MINUTES OF MEETING BOARD OF DIRECTORS, ORANGE COUNTY WATER DISTRICT October 21, 2015, 5:30 p.m.

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1 MINUTES OF MEETING BOARD OF DIRECTORS, ORANGE COUNTY WATER DISTRICT October 21, 2015, 5:30 p.m. President Green called to order the October 21, 2015 regular meeting of the Orange County Water District Board of Directors at 5:30 p.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 Denis Bilodeau Shawn Dewane Jan Flory Cathy Green Dina Nguyen Roman Reyna Stephen Sheldon Harry Sidhu Roger Yoh (not present) (arrived 6:00 p.m.) Staff Michael Markus, General Manager Joel Kuperberg, General Counsel Judy-Rae Karlsen, Assistant District Secretary Randy Fick, David Field, Roy Herndon, Bonnie Howard, John Kennedy, Dave Mark, Chris Olsen, Mehul Patel, Greg Woodside, Nira Y amachika Others: Jerry Jensen, Ron Branchard, Chris Humphries, Scott Weaver - Jensen Drilling Company Mark Best - Best Drilling and Pump Company Charles Barkley - Orange County Employee Association Jim Atkinson - Mesa Water District Bob Kiley - Yorba Linda Water District Keith Lyon - Municipal Water District of Orange County Tom McCarthy - City of Anaheim Brian Ragland - City of Huntington Beach Nabil Sabu - City of Santa Ana Ken Vecchiarelli - Golden State Water Company EMPLOYEE OF THE QUARTER AW ARD The Board presented Hydrogeologist David Field with the Employee of the Quarter award. VISITOR PARTICIPATION Orange County Employee Association representative Charles Barkley presented the Board with a letter ( on file at the District office) written by Orange County Employee Association General Manager Jennifer Muir requesting that the Board reconsider and decline to appeal the decision of the Public Employment Relations Board regarding the issue of the modified agency shop. CONSENT CALENDAR Director Anthony requested the removal of Item No. 10, Amendment to Agreement with Hargis+ Associates, from the Consent Calendar. The balance of the Consent Calendar was approved upon motion by Director Anthony, seconded by Director Flory and carried [8-0] as follows. Ayes: Anthony, Bilodeau, Dewane, Flory, Green, Nguyen, Reyna, Sheldon Absent: Sidhu, Yoh

2 1. Approval of Cash Disbursements MOTION NO APPROVING CASH DISBURSEMENTS Payment of bills for the period October 1, 2015 through October 14, 2015 in the total amount of $4,345, is ratified and approved. 2. Approval of Minutes MOTION NO APPROVING MINUTES OF BOARD OF DIRECTORS MEETING The minutes of Board of Directors meeting held September 16, 2015 are hereby approved as presented. 3. Purchase Order to Hydranautics for Membrane Elements for GWRS Reverse Osmosis S stem RESOLUTION NO AUTHORIZING PURCHASE ORDER TO HYDRANAUTICS FOR MEMBRANE ELEMENTS FOR GWRS REVERSE OSMOSIS SYSTEM RESOLVED, that issuance of a Purchase Order to Hydranautics for an amount not to exceed $2,329,755 (includes o-rings, installation support, tax & shipping) for 6,300 ESPA2-LD membranes for the GWRS reverse osmosis system is hereby authorized. CONSENT CALENDAR ITEMS RECOMMENDED FOR APPROVAL AT COMMUNICATION AND LEGISLATIVE LIAISON COMMITTEE MEETING HELD OCTOBERS 4. State Legislative Update MOTION NO APPROVING ACTIONS IN CONNECTION WITH STA TE LEGISLATION The following actions in connection with State Legislation are here authorized: 1) Add Ocean Desalination Water Conveyance Projects to the existing list of the District's Proposition 1 (Water Bond) funding priorities; and 2) Direct staff to advocate for the Proposition 1 cap to be increased from $5 million to a minimum of $15 million per project for ocean desalination projects, which is the same cap for water recycling projects; and 3) Add aforementioned and following priorities to the OCWD 2015 Legislative Platform: 2

3 a) Support the WateReuse Association with potential new legislation efforts regarding establishing Direct Potable Reuse regulations and/or bottling GWRS Water for educational purposes to demonstrate that the water is safe, and can be a source of water during an emergency (such as an earthquake) b) When requiring 25% water conservation during times of drought and/or as a permanent policy, incentivize water reuse by counting Indirect Potable Reuse (IPA) as part of the 25% savings ( or any future required savings goals). c) As the state drought emergency regulations are re-visited for the development of long-term and permanent regulations, OCWD would like the State Board to consider local conditions and existing water reuse infrastructure investments that have already been made-to avoid inadvertently causing a net reduction in the reuse and conservation of water in Orange County. d) Any state greywater policy should encourage generating new water supplies for the state. Specifically, 1. A void adding a new upstream greywater system that would significantly impact the current flows to the GWRS and waste the capacity of our existing GWRS water recycling infrastructure. 11. Encourage the State Board's greywater policy to be flexible enough to consider local conditions where there is already an investment in water recycling facilities. iii. Advocate that the State Board not develop a uniform state-wide policy but instead address local conditions where extensive recycling is already occurring and new greywater systems would lead to the diverting of water that could be recycled for potable reuse projects. 5. Logos on GWRS Flow Equalization Tanks MOTION NO TABLING DISCUSSION OF PAINTING THE GWRS FLOW EQUALIZIATION TANKS Discussions on painting the GWRS flow equalization tanks are hereby tabled until regularly scheduled maintenance of the tanks is to occur and/or when grant and/or sponsorship funding becomes available. 3

4 I 0/21 /15 CONSENT CALENDAR ITEMS RECOMMENDED FOR APPROVAL ATWATER ISSUES COMMITTEE MEETING HELD OCTOBER Destruction of Monitoring Well AM-36 RESOLUTION NO AUTHORIZING FILING OF CATEGORICAL EXEMPTION FOR DESTRUCTION OF MONITORING WELL AM-36 RESOLVED, that destruction of monitoring well AM-36 is authorized and a project budget of $45,000 is established; and filing of a Categorical Exemption for the destruction of monitoring well AM-36 is authorized in compliance with California Environmental Quality Act (CEQA) guidelines. 7. Destruction of Monitoring Well SCS-13 and Construction of Replacement Monitoring Well SCS-13R RESOLUTION NO AUTHORIZING FILING OF CATEGORICAL EXEMPTION FOR DESTRUCTION OF MONITORING WELL SCS-13 AND CONSTRUCTION OF REPLACEMENT MONITORING WELL SCS-13R RESOLVED, that destruction of monitoring well SCS-13 and construction of replacement monitoring well SCS-13R is authorized and a project budget of $102,000 is established; and filing of a Categorical Exemption for the destruction of monitoring well SCS-13 and construction of replacement monitoring well SCS-13 R is authorized in compliance with the California Environmental Quality Act (CEQA) guidelines. 8. Contract No. SAR , Imperial Headgates and Weir Pond Rehabilitation:Amendment to Agreement with AKM Consulting Engineers for Construction Management Services RESOLUTION NO AUTHORIZING AMENDMENT TO AGREEMENT WITH AKM CONSULTING ENGINEERS FOR ADDITIONAL CONSTRUCTION MANAGEMENT AND INSPECTION SERVICES FOR CONTRACT NO. SAR , IMPERIAL HEADGATES AND WEIR POND REHABILITATION PROJECT WHEREAS, pursuant to Resolution No. R15-l-4 adopted January 21, 2015, OCWD authorized Agreement No to AKM Consulting Engineers for Construction Management and Inspection Services for Contract SAR , Imperial Headgates and Weir Pond Rehabilitation Project; and WHEREAS, the Water Issues Committee of this Board has recommended issuance of Amendment No. 1 to such agreement with AKM Consulting Engineers for an amount not to exceed $63,063 for additional construction management and inspection services for the Imperial Headgates and Weir Pond Rehabilitation Project, Contract SAR ; 4

5 NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby authorize issuance of Amendment No. 1 to the aforementioned Agreement No.1049 with AKM Consulting Engineers as described herein; and upon approval as to form by District General Counsel, its execution by the District officers is authorized. 9. Contract No. GA : Perimeter Site Improvement of the Green Acres Project and City of Santa Ana Reservoirs - Agreement to Parsam Construction, Inc. RESOLUTION NO AWARDING CONTRACT NO. GA : PERIMETER SITE IMPROVEMENT OF THE GREEN ACRES PROJECT AND CITY OF SANTA ANA RESERVOIR TO PARSAM CONSTRUCTION, INC. WHEREAS, a Notice Inviting Bids for Contract No. GA , Perimeter Site Improvement of the Green Acres Project and City of Santa Ana Reservoir, was published in The Orange County Register on August 29, 2015; and WHEREAS, the following bids were received and opened on October 1, 2015: Parsam Construction Inc. $ 452,120 GCI Construction Inc. $ 453,560 Roadway Engineering & Contracting Inc. $ 497,990 C.S. Legacy Construction Inc. $ 539,424 Fleming Environmental Inc. $ 546,070 Unique Performance Construction Inc. $ 561,020 WHEREAS, the District staff has recommended award of said contract to the lowest responsive bidder, Parsam Construction, Inc., in the amount of $452,120; 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. GA , is received and filed. Section 2: The lowest responsive bid of Parsam Construction, Inc. in the amount of $452,120 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 an Agreement on behalf of the District, in a form heretofore approved by this Board, with Parsam Construction, Inc. pursuant to the terms of its proposal. 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 bidder 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 10. Amendment to Agreement with Hargis+ Associates to Prepare Pilot Study Work Plan for the South Basin Groundwater Protection Project This matter was removed from the Consent Calendar for consideration. CONSENT CALENDAR ITEMS RECOMMENDED FOR APPROVAL AT THE ADMINISTRATION AND FINANCE ISSUES MEETING HELD OCTOBER Monthly Cash Control Report MOTION NO MONTHLY CASH CONTROL REPORT The Summary Cash and Cash Equivalents Control Report dated September 30, 2015 is hereby received and filed. 12. RFP for Integrated Physical Access Control System and Video Monitoring System U rades MOTION NO AUTHORIZING RFP FOR INTEGRATED PHYSICAL ACCESS CONTROL SYSTEM AND VIDEO MONITORING SYSTEM UPGRADES Issuance of a Request for Proposals is authorized for an Integrated Physical Access Control System (PACS) for OCWD's Fountain Valley and Field Headquarters facilities and Video Monitoring System (VMS) for Santiago Basin. 13. Award Chemical Contracts for Water Treatment Systems RESOLUTION NO AW ARD ING CHEMICAL CONTRACTS FOR WATER TREATMENT SYSTEMS RESOLVED, that issuance of the following Agreements to vendors for the purchase of water treatment chemicals: 1) Brenntag Pacific for supply and delivery of hydrogen peroxide, at $53 8/ton with a 2% 10 net 30 terms discount, to commence on November 1, 2015, for a period of one year with the option to renew for an additional year; 2) Brenntag Pacific, Inc. for supply and delivery of citric acid, at $870/ton with a 3% 10 net 30 terms discount to commence on November 1, 2015k, for a period of one year, with the option to renew for one year; 3) Olin Corporation dba Olin Chlor Alkali Products, for supply and delivery of sodium hypochlorite, at $0.549/gal, to commence on November 1, 2015, for a period of one year, with the option to renew for one year; 4) Uni var USA, Inc. for supply and delivery of sulfuric acid, at $154/ton, with a 2% 10 net 30 terms discount, to commence on November 1, 2015, for a period of one year, with the option to renew for one year; and 6

7 5) Brenntag Pacific for supply and delivery of caustic soda, at $460/ton with a 2% 10 net 30 terms discount, to commence on November 1, 2015, for a period of one year, with the option to renew for one year. 14. Investment Portfolio Holdings Report MOTION NO RECEIVING AND FILING INVESTMENT PORTFOLIO HOLDINGS REPORT The Investment Portfolio Holdings Reports dated September 30, 2015 is received and filed. 15. Independent Auditors Report for the Fiscal Year Ended June 30, 2015 MOTION NO RECEIVING AND FILING INDEPENDENT AUDITORS REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 The Audit Reports prepared by Lance, Soll and Lunghard, LLP for the period ended June 30, 2015 are hereby received and filed. 16. Budget to Actual Report for FY MOTION NO RECEIVING AND FILING BUDGET TO ACTUAL REPORT FOR FY The Budget to Actual Report for Fiscal Year ending June 30, 2015 is hereby received and filed. 17. Ratio Analysis - Fourth Quarter of FY MOTION NO RECEIVING AND FILING THE RATIO ANALYSIS FOR FOURTH QUARTER OF FY The Ratio Analysis Report for Fiscal Year Fourth Quarter ending June 30, 2015 is hereby received and filed. 7

8 18. Commercial Paper Letter of Credit Substitution RESOLUTION NO AUTHORIZING THE EXECUTION AND DELIVERY OF A LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT, A FEE AGREEMENT AND AT AXABLE TAX AND REVENUE ANTICIPATION NOTE TO SUPPORT AND EXPAND THE EXISTING ORANGE COUNTY WATER DISTRICT COMMERCIAL PAPER PROGRAM AND AUTHORIZING CERTAIN OTHER ACTIONS WHEREAS, the Board of Directors of the Orange County Water District (the "District"), a political subdivision duly organized and existing under and pursuant to the Constitution and laws of the State of California ( the "State"), has entered into a commercial paper program through the OCWD Public Facilities Corporation (the "Corporation"); and WHEREAS, to implement the commercial paper program, the Board of Directors of the Corporation has adopted a second amended and restated resolution (the "Corporation Resolution") providing for the execution and delivery of taxable Orange County Water District Commercial Paper Notes (the "Taxable Commercial Paper Notes"); and WHEREAS, in order to support the issuance of the Taxable Commercial Paper Notes relating to the fiscal year ending June 30, 2016, it is necessary to issue a taxable tax and revenue anticipation note and to replace an existing letter of credit which will expire on November 30, NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE ORANGE COUNTY WATER DISTRICT DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Definitions. Unless the context otherwise requires, the terms defined in this Section shall have the meanings herein specified. "Authorizing Law" means Article 7.6, Chapter 4, Part 1, Division 2, Title 5 of the California Government Code. "Bank" means Sumitomo Mitsui Banking Corporation, acting through its New York Branch. "Code" means the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder. "Contract" has the meaning set forth in the Indenture. "Corporation" means the OCWD Public Facilities Corporation. "District" means the Orange County Water District. "Fee Agreement" means the Fee Agreement dated a date in November, 2015, between the District and the Bank, as the same may be amended, supplemented, modified or restated from time to time in accordance with its terms. "Indenture" means the Indenture, dated as of December 1, 2012 by and between U.S. Bank, National Association and the District, as amended and supplemented from time to time. "Letter of Credit and Reimbursement Agreement" means the Letter of Credit and Reimbursement Agreement dated as of November 1, 2015, between the District and the Bank, as the same may be amended, supplemented, modified or restated from time to time in accordance with its terms. "Net Revenues" means Net Revenues as defined in the Indenture. "Parity Obligations" means Bonds and Contracts, as defined in the Indenture (including, without limitation, the Letter of Credit and Reimbursement Agreement). "Regulations" means the income tax regulations promulgated or proposed by the Department of 8

9 the Treasury pursuant to the Code from time to time, including temporary regulations, to the extent applicable. "Tax-Exempt Note" means the Tax and Revenue Anticipation Note issued under a Resolution adopted by the Board of Directors of the District on July 15, "Taxable Commercial Paper Notes" means the Orange County Water District Commercial Paper Notes, Series B (Taxable) issued by the Corporation from time-to-time pursuant to an amended and restated resolution of the Corporation, adopted on October 21, "Taxable Note" means the Taxable Tax and Revenue Anticipation Notes to be issued hereunder. "Trustee" means U.S. Bank National Association, and any successor thereto. Section 2. Issuance of the Taxable Notes; Amount: Terms: Interest Rate: Place of Payment. Pursuant to the Authorizing Law, the Taxable Note shall be issued in an aggregate principal amount not to exceed $25,000,000 which, when added to the interest payable thereon and the principal of and interest on the Tax-Exempt Note, will not exceed 85 percent of the estimated amount of the then uncollected taxes, income, revenue, cash receipts, and other moneys of the District which will be available for the payment thereof. A certificate of the Chief Financial Officer certifying to such effect, in the form attached hereto as "Exhibit B," shall be completed by the Chief Financial Officer on or prior and as a condition to, the delivery of the Taxable Note. The Taxable Note shall be designated "Orange County Water District Tax and Revenue Anticipation Note, Series B (Taxable)" and shall be dated the date of issuance thereof. The Taxable Note shall be payable at the office of the District at such times and in such amounts as set forth in the Taxable Note. The Taxable Note shall mature and be payable no later than 15 months after its date of issuance. The Taxable Note shall bear a rate of interest which shall be determined on a daily basis and shall be a rate which when multiplied by the principal amount of such Taxable Note outstanding on such day will be equal to interest accruing with respect to the Taxable Commercial Paper Notes outstanding on such day and shall be payable in accordance with the form of the Taxable Note. The Taxable Note shall be prepayable in whole or in part on any day on which the Corporation notifies the District that principal of Taxable Commercial Paper Notes is due and payable and that the District declines to cause additional Taxable Commercial Paper Notes to be sold to repay such maturing Taxable Commercial Paper Notes. Section 3. Execution of the Taxable Notes. The President, First Vice President or Second Vice President is hereby authorized and directed to sign the Taxable Note, by such officer's manual, printed, lithographed or facsimile signatures. Section 4. Form of the Taxable Notes. The Taxable Note shall be issued in substantially the form set forth in "Exhibit A," attached hereto and incorporated herein and may be issued in typewritten form. Section 5. Taxable Note Non-Callable. The Taxable Note is not subject to call and redemption prior to the maturity date thereof, except as set forth in Section 2 hereof. Section 6. Security for the Taxable Note; Pledge of Net Revenues. As security for the payment of the principal of and interest on the Taxable Note, the District hereby pledges the Net Revenues of the District on a parity with payment of Parity Obligations of the District. The District hereby acknowledges that the Taxable Note shall constitute a "Bond" for purposes of the Indenture. 9

10 I 0/21/15 Section 7. Letter of Credit and Reimbursement Agreement and Fee Agreement. The Letter of Credit and Reimbursement Agreement and the Fee Agreement, to be entered into with the Bank, in substantially the form attached hereto as Exhibit A and Exhibit B, respectively, and, upon execution as authorized below, made a part hereof as though set forth in full herein, are hereby approved. The President, First Vice President or Second Vice President or General Manager or the designee thereof is hereby authorized and directed to execute and deliver the Letter of Credit and Reimbursement Agreement and the Fee Agreement with such changes, insertions and omissions as may be recommended by General Counsel or Stradling Y occa Carlson & Rauth, a Professional Corporation, as Bond Counsel ("Bond Counsel"), and approved by the officers executing the same, said execution being conclusive evidence of such approval. The Letter of Credit and Reimbursement Agreement is hereby designated a Contract. Section 8. Amended and Restated Issuing and Paying Agent Agreement. The Amended and Restated Issuing and Paying Agent Agreement, in substantially the form attached hereto as Exhibit C, and, upon execution as authorized below, made a part hereof as though set forth in full herein, is hereby approved. The President, First Vice President or Second Vice President or General Manager or the designee thereof is hereby authorized and directed to execute and deliver the Amended and Restated Issuing and Paying Agent Agreement with such changes, insertions and omissions as may be recommended by General Counsel or Bond Counsel and approved by the officers executing the same, said execution being conclusive evidence of such approval. Section 9. Amended and Restated Dealer Agreement. The Amended and Restated Dealer Agreement, in substantially the form attached hereto as Exhibit D and, upon execution as authorized below, made a part hereof as though set forth in full herein, is hereby approved. The President, First Vice President or Second Vice President or General Manager or the designee thereof is hereby authorized and directed to execute and deliver the Amended and Restated Dealer Agreement with such changes, insertions and omissions as may be recommended by General Counsel or Bond Counsel and approved by the officers executing the same, said execution being conclusive evidence of such approval. Section 10. General Authorization. The President, First Vice President or Second Vice President or the General Manager, the Chief Financial Officer or the designee thereof and any other proper officer of the District, acting singly, is authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper to effectuate the continuation of the commercial paper program and this resolution, and such actions previously taken by such officers are hereby ratified, confirmed and approved. Section 11. Certified Copies. The District Secretary shall provide a certified copy of this document to the Chief Financial Officer who shall take such action as shall be necessary to assure compliance by the District with the terms and conditions hereof. The District Secretary shall further provide a certified copy of this document to the Trustee. Section 12. Effective Date. This resolution shall take effect immediately. 10

11 ITEM REMOVED FROM CONSENT CALENDAR FOR CONSIDERATION 10. Amendment to Agreement with Hargis+ Associates to Prepare Pilot Study Work Plan for the South Basin Groundwater Protection Project Director Anthony requested that staff provide additional information on the pilot study conducted by Hargis + Associates. General Manager Mike Markus reviewed the scope of work within the proposed pilot study. District Chief of Hydrogeology Roy Herndon advised the project will provide the hydrogeologic data and remediation test data needed to develop and calibrate a groundwater model that will assist with the goal of identifying appropriate and effective remedial solutions for the South Basin Groundwater Protection project. The Board then took the following action. Upon motion by Director Dewane, seconded by Director Anthony, the following resolution was unanimously adopted [8-0]. Ayes: Anthony, Bilodeau, Dewane, Flory, Green, Nguyen, Reyna, Sheldon Absent: Sidhu, Yoh RESOLUTION NO AUTHORIZING AMENDMENT TO AGREEMENT WITH HARGIS+ ASSOCIATES TO PREP ARE PILOT STUDY WORK PLAN FOR THE SOUTH BASIN GROUNDWATER PROTECTION PROJECT WHEREAS, pursuant to Resolution No adopted January 21, 2015, OCWD issued Agreement No to Hargis+ Associates in the amount of $657,852 to prepare a pilot study work plan for the South Basin Groundwater Protection Project; and WHEREAS, the Water Issues Committee of this Board has recommended issuance of Amendment No. 1 to such Agreement No with Hargis+ Associates in the amount of $41,048 to prepare a pilot study work plan for the South Basin Groundwater Protection Project. NOW, THEREFORE, the Board of Directors of the Orange County Water District does hereby authorize issuance of the aforementioned Amendment to the Agreement with Hargis + Associates as described herein; and upon approval as to form by District General Counsel, it's execution by the District officers is authorized. Director Roger Yoh arrived at 6:00 p.m. during the following discussion. MATTER FOR CONSIDERATION 19. Alamitos Barrier Improvement Project: Award Contract No. AB to Best Drilling and Pump, Inc.: Amend Agreement with CH2M Hill for Additional Well Construction Design Services, and Revise Project Budget Principal Hydrogeologist Dave Mark provided an overview of the Alamitos Barrier Improvement Project (Contract No. AB ) and reported that there was no response to the initial Notice Inviting Bids for the contract issued on November 5, He advised that staff worked with professional drilling contractors to revise the technical specifications for the noise abatement 11

12 walls. Mr. Mark noted that staff contacted the Orange County Flood Control District (OCFCD) to obtain the required approvals for the modified specifications for the footings that are located in the County right-of-way. He stated the District reissued the Notice Inviting Bids for Contract No. AB on November 15, 2015 and three bids were received and reviewed by staff. Mr. Mark advised that Jensen Drilling Company (Jensen) was determined to be the apparent low bidder, however, a follow-up with Jensen staff was required due to bid informalities. He reviewed the informalities and advised that General Counsel, OCFCD, and staff resolved the issues and staff recommended the Water Issues Committee take an action to waive the bid informalities, award the contract to Jensen, amend the Agreement to CH2M Hill for an additional $91,328 for the additional design work required and increase the total project budget. Mr. Mark reported that a representative of Best Drilling & Pump gave a presentation at the Water Issues Committee meeting, and following that presentation the Committee took an action to reject the bid from Jensen as non-responsive and recommended awarding the contract to Best Drilling & Pump. Public Comment Best Drilling & Pump representative Mark Best stated his concerns with the bid submitted by Jensen and recommended the Board follow the recommendation of the Water Issues Committee and reject the bid by Jensen and award the contract to Best Drilling & Pump for $11,947,965. Jensen representative Jerry Jensen reviewed the company's history and well drilling experience. He advised that the Jensen total project bid in the amount of $9,984,335 was accurate and stated that his company was qualified and capable of completing the project as defined in the contract documents and within the quoted price. Jensen representatives Ron Branchard and Scott Weaver provided their project management qualifications and extensive work experiences. Jensen representative Chris Humphries addressed the clerical errors in the bid and advised the mistakes were a result of an internal miscommunication, noting however the bid was solid and the total quoted price of the project was accurate. The Board discussed the information presented during public comment and asked District staff if they stood by their original recommendation to award the contract to Jensen Drilling Company. Mr. Mark advised that General Counsel, staff, and OCFCD resolved any concerns about the bid informalities and determined that Jensen Drilling Company was qualified to perform the work. He advised that staff recommends the Board waive the bid informalities, award the contract to Jensen Drilling Company for $9,984,335, amend Agreement No with CH2M Hill, and adjust the budget accordingly. The Board then took the following action. Upon motion by Director Anthony, seconded by Director Reyna, the following resolution was unanimously adopted [9-0]. Ayes: Anthony, Bilodeau, Dewane, Flory, Green, Nguyen, Reyna, Sheldon, Yoh Absent: Sidhu 12

13 I 0/21/15 RESOLUTION NO AW ARD ING CONTRACT NO. AB , ALAMITOS BARRIER IMPROVEMENT PROJECT TO JENSEN DRILLING COMPANY, AMENDING AGREEMENT WITH CH2M HILL FOR ADDITIONAL WELL CONSTRUCTION DESIGN SERVICES, AND REVISING PROJECT BUDGET WHEREAS, a Notice Inviting Bids for Contract No. AB , Alamitos Barrier Improvement Project was published in The Orange County Register on August 3, 2015; and WHEREAS, the following bids were received and opened on September 15, 2015: Jensen Drilling Company Best Drilling and Pump, Inc. Layne Christensen $ 9,984,335 $ 11,947,965 $ 15,025,299 WHEREAS, District staff has advised that informalities in the Jensen Drilling Company bid proposal were identified and staff requested and received written statements from Jensen Drilling Company addressing the informalities, clarifying clerical errors and providing additional work and drilling qualifications, and staff has therefore recommended waiving the bid informalities and award of said contract to the lowest responsive bidder, Jensen Drilling Company, in the amount of $9,984,335; and WHEREAS, the staff has recommended issuance of Amendment No. 1 to Agreement No to CH2M Hill for an amount not to exceed $91,328 for required design changes within the project's scope of work; and WHEREAS, the staff has further recommended an increase to the Alamitos Barrier Improvement Project budget in the amount of $739,614 for a revised total capital project budget of $15,491,614; 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. AB , is received and filed. Section 2: Informalities and clerical errors in the bid proposal submitted by Jensen Drilling Company are waived. Section 3: The lowest responsive bid of Jensen Drilling Company in the amount of $9,984,335 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 an Agreement on behalf of the District, in a form heretofore approved by this Board, with Jensen Drilling Company pursuant to the terms of its proposal. 13

14 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 bidder 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 to CH2M Hill is authorized for an amount not to exceed $91,328 for required design changes to the project's scope of work. Section 8: An increase of$ 739,614 to the Alamitos Barrier Improvement Project budget for a total capital project budget of$ 15,491,614 is approved. INFORMATIONAL ITEMS A. Water Resources Summary General Manager Markus noted the Water Resources Summary was contained in tonight's packet. B. Groundwater Remediation Monthly Status Update Chief ofhydrogeology Roy Herndon gave a brief overview of the groundwater remediation activities in the North and South Basins during the month of September. C. Sustainable Groundwater Management Act: Compliance Options Recharge Planning Manager Adam Hutchinson gave a brief presentation on compliance options within the Sustainable Groundwater Management Act and reviewed the groundwater basin boundaries as determined by the Department of Water Resources (DWR). He advised that staff reviewed DWR Bulletin 118 and submitted revised boundaries that staff felt more accurately reflect the District's hydrogeologic conditions and political boundaries of the groundwater basin. Mr. Hutchinson noted that staff would provide periodic updates as the Sustainable Groundwater Management Act is implemented and as Groundwater Sustainable Agencies are formed. D. Santa Ana Watershed Project Authority Activities There was no discussion of this item. E. Committee/Conference/Meeting Reports The Board reported on the following Committee meetings and noted the Minutes/ Action Agendas were included in tonight's Board packet. October 08 - Communication and Legislative Liaison Committee October 12 - G WRS Steering Committee October 14 - Water Issues Committee October 15 - Administration and Finance Issues Committee 14

15 VERBAL REPORTS Director Flory reported that she and members of the City of Fullerton and City of Anaheim staff met with Environmental Protection Agency staff for a discussion on the NCP process and advised that Governor Brown is very involved and the process appears to be collaborative and inclusive. Mr. Markus advised that OCWD is in discussions with Metropolitan Water District for firm untreated water purchases via Municipal Water District of Orange County. He noted that staff will present a status update on Forebay operations at the November 4 Board meeting. ADJOURNMENT TO CLOSED SESSION The Board adjourned to Closed Session at 7:05 p.m. as follows: CONFERENCE WITH LABOR NEGOTIATORS [Government Code Section ] OCWD designated representative: Stephanie Dosier Employee Organization: Orange County Employee Association RECONVENE IN OPEN SESSION The Board reconvened in Open Session at 7: 15 p.m. whereupon General Counsel Kuperberg announced that no reportable action took place in Closed Session. I Jarvce Durant, District Secretary I / 15