TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Jeffrey Provenzano
Jim Shannon
SUBJECT: See Below DATE: October 14, 2025
Approved
Date:
10/23/2025
COUNCIL DISTRICT: Citywide
SUBJECT: Master Service Agreement with SCI Consulting Group to Perform Funding and Revenue Analysis of the City’s Stormwater Program
RECOMMENDATION
(a) Adopt a resolution authorizing the City Manager or her designee to negotiate and execute a Master Service Agreement with SCI Consulting Group from the date of execution through December 31, 2027, for an amount not to exceed $1,000,000.
(b) Adopt the following 2025-2026 Appropriation Ordinance amendments in the Storm Sewer Operating Fund:
(1) Decrease the Polychlorinated Biphenyls Settlement Reserve by $1,000,000; and
(2) Increase the Non/Personal Equipment appropriation to the Environmental Services Department by $1,000,000.
SUMMARY AND OUTCOME
Approval of a master service agreement with SCI Consulting Group will allow the City of San José (City) to assess the near and long-term funding needs to operate the City’s storm sewer system, assess the range and viability of revenue alternatives, and develop an implementation strategy to more sustainably align the revenue with stormwater program costs.
BACKGROUND
The City operates its storm sewer system under the Municipal Regional National Pollutant Discharge Elimination System Permit (Stormwater Permit) issued by the San Francisco Bay Regional Water Quality Control Board. The Stormwater Permit specifies COUNCIL AGENDA: 11/4/25
FILE: 25-1159
ITEM: 2.9
HONORABLE MAYOR AND CITY COUNCIL
October 14, 2025
Subject: Master Service Agreement with SCI Consulting Group to Perform Funding and Revenue Analysis of the City’s Stormwater Program
actions necessary to prohibit non-stormwater discharges from entering the municipal storm sewer system and waterways to protect local creeks and the San Francisco Bay.
These regulatory requirements, as well as the ongoing operations, maintenance, and capital improvements of the storm sewer system, are primarily funded by the Storm Sewer Service Charge (SSSC) paid by property owners. Other funding sources include federal and state grants, the Public Safety and Infrastructure Bond Fund, and the General Fund, when and where appropriate.
The costs to comply with the Stormwater Permit are significant, which has been documented in the recent Stormwater Management Annual Report. 1 Operations and
maintenance costs continue to grow as trash capture devices are added and additional mitigation efforts for pollutants, including trash, polychlorinated biphenyls, mercury, and copper are required. In addition, the City’s Storm System Master Plan and the 2024 City Deferred Maintenance and Infrastructure Backlog Report2 have identified significant capital improvements necessary to ensure the system remains efficient and effective.
As described in the June 2025 Sanitary Sewer Service and Use Charge Rates and SSSC Rates memorandum,
3 the combined expenditure needs of the operating and
capital components eclipse ongoing revenues from the SSSC. The SSSC rates have remained unchanged since fiscal year 2011-2012.
The City seeks to acquire professional consulting services to assess the near and long- term funding needs to operate the City’s storm sewer system, assess the range and viability of revenue alternatives, and develop an implementation strategy to more sustainably align the revenue with stormwater program costs.
ANALYSIS
On May 22, 2025, the City issued a Request for Proposals for interested firms to submit proposals to conduct a stormwater program funding analysis. Two proposals were received by the June 20, 2025 submittal deadline. Staff reviewed the written proposals and scored the firms based on categories of experience and qualifications, project approach, technical capabilities, and the City’s Local and Small Business preferences.
Results are listed in the following table:
1 Stormwater Management Annual Report 2024-2025
2https://sanjose.legistar.com/View.ashx?M=F&ID=12828173&GUID=D9051F3C-D031-4CAA-8F10- 40C0865FD545 Status Report on Deferred Maintenance and Infrastructure Backlog 3 Public Hearing on Sewer Service and Use Charge Rates and Storm Sewer Service Charge Rates
HONORABLE MAYOR AND CITY COUNCIL
October 14, 2025
Subject: Master Service Agreement with SCI Consulting Group to Perform Funding and Revenue Analysis of the City’s Stormwater Program
General
Requirements
10%
Experience
and
Qualifications
30%
Project
Approach
30%
Technical
Capabilities
20%
Local
Business
Preference
5%
Small
Business
Preference
5%
TOTAL
SCI
Consulting
Group
9 26
24 18
0 0
77 Raftelis
Financial
Consultants,
Inc.
10 23
24 17
0 0
74 Both consultants’ proposals rated well, with each demonstrating a high degree of expertise and relevant experience, resulting in very comparable total scores.
Consequently, oral interviews of the two consultants were performed on August 27, 2025 to further evaluate their qualifications and fit. Following the oral interviews, the ratings were adjusted, as described in the Request for Proposals, and are shown in the following table:
General
Requirements
5%
Experience
and
Qualifications
20%
Project
Approach
20%
Technical
Capabilities
15%
Oral
Interview
30%
Local
Business
Preference
5%
Small
Business
Preference
5%
FINAL
TOTAL
SCI
Consulting
Group
5 17
16 14
26 0
0 78
Raftelis
Financial
Consultants,
Inc.
5 15
16 13
21 0
0 70
During the subsequent oral interviews, both consultants validated their respective expertise and experience to perform the services requested; however, SCI Consulting Group differentiated itself with a clear and more concise vision and path of the work needed to accomplish the scope of services and the ability to provide consistent support to the City through the potentially two-year endeavor.
EVALUATION AND FOLLOW-UP
If the Master Service agreement is executed, staff anticipates bringing forward recommendations for the City Council’s consideration in the summer of 2026. Any recommended impacts to the SSSC prior to this or any preliminary updates would be brought forward or included as part of future budget processes.
HONORABLE MAYOR AND CITY COUNCIL
October 14, 2025
Subject: Master Service Agreement with SCI Consulting Group to Perform Funding and Revenue Analysis of the City’s Stormwater Program
COST SUMMARY/IMPLICATIONS
1. TOTAL COST OF AGREEMENT
Contract/Agreement Amount $1,000,000
2. SOURCE OF FUNDING
This project will be funded from the partial liquidation of the Polychlorinated Biphenyls Settlement Reserve. The City of San José received $4.5 million in settlement proceeds in the class action lawsuit entitled City of Long Beach, et al. v. Monsanto Company, et al. Under the settlement, which does not establish liability or fault, the proceeds received by the City are to be used as restitution and reimbursement, including for mitigation of Polychlorinated Biphenyls contamination on its “property, stormwater and/or stormwater systems.” This funding may also be leveraged to secure future storm sewer funding and to address Stormwater Permit needs related to removal of trash in waterways and an alternative compliance program for development needs.
3. FISCAL IMPACT
This one-time allocation of funds for the agreement compensation will have no direct impact on ongoing operating and maintenance costs or to the General Fund.
BUDGET REFERENCE
The table below identifies the fund and appropriations to fund the recommendations as part of this memorandum.
Fund
#
Appn.
#
Appropriation
Name Total Appn. Rec. Budget
Action
Amount for
Contract
2025-2026
Proposed
Operating
Budget
Page*
Last Budget
Action
(Date, Ord.
No.)
446 8789 Polychlorinated
Biphenyls
Settlement Reserve
$4,516,761 ($1,000,000) N/A 950 6/17/2025
31230
446 0762 Non/Personal
Equipment
$3,457,527 $1,000,000 $1,000,000 949 6/17/2025
31230
* The 2025-2026 Adopted Operating Budget was approved on June 10, 2025 and adopted on June 17, 2025 by the City Council.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office, Public Works Department and Transportation Department.
HONORABLE MAYOR AND CITY COUNCIL
October 14, 2025
Subject: Master Service Agreement with SCI Consulting Group to Perform Funding and Revenue Analysis of the City’s Stormwater Program
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the November 4, 2025 City Council meeting.
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Not a Project, File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
Jeffrey Provenzano, P.E. Jim Shannon
Director, Environmental Services Department Budget Director
For questions, please contact Rajani Nair, Deputy Director, Environmental Services Department, at [email protected]
or (408) 799-7462.