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Council Agenda: 06/10/2025
Item No.: 6.1
DRAFT--Contact the Office of the City Clerk at (408)535-1260 or [email protected] for final document.
RESOLUTION NO. ______________
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN
JOSE (A) DECLARING THE CITY-OWNED PROPERTY
LOCATED ON THE EAST SIDE OF ZANKER ROAD, NORTH
OF STATE ROUTE 237 IN SAN JOSE, CONSISTING OF 1
PARCEL OF LAND TOTALING APPROXIMATELY 2
ACRES, FURTHER IDENTIFIED AS ASSESSOR’S PARCEL
NUMBER 015-31-063 AS “EXEMPT SURPLUS LAND”
PURSUANT TO CALIFORNIA GOVERNMENT CODE §
54221(F)(1)(D) AND IN ACCORDANCE WITH SAN JOSÉ
MUNICIPAL CODE § 4.20.080(B)(2) AS A TRANSFER OF
SURPLUS PROPERTY TO ANOTHER LOCAL, STATE, OR
FEDERAL AGENCY FOR THAT AGENCY’S USE; AND (B)
AUTHORIZING THE CITY MANAGER OR HER DESIGNEE
TO: (1) NEGOTIATE AND EXECUTE THE OPTION
AGREEMENT FOR FIRST AMENDMENT TO GROUND
LEASE AND PROPERTY USE AGREEMENT; AND (2)
NEGOTIATE AND EXECUTE THE FIRST AMENDED
GROUND LEASE AND PROPERTY USE AGREEMENT FOR
THE ADVANCED WATER TREATMENT FACILITY
BETWEEN CITY OF SAN JOSE, CITY OF SANTA CLARA,
AND THE SANTA CLARA VALLEY WATER DISTRICT, AND
THE FIRST AMENDED RECYCLED WATER FACILITIES
AND PROGRAMS INTEGRATION AGREEMENT, AND THE
AMENDED AND RESTATED AGREEMENT FOR
OPERATION AND MAINTENANCE OF THE SILICON
VALLEY ADVANCED WATER PURIFICATION CENTER
BETWEEN THE CITY OF SAN JOSE AND THE SANTA
CLARA VALLEY WATER DISTRICT, UPON SATISFACTION
OF THE CONDITIONS TO EXERCISE THE OPTION
INCLUDING THE COMPLETION AND APPROVAL OF
ENVIRONMENTAL REVIEW FOR THE PROPOSED DIRECT
POTABLE REUSE DEMONSTRATION FACILITY IN
COMPLIANCE WITH CALIFORNIA ENVIRONMENTAL
QUALITY ACT
WHEREAS, the City of San José (“City”) and Santa Clara Valley Water District (“Valley Water”) have historically collaborated to expand recycled water and augment the local water supply in the County of Santa Clara (“County”); and NVF:LCB:CLS
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Council Agenda: 06/10/2025
Item No.: 6.1
DRAFT--Contact the Office of the City Clerk at (408)535-1260 or [email protected] for final document.
WHEREAS, the City and Valley Water partnered on the construction of the Silicon Valley Advanced Water Purification Center (“SVAWPC”), an advanced wastewater treatment facility producing up to eight million gallons per day of purified water that is blended with treated effluent from the San José/Santa Clara Regional Wastewater Facility (“RWF”), to enhance recycled water quality distributed by the South Bay Water Recycling (“SBWR”) program; and
WHEREAS, the City and City of Santa Clara are co-owners of the land surrounding the RWF, and the City serves as the administering agency for the RWF; and WHEREAS, on March 2, 2010, the City and Valley Water entered into a Ground Lease and Property Use Agreement (“Ground Lease Agreement”), which provided for Valley Water to construct and operate the SVAWPC on RWF premises, and the Recycled Water Facilities and Programs Integration Agreement (“Integration Agreement”), which established a cost-sharing methodology between the parties to offset the cost of operating the SVAWPC; and
WHEREAS, on October 23, 2012, the City and Valley Water executed an Operation and Maintenance Agreement (“O&M Agreement”) for the SVAWPC; and WHEREAS, in 2023, the City and Valley Water executed a letter of intent to collaborate on the expansion of recycled and purified water in the County, and in 2024, the City and Valley Water entered into a Master Funding Agreement to provide for funding of City staff and other resources to support implementation of Valley Water’s projects; and WHEREAS, Valley Water seeks to evaluate the feasibility of purifying treated municipal wastewater for direct potable reuse (“DPR”) as a strategy to combat future droughts that are expected to be intensive under a changing climate; and NVF:LCB:CLS
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Item No.: 6.1
DRAFT--Contact the Office of the City Clerk at (408)535-1260 or [email protected] for final document.
WHEREAS, Valley Water proposes to construct and operate a DPR demonstration and learning facility (“DPR Demonstration Facility”) on a portion of the SVAWPC premises that will inform the eventual design and operation of a larger, full-scale, permanent DPR facility; and
WHEREAS, the DPR project could help the region meet local water supply goals, including the goal to meet at least 10% of the water demand in the County through recycled and purified water; and
WHEREAS, the City owns the property located on the east side of Zanker Road, north of State Route 237 in San José, consisting of 1 parcel of land totaling approximately 2 acres, further identified as Assessor’s Parcel Number 015-31-063 (“Property”), where the proposed DPR Demonstration Facility will be constructed; and WHEREAS, the proposed Option Agreement for First Amendment to the Ground Lease Agreement (“Option Agreement”), which allows mutual ability to delay the exercise of the option as a result of the planning process or environmental review for the DPR Demonstration Facility, will be reviewed and approved by the City of Santa Clara, as co- owner of the RWF, and will only be exercised, in part, upon the completion of environmental review and approval of California Environmental Quality Act (“CEQA”) determinations; and
WHEREAS, the proposed First Amended Ground Lease Agreement will update the footprint of Valley Water’s SVAWPC lease to account for the construction and operation of the DPR Demonstration Facility; and
WHEREAS, the proposed First Amended Integration Agreement will reset the cost- sharing methodology between the City and Valley Water to account for a projected NVF:LCB:CLS
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Item No.: 6.1
DRAFT--Contact the Office of the City Clerk at (408)535-1260 or [email protected] for final document.
increase in future revenues from the sale of recycled water due to an increase in wholesale water rates; and
WHEREAS, the proposed Amended and Restated O&M Agreement will update the operational obligations of the City and Valley Water to account for the production and treatment of the DPR water; and
WHEREAS, the exercise of the Option Agreement is conditioned on execution of the proposed amendments to the O&M Agreement and Integration Agreement; and WHEREAS, the City desires to declare the Property as “exempt surplus land,” pursuant to California Government Code Section 54221(f)(1)(D) and in accordance with San José Municipal Code Section 4.20.080(B)(2) as a transfer of surplus property to another local, state, or federal agency for that agency’s use, for Valley Water’s proposed DPR Demonstration Facility; and
WHEREAS, the City desires to negotiate and execute the Option Agreement, First Amended Ground Lease Agreement, First Amended Integration Agreement, and the Amended and Restated O&M Agreement, upon satisfaction of the conditions to exercise the option including the completion and approval of environmental review for the proposed direct potable reuse demonstration facility in compliance with CEQA;
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SAN JOSE THAT:
(a) The City-owned property located on the east side of Zanker Road, north of State Route 237 in San José, consisting of 1 parcel of land totaling approximately 2 acres, further identified as Assessor’s Parcel Number 015-31-063, is hereby declared as “exempt surplus land” pursuant to California Government Code NVF:LCB:CLS
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Item No.: 6.1
DRAFT--Contact the Office of the City Clerk at (408)535-1260 or [email protected] for final document.
Section 54221(f)(1)(D) and in accordance with San José Municipal Code Section
4.20.080(B)(2) as a transfer of surplus property to another local, state, or federal agency for that agency’s use; and
(b) The City Manager or her designee is hereby authorized to:
(1) Negotiate and execute the Option Agreement for First Amendment to Ground Lease and Property Use Agreement; and
(2) Negotiate and execute the First Amended Ground Lease and Property Use Agreement for the Advanced Water Treatment Facility between City of San José, City of Santa Clara, and the Santa Clara Valley Water District, and the First Amended Recycled Water Facilities and Programs Integration Agreement, and the Amended and Restated Agreement for Operation and Maintenance of the Silicon Valley Advanced Water Purification Center between the City of San José and the Santa Clara Valley Water District, upon satisfaction of the conditions to exercise the option including the completion and approval of environmental review for the proposed direct potable reuse demonstration facility in compliance with California Environmental Quality Act.
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Council Agenda: 06/10/2025
Item No.: 6.1
DRAFT--Contact the Office of the City Clerk at (408)535-1260 or [email protected] for final document.
ADOPTED this _____ day of ___________, 2025, by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
MATT MAHAN
Mayor
ATTEST:
TONI J. TABER, MMC
City Clerk