Board Approves $1.575M Billing Deal, Warns Credit Card Costs Nearing 1% of Rates

The Contra Costa Water District board signed off on a new online billing contract but spent most of its July 1 meeting wrestling with a bigger question: how long can the district keep absorbing credit card processing fees that have ballooned nearly sixfold since 2019? Separately, General Manager Rachel Murphy detailed a 72-hour emergency response to a major water main break in Concord that left about 1,000 customers without service over a June weekend.

• Credit card processing costs surge from $120K to $700K in seven years; board approves $1.575M Paymentus deal but signals a potential policy shift by November

• 16-inch water main ruptures in Concord, triggering 72-hour emergency response and raising infrastructure resiliency questions about aging asbestos cement pipes

• BKS Law Firm wins $3.039M general counsel extension after its own attorney recuses from the vote

• Investment policy updated to incorporate SB 858 commercial paper changes and expanded pool authority

• Carpenters union seeks seat at the table on future canal replacement project labor agreements

• Recently appointed Director Daniel T. Fitzpatrick was absent.

The $700K Question: Who Should Pay for Credit Card Convenience?

The basics: When the board voted in 2019 to absorb credit card transaction fees as a customer convenience, the annual cost was roughly $120,000. Seven years later, the program has exploded — nearly 40% of all bill payments now occur online, and the price tag has hit $700,000.

Where things stand: Assistant General Manager Jeff Quimby presented a competitive procurement analysis comparing three cost models: the district absorbs all fees ($690,000 per year), customers pay all fees ($890,000 per year), or a roughly 50/50 split ($770,000 per year). Staff recommended maintaining the status quo for now, noting that per-transaction fees will drop from $2.50 to $2.00 for credit cards under the new two-year Paymentus contract.

"We're projecting over 210,000 transactions through the online portal. Nearly 40% of our bill payments occur online now with a transaction cost of about $700,000 for this year," said Quimby.

Vice President Antonio Martinez zeroed in on the trajectory, noting that $700,000 approaches 1% of the district's rate revenue. He questioned whether absorbing the fees could run afoul of Proposition 218, California's voter-approved measure restricting how water agencies set rates. Legal Counsel Doug Cody said the prevailing legal view is that it would not violate Prop 218, calling it "a cost of doing business in the industry."

Martinez also pushed for customer education on how card choice drives costs, noting that premium "affinity" cards with airline miles and cashback rewards carry higher interchange fees.

The other side: Director Patricia Young challenged whether education would move the needle.

"Most people who use their cards are using the cards because of the benefits to them. And I don't see that changing," she said, adding that "at some point I think the costs are going to become prohibitive because it's clearly just going up."

Director Connstance Holdaway underscored how quickly the tab grew:

"When we first saw this in 2019, that $120,000 didn't seem to be a deal, but that sure jumped pretty darn quick."

President Ernesto Avila asked staff to analyze whether absorbing fees has actually reduced late payments — and requested comparison data from peer agencies. He floated a phased approach, suggesting that charging customers a dollar per transaction might begin to "wean them a bit" off full district absorption. But he also flagged the trend line as alarming:

"That trend line scares me, Jeff. That's the only concern I've got is that is a high slope."

Decisions: The board approved the Paymentus contract unanimously (For: 4, Against: 0, Absent: 1). The agreement preserves flexibility to shift to a customer-paid or split model later.

What's next: Staff will bring a deeper analysis — including late-payment data, peer comparisons, and customer education options — to the November 2026 Finance Committee.

72-Hour Emergency: Water Main Break Leaves 1,000 Customers Dry

A 16-inch asbestos cement water main ruptured Thursday, June 18 at the intersection of Clayton and Matheson roads in Concord, triggering what General Manager Rachel Murphy described as a marathon emergency response.

The leak fed upper pressure zones, and field crews initially could not locate the source before reservoir storage dropped dangerously low. Murphy said the district made the difficult decision to resume pumping and refill reservoirs before attempting a second shutdown. The Emergency Operations Center was activated, Clayton Road was closed in both directions, and more than 30 staff worked continuously for 72 hours.

"Shifts of CCWD staff worked for 72 hours straight through that weekend to repair the leak," Murphy reported.

About 1,000 customers lost water service for approximately 21 hours.

By early Saturday morning, crews found a blown gasket with a significant hole in the pipe and replaced about 5 feet of the main. All customers were restored by 10 p.m. Saturday; all lanes reopened Sunday evening. Water quality samples came back clean Monday.

One contract employee was injured when a driver entered the traffic control zone. Three business claims have been filed. The district is coordinating with the City of Concord on final pavement restoration and investigating potential damage to other underground utilities. An after-action assessment on incident response and infrastructure resiliency will be presented to a future Operations and Engineering Committee.

BKS Law Firm Extends at $3.039M After Counsel Recuses

Legal Counsel Doug Cody disclosed that BKS Law Firm is a source of income to him, recused himself, and left the boardroom before the board considered the firm's two-year contract amendment.

"BKS law firm is a source of income to me. And to avoid any appearance of a conflict, I will recuse myself and remove myself from the meeting room," Cody said.

General Manager Rachel Murphy explained that BKS was competitively selected through an RFP in 2023 and provides general counsel services covering water law, public agency law, contract law, and real property matters. President Ernesto Avila praised the firm's work, saying it had done "an absolutely outstanding job" across a variety of issues. The $3.039M amendment for FY27-FY28 passed unanimously (For: 4, Against: 0, Absent: 1).

Investment Policy Gets SB 858 Update

Accounting Manager Nicole Segoski presented CCWD's annual investment policy review, recommending two changes.

• The first incorporates SB 858."[This] increases the maximum maturity for prime quality commercial paper from 270 days to 397 days," Segoski explained. It will give the district added flexibility without requiring longer-term commitments.

• The second broadens authority to invest in eligible local government pools beyond LAIF and CAMP, as recommended by investment advisor PFM Asset Management.

The board adopted Resolution No. 26-018 unanimously (For: 4, Against: 0, Absent: 1).

Martinez Meets With Carpenters Union on Canal PLAs

Vice President Antonio Martinez disclosed a June 22 meeting with carpenters union representative Chris Palomo about project labor agreements for the district's upcoming canal replacement program. Martinez reported that the carpenters are no longer part of the building trades in the county following a falling out a couple of years ago, though the relationship has improved recently. The union wants to ensure it is included in any future PLA negotiations — a signal that labor dynamics around the canal project are already taking shape well before construction begins.

Minor Items

• Consent calendar (Items 1–9) approved unanimously, including Resolution No. 26-016 for sole source ozone generator components at Randall-Bold Water Treatment Plant, Resolution No. 26-017 for a corrective easement on a 12-inch water main in Martinez, surveying services agreements totaling up to $1.714M, environmental consulting up to $485,000, potholing services up to $597,000, and temporary staffing up to $700,000.

• Principal Financial Group retirement and OPEB trust services extended three years through FY29, with fees dropping from 9 to 8 basis points — an approximately 11% reduction reflecting investment growth.

• Public Policy Advocates retained at $157,000 for state lobbying on golden mussels, canal replacement funding, and water policy. The firm has represented CCWD in Sacramento since 2006.

• Labor counsel agreements approved with Liebert Cassidy Whitmore ($200,000) and Burke Williams & Sorensen ($100,000) for FY27-FY28.

• Board unanimously endorsed Vice President Martinez for reelection to CSDA Bay Area Network Seat C for the 2027–2029 term; Martinez currently serves as CSDA treasurer.

• Board bid farewell to District Secretary Veronica Sepulveda after five years of service. Director Holdaway thanked her for "five wonderful years," and President Avila praised CCWD's investment in her education and growth.