Cupertino City Council
July 16, 2024

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(SPACE ABOVE THIS LINE FOR RECORDER’S USE)

AGREEMENT FOR LEASE OF

REAL PROPERTY (WATER SYSTEM)

RECORDING REQUESTED BY
City of Cupertino

WHEN RECORDED MAIL TO
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014
(Exempt from recording fees per
Govt. Code § 27383.)

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TABLE OF CONTENTS
RECITALS ..................................................................................................................................... 1 TERMS AND CONDITIONS .................................................................................................... 2 Article 1 – Definitions ................................................................................................................. 2 Article 2 – Lease of Water System ............................................................................................. 7

2.1 Lease. ................................................................................................................................7

2.2 Term. .................................................................................................................................7

2.3 Use of Water System ......................................................................................................7

2.4 Title ...................................................................................................................................8

2.5 Compensation .................................................................................................................8

2.6 Net Lease..........................................................................................................................9

2.7 Taxes and Assessments. ...............................................................................................10

2.8 Liens and Encumbrances .............................................................................................10 Article 3 – Operation of Water System ................................................................................... 10

3.1 General ...........................................................................................................................10

3.2 Maintenance ..................................................................................................................11

3.3 Repair .............................................................................................................................11

3.4 Capital Improvements .................................................................................................11

3.5 SWRCB Permit ..............................................................................................................15

3.6 Customer Services ........................................................................................................15

3.7 Emergency Services ......................................................................................................15

3.8 Water Quality Testing. .................................................................................................16

3.9 Other Services................................................................................................................16

3.10 Reports ........................................................................................................................16

3.11 Hazardous Substances .............................................................................................18

3.12 Water Supply .............................................................................................................19

3.13 City Access. ................................................................................................................19

3.14 City Inspection and Oversight. ...............................................................................19 Article 4 – Customer Rates and Billing .................................................................................. 20

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4.1 Customer Rates .............................................................................................................20

4.2 Customer Billing and Collections ...............................................................................21 Article 5 – Insurance and Indemnity ...................................................................................... 22

5.1 Insurance ........................................................................................................................22

5.2 Indemnity .......................................................................................................................24 Article 6 – Default, Termination, and Expiration ................................................................. 25

6.1 Default ............................................................................................................................25

6.2 Surrender Upon Expiration or Termination .............................................................28

6.3 Transition Period. .........................................................................................................28

6.4 Dispute Resolution .......................................................................................................28 Article 7 – Miscellaneous Provisions ...................................................................................... 29

7.1 Recitals. ..........................................................................................................................29

7.2 Notice .............................................................................................................................29

7.3 Compliance with Laws ................................................................................................30

7.4 Nondiscrimination ........................................................................................................30

7.5 Force Majeure. ...............................................................................................................30

7.6 Assignment ....................................................................................................................31

7.7 Governing Law and Venue .........................................................................................31

7.8 Waiver ............................................................................................................................31

7.9 Integration......................................................................................................................31

7.10 Amendment ...............................................................................................................31

7.11 Interpretation .............................................................................................................32

7.12 Severability .................................................................................................................32

7.13 Execution in Counterparts .......................................................................................32

7.14 Authorization .............................................................................................................32 City of Cupertino
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CITY OF CUPERTINO

AGREEMENT FOR LEASE OF

REAL PROPERTY (WATER SYSTEM)

This Agreement for Lease of Real Property (Water System) (“ Lease”) is entered into on , by and between the City of Cupertino (“City”), and San Jose Water Company, a California Corporation (“Lessee”) (individually, a “Party” and collectively, the “Parties”).

RECITALS

A. Prior to City’s incorporation in 1955, and continuing thereafter, the Cupertino area was provided with water service by investor -owned private utility companies.

B. From about 1960 until October 1, 1997, in the areas not already served by the private water companies, City provided water service to approximately 4,200 (currently approximately 4,600) metered customers in the service area described in Exhibit A attached hereto (“Service Area”).

C. As a result, Cupertino has been served by three roughly equal -size water systems: a City-owned system within the Service Area and two other systems owned and operated by investor-owned utilities.

D. Within the Service Area, City is the owner of certain real property, easements and rights of way and those certain reservoirs, pipes, wells, pumps and appurtenant facilities (including without limitation buildings, pump houses, sheds and other structures) constituting all of City’s water system (“ Water System”) as generally depicted in the Water System Map attached as Exhibit B hereto.

E. City has no legal obligation to provide public water service to its residents and desires to allow those services to be provided City -wide exclusively by investor - owned utilities.

F. The Lessee has been operating the Water System since 1997 pursuant to a lease agreement with the City (“1997 Lease”). The term of the 1997 Lease will expire on September 30, 2024.

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G. Pursuant to the requirements of Public Utilities Code section 10061, the City issued a Request for Proposals on July 31, 2023 (“RFP”) and received one responsive proposal from qualified water system operators. During a public hearing on July 16, 2024, which was scheduled and noticed pursuant to Public Utilities Code section 10061 and Government Code section 6066, the City Council examined the proposals and staff recommendations, and found that Lessee was the best qualified operator to continue to provide eq ual or better service to the customers of the Water System for just compensation as specified herein.

H. Following expiration of the 1997 Lease and as of the Effective Date, the Lessee will continue operating the Water System in accordance with the terms of this Lease.

I. As consideration for the valuable property, rights, and privileges granted under this Lease by the City, acting in its proprietary capacity, to Lessee, the Parties mutually agree that the reasonable just compensation will be comprised of the one -time Concession Fee, the Annual Investment Rent, and the annual Franchise Fee, as further specified herein.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows:

TERMS AND CONDITIONS
Article 1 – Definitions

The following definitions apply to capitalized terms used in the Lease, including the recitals and exhibits hereto, unless otherwise specified:
1997 Lease has the meaning given in the Recitals.

Annual Investment Rent means the annual rent for the Water System to be paid by Lessee to the City, the proceeds of which will be allocated by the City to fund Capital Improvement Projects. The initial Annual Investment Rent shall be $1,800,000, and shall be adjusted annually as described in Section 2.5(B) (Annual Investment Rent).

Asset Management Plan means the 2019 Water Distribution System Asset Management City of Cupertino
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Plan, as updated by the memorandum dated December 8, 2021 (“2021 Memorandum ”), prepared by Kayuga Solution, attached as Exhibit C to this Lease, as may be amended from time to time.

AWWA Handbook means the most current version of the Water Distribution Systems Handbook as published by the American Water Works Association.

Capital Improvement means any physical addition, betterment, replacement, or improvement to the Water System, excluding Maintenance or Repair, which will either enhance the Water System’s overall value, increase its useful life, improve its performance or adapt it to new uses.

Capital Improvement Plan means the plan developed by the Parties and approved by the City for Capital Improvement Projects to be implemented by Lessee, attached hereto as Exhibit D, and which may be amended from time to time by the Parties as further specified in Section 3.4 (Capital Improvements), herein.

Capital Improvement Project means a project for construction of a Capital Improvement pursuant to a City- approved design, and includes all physical requirements for the project, including, as applicable, related demolition and removal of existing components in accordance with Laws, and which is subject to City reimbursement for Project Costs as more particularly described in Section 3.4 (Capital Improvements).

City means the City of Cupertino.

Concession Fee means the one -time fee more particularly described in Section 2.5 (Compensation) herein.

Consequential Damages means any special, indirect, consequential, or incidental damages arising out of or relating to this Lease that do not flow directly and immediately from an injurious act but that result indirectly from an action or failure to act, such as revenue losses, loss of use, cost of capital, debt service, loss of profit on related contracts, administrative costs, loss of bonding capacity, lost opportunity, claims of taxpayers and other indirect damage, whether arising out of breach of this Lease, tort (including negligence) or any other theory of liability.

Construction Cost Index means the most current version of the Construction Cost Index for San Francisco published by Engineering News Record.

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County means Santa Clara County.

CPUC means the California Public Utilities Commission.

Customer means a retail customer of the Water System served by a physical connection to the Water System.

Director means the Director of the City’s Public Works Department, unless otherwise indicated by the context.

Effective Date means the date that the Lease becomes effective as more particularly described in Section 2.2 (Term) herein.

Environmental Laws means any Federal, State or local laws or any regulations promulgated pursuant to such laws, as such laws or regulations may from time to time be amended, applicable to the Water System, groundwater or the utility services, regulating or imposing liability or standards of conduct concerning or relating to (1) the protection of human health or the environment, (2) the regulation, use or exposure to Hazardous Substances or (3) the operation, Maintenance, construction, Repair or rehabilitation of the Water System.

Force Majeure Event has the meaning set forth in Section 7.5 (Force Majeure) herein.

Franchise Fee means the annual fee more particularly described in Section 2.5 (Compensation) herein.

Hard Costs mean the reasonable direct costs for construction of a Capital Improvement Project, including but not limited to labor, equipment, materials, permitting, traffic control and inspection, but excluding costs for planning, design, project management, administration, or other such “soft” costs.

Hazardous Substance means any solid, liquid, gas, odor, heat, sound, vibration, radiation or other substance, material or waste which is defined as contaminant, pollutant, dangerous substance, toxic substance, hazardous waste, hazardous material, hazardous substance, extremely hazardous waste, restricted hazardous waste, residual waste, solid waste or similar term which is or becomes regulated by applicable Environmental Laws (as defined herein) or which is classified as hazardous or toxic under applicable Environmental Laws (including, without limitation, hydrocarbons, petroleum, City of Cupertino
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gasoline, diesel fuel, crude oil or any products, other petroleum hydrocarbons, polychlorinated biphenyls, asbestos, and urea formaldehyde foam insulation, or their by- products or fractions thereof).

Indemnified Person has the meaning given Section 3.11(B) (Indemnity).

Laws means all applicable laws, rules, regulations, ordinances, directives, covenants, easements and restrictions of record, permits, and requirements of any applicable fire insurance underwriter or rating bureau, relating in any manner to the Water System or the groundwater, including, but not limited to, SWRCB Permit; the SCVWD Contract and any amendments thereto; and the foregoing items pertaining to: (1) industrial hygiene, (2) environmental conditions on, in, under or about the Water System or the groundwater, including soil and groundwater conditions, (3) the use, generation, manufacture, production, installation, maintenance, removal, transportation, storage, spill or release of any Hazardous Substance or storage tank, and (4) prevailing wage requirements, payment bond requirements, working hours and workers compensation insurance, unemployment insurance benefits, Federal Insurance Contributions Act laws, and business license requirements now in effect or which may hereafter come into effect, and whether or not reflecting a change in policy from any previously existing policy.

Lease means this A greement for Lease of Real Property (Water System), including all exhibits attached hereto or incorporated herein, and as amended by any duly executed amendments, if any.

Lessee has the meaning given in the Recital and includes its officers, assigns, and successors.

Maintain or Maintenance means routine maintenance activities or actions, other than Capital Improvements, to keep an asset in good working order so that it will operate as required under this Lease.

Maintenance Plan means the Maintenance Plan attached as Exhibit E hereto, as may be amended from time to time.

Operating Standards means, collectively, the operation -related requirements in this Lease, including the exhibits hereto, the applicable standards in the most current AWWA Handbook or other applicable water operation standards, and requirements of Laws.

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Project Costs means all Hard Costs and Soft Costs, as defined, in connection with Capital Improvement Projects.

Rates means the rates, surcharges, surcredits, and other service charges or fees and penalties that Lessee may impose on Customers for the water services provided pursuant to this Lease.

Regulatory Cap means the maximum benchmark for rates charged to Customers as more particularly described in Section 4.1 (Customer Rates) herein.

Repair means activities or actions, other than Capital Improvements, to restore an asset to the condition and level of service required by this Lease after an asset has failed or has been damaged.

RFP means the Request for Proposals issued by the City on or about July 31, 2023, for leasing the Water System pursuant to Public Utilities Code section 10061.

SCVWD means the Santa Clara Valley Water District (also known as “Valley Water”).

SCVWD Contract means the contract between the City and SCVWD for a supply of treated water, a copy of which is attached hereto as Exhibit F.

Section means a numbered section of this Lease, unless otherwise indicated by the context.

Service Area has the meaning given in the Recitals.

Soft Costs means all other costs and expenses paid or incurred in connection with Capital Improvement Projects which are not Hard Costs, including costs for planning, design, project management, administration, and construction management. Except as set out in Section 3.4(J) (Lessee’s Responsibilities), the City will pay for all soft costs up to 2 4% of the total Hard Costs.

State means the State of California.

SWRCB means the State Water Resources Control Board.

SWRCB Permit means the SWRCB Domestic Water Supply Permit 68- 43, as amended, which is incorporated herein by reference.

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Term means the existing term of this Lease as more particularly described in Section 2.2 (Term) herein, including any duly authorized and executed extensions thereto, if any.

Water System has the meaning given in the Recitals.

Article 2 – Lease of Water System

2.1 Lease. City hereby leases to Lessee, and Lessee hereby leases from City, the Water System as described in Exhibit B. Except as specifically set forth in this Lease, the Water System is leased in an “as is” condition. City also grants a concession to Lessee to provide water service within the Service Area, and in connection therewith, to use, possess, operate, manage, Maintain, Repair, rehabilitate, expand, and improve the Water System in exchange for those Rates Lessee establishes in accordance with and pursuant to this Lease. In conveying this interest in governmental property to a private party, neither City nor any of its agents has made any representation or warranties with respect to the Water System except as specifically set forth in this Lease.

2.2 Term. The term of this Lease will commence on October 1, 2024_ (“Effective Date”) and will continue for a period of 12 years, unless terminated earlier as otherwise provided in Article 6 herein (“ Term”). Notwithstanding the foregoing, if mutually agreed, the Parties may extend the Term for an additional period of up to eight years, for a total Term of up to twenty years. For the Term to be extended, one of the Parties must provide written notice to the other Party requesting extension of the original Term n o later than 180 days prior to expiration of the original Term, and subject to mutual agreement on the duration and conditions for any such extension, the Lease will be amended to so extend the Term.

2.3 Use of Water System. At all times during the Term, Lessee will use the Water System for the purpose of furnishing potable water service, including water service for fire protection, to all Customers in accordance with the applicable Operating Standards relating to service, sub ject to the provisions of this Lease.

Provision of water from the Water System outside of the Service Area is prohibited unless authorized in writing in advance by the Director. (A) Property. Lessee will not retire, sell, transfer, convey, dispose of, or encumber City of Cupertino
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any real property or personal property of the Water System without City’s duly authorized prior written permission.
(B) City’s Right to Use . City retains the full right to use or continue to use any portion(s) of the Water System, including easements, tanks, pump station, wells, buildings, and appurtenances, for any legal purpose which does not interfere with Lessee’s use of the Water System to furnish water service to Customers.

(C) Development. City reserves the right to approve future developments to be served by the Water System subject to available water supply and applicable Laws, including the requirements of the SWRCB Permit and provisions of the SCVWD Contract. Notwithstanding the foregoin g, all connections to the Water System required for future developments shall be performed by Lessee or by a contractor approved by Lessee at the sole expense of the developer. Lessee shall not be responsible or liable for any cost associated with such connections.

2.4 Title. City retains title to the Water System. Lessee will not own the Water System or any part thereof or any interest therein during the Term of this Lease, including ownership of any Capital Improvements made during the Term. Title to all Capital Improvements, improvements from Maintenance or Repair, or improvements installed for City-approved development made during the Term will vest in City upon acceptance by or beneficial use by City, whichever occurs first. No such vesting of title of any improvement will alter or limit Lessee’s obligations for Repair and Maintenance of the Water System as set forth herein.

2.5 Compensation. As bargained-for consideration for the benefits it derives from this Lease, Lessee will pay the City the amounts set forth below. The Parties agree and acknowledge that the following payments to City are not levies imposed by City on Lessee in its governmental capacity, but rather voluntary payments as fair and reasonable compensation for a valuable interest in the Water System and the use of City’s property and resources related to the Water System. The Parties further agree and acknowledge that the amounts to be paid pursuant to this Section were determined by a fair and competitive procurement process and good faith negotiation. The following payments will be legally incident on Lessee and the legal duty to pay will remain with Lessee regardless of how Lessee opts, in its sole discretion, to fund the payments.
(A) Concession Fee. Lessee will pay the City a one-time Concession Fee of $22,100,000 within 30 days following the Effective Date of this Lease. The City of Cupertino
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Concession Fee is consideration for Lessee’s right to sell water from the Water System. Except as set out in Section 6.2 (Termination of Lease for Convenience) , the Concession Fee is not a security deposit and is not refundable. The Concession Fee may be used to fund Cap ital Improvement Projects or for any other legal purposes the City desires.
(B) Annual Investment Rent. Upon the Effective Date and on each anniversary of the Effective Date each year thereafter during the Term, Lessee will pay to City as Annual Investment Rent, the sum of $1,800,000, subject to an annual adjustment based on the Construction Cost Index for the San Francisco Bay Area , applied on a cumulative basis (i.e., after the Effective Date, by adjusting the prior year’s Annual Investment Rent). City will notify Lessee in writing at least 30 days prior to the date that the Annual Investment Rent is due of the adjusted amount pursuant to the Construction Cost Index, along with a calculation evidencing the adjusted amount. The Annual Investment Rent will be used, up to the amount recommended in the approved Capital Improvement Plan, to reimburse Lessee for the completion of City- approved Capit al Improvement Projects, and excess amounts which have not been reimbursed to Lessee in any year will be carried forward to reimburse Capital Improvement Projects in the following year, in each case as further specified in Section 3.4 (Capital Improvements ) and the Capital Improvements Plan. In the event that Lessee is due reimbursements to which the City agreed (in writing), were undisputed, due and payable, for Capital Improvement Projects from the previous year, the Annual Investment Rent will be reduced by any amount owing to Lessee for such Capital Improvement Projects in satisfaction of the amounts owing to Lessee and any remaining amount will be a debt due and payable from the City to Lessee.

(C) Franchise Fee. As consideration for the City’s costs to administer this Lease, including the concession and franchise rights granted herein, Lessee will pay City an annual Franchise Fee, due the first year by November 1, 2025, and annually thereafter during the Term. The amount of the Franchise Fee will be equal to two percent of Lessee’s annual gross receipts from Customers for the preceding year from the use, operation and possession of the Water System (with the total prorated for the final year of the Term if less than a 12-month period). The Parties agree that this constitutes fair and reasonable compensation for City administration of this Lease and the franchise conferred herein.

2.6 Net Lease. This Lease will be deemed and construed to be a “net lease” and Lessee City of Cupertino
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hereby agrees that the Annual Investment Rent is an absolute net return to City free and clear of any expenses, charges or setoffs other than as set forth in this Lease.

2.7 Taxes and Assessments. Lessee will pay all taxes, assessments, fees, levies, charges, license or permit fees and other governmental charges of any kind or nature which are levied, charged, assessed or imposed during the Term of this Lease upon or against the Water System or the groundwater or the leasehold estate created hereby or which may be imposed upon any taxable interest of Lessee acquired pursuant to the Lease. Without limiting the generality of the foregoing, Lessee acknowledges that this Lease may create a possessory interest which may be subject to property taxation and that Lessee may be subject to the payment of property taxes levied on such interest. Any such tax will be the sole responsibility of Lessee.

2.8 Liens and Encumbrances. Lessee agrees to keep the Water System free and clear of all liens, security interests and encumbrances except for those consented to in writing and duly authorized by City. Lessee agrees to promptly pay all amounts due for materials, parts, labor, water, power and other consumables and supplies furnished at Lessee’s instance or request upon or to the Water System and to keep the Water System free and clear of all liens resulting from such payment obligations. Lessee agrees to require that any contractor performing work on City- owned property pursuant to a contract in excess of $25,000, will provide a payment bond in conformance with the requirements of Civil Code section 9550, as may be amended from time to time.

Article 3 – Operation of Water System

3.1 General. In addition to the requirements of this Lease, Lessee will operate the Water System in accordance with the Operating Standards. Lessee will, at its own expense, manage and operate the Water System and pay all costs and expenses of operating the Water System as specified herein, including, but not limited to, the costs of all water, utilities, Maintenance, Repair, and Capital Improvements, and all public charges, taxes and assessments of any nature whatsoever. City is not responsible for payment of any costs or expenses of any kind or character in connection with or related to the operation of or improvements to the Water System except and only to the extent as expressly set forth in this Lease (including, City of Cupertino
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but not limited to, City’s payment and reimbursement obligations set forth in this Lease).

3.2 Maintenance. At all times during the Term, Lessee will Maintain the assets of the Water System in good working order consistent with the requirements of the current Maintenance Plan, and consistent with the Operating Standards. Within 10 days of the anniversary of the Effective Date each year, Lessee will submit proposed revisions, if any, to the Maintenance Plan for City’s review and approval.

If requested by City, Lessee must revise and resubmit the proposed revised Maintenance Plan within a reasonable time period after request, such period to be no less than 3 weeks, but not more than 6 weeks, unless mutually agreed upon otherwise. Upon approval by the Director, the revised Maintenance Plan will supersede any prior version. All Maintenance will be provided in accordance with the approved Maintenance Plan to ensure the Water System remains in good condition and at Lessee’s sole expense. Maintenance work is not subject to reimbursement by City pursuant to Section 3.4 (Capital Improvements), below.

However, Maintenance work is subject to the requirements of Section 3.4(F) (True- Up of Capital Improvement Reimbursements) pertaining to contractors.

3.3 Repair. Lessee is solely responsible at Lessee’s sole expense for the prompt Repair of any assets of the Water System during the Term to ensure safe and effective operation of the Water System. If Lessee fails to effectuate any Repair on a timely basis, City reserves the right, but not the obligation, to have the Repair made at Lessee’s expense, such amount to be based on the documented costs incurred by City. Repair work is not subject to reimbursement by City pursuant to Section 3.4 (Capital Improvements), below. However, Repair work is subject to the requirements of Section 3.4(G) (Contractors) pertaining to contractors.

3.4 Capital Improvements. Lessee will be responsible for Capital Improvements to be designed, constructed, and completed during the Term in accordance with the terms of this Lease and the Asset Management Plan, and as further specified in the current Capital Improvement Plan and as required by Laws. The parties may update the Asset Management Plan on an annual basis to reflect Capital Improvement Projects completed during the prior year and to reflect the current needs of the Water System or as otherwise set out in clause (B) below. (A) Capital Improvement Plan . The Capital Improvement Plan in effect on the Effective Date of this Lease will include a five -year Capital Improvement Plan City of Cupertino
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approved by City, which also includes a list of Capital Improvement Projects which are to be prioritized for completion during the first three years of the Term.

Within 10 days of the anniversary of the Effective Date each year, Lessee will submit proposed revisions (including in accordance with clause (B) below), if any, to the current five -year Capital Improvement Plan for City’s review and approval, which approval shall not be withheld. Subject to clause (B) below , proposed revisions must be consistent with the current needs of the Water System, the Asset Management Plan, and the Operating Standards. If requested by City, Lessee must revise and resubmit the proposed revised Capital Improvement Plan within a reasonable time period after request, such perio d to be no less than 3 weeks, but not more than 6 weeks, unless mutually agreed upon otherwise. (B) Revisions to Capital Improvement Plan. In the event that (i) unexpected Capital Improvement Projects become necessary or the required Capital Improvement Projects, which in either case, result in investments beyond the Annual Investment Rent being required, or (ii) Capital Improvement Projects are delayed due to a n uninsurable Force Majeure Event, the existence of Hazardous Substances (other than caused by the negligence of Lessee) or City fault; or (iii) an uninsurable Force Majeure Event, the existence of Hazardous Substances or City fault occurs that has a material impact on the performance of Capital Improvements, then Lessee shall submit proposed revisions to the five -year Capital Improvement Plan together with adjustments to the Annual Investment Rent for City’s review and approval, in its reasonable discretion . Upon approval by City, the revised Capital Improvement Plan will supersede any prior version. If the City does not approve, Section 6.6 (Dispute Resolution) will apply to resolve the form of Ca pital Improvement Plan to be complied with by Lessee. .
(C) Minimum Annual Investment Rent. Subject to reimbursement under Section

3.4(D) (Reimbursable Costs), each year during the Term, Lessee is solely responsible for investing a minimum of the Annual Investment Rent in construction of Capital Improvement Projects consistent with the requirements of the current Capital Improvement Plan.

(D) Reimbursable Costs. Lessee will be solely responsible for the cost to design, bid, and manage any Capital Improvement Project. However, provided that Lessee has fully complied with the requirements of this Lease as it relates to the Capital Improvement Project, including this Section, City will reimburse Lessee for Project Costs expended on approved Capital Improvement Projects as set forth below, City of Cupertino
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with the total annual reimbursement capped at the amount of the Annual Investment Rent paid by Lessee for that one -year period. City’s reimbursement obligation will not exceed the amount recommended in the 2021 Memorandum with the Asset Management Plan and based on documented Project Costs for construction of the Capital Improvement Projects. In addition, City’s reimbursement obligation is limited to City -approved Capital Improvement Projects that are completed in accordance with the requirements of this Lease and accepted by City.
(E) Standards. The design and construction of Capital Improvement Projects must be consistent with the requirements of this Lease, the Asset Management Plan, the Operating Standards, and Laws (in effect at the time of the Capital Improvement Project), and will provide a minimum design life of ten years for pumps, mechanical and electrical equipment, 40 years for above-ground buildings and structures, and 50 years for underground pipes and lines, measured, in each case, from City acceptance of the relevant Capital Improvement Project. The plans or design for any Capital Improvement Project is subject to the timely and reasonable review and approval by the Director pursuant to the authority set forth in Section 2.28.040 of the Cupertino Municipal Code, or as otherwise required for purposes of design immunity pursuant to Government Code section 830.6.

(F) True-Up of Capital Improvement Reimbursements . Following the completion of each Capital Improvement Project, Lessee and City will confer in good faith regarding any true-up of City’s reimbursement obligation that may be necessary or appropriate based on the total Project Costs for each project, including for any increase in Project Costs due to City directed-change or City fault, the existence of Hazardous Substances (other than caused by the negligence of Lessee) impacting a Capital Improvement Project or uninsurable Force Majeure Events.

(G) Contractors. Lessee may contract with qualified, licensed design professionals or contractors for design and construction of Capital Improvement Projects or for Maintenance or Repairs. Lessee’s contracts for construction must require that the contractor comply with Laws and must warranty its work for a period of at least one year following City’s acceptance of the work. Lessee’s contracts with design professionals and contractors must include requirements for insurance and indemnity that are satisfactory to the City’s risk manager, which may include naming the City as an additional insured. Lessee is solely responsible for any such contracts, and any default by a contracting party will not relieve the City of Cupertino
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Lessee of its obligation to complete the Capital Improvements in accordance with this Lease.

(H) Cost Estimates . A minimum of 30 days prior to beginning any work on a Capital Improvement Project, Lessee will submit to the City an itemized schedule of anticipated Project Costs for each Capital Improvement Project for City review and approval.

(I) Progress Meetings and Reports. During construction of any Capital Improvement Projects, designated representatives for Lessee and City will participate in regularly scheduled construction progress meetings, as agreed upon between the Parties. At least five days before each such progress meetin g, Lessee will provide City with a summary report for each such Capital Improvement Project regarding progress of construction, including payments to date as a percentage of the total project, the percentage of the project that is complete, and the following:

(1) updates regarding estimated and actual Project Costs;

(2) update and narrative with respect to progress schedules;

(3) overview of the work currently being performed;
(4) narrative of any expected upcoming issues or changes in the design; and

(5) an updated list of any outstanding issues and action items.

(J) Lessee’s Responsibilities. Lessee is solely responsible for obtaining or providing all necessary services in connection with planning, design, direction, inspection, and supervision for each Capital Improvement Project, all necessary permits from applicable regulatory agencies (including City permits), for providing all materials, supplies, and equipment required for the completion, start -up, testing, commissioning, and performance of each Capital Improvement Project. Lessee is solely responsi ble for ensuri ng that all Capital Improvement Projects are constructed in compliance with applicable Laws, including prevailing wage and payment bond requirements. CEQA and NEPA approval documentation will be prepared by the Lessee. All Soft Costs for preparation of CEQA / NEPA City of Cupertino
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documentation shall be reimbursable and not subject to the 24% cap of Hard Costs as provided in the definition of Soft Costs.

(K) Documents. Within 30 days following completion of each Capital Improvement Project, Lessee will provide to City, in electronic form, and make available for review by City, a set of “as-built” plans for each Capital Improvement Project completed; all manuals required for operation and maintenance of the components of the Capital Improvement Project; and copies of warranties issued by the manufacturer of the equipment and materials installed as part of the Capital Improvement Project.
(L) Invoicing. Lessee must submit detailed monthly invoices to City for reimbursement for eligible Project Costs it has incurred for work completed during the preceding month on Capital Improvement Projects pursuant to this Section. Upon request by City, Lessee will prom ptly provide documentation to substantiate any of the costs for which it seeks reimbursement. The City will make payments on all undisputed amounts within 30 days after receiving a detailed invoice and any requested documentation. Within such 30 days perio d after receipt of a detailed invoice, if City disputes all or any portion of the invoice, City shall promptly provide Lessee reasonably detailed reason(s) for any disputed portions of such invoice and withhold the disputed amount, and Section 6.6 (Dispute Resolution) shall apply.

3.5 SWRCB Permit. Lessee is responsible for compliance with the terms of the SWRCB Permit and administration of the SWRCB Permit.

3.6 Customer Services. Lessee is solely responsible for satisfying all Customer service obligations associated with Lessee’s provision of water service as set forth herein and consistent with the Operating Standards.
(A) General Requirements. Lessee’s Customer service obligations include, but are not limited to, issuing detailed billing statements to all Customers for services provided; payment processing; responding to Customer inquiries on water service, bills, leaks or other concerns; collecting payments; processing applications for new or transfer of service; collection of Customer deposits for new service; collection of construction meter deposits; and investigation of Customer complaints.

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(B) Drought Education. Lessee will provide ongoing drought education , by providing billing inserts about water conservation during drought, holding water conservation workshops and any other mutually agreed upon activities , to Customers consistent with Lessee’s standard drought education programs provided to similarly situated customers and will enforce drought -related restrictions on water use as required by Laws or recommendations of SCVWD, including any City -wide requirements imposed by the City acting in it s governmental capacity. Lessee will submit an annual written report on drought education to City within 10 days of the anniversary of the Effective Date for each year during the Term. The report must summarize Lessee’s efforts to educate Customers and to enforce any applicable drought- related restrictions. The annual report must illustrate the effectiveness of Lessee’s efforts in one or more summary tables or graphs showing the change in annual water use by residential and by commercial Customers.

(C) Confidentiality. Lessee will use all commercially reasonable efforts to keep all Customer information confidential, whether received from City or developed during the Term, and in compliance with Laws.

3.7 Emergency Services. Lessee is solely responsible for maintaining 24-hour on-call responses to emergency calls or Customer inquiries; providing an emergency or natural disaster operations plan; maintaining an emergency communications system; providing or having immediate access to equipment required to perform emergency repair work to vital Water System equipment and water mains, including providing emergency backup generator at the Mann Pumping station or anywhere else that may be needed to ensure uninterrupted delivery of potable water to Customers.

3.8 Water Quality Testing. Lessee is solely responsible for performing or causing to be performed by a laboratory certified by the State, any and all water sampling, analysis, testing and reporting as required by Laws governing water sources, distribution mains or Customer premises, including Laws o f the U.S.

Environmental Protection Agency, State Department of Health Services and Office of Drinking Water, and the County Environmental Health Department. This obligation includes, but is not limited to: scheduling and collecting water samples to test f or microbiological, inorganic and organic constituents; transportation to certified lab; preparation of monitoring plans; sample collection training; reporting to appropriate regulator(s); record keeping; analysis interpretation; special or City of Cupertino
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emergency sample collection and analysis; emergency notification to affected Customers, if required; preparation and distribution of any and all published and distributed Customer reports on water quality; management of a cross -control program; new well or water source sampling and analysis; response to Customer inquiries on water quality issues; conducting annual system survey with State Department of Health Services; obtaining permits and compliance with any air district with jurisdiction over the Water S ystem; providing hazardous materials control program, and ensuring any required operator certification is in compliance with Laws.

3.9 Other Services. Lessee is solely responsible, at its own expense, for implementing any City, County, SCVWD, State or federal water conservation program as established by mandate or law during the term ; maintaining distribution system maps and plat maps; preparing any required urban water management plans; and in general, doing all such acts and performing all such services as required to operate the Water System as required by this Lease. All maps, pla ns and records required by this Section and/or through the operation, Maintenance and improvement of the Water System will be transmitted to City at a minimum frequency as specified in Section 3.10 (Reports).

3.10 Reports. In addition to the reporting requirements specified elsewhere in this Lease, including for Capital Improvement Projects set forth in Section 3.4 (Capital Improvements), Lessee will provide City with written reports related to Lessee’s operation of the Water System, as specified herein.

(A) Annual Summaries. Each year during the Term, within 10 days of the anniversary of the Effective Date, Lessee will submit summary reports regarding activities during the preceding year, for the following:
(1) Annual Operations Report: General status of overall operation , expenditures and revenue of the Water System including priority needs and concerns.

(2) Annual Maintenance Report: Maintenance completed, in progress, and scheduled, including compliance with the current Maintenance Plan.

(3) Annual Repair Report: Repairs completed, in progress, and needed.

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(4) Annual Report on Capital Improvement Projects: Capital Improvement Projects planned, in progress, and completed, including compliance with the current Capital Improvement Plan.
(5) Annual Report on Developer -funded Expansions to Water System:

Summarize status of all developer-funded expansions to the Water System, including percentage of completion and pertinent comments relative to the project.

(6) Annual Customer Service Report: List Customer service requests and complaints, including the number of calls received by issue (e.g., general, lack of water, billing, water quality, etc.) and resolution of each such Customer request or complaint.
(7) Annual Water Quality Report: Water quality analysis of microbiological testing, including quantity of water delivered to all Customer types, quantity of water delivered from SCVWD, quantity of water delivered from each well site, estimated annual amount of Water System loss, number of water quality tests completed, number of water quality samples testing positive for coliform and action taken, results of annual water quality tests for all constituents tested and action taken for

any constituent testing out of range.

(B) Periodically. In addition to any other reporting requirement set forth herein, Lessee will provide any additional report or information that is reasonably requested by City to ensure operation and Maintenance of the Water System in compliance with this Lease. Any water quality testing positive for coliform or constituent exceeding testing range is to be immediately reported to the City. (C) End of Term. Within 30 days following expiration of the Term or early termination of the Lease, whichever occurs first, Lessee will provide City with an updated version of all of the annual reports specified above. This provision will survive expiration or termination of the Lease.

3.11 Hazardous Substances.

(A) Release of Hazardous Substances. Lessee will not cause or permit to occur any release, generation, manufacture, storage, treatment, transportation, or disposal City of Cupertino
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of Hazardous Substance on, in, under, or from the Water System or the groundwater or any portion of it in violation of Laws. If Lessee does cause any release or disposal of any Hazardous Substance on, in, or under the Water System or any portion of it, Lessee, at its own cost and expense, will immediately take such action as is necessary to detain the spread of and remove the Hazardous Substance as required by applicable Law. Lessee will promptly notify City of any release or disposal (of which Lessee has knowledge) of any Hazardous Substance on, in, under or from the Water System or the groundwater. If Hazardous Substances other than those caused or released by Lessee exist or occur on, in, under or from the Water System or the groundwater, Lessee shall not be responsible for the costs of any action to address, remediate, characterize, remove, treat, dispose, transport or handle such Hazardous Substances and the costs thereof shall be reimbursed to Lessee from City or deducted from any amounts owing from Lessee to City. Lessee is responsible for ensuring all water delivered from the water system is free of Hazardous Substances (B) Indemnity. Lessee will indemnify, defend with counsel acceptable to City and hold harmless City and its officers, agents and employees (each such person and entity being referred to as an " Indemnified Person") from and against all losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, costs, judgments, suits, proceedings, damages (including consequential damages), disbursements or expenses of any kind (including attorneys’ and experts’ fees and expenses and fees and expenses inc urred in investigating, defending, or prosecuting any litigation, claims, or proceeding) that may at any time be imposed upon, incurred by, asserted, or awarded against City in connection with or arising from or out of: (1) any Hazardous Substance, on, in, under, or affecting all or any portion of the Water System or the groundwater caused or released by Lessee, excluding any unknown pre-existing Hazardous Substance or any Hazardous Substance released, generated or disposed by City; (2) any material breach of any covenant or agreement of Lessee contained or referred to in this Section relating to Hazardous Substances for which Lessee is responsible under this Lease; (3) any violation or claim of violation by Lessee of any Laws; or (4) the imposition of any lien for the recovery of any costs for environmental cleanup or other response costs relating to the release or threatened release of Hazardous Substance, excluding any unknown pre-existing Hazardous Substance or any Hazardous Substance released, generated or disposed by City. The expiration or termination of this Lease and/or the termination of Lessee’s right to possession will not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring City of Cupertino
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or accruing during the Term by reason of Lessee’s occupancy of the Water System and the groundwater.

3.12 Water Supply. The Water System is supplied with water pursuant to the SCVWD Contract. Lessee will not modify or take water supply wells serving the Water System out of permanent service without the express written permission of the Director. Lessee will purchase water pursuant to and comply with requirements of the SCVWD Contract and will immediately notify City if any provision of the SCVWD Contract is violated by Lessee.

3.13 City Access. City and City’s agents have the right to enter the Water System at any time in the case of an emergency, and otherwise at reasonable times and on reasonable prior notice for the following purposes: (i) to determine whether the Water System is in the condition as required by this Lease and whether Lessee is complying with its obligations under this Lease, (ii) to serve, post, or keep posted any notices required or allowed by Laws or under this Lease, and (iii) as City may otherwise reasonably de em necessary. In connection with any City access, City shall (i) comply with Lessee’s reasonable safety rules, (ii) not unreasonably interfere with or adversely impact Lessee’s operations, Maintenance, Repair or Capital Improvement Project activities ; and (iii) be liable for any damage to the Water System arising out of such access or City actions.

3.14 City Inspection and Oversight. Lessee, upon written request of City or City’s agent providing reasonable notice, will permit City or City’s agent to conduct a comprehensive inspection of the Water System, including, but not limited to, field inspections; Maintenance and Repair records a nd reports; Customer complaint records; and Capital Improvement Projects, schedules, and plans, in order to assess the condition of the Water System. In connection with any City inspection and oversight, City shall (i) comply with Lessee’s reasonable safety rules, (ii) not unreasonably interfere with or adversely impact Lessee’s operations, Maintenance, Repair or Capital Improvement Project activities ; and (iii) be liable for any damage to the Water System arising out of such access or City actions.

Article 4 – Customer Rates and Billing

4.1 Customer Rates. Lessee, in its sole and exclusive discretion, will be responsible for setting, levying, and providing notice of any and all of the Rates that Lessee will require for water service to be delivered to the Customers. Notwithstanding City of Cupertino
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the foregoing, City reserves the right to impose and collect fees for new or expanded water service connections on the Water System, including connection fees and development impact fees.
(A) Regulatory Cap. The Rates levied by Lessee on Customers must not exceed the lowest cumulative rates, surcharges, surcredits and other service charges or fees and penalties approved and/or authorized by the CPUC and in effect on Lessee’s CPUC regulated water system located in the City (“Regulatory Cap”). The Parties agree that this Regulatory Cap affords Lessee with sufficient flexibility to establish Rates while ensuring the Customers are subject to just, reasonable, and nondiscriminatory Rates. The Regulatory Cap does not include the “Surcharge to Fund Public Utilities Commission Reimbursement Fee,” an administrative fee imposed by the CPUC tariffed systems.

(B) Modifications. Lessee will notify City of any proposed modifications to Lessee’s Rates at least 30 days prior to their effective date and provide documentation to demonstrate that the proposed Rates will be at or below the Regulatory Cap.

(C) Compliance. City, acting in its regulatory capacity, may confirm that Lessee is in compliance with this Article. In the event of a discrepancy, City may request additional information for clarification, which Lessee must provide within 15 business days. If, in City’s reasonable determination, Lessee’s Rates exceed the Regulatory Cap and Lessee cannot demonstrate that its Rates are in compliance, City may direct Lessee to revise its Rates to achieve compliance with this Article, and to further require that L essee provide a refund and/or credit to Customers equal to the difference between the Rates charged and the revised Rates. (D) City’s Rights. Provided that Lessee is in material compliance with this Article, City will have no authority or obligation to impose, set, modify, approve, or provide notice of the Rates levied by Lessee on Customers. Notwithstanding the foregoing, the City reserves the right to impose and collect fees for new or expanded water service connections on the Water System such as connection fees and development impact fees.
(E) CPUC Orders. If the rates used to establish the Regulatory Cap are reduced or increased by order of the CPUC, Lessee will reduce or increase its Rates consistent with the CPUC order.

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(F) City’s Facilities . No charge will be made for water delivered to fire department facilities or for firefighting activities in the City. All other City properties using water service will be charged the same Rates as other Customers.

(G) Water Rationing. In the event of mandatory water rationing imposed by Laws, Lessee will impose water conservation measures or mandatory water rationing on its Customers and, if required by Laws, will provide timely education and if needed, proactively assess penalties on Customers that violate such Laws.

4.2 Customer Billing and Collections. Lessee is solely responsible for submitting billing statements to and collecting all Rates and taxes from Customers for water received through the Water System. Lessee may propose payment and credit rules substantially similar to those imposed on customers of its CPUC-regulated tariffed water system in the City. City will have no responsibility for billing or collecting Rates from Customers. Lessee will retain the proceeds from all Rates for water services provided during the Term of the Lease.
(A) Utility Users Tax . Notwithstanding the foregoing, at all times during the Term, Lessee will, at its sole expense, bill and collect from Customers on behalf of City any additional amounts which City, in its regulatory capacity, may assess as a utility users tax on any Customers and will promptly pay all such amounts to City.

(B) Unpaid or Delinquent Accounts. Lessee is solely responsible for the collection of unpaid or delinquent Customer accounts, at Lessee’s sole expense. City will have no responsibility for collection of unpaid or delinquent Customer accounts. (C) Transition Periods. With respect to Customer payments for water services provided prior to the Effective Date of the Lease, Lessee will cooperate with City to determine the amount payable to the prior lessee pursuant to the 1997 Lease and will promptly tender payment of that amount as specified by the Director.

With respect to payments due for water services provided prior to expiration or termination of the Lease, Lessee will cooperate with City to determine the amount payable for such se rvices prior to ex piration or termination of the Lease, and the Director will arrange for payment of that sum to Lessee. (D) Survival. The provisions of this Section will survive expiration or City of Cupertino
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termination of the Lease.

Article 5 – Insurance and Indemnity

5.1 Insurance. During the Term of this Lease, Lessee, at its own cost and expense, will maintain insurance, issued by a carrier or carriers acceptable to City, as set forth in this Section.

(A) Policies and Limits. The following insurance policies and limits are required for this Lease:

(1) Commercial General Liability (“ CGL”). Commercial general liability insurance in the single limit amount of not less than $10,000,000 which amount may be satisfied by any excess liability insurance carried by Lessee, written on an occurrence basis. Such insurance shall include coverage for injury (including death) or damage to persons and/or property arising out of the operations of Lessee pursuant to this Lease. The policy will include coverage for liability assumed under this Lease for personal injury, property damage and all other insurable claims as an “insured contract” for the performance of Lessee’s indemnity obligations under this Lease. (2) Workers’ Compensation Insurance. Workers’ compensation insurance, or a certificate of self-insurance, insuring against liability under the Workers’ Compensation Insurance and Safety Act now in force in the State, or any act hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such insurance will fully cover all person s employed by Lessee in connection with its operations under this Lease for claims of death or bodily injury arising in connection with their employment by Lessee pursuan t to its operations under this Lease.
(3) Automobile Liability Insurance . Automobile (vehicle) liability insurance on an occurrence basis for bodily injury and/or property damage in a single limit amount of not less than $2,000,000.

(4) Pollution Liability Insurance . Pollution liability insurance on a claims made basis, providing coverage of at least $2,000,000 for all liability arising out of sudden, accidental and gradual pollution and remediation, and loss City of Cupertino
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arising out of claims for bodily injury, death, property damage, or environmental damage caused by pollution conditions.
(5) Cyber Liability Insurance. Cyber liability insurance with limits of at least $2,000,000 per occurrence. Coverage must be sufficiently broad to respond to the duties and obligations of Lessee under this Lease, including, but not limited to, claims involving infringement of intellectu al property, including infringement of copyright, trademark, trade dress, invasion of privacy violations, information theft, damage to or destruction of electronic information, release of private information, alteration of electronic information, extortion, and network security. The policy must provide coverage for breach response costs as well as regulatory fines and penalties, and credit monitoring expenses with limits sufficient to respond to these obligations.
(B) Endorsement. Lessee’s CGL policy, automobile liability policy, pollution liability policy, and cyber liability policy must contain an endorsement in favor of City and its officers, agents and employees listing them as additional insureds. (C) Review. The Parties will periodically review the required insurance for the purpose of mutually agreeing on increases in the minimum limits, which may be reasonable and customary for similar facilities of like size and operation. (D) Insurers. All insurance must be affected under policies issued by insurers of recognized responsibility, licensed or permitted to do business in the State, and with an AM Best r ating of A.VII or otherwise as mutually agreed between the parties.
(E) Cancellation or Changes . All policies of insurance issued by the respective insurers must provide that such policies will not be canceled or materially changed without at least 30 days’ prior written notice to Lessee and to City. Evidence of all renewed or new policies, together with evidence of payment, will likewise be deposited with City prior to expiration dates of expiring or non- renewed policies.

(F) Minimum Limits. The limits of insurance required by this Lease or as carried by Lessee will not limit the liability of Lessee nor relieve Lessee of any obligation under this Lease.

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(G) Waiver of Subrogation . Lessee will cause the general liability and worker’s compensation insurance policies obtained by it to provide that the insurance company waives all rights of recovery by way of subrogation against City in connection with any damage covered by any policy.

5.2 Indemnity. To the full extent permitted by Laws, Lessee will indemnify, defend with counsel proposed by Lessee and acceptable to City, and hold harmless the Indemnified Parties from and against all liability, loss, claims, obligations, penalties, demands, suits, litigation, legal or administrative proceedings, defenses, proceedings, judgments, damages (including consequential damages), expenses, costs (including, without limitat ion, reasonable attorneys’ fees and all costs and fees of litigation and its threat) of any kind or nature , including any challenge to the validity of this Lease or any portions thereof (collectively, “Liability”) to the extent arising out of or in connection with Lessee’s negligent acts or omissions or willful breach of this Lease during the Term in relation to this Lease, including, but not limited to, Liability arising from any failure by Lessee to comply with Laws or the requirements of this Lease. In the event that Liability is caused in whole or in part by the concurrent negligent or intentional wrongful acts or omissions of an Indemnified Party , then this obligation to indemnify shall be comparative and each Party shall indemnify the other to the extent that such Party 's negligent or intentional wrongful acts or omissions were the cause of such Liability.

The
obligations in this Section will survive expiration or termination of this Lease with respect to any Liability arising during the Term of the Lease. If this Lease or any portion hereof is declared invalid, each Party waives any claim it may have against the other in connection therewith.

Article 6 – Default, Termination, and Expiration

6.1 Default. If City determines that Lessee is in default of any of the material provisions of this Lease, City will notify Lessee in writing of the default and afford Lessee a reasonable opportunity to cure the default unless immediate action is required due to an emergency that threatens imminent danger or injury or death to persons or damage or destruction of property.

(A) Default. The occurrence of any of the following constitute a default by Lessee:

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(1) If Lessee fails to operate, Maintain, or Repair the Water System or any portions thereof in accordance with this Lease, where such failure continues, or Lessee has not diligently commenced reasonable steps to cure such failure for 14 days following receipt of written notice from City specifying the failure or such other time specified in the written notice.

(2) If Lessee fails to make any payment to City or to any third party required by this Lease as and when due, where such failure continues for 60 days following receipt of written notice from City specifying the failure.

(3) If Lessee fails to obtain and maintain any insurance coverage required by this Lease, where such failure continues for seven days following receipt of written notice from City specifying the failure.
(4) If Lessee materially breaches or fails to perform any of its other covenants or agreements in this Lease, where such breach or failure continues, or Lessee has not diligently commenced reasonable steps to cure such failure, for 14 days following receipt of written notice from City specifying the failure or such other time specified in the written notice.

(5) Lessee’s financial capacity to operate the Water system is impaired in any of the following manners: (a) Lessee is or becomes bankrupt or insolvent or makes any general arrangement or assignment for the benefit of creditors; (b) Lessee becomes a “debtor” a s defined in 11 U.S.C. section 101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within 90 days); (c) a trustee or receiver is appointed to take possession of substantially all of Lessee’s a ssets or of Lessee’s interest in this Lease and possession is not restored to Lessee within 60 days; or (d) if a writ of attachment or execution is levied on, or there is a judicial seizure of, substantially all of Lessee’s assets or of Lessee’s interest in this Lease and such seizure is not discharged within 60 days .
(B) Notice and Cure. Upon receipt of written notice of default from City, if Lessee’s default is not cured or Lessee has not diligently commenced reasonable steps to cure the default within the time period specified in such written notice of default, then City may at its option, avail itself of any remedies listed below, which are non-exclusive and cumulative with any remedies now or later allowed by Laws or provided for elsewhere in this Lease:

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(1) City’s Right to Cure Lessee’s Default . In the event of a default by Lessee, if Lessee is not taking prompt and reasonable efforts to cure the default, following the time specified in the written notice to Lessee, City may elect to cure the default at Lessee’s cost, provided that Lessee has not provided City notice that it will need additional time to cure the default, unless immediate action is necessary to ensure uninterrupted operation of the Water System. Lessee will promptly reimburse City for its costs. (2) Emergency Corrective Action . Notwithstanding any provision of this Section to the contrary, if a default or failure to perform by Lessee poses an immediate threat to public health, safety, or property, City will notify Lessee, and if Lessee fails to take corrective action within the time specified in such notice, City may take all necessary action at Lessee’s expense, including Maintenance of or Repairs to the Water System or portions thereof. Lessee will promptly reimburse City for its costs. (3) Lessee’s Right to Possession Not Terminated.

In the event of a default by
Lessee, if Lessee is not taking prompt and reasonable efforts to cure the default, following the time specified in the written notice to Lessee (which shall be no less than the time periods set forth in Section 6.1(A) (Default)), City may take control of the Water System and relet the Water System and the groundwater, or any part of it, to third parties on Lessee’s account.

Lessee will be liable immediately to City for all reasonable costs City incurs in reletting the Water System and the groundwater. Reletting may be for a period shorter or longer than the remaining Term of this Lease. Lessee will pay to City any amounts due under this Lease on the dates such amounts are due, less the rent or other amounts City receives from any reletting. No act by City allowed by this paragraph will terminate this Lease unless City notifies Lessee that City elects to terminate this Lease.

(4) Termination of Lessee’s Right to Possession . In the event of a default by Lessee, if Lessee is not taking prompt and reasonable efforts to cure the default, following the time specified in the written notice to Lessee (which shall be no less than the time periods set forth in Section 6.1(A) (Default)), City may elect to terminate Lessee’s right to possession of the Water System and the groundwater. No act by City other than giving formal written notice to Lessee pursuant to this paragraph will terminate thi s Lease. Acts of Maintenance, efforts to relet the Water System and the groundwater or City of Cupertino
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the appointment of a receiver on City’s initiative to protect City’s interest under this Lease (other than the appointment of a receiver to perform all of Lessee’s obligations hereunder) will not constitute a termination of Lessee’s right to possession. On termination, City has the right to recover from Lessee any amount necessary to compensate City for all actual damages directly caused by Lessee’s default.

(5) Interest on Past Due Amounts.

(i) If City, at any time, by reason of Lessee’s default, pays any sum or does any act that requires the payment of any sum, the sum paid by City will be due immediately from Lessee to City at the time the sum is paid, and if not paid within 15 days of notice, will bear interest at the rate of the 90 -Day AA Financial Commercial Paper Interest Rate, from the date the sum is paid by City until City is reimbursed by Lessee.

(ii) If payment of any undisputed amount from City to Lessee is made after the 30
th day following the proper submission of an
undisputed and properly completed invoice, then payment shall include interest on the amount owing, at the rate of the 90 -Day AA Financial Commercial Paper Interest Rate, from the 30
th day after the
payment was due until the date of payment.
(6) Survival. The provisions of this Section will survive expiration or termination of the Lease.
(7) Consequential Damages . To the fullest extent permitted by applicable laws, except as otherwise specified in this Lease and excluding claims associated with patent infringement or intentional breach of confidentiality requirements, neither Party shall be liable to the other Party for punitive damages or Consequential Damages.
(8) Limitation of Liability . Notwithstanding anything else to the contrary herein, Lessee’s aggregate liability under this Lease to the City shall not exceed an amount equal to the Annual Investment Rent in the prior 12 month period.

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6.2 Termination of Lease for Convenience. The City may terminate the Lease for convenience prior to the expiration of the Lease upon ninety (90) days written notice to the Lessee. The amount of Lessee’s payment obligations with respect to the Annual Investment Rent, pursuant to Section 2.5(B) (Annual Investment Rent), and Franchise Fee, pursuant to Section 2.5(C) (Franchise Fee) will be prorated based on the effective date of the termination for convenience. Following a termination of the Lease for convenience, City shall pay to Lessee all pro -rated amounts (including a pro-rated reimbursement of the Concession Fee based on the remaining term of the 12-year initial term of the Lease) owing under the Lease at the time of such termination for convenience. Lessee shall also be entitled to compensation for all work performed on or prior to the effective date of the termination for convenience, including work on Capital Improvement Projects .

Lessee’s obligations under the terms of this Lease, including any amendments hereto, will remain in full force and effect through the effective date of the termination, unless otherwise specified in the termination notice.

6.3 Termination by Lessee. Lessee shall have the right to terminate this Lease for cause, by declaring a breach should City fail to comply with any material provisions of this Lease. City shall be deemed in breach of this Lease if it fails to comply with any material provision of th e Lease, including but not limited to failure to make payments in accordance with the Lease. Lessee shall provide City with reasonably prompt written notice setting forth in sufficient detail the reasons for the written notice decla ring it believes that a breach has occurred. City shall have thirty (30) calendar days from receipt of the written notice declaring the breach (or such longer period as the Lessee may grant in writing) within which to cure the alleged breach or such longer period determined by Lessee if the breach is not curable within that time period . Upon such termination, Lessee shall be entitled to receive payment for work executed, and reasonable costs incurred by reason of such termination on the same basis as for a termination for convenience.

6.4 Surrender Upon Expiration or Termination. Upon expiration or termination of the Lease, Lessee agrees that it will surrender to City the Water System in in a state of repair that is consistent with the applicable Operating Standards. Within 30 days following expiration or termination of the Lease, Lessee will provide City with an updated Water System map (ArcGIS or equivalent), the accuracy of which Lessee cannot provide verification to the extent information was or is provided by City or third parties or to the extent of changes of such information with the passage of time, showing spatial location of all surface and subsurface assets City of Cupertino
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including all asset types, age, diameter and to the extent known by Lessee. This Section will survive expiration or termination of the Lease.

6.5 Transition Period. Lessee will reasonably cooperate with, and not take any affirmative actions to hinder in any way, City’s efforts to operate, lease, or sell the Water System. All records required under this Lease will be made current by the Lessee at the frequency previously defined or as reasonably requested by City. All Customer billing information will be kept current and provided to City during the last 12 months of the Term.

6.6 Dispute Resolution. If a dispute, controversy, or claim arising out of or relating to this Lease, including its formation, validity, binding effect, interpretation, performance, breach, or termination (a " Dispute") arises between the Parties regarding interpretation or implementation of the terms and conditions of this Lease, including the exhibits hereto, the representatives of the Parties who have primary responsibility for operation of the Water System and administration of this Lease will engage in best efforts to resolve the Dispute informally. If the Parties are unable to resolve a Dispute informally, the Party seeking redress may submit an informal written claim to the City, specifying the nature of the claim, the applicable Lease provisions, a summar y narrative of the events leading to the claim, and the remedy sought to resolve the claim. Within 30 days thereafter, the Director will arrange to meet and confer in person or by videoconference with Lessee, in a further attempt to informally resolve the claim. If, within 30 days following the initial attempt to meet and confer, the claim is not resolved, the Parties agree to submit the Dispute to mediation with an experienced third -party neutral in an effort to resolve the claim by compromise, with each P arty to share equally in the mediator’s fees and each Party to bear its own legal fees, if any. City and Lessee will mutually agree to a mediator selected in accordance with the Commercial Mediation Rules of the American Arbitration Association (“AAA”).

Mediation will be scheduled to ensure the mutual availability of the selected mediator and all of the individuals that each Party requires to represent its interests. The Parties will share the costs of the mediation equally. Good faith compliance with the informal Dispute resolution provisions set forth in this Section is a condition precedent to filing a claim pursuant to the California Government Code or to otherwise initiating legal proceedings with regard to the Dispute. The provisions of this Section will survive expiration or termination of the Lease.

City of Cupertino
Agreement for Lease of Real Property (Water System)

Privileged and Confidential – City internal review only

62847373.v1
Article 7 – Miscellaneous Provisions

7.1 Recitals. The Parties agree that the recitals to this Lease are true and correct and are hereby made part of this Lease.

7.2 Notice. Any notice required by or given pursuant to the Lease, including notice of any changes to the contact information in this Section, must be in writing and sent to the other Party by U.S. Mail or a reliable overnight delivery service, with postage prepaid and return receipt requested. For the convenience of the Parties, copies of Notices may also be given by email to the email address given below.

Notice is deemed effective on the date of delivery shown on the receipt or date of delivery of the email. A copy of any notice given to the City must also include simultaneous transmission of a PDF copy of the notice to the Director. Notice for each Party must be given as follows, unless a different address is later designated for such purpose by written notice to the other Party:

City: City of Cupertino, City Clerk
10300 Torre Avenue
Cupertino, CA 95014
Email: [email protected]

Copy to: Director of Public Works (via email)
Lessee: San Jose Water Company
Attention: John Tang
110 W. Taylor Street
San Jose, CA 95110
408-279-7933
Email: [email protected]

7.3 Compliance with Laws. Except as otherwise provided in this Lease, Lessee will, at Lessee’s sole cost and expense, diligently and in a timely manner, comply in all material respects with all Laws. Lessee shall notify City in writing (with copies of any documents involved) of any threatened or actual claim, notice, inquiry, citation, warning, complaint or report with respect to which it obtains knowledge pertaining to or involving any alleged failure by Lessee to comply with any Laws in its operation of the Water System.

City of Cupertino
Agreement for Lease of Real Property (Water System)

Privileged and Confidential – City internal review only

62847373.v1

7.4 Nondiscrimination. Discrimination against or segregation of any person or group of persons in the leasing, transferring, use, or enjoyment of the Water System, on account of sex, race, color, creed, national origin, ancestry, religion, citizenship status, age, marital status, medical condition, mental or physical disability, sexual orientation, veteran status or any other characteristic protected by Laws is strictly prohibited. Lessee must comply with all applicable Laws prohibiting discrimination. Lessee cannot establish or permit any practice of discrimination or segregation.

7.5 Force Majeure.

(A) Force Majeure Event. Lessee’s obligations under this Lease will be suspended only to the extent that and only for the duration in which the performance of its obligations is prevented or hindered by acts of nature; war; epidemic or pandemic; riots; civil insurrection; acts of civil or military authority taken to protect public health and safety; fires; floods; earthquakes or other natural phenomena; labor strikes, accidents or incidents; change in law or s tandards; or other cause of the same or other character which are beyond the reasonable control of Lessee (“Force Majeure Event”).
(B) Notice. In the event of a suspension due to a Force Majeure Event, Lessee will promptly notify the City in writing of such suspension and the cause and estimated duration of such suspension. Lessee will be excused from fulfilling its obligations under the Lease only to the extent that the Force Majeure Event has prevented Lessee from fulfilling its obligations, and only until such time that the Force Majeure Event has ceased to prevent performance or other remedial action is taken, at which time Lessee will promptly notify City in writing of the resumption of its obligations under this Lease. If Lessee is unable to fulfill any of its obligations by reason of a Force Majeure Event, Lessee will exercise due diligence to reasonably remove such inability within a reasonable time period and to mitigate the effects of the Force Majeure Event. The relief from performance will be of no greater scope and of no longer duration than is required by the Force Majeure Event.

7.6 Assignment. Lessee may not assign its rights or obligations under this Lease, in part or in whole, or sublet the Water System or any portion thereof, without City’s written consent. City agrees to provide consent where such assignment relates to an upstream reorganization or transfer of direct or indirect interests in Lessee so City of Cupertino
Agreement for Lease of Real Property (Water System)

Privileged and Confidential – City internal review only

62847373.v1
long as no change occurs in the entity with ultimate power to direct or control or cause the direction or control of the management of Lessee.

7.7 Governing Law and Venue. This Lease will be governed by California law and venue will be in the Santa Clara County Superior Court, and no other place. Lessee waives any right it may have pursuant to Code of Civil Procedure section 394, to file a motion to transfer any action arising from or relating to this Lease to a venue outside of the County.

7.8 Waiver. City’s waiver of a breach by Lessee of any term, covenant or condition contained in or granted by this Lease will not operate as a waiver of any subsequent breach of the same or any other term, covenant or condition hereof.

7.9 Integration. This Lease, including the exhibits hereto, which are incorporated by this reference, constitute the final, complete, and exclusive terms of the agreement between the Parties with respect to the Lease of the Water System, and supersede all other oral or written provisions.

7.10 Amendment. No amendment or modification of this Lease or any of the exhibits hereto will be binding unless it is in a writing duly authorized and signed by the Parties. Any amendment to the Term or to the provisions of Section 2.5 (Compensation) are subject to City Council approval, with the exception of annual adjustments to the A nnual Investment Rent. Amendments to the Capital Improvement Plan, Maintenance Plan, and update of Asset Management Plan are subject to approval by the City’s Director without further City Council approval.

7.11 Interpretation. The terms of this Lease have been negotiated by the Parties and the language used in this Lease will be deemed to be the language chosen by the Parties to express their mutual intent. This Lease will be construed without regard to any presumption or rule requiring construction against the Party causing such instrument or any portion thereof to be drafted, or in favor of the Party receiving a particular benefit under this Lease.

7.12 Severability. If any provision of this Lease is held to be illegal, invalid, or unenforceable, in part or in whole, such provision or portion thereof will be excluded from the Lease and the remaining provisions of the Lease will remain in full force and effect.

City of Cupertino
Agreement for Lease of Real Property (Water System)

Privileged and Confidential – City internal review only

62847373.v1

7.13 Execution in Counterparts. This Lease may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one instrument.

7.14 Authorization. Each individual signing below warrants that he or she is authorized to do so by the Party that he or she represents, and that this Lease is legally binding on that Party. If Lessee is a corporation, signatures from two officers of the corporation are required pursuant to Corporations Code section 313.

[Signature page follows]
City of Cupertino
Agreement for Lease of Real Property (Water System)

62847373.v1
The Parties agree to this Lease as witnessed by the signatures below.

CITY OF CUPERTINO

By: Date:

Pamela Wu, City Manager

ATTEST:

By: Date:

Kirsten Squarcia, MMC, City Clerk

APPROVED AS TO FORM:

By: Date:

Christopher Jensen, City Attorney

LESSEE:

By: Date:
<Name>, <Title>

By: Date:
<Name>, <Title>

62847373.v1
List of Exhibits:

Exhibit A – Service Area
Exhibit B – Water System
Map
Exhibit C – Asset Management Plan
Exhibit D – Capital Improvement Plan
Exhibit E – Maintenance Plan
Exhibit F – SCVWD Contract

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Water System Map
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EXHIBIT C
Asset Management Plan

CITY OF CUPERTINO

WATER DISTRIBUTION SYSTEM

ASSET MANAGEMENT PLAN
Table of Contents
1 Introduction .......................................................................................................................................................... 1

1.1 What is an Asset Management Plan for Cupertino Municipal Water System? ............................................ l

1.2 Key Components of the Asset Management Plan ........................................................................................ 2 2 What Does the City Own? ..................................................................................................................................... 8 3 What is the Replacement Cost of the Assets? .................................................................................................... 13 4 What is the Current Condition of the Assets? .................................................................................................... 15 5 How Should the Assets be Prioritized? ............................................................................................................... 29 6 What are the Recommended Levels of Service? ................................................................................................ 34

6.1 Environmental, Organizational, and Financial Sustainability Levels of Service .......................................... 34

6.2 Asset Performance Levels of Service .......................................................................................................... 36

6.3 Customer Service Levels of Service ............................................................................................................ 37

6.4 Regulatory Compliance Levels of Service ................................................................................................... 38 7 What is Needed to Sustain the Delivery of Services? ........................................................................................ .40

7.1 Condition and Age Based Analysis ............................................................................................................ .40

7.2 Level of Service Analysis ............................................................................................................................ .48

7.3 Efficiency Analysis ..................................................................................................................................... .49

7.4 Analysis Summary ...................................................................................................................................... 50

7.5 10-Year and 20-Year CIP Summary ...................................................................................... ...................... 52 Figures
Figure 1-lAsset Hierarchy ............................................................................................................................ 3 Figure 1-2 Decay Curve ................................................................................................................................. 4 Figure 1-3 Risk Matrix ................................................................................................................................... 5 Figure 1-4 Life Cycle Cost Logic Illustration .................................................................................................. 6 Figure 1-5 IRIS (Infrastructure Reinvestment Intelligence System) .............................................................. 7 Figure 3-1 Replacement Cost of Mains, Valves, Hydrants, and Meters ..................................................... 13 Figure 3-2 Water Distribution Facilities Replacement Cost.. ...................................................................... 14 Figure 4-1 Condition Profile for the Water System Condition Profile ........................................................ 15 Figure 4-2 Condition Profile for Water Mains, Water Services, Meters, Hydrants, lnterties, and Others .15 Figure 4-3 2019 Pump Station, Reservoirs, and Wells Condition Profile .................................................... 16 Figure 4-4 Water Main Installation by Decade ........................................................................................... 16 Figure 4-5 Water Main Installation History by Decade ............................................................................... 17 Figure 4-6 Valve Installation Profile by Decade .......................................................................................... 20 Figure 4-7 Valve Condition Profile .............................................................................................................. 20 Figure 4-8 Hydrant Installation Profile by Decade ...................................................................................... 21 Figure 4-9 Hydrant Condition Profile .......................................................................................................... 21 Figure 4-10 Water Service Installation Profile by Decade .......................................................................... 22 Figure 4-11 Water Service Condition Profile at SO-Year Useful Life ........................................................... 23 l<AVUGA SOLUTION
Figure 4-12 Water Service Condition Profile at 65-Year Useful Life ............................................................................ 23 Figure 4-13 Water Service Condition Profile at 80-Year Useful Life ............................................................................ 24 Figure 4-14 Water Meter Installation Profile by Decade ............................................................................................. 25 Figure 4-15 Water Meter Condition Profile ................................................................................................................. 25 Figure 4-16 Mann Pump Station Condition Profile ...................................................................................................... 26 Figure 4-17 Storage Tanks Condition Profile ............................................................................................................... 27 Figure 4-18 Flowering Pear Well and Franco Court Well Condition Profile ................................................................. 27 Figure 5-1 Water Main CoF Scores .............................................................................................................................. 30 Figure 5-2 Asset Criticality Profile ................................................................................................................................ 32 Figure 5-3 Risk Matrix .................................................................................................................................................. 33 Figure 7-1 Water Distribution Asset Replacement and Rehabilitation Profile (100 Years) ........................................ .42 Figure 7-2 Water Distribution Asset Replacement and Rehabilitation Profile (20 Years) ........................................... 43 Figure 7-3 Total 20-Year Condition-Based Replacement and Rehabilitation Profile by Asset Type ............................ 43 Figure 7-4 Water Distribution Asset Replacement and Rehabilitation Profile (10 Years) ........................................... 44 Figure 7-5 Total 10-Year Condition-Based Replacement and Rehabilitation Profile by Asset Type ........................... .44 Figure 7-6 20-Year Replacement Profile for Water Mains .......................................................................................... .45 Figure 7-7 20-Year Replacement Profile for Water Mains - Probabilistic ................................................................... 46 Figure 7-8 20-Year Replacement Profile for Water Services and Meters .................................................................... 46 Figure 7-9 20-Year Replacement Profile for Water Services and Water Meters - Probabilistic ................................ .47 Figure 7-10 10-Year Water Consumption Trend ......................................................................................................... .48 Figure 7-11 Long-Range Water System Needs - Condition/Age, Level of Service, and Efficiency-100 Years ........... 50 Figure 7-12 Long-Range Water System Needs - Condition/Age, Level of Service, and Efficiency- 20 Years ............. 51 Figure 7-13 Long-Range Water System Needs - Condition/Age, Level of Service, and Efficiency-10 Years ............. 51 Tables
Table 1-1 Asset Classes .................................................................................................................................................. 3 Table 1-2 Condition Assessment Score and Description ............................................................................................... 4 Table 2-1 Water Distribution Asset Inventory ............................................................................................................... 8 Table 2-2 Water Main Inventory by Material ................................................................................................................ 9 Table 2-3 Water Main Inventory by Size ....................................................................................................................... 9 Table 2-4 Mann Pump Station Asset Inventory ........................................................................................................... 10 Table 2-5 Storage Tank Asset Inventory ...................................................................................................................... 11 Table 2-6 Well Asset lnventory .................................................................................................................................... 12 Table 3-1 Water Facility Total Asset Replacement Cost .............................................................................................. 14 Table 4-1 Water Main Useful Life Scenario Summary ................................................................................................. 19 Table 4-2 Water Service Useful Life Scenario Summary .............................................................................................. 24 Table 4-3 Mann Station Assets in Need of Replacement or Rehabilitation ................................................................. 26 Table 4-3 Flowering Pear Well and Franco Court Well Assets in Poor Condition ............. , .......................................... 28 Table 5-1 Water Main CoF Scoring .............................................................................................................................. 30 Table 5-2 Water Distribution CoF by Asset Class ......................................................................................................... 31 Table 5-3 Water Facilities CoF by Asset Class .............................................................................................................. 31 Table 6-1 Level of Service Importance Ranking ........................................................................................................... 34 Table 6-2 Environment, Organization, and Financial Sustainability Levels of Service ................................................. 35 Table 6-3 Asset Performance Levels of Service ........................................................................................................... 36 Table 6-4 Customer Service Levels of Service ............................................................................................... '. .............. 38 Table 6-5 Regulatory Compliance Levels of Service .................................................................................................... 39 Table 7-1 Management Strategies .............................................................................................................................. .40 l<AVUGA SOL . UTION
Table 7-2 Water Management System R&R Summary ................................................................................................ 45 Table 7-2 20-Year Water Main R&R Summary ............................................................................................................ 46 Table 7-4 20-Year Water Services and Water Meter R&R Summary ........................................................................... 47 Table 7-10 Level of Service CIP Recommendations .................................................................................................... .49 Table 7-11 Efficiency CIP Recommendations ............................................................................................................... 50 Table 7-12 Long Range Water System Needs Summary .............................................................................................. 50 Table 7-13 2019 to 2028 CIP Summary ....................................................................................................................... 52 Table 7-14 2029 to 2038 CIP Summary ....................................................................................................................... 53 Appendices
Appendix A: Asset Inventory of Pump Station, Storage Tanks, and Wells Appendix B: Hydraulic Analysis Report
Appendix C: SJWC 2015 Pipeline Consequence of Failure Study l<AVUGA SOt UTJQr,.. J
1 Introduction
The City of Cupertino (City) is working to investigate its water system. The City is served by three different systems:
one owned and managed by California Water Service Company, one owned and managed by San Jose Water Company (SJWC), and one owned by the City. The City's water system is currently being operated and maintained by SJWC. This service is part of a 25-year concession between the City and SJWC that began in 1997.

The City's water system covers approximately 3.7 square miles and has nearly 60 miles of pipelines, 3 storage tanks, and just under 4,400 water services. Before the end of the concession agreement with SJWC in 2022, the City will need to gain a thorough understanding of its water system to assist them in the decision in the following business cases:
• The City takes over the operations, maintenance, management and customer interactions of the water system
• The City negotiates and renews the concession agreement with the lessee responsible for all operation and customer interaction responsibilities, and the City establishes a defined capital expenditure schedule for system improvements that is paid by lessee
• The City negotiates and renews the concession agreement with a lessee that is responsible for all operation and customer interactions, and the City establishes a defined capital expenditure schedule for system improvements to be paid by City
• The City sells the City-owned water system
In an effort to help the City make an informed business decision, the City has contracted Kayuga Solution and its team (i.e., Hanson Associates, Charles Marr Consulting, MR Valuation Consulting) to perform comprehensive water system asset planning and valuation. The goal of the project is to develop an asset management plan that provides a comprehensive understanding of the current and future asset needs, asset risk profile, appropriate levels of service, cost to provide that level of service, and financial and resource requirements to sustain the delivery of those services.

The asset management plan will provide an understanding of the City's current and future infrastructure needs for the water system assets. As system conditions change in the future, a periodic re-inspection and update of this asset management plan is recommended.

1.1 What is an Asset Management Plan?
An asset management plan is a long-range planning document that provides a framework for understanding the assets owned by the City, services it provides, risks it assumes, and financial investments it requires. Development of an asset management plan requires answers to the following questions:
• What does the City own and manage?
• What is the current state of the assets?
• What are the immediate asset maintenance, rehabilitation, and replacement needs? • What are longer-term asset investment needs with respect to aging assets, capacity, level of service, etc.? • What is the risk associated with asset failure?
• What are the appropriate levels of service?
• What is required to sustain 'the delivery of service? o Financial requirements
o Resource requirements
l<AVUGA SOI. U r10N
1 o Risk vs. investment analysis
• What is the cost of service?
An asset management plan is a living document. It is meant to grow and change with the organization and system for which it is written. With new and/or replaced assets, an asset management plan should be updated periodically to reflect the asset risk profile and continually monitor the financial plan required to sustain the delivery of services.

1.2 Key Components of an Asset Management Plan
The following section introduces and defines the key components and methodology used to develop the asset management plan.

Asset Register
The asset register establishes the data foundation of the asset management plan by consolidating and documenting all assets owned and managed. The development of the asset register required establishing the following key elements:
• Asset Definition - Helps to define what is an asset versus what is not an asset. With the asset definition established, the City is able to separate assets from components and manage them accordingly.
• Asset Hierarchy- Organizes the thousands of assets in the asset register. With the asset hierarchy, the City is able to easily find assets and support asset management decisions at any level within the asset hierarchy .
• Asset Classes - Groups the assets to allow the City to characterize the life-cycle behavior of the assets in the register. An asset class is developed by grouping assets with similar characteristics, such as type, function, useful life, material, and size. Asset classes are used to help model the life-cycle costs of the assets.
• Asset Data Standards - Identifies the data attributes required to support asset management decisions.

Asset Definition
An asset was established as something that is owned and managed by the City, has a value, and is critical for the delivery of water distribution services. An asset is identified at a level at which a work order is typically generated .

The initial step in developing an asset register was to consolidate all previously existing asset data in the various information systems (e.g., Geographic Information System (GIS), Excel spreadsheets, engineering drawings). Once the data was consolidated, a data gap analysis was performed to determine which assets or asset attributes (e.g., size, material) were missing. This data gap analysis provided the foundation for the data collection and correction part of the project. The data gap was filled by visiting the assets and collecting missing assets and missing attributes.

Asset Class
Assets are grouped into classes to more efficiently model and manage the assets. An asset class generally refers to a group of assets that behave similarly. Grouping the assets into these classes allows easier modeling of life-cycle behavior. The following table lists the City's asset classes.

J<AVUGA SC>l U f ION
2 Table 1-1 Asset Classes
Asset Classes
Building HVAC I Main Casing
Control Panel Hydrant
I
Meter
Driveway Instrumentation Motor
Fencing Lifting Equipment I Pavement
Filter I Lighting I Pump
Generator Main I SCADA
Asset Hierarchy
The hierarchy for the organization of the assets is presented in the Figure 1-1.

The assets are organized by City, Water System, and Sub-Systems.

Replacement Cost
Asset management best practice estimates the future financial needs based on current-year asset replacement cost. In many cases, escalation of the initial purchase cost does not properly reflect the replacement cost. As such, each asset in the asset register was assigned a replacement cost in 2019 dollars.

This replacement cost estimates the budget required to replace the asset with a like, in-kind asset. The replacement cost incorporates material, labor, removal, and other costs associated with replacing the asset. It should be noted that the replacement cost does not include any changes to capacity or level of service. In addition, the replacement cost does not represent costs associated with delivering a CIP project , which typically include the following :
• Engineering/design/project management
• Demolition and removal
• Permit
• Contractor overhead/profit
• Contingency
• Traffic control
• General conditions
Typically, an additiona l 30% to 50% is added to the replacement cost to represent CIP project costs. In the asset management plan, all costs are represented as replacement cost. The individual replacement costs for the assets are then summed to create a tota l estimated replacement cost for the management system.
l<AVUGA SOI UT ICJN
Service Line
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Tank
Valve
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Vault Structure
Well Casing
I
-' Cily of Cur,er11110
• Wartr System
• A1r Release Valves
Air Release Valve:>
Air Valve Pipe
A1rVi!n!llalve
• 6l<JW Ott Valve
" Fire liydrant5
Fire Hvdia11, P1pl'S
fire Hydrant Valves
fire Hydrants
lnterties
une Valves
Meter,;
OperallQClal lone Vat..,
,. Pump Stanoo
,. Mann Station
Discharge flow Meter Vault
DtScharge PRV Vault
I Pump House
Site General
Scallon flow Metl'f 1/aulL
Water Tank
_J 'ReiefV1ors
Cnsto Rey Storage Tank-
,. Mercl.'des Road Slatten
Electrical Shed
Mercedes Station Tonk • 1
Mercedes Station tink i 2
S.te Get1eral
Sampli,,g Stat,an
• Se,viw
Warer Ma,n C•~•"9
WarerMa"'$
• Wells
Flowerlng P-1at' Well
r ran co Court Well
Figure 1-1 Asset Hierarchy
3 Condition
Condition is one of the best indicators for estimation of immediate and/or future maintenance, repair, and replacement work. General condition assessment (e.g., visual, touch, sound) was performed for accessible assets.

For inaccessible assets, condition was estimated based on age. No forensic or detailed condition assessment work was involved .

A condition scale of 1 to 5 (Table 1-2) was utilized to represent the general condition of the asset. Compared to a more complex scale (e.g., 1 to 10, 1 to 100), this simple scale greatly limits the subjectivity associated with the assessment of the condition score from one inspector to another.

Table 1-2 Condition Assessment Score and Description
Condition Score Description
1 Excellent: New or nearly new
2 / Very Good: Not new, but in very good condition
3 Good: Good or as expected based on age
4 / Poor: Poor or recommended replacement in near-term
5 Failed/Critical: Failed or nearing failure, needs immediate attention In many cases where the asset was not visible (e.g., buried assets) or the condition could not be determined (e.g., pipes, electrical), age was used as the main indicator of the condition of the asset. Utilizing age and decay curve, the condition of an asset is estimated . The figure below illustrates the various decay curves available to represent the deter ioration of assets. It is expected that decaying characterist ics of most assets can best be represented by an exponential curve. Kayuga utilized the Late Decay (1.5) curve to estimate asset condition in the City's asset management plan. This curve is widely used by many utilit ies and municipalities in this geographic area (i.e., Santa Clara Valley Wate r District, City of Livermore) as it represents a more conservative view of an asset's decay. For example, a linear decay curve of an asset with a condition rating of 3 is estimated to have 63% life consumed. The same asset with the same condition utilizing the Late Decay (2) curve is estimated to have 78% life consumed. - L,1te Uetay ( L S)
- u te Decay 12)
- l..ltcDeu y( 3)
- Lat" Decay (d)
- Late Dcc.1y jS)
-une4r Decay
- Earty Decay (O.SJ
- E•rlyDocav (0.3-33)
- fa rly Oeai y (O.]t; )
- Earty Ot!Col\l (0.2 }
°"' ""' "'''
JO!< 60%
'°" """
IOOS
Percent of Useful life Consumed
Figt1re 1-2 Decay Curve
l<AVUGA SOI U T ION
4 Risk
Risk is used for effective, transparent prioritization of limited resources (e.g., budget, availability of staff) . Under limited resources, the City should address the assets with the highest risk scores before addressing the lower-risk assets. The two main components of risk are Probability of Failure (PoF) and Consequence of Failure (CoF). PoF indicates the estimated time until the asset fails to function at the established levels of service. CoF provides an indication of the impact of the asset failure considering the triple bottom line factors of sustainability: economic, social, and environmental. Every asset in the asset register is assigned a risk score. For some assets, redundancy was considered to offset the risk.

The following formula is used to calculate the risk score:
• ••=•
With each asset's risk score calculated, assets were plotted in the following risk matrix. The risk-based strategy should be to manage the high-risk zone (red zone) before moving down to medium (yellow zone) and low risk zones (green zone).

Life-Cycle Cost
~IGli
P,uo.biityol
r-.
,ow
Medium Risk
,ow Comequffl(t at r ail#e lllGH
Figure 1-3 Risk Matrix
In order to predict the future replacement and rehabilitation need of all assets, a life-cycle cost analysis is performed .

The life-cycle cost analysis is a calculation of costs required to support the set of activities (e.g., rehabilitation, replacement) that are needed to sustain the delivery of an asset's services during the life of an asset or for the planning horizon (e.g., 10, 20, or 100 years). The useful life (e.g., 10, 20, 30 years) was estimated for each asset. Life­ cycle cost analysis is performed for each asset in the asset register. For every year of the planning horizon, the life­ cycle analysis will calculate which asset needs a refurbishment or replacement activity and how much it will cost.to perform the needed activity . As noted previously, replacement costs do not include costs associated with delivering a CIP project (e.g., engineering, project management, contingency, insurance). When all the activity costs are l<AVUCA SOL UTION
5 summed for each year, the overall replacement and rehabilitation budget for the year will be established. The life­ cycle cost analysis drives the estimation of the future financial needs to sustain the delivery of the assets. Comparing and contrasting the life-cycle cost results against the current asset replacement and rehabilitation spending, sustainability of the future financial plan can be assessed.

Life-cycle cost calculation takes place in the form of a life cycle cost logic or management strategy. A management strategy characterizes the life-cycle behavior of an asset (e.g., how it will decay, how long it will last, necessary refurbishment during the life of the asset, when refurbishment is needed, how much refurbishment will cost).

Every asset is assigned a management strategy. The following figure illustrates the relationship between asset condition, management activities, and life-cycle cost. After the installation, asset condition will deteriorate with time. In order to raise the condition to an acceptable level, an investment in the form of maintenance or rehabilitation will be required. At the end of its useful life, the asset will need to be replaced, and the cycle will repeat.

LifeCycleCostlSl
Figure 1-4 Life Cycle Cost logic Illustration
The life-cycle cost assessment allows the City to proactively manage the assets. The City will be able to predict which assets are nearing the end of useful life and proactively plan for replacement of high-risk assets to prevent failure .

Reacting to a high-risk asset failure after they have occurred typically results in the highest expense. With life-cycle cost analysis, the City will also have an understanding of the work and investment required for future years and proactively plan ahead to minimize risk and costs. These estimations will be used to prepare the budget and resources required to sustain the delivery of services. When budget and resource limitations exist, the City will be able to prioritize the needs by risk to ensure the budget is first spent on high-risk assets. In essence, the City will be able to ensure that minimum funds are spent to maximize risk reduction .

IRIS {Infrastructure Reinvestment Intelligence System)
Life-cycle cost calculation can be very tedious and time consuming. It is especially difficult when the calculations need to be performed for thousands of assets, year-by-year, asset-by-asset. For this reason, the City utilized Kayuga Solution's asset management planning tool , IRIS (Infrastructure Reinvestment Intelligence System), which incorporates the developed asset register and performs the life cycle cost and risk assessment work.

IRIS is an asset management dashboard that utilizes the asset data and performs asset management calculations and analyses presented in the City's asset management plan. It is a planning tool the City can use to project the l<AVUCA SOI. Ur ION
6 future maintenance, rehabilitation, and replacement needs, understand its high-risk assets, understand the cost of ownership, calculate the appropriate budget required to mitigate the high-risk assets, and identify assets estimated to require rehabilitation or replacement year-by-year, asset-by-asset. The figure below illustrates a sample view of the IRIS dashboard.
~ w.neos,ste, 01
• Nli!tt-\lllNH
.. ._-.
• SlowOftV...,e
• F"11e l-tyd1MIQ
------► PumpStauon
·-­SilfnpfiogSUtM
·­\N;;ter~c.r...,g
WJl !'f~
·-l<lflit~
Alternate Hierarchy
rr1,J~~l"'4
rM Q
Crty of Cupertino
'"'-••11~
-2018 $1.661,332
Replacement & Rehabilitation (R&RJ
S&,000.00)
k.OOiU lOG
..
201!> lO.!O ws 20.w 21l3S 2040 .zots 2050 10ss 2060 l065 ~Ho 20r.; ,nae, <?tll~ 2090 lO!IS ;n oo 21M 2110 11 1s ·.n:w Year
Figure 1-5 IRIS {Infrastructure Reinvestment Intelligence System) Long-Range Planning of Asset Replacement and Rehabilitation Needs - iwit.,t!"-aq,o
■ w,.i«~•
Based on the life cycle cost analysis, the long-range financial needs of asset replacement and rehabilitation profile is generated. Life cycle cost analyses were performed for a 100-year, 20-year, and 10-year horizon to evaluate the replacement and rehabilitation needs of the assets. A 100-year planning horizon provides a comprehensive view of asset replacement; by the 100th year, each asset (e.g., main, valve, pump) will be replaced at least once within the 100-year planning horizon. Every year, those assets requiring replacement or rehabilitation are identified and summed to generate the replacement profile.
l<AVUGA SC..) t lJ I I O N
7 2 What Does the City Own?
As part of the asset management plan development process, a comprehensive asset inventory was performed . All facilities (e.g., pump station, storage tanks, wells) were visited and their assets inventoried . Hydrants and system valves were visited and their location (i.e., GPS coordinate) was recorded . Where assets are not visible (i.e., mains, services, valves), a thorough analysis of as-built drawings and available GIS data was performed. Water main, valve, service, and meter data were initially provided by SJWC. Where the initial GIS data did not match the as-built drawing or on-site verification, Kayuga updated the initial GIS data to provide the City with a more comprehensive and current water distribution asset database.

Asset Inventory
The City owns 12,244 assets including nearly 60 miles of pipelines and just under 4,400 services. The water system also includes 3 water storage tanks, 2 wells, and a pump station . The following tables summarize the water distribution assets for the Cupertino Leased Area water system. The provided GIS data also included pipes from water main to hydrants and small sections of pipes to blow off and air release valves all identified in the table below.

Table 2-1 Water Distribution Asset Inventory
Asset Class Number of Assets Length (miles)
Hydrants 399
Mains (4" to 20" diameter) 1,094 57.6
Main Casing 1
Air Release/Vent Valves 30
Blow Off Valves 86
lnterties 4
Line Valves 810
Zone Valves 12
Hydrant & Service Valves I 455
'
Hydrant Pipe 400 1.5
Blow Off Pipe
I
8 >1
Air Release Pipe 9 >1
Services 4,382 11.5
Fire Services 29
Meters 4,382
Sampling Stations 8
lnterties 4
- -- -Total 12,113 70.6
l<AVUGA SCJL. U 1 IC>N
8 Table 2-2 Water Main Inventory by Material
Diameter (in) Length (mi) Percent of Total
AC 33.7 59%
Cl 1 2%
CIP 0.5 >1%
DICL 15.4 27%
DICLZ 0.4 >1%
FKCL 2.7 5%
PVC 0.1 >1%
..
s 1.2 2%
ws 0.8 I 1%
WSCL 1.7 3%
Total 57.6 100%
Table 2-3 Water Main Inventory by Size
Diameter (in) Length (mi) Percent of Total
2 I 0.6 1%
3 0.1 >1%
I
4 3.1 5%
I
6 19.1 33%
...
8 21 37%
10 5.8 10%
12 3.1 5%
14 1.5 3%
16 0.9 2%
18 1.4 2%
20 0.9 2% !
- - ... -- -
Total 57.6 100%
l<AVUGA SC)l UTION
-------------
9 A summary of the facility assets at the pump station, reservoirs, and wells is shown in the following tables. A comprehensive list of assets in each facility can be found in Appendix A. Piping to the facilities is accounted for in the water mains. Note that the PRV at the pump station is accounted for with the valves.

Table 2-4 Mann Pump Station Asset Inventory
Pump Station Asset Class Number of Assets
Mann Pump Station 74
I Building 1
Control Panel 8
I Fencing 1
Generator 2
I HVAC 1
Instrumentation 6
I Lifting Equipment 1
Motor 5
l Pavement 2
Pump 5
l SCADA 1
Sump Pump 2
I Tank 1
Valve 35 J
I Vault Structure 3
l<AVUGA SOI UT ION
10 Table 2-5 Storage Tank Asset Inventory
Storage Tank Asset Class Number of Assets
Mercedes Road Storage Tanks j 23
Building 1
Control Panel 3
Fencing 1
Generator 1
Instrumentation 2
' 1 Pavement 1
SCADA 1
Site 1
Tank 2
Valve 10
Cristo Rey Storage Tank 13
Driveway 1
Fencing 1
Pavement 1
SCADA 1
Tank 1
Valve 7
Vault Structure 1
I
l<AVUGA SOl LJ flC)N
11 Table 2-6 Well Asset Inventory
Well Asset Class Number of Assets
Flowering Pear Well 13
Control Panel 2
Fencing 1
Filter 1
Instrumentation 1
Motor 1
Pavement 1
Pump 1
SCADA 1
Valve 3
Well Casing 1
Franco Court Well 12
Control Panel I 1
Fencing 1
Instrumentation 1
Lighting 1
Motor 1
Pavement 1
I
I Pump 1
I
SCADA 1
Valve 3
VFD 1
Well Casing 1
l<AVUGA SC)1 UT IC)N
12 3 What is the Replacement Cost of the Assets?
In total, there are 12,224 assets in the water system. The replacement cost for each asset was estimated. The replacement cost does not represent a project cost that includes engineering, management, insurance, contingency, etc., costs. In many cases, project costs can add an extra 30% to 50% to the replacement cost. The sum of all individual asset replacement costs for the City's water distribution system is approximately $91.6 million in 2019 dollars.

The assets were further distributed into categories based on the asset hierarchy. The sum of all replacement costs for mains, services, interties, valves, hydrants, meters, is approximately $79.0 million .

Water Mains, $46,017,36
Water Main Casing, S 10,000
Serw-ices. $23.875,944- --------------------~
~ & ZoneVatve. S16,300
[ -~Air Release Valves. $44,537
----- ----.. ._ Air Vent Valve, S7.000
·---- -----...____, Blow Off Valve, S 176,995
---~ rants, S2,562,960
lnterties. S60.000
Line Valves, S 1,441,000
·----------- -M. eters. S-4.829,065
perational Zone Valve. S,4, 700
--Sampling Station. $16,000
Figure 3-1 Replacement Cost of Mains, Valves, Hydrants, and Meters l<AV~CA SOl U r tC:) N
13 The sum of all asset replacement costs (Figure 3-2) in the pump station , storage tanks, and wells totaled $13.0 million.

Table 3-1 provides a summary of replacement costs by facility . It should be noted that a replacement cost does not equal CIP project cost. CIP projects cost can typically be 30 to SO percent more than replacement cost estimate.

Pump Statioo. S2,B9 ,655
• ReserviOll. $8,668,394
• Wells, $1.51),530
Toul= $12.519,579
.------- --w,ell~ S1,511,S30
Reserviors, SB,668,394-----
- - Pump Station, $2,339,6SS
Figure 3-2 Water Distribution Facilities Replacement Cost Table 3-1 Water Facility Total Asset Replacement Cost
Facility Replacement Cost
Cristo Rey Storage Tank $3,182,190
Mercedes Road Station
I
$5,486,204
Mann Pump Station $2,339,655
Flowering Pear Well
I
$746,275
Franco Court Well $765,255
l<AVUCA SOI U l ION
14 4 What is the Current Condition of the Assets?
Condition is one of the best indicators for estimation of immediate and/or future maintenance, repair, and replacement work. During the asset inventory process, the condition of each visible asset was assessed and recorded utilizing the condition assessment scale introduced in Table 1-2. It should be noted that main objective of the condition assessment process is to highlight assets in poor and failed condition (i.e., Poor, Failed/Critical). These poor-condition assets will be included in the 20-year CIP recommendations (Chapter 7).

Where assets are not visible, age was used as the main indicator of the condition of the asset. When installation information was not available, assumptions were made based on neighboring assets or nearby developments (e.g., construction year of neighboring houses). There is a possibility that the mains were installed long before parcel development; however, the actual installation year was unknown. In some cases, the historical record of water main break data was utilized. Where the work report indicated the cause of the main break was due to corrosion, aging pipe, or poor condition, the condition score of the pipe segment where the water break occurred was updated to reflect the poor condition .

4.1 System Level Condition Profile
High-level condition profiles are provided below. These high-level profiles will be followed by specific asset analysis in the following sections.

Water System (Total)
Figure 4-1 provides an overview of the estimated current condition of the water system. This condition profile
includes all assets. It is estimated that about 6% of all assets fall under Poor to Failed/Critical condition. The sum of replacement cost of these assets equates to about $12.6 million.

Water System (Water Mains, Water Services, Meters,
Hydrants, lnterties, and Others)
The estimated current condition profile for water mains, water services, valves, hydrants, meters, interties, and others assets are shown in Figure 4-2. Approximately 6% of the assets are identified in poor and failed/critical condition. The total replacement cost of these assets is about $8.8 million.
l<AVUGA SOI Ur ICJN
a Excellent ~28,587,005-
,... Ve,yGood: S29,900,424
• Good: 120.240.664
• Poor S 11,696.020
• Failed/CntK.al: S 1, 1 S7,334
Total. $91.581.447
Figure 4-1 Condition Profile for the Water System
Condition Profile
• Excellent: 37%
Ve,y Good: 43%
Good: 14%
• Pooc 5%
• Failed/Critical: 1%
Figure 4-2 Condition Profile for Water Mains, Water Services, Meters, Hydrants, lnterties, and Others
15 Water System (Pump Station, Reservoirs, Wells)
Figure 4-3 provides an overall condition profile for pump station, reservoir, and well assets. At these facilities, approximately 23% of the assets are identified as Poor or Failed/Critical condition. The total replacement cost of these assets is about $4 million. Details of assets in need of replacement or rehabilitation will be discussed in the
following sections.
a fxtellonc3"
Vo,yGood:-
· - s,i.,. . Poo,:ZJ'lf,
• F a;Jed,ICritiaJ: O'l6
Figure 4-3 2019 Pump Station, Reservoirs, and Wells
Condition Profile

4.2 Asset Level Condition Profile
Key representative asset level condition profiles are presented in the following sections. The condition profiles are either represented as current percentage of Poor and/or Failed/Critical assets or as replacement needs for the next 10 years.

Water Mains
The following installation profile shows the decade the water mains were installed or last replaced. When installation information was not available, assumptions were made based on neighboring assets or nearby developments (e.g., construction year of neighboring houses). The oldest water mains were estimated to have been installed in the 1950s and 1960s. The following figure presents the age by decade of the water mains with respect to total length. It is estimated that about 38% of the water mains are now over 50 years old. It should be noted that older pipes may potentially exist in the City. According the City's Lease Water System Inspection Technical Report1, the City has a logbook that dates the water mains back to 1916. It stated that the City's water system was originally constructed in 1916 and then expanded in 1938 and 1950s. Unfortunately, no historical as-built drawings could be found to verify this claim. The oldest pipe in the GIS data showed to be constructed in the 1950s.

Figure 4-4 Water Main Installation by Decade
1 SPF Water Engineering, "Final Technical Report: Leased Water System Inspection," 2017. l<AVUCA SC)I U I ION
16 The figure below provides a map of the water main installation profile by decade.

Decade
- - , ....
--1 060s
-- 19·70,
- ,NOt
__ ,_
---
--20 10.

Figure 4-5 Water Main Installation History by Decade
Estimates of pipe useful life play a key role in the asset management analysis for underground pipelines. According to a comprehensive study conducted by Utah State University 2 on water main break rates in the USA, the average age of failing water mains is approximately 50 years old. This number is well below what is usually recommended by most of the pipe manufacturers. The study also found that the break rate of asbestos cement (AC) pipe significantly increased by 43% after reaching 50 years of age. The study concluded that AC pipe installed in the 1960's may be near its end of life. In addition, the study indicated that an average expected life of a newly installed pipe is 84 years.

Typical new installation pipe materials included ductile iron (DI), PVC, HDPE, concrete steel cylinder (CSC), polyvinyl chloride (PVCO), and steel.

A similar study conducted by the US EPA3 stated that post World War II cast iron (Cl) pipe average service life is about 75 years. The US EPA study provided the following expected service lives for different pipe materials :
• AC pipe 15 inch or greater - 85 years
• AC pipe 4 inch or smaller - 40 years
• DI pipe - 87 years
• Reinforced concrete pipe - 140 years
• Concrete - 130 years
• Cl pipe - 75 years
2 Folkman, Steven. "Water Main Break Rates in the USA and Canada: A Comprehensive Study." Utah State University Buried Structures Laboratory (2018).
3 "Primer on Condition Curves for Water Mains." US Environmental Protection Agency. EPA/600/R-13/080 (2013). l<AVUCA SOI. UTION
17 In addition, a recent study by the Sustainable Solutions4 stated that the following useful lives:
• PVC pipe -100 years
• DI - 50 years
• HDPE- 50 years
Multiple water main useful life scenarios were developed and modeled to gain understanding of anticipated water main replacement needs for the next 10 years. Careful analysis of the scenario results can yield a better understanding of future water main replacements .

Scenario 1 - US EPA Useful Lives
A simulation of expected water main replacements was performed utilizing the US EPA pipe useful life presented above. For those pipe materials not identified by US EPA, a useful life of 84 years was used. This number is based on the Utah State University research presented above. Based on this analysis, it is expected that 10-year water main replacement will be about $1.4 million or about 3% of the total water mains. This value represents the pipes currently identified in the leak data to be in poor condition .

Scenario 2- Conservative {100-Year Useful Life)
This scenario provides a conservative look at the water main pipe replacement needs. All pipes were assigned a 100- year useful life. From the water main data, the earliest water main installation recorded in the City was 1954. With a 100-year analysis, the earliest water main replacement will in the mid-2050's, out of the 10-year water main replacement window. Similar to Scenario 1, the 10-year water main replacement is expected to be about $1.4 million (3%) for the replacement of identified poor condition pipes.

Scenario 3 -Aggressive (65-Year Useful Life)
This scenario is developed to represent the worst-case scenario. All pipes were assigned a useful life of 65 years. In reviewing the water leak work data, the representative age of all pipes identified as structurally in poor condition was about 65 years. Based on this analysis, it is expected that the city has to replace about 17% of the total water mains worth $7 million .

Scenario 4 - Hybrid (65-Year Useful Life for AC Pipes and US EPA Useful Lives for Other Pipe Materials) This hybrid scenario was designed to provide a more representative view of the City's water main replacement needs.

As indicated in Scenario 3, the representative age of water mains identified to be poor condition was 65 years. Closer review of poor condition water mains revealed that they are mostly asbestos cement (AC) pipes. In this scenario, all AC pipes were assigned a 65-year useful life while other pipe materials were assigned useful life identified by the US EPA. This assumption is supported by the Utah State University study5. The study revealed that, for AC pipes, the frequency of leaks increased by 43% after 50 years. In another words, after the 50th year, the AC pipe decay curve (Figure 1-2) rapidly falls, indicating that there is little service life left before failure . A majority of AC pipes in the City were installed in the 1950's, 1960's, and 1970's. Based on this analysis, it is projected that the City will need to spend 4 "Life Cycle Assessment of PVC Water and Sewer Pipe and Comparative Sustainability Analysis of Pipe Materials ." Sustainable Solutions Corporation (2017).
5 Folkman, Steven. "Water Main Break Rates in the USA and Canada: A Comprehensive Study." Utah State University Buried Structures Laboratory (2018).

J<AVUGA SOI lJ T ION
18 about $6.6 million in the next 10 years. This equates to about 16% of the total water mains.

Scenario 5 - San Jose Water Company Useful Life
This scenario uses water main useful lives recommended by SJWC. According to SJWC, life expectancy is 85 years for AC, 110 years for Cl and 70 to 85 years for WS mains. The remaining mains are estimated conservatively to have a 100-year useful life. Based on this analysis, it is expected that the City has to replace about 4% of the total water mains worth $2.9 million within the next 10 years.

Water Main Useful Life Scenario Summary
The summary of scenario results is provided in table below . Although it is difficult to predict exactly when the water mains will fail and how much budget is required to replace them, the scenarios provide an expectation between the worst-case and the best-case scenarios. The conservative and aggressive scenarios establish the two extreme numbers . From there, both the hybrid and SJWC numbers incorporate system knowledge in the analysis. From the scenarios, the City may expect to spend about $3 to $6.6 million for water main replacement in the next 10 years.

Table 4-1 Water Main Useful Life Scenario Summary
Scenarios Assumption 10-Year Projection
DI US EPA Useful Lives
a Con~;~ative
II~
~ sive
. - H~1:ir1d
II San Jose Water
Company
Valves
]i Water main useful life based on US EPA study
All water main useful life set to 100 years
]1 All water main useful lif~ set t~- 6~~ears
65-year useful life for AC pipes and US EPA useful lives for other pipe materials
Useful life and replacement cost based on SJWC
recommendation
$1.4 million
$1.4 million
$7.0 million
$6.6 million
$2.9 million
Similar profiles were constructed for valves. The following figure shows the installation profile of the water valves by decade. Like with the mains, assumptions were made based on neighboring assets when installation information was not available. Similar to water mains, 31% of valves are over 50 years old .

J<AVUGA SCJL U T ION
19 Figure 4-6 Valve Installation Profile by Decade
The figure below presents the condition profile for water system valves (i.e., air release, air vent, blow off, line, zone). It was assumed that the water system line valves would be replaced when the main is replaced. As such, the installation year and useful life were set to be the same as the nearest main. Valves on AC pipes were set to 65 years and valves on other pipe materials were set to US EPA recommended years. Data analysis show that about 10% of the valves are in Poor and Failed/Critical condition. In the next 10 years, it is anticipated that the City will need to spend about $160,000 to replace aging valves.

Figure 4-7 Valve Condition Profile
Hydrants
.Exce l~31%
VefyGood: ] )<A.

Good 26"1
. Pooc ....
ll, F;1ik-d/Crrtic.at•t'JE,
The following figure presents the installation profile of the hydrants by decade. Like the water mains and valves, some of the oldest hydrants were installed in the 1950s and 1960s. Currently, about 11% of hydrants are expected to be 50 years or older.
l<AVUGA SOl. lJ I ION
20 2000s
7%
I 2010S i
&% I
1960s
10%
Figure 4-8 Hydrant Installation Profile by Decade
The figure below presents the condition profile of the hydrants. Useful lives of hydrants have been stated to be anywhere between 40 years to 100 years. A 100-year useful life was used in this analysis as the previous condition assessment work (Technical Report of the Leased Water System Inspection, 2017) revealed the hydrants to be in good condition. In general, hydrants are visible and regularly tested and exercised; as such, hydrant condition tends to be more updated and managed compared to other buried assets. Cities and water providers near Cupertino (e.g., City of Livermore, Santa Clara Valley Water District) also utilized a 100-year life for hydrants . The following condition profile reveals the hydrants to be in good condition or better . • Excl!tlef'it 84%
• Ve,yGood, 16%
. Good,""
• Poor0%
• Failed/Critial OS
Figure 4-9 Hydrant Condition Profile
In the next 10 years, fire hydrant needs were limited to maintenance activities (i.e., testing and paint) . During our field visit, numerous fire hydrants that are in need of repaint were identified. It was assumed that a typical per unit cost to sand blast, prime, and paint a fire hydrant is $125. At this rate, the total need for next 10 years was $44,500.

No fire hydrant replacement needs were identified.

Water Services
The following figure presents the installat ion profile of the water services by decade. Like the mains, there were many services for which the installat ion year was not available. As such, age assumptions were made based on neighboring assets or nearby developments (i.e., construction year of neighboring homes). Based on these assumptions, approximately 28% of services are estimated to be 50 years old or older. l<AVUGA SOl LJT"ION
21 1950s
7%
Figure 4-10 Water Service Installation Profile by Decade Due to a thinner pipe wall, water services typically have shorter service life when compared to water mains. Multiple analyses were performed using varying water service life (i.e., SO-years, 65-years, 80-years) to gain understanding of the expected condition and their resulting budget for replacement. These scenarios were developed based available data analytics and from similar projects from nearby areas (e.g., Livermore).

It is important to note that, due to lack of available data, the installation year of water services were estimated to be equal to neighboring assets (i.e., water main) or nearby developments (e.g., construction year of neighboring homes). It should also be noted that , as mentioned in the water main analysis section, that some wate r mains could be older than shown in the database.

According to water service installation data from the past 20 years, over 450 services were replaced since 1997. This equates to about 10% of water services in the City. Further examination of the data revealed that the 53% of the replaced water services were connected to AC water mains where the average age was 43 years old. If water services were installed at the time of water main construction, it can be deduced that useful life of water services is about 43 years. However, since the City is not experiencing daily water service breaks, the scenario analyses of the water service useful life were represented as SO-years, 65-years, and 80-years.

Scenario 1 - SO-Year Water Service Life
An expected useful life of 50 years was used to model the condition of water services. Using a SO-year useful life, it is estimated that about 44% of water services are in Poor to Failed/Critical condition . The total replacement cost of these water services equates to approximately $10.3 million . The Failed/Critical condition water services alone summed to approximately $6.9 million . Failed/Critical condition water services are estimated to have exceeded their expected lives.
l<AVUGA SOL UT ION
22 .. Excellent 25"
l- ve,y Good; rn•
. Goo<l,HI%
. Poor. 15'lh
• fa!iled/Critical 29%
Figure 4-11 Water Service Condition Profile at SO-Year Useful life Scenario 2- 65-Year Water Service Life
An alternative analysis was performed using a 65-year useful life. In this analysis, it is assumed that water services will be replaced at the same time water mains are replaced. In the water main discussion above, it was concluded that reasonable expected useful life of an AC pipe is 65 years. As approximately 60% of the City's water mains are AC (Table 2-2), water service useful life was set to 65 years to assume that water services will be replaced at the same time. The following figure shows the water service condition profile based on 65-year life. In this scenario, services in Poor or Failed/Critical condition equated to 12% or approximately $2.7 million dollars . • b,ellerrt:29%
• Very Good: 34._,
• Good-26'"'
. Poor. 100,
• Failod/Critic.al: 2.%.

Figure 4-12 Water Service Condition Profile at 65-Year Useful Life Scenario 3 - BO-Year Water Service Life
Another scenario was developed simulating 80-year useful life for water services. With the earliest water service installation taking place in the 1950's, an 80-year useful life scenario will push any replacement need for the water services out of the 10-year planning window. As expected, no water services were identified to be in Poor or Failed/Critical condition.
l<AVUGA SC)I . U I IC)N
23 II Excellent 39%
• V.,y Good, 5011
• Good:rn,
. Pcoc ...
• fo;lod/, "1lc.al,°"'
Figure 4-13 Water Service Condition Profile at BO-Year Useful life Water Service Useful Life Scenario Summary
The following table summarizes the water service scenarios. Water service data revealed the average life of the services that have been replaced was 43 years. In addition, the data showed that many services that were replaced were connected to AC pipes, the oldest pipes in the City. As water service pipe walls are thinner, it will be tough for water services to match the life of the water mains. Given this fact, if a reasonable useful life approximation of an AC pipe is 65 years, it will be realistic to assume that water service replacements may reach about $3 million within the next 10 years.

Table 4-2 Water Service Useful life Scenario Summary
Scenarios 10-Year Projection
- I SO-Year $10.3 million
- I 65-Year $2.7 million
- I
80-Year $0
Water Meters
The following figure presents the water meter profile of the services by decade. SJWC practices a 20-year water meter replacement program . In 2009, many of the meters (66%) were replaced. As such, water meters in the leased area are in very good condition . The average age the water meter is 8 years. l<AVUGA SCJI lJ J ION
24 Figure 4-14 Water Meter Installation Profile by Decade The water meter condition profile is provided below. As expected, overall, the water meters are in excellent to very good condition. However, the analysis indicates that there is $36,000 worth of water meters requiring replacement.

According to data, these are water meters that were those not replaced in the recent replacement projects.

Figure 4-15 Water Meter Condition Profile
Facility Condition Profiles
• Excellent: 32%
• Very Good : 67%
. Good:O'lh
• Pooc O'lh
• failed/Critical: 196
The following figures give an overview of the condition of the assets at the pump station, storage tanks, and wells.

On-site inspection of the facility assets took place. All visible and accessible asset condition is based on visual inspection. For those assets not visible or accessible, the condition of the asset was estimated based on age.

Mann Pump Station
The following figure provides an overall asset condition profile for the Mann Pump Station. It was noted during inspections that the pump station is aging; original construction is estimated to have taken place in the 1980's. As shown in the figure, many assets have been replaced since original installation and were in good condition. About 18% of the assets, however, were noted to be in Poor or Failed/Critical condition. In particular, the emergency generators and electrical controls were noted to have likely exceeded their useful lives, and the ability of the generators to provide power when needed was questionable. In addition , pump number 3 is aging and is in need of replacement. The estimated total replacement cost of these assets is about $1.1 million . l<AVUGA SOL UT ICJN
25 a Excellent 5%
• Very Good, 4'lf>
. Good, 73'lf>
• Poor. 18%
• F:1iled/ Cr1tical'. 0-.,
Figure 4-16 Mann Pump Station Condition Profile
A comprehensive list of assets requiring replacement or rehabilitation is provided in Table 4-4 below.

Table 4-3 Mann Station Assets in Need of Replacement or Rehabilitation Asset Name Condition Replacement Cost
Engine-Generator Set, Bus B Poor $360,000
Engine-Generator Set, Bus A (Trailer Mounted) Poor $360,000 Main Switch Board Poor I $100,000
Automatic Transfer Switch. Bus B Poor $30,000
Motor Control/Disconnect - Motor 1 Poor $30,000
Motor Control/Disconnect - Motor 2 Poor $30,000
Motor Control/Disconnect - Motor 3 Poor $30,000
Motor Control/Disconnect - Motor 4 Poor $30,000
Motor Control/Disconnect - Motor 5 Poor $30,000
Booster Pump #3 Poor $100,000
Booster Pump #3 Motor Poor $30,000
Flow Meter Vault Sump Pump Poor $500
Security fence Poor $11,375
Reservoirs
Figure 4-17 provides the condition profile for the storage tanks. It should be noted that this condition profile looks only at structural condition; any level of service recommendations (e.g., regulatory, seismic, water demand) will be included in the recommended CIP and future replacement and rehabilitation sections. As shown in the figures, the Cristo Rey Storage Tank is in very good condition as it was constructed in 2000. Mercedes Station Tank #2 was recently rehabilitated in 2018. Mercedes Station Tank #1 is currently out of service as the current water demand l<AVUGA SOI LIT ION
26 does not require it. However, if the water demand increases, Tank #1 will be required again. A full rehabilitation will be required if Tank #1 is to come back on line. In 2018, Tank #2 was rehabilitated for $1.5 million. Rehabilitation of Tank #1 should cost about the same.

Cristo Rey Storage Tank
Wells
• bul~nrO'lC,
• Very Good: 100'll,
·-... ·-... • h ~t<l: O'\
Mercedes Station Tank #1
.fu:tllfntO,,.
• .,.,.,Good-..
· -'"'
. Poor:,~
• rai1«1:01&
Figure 4-17 Storage Tanks Condition Profile
Mercedes Station Tank #2
. Exce.'lent O'l.
a veryGllOd100%
. Good..,,.
. _ , ..
• Faied-0%
The condition profile of both Flowering Pear Well and Franco Court Well is presented in Figure 4-18 below. The overall condition of the wells is good as both wells were rehabilitated in 2015. At both wells, assets in need of update or replacement are electrical assets and fencing . The total replacement cost of assets in need is estimated to be about $51,000.

Flowering Pear Well
a c>1cellent0%
I,. Very Good : 23%
a Good: 54%
• Poor 23'%
• Failed/C.ritical: 0%
Franco Court Well
Figure 4-18 Flowering Pear Well and Franco Court Well Condition Profile • Excellent. 0%
I\ Very Good: 17%
III Good:67%
• Poor: 17%
• Failed/Critical: 0%
A comprehensive list of assets identified at the wells to be in poor condition is provided below . The list is categorized based on on-site visual inspection and age-based estimation . These poor-condition assets will be included in the 20- year CIP recommendations (Chapter 7).
l<AVUGA S O l U fl O N
27 Table 4-4 Flowering Pear Well and Franco Court Well Assets in Poor Condition Well Asset Name Condition Replacement Cost
Flowering Pear
I Fencing I $7,875
Control panel $10,000
I Transfer switch I $15,000
Franco Court
I Fencing I $3,150
Motor controller $15,000
l<AVUGA SC)I lJ T ION
28 5 How Should the Assets be Prioritized?
In order to prioritize the future needs for the water assets, a risk-based approach that incorporates Probability of Failure (PoF) and Consequence of Failure (CoF) was utilized.

5.1 Probability of Failure
The PoF score indicates the projected time until the asset fails to function as intended. PoF was represented by a score of O (new or very low probability of failure) to 1 (failed or very high probability of failure). An asset failure is represented by different failure modes (i.e., mortality, capacity, level of service, financial efficiency).

For the mortality failure mode, asset condition score or age was the key factor in determination of the PoF score.

For water mains, historical main breaks were also incorporated.

For the capacity failure mode, hydraulic modeling work was performed to identify any capacity issues in the water system. The results of the hydraulic modeling indicate that the current system is capable of meeting current and future demand. However, field sample testing was lower than the hydraulic modeling capacity. The field results could be due to valve issues, leakage, or other issues; more investigation is required. For more information on the hydraulic modeling, refer to Appendix B.

For the level of service failure mode, the need for changes to the system to support the service demand were incorporated in the asset failure. These included water pressure, water quality, regulatory, safety, and emergency concerns.

For the efficiency failure mode, low efficiency (e.g., financial, energy) was the key factor for identifying asset failure.

5.2 Consequence of Failure
The CoF is a numerical measurement of the criticality of the asset, that is, the impact of the asset failure. Where applicable, the impact of failure was assessed with respect to the triple bottom line factors of sustainability:
economic, social, and environmental. CoF scores were assigned on a scale of 1 (low criticality) to 5 (high criticality) .

The CoF is used to help prioritize the asset under limited budget and resources.

Prior to the asset management project, SJWC conducted a CoF analysis as documented in the 2015 Pipeline Consequence of Failure Study (Appendix C). The goal of the study was to rank each segment of the water pipeline from the highest to lowest consequence of failure .

The following consequences were considered during the CoF evaluation :
• Health and Safety
o Potential water quality hazards due to contamination infiltration o Potential for injury due to flooding
o Disruption to critical facility operations
• Transportation
o Disruption to traffic along high traffic volume roads • Business
o Disruption to businesses
• Systems Operations
l<AVUGA SOL UTION
29 o Water supply shortage due to transmission main damage o Water system facility disruption due to critical pipeline damage Based on the principles of asset management, the CoF methodology was concluded to be sound. The CoF scores for the water mains were incorporated into the asset management study. In some cases, the water main IDs had changed since the 2015 study. These changes are likely due to water main replacement. Where possible, the score from the study was applied to the new pipe ID; where the new and old pipe IDs could not be reconciled, the score from the neighboring pipe was applied.

In order to make the main CoF scores consistent with facility asset CoF scores, the scores and ranking from the 2015 study were normalized to the 1 to 5 scale as summarized in the following table .

Table 5-1 Water Main CoF Scoring
Pipe Rank % of Total Pipe Quantity % of Total Pipe Length CoF Score 1 to 106 10% 8% 5
107 to 212 I 10% 22% I 4
213 to 530 32% 33% 3
531 to 760 I 22% 27% I 2
761-1061 I 27% 26% 1
I
The following figure illustrates the CoF scores for the water mains. Valves along the water mains (e.g., line valves, blow off valves, air release valves) were given the same CoF score as the highest-CoF main to which it is attached.

Figure 5-1 Water Main CoF Scores
l<AVUGA SCJI Ur ION
30 The remaining water distribution asset CoF scores are shown in the table below . As hydrants provide critical emergency services, they were given a CoF score of 5. Water meters and services were given scores based on size.

The greater the disruption a water service failure would cause, the greater the economic consequence of a failure .

Table 5-2 Water Distribution CoF by Asset Class
Asset Class CoF
Hydrant 5
Hydrant Valves and Pipe 5
lnterties 5
Meters and Services~ 4 in 4
Meters and Services between 1.5 and 3 in 2
Meters and Services:,; 1 in 1
The following table shows the CoF scores for the water facility assets. Facility assets were given CoF scores based on their importance to the overall facility's ability to function. As such, many of the major mechanical and electrical assets (e.g., pumps, motors, emergency generator, MCC) were given high CoF scores.

Table 5-3 Water Facilities CoF by Asset Class
Asset Class CoF Asset Class CoF
Tank r 5 Flow Meter 4
Motor 5 Level Sensor 4
Pump I 5 Pressure Transmitter
I
4 Generator 5 Intrusion Alarm 4
SCADA 5 Sump Pump 4
Vault Structure 5 Building 3
Well Casing 5 I Strainer 3
Level Switch 5 Gantry Crane 3
Level Transmitter 5 Driveway/Pavement 2
Local Control Panel 4 Exhaust Fan 2
Transfer Switch 4 I Valve 2 I
Breaker Panel 4 Fencing 1
Main Switch Board 4 Lighting I 1
I -
Disconnect Switch 4
l<AVUGA SOLU T IC)N
31 The following figure summarizes the percentage of critical assets. Figure 5-2 represents the asset criticality profile for all assets. Using the CoF assessment methodology summarized above, about 14% of all water system assets are considered to be critical (CoF ~ 4).

CoF=1, Count=S,579-----------..
------- -<"oF=S. Count=1,481
'--------- -roF=4, Count=242
--CoF=3, Count=650
- CoF=2. Count=1.292
Figure 5-2 Asset Criticality Profile

5.3 Risk
The following figu res show the resulting overall risk profiles for the water system. This profile incorporates both the Probability of Failure (PoF) and Consequence of Failure (CoF) scores to prioritize the assets. The assets in the red zone of the risk matrix are the highest risk assets. Under limited resources, assets in the red zone should take priority over others in terms of being replaced.

There are 26 high-risk assets with a total estimated replacement or rehabilitation cost of approximately $3.8 million .

These assets are composed of water mains, water distribution system valves, water services, emergency generators, and tank rehabilitation at Mercedes Road. It should be noted that, as mentioned in Section 4.3, that Mercedes Station Tank #1 is currently not operating as the current water demand does not require it. However, if the water demand returns to historical level (3 MGD), Tank #1 will need to be operating again. More discussion on the need of Tank #1 will be provided in the CIP section (Chapter 7) of this report . The high-risk assets will be included in the 20- year CIP recommendations . The 148 assets in the medium risk (yellow zone) include water mains, water services, fire hydrants, and others . Under ideal conditions, all assets would be replaced as they reach PoF 1 at the top of the matrix ; the replacement should be prioritized based on risk (red, yellow , and green) . l<AVUGA SC)L U I ION
32 0.9
o.a

0.7 l!? o.s
j
0 ~
o.s
j
OA

0.3 O.l

0.1 2
Ca,sequeoce of failure
Figure 5-3 Risk Matrix
l<AVUGA SOI . U T I O N
33 6 What are the Recommended Levels of Service?
Levels of service are performance indicators expressed as specific, measurable outcomes with defined time constraints. Service levels support priorities expressed in strategic plans, budget objectives, and policy-maker direction. The City should use levels of service to describe a commitment to service delivery, sustainability and risk management, asset performance, and regulatory compliance. Service levels are measured on a regular basis to learn where the organization is meeting or exceeding its goals and where improvement is needed. Service levels also indicate the level of effort and likely costs the agency must incur to meet its goals. The International Organization for Standardization in its Asset Management Guidelines (ISO 55002:2014(E)) note that defining service levels help ensure that the organization's assets are meeting the needs of customers and other stakeholders.

In order to develop levels of service for the City's water distribution system, four categories of indicators should be considered:

1. Sustainability - Sustainability topics will include minimizing the environmental impact of water operations, providing adequate financial resources for operations and capital needs, and maintaining a data-driven , effective organization .

2. Asset Performance - The asset performance section will identify actions required to obtain maximum performance and value from the community 's investment in infrastructure .

3. Customer Service - The customer service category will address rate payers' expectations for product quality and reliability and for responsive, effective assistance from water organization employees.

4. Regulatory Compliance - Regulatory compliance will call out the responsibilities of the water agency to remain in compliance with the elements of the California Water Resources Control Board (WRCB) permit, state laws, and water regulations .

The tables below contain 51 level of service measurements recommended for the City. The indicator's level of importance is ranked on the following scale.

Table 6-1 Level of Service Importance Ranking
Rank Description
3 Critical
2 I Important
1 Useful
The measurements that matched AWWA "Benchmarking Performance Indicators for Water and Wastewater (2016 Edition)" are accompanied by the AWWA's benchmark numbers represented as high, median, and low percentiles of performance . Management and policy-makers often use these indicators to monitor performance and track the movement in the set direction.

6.1 Environmental, Organizational, and Financial Sustainability Levels of Service The follow ing table presents the recommended sustainability level of service to ensure stability by minimizing impact on the environment , maintaining an effective, productive organization, and ensuring that current and future financial obligations will be met.
l<AVUGA SOl Ul"IC)N
34 Table 6-2 Environment, Organization, and Financial Sustainability levels of Service AWWA Performance Indicators
What We Do What's Our Standard How We Criticality 75th Med ian 25th Measure Level Percentile Percentile
Capital expenditures or funds 2.8% of NPV of pump station Auditor attests 3 2.80% 1.50% 0.60% reserved for pump station and rehabilitation/ replacement annually storage rehabilitation/ cost
I I I I replacement ..

Capital expenditures or funds 2.5% of NPV of well Auditor attests 3 2.5% 1.5% 0.3% reserved for well rehabilitation/ rehabilitation/ replacement annually replacement cost
Capital expenditures or funds 2.1% of NPV of distribution Auditor attests 3 2.1% 0.9% 0.5% reserved for main and service piping rehabilitation/ annually line rehabilitation / replacement replacement cost
Set billing rates at levels that Rates provide adequate Auditor attests 3 support both routine operations funding for operations , current annually and planned capital capital projects, and reserve
replacement and rehabilitation . funds as established by system Adjust rates annually . policy-makers
Employees maintain required 100% I Quarterly 3 :
certification levels review of
training and
' I testing records j
Monitor and reduce water loss S4% AWWA water 2 3 .3 5 .9 14.3 audit software
Keep employee turnover rate S5% Human I 2 5.8% 6.8% 9.6% low resources
I
! director attests
Maintain at least a 2-day supply 4.86 MG System records 2 in storage based on average annually and
production for the previous 5 adjusted by the
years UWMP
High risk assets receive prior ity Funding for high risk asset Biennial policy- 2 funding in replacement and replacement /rehabilitation not maker review of rehabilitation program less than 85% of planned wor k asset risk assessment and
'
' CIP
Adopt and regularly revise Management review s and Annually 2 standard operating procedures approves
Increase annually use of 5% increase year over year System records 1 recycled water for irrigation and annually
other non-potable uses year
I
I over year I I
l<AVUGA SC)L U r tc),-... 1
------------------ -35
AWWA Performance Indicators
What We Do What 's Our Standard How We Criticality 75th Median 25th Measure Level Percentile Percentile
Reduce electrical power costs ~2% Power bills and 1
year over year and increase records of local
alternative energy sources and power
fuels. generation
quarterly . Fuel
consumption
records
quarterly
Per capita water use steady to Per capita use does not exceed Customer billing 1 declining a rolling two-year average records
Make maximum use of grants 1 successful application every 3 Application 1 and zero interest rate loans to years history
support the water system
Maintain at least a high-grade Annual review Rating agency 1 bond rating
Employees rate workplace as ~85% Biennial survey 1
excellent or good

6.2 Asset Performance Levels of Service
From piping to pumps, a distribution system is asset-centric. The ability of underground and above ground assets to function properly facilitates delivery of potable water to customers. Establishing asset performance measurements will give management and policy-makers the guideposts needed to keep the organization's physical assets functioning at desired levels. A complete asset inventory, including criticality, will be instrumental in planning and executing preventive and corrective maintenance. Identification of critical assets and careful assessment of risk, updated routinely, will assure that limited resources are directed toward assets with the highest impact and probability of failure.

Table 6-3 Asset Performance Levels of Service
AWWA Performance Indicators
75th 25th
What We Do What's Our Standard How We Measure Level Median Percentile Percentile
High risk system valves ~99% Maintenance records 3
exercised annually quarterly review
Low risk system valves ~20% Maintenance records 2
exercised annually quarterly review
Hydrants tested 20% per year Maintenance records semi- 3 annual review
Asset inventory and 100% of assets Capital purchase and 3 criticality database up to identified and maintenance records date criticality assessed reviewed annually
Asset failures analyzed,
I
~99% Maintenance records 2
and follow up actions annual review
completed I
l<AVUGA SC.J! lJ r1C)N
36 AWWA Performance Indicators
75th 25th
What We Do What's Our Standard How We Measure level Median Percentile Percentile
Asset operation and 2'99% Maintenance records 1
maintenance costs fully annual review
tracked
Operate a mechanical, Failures and impaired Report performance and 3 electrical, performance decline replacement of equipment I instrumentation and year over year. Non- in program semi-annually I structural preventive compliant equipment !
' maintenance program replaced I
I
for all assets valued at I
$5,000 or critical to I
system operation I ...

Tank cleaning and 100% Maintenance records 3
inspection every 5 years
including corrosion
control
Main or service line 2'95% Maintenance records 1
breaks repaired within 6
hours
Adopt and revise a five- Policy-makers Annually 2
year capital approve plan and
improvement plan that revisions. Review
reflects asset criticality progress.

Testing of large meters Large meters - Maintenance records 2 or aging meter groups annually
Aging meters - 20% I
annually I
Conduct a leak detection Water loss declines Management report to 3 program to reduce water year over year by at policy-maker annually . loss and identify failing least 5%. Failing
pipe sections segments identified
and prioritized for
repair or replacement
Breaks or leaks per 100 ~6
I
Maintenance records 3 6 13 25
miles distribution pipe
Maintain and update Biennially Management reports to 2
system risk assessment policy-makers

6.3 Customer Service Levels of Service
Customer service indicators describe the actions the organization will take to ensure the satisfaction of the rate payers and consumers. These levels of service set out markers for staff and decision-makers to guide individual interactions, community outreach and information availability, and the quality and reliability of the product. l<AVUGA SCJI. u ·1 10N
37 Table 6-4 Customer Service Levels of Service
AWWA Performance Indicators
What We Do What 's Our Standard How We Measure Level 75th Median 25th Percentile Percentile
Answer phone calls 90% of calls Phone system records 1
promptly answered within 20 monthly
seconds
Total hold time -, 1 minute Phone system records 3 0.6 1 2 monthly/ annual customer
survey
Percent of calls 3.6% Phone system records 2 3.6 6.5% 10.6% abandoned monthly
Water quality complaints 3 Customer records 1.7 4.1 10.5 per 1,000 customers
Customer requests .:98% Customer management 2
resolved within 1 software monthly/annual
business day customer survey
Minimum notice of 24 .:98% Notice and outage records 2
hours for all planned quarterly
shutdowns
Minimum notice of 15 .:85% Notice and outage records 1
minutes for all quarterly
unplanned shutdowns
Amount of time water is 99.90% Outage records quarterly 3 available to all customers
Unplanned outages per 1.38 Outage records quarterly 3 0.51 1.38 2.89 year per 1,000 customers
Customers able to use .:90% Annual customer survey 2
desired payment
methods for water bills
Customers able to use .:95% Annual customer survey 2
desired tools to learn
about water system . I activities and issues
Customers rate water .:90% Annual customer survey 3
service excellent or good
AWWA stakeholder .:90% Management review 2 92% 67% 42%
outreach program
! checklist I I

6.4 Regulatory Compliance Levels of Service
Regulatory compliance is required by provisions of federal and California law and by orders and resolutions of the l<AVUGA SC.)t U rlC)N
38 State Water Resources Control Board, California's primary water regulator . The indicators in this section highlight the actions necessary to reliably deliver high-quality and safe drinking water, meet community fire flow demands, and secure future water supplies.

Table 6-5 Regulatory Compliance levels of Service
AWWA Performance Indicators
75th 25th
What We Do What 's Our Standard How We Measure Level Median Percentile Percentile
Remain in compliance with all 100% WRCB 3 100% 100% 100% permit requirements
Provide fire flows required by 100% Annual testing in 3 SCCFD conjunction with
flushing program
Urban Water Master Plan Every 5 years Management presents 3 I
completed results to policy-
makers 1.
.

Maintain backflow prevention All devices tested and in Test records. Location 3 program in compliance with compliance . All program and required Title 17, Code of Regulations requirements met improvement reports .

Annually .

Maintain 0.2 free chlorine in 100% Sample testing records 3 I I distribution system i
Complete sanitary survey for Every 5 years Management presents 3 well sites results to policy-
makers,
Maintain system pressure ~95% Maintenance records 2
between 40 and 70 PSI
Flush system annually to 100% of dead ends and Maintenance records 2 maintain water quality low flow areas;
33% of other mains
,.___ l<AVUGA SOI Ur IC)N
39 7 What is Needed to Sustain the Delivery of Services? The next step in the asset management analysis is to investigate the current and future asset replacement and rehabilitation needs. The future needs of the water system were evaluated based on the following methods :
• Condition and Age
• Level of Service
• Efficiency
The condition and age-based analysis focuses on the physical mortality of the assets, including when the assets need replacement and how much it will cost. The level of service analysis investigates the current system's ability to continue delivery of services, including capacity and safety. The efficiency analysis evaluates the system for any efficiency recommendations.

7.1 Condition and Age Based Analysis
In order to estimate the long-term asset replacement and rehabilitation needs in terms of physical mortality, a life­ cycle cost analysis was performed for each asset. As described in Section 1.2 of this report, each asset class was assigned a life cycle cost logic or management strategy (e.g., useful life, decay curve, rehabilitation activities) that includes the rehabilitation and replacement activities to best characterize the life cycle investment needs for the asset. The estimated useful life is based on industry standards/reference documents (e.g., AWWA, Water Research Foundation, US EPA, Utah State University) or similar projects nearby the City (e.g., City of Livermore, Santa Clara Valley Water District) . Assets in condition 4 or 5 that fail within the planning horizon are included in the long-term replacement needs. The following table summarizes the management strategies.

Table 7-1 Management Strategies
Useful Rehabilitatio Frequency Rehabilitation Frequency Asset Class Life Cost Cost (Years) n Activity (Years) Activity (Years)
Air Release Valve 40 I
Blow Off Valve 40
Water Main - AC 65 '
Water Main - DI 87
Water Main - Cl 75
Water Main - 84
FCKL, PVC, or WS
Water Main 84
Casing
Line Valve, Same as
Connected Main Main
Water Service I 65
Meter 20
Sampling Station 100
Fire Hydrant 100 Rehabilitation 15 $300
(Paint)
l<AVUGA SOL U I ION
40 Useful
Life Rehabilitatio Frequency Rehabilitation Frequency Asset Class Cost Cost (Years) n Activity (Years) Activity (Years)
Mann Pump Major 30 30% of cost Replace 15 $21,000
• Station Building rehabilitation roofing
Breaker Panel 30
Control Panel 30
Disconnect 15
Switch
VFD 15
I
Exhaust Fan 20
Fence 20 I ;
Flowmeter 20
Gantry Crane 15
Generator 30
lntertie 100 I
Intrusion Alarm 15
Level Sensor I 10
Level Switch 10
Level Transmitter 10
Lighting 30
Motor 20 Rehabilitation 10 25% of
replacement
I I cost
Pavement - 80 Rehabilitation 20 25% of
Asphalt replacement
cost
Pavement- 80 Rehabilitation 20 25%of
Concrete replacement
I
cost
Unpaved Road Rehabilitation 2 25% of
replacement
cost
Pressure 10 : I
I
Transmitter I
Pump 40 Rehabilitation 20
1 25% of
replacement
cost
SCADA 15 ➔ I
Strainer 15
"
Sump Pump 10
l<AVUCA SOl lJ flC">N
41 Reservoir Tank 125 Rehabilitation 35 $ 500,00 Drain and 7 $10,000 (e.g., paint) 0 inspection
Transfer Switch 30
Facility Isolation so
Valve
Facility Check 35
Valve
Facility Air 25
Release Valve
Vault Structure 100
The following figures show the long-range asset replacement and rehabilitation needs for the water system assets.

Three planning horizons were utilized : 100 years, 20 years, and 10 years. A 100-year analysis provides a visualization of full replacement of all assets in the water distribution system (e.g., water main with 100-year life). For planning, a 20-year view provides a closer outlook of any upcoming spikes. A 10-year horizon will provide a more detailed information on what assets are anticipated to fail in the near future . 100-Year R&R Analysis
The result of a 100-year life cycle analysis is provided below. The total asset replacement and rehabilitation needs for the next 100 years is estimated to be $164.9 million. The average annual asset replacement and rehabilitation need is approximately $1.6 million in 2019 dollars. Inflated costs were not calculated as the long, 100-year, horizon exponentially increases the total replacement and rehabilitation sum. In addition , the City will never plan based on a 100-year planning horizon.

In the first couple of years, most replacement and rehabilitation needs are for water mains, valves, services, and meters; the overdue replacements include water services that are estimated to need replacement and recommended replacements at the facilities (e.g., emergency generators) . $6,000.000
$4,000,000
$2,000.000
so
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 209-0 2095 2100 2105 2110 2115 2120 Vear
Figure 7-1 Water Distribution Asset Replacement and Rehabilitation Profile {100 Years) l<AVUGA SOI U r lON
42 20-Year R&R Analysis
In addition, a 20-year replacement and rehabilitation analysis was conducted. The total replacement and rehabilitation need for the next 20 years is $37.1 million . The average annual needs over a 20-year horizon is approximately $1.9 million per year.

S4,000,000
~"·~- --.1 •. -1_11
$0 C
2020 2025 2030 2035
Year
Figure 7-2 Water Distribution Asset Replacement and Rehabilitation Profile (20 Years) The following graph provides a closer look at Figure 7-3 by summarizing the 20-year age and condition-based needs by asset class or location. Note that level of service recommendations will be covered in the next section. Over the next 20 years, it is anticipated that water mains ($17.3 million), water services ($9.2 million), Mercedes Road and Cristo Rey reservoirs ($2.1 million), and Mann pump station ($2.4 million) will be the biggest needs.

Water Mains, I ______
$17,376,126 r- ----
I Services,
2_9,244 ,742
Air Release Valves ,
$3,857
., r-
.,/~ w Off Valve ,
/ / L $154 ,2 50
,--~
-·..:;:- Fire Hydrant, ,
$233,100
"-
jline 'valves, I
-:::.::,- . 1 sso9,6oo i
' ~ -~---
• Meters, $4,829,065 I
Figure 7-3 Total 20-Year Condition-Based Replacement and Rehabilitation Profile by Asset Type The bulk of the R&R needs over the 20-year horizon for reservoirs is for Mercedes Road Station. These activities include the electrical building and system replacement, generator installation, tank rehabilitation/inspection, site rehabilitation, and replacement of various instruments and valves.

ICAVUGA SOL. u ·11 C)l'- I
43 The future R&R over the 20-year horizon for Mann Pump Station includes generator replacement, pump and motor assembly replacements, tank rehabilitation/inspection, and building and site rehabilitation. 10-Year R&R Analysis
The analysis was repeated using a 10-year horizon to project the short-term needs. The total replacement and rehabilitation need for the next 10 years is $13.8 million. The average annual needs over a 10-year horizon is approximately $1.4 million per year.

SJ,000.000 -----
S2,000.000
Sl,000.000
so <
2020 2025
Year
Figure 7-4 Water Distribution Asset Replacement and Rehabilitation Profile (10 Years) The following figure presents a more detailed look of Figure 7-5 by summarizing the 10-year age and condition-based needs by asset class or location. Note that level of service recommendations will be covered in the next section. Over the next 10 years, it is anticipated that water mains ($6.7 million), water services ($3.0 million), Mercedes Road and Cristo Rey reservoirs ($1.9 million), and Mann pump station ($1.6 million) will be the biggest needs.

Water Mains,
$6,660,642
~------. Fire Hydrants, I
$114,300 .

Line Valves,
$140,200
Figure 7-5 Total 10-Year Condition-Based Replacement and Rehabilitation Profile by Asset Type The bulk of the R&R needs over the 10-year horizon for reservoirs is for Mercedes Road Station. These activities include the electrical building and system replacement, generator installation, tank rehabilitation/inspection, site rehabilitation, and replacement of various instruments and valves. l<AVUGA SO! Ur IC.JN
44 The future R&R over the 10-year horizon for Mann Pump Station includes generator replacement, pump and motor assembly replacements, tank rehabilitation/inspection, and building and site rehabilitation.

R&R Analysis Summary
The following table summarizes the annual average for the different replacement and rehabilitation analyses.

Table 7-2 Water Management System R&R Summary
Analysis Type Total R&R Annual Average
100-Year $165 million $1.6 million
20-Year $37.1 million $1.9 million
20-Year with 3% Inflation $50.9 million $2.5 million
I
10-Year $13.7 million $1.4 million
10-Year with 3% Inflation $15.5 million
I
$1.5 million
The following figures provide a closer look at when major replacement needs are projected for the water mains, water services, and water meters.

Water Mains
The following figure presents the projected water main replacement for the next 20 years. As discussed previously, a large portion of the water mains are aging and are estimated to need replacement in the near future. In particular, AC mains estimated to have been installed in the 1950's and 1960's will are estimated to need replacement. In the next 20 years, approximately $17.4 million worth of mains are estimated to need replacement, with an annual average need of approximately $869,000.

S2,000,000
S 1,000,000 ,o~.o~ p,
so (
2020 2025 2030 2035
Year
Figure 7-6 20-Year Replacement Profile for Water Mains
An additional analysis was conducted on the future main replacement needs using a probabilistic method. In this analysis, some mains are projected to fail earlier than their expected useful lives, while others are expected to fail later . Using this projection method, $9.4 million worth of mains are estimated to need replacement in the next 20 years, with an annual average of $468,000.
l<AVUGA SCJ! l..J r ION
45 I
~
t-
S900,000
~
·-- t
S600,000
I I
S300,000 _.
2019 2022 2025 2028 203) 2034 2037 204d
Year
Figure 7-7 20-Year Replacement Profile for Water Mains - Probabilistic The following table compares the water main replacement analyses. The actual water main replacement needs will likely fall between the two analyses.

Table 7-3 20-Year Water Main R&R Summary
20-Year, Probabilistic $9.4 million $468,000
Water Services and Water Meters
Replacement profiles of water services and water meters are presented below. Due to their shorter lives, it is projected that the greatest near future asset replacement needs will be water services and water meters. As shown in the figure below, approximately $14.1 million worth of services and meters will need replacement in the next 20 years, with an annual average of $704,000.
$3,000,000
$2,000,000
r
$1,000,000
$0 <
2020 2025 2030 2035
Year
Figure 7-8 20-Year Replacement Profile for Water Services and Meters l<AVUGA SC.)I u ·1 ICJN
46 An additional analysis was conducted on the future water services and water meters replacement needs using a probabilistic method . In this analysis, some services and meters are projected to fail earlier than their expected useful lives, while others are expected to fail later. Using this projection method, $7.4 million worth of meters and services are estimated to need replacement in the next 20 years, with an annual average of $371,000 . -~-
Sl.200,000
I
_J •
$900,000 ---1
$600,000 'fr
$370,676
Sl00 ,000
$0
-,--- , .... ___. ~- --
2019 2022 2025 2028 2031 2034 2037 2040
Year
Figure 7-9 20-Year Replacement Profile for Water Services and Water Meters - Probabilistic The following table compares the water services and water meters replacement analysis. The actual replacement needs may fall between the two analyses.

Table 7-4 20-Year Water Services and Water Meter R&R Summary Analysis Type Total R&R Annual Average
20-Year $14.1 million I $704,000
20-Year, Probabilistic $7.4 million I $371,000
Backlog Analysis
Analysis was performed to compare and contrast the projected asset replacement and rehabilitation work since the start of SJWC's operation in 1997 to actual work performed by SJWC. A life-cycle cost analysis was performed with start year of analysis set to 1997. A planning horizon of 21 years was used to project the asset replacement and rehabilitation needs from 1997 to 2018. According to the analysis, an estimated asset replacement and rehabilitation needs for the 21-year period was $10.3 million. From this value, assets identified with known install year between 1997 and 2018 were removed. This assumes that those assets were installed under SJWC's management. The sum of all assets installed between 1997 to 2018 equated to $8.8 million. Taking $8.8 million from the projected $10.3 million reveals a value of $1.5 million. In theory, $1.5 million should be the amount of backlog not addressed from 1997 to 2018. However, the confidence level of $1.5 million is low. According to the City, SJWC reported having spent $5.73 million on asset rehabilitation and replacements since 1997. Based on this fact, the actual backlog of work could range from $1.5 million to $4.57 million.
l<AVUGA SC)l Ur ION
47 7.2 Level of Service Analysis
The Level of Service analysis investigates the need for changes to the system to support the service demand. A capacity analysis considering both the current and future demand for water services in the water system was performed as part of the asset management study. The demand includes fire flow demands. As identified in the Cupertino Leased Water System Capacity Analysis (2018), no excessive capacity issues were identified under current demand.

The future demand analysis shows that the system demand trend has been decreasing in recent years due to the state-wide drought . In addition, limited or no growth is expected in the service area. As such, the system has the capacity to support future water demand. For more information about the water demand and capacity analysis, refer to the Cupertino Leased Water System Capacity Analysis (2018).

If the water demand rises, it is recommended that the City bring the Mercedes Road Storage Tank #1 back in service.

Figure 7-10 shows a 10-year history of average water consumption . Since 2008, the average water consumption in Cupertino has steadily declined due to drought and water conservation programs. However, after recent wet winters, the graph reveals the average water consumption rising again. In 2008, the average water consumption was 3 MGD. In 2017, this value dropped to 2 MGD. At 2 MGD, the total capacity required is 3.3 MGD, using a design factor (maximum daily demand) of 1.5 and fire flow requirement of 0.3 MGD. Even with Mercedes Road Storage Tank #1 out of service, there is enough storage (4 MG) in the system to handle this load. However, as the graph shows, starting 2018 there is a bit of upward trend in water consumption. If this trend continues, when the average water consumption reaches 2.5 MGD, the total required storage capacity will reach over 4 MG. In 2018, the average water consumption was 2.26 MGD. The estimated cost to bring Mercedes Road Storage back in operation is approximately $1.92 million . This estimate includes rehabilitation , seismic upgrades, adding mixers, and other safety upgrades. This cost is reflected in Table 7-9.

Average Water Consumption

3.5 T
3 t

2.5 -t
Cl 2 (!J
~ 1.5 t
1 -H-~ 0.5 -t--l-
0 N N N N N N N N N N N N N
0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... N 00 <D 0 ..... N w ,.,. V1 (j) -...J co <D 0
Year
Figure 7-10 10-Year Water Consumption Trend
An additional recommended level of service is to develop an Urban Water Master Plan at an estimated cost of $250,000 every 5 years.

Another r ecommended project is related to the chronic low service pressure at Inspiration Heights. During the project and capacity investigation, it was found th at 22 service locations have low pressure concerns. A closed wat er l<AVUCA SOl LJ I ICJN
48 service pressure zone should be investigated as a solution . This project includes the assessment and design, as well as the installation of a hydropneumatic tank, a small 24-hour pumping system and standby fire pumps, and a separate distribution piping system for an estimated $500,000. This project is recommended to be implemented within 5 years.

The connection/development of a SCADA monitoring system for the City is another recommended project . The priority of this recommendation varies based on whether the City chooses to operate the system or not. Even if the City does not operate the system, it will be helpful for the City to have the ability to monitor the status of the Leased Water System. This project is estimated to cost $300,000. This project is recommended to be implemented within 10 years, or earlier if the City decides to operate the system.

In addition, level of service includes the investigation of upgrades for regulatory, safety, and emergency concerns at the facilities. Seismic and emergency power upgrades for the storage tanks and wells were identified. The following table shows the recommended level of service upgrades for the facilities.

Table 7-5 level of Service C/P Recommendations
Year Asset / Location Activity Estimated Cost
2019 Mercedes Road Station Site Thin foliage and create fire i $45,000 break
I
2020 Mercedes Tank #2 Improve seismic stability with $308,000 anchoring, foundation repair,
flexible piping and other
1 reinforcement
2023 Flowering Pear Well 1 Install emergency generator $200,000 2023 Franco Court Well Install emergency generator $200,000 2024 Mann Pump Station Suction Tank I Improve seismic stability with $92,400 I
anchoring, foundation repair,
I flexible piping and other
reinforcement
2025 SCADA Monitoring Office $300,000
2029 Mercedes Tank #1 Improve seismic stability with $308,000 anchoring, foundation repair,
flexible piping and other
reinforcement

7.3 Efficiency Analysis
The efficiency analysis examined opportunities for increased efficiency (e.g., financial, energy) in the system. In the Recommended Levels of Service, reduce electrical power costs year over year and increase alternative energy sources and fuels was one of the recommendations . The following projects will also help to address th is level of service. The following table includes the specific recommendations for the VFD/soft start CIP recommendations for energy efficiency.
l<AVUCA SC)t lJ I IOr-. 1
49 Table 7-6 Efficiency CIP Recommendations
Year Asset Activity Estimated Cost
2021 Mann Pump Station Install VFDs/Soft starts $150,000 2023 I Flowering Pear Well I Install VFD/Soft start I $15,000 2023 Franco Court Well Install VFD/Soft start $15,000

7.4 Analysis Summary
The following table summarizes the total water system needs, including the condition/age, level of service, and efficiency analyses.

Table 7-7 Long Range Water System Needs Summary
Analysis Type Total R&R Annual Average
100-Year $166.8 million $1.7 million
20-Year I $38.8 million $1.9 million
20-Year with 3% Inflation $54.4 million $2.7 million
10-Year I $15.3 million $1.5 million
10-Year with 3% Inflation I $17.6 million I $1.8 million The follow ing figures show the long-range replacement and rehabilitation profiles including the condition and age analysis, the level of service analysis, and the efficiency analysis . ........

U.!'l!Q.'100
,..,,.,..,.

0.000.llGO ...
ll.OOOtm
'"' .
..
- - - - - - - - - - - - - - - - - - - ~ = -.. .,
Figure 7-11 Long-Range Water System Needs - Condition/Age, Level of Service, and Efficiency-100 Years l<AYUGA SC)! lJ r ICJN
so
OID.l.OCO
,._
..,_.,.,.,
\ 1 00},000
.. . I ,... .... - ~· "'"
Figure 7-12 long-Range Water System Needs - Condition/Age, level of Service, and Efficiency-20 Years ~GW!.IJlt
CIM\<OI\
""""""
i i~·
11,q,)Q_(IOO
- -,.,. ....

VHr
Figure 7-13 long-Range Water System Needs - Condition/Age, level of Service, and Efficiency-10 Years l<AVUGA SOt U r!Or-. J
51 7.5 10-Year and 20-Year CIP Summary
The following tables summarize the recommended CIP for the next 20 years considering the condition , level of service, and efficiency analyses.

Water Mains
Valves
Meters
Service line
Fire Hydrants
Cristo Rey Storage
Tank
Mercedes Station
Mann Pump
Station
Flowering Pear
Well I
Franco Court Well
SCADA
Master Plan
Low Pressure
Project
1¥ alve Location
'] Project \~ ~- 7· -- ••
ilL-.., Total
$35,600 1-
$250,000
s2,os6,soo 11 $4,s1s,9oo II s1,sss,100
1<,,,,e,..,VLJG..A. ~(..JLl.J I ILJr--.. 1
Table 7-8 2019 to 2028 CIP Summary
$57,600 1-
~~-!
$50,600 s1s1,400 11 $2,361,100 $231,000 11 St,333,200 11 St,979,soo 52 Table 7-9 2029 to 2038 CIP Summary
$84,000
$250,000
$1,184,900 $146,000
53 t<.,P,,..VUG~ !;...,._,t _ LJ I IL-'>l "--1
Appendix A
Asset Inventory of Pump Station, Storage Tanks, and Wells l<AVUGA SOt UTION
54 Cristo Rey Storage Tank
Fencing Security Fencing 790 FT (LENGTH)
Pavement Yard Pavement 4320 SQFT
Vault Structure Vault Structure, Level Control Valve 12 FT (LENGTH) Tank Cristo Rey Storage Tank 2.051 MG
Valve Tank Drain Valve #1 4 IN (DIA)
Valve I Tank Drain Valve #2 GIN (DIA)
Valve Tank Isolation Valve #1 12 IN (DIA)
Valve Tank Isolation Valve #2 12 IN (DIA)
Mann Pump Station
Class Name Size
F Fencing Security fence s f 325 FT (LENGTH)
Pavement Concrete Pavement 702 SQFT
Pavement Crushed Gravel Pavement 8550 SQFT
Tank Suction Tank 0.4MG
Valve Tank Isolation Valve (Emergency Connection) GIN (DIA) Valve Tank Inlet Air Release Valve 2 IN (DIA)
Valve 1 Tank Main Inlet Check Valve 12 IN (DIA)
Valve Tank Main Inlet Isolation Valve 12 IN (DIA)
Valve Tank Bypass Upstream Isolation Valve
I
8 IN (DIA)
I
Valve Tank Bypass Check Valve 8 IN (DIA)
Valve Tank Bypass Upstream Isolation Valve I' 8 IN (DIA) I
Instrumentation Pressure transmitter
-- -·~
Instrumentation Tank level alarm
Instrumentation Controller, suction tank level
Building 1 Pump House 1400 SQFT
Lifting Equipment Gantry Crane 0.75 TON (LOAD)
Instrumentation Intrusion Alarm .

HVAC Ventilation Fan
Generator Engine-Generator Set, Bus B
Generator Engine-Generator Set, Bus A
l<AVUGA SC)t UTIOl'I
55 Class Name Size
Control Panel Main Switch Board
Control Panel I Automatic Transfer Switch. Bus B I
Control Panel Motor Control/Disconnect - Motor 1
Control Panel I Motor Control/Disconnect - Motor 2 I
Control Panel Motor Control/Disconnect - Motor 3
Control Panel I Motor Control/Disconnect - Motor 4 I 460VOLTS Control Panel Motor Control/Disconnect - Motor 5 460VOLTS Control Panel I Main Panel I 460VOLTS
SCADA SCADA Controller and RTU
Valve I Pump Suction/Tank Outlet Isolation Valve I 14 IN Valve Pump #3&4 Suction Supply Isolation Valve 14 IN
Valve I Booster Pump #1 Suction Isolation Valve I 10 IN Pump Booster Pump #1 1,262 / 1,150 GPM
Motor I Booster Pump #1 Motor I 100 HP
Valve Booster Pump #1 Air Release Valve 0.5 IN
Valve I Booster Pump #1 Check Valve I 8IN
Valve Booster Pump #1 Discharge Isolation Valve 81N
Valve I Booster Pump #2 Suction Isolation Valve I lOIN
Pump Booster Pump #2 1,262 / 1,150 GPM
Motor I Booster Pump #2 Motor I 100 HP
Valve Booster Pump #2 Air Release Valve 0.5 IN
Valve I Booster Pump #2 Check Valve I 8IN
Valve Booster Pump #2 Discharge Isolation Valve 81N
Valve I Booster Pump #3 Suction Isolation Valve I 8IN
Pump Booster Pump #3 1050 GPM
Motor I Booster Pump #3 Motor I 75 HP
Valve Booster Pump #3 Air Release Valve 0.5 IN
Valve I Booster Pump #3 Check Valve I 8IN
Valve Booster Pump #3 Discharge Isolation Valve 8IN
Valve I Booster Pump #4 Suction Isolation Valve I 8IN
Pump Booster Pump #4 1262 / 1150 GPM
Motor I Booster Pump #4 Motor • I 100 HP
Valve Booster Pump #4 Air Release Valve 0.5 IN
l<AVUGA SOI UllON
56 Valve Booster Pump #4 Discharge Isolation Valve ' 81N Valve Booster Pump #5 Suction Isolation Valve 81N
Pump Booster Pump #5 1600 GPM
Motor I Boo~ter Pump #5 Motor I 100 HP
Valve Booster Pump #5 Air Release Valve I 0.5 IN
Valve I Booster Pump #5 Check Valve I 81N
Valve Booster Pump #5 Discharge Isolation Valve I 81N
Vault Structure PRV Vault 6 FT (LENGTH)
Sump Pump PRV Vault Sump Pump 1.5 IN
Valve I Pressure Regulating Valve #1 Upstream Isolation Valve I 81N Valve Pressure Regulating Valve #1 I 10 IN
Valve Pressure Regulating Valve #1 Downstream Isolation Valve I 81N Valve Pressure Regulating Valve #2 Upstream Isolation Valve l 41N Valve I Pressure Regulating Valve #2 I 41N
Valve Pressure Regulating Valve #2 Downstream Isolation Valve 41N Vault Structure Flow Meter Vault 5 FT (LENGTH)
Sump Pump Flow Meter Vault Sump Pump 1.5 IN
Instrumentation I Flow Meter
I
81N
Vault Structure Station Flow Meter Vault
'
5 FT (LENGTH)
Instrumentation I Station Flow Meter IN
Mercedes Road Storage Tanks
Class Name Size
Fencing Fencing 700 FT (LENGTH)
Pavement Yard Paving 16092 SQFT
Site Site
Tank Tank #1 2MG
. Instrumentat ion 1 Tank #1 Level Sensor ' I
Valve Tank #1 Isolation Valve 20IN
Valve Tank #1 Altitude Valve 20IN
Valve Tank #1 Inlet Isolation Valve
Valve Tank #1 Outlet Isolation Valve I
I
l<AVUGA SOL. U ·1 ICJr-.J
57 Valve Tank #1 Air Release Valve 21N
Tank Tank #2 (Undergoing Rehabilitation) 2MG
Instrumentation Tank #2 Level Sensor
Valve Tank #2 Isolation Valve 6IN
Valve Tank #2 Outlet Isolation Valve 6IN
Valve Tank #2 Altitude Valve 20IN
Valve Tank #2 Air Release Valve IN
Building Mercedes Station Electrical Shed 70 SQFT
Control Panel Controller, Emergency Generator
Generator Emergency Generator
Control Panel Main Electrical Panel 240VOLTS
Control Panel Electrical Sub-Panel
SCADA Remote Terminal Unit , Mercedes Tank Sensor
Flowering Pear Well
Class Name Size
Fencing Fencing 225 FT (LENGTH)
Pavement I Yard Paving I 1800 SQFT
Well Casing Flowering Pear Well 6IN
Pump I Pump, Flowering Pear Well I 550GPM
Motor Motor, Pump 75 HP
Valve I Air Release Valve I 2IN
Valve Isolation Valve, Auxiliary Line 8IN
Valve I Isolation Valve, Well I 8IN
Filter Sand Trap 8IN
Instrumentat ion j Flow Meter I
Control Panel Motor Controller
Control Panel I Manual Transfer Switch I
SCADA SCADA Controller and RTU
I
l<AVUGA SOL U r tCJN
58 Franco Court Well
Class Name Size
Fencing Fencing 90 FT (LENGTH)
Pavement I Yard Paving 441 SQFT
--
Lighting Lighting
Well Casing I Franco Court Well 8IN
Pump Well Pump 700GPM
Motor / Pump Motor 75 HP
Valve Air Release Valve 21N
I
Instrumentation / Flow Meter 8IN
Valve , Check Valve 8IN
Valve / isolation Valve 8 IN
Control Panel Motor Controller .'
SCADA / SCADA Controller and RTU
l<AVUGA SCJ\ LJ T ICJN
59 Appendix B
Hydraulic Analysis Report
t<AVUCA SOl. U f lC)N
60 ■I .,._
l<AVUGA

SOLU I ION
City of Cupertino
Cupertino Leased Water System Capacity Analysis
Prepared by Charlie Marr Consulting
2018
l<AVUGA SOL_ UT ID N
Table of Contents
1 Introduction and Purpose ...................................................................................................................................... l 2 Leased Water System ............................................................................................................................................ 2

2.1 Service Area and Applied Loading ................................................................................................................ 2

2.2 System Demands ......................................................................................................................... ................. 3

2.3 General System Operation ............................................................................................. .............................. 3 3 Hydraulic Model and Field Testing ........................................................................................................................ 5 4 Capital Improvements ......................................................................................................................................... 10 List of Exhibits
Exhibit 1
Exhibit 2
Exhibit 3
Exhibit 4
Appendices
A
B
C
San Jose Water Company and Cupertino Leased Water System City of Cupertino Water Service Areas
Leased Area Water System and Fire Flow Analysis Locations Leased Water System Hydraulic Profile
Computer Model
Cupertino Municipal Water System Fire Flow Analysis (SJWC, January 2017) J & C Fire Protection Field Flow Tests and Results
l<AVUGA SOI U"flON
1 Introduction and Purpose
The Cupertino Leased Water System Capacity Analysis was performed to support the Asset Management and Valuation investigation for the City of Cupertino . Cupertino owns a public water supply and distribution system, the operation and maintenance of which has been leased to the San Jose Water Company (SJWC) since 1997. The lease is for 25 years, and will end in 2022. The San Jose Water Company Service area and Cupertino's leased water system service area are shown in Exhibit 1.

The City is performing its due diligence to determine system integrity and capacity. As part of the City's due diligence investigation, it contracted with consultants in recent years to begin the process of affirming the water system operation and maintenance activities meet the lease agreement requirements, and that operation of the system is in accordance with customary utility practice and within the Operator's standards of the other water systems it owns and operates .

The capacity analysis is a recommendation in the Final Technical Report Leased Water System Inspection, by SPF Water Engineering (January 12, 2017).
l<AVUGA SO\ U T ION
1 2 Leased Water System
The City of Cupertino's leased system serves the northwest third of its City boundary, as shown in Exhibit 2. The City has leased out its operation and maintenance to San Jose Water Company, which owns a separate water system serving the southern portion of the City. California Water Service Company serves the remainder of the City in the northeastern area of the city.

The water system operates in a supply zone and two separate distribution pressure zones, and consists of City­ owned groundwater well supply and imported water supply from the Santa Clara Valley Water District (SCVWD).

SCVWD is a wholesaler for retail water utilities including SJWC and the City of Cupertino. The system serves 3.7 square miles of the City and consists of approximately 60 miles of water pipelines (ranging in diameter from 2-inch to 20-inch); 4,554 customer service connections (as of 2017); three 2.0 million-gallon (MG) reservoirs at two reservoir sites (Mercedes and Cristo Rey); a forebay, five parallel booster pumps and imported water supply source at the Mann Drive Pump Station site with total rated capacity of approximately 6,000 gpm capacity; two off-site wells and Homestead Road/Stelling Road transmission system; and two regional pressure-reducing stations at the Mann Drive Pump Station site. These facilities serve, on average, 800 to 1,000 million gallons per year, and represent about two percent of the total water served by San Jose Water Company.

2.1 Service Area and Applied Loading
The leased system service area is virtually built-out and consists predominantly of residential land uses. The City's Community Vision 2040 general plan defines the following Special Areas and residential communities within the water service area of the leased system:

Bubb Road (low-rise industrial and research)
Monte Vista Village (residential, neighborhood commercial, public and industrial) Oak Valley Neighborhood (residential)
Creston-Pharlap Neighborhood (residential, includes school) Inspiration Heights (residential, includes institution and Mercedes reservoirs) Monte Vista North (residential, schools)
Garden Gate (residential)
According to the general plan, limited or no growth is expected from these areas except for 42 acres of vacant privately-held land that could develop homes on a portion . This would still represent minimal increased demands in the future and not be significant for the model analysis. l<AYUGA SOLUTION
2 2.2 System Demands
The Annual Reports SJWC produces for the Cupertino Municipal Water System identifies average annual demands of the leased water system as follows:

Table 2-1 - Average Annual Water Demands
Land Use
Year (million gallons per day)
2013 2014 2015 2016 2017
Residential 1.69 1.46 0.98 1.04 1.11
Commercial 0.80 0.77 0.63 0.54 0.58
Industria l 0 .25 0.38 0.22 0.17 0 .21
Public 0.24 0.19 0.15 0.15 0.14
0 th Other 0 00 I O 00 0.00 0.00 000 0.00 0 00 0.00 0 00 0.00 Total MGD 2.99 2.80 1.98 1.91 2.04
Totalgpm 2,077 1,945 1,377 1,324 1,419
The trend seen here with lower demands in recent years is typical of what the industry has observed due to t he persistent state-wide drought. Since 2011, California has been in one of the most severe extended droughts on record.

Peaking of demands is an important consideration in water model simulations for two reasons - fire flow analysis and peak demand analysis. Peaking information for the leased system was requested but not provided for the modeling investigation.

First, fire flow simulation is standardized by the California Fire Code (CFC) and required to be analyzed during maximum-day normal demands. 'Maximum-day' represents the largest volume of water demanded by a water system over a 24-hour period. Typical for public municipal water systems, the maximum daily volume occurs in the summer time when irrigation demands are at their highest. Second, peak normal demands for public water systems occur for much shorter periods. For public municipal water systems, these peaks, commonly referred to as "peak­ hour", occur during the early morning and early evening hours just before the work day begins and just after the work day ends, as people shower in the morning and use dishwashers and clothes washers in the evening. Depending on the size of the public water system and land use make-up, maximum-day demand factors could range from 1.5 to 3.0 times average demand flow; and peak-hour factors could range from 2.5 to 5.0 times average demand flow.

Considering the size of Cupertino's leased system, with a usage that can exceed 2.0 million gallons per day on average, the modeling study adopted 2.0 for the maximum-day factor and 4.0 for the peak-hour factor.

2.3 General System Operation
A current water master plan outlining system operation, including water supply and distribution characteristics, was not available for this study. The general operation was gleaned from provided documents, a phone interview, and e-mail correspondence with San Jose Water Company staff.

The leased water system is supplied by imported water from the Santa Clara Valley Water District and groundwater from City-owned wells outside of the leased system service area. The Franco and Flowering Pear Wells are located within the City of Cupertino but outside the leased system service area adjacent to Homestead Road and Forge Way. l<AVUGA SOLU r JDN
3 Recent major improvements were done to the well systems' conveyance system, and should be capable of supporting any improvements to well operation and production capacity. The imported water supply is from a Santa Clara Valley Water District connection and meter at the Mann Drive Pump Station (MDPS) site. Both supply sources are designed to fill the Mann Drive Pump Station 400,000-gallon forebay.

The forebay acts to supply stable suction hydraulics for the MOPS pumps. The leased water system operates in an "open" system with reservoirs at elevation to supply system pressure by gravity. MDPS pumps operate to maintain water levels in the reservoirs at approximate pad elevation of 600 feet, namely the Mercedes and Cristo Rey tanks, which have a total capacity of 6.0 million gallons (MG). Considering the total demands of the leased system and fire flow volume requirements, the leased system storage capacity should be adequate for "time-of-use" operation .

Time-of-use refers to avoiding the need to operate system facilities like pumps and wells during peak electrical power costs. Pumping only during off-peak hours is the preferred operation of water utilities in order to minimize operating costs. However, SJWC staff indicated that in order to maintain water service pressures at the highest elevations of the system, the reservoir levels must be maintained at or near high water level at all times (approximately 630 feet elevation). Staff indicated that the pumps must turn on every two- to four- hours in order to maintain the water levels, depending on the time of year. This requires short and frequent pumping periods that could also significantly reduce pump life.

SJWC staff also indicated that the primary source of supply is from Santa Clara Valley Water District imported water.

Typically, local groundwater production that is not brackish (very low quality requiring reverse osmosis treatment) is more cost effective than paying for imported water. The City should investigate the cost of the two sources, considering water quality, conveyance, well improvements and pumping rights, and control of its own water supply.

The lowest elevations at the northeast end of the service area are pressure-reduced to manageable pressures because static pressures at elevations below about 280 feet (elevation above mean sea level) are excessive and could be dangerous for maintenance and upkeep. Lowering pressures is also a very effective way of reducing water loss.

The "Mann Regulated Zone" consists of approximately 250 residential connections. l<AVUGA SOL U rJON
4 3 Hydraulic Model and Field Testing
The computer water model provided by SJWC staff was pre-loaded with 'average' demands totaling 1,682 gallons per minute (gpm), which is consistent with system demands from the Annual Reports.

Another component of water demand and sizing of distribution facilities is fire flow . Standardized fire flows for different types of land uses are typically provided in Water Master Plans or other hydraulic analysis reports that were not available for this modeling study. Current fire flow requirements are listed in the California Fire Code (CFC) as high as 8,000 gpm at 20 psi, with reductions allowed when fire sprinkler systems are included in building construction . Invariably, large structures are conditioned for fire sprinklers regardless of construction materials used.

The CFC allows for a reduction in fire flow requirements of up to 75 percent. Also, fire flow requirements for the purposes of the model analysis should consider that many of the structures within the City's service area were likely constructed at a time when the fire flow requirements were lower. With these considerations, and the limited expected development or redevelopment that could occur, it is reasonable to evaluate the leased system capacities at various locations based on land use with the fire flow requirements as stated in the Final Technical Report, and summarized in Table 3-1:

Table 3-1 - Capacity Requirements
Zoning Minimum Flow Minimum Duration Total Fire
Rate (gpm) of Flow (hours) Storage (gallons)
Single-family
1,500 Residential 2 180,000
Multi-family 2,000 Residential 2 240,000
All other 2,500 2 300,000 zoning
The following is a summary of system demand loadings used for the computer model analysis:

Table 3-2 - System Demand Loadings
Note: 2*Avg = Max-day; 4.0*Avg = Peak-hour
The lnnovyze modeling software (formerly MWH Soft) lnfoWater was used in a stand-alone version (no AutoCAD or Arcview platform) in instantaneous analysis mode. The scenarios selected were designed to analyze system capacity at different land uses throughout the service area. These scenarios were then field tested to validate system perfo rmance. Appendix A includes a graphic of the leased system wate r model. l<AVUGA SOL UT ION
5 The computer model includes the complete distribution system from the Mann Drive Pump Station to the Mercedes and Cristo Rey tanks. In all, nine simulation scenarios were performed for the purposes of hydraulic model analysis and establishing hydraulic bases for comparing with field flow testing :

Scenario 1:

Scenario 2:

Scenario 3:

Scenario 4:

Scenario 5:

Scenario 6:

Scenario 7:

Scenario 8:

Scenario 9:

Supply scenario, zero system demand, Mann Drive PS operating Max-day system demand (3,364 gpm), normal operation, MDPS off Peak-hour system demand (6,728 gpm), normal operation, MDPS off Max-day plus FF #1 (Exhibit 3), 2500 gpm at Alves Street (J23992), MDPS off Max-day plus FF #2 (Exhibit 3), 2500 gpm at Mary Avenue (J23440), MDPS off Max-day plus FF #3 (Exhibit 3), 2500 gpm at Scenic Circle (J44068), MDPS off Max-day plus FF #4 (Exhibit 3), 2500 gpm at Alcalde Drive (J63366), MDPS off Max-day plus FF #5 (Exhibit 3), 2500 gpm at Ainsworth Drive (J65056), MDPS off Max-day plus FF #6 (Exhibit 3), 1500 gpm at Voss Avenue (J65056), MDPS off Simulation Scenarios 1, 2 and 3 prov ide hydraulic characteristics under normal conditions . Scenarios 4 through 9 simulate foreseeable emergency fire events at critical locations . Info Water includes a fire flow tool that, for each fire flow simulat ion, evaluates the entire system for deficient pressures in addition to meeting the minimum 20 psi at the fire flow location . This analysis uses the minimum pressure criteria fo r the fire flow junction of 20 psi (based on Uniform Fire Code), and maintains positive pressure everywhere else in the system.

Table 3-3 summar izes the hydraulic analysis results for the fire flow scenarios.

Simulation
Scenario
1 2
3 4
5 6
7 8
9 Node
J23992
J23440
J44068
J63366
J65056
J65152
Table 3-3 - Fire Flow Hydraulic Analysis Results
Elevation
(ft amsl)
269
296
323
446
314
542
Modeling Parameter
Normal
Pressurel1l

82.77 psi
139.83 psi
128.38 psi

75.28 psi
132.33 psi

33.69 psi
Fire Flow
1,090 gpm
2,104 gpm
2,005 gpm
2,077 gpm
2,192 gpm
1,399 gpm
Residual
Pressure

25.63 psi
112.26 psi
117.39 psi

71.65 psi
125.39 psi

20.00 psi
Calculated
Flow at
20 psi
1,147 gpm
4,652 gpm
6,900 gpm
9,038 gpm
9,858 gpm
1,399 gpm
[1] Normal (static) pressure is taken from the Max-day system demand Scenario 2. [2] As designated for the Final Technical Report (SPF Water, January, 2017) l<AVUGA SO L UTION
Designated
Fire Flow at
20 psi for
Planning
Purposesl2l
1,500 gpm
2,500 gpm
2,500 gpm
2,500 gpm
2,500 gpm
1,500 gpm
6 Other parameters important for hydraulic analysis evaluation are maximum flow velocity and minimum system pressure. Typical maximum velocities for design of public water systems are 3 to 5 feet per second (fps) for normal operation, and 10 to 17 feet per second for emergency fire flow conditions . The typical standard for minimum pressures during normal operation is 40 psi to ensure adequate pressure for second floors of residential structures.

Although the velocities resulting from the analysis are within these criteria, the minimum system pressures are not .

Table 3-4 is a summary of the maximum velocities and minimum pressures observed for each scenario. l<AVUGA SOL LJ flON
7 Table 3-4 - Maximum System Velocities and Minimum System Pressures Simulation
Scenario
Maximum
System Velocity
@ Pipe ID
Minimum
System Pressure
@ Junction ID
-
1 (No Demands)

5.93 fps (14"
Mann Dr PS
discharge)
T602760
10-24 psi
(Inspiration Hts)
J56126, 76014, -
016, -022, et al.
fps = feet per second
2 (Max-day)

2.69 fps,

2.40 fps
D531051 (8")
0531151 (20")
9-24 psi
(Inspiration Hts)
J56126, 76014, -
016, -022, et al.
psi = pounds per square inch
I
3 (Peak-hour)

5.56 fps,

2.41 fps
D531051 (8")
0531151 (20")
6-24 psi
(Inspiration Hts)
J56126, 76014, -
016, -022, et al.

ID= identification number used in the computer model.
t<.....,..,,VL-'G.;"!lrr.. ::.;.i.-LJL LJ l 1<...JN
I
4 I
5 I
6 I
7 (Alves St FF) (May Ave FF) (Scenic Cir. FF) (Alcalde St FF) I 8.20 fps 6.66 fps I 6.06 fps I 4.30 fps
D531800 (8") D531682 (12") D531845 (8") D531151 (20")
0532110 (8") 0531675 (12") 0531156 (10")
11-24 psi 10-24 psi 10-24 psi 10-24 psi
(Inspiration Hts) (Inspiration Hts) (Inspiration Hts) (Inspiration Hts) J56126, 76014, - J56126, 76014, - J56126, 76014, - J56126, 76014, - 016, -022, et al. 016, -022, et al. 016, -022, et al. 016, -022, et al.

I (Ainswo:th St FF) I
9 (Voss Ave FF)
I 4.11tps I 8.96 fps
I 0531151 (20") 0532154 (8")
9-24 psi -4 - 24 psi
(Inspiration Hts) (Inspiration Hts)
J56126, 76014, - J56126, 76014, -
016, -022, et al. 016, -022, et al.,
& FF Node
8 As outlined in the table, model nodes with service to several estate lots in the hills of southwest Cupertino (namely Inspiration Heights residential community) are at elevations too high to comply with normal water service pressure standards. SJWC addresses this in a January 4, 2017 fire flow analysis memorandum and identifies these service areas as customer services with 'less than 20 psi' or 'no water' with a boil-water-advisory should a fire event occur.

Even under normal conditions, as indicated in Table 5, service pressures can be less than 10 psi during normal conditions. It is assumed these services incorporate private pumping for adequate shower pressure, as well as dishwasher and clothes washer appliance pressure. The SJWC memorandum is included in Appendix B.

Scenarios 4 through 9 indicate adequate fire flow capacity for all locations except Garden Gates and Inspiration Heights. Scenarios 4 through 8 were field tested on November 20, 2018 by J&C Fire Protection. Field flow testing was recommended as a result of the findings of a series of technical memorandums of the Final Technical Report study (SPF, 2017). The flow testing crew, supported by SJWC and City of Cupertino staff, locate the desired hydrant to flow and a separate location for reading system pressures (normal operating pressure prior to flowing the hydrant, often called 'static'; and dynamic pressure during flow typically referred to as 'residual') and performed the proper flow testing procedure at each site. These field measurements should be taken periodically to confirm model results.

The results of the field flow tests performed are included in Appendix C.

Table 3-5 includes a comparison of the fire flow analysis between model results and field flow testing results, and shows a distinct difference in all but the Alves Street location.

Table 3-5 - Fire Flow Analysis Comparison - Model vs. Field Flow Testing Field Flow Tests Flow at 20
Fire Hydrant Normal Observed Residual Calculated
psi from
Computer
Location Pressure Flow Pressure Flow at 20 psi Model
Alves St Alves St 55 55 psi 1,083 1,083 gpm 40 40 psi 1,180 1,180 gpm 1,147 1,147 gpm Mary Ave 145 psi 2,059 gpm 100 psi 3,575 gpm 4,652 gpm
Scenic Circle 135 psi 2,293 gpm 98 psi 4,230 gpm 6,900 gpm Alcalde Rd 80 psi 1,595 gpm 55 psi 2,559 gpm 9,038 gpm
Ainsworth Dr 130 psi 2,059 gpm 100 psi 4,153 gpm 9,858 gpm [1] Alves Street is in Mann Regulated Zone; therefore, calculation at 20 psi uses normal pressure that would be generated without pressure reduction. Estimated elevation of flow test at Alves Street is 270 feet, 630 HWL - 270 = 360 ft = 156 psi.

Assuming the geometry of the model provided by SJWC was confirmed for accuracy - i.e. elevations, pipe lengths, and pipe diameters - this could be an indication that pipe connections thought to have been constructed were actually not constructed (adversely affecting circulation and system capacity), or pipe roughness factors should be much lower in the model, or both. In addition, old or broken valves not properly abandoned, or thought to be removed, could also reduce system capacity. In any event, these major differences in field and modeling data should be corrected to acceptable tolerances before relying on modeling data for any further system analysis. l<AVUCA SOL U T ION
9 The apparent deficient fire flow at Alves Street could be a settings error in the model that needs further investigation .

Review of the results reports indicate twice the flow as necessary flowing through the Mann regulation valves causing erroneously high head loss readings. Reducing the headloss will result in higher available flow to Alves Street and the entire Mann Regulated Zone service area.
4 Capital Improvements
Evaluation of the water system capacity using computer modeling shows that the system should be capable of operating within time-of-use and normally accepted criteria, with the exception of the highest residential services in Inspiration Heights. Adequate interconnection locations exist, and could be improved for automatic operation (actively connected). In addition, a SCADA headquarters office should be constructed and implemented for the ability to monitor all major water system functions - Well operation, Mann Drive PS operation and forebay water levels, SCVWD service connection flows, pressure-reducing valve operation, reservoir water levels at Mercedes and Cristo Rey sites, and interconnection flows. Water systems operation should incorporate digital readouts, electronic maps and signals to a single operator (dispatcher) at any hour of the day to alert on-call field staff in the event of ruptured mains, pumping failure, power outage, water supply outage, low reservoir water levels, etc. The Department of Public Health has strict guidelines for publicly-owned water utilities, in addition to operator registration requirements, for specific capacities within the organizational structure of a utility operation .

The following is a list of capital improvement projects gathered from the research of recent documentation provided for the hydraulic analysis study that should be prioritized for the City of Cupertino's leased water system:

1. Evaluate all options to remove/reduce the City's liability associated with the low service pressures in Inspiration Heights. Potential liability could arise with water quality degradation due to the low pressures, or lack of water capacity during normal operation, and lack of fire flow capacity during emergency operations. Options could include legal agreements with each homeowner, construction of a hydropnuematic pressure zone or other closed system operation, or City purchase and maintenance of individual private pumping units.

2. Based on the Final Technical Report (SPF, January 2017), the capacity and efficiency of the Mann Drive Pump Station needs major upgrades, and may require a redesign for time-of-use operation. This should include an evaluation of the adequacy of its backup power supply.

3. Perform a complete well inspection of both Franco and Flowering Pear wells, including mechanical/material inspection, efficiency testing, and down hole video to assess the level of needed rehabilitation.

4. Investigate the cost of the two sources of City water- local groundwater and imported water from SCVWD.

This should consider issues such as water quality and on-going treatment requirements of each; operation and upkeep of the conveyance systems for each; well maintenance, improvements and pumping rights; and control of its own water supply. Curiously, SJWC does not emphasize maximizing local groundwater production despite the State of California's efforts to incentivize water suppliers to use local water supplies.

5. Prepare a Water Master Plan. Water Master Plans should be the cornerstone for funding a water system.

A thorough water master plan includes analysis to justify capital improvement and replacement projects that should be reviewed on an annual basis. The Water Master Plan itself should be updated at least every 10 years, or when a major update to the general plan is made. Municipal finance departments rely heavily on a water master plan to perform the necessary updates to keep its capital Improvement and replacement ' programs current.

6. Investigate the water quality concerns at the Mercedes Reservoir site. One of the Mercedes Reservoir site tanks was reportedly emptied approximately two years ago due to "considerations of water age and l<AV UGA SOLUTION
10 quality". Water quality would be the primary concern for the method of operation currently employed by the SJWC.

7. Update the Mercedes tanks to current seismic code. According to the SPF report, both tanks may be out of compliance with seismic construction requirements . Ironically, the "General Cupertino Leased Area Description" report describes the operational practice of minimizing the water level in the tanks (maximizing Freeboard) in order to "minimize damage from sloshing during a seismic event" . This is inconsistent with SJWC staff assertion that the Mercedes tank water levels are maintained between 29.5 and 32 feet, which is at or near the high water level at all times to improve service pressures for nearby residents. This represents conflicting operational goals that could be detrimental to valuable storage capacity. Additionally, operating a 2.0 million-gallon reservoir with a water level band at the highest 2.5 feet is not prudent reservoir operation and negates many of the advantages of incorporating storage within a distribution system.

8. Investigate as-built plans and the reported existence of a "logbook" that could have records of system improvements since 1916, according to the SPF report. This could provide clues to lost and paved-over old valves that have broken and fallen into the flow path of old pipelines still in operation . Such debris would be a capacity and water quality detriment to a water system, and could be a reason for the difference in computer model results and field-tested capacity.

9. Start a hydrant flushing and valve maintenance program. Hydrant flushing should include gathering hydraulic data for field verification of the computer model. Valve maintenance program should include exercising each valve, documenting turns, and inventory type, location, and size.

10. Pave the access road to Cristo Rey tank site.

These capital projects represent top priority within a comprehensive Capital Improvement/Replacement Program.

Additional projects should be identified through further cooperation from San Jose Water Company and candid descriptions of chronic operational challenges from staff. Otherwise, the oldest 4-inch (and smaller) "system" pipelines dating back to the 1930's and before should be prioritized for immediate replacement. If a logbook, as indicated in Item 8 above, exists it can be a very good resource for prioritization. l<AVUCA SOLUTION
11 0 0 .75 1.5 3 4 .5
-- -
6 - Miles
--- -
Sa
r,
e
Source : San Jose Water Company 2015 Urban Water Management Plan, Figure 3.1 Exhibit 1 <)~
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~EN~NGS ,o
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City of Cupertino ,L\
Water Service Areas 'f'

0.25 0.5 1
Miles
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Source: City of Cupertino Final Technical Report Leased Water System Inspection, January 12, 2017.

Exhibit 2
Reservoir
(1-2.0MG)
Simulation '116
Residential
(1500gpm)
Mercedes
Reservoirs
(2-2.0MG)
~
iii
eresa/Columbus
inerconnection
(w/ SJWC)
Pressure­
reduced
Zone
Commercial
(2500 gpm)
"(I)
~
Bubb/Rosario
interconnection
(w/ SJWC)
-0
"' (i_
Cl
~
]i
Cf)
From Flower­
ing Pear and
r,;::..-.,/L- Franco Wells
Stevens Creek Blvd
McClellan Road
Supply Pipe
Pipe Dia. 8" or less
• ■ • Pipe Dia. 10" or 12"
- Pipe Dia. 14" or greater
Exhibit 3
~~~
'Mann Drive
4" and 10"
i Regulators
Mann
Regulated
Distr ibut ion Zone
B-5
SCVWD
Mercedes
Distribution
Zone
B-4 8-3
W - 1
Flowertng
Pearl
Well
Pump
Mercedes
Station
B-2 B-1
Mann Dr.

Booster
Station
Mann Dr.

Tank-
Franco Ct.

Well
Pump
Source: City of Cupertino Final Technical Report Leased Water System Inspection, January 12, 2017.

Cristo Rey
Station
Tan

2.0MG_
Operat i onal
Zone Valve
Cri sto Rey
ist ributior
Zone
Exhibit 4

APPENDIX A
Computer Model
A-1
A-8
J80222
J81684
A-2
J13688
J79394
J34420
I
4514 Exhibit A
!60 17
R_RES1_S
Cristo Rey Tank
Operational
zone valve for
separating
hydraulic
influence of the
two reservoir
sites
2828 ...

Exhibit A-1
~ J28704"0
'--
5742 40
810
Exhibit A-2
'( ..!IU:l"f '\ ~lS-
l'"'"''~ J.,.o,,u
890 689 16850
~ei73a8
Exhibit A-3
4540
~
J8488
,--- ,oe>- J J849i
1i785J
44888 2
8360
J16356
r--<?------ -&
4536
Exhibit A-4
0--
tH87Q
42844
Mann Drive Pump
Station
&
PRVs for Mann
J74154
50\90
J3t99S J319
~32920
J32922 IJS3196
Exhibit A-5
50970 J50972
51~46
J7'\994
J
J63124
Fire flow #3
Scenic Drive
J54586
J557'8
51926
41704
J 4l024
J38906
J38296
u545S IJ56130
J39056
J38298 J39358
~ 0 ~
J8208
JSS2
~ -- - -- - •Ja1e2a •J452B0 0J4~0
J45002
J44888 4e,aa2
Exhibit A-6
J250l8

82.eO
Fire Flow#2
Mary Ave
1'665&
ZV500129
9392
-----,
~
r.o:

Exhibit A-7
,200
3088
939
J80222
[Mann Regulated Zone
81684
.J;:, ...
♦
+-
)_~ i-fl l4 J~4
14'
..
\
f " 1 ~-c,1
<> ◊
J31 r I
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';:J: t~
l J"' 3J:.,.-,"i
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\ z•11,:'l-l J._
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r
Exhibit A-8
!Mann Regulated Zone
i,----438 r., ·oos
Fire Flow#2
Exhibit A-9
~202eo
~40.A~
♦.; '-"-'-
J17496
00 3688

APPENDIX B
Cupertino Municipal Water System Fire Flow Analysis (SJWC) Memorandum

CUPERTINO MUNICIPAL WATER SYSTEM FIRE FLOW ANALYSIS
Background
San Jose Water Company (SJWC) provides residents of the Cupertino Municipal Water System (MWS) with high quality water and exceptional customer service. SJWC maintains and operates the MWS based on a 25-year Lease agreement, which is set to expire in less than six years on October 1, 2022.

The Cupertino MWS consists of 4,183 service connections, about 58 miles of pipe, four welded steel storage tanks, five booster pumps, two wells and one regulator station. The system is comprised of three hydraulic pressure zones: Mercedes Zone, Cristo Rey Zone and Mann Regulated Zone. Imported surface water supply from Santa Clara Valley Water District (District) is the primary source of water for this system. In addition, there are two groundwater wells named Franco and Flowering Pear both located near Homestead Rd., east of Stelling Rd.

District water and groundwater are both blended together at Mann Drive Station, which acts as the central hub for all three pressure zones.

The City of Cupertino (City) requested from SJWC a fire flow evaluation to demonstrate that the MWS can adequately respond to a simulated fire flow event. The following sections describe SJWC's analysis and results.

Analysis
The Santa Clara County Fire Department has indicated that for planning purposes fire flow requirements will vary from 1,500 gpm for two hours to 2,500 gpm for two hours based on zoning. In the Cupertino MWS, the highest fire flow requirement is 2,500 gpm in proximity to schools and public facilities. Residential neighborhoods have a fire flow requirement of 1,500 gpm for two hours.

Based on zoning within the Cupertino MWS and the distribution system network, SJWC determined that the area near Monte Vista High School is most appropriate to perform the requested fire flow evaluation. Should the City determine that an alternate location is preferred, SJWC will rerun the analysis. Santa Clara County Fire Department has accepted hydraulic simulations in lieu of field flows from SJWC for more than twenty years.

To further demonstrate to the City the resiliency of their water system, SJWC simulated a fire flow event under normal operating conditions and a worst case hydraulic analysis based on a fire event following an earthquake.

Assumptions
For the fire flow simulation based on normal operating conditions, the following assumptions were made:

CUPERTINO LEASED AREA HYDRAULIC STUDY
H :IPUBLIC\CUPERTINOMWS_DOYLE PROPERTYICUPERTINO TM. DOCX January 4, 201 7 I.Ill Memorandum
• All tanks were assumed to be online
• Maximum day demand conditions
• The emergency pumper connection between SJWC and the MWS is offline For the fire flow simulation based on a worst case scenario, the following assumptions were made:
• Both Mercedes Station tanks are offline
• Mann Station tank is offline
• Flowering Pear and Franco Court wells are offline
• Maximum day demand conditions
• The emergency pumper connection between SJWC and Cupertino MWS is offline Mann Drive
4" and 10"
Regulators
Mann
Regulated
Distribution Zone
Mercedes
Distribution
Mercedes
Station
('t~iil<W{] i TaiiTdi2
U .o MG _ l_2.o MG.

Cristo Rey
Station
Tank

2.0 MG.

Zone I Cristo Rey
♦ c>r<11--~--_..,• Distribution
-tr-tr-tr-tr-tr
B-5 B-4 B-3 B-2 B-1
Mann Dr.

Booster
Station
scvwo i.-::T~nk····.
[ 0.18 MG
Mann Dr.
(-;~·;··. l
l ____ j
Flowering
Pear Well
Tank
( W-1 ·1
l _ ____ J
Franco Ct.

Well
Operational Zone
Zone Valve
Figure 1. System Schematic for Simulated Worst Case Scenario For the worst case scenario, two hydraulic model runs were analyzed: 1) three pumps at Mann Drive Booster Station online; and 2) all five pumps at Mann Drive Booster Station online.

Results
There are 11 services on the southwest side of the Cupertino MWS that have static pressure below 20 psi. These homes are situated at an elevation that is very high when compared to the base elevation of Mercedes Tanks.
2 CUPERTINO LEASED AREA HYDRAULIC STUDY
H:\PUBUC\CUPERTINOMWS_DOYLE PROPERTY\CUPERTINO TM.DOCX January 4, 2017 Memorandum
When a fire flow event occurs near Monte Vista High School under normal operating conditions residual pressures are not significantly impacted at these high elevation homes or anywhere within in the distribution system because of the redundancy in storage and boosting facilities in the MWS.

When simulating the worst case scenario with both Mercedes Tanks taken out of service, more customers on the southwest side of the leased area would either have no water or have pressure between 3 and 20 psi. To minim ize the impact to customer's water pressure following this simulated event, boosters at Mann Station must be continuously operating. If all five pumps at Mann Drive Booster Station are in service, there are 15 services with no water and 19 services with system pressure below 20 psi.

Due to the location of these low pressure services on a cul-de-sac, there is no potential for pipe looping. Under the simulated worst case scenario, a boil water advisory will be required for services with no water. Simulated system results during a fire flow event under normal operating conditions and a worst case scenario are presented in Table 1 and Figures 1, 2 and 3.

Table 1. Number of Services with No Water or Pressure Less than 20 psi/a) Number of Services Number of Services
System Condition Facility in Service with No Water with Pressure Less • 2,500 gpm fire flow
• Max Day Demand
• All tanks online
• Pumper connection with
SJWCoffline
• 2,500 gpm fire flow
• Max Day Demand
• Both Mercedes tanks offline
• Pumper connection with
SJWCoffline
Mercedes Tanks;
Cristo Rey Tank;
Mann Drive Booster Station
Cristo Rey Tank;
Mann Drive Booster Station
(operating 3 pumps)
Cristo Rey Tank;
Mann Drive Booster ~tation
(operating 5 pumps)
68 10
than 20 psi
11 33
1!:l
(a) Under maximum day demand conditions with a 2,500 gpm fire flow demand near Monte Vista High School Summary
SJWC has a long history of providing high quality water and exceptional customer service to residents in the MWS. The system is well prepared to provide adequate water supplies to the Santa Clara County Fire Department during a fire flow event under both normal operating conditions and following a catastrophic event.
3 CUPERTINO LEASED AREA HYDRAULIC STUDY
H:\PUBLIC\CUPERTINOMWS_DOYLE PROPERTY\CUPERTINO TM.DOCX January 4, 201 7 1 j
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~ G) 60 psi :S Pressure< 80 psi f.:l cupertino Lease Area ~ ct 80 psi s Ptessure < 125 psi ere;!:! ~ ~1•~~~:
~ • Pressure ~ 125psi Tlms:1 t: 35:01 AM AMTA. pftlJX: ~ OV-tiTA7J,:S :- ~ ¥:' ~~~~l I ~
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Figure 1
MAXIMUM DAY DEMAND PLUS 2,500 GPM FIRE FLOW

DURING NORMAL OPERATION
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APPENDIX C
J&C Fire Protection Field Flow Test Results

Loeatio.tf of test: Alves St Cup-er(it!O, CA95 014 llydrarlt Z-00~!9 'The follQw available flow and pre, $tire informa(ion is bases on a maximum t.lay demand h)'d,ruulic model analysi J&C Safety lst f 1tc. Prytectivn, Jne. ·(hi's informaljM shoulµ be useJ as a guidance oflbeJ1ppwxi01.a(e available rccoouncndcd that a design allowance bt.: made forpossib(c reduction in prcsstir • an or tlO\V that could Qc~:ur po ·; ihlc. secnarios. Applicat e undcrst.1nd:i thilt J&C $alety 1st fire Protection Inc can nQl g_u.1r::111Iee an srcc:i"ITc 1)rcsn1,g. ilml flo, . Cf.you hit c any qucsti9ns, r lense contact us: a~jctlrepr9kcti n gmail.com or call us al (S 10) Pl)Ssiblc i1~ er i<;:c conncc.tiuu .il'J
(;oirn~cfion Puinr Srnti1. 55 P$l
Residual f>ressurt: 4l) PSI
Pftot Reading~ PSI (10~3GPM)
26203 Production Ave, Ste. #8 Hayward. CA 94545 - Web: www.jcfiraprotecfio11.coml E-mail: [email protected]

Locahon of tcs1~M;1 Ave Cuperti.m\ CA ljS◊ 14 If ytJrnnl Z-0Q074- h~ t'hlk,w,availabl ' flow ;1Dd,prci;sll1'e informatio,n i,; bases ~m ap1axiinum day de1naodJ1yJraulic mod!:1 analylli J& ,Safety st fire-· J>ror~ctio11,, frtc. Th.is lntbrmntiM should be,.uscd as a gu1<lance of the approxi1iuilc ~vailab ~ recomme11<led Lh~ n ~l't;~ig,n allowance be magi: for possible t'Mtlction in pressure,nnd/ or flow that co1,1)doccur po 'iblc sc~natiu~.-Applfcate unJct·!it.tnd: tllai J&C Safol\l i st. I:ke l>roti:etion 'Inc can nEt guurantc~ an_y-specific pressure 1!_nd .flow. If )"OU l1avc.aoy questiims. _p1casc·ccmtact us at jdircpxotcction a g11mil:com or call us at S:l(J Rcsldurtl Pte.-i:;uri? I 00 PSI
26203 Product(on Ave. Ste. #8 Haywara. CA 94545 - Web: wwwjcfireprotection .coml £:-mail: jcfireprotection@gmail .c ~ -,
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LQCati n 9f lest: Seen 11: 'ir Cupertino, A 95014 Hydrant Z-00211 Th tb lloW :ivail:tblc. tfow und pressure inform~fipn 'is baiiC$ on a im\xinu1m day·{lci\1and by~lraulic 111odci :it1alysl J&, Safety Jst Firc:Protection, Cn~. This information hou(ct be used as a gu d3ncep tl1c appFOxi m<!le available· rcco-rnmended that a desi gn all9wance be made for possible reduction fn pressure and/ or tlow fhat c<.wld occur possjolc. ccniltios. Applicate undctstu]lds 1ha1 J~ Sat\,ly ls\ Fire. Protection Inc cqn not guarafl((;C ~ny .specifi1s

1.1ressure ;1nt.! Om . lfy(lll hn •. uoy que~tion., please contact us aljcfireprotection@gmaiLc;:om or call u:i at'. (510) Po~ ·iblc fo'e sc!Vice eonncctiQll # I
Connl!ction Poiit.l Slat:ic 135 PSI
Residual Pressure 9 PSI
l'itl')t Reading 38 PSI 2293GPM)
25203 Production Ave. Ste. #8 Hayward. CA 94545- Web: www)ctireprotection.com! E-mai/: [email protected], ~ )> .,
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t<J~~tion, oftest: A lc:1lde Rel Cupertino CA 95014 Hydrant Z-00062 i'hc ~olluw a\lail~ble Oow a~cl pressurc.in.formatio~ is bases on fl -ma_ximum,,~ay dcm1md hydraulic 111odcl ~naly;>i l&C Safe,ty l:,tf ,r Prorccuon, Inc, Tt11s. mforn1at_ion hould be. µscu as a gu_1dance of the i\pprox_11na1c avad::ibl 1·ccom111cndcd 1h,1t :\ design allowance. be n1ade for pos~ibk reduc1ion i.n pressure and/ or flow that could.occur possible scenarios. Applicate und'c(slimds that. J&.C $af~ty I sf Fire Protectiou fnc -cart not g,uarantcc i111y specific pre. sure 11nd now. lf you ha.. C any (LllCSlion • pie.use \:Olltact, U!i atjcfircprntcclion gmai(.c.:0111 or can us aC 510) Po ·sible tire scrvice·connection ti
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26203 Production Ave. Sle. 118 Hayward, CA 94545 - Web: WWWjcfireprotecllon.com/ e-rnail: [email protected],

Location Of test: Ainsworth Dr Cupertino. \ 95014 Hydrant Z-00379 The fi;,llo\ available now und pressure information is bases on a maximum day demand hydraulic 11,odel analysi J&C Safety I st Fire Protection. lnc. This infonnMion hould be used as a guidance of lhe approximate. av~ilable' recommended that a dc:,iign allow11nce-be made fot possible. reduction fn pressure and/ or flow that could occur po · iblc scenario•. Applicate. underslands thot J& Safely I si Fire Protcctidn Inc can not guarantee any specific pressure and flow. If yo11 have: any questions, please contact us atjctireprotection, gmail.coJn or call us at (510) Possible fire service connection # I
Conncc(ion Poinr Stocie 130 PSI
Residual Pressure I 00 P • 1
Pitot Reading 30 PSI 2059G'PM}
26203 Production Ave_ Ste. 118 Hayward, CA 94545 - Web: www,jcfireprotectfon.com.' E-mail: 1cfireprotection@gma1lcc Appendix C
SJWC 2015 Pipeline Consequence of Failure Study
l<AVUGA SOL UT ION
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,v,:~:.-C:omp,n,
Pipeline Consequence of Failure Study
October 2015
Prepared by
San Jose Water Company
Planning Group
Andy Yang, P.E. Damaris Villalobos•G
Associate Civil E Senior Civil Engineer
Pipeline Consequence of Failure Sfuoy
October 2015
Reviewed by
Jake Walsh, P.E.

Engineering Unit Manager
Bill Tuttle, P.E.

Director of Engineering
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Comp•n)' ExECUTIVE SUMMARY
Executive Summary
Introduction and Purpose
Pipelines are one of the most important assets of
any water system and their continual operation is
critical to San Jose Water Company (SJWC)
delivering reliable water supply to its customers.

With the purpose of identifying the criticality of each pipeline, the Planning Group conducted a Pipeline
Consequence of Failure Study for the Cupertino
Lease Area water system. Tn· study 1;>rovides a
framework to strategieall identi pilffihne
improvement projects witnin'""'tt;ie ... Gupertine l::ease .Are . :Yo this end, a methodology was developed which primarily usecl hyctraulie modeling and flooding analysis [a,,SJ.Llts o 9.M.aru.ID'. e critieality of all pipelines in the water system•.

Consequence of Failure Evaluation
Pipeline failures have a multi-faceted impact on society. In order to quantify the amount of impact a pipeline failure has on society as a whole, it was necessary to identify the primary facets affected by pipeline failures. The following four impact categories summarized in Figure ES-1 were considered to be the primary impacts.

Consequence of Failure Impact Categories
Health & Safety
Impact
Busin ess
Impact
System Operations
Impact
' .

Impact on public hearth and safety due to possible water contamination and flooding, and in some cases due to water service outages Impact on transportation corridors due to flooding of highways, roads, and passenger railroads
Impact on commercial and industrial bus111esses due to seivice outages and flooding
Impact on the ability to continually operate the water system and provide water to users
Figure ES-1. Consequence of failure Impact Categories
Pipeline Consequence of Failure Study
October 2015 Page Ii
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Hydraulic Modeling
Extensive~~graglic_moJlltjing was conducte..d io o(a.er to li_,filllate c~ stroplilc 'brea~ scenadosfor eve~ E!f?e ~ the Cupertino Leas~ ea wat~ system, The hydraulic __ ,,_ __ _ moael measured the leak discharge rate out of each
failed pipe, potential for water contamination due to low pressures, amount of consumer water demand inhibited
due to isolation of the failed pipe, and number of valves needing to be operated to achieve hydraulic isolation for each pipe.

Geographic Information System Mapping
Spatial analysis played a significant part in the 1
consequence of failure analysis. Geographic Information System (GIS) mapping was used as a tool to identify the types of properties, facilities, roads, and railroads within the potential flooding region for each pipe. In addition,

EXECUTIVE SUMMARY
Crstical Facilities and
Key Features
The consequence of failure evaluation
rnelhodology was developed such that
pipelines affecting critical facilities and key
features received higher consequence of
failure scores. Critical faciiit1es cind key
features include:
- Hospitals
- Acute health care facilities
- Commercial or residential units with
dialys.\s I Me-support equipment
~ Schools
• Freeways and major highways
- Railroads
GIS spatial tools were used to help identify pipelines crossing critical transmission mains and those essential for water system operations.

Results from hydraulic modeling and GIS spatial analyses were input into the consequence of failure evaluation methodology, which ultimately yielded a final consequence of failure score for each pipeline. Figure ES-2 outlines the overall consequence of failure evaluation process.

Figure ES-2. Consequence of Failure Score Evaluation Process Pipeline Consequence of Failure Study
October 2015 Pagel ii
\
ExECUTNE SUMMARY
Consequence of Failure Evaluation Results
After the consequence of failure score was generated, sll JS efin . Ripe seg11ruIDts in Cupertino Lease Area -' ere niquely rattlie..d rnm 1 to j 06~ and divided imto fl!>ur criticality categories: High (Top 10%), Medium-High (10-20%}, Medium (20-50%), and Low (50-100%).

Map ES-1 provides a visual representation of the final results for all pipes by criticality category.

Recommended Improvements and Actions
Findings of the .co.1Jse~uence of ail.u,.,.....=,..=..:=;:J# ...,..,.,=,,_,,. .... iaselin for: futui;e efforts o identify .ar1d .r.Joritiz eapital imprmtemerat- pi:ojects. Main replacement and rehabilitation project recommendations take into consideration both the consequence of failure as well as the bility of failure, - •
_H_o_we_ ver, rest1lt.s of ttni id ~~-~:.::;;::::
installation, • . , • mmunicated with the •
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Regulator Installation
Based on the consequence of failure evaluation results, it is recommended that an 8-inch pressure regulator be installed on the northern border of Cupertino Memorial Park, near the intersection of Christensen Drive and Fenway Court, as shown in Figure ES-3. This improvement will prevefl'lt rmtaoy Oliie_e.$ fror:rudi:opJe>ing to loWZ(often sulaatmes-pnerie) pr: ssures durrng a catastropblc pjpe_break and ill increase fire .. flow capacity. It is recommended that this improvement be implemented in 2017. The estimated cost for this improvement is $117,600.

Figure ES-3. Recommended 8-inch Pressure Regulator Installation Pipeline Consequence of Failure Study
October 2015 Page I Iii
\IH Q I ""f"G,-1,,.dcoNSEQUENCE OF FAILURE ANALYSIS - Results by Rank W~~E
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- 1 • 106 -> High Critlcality (10%)
- 107 f 12 -> Med-High Criticality (10%)
213 J 530 -> Medium Cr~icality(30%)
-- 531- 061 -> Low Cribcality (50%)
RoadTy e
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Loca) Roads
Criticr l Facilities
ComTercialAndustrial Business
lndu1 rial Business
- Comr.ercial Business
~-~--• Cupeftino Lease Area Limit
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Servce Layer Credit& uses The N1bon1I Map N.abonal Boundann Data-set. Natlonal ElevatKJn DitMe1. Geographic Namet. Information System, NdoT\<11 ttni"l9r11phy Dltattt , Ntlionaf Land caver OalitbllH , National Slludufftt 011tnet. and Nalionat Tran11portalion ~aNt; U.S. Ceneus Buraau • TIGER/LI~. H~RE Road dam ; -
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Valve Installation
EXECUnVE SUMMARY
It is reeommended=that- a -14 .. inol:t::valve.::be-ir:istalled atJ be_joter.se_cti,An_ofc6teveos,d:3reek Boulevar_o.;.:,aad South Foothilf,Boulevar.d, as illustrated in Figure ES-4. This recommendation will ecrease~tbe.::number.::.of Jar~e:teiameter. val.v~s~ding toLbe.:closed.;;.to-.t'.lyar-aolieally.;;jsota,te the 1"4,;;il'lch:diameter pipe aligr:iooer.it--onrSolJtff'Pcrothill~Boulev.a[d.betw_een'!;._SJe.Y_eas...._Creek:.:Boulevard and:=-Aloalde=.Roa'd- to-:;;the: south'? Currently, in the event of a catastrophic break along this alignment, it is estimated that approximately 2 million gallons may be discharged into the surrounding area. However, with the implementation of this recommendation, the failed pipe will be hydraulically isolated within a shorter time frame and the volume discharged will be reduced by up to 400,000 gallons. This improvement is recommended for implementation in 2017 and is estimated to cost $21,900.

Figure ES-4. Recommended 14-inch Valve Installation
Easement Documentation
A number of pipes in the Cupertino Lease Area water system are installed within private yards and streets, see Table ES-1. SJWC requests that the City provide plat and legal descriptions, tract, parcel or utility maps identifying easement type and limits as well as water main location within each easement. This documentation would be necessary for any potential pipeline improvements in these areas.

Pipeline Consequence of Failure Study
October 2015 Page Iv
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Table ES-1. Easement Documentation Request List
APN Address
326-12-049 10420 CRESTON DR
326-12-051 10440 CRESTON DR
326-12-0S2 10450 CRESTON DR
326-13-035 10407 VISTA KNOLL BLVD
326-15-076 10370 ALPINE DR
326-15-076 10370ALPINE DR
326-15-076 10370 ALPINE DR
326-lS-076 10370 ALPINE DR
326-15-103 22364 SALEM AVE
326-15-130 22445 CUPERTINO RO
326-15-130 22445 CUPERTINO RD
326-16-045 10130 CRESCENT RD
326-16-047 10151 HILLCREST RD
326-16-050 10181 HILLCREST RD
326-16-052 10161 HILLCREST RD
326-16-053 10143 HILLCREST RD
326-16-0SS 10133 HILLCREST RD
326-16-061 10191 HILLCREST RD
326-16-080 10171 HILLCREST RD
326-17-013 10168 AM ELIA CT
326-17-019 10201 AM ELIA CT
326-17-020 10185 AMELIA CT
326-17-026 10171 AMELIA CT
326-17-053 10151 AMELIA CT
326-18-057 10019 OAKLEAF PL
326-27-037 10145 PARKWOOD DR
326-27-037 10145 PARKWOOD DR
326-27-037 10145 PARKWOOO OR
326-27-037 10145 PARKWOOD DR
326-27-037 10145 PARKWOOD DR
326-35-063 10451 PHAR LAP OR
326-35-068 SOUTHERN PACIFIC TRANS.
326-37-004 10391 RIVERCREST CT
326-37-047 CRESTON DR
326-39-060 SANTA CLARA VALLEY WATER
326-41-033 10500 CASTINE AVE
326-41-095 21291 MILFORD OR
326-41-096 21301 MILFORD DR
326-41-097 21311 MILFORD DR
326-41-098 21321 MILFORD DR
326-41-099 21331 MILFORD DR
326-41-100 21341 MILFORD DR
326-41-101 21361 MILFORD DR
326-41-102 21371 MILFORD DR
326-41-103 21381 MILFORD DR -
Pipeline Consequence of Failure Study
October 2015

EXECUTIVE SUMMARY
APN Address
I 326-41-104 21391 MILFORD DR
326-41-105 21401 MILFORD DR '
326-41-106 21421 MILFORD DR
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326-41-107 21431 MILFORD OR
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' 326-41-108 21451 MILFORD DR
326-41-109 21461 MILFORD DR
326-41-114 CITY OF CUPERTINO
326-47-019 10410 STOKES AVE
326-49-007 10650 STOKES AVE
326-49-018 21887 WILSON CT
326-49-034 STOKES AVE
326-55-023 10315 ANN ARBOR AVE
342-12-063 22615 SALEM AVE
342-12-064 22625 SALEM AVE
342-12-064 22625 SALEM AVE
' 342-12-064 22625 SALEM AVE
342-12-090 22611 POPPY DR
342-29-057 10495 MERRIMAN RD
342-44-017 10500 SAN FELIPE RD
342-44-020 10530 SAN FELIPE RD
342-45-007 22864 VOSS AVE
342-45-035 10396 AVENIDA LN
342-48-006 22654 OAKCREST CT
342-48-018 10439 HENEY CREEK PL
342-48-030 10350 HENEY CREEK PL
342-48-030 10350 HENEY CREEK PL
342-57-009 10799 JUNIPER CT
342-57-030 10829 SYCAMORE CT
342-58-003 22238 HAMMOND WAY
356-01-021 10980 MIRAMONTE RD
356-05-005 MCCLELLAN RD
356-06-030 22044 BAXLEY CT
357-01-027 22288 BELLEVUE AVE
357-01-033 10168 CASS PL
I 357-04-029 10494 MIRA VISTA RD
357-06-016 10489 SCENIC BLVD
357-09-0S3 22120 STEVENS CREEK BLVD
357-10-006 21975 SAN FERNANDO AVE
357-10-008 21979 SAN FERNANDO AVE
357-12-055 10485 SAN FERNANDO AVE
357-20-019 10340 BUBB RD
357-22-006 10106 IMPERIAL AVE
357-22-007 10104 IMPERIAL AVE
357-22-035 10118 IMPERIAL AVE
Page( vi
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■-••-••-• Compo"Y CONTENTS

TABLE OF CONTENTS
EXECUTIVE SUMMARY ........................................................................................................................................ i TABLE OF CONTENTS ......................................................................................................................................... vii

1. INTRODUCTION ......................................................................................................................................... 1

1.1 BACKGROUND ............................................. .......... ................... ....... ....................................... ................. .. ..... ..... 1

1.2 OBJECTIVES ..... ...................... .. ................. ....... ......................... ...... ..................................................................... !

1.3 SYSTEM OVERVIEW .......................................................................................... ...... ............................................... 1

2. PIPELINE FAILURE EVENT CHARACTERIZATION, EFFECTS, AND MOOE ......................................................... 3

2.1 PIPELINE FAILURE EVENT CHARACTERIZATION ............................................................................................................ 4

2.2 PIPELINE FAILURE HYDRAULIC EFFECTS (IMPACT CAUSES} ............................................................................................ 5

2.3 PIPELINE FAILURE MODE ....................................................................................................................................... 6

3. PIPELINE CONSEQUENCE OF FAILURE EVALUATION METHODOLOGY .......................................................... 7

3.1 IMPACTCATEGORIES ............................................................................................................................................. 7

3.1.1 Health & Safety Impact .......................................................................................................................... 7

3.1.2 Transportation lmpact ........................................................................................................................... B

3.1.3 Business Impact ..................................................................................................................................... 8

3.1.4 System Operations lmpoct ..................................................................................................................... 8

3.1.5 Impact Categories Summary .................................................................................................................. 9

3.2 IMPACT CATEGORY MEASUREMENT PARAMETERS AND TOOLS .................................................................................... 10

3.2.1 Hydraulic Mode/ ................................................................................................................................... 11

3.2.2 Geographic Inf or motion System (G/5) .................................................................................................. 11

3.3 PIPELINE CONSEQUENCE Or FAILURE SCORING METHODOLOGY ................................................................................... 19

3.3.1 Health & Safety Impact Category Scaring ............................................................................................ 20

3.3.2 Transportation Impact Category Swring ............................................................................................. 24

3.3.3 System Operations Impact Category Scaring ....................................................................................... 26

3.3.4 Business Impact Category Scoring ....................................................................................................... 27

4. PIPELINE CONSEQUENCE OF FAILURE EVALUATION RESULTS .................................................................... 29

4.1 RESULTS FOR OVERALLSYSTEM ............................................................................................................................. 29

4.2 RESULTS FOR PIPES AFFECTING CRITICAL FACILITIES, KEY FEATURES, AND SYSTEM OPERATIONS ........................................ 31

5. RECOMMENDED IMPROVEMENTS AND ACTIONS .............................. , ...................................................... 33

5.1 REGULATOR INSTALLATION FOR MANN REGULATED ZONE .......................................................................................... 33

5.2 VALVE INSTALLATION .......................................................................................................................................... 35

5.3 EASEMENT DOCUMENTATION ............................................................................................................................... 35 Pipeline Consequence of Failure Sttidy
October 201~ Page I vii

CONTENTS

LIST OF FIGURES
FIGURE 1. DAMAGE OBSERVED DUE TO MAIN BREAK LOCATED ON PENSACOLA DRIVE IN THE EASTERN SIDE OF SANJOSE ... .... .. ...... ......... 3 FIGURE 2. WORKERS DIVERTING TRAFflC ON BASCOM AVENUE WHJLE ATTEMPTJNG TO FIX A MAIN BREAK ON A 12" WATER MAIN . .... ...... 4 FIGURE 3. PICTURE ON THE LEFT ILLUSTRATES THE BREAK STAGE OF A MAIN BREAK; PICTURE ON THE RJGHT ILLUSTRATES A REPAIR DURING THE ISOLATION STAGE OF A MAJN BREAK ....... ......... ..... .... ........... ... ........... .... .. ...... ........... ..... ......... ........ ......... ..... .. ......... 5 FIGURE 4. PIPELINE FAILURE MODE - COMPLETE SEPARATION ........... .... .............. ..... ......... ... .... ...... ........ ..................... ....... ..... ... 6 FIGURE 5. SAMPLE OF GIS RESULTS OBTAINED USING FLOODING BUFFERS AND VARIOUS SPATIAL FEATURES .. ..... ........ ....... ....... ...... . 17 FIGURE 6. OVERVIEW Of CONSEQUENCE OF FAILURE SCORING PROCESS .... ...... ............ ...... .... ................. ........ ...... ... .... ..... .... .. .... 19 FIGURE 7. HEALTH AND SAFETY CATEGORY SCORING PROCESS AND EQUATIONS ....... ...... ............... .......... .... .. ........ ... ... ........... ...... 20 FIGURE 8 . ESTIMATED TIME REQUIRED FOR ISOLATION FLOW CHART ....... ....... ..... ............................... ................ .......... ..... ........ 23 FIGURE 9. BUSINESS IMPACT CATEGORY SCORING PROCESS AND EQUATIONS ....... .... ........... ...... ................... ........ ..... ..... ....... ...... 27 FIGURE 10. PERCENT DISTRIBUTION OF CRITICALJTV RESULTS BY COUNT AND BY LENGTH ..... ... ...... .. ............... ...... ..... ................ ..... 29 FIGURE 11. BREAKDOWN Of PIPES AFFECTING CRITICAL FACILITIES, KEY FEATURES, AND SYSTEM OPERATIONS ...... ....... .... ...... ..... .. .... 31 FIGURE 12. NUMBER OF PIPES BV CRITICALITY AFFECTING CRITICAL FACILITIES, KEY FEATURES, AND SYSTEM OPERATIONS ...... ....... ...... 32 FIGURE 13. RECOMM£NDED 8-INCH PRESSURE REGULATOR ANO MANN REGULATED ZONE ...... ...... ..... .... .. .................. .......... ........ 34 FIGURE 14. RECOMMENDED 8-INCH PRESSURE REGULATOR AND IMMEDIATE VICINITY ............... ........ ....... ... ........ ..... ..... .......... .. ... 34 FIGURE 15 . RECOMMENDED 14-INCH VALVE INSTALLATION .. ..... ..... ....... ......... ............ ........... .... ........ ... ............ .... ........ .......... . 3S

LIST OF MAPS
MAP 1. CUPERTINO LEASE AREA BOUNDARY .. ... ...... ... ...... ... ... .......... ..... .. .... ......... ... ...... ... ...... ...... ..... ..... .... ................. ..... .... ... 2 MAP 2. FLOODING BUFFERS ... ..... ... .... .... ............ ..... ....... .. ...... .. .... .............. ........ .... ..... ........... ......... .. .... ... ................. ... .... .. 13 MAP 3. ALL SPATIAL FEATURE DATA ........... ....... ..... ...... .... ....... ....... ......... .. .... .... ................... ............. ........ ... ...... ............ ..... 14 MAP 4. POPULATION DENSITY .. .. ... .. .......... ... ............ ... ........ ......... ..... ....... .... .. ......... ...... ..... ... ................ .... ....... ... ...... .. ....... 15 MAP 5. CRITICAL FACILITIE5, COMMEROAL ANO INDUSTRIAL BUSINESSES ........... ..... ..... ........ .............. .................. .............. ..... ... 16 MAP 6. CRITJCALSYSTEM OPERATIONS MAINS AND PIPES INTERSECTING SCVWD MAIN ...... ....... .... ....... ..... .. ........ ........... ....... ..... 18 MAP 7. RESULTS BY RANK ............. . ..... ... ......... .......... .... ..... ............... ......... ... .. ......... ......... ...... .......... ... ........ .. .. ............ ...... 30 MAP 8. WATER MAINS CROSSING PRIVATE PROPERTIES ....... ............... ............................... ...... ......... ........ ................ ....... ... ... . 3 7

LIST OF TABLES
TABLE 1. HYDRAULIC EFFECTS Of PIPELINE FAILURE EVENT .... .......... ..... ........ .. ......... ......... .... ..... ... ....... .... ..... ............ .... ....... ....... 5 TABLE 2. IMPACTS CATEGORIES IMPACT SUMMARY ... ..... ...... ......... ......... ... .... ... .... ...... ........... ........ ... ..... ... ........ .. .... .... ... ... ....... .. 9 TABLE 3. QUANTIFIABLE PARAMETERS USED TO MEASURE IMPACT CATEGORJES .. ....... ...... ............. .... ... .... ....... .... ........... ... ....... ... 10 TABLE 4. TYPE AND SOURCE OF EXTERNAL SPATIAL DATA .... ..... ...... ...... ........ ............. ..... .... ... .......... ...... ......... ............ ..... ......... 12 TABLE 5. TRANSPORTATION CORRIDOR ANNUALAVERAGE DAILY TRAFflC ...... ........ .......... ... ... ....... ......... .. .... ..... ....... .... ...... ........ . 25 TABLE 6. SYSTEM OPERATIONS IMPACT SCORING SUMMARY .... ........ ... .. ................ ..... .. ...... .... ........... .... .. .................... .... .... ..... 26 TABLE 7. CRITICALITY CATEGORIES BY RANK ..................... .... ............ .. .. ..... ... ... ....... ..... ........ ......... ........... .. ... ... ... .............. ..... . 29 TABLE 8 . EASEMENT DOCUMENTATION REQUEST LIST ... ... .. ...... ......... ..... ..... .. ... ....... ......... ........ ........ ... .. ............ .. ............. ...... . 36 Pipeline Consequence of Failure Study
October 2015 Page I viii
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LIST OF APPENDICES

APPENDIX A

APPENDIX B

APPENDIX C
City of Cupertino Land Use Map
City of Cupertino Annual Average Daily Traffic
Consequence of Failure Scores and Rankings Table

LIST OF ABBREVIATIONS
AADT Annual Average Daily Traffic
DDW Division of Drinking Water
ft Feet
GIS Geographic Information System
gpm Gallons per minute
psi Pounds per square inch
S0/WD Santa Clara Valley Water District
SJWC San Jose Water Company
Pipeline Consequence of Failure Study
October 2015

CONTENTS
Page I ix
I.III
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Cornp1ny INTRODUCTION
1, Introduction

1.1 Background
Pipelines are a critical water distribution system asset and fundamental to virtually every facet of reliable water s stem opera • ~~~ nit1;.1de of their importance, ·sset m an ro ra s lle implem~, ~.-=.,, =
ater s stems for the overall benefit of the custelfie . eline Consequence of Failure stud'}' will seNe as a base\ine upon which San Jose Water Company (SJWC) will develop a refined pipeline asset management program.

1.2 Objectives
The objectives of the Consequence of Failure Study are summarized below:
• Establish an approach for evaluating the consequence of failure for each pipeline • Locate critical facilities, features, and areas of concern • Generate results measuring the consequence of failure for each pipeline by rank • Develop a baseline to help strategically identify capital improvement projects that would yield the greatest ratepayer benefit

1.3 System Overview
The Cupertino Lease Area is located in the northwest region of the City of Cupertino, encompassing 3. 7 square miles which is equivalent to approximately one-third of the city's total area. SJWC has been providing water service to the Cupertino Lease Area for the past 18 years as part of a 25 year agreement. The Cupertino Lease Area water system is composed of nearly 60 miles of pipelines, 4 water storage tanks with a total design storage capacity of nearly 8 million gallons, 5 booster pumps with a total design capacity of 6,300 gallons per minute {gpm), and 2 wells with a combined capacity of 1,100 gpm. The majority of water supply served to the Cupertino Lease Area comes through a Santa Clara Valley Water District (SCVWD) turnout at Mann Drive Station. There are approximately 4,200 water services within the Cupertino Lease Area, totaling an average day demand of over 2 million gallons. Map 1 provides a visual summary of the Cupertino Lease Area water system.

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PtPEUNE FAILURE EVENT CHARACTERIZATION, EFFECTS, AND MODE

2. Pipeline Failure Event Characterization, Effects, and Mode
Pipeline failure events can occur in many different fashions and magnitudes. Some failures may be as small as a minor leak, but some are catastrophic in nature causing a major disruption to the water distribution system and to the public as depicted in Figures 1 and 2. Before any system-wide analysis on the consequence of pipeline failure could be performed, it was first necessary to clearly define the characterization, effects, and mode of pipeline failures that would be considered for the purposes of this study.

Figure 1. Damage observed due to main break located on Pensacola Drive in the eastern side of San Jose.

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............. _.C4"'pHI)' PIPELINE FAILURE EVENT CHARACTERIZATION, EFFECTS, AND MODE Figure 2. Workers diverting traffic on Bascom Avenue while attempting to fix a main break on a 12" water main.

2.1 Pipeline Failure Event Characterization
Pipeline failure events and their impacts can be characterized by two stages. The first stage (break stage) is the affected condition of the distribution system immediately after the pipeline break, when water is being discharged from the failed pipe into the surrounding environment.

The second stage (isolation stage) is the affected condition of the system while the failed pipe is hydraulically isolated and being repaired. Both stages were considered in this study to capture the entire impact of a pipeline failure event. Figure 3 includes photographs illustrating the two stages.

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PIPELINE FAILURE EVENT CHARACTERIZATION, EFFECTS, AND MODE Figure 3. Picture on the left illustrates the Break Stage of a main break; picture on the right illustrates a repair during the Isolation Stage af a main break .

2.2 Pipeline Failure Hydraulic Effects (Impact Causes)
When a pipeline fails, there are a few primary hydraulic effects which cause impact to the public that must be considered. During the first stage of the failure event, the additional demand (i.e. water being discharged into its surroundings) creates higher velocities and lower pressures in the distribution system. Another major failure effect during the first stage is the flooding of the surrounding vicinity. The societal impacts of low pressures and flooding that were considered in this study are explained in Section 3 Pipeline Consequence of Failure Evafuation Methodology.

During the second stage of the failure event, various valves must be closed (or at least pinched down) in order to isolate the failed pipe for repair. This operation will hydraulically isolate the region contained within the closed valves and will put all of the users within this region out of service. In addition, once the isolation valves are closed, the rest of the water system outside of the isolated region may also be affected due to the change in overall system dynamics. Users outside of the isolated region may experience low pressures and reduced water flow as well.

Table 1 summarizes the failure effects that were considered in this study. The societal impacts of hydraulic isolation that were considered in this study are explained in Section 3 Pipeline Consequence of Failure Evaluation Methodology.

Table 1. Hydraulic Effects of Pipeline Failure Event
Stage
Stage 2
Occurrence
Immediately following pipe
break
Immediately following isolation
for pipe repair
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October 2015
Hydraulic Effects (Impact Ca:..1ses)
• Low pressures
• Flooding
• Low pressures
• Out of service
Page IS
l 19F::: PIPELINE FAILURE EVENT CHARACTERIZATION, EFFECTS, AND MODE

2.3 Pipeline Failure Mode
There are numerous ways in which pipelines can fail. Failure modes include blowouts, longitudinal splits, wall ruptures/tears, circumferential breaks, joint leaks, perforations, and more. It was assumed for the purposes of this study that all pipes would fail in a catastrophic fashion resulting in complete pipe separation such that there are two points at which water is discharged at atmospheric pressure, as illustrated in Figure 4. Although the vast majority of pipeline failures in the SJWC distribution system are not of this nature or magnitude, it was appropriate to analyze a worst-case scenario for each pipeline.

Atmospheric
Pressure
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3. Pipeline Consequence of Failure Evaluation Methodology Establishing the methodology for evaluating each pipeline's consequence of failure is the most involved and pivotal portion of this study because, in the end, methodology will determine results. Therefore, it is imperative that the methodology is developed such that it captures all key consequences or impacts that result from pipeline failures and accurately measures them.

Various consequence of failure evaluation methodologies have been developed for different water utilities and for research purposes. However, upon review of various studies, it was found that a new and customized methodology was necessary to more specifically evaluate and address the particular needs within the Cupertino Lease Area. This section presents SJWC's customized methodology which is intended to provide an objective and systematized process that will yield quantifiable and justifiable consequence of failure results. The section is structured as follows:
• Section 3.1 Impact Categories - Introduction to key impacts that result from pipeline failures
• Section 3.2 Impact Category Measurement Parameters and Tools - Discussion of parameters and tools used to measure impacts
• Section 3.3 Pipeline Consequence of Failure Scoring Methodology- Explanation of scoring methodology used to develop final rankings

3.1 Impact Categories
The following four impact categories encompass what SJWC believes to be the primary societal impacts when a pipeline fails:
• Health & Safety Impact
• Transportation Impact
• Business Impact
• System Operations Impact
The following subsections provide explanations as to why and how pipeline failures play a role in these four impact categories.

3.1, 1 Health & Safety Impact
The most critical societal impact of pipeline failures is related to public health and safety.

Pipeline failures often create a major drop in pipeline pressures, potentially allowing contamination infiltration into pipes. According to the California Division of Drinking Water (DDVV) Waterworks Standards, distribution systems are required to "assure that the minimum operating pressure in the water main at the user service line connection throughout the distribution system is not less than 20 pounds per squar~ inch {psi) at all times" (Chapter 16, Section 64602). However, in the event of a pipeline failure, pressures often drop below 20 psi, and sometimes even below O psi (atmospheric pressure) giving rise to potential contamination Pipeline Consequence of Failure Study
October 2015 Page 17
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C°"'p•n:r PIPELINE CONSEQUENCE OF FAILURE EVALUATION METHODOLOGY of the water system. In addition to water quality concerns, pipeline failures can also compromise public safety due to flooding. Depending on the extent of flooding, conditions may be such that the general public is more prone to injuries. lastly , public health and safety may be impacted due to users being put out of water service while the failed pipe is hydraulically isolated for repair. Pipeline failures can also negatively affect firefighting capabilities. However, due to the momentary nature of pipeline failures and the infrequency of fire events, fire-flow impacts during a pipeline failure were not included as part of this study.

3.1.2 Transportation Impact
In densely populated areas such as the San Francisco Bay Area, transportation is a critical component of public life and is heavily intertwined with numerous societal functions. Therefore, it is essential that all corridors related to public transportation such as highways, roads, and passenger railroads be minimally disrupted. Pipeline failures, depending on magnitude and location, can cause major disturbances to transportation corridors due to flooding.

3.1.3 Business Impact
Pipeline failures also negatively impact commercial and industrial businesses, possibly resulting in economic loss. \JVhen flooding occurs due to a pipe failure, all businesses that require customer or worker access may be temporarily inaccessible, thereby halting or impeding business operations. For example, potential customers of restaurants and shopping centers would be deterred from entering due to flooded conditions in parking lots, walkways, and building interiors. In addition to flooding, service shutdowns due to hydraulic isolation may also negatively affect businesses. \JVhile heavy water-consuming businesses such as restaurants, car wash stations, and certain heavy industries will be most affected, nearly all businesses will be affected as customers and workers will temporarily have only limited or no access to water.

3.1.4 System Operations Impact
There are specific pipelines that must remain in service for SJWC to maintain safe and reliable system operations. These pipelines include SCWvD transmission mains and critical pathway pipes that keep important water system facilities operational and hydraulically connected to the system.

SJWC relies heavily on SC\/VvD for its water supply. On an average water demand day, the District treats and delivers approximately 70 million gallons of wholesale water per day to SJWC through their large transmission mains which range from 20-inches to 6.5-feet in diameter in SJWC's service area (20-inches to 48-inches within the Cupertino Lease Area). A catastrophic break in an SJWC main that crosses a District transmission main could potentially result in significant damage to SCVWD's pipeline. This could cause flooding damage and result in water supply shortages to Cupertino and other surrounding communities. Therefore, SJWC pipelines crossing SCVWD transmission mains are considered critical to system operations.

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PIPELINE CONSEQUENCE OF FAILURE EVA LUA TJON METHODOLOGY Critical pathway pipes are defined as pipelines without redundancy that keep major facilities such as tanks and pumps in operation. These pipelines typically include tank inlet/outlet pipes as well as transmission mains located upstream and downstream of pump stations.

3.1.5 Impact Categories Summary
Table 2 summarizes the hydraulic effects and practical impacts which were considered in this study that correspond to the four impact categories.

Table 2. Impacts Categories Impact Summary
!mpact
Category
Buslnus
System
Operations
Impact Cause
Low Pressures
Flooding
Out of Service
Transmission
Main Damage
Critical Pathway
Pipeline Outage
Pipeline Conseq1.1ence of Failure Study
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Impacts
• Public exposure to potential water quality hazards due to contamination infiltration
• Public more prone to injuries due to hazardous
conditions
• Disruption to critical facility operations
---~-=======~
• Disruption to critical facility operations
• High traffic volume roads/highways and railroads
disrupted
• Customer access to business prevented
• Business operations disrupted
• Business operations disrupted
• Water supply shortage
• Inability to operate important water system facilities

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3.2 Impact Category Measurement Parameters and Tools
Quantifiable parameters were established to measure the amount of impact every individual pipeline failure event has on each impact category. Table 3 provides all of the parameters used for this study, as well as the primary tools used to obtain these measurements for each parameter.

Table 3. Q,uantjfiable Parameters Used to Measure Impact Cat•gories Parameter
Number of users (by type) that experience less than 20 psi durin~,?!Pe ~rea~ s~ e 1 _ _ _
Number of users (by type} that expert
to O psi during pipe break stage 1
Quantity of water lost in gallons per minute
Number of valves (by type and size) needing to be closed to isolate pipe segment for repair
- - -------------------Number of users (by type) hydraulically isolated after valves are closed for p;pe segment repair 1
::::-"" --- ._.

Quantity of water inhibited due to hydraulic isolation when valves are closed for pipe segment repair _.,......__ _ ., . --- ~- -- -- --- __... ---- • - - - Number of non-isolated users (by type) that experience less than 20 psi during isolation stage 1
:.::::::::.=-.... ~ - - ;: •
Number of non-isolated users (by type} that experience less than or equal to O psi dur;ng isolation stage 1
-- - =~·~,~~~ -:,;"""""---
Number of properties (by type) within flooding region 1 Road types within flooding regions 1
Population density within flooding region
Pipes that cross SCVWO transmission mains
Critical pathway pipelines essential for water system
operations
Notes:

Impact Cause
Low Pressure
Low Pressure
Flooding
Out of Service
Out of Service
Out of Service
Low Pressure
Primary Tool
Hydraulic Model
Hydraulic Model
Hydraulic Modef
GIS
(1) Certain user types, facility/property types, and roads types are more critical than others. Therefore, all users that would experience low press,ures and all properties or roads that would be flooded due to pipelin~ failure were accounted for according to their type. See Section 3.3 Pipeline Consequence of Failure Scoring l l
Methodology for detail on how these critical users and facilities contributed to the overall consequence of failure score for each pipe.

Pipeline Consequence of Failure Study
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Ccmpa":, PIPELINE CONSEQUENCE OF FAILURE EVALUATION METHODOLOGY As indicated in Table 3, all parameters required in this study for evaluating the consequence of failure of each pipeline could be obtained through the use of the hydraulic model and Geographic Information System (GIS) mapping system. Synergi WaterTM was the tool used to measure parameters related to services experiencing low pressures following pipe breaks and outages due to isolation, while ArcGIS® was the tool used to measure parameters related to geographic location such as flooding or proximity to other features. The following subsections explain in detail how these two software tools were used to obtain measurable parameters.

3.2.1 Hydraulic Model
In order to obtain results required for the consequence of failure evaluation, SJWC created an all pipes and valves hydraulic model based on GIS data. Pipe segments are assigned a unique ID in GIS and defined as a continuously drawn pipe with the same diameter and work order ID.

A pipe segment is only broken by GIS at water main tees, changes in diameter, or when the work order ID changes. Pipe segments are not broken in GIS at valves, hydrants, elbows, or service taps.

After importing all facilities into the hydraulic model from GIS, 1-ft resolution elevation contours were obtained from Santa Clara County and assigned to each node. Annual service demand data from SJWC's Billing Department was then geospatially plotted and assigned to the nearest node of the appropriate pipeline. Creating this hydraulic model allowed SJWC to simulate the effect caused by catastrophically breaking and then isolating each pipe segment.

3.2.2 Geographic Information System (GIS)
ArcGIS® software can perform various spatial analyses and yield useful information tied to the geographic location of a specific feature. In this study, ArcGIS® was used to tie locations and attributes of each failed pipe to other external spatial data such as parcels, transportation corridors, SCW>/D facilities, and population density.

Floodjng Buffers
Following a catastrophic main break, water may inundate the surrounding area, possibly impacting critical facilities, roads, transportation corridors, businesses, and residential properties. SJWC's Distribution Systems Department identified 50-ft as the inundation limit for most pipe breaks. Therefore, 50-ft buffers surrounding each pipe were developed as potential flooding areas. \Nhen flooding intensity (see Section 3.3.1 Health & Safety Impact Category Scoring for an explanation of flooding intensity) was simulated to be greater than twice the average flooding intensity, a 100-ft flooding buffer surrounding the pipe was used as the potential flooding area. Map 2 shows the flooding buffers created around each water main.

GlS Spatial Data
Spatial data related to parcels, railroads, roads and population d ensity was needed for this study and obtained via external sources as summarized in Table 4 and illustrated in Maps 3, 4 Pipeline Consequence of Failure Study
October 2015 Pagel 11
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Table 4. Type and Source of External Spatial Data
Spatial Feature
Name
Using GIS to Measure Parameters
Type
Polygon
Line
Line
Polygon
Line
Source
City of Cupertino
United States Census Bureau
Bay Area Census I Metropolitan
Transportation Commission
SCVWD
Spatial intersection analyses were performed using the flooding buffer surrounding each pipe segment and the feature of interest (e.g. parcels, roads, population density polygons, etc.) in order to obtain a quantifiable value that would ultimately be used to determine the consequence of failure score. Figure 5 provides samples of the data obtained from ArcGIS® by using a 50-ft flooding buffer as an example. GIS was also used to identify water mains considered critical to SJWC's operations, as illustrated in Map 6.

Pipeline Consequence of Failure Study
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Road Type
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Industria l busiriess parcels shown in this map that reside outside of the Cupertino Lease Area were included as part or the Consequence of Failure Analysis because they are served by the Cupertino Lease Area water system.

L
FIGURE 5. Sample of GIS Results Obtained Using Flooding Buffers and Various Spatial Features Flooding Buffer Interaction with various Features
NOTES: For a definition of Pipe Segment see Section 3.2.1 Hydraulic Model Description of Measurable Parameters Obtained
50-ft Buffar/Populatlon Da111jty Intersect
A spatial intersect between the 50-ft buffer of pipe 05318281 and the population density layer is observed. Because five population density blocks intersect the highlighted 50-ft buffer, five polygons are created as a • result of the spatial intersects. Each of these polygons contains the attributes of pipe 0531628 as well as the attributes of each specific density block as illustrated in the summary table below. For the population density spatial feature the measurable value selected for pipe 0531626 is the weighted arithmetic mean of the population density by area.

PlpelO D<mltylloctlDCoN ,.,...,..o-lty Toc.10..sily
OIHl ... r-.dltt') Jllllll~ril --111'1
osnm Sl&l50770ll0l2 7328.33537 ti715 9558.lU07,l
o:mm fi085507l012034 14452.2091 3405 1028.015525
om.us 608550770l203S 2h12 ms.94312
D53U<& ' 6QISS077012()~6 805 lS!ll.0'!1481
osima "'85.507ltll2<ll7 4592.lID 102 40HA44<Wi
so.ft Buffer/parcels lnttruct
A spatial intersect between the 50-ft buffer of pipe 0531828 and the Santa Clara County parcels layer is observed. Because nine parcels intersect the highlighted 50-11 buffer, nine polygons are created as a result of the spatial intersects. Each of these polygons contains the attributes of pipe D531826 as well as the attributes of each specific parcel as illustrated in the summary table below. For the parcels spatial feature the measurable value selected for pipe 0531628 is the number and type of parcels affected by the flooding buffer.

Pipe IO
Section .ArH of lntenecte:d
APfl
.. ,..i tt'
D53182ll 357-16--059 452.61 0490
0531323 3.57·16-1,4j 1599-79 8455
D.531828 3.57-17-099 6titi.01 5054
0531828 357-17-100 l36.n 4850
0531B2' 3S1-17•101 Ul-44 5026
Q53L82B 357-17-lll SS.27 ....
0531828 357-18-002 373.70 13471
0531Sl8 357-18-039 3064-27 7Dl3
n531828 357-1&-040 21S48.SO 6313
SO-ft Buffer/Road Type Internet
A spatial intersect between the 50-ft buffer of pipe D531698 and the Cupertino Roads layer is observed. Four different road types are found w~hin the highlighted 50-ft buffer. As a result, the intersect tool reports on each of these 4 road types and ties their attributes with thOse of pipe D531698 as mustrated in the summary table below. For the Cupertino Roads spatial feature the measurable value selected for pipe 0531826 is the Annual Average Daily Traffic (AAOT)2 of the highest traveled road affected by the pipe.

PlpolD -= RoadN•me Tolall-""'lnt@ne<tedfftl
0531698 Artert.ls STEVENS CREEK Bl VO 23,91
0531698 Local R.oads PENINSUlAAVE '9.SS
D531698 Malor Collectors STEVEl>IS CREEK BLVD 76.13
0531698 Mlr\Or COilectors BUBB RO 100S.6S
50-ft Buffer/Railroad Intersect
A spatial intersect between the 50-ft buffer of pipe 0532145 and the Cupertino Railroads layer is observed. Four different road types are found within the highlighted 50-ft buffer. As it is illustrated, a segment of the Union Pacific Railroad is contained within the 50-ft flooding buffer for pipe 0532145. The final measurable value selected for pipe D532145 would be a 1 indicating pipe 0532145 does affect the railroad.
(2) Annual Average Daily Traffic is explained in Section 3.3.2 Transportation Impact Category Scoring MAP &J CONSEQUENCE OF FAILURE ANALYSIS - Critical System Operations Mains and Pipes Intersecting SCVWD Main ·••11:::,ose ••• Company
W+E
/
\ \ Crist o Rey Dr Reser
,I
l
}
J ....
, ,
..
' !
l
" "'
0 I 1,500 3,000
,....__.,.__
'· ..... ....... -..
4,500
-... ....
'
• ,
':/ /,, ... ... ,_,,
'\.
6,000
!Feet
...
' '
'
. ..
~
l ' .
., ., ... ,
/
_,f
J
Serwiet ~ Credit. USGS Tile National Map: National 8000.dat,.. Datlset, Natlonal Elnatoh 0.-Mll. 'Gtogrept,11; NlllWI 11 t-t,drog,aptly o.tlMt , National Land Cover Database, NatlDf'lilll SIIUdur'N o.tuet , and N-"en•~ T~ ~ U.S .

I ,
l
.;-.,,:.:_-,
SfEVENS ~::REEK BLVD t
I'
LEGEND
- Critical Systems Operations Main
c::::J Pipes intersecting SCVWD Main
--Water Main
- SCVWO West Pipeline
Road Type
·- Freeways
"""""' Arterials
- Major Collectors
-- Minor Collectors
Local Roads
- SJWC STATION
~:!Cupertino Lease Area Limit
Cupertino Area Parcels
-~ 4
V

PIPELINE CONSEQUENCE OF FAILURE EVALUATION METHODOLOGY

3.3 Pipeline Consequence of Failure Scoring Methodology A two-step process was used to obtain consequence of failure scores for each pipeline. First, the parameters listed in Table 3 were used to calculate scores for each impact category for every pipeline. Then scores for each impact category were weighted and combined to yield the consequence of failure score for all pipes. Figure 6 illustrates the overall scoring process. The following subsections provide explanations of the scoring process for each impact category and for the overall consequence of failure score.

Consequence of Failure Scoring Process

CONSEQUENCE OF FAILURE SCORE
Figure 6. Overview af Consequence af Failure Scoring Process Pipeline Consequence of Failure Study
October 2015 Page 119
'
r

PIPELINE CONSEQUENCE OF FAILURE EVALUATION METHODOLOGY

3.3.1 Health & Safety Impact Category Scoring
The Health & Safety impact category is the largest contributor to the overall consequence of failure score, accounting for 50 percent of the total weight. The overall process and methodology for calculating the Health & Safety impact category score is presented in a flow chart in Figure 7. Following the flow chart is the discussion and rationale for the methodology. (
;,Health am!).,'
Safety
Impact
"" . Score
i ~
r
I Healch &Safety Impact Score = 0.75 (Water Quality Score) + 0.25 (Flooding Score) ... t t .,
- I I
I . I I
1 ( Flooding) (Population) WQ Score = Service WQ Score WQ Score ~ 2x Node WQ Score Flooding Score = 1 t ·t x log D ·t n ens1 y ensi y •
Yes i i
Node Water Quality Scort = [ Flooding Intensity== (Di5·charge) x crime U~til) ] { Service WQ Score> 0? J No - Rate Isolation # of nodes SO psi i
Service Water Quality Score =
(#of serotces bet~een) + 2 (#of servi~es)
O a.nd 20 psi ~ 0 psi
...

Figure 7. Health and Safety Category Scoring Process and Equations The Health & Safety impact category score can be separated into a water quality component and a flooding component, as these are the two major impact causes associated with the general health and safety of the public. There is also a third component, the "out of service" component which results from hydraulic isolation. However, this third component was only considered in special cases, particularly when critical facilities requiring constant water service were placed out of service. These special cases were handled separately and are further discussed throughout this subsection. The water quality component and flooding component contributed 75 percent and 25 percent, respectively, to the total weight of Health & Safety impact category score, as shown in Equation 3.1. The methodologies used to obtain water quality and flooding scores are described in the following subsections.

Health &Safety == 0.?5 (Water Quality Score)+ 0.25 (Flooding Score) Impact Score Pipeline Consequence of Failure Study
October 2015
(3.1 )