CITY COUNCIL REGULAR MEETING AGENDA 9-15-26

Page 3 Summary of Project Implementation: Project Background The City historically met its water demand through a combination of treated water purchased from Zone 7 and production from its own municipal wells. In 2022, the City detected PFAS in City Wells 5, 6, and 8 and removed them from service. The City evaluated options for restoring its lost production capacity, and Zone 7 and the City determined that partnering on the Project would best serve the interests of both agencies. The Project will add production from the Bernal Subbasin, diversifying Zone 7's groundwater supply and supporting regional reliability. The Feasibility Study (LSCE, December 2025), completed jointly by Zone 7 and the City, evaluated three candidate well sites and identified the recommended Project, consisting of two new groundwater production wells at Tennis and Community Park and Hansen Park in Pleasanton, with a combined capacity of approximately 9 million gallons per day (MGD), a 4,000 foot transmission main in Hopyard Road and Hansen Drive, and improvements to the Zone 7 Hopyard Chloramination Facility to accommodate the additional water supply. The total estimated project cost is approximately $42.3 million, which would be shared with the City according to the proposed Groundwater Supply Facility Construction and Operation Agreement (the Agreement). Agreement and Cost Share On May 20, 2026, the Board authorized the General Manager to negotiate and execute the Agreement, which establishes each agency's roles, including Zone 7’s role in the design and construction of the facilities, the cost-share framework, and the Project's target operational date of December 28, 2029. The Agreement also identifies Zone 7 as the lead agency responsible for completion of the environmental documentation to satisfy California Environmental Quality Act (CEQA). Project costs are shared based on the City's Groundwater Pumping Quota (3,500 acre-feet per year) relative to the Project's anticipated average-year production capacity (9,700 acre-feet per year), resulting in a Zone 7 cost share of 64 percent for the wells and raw groundwater pipelines and 77 percent for the Hopyard Chloramination Facility upgrades. The City is responsible for funding the remaining costs. Project Delivery: Progressive Design-Build Progressive Design-Build (PDB) is a collaborative project delivery approach in which a team performs both design and construction under one contract, working with Zone 7 and its Owner's Representative through all phases of the Project. PDB was selected to accelerate completion and to mitigate project risks by competitively selecting contractors based on qualifications and early contractor involvement in constructability reviews and value engineering, while enabling competitive pricing and cost certainty through a Guaranteed Maximum Price contract. PDB will also enable an accelerated schedule by completing electrical Page 133 of 318