TOWN OF HILLSBOROUGH
San Mateo County
Sophie Cole, Mayor 1600 Floribunda Avenue
Leslie Marden Ragsdale, Vice Mayor Hillsborough, CA 94010 Laurie Davies Adams, Councilmember www.hillsborough.net Marie Chuang, Councilmember Phone 650-375-7400
Christine Krolik, Councilmember
A G E N D A
MONDAY, AUGUST 11, 2025
4:00 PM STUDY SESSION
5:00 PM CLOSED SESSION
6:00 PM CITY COUNCIL MEETING
Hillsborough Town Hall
Meetings of the City Council are held in-person in Council Chambers. As a courtesy and technology permitting, the meeting will also be held virtually via Zoom Video Conference. However, the Town cannot guarantee that the public’s access to the Zoom virtual platform will be uninterrupted, and technical difficulties may occur from time to time. In those instances, so long as the public may still attend the meeting in person, the meeting will continue.
In the event a Councilmember is participating remotely under the requirements of Government Code Section 54953 with regard to “just cause” or an “emergency” situation as those terms are defined in the Brown Act, the Town will stop the meeting if there is any technology disruption until such time that the public is reconnected to the live in person meeting and able to provide comment.
To attend the meeting in person:1600 Floribunda Avenue, Hillsborough, CA 94010 To provide Public Comment in person: Members of the public wishing to speak on the agenda item are requested to complete a yellow speaker card and submit it to the City Clerk. Speakers may speak for up to three minutes.
To participate in the meeting via Zoom Video Conference:
• Log in to the meeting at https://us06web.zoom.us/j/85090706040?pwd=FAAawVAcV51sQBFzaCJUWHadHDen17.1 • Dial-in via phone:
+1 669 444 9171 US
Meeting ID: 850 9070 6040
Passcode: 912430
To provide Public Comment via Zoom Video Conference: Live verbal public comments may be made by requesting to speak using the “raise hand” feature in Zoom or, if calling in by phone, by pressing *9 on the telephone keypad prior to the close of the public comment period for the item. In response, the Town will unmute the speaker and allow them to speak for up to three minutes.
STUDY SESSION (4:00 pm)
CALL TO ORDER
ROLL CALL
A. STUDY SESSION: SOLID WASTE RATE STUDY
Agenda – Hillsborough City Council
Monday, August 11, 2025
ADJOURN STUDY SESSION
CLOSED SESSION (5:00 pm)
CALL TO ORDER
ROLL CALL
ANNOUNCEMENT OF CONFLICT OF INTEREST ON CLOSED SESSION ITEM(S) This portion of the agenda is for Councilmembers to disclose any conflict of interest related to the item(s) on the Closed Session agenda. Any Councilmember who has confirmed a conflict of interest or has reason to believe they have a conflict of interest should disclose the conflict for the record and abide by the disqualification requirements contained in FPPC regulations.
CLOSED SESSION ITEM
A. CONFERENCE WITH LEGAL COUNSEL – INITIATION OF LITIGATION Pursuant to Government Code Section 54956.9(d)(4)
Town as Plaintiff – One Potential Case
PUBLIC COMMENT ON CLOSED SESSION ITEM(S)
Members of the public may provide public comments on the item(s) on the Closed Session agenda. Members of the public participating in person are requested to complete a yellow speaker card and submit it to the City Clerk before addressing the City Council. Members of the public participating via the Zoom platform may use the “raise hand” feature or, if calling in by phone, press *9 on the telephone keypad. Speakers are limited to one comment per Closed Session item.
ADJOURN CLOSED SESSION
REGULAR CITY COUNCIL MEETING (6:00 pm)
I. CALL TO ORDER
II. ROLL CALL
III. PLEDGE OF ALLEGIANCE
IV. REPORT FROM CLOSED SESSION
V. PROCLAMATION
• National Emergency Management Awareness Month
VI. PRESENTATION
• Introduction of Burlingame-Hillsborough Youth Poet Laureate and Updates from the Burlingame Library and San Mateo Library
VII. TOWN UPDATE
VIII. PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA
Agenda – Hillsborough City Council
Monday, August 11, 2025
This portion of the meeting is reserved for persons wishing to address the City Council on any matter not on the agenda.
Members of the public participating in person are requested to complete a yellow speaker card and submit it to the City Clerk before addressing the City Council. Members of the public may provide comments via the Zoom platform by using the “raise hand” feature or, if calling in by phone, by pressing *9 on the telephone keypad. In response, the Town will unmute the speaker and allow them to speak on any topic for up to three minutes. If there appears to be a large number of speakers, speaking time may be reduced to no less than 2 minutes, at the discretion of the Mayor. Members of the public are limited to one comment at this time. State law prohibits the Council from discussing or acting on non-agenda items, and generally limits the ability of the Council to respond to any public comments made regarding non-agenda items.
IX. ANNOUNCEMENT OF CONFLICT OF INTEREST
This portion of the agenda is for Councilmembers to disclose any conflict of interest related to any item on the agenda. Any Councilmember who has confirmed a conflict of interest or has reason to believe they have a conflict of interest should disclose the conflict for the record and abide by the disqualification requirements contained in FPPC regulations.
X. CONSENT CALENDAR
The Consent Calendar includes routine items which do not require discussion. A Councilmember may remove an item for discussion, and any member of the audience may request a Councilmember to remove an item for discussion. The items are approved in one motion.
1. APPROVE CITY COUNCIL MEETING MINUTES OF JULY 14, 2025
2. MONTHLY CLAIMS: JULY 1 THROUGH JULY 31, 2025
3. RESOLUTION APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH URBAN FUTURES, INC. FOR FINANCIAL CONSULTING SERVICES IN AN AMOUNT NOT TO EXCEED $100,000.00
4. RECEIVE LEGISLATIVE UPDATE
5. FORM AN AD HOC SUBCOMMITTEE OF THE CITY COUNCIL TO REVIEW
REGULATIONS OF COMMERCIAL ACTIVITY IN THE TOWN AND APPOINT TWO
COUNCILMEMBERS TO THE SUBCOMMITTEE
6. RESOLUTION AWARDING TO AND AUTHORIZING THE CITY MANAGER TO
EXECUTE A CONTRACT WITH LVI ENGINEERING FOR THE MACADAMIA ACCESS ROAD REPAIR PROJECT – PHASE 1 (EAST) IN THE AMOUNT OF $982,425.00, WITH A 10% CONTINGENCY IN THE AMOUNT OF $98,242.50, FOR TOTAL COST OF $1,080,667.50, AND APPROVAL OF A BUDGET AMENDMENT, REALLOCATING THE APPROVED FY 2025-26 BUDGET SPENDING FROM THE CAPITAL FUND TO THE SEWER FUND, UNDER CEQA GUIDELINE 15301
7. RESOLUTION APPROVING THE SUMMARY VACATION OF AN UNUSED SEGMENT OF AN EXISTING FIVE-FOOT-WIDE PUBLIC UTILITY EASEMENT AT 259 BRIDGE ROAD, UNDER CEQA GUIDELINE 15301
8. RESOLUTION APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE
AN AMENDMENT TO THE AMENDED AND RESTATED WATER SUPPLY
AGREEMENT BETWEEN THE CITY AND COUNTY OF SAN FRANCISCO AND
WHOLESALE CUSTOMERS IN ALAMEDA COUNTY, SAN MATEO COUNTY, AND SANTA CLARA COUNTY AND UPDATED TIER 2 DROUGHT RESPONSE
IMPLEMENTATION PLAN AND RESOLUTION APPROVING AND ADOPTING THE Agenda – Hillsborough City Council
Monday, August 11, 2025
TIER 2 DROUGHT RESPONSE IMPLEMENTATION PLAN PURSUANT TO SECTION
3.11.C OF THE AMENDED AND RESTATED WATER SUPPLY AGREEMENT, UNDER CEQA GUIDELINE 15301
XI. PUBLIC HEARING
9. RESOLUTION APPROVING A REVOCABLE ENCROACHMENT PERMIT APPLICATION FOR 632 FAIRWAY CIRCLE UNDER CEQA GUIDELINE 15303 XII. NEW BUSINESS
10. INTRODUCTION OF AN ORDINANCE AMENDING SECTION 2.12.070 OF THE
HILLSBOROUGH MUNICIPAL CODE REGARDING AN INCREASE TO THE SQUARE
FOOTAGE OF ADDITIONS AND ACCESSORY STRUCTURES SUBJECT TO DESIGN
REVIEW AND CONSIDERATION BY THE ARCHITECTURE AND DESIGN REVIEW BOARD
11. OVERVIEW OF UPDATES TO THE TOWN OF HILLSBOROUGH SEWER SYSTEM
MANAGEMENT PLAN
XIII. CITY COUNCIL ITEMS
This section of the agenda provides the City Council an opportunity to report their participation in activities related to any intergovernmental committee assignments.
XIV. ADJOURNMENT
SPECIAL ACCOMMODATIONS:
If you need a disability-related modification or accommodation, including auxiliary aids or services, to participate in the City Council meeting, or if you need an agenda in an alternate form, please contact the City Clerk’s Office at 375-7412 at least 24 hours before the scheduled City Council meeting.
ADDRESSING THE CITY COUNCIL:
Members of the public may provide written comments to the City Council regarding any item on the agenda up to two hours before the meeting to [email protected] or by mail/in person at 1600 Floribunda Avenue, Hillsborough, CA 94010. Any writings or documents provided to a majority of the City Council regarding any item on this agenda prior to the deadline, except as exempt from public disclosure under applicable law, will be available for public inspection on the Town website, and in the City Clerk’s Office at 1600 Floribunda Avenue, Hillsborough, CA 94010, during regular business hours. All oral comments made at public meetings, including a speaker’s name, are recorded and included as part of the public record in the meeting minutes. Meeting minutes are publicly accessible via the Town website and via various internet search engines. Written comments, including a commenter’s name, are a public record and subject to disclosure on the Town website and/or upon request under the California Public Records Act (with personal contact information including personal email addresses and personal phone numbers redacted).
AUDIO / VISUAL ADVISORY:
Those persons who wish to use PowerPoint or other mediums when presenting to the City Council will be required to submit media items to the City Clerk by 12:00 p.m. on the day of the meeting. Media items can be emailed to [email protected].
AUDIO OR VIDEO RECORDINGS:
Please be advised that under the Brown Act, any person has the right to record the City Council meeting, including the audience in attendance, using an audio or video recording device subject to certain exceptions. Please be aware that by attending a City Council meeting, you may be audio or video recorded.
TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
A
STUDY SESSION
CITY COUNCIL MEETING
AUGUST 11, 2025
AGENDA STAFF REPORT
ITEM SUBJECT: STUDY SESSION: SOLID WASTE RATE STUDY
SUMMARY: This study session is to review the proposed solid waste rate study. No action is required. Staff request feedback in preparation for the final review of the proposed solid waste rates, as appropriate.
The Town reviews the need for potential solid waste rate increases annually or as needed to ensure that revenues are sufficient to cover the costs of the solid waste function. In 2022, the Town adopted a five-year schedule of increases to maximum authorized rates. The first three years of the rates were implemented at the maximum rates, effective January 2023, 2024, and 2025. Recent projections show the maximum approved rates are insufficient to cover higher than anticipated costs. To cover the cost of services of the solid waste function, a new five-year rate series is recommended and will require Proposition 218 proceedings to adopt the proposed rates.
If adopted, the first year of the rate series would be effective January 2026.
After a competitive selection process, HF&H Consultants (HF&H) were determined to be the most qualified consultants based on their relevant experience in preparing rate studies. HF&H were awarded the contract and have prepared the Draft Solid Waste Rate Study Report that calculated projected rate for a five-year planning period (2026-2030).
Background:
Solid waste, recyclable material, and organic collection services are provided to residential and commercial customers through a franchise agreement with Recology of San Mateo County (Recology), which expires on December 31, 2035.
The Town is a member of Rethink Waste - South Bayside Waste Management Authority Joint Powers Agreement (“Rethink Waste”). Under the agreement, each member agency sets its solid waste rates for residential and commercial customers. Each of the eleven Rethink Waste member jurisdictions has a franchise agreement with Recology of San Mateo County for collection of residential and commercial solid waste, recycling, and green waste. In addition, the Shoreway Environmental Center is owned by Rethink Waste and operated by contract with South Bayside Industries. The Shoreway facility serves as a regional solid waste and recycling facility for receiving, handling, and transferring refuse, recyclable, and organic materials.
The cost for collection and disposal of solid waste, recyclables, and organic materials in a manner that complies with State law is paid through the rates by the customers receiving the services. The City Council approves the rates to be charged for solid waste, recycling, and organics collection sufficient to cover the costs of the program.
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Agenda Staff Report - Hillsborough City Council
August 11, 2025
Analysis:
The total annual revenue requirement for the solid waste and recycling program is calculated based on the following components:
1. Collection Costs (Recology Compensation) – This category includes the costs of solid waste, recyclable, and organic materials collection by Recology, taken to the Shoreway facility for processing, staging, and shipment. The franchise agreement with Recology is a “fixed cost” contract where future costs are adjusted based on contractually approved indices.
2. Disposal and Processing Fees (also known as “tipping fees”) - This category includes the cost of processing at the Shoreway facility, disposal, commodity sales, and organics processing.
3. Franchise Fees - Fees are charged by the Town to Recology for the cost the Town incurs to grant the franchise to Recology, as well as compensation for physical, tangible government property used by Recology to provide solid waste service. Recology has determined to meet this obligation by billing Hillsborough customers directly.
The Balancing Account is used or replenished to ensure stability and a smoothing rate, where applicable.
Cost of Service Study:
HF&H performed a cost of service and rate study (the “study”) for the Town of Hillsborough with projections for the cost of service and revenue requirements for the rate years effective January 2026 through 2030. The study indicates an overall revenue requirement increase ranging from 5% to 6% over the five-year period. The customer rate increases vary based upon the cost of service for the specific service provided. The rate study aligns the rates (based on the size of cart) with the projected cost of service. The cart charges reflect the actual cost of service for each service level (20-gallon cart, 32-gallon cart, etc.)
The Town has judiciously used its positive balancing account to temper rate increases to customers over the past several years and has utilized a combination of rate increases and balancing account to provide stability over the proposed five-year schedule of rate increases.
Spreading rate increases over a five-year period are recommended as it will allow for the planned and orderly implementation of rate adjustments over the term to ensure that the revenue required is met and balances remain at acceptable levels. Projections are reviewed annually to determine if the cost of service is on track with the assumptions made in the rate study.
Process:
The Financial Advisory Committee reviewed the solid waste rate study at its July 29, 2025, meeting and recommends the proposed rate study. The proposed rate changes would be effective starting January 1, 2026. These rate changes cover the revenue requirements and are outlined in the HF&H Draft Solid Waste Rate Study Report.
This agenda item is a Study Session item only to review the draft solid waste rate study. On the September 8th meeting the City Council will review, and if appropriate, accept the HF&H Solid -2-
Agenda Staff Report - Hillsborough City Council
August 11, 2025
Waste Rate Study Report. In addition, the City Council will review, and if appropriate approve the release of the Proposition 218 notice to property owners and direct city staff to mail the notice of the public hearing on the proposed rates and charges. At the November 10th meeting, it is recommended that the City Council consider the adoption of the proposed rate adjustments pursuant to the public hearing and majority protest procedure requirements of Proposition 218.
Proposition 218 requires the Town to hold a public hearing on the proposed rate for the charges and to mail notice of the public hearing to property owners who are directly liable for the payment of solid waste charges not less than 45 days before the public hearing to adopt the rates for the service fees or charges. They are subject to the protest proceeding wherein the adoption of any new or increase in any existing charge cannot be adopted if the Town received written protest to the proposed fees and charges from a majority (50%+1) of the record owners of parcels upon which the charges are proposed for imposition or tenants who are directly liable for the payment of the proposed solid waste charges.
Below are the key dates for review, adoption and implementation of the proposed rates effective January 1, 2026. The process follows Proposition 218 guidelines.
City Council Meeting – Consideration of Approval of 218 process: September 8, 2025 Notice to Rate Payers: September 11, 2025
Public Hearing and Adoption of Resolution: November 10, 2025 City Council Meeting – Adoption of Charges for County Roll: July 2026 FISCAL IMPACT: Solid waste collection service costs in Hillsborough are covered by the solid waste rate paid by residential and commercial accounts. The costs of these services do not impact the Town budget or the General Fund.
ENVIRONMENTAL ISSUES: In accordance with the California Environmental Quality Act (CEQA) and the CEQA Guidelines, the increases in solid waste service charges are exempt from CEQA under Section 15378 and Section 15273 and Public Resources Code Section 21080(b0(8) because (a) the increase charges are for the purpose of meeting operational and maintenance expenses of the aforementioned services and (ii) the charges constitute the creation of a funding mechanism/other governmental fiscal activity which does not involve any commitment to any specific project that may result in potential significant physical impact on the environment.
ATTACHMENTS: HF&H Solid Waste Rate Study Report
PREPARED BY: Jan Cooke, Finance Director
RECOMMENDATION: No action required; the City Council provide feedback to staff on the solid waste rates, as needed.
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Draft Report
THE TOWN OF HILLSBOROUGH
2026 Solid Waste Rate Study
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HF&H Consultants
590 Ygnacio Valley Rd. Suite 105
Walnut Creek, CA 94596
Phone: (925) 977-6950
Web: hfh-consultants.com
July 31, 2025
Jan Cooke
Finance Director
Town of Hillsborough
1600 Floribunda Avenue
Hillsborough, CA 94010
Subject: 2026 Solid Waste Rate Study – Draft Report
Jan Cooke,
HF&H Consultants, LLC (HF&H) is pleased to submit this Cost of Service (COS) draft report to the Town of Hillsborough (Town). The report is organized beginning with determining how much projected revenue is needed from solid waste rates during the next five calendar years (CYs), CY 2026 through CY 2030. The report describes how the collection, processing, and disposal costs are apportioned between residential and commercial customers. The report concludes with a discussion of the rate design that is appropriate for each customer class to ensure that customers are paying their proportionate share. * * * * *
We are pleased to have had the opportunity to assist the Town with this study and would like to thank you for your support during the project.
If you have any questions, please call me at (925) 977-6957.
Sincerely,
HF&H CONSULTANTS, LLC
Rick Simonson
Senior Vice President
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2026 Solid Waste Rate Study
Table of Contents, Figures, and Acronyms
CONTENTS
EXECUTIVE SUMMARY ................................................................1 Annual Revenue Reconciliation/Balancing Account.........................1 Proposition 218.........................................................................2 Study Purpose and Objectives ....................................................2 Findings and Recommendations ..................................................2 Implementation ........................................................................6 SECTION 1. INTRODUCTION.......................................................7 Study Purpose ..........................................................................7 Billing Procedures and Current Rates ...........................................7 Legal Requirements...................................................................8 SECTION 2. REVENUE REQUIREMENT PROJECTIONS ................10 Balancing Account................................................................... 10 Expense Projections ................................................................ 10 Revenue Increases .................................................................. 15 SECTION 3. COST OF SERVICE ANALYSIS.................................16 Methodology........................................................................... 16 2026 Cost-of-Service............................................................... 16 SECTION 4. RATE DESIGN – 2026 COST OF SERVICE................19 Volumetric (Variable) Collection Costs........................................ 19 Fixed Collection Costs .............................................................. 22 Tipping Fees at the Shoreway Environmental Center.................... 23 Cost of Service ....................................................................... 23 Multiple Collections per Week ................................................... 25 Additional Solid Waste Containers ............................................. 26 Total Cost/Rate by Customer Class and Service Level - 1st Container ............................................................................ 26 SECTION 5. PROPOSED RATES .................................................29 -6-
2026 Solid Waste Rate Study
Table of Contents, Figures, and Acronyms
FIGURES
Figure ES-1. Current Rate Revenue Compared with the Cost of Service (2026) ........4 Figure ES-2. Current and Proposed Monthly Residential Rates ................................4 Figure ES-3. Current Monthly Commercial Solid Waste Rates .................................5 Figure ES-4. Proposed Monthly Commercial Solid Waste Rates (2026).....................5 Figure ES-5. Current Monthly Commercial Organics Rates .....................................6 Figure ES-6. Proposed Monthly Commercial Organics Rates (2026).........................6 Figure 1-1. – Current Monthly Residential Rates ...................................................7 Figure 1-2. Current Monthly Commercial Solid Waste Rates ...................................8 Figure 1-3. Current Commercial Organics Rates ...................................................8 Figure 2-1. Balancing Account Summary (2023 - 2025) ......................................10 Figure 2-2. Projected Expenses and Revenue at Current Rates (No Rate Increases) 11 Figure 2-3. Summary of 2026 Revenue Requirement Compensation .....................12 Figure 2-4. Recology’s 2026 Draft Compensation – Residential Services ................13 Figure 2-5. Recology’s 2026 Draft Compensation – Commercial Services ...............13 Figure 2-6. Recology’s 2026 Draft Compensation – Agency Facilities .....................14 Figure 2-7. Summary of Tipping Fees (2025-2030).............................................14 Figure 2-8. Projected Expenses and Revenue at Proposed Revenue Increases ........15 Figure 3-1. 2022 Net Revenue Requirement by Customer Class............................17 Figure 3-2. Current Rate Revenue Compared to Cost of Service ...........................18 Figure 4-1. Full Time Equivalent Route Factors ...................................................19 Figure 4-2. Equivalent Container Factors ...........................................................20 Figure 4-3. Equivalent Container Units ..............................................................21 Figure 4-4A. Solid Waste Variable Route Collection Costs per Month - Residential ...21 Figure 4-4B. Recycling, Organics Variable Route Collection Costs – Residential.......22 Figure 4-5. Solid Waste, Organics Variable Route Collection Costs – Commercial ....22 Figure 4-6. Fixed Cart and Bin Collection Costs ..................................................22 Figure 4-7. Cart and Bin Tipping Fees – Residential.............................................23 Figure 4-8. Cart and Bin Tipping Fees – Commercial ...........................................23 Figure 4-9A. Residential Solid Waste Cost of Service ...........................................24 Figure 4-9B. Residential Recycling Cost of Service ..............................................24 Figure 4-9C. Residential Organics Cost of Service ...............................................24 Figure 4.10A: Commercial Solid Waste Carts Cost of Service................................24 Figure 4.10B: Commercial Solid Waste Bins Cost of Service .................................24 Figure 4.11A: Commercial Organics Carts Cost of Service....................................25 Figure 4.11B: Commercial Organics Bins Cost of Service .....................................25 Figure 4-12. Example of Monthly Rate Calculation ..............................................25 Figure 4-13. Calculation of Monthly Rate – Multiple Containers.............................26 Figure 4-14. Residential Cost-of-Service (2026) and Monthly Rates.......................26 Figure 4-15. Commercial Solid Waste Cost-of-Service (2026) and Monthly Rates ....27 Figure 4-16. Commercial Organics Cost-of-Service (2026) and Monthly Rates ........28 Figure 5-1. Current and Proposed Monthly Residential Rates ................................29 Figure 5-2. Commercial Solid Waste and Recycling Cost-of-Service (2026) and Monthly Rates ..................................................................................................29 Figure 5-3. Commercial Solid Waste and Recycling Cost-of-Service (2027) and Monthly Rates ..................................................................................................30 -7-
2026 Solid Waste Rate Study
Table of Contents, Figures, and Acronyms
Figure 5-4. Commercial Solid Waste and Recycling Cost-of-Service (2028) and Monthly Rates ..................................................................................................30 Figure 5-5. Commercial Solid Waste and Recycling Cost-of-Service (2029) and Monthly Rates ..................................................................................................31 Figure 5-6. Commercial Solid Waste and Recycling Cost-of-Service (2030) and Monthly Rates ..................................................................................................31 Figure 5-7. Commercial Organics Cost-of-Service (2026) and Monthly Rates..........32 Figure 5-8. Commercial Organics Cost-of-Service (2027) and Monthly Rates..........32 Figure 5-9. Commercial Organics Cost-of-Service (2028) and Monthly Rates..........33 Figure 5-10. Commercial Organics Cost-of-Service (2029) and Monthly Rates ........33 Figure 5-11. Commercial Organics Cost-of-Service (2030) and Monthly Rates ........34
ACRONYMS
FY Fiscal Year
COS Cost-of-Service
ECU Equivalent Container Unit
ECF Equivalent Container Factor
Fixed Collection Costs Costs not dependent on the subscribed volume of service.
Frequency Surcharge Additional cost for receiving service multiple times per week. Routing is negatively impacted when trucks must
return to areas previously serviced.
FTE Full time equivalent
MRF Material Recovery Facility
Organics Refers primarily to food, green material, landscape and/or pruning waste.
SEC Shoreway Environmental Center
SFR Single-Family Residential
Volumetric charge Refers to the variable costs associated with the size of the container subscribed to by residential or commercial
customers.
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2026 Solid Waste Rate Study
Table of Contents, Figures, and Acronyms
ACKNOWLEDGEMENTS
City Council
Sophie Cole, Mayor
Leslie Marden Ragsdale, Vice Mayor
Laurie Davies Adams, Councilmember
Marie Chuang, Councilmember
Christine Krolik, Councilmember
Financial Advisory Committee
Charles Adams, Chair
Jeffrey Baxter, Member
Roger Davis, Member
Joel Friedman, Member
Michele Gutierrez, Member
Tom Maloney, Member
Mike Quackenbush Member
D. Paul Regan, Emeritus Advisor
Town Staff
Doug Davis, City Manager
Mandy Brown, Assistant City Manager
Jan Cooke, Finance Director
Rich Santiago, Assistant Finance Director
Best Best & Krieger LLP
Lutfi Kharuf, Partner
HF&H Consultants, LLC
Rick Simonson, Senior Vice President
Gabe Sasser, Project Manager
Sarah Tam, Associate Analyst
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2026 Solid Waste Rate Study
Limitations
LIMITATIONS
This study was prepared solely for the Town of Hillsborough (Town) in accordance with the contract between the Town and HF&H and is not intended for use by any other party for any other purpose.
In preparing this study, HF&H relied on information from the Town’s franchised solid waste hauler, Recology of San Mateo County, which we consider to be accurate and reliable and did not independently verify.
The cost-of-service model and accompanying analyses contain projections of revenues and expenditures based on various assumptions and estimates. While we reviewed these projections with Town staff for reasonableness, actual results of operations will usually differ from projections because events and circumstances do not always occur as expected. Those differences may be significant and materially affect the analyses and findings presented in this report.
Rounding differences caused by stored values in electronic models may exist.
This study addresses relevant laws, regulations, and court decisions but should not be relied upon as legal advice. Questions concerning the interpretation of legal authorities referenced in this study should be referred to a qualified attorney. -10-
2026 Solid Waste Rate Study
Executive Summary
HF&H Consultants, LLC | July 31, 2025 | Page 1 of 34
Executive Summary
The Town is a member of Rethink Waste - South Bayside Waste Management Authority Joint Powers Agreement (Rethink Waste). Under this agreement, each member agency sets its own solid waste rates for residential and commercial customers. Each of the eleven Rethink Waste member jurisdictions has a franchise agreement with Recology of San Mateo County (Recology) for residential and commercial solid waste, residential recycling, and residential green waste collections. The current franchise agreement runs from January 1, 2021, through December 31, 2035. Recology provides service to approximately 3,800 residential accounts and 6 commercial accounts in the Town.
In addition, a contract with South Bayside Industries provides for operations at the Shoreway Environmental Center (SEC), which is owned by Rethink Waste. The Shoreway facility serves as a regional solid waste and recycling facility for the receipt, handling and transfer of refuse, recyclable, and organic materials.
For the annual contractors’ compensation review process, staff reviews the various cost components attributable to its solid waste services, which in turn determines the revenue required from its customers for subsequent rate years. Each member of Rethink Waste is responsible for establishing the rates in their respective jurisdictions. The rates are then applied based on the garbage cart/bin size of the customer and frequency of collection services.
The Town’s residential accounts are billed for services in two ways: 1) a flat $380.16 annual charge on the tax roll (which equates to $31.68/month); and, 2) a monthly charge, billed quarterly, by Recology, based on the size of solid waste container placed for collection (20- gallon, 32-gallon, etc.). Commercial customers are also billed quarterly by Recology based on the size of container placed for collection (32-gallon cart, 1 cubic yard bin, etc.) and the frequency of collection (1 time per week, 2 times per week, etc.) Rates are developed to cover costs for the following components:
• Recology's compensation to collect and deliver materials to the Shoreway Environmental Center
• Tipping (disposal and processing) fees at the SEC
ANNUAL REVENUE RECONCILIATION/BALANCING ACCOUNT
Annually, revenues collected are compared to Recology’s Rethink Waste-approved compensation for services to the Town. If actual revenues collected exceed the approved compensation, the excess revenue is held by Recology in a balancing account. When actual revenues collected are less than Recology’s approved compensation, the Town’s balancing account is decreased. As of December 31, 2024, the Town has a positive balancing account with Recology of $330,727. The balancing account can go negative if sufficient revenues are not collected. At the expiration of the franchise agreement, the Town will owe Recology if the -11-
2026 Solid Waste Rate Study
Executive Summary
HF&H Consultants, LLC | July 31, 2025 | Page 2 of 34
balancing account is negative or Recology will owe the Town if the balancing account is positive.
PROPOSITION 218
To increase rates for these services, the Town intends to comply with article XIII D, section 6 of the California constitution, which was added by Proposition 218 in 1996. Article XIII D, section 6 requires that: (1) revenues derived from fees or charges for property-related services do not exceed the cost to provide service; (2) revenues derived from fees or charges are not be used for any purpose other than that for which it was imposed; (3) the amount of a fee or charge imposed not exceed the proportional cost of the service attributable to the parcel; (4) no fee or charge may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property; and, (5) no fee or charge may be imposed for general governmental services. The analysis conducted in support of this study was conducted in consultation with the Town and its legal counsel.
STUDY PURPOSE AND OBJECTIVES
The purpose of this solid waste rate study is to conduct a comprehensive analysis of the Town’s solid waste rates, including documentation of the analysis, underlying assumptions, and the rationale for the recommended rates.
This study has several key objectives:
• Determine the revenue requirement (expenses) which the Town’s solid waste rates need to cover, including Recology’s compensation, tipping fees and the SEC, while maintaining an adequate balancing account balance with Recology;
• Determine the cost of service attributable to each parcel based upon the type and size of container serving the property and the subscribed service level; and, • Ensure that the proposed rate structure is compatible with Proposition 218 mandates.
These objectives are met by applying industry best practices and by complying with all applicable laws.
FINDINGS AND RECOMMENDATIONS
In preparing this solid waste rate update, the following findings were made. Note that these findings describe the results of the cost-of-service analysis for a five-year period, 2026-2030.
1. Operating Cost Increases.
a. Recology’s draft compensation for 2026 is increasing 1.8%. Recology’s allowable compensation is generally tied to the percentage increases in various consumer price indices (e.g., fuel, labor, vehicle repairs and maintenance) published by the Bureau of Labor Statistics. For 2027-2030, Recology’s compensation has been projected to increase by 4.0% per year. b. Tipping fees for materials collected and hauled to Rethink Waste’s SEC for processing or transfer to another processing facility or landfill, are projected to -12-
2026 Solid Waste Rate Study
Executive Summary
HF&H Consultants, LLC | July 31, 2025 | Page 3 of 34
increase by 5% in 2026. For 2027-2030, tipping fee expenses have been projected to increase by 5.0% per year, which is the combination of additional volume and anticipated costs increases to handle materials at the SEC.
2. Prior Year Revenue Shortfall. A review of current year-to-date revenue collected through May 2025 indicates that total allowable expenses will exceed rate revenue by approximately $163,709, an approximate 3.7% shortfall.
3. Projected Revenue Increases Needed. The cost-of-service (COS) study projects the rate increases needed to generate additional overall revenue to cover: 1) the recent cost increases and 2) the prior year revenue shortfall. Comparing the revenue required to cover the cost of providing service with the revenue from current rates indicates the need for rate increases sufficient to generate additional revenue, as follows:
2026 –6%*
2027 – 6%
2028 – 5%
2029 – 5%
2030 – 5%
The increases are lower than otherwise needed, as the Town currently has a positive balance in their balancing account with Recology. The increases reflect drawing the balancing account down by approximately $124,200 (to $206,520) over the five-year period. How the balancing account was established and how it is adjusted annually, is discussed in more detail in Section 2 of this report.
*The percentage increase in revenue needed for 2026 is not applied uniformly to all current rates. A cost-of-service analysis was done (see Section 4 of this report) to apportion costs to each customer class and service level within each of those customer classes. As a result, some service level rates will increase, and some will decrease.
4. 2026 Revenue Increases by Customer Class. Customer classes for the purpose of this study are residential and commercial. Figure ES-1 compares the revenue from current rates with the COS for 2026. This figure indicates how much revenue is needed from residential rates and commercial rates, respectively, to generate the 6% additional overall revenue needed in 2026. The percentage changes in revenue necessary for 2026 differ by the level of service provided (20-gallon cart, 32-gallon cart, 64-gallon cart, 1 cubic yard bin, etc.).
Historically, the Town has provided a discount to commercial organics rates to incentivize participation and reduce recyclable material entering the landfill. This has resulted in commercial organics rates being set at 50% of the commercial solid waste rates. With the passage of Senate Bill 1383, subscription to organics collection is required for commercial customers and therefore, it is recommended to immediately end the commercial organics rates discount.
The cost of service figure shows the costs specific to commercial organics service that have been factored into rate setting for 2026 such that all levels of service would meet -13-
2026 Solid Waste Rate Study
Executive Summary
HF&H Consultants, LLC | July 31, 2025 | Page 4 of 34
their cost of service. With commercial organics revenues meeting the cost of service, commercial solid waste rates would decrease slightly to realign to the cost of service.
Figure ES-1. Current Rate Revenue Compared with the Cost of Service (2026)
5. Current and Proposed Residential Rates. Based on the cost-of-service analysis (described in detail in Section 4 of this report), which apportions the cost to each level of service, the monthly charge in rates differs depending on container size.
Figure ES-2 compares the current and proposed residential rates by service level. A breakdown of the proposed rates is included in Section 4, Figure 4-14. Current and proposed rates include weekly solid waste, recycling, and organics collection services.
Figure ES-2. Current and Proposed Monthly Residential Rates
6. Current and Proposed Commercial Rates. Based on the cost-of-service analysis (described in detail in Section 4 of this report), which apportions the cost to service commercial customers to each level of service, the percentage change in rates differs by level of service. Figures ES-3 and Figure ES-4 summarize the current and 2026 proposed commercial solid waste rates by service level. Figure ES-5 and Figure ES6 summarize the current and 2026 proposed commercial organics collection rates by service level. To minimize the length of the Executive Summary, the respective proposed commercial rates for 2027-2030 are included in Section 5. Current and Revenue at 2026 Difference
Customer Class Current Rates Cost-of-Service $ %
Residential $4,062,343 $4,297,420 $235,077 5.8%
Commercial
Solid Waste/Recycling $92,302 $90,623 ($1,679) -1.8%
Organics $12,233 $29,089 $16,856 137.8%
Commercial Total $104,535 $119,712 $15,177 14.5%
Grand Total $4,166,878 $4,417,132 $250,254 6.0%
Residential Current 2026 2026 2027 2028 2029 2030
Monthly Rates Rates Rates Change Rates Rates Rates Rates Annual % Increase: varies 6.0% 5.0% 5.0% 5.0%
Flat fee per Parcel $31.68 $33.52 $1.84 $35.53 $37.31 $39.18 $41.14 Service Level
20-Gallon Cart $31.95 $35.30 $3.35 $37.42 $39.29 $41.25 $43.31 32-Gallon Cart $39.01 $41.62 $2.61 $44.12 $46.33 $48.65 $51.08 64-Gallon Cart $60.61 $63.36 $2.75 $67.17 $70.53 $74.06 $77.76 96-Gallon Cart $88.43 $91.76 $3.33 $97.26 $102.12 $107.23 $112.59 Extra Organics Cart $27.04 $27.04 $0.00 $27.04 $27.04 $27.04 $27.04 -14-
2026 Solid Waste Rate Study
Executive Summary
HF&H Consultants, LLC | July 31, 2025 | Page 5 of 34
proposed solid waste rates include weekly solid waste and recycling collection services. (as shown in Figure ES-1).
Figure ES-3. Current Monthly Commercial Solid Waste Rates Figure ES-4. Proposed Monthly Commercial Solid Waste Rates (2026) Proposed commercial organics rates reflect the cost of service. Consequently, rates must increase significantly from current values to account for the 137.8% increase in commercial organics revenues necessary to obtain the cost of service, as previously shown in Figure ES-1.
Container Size 1/week 2/week 3/week 4/week 5/week 6/week 32 Gallons $57.99 $86.89 $115.79 $144.69 $173.59 $202.49 64 Gallons $73.03 $116.98 $160.93 $204.87 $248.82 $292.76 96 Gallons $87.33 $145.58 $203.83 $262.07 $320.32 $378.57 1 CY $144.11 $269.35 $394.60 $519.85 $645.10 $770.35
2 CY $271.98 $525.11 $778.24 $1,031.36 $1,284.49 $1,537.61 3 CY $442.17 $865.48 $1,288.78 $1,712.09 $2,135.40 $2,558.71 6 CY $1,121.94 $2,225.02 $3,328.10 $4,431.18 $5,534.27 $6,637.35 Additional Container
32 Gallons $13.90 $42.80 $71.70 $100.60 $129.50 $158.40 64 Gallons $29.03 $72.98 $116.92 $160.87 $204.82 $248.76 96 Gallons $43.39 $101.63 $159.88 $218.13 $276.37 $334.62 1 CY $106.31 $231.56 $356.81 $482.05 $607.30 $732.55
2 CY $235.29 $488.42 $741.55 $994.67 $1,247.80 $1,500.92 3 CY $406.58 $829.89 $1,253.20 $1,676.51 $2,099.82 $2,523.13 6 CY $1,090.78 $2,193.86 $3,296.94 $4,400.02 $5,503.11 $6,606.19 Frequency
Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $60.71 $88.71 $116.71 $144.72 $172.72 $200.72 64 Gallons $74.94 $117.17 $159.40 $201.63 $243.86 $286.08 96 Gallons $89.13 $145.55 $201.98 $258.40 $314.82 $371.25 1 CY $144.40 $265.29 $386.18 $507.07 $627.95 $748.84
2 CY $276.06 $528.60 $781.14 $1,033.68 $1,286.23 $1,538.77 3 CY $438.22 $852.93 $1,267.64 $1,682.35 $2,097.05 $2,511.76 6 CY $1,093.44 $2,163.37 $3,233.29 $4,303.22 $5,373.14 $6,443.07 Additional Container
32 Gallons $14.59 $42.60 $70.60 $98.60 $126.60 $154.60
64 Gallons $28.89 $71.12 $113.35 $155.58 $197.81 $240.03 96 Gallons $43.15 $99.57 $155.99 $212.42 $268.84 $325.26 1 CY $102.49 $223.37 $344.26 $465.15 $586.04 $706.93
2 CY $234.81 $487.35 $739.89 $992.43 $1,244.98 $1,497.52 3 CY $397.56 $812.26 $1,226.97 $1,641.68 $2,056.39 $2,471.09 6 CY $1,055.27 $2,125.20 $3,195.12 $4,265.05 $5,334.98 $6,404.90 Frequency
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2026 Solid Waste Rate Study
Executive Summary
HF&H Consultants, LLC | July 31, 2025 | Page 6 of 34
Figure ES-5. Current Monthly Commercial Organics Rates
Figure ES-6. Proposed Monthly Commercial Organics Rates (2026)
IMPLEMENTATION
After increasing rates effective January 1, 2026, the Town should monitor its rates before implementing subsequent rate increases. There are future events that will impact the Town’s solid waste operations.
In addition, Rethink Waste is contemplating capital improvement projects to support the Shoreway Environmental Center. The cost impacts to tipping fees are unknown at this time and will affect the proposed rates for 2026-2030 presented above.
Container Size 1/week 2/week 3/week 4/week 5/week 6/week 32 Gallons $28.99 $43.44 $57.90 $72.35 $86.80 $101.25
64 Gallons $36.52 $58.49 $80.46 $102.44 $124.41 $146.38 96 Gallons $43.67 $72.79 $101.91 $131.04 $160.16 $189.28 1 CY $72.05 $134.68 $197.30 $259.93 $322.55 $385.17
2 CY $135.99 $262.55 $389.12 $515.68 $642.24 $768.81
3 CY $221.08 $432.74 $644.39 $856.05 $1,067.70 $1,279.36 6 CY $560.97 $1,112.51 $1,664.05 $2,215.59 $2,767.13 $3,318.67 Additional Container
32 Gallons $6.95 $21.40 $35.85 $50.30 $64.75 $79.20
64 Gallons $14.52 $36.49 $58.46 $80.44 $102.41 $124.38
96 Gallons $21.69 $50.82 $79.94 $109.06 $138.19 $167.31 1 CY $53.16 $115.78 $178.40 $241.03 $303.65 $366.28
2 CY $117.65 $244.21 $370.77 $497.34 $623.90 $750.46
3 CY $203.29 $414.95 $626.60 $838.25 $1,049.91 $1,261.56 6 CY $545.39 $1,096.93 $1,648.47 $2,200.01 $2,751.55 $3,303.09 Frequency
Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $65.93 $99.16 $132.38 $165.61 $198.83 $232.06 64 Gallons $85.38 $138.06 $190.73 $243.41 $296.08 $348.76 96 Gallons $104.80 $176.89 $248.98 $321.08 $393.17 $465.26 1 CY $177.37 $331.23 $485.09 $638.95 $792.80 $946.66
2 CY $342.00 $660.48 $978.96 $1,297.44 $1,615.92 $1,934.41 3 CY $537.13 $1,050.75 $1,564.37 $2,077.98 $2,591.60 $3,105.22 6 CY $1,291.26 $2,559.00 $3,826.75 $5,094.49 $6,362.24 $7,629.99 Additional Container
32 Gallons $19.82 $53.04 $86.27 $119.49 $152.72 $185.94 64 Gallons $39.33 $92.01 $144.68 $197.36 $250.04 $302.71 96 Gallons $58.82 $130.91 $203.00 $275.09 $347.19 $419.28 1 CY $135.46 $289.31 $443.17 $597.03 $750.89 $904.74
2 CY $300.75 $619.23 $937.71 $1,256.19 $1,574.67 $1,893.16 3 CY $496.47 $1,010.08 $1,523.70 $2,037.32 $2,550.94 $3,064.55 6 CY $1,253.09 $2,520.84 $3,788.58 $5,056.33 $6,324.07 $7,591.82 Frequency
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2026 Solid Waste Rate Study
Section 1. Introduction
HF&H Consultants, LLC | July 31, 2025 | Page 7 of 34
Section 1. Introduction
The Town’s franchised hauler, Recology, provides solid waste, recyclable material, and organics collection services to all residents and businesses in Town In 2025, the Town requested HF&H to develop a cost-of-service rate model and rate structure based on the level of service received by each customer class. The purpose of this report is to document the analysis and summarize our assumptions, findings, and recommendations.
STUDY PURPOSE
The main purpose of this report is to document that the proposed rates comply with the relevant laws in California for setting solid waste rates. Another key purpose is to ensure that the rates generate sufficient revenue to fund the solid waste, recyclable material, and organics collection, processing, and disposal activities over the five-year planning period (2026-2030) operating and capital costs as well as to maintain adequate reserves.
BILLING PROCEDURES AND CURRENT RATES
Residents are billed for weekly collection of solid waste, recyclable material, and organics carts in two ways: 1) a flat $380.16 annual charge on the tax roll (which equates to $31.68/month); and, 2) a monthly charge, billed quarterly by Recology, based on the size of solid waste container placed for collection (20-gallon, 32-gallon, etc.) and the frequency of service.
Commercial customers are also billed quarterly by Recology, based on the size of solid waste and organics material containers placed for collection (1 cubic yard bin, 2 cubic yard bin, etc.) and how frequently it is collected (1x per week, 2x per week, etc.).
The current rates are summarized in Figure 1-1 through Figure 1-3. The amount billed on the tax roll for residential customers is an annual lump sum amount of $380.16. For analysis of monthly rates, it is reflected in Figure 1-1 as a $31.68 per month rate.
Figure 1-1. – Current Monthly Residential Rates
Residential Billed Billed Total
Monthly Rates by Recology on Tax Roll Charge
Solid Waste Subscription
20-Gallon Cart $31.95 $31.68 $63.63
32-Gallon Cart $39.01 $31.68 $70.69
64-Gallon Cart $60.61 $31.68 $92.29
96-Gallon Cart $88.43 $31.68 $120.11
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2026 Solid Waste Rate Study
Section 1. Introduction
HF&H Consultants, LLC | July 31, 2025 | Page 8 of 34
Figure 1-2. Current Monthly Commercial Solid Waste Rates Figure 1-3. Current Commercial Organics Rates
LEGAL REQUIREMENTS
The Town is responsible for setting rates in compliance with California law. Voters passed Proposition 218 in November 1996, which added article XIII D to the California constitution.
Article XIII D section 6(b)(1-5) has five substantive requirements that must be met:
1. Revenue from rates must not exceed the cost of providing service.
2. Revenue from rates must be used for providing service.
3. Fees and charges imposed must be proportional to the cost of providing the service attributable to the parcel.
Container Size 1/week 2/week 3/week 4/week 5/week 6/week 32 Gallons $57.99 $86.89 $115.79 $144.69 $173.59 $202.49 64 Gallons $73.03 $116.98 $160.93 $204.87 $248.82 $292.76 96 Gallons $87.33 $145.58 $203.83 $262.07 $320.32 $378.57 1 CY $144.11 $269.35 $394.60 $519.85 $645.10 $770.35
2 CY $271.98 $525.11 $778.24 $1,031.36 $1,284.49 $1,537.61 3 CY $442.17 $865.48 $1,288.78 $1,712.09 $2,135.40 $2,558.71 6 CY $1,121.94 $2,225.02 $3,328.10 $4,431.18 $5,534.27 $6,637.35 Additional Container
32 Gallons $13.90 $42.80 $71.70 $100.60 $129.50 $158.40 64 Gallons $29.03 $72.98 $116.92 $160.87 $204.82 $248.76 96 Gallons $43.39 $101.63 $159.88 $218.13 $276.37 $334.62 1 CY $106.31 $231.56 $356.81 $482.05 $607.30 $732.55
2 CY $235.29 $488.42 $741.55 $994.67 $1,247.80 $1,500.92 3 CY $406.58 $829.89 $1,253.20 $1,676.51 $2,099.82 $2,523.13 6 CY $1,090.78 $2,193.86 $3,296.94 $4,400.02 $5,503.11 $6,606.19 Frequency
Container Size 1/week 2/week 3/week 4/week 5/week 6/week 32 Gallons $28.99 $43.44 $57.90 $72.35 $86.80 $101.25
64 Gallons $36.52 $58.49 $80.46 $102.44 $124.41 $146.38 96 Gallons $43.67 $72.79 $101.91 $131.04 $160.16 $189.28 1 CY $72.05 $134.68 $197.30 $259.93 $322.55 $385.17
2 CY $135.99 $262.55 $389.12 $515.68 $642.24 $768.81
3 CY $221.08 $432.74 $644.39 $856.05 $1,067.70 $1,279.36 6 CY $560.97 $1,112.51 $1,664.05 $2,215.59 $2,767.13 $3,318.67 Additional Container
32 Gallons $6.95 $21.40 $35.85 $50.30 $64.75 $79.20
64 Gallons $14.52 $36.49 $58.46 $80.44 $102.41 $124.38
96 Gallons $21.69 $50.82 $79.94 $109.06 $138.19 $167.31 1 CY $53.16 $115.78 $178.40 $241.03 $303.65 $366.28
2 CY $117.65 $244.21 $370.77 $497.34 $623.90 $750.46
3 CY $203.29 $414.95 $626.60 $838.25 $1,049.91 $1,261.56 6 CY $545.39 $1,096.93 $1,648.47 $2,200.01 $2,751.55 $3,303.09 Frequency
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2026 Solid Waste Rate Study
Section 1. Introduction
HF&H Consultants, LLC | July 31, 2025 | Page 9 of 34
4. Fee or charge may not be imposed for a service unless that service is used by, or immediately available to, the owner of the property.
5. No fee or charge may be imposed for general governmental services.
The basis for setting rates that are proportional to the cost of providing service was not prescribed in article XIIID; therefore, the analyst was responsible for meeting the requirements of Sections 6(b) 1-5.
We interpret these requirements to mean that rates must be proportionate to the COS across the range of subscribed service. We further interpret it to mean that the rates for each level of service must correlate with the actual demand that customers place on the collection vehicles and for which the system must be designed to provide the level of service customers require.
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2026 Solid Waste Rate Study
Section 2. Revenue Requirement Projections
HF&H Consultants, LLC | July 31, 2025 | Page 10 of 34
Section 2. Revenue Requirement Projections
To determine whether additional rate revenue is required, projected operating expenses are compared with projected revenue from current rates. Rates are then increased so that projected expenses are covered.
BALANCING ACCOUNT
The franchise agreement with Recology includes an annual revenue reconciliation process where actual revenues billed are compared to Recology’s approved compensation. If there is a positive balancing account, the Town may keep rates flat or increase rates at a lower than necessary level, which draws down the balancing account. Excess revenues are accumulated and tracked by Recology on an annual basis and audited by Rethink Waste. If revenues are less than the approved compensation, the balancing account is reduced. The Town currently has a positive balancing account with Recology at $330,727 (as of December 31, 2024). Yearto-date projections for 2025 indicate that revenues will fall short of Recology’s approved compensation, resulting in a projected balancing account of $167,018 by December 31, 2025, as shown in the bottom row of Figure 2-1. This balancing account is available to keep future rate increases lower than they otherwise would need to be or cover unexpected cost increases that were not known at the time rates were set.
Figure 2-1. Balancing Account Summary (2023 - 2025)
EXPENSE PROJECTIONS
Rates are developed to cover costs for the following projected expenses over the five-year planning period: Recology’s approved collection compensation, including amounts collected for Recology to meet its obligation to pay the Town its franchise fee, as well as tipping fees at the SEC. Projected costs from 2026 through 2030 are summarized in Figure 2-2, Rows 9- 11).
In addition, Figure 2-2 summarizes the current revenue at current rates for the five-year period if rates remained the same. This illustrates the effect on the Town’s balancing account with Recology if rates were not changed during the next five-year planning period. With no 2023 2024 2025
Actual Actual Projected
Total Revenue (after rate adjustments) $3,885,144 $4,110,847 $4,274,475 Expenses
Recology Collection Costs $2,222,343 $2,345,635 $2,418,012 Disposal & Processing Fees $1,298,144 $1,522,314 $1,628,923 Agency Franchise & Other Fees $353,195 $373,680 $391,248 l Expenses $3,873,682 $4,241,629 $4,438,183
Surplus / (Shortfall) After Rate Increase $9,871 ($138,838) ($163,709) Balancing Acct. (Proj. Year-End Balance) $469,565 $330,727 $167,018 -20-
2026 Solid Waste Rate Study
Section 2. Revenue Requirement Projections
HF&H Consultants, LLC | July 31, 2025 | Page 11 of 34
rate increases, the balancing account is projected to be depleted by year-end 2026. A summary of expense projections follows Figure 2-2. The next subsection of this report discusses the necessary annual revenue increases to bridge the revenue shortfall, as compared to existing revenues.
Figure 2-2. Projected Expenses and Revenue at Current Rates (No Rate Adjustments)
Recology's annual collection compensation (Row 9 in Figure 2-2) was calculated in accordance with the Franchise Agreement with the Town. Recology’s 2026 compensation calculation has been reviewed and is currently being audited by Rethink Waste. A summary of Recology’s 2026 compensation by customer class is provided in Figure 2-3 and further details are provided in Figure 2-4 through Figure 2-6. Costs are projected to increase by
4.0% per year for financial planning purposes, which is in line with the historical trend.
Franchise fees are levied by the Town on Recology pursuant to the Franchise Agreement.
The franchise fee is an obligation of Recology utilities paid out of the total amount imposed on ratepayers. (Row 11 in Figure 2-2). Franchise fees are calculated as ten percent of net revenues collected by Recology. The fees account for Town staff time and various legal, financial, and printing services to cover franchise related programs and governance.
Tipping (disposal and processing) fees at the Shoreway Environmental Center (SEC) (Row 10 in Figure 2-2). 2026 tipping fees are estimated by Rethink Waste based on projected volumes collected within the Town and the approved per-ton tip charges by material type. A summary of Rethink Waste’s 2026 projections, by customer class, is provided in Figure 2-7.
Costs are projected to increase by 5.0% per year for financial planning purposes, based on discussions with Rethink Waste.
Figure 2-3 reports a summary of the three cost components of the revenue requirement.
Note, franchise fees in this figure account for an increase to revenues, as an increase in 2025 05 2026 2027 2028 2029 2030
Estimated
06 Projected
0 Projected
08 Projected
09 Projected
030
Projected
1 2 Base Charge Revenue - Recology (res) $2,620,212 $2,620,212 $2,620,212 $2,620,212 $2,620,212 $2,620,212 3 Base Charge Revenue - Tax Roll (res) $1,452,703 $1,484,670 $1,484,670 $1,484,670 $1,484,670 $1,484,670 4 Subtotal - Residential Revenue $4,072,916 $4,104,882 $4,104,882 $4,104,882 $4,104,882 $4,104,882 5 Base Charge Revenue - Recology (comm) $104,535 $104,535 $104,535 $104,535 $104,535 $104,535 6 Subtotal - Base Charge Revenue $4,177,451 $4,209,417 $4,209,417 $4,209,417 $4,209,417 $4,209,417 7 Sch Q "Extras" Rev. (i.e., backyard srvc) 97,024 $97,024 $97,024 $97,024 $97,024 $97,024 8 Total Current Revenue (No Rate Adjustments) $4,274,475 $4,306,441 $4,306,441 $4,306,441 $4,306,441 $4,306,441 Expenses
9 Recology Collection Costs (incl. Schedule Q) $2,418,012 $2,461,783 $2,558,241 $2,658,558 $2,762,888 $2,871,390 10 Disposal & Processing Fees $1,628,923 $1,710,369 $1,795,887 $1,885,682 $1,979,966 $2,078,964 11 Agency Franchise & Other Fees $391,248 $394,242 $394,242 $394,242 $394,242 $394,242 12 Total Expenses $4,438,183 $4,566,394 $4,748,371 $4,938,482 $5,137,096 $5,344,597 13 Surplus / (Shortfall) After Rate Increase ($163,709) ($259,953) ($441,930) ($632,041) ($830,655) ($1,038,156) 14 Balancing Acct. (Proj. Year-End Balance) $167,018 ($92,935) ($534,865) ($1,166,906) ($1,997,560) ($3,035,716) Current Revenue at Current Rates
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2026 Solid Waste Rate Study
Section 2. Revenue Requirement Projections
HF&H Consultants, LLC | July 31, 2025 | Page 12 of 34
revenues collected leads to an increase in fees paid. Thus, the franchise fees values refer to Figure 2-8, which includes revenue increases.
Figure 2-3. Summary of 2026 Revenue Requirement Compensation Rounding due to stored values may exist
1 Allocated based on percentage share of total number of accounts 2 Source: Figure 2-4 3 Source: Figure 2-5 4 Source: Figure 2-6 5 Revenue billed by Recology for non-base services which does not come from base rates. 6 Source: Figure 2-7 7 Source: Figure 2-8 Customer Direct Town
Class Costs Facilities¹ 2026 Total
Collection Compensation - Base Services
Residential $2,333,028 2 $13,489 $2,346,517
Commercial $66,679 3 $35 $66,714
Total $2,399,707 $13,524 4 $2,413,231
Plus: Recology Sch Q rate revenue for extra services5 $48,552 $2,461,783
Disposal & Processing Fees6
Residential $1,591,065 $75,834 $1,666,899
Commercial $43,273 $197 $43,470
Total $1,634,338 $76,031 $1,710,369
Agency Franchise & Other Fees7
Residential $402,288 $0 $402,288
Commercial $11,437 $0 $11,437
Total $413,725 $0 $413,725
Total Recology Compensation by Customer Class
Residential $4,326,382 $89,322 $4,415,704
Commercial $121,389 $232 $121,621
Total $4,447,771 $89,555 $4,537,326
Plus: Recology Sch Q rate revenue for extra services 48,552 Total Revenue Requirement $4,585,878
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2026 Solid Waste Rate Study
Section 2. Revenue Requirement Projections
HF&H Consultants, LLC | July 31, 2025 | Page 13 of 34
Figure 2-4. Recology’s 2026 Draft Compensation – Residential Services Figure 2-5. Recology’s 2026 Draft Compensation – Commercial Services Targeted Two On-Call
S g e
Family
Solid Recyclable Organic Collection Dwelling
Cost Category Waste Materials Materials Events Total
Annual Cost of Operations
Total Direct Labor Related-Costs $404,645 $359,856 $350,002 $59,904 $1,174,407 Direct Fuel Costs $37,242 $39,241 $39,337 $2,369 $118,189 Other Direct Costs $36,066 $38,002 $38,570 $2,646 $115,284 Depreciation for Collection Equipment $43,818 $42,982 $53,009 $2,033 $141,842 Total Allocated Indirect Costs excluding Depreciation and Interest $163,710 $171,538 $186,485 $4,023 $525,756 Total Allocated Indirect Depreciation Costs (Form 9) $1,207 $1,297 $1,564 $24 $4,092 Annual Implementation Cost Amortization (Form A) $0 $0 $0 $0 $0 Total Annual Cost of Operations $686,688 $652,916 $668,967 $70,999 $2,079,570 Profit (insert Operating Ratio below) $72,083 $68,538 $70,223 $7,453 $218,297
0.905
Total Proposed Costs before Pass-Through Cost Allocation $758,771 $721,454 $739,190 $78,452 $2,297,867 Total Contractor Pass-Through Costs $10,873 $10,664 $13,145 $479 $35,161 TOTAL BASE CONTRACTOR'S COMPENSATION $769,644 $732,118 $752,335 $78,931 $2,333,028 Targeted Two On-Call Multi Family &
Solid Recyclable Organic Drop Collection Commercial
Cost Category Waste Materials Materials Box Events Total Annual Cost of Operations
Total Direct Labor Related-Costs $11,602 $1,422 $9,010 $0 $9,411 $31,445 Direct Fuel Costs $1,160 $130 $1,152 $0 $879 $3,321
Other Direct Costs $1,182 $154 $1,025 $0 $845 $3,206
Depreciation for Collection Equipment $610 $238 $1,691 $0 $656 $3,195 Total Allocated Indirect Costs excluding Depreciation and Interest $1,879 $1,289 $12,933 $0 $1,654 $17,755 Total Allocated Indirect Depreciation Costs (Form 9) $16 $7 $139 $0 $10 $172 Annual Implementation Cost Amortization (Form A) $0 $0 $0 $0 $0 $0 Total Annual Cost of Operations $16,449 $3,240 $25,950 $0 $13,455 $59,094 Profit (insert Operating Ratio below) $1,727 $340 $2,724 $0 $1,412 $6,203
0.905
Total Proposed Costs before Pass-Through Cost Allocation $18,176 $3,580 $28,674 $0 $14,867 $65,297 Total Contractor Pass-Through Costs $270 $91 $721 $0 $300 $1,382 TOTAL BASE CONTRACTOR'S COMPENSATION $18,446 $3,671 $29,395 $0 $15,167 $66,679 -23-
2026 Solid Waste Rate Study
Section 2. Revenue Requirement Projections
HF&H Consultants, LLC | July 31, 2025 | Page 14 of 34
Figure 2-6. Recology’s 2026 Draft Compensation – Agency Facilities Figure 2-7. Summary of Tipping Fees (2025-2030)
Source: 2026 tip fee and tonnage projections reflect tonnages reported in the 2024 Recology Annual Report.
Subsequent tip fees were projected by HF&H based on Rethink Waste input.
Cart & Bin Cart & Bin Cart & Bin Venues Agency
Solid Recyclable Organic Drop and Facilities
Cost Category Waste Materials Materials Box Events Total Annual Cost of Operations
Total Direct Labor Related-Costs $115 $389 $711 $3,038 $139 $4,392 Direct Fuel Costs $12 $40 $73 $313 $15 $453
Other Direct Costs $16 $56 $102 $435 $21 $630
Depreciation for Collection Equipment $16 $78 $169 $778 $28 $1,069 Total Allocated Indirect Costs excluding Depreciation and Interest $77 $314 $693 $3,543 $805 $5,432 Total Allocated Indirect Depreciation Costs (Form 9) $1 $3 $6 $28 $1 $39 Annual Implementation Cost Amortization (Form A) $0 $0 $0 $0 $0 $0 Total Annual Cost of Operations $237 $880 $1,754 $8,135 $1,009 $12,015 Profit (insert Operating Ratio below) $25 $92 $184 $854 $106 $1,261
0.905
Total Proposed Costs before Pass-Through Cost Allocation $262 $972 $1,938 $8,989 $1,115 $13,276 Total Contractor Pass-Through Costs $4 $18 $39 $180 $7 $248 TOTAL BASE CONTRACTOR'S COMPENSATION $266 $990 $1,977 $9,169 $1,122 $13,524 Projected
Tip Fee Expense Projections 2025 2026 2027 2028 2029 2030 Per-Ton Tip Fees
Solid Waste $176.55 $185.38 $194.65 $204.38 $214.60 $225.33 Organics $190.46 $199.98 $209.98 $220.48 $231.51 $243.08 Agency C&D - Self-haul $186.00 $195.30 $205.07 $215.32 $226.08 $237.39 Tons
Residential
Solid Waste 2,653 2,653 2,653 2,653 2,653 2,653
Organics 5,497 5,497 5,497 5,497 5,497 5,497
Total Residential 8,150 8,150 8,150 8,150 8,150 8,150
Commercial
Solid Waste 165 165 165 165 165 165
Organics 63 63 63 63 63 63
Total Commercial 228 228 228 228 228 228
Agency
Solid Waste 227 227 227 227 227 227
Organics 168 168 168 168 168 168
Agency C&D - Self-haul 2 2 2 2 2 2
Total Agency 397 397 397 397 397 397
Total Tip Fee Expenses
Residential
Solid Waste $468,334 $491,751 $516,338 $542,155 $569,263 $597,726 Organics $1,046,966 $1,099,315 $1,154,280 $1,211,994 $1,272,594 $1,336,224 Total Residential $1,515,300 $1,591,065 $1,670,619 $1,754,150 $1,841,857 $1,933,950 Commercial
Solid Waste $29,201 $30,661 $32,195 $33,804 $35,494 $37,269 Organics $12,011 $12,611 $13,242 $13,904 $14,599 $15,329 Total Commercial $41,212 $43,273 $45,436 $47,708 $50,094 $52,598 Agency
Solid Waste - Coll Route $40,096 $42,101 $44,206 $46,416 $48,737 $51,174 Organics - Coll Route $32,019 $33,620 $35,301 $37,066 $38,919 $40,865 Agency C&D - Self-haul $296 $310 $326 $342 $359 $377
Total Agency $72,410 $76,031 $79,832 $83,824 $88,015 $92,416 Grand Total Tip Fees $1,628,923 $1,710,369 $1,795,887 $1,885,682 $1,979,966 $2,078,964 -24-
2026 Solid Waste Rate Study
Section 2. Revenue Requirement Projections
HF&H Consultants, LLC | July 31, 2025 | Page 15 of 34
REVENUE INCREASES
Working with staff, proposed revenue increases were derived to cover the cost of providing service to property within the Town (Rows 2, 3, and 5 of Figure 2-8). Figure 2-8 summarizes the projected revenue from proposed rate increases, annual revenue requirements, and the projected year-end balancing account balance by 2026. The revenue projections assume the full cost-of-service rate increases are implemented to meet the current year revenue requirement.
The revenue increase strategy was to utilize a small portion of the balancing account each year to reduce the necessary rate increase (see Row 13 of Figure 2-8). The portion of the balancing account used to keep rate increases lower than necessary, was reduced each year until 2028 when revenues would slightly exceed expenses to keep from drawing the balancing account any lower. This strategy allows the Town to avoid a rate spike necessary to meet the Town’s updated cost of service, while also keeping a reasonable balancing account balance in case of higher than expected cost increases in the future. The proposed annual revenue increases are shown in Row 6 of Figure 2-8. These annual revenue increases can be achieved by increasing Recology’s base rates by the percentages shown on Rows 2, 3, and 5).
The 2026 base revenue increase, on Row 6, of 5.7% is a net increase; whereas, residential revenue and commercial revenue will increase by specific factors, as rates are being restructured to align with the cost to provide service. The COS calculations are presented in the next section of this report.
In years when rates are not being restructured to align with the cost of service (all years except 2026), residential and commercial rates would normally be increased by the percentages shown above. For example, the 6.0% revenue increase for 2027 (see Row 6 of Figure 2-8) would be achieved with a 6.0% across-the-board increase to all commercial rates and a 6.0% increase to residential rates. This same calculation is done for 2028-2030 to assure the total residential and commercial rate revenues increase by the same percentage change, so that neither customer class is subsidizing the other. the current rates at the various subscription levels.
Figure 2-8. Projected Expenses and Revenue at Proposed Revenue Increases 2025
Estimated
2026
Projected
2027
Projected
2028
Projected
2029
Projected
2030
Projected
2026
vs
2025
%
2027
vs
2026
%
2028
vs
2027
%
2029
vs
2028
%
2030
vs
2029
%
1 $4,110,847 $4,274,475 $4,514,466 $4,779,513 $5,021,506 $5,267,730 2 Base Charge Revenue - Recology (res) $2,620,212 $2,777,425 $2,944,071 $3,091,274 $3,245,838 $3,408,130 6.0% 6.0% 5.0% 5.0% 5.0% 3 Base Charge Revenue - Tax Roll (res) $1,452,703 $1,529,210 $1,620,962 $1,709,879 $1,795,373 $1,885,142 6.0% 6.0% 5.0% 5.0% 5.0% 4 Subtotal - Residential Revenue $4,072,916 $4,306,635 $4,565,033 $4,801,153 $5,041,211 $5,293,272 5.7% 6.0% 5.2% 5.0% 5.0% 5 Base Charge Revenue - Recology (comm) $104,535 $110,807 $117,455 $123,328 $129,495 $135,969 6.0% 6.0% 5.0% 5.0% 5.0% 6 Subtotal - Base Charge Revenue $4,177,451 $4,417,442 $4,682,489 $4,924,482 $5,170,706 $5,429,241 5.7% 6.0% 5.2% 5.0% 5.0% 7 Sch Q "Extras" Rev. (i.e., backyard srvc) 97,024 $97,024 $97,024 $97,024 $97,024 $97,024 0.0% 0.0% 0.0% 0.0% 0.0% 8 Total Revenue (after rate adjustments) $4,274,475 $4,514,466 $4,779,513 $5,021,506 $5,267,730 $5,526,265 5.6% 5.9% 5.1% 4.9% 4.9% Expenses
9 Recology Collection Costs (incl. Schedule Q) $2,418,012 $2,461,783 $2,558,241 $2,658,558 $2,762,888 $2,871,390 1.8% 4.0% 4.0% 4.0% 4.0% 10 Disposal & Processing Fees $1,628,923 $1,710,369 $1,795,887 $1,885,682 $1,979,966 $2,078,964 5.0% 5.0% 5.0% 5.0% 5.0% 11 Agency Franchise & Other Fees $391,248 $413,725 $438,549 $461,213 $484,274 $508,488 5.7% 6.0% 5.2% 5.0% 5.0% 12 Total Expenses $4,438,183 $4,585,877 $4,792,678 $5,005,453 $5,227,128 $5,458,842 3.3% 4.5% 4.4% 4.4% 4.4% 13 Surplus / (Shortfall) After Rate Increase ($163,709) ($71,411) ($13,165) $16,053 $40,602 $67,423 14 Balancing Acct. (Proj. Year-End Balance) $167,018 $95,607 $82,442 $98,495 $139,097 $206,520
COLLECTION COST PROJECTION
Estimated Revenue (Before Rate Increase)
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Section 3. Cost of Service Analysis
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Section 3. Cost of Service Analysis
METHODOLOGY
A COS Study determines the unit cost of the services provided to the Town’s solid waste customers. Each customer class is charged the same unit cost for its share of the services that it requires. In this way, the total revenue requirement is split between the fixed service charges and the volumetric charges; with the volumetric charges further allocated among the customer classes. The customer classes for this study are residential and commercial.
The majority of the Town’s solid waste services are related to meeting customer demands for the solid waste, recycling, and organics collection services.
The collection services vary based on the customer’s subscribed size and type of container (bin vs. cart vs. roll-off) used for the collection of solid waste materials.
The solid waste collection service levels are defined as follows:
1. Residential Customers – Cart customers receive service in a 20- 32-, 64- or 96- gallon cart for solid waste, a 64-gallon cart for recycling, and a 96-gallon cart for organics. Additional carts may be provided, if requested, for an additional fee. The carts are typically collected by an automated side loader truck. The complete costs of the collection, transportation, and disposal system include three main categories: 1) Recology’s approved collection expenses; 2) processing and disposal costs at Rethink Waste’s SEC; and, 3) Town franchise fees. The franchises cover the Town’s overhead costs to manage the contract with Recology, participate as a member of Rethink Waste, provide community outreach and education, etc.
2. Commercial Customers – Commercial customers typically receive service in bins (ranging from 1 – 6 cubic yards) as they produce more materials than a typical household. The bins are collected by a front-loader truck. Commercial customers can choose their containers size, including carts, and how frequently the container is collected each week (up to 6 times per week). The size and frequency of collection will differ between container type (solid waste, recycling, organics) and by customer. 2026 COST-OF-SERVICE
Figure 3-1 summarizes the net revenue requirement by customer class. As shown in Figure 3-1, the Town’s tax roll billing and Recology’s quarterly billing based on service levels is not the only source of revenue to cover the $4,585,877 cost-of-service for 2026 (Row 12, Figure 2-8). With the addition of revenues from backyard service charges kept by the Town, use of the balancing account, and factoring in for Recology disincentives, rates for 2026 must generate $4,417,442.
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Section 3. Cost of Service Analysis
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Figure 3-1. 2022 Net Revenue Requirement by Customer Class Rounding due to stored values may exist.
¹Cost of providing backyard service is included in Recology’s direct costs. Residents with backyard collection service are billed directly. This revenue is removed to avoid double counting. ²Allocated to each customer class based on their respective share of the Recology collection costs. ³Commercial customer class includes both solid waste and organics.
The customer class allocations and the expenses attributable to customer accounts are compared with the estimated revenue from current rates in Figure 3-2. The net 6.0% increase in revenue is not shared equally between residential services, commercial solid waste, and commercial organics.
Customer Direct Town
Class Costs Facilities¹ 2026 Total
Recology Compensation
Collection Costs
Residential $2,333,028 $13,489 $2,346,517
Commercial $66,679 $35 $66,714
Disposal & Processing Fees
Residential $1,591,065 $75,834 $1,666,899
Commercial $43,273 $197 $43,470
Franchise Fees
Residential $402,288 $0 $402,288
Commercial $11,437 $0 $11,437
Total Base Services $4,447,771 $89,555 $4,537,326
Plus: Recology Sch Q rate revenue for extra services 48,552 Total Compensation $4,585,878
Recology Compensation by customer Class
Residential $4,326,382 $89,322 $4,415,704
Commercial $121,389 $232 $121,621
$4,447,771 $89,555 $4,537,326
Plus: Recology Sch Q rate revenue for extra services 48,552 Gross Revenue Requirement (Figure 2-8, row 12) $4,585,878 Net Revenue Requirement by Customer Class
Residential Commercial Total
Gross Rev. Requirement $4,415,704 $121,621 $4,537,326
Less: Backyard Svc Rev.¹ ($46,702) $0 ($46,702)
Less: Use of Balancing Acct.² ($69,503) ($1,908) ($71,411) Less: Recology disincentives ($1,770) $0 ($1,770)
Net Revenue from Rates $4,297,729 $119,713 $4,417,442
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Section 3. Cost of Service Analysis
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Figure 3-2. Current Rate Revenue Compared to Cost of Service Rates need to be designed to generate each class’s share of the revenue requirement. Section 4 provides a recommended rate structure to meet the COS.
Revenue at 2026 Difference
Customer Class Current Rates Cost-of-Service $ %
Residential $4,062,343 $4,297,729 $235,386 5.8%
Commercial
Solid Waste/Recycling $92,302 $90,624 ($1,678) -1.8%
Organics $12,233 $29,089 $16,856 137.8%
Commercial Total $104,535 $119,713 $15,178 14.5%
Grand Total $4,166,878 $4,417,442 $250,565 6.0%
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Section 4. Rate Design – 2026 Cost of Service
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Section 4. Rate Design – 2026 Cost of Service
This section discusses the design of volumetric charges for the various sizes of carts, bins, and roll-off customers, as well as the fixed service charges for each customer class. All cost categories were evaluated to determine if the cost would fluctuate (variable) or remain constant (fixed) and if there were variances in the subscribed level of service and type of container. The following methodology was used to calculate the cost-of-service by service level and customer class for all solid waste, recycling, and service level organics.
VOLUMETRIC (VARIABLE) COLLECTION COSTS
Volumetric (variable) collection costs are proportional costs based on the subscribed size and type of container for carts and bins. To properly allocate the variable costs, the various factors identified below were calculated based on existing subscription levels of the Town’s residents and businesses. The variable collection costs exclude transfer and disposal and fixed costs, which are calculated separately.
Full Time Equivalent Route Factors
The subscribed level of service of each customer, in essence, reserves that equivalent volume of space in the collection vehicle. Recology must route its drivers and vehicles in order to ensure the collection trucks on those routes have sufficient capacity to accept the amount of material set out for collection by the customer. The size of the containers multiplied by the number of containers will determine the amount of truck capacity required. Therefore, a “Full Time Equivalent Route Factor” (FTE Route Factor) was calculated for each container size based on Recology’s actual collection trucks capacity, average route hours, and disposal trip time.
Figure 4-1 lists the FTE Route Factors for Carts and Bins:
Figure 4-1. Full Time Equivalent Route Factors
Equivalent Container Factor – Residential and Commercial An Equivalent Container Factor (ECF) was calculated to determine the variable component of the monthly rates as follows:
Customer Class FTE Route
and Container Size Factor
Residential
20 Gallons 1.00
32 Gallons 1.16
64 Gallons 1.66
96 Gallons 2.15
Commercial
32 Gallons 1.00
64 Gallons 1.00
96 Gallons 1.00
1 CY 1.20
2 CY 1.59
3 CY 1.99
6 CY 2.97
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Section 4. Rate Design – 2026 Cost of Service
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1. An adjusted number of loads for each size of container were calculated assuming 100% of customers subscribed to one size.
2. An adjusted loads cost was determined based on the actual collection costs divided by actual loads multiplied by the adjusted Loads.
3. The ECF was calculated by dividing the adjusted Loads Costs (step 2) by the minimum cost per load.
Figure 4-2 lists the ECF for each customer class:
Figure 4-2. Equivalent Container Factors
Note, the ECF for Residential organics is the same for all customers, as the base level of service provides one 96-gallon container per subscription. Therefore, all residential organics containers are assumed to have an ECF of 1.00. This methodology was also applied to Residential recycling such that all Residential recycling containers are assumed to have an ECF of 1.00, since the base level of service provides one 64-gallon container per subscription.
The ECF for Commercial organics are the same as the ECF for Commercial solid waste above, as these ratios were developed while including both Commercial solid waste containers and Commercial organics container costs.
Equivalent Container Units –Carts and Bins
Equivalent Container Units (ECU) were calculated to properly allocate the variable collection costs, excluding the solid waste transfer, disposal, and processing costs. ECUs were calculated by multiplying the number of containers by size, by the applicable ECF. Current containers in service were provided by Recology’s billing system and operational data. Figure 4-3 shows the calculation of the ECUs for each customer class.
Customer Class Equivalent
and Container Size Container Factor
Residential
20 Gallons 1.00
32 Gallons 1.86
64 Gallons 5.32
96 Gallons 10.34
Commercial
32 Gallons 1.00
64 Gallons 2.00
96 Gallons 3.00
1 CY 7.56
2 CY 20.28
3 CY 37.65
6 CY 115.53
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Section 4. Rate Design – 2026 Cost of Service
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Figure 4-3. Equivalent Container Units
Note: Totals may vary due to rounding.
Variable Route Collection Costs Calculations
Annual variable costs were determined based on the review of Recology’s 2026 draft compensation (which includes the Town franchise fee). These variable costs vary based on the size, type, and number of containers and frequency of service. Costs include items such as labor, equipment operation, and maintenance.
Residential Customers
Figure 4-4A and Figure 4-4B show the calculation of the monthly variable route collection costs per month for residential services.
Figure 4-4A. Solid Waste Variable Route Collection Costs per Month - Residential Customer Class Equivalent Containers in
and Container Size Container Factor Service ECUs
a b c = a x b
Residential
20 Gallons 1.00 554 554
32 Gallons 1.86 1,637 3,050
64 Gallons 5.32 1,170 6,220
96 Gallons 10.34 482 4,982
Total Residential ECUs 14,806
Commercial
32 Gallons 1.00 0 0
64 Gallons 2.00 1 2
96 Gallons 3.00 2 6
1 CY 7.56 8 61
2 CY 20.28 9 183
3 CY 37.65 4 151
6 CY 115.53 4 462
Total Commercial ECUs 864
Variable Route Collection Cost Analysis 20 gallons 32 Gallons 64 Gallons 96 Gallons Annual Variable Costs $753,361 a
Equivalent Container Units (ECUs) 14,806 b
Annual Variable Costs per ECU $50.88 c = a / b
Monthly Variance Cost per ECU $4.24 d = c / 12
Equivalent Container Factor by Container Size e 1.00 1.86 5.32 10.34 Variable Route Cost per Month by Container Size f = d x e $4.24 $7.90 $22.54 $43.83 -31-
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Section 4. Rate Design – 2026 Cost of Service
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Figure 4-4B. Recycling, Organics Variable Route Collection Costs – Residential Commercial Customers
Figure 4-5 shows the calculation of the monthly variable route collection costs per month for commercial services. Both commercial solid waste and organics variable collection costs were considered in this analysis.
Figure 4-5. Solid Waste, Organics Variable Route Collection Costs – Commercial Note: Annual Variable costs include solid waste, recycling and organics costs for commercial subscriptions.
FIXED COLLECTION COSTS
Fixed collection costs (Fixed Costs) are determined based on Recology’s draft 2026 compensation and are not dependent on the subscribed service volume. Costs include such items as: customer service representatives, billing costs, on-call collection costs, cost to collect for Town facilities, etc. These costs are borne equally by each rate payer, regardless of the level of service. Figure 4-6 shows the calculation of Fixed Costs for carts and bins of various residential material streams and for the commercial collection.
Figure 4-6. Fixed Cart and Bin Collection Costs
Variable Route Collection Cost Analysis Recycling Organics Annual Variable Costs $751,374 $734,436
Equivalent Container Units (ECUs) 3,843 3,843
Annual Variable Costs per ECU $195.52 $191.11
Monthly Variance Cost per ECU $16.29 $15.93
ECF by Container Size 64 gallons 96 gallons
20 gallons 32 Gallons 1.00 1.00
- -
Variable Route Cost per Month by Container Size
64 gallons 96 gallons
$16.29 $15.93
Variable Route Collection Cost Analysis
a Annual Variable Costs $67,903
b Equivalent Container Units (ECUs) 864
c = a / b Annual Variable Costs per ECU $78.61
d = c / 12 Monthly Variance Cost per ECU $6.55
Equivalent Container Factor by Container Size
32 Gallons 64 Gallons 96 Gallons 1 CY 2 CY 3 CY 6 CY
e 1.00 2.00 3.00 7.56 20.28 37.65 115.53
f = d x e Variable Route Cost per Month by Container Size 32 Gallons 64 Gallons 96 Gallons 1 CY 2 CY 3 CY 6 CY
$6.55 $13.12 $19.65 $49.55 $132.85 $246.67 $756.83
Residential Combined
Fixed Collection Cost Analysis MSW Recycling Organics Commercial Total Annual Fixed Costs $258,793 $93,579 $36,781 $6,696 Number of Accounts 3,843 3,843 3,843 12
Fixed Cost per Year $67.34 $24.35 $9.57 $558.00
Fixed Cost per Month $5.61 $2.03 $0.80 $46.50
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Section 4. Rate Design – 2026 Cost of Service
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TIPPING FEES AT THE SHOREWAY ENVIRONMENTAL CENTER
All material is collected by Recology or direct-hauled to Rethink Waste’s SEC for further processing, transfer, and disposal. The projected costs are based on anticipated volume of materials delivered to the facility at the Rethink Waste-approved rates (see Figure 2-7).
The cost per gallon or cubic yard of service is calculated by dividing the projected disposal costs by the number of subscribed gallons or cubic yards. Figure 4-7 and Figure 4-8 summarize the cost per month to dispose of the collected materials at the Shoreway Environmental Center (on a per pull per week basis). The per-gallon tip fee calculated for each material stream is multiplied by the size of the container to determine the overall disposal/processing cost per month by container size.
Figure 4-7. Cart and Bin Tipping Fees – Residential
Figure 4-8. Cart and Bin Tipping Fees – Commercial
COST OF SERVICE
Figure 4-9A and 4-11B summarize the cost to service residential carts, commercial carts, and commercial bins collected one time per week (first container) based on the calculations in Figure 4-4A to Figure 4-8 above. All customers receive at least weekly collection of all three container types: solid waste, recycling, and organics. These figures are for illustrative Residential
Disposal/Processing Cost Analysis MSW Recycling Organics Total Annual Disposal/Processing Costs $491,751 $0 $1,099,315 Total Volume (gallons) 184,616 245,952 451,488
Tip Fees/Gallon/Year $2.66 $0.00 $2.43
Tip Fees/Gallon/Month $0.22 $0.00 $0.20
Disposal/Processing Cost per Month by Container Size
20 Gallons $4.44 N/A N/A
32 Gallons $7.10 N/A N/A
64 Gallons $14.21 $0.00 N/A
96 Gallons $21.31 N/A $19.48
Commercial
Disposal/Processing Cost Analysis MSW Organics
Total Annual Disposal/Processing Costs $29,591 $11,971
Total Volume (gallons) 10,302 2,478
Tip Fees/Gallon/Year $2.87 $4.83
Tip Fees/Gallon/Month $0.24 $0.40
Disposal/Processing Cost per Month by Container Size
32 Gallons $7.66 $12.88
64 Gallons $15.32 $25.77
96 Gallons $22.98 $38.65
1 CY $48.35 $81.32
2 CY $96.70 $162.64
3 CY $145.05 $243.96
6 CY $290.11 $487.93
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Section 4. Rate Design – 2026 Cost of Service
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purposes to document the methodology for calculating the cost-of-service by customer class and container type.
Figure 4-9A. Residential Solid Waste Cost of Service
(Service 1/ Week)
Figure 4-9B. Residential Recycling Cost of Service
(Service 1/Week)
Figure 4-9C. Residential Organics Cost of Service
(Service 1/Week)
Figure 4.10A: Commercial Solid Waste Carts Cost of Service (Service 1x per Week, First Container)
Figure 4.10B: Commercial Solid Waste Bins Cost of Service (Service 1/ Week, First Container)
Residential Cost of Service 20 gallons 32 Gallons 64 Gallons 96 Gallons Variable $4.24 $7.90 $22.54 $43.83
Fixed $5.62 $5.62 $5.62 $5.62
Disposal/Processing $4.44 $7.10 $14.21 $21.31
Cost per Month $14.30 $20.62 $42.36 $70.76
Residential Cost of Service 64 gallons
Variable $16.29
Fixed $2.03
Disposal/Processing $0.00
Cost per Month $18.32
Residential Cost of Service 96 gallons
Variable $15.93
Fixed $0.80
Disposal/Processing $19.48
Cost per Month $36.20
Commercial MSW COS 32 Gallons 64 Gallons 96 Gallons
1st container collection
Variable $6.55 $13.12 $19.65
Fixed $46.50 $46.50 $46.50
Disposal/Processing $7.66 $15.32 $22.98
Cost per Month $60.71 $74.94 $89.13
Commercial MSW COS 1 CY 2 CY 3 CY 6 CY
1st container collection
Variable $49.55 $132.85 $246.67 $756.83
Fixed $46.50 $46.50 $46.50 $46.50
Disposal/Processing $48.35 $96.70 $145.05 $290.11
Cost per Month $144.40 $276.06 $438.22 $1,093.44
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Figure 4.11A: Commercial Organics Carts Cost of Service (Service 1/ Week, First Container)
Figure 4.11B: Commercial Organics Bins Cost of Service
(Service 1/ Week, First Container)
MULTIPLE COLLECTIONS PER WEEK
A rate for service that is provided to the same customer multiple times per week has the following components:
• First Service Day during a week - Base rate, which includes the variable, fixed, and disposal/processing components.
• Next Service Day during a week – Variable rate component, disposal/processing rate component, plus a frequency surcharge. The frequency surcharge is the additional cost (based on the driver’s hourly compensation and additional route time) for the driver to return to the area another day of the week, which results in less efficient routes.
Figure 4-12 is an example of the calculation of the COS rate for a 1-yard bin of solid waste serviced 2 times per week. The fixed portion is removed for each additional service day of service.
Figure 4-12. Example of Monthly Rate Calculation
(1 Cubic Yard Bin Collected 2/Week)
This calculation was done for each container type (carts and bins) and size.
Commercial Organics COS 32 Gallons 64 Gallons 96 Gallons 1st container collection
Variable $7.56 $20.28 $37.65
Fixed $46.50 $46.50 $46.50
Disposal/Processing $12.88 $25.76 $38.65
Cost per Month $66.95 $92.54 $122.80
Commercial Organics COS 1 CY 2 CY 3 CY 6 CY
1st container collection
Variable $49.55 $132.85 $246.67 $756.83
Fixed $46.50 $46.50 $46.50 $46.50
Disposal/Processing $81.32 $162.64 $243.96 $487.92
Cost per Month $177.37 $342.00 $537.13 $1,291.26
Service Amount
1st container collection (1st pick-up) $144.40
2nd pick-up
Variable $49.55
Disposal/Processing $48.35
Frequency Surcharge $22.99
$120.89
Total Bill - 1 CY Bin, Collected 2x per week $265.29
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2026 Solid Waste Rate Study
Section 4. Rate Design – 2026 Cost of Service
HF&H Consultants, LLC | July 31, 2025 | Page 26 of 34
ADDITIONAL SOLID WASTE CONTAINERS
There are occasions, due to service demands, where a customer may have more than one solid waste container. A rate for the additional container includes the disposal component, the variable component, and only a portion of the fixed container component. The rate for an additional container at a customer’s property should not include those fixed costs which they have already paid for in the first container. The only portion of fixed costs that are included in the rate for an additional container is the cost of the container (i.e., depreciation) itself. Figure 4-13 shows a calculation for an additional 96-gallon commercial solid waste cart serviced one time per week of $43.15 per month, which is lower than the cost of the first container ($89.13 per month, see Figure 4-13).
Figure 4-13. Calculation of Monthly Rate – Multiple Containers (Commercial Customer Subscribed to Two 96-gallon Solid Waste Containers) This calculation was done for each container type (carts and bins) and size.
TOTAL COST/RATE BY CUSTOMER CLASS AND SERVICE LEVEL - 1ST
CONTAINER
Residential
Figure 4-14 summarizes the monthly costs for Recology to provide weekly solid waste, recyclable material, and organics collection, processing, and disposal services using the COS values determined in Figure 4-9A, Figure 4-9B, and Figure 4-9C. The costs are broken down by container type for illustrative purposes; however, customers are billed the total monthly rate based on the size of their solid waste container. Figure 4-14 also reflects the fact that a portion of each customer’s rate for their first container is billed annually on the tax roll ($402.24 per year = $33.52 per month). The remaining costs are included in the monthly rate billed quarterly by Recology.
Figure 4-14. Residential Cost-of-Service (2026) and Monthly Rates Service Amount
1st container collection $89.13
2nd container collection
Variable $19.65
Disposal/Processing $22.98
Depreciation of additional container $0.52
$43.15
Toal Bill - 2 96-gallon carts, collected 1x per week $132.28 Size of Residential Solid Waste Cart 20 gallons 32 Gallons 64 Gallons 96 Gallons Solid Waste $14.30 $20.62 $42.36 $70.76
Recycling $18.32 $18.32 $18.32 $18.32
Organics $36.20 $36.20 $36.20 $36.20
Total $68.82 $75.15 $96.89 $125.28
(Less) Tax Roll Billing ($33.52) ($33.52) ($33.52) ($33.52) Monthly Rate billed by Recology $35.30 $41.63 $63.37 $91.76 -36-
2026 Solid Waste Rate Study
Section 4. Rate Design – 2026 Cost of Service
HF&H Consultants, LLC | July 31, 2025 | Page 27 of 34
Commercial
Figure 4-15 summarizes the monthly costs for Recology to provide solid waste and recyclable material collection services, which is billed quarterly by Recology and based on each commercial customer’s specific number of solid waste containers, the size of container, and frequency of collection. Recycling collection is provided at no additional charge. The cost to provide recycling services is included in the solid waste rates. Recology bills customers on a monthly basis.
Figure 4-15. Commercial Solid Waste Cost-of-Service (2026) and Monthly Rates Figure 4-16 summarizes the monthly costs for Recology to provide organics collection services, which are billed quarterly by Recology and based on each commercial customer’s specific number of containers, the size of container, and frequency of collection. Rates reflect the removal of the existing commercial organics discount.
Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $60.71 $88.71 $116.71 $144.72 $172.72 $200.72 64 Gallons $74.94 $117.17 $159.40 $201.63 $243.86 $286.08 96 Gallons $89.13 $145.55 $201.98 $258.40 $314.82 $371.25 1 CY $144.40 $265.29 $386.18 $507.07 $627.95 $748.84
2 CY $276.06 $528.60 $781.14 $1,033.68 $1,286.23 $1,538.77 3 CY $438.22 $852.93 $1,267.64 $1,682.35 $2,097.05 $2,511.76 6 CY $1,093.44 $2,163.37 $3,233.29 $4,303.22 $5,373.14 $6,443.07 Additional Container
32 Gallons $14.59 $42.60 $70.60 $98.60 $126.60 $154.60
64 Gallons $28.89 $71.12 $113.35 $155.58 $197.81 $240.03 96 Gallons $43.15 $99.57 $155.99 $212.42 $268.84 $325.26 1 CY $102.49 $223.37 $344.26 $465.15 $586.04 $706.93
2 CY $234.81 $487.35 $739.89 $992.43 $1,244.98 $1,497.52 3 CY $397.56 $812.26 $1,226.97 $1,641.68 $2,056.39 $2,471.09 6 CY $1,055.27 $2,125.20 $3,195.12 $4,265.05 $5,334.98 $6,404.90 Frequency
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2026 Solid Waste Rate Study
Section 4. Rate Design – 2026 Cost of Service
HF&H Consultants, LLC | July 31, 2025 | Page 28 of 34
Figure 4-16. Commercial Organics Cost-of-Service (2026) and Monthly Rates Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $65.93 $99.16 $132.38 $165.61 $198.83 $232.06 64 Gallons $85.38 $138.06 $190.73 $243.41 $296.08 $348.76 96 Gallons $104.80 $176.89 $248.98 $321.08 $393.17 $465.26 1 CY $177.37 $331.23 $485.09 $638.95 $792.80 $946.66
2 CY $342.00 $660.48 $978.96 $1,297.44 $1,615.92 $1,934.41 3 CY $537.13 $1,050.75 $1,564.37 $2,077.98 $2,591.60 $3,105.22 6 CY $1,291.26 $2,559.00 $3,826.75 $5,094.49 $6,362.24 $7,629.99 Additional Container
32 Gallons $19.82 $53.04 $86.27 $119.49 $152.72 $185.94 64 Gallons $39.33 $92.01 $144.68 $197.36 $250.04 $302.71 96 Gallons $58.82 $130.91 $203.00 $275.09 $347.19 $419.28 1 CY $135.46 $289.31 $443.17 $597.03 $750.89 $904.74
2 CY $300.75 $619.23 $937.71 $1,256.19 $1,574.67 $1,893.16 3 CY $496.47 $1,010.08 $1,523.70 $2,037.32 $2,550.94 $3,064.55 6 CY $1,253.09 $2,520.84 $3,788.58 $5,056.33 $6,324.07 $7,591.82 Frequency
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2026 Solid Waste Rate Study
Section 5. Proposed Rates
HF&H Consultants, LLC | July 31, 2025 | Page 29 of 34
Section 5. Proposed Rates
This section lists all proposed residential and commercial rates for FY 2026-2030, resulting from this COS study.
Figure 5-1 summarizes the proposed monthly rates for residential customers based on applying the revenue increases to the cost of service rates calculated in Section 4. Annual revenue increases are shown in Figure 2-8.
Figure 5-1. Current and Proposed Monthly Residential Rates Figure 5-2 through Figure 5-6 summarize the proposed five-year schedule of commercial solid waste monthly rates. Rates for 2027-2030 were calculated by applying revenue increases to the 2026 rates calculated in Figure 4-16.
Figure 5-2. Commercial Solid Waste and Recycling Cost-of-Service (2026) and Monthly Rates
Residential Current 2026 2026 2027 2028 2029 2030
Monthly Rates Rates Rates Change Rates Rates Rates Rates Annual % Increase: varies 6.0% 5.0% 5.0% 5.0%
Flat fee per Parcel $31.68 $33.52 $1.84 $35.53 $37.31 $39.18 $41.14 Service Level
20-Gallon Cart $31.95 $35.30 $3.35 $37.42 $39.29 $41.25 $43.31 32-Gallon Cart $39.01 $41.62 $2.61 $44.12 $46.33 $48.65 $51.08 64-Gallon Cart $60.61 $63.36 $2.75 $67.17 $70.53 $74.06 $77.76 96-Gallon Cart $88.43 $91.76 $3.33 $97.26 $102.12 $107.23 $112.59 Extra Organics Cart $27.04 $27.04 $0.00 $27.04 $27.04 $27.04 $27.04 PROPOSED Monthly Commercial Solid Waste Rates (eff. 1/1/2026) Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $60.71 $88.71 $116.71 $144.72 $172.72 $200.72 64 Gallons $74.94 $117.17 $159.40 $201.63 $243.86 $286.08 96 Gallons $89.13 $145.55 $201.98 $258.40 $314.82 $371.25 1 CY $144.40 $265.29 $386.18 $507.07 $627.95 $748.84
2 CY $276.06 $528.60 $781.14 $1,033.68 $1,286.23 $1,538.77 3 CY $438.22 $852.93 $1,267.64 $1,682.35 $2,097.05 $2,511.76 6 CY $1,093.44 $2,163.37 $3,233.29 $4,303.22 $5,373.14 $6,443.07 Additional Container
32 Gallons $14.59 $42.60 $70.60 $98.60 $126.60 $154.60
64 Gallons $28.89 $71.12 $113.35 $155.58 $197.81 $240.03 96 Gallons $43.15 $99.57 $155.99 $212.42 $268.84 $325.26 1 CY $102.49 $223.37 $344.26 $465.15 $586.04 $706.93
2 CY $234.81 $487.35 $739.89 $992.43 $1,244.98 $1,497.52 3 CY $397.56 $812.26 $1,226.97 $1,641.68 $2,056.39 $2,471.09 6 CY $1,055.27 $2,125.20 $3,195.12 $4,265.05 $5,334.98 $6,404.90 Frequency
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2026 Solid Waste Rate Study
Section 5. Proposed Rates
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Figure 5-3. Commercial Solid Waste and Recycling Cost-of-Service (2027) and Monthly Rates
Figure 5-4. Commercial Solid Waste and Recycling Cost-of-Service (2028) and Monthly Rates
PROPOSED Monthly Commercial Solid Waste Rates (eff. 1/1/2027) Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $64.35 $94.03 $123.72 $153.40 $183.08 $212.76 64 Gallons $79.43 $124.20 $168.96 $213.72 $258.49 $303.25 96 Gallons $94.48 $154.29 $214.10 $273.91 $333.71 $393.52 1 CY $153.07 $281.21 $409.35 $537.49 $665.63 $793.77
2 CY $292.62 $560.31 $828.01 $1,095.70 $1,363.40 $1,631.09 3 CY $464.52 $904.11 $1,343.70 $1,783.29 $2,222.88 $2,662.47 6 CY $1,159.05 $2,293.17 $3,427.29 $4,561.41 $5,695.53 $6,829.65 Additional Container
32 Gallons $15.47 $45.15 $74.83 $104.52 $134.20 $163.88 64 Gallons $30.62 $75.38 $120.15 $164.91 $209.67 $254.44 96 Gallons $45.74 $105.55 $165.35 $225.16 $284.97 $344.78 1 CY $108.64 $236.78 $364.92 $493.06 $621.20 $749.34
2 CY $248.90 $516.59 $784.28 $1,051.98 $1,319.67 $1,587.37 3 CY $421.41 $861.00 $1,300.59 $1,740.18 $2,179.77 $2,619.36 6 CY $1,118.59 $2,252.71 $3,386.83 $4,520.95 $5,655.07 $6,789.19 Frequency
PROPOSED Monthly Commercial Solid Waste Rates (eff. 1/1/2028) Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $67.57 $98.73 $129.91 $161.07 $192.23 $223.40 64 Gallons $83.40 $130.41 $177.41 $224.41 $271.41 $318.41 96 Gallons $99.20 $162.00 $224.81 $287.61 $350.40 $413.20 1 CY $160.72 $295.27 $429.82 $564.36 $698.91 $833.46
2 CY $307.25 $588.33 $869.41 $1,150.49 $1,431.57 $1,712.64 3 CY $487.75 $949.32 $1,410.89 $1,872.45 $2,334.02 $2,795.59 6 CY $1,217.00 $2,407.83 $3,598.65 $4,789.48 $5,980.31 $7,171.13 Additional Container
32 Gallons $16.24 $47.41 $78.57 $109.75 $140.91 $172.07 64 Gallons $32.15 $79.15 $126.16 $173.16 $220.15 $267.16 96 Gallons $48.03 $110.83 $173.62 $236.42 $299.22 $362.02 1 CY $114.07 $248.62 $383.17 $517.71 $652.26 $786.81
2 CY $261.35 $542.42 $823.49 $1,104.58 $1,385.65 $1,666.74 3 CY $442.48 $904.05 $1,365.62 $1,827.19 $2,288.76 $2,750.33 6 CY $1,174.52 $2,365.35 $3,556.17 $4,747.00 $5,937.82 $7,128.65 Frequency
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2026 Solid Waste Rate Study
Section 5. Proposed Rates
HF&H Consultants, LLC | July 31, 2025 | Page 31 of 34
Figure 5-5. Commercial Solid Waste and Recycling Cost-of-Service (2029) and Monthly Rates
Figure 5-6. Commercial Solid Waste and Recycling Cost-of-Service (2030) and Monthly Rates
Figure 5-7 through Figure 5-11 summarize the proposed five-year schedule of commercial solid waste monthly rates. Rates for 2027-2030 were calculated by applying revenue increases to the 2026 rates calculated in Figure 4-17.
PROPOSED Monthly Commercial Solid Waste Rates (eff. 1/1/2029) Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $70.95 $103.67 $136.41 $169.12 $201.84 $234.57 64 Gallons $87.57 $136.93 $186.28 $235.63 $284.98 $334.33 96 Gallons $104.16 $170.10 $236.05 $301.99 $367.92 $433.86 1 CY $168.76 $310.03 $451.31 $592.58 $733.86 $875.13
2 CY $322.61 $617.75 $912.88 $1,208.01 $1,503.15 $1,798.27 3 CY $512.14 $996.79 $1,481.43 $1,966.07 $2,450.72 $2,935.37 6 CY $1,277.85 $2,528.22 $3,778.58 $5,028.95 $6,279.33 $7,529.69 Additional Container
32 Gallons $17.05 $49.78 $82.50 $115.24 $147.96 $180.67 64 Gallons $33.76 $83.11 $132.47 $181.82 $231.16 $280.52 96 Gallons $50.43 $116.37 $182.30 $248.24 $314.18 $380.12 1 CY $119.77 $261.05 $402.33 $543.60 $684.87 $826.15
2 CY $274.42 $569.54 $864.66 $1,159.81 $1,454.93 $1,750.08 3 CY $464.60 $949.25 $1,433.90 $1,918.55 $2,403.20 $2,887.85 6 CY $1,233.25 $2,483.62 $3,733.98 $4,984.35 $6,234.71 $7,485.08 Frequency
PROPOSED Monthly Commercial Solid Waste Rates (eff. 1/1/2030) Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $74.50 $108.85 $143.23 $177.58 $211.93 $246.30 64 Gallons $91.95 $143.78 $195.59 $247.41 $299.23 $351.05 96 Gallons $109.37 $178.61 $247.85 $317.09 $386.32 $455.55 1 CY $177.20 $325.53 $473.88 $622.21 $770.55 $918.89
2 CY $338.74 $648.64 $958.52 $1,268.41 $1,578.31 $1,888.18 3 CY $537.75 $1,046.63 $1,555.50 $2,064.37 $2,573.26 $3,082.14 6 CY $1,341.74 $2,654.63 $3,967.51 $5,280.40 $6,593.30 $7,906.17 Additional Container
32 Gallons $17.90 $52.27 $86.63 $121.00 $155.36 $189.70 64 Gallons $35.45 $87.27 $139.09 $190.91 $242.72 $294.55 96 Gallons $52.95 $122.19 $191.42 $260.65 $329.89 $399.13 1 CY $125.76 $274.10 $422.45 $570.78 $719.11 $867.46
2 CY $288.14 $598.02 $907.89 $1,217.80 $1,527.68 $1,837.58 3 CY $487.83 $996.71 $1,505.60 $2,014.48 $2,523.36 $3,032.24 6 CY $1,294.91 $2,607.80 $3,920.68 $5,233.57 $6,546.45 $7,859.33 Frequency
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2026 Solid Waste Rate Study
Section 5. Proposed Rates
HF&H Consultants, LLC | July 31, 2025 | Page 32 of 34
Figure 5-7. Commercial Organics Cost-of-Service (2026) and Monthly Rates Figure 5-8. Commercial Organics Cost-of-Service (2027) and Monthly Rates COS Monthly Commercial Organics Rates (eff. 1/1/2026)
Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $65.93 $99.16 $132.38 $165.61 $198.83 $232.06 64 Gallons $85.38 $138.06 $190.73 $243.41 $296.08 $348.76 96 Gallons $104.80 $176.89 $248.98 $321.08 $393.17 $465.26 1 CY $177.37 $331.23 $485.09 $638.95 $792.80 $946.66
2 CY $342.00 $660.48 $978.96 $1,297.44 $1,615.92 $1,934.41 3 CY $537.13 $1,050.75 $1,564.37 $2,077.98 $2,591.60 $3,105.22 6 CY $1,291.26 $2,559.00 $3,826.75 $5,094.49 $6,362.24 $7,629.99 Additional Container
32 Gallons $19.82 $53.04 $86.27 $119.49 $152.72 $185.94 64 Gallons $39.33 $92.01 $144.68 $197.36 $250.04 $302.71 96 Gallons $58.82 $130.91 $203.00 $275.09 $347.19 $419.28 1 CY $135.46 $289.31 $443.17 $597.03 $750.89 $904.74
2 CY $300.75 $619.23 $937.71 $1,256.19 $1,574.67 $1,893.16 3 CY $496.47 $1,010.08 $1,523.70 $2,037.32 $2,550.94 $3,064.55 6 CY $1,253.09 $2,520.84 $3,788.58 $5,056.33 $6,324.07 $7,591.82 Frequency
COS Monthly Commercial Organics Rates (eff. 1/1/2027)
Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $69.89 $105.11 $140.33 $175.54 $210.76 $245.98 64 Gallons $90.51 $146.34 $202.18 $258.01 $313.85 $369.69 96 Gallons $111.09 $187.51 $263.92 $340.34 $416.76 $493.18 1 CY $188.01 $351.10 $514.19 $677.28 $840.37 $1,003.46
2 CY $362.52 $700.11 $1,037.70 $1,375.29 $1,712.88 $2,050.47 3 CY $569.36 $1,113.79 $1,658.23 $2,202.66 $2,747.10 $3,291.53 6 CY $1,368.74 $2,712.55 $4,056.35 $5,400.16 $6,743.97 $8,087.78 Additional Container
32 Gallons $21.01 $56.22 $91.44 $126.66 $161.88 $197.10 64 Gallons $41.69 $97.53 $153.37 $209.20 $265.04 $320.87 96 Gallons $62.35 $138.76 $215.18 $291.60 $368.02 $444.43 1 CY $143.58 $306.67 $469.76 $632.85 $795.94 $959.03
2 CY $318.79 $656.38 $993.97 $1,331.56 $1,669.16 $2,006.75 3 CY $526.25 $1,070.69 $1,615.12 $2,159.56 $2,703.99 $3,248.43 6 CY $1,328.28 $2,672.09 $4,015.90 $5,359.71 $6,703.52 $8,047.33 Frequency
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2026 Solid Waste Rate Study
Section 5. Proposed Rates
HF&H Consultants, LLC | July 31, 2025 | Page 33 of 34
Figure 5-9. Commercial Organics Cost-of-Service (2028) and Monthly Rates Figure 5-10. Commercial Organics Cost-of-Service (2029) and Monthly Rates COS Monthly Commercial Organics Rates (eff. 1/1/2028)
Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $73.38 $110.37 $147.35 $184.32 $221.30 $258.28 64 Gallons $95.04 $153.66 $212.29 $270.91 $329.54 $388.17 96 Gallons $116.64 $196.89 $277.12 $357.36 $437.60 $517.84 1 CY $197.41 $368.66 $539.90 $711.14 $882.39 $1,053.63
2 CY $380.65 $735.12 $1,089.59 $1,444.05 $1,798.52 $2,152.99 3 CY $597.83 $1,169.48 $1,741.14 $2,312.79 $2,884.46 $3,456.11 6 CY $1,437.18 $2,848.18 $4,259.17 $5,670.17 $7,081.17 $8,492.17 Additional Container
32 Gallons $22.06 $59.03 $96.01 $132.99 $169.97 $206.96 64 Gallons $43.77 $102.41 $161.04 $219.66 $278.29 $336.91 96 Gallons $65.47 $145.70 $225.94 $306.18 $386.42 $466.65 1 CY $150.76 $322.00 $493.25 $664.49 $835.74 $1,006.98
2 CY $334.73 $689.20 $1,043.67 $1,398.14 $1,752.62 $2,107.09 3 CY $552.56 $1,124.22 $1,695.88 $2,267.54 $2,839.19 $3,410.85 6 CY $1,394.69 $2,805.69 $4,216.70 $5,627.70 $7,038.70 $8,449.70 Frequency
COS Monthly Commercial Organics Rates (eff. 1/1/2029)
Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $77.05 $115.89 $154.72 $193.54 $232.37 $271.19 64 Gallons $99.79 $161.34 $222.90 $284.46 $346.02 $407.58 96 Gallons $122.47 $206.73 $290.98 $375.23 $459.48 $543.73 1 CY $207.28 $387.09 $566.90 $746.70 $926.51 $1,106.31
2 CY $399.68 $771.88 $1,144.07 $1,516.25 $1,888.45 $2,260.64 3 CY $627.72 $1,227.95 $1,828.20 $2,428.43 $3,028.68 $3,628.92 6 CY $1,509.04 $2,990.59 $4,472.13 $5,953.68 $7,435.23 $8,916.78 Additional Container
32 Gallons $23.16 $61.98 $100.81 $139.64 $178.47 $217.31 64 Gallons $45.96 $107.53 $169.09 $230.64 $292.20 $353.76 96 Gallons $68.74 $152.99 $237.24 $321.49 $405.74 $489.98 1 CY $158.30 $338.10 $517.91 $697.71 $877.53 $1,057.33
2 CY $351.47 $723.66 $1,095.85 $1,468.05 $1,840.25 $2,212.44 3 CY $580.19 $1,180.43 $1,780.67 $2,380.92 $2,981.15 $3,581.39 6 CY $1,464.42 $2,945.97 $4,427.54 $5,909.09 $7,390.64 $8,872.19 Frequency
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2026 Solid Waste Rate Study
Section 5. Proposed Rates
HF&H Consultants, LLC | July 31, 2025 | Page 34 of 34
Figure 5-11. Commercial Organics Cost-of-Service (2030) and Monthly Rates COS Monthly Commercial Organics Rates (eff. 1/1/2030)
Container Size 1/ week 2/ week 3/ week 4/ week 5/ week 6/ week 32 Gallons $80.90 $121.68 $162.46 $203.22 $243.99 $284.75 64 Gallons $104.78 $169.41 $234.05 $298.68 $363.32 $427.96 96 Gallons $128.59 $217.07 $305.53 $393.99 $482.45 $570.92 1 CY $217.64 $406.44 $595.25 $784.04 $972.84 $1,161.63
2 CY $419.66 $810.47 $1,201.27 $1,592.06 $1,982.87 $2,373.67 3 CY $659.11 $1,289.35 $1,919.61 $2,549.85 $3,180.11 $3,810.37 6 CY $1,584.49 $3,140.12 $4,695.74 $6,251.36 $7,806.99 $9,362.62 Additional Container
32 Gallons $24.32 $65.08 $105.85 $146.62 $187.39 $228.18 64 Gallons $48.26 $112.91 $177.54 $242.17 $306.81 $371.45 96 Gallons $72.18 $160.64 $249.10 $337.56 $426.03 $514.48 1 CY $166.22 $355.01 $543.81 $732.60 $921.41 $1,110.20
2 CY $369.04 $759.84 $1,150.64 $1,541.45 $1,932.26 $2,323.06 3 CY $609.20 $1,239.45 $1,869.70 $2,499.97 $3,130.21 $3,760.46 6 CY $1,537.64 $3,093.27 $4,648.92 $6,204.54 $7,760.17 $9,315.80 Frequency
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
1 CONSENT CALENDAR
CITY COUNCIL MEETING
AUGUST 11, 2025
AGENDA STAFF REPORT
ITEM SUBJECT: APPROVE CITY COUNCIL MEETING MINUTES OF JULY 14, 2025 -47-
TOWN OF HILLSBOROUGH
San Mateo County
Sophie Cole, Mayor 1600 Floribunda Avenue
Leslie Marden Ragsdale, Vice Mayor Hillsborough, CA 94010 Laurie Davies Adams, Councilmember www.hillsborough.net Marie Chuang, Councilmember Phone 650-375-7400
Christine Krolik, Councilmember
UNAPPROVED MINUTES
MONDAY, JULY 14, 2025
5:30 PM CLOSED SESSION
6:00 PM CITY COUNCIL MEETING
Hillsborough Town Hall
Meetings of the City Council are held in-person at Town Hall. As a courtesy, and in compliance with applicable state law, staff and members of the public participated in the meeting in person at Town Hall or virtually via Zoom Video Conference.
CLOSED SESSION
CALL TO ORDER
Mayor Cole called the meeting to order at 5:31 p.m.
ROLL CALL
Present: Adams, Chuang, Krolik, Ragsdale, Cole
ANNOUNCEMENT OF CONFLICT OF INTEREST ON CLOSED SESSION ITEM(S) There were no announcements of conflict of interest.
CLOSED SESSION ITEM
A. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Pursuant to Government Code Section 54956.9(d)(1)
Litke v. Town of Hillsborough, San Mateo Superior Court No. 23-CLJ-05921
PUBLIC COMMENT ON CLOSED SESSION ITEM(S)
There were no speakers.
ADJOURN CLOSED SESSION
The Closed Session adjourned at 5:49 p.m.
REGULAR CITY COUNCIL MEETING
I. CALL TO ORDER
Mayor Cole called the meeting to order at 6:03 p.m.
II. ROLL CALL
Present: Adams, Chuang, Krolik, Ragsdale, Cole
III. PLEDGE OF ALLEGIANCE
Mayor Cole led the Pledge of Allegiance.
IV. REPORT FROM CLOSED SESSION
Mayor Cole reported that the City Council voted 5-0 to approve a settlement and authorize the City Manager to execute the settlement agreement.in the case entitled, Litke v. Hillsborough, -48-
Unapproved Minutes – Hillsborough City Council
Monday, July 14, 2025
San Mateo Superior Court No. 23-CLJ-05921, and that under the settlement, Mr. Litke will remove several trees along the frontage of his property on Forest View and provide trimming and maintenance to other trees. Mayor Cole reported that the work will be done within 60 days and that Mr. Litke will have the remaining trees inspected annually and will indemnify the Town if there are any damages from the trees. Mayor Cole reported that all parties will bear their own costs and attorney’s fees.
V. PRESENTATIONS
Mayor Cole announced that the Mayor’s Applause presentation would be taken out of order as the first presentation.
• Forestry and Local Vegetation Management by Dr. Jennifer Normoyle, Forest Protection Advocate
This item was heard following the Mayor’s Applause presentation.
Mayor Cole introduced Dr. Jennifer Normoyle, Forest Protection Advocate. Dr. Normoyle provided a presentation and responded to City Council questions.
Mayor Cole opened public comment.
Dr. David Weinberg expressed appreciation to Dr. Normoyle for her presentation.
Mayor Cole closed public comment.
• RethinkWaste Bin Sorting Best Practices
RethinkWaste Environmental Education Fellows Clara Coady and Ally Edwards provided a presentation and responded to City Council questions.
Mayor Cole opened public comment.
Dr. Jennifer Normoyle inquired regarding the availability of tours of the Shoreway Environmental Center.
Ms. Edwards confirmed the availability of tours for the public.
Mayor Cole closed public comment.
Public Works Director Paul Willis inquired about the availability of pick-up options for used cooking oil and grease.
Ms. Edwards confirmed that currently, used household cooking oil and grease may only be dropped off at the Shoreway Environmental Center.
• Mayor’s Applause
This presentation was taken out of order as the first presentation item.
Mayor Cole expressed appreciation to the Public Works Department for their response to recent water emergencies and presented a certificate of recognition. Public Works Director Paul Willis provided brief comments and introduced Water Division Supervisor Jeremy McMullen. Water Division Supervisor McMullen introduced members of the Public Works water division and provided brief comments.
Following the Mayor’s Applause presentation, the City Council resumed the regular order of the agenda and proceeded with the Forestry and Local Vegetation Management presentation.
VI. TOWN UPDATE
City Manager Doug Davis provided an update on events and activities in the town. -49-
Unapproved Minutes – Hillsborough City Council
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VII. PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA
There were no speakers.
VIII. ANNOUNCEMENT OF CONFLICT OF INTEREST
There were no announcements of conflict of interest.
IX. CONSENT CALENDAR
There were no requests from Council or the public to remove an item from the Consent Calendar.
On motion by Councilmember Krolik, seconded by Councilmember Chuang and unanimous on voice vote, the Consent Calendar was approved.
1. APPROVE CITY COUNCIL MEETING MINUTES OF JUNE 9, 2025 The City Council meeting minutes of June 9, 2025 were approved.
2. MONTHLY CLAIMS: JUNE 1 THROUGH JUNE 30, 2025
The monthly claims for June 2025 were approved as submitted.
3. QUARTERLY TREASURER'S REPORT FOR THE QUARTER ENDING JUNE 30, 2025 The Treasurer’s Report of the quarter ending June 30, 2025 was approved.
4. RECEIVE LEGISLATIVE UPDATE
The June 2025 Legislative Update was received.
5. RESOLUTION ACCEPTING AN IRREVOCABLE OFFER OF DEDICATION OF A TENFOOT-WIDE STORM DRAIN EASEMENT AND A FIVE-FOOT-WIDE SEWER EASEMENT AT 1650 WEDGEWOOD ROAD UNDER CEQA GUIDELINE 15301 The resolution accepting the irrevocable offer of dedication of a ten-foot-wide storm drain easement and a five-foot-wide sewer easement at 1650 Wedgewood Road under CEQA Guideline 15301 was adopted.
6. ADOPTION OF AN ORDINANCE AMENDING CHAPTER 13.28 OF THE
HILLSBOROUGH MUNICIPAL CODE RELATING TO CROSS-CONNECTIONS The ordinance entitled, "An Ordinance of the City Council of the Town of Hillsborough Amending Chapter 13.28 of the Hillsborough Municipal Code Relating to CrossConnections" was adopted.
7. RESOLUTION APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE
A SECOND AMENDMENT TO THE EXISTING AGREEMENT WITH HALEY & ALDRICH, INC. FOR PROFESSIONAL GEOTECHNICAL AND ENGINEERING DESIGN
SERVICES FOR THE MACADAMIA ACCESS ROAD REPAIR IN THE AMOUNT OF $105,000.00 FOR A TOTAL CONTRACT AMOUNT OF $389,264.00, UNDER CEQA GUIDELINE 15301
The resolution approving and authorizing the City Manager to execute a second amendment to the existing agreement with Haley & Aldrich, Inc. for professional geotechnical and engineering design services for the Macadamia Access Road Repair in the amount of $105,000.00, for a total contract amount of $389,264.00, allocating funds from the approved Macadamia Access Roads Capital Improvement Budget (#719), under CEQA Guideline 15301 was adopted.
X. PUBLIC HEARING
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Unapproved Minutes – Hillsborough City Council
Monday, July 14, 2025
8. RESOLUTION AUTHORIZING PLACEMENT OF SEWER SERVICE AND STORM
DRAINAGE CHARGES, SPECIAL TAX FOR POLICE PROTECTION AND FIRE
PROTECTION AND PREVENTION, AND THE FLAT CHARGE COMPONENT OF THE GARBAGE COLLECTION FEE ON THE FISCAL YEAR 2025-26 COUNTY TAX ROLL
AND AUTHORIZING THE COUNTY TAX COLLECTOR TO COLLECT SUCH
CHARGES
Assistant Finance Director Rich Santiago provided the staff report.
Mayor Cole opened the Public Hearing at 7:21 p.m. There were no speakers. Mayor Cole closed the Public Hearing at 7:21 p.m.
On motion by Councilmember Chuang, seconded by Councilmember Adams and unanimous on voice vote, the resolution authorizing placement of sewer service and storm drainage charges, special tax for police protection and fire protection and prevention, and the flat charge component of the garbage collection fee on the FY 2025- 26 County tax roll and authorizing the County Tax Collector to collect such charges was adopted.
XI. NEW BUSINESS
9. ACCEPTANCE OF THE 2024 GENERAL PLAN ANNUAL PROGRESS REPORT Assistant Director of Building & Planning Liz Ruess provided the staff report. Finance Director Jan Cooke provided additional information.
Mayor Cole opened public comment. There were no speakers. Mayor Cole closed public comment.
On motion by Councilmember Chuang, seconded by Councilmember Krolik and unanimous on roll call vote, the 2024 General Plan Annual Progress Report was accepted.
XII. CITY COUNCIL ITEMS
Councilmember Adams reported her attendance at a meeting with Public Works Director Paul Willis in her role as Public Works Commissioner, a meeting of the RethinkWaste Board of Directors, and a meeting of the Hillsborough Neighborhood Network (HNN). Councilmember Adams congratulated Administrative Services Manager William Li again on his receipt of the Hillsborough Beautification Foundation (HBF) Professional Appreciation Award, expressed appreciation to outgoing HBF President Sue Fisher and welcomed incoming President Julie Savage. Councilmember Adams reported she has been doing research on the Town’s business ordinance and business license process, underground utility districts, and telecommunications.
Councilmember Chuang reported her attendance at the reopening of Central County Fire Department Station 36 and that three CERT Stop the Bleed sessions were recently held.
Councilmember Chuang announced the upcoming Teen CERT Boot Camp, reported her attendance at a meeting of the SamTrans Board of Directors in which Reginal Transit Ballot Measures polling was presented, and reported that OneShoreline recently installed gauges to extend their early flood warning system. Councilmember Chuang encouraged residents to sign up for Watch Duty for fire alerts and fire maps, SMC Alert, and Nixle.
Councilmember Krolik reported her attendance at a meeting of the SFO Airport/Community Roundtable in which the Fly Quiet Program was discussed, provided comments regarding the Shred event, and reported her attendance at a tour of Hetch Hetchy reservoir and the reopening of Central County Fire Department Station 36. Councilmember Krolik expressed appreciation to the Hillsborough Police Department for their assistance with the Concours d’Elegance event and reported that the Architecture and Design Review Board (ADRB) discussed changing the square footage for a project that goes to ADRB from 500 square feet to 800 square feet.
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Unapproved Minutes – Hillsborough City Council
Monday, July 14, 2025
Vice Mayor Ragsdale reported her attendance at the reopening of Central County Fire Department Station 36, a tour of Hetch Hetchy reservoir, and the West Preschool Promotion Ceremony. Vice Mayor Ragsdale announced an upcoming potential name change for Peninsula Clean Energy, reported her participation on a subcommittee to review best practices for Peninsula Clean Energy Committees, and reported new shuttle routes for Commute.org. Vice Mayor Ragsdale reported she is working with the California Association of Youth Commissions to assist local youths who want to start youth commissions in their communities.
Mayor Cole reported her attendance at the reopening of Central County Fire Department Station 36, a meeting of the City/County Association of Governments (C/CAG), and a meeting of the Association of Bay Area of Governments (ABAG). Mayor Cole encouraged residents to sign up for SMC Alert and Nixle.
XIII. ADJOURNMENT
Mayor Cole adjourned the meeting at 8:10 p.m.
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
2 CONSENT CALENDAR
CITY COUNCIL MEETING
AUGUST 11, 2025
AGENDA STAFF REPORT
ITEM SUBJECT: MONTHLY CLAIMS: JULY 1 THROUGH JULY 31, 2025 SUMMARY: The monthly claims for the month of July 2025 in the amount of $13,158,424.06 are submitted for approval.
FISCAL IMPACT: Claims have been expended pursuant to the approved budget.
ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review pursuant to the California Environmental Quality Act (CEQA) Guidelines sections 15378(b)(2) and 15378(b)(5) as ongoing administrative or organizational activities that will not result in direct or indirect physical changes in the environment.
ATTACHMENTS: Monthly Claims Listing
PREPARED BY: Richard Santiago, Assistant Finance Director RECOMMENDATION: Approve the monthly claims for July 2025 as submitted. -53-
TOWN OF HILLSBOROUGH
REPORT OF GOODS & SERVICES PURCHASED
DURING THE MONTH OF JULY 2025
PREPARED BY:
Alan Singh
-54-
GOODS & SERVICES PURCHASED $8,641,164.25
NET SALARIES & TAXES PAID 1,114,000.52
HEALTH BENEFIT PREMIUMS 197,726.55
BOND PAYMENTS 1,500.00
CCFD FUNDING 2,350,061.50
SAN FRANCISCO WATER PAYMENTS 853,971.24
TOTAL COST OF GOODS & SERVICES TO BE APPROVED $13,158,424.06
FINANCE DIRECTOR DATE
CITY MANAGER DATE
TOWN OF HILLSBOROUGH
SUMMARY OF PURCHASES
DURING THE MONTH OF JULY 2025
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COMPARATIVE SUMMARY
For the Month of July 2025
Jul-25 Jul-24 Jun-23
Goods & Services Purchased: Operations 7,083,862.82 5,848,150.70 5,049,186.92 Capital 1,557,301.43 805,033.68 488,298.07Net Salaries & Taxes Paid 1,114,000.52 1,069,510.52 934,644.41Health Benefit Premiums 197,726.55 190,498.17 173,540.31Debt Service 1,500.00 0.00 0.00CCFD Funding 2,350,061.50 2,110,701.00 1,844,337.00San Francisco Water Payments 853,971.24 772,574.99 727,828.46 Total $13,158,424.06 $10,796,469.06 $9,217,835.17 NOTES:
Operations -
payments such as refunds, IT services, and professional services, as well as an increase in annual payments for PLAN JPA FY 2025-26 insurance coverage and CalPERS Unfunded Actuarial Accrued Liability (UAAL) annual payments.
Capital - CCFD - Water -
FY 25/26 spending is consistent with FY 24/25 spending except for timing of reoccurringCapital project spending in July 2025 is primarily for Priority Basins Rehab & KenilworthProject, Highline Water Project, and the Street Resurfacing Project.FY 24/25 contribution is based on budget/contract. There was an SFPUC wholesale water rate increase on July 1, 2025 to $5.80 (from$5.67, a 2.3 % increase). The increase in FY 25/26 as compared to FY 24/25 is attributedto the SFPUC rate increase and higher units purchased.
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TOWN OF HILLSBOROUGH
PURCHASES MADE DURING JULY 2025
CK # VENDOR DESCRIPTION AMOUNT
17579 3D TECHNOLOGY SERVICES INSTALL - SECURITY SYSTEM TOWN HALL & PD PW 72,373.25 17580 ACACIA FINANCIAL GROUP, INC ADVISORY SERVICES - GENERAL 7/2/24-5/6/25 FN 8,317.50 17581 ADP, LLC JUN '25 MASTERTAX SOFTWARE SUPPORT FN 90.60 17582 ADRIAN HERNANDEZ BRUSH CHIPPING 6/9-6/17 FIREWISE CM 17,500.00 17583 AIXTEK SOFTWARE - MICROSOFT LICENSE APR '25/MAY'25 IT 23,741.25 17584 ALL GUARD ALARM SYSTEMS, INC INSTALL - ALARM FN 50% FINAL PW 1,595.00 17585 ALLIANT INSURANCE 2025-26 EMPLOYER PRACTICE LIABILITY INSURANCE 37,300.00 17586 AMAZON WEB SERVICES, INC MAY '25 - BACKUP STORAGE IT 16,823.30 17587 APB GENERAL ENGINEER 2024 SANITARY SEWER REHAB PRJ KENILWORTH PW 497,025.75 17588 ASSURE MSP, INC EQUIP - VERKADA CAMERAS PD 24,185.63 17589 AT&T 4/24/25-5/23/25 PD 546.24
17590 AT&T 5/10/25-6/9/25 1,759.71
17591 AT&T 5/20/25-6/19/25 PD 65.62
17592 AT&T 5/17/25-6/16/25 PD 62.47
17593 AT&T 6/7/25 PD 538.67
17594 AT&T 6/7/25 PD 538.67
17595 BLUE SKY MARKETING GROUP LTD UNIFORMS - SHIRTS HNN 379.01 17596 BOSCO OIL COMPANY GAS PD 3,370.20
17597 MARY BRIDGET MALEY-CANNON HISTORICAL DESIGN REVIEW BP 1,628.00 17598 CINTAS CORPORATION NO 3 UNIFORM CLEANING SERVICE PW 336.26 17599 CINTAS CORPORATION NO 3 SERVICE - AED/FIRST AID KIT ALL DEPARTMENTS 1,237.00 17600 CITY OF BURLINGAME JUN '25 LIBRARY SERVICES CM 63,722.00 17601 CLARK PEST CONTROL PEST CONTROL -PD 111.00
17602 COMCAST JUN '25 PW 476.05
17603 COMCAST MAY '25 CALNET NONCGEN LINE IT 4,888.22
17604 COMMERCIAL SPEEDOMETER SVC INC REPAIR - SPEEDOMETER CHECK PD 720.00 17605 ERLER & KALINOWSKI, INC ESDC KENILWORTH/MARLBOROUGH SEWER PRJ PW 34,661.00 17606 FASTENAL COMPANY SUPPLIES - PERSONNEL PROTECTIVE EQUIP PW 861.00 17607 FEHR & PEERS CONSULT - EIR ASSESSMENT BP 9,108.75 17608 FLOWATER EQUIP - MAY '25 WATER STATION FN/CM/BP 639.84 17609 FOLGER GRAPHICS, INC PRINT - QUARTERLY NEWSLETTERS Q2 2025 CM 3,365.00 17610 FREDCO MARKETING PRINT/MAIL - ACH LETTER FN 2,665.56 17611 GLENN BERKHEIMER JUN '25 LABOR RELATIONS HR 1,700.00 17612 HOME DEPOT CREDIT SERVICES MAR '25 VARIOUS PARTS & SUPPLIES PW 10,482.57 17613 INFOSEND, INC. APR '25 UTILITY BILLING FN 1,238.89 17614 JOANNE M. AKAY CATERING - APR '25/MAY '25 MANAGE MEETING CM 700.00 17615 MARK D HUDAK LEGAL SERVICES - APR 2025 CM 6,705.00 17616 MCMILLAN ELECTRIC INSTALL - POWER SWITCHGEAR PW 9,200.00 17617 MOORE, IACOFANO GOLTSMAN, INC CONSULT - EIR ASSESSMENT BP 16,617.69 17618 MUNICIPAL RESOURCE GROUP LLC MAY '25 HR SERVICES CM/PD 5,242.70 17619 NOR-CAL CYCLES, LLC MAINT - 2009 HARLEY DAVIDSON PD 766.65 17620 OCCUPATIONAL HEALTH CENTERS OF CALIFORNIA, A EMPLOYEE PHYSICAL STAFF PW 3,467.00 17621 ALEXANDER WONG & HELEN NA REFUND - BUILD DEPOSIT BP 1,500.00 17622 DMITRI LAKTIONOV REFUND - BUILD DEPOSIT BP 31,157.50 17623 J.P. LINDSTROM REFUND - GRADE DEPOSIT BP 10,000.00 17624 JOHN PARK REFUND - BUILD DEPOSIT BP 29,900.00
17625 MICRO RESORTS REFUND - BUILD DEPOSIT BP 2,400.00
17626 ROBERT GILSON REFUND - GRADE DEPOSIT BP 10,008.52 17627 ROBERT PARKER & JEANNE PARKER REFUND - BUILD DEPOSIT BP 6,802.50 17628 RYAN CLARK REFUND - EIR DEPOSIT BALANCE BP 172.00 17629 TESLA ENERGY OPERATIONS, INC REFUND - PERMIT FEE VOID BP 557.25 17630 TRENCHFREE INC REFUND - PERMIT FEE VOID BP 268.85 17631 KIMBERLY DALAL REIMB - HYC CAYC SPRING CONFERENCE RENTAL CM 3,810.00 17632 TYLER GEIGER REIMB- WELLNESS SERVICE PD 225.00
17633 VINCENT CHU REIMB -TRAVEL EXP ICI CORE COURSE 12/2-13/24 PD 1,058.00 17634 1260 LA CUMBRE LLC REFUND - WATER ACCOUNT BALANCE FN 114.84 17635 ADAM FRANKL REFUND - WATER ACCOUNT BALANCE FN 367.15 17636 ADITYA GADGIL REFUND - WATER ACCOUNT BALANCE FN 26.45 17637 ASHLEY DU REFUND - WATER ACCOUNT BALANCE FN 249.30 17638 ASHLEY H. HAYWARD REFUND - WATER ACCOUNT BALANCE FN 299.65 17639 CHRISTINE AND RAYMOND NG REFUND - WATER ACCOUNT BALANCE FN 500.00 17640 GORDON LIAO REFUND - WATER ACCOUNT BALANCE FN 359.65 17641 KELLI SHIMAMOTO REFUND - WATER ACCOUNT BALANCE FN 367.15 17642 LUIS SAVASTANO REFUND - WATER ACCOUNT BALANCE FN 226.80 17643 MARCO CHAVEZ REFUND - WATER ACCOUNT BALANCE FN 371.44 17644 NANCY BLACHMAN REFUND - WATER ACCOUNT BALANCE FN 309.30 17645 REEMA AND KRISHNEIL KUMAR REFUND - WATER ACCOUNT BALANCE FN 101.45
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TOWN OF HILLSBOROUGH
PURCHASES MADE DURING JULY 2025
17646 ROBERT GILSON REFUND - WATER ACCOUNT BALANCE FN 229.83 17647 SAM COOLER REFUND - WATER ACCOUNT BALANCE FN 477.50 17648 SARAH PARKER REFUND - WATER ACCOUNT BALANCE FN 367.15 17649 SILJE M SEVERINSEN AUBERT REFUND - WATER ACCOUNT BALANCE FN 314.65 17650 VAHID FIROUZDOR REFUND - WATER ACCOUNT BALANCE FN 374.65 17651 PAGE & TURNBULL, INC HISTORICAL DESIGN REVIEW BP 8,243.39 17652 PENINSULA TRUCK REPAIR INC MAINT - FORD F-550 #324 PW 2,683.43 17653 PENINSULA UNIFORMS & EQUIPMENT, INC UNIFORM - VARIOUS ITEMS STAFF PD 1,019.22 17654 PG & E 5/3/25-6/3/25 MULTIPLE ACCOUNTS 9,307.94
17655 PLAN JPA 2025-26 PLAN PREMIUMS 1,130,009.00
17656 PRIORITY 1 JUN'25 MULTIPLE VEHICLES PD 7,123.91
17657 QUENCH USA, INC EQUIP - WATER STATION 6/28/25-7/27/25 PD 190.93 17658 ROMEL 400 LLC RENT - JUL'25 RADIO BASE STATION RECEIVER PD 343.20 17659 SAN MATEO COUNTY FORENSIC LAB JUN'25 CRIME LAB SERVICES PD 422.00 17660 SAN MATEO COUNTY SHERIFF'S OFFICE FEE - LIVE SCAN WORK FURLOUGH STAFF PW 96.00 17661 SAN MATEO COUNTY SHERIFF'S OFFICE FEE - LIVE SCAN WORK FURLOUGH STAFF PW 128.00 17662 SAN MATEO LOCK WORKS, INC. KEYS PW 61.94
17663 SHAWN KIRBY MAINT - POOL LIGHTING/WIRING 1640 RENTAL PW 2,500.00 17664 STAPLES ADVANTAGE OFFICE SUPPLIES - ALL DEPARTMENTS 511.50 17665 T-MOBILE USA INC. 5/21/25-6/20/25 PD 324.80
17666 UNITED STATES POSTAL SERVICE REPLENISH POSTAGE FUNDS FN 4,000.00 17667 UTILITY TELECOM, INC. JUN '25 ETHERNET & CIRCUITS IT 408.66 17668 VERIZON WIRELESS 5/7/25-6/6/25 MULTIPLE ACCOUNTS 7,007.95 17669 VIKING SHRED LLC JUN'25 DESTRUCTION SERVICES PD 92.99 17670 4LEAF, INC. JUNE '25 BUILDING PERMIT TECH SERVICES BP 5,596.00 17671 ACCO ENGINEERED SYSTEMS, INC. MAINT - A/C UNIT CORP YARD/TOWN HALL/PD PW 1,750.00 17672 AGUILAR & SONS REPAIR - DRIVEWAY PARROT & VARIOUS PRJ PW 37,836.50 17673 ALL GUARD ALARM SYSTEMS, INC INSTALL - ALARM CORP YARD SERVICE DEPOSIT PW 2,402.50 17674 ARAMARK SERVICES, INC COFFEE & SUPPLIES BP 48.74
17675 ARCHAEOLOGICAL/HISTORICAL CONSULTANTS LLC HISTORICAL DESIGN REVIEW BP 11,017.54 17676 BARKER BLUE DIGITAL IMAGING, INC IMAGING SVC – BINDERS '25 STREET RESURFACING PW 981.37 17677 BARTLEY PUMP PM, LLC MAINT - PUMP CORP YARD PW 3,466.25 17678 BAY AREA WATER SUPPLY & CONSERVATION AGENCY FEE - WATER LOSS MANAGEMENT FY24/25 298.00 17679 BAY PRO INSTALL - LANDSCAPE NEW PLACE/EUCALYPTUS HBF 27,822.00 17680 BAYSIDE BUILDING MATERIALS INC MATERIALS - ROCKS PW 493.29 17681 BEST BEST & KRIEGER LLP FEE - MAY '25/JUN '25 LEGAL SERVICE 69,747.09 17682 BKF ENGINEERS DESIGN FINAL - SHADY LANE PRJ PW 44,188.43 17683 BOSCO OIL COMPANY GAS/DIESEL PW/PD 2,202.73
17684 BRINC DRONES INC EQUIP - DRONE DEPOSIT PD 108,279.50 17685 CALIFORNIA PUBLIC POLICY GROUP, INC LEGAL RETAINER JUN '25 CM 4,000.00 17686 CALIFORNIA BUILDING STANDARDS COMMISSION Q4 '25 BLDG STANDARD FEES BP 1,060.20 17687 CALIFORNIA MUNICIPAL STATISTIC, INC DIRECT & OVERLAPPING DEBT FOR CAFR 6/30/25 600.00 17688 CASEY CONSTRUCTION, INC. CRYSTAL SPRINGS TERRACE SUBDRAIN PRJ PW 13,760.00 17689 CATALYST ENVIRONMENTAL, INC HAZARDOUS/ELECTRONIC WASTE DISPOSAL PW 6,215.23 17690 CENTRAL COUNTY FIRE DEPARTMENT JUL'25 FISCAL CONTRIBUTION &CALPER UAAL LUMP SUM 0.00 17691 CHARGELINK LLC MAINT - JUN '25 EV STATIONS PW 1,300.00 17692 CHRISTINA M MOSES SOFTWARE - WATER BILL CALCULATOR UPDATE FN 300.00 17693 CINTAS CORPORATION NO 3 UNIFORM CLEANING SERVICE PW 1,082.01 17694 CITY OF BURLINGAME APR '25 SEWER BILLING PW 133,698.92 17695 CITY OF BURLINGAME COUNCIL OF CITIES MEETING 6/27/25 COLE/CHUANG CO 130.00 17696 CLARK PEST CONTROL PEST CONTROL - MULTIPLE LOCATIONS PW 2,144.00 17697 COUNTY OF SAN MATEO LAFCO SHARE FY 2025-2026 6,472.00 17698 COUNTY OF SAN MATEO FY 25-26 ANIMAL CARE SHELTER CONSTRUCTION COST 10,301.00 17699 CSG CONSULTANTS, INC. PARKSIDE BRIDGE PRJ 3/29/25-4/25/25 & VARIOUS PRJ 316,509.10 17701 CYNTHIA RICHARDSON CONSULT - JUNE '25 PLANNER SERVICES BP 11,857.50 17702 DAILY JOURNAL CORPORATION LEGAL NOTICE 6/27/25 HEARING TAX ROLL CL $790.59 17703 DEBORAH YACOBELLIS CONSULT - CRW/TRACK IT JUN '25 BP 5,343.75 17704 DEPARTMENT OF CONSERVATION Q2'25 STRONG MOTION & SEISMIC HAZARD MAPPING BP 2,049.62 17705 DU-ALL SAFETY, LLC JUN '25 SAFETY CONSULT PW 4,378.75 17706 E AND M ELECTRIC & MACHINERY WONDERWARE MAINT - SCADA SUPPORT SERVICES PW 14,265.00 17707 ESHERICK HOMSEY DODGE AND DAVIS, ARCHITECS, PC CONSULT - JUN ' 25 TOWN VISION/HOUSING ELEMENT BP 18,385.80 17708 EOA, INC NPDES ANNUAL REPORT PW 1,683.50
17709 ESCRIBE SOFTWARE LTD SOFTWARE - MEETING MANAGEMENT 3/1/25-2/2/26 28,927.66 17710 FERGUSON US HOLDINGS, INC TOOLS - PIPELINE INSPECTION SYSTEM PW 8,768.90 17711 FLOCK GROUP INC EQUIP - FALCON CAMERAS PD 58,000.00 17712 FREDCO MARKETING PRINT/MAIL - 2025 STREET RESURFACING LETTERS PW 1,064.52 17713 GLENN BERKHEIMER JULY '25 LABOR RELATIONS HR 1,700.00 17714 GO NATIVE, INC MAINT - VEGETATION MANAGE VARIOUS SIGHTS PW 89,672.73 17715 GOOD CITY COMPANY CONSULT - JUN '25 PLANNER SERVICES BP 10,098.75 17716 GRAINGER SUPPLIES - VARIOUS ITEMS/TOOLS PW 1,352.64 17717 GRAY'S PAINT & WALLPAPER OF THE PENINSULA, INC SUPPLIES - PAINT SAMPLES PW 6.57
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TOWN OF HILLSBOROUGH
PURCHASES MADE DURING JULY 2025
17718 HACH COMPANY WATER QUALITY SUPPLIES PW 1,162.95
17719 HF&H CONSULTANTS, LLC JUNE'25 SOLID WASTE RATE STUDY FN 4,685.00 17720 INTERSTATE BATTERY SYSTEM OF SAN FRANCISCO PARTS - LIGHTS CROSSWALK CROCKER PW 154.93 17721 INTERSTATE TRAFFIC CONTROL PRODUCTS, INC. PARTS - TRAFFIC POSTS/BARRICADES PW 1,490.24 17722 INTERWEST CONSULTING GROUP JUN '25 BUILDING INSPECTOR SERVICES BP 2,000.00 17723 JV LUCAS PAVING, INC 2025 STREET RESURFACING PRJ PW 591,059.89 17724 KARIN SIDWELL HISTORICAL DESIGN REVIEW BP 3,000.00 17725 MIDWEST MOTOR SUPPLY CO, INC SUPPLIES - GLOVES PW 1,355.62 17726 KRONOS SAASHR, INC. JUN'25 PAYROLL PROCESSING FN 2,626.37 17727 LEADERSHIP COUNCIL SAN MATEO COUNTY TRAIN - IMMERSION PROGRAM 25-26 TUITION ADAMS CO 3,900.00 17728 LEXIPOL, LLC SUBSCRIPTION-LEXIPOL ANNUAL POLICY SYSTEM 25/26 P 18,515.52 17729 MAGNET FORENSICS USA, INC TRAIN - TRAINING ANNUAL PASS 6/25/25-6/24/26 PD 27,980.00 17730 MARK D HUDAK LEGAL SERVICES JUN '25 - CM 7,515.00 17731 METROPOLITAN PLANNING GROUP INC CONSULT - JUNE '25 PLANNER SERVICES BP 10,665.00 17732 NAPA AUTO PARTS - BURLINGAME SUPPLIES - BLUE DEF PW 163.44 17733 NINYO & MOORE GEOTECHNICAL & ENVIRONMENTAL SCIENCE KENILWORTH SEWER COMPACTION PW 2,714.00 17734 ODYSSEY POWER CORPORATION MAINT - GENERATOR HAYNE PW 1,854.84 17735 10 DOWNEY LLC REFUND - BUILD DEPOSIT BP 34,522.50 17736 DIANE PITRE REFUND - PERMIT FEE VOID BP 5,799.55
17737 JACKIE & JONGWOOK OH REFUND - BUILD DEPOSIT BP 19,397.00 17738 MVA CONSTRUCTION CO INC REFUND - BUILD DEPOSIT BP 33,085.00 17739 PAUL ROCHE REFUND - BUILD DEPOSIT BP 6,000.00
17740 PHOENIX ELECTRIC CO REFUND - BUILD DEPOSIT BP 4,950.00 17741 SALONI SARAIYA MULTANI REFUND - BUILD DEPOSIT BP 9,135.00 17742 SOUTHWEST INVESTMENT FUNDS LLC REFUND - BUILD DEPOSIT BP 14,437.50 17743 STUDIO VARA, INC REFUND - EIR DEPOSIT BALANCE BP 72.00 17744 BLOOMING VASE 2025 PARADE - WREATH REMEMBRANCE CEREMONY 318.28 17745 PAGE & TURNBULL, INC HISTORICAL DESIGN REVIEW BP 972.50 17746 PENINSULA PUMP & EQUIPMENT INC INSTALL - PUMP CORP YARD PW 4,538.13 17747 RECOLOGY SAN MATEO COUNTY SMCO GARBAGE FEES FY24-25 3RD PERIOD FN 29,471.04 17748 RED WING SHOE STORE WORK BOOTS - PW 296.03
17749 REDWOOD TRADING POST UNIFORM - RAIN BOOTS STAFF PW 790.99 17750 SAN MATEO LOCK WORKS, INC. SUPPLIES - KEYS PW 213.77 17751 SAN MATEO LUMBER CO., INC SUPPLIES - VARIOUS ITEMS CORP YARD PW 1,558.71 17752 SCHAAF & WHEELER CONSULTING 2024 SANITARY SEWER LIFT STATION UPGRADE 24A PW 2,065.00 17753 SFPUC FINANCIAL SERVICES APR '25 - WATER QUALITY ANALYSIS PW 1,100.00 17754 SHAWN KIRBY MAY '25 POOL SVC PW 1640 RENTAL 200.00 17755 STANDARD INSURANCE COMPANY MAY '25 GROUP LIFE/ADD/LTD ASSESSMENT 3,140.19 17756 STAPLES ADVANTAGE OFFICE SUPPLIES - ALL DEPARTMENTS 1,944.42 17757 TETRA TECH INC MAINT - SCADA SUPPORT SERVICES PW 19,438.42 17758 THE ADAM-HILL COMPANY PARTS - AIR LINE FIRE STATION 32 PW 43.97 17759 SAMUAL OAKLEY CONSULT - JUNE '25 ARBORIST SERVICES BP 1,380.00 17760 TIMBERLINE TREE SERVICE, INC. MAINT - TREE REMOVAL MACADAMIA PW 2,800.00 17761 UNDERGROUND REPUBLIC WATER WORKS, INC TOOLS - REROUNDINGS/COUPLINGS PW 2,437.32 17762 WECO INDUSTRIES, LLC EQUIP - VARIOUS NOZZLES PW 9,738.43 17763 ACCO ENGINEERED SYSTEMS, INC. REPAIR - A/C UNIT FN/PD PW 3,871.07 17764 ACTION TOWING AND ROAD SERVICE TOW - CAR #9 PD 181.50 17765 ADP, LLC JUL '25 MASTERTAX SOFTWARE SUPPORT FN 90.60 17766 AIXTEK JUN '25 MANAGEMENT SERVICE IT 36,697.50
17767 ALERT DOOR SERVICE, INC. MAINT - CORP YARD GARAGES PW 6,593.00 17768 ALL NATURAL STONE BURLINGAME PORCELIN SLAB BATHROOM REMODEL STATION #32 PW 12,265.27 17769 AMAZON WEB SERVICES, INC JUN '25 - BACKUP STORAGE IT 17,126.36 17770 ASSOCIATION OF BAY AREA GOVERNMENTS FEE - MEMBERSHIP FY 25/26 4,481.00 17771 AT&T 7/7/25 PD 538.67
17772 AUTO PRIDE CAR WASH, INC APR '25/JUN '25 CAR WASHES PD 301.89 17773 BAY AREA WATER SUPPLY & CONSERVATION AGENCY SCHOOL STUDENT INCENTIVE KITS JUN '25 PW 255.00 17774 BAY PRO INSTALL - LANDSCAPE NEW PLACE/EUCALYPTUS HBF 1,704.00 17775 BOSCO OIL COMPANY GAS PD 4,172.98
17776 BURNETT LANDSCAPE DEVELOPMENT INC MAINT - JUL '25 HBF LANDSCAPE VARIOUS SITES 5,256.00 17777 CALIFORNIA DEPARTMENT OF TAX APR-JUN '25 Q2 SALES AND USE TAX 1,978.00 17778 CALIFORNIA ELECTRIC CO. INSTALL - POWER MODIFICATIONS CORP YARD PW 27,525.31 17779 CENTRAL COUNTY FIRE DEPARTMENT JUL'25 FISCAL CONTRIBUTION&CALPER UAAL LUMP SUM 2,350,061.50 17780 JOHNATHAN CIAMPA CONSULT - APR-JUN '25 PLANNER SERVICES BP 1,991.25 17781 CINTAS CORPORATION NO 3 SUPPLIES - FIRST AID KIT PD 53.09 17782 CITY OF SAN MATEO WWTP/CWP O&M QTR 4 FY 24-25 PW/LIBRARY SERVICE 297,180.89 17783 CLARK PEST CONTROL PEST CONTROL - PD 106.00
17784 COUNTY OF SAN MATEO INFORMATION SERVICES DEPT. JUN'25 MICRO CHANNEL LINES PD 82.25 17785 COMCAST JUN '25 CALNET NONCGEN LINE IT 4,873.56
17786 COUNTY OF SAN MATEO-AIRPORT COMMUNITY ROUNDTABLE 2025/26 AIRPORT ROUNDTABLE FUND CM 1,500.00 17787 CSG CONSULTANTS, INC. STREET ADMIN 4/26/25-5/30/25 11,445.00 17788 CUSTOM TOPS INC EQUIP - LIGHTS #310 PW 4,294.73
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TOWN OF HILLSBOROUGH
PURCHASES MADE DURING JULY 2025
17789 DAILY JOURNAL CORPORATION LEGAL NOTICE 7/21/25 POST ADOPT ORD 798 CL 494.12 17790 DEPT OF FISH AND WILDLIFE FEE - APPLICATION MACADAMIA RD ACCESS REPAIR 15,393.75 17791 DIVISION OF STATE ARCHITECT APR-JUN '25 DISABILITY ACCESS & EDU FEE 86.00 17792 EMPLOYMENT DEVELOPMENT DEPT. JAN-MAR'25 UNEMPLOYMENT INSURANCE 535.84 17793 FERGUSON US HOLDINGS, INC PARTS - FIRE HYDRANTS PW 3,968.75 17794 FLOWATER EQUIP - WATER STATION ALL DEPARTMENTS 1,722.64 17795 FORENSIC LOGIC, LLC SOFTWARE - CRIMETRACER 7/1/25-6/30/26 PD 3,902.00 17796 FREYER & LAURETA, INC HIGH LINE WATER PRJ DESIGN PW 87,034.01 17797 GRAINGER EQUIP - HELMETS PW 136.83
17798 HOME DEPOT CREDIT SERVICES APR '25 VARIOUS PARTS & SUPPLIES PW 5,124.67 17799 JACOB GREEN & ASSOCIATES, INC APR '25-JUN '25 HNN STRATEGIC PLANNING CM 12,299.08 17800 JOSE RODRIGUEZ MAINT - TREE REMOVAL EUCALYPTUS ISLAND HBF 2,000.00 17801 KARIN SIDWELL HISTORICAL DESIGN REVIEW BP 5,200.00 17802 KEVIN KASHIWAHARA BACKGROUND INVESTIGATION NEW HIRE PD 1,713.10 17803 MOORE, IACOFANO GOLTSMAN, INC CONSULT - EIR ASSESSMENT BP 10,371.25 17804 MURRAYS TRUCK & AUTO REPAIR INC MAINT - FORD F-550 TRUCK #251,#538, #324 PW 2,114.49 17805 ALEXANDER S WONG REFUND - GRADE DEPOSIT BP 7,500.00 17806 DAVID KUOPPAMAKI REFUND - EIR DEPOSIT BALANCE BP 196.69 17807 GARY & BREE COHN REFUND - BUILD DEPOSIT BP 26,370.00 17808 NEXUS ASCEND LLC REFUND - PERMIT FEE OVERPAY BP 241.00 17809 CHRISTOPHER REY REIMB -TRAVEL EXP SUPERVISOR CLASS 7/7-18/25 PD 1,770.00 17810 DARYL ARCEO REIMB -TRAVEL EXP INTERVIEW CLASS 6/24-26/25 PD 117.30 17811 RONALD MERINO REIMB - FINGERPRINT SERVICE FEE HR 51.75 17812 VINCENT CHU REIMB - TRAVEL EXP ADV HOSTAGE CLASS 7/14-17/25 PD 163.22 17813 CITY OF ATHERTON COUNCIL OF CITIES MEETING 7/25/25 SC, LR, CK CO 195.00 17814 INTEGRATED TACTICAL CONCEPTS INC TRAIN - SPECIAL WEAPONS & TACTIC CLASS STAFF PD 1,700.00 17815 PG & E 6/4/25-7/3/25 MULTIPLE ACCOUNTS 10,569.19
17816 PRIORITY 1 REPAIR - MULTIPLE VEHICLES PD 2,751.24 17817 QUENCH USA, INC EQUIP - WATER STATION 7/28/25-8/27/25 PD 190.93 17818 REDWOOD TRADING POST UNIFORM - VESTS STAFF PW 764.73 17819 ROMEL 400 LLC RENT - AUG'25 RADIO BASE STATION RECEIVER PD 343.20 17820 ROY'S SEWER SERVICE INC MAINT - CCTV STORM DRAIN BAILEYANA/FARM LANE PW 3,600.00 17821 SAN MATEO LUMBER CO., INC SUPPLIES - VARIOUS ITEMS OAKS WATER SHED PW 20.28 17822 SAN MATEO RESOURCE CONSERVATION DISTRICT RCD COMPOST PROGRAM 4/25-6/25 CM 1,404.47 17823 STAPLES ADVANTAGE OFFICE SUPPLIES - ALL DEPARTMENTS 709.93 17824 SUN RIDGE SYSTEMS, INC SOFTWARE - SUPPORT RIMS/CAD 7/25-6/26 PD 31,190.00 17825 T-MOBILE USA INC. CELL TOWER DUMP CASE PD 50.00
17826 TELECOMMUNICATIONS ENGINEERING ASSOCIATES JUL'25 COMM CENTER/BASE, RIMS CAD RMS PD 3,919.00 17827 THIRKETTLE CORPORATION SOFTWARE - RNI SAAS FEE 7/1/25-6/30/26 PW 23,456.35 17828 TIMBERLINE ENGINEERING LLC REPAIR - CULVERT PIPES BAYBERRY PW 21,000.00 17829 TURBO DATA SYSTEMS, INC. JUN'25 CITATION PROCESSING & SCANNER PD 1,649.43 17830 UTILITY TELECOM, INC. JUL '25 ETHERNET & CIRCUITS IT 408.66 17831 VERIZON WIRELESS 6/7/25-7/6/25 PD 268.07
17832 VIKING SHRED LLC JUL'25 DESTRUCTION SERVICES PD 92.99 TOTAL GOODS & SERVICES FOR THE MONTH PAID BY CHECK $7,214,298.10 CALPERS RETIREMENT CONTRIBUTIONS 246,472.82
RETIREE HEALTH REIMBURSEMENTS 91,869.83
CALPERS ANNUAL UAL PAYMENT 3,438,585.00
TOTAL GOODS & SERVICES FOR THE MONTH $ 10,991,225.75
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
3 CONSENT CALENDAR
CITY COUNCIL MEETING
AUGUST 11, 2025
AGENDA STAFF REPORT
ITEM SUBJECT: RESOLUTION APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH URBAN FUTURES, INC. FOR FINANCIAL CONSULTING SERVICES IN AN AMOUNT NOT TO EXCEED $100,000.00
SUMMARY: This agenda item is for the City Council to consider adopting a resolution authorizing the City Manager to execute a Fee Agreement with Urban Futures, Inc. for financial consulting services to support the Long-Term Financial Funding Plan.
BACKGROUND:
In June 2025, the Town of Hillsborough (Town) conducted a request for proposals from qualified consultants to assist the Town with its long-term financial funding plan. The selected consultant is tasked to develop a plan that 1) addresses long-range capital investment and operating needs and 2) identifies budget strategies to address gaps, such as revenue enhancements and cost efficiency options, to support the Town’s fiscal sustainability and to fund new capital investments.
Objective
The Town will need additional revenue and funding sources to address several long-term capital and operating needs outlined in the City Council's goals. The priorities set by the city council to be considered in the long-term financial funding plan are:
• Town Hall Complex: The project is in the conceptual phase, receiving community ideas and input to create a new complex on the existing Town Hall site. The complex will provide community and meeting space, governmental offices, housing, and a police station. • Police Station: The police station requires modernization to meet compliance standards and ensure optimal functionality for police services.
• Storm Drain Master Plan: The Storm Drain master plan is paid for by the General Fund on a paygo basis, which cannot sustain this level of capital funding over the plan’s 30-year term. • Housing Development: The Town’s adopted Housing Element guides the housing targets, which include a site development in the Tobin Clark area.
• Other Projects, as defined.
Additionally, recent projections of the Town’s General Fund indicate that expenditure and capital spending exceed revenue growth, and the Town aims to ensure the fiscal sustainability of the -61-
Agenda Staff Report - Hillsborough City Council
August 11, 2025
General Fund. The goal is to address future volatility and longer-term commitments that are approaching over the next several years, including:
• Financial funding strategy to sustain increased required contributions to the Central County Fire Department JPA. The JPA is opening an additional fire station and hiring additional firefighters with funding from a three-year Federal SAFER grant. The Town’s annual contribution requirement will increase after the grant is completed.
• Financial funding strategy to sustain sufficient resources where revenue volatility exists, specifically for the Property Tax In-Lieu of Vehicle License Fees (VLF) shortfall that the State pays for in its annual budget.
• Financial funding strategy for other capital infrastructure paid for by the General Fund, which has no dedicated funding source, including maintenance of fire stations, government buildings, storm drains, and other infrastructure.
Request For Proposal
The Town received six proposals, and Town staff conducted interviews, as deemed necessary.
Staff recommends Urban Futures, Inc. (UFI) based on their qualifications, combined experience as a municipal advisory and financial consulting firm, and approach to meeting the project goals. The firm presented their approach to the Financial Advisory Committee (FAC) Subcommittee for the Long-Term Financial Funding Plan at their meeting on July 21, 2025. Staff provided an update to the FAC at their meeting on July 29, 2025.
FISCAL IMPACT: The adopted FY 2025-26 budget has allocated funding for this project in the General Fund professional services expense. The agreement is for time and materials and is estimated not to exceed $100,000.00.
ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review pursuant to the California Environmental Quality Act (CEQA) Guidelines sections 15378(b)(2) and 15378(b)(5) as ongoing administrative or organizational activities that will not result in direct or indirect physical changes in the environment.
ATTACHMENTS:
1. Resolution
2. Draft Professional Services Fee Agreement
PREPARED BY: Jan Cooke, Finance Director
RECOMMENDATION: Adopt a resolution approving and authorizing the City Manager to execute an agreement with Urban Futures, Inc. for financial consulting services in an amount not to exceed $100,000.00.
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RESOLUTION NO. 25-
RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH
APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH URBAN FUTURES, INC. FOR FINANCIAL CONSULTING SERVICES IN AN AMOUNT NOT TO EXCEED $100,000.00
WHEREAS, the Town of Hillsborough (“Town”) is in need of financial consulting services; and
WHEREAS, the Town will be conducting a long-range financial funding plan study to determine the future revenue requirements for the Town’s operations and long-term capital needs; and
WHEREAS, in anticipation of this preparing this funding plan, in June 2025, the Town conducted a request for proposal (RFP) process to obtain a qualified consultant to assist with the funding plan; and
WHEREAS, in response to the RFP, the Town received six proposals and conducted interviews; and
WHEREAS, through the RFP process, staff determined that Urban Futures, Inc. possessed the expertise necessary to prepare the study for the Town.
NOW THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby approves and authorizes the City Manager to execute an agreement with Urban Futures, Inc. for financial consulting services in an amount not to exceed $100,000.00.
Mayor of the Town of Hillsborough
Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 11th day of August 2025, by the following vote of the members thereof:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ABSTAIN: Councilmembers:
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ATTACHMENT 1
61236.01300\40844037.1
1 TOWN OF HILLSBOROUGH
PROFESSIONAL SERVICES AGREEMENT
This Agreement is made and entered into as of ______________ by and between the Town of Hillsborough, a municipal corporation organized and operating under the laws of the State of California with its principal place of business at 1600 Floribunda Ave., Hillsborough, CA 94010 (“Town”), and URBAN FUTURES, INC., a CORPORATION with its principal place of business at 1470 MARIA LANE (STE 315), WALNUT CREEK, CA 94596 (hereinafter referred to as “Consultant”). Town and Consultant are sometimes individually referred to as “Party” and collectively as “Parties” in this Agreement.
RECITALS
A. Town is a public agency of the State of California and is in need of professional services for the following project: FINANCIAL CONSULTING SERVICES (hereinafter referred to as “the Project”).
B. Consultant is duly licensed and has the necessary qualifications to provide such services.
C. The Parties desire by this Agreement to establish the terms for Town to retain Consultant to provide the services described herein.
AGREEMENT
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Services.
Consultant shall provide the Town with the services described in the Scope of Services attached hereto as Exhibit “A.”
2. Compensation.
a. Subject to paragraph 2(b) below, the Town shall pay for such services in accordance with the Schedule of Charges set forth in Exhibit “B.” b. In no event shall the total amount paid for services rendered by Consultant under this Agreement exceed the sum of $100,000. This amount is to cover all printing and related costs, and the Town will not pay any additional fees for printing expenses. Periodic payments shall be made within 30 days of receipt of an invoice which includes a detailed description of the work performed. Payments to Consultant for work performed will be made on a monthly billing basis.
3. Additional Work.
If changes in the work seem merited by Consultant or the Town, and informal consultations with the other party indicate that a change is warranted, it shall be processed in the following manner: a letter outlining the changes shall be forwarded to the Town by Consultant with a statement of estimated changes in fee or time schedule. An amendment to this Agreement shall be prepared by the Town and executed by both Parties before performance of such services, or -64-
ATTACHMENT 2
61236.01300\40844037.1
2 the Town will not be required to pay for the changes in the scope of work. Such amendment shall not render ineffective or invalidate unaffected portions of this Agreement.
4. Maintenance of Records.
Books, documents, papers, accounting records, and other evidence pertaining to costs incurred shall be maintained by Consultant and made available at all reasonable times during the contract period and for four (4) years from the date of final payment under the contract for inspection by Town.
5. Time of Performance.
Consultant shall perform its services in a prompt and timely manner and shall commence performance upon receipt of written notice from the Town to proceed (“Notice to Proceed”).
Consultant shall complete the services required hereunder as set forth in Exhibit C. The Notice to Proceed shall set forth the date of commencement of work.
6. Delays in Performance.
a. Neither Town nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the nonperforming party. For purposes of this Agreement, such circumstances include a Force Majeure Event. A Force Majeure Event shall mean an event that materially affects the Consultant’s performance and is one or more of the following: (1) Acts of God or other natural disasters occurring at the project site; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in the issuance of permits or approvals by governmental authorities that are required for the services); and (4) pandemics, epidemics or quarantine restrictions. For purposes of this section, “orders of governmental authorities”, includes ordinances, emergency proclamations and orders, rules to protect the public health, welfare and safety. b. Should such a Force Majeure Event occur, the non-performing party shall, within a reasonable time of being prevented from performing, give written notice to the other party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. Delays shall not entitle Consultant to any additional compensation regardless of the Party responsible for the delay. c. Notwithstanding the foregoing, the Town may still terminate this Agreement in accordance with the termination provisions of this Agreement.
7. Compliance with Law.
a. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local government, including Cal/OSHA requirements. b. If required, Consultant shall assist the Town, as requested, in obtaining and maintaining all permits required of Consultant by federal, state and local regulatory agencies. -65-
61236.01300\40844037.1
3 c. If applicable, Consultant is responsible for all costs of clean up and/ or removal of hazardous and toxic substances spilled as a result of his or her services or operations performed under this Agreement.
8. Standard of Care.
Consultant’s services will be performed in accordance with generally accepted professional practices and principles and in a manner consistent with the level of care and skill ordinarily exercised by members of the profession currently practicing under similar conditions.
9. Assignment and Subconsultant.
Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the Town, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination. Nothing contained herein shall prevent Consultant from employing independent associates, and subconsultants as Consultant may deem appropriate to assist in the performance of services hereunder. Any subconsultants Consultant intends to utilize in the performance of this Agreement shall be listed in Exhibit “B.” Consultant shall provide written notice and shall obtain the written consent of the Town prior to using or substituting a non-listed subconsultant in the performance of this Agreement. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.
10. Independent Contractor.
Consultant is retained as an independent contractor and is not an employee of Town. No employee or agent of Consultant shall become an employee of Town. The work to be performed shall be in accordance with the work described in this Agreement, subject to such directions and amendments from Town as herein provided. Any personnel performing the work governed by this Agreement on behalf of Consultant shall at all times be under Consultant’s exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, and workers’ compensation insurance.
11. Insurance. Consultant shall not commence work for the Town until it has provided evidence satisfactory to the Town it has secured all insurance required under this section. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has secured all insurance required under this section. a. Commercial General Liability
(i) The Consultant shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, Commercial General Liability Insurance, in a form and with insurance companies acceptable to the Town. (ii) Coverage for Commercial General Liability insurance shall be at least as broad as the following:
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61236.01300\40844037.1
4 (1) Insurance Services Office Commercial General Liability coverage (Occurrence Form CG 00 01) or exact equivalent. (iii) Commercial General Liability Insurance must include coverage for the following:
(1) Bodily Injury and Property Damage
(2) Personal Injury/Advertising Injury
(3) Premises/Operations Liability
(4) Products/Completed Operations Liability
(5) Aggregate Limits that Apply per Project
(6) Explosion, Collapse and Underground (UCX) exclusion deleted
(7) Contractual Liability with respect to this Agreement (8) Broad Form Property Damage
(9) Independent Consultants Coverage
(iv) The policy shall contain no endorsements or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; (3) products/completed operations liability; or (4) contain any other exclusion contrary to the Agreement.
(v) The policy shall give Town, its officials, officers, employees, agents and Town designated volunteers additional insured status using ISO endorsement forms CG 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage. (vi) The general liability program may utilize either deductibles or provide coverage excess of a self-insured retention, subject to written approval by the Town, and provided that such deductibles shall not apply to the Town as an additional insured. b. Automobile Liability
(i) At all times during the performance of the work under this Agreement, the Consultant shall maintain Automobile Liability Insurance for bodily injury and property damage including coverage for owned, non-owned and hired vehicles, in a form and with insurance companies acceptable to the Town.
(ii) Coverage for automobile liability insurance shall be at least as broad as Insurance Services Office Form Number CA 00 01 covering automobile liability (Coverage Symbol 1, any auto).
(iii) The policy shall give Town, its officials, officers, employees, agents and Town designated volunteers additional insured status. (iv) Subject to written approval by the Town, the automobile liability program may utilize deductibles, provided that such deductibles shall not apply to the Town as an additional insured, but not a self-insured retention.
c. Workers’ Compensation/Employer’s Liability
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61236.01300\40844037.1
5 (i) Consultant certifies that he/she is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and he/she will comply with such provisions before commencing work under this Agreement.
(ii) To the extent Consultant has employees at any time during the term of this Agreement, at all times during the performance of the work under this Agreement, the Consultant shall maintain full compensation insurance for all persons employed directly by him/her to carry out the work contemplated under this Agreement, all in accordance with the “Workers’ Compensation and Insurance Act,” Division IV of the Labor Code of the State of California and any acts amendatory thereof, and Employer’s Liability Coverage in amounts indicated herein. Consultant shall require all subconsultants to obtain and maintain, for the period required by this Agreement, workers’ compensation coverage of the same type and limits as specified in this section.
d. Professional Liability (Errors and Omissions)
At all times during the performance of the work under this Agreement the Consultant shall maintain professional liability or Errors and Omissions insurance appropriate to its profession, in a form and with insurance companies acceptable to the Town and in an amount indicated herein.
This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the Consultant. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer's duty to defend. e. Minimum Policy Limits Required
(i) The following insurance limits are required for the Agreement:
Combined Single Limit
Commercial General Liability $2,000,000 per occurrence/ $2,000,000 aggregate for bodily injury, personal injury, and property
damage
Automobile Liability $2,000,000 per occurrence for bodily injury and property damage
Employer’s Liability $2,000,000 per occurrence
Professional Liability $2,000,000 per claim and aggregate (errors and omissions)
(ii) Defense costs shall be payable in addition to the limits. (iii) Requirements of specific coverage or limits contained in this section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. Any available coverage shall be provided to the parties required to be named as Additional Insured pursuant to this Agreement. -68-
61236.01300\40844037.1
6 f. Evidence Required
Prior to execution of the Agreement, the Consultant shall file with the Town evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein. Such evidence shall include original copies of the ISO CG 00 01 (or insurer’s equivalent) signed by the insurer’s representative and Certificate of Insurance (Acord Form 25- S or equivalent), together with required endorsements. All evidence of insurance shall be signed by a properly authorized officer, agent, or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location and operations to which the insurance applies, and the expiration date of such insurance.
g. Policy Provisions Required
(i) Consultant shall provide the Town at least thirty (30) days prior written notice of cancellation of any policy required by this Agreement, except that the Consultant shall provide at least ten (10) days prior written notice of cancellation of any such policy due to non-payment of premium. If any of the required coverage is cancelled or expires during the term of this Agreement, the Consultant shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to the Town at least ten (10) days prior to the effective date of cancellation or expiration.
(ii) The Commercial General Liability Policy and Automobile Policy shall each contain a provision stating that Consultant’s policy is primary insurance and that any insurance, self-insurance or other coverage maintained by the Town or any named insureds shall not be called upon to contribute to any loss.
(iii) The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement. Consultant shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the effective date of this Agreement.
(iv) All required insurance coverages, except for the professional liability coverage, shall contain or be endorsed to provide a waiver of subrogation in favor of the Town, its officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against Town, and shall require similar written express waivers and insurance clauses from each of its subconsultants.
(v) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability.
Further the limits set forth herein shall not be construed to relieve the Consultant from liability in excess of such coverage, nor shall it limit the Consultant’s indemnification obligations to the Town and shall not preclude the Town from taking such other actions available to the Town under other provisions of the Agreement or law.
h. Qualifying Insurers
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7 (i) All policies required shall be issued by acceptable insurance companies, as determined by the Town, which satisfy the following minimum requirements:
(1) Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and admitted to transact in the business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.
i. Additional Insurance Provisions
(i) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by the Town, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
(ii) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, Town has the right but not the duty to obtain the insurance it deems necessary and any premium paid by Town will be promptly reimbursed by Consultant or Town will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, Town may cancel this Agreement.
(iii) The Town may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project. (iv) Neither the Town nor any of its officials, officers, employees, agents or volunteers shall be personally responsible for any liability arising under or by virtue of this Agreement.
j. Subconsultant Insurance Requirements. Consultant shall not allow any subcontractors or subconsultants to commence work on any subcontract until they have provided evidence satisfactory to the Town that they have secured all insurance required under this section. Policies of commercial general liability insurance provided by such subcontractors or subconsultants shall be endorsed to name the Town as an additional insured using ISO form CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by Consultant, Town may approve different scopes or minimum limits of insurance for particular subcontractors or subconsultants.
12. Indemnification.
a. To the fullest extent permitted by law, Consultant shall defend (with counsel of Town’s choosing), indemnify and hold the Town, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses except such loss or damage caused -70-
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8 by the sole negligence or willful misconduct of the Town. Consultant's obligation to indemnify shall survive expiration or termination of this Agreement and shall not be restricted to insurance proceeds, if any, received by Consultant, the Town, its officials, officers, employees, agents, or volunteers.
b. If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.
13. California Labor Code Requirements.
a. Consultant is aware of the requirements of California Labor Code Sections 1720 et seq. and 1770 et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., which require the payment of prevailing wage rates and the performance of other requirements on certain “public works” and “maintenance” projects (“Prevailing Wage Laws”). If the services are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. Consultant shall defend, indemnify and hold the Town, its officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory upon the Consultant and all subconsultants to comply with all California Labor Code provisions, which include but are not limited to prevailing wages (Labor Code Sections 1771, 1774 and 1775), employment of apprentices (Labor Code Section 1777.5), certified payroll records (Labor Code Sections 1771.4 and 1776), hours of labor (Labor Code Sections 1813 and 1815) and debarment of contractors and subcontractors (Labor Code Section 1777.1). The requirement to submit certified payroll records directly to the Labor Commissioner under Labor Code section 1771.4 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Section 1771.4.
b. If the services are being performed as part of an applicable “public works” or “maintenance” project, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Consultant and all subconsultants performing such services must be registered with the Department of Industrial Relations. Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants, as applicable. Notwithstanding the foregoing, the contractor registration requirements mandated by Labor Code Sections 1725.5 and 1771.1 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Sections 1725.5 and 1771.1. c. This Agreement may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements. Any stop orders issued by the Department of Industrial Relations against Consultant or any subcontractor that affect Consultant’s performance of services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the Town. Consultant shall defend, -71-
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9 indemnify and hold the Town, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the Department of Industrial Relations against Consultant or any subcontractor.
14. Verification of Employment Eligibility.
By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time, and shall require all subconsultants and sub-subconsultants to comply with the same.
15. Town Material Requirements.
Consultant is hereby made aware of the Town’s requirements regarding materials, as set forth in the Town’s Standard Details document, which are deemed to be a part of this Agreement.
16. Laws and Venue.
This Agreement shall be interpreted in accordance with the laws of the State of California.
If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state or federal court situated in the County of San Mateo, State of California. 17 Termination or Abandonment.
a. Town has the right to terminate or abandon any portion or all of the work under this Agreement by giving ten (10) calendar days written notice to Consultant. In such event, Town shall be immediately given title and possession to all original field notes, drawings and specifications, written reports and other documents produced or developed for that portion of the work completed and/or being abandoned. Town shall pay Consultant the reasonable value of services rendered for any portion of the work completed prior to termination. If said termination occurs prior to completion of any task for the Project for which a payment request has not been received, the charge for services performed during such task shall be the reasonable value of such services, based on an amount mutually agreed to by Town and Consultant of the portion of such task completed but not paid prior to said termination. Town shall not be liable for any costs other than the charges or portions thereof which are specified herein. Consultant shall not be entitled to payment for unperformed services, and shall not be entitled to damages or compensation for termination of work.
b. Consultant may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days’ written notice to Town only in the event of substantial failure by Town to perform in accordance with the terms of this Agreement through no fault of Consultant.
18 Documents.
Except as otherwise provided in “Termination or Abandonment,” above, all original field notes, written reports, Drawings and Specifications and other documents, produced or developed for the Project shall, upon payment in full for the services described in this Agreement, be furnished to and become the property of the Town.
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10 19. Organization.
Consultant shall assign Wing-See Fox as Project Manager. The Project Manager shall not be removed from the Project or reassigned without the prior written consent of the Town.
20. Limitation of Agreement.
This Agreement is limited to and includes only the work included in the Project described above.
21. Notice.
Any notice or instrument required to be given or delivered by this Agreement may be given or delivered by depositing the same in any United States Post Office, certified mail, return receipt requested, postage prepaid, addressed to:
TOWN:
Town of Hillsborough
1600 Floribunda Ave. Hillsborough, CA 94010
Attn: Jan Cooke, Finance Director
CONSULTANT:
URBAN FUTURES, INC.
dba ISOM ADVISORS
1470 MARIA LANE, SUITE 315
WALNUT CREEK, CA 94596
Attn: Wing-See Fox, Managing Director
and shall be effective upon receipt thereof.
22. Third Party Rights.
Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than the Town and the Consultant.
23. Equal Opportunity Employment.
Consultant represents that it is an equal opportunity employer and that it shall not discriminate against any employee or applicant for employment because of race, religion, color, national origin, ancestry, sex, age or other interests protected by the State or Federal Constitutions. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination.
24. Entire Agreement.
This Agreement, with its exhibits, represents the entire understanding of Town and Consultant as to those matters contained herein, and supersedes and cancels any prior or contemporaneous oral or written understanding, promises or representations with respect to those matters covered hereunder. Each party acknowledges that no representations, inducements, promises or agreements have been made by any person which are not incorporated herein, and that any other agreements shall be void. This Agreement may not be modified or altered except in writing signed by both Parties hereto. This is an integrated Agreement. -73-
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11 25. Severability.
If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable for any reason, such determination shall not affect the validity or enforceability of the remaining terms and provisions hereof or of the offending provision in any other circumstance, and the remaining provisions of this Agreement shall remain in full force and effect.
26. Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of the successors in interest, executors, administrators and assigns of each party to this Agreement. However, Consultant shall not assign or transfer by operation of law or otherwise any or all of its rights, burdens, duties or obligations without the prior written consent of Town. Any attempted assignment without such consent shall be invalid and void.
27. Non-Waiver.
The delay or failure of either Party at any time to require performance or compliance by the other Party of any of its obligations or agreements shall in no way be deemed a waiver of those rights to require such performance or compliance. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought. The waiver of any right or remedy with respect to any occurrence or event shall not be deemed a waiver of any right or remedy with respect to any other occurrence or event, nor shall any waiver constitute a continuing waiver.
28. Time of Essence.
Time is of the essence for each and every provision of this Agreement.
29. Town’s Right to Employ Other Consultants.
Town reserves its right to employ other consultants, including engineers, in connection with this Project or other projects.
30. Prohibited Interests.
Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, Town shall have the right to rescind this Agreement without liability. For the term of this Agreement, no director, official, officer or employee of Town, during the term of his or her service with Town, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.
31. Value Statement.
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12 By executing this Agreement, Consultant represents and warrants that it will comply with the values statement set forth in Exhibit “D” to the same extent as a member of the Town of Hillsborough City Council or of a Hillsborough board or committee. [SIGNATURES ON FOLLOWING PAGE]
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13 SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE TOWN OF HILLSBOROUGH
AND URBAN FUTURES, INC.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
TOWN OF HILLSBOROUGH URBAN FUTURES, INC.
By: By:
Doug Davis
City Manager Its: Managing Director
Printed Name:Wing-See Fox
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
City Attorney
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14 EXHIBIT A
Scope of Services
SCOPE OF WORK
• Development of Long-Term Financial Forecast Model(baseline and scenario development incorporating our revenue analysis, efficiency analysis, and capital financing options) • Evaluation and Analysis of Cost Efficiency Opportunities • Evaluation and Analysis of Revenue Enhancement Options (Parcel Tax, UUT, and Real Property Transfer Tax which would require converting to a Charter City, and General Obligation Bonds)
• Capital Improvement Plan Review and Development of Financing (Bond) Options and Sizing
• Development and Delivery of Presentation Book, Meetings, and Revisions/Updates to Work Product
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15 EXHIBIT B
Activity Schedule
SCHEDULE
The team members assigned to this project are available, prepared and fully able to complete the proposed scope of work in the timeline the Town requires. The dates for completing the various phases of the work will be finalized after an initial assessment of the Town’s financial data, input from the Town’s management team, and other considerations of the Town’s schedule. We anticipate executing on the timeline outlined below, following a kick-off meeting with Town staff and the provision of initial data and information requested from the Town. Note that the timelines will be executed simultaneously. DKG will focus with staff on the cost efficiency scope of work, and UFI will focus on developing the long-term financial forecast model, the revenue enhancement analysis, and the capital financing options scope of work.
Long-Term Financial Forecast Model Scope of Work Timeline Week 1 & 2 Analyze and compile the Town’s financial data and develop crosswalk between Town’s current and historical data and the forecast model framework.
Week 3 to 5
Develop ten-year forecast of Town’s revenues, expenses and fund balance, incorporate econometric data into model, adjust forecasting algorithms and build out dashboard/control panel.
Week 6 & 7 Deliver Town staff draft forecast model, and schedule meeting with Town finance staff to review draft model and discuss any issues.
Week 8 Revise draft forecast model based on Town input and resolved issues, audit draft model and deliver to Town final forecast model.
Week 9 &
10 Develop presentation for meetings with Subcommittee, Financial Advisory Committee and Town Council.
Week 11 &
12 Deliver final presentation to Subcommittee, Financial Advisory Committee and Town Council.
Cost Efficiency Scope of Work Timeline
Week 1 & 2 Review financials and analyze capacity to reduce budgeted expenditures while maintaining services; meet with identified employees on operations.
Week 3 Continue budgetary and operations analysis.
Week 4 Begin summary of findings and recommendations.
Week 5 Finalize and submit summary of findings and recommendations.
Week 6 & 7 Inventory Town services and levels of service (as defined by existing metrics).
Week 7 & 8 Prioritize services and service levels based on the inventory. -78-
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16 Week 9 &
10 Finalize prioritization and provide recommendations on service level adjustments to meet budget priorities. Develop presentation for meetings with Subcommittee, Financial Advisory Committee and Town Council.
Week 11 &
12 Deliver final presentation to Subcommittee, Financial Advisory Committee and Town Council.
Revenue Enhancement Analysis and Capital Financing Scope of Work Timeline Week 2 to 4 Collect data and analyze feasible revenue enhancement options and estimate revenue generation.
Week 5 Initial presentation to Town management on revenue analysis and options and receive feedback.
Week 6 & 7 Refine revenue analysis and options and develop capital financing options.
Week 8 Present refined revenue analysis and capital financing options to Town management.
Week 9 &
10 Develop presentation for meetings with Subcommittee, Financial Advisory Committee and Town Council
Week 11 &
12 Deliver final presentation to Subcommittee, Financial Advisory Committee and Town Council.
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17 EXHIBIT C
Schedule of Charges/Payments
Consultant will invoice Town on a monthly cycle. Consultant will include with each invoice a detained progress report that indicates the amount of budget spent on each task. Consultant will inform Town regarding any out-of-scope work being performed by Consultant. This is a time-andmaterials contract.
FEE ESTIMATE
Due to variables in every engagement, customization of our work product and to ensure the Town maintains flexibility to tailor the work to fit within the Town’s time and fiscal constraints, UFI and DKG propose to carry out its work on a time and materials basis with the overall costs of such services governed by the financial limits defined by the Town, utilizing the following professional service rate schedule:
UFI and DKG have designed the fee structure to accomplish the Scope of Work in the most costefficient manner based on the RFP, our proposal, and follow-up discussions with Town staff. Our estimated total fee for the Scope of Work is not-to-exceed $100,000 with the following breakout for each phase of the work plus contingency:
Phase of Work Primary Consultant Completing Work Fee
Estimate
Development of Long-Term Financial
Forecast Model Jim Morris, Managing Director $25,500
Evaluation and Analysis of Cost Efficiency
Opportunities Drew Corbett, Principal $17,500
Evaluation and Analysis of Revenue
Enhancement Options
Wing-See Fox, Managing Director
Jim Morris, Managing Director
$10,000
Capital Improvement Plan Review and
Development Financing (Bond) Options Wing-See Fox, Managing Director $12,000 UFI Hourly Rates
Title Hourly Rate
Managing Director $325
DKG Hourly Rates
Title Hourly Rate
Principal $225
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18 Development and Delivery of
Presentation Book, Meetings, and
Revisions/Updates to Work Product
All Team Members $10,000
Contingency (e.g., additional modeling
or scenarios, meetings, presentations,
iterative revisions to work product, etc.)
As may be needed $25,000
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
4 CONSENT CALENDAR
CITY COUNCIL MEETING
AUGUST 11, 2025
AGENDA STAFF REPORT
ITEM SUBJECT: RECEIVE LEGISLATIVE UPDATE
SUMMARY: The Town’s legislative consultant, California Public Policy Group (CPPG), has provided the attached Legislative Summary for July 2025 (Attachment 1).
Attachment 2 is a copy of the slides from the Cal Cities July 29, 2025 Webinar - Crunch Time at the Capitol: Key Bills for Cities After Summer Recess. Attachment 3 is a table outlining information that was requested on some of the bills referenced at the Cal Cities July 29, 2025 Webinar.
FISCAL IMPACT: There is no fiscal impact associated with this item.
ENVIRONMENTAL ISSUES: This item is exempt from environmental review under California Environmental Quality Act (CEQA) Guidelines sections 15378(b)(2) and 15378(b)(5) as ongoing administrative or organizational activities that will not result in direct or indirect physical changes to the environment.
ATTACHMENTS:
1. July 2025 CPPG Legislative Summary
2. Cal Cities July 29, 2025 Webinar Slides - Crunch Time at the Capitol: Key Bills for Cities After Summer Recess
3. Positions on bills referenced at the Cal Cities July 29, 2025 Webinar PREPARED BY: Lisa Natusch, City Clerk
RECOMMENDATION: Receive the July 2025 Legislative Update. -83-
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 1 Date: August 5, 2025
To: Doug Davis, Town Manager
Town of Hillsborough
From: Dane Hutchings
Founder + CEO
California Public Policy Group
Re: CPPG Legislative Summary — July 2025
LEGISLATIVE UPDATE
Legislative Process Halts for Summer Recess
July 18 marked the last day that policy committees could meet and report bills to the Floor and the day that the Legislature adjourned for its Summer Recess. Once it reconvenes on August 18, the Legislature will begin its final 30 days of the first year of the 2025-2026 legislative session. The last day for fiscal committees to meet and report bills to the Floor is August 29, after which only Floor session will occur until the Legislature adjourns for the year on September 12.
The final month of session will be hectic as the legislative process begins to move quickly and “eleventh hour” maneuvering is often on display. There will be times when the rules are suspended and when committees will meet “off the floor,” meaning that Legislators will hold ad-hoc committee hearings during Floor session. Often during this period, the Governor’s and the Legislature’s policy priorities are highlighted, which can lead to disagreements, and voting may become even more politically driven. Legislative rules may be waived to allow for bills to continue to move after deadlines have passed, including potentially for “gut-and-amend” bills. This is when a bill is altered to do something completely different from what it had originally been intended to do.
As of August 4, more than 1,000 bills are still actively making their march through the legislative process, while 255 have been chaptered, zero have been vetoed, and approximately 1,200 are no longer moving.
ADMINISTRATION UPDATE
On July 25, Governor Gavin Newsom issued a press release announcing that he had met with members of the Texas State Legislature in response to Texas redrawing its Congressional maps to gain more Republican seats. On July 31, Governor Newsom announced during a press conference that he plans to call a special election this November to ask voters to approve new Congressional districts.
ACTIVE POSITIONED LEGISLATION
• AB 370 (Carrillo) California Public Records Act: cyberattacks. o Location: 07/14/2025 - Assembly CHAPTERED
o Position: Support
• AB 468 (Gabriel) Crimes: looting.
o Location: 07/15/2025 - Senate Appropriations
o Position: Support
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ATTACHMENT 1
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 2 • AB 470 (McKinnor) Telephone corporations: carriers of last resort. o Location: 07/17/2025 - Senate Appropriations
o Position: Neutral
• AB 544 (Davies) Electric bicycles: required equipment. o Location: 07/14/2025 - Assembly CHAPTERED
o Position: Support
• AB 650 (Papan) Planning and zoning: housing element: regional housing needs allocation. o Location: 07/14/2025 - Senate APPR. SUSPENSE FILE
o Position: Support
• AB 1026 (Wilson) Public utilities: electrical corporations: energization. o Location: 07/09/2025 - Senate Appropriations
o Position: Support
• AB 1243 (Addis) Polluters Pay Climate Superfund Act of 2025. o Location: 04/22/2025 - Assembly Judiciary
o Position: Support
• SB 684 (Menjivar) Polluters Pay Climate Superfund Act of 2025. o Location: 04/03/2025 - Senate Judiciary
o Position: Support
LOOKING FORWARD
• September 12: Last day for the Legislature to pass bills; end of the 2025 legislative session • October 12: Last day for the Governor to sign or veto bills • January 1: All legislation signed into law in 2025, unless otherwise excepted, goes into effect • January 5: The Legislature reconvenes for the second year of the 2025-26 legislative session -85-
Strengthening California Cities
through Advocacy and Education
Webinars for Cities
Crunch Time at the Capitol:
Key Bills for Cities After
Summer Recess
July 29, 2025
Speakers:
Cal Cities Legislative Team
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ATTACHMENT 2
Follow us
Housekeeping Notes
• This session is being recorded
• Attendees are muted
• Q&A is available throughout the webinar
• To write in a question, select the Q&A button on your tool bar
• Following the presentation, the recording and slides will be shared with registrants
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CONFERENCE
AND EXPO
LONG BEACH, CA
OCTOBER 8 -10, 2025
REGISTER NOW
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Jason Rhine
Senior Director, Legislative Affairs
League of California Cities
-89-
Lobbyists
Damon Conklin
Legislative Advocate, Transportation,
Communications, and Public Works
[email protected]
Caroline Grinder
Legislative Advocate,
Community Services
[email protected]
Brady Guertin
Legislative Advocate, Housing,
Community, and Economic Development
[email protected]
Johnnie Pina
Legislative Advocate, Governance,
Transparency, and Labor Relations
[email protected]
Melissa Sparks-Kranz
Legislative Advocate,
Environmental Quality
[email protected]
Ben Triffo
Legislative Advocate,
Revenue and Taxation
[email protected]
Jolena Voorhis
Legislative Advocate,
Public Safety
[email protected]
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Follow us
How to Submit Letters to the Legislature
1. Submit Letter via Legislative Portal
Visit California Legislature Position Letter Portal
(https://calegislation.lc.ca.gov/Advocates/faces/index.xhtml) Upload your letter with the appropriate bill number and position.
2. Email a Copy to Cal Cities
After submitting your letter to the portal, email a copy of your letter to [email protected].
3. Why this Matters
Strengthens Cal Cities’ voice in the Capitol.
Enhances our targeted outreach.
Ensures accurate bill summaries and fact sheets.
SAMPLE Letters can be found at calcities.org/advocacy/bill-search -91-
Agenda
• Transportation, Communications, and Public Works
• Revenue and Taxation
• Public Safety
• Housing, Community, and Economic Development
• Governance, Transparency, and Labor Relations
• Environmental Quality
• Community Services
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Strengthening California Cities through Advocacy and Education Follow us www.calcities.org Transportation,
Communications, and
Public Works
Damon Conklin
Legislative Advocate
[email protected] • 916-658-8234
-93-
Public infrastructure
AB 476 (Gonzalez, Mark) Recyclers: copper theft.
This measure would enhance regulations to reduce metal theft and improve enforcement.
SB 74 (Seyarto) Infrastructure gap funding.
This measure would provide critical resources for projects already started needing additional funding for completion.
Cal Cities Position: Sponsor/Support
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Advanced clean fleets regulation
AB 620 (Jackson) Advanced Clean Fleets: Rental Vehicles.
This measure would allow renting zero-emission vehicles, rather than purchasing them, when complying with the ACF regulation.
Cal Cities Position: Support
-95-
Energy permitting
SB 283 (Laird) BESS: Permitting.
This measure would require the state to update the California Building Standards Code to adopt provisions at least as protective as the most recently published National Fire Protection Association (NFPA) 855 standards regarding battery energy storage systems (BESS).
Cal Cities Position: Support
-96-
Strengthening California Cities
through Advocacy and Education Follow us www.calcities.org QUESTIONS?
Damon Conklin
Legislative Advocate
-97-
[email protected] • 916-658-8234
Strengthening California Cities through Advocacy and Education Follow us www.calcities.org Revenue and Taxation
Ben Triffo
Legislative Advocate
[email protected] • 916-738-9062
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Short-term rentals
SB 346 (Durazo) Local agencies: transient occupancy taxes:
short-term rental facilitator.
This measure would require short-term rental facilitators, at the request of a city, to provide the property address of a short-term rental listing to a city and would provide cities audit authority for transient occupancy taxes collected and remitted by short-term rental facilitators.
Cal Cities Position: Sponsor/Support
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Utility user tax
AB 330 (Rogers) Local Prepaid Mobile Telephony Services Collection Act.
This measure would extend the sunset date on the Local Prepaid Mobile Telephony Services Surcharge Collection Act to
January 1, 2031.
Cal Cities Position: Support
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Small business recovery
AB 265 (Caloza) Small Business and Nonprofit Recovery Fund Act.
This measure would create the Small Business and Nonprofit Recovery Fund Act to support small businesses and nonprofits affected by a state of emergency.
Cal Cities Position: Support
-101-
Property tax
SB 710 (Blakespear) Property taxation: active solar energy systems: extension.
This measure would extend the property tax exemption for solar panels and storage for homes and businesses by five years and cap the size of energy systems eligible for the exemption to 1 MW.
Cal Cities Position: Shifted to Neutral
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Sales and use tax
SB 86 (McNerney) California Alternative Energy and Advanced Transportation Financing Authority Act: sales and use tax exclusion.
This measure would extend the sales and use tax exemption authorized under the Act by five years.
Cal Cities Position: Opposition removed
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Strengthening California Cities
through Advocacy and Education Follow us www.calcities.org QUESTIONS?
Ben Triffo
Legislative Advocaate
[email protected] • 916-738-9062
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Strengthening California Cities through Advocacy and Education Follow us www.calcities.org Public Safety
Jolena Voorhis
Legislative Advocate
[email protected] • 916-658-8252
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Cannabis
AB 8 (Aguiar-Curry) Intoxicating hemp.
This measure would establish a lower total THC concentration for hemp products, require testing to ensure compliance with THC concentration, and ensure compliance with tax laws and
enhancing enforcement measures against those who violate established standards.
Cal Cities Position: Support
-106-
Fire insurance/wildfires
AB 1 (Connolly) Residential property insurance: wildfire risk.
This measure would require the Department of Insurance to include wildfire mitigation in the next draft of the Catastrophe Modeling regulations.
Cal Cities Position: Support
AB 75 (Calderon) Residential property insurance images.
This measure would require insurers to notify residential property insurance policyholders that aerial images may be taken or obtained of the insurance property.
Cal Cities Position: Support
-107-
Fire insurance/wildfires
AB 888 (Calderon) California Safe Homes Grant Program.
This measure would create the California Safe Homes Grant Program which would provide funding to individuals, cities, counties and special districts for roof hardening and home hardening.
Cal Cities Position: Support
-108-
Public safety
AB 992 (Irwin) Peace Officers.
This measure would require police officers hired on or after January 1, 2031, to obtain specified college degrees including a degree in modern policing, within 36 months of obtaining their basic certificate from the Commission on Peace Officers Standards and Training (POST).
Cal Cities Position: Support
-109-
Strengthening California Cities
through Advocacy and Education Follow us www.calcities.org QUESTIONS?
Jolena Voorhis
Legislative Advocate
[email protected] • 916-658-8252
-110-
Strengthening California Cities through Advocacy and Education Follow us www.calcities.org Housing, Community, and
Economic Development
Brady Guertin
Legislative Advocate
[email protected] • 916-658-8255
-111-
Planning and zoning
AB 650 (Papan) Planning and zoning: housing element: regional housing needs allocation.
This measure would significantly improve the housing element review process by encouraging local jurisdictions to begin planning earlier and provide greater clarity and certainty to a difficult and complex process.
Cal Cities Position: Sponsor/Support
-112-
Planning and zoning
SB 79 (Wiener) Planning and zoning: housing development:
transit-oriented development.
This measure would require cities to approve higher-density residential projects up to seven stories near specific public transit stops, regardless of local zoning codes, limit the use of local development standards on the proposed project, and allow transit agencies to adopt zoning standards over residential and commercial development on property they own or lease near transit stops.
Cal Cities Position: Oppose
-113-
Housing finance
AB 736 (Wicks) The Affordable Housing Bond Act of 2026.
This measure would create a $10 billion housing bond to finance affordable rental housing and homeownership programs.
Cal Cities Position: Support
-114-
Land use
AB 1061 (Quirk-Silva) Housing developments: urban lot splits:
historical resources.
This measure would limit some of the historical district exemptions for SB 9 projects (urban lot splits on single-family zoned parcels).
Instead of disallowing SB 9 projects in historic districts, local governments may only disallow the project if it is on a historical landmark or if it is a contributing structure within a historic district.
Cal Cities Position: Oppose
-115-
Land use
AB 507 (Haney) Adaptive reuse: streamlining: incentives.
This measure would require local governments to ministerially approve adaptive reuse office-to-residential conversion projects statewide. It would also exempt these projects from all impact fees not directly related to the impacts resulting from the site's change of use from non-residential to residential or mixed-use.
Cal Cities Position: Oppose
-116-
Strengthening California Cities
through Advocacy and Education Follow us www.calcities.org QUESTIONS?
Brady Guertin
Legislative Advocate
[email protected] • 916-658-8255
-117-
Strengthening California Cities through Advocacy and Education Follow us www.calcities.org Governance,
Transparency, and Labor
Relations
Johnnie Pina
Legislative Advocate
[email protected] • 916-658-8214
-118-
Ralph M. Brown Act
SB 707 (Durazo) Open meetings: meeting and teleconference requirements.
This bill would make various changes to the Ralph M. Brown Act (Brown Act).
Cal Cities Position: Oppose Unless Amended
-119-
Ralph M. Brown Act
Positive:
• SB 239 – Teleconferencing flexibility for advisory bodies • AB 2449 sunset removal
• Social media standards sunset removal
• Multi- jurisdictional body teleconferencing flexibility • Expands emergency meeting laws
• Expands AB 2449
• Clarifies when a “zoom bomber” can be removed
• Expands AB 316 provisions to local states of emergency • Codifies AG opinion
-120-
Ralph M. Brown Act
Negative:
• Eligible Legislative body (as defined)
• A city council of a city with a population of 30,000 or more • A city council of a city located in a county with a population of 600,000 or more
Required remote public comment
Translation of agendas – “Applicable languages”
Bulletin Board Requirement for community translations Required outreach to the community
Specific website posting requirements
Provide assistance to receive interpretation services -121-
Ralph M. Brown Act
Negative:
• Required report outs from advisory bodies
• Requirement to give each council member a copy of the Brown Act
• Required report out of compensation of specified employees • Extends from 9 months to 12 months the time a petitioner can submit a cease and desist letter for a Brown Act violation • No special meetings regarding salaries and comp
• Removes language stating that an agenda need not provide an opportunity for members of the public to address the legislative body on any item that has already been considered by a
committee
-122-
Strengthening California Cities through Advocacy and Education Follow us Employee relations
AB 339 (Ortega) Local public employee organizations: notice requirements.
This measure would require the governing body of a public agency to give the recognized employee organization no less than 60 days’ written notice before issuing a request for proposals, request for quotes, or renewing or extending an existing contract to perform services that are within the scope of work of the job classifications represented by the recognized employee
organization.
Cal Cities Position: Oppose
-123-
Strengthening California Cities through Advocacy and Education Follow us Employee relations
AB 340 (Ahrens) Employer-employee relations: confidential communications.
This measure would prohibit a local public agency employer from questioning any employee or employee representative regarding communications made in confidence between an employee
and an employee representative in connection with
representation relating to any matter within the scope of the recognized employee organization’s representation.
Cal Cities Position: Oppose
-124-
Strengthening California Cities through Advocacy and Education Follow us Employee relations
AB 1109 (Kalra) Evidentiary privileges: union agent-represented worker privilege.
This measure would establish a privilege between a union agent and a represented employee or represented former employee to refuse to disclose any confidential communication between the employee or former employee and the union agent made while the union agent was acting in the union agent’s representative capacity.
Cal Cities Position: Oppose
-125-
Workplace surveillance
AB 1331 (Elhawary) Workplace surveillance.
This measure would regulate the use of workplace surveillance tools, as broadly defined, by both public and private employers. -126-
Cal Cities Position: Oppose
Local agency officials: training
SB 827 (Gonzalez) Local agency officials: training.
This measure would make changes to existing ethics training requirements and require certain local agency officials to receive at least two hours of fiscal and financial training at least once every two years.
Cal Cities Position: Oppose Unless Amended
-127-
Strengthening California Cities
through Advocacy and Education Follow us www.calcities.org QUESTIONS?
Johnnie Pina
Legislative Advocate
[email protected] • 916-658-8214
-128-
Strengthening California Cities through Advocacy and Education Follow us www.calcities.org Environmental Quality
Melissa Sparks-Kranz
Legislative Advocate
[email protected] • 916-658-8232
-129-
Wildfire preparedness
AB 846 (Connolly) Incidental take: wildfire preparedness activities.
This measure would create a voluntary streamlined approach to streamline any necessary environmental permits from the California Department of Fish and Wildlife.
Cal Cities Position: Sponsor/Support
AB 300 (Lackey) Fire hazard severity zones: State Fire Marshal.
This measure would require fire hazard severity zone maps to be updated every five years.
AB 261 (Quirk-Silva) Fire safety: fire hazard severity zones: State Fire Marshal.
This measure would allow the State Fire Marshal to confer with entities on the development of the fire hazard severity zone designations between periodic reviews of the maps being updated.
Cal Cities Position: Support
-130-
Water & PFAS
SB 454 (McNerney) State Water Resources Control Board: PFAS mitigation program.
This measure would create the PFAS Mitigation Fund to support cities and local water agencies treat and remediate PFAS from water and wastewater supplies.
Cal Cities Position: Co-Sponsor/ Support
SB 682 (Allen) Environmental health: product safety: perfluoroalkyl and polyfluoroalkyl substances.
This measure would create regulations by January 1, 2029, to restrict certain perfluoroalkyl and polyfluoroalkyl substances (PFAS) in products with regulatory oversight by the Department of Toxic Substance Control.
Cal Cities Position: Support
-131-
Waste discharge
SB 601 (Allen) Water: waste discharge.
This bill would revise the requirements to demonstrate enrollment with NPDES to include a new definition of ‘nexus waters’, which currently includes groundwater and swales and erosional features that could impact municipal stormwater permittees should they seek a change to their permit or pursue a new permit. The bill would require that any water quality standard or total maximum daily load (TMDLs) shall include nexus waters as of January 19, 2025, and shall remain in effect until a more stringent standard is adopted. The bill would establish the Penalty Adjustment Account and allow the state to increase penalties annually. The bill is anticipated to be amended to remove the citizen enforcement provision, however the author has indicated including a provision to allow a public prosecutor to pursue litigation if a violation of the law occurs.
Cal Cities Position: Oppose
-132-
Coastal planning
AB 996 (Pellerin) California Resources: sea level rise plans.
This measure would clarify that existing sea level rise information, assessments, or plans can meet the sea level rise plan components required in law. This measure would establish a voluntary early consultation process for coastal local governments to consult with the Coastal Commission to receive written recommendations on what would preclude approval of an LCP, for purposes of the sea level rise plan update.
Cal Cities Position: Sponsor/Support
-133-
Air quality
AB 735 (Carrillo) & SB 415 (Reyes) Planning and zoning: logistics use: truck routes.
These measures would clean up AB 98 (2024), the warehouse siting and design bill. These measures would include the following:
• Allow cities with population of less than 50,000 to have until 2035 to complete the circulation element update;
• Clarifies truck routes include specific roads predominantly used for commercial, agricultural, or industrial uses; and
• Includes good-faith-enforcement language but allows greater cost recovery on local governments of Attorney General’s investigation and prosecution costs.
Cal Cities Position: Concerns, seeking amendments
-134-
@calcities @calcities @calcities.org
Cap-and-trade reauthorization: climate safe
infrastructure coalition priorities
• Local land use infrastructure to support high
density and infill development
• Climate adaptation and sea level rise
infrastructure
• Organic waste management
• Clean local transportation
• Wildfire prevention and resilience
• Transit and rail infrastructure
Action Alert: Cal Cities encourages cities to submit a
letter of support to their Legislators based on the
local government priorities, using the sample letters
at the following bill pages. Please visit our take
action page for the action alert information.
-135-
Strengthening California Cities
through Advocacy and Education Follow us www.calcities.org QUESTIONS?
Melissa Sparks-Kranz
Legislative Advocate
[email protected] • 916-658-8232
-136-
Strengthening California Cities through Advocacy and Education Follow us www.calcities.org Community Services
Caroline Grinder
Legislative Advocate
[email protected] • 916-580-5075
-137-
Recovery housing
AB 424 (Davies) Alcohol and other drug
programs: complaints.
AB 492 (Valencia) Alcohol and drug
programs: licensing.
SB 35 (Umberg) Alcohol and drug
programs.
SB 329 (Blakespear) Alcohol and drug
recovery or treatment facilities:
investigations.
Cal Cities Position: Sponsor/Support
-138-
Follow us
Murals
SB 456 (Ashby) Contractors:
exemptions: muralists.
This measure would exempt
muralists from having to obtain a
contractor’s license through the
California State Licensing Board
before being commissioned for
public and private art projects.
Cal Cities Position:
Co-Sponsor/Support
This proposed project in the City of Milpitas was
put on hold due to these licensure
requirements.
-139-
Follow us
Homelessness
Behavioral Health
AB 348 (Krell) Full-service partnerships.
AB 543 (González) Medi-Cal: street
medicine.
Abandoned Vehicles
AB 630 (González) Abandoned recreational vehicles.
SB 692 (Arreguín) Vehicles: homelessness.
SB 748 (Richardson) Encampment Resolution Funding (ERF).
Abandoned Shopping Carts
SB 753 (Cortese) Shopping and laundry carts
Cal Cities Position: Support
-140-
Two-year bills
SB 16 (Blakespear) Ending Street Homelessness Act.
This measure would impose several significant new requirements on the state’s flagship homelessness grant program, the Homeless Housing, Assistance, and Prevention (HHAP) program.
Cal Cities Position: Oppose
SB 569 (Blakespear) Department of Transportation: homeless encampments.
This measure would increase communication between the
Department of Transportation and local governments to address encampments on state property.
Cal Cities Position: Co-sponsor/Support
-141-
Strengthening California Cities
through Advocacy and Education Follow us www.calcities.org QUESTIONS?
Caroline Grinder
Legislative Advocate
-142-
[email protected] • 916-580-5075
Strengthening California Cities
through Advocacy and Education Follow us www.calcities.org
THANK YOU
Jason Rhine
Senior Director, Legislative Affairs
-143-
[email protected]
Additional Information Requested of Staff on the Following Bills Referenced at the Cal Cities July 29, 2025 Webinar
Crunch Time at the Capitol: Key Bills for Cities After Summer Recess 1 8/7/25
Bill Cal Cities Position Town Position Notes
SB 74 (Seyarto) Infrastructure gap
funding
Support No position
AB 620 (Jackson) Advanced Clean
Fleets: Rental Vehicles
Support No position
SB 346 (Durazo) Local agencies:
transient occupancy taxes, short-term
rental facilitator
Sponsor/Support No position
AB 1061 (Quirk-Silva) Housing
developments: urban lot splits and
historical resources
Oppose No position The Town does not have any
historical districts as defined in
this legislation so would be
unaffected.
SB 707 (Durazo) Open meetings:
meeting and teleconference requirements
Oppose unless amended Oppose
AB 339 (Ortega) Local public employee
organizations: notice requirements
Oppose No position
SB 454 (McNerney) State Water
Resources Control Board: PFAS
mitigation program
Co-sponsor/Support No position
SB 682 (Allen) Environmental Health:
product safety: perfluoroalkyl and
polyfluoroalkyl substances
Support No position
-144-
ATTACHMENT 3
Additional Information Requested of Staff on the Following Bills Referenced at the Cal Cities July 29, 2025 Webinar
Crunch Time at the Capitol: Key Bills for Cities After Summer Recess 2 8/7/25
Bill Cal Cities Position Town Position Notes
AB 1 (Connolly) Residential property
insurance: wildfire risk
Support No position Letter of support to be drafted
AB 75 (Calderon) Residential property
insurance images
Support No position Letter of support to be drafted
AB 888 (Calderon) California Safe
Homes Grant Program
Support No position
AB 650 (Papan) Planning and zoning:
housing element: regional housing needs
allocation
Sponsor/Support Support
SB 79 (Wiener) Planning and zoning:
housing development: transit-oriented
development
Oppose No position Would not directly affect Town
development as we do not
have transit-oriented
development areas, as
described. (Bill is outside of
the scope of our current
adopted legislative platform.)
-145-
TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
5 CONSENT CALENDAR
CITY COUNCIL MEETING
AUGUST 11, 2025
AGENDA STAFF REPORT
ITEM SUBJECT: FORM AN AD HOC SUBCOMMITTEE OF THE CITY COUNCIL TO REVIEW
REGULATIONS OF COMMERCIAL ACTIVITY IN THE TOWN AND APPOINT TWO
COUNCILMEMBERS TO THE SUBCOMMITTEE
SUMMARY: This agenda item will formalize the creation of an ad hoc subcommittee of the City Council for the purpose of reviewing the Town’s current policies and regulations related to commercial activities permitted in the town and determine whether there is a need for change(s) or update(s).
The ad hoc subcommittee will begin by refining the purpose of regulating commercial activities in the town to ensure that any changes recommended align with the agreed upon purpose. The ad hoc subcommittee will then review existing documentation, such as the Hillsborough Municipal Code, Town website, and Town records related to the businesses that currently operate in the town to determine if the existing regulations are sufficient. The ad hoc subcommittee will return to the City Council within six months with an update and any progress on recommendations resulting from their efforts. At the time of this report, a City Council Study Session has been scheduled for November 17, 2025 for discussion, subject to change if needed.
The staff liaisons to the ad hoc subcommittee will be City Manager Doug Davis and Assistant City Attorney Mark Hudak. The ad hoc subcommittee will work with representatives from other departments as necessary.
FISCAL IMPACT: There is no fiscal impact associated with this agenda item.
ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review under California Environmental Quality Act (CEQA) Guidelines sections 15378(b)(2) and 15378(b)(5) as ongoing administrative or organizational activities that will not result in direct or indirect physical changes in the environment.
ATTACHMENTS: None
PREPARED BY: Doug Davis, City Manager
RECOMMENDATION: By motion, form an ad hoc subcommittee of the City Council to review regulations of commercial activity in the town and appoint Councilmember Adams and Vice Mayor Ragsdale to the ad hoc subcommittee.
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
6 CONSENT CALENDAR
CITY COUNCIL MEETING
AUGUST 11, 2025
AGENDA STAFF REPORT
ITEM SUBJECT: RESOLUTION AWARDING TO AND AUTHORIZING THE CITY MANAGER TO
EXECUTE A CONTRACT WITH LVI ENGINEERING FOR THE MACADAMIA ACCESS ROAD REPAIR PROJECT – PHASE 1 (EAST) IN THE AMOUNT OF $982,425.00, WITH A 10% CONTINGENCY IN THE AMOUNT OF $98,242.50, FOR TOTAL COST OF $1,080,667.50, AND APPROVAL OF A BUDGET AMENDMENT, REALLOCATING THE APPROVED FY 2025-26
BUDGET SPENDING FROM THE CAPITAL FUND TO THE SEWER FUND, UNDER CEQA GUIDELINE 15301
SUMMARY: The 2022-2023 winter storms caused several slip-outs along the Macadamia access roads which are located in the Macadamia and Crocker open space areas. A total of nine slip-outs were observed over a stretch of approximately 4,000 feet of the dirt access road. Repair of these access roads are necessary to maintain access to the Town’s public sewer main located within the easement and to maintain sanitary sewer services to Town residents.
During design development, it was determined that regulatory environmental permitting was required at some slip-out locations. Phasing construction will allow six of the nine sites to be completed this summer as part of Phase 1 (East) (“Project”). The scope of the Project includes installation of new soldier pile retaining walls, repairing an existing retaining wall, excavation, and associated drainage.
This project was advertised in accordance with the Public Contract Code and on the Town’s website and the local newspaper. A total of six bids were received and opened on July 23, 2025, two of which were non-responsive. The bid results were announced in the Town Hall Council Chambers, in accordance with the Town’s policies and procedures. The bid summary is as follows:
LVI Engineering, Inc. $980,425.00
JDB & Sons Construction (non-responsive) $998,700.00
Brannon Corporation $1,049,760.00
Farallon Company Engineering $1,121,520.00
B and D Excavation and Construction (non-responsive) $1,068,955.00 Granite Rock Company $1,452,205.00
Of the bids received for this project LVI Engineering, Inc. (“LVI”) was confirmed by staff to be the lowest responsible bidder submitting a responsive bid. Based on staff analysis of the low bid, and reference checks with other municipalities, it was determined that LVI’s qualifications and experience levels are satisfactory to perform all works associated with this project. -149-
Agenda Staff Report - Hillsborough City Council
August 11, 2025
FISCAL IMPACT: It is recommended that funding be allocated from the Sewer Fund for the Macadamia Access Roads Repairs (CIP #719). The FY 2025-26 Adopted Budget has this project allocated from the Capital Fund, so this would also be a budget amendment into the Sewer Fund.
The Macadamia Access Road’s sole purpose is to provide public sewer service to the neighboring community, they are not used by the public, and should they continue to degrade (or fail) then the sewer infrastructure will be significantly damaged. This includes a 10% contingency of $98,242.50 to be used if necessary, bringing the total allocation to $1,080,667.50. Sufficient funds are available within the approved budget to cover this project. The Town is currently coordinating with the Town’s insurance company and FEMA to determine the reimbursement potential for these expenditures.
ENVIRONMENTAL ISSUES: The proposed action is categorically exempt from the California Environmental Quality Act (CEQA) Guidelines according to Section 15301 of the California Code of Regulations.
ATTACHMENTS: Resolution
PREPARED BY: Natalie Gribben, Deputy Director of Public Works RECOMMENDATION: Adopt the resolution awarding to and authorizing the City Manager to execute the contract with LVI Engineering, Inc. for the Macadamia Access Road Repair Project – Phase 1 (East) in the amount of $982,425.00, with a 10% contingency of $98,242.50 if needed, for a total construction budget of $1,080,667.50, and approve a budget amendment, reallocating the approved FY 2025-26 Budget spending from the Capital Fund to the Sewer Fund. -150-
RESOLUTION NO. 25-
RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH
AWARDING TO AND AUTHORIZING THE CITY MANAGER TO EXECUTE A
CONTRACT WITH LVI ENGINEERING FOR THE MACADAMIA ACCESS ROAD REPAIR PROJECT – PHASE 1 (EAST) IN THE AMOUNT OF $982,425.00, WITH A 10% CONTINGENCY IN THE AMOUNT OF $98,242.50, FOR TOTAL COST OF $1,080,667.50, AND APPROVAL OF A BUDGET AMENDMENT, REALLOCATING THE APPROVED FY 2025-26 BUDGET SPENDING FROM THE CAPITAL FUND TO THE SEWER FUND, UNDER CEQA GUIDELINE 15301
WHEREAS, the Town of Hillsborough (“Town”) maintains the Town’s sanitary sewer system; and
WHEREAS, the 2022-2023 winter storms caused several slip-outs along the Macadamia access roads open space areas; and
WHEREAS, repair of these access roads are necessary to maintain access to the Town’s public sewer main located within the easement; and WHEREAS, the Macadamia Access Road Repair Project – Phase 1 (East) (“Project”) will restore six of the nine slip-out locations, including installation of new soldier pile retaining walls, repairing an existing retaining wall, excavation, and associated drainage; and
WHEREAS, plans and specifications have been developed for improvements to restore the access road and protect the sanitary sewer system; and WHEREAS, the Project was publicly bid and advertised in accordance with the Public Contracts Code, and the Town received six bids for the Project; and WHEREAS, LVI Engineering, Inc. (“LVI”) was the lowest responsible bidder submitting a responsive bid in the amount of $980,425.00, and
WHEREAS, staff conducted an analysis of the bid and verified that LVI’s qualifications and experience levels are satisfactory; and
WHEREAS, funding will be reallocated from the Capital Fund to the Sewer Fund for the Macadamia Access Roads Repairs (CIP #719).
NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby awards to and authorizes the City Manager to execute the contract with LVI Engineering, Inc. for the Macadamia Access Road Repair Project – Phase 1 (East) in the amount of $982,425.00, with a 10% contingency of $98,242.50 if needed, for a total construction budget of $1,080,667.50, and approve a budget amendment, reallocating the approved FY 2025-26 Budget spending from the Capital Fund to the Sewer Fund, under CEQA Guideline 15301.
-151-
2 Mayor of the Town of Hillsborough
Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 11th day of August 2025, by the following vote of the members thereof:
AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-152-
TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
7 CONSENT CALENDAR
CITY COUNCIL MEETING
AUGUST 11, 2025
AGENDA STAFF REPORT
ITEM SUBJECT: RESOLUTION APPROVING THE SUMMARY VACATION OF AN UNUSED SEGMENT OF AN EXISTING FIVE-FOOT-WIDE PUBLIC UTILITY EASEMENT AT 259 BRIDGE ROAD, UNDER CEQA GUIDELINE 15301
SUMMARY: 259 Bridge Road is a private property that currently has a Town-owned and maintained sanitary sewer main running along the southern property line. The sewer main currently resides within an existing five-foot-wide public utility easement but only runs within a portion of it. To utilize a larger portion of the parcel, the owners of 259 Bridge Road have requested the vacation of the unused segment of the easement. Staff reviewed the request and determined that the unused segment of the easement has not been used by any public utility and we do not anticipate a future need for that segment and thus it can be vacated.
A public agency may vacate/terminate a “public service easement” in accordance with the provisions and hearing process described in the Public Streets, Highways, and Service Easements Vacation Law (Sts. & Hy. Code, §§ 8300 et seq.). The dedicated purpose of this five-foot-wide public utility easement meets the definition of a “public service easement” under Streets & Highways Code Section 8306. Additionally, pursuant to Streets & Highways Code Section 8333, a formal easement vacation and hearing process is not necessary and the City Council may summarily vacate the easement by adopting a resolution of vacation, in accordance with Streets & Highways Code Section 8335, if the easement has not been used for the purpose for which it was dedicated or acquired for five consecutive years immediately preceding the proposed vacation, or if the easement has been determined to be excess by the easement holder, and there are no other public facilities located within the easement.
Vacating the unused segment of the public utility easement would release the Town’s liability for future maintenance and allow the property owners to utilize a larger portion of the parcel.
The subject easement documents have been checked for accuracy and are ready for acceptance by the City Council. Upon acceptance of vacation of easement by the City Council, the City Engineer can then complete the map and recordation process. The segment of unused easement proposed for vacation is shown and described in the Exhibits to the resolution.
FISCAL IMPACT: This action will not create any new financial responsibility to the Town and may relieve the Town of future maintenance costs.
ENVIRONMENTAL ISSUES: The proposed action accepting the vacation of the unused segment of easement is exempt from environmental review as it does not constitute a project under CEQA Guideline 15301.
-153-
Agenda Staff Report - Hillsborough City Council
August 11, 2025
ATTACHMENTS: Resolution and Exhibits
PREPARED BY: Paul Willis, Director of Public Works
RECOMMENDATION: Adopt the resolution approving the summary vacation of an unused segment of an existing five-foot-wide public utility easement at 259 Bridge Road, under CEQA Guideline 15301.
-154-
RESOLUTION NO. 25-
RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH
APPROVING THE SUMMARY VACATION OF AN UNUSED SEGMENT OF AN EXISTING FIVE-FOOT-WIDE PUBLIC UTILITY EASEMENT AT 259 BRIDGE ROAD UNDER CEQA GUIDELINE 15301
WHEREAS, a five-foot wide public utility easement (“Easement”) exists at 259 Bridge Road (“Property”); and
WHEREAS, the Easement was dedicated to the Town of Hillsborough, for the purpose of public utilities; and
WHEREAS, Section 8333(a) of the Streets and Highways Code of the State of California allows a city to summarily vacate a public service easement if the easement has not been used for the purpose for which it was dedicated or acquired for five consecutive years immediately preceding the proposed vacation; and
WHEREAS, Section 8333(c) of the Streets and Highways Code of the State of California allows a city to summarily vacate a public service easement if it has been determined to be excess by the easement holder, and there are no other public facilities located within the easement; and WHEREAS, the Property owner has requested for summary vacation of the unused segment of the easement by the Town; and
WHEREAS, this segment of easement has not been used for the purpose for which it was dedicated for over five consecutive years immediately preceding the proposed vacation; and
WHEREAS, the Town has determined that this existing unused segment of easement is in excess and is no longer needed for the purpose for which it was dedicated and contains no public facilities.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby finds and determines as follows:
1. The facts set forth in the recitals above are found to be true and correct and are incorporated herein by reference.
2. The unused segment of easement located at 259 Bridge Road, depicted and described in Exhibits A and B, is hereby ordered vacated. This summary vacation is made pursuant to the requirements of the Streets and Highways Code, Division 9, Part 3, Chapter 4 (Sts. & Hy. Code, § 8330 et seq.).
3. The City Clerk is authorized and directed to record a certified copy of this resolution with the County Recorder of the County of San Mateo. From and after -155-
the date the resolution is recorded, the unused segment of easement will no longer constitute a public service easement.
Mayor of the Town of Hillsborough
Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 11th day of August 2025, by the following vote of the members thereof:
AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-156-
-157-
-158-
TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
8 CONSENT CALENDAR
CITY COUNCIL MEETING
AUGUST 11, 2025
AGENDA STAFF REPORT
ITEM SUBJECT: RESOLUTION APPROVING AND AUTHORIZING THE CITY MANAGER TO
EXECUTE AN AMENDMENT TO THE AMENDED AND RESTATED WATER SUPPLY
AGREEMENT BETWEEN THE CITY AND COUNTY OF SAN FRANCISCO AND WHOLESALE
CUSTOMERS IN ALAMEDA COUNTY, SAN MATEO COUNTY, AND SANTA CLARA COUNTY AND UPDATED TIER 2 DROUGHT RESPONSE IMPLEMENTATION PLAN AND RESOLUTION APPROVING AND ADOPTING THE TIER 2 DROUGHT RESPONSE IMPLEMENTATION PLAN PURSUANT TO SECTION 3.11.C OF THE AMENDED AND RESTATED WATER SUPPLY AGREEMENT, UNDER CEQA GUIDELINE 15301
SUMMARY: This staff report provides an overview of two important water supply reliability contract actions:
1. An amendment to the Amended and Restated Water Supply Agreement between the City and County of San Francisco and Wholesale Customers in Alameda County, San Mateo County and Santa Clara County (WSA): This amendment addresses three key areas:
a. Minimum Purchase Requirements: Modifies Minimum Purchase requirements to align with evolving water supply conditions.
b. Tier 1 Water Shortage Allocation Plan (Tier 1 Plan): Establishes a new method for considering collective Wholesale Customer SFPUC purchases when determining how excess use charges will be applied.
c. Updates: Revisions to address discrete issues that arose over the course of implementing the WSA.
2. An updated Tier 2 Drought Response Implementation Plan (Tier 2 Plan): The Tier 2 Plan provides the method for allocating water from the San Francisco Regional Water System (RWS) among the Wholesale Customers during periods of shortage caused by drought.
BACKGROUND
A. Water Supply Agreement History
In June 2009, the Town of Hillsborough entered into a Water Supply Agreement with the City and County of San Francisco (San Francisco) and Wholesale Customers in Alameda County, San Mateo County and Santa Clara County (2009 WSA). The 2009 WSA establishes the terms by which the twenty-six Wholesale Customers purchase water from the RWS. The 2009 WSA builds -159-
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upon the 1984 "Settlement Agreement and Master Water Sales Contract between the City and County of San Francisco and Certain Suburban Purchasers in San Mateo County, Santa Clara County and Alameda County."
In September 2017, the Bay Area Water Supply and Conservation Agency (BAWSCA) and the Water Management Representatives (WMR) of the BAWSCA member agencies began reviewing the issue of Minimum Purchase Requirements, as described in Section 3.07.C of the WSA, and discussing the creation of a process to transfer minimum annual purchase quantities among the Wholesale Customers. Throughout 2017 and 2018, the WMR held multiple meetings during which the agencies currently subject to Minimum Purchase Requirements (Original Minimum Purchase Customers) and the other Wholesale Customers shared their interests and concerns regarding changes to the Minimum Purchase Requirements and allowing transfers of minimum annual purchase quantities.
In 2019, the Town of Hillsborough approved the 2018 Amended and Restated WSA (2018 WSA), at which time the Wholesale Customers expressed a collective interest in working together to develop a process for the expedited and permanent transfer of minimum annual purchase quantities. The Wholesale Customers directed BAWSCA to facilitate negotiation of a new WSA amendment to provide a procedure for expedited and permanent transfers of minimum annual purchase quantities in a manner that safeguards the financial and water supply interests of Wholesale Customers not participating in such transfers. This amendment was memorialized in the 2021 Amended and Restated WSA (2021 WSA).
B. Tier 2 Plan Negotiations and Development of Minimum Purchase Quantity Reset Proposal In January 2021, BAWSCA began facilitating an update to the Tier 2 Plan, the method for allocating water from the RWS among the Wholesale Customers during shortages caused by drought. The Tier 2 Plan is an agreement among the twenty-six Wholesale Customers, and must be unanimously adopted by them. Each Wholesale Customer appointed a lead negotiator to represent the interests of its agency in the negotiations. Between January 2022 and June 2024, BAWSCA and the lead negotiators, supported by a consulting firm providing technical and modeling expertise, met at least 62 times, most often for half-day, in-person meetings and smaller virtual sub-group sessions, to negotiate the terms of the updated Tier 2 Plan.
In November 2021, San Francisco declared a water shortage emergency in response to the Governor’s executive action declaring a drought state of emergency across most of California. This action triggered implementation of the Tier 1 and Tier 2 Plans by BAWSCA and San Francisco for the first time.
Throughout the two and a half years of Tier 2 Plan negotiations, the Wholesale Customers gained insight into unique characteristics of each agency and specific challenges related to water supplies and droughts. During these discussions, Wholesale Customers subject to the Minimum Purchase requirements (Minimum Purchase Customers) articulated the unique challenges that the Minimum Purchase Requirements present. More detailed information about these issues is provided below and in the attachments.
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In June 2023, following several years of discussions regarding the Minimum Purchase Requirements, the SFPUC proposed amending the 2021 WSA to reset the existing minimum annual purchase quantities to align with current water consumption trends, while protecting investment in the RWS. For the remainder of 2023, the SFPUC, the Original Minimum Purchase Customers, and BAWSCA held multiple meetings to identify amendments that would address challenges related to the Minimum Purchase Requirements. Once the SFPUC and the Original Minimum Purchase Customers finalized their recommended amendments to the Minimum Purchase Requirements, the Original Minimum Purchase Customers presented the proposals to the broader Wholesale Customers’ group to secure their support. Negotiations among the Wholesale Customers were concluded in Fall 2024.
In June 2024, the lead negotiators concluded negotiations on the updated Tier 2 Plan. The agency representatives collectively agreed that they were ready to recommend the Tier 2 Plan to their governing boards for adoption. A summary of the Tier 2 Plan is provided below and in the attachments.
C. Tier 1 Plan Amendment
In Fall of 2024, all twenty-six Wholesale Customers and San Francisco negotiated an amendment to the Tier 1 Plan in the WSA to incorporate a new “Tier 1 Family Plan,” whereby San Francisco may only apply excess use charges to Wholesale Customers who exceed their individual shortage allocation when the collective Wholesale Customer usage exceeds the Tier 1 allocation. A more detailed summary of the WSA amendments is provided below and in the attachments.
1. WATER SUPPLY AGREEMENT AMENDMENT
A. Minimum Purchase Requirements
Existing Section 3.07 of the 2021 WSA provides that four Wholesale Customers (Alameda County Water District and the Cities of Milpitas, Mountain View, and Sunnyvale, collectively, the “Original Minimum Purchase Customers”) may purchase water from sources other than from San Francisco, but they are each obligated to purchase a specific minimum annual quantity of water from the San Francisco, referred to as a “Minimum Purchase Requirement." If a Minimum Purchase Customer does not meet its Minimum Purchase Requirement in a particular fiscal year, it must pay San Francisco for the difference between its metered water purchases during the fiscal year and its minimum annual purchase quantity set forth in Attachment E of the 2021 WSA.
It is assumed that the Minimum Purchase Requirements were originally designed to prevent four specific multi-source agencies from shifting from the RWS to other imported water sources.
However, changed conditions, including recurring droughts, improved water use efficiency, and investments in local supplies have reduced demand on the RWS. Despite these improvements, the RWS remains vulnerable to severe droughts, prompting the San Francisco Public Utilities Commission (SFPUC) to invest in alternative water supplies. The Minimum Purchase Customers are well-positioned to develop their own local, drought-resilient supplies, which would reduce the regional dry-year supply gap, improving reliability of the RWS for all users. These amendments may reduce a perceived existing disincentive to improve efficiency and develop alternative supplies.
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a. Reduction of Minimum Annual Purchase Quantities (MPQ) MPQs set in the 1984 Settlement Agreement and Master Water Sales Contract (1984 Contract) were calculated based on 80% of each of the four Original Minimum Purchase Customer’s purchases from the RWS in the 1980s. The MPQs were later reduced by 5% as part of the 2009 WSA. Upon adoption of this amendment, the minimum annual purchase quantities of the Original Minimum Purchase Customers will be reset to 80% of each of the Minimum Purchase Customer’s average purchases from the most recent four non-drought years and the amendment will establish a continuing, periodic review of the minimum annual purchase quantities on a 10-year schedule. b. Rebound Year Minimum Annual Purchase Quantity
Existing Section 3.07.C of the 2021 WSA provides that Minimum Purchase Requirements will be waived during drought, other period of water shortage on the RWS, or if the Governor declares a state of emergency that impacts water supply use or deliveries from the RWS. Minimum Purchase Requirements are reinstated in the first year immediately following a drought. However, water use does not rebound to pre-drought levels for several years, depending on the level of conservation achieved.
The amendment provides a temporary, one-year reduction in the minimum annual purchase quantities equal to half of the demand reduction from pre-drought levels to allow for drought rebound. For example, if a Minimum Purchase Customer’s pre-drought use and minimum annual purchase quantity are 10 million gallons per day (MGD) and drought RWS purchases are 8 MGD, the Rebound Year minimum annual purchase quantity will be set at 9 MGD. c. Collective Minimum Annual Purchase Quantities Considered Before Application of Imputed Sales
Existing Section 3.07 of the 2021 WSA provides that if a Minimum Purchase Customer does not meet its Minimum Purchase Requirement in a particular fiscal year, it must pay the SFPUC for the difference between its metered water purchases during the fiscal year and its minimum annual purchase quantity. This amendment provides that the collective purchases from Original Minimum Purchase Customers will be considered together before an individual Original Minimum Purchase Customer is required to pay the difference between its metered water purchases and its Minimum Purchase Requirement. If collective purchases are more than the sum of minimum annual purchase quantities, payments to the SFPUC for an Original Minimum Purchase Customer(s) who did not meet its Minimum Purchase Requirement will not be required. If collective purchases are less than the sum of minimum annual purchase quantities, payments to the SFPUC for an Original Minimum Purchase Customer(s) who did not meet its Minimum Purchase Requirement will be proportionate to its share of total under usage.
B. Tier 1 Water Shortage Allocation Plan
The Tier 1 Water Shortage Allocation Plan (“Tier 1 Plan” included as Attachment H of the WSA) is the method and process for allocating water from the RWS between San Francisco retail customers and the Wholesale Customers collectively during system-wide shortages caused by drought of 20% or less. Section 3.11.C.3 of the WSA provides that the SFPUC will honor allocations of water among the Wholesale Customers (“Tier 2 Allocations”) provided by BAWSCA or if unanimously agreed to by all Wholesale Customers. -162-
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The Tier 1 and Tier 2 Plans were implemented for the first time during the 2021 to 2023 drought.
During the 2014 to 2017 drought, the Tier 1 and Tier 2 Plans were superseded by state-wide mandates from the Governor. During Tier 2 Plan negotiations, BAWSCA, the SFPUC, and the Wholesale Customers agreed to update the Tier 1 Plan to add a new “Tier 1 Family Plan.” When the SFPUC declares a shortage emergency, it determines whether voluntary or mandatory rationing is required. At the end of the 12-month drought period, each Wholesale Customer’s purchases from the RWS are compared to their annual drought allocation. Excess use charges are only applied during mandatory rationing periods.
The new Tier 1 Family Plan ensures that excess use charges are only applied when the collective Wholesale Customer usage exceeds the Tier 1 allocation. If this occurs, excess use charges will be proportionally applied to agencies that exceeded their individual Tier 2 Allocations.
For example, if the twenty-six Wholesale Customers collectively exceed the Tier 1 allocation by 2 MGD, and only two agencies exceed their Tier 2 Allocations by 3 MGD each, then these two agencies will share the excess use charges proportionally.
C. General Updates to the WSA
Sections 2.03, 3.09, 9.07, and Attachment A, Definitions of “Imputed Sales” and “Level of Service Goals and Objectives” have been updated with current cross references, dates and corrections.
2. TIER 2 DROUGHT RESPONSE PLAN UPDATE
The WSA authorizes the Wholesale Customers to adopt a methodology for allocating the water collectively available from the RWS among the twenty-six Wholesale Customers during systemwide shortages caused by drought (the Tier 2 Plan). San Francisco is not a party to the Tier 2 Plan. The existing Tier 2 Plan was adopted in 2011 and was originally set to expire in 2018. In 2018, the California State Legislature passed two bills to implement a long-term framework for water use efficiency, commonly referred to as, “Making Water Conservation a California Way of Life.” These bills were anticipated to impact urban water use, and the extent of those impacts to the Wholesale Customers was unknown at the time. As such, the WMR instructed BAWSCA to hold off on initiating an update to the existing Tier 2 Plan. In 2018, and every year since, the BAWSCA Board of Directors (BAWSCA Board) has extended the term of the exiting Tier 2 Plan by one year. In 2024, the BAWSCA Board extended the term of the existing Tier 2 Plan through the end of 2025 and specified that the existing Tier 2 Plan will be superseded by an updated Tier 2 Plan once unanimously adopted by the twenty-six Wholesale Customers.
Since the existing Tier 2 Plan was adopted in 2011, conditions impacting water use have changed (e.g., water supply sources, water use trends, land use, and customer base). During the 2021 to 2023 drought, the Tier 1 and Tier 2 Plans were implemented for the first time. At that time, it became clear that the existing Tier 2 Plan no longer operated as originally intended and that an update was necessary.
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Guarantee (ISG), but it also provides necessary updates to ensure a minimum supply of RWS water for base/indoor use for the portion of each service area where RWS is delivered.
A. Tier 2 Plan Update Process
Between January 2022 and June 2024, BAWSCA facilitated negotiations between the Wholesale Customers through a series of meetings, workshops, and workgroups to update the Tier 2 Plan.
The Wholesale Customers began by reviewing the prior Plan and other shortage allocation plans throughout the state, then discussed and agreed upon policy principles for a revised Tier 2 Plan.
BAWSCA, with support from a technical consultant team, introduced potential elements of a formula to align with the agreed upon policy principles. In monthly workshops, the Wholesale Customers discussed these options and provided feedback on which elements should be included, along with suggested refinements. These workshops, and the discussions, suggestions, and comments expressed by the Wholesale Customers during this process, provided the primary forum through which the updated Tier 2 Plan was developed.
B. Tier 2 Plan Policy Principles
The Wholesale Customers collectively developed four policy principles to guide the development and performance of the updated Tier 2 Plan. These policy principles are outlined below. • Policy Principle #1 - Provide sufficient water for the basic health and safety needs of customers. • Policy Principle #2 - Minimize economic and other adverse impacts of water shortages on customers and the BAWSCA region.
• Policy Principle #3 - Provide predictability of drought allocations through consistent and predetermined rules for calculation, while allowing for flexibility to respond to unforeseen circumstances.
• Policy Principle #4 - Recognize benefits of, and avoid disincentives for, water use efficiency and development of alternative water supply projects.
C. Tier 2 Plan Allocation Formula
The updated Tier 2 Plan establishes a sequential allocation formula to determine how the available water from the RWS will be allocated among the individual Wholesale Customers. The allocation formula can generally be described as follows:
• The Minimum and Maximum Cutback establish the upper and lower bounds for each Wholesale Customer’s final allocation. The Minimum Cutback is equal to 1/3 of the Overall Average Wholesale Customer Reduction, but no less than 5%. The Maximum Cutback is equal to 1.5 times the Overall Average Wholesale Customer Reduction.
• Each Wholesale Customer is allocated water on a residential per capita basis based on the State Indoor Water Use Efficiency Standard and the portion of each Wholesale Customer’s water demand met by the RWS. SB 1157 (Hertzberg), signed into law in September 2022, established the water use efficiency standard for indoor residential water use be 47 gallons per capita per day, and lowering it to 42 GPCD in 2030.
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• Each Wholesale Customer is allocated water based on its estimated non-residential indoor use by applying a cutback factor equal to half of the Overall Average Wholesale Customer Reduction to each Wholesale Customer’s estimated non-residential indoor demand, also known as Base Period purchase, from the RWS.
• Each Wholesale Customer is allocated water based on its estimated seasonal purchases from the RWS.
• Remaining water is allocated to bring each Wholesale Customer’s final allocation as close to its “Target Allocation” as possible, while ensuring that each Wholesale Customer’s final allocation is between the Minimum and Maximum Cutback bounds. The Target Allocation is based on a weighted share of (1) the Wholesale Customer’s Base Period purchases from the RWS and (2) its ISG.
D. Tier 2 Plan Term
The term of the updated Tier 2 Plan is coordinated with the term of the WSA to avoid simultaneous renegotiation of these related agreements.
FISCAL IMPACT: The WSA Minimum Purchase Quantity amendment will result in a $0.007 to $0.040 per Ccf wholesale and retail customer increase by all BAWSCA member agencies, including the Town of Hillsborough.
ENVIRONMENTAL ISSUES: The action is categorically exempt from the California Environmental Quality Act according to Section 15301 of the California Code of Regulations.
ATTACHMENTS:
1. WSA Resolution and Exhibit A WSA Amendments (Clean)
2. WSA Amendments (Redline)
3. Tier 2 Resolution and Exhibit A Tier 2 Drought Response Implementation Plan PREPARED BY: Paul Willis, Director of Public Works
RECOMMENDATION:
1. Adopt the resolution approving and authorizing the City Manager to execute an amendment to the Amended and Restated Water Supply Agreement between the City and County of San Francisco and Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County (WSA); and
2. Adopt the resolution approving and adopting the Tier 2 Drought Response Implementation Plan pursuant to Section 3.11.C of the Amended and Restated Water Supply Agreement, under CEQA Guideline 15301.
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RESOLUTION NO. 25-
RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH
APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AMENDMENT TO THE AMENDED AND RESTATED WATER SUPPLY AGREEMENT
BETWEEN THE CITY AND COUNTY OF SAN FRANCISCO AND WHOLESALE
CUSTOMERS IN ALAMEDA COUNTY, SAN MATEO COUNTY, AND SANTA CLARA COUNTY, UNDER CEQA GUIDELINE 15301
WHEREAS, water supply agencies in Alameda, San Mateo, and Santa Clara Counties have purchased water from the City and County of San Francisco (San Francisco) for many years; and
WHEREAS, the San Francisco Public Utilities Commission (SFPUC) operates the Regional Water System, which delivers water to communities in Alameda, San Mateo, and Santa Clara Counties, as well as to customers within San Francisco (collectively, “the Parties”); and
WHEREAS, the Parties entered into the “Settlement Agreement and Master Water Sales Contract between the City and County of San Francisco and Certain Suburban Purchasers in San Mateo County, Santa Clara County and Alameda County” in 1984 (1984 Settlement Agreement and Master Water Sales Contract); and
WHEREAS, in April 2003, water supply agencies in Alameda, San Mateo and Santa Clara Counties (collectively referred to as the Wholesale Customers) established the Bay Area Water Supply and Conservation Agency (BAWSCA), as authorized by Water Code Sections 81300 et seq.; and WHEREAS, upon expiration of the 1984 Settlement Agreement and Master Water Sales Contract, the Parties entered into the “Water Supply Agreement between San Francisco and Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County” (Water Supply Agreement or WSA) on July 1, 2009, authorized by SFPUC Resolution No. 09-0069, dated April 28, 2009; and
WHEREAS, in 2017, the Wholesale Customers directed BAWSCA to act as its authorized representative in discussions and negotiations with San Francisco to amend the Water Supply Agreement to address a number of substantive issues and these negotiations resulted in the Parties' adoption of the Amended and Restated Water Supply Agreement in 2018 authorized by SFPUC Resolution No. 18-0212, dated December 11, 2018; and
WHEREAS, in 2019 this Council approved by Resolution the Amended and Restated Water Supply Agreement (2018 WSA); and
WHEREAS, pursuant to WSA Section 3.07, four Wholesale Customers (Alameda County Water District and the Cities of Milpitas, Mountain View, and -166-
ATTACHMENT 1
2 Sunnyvale, collectively, the “Original Minimum Purchase Customers”) may purchase water from sources other than the SFPUC, but they are each obligated to purchase a specific minimum annual quantity of water from the SFPUC, referred to as a “Minimum Purchase Requirement;” and WHEREAS, historically, if a Minimum Purchase Customer does not meet its Minimum Purchase Requirement in a particular fiscal year, it must pay the SFPUC for the difference between its metered water purchases during the fiscal year and its minimum annual purchase quantity set forth in WSA Attachment E; and
WHEREAS, some Original Minimum Purchase Customers pay the SFPUC for water that is not delivered due to either insufficient potable demand within their service area or conservation efforts during drought rationing; and WHEREAS, as part of the 2018 negotiations, the Wholesale Customers and the SFPUC resolved to work promptly to identify a resolution to this as part of a future contract amendment; and
WHEREAS, in 2019, the Wholesale Customers directed BAWSCA to draft a proposed amendment to the 2018 WSA to provide a procedure for expedited and permanent transfers of minimum annual purchase quantities that safeguards the financial and water supply interests of Wholesale Customers not participating in such transfers and these negotiations resulted in the Parties' adoption of the Amended and Restated Water Supply Agreement in 2021, authorized by SFPUC Resolution No. 21-009, dated January 26, 2021; and
WHEREAS, on March 14, 2022 the Town of Hillsborough City Council approved by Resolution No. 22-23 the Amended and Restated Water Supply Agreement (2021 WSA); and
WHEREAS, the 2021 WSA provided a significant, but incomplete solution to address the Original Minimum Purchase Customer’s concerns with the minimum purchase quantities through a transfer process; and
WHEREAS, 2021 WSA Section 3.11.C. provides that the SFPUC may reduce the amount of water available to the Wholesale Customers in response to a drought; and
WHEREAS, 2021 WSA Section 3.11.C. provides that the Tier 1 Shortage Plan (Attachment H to the WSA) will be used, during system-wide shortages of 20% or less, to allocate water from the Regional Water System between Retail and Wholesale Customers ; and
WHEREAS, 2021 WSA Section 3.11.C. further provides that the SFPUC will honor allocations of water among the Wholesale Customers (Tier 2 Allocations) unanimously agreed to by all Wholesale Customers or provided by BAWSCA; and
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3 WHEREAS, in 2021, the SFPUC and BAWSCA implemented the Tier 1 and Tier 2 Plans for the first time; and
WHEREAS, throughout 2022 and 2024, the Wholesale Customers convened at least once per month, most often for half-day in-person workshops, to negotiate an update to the method for sharing water made available from the SFPUC during shortages caused by drought (Tier 2 Plan); and WHEREAS, each Wholesale Customer appointed a lead negotiator to represent the interests of its agency in the negotiations; and
WHEREAS, during the Tier 2 Plan negotiations, the Original Minimum Purchase Customers renewed discussions among the Wholesale Customers to identify a comprehensive and final solution to concerns about the minimum purchase quantities; and
WHEREAS, during the Tier 2 Plan negotiations, the Wholesale Customers identified, and the SFPUC agreed to, changes to the Tier 1 Plan that would facilitate agreement on the updated Tier 2 Plan; and
WHEREAS, in June 2023, following several years of discussions regarding the Minimum Purchase Requirements, the SFPUC proposed amending the 2021 WSA to reset the existing minimum annual purchase quantities to align with current water consumption trends, while protecting investment in the RWS; and
WHEREAS, in 2024, the SFPUC, the Original Minimum Purchase Customers, and BAWSCA held multiple meetings to identify amendments that would address challenges related to the Minimum Purchase Requirements; and WHEREAS, once the SFPUC and the Original Minimum Purchase Customers discussed amendments to the Minimum Purchase Requirements, the Original Minimum Purchase Customers presented proposals to the broader Wholesale Customer group to secure their support; and WHEREAS, in 2024, the Wholesale Customers came to a final agreement on a package that includes an updated Tier 2 Plan, amendments to the minimum purchase quantity requirements, and amendments to the Tier 1 Plan; and
WHEREAS, with its Alternative Water Supply Program, the SFPUC is in the early stages of planning for projects to support the Wholesale and Retail Customers' ability to respond to climate change and address future water supply challenges and vulnerabilities, such as regulatory changes, earthquakes, disasters, emergencies, and increases in population and employment; and
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4 WHEREAS, the Original Minimum Purchase Customers are particularly well-suited to develop local, drought resilient supplies, which improve the reliability of the San Francisco Regional Water System (RWS) for all users; and WHEREAS, under 2021 WSA Section 3.06.D, the Parties agree that they will diligently apply their best efforts to use both surface water and groundwater sources located within their respective service areas and available recycled water to the maximum feasible extent, taking into account the environmental impacts, the public health effects, and the effects on supply reliability of such use, as well as the cost of developing such sources; and WHEREAS, each Wholesale Customer recognizes the importance of local water supplies in improving regional water supply reliability and commits to develop and use available local water supplies within their service areas, consistent with Section 3.06.D of the WSA; and
WHEREAS, the City of Mountain View approved a Recycled Water Feasibility Study Update Draft Report on March 22, 2022 with seven staff
recommendations, including: (1) working with the City of Palo Alto and the Santa Clara Valley Water District on the first phase of an advanced water purification system to improve recycled water quality, (2) planning and siting a recycled water storage reservoir in the City of Mountain View’s North Bayshore Area to improve system performance and reliability, and (3) building-out the recycled water distribution system to serve all of North Bayshore and a portion of NASA Ames; and
WHEREAS, the City of Sunnyvale approved an updated Recycled Water Master Plan on September 24, 2024 and directed staff to look into expanding the recycled water system, which currently includes 22 miles of recycled water pipelines, two recycled water pump stations, and a recycled water storage tank with a 2.5-million-gallon capacity; and
WHEREAS, the City of Milpitas continues to promote the use of recycled water to existing and new customers along the recycled water pipeline within the city, and has committed to developing local groundwater supplies to help meet projected long term water demand; and
WHEREAS, since 1995, the Alameda County Water District has invested over $300 million in water supply reliability initiatives to enhance local water supplies and reduce its dependence on imported supplies, including water conservation, conjunctive use groundwater management, brackish groundwater desalination, and groundwater banking; and
WHEREAS, as of January 2025, the SFPUC has budgeted $298.3 million over the next ten years to fund water supply projects; and
WHEREAS, the Parties now desire to approve an amendment to the 2021 WSA to reduce the minimum annual purchase quantities to 80% of average purchases from the most recent four (4) non-drought years and establish a -169-
5 continuing, periodic review of the minimum annual purchase quantities on a 10-year schedule; and
WHEREAS, the amendment will also establish a Rebound Year minimum annual purchase quantity calculation for the first year following a waiver of the Minimum Purchase Requirements; and
WHEREAS, the amendment further provides that Imputed Sales will not apply to an Original Minimum Purchase Customer that does not meet its individual Minimum Purchase Requirements if the collective SFPUC purchases from all Original Minimum Purchase Customers are equal to or greater than the total collective minimum annual purchase quantity; and
WHEREAS, the Parties also desire to adopt an amendment to the Tier 1 Plan to provide that excess use charges will not apply to Wholesale Customers that exceed their individual annual shortage allocation if the Wholesale Customers’ collective SFPUC purchases are less than the total Tier 1 allocation; and
WHEREAS, the amendment further provides that if the collective Wholesale Customers’ SFPUC purchases exceed total Tier 1 allocation, excess use charges will be applied to each Wholesale Customer that exceeded its individual annual allocation, proportional to the collective Wholesale Customer's overuse of the total Tier 1 allocation; and
WHEREAS, the Parties also desire to adopt an amendment to the 2021 WSA to include the following substantive modifications:
a) update references in Section 2.03.C regarding BAWSCA’s authority to amend attachments;
b) extend the timing of the completion of the WSIP to reflect the currently adopted program completion date (Section 3.09); c) correct a reference to a SFPUC resolution number in Section 9.07; d) update “Imputed Sales” definition in Attachment A to reference Attachment E;
e) update “Level of Service Goals and Objectives” definition in Attachment A to reflect updated and expanded Level of Service Goals and Objectives adopted by the SFPUC in November 2023; and
WHEREAS, the SFPUC approved these amendments and authorized the execution of a 2025 Amended and Restated Water Supply Agreement incorporating these amendments on May 13, 2025, pursuant to SFPUC Resolution No. 25-0074; and
WHEREAS, the amendment considered now is not a "project" for the purposes of CEQA as it involves an administrative activity that does not result in a direct change to the environment (see 14 CCR Section 15378(b)(5)) and would not result in a direct or reasonably foreseeable indirect physical change in the environment (see 14 CCR Section 15060(c)(2)). -170-
6 NOW, THEREFORE, BE IT RESOLVED by the City Council of the Town of Hillsborough as follows:
1. The revisions included in the attached Exhibit A are approved, and those revisions are to be incorporated into a revised WSA titled the "2025 Amended and Restated Water Supply Agreement Between the City and County of San Francisco Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County" dated as of 2025 (2025 Amended and Restated Water Supply Agreement).
2. The City Manager is hereby authorized and directed to execute the 2025 Amended and Restated Water Supply Agreement, when final execution copies are prepared and distributed by BAWSCA.
Mayor of the Town of Hillsborough
Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 11th day of August 2025, by the following vote of the members thereof:
AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
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1 21645394.9
3.07. Restrictions on Purchases of Water from Others; Minimum Annual Purchases A. Each Wholesale Customer (except for Alameda County Water District and the cities of Milpitas, Mountain View and Sunnyvale) agrees that it will not contract for, purchase or receive, with or without compensation, directly or indirectly, from any person, corporation, governmental agency or other entity, any water for delivery or use within its service area without the prior written consent of San Francisco.
B. The prohibition in subsection A does not apply to:
1. recycled water;
2. water necessary on an emergency and temporary basis, provided that the Wholesale Customer promptly gives San Francisco notice of the nature of the emergency, the amount of water that has been or is to be purchased, and the expected duration of the emergency; or
3. water in excess of a Wholesale Customer’s Individual Supply Guarantee.
C. Minimum Annual Purchase Quantities. Alameda County Water District and the cities of Milpitas, Mountain View and Sunnyvale may purchase water from sources other than San Francisco, provided that San Francisco shall require that each purchase a minimum annual quantity of water from San Francisco. These Minimum Annual Purchase Quantities are set out in Attachment E and shall also be included in the Individual Water Sales Contracts between San Francisco and each of these four Wholesale Customers (collectively referred to as the Original Minimum Purchase Customers). Pursuant to Section 3.04, certain Wholesale Customers may also be required to purchase Temporary Modified Minimum Annual Purchase Quantities, set out in Attachment E-1, from San Francisco. Attachment E will be updated pursuant to Section 3.04 to reflect any reduction in existing Minimum Annual Purchase Quantities and any addition of new Minimum Annual Purchase Quantities when Temporary Modified Minimum Annual Purchase Quantities expire and are removed from Attachment E-1; Individual Water Sales Contracts between San Francisco and any Wholesale Customers who are participants in a transfer under Section 3.04 will similarly be amended, as necessary.
1. Annual Notice. After the end of each fiscal year, the SFPUC will send a written notice to each Wholesale Customer with a Minimum Annual Purchase Quantity, or a Temporary Modified Minimum Annual Purchase Quantity with a copy to BAWSCA. The notice will include:
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EXHIBIT A
2 21645394.9
(a) the quantity of water delivered to each of those Wholesale Customers individually and all of the Original Minimum Purchase Customers collectively during the previous fiscal year; (b) each Wholesale Customer’s individual Minimum Annual Purchase Quantity or Temporary Modified Minimum Annual Purchase Quantity (as adjusted for a Rebound Year, if applicable, under Section 3.07.C.2);
(c) whether or not each Wholesale Customer met its individual Minimum Annual Purchase Quantity or Temporary Modified Minimum Annual Purchase Quantity (as adjusted for a Rebound Year, if applicable);
(d) whether or not the Original Minimum Purchase Customers collectively purchased a volume of water from San Francisco that is equal to or greater than the sum of their four Minimum Annual Purchase Quantities (as adjusted for a Rebound Year, if applicable); (e) any Imputed Sales charged to the Wholesale Customers; and (f) the status of any Temporary Modified Minimum Annual Purchase Quantities of the Wholesale Customers.
2. Waiver and Rebound Year. The minimum annual purchase requirements set out in Attachments E and E-1 will be waived during a Drought or other period of water shortage if the water San Francisco makes available to these Wholesale Customers is less than their Minimum Annual Purchase Quantities or Temporary Modified Minimum Annual Purchase Quantities, and may be waived during a state of emergency declared by the Governor of California that impacts water supply use or deliveries from the Regional Water System. Once the waiver is no longer in effect, each of the minimum annual purchase requirements set out in Attachments E and E-1 shall be temporarily set, for one full fiscal year (referred to as the Rebound Year), to the midpoint between (1) the Wholesale Customer’s actual San Francisco purchases for the final year in which the waiver was in effect, up to a maximum of the Customer’s Minimum Annual Purchase Quantity or Temporary Modified Minimum Annual Purchase Quantity, and (2) the Wholesale Customer’s Minimum Annual Purchase Quantity or Temporary Modified Minimum Annual Purchase Quantity set out in Attachment E or Attachment E-1, as applicable. Any fiscal year in which a Wholesale Customer meets its Rebound Year-adjusted Temporary Modified Minimum Annual Purchase Quantity, but not its standard Temporary Modified Minimum Annual Purchase Quantity, will not count as a fiscal year in which the Wholesale Customer has met or exceeded its Temporary Modified Minimum Purchase Quantity for the purposes of Section 3.04.C(4)(a).
D. Minimum Annual Purchase Quantity Reset. As shown on Attachment E, in Fiscal -173-
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Year 2025-26, the Parties reset the then-existing Minimum Annual Purchase Quantities of the Original Minimum Purchase Customers to 80% of the average San Francisco purchases of each Customer over the four most recent non-drought years preceding Fiscal Year 2024-25, effective for Fiscal Year 2024-25. If the Parties extend the Term of this Agreement beyond June 30, 2034 pursuant to Section 2.02, the Parties will review the Minimum Annual Purchase Quantities of the Original Minimum Purchase Customers again ten years after the Fiscal Year 2025-26 reset. If the Original Minimum Purchase Customers, or San Francisco, want to propose a reset of the Minimum Annual Purchase Quantities for Fiscal Year 2035-36, they will provide written notice on or before June 30, 2034. The Parties will meet and confer promptly to evaluate written reset proposals. By November 30, 2035, if the Parties have come to an agreement, the SFPUC will calculate the revised Minimum Annual Purchase Quantities based on the agreed upon methodology and provide written notice to the Original Minimum Purchase Customers and BAWSCA. The Original Minimum Purchase Customers will have at least 15 business days to review and meet and confer with the SFPUC with any questions or concerns before the revised quantities are finalized. If the Parties are unable to come to an agreement, the then-existing Minimum Annual Purchase Quantities will remain unchanged. Any changes to the Minimum Annual Purchase Quantities under this Section
3.07.D will be reflected in a revised Attachment E approved with the written concurrence of San Francisco and BAWSCA in accordance with Section 2.03.C. The Parties intend to include a continuing, periodic review of the Minimum Annual Purchase Quantities on a ten-year schedule in the successor to this Agreement.
E. Collective Minimum Annual Purchase Quantities Considered Before Application of Imputed Sales. Imputed Sales will not apply to any of the individual Original Minimum Purchase Customers in a particular fiscal year if those Customers have collectively purchased a volume of water from San Francisco that is equal to or greater than the sum of their four Minimum Annual Purchase Quantities shown in Attachment E (or adjusted for a Rebound Year pursuant to Section
3.07.C.2, if applicable). If the Original Minimum Purchase Customers do not collectively purchase that sum, any Original Minimum Purchase Customer that has not met its standard or Rebound Year-adjusted Minimum Annual Purchase Quantity will be responsible for Imputed Sales proportional to its share of the difference between that sum and the Original Minimum Purchase Customers’ total purchases from San Francisco. Examples of this calculation are contained in Attachment E-3.
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Proposed 2025 Amended and Restated Water Supply Agreement: Sections 2.03, 3.09, and
9.07, and Attachment A Definitions.
2.03. Amendments.
C. Amendments to Attachments. The following attachments may be amended with the written concurrence of San Francisco and BAWSCA on behalf of the Wholesale Customers:
Attachment Name
C Individual Supply Guarantees (amendments reflecting Section
3.04 transfers only)
E Minimum Annual Purchase Quantities (amendments reflecting Section 3.04 transfers and Section 3.07 resets only)
E-1 Temporary Modified Minimum Annual Purchase Quantities G Water Quality Notification and Communications Plan
(as may be amended)
J Water Use Measurement and Tabulation
L-1 Identification of WSIP Projects as Regional/Retail
N-1 Balancing Account/Rate Setting Calculation Table
N-2 Wholesale Revenue Requirement Schedules
N-3 Schedule of Projected Water Sales, Wholesale Revenue Requirement and Wholesale Rates
P Management Representation Letter
R Classification of Existing System Assets (subject to Section
5.11)
Amendments to these attachments shall be approved on behalf of San Francisco by the Commission and on behalf of BAWSCA by its Board of Directors, unless the Commission by resolution delegates such authority to the General Manager of the SFPUC or the Board of Directors by resolution delegates such authority to the General Manager/CEO of BAWSCA. -175-
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3.09. Completion of WSIP
San Francisco will complete construction of the physical facilities in the WSIP by June 30, 2032. The SFPUC agrees to provide for full public review and comment by local and state interests of any proposed changes that delay previously adopted project completion dates or that delete projects. The SFPUC shall meet and consult with BAWSCA before proposing to the Commission any changes in the scope of WSIP projects which reduce their capacity or ability to achieve adopted Level of Service Goals and Objectives. The SFPUC retains discretion to determine whether to approve the physical facilities in the WSIP until after it completes the CEQA process as set forth in Section 4.07.
9.07. City of Brisbane, Guadalupe Valley Municipal Improvement District, Town of Hillsborough
A. The parties acknowledge that San Francisco has heretofore provided certain quantities of water to the City of Brisbane (“Brisbane”), Guadalupe Valley Municipal Improvement District (“Guadalupe”) and the Town of Hillsborough (“Hillsborough”) at specified rates or without charge pursuant to obligations arising out of agreements between the predecessors of San Francisco and these parties, which agreements are referred to in judicial orders, resolutions of the SFPUC and/or the 1960 contracts between San Francisco and Brisbane, Guadalupe and Hillsborough. The parties intend to continue those arrangements and accordingly agree as follows:
1. Nothing in this Agreement is intended to alter, amend or modify the terms of SFPUC Resolution No. 74-0053 or the indenture of July 18, 1908 between the Guadalupe Development Company and the Spring Valley Water Company.
2. Nothing in this Agreement is intended to alter, amend or modify the Findings of Fact and Conclusions of Law and Judgment dated May 25, 1961 in that certain action entitled City and County of San Francisco v. Town of Hillsborough in the Superior Court of the State of California in and for the County of Marin, No. 23282, as modified by the Satisfaction of Judgment filed October 23, 1961 and the Compromise and Release between Hillsborough and San Francisco dated August 22, 1961. The rights and obligations of Hillsborough under these documents shall continue as therein set forth.
3. Nothing in this Agreement is intended to affect or prejudice any claims, rights or remedies of Guadalupe or of Crocker Estate Company, a corporation, or of Crocker -176-
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Land Company, a corporation, or of San Francisco, or of their successors and assigns, respectively, with respect to or arising out of that certain deed dated May 22, 1884, from Charles Crocker to Spring Valley Water Works, a corporation, recorded on May 24, 1884, in Book 37 of Deeds at page 356, Records of San Mateo County, California, as amended by that certain Deed of Exchange of Easements in Real Property and Agreement for Trade in Connection Therewith, dated July 29, 1954, recorded on August 4, 1954, in Book 2628, at page 298, Official Records of said San Mateo County, or with respect to or arising out of that certain action involving the validity or enforceability of certain provisions of said deed entitled City and County of San Francisco v. Crocker Estate Company, in the Superior Court of the State of California in and for the County of Marin, No. 23281.
Attachment A - Definitions
“Imputed Sales” apply when a Wholesale Customer does not meet the minimum annual purchase requirements of Section 3.07.C, as shown on Attachment E and Attachment E-1, except in fiscal years in which a waiver of these requirements is in effect. Imputed Sales are calculated as the difference between (1) a Wholesale Customer’s metered water purchases during a fiscal year, from July 1 to June 30, and (2) the larger of (a) or (b) as follows: (a) the Wholesale Customer’s Minimum Annual Purchase Quantity, as specified in Attachment E and may be adjusted pursuant to Section 3.07.C.2, or (b) the Wholesale Customer’s Temporary Modified Minimum Annual Purchase Quantity, as specified in Attachment E-1 and may be adjusted pursuant to Section 3.07.C.2. If a Wholesale Customer has more than one Temporary Modified Minimum Annual Purchase Quantity, the largest quantity is used for calculating Imputed Sales. Imputed Sales are considered wholesale water usage for the purposes of calculating the Proportional Annual Use, and any fees charged for Imputed Sales are considered wholesale revenues.
“Level of Service Goals and Objectives” refers to the “Phased WSIP Goals and Objectives” adopted by the Commission in Resolution No. 08-0200 dated October 30, 2008 as part of the approval of the WSIP, as updated and expanded by the "2023 Amended and Updated Water Enterprise Level of Service Goals and Objectives," adopted by the Commission in Resolution No. 23-0210 dated November 28, 2023, and any amendments that may be adopted by the Commission.
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ATTACHMENT E
MINIMUM ANNUAL PURCHASE QUANTITIES
(Section 3.07.C)
AGENCY MINIMUM ANNUAL PURCHASE QUANTITY
(IN MGD)1
Alameda County Water District 6.682
City of Milpitas 4.371
City of Mountain View 6.047
City of Sunnyvale 7.412
1 In Fiscal Year (FY) 2025-26, the then-existing Minimum Annual Purchase Quantities for Alameda County Water District and the Cities of Milpitas, Mountain View, and Sunnyvale were reset to 80% of each of those four customers’ average San Francisco purchases over the four non-drought years preceding FY 2024-25 (FY 2017-18, FY 2018-19, FY 2019-20, and FY 2020-21), effective FY 2024-25. Prior to this reset, from the effective date of this Agreement (July 1, 2009) through FY 2023-24, those four customers had the following Minimum Annual Purchase Quantities:
1. Alameda County Water District: 7.648 MGD
2. City of Milpitas: 5.341 MGD
3. City of Mountain View: 8.930 MGD
4. City of Sunnyvale: 8.930 MGD
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ATTACHMENT E-3
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ATTACHMENT E-3
Illustrations of Imputed Sales Considering Collective Regional Water System Use by Original Minimum Purchase Customers Compared to Sum of Minimum Annual Purchase Quantities Pursuant to Section 3.07.E
Scenario 1: Collective Purchases Equal to or Greater Than Sum of MAPQs1 (No Imputed Sales)2 Line
# Wholesale Customer
A B C D
E = (D[LINE #]
/ D5) × (B5 -
A5)
MAPQ
RWS3
Use
(mgd)
RWS
Over
MAPQ
(mgd)
RWS
Under
MAPQ
(mgd)
Proportion of
Use Under
Total MAPQ
(mgd)
1 Alameda County Water District 6.682 7.682 1.00 N/A
2 City of Milpitas 4.371 3.871 -0.50 N/A
3 City of Mountain View 6.047 5.047 -1.00 N/A
4 City of Sunnyvale 7.412 7.912 0.50 N/A
5 Total 24.512 24.512 1.50 -1.50 N/A
Scenario 2: Collective Purchases Less Than Sum of MAPQs (by 1.0 mgd) (Imputed Sales)4 Line
# Wholesale Customer
A B C D
E = (D[LINE #]
/ D5) × (B5 -
A5)
MAPQ
RWS
Use
(mgd)
RWS
Over
MAPQ
(mgd)
RWS
Under
MAPQ
(mgd)
Proportion of
Use Under
Total MAPQ
(mgd)
1 Alameda County Water District 6.682 7.182 0.50 N/A
2 City of Milpitas 4.371 3.871 -0.50 -0.25
3 City of Mountain View 6.047 4.547 -1.50 -0.75
4 City of Sunnyvale 7.412 7.912 0.50 N/A
5 Total 24.512 23.512 1.00 -2.00 -1.0
1 Minimum Annual Purchase Quantity (MAPQ)
2 In Scenario 1, the Original Minimum Purchase Customers’ collective purchases from San Francisco in a particular fiscal year (Line 5B) are equal to the sum of their Minimum Annual Purchase Quantities (Line 5A). Therefore, no Imputed Sales are applied to individual Original Minimum Purchase Customers that purchased less than their individual Minimum Annual Purchase Quantities (in this scenario, Milpitas and Mountain View). 3 Regional Water System (RWS) 4 In Scenario 2, the Original Minimum Purchase Customers’ collective purchases from San Francisco in a particular fiscal year (Line 5B) are 1.0 mgd less than the sum of their Minimum Annual Purchase Quantities (Line 5A).
Therefore, Imputed Sales are applied proportionally to any individual Original Minimum Purchase Customer that purchased less than its individual Minimum Annual Purchase Quantity (in this scenario, Milpitas and Mountain View), so that customer is responsible for its share of the difference between the sum of all Minimum Annual Purchase Quantities (Line 5A) and the collective amount of RWS use (Line 5B). In this scenario, Mountain View is responsible for 75% and Milpitas is responsible for 25% of the 1.0 mgd difference between Line 5A and Line 5B. -180-
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Scenario 3: Collective Purchases Equal to or Greater Than Sum of MAPQs – with Rebound Year-Adjusted MAPQs (No Imputed Sales)5
Line # Wholesale Customer
A B
C = A -
((A[LINE #] -
B[LINE #]) / 2) D E F
G = (F[LINE #] /
F5) × (D5 - C5)
MAPQ
RWS Use
in Waiver’s
Final Year
Rebound
Year-Adjusted
MAPQ
RWS Use
(mgd)
RWS Over
Rebound
YearAdjusted
MAPQ (mgd)
RWS Under
Rebound
YearAdjusted
MAPQ (mgd)
Proportion of
Use Under
Total Rebound
Year-Adjusted
MAPQ (mgd)
1 Alameda County Water District 6.682 5.682 6.182 7.512 1.33 N/A 2 City of Milpitas 4.371 3.371 3.871 3.591 -0.28 N/A 3 City of Mountain View 6.047 5.047 5.547 4.847 -0.70 N/A 4 City of Sunnyvale 7.412 6.412 6.912 7.782 0.87 N/A 5 Total 24.512 20.512 22.512 23.732 2.20 -0.98 N/A 5 In Scenario 3, the Original Minimum Purchase Customers’ collective purchases from San Francisco in a particular fiscal year (Line 5D) are greater than the sum of their Rebound Year-adjusted Minimum Annual Purchase Quantities that are currently in effect pursuant to Section 3.07.C.2 (Line 5C). Therefore, no Imputed Sales are applied to individual Original Minimum Purchase Customers that purchased less than their individual Rebound Year-adjusted Minimum Annual Purchase Quantities (in this scenario, Milpitas and Mountain View). -181-
1 21606945.9
ATTACHMENT H
WATER SHORTAGE ALLOCATION PLAN
This Water Shortage Allocation Plan (“Plan”), also known as the Tier 1 Shortage Plan, describes the method for allocating water between the San Francisco Public Utilities Commission (“SFPUC”), on the one hand, and the Wholesale Customers collectively, on the other, during shortages caused by drought.
The Plan also implements a method for allocating water among the individual Wholesale Customers, known as the Tier 2 Drought Response Implementation Plan (“Tier 2 Plan”), which has separately been adopted by the Wholesale Customers and does not include the SFPUC. The Plan includes provisions for transfers, banking, and excess use charges. The Plan applies only when the SFPUC determines that a system-wide water shortage due to drought exists, and all references to “shortages” and “water shortages” are to be so understood. This Plan was initially adopted pursuant to Section 7.03(a) of the 1984 Settlement Agreement and Master Water Sales Contract and has been incorporated and updated to correspond to the terminology used in the 2009 Water Supply Agreement between the City and County of San Francisco and Wholesale Customers in Alameda County, San Mateo County and Santa Clara County (“Agreement”), as amended and restated from time to time.
SECTION 1. SHORTAGE CONDITIONS
1.1. Projected Available SFPUC Water Supply. The SFPUC shall make an annual determination as to whether or not a shortage condition exists. The determination of projected available water supply shall consider, among other things, stored water, projected runoff, water acquired by the SFPUC from nonSFPUC sources, inactive storage, reservoir losses, allowance for carryover storage, and water bank balances, if any, described in Section 3.
1.2 Projected SFPUC Customer Purchases. The SFPUC will utilize purchase data, including volumes of water purchased by the Wholesale Customers and by Retail Customers (as those terms are used in the Agreement) in the year immediately prior to the drought, along with other available relevant information, as a basis for determining projected system-wide water purchases from the SFPUC for the upcoming Supply Year (defined as the period from July 1 through June 30).
1.3. Shortage Conditions. The SFPUC will compare the projected available water supply (Section 1.1) with projected system-wide water purchases (Section 1.2). A shortage condition exists if the SFPUC determines that the projected available water supply is less than projected system-wide water purchases in the upcoming Supply Year. When a shortage condition exists, SFPUC will determine whether voluntary or mandatory actions will be required to reduce purchases of SFPUC water to required levels.
1.3.1 Voluntary Response. If the SFPUC determines that voluntary actions will be sufficient to accomplish the necessary reduction in water use throughout its service area, the SFPUC and the Wholesale Customers will make good faith efforts to reduce their water purchases to stay within their annual Tier 1 and Tier 2 allocations as applicable (see Section 2 of this Attachment H) and associated monthly water use budgets. The SFPUC will not impose excess use charges during periods of voluntary rationing, but may suspend the prospective accumulation of water bank credits, or impose a ceiling on further accumulation of bank credits, consistent with Section 3.2.1 of this Plan.
1.3.2 Mandatory Response. If the SFPUC determines that mandatory actions will be required to accomplish the necessary reduction in water use in the SFPUC service area, the SFPUC may implement excess use charges as set forth in Section 4 of this Plan.
1.4. Period of Shortage. A shortage period commences when the SFPUC determines that a water shortage exists, as set forth in a declaration of water shortage emergency issued by the SFPUC pursuant to -182-
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California Water Code Sections 350 et seq. Termination of the water shortage emergency will be declared by resolution of the SFPUC.
SECTION 2. SHORTAGE ALLOCATIONS
2.1. Annual Tier 1 Allocations between the SFPUC and the Wholesale Customers. The annual water supply available during shortages will be allocated between the SFPUC and the collective Wholesale Customers as follows:
Level of System Wide
Reduction in Water Use
Required
Share of Available Water
SFPUC Share Wholesale Customers Share
5% or less
6% through 10%
11% through 15%
16% through 20%
35.5%
36.0%
37.0%
37.5%
64.5%
64.0%
63.0%
62.5%
This Plan refers to the SFPUC’s and Wholesale Customers’ respective shares of available water so established as the SFPUC’s and Wholesale Customers’ Tier 1 allocations. The water allocated to the SFPUC shall correspond to the total allocation for all Retail Customers. In the event that the SFPUC share of the available water supply in the above table results in Retail Customers having a positive allocation (i.e., a supply of additional water rather than a required percentage reduction in water use), the SFPUC’s percentage share of the available water supply in the table shall be reduced to eliminate any positive allocation to Retail Customers, with a corresponding increase in the percentage share of the available water supply allocated to the Wholesale Customers. For any level of required reduction in system-wide water use during shortages, the SFPUC shall require Retail Customers to conserve a minimum of 5%, with any resulting reallocated supply credited to storage for inclusion in calculation of projected available water SFPUC water supply in a subsequent year (Section 1.1).
The parties agree to reevaluate the percentages of the available water supply allocated to Retail and Wholesale Customers by May 1, 2028.
2.2 Annual Tier 2 Allocations among the Wholesale Customers. The annual water supply allocated to the Wholesale Customers collectively during system wide shortages of 20 percent or less (i.e., the Wholesale Customers’ Tier 1 allocation) will be apportioned among them based on a methodology, known as the Tier 2 Plan, that has been separately adopted by all of the Wholesale Customers, and not the SFPUC, as described in Section 3.11(C) of the Agreement. In any year for which the methodology must be applied, the Bay Area Water Supply and Conservation Agency (“BAWSCA”) will calculate each Wholesale Customer’s individual percentage share of the amount of water allocated to the Wholesale Customers collectively pursuant to Section 2.1. Following the declaration or reconfirmation of a water shortage emergency by the SFPUC, BAWSCA will deliver to the SFPUC General Manager a list, signed by the President of BAWSCA’s Board of Directors and its General Manager, showing each Wholesale Customer together with its percentage share and stating that the list has been prepared in accordance with the methodology adopted by the Wholesale Customers. The SFPUC shall allocate water to each Wholesale Customer, as specified in the list. The shortage allocations so established (known as Tier 2 allocations) may be transferred as provided in Section 2.5 of this Plan. If BAWSCA or all Wholesale Customers do not provide the SFPUC with individual allocations, the SFPUC may make a final allocation decision after first meeting and discussing allocations with BAWSCA and the Wholesale Customers. -183-
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The Tier 2 Plan methodology adopted by the Wholesale Customers utilizes the rolling average of each individual Wholesale Customer’s purchases from the SFPUC during the three immediately preceding Supply Years. The SFPUC agrees to provide BAWSCA by November 1 of each year a list showing the amount of water purchased by each Wholesale Customer during the immediately preceding Supply Year.
The list will be prepared using Customer Service Bureau report MGT440 (or comparable official record in use at the time), adjusted as required for any reporting errors or omissions, and will be transmitted by the SFPUC General Manager or his designee.
2.3. Limited Applicability of Plan to System Wide Shortages Greater Than Twenty Percent. The Tier 1 allocations of water between the SFPUC and the Wholesale Customers collectively, provided for in Section 2.1, apply only to shortages of 20 percent or less. The SFPUC and Wholesale Customers recognize the possibility of a drought occurring which could create system-wide shortages greater than 20 percent despite actions taken by the SFPUC aimed at reducing the probability and severity of water shortages in the SFPUC service area. If the SFPUC determines that a system wide water shortage greater than 20 percent exists, the SFPUC and the Wholesale Customers agree to meet within 10 days and discuss whether a change is required to the allocation set forth in Section 2.1 in order to mitigate undue hardships that might otherwise be experienced by individual Wholesale Customers or Retail Customers. Following these discussions, the Tier 1 allocations set forth in Section 2.1 of this Plan, or a modified version thereof, may be adopted by mutual written consent of the SFPUC and the Wholesale Customers. If the SFPUC and Wholesale Customers meet and cannot agree on an appropriate Tier 1 allocation within 30 days of the SFPUC’s determination of water shortage greater than 20 percent, then (1) the provisions of Section
3.11(C) of the Agreement will apply, unless (2) all of the Wholesale Customers direct in writing that a Tier 2 allocation methodology agreed to by them be used to apportion the water to be made available to the Wholesale Customers collectively, in lieu of the provisions of Section 3.11(C).
The provisions of this Plan relating to transfers (in Section 2.5), banking (in Section 3), and excess use charges (in Section 4) shall continue to apply during system-wide shortages greater than 20 percent.
2.4. Monthly Water Budgets. Within 10 days after adopting a declaration of water shortage emergency, the SFPUC will determine the amount of Tier 1 water allocated to the Wholesale Customers collectively pursuant to Section 2.1. The SFPUC General Manager, using the Tier 2 allocation percentages shown on the list delivered by BAWSCA pursuant to Section 2.2, will calculate each Wholesale Customer’s individual annual Tier 2 allocation. The SFPUC General Manager, or his designee, will then provide each Wholesale Customer with a proposed schedule of monthly water budgets based on the pattern of monthly water purchases during the Supply Year immediately preceding the declaration of shortage (the “Default Schedule”). Each Wholesale Customer may, within two weeks of receiving its Default Schedule, provide the SFPUC with an alternative monthly water budget that reschedules its annual Tier 2 allocation over the course of the succeeding Supply Year. If a Wholesale Customer does not deliver an alternative monthly water budget to the SFPUC within two weeks of its receipt of the Default Schedule, then its monthly budget for the ensuing Supply Year shall be the Default Schedule proposed by the SFPUC.
Monthly Wholesale Customer water budgets will be derived from annual Tier 2 allocations for purposes of accounting for excess use. Monthly Wholesale Customer water budgets shall be adjusted during the year to account for transfers of shortage allocation under Section 2.5 and transfers of banked water under Section 3.4.
2.5. Transfers of Shortage Allocations. Voluntary transfers of shortage allocations between the SFPUC and any Wholesale Customers, and between any Wholesale Customers, will be permitted using the same procedure as that for transfers of banked water set forth in Section 3.4. The SFPUC and BAWSCA shall be notified of each transfer. Transfers of shortage allocations shall be deemed to be an emergency transfer and shall become effective on the third business day after notice of the transfer has been delivered to the SFPUC. Transfers of shortage allocations shall be in compliance with Section 3.05 of the -184-
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Agreement. The transferring parties will meet with the SFPUC, if requested, to discuss any effect the transfer may have on its operations.
SECTION 3. SHORTAGE WATER BANKING
3.1. Water Bank Accounts. The SFPUC shall create a water bank account for itself and each Wholesale Customer during shortages in conjunction with its resale customer billing process. Bank accounts will account for amounts of water that are either saved or used in excess of the shortage allocation for each agency; the accounts are not used for tracking billings and payments. When a shortage period is in effect (as defined in Section 1.4), the following provisions for bank credits, debits, and transfers shall be in force. A statement of bank balance for each Wholesale Customer will be included with the SFPUC’s monthly water bills.
3.2. Bank Account Credits. Each month, monthly purchases will be compared to the monthly budget for that month. Any unused shortage allocation by an agency will be credited to that agency’s water bank account. Credits will accumulate during the entire shortage period, subject to potential restrictions imposed pursuant to Section 3.2.1. Credits remaining at the end of the shortage period will be zeroed out; no financial or other credit shall be granted for banked water.
3.2.1. Maximum Balances. The SFPUC may suspend the prospective accumulation of credits in all accounts. Alternatively, the SFPUC may impose a ceiling on further accumulation of credits in water bank balances based on a uniform ratio of the bank balance to the annual water allocation. In making a decision to suspend the prospective accumulation of water bank credits, the SFPUC shall consider the available water supply as set forth in Section 1.1 of this Plan and other reasonable, relevant factors.
3.3. Account Debits. Each month, monthly purchases will be compared to the budget for that month.
Purchases in excess of monthly budgets will be debited against an agency’s water bank account. Bank debits remaining at the end of the fiscal year will be subject to excess use charges (see Section 4).
3.4. Transfers of Banked Water. In addition to the transfers of shortage allocations provided for in Section 2.5, voluntary transfers of banked water will also be permitted between the SFPUC and any Wholesale Customer, and among the Wholesale Customers. The volume of transferred water will be credited to the transferee’s water bank account and debited against the transferor’s water bank account.
The transferring parties must notify the SFPUC and BAWSCA of each transfer in writing (so that adjustments can be made to bank accounts), and will meet with the SFPUC, if requested, to discuss any affect the transfer may have on SFPUC operations. Transfers of banked water shall be deemed to be an emergency transfer and shall become effective on the third business day after notice of the transfer has been delivered to the SFPUC. If the SFPUC incurs extraordinary costs in implementing transfers, it will give written notice to the transferring parties within ten (10) business days after receipt of notice of the transfer. Extraordinary costs means additional costs directly attributable to accommodating transfers and which are not incurred in non-drought years nor simply as a result of the shortage condition itself.
Extraordinary costs shall be calculated in accordance with the procedures in the Agreement and shall be subject to the disclosure and auditing requirements in the Agreement. In the case of transfers between Wholesale Customers, such extraordinary costs shall be considered to be expenses chargeable solely to individual Wholesale Customers and shall be borne equally by the parties to the transfer. In the case of transfers between the SFPUC and a Wholesale Customer, the SFPUC’s share of any extraordinary transfer costs shall not be added to the Wholesale Revenue Requirement.
3.4.1. Transfer Limitations. The agency transferring banked water will be allowed to transfer no more than the accumulated balance in its bank. Transfers of estimated prospective banked credits and the “overdrafting” of accounts shall not be permitted. The price of transfer water originally derived from the SFPUC system is to be determined by the transferring parties and is not specified herein. Transfers of banked water shall be in compliance with Section 3.05 of the Agreement. -185-
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SECTION 4. WHOLESALE EXCESS USE CHARGES
4.1. Amount of Excess Use Charges. Monthly excess use charges shall be determined by the SFPUC at the time of the declared water shortage consistent with the calendar in Section 6 and in accordance with Section 6.03 of the Agreement. The excess use charges will be in the form of multipliers applied to the rate in effect at the time the excess use occurs. The same excess use charge multipliers shall apply to the Wholesale Customers and all Retail Customers. The excess use charge multipliers apply only to the charges for water delivered at the rate in effect at the time the excess use occurred.
4.2 Monitoring Suburban Water Use. During periods of voluntary rationing, water usage greater than a customer’s allocation (as determined in Section 2) will be indicated on each SFPUC monthly water bill.
During periods of mandatory rationing, monthly and cumulative water usage greater than a Wholesale Customer’s shortage allocation and the associated excess use charges will be indicated on each SFPUC monthly water bill.
4.3. Suburban Excess Use Charge Payments. An annual reconciliation will be made of monthly excess use charges according to the calendar in Section 6. Annual excess use charges will be calculated by comparing total annual purchases for each Wholesale Customer with its annual shortage allocation (as adjusted for transfers of shortage allocations and banked water, if any). Excess use charge payments by those Wholesale Customers with net excess use will be paid according to the calendar in Section 6. The SFPUC may dedicate excess use charges paid by Wholesale Customers toward the purchase of water from the State Drought Water Bank or other willing sellers in order to provide additional water to the Wholesale Customers. Excess use charges paid by the Wholesale Customers constitute Wholesale Customer revenue and shall be included within the SFPUC's annual Wholesale Revenue Requirement calculation.
4.4. Tier 1 Family Plan. During periods of mandatory rationing, the SFPUC will not assess excess use charges on any of the Wholesale Customers if the Wholesale Customers’ collective cumulative purchases over the course of the Supply Year are less than the Wholesale Customers’ Tier 1 allocation, as set forth in Section 2.1. If the Wholesale Customers’ collective cumulative purchases exceed the Wholesale Customers’ Tier 1 allocation, the SFPUC shall assess excess use charges on each individual Wholesale Customer that exceeded its individual Tier 2 allocation (established in accordance with Section 2.2) over the course of the Supply Year in proportion to each individual Wholesale Customer’s share of the collective Wholesale Customers’ purchases that exceeded the Wholesale Customers’ Tier 1 allocation.
SECTION 5. GENERAL PROVISIONS GOVERNING WATER SHORTAGE
ALLOCATION PLAN
5.1. Construction of Terms. This Plan is for the sole benefit of the parties and shall not be construed as granting rights to any person other than the parties or imposing obligations on a party to any person other than another party.
5.2. Governing Law. This Plan is made under and shall be governed by the laws of the State of California.
5.3. Effect on Agreement. This Plan describes the method for allocating water between the SFPUC and the collective Wholesale Customers during system-wide water shortages of 20 percent or less. This Plan also provides for the SFPUC to allocate water among the Wholesale Customers in accordance with directions provided by the Wholesale Customers through BAWSCA under Section 2.2, and to implement a program by which such allocations may be voluntarily transferred among the Wholesale Customers.
The provisions of this Plan are intended to implement Section 3.11(C) of the Agreement and do not affect, change or modify any other section, term or condition of the Agreement. -186-
6 21606945.9
5.4. Inapplicability of Plan to Allocation of SFPUC System Water During Non-Shortage Periods.
The SFPUC’s agreement in this Plan to a respective share of SFPUC system water during years of shortage shall not be construed to provide a basis for the allocation of water between the SFPUC and the Wholesale Customers when no water shortage emergency exists.
5.5. Termination. This Plan shall expire at the end of the Term of the Agreement. The SFPUC and the Wholesale Customers can mutually agree to revise or terminate this Plan prior to that date due to changes in the water delivery capability of the SFPUC system, the acquisition of new water supplies, and other factors affecting the availability of water from the SFPUC system during times of shortage.
SECTION 6. ALLOCATION CALENDAR
6.1. Annual Schedule. The annual schedule for the shortage allocation process is shown below. This schedule may be changed by the SFPUC to facilitate implementation.
6.1.1 In All Years Target Dates
1. SFPUC delivers list of annual purchases by each Wholesale Customer during the immediately preceding Supply Year
November 1
2. SFPUC meets with the Wholesale Customers and presents water supply forecast for the following Supply Year
February
3. SFPUC issues initial estimate of available water supply February 1
4. SFPUC announces potential first year of drought (if applicable) February 1
5. SFPUC and Wholesale Customers meet upon request to exchange information concerning water availability and projected systemwide purchases February 1-May 31
6. SFPUC issues revised estimate of available water supply, and confirms continued potential shortage conditions, if applicable March 1
7. SFPUC issues final estimate of available water supply April 15th or sooner if adequate snow course measurement data
is available to form a robust
estimate on available water
supply for the coming year.
8. SFPUC determines amount of water available to Wholesale Customers collectively
April 15th or sooner if adequate
snow course measurement data
is available to form a robust
estimate on available water
supply for the coming year.
In Drought Years Target Dates
9. SFPUC formally declares the existence of water shortage emergency (or end of water shortage emergency, if applicable) under Water Code Sections 350 et. seq.
April 15-30
10. SFPUC declares the need for a voluntary or mandatory response April 15-30
11. BAWSCA submits calculation to SFPUC of individual Wholesale Customers’ percentage shares of water allocated to Wholesale Customers collectively
April 15- 30
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12. SFPUC determines individual shortage allocations, based on BAWSCA’s submittal of individual agency percentage shares to SFPUC, and monthly water budgets (Default Schedule)
April 25—May 10
13. Wholesale Customers submit alternative monthly water budgets (optional)
May 8-May 24
14. Final drought shortage allocations are issued for the Supply Year beginning July 1 through June 30
June 1
15. Monthly water budgets become effective July 1
16. Excess use charges indicated on monthly Suburban bills August 1 (of the beginning year) through June 30 (of the
succeeding year)
17. Excess use charges paid by Wholesale Customers for prior year August of the succeeding year -188-
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3.07. Restrictions on Purchases of Water from Others; Minimum Annual Purchases A. Each Wholesale Customer (except for Alameda County Water District and the cities of Milpitas, Mountain View and Sunnyvale) agrees that it will not contract for, purchase or receive, with or without compensation, directly or indirectly, from any person, corporation, governmental agency or other entity, any water for delivery or use within its service area without the prior written consent of San Francisco.
B. The prohibition in subsection A does not apply to:
1. recycled water;
2. water necessary on an emergency and temporary basis, provided that the Wholesale Customer promptly gives San Francisco notice of the nature of the emergency, the amount of water that has been or is to be purchased, and the expected duration of the emergency; or
3. water in excess of a Wholesale Customer’s Individual Supply Guarantee.
C. Minimum Annual Purchase Quantities. Alameda County Water District and the cities of Milpitas, Mountain View and Sunnyvale may purchase water from sources other than San Francisco, provided that San Francisco shall require that each purchase a minimum annual quantity of water from San Francisco. These Minimum Annual Purchase Quantities are set out in Attachment E and shall also be included in the Individual Water Sales Contracts between San Francisco and each of these four Wholesale Customers (collectively referred to as the Original Minimum Purchase Customers). Pursuant to Section 3.04, certain Wholesale Customers may also be required to purchase Temporary Modified Minimum Annual Purchase Quantities, set out in Attachment E-1, from San Francisco. Attachment E will be updated pursuant to Section 3.04 to reflect any reduction in existing Minimum Annual Purchase Quantities and any addition of new Minimum Annual Purchase Quantities when Temporary Modified Minimum Annual Purchase Quantities expire and are removed from Attachment E-1; Individual Water Sales Contracts between San Francisco and any Wholesale Customers who are participants in a transfer under Section 3.04 will similarly be amended, as necessary.
1. Annual Notice. After the end of each fiscal year, the SFPUC will send a written notice to each Wholesale Customer that is subject to the minimum annual purchase requirements of this section with a Minimum Annual Purchase Quantity, or a Temporary Modified Minimum Annual Purchase Quantity with a copy to BAWSCA. The notice will include: (1 -189-
ATTACHMENT 2
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(a) the quantity of water delivered to theeach of those Wholesale CustomerCustomers individually and all of the Original Minimum Purchase Customers collectively during the previous fiscal year; (
2 (b) each Wholesale Customer’s individual Minimum Annual Purchase Quantity or Temporary Modified Minimum Annual Purchase Quantity (as adjusted for a Rebound Year, if applicable, under Section 3.07.C.2);
) whether or not the Wholesale Customer met its minimum annual purchase requirement under this section; (3
(c) whether or not each Wholesale Customer met its individual Minimum Annual Purchase Quantity or Temporary Modified Minimum Annual Purchase Quantity (as adjusted for a Rebound Year, if applicable);
(d) whether or not the Original Minimum Purchase Customers collectively purchased a volume of water from San Francisco that is equal to or greater than the sum of their four Minimum Annual Purchase Quantities (as adjusted for a Rebound Year, if applicable); (e) any Imputed Sales charged to the Wholesale Customer;Customers; and (4 (f) the status of any Temporary Modified Minimum Annual Purchase QuantityQuantities of the Wholesale Customer, if applicable. Customers.
C.2. Waiver and Rebound Year. The minimum annual purchase requirements set out in Attachments E and E-1 will be waived during a Drought or other period of water shortage if the water San Francisco makes available to these Wholesale Customers is less than itstheir Minimum Annual Purchase QuantityQuantities or Temporary Modified Minimum Annual Purchase Quantities, and may be waived during a state of emergency declared by the Governor of California that impacts water supply use or deliveries from the Regional Water System. Once the waiver is no longer in effect, each of the minimum annual purchase requirements set out in Attachments E and E-1 shall be temporarily set, for one full fiscal year (referred to as the Rebound Year), to the midpoint between (1) the Wholesale Customer’s actual San Francisco purchases for the final year in which the waiver was in effect, up to a maximum of the Customer’s Minimum Annual Purchase Quantity or Temporary Modified Minimum Annual Purchase Quantity, and (2) the Wholesale Customer’s Minimum Annual Purchase Quantity or Temporary Modified Minimum Annual Purchase Quantity set out in Attachment E or Attachment E-1, as applicable. Any fiscal year in which a Wholesale Customer meets its Rebound Year-adjusted Temporary Modified Minimum -190-
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Annual Purchase Quantity, but not its standard Temporary Modified Minimum Annual Purchase Quantity, will not count as a fiscal year in which the Wholesale Customer has met or exceeded its Temporary Modified Minimum Purchase Quantity for the purposes of Section 3.04.C(4)(a).
D. Minimum Annual Purchase Quantity Reset. As shown on Attachment E, in Fiscal Year 2025-26, the Parties reset the then-existing Minimum Annual Purchase Quantities of the Original Minimum Purchase Customers to 80% of the average San Francisco purchases of each Customer over the four most recent non-drought years preceding Fiscal Year 2024-25, effective for Fiscal Year 2024-25. If the Parties extend the Term of this Agreement beyond June 30, 2034 pursuant to Section 2.02, the Parties will review the Minimum Annual Purchase Quantities of the Original Minimum Purchase Customers again ten years after the Fiscal Year 2025-26 reset. If the Original Minimum Purchase Customers, or San Francisco, want to propose a reset of the Minimum Annual Purchase Quantities for Fiscal Year 2035-36, they will provide written notice on or before June 30, 2034. The Parties will meet and confer promptly to evaluate written reset proposals. By November 30, 2035, if the Parties have come to an agreement, the SFPUC will calculate the revised Minimum Annual Purchase Quantities based on the agreed upon methodology and provide written notice to the Original Minimum Purchase Customers and BAWSCA. The Original Minimum Purchase Customers will have at least 15 business days to review and meet and confer with the SFPUC with any questions or concerns before the revised quantities are finalized. If the Parties are unable to come to an agreement, the then-existing Minimum Annual Purchase Quantities will remain unchanged. Any changes to the Minimum Annual Purchase Quantities under this Section
3.07.D will be reflected in a revised Attachment E approved with the written concurrence of San Francisco and BAWSCA in accordance with Section 2.03.C. The Parties intend to include a continuing, periodic review of the Minimum Annual Purchase Quantities on a ten-year schedule in the successor to this Agreement.
E. Collective Minimum Annual Purchase Quantities Considered Before Application of Imputed Sales. Imputed Sales will not apply to any of the individual Original Minimum Purchase Customers in a particular fiscal year if those Customers have collectively purchased a volume of water from San Francisco that is equal to or greater than the sum of their four Minimum Annual Purchase Quantities shown in Attachment E (or adjusted for a Rebound Year pursuant to Section
3.07.C.2, if applicable). If the Original Minimum Purchase Customers do not collectively purchase that sum, any Original Minimum Purchase Customer that has not met its standard or Rebound Year-adjusted Minimum Annual Purchase Quantity will be responsible for Imputed Sales proportional to its share of the difference between that sum and the Original Minimum Purchase Customers’ total purchases from San Francisco. Examples of this calculation are contained in -191-
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Attachment E-3.
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Redline Comparing 2021 Amended and Restated Water Supply Agreement and 2025 Proposed Amendments: Sections 2.03, 3.09, and 9.07, and Attachment A Definitions
2.03. Amendments.
C. Amendments to Attachments. The following attachments may be amended with the written concurrence of San Francisco and BAWSCA on behalf of the Wholesale Customers:
Attachment Name
C Individual Supply Guarantees (amendments reflecting Section
3.04 transfers only)
E Minimum Annual Purchase Quantities (amendments reflecting Section 3.04 transfers and Section 3.07 resets only)
E-1 Temporary Modified Minimum Annual Purchase Quantities G Water Quality Notification and Communications Plan
(as may be amended)
J Water Use Measurement and Tabulation
L-1 Identification of WSIP Projects as Regional/Retail
N-1 Balancing Account/Rate Setting Calculation Table
N-2 Wholesale Revenue Requirement Schedules
N-3 Schedule of Projected Water Sales, Wholesale Revenue Requirement and Wholesale Rates
P Management Representation Letter
R Classification of Existing System Assets (subject to Section
5.11)
Amendments to these attachments shall be approved on behalf of San Francisco by the Commission and on behalf of BAWSCA by its Board of Directors, unless the Commission by resolution delegates such authority to the General Manager of the SFPUC or the Board of Directors by resolution delegates such authority to the General Manager/CEO of BAWSCA. -193-
21702335.2
3.09. Completion of WSIP
San Francisco will complete construction of the physical facilities in the WSIP by DecemberJune 30, 20212032. The SFPUC agrees to provide for full public review and comment by local and state interests of any proposed changes that delay previously adopted project completion dates or that delete projects. The SFPUC shall meet and consult with BAWSCA before proposing to the Commission any changes in the scope of WSIP projects which reduce their capacity or ability to achieve adopted Level of Service Goals and Objectives.
The SFPUC retains discretion to determine whether to approve the physical facilities in the WSIP until after it completes the CEQA process as set forth in Section 4.07.
9.07. City of Brisbane, Guadalupe Valley Municipal Improvement District, Town of Hillsborough
A. The parties acknowledge that San Francisco has heretofore provided certain quantities of water to the City of Brisbane (“Brisbane”), Guadalupe Valley Municipal Improvement District (“Guadalupe”) and the Town of Hillsborough (“Hillsborough”) at specified rates or without charge pursuant to obligations arising out of agreements between the predecessors of San Francisco and these parties, which agreements are referred to in judicial orders, resolutions of the SFPUC and/or the 1960 contracts between San Francisco and Brisbane, Guadalupe and Hillsborough. The parties intend to continue those arrangements and accordingly agree as follows:
1. Nothing in this Agreement is intended to alter, amend or modify the terms of SFPUC Resolution No. 74-06530053 or the indenture of July 18, 1908 between the Guadalupe Development Company and the Spring Valley Water Company.
2. Nothing in this Agreement is intended to alter, amend or modify the Findings of Fact and Conclusions of Law and Judgment dated May 25, 1961 in that certain action entitled City and County of San Francisco v. Town of Hillsborough in the Superior Court of the State of California in and for the County of Marin, No. 23282, as modified by the Satisfaction of Judgment filed October 23, 1961 and the Compromise and Release between Hillsborough and San Francisco dated August 22, 1961. The rights and obligations of Hillsborough under these documents shall continue as therein set forth.
3. Nothing in this Agreement is intended to affect or prejudice any claims, rights or remedies of Guadalupe or of Crocker Estate Company, a corporation, or of Crocker Redline Comparing 2021 Amended and Restated Water Supply Agreement and 2025 Proposed Amendments: Sections 2.03, 3.09, and 9.07, and Attachment A Definitions -194-
21702335.2
Land Company, a corporation, or of San Francisco, or of their successors and assigns, respectively, with respect to or arising out of that certain deed dated May 22, 1884, from Charles Crocker to Spring Valley Water Works, a corporation, recorded on May 24, 1884, in Book 37 of Deeds at page 356, Records of San Mateo County, California, as amended by that certain Deed of Exchange of Easements in Real Property and Agreement for Trade in Connection Therewith, dated July 29, 1954, recorded on August 4, 1954, in Book 2628, at page 298, Official Records of said San Mateo County, or with respect to or arising out of that certain action involving the validity or enforceability of certain provisions of said deed entitled City and County of San Francisco v. Crocker Estate Company, in the Superior Court of the State of California in and for the County of Marin, No. 23281.
Attachment A - Definitions
“Imputed Sales” apply when a Wholesale Customer does not meet the minimum annual purchase requirements of Section 3.07.C, as shown on Attachment E and Attachment E-1, except in fiscal years in which a waiver of these requirements is in effect. Imputed Sales are calculated as the difference between (1) a Wholesale Customer’s metered water purchases during a fiscal year, from July 1 to June 30, and (2) the larger of (a) or (b) as follows: (a) the Wholesale Customer’s Minimum Annual Purchase Quantity, as specified in Attachment E and may be adjusted pursuant to Section 3.07.C.2, or (b) the Wholesale Customer’s Temporary Modified Minimum Annual Purchase Quantity, as specified in Attachment E-1. and may be adjusted pursuant to Section 3.07.C.2. If a Wholesale Customer has more than one Temporary Modified Minimum Annual Purchase Quantity, the largest quantity is used for calculating Imputed Sales. Imputed Sales are considered wholesale water usage for the purposes of calculating the Proportional Annual Use, and any fees charged for Imputed Sales are considered wholesale revenues.
“Level of Service Goals and Objectives” refers to the “Phased WSIP Goals and Objectives” adopted by the Commission in Resolution No. 08-0200 dated October 30, 2008 as part of the approval of the WSIP, as updated and expanded by the "2023 Amended and Updated Water Enterprise Level of Service Goals and Objectives," adopted by the Commission in Resolution No. 23-0210 dated November 28, 2023, and any amendments that may be adopted by the Commission.
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ATTACHMENT E
MINIMUM ANNUAL PURCHASE QUANTITIES
(Section 3.07.C)
AGENCY MINIMUM ANNUAL PURCHASE QUANTITY
(IN MGD)1
Alameda County Water District 7.6486.682
City of Milpitas 5.3414.371
City of Mountain View 8.9306.047
City of Sunnyvale 8.9307.412
1 In Fiscal Year (FY) 2025-26, the then-existing Minimum Annual Purchase Quantities for Alameda County Water District and the Cities of Milpitas, Mountain View, and Sunnyvale were reset to 80% of each of those four customers’ average San Francisco purchases over the four non-drought years preceding FY 2024-25 (FY 2017-18, FY 2018-19, FY 2019-20, and FY 2020-21), effective FY 2024-25. Prior to this reset, from the effective date of this Agreement (July 1, 2009) through FY 2023-24, those four customers had the following Minimum Annual Purchase Quantities:
1. Alameda County Water District: 7.648 MGD
2. City of Milpitas: 5.341 MGD
3. City of Mountain View: 8.930 MGD
4. City of Sunnyvale: 8.930 MGD
Redline Comparing 2021 Amended and Restated Water Supply Agreement and 2025 Proposed Amendment Attachment E
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ATTACHMENT H
WATER SHORTAGE ALLOCATION PLAN
This Interim Water Shortage Allocation Plan (“Plan"), also known as the Tier 1 Shortage Plan, describes the method for allocating water between the San Francisco Public Utilities Commission (“SFPUC"), on the one hand, and the Wholesale Customers collectively, on the other, during shortages caused by drought. The Plan also implements a method for allocating water among the individual Wholesale Customers, known as the Tier 2 Drought Response Implementation Plan (“Tier 2 Plan”), which has separately been adopted by the Wholesale Customers and does not include the SFPUC. The Plan includes provisions for transfers, banking, and excess use charges. The Plan applies only when the SFPUC determines that a system-wide water shortage due to drought exists, and all references to “shortages” and “water shortages” are to be so understood. This Plan was initially adopted pursuant to Section 7.03(a) of the 1984 Settlement Agreement and Master Water Sales Contract and has been incorporated and updated to correspond to the terminology used in the June 2009 Water Supply Agreement between the City and County of San Francisco and Wholesale Customers in Alameda County, San Mateo County and Santa Clara County (“Agreement”), as amended and restated from time to time.
SECTION 1. SHORTAGE CONDITIONS
1.1. Projected Available SFPUC Water Supply. The SFPUC shall make an annual determination as to whether or not a shortage condition exists. The determination of projected available water supply shall consider, among other things, stored water, projected runoff, water acquired by the SFPUC from nonSFPUC sources, inactive storage, reservoir losses, allowance for carryover storage, and water bank balances, if any, described in Section 3.
1.2 Projected SFPUC Customer Purchases. The SFPUC will utilize purchase data, including volumes of water purchased by the Wholesale Customers and by Retail Customers (as those terms are used in the Agreement) in the year immediately prior to the drought, along with other available relevant information, as a basis for determining projected system-wide water purchases from the SFPUC for the upcoming year.Supply Year (defined as the period from July 1 through June 30).
1.3. Shortage Conditions. The SFPUC will compare the projected available water supply (Section 1.1) with projected system-wide water purchases (Section 1.2). A shortage condition exists if the SFPUC determines that the projected available water supply is less than projected system-wide water purchases in the upcoming Supply Year (defined as the period from July 1 through June 30).. When a shortage condition exists, SFPUC will determine whether voluntary or mandatory actions will be required to reduce purchases of SFPUC water to required levels.
1.3.1 Voluntary Response. If the SFPUC determines that voluntary actions will be sufficient to accomplish the necessary reduction in water use throughout its service area, the SFPUC and the Wholesale Customers will make good faith efforts to reduce their water purchases to stay within their annual shortageTier 1 and Tier 2 allocations as applicable (see Section 2 of this Attachment H) and associated monthly water use budgets. The SFPUC will not impose excess use charges during periods of voluntary rationing, but may suspend the prospective accumulation of water bank credits, or impose a ceiling on further accumulation of bank credits, consistent with Section 3.2.1 of this Plan.
1.3.2 Mandatory Response. If the SFPUC determines that mandatory actions will be required to accomplish the necessary reduction in water use in the SFPUC service area, the SFPUC may implement excess use charges as set forth in Section 4 of this Plan. -197-
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1.4. Period of Shortage. A shortage period commences when the SFPUC determines that a water shortage exists, as set forth in a declaration of water shortage emergency issued by the SFPUC pursuant to California Water Code Sections 350 et seq. Termination of the water shortage emergency will be declared by resolution of the SFPUC.
SECTION 2. SHORTAGE ALLOCATIONS
2.1. Annual Tier 1 Allocations between the SFPUC and the Wholesale Customers. The annual water supply available during shortages will be allocated between the SFPUC and the collective Wholesale Customers as follows:
Level of System Wide
Reduction in Water Use
Required
Share of Available Water
SFPUC Share Wholesale Customers Share
5% or less
6% through 10%
11% through 15%
16% through 20%
35.5%
36.0%
37.0%
37.5%
64.5%
64.0%
63.0%
62.5%
This Plan refers to the SFPUC’s and Wholesale Customers’ respective shares of available water so established as the SFPUC’s and Wholesale Customers’ Tier 1 allocations. The water allocated to the SFPUC shall correspond to the total allocation for all Retail Customers. In the event that the SFPUC share of the available water supply in the above table results in Retail Customers having a positive allocation (i.e., a supply of additional water rather than a required percentage reduction in water use), the SFPUC’s percentage share of the available water supply in the table shall be reduced to eliminate any positive allocation to Retail Customers, with a corresponding increase in the percentage share of the available water supply allocated to the Wholesale Customers. For any level of required reduction in system-wide water use during shortages, the SFPUC shall require Retail Customers to conserve a minimum of 5%, with any resulting reallocated supply credited to storage for inclusion in calculation of projected available water SFPUC water supply in a subsequent year (Section 1.1).
The parties agree to reevaluate the percentages of the available water supply allocated to Retail and Wholesale Customers by May 1, 2028.
2.2 Annual Tier 2 Allocations among the Wholesale Customers. The annual water supply allocated to the Wholesale Customers collectively during system wide shortages of 20 percent or less (i.e., the Wholesale Customers’ Tier 1 allocation) will be apportioned among them based on a methodology, known as the Tier 2 Plan, that has been separately adopted by all of the Wholesale Customers, and not the SFPUC, as described in Section 3.11(C) of the Agreement. In any year for which the methodology must be applied, the Bay Area Water Supply and Conservation Agency (“BAWSCA”) will calculate each Wholesale Customer’s individual percentage share of the amount of water allocated to the Wholesale Customers collectively pursuant to Section 2.1. Following the declaration or reconfirmation of a water shortage emergency by the SFPUC, BAWSCA will deliver to the SFPUC General Manager a list, signed by the President of BAWSCA’s Board of Directors and its General Manager, showing each Wholesale Customer together with its percentage share and stating that the list has been prepared in accordance with the methodology adopted by the Wholesale Customers. The SFPUC shall allocate water to each Wholesale Customer, as specified in the list. The shortage allocations so established (known as Tier 2 -198-
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allocations) may be transferred as provided in Section 2.5 of this Plan. If BAWSCA or all Wholesale Customers do not provide the SFPUC with individual allocations, the SFPUC may make a final allocation decision after first meeting and discussing allocations with BAWSCA and the Wholesale Customers.
The Tier 2 Plan methodology adopted by the Wholesale Customers utilizes the rolling average of each individual Wholesale Customer’s purchases from the SFPUC during the three immediately preceding Supply Years. The SFPUC agrees to provide BAWSCA by November 1 of each year a list showing the amount of water purchased by each Wholesale Customer during the immediately preceding Supply Year.
The list will be prepared using Customer Service Bureau report MGT440 (or comparable official record in use at the time), adjusted as required for any reporting errors or omissions, and will be transmitted by the SFPUC General Manager or his designee.
2.3. Limited Applicability of Plan to System Wide Shortages Greater Than Twenty Percent. The Tier 1 allocations of water between the SFPUC and the Wholesale Customers collectively, provided for in Section 2.1, apply only to shortages of 20 percent or less. The SFPUC and Wholesale Customers recognize the possibility of a drought occurring which could create system-wide shortages greater than 20 percent despite actions taken by the SFPUC aimed at reducing the probability and severity of water shortages in the SFPUC service area. If the SFPUC determines that a system wide water shortage greater than 20 percent exists, the SFPUC and the Wholesale Customers agree to meet within 10 days and discuss whether a change is required to the allocation set forth in Section 2.1 in order to mitigate undue hardships that might otherwise be experienced by individual Wholesale Customers or Retail Customers. Following these discussions, the Tier 1 water allocations set forth in Section 2.1 of this Plan, or a modified version thereof, may be adopted by mutual written consent of the SFPUC and the Wholesale Customers. If the SFPUC and Wholesale Customers meet and cannot agree on an appropriate Tier 1 allocation within 30 days of the SFPUC’s determination of water shortage greater than 20 percent, then (1) the provisions of Section 3.11(C) of the Agreement will apply, unless (2) all of the Wholesale Customers direct in writing that a Tier 2 allocation methodology agreed to by them be used to apportion the water to be made available to the Wholesale Customers collectively, in lieu of the provisions of Section 3.11(C).
The provisions of this Plan relating to transfers (in Section 2.5), banking (in Section 3), and excess use charges (in Section 4) shall continue to apply during system-wide shortages greater than 20 percent.
2.4. Monthly Water Budgets. Within 10 days after adopting a declaration of water shortage emergency, the SFPUC will determine the amount of Tier 1 water allocated to the Wholesale Customers collectively pursuant to Section 2.1. The SFPUC General Manager, using the Tier 2 allocation percentages shown on the list delivered by BAWSCA pursuant to Section 2.2, will calculate each Wholesale Customer’s individual annual Tier 2 allocation. The SFPUC General Manager, or his designee, will then provide each Wholesale Customer with a proposed schedule of monthly water budgets based on the pattern of monthly water purchases during the Supply Year immediately preceding the declaration of shortage (the “Default Schedule”). Each Wholesale Customer may, within two weeks of receiving its Default Schedule, provide the SFPUC with an alternative monthly water budget that reschedules its annual Tier 2 shortage allocation over the course of the succeeding Supply Year. If a Wholesale Customer does not deliver an alternative monthly water budget to the SFPUC within two weeks of its receipt of the Default Schedule, then its monthly budget for the ensuing Supply Year shall be the Default Schedule proposed by the SFPUC.
Monthly Wholesale Customer water budgets will be derived from annual Tier 2 allocations for purposes of accounting for excess use. Monthly Wholesale Customer water budgets shall be adjusted during the year to account for transfers of shortage allocation under Section 2.5 and transfers of banked water under Section 3.4.
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2.5. Transfers of Shortage Allocations. Voluntary transfers of shortage allocations between the SFPUC and any Wholesale Customers, and between any Wholesale Customers, will be permitted using the same procedure as that for transfers of banked water set forth in Section 3.4. The SFPUC and BAWSCA shall be notified of each transfer. Transfers of shortage allocations shall be deemed to be an emergency transfer and shall become effective on the third business day after notice of the transfer has been delivered to the SFPUC. Transfers of shortage allocations shall be in compliance with Section 3.05 of the Agreement. The transferring parties will meet with the SFPUC, if requested, to discuss any effect the transfer may have on its operations.
SECTION 3. SHORTAGE WATER BANKING
3.1. Water Bank Accounts. The SFPUC shall create a water bank account for itself and each Wholesale Customer during shortages in conjunction with its resale customer billing process. Bank accounts will account for amounts of water that are either saved or used in excess of the shortage allocation for each agency; the accounts are not used for tracking billings and payments. When a shortage period is in effect (as defined in Section 1.4), the following provisions for bank credits, debits, and transfers shall be in force. A statement of bank balance for each Wholesale Customer will be included with the SFPUC’s monthly water bills.
3.2. Bank Account Credits. Each month, monthly purchases will be compared to the monthly budget for that month. Any unused shortage allocation by an agency will be credited to that agency’s water bank account. Credits will accumulate during the entire shortage period, subject to potential restrictions imposed pursuant to Section 3.2.1. Credits remaining at the end of the shortage period will be zeroed out; no financial or other credit shall be granted for banked water.
3.2.1. Maximum Balances. The SFPUC may suspend the prospective accumulation of credits in all accounts. Alternatively, the SFPUC may impose a ceiling on further accumulation of credits in water bank balances based on a uniform ratio of the bank balance to the annual water allocation. In making a decision to suspend the prospective accumulation of water bank credits, the SFPUC shall consider the available water supply as set forth in Section 1.1 of this Plan and other reasonable, relevant factors.
3.3. Account Debits. Each month, monthly purchases will be compared to the budget for that month.
Purchases in excess of monthly budgets will be debited against an agency’s water bank account. Bank debits remaining at the end of the fiscal year will be subject to excess use charges (see Section 4).
3.4. Transfers of Banked Water. In addition to the transfers of shortage allocations provided for in Section 2.5, voluntary transfers of banked water will also be permitted between the SFPUC and any Wholesale Customer, and among the Wholesale Customers. The volume of transferred water will be credited to the transferee’s water bank account and debited against the transferor’s water bank account.
The transferring parties must notify the SFPUC and BAWSCA of each transfer in writing (so that adjustments can be made to bank accounts), and will meet with the SFPUC, if requested, to discuss any affect the transfer may have on SFPUC operations. Transfers of banked water shall be deemed to be an emergency transfer and shall become effective on the third business day after notice of the transfer has been delivered to the SFPUC. If the SFPUC incurs extraordinary costs in implementing transfers, it will give written notice to the transferring parties within ten (10) business days after receipt of notice of the transfer. Extraordinary costs means additional costs directly attributable to accommodating transfers and which are not incurred in non-drought years nor simply as a result of the shortage condition itself.
Extraordinary costs shall be calculated in accordance with the procedures in the Agreement and shall be subject to the disclosure and auditing requirements in the Agreement. In the case of transfers between Wholesale Customers, such extraordinary costs shall be considered to be expenses chargeable solely to individual Wholesale Customers and shall be borne equally by the parties to the transfer. In the case of -200-
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5 21606945.9
transfers between the SFPUC and a Wholesale Customer, the SFPUC’s share of any extraordinary transfer costs shall not be added to the Wholesale Revenue Requirement.
3.4.1. Transfer Limitations. The agency transferring banked water will be allowed to transfer no more than the accumulated balance in its bank. Transfers of estimated prospective banked credits and the “overdrafting” of accounts shall not be permitted. The price of transfer water originally derived from the SFPUC system is to be determined by the transferring parties and is not specified herein. Transfers of banked water shall be in compliance with Section 3.05 of the Agreement.
SECTION 4. WHOLESALE EXCESS USE CHARGES
4.1. Amount of Excess Use Charges. Monthly excess use charges shall be determined by the SFPUC at the time of the declared water shortage consistent with the calendar in Section 6 and in accordance with Section 6.03 of the Agreement. The excess use charges will be in the form of multipliers applied to the rate in effect at the time the excess use occurs. The same excess use charge multipliers shall apply to the Wholesale Customers and all Retail Customers. The excess use charge multipliers apply only to the charges for water delivered at the rate in effect at the time the excess use occurred.
4.2 Monitoring Suburban Water Use. During periods of voluntary rationing, water usage greater than a customer’s allocation (as determined in Section 2) will be indicated on each SFPUC monthly water bill.
During periods of mandatory rationing, monthly and cumulative water usage greater than a Wholesale Customer’s shortage allocation and the associated excess use charges will be indicated on each SFPUC monthly water bill.
4.3. Suburban Excess Use Charge Payments. An annual reconciliation will be made of monthly excess use charges according to the calendar in Section 6. Annual excess use charges will be calculated by comparing total annual purchases for each Wholesale Customer with its annual shortage allocation (as adjusted for transfers of shortage allocations and banked water, if any). Excess use charge payments by those Wholesale Customers with net excess use will be paid according to the calendar in Section 6. The SFPUC may dedicate excess use charges paid by Wholesale Customers toward the purchase of water from the State Drought Water Bank or other willing sellers in order to provide additional water to the Wholesale Customers. Excess use charges paid by the Wholesale Customers constitute Wholesale Customer revenue and shall be included within the SFPUC's annual Wholesale Revenue Requirement calculation.
4.4. Tier 1 Family Plan. During periods of mandatory rationing, the SFPUC will not assess excess use charges on any of the Wholesale Customers if the Wholesale Customers’ collective cumulative purchases over the course of the Supply Year are less than the Wholesale Customers’ Tier 1 allocation, as set forth in Section 2.1. If the Wholesale Customers’ collective cumulative purchases exceed the Wholesale Customers’ Tier 1 allocation, the SFPUC shall assess excess use charges on each individual Wholesale Customer that exceeded its individual Tier 2 allocation (established in accordance with Section 2.2) over the course of the Supply Year in proportion to each individual Wholesale Customer’s share of the collective Wholesale Customers’ purchases that exceeded the Wholesale Customers’ Tier 1 allocation.
SECTION 5. GENERAL PROVISIONS GOVERNING WATER SHORTAGE
ALLOCATION PLAN
5.1. Construction of Terms. This Plan is for the sole benefit of the parties and shall not be construed as granting rights to any person other than the parties or imposing obligations on a party to any person other than another party.
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5.2. Governing Law. This Plan is made under and shall be governed by the laws of the State of California.
5.3. Effect on Agreement. This Plan describes the method for allocating water between the SFPUC and the collective Wholesale Customers during system-wide water shortages of 20 percent or less. This Plan also provides for the SFPUC to allocate water among the Wholesale Customers in accordance with directions provided by the Wholesale Customers through BAWSCA under Section 2.2, and to implement a program by which such allocations may be voluntarily transferred among the Wholesale Customers.
The provisions of this Plan are intended to implement Section 3.11(C) of the Agreement and do not affect, change or modify any other section, term or condition of the Agreement.
5.4. Inapplicability of Plan to Allocation of SFPUC System Water During Non-Shortage Periods.
The SFPUC’s agreement in this Plan to a respective share of SFPUC system water during years of shortage shall not be construed to provide a basis for the allocation of water between the SFPUC and the Wholesale Customers when no water shortage emergency exists.
5.5. Termination. This Plan shall expire at the end of the Term of the Agreement... The SFPUC and the Wholesale Customers can mutually agree to revise or terminate this Plan prior to that date due to changes in the water delivery capability of the SFPUC system, the acquisition of new water supplies, and other factors affecting the availability of water from the SFPUC system during times of shortage.
SECTION 5. ALLOCATION CALENDAR
6.1. Annual Schedule. The annual schedule for the shortage allocation process is shown below. This schedule may be changed by the SFPUC to facilitate implementation.
6.1.1 In All Years Target Dates
1. SFPUC delivers list of annual purchases by each Wholesale Customer during the immediately preceding Supply Year
November 1
2. SFPUC meets with the Wholesale Customers and presents water supply forecast for the following Supply Year
February
3. SFPUC issues initial estimate of available water supply February 1
4. SFPUC announces potential first year of drought (if applicable) February 1
5. SFPUC and Wholesale Customers meet upon request to exchange information concerning water availability and projected systemwide purchases February 1-May 31
6. SFPUC issues revised estimate of available water supply, and confirms continued potential shortage conditions, if applicable March 1
7. SFPUC issues final estimate of available water supply April 15th or sooner if adequate snow course measurement data
is available to form a robust
estimate on available water
supply for the coming year.
8. SFPUC determines amount of water available to Wholesale Customers collectively
April 15th or sooner if adequate
snow course measurement data
is available to form a robust
estimate on available water
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7 21606945.9
supply for the coming year.
In Drought Years Target Dates
9. SFPUC formally declares the existence of water shortage emergency (or end of water shortage emergency, if applicable) under Water Code Sections 350 et. seq.
April 15-30
10. SFPUC declares the need for a voluntary or mandatory response April 15-30
11. BAWSCA submits calculation to SFPUC of individual Wholesale Customers’ percentage shares of water allocated to Wholesale Customers collectively
April 15- 30
12. SFPUC determines individual shortage allocations, based on BAWSCA’s submittal of individual agency percentage shares to SFPUC, and monthly water budgets (Default Schedule)
April 25—May 10
13. Wholesale Customers submit alternative monthly water budgets (optional)
May 8-May 24
14. Final drought shortage allocations are issued for the Supply Year beginning July 1 through June 30
June 1
15. Monthly water budgets become effective July 1
16. Excess use charges indicated on monthly Suburban bills August 1 (of the beginning year) through June 30 (of the
succeeding year)
17. Excess use charges paid by Wholesale Customers for prior year August of the succeeding year -203-
RESOLUTION NO. 25-
RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH APPROVING AND ADOPTING THE TIER 2 DROUGHT RESPONSE
IMPLEMENTATION PLAN PURSUANT TO SECTION 3.11.C OF THE AMENDED AND RESTATED WATER SUPPLY AGREEMENT, UNDER CEQA GUIDELINE 15301 WHEREAS, the Town of Hillsborough (“Town”) is one of twenty-six (26) agencies in San Mateo, Santa Clara and Alameda Counties (Wholesale Customers) which purchase water from the City and County of San Francisco (San Francisco) pursuant to a Water Supply Agreement entered into in 2009, and recently amended in 2018, 2021 and 2025 (the Agreement or WSA).
Collectively these 26 agencies are referred to in the Agreement as Wholesale Customers; and
WHEREAS, Section 3.11 of the Agreement addresses situations when insufficient water is available in the San Francisco Regional Water System (RWS) to meet the full demands of all users. Section 3.11.C provides that during periods of water shortage caused by drought, the San Francisco Public Utilities Commission (SFPUC) will allocate available water between its retail customers and the Wholesale Customers collectively, in accordance with a schedule contained in the Water Shortage Allocation Plan set forth in Attachment H to the Agreement (Tier 1 Plan); and
WHEREAS, Section 3.11.C authorizes the Wholesale Customers to adopt a Drought Allocation Plan, including a methodology for allocating the available water among the individual Wholesale Customers (Tier 2 Plan). The WSA also commits the SFPUC to honor allocations of water unanimously agreed to by all Wholesale Customers or, if unanimous agreement cannot be achieved, water allocations that have been adopted by the Board of Directors of the Bay Area Water Supply and Conservation Agency (BAWSCA). The Agreement also provides that the SFPUC can allocate water supplies as necessary during a water shortage emergency if no agreed upon plan for water allocation has been adopted by the 26 Wholesale Customers or the BAWSCA Board of Directors; and WHEREAS, commencing in January 2022, representatives appointed by the managers of each of the Wholesale Customers began meeting monthly to develop a set of principles to serve as guidelines for an equitable allocation methodology, and to develop formulas and procedures, in order to implement those principles. These discussions, and supporting technical analyses, have been conducted with the assistance of BAWSCA; and WHEREAS, the Tier 2 Plan, attached to this resolution as Exhibit A, has been endorsed by all of the Wholesale Customer representatives who participated in the formulation process and they have each recommended that it be formally adopted by the governing body of their respective agencies; and
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ATTACHMENT 3
2 WHEREAS, the Tier 2 Plan allocates the collective Wholesale Customer share of RWS supply made available by the SFPUC among each of the 26 Wholesale Customers through December 31, 2034 and is coordinated with the term of the Agreement, and extension and renewal terms.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the Town of Hillsborough as follows:
1. The Tier 2 Drought Response Implementation Plan, as attached as Exhibit A (Tier 2 Plan) is approved.
2. This approval is hereby conditioned upon all of the other twenty-five Wholesale Customers approving the Tier 2 Plan, such approvals being evidenced through adoption of similar resolutions or, in the case of private-sector organizations, by other equivalently binding written commitments signed by an executive officer acting within the scope of delegated authority, and all such approvals occurring on or before December 31, 2025.
3. If such resolutions or binding commitments are not adopted by that date, this resolution will automatically expire and be of no further effect after December 31, 2025, unless it has been extended prior thereto by further action of this Council.
Mayor of the Town of Hillsborough
Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 11th day of August 2025, by the following vote of the members thereof:
AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
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Tier 2 Drought
Response
Implementation
Plan
Drought Shortage
Allocation Plan for the
Regional Water System
Wholesale Customers
EXHIBIT A
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Droughts on the San Francisco Regional Water
System (RWS) are governed by two plans:
The Tier 1 Plan allocates RWS water between San Francisco retail customers and the Wholesale Customers collectively.
The Tier 2 Plan is the method for allocating the Wholesale Customers’ share of RWS supply among the 26 Wholesale
Customers.
Tier 1 and 2 Plan Implementation
Following declaration of a water shortage emergency by the San Francisco Public Utilities Commission (SFPUC), the SFPUC calculates the Tier 1 allocations. Then BAWSCA calculates each Wholesale Customer’s individual allocation by applying the methodology in the Tier 2 Plan.
For the duration of the water shortage emergency, the SFPUC provides monthly reports to Wholesale Customers and
BAWSCA, tracking actual water usage against drought
allocations and detailing any transfers of shortage allocations or banked water among agencies.
The Tier 1 and Tier 2 Plans were implemented for the first time ever during the 2021-23 drought.
Tier 1 and Tier 2
Drought Allocation
Plans
December 2024
SF Retail
Share
Wholesale
Customer
Share
Application and Adoption of the
Tier 1 and Tier 2 Plans
The Tier 1 and Tier 2 Plans only apply during
system-wide water shortages caused by
drought of 20% or less.
The Tier 1 Plan is contained in the Water
Supply Agreement between San Francisco
and the Wholesale Customers (WSA).
Changes to the Tier 1 Plan require an
amendment to the WSA.
The existing Tier 2 Plan was adopted in
2011 and set to expire in 2018. Since 2018,
the BAWSCA Board has annually extended
the existing Tier 2 Plan while the Wholesale
Customers developed a revised Tier 2 Plan.
The Tier 2 Plan must be unanimously
adopted by the 26 Wholesale
Customers. Under the WSA, San
Francisco must provide allocations of
water unanimously agreed to by all
Wholesale Customers or adopted by the
BAWSCA Board. (WSA Section 3.11.C) If a
Tier 2 Plan is not adopted by the BAWSCA
Board, San Francisco may make a final
allocation decision.
Tier 1 Plan Tier 2 Plan
21335941.6 -207-
Tier 1 Shortage Allocation Plan Update
The Tier 1 Shortage Allocation Plan (Tier 1 Plan)
allocates RWS supplies between San Francisco
retail customers and the Wholesale Customers
collectively and outlines the administrative
process for drought allocations, including
timelines, transfers of shortage allocations, and
excess use charges.
San Francisco and the Wholesale Customers
agreed to amend the Tier 1 Plan to include a new
Tier 1 Excess Use Charge Family Plan (described
below).
Updated Tier 2 Drought Response and Implementation Plan In early 2022, BAWSCA and Wholesale Customers began negotiating a Tier 2 Drought Response Implementation Plan (Tier 2 Plan) update. Lead negotiators appointed by each agency established four policy principles (listed below). Through mid-2024, the lead negotiators assessed various methods for allocating RWS drought supplies to align with these policy principles until they agreed on a final methodology.
Policy Principles
#1: Provide sufficient water for the basic health
and safety needs of customers.
#2: Minimize economic and other adverse
impacts of water shortages on customers and
the BAWSCA region.
#3: Provide predictability of drought allocations
through consistent and predetermined rules for
calculation, while allowing for flexibility to
respond to unforeseen circumstances.
#4: Recognize benefits of, and avoid
disincentives for, water use efficiency and
development of alternative water supply
projects.
Tier 2 Plan Term
The Tier 2 Plan term is coordinated with the term
of the WSA to avoid simultaneous renegotiation
of these related agreements.
Negotiated Tier 2 Plan Allocation Formula
Allocations are determined using multiple
factors:
- Minimum and Maximum Cutbacks:
Establishes the upper and lower bounds of
each Wholesale Customer’s final allocation.
- Residential Per Capita Basis: Allocates
water on a residential per capita basis, based
on the portion of each agency’s potable
water demand met by the RWS.
- Non-Residential Base Use: Allocates water
based on each agency’s estimated nonresidential indoor (base) use. - Seasonal Purchases: Allocates water based
on estimated seasonal use from the RWS.
- Base Purchases/Individual Supply
Guarantee (ISG) Weighted Share:
Remaining water is allocated based on a
weighted share of 2/3 of RWS purchases and
1/3 of ISG.
Tier 1 Excess Use Charge Family Plan
Excess use charges are only applied when the collective Wholesale Customer usage exceeds the Tier 1 allocation. If this occurs, excess use charges will be proportionally applied to agencies that exceeded their individual Tier 2 allocations. 21335941.6 -208-
i
21418818.2
Table of Contents
1. Introduction ........................................................................................................................ 1
2. Relationship to Water Supply Agreement ........................................................................... 1
3. Development Process ........................................................................................................ 1
4. Plan Policy Principles ......................................................................................................... 2
5. Allocation Formula.............................................................................................................. 2 Base Period Calculations................................................................................................ 2 Tier 2 Plan Allocation Formula Inputs ............................................................................. 2 Step 0: Establish SFPUC Minimum and Maximum Cutback ........................................... 3 Step 1: Efficient Residential Allocation............................................................................ 4 Step 2: Non-Residential Base Allocation ........................................................................ 4 Step 3: SFPUC Maximum Cutback Reserve................................................................... 5 Step 4: Seasonal Allocation............................................................................................ 5 Step 5: SFPUC Purchases and ISG-Based Allocation.................................................... 5
6. Plan Implementation........................................................................................................... 5
7. Plan Term .......................................................................................................................... 6 Attachments
Attachment A: List of Abbreviations and Definitions ................................................................... 8 Attachment B: Tier 2 Plan Data Sources and Calculations........................................................10 Attachment C: Example of Tier 2 Plan Excel-Based Model Calculations...................................15 -209-