BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Receive an Informational Update on the Draft Fiscal Year 2026-2030 Water Utility Enterprise and Watersheds Asset Renewal Plans.
End
RECOMMENDATION: Recommendation
Receive information on the Draft Fiscal Year 2026-2030 Water Utility Enterprise and Watersheds Asset Renewal Plans.
Body
SUMMARY:
The purpose of the Fiscal Year 2026-2030 Water Utility Enterprise and Watersheds Asset Renewal Plans (Plans) is to identify recommended asset renewal work for existing water supply and flood protection infrastructure for the next five fiscal years. Asset renewals are asset replacements or rehabilitation to ‘like new’ condition. The Plans also summarize the resources needed for operations and maintenance activities, including corrective and preventive maintenance work, operator labor, power and chemical costs, and engineering and environmental staff support.
The Plans are rolling five-year plans and are updated annually. The draft Plans were prepared using budget and long-term forecast data as of November 2024. The Fiscal Year 2026 (FY26) budget requests and unfunded needs will continue to be evaluated throughout the budget and groundwater charge-setting processes. The Plans will be finalized in July of 2025, following Board adoption of Valley Water’s final budget and groundwater production charges for FY26. The draft Plans are included in Attachments 2 and 3.
Water Utility Summary
The draft Water Utility Plan identifies recommended asset renewal work for budgeting for the next five fiscal years. These activities are identified by the asset management program and the Raw and Treated Water Divisions and are typically budgeted and executed in one of six water utility small capital improvement projects. When many assets at a single facility are due for renewal, the plan may recommend a new individual capital project.
In FY26, 74 planned asset renewal activities are scheduled at an estimated cost of $10.1 million. A total of $59.8 million is projected for asset renewal work from FY26-30. This figure does not include the cost of asset renewal improvements in larger, multi-benefit capital projects such as the Anderson Dam Seismic Retrofit Project. Additional details on the work scheduled for FY26 are provided in Appendix A of the draft Water Utility Plan.
The draft Water Utility Plan also summarizes the funded and unfunded resources needed for the operations and maintenance of Water Utility facilities for the next five fiscal years. The Raw and Treated Water Operations Divisions have identified funded resource needs of approximately $579.5 million, and an unfunded need of approximately $22.5 million. These figures do not include resource needs for the Water Utility Capital Division or Water Supply Division. They also do not include the cost of imported water purchases.
Watersheds Summary
The draft Watersheds Plan identifies recommended asset renewal work for budgeting for the next five fiscal years. These activities are identified by the asset management program and the Watersheds Operations and Maintenance Division and are typically budgeted and executed in the Watersheds Asset Rehabilitation Program (WARP) small capital improvement project. When many assets at a single creek are due for renewal, the plan may recommend a new individual capital project.
In FY26, eight WARP projects have been scheduled at an estimated cost of $16.6 million. A total of $55.2 million is projected for asset renewal work from FY26-30. This figure does not include the cost of asset renewal improvements in larger, multi-benefit capital projects such as the Lower Llagas and Lower Guadalupe River Capacity Restoration Projects. Additional detail on work scheduled for FY26 is provided in section three of the draft Watersheds Plan.
The draft Watersheds Plan also summarizes the funded and unfunded resources needed to operate and maintain watershed assets for the next five fiscal years. The Watersheds Operations and Maintenance Division has identified funded resource needs of $365.6 million and an unfunded need of $12.3 million. These figures do not include the resource needs of the Watersheds Design and Construction Division or Stewardship and Planning Division.
Next Steps
The activities and resource needs described in the draft Plans will be evaluated throughout the budget and groundwater charge-setting processes through May 2025. The Plans will be finalized in July 2025 following the Board's adoption of Valley Water’s final budget and groundwater production charges for FY26 and will be provided to the Board at that time.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
There are no Environmental Justice impacts associated with this item.
FINANCIAL IMPACT:
There is no financial impact associated with this item. The five-year Water Utility Enterprise and Watersheds Asset Renewal Plans summarize asset renewal activities and funded and unfunded future resource needs for continuing operations and maintenance of Valley Water facilities. These resource needs will be further evaluated through Valley Water’s budget process.
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: PowerPoint
Attachment 2: Draft FY 2026-30 Asset Renewal Plan, WUE
Attachment 3: Draft FY 2026-30 Asset Renewal Plan, Watersheds
UNCLASSIFIED MANAGER: Manager
Luz Penilla, 408-630-2228