Cupertino City Council
June 6, 2023

INTRODUCTION AND EXECUTIVE SUMMARY

OVERVIEW
The City of Cupertino ("City") has engaged SCI Consulting Group to study, make recommendations, and assist in the implementation of a funding approach for its municipal separate storm sewer system1 ("MS4") including environmental programs, maintenance and operations, and compliance with all state and federal regulations associated with the National Pollutant Discharge Elimination System2 ("NPDES") permit.

Since 2013 the City's Public Works Department has developed several planning documents pertaining to its Clean Water and Storm Protection program ("Program"). These include the Trash Reduction Plan (2014 ), the Green Infrastructure Plan currently under development (to be completed in 2019) and the Storm Drain Master Plan ("SDMP," completed in 2018).

These plans made it clear that the Program would need to expand its levels of service to achieve the goals of responsible environmental stewardship and smart investment in the City's aging infrastructure.

In 2018, the City embarked on a two-phase project to determine the feasibility of implementing a dedicated, sustainable revenue stream to fund the City's Clean Water and Storm Protection needs. The first phase included exploring potential funding sources, estimating user rate ranges for various budget scenarios, and conducting a public opinion survey of Cupertino residents and property owners to determine storm drain-related priorities and willingness to support a fee for these services. The City Council has now embarked on the second phase: implementation of a funding mechanism. This Fee Report is the first step in that process.

CITY'S FACILITIES

CITY OF CUPERTINO
The City operates and maintains a storm drainage system, as it is empowered to do per Government Code Sections 38900 and 38901. This system is comprised of integrated storm drain pipes, inlets, outfalls. culverts, and ditches which divert stormwater to local creeks to prevent flooding. As the community grew and neighborhoods and business districts expanded, the City's storm drainage system was developed. When the first NPDES permit was issued in the early 1990s, the City recognized the fiscal burden these new clean water requirements would bring and established a property fee on most parcels to fund this activity.

Since that time the City has worked diligently and efficiently to continue meeting the everincreasing requirements of the NPDES permit, while the State's clean water requirements have evolved into a comprehensive environmental stewardship program. 1 In this report, the terms "storm sewer," "storm drainage," "storm protection," and "stormwater" are used interchangeably, and are considered to be synonymous. 2 Created in 1972 by the Clean Water Act, the NPDES permit program is authorized by the EPA to allow state governments to perform many permitting, administrative, and enforcement aspects of the program.

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The operations and maintenance ("O&M") side of the Program has also developed many activities that support a clean water supply and maintain the City's aging infrastructure to protect the neighborhoods and businesses from local flooding . On average, the industrystandard life expectancy of a storm drain system is approximately 60 years. The majority of the City's storm drain pipes were installed approximately 50 or more years ago, leaving the City with a system that is approaching the end of its useful life. Moreover, as noted in the Storm Drain Master Plan, so'me of the drainage system does not have adequate capacity.

STORMWATER FUNDING BACKGROUND
The City historically has funded its clean water program and storm drain maintenance activity primarily through two sources: The General Fund and the Storm Drainage Service Charge3 established in 1992. The 1992 charge, established at $12 per year for single-family residential and $144 per acre for commercial parcels, has not been increased since its inception.
4 For more than a decade, the General Fund has carried the increasing burden of the Program. As a result, the City has needed to limit capital expenditures and keep operations and maintenance activities to a less than desirable level of service, mostly responding to storm-related emergencies and basic regulatory compliance.

The scale and projected needs of the system in a time of competing demands on the General Fund point toward the need for developing a separate, dedicated and sustainable funding stream. As many other municipalities in California have done, including San Jose and Palo Alto, the City of Cupertino is considering developing a new, additional, more secure and (
predictable source of funding for the Program. This Fee Report is the first step in that ( process, should the City decide to proceed.

LEGAL REQUIREMENTS OF STORMWATER FEE

CITY OF CUPERTINO
This Report calculates the Stormwater Fee as a property-related fee. Property-related fees are subject to the requirements of Articles XIIIC and D of the State Constitution, which were approved by voters in 1996 through Proposition 218, as well as the Proposition 218 Omnibus Implementation Act (Government Code Sections 53750 - 53758).

Any property-related fee must comply with requirements of Article XIIID, Section 6. These include the following :
• Revenues derived from the fee shall not exceed the funds required to provide the property-related service;
• Revenues derived from the fee shall not be used for any purpose other than that for which the fee was imposed;
• The amount of a fee upon any parcel or person as an incident of property ownership shall not exceed the proportional costs of the service attributable to the parcel; 3 Cupertino Municipal Code Chapter 3.36.
4 This "freeze" on the stormwater fees are due primarily to the stringent requirements of Proposition 218 for a ballot measure to increase fees.
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• No fee may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question. Fees based on potential or future use of service are not permitted. Standby charges, whether characterized as charges or assessments, shall be classified as assessments and shall not be imposed without compliance with the assessment section of the code; and
■ No fee may be imposed for general governmental services including, but not limited to, police, fire, ambulance or library services where the service is available to the public at large in substantially the same manner as it is to the property owners. 2019 CLEAN WATER AND STORM PROTECTION FEE REPORT
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FACILITIES AND SERVICES

CITY OF CUPERTINO
The City operates and maintains a municipal separate storm sewer system within the City's boundaries. The system is made up of man-made drainage systems including, but not limited to, curbs and gutters, ditches, culverts, pipelines, manholes, catch basins (inlets) and outfall structures. The natural creek system that runs throughout the City serves as the backbone of the City's system. While primary maintenance of those creeks is the responsibility of the Santa Clara Valley Water District, the City, through its Program, collaborates with the Water District for creek stewardship and educational activities. The system serves the entire City.

The primary storm drainage service provided by the City is the collection, conveyance, and overall management of the stormwater runoff from parcels. By definition, all parcels that shed stormwater into the City's system, either directly or indirectly utilize, or are served by, the City's storm drainage system. The need and necessity of this service are derived from property improvements, which historically have increased the amount of stormwater runoff from the parcel by constructing impervious surfaces such as rooftops, pavement areas, and certain types of landscaping that restrict or retard the percolation of water into the soil lens beyond the conditions found in the natural, or unimproved, state. As such, open space land (in a natural condition) and agricultural lands that demonstrate stormwater absorption equal to or greater than natural conditions are not charged a fee. Other vacant land that was once improved or has been prepared for future improvements do not qualify as open space or natural land and will typically be charged a fee.

The 2018 SDMP contains a thorough set of maps and lists of various elements within the stormwater system. Those descriptions are the basis for this Report. 2019 CLEAN WATER AND STORM PROTECTION FEE REPORT
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FINANCIAL NEEDS AND REVENUE REQUIREMENTS

SUMMARY OF CLEAN WATER AND STORM PROTECTION SYSTEM NEEDS

CITY OF CUPERTINO
As part of. the fee implementation task, the SCI team conducted an analysis of the City's Clean Water and Storm Protection system needs. This analysis is contained in a technical memorandum dated February 20, 2019 from the firm of Larry Walker Associates and is included in Appendix A of this Report. This analysis reviewed existing revenues and estimated the true costs to the Program of preventing local flooding and remaining in compliance with the current NPDES permit, commonly known as the Municipal Regional Permit ("MRP") issued by the Water Board to all Phase 1 permittees in the San Francisco Bay area. The first MRP was issued in 2009. The second MRP was issued in 2015 and is referred to as MRP 2.0.

PROGRAM REVENUES
The first step of the analysis was to review the revenues available to the City's Program.

Based on information provided by the City, the existing revenues are projected through Fiscal Year 2023-24 as shown in Table 1 below. These values are drawn from Appendix A, Table 1.

TABLE 1 - SUMMARY OF PROGRAM REVENUES
, Shown in thousands
1 Current Future
[~e~enue_Category 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Stormwater Charges $ 370 $ 370 $ 370 $ 370 $ 370 $ 370
Other Revenue $ ~ $ 9 $ 9 $ 9 $ 9 $ 9
General Fund Transfer In $ 818 $ . $ . $ . $ . $
TOTAL Revenues $ 1,197 $ 379 $ 379 $ 379 $ 379 $ 379

PROGRAM COSTS
The City's Program is influenced primarily by the requirements to prevent local flooding and to comply with the MRP 2.0. Cost estimates were based on budgetary and supplemental information provided by the City. In broadly assessing the Program's costs and following the City's current Budget structure, two main categories were used: Operations and Maintenance ("O&M") Costs, and Clean Water Program5 Costs. These categories reflect how the City generally allocates funds to implement its day-to-day storm drainage-related operations.
5 The City's Budget document uses "Non-Point Source" as the name for the Clean Water program .
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More detailed information can be found in Appendix A. The program costs are summarized in Table 2 below. The total costs shown in the right-hand column is for the five future years.

These values are drawn from Appendix A, Table 2.

Clean Water

TOTAL COSTS
TABLE 2- SUMMARY OF PROGRAM COSTS
Current
18-19
$ 477
$ 721
$1,197
Future
19-20
~
22-23
Shown in thousands
23-24 TOTAL
891 918 964 994 1,025 4,792
$ 1,443 $ 1,487 $ 1,550 $ 1,597 $ 1,647 $ 7,724

ANNUAL REVENUE REQUIREMENT
The proposed fee is scheduled to begin in Fiscal Year 2019-20. Therefore, the data presented in Appendix A for prior years do not factor into the analysis. What remains is a fiv~-year window in which projected revenue sources and projected costs are presented. (
Over the five fiscal years, the projected costs exceed revenues by $6.0 million. This is the amount that the proposed Clean Water and Storm Protection Fee would need to generate in order to bring the Program into balance. The resulting revenue requirement is therefore (

CITY OF CUPERTINO
based on an annual revenue, adjusted for inflation at 3.0% per year over the five-year period, that totals $6.0 million over those five years. These projections are summarized in Table 3 below.

Category
Expenditures
Shortfall
TABLE 3-ESTIMATE OF ANNUAL REVENUE REQUIREMENT
Current
18-19
Future
19-20
na , ..

Shown in thousands
1,487 1,550 1,597 1,647
$(1,108) $(1,171) $(1,218) $(1,268)
TOTAL
7,724
$ (5,829)
Revenue Requirement * $ 1,098 $ 1,131 $ 1,165 $ 1,200 $ 1,236 $ 5,828 * Revenues are increased by 3.0% annually for inflation 2019 CLEAN WATER AND STORM PROTECTION FEE REPORT
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RATE STRUCTURE ANALYSIS
Proposition 218 states that the amount of a fee upon any parcel shall not exceed the proportional costs of the service attributable to the parcel. It also states that no fee may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property. As noted earlier, all properties that shed stormwater into the City's system are served by that system. In compliance with Proposition 218, the proposed 2019 Clean Water and Storm Protection Fee will only be imposed on properties that shed water, directly or indirectly, into the City's system. Additionally, the amount of use attributed to each parcel is proportionate to the amount of stormwater runoff contributed by the parcel, which is, in turn, proportionate to the amount of impervious surface area on a parcel (such as building roofs and pavements).

SINGLE-FAMILY RESIDENTIAL PARCELS AS BENCHMARK

CITY OF CUPERTINO
The most widely used method of establishing storm drainage rates6 is to use the average or median single-family residential parcel? ("SFR") as the basic unit of measure, or benchmark, which is called the single-family equivalent, or "SFE." Since the metric for this fee structure is impervious surface area, a benchmark amount of impervious surface area ("ISA") must be established.

Cupertino has a wide range of sizes of SFR parcels, which have varying percentages of impervious area ("%IA"). Generally, smaller, denser parcels tend to have a higher proportion of impervious area than larger, less dense parcels, which tend to have a lower percentage of impervious area. (This can be best visualized by the fact that larger residential properties tend to have a larger proportion of pervious landscaping, and therefore a smaller proportion of impervious area.) Therefore, the range of SFR was broken into four size categories as shown in Table 4 below with the medium category containing the largest number of parcels.

The City's 2018 SDMP includes an analysis of the % IA for Cupertino. 8 The SDMP findings of %IA for various land uses were used as a basis for this Report. Since the categories in the SDMP don't completely align with the rate categories established in this Report, some adjustments were made. A summary of these adjustments is shown in Appendix 8.

The median sized SFR parcel is 0.17 acre (approximately 7,405 square feet), which is also the median parcel size for the medium SFR rate category. That size of parcel is considered 6 Stormwater Utility Survey, 2017, page 2, Western Kentucky University. 7 The SFR category also includes multiplex parcels of two, three or four units, since the lot development characteristics do not vary significantly from the SFR parcels of similar size.

In all, this includes the approximately 496 multiplex parcels in the City, which were distributed to the same four parcel size categories as the other SFRs. Any residential structure with five or more units is categorized as multi-family residential ("MFR"), which is calculated separately. 8 Section 2.2.3, page 2-6 of the City of Cupertino Storm Drain Master Plan. 2019 CLEAN WATER AND STORM PROTECTION FEE REPORT
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to fall into the low-density residential category of the SDMP, which is reported to have a %IA of 55%. Therefore, the median parcel in Cupertino contains 4,073 square feet of impervious surface area ("ISA") as shown in the calculation below. This will be used as the benchmark (1 SFE) for all other size categories and other non-residential land uses. 1 SFE = %IA x Median Parcel Size
= 55% X 7,405 sf
4,073 sf
This becomes the basis for calculating the SFEs for all other types of land uses. The %IA for each size category was applied to the median size parcel in that category to calculate its median ISA. The SFE per parcel for each size category is a simple ratio of the median ISA for each category to the ISA (4,073 sD for the benchmark category of medium-sized parcels as shown in the following formula:

SFE p er Parcel =

SPECIAL NOTES ON CONDOMINIUMS
Median ISA
4,073
Condominium units are particularly difficult to categorize as they are often on very small (
individual parcels yet share larger common areas that are made up of landscaped (pervious) ( areas, parking lots and shared roofs, and other recreational uses (either pervious or impervious). The data for these variables is not readily available, so some assumptions are

CITY OF CUPERTINO
made about their characteristics.

Condominiums can be grouped into two categories: High density where they tend to have units on multiple fioors (similar to apartment buildings), and medium density where they are only one unit high (i.e., townhomes). For the medium-density condominium units, the presence of common areas with landscape features make them very similar to the small-lot SFR parcels, and therefore they are assigned the same ISA (3,354 sn and SFE per parcel as a small-lot SFR parcel.

For the high-density condominium units, further analysis was done. Fourteen condominium complexes with 1,246 unit~ were identified throughout the City. Using aerial photographs, measurements were made of the impermeable areas. A strong trend was found such that the average ISA per unit was 1,099 square feet. Therefore, the high-density condominiums are assigned an ISA of 1,099 square feet. This is 33% of the ISA for the medium-density condominiums.

Table 4 below shows a summary of the SFEs for single-family residential parcels. 2019 CLEAN WATER AND STORM PROTECTION FEE REPORT
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TABLE 4- SUMMARY OF SINGLE·FAMIL Y RESIDENTIAL PARCELS
I
Median
Total Total Parcel SFE pe r
! Lot Type Parcel Siz_e Rii_nge Parcejs* Acres* Size % I A** IS A Parcel _ Acres SF SF
Small under 0.13 1,526 159 4,792 70% 3,354 0.82
Medium 0.13 to 0.22 8,958 1,510 7,405 55% 4,073 1.00
Large 0.23 to 0.40 1,542 420 11,326 45% 5,097 1.25
Extra Large over 0.40 345 460 27,878 35% 9,757 2.40
Condos l (one story) 2,221 95 na na 3,354 0.82
Condos 2+ (2+ stories) 1,246 46 na na 1,099 0.27
15,838 2,690
* Total Parcel s and Acres do not factor into th e bas is of the SFE cal culation; they are shown for informational purposes only.

NON-SINGLE-FAMILY RESIDENTIAL PARCELS

CITY OF CUPERTINO
Unlike the SFR parcels, the non-SFR parcels can vary widely in size as well as characteristics. For this reason, the parcels have been grouped into land use categories according their %IA characteristics (as shown in Appendix B). The SFE for each land use category is based on a per-acre basis, so size can be a variable in the calculation of the fee.

The SFE-per-acre can be computed for each category using the following formula:

SFEperAcre (43,560 sf I acre) x % I A
4, 073 sf
where 4,073 square feet is the amount of ISA in one SFE.

Table 5 below shows a summary of resulting the non-single-family parcel SFEs for each non-SFR land use category.
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TABLE 5- SUMMARY OF NON-SFR PARCELS
I Total Total SFE per
1 Land Use Category Parcels* Acres* % I A** Acre
Multi-Family (Apartments) 79 200 65% 6.95
Commercial/ Retail/ lmdustrial 256 441 85% 9.09
Office 217 372 65% 6.95
Church/ Institutional 39 98 55% 5.88
School (w/playfield) 16 329 40% 4.28
Park 3 53 15% 1.60
Vacant (developed) 134 153 5% 0.53
Open Space/ Agricultural 240 1,192 na
TOTAL 984 2,837
* Total Parcels and Acres do not factor into the basis of the SFE calculation; they are shown for informational purposes only.
** %IA is taken from Appendi x B
Each individual parcel's SFE is then calculated by multiplying the parcel size (in acres9) times the SFE per acre for that land use category, as shown in the following formula:

SFE = Parcel Size (acres) x SFE p er Acre
DEVELOPED VACANT10 PARCELS
Developed vacant parcels are devoid of obvious structures or improvements but are distinguished from undeveloped vacant land by one of several characteristics. Typically, a developed vacant parcel has been graded to be ready for building construction (possibly as part of the original subdivision or adjacent street grading). In some cases, the parcel previously contained a structure or improvement that has been removed, but its fundamental alteration from a natural state remains. Although developed vacant parcels may have significant vegetative cover, the underlying soil conditions resulting from grading work or previous improvements usually cause some rainfall to runoff into the storm drainage system.

The %IA for developed vacant parcels is reasonably assumed to be 5%, which is also used as a minimum value of imperviousness for any land use type (excluding open space and agricultural land - see next section). Vacant parcels that have significant impervious paving remaining from prior improvements may be classified as Commercial or some other classification best representing the %IA of the parcel. 9 Parcel size for non-SFR parcels is calculated to the tenth of an acre or portion thereof. 10 "Vacant" in this Report refers to land that is devoid of improvements. It does not refer to land with vacant buildings or improvements, which would continue to shed water to the MS4 the same as if they were occupied.
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OPEN SPACE AND AGRICULTURAL PARCELS ARE Nor CHARGED
The City's storm drain system was developed in response to land development over the many decades. Tracts of land that have not yet been developed, or have been used primarily for agricultural purposes, have not created an impact on the system beyond the natural condition, and are therefore considered to receive no service from the system. In practical terms, these parcels generate no additional storm runoff beyond the natural condition. For these reasons, open space and agricultural parcels are not charged a Fee.

HYBRID PARCELS
Some parcels may have both improvements as well as significant open space areas. For such parcels that contain a residence, the open space acreage does not increase the fee because residential parcels are not charged on a per-acre basis. Rather, they are charged based on the median ISA for that size category.

For such parcels that contain non-residential improvements (which are charged on a peracre basis), the chargeable acreage should be adjusted downward to reflect the improved area only, leaving the open space area "invisible" to the fee calculation. Where parcels have been found in this category, that acreage adjustment has been made.

Low IMPACT DEVELOPMENT RATE ADJUSTMENT

CITY OF CUPERTINO
The current NPDES Permit requires certain properties to construct stormwater treatment and attenuation facilities, also known as low impact development ("LID"). These facilities are typically designed to capture a portion of the storm flows, retain them, and enable them to infiltrate into the ground. While this is intended to help filter pollutants from the water, it also can reduce the parcel's stormwater runoff quantity to some extent, which in turn can reduce a parcel's impact on the system. In addition to NPDES-required LID, other parcel owners may elect to follow LID guidelines voluntarily.

The section of the MRP that requires LID facilities is Provision C.3 (New Development and Redevelopment). Compliance with C.3 is a well-established and convenient metric on which to base customer activities that further Program goals and affect Program costs. C.3 compliance can have impacts to many of the Program elements. In order to analyze the extent to which C.3 compliance will impact Program costs, each Program element was rated with one of four impact levels: none (0%), minor (25%), medium (50%), and major (80%).

By applying those impact levels to the costs of each Program element, it was determined that compliance with Provision C.3 equates to approximately 25% of the overall Program costs. Table 6 below shows the results of that analysis.

Based on that analysis, a commensurate reduction in the fees for certain C.3-compliant parcels is warranted. However, C.3 compliance brings with it some additional administrative burdens to verify ongoing compliance. While this burden is relatively minor, for single-family parcels where the annual fee is also relatively small, the administrative burden negates the LID benefits to the program. Therefore, single-family residential parcels do not qualify for the reduced fee. Conversely, C.3 compliance for condominiums is typically accomplished on a collective basis, so the minor administrative burden is spread across many parcels 2019 CLEAN WATER AND STORM PROTECTION FEE REPORT
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making it insignificant. Therefore, a 25% reduction in fees will be applied to all C.3-compliant parcels that are either non-single-family or condominium.

TABLE 6- Low IMPACT DEVELOPMENT RATE ADJUSTMENT ANALYSIS ... :r ... GI 0 ·- 0 I
I - Impact L:vel
C C "D •-,
MRP Provision ~ ~ ~ i Notes ------------------- - - --------------- Operations & Maintenance
Program Management
C.2 Municipal Operations
Clean Water Program
C.1
C,2
C.3
C.4
C.5
C.6
C.7
C.8
C.9
C.10
C.11
C.12
C.13
C,17
Permit Compliance
Municipal Operations
New Development and
Redevelopment
Industrial and Commercial
Site Controls
Illicit Discharge Detection and
Elimination
Construction Site Control
Public Information and
Outreach
Water Quality Monitoring
Pesticides Toxicity Control
Trash Load Reduction
Mercury Controls
PCBs Controls
Copper Controls
Annual Reports
Does not lessen Program Management
burden
Reduces storm flows in minor storm,
reducing burden on operations
Is a small part of overall Program
Compliance
Does not lessen Municipal Operations
compliance burden
Is all about C.3 .

Provides controls
Does not lessen Illicit Discharge burden
Does not lessen Construction Controls
burden
Aids in educating property owners
Does not lessen WQ Monitoring burden
Capture & infiltration may filter out
pesticides
Many C.3 devices are considered a
partial trash capture device
Capture & infiltration may filter out
pollutants
Capture & infiltration may filter out
pollutants
Capture & infiltration may filter out
pollutants
Does not lessen reporting requirements

STORMWATER FEE CALCULATION

CITY OF CUPERTINO
The primary metric in this analysis is the SFE as illustrated above. To arrive at the fee amount for the various land use categories, the total City-wide SFEs must be divided into the total revenue requirement to arrive at the rate per SFE. Using the analysis above, that calculation is represented by the following formula:
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SFERate
= Annual Revenue Requirement
Total SFEs
Or, using numbers from the analysis:

SFERate
$1,097,787
24,713.810
= $44.42 per SFE

This SFE rate amount is then multiplied by the SFEs per parcel or acre for the various land use categories to arrive at the Stormwater Fee Rate Schedule shown in Table 7 below.

TABLE 7 - PROPOSED 2019 CLEAN WATER & STORM PROTECTION FEE SCHEDULE Single-Family Residential *
- S1i11all (under 0.13 acre) 0.824 $ 36.58 per parcel - Medium {0.13 to 0.22 acre) 1.000 . $ 44.42 per parcel - Large (0.23 ta 0.40 acre) 1.251 $ 55.58 per parcel - Extra Large (over 0.40 acre) 2.396 $ 106.42 per parcel - Condominium 1 (1 story) 0.824 $ 36.58 per parcel - Condominium 2+ {2+ stories) 0.270 $ 11.99 per parcel Non-Single-Family Residential **
Multi-Family Residential 0.695 $ 30.88 per 0.1 acre
Commercial/ Retail/ Industrial 0.909 $ 40.38 per 0.1 acre Office 0.695 $ 30.88 per 0.1 acre
Church/ Institutional 0.588 $ 26.13 per 0.1 acre
School (w/playfield) 0.428 $ 19.00 per 0.1 acre
Park 0.160 $ 7.13 per 0.1 acre
Vacant (developed) 0.053 $ 2.38 per 0.1 acre
Open Space/ Agricultural no charge
Low Impact Development Adjustment ••• 25% Fee Reduction * SFR category also includes duplex, triplex and four-plex units. ** Non-SFR parcel size is calculated to the tenth of an acre or portion thereof. *** Low Impact Development Adjustment only applies to co ndominium and non-single-family properties.
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ANNUAL COST INDEXING
The 2019 Clean Water and Storm Protection Fee is subject to an annual adjustment tied to the Consumer Price lndex-U for the San Jose Area as of December of each succeeding year (the "CPI"), with a maximum annual adjustment not to exceed 3%. Any change in the CPI in excess of 3% shall be cumulatively reserved as the "Unused CPI" and shall be used to increase the maximum authorized rate in years in which the CPI is less than 3%. The maximum authorized rate is equal to the maximum rate in the first fiscal year the Fee was approved adjusted annually by the lower of either 3% or the change in the CPI plus any Unused CPI as described above.

MANAGEMENT AND USE OF 5TORMWATER FUNDS

CITY OF CUPERTINO
The City shall deposit into a separate account(s) all 2019 Clean Water and Storm Protection Fee revenues collected and shall appropriate and expend such funds only for the purposes outlined by this Report. The specific assumptions utilized in this Report, the specific programs and projects listed, and the division of revenues and expenses between the two primary categories (Clean Water and O&M) are used as a reasonable model of future revenue needs and are not intended to be binding on future use of funds.

The specific assumptions utilized in this Report, the specific programs or projects listed, and the division of revenues and expenses between the two primary categories (Clean Water and O&M) are used as a reasonable model of future revenue needs and are not intended to be binding on future use of funds.

Dated: February 20, 2019
Engineer of Work
By fe~
Jerry Bradshaw, License No. C48845
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APPENDICES

APPENDIX A- REGULATORY ASSESSMENT & COST AND REVENUE ANALYSIS

CITY OF CUPERTINO
On the following pages is a regulatory assessment and cost and revenue analyses, drawn from a technical memorandum prepared for this project by Larry Walker Associates. The information contained in this Appendix forms a basis for the fee calculations in the main body of this Fee Report and is referenced as appropriate.
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Memorandum
DATE :

TO :

SUBJECT :

Cc:

Februaiy 20, 2019
Susan Barnes, SCI Consulting Group
Fee Study Repmt: Regulatory Assessment
& Cost and Revenue Analysis
Jerry Bradshaw, SCI Consulting Group
Cheri Donnelly, City of Cupertino
Jo Anne Johnson, City of Cupertino
Karen Ashby, Lany Walker Associates

1. INTRODUCTION

L A R R Y
WALKER
IA

ASSOCIATES
Rachel Warren
Airy Krich-Brinton
1480 Drew Ave., Suite 100
Davis, CA 95618
530.753.6400
[email protected]
[email protected]
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In the early 1990s, in response to the federal Clean Water Act (CWA) amendment of 1987 to address urban stormwater runoff pollution from Municipal Separate Stoim Sewer Systems ( (MS4s) and the pending federal National Pollutant Discharge Elimination System (NPDES) regulations that would implement the amendment, the San Francisco Bay Regional Water Quality Control Board (Regional Water Board) issued municipal stormwater Phase I NPDES permits to the countywide urban areas of Santa Clara, Alameda, San Mateo, and Contra Costa.

These countywide areas had individual pe1mits until 2009, when the Regional Water Board issued a Municipal Regional Stormwater Permit (MRP).
1 The MRP was subsequently reissued in
2015.
2 The current MRP regulates stonnwater discharges from municipalities in Alameda, Contra Costa, San Mateo, and Santa Clara counties (including the City of Cupe1tino ), as well as the cities of Fairfield, Suisun City, and Vallejo in Solano County. The MRP includes requirements for the following components, including an increased focus on requirements for control of specific pollutants to address some of the more persistent water quality issues:
• C.1 Discharge Prohibitions and Receiving Water Limitations • C.2 Municipal Operations
• C.3 New Development and Redevelopment
• C.4 Industrial and Commercial Site Controls
• C.5 Illicit Discharge and Elimination
• C.6 Construction Site Controls
• C. 7 Public Infmmation and Outreach
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• C.8 Water Quality Monitoring
• C.9 Pesticides Toxicity Controls
• C. l O Trash Reduction
• C.11 Mercury Controls
• C.12 PCBs Controls
• C.13 Copper Controls
• C.14 Bacterial Controls
• C.15 Exempted and Conditionally Exempted Discharges
• C.16 Discharges to Areas of Special Biological Significance • C.17 Annual Reports
The City of Cupe1iino (City) is committed to water quality and watershed stewardship by continuing to build a safer, healthier, and more aesthetically pleasing community tlu-ough programs, initiatives, and ordinances that align with MRP activities. Over the years, the range of actions taken by the City has greatly increased in response to evolving regulatory requirements and community needs.

As a paii of the sto1mwater program initiative, the City leverages its resources by paiiicipating in a comprehensive eff01i in the Santa Clara Valley, the Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP), which was initiated in 1990 and is organized, coordinated, and implemented in accordance with a memorandum of agreement (MO.A) between its 15 member agencies. The Santa Clara Valley collaboration is further supplemented by paiiicipation in the regional Bay Area Stonnwater Management Agencies Association (BA.SM.AA). In addition to directly benefitting member agencies with access to better science, the regional collaborations enhance technical approaches and ensure consistent messaging to the public and community decision makers. Implemented when the first st01mwater pe1mits were issued to Santa Clara Valley pe1mittees, the collaboration has effectively assisted member agencies in maintaining stonnwater programs that achieve federally and State-mandated water quality regulations.

The purpose of this Technical Memorandum is to develop a planning-level cost estimate for the full costs of implementing the stormwater program, which may be used to supp01i a funding measure for the City's stonn drain operations and maintenance and Clean Water Program needs.

The assessment includes a summary of known revenues and estimates of prior year, current year, and future implementation costs of the stormwater program. 3 This information may also be used in the future to budget program funding and/or to identify other potential funding sources. This memorandum is organized as follows:

1. Introduction

2. Approach

3. Results and Discussion
3 .1. Overall Summary

3.2. City Expenditures
3 Prior year is fiscal year 2017-2018; current is fiscal year 2018-2019; future is fiscal years 2019-2020 through 2023-2024.

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2. APPROACH
To understand the funding needs for the stom1water program, the "hue" costs for full implementation of the :MRP requirements must be understood. However, tracking and compiling staff time and resources across multiple departments can be a complex and time-consuming process. To identify the implementation costs for the City as comprehensively and efficiently as possible, an interview was conducted with key City staff, which included structured questions and discussions regarding the agency's staffing, implementation approach for the range of :MRP requirements, prior and cmTent stonnwater program revenues, and the estimated costs for program implementation. The revenues and expenditures were compiled and assigned to two main categories, which reflects how the City generally allocates funds to implement its day-today st01mwater-related operations:
• Operations and Maintenance (O&M): This includes ongoing and routine activities supp01ting the O&M of the stormwater infrastmcture, including inspection and cleaning of sto1m drain inlets, st01m drain lines, and trash capture devices, as well as sti·eet sweeping management (primarily :MRP provision C.2).
• Clean Water Program: Tl?is includes ongoing and routine activities that are directly related to water quality improvement, such as implementation of the MRP requirements, paiticipation in the SCVURPPP, clean creek programs, community outreach, business and construction site inspections, street sweeping, and implementation of the City's trash reduction plan (all MRP provisions, with the exception of green infrastructure projects).

3. RESULTS AND DISCUSSION
A summaiy and discussion of total City costs for implementation of the MRP during the prior year (2017-2018), current year (2018-2019), and future years (2019-2020 through 2023-2024), is provided within this section. The cost inf01mation is presented in two ways: a summary of City expenditures by cost category (O&M and Clean Water Program) (3.1. Overall Summary) and a detailed breakdown of expenditures (3.2. City Expenditures) as they relate to the two cost categories. The approach and assumptions used to develop each of these summaries are described below. All costs are in present-value dollars.

3.1. Overall Summary
Costs for the full implementation of the st01mwater program were estimated based on budgetary and supplemental information provided by the City. The approach and assumptions used were as follows:
• The revenue and expenditures for 2017-2018 and 2018-2019 were based on the City's 2018 and 2019 Adopted Budgets.
• FJJture revenue was assumed to be the same as that for the current fiscal year, 2018-2019, without the transfers in from the General Fund (i.e., $379,000) (Table 1). • The category-specific expenditure totals in Table 2 were taken directly from the detailed City Expenditures for 2017-2018 through 2023-2024 (see Section 3.2, Table 4). (
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• Future cost projections were based on the available costs from 2017-2018, information obtained during City staff interviews, and a percentile multiplier (3% for personnel costs and non-personnel costs and 3.57% for paiticipation in SCVURPPP). Additional details ( Appendix A 2019 Clean Water and Storm Protection Fee Report Page 18 301
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regarding assumptions for future, potential cost increases related to specific MRP provisions are provided in 3.2. City Expenditures.

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The estimated revenue for 2017-2018 through 2023-2024 is shown in Table 1 and Figure 1.

Table 1. Overall Summary of Revenue
; - - ·- . , -•-· -· ~· •-•----,,-- ~-· ..... ·- PriorCaJ CurrentCaJ Future - Projected Revenue Category 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 2023-2024 O&M Fund 100-85
Total Fund Revenue $1,700 $0 $0 $0 $0 $0 $0
Transfer in (General Fund) $448,250 $476,503 $0 $0 $0 $0 $0 Clean Water Program Fund 230-81
Fines and forfeitures $6,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 Charges for services $380,000 $370,000 $370,000 $370,000 $370,000 $370,000 $370,000 Transfer in (General Fund) $375,720 $341 ,785 $0 $0 $0 $0 $0 Total Revenue $1,211,670 $1,197,288 $379,000 $379,000 $379,000 $379,000 $379,000 [a] Values are from the City's Fiscal Year 2018-2019 Adopted Budget.4 (2018 Adopted Budget and 2019 Adopted Budget for both Non-Point Source (Fund 230-81) (p. 407-409) and Storm Drain Maintenance (Fund 100-85) (p. 434-435)).
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The total estimated expenditures for 2017-2018 and 2018-2019 (based on the 2018 and 2019 Adopted Budgets) and the total estimated expenditures for the next five years, organized by cost category, are shown in Table 2 and Figure 1.

Table 2. Overall Summary of Total Estimated Costs for MRP, by Cost Category arid Fiscal Year . , .

Priorl3 l CurrentlaJ Future - Projected
Cost Category 2017-2018 2018~2019 2019-2020, 2020-2021 2021-2022 2022-2023 . 2023~2024 O&M $449,950 $476,503 $552,000 $569,000 $586,000 $603,000 Fund 100-85 $622,000 Clean Water Program $761,720 $720,785 $891,000 $918,000 $964,000 $994,000 $1,025,000 Fund 230-81 Total Expenses $1,211,670 $1,197,288 $1,443,000 $1,487,000 $1,550,000 $1,598,000 $1,646,000 [a) Values are from the City's Fiscal Year 2018-2019 Adopted Budget5 (2018 Adopted Budget and 2019 Adopted Budget for both Non-Point Source (Fund 230-81) (p. 407-409) and Storm Drain Maintenance (Fund 100-85) (p. 434-435)).
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$1,800,000
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
17-18 18-19 19-20 20-21 21-22 22-23 23-24
- o&M, Fund 100-85 - clean Water Program, Fund 230-81 - Total Revenue Figure 1. Overall Summary of Total Estimated Costs and Revenue for MRP, by Cost Category and Fiscal Year

3.1.1. Overall Summary: Discussion
Below are a few key observations regarding the overall estimated expenditures:
• Dwing the observed time period, the estimated cost of stormwater program implementation will exceed the estimated, dedicated revenue (Figure 1). • The Clean Water Program costs account for the larger portion (62%, as a seven-year average) of the City's stormwater-related costs.
• Overall, it is anticipated that the City's stormwater program will spend similar percentages on O&M and the Clean Water Program annually. Additional, one-time cost increases are included for the Clean Water Program in FY 2021-2022, based on potential increases in MRP requirements (as described in 3.2. City Expenditures). • Based on the information available and the assumptions made, the total cost of the st01mwater program is expected to increase by 36% between 2017-2018 and 2023-2024 (Figure 1). However, it should be noted that the cost increase could be greater depending upon the requirements of the final, renewed MRP.
o Between 2018-2019 and 2019-2020, a 21 % increase in the total cost of the sto1mwater program is anticipated to occur. This increase is based on a thorough evaluation of the City personnel and non-personnel costs required to implement the current MRP provisions and provide sto1m protection (as described in 3.2. City Expenditures).

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3.2. City Expenditures
Costs for the implementation of the stonnwater program for the MRP were estimated based on budgetmy and supplemental information provided by the City. When determining which costs to include, the City considered, at a minimum, the following:
• Labor;
• Materials;
• Contract Services;
• Contingencies; and
• Cost Allocation.

The following key pieces of information were provided by the City:
• "Fund 230-81 - Environmental Programs FYI 7 _ 18 Expenditure (Actual)" spreadsheet, which details the expenditures for the Clean Water Program by expense type for FY 2017-2018.
• "Fund 230-81 - Environmental Programs FYI 7 _ 18 Revenue (Actual)" spreadsheet, which details the revenues for the Clean Water Program by expense type for FY 2017- 2018.
• "Fund 230-81 - Environmental Programs FY18_ 19 Expenditure (Budget)" spreadsheet, which details the amended budget and expenditures to date for the Clean Water Program by expense type for FY 2018-2019.
• "Fund 230-81 - Environmental Programs FY18_19 Revenue (Budget)" spreadsheet, which details the amended budget and revenues to date for the Clean Water Program by expense type for FY 2018-2019.
• " 100-85-818 FYI 7 _18 Expense (actual)" spreadsheet, which details the expenditures for O&M by expense type for FY 2017-2018.
• "100-85-818 FYI 8 _ 19 Expense (Budget)" spreadsheet, which details the amended budget and expenses to date for O&M by expense type for FY 2018-2019. • Hard copy tables describing the staff positions under "230-81-802 Env Mgmt Cln Crk Strm Drain- Environmental Programs-Non Point Source" and "FTE- General Fund." • Hard copy "Resolution 18-039, Schedule B -Engineering" describing the various fees effective July 1, 2018.
• The City's Fiscal Year 2018-2019 Adopted Budget6 detailing the revenue, expenditure, and General Fund Costs for the 2018 adopted Budget and 2019 Adopted Budget for both Non-Point Source (Fund 230-81) (p. 407-409) and Storm Drain Maintenance (Fund 100- 85) (p. 434-435).
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The approach and assumptions used were as follows:
• All costs were identified as O&M Costs or Clean Water Program Costs (Table 4). • The City's "Cost Allocation" for each fund, which includes overhead costs such as Human Resources, Finance, and Information Technology Supp011, are divided as follows:
o The full Cost Allocation amount for O&M (Fund 100-85) is accounted for under Provision C.2.
o The Cost Allocation amount for Clean Water Program (Fund 230-81) is allocated prop01tionally to specific MRP provisions based on the identified labor costs. • The City's contribution to SCVURPPP was determined as follows:
o Based on the Memorandum of Agreement, the City's annual, prop01tional cost share is 2.46% of the annual SCVURPPP Program Budget.
o The City's payment history (July 2008 through July 2018) was used to determine the average annual increase in the City's contribution (3 .57%). This multiplier was used to estimate contributions for future years.
o · The total SCVURPP contribution was distributed equally amongst the MRP provisions (C.2 through C.13).
• Future costs were projected as follows:
o Future projections were based on the available costs from 2017-2018 and a percentile multiplier (3% for personnel costs and non-personnel costs and 3.57% for paiticipation in SCVURPPP). This is based on preliminary feedback from Regional Water Board staff that the MRP should not change significantly. However, if significant changes are made to the MRP during the renewal process, then the estimates should be modified accordingly.
o Implementation costs for specific MRP provisions are anticipated to require an additional increase dming the first year of the next MRP te1m. 7 These increases were
applied as additive percent increases only for FY 2021-2022. These are preliminary estimates, and the actual cost increases are to be determined upon adoption of the new MRP. These provisions, the anticipated, potential cost increase for each, and the rationale for the potential increase are as follows:
- C.3 New Development and Redevelopment (5%). This estimated increase is based on potential expansion of the C.3 requirements to small projects and single-family residences, which would necessitate updating the application materials and.guidance, including the C.3 Technical Guidance. In addition, there will be increased costs associated with enhanced O&M requirements for green infrastructure projects. This does not include costs for implementation/installation of green infrastructure projects. 7 The current MRP expires on December 31 , 2020. If the MRP is reissued on schedule, the new MRP will begin to be implemented on January 1, 2021. These increases have been applied to the anticipated, first full year of implementation of the new MRP, beginning July 1, 2021.

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- C.10 Trash Load Reduction (7.5%). This estimated increase is based on anticipated, new monitoring/assessment costs and implementation requirements, including the assessment of private catchments. In addition, by 2022, the City will need to achieve 100% reduction of the trash load from its base trash generation level; based on the 2017-2018 Annual Rep01i, the City is cmTently achieving 93% reduction.
- C.11 Mercury Controls and C.12 Polychlorinated Biphenyls (PCBs) Controls (7.5%). This estimated increase is based on implementation of new programs for building demolition to address mercmy and PCBs. - C.17 Annual Reports (5%). This estimated increase is based on anticipated changes in rep01iing requirements and the potential for some increased costs related to electronic rep01iing (via EPA) and cost rep01iing (via the state). o No incremental projections were made for expenses described as "one-time costs." The total expenditmes for 2017-2018 (prior year) and 2018-2019 (current year), based on the adopted budgets for those years, and the total, estimated expenditures for the next five years (future), organized by cost category (fund) and MRP provision, are shown in Table 4. 8 Only
total fund values are included for 2017-2018 and 2018-2019. 8 The total costs for each cost category (fund) are also summarized in Table 2.

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Table 4. City Estimated Expenditures for MRP, by Cost. Category (Fund) and Fiscal Year ~ C
·- - -- . PriorlaJ CurrentlaJ Future - ProjectedlbJ
Fund MRP Provision 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 2023-2024 I Fund 100-85, Operations & Maintenance I
Program Management $59,000 $61 ,000 $63,000 $65,000 $67,000 C.2 Municipal Operations $493,000 $508,000 $523,000 $539,000 $555,000 I Fund Total $449,950 $476,503 $552,000 $569,000 $586,000 $603,000 $622, 000 I Fund 230-81 , Clean Water Program
C.1 Permit Compliance $23,000 $24,000 $25,000 $25,000 '$26,000 C.2 Municipal Operations $148,000 $153,000 $157,000 $162,000 $167,000 C.3 New Development and Redevelopment $70,000 $72,000 $77,000 $80,000 $82,000 C.4 Industrial and Commercial Site Controls $83,000 $86,000 $88,000 $91 ,000 $94,000 C.5 Illicit Discharge Detection and Elimination $129,000 $133,000 $137,000 $141,000 $145,000 C.6 Construction Site Control $43,000 $44,000 $46,000 $47,000 $49,000 C.7 Public Information and Outreach $118,000 $122,000 $126,000 $129,000 $133,000 C.8 Water Quality Monitoring $11,000 $11,000 $12,000 $12,000 $13,000 C.9 Pesticides Toxicity Control $21,000 $21,000 $22,000 $23,000 $23,000 C.10 Trash Load Reduction $130,000 $134,000 $148,000 $152,000 $157,000 C.11 Mercury Controls $24,000 $25,000 $27,000 $27,000 $28,000 C.12 PCBs Controls $51,000 $52,000 $57,000 $59,000 $61,000 C.13 Copper Controls $11,000 $11,000 $12,000 $12,000 $13,000 C.17 Annual Reports $29,000 $30,000 $33,000 $34,000 $35,000 Fund Total $761,720 $720,785 $891,000 $918,000 $964,000 $994,000 $1,025,000 Total $1,211,670 $1,197,288 $1,443,000 $1,487,000 $1 ,550,000 $1,598,000 $1,646,000 [a] Values are from the City's Fiscal Year 2018-2019 Adopted Budget9 (2018 Adopted Budget and 2019 Adopted Budget for both Non-Point Source (Fund 230-81) (p. 407-409) and Storm Drain Maintenance (Fund 100-85) (p. 434-435)).
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APPENDIX 8 -PERCENT AGE OF IMPERVIOUS AREA ESTIMATIONS

CITY OF CUPERTINO
Section 2.2.3 of the Storm Drain Master Plan (SDMP, 2018) provided information about the percentage of impermeable area (%IA) for various land use types. Table 8 below summarizes that information.

TABLE 8- PERCENT OF IMPERVIOUS AREA FROM STORM DRAIN MASTER PLAN ~ dU_se ________ %_o_lA_
Commercial/Industrial 85
Very Low Density Res. 35
Low Density Res. 55
Low-Medium Density Res 70
Medium Density Res 80
High Density Res . 75
Medium-High Density Res. 70
Open Water 100
Parks/Open Space 15
Public (Schools, Gov't, etc.) 45
Quasi-Public/Institutional 65
Transportation/Right of Way 90
Undeveloped 0
Several of the SDMP land use types were the same as the rate categories for this Report.

However, some of the rate categories in this Report did not precisely match the land uses in the SDMP, so adjustments were made. Table 9 below shows the SDMP categories on the left side and the Fee Report rate categories on the right side. The ones in green matched sufficiently to use them outright. The ones in beige required some adjustments, which are explained below the Table.
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TABLE 9- PERCENTAGE OF IMPERVIOUS SURFACE FROM STORM DRAIN MASTER PLAN [ ______ Storm Drain Master Plan~__ Fee Report _________ Low-Medium Density Res 70 70 Srmall SFR
Low !Density Res . 55 55 Mediu lilil1SFR - 45 Large SFR Very L.ow Density Res. 35 35 Very !!_arge SFR
Quasi-Public/Institutional 65 65 Multi-Farm
C01ililmercial/lndustriai 85 85 [ 0mm/lndust
~l!la,si1-Pwibllic/ lnsti,t 1:1 t ional 65, 65 0ffice
Public (Schools, Gov't, etc.) 45 55 Institutional
40 Schools
Parks/0,:,en Space 15 - 15 Pa rks
Undeveloped 0 5 Vacant
0 Open Space
EXPLANATION OF ADJUSTMENTS TO %IA
• Large Single-Family Residential - This category falls between the Medium and Very Large categories without a corresponding land use in the SDMP. That gap was split evenly to arrive at a %IA of 45%. This created an array of %IA for the residential rate categories that aligns well with other communities and associated fee reports. • Institutional & Schools - The SDMP grouped schools with other governmental uses, however the Fee Report distinguishes between governmental/institutional uses and schools (with play field areas). The SDMP blended rate of 45% was used as a basis to split the Fee Report categories to arrive at %IA values of 55% and 40%, respectively. Again, these values align relatively well with other communities and associated fee reports.
• Vacant & Open Space - The SDMP assigned a value of 0% for the undeveloped land use while the Fee Report distinguishes between open space/natural terrain and vacant land that has been developed (but not improved). It is assumed that the SDMP blended the two categories, which was split for the Fee Report categories to arrive at %IA values of 5% and 0%, respectively. Further justification for the %IA of zero for open space land is provided in the body of the Fee Report. Again, these values align relatively well with other communities and associated fee reports. 2019 CLEAN WATER AND STORM PROTECTION FEE REPORT
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APPENDIX C- STORMWATER RATES FROM OTHER MUNICIPALITIES

CITY OF CUPERTINO
There have been relatively few voter-approved local revenue measures in the past 15 years to support stormwater programs in California. A summary of those efforts plus some others in process or being studied is shown in Table 10 on the following page, in roughly chronological order. Amounts are annualized and are for single family residences or the equivalent.
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TABLE 10- RECENT STORM DRAIN BALLOT MEASURES
l . . . Annual Munic1pahty Status R Year Mechanism ate - - - - San Clemente Successful $ 60.15 2002 Balloted Property-Related Fee Carmel Unsuccessful $ 38.00 2003 Balloted Property-Related Fee Palo Alto Unsuccessful $ 57.00 2003 Balloted Property-Related Fee Los Angeles Successful $ 28.00 2004 Special Tax - G. 0 . Bond Palo Alto Successful $ 120.00 2005 Balloted Property-Related Fee Rancho Palos Verde
Successful , then recalled and $ 200.00 2005, 2007 Balloted Property-Related Fee reduced
Non-Balloted Property-Related
Encinitas Unsuccessful $ 60.00 2006
Fee adopted in 2004,
challenged, balloted and failed
in 2006
Successful, Overturned by
Ross Vall ey Court of Appeals, Decertified $ 125.00 2006 Balloted Property-Related Fee by Supreme Court
Santa Monica Successful $ 87.00 2006 Special Tax
San Clemente Successfully renewed $ 60.15 2007 Balloted Property-Related Fee Solana Beach
Non-Balloted, Threatened by $ 21.84 2007
Non-Balloted & Balloted
lawsuit, Balloted, Successful Property-Related Fee
Woodland Unsuccessful $ 60.00 2007 Balloted Property-Related Fee Del Mar Successful $ 163.38 2008 Balloted Property-Related Fee Hawthorne Unsuccessful $ 30.00 2008 Balloted Property-Related Fee Santa Cruz Successful $ 28.00 2008 Special Tax
Burlingame Successful $ 150.00 2009 Balloted Property-Related Fee Santa Clarita Successful $ 21.00 2009 Balloted Property-Related Fee Sto«kto n Unsuccessful $ 34.56 2009 Balloted Property-Related Fee County of Contra Costa Unsuccessful $ 22.00 2012 Balloted Property-Related Fee Santa Clara Valley Water
Successful $ 56.00 2012 Special Tax
!District
City of Berkeley Successful varies 2012 Measure M- GO Bond Cou nty of LA Deferred $ 54.00 2012 NA
San Clemente Successful $ 74.76 2013 Balloted Property-Related Fee ,Vall ejo San & Fl ood Successful $ 23.00 2015 Balloted Property-Re lated Fee Culver City Successful $ 99.00 2016 Special Tax
Palo Alto Successful $ 163.80 2017
Balloted Property-Related Fee
Reauthorization of 2005 Fee
Town of Moraga Unsuccessful $ 120.38 2018 Balloted Property-Related Fee City of Berkeley Successful $ 42.89 2018 Balloted Property-Related Fee Los Angeles Flood
Successful $ 83.00 2018 Special Tax
Control
Cit y of Los Altos In Process NA NA Balloted Property-Related Fee City of Al ameda Studying NA NA Balloted Property-Related Fee County of San Joaquin Studying NA NA Balloted Property-Related Fee City of Sacramento Studying NA NA Balloted Property-Related Fee City of Sa linas Studying NA NA NA
City of Santa Clara Studying NA NA Balloted Property-Related Fee County of San Mateo Studying NA NA NA
County of El Dorado Studying NA NA NA
County of Orange Studying NA NA NA
County of Ventura Studying NA NA NA

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In addition to the agencies listed above in Table 10 that have gone to the ballot for new or increased Stormwater Fees, there are several other municipalities throughout the State that have existing Stormwater Fees in place. Some of these rates are summarized in Table 11 below. Amounts are annualized and are for single family residences or the equivalent.

The City's proposed $44.42 SFR rate is well within the range of stormwater rates adopted by other municipalities.

TABLE 11 - SAMPLE OF RATES FROM OTHER MUNICIPALITIES
• • 1• Annual T f F Mumc1pa 1ty ype o ee
Rate --- ---~ -~ ~--- -- - -- -
Bakersfield $ 200.04 Property-Related Fee
Culver City $ 99.00 Special Tax
Davis $ 84.94 Property-Related Fee
Elk Grove $ 70.08 Property-Related Fee
$ 190.20 Property-Related Fee
Hayward $ 28.56 Property-Related Fee
Los Angeles $ 27.00 Special tax
Palo Alto $ 136.80 Property-Related Fee
Redding $ 15.84 Property-Related Fee
Sacramento (City) $ 135.72 Property-Related Fee
Sacramento (County) $ 70.08 Property-Related Fee
San Bruno $ 46.16 Property-Related Fee
San Clemente $ 60.24 Property-Related Fee
San Jose $ 91.68 Property-Related Fee
Santa Cruz $ 109.08 Special Tax
Stockton * $ 221.37 Property-Related Fee
Vallejo Sanitation and Flood $ 23.64 Property-Related Fee Control District West Sacramento $ 144.11 Property-Related Fee
Woodland $ 5.76 Property-Re lated Fee
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.A Crowe Crowe LLP
Independent Member Crowe Globa)

REPORT OF INDEPENDENT ACCOUNT ANTS ON APPLYING AGREED-UPON

PROCEDURES
To the Honorable Mayor and City Council
City of Cupertino, California
10300 Torre Avenue
Cupertino, California 95014-3202
Ladies and Gentlemen:

We have performed the procedures enumerated in Appendix A on the 2019 Clean Water and Storm Protection Fee of the City of Cupertino, California (the "City"). The City's management is responsible for the 2019 Clean Water and Storm Protection Fee.

The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting users in understanding the 2019 Clean Water and Storm Protection Fee. We make no representation regarding the appropriateness of the procedures either for the purpose for which this report has been requested or for any other purpose. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. An agreed-upon procedures engagement involves performing specific procedures that the engaging party has agreed to and acknowledged to be appropriate for the intended purpose of the engagement and reporting on findings based on the procedures performed.

The procedures and the associated findings are contained in Appendix A.

We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the 219 Clean Water and Storm Protection Fee. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to 70u.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of the City and is not intended to be and should not be used by anyone other than these specified parties.

Crowe LLP
Costa Mesa, California
March 31, 2023
Attachment D
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APPENDIX A - SCHEDULE OF PROCEDURES AND FINDINGS
The procedures to be performed were as follows:

1. Procedure: We selected 100% of the revenue transactions recorded in the Environmental Management/Clean Creeks Special Revenue Fund (Fund 230) for the period January 1, 2021 thru December 31, 2021 and performed the following procedures:
a. Observed the Clean Water and Storm Protection fees have been deposited and recorded in Fund 230 per Section 3.38.160A of the Cupertino Municipal Code. b. Obtained the County tax remittance statement for each specific receipt (as provided by the County) and observed the cash collected in total on the statement agrees to the amount deposited in Fund 230 in accordance with Section 3.38.070 of the Cupertino Municipal Code, which specifies that the City elects to have fees collection on the tax roll in the same manner as property taxes.
c. Obtained the City support <e.g., schedule of fees billed to property owners in situation where the fee was not included in the annual tax assessment or Schedule> and observed the cash collected in total per the City's Schedule agrees to the amount deposited in Fund 230 in accordance with Section 3.38.090 of the Cupertino Municipal Code, which specifies that the City Finance Department bills out fees to property owners in situations where the fee was not included in the annual tax assessment.
: The procedure was performed with no exceptions noted.

2. Procedure; We selected 60o/o of the non-payroll expenditure transactions recorded in Fund 230 for the period January 1, 202j thru December 31, 2021 and performed the following procedures:
a. Obtained the City invoices and purchase orders for the expenditures selected, and observed the description of expenditures on the invoice and purchase order, as well as the assigned object code on the purchase order from the City were for allowed purposes per Section

3. 38.010B ofthe Cupertino Municipal Code, which specifies allowable activities are defined as acquisition, construction, reconstruction, maintenance, and operation of the storm drainage system of the City or related green infrastructure or other activities required by the City's NPDES permits, to repay principal and interest on any bonds which may hereafter be issued for said purposes, to repay loans or advances which may hereafter be made for said purposes. b. Obtained the City invoices and purchase orders for the nonpayroll expenditures selected and observe the description of expenditures on the invoice and purchase order were for allowed purposes per Section 3.38.0160A and 3.38.0160B of the Cupertino Municipal Code. Section

3.38.160A ofthe Cupertino Municipal Code specifies allowable from the overall perspective as direct costs and administrative costs, while 3.38.160B of the Cupertino Municipal Code specifically defines direct costs as wages and salaries and costs of employee fringe benefits and mileage reimbursement attributable to said collection activities, with administrative costs as all costs for computer service, materials, postage supplies and equipment. c. Obtained the City documentation for all refunds issued and observe the Finance Director authorized the refund through written approval in accordance with Section 3.38.170 of the Cupertino Municipal Code.
; The procedure was performed with no exceptions noted.

3. Procedure; We sampled one pay period (selected on a haphazard basis) between January 1, 2021 and December 31, 2021 to recompute employee allocation in the general ledger for activity recorded in Fund 230 and compared to the City's calculations as follows:
a. Sampledatleast10%ofthetimecardsofapplicableemployeeschargedinFund230tothe selected payroll period (selected on a haphazard basis) and observe written approval by SupervlSOrS.
b. Obtained documentation of the general ledger distribution for the payroll period selected and recalculate the distribution and agree the results to the budgeted allocation and the functional allocation matrix established by management. The budgeted allocation shall be specified by City-established allocation worksheets used to estimate the amount of actual time spent on the acquisition, construction, reconstruction, maintenance, and operation of the storm drainage 317
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system of the City or related green infrastructure or other activities required by the City's NPDES permits.
; The procedure was performed with no exceptions noted. 318
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CITY OF CUPERTINO
Agenda Item
22-11781 Agenda Date: 6/6/2023
Agenda #: 12.

Subject: Consider the Recommended Operating and Capital Improvement Program Budgets for Fiscal Year (FY) 2023-24, adoption of the Operating and Capital Improvement Program Budgets for FY 2023-24, establishment of the Appropriation Limit, and related actions.

1. Adopt Resolution No. 23-068 establishing an Operating Budget of $117,645,365 for FY 2023- 24, which includes the following changes to the FY 2023-24 Proposed Budget, published on May 5, 2023:
a. Approve the operating budget of $117,762,980 outlined in the FY 2023-24 Proposed Budget.
b. Approve additional appropriations of $8,000 for the Community Funding Grant Program as included in Attachment D.
c. Approve additional appropriations of $8,380 for Movies in the Park as included in Attachment D.
d. Approve additional appropriations of $28,784 for the reclassification of the Emergency Services Manager as included in Attachment D. e. Approve additional appropriations of $4,720 and additional revenue of $175 for County of Santa Clara Environmental Health Permit Fees as included in Attachment D. f. Approve additional appropriations of $146,650 for Golf Course Turf Management as included in Attachment D.
g. Approve a reduction of $154,149 in appropriations resulting from the prepayment of the CalPERS pension plan’s Unfunded Accrued Liability as included in Attachment D. h. Approve a reduction of $160,000 in appropriations resulting from the elimination of library extra hours funding as included in Attachment D. i. Approve additional estimated revenue of $84,218 resulting from the elimination of festival fee waivers as included in Attachment D.
j. Approve additional revenue of $313,218 resulting from an updated SB 1 (Gas Tax) revenue estimate as included in Attachment D.
k. Approve Community Funding Grants for the following organizations, allocating a total of $32,500:
i. Cupertino Symphonic Band: $4,000
ii. No Time to Waste: $5,000
iii. West Valley Community Services: $10,000
iv. STEMBoost Corporation: $4,000
v. AINAK: $2,500
vi. Omniware Networks: $4,000
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22-11781 Agenda Date: 6/6/2023
Agenda #: 12.
vii. Asian American Parents Association: $3,000

2. Adopt Resolution No. 23-069 establishing a Capital Improvement Program Budget of $4,054,000 for FY 2023-24
a. Approve appropriations of $420,000 in the Capital Improvement Program Capital Projects Fund for the Stevens Creek Blvd./Calabazas Creek Storm Drain Repair (infrastructure)
b. Approve appropriations of $172,000 in the Capital Improvement Program Capital Projects Fund for the Stevens Creek Bridge Repair (infrastructure) c. Approve appropriations of $35,000 in the Capital Improvement Program Capital Projects Fund for the Street Light Installation - Annual Infill (infrastructure) d. Approve appropriations of $300,000 in the Capital Improvement Program Capital Projects Fund for the Annual Playground Replacement (parks) e. Approve appropriations of $100,000 in the Capital Improvement Program Capital Projects Fund for the ADA Improvements (facilities)
f. Approve appropriations of $1,000,000 in the Capital Improvement Program Capital Projects Fund for the Citywide Building Condition Assessment Implementation (facilities)
g. Approve $2,027,000 of transfers from the Capital Reserve Capital Projects Fund to fund the Capital Improvement Program

3. Adopt Resolution No. 23-070 establishing an Appropriation Limit of $127,886,394 for FY 2023-24
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CITY COUNCIL STAFF REPORT
Meeting: June 6, 2023
Subject
Consider the Recommended Operating and Capital Improvement Program Budgets for Fiscal Year (FY) 2023-24, adoption of the Operating and Capital Improvement Program Budgets for FY 2023-24, establishment of the Appropriation Limit, and related actions.

Recommended Action

1. Adopt Resolution No. 23-XXX establishing an Operating Budget of $117,645,365 for FY 2023-24, which includes the following changes to the FY 2023-24 Proposed Budget, published on May 5, 2023:
a. Approve the operating budget of $117,762,980 outlined in the FY 2023-24 Proposed Budget.
b. Approve additional appropriations of $8,000 for the Community Funding Grant Program as included in Attachment D.
c. Approve additional appropriations of $8,380 for Movies in the Park as included in Attachment D.
d. Approve additional appropriations of $28,784 for the reclassification of the Emergency Services Manager as included in Attachment D.
e. Approve additional appropriations of $4,720 and additional revenue of $175 for County of Santa Clara Environmental Health Permit Fees as included in Attachment D.
f. Approve additional appropriations of $146,650 for Golf Course Turf Management as included in Attachment D.
g. Approve a reduction of $154,149 in appropriations resulting from the prepayment of the CalPERS pension plan’s Unfunded Accrued Liability as included in Attachment D.
h. Approve a reduction of $160,000 in appropriations resulting from the elimination of library extra hours funding as included in Attachment D. i. Approve additional estimated revenue of $84,218 resulting from the elimination of festival fee waivers as included in Attachment D.
j. Approve additional revenue of $313,218 resulting from an updated SB 1 (Gas Tax) revenue estimate as included in Attachment D.
k. Approve Community Funding Grants for the following organizations, allocating a total of $32,500:
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2 i. Cupertino Symphonic Band: $4,000
ii. No Time to Waste: $5,000
iii. West Valley Community Services: $10,000
iv. STEMBoost Corporation: $4,000
v. AINAK: $2,500
vi. Omniware Networks: $4,000
vii. Asian American Parents Association: $3,000

2. Adopt Resolution No. 23-XXX establishing a Capital Improvement Program Budget of $4,054,000 for FY 2023-24
a. Approve appropriations of $420,000 in the Capital Improvement Program Capital Projects Fund for the Stevens Creek Blvd./Calabazas Creek Storm Drain Repair (infrastructure)
b. Approve appropriations of $172,000 in the Capital Improvement Program Capital Projects Fund for the Stevens Creek Bridge Repair (infrastructure) c. Approve appropriations of $35,000 in the Capital Improvement Program Capital Projects Fund for the Street Light Installation – Annual Infill (infrastructure) d. Approve appropriations of $300,000 in the Capital Improvement Program Capital Projects Fund for the Annual Playground Replacement (parks) e. Approve appropriations of $100,000 in the Capital Improvement Program Capital Projects Fund for the ADA Improvements (facilities)
f. Approve appropriations of $1,000,000 in the Capital Improvement Program Capital Projects Fund for the Citywide Building Condition Assessment Implementation (facilities)
g. Approve $2,027,000 of transfers from the Capital Reserve Capital Projects Fund to fund the Capital Improvement Program

3. Adopt Resolution No. 23-XXX establishing an Appropriation Limit of $127,886,394 for FY 2023-24
Reasons for Recommendation
The staff report shows the Proposed Budget, which consists of the initial version printed on May 5, 2023, as well as any subsequent modifications made to the budget. These modifications include items recommended by the City Council during the Proposed Budget Study Session on May 17, as well as unforeseen adjustments to expenditures and revenues that have emerged since the publication of the Proposed Budget on May 5. For staff’s responses to the City Council's questions during the Proposed Budget Study Session, please refer to Attachment G.

The Proposed Budget for the upcoming fiscal year highlights a decrease in both expenditures and revenues compared to the previous year's Adopted Budget. Total expenditures are proposed at $121.7 million, a $8.9 million or 6.8%, reduction from the previous year. Similarly, total revenues are anticipated to be $110.3 million, a $20.0 million or 15.3%, decrease from last year. 322
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3 General Fund expenditures are proposed at $86.0 million, which is a decrease of $9.2 million or

9.6%, from the previous year's Adopted Budget. General Fund revenues are anticipated to be $80.4 million, which is a $14.3 million or 15.1%, decrease from the previous year's Adopted Budget. The General Fund is projected to end FY 2023-24 with approximately $44.3 million in unassigned fund balance.

The following table shows the Operating and Capital Improvement Program (CIP) Budgets by fund type.

General Fund
The General Fund is the City's primary operating fund. It accounts for basic services such as public safety, public works, community development, park maintenance, code enforcement, and the administrative services required to support them. The fund generates revenue from the City's discretionary funding sources (e.g., sales tax, property tax, transient occupancy tax, and utility tax). As a rule, General Fund resources are used only to fund operations that do not have other dedicated (restricted) funding sources. Operations that rely heavily upon non-General Fund resources, such as street maintenance, solid waste collection, and recreation, are accounted for in other funds. Information on these funds may be found in the Other Funds section of this document.

As illustrated in the following chart, most of the General Fund supports costs for Public Works, Law Enforcement, and Community Development.

Fund Type Proposed Revenues Proposed Expenditures
Change in Fund
Balance/Net Position
General 80,365,447 85,996,506 (5,631,059)
Special Revenue 12,991,963 10,401,172 2,590,791
Debt Service 2,677,600 2,677,600 -
Capital Projects 2,027,000 4,229,000 (2,202,000)
Enterprise 6,744,789 9,671,575 (2,926,786)
Internal Service 5,478,924 8,723,512 (3,244,588)
TOTAL $ 110,285,723 $ 121,699,365 $ (11,413,642)
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4 General Fund Expenditures
FY 2023-24 expenditures are estimated at $86.0 million, which represents a $9.2 million or 9.6% decrease compared to the adopted budget from the previous year. This decrease is primarily attributed to expenditure-reduction strategies that include:
 Eliminating 14 vacant positions.
 Decreasing expenditure on materials and contract services.  Reducing spending on special projects and capital outlays.  Reducing the City Manager's Contingency Fund by $25,000 and contingencies by 50%.  Reducing transfers and General Fund subsidies to other funds.

General Fund expenditures decreased by $0.3 million from the $86.3 million in the Proposed Budget printed on May 5, 2023, due to:
 Restoration of Community Grant Funding as recommended by the City Council: $8,000  Restoration of Movies in the Park as recommended by the City Council: $8,380  Reclassification of the Emergency Services Coordinator: $28,784  County of Santa Clara Environmental Health Permit Fees: $4,720  Savings from Prepaying CalPERS Pension Plan’s Unfunded Accrued Liability: $(126,581) 324
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5  Elimination of Library Extra Hours Funding: $(160,000)  Transfer of Golf Course Turf Management to Blackberry Farm Fund: $(78,350) General Fund Revenue
The City's General Fund revenues for the upcoming fiscal year are projected to be $80.4 million, representing a significant decrease of $14.3 million or 15.1% from the FY 2022-23 Adopted Budget.

This decline is due to a California Department of Tax and Fee Administration (CDTFA) audit of one of the City's taxpayers, which is expected to result in a substantial reduction in sales tax revenue. The City is expected to experience a $30 million, or 73%, decrease in sales tax revenue from the original FY 2023-24 projections provided by its sales tax consultant, HdL. This corresponds to a decrease of $30 million, or 28%, in General Fund revenue. 325
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6 General Fund – Fund Balance
Unassigned fund balance is fund balance that has not been earmarked for a specific purpose. FY 2023-24 unassigned fund balance is projected to be $44.3 million, a decrease of $5.3 million, or

10.7%, from the FY 2022-23 Amended Budget. FY 2023-24 total fund balance is estimated to be $104.7 million, a decrease of $5.6 million, or 5.1%, from the FY 2022-23 Amended Budget.

The following table shows changes to fund balance for the General Fund since the close of FY 2020-21:

General Fund Forecast
FY 2022-23 is projected to end with revenues exceeding expenditures; however, starting in FY 2023-24, expenditures are expected to surpass revenues.

Currently, the CDTFA is conducting an audit on a taxpayer within the City, which is anticipated to have a significant impact on the City's financial situation. The projected decline in sales tax Classification
2020-21
Actual
2021-22
Actual
2022-23
Adopted
Budget
2022-23
Amended
Budget
2023-24
Proposed
Budget
Percent
Change
Unassigned 52,449,546 51,804,288 48,332,873 49,620,011 44,331,298 -10.7% All Other Classifications 44,401,243 48,365,253 61,771,440 60,661,719 60,319,373 -0.6% TOTAL FUND BALANCE 96,850,790 100,169,541 110,104,313 110,281,729 104,650,670 -5.1%

GENERAL FUND FUND BALANCE
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7 revenues for FY 2023-24 is estimated to be approximately $30 million from the initial forecast provided by HdL, the City's sales tax consultant.

The City's forecast model assumes recessionary periods every four years, during which revenues show no growth. Additionally, the forecast does not account for ongoing revenues from potential new development projects or hotels until they are constructed and occupied.

The primary driver of expenditure growth in the General Fund is the increasing costs of law enforcement. By FY 2029-30, the City's annual debt service payment for the Civic Center will be fully repaid, resulting in an annual savings of $2.7 million.

The provided chart illustrates the City's ten-year forecast for revenues and expenditures.

The following chart displays a ten-year forecast of the General Fund's annual operating surpluses or deficits. If deficits materialize, they will be financed by the unassigned fund balance, the Capital Projects Reserve, and the Section 115 Pension Trust.

Recognizing the significance of fiscal prudence and responsible financial management, the City is taking immediate action to address the potential shortfall resulting from the CDTFA audit. City staff has updated the financial forecast and is actively exploring various strategies to balance the budget. Unfortunately, these strategies will inevitably lead to reductions in service levels 327
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8 throughout the community, impacting all areas. Simultaneously, the City is evaluating different revenue-generating options to mitigate the budget shortfalls caused by the audit.

To address the underlying issue of recurring expenditures consistently exceeding recurring revenues, the City has implemented cost-cutting measures while ensuring that essential services continue to be provided to the community.

With a proactive approach, the City aims to minimize the adverse effects on its staff and residents.

City staff will maintain open communication with the Council, keeping them informed of any new developments related to the audit and its impact on the City's finances. It is crucial to note that the CDTFA audit has resulted in a structural deficit, requiring the City to implement longterm solutions to address this ongoing challenge. 328
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9 Other Funds
Special Revenue Funds
Special Revenue Funds are established to account for the proceeds of specific revenue sources that are legally restricted for expenditures for particular purposes. The largest Special Revenue Fund is allocated to streets, roads, and transportation, while other funds are designated for storm drain management, affordable housing programs, and park development.

For FY 2023-24, the Proposed Budget for Special Revenue Funds is $10.4 million, which represents a decrease of $0.8 million or 7.5% compared to the FY 2022-23 Adopted Budget. This reduction is attributed to a decrease in pavement expenditures.

The Special Revenue Funds receive funding from two sources: $10.5 million in restricted department revenue and $2.5 million in transfers, resulting in a total funding of $13.0 million. The Special Revenue Funds are expected to end the year with a fund balance of $31.9 million, reflecting an increase of $2.6 million from the previous year. This increase in fund balance is mainly due to the housing mitigation revenue in the BMR Housing Fund.

Capital Projects Funds
Capital Projects Funds are used for the acquisition or construction of major capital facilities and infrastructure. Capital Projects Funds include the Capital Improvement Projects Fund, Stevens Creek Corridor Park Fund, and Capital Reserve Fund. These funds are used to finance the implementation of projects identified in the City's five-year Capital Improvement Program (CIP). 2020-21 2021-22 2022-23 2023-24 Percent
Actual Actual Adopted Proposed Change
Employee Compensation 1,590,963 1,716,677 2,050,572 1,901,795 -7.3% Employee Benefits 764,490 796,662 1,037,760 891,001 -14.1% Materials 1,235,228 1,048,952 1,001,596 1,040,163 3.9%
Contract Services 430,662 358,244 1,152,665 1,037,847 -10.0% Cost Allocation 1,046,834 1,325,945 1,191,567 1,220,614 2.4% Capital Outlays 2,875,144 2,565,810 1,038,000 880,224 -15.2% Special Projects 2,881,302 2,506,843 3,742,268 3,403,849 -9.0% Contingencies - - 29,681 10,679 -64.0%
Transfers Out 15,000 486,235 - 15,000 N/A
Total Expenditure Uses $ 10,839,623 $ 10,805,367 $ 11,244,109 $ 10,401,172 -7.5%

EXPENDITURE USES
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10 For FY 2023-24, the Proposed Budget for Capital Projects Funds is $4.2 million, which represents an increase of $0.6 million, or 16.4%, from the FY 2022-23 Adopted Budget. This increase is due to transfers from the Capital Reserve Fund to the Capital Improvement Projects Fund.

The Capital Projects Funds are primarily funded through a combination of transfers from the General Fund, grants, donations, development impact fees, and other dedicated revenue sources.

As projects are completed, any remaining funds are typically rolled over into the Capital Reserve Fund to be used for future projects.

Enterprise Funds
Enterprise Funds are designed to support services that are funded directly by fees charged for goods or services. The City's Enterprise Funds include the Resource Recovery Fund for the solid waste collection franchise, Blackberry Farm Fund for the City-owned golf course, Sports Center Fund for the Cupertino Sports Center, and Recreation Programs Fund for cultural, youth, teen, sports, and physical recreation programs.

For FY 2023-24, the Proposed Budget for Enterprise Funds is $9.7 million, which represents an increase of $0.7 million or 7.4%, from the FY 2022-23 Adopted Budget. The Enterprise Funds are funded by $6.7 million in program revenue and $2.9 million in reserves. The Enterprise Funds are projected to end the year with $3.5 million in reserves, a decrease of $2.9 million. This decrease 2020-21 2021-22 2022-23 2023-24 Percent
Actual Actual Adopted Proposed Change
Employee Compensation 254,304 543 - - N/A
Employee Benefits 116,363 310 - - N/A
Materials - - - - N/A
Contract Services 11,895 53,630 265,000 175,000 -34.0%
Cost Allocation 168,274 - - - N/A
Capital Outlays 9,277,220 8,662,133 3,345,000 2,027,000 -39.4% Special Projects - - - - N/A
Contingencies - - - - N/A
Transfers Out 1,989,449 11,422,048 23,600 2,027,000 8489.0% Total Expenditure Uses $ 11,817,504 $ 20,138,664 $ 3,633,600 $ 4,229,000 16.4%

EXPENDITURE USES
2020-21 2021-22 2022-23 2023-24 Percent
Actual Actual Adopted Proposed Change
Employee Compensation 994,004 1,271,044 1,786,450 2,016,689 12.9% Employee Benefits 411,936 305,998 605,466 668,557 10.4% Materials 276,213 329,767 500,003 444,258 -11.1%
Contract Services 2,634,890 4,247,810 4,804,188 5,176,958 7.8% Cost Allocation 923,089 1,034,107 789,939 939,358 18.9% Capital Outlays (159,119) 12,654 23,600 - -100.0%
Special Projects 247,061 82,882 183,553 135,733 -26.1%
Contingencies - - 132,526 67,455 -49.1%
Transfers Out - - - - N/A
Other Financing Uses 177,606 222,566 177,606 222,567 25.3% Total Expenditure Uses $ 5,505,679 $ 7,506,828 $ 9,003,331 $ 9,671,575 7.4%

EXPENDITURE USES
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11 is due to the use of reserves, which were accumulated in previous years. During the pandemic, the Parks and Recreation funds accumulated reserves as revenues were higher than expenditures.

Internal Service Funds
Internal Service Funds are for goods or services provided to other City departments or governments on a cost-reimbursement basis. These funds include programs for innovation and technology, workers’ compensation, equipment, compensated absences, long-term disability, and retiree medical insurance.

The Proposed Budget for Internal Service Funds is $8.7 million, which is a slight decrease of $0.1 million or 1.6%, compared to last year's Adopted Budget. The Internal Service Funds are funded by $4.2 million in program revenue, $1.3 million in transfers from the General Fund, and $3.2 million in reserves. The Internal Service Funds are projected to end the fiscal year with $(0.1) million in reserves, decreasing by $3.2 million. Although the Internal Service Funds show a negative net position, it's important to note that retiree health expenses will be reimbursed by the Section 115 OPEB Trust at the close of each fiscal year.

This decrease in reserves is due to the City's decision to eliminate the General Fund transfer to the Retiree Medical Fund in FY 2022-23. Instead, the City plans to fund Other Post-Employment Benefits (OPEB) costs with the City's Section 115 OPEB Trust, as the City's OPEB plan is over 100% funded. The City will continue to monitor the Internal Service Funds to ensure they remain sustainable and effective in supporting City operations.

Staffing
Personnel Assumptions
FY 2023-24 salaries and benefits reflect the cost-of-living adjustments approved by the City Council in August 2022. The City is currently negotiating with its bargaining groups because the agreements, which expire on June 30, 2025, include a salary and benefits reopener. Full-time salaries are forecasted to increase by the CalPERS payroll growth rate.

Employees who have yet to reach the top step in their classification’s salary range are eligible to receive a step increase on their anniversary date. Typically, classifications have five steps, with each increase equivalent to a 5% increase in salary. Currently, approximately 38% of employees 2020-21 2021-22 2022-23 2023-24 Percent
Actual Actual Adopted Proposed Change
Employee Compensation 1,722,848 1,675,495 1,803,287 1,971,220 9.3% Employee Benefits 1,881,727 1,833,582 2,190,096 2,319,832 5.9% Materials 924,646 1,144,432 1,418,575 1,060,611 -25.2%
Contract Services 1,267,879 1,280,565 1,798,390 1,789,573 -0.5% Cost Allocation 52,343 60,817 62,042 57,622 -7.1%
Capital Outlays - - - -
Special Projects 140,684 230,258 541,100 572,000 5.7%
Contingencies - - 80,425 26,201 -67.4%
Other Financing Uses 968,791 926,453 968,791 926,453 -4.4% Total Expenditure Uses $ 6,958,919 $ 7,151,603 $ 8,862,706 $ 8,723,512 -1.6%

EXPENDITURE USES
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12 are below Step 5.

Position Eliminations
The FY 2023-24 Proposed Budget proposes funding for a total of 212 positions, representing a reduction of 14 positions from the FY 2022-23 Amended Budget. This reduction is due to revenue shortfalls resulting from the CDTFA sales tax audit of one of the City’s taxpayers. It is important to note that the 14 positions being eliminated are vacant positions that have not been filled for various reasons such as resignation, retirement, or the positions being left unfilled.

To address the City's staffing levels in a responsible and sustainable manner, staff has developed a plan to gradually reduce staffing levels over the next decade through the elimination of vacant positions. The plan aims to eliminate 3-4 vacant positions annually until the City reaches a staffing level of 180 positions, which is consistent with the levels in FY 2015-16.

Note: 1 FTE in the IT department is expected to be eliminated later this year due to an upcoming vacancy.

Summary of Budget Adjustments (Attachment D)
The budget adjustments are presented in two primary groups: operating budget changes and Capital Improvement Program. The operating budget changes primarily include unforeseen expenditure and revenue adjustments that have arisen since the publication of the Proposed Budget on May 5. The Capital Improvement Program also underwent revisions due to reductions resulting from the CDTFA sales tax audit and was not incorporated in the Proposed Budget 332
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13 printed on May 5. The changes are discussed further below and are also detailed in Attachment D. The changes are discussed further below and are also detailed in Attachment D.

Restoration of Community Grant Funding
The Parks and Recreation Commission carried a unanimous motion to recommend to City Council funding for the following organizations at a total of $32,500:

In the FY 2023-24 Proposed Budget, City staff initially proposed a reduction in Community Funding of $8,000, bringing it down to $24,500. However, during the Proposed Budget Study Organization
Parks and Recreation
Commission's
Recommended Funding
Staff's Recommended
Funding (May 5
Proposed Budget)
Council's
Recommended Increase
(May 17 Study Session)
Total Recommended
Funding
Cupertino Symphonic Band 4,000 3,015 985 4,000
No Time to Waste 5,000 3,769 1,231 5,000
West Valley Community Services 10,000 7,539 2,461 10,000 STEMBoost Corporation 4,000 3,015 985 4,000
AINAK 2,500 1,885 615 2,500
Omniware Networks 4,000 3,015 985 4,000
Asian American Parents Association 3,000 2,262 738 3,000 TOTAL ALL RECOMMENDED REQUESTS $32,500 $24,500 $8,000 $32,500 333
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14 Session on May 17, 2023, the City Council conducted a straw poll and unanimously voted to restore Community Funding to its original amount of $32,500.

Restoration of Movies in the Park
In the FY 2023-24 Proposed Budget, City staff initially recommended the removal of Movies in the Park. However, during the Proposed Budget Study Session on May 17, 2023, the City Council conducted a straw poll and unanimously voted to reinstate Movies in the Park. The budget for Movies in the Park is $8,380 and includes $5,000 for materials and $3,380 for part-time staffing.

Reclassification of the Emergency Services Coordinator
The City Manager’s Office requests to reclassify the Emergency Services Coordinator as Assistant to the City Manager with the working title of Emergency Manager. In addition to overseeing the emergency management functions, the Emergency Manager will supervise the Sheriff's Office contract execution and monitoring, lead the City's Unhoused Taskforce, and serve as the City point of contact for the Fire Department and countywide services to enhance coordination of daily response activities. The organizational changes will support the City Manager’s operational goals to improve service delivery and coordination of public safety.

County of Santa Clara Environmental Health Permit Fees
Starting from FY 2023-24, the City will be charged permit fees for food facilities and pools from the Santa Clara County Department of Environmental Health. The following locations: Quinlan Community Center, Cupertino Senior Center, Blackberry Farm, and Library, have food or pool permits and due to changes in State Law in 2010, the Department of Environmental Health cannot support permitting and inspecting city food facilities and pools without charging the applicable annual permit fees. These permits are valid for one year and must be renewed annually. $175 in environmental permit fees for the Library is expected to be reimbursed the Santa Clara County Library District.

Revenue from Elimination of Festival Fee Waivers
The Parks and Recreation Department is proposing to charge fees for festival organizers, which were waived by the City in past years. By implementing this change, the Department aims to generate additional revenue of $84,218. City-paid expenses for sheriff costs and materials have also been reduced in the FY 2023-24 Proposed Budget.
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15 *Staff recommends cutting the budget for Sheriff costs and having the festival organizers pay those fees
** Staff recommends cutting the budget for the rental of chairs and having the festival organizers pay those fees
Savings from Prepaying CalPERS Pension Plan’s Unfunded Accrued Liability As part of a cost-saving initiative, the Administrative Services department requests to make a lump-sum prepayment towards the CalPERS pension plan’s Unfunded Accrued Liability (UAL).

By prepaying the UAL before July 31, 2023, the City will save 3.4% in interest, amounting to $154,149.

The annual payment on the UAL is the amortized dollar amount needed to fund past service credit earned (or accrued) for members who are currently receiving benefits, active members, and members entitled to deferred benefits, as of the valuation date. The UAL is billed monthly but can be prepaid in a lump sum for cost savings.

Elimination of Library Extra Hours Funding
As of May 18, 2023, the Financial & Administrative Services Manager for the Santa Clara County Library District confirmed that the City will not be charged for Library extra hours in FY 2023-24.

Initially, the District suggested that there was a possibility that the funds might not be required.

They mentioned that the final decision would be discussed and determined during their board meeting in June. Considering this uncertainty, the City decided to budget for the funds, as there was still a chance that they would be needed. However, following the comment made at the recent City Council meeting, City staff promptly followed up with an email seeking clarification.

Subsequently, the District confirmed that the additional funds were indeed unnecessary, and this confirmation has been verified.

It is not guaranteed each year that the State will reimburse the District for the funding of extra hours. This budget line item ensures that if the reimbursement is not available, the library can Total Costs
Festival Date Festival Producer Recreation
Facility/Park
/Road
Permits
Public Works Sheriff* Materials Total Notes
Day N Night Fun Fest Sept. 9, 2023 Cupertino Rotary $2,346 $3,590 $4,652 $6,912 $17,501 Bhubaneswar Sister City
Initiative (CBSCI) Sept. 23, 2023
Cupertino Bhubaneswar
Sister City $2,160 $6,980 $3,517 $3,744 $16,401
Diwali Festival Oct. 6, 2023
Cupertino Chamber of
Commerce $2,025 $3,490 $3,555 $5,760 $14,829
Veterans Day November 11, 2023 Veteren's Memorial $1,028 $1,000 $0 $0 $1500** $3,528 Egg Hunt April 6, 2024
The Home of Christ Church
in Cupertino $629 $1,000 $35 $0 $1,664
Holi April 7, 2024
Cupertino Chamber of
Commerce $1,238 $1,000 $681 $2,592 $5,511
Cherry Blossom April 27- 28, 2024 Toyokawa Sister City $5,578 $17,520 $9,010 $10,944 $43,052 Dilli Haat EnActe $2,399 $6,270 $2,796 $5,040 $16,505
Relay for Life June 15, 2024 American Cancer Society $705 $1,000 $14 $0 $1,719 Costs for FY 23/24 Events $18,108 $41,850 $24,260 $34,992 $1,500 $120,710 TOTAL TOTAL TOTAL Waived
Fees City Paid
Festival
Costs $120,710
Waived Fees City Paid expenses
$84,218 $36,492
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16 continue to be open for extra hours. Funding in this line item that is unused at the end of the fiscal year is returned to unassigned fund balance.

Increase SB 1 Revenue Estimate
The Public Works department recommends increasing Senate Bill (SB) 1 revenue estimates by $313,218 to $1,496,963 to align with projections from the State. SB 1, also known as the Road Repair and Accountability Act of 2017 or "Gas Tax," provides funding for local streets and roads maintenance. The amount received by the City is tied to overall State gas consumption.

Transfer and Increase Golf Course Turf Management
The Public Works department requests to transfer the budget for golf course turf management to the Blackberry Farm Fund and increase the amount to $225,000.

Capital Improvement Program (CIP)
On March 7, 2023, the City Council conducted a study session to review the Capital Improvement Program (CIP). The original budget proposed for FY 2023-24 during the study session was $5,013,642. However, on May 17, 2023, the Public Works department presented an updated CIP with a reduced budget. The updated CIP proposed a budget of $2,027,000, representing a reduction of $2,986,642.

With the inclusion of new projects that require a funding allocation of $2.0 million and considering the defunding of projects amounting to $3.2 million on May 16, 2023, FY 2023-24 year-end fund balance is projected to be $13.5 million if all recommendations are approved. This fund balance will remain available for future programming purposes.

Interfund transfers, which are transfers between funds, are required to fund CIP projects. A recommended transfer of $2,027,000 from the Capital Reserve to the Capital Improvement Program Fund will provide the necessary funding for these projects.

Capital Improvement Program Project Revenue Expense Fund Balance

CAPITAL PROJECTS FUNDS
Stevens Creek Blvd./Calabazas Creek Storm Drain Repair (infrastructure) - 420,000 (420,000) Stevens Creek Bridge Repair (infrastructure) - 172,000 (172,000) Street Light Installation – Annual Infill (infrastructure) - 35,000 (35,000) Annual Playground Replacement (parks) - 300,000 (300,000) ADA Improvements (facilities) - 100,000 (100,000)
Citywide Building Condition Assessment Implementation (facilities) - 1,000,000 (1,000,000) Transfer from Capital Reserve to Capital Improvement Program Fund 2,027,000 2,027,000 - TOTAL CAPITAL PROJECTS FUNDS 2,027,000 4,054,000 (2,027,000) TOTAL ALL FUNDS $ 2,027,000 $ 4,054,000 $ (2,027,000)
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17 Ongoing Challenges
Retirement Benefits
Rising retirement costs are driving the increase in employee benefits. Cupertino offers retirement benefits to its employees through the California Public Employee’s Retirement System (CalPERS), which experienced a significant decline in its assets due to poor investment returns during the Great Recession. Moreover, changes in actuarial assumptions and enhanced benefits due to higher life expectancies have further increased the plan's liabilities. Consequently, the City's pension costs have escalated considerably and currently constitute one of the City's largest financial obligations.

The table below illustrates the City's CalPERS costs over the next few years.

In December 2016, the CalPERS Board of Administration implemented a three-year phase-in beginning in FY 2018-19 to lower the discount rate from 7.5% to 7.0%, resulting in significant increases in retirement costs. In FY 2021-22, the discount rate was further reduced to 6.8% due to the FY 2020-21 investment gain of 21.3%, which triggered the Funding Risk Mitigation Policy.

To mitigate the impact of pension rate volatility on the City's budget, the City established a Section 115 Trust in May 2018. The Section 115 Pension Trust had a balance of $17.2 million as of June 30, 2022, which can be utilized to fund pension costs.

Revenue Volatility
The City of Cupertino heavily relies on business-to-business (B2B) sales taxes for its sales tax revenue, making it highly sensitive to economic fluctuations. The City experienced the impact of this volatility during the dot-com crash from 2000 to 2004. The heavy reliance on the high-tech industry makes the City vulnerable, and the loss of one of the top three sales tax producers in FY 2013-14 made the City more dependent on a single tax producer, further increasing its vulnerability to business volatility.

The COVID-19 outbreak in 2020 significantly impacted the City's revenues from sales and transient occupancy taxes. Although certain sectors, such as restaurants and hotels, brick-andmortar retail and restaurants, were severely affected, the City experienced an increase in business-to-business sales tax revenues and County pool allocation. The increase in sales tax revenue was attributed to the rise in online sales due to statewide shelter-in-place mandates and the higher demand for computer and electronics equipment due to increased remote work. While 337
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18 the City's sales tax revenues reached historic highs in FY 2020-21 and FY 2021-22, the City considers it a one-time event, and the recovery of the restaurant and hotel, general consumer goods, and automotive industry groups did not offset the declines in business-to-business sales tax and County pool allocation as online sales decreased from their recent historic highs.

Transient occupancy tax revenue decreased due to reduced business travel during the pandemic but has begun to recover in FY 2022-23.

In December 2021, the CDTFA informed the City that an audit would be conducted on one of its taxpayers. The CDTFA verbally notified the City in March 2023 of its preliminary determination that tax dollars had been misallocated to the City and the potential impacts on the City. The CDTFA is expected to issue a formal letter to the City within the next four to six months, providing the final audit results and the actual amount of money lost. As a result of the audit, the City's sales tax revenue is expected to significantly decrease.

Appropriations Limit
Article XIII B of the California Constitution established appropriations limits on government agencies within California. Originally established by Proposition 4 in 1979, the appropriations limit places a maximum limit on the appropriations of tax proceeds by the State, school districts, and local governments in California.

The City’s FY 2023-24 appropriations limit is $127,886,394, an increase of $5,129,872, or 4.2%, from the FY 2022-23 limit of $122,756,522. Please refer to Attachment E for the calculation of the appropriations limit, and Attachment F for the corresponding price and population factors utilized in the calculation of the appropriations limit.

Budget Study Session
On May 17, 2023, City Council conducted a study session to review the FY 2023-24 Proposed Budget. During the session, City staff presented General Fund revenues, expenditures, and forecasts. City Council offered input, sought clarifications, and provided recommendations. For detailed staff responses to City Council's questions, please refer to Attachment G.

During the study session, Councilmembers made the following recommendations:
 Moore: remove the City Manager’s contingency fund; remove the 1.25% material and contract contingency.
 Chao: continue Art in Unexpected Places, Public Safety Forum, Bobateeno, and Movies in the Park events.
 Mohan: supports increasing funding for community grants.  Wei: revisit options to keep community grant funding, including Shakespeare in the Park; supports not filling the current 14 vacancies; use unassigned budget to preserve more community events and programs.

City Council conducted straw polls on the following recommendations:
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19 Recommendation Result
Restore full community funding to $32,500 5-0 Ayes
(Unanimous)
Remove City Manager’s contingency 4-1 Noes (Moore
voting yes)
Remove 1.25% material and contract contingency 4-1 Noes (Moore voting yes)
Continue Public Safety Forum Dinner Withdrawn
Retain Art in Unexpected Places 4-1 Noes (Chao
voting yes)
Continue Bobateeno* 4-1 Noes (Chao
voting yes)
Continue Movies in the Park 5-0 Ayes
(Unanimous)
Reduce staff by an additional 14 FTE 5-0 Noes
(Unanimous)
Any additional costs will be funded with:
a. additional use of fund balance
b. additional reduction of staff
c. creative ways for funding
a. 4-1 Ayes (Moore
voting no)
b. 5-0 Noes
(Unanimous)
c. 4-1 Noes (Moore
voting yes)
Bring information on the 30 current vacant positions – their roles and impacts. Bring options for potentially more staffing cuts (1, 2, 4) and their impacts on services and expenditures, either on June 6 or in Q1 as the City staff’s workload permits
3-2 Noes (Moore
and Chao voting
yes)
*The Council received information that Bobateeno has been ineffective at drawing teens for the expressed purpose of mental health and that staff would focus on other alternative programs.

Community Budget Survey, Outreach, and Town Hall
City staff took proactive measures to gather resident input through the Community Budget Survey, allowing residents to voice their preferences regarding service reductions and revenue generation strategies. By engaging the community directly, the City aimed to ensure that residents' opinions were considered in the decision-making process.

To reach a broader audience, City staff organized a diverse range of budget outreach events at local farmer's markets, Cupertino festivals, and in front of the Cupertino Library. These events provided opportunities for community members to learn about budget-related topics, offer feedback, and gain a deeper understanding of the City's current budget challenges and the strategies being implemented to address them.
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20 Furthermore, City staff hosted a Budget Town Hall event on May 18, 2023. This event served as a platform for residents to actively participate, sharing their insights, concerns, and questions regarding the budget. By facilitating open dialogue, the City aimed to ensure transparency and foster a collaborative approach to budget decision-making.

Through these comprehensive outreach efforts, the community was informed about the budget challenges faced by the City and had the opportunity to contribute their perspectives. The engagement of residents through the Community Budget Survey and various outreach events will play a crucial role in shaping the City's approach to expenditure reduction and revenue generation strategies, emphasizing the importance of resident involvement in the decisionmaking process.

General Plan Consistency and Environmental Compliance of the Capital Improvement Plan State law and the Cupertino Municipal Code (Section 2.32.070(C)) require the Planning Commission to review the CIP for consistency with the City's General Plan (General Plan:

Community Vision 2015 - 2040). The Planning Commission reviewed the FY 2023-24 Proposed CIP Budget on March 28, 2023, and found that the FY 2023-24 Proposed CIP is consistent with the City's General Plan and that this consistency determination is exempt from CEQA (see resolution Attachment H).

Sustainability Impact
No sustainability impact.

Fiscal Impact
City staff recommends establishing an Operating Budget of $117,645,365 and a Capital Improvement Program Budget of $4,054,000 for FY 2023-24.

California Environmental Quality Act
City staff has independently studied the Proposed CIP and determined that the CIP is exempt from environmental review pursuant to the exemption in Title 14-California Code of Regulations, §15061(b)(3), and §15378, in that it can be seen with certainty that there is no possibility that this CIP budget action will have a significant effect on the environment due to the approval of the budget, and does not involve approval of any specific project that may have a significant effect on the environment. Each proposed project will be evaluated to determine if the California Environmental Quality Act (CEQA) applies. As applicable, each project will conduct the appropriate level of environmental analysis.

Prepared by: Thomas Leung, Budget Manager
Reviewed by: Kristina Alfaro, Director of Administrative Services Approved for Submission by: Pamela Wu, City Manager
Attachments:

A – Draft Resolution – Operating Budget for Fiscal Year 2023-24 340
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21 B – Draft Resolution – Capital Budget for Fiscal Year 2023-24 C – Draft Resolution – Appropriations Limit for Fiscal Year 2023-24 D – Budget Adjustments Summary and Detail
E – Appropriations Limit for Fiscal Year 2023-24
F – Appropriations Limit Price and Population Factors for Fiscal Year 2023-24 G – Responses to Proposed Budget Study Session Questions H – Planning Commission Adopted Resolution
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ATTACHMENT A
RESOLUTION NO. 23-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO

ADOPTING AN OPERATING BUDGET FOR
FISCAL YEAR 2023-24 BY RATIFYING THE ADEQUACY OF ESTIMATED

REVENUES AND FUND BALANCES IN EACH FUND TO COVER

APPROPRIATED MONIES, APPROPRIATING MONIES THEREFROM FOR

SPECIFIED ACTIVITIES AND ACCOUNTS, AND SETTING FORTH

CONDITIONS OF ADMINISTERING SAID BUDGET
WHEREAS, the orderly administration of municipal government is dependent on the establishment of a sound fiscal policy of maintaining a proper ratio of expenditures within anticipated revenues and available monies; and
WHEREAS, the extent of any project or program and the degree of its accomplishment, as well as the efficiency of performing assigned duties and responsibilities, is likewise dependent on the monies made available for that purpose; and
WHEREAS, the City Manager has submitted her estimates of anticipated revenues and fund balances, has determined that estimated revenues and fund balances are adequate to cover appropriations, and has recommended the allocation of monies for specified program activities;
NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby adopt the following sections as a part of its fiscal policy:

Section 1. The estimates of available fund balances and anticipated resources to be received in each of the several funds during Fiscal Year 2023-24, as submitted by the City Manager in her proposed budget and amended during the budget study sessions, are sufficient to cover appropriations.

Section 2. There is appropriated from each of the several funds the sum of money set forth as expenditures for the funds named in the Fiscal Year 2023-24 Proposed Budget Financial Overview by Fund (Exhibit A), as amended during the budget sessions, and stated for the purposes as expressed and estimated for each department.

Section 3. The City Manager is hereby authorized to administer and transfer appropriations between Budget Accounts within the Operating Budget when in her opinion such transfers become necessary for administrative purposes. 342
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Section 4. The Director of Administrative Services shall prepare and submit to City Council quarterly a revised estimate of Operating Revenues.

Section 5. The Director of Administrative Services is hereby authorized to continue appropriations for operating expenditures that are encumbered or scheduled to be encumbered at year end.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 6
th day of June, 2023, by the following vote:

Vote Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Hung Wei, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Kirsten Squarcia, City Clerk
________________________
Date
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Exhibit A
FISCAL YEAR 2023-24 PROPOSED OPERATING BUDGET

FINANCIAL OVERVIEW BY FUND
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ATTACHMENT B
RESOLUTION NO. 23-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO

ADOPTING A CAPITAL IMPROVEMENT BUDGET FOR
FISCAL YEAR 2023-24 BY RATIFYING THE ADEQUACY OF ESTIMATED

REVENUES AND FUND BALANCES IN EACH FUND TO COVER

APPROPRIATED MONIES, APPROPRIATING MONIES THEREFROM FOR

SPECIFIED ACTIVITIES AND ACCOUNTS, AND SETTING FORTH

CONDITIONS OF ADMINISTERING SAID BUDGET
WHEREAS, the orderly administration of municipal government is dependent on the establishment of a sound fiscal policy of maintaining a proper ratio of expenditures within anticipated revenues and available monies; and
WHEREAS, the extent of any project or program and the degree of its accomplishment, as well as the efficiency of performing assigned duties and responsibilities, is likewise dependent on the monies made available for that purpose; and
WHEREAS, the City has independently studied the Proposed Capital Improvement Program (“CIP”) and has determined that the CIP is exempt from environmental review pursuant to the exemption in 14 California Code of Regulations §15061(b) (3) and §15378, in that it can be seen with certainty that there is no possibility that this CIP budget action will have a significant effect on the environment due to the approval of the budget, and does not involve approval of any specific project that may have a significant effect on the environment. Each project of the Proposed CIP projects will be evaluated for the application of the California Environmental Quality Act (“CEQA”) to it and, as applicable, each project will conduct the appropriate level of environmental analysis.

WHEREAS, the City Council, using its independent judgment, before taking action on this Resolution, determines that the CIP is exempt from CEQA as stated above; NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby adopt the following sections as a part of its fiscal policy:

Section 1. The estimates of available fund balances and anticipated resources to be received in each of the several funds during Fiscal Year 2023-24, as submitted by the City Manager in the proposed budget and amended during the budget study sessions, are sufficient to cover appropriations.
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Section 2. The Director of Public Works shall prepare and submit to City Council quarterly a revised estimate of Capital Improvement Program projects.

Section 3. The Director of Administrative Services is hereby authorized to continue appropriations for operating expenditures that are encumbered or scheduled to be encumbered at year end.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 6
th day of June, 2023, by the following vote:

Vote Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Hung Wei, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Kirsten Squarcia, City Clerk
________________________
Date
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Exhibit A
FISCAL YEAR 2023-24 PROPOSED CAPITAL IMPROVEMENT PROGRAM BUDGET

FINANCIAL OVERVIEW BY FUND
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ATTACHMENT C
RESOLUTION NO. 23-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO

ESTABLISHING AND ADOPTING THE APPROPRIATION
LIMIT IN THE AMOUNT OF $127,886,394 FOR FISCAL YEAR 2023-24 WHEREAS, the State of California has adopted legislation requiring local jurisdictions to calculate their appropriation limits in complying with Article XIII B of the State Constitution; and
WHEREAS, pursuant to Proposition 111, passed by the voters of California on June 5, 1990, said limits are determined by an adjustment formula based upon change in population, combined with either the change in inflation (California per capita income) or the change in the local assessment roll due to local nonresidential construction; and WHEREAS, the local governing body is required to set an appropriation limit each year by adoption of a resolution; and
WHEREAS, the County of Santa Clara’s population percentage change over the prior year is -0.25%, and the California per capita personal income change is 4.44%; and WHEREAS, in computing the 2023-24 limit based upon the adjustment factors provided pursuant to Proposition 111, the City Council has elected to use the county population percentage change along with the California per capita income change, but the Council expressly reserves the right to use the non-residential assessed valuation percentage change when the figure is available.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Cupertino hereby approves a 2023-24 fiscal appropriation limit of $127,886,394, based on Proposition 111 guidelines allowing for use of the county population percentage change along with the California Per Capita Personal Income change to adjust base year appropriations.

BE IT FURTHER RESOLVED that the City Council of the City of Cupertino hereby reserves the right to use the non-residential assessed valuation percentage change when the figure is available.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 6
th day of June, 2023, by the following vote:
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Vote Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Hung Wei, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Kirsten Squarcia, City Clerk
________________________
Date
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FY 2023-24 Budget Adjustments Since May 5
Operating Budget Summary

ATTACHMENT D
Fund Revenue Expenditure Change in
Fund Balance Description

GENERAL FUND
100 General Fund - 8,000 (8,000) Restoration of Community Grant Funding 100 General Fund - 8,380 (8,380) Restoration of Movies in the Park 100 General Fund - 28,784 (28,784) Reclassification of the Emergency Services Coordinator 101 General Fund 175 4,720 (4,545) County of Santa Clara Environmental Health Permit Fees 100 General Fund 84,218 - 84,218 Revenue from Elimination of Festival Fee Waivers 100 General Fund - (126,581) 126,581 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100 General Fund - (160,000) 160,000 Elimination of Library Extra Hours Funding 100 General Fund - (78,350) 78,350 Transfer and Increase Golf Course Turf Management TOTAL GENERAL FUND 84,393 (315,047) 399,440

SPECIAL REVENUE FUNDS
230 Env Mgmt Cln Crk Strm Drain - (3,264) 3,264 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 260 CDBG - (508) 508 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 265 BMR Housing - (1,041) 1,041 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 270 Transportation - (5,033) 5,033 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 270 Transportation 313,218 - 313,218 Increase SB 1 (Gas Tax) Revenue Estimate TOTAL SPECIAL REVENUE FUNDS 313,218 (9,846) 323,064

ENTERPRISE FUNDS
520 Resource Recovery - (2,691) 2,691 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 560 Blackberry Farm - (698) 698 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 560 Blackberry Farm - 225,000 (225,000) Transfer and Increase Golf Course Turf Management 570 Sports Center - (1,821) 1,821 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 580 Recreation Program - (2,320) 2,320 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability TOTAL ENTERPRISE FUNDS - 217,470 (217,470)

INTERNAL SERVICE FUNDS
610 Innovation & Technology - (8,176) 8,176 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 620 Workers' Compensation - (176) 176 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 630 Vehicle/Equipment Replacement - (1,840) 1,840 Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability TOTAL INTERNAL SERVICE FUNDS - (10,192) 10,192
TOTAL ALL FUNDS $ 397,611 $ (117,615) $ 515,226
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FY 2023-24 Budget Adjustments Since May 5
Capital Budget Summary

ATTACHMENT D
Fund Revenue Expenditure Change in Fund
Balance Capital Improvement Program Project

CAPITAL PROJECTS FUNDS
420 Capital Improvement Program - 420,000 (420,000) Stevens Creek Blvd./Calabazas Creek Storm Drain Repair (infrastructure) 420 Capital Improvement Program - 172,000 (172,000) Stevens Creek Bridge Repair (infrastructure) 420 Capital Improvement Program - 35,000 (35,000) Street Light Installation – Annual Infill (infrastructure) 420 Capital Improvement Program - 300,000 (300,000) Annual Playground Replacement (parks) 420 Capital Improvement Program - 100,000 (100,000) ADA Improvements (facilities) 420 Capital Improvement Program - 1,000,000 (1,000,000) Citywide Building Condition Assessment Implementation (facilities) 429 Capital Reserve 2,027,000 2,027,000 - Transfer from Capital Reserve to Capital Improvement Program Fund TOTAL CAPITAL PROJECTS FUNDS 2,027,000 4,054,000 (2,027,000) TOTAL ALL FUNDS $ 2,027,000 $ 4,054,000 $ (2,027,000)
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FY 2023-24 Budget Adjustments Since May 5
GL Account Detail

ATTACHMENT D
GL Account Revenue Expenditure Type Description
420-99-007 421-401 100,000 - CIP ADA Improvements (facilities) 420-99-007 900-905 - 100,000 CIP ADA Improvements (facilities) 420-99-085 421-401 300,000 - CIP Annual Playground Replacement (parks) 420-99-085 900-905 - 300,000 CIP Annual Playground Replacement (parks) 420-99-063 421-401 1,000,000 - CIP Citywide Building Condition Assessment Implementation (facilities) 420-99-063 900-905 - 1,000,000 CIP Citywide Building Condition Assessment Implementation (facilities) 420-99-266 421-401 420,000 - CIP Stevens Creek Blvd./Calabazas Creek Storm Drain Repair (infrastructure) 420-99-266 900-905 - 420,000 CIP Stevens Creek Blvd./Calabazas Creek Storm Drain Repair (infrastructure) 420-99-267 421-401 172,000 - CIP Stevens Creek Bridge Repair (infrastructure) 420-99-267 900-905 - 172,000 CIP Stevens Creek Bridge Repair (infrastructure) 420-99-056 421-401 35,000 - CIP Street Light Installation – Annual Infill (infrastructure) 420-99-056 900-905 - 35,000 CIP Street Light Installation – Annual Infill (infrastructure) 429-90-001 800-902 - 2,027,000 CIP Transfer from Capital Reserve to Capital Improvement Program Fund 100-84-811 700-702 - (78,350) Operating Transfer and Increase Golf Course Turf Management 560-63-616 700-702 - 225,000 Operating Transfer and Increase Golf Course Turf Management 270-85-821 440-437 313,218 - Operating Increase SB 1 (Gas Tax) Revenue Estimate 100-61-630 600-622 - 789 Operating County of Santa Clara Environmental Health Permit Fees 100-62-608 600-622 - 1,227 Operating County of Santa Clara Environmental Health Permit Fees 100-63-612 600-622 - 2,529 Operating County of Santa Clara Environmental Health Permit Fees 100-87-828 600-622 - 175 Operating County of Santa Clara Environmental Health Permit Fees 100-87-828 600-622 175 - Operating County of Santa Clara Environmental Health Permit Fees 100-11-150 500-501 - 1,080 Operating Reclassification of the Emergency Services Coordinator 100-11-150 501-507 - 16 Operating Reclassification of the Emergency Services Coordinator 100-11-150 501-500 - 343 Operating Reclassification of the Emergency Services Coordinator 100-12-633 500-501 - 20,523 Operating Reclassification of the Emergency Services Coordinator 100-12-633 501-507 - 297 Operating Reclassification of the Emergency Services Coordinator 100-12-633 501-500 - 6,525 Operating Reclassification of the Emergency Services Coordinator 100-60-636 700-702 - (160,000) Operating Elimination of Library Extra Hours Funding 100-10-101 700-702 - 8,000 Operating Restoration of Community Grant Funding 100-62-640 500-502 - 3,285 Operating Restoration of Movies in the Park 100-62-640 501-501 - 50 Operating Restoration of Movies in the Park 100-62-640 501-519 - 45 Operating Restoration of Movies in the Park 100-62-640 600-613 - 3,000 Operating Restoration of Movies in the Park 100-62-640 700-706 - 2,000 Operating Restoration of Movies in the Park 352
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GL Account Detail

ATTACHMENT D
GL Account Revenue Expenditure Type Description
100-61-605 480-401 84,218 - Operating Revenue from Elimination of Festival Fee Waivers 100-10-100 501-500 - (822) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-10-110 501-500 - (69) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-11-131 501-500 - (65) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-11-140 501-500 - (66) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-11-142 501-500 - (86) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-11-150 501-500 - (47) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-11-155 501-500 - (149) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-11-160 501-500 - (66) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-11-165 501-500 - (40) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-11-170 501-500 - (200) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-11-175 501-500 - (136) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-11-180 501-500 - (129) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-11-190 501-500 - (88) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-12-120 501-500 - (8,471) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-12-122 501-500 - (1,580) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-12-126 501-500 - (1,759) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-12-632 501-500 - (588) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-12-633 501-500 - (1,644) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-12-705 501-500 - (1,143) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-13-130 501-500 - (2,621) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-15-141 501-500 - (3,765) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-31-305 501-500 - (2,482) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-32-308 501-500 - (3,546) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-40-400 501-500 - (1,329) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-41-405 501-500 - (5,332) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-41-406 501-500 - (615) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-41-425 501-500 - (1,413) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-41-426 501-500 - (1,947) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-44-412 501-500 - (4,300) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-44-417 501-500 - (121) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-60-601 501-500 - (4,200) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-61-602 501-500 - (1,425) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-61-605 501-500 - (593) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 353
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GL Account Detail

ATTACHMENT D
GL Account Revenue Expenditure Type Description
100-61-630 501-500 - (1,078) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-62-608 501-500 - (1,588) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-62-623 501-500 - (1,216) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-62-639 501-500 - (463) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-62-640 501-500 - (131) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-63-612 501-500 - (1,822) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-70-700 501-500 - (639) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-71-701 501-500 - (7,167) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-71-702 501-500 - (3,122) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-73-713 501-500 - (2,538) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-73-714 501-500 - (5,468) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-73-715 501-500 - (4,057) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-73-718 501-500 - (201) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-74-202 501-500 - (2,654) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-80-800 501-500 - (3,619) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-82-804 501-500 - (3,630) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-82-806 501-500 - (5,653) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-83-807 501-500 - (2,416) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-84-808 501-500 - (251) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-84-809 501-500 - (843) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-84-811 501-500 - (570) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-84-812 501-500 - (2,239) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-84-813 501-500 - (4,249) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-84-814 501-500 - (1,293) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-84-815 501-500 - (464) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-85-848 501-500 - (769) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-85-850 501-500 - (419) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-86-261 501-500 - (468) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-86-824 501-500 - (3,470) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-86-825 501-500 - (3,779) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-86-826 501-500 - (956) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-827 501-500 - (426) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-828 501-500 - (343) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-829 501-500 - (295) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 354
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ATTACHMENT D
GL Account Revenue Expenditure Type Description
100-87-830 501-500 - (331) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-831 501-500 - (291) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-832 501-500 - (313) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-833 501-500 - (181) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-834 501-500 - (40) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-837 501-500 - (159) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-838 501-500 - (150) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-839 501-500 - (61) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-840 501-500 - (53) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-841 501-500 - (596) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-87-857 501-500 - (57) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-88-844 501-500 - (3,116) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-88-845 501-500 - (1,442) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 100-88-846 501-500 - (658) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 230-81-802 501-500 - (2,024) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 230-81-855 501-500 - (1,240) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 260-72-707 501-500 - (508) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 265-72-711 501-500 - (1,041) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 270-85-820 501-500 - (1,170) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 270-85-821 501-500 - (2,261) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 270-85-822 501-500 - (1,602) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 520-81-801 501-500 - (2,691) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 560-63-616 501-500 - (698) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 570-63-621 501-500 - (1,399) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 570-87-836 501-500 - (422) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 580-62-613 501-500 - (948) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 580-63-620 501-500 - (1,372) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 610-30-300 501-500 - (705) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 610-34-310 501-500 - (4,114) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 610-35-986 501-500 - (3,357) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 620-44-418 501-500 - (176) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability 630-85-849 501-500 - (1,840) Operating Savings from Prepaying CalPERS Pension Plan's Unfunded Accrued Liability TOTAL $ 2,424,611 $ 3,936,385
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ATTACHMENT E
Appropriations Limit for Fiscal Year 2023-24
In 1979, California voters approved Proposition 4, the Gann Initiative, and added Article XIIIB to the California State Constitution. Article XIIIB mandates a limit on the amount of proceeds of taxes that state and local governments can receive and appropriate (authorize to spend) each year.

The purpose of this law is to limit government spending by putting a cap on the total proceeds of taxes that may be appropriated each year. Proposition 111 and SB 88, approved by California voters in June of 1990, offered cities more flexibility in choosing inflation and population factors to calculate the limit.

The following chart and table show the appropriations limit and actual expenditures1 subject to the appropriations limit.

1 Actual Expenditures from the Annual Comprehensive Financial Report (ACFR) 356
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ATTACHMENT E
The limit is different for each agency and changes annually. It is calculated by taking the amount of tax proceeds that were authorized to be spent in FY 1978-79 and adjusting for changes in inflation and population each subsequent year.

Proposition 111 changed the way the limit is calculated and allowed a City to increase its limit annually in two ways:
 By the percent change in per capita personal income in California or the percent change in the assessment roll the preceding year due to the addition of local non-residential new construction; or
 By the percent change in county or city population.

The City used the following factors from the California Department of Finance.

Price Factor
 (A) Percent Change in California Per Capita Personal Income: 4.44% Population Factor
 (B) Percent Change in County Population: -0.25%
 (C) Percent Change in City Population: -0.87%
The City multiplied the FY 2022-23 appropriations limit by Price Factor (A) and Population Factor (B) to calculate the FY 2023-24 appropriations limit, as shown below:
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ATTACHMENT E
FY 2022-23 Appropriations Limit $122,756,522
Price Factor (A) 1.0444
Population Factor (B) 0.9975
FY 2023-24 Appropriations Limit $127,886,394
The City’s FY 2023-24 appropriations limit is $127,886,394, an increase of $5,129,872, or 4.2%, from the FY 2022-23 limit of $122,756,522.
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May 2023
Dear Fiscal Officer:

Subject: Price Factor and Population Information
Appropriations Limit
California Revenue and Taxation Code section 2227 requires the Department of Finance (Finance) to transmit an estimate of the percentage change in population to local governments. Each local jurisdiction must use their percentage change in population factor for January 1, 2023, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2023-24. Attachment A provides the change in California’s per capita personal income and an example for utilizing the price factor and population percentage change factor to calculate the 2023-24 appropriations limit. Attachment B provides the city and unincorporated county population percentage change. Attachment C provides the population percentage change for counties and their summed incorporated areas. The population percentage change data excludes federal and state institutionalized populations and military populations.

Population Percent Change for Special Districts
Some special districts must establish an annual appropriations limit. California Revenue and Taxation Code section 2228 provides additional information regarding the appropriations limit.

Article XIII B, section 9(C) of the California Constitution exempts certain special districts from the appropriations limit calculation mandate. The code section and the California Constitution can be accessed at the following website: http://leginfo.legislature.ca.gov/faces/codes.xhtml.

Special districts required by law to calculate their appropriations limit must present the calculation as part of their annual audit. Any questions special districts have on this requirement should be directed to their county, district legal counsel, or the law itself. No state agency reviews the local appropriations limits.

Population Certification
The population certification program applies only to cities and counties. California Revenue and Taxation Code section 11005.6 mandates Finance to automatically certify any population estimate that exceeds the current certified population with the State Controller’s Office. Finance will certify the higher estimate to the State Controller by June 1, 2023.

Please Note: The prior year’s city population estimates may be revised. The per capita personal income change is based on historical data.

If you have any questions regarding this data, please contact the Demographic Research Unit at (916) 323-4086.

JOE SPEPHENSHAW
Director
By:

Erika Li
Chief Deputy Director
Attachment
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May 2023
Attachment A
A. Price Factor: Article XIII B specifies that local jurisdictions select their cost of living factor to compute their appropriation limit by a vote of their governing body. The cost of living factor provided here is per capita personal income. If the percentage change in per capita personal income is selected, the percentage change to be used in setting the fiscal year 2023-24 appropriation limit is:

Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2023-24 4.44
B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2023-24 appropriation limit.
2023-24:

Per Capita Cost of Living Change = 4.44 percent
Population Change = -0.35 percent
Per Capita Cost of Living converted to a ratio: 4.44 + 100 = 1.0444 100
Population converted to a ratio: -0.35 + 100 = 0.9965
100
Calculation of factor for FY 2023-24: 1.0444 x 0.9965 = 1.0407 360
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Fiscal Year 2023-24
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2022 to January 1, 2023 and Total Population, January 1, 2023 County
City
Percent Change
2022-2023
--- Population Minus Exclusions ---
1-1-22 1-1-23
Total
Population
1-1-2023
Santa Clara
Campbell
Cupertino
Gilroy
Los Altos
Los Altos Hills
Los Gatos
Milpitas
Monte Sereno
Morgan Hill
Mountain View
Palo Alto
San Jose
Santa Clara
Saratoga
Sunnyvale
Unincorporated
-0.88
-0.87

0.62 -0.76
-0.40
-0.20

0.25 1.09
-0.67
-0.30
-0.60
-0.47

1.54 -0.62
-0.03
-0.52
43,092
59,673
59,709
31,257
8,414
33,167
80,862
3,481
46,201
83,856
67,674
963,745
130,462
30,758
156,364
91,239
42,713
59,154
60,078
31,021
8,380
33,102
81,067
3,519
45,892
83,601
67,268
959,256
132,476
30,567
156,317
90,766
42,713
59,154
60,078
31,021
8,380
33,102
81,067
3,519
45,892
83,601
67,287
959,256
132,476
30,567
156,317
91,649
County Total -0.25 1,889,954 1,885,177 1,886,079
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes. 361
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1 CITY COUNCIL STAFF REPORT
Meeting: June 6, 2023
Subject
Consider receiving staff responses to questions received from Councilmembers during Proposed Budget Study Session.

Recommended Action
Consider receiving staff responses to questions received from Councilmembers during Proposed Budget Study Session.

Background:

Staff’s responses to questions received from councilmembers are shown in italics.

Q1: Sister Cities is totaling a little over $135k and would like to have that and any other waiver of facilities used to be provided.
(Councilmember Moore)
Staff response:

Festival Fee Waivers Total Cost – $120,710 ($84,218 waiver, $36,492 city paid)  Cupertino Rotary: $17,501 waiver
 Cupertino Bhubaneswar Sister City: $16,401 waiver
 Cupertino Chamber of Commerce: $20,340 waiver
 Veteran’s Memorial: $3,528 waiver
 Home of Christ Church: $1,664 waiver
 Toyokawa Sister City: $43,052 waiver (two-day event)
 EnActe: $16,505 waiver
 American Cancer Society: $1,719 waiver
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2 Room Rental Fee Waivers FY 2022-23 – $24,945
 Friends of the Cupertino Library – Three weekend book sales per year – Ongoing permanent waiver approved at the July 8, 2019, City Council Meeting ($5,880 per year waiver)
 Cupertino Senior Advisory Council – Bingo Room Use – good until June 28, 2024, approved at the July 16, 2019, City Council Meeting ($17,750 waiver)  Santa Clara County Fire Department – SCC Fire leadership meetings on public safety in Cupertino – eight meetings total ($1,160 waiver)
 Cupertino Sheriff’s Substation – one Community Meeting on Tasers, one meeting about the AVA program to remove abandoned vehicles in Cupertino, and one Sheriff’s leadership meeting on Cupertino Public safety – three meetings total ($155 waiver) Staff has confirmed that both Rotary and Chamber have paid for all their facility rentals this fiscal year.

Q2: Can we have other visibility into other community funding including Sister City, Historical Society, and other organizations so we can consider them together? (Councilmember Chao)
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3 Staff response:

Historical Society Contract Total Cost – $200,000
The total grant funding provided pursuant to the agreement shall not exceed the annual sum of $40,000. The contract is currently for a three-year term ($120,000) with an option for two additional years ($80,000) for a total sum of $200,000 over five years.

Additionally, the agreement includes 18 meeting rooms and four large rooms at the Quinlan Community Center per calendar year and the Historical Museum space at Quinlan Community Center. Depending on the time of the meeting or event and the room rented, the monetary value ranges based on the following fees:
 Meeting Room = Conference Room
 Large Rooms = Cupertino and Social Room
 The space the museum currently occupies at Quinlan Community Center is relatively the same size as the Social Room.
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4 Q3: Can we explore the library services and library maintenance to see if there are any creative solutions?
(Councilmember Moore)
Staff response:

Library hours analysis and explanation – $329,698
The cost for additional operational hours is confirmed by the Santa Clara County Library District and estimated lower due to reimbursements received from the State. There were no actual expenses in FY 2020-21. The budget was intended to fund the GoGoBiblio Program, which was a two-year commitment approved in 2019. However, the program didn't run due to the pandemic and the Santa Clara County Library District didn't ask for the funds that fiscal year.

There were also no actual expenses in FY 2021-22. The pandemic caused a delay in the completion of the Cupertino Library Expansion project, which delayed the resumption of full operating hours more than halfway through the fiscal year. For this reason, and additional funding available elsewhere, the Santa Clara County Library District also didn't ask for the funds that fiscal year.

The FY 2023-24 Proposed Budget of $329,698 included $160,000 for additional Library Hours. As of May 18, 2023, the Financial & Administrative Services Manager for Santa Clara County Library District confirmed that the City will not be charged for Library extra hours in Fiscal Year 2023-24. As a result, this will be removed from the budget being presented to City Council on June 6.

Initially, the District suggested that there was a possibility that the funds might not be required.

They mentioned that the final decision would be discussed and determined during their board meeting in June. Considering this uncertainty, the City decided to budget for the funds, as there was still a chance that they would be needed. However, following the comment made at the recent City Council meeting, City staff promptly followed up with an email seeking clarification.

Subsequently, the District confirmed that the additional funds were indeed unnecessary, and this confirmation has been verified.
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5 It is not guaranteed each year that the state will reimburse the District for the funding of extra hours. This budget line item ensures that if the reimbursement is not available, the library can continue to be open for extra hours. Funding in this line item that is unused at the end of the fiscal year is returned to unassigned fund balance.

Q4: Explanation for why the sheriff’s response time is delayed. (Councilmember Moore and Chao)
Staff response:

The Sheriff’s office provided the following narrative:

On Nov. 12, 2022, the Sheriff’s Office received a Priority 1 call that affected the average response times for the reporting period. The call came in as a “CHP transfer for a burglary in progress.” All on-duty deputies were engaged in other incidents, such as a welfare check when the call came out.

Deputies did respond to the incident and detained the individual, who was intoxicated and at the wrong residence. Due to the extended response time for this single event, the average response time rose above the five-minute target. If the single call was removed, the Sheriff’s Office response time would be well below the five-minute target.

Q5: Can staff provide us with an offline memo of the projects listed on the development revenue estimates as each one of these projects has to either provide art or do the in lieu of fee?
(Councilmember Moore)
Staff response:

The following table shows the art project valuation and potential in-lieu fee for the development projects.

Project Valuation Art Project
Valuation
Potential In-Lieu
Fee

1. Apple VP1 $155,494,507 $1,499,451 $1,943,681

2. Canyon
Crossing
$18,908,462 $189,085 $236,356

3. Alan Row $8,794,900 $87,949 $109,936

4. Marina Plaza $122,115,199 $1,199,037 $1,526,440

5. Westport $123,353,733 $1,210,184 $1,541,922

6. Hampton
Apartments
$290,205,485 $2,711,849 $3,627,569

7. De Anza Hotel $72,849,515 $728,495 $910,619

8. Cupertino
Village Hotel
$66,175,539 $661,755 $827,194
Q6: Can staff provide a memo on where the vacancies are and what positions they are? (Councilmember Chao and Fruen)
Staff response: As of May 25, 2023, there are 32 total vacancies. 14 of those vacancies are 366
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6 recommended for elimination, 11 are currently being recruited for and the remaining 7 are vacant and not currently being recruited for. The table below shows the details of those vacancies.

Department Position Status
1 CMO Assistant City Manager Eliminate
2 CMO Management Analyst (Communications Analyst) 3 Yr.

Limited-Term
Eliminate
3 ADM SVCS Administrative Assistant Eliminate
4 CDD Office Assistant Eliminate
5 CDD Housing Senior Planner Eliminate
6 CDD Permit Center Manager Eliminate
7 REC Recreation Manager Eliminate
8 REC Community Outreach Specialist Eliminate
9 PW Maintenance Worker I/II Eliminate
10 PW Maintenance Worker I/II Eliminate
11 PW Maintenance Worker I/II Eliminate
12 PW Public Works Project Manager Eliminate
13 PW Public Works Project Manager 1 Yr. Limited-Term Eliminate 14 PW Assistant Director of Public Works1 Eliminate
15 CDD Administrative Assistant In Recruitment
16 CDD Permit Technician In Recruitment
17 CMO Economic Development Manager In Recruitment
18 CMO Management Analyst (Sustainability Management
Analyst)
In Recruitment
19 CMO Public Information Officer (Communications Officer) In Recruitment 20 CMO Senior Management Analyst In Recruitment
21 CMO Administrative Assistant In Recruitment
22 PW Senior Planner (Transit and Transportation Planner) In Recruitment 23 PW Maintenance Worker Lead - Streets In Recruitment
24 PW Senior Public Works Project Manager In Recruitment 25 PW Administrative Assistant In Recruitment
26 CDD Code Enforcement Officer Vacant
27 CDD Senior Planner Vacant
28 CDD Senior Planner Vacant
29 CDD Associate Planner Vacant
30 CDD Associate Planner Vacant
31 CDD Assistant Planner Vacant
32 CDD Planning Manager (Housing Manager) Vacant
1 Consolidation of roles will result in the elimination of a vacancy, may not be this position 367
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Resolution No. 2023-06
RESOLUTION N0. 2023-06

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF

CUPERTINO FINDING THE PROPOSED CAPIT AL IMPROVEMENT
PROGRAM FISCAL YEAR 2023-24 CONSISTENT WITH THE CITY OF

CUPERTINO GENERAL PLAN
WHEREAS, the City of Cupertino's Capital Improvement Program ( CIP) guides the funding and scheduling of infrastructure improvement projects over the coming Fiscal Year. The current CIP recommendations have been updated for the Fiscal Year ( FY) 2023- 2024 time period for City Council review and consideration; and WHEREAS, California Government Code Section 65401 requires that City's Planning Commission make a determination that the annual CIP is in conformance with the City's General Plan; and
WHEREAS, on March 28, 2023, the Planning Commission held a duly noticed public hearing on the subject application, and considered evidence presented by the City, city staff, and other interested parties.

NOW, THEREFORE, BE IT RESOLVED that the Planning Commission of the City of Cupertino hereby finds, determines, and resolves as follows:

Section 1: The Planning Commission has duly considered the full record before it, including the staff report and presentation, maps, facts, exhibits, public testimony and other evidence and materials submitted or provided to the Commission. Furthermore, the recitals set forth above are found to be true and correct and are incorporated herein by reference.

Section 2: The Planning Commission hereby exercises its independent judgment and determines that the action is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3). CEQA Guidelines section 15061(b)(3) states that a project is exempt from CEQA if llit can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment." The action is a determination of consistency with the General Plan and therefore it can be seen with certainty that there is no possibility that the action may have a significant effect on the environment. 368
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Resolution No. 2023-06
Section 3: The Planning Cornrnission finds in accordance with the Cupertino Municipal Code ( CMC) section 2.32.070 ( C) and state law based on the evidence in the public record that the City's CIP ( FY 2022-2023) conforms to the City's General Plan ( Community Vision 2015-2040.)
PASSED AND ADOPTED at a regular meeting of the Planning Commission of the City of Cupertino this 28' day of March 2023, by the following vote:

Members of the PIanning Commission
AYES: COMMISSIONERS: Scharf, Madhdhipatla, Fung, Lindskog, Mistry NOES: COMMISSIONERS: None
ABSTAIN: COMMISSIONERS: None
ABSENT: COMMISSIONERS: None
ATTEST: APPROVED:
y-)][L
Piu Ghosh
Planning Manager
StevJen Scharf
Chair, Planning Commission
4t/y}zozy
Date Da:(e '
4/5/2023
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CITY OF CUPERTINO
Agenda Item
23-12283 Agenda Date: 6/6/2023
Agenda #: 13.

Subject: Councilmember Reports
CITY OF CUPERTINO Page 1 of 1 Printed on 5/31/2023
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1 CITY COUNCIL ACTIVITY REPORT
Meeting:  Tuesday, June 6, 2023
Reporting Councilmember:  Councilmember Liang Chao
Report Activity Dates:  4/26/23 to 5/30/23
Event Date, Title, and Description:
(This list does not include internal meetings with staff only, such as prep sessions or meetings with the City Manager.)
2023‐04‐26 Santa Clara County Recycle and Waste Reduction Commission (RWRC) meeting (agenda)
‐ Joing Venture Silicon Valley presents an update on their food recovery program under a contract with RWRC
‐ Approved FY2023‐24 RWRC budget and Fiscal Agent Workplan ‐ Review the 2023 Legislative Priorities document and consider changes for 2024
2023‐04‐27 Santa Clara County Library JPA Board Meeting (agenda) ‐ Service Highlight Report and Employee Excellence Recipients ‐ FY 2023‐24 Preliminary Budget. Including 19‐year FTE by department and by city (page 66)
2023‐04‐29 Cupertino Cherry Blossom Festival
‐ Opening ceremony., visiting booths, and indoor exhibitions at Quinlan Center and Senior Center.
2023‐04‐29 Grand Opening at Berraco Coffee (former Coffee Society location, across from Main Street)
‐ Authentic Columbia Coffee. Very lively vibe. Great music and crowd. 2023‐04‐29 Annual meeting of Citizens for Better Community (CBC) in Fremont 371
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2 ‐ Invited by Charlies Liu, Fremont Planning Commissioner 2023‐05‐03 Panelist at CASPA APPI Heritage Month Panel at ARM ‐ Invited by CASPA (Chinese American Semiconductor Professional Association)
‐ Discussed history, culture, challenges and accomplishments of the AAPI communities in daily life and the workplace.
2023‐05‐06 AAPI Heritage Month Celebration by County Supervisor Joe Simitian 2023‐05‐10 Dinner with representatives from New Taipei City. Jhangshu High School
‐ The school takes the winners of Golden Hands award in Taiwan on a tour in the U.S. The delegation visited the Saratoga High.
‐ The dinner is hosted by the City of Cupertino.
2023‐05‐14 Taiwanese Reminiscent Acrobat Performance
‐ Invited by Stanley Kou, on behalf of Taiwan University Alumni Association and other organizations
2023‐05‐17 Panelist at Mayor & City Council Panel at Silicon Valley Smart City Expo ‐ Invited by Helen Wang. Program Chair of Silicon Valley Smart City Expo 2023‐05‐19 Reception and film screening of “Twelve Days” ‐ Invited by Director Jacko Tsang, Hong Kong Economic & Trace Office. 2023‐05‐20 Regnart Creek Cleanup – hosted by Cupertino Sustainability Department ‐ Cupertino hosts two creek cleanups a year.
2023‐05‐20 Meet up for Startup Incubation and Acceleration with Enterprise Guy, Keller William Office on Stevens Creek
‐ Most such meetups are in other cities. This is the first meetup at this location. ‐ This startup meetup will occur monthly.
2023‐05‐21 AAPI Multicultural Festival at Cupertino Civic Center ‐ Co‐hosted by 4 organizations, including Asian American Parents Association (AAPA) and AAPI Silicon Valley, Bayouth..
2023‐05‐23 Meet and greet for the delegation from the Economic Develop & Business Department of the Heilongjiang Province, China
‐ Hosted by the Northern California Dongbei Association and Silicon Valley Dongbei Chamber of Commerce
2023‐05‐25 VIP tour of de Young Museum for AAPI Women Leaders ‐ The first of such tour with a focus on AAPI women leaders. The museum wishes to expand its reach among AAPI communities and wishes to host similar tours in the future.
2023‐05‐25 Cupertino CREST Award
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3 ‐ Many of the city programs rely on dedicated volunteers who are recognized for “Extra Steps Taken.” Nominations are now being accepted for 2024 CREST Award until March 10, 2024.
2023‐05‐26 Tour of the Sunnyvale SMaRT Station, one of the MRF’s (Material Recovery Facility)
‐ Cupertino will soon put out RFP for MRF’s to help recover recyclable materials from the grey trash bins. The Sunnyvale station is a giant robotic sorting facility, which sorts the trash. There are human sorters and also robotic arms to identify recyclable plastics.
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CITY COUNCIL ACTIVITY REPORT
˜ȱȱ
ȱŽŽ’—DZȱ
Reporting Councilmember:ȱȱ
Report Activity Dates:ȱȱȱ
Event ŠŽǰȱTitleǰ and Description:

June 6, 2023
Councilmember J.R. Fruen
5/6/23 5/30/23
Event 1. 5/8/23 - SILICON VALLEY OFFICE OF PROTOCOL HONORING AMB. GENTRY SMITH - I attended a reception and talk in honor of Amb. Gentry Smith, who oversees security operations for U.S. diplomatic missions abroad.

Event 2. 5/11/23 - MEETING WITH CDTFA DIRECTOR NICOLAS MADUROS; MEETING WITH SACRAMENTO OFFICE OF SEN. DAVE CORTESE; MEETING WITH SACRAMENTO OFFICE OF ASM. EVAN LOW. At the invitation of Sen. Cortese, I met in with CDTFA Director Nicolas Maduros and the Sacramento offices of Sen. Cortese and Asm. Low to discuss Cupertino's financial health and needs.

Event 3. 5/11/23 - VTA POLICY ADVISORY COMMITTEE - I attended this meeting as Cupertino's appointed representative. The highlight of the meeting was a review of the Visionary Network that will guide VTA's planning priorities. If adopted by the Board, the focus of the plan will emphasize increasing services levels most especially through increased frequencies on major VTA routes.

Event 4. 5/18/23 - MEETING WITH GOVERNOR NEWSOM'S OFFICE, ASM. LOW'S OFFICE, & SEN. DAVE CORTESE'S OFFICE - At the invitation of Sen. Cortese, I met in with representatives of Governor Newsom's Office, together with representatives of the offices of Sen. Cortese and Asm. Low to discuss Cupertino's financial health and needs.

Event 5. 5/18/23 - BUDGET TOWN HALL MEETING - I attended this public forum on the city budget. Though lightly attended in Community Hall, some 40 individuals joined parallel Zoom session. City staff presented a clear explanation of the anticipated drop-off in sales tax revenue.

Event 6. 5/18/23 - AAPI MULTICULTURAL FESTIVAL - This event celebrated a wide range of Asian cultural traditions and was widely attended. This year's event was co-hosted by several local community organizations including two youth organizations, the Cupertino Library Foundation, and the Asian American Parent Association. Vice-Mayor Mohan, Councilmember Chao, and I presented certificates of commendation to each of the organizing groups.

Event 7. 5/24/23 - MATERIAL RECOVERY FACILITY TOUR - To better understand our upcoming choices for a new waste disposal and recycling contract, I toured the Sunnyvale SMaRT facility. 374
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2 Event 8. 5/25/23 ‐ CREST AWARDS CEREMONY ‐ Vice‐Mayor Mohan, Councilmember Chao, Councilmember Moore, and I presented awards to this yearʹs winners of the ʺCupertino Recognizes Extra Steps Takenʺ awards honoring those who have given back to the community through volunteerism. I had the honor of introducing this yearʹs Rising Star awardee: Adhya Kasamsetty.

Event 9. 5/26/23 ‐ VTA YARD MEMORIAL ‐ I attended this memorial to honor those killed in the VTA maintenance yard shooting that occurred on May 26, 2021.

Event 10. 5/8/23 & 5/12/23 ‐ I attended a series of External Auditor interviews for the RFP for auditing services in my capacity as a member of the Audit Committee 375
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CITY COUNCIL ACTIVITY REPORT
Meeting: Tuesday, June 6, 2023
Reporting Councilmember: Councilmember Kitty Moore
Report Activity Dates: 4/5/2023 to 5/28/2023
Event Date, Title, and Description:

April 5, 2023, Discover Stanford for You: Preventing Housing Displacement – One Family at a Time. End of COVID protections: funds and arguments which protected families struggling with rent payments resulting in housing displacement. Discussion of how Legal Aid Society of San Mateo County (and Law Foundation of Silicon Valley) help with housing displacement.

April 6, 2023, Santa Clara Valley Water Water Ambassador Program, Moore initiatied – application approved by SCVW BOD member. Attending multi-week course on water challenges, role of Valley Water, Valley Water Projects, and Organizational structure. Course begins today.

April 8, 2023, Cupertino Big Bunny Fun Run! Participated in the 5K, helped Parks and Recreation Staff give out all of the prize medals, placed 3rd for age group : ) Great and healthy fun for the community!
April 10, 2023, CPUC meeting, voluntary attendance.

April 12, 2023, Santa Clara Valley Water Commission, Chair was unable to attend, as Vice Chair I ran the meeting. We had a robust discussion on the water rates and proposed rate hikes and recommended the BOD not approve the rate hike, elected to hold the August meeting and will hold it at the Advanced Water Purification Center.

April 13, 2023, Apple site visit RE Agenda item project on Vallco Parkway and Tantau. 1 376
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April 16, 2023, Continuing Environmental Studies program: Environmental Resource Management and Pollution Prevention: Energy, Chemicals and Waste April 20, 2023, Santa Clara Valley Water Water Ambassador Program, Moore initiatied – application approved by SCVW BOD member. Attending multi-week course on water challenges, role of Valley Water, Valley Water Projects, and Organizational structure. Deep dive into the water system.

April 22, 2023 Attended Cupertino Earth Day from 11-2:20pm and visited many booths and collected lots of information. Great to see the event growing from last year! Cupertino has a lot to be proud of regarding Bird Safe/Dark Skies, Single Use Plastics, Climate Action 2.0, Reach Codes, and more!
April 24, 2023 Attended Senator Josh Becker and San Jose Mayor Matt Mahan’s press conference in support of Transitional Housing SB 643 to help provide sites for transitional homeless housing as a step to permanent housing.

April 26, 2023 Attended Supervisor Simitian’s 8th Lehigh Cement Plant and Quarry Community meeting. Of note was the mention of a 15 M gallon spill of potable water in 2022. (That is equivalent to 46 acre-ft which is 46 times the amount of water an average family of 4 would use inside and outside in a year). Efforts underway to ensure that the plant is permanently closed and begin remediation.

April 27, 2023 Attended Santa Clara County Homelessness Prevention meeting by Destination Home. Santa Clara County Homelessness Prevention System (HPS). Emergency financial assistance was analyzed and found to be very effective. HPS has had to turn away about 2/3ds of the people seeking assistance due to lacking capacity. Since starting the Eviction Diversion and Settlement Program in April 2022, they have served 167 cases, $2.9 M award, $17,608 average award per household, demand is great. Average rent for HPS participants is $1,987/month which is an increase of 12% YOY. More than half of the households HPS serves were not earning enough income to cover their monthly rent. More cost effective to prevent homelessness than to provide for homeless. Needs more funding, Measure A does not apply to this program.

April 29, 2023 Attended Cherry Blossom Festival and toured all of the indoor exhibits. Very well-attended and organized!
April 29, 2023 Attended the Grand Opening of Berraco Coffee at Stevens Creek Blvd. and S.

Tantau across from Main Street Cupertino. This new shop is one-of-a-kind and features specialty coffee.
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April 30, 2023 Ongoing Environmental Studies Environmental Resource Management and Pollution Provention: Energy, Chemicals and Waste, this week’s topic: Solid and Medical Waste Management: Legal and Technical Aspects. Very timely subject which included an overview of MRFs and Santa Clara County landfills with multiple videos on waste processing.

May 4, 2023 Santa Clara Valley Water Water Ambassador Program, Moore initiatied – application approved by SCVW BOD member. Attending multi-week course on water challenges, role of Valley Water, Valley Water Projects, and Organizational structure.

May 6, 2023 Attended Supervisor Simitian and the City of Mountain View’s Asian American Pacific Islander AAPI Heritage Month Celebration in Mountain View. Beautiful fusion of classical and contemporary music along with classic dance, fellowship, and community celebration of the founders of the local Asian Americans for Community Involvement and AACI’s 50 years of service to the community.

May 7, 2023 Continued Environmental Resource Management and Pollution Prevention course.

Waste: Current Topics & Issues.

May 8, 2023 2-hour Budget review with Senior City Staff, provided to all Councilmembers individually.

May 13, 2023 Ongoing Environmental Studies Environmental Resource Management and Pollution Prevention: Energy, Chemicals and Waste, this week’s topic: Chemical and Chemical Products: Legal and Management Aspects. Excellent overview of the Toxic Substances Control Act and its historical ineffectiveness (as compared to the FDA which requires drug testing prior to coming onto the market).

May 18, 2023 Santa Clara Valley Water Water Ambassador Program, Moore initiatied – application approved by SCVW BOD member. Attending multi-week course on water challenges, role of Valley Water, Valley Water Projects, and Organizational structure. This week’s course included Purified Water projects, Emergency Services, Racial Equity, diversity and Inclusion, Civic Engagement, Government Relations, and Communications. 378
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May 20, 2023 National Creek Cleanup Day at Regnart Creek! Volunteers pulled out 300 pounds of trash. I am holding part of a shopping cart:

May 21, 2023 Ongoing Environmental Studies Environmental Resource Management and Pollution Prevention: Energy, Chemicals and Waste, this week’s topic: Evaluation and Design of Chemicals and Chemical Products, in depth look at TSCA and the Green Chemistry initiative.

May 23, 2023 Santa Clara Valley Water Salt Pond Restoration update May 24, 2023 Santa Clara Valley Water Anderson Dam update May 25, 2023 Cupertino CREST Awards to congratulate our community volunteers! May 26, 2023 Material Recover Facility Tour. Extensive tour of a MRF with Councilmember Chao and our Environmental Programs Manager: Ursula Syrova. Resource recovery has come a long way from the days of sending everything into an unlined open pit dump to optically sorting plastics, baling plastics, cardboard, aluminum, and grinding food waste to be dried and pelletized for animal feed.

May 28, 2023 Ongoing Environmental Studies Environmental Resource Management and Pollution Prevention: Energy, Chemicals and Waste, this week’s topic: Chemicals and Pesticides: Current Topics and Issues. Overview of PFAS, Paper making process using Green Chemistry, Paper recycling, Chemical Safety Board activities, Safer Choice labeling, Underground Storage Tanks, Right-to-Know Network’s Risk Mgmt Plan database etc. 379
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1 CITY COUNCIL ACTIVITY REPORT
Meeting:  Tuesday, June 6, 2023
Reporting Councilmember:  Vice Mayor Sheila Mohan
Report Activity Dates:  5/9/23 to 5/30/23
Event Date, Title, and Description:
5/10/2023: Conducted Mayor’s meeting with Commissioners who provided updates on activities pertaining to each commission.

5/10/2023:     Attended the Silicon Valley Clean Energy Monthly Meeting of the Board of Directors. Staff updated the Board on Digital Engagement Initiatives intended to balance customers’ needs with capacity.

5/12/23: Interviewed audit firms who had responded to city’s RFPs for External Audit services.
5/15/2023:   Met with a group of Indo‐American constituents who wanted the City to oppose Senate Bill 403 which they maintained was discriminatory to the South Asian community.  The cities of Santa Clara and Fremont have issued public statements opposing the Bill and the group requested Cupertino to do the same.
5/16/23: Attended, along with Mayor Wei and City Manager Wu, a special event at De Anza College to honor student veterans and celebrate the creation of a new mural, “Stronger, Together”.
5/18/23: Attended the City’s Budget Town Hall meeting where City staff presented the 2023‐24 budget to the public and responded to questions. 380
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2 5/21/23: Celebrated the Asian American Pacific Islanders Multicultural Festival held in the Civic Center Plaza. The festival and the various booths hosted by many Asian community groups were well attended. Dance and music performance groups provided entertainment throughout the afternoon. Elected officials, including Supervisor Joe Simitian, Cupertino city councilmembers, and school board trustees participated in the festivities. 5/24/23: Accompanied by City Manager Wu, I filled in for Mayor Wei at the West Valley Mayors and Managers monthly meeting. Items of mutual interest, such as infrastructure financing and team building were discussed.
5/25/23: At the CREST Awards ceremony, welcomed the community to one of the City’s most noteworthy events, and along with Councilmembers Chau, Fruen and Moore, presented awards to those who best exemplify the City’s volunteer spirit. Thank you to the staff who did such a wonderful job organizing all the details of the event. 381
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1 CITY COUNCIL ACTIVITY REPORT
Meeting:  Tuesday, June 6, 2023
Reporting Councilmember:  Mayor Hung Wei
Report Activity Dates:  5/10/23 to 5/19/23

Event Date, Title, and Description:

Event 1. May 10, 2023, Santa Clara County Peace Officers Memorial Ceremony Attended Peace Officers Memorial Ceremony at Santa Clara County Sheriff Headquarters in memory of peace officers who dies in line of duty – a salute to all who sacrificed their lives to protect our way of life and pay respect to the families for the loss of their loved ones.

Event 2. May 11, 2023, Cities Association of Santa Clara County, City Selection Committee Meeting, Legislative Action Committee Meeting, and Board of Directors Meeting Attended three meetings of the Cities Association of Santa Clara County – City Selection Committee Meeting appointing City Councilmembers to vacancies of various committees; Legislative Action Committee Meeting to seek legislative recommendations from all cities; and Board of Directors Meeting discussing topics relevant to all cities

Event 3. May 12, 2023, Silicon Valley Clean Energy Finance and Administration Committee Meeting
Chaired the Finance and Administration Committee Meeting of SVCE, reviewed Enterprise Risk Management Report, current and future financial outlook, and made recommendations to the Board of Directors
Event 4. May 12, 2023, Midpeninsula Regional Open Space District Meeting Met with Manager, staff, and Board Member of the Midpeninsula Regional Open 382
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Space District with City Manager Pamela Wu for an overview of the goals, functions, areas, and future projects of the Midpeninsula Regional Open Space District, especially future trail developments in Cupertino.  Midpeninsula Regional Open Space District plans to make a report during a future Cupertino City Council Meeting
Event 5. May 13, 2023, CalColor Academy 10th Anniversary Art Show at Santa Clara Convention Center
Attended the 10th Anniversary Art Show of CalColor Academy, made a speech to commend and encourage creative and artistic expressions of students and gave out awards to various categories.

Event 6. May 14, 2023, Palestinian Cultural Day Celebration at Santa Clara  County Plaza
Attended the Palestinian Cultural Day Celebration with a Proclamation from the City of Cupertino celebrating inclusion, unity, and peace.

Event 7. May 14, 2023, Taiwan Acrobatic Troupe of National Taiwan College of Performing Arts Show at California Theater in San Jose
Attended the “Taiwan Reminiscence” Show celebrating Taiwanese American Heritage Week and Asian Heritage Month hosted by the Taiwanese American Center of North California –  fabulous and amazing acrobatic performances! Event 8. May 15, 2023, Budget Review with City Staff
Reviewed the upcoming City Budget with City Manager, Assistant City Manager and Department Heads, asked questions and received a thorough and detailed review.

Event 9. May 16, 2023, Smart Station Tour in Sunnyvale
Toured the SMaRT Station owned by the City of Sunnyvale to receive first hand experience of how trash is sorted via machines (tunnels), manual separation, and robot operations.
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Event 10. May 16, 2023, Veteran’s Mural Unveiling Ceremony at De Anza College Attended the Veteran’s Mural Unveiling Ceremony at De Anza College – an amazing mural honoring veterans who study at De Anza and Foothill Colleges.

Toured the facility where veteran students can study, relax, and receive counseling.

The project is sponsored by the Rotary Club of Cupertino and the Foothill De‐Anza Foundation.

Event 11. May 17, 2023, Celebration of “Respect for Law” by Optimist Club Attended Cupertino Optimist Club Meeting to celebrate “Respect for Law” by honoring two officers from the West Valley Sheriff’s Division at Cupertino County Inn
Event 12. May 18, 2023, Cupertino Employees Bike‐to‐Picnic Lunch at Memorial Park
Attended Cupertino Employee Bike‐to‐Picnic Lunch, made delicious smoothies by peddling, enjoyed fellowship, and fun drawings.

Event 13. May 18, 2023, Be Natural Music Meeting
Met with staff at Be Natural Music to explore opportunities for its 13 bands to perform in various events as a service to the communities in Cupertino, Sunnyvale, and surrounding cities.
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CITY OF CUPERTINO
Agenda Item
23-12333 Agenda Date: 6/6/2023
Agenda #: 14.

Subject: Informational Memorandum update on drought conditions Receive informational memorandum update on drought conditions CITY OF CUPERTINO Page 1 of 1 Printed on 5/31/2023
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CITY COUNCIL INFORMATIONAL MEMORANDUM
Meeting: June 6, 2023
To: Cupertino City Council
From: Chad Mosley, Interim Director of Public Works
Re: Receive drought conditions update.

Background
In 2021, the State of California (State), including Santa Clara County (County), was in its third consecutive year of a drought. According to the U.S. Drought Monitor, most of the County was in a condition of “Extreme” drought. The year 2021 was the third driest year on record and the driest since 1977. Local watershed runoff in the County was substantially limited due to extremely dry conditions. As a result, Santa Clara Valley Water District’s (Valley Water) local surface water storage was below 30 percent.

Year: 2021 Year: 2023
Source: US Drought Monitor
On June 9, 2021, Valley Water adopted a resolution declaring a water shortage emergency condition within the County and a call for retailers to achieve a water use reduction target equal to 15 percent of 2019 water use (33 percent of 2013 water use). Subsequently on April 386
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12, 2022, Valley Water further required property owners no more than two days of irrigation in a week for ornamental lawns and prohibit excessive runoff, midday irrigation, and irrigation after rainfall events.

In addition, the Governor signed an executive order on July 8, 2021, calling on all Californians to voluntarily reduce their water use by 15% compared to 2020 levels through simple actions such as reducing landscape irrigation, running dishwashers, and washing machines only when full, finding, and fixing leaks, installing water-efficient showerheads and taking shorter showers. The Governor also directed state agencies to take further actions to preserve critical water supplies, address drought impacts, and protect people, natural resources, and economic activity.

Current Water Supply
The water supply outlook for the State as well as Valley Water has improved considerably over the past six months due to several atmospheric river events. In January, the State experienced one of the wettest three-week periods on record which led to increased storage in major reservoirs in the State. According to the report by California Department of Water Resources, the snow survey conducted on April 3 determined that the snowpack is 237 percent above the average for the date. Statewide reservoir storage is expected to go higher once snow melts commence.

Due to the water supply outlook, on March 24, 2023, the Governor signed Executive Order N-5-23, which rescinded the previous voluntary call for 15 percent water use reduction and the requirement that urban water suppliers activate Level 2 of their water shortage contingency plans. However, the Governor left in place other State water use restrictions, including, but not limited to, restrictions against runoff and watering lawns within 48 hours of rain, and using drinking water to irrigate non-functional turf on commercial, industrial, and institutional (CII) properties.

Valley Water manages ten local reservoirs, and these are collectively at approximately 180% of restricted storage capacity and the 2023 end of year groundwater storage is projected to be in the normal range. To align with the State, the Valley Water Board approved the following measures on April 11:
 Rescind the Water Shortage Emergency Condition calling for a countywide mandatory 15% water-use reduction compared 2019 usage. The removal of the mandatory water use reduction would be consistent with the Governor’s action.  Direct the CEO to bring a recommendation for the Board's consideration for additional actions to support water conservation as a way of life in our county and state.

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watering limit for residential nonfunctional turf. The enforcement of outdoor water waste restrictions against runoff, midday watering, watering after rainfall, and watering of CII nonfunctional turf will continue as well.

City Operations
The City has a long history of conserving water across its operations, leading by example through its practices, and encouraging businesses, residents, and schools to do the same.

Upon Valley Water’s June 2021 call to conserve 15% of 2019 water usage levels, staff implemented water conservation restriction measures for City facilities similar to those enacted during the drought in 2015. The conservation measures included the following:
 Reduced irrigation for all trees/shrubs, setting water use at a minimum according to the conservation amount.
 No watering of passive turfed areas.
 Limited watering (consistent with two days/week watering or similar) of turf areas used intermittingly at City permitted events.  A minimum of 20 percent reduced watering of turf areas used for City or school recreation events.
 No operation of the interactive fountain at Community Hall.  No water used to clean asphalt areas/sidewalks/plaza areas.  Water used for street sweeping was minimized while still complying with Santa Clara Valley Air Board requirements.

Based on the City’s water conservation efforts at City facilities, the City reduced an estimated 16% below the total 2019 consumption in comparison with the total 2022 consumption. The majority of the savings is attributed to the reduction of water use across parks, sports fields, school sites, and at programmed turf areas to 2 days per week. The non-programmed turf areas were not watered.

Although the State and Valley Water have rescinded the call for 15% water-use reduction, the City will voluntarily continue the water conservation efforts for City facilities. The conservation measures noted above will continue and will be adjusted as needed based on the condition of the landscape areas.

These water conservation efforts will also help to reduce overall irrigation costs for the City facilities.

In summary, both the State of California and Valley Water have rescinded their call for 15% water use reduction as drought conditions have improved. However, the City will voluntarily continue to conserve water by keeping the irrigation cycle similar to the restriction imposed during the drought at City facilities and adjust, as necessary. In addition, the City will:
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 Continue to coordinate with San Jose Water and Cal Water Services on water conservation efforts throughout the City.
 Work with Valley Water to continue promoting water conservation programs for residents and businesses within the community.

Sustainability Impact
Actions taken to conserve water across the City’s municipal portfolio directly implement Cupertino’s Climate Action Plan Measure M-F-7: Conserve water through efficient landscaping and enable the City to advance its emissions reduction goals arising from onsite water use. Further, these visible actions showcase the City’s commitment to protecting this diminishing limited resource with the goal of spurring similar water conservation action across the community, above and beyond minimum requirements.

Fiscal Impact
No fiscal impact with receiving the update.

California Environmental Quality Act (CEQA)
Not applicable.
______________________________________________________________________________ Prepared by: Jimmy Tan, Assistant Director of Public Works Reviewed by: Chad Mosley, Interim Director of Public Works Reviewed by: Matt Morley, Assistant City Manager
Approved for Submission by: Pamela Wu, City Manager
Attachments:

A – City of Cupertino Water Conservation Restriction Measures for City Operations B – Valley Water Resolution No. 21-68
C – Valley Water Resolution No. 22-20
D – State of California Proclamation of a State of Emergency E – State of California Executive Order N-10-21
F – State of California Executive Order N-5-23
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Cupertino Water Conservation Restriction Measures 2021

RESTRICTION MEASURE PURPOSE
Collective impacts of drought, climate change, increased population demands, and potential natural disasters require the conservation and efficient use of water. The purpose of these measures are to conserve and efficiently use water at all City owned facilities while maintaining safe conditions for employees and the public.

Improvement of City owned facilities to reduce water use, other than those typical for normal operation or maintenance, are not covered in these measures.

RESTRICTION MEASURES
At all times the use of water at City facilities is to be as efficient as practically possible. During periods of drought, water conservation procedures will be followed at all City facilities. Wasting of water is to be avoided at all times of the year.

Annually, every City facility* is to have water use quantified in volume and dollars as follows:

Amount of water use for buildings
Amount of water use for landscape shrubs and/or trees
Amount of water use for turf utilized by recreation programmed by the City or Cupertino Unified School District
Amount of water use for turf utilized by permitted City events Amount of water use for remaining turf
Amount of water used in ponds and/or fountains
*Metering of water at City facilities may or may not be separate for each identified water use.

When one meter services several uses, amounts of individual water use is to be interpolated.

Annually, water used for City operation shall be analyzed cumulatively and separately for each facility. Comparisons will be made to prior years.

Facilities included are:

1. Blackberry Golf Course

2. Canyon Oaks Park

3. Collins Elementary School / Portal Park

4. Creekside Park

5. Eaton Elementary School

6. Faria Elementary School

7. Franco Park

8. Garden Gate Elementary School

9. Hoover Park

10. Hyde Middle School

11. Jollyman Park

WATER CONSERVATION RESTRICTION MEASURES FOR CITY

OPERATIONS

PUBLIC WORKS DEPARTMENT

ROGER LEE, DIRECTOR OF PUBLIC WORKS
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
(408) 777-3254 • FAX (408) 777- 3333• www.cupertino.org 390
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12. Kennedy Middle School

13. Library Field / Civic Center

14. Lincoln Elementary School

15. Linda Vista Park

16. McClellan Ranch Community Gardens

17. Memorial Park / Quinlan Community Center

18. Monta Vista Recreation Center

19. Oak Valley Park

20. Regnart Elementary School

21. Sommerset Square Park

22. Stevens Creek Elementary School / Varian Park

23. Sterling Barnhart Park

24. Three Oaks Park

25. Wilson Park
Attachment A to these measures shall identify each of the above facilities with an aerial site plan prepared and annually updated as site conditions change. Each site plan shall indicate:

Area of all existing turf
Area of existing turf intermittingly used by City permitted events Area of existing turf programmed by for City or school recreation events When conservation measures are implemented and it is likely that the public is impacted by the measures, educational signage shall be erected at every facility.

PROCEDURES
Drought conservation measures may be required individually or collectively by the State, Santa Clara Valley Water District (SCVWD), San Jose Water Company (SJWC) or California Water Service Company (CWSC). Water conservation measures recommended or mandated by SCVWD shall be followed for all City operations. If State requirements, specific to the Cupertino area, are more onerous than SCVWD measures, then State requirements shall be followed for all City operations. Water conservation rules, as implemented by either SJWC or CWSC and in support of either State and/or SCVWD requirements, shall be followed. Due to the limited area of the City serviced by CWSC, the rules implemented by SJWC shall be applied City-wide unless otherwise prohibited.

The description and action to be taken for various stages of drought are as follows:

Stage # Condition Action
1 No drought conservation
measures required.

None
2 Reduction < 10% * Reduce water programming of
all outside irrigation by a
minimum of the conservation
amount.
3 10% < Reduction < 20% Reduce water
programming of all
outside irrigation by a
minimum of the
conservation amount.
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No filling of ponds at
Memorial Park.

Reduce operational
hours of interactive
fountain at Community
Hall from 10AM – 8PM
to Noon – 6PM.

Water used to clean
asphalt areas /
sidewalks / plaza areas
to be minimized and
follow stormwater
requirements.
4 20% < Reduction < 40% Reduce water
programming of all
outside irrigation for
trees / shrubs by a
minimum of the
conservation amount.

Large and/or
desirable species
to have priority
over less
desirable species
No watering of turf
used passively.

Limited watering
(consistent with 2 days /
week watering or
similar) of turf areas
used intermittingly by
City permitted events.

A minimum of 20%
reduced watering of turf
areas programmed by
City or school
recreation events.

Each facility will be managed
in accordance with the areas
defined in Attachment A.

No filling of ponds at
Memorial Park.

No operation of the
interactive fountain at
Community Hall.

No water used to clean
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asphalt areas /
sidewalks / plaza areas.

Water used for street
sweeping to be
minimized while
complying with Santa
Clara Valley Air Board
requirements.
5 Reduction > 40% Reduce water
programming of all
outside irrigation for
trees / shrubs by a
minimum of the
conservation amount.

Large and/or
desirable species
to have priority
over less
desirable species
No watering of turf
unless required to
maintain safe
conditions.

No filling of ponds at
Memorial Park.

No operational of the
interactive fountain at
Community Hall.

No water used to clean
asphalt areas / streets /
sidewalks / plaza areas.

Water used for street
sweeping to be
minimized while
complying with Santa
Clara Valley Air Board
requirements.
*All reduction percentages are relative to water consumption in 2013.

Blackberry Farm Golf Course (BBGGC) and McClellan Ranch Community Gardens (MRCG) watering is not subject to the Stage 1-4 reductions. BBFGC and MRCG shall follow at a minimum the conservation requirements of SJWC.

Unless prohibited by water authorities, watering of all trees and desirable shrubs may occur during all stages of drought as necessary.
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RESPONSIBILITY
All employees of the Public Works Department are responsible for the implementation of these measures.

APPROVED
_______________________
Roger Lee
Director of Public Works

ATTACHMENTS
Attachment A
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ATTACHMENT A
Water Conservation Restriction Measures for City Operations

1. Blackberry Golf Course

2. Canyon Oaks Park

3. Collins Elementary / Portal Park

4. Creekside Park

5. Eaton Elementary

6. Faria Elementary

7. Franco Park

8. Garden Gate Elementary

9. Hoover Park

10. Hyde Middle School

11. Jollyman Park

12. Kennedy Middle School

13. Library Field / Civic Center

14. Lincoln Elementary

15. Linda Vista Park

16. McClellan Ranch Community Gardens

17. Memorial Park / Quinlan Community Center

18. Monta Vista Rec Center

19. Oak Valley Park

20. Regnart Elementary School

21. Sommerset Square Park

22. Stevens Creek Elementary / Varian Park

23. Sterling Barnhart Park

24. Three Oaks Park

25. Wilson Park
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BlackBerry Golf Course
599916.18 SF

GRANADA AVE

MINAKER CT

STEVENS CREEK BLVD

SCENIC BLVD
ADELH
EID CT

BYRNE AVE

STOCKLMEIR CT

DEAN CT

HERMOSA AVE

LOMITA AVE

ALMADEN AVE

SAN FERNANDO AVE

BYRNE CT
Irrigation Area
Programmed
Layer
Twenty irrigation heads to be turned
off resulting in reduction of
141,300 SF
0 90 180 45 US Feet
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Canyon Oaks Park
1416.35 SF
6598.38 SF
1661.93 SF

ST MARY'S DR

CANYON OAK WAY
Irrigation Area
Limited Irrigation
0 10 205 US Feet
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Civic Center
2828.75 SF
10383.62 SF
3297.9 SF
805.6 SF
23124.25 SF
10907.21 SF
5046.33 SF
3968.15 SF

TORRE AVE

TOWN CENTER LN

RODRIGUES AVE
Irrigation Area
Limited Irrigation
Brown Turf Area
Drip Irrigation
0 30 60 15 US Feet
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Collins Elementary / Portal Park
37094.95 SF
5497.49 SF
69049.63 SF
100878.96 SF

TWILIGHT CT

N PORTAL AVE
Irrigation Area
Limited Irrigation
Brown Turf Area
Programmed
0 40 80 20 US Feet
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Creekside Park Soccer Field
4119.05 SF
4207.1 SF
123880.09 SF
184448.36 SF

PHIL LN

LA MAR CT

MILLER AVE

HOWARD CT
Irrigation Area
Brown Turf Area
Drip Irrigation
Programmed
0 60 120 30 US Feet
400
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Eaton Elementary
3454.94 SF
133180.35 SF

FARALLONE DR

JOHN DR

SUISUN DR
Irrigation Area
Brown Turf Area
Programmed
0 40 80 20 US Feet
401
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Faria Elementary School
115744.6 SF
Irrigation Area
Programmed Area
0 25 50 12.5 US Feet
402
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Franco Park
1103.6 SF
2491.53 SF XXX

FRANCO CT
Irrigation Area
Limited Irrigation
Brown Turf Area
0 10 20 5 US Feet
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Garden Gate Elementary
107246.15 SF
Irrigation Area
Programmed
0 25 50 12.5 US Feet
404
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Hoover Park
150955.2 SF
11642.38 SF
29687.97 SF
2081.79 SF
608.82 SF

GALWAY DR BARNHART PL

LEEDS AVE

DONEGAL DR
Irrigation Area
Brown Turf Area
Drip Irrigation
Programmed
0 40 80 20 US Feet
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Hyde Middle School
77961.7 SF
112329.34 SF

STENDHAL LN

DISNEY LN

HYDE AVE
Irrigation Area
Programmed
0 50 100 25 US Feet
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Jollyman Park
128150.42 SF
107504.03 SF
123070.67 SF DUMAS DR

TUSCANY PL

S STELLING RD

ORLINE CT
RT 85

COLONY HILLS LN

JOLLYMAN DR

HEATHERWOOD DR

JOLLYMAN LN

DE FOE DR

ELDERWOOD CT
Irrigation Area
Brown Turf Area
Programmed
0 60 120 30 US Feet
407
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Kennedy MIddle School
21789.05 SF
73786.91 SF
60366.74 SF
180289.76 SF

HYANNISPORT DR

OLD TOWN CT

NEW HAVEN CT

PROVIDENCE CT

LIBERTY CT

ROSARIO AVE

RONALD WAY

BUBB RD

MARIA ROSA WAY

FORT BAKER DR

EDWARD WAY
Irrigation Area
Brown Turf Area
Programmed
0 80 160 40 US Feet
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Library field
105169.89 SF
29818.28 SF
10383.62 SF

PACIFICA DR

WHITNEY WAY

TORRE AVE
Irrigation Area
Brown Turf Area
Programmed
0 30 60 15 US Feet
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Lincoln Elementary School
98067.33 SF

PRESIDIO DR
Irrigation Area
Programmed
0 30 60 15 US Feet
410
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Linda Vista Park
9386.58 SF
5992.7 SF
9986.18 SF
8243.79 SF
67029.67 SF

BAXLEY CT
Irrigation Area
Limited Irrigation
Brown Turf Area
0 50 100 25 US Feet
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McClellan Ranch Gardens
59085.28 SF
SCENIC
CT

CLUB HOUSE LN

MCCLELLAN RD
RAE LN

SCENIC CIR

TRESSLER CT

MIRA VISTA AVE

SCENIC BLVD

PAR THREE DR
Irrigation Area
Programmed
0 75 150 37.5 US Feet
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Memoria Park /Quinlan
15008.99 SF
8924.47 SF
29764.2 SF
9291.58 SF
5337.87 SF
10646.29 SF
6213.4 SF
6137.81 SF
13217.83 SF
8912.03 SF
815.85
1727.76 SF SF
776.53 SF
1831.71
SF
78150.01 SF
55873.11 SF
6168.5 SF
2177.94 SF
1261.5 SF
737.81 SF
284.05 SF
2542.93 SF
25468.09 SF
19149.15 SF 9634.67 SF
6770.61 SF
4204.24 SF
63036.64 SF
1259.09 SF
3176.19
SF
3948.72 SF
437.59
SF
4410 SF
4974.6 SF 3174.73 SF
576.94
SF 3307.06 SF
3054.25 SF
6768.15 SF
2649.23 SF
581.38 SF
5065.7 SF
3254.07 SF

ALVES DR

FENWAY CT

STEVENS CREEK BLVD CONGRESS PL

UNITED PL

FREEDOM DR
F
R
E

EDOM PL
XXX

CHRISTENSEN DR

S STELLING RD
N

STELLING
RD

SENATE WAY

LAURETTA DR
MARY
AVE

ANTON WAY

PATRIOT WAY
Irrigation Area
Limited Irrigation
Brown Turf Area
Drip Irrigation
Programmed
0 80 160 40 US Feet
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Monta Vista Rec Center
40592.61 SF
7284.21 SF
3295.01 SF
61479.53 SF
8564.87 SF
6391.44 SF
2259.93 SF
13565.92 SF

5.91 SF
2025.44 SF

WOODRIDGE CT MERRIMAN RD

MCKLINTOCK LN

VOSS AVE
Irrigation Area
Limited Irrigation
Brown Turf Area
Drip Irrigation
Programmed
0 40 80 20 US Feet
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Oak Valley Park
1701.62 SF
2217.14 SF

BLACK OAKWAY

OAK VALLEY RD
Irrigation Area
Limited Irrigation
Brown Turf Area
0 10 20 5 US Feet
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Regnart Elementary
111389.59 SF
4903.18 SF
6128.4 SF
1647.7 SF
4551.24 SF

YORKSHIRE DR ELMSFORD
DR
Irrigation Area
Limited Irrigation
Brown Turf Area
Programmed
0 30 60 15 US Feet
416
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Sommerset Square Park
4864.69 SF
22351.51 SF
718.92 SF

STOKES AVE

MADERA DR
RT 280
RT 280 SB TO RT 85 SB TRANS
Irrigation Area
Limited Irrigation
Brown Turf Area
Drip Irrigation
0 30 60 15 US Feet
417
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Stevens Creek Elementary
43814.44 SF
28754.46 SF
2634.25 SF
2619.07 SF
77975.13 SF
7216.72 SF

AINSWORT
H DR

VARIAN WAY

AMELIA CT

STONYDALE DR
Irrigation Area
Limited Irrigation
Brown Turf Area
Programmed
0 50 100 25 US Feet
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Sterling Barnhart
2263.05 SF
568.62 SF
1384.24 SF
1139.36 SF
801.73 SF
2564.73 SF

STERLING BLVD
Irrigation Area
Limited Irrigation
Drip Irrigation
0 10 20 5 US Feet
419
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Three Oaks Park
134071.5 SF
4133.69 SF

SHADOWHILL LN

CANDLELIGHT WAY

RUPPELL PL

MOLTZEN DR
Irrigation Area
Limited Irrigation
Brown Turf Area
0 30 60 15 US Feet
420
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Wilson Park

64.24 SF
3651.84 SF
554.44 SF
3656.45 SF
2838.61 SF
2665.34 SF
34783.8 SF
3036.5 SF
8414.75 SF
92253.43 SF
40501.98 SF
40876.35 SF
9114.49 SF
70317.61 SF
3867.78 SF
S
PO
RTAL
AVE

HALL CT

MALVERN CT

RODRIGUES AVE

LINDSAY AVE

LANSDALE AVE

WINTERGREEN DR

PARKSIDE LN

PRICE AVE

GLENVIEW AVE

LA MAR DR
Irrigation Area
Limited Irrigation
Brown Turf Area
Programmed
0 60 120 30 US Feet
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BOARD OF 'DIRECTORS

SANTA CLARA VALLEY WATER DISTRICT
RESOLUTION NO. 21-68
RESCINDING RESOLUTION 17-43, DECLARING A WATER SHORTAGE

EMERGENCY CONDITION CALLING FOR WATER USE RESTRICTIONS, AND

URGING THE COUNTY OF SANTA CLARA TO PROCLAIM A LOCAL EMERGENCY WHEREAS, a public hearing was held on June 9, 2021, on the matter of whether the Santa Clara Valley Water District (Valley Water) Board of Directors should declare that a water shortage emergency condition exists within Santa Clara County (County); and WHEREAS, notice of said hearing was published on June 2, 2021, in the San Jose Mercury News, a newspaper of general circulation printed and published within the County; and WHEREAS, at said hearing, all persons present were given an opportunity to be heard by the Board; and
WHEREAS, the Board heard and considered public testimony, staff's presentation, and other evidence presented at said hearing; and
WHEREAS, the County is in its second consecutive year of drought, and the County is now in an extreme drought condition according to the United States Drought Monitor; and WHEREAS, pursuant to Water Code Section 350 a "governing body of a distributor of a public water supply, whether publicly or privately owned and including a mutual water company, shall declare a water shortage emergency condition to prevail within the area served by such distributor whenever it finds and determines that the ordinary demands and requirements of water consumers cannot be satisfied without depleting the water supply of the distributor to the extent that there would be insufficient water for human consumption, sanitation, and fire protection"; and
WHEREAS, the Board seeks to conserve the limited water supply of Valley Water for the greatest public benefit with particular regard to public health, fire protection, and domestic use without threatening local land subsidence, by ensuring the conservation of water, by avoiding the waste of water, and to the extent necessary and by reason of the existing water shortage emergency condition, by reducing water use in the County in a manner that is fair and equitable; and
WHEREAS, on March 22, 2021, the California State Water Resources Control Board mailed early warning notices to water rights holders in California; including Valley Water, urging them to plan for potential shortages by reducing water use and adopting practical conservation measures; and
WHEREAS, local watershed runoff was substantially limited in the 2020 and 2021 water years due to extreme dry conditions and Valley Water's current local surface water storage as of June 1 is at 26 percent of the 20-year average; and
WHEREAS, Anderson Reservoir is Valley Water's largest surface water reservoir and holds up to 89,278 acre-feet of water-more than all of Valley Water's other nine surface water reservoirs combined; and
RL4700 Page 1 of 6
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Attachment B
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WP Footer RL Page 1 of 4

BOARD OF DIRECTORS

SANTA CLARA VALLEY WATER DISTRICT
RESOLUTION NO. 22-XX
RESOLUTION AMENDING RESOLUTION NO. 21-68 RESCINDING RESOLUTION 17-43,

DECLARING A WATER SHORTAGE EMERGENCY CONDITION CALLING FOR WATER

USE RESTRICTIONS, AND URGING THE COUNTY OF SANTA CLARA TO PROCLAIM A

LOCAL EMERGENCY
WHEREAS, on June 9, 2021, the Board of Directors (Board) of the Santa Clara Valley Water District (Valley Water) adopted Resolution No. 21-68 (Exhibit A) declaring a water shortage emergency condition pursuant to Water Code Section 350 and calling for water use restrictions; and
WHEREAS, the Board’s call for water use restrictions included, but was not limited to: (i) a restriction to outdoor watering of ornamental landscapes or lawns with potable water to a maximum of three days a week, and (ii) support of local adoption and enforcement of additional water waste restrictions by cities, retailers, and the County to achieve a 15% water use reduction target compared to 2019 water use; and
WHEREAS, Santa Clara County’s Director of Emergency Services has proclaimed a local drought emergency on June 15, 2021, which was ratified by the Santa Clara County Board of Supervisors on June 22, 2021; and
WHEREAS, Santa Clara County was included in the Governor’s drought emergency proclamation on July 8, 2021, and the entire state of California was included on October 19, 2021; and
WHEREAS, on January 4, 2022, the State Water Resources Control Board adopted an emergency regulation by Resolution No. 2022-0002, which contains restrictions to prevent the wasteful and unreasonable use of water, promote water conservation, and set forth monetary penalties for its violation; and
WHEREAS, the first three months of Calendar Year 2022 were the driest on record for Santa Clara County, and Valley Water’s Federal and State imported water allocations have been reduced to historic lows; and
WHEREAS, on March 28, 2022, Governor Gavin Newsom issued Executive Order N-7-22 to call on local water suppliers to move to Stage 2 of their water shortage contingency plans (which equates to a 20% water use reduction) and directed the State Water Resources Control Board to evaluate the adoption of regulations banning irrigation of decorative grass around commercial, industrial and institutional buildings, which is estimated to result in potential water savings of several hundred thousand acre-feet; and
WHEREAS, trees and shrubs can be responsibly planted and maintained during drought, even one as historic and severe as the current one; and that trees, especially drought-tolerant, native species, can provide many social and environmental benefits; and WHEREAS, because of persistent and unyielding drought conditions, the Board seeks to amend and add a number of restrictions to those previously adopted under Resolution No. 21-68, 







 




*Supplemental Attachment 4

Attachment C
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RESOLUTION AMENDING RESOLUTION NO. 21-68 RESCINDING RESOLUTION 17-43,

DECLARING A WATER SHORTAGE EMERGENCY CONDITION CALLING FOR WATER

USE RESTRICTIONS, AND URGING THE COUNTY OF SANTA CLARA TO PROCLAIM A

LOCAL EMERGENCY
Resolution No. 22-XX

including reducing the maximum number of days per week the public may irrigate ornamental landscapes or lawns; and
WHEREAS, the amended and additional restrictions as stated in this Amended Resolution are necessary to conserve the limited water supply of Valley Water for the greatest public benefit with particular regard to public health, fire protection, and domestic use without threatening local land subsidence, by ensuring the conservation of water, by avoiding the waste of water, and by reducing water use in the County in a fair and equitable manner.

NOW, THEREFORE BE IT RESOLVED that the Board of Directors of the Santa Clara Valley Water District hereby amends Resolution No. 21-68 (attached as Exhibit A) as follows:

1. Section 6 is replaced with:
“Calls for the public to:
x restrict outdoor watering of ornamental landscapes and lawns with potable water to no more than two days a week, avoiding watering during midday hours (See Sections 9 and 11), with the goal of significantly reducing the amount of potable water used for outdoor irrigation; and
x prioritize irrigation of established trees using low-flow irrigation over that of ornamental landscapes and lawns to reduce tree loss; and x restrict the application of potable water to outdoor landscapes in a manner that causes more than incidental runoff such that water does not flow onto adjacent property, non-irrigated areas, private and public walkways, roadways, parking lots, or structures; and
x restrict the application of water to irrigate turf and ornamental landscapes during and within 48 hours after measurable rainfall of at least one fourth of one inch of rain.”

2. In Section 9, replace the 6th bulleted item with:
“• Use of potable water to irrigate turf, lawns, gardens, or ornamental landscaping by means other than drip irrigation, or hand watering without quick acting positive action shut-off nozzles, on a specific schedule, for example: 1) before 7:00 a.m. and after 7:00 p.m.; or 2) selected days of the week;”

3. Add the following as Section 11:
“Calls for the County, water retailers and cities to:
x prohibit irrigation of lawns and ornamental landscaping during midday hours (for example no irrigation from 7:00 a.m. to 7:00 p.m.); and 







 




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RESOLUTION AMENDING RESOLUTION NO. 21-68 RESCINDING RESOLUTION 17-43,

DECLARING A WATER SHORTAGE EMERGENCY CONDITION CALLING FOR WATER

USE RESTRICTIONS, AND URGING THE COUNTY OF SANTA CLARA TO PROCLAIM A

LOCAL EMERGENCY
Resolution No. 22-XX

x restrict ornamental landscape and lawn irrigation within their service or jurisdictional areas to Mondays and Thursdays for odd numbered and numberless addresses and to Tuesdays and Fridays for even numbered addresses, for those that have not already adopted specific days when irrigation is permitted within their jurisdictional area.”

4. Add the following as Section 12:
“Directs Valley Water staff to continue pursuing actions corresponding to Stage 3 of the Water Shortage Contingency Plan, including close coordination with the County, cities, retailers, large landscapers and agricultural users to implement ordinances and water use restrictions; aggressive communication efforts to request significant behavioral change of water users; and augmentation of local water supplies through transfers and withdrawals from groundwater banks.”
PASSED AND ADOPTED by the Board of Directors of the Santa Clara Valley Water District by the following vote on April 12, 2022:

AYES: Directors
NOES: Directors
ABSENT: Directors
ABSTAIN: Directors

SANTA CLARA VALLEY WATER DISTRICT
____________________________________
JOHN L. VARELA
Chair Pro Tem, Board of Directors
ATTEST: MICHELE L. KING, CMC
__________________________________
Clerk, Board of Directors
5 6DQWRV7(VWUHPHUD1+VXHK%.HHJDQ*.UHPHQ / /H=RWWH-9DUHOD
1RQH
1RQH
1RQH








 




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RESOLUTION AMENDING RESOLUTION NO. 21-68 RESCINDING RESOLUTION 17-43,

DECLARING A WATER SHORTAGE EMERGENCY CONDITION CALLING FOR WATER

USE RESTRICTIONS, AND URGING THE COUNTY OF SANTA CLARA TO PROCLAIM A

LOCAL EMERGENCY
Resolution No. 22-XX

EXHIBIT A
No. of Pages: 6
Exhibit Attachment: BOARD RESOLUTION NO. 21-68








 




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Resolution No. 22-XX








 




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Resolution No. 22-XX








 




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Resolution No. 22-XX








 




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Resolution No. 22-XX








 




*Supplemental Attachment 4

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Resolution No. 22-XX








 




*Supplemental Attachment 4

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EXECUTIVE DEPARTMENT

STATE OF CALIFORNIA

PROCLAMATION OF A STATE OF EMERGENCY
WHEREAS climate change is intensifying the impacts of droughts on our communities, environment, and economy, and California is in a second consecutive year of dry conditions, resulting in drought in all parts of the State and extreme or exceptional drought in most of the State; and WHEREAS in response to climate change and worsening drought conditions, I issued proclamations on April 12 and May 10, 2021, proclaiming drought emergencies in the counties of Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Kern, Kings, Lake, Lassen, Madera, Mariposa, Mendocino, Merced, Modoc, Napa, Nevada, Placer, Plumas, Sacramento, San Benito, San Joaquin, Shasta, Sierra, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Yolo, and Yuba, which have faced the most dire and severe drought conditions; and
WHEREAS since my May 10, 2021 Proclamation, California's water supplies continue to be severely depleted, and high temperatures are now increasing water loss from reservoirs and streams (especially north of the Tehachapi Mountains), and thus demands by communities and agriculture have increased, supplies of cold water needed for salmon and other anadromous fish that are relied upon by tribal, commercial, and recreational fisheries have been reduced, and risk has increased of drought impacts continuing in 2022 because of continued water loss from climate change-driven warming temperatures and less water available in reservoirs and streams from two years of below average precipitation; and
WHEREAS the counties of Inyo, Marin, Mono, Monterey, San Luis Obispo, San Mateo, Santa Barbarai Santa Clara, and Santa Cruz are now experiencing emergency drought conditions as well; and
WHEREAS it is necessary to expeditiously mitigate the effects of the drought conditions to ensure the protection of health, safety, and the environment; and
WHEREAS under Government Code Section 8558(b), I find that the conditions caused by the drought, by reason of their magnitude, are or are likely to be beyond the control of the services, personnel, equipment, and facilities of any single local government and require the combined forces of a mutual aid region or regions to appropriately respond; and
WHEREAS under Government Code Section 8625( c}, I find that local authority is inadequate to cope with the drought conditions; and WHEREAS to protect public health and safety, it is critical the State take certain immediate actions without undue delay to prepare for and mitigate the effects of the drought conditions, and under Government Code Section 8571, I Attachment D
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find that strict compliance with various statutes and regulations specified in this proclamation would prevent, hinder, or delay the mitigation of the effects of the drought conditions.

NOW THEREFORE, I, GAVIN NEWSOM, Governor of the State of California, in accordance with the authority vested in me by the State Constitution and statutes, including the California Emergency Services Act, and in particular, Section 8625, HEREBY PROCLAIM A STATE OF EMERGENCY to exist due to drought in the additional nine counties of Inyo, Marin, Mono, Monterey, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, and Santa Cruz, such that a drought state of emergency is now in effect in 50 counties (collectively, "Proclaimed Drought Counties").

IT IS HEREBY ORDERED THAT:
1) All agencies of the state government are to utilize and employ state personnel, equipment, and facilities for the performance of any and a ll activities consistent with the direction of the Governor's Office of Emergency Services and the State Emergency Plan. Also, to protect their safety, all residents are to obey the direction of emergency officials with regard to this emergency in order to protect their safety. 2) The orders and provisions contained in my April 21, 2021 and May l 0, 2021 Proclamations remain in full force and effect, except as modified herein.

State agencies shall continue to implement all directions from those Proclamations and accelerate implementation where feasible. 3) Consistent with the policies stated in Water Code Section 1Ol 1.5(a), local agencies are encouraged to take actions to coordinate use of their available supplies and to substitute an alternate supply of groundwater from existing groundwater wells for the unused portion of surface water that the local agency is otherwise entitled to use. For actions taken pursuant to this paragraph in the Proclaimed Drought Counties, the provisions of Chapter 3 (commencing with Section 85225) of Part 3 of Division 35 of the Water Code and regulations adopted pursuant thereto are suspended for any (a) actions taken by state agencies pursuant to this paragraph, (b) actions taken by a local agency where the state agency with primary responsibility for implementing the directive concurs that local action is required, and ( c) permits or approvals necessary to carry out actions under ( a) or (b). The entities implementing this paragraph shall maintain on their websites a list of all activities or approvals that rely on the suspension of the foregoing Water Code provisions.
4) To ensure adequate, minimal water supplies in the Proclaimed Drought Counties for purposes of health, safety, and the environment, the State Water Resources Control Board (Water Board) shall consider modifying requirements for reservoir releases or diversion limitations to conserve water upstream later in the year in order to protect cold water pools for salmon and steelhead, enhance instream conditions for fish and wildlife, improve water quality, protect carry over storage, or ensure minimum health and safety water supplies. The Water Board shall require monitoring and evaluation of any such changes to inform future actions. Nothing in this paragraph limits the effect of operative paragraph 4 of my May l 0, 2021 Proclamation.
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5) To support voluntary approaches where hydrology and other conditions allow, the Water Board shall expeditiously consider water transfers requests with respect to the Proclaimed Drought Counties. For purposes of carrying out this paragraph, the following requirements of the Water Code are suspended:
a. Section 1726(d) requirements for written notice and
newspaper publication, provided that the Water Board
shall post notice on its website and provide notice
through electronic subscription services where
interested persons can request information about
temporary changes; and
b. Section 1726(f) requirement of a 30-day comment
period, provided that the Water Board shall afford a 15- day comment period.
6) Operative paragraph 8 of my April 21, 2021 Proclamation and operative paragraph 2 of my May 10, 2021 Proclamation are withdrawn and superseded by the following which shall apply in the Proclaimed Drought Counties.

As necessary to assist local governments and for the protection of public health and the environment, state agencies shall enter into contracts to arrange for the procurement of materials, goods, and services necessary to quickly assist with the response to and recovery from the impacts of the drought. Applicable provisions of the Government Code and the Public Contract Code, including but not limited to travel, advertising, and competitive bidding requirements, are suspended to the extent necessary to address the effects of the drought. Approval of the Department of Finance is required prior to the execution of any contract entered into pursuant to this provision.
7) Operative paragraph 7 of my May 10, 2021 Proclamation is withdrawn and superseded by the following which shall apply in the Proclaimed Drought Counties:

To prioritize drought response and preparedness resources, the Department of Water Resources, the Water Board, the Department of Fish and Wildlife, and the Department of Food and Agriculture, in consultation with the Department of Finance, shall:
a. Accelerate funding for water supply enhancement,
water conservation, or species conservation projects.
b. Identify unspent funds that can be repurposed to
enable projects to address drought impacts to people,
ecosystems, and economic activities.
c. Recommend additional financial support for
groundwater substitution pumping to support Pacific
flyway habitat needs in the lower Sacramento River
and Feather River portions of the Central Valley in the Fall of 2021 .
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8) To ensure protection of water in the Proclaimed Drought Counties needed for health, safety, and the environment, the Water Board shall consider emergency regulations to curtail water diversions when water is not available at water right holders' priority of right or to protect releases of stored water.
9) To ensure critical instream flows for species protection, the Water Board and Department of Fish and Wildlife shall evaluate the minimum instream flows and other actions needed to protect salmon, steelhead, and other native fishes in critical streams systems in the State and work with water users and other parties on voluntary measures to implement those actions.

To the extent voluntary actions are not sufficient, the Water Board, in coordination with the Department of Fish and Wildlife, shall consider emergency regulations to establish minimum drought instream flows in the Proclaimed Drought Counties.
10}To proactively prevent situations where a community runs out of drinking water, the Water Board, the Department of Water Resources, the Office of Emergency Services, and the Office of Planning and Research shall assist local agencies in the Proclaimed Drought Counties with identifying acute drinking water shortages in domestic water supplies, and shall work with local agencies in implementing solutions to those water shortages. 11 }The Department of Fish and Wildlife, in consultation with the Department of Water Resources and the Water Board, shall identify and coordinate actions to mitigate drought-related fisheries impacts in critical stream systems and identify possible mechanisms for accomplishing those actions.
12) For purposes of carrying out or approving any actions contemplated by the directives in operative paragraphs 4 through 9, in the Proclaimed Drought Counties, the environmental review by state agencies required by the California Environmental Quality Act in Public Resources Code, Division 13 (commencing with Section 21000) and regulations adopted pursuant to that Division are hereby suspended to the extent necessary to address the impacts of the drought.

For purposes of carrying out the directives in operative paragraph 3 and 10, in the Proclaimed Drought Counties, for any (a} actions taken by the listed state agencies pursuant to that directive, (b} actions taken by a local agency where the Office of Planning and Research concurs that local action is required, and (c} permits necessary to carry out actions under (a} or (b}, Public Resources Code, Division 13 (commencing with Section 21000) and regulations adopted pursuant to that Division are hereby suspended to the extent necessary to address the impacts of the drought. The entities implementing these directives shall maintain on their websites a list of all activities or approvals for which these provisions are suspended.

This Proclamation is not intended to, and does not, create any rights or benefits, substantive or procedural, enforceable at law or in equity, against the State of California, its agencies, departments, entities, officers, employees, or any other person.
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I FURTHER DIRECT that as soon as hereafter possible, this proclamation be filed in the Office of the Secretary of State and that widespread publicity and notice be given of this proclamation.

IN WITNESS WHEREOF I have hereunto
set my hand and caused the Great
Seal of th State of California to be
8th do of July 2021.

Governor of California
ATTEST:
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EXECUTIVE DEPARTMENT

STATE OF CALIFORNIA
EXECUTIVE ORDER N-10-21
WHEREAS communities across California are experiencing more frequent, prolonged, and severe impacts of climate change including catastrophic wildfires, extreme heat and unprecedentedly dry conditions that threaten the health of our people, habitat for species and our economy; and WHEREAS severe drought afflicts the American West and increasingly warming temperatures driven by climate change exacerbate harmful drought effects including disruption of drinking water and irrigation supplies, degradation of fish and wildlife habitat, and heightened flammability of wildland vegetation; and
WHEREAS on April 21 and May 10, 2021, I issued proclamations that a state of emergency exists in a total of 41 counties due to severe drought conditions and directed state agencies to take immediate action to preserve critical water supplies and mitigate the effects of drought and ensure the protection of health, safety, and the environment; and
WHEREAS today, I issued a further proclamation of a state of emergency due to drought conditions in nine additional counties (Inyo, Marin, Mono, Monterey, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, and Santa Cruz), and directed state agencies to take further actions to bolster drought resilience and prepare for impacts on communities, businesses, and ecosystems; and
WHEREAS drought conditions present urgent challenges, including the risk of drinking water shortages in communities, greatly increased wildfire activity, diminished water tor agricultural production, adverse impacts on fisheries, and additional water scarcity if drought conditions continue into next year; and WHEREAS agriculture is an important economic driver in California that has made significant investments in irrigation efficiencies such that nearly 70 percent of the nation's farmland using drip and micro-irrigation is located in California, and despite that investment, many agricultural producers are experiencing severe reductions in water supplies and are fallowing land in response to current dry conditions; and
WHEREAS action by Californians now to conserve water and to extend local groundwater and surface water supplies will provide greater resilience if the drought continues in future years; and
WHEREAS during the 2012-2016 drought, Californians did their part to conserve water, with many taking permanent actions that continue to yield benefits; per capita residential water use statewide declined 21 percent between the years 2013 and 2016, and has remained on average 16 percent below 2013 levels as of 2020; and
WHEREAS local water suppliers and communities have made strategic and forward-looking investments in water recycling, stormwater capture and reuse, groundwater storage and other strategies to improve drought resilience; and
Attachment E
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WHEREAS there is now a need to augment ongoing water conservation and drought resilience investments with additional action to extend available supplies, protect water reserves in case drought conditions extend to a third year and maintain critical flows for fish and wildlife.

NOW THEREFORE, I, GAVIN NEWSOM, Governor of the State of California, in accordance with the authority vested in me by the State Constitution and statutes, do hereby issue the following order to become effective immediately.

IT IS HEREBY ORDERED THAT:
1) To preserve the State's surface and groundwater supplies and better prepare for the potential for continued dry conditions next year, and to join existing efforts by agricultural water users, public water systems, and governmental agencies to respond to water shortages, I call on all Californians to voluntarily reduce their water use by 15 percent from their 2020 levels. Commonsense measures Californians can undertake to save water and money include:
a. Irrigating landscapes more efficiently. As much as 50 percent of residential water use goes to outdoor irrigation, and much of that is wasted due to evaporation, wind, or runoff caused by inefficient irrigation methods and systems. Watering one day less per week, not watering during or immediately after rainfall, watering during the cooler parts of the day and using a weather-based irrigation controller can reduce irrigation water use, saving nearly 8,800 gallons of water per year.
b. Running dishwashers and washing machines only when full. Full laundry loads can save 15-45 gallons per load. Full dishwasher cycles can save 5-15 gallons per load.
c. Finding and fixing leaks. A leaky faucet that drips at the rate of one drip per second can waste nearly 3,200 gallons per year. d. Installing water-efficient showerheads and taking shorter showers.

Keeping showers under five minutes can save 12.5 gallons per shower when using a water-efficient showerhead.
e. Using a shut-off nozzle on hoses and taking cars to commercial car washes that use recycled water.

The State Water Resources Control Board (Water Board) shall track and report monthly on the State's progress toward achieving a 15-percent reduction in statewide urban water use as compared to 2020 use. 2) State agencies, led by the Department of Water Resources and in coordination with local agencies, shall encourage actions by all Californians, whether in their residential, industrial, commercial, agricultural, or institutional use, to reduce water usage, including through the statewide Save Our Water conservation campaign at
SaveOurWater.com, which provides simple ways for Californians to reduce water use in their everyday lives.
3) The Department of Water Resources shall monitor hydrologic conditions such as cumulative precipitation, reservoir storage levels, soil moisture and other metrics, and the Water Board shall monitor progress on voluntary 444
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conservation as ongoing indicators of water supply risk that may inform future drought response actions.

This Order is not intended to, and does not, create any rights or benefits, substantive or procedural, enforceable at law or in equity, against the State of California, its agencies, departments, entities, officers, employees, or any other person.

IT IS FURTHER ORDERED that as soon as hereafter possible, this Order be filed in the Office of the Secretary of State and that widespread publicity and notice be given of this Order.

IN WITNESS WHEREOF I have hereunto set
my hand and caused the Great Seal of the
State of California to be affixed this 8th day
of July 2 1.

ATTEST:
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EXECUTIVE DEPARTMENT

STATE OF CALIFORNIA
EXECUTIVE ORDER N-5-23
WHEREAS on April 21, 2021, May 10, 2021, July 8, 2021, and October 19, 2021, I proclaimed States of Emergency to exist due to drought conditions; and WHEREAS the multi-year nature of the current drought, which began three years after the record-setting drought of 2012-2016, continues to have significant, immediate impacts on communities across California with vulnerable water supplies, farms that rely on irrigation to grow food and fiber, and fish and wildlife that rely on stream flows and cool water; and
WHEREAS the March 3, 2023, snow survey conducted by the Department of Water Resources and partner agencies found that most regions of the Sierra Nevada are above average for snow water content, and some regions are nearing record amounts of snow, and snow and rain has fallen across many regions of the state since then, with more precipitation forecasted; and WHEREAS improved conditions have helped rehabilitate surface water supplies, but have not abated the severe drought conditions that remain in some parts of the State, including the Klamath River basin and the Colorado River basin, and many groundwater basins throughout the State remain depleted from overreliance and successive multi-year droughts; and WHEREAS continued action by the State is needed to address ongoing consequences of the drought emergency, including groundwater supply shortages, domestic well failures, and drought-related harm to native fishes in the Klamath River and Clear Lake watersheds; and
WHEREAS the drought emergency has required a dynamic and flexible response from the State, and several provisions in my prior Proclamations and Orders have been terminated or superseded already, specifically Paragraphs 4 and 8 of my State of Emergency Proclamation dated April 21, 202 l, Paragraphs 2, 4, and 7 of my State of Emergency Proclamation dated May 10, 2021, Paragraphs 3, 4, 5, 6, and 10 of my State of Emergency Proclamation dated July 8, 2021, and Paragraph 9 of Executive Order N-7-22; and WHEREAS improved conditions warrant an even more targeted State response to the ongoing drought emergency and certain provisions in my State of Emergency Proclamations dated April 21, 202 l, May 10, 2021, July 8, 2021, and October 19, 2021, and in Executive Orders N-10-21, N-7-22, and N-3-23 provide authority that is no longer needed to mitigate the effects of the drought conditions or direct actions by state agencies, departments, and boards that have already been completed; and
WHEREAS notwithstanding the rescission of certain emergency authorities for emergency drinking water action, state agencies have existing legal authority and funding to continue expedited work to advance the human right to water, and state agencies will continue all ongoing drought resilience planning work, including through coordination with local agencies and tribes; and
Attachment F
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WHEREAS next winter's hydrology is uncertain and the most efficient way to preserve the State's improved surface water supplies is for Californians to continue their ongoing efforts to make conservation a way of life; and WHEREAS to protect public health and safety, it is critical the State take certain immediate actions without undue delay to prepare for and mitigate the effects of the drought conditions, and under Government Code section 8571, I find that strict compliance with various statutes and regulations specified in this Order would prevent, hinder, or delay the mitigation of the effects of the drought conditions.

NOW, THEREFORE, I, GAVIN NEWSOM, Governor of the State of California, in accordance with the authority vested in me by the State Constitution and statutes, including the California Emergency Services Act, and in particular, Government Code sections 8567, 8571, and 8627, do hereby issue the following Order to become effective immediately:

IT IS HEREBY ORDERED THAT:
l . The orders and provisions contained in my State of Emergency Proclamations dated April 21, 2021, May 10, 2021, July 8, 2021, and October 19, 2021, and Executive Orders N-7-22 (March 28, 2022), N-3- 23 (February 13, 2023), and N-4-23 (March l 0, 2023), remain in full force and effect, except as modified by those Proclamations and Orders and herein. State agencies shall continue to implement all directions from those Proclamations and Orders and accelerate implementation where feasible.

2. The following provisions of my State of Emergency Proclamation dated April 21, 2021, are terminated:
a. Paragraph 2;
b. Paragraphs 5-7; and
c. Paragraphs 9-14.

3. The following provisions of my State of Emergency Proclamation dated May l 0, 2021, are terminated:
a. Paragraph 1;
b. Paragraph 3;
c. Paragraph 5; and
d. Paragraphs 9-10.

4. The following provisions of my State of Emergency Proclamation dated July 8, 2021, are terminated:
a. Paragraph 2;
b. Paragraphs 7-8, except those portions of paragraph 7 withdrawing provisions of prior orders;
c. Paragraphs 11-12.
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5. The following provisions of my State of Emergency Proclamation dated October 19, 2021, are terminated:
a. Paragraph 2;
b. Paragraphs 4-5;
c. Paragraph 8; and
d. Paragraph 10.

6. The following provisions of Executive Order N-10-21 are terminated:
a. Paragraph 1; and
b. Paragraph 3

7. The following provisions of Executive Order N-7-22 are terminated:
a. Paragraphs 1-3;
b. Paragraph 6; and
c. Paragraphs 14-15.

8. The following provisions of Executive Order N-3-23 are terminated:
a. Paragraph 1; and
b. Paragraph 3, except those portions of the paragraph
withdrawing provisions of prior orders.

9. Paragraph 6 of my State of Emergency Proclamation dated May 10, 2021, and Paragraph 9 of my State of Emergency Proclamation dated July 8, 2021, are withdrawn and replaced with the following text:

To ensure critical instream flows for species protection in the Klamath River and Clear Lake watersheds, the State Water Resources Control Board (Water Board) and Department of Fish and Wildlife shall evaluate the minimum instream flows and other actions needed to protect salmon, steelhead, the Clear Lake Hitch, and other native fishes in critical streams systems in these watersheds and work with water users, tribes, and other parties on voluntary measures to implement those actions. To the extent voluntary actions are not sufficient, the Water Board, in coordination with the Department of Fish and Wildlife, shall consider emergency regulations to establish minimum instream flows to mitigate the effects of the drought conditions. For purposes of state agencies carrying out or approving any actions contemplated by this paragraph, Public Resources Code, Division 13 (commencing with Section 21000) and regulations adopted pursuant to that Division are suspended. Nothing in this Paragraph affects or limits the validity of actions already taken in the Klamath and Clear Lake watersheds or ongoing under Paragraph 6 of my State of Emergency Proclamation dated May 10, 2021, or Paragraph 9 of my State of Emergency Proclamation dated July 8, 2021 .

IT IS FURTHER ORDERED that as soon as hereafter possible, this Order be filed in the Office of the Secretary of State and that widespread publicity and notice be given of this Order.
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This Order is not intended to, and does not, create any rights or benefits, substantive or procedural, enforceable at law or in equity, against the State of California, its agencies, departments, entities, officers, employees, or any other person.

IN WITNESS WHEREOF I have hereunto set
my hand and caused the Great Seal of the
State of California to be affixed this 24th
day of March 2023.
overnor of California
ATTEST:

SHIRLEY N. WEBER, PH.D.

Secretary of State
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