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6, PUBLIC HEARINGS AND OTHER MATTERS Item 6a Supplemental Report on Zone 7's Finanelal. In~itutional & Ooerational IFIO) Analysis of Options for Providing Water to Dou_fiaert_v Valley. (SR96: 178) Randall Lum presented the staff report. Mr. Tarver asked what were the legal ramifications of this report as it relates to the groundwater basin, water reliability, the concept of first come, first served uses, and rates on Pleasanton ratepayers, water supplies, etc. Anthony Rossman, who has been retained as special counsel regarding water issues, indicated that Zone 7 provides water by contract and the way the contract is drafted is the key. Interesting questions have been raised, including whether Zone 7 is authorized to provide service outside its boundaries. This issue has not been thoroughly reviewed as yet. The statute says that the District shall not allow the exportation of water outside the District, however this is an unusual circumstance because the water is being imported through the efforts of the Dublin San Ramon Services District and the developers of Dougherty Valley. As a practical matter the Zone is in charge and if it feels it has the authority, the focus is on formulating the contract so it is not prejudicial in the future to Pleasanton. He encouraged the City to work with the Zone to make sure the existing service area will have sufficient water in times of diminished water supplies. He felt it was clear under the law that Zone 7 can treat customers outside of its service area differen~y. He also believed that it was important to verify that the simulation model is accurate. Mr. Rossman concurred with the recommendations of staff and Zone 7 in the selection of Option 1 and believed there would be more institutional protection. Mr. Tarver asked if it were possible the State would allow another contractor for water? Mr. Rossman indicated there is the same amount of water and the question is whether the State wants to deal with more contractors. If DSRSD became a water contractor, the effect would be to reduce the influence of Pleasanton and Zone 7 over the use of this groundwater basin. Ms. Dennis asked whether the legal opinions that have been rendered by others basically applied within Alameda County. Mr. Rossman indicated the question referred to this situation and included the out of county provision of water. He felt it was necessary to amend State law to allow Dougherty Valley to become part of Zone 7. If that occurred the issue of exporting water outside the distract would no longer apply. Mr. Tarvet asked if that would be a LAFCO action? 06/04/96 4-