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Page 4 of 4 <br />Project Budget and Schedule <br />Zone 7 will prepare and maintain the project budget and schedule, with a current target <br />operational date of December 28, 2029. The City will review and comment on the budget and <br />schedule as the project advances, and Zone 7 will provide regular project status updates. The <br />agreement establishes coordinated milestones requiring both agencies to obtain funding <br />authorization from their governing body at key phases of the project. This approach allows <br />each agency to maintain independent financial oversight while keeping the project schedule <br />aligned. <br /> <br />The agreement also establishes a structured dispute resolution process requiring unresolved <br />project issues to be elevated from staff to executive management before further action is <br />taken. <br /> <br /> EQUITY AND SUSTAINABILITY <br /> This project prepares community water resources for a changing climate, resulting in cost <br />savings, enhanced water quality and availability, improved infrastructure, and increased <br />resiliency. <br /> <br />OUTREACH <br />The project has included community engagement efforts led by the City, including a project <br />website, community engagement events, and notifications of exploratory drilling activities. <br />These efforts will continue throughout design and construction. <br /> <br />FISCAL IMPACT <br />Authorization of this agreement will be funded under the City Groundwater Supply Project (CIP <br />No. 24174). The latest five-year Water CIP, approved by the City Council in May 2026, <br />includes $30.5 million, for this project. With a $1 million grant from the State Water Board <br />spent in prior years, the total project budget is $31.5 million, including escalation estimates for <br />future years. <br /> <br />RECOMMENDATION <br />Authorize the City Manager to negotiate and execute an agreement with Zone 7 Water Agency <br />for the design, construction, and operation of the Regional Groundwater Development Project - <br />Phase II and Phase III. <br /> <br />Prepared by: Submitted by: Approved by: <br /> <br />Todd Yamello, Utilities <br />Planning Manager - Public <br />Works <br />Siew-Chin Yeong, Director of Public <br />Works <br /> <br />Joe Calabrigo, Interim <br />City Manager <br /> <br />Attachments: <br />1. Groundwater Supply Facility Agreement <br />2. Presentation <br /> <br />Page 270 of 344