are in alignment with Strategy B of the District's Water Efficiency Master Plan (WEMP). This item was reviewed with the Water Resources and Conservation Committee on May 26, 2021. This action will help meet

of 41


the District's Strategic Plan Goal 2.1 - Maintain and Enhance Sustainability and Reliability of Local and Regional Water Supplies.

Staff has reviewed all water use efficiency programs that BA WSCA is offering in FY 2021/22. Staff recommends renewing the following programs:

• Rain Barrel Rebate Program - This program provides customers rebates for the installation of rain barrels to collect and re-use rainwater from gutters and downspouts for lawns and gardens. The District offers a $50 per rain barrel rebate (up to 2 rebates per household) for rain barrels that are 50 gallons or more. The proposed FY 2021/22 Budget includes up to $1,000 for up to 50 rain barrel rebates. District participation in this program began in 2015.

• Regional Smart Controller Program - This program provides residential customers an incentive toward the purchase of a smart irrigation controller manufactured by Rachio Inc. that uses local or onsite weather information to determine the irrigation schedule. The District offers a $75 instant incentive towards the purchase of a Rachio Inc. smart controller. The proposed FY 2021/22 Budget includes up to $15,000 for up to 180 smart controller incentives. District participation in this program began in April of 2020.

• Large Landscape Program - This program provides an online landscape water use budget tool for large landscape customers with dedicated landscape meters through Waterfluence to improve landscape water use efficiency. Through this program, large landscape customers that are consistently over budget may be eligible to receive a landscape water audit performed by a Waterfluence certified landscape auditor. In FY 2021/22 additional features will be launched by Waterfluence. These features are aligned with proposed reporting requirements for new State water use objectives and will be available to the District at no additional cost. The proposed FY 2021/22 Budget includes $72,500 for approximately 900 online water budgets and 15 landscape water audits. District participation in this program began in May of 2020 as a pilot program, with full program participation beginning in August of 2020.

Staff recommends adding the following programs and services:

• Irrigation Hardware Rebate Program - This program provides customers a rebate for the purchase and installation of efficient irrigation equipment to reduce outdoor water use. The program would offer District customers a rebate of up to $5 for high-efficiency sprinkler nozzles, up to $10 for spray bodies with pressure regulation, and up to $30 for large rotors. Customers requesting over $1,000 in rebate funds require pre-approval. This rebate program was identified in Strategy B of the Water Efficiency Master Plan (WEMP) to begin in FY 2021/22. The proposed FY 2021/22 Budget includes up to $30,000 for irrigation hardware rebates. District participation in this program will begin July 2021.

• Water Loss Management Program -This program supports agencies in their efforts to reduce water losses to an economically optimized level and comply with water loss requirements implemented by the State of California, including support of annual Water Loss Audit reporting, which must be submitted to the State by October 1 of each year. The cost for data and validation services is not to exceed $20,000. The proposed FY 2021/22 Budget includes funds for water loss management and compliance programming. District participation in the program will begin July 2021.

of 41


By participating in these BA WSCA programs and services, the District is relieved of many of the administrative tasks required to implement water use efficiency measures like these in-house. The District's participation also allows consistency of regional water use efficiency programs and enhances local partnerships.

A motion was made by Director Huang, seconded by Director Gunther to 1) authorize the General Manager to enter into participation agreements with the Bay Area Water Supply and Conservation Agency for the FY 2021/22 Rain Barrel Rebate, Regional Smart Controller, Large Landscape, Irrigation Hardware Rebate, and Water Loss Management programs; and 2) adopt a resolution amending the Rate and Fee Schedule to include Irrigation Hardware Rebates.


OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT AMENDING THE RATE AND FEE SCHEDULE REGARDING THE WATER CONSERVATION REBATES AND INCENTIVES


AYES: NOES: ABSENT:


5.16 AUTHORIZATION TO INCREASE THE WATER-EFFICIENT LANDSCAPE REBATE AMOUNT FOR DROUGHT RESPONSE AND ADOPT A RESOLUTION AMENDING THE RATE AND FEE SCHEDULE

The District's Water-Efficient Landscape (WEL) Rebate measure currently offers $1 per square foot to all District customers that remove turf and replace it with a water-efficient landscape. This measure has an established annual customer participation target in the District's Water Efficiency Master Plan (WEMP). As part of the District's drought response actions, staff recommends the District increase its WEL rebate amount from $1 to $2 per square foot, to be effective upon Board approval. This year's water conservation campaign strategy is to leverage public awareness around the drought and climate change to increase measure adoption over planned targets and accelerate market transformation. An increased WEL rebate amount will further this strategy and is also consistent with previous State drought actions and current regional drought response. There is sufficient funding in the proposed FY 2021/22 budget, as presented at the May 19, 2021, Board Workshop, to support this measure as well as existing grant funding available to cover 50 cents of the rebate amount. The WEL Rebate measure update was reviewed with the Water Resources and Conservation Committee on May 26, 2021. Board authorization to increase the rebate and amend the District's Rate and Fee Schedule will help meet the District's Strategic Plan Goal 2.1 Maintain and Enhance Sustainability and Reliability of Local and Regional Water Supplies.

Water Year (WY) 2020-2021 has been one of the driest in State history, following a dry WY 2019-2020, and it remains highly likely that Calendar Year (CY) 2022 will also be a challenging year for water supply. As a result of these conditions, the District launched the "One Saves Water"

of 41


water conservation campaign in May asking customers to take additional steps to conserve water this year to better prepare the District for a third dry year. Additional conservation recommendations include replacing lawn with water-efficient landscapes.

Projects that convert lawn into water-efficient landscapes can achieve significant water savings, drive positive attitudes toward these landscapes, and accelerate market transformation; however, they can be expensive to implement. A higher rebate this year will encourage and enable more customers to adopt this water saving measure.

Water-efficient landscape transformations are regionally popular with other local agencies planning to increase their rebates to $2 or more per square foot this year. This measure is costeffective for the District under strategy B in the WEMP at $1 per square foot and anticipated additional State funding would keep it cost-effective at $2 per square foot. Along with the increase from $1 to $2 per square foot, staff is recommending the maximum WEL rebate amount for single family residential customers be increased from $1,500 to $3,000 to encourage participation.

Staff anticipates that a higher rebate, along with additional outreach and State activity, will result in more demand for the WEL measure, other District water use efficiency measures, and customer support for addressing conservation inquiries and water waste reports. Existing water use efficiency resources are not adequate to support this increase, and additional funding is proposed for inclusion in the FY 2021/22 budget as presented at the May 19, 2021, Board Workshop to support the higher rebate amount as well as additional temporary staffing needs.

By increasing the rebate for this measure, the District will be in a better position later this year and next year with more converted landscapes if the dry year conditions persist.

Director Sethy requested that staff review the planned public outreach to make the public aware of the program and was supportive of increasing the authorized turf replacement budget if needed.

Discussion ensued and staff responded to inquiries from the Board.

A motion was made by Director Gunther, seconded by Director Huang to 1) authorize an increase to the Water Efficient Landscape Rebate amount from $1 to $2 per square foot for all customers, with a maximum rebate amount of $3,000 for single family residential customers; and 2) adopt a resolution amending the Rate and Fee Schedule to update the Water Efficient Landscape Rebates.


OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT AMENDING THE RATE AND FEE SCHEDULE REGARDING THE WATER CONSERVATION REBATES AND INCENTIVES

of 41



AYES: NOES: ABSENT:


5.17 AUTHORIZATION OF CHANGE ORDER FOR THE ADVANCED METERING INFRASTRUCTURE PROJECT FOR CUSTOMER SERVICE LINE INVENTORY

Mr. Stevenson reported that the Advanced Metering Infrastructure (AMI) Project (Project) will implement AMI technology throughout the District's service area; the Board previously awarded a contract to furnish and deploy an AMI system to Badger Meter, Inc. (Badger). The Project includes upgrading all water meters throughout the District's service area. Because every water meter in the District is included in this project, there is an opportunity to conduct any other needed work involving all District water meters and water services within the Project.

The United States Environmental Protection Agency's (USEPA's) proposed Revised Lead and Copper Rule (LCR) would require that an inventory of the material types of all customer-side service lines be developed by water providers so that customers can be notified of the presence of any leaded materials on the customer's side of the service line and so that the water agency can implement procedures to minimize the risk of lead exposure to customers should leaded materials be present. Utilizing the AMI meter installation contractor to identify the service line material, collect, input, and transfer the data into a District database will allow for the development of this inventory in the most cost effective and efficient manner. There is adequate funding in the proposed two-year budget for this expenditure. This item was reviewed with the Operations and Water Quality Committee on May 17, 2021. Implementation of this change would help meet the District's Strategic Plan Goal 1.2 - Continue to Meet Water Quality Standards 100% of the Time.

The Board previously awarded a contract to Badger in the amount of $32,974,157.26 for the deployment of AMI throughout the District's service area. Change Order No. 1 in the amount of $3,031,208.29 was authorized by the Board on July 9, 2020, to change 65,369 meters to be procured under the contract from positive displacement type to A WW A C715 ultrasonic meters. Two additional no-cost change orders were previously authorized by the General Manager to clarify bonding requirements through the warrantee maintenance period and to substitute Badger's installation subcontractor to Professional Meters, Inc. (PMI) who will be installing AMI meters, endpoints, and related appurtenances in the field.

In January 2021, the USEPA published proposed revisions to the LCR regulations requiring public water systems to create and maintain a Service Line Inventory (SLI) identifying the service line material type for the portion of the water service line owned by the water system, and the portion of the service line owned by the customer. Though the revised LCR is under review, the requirements regarding service line material inventories are expected to remain unchanged.

The District recently completed an inventory of service line materials for the District's own service lines in accordance with California Senate Bills 1398 and 427. This inventory was completed with significant staff effort and cost but only included reviewing District records, databases, and material standards, thereby minimizing costly and time-consuming field identification work. The

of 41


same approach cannot be used in the development of the customer-side SLI because the District does not maintain or have access to such records for the private, customer-side plumbing. The implementation of the AMI Project will require all existing meters to be upgraded. As part of those upgrades under the current AMI contract, the contractor is required to physically visit each meter, record installation data, and provide a method for the storage and transfer of field data collected. This work is like the work required to develop the SLI. The additional work required to field verify the customer's service line material type, collect the identification data, and store and transfer the data as part of the AMI installation project is lower than other alternatives evaluated, even when limiting field verification to those properties developed before plumbing code changes prohibited the use of leaded materials in such plumbing.

Staff recommends including such field verification and data collection and transfer work into the AMI project at the negotiated cost of $5.75 per meter location, or a total cost of $494,500. Change Order No. 4 has been prepared to include this work into the AMI project contract to take advantage of the processes, efficiencies, and mobilization that are already a part of the Project without adding any significant delays.

Discussion ensued and staff responded from inquiries from the Board.

A motion was made by Director Gunther, seconded by Director Huang to approve Change Order No. 4 in the amount of $494,500 to Badger Meter, Inc. for the Advanced Metering Infrastructure Project, Job 21231.


AYES: NOES: ABSENT:


5.18 RESOLUTION ADOPTING THE FY 2021/22 AND FY 2022/23 BUDGET AND THE 25-YEAR CAPITAL IMPROVEMENT PROGRAM

Mr. Wunderlich reported that the Board of Directors reviewed the FY 2021/22 and FY 2022/23 Budget and the 25-Year Capital Improvement Program (CIP) at the May 19, 2021, and May 27, 2021, Board Budget Workshops. Staff responded to questions from the Board and incorporated Board guidance in the proposed budget. The preliminary proposed budget was reviewed at the April 20, 2021 Finance Committee. Review and adoption of the proposed FY 2021/22 and FY 2022/23 Budget and the 25-year CIP will help meet the District's Strategic Plan Goals 3.2-Ensure Cost Reasonableness and 3.3 - Promote Financial Transparency.

Mr. Oam provided a staff presentation. As part of the District's two-year budget process, staff reviewed the proposed FY 2021/22 and FY 2022/23 Budget and 25-year Capital Improvement Program with the Finance Committee on April 20, 2021, and with the Board of Directors at the May 19, 2021 and May 27, 2021 budget workshops. At the budget workshops, the Board received staff presentations, public comments, deliberated on the budget, and provided guidance to staff.

of 41


The total proposed budget for FY 2021/22 and FY 2022/23 is as follows:

Revenues Expenses

Net of Revenues & Expenses

FY 2021/22 $154,068,000 $162,931,000 ($8,862,000)

FY 2022/23 $153,676,000 $162,665,000 ($8,989,000)

The proposed budget for FY 2021/22 and FY 2022/23 includes total revenue of $154.1 million and $153.7 million, respectively, and total expenditures of $162.9 million and $162.7 million, respectively. For the respective fiscal years this includes $109.4 million and $112.8 million for operating expenses, and $43.7 million and $38.9 million for capital expenditures; and $5.5 million and $6.5 million for debt service costs.

The proposed FY 2021/22 and FY 2022/23 budget includes the following changes after the Board budget workshop discussions:

o Revenues: Added to the FY 2020/21 estimated actual results to include the remaining $1 million grant from Oliver de Silva for the Alameda Creek fish passage projects.

o Operations and Maintenance Expenses: 1) added $305,000 in FY 2021/22 for water conservation program changes due to the current dry conditions; 2) reduced total chemical costs by $16,000 in FY 2021/22 and $42,000 in FY 2022/23, to reflect updated pricing; and 3) based on the latest modeling added $4 million in water purchase costs for additional water from the State Water Project, San Francisco Water (SFPUC), and the Semitropic Water Bank - $0.3 million in FY 2020/21, $1.6 million in FY 2021/22, and $2.1 million in FY 2022/23.

o Personnel: 1) added Special Assistant to the General Manager starting in FY 2021/22; 2) added Information Security Officer starting in FY 2022/23; and 3) added Water Operations Analyst starting in FY 2022/23 - annual salary costs of $187,000 and $473,000 for FY 2021/22 and FY 2022/23, respectively.

The proposed FY 2021/22 and FY 2022/23 budget reflects several key assumptions and prior Board guidance:

o Projected billed demands based on updated trends and consistent with budgeted water purchase volumes - 35.5 million gallons per day (MGD) and 36.3 MGD for FY 2021/22 and FY 2022/23, respective! y.

o Addressed the unfunded liabilities for pension and other post-employment benefits (OPEB) based on the updated actuarial valuation to achieve full funding by June 30, 2032 - $13.8 million total payments toward unfunded liabilities.

o SFPUC delayed wholesale water rate increase for another year 0% increase for FY 2021/22 and 5.4% increase for FY 2022/23.

o Included the following personnel changes: 1) added two Engineers to support the CIP; 2) added one Customer Service Representative (defined-term) to support the Advanced Metering Infrastructure (AMI) Program; 3) added one Operations Systems Position to support operations; 4) reclassed an Engineer position to a Construction Inspector position; 5) continued

of 41


existing defined-term positions; and 6) additional staffing added since the workshops as previously described. The proposed changes (a total of seven new positions) will increase the District's total authorized positions to 243 FTEs.

• Continued evaluation of initiatives to ensure water supply reliability with participation in the Delta Conveyance Project, Los Vaqueros Reservoir Expansion Project, and Joint Purified Water Feasibility Evaluation.

• Continued prudent investments in main renewals, replacements, and seismic improvements to enhance water system reliability and other critical infrastructure investments including the Alameda Creek fish passage projects, AMI, as well as Clean Energy Program implementation.

• Included $19.5 million loan proceeds from the State Revolving Fund (SRF) to help fund the AMI Program and to help maintain adequate reserves.

• Assumed water rate increases of 3.0% effective March 1, 2022 and 3.0% effective March 1, 2023.

The 25-year CIP is the District's planning tool for implementing capital projects identified in the Integrated Resources Plan (IRP) and Engineering Reports, as well as other capital projects and expenditures needed to meet regulatory requirements, District operational criteria, and major infrastructure maintenance and reliability improvements, such as seismic, safety and security upgrades. The proposed 25-Year CIP identifies capital expenditures totaling $1.4 billion through FY 2045/46.

The overall impact of the proposed revenues, expenses, CIP, and debt service result in a net impact on reserves of -$8.9 million and -$9.0 million for FY 2021/22 and FY 2022/23, respectively. The projected ending cash balance for FY 2021/22 is $190.8 million (General Fund: $126.0 million including $9.8 million in State Revolving Fund Loan Proceeds; Facilities Improvement Fund: $64.8 million); and the projected ending cash balance for FY 2022/23 is $191.5 million (General Fund: $128.2 million including $9.8 million in State Revolving Fund Loan Proceeds; Facilities Improvement Fund: $63.3 million). The projected General Fund ending balances meet or exceed the target levels established in the District's Statement of Reserve Fund Policy over the two-year budget cycle and is expected to stay within reserve targets in future years. The proposed budget will also continue to meet the District's policy of maintaining a debt service coverage ratio of 2.0 or greater, which exceeds the debt covenant obligation of 1.25.

Mr. Ken Nishimura, a resident of Fremont, inquired about labor costs.

Mr. Kelly Abreu, a resident of Fremont, commented on the District's budget process.

Staff responded to inquiries from the Board and the public. Further discussion ensued.

A motion was made by Director Sethy, seconded by Director Gunther to adopt a resolution approving the FY 2021/22 and FY 2022/23 Budget and the 25-Year Capital Improvement Program.

of 41



OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT ADOPTING THE FY 2021/22 AND FY 2022/23 BUDGET AND THE 25-YEAR CAPITAL IMPROVEMENT PROGRAM


AYES: NOES: ABSENT:


5.19 AUTHORIZATION TO ENTER INTO AGREEMENT FOR THE LEASING OF LIGHT DUTY VEHICLES

Mr. D. Stevenson reported that the District utilizes vehicles for staff use to conduct District business and perform necessary work. The District fleet is comprised of some 225-rolling stock, 82 of which are classified as light duty. Staff received a proposal from Enterprise Fleet Management (Enterprise) to lease light duty vehicles as opposed to buying and owning them as the District has been doing. Of the 82 light duty vehicles, staff has determined that 62 should be considered for the Enterprise lease program. By leasing the identified 62 vehicles, the District will save approximately $76,000 annually. The lease program also provides that vehicles will be replaced within a five-year term as opposed to the current 15-year life cycling of these vehicles. The scope of this program was reviewed with the Operations and Water Quality Committee on June 1, 2021. Board authorization to participate in this program will assist the District in achieving its Strategic Plan Goal 1.1 - Efficiently Manage and Maintain Our Infrastructure to Ensure Reliability.

The District currently purchases and owns all fleet vehicles. The vehicles are retained for 15 years or 150,000 miles; whichever occurs first. The District requested a proposal from Enterprise to lease light duty vehicles as opposed to owning them. Staff evaluated the Enterprise lease program proposal and determined that the District could save approximately $76,000 annually by leasing 62 light duty vehicles identified as ideal for the program. Enterprise purchases vehicles through the same competitively bid cooperative agreement awarded by Sourcewell to National Auto Group for the purchase of vehicles in accordance with Section L "Cooperative Purchasing Agreements" of the District's Procurement Policy; however, Enterprise is able obtain lower pricing by leveraging volume discounting that the District does not qualify for.

The lease program also provides that vehicles will be replaced within a five-year term as opposed to the current 15-year life cycling of these vehicles. This provides a benefit to the District in that newer vehicles utilize more safety features; are generally more fuel efficient as fuel standards increase year over year; and require less maintenance and repairs resulting in reduced operating costs.

The Enterprise lease program provides further benefits by allowing the District to expand or contract the fleet as needed based on use cycles. For example, if staff determines that a vehicle is

of 41


not utilized per fleet minimum use guidelines, the vehicle can simply be returned to Enterprise and the District would no longer be charged for that vehicle. Similarly, the Enterprise program allows for fleet composition flexibility in that if a vehicle needs to be changed to accommodate a change in need, then Enterprise will switch the vehicle for something more suitable and meets District needs. This feature of the lease program will be helpful for the District to better manage the fleet and comply with California Air Resources Board (CARB) mandates for public entities to convert their current fossil fuel vehicles to electric and zero-emission vehicles.

The proposal is to transition the currently owned 62 vehicles to leased vehicles over a five-year period. The oldest vehicles, for example those over ten years old, would be replaced in the first year with subsequent vehicles being replaced in the following years. Once all 62 vehicles have been transitioned to the lease program, the annual cost of the lease program is estimated at approximately $400,000 which includes a 10% contingency to address additions to the fleet and vehicle selection. The District will continue to perform all maintenance on the leased vehicles. Enterprise will replace leased vehicles with new vehicles as appropriate to optimize resale value, typically within the first five years of use. The District receives the equity from vehicle sales minus a $400 fee to Enterprise. The District will have the ability to end a lease or purchase a vehicle at any time to meet its needs.

Discussion ensued and staff responded to inquiries from the Board.

A motion was made by Director Gunther, seconded by Director Huang to authorize the General Manager to enter into an agreement with Enterprise Fleet Management, Inc. for the leasing of light duty fleet vehicles for an annual cost not-to-exceed $400,000.


AYES: NOES: ABSENT:


5.20 AUTHORIZATION TO ENTER INTO AGREEMENT FOR DISTRIBUTION SYSTEM ON-CALL AND EMERGENCY REPAIR SERVICES

Mr. Arends reported that the distribution system repairs are performed daily by District staff. Outside services are sometimes needed when responding to large leaks or making complex repairs that require deep or complex excavation. If staff does not have the manpower or necessary equipment to perform the required work, the use of outside professional underground construction companies may be necessary. To prepare for and meet these needs, bids were solicited to secure contracts with underground construction companies to assure availability for on-call and emergency requests. The District received six bids from different underground construction companies, with Dun-Rite Excavating, Inc. and Garney Pacific, Inc., as the two companies with the lowest responsive bids. These two companies will provide services on a rotational basis when needed to assure water system reliability to our customers in accordance with their bid schedules. The District will pay for services only when requested by the District. Sufficient funding is included for this expense in the proposed budget and will be included in future budget proposals. The scope of this contract was reviewed with the Operations and Water Quality Committee on

of 41


June 1, 2021. Board authorization of this contract will assist the District in achieving its Strategic Plan Goal 1.1-Efficiently Manage and Maintain Our Infrastructure to Ensure Reliability and Goal 1.3 - Continuously Improve Emergency Preparedness and Response Capabilities.

The District performs water distribution system repairs daily including water mains, water service lines, and other distribution system appurtenances. With aging infrastructure, increased construction activity, and other utilities being installed near the District's water distribution system, emergency repairs requiring more complex and technical repair methods are being encountered that require specialized equipment and expertise. With over 900 miles of watermains to maintain in the service area, District water mains and appurtenances at times in proximity to other utilities that can make facilitating repairs complex and challenging due to depths, soil conditions, and the need for specialized equipment.

Other factors such as localized damage from an earthquake could result in multiple leaks and overwhelm our forces reinforcing the need for contracts with outside underground construction companies to be able to help with multiple anticipated repairs to complement our emergency response. To help address this need, the District solicited bids for two underground contractors in performing complex and technical repair tasks as well as to complement the District's emergency response capabilities. These On-Call Water Distribution Repair and Emergency Repair Service Contracts will assist the District in being able to meet these challenges and continue to provide our customers with continued customer service and decreased response time to water outages and restoring service as quickly as possible. An invitation for bids was issued on April 12, 2021. On May 4, 2021, the District received a total of six (6) bids. Staff evaluated the bids based on the bid schedules submitted and found Dun-Rite Excavating, Inc. and Garney Pacific, Inc. to be the lowest responsive and responsible bidders. Contracting with two firms is recommended to ensure availability. Authorized future work will be rotated between the two contractors.

A motion was made by Director Gunther, seconded by Director Huang to 1) authorize the General Manager to enter into agreements for on-call water distribution repair and emergency repair services with Dun-Rite Excavating, Inc. and Garney Pacific, Inc. for a two (2) year base term not to exceed $1,000,000 each, and 2) authorize the General Manager to exercise up to three (3) oneyear extensions, if services are satisfactory to the District, for a total contract term of five years and for a total not-to-exceed amount of $2,500,000 each.


AYES: NOES:


ABSENT: None

5.21 IMPLEMENTATION OF DISTRICT-WIDE 2021 CLASSIFICATION AND COMPENSATION STUDY FOR UNREPRESENTED MANAGEMENT/ CONFIDENTIAL/PROFESSIONAL STAFF

Ms. Solito reported that on February 13, 2020, following a competitive Request for Proposals process, the Board authorized an agreement with the consulting firm of Ralph Anderson and Associates to conduct a District-wide classification and compensation study. The purpose of a

of 41


Classification and Compensation study is to ensure that: 1) employees are allocated to appropriate job classifications based on the scope of work they are performing; 2) the District maintains accurate job descriptions that describe the current duties, responsibilities and requirements for employees; and, 3) the classification and compensation structure for the District is sustainable for current and future operational needs, as well as the economic environment in which the District operates.

An efficient and effective organization needs logically constructed job families that link and build positions upon each other, and in some cases, demonstrate career ladders within particular kinds of work. Additionally, the roles and responsibilities of employees, the skill sets, working conditions and environments change over time with technological and organizational advances.

In addition to aligning with human resources and industry best practices to periodically review job classification and compensation, the study also supports Strategic Plan Goal 4.2 - Maintain Employee Retention by Encouraging and Valuing Employee Work Efforts and Skills, as well as Goal 3.2 - Ensure Cost Reasonableness.

Costs of implementing the results of the study will be partially offset by health benefit program changes that also support Strategic Plan Goal 3.2 - Ensure Cost Reasonableness.

After Board authorization, Ralph Anderson and Associates conducted a complete classification and compensation study for the District. The study occurred in two phases, Phase 1 classification study, and Phase 2 - compensation study. Phase 1 of the study included a review of all District job classifications, both represented and unrepresented employees. All staff participated in providing information to the consultant about their classification and current position duties, including responding to questionnaires, and many staff participated in interviews with the consultant. The consultant incorporated this data, as well as input received from supervisors and managers, into general industry practices and standards and recommended updates to all District job classifications. The recommendations include the creation of several new job classifications, the elimination of certain classifications, consolidation of redundant positions and levels, and other changes to better align with industry practices.

Phase 2 of the study included a comprehensive review of current District compensation practices and a total compensation survey of comparable agencies. Phase 2 also included a review and update of the agencies the District compares to in a market survey and compared job classifications and compensation within the District as well. Utilizing this data, the consultant formed salary recommendations for all District classifications.

The complete reports for both the classification and the compensation study can be found online at: https://www.acwd.org/199/Employee-Benefits. The reports include a complete detail of study methodology, considerations of industry best practices and standards, complete compensation survey data, and final salary recommendations.

Overall, the District is currently at approximately the 78th percentile of the aggregate of all comparable compensation data collected. It is recommended that for the District to maintain its market position, and continue to attract and retain top talent, the District implement the

of 41

Minutes June 10, 2021

compensation study recommendations and set all classification salary ranges to the 75th percentile of the market (baseline). This results in some classifications that are currently under market having the compensation adjusted upwards to meet the 75th percentile market position. Other classifications will not require adjustments because the compensation is within 5% of the market and are not recommended for reduction. Classifications which are more than 5% above the market position are recommended to have base compensation adjusted down in order to meet the baseline.

To minimize negative impacts to current District employees, staff recommends that for classifications cmTently over the established baseline, incumbent employees' compensation will be maintained in that salary range at this time, with no salary range reduction. New staff hired after July 1, 2021 will be hired into the new adjusted salary ranges that match the baseline.

Staff further recommends that no standard "cost of living adjustment" (COLA) be provided this fiscal year. This is to preserve the District's interest in positioning itself at a baseline that, as noted above, is equivalent to the 75th percentile of market. Adding a COLA this year in addition to the study market adjustments may impact this positioning. However, to remain competitive with comparable agencies, and to minimize negative perceptions of the study's implementation, staff recommends that all staff receive at least the equivalent of a 2% salary increase, though implemented differently depending on circumstances as further described below.

As noted above, some classifications will receive an increase in base salary to reach the market baseline. This will happen one of three ways, based on how the current classification compensation compares to baseline:

o For classifications below baseline, compensation will be adjusted upward to reach the baseline

o For classifications with current base annual salaries between 0% and 2% below baseline, impacted staff will be adjusted to reach baseline. These staff will also receive a lump sum payment at the amount required to provide for a combined 2% adjustment.

o For classifications with current base annual salaries more than the baseline, the salary range will remain unchanged and impacted staff will receive the equivalent of 2% of current base salary as a lump sum payment.

All lump sum payments will occur in the second pay period in July.

The salary of the current General Manager, both the current General Manager Robert T. Shaver and the incoming General Manager Edward Stevenson, is based on separate Employment Agreements and will not be impacted by the implementation of the 2021 Classification and Compensation Study for MCP staff. Accordingly, this proposed action results in no change in General Manager compensation.

While the implementation of the compensation study will help the District to better match the desired market placement and result in more sustainable market position into the future, the implementation of the study does have costs. Specifically, the cost to implement the study for unrepresented positions is approximately $509,882 for FY 2021/22.

of 41


To offset a portion of this cost, as well as achieve a more sustainable health benefits program consistent with previous Board direction to provide excellent benefits while controlling costs consistent with the market, staff recommends the following amendments to the health benefits program for unrepresented employees.

Staff recommends that the additional taxable compensation that employees may receive through the cafeteria plan, known as "flex dollars," be capped at 75% of the dual health benefit that employees receive for waiving District-provided coverage if they have health coverage through other means. The dual health benefit is designed to incentivize employees to waive District coverage if they have access to other health coverage. Should an employee waive District coverage, the employee receives an amount of additional taxable compensation, based on their potential benefit eligibility. The District recognizes savings through these waivers by reduced premium costs. However, currently the amount of additional taxable compensation that employees can receive as "flex dollars" (i.e., a District contribution that can be applied to pay for health benefits or received as additional taxable compensation) is greater if the employee enrolls for coverage in certain plans offered under the District's cafeteria plan, rather than waiving District coverage. This recommended change will de-incentivize employees from enrolling in District coverage when it is not needed because they have access to other health coverage. The savings resulting from this change for unrepresented employees is estimated to be approximately $228,987 a year.

For represented employees, the Classification and Compensation study is subject to bargaining prior to implementation. The District is currently in negotiations with both employee union groups regarding implementation of the study as well as the proposed health benefits program adjustments. Staff will keep the Board apprised of negotiations.

If the Board approves the recommended amendments to the Management/ Confidential/ Professional (MCP) Employees Compensation Schedule/Handbook, staff will request the Board to adopt the complete FY 2021/22 MCP salary tables, as required under CalPERS requirements for public adoption and posting, at the July 8, 2021, Regular Board meeting.

Mr. Ken Nishimura, a resident of Fremont, inquired about a future compensation study to include represented staff. Ms. Solito responded to Mr. Nishimura's inquiry.

A motion was made by Director Huang, seconded by Director Gunther to adopt a resolution 1) authorizing the General Manager to take all actions required to implement the Classification and Compensation Study for all unrepresented M/C/P classifications and salary ranges, 2) amending the Management/Confidential/Professional (MCP) Employees Compensation Schedule/Handbook Section 1.1 Salary Increase and Section 13.0 Health Benefits Programs, and 3) implementing the Classification and Compensation study for M/C/P positions.

of 41



OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT ADOPTING AMENDMENTS TO THE M/C/P COMPENSATION HANDBOOK IN ORDER TO IMPLEMENT THE 2021 DISTRICT-WIDE CLASSIFICATION AND COMPENSATION STUDY AND OTHER AMENDMENTS


AYES: NOES: ABSENT:


5.22 CONSIDER APPOINTMENT OF REPRESENTATIVE TO THE DELTA CONVEYANCE DESIGN AND CONSTRUCTION AUTHORITY

Ms. Hidas reported that on November 12, 2020, the Board adopted Resolution No. 20-066, authorizing continued participation in the Delta Conveyance Project and funding for planning activities over the next two years. Additionally, the Board authorized the General Manager to execute the Amended and Restated Joint Powers Agreement Forming the Delta Conveyance Design and Construction Authority (DCA), which amended the original May 2018 DCA Joint Powers Agreement and updated the governance structure to align with current participation interest in the Delta Conveyance Project.

On January 14, 2021, the Board approved appointment of Sara Palmer and Valerie Pryor of Zone 7 Water Agency (Zone 7) to serve as Director and Alternate for joint representation of Class 2 on the DCA Board through June 30, 2021 and authorized the Board President to make future appointments to the DCA Board. This action was made on the condition that staff return to the Board on or before the June 2021 Board meeting after considering alternate approaches for future appointments in coordination with Zone 7. Since that time, the General Managers and staff have developed a Letter of Understanding (LOU) for Shared Representation on the Delta Conveyance Design and Construction Authority that outlines the intent and process for shared representation, generally having the Class 2 Director from one agency and the Class 2 Director Alternate from the other agency and alternating between the two agencies every two years and allowing for either District Board Members or staff to serve on the DCA. To maintain continuity, the Zone 7 representative will serve as the Class 2 Director for the two-year term starting July 1, 2021.

To memorialize this arrangement, staff requests authorization for the General Manager to execute the LOU with Zone 7 to confirm the intent and process for future appointments, and to provide input to the Board President regarding the appointment of the District representative to serve as the Class 2 Director Alternate for the two-year term from July 1, 2021, through June 30, 2023. This proposed methodology is consistent with Section 2.2.1.2 of the Board Rules and Code of Conduct which generally gives the Board President the authority to appoint Board Members to serve as the representative of the District to other groups and organizations.

Board authorization of this item will help meet the District's Strategic Plan Goal 2.2 - Protect Existing Imported Water Supplies.

of 41


In May 2018, certain contractors entered into a Joint Powers Agreement and formed the DCA, whose purpose was to actively participate with the Department of Water Resources (DWR) in the design and construction of California WaterFix. The DCA subsequently entered into a Joint Exercise of Powers Agreement with DWR (JEPA). Shortly after DWR rescinded its approvals of WaterFix and the Governor indicated support for a single tunnel project, the JEPA was amended, and its purpose shifted to provide preliminary design, planning, and other preconstruction activities to assist the environmental process for a potential Delta Conveyance Project.

Given the State's shift to the proposed Delta Conveyance Project and updated participation interest, the Amended and Restated DCA Joint Powers Agreement included a reorganization of the governance structure to better align with current participation in the proposed project. All participating agencies have executed the Amended and Restated DCA Joint Powers Agreement, and it went into effect as of December 31, 2020.

The updated structure of the DCA Board of Directors includes up to seven Directors and seven Alternate Directors, with each pair appointed by and representing the following Members:

1. Metropolitan Water District of Southern California ii. Kern County Water Agency

111. Santa Clara Valley Water District iv. Class 8 Members v. Class 8 Members

vi. Class 2 Members vii. Class 3, 5, and 7 Members.

Additionally, the Classes referenced are defined as follows:

• Class 2: Those Members who are entitled to the delivery of State Water Project water along the South Bay Aqueduct, except Santa Clara Valley Water District.

• Class 3: Those Members who are entitled to the delivery of State Water Project water within the San Joaquin Valley, except Kern County Water Agency.

• Class 5: Those Members who are entitled to the delivery of State Water Project water along the Coastal Aqueduct downstream of the Devil's Den Pumping Plant.

• Class 7: Those Members who are entitled to the delivery of State Water Project water along the West Branch of the California Aqueduct, except the Metropolitan Water District of Southern California.

• Class 8: Those Members who are entitled to the delivery of State Water Project water along the East Branch of the California Aqueduct, except the Metropolitan Water District of Southern California.

The District and Zone 7 are represented in the new structure through the shared seat for Class 2 Members and must appoint a Director and Alternate to the Board of Directors for the DCA. Based on the Board's feedback at the January 14, 2021 meeting, District and Zone 7 staff have coordinated and prepared a Letter of Understanding for Shared Representation on the Delta Conveyance Design and Construction Authority that outlines the intent and process for shared representation. Representation generally alternates between the two agencies to appoint a Director

of 41


or Alternate every two years. Each agency can select either a District Board Member or staff member to serve as their representative on the DCA in accordance with their agency's policies and procedures. The District and Zone 7 General Managers will notify the DCA of the appointments by July 1 each year in alignment with the procedures outlined in the Amended and Restated DCA Joint Powers Agreement.

Director Sarah Palmer and General Manager Valerie Pryor of Zone 7 are currently serving as DCA Class 2 Member Director and Alternate, respectively, through June 30, 2021. Director Palmer has served as DCA Vice President and Chair of the Delta Conveyance Stakeholders Engagement Committee, having represented the State Water Contractors' At-Large seat on the DCA Board since 2018.

By July 1, 2021, Zone 7 and the District need to appoint a Class 2 Member Director and Alternate for the following Fiscal Year and notify the DCA in writing. Based on the LOU that has been developed, the District would need to appoint an Alternate to serve starting July 1, 2021 for a 2-year term. Pursuant to the District's Board Rules and Code of Conduct Section 2.2.1.4, the Board President is authorized to appoint Board Members to serve as representatives of the District to all positions and other groups and organizations, except 1) appointments in which the law requires the action of the full Board, and 2) the Board determines that the District being represented on a group or organization by a Board Member is not in the overall best interest of the District. At the January 14, 2021, regular Board Meeting, the Board authorized the Board President to make future appointments to the DCA Board, including Zone 7 representatives and staff representatives in addition to District Board Members. Staff proposes that the Board authorizes the General Manager to execute the LOU with Zone 7 to confirm the intent and process for making future appointments for Class 2 representation. Staff additionally requests that the Board provide input to the Board President regarding the appointment of the District representative to serve as the Class 2 Director Alternate for the two-year term from July 1, 2021, through June 30, 2023.

Directors Weed, Gunther, Huang and Sethy provided input to President Akbari regarding the appointment of Director Weed to serve as the Class 2 Director Alternate.

A motion was made by Director Sethy, seconded by Director Weed to authorize the General Manager to execute a Letter of Understanding for Shared Representation on the Delta Conveyance Design and Construction Authority with Zone 7 Water Agency.


AYES: NOES: ABSENT:


5.23 RESOLUTION HONORING ROBERT T. SHA VER UPON HIS RETIREMENT FROM DISTRICT SERVICE

President Akbari reported that Robert T. (Bob) Shaver will be retiring after 30 years of service to the District, and his last day in the office will be July 1, 2021.

of 41


Bob joined the District on July 1, 1991 as Engineer II in the Project Engineering Division. He was promoted to Engineer III in 1994, Development Services Supervisor in 2000, Development Services Manager in 2002, Engineering Department Manager in 2003, and Assistant General Manager in 2010. The Board of Directors appointed Bob as the District's General Manager on December 7, 2014.

During his tenure as a Project Engineer, Bob led many key projects during a period of facility expansions and improvements needed to meet growth within the District. Such projects included the design and construction of the Whitfield Zone 1 Booster Station and the major transmission pipeline connecting the newly constructed Water Treatment Plant No. 2 to Whitfield Reservoir and other facilities. Bob also led major facility improvement projects such as a major retrofit and upgrades to the Mission San Jose Water Treatment Plant and contributed to other significant projects such as construction of the Peralta-Tyson Blending Facility and the Newark Desalination Facility. As a supervisor and manager, Bob oversaw numerous projects and programs in the Project Engineering and Development Services divisions, guiding the implementation of the District's Capital Improvement Program and extensions of the District's water distribution system to serve thousands of new District customers.

As Assistant General Manager, Bob engaged with numerous water industry groups, representing the interests of the District's customers while helping to shape programs and initiatives advancing the water industry across the Bay Area and throughout California. Internally, he developed programs focused on improving efficiencies, reducing costs, and engaging employees in workplace and process improvements, all while continuing to serve as the manager of the Engineering Department.

Bob's appointment as General Manager in 2014 came at a time when California and the District were facing an unprecedented drought, stressing the District's water supplies, operations, and finances. Through a collaborative process, Bob worked with the Board, District staff, and the public, to manage these challenges resulting in improved water supply and financial resiliency against future droughts and water supply emergencies. Other challenges faced by the District under Bob's tenure as General Manager included addressing threats to the District's water supplies and the onset of the COVID-19 global pandemic. Regardless of the challenge, the District continued its long history of meeting customer needs for a reliable supply of high-quality water at a reasonable price.

Other District accomplishments under Bob's tenure include the development of a 5-year strategic plan, organizational assessments, employee engagement efforts, a classification and compensation study, industry awards in financial reporting and technology programs, compliance with the Sustainable Groundwater Management Act, the development of a Water Efficiency Master Plan, and significant grant funding for important capital improvements such as water main renewals and seismic improvements, fish passage improvements in lower Alameda Creek, and the implementation of Advanced Metering Infrastructure.

As General Manager, Bob continued to represent the interests of the District and its customers through engagement with the Association of California Water Agencies, California Urban Water Agencies, CalDesal, Bay Area Water Agencies Coalition, the Fremont Rotary Club, and other organizations. Over the course of his 30-year career, Bob has consistently performed his duties in

of 41


service to the District and its customers with a high level of competence, professionalism, integrity, and dedication, and he will be greatly missed by his many friends and colleagues at the District and throughout the water industry.

The Board congratulated Mr. Shaver on his retirement from District service and thanked him for the many contributions he made during his career.

Mr. Ken Nishimura, a resident of Fremont, congratulated Mr. Shaver on his retirement.

A motion was made by Director Akbari, seconded by Director Gunther to adopt a resolution honoring Robert T. Shaver, and expressing appreciation for his 30 years of dedicated service to the District.


OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT HONORING ROBERT T. SHA VER UPON HIS RETIREMENT FROM DISTRICT SERVICE


AYES: NOES: ABSENT:


President Akbari adjourned the meeting to recess at 8:22 P.M. and reconvened the meeting at 8:40 P.M.

6-REPORTS

6.1 BOARD COMMITTEE REPORTS

• Legal, Intergovernmental & Community Affairs Meeting of May 11, 2021: 1) Update on State Legislation; 2) Public Outreach Update; 3) Water Conservation Campaign

• Operations & Water Quality Meeting of May 17, 2021: 1) Update on LED Lighting Project; 2) Update on Lead Service Line Inventory Requirements; 3) Report on Voluntary PFAS Monitoring Program

• Finance Meeting of May 18, 2021: 1) Review ACWD-JPIA's Annual Risk Assessment; 2) Customer Accounts Aging Report; 3) Investment Policy; 4) Income & Budget Statements; 5) Reserve Fund Policy

• Engineering & Information Technology Meeting of May 24, 2021: 1) Tour of Avalon Tank Slope Stabilization Improvements Project Site; 2) Update on Supervisory Control and Data Acquisition (SCADA) Replacement Project

• Water Resources & Conservation Meeting of May 26, 2021: 1) Drought Update; 2) Water Use Efficiency Program Update

of 41


6.2 OPERATIONAL REPORTS

• Investment Report

• Quarterly Personnel Report

• Water Production Report

• Distribution System Monthly Hardness Map

6.3 STAFF PRESENTATIONS-None 6.4 GENERAL MANAGER'S REPORTS

• Mr. Shaver reported that no significant changes to the District's ongoing response to the COVID-19 pandemic have occurred since his last report.

• Mr. Stevenson and Mr. Wunderlich presented options for reopening the customer service counter and in-person Board meetings for Board consideration. Discussion ensued and the Board provided input.

• Mr. Wunderlich informed the Board they will be receiving annual audit confirmation paperwork to complete and return to the District's auditor.

• Mr. Shaver requested input regarding President Akbari voting on behalf of the District in an upcoming California Special District Association Board election. Several Directors commented that they were comfortable with President Akbari voting on behalf of the District.

• Mr. Shaver reminded the Board that there will be a Special Board Meeting on June 24, 2021 at 4:00 P.M. to provide an update on the AMI project.

7 - DIRECTOR'S COMMENTS, REPORTS ON MEETINGS ATTENDED, AND AGENDA ITEM REQUESTS

• Directors Sethy and Weed reported on their attendance at the Water Education Foundation Lower Colorado River Tour which was held virtually on May 20, 2021.

• Director Sethy reported on his attendance at the Association of California Water Agencies Local Government Committee held on June 2, 2021.

8 - CLOSED SESSION

President Akbari announced that the Board will convene in closed session to discuss the following items:

8.1 Pursuant to California Government Code Section 54956.8

• Conference with Real Property Negotiators

Property: N3 Cattle Company, consisting of 131 parcels and approximately 50,535 acres in Alameda County, Santa Clara County, San Joaquin County, and Stanislaus County -Assessor's Parcel Nos. were furnished by Owners' Representative.

of 41


Agency Negotiators: Robert Shaver and Ed Stevenson Negotiating Parties: N3 Cattle Company, LLC; REN, Jr.; and REN, Jr., TR Under Negotiation: Price and Terms of Payment

8.2 Pursuant to California Government Code Section 54957

e Public Employee Appointment Title: General Manager

8.3 Pursuant to California Government Code Section 54957.6

e Conference with Labor Negotiators Agency Designated Representatives: Board President Aziz Akbari

and Vice President John Weed

Unrepresented Employee: General Manager

President Akbari adjourned the meeting to a closed session at 9:39 P.M. and reconvened the meeting at 11:49 P.M.

President Akbari reported that in closed session regarding Item 8.1, no action was taken.

President Akbari reported that in closed session regarding Item 8.2, no action was taken.

President Akbari reported that in closed session regarding Item 8.3, direction was given to Agency Designated Representatives.

9 - OPEN SESSION

9.1 RESOLUTION APPROVING AN EMPLOYMENT AGREEMENT WITH EDWARD HENRY STEVENSON TO SERVE AS THE DISTRICT'S GENERAL MANAGER

On April 13, the Board appointed Edward Henry Stevenson to the position of General Manager of the District contingent upon the successful negotiation of an Employment Agreement. On April 13, the Board also appointed President Akbari and Vice President Weed as the agency designated representatives for labor negotiations with Mr. Stevenson, an unrepresented employee.

The terms and conditions of the Employment Agreement have been successfully negotiated, and the key business terms of the Employment Agreement are as follows:

1. Term - The term of the Agreement begins on July 2, 2021 and continues until terminated by either party. The General Manager is an "at will" employee.

2. Termination Limitation - The General Manager may not be terminated without cause for a period of 6 months after an ACWD Board of Directors election.

3. Severance Pay - If the Board terminates the Employment Agreement without cause, the District must make a severance payment equal to 6 months base salary and benefits in exchange for a release.

4. Salary The District will pay an annual salary of $270,678, which is Step 2 of the Salary

of 41


Schedule for the General Manager classification based on the median of market compensation in the Ralph Anderson compensation and classification study. There are no automatic salary increases, all increases are in the Board's sole discretion.

5. IRS 401(a) Plan Contribution - The District will make a $10,000 contribution to the General Manager's 40l(a) plan during the pay period that includes December 30, 2021, and annually thereafter provided that Mr. Stevenson is employed by the District on December 30 of each year. In addition, Mr. Stevenson will receive the District's matching contribution to the plan in accordance with the MCP Compensation Schedule.

6. Automobile - The General Manager will receive reimbursement for automobile expenses.

7. Other Benefits - The General Manager will receive the same benefits as provided to management employees.

A motion was made by Director Huang, seconded by Director Gunther to approve an Employment Agreement with Edward Henry Stevenson to serve as the District's General Manager.


OF BOARD OF DIRECTORS OF ALAMEDA COUNTY WATER DISTRICT APPROVING THE EMPLOYMENT AGREEMENT AND AUTHORIZING THE BOARD PRESIDENT TO EXECUTE THE EMPLOYMENT AGREEMENT BETWEEN DISTRICT AND EDWARD HENRY STEVENSON


AYES: NOES: ABSENT:


There being no further business to come before the Board, the meeting adjourned at 11:55 P.M.

Andrew Warren, Assistant District Secretary

Attest:

of 41

June 10, 2021 Fremont, California The regular monthly ...

Documents

Transcript of June 10, 2021 Fremont, California The regular monthly ...