Cupertino City Council
June 4, 2024

AGREEMENT FOR COUNTYWIDE
AB939 IMPLEMENTATION FEE
This Agreement is made by and among the Cities and Towns of Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Morgan Hill, Monte Sereno, Mountain View, Palo Alto, San José, Santa Clara, Saratoga, and Sunnyvale (CITIES) and the County of Santa Clara (COUNTY) on the _________ day of ____________ 2024. The term CITIES may refer to CITIES collectively or individually.

RECITALS
WHEREAS, pursuant to Public Resources Code Section 41901, a city, county, or city and county may impose fees in amounts sufficient to pay the costs of preparing, adopting, and implementing a countywide integrated waste management plan; WHEREAS, State law, Public Resource Code Section 41750, requires that the countywide integrated waste management plans contain a household hazardous waste (“HHW”) element for each city within the county as well as for the unincorporated area of the county; WHEREAS, the Board of Supervisors of the County of Santa Clara (“Board”) has imposed a Countywide AB939 Implementation Fee (“Fee”) since July 1, 1992 to pay for the costs of preparing, adopting, and implementing integrated waste management plans and programs, including HHW program elements;
WHEREAS, the Board has approved reimposing the Fee for Fiscal Years 2025, 2026, and 2027 (July 1, 2024 through June 30, 2027) at $4.10 per ton of waste landfilled or incinerated in the County; received at any nondisposal or collection facility located within the County and subsequently transported for disposal or incineration outside of the County; collected from any location within the County by a solid waste hauler operating pursuant to a franchise, contract, license, or permit issued by any local jurisdiction and subsequently transported for disposal or incineration outside of the County; and removed from any location in the County by any person or business for disposal or incineration outside the County; WHEREAS, HHW programs provide household hazardous waste management services to residents of Santa Clara County and are necessary to meet HHW planning and management requirements under State law;
WHEREAS, jurisdictions in Santa Clara County desire to provide safe, convenient, and economical means for residents to properly dispose of household hazardous wastes in an environmentally safe manner in order to avoid unauthorized or improper disposal in the garbage, sanitary sewer, storm drain system, or on the ground or in any other manner which creates a health or environmental hazard. These wastes include, but are not limited to, common household products such as household cleaning products, spot remover, furniture polish, solvents, oven cleaner, pesticides, oil based paints, motor oil, antifreeze, fluorescent lamps, and batteries; and Attachment A
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WHEREAS, the County will collect the Fee on behalf of the fifteen cities and for the unincorporated area of the County and will apportion the Fee according to the terms of this Agreement.

NOW THEREFORE, CITIES and COUNTY AGREE AS FOLLOWS:

1. PURPOSE
The purpose of this Agreement is to state the terms and conditions under which the COUNTY will collect and distribute the Fee of $4.10 per ton of waste to be disposed in Fiscal Years 2025, 2026 and 2027. The Fee is divided into two parts: 1) a Program Fee of $1.50 per ton to assist in funding the costs of preparing, adopting, and implementing the integrated waste management plan in the fifteen cities and the unincorporated area of the County; and 2) a Household Hazardous Waste Fee of $2.60 per ton to provide funding to implement the Countywide HHW Program. The Program Fee will be allocated among the CITIES and COUNTY as described in Exhibit B, attached hereto and incorporated herein. The HHW Fee will be allocated to the COUNTY, CITIES, and Countywide HHW Program as described in Exhibit C, attached hereto and incorporated herein. The Fee shall be imposed on each ton of waste landfilled or incinerated within the County; received at any non-disposal or collection facility located within the County and subsequently transported for disposal or incineration outside of the County; collected from any location within the County by a solid waste hauler operating pursuant to a franchise, contract, license, or permit issued by any local jurisdiction and subsequently transported for disposal or incineration outside of the County; or removed from any location in the County by any person or business for disposal or incineration outside the County.

Non-Disposal Facilities are defined as those facilities included in the County of Santa Clara NonDisposal Facility Element (and subsequent amendments to that Element) and are listed in Exhibit A, attached hereto and incorporated herein.

2. SERVICES PROVIDED BY COUNTY
COUNTY will collect and distribute the Fee. COUNTY will collect the Fee from landfills and non-disposal facilities listed in Exhibit A, and any landfill or non-disposal facility subsequently permitted, on a quarterly basis using data from tonnage reports filed by landfill and non-disposal facility operators with the County Recycling and Waste Reduction Division.

COUNTY shall require each landfill and non-disposal facility to submit required payment, documentation of tonnages disposed, and state-mandated Disposal Reporting System Reports on a quarterly basis, within 45 days of the end of each calendar quarter. Late submissions and/or payments shall be subject to a late filing penalty and delinquent penalties. COUNTY will research Santa Clara County tonnage reported to COUNTY by landfills outside the COUNTY in significant amounts to determine the identity of the hauler. That hauler will subsequently be billed in the same fashion subject to the same penalties as mentioned above. Collected funds and any late filing payments and delinquency penalties shall be distributed to CITIES and Countywide HHW Program based on the formula set forth in Exhibits B and C. COUNTY shall not be obligated to distribute funds that COUNTY has been unable to collect from landfill or non-disposal facility operators.
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3. ROLE OF CITIES
CITIES shall review the Disposal Reporting System Reports as prepared and submitted by the COUNTY and within 30 days of receipt shall report to COUNTY, with appropriate documentation, errors in waste allocations among jurisdictions.

4. COLLECTION AND USE OF FEE
Each ton of waste will be subject to the fee if it is landfilled or incinerated in the County; received at any non-disposal facility or collection facility in the County and subsequently transported for disposal or incineration outside the County; collected from any location within the County by a solid waste hauler operating under franchise, contract, license, or permit issued by a local jurisdiction and subsequently transported for disposal or incineration outside the County; or removed from any location in the County by any person or business for disposal or incineration outside the County. Best efforts will be made to prevent tonnage from being assessed a double fee (for instance, once at a non-disposal facility and again at a landfill within Santa Clara County). The Program Fee funding share paid to CITIES shall be used to assist in funding the CITIES’ costs of preparing, adopting, and implementing the integrated waste management plan of each of the CITIES and the unincorporated area of the COUNTY. The HHW Fee portion shall be applied to fund the costs of CITIES’ share of Countywide Household Hazardous Waste services; any HHW fees directly disbursed to CITIES as provided in this Agreement shall be used to fund the costs of preparing, adopting, and implementing the jurisdiction’s HHW element of the Countywide integrated waste management plan, including providing HHW services to residents.

5. INSURANCE
Each party shall maintain its own insurance coverage, through third party insurance, selfinsurance or a combination thereof, against any claim, expense, cost, damage or liability arising out of the performance of its responsibilities pursuant to this Agreement. CITIES agree to provide evidence of such insurance to COUNTY via Certificate of Insurance or other documentation acceptable to the COUNTY upon request.

6. INDEMNIFICATION
In lieu of and not withstanding the pro rata risk allocation which might otherwise be imposed between CITIES and COUNTY pursuant to Government Code Section 895.6, the parties agree that all losses or liabilities incurred by a party shall not be shared pro rata but instead the parties agree that each of the parties hereto shall fully indemnify and hold each of the other parties harmless from any claim, expense or cost, damage or liability arising out of, or in connection with, performance of its responsibilities pursuant to this Agreement and as described in Exhibit D.
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Additionally, CITIES shall indemnify, hold harmless, and defend COUNTY, its officers, agents, and employees with respect to any loss, damage, liability, cost or expenses, including attorney fees and court costs, arising from any misuse of the Fee distributed to CITIES.

COUNTY shall indemnify, hold harmless, and defend CITIES, its officers, agents, and employees with respect to any loss, damage, liability, cost or expenses, including attorney fees and court costs, brought by third parties based on COUNTY’s sole negligence in the collection or distribution of said Fees.

7. DISTRIBUTION OF FEE
COUNTY shall distribute the AB939 Program Fee to CITIES and the HHW Program Fee to the Countywide HHW Program pursuant to the formulas described in Exhibits B and C within 45 days of receipt of landfill and non-disposal facility payments and disposal documentation required for calculation of Fee distribution amounts. Distributions shall begin December 15, 2024, and continue quarterly through October 15, 2027.

8. PARTICIPATION IN THE COUNTYWIDE HHW PROGRAM
CITIES, at their option, may individually participate in the Countywide HHW Program by entering into the AGREEMENT FOR COUNTYWIDE HOUSEHOLD HAZARDOUS WASTE COLLECTION PROGRAM.

9. LATE PAYMENTS
If Fee payments and disposal documentation are not received from landfill or nondisposal facility operators prior to scheduled distribution of payments to CITIES and the Countywide HHW Program, payment distribution shall be calculated on a pro rata share of monies received. Upon collection, late payments and accrued delinquent penalties, if any, shall be distributed among CITIES and the Countywide HHW Program according to the formula in Exhibits B and C.

10. ACCOUNTING
COUNTY shall maintain records of all transactions related to collection, use and distribution of the Fee for at least five (5) years after the termination date of this Agreement, unless otherwise required by law to retain such records for a longer period. Such records will be available for inspection upon written request by CITIES, and will include but not be limited to tonnage reports submitted by landfills and non-disposal facilities, waste stream documentation provided by cities, payments made by the landfills and non-disposal facilities to the COUNTY and by the COUNTY to CITIES, and expenditures for programmatic and overhead costs.

11. REQUEST FOR REVIEW
In the event CITIES have a dispute regarding the calculation of its share of the Fee or the distribution or use of the Fee, CITIES may request in writing a review by COUNTY within 10 486
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days of receipt of their Fee allocation. The review shall be performed within 30 days of request and results shall be reported to CITIES in writing.
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12. EFFECTIVE DATE OF AGREEMENT
This agreement is effective upon approval by all fifteen CITIES and the COUNTY.

13. AMENDMENT
This Agreement may be amended only by an instrument signed by all fifteen CITIES and the COUNTY.

14. INDEPENDENT CONTRACTOR
Each party shall perform responsibilities and activities described herein as an independent contractor and not as an officer, agent, servant or employee of any of the parties hereto. Each party shall be solely responsible for the acts and omissions of its officers, agents, employees, contractors and subcontractors, if any. Nothing herein shall be considered as creating a partnership or joint venture between the parties.

15. TERM OF AGREEMENT
The term of this Agreement shall be from July 1, 2024 to June 30, 2027, or until all funds from the last quarter’s Fee payments have been distributed, whichever is later. COUNTY shall bill the operators of the landfills and non-disposal facilities listed in Exhibit A for the Fee commencing with the Quarter ending September 30, 2024. Said landfills and non-disposal facilities will be billed for the Fee through June 30, 2027.

16. NOTICES
All notices required by this Agreement will be deemed given when in writing and delivered personally or deposited in the United States mail, postage prepaid, return receipt requested, addressed to the other party at the address set forth below or at such address as the party may designate in writing in accordance with this section.

City of
Contact:

Title:

Address:

County of Santa Clara
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Contact: Recycling and Waste Reduction Program Manager
Program: Integrated Waste Management Services
Address: 1553 Berger Drive, Building 1
San José, CA 95112
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17. CONTROLLING LAW
This Agreement shall be governed and construed in accordance with the laws of the State of California.

18. ENTIRE AGREEMENT
This document embodies the entire Agreement between the parties with respect to the subject matter hereof. No modification of this Agreement shall be effective unless and until modification is evidenced by writing signed by all parties or their assigned designees.

19. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

20. CONTRACT EXECUTION
Unless otherwise prohibited by law or County policy, the parties agree that an electronic copy of a signed contract, or an electronically signed contract, has the same force and legal effect as a contract executed with an original ink signature. The term “electronic copy of a signed contract” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed contract in a portable document format. The term “electronically signed contract” means a contract that is executed by applying an electronic signature using technology approved by the County.
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IN WITNESS WHEREOF, the parties have executed this AGENCY AGREEMENT FOR COUNTYWIDE AB939 IMPLEMENTATION FEE on the dates as stated below:

Date: COUNTY OF SANTA CLARA

JAMES R. WILLIAMS
County Executive
Date: CITY”

CITY/TOWN OF
Title
A municipal corporation
APPROVED AS TO FORM AND LEGALITY:

Willie Nguyen
Deputy County Counsel
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EXHIBIT A

LANDFILLS LOCATED IN SANTA CLARA COUNTY
Guadalupe Rubbish Disposal Site
Kirby Canyon Sanitary Landfill
Newby Island Sanitary Landfill
Pacheco Pass Sanitary Landfill
Palo Alto Refuse Disposal Area
Zanker Materials Processing Facility
Zanker Road Landfill

NON-DISPOSAL FACILTIES AND TRANSFER STATIONS LOCATED IN

SANTA CLARA COUNTY
Butterick Enterprises Recyclery
California Waste Solutions Recycling & Transfer Station City of Palo Alto Green Composting Facility
ComCare Farms Composting Facility
Environmental Management Systems Facility
Green Waste Recovery Facility
Mission Trail Waste Systems, Inc.

Newby Island Compost Facility
Pacheco Pass Landfill Composting Facility
Pacific Coast Recycling, Inc.

Premier Recycling Facility
The Recyclery at Newby Island
San Martin Transfer Station
Sunnyvale Materials Recovery and Transfer Station (SMaRT Station) Z-Best Composting Facility
Zanker Materials Processing Facility
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EXHIBIT B
FORMULA FOR DISTRIBUTION OF AB939 PROGRAM FEE
Each of the CITIES, and the COUNTY for its unincoporated area, will receive $1.50 per ton of solid waste disposed of in landfills or taken to non-disposal facilities located in Santa Clara County that originates from that jurisdiction, as documented in quarterly reports submitted by the County to the State Disposal Reporting System.

Fees collected from undocumented disposed tonnage, or tonnage originating outside of Santa Clara County, will be distributed according to each jurisdiction’s percent of countywide population, according to the latest available population report issued by the California Department of Finance.
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EXHIBIT C

COUNTYWIDE HOUSEHOLD HAZARDOUS
WASTE PROGRAM FEE (HHW Fee)

1. PROGRAM FUNDING SOURCE
HHW Program services are mandated by State law, Public Resources Code Section 41500 et seq. Public Resources Code Section 41901 authorizes imposition of a fee to support planning and implementation of integrated waste management programs, including their HHW elements. The HHW Fee, of $2.60 per ton, collected as part of the AB939 Implementation Fee, will be the primary source of funding for Countywide Household Hazardous Waste Collection Program (CoHHW Program) services.

Funds derived from the HHW Fee will be allocated among five types of CoHHW Program service costs as follows:

A. Fixed Program Costs will be apportioned based on the number of households in each participating jurisdiction. The number of households will be determined at the beginning of each Fiscal Year by statistics compiled by the California Department of Finance, Demographic Research Unit from their most recent Report, “Population Estimates for California Cities and Counties.”
B. San José Facility Use Surcharge will be apportioned based on CITIES’ anticipated participation at the County Household Hazardous Waste Collection Facility located at 1608 Las Plumas Avenue, San José.

C. Variable Cost Per Car is the cost associated with labor, waste disposal, transportation, and other services provided to residents at the County HHW Collection Facilities and at temporary HHW collection events. The Variable Cost Per Car is based on the estimated cost of providing a base level service to 4% of households in all participating jurisdictions. The number of households will be determined at the beginning of each Fiscal Year by statistics compiled by the California Department of Finance, Demographic Research Unit from their most recent Report, “Population Estimates for California Cities and Counties.”
D. Available Discretionary Funding is allocated based on tonnage generated per participating jurisdiction, and after allocation of Fixed Program Costs, San José Facility Use Surcharge, and Variable Cost Per Car allocation.

E. Abandoned Waste Disposal Costs will fund disposal of HHW illegally abandoned at Nonprofit Charitable Reuser organizations as defined in Public Resources Code Section 41904.
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2. FIXED PROGRAM COST
Funds shall be allocated on a per household basis for Fixed Program Costs at the conclusion of each Fiscal Year. This portion of the funds shall be distributed directly to the Countywide HHW Program to pay for HHW Program costs. Fixed Program Costs funding shall be calculated shall not exceed $5.07 per household in Fiscal Years 2025, 2026, and 2027. Fixed Program Costs may include, but are not limited to, eleven (11) CoHHW Program staff members, facility leasing costs, vehicle lease costs, office rent, office supplies, county administrative overhead, county legal counsel, training costs, equipment and facility maintenance, and union negotiated salary and benefit changes.

3. ABANDONED WASTE DISPOSAL COST
The Abandoned Waste Disposal Cost will fund disposal of HHW illegally abandoned at Nonprofit Charitable Reuser organizations. The Abandoned Waste Disposal Cost is based on the cost to the County to dispose of abandoned waste allocated among participating jurisdictions based on their proportional share of the County population and shall not exceed $0.05 per household. Projected Abandoned Waste Disposal Costs to the CITY based on a charge of $.05 per household are set forth in Attachment A, attached hereto and incorporated herein.

Any existing unexpended non-profit abandoned waste fund balance may be allocated toward funding of disposal of HHW illegally abandoned at nonprofit charitable reuser organizations as defined in Public Resources Code Section 41904.

For the purposes of this agreement, a nonprofit charitable reuse organization has the definition provided in Public Resources Code Section 41904 as follows: “Nonprofit charitable reuser” means a charitable organization, as defined in Section 501(c)(3) of the federal Internal Revenue Code, or a distinct operating unit or division of the charitable organization, that reuses and recycles donated goods or materials and receives more than 50 percent of its revenues from the handling and sale of those donated goods or materials.

4. SAN JOSÉ FACILITY USE SURCHARGE
The total San José Facility Use Surcharge for CITY will be based on CITY residents’ proportional participation at the County Household Hazardous Waste Collection Facility located at 1608 Las Plumas Avenue, San José. The San José Facility Use Surcharge will vary depending on facility usage but will not exceed $8.09 per car for Fiscal Years 2025, 2026, and 2027. The total San José Facility Use Surcharge for CITY will be based on CITY’s participation at the County Household Hazardous Waste Collection Facility located at 1608 Las Plumas Avenue, San José.

5. VARIABLE COST PER CAR
The Variable Cost Per Car is the cost associated with actual labor, waste disposal, transportation and other services provided to the residents at the County HHW Collection 493
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Facilities and Temporary Events. This portion of the funds shall be distributed directly to the Countywide HHW Program. The Variable Cost Per Car is estimated to be $66.02 per car for Fiscal Years 2025, 2026, and 2027. The estimated cost per car will be adjusted annually to reflect actual service costs. After fixed costs and San José Facility Use Surcharge are allocated on a per household basis, the variable cost per car will be used to calculate the costs to service 4% of households across all participating jurisdictions. If the level of 4% of households is not reached, the Countywide HHW Program will use the remaining balance of funds, in cooperation with the CITIES, to increase public outreach and/or provide additional services in that jurisdiction where the level of 4% is not reached the following year.

6. AVAILABLE DISCRETIONARY FUNDING
The Available Discretionary Funding portion will be allocated based on the tons of waste generated within each jurisdiction and after allocation of Fixed Program Cost, San José Facility Use Surcharge, and Variable Per Car Cost. Available Discretionary Funds must be used for HHW purposes. Options for how to spend these funds include, but are not limited to, increasing the number of residents served in the jurisdiction by the Countywide HHW Program, universal waste collection, emergency HHW services, funding HHW public education, the support of capital infrastructure projects to accommodate HHW drop-off and collection events, or providing special programs such as retail collection of certain waste and/or door-to-door collection of HHW for the elderly and/or persons with disabilities and neighborhood clean-up events. CITIES authorize the COUNTY to determine appropriate uses of available discretionary funding and to use CITIES’ Available Discretionary Funding portion of the AB939 HHW Fee to provide for additional HHW services requested by the CITIES.

7. PROGRAM FUNDING PASS-THROUGH
Annual funding calculations include HHW Fees collected on behalf of all jurisdictions in the County. CITIES, at their option, may participate in the Countywide HHW Program by entering into the AGREEMENT FOR COUNTYWIDE HOUSEHOLD HAZARDOUS WASTE COLLECTION PROGRAM. If CITIES elect to participate in the Countywide HHW Program, their pro-rata share of the HHW Fee shall be retained by the County to utilize for HHW Program costs, as provided in this Agreement and the Agreement for Countywide Household Hazardous Waste Collection Program. The COUNTY will distribute to CITIES not participating in the Countywide Household Hazardous Waste Collection Program their pro-rata share of funding received by the COUNTY from the HHW Fee, except that the COUNTY may retain and expend that portion of the non-participating CITIES’ fee attributable to Abandoned Waste Disposal Costs.

If CITIES not participating in the AGREEMENT FOR COUNTYWIDE HOUSEHOLD HAZARDOUS WASTE COLLECTION PROGRAM desire to allow residents to participate in HHW Program services on an emergency basis, then services to these residents will be provided on a cost recovery basis. A charge equal to the established rates charged by the Countywide HHW Program to Conditionally Exempt Small Quantity Generators will be billed to the CITIES.

A CITIES’ representative must call the Countywide HHW Program appointment line to schedule 494
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an appointment for the resident. Liability shall be apportioned as provided in Exhibit D to this Agreement.
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EXHIBIT D
SECTION 28 OF AGENCY AGREEMENT

FOR COUNTYWIDE HOUSEHOLD HAZARDOUS

WASTE COLLECTION PROGRAM

HOLD HARMLESS AND INDEMNIFICATION
In lieu of and not withstanding the pro rata risk allocation which might otherwise be imposed between CITY and COUNTY pursuant to Government Code Section 895.6, the parties agree that all losses or liabilities incurred by a party shall not be shared pro rata but instead COUNTY and CITY agree that pursuant to Government Code Section 895.4, each of the parties hereto shall fully indemnify and hold each of the other parties, their officers, board members, employees and agents, harmless from any claim, expense or cost, damage or liability imposed for injury (as defined by Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying party, its officers, employees or agents, under or in connection with or arising out of any work, authority or jurisdiction delegated to such party under this Agreement. No party, nor any officer, board member, employee or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of the other parties hereto, their officers, board members, employees or agents, under or in connection with or arising out of any work authority or jurisdiction delegated to such other parties under this Agreement.

Additionally, CITY shall indemnify COUNTY for CITY’s apportioned share of any liability incurred and attributed to the Countywide HHW Program for the transportation, treatment, or disposal of the household hazardous waste, once the waste has been accepted by a licensed hazardous waste hauler. Apportionment for disposal liability shall be determined by each participating jurisdiction’s pro rata proportion of household participation in the Program.

Apportionment for transportation and treatment liability shall be determined by each participating jurisdiction’s pro rata household participation at the event where the waste was generated. COUNTY will use reasonable efforts to obtain recovery from all available resources, including insurance, of any liable hauler or liable disposal facility operator. No liability shall be apportioned to CITY for transportation, treatment or disposal in any case where COUNTY has contracted for such services and has failed to require the contractor to maintain the insurance requirements set forth in Section 23 of the AGREEMENT FOR COUNTYWIDE HOUSEHOLD HAZARDOUS WASTE COLLECTION PROGRAM.

CITY shall further indemnify COUNTY for CITY’s apportioned share of liability incurred and attributed to the Countywide HHW Program for the transportation, treatment or disposal of household hazardous waste at corporate sponsored events where non-county resident employees of the corporate sponsor are authorized to participate in the event. Liability for the nonresident portion of the disposal of waste shall be shared by the cities and the county as described above. The nonresident portion shall be determined by calculating the percentage of nonresidents participating in the event. This percentage will then be subtracted from the total 496
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liability for the household hazardous waste prior to assessing CITY’s apportioned share of any liability for the household hazardous waste.

COUNTY shall require Conditionally Exempt Small Quantity Generators (“CESQG”) and Nonprofit Charitable Reusers to indemnify COUNTY for, at minimum, their apportioned share of any liability incurred and attributed to the Countywide HHW Program for the transportation, treatment, or disposal of their hazardous waste, once the waste has been accepted by a licensed hazardous waste hauler. The CESQG and Nonprofit Charitable Reuser portion of the waste shall be determined by calculating the percentage, by weight, of the total household hazardous waste accepted by the CoHHW Program. This percentage will be used to calculate the portion of liability attributed to CESQGs and Nonprofit Charitable Reusers and will be subtracted from the total liability prior to assessing CITY’s apportioned share of any liability for household hazardous waste.
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AGREEMENT FOR COUNTYWIDE

HOUSEHOLD HAZARDOUS WASTE

COLLECTION PROGRAM
This Agreement for Countywide Household Hazardous Waste Collection Program (“AGREEMENT”) is made by and between the (“CITY”) and the County of Santa Clara (“COUNTY”) on the day of 2024.

RECITALS
WHEREAS, the Board of Supervisors of the County of Santa Clara (“Board of Supervisors”) has approved a Countywide Household Hazardous Waste Collection Program whereby residents of the unincorporated areas of the Santa Clara County and cities and towns within Santa Clara County participating in the Countywide program will have an opportunity to safely dispose of household hazardous wastes (HHW), regardless of the specific location at which the collection has been scheduled; and
WHEREAS, CITY desires to provide residents with convenient opportunities to safely dispose of their HHW in order to encourage the proper disposal of toxic products, and avoid unauthorized or improper disposal in the garbage, sanitary sewer, storm drain system, or on the ground, in a manner which creates a health and/or environmental hazard; and WHEREAS, CITY desires to provide a safe, convenient, and economical means for residents to dispose of HHW. These wastes include, but are not limited to, common household products such as household cleaning products, furniture polish, solvents, oven cleaner, pesticides, oil-based paints, motor oil, antifreeze, car batteries, mercury thermostats, fluorescent lamps, household batteries, and electronic waste; and
WHEREAS, CITY desires to schedule Household Hazardous Waste Collection Events (Events) for residents for FY 2025 through FY 2027 (July 1, 2024 – June 30, 2027); and WHEREAS, CITY desires to provide household hazardous waste collection services to a minimum of 4% of the households per fiscal year in its jurisdiction; and WHEREAS, CITY desires to participate in the Countywide Household Hazardous Waste Collection Program to meet these objectives; and
WHEREAS, pursuant to Public Resources Code Section 41901, the Board of Supervisors has approved the collection of a $4.10 per ton Countywide AB939 Implementation fee, including a $2.60 per ton Household Hazardous Waste Fee (AB939 HHW Fee), for FY 2025 through FY 2027 (July 1, 2024 – June 30, 2027) on all wastes landfilled or incinerated within Santa Clara County, received at any non-disposal or collection facility located within Santa Clara County and subsequently transported for disposal or incineration outside of Santa Clara County, collected from any location within the County by a solid waste hauler operating pursuant to a franchise, contract, license, or permit issued by any local jurisdiction and subsequently City of Cupertino
Attachment B
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transported for disposal or incineration outside of Santa Clara County, or removed from any location in Santa Clara County by any person or business for disposal or incineration outside the county; and
WHEREAS, the AB939 HHW Fee is allocated to the Countywide Household Hazardous Waste Program and participating jurisdictions to fund HHW program costs in accordance with the terms of the Countywide AB939 Implementation Fee Agreement; and WHEREAS, CITY desires for COUNTY to utilize CITY’s share of the AB939 HHW Fee to provide HHW services for CITY residents.

NOW THEREFORE, CITY and COUNTY AGREE AS FOLLOWS:

1. PURPOSE
The purpose of this AGREEMENT is to state the terms and conditions under which CITY will participate in the Countywide Household Hazardous Waste Collection Program (CoHHW Program) available to its residents. Participating jurisdictions are those jurisdictions that enter into this AGREEMENT with the County.

2. PROGRAM FUNDING SOURCE
HHW Program services are mandated by State law, Public Resources Code Section 41500 et seq. State law authorizes cities and counties to impose fees in amounts sufficient to support planning and implementation of integrated waste management programs, including HHW elements. The AB939 HHW Fee, of $2.60 per ton, imposed by COUNTY as part of the AB939 Implementation Fee and collected and distributed in accordance with the Agreement for Countywide AB939 Implementation Fee will be the primary source of funding for CoHHW Program services. CITY agrees that COUNTY may utilize CITY’s share of the AB939 HHW fee to provide HHW Program services in accordance with the terms and conditions of this AGREEMENT.

Funds derived from the AB939 HHW Fee will be allocated among five types of CoHHW Program service costs as follows:

A. Fixed Program Costs will be apportioned based on the number of households in each participating jurisdiction. The number of households will be determined at the beginning of each Fiscal Year by statistics compiled by the California Department of Finance, Demographic Research Unit from their most recent Report, “Population Estimates for California Cities and Counties.” B. San José Facility Use Surcharge will be apportioned based on CITY residents’ participation at the County Household Hazardous Waste Collection Facility located at 1608 Las Plumas Avenue, San José, CA 95133.
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C. Variable Cost Per Car is the cost associated with labor, waste disposal, transportation, and other services provided to residents at the County HHW Collection Facilities and at temporary HHW collection events. The Variable Cost Per Car is based on the estimated cost of providing a base level service to 4% of households in all participating jurisdictions. The number of households will be determined at the beginning of each Fiscal Year by statistics compiled by the California Department of Finance, Demographic Research Unit from their most recent Report, “Population Estimates for California Cities and Counties.” D. Available Discretionary Funding is allocated based on tonnage generated per participating jurisdiction, and after allocation of Fixed Program Costs, San José Facility Use Surcharge, and Variable Cost Per Car allocation.

E. Abandoned Waste Disposal Costs will fund disposal of HHW illegally abandoned at Nonprofit Charitable Reuser organizations as defined in Section 41904 of California Public Resources Code.

The projected AB939 HHW Fee Allocation by jurisdiction is set out in Attachment A, attached hereto and incorporated herein.

3. FIXED PROGRAM COST
Estimated HHW Fixed Program Costs are projected in Attachment B, attached hereto and incorporated herein. Fixed Program Costs are allocated to CITY at the conclusion of each fiscal year based on CITY’s proportional share of the County population and will not exceed $5.07 per household for Fiscal Years 2025, 2026, and 2027. Fixed Program Costs may include, but are not limited to, up to eleven (11) County HHW Program staff members, facility lease costs, vehicle lease costs, office rent, office supplies, county administrative overhead, county legal counsel, training costs, equipment and facility maintenance and union negotiated salary and benefit changes.

4. ABANDONED WASTE DISPOSAL COST
The Abandoned Waste Disposal Cost will fund disposal of HHW illegally abandoned at Nonprofit Charitable Reuser organizations. The Abandoned Waste Disposal Cost is based on the cost to the County to dispose of abandoned waste allocated among participating jurisdictions based on their proportional share of the County population and shall not exceed $0.05 per household. Projected Abandoned Waste Disposal Costs to the CITY based on a charge of $0.05 per household are set forth in Attachment A, attached hereto and incorporated herein.

For the purposes of this Agreement, “Nonprofit Charitable Reuser Organization” is defined in accordance with Section 41904 of California Public Resources Code as follows: a charitable organization, as defined in Section 501(c)(3) of the federal Internal Revenue Code, or a distinct operating unit or division of the charitable organization, that reuses and recycles donated goods or materials and receives more than 50 percent of its revenues from the handling and sale of those donated goods or materials.
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5. SAN JOSÉ FACILITY USE SURCHARGE
The total San José Facility Use Surcharge for CITY will be based on CITY residents’ proportional participation at the County Household Hazardous Waste Collection Facility located at 1608 Las Plumas Avenue, San José. Estimated San José Facility Use Surcharges are projected in Attachment A, attached hereto and incorporated herein. The San José Facility Use Surcharge will vary depending on facility usage but will not exceed $8.09 per car for Fiscal Years 2025, 2026, and 2027.

6. VARIABLE COST PER CAR
The Variable Cost Per Car is the cost associated with actual labor, waste disposal, transportation and other services provided to the residents at the County Household Hazardous Waste Collection Facilities (CoHHWCF) and at Temporary Events. The Variable Cost Per Car is estimated to be approximately $66.02 per participating resident car for Fiscal Years 2025, 2026 and 2027. The estimated cost per car will be adjusted to reflect actual service costs. After Fixed Program Costs and San José Facility Use Surcharge are allocated on a per household basis, the Variable Cost Per Car will be used to calculate the costs to service 4% of households across all participating jurisdictions. If the level of 4% of households is not reached in the CITY, the CoHHW Program may use the remaining balance of funds, in cooperation with the CITY, to increase public outreach and/or provide additional services in that jurisdiction the following year.

7. AVAILABLE DISCRETIONARY FUNDING
The Available Discretionary Funding portion of the AB939 HHW Fee will be allocated based on the tons of waste generated within each jurisdiction, and after allocation of Fixed Program Costs, San José Facility Use Surcharge, and Variable Cost Per Car allocation.

Available Discretionary Funds must be used for HHW purposes. Options for how to spend these funds include, but are not limited to, increasing the number of residents served in that jurisdiction by the CoHHW Program, subsidizing curbside used motor oil collection, electronic waste (e-waste) collection, universal waste collection, emergency HHW services, funding HHW public education, the support of capital infrastructure projects to accommodate HHW drop-off and collection events, or providing special programs such as retail collection of certain waste and/or door-to-door collection of HHW for the elderly and/or persons with disabilities and neighborhood clean-up events. COUNTY has discretion to determine appropriate uses of Available Discretionary Funding in accordance with the terms and conditions in this Agreement, and to apply the funding toward those uses.

8. ADMINISTRATION AND PAYMENT OF THE AB939 HHW FEE
The County of Santa Clara Recycling and Waste Reduction Division will administer the AB939 HHW Fee, as part of the existing online disposal reporting and payment system.

Administration and payment will be made in accordance with the Agreement for Countywide AB939 Implementation Agreement. Notwithstanding the foregoing, the COUNTY shall maintain records of the amount, use, and distribution of Fixed Program Cost expenditures for at least five (5) years after the termination date of this Agreement, unless otherwise required by law 502
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to retain such records for a longer period. CITY may request in writing a review by COUNTY of the Fixed Program Cost records. The review shall be performed within 30 days of request and results shall be reported to participating cities in writing.

9. PROGRAM PUBLICITY
The CoHHW Program shall produce and make available to the public an HHW brochure for distribution. The brochure will be made available at various events, including but not limited to, environmental events and community fairs. The brochure may also be distributed, upon request, to cities within Santa Clara County and to Santa Clara County residents and businesses.

The CITY shall be responsible for developing and coordinating citywide awareness of the HHW Program. The CoHHW Program shall be responsible for Countywide public education for used oil recycling. CoHHW Program public awareness responsibilities shall include, but not be limited to, the following activities:
• Serving as the formal contact to the local media such as local newspapers and television news stations;
• Providing participating jurisdictions with educational materials developed for the CoHHW Program;
• Promoting oil and oil filter recycling by developing, purchasing, and distributing educational materials, media relations materials, basic art work and camera ready advertising materials for distribution countywide and for use by jurisdictions; • Representing the program through educational presentations at schools and businesses and attendance at community events such as local fairs and festivals; and • Providing participating jurisdictions opportunities to review and comment on the development of countywide outreach materials.

CITY’s public awareness responsibilities, at the sole discretion of the CITY, shall include, but not be limited to, the following activities:
• Providing a copy of HHW promotional materials to the CoHHW Program for review for accuracy and completeness, prior to publication; • Developing and distributing HHW promotion communications to residents for local and CITY newsletters, newspapers and to the electronic media; • Providing the CoHHW Program with a copy of HHW promotion materials produced by the CITY;
• Conducting and supporting outreach and publicity to attain the goal of 4% of households in the CITY participating in the CoHHW Program; and • Providing the CoHHW Program a report summarizing all outreach activities conducted by the CITY during the fiscal year. The report is due 30 days after the end of the reporting period.

10. TEMPORARY HHW EVENTS
COUNTY shall conduct Temporary HHW Events at various sites located in Santa Clara County. COUNTY shall obtain all necessary permits and licenses required for the Temporary 503
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HHW Events and shall provide or contract for the services of properly trained, qualified personnel and hazardous waste haulers, and shall provide or secure suitable equipment and supplies to properly receive, package, label, haul, recycle and dispose of the household hazardous wastes collected at the Temporary HHW Events.

When COUNTY conducts a Temporary HHW Event in CITY’s jurisdiction, CITY agrees to provide solid waste and recycling services at such event at no cost to the CoHHW Program to ensure the proper management of non-hazardous waste generated at the event. Any additional expenses for such event incurred beyond the agreed-upon budget shall be subject to negotiation and mutual agreement between the COUNTY and the CITY.

To increase the Community’s awareness of and participation in any Temporary HHW Event in CITY’s jurisdiction, the CITY agrees to promote, at the CITY’s sole expense, each such event to the residents at least thirty (30) days in advance before the scheduled date. The promotion may include, but is not limited to, bill inserts, door hangers, flyers, in-person outreach events, newsletters, press releases, public service announcements, social media, television public access stations, websites, etc.

11. HOUSEHOLD HAZARDOUS WASTE COLLECTION FACILITIES
COUNTY shall conduct collection operations at two County Household Hazardous Waste Collection Facilities (CoHHWCF).

The CoHHWCF are located at:
♦ San Martin, 13055 Murphy Avenue, San Martin, CA 95046 ♦ San José, 1608 Las Plumas, San José, CA 95133
The COUNTY shall obtain all necessary permits and licenses required for the CoHHWCF and shall provide or contract for services, equipment, and supplies to properly receive, package, label, haul, recycle and dispose of wastes collected.

12. RECYCLING AND DISPOSAL PROGRAM FOR VERY SMALL QUANTITY

GENERATORS
COUNTY will provide services to accept hazardous waste from Very Small Quantity Generators (VSQG) in accordance with Section 25218.3 of California Health and Safety Code, as amended from time to time. VSQG is defined in Section 25218.1(q) of California Health and Safety Code.

Eligible VSQGs include, but not limited to, small businesses, governmental entities, non-profit organizations, schools, special districts, etc. within the County so long as they meet the criteria as defined in Section 25218.1(q) of California Health and Safety Code. Eligible VSQGs will be allowed to bring their hazardous waste to CoHHWCF. These services to VSQGs located within the CITY will be provided on a cost recovery basis, which will include program administration, 504
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on-site collection, transportation, and disposal costs. COUNTY will assume responsibility for fee collection from participating VSQG.

The CITY may choose to pay for services for VSQG’s within the CITY and will notify the COUNTY in writing with 30-day advance notice in order to exercise this option. If the CITY exercises this option, the COUNTY will invoice the CITY for all costs associated with VSQG’s within the CITY. If CITY has available Discretionary Funding, COUNTY may use this funding to pay for VSQG costs.

13. ABANDONED HOUSEHOLD HAZARDOUS WASTE
The CoHHW Program will allow for the disposal of abandoned HHW by government agencies and qualified nonprofit charitable reusers. Abandoned HHW means HHW left at a property by an unknown party. Abandoned household hazardous waste does not include waste generated by a known organization or agency in the course of normal business operations such as, but not limited to, the assembly or manufacture of products from new or used materials or the provision of charitable services such as classroom education, meal preparation, and shelter, or the provision of services for a fee.

A) GOVERNMENT AGENCIES
Government agencies shall be charged for disposal of abandoned HHW according to the CoHHW Program’s rates for VSQGs.

B) NONPROFIT CHARITABLE REUSER
In order to qualify as a Nonprofit Charitable Reuser, the business must submit to the County Executive a request to be so designated. The County Executive shall review the request and supporting documentation and shall make a final decision on the designation. COUNTY will accept abandoned HHW from Nonprofit Charitable Reusers and will waive disposal fees on the cost of disposal of the abandoned HHW in an annual amount not to exceed funds available from the existing unexpended abandoned waste fund. Funding for disposal available to Nonprofit Charitable Reuser shall be on a first come first serve basis. Once the available fund to pay for the disposal of the abandoned HHW from Nonprofit Charitable Reusers is exhausted, disposal fees shall no longer be waived, and Nonprofit Charitable Reusers shall be charged for disposal of abandoned HHW according to the CoHHW Program’s rates for VSQGs. No additional costs shall be applied to the budget of the CITY or any other participating jurisdiction.

14. HOUSEHOLD HAZARDOUS WASTES ACCEPTED
HHW accepted by the CoHHW Program shall be limited to those materials that qualify as “Household Hazardous Waste” pursuant to Section 25218.1(d) of California Health and Safety Code, as amended from time to time. These materials include, but are not limited to, automotive fluids, automotive and other types of batteries, latex and oil paint, oil filters, garden chemicals, 505
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household cleaners, pool chemicals, mercury thermostats, fluorescent lamps containing mercury, household batteries, electronic waste (e-waste), and other common hazardous consumer products.

15. WASTES NOT ACCEPTED
Certain hazardous wastes shall not be accepted for collection and disposal. These include, but are not limited to, compressed gas cylinders larger than 5 gallons, radioactive materials, biohazardous waste, and explosives. Other wastes not accepted by the CoHHW Program are wastes generated as part of operating a business, including a home operated business, except that waste from VSQGs as provided for in Section 12 of this Agreement shall be accepted.

16. ADDITIONAL SERVICES UNDER THIS AGREEMENT
CITY must augment funding provided under this Agreement to cover the cost of a minimum participation level of 4% of CITY households; CITY may also elect to augment funding to provide additional services to increase CITY participation beyond the 4% minimum participation level. Additional services shall be made available upon written agreement between the CITY’s authorized representative and the County Executive Officer or designee. Additional services may include, but are not limited to, additional appointments (charged at the Variable Cost Per Car rate), door-to-door HHW collection, used oil filter collection, universal waste collection, electronic waste collection, and abandoned waste collection.

CITY agrees to augment up to an additional $_133,081__ annually to the Countywide HHW Program in Fiscal Years 2025, 2026, and 2027, up to a total of $_300,243_ for the duration of this Agreement for the purpose of attaining or increasing CITY household participation above the 4% minimum participation level at the scheduled collection dates listed in Attachment C, attached hereto and incorporated herein. Augmentation will be calculated, where applicable, at the Variable Cost Per Car rate. Other services will be charged based on a cost recovery basis. CITY authorizes the COUNTY to use CITY’S Available Discretionary Funding portion of the AB939 HHW Fee, if available, to offset the above agreed additional augmentation amount.

CITY agrees to make interim payments to COUNTY amounting to 50 percent of the annual augmentation amount of $_133,081_ for each fiscal year. These interim payments shall be made no later than September 30th of each fiscal year. The remaining balance of any outstanding cost shall be reconciled and paid or refunded in accordance with the terms outlined in the annual cost statement.

At the end of each fiscal year, a final annual cost statement shall be prepared by COUNTY and issued to CITY by November 30th. The annual cost statement will take into consideration costs incurred on behalf of CITY for additional services and all payments made by CITY to COUNTY. If any balance is owed to COUNTY, it will be due within 30 days following receipt of the annual cost statement. If any credit is owed to CITY, COUNTY will refund that amount to CITY within 30 days following delivery of the annual cost statement. 506
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17. INFORMATION AND APPOINTMENT LINE
COUNTY will operate a telephone information and appointment desk Monday through Friday, from the hours of 9:00 a.m. to 5:00 p.m, except for COUNTY-recognized holidays The information service will register residents for the Temporary HHW Events and the collections at CoHHWCF. The information service will provide information about hazardous household materials. CITY will be notified immediately if resident participation approaches a level of service that may not be supported by available funding.

18. SCHEDULING AND SITE SELECTION
COUNTY shall work with CITY to determine the date(s) of Temporary Events and collections at the CoHHWCF. CITY shall coordinate with COUNTY in locating and securing sites for Temporary HHW Events. It is recognized that some participating jurisdictions in the CoHHW Program may not have appropriate sites available. A proposed HHW schedule for Fiscal Year 2025 of Temporary Events and collections at CoHHWCF is included as Attachment C. COUNTY will schedule an adequate number of collection days to serve the 4% level of service. The COUNTY determines the adequate number of collection days by tracking attendance at each event.

19. OUTSIDE FUNDING
During the term of this Agreement, COUNTY may seek outside funding sources for services that would supplement existing HHW services such as permanent collection sites, equipment, retail take-back collection and operational funding. If outside funding is obtained, the CoHHW Program will, at COUNTY’s discretion, proceed with development of additional programs using that outside funding without drawing on CITY’s funding provided under this Agreement.

20. REGIONAL GRANT AND OIL PAYMENT PROGRAM PARTICIPATION The CITY authorizes the CoHHW Program to apply for lead agency grants, including but not limited to Used Oil Payment Program grants, from the California Department of Resources Recycling and Recovery (CalRecycle), on behalf of participating jurisdictions. The CoHHW Program will act on behalf of all participating jurisdictions, as the lead applicant and administrator. The CoHHW Program will oversee how the moneys are used and work in cooperation with CITY as to how the funds will be spent. Nothing in this section shall preclude the COUNTY or a participating jurisdiction from applying for grant funds in any case where the CoHHW Program does not apply for the grant opportunity.

21. EMERGENCY SERVICES
Participating jurisdictions, at their option, may desire to provide residents with convenient emergency opportunities to safely dispose of their HHW in the event of a disaster.

The purpose of this emergency planning for HHW is to minimize potential public health and 507
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safety impacts, as well as to minimize costs and confusion. Attachment D sets out CITY and COUNTY responsibilities for the collection of household hazardous wastes in response to an emergency. CITY shall make good faith efforts to provide the public with information related to the problems associated with HHW. Upon the decision to hold an emergency collection event, it is CITY’s responsibility to make a good faith effort to prepare and disseminate the necessary outreach to notify the public of an emergency collection event. An emergency collection event shall be initiated by a written request from CITY to COUNTY. Emergency collection events can be scheduled in as little as ten (10) working days of CITY’s written request or at an agreed upon date thereafter. The emergency collection plan is set out in Attachment D, Household Hazardous Waste Emergency Collection Plan.

COUNTY agrees to conduct the Emergency Collection Event at a mutually agreeable site and time. The COUNTY will obtain the necessary permit from California Department of Toxic Substances Control and will handle wastes in accordance with applicable state laws and regulations. COUNTY will bill CITY for all Emergency Collection Events on a cost recovery basis, and all payments shall be due COUNTY within 30 days following the receipt of the invoice.

22. PRIVATE SPONSORED EVENTS
COUNTY may also secure funding from corporations or agencies to conduct HHW Collection Events for corporate employees and residents of participating jurisdictions and to pay for special programs such as Universal Waste collection at retail locations. The transportation, treatment, and disposal liability for nonresident employee participation in these events shall be shared by all participating jurisdictions, including the CITY, and the COUNTY, as described in Section 26 of this Agreement. Summary information concerning these corporate sponsored events, if any, will be included in the CoHHW Program’s annual report to the participating jurisdictions.

23. INSURANCE REQUIREMENTS
Contractors who provide hazardous waste transportation, treatment, or disposal services shall have the required insurance as outlined in Attachment E, Exhibit E Insurance Requirements for Environmental Services Contract. Other contractors shall have insurance in amounts to be determined by COUNTY Insurance Manager, after consultation with CITY. COUNTY shall obtain insurance certificates from each of the contractors prior to the contractor providing service to the program naming the COUNTY as an additional insured.

24. WASTE TRACKING AND REPORTING
COUNTY will provide a mid-year report to CITY regarding participation rates from each participating jurisdiction by March 15 of each year. Mid-year and year end reports will outline the types and quantities of waste collected, the amount of waste diverted for reuse or recycling and the waste management method for each waste stream and associated costs for services.

COUNTY will prepare a report summarizing program activities which will be delivered to the participating jurisdictions no later than six months after the end of COUNTY’s fiscal year. 508
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It will be assumed for cost and reporting purposes that each participating jurisdiction is contributing to the waste stream in proportion to the number of its residents who directly participate.

COUNTY shall take steps to assure that the bi-annual statements to jurisdictions reflect the funds necessary to cover costs for CITY participation in services scheduled during the next quarter.

25. PARTICIPATION REPORTING
COUNTY shall employ means necessary to verify the place of residence of all participants in the CoHHW Program.

26. HOLD HARMLESS AND INDEMNIFICATION
In lieu of and not withstanding the pro rata risk allocation which might otherwise be imposed between CITY and COUNTY pursuant to Government Code Section 895.6, the parties agree that all losses or liabilities incurred by a party shall not be shared pro rata but instead COUNTY and CITY agree that pursuant to Government Code Section 895.4, each of the parties hereto shall fully indemnify and hold each of the other parties, their officers, board members, employees and agents, harmless from any claim, expense or cost, damage or liability imposed for injury (as defined by Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying party, its officers, employees or agents, under or in connection with or arising out of any work, authority or jurisdiction delegated to such party under this Agreement. No party, nor any officer, board member, employee or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of the other parties hereto, their officers, board members, employees or agents, under or in connection with or arising out of any work authority or jurisdiction delegated to such other parties under this Agreement.

Additionally, CITY shall indemnify COUNTY for CITY’s apportioned share of any liability incurred and attributed to the Countywide HHW Program for the transportation, treatment or disposal of the household hazardous waste, once the waste has been accepted by a licensed hazardous waste hauler. Apportionment for disposal liability shall be determined by each participating jurisdiction’s pro rata proportion of household participation in the Program.

Apportionment for transportation and treatment liability shall be determined by each participating jurisdiction’s pro rata household participation at the event where the waste was generated. COUNTY will use reasonable efforts to obtain recovery from all available resources, including insurance, of any liable hauler or liable disposal facility operator. No liability shall be apportioned to CITY for transportation, treatment or disposal in any case where COUNTY has contracted for such services and has failed to require the contractor to maintain the insurance requirements set forth in Section 23 above.

CITY shall further indemnify COUNTY for CITY’s apportioned share of liability incurred and attributed to the Countywide HHW Program for the transportation, treatment or 509
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disposal of household hazardous waste at corporate sponsored events where non-county resident employees of the corporate sponsor are authorized to participate in the event. Liability for the nonresident portion of the disposal of waste shall be shared by the participating jurisdictions and the COUNTY as described above. The nonresident portion shall be determined by calculating the percentage of nonresidents participating in the event. This percentage will then be subtracted from the total liability for the household hazardous waste prior to assessing CITY’s apportioned share of any liability for the household hazardous waste.

COUNTY shall require VSQGs and Nonprofit Charitable Reusers to indemnify COUNTY, at minimum, for their apportioned share of any liability incurred and attributed to the Countywide HHW Program for the transportation, treatment, or disposal of their hazardous waste, once the waste has been accepted by a licensed hazardous waste hauler. The VSQG and Nonprofit Charitable Reuser portion of the waste shall be determined by calculating the percentage, by weight, of the total household hazardous waste accepted by the CoHHW Program. This percentage will be used to calculate the portion of liability attributed to VSQGs and Nonprofit Charitable Reusers and will be subtracted from the total liability prior to assessing CITY’s apportioned share of any liability for household hazardous waste.

27. TERMINATION
This Agreement may be terminated by either the COUNTY or CITY upon thirty (30) days written notice given by the terminating party.

28. TERM OF AGREEMENT
The term of this Agreement shall be from July 1, 2024 to June 30, 2027, or until all revenue from the last quarter’s AB939 fee payments have expended and/or distributed, whichever is later.

29. INDEPENDENT CONTRACTOR
Each party shall perform responsibilities and activities described herein as an independent contractor and not as an officer, agent, servant or employee of any of the parties hereto. Each party shall be solely responsible for the acts and omissions of its officers, agents, employees, contractors and subcontractors, if any. Nothing herein shall be considered as creating a partnership or joint venture between the parties.

30. EXECUTION BY COUNTERPART
This Agreement may be executed in any number of counterparts, each of which shall for all purposes be deemed an original and all of which shall together constitute one and the same instrument.

31. CONTROLLING LAW
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This Agreement shall be governed and construed in accordance with the laws of the State of California.

32. ENTIRE AGREEMENT
This document embodies the entire Agreement between the parties with respect to the subject matter hereof. No modification of this Agreement shall be effective unless and until modification is evidenced by writing signed by all parties or their assigned designates.

33. NOTICES
All notices and communications herein required shall be in writing to the other party as follows, unless expressly changed in writing:

CITY of City Representative
Representative’s Title
City Address

County of Santa Clara Director
Consumer and Environmental Protection Agency
1553 Berger Drive
San José, California 95112

34. CONTRACT EXECUTION
Unless otherwise prohibited by law or COUNTY policy, the parties agree that an electronic copy of a signed contract, or an electronically signed contract, has the same force and legal effect as a contract executed with an original ink signature. The term “electronic copy of a signed contract” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed contract in a portable document format. The term “electronically signed contract” means a contract that is executed by applying an electronic signature using technology approved by the COUNTY.
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IN WITNESS WHEREOF, the parties have executed this AGREEMENT FOR COUNTYWIDE HOUSEHOLD HAZARDOUS WASTE COLLECTION PROGRAM on the dates as stated below:

Date: COUNTY OF SANTA CLARA

JAMES R. WILLIAMS
County Executive
Date: “CITY”

CITY/TOWN OF
Title
A municipal corporation
APPROVED AS TO FORM AND LEGALITY:

WILLIE NGUYEN
Deputy County Counsel
Attachments:

A Projected Fiscal Years 2025, 2026, and 2027 AB939 HHW Fee Funding Allocation by Jurisdiction
B Estimated HHW Program Fixed Costs for Fiscal Years 2025, 2026, and 2027 C HHW Schedule of Collection Events for Fiscal Year 2025 D Household Hazardous Waste Emergency Collection Plan
E Exhibit-E Insurance Requirements for Environmental Services Contracts 512
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ATTACHMENT A: PROJECTED FISCAL YEARS 2025-2027 ANNUAL HHW FEE

FUNDING ALLOCATION BY JURISDICTION
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ATTACHMENT B: ESTIMATED ANNUAL HHW PROGRAM FIXED COSTS FOR FISCAL YEARS 2025, 2026, AND 2027
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ATTACHMENT C: HHW SCHEDULE OF PERMANENT & TEMPORARY
COLLECTION EVENTS FOR FISCAL YEAR 2025-2027*
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ATTACHMENT C: HHW SCHEDULE OF PERMANENT & TEMPORARY
COLLECTION EVENTS FOR FISCAL YEAR 2025-2027* (Continued) *SUBJECT TO CHANGE
2025/Month Day Date Location Type of Event County Holidays/ Notes January Wed 1 No Event No Event NEW YEAR'S
Thurs,Fri, Sat 2,3,4 San Martin Permanent
Thurs,Fri,Sat 2,3,4 San Jose Permanent
Thurs,Fri 9,10 San Jose Permanent
Saturday 11 Sunnyvale Temporary TBD
Thurs,Fri,Sat 16,17,18 San Jose Permanent
Thurs,Fri 23,24 San Jose Permanent
Saturday 25 Santa Clara Temporary TBD
Thurs,Fri 30,31 San Jose Permanent
February Sat 1 San Jose Permanent
Thurs,Fri, Sat 6,7,8 San Martin Permanent
Thurs,Fri,Sat 6,7,8 San Jose Permanent
Thurs,Fri,Sat 13,14,15 San Jose Permanent
Thurs,Fri,Sat 20,21,22 San Jose Permanent
Thurs,Fri 27,28 San Jose Permanent
March Sat 1 San Jose Permanent
Thurs,Fri, Sat 6,7,8 San Martin Permanent
Thurs,Fri,Sat 6,7,8 San Jose Permanent
Thurs,Fri,Sat 13,14,15 San Jose Permanent
Thurs,Fri,Sat 20,21,22 San Jose Permanent
Thurs,Fri,Sat 27,28,29 San Jose Permanent
April Thurs,Fri,Sat 3,4,5 San Jose Permanent
Thurs,Fri, Sat 3,4,5 San Martin Permanent
Thurs,Fri 10,11 San Jose Permanent
Saturday 12 Los Altos Temporary TBD
Thurs,Fri 17,18 San Jose Permanent
Saturday 19 Sunnyvale Temporary TBD
Thurs,Fri 24,25 San Jose Permanent
Saturday 26 Santa Clara Temporary TBD
May Thurs,Fri,Sat 1,2,3 San Jose Permanent
Thurs,Fri, Sat 1,2,3 San Martin Permanent
Thurs,Fri,Sat 8,9,10 San Jose Permanent
Thurs,Fri,Sat 15,16,17 San Jose Permanent
Thurs,Fri 22,23 San Jose Permanent
Saturday 24 No Event No Event MEMORIAL DAY WEEKEND
Thurs,Fri,Sat 29,30,31 San Jose Permanent
June Thurs,Fri, Sat 5,6,7 San Martin Permanent
Thurs,Fri,Sat 5,6,7 San Jose Permanent
Thurs,Fri 12,13 San Jose Permanent
Saturday 14 Milpitas Temporary TBD
Thurs, Fri,Sat 19,20,21 San Jose Permanent
Thurs,Fri,Sat 26,27,28 San Jose Permanent
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ATTACHMENT D:

COUNTY HOUSEHOLD HAZARDOUS WASTE

EMERGENCY COLLECTION PLAN

1. PURPOSE

The purpose of the Household Hazardous Waste Emergency Collection Plan is to minimize potential public health and safety impacts, as well as to minimize costs and confusion during an emergency or disaster. This Attachment describes the services the County can provide and the responsibilities of each party for the collection of household hazardous wastes (HHW) in response to an emergency as defined by the local jurisdiction.

Jurisdictions should contact local emergency agencies, the Governor's Office of Emergency Services (OES), and California Department of Toxic Substances Control (DTSC) for more specific information on hazardous materials emergency response.

2. Timing of HHW
While it is important to have special collection opportunities for disaster-related HHW as soon as possible to avoid illegal disposal or harm to people and/or the environment, having an event or service too soon after a disaster may result in low participation. Sufficient public notification, assessment and monitoring of the disaster and cleanup process by the designated City HHW Coordinator(s) is essential.

3. Public Information/Notification:

Cities should be prepared to provide the public with information related to the problems associated with HHW along with information about special collection events and services. Upon the decision to hold an emergency collection event, it is the City’s responsibility to prepare and deliver the necessary public outreach to notify the public of an upcoming event. A City’s public outreach program should evaluate all forms of media including: newspaper ads, posters, flyers, press releases, banners, door-to-door notices, roadside signs, signs on dumpsters, radio public service announcements, social media outlets and television public access stations. Be aware of communities where multiple language outreach efforts will be necessary.

4. State HHW Collection Permits
DTSC is responsible for issuing the necessary state permits for HHW collection facilities. During an emergency, the County will obtain the necessary emergency permit for special collection of household hazardous waste from DTSC through their expedited approval process.

5. Collection Events

Temporary collection events can be set-up at various sites including parking lots, city maintenance yards, within neighborhoods needing service, and at landfills or a centralized 517
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Agreement for Countywide Household
Hazardous Waste Collection Program Page 20 of 27
location to service larger segments of the population. Waste collected will be transported with a transportation vehicle provided by the HHW Program. In addition, events can be scheduled at the two existing Countywide Household Hazardous Waste Collection Facilities (CoHHWCF).

The following options are available to each participating City.

• Neighborhood Drop-off Events: The County is able to provide localized service to specific areas in need of household hazardous waste collection services. The County will work with City Solid Waste Coordinators to conduct coordinated efforts to residents in the affected area. After a specific event, waste will be transported by County staff or a hazardous waste contractor to an appropriate facility.

• Mobile HHW Event: The County conducts Household Hazardous Waste Collection Event (Events) at various sites located in Santa Clara County throughout the year. Events will be expanded to give priority to disaster victims when requested by the City. The County shall obtain all necessary permits and licenses required for the events and shall provide and/or contract for the services of properly trained personnel and hazardous waste haulers. The County shall also provide or secure suitable equipment and supplies to properly receive, package, label, haul, recycle and dispose of the household hazardous wastes collected at events.

• CoHHWCF: The County operates two permitted HHW collection facilities for the collection and storage of HHW. The County shall provide or contract for services, equipment, and supplies to properly receive, package, label, haul, recycle and dispose of wastes collected at the CoHHWCF.

The CoHHWCF are located at:

San Martin, 13055 Murphy Ave, San Martin, CA 95046
San Jose, 1608 Las Plumas, San Jose, CA 95133

6. Costs, Documentation, and Reimbursements

Cities will be billed on a cost recovery basis. Costs of emergency events will be tracked and billed separately. Emergency funding applications pending from the State or Federal government for reimbursements in no way relieves the City of responsibility to make timely payment to the County in accordance with the terms of the AGENCY AGREEMENT FOR COUNTYWIDE HOUSEHOLD HAZARDOUS WASTE COLLECTION PROGRAM.

The County agrees to provide the City with a detailed accounting of services provided for an emergency collection. Documentation will track the time and materials of staff, outside contractor expenses, and quantities and types of waste collected to demonstrate that the wastes were generated above and beyond existing collection programs.

Services to businesses will be provided on a cost recovery basis and according to Section 12 of the

AGENCY AGREEMENT FOR COUNTYWIDE HOUSEHOLD HAZARDOUS WASTE COLLECTION PROGRAM, which includes program administration, on-site collection, transportation, and disposal costs. The County will assume responsibility for collecting fees from participating businesses.

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Agreement for Countywide Household
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7. State and Federal Assistance and Funds

It is the City’s responsibility to pursue reimbursement from State or Federal agencies.

California Governor’s Office of Emergency Services (Cal OES)

Cal OES is responsible for requesting assistan is declared a state disaster area, and the local jurisdiction deems that the needs of the disaster response are beyond ce on behalf of local jurisdictions for resources beyond the capability of the jurisdiction. State assistance may include assistance available from State, Federal, or private sources. If a local jurisdiction its capabilities, then the local jurisdiction can request assistance and reimbursement of costs from Cal OES.

Follow Standardized Emergency Management System (SEMS)
All requests and emergency responses must be in accordance with the SEMS. DTSC may have funding available for hazardous waste response and collection.

Federal Assistance
If a state disaster area is declared a federal disaster, then federal funding assistance may be available through the Cal OES. Funding and assistance may be available from Federal agencies such as FEMA and the USEPA.

Damage estimates: The city should provide to the Cal OES estimates of damages and a "scope of work requested." It is recommended that the local HHW coordinator meet ahead of time with local emergency agencies or Cal OES contacts regarding the proper procedures and wording of requests for assistance.

Funding Process: The funding process may vary depending on the unique circumstances of the disaster. The process can either be the traditional FEMA reimbursement process, or by direct assistance from USEPA.

REFERENCES

California Integrated Waste Management Board, Integrated Waste Management Disaster Plan:

Guidance for local government on disaster debris management, January 1997.

Emergency Planning Contacts and Personnel
Primary County Contact: County of Santa Clara
Consumer and Environmental Protection Agency
Household Hazardous Waste Program
ATTN: Hazardous Materials Program Manager
(408)-918-1967

For Non-Emergency after-hours, contact County Communications at: (408) 977-3220

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Responsibility: Coordinate and establish proper collection and disposal methods for household hazardous waste. Assess the need for HHW and VSQG services in consultation with the City and other operations.

Cal OES Public Safety Communications Main Office
601 Sequoia Pacific Boulevard
Sacramento, CA 95811
(916) 894-5209

Cal OES
3650 Schriever Avenue
Mather, CA 95655-4203
(916) 845-8510

CHEMTREC Emergency number, (800) 424-9300
Non‑emergency (800) 262-8200

Chemtrec is a public service established by the Chemical Manufacturers Association. The Center was developed as a resource for obtaining immediate emergency response information to mitigate accidental chemical releases, and as a means for emergency responders to obtain technical assistance from chemical industry product safety specialists, emergency response coordinators, toxicologists, physicians, and other industry experts to safely mitigate incidents involving chemicals.
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ATTACHMENT E
Agreement for Countywide Household
Hazardous Waste Collection Program Page 23 of 27

EXHIBIT E

INSURANCE REQUIREMENTS FOR

ENVIRONMENTAL SERVICES

CONTRACTS
(Hazardous Waste Disposal, Remediation Services, Environmental Consulting, etc.) Indemnity
The Contractor shall indemnify, defend, and hold harmless the County of Santa Clara (hereinafter "County"), its officers, agents and employees from any third party claim, liability, loss, injury or damage to the extent arising out of, or in connection with, performance of this AGREEMENT by Contractor and/or its agents or employees, excepting only loss, injury or damage caused by the sole negligence or willful misconduct of personnel employed by the County. It is the intent of the parties to this AGREEMENT to provide the broadest possible coverage for the County. The Contractor shall reimburse the County for all costs, attorneys' fees, expenses and liabilities incurred with respect to any litigation in which the Contractor contests its obligation to indemnify, defend and/or hold harmless the County under this AGREEMENT and does not prevail in that contest.

Insurance
Without limiting the Contractor's indemnification of the County, the Contractor shall provide and maintain at its own expense, during the term of this AGREEMENT, or as may be further required herein, the following insurance coverages and provisions:

A. Evidence of Coverage
Prior to commencement of this AGREEMENT, the Contractor shall provide a Certificate of Insurance certifying that coverage as required herein has been obtained. Individual endorsements executed by the insurance carrier shall accompany the certificate.

This verification of coverage shall be sent to the requesting County department, unless otherwise directed. The Contractor shall not receive a Notice to Proceed with the work under the AGREEMENT until it has obtained all insurance required and such insurance has been approved by the County. This approval of insurance shall neither relieve nor decrease the liability of the Contractor.

B. Qualifying Insurers
All coverages, except surety, shall be issued by companies which hold a current policy holder's alphabetic and financial size category rating of not less than A- V, according to the current Best's Key Rating Guide or a company of equal financial stability that is approved by the County's Insurance Manager. 521
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ATTACHMENT E
Agreement for Countywide Household
Hazardous Waste Collection Program Page 24 of 27
Exhibit E (Continued)
C. Notice of Cancellation
Should any of the requested policies be cancelled before the expiration date, notice will be provided in accordance with policy provisions.

D. Insurance Required

1. Commercial General Liability Insurance - for bodily injury (including death) and property damage which provides limits as follows:
a. Each occurrence - $1,000,000
b. General aggregate - $2,000,000
c. Products/Completed Operations aggregate - $2,000,000 d. Personal Injury - $1,000,000

2. General liability coverage shall include:
a. Premises and Operations
b. Products/Completed
c. Personal Injury liability
d. Severability of interest

3. General liability coverage shall include the following endorsement, a copy of which shall be provided to the County:

Additional Insured Endorsement, (Commercial General Liability Additional Insured provided pursuant to Additional Insured Endorsement #1), which shall read:
“County of Santa Clara, and members of the Board of
Supervisors of the County of Santa Clara, and the officers, agents, and employees of the County of Santa Clara,
individually and collectively, as additional insureds provided pursuant to Additional Insured Endorsement Form #1.”
Insurance afforded by the additional insured endorsement shall apply as primary insurance, and other insurance maintained by the County of Santa Clara, its officers, agents, and employees shall be excess only and not contributing with insurance provided 522
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Agreement for Countywide Household
Hazardous Waste Collection Program Page 25 of 27
Exhibit E (Continued)
under this policy. Public Entities may also be added to the Additional Insured Endorsement Form #1 as applicable by way of insurance addendum, and the contractor shall be notified by the contracting department of these requirements.

4. Automobile Liability Insurance
For bodily injury (including death) and property damage which provides total limits of not less than one million dollars ($1,000,000) combined single limit per occurrence applicable to all owned, non-owned and hired vehicles. Coverage shall include Environmental Impairment Liability Endorsement MCS90 for contracts requiring the transportation of hazardous materials/wastes.

5. Workers' Compensation and Employer's Liability Insurance a. Statutory California Workers' Compensation coverage including broad form all-states coverage.
b. Employer's Liability coverage for not less than one million dollars ($1,000,000) per occurrence.

6. Contractors Pollution Liability Insurance
Coverage shall provide a minimum of not less than five million dollars ($5,000,000) per occurrence and aggregate for bodily injury, personal injury, property damage and cleanup costs both on and offsite.

7. Professional Errors and Omissions Liability Insurance (required for contractors providing professional services, such as through a professional engineer, registered geologist, etc.)
a. Coverage shall be in an amount of not less than one million dollars ($1,000,000) per claim/aggregate.
b. If coverage contains a deductible or self-retention, it shall be reviewed and approved by the County’s Insurance Manager prior to contract execution.
c. Coverage as required herein shall be maintained for a minimum of two years following termination or completion of this AGREEMENT. 523
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ATTACHMENT E
Agreement for Countywide Household
Hazardous Waste Collection Program Page 26 of 27
Exhibit E (Continued)

8. Claims Made Coverage
If coverage is written on a claims made basis, the Certificate of Insurance shall clearly state so. In addition to coverage requirements above, such policy shall provide that:
a. Policy retroactive date coincides with or precedes the Consultant's start of work (including subsequent policies purchased as renewals or replacements).
b. Policy allows for reporting of circumstances or incidents that might give rise to future claims. If coverage terminated Run-Off (Tail) coverage will be purchased for three (3) years following termination.

E. Special Provisions
The following provisions shall apply to this AGREEMENT:

1. The foregoing requirements as to the types and limits of insurance coverage to be maintained by the Contractor and any approval of said insurance by the County or its insurance consultant(s) are not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Contractor pursuant to this AGREEMENT, including but not limited to the provisions concerning indemnification.

2. The County acknowledges that some insurance requirements contained in this AGREEMENT may be fulfilled by self-insurance on the part of the Contractor. However, this shall not in any way limit liabilities assumed by the Contractor under this AGREEMENT. Any self-insurance shall be approved in writing by the County upon satisfactory evidence of financial capacity. Contractors obligation hereunder may be satisfied in whole or in part by adequately funded self-insurance programs or self-insurance retentions.

3. Should any of the work under this AGREEMENT be sublet, the Contractor shall require each of its subcontractors of any tier to carry the aforementioned coverages.

4. The County reserves the right to withhold payments to the Contractor in the event of material noncompliance with the insurance requirements outlined above.
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ATTACHMENT E
Agreement for Countywide Household
Hazardous Waste Collection Program Page 27 of 27
Exhibit E (Continued)
F. Fidelity Bonds (Required only if contractor will be receiving advanced funds or payments)
Before receiving compensation under this AGREEMENT, Contractor will furnish County with evidence that all officials, employees, and agents handling or having access to funds received or disbursed under this AGREEMENT, or authorized to sign or countersign checks, are covered by a BLANKET FIDELITY BOND in an amount of AT LEAST fifteen percent (15%) of the maximum financial obligation of the County cited herein. If such bond is canceled or reduced, Contractor will notify County immediately, and County may withhold further payment to Contractor until proper coverage has been obtained. Failure to give such notice may be cause for termination of this AGREEMENT, at the option of County.
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RESOLUTION NO. 24-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO

AUTHORIZING EXECUTION OF THE AGREEMENT

WITH THE COUNTY OF SANTA CLARA FOR COUNTYWIDE

HOUSEHOLD HAZARDOUS WASTE
COLLECTION PROGRAM FOR FY’s 2025-2027
WHEREAS, there has been presented to the City Council a new “Agreement For Countywide Household Hazardous Waste Collection Program,” between the County of Santa Clara and the City of Cupertino; and WHEREAS, the Agreement will allow continued City participation in the County’s Household Hazardous Waste Collection Program for Fiscal Years 2025, 2026, and 2027 (July 1, 2024 – June 30, 2027); and
WHEREAS, item 27 of the Agreement for Countywide Household Hazardous Waste Collection Program allows for its termination by either the COUNTY or CITY upon thirty (30) days written notice given by the terminating party; and
WHEREAS, the provisions of the Agreement for the Countywide Household Hazardous Waste Collection Program for FY’s 2025-2027 have been reviewed and approved by the Director of Public Works and the City Attorney; and
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Cupertino hereby adopts this resolution approving the “The Agreement for Countywide Household Hazardous Waste Collection Program for FY’s 2025- 2027” and authorizes the City Manager or his designee to have authority to execute said agreement on behalf of the City of Cupertino.

PASSED AND ADOPTED at a regular adjourned meeting of the City Council of the City of Cupertino this 4th day of June, 2024, by the following vote:

Members of the City Council
AYES:

ATTACHMENT C
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Resolution No. __________________

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Sheila Mohan, Mayor
City of Cupertino
________________________
Date
ATTEST:
________
Kirsten Squarcia, City Clerk
________________________
Date
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CITY OF CUPERTINO
Agenda Item
24-12937 Agenda Date: 6/4/2024
Agenda #: 13.

Subject: Approve the renewal (with no increase) of the 1992 Storm Drain Fee and renewal of the 2019 Clean Water and Storm Protection Fee with a 2.62% increase Adopt:

1. Resolution No. 24-052 (Attachment A) approving the renewal and collection of the 1992 Storm Drain Fee with no increase in rates for Fiscal Year (FY) 2024-25

2. Resolution No. 24-053 (Attachment B) approving the renewal and collection of the 2019 Clean Water and Storm Protection Fee with a 2.62% increase in rates for FY 2024-25 Presenter: Ursula Syrova, Environmental Programs and Sustainability Manager CITY OF CUPERTINO Page 1 of 1 Printed on 5/29/2024
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CITY COUNCIL STAFF REPORT
Meeting: June 4, 2024
Subject
Approve the renewal (with no increase) of the 1992 Storm Drain Fee and renewal of the 2019 Clean Water and Storm Protection Fee with a 2.62% increase.

Recommended Action
Adopt:

1. Resolution No. 24-XXX (Attachment A) approving the renewal and collection of the 1992 Storm Drain Fee with no increase in rates for Fiscal Year (FY) 2024-25.

2. Resolution No. 24-XXX (Attachment B) approving the renewal and collection of the 2019 Clean Water and Storm Protection Fee with a 2.62% increase in rates for FY 2024-25.

Reasons for Recommendation
City of Cupertino’s Stormwater Pollution Prevention Program The City’s Stormwater Pollution Prevention Program (also known as the Nonpoint Source Program) is mandated by the State of California (State) and United States Environmental Protection Agency (EPA) regulations implementing the Federal Clean Water Act. Regulations by the EPA and the State require cities to take specific actions to eliminate or control pollutants in water that belongs to the State. These regulations are implemented locally by the California Regional Water Quality Control Board - San Francisco Bay Region (Water Board) through the Municipal Regional Stormwater National Pollutant Discharge Elimination System (NPDES) Permit, commonly referred to as the Municipal Regional Permit (MRP.) Additional details of the City’s compliance activities are provided in the Engineer’s Report (Exhibit A to each of the resolutions located in Attachments A and B).

Information about the City’s stormwater pollution prevention program is also available at www.cupertino.org/cleanwater, which includes links to a variety of resources and guidance including an interactive creek map, a link to the City’s most recent annual report submitted as required to the Water Board, information for developers and contractors, and education on less toxic pest control.
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Two property-based fees have been established to help cover the costs of compliance:
1992 Storm Drainage Service Charge Fee (1992 Fee)
In 1992, the City established the 1992 Fee to help cover the cost of complying with stormwater pollution prevention requirements that were then in effect. The 1992 Fee is applied to each property in the City, with exceptions for those owned by certain entities, such as properties owned by the government, utility agencies, and schools, which were exempt under the laws at the time the fee was approved. The fee is collected by the Santa Clara County Tax Collector on behalf of the City and is subject to annual review by the City Council. The Fee consisted of three rates, which were based on type of land use of each parcel as follows: 1) $12 for residential parcels; 2) $144/acre for apartments, commercial and industrial parcels; and 3) $36/acre for unimproved and recreational parcels.

The Fee has no mechanism to enable an annual increase. As such, the revenue collected from the 1992 Fee has not increased since it was established and has remained at approximately $375,000 per year. However, regulatory requirements, stormwater system maintenance expenses, wages, and permit fees have not remained static since 1992, and the cost of compliance has risen over the years. When the first MRP was approved and implemented in 2009, and again when the second permit was adopted in 2015, permit requirements increased significantly. The third reissuance of the Municipal Regional Permit (MRP 3.0) was adopted on May 11, 2022, with an effective date of July 1, 2022, further increasing requirements. Certain requirements within MRP 3.0 become effective July 1, 2023, and the City made edits to the Cupertino Municipal Code (CMC) to reflect those changes. While existing language in the CMC already states that “All requirements in the Municipal Regional Permit are required and enforceable by the City,” staff performed additional code cleanup to clarify and streamline CMC section

9.15. Those edits became effective July 6, 2023. By 2019 the cost of compliance exceeded the revenues from the 1992 fee and was creating a significant draw upon the City’s General Fund by over $600,000 per year. Renewal of the 1992 Fee is recommended in FY 2024-25.
2019 Clean Water and Storm Protection Fee (Clean Water Fee) The Clean Water Fee, a property-related fee subject to Proposition 218, was approved by Cupertino property owners in 2019 and was authorized by Council on July 17, 2019, for inclusion on the 2019-2020 Property Tax bills. The 2019 Clean Water Fee and Storm Protection (2019 Fee) was calculated starting from the average acreage of a median single-family residential parcel and a benchmark amount of impervious surface. Details of the rate structure analysis can be found in the Fee Report attached to the 2019 Fee Ordinance (Attachment C.) Proposition 218 requires that all property owners pay in proportion to the benefit received; therefore, exceptions provided under the 1992 Fee (which predates the adoption of Proposition 218) for parcels owned by certain public entities, such as government, utilities, and schools, are not permissible. 530
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The Clean Water Fee may be increased annually by Council to meet expenses of the Nonpoint Source Program. The potential increase is tied to the annual change in Consumer Price Index (CPI) as of December each year, up to a maximum of 3% in any single year. The CPI change for the period December 2022 to December 2023 was 2.62%.

Staff recommends increasing the fee for FY 2024-2025, which will generate an additional $29,473.

This increase equates to approximately $1.20/year for the most common (medium) sized single-family parcel. Current rates and the proposed increased rates are shown in the tables below.

Current Annual Rates:
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Annual Rates With 2.62% Increase:
2019 Clean Water and Storm Protection Fee Incentive Programs The City continues to offer the cost-share program for low-income residents. Eligible residents will receive a 20% reduction in their annual fee. The cost-share program is funded by the General Fund because revenues from the 2019 Fee are restricted from being used for a cost-share (e.g., funding a reduced rate for others property owners). An online application form is available1 and applicants are also welcome to call 408-777-3236 or email staff for assistance at [email protected].

Fee Reduction for Commercial and Multi-family Low Impact Design Features As allowed by the 2019 Fee Ordinance, 267 commercial and multi-family properties that had already installed low-impact design (LID) elements such as bioswales, capture basins, and bioretention facilities, were assigned a 25% fee reduction, consistent with the fee schedule, after the fee was adopted. Installation of new LID features under the requirements of C.3 in the MRP (stormwater treatment measures in new development and redevelopment projects) qualifies additional properties for the same reduction.

There is no change to this fee reduction for qualifying properties.

1 Cupertino.org/watercostshare
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Audit Committee Review of Programs
Pursuant to the 2019 Fee Ordinance, expenses and revenues are audited annually by an independent auditor. The City’s annual external audit for FY2022-23 is tentatively scheduled to be completed and reviewed by the Audit Committee in June 2024, and no issues have been raised about the Nonpoint Source Program transactions. An additional Agreed-Upon Procedures (AUP) Audit, specific to the Nonpoint Source Program, was developed to further assess this program using a calendar year cycle, which will be completed for calendar year 2022 and 2023 with no expected exceptions noted. The final AUP reports will be available to the public late June. Council may approve the recommended actions independent of the AUPs being finalized.

Sustainability Impact
The 1992 Fee and 2019 Fee support water pollution prevention and water conservation (NPDES) activities. Significant sustainability benefits include the reduction or elimination of pollutant discharges, which could degrade local creeks and threaten the supply of clean water, as well as the capture of rainwater, which can be used as a resource. Green Stormwater Infrastructure uses engineered features to mimic natural processes that allow stormwater to infiltrate the groundwater system instead of entering the storm drain system, enhancing climate change resilience.

Fiscal Impact
The combined revenues from the 1992 Storm Drainage Service Charge and 2019 Clean Water and Storm Protection Fee will generate approximately $1,500,500 for FY 2023-24, received into Fund 230 Environmental Management/Clean Creek/Storm Drain. Projected expenses by the end of the fiscal year are approximately $2,228,113, which is 13% under the approved budget, but which exceed the revenues generated by the 1992 Fee and the 2019 Fee by approximately $727,613.

The proposed budget for FY 2024-25, with the proposed 2.62% increase of the 2019 Fee, anticipates the cost of the Nonpoint Source Program to be $1,906,328, which reflects full staffing, adjusted staffing allocations, maintenance projects on aging infrastructure for storm protection, installation of drain inlet treatments, and the other activities that ensure compliance with the MRP. Without an increase, the expected revenues from the two fees are approximately $1,500,500. The projected expense for the Nonpoint Source Program for FY 24-25 is $429,089 beyond the expected revenue from the fees.

In recent years, the shortfall between the APN fee revenues and the program expenses has been covered by the balance in Fund 230 330-301. The available balance of Fund 230 after considering the estimated actuals for FY 2023-24 is projected to be $492,521. The projected shortfall for FY 24-25 as noted in the previous paragraph is approximately $429,089, which will leave an expected balance in Fund 230. However, a new street sweeping contract is currently being pursued with an expected cost increase and an 533
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outfall assessment project is currently underway that will result in identifying needed repairs. As such, the 2.62% increase is still recommended.

This annual renewal process concerns only budget and activities related to Fund 230 Environmental Management/Clean Creek/Storm Drain, which is for activities related to operating the Non-Point Source Pollution Program. It is distinct from Fund 215 Storm Drain AB16002, which is revenue from development impact fees as a result of impacts to the storm drainage system and ongoing maintenance and improvements necessary to ensure proper drainage from development projects. It is also distinct from Fund 210 Storm Drain Improvement, which is for the construction and maintenance of storm drain facilities through projects funded by the Capital Reserve.

Nonpoint Source Program Revenue and Expenses (estimated) FY 2023-24 FY 2024-25 (proposed)
Fund Balance (previous FY) $1,220,134 $492,521
Revenue 1992 Fee $ 375,583 $ 375,583
Revenue 2019 Fee $ 1,124,917 $ 1,154,390

2.62% increase to 2019 Fee $ - $ 29,473
General Fund $ -
Total Program Funding $2,720,634 $2,051,967
Program Expenses (projected) $2,228,113 $1,906,328
Remaining Fund Balance at end
of FY $ 492,521
$
145,369
The following operational reductions that were implemented in FY23-24 continue to be included in the proposed FY24-25 budget:
 As part of the annual compliance required by the MRP, the annual stormwater inspection has been conducted by a third-party consultant. Going forward, such inspection will be conducted by city staff. Annual cost savings will be $3,200.  Discontinue the agreement with Grassroots Ecology for citizen science fieldtrips to do water sampling in Stevens Creek. While the program is popular among the community, the collected data is beyond the testing required by the MRP and outreach and education are already occurring regionally through SCVURPPPfunded projects and through the City’s third grade creek education field trips at McClellan Ranch Preserver. Cost savings will be $20,460.  Discontinue providing transportation service to CUSD to McClellan Ranch Preserve for annual third-grader fieldtrips. CUSD has confirmed that the schools would be able to continue the fieldtrip and CUSD can supply the transportation.

This would be an annual cost savings of $14,900.

2 See Page 8 of the Development Impact Fee Report:
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 Purchase of a remote-controlled rover with a camera now provides the City with a more cost-effective evaluation of storm drain system pipes. Purchasing the remote camera system has enabled the storm drain inspection operations team to perform activities that were previously cost the City approximately $160,000 per year.
 Elimination of matching rebates for the Valley Water program for landscape conversion and rainwater capture for a savings of $12,500 per year.

California Environmental Quality Act (CEQA)
Not applicable.
_____________________________________
Prepared by: Ursula Syrova, Environmental Programs and Sustainability Manager Reviewed by: Chad Mosley, Director of Public Works
Reviewed by: Matt Morley, Assistant City Manager
Approved for Submission by: Pamela Wu, City Manager
Attachments:

A – Draft Resolution 1992 Fee
B – Draft Resolution 2019 Fee
C - Clean Water and Storm Protection Fee Ordinance with Fee Report 535
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RESOLUTION NO. 24-XXX

A RESOLUTION OF THE CUPERTINO CITY COUNCIL APPROVING THE

RENEWAL AND COLLECTION OF THE EXISTING STORM DRAIN FEE
WITH NO INCREASE IN RATES FOR FISCAL YEAR 2024-2025
WHEREAS, the City Council of the City of Cupertino enacted Municipal Code Chapter 3.36 to meet the requirements of the federally mandated Stormwater Pollution Prevention and Management Program, federal regulations, and the City’s National Pollution Discharge Elimination System (NPDES) permit and establishing the authority for imposing and charging a storm drainage service charge (“storm drain fee” or “fee”); and
WHEREAS, Municipal Code Chapter 9.18 provides regulations and gives legal effect to the Municipal Regional Permit issued to the City and assures ongoing compliance with the most recent version of the City’s NPDES permit regarding the effect of urban stormwater runoff on the ability of the City’s storm drain system to comply with federal and state laws; and WHEREAS, in 1992 the City adopted a storm drain fee based on the City’s Master Storm Drain Study runoff coefficients and average area of impervious surface per acre based on the type of land use of each parcel; and WHEREAS, a written report titled “Engineer’s Report, Assessment of Fees for Storm Drainage Purposes Nonpoint Source Pollution Program” (“report”), concerning the method of assessing fees to fund the City’s Stormwater Management Program, was prepared by the Director of Public Works pursuant to Section 3.36.080(B) of the City’s Municipal Code and filed with the City Clerk on June 1, 2024; and
WHEREAS, notice of the proposed rates was published in a local newspaper on 5/22/2024 and 5/28/2024; and
WHEREAS, the City Council of the City of Cupertino finds and determines as follows:

1. After considering the “Engineer’s Report, Assessment of Fees for Storm Drainage Purposes Nonpoint Source Pollution Program,” attached hereto as Exhibit A and incorporated herein, and the testimony received at this public hearing, the City Council hereby approves the report.
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Resolution No. __________________

2. There is a need in the City to continue collecting a storm drain fee to cover the costs of federal and state requirements, as heretofore described, in that properties within the City will not otherwise contribute a portion of costs toward this program and without the availability of such storm drain fee, the City’s general fund will further be negatively impacted in such a manner as to jeopardize other essential services.

3. The facts and evidence presented establish that there is a reasonable relationship between the need for this fee and the impacts for which this fee shall be used, and that there is a reasonable relationship between the fee’s use and the properties that are to be charged this fee. These relationships or nexus are described in more detail in the above-referenced Engineer’s Report.

4. The amounts of the fee for each category of property, as set forth below, are reasonable amounts, because the fee is based on the percent of impervious area established in the Master Plan, City of Cupertino Storm Drainage System and are below the amount needed to recover the cost of storm drainage services.

5. It is further determined that each and every parcel of land to which the fee applies will, and has received, a benefit of flood control from the storm drainage system and that the fees imposed herein on each such parcel are in conformity with, and in fact lower than, the benefits that such parcel has received as further described in the report.

NOW, THEREFORE, BE IT RESOLVED, by the City Council, that:

1. Charge. The storm drain fee shall continue to be charged to each parcel within the City, unless exempt, to contribute to the costs of the City’s federal and state requirements for Nonpoint Source Control and a Stormwater Management Program.

2. Use of Revenue. The revenue derived from said fee shall be used in connection with implementing and enforcing Chapters 3.36 of the Cupertino Municipal Code titled “Storm Drainage Service Charge” and Chapter 9.18 titled “Stormwater Pollution Prevention and Watershed Protection.”

3. Schedule of Charges.
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a. Annual fees for each category of property will be assessed and collected as follows:

Residential premises $ 12.00/parcel
Apartment premises $144.00/acre
Commercial/Industrial premises $144.00/acre
Unimproved/Recreational $ 36.00/acre
b. The following public properties are exempt from, and shall not be assessed the environmental fee:

Cupertino Sanitary District
Santa Clara County
Santa Clara Valley Water District
Southern Pacific Transportation Company
State of California
The Santa Clara County Fire Department
The City of Cupertino
The Cupertino Union School District
The Foothill-De Anza Community College District
The Fremont Union High School District
The MidPeninsula Regional Open Space District
United States of America

4. Judicial Action to Challenge this Resolution. Any judicial action or proceeding to challenge, review, set aside, void, or annul this resolution shall be brought within 120 days from the date of its adoption.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 4th day of June, 2024, by the following vote:

Members of the City Council
AYES:

NOES:
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ABSENT:

ABSTAIN:

SIGNED:
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Sheila Mohan, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Kirsten Squarcia, City Clerk
________________________
Date
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EXHIBIT A

ENGINEER'S REPORT

ASSESSMENT OF FEES FOR STORM DRAINAGE PURPOSES

NONPOINT SOURCE POLLUTION PROGRAM
A. Program Description and Purpose
The purpose of this assessment is to collect fees to fund the City of Cupertino's Nonpoint Source Pollution Prevention Program mandated by the Environmental Protection Agency (EPA) and the Clean Water Act. Regulations by the EPA and the State of California require cities to take specific actions to eliminate or control pollutants in waters of the State.

The term "nonpoint source pollution" represents a process whereby pollutants, debris, trash, sediment, and chemicals which accumulate on streets, in neighborhoods, at construction sites, in parking lots, and on other exposed surfaces are washed off by rainfall and carried away by stormwater runoff (via city drain inlets and pipes installed for flood control) into local creeks and the San Francisco Bay. Sources of these pollutants may include automobile exhaust and oil, pesticides, fertilizers, eroded soil, detergents, pet waste, paint, litter, and other material carried through the City's storm drainage system without treatment directly to the Bay. Many of these pollutants are hazardous to aquatic and human life.

The City of Cupertino has implemented several mandated and pro-active programs to mitigate this problem. Among other activities, these programs include an illegal storm drain discharge investigation and elimination complaint response program; scheduled proactive inspections of outdoor housekeeping practices at business sites within the City; sweeping of residential and commercial streets; installation of trash capture devices and curb drain inlet screens to prevent litter from entering the City's storm drainage system; inspection and cleaning of storm drain structures and trash capture devices; public education and engagement with teachers and students, educational activities offered at 540
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City events; and a popular, unique, and well established District-wide third-grade creek education & field trip program led by the City's naturalist at McClellan Ranch Preserve and Stevens Creek.

The San Francisco Bay Regional Water Quality Control Board (Water Board) approved the first Municipal Regional Permit (MRP) on October 14, 2009, and, on November 18, 2015, adopted the second regional permit (MRP 2.0) with additional requirements that became effective on January 1, 2016. A further update and reissuance (MRP 3.0) were adopted by the Regional Water Quality Control Board and became effective on July 1, 2022. The MRP was issued to the City of Cupertino and 75 agencies or co-permittees which discharge storm water through municipal drainage systems to local creeks and the San Francisco Bay. The City of Cupertino and 14 other co-permittees in Santa Clara County are members of the Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP) which works collaboratively to maintain compliance with MRP

3.0. In addition to conducting local activities, City staff work closely with the other SCVURPPP jurisdictions to implement pollution prevention, source control, monitoring, and educational programs.

B. Recent Notable Activities
In FY 2019-2020, the Nonpoint Source budget was increased to accommodate a new street sweeping contract, enhanced assessment and maintenance of aging structures, and additional staff to clean and maintain the city’s storm drain system. The City’s storm drain system consists of 2092 drain inlets and 90 miles of storm drainage pipes. Of the drain inlets 181 are fitted with full trash capture devices and 283 have curb screens. An additional 19 full trash capture devices will be added during FY 23-24. Maintenance of these assets includes twice per year cleaning of inlets and trash capture devices which protects the city from flooding while preventing stormwater pollution. In FY 23-24, an equivalent total of 5.87 full time employees are included in the Nonpoint Source program budget distributed across 23 positions with varying allocations of each person’s time.

This represents a slight increase from the previous fiscal year because in 2023 the Environmental Programs Division absorbed the Sustainability Division, which triggered a reorganization resulting in shifts to funding allocations. Most notably, one part-time staff went through an internal recruitment process to become a full-time Environmental Compliance Technician to meet the increased demands of MRP compliance and to accommodate succession planning. The part-time position has been eliminated, and other minor shifts in funding allocations will take effect in FY 24-25. One maintenance worker is covered at 100%, and the remaining positions are allocated at between 2% - 60%. 541
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C. Estimated Expenditures
The total amended budget to implement the required programs described above for FY 23-24 was approximately $2,554,669.

The breakdown of past actuals, current actuals as of Q3, and budgeted expenses for FY 24-25 are as follows:

FY 22-23
Actuals
FY 23-24 Q3
7/1/2023 –
3/31/2024
FY 24-25
Requested
Budget
Staffing $880,287 $575,108 $805,035
Materials $67,561 $52,604 $76,021
Contract Services $313,347 $303,909 $415,570
Allocations $332,864 $259,607 $598,995
Cost Share & Rebate
Programs
$9,159 $12,290 $10,707
Special Projects $12,161
Fixed Asset Acquisition $128,895
Total Expenses $1,615,378 $1,332,415 $1,906,328
Expected Final $2,228,113
Activities undertaken within the Nonpoint Source program for permit compliance:

Countywide Program
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SCVURPPP Program Assessment - Regional Permit Implementation Regional Watershed Monitoring (administered by EOA, Inc.1)
State NPDES2 Permit Fees
Countywide Public Education and Municipal Staff Training CA Stormwater Quality Association (CASQA) Participation County Policy Development
Operations and Maintenance
Catch Basin and Frequent Trash Capture Device Cleaning
Installation of Trash Capture and Retractable Screen Devices On-call Emergency Spill and Discharge Response
Staff and Equipment to Implement City's Mandated Litter Reduction Plan Street Sweeping
City Public Education Awareness
Public Outreach Materials & Events
Third-Grade Creek Education for Local Schools
Support High School Students' Watershed and Creek Education Support De Anza College and Community Environmental Education
Community Engagement - Creek Cleanup & Watershed Monitoring Events Staff to Conduct Public Education, Training and Outreach CA Product Stewardship Council membership (Extended Producer Responsibility) Local Programs

1 EOA, Inc. is the environmental engineering and regulatory consulting firm that manages the Santa Clara Valley Urban Runoff Pollution Prevention Program for the co-permittees www.eoainc.com. 2 NPDES: National Pollutant Discharge Elimination System 543
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Development, Administration, and Evaluation of Mandated Programs Environmental Impact and New and Redevelopment Review
Rain barrel, rain garden, and landscape conversion rebates Ordinance Revisions
Database Maintenance
Illegal Discharge Complaint Investigation and Enforcement Industrial/Commercial Discharger Inspection Program
Construction Site Inspection Program
Verification of Treatment Measure Maintenance by Private Property Owners Low Impact Development (LID) and Green Infrastructure Management Litter Reduction Education and Enforcement
City's Participation in Multiple Countywide and Regional Programs Annual Parcel Stormwater Fee Assessment
Other Staffing Costs
Cost Allocations
D. Revenue And Assessment
Revenues generated to fund this program come from two fees assessed on parcels in Cupertino. The Storm Drain Fee was established in 1992. Revenues from that fee are inadequate to meet the expenses associated with maintaining the storm drain system in Cupertino and ensuring compliance with the MRP, so the Clean Water and Storm Protection fee was established in 2019 and first appeared on 2019-2020 property tax bills.

As assessed on the 2023-2024 tax roll and direct billed, the revenue from the two fees will total approximately $1,500,500.

FY 23-24 Assessed Actuals
1992 Storm Drain Fee $375,583.28
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2019 Clean Water and Storm Protection Fee $1,124,917.20 Total Assessed $1,500,500.48
1992 Storm Drain Fee
Fees are based on a factor calculated from the City's Master Storm Drain Study runoff coefficients and average area of impervious surface per acre based on type of land-use development. The factor for each category is based on a comparison to an average residential parcel assigned a factor of one. Certain parcel-owners such as schools and government entities were exempt from such fees in 1992 and as such are not assessed this fee.

The fee assessed on the 2023-2024 tax roll totaled $375,583.28. Those fees were applied to 16,616 residential, commercial, and vacant or recreational use parcels. 2019 Clean Water and Storm Protection Fee
The Clean Water and Storm Protection Fee is imposed on properties that shed water, directly or indirectly, into the City’s storm drainage system, and is calculated to be proportionate to the amount of stormwater runoff contributed by each parcel, which is in turn proportionate to the amount of impervious surface area. The details of the methodology are described in the Fee Report as prepared by SCI Consulting Group (SCI) in February of 2019 that is attached to the Clean Water and Storm Protection fee ordinance. The calculations are informed by the City’s 2018 Storm Drain Master Plan, which includes an analysis of the percentage of impervious area for Cupertino, and rates are further calculated by parcel size and land use category. Unlike the 1992 fee, the 2019 Clean Water and Storm Protection fee is subject to treatment under prop 218 and as such all parcels are assessed the fees without exemptions for parcel-owners such as schools and government entities.
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The fees assessed on the 2023-2024 tax rolls totaled $1,031,331.30. Those fees were applied to 16,597 parcels in fourteen categories including single-family residential parcels in four sizes, condominiums, and apartments, commercial, office, institutional, recreational, and vacant. Fees billed directly to parcel-owners that do not receive property tax bills (such as schools and government) totaled $93,585.90 applied to 71 parcels.

The total revenue from the Clean Water and Storm Protection fee for 2023-2024 is $1,124,917.20.

For both of the fees, in coordination with the City’s contracted consultant for this purpose, each parcel was identified, and a fee established in a separate report submitted to the County entitled Certification of Special Assessment Annual Enrollment which lists the APN and associated fee. The consultant used by the City, SCI, prepares both forms and submits them to the County in accordance with the annual deadline in early August so that the fees can appear on the property tax bills. Additionally, SCI staff are available to answer questions via a phone number provided on the tax bill.

D. Annual Review
The 2019 Clean Water and Storm Protection Fee included annual review requirements beginning with FY 2020-2021 as described in ordinance 19-2183 (Chapter 3.38 of the Cupertino Municipal Code). Section 3.38.040 describes the review process and allows for an annual increase based on the change in CPI as of December each year, up to 3% maximum, if actual additional costs are incurred.

The expenses attributed to the Nonpoint Source Program through third quarter of FY23- 24 are $1,207,482 and are projected to reach $2,228,113 by the end of the fiscal year.

That expected total is about $326,586 below the approved budget for FY23-24; however, it is above expected revenue by approximately $729,912. Available balance in Fund 230 is sufficient to make up the difference for FY22-23.

The intention of the fee assessments is only to cover costs and not accrue a balance, however several factors resulted in fund balance accruing. In 2019, before the Clean Water and Storm Protection Fee ballot measure passed, a General Fund subsidy had already been budgeted and transferred that was ultimately not needed. In FY19-20 the 546
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program came in under budget largely because true staffing cost allocations had not yet been applied, something that was corrected for FY20-21. In FY20-21 a storm drain video and repair project was anticipated at $248,436, but no acceptable bids were received for that project and then it was not conducted in FY21-22 either. An outfall survey is being conducted in FY 23-24 to inform needed repair planning, but at less than the full budgeted amount. In FY 23-24 a rover camera was acquired for $128,895 that will avoid contract expenses in future for drain video services. The fund 230 balance was $ 1,220,134 at the beginning of FY23-24. After covering the shortfall from the projected expenditures from FY23-24, the remaining balance in Fund 230 at the end of the fiscal year is expected to be approximately $492,521 heading into FY 24-25. The requested budget for FY 24-25 totals $1,906,328. With anticipated revenue at $ 1,500,500, that indicates a projected shortfall of an estimated $429,089. That shortfall will not exhaust the remaining fund balance in Fund 230, however there are expected increased costs to street sweeping under a new agreement and anticipated outfall repairs, meaning that an increase to the Clean Water and Storm Protection fee is now recommended to reduce the draw upon the General Fund to cover the difference. A 2.62% increase to the 2019 Clean Water and Storm Protection fee would mean an increase of $1.20 per year for residents in the most common size of residential property. The increase would generate approximately $29,473 per year additional revenue for the program..

A full year of expenses and revenues for the Nonpoint Source Program were audited under the City’s annual external audit and reviewed by the City’s Audit Committee. An additional Agreed-Upon Procedures (AUP) audit specific to the Nonpoint Source Program was developed to further assess this program using a calendar year cycle. An additional Agreed-Upon Procedures (AUP) Audit, specific to the Nonpoint Source Program, was developed to further assess this program using a calendar year cycle, which will be completed for calendar year 2022 and 2023 with no expected exceptions noted.

The final AUP reports will be available to the public late June. The City requests preparation of calendar year AUPs for the stormwater program in order to provide more up to date findings to the City Council for review during this annual process, which must happen prior to the normal fiscal year cycle in order to meet County tax roll deadlines.

Chad Mosley
Director of Public Works/City Engineer
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RESOLUTION NO. 24-XXX

A RESOLUTION OF THE CUPERTINO CITY COUNCIL APPROVING THE RENEWAL AND COLLECTION OF THE EXISTING 2019 CLEAN WATER AND STORM PROTECTION FEE FOR FISCAL YEAR 2024-2025
WHEREAS, on March 5, 2019, the City Council of the City of Cupertino adopted Resolution 19-022 initiating proceedings to obtain approval of the proposed 2019 Clean Water and Storm Protection Fee (“Fee”), which is a property related fee conforming to Article XIII D, Section 6 of the California Constitution, and approved the Fee Report for the Water Quality and Flood Protection Fee (“Fee Report”) which sets forth the basis and the amount of the 2019 Clean Water and Storm Protection Fee on various parcels of land in order to finance, in compliance with Article XIIID of the Constitution, the costs of the City’s Clean Water and Storm Protection Program; and
WHEREAS, on March 18, 2019, a notice of public hearing was mailed to all property owners whose property would be subject to the Fee, in accordance with California Health and Safety Code Section 5473.1; and
WHEREAS, on May 7, 2019, the City Council adopted Resolution 19-041 finding that a majority protest does not exist and ordering a mailed ballot proceeding for the proposed Fee proceeding in accordance with Article XIII of the Constitution, Section 53755.5 of the Government Code; and WHEREAS, on May 7, 2019, the City Council introduced Ordinance No. 19- 2183 establishing Chapter 3.38 of the Municipal Code to establish the Clean Water and Storm Protection Fee; and
WHEREAS, on May 17, 2019, ballots were mailed to all property owners whose property would be subject to the Fee; and
WHEREAS, on July 17, 2019, by its Resolution 19-096 the City Council adopted Ordinance No. 19-2183 establishing Chapter 3.38 of the Municipal Code, found that the Fee was approved by 51.15% of the returned ballots from property owners of the property subject to the Fee and thereby ordered that the Fee for fiscal year 2019-20 be levied at the rates specified in the Fee Report; and WHEREAS, Sections 3.38.040 through 3.38.070 of the Ordinance establishing the 2019 Clean Water and Storm Protection Fee allow the City Council 548
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to review the Fee annually and apply a rate increase based on the change in the Consumer Price Index (“CPI”) up to a maximum increase of 3% in any single year, and to collect the Fee on the property tax roll in the same manner, by the same persons, and at the same time as, the general taxes; and WHEREAS, the City Council of the City of Cupertino finds and determines as follows:

1. There is a need in the City to continue collecting the Clean Water and Storm Protection Fee to cover the costs of the Clean Water and Storm Protection Program; and

2. The facts and evidence presented establish that there is a reasonable relationship between the need for this Fee and the impacts for which this Fee shall be used, and that there is a reasonable relationship between the Fee’s use and the properties, which are to be charged the Fee. These relationships or nexus are described in more detail in the above referenced Fee Report; and

3. The amounts of the Fee for each category of property, as set forth below in the Schedule of Charges, are reasonable amounts, because the amounts are based on the methodology established in the Fee Report.

NOW, THEREFORE, BE IT RESOLVED, by the City Council, that:

1. Charges. The 2019 Clean Water and Storm Protection Fee shall continue to be charged to each parcel within the City to contribute to the costs of the City’s Clean Water and Storm Protection Program. The Fee charged will be increased by

2.62% for Fiscal Year 2024-2025.

2. Use of Revenue. The revenue derived from said Fee shall be used in connection with implementing and enforcing Chapters 3.38 of the Cupertino Municipal Code titled “Clean Water and Storm Protection Fee” and Chapter 9.18 titled “Stormwater Pollution Prevention and Watershed Protection.”

3. Schedule of Charges.
a. Annual fees for each category of property will be assessed and collected as follows:
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Single-Family Residential *
Small (Under 0.13 acre) 38.67$ per parcel
Medium (0.13 to 0.22 acre) 46.95$ per parcel
Large 0.23 to 0.40 acre) 58.75$ per parcel
Extra Large (over 0.40 acre) 112.49$ per parcel
Condominium 1 (1 story) 38.67$ per parcel
Condominium 2+ (2+ stories) 12.67$ per parcel
Non-Single-Family Residential **
Multi-Family Residential 32.64$ per 0.1 acre
Commercial / Retail / Industrial 42.68$ per 0.1 acre
Office 32.64$ per 0.1 acre
Church / Institutional 27.62$ per 0.1 acre
School (w/playfield) 20.08$ per 0.1 acre
Park 7.54$ per 0.1 acre
Vacant (developed) 2.52$ per 0.1 acre
Open Space / Agricultural
* Single-Family Residential category also includes du- tri- and four-plex units ** Non-SFR parcels are charge per the tenth of an acre or portion thereof *** Low Impact Development Adjustment only applies to condominium and non-singlefamily properties.

Land Use Category Fee
no charge
Low Impact Development Adjustment *** 25% Fee Reduction

4. Judicial Action to Challenge this Resolution. Any judicial action or proceeding to challenge, review, set aside, void, or annul this resolution shall be brought within 120 days from the date of its adoption.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 4th day of June, 2024, by the following vote:

Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:
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SIGNED:
________
Sheila Mohan, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Kirsten Squarcia, City Clerk
________________________
Date
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EXHIBIT A

ENGINEER'S REPORT

ASSESSMENT OF FEES FOR STORM DRAINAGE PURPOSES

NONPOINT SOURCE POLLUTION PROGRAM
A. Program Description and Purpose
The purpose of this assessment is to collect fees to fund the City of Cupertino's Nonpoint Source Pollution Prevention Program mandated by the Environmental Protection Agency (EPA) and the Clean Water Act. Regulations by the EPA and the State of California require cities to take specific actions to eliminate or control pollutants in waters of the State.

The term "nonpoint source pollution" represents a process whereby pollutants, debris, trash, sediment, and chemicals which accumulate on streets, in neighborhoods, at construction sites, in parking lots, and on other exposed surfaces are washed off by rainfall and carried away by stormwater runoff (via city drain inlets and pipes installed for flood control) into local creeks and the San Francisco Bay. Sources of these pollutants may include automobile exhaust and oil, pesticides, fertilizers, eroded soil, detergents, pet waste, paint, litter, and other material carried through the City's storm drainage system without treatment directly to the Bay. Many of these pollutants are hazardous to aquatic and human life.

The City of Cupertino has implemented several mandated and pro-active programs to mitigate this problem. Among other activities, these programs include an illegal storm drain discharge investigation and elimination complaint response program; scheduled proactive inspections of outdoor housekeeping practices at business sites within the City; sweeping of residential and commercial streets; installation of trash capture devices and curb drain inlet screens to prevent litter from entering the City's storm drainage system; inspection and cleaning of storm drain structures and trash capture devices; public education and engagement with teachers and students, educational activities offered at City events; and a popular, unique, and well established District-wide third-grade creek education & field trip program led by the City's naturalist at McClellan Ranch Preserve and Stevens Creek. 552
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The San Francisco Bay Regional Water Quality Control Board (Water Board) approved the first Municipal Regional Permit (MRP) on October 14, 2009, and, on November 18, 2015, adopted the second regional permit (MRP 2.0) with additional requirements that became effective on January 1, 2016. A further update and reissuance (MRP 3.0) were adopted by the Regional Water Quality Control Board and became effective on July 1, 2022. The MRP was issued to the City of Cupertino and 75 agencies or co-permittees which discharge storm water through municipal drainage systems to local creeks and the San Francisco Bay. The City of Cupertino and 14 other co-permittees in Santa Clara County are members of the Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP) which works collaboratively to maintain compliance with MRP 3.0. In addition to conducting local activities, City staff work closely with the other SCVURPPP jurisdictions to implement pollution prevention, source control, monitoring, and educational programs.

B. Recent Notable Activities
In FY 2019-2020, the Nonpoint Source budget was increased to accommodate a new street sweeping contract, enhanced assessment and maintenance of aging structures, and additional staff to clean and maintain the city’s storm drain system. The City’s storm drain system consists of 2092 drain inlets and 90 miles of storm drainage pipes. Of the drain inlets 181 are fitted with full trash capture devices and 283 have curb screens. An additional 19 full trash capture devices will be added during FY 23-24. Maintenance of these assets includes twice per year cleaning of inlets and trash capture devices which protects the city from flooding while preventing stormwater pollution. In FY 23-24, an equivalent total of 5.87 full time employees are included in the Nonpoint Source program budget distributed across 23 positions with varying allocations of each person’s time. This represents a slight increase from the previous fiscal year because in 2023 the Environmental Programs Division absorbed the Sustainability Division, which triggered a reorganization resulting in shifts to funding allocations. Most notably, one part-time staff went through an internal recruitment process to become a full-time Environmental Compliance Technician to meet the increased demands of MRP compliance and to accommodate succession planning. The part-time position has been eliminated, and other minor shifts in funding allocations will take effect in FY 24-25. One maintenance worker is covered at 100%, and the remaining positions are allocated at between 2% - 60%.
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C. Estimated Expenditures
The total amended budget to implement the required programs described above for FY 23-24 was approximately $2,554,669.

The breakdown of past actuals, current actuals as of Q3, and budgeted expenses for FY 24-25 are as follows:

FY 22-23
Actuals
FY 23-24 Q3
7/1/2023 –
3/31/2024
FY 24-25
Requested
Budget
Staffing $880,287 $575,108 $805,035
Materials $67,561 $52,604 $76,021
Contract Services $313,347 $303,909 $415,570
Allocations $332,864 $259,607 $598,995
Cost Share & Rebate
Programs
$9,159 $12,290 $10,707
Special Projects $12,161
Fixed Asset
Acquisition
$128,895
Total Expenses $1,615,378 $1,332,415 $1,906,328
Expected Final $2,228,113
Activities undertaken within the Nonpoint Source program for permit compliance:

Countywide Program
SCVURPPP Program Assessment - Regional Permit Implementation Regional Watershed Monitoring (administered by EOA, Inc.1) State NPDES2 Permit Fees
Countywide Public Education and Municipal Staff Training CA Stormwater Quality Association (CASQA) Participation County Policy Development
Operations and Maintenance

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Catch Basin and Frequent Trash Capture Device Cleaning
Installation of Trash Capture and Retractable Screen Devices On-call Emergency Spill and Discharge Response
Staff and Equipment to Implement City's Mandated Litter Reduction Plan Street Sweeping
City Public Education Awareness
Public Outreach Materials & Events
Third-Grade Creek Education for Local Schools
Support High School Students' Watershed and Creek Education Support De Anza College and Community Environmental Education
Community Engagement - Creek Cleanup & Watershed Monitoring Events
Staff to Conduct Public Education, Training and Outreach CA Product Stewardship Council membership (Extended Producer Responsibility)
Local Programs
Development, Administration, and Evaluation of Mandated Programs Environmental Impact and New and Redevelopment Review
Rain barrel, rain garden, and landscape conversion rebates Ordinance Revisions
Database Maintenance
Illegal Discharge Complaint Investigation and Enforcement Industrial/Commercial Discharger Inspection Program
Construction Site Inspection Program
Verification of Treatment Measure Maintenance by Private Property Owners
Low Impact Development (LID) and Green Infrastructure Management Litter Reduction Education and Enforcement
City's Participation in Multiple Countywide and Regional Programs Annual Parcel Stormwater Fee Assessment
Other Staffing Costs
Cost Allocations
D. Revenue And Assessment
Revenues generated to fund this program come from two fees assessed on parcels in Cupertino. The Storm Drain Fee was established in 1992. Revenues 555
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from that fee are inadequate to meet the expenses associated with maintaining the storm drain system in Cupertino and ensuring compliance with the MRP, so the Clean Water and Storm Protection fee was established in 2019 and first appeared on 2019-2020 property tax bills. As assessed on the 2023-2024 tax roll and direct billed, the revenue from the two fees will total approximately $1,500,500.

FY 23-24 Assessed Actuals
1992 Storm Drain Fee $375,583.28
2019 Clean Water and Storm Protection Fee $1,124,917.20 Total Assessed $1,500,500.48
1992 Storm Drain Fee
Fees are based on a factor calculated from the City's Master Storm Drain Study runoff coefficients and average area of impervious surface per acre based on type of land-use development. The factor for each category is based on a comparison to an average residential parcel assigned a factor of one.

Certain parcel-owners such as schools and government entities were exempt from such fees in 1992 and as such are not assessed this fee.

The fee assessed on the 2023-2024 tax roll totaled $375,583.28. Those fees were applied to 16,616 residential, commercial, and vacant or recreational use parcels.
2019 Clean Water and Storm Protection Fee
The Clean Water and Storm Protection Fee is imposed on properties that shed water, directly or indirectly, into the City’s storm drainage system, and is calculated to be proportionate to the amount of stormwater runoff contributed by each parcel, which is in turn proportionate to the amount of impervious surface area. The details of the methodology are described in the Fee Report as prepared by SCI Consulting Group (SCI) in February of 2019 that is attached to the Clean Water and Storm Protection fee ordinance. The calculations are 556
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informed by the City’s 2018 Storm Drain Master Plan, which includes an analysis of the percentage of impervious area for Cupertino, and rates are further calculated by parcel size and land use category. Unlike the 1992 fee, the 2019 Clean Water and Storm Protection fee is subject to treatment under prop 218 and as such all parcels are assessed the fees without exemptions for parcelowners such as schools and government entities.

The fees assessed on the 2023-2024 tax rolls totaled $1,031,331.30. Those fees were applied to 16,597 parcels in fourteen categories including single-family residential parcels in four sizes, condominiums, and apartments, commercial, office, institutional, recreational, and vacant. Fees billed directly to parcelowners that do not receive property tax bills (such as schools and government) totaled $93,585.90 applied to 71 parcels.

The total revenue from the Clean Water and Storm Protection fee for 2023-2024 is $1,124,917.20.

For both of the fees, in coordination with the City’s contracted consultant for this purpose, each parcel was identified, and a fee established in a separate report submitted to the County entitled Certification of Special Assessment Annual Enrollment which lists the APN and associated fee. The consultant used by the City, SCI, prepares both forms and submits them to the County in accordance with the annual deadline in early August so that the fees can appear on the property tax bills. Additionally, SCI staff are available to answer questions via a phone number provided on the tax bill.

D. Annual Review
The 2019 Clean Water and Storm Protection Fee included annual review requirements beginning with FY 2020-2021 as described in ordinance 19-2183 (Chapter 3.38 of the Cupertino Municipal Code). Section 3.38.040 describes the review process and allows for an annual increase based on the change in CPI as of December each year, up to 3% maximum, if actual additional costs are incurred.

The expenses attributed to the Nonpoint Source Program through third quarter of FY23-24 are $1,207,482 and are projected to reach $2,228,113 by the end of the fiscal year. That expected total is about $326,586 below the approved budget for FY23-24; however, it is above expected revenue by approximately 557
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Resolution No. __________________
$729,912. Available balance in Fund 230 is sufficient to make up the difference for FY22-23.

The intention of the fee assessments is only to cover costs and not accrue a balance, however several factors resulted in fund balance accruing. In 2019, before the Clean Water and Storm Protection Fee ballot measure passed, a General Fund subsidy had already been budgeted and transferred that was ultimately not needed. In FY19-20 the program came in under budget largely because true staffing cost allocations had not yet been applied, something that was corrected for FY20-21. In FY20-21 a storm drain video and repair project was anticipated at $248,436, but no acceptable bids were received for that project and then it was not conducted in FY21-22 either. An outfall survey is being conducted in FY 23-24 to inform needed repair planning, but at less than the full budgeted amount. In FY 23-24 a rover camera was acquired for $128,895 that will avoid contract expenses in future for drain video services. The fund 230 balance was $ 1,220,134 at the beginning of FY23-24. After covering the shortfall from the projected expenditures from FY23-24, the remaining balance in Fund 230 at the end of the fiscal year is expected to be approximately $492,521 heading into FY 24-25. The requested budget for FY 24-25 totals $1,906,328. With anticipated revenue at $ 1,500,500, that indicates a projected shortfall of an estimated $429,089. That shortfall will not exhaust the remaining fund balance in Fund 230, however there are expected increased costs to street sweeping under a new agreement and anticipated outfall repairs, meaning that an increase to the Clean Water and Storm Protection fee is now recommended to reduce the draw upon the General Fund to cover the difference. A 2.62% increase to the 2019 Clean Water and Storm Protection fee would mean an increase of $1.20 per year for residents in the most common size of residential property. The increase would generate approximately $29,473 per year additional revenue for the program.

A full year of expenses and revenues for the Nonpoint Source Program were audited under the City’s annual external audit and reviewed by the City’s Audit Committee. An additional Agreed-Upon Procedures (AUP) audit specific to the Nonpoint Source Program was developed to further assess this program using a calendar year cycle. An additional Agreed-Upon Procedures (AUP) Audit, specific to the Nonpoint Source Program, was developed to further assess this program using a calendar year cycle, which will be completed for calendar year 2022 and 2023 with no expected exceptions noted.

The final AUP reports will be available to the public late June. The City requests 558
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Resolution No. __________________
preparation of calendar year AUPs for the stormwater program in order to provide more up to date findings to the City Council for review during this annual process, which must happen prior to the normal fiscal year cycle in order to meet County tax roll deadlines.

Chad Mosley
Director of Public Works/City Engineer
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Attachment C
ORDINANCE NO. 19- 2183
AN ORDINANCE OF Tlill CITY COUNClL OF THE CITY OF CUPERTlNO ADDING CHAPTER 3.38 OF THE MUNICIPAL CODE TO ESTABLISH THE

CLEAN WATER AND STORM PROTECTION FEE
WHEREAS, the City of Cupertino («City") oversees and manages a municipal separate stonn sewer system (''MS4"), which includes making capital improvements, overseeing maintenance and operations, and conducting activities to ensure compliance with all state and federal regulations associated with the Clean Water Act and the City's National Pollutant Discharge Elimination System ("NPDES") pennit; and
WHEREAS, the City's MS4 is made up of a comprehensive drainage infrastructure system that includes man-made drainage elements such as curbs and gutters, ditches, culverts, pipelines, manholes, catch basins (inlets) and outfall structures; and WHEREAS, the City, through its MS4, provides storm drainage services ("Services") that include, but are not limited to, collecting, conveying, protecting, treating, and managing storm water runoff from improved parcels within tbe City; and 'WHEREAS, in 1992, the City adopted a $12 per residence storm drain service charge to conserve and protect the MS4 from the burden placed on it by the increasing flow of nonpoint source runoff and to otherwise meet the requirements of the Clean Water Act, EPA regulations and the City's NP DES pennits, which charge has not been increased since its inception; and WHEREAS, the City does not currently have adequate funding to fully finance the system needs of its MS4, and in order to finance the infrastructure, maintenance, and regulatory oversight of the MS4 and the provision of services, the City Council has determined that there is a need to adopt an additional fee ("Clean Water and St01m Protection Fee"), in compliance with Article XIIID of the California Constitution (Proposition 218), to cover the costs associated with capital improvements, operations and maintenance, and regulatory compliance needs of the MS4; and WHEREAS, on March 5, 2019, the City Council approved the Fee Report for the 2019 Clean Water and Stonu Protection Fee Report ("Fee Report") that sets forth the basis and the amount of the Clean Water and Storm Protection Fees on various parcels of land in order to finance, in compliance with Article XIIID of the Constitution, the clean water and storm protection program needs and is attached hereto as Exhibit A; and
WHEREAS, the City Council on March 5, 2019 adopted Resolution No. 19-022 initiating proceedings in accordance with Article XIIID of the Constitution, approving the Fee Report, and setting the date of May 7, 2019 for a public hearing and directing the mailing of a notice to the owners of real property affected by the proposed Clean Water and Stonn Protection Fee, which included a description of the proposed Clean Water and Storm Protection Fee, the amount to be charged, the total amount to be collected, and the right of property owners to protest the Clean Water and Storm Protection Fee;and
WHEREAS, the City Council on March 5, 2019 adopted Resolution No. 19-023 establishing procedures for conducting a baUot proceeding in accordance with Article XIIID of the Constitution; and
WHEREAS, the Clean Water and Storm Protection Fee is a property-related fee, subject to Proposition 218.
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·wHEREAS, the City mailed i1otices of a public hearing on March 19, 2019 and conducted said public heming on May 7, 2019 and heard testimony from residents and property owners regarding the proposed Clean Water and Stonn Protection Fee, and a majority protest was found not to exist; and
WHEREAS, the City Council introduced this Ordinance on May 7, 2019, after a duly noticed public hearing; and
WHEREAS, Article XIIID of the Constitution requires that the property-related fees defined in the Fee Report and included in this Ordinance shall not be imposed unless and until that fee is submitted and approved by a majority vote of the property owners of the properly subject to the Clean Water and Storm Protection Fee· and
WHEREAS, upon introduction of this Ordinance, tbe City Council will direct that it be submitted to the affected property owners in a mail ballot proceeding in accordance with Article XIIID of the Constitution, Sectioh 53 755 .S of the Government Code, and City of Cupertino Resolution No. 19- 023 .

NOW, THEREFORE, the Cow1ciJ of the City of Cupertino does ordain as follows:

SECTION ONE - Chapter 3.38 of the Cupertino Municipal Code is hereby established to read as follows:

3.38.010 Purpose of the Fee-Limitation of Use.

A. The purpose of the Clean Water and Storm Protection fee is to conserve and protect the City's essential values of maintaining our aging stotm drainage infrastructure, e11couraging groundwater replenishment, and maintaining a sustainable environment in accordance with tbe Clean Water Act, EPA regu1ations and the City's NPDESpermits.

B. The specific purpose of the Clean Water and Storm Protection fee established pursuant to this chapter is to derive fee revenue which shall only be used for the 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 pennits, 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, ahd for any other purpose set forth in Section3.38.160.

C. The Clean Water and Storm Protection fee is imposed pursuant to Articles XIll C and D of the California Constitution, Government Code Sections 38900 - 38901 and 53755 - 53756, and Health and Safety Code Section 5471 - 5473.11 .

D. Proceeds frotn the Clean Water and Storm Protection. fee will be deposited in the "environmental management / clean creeks fund" created by Section 3.36.170 of Chapter 3.36 of the Municipal Code (Stonn Drainage Service Charge) as the "stonn drainage service charge fund" and subsequently rnnan1ed, and may be comingled with the revenues of the City's storm drainage service charge because they are authorized to be used for th.e same purposes.

3.38.020 De6nitions.

Except where the context otherwise requires, the following definitions in this section shall govern the construction of th.is chapter:
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A. "City" means and includes all territory lying within tbe municipal bounda1ies of the City of Cupertiuo as presently existing plu all Le1Tit01y which may be added thereto duting the effect term of the ordinance codified herein.

B. "Condominium" means a parcel that is an individually-owned single residential ll.llll attached to an undivided or joint ownership of the remaining pmtion of the property. The ·•condominium 1 ' category refers to a condominium complex where each residential unit has no other units above or below it. The ''Condominium 2+' refers to a condominium complex where residential units are built above or below other reside1ltial wJits.

C. "Director of Public Works" means the Di.rector of Public Works and his/her duly authorized agents and representatives.

D. "Fee Repo1t'' means the report prepared by SCI Consulting Group dated February 2019 which was approved by the City Council on March 5, 2019 in Section 2 of Resolution No. 19-022. The Fee Repoli sets forth the rate structure and methodology of apportionment of the fee to variouscatego1ies of parcels and shall be the basis for the Clean Water and Stenn Protection Fee.

E. "Director of Administrative Services" means the Director of Administrative Services of the City of upertino and his/her duly authorized agents and representatives.

F. "Impervious Area" means any part of any parcel that bas been modified by the action of any person in a manner which reduces the land's natural ability to absorb and hold storm and surface water.

This includes, but is not limited to, activities such as: grading of property, the creation of any hard surface area which either prevents or retards the entry of water into the soil mantle, or the hardening of an existing surface which causes water to flow at an increased rate. Common impervious areas include, but are not limited to, roof tops, walk-ways, patios, driveways, parking lots or storage areas, concrete or asphalt paving, gravel roads, or any cleared, graded, paved, graveled, or compacted surface or paved earthen materials used for vehicular travel, or areas covered with surfaces which similarly impede the natural infiltration of surface water into soil mantle. Impervious area can be expressed as a percentage of a parcel's total size.

G. "Maintenance and operation" means the administration, operation, maintenance and repair of any facility in the City's storm drain system, including, but not limited to:

1. Items ordinarily recognized as capital items (e.g., acquisition of interests in land) when reasonably necessary to support operations;

2. Street sweeping, catch basin cleaning, and capture and removal of trash from the storm drain system;

3. Replacement ofpo1tions of existing facilities damaged or destroyed as a result of accident or natutaJ disasters or found to be of inadequate size or condition;

4. Damages or settlements paid in the course of, or because of, threatened or actual legaJ actions related to the City's stonn drain system or non-point sourceprogram;

5. Regional monitoring, pennit fees public educatfon and awareness programs regarding the City's stom1 drain system and the City's nonpoint sourceprogram;

6. Management of the City's non-point sow-ce-program including, but not limited to, BMP manuals, public outreach, printed materials, City staff and legal costs relatedthereto. 3 562
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H. ''Multi-Family Residential" means parce1s improved or used for a residence for .five or more families liviJ1g independently of each other and doing their own cooking and which is llOt separately assessed by the county tax assessor for each such family dwelling. This term is synonymous witb "apartment."
I. "Open Space" means laud that is substantially in a natural condition and includes agricultural or other lands that demonstrate storm water absorption equal to or greater than natural conditions.

J. "Parcel" means a wtit of land which is designated by the tax assessor of Santa Clara County for property tax purposes.

K. ''Rate Category" means a group of parcels that are of similar imperviousness characteristics and are charged the same rate. Si11gle-Family Residential Parcels are categorized by size; Non-SiugleFarn:ily Parcels are categorized by impervious percentage ranges.

L. "Single-Family Residential" means parcels, other than multi-family parcels, improved or used solely as a residence for one, two, three or four fruu.ilies living separately in separate dwelling units.

M. "Storm drainage system" means any pipe, conduit, or sewer oftbe City designed or used for the collection, conveyance and management of storm and surface waters and drainage including unpolluted cooling water and unpolluted industrial process water but excluding any community sanitary sewer system.

N. "Vacant (developed) means a parcel which bas been altered from its natural condition through grading or compaction activity or .in another manner which reduces the land's natural ability to absorb and hold storm and surface water without any stmctw-e existing upon it.

3.38.030 Determination and Imposition of Fee for Fiscal Year 2019-20.

For purposes specified in Section 3.38.010 the Clean Water and Stonn Protection fees established pursuant to thls chapter are hereby prescribed and imposed, and shall be paid to and collected by the City, for services and facilities furnished by the City in connection with its stonu drainage system to or for each parcel whlch is benefited directly or indirectly by said storm drainage system or aby part thereof, or from which any storm water is conveyed or discharged directly or indirectly into the stonn drainage system. Said fee is imposed annually and will be assessed and collected as follows:

A. Single-Family Residential Class
Category Parcel Size (acres) Annual Fee per Parcel
SmaU Under 0.13 $36.58
Medium 0.13 to 0.22 $44.42
Large 0.23 to 0.40 $55.58
Extra Large Over0.40 $106.42
Condominium 1 Na $36.5&
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I Condominium 2+ Na $1 l .99
B. Non-Single-Family Residential Class
I Category' Annual Fee
per0.10 Acre
of Pare l Size2
Multi-Family $30.88
Commercial / Retail / Industrial $40.38
Office $30.88
Church/ lnstitutional $26.13
Schoo} with play field $19.00
Park $7.13
Vacant (developed) $2.38
Rate Strncture Notes:
l. The Rate Category for any Non-Single-Family parcel shall be assigned by the description of the land use of the parcel. For Non-Single-Family land uses that do not fit the descriptions in Table 5 of the Fee Report (for example, mixed use parcels), the rate with the nearest percent impervious area shown in Table 5 of the Fee Report shall be assigned to a parcel.

2. Non-Single-family fees are calculated in 0.1-acre increments. For example, an office parcel is charged at $30.88 for each tenth of an acre or portion thereof.

C. Non-single-family parcels and condominium parcels that comply with the version of Provision C,3 (New Development and Redevelopment Requirements) of the City's NPDES permit that is applicable at the time of building permit issuance shall have their fees reduced by 25% in recognition of the reduced impact on the City's storm drainage system inherent in C.3 compliance, as documented in the Fee Report (Low Impact Development Rate Adjustment). Other single-family residential parcels do not qualify for this rate reduction. C.3 compliance will be determined on a case-by-case basis by the Director of Public Works, who may also establish procedures to verify and validate such compliance on a peiiodic basis.

D. For non-single-family residential parcels that have both improvements and significant open space areas (described in the Fee Report as "hybrid parcels'), the chargeable acreage shall be adjusted downward in recognition that the open space areas do not increase the need for the fee. 5 564
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e. Open space and agticultural parcels are not subject to the Clean Water and Stonu Protection fees.

3.38.040 Annual Review of Fee.

Commencing with FiscaJ Year 2020-21, the City Council shall, by xesolution, annually determine the Clean Water and Storm Protection Fee in accordance with the following:

A. In no event shall the rate for any category of property be increased beyond the rate approved by a majority vote of property owners subject to the Clean Water and Storm Protection fee. Commencing in Fiscal Year 2020-21 , the amow1t of the Clean Water and Storm Protection Fee may be increased by an amount equal to the change in the Conswner Price Index for all Urban Consumers for the area including Santa Clara County (the "CPI'), including all items as published by the U.S. Bureau of Labor Statistics as of December of each succeeding year, uot to exceed a maximum increase of three percent (3%) in any single year, Adjustments will only occur if actual additional costs areincurred.

B. The Clean Water and Stonn Protection fee shall not be deemed to be increased iu the event the actual fee upon a parcel in any given year is higher due to a change in use of the subject parcel or an increase in tbe amount of the impervious area of the subject parcel.

C. In any year in which the City Council does not change the Clean Water and Storm Protection fee rate, pursuant to the voter-approved CPI allowable annual increase, the previously adopted fee shall continue in full force and effect for the next fiscal year.

D. The City Council shall not be required to enact a CPI increase each year. 3.38.040.A.

3.38.050 Various Actions.

Without a vote of the property owners, in any year the City Council may do any and all of the following: (a) discontinue the Clean Water and Storm Protection fee; (b) reduce the rate for all parcel categories; or ( c) increase the rate up to or below the maximum voter-authorized rate if it has been previously set below such rate.

3.38.060 Effective Date of Fees.

The Clean Water and Sto1m Protection fees shall become effective on July 1, 2019.

3.38.070 Fees Collected with General Taxes.

A Subject to the exceptions hereinafter set forth, the City elects, as an alternative procedure for the coUection of Clean Water and Stonn Protection. fees prescribed or imposed by the provisions of this chapter, to have all such Clean Water and Storm Protection fees for each ii.seal year collected on the tax roll in the same manner by the same persons and at the same time as, and together with and not separately from, its general taxes.

B. The Director of Public Works is hereby directed to prepare and file with the City Clerk, on or before the fifteenth day of June of each year, or such other date or dates as the City Council may specify by resolution, a written report containing a description of each and every parcel of real property receiving the benefit of the stonn drainage system mentioned in this chapter, except for those parcels the fees for which ar-e not to be collected on the tax roll, and the amount of the Clean Water aud Sto1m Protectionfees 6 565
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for each parcel for the forthcoming fiscal year, computed in confonnity with the fees prescdbed by the provisions of th.is chapter.

C. The City Clerk sllall cause notice of the filing of said report and of a time and place of hearing thereon to be published, prior to the date for hearing, in a newspaper of general circulation printed and published within the ity. The publication of said notice shall be once a week for two consecutive weeks. Two publications in a newspaper published once a week or more often, with at least five days intervening between the respective publication dates. not c w1ting such publication dates, are sufficient.

The period of notice commences upon the first day publication and terminates at the end of the fourteenth day.

D. At the time stated in the above-mentioned notice, the City ouncil sha ll bear and con ider all objections or protests, if any, to the report refen-ed to in said notice, and may continue the bearing from time to time. Jf the Council finds that protest is made by owners of a majority of separate parcels of prope1ty described in the report, then the report shall not be adopted, and fees shall be collected separately from the tax roU and shall not constitute a lien against any parcel orparcels.

E. Upon the conclusion of the hearing, the City Council may adopt, revise, change, reduce, or modify any fee or ovenule any ot all objections and shall make its detenuination upon each fee as described in said report, which detemlination shall be final.

F. l. On or before the first day of August of each year following such fina l detennination, the ity Clerk shall file with the Finance Director a copy of the report with a statement endorsed thereon over the City Clerk's signature that it has been fina lly adopted by the CityCouncil.

2. The Finance Director shall thereupon cause said fees to be placed on the prope1ty tax roll and collected by the County for the City, as hereinafter provided. The County's tax collector shall enter the amounts of tbe fees against the respective parcels as they appear on the cunent assessment roll. If the property is not described on the roll, the County's tax collector may enter the description thereon, together with the amounts of the fees as shown in the report.

G. The amount of the fees shall constitute a lien against the parcel against which the fee has been imposed as of noon on the first M011day in March immediately preceding the date of the levy.

H. The tax collector shall include the amount of the fees on bills for taxes levied against the respective parcels. Thereafter the amount of the fees shall be coll ected at the same time and in the same manner and by the same persons as, together with and not separately from, the general taxes for the City and shall be delinquent at the same time and thereafter be subject to the same delinquency penalties. l. All laws applicable to the levy, collection and enforcement of general taxes of the Cjty including, but not limited to, those pertaining to matters of delinquency, collection cancellation, refund and redemption, are applicable to such fees .
.I. The tax collector may, at the tax collectors discretion, issue separate bills for such fees and separate receipts for collection on account of such fees.

K. If any parcels receiving benefit from the sto1m drainage system are omitted from the abovementioned report or said tax roll, either because the fee therefor shalJ not have yet been ascertained by the City as of the date of said report, or for any other reason, the Clean Water and Storm Protection fee for such parcels shall be collected in the manner provided elsewhere in this chapter. If the fee for any parcels, as shown on said report for the forthcoming fisca l year, should be less than what should bethe 7 566
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fee therefor under the provisiolls of this chapter, the balance of such fee shall be collected in the manner provided elsewhere in this chapter. If, however, the fee for any parcels shown in the report and collected on Lh e tax roll should exceed the oon-ect fee for such parcels for the fiscal year, the Finance Director shall refund the excess amount so collected.

3.38.080 Payment of Balance of Fee.

A. lf the fee for any parcels placed on the tax roll, or for any parcels collected based upon billing, was less tban what should be the fee therefor under the provisions of this chapter due to en·or, the balance of said fee shall be collected by a bill or invoice based on a detailed statement showing the basis of the calculations, the location of the parcels and other relevant information, and prepared on or after January 1st for the preceding six months from July to December during which a discrepancy between the amouot collected and tbe conect fee is discovered, and on or after July 1st for the preceding six months from January to June during which such a discrepancy is cliscovered. The Finance Director shall mail said bill or invoice to the person or persons listed as the owners of the parcels on the last equalized assessment roll of the County at the address shown on such assessment roll or to the successor in interest of such owner if the name and address of such successor in interest is known to the Finance Director.

Failure to mail any such bill or invoice, or failw-e of any owner to receive any such bill or invoice shall not excuse the owner of any parcels from the obligation of paying the balance of any Clean Water and S tonn Protection fee for any parcels owned by him or her.

B. The interested owner may, at any reasonable time, review the detailed statement prepared by the Finance Director.

C. The balance of the Clean Water and Stonn Protection fee for such parcels shall be due and payable on the date the bill or invoice referred to in this section ismailed.

3.38.090 Collection of Fees Omitted from Tax Roll-Billing.

A. The Finance Director shall semi-annually, on or after July 1st, prepare or cause to be prepared a detailed statement containing the basis ofthe calculations, the location of the parcels and other relevant information, showing the total monthly fee for the preceding six months from January to June and on or after January 1st, for the preceding six months from July to December for any parcels the fee for which should be collected on the tax roll pursuant to Section 3.38.070A but was omitted from the reportrefen-ed to i.11 Section 3.38.070B, or parcels the fee for which is collected pursuantbilling.

B. An invoice may be rendered for a period of less than six months if the commencement dateof fees is other than July 1st or January 1st, as may be the case with newaccounts.

C. On the basis of the statement, the Finance Director shall prepare a bill or invoice showing the total fee for such six months or less, and shall mail said bill or invoice to the person or persons listed as the owners of the parcels on the last equalized assessment roll of the County at the address shown on such assessment roll, or to the successor in interest of such owner if the name and address of such successor io interest is. known to the Director. Failure to mail any such bill or invoice, or failure of any owner to receive any such bill or invoice shall not excuse the owner of any parcels from the obligation of paying any Clean Water and Storm Protection fee for any parcels owned by bim or her.

D. The interested owner may, at any reasonable time, review the detailed statement prepared by the Finance Director.
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B. The Clean Water and Storm Protection fee for such parcels shall be due and payable immediately upon receipt of the bill or invoice refened to in this section.

3.38.100 Payment ofFees-Owne1· Responsibility.

The owner of any parcel is and shall be responsible for payment of any and all Clean Water and StomJ Protection fees applicable to parcels owned by him or her. It shall be and is hereby made the duty of each such owner to provide to the Finance Director information sufficient to calculate the land atea of the parcels within thirty days after request of the Finance Director and ascertain from the Finance Director the amount and due date of any such fee applicable to parcels owned by such owner and to pay such fee when due and payable. It also shall be and is hereby made the duty of all owners of all parcels to infonn the Finance Director immediately of all circumstances, and of any change or changes in any circumstances, which will in any way affect the applicability of any fee. In pa1ticular, but oot by way of limitation, an owner of any parcel shall immediately inform the Finance Director of any sale or transfer of such parcel by or to such owner.

3.38.110 Payment of Fees-Location.

Except as otherwise provided elsewhere in this chapter all Clean Water and Storm Protection fees shall be payable at the office of the Finance Director in the City Hall of the City.

3.38.120 Payment of Fees-Delinquency Date.

Except as otherwise provided elsewhere in this chaptei- eacb Clean Water and Stonn Protection fee shall be deUnquent if not paid on or before the fortieth day immediately following 'the date upon which such Clean Water and Stonn Protection fee became due and payable.

3.38.130 Penalty for Delinquency.

Except as otherwise provided elsewhere in th.is chapter, whenever any Clean Water and Storm Protection fee becomes delinquent, there shall be imposed a penalty equal to one hundred percent of the amow1t as set forth under Section 3.38.030.

3.38.140 Disputed Fees.

If any owner disputes the amount of the fee in any bill or invoice, the owner shall, within thirty days from and after the date such bill or invoice is mailed, and no later, file a claim with the Finance Director accompanied by detailed supporting factual data in support of the claim. lt shall be the duty of each such owner to prove to the Finance Director, that such fee is in error and the COffect amount thereof. lf the finance Director detetmines that the bill or invoice was in error, the Finance Director shall correct said bill. Failure to dispute the amount of the fee in accordance with this section shall be deemed acceptance of the correctness of the fee.

3.38.150 Fiscal Accountability
A The City shall retain an independent auditor to conduct an annual audit of the Clean Water and Stonn Protection Fee and environmental management/ clean creeks fund as part of its comprehensive annual financial report. The auditor shall include an accotuiting of the revenue received from the fee and expenditures thereof in the audited financial statements. The auditor's report shall be presented to the City Cou cil and made available to the public. The Director of Adminish·ative Services or the Director of Public Works shall prepare and present to the City CounciJ an annual report in conjunction withthe 9 568
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annual audjl that reviews the status and perfonnance of the programs, services and projects fonded wholly or paitially with proceeds of the Clean Water and Stom1 Protection Fee.

B. The City Council shall either select a citizen's oversight committee or assign oversight duties to a pre-ex.isling oversight committee to review and report annually on the receipt of revenue and expenditure of funds from the stom1 drainage service charge fund authorized by this chapter.

3.38.160 Special Fund-Restricted U e of Revenues.

A All revenues collected pursuant to the provisions of this chapter shall be placed into a special fund, which is known as the "environmental management/ clean creeks fund," created by Section 3 .36.170 of Chapter 3 .36 of the Mumcipal Code (Stonn Drainage Service Charge). Such revenues may be used for the purpose specified in Section 3.38.010, and for no other purpose; provided, however, that moneys deposited in the fund may be used for direct and administrative costs of the City in collecting the Clean Water and Storm Protection fees imposed by this part and for direct and indirect overhead costs of the City in perfomJing any tasks, including, but not limited to, calculation of the benefits received by prope1ties from the stonn drainage system.

B. As used in this section, • direct costs'' means wages and salaries a11d costs of employee fringe benefits incurred by the City, aud mileage reimbw-sement attributable to said collection activities. As used in this section, "admi.n.istrative costs" includes, but is not limited to all costs for computer service, materials, postage, supplies and equipment.

C. Notwithstanding subsections 3.38.160A and 3.38. l 60B interest on revenues in the environmental management / clean creeks fwid may be credited to the general fund of the City or to any other fund in the discretion of the City Council.

3.38.170 Refunds.

Whenever any refunds should become owing by virtue of any relief granted by the City Council pursuant to the provisions of Section 3.38.140 or by virtue of any error made in ascertaining the fee applicable to any parcels, the Finance Director is authorized to make such refunds and to expend for such purpose the moneys in the environmental management/ clean creeks fund. Notwithstanding the provisions of Section 3.38.140, any claim for refund for fees collected under Section 3.38.070 must be made within one yeru· after the date bills for ta es are received by the owner. The City shall not be liable for interest or any amount determined to be refundable.

3.38.180 Inspection of Parcels Authorized.

The Director of Public Works, the Finance Director and their authorized representatives are hereby given power and authority to enter upon and within any parcels to ascertain the nature of such parcels; to inspect, observe, and review the benefit received from the storm drain system as may be allowed by law.

3.38.190 Payment of Delinquent Fees-City Enforcement Powers.

A. Notwithstanding other remedies, in the event of the failure of any owner to pay when due any Clean Water and Storn1 Protection fees applicable to parcels owned by such owner, the City may enforce payment of such delinquent fees by instituting action in any cowt of competent jurisruction to collect any fees wluch may be due and payable in the same manner as any other debts owing to the City may be collected.
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B. Any and aJI delinqueut payments may be placed on the ta · roll, and collected with properly tax.es, as provided in Section 3.38.070.

C. Such other action may be taken as may be authorized by law and by the CityC0tmcil.

D. Remedies under this secti011 are in addition to and do not supersede or limit any and all other remedies, civil and criminal.

SECTION TWO - CEQA EXEMPTION
The City Council finds, based on its own independent judgement, that the proposed amendments to the Cupertino Municipal Code are statutorily exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080(b)(8) and CEQA Guidelines 15273(a) - Rates, Tolls, Fares, and Charges and categorically exempt pursuant to CEQA Guidelines Section 15301 . A Notice of Exemption will be filed with the County Clerk.

SECTION THREE - INCONSISTENCIES REPEALED
This Ordinance is intended to be controlling on the authority to establish the Clean Water and Storm Protection fee, and shall supersede all prior ordinances, resolutions, rules or regulations that in conflict wherewith. Any provision of tJ1e Cupertino Municipal Code, or appendices thereto, or any other ordinances of the City inconsistent herewith, are repealed only to the extent of such inconsistencies a11d no further.

SECTION FOUR-™-PLEMENTATION
The City Manager is hereby authorized and directed to take any action and sign any documents necessary to implement this ordinance.

SECTION FIVE - SEVERABil,ITY
If any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held by a court of competent jurisdiction to be invalid, such a decision shall not affect the validity of the remaining po11ions of the Ordinance. The Council of the City of Cupertino hereby declares that they would ha e passed this Ordinance and each section or subsection, sentence, clause and phrase thereof, irrespective oftbe fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid.

SECTION SIX-EFFECTIVE DATE· PlJBLICATION.

The City Clerk is directed to post and publish this ordinance in accordance with law in a newspaper of general circulation printed and published in the County of Santa Clara, or as otherwise required by law.

This ordinance shall take effect as provided by Government Code Section 36937. 11 570
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INTRODUCED at a regular meeting of the City Council of the City of Cupertino on the 7u, day of May 2019 and enacted al a regular meeting of the City Council of the City of Cupertino after certification of the ballot results on the 161h day of July 20]9.

Members of the City Council:

AYES:

NOES:

Schruf, Chao, Paul, Sinks, Willey
None
ABSENT: None
ABSTAIN: None
SI~
l _/ 1~1k.\\~
Steven Scharf, Mayor Date \
City of Cupertino
ATTEST:
6Ai:.9 L,l'))-- &--/1'}_
Date
Grace Schmidt, City Clerk
APPROVED AS TO FORM:
·J~ A ?(3oL {\
Heather Minner, City Attorney Date
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STATE OF CALIFORNIA )
·COUNTY OF SANTA CLARA )

CITY OF CUPERTINO )
I, GRACE SCHMIDT, City Clerk and ex-officio Clerk of the City Council of the City of Cupertino, California, do hereby certify the attached to be a true and correct copy of Ordinance No. 19-2183, which was enacted on July 16th, 2019, and that it has been published or posted pursuant to law (G.C. 40806).

IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16th day of July, 2019.

GRACE SCHMIDT, City Clerk and Ex-officio Clerk
of the City Council of the City of Cupe1iino, California 572
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Attachment B I

CITY OF CUPERTINO

FEE REPORT
2019 CLEAN WATER AND STORM PROTECTION FEE
FEBRUARY 2019
PURSUANT TO THE ARTICLES XIII( & 0 OF THE CALIFORNIA CONSTITUTION, AND THE GOVERNMENT (ODE SECTIONS 38900- 38901 ET AL.

ENGINEER OF WORK:

SCIConsultingGroup
4745 MANGELS BOULEVARD
FAIRFIELD, CALIFORNIA 94534
PHONE 707.430.4300
FAX 707.430.4319
WWW.SCI-CG.COM
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CITY OF CUPERTINO

CITY OF CUPERTINO

CITY COUNCIL
Steven Scharf, Mayor
Liang Chao, Vice Mayor
Darcy Paul, Councilmember
Rod Sinks, Councilmember
Jon Willey, Councilmember

INTERIM CITY MANAGER
Timm Borden

PUBLIC WORKS DEPARTMENT
Roger Lee, Acting Director

ENGINEER OF WORK
Jerry Bradshaw, SCI Consulting Group
2019 CLEAN WATER ANO STORM PROTECTION FEE REPORT
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TABLE OF CONTENTS
INTRODUCTION AND EXECUTIVE SUMMARY .............................................................................. 1 OVERVIEW .......................................................................... .............................. , ..... , ....... 1 CITY1S FACILITIES ............................... .. ........................................................................... 1 STORMWATER FUNDING BACKGROUND ............................................................................ 2 LEGAL REQUIREMENTS OF STORMWATER FEE ................................................................... 2 FACILITIES AND SERVICES ...................................................................................................... 4 FINANCIAL NEEDS AND REVENUE REQUIREMENTS .................................................................... 5 SUMMARY OF CLEAN WATER AND STORM PROTECTION SYSTEM NEEDS ........... , .................. 5 ANNUAL REVENUE REQUIREMENT ..................................................................................... 6 RATE STRUCTURE ANALYSIS .................................................................................................. 7 SINGLE-FAMILY RESIDENTIAL PARCELS AS BENCHMARK ................ .................. ................... 7 NON-SINGLE-FAMILY RESIDENTIAL PARCELS ........................................................ ............. 9 Low IMPACT DEVELOPMENT RATE ADJUSTMENT.. .................................. ........ .. ................ 11 STORMWATER FEE CALCULATION ................................................................................... 12 ANNUAL COST INDEXING ....... , .... , ...... ............................................................................. 14 MANAGEMENT AND USE OF STORMWATER FUNDS .. , ................................................ ......... 14 APPENDICES ....................................................................................................................... 15 APPENDIX A- REGULATORY ASSESSMENT & COST AND REVENUE ANALYSIS ..................... 15 APPENDIX 8-PERCENTAGE OF IMPERVIOUS AREA ESTIMATIONS .......................... ... ......... 28 APPENDIX C- STORMWATER RATES FROM OTHER MUNICIPALITIES ............... , ... , .............. 30

CITY OF CUPERTINO
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LIST OF TABLES
TABLE 1 - SUMMARY OF PROGRAM REVENUES ............................. , .......................................... 5 TABLE 2-SUMMARY OF PROGRAM COSTS ........ , ........... ........................ " .............. , ... .. .. .. .. ...... 6 TABLE 3- ESTIMATE OF ANNUAL REVENUE REQUIREMENT ....................................................... 6 TABLE 4- SUMMARY OF SINGLE-FAMILY RESIDENTIAL PARCELS ............................................... 9 TABLE 5- SUMMARY OF NON-SFR PARCELS ........................................................................ , 10 TABLE 6-Low IMPACT DEVELOPMENT RATE ADJUSTMENT ANALYSIS ..................................... 12 TABLE 7-PROPOSED 2019 CLEAN WATER & STORM PROTECTION FEE SCHEDULE ................. 13 TABLE 8 - PERCENT OF IMPERVIOUS AREA FROM STORM DRAIN MASTER PLAN .......... , ............. 28 TABLE 9- PERCENTAGE OF IMPERVIOUS SURFACE FROM STORM DRAIN MASTER PLAN ............ 29 TABLE 10- RECENT STORM DRAIN BALLOT MEASURES .. ........................................................ 31 TABLE 11 - SAMPLE OF RATES FROM OTHER MUNICIPALITIES ................................................. 32

CITY OF CUPERTINO
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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 20181 the City embarked on a two-phase project to determine the feaslbillty 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 mos! 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 lts clean water program and storm drain matntenance 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 . 2019 CLEAN WATER AND STORM PROTECTION FEE REPORT
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CITY OF CUPERTINO
p
• 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 ---------- FEBRUARY 2019 .ConsuftingGro-up
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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 ih 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
, ~~~ F~re
,Revenue Category 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Storm water Charges $ 370 $ 370 $ 370 $ 370 $ 370 $ 370 Other Revenue $ 9 $ 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.

Category
. :

Clean Water

TOTAL COSTS
TABLE 2- SUMMARY OF PROGRAM COSTS
Shown in thousands
Current Future
18-19 19-20 20-21 21-22 22-23 23-24 TOTAL
$ 477
$ 721
$ 552 $ 569 $ 586 $ 603 $ 622 ,. 891 918 964 994 1,025 4,792 $ 1,197 $ 1,443 $ 1,487 $ 1,550 $ 1,597 $ 1,647 $ 7,724

ANNUAL REVENUE REQUIREMENT

CITY OF CUPERTINO
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 five-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 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.

TABLE 3-ESTIMATE OF ANNUAL REVENUE REQUIREMENT
Shown In thousands
Category
Expenditures
Shortfall
Current Future
18-19
na
na
na
19-20 20-21 21-22 22-23 23-24
1,443 1,487 1,550 1,597 1,647
$11,064) $11,108) $11,171) $(1,218) $(1,268)
TOTAL
.. .
7,724
$ 15,829}
Revenue Requirement* $ 1,098 $ 1,131 $ 1,165 $ 1,200 $ 1,236 $ 51828 • Revenues ore increased by 3.0% annually for inflation 2019 CLEAN WATER ANO 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 earl'ier, all properties that shed stormwater into the Citys system are served by that system. In compliance with Propos~ion 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 parcel1 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 establish Ing storm drainage rates6 is to use the average or median single-family residential parcel7 ("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 CISA") 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 ¾IA 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 B.

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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CITY OF CUPERTINO
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 Siz
= 55% X 7,405 4
= 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 !SA The SFE per parcel for each size category is a simple ratio of the median ISA for each category to the ISA (4,073 sQ for the benchmark category of medium-sized parcels as shown ih the following formula:

SFE per 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 made about their characteristics.

Condominiums can be grouped into two categories: High density where they tend to have units on multiple floors (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 sij 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-famlly residential parcels. 2019 CLEAN WATER AND STORM PROTECTION FEE REPORT
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TABLE 4- SUMMARY OF SINGLE-FAMILY RESIDENTIAL PARCELS
I
Median
Total Total Parcel SFE per
I Lot Type Parcel Size Range Parcels* Acres• Size % I A** IS A Parcel Acres SF SF
Small under 0.13 1,526 159 4,792 70% 31354 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
Condosl (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 Pa ree ls an d Acres do not factor into the basis of the SFE calculation; they are shown for informa tional purposes on ly.

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:
(43,560 sf I acre) x % I A SFE p er Acre = ~--~-~---
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
land Use Category Parcels* Acres* % I A** Acre
Multi-Family (Apartments) 79 200 65% 6.95
Commefcial /Retail/ Industrial 256 441 85% 9.09
Office 217 372 65% 6.95
C:hurch / 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
• Tota I Pa rce Is and Acres do not factor into th e bas is of the SFE ca I cu l a tion ; they a re shown for info rmationa I purpose s only.
0 %IA is taken fro m Appendix 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 per 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 facilities1 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 L'ID1 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 CJ-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% red uction 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 E ... :, ... OJ 0 ·- 0 i
~
C C "'D -
_ _____ MRP Provision ____ L _~ ___ f __ :[ ____ _ __ _ _ Notes _____ _ Operations & Maintenance
Program Management
C.2 Municipal Operations
Clean Water Program
Cl
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
Publlc Information and
Outreach
Water Quality Monitoring
Pesticides Toxicity Control
Trash load Reduction
Mercury Controls
PCBs Controls
Copper Controls
Annua l Reports
Bm 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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CITY OF CUPERTINO
SFERate
Annual Revenue Requirement
Total SFEs
Or, using numbers from the analysis:

SFE Rate =
$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 l Proposed Fee
_ ~ land Use Category SF~_ ~~t_e_ _ FY 2019-_20
Single-Family Residential *
Small (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 to 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 • 0 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 condominium and non-single-family properties.
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P ga 14

ANNUAL COST INDEXING
The 2019 Clean Water and Storm Protection Fee is subject to an annual adjustmen! 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 ih excess of 3% shall be cumulatively reserved as the ''Unused CPI" and shalli 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 STORMWATER 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 (Glean 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 ?(~
Jerry Bradshaw, License No. C48845
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aeh

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:

Febmaiy 20, 2019
Susan Barnes, SCI Consulting Group
Fee Study Report: Regulatory Assessment
& Cost and Revenue Analysis
Jerry Bradshaw, SCI Consulting Group
Cheri Donnelly, City of Cupertino
Jo Anne Johnson, City of Cupe1iino
Karen Ashby, Lany Walker Associates

1. INTRODUCTION

L A R R Y
WALKER

ASSOCIATES
Rachel Warren
Airy Krich-Brinton
1480 Drew Ave., Suite 100
Davis, CA 95618
530.753.6400
[email protected]
Alr{[email protected]
In the early l 990s, in response to the federal Clean Water Act (CWA) amendment of l 987 to address urban stonnwater runoff pollution from Municipal Separate Storm 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 1 NPDES pennits to the countywide urban areas of Santa Clara, Alameda, San Mateo, and Contra Costa.

These countywide areas had individual pennits until 2009, when the Regional Water Board issued a Mwlicipal Regional Stormwater Pennit (MRP). L 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 Cupe1ii110 ), 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. l Discharge Prohibitions and Receiving Water Limitations • C.2 Municipal Operations
• C.3 New Development and Redevelopment
• C.4 Industrial and Commercial Site Contra.ls
• C.5 Illicit Discharge and Elimination
• C.6 Conshuction Site Controls
• C.7 Public Lnfmmation and Outreach
1 Order R2-2009-0074 .is amended by Order No. R2-201 L-0083 2 Order No. R2-20 IS-0049
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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 PCB Controls
• C.13 Copper Controls
• C. l 4 Bacterial Controls
• C.15 Exempted and Conditionally Exempted Discharges
• C.16 Discharges to Areas of Special Biological Significance • C.17 Annual Repo1ts
The City of Cupertino (City) is committed to water quality and watershed stewardship by continuing to build a safer, healthier, and more aesthetically pleasing community through programs, initiatives, and ordinances that align with MRP activities. Over the years, the range of actions taken by the City bas greatly increased in response to evolving regulatory requirements and commwtity needs.

As a part of the stormwater program initiative1 tbe City leverages its resomces by paiticipating in a comprehensive effort 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 memorandwn of agreement (MOA) between its 15 member agencies. The Santa Clara Valley collaboration is further supplemented by participation in the regional Bay Area Stormwater Management Agencies Association (BASMAA). In addition to directly benefitting member agencies with access to better science, the regiona] collaborations enhance technical approaches and ensure consistent messaging to the public and community decision makers. Implemented when the fast stonnwater pennits were issued to Santa Clara Valley pe1mittees, the coJlaboration has effectively assisted member agencies in maintaining storm.water programs that achieve federally and State-mandated water quality regulations.

The putpose 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 support a funding measure for the City·s st01m drain operations and maintenance and Clean Water Program needs.

The assessment includes a summary of known revenues and estimates of p1ior year, current year, and future implementation costs of the stormwater program.3 This info1mation may also he used in the future to budget program funding and/or to identify other potential funding sources, This memorandum is organized as follows:
l . 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 1s fiscal years 2019-2020 through 2023-2024.

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2. APPROACH
To understand the funding needs for the stormwater program, the 'true' costs for full implementation of the MR.P requirements must be understood. However, tracking and compiling staff time and resources across multiple departments can be a complex and time-consullling 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 stmctured questions and discussions regarding the agency's staffing, implemei1tation approach for the range ofMRF requirements prior and cuiTent stormwater 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 stormwater-related operations:
• Operations and Maiutenance (O&M): This includes ongoing and routine ac6vities supp01ti.11g the O&M of the stormwater infrastructure, including inspection and cleaning of storm drain inlets, st01m cl.rain lines, and trash capture devices, as well as street sweeping management (prin1ariJy MRP provision C.2).
• Clean Water Program: This includes ongoing and routine activities that are directly related to water quality improvement., such as implementation of the MRP requirements, participation 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 MR.P provisions, with the exception of green infrastructure projects).

3. RESULTS ANO DISCUSSION
A summary 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 information is presented io 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 desc1ibed below. All costs are in present-value dollars.

3.1. Overall Summary
Costs for the full implementation of the stormwater program were estimated based on budgetary and supplemental infonnation 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 20 I 9 Adopted Budgets.
• Futme revenue was assumed to be the same as that for the ciment 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 tlu·ougb 2023-2024 (see Section 3.2, Table 4). • 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 participation in SCVURPPP). Additional details Appendix A 2019 Clean Water and Storm Protection Fee Report Page 18 594
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regarding assumptions for futurn, potential cost i.ncrnases 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 I.

Table 1. Overall Summary of Revenue
- PriorlaJ 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' (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 and Fiscal Year Prior[a] CurrentCaJ 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 $622,000 F1,md 1 00-S5
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 Budget' (2018 Adopted Budget and 2019 Adopted Budget for both Non-Point Source (Fund 230-81) (p. 407-409) and Stonn 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 expenditw·es:
• During the observed time period, the estimated cost of stoimwater 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 sto1mwater 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 sto11nwater 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 stmm protection (as described in 3.2. City Expenditures).

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3.2. City Expenditures
osts for the implementation of the storm water program for the MRP were estimated based on budgetaiy and supplemental information provided by the City. When detennining which costs to include, the City consider d, at a rn.inimum, the following:
• Labor·
• Materials;
• Contract Services;
• Contingencies; and
• Cost Allocation.

The following key pieces of infonnation were provided by the City:
• "Fund 230-81 - Environmental Programs FY17 _ 18 Expenctitw·e (Actual)" spreadsheet, which details the expenditures for the Clean Water Program by expense type for FY 2017-2018.
• 'Fund 230-81 - Environmental Programs FY 17 _ 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 FY] 8 _ 19 Expenditure (Budget)' spreadsheet, which details the amended budget and expenditures to date fol' 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 FY17 _ 18 Expense (actual)" spreadsheet, which details the expenditures for O&M by expense type for FY 2017-2018.
• '100-85-818 FYl8_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 Stnn Drain - Environmental Programs - Non Point Sow·ce'' 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 id ntified 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 Resow-ces, Finance1 and lnfo1mation Technology Support, are divided as follows:
o The fulJ Cost Allocation amount for O&M (Fund l 00-85) is accounted for under Provision C.2.
o The Cost Allocation amount for Clean Water Program (Fund 230-81) is allocated propmtionally to specific. !v1RP provisions based on the identified labor costs. • The City's contribution to SCVURPPP was detennined as follows:
o Based on the Memorandum of Agreement, the Cityf s rumual, propo1tional cost share is 2.46% of the annual SCVURPPP Program Budget.
o The City's payment h.istory (JuJy 2008 through July 2018) wa~ used to determine the average annual increase in the City's contribution (3.57%). Thjs 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 participation in S VURPPP). This is based on preliminary feedback from Regional Water Board staff that the MRP should oat 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 MR.P provisions are anticipated to require an additio11al increase dwing the first year of the next l\.1RP tem,.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 detennined 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 infrastmcture projects. This does not include costs for implementation/instatlation of green infrastmcture projects. 7 The cu1Tent NlRP expire on December 31, 2020. If the MRP is reissued on schedule, the new MRP will begin to be implemented on January 1, 2021. The e increases have been applied to the anticipated, first full year of implementation of the new MRP, beginning July I, 2021 .

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- C.10 Trash Load Reduction (7.5°/c>), This estimated increase is based on anticipated, new monitoring/assessment costs and implementation reqt1irements, including the assessment of private catchments. In addition, by 2022, the City wit I need to achieve 100% reduction of the trash load from its base trash generation level; based on the 2017-2018 Annual Report the City is cun-ently achieving 93% reduction.
- C.11 Mercury Controls and C.12 Polychlorioated Bipbenyls (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 reporting requirements and the potential for some increased costs related to electronic reporting (via EPA) and cost repmting (via the state). o No incremental projections were made for expenses described as "one-time costs." The total expenditures for 2017-2018 (prio year) and 2018-2019 (cw-rent year), based on the adopted budgets for those years, and the total, estimated expenditmes for the next five years (:fut1ire), organized by cost category (fund) and MRP provision, are shown in Table 4.8 Only total fund values are included foT 2017-2018 and 2018-2019. 8 The total cost for each cost category (fund) are also summarized in Table 2, Appendix A 2019 Clean Water and Storm Protection Fee Report Page 26 602
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Table 4. City Estimated Expenditures for MRP, by Cost Category (Fund) and Fiscal Year PriorlaJ CurrentCaJ
Fund MRP Provision 2017-2018 2018-2019 2019-2020
Fund 100-85, Operations & Maintenance
Program Management $59,000
C.2 Municipal Operations $493,000
Fund Total $449,950 $476,503 $552,000
Fund 230-81, Clean Water Program
C.1 Permit Compliance $23,000
C.2 Municipal Operations $148,000
C.3 New Development and Redevelopment $70,000
C.4 Industrial and Commercial Site Controls $83,000
C.5 Illicit Discharge Detection and Elimination $129,000 C.6 Construction Site Control $43,000
C.7 Public Information and Outreach $118,000
C.8 Water Quality Monitoring $11 ,000
C.9 Pesticides Toxicity Control $21 ,000
C.10 Trash Load Reduction $130,000
C.11 Mercury Controls $24,000
C.12 PCBs Controls $51,000
C.1 3 Copper Controls $11,000
C.17 Annual Reports $29,000
Fund Total $761,720 $720,785 $891,000
Total $1,211,670 $1 ,197,288 $1,443,000
-
2020-2021
Future - Projected£bl
2021-2022
$61 ,000 $63,000
$508,000 $523,000
$569,000 $586,000
$24,000 $25,000
$153,000 $157,000
$72,000 $77,000
$86,000 $88,000
$133,000 $137,000
$44,000 $46,000
$122,000 $126,000
$11,000 $12,000
$21,000 $22,000
$134,000 $148,000
$25,000 $27,000
$52,000 $57,000
$11,000 $12,000
$30,000 $33,000
$918,000 $964,000
$1 ,487,000 $1 ,550,000
202.2-2023 2023-2024
$65,000 $67,000
$539,000 $555,000
$603,000 $622,000
$25,000 $26,000
$162,000 $167,000
$80,000 $82,000
$91,000 $94,000
$141,000 $145,000
$47,000 $49,000
$129,000 $1 33,000
$12,000 $1 3,000
$23,000 $23,000
$152,000 $157,000
$27,000 $28,000
$59,000 $61 ,000
$12,000 $13,000
$34,000 $35,000
$994,000 $1,025,000
$1,598,000 $1,646,000
[a] Values are from the City's Fiscal Year 2018-2019 Adopted Budget" (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)).
[b] Each value for the fiscal years under the "Future - Projected" column is considered to be estimated and has been rounded to the nearest $1 ,000; thus, summing individual values may result in a slightly different total than those shown in the "Fund Total" and "Total" rows. 9 http ://www .cupertino.org/home/ howdocument?id=2 l 776 Appendix A 2019 Clean Water and Storm Protection Fee Report Page 27 603
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PAGE28
APPENDIX 8-PERCENTAGE 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 :Land Use % I A --------------
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
Publ ic (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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Pag..i 29
TABLE 9- PERCENTAGE OF IMPERVIOUS SURFACE FROM STORM DRAIN MASTER PLAN I _ Storm_ Drain_Ma_st_e_!_!>lan _ _ ~ __ __fe~ Repo_rt _ Low-Medium IDensity Res 70 7,0 Small SFR
Low Density Res. 55 55 Medil!Jm SFR
45 Large SFR
Very low Density Res. 35 35 Very Large SFR
Quasi-Public/Institutional 65 65 Multi-fam
Colil'lmercial/lndustrial 85 85 Comm/ln€lusl
Ql!lasi-Pul!Jlic/lnstitutional 65 65 €:Jf.fice
Public (Schools, Gov't, etc.) 45 55 Institutional
40 Schools
Parks/Open SJ!)ace 15 Il.5 Pa~~s
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- ST0RMWATER 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
I Annual
Municipality Status R Year Mechanism ate
San Clemente
Carmel
Palo Alto
Los Angeles
Palo Alto
Rancho Palos Verde
Encinitas
Ross Valley
Santa Monica
San Clemente
Solana Beach
Woodland
Del Mar
Hawthorne
Santa Cruz
Burlingame
Santa Clarita
Stockton
County of Contra Costa
Santa Clara Valley Water
District
City of Berkeley
County of LA
San Clemente
Vallejo San & Flood
Culver City
Palo Alto
Town of Moraga
City of Berkeley
Los Angeles Flood
Control
City of Los Altos
City of Alameda
County of San Joaquin
City of Sacramento
City of Salinas
City of Santa Clara
County of San Mateo
County of El Dorado
County of Orange
County of Ventura
Successful
Unsuccessful
Unsuccessful
Successful
Successful
Successful , then recalled and
reduced
Unsuccessful
Successful, Overturned by
Court of Appeals, Decertified
by Supreme Court
Successful
Successfully renewed
Non-Bal loted, Threatened by
lawsuit, Balloted, Successful
Unsuccessful
Successful
Unsuccessful
Successful
Successful
Successful
Unsuccessful
Unsuccessful
Successful
Successful
Deferred
Successful
Successful
Successful
Successful
Unsuccessful
Successful
Successful
In Process
Studying
Studying
Studying
Studying
Studying
Studying
Studying
Studying
Studying
$
$
s
s

60.15 1

38.00 57.00

28.00 $ 120.00
2002
2003
2003
2004
2005
Balloted Property-Related Fee
Balloted Property-Related Fee
Balloted Property-Related Fee
Special Tax - G. 0. Bond
Balloted Property-Related Fee
S 200.00 2005, 2007 Balloted Property-Related Fee
$ 60.00 2006
s 125.00 2006
s 87.00 2006
s 60.15 2007
s 21.84 2007
s 60.00 2007
$ 163.38 2008
$ 30.00 2008
s 28.00 2008
s 150.00 2009
$ 21.00 2009
s 34.56 2009
s 22.00 2012
s 56.00 2012
varies 2012
$ 54.00 2012
$ 74.76 2013
s 23.00 2015
$ 99.00 2016
s 163.80 2017
$ 120.38 2018
$ 42.89 2018
s 83.00 2018
NA NA
NA NA
NA NA
NA NA
NA NA
NA NA
NA NA
NA NA
NA NA
NA NA
Non-Balloted Property-Related
Fee adopted in 2004,
challenged, balloted and failed
in 2006
Balloted Property-Related Fee
Special Tax
Balloted Property-Related Fee
Non-Balloted & Balloted
Property-Related Fee
Balloted Property-Related Fee
Balloted Property-Related Fee
Balloted Property-Related Fee
Special Tax
Balloted Property-Related Fee
Balloted Property-Related Fee
Balloted Property-Related Fee
Balloted Property-Related Fee
Special Tax
Measure M - GO Bond
NA
Balloted Property-Related Fee
Balloted Property-Related Fee
Special Tax
Balloted Property-Related Fee
Reauthorization of 2005 Fee
Balloted Property-Related Fee
Balloted Property-Related Fee
Special Tax
Balloted Property-Related Fee
Balloted Property-Related Fee
Balloted Property-Related Fee
Balloted Property-Related Fee
NA
Balloted Property-Related Fee
NA
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 f Munic1pa 1ty Type o Fee
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-Related Fee
* This is the ca lcu lated average rate for the City of Stockton, which has 15 rate zones with rates ranging from $3.54 to $651.68 per year. 2019 CLEAN WATER AND STORM PROTECTION FEE REPORT
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CITY OF CUPERTINO
Agenda Item
23-12760 Agenda Date: 6/4/2024
Agenda #: 14.

Subject: Consider the Recommended Operating and Capital Improvement Program Budgets for Fiscal Year (FY) 2024-25, adoption of the Operating and Capital Improvement Program Budgets for FY 2024-25, establishment of the Appropriation Limit, and related actions.

1. Adopt Resolution No. 24-054 establishing an Operating Budget of $120,495,113 for FY 2024- 25, which includes the following changes to the FY 2024-25 Proposed Budget, published on May 1, 2024:
a. Approve the operating budget of $120,392,308 outlined in the FY 2024-25 Proposed Budget.
b. Approve additional appropriations of $32,500 for the Community Funding Grant Program as included in Attachment D.
c. Approve additional appropriations of $3,905 for festival costs as included in Attachment D.
d. Approve additional appropriations of $2,050 for the Artist Awards program as included in Attachment D.
e. Approve additional appropriations of $64,350 for the animal services contract as included in Attachment D.
f. Approve a reduction in revenues of $21,200 due to the elimination of the proposed permit parking and crane lift fees as included in Attachment D. g. Approve additional revenues of $212,614 for SB 1 as included in Attachment D. h. Approve Community Funding Grants for the following organizations, allocating a total of $32,500:
i. AINAK: $2,750
ii. Cupertino Little League: $16,000
iii. Cupertino Symphonic Band: $3,000
iv. Rotary Club of Cupertino: $4,000
v. STEMBoost Corporation: $3,000
vi. West Valley Community Services: $3,750

2. Adopt Resolution No. 24-055 establishing a Capital Improvement Program Budget of $26,151,380 for FY 2024-25

3. Adopt Resolution No. 24-056 establishing an Appropriation Limit of $132,542,385 for FY 2024-25
Presenters: Kristina Alfaro, Director of Administrative Services and Thomas Leung, Budget Manager
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23-12760 Agenda Date: 6/4/2024
Agenda #: 14.

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CITY COUNCIL STAFF REPORT
Meeting: June 4, 2024
Subject
Consider the Recommended Operating and Capital Improvement Program Budgets for Fiscal Year (FY) 2024-25, adoption of the Operating and Capital Improvement Program Budgets for FY 2024-25, establishment of the Appropriation Limit, and related actions.

Recommended Action

1. Adopt Resolution No. 24-XXX establishing an Operating Budget of $120,495,113 for FY 2024-25, which includes the following changes to the FY 2024-25 Proposed Budget, published on May 1, 2024:
a. Approve the operating budget of $120,392,308 outlined in the FY 2024-25 Proposed Budget.
b. Approve additional appropriations of $32,500 for the Community Funding Grant Program as included in Attachment D.
c. Approve additional appropriations of $3,905 for festival costs as included in Attachment D.
d. Approve additional appropriations of $2,050 for the Artist Awards program as included in Attachment D.
e. Approve additional appropriations of $64,350 for the animal services contract as included in Attachment D.
f. Approve a reduction in revenues of $21,200 due to the elimination of the proposed permit parking and crane lift fees as included in Attachment D. g. Approve additional revenues of $212,614 for SB 1 as included in Attachment D. h. Approve Community Funding Grants for the following organizations, allocating a total of $32,500:
i. AINAK: $2,750
ii. Cupertino Little League: $16,000
iii. Cupertino Symphonic Band: $3,000
iv. Rotary Club of Cupertino: $4,000
v. STEMBoost Corporation: $3,000
vi. West Valley Community Services: $3,750

2. Adopt Resolution No. 24-XXX establishing a Capital Improvement Program Budget of $26,151,380 for FY 2024-25
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2 3. Adopt Resolution No. 24-XXX establishing an Appropriation Limit of $132,542,385 for FY 2024-25
Reasons for Recommendation
At its May 21, 2024 meeting, City Council received the proposed budget and directed staff to bring it back for final adoption on June 4. City Council made no changes to the staff recommendation.

This report consists of the initial proposed budget that was printed on May 1, 2024, as well as any subsequent modifications made to date. These modifications were also presented to Council on May 21 and include unforeseen adjustments to expenditures and revenues that have emerged since the publication of the Proposed Budget.

In addition, responses to Council’s questions during the Proposed Budget Study Session are included in Attachment G
The Proposed Budget for the upcoming fiscal year highlights an increase in both expenditures and revenues compared to the previous year's Adopted Budget. Total expenditures are proposed at $146.6 million, a $24.9 million or 20.4%, increase from the previous year. Similarly, total revenues are anticipated to be $139.3 million, a $29.1 million or 26.4%, increase from last year.

The increase in expenditures and revenues is primarily due to the City’s community shuttle program and a larger Capital Improvement Program (CIP).

General Fund expenditures are proposed at $90.0 million, which is an increase of $4.0 million or

4.6%, from the previous year's Adopted Budget. General Fund revenues are anticipated to be $89.8 million, which is a $9.5 million or 11.9%, increase from the previous year's Adopted Budget.

The following table shows the City’s budget 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 Fund Type Proposed Revenues Proposed Expenditures
Change in Fund
Balance/Net Position
General 89,804,468 90,041,794 (237,326)
Special Revenue 18,829,495 13,956,348 4,873,147
Debt Service 2,676,200 2,676,200 -
Capital Projects 13,635,000 22,057,580 (8,422,580)
Enterprise 6,608,500 9,271,222 (2,662,722)
Internal Service 7,784,696 8,643,349 (858,653)
TOTAL $ 139,338,359 $ 146,646,493 $ (7,308,134)
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3 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.

General Fund Expenditures
FY 2024-25 expenditures are estimated at $ 90.0 million, which represents a $4.0 million or 4.6% increase compared to the adopted budget from the previous year. This increase is primarily attributed to the City’s community shuttle program.

General Fund expenditures increased by $0.1 million from the $89.9 million in the Proposed Budget printed on May 1, 2024, due to:
 Addition of Community Funding: $32,500
 Increase in Festival Costs: $3,905
 Addition of the Artist Awards Program: $2,050
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4  Increase in Animal Services Contract: $64,350
General Fund Revenue
The City's General Fund revenues for the upcoming fiscal year are projected to be $89.8 million, representing an increase of $9.5 million or 11.9% from the FY 2023-24 Adopted Budget. This increase is primarily due to an increase in Charges for Services related to Cost Allocation expenses, an increase in Other Service Fees related to the City's community shuttle program revenue, and an increase in the City's investment earnings. 614
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5 General Fund – Fund Balance
FY 2024-25 total fund balance is estimated to be $149.8 million, a decrease of $0.2 million, or 0.2%, from the FY 2023-24 Amended Budget. It’s important to note that the only portion available for use, according to City policy, is unassigned funds. Committed funds, such as the Sales Tax Repayment Reserve, are set aside for specific purposes determined by City Council resolution.

Restricted funds, such as the Section 115 Pension Trust, are allocated for specific purposes stipulated by external resource providers. Assigned funds are reserved for encumbrances. Of the total fund balance, $22.7 million is unassigned and available to be used.

The following table shows changes to fund balance for the General Fund since the close of FY 2021-22:

The Sales Tax Repayment Reserve is projected to increase in FY 2024-25 due to interest earnings.

The Economic Uncertainty Reserve is increasing due to higher budgeted revenues and expenditures in FY 2024-25, in accordance with the City’s Fund Balance Policy.

Classification 2021-22
Actual
2022-23
Actual
2023-24
Adopted
Budget
2023-24
Year End
Projected
2024-25
Proposed
Budget
Nonspendable
Loans Receivable 439,199 433,896 435,000 433,896 435,000 Advance to Other Funds - - - - -
Total Nonspendable 439,199 433,896 435,000 433,896 435,000 Restricted
CASp Certification and Training 23,621 12,377 23,621 12,377 12,377 Section 115 Pension Trust 17,240,051 19,088,859 17,240,051 19,088,859 19,088,859 Public Access Television 1,492,810 1,565,153 1,492,810 1,565,153 1,565,153 Public Art In-Lieu - - - - -
Total Restricted 18,756,482 20,666,389 18,756,482 20,666,389 20,666,388 Committed
Sales Tax Repayment Reserve - - - 74,500,000 77,554,500 Economic Uncertainty Reserve 24,000,000 24,000,000 24,000,000 18,000,000 21,346,728 Capital Projects Reserve 10,000,000 10,000,000 10,000,000 - - Sustainability Reserve 127,891 127,891 127,891 127,891 127,891 Total Committed 34,127,891 34,127,891 34,127,891 92,627,891 99,029,119 Assigned
Reserve for Encumbrances 5,041,681 9,735,187 3,000,000 9,735,187 7,000,000 Total Assigned 5,041,681 9,735,187 3,000,000 9,735,187 7,000,000 Total Unassigned 51,804,288 73,864,369 48,332,873 26,593,360 22,688,890 TOTAL FUND BALANCE $ 110,169,541 $ 138,827,732 $ 104,652,246 $ 150,056,723 $ 149,819,397 615
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6 General Fund Forecast
FY 2024-25 is projected to end with revenues slightly falling short of expenditures, resulting in a slight deficit. The following chart shows a structural deficit that begins in FY 2028-29 due to expenditures (2.6% average annual growth rate) growing at a faster rate than revenues (1.9% AAGR).

The California Department of Tax and Fee Administration (CDTFA) recently conducted an audit on one of the City's taxpayers. This will have a substantial impact on the City's finances, with a projected decline of $30 million, or 73%, in sales tax revenues from the initial FY 2023-24 forecast provided by HdL, the City's sales tax consultant. As a result, the City's total revenues are also anticipated to decrease by $30 million, or 28%, from the original FY 2023-24 forecast. In addition, the notice from the CDTFA indicated that the City may be required to pay back any disputed sales tax received since April 2021. While the ongoing impact of the audit is included in the forecast, the one-time impact is not.

The Council and staff have demonstrated proactive fiscal stewardship in response to the evolving financial landscape. The FY 2023-24 Adopted Budget, which Council adopted on June 6, 2023, incorporated significant expenditure reductions of more than $15 million dollars, including:
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7  Eliminating 14 vacant positions ($2.6 million)
 Decreasing materials, contract services, special projects, capital outlays, and contingency expenditures ($5.9 million)
 Decreasing transfers from the General Fund to other funds ($5.5 million)  Using the City's Section 115 Trust to fund OPEB (Other Post-Employment Benefits) costs ($1.4 million)
Additionally, on October 10, 2023, the Council established a committed Sales Tax Repayment Reserve with an initial allocation of $56.5 million. This reserve was designed to address a potential adverse CDTFA decision and the uncertain outcome of the anticipated legal challenge. Funding came from Unassigned fund balance, the Capital Projects Reserve, and the Economic Uncertainty Reserve. On May 21, 2024, Council increased the Sales Tax Repayment Reserve to $74.5 million.

On January 17, 2024, staff sought Council direction on potential service-level reductions to help resolve the City’s structural deficit. Council provided feedback and directed staff to provide additional information. On April 16, 2024, staff provided additional information to Council and received confirmation on the updated service-level reductions.

The City is taking a proactive approach to minimize the impact on its staff and residents, and City staff will continue to keep the Council 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 an estimated structural deficit beginning in FY 2028-29 of the forecast, and the City will need to continue implementing long-term solutions to address this ongoing challenge.

The City's forecast model assumes recessionary periods every seven years, during which revenues other than property tax 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.
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8 Despite the challenging times, the City’s financial position remains strong with reserves that can be utilized to offset deficits until the City can align its ongoing expenditures with its revenues. It is important to note that these reserves are one-time funding, which cannot be relied upon to sustain the City’s finances in the long run. In addition, reductions in FY 2023-24 and FY 2024-25, along with increases in charges for services and interest earnings, have positively impacted the forecast resulting in a modest surplus from FY 2025-26 to FY 2027-28.

In the out years, the deficit is primarily due to a recession scenario in FY 2027-28, the resumption of a $2 million transfer to the Capital Reserve in FY 2029-30, and the sunset of the Utility Users Tax in FY 2030-31.

These resources give the City a buffer and more options to manage its finances effectively. With a solid financial footing and prudent planning, the City is well-positioned to navigate these uncertain times and maintain its commitment to its staff and community. 618
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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 2024-25, the Proposed Budget for Special Revenue Funds is $14.0 million, which represents an increase of $3.6 million or 34.2%, compared to last year's Adopted Budget. This increase is attributed to increases in facility improvements for Bollinger Road Corridor and HSIP – Roadway Safety Improvements.

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 $30.9 million, reflecting an increase of $4.9 million from the previous year. This increase in fund balance is mainly due to Measure B funds received.

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). 2021-22 2022-23 2023-24 2024-25 Percent
Actual Actual Adopted Budget Proposed Budget Change
Employee Compensation 1,716,677 1,814,298 1,901,795 1,785,475 -6.1% Employee Benefits 796,662 755,875 891,001 953,406 7.0%
Materials 1,048,952 713,237 1,040,163 1,047,713 0.7%
Contract Services 358,244 667,154 1,037,847 555,004 -46.5% Cost Allocation 1,325,945 1,191,567 1,220,614 2,030,054 66.3% Capital Outlays 2,565,810 4,936,812 880,224 4,974,024 465.1% Special Projects 2,506,843 2,133,588 3,403,849 2,586,687 -24.0% Contingencies - - 10,679 8,985 -15.9%
Transfers Out 486,235 1,908,631 15,000 15,000 0.0%
Total Expenditure Uses $ 10,805,367 $ 14,121,161 $ 10,401,172 $ 13,956,348 34.2%

EXPENDITURE USES
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10 For FY 2024-25, the Proposed Budget for Capital Projects Funds is $22.1 million, which represents an increase of $17.8 million, or 421.6%, compared to last year's Adopted Budget. This increase is due to increased capital outlays and transfers (from the Capital Reserve Fund to the Capital Improvement Projects Fund) resulting from a larger Capital Improvement Program (CIP) this year.

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 2024-25, the Proposed Budget for Enterprise Funds is $9.3 million, which represents a decrease of $0.4 million or 4.1%, compared to last year's 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 $3.8 million in reserves, a decrease of $3.7 million. This decrease EXPENDITURE USES 2021-22 2022-23 2023-24 2024-25 Percent Actual Actual Adopted Budget Proposed Budget Change
Employee Compensation 543 4,757 - - N/A
Employee Benefits 310 1,933 - - N/A
Contract Services 53,630 343,680 175,000 175,000 0.0%
Capital Outlays 8,662,133 4,075,557 2,027,000 13,635,000 572.7% Cost Allocation - - - - N/A
Transfers Out 11,422,048 2,489,154 2,027,000 8,247,580 306.9% Total Expenditure Uses $ 20,138,664 $ 6,915,082 $ 4,229,000 $ 22,057,580 421.6% EXPENDITURE USES 2021-22 2022-23 2023-24 2024-25 Percent Actual Actual Adopted Budget Proposed Budget Change
Employee Compensation 1,271,044 1,608,718 2,016,689 1,922,348 -4.7% Employee Benefits 305,998 (53,139) 668,557 839,347 25.5% Materials 329,767 412,827 444,258 691,338 55.6%
Contract Services 4,247,810 4,736,292 5,176,958 3,661,846 -29.3% Contingencies - - 67,455 54,339 -19.4%
Cost Allocation 1,034,107 789,939 939,358 1,577,430 67.9% Special Projects 95,536 297,015 135,733 362,733 167.2%
Transfers Out 222,566 264,959 222,567 161,841 -27.3%
Total Expenditure Uses $ 7,506,828 $ 8,056,612 $ 9,671,575 $ 9,271,222 -4.1% 620
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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 $8.6 million, which is a slight decrease of $0.08 million or 0.9%, 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 $2.6 million in reserves, increasing by $0.01 million.

Staffing
Personnel Assumptions
FY 2024-25 salaries and benefits reflect the cost-of-living adjustments and health insurance contribution increases approved by the City Council in November 2023.

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 39% of employees are below Step 5.

Position Eliminations
The FY 2024-25 Proposed Budget proposes funding for a total of 207 positions, representing a reduction of 5 positions. It is important to note that the 5 positions being eliminated are vacant positions that have not been filled for various reasons such as resignation, retirement, or the positions being left unfilled.

EXPENDITURE USES 2021-22 2022-23 2023-24 2024-25 Percent Actual Actual Adopted Budget Proposed Budget Change
Employee Compensation 1,675,495 1,826,815 1,971,220 1,818,488 -7.7% Employee Benefits 1,833,582 2,374,158 2,319,832 2,409,499 3.9% Materials 1,144,432 1,190,393 1,060,611 1,046,922 -1.3% Contract Services 1,280,565 1,440,449 1,789,573 1,798,760 0.5% Cost Allocation 60,817 62,042 57,622 304,459 428.4%
Special Projects 230,258 398,365 572,000 440,000 -23.1% Contingencies - - 26,201 26,622 1.6%
Other Financing Uses 926,453 798,599 926,453 798,599 -13.8% Total Expenditure Uses $ 7,151,603 $ 8,090,821 $ 8,723,512 $ 8,643,349 -0.9% 621
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12 Reductions in Vacant Positions
Position Department FTE
Special Project Executive Limited-Term Administration -1.00 Public Works Project Manager Public Works -1.00
Public Works Project Manager Public Works -1.00
Maintenance Worker I/II Public Works -1.00
Innovation & Technology Manager Innovation & Technology -1.00 Total -5.00
Total Staffing by Department
Department FY 2023-24 Adopted
Budget
FY 2024-25 Proposed
Budget
Council and Commissions 7.23 7.23
Administration 21.80 19.00
Law Enforcement - -
Innovation and Technology 14.93 13.93
Administrative Services 17.90 17.90
Parks and Recreation 27.63 27.63
Community Development 34.39 34.29
Public Works 88.12 87.02
Total 212.00 207.00
Summary of Budget Adjustments (Attachment D)
The changes are discussed further below and are also detailed in Attachment D.

Increase Animal Services Contract
Also on the June 4 City Council agenda, staff recommends the approval of a new contract for animal management services. The increase is due to higher costs for the new contract if it is 622
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13 approved by Council. The original 20-year contract between the City and the City of San Jose for animal services is set to expire on June 30, 2024. The new contract scope of work and compensation amount provides cost recovery for City of San Jose staffing and resources based on an annual service level for the City. The scope of work covers a variety of services such as impound, confiscation, disposal, euthanasia requests, spay and neuter, wildlife pick up, and transportation. These are all current services that are offered to Cupertino residents. If approved, costs would increase by $64,350 for FY 2024-25.

Reduce Revenue from Permit Parking and Crane Lift Fees
In 2023, the City conducted a new Comprehensive Fee Study. Staff presented the results of the fee study to Council on February 6, 2024, and presented a Fee Schedule Update to Council on May 14, 2024. Per the Council’s direction on February 6, 2024 to prepare full cost recovery fees, staff also presented a list of new fees to be adopted on May 14, 2024. Council voted to remove two proposed fees in Schedule B – Engineering for Crane Lift Encroachment Permits ($1,415) and Permit Parking Bi-annual Fee ($40) from the fee schedule. As a result, budgeted revenue is being reduced by $21,200.

Artist Awards Program
The Artist Awards Program for the Arts and Culture Commission was inadvertently missed in the printed Proposed Budget and is being proposed to be added back to the budget. The cost for the program is $2,050. x
Festival Costs
The cost for sheriff services was budgeted based on the previous year’s rates. However, those rates have increased since, resulting in an increase for FY 2024-25.

Community Grant Funding
Per Council’s direction on November 21, 2024, the total grant funding amount for Community Funding remains at $32,500. On April 4, 2024, the Parks and Recreation Commission approved the following proposed list of organizations to recommend to City Council for funding, totaling $32,500:

Non-Profit Organization FY 2023-24
Funding FY 2023-24 Program/Project/Event FY 2024-25 Funding FY 2024-25 Program/Project/Event AINAK 2,500 Eye Exams & Eyeglasses 2,750 AINAK Eyeglasses Asian American Parents Association 3,000 2024 Cupertino Multicultural Fair N/A2 N/A2 Cupertino Little League N/A1 N/A1 16,000 Scoreboard Replacement Cupertino Symphonic Band 4,000 Band Equipment 3,000 Band Equipment & Materials No Time to Waste 5,000 7/250 Feed the Need N/A2 N/A2
Omniware Networks 4,000 Mental Health Program N/A2 N/A2 Rotary Club of Cupertino N/A1 N/A1 4,000 House Renovations STEMBoost Corporation 4,000 Elementary Science Olympiad 3,000 Elementary Science Olympiad Summer Workshops
Fund Day/Night
West Valley Community Services 10,000 Gift of Hope 2023 3,750 Gift of Hope 2024 Total $32,500 $32,500
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14 1Organization did not apply for or receive a Community Funding Grant in FY 2023-24. 2Organization did not apply for or receive a Community Funding Grant in FY 2024-25.

Increase SB 1 Revenue Estimate
The Public Works department recommends increasing Senate Bill (SB) 1 revenue estimates by $212,614 to $1,549,796 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.

Capital Improvement Program (CIP)
On March 7, 2024, the City Council conducted a study session to review the Capital Improvement Program (CIP). The FY 2024-25 Proposed Budget for CIP is $26.2 million, including $17.9 million in projects and $8.2 million in transfers.

Interfund transfers, which are transfers between funds, are required to fund CIP projects. A recommended transfer of $8.2 million from the Capital Reserve to the Capital Improvement Program Fund and Transportation Fund will provide the necessary funding for these projects.

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 Capital Improvement Program Project Revenue Expense Fund Balance

SPECIAL REVENUE FUNDS
Bollinger Road Corridor Design 425,600 532,000 (106,400) Roadway Safety Improvements - High Friction Pavement & Speed Feedback Signage 3,205,620 3,561,800 (356,180) Transfer from Capital Reserve to Transportation Fund 462,580 462,580 TOTAL SPECIAL REVENUE FUNDS 4,093,800 4,093,800 -

CAPITAL PROJECTS FUNDS
CIP Preliminary Planning & Design - 125,000 (125,000)
Capital Project Support - 50,000 (50,000)
Electric Vehicle Charging Station (EVCS) expansion - Service Center - 560,000 (560,000) McClellan Road Bridge Replacement 5,850,000 5,850,000 - Photovoltaic Systems Design & Installation - 6,300,000 (6,300,000) Vai Avenue Outfall - 490,000 (490,000)
ADA Improvements (Annually funded) - 100,000 (100,000)
Annual Playground Replacement (Year 5 of 5) - 300,000 (300,000) Street Light Installation - Annual Infill (Annually funded) - 35,000 (35,000) Transfer from Capital Reserve to Capital Improvement Program Fund 7,785,000 8,247,580 (462,580) TOTAL CAPITAL PROJECTS FUNDS 13,635,000 22,057,580 (8,422,580) TOTAL ALL FUNDS $ 17,728,800 $ 26,151,380 $ (8,422,580) 624
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15 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 $19.1 million as of June 30, 2023, which can be utilized to fund pension costs.

Revenue Volatility
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, discussing the potential impacts on the City.

Following discussions with the affected taxpayer and the CDTFA, an updated forecast was presented to the Council in April 2023. The impact was estimated to be a 73% decline in sales tax revenue, equating to an ongoing $30 million decrease. This shifted the City’s financial outlook from a surplus to a structural deficit, where ongoing expenses exceed revenue. In October 2023, the CDTFA issued a formal letter to the City providing the final audit results and the actual amount of money lost.

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 2024-25 appropriations limit is $132,542,385, an increase of $4,655,991, or 3.6%, from the prior year. 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.
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16 Budget Study Session
On May 21, 2024, City Council conducted a study session to review the FY 2024-25 Proposed Budget. During the session, City staff presented General Fund revenues, expenditures, and forecasts. City Council offered input, sought clarifications, and provided recommendations.

During the study session, City Council voted 4-0-1 (Chao abstaining) to direct staff to bring back the proposed budget for consideration by Council for adoption on June 4. Responses to Council’s questions are included in Attachment G. Staff received questions about the City Work Program and special projects, which are answered in the attachment.

Community Budget Survey, Outreach, and Town Hall
In April, City staff launched an extensive outreach initiative to engage with the community on City’s budget. Engagement efforts included interactive in-person and hybrid sessions at various locations and times, as well as three booths at community events, three focus groups, and two community budget meetings. Staff reached 23 residents at the booths, three residents at the focus groups, and 18 residents at the community meetings. The variety of outreach styles and times provided options for residents. Despite best efforts, this series of outreach efforts designed to involve residents saw lower than hoped-for attendance, however, staff remains committed to fostering community connections and showcasing the budget tools available to better understand and research city finances. These events were centered around the discussions outlined in the City’s budget adoption roadmap, which is a key tool to inform residents and City Council of where we are in the budget process and the many touch points we have had this year. The budget and communication team worked diligently to organize and promote these gatherings through city and partner channels to ensure community awareness.

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 2024-25 Proposed CIP Budget on April 9, 2024, and found that the FY 2024-25 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 $120,495,113 and a Capital Improvement Program Budget of $26,151,380 for FY 2024-25. 626
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17 California Environmental Quality Act
The adoption of the budget is exempt from the California Environmental Quality Act (CEQA) under CEQA Guidelines section 15378(b)(4), Each proposed project will be evaluated to determine if 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 Matt Morley, Assistant City Manager
Approved for Submission by: Pamela Wu, City Manager
Attachments:

A – Draft Resolution – Operating Budget for Fiscal Year 2024-25 B – Draft Resolution – Capital Budget for Fiscal Year 2024-25 C – Draft Resolution – Appropriations Limit for Fiscal Year 2024-25 D – Budget Adjustments Summary and Detail
E – Appropriation Limit for Fiscal Year 2024-25
F – Appropriation Limit Price and Population Factors for Fiscal Year 2024-25 G – Proposed Budget Study Session Supplemental Report
H – Planning Commission Adopted Resolution
I – Adopted FY 2024-25 City Work Program Budget Details 627
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ATTACHMENT A
RESOLUTION NO. 24-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO

ADOPTING AN OPERATING BUDGET FOR
FISCAL YEAR 2024-25 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 2024-25, 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 2024-25 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. 628
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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 4
th day of June, 2024, by the following vote:

Vote Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Sheila Mohan, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Kirsten Squarcia, City Clerk
________________________
Date
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Exhibit A
FISCAL YEAR 2024-25 PROPOSED OPERATING BUDGET

FINANCIAL OVERVIEW BY FUND
Revenue Categories General Fund Special Revenue
Fund
Debt Service
Fund
Capital Project
Funds
Enterprise
Funds
Internal Service
Funds All Funds
Sales Tax 11,648,962 - - - - - 11,648,962
Property Tax 33,174,977 - - - - - 33,174,977
Transient Occupancy 7,731,947 - - - - - 7,731,947
Utility Tax 4,130,140 - - - - - 4,130,140
Franchise Fees 3,509,346 - - - - - 3,509,346
Other Taxes 1,684,329 4,628,530 - - - - 6,312,859
Licenses & Permits 3,665,866 - - - - - 3,665,866
Use of Money & Property 4,697,122 1,062,944 - - 833,000 218,000 6,811,066 Intergovernmental 2,471,990 5,365,221 - - 14,000 - 7,851,211 Charges for Services 15,102,136 1,880,000 - - 5,247,500 4,717,314 26,946,950 Fines & Forfeitures 395,000 20,000 - - - - 415,000
Miscellaneous 1,210,653 - - - - - 1,210,653
Other Financing Sources 367,000 - - - - 468,984 835,984 Transfers In 15,000 1,779,000 2,676,200 - 514,000 2,380,398 7,364,598 TOTAL REVENUES $ 89,804,468 $ 14,735,695 $ 2,676,200 $ - $ 6,608,500 $ 7,784,696 $ 121,609,559 Appropriation Categories General Fund Special Revenue
Fund
Debt Service
Fund
Capital Project
Funds
Enterprise
Funds
Internal Service
Funds All Funds
Employee Compensation 23,388,317 1,785,475 - - 1,922,348 1,818,488 28,914,628 Employee Benefits 11,329,376 953,406 - - 839,347 2,409,499 15,531,628 Materials 5,775,194 1,047,713 - - 691,338 1,046,922 8,561,167 Contract Services 29,216,149 555,004 - - 3,661,846 1,798,760 35,231,759 Cost Allocation 10,638,580 2,030,054 - - 1,577,430 304,459 14,550,523 Capital Outlays - 880,224 - - 150,000 - 1,030,224
Special Projects 1,165,000 2,586,687 - - 212,733 440,000 4,404,420 Contingencies 254,580 8,985 - - 54,339 26,622 344,526
Debt Service - - 2,676,200 - - - 2,676,200
Transfers Out 7,349,598 15,000 - - - - 7,364,598
Other Financing Uses 925,000 - - - 161,841 798,599 1,885,440 TOTAL EXPENDITURES $ 90,041,794 $ 9,862,548 $ 2,676,200 $ - $ 9,271,222 $ 8,643,349 $ 120,495,113

CHANGE IN FUND BALANCE/

NET POSITION
$ (237,326) $ 4,873,147 $ - $ (2,662,722) - $ $ (858,653) $ 1,114,446 2024-25 Proposed Budget
2024-25 Proposed Budget
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ATTACHMENT B
RESOLUTION NO. 24-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO

ADOPTING A CAPITAL IMPROVEMENT BUDGET FOR
FISCAL YEAR 2024-25 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
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 2024-25, as submitted by the City Manager in the proposed budget and amended during the budget study sessions, are sufficient to cover appropriations.

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 4
th day of June, 2024, by the following vote:
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Vote Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Sheila Mohan, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Kirsten Squarcia, City Clerk
________________________
Date
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Exhibit A
FISCAL YEAR 2024-25 PROPOSED CAPITAL IMPROVEMENT PROGRAM BUDGET

FINANCIAL OVERVIEW BY FUND
Revenue Categories General Fund Special Revenue
Fund
Debt Service
Fund
Capital Project
Funds
Enterprise
Funds
Internal Service
Funds All Funds
Sales Tax - - - - - - -
Property Tax - - - - - - -
Transient Occupancy - - - - - - -
Utility Tax - - - - - - -
Franchise Fees - - - - - - -
Other Taxes - - - - - - -
Licenses & Permits - - - - - - -
Use of Money & Property - - - - - - -
Intergovernmental - 3,631,220 - 5,850,000 - - 9,481,220 Charges for Services - - - - - - -
Fines & Forfeitures - - - - - - -
Miscellaneous - - - - - - -
Other Financing Sources - - - - - - -
Transfers In - 462,580 - 7,785,000 - - 8,247,580
TOTAL REVENUES $ - $ 4,093,800 $ - $ 13,635,000 $ - $ - $ 17,728,800 Appropriation Categories General Fund Special Revenue
Fund
Debt Service
Fund
Capital Project
Funds
Enterprise
Funds
Internal Service
Funds All Funds
Employee Compensation - - - - - - -
Employee Benefits - - - - - - -
Materials - - - - - - -
Contract Services - - - 175,000 - - 175,000
Cost Allocation - - - - - - -
Capital Outlays - 4,093,800 - 13,635,000 - - 17,728,800 Special Projects - - - - - - -
Contingencies - - - - - - -
Debt Service - - - - - - -
Transfers Out - - - 8,247,580 - - 8,247,580
Other Financing Uses - - - - - - -
TOTAL EXPENDITURES $ - $ 4,093,800 $ - $ 22,057,580 $ - $ - $ 26,151,380

CHANGE IN FUND BALANCE/

NET POSITION
$ - $ - $ - $ (8,422,580) $ - $ - $ (8,422,580)
2024-25 Proposed Budget
2024-25 Proposed Budget
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ATTACHMENT C
RESOLUTION NO. 24-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO

ESTABLISHING AND ADOPTING THE APPROPRIATION
LIMIT IN THE AMOUNT OF $132,542,385 FOR FISCAL YEAR 2024-25 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 0.02%, and the California per capita personal income change is 3.62%; and WHEREAS, in computing the 2024-25 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 2024-25 fiscal appropriation limit of $132,542,385, 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 4
th day of June, 2024, by the following vote:
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Vote Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Sheila Mohan, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Kirsten Squarcia, City Clerk
________________________
Date
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FY 2024-25 Budget Adjustments Since May 1
Operating Budget Summary

ATTACHMENT D
Fund Revenue Expenditure Change in Fund Balance Description GENERAL FUND100 General Fund ‐ 64,350 (64,350) Animal services contract increase 100 General Fund (21,200) ‐ (21,200) Reduce permit parking and crane lift fees 100 General Fund ‐ 2,050 (2,050) Artists Award Program
100 General Fund ‐ 32,500 (32,500) Community Grant Funding 100 General Fund ‐ 3,905 (3,905) Festival Costs
TOTAL GENERAL FUND (21,200) 102,805 (124,005)
SPECIAL REVENUE FUNDS270 Transportation           ‐ 212,614 212,614 Increase SB 1 (Gas Tax) Revenue Estimate TOTAL SPECIAL REVENUE FUNDS 212,614 ‐ 212,614TOTAL ALL FUNDS $ 191,414 $ 102,805 $ 88,609 636
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FY 2024-25 Budget Adjustments Since May 1
GL Account Detail

ATTACHMENT D
GL Account Revenue Expenditure Type Description
100‐74‐202 700‐702 ‐ 64,350 Operating Increase animal services contract 100‐82‐804 450‐402 (21,200) ‐ Operating Reduce permit parking and crane lift fees 100‐11‐142 600‐623 ‐ 2,050 Operating Elimination of Library Extra Hours Funding 100‐10‐101 700‐702 ‐ 32,500 Operating Community Grant Funding 100‐61‐605 700‐705 ‐ 3,905 Operating Festival Fee Waivers 270‐85‐821 440‐437 212,614 ‐ Transportation Increase SB1 Revenue TOTAL $ 191,414 $ 102,805
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ATTACHMENT E
Appropriation Limit for Fiscal Year 2024-25
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 over the last ten years.

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.
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ATTACHMENT E
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: 3.62% Population Factor
 (B) Percent Change in County Population: 0.02%
 (C) Percent Change in City Population: -0.31%
The City multiplied the FY 2023-24 appropriations limit by Price Factor (A) and Population Factor (B) to calculate the FY 2024-25 appropriations limit, as shown below:

FY 2023-24 Appropriations Limit $127,886,394
Price Factor (A) 1.0362
Population Factor (B) 1.0002
FY 2024-25 Appropriations Limit $132,542,385
The City’s FY 2024-25 appropriations limit is $132,542,385, an increase of $4,655,991, or 3.6%, from the prior year.

Fiscal
Year Appropriations Limit
Change in
Appropriations Limit
Percent Change in
Appropriations Limit
2015-16 $ 86,100,308 $ 4,094,677 5.0%
2016-17 $ 91,867,014 $ 5,766,706 6.7%
2017-18 $ 96,028,488 $ 4,161,474 4.5%
2018-19 $ 100,538,305 $ 4,509,818 4.7%
2019-20 $ 104,753,580 $ 4,215,275 4.2%
2020-21 $ 109,062,934 $ 4,309,354 4.1%
2021-22 $ 114,666,491 $ 5,603,558 5.1%
2022-23 $ 122,756,522 $ 8,090,031 7.1%
2023-24 $ 127,886,394 $ 5,129,872 4.2%
2024-25 $ 132,542,385 $ 4,655,991 3.6%
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April 30, 2024
Dear Fiscal Officer:

Price Factor and Population Information
Appropriations Limit
California Revenue and Taxation Code section 2227 requires the Department of 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, 2024, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2024-25. Attachment A provides the change in California’s per capita personal income and an example for utilizing the factors to calculate the 2024-25 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. 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, 2024. 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.
/s Richard Gillihan

RICHARD GILLIHAN
Chief Operating Officer
Attachment
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May 2024
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 2024-25 appropriation limit is:

Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2024-25 3.62
B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2024-25 appropriation limit.
2024-25:

Per Capita Cost of Living Change = 3.62 percent
Population Change = 0.17 percent
Per Capita Cost of Living converted to a ratio: 3.62 + 100 = 1.0362 100
Population converted to a ratio: 0.17 + 100 = 1.0017
100
Calculation of factor for FY 2024-25: 1.0362 x 1.0017 = 1.0379

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Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 County
City
Percent Change
23-24
--- Population Minus Exclusions ---
1-1-23 1-1-24
Total
Population
1-1-24
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
-0.22
-0.31

0.80 -0.19
-0.01
-0.41

0.17 0.51

0.11 2.45
-0.21
-0.13
-0.26
-0.08

0.24 -0.53
43,191
59,656
60,419
31,316
8,477
33,368
81,635
3,564
46,333
84,463
68,093
970,772
132,386
30,845
157,187
90,063
43,095
59,471
60,904
31,255
8,476
33,230
81,773
3,582
46,384
86,535
67,953
969,491
132,048
30,819
157,566
89,584
43,095
59,471
61,033
31,255
8,476
33,230
81,773
3,582
46,384
86,535
67,973
969,491
132,048
30,819
157,566
90,467
County Total 0.02 1,901,768 1,902,166 1,903,198
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes. 642
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1 CITY COUNCIL STAFF REPORT
Meeting: June 4, 2024
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: I am confused as to the new projects only lists three projects, and project numbers 12- 16, & 20 are new projects that was just proposed. Why are they listed under ongoing projects? Can we correct the new projects total? (Councilmember Chao) Staff response: The City Work Program projects shown in the FY 2024-25 Proposed Budget are organized based on funding availability. Projects 17, 18, and 19, are the only projects that require additional funding. An updated table to clarify this will be included as an attachment to the Staff Report for the June 4 City Council meeting.

Q2: Can staff explain how the special projects will be worked into the budget because the special projects page include items from the previous years. If they do get added on at Q1, will we have revenue that will go along with it? More specifically the carryovers in attachment C within the Q3 update. (Councilmember Moore) Staff response: For Special Projectsthat are not completed within the fiscal year, their appropriations are carried over to the next fiscal year as part of the City’s year-end close process. Any projects with a dedicated revenue source other than the General Fund, for example, grants would carryover both the appropriation and revenue. Staff will update the carryover attachment provided in the quarterly reports to reflect dedicated revenue sources where applicable along with appropriations. 643
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RESOLUTION NO. 2024- 04

A RESOLUTION OF THE PLANNING COMMISSION

OF THE CITY OF CUPERTINO FINDING THE PROPOSED
CAPITAL IMPROVEMENT PROGRAM FISCAL YEAR 2024 – 2025

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) 2024- 2025 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 April 9, 2024, 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 does 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, 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 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 2024- 2025) conforms to the City’ s General Plan ( Community Vision 2015- 2040.)
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Resolution No. 2024- 04