BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Consider the March 24, 2025, Water Supply and Demand Management Committee Recommendation to Increase Santa Clara Valley Water District’s Storage Capacity to a Minimum of 63,560 Acre Feet, or up to 70,000 Acre Feet if Space Becomes Available, as Part of the B.F. Sisk Dam Raise and Reservoir Expansion Project, Project No. 91131006, and Authorize an Increase of Project Planning Costs From $2,057,636 to $2,187,646.
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RECOMMENDATION: Recommendation
Receive an update and discuss the B.F. Sisk Dam Raise and Reservoir Expansion Project and consider the March 24, 2025, Water Supply and Demand Management Committee’s recommendations to:
A. Increase Santa Clara Valley Water District’s storage capacity to a minimum of 63,560 Acre Feet, or up to 70,000 Acre Feet if space becomes available;
B. Authorize up to $2,187,646 to cover Santa Clara Valley Water District’s share of Project planning costs; and
C. Provide feedback and recommendations to staff as necessary.
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SUMMARY:
On February 25th, Santa Clara Valley Water District’s (Valley Water) Board approved execution of the First Amended and Restated B.F. Sisk Dam Raise and Reservoir Expansion Project (Project) Activity Agreement, a key Project agreement required to continue participation in the Project. The Board also authorized increasing Valley Water’s total share of storage from 60,000 Acre Feet (AF) to 60,398 AF and funding up to $2,057,636 to cover Project planning costs through February 2026. At the time of the Valley Water Board vote, staff was aware that five of the six other Participants also executed the amended Activity Agreement, while San Luis Water District (SLWD) had not yet made a decision.
Subsequent to Valley Water’s Board decision, SLWD elected to withdraw from the Project at their February 25th Board meeting. SLWD’s share of the Project storage capacity was 4,527 AF. Under the terms of the Activity Agreement, a withdrawing Participant’s storage capacity is automatically allocated to the remaining Participants in proportion to their participation percentages; however, one or more remaining Participants or Reclamation may also volunteer to assume all or a larger portion of withdrawing Participant’s share. Valley Water’s proportional share of the reallocated storage capacity is 3,162 AF, which would increase Valley Water’s total storage capacity from 60,398 AF to 63,560 AF. This would increase Valley Water’s share of capital costs from approximately $485 million to $511 million. At its March 24 meeting, the Water Supply and Demand Management Committee approved staff’s recommendation that Valley Water agree to assume its share of SLWD’s storage capacity.
The Water Supply and Demand Management Committee also approved staff’s recommendation that the Board authorize an increase in Project storage of up to 70,000 AF if space becomes available. This would allow Valley Water to take on SLWD’s entire storage capacity if other participants are not able to take their proportional shares, as well as provide for a small amount of additional storage to allow Valley Water to respond quickly to any future small adjustments in Project participation. At 70,000 AF of storage capacity, Valley Water’s share of the capital costs would be approximately $563 million. At 60,398 AF of storage capacity, the Project could cause groundwater rates in North County Zone W-2 M&I to increase by up to $228/AF by FY 34, which would translate to an incremental $7.86 per month to the average household. At 70,000 AF, the incremental rate for the average household would increase to $9.21 per month.
At the February 25th Board meeting, Valley Water’s Board authorized Project planning funding of up to $2,057,636 through February of 2026. However, SLDMWA revised their planning funding request in late February to account for unspent funds carried over from the last fiscal year, reducing Valley Water’s funding share. If Valley Water assumes its proportionate share of the space vacated by SLWD, our share of planning costs will be $1,839,048. At 70,000 AF of storage, which allows Valley Water to take on SLWD’s full share and provides for future small adjustments in participation, Valley Water’s proposed cost share would be $2,187,646. Staff therefore recommend that the Board follow the Water Supply and Demand Management Committee recommendation to authorize funding of up to $2,187,646 to cover contingencies and to help ensure the Project is fully subscribed moving forward.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
There are no environmental justice and equity impacts associated with this item.
FINANCIAL IMPACT:
Valley Water’s maximum cost share to cover Project planning costs would be $2,187,646 under this Board item. There are adequate funds included in the Fiscal Year 2024-2025 IW San Felipe Division Deliveries Project budget, Project No. 91131006.
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
UNCLASSIFIED MANAGER: Manager
Vincent Gin, 408-630-2633