BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Authorize Distribution of Santa Clara Valley Water District’s Capital Improvement Program Draft Fiscal Years 2026-30 Five-Year Plan.
(*Previously listed as Item 3.8.)
End
RECOMMENDATION: Recommendation
A. Review the Capital Improvement Program Draft Fiscal Years 2026-30 Five-Year Plan; and
B. Authorize release of the document to all cities and land use authorities in Santa Clara County and the County of Santa Clara for review as to its consistency with their General Plans.
Body
SUMMARY:
Each year, Santa Clara Valley Water District’s (Valley Water) Capital Improvement Program (CIP) prepares a Five-Year Plan for Board consideration and approval. The CIP Five-Year Plan describes Valley Water capital investment priorities and provides information on the planned capital projects and Valley Water’s intended source(s) of funding. Staff presents the CIP Five-Year Plan to the Board at the Preliminary and Draft stages for the Board to make decisions and provide direction. The final CIP Five-Year Plan is approved with the annual budget, wherein funding is appropriated to the projects for the following fiscal year.
Capital Investments Not Included in the CIP
Valley Water contributions to water infrastructure capital investments led by external agencies are not included in the CIP Preliminary FY 2026-30 Five-Year Plan. While not included in the CIP, these investments are being evaluated through the development of the Water Supply Master Plan (WSMP) 2050 and budgeted and forecasted through operating projects. They are also included and reflected in the financial modeling that is analyzed during the development of the CIP Five-Year Plan.
These investments include:
1. Sisk Dam Raise Project
2. Delta Conveyance Project
Additionally, to ensure consistency with Valley Water’s various planning efforts, CIP staff continues coordinating with staff leading the development of the WSMP 2050. The WSMP 2050 assumes that capital projects included in the Five-Year Plan that repair/replace existing infrastructure are a baseline for inclusion in their planning efforts.
CIP Draft FY 2026-30 Five-Year Plan
The Board reviewed the CIP Preliminary FY 2026-30 Five-Year Plan on January 14, 2025, in conjunction with the preliminary FY 2025-26 groundwater production charges. At that meeting, the Board provided direction regarding key capital investments under the Water Utility Enterprise Fund (Fund 61) and received information and provided feedback regarding the Watershed Stream Stewardship Fund (Fund 12) and the Safe, Clean Water and Natural Flood Protection Program (Safe, Clean Water Program) Fund (Fund 26). In response to the recommendations presented for Funds 12 and 26, the Board directed staff to hold a public hearing to consider modifications to the Safe, Clean Water Program, Project E7: San Francisco Bay Shoreline Protection. The public hearing was held on February 11, 2025, and continued to February 25, 2025. On February 25, 2025, rather than provide direction on the proposed modifications during this year’s CIP Development Cycle, the Board directed staff to hold a Public Hearing during next year’s CIP Annual Development Cycle to align with the development of the CIP FY 2027-31 Five-Year Plan. Based on the Board’s direction, the San Francisco Bay Shoreline Protection - EIA 11 (Project 00044026) project cost increase of ~$87M will result in a funding shortfall for FY 2028-32 that will be addressed during next year’s CIP Annual Development Cycle.
In response to the Board’s direction for all funds, staff has prepared the CIP Draft FY 2026-30 Five-Year Plan. Included in the CIP Draft FY 2026-30 Five-Year Plan are three newly validated capital projects in the CIP as approved by the Board:
1. Enterprise Resource Planning (ERP) Replacement Project; $31.5M (Fund 73)
2. Coyote Dam Seismic Stability; $406.4M (Fund 61)
3. Pipeline Maintenance Program; $55.4M (Fund 61)
The CIP Draft FY 2026-30 Five-Year Plan (Attachment 1) includes 76 funded projects distributed among the following categories: 43 Water Supply, 14 Flood Protection, 12 Water Resources Stewardship, 3 Buildings and Grounds, and 4 Information Technology projects, for a total CIP value of $10.267B. This includes Valley Water's prior actuals and future years’ planned funding of $9.477B combined with received and planned outside funding of $1.305B, which includes grants from nonprofits, local public agencies, special districts, state and federal grants agencies, state subvention reimbursements and cost-share partnerships.
Key capital investments include Dam Seismic Retrofits, Pacheco Reservoir Expansion Project, Rinconada Water Treatment Plant Reliability Improvement Project, Coyote Creek Flood Protection Project, Upper Llagas Creek Flood Protection Project, and Ogier Ponds Project (creek/lake separation).
For purposes of annually updating the CIP Five-Year Plan, the baseline is the Board adopted CIP Five-Year Plan from the prior fiscal year (FY 2025-29). Each year, staff identifies any necessary changes to project scope, schedule, and cost through the project plan updating process. These project plan updates (Attachment 2) were reviewed by the CIP Committee and the Board and are reflected in the CIP Draft FY 2026-30 Five-Year Plan.
New Project Plan Updates/Project Plan Update Revisions to Funded Capital Projects
Since the Board reviewed the CIP Preliminary FY 2026-30 Five-Year Plan on January 14, 2025, the following project plan updates have been incorporated into the CIP Draft FY 2026-30 Five-Year Plan and are included in Attachment 2:
1. Anderson Dam Tunnel Project (91864006)
2. Anderson Dam Seismic Retrofit (91864005)
3. Cross Valley Pipeline Extension (91864010)
4. Coyote Creek Chillers (91864008)
5. Coyote Pumping Plant ASD (91234002)
6. Llagas Creek - Upper, CORPS Coordination (E6a) (26174052)
7. Llagas Creek - Upper, Phase 2B Construction (E6) (26174055)
8. Upper Berryessa Creek - USACE Coordination (26174041)
9. San Francisquito Creek - SF Bay to Searsville Dam (E5) (26284002)
10. Berryessa Creek, Lower Penitencia Phase 2 (40174005)
Pending Project Plan Updates/Project Plan Update Revisions to Funded Capital Projects
Since the January 14, 2025, Board meeting, the following potential project plan updates have been identified, but not finalized. The pending changes are not incorporated into the CIP Draft FY 2026-30 Five-Year Plan. Finalized project plan updates will be incorporated for the Board’s final review and adoption of the CIP FY 2026-30 Five-Year Plan on May 27, 2025, Board Meeting.
A list of the projects with potential pending changes is provided below:
1. San Jose Purified Water - Phase 1 (91294001)
2. Coyote Creek, Montague-Tully (26174043)
3. Headquarters Operations Building (60204032)
4. ERP Replacement (73274013)
5. Small Capital Improvement Projects Forecast Revisions
6. Administrative Project Plan Updates
Operations and Maintenance Cost Forecast Revisions
It is understood that new capital projects impact future operations and maintenance (O&M), which is included in the financial analysis. Throughout the various phases of a capital project, projections of this impact are regularly considered and updated as needed to reflect changes in project elements. This information is considered during long-term forecasting by the respective operating project managers.
Projects Planned for Closure
Additionally, eight (8) projects in the Board Adopted CIP FY 2025-29 Five-Year Plan are anticipated to be completed and/or closed out by June 30, 2025, as listed below:
1. Coyote Percolation Dam Replacement (91864009)
2. Cross Valley Pipeline Extension (91864010)
3. Santa Teresa Water Treatment Plant Filter Media Replacement(93284013)
4. Rinconada Water Treatment Plant Residuals Remediation (93294058)
5. Permanente Creek, SF Bay to Foothill Expressway (10244001)
6. Permanente Creek, SF Bay to Foothill Expressway (26244001)
7. SCW Fish Passage Improvements (D4.3) (26044002)
8. Data Consolidation (73274009)
The projects listed above are planned for closure but will remain in the CIP FY 2026-30 Five-Year Plan to allow for close-out reporting of FY 2025 actuals. The projects will be removed from the CIP FY2027-31 Five-Year Plan unless a project plan update occurs necessitating an extension of the schedule.
To support the Board in its review of the CIP Draft FY 2026-30 Five-Year Plan, staff has prepared a PowerPoint presentation (Attachment 3) that provides an overview of the annual CIP process and the CIP Draft FY 2026-30 Five-Year Plan; including project plan updates, project categories, a summary of project costs and other funding sources, along with projects planned for closure.
Subject to authorization by the Board, the CIP Draft FY2026-30 Five-Year Plan will be transmitted to all cities and land use authorities in Santa Clara County and the County of Santa Clara to solicit feedback and obtain confirmation that Valley Water’s CIP Draft FY 2026-30 Five-Year Plan is consistent with their applicable General Plans. The CIP Draft FY2026-30 Five-Year Plan will also be available online for public review. Staff will contact and offer to meet with each of the City Managers, Planning Directors, and/or Public Works Directors to discuss the proposed list of projects and seek feedback on the CIP Draft FY2026-30 Five-Year Plan before returning to the Board for final approval of the CIP FY 2026-30 Five-Year Plan.
Communications and Community Outreach
Informing community members about the CIP efforts, process, and program details remains an integral part of Valley Water’s communications and public engagement. Staff regularly invites community members to participate in the CIP public comment period, the CIP public hearings, and other milestone dates through frequent social media posts. Staff promotes monthly CIP committee meetings on Nextdoor, Facebook, and X (formerly Twitter), and boosts them on Facebook once the meeting agenda is posted online, typically within the week leading up to those scheduled meetings.
In early December 2024, a detailed blog about the CIP Five-Year Plan and process was shared with the community, and a three-blog series to highlight projects within the CIP launched in January. These blogs were posted on valleywaternews.org and shared in Valley Water’s newsletter, Facebook, and X. Staff also posts on the CIP webpage and project pages about how to submit public comments and other reminders about ways community members can participate in the CIP process.
Additionally, Valley Water’s public events, including scheduled Speakers Bureau presentations, serve as venues for staff to remind community members about the CIP efforts and how they can participate in that process. Staff supports all Board-approved CIP efforts with year-round community engagement. CIP project outreach includes distributing information through mailings, social media updates, email blasts, Nextdoor notifications, hosting public meetings, and updating project webpages with details about current project progress. On average, staff posts about CIP projects approximately five times per month across all our platforms.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
Individual capital projects may have environmental justice impacts. When this occurs, staff will conduct outreach to and engagement with impacted communities, which will be reported to the Board accordingly. The CIP Draft FY 2026-30 Five-Year Plan has no environmental justice impact.
The CIP Draft FY 2026-30 Five-Year Plan is a projection of Valley Water’s capital funding for planned capital projects. Its purpose is to document planned capital projects to help integrate Valley Water work with the larger community by aligning Valley Water planning with other local agency planning efforts. The CIP Draft FY 2026-30 Five-Year Plan documents any changes to capital projects’ planned funding and expenditures. It is updated and brought to the Board of Directors for approval each year in February.
Each February, upon the Board’s direction, to ensure meaningful engagement of all Santa Clara County communities in the decision-making process, staff provides a copy of the CIP Draft Five-Year Plan to all cities and land use authorities in Santa Clara County and the County of Santa Clara. It publishes a public notification for a review before the Board of Directors adopts the Resolution to Adopt the CIP Five-Year Plan in May.
The CIP Five-Year Plan is thus produced each year in collaboration with government, academic, private, non-governmental, and non-profit organizations, as well as diverse and disadvantaged communities, and as such, adheres to the Board’s General Principles and Ends Policies, which are integral in ensuring that Valley Water meets its mission.
FINANCIAL IMPACT:
There is no financial impact associated with Board approval of the recommendations for this item. The total value of the CIP Draft FY 2026-30 Five-Year Plan is $10.267B, of which $1.305B may be funded by external sources.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have a potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: CIP Draft FY 2026-2030 Five-Year Plan
Attachment 2: Project Plan Updates
Attachment 3: PowerPoint
UNCLASSIFIED MANAGER: Manager
Luz Penilla, 408-630-2228