[00:26] Speaker 1: Good evening and welcome to the July 1, 2026 regular meeting of the Contra Costa Water District Board of Directors. First item on the agenda is roll call. When I call your name, please indicate if you're here for the record. Director Fitzpatrick has an excused absence this evening. Director Holdaway.
[00:43] Speaker 2: Here.
[00:44] Speaker 1: Vice President Martinez.
[00:45] Speaker 3: Here.
[00:46] Speaker 1: Director Young.
[00:47] Speaker 4: Here.
[00:48] Speaker 1: General Manager Rachel Murphy.
[00:49] Speaker 5: Here.
[00:50] Speaker 1: Legal Counsel Doug Cody. Here. District Secretary Veronica Sepulveda.
[00:55] Speaker 6: Here.
[00:55] Speaker 7: All right.
[00:56] Speaker 1: Nye. President Avil? I'm here as well. Next item on the agenda is the Pledge of Allegiance. I've asked Director Young to lead us in the pledge this evening
[01:06] Speaker 2: to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with
[01:15] Speaker 8: liberty and justice for all.
[01:21] Speaker 1: Thank you, Director Young. Next item on the agenda is the adoption of the agenda. General Manager Rachel Murphy. Are there any changes to the agenda?
[01:30] Speaker 5: Yes, we did make one update to the board activities calendar, which IS Agenda Item 1A. Revised calendars were provided to the board, posted online and are available in the
[01:40] Speaker 3: back of the room.
[01:41] Speaker 1: Very well, Board members. If there are no oppositions or comments, the board will adopt the agenda by rule and with that amendment. All right, we'll now move to the public comment section of the agenda. This section is provided so that the public may express general comments on any item not already listed on tonight's agenda for up to three minutes in length for an individual, or up to six minutes in length if representing a group. If you'd like to provide comments. To provide comments on matters listed on the agenda, please complete a blue card located at the back of the boardroom and submit it to the District secretary to be called when that specific item is being considered. Written comments that were received by 4:30pm were provided to each director, and copies are available to the public at the boardroom entrance. Are there any members of the public in the boardroom who would like to provide public comment on items not listed on the agenda? If so, please come to the podium now.
[02:30] Speaker 2: All right.
[02:31] Speaker 1: Seeing none now, we're going to adjourn to a meeting of the Contra Costa Water Authority. The time is now 6:32pm will now adjourn to the annual meeting of the Concaster Water Authority. First item on the agenda is the call to order. Welcome to the July 1, 2026 Board of Directors meeting of the Contra Costa Water Authority. First item on the agenda is roll call. Since the same directors serve on both the Contra Costa Water District and the Water Authority Board, the record will indicate that Director Holdaway, Vice President Martinez, Director Young and I, President Avila of the water Board. Water Authority Board are in attendance. Next item on the agenda is the adoption of the agenda. General manager Rachel Murphy. Are there any changes to the agenda?
[03:14] Speaker 5: No changes.
[03:15] Speaker 7: Very well then.
[03:15] Speaker 1: The board will adopt the agenda by rule. Next item on the agenda is public comment. This section of the agenda is provided so that the public may express general comments for up to three minutes in length on any item within the Contra Costa Water Authority's jurisdiction that is not already listed on the agenda. Are there any members of the public in the boardroom who would like to provide a public comment? If so, please come to the podium now.
[03:40] Speaker 7: Very well.
[03:40] Speaker 1: Seeing none, we'll go now. Move to the consent calendar, which is noted here the approval of the July 2, 2025 meeting minutes. This item has been reviewed by the general manager and to her knowledge there is no opposition to the action. Board members, do you have any questions or comments on this item?
[03:56] Speaker 3: All right.
[03:56] Speaker 1: Seeing none. Are there any members of the public who would like to provide a public comment on this item? If so, please come to the podium now.
[04:04] Speaker 7: All right.
[04:04] Speaker 1: Seeing none. Is there a motion to approve the 07-02-2025 meeting minutes?
[04:09] Speaker 3: So moved.
[04:10] Speaker 2: A second.
[04:11] Speaker 1: All right, so we have a motion by vice President Martinez and a second by Director Holdaway. We have the motion before the board for consideration. Is there any public comment regarding the motion before being considered by the board this evening? If so, please come to the podium now. Seeing none. Directors, all those in favor say aye.
[04:32] Speaker 3: Aye.
[04:33] Speaker 1: Motion carries unanimously. The time is now 6:34. This meeting of the contrast for water authority is adjourned. We will now return to the regular board meeting. The next section of the agenda is the review of the consent calendar items 1 through 9, which are noted on the agenda. These items have been reviewed by the general manager and to her knowledge, there is no opposition to the action. The items can be acted on in one consolidated motion as recommended or may be removed from the consent calendar for separate board action at the request of any person. Any person. Board members, do you have any questions or comments on these items?
[05:12] Speaker 4: All right.
[05:12] Speaker 1: See none.
[05:13] Speaker 7: All right.
[05:13] Speaker 1: Are there any members of the public who would like to provide a public comment on any of the items on the consent calendar? If so, please come to the podium now. All right, Seeing none, board members, is there a motion on consent items one through nine?
[05:27] Speaker 2: I'll move approval.
[05:28] Speaker 4: I'll second.
[05:29] Speaker 1: All right, so we have a motion by director Holdaway and a second by director Young. We have a motion before the board for consideration. If there's any comment regarding the public regarding the motion, please come to the podium now. Seeing none. Directors, all those in favor say aye.
[05:44] Speaker 3: Aye.
[05:45] Speaker 1: Motion carries. Unanimously. We'll now move to the action section of the agenda. First Item is number 10. To authorize a three year extension for agreements with Principal Financial Group for retirement plan, trust, investment manager and trustee banking services, and for other post employment benefits. Trust, investment manager and trustee banking services for fiscal year 27 through fiscal year 29. Subject to board of Director approved budgets for each year fiscal year. General Manager Rachel Murphy.
[06:15] Speaker 5: All right, I'll walk through a couple of slides related to this item. The next one, thank you. So the Contra Costa Water District utilizes services to support the retirement plan and other post employment benefits or OPEB management. And that includes both investment management services and trustee services. The service provider works in conjunction with Contra Costa Water District's plan administrator and that's Assistant General Manager Jeff Quimby. And the service provider provides reports each quarter to the retirement and OPEB committee meetings, which two of the board of directors participate in as observers. So principal was selected for both services following a competitive selection process in 2018. That original approval was a five year contract. It was previously extended through fiscal year 26. Fiscal year 2026. And the requested contract extension this evening is proposed in recognition of their effective investment performance and excellent customer service they've been providing to us during the contract duration. The extension does include a reduction in fees from 9 basis points to 8 basis points. About 11% reduction. And that really reflects the growth in the market value of the investments under management. Next slide, please. So the recommended action is as noted for a three year extension of the agreement. So it's principal for the noted services.
[07:46] Speaker 4: Great.
[07:47] Speaker 1: Thank you. General Manager Murphy. Regarding that presentation, board members, do you have any questions or comments regarding the presentation? Yes, Vice President Martinez.
[07:54] Speaker 3: Yeah. As one of the observers to this committee, I do want to concur with general manager's observation about the, you know, the time that the folks come and take to present to the committee the investments portfolio that they manage. And they're very detailed in their presentations and they really help the committee understand what's happening with their investments and how they are really aligning with the policy that we make for them as a board. So I do recommend this action.
[08:28] Speaker 4: Great.
[08:29] Speaker 1: Thank you. Vice President Martinez, any other board question or comment?
[08:33] Speaker 8: No.
[08:34] Speaker 1: Okay. Is there any member of the public like to provide a public comment regarding this presentation? If so, please come to the podium now.
[08:43] Speaker 7: All right.
[08:43] Speaker 1: Seeing none, board members, is there a motion to authorize the agreements.
[08:47] Speaker 7: I move approval.
[08:48] Speaker 3: Second.
[08:49] Speaker 1: So we have a motion by director Young and a second by vice president Martinez. We have a motion before the board for consideration. Is there any public comment regarding the motion before the board for consideration? If so, please come to the podium now. See None. Board members, all those in favor say aye.
[09:06] Speaker 3: Aye.
[09:07] Speaker 1: Motion carries. Unanimously. We'll now move to agenda Item number 11. Item number 11 is to authorize execution of an agreement with public policy Advocates for government relations services in an amount not to exceed 157,000 for fiscal year 27. General Manager Rachel Murphy.
[09:24] Speaker 5: All right, this item is on the action calendar not because of the size of the agreement, but just the nature of the services that are provided through this agreement. And we utilize external consultant services to provide representation and advocacy with the state legislature and state agencies. And the specialized expertise provided is of great importance and value to the water district. Next slide, please.
[09:52] Speaker 8: Sorry.
[09:52] Speaker 5: Public policy advocates has successfully represented Contra cost water district in Sacramento since 2006. They ensure that we are engaged in legislation and policy decisions impacting the water industry and Contra Cost Water district in particular. In the upcoming fiscal year, Public policy advocates will amplify the leadership that we are taking on golden mussels and also continue to identify opportunities for canal replacement funding and will be assisting us in meeting our kind of increased focus on engaging legislators both in Sacramento and in their district offices. Next slide, please. So the recommended action this evening is to authorize execution of the agreement with public policy advocates in the amount shown.
[10:47] Speaker 1: Great. Thank you for that presentation. Board members, do you have any questions or comments on this recommendation?
[10:53] Speaker 4: All right.
[10:53] Speaker 1: Is there any public comment regarding the presentation we just heard? If so, please come to the podium now. Seeing none. Just want to, I would say, completely concur with general manager's recommendation. They've done a really great job in terms of keeping us engaged on legislation. Have been really much appreciated. So, board members, is there a motion to authorize the agreement?
[11:16] Speaker 3: I'll second.
[11:17] Speaker 1: We have a motion by director Holdaway and a second by vice president Martinez. We have a motion before the board for consideration. Is there any public comment regarding the motion? If so, please come to the podium now. All right. Seeing none. Directors, all those in favor say aye. Motion carries unanimously. We'll now move to agenda item number 12, which is in two parts. It's to authorize agreements for Labor Council 12A is to authorize execution of agreement with Liebert Cassidy Whitmore for labor council services in the amount of $100,000 in fiscal year 27 with an option for continued services in the amount of $100,000 in fiscal year 28 for a total amount not to exceed 200,000. And item B is the authorized execution of an agreement with Burke, Williams and Sorenson for label council services in the amount of 50,000 in fiscal year 27 with an option for continued services in the amount of $50,000 in fiscal year 28 for a total amount not to exceed $100,000. General Manager Rachel Murphy.
[12:20] Speaker 5: All right, thank you. So again, this item is on the action calendar not because of the size of the agreements, but really the type of service that's being provided. We typically handle our legal services as action items and we utilize external labor. Council for specialized labor and employment. Legal. Legal services. Liebert, Cassidy, Whitmore and Burke, Williams and Sorenson were selected through a competitive request for proposal process in 2023. And we determine which service provider to utilize throughout the year based on the type of expertise that we need. Liebert, Cassidy Whitmore provides services to us in support of labor negotiations, grievances arbitration and litigation. And Burke, Williams and Sorenson provides day to day employment law guidance and workplace investigations when they're necessary. And so the recommendation this evening is to execute the agreements with both firms in the amount shown for the upcoming two year periods.
[13:28] Speaker 3: Great.
[13:28] Speaker 1: Thank you for that presentation. Board members, do you have any questions or comments? Is there any member of the public like to provide a public comment regarding items 12a and 12b? If so, please come to the podium now. All right, seeing none board members, is there a motion for to authorize the two agreements?
[13:46] Speaker 2: I'll move approval.
[13:47] Speaker 4: I'll second.
[13:49] Speaker 1: So we have a motion by director Holdaway and a second by director Young. We have the motion before the board for consideration. Any member of the public like provided public comment regarding the motion, please come to the podium now. All right, seeing none directors, all those in favor say aye.
[14:04] Speaker 3: Aye.
[14:04] Speaker 1: Motion carries. Unanimously. We'll now move to agenda item number 13. And before we announce the item, I would like to ask legal counsel to recuse himself as this item pertains to his law firm.
[14:15] Speaker 6: Be happy to do that. And just for the record, BKS law firm is a source of income to me. And to avoid any appearance of a conflict, I will recuse myself and remove myself from the meeting room.
[14:27] Speaker 1: Thank you, Doug. Okay, Legal counsel has left the room. Item 13 is to authorize execution of an amendment to the legal services agreement with BKS Law Firm in the amount of $1,541,000 for fiscal year 27 and 1,498,000 for fiscal year 28 for a total amount not to exceed 3,039,000 through fiscal year 28. General Manager Rachel Murphy.
[15:00] Speaker 5: All right, so this item is on action both because of the amount of the agreement, but also given the nature of the services provided. The Contra Costa Water District retains the services of a law firm as general counsel who provides a variety of advice to CCWD staff, including issues related to water law, public agency laws and regulations, contract law, real property law matters, and other areas that may arise. And the BKS law firm was also competitively selected through a request for proposal process in 2023. And this contract amendment is proposed in recognition of the strong performance and legal support that we received through the law firm. And so the recommended action is to authorize the agreement in the amount shown
[15:51] Speaker 1: with the great General Manager Rachel Murphy. Thank you very much for that presentation. Board members, do you have any questions or comments regarding this presentation? I simply want to echo my sentiment that I think we have been very well served by pks having been put through the paces in a whole variety of different issues regarding their support. They've done an absolutely outstanding job. And so it's very honorable. It's a great honor to make the recommendation move forward with this in a very big way. Very well. Are there any member of the public who would like to provide a public comment regarding this authorization? If so, please come to the podium now. All right, board members, is there a motion to authorize the amendment to the agreement?
[16:39] Speaker 4: I move approval.
[16:40] Speaker 3: Second. Okay, so.
[16:42] Speaker 1: So we have a motion by Director Young and I heard Vice President Martinez for second. So we have a motion before the board for consideration. Is there any member of the public that would like to provide a comment regarding the motion? Please come to the podium now.
[16:58] Speaker 9: All right.
[16:58] Speaker 1: Seeing none to all those in favor, say aye.
[17:01] Speaker 3: Aye.
[17:02] Speaker 1: Motion carries unanimously. And now we're going to ask our legal counsel to return back to the boardroom. Let the record show that our legal counsel is now back and seated in the boardroom. We'll now move to agenda Item number 14. Item number 14 is in two parts. Also 14 is the California Special Districts Association, CSDA Bay Area Network. 2026 board election for seat C is in Charlie. Item A is to designate General manager Murphy as CCWD's voting representative for the CCD CSDA Bay Area Network, seat C for the 2027-2029 term. And item B is to authorize the voting representative to cast CCW's vote for Vice President Martinez. General Manager Rachel Murphy.
[17:51] Speaker 5: All Right. Still me.
[17:55] Speaker 1: Good to have you back.
[17:57] Speaker 2: Thanks.
[17:58] Speaker 5: No slides this time.
[17:59] Speaker 6: Okay.
[18:00] Speaker 5: So, as noted, this pertains to the election, the 2026 board election for SEATC on the California Special Districts Association, Bay Area Network. Vice President Martinez is seeking reelection to seat C on the Board of directors for CSDA. And on March 18, the board of Directors, CCWD Board of Directors approved the nomination of Vice President Martinez as a candidate. During his current term with csda, Vice President Martinez has delivered considerable, considerable value for both CSDA and Contra Costa Water District through strong engagement in state regulatory and legislative activities. He has served as CSDA's secretary in 2025 and is currently serving as CSDA's treasurer. So the recommended action for the board is to designate me as your voting representative and if approved, to direct me to cast CCWD vote for Vice President Martinez.
[18:58] Speaker 4: Great.
[18:58] Speaker 1: Thank you very much. General Manager Murphy, are there any board comments regarding the recommendations before the board for consideration?
[19:06] Speaker 2: I just want to thank Vice President Martinez for serving us so well with csda. And I happily support this motion.
[19:13] Speaker 4: And I want to add, I also happily support this. He has represented CCWD exceedingly well. So I thank you for that.
[19:22] Speaker 1: You took the words right out of my mouth. Done an absolutely exceptional job. Great job representing us being on that csda. You've done an incredible job. And it's also an honor to support you in regard to both items before the board for consideration.
[19:37] Speaker 3: Well, I appreciate the support from the board from the very beginning, and I will continue to do my best in that position. So thank you so much.
[19:45] Speaker 1: All right, are there any members, any members of the public who would like to provide a comment regarding our president, this presentation? If so, please come to the podium now. All right, seeing none board members, is there a motion to designate the voting representative and authorize a representative to cast their vote for Vice President Martinez in the CSDA election?
[20:04] Speaker 2: I'll move approval and I'll second.
[20:08] Speaker 1: So we have a motion by Director Holdaway and a second by Director Young. We have the motion before the board for consideration. If there's any public comment, please come to the podium now. Three regarding this motion. All right, Seeing none directors, all those in favor say aye.
[20:22] Speaker 6: Aye.
[20:23] Speaker 1: Motion carries unanimously. And congratulations and good luck.
[20:26] Speaker 3: Thank you.
[20:26] Speaker 1: All right, we'll now move to agenda. Item number 15 is in two parts again, annual investment policy review. Item A is to conduct the annual review of Contra Costa Water District's investment policy as provided under chapter 7.16 of the Code of Regulations pertaining to fiscal management. And item B is to adopt resolution number 26 018, amending chapter 7.16 of CCWD's Code of Regulations to reflect recent changes to the California Government Code. General Manager Rachel Murphy all right, our
[21:00] Speaker 5: next presentation this evening is by Nicole Segoski, our Accounting Manager. She is here following the annual review of our investment policy and the results of that review were discussed at the May Finance Committee meeting. There are two recommended changes to the investment policy which Nicole will review as
[21:21] Speaker 9: part of her presentation.
[21:23] Speaker 1: Nicole, how are you?
[21:24] Speaker 8: I'm well, thank you.
[21:25] Speaker 1: Good to have you here.
[21:25] Speaker 2: Thank you.
[21:27] Speaker 8: Good evening, President Avila, Members of the Board, I'm here tonight to present the annual review of CCWD's investment policy policy and the proposed dates. The objectives of the investment policy are presented on the slide before you in the order of importance. In addition to ensuring CCWD's funds are secure, the policy provides us with the liquidity to meet our obligations such as debt service payments while maximizing our rate of return. The Investment Policy was established on July 1, 1996 and remains in full compliance with the California government code 53646. The policy outlines who has the authority to invest funds for ccwd that would be the Director of Finance and then our investment advisors, PFM Asset Management. It also outlines the minimum acceptable ratings for each of the investments as well as the types of investments we can hold, the criteria for selection, and the maximum percentage of each investment type that is allowed in the portfolio. The policy does not govern the investment of funds for the Retirement Trust, the other Post Employment Benefits Trust, and the Deferred Compensation Plans. Those are handled separately. The reviews conducted in accordance with the California Government Code, which mandates that the governing body of a public agency annually review their investment policy and that any proposed changes be reviewed and approved by that governing board. CCWD must also provide quarterly investment reports and clear documentation of the authorized investments. Based on the analysis and recommendations by PFM Asset Management as well as recent changes to the the California Government Code, two amendments are recommended for Board consideration this evening. The first proposed change incorporates Senate Bill 858, which amends the California Government Code to increase the maximum maturity for prime quality commercial paper from 270 days to 397 days. This update does not require CCWD to invest in longer term commercial paper, but instead it provides added flexibility to manage liquidity and investment maturities under changing market conditions. The second proposed change, recommended by PFM asset management, broadens CCWD's authority to invest in eligible local government investment pools established through joint powers authorities. In addition to LEIF and CAMP while maintaining consistency with the California Government Code investment requirements and CCWD's investment objectives. Any amendments to the investment policy must be adopted by the Board of Directors by resolution. And so the recommended actions before the Board tonight are to conduct the annual review of CCWD's investment policy as provided under Chapter 7.16 of the Code of Regulations Pertaining to Fiscal Management, and to adopt resolution number 26 018, amending chapter 7.16 of CCWD's Code of Regulations to reflect the recent changes to the California Government Code. And this concludes my presentation. I'm happy to answer any questions.
[25:00] Speaker 1: Thank you, Nicole, for that presentation. Appreciate it very much. I also appreciate the report was very thorough as well. That was included with the agenda. Board members, do you have any questions or comments regarding the presentation? No. Is there any public comment regarding the presentation we've heard this evening? If so, please come to the podium now. All right, See? None. Board members, are there any.
[25:20] Speaker 3: Let's see.
[25:21] Speaker 1: Is there a motion to adopt resolution number 26 018?
[25:25] Speaker 3: So moved.
[25:26] Speaker 2: I'll second.
[25:27] Speaker 1: All right, so we have a motion by Vice President Martinez and a second by Director Holdaway. We have a motion before the Board for consideration. Is there any public comment in regard to the motion? If so, please come to the podium now. Seeing none directors, all those in favor say aye.
[25:44] Speaker 3: Aye.
[25:44] Speaker 4: Great.
[25:45] Speaker 1: Good job, Nicole. All right, we'll now move to Jeddah. Item number 16. Item 16 is to authorize execution of an agreement with Paymentis for online billing and credit card payment services in the amount of 775,000 for fiscal year 27, with an option for continued services in the amount of $800,000 for fiscal year 28 for total amount not to exceed $1,575,000. General Manager Rachel Murphy.
[26:12] Speaker 5: All right, so our final presentation this evening is by Assistant General Manager Jeff Quimby. As noted, this item pertains to authorizing an agreement for online billing and credit card payment services. A competitive procurement process for these services was recently conducted and concluded this spring. Tonight's presentation will provide a brief background on our online bill payment policy and our plans to evaluate this policy to determine if any changes are warranted.
[26:40] Speaker 3: Great. Thank you.
[26:42] Speaker 1: Jeff, how are you?
[26:43] Speaker 10: I am doing well. President Avila, it's good to see you. And good evening, members of the board. I wanted to start the presentation with a brief history of CCW's online bill payment process program. In 2009, CCWD added online bill payment as an option for our customers. This predominantly consisted of the easy pay program that allowed customers to pay their bill online using their bank account. In 2011, we expanded that service through a contract with Paymentis to allow our customers to pay online and by telephone utilizing a credit card. In order to utilize the credit card, our customers were required to pay a transaction fee in order to use the credit card. During the period 2011 to 2019, the top complaint we received from customers was the fact that they had to pay a transaction fee for using a credit card and in 2019, the board approved assuming cost of online credit card process processing fees as a customer enhancement. At that time, it was estimated that those fees would cost $120,000 a year. Since 2019, the use of online payments as well as credit cards has significantly increased as well as the transaction cost. To support that last year because of the rising cost, we initiated a policy review which was shared with the Finance Committee that include looking at trends as well as what our neighboring agencies are doing as well as alternatives and I'll be presenting some of that analysis with the recommended action tonight. This chart shows the history of the annual transaction charges incurred by CCWD in fiscal year 20. When the program began, we were seeing about 3,30,000 transactions annually through the online portal at a cost of about $150,000. As you can see, those costs have significantly increased this year. We're projecting over 210,000 transactions through the online portal. Nearly 40% of our bill payments occur online now with a transaction cost of about $700,000 for this year. So significant growth since the District began assuming the credit card fees, which initiated the policy review. The other item we identified through the trend analysis was looking at use throughout our service area and we found that the credit cards are used throughout our service area. Evenly distributed. There's no one area or zip code that uses credit cards more than the other. It's fairly evenly distributed across our service area. The other thing we looked at was what other agencies are doing with credit card fees. This chart shows a list of 15 agencies that we've been monitoring that provide water service. Currently, of the 15, only five are charged customers a transaction fee related to paying their bills. So roughly a third charge a fee. The other two thirds considered a cost of doing business and absorb those fees similar to what CCWD is currently doing. Of the agencies that charge a fee, two of them are based on a percent, 3% and 3.6% and three agencies charge a flat fee ranging from a dollar to 350. The agencies that charge a flat fee of a dollar and $1.75 use a split cost model. They charge the customer a dollar for instance, and then any cost above that are picked up by the agency. Over time we have seen the number of agencies that charge a transaction cost to customers dwindle or reduce. More and more agencies are going to or are leaning towards absorbing those fees. Fairly recent, one agency on this list decided to begin charging customers. They received significant customer complaints and they ended up revising their policy and reverting to absorbing those fees. So with our request for proposals for these services we included three cost models for the debit and credit cards and one was the status quo situation where CCWD would continue to pay the entire fee. The other alternative is where the customer pays the entire fee and then lastly a split cost model where the customer pays a flat $2 per transaction and CCWD would pick up any remaining costs. We received four proposals for these services. In general, the CCWD paid alternative had lower overall transaction costs. Two of the firms proposed lower transaction costs if the district continued to pay that fee. And the rationale there there's less administrative burden for them if the fee comes from the district and there's also greater assurance of that payment than dealing with a multitude of customers. Paymentous was recommended for selection based on cost, experience and capabilities and the transaction cost for the three alternatives are shown here on the slide. For CCWD to continue to pay the fee, the transaction costs are estimated at $690,000 per year. If the customers were paid to pay the entire fee, that cost would increase to $890,000 a year. That would be the customers paying that fee instead of the district, but the overall transaction cost would would increase. For a split cost model, the total transaction cost would be $770,000 and those costs would be roughly split 5050 between the district and customers. So no changes to the policy of CCW absorbing the transaction cost is recommended at this time. The Board's approval of this item will will not change our current practice of absorbing those fees. However, the contract does include the ability to change the cost model should the Board decide to change the policy at some point in the future to have customers to begin to pay a portion or all of that fee. Further review of this issue is scheduled for discussion at the November 2026 Finance Committee. Looking at the fees themselves this chart shows a comparison of the fees that were in the District's previous contract with the proposed fees for instant payment alternatives like PayPal and Venmo. The transaction cost is reducing from $2.50 per transaction to $2. Similarly, credit cards are reducing from $2.50 per payment to 2 $2 per payment. Non qualified credit cards, those are the reward cards, miles and points, those carry higher transaction fees which are passed on to the district. And those are 2.85% of the payment. And that structure is proposed to remain the same under the new contract Automated Clearinghouse or ACH payments. There's reduction from $0.50 to to $0.40 per transaction for scheduled payments and a reduction from $1 to 75 for one time payments. As I mentioned earlier, 40% of our bills are currently paid through our online portal. And this new proposed fee structure would reduce our estimated transaction cost by approximately 9%. So in terms of fiscal impact, the authority and budget for credit card processing fees for fiscal year 27 is $775,000 and $800,000 for fiscal year 28. And of course, the actual costs are dependent on customer utilization of those services. And the recommended action before the board tonight is to authorize execution of an agreement with paymentis for $775,000 in fiscal year 27 and $800,000 in fiscal year 28. And that concludes my presentation. I'm happy to answer any questions.
[35:30] Speaker 1: Thanks, Jeff, for that presentation. Board members, you have questions or comments, go ahead.
[35:35] Speaker 3: Vice versa. Martinez, I'm glad that this has come full circle from the Finance committee to the board. I did have questions when this came up because I do chair the finance committee and I'm glad that we got more information for the full board to see what's happening with these payments. I think one of my recommendations at the committee meeting was to educate our customers on how which card they use impacts fees not only to them, but also to the district to see if we can get a reduction in the increased fees that are accumulated by using either a card that uses miles or, or, you know, or additional fees that would otherwise not be borne by us or by the customer if they knew what they're being charged. So I didn't see that as part of the presentation, but I believe maybe it's coming back in November if we decided to change the policy. That's the plan. Right. Okay. Yeah. I mean, so thank you for bringing this up to the full board. And you know, I got the answer to my questions, but I'm just still asking about the education portion of the recommendation.
[36:52] Speaker 5: Great.
[36:53] Speaker 1: Any other board comment? I did want to. I did have a couple of suggestions here, Jeff. I know this is going to come back to the finance committee and ultimately back to the board at one point or other. I think it would be since we have operated in a scenario where we were not absorbing those costs and we've been operating since we operated those costs and not looking at Covid. But I was wondering to see what our late payment structure was like before we started absorbing those fees versus late payments. What were they like once we started absorbing, allowing credit card transactions to be absorbed by the District? I think when you look at the cost of the district is it's a very important, interesting argument, I think, for the board to consider the policy, if we can demonstrate or if there's some level of quantification of the fact that there were less late payments by virtue of people being able to use their credit cards more liberally than the time where we were charging the cost, the fee directly to the customer, I think that would be a really worthwhile evaluation. The other thing that is pretty compelling about your presentation is, is the fact that you're talking about 240,000 transactions a year, even one or two dollars as a transaction charge, even with the additional charge by the firm that's being considered here, which still defray those costs not insignificantly in terms of the cost of the district. My concern is the trend line is very clear. There's no. I didn't see a change in the slope regarding the graphic you showed us. So I don't see that slowing down unless I miss something. Do you know if the trend is still staying pretty steady, that they're continuing to use those credit cards even more?
[38:40] Speaker 10: It has definitely in the past. Whether kind of we've reached a saturation point remains to be seen.
[38:47] Speaker 7: Yeah.
[38:49] Speaker 1: Again, I think if there's any way of getting some information too, from the various agencies that you listed, the ones that you characterized for us evening. I'm just curious to see if they've had the same issue where they, by being more forgiving on these transaction fees, have they seen a reduction of any kind in their late payments? So I don't know. I think. I think it makes for. It'll provide something interesting facts for, I think, the board to consider as we move you bring this back to the Finance Committee for consideration. That might be very useful information to see whether or not it's a good balance between what we're doing here. There is some benefit to the district by continuing to absorb these costs.
[39:29] Speaker 4: Yeah.
[39:30] Speaker 1: Vice President Martinez.
[39:31] Speaker 3: Yeah, I guess a million dollars is 1% of rates, right? Correct. So it's approaching 1% of rates. So do we pay these funds out of non revenue or do we pay them out of the. Could we be in, you know, in violation of Prop 218 by making these
[39:52] Speaker 1: payments out of turn to legal counsel.
[39:56] Speaker 6: Well, it's an interesting question because there is, you know, obviously not all of your customers do that, but I think the prevailing wisdom and opinion is that no, it would not violate Prop 218. It is, as the board president mentioned, a cost of doing business, you know, in the industry. And as you can see from the presentation, it is. The majority of local agencies will absorb those costs. So strictly a policy decision, not a legal decision, ultimately.
[40:27] Speaker 3: Okay.
[40:28] Speaker 5: And I'm looking over at Assistant General Manager Jeff Quimby. The payment for the credit card fees, we're paying that through rate revenue or. Yeah, rate revenue.
[40:39] Speaker 10: Rate revenue,
[40:43] Speaker 3: yeah. It's just more to come. I mean if everybody was paying with a card, it would be a large number. Right. So. And I'm sure other agents are facing the same kind of, you know, obstacle, particularly with the one that decided to go and charge and they got a feedback that eh, we don't want to do that because the blowback was pretty, was pretty hard. So I mean, I get it, but it's just, it's an interesting conversation to have at the Finance Committee the next time this rolls around before the, before it comes to the full board again.
[41:15] Speaker 1: I think the interesting element too, Vice President Martinez, is the fact that it's not just that the trend is getting higher too. It's that as we need to recover additional revenue, the cost is going to be, even if it stayed steady with rate increases, the we're going to be absorbing more costs because rates are increasing over time to pay for the investments we're making.
[41:39] Speaker 3: And I don't really know why customers use the card they use. I mean, it'd just be that it's happenstance, right. I'm going to use this card versus another card. So I'm not sure if they're really, you know, that's the education part, right. Do we really know how they're using the card and why?
[41:55] Speaker 1: Affinity. Right, affinity. Apparently, having looked at a little bit of the information in the past, affinity cards have become extremely popular. You know, associated with teams and airlines and you name it, they're everywhere, so prolific. So I think that's been part of the convenience. Now there's so many digital payments that are made within the economy, our US economy, It's remarkable. Now the concept of writing a check is becoming less and less possible.
[42:24] Speaker 3: We can't escape the fact that this is the trend, right. People are going to be paying with cards or with Phones. I mean, that's just the way it is. So it's just being able to manage through this period of time when this is going to cost ratepayers money. And at some point we have to let them know this is going to cost. This is 1% of rates.
[42:44] Speaker 4: My question for you, Director Martinez, what do you hope to accomplish? What do you think the education piece is going to accomplish? Because most people who use the. Their cards are using the cards because of the benefits to them. And I don't see that changing. I see that increasing over time. So I mean, what do you, do you think that they would actually reduce their benefits to themselves to cut the cost?
[43:09] Speaker 3: Well, I mean, so it depends because it's a split cost. Right. Because there's a certain cost borne by the. For the district and a cost for that for the customer to use that card. Right. So depending on what that cost ratio is, they may decide to use a different card because it may be more advantageous to them that it might be less money for them on the payment route versus maybe the mileage card may be more advantageous to them on this particular paying this bill. But, but the transaction, the cost for, for us might be higher or lower. You know, it's just, it's just the education portion that I'm more concerned about,
[43:46] Speaker 1: just maybe worth looking at. But not that we're going to change their.
[43:50] Speaker 4: No, ultimately I don't think, because the bottom line is what their benefit is for them.
[43:56] Speaker 8: Right.
[43:56] Speaker 4: Whatever card they select. But you know, at some point I think the costs are going to become prohibitive because it's clearly just going up. But I mean, that's for another conversation.
[44:07] Speaker 3: But I think it'll make us make a better decision though, if we know and we've done education and our customers at least have an idea of what this is costing the district.
[44:19] Speaker 5: And we could look at doing this in the context of an education around like our portal where they can get information about water use and then give information about online bill payment and the costs of the different options so that we're providing a complete perspective about, you know, the cost of the transactions that are born through the water rates that they are then paying.
[44:45] Speaker 3: So when they decide to use their card to pay the bill, does it, I mean, does it automatically tell them this is going to cost you this much money or the.
[44:55] Speaker 5: I don't think an alert pops up and says this is what the transaction fee is that CCWD is picking up for this credit card.
[45:02] Speaker 3: Yeah, listen to that.
[45:05] Speaker 1: I agree with Director Young I just having seen how the people use digital cards and Visa cards and mastercard cards, whatever, there may be a good worthwhile, meritorious, but I just think that they're going to continue to use those. That's why I was thinking, even if we don't try to recover the percentage, the 2.85%, et cetera, percentage that is that we're absorbing a transaction fee, I think is a little bit more palatable because again, they said a buck for transaction is, I think, okay, maybe that's a way of kind of perhaps starting to wean them a bit, you know, and ultimately we make it to the point where we've kind of stem the flow a bit and maybe later on we go back up, we go up to $2 a transaction fee to try to at least tailor feather in a solution, right. To make it at least cost neutral sometime in the future. But that trend line scares me, Jeff. That's the only concern I've got is that is a high slope.
[46:03] Speaker 2: When we first saw this in 2019, that 120,000 didn't seem to be deal, but that sure jumped pretty darn quick. I mean, it's only been a few years.
[46:11] Speaker 3: It'd be nice to know too, out of those folks that have reached a saturation rate like the other agencies that pay at all.
[46:17] Speaker 1: Right.
[46:18] Speaker 3: How many of those have reached kind of the peak and what does that look like for them as a percentage of their customers.
[46:28] Speaker 1: For future study?
[46:29] Speaker 3: Right. Yeah. I mean, this is come, you know, November, whenever we get to the point where we make a different decision.
[46:35] Speaker 1: I do want to thank the general manager and you, Jeff. I know that you've been working on this. This has been an issue that we've raised before. Really appreciate that you brought the current information before us. And I'm glad that the goal here is to bring this back. You know, the authorization of the agreement gives us flexibility, whatever decision we make later on to be able to, you know, implement whatever policy we may or may not change in the future. So at least you built in that flexibility and I appreciate that very much. So I will be supporting the recommendation. But I think you've got some really great questions that I think we look forward to at the next Finance Committee report to see how what may have been unearthed now by the questions you raised this evening. Any other questions or comments by the board?
[47:18] Speaker 10: No.
[47:19] Speaker 1: Any member of the public would like to provide a public comment regarding the presentation, please come to the podium now.
[47:27] Speaker 9: All right.
[47:27] Speaker 1: Seeing none board members, is there a motion to authorize the agreement so moved. So we have a motion by Vice President Martinez and a second by Director Young. We have a motion before before the board for consideration. Is there any public comment regarding the motion before the board? If so, please come to the podium now. All right, seeing none. Directors, all those in favor say aye.
[47:49] Speaker 3: Aye.
[47:50] Speaker 1: Motion carries unanimously. We'll now move to the reports for discussion portion of the agenda. Item 17 is committee meetings reports for discussion. There's item 17A is retirement and other post employment benefits committee post meeting report of May 28, 2020, 2026. And item 17B is the Finance Committee post meeting report of May 29, 2026. Board members, do you have any questions or comments on these reports? All right, seeing none. Move to item number 18, upcoming meeting requests and schedule changes. Do any board members have any meeting requests or schedule changes? All right, seeing none. We'll now move to the report section of the agenda. I'll start with our general manager, Rachel Murphy.
[48:34] Speaker 5: All right, so my main report this evening, I wanted to provide the board and the public with an update on a very busy weekend that quite a few folks around the water district had related to a leak that surfaced on Clayton Road. And there's some photos that are coming up. Thank you. So the first first picture just starts to paint the picture of what our team began grappling with. On Thursday, June 18, we had a leak reported at the intersection of Clayton and Matheson roads in Concord. After investigating, it was determined that the leak was on a 16 inch diameter asbestos cement main that brings water through this area up from Zone 2 and feeds our upper pressure zones. Next slide please. So around 2am, so that would be early Friday morning, a field event was initiated and about 1,000 customers were without water. Field crews started to do the investigation but were unable to locate and address the leak before storage in the upper pressure zone reservoirs became too low. So a very tough decision was reached by the team involved to stabilize the investigation location and resume pumping through this main up to the Bailey pump station and refill the upper zone reservoirs. And that operation continued through Friday and into early Saturday morning. So at that point the crews were dealing really with water management and starting to get resources in place so that when a longer window was available, they could get in there to investigate and then eventually address the leak. We brought on a traffic control contractor and ultimately had to close Clayton Road in both directions given the amount of water and the concern about the pavement condition. We also mobilized one of our on call construction and repair services contractors to support the event, both helping source materials as we were determining what materials we might need at the site, as well as providing some support through the repair, a decision was also made to activate the Emergency Operations Center. Director of Operations and Maintenance Matt Hobbs and Assistant General Manager Kyle Ocean Desco managed that activity with the engagement of over 30 folks through the course of the weekend. Next slide. Ah, but this, this looks good. Things are dry and we are now able to get in there and start identifying where the leak is and fixing it. So kind of our sweet spot. So around 1:30 in the morning on early Saturday morning, the upper zone reservoirs were sufficiently full so that a second shutdown was completed and then repairs started to follow. And I think next slide shows what we found. The Red Bull which apparently everyone was downing to keep going out there is shown to give perspective of the size of the hole in the pipe. But there was a hole in the blown gasket on the pipe. And so the team replaced about a 5 foot length of 16 inch pipe and then proceeded with return to service activities. So total time customers were out of service were about 21 hours. So all customers were back in service by 10pm on Saturday. Site restoration continued through Sunday and by late in the day on Sunday all lanes were open to traffic on Clayton Road. I think I have one more slide so that's additional work activities. And then water quality staff was working alongside the team all throughout this and confirmed all the sample results were negative on Monday. So everything proceeded as planned. I think that is good. Oh no, here that looks great, doesn't it? So that was a busy three days. So shifts of CCWD staff worked for 72 hours straight through that weekend to repair the leak. As noted, water service to about a thousand customers were impacted by during leak. We provided bottled water upon request. As we were getting through that event, we did have one injury of a contract employee with the traffic control contractor due to a driver that entered the traffic control zone. We are conducting a thorough after action assessment to look at our incident response as well as the resiliency of our infrastructure in this area and our reservoir operations. You know, these are opportunities to do a really comprehensive assessment to continue to prepare us for events in the future. And so the results of that assessment and associated recommendations will come to a future operations and engineering committee. We have notified our insurance provider SDRMA of the incident. We have received received three claims to date from businesses in this area due to business impact related to water loss. And we are continuing to work with the city of Concord on the final restoration that will be required in this area. This Week we are doing what I will consider temporary final paving, which gets, you know, better asphalt down in the area. But there are ongoing conversations about the extent of potential impact to other underground facilities that may have been undermined as water bubbled out of the street for the better part of a day. And then ultimately, since this was a freshly paved street, what the extent of the pavement restoration will be. So that work is still to come. But this was a beautiful sight when I got this picture in Washington, D.C. i was ecstatic. So, but a lot of, a lot of extensive long hours and considerable effort by many people in this room, led by Matt and Kyle, but a lot of efforts throughout the organization to get us to that picture. So that concludes my comments on this. My only other feedback for the evening is we are looking forward to giving back to the city of Concord. We are participating in their Fourth of July parade on Saturday. Saturday, yes. So 9:30 downtown Concord. We've got a team of ambassadors who will be out participating in that event. And that concludes my remarks.
[55:49] Speaker 4: Great.
[55:50] Speaker 1: Thank you, Rachel, for that discussion and thanks for the slideshow. We're looking forward to the, the reports you're discussing. I think it'll be helpful, a great learning experience. I really appreciate the work by staff working very strenuously during this whole incident. Please pass on our thank you to them for their dedication and getting that service restored as quickly as possible. So thank you for that report.
[56:14] Speaker 6: Doug Cody, I have no reports this evening.
[56:18] Speaker 3: Thank you.
[56:18] Speaker 1: That was legal counsel. Just for the record. Start. Go then board members, Director Holdaway, I
[56:25] Speaker 2: have no report tonight, but I do want to acknowledge Veronica. It is her last meeting with us and you have given us five wonderful years and I really appreciate it. We're going to miss you and good luck on what the future holds for you.
[56:40] Speaker 4: Great.
[56:41] Speaker 6: Thank you.
[56:41] Speaker 1: Vice President Martinez, June 22.
[56:44] Speaker 3: I met with carpenter's union business rep Chris Palomo. We talked about project labor agreements in general and the upcoming canal replacement program. His goal for the meeting, and I guess mine too, was just to talk about their interest in plas. And so that he also mentioned he doesn't want us to forget them during possible negotiations because they are no longer part of the building trades in the county. A couple years ago they had a falling out. And so whenever they negotiate PLAs, they actually negotiate separately. They have a better relationship right now with the building traits in the county. So they think it might be a positive thing in the coming year or two. But he just wanted to have a meeting just to make sure that we, we're aware that they are there and willing to have a conversation should we have a PLA in place for the Kanawh project. And that's all that I have. But I also wanted to echo the words of Director Holdaway, thank you Veronica for five years of service and wish you the best in your journey.
[57:54] Speaker 1: Thank you Professor Martinez, Director Young, I
[57:57] Speaker 4: have no report, but I also run a say that I'm going to really miss. We're going to all really miss you. I wish you the best in your next endeavor, but you will be missed and thank you for all your hard work.
[58:12] Speaker 9: Great.
[58:13] Speaker 1: Thank you. Director Young, I have attended the following meetings on June 4 at ACWA board of Directors Workshop where we worked on the vision Aqua Vision. June 5 AQA executive committee meeting and board of directors meeting. June 8 ACWA board officers weekly call. June 9 Had a meeting with the General Manager and had a Speaker's Bureau presentation to the Pleasant Hill Chamber of Commerce Government Affairs Committee, which was really a great little presentation. Talked about who we were working with and it was nice to have Director Fitzpatrick there as well. June 12 the Aqua State Ledge Committee and East Bay Leadership Council council board meeting. June 13 attended the Central San 80th anniversary event which was a fantastic experience. It was great. Always wonderful to spend some time with our Central San Board of Directors and their staff. It was a lot of fun and I'm sorry but I missed the challenge that was given before me. I just could not find my fellow President to continue that event. So anyway, I send my apologies to Central SAND regarding that challenge. Perhaps at the next anniversary big event we'll try that again. Maybe not
[59:28] Speaker 4: I had envisioned actually Director,
[59:34] Speaker 1: I wasn't feeling quite up to par. June 15 had a meeting with the general manager. June 16 had ACWA protect Affordability Working Group and an Aqua Board officers weekly call. June 17 Aqua modernized water Management Working Group and CSDA Live webinar for my SBA 27 fiscal and financial training. Compliance was good training. It was like going back to MBA school all over again. So June 25th had meeting with the General Manager. June 29th meeting with the General Manager and AHCA Board Officers weekly call. Then July 1st. Today I had AHCA Modernized Water Management Working Group meeting as well. Two things I just wanted to Three things. First off, I want to reiterate my thank you to CCWD staff for the incredible work dealing with that incredible leak. A lot of lessons learned associated with it, but really appreciate the dedication of our staff, especially right before a holiday event. Right to be out there and be made available. And Jennifer, also for your public information, for getting the word out to the, to the public and working with the neighborhood, getting the word out, it helped a lot to kind of get make that happen. So really appreciate that very, very much. I wanted to pass on my thank you to Veronica Sepulveda. I worked so hard on your name and now you're leaving us. I really. But I wanted to say incredibly, thank you for your years of dedication to us. It's been an honor and a pleasure to work with you. I know that I put you through the paces through all the work at CCWD and Aqua and for that I apologize. But I think it has been a great learning experience. It's been an honor to see your development. I know that CCWD has worked hard to also help in your education and development as well. And I really hope that obviously is bearing great fruit. So I wish you nothing but great success and continued success for you and your career. You did an outstanding job and we really appreciate what you did for us. So thank you for your dedication. Finally, I want to say thank you to my CCWD family for the great support you've given me with the loss of my wife. It was wonderful for all your thoughts and prayers for me. It meant a lot to me that you're a part of my family as well and that you stood with me. So, so thank you very much for your thoughts and prayers. It meant the world to me. Thank you again. It's now 7:31. This meeting is adjourned. The next regular meeting of the Board of Directors will be held on Wednesday, July 15, 2026 at 6:30pm in the boardroom located at 1331 Cochard Avenue in Coch.
[62:25] Speaker 5: I'm leaving tonight.