BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☒ No ☐
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Authorize the Chief Executive Officer to Execute the Grant Agreement for Funding Acquisition of Real Property (Sargent Ranch) with Peninsula Open Space Trust; Approve a Budget Adjustment in the Amount of $3,950,000 to the Fiscal Year 2026 Budget of the Safe, Clean Water and Natural Flood Protection Program’s Project D7 Conservation of Habitat Lands, Project No. 26072008; and Authorize Transfer of $3,950,000 of Project No. 26072008 Funds to the Peninsula Open Space Trust for Acquisition of Sargent Ranch.
End
RECOMMENDATION: Recommendation
A. Authorize the Chief Executive Officer to execute the Grant Agreement for Funding Acquisition of Real Property (Sargent Ranch) with the Peninsula Open Space Trust for the Safe, Clean Water and Natural Flood Protection (Safe, Clean Water) Program’s Project D7: Partnerships for the Conservation of Habitat Lands, Project No. 26072008, in the amount of $3,950,000;
B. Approve the budget adjustment in the amount of $3,950,000 from Fund 26 Operating and Capital Reserves to the Fiscal Year 2026 Budget of the Safe, Clean Water Project D7 Partnerships for the Conservation of Habitat Lands, Project No. 26072008, to fully fund the Grant Agreement for Funding Acquisition of Real Property (Sargent Ranch) with the Peninsula Open Space Trust; and
C. Authorize the transfer of funds in the amount of $3,950,000 to the Peninsula Open Space Trust to support the acquisition of Sargent Ranch, consistent with the Safe, Clean Water Project D7 Funding Criteria.
Body
SUMMARY:
Safe, Clean Water Program’s Project D7 Partnerships for the Conservation of Habitat Lands (SCW Project D7)
In November 2020, Santa Clara County voters overwhelmingly approved Measure S, a renewal of Santa Clara Valley Water District’s (Valley Water) Safe, Clean Water and Natural Flood Protection Program (Safe, Clean Water Program). The Safe, Clean Water Program identified six priorities, with Priority D being, “Restore Wildlife Habitat and Provide Open Space.” The seven projects under Priority D restore and protect wildlife habitat, with SCW Project D7 focusing on Partnerships for the Conservation of Habitat Lands.
SCW Project D7 funding helps the community acquire and protect important habitat land to preserve local ecosystems. The project supports implementation of multi-agency agreements, such as the Valley Habitat Plan, that pool mitigation or conservation dollars to protect or restore large areas of habitat land. Acquiring, restoring, connecting and protecting habitat areas helps native species to adapt to a changing climate. Large, contiguous land patches allow species room to move and adapt, to find cover from the damaging effects of climate change and to reestablish resting and rearing areas.
Funding Criteria for SCW Project D7 consist of:
• Protects, enhances and restores natural resources in Santa Clara County
• Contributes to the recovery of special status species
• Coordinates regional mitigation or conservation projects to create larger, less fragmented conservation lands that are more beneficial for wildlife and the environment
• May fulfill a portion of Valley Water’s responsibilities to the Valley Habitat Plan
• Addresses climate change effects such as habitat fragmentation and biodiversity loss by conserving and restoring habitat land
The key performance indicator (KPI) for SCW Project D7 requires that Valley Water provide up to $8 million per 15-year SCW period for the acquisition or enhancement of property for the conservation of habitat lands, with the first financial cycle being FY2022-FY2036. Under this project, $4,000,000 was already provided to the Santa Clara Valley Habitat Agency in FY24 towards the acquisition of Richmond Ranch.
In working towards meeting the SCW Project D7 commitment, Valley Water continually explores partnerships and identifies opportunities for acquisition and enhancement of habitat lands. In coordination with our conservation partner, the Peninsula Open Space Trust (POST), Valley Water identified Sargent Ranch as a high-priority conservation property that meets SCW Project D7 funding criteria. Pending Board approval, Valley Water would like to participate in pooling conservation funds for the acquisition of Sargent Ranch.
Sargent Ranch
Sargent Ranch is an approximately 5,254- acre property located at the southern end of the Santa Cruz Mountains within the southernmost portion of Santa Clara County, just south of the City of Gilroy (Attachment 1). The property is adjacent to and west of Highway 101, approximately one mile SW of the Highway 25 interchange. Natural habitats on the property include California annual grassland, coast live oak woodland, mixed riparian woodland, and spring-fed ponds, seeps, and seasonal wetlands. Numerous state and federally listed species, as well as other special-status species have been documented on or in the vicinity of Sargent Ranch, and two regionally significant wildlife linkages occur on the property. Tar Creek and Pescadero Creek are among the few watercourses in the Pajaro River basin that still support the federally-listed South-Central California Coast steelhead. In addition, the complex of natural tar pits located at Sargent Ranch is a regionally unique natural feature.
Sargent Ranch is part of the Juristac Tribal Cultural Landscape, which is in the heart of the traditional territory of the Amah Mutsun Tribal Band. POST intends to transfer the property to the Amah Mutsun Land Trust, once all of Sargent Ranch is protected. This transfer will occur in phases over several years on a timeline that meets the needs and capacity of the Amah Mutsun Land Trust.
Valley Water wishes to provide $3,950,000 of SCW Project D7 funds to POST towards their acquisition of an approximately 2,184.41-acre portion of Sargent Ranch. As described above and in the Grant Agreement for Funding Acquisition of Real Property Sargent Ranch (Attachment 2), the property substantially meets the SCW Project D7 funding criteria. Valley Water would transfer funds to POST following close of escrow with the seller, expected to occur in January 2026. Valley Water would be participating in the second phase of a three-phased acquisition of the property. The total purchase price of this second phase of Sargent Ranch is anticipated to be $23,078,708. Other conservation partners in the acquisition may include the Land Trust of Santa Cruz County; Santa Clara County Parks and Santa Clara Valley Habitat Agency.
SCW Project D7 FY2026 Budget Adjustment and Transfer of Funds to Peninsula Open Space Trust
To fully fund the agreement with POST discussed above, Board approval is being sought for a $3,950,000 budget adjustment from Fund 26 Operating and Capital Reserves to the Fiscal Year 2026 Budget of the Safe, Clean Water Project D7 Partnerships for the Conservation of Habitat Lands, Project No. 26072008. In addition, Board authorization is requested for the transfer of funds in the amount of $3,950,000 to POST to support the acquisition of Sargent Ranch consistent with the Safe, Clean Water Project D7 Funding Criteria.
Each project under the Safe, Clean Water Program has KPIs that must be met to consider the project as completed. The KPI for Project D7 is to provide up to $8,000,000 for the enhancement or acquisition of property for the conservation of habitat lands. $4,000,000 was already provided to the Santa Clara Valley Habitat Agency in Fiscal Year 2024 towards the acquisition of Richmond Ranch. Approval of staff’s recommendations will result in the completion of Safe, Clean Water Project D7 commitments for this entire FY2022-2036 Safe, Clean Water Program funding cycle.
ENVIRONMENTAL JUSTICE IMPACT:
This action is not subject to Environmental Justice Analysis because no likely adverse impacts are expected.
FINANCIAL IMPACT:
SCW Project D7’s (Project No. 26072008) current Fiscal Year 2026 Services and Supplies budget is $0. A total of up to $8,000,000 in D7 funds is allocated for expenditure under the Safe, Clean Water Program Fund (Fund 26) for the current 15-year Safe, Clean Water Program cycle (FY2022-2036). $4,000,000 was spent in Fiscal Year 2024 and approximately $50,000 of staff time has been spent, with approximately $3,950,000 of Project funds remaining. If authorized by the Board, this $3,950,000 budget adjustment will be funded from the Fund 26 Operating and Capital Reserve pertaining to Project D7’s allocation under the current 15-year cycle of the Safe, Clean Water Program. Valley Water will provide POST with a total of $3,950,000 towards the acquisition of Sargent Ranch.
CEQA:
Valley Water serves as the lead agency under CEQA and prepared a Notice of Exemption included as Attachment 3. Staff has reviewed the project and finds the Grant Agreement for Funding Acquisition of Real Property (Sargent Ranch) with Peninsula Open Space Trust is exempt from further CEQA review under CEQA Guidelines §15325, Transfer of Ownership of Interest in Land to Preserve Existing Natural Conditions and Historical Resources. Staff will file the NOE with the Santa Clara County Clerk-Recorder’s Office and State Clearinghouse after execution of the Agreement.
ATTACHMENTS:
Attachment A: Gov. Code § 84308
Attachment 1: Property Location
Attachment 2: Grant Agreement
Attachment 3: CEQA NOE
Attachment 4: PowerPoint
UNCLASSIFIED MANAGER: Manager
Lisa Bankosh, 408-630-2618