CONTRA COSTA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING November 7, 2018 MINUTES

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1 CONTRA COSTA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING MINUTES CALL TO ORDER President Borba called to order a regular meeting of the Board of Directors of the Contra Costa Water District (District) at 6:30 p.m., at 1331 Concord Avenue, Concord, the regular meeting place of the Board. ROLL CALL Directors Present: Directors Absent: General Manager: Legal Counsel: District Secretary: Lisa M. Borba, President Connstance Holdaway, Vice President Ernesto A. Avila - Bette Boatmun John A. Burgh None Jerry Brown Douglas E. Coty Mary A. Neher PLEDGE OF ALLEGIANCE President Borba led the pledge of allegiance. ADOPTION OF AGENDA Mr. Brown reviewed the change made to the Agenda Item No. 1.a. - Future Services. Copies were provided to the Board and made available at the back of the Board Room for the public. The Board adopted the agenda by rule. PUBLIC COMMENT (Please observe a three-minute time limit) CONSENT CALENDAR 1. Approve Directors' Service/Business and Travel Expenses a. Future Services - November 2018

2 Page2 2. Approve October 3, 2018 meeting minutes. 3. Approve the warrant register dated November 8, President Borba asked if anyone wanted to remove an item from the consent calendar to be separately considered. No items were removed from the consent calendar. President Borba asked for Board questions and comments. There were none. MOTION: Boatmun/Burgh to approve the consent calendar. The motion carried by a unanimous voice vote. ACTION 4. Authorize execution of an amendment to the agreement with Los Vaqueros Recreation Company for the operation and maintenance of the Los Vaqueros Recreation Program. Mr. Brown reviewed the work performed by Los Vaqueros Recreation Company (LVRC), whose current contract is set to expire at the end of The District proposes a five-year amendment to the contract. L VRC continues to receive outstanding marks from customers. The Public Information and Conservation (PIC) Committee reviewed the full Los Vaqueros Recreation report at its November 1, 2018 meeting. Staff recommends to provide the contract extension. At the end of the new term, the District will assess the contract, which will include the status of the Los Vaqueros Reservoir Expansion (L VE) Project and the performance of L VRC. The terms of the contract were reviewed. President Borba asked for Board questions and comments. Director Avila, a member of the PIC Committee, said the report provided details and comments regarding L VRC' s performance, who is doing a good job for the District. MOTION: Boatmun/Holdaway to authorize execution of an amendment to the agreement with Los Vaqueros Recreation Company for the operation and maintenance of the Los Vaqueros Recreation Program. The motion carried by a unanimous voice vote. 5. Authorize execution of a contract with R. J. Gordon Construction, Inc. for construction of the Margie Drive and Vicinity Main Replacements Project in the amount of $1,639,222, with a change order authority of $131,138, for a total amount not to exceed $1,770,360. Mr. Brown provided a review of the work to be completed in Pleasant Hill and said the District had received good and competitive bids.

3 Page3 President Borba asked for Board questions or comments. There were none. MOTION: Boatmun/Holdaway to authorize execution of a contract with R. J. Gordon Construction, Inc. for construction of the Margie Drive and Vicinity Main Replacements Project in the amount of $1,639,222, with a change order authority of $131,138, for a total amount not to exceed $1,770,360. The motion carried by a unanimous voice vote. 6. Multi-Party Agreement with the Local Agency Partners for Los Vaqueros Reservoir Expansion a. Authorize execution of the Multi-party Agreement with the Local Agency Partners to provide a total contribution amount up to $2.833 million for planning-related activities for the Los Vaqueros Reservoir Expansion Project; b. Authorize an increase in the FY19-FY20 budget of $7,203,800; and c. Authorize the addition of four project-permanent positions ( one Principal Engineer, one Principal Planner, and two Associate Water Resources Specialists) for a term of three to five years. The Board was provided with a current draft of the Multi-party Agreement and copies were available for the public. Special Assistant to the General Manager Marguerite Patil provided an L VE Project update that was last reviewed at the October 5 Board Study Session. Until the Joint Powers Authority (JP A) is formed sometime in the fall of 2019, the District will continue in the leadership role. The California Water Commission (CWC) Early Funding Agreement work is underway. The District has submitted its initial report and first quarterly report. The CWC website has projectspecific web pages where project documentation is posted for transparency. The key terms were provided for the Multi-party Agreement, which is the bridge agreement for the transition period of LVE Project partnership consideration to commitment. The District retains control over design criteria related to its existing facilities and may accept input from the Local Agency Partners (LAPs). The LVE Project work will be planned to meet specific criteria of the California Department of Water Resources, Division of Safety of Dams. During the Multi-party Agreement development phase, the LAPs have agreed to follow the beneficiaries pays method where each partner provides equal financial contributions. If there are less than eight partners participating in this phase, staff will need to bring the cost breakdown to the Board for additional review. The final Multi-party Agreement will be posted on the website. The Board will continue to be provided agreements and partnership participation updates. In response to Director Avila, staff confirmed the next update will occur in early A discussion ensued regarding the Multi-party Agreement terms and timing, which include the Board Principles. By signing the Multi-party Agreement, the LAPs agree to follow the Board Principles. A discussion ensued regarding inclusion of language regarding violations to the agreement.

4 Page 4 The recommended adjustments to the FYI 9 and FY20 operating and capital budgets were reviewed in detail, which included funding sources. The Board will be provided with quarterly financial reports. A discussion ensued about the filling and funding of the new project permanent positions, the existing staff upgrades, and the future staffing review to meet the L VE Project schedule. Because the proposed staffing changes are still under development, their financial obligations will be included in future rate revenue reviews. The ewe early funding parameters were reviewed. The schedule of actions for the period of November 2018 through December 2019 was provided. Updated proforma financial model versions will be brought to the Board. The Multi-party Agreement will be executed in parts. As each LAP executes its Multi-party Agreement, the District will issue the initial invoice for that LAP. Each agency has its own agreement approval process that is anticipated to occur over the next few months. The Board will be provided with information to support the JPA Agreement. Due to the significance of the L VE Project and impacts to the existing District facilities, Director Avila recommended for the JP A Agreement to be brought to the Board to allow for a detailed review before it is provided to the other LAP Boards of Directors. Staff confirmed it will be provided to the Board. If a partner leaves the partnership, it will not be refunded funds paid into the partnership. In response to Director Avila, Mr. Brown reviewed Attachment 2 of the staff report related to the L VE Project costs and reductions, which were a one-time event, expected from the early funding of the ewe grant and the outside funds. The future recurring costs were not known because the LVE Project partnership was still under development. Once the costs are established, the recurring costs will be included in future rate reviews. The staffing upgrade costs, which had been included in the staff report, were further reviewed. The Board thanked staff for the additional information. President Borba asked for additional Board questions or comments. The Board requested for the negotiated Multi-party Agreement and a partner participation update to be brought back for additional review in January. Mr. Brown confirmed the informational item would be provided. The Board requested for the JP A Agreement to be brought back for additional Board review and approval prior to it being submitted to other partner agency Boards. Mr. Brown confirmed staff would bring it back to the Board. MOTION: Boatmun/Holdaway to authorize execution of the Multi-party Agreement with the Local Agency Partners to provide a total contribution amount up to $2.833 million for planningrelated activities for the Los Vaqueros Reservoir Expansion Project; authorize an increase in the FY19-FY20 budget of $7,203,800; and authorize the addition of four project-permanent positions (one Principal Engineer, one Principal Planner, and two Associate Water Resources Specialists) for a term of three to five years. The motion carried by a unanimous voice vote.

5 Pages 7. Authorize execution of a total of $5,580,000 going to the following contract actions for Phase 2 Los Vaqueros Reservoir Expansion Project consulting services: a. Amendment No. 3 with AECOM Corporation (formerly URS Corporation) for an amount not to exceed $3,820,000 for a revised total contract amount not to exceed $4,249,730; b. Amendment No. 1 with Clean Energy Capital for an amount not to exceed $800,000 for a revised total contract amount not to exceed $950,000; c. Amendment No. 1 with Environmental Science Associates for an amount not to exceed $610,000 for a revised total contract amount not to exceed $1,375,000; d. Agreement with MBK Engineers for an amount not to exceed $250,000; e. Amendment No. 3 with Stantec Consulting Services for an amount not to exceed $100,000 for a revised total contract amount not to exceed $380,000. Director Avila recused himself from taking any action on the matter because his firm has contracts with some of the firms included in this agenda item. At 7:37 p.m. Director Avila left the Board Room. As noted in the last presentation, the District continues its leadership role for the interim governance structure prior to the JP A formation. The existing consultant team provides the District with specialty expertise to supplement in-house abilities and help to manage the heavy workload. The consultant team is critical to ensure that the District can remain on schedule, meet the CWC requirements, and form the JP A. All of the consultant contract actions were in compliance with the District's Administrative Procedure X-7 and consistent with the Board Principles. A review of each of the consultant contract awards was provided, which included work provided to the District, specialized work expertise, and work experience with the L VE Project. The total budget for the various consultant agreements was provided. Once formed, the JP A will establish a competitive, legally compliant consultant procurement process for work done under the JP A's jurisdiction. The District will continue to follow its competitive procurement process for work under the District's jurisdiction and does not anticipate the need for sole-source contracts. The consultant selection process will be coordinated by both the JP A and the District to ensure maximum competition. Staff recommitted that the consultant work would not get ahead of the project funding. Quarterly reports will be provided to the CWC, Reclamation, and LAP, which will all be posted to the CWC website and available to the public. The schedule was the same as reviewed during the L VE Project Multi-party Agreement. President Borba asked for Board questions or comments. There were none.

6 Page6 MOTION: Boatmun/Burgh to authorize execution of Agenda Item 7.a. - amendment No. 3 with AECOM Corporation (formerly URS Corporation) for an amount not to exceed $3,820,000 for a revised total contract amount not to exceed $4,249,730; Agenda Item 7.b. - amendment No. 1 with Clean Energy Capital for an amount not to exceed $800,000 for a revised total contract amount not to exceed $950,000; Agenda Item 7.c. - amendment No. 1 with Environmental Science Associates for an amount not to exceed $610,000 for a revised total contract amount not to exceed $1,375,000; Agenda Item 7.d. - an agreement with MBK Engineers for an amount not to exceed $250,000; and Agenda Item 7.e. - amendment No. 3 with Stantec Consulting Services for an amount not to exceed $100,000 for a revised total contract amountnotto exceed $380,000. The motion carried by a voice vote (Ayes: Boatmun, Borba, Burgh, Holdaway; Abstain: Avila). Director Avila returned to the Board Room at 7:45 p.m. REPORTS FOR DISCUSSION 8. Schedule Future Meeting Dates and Times Mr. Brown said the next Board of Directors meeting was scheduled on Thursday, November 14, 2018, due to the Thanksgiving holidays. REPORTS 9. General Manager Mr. Brown provided the Board with a review of the work completed at the Los Vaqueros Reservoir Inlet Structure Gate 5 Underwater Rehabilitation Project. Some additional maintenance items were identified during the project that will be packaged together and brought to the Board late summer or early fall of The DSOD has signed off on the project. Proposition 3 (Prop 3) was defeated by the voters at the November election. Although the Bay Area Regional projects will not.receive funds from Prop 3, the projects are still needed and will likely be modified to allow for their completion. 10. Legal Counsel Mr. Coty reported that the State of California passed SB50 last year affecting federal property transfers within California by prohibiting some and restricting others unless they were run through the State Lands Commission. The federal government brought a lawsuit against the State of California regarding the law. The federal court recently struck down the law, and the decision will likely be appealed. The District's Canal Title Transfer is a different type of property transfer and should not be impacted by the court's decision on this case. An update will be provided when more information is available.

7 Page Board Members. Director Burgh said that Veterans day was on November 11. He reviewed a federal court appellate court decision that required the removal of a cross-shaped monument that was located on public land in Maryland. He expressed concern about the possible impact to other monuments, such as the Soldier's Memorial Monument in Pleasant Hill, because they included depictions of crosses. The Board thanked Director Burgh for his military service. Vice President Holdaway reported that she had attended a meeting with Mr. Brown on October 29. Director Boatmun said she had received positive customer feedback regarding the work along the Clayton Canal, which looked good, and thanked staff for its efforts. She passed along accolades provided by the staff at WestAmerica Bank regarding Director of Finance Desiree Castello. She also received positive feedback about the horse riding trails at the Los Vaqueros Watershed. Director Avila thanked City of Clayton Councilmember Jim Diaz for attending the Board meeting. He reported that he met with Mr. Brown and attended the PIC meeting on October 30. He provided information that he recently received regarding the Facility Master Plan for John Muir. President Borba reported that she had met with Mr. Brown on October 23, October 30, and November 6. On October 30 she attended the PIC Committee meeting. She said that her son's school was scheduled to have its water tested through the Lead in Schools Testing Program being done by the District. ADJOURNMENT At 8:03 p.m., President Borba adjourned the meeting. The next regular meeting of the Board of Directors will be on November 14, 2018, commencing at 6:30 p.m. in the Board Room located at Concord A venue in Concord. Attest: \ Lisa M. Borba, President Mary ft61neher, District Secretary