BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☒ No ☐
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT:
Title
Authorize Acquisition of a Real Property Interest from James H. Woodward, for the Anderson Dam Tunnel Project, Project No. 91864006, APN 729-37-016, Real Estate File No. 9186-42, for a Final Sale Price of $1,100,000 (Morgan Hill, District 1).
End
RECOMMENDATION:
Recommendation
A. Authorize the Chief Executive Officer to execute a Right of Way Agreement between James H. Woodward and the Santa Clara Valley Water District, for acquisition of APN 729-37-016, located at 17506 Hoot Owl Way, Morgan Hill, CA, based upon the terms and conditions as set forth in the Agreement; and
B. Authorize the Chief Executive Officer to accept the Grant Deed from James H. Woodward.
Body
SUMMARY:
Santa Clara Valley Water District (Valley Water) staff recommends acquisition of residential real property located at 17506 Hoot Owl Way in Morgan Hill, California owned by James H. Woodward according to the terms of Right of Way Agreement No. 9186-42 (Attachment 1). This property is shown on the plat and description of Grant Deed No. 9186-42 (Attachment 2). Acquisition of this property is necessary for the Anderson Dam Tunnel Project (ADTP) reservoir bank and rim stability improvements to address ground movement associated with pre-existing landslide areas around Anderson Reservoir.
PROJECT BACKGROUND
Valley Water is undertaking the Federal Energy Regulatory Commission (FERC) Order Compliance Project (FOCP) as a result of the February 20, 2020, directive from FERC to implement interim risk reduction measures at Anderson Dam to protect the public from risk of dam failure due to seismic activity. ADTP, Project No. 91864006, is one of five Capital Construction Projects comprising the FOCP. ADTP is currently being constructed and includes building a diversion system to augment the existing outlet, consisting of a new diversion tunnel, an outlet structure, a micro-tunnel lake tap, and modifications to Coyote Creek just downstream of the base of the dam. ADTP also includes reservoir bank and rim stability improvements, and existing intake structure modification.
The purpose of the ADTP reservoir bank and rim stability improvements is to address ground movement associated with pre-existing landslide areas around Anderson Reservoir. One of the landslide areas that requires stabilization is known as the “Hoot Owl Way Landslide,” located on the reservoir slope below Hoot Owl Way in the Holiday Lake Estates community. Slope movements at the Hoot Owl Way Landslide have been documented in the past during reservoir operations, seismic events, and other drought and flood related circumstances, and were monitored during the drawdown of Anderson Reservoir in 2020.
When the new diversion system becomes operational, rapid drawdowns during heavy storms may contribute to subsequent slope movement. The ADTP team developed alternatives to mitigate future slope movements around the reservoir using engineering solutions such as soil nails, retaining walls, regrading, shear keys, and drainage improvements. However, analyses of the Hoot Owl Way landslide area determined these solutions may not fully prevent further movement of the slope. Valley Water also considered precautionary acquisition of the nine parcels that are materially threatened by the Hoot Owl Way Landslide as a mitigation alternative. After evaluating the various mitigation alternatives, Valley Water determined that the most feasible option is to pursue acquisition of all nine parcels that may be affected by the Hoot Owl Way Landslide.
ACQUISITION OF 17506 HOOT OWL WAY
The property located at 17506 Hoot Owl Way is located on the reservoir slope and has been identified as a property where ground movement associated with pre-existing landslide requires stabilization. Precautionary acquisition of the property and restoration to a more natural condition is determined to be the most appropriate way to address risks threatened by the Hoot Owl Way Landslide.
Valley Water retained Chapman & Patton, Real Estate Appraisers and Consultants, to appraise the property which established the fair market value as $600,000. An offer in this amount was made to the owner on April 7, 2022.
On August 15, 2022, a request for Response letter was issued.
On November 22, 2022, the Valley Water Board approved the Relocation Impact Study and Last Resort Housing Plan for the Anderson Dam Tunnel Project as Part of the Federal Energy Regulatory Commission Order Compliance Project, Under the Anderson Dame Seismic Retrofit Project, Project No. 91864006. As provided in the Relocation Plan, on August 25, 2022, Mr. Woodward was provided with a Conditional Entitlement Letter (CEL) outlining the relocation benefits to which he, as a displaced owner/resident, is entitled. One of these benefits is a price differential payment based on the anticipated cost of a decent, safe, and sanitary comparable replacement dwelling.
On December 23, 2022, a meeting was held with Mr. Woodward to review the offer and CEL.
On January 5, 2023, Valley Water met with Mr. Woodward regarding settlement options. Valley Water also reviewed the CEL regarding relocation benefits.
On August 16, 2023, Valley Water received the Housing Valuation Study for Mr. Woodward’s property prepared by Associated Right of Way Services and an updated Conditional Entitlement letter August 23, 2023 (Attachment 3). The amount of the housing price differential payment is set forth in Section III. of the CEL.
On August 23, 2023, Valley Water reviewed the revised CEL with Mr. Woodward. A settlement of $988,000 was offered to Mr. Woodward in accordance with the revised CEL.
On August 28, 2023, the owner proposed to settle this matter with a counteroffer of $1,200,000 including both the value of the real property and settlement of the housing price differential element of the relocation benefits described in the CEL. Valley Water reviewed this information with ARWS and requested supplemental market information.
After reviewing the counteroffer, the updated CEL, and supplemental information, Valley Water made an offer of $1,100,000. On October 26, 2023, Mr. Woodward accepted Valley Water’s offer.
The final sale price of $1,100,000, represents a final settlement for acquisition of the real property and settlement of the price differential payment element of the relocation benefits package. Mr. Woodward remains entitled to other relocation benefits as described in the CEL and Right of Way Agreement.
The right of way agreement provides that the owner may select the date for closing escrow and recording the deed. The owner will provide thirty (30) days prior written notice to Valley Water of the selected closing date. However, in no event shall escrow close and the deed record later than February 29, 2024. This will facilitate the owner locating a new residence and will not interfere with the Valley Water project.
ENVIRONMENTAL JUSTICE IMPACT:
There may be Environmental Justice impacts which this Relocation Plan aims to mitigate. The intent of the ADTP reservoir bank and rim stability improvements is to address ground movement associated with pre-existing landslide areas around Anderson Reservoir. Purchase price of the real property and relocation of occupants will be required to achieve the goal of stabilizing this landslide area in the Holiday Lakes Community. These parcels are not in the SB 535 Disadvantaged Communities. The SB 535 map utilizes California Communities Environmental Health Screening Tool (CalEnviroScreen) which is a screening methodology that can be used to help identify California communities that are disproportionately burdened by multiple sources of pollution. The location of the parcel has a CalEnviroScreen 4.0 score below 70. Areas of concern have scores between 70 and 100.
Valley Water will comply with the Uniform Relocation Assistance and Real Properties Acquisitions Act of 1970, California Relocation Assistance Law, and other applicable local ordinances in providing the full spectrum of relocation services through personalized outreach, and regular communication, to each potentially impacted household.
Additionally, the Valley Water ADTP team continues to coordinate with the community and key stakeholders as the project advances.
FINANCIAL IMPACT:
The Anderson Dam Tunnel Project, Project No. 91864006, is part of the Federal Energy Regulatory Commission Order Compliance Project and is included in the Capital Improvement Program (CIP) Fiscal Year (FY) 2024-28 Five-Year Plan and in the FY 2023-24 Adopted Budget. The purchase price of the property is $1,100,000. There are adequate funds in the project’s current FY 2023-24 Adopted Budget to purchase the property. The Project is funded by Water Utility Enterprise Fund (Fund 61), with 81.9% of the costs allocated to North County Zone W-2, and South County Zones as follows; 7.9% to Zone W-5, 10.3% to Zone W-7, and 0% to Zone W-8.
CEQA:
Valley Water’s acquisition of the property is proposed to ensure public safety during FOCP implementation. Valley Water determined that the FOCP was exempt from CEQA pursuant to the statutory exemption for specific actions necessary to prevent or mitigate an emergency (CEQA Guidelines §15269 and Public Resources Code §21080(b)(4)). Acquisition of the property to address the FOCP impacts are therefore also exempt under the same emergency exemption. In addition, acquisition of property has no possibility of causing significant environmental impacts, and thus are also exempt from CEQA under the “common sense” exemption (CEQA Guidelines § 15061(b)(3)).
ATTACHMENTS:
Attachment A: Gov. Code § 84308
Attachment 1: Right of Way Agreement
Attachment 2: Grant Deed No. 9186-42
Attachment 3: Conditional Entitlement Letter
UNCLASSIFIED MANAGER:
Manager
Ryan McCarter, 408-630-2983