BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Accept the Work as Complete for the Land Rights - South County Recycled Water Pipeline, Project No. 91094001 (City of Gilroy, Unincorporated Santa Clara County, District 1).
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RECOMMENDATION: Recommendation
Accept the work on the Land Rights - South County Recycled Water Pipeline, Project No. 91094001 as complete.
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SUMMARY:
Staff have completed the Land Rights - South County Recycled Water Pipeline Project (Project).
Project Background
In 1999, Valley Water, SCRWA and the Cities of Gilroy and Morgan Hill entered a partnership agreement to develop a marketable water recycling program in South County and provide for future expansions of the treatment plant and delivery system. The existing SCRWA Wastewater Treatment Plant is located two miles southeast of the business district on Southside Drive in Gilroy, California, adjacent to LIagas Creek.
As a part of the agreement, Valley Water is contractually required to maintain and operate the recycled water pipeline in South County. Staff determined that Valley Water may not possess sufficient land rights to maintain and operate Valley Water’s recycled water pipeline in segments near the Eagle Ridge Golf Course and along Hecker Pass Road.
The Project was therefore developed in 2013 to confirm existing property rights and secure the easements and other land rights necessary for continued operation and maintenance of the recycled water system, including the distribution pipelines in Gilroy.
Relevant Prior Board Actions
On January 14, 2020, the Board approved the inclusion of the newly proposed 91094001 Land Rights - South County Recycled Water Pipeline project in the Capital Improvement Program (CIP) Five-Year Plan for Fiscal Years (FY) 2021-25. The Project was moved from the previously validated, unfunded project to a funded project. It was included in the FY 2021-25 CIP by the Board to secure Valley Water’s land rights and access needed to operate and maintain the system.
Project Close-Out
The Project’s work included confirming required rights-of-way, preparing plans and legal descriptions, coordinating with Real Estate Services to acquire necessary easements and other property interests, completing applicable environmental review, and documenting project records.
Staff reviewed available as-built information and conducted field visits to evaluate access to pipeline facilities within the Hecker Pass Park and Eagle Ridge Golf Course areas. The field investigation confirmed that sections/portions of the existing pipeline have been abandoned/retired and are not in use and therefore did not require acquisition of rights-of-way. It was also determined that access is available to most of the in-service pipelines and appurtenances because they are located within public rights-of-way/roadways. Staff access to the pipeline segments within gated communities was through informal agreements, which were to continue to keep good neighbor relationship, as the communities did not see the need for formal acquisition. Access will therefore be coordinated with community representatives on an as-needed basis.
Total Project Cost & Expenditures
The Project is included in the Capital Improvement Program FY 2027-31 Five-Year Plan with a total project cost of $7.124 million.
The total project cost and expenditure as of August 2026 is approximately $358,825 in actual expenditure and encumbrances through FY2025. Therefore, the total remaining funding is $6.8 million. The Project is funded entirely by the Valley Water Utility Enterprise Fund, with no other funding sources identified.
ENVIRONMENTAL JUSTICE IMPACT:
There are no environmental justice impacts associated with this item. This action is unlikely to or will not result in adverse impacts.
FINANCIAL IMPACT:
The Land Rights - South County Recycled Water Pipeline, Project No. 91094001, is included in the Capital Improvement Program (CIP) FY 2027-31 Five-Year Plan and in the FY 2026-27 Adopted budget. The Project was funded by the Water Utility Enterprise Fund (Fund 61), with 100% of the cost allocated to Zone W-5 (South County). The total Project cost is $7.124 million.
The Project’s financial schedule provides for expenditures through FY 2027, including $28,000 allocated to close-out tasks. The current Project plan indicates no planned expenditures after FY 2027.
The total expenditure as of August 2026 is approximately $358,825. Upon Project completion and close-out, any remaining funds will be released to the Water Utility Enterprise Fund Operating and Capital Reserve.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: Project Delivery Process Chart
UNCLASSIFIED MANAGER: Manager
Emmanuel Aryee, 408-630-3074