BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Consider the October 27, 2025, Water Supply and Demand Management Committee Recommendation to Approve the Proposed Agreement with the Wheeler Ridge-Maricopa Water Storage District for 6,234 Acre-Feet of Storage Capacity in Sites Reservoir for up to $618,500, Increasing Santa Clara Valley Water District’s Project Participation Level from 0.2% to 0.66%, for a Total of 9,351 Acre-Feet of Storage.
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RECOMMENDATION: Recommendation
Consider the October 27, 2025, Water Supply and Demand Management Committee recommendation to:
A. Approve execution of the proposed assignment Agreement with Wheeler Ridge-Maricopa Water Storage District for 6,234 acre-feet of storage capacity in Sites Reservoir for up to $618,500, which would increase Santa Clara Valley Water District’s Project participation level from 0.2% to 0.66%, for a total of 9,351 acre-feet of storage; and
B. Provide feedback and recommendations to staff as necessary.
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SUMMARY:
The Sites Reservoir Project (Project) is a proposed 1.5 million acre-foot (AF), off-stream reservoir that would be located north of the Delta approximately 10 miles west of the town of Maxwell in Colusa County. The Project is designed to divert excess flows on the Sacramento River during storms and store it in Sites Reservoir, which can then be released to provide water supply during dry years. In addition to providing water supply for Project participants, the Project will provide public benefits including environmental water supply, recreation facilities, and regional flood benefits. Current members of the Sites Project Authority (Authority) and Reservoir Committee (Participants) include both Central Valley Project water agencies north of the Delta and State Water Project (SWP) water agencies south of the Delta. There is also state and federal participation in the Project through the California Department of Water Resources and U.S. Bureau of Reclamation. The Project is one of several investment options evaluated in the Water Supply Master Plan 2050 (WSMP) planning process to help ensure water supply reliability.
Santa Clara Valley Water District (Valley Water) currently has a 0.2% participation level in the Project, which corresponds to a storage capacity of 3,117 AF and an expected dry year yield of 690 acre-feet (AF) of water. In June 2022, Valley Water’s Board approved a request to be placed on the waitlist to increase Valley Water’s participation level in the Project up to a maximum of 2.65% participation, which corresponds to a storage capacity of 37,404 AF and an expected dry year yield of 8,270 AF.
Valley Water currently has the opportunity to increase its participation level in the Project from 0.2% to 0.66%. Wheeler Ridge-Maricopa Water Storage District (Wheeler Ridge), another Sites participant and SWP contractor, is interested in reducing its participation in the Project from 19,014 AF of storage capacity to 12,780 AF of storage capacity, a reduction of 6,234 AF. Wheeler Ridge has offered to assign 6,234 AF of storage capacity to Valley Water in exchange for Valley Water reimbursing Wheeler Ridge for their planning costs paid to date for this storage capacity, which is $608,500. In addition, Valley Water would also reimburse Wheeler Ridge for staff and attorney costs associated with the development and execution of the Assignment Agreement, up to a maximum reimbursement of $10,000.
Project participation is currently governed by the Reservoir Project Agreement which bases planning costs off of a participant’s requested annual yield. Requested annual yield is a metric that was developed in the early stages of the project as a communication tool and is only used for setting participation levels during the planning phase of the Project. The 6,234 AF of storage capacity Wheeler Ridge is offering to assign to Valley Water corresponds to 1,000 AF of requested yield. Total planning costs to date for the Project are $608.50 per acre-foot of requested yield, which totals $608,500 for 1,000 AF of requested yield. Therefore, Valley Water’s total costs for the assignment is approximately $618,500, accounting for reimbursement of both the Project planning costs and for the development of the Assignment Agreement.
If Valley Water and Wheeler Ridge execute the attached Assignment Agreement (Attachment 1), the Agreement would then be brought before the Sites Authority Board and Reservoir Committee for their consent. The Authority and each Project Agreement Member needs to provide written consent to the assignment for it to become effective.
If this Assignment Agreement becomes effective and Valley Water increases its participation level to 0.66%, Valley Water will still have the option to withdraw from the Project or adjust its final participation level when it makes its final participation decision.
Project Costs & Water Supply Benefits
The Project capital costs are estimated to be in the range of $6.2 billion to $6.8 billion (in 2025 dollars), with an additional 10-15% construction contingency for change orders during construction. The overall costs including the contingency could be in the range of $6.8 billion to $7.8 billion. If Valley Water moves forward with the assignment, the Valley water’s share of the estimated capital cost range would increase from $15 million to $17 million at its current 0.2% participation level to approximately $45 million to $52 million at the increased 0.66% participation level. Cost ranges for Valley Water’s current participation level, the increased participation level if the assignment is approved, and maximum waitlisted participation level are shown in Table 1 below.
At Valley Water’s existing 0.2% participation level (3,117 AF of storage), the average dry year yield is expected to be approximately 690 AF per year. If Valley Water moves forward with the assignment and increases its participation to 0.66% (9,351 AF of storage), the average dry year yield is approximately 2,070 AF per year.
Table 1. Estimated Project Costs and Water Supply Yield by Participation Level.
|
|
0.2% Participation (Existing Level) |
0.66% Participation (After Assignment) |
2.65% Participation (Max Waitlisted) |
|
Storage Capacity Allocation (AF) |
3,117 |
9,351 |
37,404 |
|
Requested Yield (AF) |
500 |
1,500 |
6,000 |
|
Modeled Average Annual Yield (AF) |
380 |
1,140 |
4,550 |
|
Modeled Dry Year Annual Yield (AF) |
690 |
2,070 |
8,270 |
|
Estimated Capital Costs (millions $2025) |
$15M - $17M |
$45M-$52M |
$181M- $207M |
|
Annualized Unit Cost ($/AF) |
$1,400/AF - $1,800/AF |
Next Steps
As the Project moves towards the Investor Commitment Period, Valley Water staff will continue analyzing the Project’s costs, benefits, risks, and participation terms in preparation for making a recommendation to the Board on our final participation decision through the adaptive management process of the WSMP 2050. Staff are continuing to explore other opportunities to partner with Sites participants to potentially increase our participation if analyses indicate that increased participation is beneficial. Staff anticipate returning to this Committee in early 2026 for the next update.
ENVIRONMENTAL JUSTICE IMPACT:
There is no environmental justice impact associated with this item.
FINANCIAL IMPACT:
Funding to cover the up to $618,500 payment for 6,234 acre-feet of Wheeler Ridge’s storage capacity in Sites Reservoir is included in the FY 2025-26 Adopted Budget under the Imported Water Program project, Project No. 91131004. Future costs associated with the increased participation level of 0.66% will be included in the Proposed FY 2026-27 & FY 2027-28 Operating and Capital Rolling Biennial Budget and in long-term financial modeling.
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. The proposed action is administrative and pertains to the modification of Valley Water’s Project participation and allocation under an existing project planning agreement.
The Sites Project Authority certified its Final Environmental Impacts Report for the Project in November 2023. Valley Water will make responsible agency findings on the FEIR under CEQA when required for future Board action.
ATTACHMENTS:
Attachment 1: Agreement
Attachment 2: PowerPoint
UNCLASSIFIED MANAGER: Manager
Vincent Gin, 408-630-2633