BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Adopt a Resolution Providing for a Safe, Clean Water and Natural Flood Protection Program Independent Monitoring Committee of the Santa Clara Valley Water District - Superseding Resolution No. 21-10 Establishing New Conflict of Interest Disclosure Requirements for Members of the Safe, Clean Water and Natural Flood Protection Program's Independent Monitoring Committee.
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RECOMMENDATION: Recommendation
Adopt the Resolution PROVIDING FOR A SAFE, CLEAN WATER AND NATURAL FLOOD PROTECTION PROGRAM INDEPENDENT MONITORING COMMITTEE OF THE SANTA CLARA VALLEY WATER DISTRICT - SUPERSEDING RESOLUTION NO. 21-10 establishing new conflict of interest disclosure requirements for members of the Safe, Clean Water and Natural Flood Protection Program's Independent Monitoring Committee.
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SUMMARY:
To ensure accountability and transparency, Valley Water is required to conduct third-party audits of the Safe, Clean Water and Natural Flood Protection Program (Safe, Clean Water Program, or Program) at least once every five years. The most recent closeout audit of the 2012 Program recommended adopting a conflict of interest policy for the Independent Monitoring Committee (IMC), highlighting that both real and perceived conflicts of interest could undermine the Program’s credibility.
After reviewing options, Valley Water staff determined the most appropriate solution is to adopt a resolution replacing the IMC’s current, governing resolution, Resolution 21-10, that sets forth new conflict of interest disclosure and recusal requirements, rather than requiring IMC members to submit Form 700 filings. This approach balances transparency with practicality, addressing audit findings while respecting the IMC’s monitoring role.
Background
The Safe, Clean Water Program
The original Program was first passed by voters in 2012. In November 2020, voters in Santa Clara County overwhelmingly approved Measure S, a renewal of Valley Water’s 2012 Safe, Clean Water Program (Renewed Program). The Renewed Program addresses the following six community priorities:
Priority A: Ensure a Safe, Reliable Water Supply
Priority B: Reduce Toxins, Hazards and Contaminants in Our Waterways
Priority C: Protect Our Water Supply and Dams from Earthquakes and Other Natural Disasters
Priority D: Restore Wildlife Habitat and Provide Open Space
Priority E: Provide Flood Protection to Homes, Businesses, Schools, Streets and Highways
Priority F: Support Public Health and Public Safety for Our Community
Each priority includes operational and/or capital projects with clearly defined key performance indicators (KPIs) to track long-term performance. KPIs help Valley Water monitor progress, identify potential issues, and uphold accountability.
Valley Water publishes annual reports, providing financial information, updates on the progress of each priority area, accomplishments, opportunities, and challenges.
Independent Monitoring Committee (IMC)
The IMC was established to ensure transparency and accountability to voters. Resolution 21-10 (Attachment 1), approved in 2021, defines the IMC’s role in reviewing annual Program reports and 5-year implementation plans. In addition, independent professional audits must be conducted at least every five years, as required by Resolutions 12-62 and 20-64 (Attachments 2 and 3).
In March 2023, following IMC’s recommendation, the Board directed staff to conduct two separate independent audits:
1. A closeout audit of the 2012 Program (Measure B).
2. An audit of the Renewed Program (Measure S).
The 2012 Program audit was completed in 2024; the Renewed Program audit is underway and scheduled for completion in 2025.
Audit Recommendation - Conflicts of Interest
The 2012 Program closeout audit, conducted by Moss Adams LLP, recommended adopting a conflict of policy for the IMC (Attachment 4). Management agreed and committed to evaluating options by fall 2024. Initially, staff considered updating Valley Water’s Conflict of Interest Code under the Political Reform Act, which would require IMC members to file Form 700s. However, staff concluded that requiring Form 700 filings was unnecessary and instead is recommending that the Board adopt the attached Resolution, which will supersede Resolution 21-10 and will require IMC members to disclose potential conflicts of interest and recuse themselves from voting on matters in which they have a potential conflict.
* Following questions and further analysis after the posting of the initial agenda item, staff has refined the proposed conflict of interest language to more clearly limit the IMC’s disclosure requirements to conflicts arising from projects or matters directly before the Committee.
For ease of reference, the new proposed conflict of interest language is set forth below:
“ [revised section I.E.] …. Independent of section 1.D. above, all Committee members shall have an obligation to promptly disclose to the Committee Chair, other Committee members, and Valley Water staff supporting the Committee, a potential financial conflict of interest involving a matter that is before the Committee, namely:
any real property interest worth $2,000 or more of the Committee member or their spouse/domestic partner within 1,000 feet of an area affected by a flood mitigation/protection project, or proposed flood mitigation/protection project, being reviewed by the Committee;
a. any source of income to the Committee member or their spouse/domestic partner of $500 or more from an entity doing work on a Valley Water matter before the Committee and/or concerning an entity which receives grant funding from Valley Water on a matter before the Committee;
b. any ownership or investment interest of the Committee member or their spouse/domestic partner worth $2,000 or more in a contractor, subcontractor, or consultant that does business with Valley Water or is proposing to do business with Valley Water on a matter being considered by the Committee;
c. any financial interest worth $500 or more of the Committee member or their spouse/domestic partner relating to any existing or proposed litigation against Valley Water; or
d. a membership, employment, management, or governance position in any entity that is receiving or seeking grant funding from Valley Water or the Safe Clean Water Program involving a matter before the Committee, whether held by the Committee member or her/his spouse/domestic partner.
If a Committee Member has a potential financial conflict of interest with respect to any matter before the Committee, the member must publicly disclose this conflict of interest at a public meeting discussing the matter, including a brief description of the nature of the conflict, but may participate in discussion or debate concerning the matter. The Committee Member must, however, recuse themselves from any Committee vote on the matter. Failure to do so may be grounds for removal from the Committee by the Board of Directors.”
In addition to updating the conflict of interest requirements, the new resolution also contains minor, non-substantive revisions to Section II (Section Title correction to align with Resolution 21-10) and Section V of Resolution 21-10.
The proposed changes to Resolution 21-10 are shown in redline in Supplemental Attachment 1, and the proposed Resolution is Supplemental Attachment 2.
In compliance with Section 5 of Resolution 21-10, all IMC members received 72-hour written notice regarding these proposed changes.
ENVIRONMENTAL JUSTICE IMPACT:
There are no environmental justice impacts associated with this item. This action is unlikely to or will not result in disproportionate impacts on any specific communities relative to the general population from the implementation of this project/program.
FINANCIAL IMPACT:
There is no financial impact associated with this item.
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: SCVWD Resolution 21-10
Attachment 2: SCVWD Resolution 12-62
Attachment 3: SCVWD Resolution 20-64
Attachment 4: 2012 Program Closeout Performance Audit & Management Response
Attachment 5: Redlined Resolution 21-10, Proposed Revisions
Attachment 6: Resolution
*Supplemental Board Agenda Memo
*Supplemental Attachment 1: Redlined Resolution 21-10, Proposed Revisions
*Supplemental Attachment 2: Resolution
*Handout 8.1-A: Director Ballard
UNCLASSIFIED MANAGER: Manager
Luz Penilla, 408-630-2228