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Councilmember Brown inquired whether untreated water users are charged a rate less than the cost of service. Ms. Pryor affirmed this was the current case, which reflects untreated water is significantly less costly to provide than treated. She further responded that Zone 7 pays approximately $700 to $800 per acre foot for the State water project. Councilmember Brown responded that untreated water users are charged approximately $129 per acre foot which is significantly lower than the price the Zone is paying, although the price is projected to increase to $167 per acre foot for untreated water. Ms. Pryor noted that the majority of costs for the State water project are funded through property taxes and both untreated and treated water users pay their proportionate costs through the property tax assessment. Councilmember Brown expressed untreated water users should pay their fair share of fixed costs. She also stated she would prefer to know which projects will be coming on line, such as "Vaqueros" and "Sykes" prior to proposed rate increases to Pleasanton water users. She further inquired as to why Zone 7 is proposing to fill employee positions, when they have been operating without them currently. Ms. Pryor noted she is new to the Agency and is currently conducting assessments of all operations. They have been filling gaps in administrative services and backlogs through the use of temporary and contract staff; however, she is proposing to minimize budget impacts by reducing the vacancy rate from 15% to 10%. Although salary savings have been utilized to fill the current gaps in service, the costs for temporary and contract staff have not been budgeted for future operations. Mayor Thorne opened public comments. Vin Pohray expressed concerns regarding the proposed rate increases although Zone 7 is reporting record revenues due to drought water use mitigation efforts. Water rates have increased 35% in the past two years alone. He requests Zone 7 stay within their budget, get their reserves to minimum levels and defer any potential rate increases. Angela Ramirez Holmes, President, Zone 7 Board of Directors, expressed support for the public process conducted to review the Zone's water rates. She noted the Board had learned lessons from the drought. She further noted responses to the recent study which indicated a need for increasing water availability and storage. Multiple studies have been conducted and none of the options to address these issues are inexpensive. She noted the Zone must be prepared for all water issues and demands. Olivia Sanwong Zone 7 Board Member, expressed concerns related to the water study model utilized and noted a water rate increase had already been voted on previously. She requested clarification regarding the line on her 2018 bill which states that Pleasanton water costs have increased by 3% CPI and the interval for these increases. She suggested there is room to consider other alternatives to the proposed rate increase and would prefer deferral of this item until they can be considered. Alfred Exner stated he attended all workshops and finance meetings provided by the Board and is not comfortable with the proposed untreated water rates, as they seem disproportionately advantaged towards untreated water users. He understands that challenges of providing water to users, however, he would prefer the Board limit their rate increase to 4%. John Bauer expressed concerns that there is an information disconnect and does not see the problem that the Zone 7 Board purports to exist. The drought curbed water usage and rates have increased significantly. He noted Mayor Thorne suggested residents state their concerns to the Zone 7 Board, which he did. He mentioned Zone 7 revenues are at record levels due to conservation efforts. City Council Minutes Page 6 of 9 October 16,2018