West County Wastewater District

R1

Adopt procedures by which any Board member can obtain information about WCW operations without the agreement of the General Manager. Response: Will partially implement. Additional Comments/Explanation: WCW will update relevant policies by June 30, 2022, to reflect the current practice that stated information requests should be directed to the General Manager, but may be directed to the Deputy General Manager or Department Heads when appropriate and when accompanied by a notification to the General Manager of the request. In addition, relevant WCW policies, as well as the Employee Handbook, currently in development, will provide additional guidelines on appropriate and allowable communications between staff and Board members.

R2

Adopt procedures by which any Board member can place an item on the meeting agenda without GM approval or a Board majority. Response: Will not implement. Additional Comments/Explanation: The Board operates as a majority. Individual Directors do not have the ability to make decisions or act unilaterally with the exception of some limited parliamentary responsibilities carried out by the President of the Board. The Board’s current policies and procedures are consistent with majority rule structure of the Board and with the agenda-setting process followed by most, if not all, public agencies. A Board member may place an item on the agenda with the approval of a majority vote.

R3

Adopt a written policy on reimbursement of a director's legal fees for both internal investigations and claims brought against a director by an outside 3rd party. Response: Will implement. Additional Comments/Explanation: WCW will adopt a written policy on reimbursement of Director's legal fees by June 30, 2022, and the policy will conform to the California Government Code.

R4

Adopt a procedure that requires the GM to identify expenditures made under the authority to make per-vendor payments of less than $50,000 per fiscal year. Response: Will not implement. Additional Comments/Explanation: Consistent with the practice of most public agencies, the Board delegates a pre-determined dollar amount the General Manager can spend without Board approval. This is done to ensure the effective and efficient management of the organization. If every expenditure requires Board approval, critical supplies and services required to operate would result in costly delays. The check register report provided to the Board each month provides detailed information on every expenditure made by WCW in a given month. The information included on WCW’s check register is consistent with what the approximately 19 public agencies surveyed provide to their own Boards or Councils. Most agencies provide a check register that comes directly from the financial system and staff found that WCW’s check register provides more details than any other public agency surveyed. Staff could find no agency where expenditures were separated by authorization under the General Manager’s authority. It should be noted that the request for separation of expenses authorized by the General Manager was made by one of the Director’s censured for discrimination and mistreatment of the General Manager. The request for the additional level of scrutiny was only made shortly after the complaint against the Director was filed. Should you require any additional information, please do not hesitate to contact West County Wastewater’s General Manager, Lisa Malek-Zadeh. Sincerely, Cesar Zepeda (Feb 18, 2022 08:10 PST) Cesar Zepeda, President Board of Directors West County Wastewater cc: Board of Directors, West County Wastewater Lisa Malek-Zadeh, General Manager Claire Collins, General Counsel Attachment: February 16, 2022 WCW Staff Report on Grand Jury Report Staff Report REPORT TITLE: RESPONSE TO THE CONTRA COSTA COUNTY CIVIL GRAND JURY MEETING: Board of Directors - Feb 16 2022 REPORT BY: Lisa Malek-Zadeh, General Manager SUBMITTED BY: Lisa Malek-Zadeh, Office of General Manager REPORT TYPE: Governance RECOMMENDATION: Consider approval of the Draft West County Wastewater (WCW) response to the 2020-2021 Contra Costa County Civil Grand Jury Report No. 2103 titled: "West County Wastewater District" and the Draft Board of Director’s Statement in response to the Grand Jury report. ATTACHMENT(S): Response to Civil Grand Jury Report Board of Director's Statement Resolution No. 2020-53 Censuring Director Stanley (2020) Resolution No. 2021-14 Censuring Director Stanley (2021) Resolution No. 2021-15 Censuring Director Wiener SDLF High Performance Checklist Other Agency's Survey Board Presentation FINANCIAL IMPACT: Total dollar amount Approved in budget ☐ Budget amendment required ☐ No budgetary impact ☑ STRATEGIC PLAN GOALS: Infrastructure Strategy Information Systems ☐ and Performance ☐ and Data Management Operational Environmental ☐ ☐ Optimization and Stewardship Employee Culture Community Image ☐ Financial Viability ☐ RECOMMENDED ACTION: Consider approval of the Draft West County Wastewater (WCW) response to the 2020-2021 Contra Costa County Civil Grand Jury Report No. 2103 titled: "West County Wastewater District" and the Draft Board of Director’s Statement in response to the Grand Jury report. SUMMARY: The 2020-2021 Contra Costa County Civil Grand Jury (Civil Grand Jury/CGJ) issued a report dated November 23, 2021, titled "West County Wastewater District" (Report/GJR). The Report made eight findings and four recommendations Pursuant to the California Penal Code and the instructions of the Report, WCW is required to provide responses to each of the Reports’ findings and recommendations by February 25, 2022. To read the entire Grand Jury Report, see Attachment A. WCW welcomes any opportunity to identify and implement improvements that increase the Board of Director’s effectiveness in governing the District. The Board has reviewed and considered the Grand Jury’s recommendations and a discussion of these deliberations is discussed in more detail in the following sections of this report. WCW has prepared a response to the Grand Jury, which can be found on Attachment B. Missing from the Grand Jury Report is important context and background to help better understand what led to the investigation as well as the findings, conclusions and recommendations from the Grand Jury. This information is provided in the discussion below. BACKGROUND AND DISCUSSION: The West County Wastewater Board of Directors is committed to practicing good governance and taking steps to guarantee a high functioning Board of Directors. This includes creating policies that incorporate the highest standards and best practices, regularly revisiting policies so they remain current and relevant, ensuring that each Director understands and complies with policies adopted by the Board, and working with the General Manager to implement the policies set out by the Board. To this end, the Board has taken several steps over the last few years to demonstrate its commitment to these principles. Board of Directors Policies and Procedures The Board of Directors’ Policies and Procedures outline the procedures, roles that the Board of Directors will follow to ensure that constituents and members of the public may be informed of the Board’s business, operations and policies, and may meaningfully remain involved in the open governance process. In 2019, an Ad Hoc Committee of the Board of Directors was created to complete an extensive review of the Boards’ policies and procedures, which had become outdated, were missing key information and was difficult to understand. After the recommendations from the Ad Hoc Committee and staff were reviewed and discussed by the then Planning Committee in late spring/summer of 2020, the Board of Directors adopted an updated comprehensive Board Policies and Procedures at their meeting on July 1, 2020. The new policy is easy to understand, reflects best practices, is consistent with other agencies and associations that set standards of good governance and complies with legal requirements. Since the Board adopted the new Policies and Procedures in 2020, the Board has regularly reviewed and revisited the Policy with the most recent update in February 2021 to ensure the policy reflects current conditions. Management Authority WCW’s day-to-day operations are delegated to the Chief Operating Officer, the General Manager, with the role and responsibilities of the General Manager outlined in the Management Authority adopted by the Board of Directors. The Management Authority has been reviewed and updated as recently as February 2021 and provides further clarification on duties delegated to the General Manager as well as adding provisions to comply with changing conditions such as the WCW’s adoption of the California Uniform Public Construction Cost Accounting Act (CUPCCAA), which provides more efficient procurement standards for capital expenditures. Financial Policies WCW’s financial policies provide the basis for high standards and sound financial practices in the operations of the organization. Since 2019, the Board has reviewed and updated all of WCW’s financial policies including an update to the Bank and Check Signing Policy in 2019. In 2021, the Board reviewed and approved updates to the Reserves policy, which hadn’t been updated since 2015. In addition, the Board also approved the Investment Policy and adopted WCW’s first Debt Management Policy. In 2021, the Board reviewed and approved an overhaul of the WCW’s Purchasing Policy. The revised policy expanded the section on ethical procurement standards, clarified procurement methods and types, added

R5

The Grand Jury recommends that the Board consider changes to alleviate the concerns some members had about procedural confusion and financial transparency by implementing specific written procedures and clarifications. (GJR Pg.1)

R6

WCW has no written policy on when or under what circumstances it will pay for a Director's legal expenses. West County Wastewater's response to the Grand Jury Report is included as an attachment to this report. President Zepeda’s Statement for February 16, 2022 Meeting Tonight, we are discussing, for the second time, WCW’s response to the Grand Jury report. At our last meeting, the Board engaged in more than an hour of debate and

R7

REFERRAL TO DISTRICT ATTORNEY. The Board hereby directs the General Counsel to refer the fraud allegation above to the District Attorney for investigation.

R8

GENERAL MANAGER’S EVALUATION. Director Stanley is hereby prohibited from participation in the General Manager’s evaluation.