Public Works Agency
www.santa-ana.org/pw
Item # 8
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
November 4, 2025
TOPIC: Appropriation Adjustment and Amendments to the Capital Improvement Program for Water Capital Improvement Projects
AGENDA TITLE
Appropriation Adjustment and Amendments to the Fiscal Year 2025-26 Capital Improvement Program for Water Improvement Projects (No. 26-6424, 26-6425, 26- 6426, 26-6427, 26-6428) (Non-General Fund)
RECOMMENDED ACTION
1. Approve an appropriation adjustment to recognize $25,000,000 of prior-year fund balance in the Public Works Water Revenue, Prior Year Carryforward and Water Utility Capital, Transfer from Fund 060 revenue accounts, and appropriate to the Water – Interfund Transfer, Transfer to Fund 066 and Water Utility Capital Projects, Water Capital Project expenditure accounts (requires five affirmative votes).
2. Approve amendments to the Fiscal Year 2025-26 Capital Improvement Program to add $2,400,000 of Water Revenue Bond funding for the Large Water Meter Services Program (No.26-6424), $2,430,000 for the Washington Well Improvements Phase II Project (No. 26-6425), $6,000,000 for the Citywide Facilities PFAS Improvements Project (No. 26-6426), $3,110,000 for the Citywide Water Improvements Project (No.26-6427), and $600,000 for the Fire Hydrant Improvements Project (No.26-6428).
GOVERNMENT CODE §84308 APPLIES: No
DISCUSSION
The Public Works Agency Water Resources Division (PWA) operates and maintains the City’s water and sanitary sewer systems. The water system is comprised of approximately 480 miles of water main, 21 groundwater wells, seven pump stations, 10 reservoirs with a storage capacity of 49 million gallons, four pressure regulating stations, and seven connection points to Metropolitan Water District. The system has an average daily demand of 30 million gallons from its roughly 45,500 metered service connections.
Appropriation Adjustment for Water Capital Improvement Projects November 4, 2025
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On June 4, 2024, City Council approved the sale of Water Revenue Bonds, Series 2024, to finance $40 million to fund a portion of the design, acquisition, and construction of certain improvements to the City’s water system. Staff had identified and outlined water capital improvement projects at that time, along with corresponding amounts. Per the terms of the Bond Agreement, the City may update the list of projects and replace improvements with other improvements or betterments to the water system, so long as they are for the acquisition, installation, and construction of water facilities. Industry best practices are to spend bond revenue prior to other sources of revenue, as well as redefining priorities on a regular basis. As such, staff evaluated previously identified projects and reprioritized projects based on current needs and project delivery timelines to ensure the bond funds were spent expeditiously.
Staff recommends that water bond funds be reallocated for the projects shown below.
Project
No. Project Name Original Bond
Allocation
Updated Bond
Allocation
16-6460 Advanced Water Meters $ 15,000,000 $ 13,310,000 N/A Walnut Pump Station PFAS
Improvements $ 5,000,000 $ 0
N/A Garthe Pump Station Improvements $ 5,000,000 $ 0
26-6424 Large Water Services Vault & Meter
Apparatus Improvements $ 8,000,000 $ 2,400,000
26-6425 Washington Well Improvements –
Phase II $ 6,000,000 $ 2,430,000
N/A Citywide Facilities Electrical
Improvements $ 1,000,000 $ 0
13-6433 Well 32 Rehabilitation $ 0 $ 4,850,000
15-6445 Bristol Street Water Main
Improvements Phase 3A $ 0 $ 1,000,000
18-6491 Well 29 Improvements $ 0 $ 3,000,000
19-6499 Bristol Street Water Main
Improvements Phase 4 $ 0 $ 2,300,000
26-6426 Citywide Facilities PFAS
Improvements $ 0 $ 6,000,000
19-6428 Lacy Neighborhood Water Main
Improvements $ 0 $ 1,000,000
26-6427 Citywide Water Improvements $ 0 $ 3,110,000
26-6428 Fire Hydrant Improvements $ 0 $ 600,000
Total $ 40,000,000 $ 40,000,000
Reductions in bond funding allocations for several of the projects, and new allocations for other projects, is due to a variety of factors including the establishment of the Public Works Construction Services Section. This new section provides the City with a lower- cost, in-house delivery method to complete projects in the near term.
Appropriation Adjustment for Water Capital Improvement Projects November 4, 2025
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Other projects that are proposed for bond fund allocations have been reprioritized due to their current project phase and ability to be completed in a timely manner with the addition of bond funding.
The reallocation of water bond funds is as follows:
Advanced Water Meters (No. 16-6460)
This project is substantially complete and did not require the full funding amount previously identified. The unused bond funds will be reallocated to other projects. Walnut Pump Station PFAS Improvements
This project will be completed by the Orange County Water District. The project is under design and is expected to commence construction in 2027. The City’s portion of the funding is being reallocated to support the completion of other priority projects in the Capital Improvement Program (CIP) that are currently awaiting funding.
Garthe Pump Station Improvements
This project will be completed by the Orange County Water District. The project is under design and is expected to commence construction in 2027. The City’s portion of the funding is being reallocated to support the completion of other priority projects in the Capital Improvement Program (CIP) that are currently awaiting funding.
Large Water Services Vault & Meter Apparatus Improvements (No. 26-6424) The project will replace large water meters, valves, and other associated appurtenances for water meters 3” and greater. Meters of this size typically serve commercial, industrial, or multi-family customers, and although they only make up approximately 10% of the total water customers, they account for nearly 30% of the Water Enterprises’ annual revenue. Additionally, this project will provide funding for the repair of meter vaults and/or vault decks that have become structurally comprised and may pose a safety hazard. The budget for this project has been significantly reduced as a result of the cost savings from utilizing the newly created in-house Construction Services Section. The cost savings are being reallocated to support the completion of other priority projects in the Capital Improvement Program (CIP) that are currently awaiting funding. Washington Well Improvements – Phase II (No. 26-6425)
This project consists of constructing and equipping the newly-drilled Washington Well, which will provide a much-needed, new groundwater source to the northeastern portion of the City. The project is currently in the preliminary design phase, with completion of the full design expected in fall 2026. With the chosen design-bid-build project delivery method, staff intends to use bond funds for the design phase and will identify a funding source for the construction phase at a Appropriation Adjustment for Water Capital Improvement Projects November 4, 2025
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later date. This methodology ensures bond funds are spent expeditiously on an active phase of the project.
Citywide Facilities Electrical Improvements
The original scope of this project was intended to support electrical upgrades and modifications at water production facilities. However, these City-funded improvements are now being incorporated into the broader Citywide PFAS Improvements Project (No. 26-6426), identified below, which will address electrical, control, and instrumentation needs as part of overall enhancements to water production facilities.
Well 32 Rehabilitation (No. 13-6433)
The project is currently in the construction phase and is expected to be completed in the near term. In order to expeditiously expend water bond funds, staff recommends reprogramming bond funds to this project. Bristol Street Water Main Improvements Phase 3A (No. 15-6445) The project is currently in the construction phase and is expected to be completed in the near term. In order to expeditiously expend water bond funds, staff recommends reprogramming bond funds to this project. Well 29 Improvements (No. 18-6491)
The project is currently in the construction phase and is expected to be completed in the near term. In order to expeditiously expend water bond funds, staff recommends reprogramming bond funds to this project. Bristol Street Water Main Improvements Phase 4 (No. 19-6499) The project is currently in the construction phase and is expected to be completed in the near term. In order to expeditiously expend water bond funds, staff recommends reprogramming bond funds to this project. Citywide Facilities PFAS Improvements Project (No. 26-6426) Due to the presence per- and polyfluoroalkyl (PFAS) substances, treatment facilities have been constructed, or are in the process of being constructed, at several of the City well sites in order to introduce water pumped from the groundwater basin into the City’s distribution system. This project is currently in the planning, design, and construction phases and will include site-specific modifications needed to support PFAS treatment operations, such as electrical upgrades and control and instrumentation improvements. These elements are outside the funding scope of the Orange County Water District’s PFAS Treatment Program, and therefore are being implemented with City funds to ensure system compatibility and operational reliability. All improvements will be completed within the same timeframes as other projects identified for bond fund expenditure.
Appropriation Adjustment for Water Capital Improvement Projects November 4, 2025
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Lacy Neighborhood Water Main Improvements (No. 19-6428) The project will replace water mains and related appurtenances, such as shutoff valves and service lines, in an area that has experienced system failures and has infrastructure identified to have exceeded its expected life. This project will be completed in-house by the Construction Services Section. Citywide Water Improvements Project (No. 26-6427)
The citywide water improvements will focus on the replacement of water mains and related appurtenances, such as shutoff valves and service lines, that have either exceeded their expected life or are known to be damaged. This project will be completed in-house by the Construction Services Section. Fire Hydrant Improvements Project (No. 26-6428)
The project will replace aging fire hydrants and associated fire suppression infrastructure to increase system reliability and ensure the system continues to meet flow requirement regulations. This project will be completed in-house by the Construction Services Section.
Of the $40 million in water bond funds received, a total of $15 million was previously appropriated upon City Council’s approval on July 16, 2024 for expenditure on the Automated Metering Infrastructure Project (No. 16-6460). Staff recommends approval of the appropriation adjustment for the remaining $25 million of water bond funds totaling $40 million along with the approval of the Capital Improvement Program amendments (Exhibit 1). Approval of the appropriation adjustment will fully fund the projects listed and allow for expedient project delivery.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
Approval of the requested appropriation adjustment will recognize $25,000,000 from prior year fund balance in the Public Works Water Revenue, Prior Year Carryforward revenue account (No. 06017002-50001) and Water Utility Capital, Transfer from Fund 060 revenue account (No. 06617002-59000), and appropriate the same amount to the Water – Interfund Transfer, Transfer to Fund 066 (No. 06017019-68000) and Acquisition & Construction, Water Utility Capital Projects, Water Capital Project expenditure account (No. 06617647-66301). Any remaining balances not expended at the end of the current fiscal year will be presented to City Council for approval of carryovers to Fiscal Year 2026-2027.
Appropriation Adjustment for Water Capital Improvement Projects November 4, 2025
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Fiscal
Year
Accounting Unit
- Account No.
(Project No.)
Fund
Description
Accounting Unit -
Account No.
Description
Amount
Appropriation Adjustment
2025-26 06617647-66301
(Various)
Acquisition &
Construction
Water Utility Capital
Projects, Water
Capital Project
$ 25,000,000
Total $ 25,000,000
EXHIBIT(S)
1. FY 2025-26 Capital Improvement Project Worksheets
Submitted By: Rodolfo Rosas, P.E., Acting Executive Director – Public Works Agency Approved By: Alvaro Nuñez, City Manager