CITY COUNCIL REGULAR MEETTIMG AGENDA PACKET 7-7-26

Page 2 of 3 and Valley Community Services District, the predecessor to the Dublin San Ramon Services District (DSRSD). In the 1990s, at the end of the original 30-year terms, Zone 7 executed new 30-year treated water supply agreements with California Water Service, City of Livermore, and DSRSD. The City and Zone 7 did not reach a new agreement at the time. As a result, Zone 7 has continued delivering treated water to the City pursuant to the renewability clause in the original agreement. DISCUSSION In early 2023, in anticipation of the expiration of existing agreements, Zone 7 initiated a renewal process with the City and the other water retailers to extend water supply service through December 31, 2055. Over the past three years, Zone 7 and the retailers have worked collaboratively to negotiate new agreements that preserve the key principles of prior agreements while updating language and provisions to reflect current laws and regulations, improve formatting, and incorporate revisions where appropriate. Key provisions of the agreement include: • The City shall procure all water supply for use within its service area through purchase of treated water from Zone 7 or through the use of its GPQ. Alternative supplies are only allowed for emergency purposes, when Zone 7 cannot deliver requested quantities, or when the supply is recycled water for permitted reuse purposes. • Treated water delivered by Zone 7 shall comply with all water quality requirements of the State Water Resources Control Board Division of Drinking Water and the United States Environmental Protection Agency. • All deliveries from Zone 7 are subject to water availability, which may be impacted by drought, facility outages, restrictions on groundwater extraction capacities, or other factors. • Zone 7 is to continue implementing a water conservation program. • Zone 7 shall measure and record volumes of water delivered to the City and shall test meters for accuracy at least annually. • Zone 7 retains the ability to regulate flows delivered to the City when the flows exceed system capacities. • New turnout facilities are subject to Zone 7 review and approval, and construction costs are the responsibility of the City. Ownership and maintenance of new turnout facilities remain the sole responsibility of Zone 7. • The agreement acknowledges Zone 7’s role as the exclusive Groundwater Sustainability Agency for the Livermore Valley Groundwater Basin and its responsibilities to sustainably manage the basin in compliance with the Sustainable Groundwater Management Act. • The agreement acknowledges the City’s right to extract groundwater based on its GPQ (3,500 AFY). As with the other retailers, the City’s GPQ remains unchanged from the previous agreement. • The Zone 7 Board of Directors shall adopt and publish rate schedules for charges levied pursuant to the agreement. Each charge must be based on the cost of providing service and may not be unreasonable, arbitrary, or discriminatory. • Zone 7 shall communicate with the City on an ongoing basis regarding updates to Page 51 of 214