BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT:
Title
Review and Authorize Distribution of Santa Clara Valley Water District’s Capital Improvement Program Draft Fiscal Years 2024-28 Five-Year Plan.
End
RECOMMENDATION:
Recommendation
A. Review the Capital Improvement Program’s Draft Fiscal Years 2024-28 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 Valley Water’s Capital Improvement Program (CIP) prepares a Five-Year Plan for Board consideration and approval. The CIP’s Five-Year Plan describes Santa Clara Valley Water District’s (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 Five-Year Plan to the Board at the Preliminary and Draft stages for the Board to make decisions and provide direction. The final Five-Year Plan is approved in conjunction with the annual budget, wherein funding is appropriated to the projects for the following fiscal year.
CIP’s FY 2024-28 Draft Five-Year Plan
The Board reviewed the Preliminary Fiscal Years (FY) 2024-28 Five-Year Plan on January 10, 2023 in conjunction with the preliminary FY 2023-24 groundwater production charges. At that meeting, the Board provided direction regarding key capital investments under the Watershed Stream Stewardship Fund (Fund 12) and the Water Utility Enterprise Fund (Fund 61) to include in both the CIP’s FY 2024-28 Five-Year Plan and the groundwater charge projection. At that same meeting, the Board set the time and place for a public hearing to provide direction regarding modifications to certain Safe, Clean Water and Natural Flood Protection Program (Fund 26) capital projects. The public hearing was held on January 24, 2023 and the Board direction for Fund 26 projects has been incorporated into the CIP’s Draft FY 2024-28 Five-Year Plan (Attachment 1).
The Draft FY 2024-28 Five-Year Plan includes 62 funded projects distributed among the following categories: 29 Water Supply, 16 Flood Protection, 9 Water Resources Stewardship, 3 Buildings and Grounds, and 5 Information Technology projects, for a total CIP value of $9.483B. This includes Valley Water prior actuals and future years’ planned funding of $8.194B; combined with received and planned outside funding of $1.289B, 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, the Rinconada Water Treatment Plant Reliability Improvement, and the 10-Year Pipeline Rehabilitation Program as identified in the Water Supply Master Plan; the Purified Water Program to be delivered via a public-private partnership (P3); and the Pacheco Reservoir Expansion Project.
For purposes of annually updating the CIP’s Five-Year Plan, the baseline is the Board adopted Five-Year Plan from the prior fiscal year (FY 2023-27). Each year staff identifies any necessary changes to project scope, schedule and cost through our project plan updating process. These project plan updates (Attachment 2) were reviewed by the CIP Committee and Board and are reflected in the Draft FY 2024-28 Five-Year Plan. Since the Board reviewed the Preliminary Five-Year Plan on January 10, 2023, staff has incorporated the Board direction received for Fund 61 and Fund 12 projects.
Infrastructure construction projects in the Safe, Clean Water Program have experienced significant cost increases. Among the projects with a major cost escalation is Project E1: Coyote Creek Flood Protection, with an approximately $162 million increase. These increased costs impacted the financial health of Fund 26, resulting in staff’s recommendation that the Board provide direction on balancing the overall fund and delivering the voter-approved Safe, Clean Water Program. The Board provided this direction during the public hearing held on January 24, 2023, and adopted resolutions documenting its decisions regarding project modifications.
Along with the direction provided by the Board on January 10, 2023, staff has also incorporated the direction received during the Safe, Clean Water Program public hearing on January 24, 2023 into the Draft FY 2024-28 Five-Year Plan. Summarized below and included in Attachment 2 are the project plan updates (with inflated dollars).
WATER SUPPLY
Treatment Facilities:
93294059 RWTP Ammonia Storage & Metering Facility Upgrade, Fund 61 NEW PROJECT: TPC of $7.227M
Per Board direction on January 10, 2023.
FLOOD PROTECTION
Lower Peninsula Watershed:
• 10394001 Palo Alto Flood Basin Tide Gate Structure Replacement, Fund 12
SCHEDULE, SCOPE, AND COST: TPC decreased by $27.105M
Per Board direction on January 10, 2023.
West Valley Watershed:
• 26074002 Sunnyvale East and West Channels (E2), Fund 26
SCHEDULE, SCOPE, AND COST: TPC decreased by $12.445M
Per Board direction on January 24, 2023.
Coyote Watershed:
• 26324001 Upper Penitencia Creek, Coyote to Dorel Drive (E4), Fund 26
SCHEDULE, SCOPE, AND COST: TPC decreased by $12.988M
Per Board direction on January 24, 2023.
WATER RESOURCES STEWARDSHIP
Guadalupe Watershed:
• 26044001 Almaden Lake Improvements (D4.1), Fund 26
SCHEDULE, SCOPE, AND COST: TPC decreased by $46.198M
Per Board direction on January 24, 2023.
Coyote Watershed:
• 26044003 Ogier Ponds (D4.2), Fund 26
SCHEDULE, SCOPE, AND COST: TPC increased by $6.046M
Per Board direction on January 24, 2023.
For the purpose of reporting on FY 2022-23 expenditures, the FY 2024-28 Five-Year Plan includes two (2) projects that are anticipated to be completed and/or closed by June 2023, as follows:
1. Cross Valley Pipeline Extension (under ADSRP) (completed)
2. Coyote Warehouse (completed)
To support the Board in its review of the CIP’s Draft FY 2024-28 Five-Year Plan, staff has prepared a PowerPoint presentation (Attachment 3) that provides an overview of the annual CIP process and the Draft Five-Year Plan; including project plan updates, project categories, summary of project costs and other funding sources, along with projects planned for closure.
Subject to authorization by the Board, the Draft Five-Year Plan will be transmitted to cities within Valley Water’s jurisdiction and to the County of Santa Clara to solicit feedback and obtain confirmation that Valley Water’s Draft FY 2024-28 Five-Year Plan is consistent with their applicable General Plans. The Five-Year Plan will also be available online for general 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’s Draft Five-Year Plan prior to returning to the Board for approval of the Final FY 2024-28 Five-Year Plan.
ENVIRONMENTAL JUSTICE IMPACT:
While individual capital projects may have environmental justice impacts and conduct outreach and engagement to impacted communities, which will be reported to the Board accordingly, the FY 2024-28 Draft Five-Year Plan has no environmental justice impact.
The Draft 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’s Draft Five-Year Plan documents any changes to capital projects’ planned funding and expenditures and is updated and brought to the Board of Directors for approval each year in 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 Draft Five-Year Plan to Valley Water partner agencies and publishes a public notification for public review before the Board of Directors adopts the Resolution to Adopt the Five-Year Plan in May.
The CIP’s 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 recommendation for this item. The total value of the Draft FY 2024-28 Five-Year Plan is $9.483B, of which $1.289B 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: Draft FY 2024-2028 Five-Year Plan
Attachment 2: Project Plan Updates
Attachment 3: PowerPoint
UNCLASSIFIED MANAGER:
Manager
Melanie Richardson, 408-630-2035