MINUTES OF MEETING BOARD OF DIRECTORS, ORANGE COUNTY WATER DISTRICT August 20, 2014, 5:30p.m.

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1 MINUTES OF MEETING BOARD OF DIRECTORS, ORANGE COUNTY WATER DISTRICT August 20, 2014, 5:30p.m. President Dewane called to order the August 20, 2014 regular meeting of the Orange County Water District Board of Directors at 5:30p.m. in the Boardroom at the District office. Following the Pledge of Allegiance to the Flag, the Secretary called the roll and reported a quorum as follows. Directors Philip Anthony Kathryn Barr Denis Bilodeau Shawn Dewane Jan Flory Cathy Green Vincent Sarmiento Stephen Sheldon Harry Sidhu Roger Yoh (arrived 5:44p.m.) Others: Milt Dardis, Dave Hamilton, Mikel Hogan, Merle Moshieri- R4RD Wendy Leece- Candidate for OCWD Division 7 Ric Collett- Yorba Linda Water District Besty Eglash - Brady Ken Vecchiarelli- Golden State Water Company John Earl- Surf City Voice Brian Ragland- City of Huntington Beach Jose Diaz- City of Orange Paul Weghorst, Peer Swan- Irvine Ranch Water District Nabil Sabu- City of Santa Ana Jim Atkinson- Mesa Water District Director Yoh arrived at 5:44p.m. during Visitor Participation VISITOR PARTICIPATION Staff Michael Markus, General Manager Joel Kuperberg, General Counsel Janice Durant, District Secretary Gina Ayala, Bruce Dosier, Randy Fick, Roy Herndon, Bill Hunt, Eleanor Torres, Michael Wehner, Nira Yamachika Southeast Huntington Beach resident Milt Dardis urged the Board to investigate video streaming meetings. Item 20- Response to Grand Jury: Southeast Huntington Beach resident Merle Moshieri noted that the Grand Jury report focuses on seawater desalination as the only feasible supply alternative and overlooks wastewater recycling which can be desalinated and purified at a fraction of the cost of seawater desalination and with minimal environmental impact. She stated the omission of wastewater recycling as a significant element of any water supply management renders this report irrelevant and biased. Ms. Moshieri also stated that the carbon emissions resulting from increasing energy use by society has special relevance to coastal cities that will be profoundly affected by sea level rise. Director Sheldon asked Ms. Moshieri if she were contending that the proposed Desalination Plant would contribute to the rise of seawater in Huntington Beach and he requested that they speak outside of tonight's meeting.

2 Item 21, Website Design and Development: Dr. Mikel Hogan noted that while the District is upgrading its website it would be a good time to include video streaming of meetings. 8/20/14 Item 21, Website Design and Development: Surf City Voice representative John Earl urged the Board to upgrade the website to make it more accessible to the public by including video streaming and archiving, and suggested the home page give an explanation of OCWD. Mr. Earl then noted that Director Sheldon violated the law by discussing Poseidon with Ms. Moshieri due to his conflict of interest. Director Sheldon advised that he has not broken any conflict of interest laws and offered to explain the correct application of conflict of interest laws to Mr. Earl. Director Yoh arrived at 5:44p.m. at this point in tonight's meeting. CONSENT CALENDAR Director Sheldon requested that video streaming be added to the contract for Item No. 21, Website Design and Development. General Manager Markus advised that video streaming will be addressed in a separate contract at the next Board meeting. The Consent Calendar was then approved upon motion by Director Anthony, seconded by Director Green and carried [10-0], with Director Sidhu voting "No" on item No. 21, Website Design, and Director Sarmiento abstaining on Item No.2, Minutes. Ayes: Anthony, Barr, Bilodeau, Dewane, Green, Flory, Sarmiento, Sheldon, Sidhu, Yoh Noes: Sidhu (Item No. 21, Website Design) Abstain: Sarmiento (Item No. 2, Minutes) 1. Approval of Cash Disbursements MOTION NO APPROVING CASH DISBURSEMENTS Payment of bills for the period July 31, 2014 through August 13, 2014 in the total amount of $12,019, is ratified and approved. 2. Approval of Minutes of Board Meeting MOTION NO APPROVING MINUTES OF BOARD MEETINGS The minutes of the Board of Directors meeting held July 16, 2014 are approved as presented. (Abstain: Sarmiento) 2

3 8/20114 CONSENT CALENDAR ITEMS RECOMMENDED FOR APPROVAL AT COMMUNICATION LEGISLATIVE LIAISON COMMITTEE MEETING HELD AUGUST 7 3. Limited-Term Employment Agreement for Public Affairs Tour Coordinator RESOLUTION NO APPROVING LIMITED TERM EMPLOYMENT AGREEMENT WITH PUBLIC AFFAIRS TOUR COORDINATOR BECKY MUDD AND AUTHORIZING ESTABLISHMENT OF FULL TIME JOB CLASSIFICATION WHEREAS, Public Affairs Tour Coordinator Becky Mudd has served under a limited term employment agreement since February 17, 20 10; and WHEREAS, the District staff has presented and recommended renewal of such Limited Term Employment Agreement for a one-year term commencing August 20, 2014; and WHEREAS, the Communication and Legislative Liaison Committee has recommended that the Tour Coordinator position be developed into full time job classification and has directed staff to develop a salary range for such position and return to Committee in 60 days for review; NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby resolve as follows: Section 1: The herein-referenced agreement with Becky Mudd is approved; and, upon approval as to form by District General Counsel, its execution by the District officers is authorized. Section 2: Staff is directed to develop a full time job classification and salary range for the Tour Coordinator position and return to Committee in 60 days for review. 4. State Legislative Update MOTION ADOPTING POSITON OF SUPPORT IF AMENDED ON STATE LEGISLATION - SB 1168/ AB 1739 A position of "Support if amended" is hereby adopted on SB 1168/ AB CONSENT CALENDAR ITEMS RECOMMENDED FOR APPROVAL ATWATER ISSUES COMMITTEE MEETING HELD AUGUST Agreement to Caltrol for Renewal of Annual Software Support for GWRS Process Control S stem RESOLUTION AUTHORIZING ISSUANCE OF AGREEMENT TO CALTROL FOR SOFTWARE SUPPORT FOR GWRS PROCESS CONTROL SYSTEM RESOLVED, that issuance of an Agreement is authorized to Caltrol (Emerson's limited business partner) for the annual renewal of software support for GWRS process control system for a period of five years for a total amount of $258,858, with the 2014/2015 fiscal year contract amount to be 3

4 8/20/14 $49,247; and upon approval as to form by District General Counsel, its execution by the District officers is authorized. 6. Purchase Order to California Centrifugal Pump Company to Rebuild Green Acres Backwash Pum RESOLUTION AUTHORIZING PURCHASE ORDER TO CALIFORNIA CENTRIFUGAL PUMP COMPANY FOR THE REP AIR OF GREEN ACRES BACKWASH PUMP AO 1 RESOLVED, that issuance of Purchase Order is authorized to California Centrifugal Pump Company for an amount not to exceed $80,964 for the repair and refurbishment of Green Acres Backwash Pump AOl. 7. Agreement to Separation Processes Inc. for Technical Support on the GWRS Micro Filtration and Reverse Osmosis Operations RESOLUTION AUTHORIZING ISSUANCE OF AGREEMENT TO SEPARATION PROCESSES INC. FOR CONSULTING SERVICES FOR THE GWRS MFIRO MEMBRANE PROCESSES RESOLVED, that issuance of an Agreement is authorized to Separation Processes Inc. for an amount not to exceed $75,000 to provide consulting services on a time and material bases for the GWRS MF!RO membrane processes through August 31, 2015; and upon approval as to form by District General Counsel, its execution by the District officers is authorized. 8. Amendment to Agreement with Parsons for Additional Construction Management Services for the GWRS Initial Expansion Project RESOLUTION NO AUTHORIZING AMENDMENT TO AGREEMENT WITH PARSONS FOR ADDITIONAL CONSTRUCTION MANAGEMENT SERVICES FOR THE GWRS INITIAL EXPANSION PROJECT WHEREAS, pursuant to Resolution Nos , and adopted May 4, 2011 May 22,2013, and February 19,2014, respectively, OCWD authorized Agreement No with Parsons for Construction Management Services for the GWRS Initial Expansion; and WHEREAS, the Water Issues Committee of this Board has recommended approval of Amendment No. 3 to such Agreement with Parsons for an amount not to exceed $471,445 for additional construction management services required for the GWRS Initial Expansion project; NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby approve Amendment No.3 to the Agreement with Parsons as described herein; and, upon approval as to form by District General Counsel, its execution by the District officers is authorized. 4

5 8/ Award of Contract No. SC , Santiago Pipeline Access Project to GCI Construction, Inc. RESOLUTION NO AWARDING CONTRACT NO. SC , SANTIAGO PIPELINE ACCESS PROJECT, TO GCI CONSTRUCTION INC. WHEREAS, a Notice Inviting Bids for Contract No. SC , Santiago Pipeline Access Project, was published in The Orange County Register on July 7, 2014; and WHEREAS, the following bids were received and opened on July 28, 2014: GCI Construction, Inc. Atlas-Allied, Inc. GRFCO, Inc. $82,394 $105,514 $115,447 WHEREAS, the Water Issues Committee has recommended award of said contract to the lowest responsive bidder, GCI Construction Inc., in the amount of $82,394; NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby resolve as follows: Section 1: The Affidavit of Publication of Notice Inviting Bids for Contract No. SC , Santiago Pipeline Access Project, is received and filed. Section 2: The lowest responsive bid of GCI Construction, Inc. in the amount of $82,394 is accepted and all other bids are rejected. Section 3: The President or Vice President and General Manager or District Secretary are authorized to execute agreements on behalf of the District, in a form heretofore approved by this Board. Section 4: The District General Counsel or District Secretary is authorized to approve the Performance and Labor and Materials Bonds submitted by said contractor on behalf of the District, provided the bonds comply with the requirements of the bid proposal. Section 5: The District staff is directed to notify the unsuccessful bidders of the action taken herein and, upon execution of the agreement by the successful bidder, to return to the unsuccessful bidders their Bid Bonds. 5

6 8/20/ Agreement to American Water Chemicals, Inc. for Reverse Osmosis Antiscalants in GWRS Reverse Osmosis Treatment Facility RESOLUTION NO AUTHORIZING AGREEMENT TO AMERICAN WATER CHEMICALS, INC. FOR PURCHASE OF RO ANTISCALANT FOR GWRS RESOLVED, that issuance of an Agreement is authorized to American Water Chemicals, Inc. for the purchase of reverse osmosis (RO) antiscalant for the GWRS RO Treatment Facility, at the rate of $1.58/lb with a 2% 10 net 30 discount, for supply and delivery of antiscalant for a period of one year, with an option to renew for up to two years if the chemical is performing satisfactorily and staff can negotiate a fair price. 11. Award of Contract No. B , Burris Pump Station Project Phase 2 Construction, to Pacific Hydrotech Corp; Issue Amendment to Agreement to Tetra Tech and Establish Project Budget RESOLUTION NO AWARDING CONTRACT NO. B , BURRIS PUMP STATION PROJECT PHASE 2 CONSTRUCTION, TO PACIFIC HYDROTECH CORP WHEREAS, a Notice Inviting Bids for Contract No. B Burris Pump Station Project Phase 2 Construction, was published in The Orange County Register on June 25, 2014; and WHEREAS, the following bids were received and opened on July 31, 2014: Pacific Hydrotech Corp. USS Cal Builders Shimmick Construction CJW/MZT Steve P. Rados, Inc. Environmental Constructors Kiewit Infrastructures West McCarthy Building Co. J.F. Shea $20,439,800 $22,406,500 $22,851,000 $23,594,750 $24,151,400 $26,080,486 $26,597,500 $26,951,000 $29,065,030 WHEREAS, the Water Issues Committee has recommended award of said contract to the lowest responsive bidder, Pacific Hydrotech Corp., in the amount of $20,439,800; WHEREAS, staff has advised of the issuance of Addenda Nos. I and 2 to such contract clarifying the contract documents; and WHEREAS, pursuant to Resolution No adopted October 17,2012, OCWD authorized issuance of Agreement No to Tetra Tech for an amount not to exceed $990,980 for the design of the Burris Pit Pump Station; and WHEREAS, the Water Issues Committee of this Board has recommended issuance of Amendment No. 1 to such Agreement with Tetra Tech for an amount not to exceed $161,700 for additional work and specialty inspection; and 6

7 8/20114 NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby resolve as follows: Section 1: The Affidavit of Publication of Notice Inviting Bids for Contract No. B , Burris Pit Pump Station Project Phase 2 Construction, is received and filed. Section 2: Issuance of Addenda Nos. 1 and 2 to such contract is hereby ratified. Section 3: The lowest responsive bid of Pacific Hydrotech Corp. in the amount of $20,439,800 is accepted and all other bids are rejected. Section 4: The President or Vice President and General Manager or District Secretary are authorized to execute agreements on behalf of the District, in a form heretofore approved by this Board. Section 5: The District General Counsel or District Secretary is authorized to approve the Performance and Labor and Materials Bonds submitted by said contractor on behalf of the District, provided the bonds comply with the requirements of the bid proposal. Section 6: The District staff is directed to notify the unsuccessful bidders of the action taken herein and, upon execution of the agreement by the successful bidder, to return to the unsuccessful bidders their Bid Bonds. Section 7: Issuance of Amendment No. 1 to Agreement No with Tetra Tech is authorized for an amount not to exceed $1 61,700 for additional work and specialty inspection. Section 8: The proposed project budget in the amount of $25.2 million is hereby established. 12. Award of Contract No. FB , Fletcher Recharge Basin Project to Sukut Construction, Issue Amendment to Agreement to Butier Construction Managers and Establish Project Budget RESOLUTIONNO AWARDING CONTRACT NO. FB : FLETCHER RECHARGE BASIN PROJECT TO SUKUT CONSTRUCTION, LLC, AND AUTHORIZING AMENDMENT TO BUTlER CONSTRUCTION MANAGERS WHEREAS, a Notice Inviting Bids for Contract No. FB , Fletcher Recharge Basin Project, was published in The Orange County Register on June 16, 2014; and WHEREAS, staff has advised of the issuance of Addendum No. 1 and 2 to such Contract to clarify the bid documents; and WHEREAS, the following bids were received and opened on July 29, 2014: Sukut Construction Ames Construction Shimrnick Construction Minako America Corporation dba Minco Construction Pacific Hydrotech Canyon Springs Enterprises dba RSH Construction Los Angeles Engineering $4,050,242 $4,995,706 $5,022,641 $5,996,302 $6,003,566 $6,439,566 $6,417,533 7

8 WHEREAS, the Water Issues Committee has recommended award of said contract to the lowest responsive bidder, Sukut Construction, in the amount of $4,050,242; WHEREAS, pursuant to Resolution No adopted May 2, 2007, OCWD issued Agreement No to Butier Construction Managers, Consulting Engineers, for construction management services in connection with the District's Capital Improvement Program; and WHEREAS, the Water Issues Committee of this Board has recommended issuance of Amendment No.6 to such Agreement with Butier to extend the contract expiration date to June 30, 2016 for construction management services in connection with the Fletcher Recharge Basin Construction; NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby resolve as follows: Section 1: The Affidavit of Publication of Notice Inviting Bids for Contract No. FB , Fletcher Recharge Basin Project, is received and filed. Section 2: Issuance of Addenda Nos. 1 and 2 to such contract is hereby ratified. Section 3: The lowest responsive bid of Sukut Construction in the amount of $4,050,242 is accepted and all other bids are rejected. 8/20114 Section 4: The President or Vice President and General Manager or District Secretary are authorized to execute agreements on behalf of the District, in a form heretofore approved by this Board. Section 5: The District General Counsel or District Secretary is authorized to approve the Performance and Labor and Materials Bonds submitted by said contractor on behalf of the District, provided the bonds comply with the requirements of the bid proposal. Section 6: The District staff is directed to notify the unsuccessful bidders of the action taken herein and, upon execution of the agreement by the successful bidder, to return to the unsuccessful bidders their Bid Bonds. Section 7: Issuance of a no cost Amendment No.6 to Agreement No with Butier Construction Managers and Consulting Engineers is authorized to extend the contract expiration date to June 30, 2016 for construction management services. 13. Contract No. SAR , Imperial Headgates and Weir Pond Rehabilitation Project Notice Invitina Bids MOTION NO AUTHORIZING ISSUANCE OF NOTICE INVITING BIDS FOR CONTRACT NO. SAR : IMPERIAL HEADGATES AND WEIR POND REHABILITATION PROJECT Issuance of Notice Inviting Bids for Contract No. SAR , Imperial Headgates and Weir Pond Rehabilitation Project, is authorized. 8

9 8/20/14 CONSENT CALENDAR ITEMS RECOMMENDED FOR APPROVAL AT ADMINISTRATION AND FINANCE ISSUES COMMITTEE MEETING HELD AUGUST Monthly Cash Control Report MOTION NO RECEIVING AND FILING SUMMARY CASH AND CASH EQUIVALENTS CONTROL REPORT The Summary Cash and Cash Equivalents Control Report dated July 31,2014 is hereby received and filed. 15. Amendment to Agreement with Santa Ana Watershed Association to Extend Time Period for Audit RESOLUTION NO APPROVING FIRST AMENDMENT TO PROGRAM AGREEMENT WITH THE SANTA ANA WATERSHED ASSOCIATION WHEREAS, pursuant to Resolution No. R adopted June 19, 2013, OCWD approved the Santa Ana Watershed Program Agreement (SAW A) to set forth the terms and conditions guiding the expenditure of, and accounting for OCWD's past and future contributions to the Santa Ana Watershed Associations Trust Fund, as well as related issues addressed in the agreement; and WHEREAS, the Administration and Finance Issues Committee of this Board has presented and recommended approval of the First Amendment to such Agreement extending the completion date of the SAW A Trust Fund audit to September 19, 2014; NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby approve the First Amendment to such Agreement as described herein; and, upon approval as to form by District General Counsel, its execution by the District officers is authorized. 16. Sponsorship of the Groundwater Foundation's Community-Based Groundwater Conservation and Protection Forum MOTION NO AUTHORIZING FINANCIAL PARTICIPATION IN THE GROUNDWATER FOUNDATION'S COMMUNITY-BASED GROUNDWATER CONSERVATION AND PROTECTION FORUM Financial participation in the Groundwater Foundation's Community-based Groundwater Conservation and Protection Forum is hereby authorized in the amount of $1, Well Monitoring Replacement Van- Transfer Funds from FY to FY MOTION NO AUTHORIZING TRANSFER OF WESTBAY PRESSURE PROFILE VAN REPLACEMENT BUDGET FUNDS FROM FY TO FY The transfer of the Westbay pressure profile van replacement budget funds from FY to FY is hereby authorized. 9

10 8/20/ Investment Portfolio Holdings Report MOTION NO RECEIVING AND FILING INVESTMENT PORTFOLIO HOLDINGS REPORT The Investment Portfolio Holdings Report dated July 31, 2014 is received and filed. 19. Disclosure Procedures and Training MOTION NO RECEIVING AND FILING DISTRICT DISCLOSURE PROCEDURES The Disclosure Procedures and Training in connection with issuance and refunding of bonds and certificates of participation is hereby received and filed. 20. Grand Jury Report- Sustainable and Reliable Orange County Water Supply: Another Endangered Species? MOTION NO AUTHORIZING TRANSMITTAL OF LETTER OF RESPONSE TO ORANGE COUNTY GRAND JURY REPORT Transmittal of the letter of response to the Orange County Grand Jury report titled, "Sustainable and Reliable Orange County Water Supply: Another Endangered Species?" is authorized as presented. 21. Website Design and Development RESOLUTION NO AUTHORIZING AGREEMENT TO NETRELA TIONS FOR DESIGN AND DEVELOPMENT OF OCWD WEBSITE RESOLVED, that issuance of an Agreement is authorized to NetRelations for an amount not to exceed $97,000 to design and develop the OCWD website; and, upon approval as to form by District General Counsel, its execution by the District officers is authorized. (Noes: Sidhu) 10

11 MATTER FOR CONSIDERATION 8/ Groundwater Management Legislation Director of Public Affairs Eleanor Torres advised that SB 1168 (Pavley) and AB 1739 (Dickinson and Rendon) continues to move through the legislature. She stated that, based on the District's adopted policy principles, legal counsel and staff were able to weigh in and submitted amendments to the Bill approved by the Communications/Legislative Liaison Committee at its August 7 meeting. Ms. Torres reported that staff was successful in getting amendments inserted that names OCWD, as well as other special act districts, the exclusive groundwater manager within its boundaries. She pointed out that included in tonight's packet are the amendment nos. 55 and 64 to SB 1168 that contain the provisions the District sought. Further, she stated that this week, SB 1168 and AB 1739 were split into two bills, each with half of the language of the original bill, noting that passage of one bill is contingent on passage of the other bill. Based on these amendments being inserted into SB 1168 and provided they remain in the bill, Ms. Torres stated that staff recommends the District take a support position on the bills. Director Green reported the Association of California Water Agencies unanimously approved full support of these bills, and the following action was then taken. MOTION NO ADOPTING POSITION OF SUPPORT ON SB 1168 (PA VLEY) AND AB 1739 (DICKINSON). Upon motion by Director Green, seconded by Director Anthony and carried [10-0], the OCWD Board hereby adopts a position of support on SB 1168 (Pavley) and AB 1739 (Dickinson). Ayes: Anthony, Barr, Bilodeau, Dewane, Green, Flory, Sarmiento, Sheldon, Sidhu, Yoh INFORMATIONAL ITEMS There was no discussion of the Informational Items on tonight's Agenda. ~ Reports on Conferences/Meetings Attended at District Expense (at which a Quorum of the Board was Present) The Board reported on attendance at the following Committee meetings and noted the Minutes and/or Action Agendas were included in tonight's Board packet. August 06- Communication/Legislative Liaison Committee August 13- Water Issues Committee August 14- Administration/Finance Issues Committee VERBAL REPORTS Director Sarmiento reported on a meeting he attended with staff members Gina Ayala and Dave Bolin at the Santa Ana Rotary Club regarding the South Basin Groundwater Protection Project President Dewane reported he attended a meeting of the Laguna Beach Rotary Club to discuss current OCWD issues. Director Anthony reported he and John Kennedy attended the Cypress and Seal Beach Chambers of Commerce meetings to discuss current water issues. Director Bilodeau reported he and staff member Diane Pinnick attended the Orange Rotary Club to discuss current OCWD issues. 11

12 Director Green reported that yesterday ACWA supported the Water Bond. 8/20/14 ADJOURNMENT TO CLOSED SESSION The Board adjourned to Closed Session at 6:07 p.m. as follows: CONFERENCE WITH LEGAL COUNSEL- EXISTING LITIGATION [Paragraph (1) of subdivision (d) of Section ]: Two (2) Cases I) OCWD v. Northrop Corporation, eta! (VOC Litigation) Superior Court Case No. 04CC ) OCWD v. Sabic Innovative plastics, LLC, eta! (South Basin Litigation) Superior Court Case No. 03CC PUBLIC EMPLOYEE PERFORMANCE EVALUATION (General Manager) [Government Code Section 54957] RECONVENE IN OPEN SESSION The Board reconvened in Open Session at 6:58p.m. whereupon General Counsel Kuperberg announced that the Board by the unanimous vote of all Directors [ 1 0-0] authorized the following. RESOLUTION NO. CS AUTHORIZING AMENDMENT TO RETAINER AGREEMENT WITH (ED CONNOR) LAW FIRM OF CONNOR, FLETCHER & HEDENKAMP LLP Ayes: Anthony, Barr, Bilodeau, Dewane, Flory, Green, Sarmiento, Sheldon, Sidhu, Yoh ADJOURNMENT There being no further business to come before the Board, the meeting was adjourned at 6:58p.m. 1 Janicybur~nt, DisfN Secretary Shawn Dewane, President 12